Q4 2023 NorthWestern Corp Earnings Call

This meeting is being recorded.

Speaker Change: Good afternoon, and thank you for joining northwestern energy group's year in 2023 financial results wet gas payment.

Speaker Change: Snyder from the director of corporate development, and Investor Relations Officer, Northwestern joining us today to walk you through the results and provide an overall update of Brian Bird, President and Chief Executive Officer, and Crystal Lail, Chief Financial Officer.

Speaker Change: All participant lines are currently muted after the presentation, we allow time for our Q&A session I will provide instructions for asking questions at that time, however, intend to ask a question.

Speaker Change: And are joining us by computer. Please send your zoom identity to your first and last name and firms. So we can call and you may need to let you know when your line is open.

Speaker Change: <unk> result had their leads and the release is available on our website at northwestern Energy Dotcom. We also released our 10-K pre market. This morning.

Speaker Change: Please note that this presentation. The company's press release these comments by presenters and responses to your questions may contain forward looking statements.

Speaker Change: I'll direct you to the disclosures contained within our SEC filings and the Safe Harbor provisions included in the second slide in this presentation.

Speaker Change: Please also note. This presentation includes non-GAAP financial measures. Please see the non-GAAP disclosures definitions and reconciliations also included in the presentation. Today. The webcast is being recorded the archived replay of today's webcast will be available for one year beginning at six P. M. Eastern time and can be found in the financial results section of our website.

Speaker Change: With that I'll hand, the presentation over to CEO Brian.

Brian B. Bird: Thanks, Travis first slide here, we talk about recent highlights we just had two days of board meetings.

Brian B. Bird: And one of the recent highlights.

Brian Russo: Our ability to serve our customers in the cold snap in the middle of January really that cold snap will be demonstrated two things one it demonstrated our need for capacity. So the importance of the Yellowstone County plant and the incremental colstrip that we'll be adding in one $1 26 of the first thing the second thing.

Need for capacity so the importance of the Yellowstone County plant and the incremental coal strip that we'll be adding in 126 was the first thing. The second thing is just a fantastic coordination of our operating folks to serve our customers when they need it most that means days of minus 45 degree weather very very poor.

Brian Russo: It's just a fantastic coordination of our operating folks to serve our customers when they need it most and stays at minus 45 degree weather very very proud of our team and our ability to serve our customers. So.

Out of our team and our ability to serve our customers. So the points on this particular page recent highlights reported GAAP diluted EPS of $3.22.

Brian Russo: The points on this particular page recent highlights.

Brian Russo: We reported GAAP diluted EPS of $3.22.

For the year and non-GAAP diluted EPS of $3 27.

Brian Russo: For the year and non-GAAP diluted EPS of $3.27.

We're affirming our 2024 diluted EPS guidance of $3 42.

Brian Russo: We're reaffirming our 2024 diluted EPS guidance of $3.42 to $3.62.

<unk> to $3 62.

We're also affirming our long term five year rate base and earnings per share growth rates targets of 4% to 6%.

Brian Russo: We're also affirming our long term five year rate base and earnings per share growth rates targets of 4% to 6%.

Also like to point out we had unanimous approval of multi party rate review settlement.

Brian Russo: Also like to point out we had unanimous approval of multi party rate, leaving settlements.

Montana, both our electric and natural gas rate reviews in South Dakota Electric rate review.

Brian Russo: Tanner, both our electric and natural gas rate reviews in South Dakota Electric rate review.

We completed the second and final phase of the holding company reorganization on January one 2024, certainly can't overlook the monumental task that was in the great work throughout our company to make that happen.

Brian Russo: We completed the second and final phase of the holding company reorganization items at January one 2024 inch certainly can't overlook the monumental task that was in the great work throughout the company to make that happen.

And we have also declared a dividend for the quarter 65 per share payable March 29, 2024 to shareholders of record as of March 15, 2024, and lastly, a recent highlight for US certainly we talked about it before but northwestern.

Brian Russo: And we have also declared a dividend for the quarter 65 cents per share payable March 2019, 2024 to shareholders of record as of March 15, 2024 and.

Brian Russo: And lastly, a recent highlight for us and certainly he talked about it before but northwestern.

Celebrating 100 hundred powerful years, you may recall back in 2012, Montana power celebrated its 100 year anniversary and are proud companies coming together and are collectively been serving our customers in our service territories for over 100 years.

Brian Russo: Celebrating 100, <unk> hundred powerful years may recall back in 2012, Montana power celebrated its <unk> anniversary and our proud companies coming together and are collectively and serving our customers in our service territories for over 100 years.

If I move forward to the next page I think about the great outcomes, we had in 2023, particularly the rate reviews and clarity associated with.

Brian Russo: Moving forward to the next page I think about the great outcomes, we had in 2023, particularly the rate reviews and clarity associated with.

Earnings growth on a going forward basis, it still surprises me to see a 5% dividend yield.

Brian Russo: Earnings growth on a going forward basis, it still surprises me to see a 5% dividend yield in terms of that clarity.

In terms of that clarity.

But with that is and where we sit today.

