Q4 2019 Earnings Call
At this time all participants are in a listen only mode.
After the speakers presentation, there will be a question and answer session to ask a question. During this session you'll need to press star one on your telephone keypad. Please be advised that today's conference is being recorded pure acquire any further assistance. Please press star zero. Thank you I would now like to hand, the conference over to your speaker for today Patricia Josh.
Vice President of Investor Relations and shareholder services. Please go ahead.
Thank you, yes, and good morning, everyone. Thank you for you wanting us to discuss not on grid fourth quarter 2019 earnings result, presenting on the comp there Jim Thompson, our Chief Executive Officer, and Doug He's our Chief Financial Officer, a team of 500 out but this will also be participating on the call to answer. Your question. If you do not have a copy of our press release.
And he can for today's call. They are available on our website at www Dot Ivan Green Dot com during today's call. We will make various forward looking statements within the meaning of the safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 based on current expectations and assumptions, which are subject to risks and uncertainties actual results could differ materially from our.
Forward looking statements of any of our key assumptions are incorrect, but because of other factors discussed an argument the earnings news release. The comments made during this conference call and in the factors section the risk factor section of the accompanying presentation or in our latest reports and filings with the Securities and Exchange Commission each of which can be found on our website of in Green Dot Com, we do not undertake any duty.
Update any forward looking statements. Today's presentation also includes references to non-GAAP financial measures you should refer to the information contained in the slides accompanying today's presentation for Definitionally information and reconciliations of non-GAAP financial measures to the closest GAAP financial measures I will now turn the call over to Jim Torgerson.
Thanks, Patricia and good morning, everyone and thank you for joining the call I.
I think when we went into 2019 renewal is going to be challenging year, and but we took actions to position the company to be better for the future still are we were very disappointed with our financial results, which were below our expectations.
However in 2019, we did achieve some significant accomplishments in line with our long term strategy that does position is very well for the future, particularly once new rates go into effect in Maine in New York.
Now I'm also happy to announce that in New York, We filed a letter today notifying The commission we have reached a settlement.
In the New York State electric and gas in Rochester gas and electric rate cases.
Furthermore, we invested 3 billion, which was up 73% against 2018 to help modernize and upgrade the grid and increase our renewable capacity.
We achieved savings of 75 million pre tax in 2019 from our forward 2020.
Program.
Which helped to partially mitigate the negative impact of lower than expected when resources, the outage restoration and staging costs and lower than expected transmission Roes on revenues, but it also helps and reducing our cost structure, mainly in the corporate areas for the future.
In the networks business.
We recently received a final decision from the main public Utilities Commission in the CMP distribution rate case, and the metering and billing documents dockets.
Now our rate cases in New York in May and represent about 55% of our total rate base with new rate plans going into effect. This year in Maine, it'll be on March onest.
And then in New York It should be in May depending on the settlement, which were drafting now.
Now one good thing in the New York case, the staff position on the minor storms will allow recovery or deferral of the vast majority of those costs, which have been playing out for the last year and a half.
Our new England clean energy connect transmission project did receive several key permits to certificate of public convenience and necessity, the Massachusetts DPU. The land use planning Commission and we're continuing making progress towards start of operation in 2022.
In renewables, we continue to execute on our strategy, we commissioned to 831 megawatts of wind projects in 2019, including 605 megawatts in the fourth quarter and we are constructing seven our megawatts of onshore wind and Repowering 366 megawatts of when they're all expected to be in operation in 2000.
200.
During 2019, we executed 480 megawatts of new PPA contracts.
And exceeded our long term outlook target of 2000 megawatts, we closed on the asset sale and transfer of a 50% interest of two renewables assets with a positive impact of 32 cents per share, which exceeded the initial 2019 outlook estimate.
In offshore wind our park City Wind project, which is a 50 50 joint venture with Copenhagen infrastructure partners was awarded 804 megawatts in Connecticut offshore wind RFP and we do expect to see some synergies with our vineyard wind project in terms of logistics supply chain and once constructed in all of them.
Then in corporate governance, we were named as one of the world's most ethical companies by the Ethisphere Institute in 2019 and 2020.
And received an award for best corporate governance in the US by World Finance magazine in 2019.
We will also recognizes the north American utility with the best corporate governance by ethical Boardroom magazine.
Now turning to slide number six.
For the fourth quarter of 2019, net income was 223 million or 72 cents a share up 34 cents year over year and our adjusted net income in the fourth quarter was $230 million are 74 cents, a share which was up 18 cents versus 2018.
Financial results from the fourth quarter reflect the sale and transfer of 50% of the two renewable assets in line with our strategy to optimize the value of our renewable portfolio.
For the year to date net income was 700 million, our 226, a share which was up 18% or 34 cents a share over year over year and adjusted net income amounted to $673 million or to 17 to share which was down four cents from 2018.
The key drivers for the year over year results by business earned in networks adjusted earnings per share decreased seven cents.
The $1.50 per share results reflect the impact of higher depreciation New York Storm settlement and the nice thing safety reliability revenue adjustment.
And higher outage restoration and staging costs these negative impacts more than offset the rate increases in New York, Connecticut and Massachusetts.
Although reduced by lower transmission revenues in Maine, due to historically low volumes in the fourth quarter versus prior years.
Compared to our expectations full your impact of the outage in restorations was a little bit higher.
Renewables results improved year over year with adjusted earnings per share up 12 cents or 21% to 72 cents per share driven by the sale of assets.
Higher revenues from thermal and trading and the contribution of new capacity. This was partially offset by lower pricing related impacts expiring ptcs and lower wind resources for existing assets.
The forward 2020, plus plan produced pretax savings of 75 million in 2019, which was in line with our target range of 70 to 85 million and this was mainly achieved through spend management initiatives, which contributed about 45 million capitalized labor, which was about 15 million pre tax now these savings.
Gate, the impacts from higher outage restoration and staging costs, particularly a nice pick the reduced transmission revenues in Maine into fourth quarter and the lower wind production, primarily in the first quarter.
The key impacts during the last quarter versus our expectation by businesses. The result in lower than anticipated adjusted earnings per share. We're in the fourth quarter networks was negatively affected by the impact of the mid 2018, New York Storm settlement and the nicest safety reliability revenue adjustment, which total about four cents a share.
Negative.
The in action on the FERC salary was about six cents a share which I think most of you are aware that FERC did not act.
And then the reduced transmission revenue in Maine was down caused us to be down about five cents a share.
In the fourth quarter end versus our previous expectations renewable has benefited from larger than anticipated gain on asset sales, although net of the net development asset write offs of about nine cents a share.
