Core Insights - The energy sector is experiencing unprecedented load growth driven by data center demand, leading to a shift in generation and procurement strategies among utilities [2][4][5] - Traditional engineering, procurement, and construction (EPC) models are being disrupted by urgent timelines and equipment shortages, necessitating a more integrated approach to project execution [8][9][13] - Workforce shortages are emerging as a critical constraint, with a significant need for skilled labor to support the expanding energy infrastructure [17][18] Group 1: Load Growth and Demand - Utilities are signing large-load agreements to meet accelerated demand, with Southern Co. securing over 2 GW in recent contracts and projecting a 50-GW pipeline through the mid-2030s [2] - NextEra Energy has a 30-GW renewables and storage backlog, driven by partnerships with data centers, highlighting the shift towards bespoke generation agreements [3] - Dominion Energy reports a 17% increase in data center demand, with 47 GW in various contracting stages, emphasizing the need for timely resource development [4] Group 2: EPC Model Transformation - The traditional EPC model is being inverted due to geopolitical tensions and supply chain disruptions, leading to a focus on urgency rather than cost [8][9] - Companies like Burns & McDonnell are integrating consulting with execution to address the complexities of energy transition and project delivery [13] - The urgency of data center timelines is forcing utilities to adapt their project execution strategies, with a shift from "Ready, Set, Go" to "Ready, Go, Set" [13] Group 3: Workforce Challenges - The global power engineering workforce needs to double by 2030 to meet infrastructure demands, with significant competition for skilled labor [17] - Companies are investing in workforce development initiatives, such as Burns & McDonnell's Construction Academy, to address labor shortages [18] - Bechtel and Kiewit are implementing training programs to build a self-sustaining pipeline of skilled workers, recognizing the critical need for labor in project execution [18]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP EPS of $0.34, including $0.10 of merger-related costs, resulting in an adjusted EPS of $0.45 compared to $0.35 for Q3 2024, reflecting a year-over-year increase [10][11] - Year-to-date EPS was reported at $2.58, including $0.11 of merger-related costs, leading to an adjusted EPS of $2.68, a 6.3% increase from $2.52 in the same period last year [12][14] - The company reaffirmed its 2025 earnings guidance with an adjusted EPS range of $4-$4.20, indicating a 5% growth rate at the midpoint over 2024 EPS [6][15] Business Line Data and Key Metrics Changes - Regulatory efforts contributed $0.21 per share of new rates and rider recovery margin for Q3 2025, offsetting unfavorable weather and increased operating costs [10][11] - Customer growth, particularly from large load customers like data centers, is positively impacting earnings, with ongoing negotiations for over 3 gigawatts of demand [6][18] Market Data and Key Metrics Changes - The company is experiencing strong economic conditions in its service territories, with no significant indicators of weakness noted [32] - The merger with Northwestern Energy is expected to enhance competitive positioning and create additional value for customers and shareholders [9] Company Strategy and Development Direction - The company is executing a $1 billion capital plan to support key projects and has made significant progress on regulatory and growth initiatives [4][5] - The merger with Northwestern Energy is anticipated to be finalized in the second half of next year, which will provide increased scale and new opportunities [9][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term growth targets, supported by a $4.7 billion capital plan and strong customer demand [7][15] - The company is on track to complete major projects, including the Ready Wyoming transmission expansion and the Lang 2 generation project, which are expected to enhance service reliability and support growth [20][21] Other Important Information - The company has maintained a healthy balance sheet with a net debt to total capitalization target of 55% and a strong liquidity position [14] - The company has a long-standing commitment to dividends, targeting a payout ratio of 55%-65% [16] Q&A Session Summary Question: Data center resource requirements and equipment reservations - Management confirmed they have reservations in place and are utilizing a flexible service model