NiSource Inc

Good morning. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Q4 2022 Night Force earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, please press star one again. Thank you. Chris Turner, Director of Investor Relations. You may begin.

Good morning and welcome to the NYSOR's fourth quarter 2022 investor call. Joining me today are Chief Executive Officer Lloyd Yates, Chief Financial Officer Donald Brown, Senior Vice President Strategy and Chief Risk Officer Sean Anderson, and Vice President of Investor Relations and Treasurer Randy Ulin. The purpose of this presentation is to review NYSOR's financial performance for the fourth quarter of 2022, as well as provide an update on our operations and growth drivers. Following our prepared remarks, we'll open the call to your questions. Slides for today's call are available in the investor relations section of our website. We would like to remind you that some of the statements made during this presentation will be full and looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements. Information concerning such risks and uncertainties is included in the MD&A and risk factors sections of our periodic SEC filings. Additionally, some of the statements made on the call relate to non-GAAP measures. Please refer to the supplemental slides, segment information, and full financial schedules for information on the most directly comparable GAAP measure and a reconciliation of these measures. I'd now like to turn the call over to Lori. Thanks, Chris.

Good morning, everyone, and thank you for joining us. By the end of the call, we want to leave you with three takeaways about our business and our future. I'd like to reiterate our competence, progress, and focus. Our confidence in our strategic plan and our strong progress in delivering on our commitments. Our progress on our regulatory initiatives, including pursuing a potential settlement in the NISCO electric rate case. And our focus on realizing the upside potential beyond our existing plan. We will touch on some of these incremental investment opportunities later in today's presentation turn to our performance 2022 was a year of relentless and consistent execution by our team among the keys to our success in 2022 was our comprehensive business review we believe the goals we laid out at our investor day are both significant and achievable and we will measure our progress against our premium utility growth plan each quarter Our results this quarter and in 2022 were strong and demonstrate that we are also a great start in the execution of our plan. We delivered earnings above our 2022 guidance and are raising our 2023 guidance. We also grew our dividends 6.4%. We remain on track to drive shareholder value through a compelling 9 to 11% total shareholder returns. At Investor Day, we committed to optimizing our cost profile and enhancing operational efficiency. We're doing that by transforming both our IC systems and the work processes they support. Behind processes and technology are people. I want to thank each of our employees for their performance throughout 20.2 and their deep commitment to serving our customers. Let's turn to slide five of the presentation and take a closer look at our 2022 key achievements. NYSource's 2022 earnings exceeded our guidance range. We delivered $1.47, nine guests, diluted NOEPS. That's up more than 7% from last year. It reflects our continued investment in safety, reliability, customer affordability, and sustainability. Looking to 2023, we've increased our guidance range to $1.54 to $1.60 per share. This reflects our outperformance in 2022 and confidence in 2023 execution. We're reaffirming our expectation of a 6% to 8% annual NOE EPS growth through 2027, as well as our annual 8% to 10% rate-based growth. Slide six illustrates 2023 guidance and our commitment to grow six to 8% annually through 2027. Driving this top tier growth are investments of $15 billion in regulated CapEx from 2023 through 2027. A high level summary of which you can see on slide seven. Looking out further, we continue to expect to invest $30 billion from 2023 to 2032. As I alluded to earlier, execution by regulatory teams continues to be a strength. In 2022, we filed four rate cases and resolved three in Pennsylvania, Maryland, and the Indiana gas case. In addition, the Ohio rate case concluded last month. These cases represent balanced outcomes supporting all stakeholders. Turning to page eight, we have the following key priorities for 2023. First, continue to enhance our focus on safety and operational excellence. Second, the successful sale of our minority interest in NIPSCO to strengthen our balance sheet. Next, a balanced outcome in the NIPSCO elected race case, which we will cover in a few moments. Fourth, driving efficiencies to achieve flat O&M spending to enhance customer affordability. These efforts will keep our customer rates sustainable with expected total annual rate increases that are in line with inflation. And finally, our commitment to delivering on our 2023 guidance. These are the priorities that we will keep top of mind throughout the year. On slide nine, you will see the additional investment opportunities NYSource may pursue in both near and long term. NYSource's investment opportunities include replacing pre-1985 plastic gas pipes, as well as gas transmission replacements and reconfirmations to comply with PHMSA regulations. In addition, Electric generation tax credit transferability and advanced gas nearing infrastructure also represent attractive opportunities for NISOs in the near term. Beyond 2027, we see the need to add electric generation capacity in the marketplace and to enhance electric grid hardening. Microelectric long-range transmission projects, electric transportation renewable gas infrastructure, And hydrogen production hubs also make up long-term and large-scale projects we will seek to participate in to enhance our investment portfolio and drive greater value for our customers. Now, let's turn to page 10 to review some fourth quarter and recent highlights from gas distribution operations. Columbia Gas of Ohio receives an order accepting the settlement in its rate case on January 26th. The order includes a revenue increase of $68.2 million net of riders. New rates will be affected on March 1st. The settlement in our Pennsylvania rate case was approved in December. It enables continuing investments in replacement of aging pipes and system upgrades needed to ensure service reliability and pipeline safety. New rates went into effect December 17th. Finally, Columbia Gas of Maryland receives an order in November approving this rate-based settlement. The settlement supports the company's continuing investments in infrastructure replacement and system upgrades. Now, for updates on our electric operations and renewables projects, I'd like to turn it over to Sean Anderson.