Northwest Natural Holding Co (NWN) 2023 Q4 法說會逐字稿

Hello and welcome to today's NW Natural holding company Q4 2023 earnings call. My name is David, and I'll 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. (Operator Instructions) I would now like to pass the conference over to our host today, Nikki Sparley, Director of Investor Relations. Please go ahead.

您好，歡迎參加今天的 NW Natural 控股公司 2023 年第四季財報電話會議。我叫大衛，我將擔任今天的主持人。在通話的演示部分，所有線路將被靜音，最後有機會提問和回答。（操作員指示）我現在想將會議交給今天的東道主投資者關係總監 Nikki Sparley。請繼續。

Thank you, Mary. Good morning and welcome to our fourth quarter 2023 earnings call. As a reminder, some things that will be said this morning contain forward-looking statements 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. We expect to file our 10-K later today.

謝謝你，瑪麗。早上好，歡迎參加我們的 2023 年第四季財報電話會議。提醒一下，今天早上將要說的一些事情包含基於管理層假設的前瞻性陳述，這些假設可能會也可能不會發生，完整的警示性陳述列表請參閱我們新聞稿末尾的語言。我們預計今天晚些時候提交 10-K。

As mentioned, this teleconference is being recorded and will be available on our website following the call. 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 Wilrich at 503-610-7157. Speaking this morning are David Anderson, Chief Executive Officer, and Brody Wilson, CFO, Vice President, Treasurer and Chief Accounting Officer, David and Brody has prepared remarks and then will be available along with other members of our executive team to answer your question. With that, I will turn it over to David.

如前所述，本次電話會議正在錄製中，並將在電話會議結束後在我們的網站上提供。請注意，這些電話是為金融界設計的，如果您是投資者並且在電話後有其他問題，請直接致電 503-721-2530 與我聯繫。新聞媒體可致電 503-610-7157 聯絡 David Wilrich。今天早上發言的是執行長大衛·安德森(David Anderson) 和首席財務官、副總裁、財務主管兼首席會計官布羅迪·威爾遜(Brody Wilson)，大衛和布羅迪已經準備好發言稿，然後將與我們執行團隊的其他成員一起回答您的問題。這樣，我就把它交給大衛了。

Thanks, Mickey, and good morning and welcome, everybody. I'll start today by walking through 2024 guidance and priorities. And then I'll turn to a few comments about 2023 before I hand it over to Brody to cover the financials in more detail and finally, I'll wrap up the call with an update on our strategic priorities. Turning to 2024. As you know, earnings growth is not always linear. And in certain years, the focus will be on investments and initiatives set the stage for future growth. And quite frankly, 2024 is such a year for us. While we continue to maintain strong credit ratings, a solid balance sheet and long-term earnings growth outlook of 4% to 6%. Our earnings guidance for 2024 reflects a combination of lag related to our capital investments and inflationary pressures that we are experiencing simultaneously. I'll describe these two factors in more detail.

謝謝米奇，早安，歡迎大家。今天我將首先介紹 2024 年指導方針和優先事項。然後，我將談談有關 2023 年的一些評論，然後將其交給布羅迪，以更詳細地介紹財務狀況，最後，我將透過更新我們的策略重點來結束這次電話會議。時間轉向 2024 年。如您所知，獲利成長並不總是線性的。在某些年份，重點將放在為未來成長奠定基礎的投資和舉措。坦白說，2024 年對我們來說就是這樣的一年。我們持續維持強勁的信用評級、穩健的資產負債表和 4% 至 6% 的長期獲利成長前景。我們對 2024 年的獲利指引反映了與我們的資本投資相關的滯後性和我們同時經歷的通膨壓力的綜合影響。我將更詳細地描述這兩個因素。

First, our gas utility has continued to make necessary investments in safety, reliability and technology at record levels. The regulatory lag recovery lag associated with these investments is exasperated exacerbated in 2024 due to the increased level of investment and the shorter life nature or if you will higher depreciation expense associated with our cybersecurity and technology assets. Frankly, this is relatively new to us at these levels do this level of technology investment, and we have to we have an estimate that we've had to make to replace aging systems.

首先，我們的天然氣公用事業公司繼續以創紀錄的水平在安全性、可靠性和技術方面進行必要的投資。由於投資水準的增加和壽命的縮短，或與我們的網路安全和技術資產相關的折舊費用增加，與這些投資相關的監管滯後和復原滯後將在 2024 年進一步加劇。坦白說，這對我們來說是相對較新的技術投資水平，我們必須對更換老化系統進行估計。

So quickly, second, like many other companies, our gas utility is continuing with inflationary pressure on operating expenses, primarily due to the renewal of several multi-year O&M contracts, higher personnel costs, the amortization of cloud computing technology investments and higher pension expenses. These are all reasons, frankly, why we decided to file a rate case in Oregon late last year. Our other operations are experiencing inflationary pressure also, but the magnitude of the items listed above, and our gas company has resulted in 2024 earnings guidance being about $0.3 per share lower than our 2023 earnings. Our team has done all they can to reduce cost and operate as efficiently as possible while maintaining a safe and reliable system.

