Q2 2020 ONE Gas Inc Earnings Call
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Yeah.
So Mike.
We appreciate your patience.
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Yeah.
No one Josh second quarter earnings Conference call Today's conference is being recorded.
That's kinda conference over to Mr.
Go ahead Sir.
Good morning, Thank you for joining us on our second quarter 2020 earnings Conference call. This call seemed webcast live in a replay will be made available later today.
After I read your prepared remarks, we'll be happy to take your questions.
A reminder, about payments made during this call that might include one gas expectations or predictions should be considered forward looking statements and are covered by the safe Harbor provision on security checks 1933, and actually 34.
Actual results could differ materially from those projected and any forward looking statements that include among others statements about the wife, the severity of a pandemic or other health crisis, such as the outbreak of covert Nike.
Our discussion of factors that could cause actual results to differ please refer to our FCC filings.
Joining us on a call. This morning are Pierce Norton, President and Chief Executive Officer, Karen Longhorn Senior Vice President and Chief Financial Officer, Gerstein, Senior Vice President and Chief Commercial Officer, Instead, Mcnally Senior Vice President and Chief operating Officer, and now I'll turn the call over to Karen Thanks Brendan.
Good morning, everyone yesterday, we announced that we have reaffirmed our 2020 earnings guidance, which was originally issued on January 21st 2020 with net income is expected to be 186 million to 198 million, but the midpoint of 192 million diluted earnings per share at $3 44 sound.
$3.58 at the midpoint of $3.56.
I will elaborate on that in a moment, so well first would you probably like from the quarter.
Net income for the second quarter was $25.3 million or 48 cents per diluted share compared with $24.5 million, a 46 cents per diluted share in the same carried totaling 19.
Second quarter results reflect an increase not margin of $2.8 million over the same period last year, which includes new right in Kansas, and Texas and a net increase in a number of residential customers.
The increase in net margin includes a reduction of $1.9 million due to lower late payment, we connect and collection fees primarily related to the moratoriums on disconnects from on payment due to cope with my team pandemic.
Operating costs for the second quarter once you point $7 million higher than the same period last year.
Sensors related to present or the main driver of the increase which includes at 3.2 million dollar increase in bad debt expense and a 2.2 million dollar increase due to cost related to a response to cope with my team.
Offsetting a portion of those costs increases is a reduction in expenses of $1.7 million for travel due to restrictions put in place because it depends at Nike and at $1.1 million decrease in employee related costs.
As you never call, our nonqualified employee benefit plans impacts the operating cost, which reflect the expense associated with planned liability as well as other income or expense, which reflects the increased or decreased and the value of the associated and that's not.
We've experienced quarter to quarter swing and the net income impact of these plans in 2020 that was primarily driven by volatility in the financial markets. However, on a year to date basis, the impact is not material.
We now have covenant like a tiny motors for all jurisdictions, but as of June 30, yet we have not recorded any regulatory assets for financial reporting purposes.
Although there are nuances among the state he's order or just generally allow us to differ for regulatory accounting purposes, net incremental expenses and certain lost revenues due to covered 19th.
And once you recorder regulatory alphabet financial accounting purposes, we not identify and quantify a mouse that qualified for regulatory treatment in accordance with the accounting order. In addition, we must conclude such an out of probable of recovery.
This evaluation is ongoing.
Our capital expenditures and also legal costs increased $16.4 million this quarter compared with the same quarter last year due to both system integrity activities, including government relocation projects and extension of service to new areas.
Authorized rate base.
Watching our recent regulatory activity.
Proximally $3.71 billion as of June Thirtyth.
Authorized rate base is defined as the rate based resulted in completed regulatory proceedings, including full rate cases and interim rate filings.
We projected for 2020 are estimated average weight very well just to find an authorized rate base plus additional investments in our system and other changes the components of our rate base that are not yet reflected an approved regulatory filings will be approximately $3.91 billion.
42% in Oklahoma, 29% in Kansas, and 29% in Texas.
In April we issued $300 million of senior notes to 2030 at a coupon of 2%.
The proceeds from the issuance was used primarily to reduce our outstanding commercial paper balance.
We ended the quarter with adequate liquidity, which includes nearly $470 million of capacity in our commercial paper program and all the capacity under our $215 million 354 day credit facility.
The one gets board of directors declared a dividend on July 20th of 54 cents per share, which is unchanged from the previous quarter.
Dividend, it's consistent with our guidance for 2020.
Moving onto a financial Biden.
