Eversource Energy Q1 2022 Earnings Call Transcript

Quartr
Provided by Quartr
May 5, 2022

Key Takeaways

  • Q1 2022 GAAP EPS rose to $1.28 per share from $1.06 in Q1 2021, driven by higher revenues across segments and lower pension costs.
  • Eversource launched a strategic review to monetize its 50% offshore wind interest in light of strong market demand, planning to replace wind earnings with additional regulated investments or reduced financing needs.
  • The company reaffirmed its 5–7% long-term EPS growth target and an $18 billion, five-year regulated capital investment program, including AMI deployments and clean-energy transmission projects.
  • Massachusetts DPU’s future gas inquiry guided Eversource toward energy efficiency pilots, hybrid electrification, renewable natural gas and hydrogen trials for 650,000 gas customers.
  • Eversource plans a $1.2 billion at-the-market equity program and is contending with inflationary pressures and higher borrowing costs, keeping full-year EPS guidance under review.
AI Generated. May Contain Errors.
Earnings Conference Call
Eversource Energy Q1 2022
00:00 / 00:00

There are 19 speakers on the call.

Operator

Good morning, ladies and gentlemen. Thank you for joining and being present at the Eversource Energy First Quarter 2022 Earnings Call. My name is Irene, and I will be coordinating today's call. I will now hand over to your host, Jeffrey Kotkin, Vice President for Investor Relations to begin. Jeffrey, please go ahead.

Speaker 1

Thank you, Irene, and good morning and thank you all for joining us today. I'm Jeff Kotkin, Eversource Energy's Vice President for Investor Relations. During this call, we'll be referencing slides that we posted yesterday on our website. And as you can see on slide 1, Some of the statements made during this investor call may be forward looking as defined within the meaning of the Safe Harbor provisions of the U. S.

Speaker 1

Private Securities Litigation Reform Act of 1995. These forward looking statements are based on management's current expectations and are subject to risk and uncertainty, which may cause the actual results to differ materially from forecasts and projections. These forecasts are and factors are set forth in the news release issued yesterday afternoon. Additional information about the various factors that may cause actual results to differ can be found in our annual report on Form 10 ks for the year ended December 31, 2021. Additionally, our explanation of how and why we use certain non GAAP measures and how those measures reconcile to GAAP results is contained within our news release and the slides we posted last night and in our most recent 10 ks and 10 Q.

Speaker 1

Speaking today will be Joe Nolan, our President and Chief Executive Officer Phil Lembo, our Senior Strategic Advisor and outgoing CFO and John Moreira, our Treasurer and Incoming CFO. Also joining us today is Jay Booth, our VP and Controller. Now I will turn to Slide 2 and turn over the call to Joe.

Speaker 2

Thank you, Jeff, and thank you everyone who is on the call this morning. It's been a very busy start of the year, so let me get right to it. 1st and most importantly, we have continued to deliver very safe in reliable service to our 4,400,000 customers. The average number of months between power interruptions continues to place us and our reliability in the top decile of the electric industry and our relatively short average duration of outages continues to place us in the top quartile. We also responded promptly to damage caused by a number of northeasters that seem to be arriving in New England every weekend from mid January through February.

Speaker 2

Despite that inclement weather, response time to natural gas service calls, a key safety and performance metric for our gas distribution business was excellent. I'm also pleased with our continued work to support our state's efforts to significantly reduce their carbon footprints. Our sustainability ratings at MSCI and Sustainalytics remains among the industry's best when compared to our payer utilities. Our updated 2021 sustainability report will be published mid year along with enhanced disclosures on our diversity, equity and inclusion metrics. We are also currently working to determine how an energy and water delivery company such as Eversource should address Scope 3 emissions.

Speaker 2

Turning to Slide 3. As many of you know, the Massachusetts Department of Public Utilities is conducting an in-depth inquiry into the role that gas will serve as the state moves to reduce its greenhouse gas emissions by at least 85% by 2,050. In March, we submitted a lengthy filing in support of the DPU's inquiry. That filing has been posted on our investor website and its key elements are included on this slide. As you can see, reducing energy demand by vigorously pursuing energy efficiency in both the electric and natural gas business is a cornerstone of our strategy.

Speaker 2

Additionally, we are recommending pursuing multiple options to reduce carbon emissions from our approximately 650,000 natural gas customers in Massachusetts. They include developing a hybrid electrification pilot in a community where we serve both electric and natural gas customers. Building on the network geothermal pilot we announced earlier this year in Framingham, Massachusetts, initiating a renewable natural gas program through purchases in in state on system injection and piloting the potential use of hydrogen with certain Commercial and Industrial Customers. There is no question that our natural gas distribution infrastructure will play a critical role in ensuring a successful transition to the state's clean energy future. The DPU is targeting a decision in this inquiry later this year.

Speaker 2

Turning to offshore wind in Slide 4. I'm sure most of those on this call have read our news release last night announcing that we have commenced a strategic review of our offshore wind investments, where we are partnering with It is clear that the landscape for offshore wind continues to evolve in many energy and infrastructure firms and investors both inside and outside North America are extremely interested in investing in the Northeast United States offshore wind market. The extremely strong price paid for New York BITE leases in February attest to this. We plan to evaluate our 50% interest In our partnership with together with the significant investment requirements we have ahead of us for our regulated energy and water delivery systems. We have more than $18,000,000,000 5 year regulated Capital Investment Program that needs to be financed in additional capital projects that are likely to arise in the coming years.

Speaker 2

We have concluded that now is an appropriate time to explore monetization of our offshore wind investments. The strategic review we have launched was formally endorsed yesterday by the Eversource Board of Trustees. It could result in potential seal of all or part of our offshore wind interest. We fully expect that given the strong interest for offshore wind assets, we will be able to replace the offshore wind earnings per share that we would realize after our 2 larger projects reach commercial operation. This could result from either greater levels of regulated investment, less financing needs are a combination of the 2.

Speaker 2

Finally, I just want to thank Phil for his decades of service to our company and our customers. I have worked with Phil for more than 30 years, playing on the softball team with him back in my early years and he will be greatly missed. He has been a proven leader and a consummate financial professional. He has been our CFO for the past 6 years and has steered us through acquisitions, significant equity issuances in a pandemic, while being transparent with The Street, supportive of his staff and wise in his counsel to senior management and the Board. One can readily understand why our investors have rated Phil one of the top CFOs in the industry the past few years.