Which was partially offset by the below normal wind resource of three cents and reduced when pricing of four cents.
Moving on to slide seven.
And before I do that I want to.
I mentioned that.
For the first part of the year through about February 24.
The we are on track with our wind resource production. The west is actually up significantly, whereas the Midwest and northeast are down about double digits in Texas is off a little bit as well, but so far we're tracking with our plan for the up to this point in time.
On slide seven move onto the capital spending.
We invested approximately 3 billion in 2019, and this represents 73% increase opposed to last year driven by growth in both business segments.
Overall about 55% of the capital spending in 2019 was a networks and 45% renewables by business the capital spending in our Newbuilds amounted to approximately 1.4 billion, increasing by about $1 billion year over year due to projects under construction in 2019, Repowering and a new offshore development lease area.
[music].
Networks capital spending increased by 17% year over year to $1.6 billion, driven by ongoing asset replacement system automation and technology upgrades.
We expect these increased investments to drive on grid future long term growth.
Now turning to slide eight.
Moving to our outlook for 2020.
Earnings per share is expected to be between 206 in 226 per share we're guiding to our adjusted earnings per share, which is expected to be between 217 into 37 per share.
Our networks are 2020 outlook reflects additional stability with the conclusion of the New York and main rate cases, and the resulting rate increases which will allow us to earn are allowed returns and recover the amortization of regulatory assets and costs associated with our growing rate base vegetation management and outage restoration in stages.
Absence of of the New York Storm settlement of the nicest safety reliability or revenue adjustment as well and then the negative impact we're going to see from depreciation of new assets, but most of that in lease for the networks business, which should be included in rates.
Now there is no assumption for the FERC, our OE, including in our guidance. We just do not see whether FERC will actually make a decision are what direction. It will go based on the Midwest ISO recent decision and now the rehearing that's occurring there.
For renewables, our outlook is driven by normal wind production on our existing assets assuming life to date asset production. So we've adjusted the again the life to date.
Asset.
Production levels, the full year contribution of new capacity, which was 831 megawatts and repowering benefits, including Ptcs and increase production.
A lower contribution from asset sales, we don't anticipate anything more than something in the five cent range. This year.
Lower thermal revenues as 2019 benefited from increased volatility prices in the west our climate cogeneration Powerplant significantly increased production.
Which really compensated for lower hydroelectric generation in the northwest in 2019, and also a trend gas pipeline that was out of service, which caused the prices to be higher and we benefit from that or corporate our outlook is driven by the impact of financing costs, driven by increased debt and lower positive tax adjustments.
Moving on to slide number nine.
And the highlights from our network business.
In New York as I said in the nice take NRG and the rate cases, Weve reached a settlement we notified the commission of that today.
So and new rates would be expected to be effective in may of this year.
In addition, we settled the 2018, New York SARM investigation and involved a financial penalty of tenant half million after tax.
Which we did not have all of that in our original guidance in the fourth quarter.
In Maine final decisions in the CMP is rate case in metering and billing dockets were announced during main.
Public utility Commission deliberations in January of this year for the CMP rate case, we received the written order last week with a 9.25% authorized Roe.
And a 1% negative borrowing management efficiency adjustment until customer service metrics are met for 18 months.
And as 50% authorized equity.
There was a 25% increase in funding for vegetation management that takes it up to about 25 and a half million.
Increased minor starn recovery to 8.1 million from 4 million.
And the collection of previously deferred under recovered tier tours storms of 10 million in cash.
For the CMP metering and billing system. The Examiners report found no systematic problem within CMP is metering and billing systems that had caught that would've caused erroneous high usage on customers bills. The examiners report also identified issues with CMP implementation of its billing software.
Requires establishment of an independent electricity use audit program and resolution of all remaining issues in complaints.
Turning to slide 10 concerning our 950 million, New England clean energy connect transmission project.
And thats going to deliver 1200 megawatts of Canadian Hydro power to the knowing England grid and the project continues to advance to the permitting process on January eight we received the site lost certification from the main land use planning Commission domain Department of Environmental Protection Draft decision is expected in early March and fine.
Well decision expected in April.
The US Army Corps of engineers approval as expected early in the third quarter 60 to 90 days. After the main DDP final decision and then the ISO New England 3.9 approval is expected in the first quarter of 2020.
The presidential permit which is not needed to start construction. It's just needed to cross the border is expected to be issued approximately 60 days. After the US Army Corps of engineers in the ISO New England ice free nine approvals.
We still expect to start construction the third quarter of 2020 to start operation by the end of 2022.
While opposition to our clean energy project, which is supported by fossil fuel generators and the potential of estate reference random remain we have contributed resources for our political action committee called clean energy matters dedicated tape, helping main voters understand the benefits of any cc incurred.
Misinformation about the project.
The benefits of the Nspcc includes 14 to 44 million per year, and lower future electricity costs in Maine.
3.6 million metric tons reduction in regional steel to emissions, which would be equal to at least 700000 fewer cars on the road.
The 1 billion dollar invested in infrastructure in Maine, with 250 million in local benefits for Maynard.
Turning now to slide 11.
In renewables, we are executing our strategy with 831 megawatts of onshore wind commissioned in 2019, including 605 megawatts in the fourth quarter with a 307 megawatt carranco of wind farm in Texas to 201 megawatt Montag wind farm in Oregon that came online in October and the 97 megawatt Cody.
Average wind farm in South Dakota, the key modeling in December of 19.
Also in 2019, we purchased Patriot when a 226 megawatt wind farm in Texas at Cod in June.
We have seven our megawatts of onshore wind projects under construction and 360 megawatts of wind Repowering that are all expected to be operational in 2020.
We added new PPA used for 480 megawatts during 2019, including the 215 megawatt PPA for Montag solar and our again in the 68 megawatt PPA for Camino solar and battery storage in California, both secured in the fourth quarter.
But also on 2019, we signed the PV for 140 megawatts for La Jolla to wind farm in New Mexico in the second quarter, which was not in our plan.
On a 52 megawatt extension of the Tonka Ridge Wind project in South Dakota again, not in our plan in the first order.
On slide 12, renewables exceeded its growth expectations, while optimizing its asset portfolio, we exceeded by 212 megawatts. Our 2018 to 20 to 2022 capacity target of having 2000 megawatts operational by the end of 2022 with executed contracts of these.
2212 megawatts 831 megawatts of onshore wind projects came online in 2019, and we've signed contracts for 1381 megawatts, a wind solar and battery projects.
That are expected to come online between 2020 and 2022.
We are not including the 400 megawatt PA executed for offs so our win.