其次，與許多其他公司一樣，我們的天然氣公用事業公司的營運費用持續面臨通膨壓力，這主要是由於續簽了幾份多年期營運和維護合約、更高的人員成本、雲端運算技術投資的攤銷和更高的退休金費用。坦白說，這些都是我們去年年底決定在俄勒岡州提起費率訴訟的原因。我們的其他業務也面臨通膨壓力，但上述項目以及我們的天然氣公司的嚴重程度導致 2024 年每股收益指引比 2023 年每股收益低約 0.3 美元。我們的團隊已盡一切努力降低成本並盡可能高效地運營，同時維護安全可靠的系統。

For example, to help mitigate the near-term effects with extensive flavor extensively reviewed our entire organization and instituted aggressive cost-saving measures, all these regulatory lag items will be addressed in the Oregon general rate case that will conclude later this year. And as you may recall, Oregon rate cases are adjudicated over a 10-month period with our filing at year end, we expect new rates to be in effect November first, the gas utility request includes a revenue requirement increase of $154.9 million based on a 50-50 cap structure, ROE. of 10.1% and a cost of capital of 7.406%.

例如，為了幫助減輕短期影響，我們對整個組織進行了廣泛的審查，並製定了積極的成本節約措施，所有這些監管滯後項目都將在今年稍後結束的俄勒岡州一般費率案例中得到解決。您可能還記得，俄勒岡州費率案件的裁決時間為 10 個月，我們在年底提交文件，我們預計新費率將於 11 月 1 日生效，天然氣公用事業公司請求包括根據50-50上限結構， ROE。 10.1%，資本成本為 7.406%。

This request includes an increase in average rate base of $381 million. Since the last rate case, the components of the revenue requirement increase are fairly straightforward, roughly 45% related to investments in the system, higher property taxes and an updated depreciation study resulting in new depreciation rates, 35% due to operations and maintenance expenses with the remainder related to cost of capital and income taxes. We carefully considered this rate filing and the effect on our customer bills.

該請求包括將平均費率基數增加 3.81 億美元。自上一個費率案例以來，收入要求增加的組成部分相當簡單，大約 45% 與系統投資、更高的財產稅和更新的折舊研究導致新的折舊率有關，35% 與營運和維護費用有關其餘部分與資本成本和所得稅有關。我們仔細考慮了此次費率申報以及對客戶帳單的影響。

And the good news is that on average, Oregon residential customers saw a 9% drop in the rates last November. And today, customers are paying 7% less for their total natural gas bill than they did 15 years ago. Although we're laser focused on our gas utility rate case, we're also working hard to refresh rates at multiple water utilities in 2024, including our largest one in Arizona that we filed late and were filed last year. These cases are largely related to capital investments.

好消息是，去年 11 月，俄勒岡州住宅客戶的費率平均下降了 9%。如今，客戶支付的天然氣總費用比 15 年前減少了 7%。儘管我們非常關注天然氣公用事業費率案件，但我們也在努力在 2024 年更新多個自來水公司的費率，其中包括我們遲到並於去年提交的亞利桑那州最大的自來水公司的費率。這些案例很大程度上與資本投資有關。

We continue to find these systems need substantial investments to meet current drinking water standards treated effluent standards and to support our growing communities. These rate cases are a critical step in building a strong foundation of earnings for that business. We believe over the longer term, our business and investments will drive earnings and cash flow growth and solid returns.

我們繼續發現這些系統需要大量投資才能滿足當前的飲用水標準和處理後的廢水標準並支持我們不斷發展的社區。這些費率案例是為該業務奠定堅實獲利基礎的關鍵一步。我們相信，從長遠來看，我們的業務和投資將推動獲利和現金流成長以及穩健的回報。

2024 is a building year and reflects the MAG is the magnified effect of the normal recovery lag in our highly regulated gas and water utility business model.

2024 年是建設性的一年，反映出 MAG 是我們嚴格監管的燃氣和水公用事業業務模式中正常恢復滯後的放大效應。

Turning to Northwest Natural renewables. Construction was completed in 2023 on two facilities that we're investing in with EDL that are designed to convert landfill waste gases to renewable natural gas. While raw gas volumes are flowing for both projects at the expected levels, which is good, full commissioning has not occurred due to a technical issue with the conditioning equipment after troubleshooting issues last year, our partners and their technical teams report that they have identified the solutions to resolve the remaining issues, and they expect both facilities to be online later this year.

轉向西北自然再生能源。我們與 EDL 共同投資的兩座設施於 2023 年竣工，旨在將垃圾掩埋場廢氣轉化為再生天然氣。雖然兩個專案的原氣流量均達到預期水準（這很好），但由於去年故障排除後調節設備出現技術問題，尚未進行全面調試，但我們的合作夥伴及其技術團隊報告稱，他們已經確定了問題所在解決剩餘問題的解決方案，他們預計這兩個設施將在今年稍後上線。

Our investment of $25 million per facility will only be made upon achieving full commercial operations and importantly, the revenue and cash flows are expected to begin promptly thereafter from long-term primarily fixed price offtake agreements that we have contracted with investment grade counterparties. We remain committed to this business and see strong long-term growth opportunities here. However, I'm very disappointed with where we are on this project.

我們每項設施的 2500 萬美元投資只有在實現全面商業運營後才會進行，重要的是，收入和現金流預計將立即從我們與投資級交易對手簽訂的長期主要固定價格承購協議中開始。我們仍然致力於這項業務，並看到這裡強勁的長期成長機會。然而，我對我們在這個專案上的進展感到非常失望。

We had planned for some earnings and cash flows from this business in 2023 and for a full year in 2020 for the long-term financial returns of these projects remain largely intact, but are unfortunately delayed. And despite this disappointment, I am very excited with new leadership at our renewables company and IT system was recently announced as a new president and already has hit the ground running. We are anxious to get through the start-up issues this year on those assets and are confident that Anna and her team can find other growth opportunities for us soon.