Brian Russo: But with that as said, where we sit today.

And a base capital plan with a 4% to 6% to 6% EPS growth rate based upon the capturing the value of $2 5 billion of investment.

And a base capital plan with a four 6% to 6% EPS growth rate with the time based upon the capturing the value of $2 5 billion of investment.

Provides a total return opportunity of 9% to 11%, which is fantastic. When you can put on top of that opportunities, we're focusing on and trying to also capture in our plan.

Provides a total return opportunity of 9% to 11% which is fantastic.

Brian Russo: Can put on top of that opportunities, we're focusing on and try to also capture in our plan.

Associated with accretive EPS.

Brian Russo: Associated with accretive EPS.

Projects associated with the FERC transmission incremental generating capacity.

Brian Russo: <unk> is assessing with both transmission incremental generate capacity.

I'm trying to a buyout certain power purchase agreements in two facilities and lastly.

Brian Russo: Trying to a buyout certain power purchase agreements with two at facilities and lastly.

Brian Russo: Electrification supporting economic development.

Electrification supporting economic development, many projects associated with that that we continue to stay focused on it.

Brian Russo: Many projects associated with that but we continue to stay focused on it with and being able to capture any of those observations over 11% total returns we feel very good about the opportunities for this company on a going forward basis.

And being able to capture any of those helps push us over 11% total return. So we feel very good about the opportunities for this company on a going forward basis.

Brian Russo: Still a tad surprised we sit here today with a five plus dividend yield with that I'm going to pass it to crystal.

Still a tad surprised we sit here today with a five plus dividend yield with that I'm going to pass it to crystal.

Crystal Lail: Thank you Brian spoken like a former CFO at below <unk>. So good afternoon, everyone and thank you for joining us to discuss our year end financial performance here, Brian with highlighting what felt like a year of a lot of execution and I can tell you on the fit out and all of that led to the financial performance that we're closing out here for an off peak event highlighting.

Thank you Brian spoken like a former CFO I believe so good afternoon, everyone and thank you for joining us to discuss our year end financial performance here, Brian with highlighting what felt like a year of a lot of execution I can tell you on the side of the house and all of that led to the financial performance that we're closing out here and I'll speak to that highlighting.

Crystal Lail: Specifically the element of regulatory execution and that theme will continue.

Speaker Change: Specifically the element of regulatory execution and that theme will continue.

Crystal Lail: Rob My remarks regarding our financial performance as Brian mentioned closing out the quarter on a non-GAAP basis, we reported EPS of $1 38, eight in Q4 of 2020 freed up versus a $1 13 in the fourth quarter of 2022.

Speaker Change: My remarks regarding our financial performance as Brian mentioned closing out the quarter on a non-GAAP basis, we reported EPS of $1 38 in Q4 of 2023 that versus $1 13, and the fourth quarter of 2022.

Speaker Change: For a full year perspective on 2023 on a non-GAAP basis, we delivered $3 27, and that's versus $3 18, and 2022 moving to slide seven for a bit more detail I'll talk about the fourth quarter and give you a better color there and then talk about the year and recap.

Crystal Lail: Full year perspective on 2023 on a non-GAAP basis, we deliver $3.27 of that versus a $3.18 in 2022.

Moving to slide seven for a bit more detail I'll talk about the fourth quarter and give you a bit of color. There and then talk about the year end recap at slide seven you will be a significant driver of that improved performance of 18 cents at the margin line in Q4, reflecting the impact of our regulatory execution that both on base rate. Then also are tracking.

Speaker Change: Slide seven Youll see a significant driver of that improved performance is 18th at the margin line in Q4, reflecting the impact of our regulatory execution. That's both on base rates and also our tracking mechanism.

Crystal Lail: And as I think about that both the supply pecan impact and also a property tax tracker. In addition, you'll see we have 11 sense of improvement in income taxes versus the prior period.

Speaker Change: About that both the supply pecan impact and also a property tax tracker. In addition, you will see we have 11 since ive been recruitment.

Speaker Change: Income taxes versus the prior period.

Crystal Lail: Driven by the release of a tax reserve, which is adjusted out and we'll talk about that in more detail in a minute here and then impact of the Montana rate revealed at notably I would mentioned that financial performance. Overall in Q4 was a bit stronger than we had expected driven by final clarity in the Montana rate review related to ultimate.

Speaker Change: Driven by the release of a tax reserve, which is adjusted out and we'll talk about that and more.

Speaker Change: More detail in a minute here and then impact of the Montana rate revealed notably I would mentioned that financial performance. Overall in Q4 was a bit stronger than we had expected driven by final clarity in the Montana rate review related to ultimately the pecan piece and retroactivity of that and also income taxes also we all.

Crystal Lail: <unk>, a pique him peace and retroactivity of that and also income taxes also we always have estimates in our numbers with regard to the impact of property taxes that are collected through.

We have estimates in our numbers with regard to the impact of property taxes that are collected through our built in Montana and had a bit of favorability there to moving to slide eight.

Crystal Lail: Our bills in Montana, and had a bit of favorability there to moving to slide eight.