Which now is schedule no earlier than 2023.
We are moving forward with optimization of our renewable assets in December we closed the sale of 50% ownership interest in two projects in Arizona axiom infrastructure.
The EPS impact in 2019 was 30 cents exceeding our initial 2019 outlook estimate was by 10 cents.
Of 10 cents I'm sorry.
This is a continuation of the ongoing strategic initiative to optimize our assets and pipeline and we expect approximately five cents from sale of assets in 2020.
We increased our pipeline by 19% year over year from 14.9 to 17.7 Gigawatts.
Slide 13 concerning the offshore business. The Bureau of Ocean Energy management published a revised timetable of our vineyard win 800 megawatt offshore wind farm in joint venture with see IP bombs, New schedule places the final supplemental environmental impact study on November 13, and a record of decision by December 18th two.
20, Twond considering the revised base case, we target a commissioning date no earlier than 2023, we also see no risk of the PPA any termination under a later commissioning date.
The good thing is with US later date is also helped develop synergies with our park city win.
So during 2019 the project secured other key permits including the approval from the May, Massachusetts DTC of the contracts.
With the electric distribution companies as well as the approved permits for the interconnection with the regional grid, So, Massachusetts energy facility Siting Board.
We anticipate qualifying for the 18% ITC for this investment. In addition vineyard wind has been qualified for capacity of 156 megawatts in summer and 278 megawatts in winter in the ice on capacity auction in February which also includes the 54 megawatts awarded in 2019.
In Connecticut Park City, when our vineyard wind joint venture to serve kinetic was selected in Connecticut offshore wind RFP in December.
Park City, when will generate 804 megawatts of clean energy, which will provide the equivalent an up 14% of the state's electricity supply.
The project will be located near vineyard wins other planned offshore wind farm south of Martha's vineyard within expected in service date of about 2025, we're not negotiating a 20 year contract with the state distribution companies. The project will reduce the regional greenhouse gas emissions create jobs generate direct economic benefits.
Of about 890 million, including energy cost savings to Connecticut repairs.
Including up to 26, and a half million and workforce development initiatives.
We announced a partnership with Marmon utility LLC in Connecticut to supply offshore enter array cable cores.
Creating the first you as tier one offshore wind supplier and park city wind has the potential to establish Bridgeport as an offshore wind hub.
On page 14, you can see avangrid is developing offshore projects and three lease areas.
In Massachusetts Vineyard when holds to lease areas, which can accommodate up to three gigawatts than two gigawatts, respectively, and our shares 50% of that vineyard win in park city when are being developed in the first lease area. Both leases our current our own jointly with the IP and is still potential of capacity for.
Our submission for into future our fees. In addition, the kittyhawk lease areas, 100% owned by Avangrid renewables and has the potential capacity up to two and half gigawatts.
Last week on February 20 at the site assessment plan was approved by the bomb for Kittyhawk.
The U.S. offshore wind market has gained considerable momentum in the us and in the northeast in particular, Massachusetts, Connecticut, New York in Rhode Island has set ambitious offshore wind targets and almost 5000 megawatts have been awarded.
In addition, New York announced its second 1000 megawatt offshore wind RFP with bids due in August and selection in November.
15, as one of the cleanest us utilities and a leader in renewable energy Avangrid as at the forefront in ESG in 2016, we pledged to reduced emissions intensity and to be carbon neutral from our own generation by 2035, making online grid. The first us utilities set a goal for carbon neutrality.
On grid supports the UN sustainable development goals, and we are particularly focused on the goals targeting affordable and clean energy and climate action with which our SDG seven and 13.
But our activities also directly contribute to other goes like life on land, our industry innovation and infrastructure among others.
We are committed to create value to our society in a sustainable way through our investments and initiatives in our communities.
In 2019, we actually reduced employee lost time accidents by 11%, we organized and our innovation farm with the participation of students from MIT, Yale Harvard Cornell and New Khan.
I'm in grid is establishing a new private secured fiber optic network, which is an industry leading practice in cyber security.
On slide 16, we continue to make important progress in our efforts to deliver the benefits of portable clean energy to our customers and communities.
2020 to 30 are often grid earned a place in the global cleaning 200 list of the world's most significant publicly traded firms. According to the size of clean revenue from products and services.
Provide solutions for the planet. We're also constituent of the let's see for good index Aries and participate in the carbon disclosure project, a global environmental disclosure system.
Avangrid also gain recognition as a leader in corporate governance for the second consecutive year end 2020, and 29 tuna been recognized by the Ethisphere Institute as one of the world's most ethical companies. We also earns a prestigious compliance leader verification status from Ethisphere Institute.
On grade was awarded the best corporate governance for North American utilities by ethical boardroom and recognized by World Finance magazine for best corporate governance in the U.S.
In conclusion, we continued to execute on our long term strategy to deliver sustainable growth.
By investing in clean energy rebuild the grid of the future and serve our customers through innovative and smarter energy solutions.
For 2020 will continue executing on our long term strategy and enhance the performance at our regulated utilities to drive our longer term growth and I'm going to turn it over to our CFO Doug soon.
Thank you Jim Good morning, everyone and thank you for joining us today.
I'm now on slide 18.
On this slide we roll forward earnings per share from the fourth quarter in the full year 2018 to the same periods in 2019 on a us GAAP basis and on a non us GAAP adjusted basis.
The adjusted EPS amounts in these periods showed the impact of the exclusion of positive mark to market adjustments in the renewable segment, resulting from favorable price movements in our merchant hedges in the quarter over quarter and year over year periods.
In the quarter over quarter in year over year comparison, the impacts were nine cents negative and 33 cents negative to our adjusted results respectively.
With our four repowering projects well underway. The adjusted results. So the impact of the exclusion of negative accelerated depreciation which were five cents quarter over quarter, and 10 cents year over year favorable adjustments.
Finally, the additional significant item excluded from the adjusted GAAP EPS roll forwards are impacts from tax reform recorded in 2018, resulting in a negative 13 sent quarter over quarter and negative 15% year over year impact.
The full reconciliations for this are shown in in the appendix if you'd like to review further.
As you can see in the slide networks adjusted quarterly results are flat in 2019 versus 2018, while the annual results are lower in 2019 versus 2018.
In the 2019 and 2018 calendar years, we had non deferrable outage restoration and staging costs of 13 cents and 10 cents, respectively for a three cents negative year over year impact.
In the fourth quarters of 2019 in 2018, we incurred three cents of non deferrable of storage.
Trust duration and staging cost as well.
In 2018, we also had additional secondary impacts from outages in the form of lower FTC and capitalized labor along with the Katy penalty that represented as negative four cents impact.
