Good morning, and welcome to the Emera Q1 2025 Earnings Conference Call. [Operator Instructions] Following the presentation, we will conduct a question-and-answer session. [Operator Instructions]. This call is being recorded on Thursday, May 8, 2025. I would now like to turn the conference over to Dave Bezanson, please go ahead.

Thank you, Mike, and thank you all for joining us this morning for Emera's First Quarter 2025 Conference Call and Live Webcast. Emera's first quarter earnings release was distributed this morning 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 morning'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 advise 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 references 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. This morning, we reported first quarter adjusted earnings per share of $1.28, representing a 68% increase over the same period in 2024. I'm proud to say this represents the strongest first quarter performance in the company's history and sets us up well -- sets us up to deliver well above our 5% to 7% earnings growth per share range in 2025. Our first quarter results were driven by robust performance across our regulated utilities. Tampa Electric and New Mexico Gas, both benefited from new rates that reflect the rate base investments they've been making in support of their customers. And Nova Scotia Power's results benefited from the colder weather we experienced here in Nova Scotia this winter. The results from our regulated utilities were further bolstered by a record quarter from Emera Energy. Cold weather in the Northeast resulted in higher pricing and market volatility, creating opportunities that the business was once again able to capitalize on to deliver exceptional results. Our performance this quarter is also, in many ways, a direct result of the actions we took in 2024, which provided the strong foundation of our execution this year. Last year, we successfully executed on our asset sale program, strengthened our balance sheet, adjusted our dividend growth guidance and finalized 2 important rate cases. These actions strengthened our company and positioned us well going into this year to translate our rate base growth into meaningful earnings per share and cash flow growth. You can see this reflected in our first quarter results, and we're confident that we will see strong performance for the year overall. We also remain confident in our 5% to 7% average earnings per share guidance through 2027. Teams across Emera have deployed over $700 million in customer-focused capital…

Thank you, Scott, and thank you all for joining us this morning. Turning to the details of our financial performance. This morning, we reported record first quarter adjusted earnings of $379 million and adjusted earnings per share of $1.28 compared to $216 million and $0.76 in 2024. The robust earnings growth from across the business translated into a meaningful 37% increase in operating cash flow when normalized for fuel and storm deferrals. As you'll recall, our 2024 cash flow was impacted by the USD 464 million storm deferral at Tampa Electric from the major storms we experienced last fall. Recovery of these costs began on March 1, and we will be collecting them over an 18-month period through August of 2026. And while the typical recovery period for storm costs in Florida is 12 months, we are recovering the cost over 18 months to prioritize affordability for customers by modestly extending the recovery period. This quarter's cash flow growth has delivered important progress towards our credit metric targets with an over 200 basis point improvement in key metrics since the first quarter of 2024, bringing us closer to our 12% target on a trailing 12-month basis. pro forma with the sale of New Mexico Gas, we are north of this target on the trailing 12-month basis, supporting our confidence in achieving targeted credit metrics at all rating agencies in 2025. We are pleased to see that S&P returned our outlook to stable in recognition of our successful efforts to delever and reflecting their confidence in our cash flow growth for 2025. And while we can't control the timing, we are confident that our actions to date and visible cash flow growth positions us well for Moody's and Fitch to also return our outlook to stable this year. Turning to the…

Against an uncertain macroeconomic environment, we remain strategically well positioned with our high-quality portfolio of regulated assets to deliver consistent, predictable performance. As always, we're focused on execution to safely deploy over $3 billion in customer-focused capital to prudently operate our utilities and look for cost-saving opportunities as well. With our strong foundation and expert team, our strategy will continue to allow us to deliver value for customers and shareholders. And now we'd like to open the call up for questions from our analysts.

[Operator Instructions] Your first question comes from the line of Rob Hope from Scotiabank.

Maybe just start off in New Mexico. Just going through all the stakeholder positions. Anything of note that you see out of the ordinary? And any key steps should we should be watching in the coming weeks and months.

Rob, look, I think we're into the -- well into the process now and every regulatory process involves stated positions from both sides. There's nothing that's unexpected from our perspective in terms of where we're at. Tiering coming up in June is the next milestone to pay attention to, and the team is focused on getting ready for that. And as I said on the call, we continue to expect a successful outcome from that process and closing in the fourth quarter.

All right. And then maybe moving over to Florida. Can you maybe add a little bit more color on kind of where conversations are regarding data centers for TECO, how the pace has gone and how they are kind of progressing versus expectations?

Archie would you like to address that, please?