我們原計劃在 2023 年和 2020 年全年實現該業務的部分收益和現金流，因為這些項目的長期財務回報基本上保持不變，但不幸的是被推遲了。儘管令人失望，但我對我們再生能源公司的新領導層感到非常興奮，IT 系統最近被宣佈為新總裁，並且已經開始運作。我們迫切希望解決今年這些資產的啟動問題，並相信安娜和她的團隊很快就能為我們找到其他成長機會。

Moving to a few comments on 2023 last year was a tremendous yet challenging year for us. Northwest Natural's was once again recognized for customer satisfaction and scores. Second, for large utilities in the Western United States according to J.D. Power Gas Utility Residential Customer Satisfaction Study. At the same time, we grew our gas and water utilities began operation of our second renewable natural gas facility under Oregon Lant, Oregon's landmark Senate Bill 98 legislation integrated our largest water and wastewater acquisition to date and launched a water services business for the 2nd year in a row, Ethisphere ranked recognized us as one of the world's most ethical companies, which I greatly value.

去年對我們來說，2023 年是巨大但充滿挑戰的一年。Northwest Natural's 再次因其客戶滿意度和評分而獲得認可。其次，根據 J.D. Power Gas Utility 住宅客戶滿意度研究，美國西部的大型公用事業公司。同時，我們發展了天然氣和水務公司，開始在俄勒岡州蘭特(Oregon Lant) 運營我們的第二個可再生天然氣設施，俄勒岡州具有里程碑意義的參議院法案98 立法整合了我們迄今為止最大的水和廢水收購，並在第二年推出了水服務業務道德村協會連續將我們評為世界上最有道德的公司之一，我對此非常重視。

And we also increased the dividends for the 68 year in outstanding legacy for 2023 we reported net income of $93.9 million or $2.59 per share. That's an increase of $7.6 million compared to net income of $86.3 million or $2.54 a share in 2022. Higher revenues from new rates in Oregon drove results of the natural gas utility, along with customer growth, lower pension expense offset by financing costs.

我們也增加了 68 年未償遺產的股息，2023 年我們報告的淨利潤為 9,390 萬美元，即每股 2.59 美元。與 2022 年淨利 8,630 萬美元或每股收益 2.54 美元相比，增加了 760 萬美元。俄勒岡州新費率帶來的收入增加推動了天然氣公用事業公司的業績成長，同時客戶的成長、退休金費用的降低被融資成本所抵銷。

A couple of quick notes on customer growth. Despite interest rates, putting a damper on the national and local housing market. Northwest Natural Gas have added approximately 4,800 new customers during the last 12 months for a growth rate of 0.6%. In January 2024, we reached a milestone for 800,000 gas utility customers.

關於客戶成長的一些簡短說明。儘管利率上升，但仍對全國和地方房地產市場造成抑制。西北天然氣公司在過去 12 個月中增加了約 4,800 個新客戶，成長率為 0.6%。2024 年 1 月，我們實現了 80 萬名燃氣公用事業客戶的里程碑。

Our water and wastewater utilities also continued to growing both organically and through four acquisitions that we closed Northwest Natural water added 10,400 customers in 2023 for an average overall growth rate of 12.7% and an organic growth rate of 2%. We also launched the water services business with two acquisitions. And today that business supports nearly 20,000 connections. This is a strong platform that we believe can be scaled in the coming years. I'm very pleased to serve over 892,000 customer connections across five states through our three businesses.

我們的供水和廢水處理設施也持續有機成長，透過我們完成的四次收購，西北天然水務公司在 2023 年增加了 10,400 名客戶，平均整體成長率為 12.7%，有機成長率為 2%。我們也透過兩次收購推出了供水服務業務。如今，該業務支援近 20,000 個連線。這是一個強大的平台，我們相信在未來幾年可以擴展。我很高興透過我們的三項業務為五個州的超過 892,000 名客戶提供服務。

In summary, while 2024 reflects a convergence of challenges. These are primarily related to lag intrinsic and a regulated utility. I believe we're taking the right actions to minimize the lag going forward and that we're making the right investments today to set the stage for long-term growth. Our objective is to grow earnings while continuing to maintain our strong credit ratings and solid balance sheet and are confident in the value and future of this 165 year old company. That's why today we are reaffirming our 4% to 6% long-term earnings per share growth rate in the base year for that calculation. And the five year window is 2022 with earnings of with earnings per share that were $2.54.

總而言之，2024 年體現了挑戰的融合。這些主要與滯後內在和受監管的效用有關。我相信我們正在採取正確的行動來最大限度地減少未來的滯後，並且我們今天正在進行正確的投資，為長期成長奠定基礎。我們的目標是增加收益，同時繼續保持強大的信用評級和穩健的資產負債表，並對這家擁有 165 年歷史的公司的價值和未來充滿信心。這就是為什麼今天我們重申計算基準年 4% 至 6% 的長期每股盈餘成長率。五年窗口是 2022 年，每股收益為 2.54 美元。

With that, I'll turn it over to Brody for remarks on the financials.

接下來，我將把它交給布羅迪，請他對財務狀況發表評論。

Thank you, David, and good morning, everyone. I'll begin by discussing the highlights for the fourth quarter and full year 2023 results and conclude with guidance for 2024. As a reminder, Northwest Natural's earnings are seasonal with the majority of revenues and earnings generated in the first and fourth quarters. During the winter heating months.