You'll recall that last quarter, we indicated we could be below the midpoint of our earnings guidance range at that time, we were still in the early stages of dealing with a pandemic.
Three months later, we have an additional quarter, an actual results behind us as well as more insight into how the pandemic is impacting one yeah, both financially and operationally as well as our customers.
Although there are still uncertainty we believe we're on track to a cheap results in line with our original guidance for 2020.
Our reaffirmed earnings guidance does not assume that we will record any regulatory assets for financial reporting purposes.
He wants to be accounting works, we have received addressing the impact I've covered 19th.
We are also updating our expectation of a capital expenditures, including people call.
We are increasing our estimated capital outlay or 2020 to a range of 500 million to $525 million.
My original guidance of $475 million.
This increase is primarily due to extensions at Starbucks and new Pepsi North in Texas, and Oklahoma above the levels, we had anticipated.
Now I'll turn it over the course, both commercial uptake.
Thank you Karen and good morning, everyone.
First I'll provide an update for an overview of recent regulatory activity and then provide an update on the impact of cold at night gene on our commercial activities.
Oklahoma Natural gas filed a performance based rate change filing in February requesting an increase in base rates of $11.8 million unanimous settlement was reached at a joint stipulation was filed in June but included a base rate increase of $9.7 million.
Oklahoma Corporation Commission issued an order approving the joint stipulation and new rates became effective in June.
Texas gas service made a grip filing in March for all customers in the West, Texas surface area for an increase in rates of $4.7 million and new rates became effective in June.
Texas guest service also filed a rate case in December for all customers in the Central Texas Gulf Coast service areas.
Seeking a rate increase of $15.6 billion and requesting to consolidate the two service areas.
In July the administrative law judge issued a proposal for decision and recommended that the Railroad Commission approved all terms are they jumped 23 million dollar unanimous settlement.
Based on an authorized return on equity of 9.5%.
Capital structure was 59% equity.
They fail Gerry also recommended approval of teach you asked as requested consolidates the two jurisdictions into a new central Gulf service area, which the cities have opposed.
If approved new rates are expected to become effective in the third quarter of 2020, and our jurisdictions in Texas will be reduced to five from six.
Kansas Gas service will file I guess system reliability surcharge or G. Srs in August for the period covering.
July 2009 came through June 2020.
This filing of the represents our first filing under the revised G.S. RF statute that will include 12 months of capital expenditures.
Moving onto our commercial activities, we have approximately 12000 transfer customers on our system that represented $114 million or 12% of our net margin and 29 cheap.
Our 40 largest transport customers accounted for $28 million or 25% of arc 2019 transport revenues.
I mentioned during our first quarter analyst calls, but two of these customers wanting the automotive industry and one in the residential shingle business the temporarily suspended operations.
During the second quarter, both of those businesses resumed operations and then June at transportation volume volume's comparable to the same period last year.
Outside of our 40 largest transfer customers. We have approximately 30 other businesses that have reduced operations were temporarily or permanently suspended operations.
Based on their current level of business activity, we are experiencing a negative been impacted transport revenues of less than $50000 per month.
Which is an improvement from the 100000 dollar per month impact I described during our first quarter earnings calls.
Year to date, we have averaged approximately 21000 more sales customers than the same period last year, which is partially the result of the moratoriums on disconnects.
During the second quarter that worked Rams expired in Oklahoma, and Kansas, and we resumed our normal collection activities, including disconnecting delinquent accounts for non payment.
The moratorium on disconnects in Texas has been extended until August yeah.
In all three states, we've continued our customer outreach programs to offer customers with delinquent bills alternative payment arrangements. If they are not able to bring their accounts current.
We have also been working with various social service agencies to help our eligible customers received financial assistance.
Finally, construction activity with our builders and developers has remained robust through the first six months of 2020, including single and multifamily construction as well as commercial developments.
The positive trend in growth capital spending to support our builder and developer network resulted in an increase in capital expenditures for the first half of 2020.
It is the primary driver behind our increase in full year capital spending that Karen described.
Now I'll turn it over to sit.
Thanks Cartus.
Operationally, we continue to adapt and adjust our work is needed to continue to reliable service our customers expect while keeping our employees and customers say during the pandemic.
Thanks to the focus of our team in the field and the support provided by our employees across the company. We are currently on target or ahead of target and meeting our performance goals for maintenance and compliance work.
While we continue to monitor workforce availability today, we have not seen levels of absenteeism that impact our ability to execute work plans.
