Q3 2019 Earnings Call
Welcome to the southwest gas Holdings 2018 third quarter earnings Conference call.
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A finance and Treasurer Kenny please begin.
Thank you Dimitris welcome to southwest gas Holdings, Inc. 2019 third quarter earnings Conference call. As Dimitris stated my name is Kent County, and I'm, The Vice President Finance Treasury.
Congress Cosby broadcast live over the Internet, but those are you would like to access the webcast. Please visit our website at www Dot that's W.G.A.
Hmm L.D. I Ngs dot com, otherwise www dot so that's w. gaskell these dotcom and click on the conference calls we.
We have slides on the internet, which can be accessed to follow our presentation. Today, we have mr., John P., Hester, President and Chief Executive Officer, Mr., Gregory Jay Peterson Senior Vice President.
Chief Financial Officer, Mr., Justin L. Brown, Senior Vice President General Counsel Southwest Gas Corporation and other members of senior management to provide a brief overview of the company's operation earnings ended Septemberthirty 2019 to address earnings per share guidance for 2019.
Also the company will discuss certain factors that may impact is coming years earnings.
Further our lawyers have asked me to remind you that some of the information that will be discussed contains forward looking statements.
These statements are based on managements assumptions, which may or may not come true and should refer to the language on slide three and crush release and also our FCC filings for a description of factors that may cause actual results to differ from our forward looking statements.
All forward looking statements are made.
Today.
And we assume no obligation to update any such statements.
With that said I'd like to turn time over to John .
Thanks, Ken turning to slide four we show some of our 2019 highlights from a consolidated perspective, we saw earnings for sure Tencent [laughter] border. We realized record 12 month revenues of $3.1 billion, we completed a reincorporation selfless got sold into.
And at the Delaware.
And we're modifying or 2019 earnings per share guidance from the previously announced range of $3.75 $4 to a new range of $3.60 to $3 a.
So the natural gas segment, we continue to experience strong customer growth.
Again 34000 customers over the past year for annualized growth rate of 1.7 for but.
We also submitted the new California rate case application.
Requesting a revenue increased $12.8 million and we recently, so standard and poor's upgrade or utility credit rating to any money.
And at our century utility infrastructure services segment, we saw record quarterly rather than $515 million, including a strong performance from our license services group, which contributed $70 million centuries, net income for the past year totaled $46.7 million.
Moving to slide five shown outline for today's call first Greg Peterson will provide an overview of our financial results with segment detail natural gas operations until the infrastructure services.
Justin Brown will provide a regulatory update including detail on a three current rig.
And I will wrap up our presentation with an update on customer growth and regional economic conditions.
Capital expenditures and our expectations for the rest of 2019 beyond.
Well now turn call over to Greg.
Thank you John our earnings press release, some quarterly report on Form 10-Q were made available yesterday afternoon.
No I invite you to read those documents for additional details of our third quarter operating results and outlook for 2019.
For todays call, let me start with a summary of total company operating results on slide six.
For the 12 months ended September Thirtyth 2019, net income was 191 of the half million dollars.
Or $3.59 per diluted share compared to net income in the prior year period of $209.4 million were for 29 per diluted share.
The 2018 period included a one time tax reform benefit of approximately $20 million of 41 cents per share.
For the third quarter 2019, consolidated net income was 5.4 million versus 12.3 million for the prior year.
Third quarter EPS declined from 25 cents in 2018 to 10 cents and 29.
Some of the major items impacting third quarter 20, Nike results reflected on slide seven.
[noise] natural gas operations currently reflects the off the cost of substantial investments we have made in our system to ensure safe and reliable service to our customers.
These long term investments also ultimately benefit shareholders or as a bounce are included in the calculation of customer rates and company revenues.
In February 2019, southwest requested an aggregate $12.7 million surcharge increase effective June 2019, as part of its annual filings for vintage steel pipe or P.S.P. and customer owned yard line or coil programs.
In October the Arizona Corporation Commission issued an order to consolidate consideration of the P.S.P.M. coil requests into the Arizona General rate case.
A decision in the general rate cases, not expected until the first half of 2020.
Adversely impacted third quarter operating results and cash flows by delaying recovery a portion of the aggregate $12.7 million request.
Centuries quarterly performance was negatively impacted by implementation of new regulatory requirements within certain eastern states in the U.S.
Resulting in production inefficiencies and revenue reductions totaling an estimated $4 million.
