Q2 2019 Earnings Call
At this time all participants are listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time, if anyone's general for operator assistance. Please press Star then zero on your touch on telephone as a reminder, this conference maybe recorded.
I would now like to turn the conference over to David for Vice President of Investor Relations you may begin.
Good morning, and thank you for joining US we will begin today with comments from Entergys, Chairman and CEO Leo denote and then drew Marsh, our CFO will review results.
In an effort to accommodate everyone who has questions. We request that each person ask no more than one question and one follow up.
In today's call management will make certain forward looking statements.
Actual results could differ materially from these forward looking statements due to a number of factors, which are set forth in our earnings release or slide presentation, and our SEC filings.
Entergy does not assume any obligation to update these forward looking statements.
Management will also discuss non-GAAP .
Financial information.
Reconciliations to the applicable GAAP measures are included in today's press release and slide presentation.
Both of which can be found on the Investor Relations section of our website.
And now I will turn the call over to Liam.
Thank you David and good morning, everyone.
We had a productive quarter and today, we are reporting adjusted earnings of $1.35 per share.
Drew will go over the details, but the bottom line is that these are strong results that keep us firmly on track to achieve our 2019 guidance.
With our success over the past three years and our confidence in our strategy going forward.
I'm pleased to announce that we are increasing our three year investment plan for the benefit of our customers.
As a result, we are also raising our earnings outlook midpoint in 2020 and 2021.
Narrowing our guidance and outlook ranges.
And providing clarity on our dividend with an expectation to align the dividend growth rate with our earnings growth rate by the end of 2021.
This is possible because we are finding ways to optimize our operating cost through automation and other continuous improvement efforts.
With this new plan, we are investing to enhance our level of service and the lower on M. creates headroom to help us manage the effects on our customers' bills.
Today, we are a world class utility with a proven track record of successful execution.
The solid investment plan and an outlook that will deliver the earnings and dividend growth that investors expect of a premier utility.
Beyond our three year horizon, we see no shortage of investment opportunities to benefit our customers and maintain our growth aspirations well into the future.
For example.
We currently plan.
To add 7000 to 8000 megawatts of new generation from 2022 through 2030.
This is necessary to continue to modernize our infrastructure serve load growth and achieve our environmental commitments.
We anticipate that up to half of this new generation would be renewables, primarily solar with the balance being highly efficient gas generation.
While the specifics could change as technology and economics involved of course, we'll work with our regulators and other stakeholders to determine the best strategy to meet customer needs for reliability and affordable bills, while achieving our sustainability goals.
We will also continue to invest in transmission infrastructure.
To integrate new generation technology connect new customers enable future economic development and enhance system reliability efficiency and resiliency.
We believe that our largest opportunity for long term growth is in distribution.
We are already making major investments in am I enterprise asset management systems workforce management systems customer relationship management systems, a new and improved customer engagement portable portal distribution automation distribution and outage management systems and Geo spatial information systems.
Beyond these initiatives, we expect to invest in technologies to harden, our grid and enable the optimization of distributed resources like residential and utility scale solar.
Battery storage backup generators, microgrids and electric vehicle infrastructure.
This is our expectation today, but ultimately our final resource decisions will be informed by many factors.
Including our customers evolving preferences and expectations.
As a vertically integrated utility we are agnostic to the specific solution, whether generation transmission or distribution.
As long as it's the best solution.
As a result, we see sufficient customer centric investment opportunities to enable us to continue to achieve our current rate base growth beyond 2021.
Physical assets aren't the only things that matter.
We're also investing in our employees Weve created in innovation hub to help us lead in a rapidly evolving industry and help us develop solutions to address customer needs. We're also enhancing our leadership training to give our employees the tools to lead their organizations through the changes ahead.
Organizational health and diversity and belonging efforts are also integral to our success.
These programs will ensure that our employees will grow as the company grows.
With our increased earnings outlooks clarity on our dividend growth and excellent prospects for continued growth.
We are as excited about our future as we have ever been.
We achieve our success one step at a time and this quarter is a continuation of our journey.
In May we completed the Saint Charles Power station. This modern CGT went into service ahead of schedule and on budget.
It will supply reliable clean energy to louisiana's customers to help support the growth the state is experiencing.
In Mississippi, we are wrapping up due diligence for the Choctaw acquisition.
We're on a path to resolve the mechanical issue identified earlier this year and we plan to close the transaction by year end or early next year.
