Northwest Natural Holding Co Q3 FY2024 earnings call

• Economy: Oregon gas utility service territory unemployment rate low at 4%, single-family housing permits up 13.1% in Portland metro area. Water service territories unemployment rates as low as 2.8%, six counties' single-family building permits up double-digit. Customer base grew 1.9% over last 12 months to over $875,000. • Rate cases: Completed Oregon gas utility rate case and three water and wastewater utility rate cases. Constructive orders in nearly all cases, including all-party settlements in Arizona water and wastewater utilities with new rates effective November 1, 2024. Oregon gas utility rate case revenue requirement increased $93.3 million, rate base increased $334 million to $2.1 billion. • Growth opportunities: Northwest Natural Water closed Puttman Infrastructure and ICH acquisition, entering recycled water business. Northwest Natural Renewables 2 landfill RNG facilities online, first project closed in September, second expected to close by end of year.

Natural gas distribution segment: In 2024, faced regulatory lag on investments and inflation pressures. Third quarter 2024 net loss was $27.2 million or $0.71 per share vs $23.7 million or $0.65 per share in 2023. First nine months 2024 net income was $33.9 million or $0.88 per share vs $49.2 million or $1.37 per share in 2023. Other businesses: Combined outside of primary segment. Third quarter 2024 other income and expenses net declined $4.6 million, but other businesses net income increased $2.8 million. First nine months 2024 other businesses had stable results. Gas utility: Utility margin stable from last year with $900,000 increase. O&M decreased $2.5 million but offset by higher payroll and IT costs. Depreciation and general taxes increased $8.1 million. Other income and expense net declined $12.6 million. Water and wastewater utilities: Six of nine counties' single-family building permits posted double-digit growth. Completed Puttman Infrastructure and ICH acquisition adding customers and entering recycled water business. Renewables: 2 landfill RNG facilities with EDL are online, first project closed in September, second expected to close by end of year. Revenue contribution % not explicitly stated in absolute terms but key segments detailed.

• 2024 GAAP earnings per share guidance in range of $1.94 to $2.14, adjusted earnings per share guidance in range of $2.20 to $2.40 excluding regulatory disallowance. • Target long-term earnings per share growth rate of 4% to 6%. • Modest equity and debt financing needs in 2025, equity issuances lower than 2024, expect $60 million at holding company and $75 million at gas company in next 12 months, part of gas company issuance covers $30 million maturity in 2025.

• Oregon gas utility rate case had disallowance of $13.7 million of rate base related to line extension allowances, resulting in $10.1 million after-tax noncash disallowance recognized in fourth quarter. • Regulatory policies, mechanisms or outcomes, laws, legislation or regulations could significantly impact earnings as guidance assumes no such significant changes. • Inflationary pressures and regulatory lag on investments could affect financial results.

Q: Elaborate on final order disallowance and margin excluding DNA component, and other deductions from revenue increase.

A: Good news was settling majority of rate case early, only two items not settled were government affairs expenses and line extension allowance. Depreciation and amortization increase is cash flow impact.

Q: Impression of 3 quarters recovery part.

A: Feel should have had all recovered, but take what can get.

Q: Thoughts on commission's stance on line extension allowance and adjusting going forward.

A: Disappointed, going forward need to be careful with costs, ensure tight to $1440 number.

Q: Thoughts on multiyear rate discussion in rate case.

A: Had laid out desire for multiyear rate case, still trying to interpret order, want more clarity, will work with commission to get multiyear rate cases approved.

Q: Color on other segment being strong in quarter and RNG contribution.

A: Other was stronger due to storage operations and water favorability, Ray to elaborate.

Q: Elevated CapEx next year.

A: This year had unique regulatory lag and inflation impacts, CapEx still strong in all segments, more details in February call, expect CapEx close to 2024 or a little lower in 2025.

Q: Outlook for continued acquisitions on water front.

A: Still seeing opportunities, fairly robust pipeline of smaller tuck-in acquisitions around existing service territories as service territories expand