Extra efforts to complete and delays and commissioning and industrial construction project in Canada resulted in approximately $2 million of additional costs.
Additionally, changes in the mix of work requested in 2019 by certain customers resulted in higher labor and equipment costs compared to the work originally anticipated.
These negative impacts primarily occurred in the early part of third quarters operations and are not expected to substantially influence future results.
I'll now provide some highlights of comparative results by segment, beginning with quarterly natural gas operations on slide eight.
This waterfall chart shows the components of the 6.3 million dollar decrease in natural gas operations results between quarters.
Due to the seasonality of our business utility losses during the third quarter or expected.
The 7.3 million dollar increase in operating margin includes $2 million from customer growth as 34000 net new customers were added over the past 12 months.
On a combined $2 million from California, attrition and the that rate relief.
Hi, regulatory surcharges of miscellaneous revenues accounted for the remainder of margin increase.
Oh in M. expenses between quarters were up 4% or $4.4 million about half of which was related to higher legal costs.
The 4.7 million dollar increase in depreciation amortization and general taxes reflects the impacts of a 602 million dollar or 9% increase in gas plant surface.
The 2.2 million dollar decrease in other income reflects lower increases in the cash surrender value. The company owned life insurance or coli policies this quarter $200000 versus last year $4.7 million.
Partially offsetting the coli impact was at 1.5 million dollar reduction in on surface pension related costs.
Lastly, the $3.2 million uptick in interest expense reflects higher debt outstanding including $300 million a senior notes issued in May this year to facilitate southwest robust capital expenditures program.
Turning to slide nine we see the quarterly changes for century, our utility infrastructure services segment.
The increases in revenues and expenses.
As well as depreciation and amortization were primarily due to the operations of line Tech, which we acquired in November 2018.
Southeast based electric utility infrastructure services company contributed approximately $3.7 million toward centuries $25.8 million of net income for the quarter.
As discussed earlier, the current quarter was adversely impacted by approximately $6 million due to new regulatory requirements and that Canadian industrial project.
Additionally mix of work changes were experience with several utility customers.
As John previously mentioned century recognized a record $515 million of revenues for the quarter.
Well next next will transition to review of 12 month activities for beginning on slide 10.
Slide 10 depicts the relative contributions were two business segments. During the 12 months ended September Thirtyth 2019.
As you can see natural gas operations provided about three fourths of our consolidated net income.
I'll centuries utility infrastructure services group provided about one for.
Let's move to slide 11, and look at each segment's impacts the consolidated change between 12 month period.
Slide 11 depicts the components of a 17.9 million dollar decline and consolidated earnings between 12 month period.
I should note that the results for the 12 months ended September Thirtyth 2018 included approximately $20 million of onetime tax benefits recognized in connection with the enactment of tax reform in December 2017.
I'll provide additional details on each segment's performance in the next couple slides.
Slide 12 depicts the components of the changes the natural gas operations results between 12 month period.
The 24.8 million dollar improvement in operating margin includes $11 million from continuing customer growth and 9 million in combined rate relief in Nevada and California.
Miscellaneous revenues and higher surcharges associated with recoveries of regulatory assets were partially offset by the regulatory impacts of U.S. tax reform, primarily a related 4.7 million dollar onetime reduction to margin tracker recoveries ordered by the Arizona Corporation.
And commission in the first quarter of this year.
The 7.8 million dollar or 2% increase to know Nm reflects general cost increases as well as $2.4 million of incremental damaged prevention or call before you dig costs associated with utility in general construction activities throughout our service territories.
The 13.8 million dollar increase in depreciation amortization and general taxes reflects the impact of a 550 million or 8% increase in average gas plant in service.
The 1.2 million dollar increase in other income includes four and a half million dollar increase in the equity component of the FCC, if you DC or allowance for funds used during construction.
And $1.4 million and additional interest income.
Non surface pension costs declined approximately $4 million between periods.
Coli cash surrender value income was 2 million in the current period versus 9.5 million in the prior year, a decline of seven a half million dollars.
The 14.1 million dollar increase in interest expense is due to higher outstanding balances on southwest credit facility as well as debt issuances of 300 million in March of 2018, and 300 million in May of 2019, as we continue to finance capital expenditures to expand and fortify or distribute.
System.
Next I'll discuss the components of the 12 month change and our utility infrastructure services segment, beginning on slide 13.
