Third, I'll discuss the rationale for the sale of our Louisiana and Mississippi gas LDCs that, we announced this morning and provide an update, on our long-term capital investment plan. Finally, I'll conclude with an update, on where we stand, with respect to our regulatory calendar. I'm fortunate to step into this role, at a time when CenterPoint is undoubtedly, better positioned than it was, when we held our Analyst Day in 2021. In my time here, I've clearly articulated that, I believe we have one of the most tangible long-term growth plans in the industry. My focus will be continuing, our established track record, of consistently executing this plan and thoughtfully enhancing it, for the benefit of all of our stakeholders. At our 2021 Analyst Day, we put forth a premium value proposition, underpinned by our strategic objectives, which included, delivering consistent and sustainable non-GAAP EPS, and dividend per share growth to our investors, investing in customer-driven capital in our core regulated utility businesses, driving industry-leading rate-based growth, providing affordable service, to our customers through O&M discipline, and maintaining a strong balance sheet, while efficiently funding our capital investments.

I want to reiterate my commitment to these strategic objectives and discuss each in more detail. First, looking at delivering consistent and sustainable growth, for our stakeholders. Looking over the last three years, we have demonstrated that not only do we have a great plan in, which we have targeted 8% non-GAAP EPS growth each year, but we also have the ability to execute above expectations. This execution, resulted in us achieving, 9% non-GAAP EPS CAGR over that period, which is top decile in the sector. In addition to growing non-GAAP EPS, we also grew our dividend in line with earnings, leading to one of the highest dividend growth rates in the sector, over that same period of time. To expand on a point I made last quarter, I'm excited about the company's great future, as we continue to be laser-focused, on providing outstanding service, to our customers and communities, and executing consistently, to deliver enhanced stakeholder value.

We are collectively focused on, continuously improving service levels, while maintaining customer affordability, by utilizing a lean mindset throughout the organization. Now turning to investing in customer-driven capital, in our regulated businesses. Supporting our strong financial results, is a capital investment plan and resulting rate-based growth that, is among the highest in the sector. At our 2021 Analyst Day, we outlined a $40 billion plus capital investment plan that, translated to an approximately 9% rate-based growth, through 2030. Today, we're once again announcing a capital increase, supported by customer-driven capital investments to $44.5 billion, a nearly 11% increase since the 2021 Analyst Day. This revised capital investment plan, now supports a 10% rate-based growth CAGR, through 2030, which is again one of the highest in the industry.

This strong growth will continue to serve, as a solid foundation, for our long-term non-GAAP EPS growth targets. In addition to effectively executing on our capital plan, we also strive to provide affordable service to our customers. We continue to be mindful of the impact of our investments on our customer bills. For this reason, we remain focused on our target of reducing O&M 1% to 2% per year on average through 2030. Our relentless attention to this area has resulted in an average annual reduction of 2% over the last three years. The high end of our target range, despite reinvesting additional savings back into the business, for the benefit of our customers. One of the other targets we put forth in our 2021 Analyst Day, dovetails with our O&M reduction targets.

As we target our Net Zero goal for Scope 1 and Scope two emissions by 2035, we are retiring generation from less efficient fuel sources, which translates into a customer savings over the long-term. Finally, turning our focus on maintaining a strong balance sheet, and efficiently financing our customer-driven investments. At our 2021 Analyst Day, we targeted funding our 10-year capital investment plan, through 2030, without reliance on external equity issuances.10-year capital investment plan through 2030 without reliance on external equity issuances. We evolved that message last quarter, with the introduction of a modest ATM program, to support growth capital investment opportunities in 2024. And today, we're continuing that efficient financing evolution, with our strategic transaction we announced this morning.

The transaction, which I'll discuss in more detail, will be the fourth, we have pursued to recycle capital, and reinvest transaction proceeds back into our regulated operations, for the benefit of all stakeholders. In addition, as we have incremental financing needs outside of our growth capital investment plans, we're also extending the need, for $250 million per year of equity, or equity-like funding through 2030. Chris will provide further color, regarding our ongoing financing of our business. Moving to my second key topic, I'll briefly cover the fourth quarter and full year 2023 results. This morning, we announced non-GAAP EPS, of $0.32 for the quarter, and full year 2023, non-GAAP EPS, of $1.50. Again, these full year results translate to 9% non-GAAP EPS growth, from prior year actual results, for what is now the third consecutive year.