謝謝大衛，大家早安。我將首先討論 2023 年第四季和全年業績的要點，最後給出 2024 年的指導。需要提醒的是，西北自然公司的收益是季節性的，大部分收入和收益產生於第一季和第四季。在冬季供暖期間。

Also, our segment reporting includes natural gas distribution or NGD segment and other, which includes our interstate storage services and asset management services, Northwest Natural water, Northwest Natural and renewables and holding company expenses. Beginning with fourth quarter results, we reported net income of $44.6 million or $1.21 per share compared to net income of $47.9 million or $1.36 per share for the same period in 2022.

此外，我們的分部報告還包括天然氣分銷或 NGD 分部及其他分部，其中包括我們的州際儲存服務和資產管理服務、西北天然水、西北天然和再生能源以及控股公司費用。從第四季業績開始，我們公佈的淨利潤為 4,460 萬美元，即每股 1.21 美元，而 2022 年同期淨利潤為 4,790 萬美元，即每股 1.36 美元。

On a quarter basis, our gas utility net income declined $600,000, mainly from increases in operating costs, including depreciation. Other posted a decline of $2.7 million in the fourth quarter of 2023 compared to last year's results. That decline was primarily due to higher interest expense.

按季度計算，我們的天然氣公用事業淨利潤下降了 60 萬美元，主要是由於包括折舊在內的營運成本增加。Other 公佈 2023 年第四季業績較去年下降 270 萬美元。這一下降主要是由於利息支出增加。

Now a few more details on the Gas Distribution segment's quarterly results. Margin increased $6.5 million, mainly from new rates again on gas cost sharing and customer grade utility O&M increased $9.2 million, reflecting higher payroll costs from additional employees that were part of the previous rate case information and technology costs, including cloud amortization, as well as increased contract labor costs and the amortization of deferrals.

現在提供有關天然氣分銷部門季度業績的更多詳細資訊。利潤增加了650 萬美元，主要是由於天然氣成本分攤再次採用新費率，客戶級公用事業運維增加了920 萬美元，反映出額外員工的工資成本增加，這些成本是先前費率案例資訊和技術成本的一部分，包括雲端攤銷，以及合約勞動成本和延期攤銷增加。

Utility depreciation and general taxes increased $1.5 million due to higher property, plant and equipment. Other income increased $4.8 million, primarily from lower pension expense and higher equity AFUDC interest. Interest expense at the gas utility increased $1.6 million due to higher debt balances.

由於財產、廠房和設備增加，公用事業折舊和一般稅費增加了 150 萬美元。其他收入增加了 480 萬美元，主要是由於退休金費用減少和 AFUDC 股權利息增加。由於債務餘額增加，天然氣公用事業公司的利息支出增加了 160 萬美元。

Turning now to full-year results, for 2023, we reported net income of $93.9 million or $2.59 per share compared to net income of $86.3 million or $2.54 per share for the same period in 2022. The $7.6 million increase in net income was largely the result of a $14.4 million increase in our gas utility related to new rates in both Oregon and Washington, partially offset by a higher depreciation and O&M in our gas distribution business and interest expense in our other businesses. Earnings per share was also affected by the issuance of common stock in 2023.

現在轉向全年業績，我們公佈的 2023 年淨利潤為 9,390 萬美元，即每股 2.59 美元，而 2022 年同期淨利潤為 8,630 萬美元，即每股 2.54 美元。淨利潤增加760 萬美元，主要是由於俄勒岡州和華盛頓州的新費率導致我們的天然氣公用事業增加了1,440 萬美元，部分被我們天然氣分銷業務的折舊和運營與維護費用增加以及其他業務的利息支出所抵消。每股盈餘也受到2023年普通股發行的影響。

Now a bit more detail on the gas utilities annual results. Utility margin increased $69.1 million related to new rates in Oregon and Washington, which contributed $56.7 million. The utility also benefited from gains on gas cost sharing, which increased $9.4 million and customer growth provided $4.6 million. Gas Utility O&M increased $40 million. This larger than normal increase reflected many costs which were planned in the rate case for which revenues were collected beginning November 2022. First, we had an increase in payroll costs driven by a higher average number of employees.

現在更詳細地了解天然氣公用事業公司的年度業績。俄勒岡州和華盛頓州的新費率貢獻了 5,670 萬美元，公用事業利潤率增加了 6,910 萬美元。該公用事業公司還受益於天然氣成本分攤收益，增加了 940 萬美元，客戶成長帶來了 460 萬美元。天然氣公用事業營運與維護增加了 4,000 萬美元。這一高於正常水平的增長反映了 2022 年 11 月開始徵收收入的費率情況下計劃的許多成本。首先，平均員工人數增加導致薪資成本增加。

Second, we incurred higher information technology costs, including cloud amortization, as well as increased costs associated with cybersecurity efforts. Finally, we had an increase in from the amortization of deferral balances totaling $7.7 million. Most of the O&M increases in 2023 were anticipated in the forward test year of our rate case that went into effect on November first, 2022, utility depreciation and general taxes increased $11.4 million due to additional capital investments, about half of which relates to capital investments in core infrastructure for safety and reliability.