Those items, along with the 10 cents of outage restoration costs combined to produce 14 cents in outage related costs for the 2018 calendar year.
In 2019, we have the New York Storm settlement and safety revenue adjustment the combined for a four cents negative impact, bringing total outage related cost to a negative 17 cents.
Importantly, given our expectations, resulting from the CMP rate decision in the New York companies rate case, we expected. If we have the same recovery and reconciliation measures in place in 2019, we would have mitigated approximately 80% to 90% of the roughly 13 cents in 2019, non deferrable outage restoration in stages.
Cox.
In the renewable segment the quarter over quarter and year over year comparison, largely benefited from asset sales, new wind projects and thermal and trading revenues.
While pricing related items in the PTC roll offs, where the negative drivers.
When was marginally worse for our existing assets in 2019, but remember this is compared to 2018 wind, which was also below our life to date average.
Our corporate segment largely reflects higher interest expense as we issued a $750 million Green bond to fund our growing portfolio of sustainable energy projects as well as period over period tax impacts.
The next several slides provide more details on the business segment impacts.
Ill now on slide 19, which summarizes the key results and business drivers for networks.
For the fourth quarter, you can see that adjusted EPS was flat quarter over quarter at 36 cents.
In the quarter over quarter comparison, we experienced a net benefit of four cents from rate increases with a seven cents positive impact from higher rates and a one cents benefit from lower earnings sharing less of four cents negative impact from lower transmission revenues in our CMP utility.
The lower CMP transmission revenues, which are below expectations by five cents for the quarter, where the result of unexpectedly low regional bodes.
Networks also improved three cents from a number of other small benefits such as improvements and capitalized labor and ABDC.
Those positive impacts were offset by a three cents negative impact from higher depreciation and a four cents negative impact from a penalty, resulting from new York's review of our 2018 storm response, and a safety revenue adjustment related to outage frequency as nice day.
Outage restoration in staging costs were flat in the fourth quarter of 2019 compared to the fourth quarter of 2018.
For the full year 2019, the networks business reported adjusted EPS of $1.50 per share.
Which was a decline year over year of seven cents or 4%.
For the year over year comparison rate increases provided net benefit of nine cents, including a 17 cents positive impact from higher rates of three cents negative earnings sharing impact and a five cents negative transmission revenue impact.
The transmission revenue impact for the year was eight cents below our expectations.
The positive impacts of our rate increases were more than offset by a negative three cents earnings impact from higher outage restoration in staging costs of four cents negative impact from the New York Storm settlement and Nice said safety revenue adjustment and 11 cents of depreciation from new assets placed in service.
The networks results include the benefit of the achievement of our forward 2020, plus targets, resulting in an approximately nine cents positive impact in in these results.
Turning to slide 20, our renewable segment achieved quarter over quarter and year over year improvement adjusted EPS for the fourth quarter of 2019 was 35 cents, a 23% improvement from the fourth quarter of 2018.
This largely reflects the successful sale and transfer of control for 50% of our driver to wind project in copper crossing solar project in the fourth quarter.
Those resulted in a gain of 30 cents for the quarter over quarter comparison, offset by development pipeline asset write downs of three cents.
When performance for the quarter from existing assets was flat quarter over quarter.
And new assets and service Patriot and Montag contributed one cents versus the prior years fourth quarter.
Even though the quarter over quarter impact was minimal as I noted earlier 2019 was another low wind year for us overall with the fourth quarter 2019, net capacity factor at 28.7% compared to the 20 above into 2018 fourth quarter average of 30.1%.
Pricing related impacts were negative drivers in the quarter over quarter comparison as well approximately one cents of this negative six cents impact is due to power price excuse me power prices, while two cents is due to Rex and three cents is due to status changes.
The status changes represent a combination of PPA expirations and contracts rolling to merchant due to the first synergy solutions bankruptcy.
Finally, adjusted EPS for the full year 2019 was 72 cents, which is 12 cents higher than 2018, and a 20% increase.
The key drivers impacting the year over year comparison were somewhat similar to the quarter over quarter comparison with the asset sales net of development asset write offs, resulting in a 29 cents benefit.
Our new wind projects commissioned in 2019 added two cents for the year and the klema thermal and trading revenues were positive five cents for the year due to the higher prices and volatility earlier in the year in the northwest.
When we had exceptionally cold first quarter and also the Canadian pipeline rupture.
This is partially offset by lower pricing related impacts 21 cents expiring ptcs of four cents and lower wind resource on existing assets.
Wind production from our existing assets was down two cents year over year with a 21.9% net capacity factor in 2019 versus a 29.8% net capacity factor in 2018 or roughly 2%.
Similar to the networks business embedded in the results is the approximately nine cents per share benefit from our forward 2020 plus efficiencies.
Now turning to slide 21, we take a look at the corporate segment, which reported adjusted EPS of four cents for the fourth quarter of 2019, the decline of four cents from the fourth quarter of 2018.
Adjusted EPS was a negative four cents for the full year a decline of nine cents compared to 2018. These quarterly and annual declines are largely driven by additional interest expense from the issuance of the $750 million Green bond in may of 2019.
And the period over period differences and taxes, including discrete tax items.
The consolidated effective tax rate for 2019 was approximately 17% excluding discrete items and thats down from the 19% level that we had for the first nine months of the year.
On slide 22, we looked at the financing and dividends strategies as we noted in 2019, we issued the $750 million Green Bond. This brings our total green bonds outstanding to 1.35 billion. In addition to that we have a $2.5 billion sustainability linked credit facility that we implemented in 2018.
Our credit ratings are very important to us and we maintain our stable triple b plus be double a one ratings with the rating agencies.
We're also maintaining our payout target of 65% to 75% and note that the board recently declared the first quarter dividend of 44 cents payable on April 1st of this year.
On the next slide Slide 23, we turn to our debt and cash flow for 2019.
Cash from operations was $1.6 billion.
We had combined cash capital expenditures from our growth in networks, and renewables of 2.7 billion and dividends of 545 million.
This resulted in us raising about 1.7 billion of additional short and long term debt to cover the gap and then cash increased by $141 million compared to 2018.
As expected, we're funding our strategic growth with debt and our net debt to total capitalization ratios, increasing although still quite strong.
We have a green financing strategy with the $750 million green bonds being issued.
And the totaled 1.3 billion outstanding and again, the the sustainability line credit facility.
On slide 24, we look at our estimated cash flows and financial metrics for 2020.
We expect operating cash flows of over 1.7 billion with improvements versus 2019, resulting from rate increases that moderate the impacts of outage storage outage restoration staging costs.