Speaker 2

I am truly thankful that he is remaining in a senior strategic advisor role with us for the near term to help us with this evaluation of our offshore wind investments. We do not have a specific timeline for the review of our offshore wind project. During this process, we will continue to focus on a successful execution of our 3 offshore wind projects and we'll continue to lead the onshore portion of the project during siting and construction. One key element that may amplify market interest in our 50% interest is the strong national and regional policy support for offshore wind. The current administration has targeted 30,000 megawatts of offshore wind in the Atlantic by 2,030.

Speaker 2

In the 4 states that are the most likely buyers of energy generated by offshore tracks continue to ratchet up their support for this clean energy source. We strongly believe that offshore wind will play a very important role in Southern New England's and New York's aggressive decomposition efforts. And Austin is recognized world leader in engineering, constructing and operating offshore wind. Moreover, the sites we are developing are among the best in North America in terms of consistent wind speeds. Moreover, we have will moderate water depths in the proximity to the electric load.

Speaker 2

In terms of our active projects, As illustrated on Slide 4, onshore cable installations beneath the roads of East Hampton on Long Island is largely complete ahead of schedule. Major offshore work will take place in 2023 and will continue the project bringing 130 Megawatt 12 turbine project into service by the end of next year. Siting and permitting on our 2 larger projects Revolution Wind and Sunrise Wind also continues to progress. We continue to expect to receive final federal and state approvals in 2023 and bring both projects into service in 2025. Slide 6 shows that there have been no changes The cost estimates are schedules we discussed during our year end earnings call in February with contracts now essentially fully secured for South Fork.

Speaker 2

We continue to focus on negotiating contracts for the 2 larger projects, which we expect to be built in 2024 2025. In aggregate, about 80% of these projects costs are now locked in. We are making good progress on procuring additional agreements and expect that percentage to rise over the balance of the year. I want to add how thrilled I am Yesterday, our Board elected John Moreira to be our new CFO. John will hit the ground running, having a leadership position throughout the finance organization over the past 2 decades, including treasury, accounting, budgeting, regulatory and Investor Relations.

Speaker 2

He has also headed up our Investor Relations and our strategic initiatives, including our water acquisitions in the offshore wind business review we announced yesterday. He knows Eversource inside and out and will provide us with experienced financial leadership as we invest on behalf of our customers. Thanks again for your time. I will now turn it over to Phil.

Speaker 3

Thanks, Joe.

Speaker 4

Good morning, everyone. This morning, I'll cover the results for the Q1 of 2022. And then John will discuss Recent regulatory developments and our 2022 financing activities. So I'll start with Slide 7. Our GAAP earnings were $1.28 per share in the Q1 of 2022 and this compares to earnings of $1.06 in the Q1 of 2021.

Speaker 4

1st quarter results for both years include $0.02 per share of after tax costs associated with acquisitions, primarily related to the assets acquired from the Columbia Gas of Massachusetts deal. Results in the Q1 of 2021 also include a charge of $0.07 per share related to our performance in August of 2020 following tropical storm Isaias. Excluding the acquisition and the transition costs in the 1st quarters of 2022 2021 as well as the storm related charge in 2021, we earned $1.30 per share in the Q1 of 2022 compared with $1.15 in the same quarter of 2021. Our first distribution earnings were $0.41 per share in the Q1 of 2022 compared with earnings of $0.34 in the Q1 of 2021. This was largely this excludes the storm charge.

Speaker 4

Improved results were driven largely by higher revenues in New Hampshire and Massachusetts and lower pension costs. Our Electric Transmission segment earned $0.43 per share in the Q1 of 2022 compared with earnings of $0.39 in the Q1 of 2021. Improved results were driven by a higher level of investments in our transmission facilities that we use to provide safe and reliable service. Our Natural Gas Distribution segment earnings were $0.47 per share in the Q1 of 2022 compared with earnings of $0.43 in the Q1 of 2021. Improved results were due primarily to higher revenues, partially offset by an increase in O and M costs.

Speaker 4

Our Water Distribution segment earned $0.01 per share in the 1st quarters of both 2022 2021. You may recall that the winter quarter is the weakest of the year for water utilities in the Northern U. S. Eversource parent and other companies lost $0.02 per share in the 1st quarters of both 2022 2021. And this is excluding the acquisition and transition costs I mentioned earlier.

Speaker 4

We are encouraged with the positive first quarter results, but believe it is a bit too early in the year to revisit our $4 to $4.17 per share EPS range. We will continuously evaluate this guidance range as we move through the year as we would typically do in past years. I think it's important to keep a few things in mind. Significant percentage of our incremental gas business earnings come in the Q1. Also, we expect to commence our ATM equity issuance during the Q2 depending on market conditions.

Speaker 4

Like everyone else, we're seeing dramatic increase in borrowing rates. Short term rates are up 75 basis points depending on the day. The 10 year is nearly double where it was a year ago, so rates are higher. And storm response and restoration costs are a significant O and M item for Company each year. With 3 quarters of the year still ahead, we believe it's appropriate to see how the year progresses.

Speaker 4

Before turning the call to John, I'll just discuss our capital plan. I want to touch on a few of Eversource's initiatives. First, Eversource Gas of Massachusetts or EGMA. The process for transitioning EGMA into Eversource Business Systems is nearly complete and we expect charges to the transition to tail off after the Q2 of 2022. Systems have been transitioned since the start of 2022 include multiple work management systems, a natural gas dispatch system, a GIS and SCADER systems and a new customer information system.

Speaker 4

This has been just a great effort by the entire Eversource team to get all 300 business processes transitioned over from NiSource to Eversource quickly and effectively over the past 18 months. 2nd, Aquarium Water continues to grow. Earlier this year, Aquarion announced an agreement to purchase a 10,000 customer water system that serves 5 communities in Northwestern Connecticut. The transaction would result in Tarrington Water holders receiving approximately 900,000 Eversource shares in exchange for their Torrington stock. Torrington is a very well run water delivery system whose service territory is highly complementary to Aquarion's existing footprint.

