Evergy Q4 2021 Earnings Call Transcript

Quartr
Provided by Quartr
February 25, 2022

Key Takeaways

  • Evergy delivered full-year 2021 GAAP EPS of $3.83 (up from $2.72 in 2020) and adjusted EPS of $3.54, exceeding its guidance midpoint by 7% and achieving 14% year-over-year growth.
  • The company accelerated its grid modernization by investing $2.05 billion in 2021—part of a $10.7 billion 2022–2026 capital plan to replace aging equipment and strengthen transmission and distribution.
  • Since 2017, Evergy has delivered a 4.2% average rate reduction to customers and cut operating and maintenance costs by 18% (since 2018), with annual savings of ~$110 million passed through in upcoming rate cases.
  • Evergy’s fleet transition has achieved 46% lower CO₂ emissions than 2005 levels, with nearly half of 2021 generation from carbon-free sources and targets of 70% reduction by 2030 and net-zero by 2045.
  • Evergy filed for Missouri rate increases of 5.2% (Metro) and 3.8% (West), largely offset by cost savings, and reaffirmed its 2022 guidance of $3.43–$3.63 EPS plus long-term 6–8% earnings growth.
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Earnings Conference Call
Evergy Q4 2021
00:00 / 00:00

There are 11 speakers on the call.

Operator

Thank you for standing by, and welcome to Evergy, Inc. 4th Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. Please be advised that today's call is being recorded.

Operator

I would now like to hand the call over to Lori Wright, Vice President of Investor Relations and Treasurer. Please go ahead.

Speaker 1

Thank you, Latif. Good morning, everyone, and welcome to Evergy's Q4 call. Thank you for joining us this morning. Today's discussion will include forward looking information. Slide 2 and the disclosure in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations and include additional information on our non GAAP financial disclosures.

Speaker 1

The releases issued today, along with today's webcast slides and supplemental financial information for the quarter full year are available on the main page of our website at investors. Evergy.com. On the call today, we have David Campbell, Evergy's President and Chief Executive Officer and Kirk Andrews, Executive Vice President and Chief Financial Officer. David will cover our 2021 highlights and overview of our recently filed Missouri rate cases along with other regulatory and legislative priorities. Kirk will cover in more detail the Q4 and full year financial results, information on sales trends and provide an outlook of our 2022 objectives.

Speaker 1

Other members of our management are with us and will be available during the question and answer portion of the call. I will now turn the call over to David.

Speaker 2

Thanks, Laurie, and good morning, everyone. I'll begin on Slide 5. This morning, we reported full year 2021 GAAP earnings of $3.83 per share compared to $2.72 per share in 2020. Adjusted earnings per share were $3.54 in 20.21 compared to $3.10 in 2020. These results reflect strong execution relative to our objectives for the year.

Speaker 2

We entered 2021 with a midpoint guidance of $3.30 per share, in line with our 6% to 8% target growth rate range. We were able to deliver $3.54 per share, representing a 14% increase over 2020 and a 7% increase over our initial guidance midpoint. Kirk will discuss the drivers of this year's results as part of his remarks. A critical part of the company's 5 year sustainability transformation plan involves a comprehensive program to modernize our grid and invest in infrastructure. We advanced this capital plan in 2021 deploying $2,050,000,000 or $100,000,000 higher than our Investor Day estimate to replace aging equipment and improve reliability, resiliency and security.

Speaker 2

We also maintain our focus on advancing affordability and regional rate competitiveness. Since 2017, we have delivered a 4.2% overall average rate reduction to our customers. At the same time, we have reduced our total operating and maintenance expenses by 18% since 2018, enabling us to pass on these cost savings in our upcoming Missouri and Kansas rate cases. In 2021, our total CO2 emissions We're 46% below 2,005 levels, reflecting strong progress relative to our long term emissions reduction targets. And last but certainly not least, we continue to prioritize constructive interactions with our key regulatory and legislative stakeholders.

Speaker 2

In 2021, we wrapped up the STP dockets in both Missouri and Kansas and securitization legislation was enacted in both states. We expect that securitization will serve as a helpful tool in managing the company's ongoing fleet transition in the coming years. On Slide 6, you'll see our recent earnings and dividend growth trends. As we've emphasized over the past year, consistent execution The $3.53 midpoint of our 2022 adjusted EPS guidance tracks with a 7% compound annual growth rate from 2019, which was Evergy's 1st full year as a company. This is squarely in line with our targeted long term annual earnings growth of 6% to 8%.

Speaker 2

Alongside the earnings, you'll see the attractive dividend growth that is tracked within our 60% to 70% dividend payout policy. I'd like to thank my fellow Evergy employees for their continued focus and teamwork in driving these results, overcoming the challenges of another unprecedented year, including extreme weather during winter storm Yuri and the ongoing pandemic. We look forward to working together to further advance this track record of execution. As noted on Slide 7, we've made significant progress on emissions reductions as we've transitioned our generation fleet over the last decade and a half. Since 2005, we've reduced carbon emissions by nearly half, while reducing sulfur dioxide and NOx emissions by 98% and 88%, respectively.

Speaker 2

Our renewable energy portfolio is approaching 4.5 gigawatts and we've responsibly retired nearly 2.5 of fossil generation over the last 15 years. Our updated integrated resource plans, which were filed last spring, Outlined our intention to add nearly 4 gigawatts of renewable generation and retire nearly 2 gigawatts of coal over the next decade. In 2021, nearly half of the electricity we provided to customers came from carbon free sources. And we are on pace to reach our goal of a 70% reduction CO2 emissions from 2,005 levels by 2,030 with a long term objective of net zero carbon by 2,045. Slide 8 summarizes our 5 year capital expenditure plan, which totals $10,700,000,000 from 2022 to 2026.

Speaker 2

On a comparative basis, the current 2021 to 2025 plan is in line with what we presented at our Investor Day last September, with some timing shifts reflected in higher base CapEx in 20212023 and slight reductions in the other years netting to a roughly $100,000,000 increase overall. With the addition of 2026, the rolling 5 year capital expenditure plan is $235,000,000 higher in the 2021 to 2025 plan. The largest portion of our infrastructure investment is targeted towards transmission and distribution. The program is focused on replacing aging equipment and modernizing the grid, driving benefits for our customers by improving reliability, enhancing resiliency and the ability to withstand extreme weather, upgrading customer systems and the customer experience and increasing security. As we advance the use of smart grid technologies and transition towards a lower cost, lower emissions generation fleet, Our investments will also enable us to reduce costs to serve customers, which helps to create a virtuous circle as we pass on these savings.