This slide shows the components of the 11 million dollar decrease in century net income between 12 months periods as I previously mentioned in the prior period included a 12 million dollar onetime tax benefit recognized in connection with enactment of tax reform in December 2017.
Our acquisition of line Tech in November 2018 provided significant benefits the centuries results accounting for approximately $9 million of net income.
Overall revenues increased 219 million, including $189 million new revenues from line Tech.
Utility infrastructure revenues also benefited from some non routine projects.
Putting customer requested support during strike related and emergency response situations in the latter part of 28.
Infrastructure services expenses were $185 million higher than the prior year period, primarily due to nearly 150 million for line Tech operations.
Depreciation and amortization increased 27 million, including 22 million from the line Tech acquisition at operation.
The other category primarily reflects the portion of centuries net income attributable to the non controlling interest in line Tech.
Slide 14 depicts the investment grade ratings currently assigned by the three major credit rating agencies.
The company periodically meets with these agencies to provide updates on the company's overall and individual segment operations.
As noted on the slide on October Thirtyth, 2019 standard and Poor's upgraded the rating for the utility operations to a minus from Triple B plus.
I'll now turn the call over to adjusted Brown for regulatory update.
Thanks, Greg.
We have a significant number of meaningful regulatory initiatives currently going on.
Namely rate case related proceedings in each of our regulatory jurisdictions as well as several other initiatives that will continue to provide an opportunity for us to invest in our distribution system certain needs of our customers.
Let's start on slide 16, with our Arizona General rate case.
Our application requested an increase in revenues of 57 million, including a proposed return on equity of 10.3%.
There were two primary driver for this case to number one to fully reflect the impact of tax reform and base rate and second to update rate base to reflect the nearly 700 million that has been invested in Arizona since our last rate case.
With respect to tax reform the proposed $57 million increase in revenues is net of any offset from tax reform, we proposed to amortize the excess deferred income tax down consistent with the IRS prescribed methodology and at the time of filing we anticipated this amount to be approximately $21 million. However, since the fall.
Filing we finalized our 2018 tax return and we were able to determine the actual amortization amount, which ended up being about $15 million less than what we originally estimated.
This difference will result in an increase in both margin and federal income tax expense and we'll just have no impact on earnings.
We also made a recent filing and the rate case to supplement the requested post test year plant increased by approximately $125 million.
Which I will discuss in more detail later in my comments will not provide an update on the status of our Arizona tracker program.
The Commission issued an order in June establishing a schedule, where intervenor testimony will be do around the first of December a hearing in February and hopefully decision by the second quarter 2020. However, just this week the commission scheduled another procedural conference for November 14 to entertain recent proposals from several.
Intervener to claim they need additional time due to our recent supplemental filing parties have requested moving the hearing date back anywhere from six to 11 weeks, we should know the extent of any changes in the procedural schedule after the 14th.
Turning to slide 17, we filed the California General rate case at the end of August similar to our Arizona case, the proposed $12.8 million revenue increases inclusive of approximately 10.9 million revenue reduction associated with tax reform. This revenue reduction consists of three components first approximately.
$7.4 million is attributable to the change in tax rate second 1.6 million as a result of our proposals amortize the excess accumulated deferred income taxes over the rate case cycle.
And lastly, $1.9 million associated with the amortization of the difference between the authorized and the actual federal income tax expense for years 2019, and 2020 that we're currently tracking.
In addition to the various tax reform changes that are reflected in the $12.8 million revenue increase. The proposal also includes Anoro, we had 10.5% relative to an equity ratio of 53%.
A proposal to increased rate base by 230 million to reflect the various investments we've made in our distribution system since the last Rick.
We're also proposing to continue our post test year attrition adjustment of 2.75% and in compliance with the Commission's new risk informed decision, making process. We have proposed three different tracker programs, whereby we would adjust rates annually to recover our cost associated with the program. If approved these programs could result in an additional.
From an opportunity of approximately $40 million year over the five year rate cycle or $200 million in total we anticipate participating in a procedural conference within the next 30 days to finalize a schedule, but generally we expect to have a hearing completed by the first half for 2020.
Before we move on to Paiute I'd also like to provide a quick update on our Nevada rate case independent and the pending judicial review.
You may recall following our rate case last year, we filed for judicial review of that decision. The court recently set a hearing date for December 17th and consistent with our previous discussions on this topic subject to the outcome of that hearing we will likely look to file our next Nevada rate case next year and could be as early as the first quarter of 2020.
