Q2 2024 Spire Inc Earnings Call
Operator: Good day, and welcome to the Spire Fiscal 2024 Second Quarter Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Megan McPhail, Managing Director of Investor Relations. Please go ahead.
Good day and welcome to the spire fiscal 'twenty 'twenty four second quarter earnings call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an.
<unk> to ask questions to ask a question you May Press Star then one on a touchtone phone.
I would draw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Megan Mcphail.
Megan L. McPhail: <unk> director of Investor Relations. Please go ahead.
Megan L. McPhail: Morning, and welcome to Spire's Fiscal 2024 Second Quarter Earnings Call. We issued an earnings news release this morning, and you may access it on our website at SpireEnergy.com under News. There is a slide presentation that accompanies our webcast. You may download it either from the webcast site or from our website under Investors, and then Events and Presentations.
Megan L. McPhail: Morning, He was inspired fiscal 2024 second quarter earnings call.
Megan L. McPhail: He was released this morning, you may access it on our website at Fireeye.
Megan L. McPhail: Yeah.
Megan L. McPhail: There's a slide presentation that accompanies our webcast and can be downloaded from the webcast site or from our website under investors and then events.
Megan L. McPhail: Before we begin, let me explain our Safe Harbor Statement and use of non-GAAP earnings measures. Today's call, including responses to questions, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although our forward-looking statements are based on reasonable assumptions, there are various uncertainties and risk factors that may cause future performance or results to be different than those anticipated. These risks and uncertainties are outlined in our quarterly and annual filings with the SEC. In our comments, we will be discussing net economic earnings and contribution margins, which are both non-GAAP measures used by management when evaluating the performance and results of operations. Explanations and reconciliations of these measures to their GAP counterparts are contained in both our news release and slide presentation.
Speaker Change: Before we begin let me.
Megan L. McPhail: Our safe Harbor statement.
Megan L. McPhail: GAAP earnings measures.
Speaker Change: Today's call let me respond.
Speaker Change: Just two questions may contain forward looking statements.
Megan L. McPhail: Securities Litigation Reform Act.
Megan L. McPhail: Although our forward looking statements.
Megan L. McPhail: Or based on reasonable assumptions.
Megan L. McPhail: There are various uncertainties and risk factors that may cause.
Megan L. McPhail: <unk> four results to be different than those anticipated.
Megan L. McPhail: These risks and uncertainties are outlined in our quarterly and annual filings.
Megan L. McPhail: Sure.
Megan L. McPhail: In our comments, we always got to economic earnings and contribution margin, which are both non-GAAP measures used by management.
Megan L. McPhail: Herman.
Megan L. McPhail: Operator.
Megan L. McPhail: Explanations and reconciliations of these measures.
Megan L. McPhail: GAAP counterparts.
Megan L. McPhail: Our news release and slide presentation.
Megan L. McPhail: On the call today is Steve Lindsey, President and CEO; Scott Doyle, Executive Vice President and COO; and Steve Rasche, Executive Vice President and CFO. Also in the room today is Adam Woodard, Vice President and Treasurer. With that, I will turn the call over to Steve.
Megan L. McPhail: On the call today is Steve Lindsey President, Joe Scott Doyle Executive Vice President and CFO.
Megan L. McPhail: Steve Rasche Executive Vice President and CFO also in the room today is Adam Wunder, Vice President and Treasurer.
Steven L. Lindsey: With that I will turn the call over to Steven.
Steven L. Lindsey: Thanks, Megan. And good morning, everyone. Thank you for joining us today for a review of our second quarter performance and an update on recent developments and prospects. Let's start with our quarterly results. This morning, we reported fiscal second-quarter net economic earnings of $3.45 per share, compared to NEE of $3.70 per share a year ago. The year-over-year decrease was driven by a few key items, including lower usage in Missouri due to significantly warmer-than-normal weather and higher interest rates.
Steven L. Lindsey: Yes.
Steven L. Lindsey: Thanks, Megan and good morning, everyone. Thank you for joining us today for a review of our second quarter performance and an update on recent developments and outlook.
Steven: Let's start with our quarterly results.
Steven: Morning, We reported fiscal second quarter net economic earnings of $3 45 per share compared to any of the $3 70 per share a year ago.
Steven: The year over year decrease was driven by a few key items, including lower usage in Missouri.
Steven: Warmer than normal weather and higher interest expense, Scott and Steve will discuss our results more in detail in a moment.
Steven L. Lindsey: Scott and Steve will discuss our results in more detail in a moment. Our results reflect our dedication and commitment to serving our customers and communities with safe and reliable energy. And we continue to execute on our strategy to grow our businesses, invest in infrastructure, and drive continuous improvement to deliver value over the long term. Having a diverse portfolio of natural gas businesses enhances our ability to provide value. Further, consistent with our Board of Directors' focus on strong oversight and governance, last month we announced the election of Sherry Cook as the newest addition to our board. Her extensive business experience and leadership in human resources, along with her background in economics and finance, will be vital as we execute our strategy.
Steven: Our results reflect our dedication and commitment to serve our customers and communities safe and reliable energy.
Steven: And we continue to execute on our strategy to grow our businesses invest in infrastructure and drive continuous improvement deliver value over the long term.
Steven: Having a diverse portfolio of natural gas businesses enhances our ability to provide value.
Steven: Further consistent with our board of directors focus on strong oversight and governance last month, we announced the election of Sherry cut is the newest addition to our board.
Steven: Her extensive business experience and leadership and human resources.
Steven: And her background in economics, and finance will be vital as we execute our strategy.
Steven L. Lindsey: Her presence and involvement throughout our Alabama service territory further ensures that we remain connected to our communities we serve, and I look forward to working closely with her in the future. Before I wrap up, I would like to highlight the important role that natural gas plays and will continue to play as part of America's sustainable energy future. Approximately 200 million Americans and businesses use natural gas because it's affordable, reliable, and safe. In fact, according to the American Gas Association, households that use natural gas for heating, cooking, and clothes drying save over $1,100 on average per year compared to homes using electricity.
Steven: Our presence and involvement throughout our Alabama service territory. Further ensures we remain connected to our communities, we serve and I look forward to working closely with her in the future.
Steven: Before I wrap up I would like to highlight the important role that natural gas plays and will continue to play as part of America, a sustainable energy future.
Steven: Approximately 200 million Americans and businesses use natural gas, because it's affordable reliable and safe.