Travis: As always we quantify for you, how we think about whether and how that impacted our results. We certainly see volumetric swings there and one three versus 22 definitely shows that <unk> swing in weather from what was favorable weather in 2022, you'll see that was three that we backed out versus here in Q4 of 'twenty three.

Crystal Lail: As always we quantify for you, how we think about whether and how that impacted our results. We certainly see volumetric slainte bear as one three versus 22 definitely shows that a ninth then swing in weather from what was the favorable weather in 2022, you'll see that with three fence that we backed out versus here in Q4 of 'twenty three it.

It was warm relatively so we thought <unk>.

Crystal Lail: With warm relatively so we thought the expense of unfavorable weather. This year, so versus normal Q4 success of unfavorable added back compared to last year, a brief sense of favorable you Havent ninth swaying in our performance related to weather. In addition, you see the release of the tax reserve as the.

Brian Russo: Unfavorable weather this year, so versus normal Q4 success of unfavorable <unk>.

Brian Russo: Added back compared to last year <unk>, a favorable if you havent <unk> swing in our performance related to weather. In addition, you see the release of the tax reserve.

Brian Russo: As discussed related to final close out of that.

Crystal Lail: Gus related to final build out of that.

Crystal Lail: Uncertain tax positions related to gas repair then you will see we have adjusted that out that is consistent with how we've handled these types of adjustments in the past the $3 2 million air whereby I think adjusted alcohol on a fourth quarter basis, you can see that leads to significant improvement over the prior period of $1 38 on a non-GAAP eight.

Brian Russo: Uncertain tax positions related to gas repairs and you will see we have adjusted that out that is consistent with how we've handled these types of adjustments in the past, so $3 2 million there or adjust.

Adjusted alcohol on a fourth quarter basis, you can see that leads to significant improvement over the prior period of $1 38 on a non-GAAP basis versus $1 13 last year or 22% moving to full year financial performance on slide 11.

The first is a $1 13 last year or 22% moving to full year financial performance on slide 11.

Brian Russo: Driven by somatic Lee the same types of things driving our numbers as drove Q4.

Crystal Lail: Driven by thematically the same types of things driving the higher numbers as drove Q4 'twenty of improvement overall before you get the share count dilution was driven by regulatory execution as they talked about here driving really recovering our costs that.

Brian Russo: <unk> <unk> of improvement overall before you get the share count dilution was driven by regulatory execution as we've talked about here driving really recovering our costs.

Brian Russo: That we need to serve customers and also improving our earned returns.

Crystal Lail: That we need to serve customers and also improving our own green bars.

Brian Russo: That margin improvement was the most significant portion of that offset by a 16.

Crystal Lail: That margin improvement was the most significant portion of that offset by a 16 2016.

Brian Russo: 16th swing in weather I'll say that fast.

Crystal Lail: 16th that swing in weather, I'll say that first and I'll speak to that in a little bit more detail, but the continuing theme of what happened in Q4 also that the same impact that we're seeing across the interesting industry of higher depreciation and the impact of higher interest rates and of course inflationary impacts on O&M that we are working hard to manage this improvement overall up 20.

Brian Russo: I'll speak to that in a little bit more detail, but the continuing theme of what happened in Q4 also the same impact that we're seeing across the interesting industry of higher depreciation and the impact of higher interest rates and of course inflationary impacts on O&M that we are working hard to manage this improvement.

<unk> overall of 'twenty versus 2022 was offset by 23 cents of share count dilution on a full year basis, moving to slide 11 for a bit more detail on the margin impact of that which is of course critically important to how we think about the business going forward.

Crystal Lail: Versus 2022 with offset by 23 cents a share count dilution on a full year basis, moving to slide 11 for a bit more detail on the margin impact of that which is of course critically important to how we think about the business going forward.

Crystal Lail: Execution of the Montana rate review impacted that first three columns as you see them here on slide 11, including that increase to base rates and also adjustments to our tracking mechanisms including.

Brian Russo: Execution of the Montana rate review impacted the first three columns as you see them here on slide 11, including that increase to base rates and also adjustments to our tracking mechanisms including.

Crystal Lail: The PJM and the property tax tracker, notably I've talked rather than late maybe about the peak counts at mechanisms in our earnings call frequently I'm sure you all recall that last year's nickels up year, where you're talking about an unfavorable impact of $7 2 million to us in 2022.

Brian Russo: The PJM and the property tax tracker, notably I've talked.

Brian Russo: <unk>, maybe about the PJM mechanism in our earnings call frequently I'm sure you all recall that last year as it closed out the year, we were talking about an unfavorable impact of $7 2 million to us in 2022 and here in 2023 on the backs of adjusting that base and also receiving a reasonable adjustment to retro.

Crystal Lail: And here in 2023 on the back that are adjusting that base and also receiving a reasonable adjustment to retroactively impact that in 2023, we have a favorable impact of $7 million. So a significant swing at versus the detriment. We had in our earnings last year or two favorability in 2023.

Brian Russo: Actively impact that in 2023, we have a favorable impact of $7 million. So a cigna against swing versus the detriment we had in our earnings last year or two favorability in 2023.