On the renewables front, we've had several developments.
In New Orleans, we received approval from the City Council to proceed with a 90 megawatts solar portfolio previously proposed.
Entergy New Orleans is also piloting a new program that put solar panels on low income customers homes.
Through partnerships with local vendors, we will install a rooftop solar system at no cost to the customers and give them a credit on monthly bills.
In Arkansas, we're partnering with commercial and industrial customers to meet their energy and sustainability goals.
We're offering a community solar tariff to allow them to subscribe to bloxom solar resources for our customers. This is a cost effective way to meet their renewable energy goals without them, having to make an upfront capital investment.
These are just some of the innovative programs, we are implementing to deliver renewable energy solutions.
We will continue to engage with our regulators and stakeholders to expand the use of renewables under a framework, which ensures that we build the most economic system.
Balancing reliability.
Price and sustainability.
In Texas, two large transmission projects, including phase one of the Western region economic transmission line were placed into service.
These assets will help entergy, Texas support growth in that area.
We're also making significant distribution investments over the next three years with the emergence of new technologies.
We continue to install advanced meters with plans for 1 million new meters in 2019.
We also deployed the first release of Salesforce capabilities to our call centers. This is part of a larger effort to build a new website with mobile functionality a customer relationship management system and interactive voice response to transform our customer experience.
We benefit from constructive collaborative relationships with our regulators and progressive regulatory constructs that give us the opportunity to align cost recovery with when our customers receive the benefits.
Our regulatory frameworks provide clarity to our plan and give us confidence in our financial commitments.
We continue to make strides in this area.
In May Texas enacted legislation empowering the public utility commission to allow for faster recovery of generation investments.
This legislation is a step in the right direction and will help us closer to our allowed return.
More timely recovery will help us create value for our stakeholders in Texas and ensure that the communities we serve remain economically competitive.
Also in the quarter Entergy, Mississippi received approval of its annual Formula rate plan filing.
And we submitted annual if our peak filings in Louisiana and Arkansas.
Our request in Arkansas was for a rate change of $15 million less than 1% of total revenue well below the 4% cap.
This includes placing approximately $700 million of new assets into service in 2020 for the benefit of our customers.
As many of you know hurricane Barry made landfall in our service area earlier this month.
The storm created significant flooding and assess ability issues, but thankfully, we did not see extensive and widespread damage to our system.
We activated our emergency response plans and we were fully prepared for the event and as always our employees stepped up.
We'd also like to thank our neighboring utilities that provided mutual assistance to help us get our customers back online as quickly and safely as possible.
Mutual assistance is a hallmark of our industry.
We are proud that once again the Edison Electric Institute has awarded Entergy with its emergency assistance award for the company's outstanding power restoration efforts.
At MWC all the pieces are now in place to fully exit the merchant business and we continue to systematically reduce risks.
We have commercial agreements to sell the last three nuclear assets to a counterparty that the NRC has already approved in a similar transaction.
We are proud to have led the industry.
In the unprecedented strategy to sell non operating nuclear assets the strategy that fully transfers the plants decommissioning liability to the new owners, while accelerating the decommissioning timeline.
As we predicted.
This market has grown in a short period of time, that's three operators have announced plans with three different buyers.
We are becoming a better stronger company than a premier regulated utility, creating sustainable value for all of our stakeholders.
The fundamentals of our business are strong as reflected by the increase in our earnings outlooks supported by our robust capital plan.
We're expecting 5% to 7% adjusted EPS growth off of our 2019 guidance.
And by the end of 2021, we expect to increase our dividend growth rate to align with our earnings growth.
We have among the lowest retail rates in the country.
We operate in a region that benefits from strong industrial growth.
We are an industry leader in critical measures of sustainability.
We are making significant investments in our system and our culture to benefit customers.
And our aspirations for our customers are aligned with their evolving expectations as well as the goals of our regulators.
These are just some of the reasons why entergy as a compelling long term investment today.
This is the foundation on which we will grow innovate and expand our investment profile to continue to deliver on our commitments tomorrow.
We are excited about our future.
I will now turn the call over to drew to provide more detail on our results our expectations for 2019 and our updated outlooks.
Thank you Leo good morning, everyone. As you heard from Leo we had another productive quarter with good results and we are firmly on track to meet our full year guidance.
With our updated capital investment profile and cost expectations.
We are raising our earnings outlook midpoint in 2020 and 2021.
In addition, we are narrowing our guidance and outlook ranges.