to meet growing demand [26][27] Question: Concerns about the approval process in Montana - Management is closely monitoring the situation and remains optimistic about the approval process [29] Question: Fourth-quarter issues that might impact guidance - Management indicated no significant operational or financial issues, with weather being the primary concern [30][31] Question: Indicators of economic weakness in service areas - Management reported no signs of weakness in their service territories, with conditions remaining strong [32] Question: EPS upside from data center projects - Management acknowledged the potential for significant EPS growth from data centers, but emphasized the variability in contractual agreements [40][41] Question: Strategic considerations for coal mine assets - Management is keeping options open regarding the coal mine, aware of potential rare earth minerals but not expecting significant monetization in the near term [45]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2025 was $3.84 billion, a decrease from $3.96 billion in Q3 2024, but flat year-over-year when excluding non-recurring items [3][4] - Year-to-date adjusted EBITDA reached $11.8 billion, compared to $11.6 billion for the same period in 2024 [4] - Distributable Cash Flow (DCF) attributable to partners was approximately $1.9 billion for the first nine months of 2025 [4] Business Line Data and Key Metrics Changes - NGL and refined products segment adjusted EBITDA increased to $1.1 billion from $1 billion in Q3 2024, driven by higher throughput [4] - Midstream segment adjusted EBITDA decreased to $751 million from $816 million in Q3 2024, impacted by a one-time business interruption claim in the previous year [5] - Crude oil segment adjusted EBITDA was $746 million, down from $768 million in Q3 2024, affected by lower transportation revenues [5] - Interstate natural gas segment adjusted EBITDA decreased to $431 million from $460 million in Q3 2024, but included a $43 million increase from a prior tax obligation resolution [6] - Intrastate natural gas segment adjusted EBITDA fell to $230 million from $329 million in Q3 2024, despite increased volumes due to third-party growth [7] Market Data and Key Metrics Changes - The company experienced strong volumes in natural gas interstate and intrastate pipelines, with significant demand expected to support growth in gas-fired power plants and data centers [8][10] - The Desert Southwest pipeline project is fully contracted under long-term commitments, indicating strong market demand [9] Company Strategy and Development Direction - The company plans to spend approximately $4.6 billion on organic growth capital projects in 2025, down from a previous estimate of $5 billion [7] - Future growth capital is expected to be around $5 billion in 2026, primarily focused on natural gas segments [7] - The company is exploring converting NGL pipelines to natural gas service due to competitive pressures and potential for higher revenue [12][45] - Significant expansions in processing capacity in the Permian Basin are anticipated to support downstream pipeline networks [18][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning to meet growing energy demand and highlighted a strong backlog of growth projects [23][24] - The company is focused on capital discipline and ensuring projects meet risk-return criteria before proceeding [22][76] - Management noted that the LNG project at Lake Charles is contingent on securing sufficient equity partners and contracts before moving to a final investment decision (FID) [22][76] Other Important Information - The company has entered into multiple long-term agreements with data centers and power plants, reflecting a growing demand for natural gas supply [15][36] - The expansion of the Bethel natural gas storage facility is expected to double its capacity, enhancing reliability and addressing demand fluctuations [13][66] Q&A Session Summary Question: Clarification on guidance for the year - Guidance for 2025 does not include the acquisition of Parkland, and the company expects to be slightly below the initial guidance range [27] Question: Details on Lake Charles LNG project - The company is focused on securing contracts and equity partners before proceeding to FID, with ongoing discussions to finalize agreements [28][30] Question: Financial impact of recent data center deals - The company is optimistic about the financial impact of data center agreements, which are expected to drive significant revenue growth [33][36] Question: Growth backlog and CapEx outlook - The company has a strong backlog of high-return projects, with a projected CapEx of $5 billion for the next year [54][55] Question: Converting NGL pipes to natural gas service - The company is considering converting underutilized NGL pipelines to natural gas service due to competitive pressures and potential for higher revenue [42][45] Question: Crude oil projects and earnings growth - The company expects new connections with Enbridge to maintain and potentially grow earnings across crude assets [46][50]