Steven: In fact, according to the American Gas Association.
Steven: How old that use natural gas for heating and cooking and clothes, drawing save over $1100 on average per year compared to homes using electricity.
Steven L. Lindsey: Together, natural gas utilities across the country, including Spire, continue to invest billions of dollars in capital each year to enhance the natural gas distribution and transmission system. As an industry, we can be proud of the important work we've done in modernizing infrastructure and deploying technology that has led to increased safety, efficiency, and reliability for natural gas customers. To sum up, we are well positioned for success in the second half of fiscal year 24 and over the long term as we execute on our robust capital investment plan to support the growth and performance of our utilities and our gas-related business.
Steven: Together natural gas utilities across the country, including spire continue to invest billions of dollars of capital each year to enhance the natural gas distribution and transmission systems.
Steven: As an industry, we can be proud of the important work we've done in modernizing infrastructure and deploying technology and has led to increased safety efficiency and reliability for natural gas customers.
Steven: So we're well positioned for success in the second half of fiscal year 'twenty four and over the long term as we execute on our robust capital investment plan to support the growth and performance of our utilities and our gas related businesses.
Steven L. Lindsey: Spire is a strong and well-positioned company with a proven growth strategy. We have confidence in that strategy and in the ability of our experienced management team and employees to successfully lead us into the future. With that, I'll now turn the call over to you, Scott. Thank you, Steve. And good morning, everyone.
Steven: As far as a strong and well positioned company with a proven growth strategy we have.
Steven: It's in that strategy and in the ability of our experienced management team and employees to successfully lead us into the future.
Steven: With that I'll now turn the call over to you Scott.
Scott W. Dudley: I'd like to begin by thanking our employees for their hard work and continued focus on maintaining safe and reliable natural gas service to our customers through the winter heating season. I am extremely grateful and proud to be a part of the Spire. Now, an update on the gas utility. Our commitment to strong operations and continued modernization of our system was visible when we were well positioned to deliver safe, reliable, and affordable natural gas energy for our customers and communities who depend on this resource as a critical energy need.
Scott: Thank you, Steve and good morning, everyone I'd like to begin by thanking our employees for their hard work and continued focus on maintaining safe and reliable natural gas service to our customers through the winter heating season.
Scott: I am extremely grateful and proud to be part of the spire team.
Scott: Turning now to an update on the gas utility segment.
Scott: Our commitment to strong operations and continued modernization of our system was visible when we were well positioned to deliver safe reliable and affordable natural gas energy for our customers and communities depend on this resource is a critical energy need.
Scott W. Dudley: We remain focused on driving efficiencies throughout the organization, including streamlining systems and processes and maintaining an unwavering commitment to operational excellence. On the regulatory front, in Missouri, we were pleased with the constructive outcome in our recent filing for an updated ISRIS, our semi-annual capital recovery infrastructure rider. Last week, the Missouri Public Service Commission approved $16.8 million in new revenues for recovery of system upgrade investments from May-September 2023 through February 2024, bringing our annualized ISRS revenue to $36.9 million. The rates are expected to be effective later this month.
Scott: We remain focused on driving efficiencies throughout the organization, including streamlining systems and processes.
Scott: Maintaining our unwavering commitment to operational excellence.
Scott: On the regulatory front in Missouri, we were pleased with the constructive outcome in our recent filing for an updated his risks are semi annual capital recovery infrastructure writer.
Scott: Last week, the Missouri Public Service Commission approved $16 8 billion in new revenues for recovery of system upgrade investments by September 2023 through February 2024, bringing our annualized <unk> revenue to $36 $9 million.
Scott: Rates are expected to be effective later this month.
Scott W. Dudley: In Alabama, the rates that were effective January 1st were the result of working alongside the Public Service Commission staff during our annual rate setting process. As you may recall, our rates in Alabama are set using a forecasted budget. Our second quarter results reflect the benefits of these constructive regulatory mechanisms we have in each state as earnings benefited from new rates in Alabama and previously approved Missouri ISRIS revenue. During the quarter, we experienced warm temperatures across all of our service areas. In Alabama, temperatures were approximately 10% warmer than usual.
Scott: In Alabama the rates that were effective January 1st were the result of working alongside the public Service Commission staff during our annual rate setting process.
Scott: As you may recall, our rates in Alabama are set using a forecasted budget.
Scott: Our second quarter results reflect the benefits of these constructive regulatory mechanisms we have in each state as earnings benefited from new rates in Alabama, and previously approved Missouri as risks revenues.
Scott: During the quarter, we experienced warm temperatures across all of our service territories.
Scott: Alabama temperatures were approximately 10% warmer than normal.
Scott W. Dudley: I'm glad to say as a result of our efforts with the Alabama PSE to incorporate more accurate customer usage patterns into rates, the weather normalization mechanism in Alabama continues to be effective. However, in our Missouri service territory, severe fluctuations in temperatures throughout the quarter resulted in the Weather Normalization Adjustment Rider, or WNAR, being less effective than last, and the lost weather-related margins in our residential customer class during the quarter were only partially mitigated.
Scott: I'm glad to say as a result of our efforts with the Alabama PSC to incorporate more accurate customer usage patterns and to raise the <unk>.
Scott: Weather normalization mechanism in Alabama continues to be effective.
Scott: However, in our Missouri separate service territory service severe fluctuations and temperatures throughout the quarter resulted in the weather normalization adjustment rider or WMA are being less effective than last year and the last weather related margins in our residential customer class during the quarter were only.
Scott: Partially mitigate.
Scott W. Dudley: Overall, the weather for the quarter was 15% warmer than normal. However, combined, the months of February and March were nearly 32% warmer. During these months, we saw periods of extremely warm days, followed by periods of more normal temperatures.
Scott: Overall weather for the quarter was 15% warmer than normal however.
Scott: However, combined the months of February and March were nearly 32% warmer than normal.
Scott: During these clubs we saw periods of extremely warm days, followed by periods of more normal temperatures.
Scott W. Dudley: These significant fluctuations in weather can cause usage to be lower than what the degree days would imply. We look forward to working with the Missouri PSC staff to evaluate how to better recover lost weather-related margin in the future. As a reminder, the WNAR does not apply to the less weather-sensitive commercial, industrial, and transportation customer classes.
Scott: These significant fluctuations in weather and cause usage to be lower than what the degree days would imply.