Most importantly, we have rebased our long-term growth targets off, these higher earnings levels each year. Consistent with this practice, we are reaffirming our 2024, non-GAAP EPS guidance range, of $1.61 to $1.63, which would equate, to an 8% growth rate at the midpoint, from our higher base of $1.50. Beyond 2024, we continue to expect to grow non-GAAP EPS, at the mid to high-end of the 6% to 8% range annually, through 2030, and continuing to grow dividends per share, in line with earnings growth. Chris will provide additional details, regarding our financial results, and earnings guidance later. Now I want to discuss, the sale of our Louisiana and Mississippi gas LDCs we announced this morning. We anticipate closing the sale in late first quarter of next year, and it is anticipated to result, in after-tax cash proceeds, of approximately $1 billion, which equates to an earnings multiple of approximately 32 times 2023 earnings.

This is a terrific outcome, for all stakeholders. Again, following the execution of this transaction, we will mark our fourth time, over the last few years in, which we have recycled transaction sales proceeds, to efficiently fund our industry-leading growth plan. Although the transaction is a great outcome, it is always hard to part, with a great team as well as great assets. Louisiana and Mississippi are incredible jurisdictions, and we have been privileged, to serve those communities over the years. I want to share color around the decision, to sell these gas LDCs, which was driven principally by three reasons. First, the sale of our Louisiana and Mississippi natural gas LDCs, will allow us to efficiently recycle, the roughly $1 billion in anticipated after-tax cash proceeds, to support our continued capital investment programs.

The valuation of about 32 times 2023 earnings, is approximately 75% more cost-effective, than issue in our own common stock, to support our industry-leading rate-based growth, and to maintain the strength of our balance sheet. The valuation also illustrates that, even in a much different cost of capital environment, than our last LDC sale, there continues to be a strong market demand for gas LDCs, particularly for those in high-growth and constructive jurisdictions. Second, we anticipate that the sale of these gas LDCs, will allow us to reprioritize approximately $1 billion, of capital expenditures, to support other jurisdictions. The added benefit of this reallocation of $1 billion of capital investment, is that we expect that we will be able to deploy much of it, in jurisdictions with less regulatory lag, therefore enhancing, the ongoing earnings power of the company.

Third, as we work to optimize our portfolio, it made sense for us to focus our time and resources, in jurisdictions where we have both gas and electric service, or where we have a larger presence. This transaction will help support our non-GAAP annual EPS growth target, of 8% in 2024, and at the mid to high-end, of our 6% to 8% non-GAAP EPS growth range, through 2030, while also helping maintain the strength of our balance sheet. Now shifting to how this transaction fits within the broader context of our now $44.5 billion capital investment plan. Today, we're announcing that once again, we have positively revised our capital investment plan, by an increase of $600 million to $44.5 billion, through 2030. $100 million of this increase was already deployed in the fourth quarter of this year, which brought the total capital investments in 2023, to $4.3 billion for the benefit of our customers.

This represents a nearly 20% increase over the $3.6 billion we originally guided to at the beginning of 2023. We made the decision, to increase the amount of planned work, on our systems principally related to critical investments, to improve resiliency and reliability in our Houston Electric Service Territory. We did this knowing, we would be able to efficiently fund these investments, once the announced sale of our Louisiana and Mississippi gas LDCs closed. The added benefit of this increased capital spend, is that it will also help offset the loss of approximately $800 million of rate base that, we have invested in those states today. Today's capital increase, will be focused on investments in system resiliency at Houston Electric, in response to the resiliency bill that was enacted in 2023, by the Texas Legislature, as well as targeted investments in our gas businesses.

These resiliency investments at Houston Electric will support the prioritizing of operational programs that modernize, harden, and enhance the resiliency and reliability, of our transmission and distribution system, such as asset hardening, distribution automation devices, and substation flood mitigation. We look forward to filing our multi-year resiliency plan, likely early in the second quarter of this year, and sharing further details, on our next earnings call. Before I move on from this capital investment conversation, I want to make a few comments, around our modest pivot, and our long-term financing plans moving forward, which Chris will cover in more detail momentarily. In addition to the efficient recycling, of strategic transaction proceeds I described earlier, we are also planning, to incorporate approximately $250 million of annual equity, or equity-like funding needs, into our long-term financing plans moving forward.

