Northwest Natural Holding Company

Good morning and thank you all for attending the Northwest Natural Holdings Company second quarter 2025 earnings call. My name is Brika and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to your host, Nikki Sparley, Head of Investor Relations. Thank you. You may proceed, Nikki.

Thank you. Good morning and welcome to our second quarter 2025 earnings call. A presentation for today's call is available on our investor relations website at irnwnaturalholdings.com. And following this call, a recording will also be available on our website. Turning to slide two, as a reminder, some things that will be said this morning contain forward-looking statements. They are based on management's assumptions, which may or may not occur For a complete list of cautionary statements, refer to the language at the end of our press release. Additionally, our risk factors are provided in our 10Q and 10K filings. We will also refer to certain non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP results, please see the slides that accompany today's call, which are available on the Investor Relations page of our website. Please note our guidance assumes continued customer growth, average weather conditions, and no significant changes in prevailing regulatory policies, mechanisms, or assumed outcomes, or significant changes in local, state, or federal laws, legislation, or regulations. For context, we have three business segments, our Northwest Natural Gas Utility, our Sea Energy Gas Utility, and our Northwest Natural Water Utility. Our other category includes our Interstate Storage Services and Asset Management Services, Northwest Natural Renewables, and Holding Company Expenses. As a reminder, our gas utility earnings are seasonal with a majority of revenues and earnings generated in the first and fourth quarters during the winter heating months. We expect to file our 10-Q later today. Please note these calls are designed for the financial community. If you are an investor and have additional questions after the call, please contact me directly at 503-721-2530. News media may contact David Roy at 503-610-7157. Moving to slide three. With us today are Justin Pelferman, President and Chief Executive Officer. and Ray Kasuba, Senior Vice President and Chief Financial Officer. Justin will provide an update on each of our businesses, and Ray will walk through our financial results, liquidity and financing, and guidance. After Justin and Ray's prepared remarks, they will be available along with other members of our executive team to answer your questions. With that, I will turn it over to Justin on slide four.

Thanks, Nikki. Good morning and welcome, everyone. I am pleased to report that Northwest Natural Holdings had a solid second quarter and first half of 2025. We continue to execute well on initiatives across all of our businesses, and we remain confident that our financial results are on track for the year. We reported adjusted net income of $2.28 per share in the first six months of 2025, compared to net income of $1.60 per share for the same period last year. Our combined utility customer growth rate was 10.6% for the 12 months ended June 30, 2025. This substantial growth was driven by our gas utilities in Texas. Northwest Natural Water also contributed incremental meter growth, posting a 5.8% increase. We reaffirmed our annual 2025 adjusted earnings guidance today and continue to expect our long-term earnings per share growth rate to be 4 to 6%. While our growth and financial metrics are strong, The real momentum lies in how we're executing against our strategic priorities for 2025. Moving to slide five. Our key initiatives are translating into tangible outcomes, and we're progressing well toward our full-year targets. Turning first to our Northwest Natural Gas Utility. After careful consideration, we filed an Oregon general rate case in December 2024 to recover our critical investments in gas infrastructure and expenses related to providing safe and reliable service to customers. Northwest Natural and parties have been working collaboratively and constructively. Last month, parties filed a settlement resolving Northwest Natural's revenue requirement components of the case. That included a revenue requirement increase of $21.3 million. The settlement also included a 50-50 capital structure, an ROE of 9.5%, an increase from the previous 9.4%, and a cost of capital of approximately 7.12%. In addition, rate base would increase $144 million since the last case for a total of $2.2 billion. We expect an order from the Commission on the full rate case this fall, with rates effective October 31st. We carefully consider the effect on customer bills and broader affordability concerns, and the ending result of the case is expected to be a relatively modest 2.5% rate increase. Taking into account this rate increase and preliminary gas cost estimates, We expect Northwest Nashville residential customers this fall will be paying about the same as they did 20 years ago for their gas service. Turning to our C-Energy gas utility in Texas. C-Energy continues to produce strong customer growth and is hitting its financial targets. Perhaps most importantly, C-Energy posted a sizable increase to its customer backlog and now has signed contracts representing over 217,000 future meters. That backlog includes meters from the acquisition of Hughes Gas Resources, which we have rebranded as Pines Holdings, another fast-growing Texas gas utility. Pines added approximately 7,000 connections northeast of Houston with a contracted backlog of 12,000 meters. The integration has gone smoothly. On a combined basis, C-Energy and Pines served approximately 83,000 customers at June 30, 2025. While sea energy is about 10% of our business today, its high growth potential makes us optimistic about its future, and we anticipate sea energy to be an increasing portion of our business mix moving forward. Turning now to Northwest Natural Water. Collectively, our water and wastewater utility customer base grew 5.8% over the last 12 months, including three acquisitions. Our capex plan for 2025 continues to be robust as our utilities replace end of life infrastructure, improve our wastewater treatment facilities, and support clean water and continued growth in our communities. To recover on water investments, in 2025 we are working hard on rate cases at multiple water utilities, including in Idaho, Washington, and Oregon. We remain confident in the long-term earnings prospects of Northwest Natural Water. The business is making great progress on its customer growth, capex, and rate case goals for 2025. Now a brief update on Northwest Natural Renewables. Both of our renewable natural gas projects continue to run smoothly with current production levels meeting our expectations. These projects and our related fixed price offtake contracts with investment grade counterparties provided solid earnings and cash flows during the first half of 2025. We expect this to continue going forward. Importantly, our renewable gas business has no meaningful exposure to the RIN or LCFS markets. In conclusion, I am happy to report that all of our businesses are in a strong financial position and poised for future growth. With that, let me turn it over to Ray to cover the financials in more detail.