Speaker 4

Assuming timely regulatory approvals, We expect to close the transaction by the end of this year and for it to be accretive in 2023. I'm going to turn over the call to John in a moment, but first I wanted to say how grateful I am for all the relationships I've had with Members of the financial community during my career. This has been especially true over the past 6 years, when I was fortunate enough to serve as Eversource's CFO. Our customer our company is in a strong financial position in a great part because of your confidence in us. I look forward over the coming months to helping Joe and other members of the Eversource leadership team

Speaker 5

Thank you, Phil, and congratulations on your retirement. And I personally want to thank you for your leadership of the finance team and for your mentoring of me over the past couple of decades. I also want to thank Joe, Jim Judge and the entire Eversource Board of Trustees for entrusting me with the CFO position. I am honored by the confidence you have shown in me and look forward to supporting Eversource Energy lead and efforts to serve our customers and prepare for New England's clean energy future. As you saw in our news release and can see on Slide 8, we are reaffirming our long term EPS growth rate in the upper half of 5% to 7% range.

Speaker 5

On Slide 9, we also reaffirm The $18,000,000,000 5 year regulated capital program that we disclosed during our February earnings call including our $3,900,000,000 regulated capital investment projection for this year alone. You will recall that in February, we noted a couple of additional areas where we may see incremental regulated investment over the next 5 years. During turning to Slide 10, We have provided status updates on our AMI program for both NSTAR Electric and Connecticut Light and Power. At this time, regulators in both Connecticut and in Massachusetts are actively working through dockets with a decision expected later this year. Briefing has been completed in Connecticut and is scheduled to wrap up in Massachusetts over the next couple of months.

Speaker 5

Separately, in March, NSTAR Electric filed an application with FERC on a new innovative recovery structure to help promote offshore wind development off of the coast of Massachusetts. The application references Park City Wind, which is a 800 Megawatt Avangrid project that was selected as part of years ago as part of years ago as the winner of Connecticut's most recent offshore wind RFP like the Vineyard Wind project, Park City Wind will connect to the New England grid through NSTAR Electric Facilities in the Cape Cod of Massachusetts. Park City would connect into NSTAR Electric's 345 kV system where We are already planning some upgrades to meet Ryzen electric loads. By working on the 2 projects together, we can reduce costs for customers. In addition, the incremental upgrades would be approximately 200,000,000 which the vast majority being collected from Park City with FERC based returns.

Speaker 5

We also have asked FERC to approve our application in an expedited fashion. We expect there will be other opportunities that will emulate this type of offshore wind transmission interconnection agreement structure going forward. Since together Massachusetts, Connecticut and Rhode Island are seeking approximately 9,000 megawatts of such offshore projects. On the regulatory side, our only active rate case is NSTAR Electric and we continue to expect a decision around December 1st with new rates going into effect January 1, 2023. We are currently going through the discovery phase of this proceeding.

Speaker 5

At some point over the next couple of months, we do expect Aquarion Connecticut, to file for its first rate review in about 10 years. Aquarion Connecticut's regulatory ROE is about 7.7% for 2021 and well below the allowed rate of return of 9.63%. In terms of financings and recent credit rating agency decisions, we have completed a $1,300,000,000 5 year 10 year issuances at Eversource parent company. We did that in late February. Proceeds were used to meet the maturity of 7 Fitch has completed its annual review of Eversource System of Companies last month and raised its outlook on CL and P from negative to stable.

Speaker 5

The stable outlooks also Fitch reaffirmed the stable outlook for all of our family of companies. We have recently conducted our planned meetings with Moody's and S and P as well and brief them on the status of our offshore wind initiative, our 5 year financial projections and our equity needs. We look forward to the conclusion of these reviews later this year. In terms of upcoming equity issuances, As you can see on Slide 11, we expect to commence the issuance of new Eversource shares this quarter through our previously announced at the market or ATM program. As we said in February, we plan to issue 1,200,000,000 of equity through this ATM program over the next few years.

Speaker 5

Additionally, we will continue to issue treasury shares to fund our dividend reinvestment, our optional share purchase and employee stock plans. Excuse me. This is expected to result in approximately $120,000,000 worth of treasury shares per year through these plans during our forecast period. It is important to note that our planned issuance of 1 point $2,000,000,000 of equity through the ATM program and the DRIP shares issuance are not impacted by the strategic assessment of our offshore wind that we announced yesterday. At this stage of our strategic assessment, it is too soon to comment on how any potential sale of all or a portion of our offshore wind investment would impact our financing plans in the future.

Speaker 5

Thank you very much for joining us this morning and I look forward to seeing all of you very soon. I will now turn the call back to Jeff for Q and A. Jeff?

Speaker 1

Thank you, John. And I'm going to return the call to Irene just to remind you how

Operator

For those who have joined online, please press the flag icon on your web browser. Also, when preparing to ask a question, please make sure You are unmuted locally. Now I will hand over to Jeffrey, who will coordinate the current questions and answers list. Jeffrey, please go ahead.

Speaker 1

Thank you, Irene. Our first question this morning is from Shar from Guggenheim. Good morning, Shar.

Speaker 6

Good morning, guys. Good morning.

Speaker 2

Good morning. Good morning.

Speaker 6

So Phil, I'm a little Your retirement announcement on one end really comp for you and John for Phase 2, but I'm going to miss our Definitely going to miss our steak dinners and interstate road trips. So hopefully

Speaker 5

we can still do that.

Speaker 4

Yes, nothing says take me up for Sure.

Speaker 6

Yes, Troy. So, Joe, just a question here on the sale process and maybe first Two parts and I got a quick follow-up there. First, what kind of options are we looking at? I know you mentioned it could be piecemeal suggests your interest in the unused leases or everything. Are you sort of leaning one way or the other?

Speaker 6

And 2, What is the timing for this process kind of in your mind? I know you said within 2022, but with the latest ATMs set to start this quarter, How should we start thinking about this?

Speaker 2

Yes. Well, thank you. And it's great to hear your voice and look forward to seeing you in person. So listen, we just are starting this process. We did have our Board in here yesterday.

Speaker 2

Obviously, this was a decision that had a lot of thought going into it. So we are going to look at all of our options and the impact that the A seal of powder, all seal would have on our business. So I think I don't have an answer for you right now. It's not something that I have that I'm withholding. I just I don't have it.

Speaker 2

So I will tell you that as this evolves, we definitely will keep everybody informed and We will obviously be very thoughtful and deliberate about any type of review and any kind of next steps on wind.

Speaker 6

Got it. And then just what prompted this? Did you actually did you were you fielded offers? I guess, was this prompted by any interest from inbounds?

Speaker 2

Well, I guess, I don't think there's been an analyst. I'm looking at the list of folks on the call and obviously you and folks have always asked us this question about how we're going to monetize Our wind assets and Phil used to always say to folks, if somebody packs up a Brink's truck, obviously, we would look at that. I think the New York Bight leases were a point of inflection for this company. I think I was actually doing all day meetings that day and we started to see some of the pricing. And as you know, listen, we're here for the shareholders comp.