Speaker 2

Slide 9 summarizes our progress in driving cost savings and capturing efficiencies and how we work. Enabled by the 2018 merger and a comprehensive program across the business, We have reduced costs by $233,000,000 or 18% since 2018. We're laser focused on operational excellence as we leverage investments in technology to operate more effectively and efficiently. We're also building more and more flexibility into our generation operating model In the Southwest Power Pool market, which continues to see an increasing penetration of renewables generation. And we're not done as we are targeting a further 11% reduction in total O and M by 2025 as part of our 5 year plan.

Speaker 2

Thus far, we've been able to manage the impact Inflation on our O and M costs and we have developed plans to capture the vast majority of our targeted savings. The back half of twenty twenty one brought increasing pressures on fuel and purchase power costs as has been seen across the country, typically at higher levels elsewhere than what we've seen in our jurisdictions. And it appears that those trends may continue in the current macro environment and geopolitical context. Affordability and improving regional rate competitiveness are core elements of Evergy's strategy. As shown on Slide 10, since 2017, Evergy has been able to reduce rates by an average of 4.2%, outpacing regional peers and at a level well below inflation.

Speaker 2

On the slide, we lay out how we've been able to deliver these savings across each of our 4 jurisdictions from 2017 to 2021. This topic remains at the forefront for our customers and stakeholders. And going forward, maintaining affordable rates will continue to be featured as a priority objective in our 5 year plan. Turning to Slide 11, I'll give an update on our ongoing Missouri rate reviews, which we filed in January. Starting on the left hand side with Missouri Metro, we have requested a $44,000,000 rate increase, including the rebase of excuse me, excluding the rebase of fuel, based on a 10% return on equity, a 51.2 percent common equity ratio and a projected $3,100,000,000 rate base as of the proposed May 31, 2022, crew update.

Speaker 2

The primary drivers of the rate request include our increased infrastructure investments, which improve reliability, enhance customer service and enable the company's transition to cleaner energy resources, updated depreciation rates that better align with The remaining lives are assets and increased property taxes. These increases are significantly offset by roughly $55,000,000 of lower annual operating costs, savings that we are pleased to be able to pass on to customers. Moving on to Missouri West, we requested a $28,000,000 rate increase, excluding the rebase of fuel and based on a 10% return on equity of 51.8 percent common equity ratio and a projected $2,500,000,000 rate base as of the proposed true update. Missouri West rate request drivers are similar and Include an increase from infrastructure investments, updated depreciation rates and increased property taxes partially offset by ongoing customer savings and cost reductions of roughly $57,000,000 per year. These savings effectively lowered the rate increase request by more than 60%.

Speaker 2

The Missouri West case also includes the handling of our previously retired Sibley power plant. We've been deferring the revenues associated with the foregone O and M, resulting from the plant's retirement in 2018. As part of this case, we've offered to return these revenues back to customers over the next 4 years, which would reduce annual revenues by roughly $10,000,000 that with no impact on earnings. To summarize, we believe that the pending Missouri rate reviews Are relatively typical and straightforward with 2 main elements: 1st, passing on the benefits of cost savings and second, adding infrastructure and grid modernization investments that are consistent with and advancing objectives of Missouri policymakers and stakeholders. We're excited about the benefits that these investments Now the procedural schedule is not yet final, but on the bottom of Slide 11, you'll see our estimated timeline from here.

Speaker 2

We expect staff and intervenor testimony will be filed in June with rebuttal testimony in July, potential hearings in early September And finally, commission orders in November. If approved as filed excluding fuel, the rate request would represent an increase of 5.2% for Missouri Metro customers and a 3.8% increase for Missouri West customers, both of which are well below the rate of inflation we've seen since our last rate cases. Moving to Slide 12, I'll provide an update on other regulatory and legislative priorities, beginning with our predetermination docket in Kansas. As a reminder, last September, we initiated a proceeding to approve the elimination of coal at the Lawrence Energy Center, retirement of Lawrence Unit 4 with with recovery through securitization and the addition of 190 megawatts of solar generation in Kansas. Later in the year, last year, we filed a request To temporarily suspend the procedural schedule to allow Tan to develop more clarity on solar tariffs, the potential for tax incentives to improve customer economics and the resolution of supply chain and customs issues that could impact pricing and availability.

Speaker 2

Given the lingering uncertainty around those issues rather than keeping this docket on hold, We have withdrawn the filing and plan to file a new application once definitive agreements are reached with the solar developer. The elements of the plan are unchanged. We still expect to seek predetermination approval for the cessation of coal, retirement of Lawrence IV and the addition of 190 megawatts of solar. While this may impact the timing of the solar farm addition, it does not have a meaningful impact on our earnings expectations as the structure for the new solar farm Pursuit in this case, under which the earnings profile is tied to the time that Evergy can monetize the value of the ITC tax benefits of the project in the back half of this decade. In parallel, we are in the process of evaluating competitive proposals for up to 1 gigawatt of new owned wind resources that would come online in the 2024 to 2025 time frame.

Speaker 2

Kirk and his team are overseeing our renewables efforts and he will highlight our priorities in his Other regulatory items include recovery of costs incurred during winter storm Yuri. In Missouri, we are awaiting commission approval of Our request to defer approximately $300,000,000 at Missouri West with plans to securitize the costs and smooth the impact on customers over multiple years. We are also seeking approval to defer and return approximately $25,000,000 of net benefits to Missouri Metro customers. We expect to reach resolution on the deferral request in the 2nd or Q3 and a commission decision on the securitization of the Missouri West cost by the end of the year. In Kansas, last month, the KCC staff filed its recommendation to approve our recovery plan of approximately $115,000,000 of Urie costs in Kansas Central and the return of approximately $35,000,000 of benefits in Kansas Metro.

Speaker 2

We are working closely with all parties and we expect to finalize the details of the path forward in the first half of this year. In 2021, we filed our integrated resource plans in Missouri and Kansas, providing an updated 20 year roadmap for our generation fleet transition in conjunction with our announcement of our long term emissions reduction targets. We will file our annual update to the IRP in both states by July 1. I'll wrap up this slide with a legislative update focusing on Missouri. Bills have been introduced to extend and update legislation that was passed in 2018, widely referred to as plant and service accounting or PISA.