A return to more normal when performance and new capacity placed in service.
We expect capital expenditures of approximately 2.8 billion with over 70% of that spend on our core operations in the networks business and the remaining 800 million, primarily with new renewables projects.
This will increase our debt as we.
And the growth in dividends with $1.2 billion in new debt, increasing our debt ratio to is still strong 38%.
Those impacts improve our cash from operations pre working capital to debt ratio to approximately 16.6% from the 2019 level.
Now on slide 25 here, we show our 2020 EPS outlook of $2.06 per share to $2.26 and our adjusted EPS outlook with to 17% to 37, along with individual business segment ranges.
When we set this adjusted EPS guidance, we've considered several key drivers that Jim already mentioned.
We don't assume any FERC action on the or are we decision in 2020, and therefore this can be both the risk and an opportunity to our outlook. If there is a decision from the FERC.
Depending on the are we in the incentive mechanisms that are set.
We assume approximately three cents of Nonrecoverable outage restoration and staging costs that will still be exposed to in 2020 with new rate plans in New York not expected to take effect until may.
We believe our rate outcomes in New York in May and will go a long way towards mitigating our outage in restoration costs, but we still have exposure early in the year until the new rates go into effect.
In our renewables business were subject to wind resource variability and as Jim notes were tracking with our outlook expectations through the first part of this year.
And then our cursed commercial operation dates of our projects and construction.
The success of any asset sales.
And results could be impacted by changes in merchant prices on the asset So Jim had mentioned were.
At five cents as the expectation in our 2020 outlook for that contribution.
Taxes ongoing efforts to implement best practices, and operating efficiencies and operations and maintenance costs also impact the business.
We assume a consolidated on grid effective tax rate before discrete items of approximately 12% and our 2020 guidance.
Moving to slide 26, we provide some key sensitivities for 2020 outlook for each of these business segments, including distribution and transmission ROE fees. The FERC bar, we decision and outage in restoration costs in our networks business wind Mcf merchant prices and asset sales in our renewables business and interest rate.
Based on new corporate debt.
Finally on slide 27, we conclude with investment highlights for our company, we highlight our attractive investment opportunities in both our networks business in renewables businesses, winning key awards in two major offshore wind to our fees and one major onshore RFP for our transmission project.
Those position us as a leader in new England for the development of clean energy projects.
We also want to emphasize our leading role and being a sustainable energy company in the us having the first carbon neutral energy target, which we are committed to achieve by 2035 as well as the recognition awards, we received as an important sustainable company with strong corporate governance.
We havent distinctively strong balance sheet and solid investment grade credit ratings and a commitment to increase our dividend in line with our 65% to 75% target payout ratio.
Thank you and with that I'll now hand, the call back to our operator, Jack for any questions.
Certainly is I'd ask a question at this time. Please press star one withdraw your question press the pound key.
Julien Dumoulin Smith.
From Bank of America. Your line is open.
Hi, good morning to her Alex Mark.
Calling in for Julien.
Okay. So much for taking your question.
Hi, Alex.
Hi.
Hi, I first wanted to chat a little bit about assets Halcn I'm aware that long term guidance is going to be provided at the analyst day closer to make here, but just in terms of expectations from 20 going into 21, how should we be thinking about assets, how often maybe ken.
The other items.
That folks might thanks.
More or less onetime.
Yes going into 2020, we only anticipate any and keep in mind, we're looking at development projects and one is that we would look to sell that would make sense.
To be owned by somebody else starts to develop and move along because they don't meet our criteria or.
Whatever reasons, but the fact is we're figuring it's not going to be somewhere in the neighborhood of five cents a share losses, and we would think thats about all for 2020, we don't.
Anticipate anything else to the ones we sold in 2019 to axiom, we got a significant premium on those as you saw we had a gain of 32 cents a share.
And and we do get a little bit of it because of the reduction in the revenue we would get but we still get 50% of and I think the impact was.
About a penny a share. So we you could see why we chose to do that transaction, but going forward.
It's not going to be anywhere near a significant.
Okay. Thank you so much.
Another question that I have asked about our OE recovery and maybe we can talk a little bit more about.
I don't want that you file noted have today in New York and then also will mean I know 100.
At this point, Jeff snap on that action that about an 8.25 off very fairly for at least 18 months. There how should we be thinking about ARINC Arlene recovery on in Boston and New York.
Well first off in New York, All we've done this fall lighter with the commission, indicating we've reached a settlement staff in a few other parties and the terms of that won't be public for a little while and in Maine. As you correctly said the Aro, we that's being allowed for the next 18 months of leases eight in the quarter I know Tony do you want.
I can't comment on.
What she'd be certainty so the.
As Jim said.
Agreement in principle spend reach with.
The New York staff in several parties, we filed that this morning over the next several weeks the settlement document will be put together and we'll be seeking the support of many of the parties who have been involved in the case, so thats underway and going well and we're happy that we're able to file that this morning and in Maine.
The decision as come out and.
It is public so the that penalty will stay in place to 100 basis point penalty for 18 months.
We do have the mechanism is that there is up eight it's a rolling average of the performance of the certain customer service metrics. We're currently tracking in compliance with all those metrics right now so the goal for us to continue to maintain that level of performance and at the end or as we get to the end of that 18 months, we'll be able to file.
Ill to.
I have the are we penalty removed in reinstated the 100 basis points going forward. They specifically, saying there that we do not have to necessarily file another rate case, but there's the exact.
Mechanism is not yet well defined so there is a process that we will have to file in do that going forward and Alex just keep in mind.
From an earn standpoint in New York, we still out four months, where we don't have the rate increases so.
Nice that gets going on we're going to be.
Although return on an earned rate our earlier I think we're probably down.
I don't know Bob was five 6% in that neighborhood is what we had said for the first for modest and then hopefully we'll build to earn the allowed return because keep in mind New York. There's if you look at Con Ed settlement. There are a lot of trackers. We would expect will end up with a number of trackers as well, which should put us in position during the allowed return in Maine.
Is going to be a little more challenging we got two months, where we're not going to have a rate increase because it doesn't go into effects on March Onest and then we've also added the theres a pension adjustment, which the hasn't been allowed which is about $5 million. So thats going to have an implication on the allowed return I can't really give you a prediction on what that's going to be but knowing it's going to be a little.
Our challenging and made the lease this year going forward, we're positioned well, though is the way I look at it by selling the rate case in New York getting the outcome in Maine getting the settlement the docket on the billing and metering Don.