Speaker 2

And we are going to do the right thing by our shareholders and our investors and our customers. And this is the right thing to take a look at this. And I think we heard many of you loud and clear about What are you going to do around wind? So that's what really was the driver around the shop.

Speaker 6

Got it. Got it. And then just lastly, obviously in the context of your base 7% 5% to 7% growth, Is this just a kind of dilution avoidance or do you kind of have a line of sight to incremental opportunities right now that you're kind of excited to fund with the potential proceeds, right? And then what's the tax impact of a full sales as we're thinking about it?

Speaker 5

Sean, this is John. Let me start with the Candelata question. So it's too early to tell as Joe mentioned. We are looking at multiple structures and options to mitigate any tax leakage. So too early on that front, but we are focused on that.

Speaker 5

On your latter question or former question, I should say, the financial impact of this once again. We're still continuing To review it and assess it, but we feel very optimistic with opportunities on the regulated side to continue to develop clean energy investment strategies. I mentioned 1 on the call in my formal remarks to support connecting offshore wind off the coast into Cape Cod. We think there's more to come. There's recent bids in Massachusetts that have been one that want to connect into Massachusetts and we are the incumbent utility in that area.

Speaker 5

So we're very optimistic. We have a solar sizable solar deployment program in Massachusetts, which was just kicking off the ground right now. Part of it will land in this forecast period and part of it could go beyond our forecast period. So We're very optimistic about what lies ahead to deploy the use of the proceeds.

Speaker 2

But just to emphasize what John said there, Sharra, We are focused on regulated assets. So we are not going to go from one unregulated venture to another.

Speaker 6

Terrific. Thanks again, John and Phil congrats on Phase 2. And Mr. Nolan, I'll see you soon. Thanks guys.

Speaker 5

Thank you.

Speaker 1

Thanks, Shahriar. Our next question is from Steve Fleishman from Wolfe. Good morning, Steve.

Speaker 7

Yes. Hey, good morning. And Phil, Wish you the best and hope to see that handicap keep getting lower. So Just maybe first, could you clarify the messaging on your equity needs? Because At the one time are you keeping the ATM in place And just no matter what here or are you just kind of doing this for now until you see the outcome Of this and then deciding whether some of this would reduce equity needs?

Speaker 7

Just better clarity there would be helpful.

Speaker 5

Sure. Steve, as we mentioned in February, the 1.2 program would be executed over Several years, right? So it's not as though we're going to be executing it immediately all at once in the quarter. So, as you all know, our core capital program that we continue to roll out is going one direction. It's been increasing very nicely for us.

Speaker 5

Right now, we're looking at an $18,000,000,000 capital investment program that takes through 2026. So we view that 1.2 as supportive of that capital investment portfolio. But we will continue to monitor. And as I've said in my formal remarks, it's too early to determine what impact The sale the potential sale could have on our future financing plans.

Speaker 3

Okay.

Speaker 8

Is

Speaker 7

it fair to say That you need to use the proceeds mainly to reduce debt or is it just more premature to determine Do you surprise it?

Speaker 5

Yes. So we are very focused on maintaining an appropriate capital structure. So with these potential investments that we have discussed a few minutes ago, Those would happen over time. So we are looking at reducing our debt. We are maintaining pretty high levels of short term debt and our forecast does have some debt further debt issuances that we can certainly take off the table.

Speaker 4

And if I could add to Steve that we've always talked about financing our growth in a balanced manner. And so we can't do it all one way or the other. And this helps support that balanced financing approach. And it's really again to finance the growth that's in the capital plan.

Speaker 7

Got it. That makes sense. Thank you. And then one other question just on the announced sales. Could you maybe give us a little flavor of what rights are with respect to partnership like do they have a right of first offer or refusal and Can they do they have any say on who their new partner is going to be?

Speaker 7

Can they like say no if they don't like somebody or Could you talk a little bit about that?

Speaker 2

Sure. First, let me just tell you that, is a great partner. I mean, they're my very good friends. I've spent time in Denmark with Mads. I've got a great relationship with Martin and with their U.

Speaker 2

S. President, David Hadi. So We have played a very valuable role in that partnership. We continue to play that role and we expect To continue to help as they make landfall here with any project. So we are a valued I was in New York the other night for an event in Long Island.

Speaker 2

We are making significant progress that wind based structure was supposed to take 2 years. We ended up doing it in 1. So I think that the relationship will continue. The structure in some form of us helping them as they kind of grow this business. In terms of the commercial terms as to Whether they can buy us out or how that all works, it is confidential at this point.

Speaker 2

But and that will begin to share that as we are able to share it with you.

Speaker 7

Okay. Thank you and congrats and Phil, wish you the very best.

Speaker 9

Thanks, Steve.

Speaker 1

Thank you, Steve. Thanks, Steve. Our next question is from Nick Campanella from Credit Suisse. Good morning, Nick.

Speaker 10

Hey, good morning. Thanks for taking my questions. Congrats to Phil on the retirement announcement. I just wanted to expand a little on Steve's question. I was just curious on just like what your flexibility is on the fifty-fifty JV.

Speaker 10

Like are you able to sell just lease bed or is the contract structured where you have to monetize an entire kind of part of the JV. I just wasn't sure if there's kind of hurdles to what your flexibility is here. Thanks.

Speaker 2

Yes. So I guess our flexibility is great and our ability to make decisions on all our are very flexible. And again, we will evaluate what the results are and what makes the most sense For our business and for our shareholders. So we are not handcuffed in any way.

Speaker 10

Got it. And then if I could just ask like a non offshore question just on an uninflation. I think you just talked to some higher you're seeing higher financing costs Across the board, just where else are you kind of seeing pressure? It's been a couple of quarters of pretty hot CPI prints and how do you feel on just overall cost containment within the 5% to 7%? Thank you.

Speaker 5

Sure, sure. This is John. So Interest rates obviously is here in front of us and we have to manage that and we have a plan to compensate for that. We're also seeing some pressure. I wouldn't characterize it as significant challenges or hurdles, but we are seeing some challenges in the supply chain and more recently on the fuel component side.

Speaker 5

And there again, we are trying to work that challenge through and find opportunities to offset that impact. Nick, I can add a little to that.