Scott: We look forward to working with the Missouri, PSC staff to evaluate how to better cover lost weather related margin in the future.
Scott: As a reminder, the W. N E. R does not apply to the less weather sensitive commercial industrial and transportation customer classes.
Scott W. Dudley: Slides 15 and 16 in our appendix include further information on weather and customer usage for the quarter and year to date. During the quarter, interest costs increased, and O&M costs were also slightly higher than last year's second quarter, increasing $2.3 million, or approximately 2%. However, year to date, our O&M expenses remain below last year. Let me assure you that we are laser focused on navigating these headlines.
Scott: Slides 15, and 16 in our appendix includes burner information on weather and customer usage for the quarter and year to date.
Scott: During the quarter interest costs increase in O&M costs were also slightly higher than last year's second quarter, increasing $2 $3 million or approximately 2%.
Scott: However year to date, our O&M expenses remain below last year.
Scott: I assure you we are laser focused on navigating these headwinds on the cost side, we continue to control our O&M expenses, we believe that going forward controlling O&M increases will enable our utility financial performance to further improve in fiscal 2024.
Scott W. Dudley: On the cost side, we continue to control our O&M expenses. We believe that going forward, controlling O&M increases will enable our utility financial performance to further improve in fiscal 2024. We are working to improve efficiencies and reduce costs across the organization.
Scott: We are working to improve efficiencies and reduce costs across the organization.
Scott W. Dudley: We are targeting elements of our cost structure that can be reduced based on enhancements in technology that have occurred or will occur in the coming years. In addition, we are working to ensure our shared services are efficiently aligned and supportive of our capital investment program. Moving to slide five, an update on our capital investment plan. We continue to invest significant amounts of capital focused on modernizing our gas utility. Fiscal year today, our CapEx totaled $409 million, which was primarily at our gas utility.
Scott: We are targeting elements of our cost structure that can be reduced based on enhancements in technology that have occurred or will occur in the coming years.
Scott: In addition, we are working to ensure our shared services or efficiently aligned and supportive of our capital investment programs.
Scott: Moving to slide five and an update on our capital investment plan.
Scott: We continue to invest significant amounts of capital focused on modernizing our gas utilities fiscal year to date, our capex totaled $409 million, which was primarily at our gas utilities year over year, our gas utility capex increased 7% to $311 million with an emphasis.
Scott W. Dudley: Year over year, our gas utility's CapEx increased 7% to $311 million, with an emphasis on upgrading distribution infrastructure and connecting more homes and businesses. We continue to install advanced meters for residential customers across our service territory.
Scott: On upgrading distribution infrastructure and connecting more homes and businesses.
Scott: We continue to install advanced meters for residential customers across our service territory and fiscal year to date, we have installed over 120000 advanced meters, bringing the total number of customers benefiting from this technology to 660000.
Scott W. Dudley: In fiscal year today, we have installed over 120,000 advancements, bringing the total number of customers benefiting from this technology to 660,000. Investment in our midstream segment totaled $98 million for the fiscal year to date, largely for the expansion of Spire Storage West. Looking ahead, the expected fiscal year 24 capital investment at the gas utility segment remains unchanged.
Scott: Investment in our midstream segment totaled $98 million fiscal year to date largely for the expansion of spire storage west.
Scott: Looking ahead, the expected fiscal year 'twenty for capital investment at the gas utility segment remains unchanged. However, we are increasing our total fiscal year 'twenty for capital investment target by $35 million to $800 million.
Scott W. Dudley: However, we are increasing our total fiscal year 24 capital investment target by $35 million to $800 million in support of our storage expansion project. I will now hand the call over to Steve Rasche to discuss this project in more detail and provide a financial update. Thanks, Scott, and good morning, everyone.
Scott: In support of our storage expansion projects.
Scott: I will now hand, the call over to Steve Rasche to discuss this project in more detail and provide a financial update.
Steven P. Rasche: Thanks, Scott and good morning, everyone.
Steven P. Rasche: Let's start with our midstream segment. As you know, we closed the acquisition of MoGas and Omega in January of this year. We are pleased with both our progress and integration, as well as the solid performance of the system. We've also updated our expansion plan at Spire Storage West, supporting our targeted completion in fiscal year 25. Here are a few key points.
Steven P. Rasche: I'll start with our midstream segment.
Steven P. Rasche: As you know we closed the acquisition of Mo gas in America in January of this year. We are pleased with both our progress and integration as well as the solid performance of the system. This winter.
Steven P. Rasche: We've also updated our expansion plan and spire storage west supporting our targeted completion in fiscal year 'twenty five.
Speaker Change: Here are a few key points.
Steven P. Rasche: During the quarter, we completed our open season and recontracting activities for the capacity that is coming online in fiscal years 24 and 25. Consistent with the higher demand we've been seeing in the Western US, we were able to lock in rates well above our initial estimate and for contract terms consistent with the current market of three to five years. We also increased our total targeted investment by $55 million to $250 million, with $35 million of that investment falling in fiscal year.
Speaker Change: During the quarter, we completed our open season and re contracting activities for the capacity that is coming online in fiscal year 'twenty four 'twenty five.
Steven P. Rasche: Consistent with the higher demand we've been seeing in the Western U S. We were able to lock in rates well above our initial estimates.
Steven P. Rasche: And for contract terms consistent with current market of three to five years.
Steven P. Rasche: We also increased our total targeted investment by $55 million to $250 million.
Steven P. Rasche: $35 million of that investment falling in fiscal year 'twenty four.
Steven P. Rasche: This increase is driven by the expanded scope of the project, including enhancing the power supply, line heating, and maintenance capabilities, higher drilling costs for the injection and withdrawal wells, and increased construction costs, especially for electrical equipment and labor, reflecting the high demand across the energy sector and the market overall. Combining these factors, the returns on the project have improved from our original target, to put this in perspective. The total impact of the Spire Storage West expansion and a full year of MOGAS is expected to increase our midstream earnings by $10 to $12 million in fiscal year 25. Now, turning to our results.
Steven P. Rasche: This increase was driven by expanded scope of the project, including enhancing the power supply in line heating and maintenance capabilities.
Steven P. Rasche: Higher drilling cost for the injection and withdrawal wells.
Steven P. Rasche: And increased construction costs, especially for electrical equipment and labor, reflecting the high demand across the energy sector and the market overall.
Steven P. Rasche: Combining these factors the returns on the project have improved from our original target.