This is to allow us to continue to fund our growing capital plans, maintain the strength of our balance sheet, and address incremental annual cash needs that, Chris will describe shortly. Lastly, before turning it over to Chris, I want to provide some color on our rate cases, and put into context what, is a relatively busy regulatory calendar. I think it's important to remember the place where we start from. That although greater than 80%, of total enterprise rate base, is located in jurisdictions, where we are anticipated to have rate cases in the next 12 months, we are uniquely positioned, and that most of these investments, have already been through some regulatory review. As we've stated previously, over 80% of our capital expenditures, are recovered through interim trackers, and as such are already in rates.

This is a key differentiator from rate cases in other jurisdictions. Now turning to our largest jurisdiction, Houston Electric. On our previous call, we indicated that, we had requested an extension to file our Houston Electric rate case, from March 9 to the second quarter of this year. However, in the January PUCT open meeting, the Commission decided to stay with the original March 9, 2024 deadline, as ordered in the last rate case. While we preferred the extended filing date, that was supported by all parties in the case, we will be prepared to file the case in early March and anticipate a relatively flat revenue requirement increase. At the same January open meeting, the PUCT finalized its rulemaking for House Bill 2555, better known as the Resiliency Bill.

As you may recall from our previous earnings call, the Resiliency Bill allows Texas TDUs, to file a multi-year resiliency plan that would allow, for the recovery of certain costs, through riders or regulatory assets. For Houston Electric, these investments are expected to include investments in upgrading distribution lines, building new and upgrading older substations, and upgrading our transmission system. These upgrades should help support fewer and shorter unplanned outages, faster restoration response time, and greater accuracy, with respect to our restoration times. Additionally, the rulemaking in its final form allows, for deferral of certain costs, such as depreciation and a return on our cost of capital, associated with distribution investments and resiliency, between the time the assets are placed in service, and when rates are updated for those investments.

This final rule, is beneficial in reducing regulatory lag, on these critical investments. We initially indicated that we would make our filing, towards the end of the first quarter. However, as the final rulemaking was slightly delayed, our filing will likely be submitted, early in the second quarter. Now I'll highlight, our three recently filed rate cases. In our other electric jurisdiction in Indiana, we filed a rate case in the first week of December, with a requested revenue requirement increase of approximately $119 million distributed over the next three years. Much of this requested revenue requirement increase, is associated with our investments in connection, with a generation transition plan, as we move away from coal to a more efficient and cost-effective fuel types such as renewables and natural gas.

As a reminder, we plan to fully exit operating coal generation by the end of 2027. These investments are a continuation of our prudent investing in Indiana as we strive to also keep customer bills affordable. In fact, since rates went into effect from our last rate case in 2009, customer charges have increased at a compounded annual growth rate of 0.5%, well below our peers in the state, which range between 1.7% and 4.7% over that same period of time. Absent a settlement, we expect a final decision in this case in Q4 of this year. Moving on to Texas Gas. We filed our Texas Gas rate case towards the end of October with a requested revenue requirement increase of approximately $37 million. As a reminder, we combined all four of our Texas jurisdictions into a single rate case filing.

This combined filing should not only result in a reduced number of filings on a go-forward basis. But in the near term, it should also result in declining bills from many of our customers, specifically those located in more rural areas. We have a third settlement conference later this month, and we look forward to continuing to work towards a constructive resolution of this case. Absent the settlement, we expect a final decision in the middle of the year. Finally, turning to our Minnesota gas business. We filed our rate case on November 1 with the requested revenue increases of approximately $85 million and $52 million for 2024 and 2025, respectively. Interim rates for 2024 were approved in mid-December and went into effect on January 1. The commission will consider interim rates for 2025 towards the end of this year if we have not settled the case before then.