Speaker 4

Some of the items that you see, If it's commodities or cable or certain types of equipment, it mostly would impact our capital plan. These are sort of items that would be used to advance our capital program. So as John mentioned, sort of fuel and whatnot is there. And I think it's important to keep in mind too On the offset, some of our rate plans, we incremental revenues are based on an inflation or PBR adjusted formula. So that would help to offset cost increases should they occur going forward.

Speaker 10

Got it. Thanks. If I can squeeze just one more in, I'm sorry, but I know that you talked about just if I heard you right, you think that you can replace All of the offshore wind earnings as we get to 26 here. So is that just Is that net of full that's net of full proceeds and then future investment in purely regulated opportunities? Can you just clarify that?

Speaker 5

Sure. So we have to wait and see what the ultimate transaction or transactions are, whether it's whole or in par. But we feel very optimistic that we can replace those earnings just given the runway of regulated opportunities that we have ahead of us.

Speaker 10

Thanks for the time today, everyone.

Speaker 1

Thank you. Thanks, Nick. Next question is from Angie Storozynski from Seaport. Good morning, Angie.

Speaker 11

Good morning. So I'm going to start with a non offshore wind question. So about Connecticut, so you guys mentioned that Aquarion is going to be filing a late case there. We saw that PURA denied the WICA filing of the utility, which probably was a sign that a release is coming. But can you give us a sense what's of the latest status of your regular relationships in the state in Connecticut.

Speaker 2

Yes, sure. So good morning. Our relationships are very positive. I mean, we've had We had hearings a week or 2 ago on AMI, very, very constructive discussions, very engaged commission. So I would say that things are good.

Speaker 2

We get very good relations with the Governor, with the Attorney General down there. And I think things are very, very much improved, obviously, from some of our challenging times. So I feel good about the climate down there.

Speaker 11

And how is your expectations for the future electric rate case in the date given the inflationary pressures that you are likely feeling and will continue to feel. Is there any change in the timeline on when you would expect to file the next rate case?

Speaker 5

Sure, Angie. This is John. So, per the settlement agreement, we cannot change rates any earlier than January 1, 2024. But as part of the settlement agreement, we did put the stake in the ground that that review qualified for the 4 year come in and show us. So we can actually stay out probably until 2025.

Speaker 5

So we have to it's too early to determine when we would file. Will we file early or allowed because of that point? So We will continue to monitor or at the earned returns off for CL and P and make a decision accordingly.

Speaker 11

Okay. Thank you. And then lastly on offshore wind. So I understand that you're just beginning the process, but just Looking at the reasons for the process, right, the New York Offshore lease auction, which would imply that your leases are probably north of $2,000,000,000 And then the amount of CapEx that you will have spent on offshore wind by the end of this year. I mean, it's Again, I'm sort of struggling to see how much of regulated CapEx you can generate in order to deploy the potential proceeds here.

Speaker 11

Again, We're talking probably up again by my account more of estimate more than $4,000,000,000 of potential CapEx with and again and AMI spending and all of these other projects that you're mentioning are not even anywhere close to the amount of money that you would likely have?

Speaker 2

Yes. Well, a lot of questions there. But let's just start with our offshore wind decision. Obviously, This strategic review is designed to kind of de risk this business. I mean, you look at the market conditions that occurred With the bike leases and you just have to take a good look at that.

Speaker 2

In terms of the $4,000,000,000 number, I don't know John if you want Sure.

Speaker 5

Sure, Angie. I think it's important to note that that $4,000,000,000 is not going to happen all at once.

Speaker 12

It's not going to come

Speaker 5

in, in 1 year. But we feel very optimistic that over towards the latter half of our forecast period and beyond, as you know, the 2 major projects that we had forecast that would kick in earnest for the 1st full year of 2026. So looking at our 10 year view of investments, we feel very optimistic that we could get to a sizable investment opportunity. AMI, as you know, is approximately $1,000,000,000 which is not enough $18,000,000,000 forecast year. We have other opportunities on the transmission side to facilitate and accommodate Clean Energy Connections Into Our Service Territories.

Speaker 5

And I gave the example of 1 from an offshore developer and we see more happening certainly in Massachusetts with the recent bids that were awarded earlier this year. So once again, we feel very optimistic that over time, we will certainly get to that $4,000,000,000 number that you cited.

Speaker 11

But it would be probably twice as much now because it's just the equity component, right, of the future growth, right? So it would have to be more like €8,000,000,000 of CapEx, right, to deploy this cash. Again, I understand it's already innings of process, but I'm just doing a simple math here.

Speaker 5

No, I understand. And Angie, where the states and the region is going from a clean energy and No. Clean goals setting, there will be a need to accommodate further development, certainly on the electric side, both on the distribution side and on the transmission side. We have the decarbonization strategy. I think that's going to we're seeing some of that happen in our service territory where loads are increasing and we have to address those loads in the short term.

Speaker 5

And then you layer on further demands that we see that as a window of opportunity. Once again, it's probably too early for us to put pen to paper, but given what we see and what we hear from our state policies, we feel very optimistic about it.

Speaker 11

Okay, great. Thank you, guys. Congratulations. Thanks.

Speaker 1

Thank you, Angie. Next question is from Durgesh from Evercore. Good morning, Durgesh.

Speaker 13

Hey, good morning, Jeff, and thank you team for taking my questions. First, just as we think about and try to model the valuation, future valuation of these assets, are we still using the 6% to 8% net income off of the 26%? Is that sort of A good estimate still for the as a representative of earnings from these assets?

Speaker 2

Yes, that is correct.

Speaker 13

Got it. And then just one question, Joe, like I'm thinking strategically, If you, let's say, exit all of the potentially all of the offshore assets, How does that impact your onshore transmission and distribution investments? I guess the impetus of this question is, does it help you Owning offshore assets with the onshore wind onshore transmission distribution investments Or it doesn't matter. I'm just thinking about the implications on your onshore plan as it relates to these assets and other offshore assets for that matter.

Speaker 2

Yes. One of the interesting aspects of this wind development has been That even when we the unregulated business has lost bidding in different states, we end up winning the interconnection and the transmission built for these developers. So that continues and I'm very, very So I think we will continue to play a role on the onshore. We will, I can tell you we will. I don't think we will play a role on the regulated onshore wind transmission construction and operation for all these offshore wind developers and the appetite is extraordinary.

Speaker 13

Got it. Thank you for that. Sounds like you're pretty optimistic and bullish on those prospects as it relates to offshore investments. Okay. Thank you.