We credit this performance import to this itself of the protocols, we established in consultation with our third party medical consultant that allow any employees and there's concerns about a potential exposure or is experiencing coded like symptoms to quickly access guidance for medical screens.
Keep in potentially impacted employees corn gene to protect them and their families and to avoid spread in our workgroups.
The success of this program to date is in the numbers about 3640 employees 42 tested positive through June Thirtyth.
These positive test approximately 50% where employees working in field.
Our supply chain has also function smoothly and we've not seen any disruptions in our ability to procure materials.
Our supply of P.P.E. remains at target levels, and we maintain open supply channels and use that as an unforeseen increase in demand.
As you saw in the earnings release, our capital spend is ahead of last year, both the system integrity and growth.
Projects have been shovel ready due to the work of our engineers and designers and the work executed by third party contractors has also gone uninterrupted.
Our 24 months system integrity planning process allows our organization to accelerate or decelerate the capital workload from month to month Flushing scheduling is necessary.
As a reminder, we continued to see a 20 plus year runway for replacement the vintage material.
Thanks to the work of our health and safety and I teams.
Work to covert 19 related changes in our service territory and have created a structure that relies on the most recent medical information to determine the appropriate level of customer facing service work and like you have construction activity in the field.
This approach allows us to quickly react to changing circumstances scaling work up or down as we assess the best path to execute our work in a way that provides a safe environment for our employees, our customers and the public and now I'll turn it over to peers.
In closing today.
As we all continue to adapt to the changing environment brought on by Cold did not seen pending.
A lot the resilience an incredible work ethic of our employees and what they've shown.
We're taking advantage of our previously deployed technology and new technology had an exceptional right.
Continue to monitor trends in a variety of data points to make choices on how best to keep our employees and customers say.
And we're looking ahead and planning what could happen and how will handle it in the midst of adversity. Our employees continue to show their dedication to our core values and mission every day.
As a natural gas utility we have an important role in serving our communities. We're working to help ensure all of our customers have a choice to access affordable reliable and environmentally friendly natural gas.
Finally, I'd like to thank our one gas employees for staying vigilant in our safety protocols.
Our share commitment has allowed us to continue to operate with minimal disruptions from our customers.
I'm extremely proud to worked alongside our team and want to send a special. Thank you to every employee for their tremendous work being done to meet the demands of working differently during dependent.
Thank you for joining us this morning, operator, we're now ready for questions.
Yes.
And if anyone asking question.
On your telephone keypad.
Speaker phone.
Function is turned off.
Hi, Matt.
Once again start.
Asking a question.
Just a moment.
Well take our first question from.
With Guggenheim partners.
Hey, good morning, guys.
Morningstar.
Just a couple of quick easy ones force the Capex increase in 2020 for custom of World.
Some pretty good volumes fundamentals should there be directly to 21, and how does that increase in consumer can help create some some of that hadn't for bills on existing company.
You bet, a potentially the flux and 21 as well as 2020, so how do we looked at the fundamental today that higher numbers to higher capex and trying to correlate it next year.
This was Curtis great question.
Then over the last a.
Really 18 months to two years been seeing a little bit stronger customer growth across our system.
Capital that we have been spending has been extending a service lines into new areas as our builders and developers have been very active and so part of what we're seeing here in 2020 is the build out of a lot of those sub divisions and we continue to see a future build out in the sub divisions as well so.
Again, we have been seeing an upward trend in our numbers of new customers.
So.
So we could see a similar capex flux next year just given.
The demographics and the cool.
Yes.
We haven't given the updated that guidance, yet, but keep in mind, even that the guidance that we've just updated its a an increase of about 20 to 25 million on a 475 million base. So it is a little bit of an uptick but not a a major trends move or I guess I would I'd put it in that.
Perspective.
Oh, and then just lastly, given the weak hmm easier today, but what level of Costa floral and cost savings are being contemplated for 2020, and how does that bridge to your we affirmed guidance.
Okay.
That's right. This is Karen as senior talking about how we're thinking it because it impacts on 2020.
We have as we mentioned.
We have not assumed that we will be able to establish fall for financial accounting purposes, and the regulatory outside so we don't have any offsets.
Anticipated in 2020, and we laid out what we'd have experience. So far through 2020, you know in art in our highlights for the quarter.
So as we think that going forward do you have some uncertainty still part of the top Cartus described the impact of transportation customers, adding a little bit less than we anticipated that being the first quarter.
We've talked about the gross capital we've been managing our expenses. So all those things have been taken into consideration as we think about our 2020 that could result in our guidance.
Got it that's that's all the questions have thank you very much.
