NiSource Inc

Turner, Head of Investor Relations. You may now proceed. Thank you.

Good morning and welcome to the NYSOR's fourth quarter 2023 investor call. Joining me today are President and Chief Executive Officer, Lloyd Yates, Executive Vice President and Chief Financial Officer, Sean Anderson, Executive Vice President of Strategy and Risk and Chief Commercial Officer, Michael Lures, and Executive Vice President and Group President, NYSOR's Utilities, Melody Birmingham. The purpose of this presentation is to review NYSource's financial performance for the fourth quarter of 2023, as well as provide an update on operations and growth drivers. Following 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 actual results to differ materially from those expressed in the statements. Information concerning such risks and uncertainties is included in the risk factors and MD&A sections of our periodic SEC filings. Additionally, some of the statements made on this 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 Lloyd.

Thanks, Chris. Good morning and thank you for joining us. I'm excited to be with you this morning to share outstanding financial results and to discuss the advancement of key business initiatives which are devoted and talented workforce delivered to support our customers, communities, and our shareholders across all of 2023. We began the year with a premium business plan represented by the value proposition you see on slide three. The bottom line is the NYSource team delivered. You'll notice successful execution of these key initiatives across the board. Let me provide a few highlights which fuel our resilient and sustaining business across all years of our plan. We executed our highest capex investment in 2023, exceeding our rate-based investment goals. As of the year end 2023, we had $18.8 billion of rate base, and we continue to forecast $3.3 to $3.5 billion of capital expenditures in 2024, and $16 billion over our five-year financial plan through 2028. Year over year, NOEPS growth achieved 9% increase and achieved the highest end of our guidance range. We are acutely focused on smart capital deployment and maximizing risk-adjusted returns and responsible rate-based investing through strong recovery mechanisms across our businesses. Project Apollo achieved this goal of over $50 million of cost savings initiatives. Perhaps more important than the amount of savings is the energy and support demonstrated by our people to build a continuous improvement mindset and enhance productivity by doing things safer, better, more efficiently, and with less cost. These initiatives contributed greatly to a total shareholder return which exceeded mid-cap and large-cap U.S. utility peers in 2023. For the three-year period, total shareholder return was 10.1% compound annual growth rate versus 5% for peers, which is reflective of our strong earnings per share execution and future growth prospects. We are confident our commitments are resilient to rapidly changing business conditions, such as those seen by the utility industry over the last two years, in which our financial results have delivered over this period. We continue building a track record of growth and execution, and our commitment to investors, customers, employees is central to everything we do. On slide four, you'll see our key priorities. First, as you observed in our release, We delivered 2023 non-GAAP EPNO EPS of $1.60 versus the upper half of $1.54 to $1.60 revised guidance range. This underscores our execution of resilient financial commitments and a business plan which anticipated the broader headwinds our customers and our sector are facing today. This result was achieved despite a $128 million increase in interest expense and without sacrificing our SFO to debt commitment. Built on the strength of our infrastructure investment programs, we are raising 2024 guidance to $1.70 to $1.74 from $1.68 to $1.72, which we initiated in November. We continue to expect a 2023 through 2028 annual EPS growth rate of 6 to 8% supported by 8 to 10% annual rate based growth. The 2024 guidance range is refreshed, reflective of the annual growth expected of our strong year end 2023 financial results. Second, our superior regulatory and stakeholder foundation differentiates us from peers. NIPSCO received IURC approval of renewable CPC and amendments for several of our investments in January. Intervener testimony was also received last month for our NIPSCO gas rate case filed in October 2023. Third, Our balance sheet flexibility allows us to optimize cost of capital for customers and ultimate return on capital for shareholders. A key focus for 2023 was the NIPSCO Minority Interest Transaction with Blackstone Infrastructure Partners, which successfully closed in December. This transaction diversified capital fundraising for NYSORs from public capital markets and create a long-term partnership for years to come. Fourth, our company is experiencing a record investment cycle driven by safety, reliability, regulation, decarbonization, and modernization. Slide five details our annual capital expenditures across our six-state service territory. Our $16 billion five-year plan was introduced in November 2023, built on and extended our prior November 2022 $15 billion plan. It incorporates the electric generation, transmission, gas modernization, and economic development investments through 2028. The nature of our capital plan diversifies project risk, including our generation project investments, which lacked a large project execution risk on the scale seen elsewhere in the industry in recent years. We intend to layer in projects from our $2 billion upside capital program as they meet our threshold for base plan execution. Key rate case and capital rider activity is shown on slide 6. Our leading regulatory and stakeholder execution advances as we continue to work with stakeholders through rate case and tracker cycles to efficiently deploy capital investments and recover costs associated with these investments to drive value for customers, our communities, and our shareholders. The strength of our company continues to be working constructively with stakeholders and communities to safely and reliably deliver the energy they deserve and to be there for our customers when they need energy most. Since our last update, our Virginia SAVE Rider was approved and implemented, and our Kentucky SMRP Rider went into effect, subject to refund, together covering over $100 million of capital investment made for our customers. Slide seven shows how our operational excellence model is incorporated into decision-making in all areas of the company. last year we significantly improved safety performance by delivering a 14 reduction in days away restricted or transferred or dart and are on a path to achieving a goal of top decile performance additionally we recorded a 16 reduction to preventable vehicle collisions or pvcs as i already mentioned Project Apollo is generating enhanced productivity by doing things safer, better, more efficiently, and with less cost. The improvements in our work plans and cost profiles are expected to continue and sustain this year after an implementation that exceeded expectations in 2023. I have provided you with specific examples of project initiatives in recent quarters but want to highlight the underlying cultural change occurring throughout the company. The team continues to find new ways to improve every day, and this will generate value for all our stakeholders for decades. I am impressed with the continuous improvement mindset fueling our organization, and I am excited for our team as we continue this journey. Before we advance the call, I want to close this section with the following. I couldn't be more proud of our entire team and their devotion each and every day to support our nearly 4 million customers. With extreme cold weather across much of January, we delivered critical energy to keep our customers safe and warm. 2023 was a banner year for KnifeSource as the first full year of execution across our strategy shared in November 2022, and we delivered on all marks across the board. This sets the foundation for continued growth and safety and reliability for our customers and value for our shareholders, which we strongly believe in. Michael and Sean will dive into greater details on why 2023 was a successful year for our stakeholders and also why 2024 and beyond will be even better. Now, I'll turn the call over to Michael.