其次，我們承擔了更高的資訊科技成本，包括雲端攤銷，以及網路安全工作相關的成本增加。最後，我們的遞延餘額攤提增加了總計 770 萬美元。2023 年營運和維護的大部分成長預計發生在2022 年11 月1 日生效的費率案例的前瞻性測試年中，由於額外的資本投資，公用事業折舊和一般稅費增加了1140 萬美元，其中約一半與資本投資有關核心基礎設施的安全性和可靠性。

And the remaining relates to an increase in technology investments, which have a shorter depreciable life Other income increased $15.8 million, driven by $5.8 million of lower pension costs, $5.5 million of higher interest income and $4.1 million of increased equity AFUDC interest. Interest expense for our gas utility increased $14.3 million due primarily to incremental long-term debt financing. For 2023, cash provided by operating activities was a record $280 million. We invested $327 million in our systems related to safety and reliability and technology. Nearly 90% of those capital expenditures were for our gas utility.

其餘收入與技術投資的增加有關，技術投資的折舊年限較短。其他收入增加了1580 萬美元，這是由於退休金成本降低了580 萬美元、利息收入增加了550 萬美元以及AFUDC 股本利息增加了410 萬美元。我們的天然氣公用事業公司的利息支出增加了 1,430 萬美元，這主要是由於長期債務融資的增加。2023 年，經營活動提供的現金達到創紀錄的 2.8 億美元。我們在與安全性、可靠性和技術相關的系統上投資了 3.27 億美元。近 90% 的資本支出用於我們的天然氣公用事業。

We also deployed $8.5 million for water and wastewater acquisitions. Cash provided by financing activities was $64 million. We raised $66.5 million from the issuance of common stock and issued $240 million of incremental long-term debt to support our gas utility. Northwest Natural Holdings also executed a $150 million note purchase agreement in December, which is expected to close in early March. We intend to use the proceeds to refinance $150 million of holding company and water company debt due in March of 2024, taking care of our expected long-term debt needs for this year.

我們還部署了 850 萬美元用於水和廢水收購。融資活動提供的現金為6400萬美元。我們透過發行普通股籌集了 6,650 萬美元，並發行了 2.4 億美元的增量長期債務來支持我們的天然氣公用事業。Northwest Natural Holdings 也在 12 月簽署了一項 1.5 億美元的票據購買協議，預計將於 3 月初完成。我們打算利用所得款項為 2024 年 3 月到期的控股公司和自來水公司債務再融資 1.5 億美元，以滿足我們今年預期的長期債務需求。

Moving to our liquidity position and financing needs. We have ample liquidity and our credit ratings remained strong. In October 2023 S and P initiated an A. plus rating for our holding company. Our ratings for the gas company have remained unchanged. Looking forward, we expect to continue targeting a capital structure at Northwest Natural of 50% equity and 50% long-term debt in keeping with our regulated capital structure in Oregon. Our objective remains to keep our balance sheet strong with ample liquidity to support working capital needs and growth.

轉向我們的流動性狀況和融資需求。我們擁有充足的流動性，信用評級依然強勁。2023 年 10 月，標準普爾對我們的控股公司發起了 A.+ 評級。我們對該天然氣公司的評級保持不變。展望未來，我們預計 Northwest Natural 的資本結構將繼續目標是 50% 股權和 50% 長期債務，以符合我們在俄勒岡州受監管的資本結構。我們的目標仍然是保持資產負債表強勁，並提供充足的流動性，以支持營運資金需求和成長。

Turning to our capital expenditure guidance. For 2024, the gas utility capital expenditures are expected to be in the range of $350 million to 400 million, which includes significant projects related to meter modernization, safety and reliability and technology upgrades for our existing water utilities. We expect 2024 CapEx to be approximately $40 million as a result of the increased capital investments at our gas and water utilities, we have increased our five-year consolidated CapEx range midpoint to $1.6 billion from $1.5 billion last year.

轉向我們的資本支出指引。到2024年，燃氣公司的資本支出預計將在3.5億至4億美元之間，其中包括與現有水務公司的儀表現代化、安全性和可靠性以及技術升級相關的重大項目。由於天然氣和水務公司資本投資增加，我們預計 2024 年資本支出約為 4,000 萬美元，我們已將五年綜合資本支出範圍中位數從去年的 15 億美元提高到 16 億美元。

As David discussed, these capital investments coupled with higher forecasted expenses drove our decision to file the Oregon rate case this past December lag is expected to be alleviated as new rates for Northwest Natural are anticipated on November 1, 2024, at the water utilities who are experiencing similar regulatory lag. We filed a rate case at our largest water utility and expect to file several more this year with new rates expected by the end of 2024. I would like to emphasize while the utility regulatory lag is put near term earnings pressure on the business fees are important investments that are expected to translate into long-term earnings once rates are updated.

正如David 所討論的，這些資本投資加上較高的預測費用促使我們決定在去年12 月提交俄勒岡州費率案件，預計西北自然天然氣公司的新費率將於2024 年11 月1 日在水務公司公佈，滯後時間預計將得到緩解。經歷了類似的監管滯後。我們向最大的自來水公司提交了一份費率案件，預計今年將提交更多案件，預計到 2024 年底將推出新費率。我想強調的是，雖然公用事業監管落後給近期獲利帶來壓力，但業務費用是重要的投資，一旦費率更新，預計將轉化為長期獲利。

Finally, our renewables business is poised to provide long-term earnings once the two RNG facilities are operational, but are not expected to make a significant earnings contribution until after 2024.

最後，一旦兩個 RNG 設施投入運營，我們的再生能源業務將提供長期收益，但預計要到 2024 年後才會做出重大收益貢獻。

Consistent with these business drivers, the company initiated 2024 earnings guidance today in the range of $2.20 to $2.40 per share or about a $0.3 per share decline from the $2.59 per share 2023 earnings. The decrease is primarily related to the regulatory lag we have described. Guidance assumes continued customer growth, average weather conditions and no significant changes in prevailing regulatory policies, mechanisms or outcomes or significant changes in laws, legislation or regulations.