Financial Performance - Q3 2025 Adjusted EBITDA was $384 billion[7] - Excluding non-recurring items, Adjusted EBITDA was flat compared to Q3 2024 of $396 billion[7] - Distributable Cash Flow attributable to partners was $190 billion in Q3 2025[7] - YTD 2025 Growth Capital Expenditures were $31 billion and Maintenance Capital Expenditures were $711 million[7] - 2025 Expected Growth Capital is ~$46 billion, down from ~$50 billion[7] Operational Highlights - Total NGL exports increased by 13%, setting a new partnership record[7] - NGL transportation volumes increased by 11%, setting a new partnership record[7] - NGL and refined products terminal volumes increased by 10%, setting a new partnership record[7] - Midstream gathered volumes increased by 3%, setting a new partnership record[7] - Interstate natural gas transportation up 8%[7] - Intrastate natural gas transportation up 5%[7] Strategic Initiatives - Announced the 15 Bcf/d Desert Southwest expansion project, including a 516-mile natural gas pipeline[7] - Reached positive FID on the construction of a new storage cavern at Bethel natural gas storage facility, doubling capacity to over 12 Bcf[7]

Core Insights - The company is initiating a leadership transition plan to appoint a new CEO while maintaining business continuity and focusing on profitable growth initiatives [1][3][71] Financial Performance - The company reported a solid third-quarter performance with sales up approximately 2% and orders up about 10%, indicating strong top-line momentum [2][10] - Adjusted earnings per share for the quarter was $2.51, an increase compared to the prior year [9][10] - Free cash flow generated in the third quarter was $174 million, primarily used to pay down debt, with expectations to generate $625 million for the year [10][30][66] Market and Segment Analysis - The data center market is a significant growth area, with $135 million in orders booked in the quarter and an additional $60 million in October, reflecting strong traction [7][11] - The company’s data center business is projected to grow from $30 million five years ago to an estimated $130 million this year, with a bid pipeline approaching $1 billion [11][12][62] - Orders in the automation and motion control (AMC) segment were up 31.7% year-over-year, driven by large data center orders [24][21] Margin and Cost Dynamics - The adjusted gross margin for the third quarter was 37.6%, down 80 basis points from the prior year, impacted by tariffs and rare earth magnet availability [8][10] - Adjusted EBITDA margin was 22.7%, reflecting synergy benefits offset by mix tariffs and rare earth pressures [9][10] - The company expects to achieve margin neutrality on tariffs by the end of next year, with ongoing efforts to manage tariff impacts [30][59] Future Outlook - The company anticipates low to mid-single-digit organic sales growth in 2026, with data centers contributing significantly to this growth [38][50] - Expectations for free cash flow in 2026 are nearly $900 million, supporting further debt reduction and improving leverage ratios [39][66] - The company is investing in expanding capacity in its data center business, with new facilities in British Columbia and Texas expected to enhance production capabilities [18][19][78] Leadership Transition - The board has initiated a comprehensive search for a new CEO, expected to take about four to six months, ensuring a smooth transition and continuity in strategy [71][72]

