Good afternoon, and thank you for joining NorthWestern Energy Group's Financial Results Webcast for the quarter ended September 30, 2024. My name is Travis Meyer, and I am the Director of Corporate Development and Investor Relations Officer. Today, I am joined by Brian Bird, President and Chief Executive Officer, and Crystal Lail, Chief Financial Officer, who will guide you through the results and provide an overall update. NorthWestern's results have been released, and you can find them on our website at northwesternenergy.com. We also released our 10-Q before the market opened. Please be aware that the press release, this presentation, comments from presenters, and responses to your questions may include forward-looking statements. I encourage you to review the disclosures in our SEC filings and the safe harbor provisions on the second slide of this presentation. Additionally, this presentation contains non-GAAP financial measures, and you can find the non-GAAP disclosures, definitions, and reconciliations included in the presentation. The webcast is being recorded, and the archived replay will be available for one year starting at 6:00 p.m. Eastern in the Financial Results section of our website. Now, I will turn the presentation over to Brian for his opening remarks.

Thanks, Travis. Just real quickly on the recent highlights. We had reported GAAP diluted EPS of $0.76 for the quarter and non-GAAP diluted EPS of $0.65. We are revising our 2024 non-GAAP EPS guidance to $3.32 to $3.47 in light of the delay in Montana interim rates. We're also reaffirming our long-term 5-year rate base and earnings per share growth rate targets of 4% to 6%. From a dividend declared perspective, $0.65 per share payable December 31, 2024, to shareholders of record as of December 13, 2024. Yellowstone County Generating Station began serving customers in October. In August of 2024, the U.S. Department of Energy awarded a $700 million Grid Resilience and Innovation Partnership or GRIP grant to North Plains Connector Consortium project, which included a $70 million earmarked for the Colstrip transmission System upgrades. Of that $70 million, NorthWestern shares $21 million available for our investment in that line. Turning to the next page, in terms of NorthWestern's value proposition, we're still trading today, providing approximately a 5% yield. That, combined with a 4% to 6% EPS growth rate provides a total of a 9% to 11% total growth proposition. When you consider on top of that, some activity that we're exploring on the FERC transmission side of our business, providing incremental generating capacity and ultimately some incremental load addition in that line. The ability to continue to look at existing agreements, either from a QF perspective or power purchase agreements for possible buyouts. And just electrification, supporting economic development in our service territories, we believe can provide an 11-plus total growth proposition. With that, I'm going to turn it over to Crystal to talk about Q3 financial results.