The 2023 P. Cam adjustment I would note did include recording an adjustment related to the final outcome in the Montana rate review that was favorable about $3 1 million offsetting that improvement as I've already spoken here with unfavorable weather during the period driving lower volume. So you can see a significant improvement overall at the margin level.

Brian Russo: The 2023 P. Cam adjustment I would note did include recording an adjustment related to the final outcome in the Montana rate review that was favorable about $3 1 million offsetting that improvement as I've already spoken to you was unfavorable weather during the period driving lower volumes. So you can see a significant improvement overall at the margin.

Crystal Lail: <unk>.

Brian Russo: <unk>.

Crystal Lail: Slide 12 shows again, how we depict and quantify that weather impact.

Crystal Lail: Slide 12 shows again, how we detect and quantify that weather impact. So for 2023, we had five of unfavorable weather impacting us.

Speaker Change: So for 2023, we had five of unfavorable weather impacting us in 2022 on a comparative basis, we have 11 of favorable you'll see on a year over year basis up 16 cents, a detrimental swing in weather as it relates to our overall numbers.

Crystal Lail: In 2022 on a comparative basis, we have 11 of favorable they'll be on a year over year basis up 16 cents a detrimental swing in weather as it relates to our overall numbers.

Crystal Lail: Hi.

Speaker Change: Overall performance here I also just would mentioned we had a tax item in Q1 that was adjusted out the tax item in Q4 of those two net to zero. So you can see on an overall basis strong performance in 2023, resulting on an adjusted non-GAAP basis were $3 27.

Crystal Lail: Overall performance here I also just had mentioned we had.

Crystal Lail: Last item in Q1 that was adjusted out the tax item in Q4, those two net to zero. So you can see on an overall basis strong performance in 2023, resulting on an adjusted non-GAAP basis was $3 and 27% versus $3.18 in 2022 or a two 8% improvement.

Crystal Lail: Versus $3, 18, and 2022 or a two 8% improvement.

Rob: So that closes out my comments on earnings for.

Speaker Change: So that closes out my comments on earnings.

Speaker Change: For 2023, and again I would just say in the base of unfavorable weather.

Rob: For 2023, and again I would just say in the face of unfavorable weather.

Speaker Change: And.

Rob: Timing of rates and final outcomes there. The most significant piece is working with our commissions on regulatory execution driving important improvement in our earnings results.

Speaker Change: Timing of rates and final outcome there the most significant needs of working with our commission and regulatory execution driving important improvement in our earnings result, and what we deliver to shareholders and importantly, as I flagged the balance sheet really on the next slide positioning us in a point of strength as we move forward. So as we closed out 12000.

What we deliver to shareholders and importantly, as I flagged the balance sheet really on the next slide positioning us in a point of strength as we move forward. So as we closed out 2023, we were at a 13, 4% SFO.

Speaker Change: 'twenty three we rate of 13.4% at the Boe.

Speaker Change: And have a very clear path in 2020 more to being above 14% in staying above that beyond that in our financial plan and we.

Crystal Lail: And have a very clear path in 2020 board to being above 14% in staying above that beyond that in their financial plans and we.

Crystal Lail: We have also affirmed and separated out our strong credit ratings in Q4, as we worked with the rating agencies in advance of our legal hold holding company reorganization, which I will speak to a little bit more in a minute.

Speaker Change: We have also affirmed and separated out our strong credit ratings in Q4. It we worked with the rating agencies in advance of our legal hold holding company reorganization, which I will speak to a little bit more in a minute.

Crystal Lail: Affirmed our credit ratings with each of the agencies and then with regard to 2020 for financing plans, we've talked about no equity in our plan. So a significant capital plan here to invest and deliver to our customers are supported by debt issuances, which will include a bit of refinancings.

Speaker Change: Affirmed our credit ratings with each of the agencies and then with regard to 2020 for financing plans, we've talked about no equity in our plans. So a significant capital plan here to invest and deliver to our customers are supported by debt issuances, which will include a bit of refinancing.

Crystal Lail: And then a very manageable overall financing plan to support that capital structure and leave us where we need to be and importantly in our balance sheet in a position of strength as we move forward.

Speaker Change: And then a very manageable overall financing plan to support that capital structure and leave us where we need to be and importantly in our balance sheet in a position of strength as we move forward.

Crystal Lail: Moving to slide 14 brands already mentioned overall.

Speaker Change: Moving to slide 14 brands already mentioned overall, the strength of our investor thesis and where we see our earnings growth rate.

Crystal Lail: <unk> of our Investor thesis, and where we see our earnings growth rate.

Speaker Change: At a 4% to 6% EPS growth, we had announced 2020 for guidance in Q4 of a $3 of boarding too fast at $3 62 Bank and we are reaffirming that here also no material changes in how we think about the business going forward and where we expect to be on an overall <unk>.

Crystal Lail: At a 4% to 6%.

Crystal Lail: <unk> growth, we had announced 2020 for guidance in Q4 of a $3.42 or $3.62 and we are reaffirming that here also no material changes in how we think about the business going forward and where we expect to be on an overall <unk> perspective, and all of this I think leaves us in a good spot from <unk>.