This is the first time we have filed a multiyear rate case in Minnesota with the goal of providing smoother revenue increases for the benefit of our customers in the future. The majority of the requested revenue requirement increase could be attributed to the fundamental safety programs we operate as well as some of the projects which we filed for under the Natural Gas Innovation Act. Lastly, I want to mention that we have one other rate case we will be filing in 2024 in our Ohio Gas business. We anticipate filing this rate case midyear, and we'll provide more details as we get closer to the filing. We look forward to working with all of our stakeholders to reach constructive resolutions to all of our rate cases. We believe we are well positioned in all of our cases as we've made prudent investments for our customers and we've made concerted efforts to reduce controllable O&M for the benefit of our customers.

I realize that is a lot of information. But given the relevance of the rate cases to all stakeholder groups and our intense focus on successfully executing this activity, I believe it's important to cover it and some depth with you. Those are all of my updates for now with a strong foundation of a simple, focused plan to drive value for all stakeholders. 2023 was another great year here at CenterPoint as we continue a long track record of consistent execution. I am confident in our path forward as we reaffirm our commitment to our proven strategy into our long-term non-GAAP EPS growth guidance target of 8% in 2024 and at the mid- to high end of our 6% to 8% non-GAAP EPS guidance for 2025 through 2030. I want to thank all of our employees, but especially those on the front lines as they worked hard to provide service to our customers even as we faced a historically hot summer in our Houston Electric service territory, damaging severe storms in Indiana and extreme cold throughout our service territories this winter.

2024 will no doubt bring its own unique challenges, but I am confident we have the right team in place here to manage through them. With that, I'll hand it over to Chris for his financial update.

Chris Foster: Thanks, Jason. I want to echo Jason's sentiments regarding the team's performance this year, seeing them go above and beyond to deliver for our customers, even in some of the most challenging situations. Their dedication and focus have certainly contributed to our delivery of financial results and operational performance outcomes that improve the customer experience. Today, I'll cover four areas of focus. First, the details of our fourth quarter and annual results. Second, I'll provide additional color around our thoughts regarding the sale of our Louisiana and Mississippi LDCs. Third, an update regarding our positively revised capital plan. And lastly, an update of where we stand with our balance sheet and credit metrics.

Let's start with the financial results on Slide 8. As Jason highlighted earlier, Q4 and full year 2023 with another strong year of financial performance here at CenterPoint. On a GAAP EPS basis, we reported $0.30 for the fourth quarter of 2023. As previously noted, our non-GAAP EPS results for the fourth quarter removed the results of our net invested nonregulated business, Energy Systems Group. On a non-GAAP basis, we reported $0.32 for the fourth quarter of 2023 and compared to $0.28 in the fourth quarter of 2022. With this latest quarter of strong financial performance, we are right at the midpoint of our upperly revised non-GAAP EPS guidance target range of $1.50 for the year. Taking a closer look at the quarter, growth and rate recovery contributed $0.05, which was driven by the ongoing recovery from various interim mechanisms for which customer rates were updated earlier in the year such as the transmission tracker or TCOS at Houston Electric, the DCRF, for which rates were updated in September and the Texas Gas Grips.

In addition, we continue to see strong organic growth in the Houston area, extending the long-term trend of 1% to 2% average annual customer growth, which continues to benefit both customers and investors. Weather and usage were $0.01 unfavorable when compared to the same quarter of 2022, primarily driven by the milder winter weather experienced in both our Houston Electric and Indiana Electric service territories. O&M was $0.01 unfavorable for the fourth quarter and $0.01 favorable for the full year 2023. The Q4 figure was primarily due to the increase in vegetation management, which began in Q3 and continued into Q4. We saw these expenditures as prudent given the heightened recent drought conditions and other targeted gas and electric projects that should help us improve safety and reliability for our customers.

However, even in light of pulling forward O&M, we were still able to achieve a net annual savings. Lastly, I want to touch on a favorable onetime item related to an income tax benefit, which was recorded in the fourth quarter, which constitutes the majority of our other favorable drivers. Due to the number of divestitures over the last few years, our state income tax footprint has changed. This change in footprint has resulted in a reduced blended state income tax rate, and we now anticipate paying fewer state income to cash taxes on a go-forward basis. Under GAAP, this reduced blended tax rate necessitated the remeasurement of our deferred taxes, which resulted in the onetime income tax benefit. Additionally, the onetime earnings benefit represents future cash tax savings that will provide an additional source of future incremental cash flow to be invested back into our regulated businesses for the benefit of customers.