Thank you, Brian. In my comments today, I will discuss our financial performance for the third quarter combined with our outlook for the remainder of 2024. As Brian mentioned, GAAP net income of $46.8 million for the quarter or $0.76 per share compares with $29.3 million or $0.48 per share for the prior quarter. Moving to Slide 9 to provide a bit more detail. As you can see from the quarter-over-quarter analysis, GAAP earnings grew by $0.28. This earnings growth was primarily due to rate review outcomes, transmission revenues and continued strength there and an income tax benefit. Partially offsetting these items was higher insurance costs driven by wildfire coverage. I think you've heard from probably all utilities, the increasing costs to operate our business, particularly on the impacts broadly of wildfire, and we've certainly seen that in our renewed coverage for the year, also higher costs at the depreciation and interest line that were certainly expected in our original assumptions for the period. A bit more on the income tax benefit reported during the quarter. It is due to the IRS issuing final guidance on gas repairs. Many of you know as well in our earnings, we are a flow through in each of our jurisdictions. And applying the safe harbor method, we recorded a $7 million tax benefit. As this relates to prior periods prior to 2024, we are adjusting this amount out. So you can see the impact in the bridge below as to the drivers for the quarter, again, $0.48 of earnings in the prior period, this quarter, closing on at $0.76 when you remove the impact of that tax repair benefit, you would see $0.65 of earnings over the quarter. A bit more detail on margin on Slide 10. The primary drivers there are the things we've touched on before, which is the ongoing regulatory execution, driving outcomes in the Montana electric and natural gas case last year. As a reminder, final rates were implemented on November 1. So what you see here, impacting Q3 is the lift off of what were the interim rates in place at the time in the prior period. And then also acknowledging our South Dakota electric case, we've had a full year this year of rate improvement there, along with continued growth in our transmission revenues. Moving to Slide 11. We provide a clear focus on where we're adjusting our earnings. So you can see in Q3 of 2024, the adjustments for weather and other matters are offsetting with the gas safe harbor repairs adjustment of $0.11, the most significant amount we are reflecting reducing our net income amount. This compares with a $0.01 adjustment for weather in Q3 2023. So when you look at the results from those two, that results in adjusted earnings of the $0.65 that we've mentioned on the prior slide versus $0.49 in the prior period on an adjusted basis. Moving to Slide 12. As we had updated you on our second quarter call, we executed our financing plan early in 2024 and have shown steady improvement in our FFO to debt metrics and the importance of that to our ongoing credit ratings. Our capital plans remain unchanged, and we continue to expect no equity in our current plans. Moving to Slide 13, I'll provide an update on why we're thinking about the remainder of 2024. Importantly, our financial performance year-to-date and for the quarter are consistent with our expectations. However, we are revising our guidance, as Brian mentioned, to a range of $3.32 to $3.47 from what our original range was of $3.42 to $3.62. I would note, we are navigating a complex regulatory landscape and an election year, and our revised guidance is driven by the delay in Montana interim rates as our original guidance expected interim rates on October 1. Customers and the states we serve benefit from the demonstration of a strong regulatory framework as do our owners. That regulatory framework is fundamental to attracting capital and continuing investment in our states. Many of you have taken note of the denial of interim rates in the MDU proceeding in Montana. Our revised guidance includes interim rate relief in Montana in December. The range of $3.32 to $3.47 reflects at the lower end, no interim rate relief and at the upper end, our requested amount. Providing a bit more perspective on that, particularly on the electric side, I'll dig in a bit deeper. We believe we have a strong case supporting our request and that our request for interim rate relief is a bit differentiated, specifically on the electric request. This includes both interim, on a base rate perspective and a request for adjustment of the PCCAM base. This is different than in the gas proceeding, where the gas tracker does not become a part of our rate review filings and is distinctly separate. Importantly, captured within the PCCAM adjustment is a bridge rate consistent with similar application in a prior docket, providing for a bridge to final recovery of the Yellowstone generation facility to cover costs until an outcome is determined in the docket. We're very proud of placing that asset into service here and serving customers currently, and we do believe that our request supports fair treatment of that asset. From an electric total bill perspective, the thing that you should keep in mind is that the downward pressure embedded in that PCCAM request results in a bill impact in total. So think about electric interim request base rates plus that PCCAM adjustment with the bridge rate is a total of approximately 1% for the combined interim base rate and PCCAM request with the bridge. Hopefully, the detail we provided here gives you a bit more clarity on how we're thinking about our interim rate request and how that's proceeding. We are confident in a fair outcome in all of our regulatory proceedings that will also enable us to deliver on our commitment of 4% to 6% EPS growth with no equity needs. Our plans for capital investment remain unchanged. I will also note that we plan to provide 2025 guidance following the outcome in our Montana rate review. I'll pass it back to Brian for thoughts on our rate reviews and concluding remarks.

Thank you, Crystal. On Page 15, we have the rate review summary. I won't go through it in detail, but I want to highlight that in South Dakota and Nebraska, all ongoing cases are progressing well, and we anticipate resolution in the first quarter of 2025. In Montana, a procedural schedule has been set. Key dates include intervenor testimony expected on January 17, 2025, and the hearing starting on April 22. The key issue discussed is the interim rates. Crystal mentioned some points regarding the interim, and I believe the Montana Commission recognizes that over 80% of our rate base is regulated by the MPSC, compared to about 12% for MDU. Thus, a negative outcome for us would more severely impact our credit ratings. Our interim rate requests for both electric and gas are based on over $1 billion of investments made in the state in 2023 and 2024. Specifically for electric, the net interim increase for customers, after accounting for the bridge rate, is about 1%. I believe the commission supports our investment in the Yellowstone County Generating Station as we work towards Montana's energy independence. For gas, the interim increase is approximately 7%, but after this increase, Montana's gas bills will still be lower than last October because of the drop in natural gas prices. Additionally, due to our significant investment in the state, we would need to file more often, potentially annually, without the benefit of interim rates. Rate reviews are costly and complex for everyone involved, and an interim rate increase helps provide a smaller, more frequent price signal to customers, reducing the potential for rate shock. We at NorthWestern are confident that the MPSC will take all this into account when deciding on our interim rate request. Now, we will open the floor for questions.