與這些業務驅動因素一致，該公司今天啟動了 2024 年每股收益指引，範圍為每股 2.20 美元至 2.40 美元，較 2023 年每股收益 2.59 美元下降約 0.3 美元。這種下降主要與我們所描述的監管滯後有關。指南假設客戶持續成長、天氣條件平均，且現行監管政策、機製或結果沒有重大變化，或法律、立法或法規沒有重大變化。

Long term, we continue to project solid growth in our natural gas and water utilities and see value and growth from our renewable natural gas business. As a result, we continue to target a long-term earnings per share growth rate of 4% to 6% compounded annually from 2022 to 2027. Our base year for that view is 2022 when earnings per share was $2.54.

從長遠來看，我們將繼續預計天然氣和水務事業的穩健成長，並看到再生天然氣業務的價值和成長。因此，我們繼續目標是從 2022 年到 2027 年，每股盈餘的長期複合成長率為 4% 到 6%。我們的這一觀點的基準年是 2022 年，當時每股收益為 2.54 美元。

With that, I'd like to turn it back over to David.

有了這個，我想把它轉回給大衛。

Thanks, Brodie, and we'll turn now to our strategic pillars and an update on our growth initiatives. Core to our strategy is to to drive profitable growth for our investors across our gas, water and renewable energy business in support of our Company's long-term earnings growth target that Brody just discussed.

謝謝布羅迪，我們現在將討論我們的策略支柱和成長計劃的最新情況。我們策略的核心是推動天然氣、水和再生能源業務投資者的獲利成長，以支持布羅迪剛剛討論的公司長期獲利成長目標。

Turning to our gas utility, as probably outlined, we anticipated we anticipate continued investments in our gas utility system and storage facilities for safety and rock reliability over the next five years. And we're finding medium investments on all fronts, including modernizing core infrastructure like meters, upgrading technology, maintaining our valuable storage facilities and a keen focus on safety and reliability spend.

談到我們的天然氣公用事業，正如可能概述的那樣，我們預計我們預計在未來五年內將繼續投資於我們的天然氣公用事業系統和儲存設施，以確保安全性和岩石可靠性。我們在各個方面都進行了中等投資，包括現代化核心基礎設施（如儀表）、升級技術、維護我們寶貴的儲存設施以及對安全性和可靠性支出的高度關注。

I'm encouraged by the opportunities and rate base growth of 5% to 7% over the next five years with this level of investment, we're balanced in the best approach for customers and the company. That's why in our most recent rate filing in Oregon, we proposed multi-year rate cases be considered in the future. This strategy has been successful in Washington State, helping smooth helping to smooth increases, allowing customers to understand future rates and providing the Company more certainty. We look forward to engaging with the Oregon Commission staff and interveners on this topic.

我對未來五年內 5% 至 7% 的機會和利率基礎增長感到鼓舞，在這種投資水平下，我們在客戶和公司的最佳方法上取得了平衡。這就是為什麼在我們最近在俄勒岡州提交的費率申請中，我們建議未來考慮多年費率案例。這項策略在華盛頓州取得了成功，有助於平穩成長，讓客戶了解未來的費率，並為公司提供更多確定性。我們期待與俄勒岡委員會工作人員和乾預者就這一主題進行接觸。

Now an update on gas utility decarbonization efforts. We believe climate change requires rapid innovation and action. We also need to approach the energy transition in a way that ensures first, the energy systems, reliability and affordability. Just last month, we were reminded once again of the importance of peak planning and a critical life safety and energy reliability benefits of the natural gas system provides. Starting January 13, a winter storm brought frigid temperatures, severe wind and snow to the Pacific Northwest and resulted in a record-breaking weekend for our gas system.

現在介紹天然氣公用事業脫碳工作的最新情況。我們相信氣候變遷需要快速創新和行動。我們還需要以一種首先確保能源系統、可靠性和可負擔性的方式來實現能源轉型。就在上個月，我們再次意識到高峰規劃的重要性以及天然氣系統提供的關鍵生命安全和能源可靠性優勢。從 1 月 13 日開始，一場冬季風暴為太平洋西北地區帶來了寒冷的氣溫、強風和大雪，導致我們的天然氣系統週末出現了破紀錄的情況。

We hit a new peak day record on Saturday, January 13, delivering 8 million berms of natural gas to sales customers. That's 100,000 berms more than our previous record in 2022 and double our average daily winter spend or our daily winter spend-out levels. If we include our transportation customers we delivered 9 million berms that day. And for those of you familiar with megawatt hours, that's equivalent to 260,000 megawatt hours prior.

1 月 13 日星期六，我們創下了新的高峰日記錄，向銷售客戶交付了 800 萬桶天然氣。這比 2022 年我們之前的記錄多了 10 萬個護堤，是我們冬季平均每日支出或每日冬季支出水準的兩倍。如果我們包括我們的運輸客戶，我們當天交付了 900 萬個護堤。對於熟悉兆瓦時的人來說，這相當於之前的 26 萬兆瓦時。

For comparison, the largest local electric utility in our service territory delivered 84,000 megawatt hours on that same day, our Mist storage gas storage facility for the new record volume that same Saturday and the facility provided essential support for the entire region's energy system. Throughout the event, I'm pleased to report that our employees rose to the occasion break dangerous conditions and ensure that our system performed well, supporting additional demand when our region needed it. The most providing reliable and energy is the result of disciplined investments in the system over many decades.