Getting the 2018 of wind storm here in New York behind Us, even though we suffered apparently on that so I think we'd put all these things.
Cotton them all resolve some of the now we can move forward and execute on our plans, yes, I would just reiterate I think.
2020 will be a bit as a transition year because there are some onetime items as Jim said, particularly at CMP and we have stub periods of two months at CMP and four months at the New York companies recognizing those distribution portion of CMP in New York as those two amount to more than half of our rate base.
But looking at 2021 and beyond then Tony mentioned, we expect to our goal is that within 18 months that 100 basis points to be lifted and we really see then the ability of of those companies too.
Fully see the impact of the rate agreements that we have in place.
Praful Mehta with Citigroup Your line is open.
Thanks, So much high guys.
Hi, Paul how are you.
Okay, Hi, Jim so.
Did you say attorney 19, clearly admitted disappointing from your perspective.
As I look at the guidance you gave around the adjusted EPS and that 12% to 14% or the 8% to 10% adjusted EPS growth rate through 2022, given what you're now guiding for Twentytwenty.
Can you still see that is achievable or do you now see that the 8% to 10% CAGR that you talked about is more difficult and do whatever you said that number going into the analysts day.
Well look at as at Analyst day profitable I mean, we haven't done anything beyond that yet so.
We really can't comment on it but we will reset that number that range is and when we hit the analyst day in May.
Got it okay.
Okay, then in films off the any Cc project and the referendum you still seem to have the Takeda starting construction, but it sounds like construction will begin before the outcome off the referendum is that still the right understanding and how do you expect to kind of offset the risks off negative referendum outcome, yes.
Sure. So a couple of couple things profile I would say first as Jim mentioned, we established a pack call clean energy matters and its focus is twofold right. Now one is obviously trying to correct the lot of the misinformation that.
Quite frankly fossil fuel interests are having.
And impact in Maine, with so Thats number one but also very importantly, right now we are in the midst of the secretary of state reviewing the 75000 signatures to ensure their validity.
And one of the things to pack will be doing is today is to do its own review of that so the secretary of state has 30 days that should be completed the fourth of March and then we'll have 10 days to do our own review.
So thats the first and foremost if after that process.
They still have the minimum roughly 63000 valid signatures that are needed to move forward. Then obviously the pack will continue to focus on on what it's been doing too to get information out there about the benefits of the project.
Both for Maine, and four new England.
In an effort to defeat debt. When it comes time ended Q2 early Q3, where we have all the permits and we look to construct we will make a decision at that point, but our goal right. Now is everything is systems go to begin construction in Q3.
And we're going to monitor things.
Things in Maine to make sure to see how how things are going and we'll make a decision as to how much we intend to invest at that point in time.
Fair enough and just lastly in terms of just management and next steps I know there was a change made last year I think in June two brain.
Deputy CEO as you all know so just wanted to understand.
How does that add timing of that play out what are the next steps there any kind of changes that we should be thinking about our understanding that'd be helpful as well.
Nothing new on that.
Level I mean have made that was really for the long term succession planning process that we have it on grip soon.
Nothing new.
Understood Alright, Thank you guys.
Michael Sullivan with Wolfe Research your line is open.
Yes, payroll and good morning.
Morning, Hi, Mark.
I wanted to start with C networks number that you guys put out for for 2019. So I think you highlighted some of the de items in Q4 that total about 15 cents relative to expectations, but you are actually came in I think 18 cents below the low end okay.
Our guidance was.
Going into.
This report so maybe just any more color on on what else.
On an impact there.
Okay.
Yes, I mean that we'll let Doug.
Got the number six off a few of the items here.
So we've got obviously the FERC are we item that did not come through.
Lower transmission revenues, the New York Storm settlement.
Safety revenue adjustment.
And then we had some other miscellaneous items such as.
A gas penalty item.
Collectibles depreciation.
Production work in progress write off so all of those I would say really kind of combined to to get us to that that reset level that that we've ended up for the quarter.
Okay and can you just provide a little more detail on on the main transmission revenues and.
How.
How volatile that can be year to year and how the.
Turning investment recovery.
Works here in just a little on familiar with with that being such a big swing factor on an annual basis.
Yes, what happened in Maine in the fourth it was really all in the fourth quarter we saw.
The decline in the.
Volume the outflow there went through the transmission lines in.
New England and so we have the share in the regional network service and a decline for that and so in the past.
It's been up and down a little bit and maybe Tony you can talk a little bit about what's going on there I guess, so we're evaluating that right now because the mechanism in Maine, while we're both the ball main in Connecticut is all part of the ISO New England process in Connecticut, We've got to.
A rate mechanism that allows us to.
Recovered through the local loads any discrepancies to earn our allowed return so it effectively acts like a decoupling at doesn't exist in Maine, We're looking at some opportunities right now that.
To to investigate that going forward. There is a process in ISO new England that is underway that changes to the rate structure that would effectively accomplish that same level of stability that we haven, Connecticut right now so it's something we're looking at because we do want to be able to get the variability out of.
This segment going forward.
Great. That's that's really helpful color and then my last one just switching to the renewable side of things can can you just remind us where.
You guys are on a percent.
Contracted basis, and as we think about 2020 guidance, how exposed to ardnamurchan pricing and also.
What.
How much good PPA laser or rolling off next year.
Yes, there was this at the end of.
At the end of 2019 were were 69% contracted and I think the average life with those is about nine in half years, plus we have another 13% in hedges. So it gets us to an all in 82% coverage on our price exposure.
As you move out to the subsequent years that.
Based on where we sit today drops off it then.
Kind of recoveries in the form of new projects coming online that are fully contracted.
So we say in the to 70 plus percent.
Coverage ratio out through at least.
Three years into the future and again that will.
Expect go upward as we move through time.
Okay. Thank you.
Carolyn bone with Evercore ISI your line is open.
Hey, good morning, guys.
I guess I'm just wondering if we could follow up on any cc can you talk about what's sort of option do you guys have you started referendum in Maine doesn't go your way.
Well there is.
There's a lot of moving parts to this and some of it quite frankly, we can't get into.
Theres certainly the ability.
For core challenges depending on the nature.
Of the referendum, obviously, the first and foremost as I mentioned is we're focused on looking at and ensuring that the validity of the signatures that are there, making sure there at least 63000 valid signatures.
But.
This could go in a number of different direction. So it's really hard to to say and Thats why I, what I said earlier was that.
The goal is to start as soon as we have all of our of our permits and we expect that by early early third quarter and we'll assess at that time.
Where all these potential moving pieces are I mean, the the fossil fuel generators in Maine in new England continue to spend significant money trying to kill this project because this project will introduce 1200 megawatts, a clean energy, which means they'll make less on their fossil fuel plants and so.