Speaker 2

We've been utilizing this legislation since 2019, supporting our investments in grid modernization and improved reliability. We believe that the bill is good policy and enjoys wide support, but whether it ultimately advances this year will depend most likely on unrelated issues that may receive the bulk of legislative attention. We are focused on working with key stakeholders to advance the peace extension this But given the provisions of the currently existing piece of legislation, this is an initiative that we would also be able to pursue next year. In addition, in Missouri, we are pursuing mechanisms to enable the efficient recovery of costs outside of our control, notably property taxes. Before handing it over to Kirk, I'll wrap up on Slide 13, which summarizes the Evergy value proposition.

Speaker 2

The left side of the page covers the core tenants of our strategy to advance affordability, reliability and sustainability. Through a relentless focus on our customers supported by stakeholder collaboration, sustainable investment and financial and operational excellence. The right hand side of Slide 13 features what we believe are particularly attractive and distinctive features for Evergy, given our business mix and geographic location. We are excited about the opportunities for our company and we are committed for the sustained effort required to deliver against our high performance objectives. I will now turn the call over to Kirk.

Speaker 3

Thanks, David, and good morning, everyone. I'll start with results for the quarter on Slide 15. For the Q4 of 2021, Evergy delivered adjusted earnings of $37,000,000 or $0.16 per share compared to $64,000,000 or $0.28 per share in the Q4 of 2020. 4th quarter adjusted EPS was driven by the following items as shown on the chart from left to right. First, we had unseasonably warm weather across The end of the quarter, particularly in December, resulting in significantly fewer heating degree days as compared to the Q4 of 2020 and driving $0.07 of unfavorable contribution from weather.

Speaker 3

When compared to normal weather, assumed in our original plan, The mild weather negatively impacted our results by $0.10 The unfavorable weather was offset by a 4% increase in weather normalized demand or approximately $0.08 per share. Relative to our expectations for the quarter, weather normalized demand was approximately $0.04 favorable as we began to see demand recovery, which we previously forecasted to be delayed into 2022. Stronger performance in our Evergy Ventures Power marketing businesses drove $0.03 of EPS versus the Q4 of 2020, which offset $0.03 of lower EPS from COLI. As we did not receive proceeds during the Q4 of 2021, while the prior Q4 included the majority of our COLI proceeds in 2020. Income tax related items drove a net decrease of $0.04 per share.

Speaker 3

This was primarily due to the impact of the Kansas income tax Rate exemption, which led to a lower tax yield in the 4th quarter as well as the expiry of certain tax credits in November of 2020. Finally, shown in the final two bars, adjusted EPS for the quarter was $0.09 lower due to the expected timing and phasing of certain cost items. $0.06 of this variance was due to the realization of higher O and M, including bad debt expense during the Q4, resulting from timing shifts within the year. The remaining $0.03 as shown in the final bar was the result of pulling forward certain cost items from future years. Of note, our 4th quarter and adjusted EPS for the full year Excludes the mark to market impact of 1 of our Evergy Ventures investments, which went public during the quarter via a SPAC acquisition.

Speaker 3

We continue to expect to monetize this investment when the lockup restriction expires later this quarter and have elected to adjust the gains and losses related to investments, which are subject to a temporary sales restriction such as this one. I'll turn next to full year results, which you'll find on Slide 16. For 2021, adjusted earnings were $813,000,000 or $3.54 per share compared to $716,000,000 or 3.10 per share in 2020. As shown on the slide from left to right, the key drivers of this 14% year over year increase Include the following: favorable weather, which benefited us through the 1st 3 quarters of the year, was partially offset by the warmer than normal 4th quarter and drove a $0.17 higher EPS in 2021 versus 2020. Weather Was 0 point 0 $8 favorable compared to normal weather assumed in our original 2021 plan.

Speaker 3

Weather normalized demand increased about 1.6% and contributed $0.07 versus 2020. As expected, revenues from higher FERC transmission investment resulted in a $0.13 increase. Favorable income tax related items of $0.07 were primarily driven by the impact of the Kansas income tax exemption and higher amortization of excess deferred income taxes, partially offset by lower tax credits. As shown in the next three gray bars, Higher depreciation and increase in property taxes, lower year over year COLI proceeds and a slight year over year increase in share count combined led to a $0.12 year over year decrease. And finally, stronger year over year performance in Power Marketing and Evergy Ventures, partially offset by the pull forward of costs from future years I mentioned during my Q4 comments, combined to drive EPS $0.12 higher.

Speaker 3

While the net effect of these items help us drive our strong year over year results into 2021, we don't expect this outperformance to be recurring and our guidance for 2022 reflects a more typical earnings contribution from these areas. Turning to Slide 17, I'll provide a brief update on the recent sales and customer trends. On the left hand side of the slide, you'll see that partially aided by weather, Our retail sales increased 3.1% in 2021, with all three sectors experiencing year over year Increases led by a more robust increases in particular in commercial and industrial. Looking to the right side of the slide, after adjusting out the effects of weather, Retail sales increased 1.6% for the full year. The industrial sector, which is least weather sensitive, saw the largest increase, primarily driven by the oil and petrochemical industries.

Speaker 3

Commercial demand also increased nearly 3% year over year as both employees and customers return. Weather normalized residential sales decreased in 2021 as some employees returned to in person office work. The overall 1.6% demand increase was below our original expectation of 2%, which assumed a more accelerated pace of return to pre COVID conditions, in particular in the commercial sector. Underlying the continued growth in residential and commercial customers is a strong labor market. Highlighted by Kansas and Kansas City Metro, unemployment rates of 2.2% and 2.5%, respectively, beating the national unemployment rate of 3.7 Manufacturing and logistics industries, in particular, have seen strong employment growth that continued to a solid economic recovery.

Speaker 3

Although as I mentioned last quarter, the Ford plant in our jurisdiction has been experiencing headwinds from chip shortages, the plant has begun to ship its all new electric E transit cargo van produced right here in Kansas City. Overall, we experienced a positive bounce back in the 2nd year of the pandemic and our economy is well positioned As a result, we expect about a 1% increase in weather normalized demand in 2022, which is part of the bridge to our reaffirmed 2022 adjusted EPS guidance of $3.43 to $3.63 which I'll review next on Slide 18. Starting on the left side of Slide 18 and beginning with 20 21 We removed the $0.08 impact of weather compared to normal from our 2021 results as well as the $0.12 impact from the outperformance of our Power Marketing and Evergy Ventures businesses, again, net of the cost that we pulled forward into 2021. Although we expect these businesses to continue to contribute earnings going forward, this adjustment is merely associated with the outperformance in 2021, leaving their expected contribution in our 2022 guidance. After adjusting for these items, the drivers to our 2022 guidance midpoint include $0.08 of increased retail demand.