Thank you, Brian and Crystal. We will now take our first question from Shar at Guggenheim. Shar, your line should be muted.

Hi guys, can you hear me?

Yes, we sure can.

So Brian, obviously, the delayed order with interim rates in Montana impacted the numbers. I guess what's driving the delays. And with your internal planning assumptions now assuming interim rates go into effect in December. I know it's post elections, but what's giving you the confidence there for a December order and can we see further impacts in Q1? I'm still not sure why there's confidence there.

Yes. I would say this. I think you've got two rate cases that they're dealing with, with other filings as well in front of the commission. So I can't speak to the timing. Our expectation was when we initially made our filing that we would have, like we had in the last rate case, an outcome around the October timetable on interim rates and a successful outcome on interim rates. I can't necessarily speak for the decisions. Obviously, we had a delay in accepting of our filing initially that potentially caused a delay here. But we still thought interim rates could have been decided in October as a result, even with that delay. So I can't speak to it. I do feel very, very good for the reasons as Crystal pointed out and the reasons, I pointed out why our interim rate filing should be accepted as is.

And Shar, I would like to add to that by providing more detail about what constitutes those rate requests. The MDU request is somewhat different and more aligned with our natural gas operations. However, on the electric side, due to the PCCAM base, we can only reset it during a rate review. The supply portion, specifically the pass-through supply part of the bill, is being addressed in an interim request concurrently, and the unique nature of this interim request connected to Yellowstone brings different considerations for the commission. It is important to understand how they will support and indicate investment in Montana, especially as it pertains to a facility that is currently serving customers. In the appendix of our materials, we provide additional details about that request. Through this process, customers will experience a decrease in their bills for one part of it. Therefore, I am confident that the commission will take all these factors into account when making a decision in our case.

Got it. That's helpful, and I appreciate it. Hopefully, the commission makes the right decision because it's definitely affecting the cost of capital. Regarding the upside opportunities, you have had the additional CapEx buckets for a while. How should we consider when we might see this in your current plan through 2028? Aside from winning the RFPs for generation, what is preventing progress in other areas like PPA buyouts and transmission opportunities?

I think it's just fair to say, Shar, that we're in process on working on a number of fronts on these things and things maybe take more time than originally considered. So we're working on things on the transmission front. We're working on things in the generation front and stay tuned.

That's good. I appreciate it. That answers it. We'll see you guys in a week.

Thanks, Shar. All right. We will take our next question from Chris Ellinghaus at Siebert Williams. Chris, your line should be open. Chris, looks like your line is maybe muted on your end.

Well, there we go. How's that.

Jasper.

How are you? When you need to start construction, you must receive a notice to proceed, or you have to submit notices of intent for rate cases. Shouldn't commissions provide some sort of notification when there’s a deadline in the opposite direction? If you have a request for a date, shouldn't they at least give you an idea of when they might address that?

We made it clear in our filings that after 270 days, we will be implementing rates. That is one deadline we can definitely meet. Throughout my 20 years here, interim rates have typically come at various times. Our recent review process suggested we expected something similar this time. While I can't comment on the specific timing rules, I know that we have experienced different outcomes and timings for interim rates in the past. However, more recently, October seemed like a reasonable expectation.

Right. So Brian, you sort of alluded to the logic of the interim and some of the parts like Yellowstone that they should have a good comprehension of. But when they look at the stock, if they do at all, and they see a 5% yield, and we're talking about 11% plus sort of total return profile. Do they also recognize that you shouldn't really have an 11% total return profile at this point and where interest rates are. So do you think that they also appreciate that the stock is not reflecting well upon the Montana Commission?

I can't speak for individual commissioners. I'd expect at least on a dividend yield perspective, having a dividend yield closer to 5% when others do not have a dividend yield that high. They should understand that our stock is underperforming versus others. That's as far as I'd go, Chris.

Chris, I want to add that as we respond to data requests, it's important to recognize the cost of capital, which Shar mentioned. You asked whether people understand how our stock performance impacts commission decisions. We clearly demonstrate that a strong regulatory agreement results in lower costs for customers due to a lower cost of capital. Conversely, higher capital costs lead to increased costs for customers. Your comments on our stock price and Shar's earlier remarks align with this. We present these points in our data responses and testimonies to emphasize what benefits customers. Our goal is to achieve a balance that benefits both customers through lower capital costs and shareholders by providing a reasonable return for those investing in areas like Montana.