相較之下，我們服務區域內最大的當地電力公司當天發電量為 84,000 兆瓦時，我們的 Mist 儲氣設施在同週六創下新紀錄，該設施為整個地區的能源系統提供了重要支持。在整個活動過程中，我很高興地向大家報告，我們的員工克服了危險條件，確保我們的系統運作良好，並在我們地區需要時支援額外的需求。最可靠的能源是幾十年來對該系統進行嚴格投資的結果。

And this consistent investment is why today we operate one of the tightest and most modern systems in the nation, and we use that system to deliver 50% more energy than any other gas or electric utility in Oregon. That's why our system is an energy powerhouse for the communities that we serve. And we believe the two integrated systems, gas and electric are better than one. That's a starting point for our climate strategy as we leverage our system that's already in place and new innovative ways to drive emissions down even further. And to that end, I'm proud to announce that Northwest Natural has signed agreements with Waste Management doing business with WM that provides us exclusive rights to construct a renewable natural gas facility at W. M's landfill and East Wenatchee, Washington.

這種持續的投資就是為什麼我們今天經營全國最嚴格、最現代化的系統之一，我們使用該系統提供的能源比俄勒岡州任何其他天然氣或電力公司多 50%。這就是為什麼我們的系統是我們所服務的社區的能源動力來源。我們相信天然氣和電力這兩種整合系統比其中一種更好。這是我們氣候策略的起點，因為我們利用現有的系統和新的創新方法來進一步減少排放。為此，我很自豪地宣布，西北自然公司已與廢物管理公司簽署了與WM 開展業務的協議，該協議為我們提供了在W.M 垃圾掩埋場和華盛頓州東韋納奇建造可再生天然氣設施的獨家權利。

We expect that facility could begin generating RNG in late 2025, providing a 20-year supply of RNG from the so the facility once constructed this would be Northwest Natural's third RNG facility investment and the first facility located in the Pacific Northwest. We'll continue to work on multiple fronts to advance decarbonization efforts for our customers. A few comments on Northwest Natural water. Since our water strategy began in 2017, we've grown through more than 30 acquisitions. What started with water utilities quickly turned to opportunities in wastewater we took an additional step in 2023 by launching the water services company and expect that this new business will complement our Water acquisition strategy.

我們預計該設施將於 2025 年末開始生產 RNG，提供 20 年的 RNG 供應，因此該設施一旦建成，將是 Northwest Natural 的第三個 RNG 設施投資，也是位於太平洋西北地區的第一個設施。我們將繼續在多個方面開展工作，為客戶推進脫碳工作。關於西北天然水的一些評論。自 2017 年開始實施水務策略以來，我們已透過 30 多次收購實現了發展。最初從自來水公司開始，很快就轉向了廢水領域的機遇，我們在 2023 年又邁出了一步，成立了供水服務公司，並預計這項新業務將補充我們的水務收購策略。

Today, Northwest Natural ranked among the 20 largest privately owned water utilities in the United States based on customer GAAP accounts. This is an impressive, impressive achievement, in my opinion, acquisition by acquisition system by system year by year. We've built this into a meaningful business. There is no shortcut to consolidate in a fragmented sector, patience, discipline and ingenuity are the keys to success, and we are committed to this area for the long term. We've been successful at providing professionalizing the systems we've acquired, standing up safety programs, enhancing customer service, putting structured capital expenditure planning in place and executing on those plans.

如今，根據客戶 GAAP 帳戶，西北自然公司躋身美國 20 家最大私人水務公司之列。在我看來，這是一項令人印象深刻、令人印象深刻的成就，是逐年逐一有系統地進行收購的。我們已將其打造為一項有意義的業務。在一個分散的領域進行整合沒有捷徑，耐心、紀律和聰明才智是成功的關鍵，我們將長期致力於這個領域。我們成功地提供了我們所購買的系統的專業化、建立安全計劃、增強客戶服務、制定結構化資本支出計劃並執行這些計劃。

And since 2018, our property plant and equipment assets have grown from $3.6 million to almost $150 million at the end of 2023. And we're not done what we found is a tremendous amount of investment needed to ensure clean and safe water and wastewater services to our customers and while that CapEx has created regulatory lag in the near term, we know the long term, it will benefit customers and investors alike. I continue to believe the diversification and long-term earnings and cash flow power of this business. Our focus is on smart acquisitions and follow-on investments as well as executing rate cases as necessary.

自 2018 年以來，我們的地產廠房和設備資產已從 360 萬美元成長到 2023 年底的近 1.5 億美元。我們還沒有完成我們發現需要大量投資來確保為客戶提供清潔、安全的水和廢水服務，雖然資本支出在短期內造成了監管滯後，但我們知道從長遠來看，它將受益客戶和投資者都一樣。我仍然相信該業務的多元化、長期盈利和現金流能力。我們的重點是明智的收購和後續投資以及必要時執行利率案例。

In summary, I'm pleased with all the accomplishments, our employees and this management team achieved in 2023, we made substantial progress on all strategic initiatives. 2024 is challenging due to larger than usual, the larger than usual regulatory lag that we are experiencing, but it also will bring additional opportunities. I can assure you that our leadership team and employees are highly engaged to ensure success not only this year, but in 2025 and years to come, that's why we're reaffirming our 4% to 6% long-term earnings per share growth rate off of the 2022 base year of $2.54. Thanks for joining us this morning and listening to us to go through quite a few remarks here daily with that, and I think we're ready to open it up for questions.