Speaker 3

And overall, again, this represents about 1% increase in year over year weather normalized demand. About half of this increase reflects the realization of more normal demand in 2022, which we'd originally expected to occur in 2021. This shift is due to the observed delay in returning to a normal demand mix due to lingering COVID effects in the past year. The remaining portion reflects normal year over year load growth in 2022. We expect approximately 0 point transmission revenue as we continue to make investments to improve transmission infrastructure.

Speaker 3

And finally, additional O and M savings and the expiry of merger related bill credits And when combined, serve to offset the impact of higher depreciation expense, not yet reflected in rates. While other items both positive and negative drive the remaining $0.02 of the year over year increase. Turning next to Slide 19, our strong results in 2021 reflect our ongoing focus on continuing to build a track record of consistent execution. We've reaffirmed our adjusted EPS guidance of $3.43 to $3.63 in 2022, as well as our long term compounded annual EPS growth rate of 6% to 8% from 2021 to 2025, which is based on the midpoint of our original 2021 guidance. As David mentioned earlier, our updated 5 year CapEx plan from 2022 to 2026 totals $10,700,000,000 and is consistent with a targeted rate base growth of 5% to 6% from 2021 to 2026.

Speaker 3

These financial targets enable us to achieve our overarching objective to improve affordability, Enhance reliability and customer service, while advancing our sustainability and transitioning our generation fleet. In order to realize these objectives over the multi year plan, We are focused on achieving our key goals in 2022, which I'll summarize on Slide 20. Building on the positive momentum from our strong 2021 results that exceeded our original guidance, we remain focused on continuing to meet or exceed our financial targets, including our reaffirmed 2022 guidance range, while driving operational efficiencies and maintaining our balance sheet strength. Over the last few years, we've worked hard to invest in our utilities to improve reliability and enhance customer service. Our successful efforts in driving efficiencies to reduce operating costs since the merger now allow us to pass approximately $110,000,000 of annual savings back to our customers in Missouri to help offset a significant portion of the rate request, allowing us to deliver the benefits of those needed investments while keeping rates affordable for customers.

Speaker 3

This year, we look forward to a constructive outcome in the Missouri rate cases as the next important step in achieving our objectives for the benefit of all stakeholders. On the renewables front, as David mentioned earlier, we've recently withdrawn our predetermination filing in Kansas, which included the addition of 190 megawatts of solar. We're actively working with the developer to resolve remaining issues to finalize the definitive agreement for this project and file a new application with the KCC later this year. Since our initial filing last fall, we've completed much of the documentation associated with the project. The only significant items which remain relate to issues arising from global supply chain uncertainty and customs enforcement leading to importation delays.

Speaker 3

We are focused on resolving these remaining issues, while ensuring certainty of schedule and affordable costs for the benefit of our Kansas customers. And should the expansion of tax incentives for solar, including the PTC and direct pay, ultimately see passage, this could serve to improve project economics for our customers as well. Turning to wind in the Q4 of 2020, we launched a request for proposal process for up to 1 gigawatt of new wind in order to achieve our targeted 300 megawatts in 2025 100 megawatts in 2025. We saw robust participation and have since shortlisted our initial bids to a select group of projects, which when combined, represent a multiple of our targeted 800 megawatts. The proposals received provide us the opportunity to select the projects that offer the best balance of risk and price for our customers.

Speaker 3

We are targeting completing due diligence and negotiating definitive agreements through mid-twenty 2 with a notification to proceed on construction issued to developers in the first half of twenty twenty three. And finally, since we introduced the concept of potential PPA buy ins on Investor Day, we've made progress in engaging with project owners and continue to believe that there is a path to make this opportunity a win win win for our customers, shareholders and counterparties. While we saw the viability of this strategy as being enhanced by potential federal renewable tax reform and the proposed refresh of the 100% PTC, We believe there is potential for this opportunity even if tax reform does not see passage. We're currently involved in active discussions with multiple counterparties with the objective of executing at least one buy in this year. With that, I'll hand the call back to David.

Speaker 2

Thank you, Kirk. So for those in the call, we appreciate your time today, and we'd like to open it up to questions.

Operator

Our first question comes from the line of Shahriar Pourreza of Guggenheim. Your line is open.

Speaker 3

Hey, good morning, guys. Good morning, Shar. Good morning.

Speaker 4

David, Kansas seems like it's Been a little bit noisy or maybe even somewhat hostile to actually both you and the KCC. We saw 1 Republican obviously demoted from a committee because of an op ed he wrote. There was obviously recently legislation floating around for a price Cap, some lawmakers have been really honed in on the KCC. I guess, could we just get any color on your conversations in recent weeks there? And Any efforts to sort of pivot the conversation?

Speaker 4

It's just been a little bit more noisier than we're used to.

Speaker 2

Sure, it's a good question. We're in the legislative session, which is always active. Look, I think in Kansas, there's an active dialogue and we appreciate that. Part of why you see us feature the rate reductions that we've been able to deliver and our improving rate competitiveness. And I would describe it as a lively conversation, but there's balanced input from all sides.

Speaker 2

There was a presentation, for example, that KCC staff gave, in one of the committees in the Senate committee that highlighted how our rates over the last 10 years in Kansas Central have been flat to declining over 10 years, so well below the rate of inflation. And that was certainly noted. And of course, you recall how securitization legislation was passed last year with overwhelming majorities in both houses. So We're very focused on regional rate competitiveness. We know how important that is.

Speaker 2

There are some stakeholders in the state and there's a variety of opinions around renewables and others as Reflected in a variety of opinions around our country, but we think it's a constructive dialogue overall and we're certainly in the middle of it and we're very focused on the same priorities that Our key stakeholders have in the state.

Speaker 4

Got it. Thank you for that. And then just lastly, maybe for Kirk. Just maybe just On the buy in, how does that interact with the IRP update process? And just remind us, are any buy ins in the CapEx plan or is this sort of an opportunity that's incremental?