I'll also add, Chris, if you've been covering this company for a very, very long time, you will recall, post-bankruptcy over 20 years ago, that when we didn't have a strong financial picture, our costs from a cost of capital perspective are higher. And as our ratings improved, we could demonstrate to the commission that, in fact, the cost of capital for customers, actually, went down when we had a stronger financial profile. You also understand though that the commission turns over because it's an elected commission. So those commissioners are no longer there, may not be aware of that history. So it's on us to certainly educate them.

Yes, Crystal, it's challenging to assess the impact of events like this on the cost of debt, especially in the short term, but you can definitely note a 150 basis point rise in the cost of equity compared to peers, which certainly complicates matters. You have some solid data points there. I wanted to inquire about the North Plains Connector. Do you have any updates or a sense of when we might reach a resolution on that?

I would say this, we are certainly well positioned at Colstrip with North Plains Connector. As you know, we certainly have good relationships with the utilities to the east of us, we have good relationships with the utilities to the west of us. And obviously, as markets continue to develop, I think our position on North Plains Connector makes good sense. So we are definitely taking that seriously. We're evaluating it. We're talking with the folks at Grid United about our interests there.

Okay. And one last question. I sort of mentioned that the interim might be partly influenced by the election cycle. That's coming to close here pretty soon. Do you think that once the election is complete, that starts a clock from a political standpoint on when the interim consideration might begin?

I would just say this, Chris. We have been exchanging data requests with both PSC staff and others. So that's our clearest indicator of where they're moving from a timing perspective. So we do have indication, they're very close to wrapping up their work on an interim recommendation. And I think that's a key piece of what we see as timing. You started your question with is there a shot clock on this thing? Interim rates is a little bit different. But I would tell you based on indications of the data request that we've received, we expect it to be on the docket sometime in November.

Okay. Thanks for the detail. Appreciate it.

Thanks Chris.

We'll take our next call from Nick Campanella at Barclays. Nick, looks like your line still maybe muted.

Hi, everybody. Can you hear me?

It sounds like Richard maybe or Nathan.

Yes. It's actually Nathan on for Nick. Thank you for taking the question. So how is FFO to debt trending towards the end of this year given the delay in rates? And do you feel comfortable in meeting your minimums?

That's a great question, Nathan. And I probably should have noted that in our forecast outlook, and I would say this about our range. I mentioned that the revised range at the low end reflects no interim rate relief. And while we've made important and good strides on solidifying our credit metrics and where we need to be that numerator, as you might imagine, is very sensitive to cash inbound. And without any rate relief in 2024, we will fall back below our downside threshold for 2024. With some interim rate relief as we have expected here from a guidance perspective, think about kind of in the middle of the range. We still wouldn't be quite as good as we are now, but certainly above our downside thresholds. The other thing that I would just mention, while I'm not giving 2025 guidance, I would acknowledge for 2025, we will not put rates in the earliest of which is likely the 270-day shot clock that Brian mentioned in response to some of Chris' questions, no interim rate relief during the first five months of 2025 would leave us slightly below our downside threshold in 2025 as well. So the impact to credit metrics, we are making that case to the commission and staff and you're asking the good question of it's certainly a significant impact to us to have invested in the State of Montana to have this much capital we need to recover and we need support from a credit perspective and need that cash on the numerator side to make sure we stay above our downside threshold, but significant impacts both for '24 and '25 from a credit metrics perspective, if we would receive no interim rate relief.

Got it. That makes a lot of sense. And just one more. Do you plan on updating the IRP and generation opportunity now that you have the Yellowstone and rates or that should be coming shortly?

I think 2026 is still the timeline from an IRP perspective. Obviously, we continue to watch what's happening at both the federal and state level in terms of needs on a going-forward basis, but 2026 is our current plans.

Got it. Thank you very much. Have a good one everybody.

All right. We will take our next call from Julian at Jefferies. Julian, or one of his teammates, I'm guessing.

Hi. It's Brian Russo on for Julian. Can you hear me?

Hi, Brian. Sure, we can.

So just regarding Colstrip and the EPA GHG rules, do you have any updates on retrofitting or retirement? What should we be watching for going forward if it is retired, and what do you expect your net short position to be? How does this affect the additional CapEx or growth potential that you mentioned in your charts?