Speaker 13

And Phil and Jim, congrats to you both. Thanks for taking my questions.

Speaker 4

Thank you.

Speaker 1

All right. Thank you, Durgesh. Next question is from Jeremy from JPMorgan.

Speaker 12

Hey, good morning. This is actually Ryan Karnish on for Jeremy. Thanks for taking my questions.

Speaker 1

Hey, Ryan.

Speaker 12

I would just start with the Future of gas proceeding in Massachusetts and maybe thinking through the potential regulated CapEx opportunities there and Any kind of high level thoughts on kind of the level of CapEx that might enable to kind of bring into the plan? And then just over kind of what time frame these might materialize?

Speaker 2

Yes. So we're playing an active role obviously in that proceeding. We continue to feel very good about the gas business. I'll let John maybe can Weighing around the CapEx plan, but we still feel very, very good about it and we're playing a key role In that proceeding, so John? Yes.

Speaker 5

So on that specific question, once again, I think it's too early. We just filed this a couple of months ago. But I can tell you that What we do have is we do have about a $10,000,000 investment opportunity in Framingham that we mentioned that we're looking to test from a geothermal standpoint. But once again, I think it's too early for us to size the bread box at this point.

Speaker 12

No, totally understand. And then just one on offshore, maybe tackling the financing from a different perspective. But I know you talked about in the prepared about having discussions recently with the agencies. But just kind of wondering at any kind of high level, How you think about potential partial or full sell down? What it might do to kind of your credit thresholds?

Speaker 12

And how should we kind of think about that kind of impacting the financing plan?

Speaker 5

Well, We feel comfortable with the what we have announced the $1,200,000,000 equity needs. And as we've said, it's Regardless of what we the ultimate proceeds are from this initiative, we're not that's not likely to change at this point, Okay. We still need to continue to evaluate it. But we feel pretty optimistic as to where we are. As I mentioned, Fitch, we kind of reaffirmed all of our ratings and we're optimistic that Moody's and S and P will follow suit.

Speaker 4

If I can add to that, we alluded to the fact of Making the visits and whatnot. And I would add that this would be viewed as credit positive in a sense, Whether it be from a proceeds standpoint or where you fall on the risk grid Types of things. So, we'll have to work over the next few months for their they'll have to work on their analysis over the next few months. But I think in an overall big picture sense, credit positive outlook from this announcement.

Speaker 12

Got it. Understood. That makes sense. I'll leave it there.

Speaker 1

Okay. Thank you, Brian. Appreciate it. Next question is from Insoo Kim from Goldman. Good morning, Insoo.

Speaker 14

Hey, good morning, guys. First question, touching up a little bit more on whether it's the transmission or other opportunities related to offshore development in your area. Just as you think about the next 5 years of the 10 year build out of the gigawatts in your service territories, how Is there any way to frame or size the opportunity set, again, whether it's transmission or others related to offshore wind that are more incumbent to your and you have more of a right to those investments versus those that may be more competitive in nature?

Speaker 2

Yes. I guess, well, first of all, good morning. When you look at one of the things that we've looked at in our businesses, If you're an offshore wind developer and you're going to make landfall, it makes a lot of sense for you to go to the host utility. Yes, Granted there might be some competitive aspect to it, but just like our project in Rhode Island, obviously, National Grid would be a partner as we made landfall. We look at our partners in New York as well and it's generally the host utility.

Speaker 2

Yes, could somebody go another way? Yes, they certainly could. But I think that when you look at our operations and our transmission business, I don't think you'll find better operators. I think We demonstrated that here with a reliability project here that was competitive in Boston. We did team up with National Grid and Folks came in from around the country and we won that and we were able to execute it and our pricing was far better than anybody else.

Speaker 2

I think we have the best team in this space and I'm not concerned about somebody coming in and trying to cut our grass.

Speaker 14

That makes sense. But Joe, are you is there any way to frame kind of the magnitude of those investments just based on the development of projects that are supposed to come online in your areas over the next 5, 10 years?

Speaker 2

Well, I got to tell you, I mean, we have visibility around the projects that have won. But as you know, each time a project wins and kind of where it has to locate, there used to be a lot of transmission planning, ISO studying around the connection. So I wish I did. I love to be able to tell you that it's a $5,000,000,000 or it's a $10,000,000,000 But I will tell you It is significant and they all want to get into our territory. This is the load center.

Speaker 2

So it's just a it's not a matter Of what state? They're coming into this region and they're going to come into our territory. So the number, I just it's too early for me to tell you. And if I knew what I'd tell you.

Speaker 14

I'm sure you will. Yes, thanks for that. My other question, just thinking about the potential use of the proceeds, I know it's too early from the strategic review. But is low hanging fruit, I guess, a combination of looking at your balance sheet or the organic CapEx you're talking about or could this open up potentially just from a capital perspective, some options on the inorganic side of the business on the utility side?

Speaker 2

Yes, I guess all of those. I think it's a combination of that. I think you know That when we get into the kind of acquisition market, it's always we're always kind of smart investors. We're not going to do anything crazy. You're not going to see us You'll go across the country.

Speaker 2

You're not going to see us make a poor decision. We make very good decisions. And I think it's a combination of all those factors That we would use any proceeds from wind.

Speaker 14

Got it. That's all for me, Phil. It's been a pleasure. John, congratulations. Looking forward to it.

Speaker 4

Thank you. Thanks, Insoo.

Speaker 1

Thanks, Insoo. Next question is from David Arcaro from Morgan Stanley. Good morning, David.

Speaker 15

Hey, good morning. Thanks so much for taking my question and congratulations Phil and John. In terms of Just an inflationary backdrop here. Could you give any sense of what you're seeing for the year over year increase in your bills so far in your customer build so far this year? I know everybody is facing it.

Speaker 15

I'm just curious if you've got any level of quantification you could offer for what we were seeing for a year over year increase?

Speaker 5

Well, overall, with the energy component, we're probably in the 7% range That we're seeing year over year, net net.

Speaker 15

Got it. Okay. That's helpful. And then, on the Let's see, the $200,000,000 transmission opportunity that you alluded to in the script, is that in the plan yet? And could you remind me when that would come into service?