We've been geared up and continue to focus on.
Helping people in Maine truly understand the benefits of the project.
And making sure that if there is a referendum the signatures to prevail.
Just on that signature point.
Have you been able to actually see the list or do you have to wait until March 4th.
Right now it's in the hands in the secretary of state.
They get 30 days essentially from when they were submitted earlier in the beginning of February So as I said by March to force.
They will come down with their assessment and then we'll have an opportunity there or something you can do in the interim but the reality is our best opportunity when we have that 10 day window.
Okay. Thanks ill will by the middle of March where that referendum is.
Okay. That's helpful. Thanks.
The other question I had was just if you could quantify maybe this is on the renewables business.
If you could quantify what sort of EPS uplift, we should expect from.
You, specifically returning to normal wind production in 2020.
Yes.
So just by way of example.
For our existing resources in 2019, we had a 29.1% net capacity factor.
If you look at a life to date average, which now includes 2019.
Unfortunately, again brought down that life to date average that works out to about 30.2%.
So you've got basically.
1.1% of improvement and then if you go to our sensitivity table.
Basically for every half a percent plus or minus the net capacity factor that represents about four cents per share.
So that should give you some idea of black numbers.
That answer that thank you.
That's it for me thank you.
Thanks, Kim with Goldman Sachs. Your line is open.
Thank you.
Sticking to renewables for a second could you give a little bit more color on as.
Current PHN head just start to roll off and you replace it with new PPS or are your future hedges what type of.
Difference, we could see potentially given what you see today in the market for pricing.
Well the pricing.
When you look at PPA.
They reflect market pricing, but then we their signed up for a little longer terms. So maybe I'll onno can give you the best.
Sense of what's going on with pricing today.
Yes, thank you doing and well I mean, especially when commenting before we have assumed in the range of 70% right now off and long term PPH on our on our assets.
On to Adam we are a 19, our objective is to keep a that percent teaching the rain Chase 70, 75% philosophy ph are coming to an end to aid in the Eagle. We 62, then we can you walk hates we say long term PA again or otherwise when we do would pretty much gently east pony tore forward and all that kind of contracts and volumetric hedges.
Hey, or price hedges and is that continent being DC in DC go back to that range self pay 77, hyper, saying, which is what we are targeting.
But in terms of pricing it so given where the market forwards are we would assume that all else equal to the overall pricing what those hedges are PPS could be potentially a downward trajectory from fourq.
I when you look at at the animal has gone down much mark as they've been down for the last couple of years. So in the forward curves you look at those.
Depending on which ones you look at they show an uptick in the tenures out now how much that reflects in the PPA prices remains to be seeing because you're negotiating those typically and you are responding RF fees are directly negotiating with can customers. So.
As our prices are PPH roll off you'll start seeing a lower average fee a because the higher price PPS are starting to come out and if you look at in.
In the slide we had on page.
Page 40, you can see that the average PVA when from $53 down the 50.6 in 19.
And the merchant prices, mainly when you look at the merchant prices were like $29 for energy in 2018 and down at 27 on average and 19, the bigger change was in the wrecks and the hedges, which dropdown so.
But we're not seeing I don't know fall on all season and differently than and we're not really seeing any big change in prices right now natural gas being low as it is.
Down to what a $1.80 or something right now.
That rule will have an impact on prices in certain markets.
For 2022, I'll, just add that we have.
Yes, nothing really expiring from a PPA standpoint.
So that theres not really in exposure for that year.
Understood.
And then the networks business.
I think I heard you guys say you follow the letter with the Commission stay I don't know if anything is publicly.
Available in terms of filing but does your networks guidance and 22000 beds the.
Settlement terms that you may already know and has been reached and.
Are you able to share in terms of our OEM potential rate base numbers that.
The settlement.
Which reached embedded.
All we filed so far is a letters to the commissions and it is public. It says that we reached a settlement with the staff and other than a few other parties. There are no other terms available at this point.
Yes over the month of March.
The actual settlement document will be drafted so we would expect by let's say the end of March you probably have a.
A document that's public that we'll be able to.
To give you the types of information yes.
Got it but in terms of the guidance for 20, you embedded some portion yes, what you've read yet okay got it yes.
Absolutely. Thank you bye.
Thank you for the last eight months of the year.
Right. Thank you.
Yes.
Jeffrey Campbell with Tuohy Brothers your line is open.
Good morning.
We've had a lot of good specific question someone asked couple of little bit broader ones.
For 2020 renewables are approximately 30% of the positive adjusted earnings per share.
Renewables will also receive about 28% of the 2020 capex versus 47% in 2019 as you look out over whatever time period as appropriate what trends do you foresee for renewables either as a percentage of total adjusted revenues percentage of total capex spend or both or whatever other.
Patrick you prefer.
I think the best way to look at his first off we're going to.
Steve.
Redoing, our long term outlook and we'll have that for Investor day in May so.
I think it's better to comment on it at that point when we as we look to see the future because we're going to be extending the timeframe and we look out probably looking at more or like.
Through 20 to 24 at this point.
So we'll be able to give you a good solid answer at that point on the longer term outlook right now.
I'd say.
As of the.
Long term outlook, we had the last fiscal year ago, It's probably in the same ballpark of 70 30 70 525.
Okay, that's what we're going to updating all that for me.
Right well look forward to that it may thank you.
This is a little bit broader question.
It's probably middling further out in the future of I was just wondering if you are looking at any of your existing when pharmacist candidates for hybrid buildout.
With some of the wind throughput variability would seem like adding solar and or storage might provide a nice boost and it also seems.
Yes, I know we were looking at that one of our wind farms. So all Andro do you want to talk about that a little bit.
Yes, a lot of 80 cents anything that we look at the end generally now when translated what opportunities for hibernation. They are there some markets that are better suited for that.
But at the end DCC Cincinnati see some on oil one by one wind farm, depending on in great capacity and depending on name and land issues on permitting issues, but yes, it's certainly something that today, we look at Chelsea.
Tim Winter with Gabelli Your line is open.
Hi, Tim.
Hello.
In winter your line is open.
Okay. Good morning can you hear me.
Yes, and we got enough.
Okay, sorry about that I have a few questions about the renewable market.
First and your 18 gigawatt pipeline can you talk about.
Are you move that into construction phase to the disease project seem to be contracted.
Then second.
Is there is the market appear to becoming more competitive our margins spinning and then finally.
A dramatic improvement in the renewable IP market or stock market.