Financial Data and Key Metrics Changes - The company reported third quarter 2025 earnings of $0.83 per share, which is one cent higher than the adjusted earnings for the same period in 2024 [3][12] - The earnings guidance for 2025 remains reaffirmed at a range of $5.17 to $5.27 per share, assuming normal weather conditions for the remainder of the year [3][15] - The utility operations contributed $0.12 more to earnings compared to third quarter 2024 adjusted earnings, with weather positively impacting earnings by about $0.01 [12] Business Line Data and Key Metrics Changes - Weather-normal retail electric deliveries increased by 1.8% compared to the third quarter of 2024, driven by a 2.9% growth in the large commercial and industrial segment [13] - Earnings from the American Transmission Company segment contributed an incremental $0.02 to Q3 earnings versus 2024 [14] - Earnings from corporate and other segments decreased by $0.11, primarily due to tax timing and higher interest expenses [14] Market Data and Key Metrics Changes - Wisconsin's unemployment rate stands at 3.1%, which is below the national average, supporting economic growth in the region [6] - The company expects electric demand to grow by 3.4 GW between 2026 and 2030, an increase of 1.6 GW compared to the prior plan [4][6] Company Strategy and Development Direction - The company plans to invest $36.5 billion in capital projects between 2026 and 2030, which is an increase of $8.5 billion from the previous five-year plan, representing over a 30% increase [6][8] - The updated capital plan anticipates an average asset base growth rate of just over 11% per year, supporting long-term projected earnings per share growth of 7% to 8% annually from 2026 to 2030 [6][17] - The company is focusing on an all-of-the-above approach for generation, investing in natural gas, batteries, and renewables to support economic growth and reliability [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future and investment opportunities, citing strong economic development and load growth in Wisconsin as the foundation for the new five-year plan [17][18] - The management team highlighted that the growth from large customers is fostering small commercial and residential development throughout the service territory [5][6] Other Important Information - The company plans to file a rate case in Wisconsin for its biannual process, looking at inflation-type increases, but ensuring that costs from hyperscalers do not affect other customers [70] - The Very Large Customer tariff is designed to ensure that large customers pay their fair share without subsidizing other customers [10][52] Q&A Session Summary Question: On the updated growth outlook and back-end loading - Management explained that the compound annual growth rate (CAGR) will ramp up post-2027, with expectations of 7% to 8% growth in the outer years [20][21] Question: Timing around Point Beach conversations with NextEra - Conversations are ongoing, but may be shifting further out, with no capital included in the current plan for potential capacity replacement [23] Question: Microsoft expansion and its impact on the plan - Management confirmed that the growth in Southeastern Wisconsin is largely driven by data center projects, including Microsoft and Vantage Data Centers [27][28] Question: Clarification on capital plan increase - The increase in capital plan is primarily due to investments in regulated electric generation, transmission, and distribution [7][9] Question: Impact of Illinois legislation on growth - Management indicated that the Illinois legislation is being monitored, but does not expect it to have a significant effect on the company [32] Question: Future growth opportunities beyond the current plan - Management sees potential for additional growth both within the current five-year plan and beyond, depending on customer development [73]

Financial Data and Key Metrics Changes - The company reported third quarter 2025 earnings of $0.83 per share, which is $0.10 higher than the adjusted earnings for the same period in 2024 [4][17] - The earnings guidance for 2025 remains reaffirmed at a range of $5.17 to $5.27 per share [5][21] - Weather positively impacted earnings by approximately $0.01 compared to last year, with a favorable impact of $0.03 in 2025 versus $0.02 in 2024 [19] Business Line Data and Key Metrics Changes - Utility operations earnings increased by $0.12 compared to third quarter 2024 adjusted earnings [18] - Retail electric deliveries, excluding the iron ore mine, saw a 1.8% increase compared to 2024, driven by a 2.9% growth in the large commercial and industrial segment [19] - Earnings from the Corporate and Other segment decreased by $0.11, primarily due to tax timing and higher interest expenses [21] Market Data and Key Metrics Changes - Wisconsin's unemployment rate stands at 3.1%, which is below the national average, supporting economic development [9] - The company expects electric demand to grow by 3.4 gigawatts between 2026 and 2030, an increase of 1.6 gigawatts compared to the prior plan [6][9] Company Strategy and Development Direction - The company plans to invest $36.5 