Sure. Lots of -- I think what I would say is there's lots of discussions happening with data center developers. Nothing that has developed to a point yet that we are putting pen to paper on agreements. But we continue to feel optimistic, confident that the developers are going to see the merits of siting in the West Central Florida geography. In fact, we continue to take steps to enable data center development by shoring up the supply chain. The 2 CTs that Scott referenced are certainly in line with that. So we continue to be optimistic. I would say that recently, we have felt a bit of the chill coming over, I think the entire data center community because of interest rate uncertainty, tariff uncertainty, but things are still progressing in a good direction with all of the developers we're speaking with.

Your next question comes from the line of Maurice Choy from RBC Capital Markets.

I just want to come back to the discussion about tariff exposure. I appreciate the prepared remarks and tackling the head on. It sounds like a significant portion of your CapEx plan has been locked -- as the cost locked in. So I'm just curious if there's any other areas that you're spending a little bit more time focused on in terms of tariff exposure that you didn't touch on or any areas where you might have a little bit of a hard time passing a cost to customers.

Thanks for the question, Maurice. No, I wouldn't say our anxiety is very high at the moment. And of course, the team is working hard to address sort of tariff exposure, which is not that significant as you would have picked up from our calls. But in effort to continue to ensure we are managing affordability impacts for customers. It's, of course, at a high priority item for the team. I think the other aspect to tariffs is just supply chain constraints. It's disrupting supply chains and so managing supply chain processes and ensuring we've got good supply chain relationships and alternatives that would be sort of the other key area of focus for the team.

Maybe just focusing on Canada for a moment here. Last year, we saw quite a number of supportive actions done by various governments for NSPI. Now that we obviously have the Canadian government in place, and there's a lot of discussion about affordability. Just curious as to what you think might emerge here whether as far as provincial or federal level or an both together in terms of helping Nova Scotia and ahead of your potential rate case.

It's Peter Gregg from Scotia Power. Great question. Early days yet, obviously, with the Federal government. But I do think there's strong alignment between the economic development goals that the Houston government has here in Nova Scotia with what we're hearing are early goals of the Carney administration. I think certainly, Premier has been vocal about his desire to develop offshore wind resources that are quite strong in Nova Scotia. We do have a critical minerals strategy that is developing in Nova Scotia. That's a priority of Prime Minister Carney. So I think there's alignment and good potential opportunity there that we're going to stay close to. But again, saying it's obviously very early days.

And I'd just add encouraged by what would seem to be some momentum and thinking around East-West energy corridors that obviously is something of value and importance, I think, to Canada nationally, but particularly to Atlantic Canada as well. And so those kinds of things, I think, are encouraging. But as Peter said, it's still early days, of course.

Just on that note about East-West corridor, how do you envision this playing out? And what role, if any, do you think NSPI will play?

Yes, it's early. But you remember, we did a lot of work a few years back on what at that point called the Atlantic Loop. So there's been a lot of work done on that, that I think can be refreshed, it probably would not look the same as that is my expectation, but a lot of that thinking has been done. Obviously, our interest at the Nova Scotia Power side would be on the transmission investing in the transmission access of the East West grid. And if there is going to be development of offshore wind, what's the routing of that, we'd be interested in where that meets land in Nova Scotia, making sure we have the transmission aspects of that. So really, our interest from Nova Scotia Power would be on the transmission side.

Your next question comes from the line of Ross Fowler at Bank of America.

Just let me go back to Mexico for a minute. I mean -- the settlement window, correct me if I'm wrong, has expired, but could you still settle this before the June 23 hearing date? Would that kind of be a goal to get settled before hearing if that's possible?

Yes, Ross, I mean, look, I mean, the settlement can happen at any time, of course, the leader in the process that the settlement is, it has some risk of impact on schedule. But yes, the settlement can happen at any point in time. And it's a -- but the team remains focused on the upcoming hearing and putting its case in front of the regulator and demonstrating how in fact this transaction is beneficial for customers.

And then on the U.S. listing, you're still planning on that, within the context of, I guess, the spring, I guess we're still on spring, June 21 this summer. So wait for this -- but are we still on time for that.

Even though we're well into the season of spring, we continue to to guide that we expect this listing in New York in the spring of 2025.

Perfect. And then given the FX volatility we've seen in April -- are you thinking any difference in strategy around your hedging policy? Or how you look at hedging that going forward?

Ross, it's Gregg. No, at this point in time, the volatility we're experiencing is not uncommon for the Canadian dollar. And at this point in time, we have no plans to change our approach to hedging our U.S. dollar earnings.

Your next question comes from the line of Mark Jarvi from CIBC.

