Good afternoon, ladies and gentlemen. And welcome to the Emera Inc. Fourth Quarter 2024 and Annual Financial Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Dave Bezanson, Vice President, Investor Relations. Please go ahead.

Thank you, Jenny, and thank you all for joining us for this morning for Emera's fourth quarter 2024 conference call and live webcast. Emera's fourth quarter earnings release was distributed this afternoon via Newswire and the financial statements, management's discussion and analysis, and the presentation being referenced on this call are available on our website at emera.com. Joining me for this afternoon's call are Scott Balfour, Emera's President and Chief Executive Officer; Greg Blunden, Emera's Chief Financial Officer; and other members of Emera's management team. Before we begin, I’d like to remind you that this morning's discussion will include forward-looking information, which is subject to the cautionary statement contained in the supporting slide. Today's discussion and presentation will also include reference to non-GAAP financial measures. You should refer to the appendix for reconciliations of historical non-GAAP measures to the closest GAAP financial measure. And now, I will turn things over to Scott.

Thank you, Dave, and good morning, everyone. And you'll have to forgive me this morning, I am sporting the tail end of a cold, so voice isn't quite what it is, and I may have to take a break for a cough. This morning, we reported annual adjusted earnings per share of $2.94. This is in line with both our 2023 adjusted earnings per share of $2.96 and the benchmark for adjusted EPS growth guidance we shared last year. Our 2024 results were bolstered by a strong fourth quarter, where higher contributions from regulated utilities and lower corporate costs drove a 33% increase in quarterly adjusted earnings per share. Our portfolio of premium utilities, located predominantly in Florida, continues to show strong growth. Earnings contributions have been increasing as we continue to make rate-based investments to support the significant population and economic growth happening across our jurisdictions, as we continue to advance our reliability and resiliency efforts, and as we work to meet government-mandated decarbonization targets. Adjusted earnings contributions from our regulated utilities increased more than 24% quarter-over-quarter and 6% year-over-year, despite the impact of lost earnings from the sale of our equity interest in the Labrador Island Link. In 2024, it was a significant year of progress for Emera, and I'm proud of what we accomplished. We began the year with a strategic plan, focused on driving long-term value for our shareholders, to strengthen our balance sheet and credit ratings in order to reduce our cost of capital as we continue to pursue and invest in compelling growth opportunities across our portfolio. A key focus of this plan involved a disciplined asset sales process and an optimized approach to capital allocation, and we delivered. We achieved numerous milestones that advanced our plan. We began with a sale of our…

Thank you, Scott, and thank you all for joining us. This morning we reported fourth quarter adjusted earnings of $246 million and adjusted earnings per share of $0.84. This compares to $175 million in adjusted earnings per share of $0.63 in the fourth quarter of 2023. For the year, adjusted earnings increased 5% to $849 million from $809 million in 2023, and adjusted earnings per share were relatively in line with the prior year at $2.94, as compared to $2.96 in 2023. Before turning to the drivers of our financial results, I want to briefly walk through some of the adjustments to reported earnings this quarter, which were largely driven by the recently enacted Excessive Interest in Financing Expenses, or EIFEL legislation. The implementation of EIFEL drove a tax recovery related to a specific financing structure and its windup, and an incremental tax recovery associated with the sale of our equity interest in Labrador Island Link, both of which are nonrecurring in nature. Unrelated to EIFEL, during the quarter we discontinued the operations of Block Energy and as a result recognized some windup costs related to that process. While a net positive to earnings, we have excluded all of the above items from adjusted earnings to best present the ongoing operations of our business. Turning to cash flow or operating cash flow before changes in working capital was impacted by the storm cost deferral at Tampa Electric, as well as fuel deferrals at both Tampa Electric and Nova Scotia Power. At the end of 2024, Tampa Electric filed an application with the FASC for recovery of approximately $464 million in storm costs incurred primarily during Hurricanes Milton and Helene, as well as to replenish the storm reserve. Earlier this month, the FASC approved the recovery over a period of 18…

Thank you, Greg. As mentioned earlier, in 2024, we successfully executed on a strategic plan that strengthened our balance sheet and optimized our portfolio. We have a strong story, focused on quarter with some of the best assets in the North American utility sector, pivotal time in our industry to invest in growing demand, resilience, and efficiency. We're ready to meet this moment and are focused on executing on the robust growth opportunities across our portfolio to deliver for customers and shareholders alike. And now we'd like to open the call for questions.

[Operator Instructions] Your first question is from Robert Hope from Scotiabank.

Good morning, everyone. The first question is on Nova Scotia. The budget's out there. You have received some regulatory approvals there. You are looking to see the allowed or the earned ROE to be below the band in 2025. How do you think about measures or the path forward to get earned ROE in the band and when could we expect new rates?

