Black Hills (BKH) investor relations material

Deal rationale and strategic fit

• The merger creates a premier regional regulated electric and natural gas utility with a balanced business mix (61% electric, 39% gas), serving 2.1 million customers across eight contiguous states and diversifying jurisdictional exposure, with no single jurisdiction exceeding 33% of the combined rate base.

• The combination is driven by the need for scale in the utility sector, enabling the merged entity to better compete and capture growth opportunities, especially in data centers and large load customers.

• The contiguous service territory provides additional investment opportunities and supports economic development.

• Both companies have aligned cultures and operational priorities, aiming to deliver safe, reliable, and cost-effective energy with a highly skilled workforce.

• The merger leverages complementary strengths, such as generation build expertise and resource planning, to enhance operational performance and customer service.

Financial terms and conditions

• The transaction is an all-stock, tax-free merger with no transaction-related debt issuance, a pro forma market capitalization of $7.8 billion, and enterprise value of $15.4 billion.

• NorthWestern shareholders receive 0.98 shares of Black Hills for each NorthWestern share, representing a 4% premium based on recent average prices; post-merger, Black Hills shareholders will own 56% and NorthWestern shareholders 44% of the combined company.

• The combined company targets a long-term EPS growth rate of 5% to 7%, up from the standalone companies' 4% to 6%.

• The merger is expected to be accretive to both sets of shareholders in the first full year post-closing.

• $7.5 billion in capital investments are planned over five years, with over 75% allocated to gas and electric transmission and distribution.

Synergies and expected cost savings

• Increased scale and process improvements are expected to drive operating and cost efficiencies, supporting EPS accretion.

• Shared systems, coordinated operations, and supply chain procurement will optimize costs and support continued investment in safety and reliability.

• Some cost savings are embedded in the EPS growth outlook, though they are described as light.

• Enhanced negotiating power and resource leverage are anticipated for large customer loads and procurement.