Speaker 5

It's not in our $18,000,000,000 capital forecast that we disseminated in February. If you recall, David, in February, we said in addition to the $18,000,000,000 we were seeing some opportunities. And we had quantified a potential opportunity for offshore interconnection in Massachusetts of approximately 500,000,000 So this $200,000,000 filing that we did with FERC is $200,000,000 of that 5. So we as I've said, we're confident that there will be more to get us to at least the 5 if not over. And the timing of that would be, I would say, in the next year, you could see it materialize this year as these PPAs are now being filed with the GPU and the studies are in front of Iosonia England already for our region.

Speaker 15

Got it. And then just last quick question on the offshore wind costs In terms of the percentage that's locked in, what would you anticipate to be at toward the end of the year from that 80% level currently?

Speaker 2

Yes. We should be closer to 100%. We've got eyes on that kind of remaining piece of it. We feel good about it. It's not anything that's keeping me up at night.

Speaker 15

Okay, got it. Understood. Thanks so much.

Speaker 1

All right. Thank you, David. Next question is from Andrew Weisel from Scotia.

Speaker 3

Hi, good morning everyone. Thank you for squeezing me in about the hour mark. First, just another congratulations to Phil and John. Next, want to elaborate just on a couple of things talked about. First, potential buyers.

Speaker 3

You've been clear that you'd only be interested in offshore wind off of The coast of your region, let's say the Northeast, should a sale happen, would the buyer also be restricted to that region or could they work with projects in other parts of the country?

Speaker 2

Yes. I don't see anything that would restrict them from that. I think that they could operate anywhere they wanted to operate. But again, it's pretty early in the process.

Speaker 3

Okay. Just wanted to know if there was anything in your contract with Orsted? Sounds like no.

Speaker 6

Just keep in

Speaker 2

mind, I guess I just wanted you to keep in mind that that whole philosophy around sticking to your knitting's in this region? It's because that's what we know. We're good at it. I mean, we just wanted that really was our mantra because that is where we feel comfortable. This is our space.

Speaker 2

We know the space. So that's what we talked about. It wasn't a contractual situation. It was more that We didn't want folks to worry that we were going to hit to California or the Midwest. I mean, we're going to stick to where we know and we know this region very, very well and we feel good about it.

Speaker 2

So that was Kind of the caveat that we had around wind.

Speaker 3

Okay. Thank you for clarifying that. Next on financing, you potentially might get a lot of cash proceeds here. You talked a lot about mitigating or offsetting the $1,200,000,000 of ATM equity. What about the DRIP?

Speaker 3

I believe that's about $120,000,000 per year. Could you turn that off if you had this good cash position?

Speaker 5

This is John, Andrew. So yes, I mean, we've confirmed that the 1.2 where We will be executing over the next several years starting this quarter. But you're absolutely right. The DRIP, we have much more flexibility to turn on and off. But right now, we're looking to execute and that will be reassessed once we see when as we get closer to closing on its potential transaction.

Speaker 3

Okay, great. Thank you very much.

Speaker 1

All right. Thank you, Andrew. Next question is from Julian from Bank of America. Good morning.

Speaker 9

Hey, good morning. Thank you, team. Congrats again. Phil, John, it's a pleasure. Look forward to more.

Speaker 9

And maybe with that, again, I know lots of things have been asked and answered. But I mean, I want to come back to this tension on how much offshore Net income, were you expecting and are you expecting to offset by 2026? I know earlier in response to Steve's question, You specifically kind of flagged debt pay down as an element or the bulk of what proceeds would be used for. But how should we think about what that increment was? Again, last quarter, we spent much of time talking about ROEs and how much net income was attributable here.

Speaker 9

You talked about holding yourself sort of even against that original expectation. I'm just trying to reconcile the math this quarter last quarter.

Speaker 5

Sure, Julien. This is John and thank you for your comment. So once again, as we said, I'm very confident that we could find those opportunities given the policies that are policymakers in the states that we operate in. We've already given you a lot of information, AMI being one of them, that will in and of itself, as you know, is about $1,000,000,000 And on the transmission side, there's also the opportunities that I laid out to you. And that's just for Massachusetts for what awards have been issued for Massachusetts.

Speaker 5

So there's still a lot more space out there for further development. And as Joe mentioned, people are looking to interconnect in Southern Connecticut and in Massachusetts. So we feel confident that we will have the opportunities to a combination of investments, combination of lower financing requirements that we would need Otherwise, so we feel very confident that we'll be able to size those opportunities as we move forward. Right now, it's still too early to tell.

Speaker 2

And there's no tension, Julian. No tension. Don't worry about that.

Speaker 9

Thank you, Joe. And John, let me if I can just rephrase this slightly differently, especially coming off those rating agency conversations. I know you talked about the $1,200,000,000 in ATM here. I mean, how should we think about the need for equity beyond the 1.2, especially in the context of this offshore? I'm just trying to understand like how much further equity is needed that would be allocated from these proceeds?

Speaker 9

Again, obviously, you're not building something so that changes the financing plan, but just to try to level set on that incremental equity piece that seems to be here Against the backdrop of earnings growth, if I can ask it slightly differently. Really appreciate your clarity here.

Speaker 5

Sure. And I would say it's far too early for us to make that determination as to what those financing plans look like because we don't know exactly What will be the ultimate outcome of this review that we're going through and the timing of those investment opportunities that I've mentioned?

Speaker 4

We have no plans to do further equity, Julian, if that's clear. And just to be clear too, you used the word incremental. So this is what we've talked about this morning is not incremental. It was part of what we discussed in February. So it's the plan of the 1.2 plus the 2 minor shares or Dollars that come in from DRIP and there are no incremental equity plans in the plan.

Speaker 9

Got it. Got it. This doesn't satiate an ignorance with you. Great. Thank you for that clarity, Phil.

Speaker 9

I appreciate it.

Speaker 4

You're welcome. All

Speaker 1

right. Thank you. Thank you. Thank you. Next question is from Ryan Levine Yes, Citi.

Speaker 1

Good morning, Ryan.

Speaker 9

Good morning. I appreciate the

Speaker 16

valuation argument for potential monetization, but can you talk about any strategic The synergies are synergies that would impact any decision making about potential deal structuring. Are there any practical reasons for Eversource to maintain ownership or play Apart in ongoing offshore wind operations at least from a contractual standpoint? And then in this context, why is now the right time?

Speaker 2

Yes. So a couple of things. Thanks for the question. So the dis synergies absolutely not. I mean this piece of the business as it relates to What we were focused on, which is the onshore, that was the kind of piece that we brought to the table.