Thank you sure.
Our next question from.
No.
Right.
Everyone.
Thanks for the Chris.
Hey, thanks for the out of color today and for taking my questions.
I guess to follow up maybe on to that last point Kinda Karen you had detailed the fact that.
The headwinds anticipated maybe three months ago on the financial performance are now not viewed to be as problematic and.
You mentioned, having additional quarter under your belt Curtis mentioned some of the drivers of you know resumed activity in your service territory, but I'm just wondering if you could expand a little bit is it just.
You know a confluence of various small things at an aggregate.
The situation less problematic or was there any particular sort of single item that you've been fearing that maybe is tracking much better just I guess, a little bit of better appreciation from my perspective on on what's causing the improved outlook.
Sure Chris So I think that's the main items, we thought about where our regulatory filings.
We were concerned at the end of first quarter. That's a procedural schedule may not stay on track they largely did stay on track those are.
Well have more had been concluded the we're still waiting on the approval of the Relet Commission on the Central Texas and Gulf Coast rate cases.
With that has largely gone up half a consistent with our expectation.
So we've already talked about the transportation revenues that impact.
The work in the field has continued with minimal disruption that's for capital work and for our NIM works, we've had no significant supply chain or workforce disruption.
You talked about our gross.
Capital a bit we had some concerns that he was the first quarter about whether we might see some slowdowns and permitting that might impact that work that has not materialized.
Also the academic economic impact of the pandemic has not adversely impacted customer interest in new connections. So that's remains strong.
And then we've also had as at the first quarter, we had an adverse impact from our nonqualified plans due to market activity that has reversed itself. So relative to last year. The impact is it's not material.
That's the kind of the big drivers and then as you mentioned there are a number of smaller puts and takes a that we've also had considered as you thought about guidance for 2020.
Yeah that is a great Linda thank you for that Karen and I guess on a on a related note you know you'd mentioned no expectation record any covered related regulatory assets. I guess can you remind me you know obviously at the time of your first quarter call you Hadnt yet have.
Procedures plans in place or re filing rate approvals and all the jurisdictions, but.
Did you assume at that point, you would make some and if if there's going to change there I guess, what's the drives back that less than your expected you mentioned some of the economic impact on your service territory, maybe being less than maybe you had been concerned about or are you better able to offset costs I'm.
I'm just curious if it was a change in if it was what was maybe driving that.
So I've into first quarter getting your why we only had one.
States regulatory orders.
In hand.
Ah we now have all three of them.
But there so they're not clear cut.
So there's still some judgment there has to be applied in terms of when you identify and measure those incremental costs, making sure that that's consistent with expectations of the order and then again they've got to be probable ever Calgary. So our thinking about that hasn't changed it's not that we think that bad debt expense is going to be less than we thought it.
Just that it's the requirements to be able to record does regulatory assets as we haven't met that hurdle, yes, but the timing issue.
Okay Crucifixes Peters, though.
Chris. This is fear is the only thing I'd add to that is that you.
You basically kind of look at the cost that Cove. It has a kind of gone into the operating expenses and you look at what you'd normally do it on the operating environment, where you had transportation across our territories, that's pretty much been shut down due to cover that team that was pretty much offset one another.
So then you really focusing on your your bad debt. It's nothing we don't think we will eventually have some accounting accrual it shifts that you need more clarity before you can take it.
Okay, Yeah, and clearly theres like we've talked about the fact that there's been a lot of stimulus put in People's hands. Thus far this year with regard to you know late filing of tax returns.
What are the stimulus jacksonian unemployment benefits and this is federal gross up on top of that.
So I'm just kind of curious if you just haven't maybe seen impacts that you'll see later on if some of those support programs Peter out.
And if that was sort of part of your calculus.
It sounds like you might be but it's still want to karen's point, it's a timing issue or wait and see and then there's.
Specific to the regulatory orders that need to be ironed out I guess in your treatment because that is that correct understanding from my perspective that that's correct to Chris It. It really you said it well to timing issue.
Yeah Okay.
Okay. That's all I get final question for me is just you know with regard to the exemption kids U.S. will have from Kansas State income taxes next year I guess.
Utility in Kansas, how that might affect the operating cash flow I'm, just remember in that with tax cuts in jobs Act at the federal level, we did see some modest headwind because you're collecting out of statutory rate on a cash line. It wasn't before the statutory rates I'm just.
Great level is there any such laggard Delta, we should be mindful loans in our modeling.
This is Karen.
Back to significant impact at all we expect that he.