Speaker Change: Active in all of this I think leaves us in a good bought from both a shareholder perspective, and importantly to our customers as well to deliver it to them and a key piece of that as you think about by 15 in our capital plan is no material update for what we talked to you about when we released our guidance for 2024 enrolled at planned board, but overall the balanced plan with significant opportunities.

Crystal Lail: A shareholder perspective, and importantly to our customers as well to deliver to them and a key piece of that as you think about slide 13, and our capital plan is no material updates from what we talked to you about when we released our guidance for 2024 enrolled that planned board, but overall, it's a balanced plan with significant opportunities on both the electric and gas side, Andy and.

Speaker Change: On both the electric and gas side T. Andy and also some generation build out here as we've talked about we don't ever and believes and her plans until we know that we're doing them.

Crystal Lail: And also some generation build out here as we've talked about we don't ever include anything into our plans until we know that we're doing them when.

Crystal Lail: And we currently believe there is certainly upside to opportunity to plan, but it's balanced to provide us a strong balance sheet, a self funded plan managing the impact of customers at all overall rates, while importantly focused on the reliability needs of our customers as well.

Speaker Change: We currently believe there is certainly upside to opportunity as planned, but if balance to provide us a strong balance sheet adult funded plan managing the impact of customers at all overall rates, while importantly focused on the reliability needs of our customers as well.

Crystal Lail: My final close to final comment here South Dakota Electric rate review. Many of you know we filed that rate review in June of last year, We worked with the South Dakota Commission here.

Speaker Change: My final vocal.

Speaker Change: Both the vinyl Commie here South Dakota Electric rate review. Many of you know we filed that rate review in June of last year, we worked with the South critic mission here at Kroger and in January received approval of our settlement and implemented final rates on January 10, 2024, I would mentioned that in South Dakota, we have a very strong relationship with the South Dakota.

Crystal Lail: January received approval of our settlement and implemented final rates on January 10, 2024, I would mentioned that.

Crystal Lail: In South Dakota, we have a very strong relationship with the South Dakota Commission and staff, they're very fair regulators they hold us to a high standard but they also I appreciate the efficiency with which they worked through rate cases, and do their due diligence that we were able to close out that and implement our final rates in January of 2024 here and Youll see that final adjustment as of <unk>.

Speaker Change: Mission and Thats, a very fair regulators they hold it to a high standard but they also I appreciate the efficiency with which they worked through rate cases, and do their due diligence that we were able to close out that and implement our final rates in January of 2020 ordinary you'll see that final adjustment of $21 5 million dollar adjustment.

Crystal Lail: 21 $5 million adjustment.

Crystal Lail: Really it's notably the most important piece there.

Speaker Change: Rate relief, notably the most important piece there we manage O&M during that period and that's something we talked about the commission. They ask about the questions on that but it's a significant amount of investment in the state, including a gasket or similar deals on a smaller scale that we constructed during COVID-19 at all.

Crystal Lail: O&M during that period, and that's something we talked about the commission. They asked was lots of questions on that but it's a significant amount of investment in the state, including our gas Pete or similar deals on a smaller scale that we constructed during COVID-19 on time under budget and serving customers and they definitely see the importance of reliability. So overall.

Speaker Change: On time under budget, and serving customers and they definitely see the importance of reliability. So overall, a really good process with the South Dakota Commission that will impact and is reflected in our 2024 guidance.

Crystal Lail: Really good process with the South Dakota Commission that will impact and is reflected in our 2020 for guidance.

Speaker Change: And finally closing out my comments.

And finally closing out my comments, we also are in.

We also another element of our regulatory execution, we had filed with our commissions and received approval to complete a legal restructuring.

Speaker Change: Another element of our regulatory execution, we had filed with our commission and received approval to complete a legal restructuring I infer from our holding company as most of you know that is a structure similar to what how most of our peers are legally structured and so this completes that proper we effectuate. The final depth of that are basically moving into 2024.

Speaker Change: From a holding company as most of you know that is a structure similar to what how most of our peers are legally are structured and so this completes that process. We have fluctuated. The final steps of that you are basically moving into 2024 and this is just another significant area of moving forward, where we want to be positioned.

Speaker Change: And this is just another significant area of moving forward, where we want to be positioned.

Notably however, don't expect to see any differences from how we finance the business or move forward with this reorganization completed so with that I will turn it back to Brian for concluding remarks, alright crystal. Thank you. So much here just on this conclusion page I just want to say one thing I, we felt very very good about 2020 to Ruby and all that we accomplished.

Notably however, don't expect to see any differences from how we finance the business or move forward with this reorganization completed so with that I will turn it back to Brian for concluding remarks, alright crystal. Thank you. So much here just on this conclusion periods I just want to say one thing we feel very very good about 2023, and all that we accomplished.

Brian: First and foremost we had one of our best safety years as a company we continue to have high reliability for our customers.

Crystal Lail: First and foremost we had one of our best safety years.

Crystal Lail: As a company we continue to have high reliability for our customers to very good rate reviews in both Montana, and South Dakota through settlements again properly balancing.