總而言之，我對我們的員工和管理團隊在 2023 年的所有成就感到高興，我們在所有策略措施上都取得了實質進展。 2024 年充滿挑戰，因為我們正在經歷比平常更大的監管滯後，但它也將帶來更多機會。我可以向您保證，我們的領導團隊和員工高度投入，不僅確保今年、而且在 2025 年和未來幾年取得成功，這就是為什麼我們重申 4% 至 6% 的長期每股收益增長率2022 年基準年為2.54 美元。感謝您今天早上加入我們並聆聽我們每天在這裡進行的一些評論，我認為我們已經準備好提出問題了。

(Operator Instructions)

（操作員說明）

Selman Akyol from Stifel.

來自 Stifel 的 Selman Akyol。

Good morning, John, and good morning. Let's just start off in terms of the rate case that you filed up the how's it being received? And can you talk about anything that's contentious or you think you're going to get all that you're asking for?

早安，約翰，早安。讓我們從您提交的費率案例開始，收到的情況如何？你能談談任何有爭議的事情或你認為你會得到你所要求的一切嗎？

Thank you, Selman. We are in the early stages we filed at the end of December. So we're obviously in the middle of February. Here are some, you know, we're in fact, some negotiations will be coming up soon. But there's really been nothing that's been filed from the other side or anything that gives us any indication on where we're at. So it's just very early days. And so it's a little early to opine on whether we'll what level we think we're going to be at, whether it's going well or not. This was well telegraphed, the commission and the staff we've been working with them on a regular basis to know what our situation is with land just like we do with all of our rate cases. So this did not come to us as a surprise to anybody that follows us closely and so on.

謝謝你，塞爾曼。我們於 12 月底提交申請，目前正處於早期階段。所以我們顯然是在二月中旬。事實上，我們很快就會進行一些談判。但確實沒有從另一方提交的任何文件或任何可以讓我們了解我們所處位置的資訊。所以現在還處於非常早期的階段。因此，現在判斷我們是否會達到我們認為將達到的水平，無論進展順利與否，還為時過早。這一點得到了很好的傳達，委員會和我們的工作人員一直在定期與他們合作，以了解我們的土地狀況，就像我們處理所有費率案件一樣。因此，對於任何密切關注我們的人來說，這並不令我們感到驚訝。

Got it from. And then it sounds like key the two facilities ADR looks like it's being pushed to the right. I guess I'm curious how much was in your planning for that for in 24? It sounds like it's going to be more incremental and pushed out to 25.

從那裡得到的。然後，這兩個設施聽起來很關鍵，ADR 看起來像是被推到了右邊。我想我很好奇你在 24 年內計劃了多少？聽起來會更加增量並推至 25。

Bert, do you want to take down?

伯特，你想拿下嗎？

Yes or Thank you for the question. We did have some earnings in 23 that we expected and then we've moderated that for 24. We do expect that the facilities will come online kind of late 24 and provide some level of earnings, but we don't view that to be material and then we expect full year earnings starting at 25. And we've not given any specific guidance on numbers at this stage.

是的或謝謝你的提問。我們確實在 23 年獲得了一些預期的收益，然後我們對 24 年的收益進行了調整。我們確實預計這些設施將在 24 月底上線並提供一定程度的收益，但我們認為這並不重要，然後我們預計全年收益將從 25 開始。現階段我們還沒有就數字給予任何具體指引。

But when I think about 24, I think about the reduction in guidance, can you give some indication of how much was due to that being pushed to the right?

但是，當我想到 24 時，我想到了指導的減少，您能否給出一些指示，說明有多少是由於被推到右側而導致的？

Yes, yes. I mean, I think that again, the part year versus full year, you could probably think about there being about a dime of movement out into the outer years there associated with that, again, some and most of the decrease 24, 23, 24 is due to the lag in the gas utility, the that's the big driver of that totally totally understand and appreciative on that.

是的是的。我的意思是，我再次認為，與全年相比，您可能會想到與此相關的外部年份有一分錢的移動，同樣，部分和大部分減少 24, 23, 24是由於天然氣公用事業的滯後造成的，這是人們完全理解和讚賞這一點的重要驅動力。

Okay.

好的。

Let me just leave it there for now.

讓我暫時把它留在那裡。

Thank you.

謝謝。

Thanks, John.

謝謝，約翰。

Thank you.

謝謝。

As a reminder, if you would like to ask a question, please, so followed by one on your telephone while daily it's Friday.

提醒一下，如果您想提問，請在每天週五時透過電話提問。

It looks like it's pretty quiet out there. I don't think we have any other questions that we see. So I really do appreciate everybody on the line that listen to where we're at. As always, if you have any questions, please follow up with making sparkling and further should be able to walk you through anything that you might have questions on. And of course, we look forward to seeing you all soon. And with that, take care and have a great weekend, everybody.

看起來外面很安靜。我認為我們沒有看到任何其他問題。所以我真的很感謝在線上每一個傾聽我們情況的人。像往常一樣，如果您有任何疑問，請跟進“製作閃閃發光”，進一步應該能夠引導您解決任何您可能有疑問的問題。當然，我們期待很快見到大家。就這樣，大家保重，週末愉快。

This concludes today's conference call and thank you all for your participation. You may now disconnect your lines.

今天的電話會議到此結束，感謝大家的參與。現在您可以斷開線路。

No.

不。