I'll provide details on these changes in more but first let's turn to the quarter.
You can see on slide four on a per share basis.
Entergy adjusted earnings were $1.35 seven cents lower than second quarter 2018, including the effects of dilution.
Turning to the utility on slide five rate actions in Arkansas, Louisiana, and Texas contribute positively to the quarter's results.
Also last year's results included regulatory charges to return the benefits of the lower federal tax rate to customers.
Partially offsetting these increases were lower sales volume and the unbilled period and the effects of weather.
Which was less favorable this quarter compared to one year ago.
Regarding industrial sales, we experienced higher customer unplanned outages.
Fewer cogent customer outages and unusually wet weather in Arkansas, leading to low sales to agriculture customers.
The fundamentals that support the industrial customers in our region remains strong.
And our long term industrial sales outlook remains intact.
Other drivers for the quarters results included higher Nonfuel, owing them due largely to higher planned spending on nuclear operations information technology and initiative to explore new customer products and services.
Drivers related to our growth such as higher depreciation depreciation expense, including the Saint Charles Power station, which came online at the end of May.
And lastly, the higher share count affected this quarter's results on a per share basis.
Looking at either of you see second quarter results on slide six.
As reported earnings were 18 cents higher than the prior year.
The key drivers were lower impairment charges at the merchant nuclear plants and strong market performance in the quarter for either Vcs nuclear decommissioning trust funds.
Partially offsetting the increase was lower revenue due to the shutdown pilgrim as well as a tax benefit in second quarter of 2018.
Looking forward, we still expect either of you see to provide slightly positive net cast apparent from 2019 through 2022.
Leo mentioned that we continue to systematically reduce risk as we complete our exit from either of you see.
Energy sales are 94% hedged.
At any point, our sale agreement does not require a minimum level of funding and the nuclear decommissioning trust as a condition to close.
Palisades Trust now only have 25% equity investment and a 5% return we should not expect to have to make any contributions to close the transaction.
Phil Gramm shut down at the end of May and its trust is essentially in cash.
And finally as a reminder, our strategy to sell non operating nuclear assets fully transfers the plant decommissioning liability to the new owners.
As a result, we have significantly reduced our risk associated with revenue operating capital market and decommissioning activities for either of you see as we finalize our exit from that business.
Moving to operating cash flow on slide seven.
For the quarter with $552 million, a $29 million increase from a year ago.
The change was driven by a lower amount of unprotected excess Avi ITD returned to customers.
Well refueling outage costs and lower a aro spending at either PC.
Partially offsetting were higher severance and retention payments at TWC.
Turning to our guidance and outlook on slide eight.
Today, we continue to see results coming in around the midpoint for 2019.
In addition, we are raising the financial outlook midpoint for 2020 2021.
The updated outlook is driven by $750 million of incremental investments through 2021 that improve reliability and customer engagement.
These investments are centered on themes that we have discussed, namely updating distribution transmission and generation infrastructure to drive improved reliability as well as new products and services for our customers.
However, important goal is for our rates remain among the lowest in the nation for investor owned utilities.
To that end, we are working to optimize our operating costs and part by leveraging innovation automation grid modernization and other new technologies to drive efficiency and productivity in our business processes.
We expect own them to be about $2.65 billion in 2020 2021.
The goal to offset inflation in our business on an ongoing basis.
The combination of the incremental investments and cost discipline.
Well improve our level of service to our customers, while continuing to manage bill growth at or below inflation.
The benefits of these efforts are not just limited to our customers.
Our employees will have the opportunity to develop new skills broaden their professional expertise and leverage technology to work more productively.
Our communities will see economic development and will benefit from better service and improved reliability.
And our investors will see improved earnings per share growth and improved confidence in our expectations.
We previously communicated our targeted adjusted EPS growth at 5% to 7% and that remains our expectation.
The new bed points reflect a 6% growth rate off of 2019 midpoint.
Additionally, we have narrowed our guidance and outlook ranges by 10 cents and we couldn't hear them further in future years, as we continue to execute on our strategy and deliver on our commitments.
Providing steady predictable growth is fundamental to our strategy and this includes our dividends.
Our goal is to align our dividend growth rate with our EPS growth rate of 5% to 7%.
And the key variable to to to determine that as our capital plan.
Given our updated capital plan, we expect to achieve our alignment objective in the fourth quarter of 2021.
We have discussed this dividend plan with our board.