Maybe going back in New Mexico, just given some of the staff filings that want to see some more commitments from the buyer, would there be a need to amend the application before the hearing? Or do you just try to advocate between yourselves and the buyers on the conditions that have been established on original filing?

Yes. I don't think the intention is to amend the application, Mark. I wouldn't say that. But through the process, of course, we will respond, we will provide rebuttal effectively to the filings of the intervenors to respond to their concerns and that evidence will be part of the deliberations that the commission is -- we'll consider at the hearing.

Okay. Then turning to Florida, if you look through some of the statistics that were presented by NextEra FPL, in terms of customer growth, labor market, it seems like things have moderated in Florida -- are you seeing the same trends in your Tampa Electric territories or something a bit different between your areas? And I guess if economic growth population growth has moderated, is data center is really the only sort of upward driver of higher rate base growth potential in the next couple of years?

So let me start, and Archie can chime in. I think, obviously, we pay attention to sort of economic growth signals across all our portfolios. And I wouldn't say we've seen anything particularly notable in Florida, but it's certainly something that we're watching for. We're certainly not seeing growth accelerate in this environment, but I would say it's an environment probably in both Canada and the U.S. where because of the sort of the broader economic conditions, I think we and everyone are probably paying attention to what's happening in terms of growth drivers, underlying it. We still see the economy in Florida continuing to be strong. We've still seen strong customer growth in the first quarter, not really expecting any change to that, but it's certainly something we're paying attention to. Archie, anything that you'd want to add to that?

I agree with everything you just said, Scott. The only thing that I would add is, like our economic development team is as active as they've ever been, and the files that they're managing are not exclusively data center files. We have lots of companies looking to relocate to Florida. And there's -- you can sense there's a real movement around the -- like the onshoring. And so I think there's opportunities that might provide to us in West Central Florida as well.

Archie, has the mix in terms of growth coming from the residential, obviously, there was premigration trend for a while. Is it shifting more to the C&I type customers then?

Well, certainly, from an economic -- our economic development work is exclusively C&I residential customer migration into our service territory. As Scott said, first quarter was consistent with where it's been for the last number of years. But I think there is a bit of -- there is some concern from economists that there's -- at this 10 seconds, there's a people are being more thoughtful about decisions they make, given the economic uncertainty. But all things being equal in the U.S., Florida continues to be a preferred destination for folks to relocate to.

[Operator Instructions] Your next question comes from the line of Ben Pham from BMO.

First off, on Nova Scotia Power, you put a good quarter, ITCs weather conditions. I'm just wondering with that first quarter behind you. Like how does that reconcile with the ROE language in terms of being below that for the year?

Ben, it's Peter. Yes, our outlook for the balance of the year is still consistent with the language we put in there. It's earning just below the allowed rate of return band. So even with a good first quarter, we still think that is the appropriate guidance for the year.

Okay. Yes, just -- we're not going to provide specific guidance, but we had an ROE kind of mid, 8.5% range last year. And I think it's fair to say that we would expect it to be somewhat similar this year.

I got a few questions on New Mexico and the staff commentary DOJ and whatnot, we see how that plays out the next little bit. But can you compare -- I know the onus is on the buyer to approve the benefits of the proposed deal. But can you share from your perspective, just this application versus your application 10-plus years ago in terms of just really any big differences and how the approach is and also your own qualitative view on the commission makeup today versus the past? Is it more supportive than before? Or is it the same? .

Yes. Well, first of all, the constitution of the commission is different today and that now it is appointed where with our filing, it was elected. I'm not in a place to assess as to whether there's any difference in that. I'd say our experience with this commission right from the beginning has been very balanced outcomes. And our regulatory experience in New Mexico has reflected that, I think. And from our view, I think Bernhard Capital Partners, while they are a private equity owner, we obviously are not. They do operate a number of businesses. They are not sort of a traditional private equity type firm. They have their hands on and our experienced owners and operators of businesses, and they have investments in New Mexico and are very committed to delivering value for customers and also committed to proceed through the regulatory process, demonstrating benefit for customers, and that's what we expect will be evident through the rebuttal testimony that's filed and the hearing in June. Karen, anything that you want to add to that.

No, Scott, I think that's exactly right. We're working through the process. It is a net benefit test that we need to demonstrate in New Mexico, and we're all aware of that and aligned on that. So we continue to engage with all parties and work through the process, and we're confident that we're positioned to be able to achieve those expectations in terms of the regulatory requirements.

At this time, there are no further questions. I will return the call to Dave Bezanson for closing remarks.

Thank you, Michael. Thank you all for your interest in Emera. That concludes our call for today. Have a safe day.

Thank you. This now concludes our presentation. Thank you all for attending. You may now disconnect.