Moving to slide 18, and Paiute pipeline. In addition to our state rate cases, our FERC regulated pipe pipeline company filed a rate case in may requesting the increased revenues by 7.1 million, which includes revenue of about 1.8 million associated with a proposal to increased depreciation rates similar to our state cases the increases.
Net of any adjustment for changes in tax reform, including a proposal to start amortizing the 15 million of excess accumulated deferred income taxes by approximately $340000. The year, we expect interim rate to become effective in December of 19 hearings are currently scheduled for June of 2020.
And we expect a final decision by the end of the third quarter 2020.
Turning to slide 19.
And our customer data modernization initiative, we're still working our way through the regulatory process in hopes of receiving constructive regulatory mechanisms and each state to help facilitate timely and complete cost recovery of the project.
In Nevada following a hearing in August the commission concluded that the rate case venue was the most appropriate venue to seek recovery of the project costs. Following our review of that decision, we decided to file a petition for reconsideration of that order and that is currently pending than we anticipated decision as early as next week.
Arizona scheduled a hearing for February 17th 2020.
And in California, We recently received approval to establish a memorandum account began tracking the costs and we've also reached an agreement in principle with the public advocates office on our request for approval the project and to establish a two way balancing account to recover the cost. We are currently documentary not agreement and plan to submitted to the commission for approval later this month.
Turning to slide 20, and an update on several expansion related projects.
We're in a final stages of testing before we placed the southern Arizona LNG facility into service as a reminder, we've also included the cost of this facility in our current rate case as part of our post test year plan adjustment.
In Nevada, we continue to make progress on building out our distribution system in speed and hooking up new customer, including working on bringing the permanent gas supply to mesquite with the approach me, which is still expected to be in service by the first quarter 2021.
Meanwhile, we'll continue to serve customers with a temporary virtual pipeline and compressed natural gas.
We recently of sleep testimony from staff in the consumer advocate on our 62 million dollar SB 151 Spring Creek proposal no one oppose the proposal and we have held numerous settlement discussions with the parties and if the cases not settle we anticipated hearing the week of November 18th what the final decision in early 2020.
Turning to slide 21, you may recall, we make filings in February of this year to update the surcharge revenue associated with both our customer owned yard line and vintage steel pipe replacement program.
The proposals would have increased surcharge revenue by approximately $12 million beginning in June of this year to recover the costs associated with investments from 2018. The commission ultimately decided to not adjust the surcharge revenue and instead, we'll address cost recoveries part of our pending rate case as part of this decision. The company will also now will become.
He will also not make a surcharge filing in February of 2020.
For the 2019 work that is currently being completed.
This is the impetus for us, making a supplemental filing and our rate case to include the coil and VSP projects that are being worked on in 2019.
This is the $125 million increase I mentioned previously which is also estimated to increase the rate relief request by approximately $17 million.
And with that I'll turn it back to John .
Thanks, Justin.
Slide 22, we illustrate the robust economic conditions that exist throughout our three service territory over the coming five year period, we expect population growth in Arizona, Nevada and California.
The national growth rates.
Turning to slide 23 high rates of growth in states. We operate in result in additional customers for utility operations. This year, we expect at 35000 from new customers that trend anticipated to grow even further in subsequent years.
Moving to slide 24, additional customers and our continued investments in safety and reliability of our gas distribution system requires a healthy capital expenditure budget as we previously indicated we expect in that $2.1 billion into our natural gas operations in the three year period ended 2021.
Approximately 40, 550% of our capital needs will be generated through internal cash flows with the balance being funded through a combination of debt and equity issuances. All told we now expect 2019 total capital expenditures to reach $730 million by year end.
Turning to slide 25, our continued natural gas operations capital expenditures ultimately translate into growing rate.
We expect that rate base will grow from 3.5 billion at the end of last year to $4.8 billion by the end of 2021. This growth represents an 11% compounded annual growth rate over that three year period.
On slide 26, we illustrate the revised earnings guidance range I reference at the outset of the call at the end of this year. We currently anticipate that our earnings will be in the range of $3.60 to $3.80 per share.
Moving to slide 27, we provide some additional color on our 2019 expectations.
First for natural gas operations, we believe that operating margin for the year will increase by 4% to 4.5% operating income should decrease slightly we anticipate an additional $1 million of company owned life insurance earnings in the fourth quarter and as I previously mentioned capital expenditures for the year should total.