Speaker 3

Sure, Sharon. So the first answer to the second part of that question is none of those buys are Included in our capital expenditure forecast that would be flex up, if you will. In terms of the overall process around the IRP, as the PPAs that underpin those buy ins Already support our renewables and our ability to serve load. This would simply be a shift in perspective of how we deliver that in the near term, if you will, Right. So we'd be replacing an existing resource that we avail ourselves through a PPA with an owned resource for the same number of megawatts.

Speaker 3

It's really the repowering on the back end of that and the extension potential for it, which is obviously beyond the scope of our at least our 5

Speaker 2

Thank you, Shahriar.

Operator

Thank you. Our next question comes from Durgesh Chopra of Evercore ISI. Your line is open.

Speaker 5

Hey, good morning team. Thank you for taking my question. Kirk, just following up on the PPA buyout opportunity. In terms of like basically as I understand it, right, this is basically a PPA converted into a rate base. First, am I thinking about that correctly?

Speaker 5

And then do you need to sort of get regulatory approvals for it to be ultimately earnings accretive? And what does the timeline look like?

Speaker 3

Well, the timeline, as I said, we are Currently actively involved in discussions with multiple PPA counterparties about a potential buy in, which is why as I indicated, we feel At least targeting one of those to occur this year. Obviously, it's a 2 party negotiation. So we've obviously got to get the closure on that. In terms of the regulatory process, directionally speaking, I think the way you described it is correct. We're basically taking a PPA pass through and converting that to capital, ultimately with the focus being for the benefit of the customer, I.

Speaker 3

E, the target and the first step of that is, If we can buy in that PPA at an attractive overall capital price, so that the associated impact on rates with that, if you will, rate based investment Provides customer savings, that's the most important step. In terms of how that gets adjudicated, it would go through a similar process as really any rate based investment, right? If that was Kansas, we'd go through predetermination of this in Missouri. We'd absolutely pursue that through different means in an ordinary rate case context. Combining that with repowering, it's just an increase in the overall capital, if you will, or an extension of that timeline, albeit rather than a pass through, It would be a rate based investment within all in savings, right?

Speaker 3

I think about that almost like a blend and extend type approach, if you will.

Speaker 5

That makes a ton of sense. Thank you for explaining that, Kirk. And so essentially, I mean, the earnings accretion comes from rate basis, The investment going through future rate cases, if you will. Just maybe shifting gears, can you just talk about The O and M savings, that's been a sort of very impressive execution on that front. How are you thinking about sort of inflation pressures, Supply chain constraints, are those hurdles for you to achieve your target for 2022 and beyond?

Speaker 5

And how are you tackling those? Thank you.

Speaker 2

So, it's a good question thus far and obviously the macro environment that continues to be dynamic. So one more highly attentive to as is everyone. Thus far, we've been able to manage the inflationary pressures on the O and M side. It has some impact the supply chain issues have some impact on the cost and availability on the capital side. We've also been able to work through those as well.

Speaker 2

And we're confident that we can continue to manage it. In our 2022 plan, as you You may have seen in the waterfall that Kirk walked through from 2021 to 2022. It's an overall $0.06 uplift in O and M. So we have some cost savings this We also had some impact last year from the outperformance of the unusual outperformance in our unregulated business did have some impact on our Cost modest, but that's part of the uplift we see going to next year. But it's an ongoing effort that we're going to drive 'twenty three, 'twenty four and 'twenty five.

Speaker 2

So we have as part of our 5 year plan, we already have teams in place that have identified The bulk of those savings and how we're going to achieve them and we'll be in execution mode in the back half of this year and in the upcoming years. So it's got to take the same effort. It's been a comprehensive program across our whole company. Kevin Bryan, our Chief Operating Officer is coordinating that effort on our behalf, but the company's got a great track record in this area. We know how to do it.

Speaker 2

It's going to take sustained execution. So we don't want to We certainly acknowledge that, but we have the tools and I think the plans in place to make it happen.

Speaker 5

Got it. Thank you for taking my questions. Appreciate

Speaker 2

Thank you.

Operator

Thank you. Our next question comes from Michael Lapides of Goldman Sachs. Please go ahead.

Speaker 6

Hey, guys. Thank you for taking my question and congrats to a strong year. I want to talk about the PPA buy ins as Well as any build own transfer. Look, Congress obviously hasn't been able to get anything At the finish line, we'll see if they can try to do something in the lame duck session at the end of this year. It doesn't look like anything's happening before the midterms.

Speaker 6

Just curious, do you think about pulling forward all of your renewable plans to capture what could be the Safe harboring benefit that some of the developers who themselves may be thinking about repowering or Thinking about building new solar, bringing forward the safe harbor provision benefit that would happen because They've got it safe harbored at last year or 2 years ago PTT or ITP level versus what this year's or next year's would be.

Speaker 3

Sure. It's a good question. I mean, certainly, we thought about that, at least in the context of the buy ins and repowerings around that safe harbor. That would obviously require us to make a capital outlay to obviously safe harbor that component of it. We'd certainly be mindful of doing that, but we'd also be reasonably cautious about that around the context of Having line of sight or certainty of our ability to get that PPA buy in and repowering negotiated, but that's certainly something that we're looking at.

Speaker 3

At the same time, we're hopeful that ultimately, obviously, in the current political environment, there's a lot of distraction and chaos. But If ultimately those provisions of Build Back Better ultimately do get passed, that obviously gives us greater flexibility. But we're certainly mindful of availing ourselves of that option in in context from a Safe Harbor standpoint.

Speaker 2

And Michael, all I'd add is the yes, the from a this is David. So from the Perspective of the integrated resource plan and our multiyear capital expenditure plan, we're we look at the overall level of capital we're spending, we look The overall rate impacts and affordability, we do think to bring on renewables is a win win because it's typically lower cost as well as lower emissions, but we are going to track with the program with respect to the IRP. Part of the rationale for why there is some sequencing shift Wind relative to solar was in consideration of some of those factors around a safe harbor. So the category of truly new development, We're sensitive to all those various factors and balancing them. Of course, we have an IRP update that we'll do this year and it's a dynamic market and we're going to be responsive to what we see.

Speaker 2

The PPAs are a little bit different, the buy ins and repowerings and that that's, as Kurt described, an existing set of resources. So that's more complicated to be able to negotiate with additional set of counterparties, obviously. But for those, if we have opportunities that are sooner, we'll certainly look for that. But it's you're just subject to what you can accomplished with the counterparties. Though of course, those are all basically wins.