Yes. From a MATS perspective, assuming the rules remain unchanged, we are involved in litigation, and so are others. The upcoming decisions could influence the MATS situation. We will continue to address this matter. If necessary, we will need to proceed with baghouse installations. We believe that to provide significantly more megawatts than the original 222 megawatts for customers in Montana, we need to invest in a baghouse. I hope we and the commission can reach an agreement on this going forward.

Great.

Back to Brian, one thing to take your GHG. It's interesting. I think everyone knows there's quite a bit of litigation around the GHG rules too. Obviously, we'll be following those closely. I clearly struggle with those rules, but it's something that we'll have to continue to keep an eye on as well from our investment in Colstrip.

Thank you.

Thank you, Brian. And our next call in the queue is from Dylan at Ladenburg Thalman.

Hi, how you guys doing.

Good Dylan.

It's a question. So should investors consider the outcome of the election has having a bearing on the future operation of Colstrip?

I think I would put it in this context. Certainly, the federal elections could have an impact on the operations of Colstrip. I think the what's required to continue to operate the plant and the ultimate costs associated with continuing to run the plant. I think that I'm less concerned about the in-state elections associated with that. I think we've seen tremendous amount of support within the state legislatively regarding Colstrip. And so I'm certainly more concerned about the federal election at this point.

Do you have an estimated cost for the investment in a baghouse for Colstrip?

There has been some initial analysis regarding the cost, but it is too soon to provide specific numbers. Historically, we have mentioned a cost of $500 million for two baghouses at Colstrip. We are still evaluating the ultimate costs, but it is early in the process, and that is our current estimate.

Okay. Awesome. Great. That's all I had. Thanks, guys.

Thanks, Dylan. All right. Our next question in the queue is from Anthony Crowdell at Mizuho.

Hi. Good afternoon. Can you guys hear me?

Yes, sure can.

Appreciate you taking the questions. I guess just maybe to the question on the baghouse that you guys talked about and then also on the interim rates, maybe it rolls together. I guess, what type of certainty would you need to see from the Montana Commission before you would embark on that large of a capital project with a baghouse?

I think and as part of our existing rate review, there's cost considerations around Colstrip. Obviously, that will give us a very good indication of their support for it. And so after we see that, we can talk more about it at that time.

It seems the Yankees won last night. To quote Yogi Berra, it's like déjà vu as I follow up on Charles' comments with the first question. In the last case, we were seeking retroactive rates, but that didn't materialize. Now, we are uncertain about interim rates, and we hope they will be implemented before the year-end. As the company looks ahead to possibly updating their capital plan, I recognize that you're 80% focused on Montana. However, I'm curious about the flexibility in your capital plan. Is there room to reduce capital spending in one state and increase it in another that may provide better support for the company's capital strategy?

Anthony, that's good questions. You had the last question on the last call, too. I'd say this. I think we're going to get a very good indication if the state wants to be energy independent. And if they want to be energy independent, the utility that provides electricity is 75% of the state, you better support that investment. And if you don't, that's not where we should be investing our dollars. We've had great support in our T&D investment. And if we're not getting strong signals from the commission to be investing in that space, they will be making the decision that our customers should be more exposed to the market, not NorthWestern Energy. So I think there's a crucial point in time for our customers and how the commission reacts to that is going to determine how much we're willing to invest in generation on a going forward basis.

Great. That's all I had. I appreciate it. And we'll see you in Hollywood.

All right. Go Dodgers.

Just kidding. I have no dog in that fight, Anthony. Okay.

Do you have a team? What's your team if you live up there?

My team's the Brewers. Baseball is dead to me right now. Okay.

Yes. I mean, I guess that's the closest team. No, the Twins are closer.

I grew up 70 miles from there, if you really need to know, Anthony. And I think we need to move on.

Great. Thanks for taking my questions.

Thanks, Anthony.

All right. With that, we have exhausted the queue, and I'll hand it back to Brian for any closing remarks.

I appreciate, obviously, great questions today. Certainly, concerns from investor standpoint in terms of outcomes from the Montana Commission. And again, reiterating the 80% investment we have there, I certainly have been with this company long term. I've seen the commission make great decisions for the benefit of customers. I look back to the hydro decision and I think what we would be doing today for our customers without those resources. And I think what we're trying to do is something similar with what we're doing in the Yellowstone County, Colstrip, and ultimately, whatever resource sometime in the future to replace Colstrip, we want to make those decisions. We want to be serving our customers. But you're right, we have to have the right signals from the commission in order to make those investments going forward. And we certainly appreciate your support today. Thank you.