billion in capital projects between 2026 and 2030, which is an increase of $8.5 billion from the previous five-year plan [9][10] - The updated capital plan anticipates asset-based growth at an average rate of just over 11% per year [10] - The company will utilize an all-of-the-above approach for generation, investing in natural gas, batteries, and renewables [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic development and load growth in Wisconsin, which is the foundation of the new five-year plan [24] - The long-term projected earnings per share growth is expected to be 7% to 8% annually on a compound basis between 2026 and 2030 [10][22] - Management noted that the growth from large customers is fostering small commercial and residential development throughout the service territory [8] Other Important Information - The company expects to maintain a dividend payout ratio of 65% to 70% of earnings, with a growth rate of 6.5% to 7% consistent with past practices [25] - The proposed very large customer tariff is under review, designed to meet the needs of large customers while protecting other customers [14][15] Q&A Session Summary Question: On the updated growth outlook and its back-end loading - Management explained that the growth is expected to ramp up in 2027, with a compound annual growth rate of 7% to 8% in the outer years [29][31] Question: Timing around Point Beach conversations with NextEra - Conversations are ongoing, but may shift further out; no capital is assumed in the current plan for potential replacements [34][35] Question: Microsoft expansion and its impact on the plan - Management expressed confidence in growth in Southeastern Wisconsin, with Microsoft’s data center potentially scaling up to 2 gigawatts [40][41] Question: Clarification on capital plan increase - The increase in capital plan is primarily due to additional investments in regulated electric generation and transmission [12][22] Question: Engagement with other potential customers - Management confirmed ongoing discussions with other customers but emphasized that Microsoft and Vantage are the main focus currently [95][96] Question: Impact of the very large customer tariff on customer rates - The tariff is designed to ensure large customers pay their fair share without subsidizing other customers [89][90]

Financial Performance - 2025 Q3 GAAP EPS 为 $0.88，持续经营 EPS 为 $1.24，而 2024 Q3 持续经营 EPS 为 $1.25[4] - 2025 年年初至今 GAAP EPS 为 $2.47，持续经营 EPS 为 $2.84，而 2024 年年初至今持续经营 EPS 为 $2.69[4] - 公司重申 2025 年持续经营 EPS 指导值为 $3.75 至 $3.85[4] - 启动 2026 年持续经营 EPS 指导值为 $4.04 至 $4.16[4] - 长期 EPS 增长目标更新为 6-8+%[4] Capital Investment and Growth - 更新了 600 亿美元的五年投资计划，提供约 11% 的年化费率基础增长[4] - 2026 年至 2030 年的总资本投资为 600 亿美元[5] - 2025 年至 2030 年的综合费率基础复合年增长率约为 11%[13] - 电力分配占 23%，电力生产占 39%，电力传输占 26%，天然气 LDC 占 6%，其他占 6%，总计 600 亿美元[8] Sales and Customer Data - 2025 年年初至今加权平均零售电力销售额增长 2.5%[39] - 2025 年第三季度同比增长电力客户增长 0.9%[41] - 预计 2025 年加权平均零售电力销售额增长约 3%[51] - 预计 2026 年加权平均零售电力销售额增长约 3%，天然气销售额增长约 1%[52] Strategic Initiatives - 计划投资约 50 亿美元用于野火缓解[6] - 签订了约 3 吉瓦的数据中心负载基础计划，到 2026 年[4] - 为 SPS 和 PSCo 中超过 6,000 兆瓦的增量资源发布了 RFP[4] - 正在进行的 EPS 增长为 6-8+%，股息收益率约为 3%，总股东回报率为 10+%[57, 59]

Market Outlook - Fluence expects US orders to constitute a significant portion of its backlog in the coming year [1] - The anticipated surge in US orders is attributed to increased power demand driven by electrification and data center expansion [1]

Group 1 - Flex Ltd. is recognized as a promising stock under $100, with BofA raising its price target to $65 from $58 while maintaining a Buy rating [1] - The company aims for a 20% CAGR in data center revenue and is currently exceeding this target, prompting BofA to increase its financial estimates for Flex [1][2] - Flex reported record results for FQ1 2026, with revenues of $6.6 billion, a 4% year-over-year increase, and an adjusted EPS of $0.72, reflecting over a 40% rise from the previous year [2] Group 2 - The primary growth driver for Flex is its Data Center business, projected to generate approximately $6.5 billion in revenue for FY2026, achieving an annual growth target of 35%, which constitutes 25% of total company revenue [2] - Flex is positioned as the sole provider of end-to-end cloud IT integration and a comprehensive power and cooling portfolio, offering integrated solutions including IT hardware and liquid cooling technology [3] - The company operates through two segments: Flex Agility Solutions/FAS and Flex Reliability Solutions/FRS, providing tech innovation, supply chain, and manufacturing solutions across various industries [4]