Speaker 2

So if you're talking about the PPA repowering, it's really on the win side. But the safe harbor point that you made It's relevant and we'll seek to do as many of those as we can, but within the constraints of what the counterparties will do with us.

Speaker 6

Got it. And then when we think about the buy in and Repowering, can you just remind us how rate making for that would work? Meaning, if you bought the asset First, how do you get the acquisition in the rates? And then if you repower it down the road, how does the capital spend to repower the asset get in the rates?

Speaker 3

Well, first of all, I could come in 2 forms, right? Buy in and repowering can be a single negotiating with a counterparty that we can contract with on both elements of that. Obviously, that would be the owner of the existing asset, who is our counterparty under the PPA And a potential repowering initiative almost again to kind of a build transfer aspect with that same counterparty. Negotiating those in tandem, that's sort of my blend and extend example. So it's sort of a single view of the capital And again, that would need to be viewed by us, especially through the lens of affordability for our customers.

Speaker 3

It only makes sense for

Speaker 7

us to do this as

Speaker 3

a first order If we can substantiate that capital investment when combined to result in a savings to the customer Relative to the PPA that's being passed through and obviously supplemented by greater certainty of what those costs are in the long run. There is the possibility that there Could be a negotiating of a buy in and a later repowering, that would really be a bifurcation of really 2 capital investment considerations, right. A little bit more challenging in one sense, because you've got to substantiate the affordability and the prudency of both of those two things individually, which is why I think it's a cleaner path to do them combined, but there are opportunities to do both. That would mean we'd go through and say, Here's the capital investment to replace this existing PPA pass through. Here's the savings around that.

Speaker 3

That would be separately adjudicated and then we'd approach the repowering separately.

Speaker 6

Got it. And then finally, can you get them in the rates between rate cases or you have to can you remind me, I thought Kansas had a tracker or a rider where you Put it in, but can you remind me on the Missouri rule as well?

Speaker 3

Not a tracker on the Missouri side, if I understand what Your question is there.

Speaker 6

Got it. So you just have to wait for the next GRC to get it done?

Speaker 3

Correct. Yes, that's right.

Speaker 6

Thanks, guys. Much appreciated.

Speaker 2

Yes. Michael, again, all I'd add on that is that the you could take it through predeterminations. So you get a sense for the Whether how it will be treated in the upcoming rate case and we've got a rate case scheduled for 2023 as you know. And following a rate case, you can do an abbreviated rate case 6 months into 2024. So there are a couple of different pathways you can go down.

Speaker 2

Starting with the predeterminations to get comfort as how it will be treated, then you can do it either in General rate case or an abbreviated rate case immediately following one that you complete.

Speaker 6

Got it. Thank you, David. Much appreciated, guys.

Speaker 2

Thank you.

Operator

Thank you. Our next question comes from Julien Dumoulin Smith of Bank of America. Your question please.

Speaker 8

Excellent. Hey, good morning. Thanks team for the time. Perhaps listen, I don't want to hammer too much on despite an opportunity. But just you say that you've got a few contracts, at least one here.

Speaker 8

What's the order of magnitude of megawatts that we're talking about here? Again, I'm not trying to pin you guys down. Just curious if you can speak to it?

Speaker 3

Yes, sure, Joanne. First of all, we're focusing on that subset of Those PPAs that total for us about 3,800 megawatts is I think we've had that as part of our presentation in Investor Day. There's about a little more than 1 about 1.25 gigawatts of that where the PTCs are either already expiring or approaching expiring, that's kind of the sweet spot. So we're really currently focusing on counterparties in that particular category. I would say in the near term around our objective of at least getting one of those executed this year, which is our goal, 100 to 200 megawatts Would probably be a good rule of thumb to think about.

Speaker 8

Right. Effectively establishing a framework for how to scale that up to around that 1, 2, if you can

Speaker 3

I think that's a fair way to characterize it?

Speaker 2

Yes. At some level, Jim, we view that PPA base as a pipeline. Now it's giving you Some of that pipeline is near term and longer term, but that's a we view that as a long term pipeline for us.

Speaker 8

Absolutely. Yes, that's transparent. I appreciate that. And then related, I mean, I saw this bylaw tweak, if I can call it that, to have a larger shareholder of 15% be able to call a meeting. Admittedly, I know we've been through a lot.

Speaker 8

What drove that specific change of late here, if you can speak to it?

Speaker 2

Sure. That we thought that was just an improvement to our governance process, Julien, we didn't have the ability for a shareholder to call that kind of meeting. So we in evaluating our overall governance practices, We saw that it would be muted as an enhancement to create that ability to call a meeting. So we looked at where the thresholds were for peer companies, where other companies are. A lot of companies still don't offer that, We wanted to add that as an additional capability of shareholder friendly proposal.

Speaker 2

But I view that as I put that in the category of our overall evaluation of our ESG Policies and approaches are trying to continue to improve on those.

Speaker 8

Got it. I think you alluded to this Earlier, just in brief here, the Kansas rate cap legislation, I mean, how much support does the proposed law that would GAAP increase that one that appear have. I mean, tough question to ask, but curious if you can provide any context as to the positioning here?

Speaker 2

We do not think that it has Broad support, we don't think that it's going to even get out of committee. So it's lots of proposals get offered. I've seen that over my career and all the legislative session that are seen in various states, but now we don't even think that will get out of committees. I had some discussion, but we don't think it's got wide support.

Speaker 8

Excellent. Thanks for closing out.

Speaker 2

You bet. Thank you, Julien, for joining us.

Speaker 8

Have a great day. Cheers.

Speaker 2

You too.

Operator

Thank you. Our next question comes from Nicholas Campanella of Credit Suisse. Please go ahead.

Speaker 9

Hey, good morning. Thanks for taking my question. I was just curious in light of the comments on the 190 megawatts of solar. You talked about looking for more clarity on tax incentives, some supply chain pricing impacts. Can you just help us think about how that translates to the overall Roughly $2,000,000,000 renewables CapEx program that you've outlined here.

Speaker 9

I know it's fairly back end loaded, but are you kind of taking a Wait and see approach to this capital, if it's so far out or does the CapEx that you have in the slides today kind of reflects the supply chain and pricing pressures that you're seeing? Thanks.

