Xcel Energy Inc.

and for the duration of the call, your lines will be in a listen-only mode. If you require assistance at any point, please press star zero and you'll be connected to an operator. You will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question. Questions will only be taken from institutional investors. Reporters can contact media relations with inquiries and individual investors and others can reach out to Investor Relations. I'll now turn the call over to Paul Johnson, Vice President, Treasurer, and Investor Relations. Please go ahead.

Good morning. Welcome to Xcel Energy's 2023 fourth quarter earnings call. Joining me today are Bob Frenzel, Chairman, President, Chief Executive Officer, and Brian Van Abel, Executive Vice President, Chief Financial Officer. In addition, we have other members of the management team in the room to answer your questions if needed. This morning, we will review our 23 results and highlights share recent business and regulatory updates, and provide updates on our long-term growth plans. Slides that accompany today's call are available on our website. As a reminder, some of the comments during today's call may contain forward-looking information. Significant factors that could cause results to differ from those anticipated are described in our earnings release and our SEC filings. Today we'll discuss certain metrics that are non-GAAP measures. Information on the comparable GAAP measures and reconciliations are included in our earnings In the fourth quarter, Excel implemented several workforce actions to streamline the organization, ensure resources are aligned with business and customer needs to ensure our long-term success. Excel initiated a voluntary retirement program under which 400 non-bargaining employees retired. In addition, we eliminated 150 non-bargaining positions. As a result, we recorded a workforce reduction expense of $72 million, or $0.09 per share, in the fourth quarter of 23. Also in 23, we recorded a charge of $35 million, or 5 cents per share, related to a legal dispute between Core and Xcel Energy regarding prior year operations at the Comanche III coal plant. Given the non-recurring nature of these items, both have been excluded from ongoing earnings. As a result, our GAAP earnings were $3.21 per share, while ongoing earnings, which exclude these non-recurring charges, were $3.35 per share. All further discussion in this earnings call will focus on ongoing earnings. For more information on this, please see the disclosures in our earnings release. With that, I'll turn the call over to Bob.

Thanks, Paul, and good morning, everybody. We had another successful year at Xcel Energy, continuing to provide our customers with safe, clean, reliable, and affordable energy while delivering operational and financial performance. In 2023, we executed on the largest capital program in Xcel Energy history, investing approximately $6 billion to improve resiliency and enabling clean energy for our customers, while delivering economic growth and vitality for our communities. Our investments and operations enabled ongoing earnings of $3.35 per share, representing the 19th consecutive year of meeting or exceeding our earnings guidance. Meeting our financial commitments is critical to maintaining a competitive cost to capital, which benefits our customers as we access the capital markets to fund our operations. In December, we received approval for our groundbreaking clean energy portfolio with over 5,800 megawatts of new generation resources. This $4.8 billion of new generation investment, which when coupled with the necessary transmission represents almost an $8 billion worth of commitments, in Colorado to deliver a cleaner energy economy. I'm proud of how our teams partnered with so many stakeholders to deliver on these achievements. And as I look back on the year, we accomplished so many other great outcomes. While the final values aren't in yet, our safety scores improved, and we believe we'll be in the top quartile of U.S. utilities for delivering reliable electricity to our customers. Across our wind fleet, we continue to deliver strong net capacity performance and exceeded our corporate availability target for the third consecutive year. We navigated a very busy regulatory calendar resolving multiple rate cases and reached a pending settlement in our Texas electric rate case. We followed our clean heat plan in Colorado and our natural gas innovation plan in Minnesota providing a framework in both of those states to achieve net zero greenhouse gas emissions for our natural gas customers. We've approved transportation electrification programs in New Mexico. and in Wisconsin, along with updated transportation plans pending commission approval in both Minnesota and Colorado. We were partners in over $1.5 billion of awards by the Department of Energy to support the Heartland Hydrogen Hub, wildfire and extreme weather resiliency, form energy long-duration energy storage pilots, and additional transmission as part of the MISO SPP SEAMS projects. These grants will lower the cost of these clean energy and resiliency projects for our customers. In 2023, we signed agreements for data centers with Meta in Minnesota and QTS in Colorado. Data center and AI-driven demand continue to be a low driver on our system with several gigawatts in the pipeline across our footprint. In Minnesota, we received approvals for an additional 250 megawatts of solar and our 10-megawatt 100-hour form energy battery pilot, both at our retiring Sherco coal facility. We have active RFPs for over 2,000 megawatts of renewable resources across our operating companies, which we expect resolution on later this year. We also filed resource plans in our SPS company, which could add an additional 5,000 to 10,000 megawatts to our system by 2030. In December, we retired Unit 2 at our Sherco coal facility, while continuing the trend of no personnel layoffs at our retiring coal facilities over the past 15 years. We reduced carbon emissions for the electric utility by 53% as compared to a 2005 baseline, on track with our goals for 2030 and 2050. All the while, our customer bills remain amongst the lowest in the country. Over the past five years, the average Xcel Energy residential, electric, and natural gas bills are 28% and 14% below the national average respectively. And over the last 10 years, we've kept our annual residential, electric, and natural gas bill increases to 1.8 and 1.1% respectively, well below the rate of inflation. We're actively involved in our communities. as our employees, contractors, and retirees provided more than $11 million and volunteered over 40,000 hours to support charitable organizations across our footprint. We initiated 18 economic development projects for our communities, which are projected to create more than $2.4 billion in capital investments and 1,400 jobs. For the seventh consecutive year, we received a top score from Human Rights Campaign Foundation's Corporate Equality Index, the nation's foremost benchmarking survey measuring corporate policies and practices related to LGBTQ plus workplace equality. And finally, we received several other recognitions, including being named a top military employer by multiple organizations and one of the world's most admired companies by Fortune magazine. We're proud of these achievements, which reflect operational excellence and strong policy alignment, allowing Xcel Energy to provide a valuable product with significant benefits to our customers, our communities, our employees, and our shareholders.