Closing out the earnings drivers for the quarter, favorability from rate recovery and the income tax benefit was partially offset by a $0.05 increase in interest expense. The primary driver of this was the approximately $6 billion in debt issuances since Q4 of last year with higher coupon rates. However, the impact of this increase was partially offset by the redemption of the $800 million Series A preferred that occurred in September, which eliminated the approximately $12 million quarterly dividend. I'll discuss our long-term financing plan and balance sheet in greater detail shortly. Informing our plan was the transaction we announced this morning related to the sale of our Louisiana and Mississippi natural gas LDCs. I'd like to take a bit of time to talk about our thinking here.

We were focused on both efficient capital redeployment and investing thoughtfully to eliminate direct earnings implications from the loss on rate base. As you heard Jason mentioned earlier, we have signed an agreement to sell these quality LDCs, which is anticipated to result in after-tax cash proceeds of approximately $1 billion. This represents an earnings multiple of nearly 32x based on 2023 earnings. This is a tremendous outcome even when compared to the multiple at which trade today and one that demonstrates the continued market demand for gas LDCs. We assume the closing of this transaction will occur towards the end of the first quarter in 2025. These cash proceeds are expected to provide greater financing flexibility and efficiencies for our capital investments for both our gas and electric businesses throughout the remainder of the capital plan.

I want to be clear that we do not see a change in our earnings guidance nor are we making a downward revision to our capital investment targets through 2030 as a result of this transaction. In fact, as I'll touch on more in a moment, we are increasing our 10-year capital plan target by $600 million in aggregate despite serving two fewer jurisdictions going forward. This brings our total capital target to $44.5 billion through 2030. Following on Jason's remarks, in 2023 alone, we invested $700 million above what we guided to at the beginning of the year. Much of this spend helped to backfill the rate base that would be lost in this transaction. This allowed us to make much-needed investments in ongoing projects in resiliency and reliability.

And although we recognize this temporarily increased our reliance on the balance sheet in the interim, our investment also helped to synchronize capital deployment to prepare for this transaction. This spend supports a consistent ongoing commitment to and confidence in our earnings profile with no interruption expected to our long-term earnings targets. Moving on to capital investments. I'll now focus a bit on our capital execution in 2023 and the increase in our 10-year capital plan target shown here on Slide 9. The fourth quarter of 2023 represented yet another quarter of sound capital investment execution by the team here as we invested $900 million for the benefit of our customers and communities bringing our 2023 capital deployment total to $4.3 billion.

Given the broader economic impacts our customers are experiencing, we continue to be focused on affordability from both an O&M and an ongoing targeted capital perspective. Even with the incremental capital investment, we continue to estimate our growth in customer delivery charges at Houston Electric to be equal to or less than the historic inflation rate of 2% through 2030. We have confidence in our ability to achieve this. Given the size of the Houston Electric customer base and its tremendous organic growth, securitization charges that are rolling off the bill later this year and our plan to reduce O&M as I referenced. Reducing O&M will continue to be a focus while we execute our core work plan to meet our customers' needs. As we look over the last three years, even with the opportunity to complete more maintenance work on the system, we have successfully reduced O&M at about 2% per year on average over that period, which is the high end of our target.

And we are just getting started on using lean as a methodology throughout the organization, which we expect to help us continue to reduce O&M and enhance the effectiveness of the capital we deploy. But even in its early stages, we are already seeing results. One recent example that comes to mind comes from our electric business. Through a review of recent reliability outcomes and the associated processes, we identified an internal standard that generated multiple truck rolls to the same location for the same issue. This had nothing to do with the issue not being addressed and fixed after the first visit, but was an internal standard that was resulting in multiple truck rolls. The team is now implementing a modified standard that gives our frontline crews the ability to assess and address the work, mitigating additional truck rolls and providing a better customer experience.

This is just a small but meaningful example of improving customer outcomes while also being more efficient in our O&M activities. We certainly appreciate the focus of our teams on the customer and doing the right work while also eliminating the rework along the way. Here on Slide 13, you can see the cumulative effect. This illustrates a rare attribute in our sector. The charges associated with the work we deliver on our customers' bills has stayed essentially flat over the last 10 years. We are proud and fortunate to serve a thriving community where we seek to thoughtfully invest in key infrastructure doing our part to enable the economic development of our region. As we look further out into the plan, I want to provide some additional insight into and address our evolving tax profile, to how we're thinking about the financing of our plan.