Speaker 2

So I'll start and then hand it over to Kirk. So the I would characterize the solar project in It's pretty unique and that it's got that market based structure and that's really because of the ITC benefits that are currently in place and how to Take advantage of those most effectively working with our counterparty. And we're seeking a level of certainty in that agreement. And that's part of why we decided to withdraw the docket and we'll file it once we have the certainty. So it's really related to supply chain issues in And we're seeking the certainty because of the importance of the affordability point that we mentioned.

Speaker 2

But it's because of the structure of that It's a minimal contributor earnings in 2024 and 2025. Our wind additions that we've got Slated in 2024 and 2025 at the end of both years, we believe we'll be able to pursue it in a more traditional way. So there is Some supply chain pressure, but obviously those are a little out further in time and those reflect our latest view in light of what we've seen In the RFP process that we went through, we got some pretty robust bids. So that continues to be our expectation. It's the other ongoing wildcard.

Speaker 2

Obviously, Macroeconomic situation, it's pretty dynamic, but that reflects our best expectation as of now.

Speaker 3

Kirk? Yes. The only thing I'd add to that on the 190 Megawatt solar project is, as David characterized it, I agree, unique around some of those supply chain issues. I think I've mentioned in my remarks, Coming out of our initial predetermination filing, there was still some lingering uncertainty about what the administration was going to do around whether or not they were going to extend and what the scope of that extension might look like when it comes to tariffs. And there are existing I mentioned this as well in terms of customs and border protection.

Speaker 3

There are these withhold release orders around concerns around certain province from China and forced labor provisions, which are kind of holding things up a little bit. So those are the best two examples of the uncertainty, and I think that's More unique to solar in this particular project, we wanted to get some clarity on that. Our counterparty wanted to as well. We've obviously seen The Biden administration give clarity around the at least around what their intentions are in terms of the tariffs. So it gives us a better backdrop to do that.

Speaker 3

And We said it was prudent to do so because we're very focused on this next step in our evolution of moving from What's been primarily a PPA dominated strategy to an own renewables dominated strategy, very important to us that that first floor, at least in the solar side, We do so with an eye toward affordability. So we didn't want to move too fast in negotiating this for the sake of getting it done. We wanted to do it with clarity and certainty about, as I said, cost and schedule for the benefit of our customers. And the reason David mentioned the unique nature of that It is not, as David indicated, I think in his remarks, a major contributor in the early years of our plan due to some of the tax aspects of So it gives us a little bit greater flexibility to work through some of those unique issues in the near term.

Speaker 2

Yes, I'll go ahead and describe this Maybe I'd correlate your questions. Even in that we've given earnings guidance or our target growth rate range through 2025. In 2025, the total Contribution from the new renewables in our plan is less than 2% of earnings. So it's a factor we'll continue to watch. We're optimistic we'll be able to make it happen and drive benefits for our customers in doing so, but it's still a relatively modest portion even in 2025.

Speaker 9

Got it. Yes, that's very clear. Super helpful. Really appreciate that. Just on your comments about The higher fuel costs and inflation and trying to translate more savings to customers, obviously, you guys have already Great job in the base plan today, but you're also going to be kind of filing an update to the IRP this July.

Speaker 9

And I'm just curious if we're going to get into a tipping point where there's just an argument to kind of further accelerate some of the fossil fleet and How you're kind of thinking about that in terms of fleet closures? Thanks.

Speaker 2

You bet. So, yes, it's a lost intersection point. Space, but it's still an issue. We hope that it's going to be temporary. In terms of the implications for our generation fleet transition, We try to be thoughtful in our integrated resource plan.

Speaker 2

We'll take the same approach in our update this year and beyond in terms of the pace and sequencing. New renewables do offer some very attractive features in terms of relative cost and relative emissions profile. Now It's hard to accelerate that in a very near term given the supply chain issues, which have had some knock on effects on pricing. So we I would guess as we go through update, you're going to see a similar pacing and sequencing in our plan rather than an acceleration again, because acceleration In our plan rather than an acceleration again, because acceleration runs into some of the you may not be able to achieve the same all the same benefits in terms Lower costs and who knows what's going to happen in Washington, but there is momentum around some features in terms of additional incentives for renewables. Of course, that would driving incremental benefits for customers.

Speaker 2

So you can't wait and depend on something that's uncertain in Washington, but at the same time, If there are some factors over the near term that are raising costs that bounces against rushing into things. And the other dynamic is, I think we'll have to make sure we have a measured pace to this approach. Yesterday in our jurisdiction, there was very low wind and it Very cold weather and the reliability of the nuclear fleet and the fossil fleet was an important contributor. So we think we can manage it over time as we have. Nearly half of the Electricity that we provide our customers was from a recent free sources last year between nuclear and wind.

Speaker 2

So we think we've got been on a great track record. We've been Do that while maintaining reliability, we're going to be focusing on that balance going forward. But to your broader point, I think there's a way to drive that transition and with lowering costs and lowering emissions while ensuring reliability, but it won't happen overnight. It's got to be in a paced program.

Speaker 9

That's helpful. And one more if I can. Just if I'm hearing you right, the PPA buyout opportunities And upside to the capital plan and just as we think about putting more CapEx into the model, what's your ability Just raise CapEx without additional growth equity capital?

Speaker 3

So it's a good question. One of our Primary objectives, as we've said a number of times, we have the ability and we're targeting being able to fund our capital expenditures through our 5 year plan without the need for new equity. We do have some degree of flexibility. Obviously, there is it's not unlimited from an internal generated equity capital standpoint. But I think in the context of my answer to Julian's question earlier, we have enough flexibility at least in the near term to get that targeted at least one PPA buy in done within the context of our plan.

Speaker 3

So we've got enough flexibility to do that, But it's certainly not unlimited, but we're not planning on doing a significant order of magnitude of those, at least in the near term of our 5 year plan. It would be additive, obviously, not only from a capital perspective, but also from an earnings perspective.

Speaker 9

Really appreciate the time today. Thank you.

Speaker 2

Thank you.

Operator

Thank you. Our next question comes from Travis Miller of Morningstar. Your line is open.

Speaker 10

Good morning. Thank you. Good morning. Wondering holistically, if you look at that CapEx program $10,000,000,000 plus and then you think about the regulatory activity that you have going on right now in Missouri and potentially in Kansas here coming up. How could the outcome of those kind of near term regulatory outcomes impact That full CapEx plan and thinking about if things go well, then you might upsize it, things go poorly, might downsize it.