Steven P. Rasche: To put this in perspective.
Steven P. Rasche: Total impact of the spire storage west expansion and a full year of biogas is expected to increase our midstream earnings by $10 million to $12 million in fiscal year 'twenty five.
Steven P. Rasche: Now turning to our results earlier today, we reported fiscal second quarter net economic earnings of $197 million down $2 $6 million from last year.
Steven P. Rasche: Earlier today, we reported fiscal second quarter net economic earnings of $197 million, down $2.6 million from last year. Looking at the segments, our gas utility had earnings of $188 million, an increase of $4 million from last year, as Scott just touched on. Higher rates and effective weather mitigation in Alabama were offset in large part by lower usage and only partial mitigation; both gas marketing and midstream had very tough comps from the prior year.
Steven P. Rasche: When looking at the segments.
Steven P. Rasche: As utility had earnings of $188 million, an increase of $4 million from last year.
Steven P. Rasche: Scott just touched on.
Steven P. Rasche: Higher rates and effective weather mitigation in Alabama were offset in large part by lower usage and only partial mitigation in Missouri.
Steven P. Rasche: Oh gas marketing and midstream had very tough comps from the prior year and as we guided earlier, we did not expect those highly favorable market conditions to recur this year.
Steven P. Rasche: And as we guided earlier, we did not expect those highly favorable market conditions to recur. We did benefit from the cold snap in January, and both segments were well positioned to capture value for marketing. That value is reflected in the second quarter results. Midstream also captured value, and we anticipate seeing that showing up in the back half of this year. And lastly, lower corporate costs were offset by higher interest rates.
Steven P. Rasche: We did benefit from the cold snap in January and both segments, we're well positioned to capture value.
Steven P. Rasche: We're marketing that value is reflected in the second quarter results.
Steven P. Rasche: Midstream also captured value and we anticipate seeing that showing up in the back half of this year.
Steven P. Rasche: And lastly, lower corporate costs were offset by higher interest expense.
Steven P. Rasche: On a per share basis, we reported net economic earnings of $3.45 per share compared to $3.70 last year, with most of the decline attributed to the impact of a higher share count this year as a result of our forward sale that settled in December and the Equity Unit Conversion in Marketing. Slide 8 provides detail on key variances, hitting a couple of the highlights.
Steven P. Rasche: On a per share basis, we reported net economic earnings of $3 45 per share compared to $3 70 since last year with most of the decline attributed to the impact of higher share count. This year as a result of our forward say ultimate settled in December.
Steven P. Rasche: And the equity unit conversion in March.
Steven P. Rasche: Slide eight provides detail on key variances hitting a couple of the highlights as I just mentioned gas utility margins were higher overall and the volumetric component net of weather mitigation was $10 $3 million higher in Alabama, and $8 $6 million lower in Missouri.
Steven P. Rasche: As I just mentioned, gas utility margins were higher overall, and the volumetric component net of weather mitigation was $10.3 million higher in Alabama and $8.6 million lower in Missouri. Gas marketing margins and net of fair value adjustments were lower, as I just touched on, and Midstream was higher as a result of the addition of MOGAS and salt plain, looking at operations and maintenance expenses. Gas utility expenses increased by $2.3 million as lower operational costs and third-party spending were offset by higher employee-related costs.
Steven P. Rasche: Gas marketing margins net of fair value adjustments were lower as I just touched on.
Steven P. Rasche: And midstream was higher as a result of the addition of Mo gas and Salt Plains.
Steven P. Rasche: Looking at operations and maintenance expenses gas utility expenses increased by $2 3 million as lower operational costs and third party spend were offset by higher employee related costs.
Steven P. Rasche: I would also echo the point that for the first half of our fiscal year, our utility O&M costs are actually down $900,000 compared to last year; marketing and midstream costs moved up consistent with the underlying business driver. Interest expense was higher by $5 million, driven mostly by higher long-term and short-term interest rates this quarter.
Steven P. Rasche: I would also like on the point that for the first half of our fiscal year, our utility O&M costs are actually down $900000 compared to last year.
Steven P. Rasche: Marketing and midstream cost moved up consistent with the underlying business drivers.
Steven P. Rasche: And interest expense was higher by $5 million, driven mostly by higher long term and short term interest rates this quarter.
Steven P. Rasche: Turning to our outlook, we remain confident in our long-term net economic earnings per share growth target of 5% to 7%, starting from the midpoint of our fiscal year 24 guidance. Our growth is driven by our utility rate-based investment, each component of our 10-year CapEx target of $7.3 billion. Despite the headwinds faced in the first half of the year, we are reaffirming our fiscal year 24 net economic earnings range of $4.25 to $4.45 per share.
Speaker Change: Turning to our outlook.
Steven P. Rasche: We remain confident in our long term net economic earnings per share growth target of 5% to 7% starting from the midpoint of our fiscal year 'twenty four guidance range.
Steven P. Rasche: Our growth is driven by our utility rate base investments a key component of our 10 year capex target of $7 $3 billion.
Steven P. Rasche: Despite the headwinds faced in the first half of the year, we are reaffirming our fiscal year 'twenty four net economic earnings range of $4 25 to $4 45 per share.
Steven P. Rasche: We are updating our business segment targets to reflect our first half results and expectations for the rest of. We are lowering our gas utility range by $10 million as we expect to offset some of the headwinds we discussed earlier by cost management. We've raised the gas marketing range by $5 million on stronger-than-expected earnings in the first half of the year. We've also increased the range for midstream by $4 million to reflect the pull-through of new storage rates and the value created during the pandemic. Corporate costs moved up by $2 million to reflect higher interest expenses.
Steven P. Rasche: We are updating our business segment targets to reflect our first half results and expectations for the rest of the year.
Steven P. Rasche: We are lowering our gas utility range by $10 million as we expect to offset some of the headwinds we discussed earlier by cost management.
Steven P. Rasche: We've raised the range for gas marketing by $5 million on stronger than expected earnings in the first half of the year.
Steven P. Rasche: We've also increased the range for midstream by $4 million to refresh the pull through of new storage rates and the value created during the winter.
Steven P. Rasche: Corporate costs move up by $2 billion to reflect higher interest expense.
Steven P. Rasche: Moving to slide 10, our three-year financing plan is unchanged from last quarter, and this year's financing needs are now largely on the equity side. We completed both the forward sale settlement and the equity units conversion. And our ATM program placed $12 million in forward settlements this quarter. This leaves us with very modest equity needs for 2020. And with the $350 million note placement by Spire Inc., our long-term debt needs are also largely satisfied.
