Earnings Call: Q2 2020

Jul 28, 2020

Good afternoon, and welcome to the Edison International Second Quarter 2020 Financial Teleconference. My name is Ted, and I will be your operator today. Today's call is being recorded. I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference. Thank you, Ted, and welcome, everyone. Our speakers today are President and Chief Executive Officer, Pedro Pizarro and Executive Vice President and Chief Financial Officer, Maria Rigatti. Also on the call are other members of the management team. I would like to mention that we are doing this call with our executives in different locations, so please bear with us if you experience any technical difficulties. Materials supporting today's call are available at www dot edisoninvestor.com. These include our Form 10 ks, prepared remarks from Pedro and Maria and the teleconference presentation. Tomorrow, we will distribute our regular business update presentation. During this call, we will make forward looking statements about the outlook for Edison International and its subsidiaries. Actual results could differ materially from current expectations. Important factors that could cause different results are set forth in our SEC filings. Please read these carefully. The presentation includes certain outlook assumptions as well as reconciliation of non GAAP measures to the nearest GAAP measure. I will now turn the call over to Pedro. Well, thank you, Sam. And let me start by hoping that all of you listening today and your loved ones are staying safe and healthy as our world continues to work its way through COVID-nineteen. Today, Edison International reported core earnings per share of $1 for the Q2 2020, down $0.58 compared to the same period last year. The decline in year over year EPS was primarily due to higher O and M expenses, equity share dilution and the true up for the final 2018 GRC decision that we recorded in the Q2 of last year. Consistent with recent quarters, results for this period were impacted by the timing of O and M spend and deferrals of certain wildfire related expenses. However, the year over year EPS impact of wildfire related expenses should improve in the second half and we remain confident in our outlook for the full year. Therefore, we are narrowing our 2020 EPS guidance range to $4.37 to 4 point $6.2 by raising our low end by $0.05 Maria will discuss our financial performance in more detail in her report. On the legislative front, we are pleased that the governor and legislature prioritized wildfire funding in the recently adopted budget despite its projected $54,000,000,000 deficit due to the pandemic. The budget provides over $200,000,000 in one time and ongoing funding for community resiliency preparedness, additional firefighting personnel and equipment and enhancement of the state's emergency preparedness, response and coordination with state agencies, local governments and utilities. We are also encouraged by the state's enhanced wildfire mitigation capabilities as we prepare for this year's wildfire season. For instance, Cal Fire reported that it completed all of the planned 35 emergency fuels management projects in May, making 90,000 acres safer ahead of fire season and protecting 200 vulnerable communities. Some of these projects were located in or adjacent to FCE service territory. Cal Fire has also made substantial investments to support its firefighting capabilities, including the addition of C-one hundred and thirty airplanes and new helicopters with better night firefighting capabilities. Turning to operations during this COVID-nineteen pandemic, in focusing on practices aimed at the safety and health of employees and customers. 2 thirds of our 13,000 employees continue to telework and we recently moved our earliest reentry date for them from after Labor Day to the beginning of next year. Importantly, SCE also has a sharp focus on maintaining critical operations for customers benefit, including those laid out in SCE's 2020 to 2022 Wildfire Mitigation Plan. This plan calls for SCE to continue to harden infrastructure, bolster situational awareness capabilities and improve operational practices, while implementing enhanced data analytics and technology. Since the beginning of the year, SCE has completed more than 3 30 miles of covered conductor, installed nearly 400 additional weather stations and completed over 135,000 ground based inspections of our infrastructure and high fire risk areas. SCE is also making good progress in acquiring more high definition imagery through a combination of helicopters and drones to facilitate additional assessments that are not possible from the ground. The CPUC approved the 2020 through 2022 wildfire mitigation plan on June 11, paving the way for the renewal of SCE's annual safety certification as the prerequisite for access to the wildfire fund. Looking ahead, we anticipate another active fire season, mainly driven by lower than expected precipitation and very dry conditions across California. However, SCE is entering the more active fire period better prepared than ever. In addition to advancing wildfire mitigation measures, the company has made improvements to public safety power shutoff or PSPS protocols since last years. While the use of PSPS is largely dependent on temperature, wind and fuel conditions, with the improvement that SCE has made since last year, we would expect to see a 30% reduction in the number of customers affected by PSPS events under the same conditions as last year. Our preparedness includes pre established