Speaker 10

What are your thoughts there in terms of sensitivity?

Speaker 2

I think we try to be thoughtful in framing A capital expenditure plan that makes sense and drives benefits for customers and is a multiyear program. So it's not a program that we toggle based on Both these rate reviews are pretty straightforward, that are underway in Missouri, and we expect to be very similar in Kansas. In other words, you've got A set of infrastructure investments that we've had the chance to preview and review actually as part of the STP dockets that went on last year and through early this year. I think they're very consistent with public policy in Missouri as reflected in the legislation that was enacted in 2018 and will drive similar benefits in Kansas. We look at our overall program in terms of what we expect the overall rate impacts will be because we're very focused on affordability.

Speaker 2

Our level of rate base growth is a little lower than a lot of our peer utilities. We think that will actually further help us in that regional rate competitiveness, But we still have a robust program. So we always look at it year to year in terms of driving the benefits and reacting to what's Market and that will be the primary lens as opposed to just reacting to what's in the rate case. But again, our expectation is that the rate reviews So we're able to offset a lot of the any potential increases by very sizable annual reductions in costs. So net net, we've got confidence in our program.

Speaker 2

We've got a robust backlog of additional projects we could do that we believe will be beneficial. We've got Pretty old set of infrastructure, even just replacing aging equipment, we've got decades of runway on those. But we've calibrated our overall program what we think makes sense for in our overall rate trajectory.

Speaker 10

Okay, great. That makes sense. You had answered my other questions. So I appreciate the time. Thank you.

Operator

Thank you. Our next question comes from Paul Patterson of Glenrock Associates. Your line is open.

Speaker 7

Hey, good morning, guys.

Speaker 2

Good morning, Paul.

Speaker 7

Good morning. I apologize if I missed this, but For 2022, the Power Ventures, power market, what's the expectation for the contribution for that in 2022? Was it clear to me? I'm sorry.

Speaker 3

So overall, it's Kirk. The contribution to our earnings in 2022 from I'm going to say Power Marketing and Energy Ventures combined, probably about $0.10 Okay.

Speaker 7

And then And again, I'm sorry, but the sales growth for 2022, you said was about 1% and it wasn't clear to me, if COVID I mean, how far I mean, it sounds like you're also still responding to COVID. So longer term non COVID recovery, What's your expectation for sales growth at this point?

Speaker 3

Sure, you bet. So the $0.08 year over year growth I Characterizing what's behind that $0.08 that's about 1% year over year demand growth behind that. About half of that is just the continued recovery from COVID, almost all of which we would have originally expected to occur in 2021. And if you want to think about sort of ongoing Normal way organic growth, it's the other half of that. So call it 50 basis points or 0.5% of that 1% is really the kind of the long term load growth that we

Speaker 7

Okay. And then finally, back to the Missouri PISA case, piece of legislation. My understanding is that without legislation, the PSC would have the flexibility to go with If under the current PISA setup and I realize it's a 3% cap on the total rate And the 2.5%, does the 3% cover fuel or just could you just give us a little bit of a flavor as to the What life under the current piece of under the current legislation is versus what it would be visavis to the proposed legislation.

Speaker 2

Sure. So I'll start off and we've got Chuck Casey with us, who Leads our public affairs and legislative efforts and he can correct me where I go astray. The current legislation, as you noted, it runs through 'twenty three, but Utilities can apply to the commission to continue operating under PISA and the commission can grant up to an additional 5 years, so through 20.80. And in the current legislation, the 3% cap is applicable broadly, so it is inclusive of fuel. Now the legislation that has been proposed to extend and expand PISA lowers the cap, but it narrows it to apply to just the Investments and activities related to PISA.

Speaker 2

So it's a little more tied to cap, a lower cap to the actual investments that you're making and asking for to be treated under the piece of legislation. And the proposed legislation also does not have a sunset provision, So we'd continue. So as I mentioned in my remarks, we are engaging with stakeholders. I think it makes it's good policy. It's consistent with the objectives That we're behind the first the legislation was first passed and we think it would have been advanced successfully.

Speaker 2

And so we're having a good dialogue with stakeholders whether it Passes, it's a busy legislative session and other factors may sort of take all the oxygen in the room at the end of the day. But we're having good discussions and we'll continue to advance. And If it's not something we can accomplish this year, then it will continue to be initiative next year. And as you've noted, as we discussed, it is something even without new legislation, you can Ask the Public Service Commission to extend and that is a request we could make next year.

Speaker 7

Okay. And just in terms of with the increase in fuel prices that we're seeing and everything, is there a significant amount of Deferred fuel recovery or are you projecting potentially, I mean, how is the outlook for fuel recovery Or any other, I guess, call streak, I mean, is there a big are there significant deferrals? Let me ask it this way. Are you seeing significant Levels of deferred expenses accumulating here or what's the outlook for that under the current setup?

Speaker 2

Yes, we have seen some increase in deferrals. It varies by jurisdiction for us. So our metro jurisdiction, which is in both Missouri and Kansas, Has the most significant amount of generation relative to load. So we've not seen significant deferrals in Metro. Metro is actually a jurisdiction also where we're able to return benefits from Winter Storm Yuri and as a result of that position.

Speaker 2

In Kansas Central, we've got a sizable baseload fleet, sizable wind fleet. There were some cost pressures, particularly in the back half So we had some deferrals that we'll be seeking to recover this year. In total, our fuel and purchase power expense in 2021, I think, It was about $70,000,000 higher than it was in 2020. Now we actually And then in Missouri West, Missouri West is a jurisdiction that has the amount of generation that is less than its So it has more exposure to market prices. So again, in the back half of the year, we did see some fuel cost increases in Missouri West.

Speaker 2

We file twice a year for recovery of any deferrals and then those are recovered in over a 12 month period. So we made a filing in Missouri West in December related to that. So we did see some increased amounts, again, relative to other jurisdictions that have higher amounts Gas generation relative to the other elements of the energy complex is relatively lower, but you see those deferral amounts in both 2 of our 3 jurisdictions.

Speaker 7

Okay. Thanks so much. I appreciate it.

Speaker 2

You bet. Thank you.

Operator

Thank you. At this time, I'd like to turn the call back over to President and CEO, David Campbell, for closing remarks. Sir?

Speaker 2

Great. Thank you. We appreciate all of you joining us this morning, particularly as this is the last day of a long earnings season. Thanks and have a great day.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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