Steven P. Rasche: Moving to slide 10, our three year financing plan is unchanged from last quarter and this year's financing needs are now largely complete.
Steven P. Rasche: On the equity side, we completed both the forward sale settlement and then we had equity units conversion.
Steven P. Rasche: And our ATM program in place 12, moving dollars and forward settlements this quarter.
Steven P. Rasche: This leaves very modest equity needs through 2026.
Steven P. Rasche: And with the $350 million note placement by spire, Inc. Our long term debt needs are also largely satisfied.
Steven P. Rasche: And the remaining long-term debt financing in our plan is largely tied to future refinancing. I would also note that we funded a short-term $200 million loan in January, and this loan will be fully repaid in early May. And we continue to target FFO at that level at 15 to 16% on a consolidated basis. So, in summary, we are well positioned to continue growing and delivering strong overall performance for our customers, communities, and investors. Thank you for your continued interest in Spire, and we look forward to seeing many of you at the HEA Financial Forum later this month. Operator, we're now ready to take questions.
Steven P. Rasche: And the remaining long term debt financing and our plan is largely tied to future refinancing activity.
Steven P. Rasche: I would also note that we plan out of short term $200 million loan in January and this one will be fully repaid in early may.
Steven P. Rasche: And we continue to target <unk> at 15% to 16% on a consolidated basis.
Steven P. Rasche: So in summary, we are well positioned to continue growing and delivering strong overall performance for our customers and communities.
Steven P. Rasche: And investors.
Speaker Change: For your continued interest in inspire and we look forward to seeing many of you at the HVA Financial Forum later this month.
Speaker Change: Operator, we're now ready to take questions.
Operator: We will now begin the question and answer session. To ask a question, you may press star and then one on your touchtone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. The first question comes from Richard Sunderland on behalf of J.P. Morgan. Please go ahead.
Speaker Change: We will now begin question and answer session to ask a question.
Speaker Change: You May press Star and then one on your Touchtone phone.
Speaker Change: Your question. Please press Star then two please note this event is being recorded.
Speaker Change: The first question comes from Richard Sunderland with Jpmorgan. Please go ahead.
Richard Wallace Sunderland: Hi, good morning. Can you hear me? Yeah, we can, Martin, and Rich. Great, thank you for the time today. A couple of questions on the weather to start, I guess looking across the business.
Richard Wallace Sunderland: Hi, Good morning can you hear me.
Richard Wallace Sunderland: Everybody can rich.
Richard Wallace Sunderland: Great. Thank you for the time today.
Richard Wallace Sunderland: Couple of ones on the weather to start I guess looking at across the business and given these weather headwinds where you're trending in the guidance range.
Richard Wallace Sunderland: Off these segment revisions I think on my dumb math, its maybe a 1% decline old to new so is it fair that that's putting you in the bottom half of the range and then I'm also curious kind of where <unk> stands currently.
Richard Wallace Sunderland: Currently given this weather headwind as well.
Unknown Executive: Yeah, Rich, let me start on that. Yeah, you know, we have a range, and I can't argue with the logic that you put forward. If you look at the individual business units, they would show a little bit of degradation in total, and it's weather in the utility and a little bit of interest rates at the corporate end. And what I would say is that, you know, as you think about this half year and then play it forward as we think about next year, you know, the beauty of the weather headwinds, if there's any bright sides to that cloud that we've dealt with, is that we would expect to get back to normalized weather and mitigation next year, which is essentially what we had in Missouri last year.
Speaker Change: Yeah rich.
Speaker Change: Let me start on that yeah.
Speaker Change: We have a range and I can't argue with the logic.
Speaker Change: That you've put forward if you look at the individual business units it would show a little bit of degradation in total and it's weather and the utility and a little bit of interest rates at the end.
Speaker Change: The corporate and that when I when I would say is that as you think about the this half year and then play it forward as we think about next year.
Speaker Change: Yeah the beauty.
Speaker Change: The weather had wins if there's any if there's any bright signs are that that cloud that we've dealt with is that we would expect to get back.
Speaker Change: On to normalized weather and mitigation next year, which is essentially what we had in Missouri last year and that if you look at the material and we did it in the appendix to our presentation provide a lot more granular information on the weather it would point to a rebound.
Unknown Executive: And that, if you look at the material, and we did, in the appendix to the presentation, provide a lot more granular information on the weather, it would point to a rebound of, you know, 18 cents a gallon. So, if you think about how to model the rest of this year, but then what that looks like as your rebates this year going forward, we're very confident that we're still on track Adam? Yeah, Rich, and I think that's a good question.
Richard Wallace Sunderland: 18th cent range. So if you think about how to model. The rest of this year, but then what does that look like as you Rebase. This year going forward and we're very confident that we're still on track.
Unknown Executive: Got it. Got it. Thank you. Very helpful color all around.
Richard Wallace Sunderland: Yeah.
Speaker Change: Yeah, Rich and I think that's a good.
Rich: Question, Oh quoted that connecting that to two our weather pull through.
Speaker Change: As you know we are given our volume the volumes.
Speaker Change: We count on for cash flow that that has those lower volumes have negatively impacted.
Speaker Change: That cash flow growth trajectory. So we do while we still see very steady progress towards that target range.
Speaker Change: Do you now expect that to happen after year end 'twenty four.
Speaker Change: On the bright side, we do see deferred gas costs almost completely recovered here at the end of the quarter.
Speaker Change: Hoped hoped to be.
Speaker Change: Completely recovered here shortly.
Speaker Change: Got it got it. Thank you very helpful color all around and then.
Richard Wallace Sunderland: And then Yeah, I think you unpacked this in the script, but I wanted to revisit in terms of how this weather impact is showing up. You were mentioning extreme fluctuations, and then there's a greater usage impact relative to what the degree days are. Is that effectively the difference between your 2Q results now and 1Q? I'm just trying to think about where the degree days were light on both sides, but the weather impact in your results is actually really showing up this quarter. If you could help parse kind of 2Q versus 1Q, that'd be helpful.
Speaker Change: Thank you unpack this in the script, but did want to revisit in terms of how this weather impact is showing up you were mentioning extreme fluctuations and then there's a greater usage impact relative to what the degree days or is that is that effectively the difference.