switching playbooks for each of our approximately 1100 circuits that traverse high fire risk areas, enabling a more surgical approach to isolate the smallest portion of the circuit possible for a given weather condition. It also includes many facets of our customer care program such as providing generator rebates for customers in a high fire risk area and battery backup systems for qualified critical care customers. We continue to focus on minimizing customer impacts, but PSPS will remain a tool to mitigate the risk of a catastrophic wildfire. Among key wildfire related proceedings of the CPUC, SCE submitted its 2020 safety certification request on June 19, outlining how the company meets safety culture and conduct requirements, including implementing our approved wildfire mitigation plan and linking executive compensation to safety. The CPUC has 90 days to act on SCE's request. Until then, the initial safety certification we received last July will remain in effect. On the legal front, I would like to give you an update on the 2017 2018 wildfire and mudslide events. SCE announced an agreement last November to settle claims with 23 public entities. Since that time, the utility has continued to explore settlement opportunities with numerous individual plaintiffs. During the quarter, SCE reached confidential settlement agreements with some of these plaintiffs and they represent the 1st individual claims that the company has settled in the 2017 2018 wildfire and mudslide cases. There are thousands of similar individual claims against SCE and the utility is committed to exploring settlements with all reasonable parties who wish to do so. The court has set January 12, 2021 as the start of the Thomas Fire Bellwether trial, but this may be further impacted by COVID-nineteen. The court vacated the July 2020 Bellwether trial date for the Woolsey Fire and has yet to set a new date. I would now like to briefly discuss how sustainability is central to our vision for leading the transformation of the electric power industry. Our vision aligns with California's COVID-nineteen recovery efforts as the state is working to help Californians recover as fast as safely possible from the COVID-nineteen induced recession and to shape an equitable, green and prosperous future. Our recently published 2019 sustainability report highlights Edison International's progress towards meeting our long term goals. They include delivering 100 percent carbon free power to SCE customers by 2,045, expanding infrastructure in SCE service area to support increased vehicle electrification and electrifying SCE's own fleet, including 100% of light duty vehicles by 2,030. I would note that at the end of 2019, 51% of the electricity that SCE delivered came from carbon free resources. We also remain focused on advancing our clean energy and electrification strategy. In May, SCE announced 7 70 megawatts of energy storage procurement, one of the largest in the nation, which will help enhance electric system local reliability needs. Also last month, SCE in partnership with other utilities published the West Coast Clean Transit Corridor Initiative Study. This looks at infrastructure needs to serve medium and heavy duty electric trucks. Additionally, we were pleased that the California Air Resources Board furthered the state's commitment to electrification by adopting the nation's 1st zero emission electric truck rule. Maria will comment on the initial proposed decision issued just yesterday in SCE's Charge Radio 2 proceeding. Let me conclude by saying that California's commitments to the 2,030 and 2,045 climate change goals can play a critical role in a just and equitable economic recovery. Investments in clean energy and electrification can address climate change and also lower greenhouse gases affordably for all California communities. At Edison International, we are committed to enabling the state's efforts to achieve its objective of a clean energy economy. With that, let me turn it over to Maria to provide her financial report. Thank you, Pedro. Edison International reported core earnings of $1 per share for the Q2 2020, a decrease of $0.58 per share from the same period last year. This decline was primarily due to higher O and M expenses, equity share dilution and the true up for the final 2018 GRC decision we recorded in the Q2 of last year. As Pedro had mentioned, we expect the year over year EPS impact of wildfire related expenses to improve in the second half, and we are narrowing our full year 2020 EPS guidance by raising the low end of the range. On Page 2, you can see SCE's key EPS drivers on the right hand side. I would like to highlight 4 items that negatively impacted the variance. First, EPS declined by $0.20 due to the 2018 true up recorded in the Q2 of 2019 upon receipt of the final GRC decision. 