$730 million at or utility infrastructure services group 2019 revenues should increase by 10% to 15% operating income should approximate five to five and a half for some revenue and please keep in mind net income expectations are net of non controlling interests and the fluctuation.
And in Canadian exchange rates can influence results.
Finally on slide 28, we summarize key long term value drivers for our shareholders.
For our natural gas operations segment, we continue to experience strong customer growth expecting to add an excess of 35000 customers per year for the three year period and the 2021.
Also anticipate investing $2.1 billion over that same period to not only serve growing demands, but to enhance the safety and reliability of our gas distribution system.
Capital investments should drive significant rate base growth, which we expect to increase in an 11% compounded annual growth rate and Justin Brown detailed earlier, we strive to collaborate with our regulators to establish constructive rate mechanisms to enhance timely cost recovery in conjunction with the filing a regular.
Rate case applications and our century utility infrastructure services business. We are one of the largest specialty utility contractors in North America, No operating 40 different states provinces across the United States in Canada.
Our customer relationships, our long term in nature with the average customer relation shift among our top customers being in excess of 20 years. We believe essentially segment has strong continued prospects for growth as utilities across the country reinvent similar businesses to enhance the provision of utility service.
To their customers.
With that I'll now turn the call.
Thanks, John .
That concludes our prepared presentation for those who have assets. Our slides. We have also provide an appendix slides that includes other pertinent information about southwest gas holding and has two business segments.
Slides can be reviewed at your convenience.
Operator, Dimitris will now explain the process of asking questions.
As a reminder to ask a question do we need to press star wind on your telephone.
Today's call. Your question please press the pound.
Please standby, while we come talk to culinary roster.
And our first question comes from Christopher.
Garner with JP Morgan you May proceed.
Hey, guys how are you.
Good morning.
I wanted to make sure I understood the.
Coil order and Arizona, and just how that track our works in the first place versus folding it into the general rate case.
Do you get a return on that asset and basically even though you're clearly not going to be able to book at this year are part of it this year.
You actually lose anything on a net present value basis for your shareholders.
Chris This is Justin Brown, yes in Arizona, the quell and VSP program did not have a deferral aspect to them. So we invest money and then we implement a surcharge based on.
The revenue requirement at point in time, and so yes, there's some regulatory lag associated with that.
Okay. So.
Your original filing there was for 2018 spending.
And to get a return on I know that and simply now.
I have to wait until next year to get that to flow in so hopefully you get the same absolute amount is just on it delayed basis.
Correct.
Okay and any reason why the.
Commission decided to roll it together with the general rate case is there's kind of outside the normal practice with this filing.
Yes, both well the BSP programs fairly new but the COYL program that around and there's been a.
The history of.
Adjusting those on an annual basis I think it was just the timing of them and the fact that you have some new commissioners and kind of an interest in looking at the underlying programs themselves I mean for the most part or all the commissions are pretty supportive of the program.
But I think because of the ongoing rate case.
They felt more comfortable consolidating everything and taking a thorough review of the programs and and moving forward as part of the rate case.
Okay.
And then.
The.
Permitting issues that you are having at century.
Sound like they are temporary based on your prepared remarks, and I think that was.
Kind of the color that you provided at your second quarter call as well.
Im just wondering if you could give us some more detail on the nature of those.
Is there an ability to kind of protect yourself in future contracts or as kind of current contracts roll forward for customers and.
Is this something that you can kind of breakout between line Tech and your legacy century businesses.
Hi, This is Greg.
At tier to your point. This is something that's happening generally in the northeast part of the U.S. outcome, some incidents that happen not related to us.
A year or so ago.
As far as putting something in our contracts that would help insulate us from this I think were our customers were really the ones that are subject to the regulation and then of course, we work for our utility customers back east.
And they have desires and and requirements for us to do work for them.
So I do believe it's temporary in nature again kind of the delay that happened. When these things were first implemented as we previously discussed as substantially subsided and we're just now getting work.
On a going going forward basis, given that there wasn't an initial delay that we saw that impacted both Q2 and Q3 results.
Okay.
Is it isolated to one customer or is it several customers in the northeast region.
Others. This is Greg the there's a couple of customers up there and it does it is impacted for us in multiple states up there because of where these customers.
Operate their businesses, but it's a couple of customers up there.
Okay, great. Thanks for the color but.
And our next question comes.
Our next question comes from ACA, then Mccarthy you can you be yes, you may proceed.
Morning.
Good morning.
Do you expect to renegotiate revenues related to the project in Canada to recover the higher cost and if yes, what is expected timing of it.