Speaker Change: So between your two <unk> results now in <unk> I'm, just trying to think about where the degree days were light on both sides, but the weather the weather impacted your results is actually really showing up this quarter. If you could help parse kind of to Q versus one one view that'd be helpful.
Scott W. Dudley: Hey, Richard, this is Scott Doyle. Yeah, hey, maybe I can help with that a little bit. You know, maybe just start with the response that ties back to the quarter last year we were at. We were 2% warmer this quarter than we were in the quarter last year. And so if you just look at last year, we had good weather mitigation with the same mechanism in place. When you look at this quarter, really, February and March were much warmer than normal, and it was variable weather, so much so that there was no real consistent weather pattern across those two months. What we saw as we've been analyzing the data is that customer usage is off significantly during those months and is not correlated to what the HDDs would show for that same time period.
Speaker Change: Hey, Richard This Scott Doyle, Yeah, Hey, maybe I can help with that a little bit.
Scott W. Dudley: Just start with the responses that tie back to.
Scott W. Dudley: The quarter last year, we were at we were.
Scott W. Dudley: This quarter, we were 2% warmer than the quarter last year.
Scott W. Dudley: So if you just look at last year, we had good weather mitigation with the same mechanism in place. When you look at this quarter really February March were much warmer than normal.
Scott W. Dudley: It was variable weather so much so that there was no real.
Scott W. Dudley: Consistent weather pattern across those two months, what we saw as we've been analyzing the data is that the customer usage is off significantly during those months and are not correlated to the eight went towards the hdds would show for that same time period. So.
Scott W. Dudley: So on balance, what that tells us is, is there some work we need to do relative to that mechanism to get better correlation? That's work we have to do with the PFC staff. The timing of that will be in a rate case, the form in which that takes place, but dialogue can certainly take place in advance of that as well. So look for us to dig more deeply into that and work closely with staff as we work to enhance and improve that mechanism.
Scott W. Dudley: On balance what that tells US is is there some work we need to do relative to that mechanism to get better correlation. That's work we have to do with the PSC staff. The timing of that will be in a rate case as the forum, which that takes place, but dialogue certainly taking place.
Scott W. Dudley: In advance of that as well so look for that for us to dig more deeply into that and worked closely with staff as we work to enhance and improve that makes sense.
Richard Wallace Sunderland: And then just one last one, if I could, I know you reiterated the growth outlook here. We've also had, I guess, a couple quarters now with some interest rate commentary and rate impacts and results. Just curious what you're assuming now on a four basis for interest rates, given kind of the latest market backdrop, and then your relative to your plan outlook here.
Speaker Change: Understood understood and then just one last one if I could I know you reiterated the growth outlook here.
Scott W. Dudley: I guess, a couple of quarters now with some.
Scott W. Dudley: Interest rate commentary rate impacts from results just curious what you're assuming now on a four basis for interest rates, you've given kind of a loose market backdrop and then your relative to your plan outlook here.
Speaker Change: Yeah, No I rich great question, we have continued to take a higher for longer attack.
Unknown Executive: I would take a higher one for longer tack. I think a lot of the extra interest expense we're seeing is due to
Speaker Change: Obviously, the interest rate forecasts are moving as well I think a lot of the.
Scott W. Dudley: Xtra.
Scott W. Dudley: Interest expense receipt as more.
Scott W. Dudley: Alex based rather than interest rate base.
Scott W. Dudley: Again going back to the kind of the volumetric pull through.
Scott W. Dudley: That's probably having more of it.
Scott W. Dudley: Kind of a stubborn separately long impact there than actual our actual interest rate forecast.
Unknown Executive: Got it. Got it. Well, I'll leave it there. Thank you for your time today. Thanks, Rich.
Speaker Change: Got it got it well I'll leave it there. Thank you for the time today.
Scott W. Dudley: Right.
Operator: The next question comes from Shahriar Pourreza on Guggenheim. Please go ahead.
Scott W. Dudley: The next question comes from Shar <unk> with Guggenheim. Please go ahead.
Steven L. Lindsey: Yes.
Shahriar Pourreza: Hi guys, Jamieson Ward on for Shahriar. How are you? Thank you, everyone. Have a good day.
Speaker Change: Hi, guys James Ward on for Shar, how are you.
Jamieson Alexander Ward: Hey, Jeremy.
Jamieson Alexander Ward: Hey, Richard had some good questions there, a couple of the ones I had, but I did have one to just delve a little bit more into the weather. You mentioned the right case will be the proper avenue to go about making adjustments to the mechanism, and that there's a lack of correlation in Missouri between degree days and, you know, the amount of mitigation. I was just sort of wondering. Has the cause of that been identified?
Jamieson Alexander Ward: Hey.
Shahriar Pourreza:
Jamieson Alexander Ward: Actually Richard some good questions there that a couple of the ones I had but I did have I wanted to just delve a little bit more and two on the weather.
Jamieson Alexander Ward: You mentioned so rate case will be the proper Avenue to go about making adjustment mechanism.
Jamieson Alexander Ward:
Jamieson Alexander Ward: And then there's a lack of correlation in Missouri between degree days and.
Jamieson Alexander Ward: The amount of mitigation.
Jamieson Alexander Ward: Just sort of wondering.
Jamieson Alexander Ward: How is the cause of that been identified or is it something that needs to be studied.
Jamieson Alexander Ward: Is it something that needs to be studied? Just trying to get a sense of where we're at. Like, is there a solution in mind, and you're just waiting for the next great case to be filed to kind of tack it on to that? Or is it something that requires maybe a bit more modeling to figure out why they're not connecting the way that you would expect them to and the way they are working properly in other jurisdictions that you have?
Jamieson Alexander Ward: I'm just trying to get a sense of where we're at like is there a solution in mind and you're just waiting for the next rate case to be filed to kind of tack. It on to that or is it something that requires maybe a bit more modeling to figure out why they are not connecting the way that you would expect them to in the way they are working properly and other jurisdictions that you have.
Jamieson Alexander Ward: Just kind of how we should think about. Sort of the work to be done there in order to get them to match up and follow up would just be timing. You know, when we might see, I guess, in this case, asking about a case, but really the question is when we might see a new mechanism take effect.
Jamieson Alexander Ward: Just kind of how we should think about.
Jamieson Alexander Ward: Sort of the the work to be done there in order to get them to match up and then.
Jamieson Alexander Ward: The follow up would just be a timing of.