2nd, O and M had a negative variance of $0.24 including from increased expenses that are offset by revenue to the balancing account treatment as well as the timing of deferrals related to both wildfire mitigation expenses and COVID-nineteen related costs. The variance related to wildfire mitigation expenses is due to the timing of regulatory deferrals for vegetation management and inspection and preventative maintenance costs. For the quarter, the negative variance from wildfire mitigation expenses was $0.06 per share. During the quarter, certain wildfire related expenses reached the total amount authorized in the GRC, and we began to defer incremental costs through approved memorandum accounts. We will begin to defer other categories of costs in the Q3 when we these exceed the GRC authorized levels. Therefore, wildfire related expenses will be less of a driver of year over year variances in the second half. O and M expenses were also negatively impacted by the timing of customer uncollectibles, labor and other expenses resulting from the COVID-nineteen pandemic and SCE's response to it. As we have noted previously, there are tracking accounts for COVID related expenses. Since some of these expenses are similar to cost authorized in the GRC, for example, on collectibles, we must reach full year GRC authorized levels before we begin to defer them. The EPS impact in the quarter for these items until they reach the authorized levels was 0 point 0 $6 However, for the full year, we do not expect an earnings impact due to COVID related expenses. As for deferral, through June 30, we have recorded $49,000,000 in 2 COVID related memo accounts. 3rd, depreciation and amortization negatively impacted EPS by 0.13 dollars This was primarily due to changes in Q1 2019 depreciation rates that were recorded in the Q2 last year following the GRC decision as well as higher plants. Finally, EPS in the quarter was lower by $0.17 because of dilution from the increase in shares outstanding. On Page 3, you will find SCE's capital expenditure and rate base forecast. We have a robust capital program of $19,400,000,000 to $21,200,000,000 which includes SCE's revised capital request reflected in the 2021 GRC rebuttal. Based on the capital expenditure levels requested in the 2021 GRC, total weighted average CPUC and FERC jurisdictional rate base will increase to $41,000,000,000 by 2023. This request level represents a compound annual growth rate of 7.5% over 2 rate case periods. Applying a 10% reduction to the total capital forecast to reflect our experience of previously authorized amounts and other operational considerations result in a compound annual rate base growth of 6.6%. As we have done in the past, projects and programs that have not yet been approved by the CPC, such as Charge Ready 2, are not included in the rate base forecast. Yesterday evening, we received a proposed decision in the Charge Ready 2 proceeding. The PD would authorize a total program budget of $442,000,000 including a capital budget of $314,000,000 It is expected to be voted on at the commission's August 27 business meeting. Please turn to Page 4 for an update on the 2021 GRC. During the quarter, SCE filed its rebuttal testimony focusing on a number of the interveners' recommendations, including covered conductor program and depreciation. While the magnitude of the revenue increase is higher than prior GRCs, we continue to underscore that our request is necessary to make the longer term investments required to deliver safe, reliable, affordable and increasingly clean electricity for more than 15,000,000 Californians. As for next steps in the GRC, evidentiary hearings were completed on July 22, and brief and oral arguments are scheduled to fall. We are encouraged that the CPUC has kept this proceeding on schedule even while working remotely during the COVID-nineteen pandemic. The CPUC is expected to issue a final decision for Track 1 in Q1 2021. I would now like to update you on other key financial topics. Please turn to Page 5. First, we completed our 2020 EIX financing plan in May with a direct placement of $800,000,000 of equity with several existing long term investors. We have minimal equity needs to fund our ongoing expenditures program beyond 2020. As noted previously, this is also predicated on timely cost recovery of the requested memorandum accounts and the current level of liabilities on our balance sheet for the 2017 2018 wildfire and mudslide events. Turning to wildfire insurance coverage. We have secured $1,000,000,000 of gross insurance coverage from July 2020 to June 2021, which is $870,000,000 net of self and coinsurance. You will recall that we had net coverage of about $1,000,000,000 in the previous policy year. The insurance market continues to be tight and based on the cost of insurance premiums, the $1,000,000,000 growth coverage optimizes risk mitigation and cost to customers. We believe that this insurance coverage meets the requirements of AB1054. Based on policies currently in effect, the wildfire insurance expense in 2020 is approximately $450,000,000 Moving to our 2019 FERC formula rate case, SCE filed a settlement on its formula rates in June. If approved by FERC, this settlement will provide SCE with an all in ROE of 10.3% and an equity layer that is the higher of actual and 47.5%. SCE can file a new rate case beginning in January 2022. Lastly, earlier this month, we filed an application with the CPC to allow SCE to securitize $337,000,000 of wildfire related capital expenditures. 