Yieldco market, if you will any any thought about creating a yieldco and recycling capital through that.
To that into through an entity like that.
Well, let me deal with a Yieldco first then I'll hano can talk about the other stuff I mean, we always look at ways to be able to financings.
Better.
Use our capital appropriately so.
With a yieldco market doing better it's something to at least think about in the past its not an area that we.
Looked at because frankly, we didnt need the capital that we recycle through Yieldco going forward as we progress maybe assumption this could bear fruit. So it's something we're going to.
Obviously take a look at.
So.
We're keeping that in the back in our minds right now and maybe more on the forefront in as the sutures moves so maybe I'll hydro can talk about the other questions.
Yes, sure and so on the pipeline and right now and we have to mention they presentation. We have say a pipeline up 17.7, gigawatts. So if you see sin city much uniformly distributed among our three year technologies sale into detail bigger on on solar.
On a look obviously they Wayne we develop these by Dynasys tied to align as much as possible and its development and they maturation process, a we see a offtake and opportunities.
Then a what we take a we take investment decisions when Siteone fit both Sanmen development and then a trend name and development in the past Andy on the offering costs are mature enough.
I think it's actually something back and has to do with what we have success about and a selling assets how slow because in some cases, because we cannot build a our food pipelining Colocation said, because I'll say stages of development of some projects or the status of offtake opportunities for then a secular opportunity for us to settle those struthers on NAND rather.
I'm feeling that.
And what about the markets Andro.
You see in any tier I guess, Tim was asking if we've seen any deterioration I don't know that we haven't but.
Well deterioration I I wouldn't.
Call. It that way I mean, we are in May I know they seem to be turn markets, which are retired and maybe holding in different ways. Our commitment area that we're not sure. It may include markets for asking to pack that team they might be commenting to engineer future and other markets that are getting saturated say, where we have been very successful Latin on that maybe we are not meant to be that successful anymore. So manny.
Yes, because dynamics cost based on we obviously and looking at that time out whenever you have a.
Okay, great. Thank you guys.
Thanks, Paul.
Paul Patterson with Glenrock Associates. Your line is open.
Hey, good morning, how you doing.
Okay all morning.
Just.
Two quick follow ups on the FERC.
Are we expectation or you had said that you had no assumption I think I'm just wondering what what does that actually mean I guess.
Basically no decision that would impact 2020 result.
Okay.
Yes.
And then in terms of the new England energy connect have you got any internal pooling.
Quite internal I mean, do you have you guys done any pooling.
On how.
That referendum.
Looks.
With respect to the.
The main yes, we have we do falling on a monthly basis started back in December.
And how does it look.
Obviously that's.
Relatively confidential given the nature of the atmosphere in Maine, but we.
We continue to push very hard through.
Our new England clean energy.
Thats.
Quarter, but to clean energy matters package should say.
Push very hard because.
We think it will make a difference when people truly understand the facts about the project.
And we can demonstrate what's true and what's not based upon some of the.
The misinformation is being put out there.
Okay. So you guys feel pretty confident that if a referendum I mean, I am I understand its quickly that the referendum does make it to the ballot.
That you'll.
Neil.
Tom where the ballot initiative will not prevail.
That's our goal.
Okay.
And just in general how should we think about whats going to start construction before that it sounds like what should we think about the total capital investment that will be.
That will be in place maybe.
By the time by election day I guess.
Yeah, I think what I would say on that is I would defer until we do our investor day in May we'll know a lot more then in terms of where we are things and have an opportunity to update.
The timeline of of expenditures from what we had last put out back in February of last year.
Okay.
And then the new terms or are not public you're not going to share any of them with us.
We can't.
Those settlement discussions Tony unit, better and I are confidential all its been announced is virtually a letter to the ale Jayson set a settlement has been reached and the parties will look to draft. The document were submitted to the commission by the end of March. So you should have that by the end of March once we get into the commission.
Andrew Levy with Exodus point your line is open.
Hey, guys how are you.
Hi, Andy.
Yes.
Just a few questions.
Just on the on the power line.
Do you have any earnings embedded into 2020 guidance.
That a few DC.
Yes, theres some theres, some but it's not much at this point right.
Like five Sir.
I think last year, when we did the long term outlook, we had 24 million pretax and that assume we were going to spend.
Over 100, 300 plus million in this year, which that is not going to happen. So I think it's an as Bob just said on the last call. It.
You know, we're going to update things in the Investor day in May, but we have very little embedded into our outlook right now.
Okay.
And then.
As far as.
Salad initiative itself any cool is about 50 60000 votes that kind of R&D, yes folks that are needed to kind of get it passed our unique needs 60 to 63 six these are needed to basically 10% of the number of people that voted in the previous selection. This at the little over 63000.
And.
Valid signatures submitted about 75.
Not the signatures I'm wondering how many like folks like silhouettes doing it.
Oh, it's a it's a majority so majority vote at the majority, okay and election day would be a majority vote.
Okay, so over 50% and.
And then just to make sure that I'm using the right base for.
To grow off of.
The 2019, I guess had about 32 cents of onetime.
Gains in is that right and then you had some storm storm issues that you might get back.
But is it kind of like $1.90 ish type of the clean number.
So we should be thinking about.
That's a 19 starting point and then thanks after backing out 12 cents to one timers 20.
You're kind of clean base is around 215 ish.
Now just rounding up.
I mean, it and yet in terms of 2019, I'd say you you've identified the big item, we've got to 32 cents for the asset sale.
In 2020, we assume five cents so year over year that would be about a 27%.
Differential.
In terms of.
Other items in 2019, we've had different pluses and minuses that throughout the year that pretty much I'd say add up to four net out.
So no major net positive or negative.
So.
Largely just use that as a.
Penalties.
Transmission is one item that we talked about today.
That was a downside for 2019, we we expect to see a better past next year, we had some penalties in.
In New York.
Penalty.
Along with the negative revenue adjustment.
On the positive side, we had an asset retirement obligation adjustment in renewables that we would not expect to recur. So those help to count somewhat wash against one another.
Asher Khan with permission your line is open.
Hi, My my questions have been on some thank you.
Okay.
Praful Mehta with Citigroup Your line is open.
Struggling your line is open.
There are no further questions at this time I would now like to turn the call back over the presenters for closing remarks.
Okay, well. Thank you everybody for listening today and for your questions should you have more on Trudeau contact our investor relations team. So.
Mystic about how things are going to go with the particularly at the rate cases being resolved and so now we can will have a few challenges this year, but I think we're positioned very well for the future. So thank you all for your participation.
This concludes today's conference call. We thank you for your participation you may now disconnect.