Brian: Two very good rate reviews in both Montana, and South Dakota through settlements again properly balancing.

Brian: What affordability for our customers of what we need to continue to be a strong financial copy to serve those customers very good outcome, and then getting to a holdco something we've been thinking about and trying to put in place for many years now that's actuated.

Crystal Lail: Affordability for our customers and what we need to continue to be a strong financial company to serve those customers very good outcome, and then getting to a holdco something we've been thinking about and trying to put in place for many years now.

Crystal Lail: Actuated.

Brian: We took great steps.

Crystal Lail: We took great steps back in January of 2023 of announcing incremental colstrip to come into service in 126 for US obviously to continue to fight through many challenges.

Brian: Back in January of 2023 of announcing incremental colstrip to come into service in 126 for US obviously to continue to fight through many challenges in.

Crystal Lail: Yellowstone County.

Brian: Daniela Stone County.

Crystal Lail: With that plant.

Brian: With that plant.

Being online from our perspective to serve customers.

Brian: Being online from our perspective to serve customers for our summer peak.

Crystal Lail: Our summer peak.

Crystal Lail: Lastly, being able to look at our plan and worked really hard to identify a means to increase our growth rates long term earnings growth rate to 4% to 6%.

Brian: Lastly, being able to look at our plant and work really hard to identify a means to increase our growth rates long term earnings growth rate to 4% to 6% and that's for 23 was a great setup for 2024, we're very excited about that we need to certainly obviously execute on our plan we need to stay focused on safety, we obviously need to be.

Speaker Change: For 23 was a great setup for 2024, we're very excited about that we need to certainly obviously executing our plan we need to stay focused on safety, we obviously need to balance reliability affordability and sustainability as a company. We also need to make sure on a going forward basis, we're able to achieve our earnings and growth targets.

Brian: Balance reliability affordability and sustainability as a company we also need to make sure on a going forward basis, we're able to achieve our earnings and growth targets.

Travis E. Meyer: And with that I'm going to pass it back to Mr. Meyer.

Speaker Change: And with that I'm going to pass it back to Mr. Meyer.

Meyer: Thank you, Brian and thank you Crystal.

Meyer: Thank you, Brian and thank you Crystal.

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Travis E. Meyer: Can also simultaneously breath, all why on a P Z on a PC or option why on a map to raise your hand. Please ensure your microphone is on muted. If you are in the queue to ask a question.

Speaker Change: If you are dialed in by phone you can press star nine to raise your hand and star six on mute. Your line to ask a question again that star nine to raise your hand and star six on music.

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Travis E. Meyer: And provide your name and your zoom IV. Please do so so we can inform you that your line is open with that we will take our first question here.

Speaker Change: That we will take our first question here.

Speaker Change: We'll take our first question from Paul Fremont at.

Speaker Change: We'll take our first question from Paul Fremont Atlas.

Paul Patterson: At Ladenburg.

Paul Patterson: Atlantan burden.

Paul Patterson: Paul Your line should be open.

Paul Patterson: Paul Your line should be open.

Paul Patterson: Thank you.

Paul Patterson: Thank you.

Speaker Change: Syria.

Paul Patterson: Organic area.

Speaker Change: Okay.

Speaker Change: Okay perfect.

Speaker Change: Looking at the segment section in your 10-K I noticed that you don't have.

Paul: Looking at the segment section in your 10-K I noticed that you don't have.

Speaker Change: Sort of the new entities delineated in the 2023 10-K are you going to have when you. When you file your parks in April are you going to be able to show the Montana utility versus the non Montana properties separately.

Paul: Sort of the new entities delineated in the 2023 10-K are you going to have when you. When you file your FERC in April are you going to be able to show the Montana utility versus the non Montana properties separately.

Speaker Change: Whereas that of 24 of them.

Paul: Whereas at a 24 events.

Speaker Change: Hi, Paul It's Crystal I, Great detailed question and buyer segments will continue to be electric and gas. Obviously, we've separated the utilities utilities and have that level of detail in the FERC filings. Indeed, you should be able to see the separation between Montana assets and South Dakota assets in electric and gas. So if you have more.

Hi, Paul It's Crystal I greatly detailed question and buyer segments will continue to be electric and gas. Obviously, we've separated the utilities utilities and have that level of detail in the FERC filings. Indeed, you should be able to see the separation between Montana assets, and South Dakota asset than electric and gas. So if you have more.

Speaker Change: Specific comments, we certainly can.

Paul: Specific to contemplate certainly can.

Speaker Change: To help you through those maybe offline, but you should be able to feed that breakout and then indeed the transition of the <unk>.

Paul: To help you through those maybe offline, but you should be able to feed that breakout and then indeed the transition of the operation of assets legally occurred on January 2nd, though you'll see a bit more footnote disclosure in our 10-Q filing starting going forward with Q1.

Speaker Change: <unk> of assets legally occurred on January 2nd so you'll see a bit more footnote disclosure in our 10-Q filing starting going forward with Q1.

Speaker Change: Great.

Paul: Great.