Hi, Rob. It's Peter from Nova Scotia Power. Good morning. We know we do need to be on a path to rates, but we also know that we need to balance that with what our customers expect, which is reliable and affordable power. And so we'll continue to look for the right approach to this, but working with stakeholders, which includes the provincial government, to make sure that we do have that focus on reliability and affordability going forward. No, I just wanted to make sure that we didn't lose everybody in the line. My apologies.

Your next question is from Maurice Choy from RBC Capital Markets.

Thanks and good morning, everyone. I just wanted to come back to a comment you had in the prepared remarks, and apologies if I misheard this, but I think you mentioned that due to the FX tailwinds, you'd be disappointed if the 2025 growth does not exceed the implied 5% to 7% three-year CAGR. Assuming that's right, I just wanted to know if there are any headwinds that you may see or are watching out for. And just to be clear, when you make that comment, are you using the $2.94 EPS in 2024 as your base? Because obviously that includes the two tax benefits that [inaudible] incorporate.

Yes, Maurice, it's Scott again. So, yes, so we've really benchmarked against $2.96 was what we referenced in June, so our $2.94 for 2024 was in pretty tight to that, but continue to stick with our 5% to 7% guidance over through to the 2027 period. But yes, you heard correctly saying with the tailwinds that we're seeing, we'd expect 2025 to be stronger than 5% to 7% range. We'd be disappointed if we're not exceeding that 5% to 7% range. In terms of tailwinds, look, if FX goes the other way, if we have significantly unfavorable weather, it would be sort of the normal items that might impact things if there was a headwind. But right now, we're feeling pretty comfortable with the 5% to 7% guidance over the three year period, remain very comfortable with that and are encouraged at what we're seeing as it relates to our expectations for 2025.

Thanks for that clarification. And just to finish off, you mentioned that Florida may be an attractive location for data center development. Just curious within your five year plan last year, how much of any data center-related investments do you have baked in there? And if not much, any thoughts on what the size of this option could be?

Yes, Maurice, it's Greg. In our five year capital plan, we don't have anything related to capital investments to support data centers. Our sense is if we see something from a data center perspective, it'll be more modest compared to what you see in some jurisdictions, but it would certainly be helpful a couple of years out from a load perspective, but certainly wouldn't necessarily drive any capital investment.

Your next question is from Mark Jarvi from CIBC Capital Market.

Thanks. Good morning, everyone. I just wanted to dig into the June 23rd hearing for New Mexico gas approval. What would be the expectation on the timeline and the path and next steps beyond that for approval?

Yes, Mark, it's Greg. Yes, the schedule is starting to become clear, but irrespective of whether it goes through a fully litigated process in New Mexico or, like many, change of controls in the state that often get done through settlements, we still think it'll be probably towards the end of the third quarter before we have resolution. Both of those paths, the difference in timing would only be, I believe, a matter of weeks.

And so there's no settlement discussions are ongoing at this point now that we can table when it comes to the June hearings?

Settlement discussions are part of the process there, but even if there was a settlement, the commission would still have to hear that settlement and opine on it. And so that might shorten the process by a few weeks, but it would be weeks, not months.

Understood. And then I just want to dig into a couple of the outlook statements in the MD&A. One is that earnings for NSPI should be comparable to 2024. I'm just curious if that reflects the tax recovery that benefited the 2024 numbers, which I think your numbers are $160 million of adjusted earnings. And another one would be that you'll be sort of at the bottom end of the ROE band of Peoples Gas. Any risk to go below and then to stay at that level, is there sort of some plans on deferral of some OpEx or CapEx to manage the ROE this year?

Yes, so Mark, first on Nova Scotia Power, the short answer is yes. That includes our adjusted earnings for this year, and that's what we're referring to. And we say we expect it to be relatively consistent next year. On Peoples Gas, just the growth we're seeing in the rate and the capital investment we have to make, we don't really, there's not a lot of flexibility in that. We're investing this capital for the benefit of our customers and keeping pace with the customer growth that we're seeing. But we're pretty comfortable where we'll be from a range perspective. Obviously, again, weather can impact it a little bit. And the team down there, that's why they've had to file for rates and the full application will be made in March. And in the interim, we'll be doing everything they can to manage their cost profile, both from an operating capital perspective, to make sure we stay in our band in 2025.

Your next question is from Ben Pham from BMO Capital Markets.

Hi, good morning. I just want to touch base on the tax conversation. And I just want to clarify on the corporate expense side. It sounds like all the tax losses that you've had, your business already [inaudible] on a go forward basis, you get a benefit. Is there anything, any other moving parts outside of that?