Jamieson Alexander Ward: You know when we might see I guess in this case asking you about a case, but really.
Jamieson Alexander Ward: Really the question is when we might see.
Jamieson Alexander Ward: A new mechanism to take effect.
Scott W. Dudley: Hey Jamieson, Scott Doyle again. Thank you for your question.
Jamieson Alexander Ward: Hey, Jamie This is Scott Doyle again. Thank you for your question I think you know the simple answer to your question is is this something that does require a little more study the more modeling just to see if there's an opportunity to correlate. This particular weather pattern just recall this weather pattern was unique and it's.
Scott W. Dudley: I think, you know, the simple answer to your question is, is this something that does require a little more study and more modeling just to see if there's an opportunity to correlate this particular weather pattern. Just recall, this weather pattern was unique in that it was not a normal weather pattern. It doesn't follow the norms, perhaps, within the mechanism. And so we just need to take a deeper dive, look at it alongside the PFC staff as we do that, and answer your question about the timing of the rate case.
Scott W. Dudley: But it was not a normal weather pattern and it doesn't follow the norms, perhaps within the mechanism and so we just need to take a deeper dive looking that alongside of the PSC staff as we do that in answer to your question about the timing of the rate case as a result of us using that as a risk mechanism. We have a must file date by may of 2026, but expect.
Scott W. Dudley: As a result of us using the ISRIS mechanism, we have a must-file date by May of 2026, but we expect our rate case to be filed sooner than that as we work to reduce regulatory lag associated with our significant capital investment program that we have underway right now.
Scott W. Dudley: Our rate case to be filed sooner than that as we worked to reduce regulatory lag associated with our significant capital investment program that we have underway right now.
Jamieson Alexander Ward: Perfect. Very clear. I really appreciate the color. Thanks, guys.
Speaker Change: Perfect very clear really appreciate the color thanks, guys.
Speaker Change: Thanks, Karen.
Operator: If you have a question... Please press the star and then 1.
Jamieson Alexander Ward: If you have a question.
Jamieson Alexander Ward: Please press Star and then one our next question comes from Christopher Jeffrey with Mizuho Securities. Please go ahead.
Operator: Our next question comes from Christopher Jeffrey with Mizuho Securities. Please go ahead.
Christopher Francis Jeffrey: Hi everyone, thanks for the question. Maybe turning to the midstream and the storage in particular, it looks like the guidance there was raised for the new storage rates, as Steve was talking about. Just curious about whether there is any more room for expansion, any spare capacity there, and kind of how we should think about the fees expected after the capacity expansion in 25. Are those rated at, are those kind of locked in at the current rates right now? Thanks.
Christopher Francis Jeffrey: Hi, everyone. Thanks for the question maybe.
Christopher Francis Jeffrey: Maybe turning to the midstream and the storage in particular, it looks like the guidance. There was raised for the the the new storage rates like Steve was talking about.
Christopher Francis Jeffrey: Just curious how we should think about is there any more room for expansion and he spare capacity there and kind of how we should think about the fee is expected after the capacity expansion and twenty-five or are those rate to that or those kind of locked in at the.
Christopher Francis Jeffrey: Current rates right now thanks.
Steven P. Rasche: Chris, this is Steve. Let me take a shot at that. You had a number of things there. If I missed something, just ping me.
Christopher Francis Jeffrey: Hi, Chris This is David let me take a shot at that you had a number of things there if I Miss something just stopped just Ping me yeah.
Steven P. Rasche: Yeah, you know, if you think about the midstream business overall, broadly, let's start broad. We're going to step into the new scale that we currently operate and or are striving to get to as we finish the expansion of Spire Storage West and the back half of this year in 25 and 26. And the reason for that and the reason why you should expect to see that kind of step up over the next two and a half years is that, you know, the physical dynamics of storage are that you bring the storage online, and then as the wells and the cavern season progress over time, the team not only gets comfortable with how the operations are, but we get a better feel for how we can optimize the use of that cavern capacity over time. And this is pretty standard in the space takes a couple of years, at least to kind of work our way through that.
Steve: If you think about the midstream business overall broadly, let's start right, we're going to step into the new scale that we currently operate and or are describing to get to as we finish the expansion in spire storage west in the back half of this year in 'twenty five in 'twenty.
Steven P. Rasche: And the reason for that and the reason why you should you.
Steven P. Rasche: Should expect to see that kind of step up over the next two and a half years is that you know that.
Steven P. Rasche: The physical dynamics of storage or that you bring the storage online and then as the wells and and the caverns sees like over time.
Steven P. Rasche: The team.
Steven P. Rasche: Not only get comfortable with how the operations are but then we get a better feel for how we can optimize the use of that that cavern capacity over time and this is pretty.
Steven P. Rasche: So, if you think about the midstream segment broadly, you should expect to see that kind of step-up over the next two and a half years. We've given the guidance for this year for the midstream business, and we gave you a preview of how to think about the midstream business for 2025. Will we continue to look for opportunities to optimize? Absolutely. That's part of our job.
Steven P. Rasche: Pretty standard in the space. It takes a couple of years at least to kind of work our way through that so if you think about the midstream segment broadly you should expect to see that kind of step up over the next two and a half years and we've given the guidance for this year for the midstream business and we and we.
Steven P. Rasche: We gave you a preview of how to think about the midstream business for 425, well, we continue to look for opportunities to optimize absolutely. That's part of our job, but remember the midstream business is a business where the the.
Steven P. Rasche: But remember, the midstream business is a business where the rates that we charge really are driven by the volatility in the commodity, but the actual monetization of that volatility is left for our customers. But it does support higher rates. And as we mentioned in the column that prepared remarks, we have now completed the open season, and the recontracting, or the capacity that is online that actually just started injection in April. But we'll come online as we get into the next winter and the injection season next spring. And we are extremely pleased that the rates that we got were well about what we had estimated.
Steven P. Rasche: The rates that we charge really are driven by the volatility in the commodity but the actual monetization that volatility in many ways is is left for our customers, but it does support higher rates and as we mentioned on the call in the prepared remarks, we have now completed.
Steven P. Rasche: The open season, and the re contracting or the capacity that is online that actually just started injection in April but will come online as we get into the next winter and an injection season next spring and we are extremely pleased that the rates that we got were well above what we had estimated in the mid twenties range, which is.
Steven P. Rasche: I know we're not in.