Speaker Change: And then.

Paul: And then.

Okay.

Okay.

Speaker Change: With respect to South Dakota is there.

Paul: With respect to South Dakota is there.

And agreed upon level of return on equity for a F E D C calculation.

Speaker Change: Agreed upon level of return on equity for PVC calculations.

Speaker Change: That's a that's a great question, Paul and there is indeed, I don't know that its public and so I will just tell you the South Dakota Commission prefers to do.

Speaker Change: That's a that's a great question, Paul and there is indeed, I don't know that it's public and buy I will just tell you the South Dakota Commission prefers to do a black box approach to settlement I think you'll see this with all of our peers.

Speaker Change: Black box approach to settlements I think you'll see this with all of our peers.

Speaker Change: We're very focused on getting to a revenue number overall that the board and.

Speaker Change: We're very focused on getting to a revenue number overall that support.

Speaker Change: And can earn a return that is in line with where we expect to be and the approach that that commission may take might look like and overall lower approach Mr. Roe, but a solid approach to giving us the total revenue recovery that we need.

Speaker Change: And earn a return that is in line with where we expect to be and you know the approach that that commission may take might look like and overall lower approach Mr. Roy, but a solid approach to giving us. The total revenue recovery that we need Mr. Meyer is giving me a assist over there by <unk>.

Speaker Change: Mr. Meyer is giving me a assist over there by holding up a sign that says the <unk> fee rate.

Speaker Change: Up a sign that that'd be a M E D theory.

Speaker Change: Which seems a little while $6 four so we do have are disclosed in the 10-K in the sections on our property plant and equipment.

Which seems a little while 6.4. So we do have are disclosed in the 10-K and in the section on our property plant and equipment.

Speaker Change: We have the rate of six 4% for PTC in Montana.

Speaker Change: We have the rate of six 4% for a PTC in Montana.

Speaker Change: Radian is out is about that would be made up of what we actually recorded in 2023 and the way I would say that if they don't expect a change in that in 'twenty 'twenty four and it's about the same rate in Montana to the same six months my portion.

Speaker Change: That would be based off what we actually recorded in 2023 and the way I would say that if they don't expect to change in that in 2024, and it's about the same rate in Montana to that same point.

Speaker Change: <unk>.

Great and then.

Speaker Change: Great.

Speaker Change: Then.

Speaker Change: Has the EPA.

Speaker Change: How does the EPA.

Speaker Change: Got any further on the on the proposed emission standards that you have talked about on some of your earlier calls right.

Speaker Change: Got any further on the on the proposed emission standards that you had talked about on some of your earlier calls right and where do things stand on that.

Speaker Change: Where do things stand on that.

Brian: Paul we're still waiting I understand there is still.

Speaker Change: Paul we're still waiting I understand there is still we talked about this earlier today I think we are.

Brian: Talked about this earlier today I think we are.

Brian: Weeks, if not months.

Speaker Change: Weeks, if not months out from hearing from EPA.

Brian: From hearing from EPA.

Yes.

Speaker Change: Yes.

Great: Great and congratulations on a great quarter.

Speaker Change: Great that's N and congratulations on a great quarter.

Great: Thanks, Paul Thanks, Paul.

Speaker Change: Okay. Thanks, Paul Thanks Bronco.

Okay, We will take our next question.

Okay, We will take our next question.

Speaker Change: From a wine that ends in 5990.

Speaker Change: From my alignment and then 5990.

It looks like area code 347.

My Alignment: It looks like area code 347.

Okay.

My Alignment: Yes.

599 zero.

Speaker Change: I have 990.

Are you there.

Alignment: Are we there.

Speaker Change: Alright, we will move on.

Speaker Change: Alright, we will move on.

Speaker Change: Oh Joanna.

Brian: Joanna.

Speaker Change: Hi, guys can you hear me.

Hi, guys can you hear me.

Joanna: Yeah, there we go.

Joanna: Yeah, there we go.

Joanna: So hi, this is Sophie Karp Keybanc, Yeah, I think you're on mute.

Joanna: Breakfast with Sophie Karp Keybanc, he I think of the on mutual Zillow Batesville on crop relative today.

Brian: Based on Crawford.

Brian:

Joanna:

Speaker Change: Thank you for taking my question and congrats on the strong results in all the regulatory achievements and maybe I can just ask you a conceptual question here.

Speaker Change: Thanks for taking my question and congrats on the strong resolve them all the regulatory achievements and maybe I can just ask you a conceptual question here.

Speaker Change: First.

Brian: First.

Brian and Chris. So you guys mentioned all of the good things you've accomplished unused surprised to see the 5% dividend yield.

Speaker Change: Ryan and Chris. So you guys mentioned all of the good things you've accomplished amused surprised to be 5% dividend yield.

Speaker Change: And we are too so I'm curious what do you think is missing from the story, maybe what what do you glean from our conversations with investors.

And we are too so I'm curious what do you think is missing from the story, maybe what what do you glean from our conversations with investors.

Speaker Change: Okay.

Brian: Okay.

Well I certainly understand we've taken steps I think we are dressing balance sheet concerns I think youll see in 'twenty four.