That's effectively right. I think we've taken a prudent but conservative approach in the past to the extent that if we had corporate costs that are tax deductible, we haven't been recognizing the deferred tax asset on it because we didn't necessarily have the visibility on utilization of those. And with the changes with EIFEL, we will now be able to tax affect those items, as you would traditionally expect. So that'll provide a little bit of a tailwind going forward, probably to the tune of $2 million to $4 million a quarter, Ben.

Okay. Got it. And then also in that segment, with Block Energy, maybe just give us an update on what happened there. Is that just simply just taking the loss out of future years then on a year-over-year basis?

Really, Ben, just a provision to affect the wind down of that business. Well, we all along were optimistic about the technology and the opportunity within the market. The reality is that the external environment to Block Energy changed dramatically over the last 12 to 24 months, both as it relates to capital funding in that tech sector and, frankly, even as it relates to sort of the push around decarbonization in some markets and changing tax legislation. So we just made a very difficult decision against a business that we put a little bit of heart and soul into over the last few years and had some promise that its near-term viability was challenged. And our focus is on making sure that we're delivering on our earnings per share growth guidance and continuing to maximize returns and value for shareholders and had to make the difficult decision that we'd move on from that business, and therefore we took the provision in.

And, Ben, if I could add, so as you're well aware, it has been a bit of a drag on EPS over the last couple of years. And so obviously going forward, we won't have that same experience.

Okay, got it. And one last question on the credit rating side of things. You go through the conversations. You had the TEC rate case successful. And is it really just more of the agency getting some visibility on the New Mexico sale? That's a big triggering point for them on the decision?

I think that's probably the largest gating item for the last two agencies that haven't moved this back to stable yet, Ben. So we're very confident. We're not losing any sleep over whether or not New Mexico is going to close. We're very confident in that process. But I think a combination is we continue to print much stronger credit metrics every quarter on a trailing 12 months. I think that'll also be helpful. But, yes, we believe the work has been done. That's why you can detect my extreme confidence that we'll get to where we need to be in 2025.

Your next question is from Patrick Kenny from National Bank Financial.

Thank you. Good morning, everyone. Maybe just, Greg, on the FFO to debt ratio. Can you just clarify how you're normalizing for the mismatch in FX rates, just in terms of the debt at yearend, translated at $1.44, I believe, versus cash flows coming in at a lower rate? And then how are you thinking about that going forward with respect to the 100 basis point decline or, sorry, improvement in ratio?

Yes, well, we talk about the improvement and our expectations for 2025, Patrick. We're normalizing for FX that whatever the average rate is for the year that we're translating our cash flows, that should be done for the debt as well. There's nothing particularly unique about the FX rate at December 31st for debt. None of our debt matures on December 31st, obviously. That is one reconciling item that we're still working through with the agencies on 2025. Or, sorry, 2024. There's also the treatment of the fuel securitizations in Nova Scotia Powers, storm cost of Tampa. So there's a number of items in 2024 that we're still working through how the rating agencies are going to treat it. But as we look forward and those things are all normalized, we're assuming that FX doesn't have any impact on our credit metrics.

Okay. Thanks for that. And then, Scott, maybe you mentioned the evolving fluid situation with how the grids are evolving over time. And obviously a lot of opportunities ahead of you from different avenues. But given capital is somewhat finite here, could you perhaps just provide us with your prioritizing or ranking in terms of grid reliability, modernization versus decarbonization versus affordability type initiative?

Yes. So it's a good question, Pat. Thank you for that because it's one that has had a lot of discussion and debate. As I'm sure you know often referred to as the energy trilemma. How do you balance all three of those things? Investments required for reliability, investments required for decarbonization and keeping rates affordable for customers. And look, from a decarbonization perspective the reality is we really are just executing government policy on decarbonization. We're not driving investments specifically to decarbonize. We will make investments that are the most cost effective for customers while ensuring that we are meeting whatever climate policies are in place, either legislatively or by regulators. And so in terms of the priority, as you say, as we hear from our customers, the first priority would be reliability and a very close second would be affordability. And those are the two most important within that to the extent that we can make decarbonization investments that help with affordability, we will obviously do that and we'll also obviously make the decarbonization investments that we require to, in order to comply with government policy, which would largely be with Nova Scotia Power, where there'd be both federal and provincial requirements in terms of meeting decarbonization.

Okay, great. Thanks for that. Last housekeeping item, just any update on the timing for the dual listing on the NYSE?

Yes, we're still working through it, Patrick, but it'll be in the spring.

Thank you. There are no further questions at this time. I will now turn the call back to Dave for the closing remarks.

Thank you, Jeny. And thank you all of you for your interest in Emera. Please feel free to reach out to the US Relations team if you have any follow up questions. Thank you, all and have a great day.

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.