Condition will order a reduction in rates beginning in January for that but then our tax expense will go down or we should not have an impact we will be refunding. The excess 80, I see a we've recorded 81 and a half million dollars that exercise the I.T., but that won't start until our next Kansas right.
Okay wonderful. Thank you guys very much for all the kind of its one I'd appreciate it.
Thanks, Chris stays like.
You did.
Well now.
Simon.
<unk>.
Hi, Good morning, everyone. If I could just maybe turn to kind of lost revenues and I know you talk about the transportation revenues from several of your industrial customers.
Kicks off a which states or potentially crack and you are probably four or lost revenues and going forward.
Certainly on the residential saga, we ought to look for maybe in terms of I don't know excessive conservation going forward during the winter heating season that you're so we're looking out for especially the covering the future.
Okay. This is curtis.
Few questions there I'll try to hit each having that if I forget one fully back in.
First one on.
The lost revenues in the different different states in which of these allow us to recognize that we have some disclosures in the press release about the impact that had honest in the first quarter.
In the in the state of Kansas lost revenue related to these different items included and then some degree waived fees.
Either late payments are reconnect fees or are covered and all of the state. So again I think this falls into the category of was Karen was describing earlier as it relates to a we're tracking those items, but.
It's really a timing issue as to whether those items would get recognized or not.
As it relates to your last question around conservation.
Whether we might see that you know we have a very high level of fixed fees. So outside of our transport customers were not as volume metric sensitive as as a as we have been answered in the last several years were about 72% fixed fee on our sales customers.
There's not a large exposure to that and then the environment that we're in a very low gas price environment I don't know that we would necessarily forecast a high conservation impact that would impact it would have an impact on those variable fees.
Lastly, I know you had a let's take a third question in their help me with that one.
So I think.
Okay. Thank you maybe if I could just follow up in terms of the.
Kinda process here for the someone who decided to quote some regulatory assets.
What each state is telling you this or separate truck terms.
<unk> expenses and those are going to be rolled into a week since I'm just curious what the processing time.
<unk> gave this was courtesy <unk> have a little bit well hard time hearing your question could you ask that again.
Sure we've ever done.
<unk>.
Yes.
Great. So I was just asking just in it for the if and when you're going to reestablish regulatory assets just see the process and the timing from what you're hearing from various conditions.
How about is gonna take place to do the full blown route to serve their stuff with trucks, who might be able to just.
Kind of take care of the covert alluded stuff on specific line specifically specifically.
Okay. A couple of things first off we're filing at Oklahoma next year, we're required to.
Under our PBR mechanism to file a full rate case, so that'll be the the first one that where we address it it is that a 100% prescriptive in the other two states. There is some flexibility for consideration outside of a full rate case, but it remains until we start having for.
There are discussions with our regulators about that and I think that will be dependent more up on how we see the pandemic unfolding and do we like into the environment that we're in today.
Not going to be in front of those commissions asking them to to start that process right now nor would I expect that they would expect us to do that so.
It will still be a little while before those processes start and that will give us better clarity that will not only answer the questions. You were asking but also earlier in terms of the accounting treatment is how well recognize those will get better clarity as this business goes along.
Thanks, Chris.
Our next question summer Richard Chicken.
Yeah.
Hey, this is harried pollens on.
Two quick ones.
Incremental capex.
The 2020.
On the bus after a year or how the timing.
Recovery on that a lot of due to the bottom line there.
He said.
Maybe just gotta jumped 70% the capex between Agadi placement.
So a couple of points and Karen can provide some more more color on your 70% question, but so it depends on the type of capital. It is when its connecting new customers and those customers began service then our revenues are impacted us.
Point in time.
All the other capital as well as that capital to go into rate base. It has to be an interim rate filings like a grip bridge, you Srs or PBR.
Or it has to go through a full rate case. So I think it's kind of a combination of those things the growth capital is when that customer starts a starts their service and then the others go through the full rate case.
So then Karen can talk about how that impacts our total capital spend.
So we we indicated that about 90% of our annual capital spend and given year is covered in a regulatory filings that is unchanged with this increase in gross capital guidance for 2020, it's largely capital related to Texas, and Oklahoma, which will get covered on an annual filing if it were Kansas.
He is a light until I got covered in a rate case that most of this gross capital increase coming from yet.
Got it helpful.
Just one more Ah you talked about.
Your long term growth.
Outside of natural gas.
Our GE and I'd again, but a couple of repayments.
Do you have to make some progress on the that's one of the do your thoughts about nothing so.