801054 allows us to securitize wildfire related costs, including $1,600,000,000 of CPUC approved wildfire mitigation capital spending, which can't be included in the equity portion of SCE's rate base. This application requests authority to securitize a portion of the recently approved grid safety and resiliency program spending. The bonds will be repaid from the dedicated rate component. Pages 67 show our 2020 guidance and key assumptions for modeling purposes. I'll start by highlighting that we are narrowing the EPS guidance range to $4.37 to $4.62 per share by raising the low end of the range. This also increases the midpoint of the EPS range to $4.50 There are several variables driving this positive revision. Let's begin with SCE's rate based earnings. We now expect the rate based EPS outlook to be $0.03 higher as a result of our 2019 FERC Formula rate case settlement the resolution of a tax related regulatory proceeding. Building on this, we are also now forecasting a net contribution of $0.27 from SCE operating and financial variances. This is 0 point 0 $7 higher than our previous estimate. This increase is influenced by the timing of SCE's financing activities as well as a number of other operational items. As you look at the next three bars in the chart, you will note that some of the EPS increases I just described are offset by higher costs at EIX Parent and Other, primarily from increased interest expense and dilution from outstanding share count. We now forecast the combined EPS drag from these two items to be $0.07 higher than our previous estimates, and this is primarily related to the completion of the EIX financing plan earlier in the year than originally anticipated. Taking all of these variables into consideration, the net impact of these changes combined with the outlook for our business with another quarter behind us in this COVID-nineteen environment gives us confidence in our narrowed 2020 EPS guidance range of $4.37 to $4.62 per share. That concludes my remarks. Ted, please open the call for questions. As a reminder, we request you to limit yourself to one question and one follow-up, so everyone in line has the opportunity to ask questions. First question is from Jonathan Arnold with Vertical Research. Your line is now open. Good afternoon, guys. Hi there, Jonathan. Hi, Jonathan. Pedro, could I may I just ask, obviously, you've mentioned that you've reached some initial settlements with I think you described it as sort of some of the plaintiffs in 2017, 2018 fires and obviously there are thousands of others. But should we read the fact that you didn't change your accrual despite reaching some of these settlements as a sign that you feel still good about your estimate? Or is it just that you don't have enough experience in settling additional claims to really have an update at this point? Yes. Hey, Jonathan, that's a really good question. And I think just the simple answer is that as alluded to, we did a handful of settlements, a few dozen settlements here, compared to the 1,000 of plaintiffs. So that is simply just not enough evidence to have any sort of material impact in our assessment of the low end of the estimable range. So we did look at that range again and at the low end, as we mentioned before, we reassess that as we go into every quarter. But just based on the very small number of cases that we settled, that's just not sufficient to provide any sort of material input that would lead to a change. Okay. Thank you. And if I could just follow-up on one sort of similar topic, I see you booked a charge related to 20 seventeen-twenty 18, a small one in the quarter that's below the core line. I'm just curious the $9,000,000 I'm just curious what was that and what sort of caused that to get booked this quarter? Sure. So Jonathan, you can imagine as we move through this process, we're accumulating legal and expert costs because those are legal and expert costs that are associated with a non core charge. We're booking those as non core as well. Prior to this quarter, the number was really not significant. Okay. So that's sort of a sign of your maybe your settlement activity sort of ramping up. And is that a fair or fair? Or fair? I would just say it's a sign of our continuing litigation activities, Jonathan. All right. I'll let it go. Thank you very much. Thanks. You take care. Our next question is from Julien Dumoulin Smith from Bank of America. Your line is now open. Hello, Julien. Hey, Julien. Hey, good afternoon. Thanks guys for the time. Perhaps just to follow-up on Jonathan's question, if this is my follow-up, if I will. Can you clarify a little bit on how you're thinking about the various groups of potential parties that you'd be seeking to settle with? And just as you set expectations, and I know it's difficult talk about it, obviously, the Woolsey timeline is a little shifted out. Can you talk about potential expectations Just how do you think about the timeline and cadence given that the Bellwether trial for 1 is established still in January versus vacated for the other one? Yes. And let me start, Julian, by saying that I do think of the timelines as in some sense being almost 2 separate timelines, although obviously they're related. There is a timeline for the normal litigation course and that's where the bellwether trial dates are relevant. And as you noted and I think we mentioned earlier, there's a new date set for the on the Thomas side, that the Wolfsie date has been postponed. We did note that that Thomas date could still move again just because of the COVID-nineteen impacts and the uncertainty around that. So that's a track. A separate track is really multiple tracks of discussions with multiple classes of plaintiffs. And the reality is that that track has a life of its own and it really depends on parties on both sides and whether on the plaintiff side are there parties that are interested in being reasonable and achieving reasonable settlements. And so we're certainly open for business to parties that want to have reasonable discussions, and we're less open for business for folks who may not have a reasonable point of view. How that relates to the trial timeline? Frankly, it's hard to say. I really can't get into the head of specific parties and whether they view a linkage to a trial date