And they support our goal and timing.
As you know dividends, our quarterly decisions made by the board and this one will be made at that time.
These collective updates reflect the evolution of our business to our premier regulated utility.
The success, we've had in executing our strategy over the past three years gives us confidence in our ability to deliver on our ongoing plan.
Turning to credit on slide nine our parent debt to total debt has further improved to 19.4%.
Largely due to the settlement of the remainder of the equity forward in May.
Our FFO to debt is 11.8%.
This includes the effects of returning approximately $650 million of unprotected excess FDIC the customers.
Excluding this give back in certain items related to our exit of either of you see.
FFO to debt would be 15.8%.
While some things that are our plans have changed several critical credit credit elements have not.
We expect cash flow to continue to improve beginning next quarter and throughout the remainder of the year.
And the amount of unprotected access FDIC returned to customers as the amount of unprotected access it.
Returned to customers declined.
Our equity financing framework remains the same as it was at our analyst day last year.
And we remain committed to our targets of at or above 15% from FFO to debt by 2020 and below 25% for parent debt to total debt.
As well as maintaining our investment grade profile.
We had another productive quarter with good results and we continue to execute on our plan to deliver steady predictable growth in earnings and dividends through customer centric investment.
The improvements we are making today are a natural continuation of the evolution underway for some time.
They are reflected in the alignment toward customer outcomes, our focus on customer bills.
Development of new investment opportunities and updated earnings outlook tighter outlook ranges and dividend path clarity.
As Leo mentioned the fundamentals of our business are strong and we are well positioned for continued value creation.
We are world class utility working for the benefit of all four of our key stakeholders and now the entergy team is available to answer questions.
Thank you ladies and gentlemen, if you have a question at this time. Please press Star then one on your touched on telephone.
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Our first question comes from Praful Mehta of Citi. Your line is now open.
Thanks, so much guys.
Good morning, Paul.
Good morning. This is a great call then sounds like everything's going off.
Really you highlighted the entergy. So I guess my first question and with the increased guidance it sounds like you're still maintaining within the five to seven but Leo as you talked about there is significant incremental investment opportunity that you see including the 7000 megawatts you talked about what are the other leverage you see that could potentially increase if not through 2021, but beyond in terms of the growth opportunity you see at the utility side.
Profitable from an investment standpoint.
If you go back to our last.
Analyst day, even we were talking about.
The number of things that we can do.
Not only.
To upgrade the technology associated with our generating fleet uptake the top technology and.
Signup new load the Teche, new generation that transmission front, but also a significant amount of.
Of distribution.
Distributed energy resources technological advancements that we can make.
Those are the types of things that we're still looking at nothing that we're talking about today nothing that enters the plan are not are outside of the balance with the sorts of things that we've been talking about for some time with all of you and certainly working on for even longer.
Internally to the company.
As we looked at it as we've always said what weve.
Well, we're always balancing everyday every decision we make is that three pronged.
Outcomes that we need for our customers want it has improved the level of service that we provide them and two we have to do it.
To manage their bills managing the bills as the governor in terms of how much. We can we can spend on upgrading the reliability of the system. We've got to balance that and then obviously the sustainability objectives that we and our customers and all of you as investors have.
So.
It is more of the same.
In terms of what we have to do to be looking at upgrade that system.
The seven to 8000 megawatts of generation, that's a continuation of what we've been doing and that is modernizing the fleet to lower ROE and M. lower fuel cost improvement missions across the board as we look to deactivate 40, and 50 year old units and replace them with new.
Capacity. So if you look at our system.
We used to put out that.
Histogram of the age of our of our fleet.
We still have have some older units.
Some of what we're spending the money on right now the news.
This new dollars are actually.
To go into some of those legacy gas units to make sure. They continue to operate reliably while they get into queue to be replaced by the newer stuff. So.
It's nothing new it's nothing that we haven't been talking about before it's really just a focus on making sure that we balance those three objectives, we want to make sure that we improve the level of service maintained so the lowest rates in the country work on the customer's bills keeps them below the level of inflation, while we continue to improve our sustainability footprint, but importantly, as I mentioned the sustainability of our customers.
That's that's very important to them as well so.
Well Super helpful and thank you for that and then maybe just quickly switching to the nuclear operations side.
I wanted to understand any more color on the annual outage. It seems to be delayed so just any color on what's going on that and when that would be back on line would be helpful.
Good morning profit its rod we're pleased to report for our customers that you know is in fact back online and sink to the grid I believe beginning on Monday.