First, the sale of our Louisiana and Mississippi LDCs is expected to provide greater financing flexibility over the course of our plan as we look to deploy those proceeds as well as reallocate the capital previously associated with those businesses. We are also now assuming moderate pressure coming from evolving tax policy. In particular, this relates to the alternative minimum tax, or AMT, unlike many others in the sector, CenterPoint has historically been a cash taxpayer. On a prospective basis, given the current guidance, we now assume that our base case is that we are subject to AMT. However, as we look to the future, we anticipate a cash tax liability that will be partially offset by the credit generated from paying AMT, allowing us to monetize these payments.

We expect this cash tax liability will largely be driven by our income tax liability generated from operations and the tax liability associated with the maturity of our ZENS instrument that matures in 2029. I would think of this as simply prepaying cash tax liabilities associated with our ZENS instrument. With respect to funding incremental capital, our funding strategy introduced last quarter remains unchanged. As we continue to identify and execute incremental capital, equity or equity-like funding would be required, and I'll reiterate that you should assume this equity funding should be in line with our consolidated capital structure. So as we look to fund the incremental $600 million announced today, of which $100 million was already deployed in 2023.

That would imply that we expect to issue approximately $250 million of equity under our ATM program in 2025 in addition to the $250 million we plan to issue in 2024. To add color to what Jason touched on in his remarks, on a go-forward basis, we anticipate that these modest issuances of roughly $250 million will be programmatic through 2030 as we continue to fund what we anticipate will be expanding capital needs and satisfy our near-term minimum tax obligations. We will be in a better position to provide additional color around our future capital plan and the corresponding financing plan as we get to the other side of our rate case filings. Finally, to highlight the balance sheet and credit strength. As of the end of the year, calculated FFO to debt was 14% delivering the cushion we continue to emphasize.

For two reasons I'll touch on, we may be in a transitory period for a few quarters, but continue to target FFO to debt through 2030 at our target range of 100 to 150 basis points of cushion to our downgrade threshold of 13%. We are continuing to carry over $400 million of debt at the parent, which was issued to fund our higher equity layer at both Houston Electric and Texas Gas. We believe these are the proper capitalization of these businesses, and we've reflected this in our Texas Gas rate case filing, and we'll do so as well in the CD rate case that we file here in the next few weeks. Additionally, as both Jason and I touched upon we performed much more work in 2023 than we had originally anticipated as we made much needed investments in resiliency and reliability, especially at Houston Electric.

The combination of cap structure positioning and the incremental investments is temporarily elevating our debt on the balance sheet, which we felt comfortable with as we anticipate cash coming in the door from the sale of our Louisiana and Mississippi LDCs and the recovery of those investments. An area in which we've seen improvement is the continued reduction of our exposure to floating rate debt. We reduced floating rate debt to approximately $1.9 billion in 2023, which represents close to a nearly 60% reduction when compared to 2022. This includes the floating rate note of $350 million at 5.99%, which matures soon. We remain focused on maintaining a strong balance sheet throughout this interest rate environment. We believe we have built in conservatism into our long-term plan and today shows another step in progressing that plan for customers, investors.

Today's announcement and capital allocation focuses on planning for the long term into jurisdictions with solidly improving regulatory recovery and shared large growing customer bases. This only serves to strengthen an already great plan and execute even in the face of continued headwinds for the benefit of customers and investors. With three consecutive years of 9% growth behind us, we continue to reaffirm our non-GAAP EPS target of 8% this year and the mid- to high end of 6% to 8% thereafter through 2030. And with that, I'll now turn the call back over to Jason.

Jason Wells: Thank you, Chris. I look forward to leading this company for many years to come in executing what I believe to be one of the best, most tangible long-term growth plans in the industry. I am confident in our team and the organization's continued improvement to enhance an already strong track record of delivering for all of our stakeholders.

Jackie Richert: Great. Thank you, Jason. Operator, we're now prepared to take Q&A.

See also 13 High Growth Penny Stocks That Are Profitable and 15 Cleanest Countries in Europe.

To continue reading the Q&A session, please click here.