or not. In terms of the other part of your question around how do we think about the various classes here, one large class was the public entities. And as you recall, we settled with the vast majority of those last fall. And the other 2 big classes are the subrogation parties, really representing insurance company interests, and the individual plaintiffs. And so nothing that we've had to announce at this point on the several parties. Again, we continue to be open to discussions with reasonable parties. And with the individual plaintiffs, you saw the handful of settlements that we entered. So again, probably the longest non answer in the world in that it's really hard to give you any sense of timeline or timing because that really comes down to each of those parties or groups of parties. Excellent. And a quick clarification, if I can, as my follow-up here. On your 2020 guidance, I think, Maria, you had commented going back a quarter here in light of COVID, you didn't show a bridge. Obviously, now you have. And there were a number of items introducing uncertainty in light of COVID, etcetera. Just to make sure, any specific items that are still outstanding that could introduce volatility? And I know you all raising guidance here after not showing it earlier, at least the low end is indeed a sign of confidence. But I just want to make sure that we're hearing you right about some of the key pieces that you were looking for clarity last quarter. Sure. Thanks, Julian. And last quarter, while we didn't provide the bridge, we did reaffirm guidance. Obviously, now we're raising the low end of the range a little bit as well. But last quarter, what we were really saying was the piece parts could move around and that's why we didn't provide the bridge. I think as our team continues to move through the process, we have more clarity on what those piece parts are. Obviously, we have the memo accounts that we set up related to COVID expenses. We have decoupling. We have all of those things in California that provide us with confidence. So I wouldn't point to anything necessarily being different other than now with the passage of time that granularity is more apparent to us. Okay. Thanks so much. Thanks, Julien. Our next question is from Steve Fleishman with Wolfe Research. Your line is now open. Hello, Steve. Hi, good afternoon. Hi, everyone. Hi, Pietro. So two questions related ones. First is just on the cash flow standpoint, I know there's a lot that moves back and forth through the trackers and the like. So just how are you feeling about staying within the targeted rating agency ranges for this year, next year? Hey, Steve, it's Melia. So you're right, we do have a lot of cash tied up, particularly in those wildfire mitigation and more accounts. I think the regulatory asset that we have on the books this quarter is just more than $1,100,000,000 So it's a fair amount. We have been moving through the process on various of those proceedings. The GS and RP has been approved and the settlement has been approved. The WEMA, we're expecting that decision in September. That's the one about the insurance proceeds from last year. So we're moving through that process. We do think that that's moving through timely on those requested amounts is important to maintaining our cash flow and those are some of the that's one of the assumptions that our 2020 financing plan was predicated on. I think that from a rating agency perspective, the COVID related items, they understand very well the strong supports that we have in California, both the trackers that we have as well as the decoupling. So as sales vary, we will recover that as well. So I think that is something that they're very familiar with and think highly of frankly. On the memo accounts for the wildfire mitigation, I think demonstrating that we can get some important assumptions that we made in our financing plan for this year. We'll continue to look at that for next year. And as we get that cash in the door, obviously, our metrics will improve. Okay. And I'm going to ask a clarification. It is a really important element. I agree with you. Okay. Okay. Thank you. Just a clarification of someone else's questions of just we keep looking back to the 2017, 2018 and potential settlements. One of the things that ultimately has to come up is like did you actually do anything imprudent? Because again, as far as I recall, I don't remember any investigation that has found that you actually did anything wrong in the 2017, 2018 fires. So could you just like remind us when and how prudency would be reviewed for the 'seventeen-'eighteen fires? Yes. Happy to take a quick stab at that. And just to remind you that there's really a whole process around, obviously, the litigation proceeding that just is determining that potential litigation exposure or potentially on settlement outcomes. There is a separate track around the Attorney General's office, which is, I think, pretty standard course in these kind of cases where they can take a look at whether there's any basis for liability. I think we've seen we've discussed in prior calls that it seems to be past that period now for the Konigstein events. Attorney General is continuing their investigation for the Woolsey fire. In any case, we don't see any basis for criminal felony liability in any of these events. And then the final track there would be the track at the CPUC, which although the CPUC's Safety and Enforcement Division engages right away and looking at the facts of a fire, etcetera, The real meat and bones of the prudency