And so that that's that's moving forward so thats progress for us.
Got you anything specific lot better.
Increase the delay.
The significance was the reactor cooling pump motor that field and it's a highly specialized equipment.
That you can't buy off the shelf and we have tested that equipment during the outage in 2018 and it passed all the tests and the fact that it failed was anomalous for us but at the end of the day. It takes a long time to replace and repair.
That that motor and that was the cause of the delay and nothing more and so we are happy that is back online.
Alright, Thanks, Robert and thank you guys.
For Q4.
Thank you and our next question comes from Julien Dumoulin Smith of Bank of America. Your line is now open.
Hey, good morning.
Good morning.
In.
Hey, so perhaps just to come back to this cost question.
Can you elaborate a little bit on how you're thinking about the cost benefits flowing back to customers.
Obviously, you just filed the neff RP in Arkansas, which reflected less rate inflation than past years.
If some of the Oh in them.
That you're reductions already in place or is this more prospective and should that kind of limit the inflation here for Arkansas for next year's if RP as well.
And then maybe.
Just the nuance here or should we expect some transient benefits.
You know or as is largely given the annualized nature of all these filings going to flow pretty simultaneously back to customers.
Julien this is true.
So in terms of the flow back to customers, we would expect that pretty much all of it would flow back to customers in the course of time as you're noting depending on the jurisdiction some would flow back to customers faster than others.
And I think that's actually a critical piece of the overall strategy here because.
We are aiming to manage our customer's bills.
And by doing that.
We are creating space in the bill for incremental capital investment to improve reliability and I think theres, we don't have it in the main flies, but there is an appendix slide I think it's like slide 38, or so that that talks about how our earnings are expected to change while it happens you'll notice that the net revenue line.
Doesn't really move all that much.
And.
And they all went in line is that creating that space for us. So we would expect that that would flow back to customers.
Because we're not we're not anticipating their bills really moving at all.
As a result of this incremental capital in terms of some of the.
The owned them.
And the progress that we've made I think the answer is yes, we have made some progress this year.
That's part of what gives us confidence that we can execute on this going forward.
And.
I don't know all of it is in rates today.
But it will get into rates very quickly.
This year as you know we are using it to offset.
Some of the negative weather that we had in the first quarter.
Plus.
I mentioned in my remarks, industrial sales growth was a little bit below our expectations year to date.
But that would be fine long term meantime, we need to make sure that we are managing to hit our expectations for this year.
So some of that is happening now as part of what gives us confidence going forward.
And that should all flow back into rates.
Thanks, Glenn just on the Capex budget, a little bit more further elaboration some of it it seems like with distribution as well and then also just what does the Texas legislation means for you guys from a capex perspective, it is that reflected as well.
Well I'll take the capital and I'll, let rod answer the regulation piece of it from a capital perspective, yes, a good chunk of it is in distribution.
As as you noted.
And as Leo mentioned in his remarks and his answer to profit question. It's a lot of what we have been doing.
Not all of it is.
Is some of it is.
Putting in new smart equipment and stuff like that that can pick and.
Communicate with our network.
But a lot of it is just replacing holes then cross arms and Transformers that are.
That need frankly, just need to be updated and so thats on the distribution front on the transmission side.
Yes, there is quite a bit of economic developments, along the corridor between New Orleans, and Baton Rouge, that's prompting new reliability investment opportunities for us from a transmission perspective that frankly, we weren't planning at the beginning of the year.
While front, mainly along the west side of the Mississippi River.
And then we have.
A lot of customer products and services investment that we're making as Lee alluded to in his script. So those are some of the main kinds of investment opportunities that we're looking at in terms of this near term incremental capital and ill turn that over to Ron for the regulatory question and the benefit of the generation right. The legislation in Texas is really reducing lag.
For purposes of the Capex that we have in the plan for Texas. So.
But its remember its an enabling legislation that gives the Texas Commission.
The opportunity to provide more efficient regulatory recovery.
Predominately for those generation investments that drew made reference to.
So it's a risk reduction.
And the lag reduction opportunity for us as drew I believe stated in Leo in his statement to align the recovery mechanisms with the timing of our investments and benefits to customers.
Fair enough. Thank you very much.
Thank you Julien.
Thank you. Our next question comes from Sophie Karp with Keybanc. Your line is now open.
Hi.
Hi, good morning, Thanks for taking my question.