Chris: Well I I certainly understand as we've taken steps I think we are dressing balance sheet concerns I think youll see in 'twenty four.

Travis E. Meyer: 2014, plus <unk> deal with that issue.

Chris: 2014, plus <unk> deal with that issue, we acknowledge we still have a bit high dividend payout ratio, but as we continue to grow earnings at a faster clip, we will deal with that issue by I. Certainly believe there is some sort of fire discount in our shares but I would tell you that we continue like other utilities, making great efforts not only from.

Travis E. Meyer: Should we still have a high dividend payout ratio, but as we continue to grow earnings at a faster clip, we will deal with that issue, but I certainly believe there's some sort of fire discount in our shares but I would tell you that we continue like other utilities, making great efforts not only from an operational perspective on many fronts looking at.

Chris: And operational perspective, but on many fronts looking at that beyond that.

Beyond that.

Travis E. Meyer: I think with the outcomes. We've just received an execution of our plan I don't understand why we would be trading where we're trading and I'll leave it at that Sophie.

Chris: I think with the outcomes. We've just received an execution of our plan I don't understand why we would be trading where we're trading and I'll leave it at that Sophie.

Sophie Karp: Got it got it Okay, and then maybe real quick on the Montana elections that now.

Sophie Karp: Got it got it Okay, and then maybe real quick on the Montana elections that you know.

We will be watching at some point.

Sophie Karp: We will be watching at some point or what are your thoughts on that kind of line up and to the extent you can comment on how you see this developing.

Paul Patterson: What are your thoughts on that kind of line up and to.

Speaker Change: To the extent you can comment on how you see this developing.

Paul Patterson: Okay.

Sophie Karp: Well I learned a long time ago and it not talk politics, but I will say this we have we know we're going to have two new commissioners in Montana.

Paul Patterson: I learned a long time ago, and if not talk politics, but I will say this we have we know we're going to have two new commissioners.

Paul: In Montana.

Sophie Karp:

Paul: President Brown has acknowledged he's running for another state office and Commissioner O'donnell terms out so we know for sure to Mr. Fielders running.

Sophie Karp: President Brown has acknowledged cheez it running for another state office and Michener O'donnell in terms out so we know for sure to Mr. Fielders running.

Sophie Karp: And <unk>.

Paul: And <unk>.

Paul: No commentary on any of their opponents or who will be in those races. We have until March 11th I believe for people who are finalized is running for these positions.

Sophie Karp: No commentary on any of their opponents or who will be in those races. We have until March 11th I believe for people who are finalized who's running for these positions.

But we know for.

Sophie Karp: But we know for.

Paul: Sure.

Sophie Karp: Sure are that we're going to have two new commissioners and that's all I'll say I will just tell you this from our perspective.

We're going to have two new commissioners and that's all I'll say I will just tell you this from our perspective.

Paul: What we need to do to demonstrate whoever sitting in those chairs what we're doing is in the best interest of our customers and obviously, we're doing the best interest of our shareholders and they have to think about it says they have clearly pointed out.

Sophie Karp: What we need to do to demonstrate wherever sitting in those chairs what we're doing this in the best interests of our customers and obviously, we're doing the best interest of our shareholders, who may have to think about it says they have clearly pointed out in this last rate review they understand Cory rules that they need to find that proper balance too and we certainly appreciate that and we'll continue to work with vault <unk>.

This last rate review they understand Cory the rules that they need to find that proper balance too and we certainly appreciate that and we'll continue to work with all interested parties to come to similar outcomes.

Sophie Karp: <unk> parties to come to similar outcomes.

Thank you. Thank you for your comments that's all for me.

Speaker Change: Thank you. Thank you for your comments that's all for me.

Speaker Change: Thank you thank you Sophie.

Thank you thank you Sophie.

Paul: Okay.

Speaker Change: Sure.

Paul: Yeah.

Speaker Change: Yes.

Paul: Okay with that.

Speaker Change: Okay with that.

Speaker Change: We'll give a just another minute here, but we don't want to have any other calls in the queue or our hands in the queue.

Speaker Change: We'll give a just another minute here, but that we don't have any other calls in the queue or our hands in the queue.

Speaker Change: Okay.

Alright, with that I will hand, it back to Brian for some closing thoughts.

Speaker Change: Alright with that now I'll hand, it back to Brian for some closing thoughts.

Brian: First of all I.

First of all I'd.

Meyer: Certainly acknowledging we think from a share performance, we should be doing better, but I'd also want to reach out and thank all of you who continue to follow the stock and all of you who are strictly investor. We certainly are thinking about your best interest here as well and hopefully that improve share performance will meet your expectations. Thank you very much.

Brian: Certainly acknowledging we think from a share performance, we should be doing better, but I'd also want to reach out and thank all of you who continue to buy the stock and all of you who are certainly investor. We certainly are thinking about your best interests here as well and hopefully that crucial components will it meet your expectations. Thank you very much.

Meyer: Have a great day.

Speaker Change: Have a great day.

Okay.

Speaker Change: Okay.

Speaker Change: Goodbye.