review would start after a filing by Southern California Edison seeking recovery of amounts related to the fires for outcomes in litigation or settlements, right? So that has not begun yet. We have shared in prior calls as well that at this point, we still don't have full visibility to every piece of evidence out there. There's still equipment that we have yet to inspect, etcetera. So the way this work is that once we had finalized the litigation outcome for the 2017, 2018 Thomas, Konigstein and mudslide events and separately for the 2018, we'll see fire event. As we end up understanding what the final liability is, whether through court process or through settlement, and we understand what the outstanding amount is beyond our insurance coverage. And at that point, based on our then understanding of our prudency, right, as we complete that review on our side, our SCE would complete that review, then SCE would decide to go to the CPSC to seek cost recovery from customers and that would start that proceeding. So at this point, we can tell you pretty definitively that we don't see any basis for criminal felony liability in the investigatory criminal part of this led by the Attorney General, but we don't have all the pieces in place to understand our degree of prudency and what the case would be for cost recovery. Just final reminder, in our accounting reserve, we have not assumed any recovery from the CPUC given the precedent in the San Diego case. We have assumed recovery from FERC because they had a different precedent. But I would expect that we will be likely to be seeking cost recovery of some amount dependent ultimately on the degree of fluency that we concluded we had shown. So lots of pieces to the answer because it's a complex process. Does that make sense, Steve? Yes. No, that was a really good review. Thank you, Pedro. Thanks. You take care. Next question is from Michael Lapides from Goldman Sachs. Your line is now open. Hey, guys. Thank you for taking my question. I actually have a handful and Maria's are probably more directed at you. Can you talk a little bit about the leeway, the comfort zone you have regarding Southern California Edison dividend payment potential up to the parent relative to what both the CPUC requirement and the California corporate code requirements are? Sure. So you know that in California, there are some rules around dividend payments, which some of them are, I'll say, very standard, retained earnings tests, etcetera. And then also around largely following the payment of dividend that the entity has an ability to meet obligations as they come due. And we've been evaluating this forever before the wildfires as well because that's been part of the code for a long time. But I think it got a little bit more attention after the 17/18 events. We look at a wide range of really potentially negative outcomes to ascertain the answer to that second question. And we've been in a position each quarter, to think about that both at the EIX level to our common shareholders, but then also in between SCE and EIX. SCE also is looking at cash flows and the like and the exact timing of their financing. So there's a little bit of just I'll say the day to day cash management that comes into account as well, but they routinely make dividends up to the parent company. As far as the CPC goes, obviously CPC is looking to ascertain that they are living within their authorized capital structure and the like. And we've always been able to do that as well, and I anticipate we will continue to be able to do that. Got you. Thank you for that. Also, can you talk a little bit about parent debt financing and the cost of interest, meaning the coupon rates you're able to realize in the market right now relative to what you're seeing other companies? And if the rate is higher relative to other utility, even though interest rates broadly are lower, how you're thinking about kind of short term, long term debt, the balance and really the total debt balance you want up top at the holdco versus down at the output? Sure. So I mean, obviously, we did $400,000,000 of HoldCo debt a couple of months ago now, more than a couple of months ago now, and that completed what we had announced for 2020. Not surprising to anyone on the call, EIX has been trading wide of other entities and I think that's a reflection of what a lot of what happened last year or even prior to AB1024 being passed. So we do have to deal with that. I'm hoping that as time passes, that will also change. Obviously, the underlying the treasuries are pretty low right now. So that's a benefit when you think about the total coupon. I think as we move forward in time, Michael, like any company will be trying to balance timing going to the market, short and long term interest rates, and the like. I would see us on a go forward basis just making that decision to move from a short term position to a long term position based on what's going on in the market and what the needs of the company are. In terms of the overall debt at the holding company versus the complex, obviously, we're going to be thinking about that in terms of also keeping an eye on the rating agencies. Obviously, they're looking at holdco debt relative to total debt, and so we'll be staying within those guidelines as well. So that's kind of the That was the last question. I will now turn the call back to Mr. Sam Ramraj. Well, that concludes the conference call. Thank you for joining us today, and please call us if you have any follow-up questions. You may now disconnect.