SPECIAL NOTE REGARDING FORWARD—LOOKING STATEMENTS
On one or more occasions, we may make statements in
this Quarterly Report on Form 10-Q regarding our assumptions, projections,
expectations, targets, intentions or beliefs about future events. All statements
other than statements of historical facts, included or incorporated by
reference herein relating to management’s current expectations of future
financial performance, continued growth, changes in economic conditions or
capital markets and changes in customer usage patterns and preferences are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. On September 14, 2003, NorthWestern Corporation filed a voluntary petition
for relief under the provisions of Chapter 11 of the Federal Bankruptcy Code in
the United States Bankruptcy Court for the District of Delaware. On May 4,
2004, our subsidiary, Netexit, Inc. (f/k/a Expanets, Inc.) filed a voluntary
petition for relief under the provisions of Chapter 11 of the Federal
Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware.
Words or phrases
such as “anticipates,” “may,” “will,” “should,” “believes,” “estimates,”
“expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely
result,” “will continue” or similar expressions identify forward-looking
statements. Forward-looking statements involve risks and uncertainties which
could cause actual results or outcomes to differ materially from those
expressed. We caution that while we make such statements in good faith and we
believe such statements are based on reasonable assumptions, including without
limitation, management’s examination of historical operating trends, data
contained in records and other data available from third parties, we cannot
assure you that our projections will be achieved. Factors that may cause such
differences include but are not limited to:
(i) our common stock will be cancelled and our
trust preferred securities will be restructured in a manner that will eliminate
or very substantially reduce any remaining value. The sale of noncore assets
does not change the fact that our common stock has no value. Accordingly, we urge that appropriate caution
be exercised with respect to existing and future investments in any of our
liabilities and/or securities;
(ii) our ability to successfully develop,
prosecute, confirm and consummate a plan of reorganization, emerge from
bankruptcy as a going concern and avoid liquidation under the Federal Bankruptcy Code;
(iii) risks associated with third parties seeking
and obtaining Bankruptcy Court approval for the appointment of a Chapter 11
trustee or to convert the case to a Chapter 7 proceeding;
(iv) our ability to operate pursuant to the terms
of our debtor-in-possession financing facility arranged by us with Bank One,
N.A. (the DIP Facility) and any replacement facility and other financing and
contractual arrangements;
(v) our ability to obtain Bankruptcy Court
approval with respect to material motions in the Chapter 11 proceeding from
time to time;
(vi) our ability to obtain the support of certain
subordinated and equity stakeholders of the company for a plan of reorganization,
which may be difficult in light of our inability to preserve any material value
in our common equity and our trust preferred securities in a plan of
reorganization;
(vii) our ability to offset the negative effects
that the filing for reorganization under Chapter 11 has had, or may have, on
our business, management and employees including constraints placed on
available capital;
(viii) our ability to obtain and maintain normal
terms with vendors and service providers;
(ix) our ability to maintain contracts, including
leases, that are critical to our operations;
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(x) the potential adverse impact of the Chapter 11
case on our liquidity or results of operations;
(xi) our ability to develop a long-term strategy
and our ability to fund and execute our business plan;
(xii) our ability to avoid or mitigate an adverse
judgment against us in (1) that certain lawsuit seeking to recover assets on
behalf of Clark Fork and Blackfoot LLC filed by Magten Asset Management
Corporation and Law Debenture Trust of New York and (2) that pending litigation
styled as the McGreevey et al v. The Montana
Power Company;
(xiii) our ability to avoid or mitigate material
uninsured monetary judgments, or other adverse judgments, against us in
(1) the shareholder class action lawsuit
relating to the disposition of the generating and energy-related assets by The
Montana Power Company, excluding our acquisition of the electric and natural
gas transmission and distribution business formerly held by The Montana Power
Company, together with ERISA litigation regarding The Montana Power Company
Employee Stock Ownership Plan and 401(k) plan and (2) existing shareholder
and derivative litigation or any additional litigation and regulatory action,
including the initiation by the Securities and Exchange Commission (SEC) of a
formal investigation, in connection with the restatement of our 2002 quarterly
financial statements, any of which could have a material adverse affect on our
liquidity, results of operations and financial condition;
General Factors
(xiv) our ability to maintain an effective internal
controls structure;
(xv) our ability to attract, motivate and/or retain
key employees;
(xvi) potential additional adverse federal, state,
or local legislation or regulation or adverse determinations by regulators,
including the final order of the Montana Public Service Commission (MPSC)
disallowing the recovery of $6.2 million of natural gas costs we incurred
during the 2003 tracker year, and an interim order disallowing the recovery of
approximately $4.6 million of natural gas costs during the 2004 tracker year,
which has had and could continue to have a material adverse affect on our
liquidity, results of operations and financial condition;
(xvii) unscheduled generation outages, maintenance or
repairs which may reduce revenues and increase cost of sales or may require
additional capital expenditures or other increased operating costs;
(xviii) unanticipated changes in commodity prices or
in fuel supply costs or availability due to higher demand, shortages, weather
conditions, transportation problems or other developments, in combination with
reduced availability of trade credit, may reduce revenues or may increase
operating costs, each of which would adversely affect our liquidity;
(xix) increases in interest rates, which will
increase our cost of borrowing;
(xx) adverse changes in general economic and
competitive conditions in our service territories; and
(xxi) certain other business uncertainties related
to the occurrence of natural disasters, war, hostilities and the threat of
terrorist actions.
We have attempted to identify, in context, certain of
the factors that we believe may cause actual future experience and results to
differ materially from our current expectation regarding the relevant matter or
subject area. In addition to the items specifically discussed above, our
business and results of operations are subject to the uncertainties described
under the caption “Risk Factors” which is a part of the disclosure included in
Item 2 of this Quarterly Report entitled “Management’s Discussion and Analysis
of Financial Condition and Results of Operations.”
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From time to time, oral or written forward-looking
statements are also included in our reports on Forms 10-K, 10-Q and 8-K, Proxy
Statements on Schedule 14A, press releases and other materials released to
the public. Although we believe that at the time made, the expectations
reflected in all of these forward-looking statements are and will be
reasonable, any or all of the forward-looking statements in this quarterly
report on Form 10-Q, our reports on Forms 10-K and 8-K, our Proxy
Statements on Schedule 14A and any other public statements that are made
by us may prove to be incorrect. This may occur as a result of inaccurate
assumptions or as a consequence of known or unknown risks and uncertainties.
Many factors discussed in this Form 10-Q, certain of which are beyond our
control, will be important in determining our future performance. Consequently,
actual results may differ materially from those that might be anticipated from
forward-looking statements. In light of these and other uncertainties, you
should not regard the inclusion of a forward-looking statement in this
Form 10-Q or other public communications that we might make as a representation
by us that our plans and objectives will be achieved, and you should not place
undue reliance on such forward-looking statements.
We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. However, your attention is directed to any further
disclosures made on related subjects in our subsequent annual and periodic
reports filed with the SEC on Forms 10-K, 10-Q and 8-K and Proxy Statements on
Schedule 14A.
Unless the context
requires otherwise, references to “we,” “us,” “our,” “NorthWestern Corporation”
and “NorthWestern” refer specifically to NorthWestern Corporation and its
subsidiaries.
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