OGE Energy Corp

Hey, and thank you for standing by. Welcome to the Q4 2022 OGE Energy Corp Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1 1 again. please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jason Bailey, Director of Investor Relations. Please go ahead.

Thank you, Rivka, and good morning, everyone, and welcome to OGE Energy Corp's fourth quarter 2022 earnings call. With me today, I have Sean Trotsky, our Chairman, President, and CEO, and Brian Buckler, our CFO. In terms of the call today, we will first hear from Sean, followed by an explanation from Brian of financial results, and finally, as always, we will answer your questions. I'd like to remind you that this conference is being webcast, and you may follow along at OGE.com. In addition, the conference call and accompanying slides will be archived following the call on that same website. Before we begin the presentation, I'd like to direct your attention to the Safe Harbor Statement regarding forward-looking statements. This is an SEC requirement for financial statements and simply states that we cannot guarantee forward-looking financial results, but this is our best estimate to date. I will now turn the call over to Sean for his opening remarks. Sean? Thank you, Jason.

Good morning, everyone. Thank you for being with us this morning. Before we get started on our financial results, I want to take some time to highlight our team who safely delivers reliable, resilient, secure energy at low rates to our customers every day. Once again, in 2022, our team delivered results for our customers, our communities, and our shareholders, even as continued economic and inflationary pressure impacted all of us. I have confidence in our team and the company to deliver a great future for all of our stakeholders. We are pleased with the financial plan that we are presenting to you this morning and proud to extend our long-term earnings guidance another year into 2027 without the need for any additional equity. Let me be clear. The plan we've put together for 2023 is exactly in line with the commitment we made to you to consistently deliver 5% to 7% earnings per share growth at the electric company based off 2021's original midpoint. Brian will discuss more in a moment, but my message to you is this. We've certainly got this, and our sustainable business model provides numerous opportunities from driving load growth to grid investments and generation for many years to come. We are mindful of ensuring a smooth customer impact and delivering consistent growth. Turning to 2022's financial results, this morning we reported consolidated earnings of $3.32 per share for the year, including $2.19 per share for OG&E, a holding company loss of $0.03 per share, and earnings from natural gas midstream operations of $1.16. Now this will be the last time we report results from natural gas midstream operations as we have fully exited that business. We are pleased with how that investment has helped transform our company. Over the years, we've utilized cash from the midstream segment to reinvest in our core business. And in fact, the utility earnings today are larger than the entire company's earnings were just seven years ago. Today, I want to talk to you about four key aspects of our work that drive our results. safety, reliability, resilience, and affordability. Our solid performance this year is due to exceptional execution by our team who continually focused on safety and kept the energy flowing to the grid during a very hot summer. I am certainly proud of this superior safety performance while maintaining rates that are 13% below the regional and 21% below the national average. We've done our part too. I'm pleased to report our O&M per customer is 4% lower and 22% than just three years ago. There's been a lot of industry discussion about winter storm Elliott in December. Our fleet ran, and our customers experienced no impact thanks to the weather hardening and preparation we undertake. Again, I'm very proud of our team's work every day, particularly during the weather extremes we experience here in Oklahoma and Arkansas. We continue our grid and weather hardening investments that deliver great results for customers. Our grid enhancement investments benefited nearly 150,000 customers in 2022. And from a SADI perspective, over 20 automated restorations saved our customers more than 4 million customer minutes of interruptions. We built seven new substations, upgraded another nine, added 65 miles of transmission line, all to better serve our customers. This foundation powers our growing communities and economic development engine that has delivered 81 new projects in our service area that are projected to create more than 10,000 jobs and garner $4.2 billion in additional investment. This type of growth is not by accident. We set the stage for these results five years ago when we said investing in our communities would pay dividends for all stakeholders, customers, and shareholders alike. Our communities maintain strong unemployment rates and continue to attract expanding and new businesses that our low rates help secure. Our load forecast for 2023 continues to keep pace with the outstanding growth we've experienced over the last two years, and our long-term load forecast remains strong as our service area continues to grow. Today's macroeconomic environment continues to create pressure on our customers, and we remain committed to affordability and keeping bills low. We've doubled down on connecting customers to programs and services to help them manage their energy use. enrolling 100,000 customers in new-to-them programs in 2022. Let me just highlight a few. Our energy efficiency programs delivered 238,000 megawatt hours of savings in 2022 alone, weatherized another 3,000 homes, and our team connected OG&E customers to $41.5 million in bill assistance through federal, state, and local agencies, as well as our own company-sponsored programs. We're excited about the future and advancing innovation in Oklahoma and Arkansas. And recently, the Department of Energy encouraged the Halo Hydrogen Hub, a three-state partnership to build hydrogen infrastructure in the U.S., of which OG&E is a stakeholder, to apply for funding through the Investment in Infrastructure and Jobs Act. Additionally, OG&E is competing for two DOE grants as part of the IIJA for grid resilience and smart grid. After assessing our initial submissions, DOE encouraged us to submit full applications. Our investment plan gives us confidence in our ability to grow electric company earnings per share at a consistent rate of 5% to 7%. The investment opportunities I outlined earlier will serve to extend that level of consistent growth with a dedicated focus on reliability and affordability for our customers. We will release our inaugural corporate stewardship report next week, which highlights how we live our values, beliefs, and center our decisions on customer impact, support communities, steward the environment, and develop our employees to meet the energy needs of the future. We are excited about our story and how this report helps us tell it. I do want to close with a few important thoughts. We've accomplished a great deal over the last five years, particularly how nearly $4 billion in capital investments have produced significant results in reliability and resiliency with a 99.96% 6% system uptime. Technology has improved both operations and security. These achievements are underpinned by a continuous focus on safety and keeping affordability front and center for our customers with rates well below the regional and national averages. We are committed to growth for our communities, to serve our customers, and to financial growth for our shareholders and employees. All these pieces are really coming together. We built the economic development engine that's really driving this load growth. We've built one of the strongest balance sheets to fund this growth. And we've simplified our business by exiting the natural gas midstream business, all of which support our 5% to 7% growth level. Our team, and I'm biased, is the best in the business, focused on safety, taking care of each other and our communities, and delivering results for all stakeholders. I'm proud of each of them and the results they deliver. With that, I'll turn it over to you, Brian.