Speaker 2

That continues to happen. It happens both in our unregulated business as well as regulated for other folks that want to interconnect. So That will not be the case. In terms of why now, I think we all saw what happened in the New York Bight leases and the appetite is extraordinary. The pricing is extraordinary and it's just something that is right for us to do for our shareholders.

Speaker 2

And that's why we made this decision. Again, This is a decision we've made to take a look at it. It's a strategic review, and I feel it's the right thing to do and so does our Board members.

Speaker 16

Evaluation is the primary consideration. How do you would you prefer to just get a valuation marker on a minority sale as opposed to selling your entire stake outright, given some of the cash proceeds questions That you articulated earlier in the call?

Speaker 2

No, I think that we've shared with folks the opportunities in the regulated space that are available to us. And we think that we think the opportunities are extraordinary. So I don't think it would make any sense

Speaker 11

For a

Speaker 2

partial, if the number is right on a full, then we will make that decision and we will exit it.

Speaker 16

Appreciate it. I look forward to seeing you in Boston next week.

Speaker 1

Yes, great. Thanks, Ryan. Appreciate it. Next question is from Sophie from KeyBanc. Good morning, Sophie.

Speaker 8

Hi, good morning. So I can't help it, but try and ask you another offshore question maybe from a different angle here. Yes, I understand the logic behind each individual piece in this puzzle, right? It makes sense you know try and monetize it given where the relations are etcetera, right? But like help me paint a broader strategic You're still like you're selling an asset that you don't need to sell, Even though you also don't need don't have an immediate need in funding, right?

Speaker 8

So you don't have the need for that money. Despite all that, you're still proceeding with the equity, and you're yet to kind of quantify where those users proceeds could go. So Like strategically, I guess, what is the cohesive narrative here? I'm still struggling, I have to listen to the discussion to clearly kind of depict that.

Speaker 2

Yes, sure. I guess the strategic narrative is this extraordinary opportunity in the regulated space that we know we're very, very good at number 1. And number 2, we have some assets that are worth significantly more then that we paid or invested in and we see an opportunity to rotate and derisk on behalf of our shareholders, Which is really what the mission is. And we see that opportunity as being advantageous for all the parties. And that's why we made that decision.

Speaker 2

And again, the reason why is the appetite in offshore wind is extraordinary. And also The needs in offshore wind for in terms of interconnection are extraordinary. That's what we're very, very good at. And we're going to play to our strength.

Speaker 8

Okay. So you used this word a few times, you know, like the derisk business, right? And I get it. But the question is, Do you think that the risk profile of this project has changed since the time you've entered into this contract originally?

Speaker 2

The profile of the price, is it changed? Risk. The risk. Well, no, I mean, there's obviously a great deal of There's additional lease areas that have been put out. There's additional players in the marketplace.

Speaker 2

And as you know, I think Everybody on this call knows how disciplined we are in terms of our investments and we are going to remain disciplined. So if you're going to bring a significant number of undisciplined folks into this equation, then that's really not a place for this company.

Speaker 8

Thank you. I'll jump back into the queue.

Speaker 1

All right. Thank you, Sophie. Next question is from Paul Patterson from Glenrock. Good morning, Paul.

Speaker 17

Good morning. Can you hear me? Yes. Okay. Well, first of all, congratulations, Bill and John.

Speaker 17

Just congratulations, Phil. And I feel you're sort of getting off easy here somehow, but I don't know why. But anyway, Good for you. Just on the review, I mean, almost everything has been asked here. Just I know this is I'm just wondering, have you had any Indications or expressions of interest, and I apologize if I missed this.

Speaker 17

So far, I mean, I know that your Board took action just now, but Has there been or have you had any preliminary indications of interest?

Speaker 2

No, we have not. And Because that was we just made the announcement yesterday. So we do expect that there'll be significant interest. It probably already is at this point. We've been focused on this earnings call, but We do anticipate significant interest in these assets.

Speaker 17

And I saw that you're expected to have you're going to review this Through the rest of this year. So is that should we expect something I know it's kind of early, but sort of December ish where we might hear an announcement or could it happen earlier or?

Speaker 2

Yes. It could happen earlier. I think you'll have some updates as things progress. I think we'll have a better understanding as to folks that are going to show up. And I think, as you know, we're very transparent and we'll share as things become available.

Speaker 17

Awesome. I think it sounds really smart. And again, congratulations, Phil. I feel like asking you questions about Pilgrim or something. But congratulations again and best wishes.

Speaker 17

Thank you.

Speaker 4

Thanks, Paul. I appreciate it.

Speaker 1

All right. Thank you, Paul. I think

Speaker 7

we're going to wrap up

Speaker 1

with this last question from Travis Miller from Morningstar. Travis?

Speaker 18

Good morning, everyone. Thanks for taking my question. Aaron, again, congratulations, Phil, John. I appreciate all the information you guys have given over the years. Real quick follow-up to follow-up to follow-up.

Speaker 18

You've talked about offshore wind returns being higher than the regulated returns you're getting. Just wonder if anything has change that as you look out in terms of supply chain or inflation on the worker side or materials, etcetera?

Speaker 2

Yes. So I'll take that. I guess I will tell you that the returns remain higher than regulated returns today. So we still feel that way about it and that is the case and all of our estimates and our kind of projections are they are higher than our regulated returns. Yes.

Speaker 18

Okay, great. And then just one quick follow-up again to Massachusetts. Do you think the Spirit of the DPU's, say, investigation or requests have to do with some of the political and legal Stuff that's happened over the last couple of years in Massachusetts regarding gas bans and other fossil fuel bans.

Speaker 2

Yes. No, absolutely. I think that was that just demonstrated Governor Baker's leadership around gas And his desire to at least let everyone have a fair hearing and try to sort this out. So no, I think it's We actually welcomed it. Obviously, it's a very thoughtful and deliberate process that we have a seat at the table and we will see this through and it will happen this year.

Speaker 18

Okay. Great. Thanks so much. We appreciate all the extra time you guys took here today.

Speaker 13

Yes. Thank you. Thank you. Okay.

Speaker 1

Thank you, Travis. We appreciate it. Hey, I don't see any other folks in the queue, but if you have any Further questions, please either reach out by e mail or phone to us today. We really appreciate you being with us. And I'm going to turn it back to Irene for any closing instructions.

Operator

Thank you, Jeffrey. Currently, we have no further questions. In case Jeffrey would not Like to have any closing remarks, then ladies and gentlemen, this concludes today's conference call. Thank you for being us today. Have a lovely day ahead.

Operator

You may disconnect your lines now.

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