Hi, Good. This is John we are working through those cost inference is now we're talking to one of the subcontractors that we have and we're coming to the end of that project. So customer currently is.
Inspecting and.
Getting to the point, where were we want to season, except commissioning other projects. So we will be be looking at that as we close out the project.
Thanks.
Increase it doesn't come Capex and during your prepared remarks, you mentioned some additional spending California, how should we think about your Capex program going forward is there potential for upward revisions.
Hi, This is John again.
Thank you probably should continue to think about it as a $2.1 billion three year run rate.
We're going to have some fluctuations in that number.
From year to year could be a little higher could be a little bit lower we've seen a lot of projects get close.
Closed out this year, and we've actually seen particularly in Arizona.
Some additional demands by customers for gas service has caused those.
The year numbers flex up a little bit, but I think that going forward at this time, we're kind of looking at that plus or minus.
700 million dollar a year number but $2.1 billion on a three year.
Thank you for taking my question.
Thank you.
And our next question comes from Chris. Thanks, Melfi Jefferies. Sir you May proceed.
Hi, guys, Okay well.
Good morning good.
Just I just wanted to follow back up on Christmas earlier question, just I I better understand because I think you had boasts the the coil.
And DSP.
Surcharge.
Delayed timing of that but then also this delay in here in your filing for that to 19.
Recoveries.
Yeah I guess.
If I am.
I wanted just make sure I understand correctly your answer to him.
There wouldn't be necessarily that catch up that we should expect maybe on the back of the rate case next year. If everything is approved as you expected to be.
Is that is that correct, you've got the absolute amounts, but but you wouldn't get a catch up for the delay from now in recovery from your timing line that you had originally plan versus what now.
Looks like will happen.
Yes, I think I think generally that's correct, Chris there was nothing preclude that in the decision and so obviously, it's something we're going to continue to look at evaluate but I think.
Generally speaking is probably at a fair way to look at it.
Okay, and then if I remember correctly. The last case you had there you guys were able to settle that a little bit early I'm. Just curious your thoughts on that given there it seems like theres quite a bit more involved. This time around is that something you are hopeful for or do you think litigated timelines, probably the best one anchor too.
Yes, I think.
Given the current climate there.
Litigation track, most likely the director of the staff pretty much indicated.
To that meeting that they're not entertaining any settlement rig period Dan.
So obviously, we have a good relationship with them, we're going to continue to try to work on the narrow the issues from a litigation standpoint, but I think from a policy standpoint, where it stands right now in Arizona, they're just not entertaining.
Any settlement negotiation period.
Okay and.
And then I guess final question for me you I think you had mentioned in the commentary around spring Creek that there'd been no opposition hearings. Thus far it's here proposed expansion there I guess from from your vantage point or may be influenced by the way that the mosquito expansion unfolded is the absence of opposition enough for that authorization to happen or.
I guess did you did you get what you were hoping to get form in the form of support.
And those here.
Yes. So hearing is actually scheduled for the end of among than I think based on the testimony I would like to think we can work out some of the nuances and hopefully reach an agreement with the parties because they were all well the consumer advocate was kind of noncommittal, one way or the other whereas the staff I think was generally supportive.
The expansion and so I think theres enough there to work, where that's why we're hoping to work with them to see if we couldn't reach an agreement that we could just submitted a commission for consideration and alternatively.
We'll have a here in at the end of the month that I think the be pretty limited in scope in terms of kind of the issues that are outstanding and I don't think it would impact anything in terms of our underlying proposal of.
How we approach expanding to to spring Creek.
Okay. All right. Thanks for that I guess my question for Man and John This is probably for you just can you remind me what motivated the the.
The incorporation.
From California, Delaware, what advantages you pick up in doing that.
Well, there's a number of advantages from.
The perspective, or Delaware law, and see the vast majority of.
Corporations are incorporated there. So we thought that it was kind of a best practice to move in that direction.
Okay, so nothing necessarily tangible on our embedded optionality on a legal from probably enhanced and yet and there. Okay, Yes, I think thats fair.
Okay, all right. Thanks, a lot guys appreciate it.
Thanks.
Ladies and gentlemen. This concludes actually next question of today's conference call I would now like to turn the call.
Can you for any closing remarks.
Thank you Dimitris. This concludes our conference call and we appreciate your participation interest in southwest gas Holdings Inc.
Have a great day thank.
Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great.