Steven P. Rasche: That segment of the market is right now we if you look at the market overall the terms for contracts are between three and five years in and our our contracting falls right in that category and in fact, I think the average is right in the middle of it four years or so.
Steven P. Rasche: So from that standpoint, while we will have some of our legacy contracts roll as we go through the next couple of years, we're in a very good position in terms of capturing the fixed storage value, getting it under contract, and being able to operate it for a while. I think your last question was about additional expansion opportunities. It's something that, frankly, the team has thought a little bit about, if you think about Pine in the Sky, but right now, we are laser focused on making sure that, one, we complete the integration for MOGAS, and we lock down and get everything operationalized there.
Steven P. Rasche: From that standpoint, while we will have some of our legacy contracts roll as we go through the next couple of years. We're in a very good position in terms of capturing the fixed storage value getting it under contract and being able to operate for a while I think your last question was additional expansion opportunities.
Steven P. Rasche: It's something that frankly the team.
Steven P. Rasche: That has gone a little bit about if you think about pie in the sky, but right now we are laser focused and making sure that when we complete the integration for <unk> gas that we locked down and and and.
Steven P. Rasche: And get everything operationalize their planes.
Steven P. Rasche: And lastly, that we complete the expansion of Spire Storage West, and that is really our current focus, and that will be our focus, and once we can take a breath and get through the winter, probably next winter, because that's when the rubber meets the road for the Spire Storage West facility, then we'll start looking at where other opportunities might be. But at this juncture, I wouldn't want to tell you to model anything in, but we do have a good path to see some step growth over the next two and a half years.
Steven P. Rasche: Plains is actually performing very well and lastly that we complete the expansion of the spire storage less than those are really our current focus and that will be our focus and what we can take a breath and get through the winter on probably next winter because that's when the rubber meets the road for the spire storage West facility.
Steven P. Rasche: Then we'll start looking at where where might other opportunities be but at this juncture I wouldn't want to I wouldn't want to tell you to model on it again, but we do have a good path to see some step growth over the next two and a half years.
Christopher Francis Jeffrey: Great, thank you, Steve. That's super helpful.
Christopher Francis Jeffrey: And then maybe just last one for me just kind of, in terms of the reiterated guidance for 24, if I kind of just, you know, compare that expectation for the second half of the year compared to last year's second half, it kind of implies a decent amount of improvement. Just wondering, in that context of year over year, kind of What are you expecting to kind of be the driver of that? Trend improvement.
Christopher Francis Jeffrey: Yeah.
Speaker Change: Great. Thank you Steve that's Super helpful. And then maybe just last one for me just kind of in terms of the reiterated guidance for 'twenty four if I kind of just you know.
Christopher Francis Jeffrey: Compare that expectation for the second half of the year compared to last year's second half kind of implies a decent amount of improvement I'm just wondering in that context of year over year kind of.
Christopher Francis Jeffrey: What are you expecting to kind of be the driver of that.
Christopher Francis Jeffrey: Trend improvement.
Steven P. Rasche: Yeah, it's a pretty broad question. Let me focus on the utility and the corporate and other segments because I think we've been pretty clear about what the drivers and movers are in both the mainstream and the marketing segment. If you remember last year, we had some outsized one-off costs on the corporate side in the last fiscal quarter of last year. We obviously don't expect any of that to recur this year.
Christopher Francis Jeffrey: Yeah.
Speaker Change: That's a pretty broad question I, let me, let me focus on the utility and the corporate and other segment because I think we've been pretty clear and what the drivers and movers are in both.
Steven P. Rasche: Midstream and marketing segment.
Steven P. Rasche: Remember last year, we had some outsized one off costs in the corporate side in the last fiscal quarter of last year. We obviously don't expect any of that to recur. This year. So from a cost perspective, you should expect to see our overall O&M costs to be a lot lower and as Scott mentioned in his prepared.
Steven P. Rasche: So from a cost perspective, you should expect to see our overall O&M costs be a lot lower. And, as Scott mentioned in his prepared remarks, we are focused a lot on how we can get our costs in line and keep those in line over time. Now, we have a long history of doing this and doing it successfully. It shouldn't be lost on you or anybody else that our actual costs in the utility are lower than they were last year. And we're going to continue to make sure that we have the right cost structure that meets our customers' needs and supports growth. And that's going to be an ongoing process.
Steven P. Rasche: Remarks, we are focused.
Steven P. Rasche: A lot on how we can get our costs in line and keep those in line over time now we have a long history of doing this and doing this successfully it shouldn't be lost on you or anybody else that are our actual cost in the utility are lower than they were last year and we're going to continue to.
Steven P. Rasche: Make sure that we have the right cost structure that meet our customers' needs, but also support the growth.
Steven P. Rasche: So that will be one of the tailwinds that you will see when you compare this year versus last year. Then secondly, as Adam mentioned, now that we have largely recovered all of our gas costs, and I think we can expect with April bills and as they flow through, we'll get the rest of that per gas cost recovered. The headwinds on the balances of short-term debt should mitigate quite a bit and maybe turn into a tailwind.
Steven P. Rasche: And that's going to be an ongoing process. So that will be one of the tailwind that will that you will see when you compare this year versus last year and then secondly, as Adam mentioned now that we have largely recovered Oliver for gas cost and I think we can expect with April bills as they flow through will get the rest of that deferred gas cost recover.
Steven P. Rasche: They the headwinds on the balances in short term debt should should mitigate quite a bit and maybe turn into a tailwind. It. Although we have the same view that the market does there's probably a higher for longer getting those balances down is another way in which we should be able to create a little bit of uplift when you compare this year versus last.
Steven P. Rasche: And although we have the same view that the market does, that it's probably higher for longer, getting those balances down is another way in which we should be able to create a little bit of an uplift when you compare this year versus last.
Christopher Francis Jeffrey: Great. Thank you. That's all for me.
Speaker Change: Great. Thank you that's all for me.
Megan L. McPhail: This concludes our question and answer session. I would like to turn the conference back over to Megan McPhail for any closing remarks.
Christopher Francis Jeffrey: This concludes our question and answer session I would like to turn the conference back over to Megan Mcphail for any closing remarks.
Megan L. McPhail: Thank you for joining us on the call today. We look forward to talking to you later today and in the coming weeks at the AGM.
Megan L. McPhail: Thank you for joining us on the call today, we look forward to talking to you later today and in the coming weeks.
Speaker Change: Have a good day.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.