NiSource Inc

Thank you for standing by. My name is John and I'll be your conference operator for today. At this time, I would like to welcome everyone to the second quarter NYSource earnings conference call 2024. 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 would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Mr. Chris Turnier, Director of Investor Relations. Please go ahead.

Good morning and welcome to the NYSource Second Quarter 2024 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, NYSource Utilities, Melody Birmingham. The purpose of this presentation is to review NYSource's financial performance for the second quarter of 2024, 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 forward 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 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.

Thank you, Chris, and good morning, everyone. I'll begin on slide three. The NYSource investment thesis is simple. We serve our customers by delivering safe and reliable energy at an affordable price. Affordable energy requires efficient capital deployment, safe asset operations, and constructive regulatory recovery mechanisms. These fundamentals generate competitive returns while enhancing our balance sheet position. A trailing 12-month earned ROE at the NYSource level was 10.3%, demonstrating our focus on shareholder returns despite rapidly growing deployed capital. This is a gap number with an adjustment made only to normalize weather. Slide 4 shows our key priorities. We reported second quarter 2024 adjusted EPS of 21 cents. We are reaffirming 2024 adjusted EPS guidance of $1.70 to $1.74, and we now expect to achieve the upper half of this range. We are also reaffirming annual 2023 to 2028 guidance for adjusted EPS growth of 6% to 8% for all years of the plan and rate-based growth of 8% to 10%. We continue to target SFO to debt of 14 to 16% in all years of the plan. Our superior regulatory and stakeholder foundation is differentiated. We have a long history of working collaboratively to deliver value across diverse constituencies. A huge effort is made to communicate proactively with stakeholders and demonstrate the value of our operations and investments on an ongoing basis, both during and between full rate cases. while also incorporating a balanced perspective from many of our participating stakeholders. Engaging with stakeholders enhances alignment, providing advanced notice of upcoming changes, often helping to pave the way for stakeholder support. Balance sheet flexibility remains on this page for a reason. Late last year, We raised over $2 billion in minority interest funding and projected up to $600 million of common equity issuance for 2024, to which we've made great progress. We have also been active in the hybrid security market last quarter. NYSource is prepared for unforeseen challenges and opportunities. We have regularly discussed our upside CapEx investment programs for the past several quarters. Recently, we have seen an acceleration of customer interest in our northern Indiana service area. In June, Governor Holcomb of Indiana announced plans for a significant new data center in the NIPSCO footprint following granting of a state sales tax exemption. This is the fourth data center announcement statewide this year and just one of the many indications of customer interest and stakeholder support for NIPSCO. Indiana offers many attractive features to data center developers. Access to infrastructure, including roads and water, land, predictable climate and weather, low cost of living, stable and low taxes, and supportive regulation in government are just a few. We believe data center development can enhance our local tax base, diversify the employment base across the state of Indiana, and provide greater value to existing customers and shareholders. We are also uniquely positioned to be the convener of key stakeholders in serving the broader public interest. This puts us at the precipice of discussions on data center advancement in a balanced and thoughtful manner. Vertically integrated utilities like NIPSCO are part of an interdependent group of communities and stakeholders, and we'll be thoughtful about our system safety, reliability, and cost allocation for all our customers. We will move as quickly as possible while maintaining the integrity of our commercial planning, regulatory procurement, and operational execution processes. Please turn to slide five. In July, several new IT applications went live at NIPSCO Electric Operations. These are the first stages of rollout across categories of technology investment and are the culmination of work beginning back in 2022. Major software programs such as these support safer and more efficient work practices. The new systems were quickly put to the test during severe July weather and performed as designed. I am pleased to report on this successful launch and look forward to upcoming rollouts across different areas of the organization. This is only one piece of our Operational Excellence Initiative. Project Apollo continues to find efficiencies throughout the organization after ramping up last year. Stable O&M over our plan horizon continues to be a part of achieving our financial commitments. Last month, a major windstorm impacted our Indiana service area, bringing tornadic activity, wind speeds up to 90 miles per hour, and heavy rainfall. Our electric operations team monitors evolving weather patterns and prepares resources in advance of storms, including engagement of contractors and mutual aid crews from neighboring utilities in Michigan and Wisconsin. Our preparation and around-the-clock response involved 400 line workers and 86 tree trimming crews, enabling a successful restoration. I want to thank each and every employee and contractor for their tireless dedication to restoring service and safety across our communities. In summary, the NYSource business plan offers a differentiated opportunity to return value to all stakeholders. Our teams continue to deliver on our commitments, financially, operationally, and being a trusted business partner to customers and employees. Beyond keeping our plans on track, our teams are vigilantly seeking enhancements to an already premium plan and ways to enhance value as we move forward. I'd now like to turn the call over to Melody.