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NorthWestern (NWE) - 2024 Q4 - Earnings Call Transcript
NWENorthWestern (NWE)2025-02-13 21:52

Financial Data and Key Metrics Changes - The company reported diluted GAAP EPS of 3.65forthefullyear2024,anincreasefrom3.65 for the full year 2024, an increase from 3.22 in 2023, representing a 13% growth [10][22]. - For Q4 2024, GAAP earnings were 1.31comparedto1.31 compared to 1.37 in the same quarter last year, with adjusted earnings of 1.13afteraccountingforweatherandtaximpacts[17][20].BusinessLineDataandKeyMetricsChanges−Thecompanycompletedover1.13 after accounting for weather and tax impacts [17][20]. Business Line Data and Key Metrics Changes - The company completed over 550 million in capital investments, including the launch of the Yellowstone County generating station [9]. - The full-year impact of new base rates contributed 62.4milliontoearnings,withcontinuedimprovementintransmissionrevenues[26].MarketDataandKeyMetricsChanges−Thecompanyexperiencedasignificantimpactfrommildweather,whichreducedQ4resultsby62.4 million to earnings, with continued improvement in transmission revenues [26]. Market Data and Key Metrics Changes - The company experienced a significant impact from mild weather, which reduced Q4 results by 0.10 compared to normal and 0.04versusthepriorperiod[20][22].−ThecompanynotedthattheMontanaratereviewprocessisongoing,whichcouldaffectfutureearnings[41].CompanyStrategyandDevelopmentDirection−Thecompanyisaffirminglong−termEPSgrowthtargetsof40.04 versus the prior period [20][22]. - The company noted that the Montana rate review process is ongoing, which could affect future earnings [41]. Company Strategy and Development Direction - The company is affirming long-term EPS growth targets of 4% to 6% and has announced a 2.74 billion five-year capital plan, an 11% increase over the previous plan [11][36]. - The strategy includes focusing on data centers and large load opportunities, which are expected to drive future growth [12][49]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the lack of interim rate support in Montana, which impacted earnings in 2024 [62]. - The company remains optimistic about future growth opportunities, particularly in regional transmission and large load development [33][34]. Other Important Information - The company has a strong focus on credit quality and plans to improve its financial position to support future growth [30]. - Regulatory updates indicate that the company reached a settlement with the South Dakota PUC regarding gas rates, while the Montana rate review is still in progress [38][39]. Q&A Session Summary Question: Why is 2024 the base year for growth? - Management clarified that 2024 was chosen as it is the most recent completed year, despite being impacted by interim rate issues [61][62]. Question: What is attracting data centers to Montana? - The company highlighted capacity, a cooler climate, and a carbon-free energy portfolio as key factors attracting data centers to Montana [81][82]. Question: When will the company earn its authorized return in Montana? - Management indicated that due to regulatory lag, it is difficult to predict when the authorized return will be achieved, but they are focused on constructive outcomes in the ongoing rate review [95][96]. Question: What are the drivers of the capital expenditure increases? - The capital plan is driven by the need for reliability improvements and system renewals, particularly in Montana Electric and gas transmission systems [129][130]. Question: What is the timeline for the Northpointe Connector project? - The company aims to move from a letter of intent to commercial agreements by mid-year 2025 [90].