[noise] working capital.
So we do a on the RMG front. This is Curtis again.
On the RMG fraud, we do can are continuing to pursue different projects around that I wouldn't say that any of those projects are in a spot where we're we're prepared to give capital guidance or financial impact of any of those at this point, but there are a number of discussions going on.
With various various parties enter service territories.
Got it thanks, and I think just sneak one more in that.
Talk about your thoughts on M&A basis, and that's drilling company.
So interest and staff that that regulated to be less.
So again.
I thought that M&A.
This is peers. So I'll take that one is the a bolt on M&A really haven't changed.
We continue to execute on the five year plan that we have.
And what's what's in front of us and we.
Continue to think that that's probably the best thing, but for our shareholders. So as far as those comments.
Well, they don't have anything else to say, but we're executing on the plant.
Awesome. Thanks, so much guys.
Thank you.
[laughter] question will come from.
With.
Good morning.
Good morning, I guess.
I have a follow up question on bad debt.
The historical bad debt as percent of revenues and what was that into Q and what you're seeing in July de happened in metrics that youre tracking and how they are shaking out.
Good morning, I had this is Karen I don't want number at my fingertips, but all the information to talk to like that is provided in our information you can get our provision for doubtful account on the cash flow statement I worked up about we'll see what about $1 million relative to last year or in Sydney three three too.
What you from last year, and then revenue obviously on the financials as well we wouldn't when we look out. It you know what was that this on the task you account.
And the performance and other accounts and that's working as we think about what our allowance.
Perfect.
Any pressure in our lease from low interest rates and if you go for that process.
You are falling beat up for the group has increased the past few months could that helped offset the negative impact from loan right.
Your thoughts on that.
Hi, Good this is Curtis and.
The one I would point to is our most recent general rate case, and the Central Texas and Gulf Coast service areas.
Are we had the unanimous consent with a nine into half.
Percent allowed our early in the 59% cap structure in that filing.
That's our most recent data point.
Okay last one it's really on timing.
Is there any update there.
She anything on ATM this year.
Hi, guys. This is Karen I don't have any updates on to the guidance that we provided you saw that we issued a few shares a in a second quarter that don't have any updates were not deviating from our the parameters of our original guidance.
Thank you.
Okay.
Well take our next question from Brian.
Right.
Hi, good morning.
Morning, Brian.
Just a follow up on.
It's all under the ATM and so you still forecasting $43 million.
With that program.
So Brian this is Karen the guidance that we provided was how much equity we expect to issued 320 24, we haven't provided guidance on any level for any particular here other than what we factored into our guidance for outstanding diluted shares in 2020.
Okay.
Understood.
And then just curious the.
How much additional investments are you able to capture cancers.
Our S filing now that it didn't extend it to encompass 12 months.
<unk> investment.
Brian. This is Curtis will we will be making that filing next month. So we're in the process of the final reviews in that and that and pulling all that data together I'm, sorry, I'm not they'll have a filed number yet to give you, but there are additional items that qualify.
That did not previously so.
Certain things like physical and cyber security cost and then expanded.
Definition of safety related expenditures, all rolling into that as well as an increase.
And the impact that it can have on the customers monthly bills. So all of those are will then you saw some of that impact last year. When we had a partial year filings and the impact of that so I think will.
Again, we'll we'll be prepared to share more of that once we make that filing in August.
Okay. So just to clarify for the statute how many months.
Investment capture.
As far as filing.
Was there any timing lags just want to get sensor.
How much do continues to tell Bobby.
Parents structural lagged it.
Cancers relative to.
Oklahoma and Texas.
So it is a it's covers a period of 12 months and so the filing will make in August will be capital stepped through June thirtyth of 2020.
This will be the first one that covers a full 12 months last year's partial year filing covered all capital that went through June 30 of 2019.
I think if you're trying to look more broadly as Karen made the point earlier that 90% of all of the capital we spend.
He is now subject to an annual filing.
Had previous to the GE Srs Amendment that number was about 80%. So we've seen about 10% more of our capital qualify for an annual program as a result of of that legislation.
Very helpful. Thank you very much.
Thanks, Brian right.
Once again start.
Asking a question.
Well pause for just a moment.
Parents there no further questions at this time, let's turn the conference back over to our presenters for any additional color closing remark.
Thank you all again for your interest one yes, our quiet period for the third quarter starts when we close or books at the end of September and extends until we release burnings in early November will provide details on the conference call later date have a great day.
Once again that the today's conference. We thank you all for your participation you may now that's kind of.
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