Maybe to follow up on Texas.
So as a as a commission move on.
Aligned so thats, what I guess, Steve contends with actually the recovery mechanisms is there any potential further upside to your Capex plans in Texas.
I think the potential for upside has to do with our ability to manage.
And manage the cost associated with service delivery. The capital plan. We have for Texas is is pretty straight forward and we think we think said, but pulling the levers that Leo and drew mentioned a little earlier provides us with an opportunity to move closer.
Two are allowed.
How loud or are we and as I just mentioned.
The Texas Commission, having tools to help us reduce lag is will give us the opportunity to do that as well.
Great great. Thank you.
And then I know, it's some time off the activity on the docket, but.
I guess, what is your range of expectations and what happens there.
No sector theory.
This through I'll tackle that one so is there any material updates right now it continues to be.
Going through the process at FERC.
And in terms of our expectation.
As we said for a while we have a reserve on our a week and then.
Whatever the outcome may be there.
Based on our expectation and then the.
Other elements of the various complaints there are reflected in the outlook that we put out today.
So.
There is no.
All all of the expectations that we have are reflected in fourth series outcomes are reflected in our outlook.
Okay. Thank you.
Thank you. Thank you.
Thank you and our last question comes from Charles Fishman of Morningstar Research. Your line is now open.
Thank you good morning, Tom.
Yes, Hey on your comments about the 7000 megawatts.
Just 2030 does that include the four plants under construction in the want and chalked off.
It does not the seven to 8000 megawatts that we're talking about is 2022 through 2030 and as I mentioned.
But probably be roughly half renewables and have gas as we look at it today, obviously subject to what happens technologically.
Cost wise to the construction of those different facilities, but.
Again that that seven to 8000 megawatt new megawatts. Okay. So does that I realize it's not a long time, but is that still being driven by the industrial load.
It's still being driven by the need to technologically improve the system. So if you remember Charles.
We've been going through this portfolio transformation with our generation fleet given that the.
The age and the vintage of those facilities that served us really well, but when they start pushing 40 plus years of age.
The new the new plants the efficiency on M. levels this emission levels.
And then obviously the fact that they are starting brand new life that.
That.
Overtakes, what what the maintenance of those older plants would be so for example.
The Saint Charles plant.
You know over the life of the plant that's going to benefit our customers by $1.3 billion, given the lower production costs associated with that plant vis-a-vis, what's on our system today in the market. So that's really the continuation of the load growth.
Obviously is important but but in large part what that does is chips the price point down for for our customers as well.
Okay and since I'm. The last question, if I could take the liberty of asking one more on the dividend increase.
I understood. The 2021 review will be reviewed by the board in later this year in the fourth quarter.
Im assuming its going to stick to that fourth quarter schedule as well as 2020.
Do you anticipate like similar to the 3% increases until then or you weren't saying, it's going to be no increases until fourth quarter a 21.
As my assumption is correct, we are not saying it would be no increase that you are correct. We the board will take the dividend up.
Every year as it always does we were just signaling.
Because we've had this objectives that we've stated for a while.
That we want to have our dividend growth to match our earnings growth and as you point out for the last few years it's been.
Lagging earnings growth, we believe that we will be at a point in time.
By the fourth quarter of 2021 to put those in line with our expectation of earnings growth.
Okay. Appreciate it thanks for the clarification, that's all I have.
Thank you Charles.
Thank you and we do have a question from Neal Collison of Wells Fargo Securities. Your line is now open.
Hi, guys I'm, sorry jump in last minute, but quick question and I apologize if I've missed this week with the new capex flowing in.
Have you discussed sort of incremental equity needs or how we should think about that over the next few years.
Yeah Neal this is true.
So in my remarks, I mentioned that our equity expectations are exactly as they were at analyst day.
So its not until we won't we won't have any need for equity until after 2020, sometimes 2021 and beyond and that expectation is around 5% to 10% of our overall capital needs.
And yes.
For.
Okay, and should we think about that likely being that rule of thumb holding true as well in 22 and 23 based on what you're seeing right now.
Yes, I think kind of looking out.
On a long term basis, yes.
All right perfect. Thank you.
Thank you.
Thank you and ladies and gentlemen, this does conclude our question and answer session I would now like to turn the call back over to David Clark for any closing remarks.
Thank you Sonia and thanks to everyone for participating this morning.
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And this concludes our call. Thank you very much.
Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program you may all disconnect everyone have a great day.