The Southern Company (SO) 1 Nov 172017 Q3 Earnings call transcript

Company Profile

Participants

Aaron Abramovitz	The Southern Co.
Thomas A. Fanning	The Southern Co.
Arthur P. Beattie	The Southern Co.
Greg Gordon	Evercore Group LLC
Angie Storozynski	Macquarie Capital (NYSE:USA), Inc.
Paul Fremont	Mizuho Securities USA, Inc.
Michael Weinstein	Credit Suisse Securities (USA) LLC
Stephen Calder Byrd	Morgan Stanley & Co. LLC
Ali Agha	SunTrust Robinson Humphrey, Inc.
Michael Lapides	Goldman Sachs & Co. LLC
Jonathan Philip Arnold	Deutsche Bank Securities, Inc.
Paul Patterson	Glenrock Associates LLC
Kamal B. Patel	Wells Fargo Securities LLC
Ashar Hasan Khan	Visium Asset Management LP
Andrew Stuart Levi	Avon Capital/Millennium Partners
Steve Fleishman	Wolfe Research LLC
Praful Mehta	Citigroup Global Markets, Inc.
Julien Dumoulin-Smith	Bank of America Merrill Lynch
Dan Jenkins	State of Wisconsin Investment Board

Call transcript

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Operator

Good afternoon. My name is Colin, and I will be your conference operator today. At this time, I would like to welcome everybody to the Southern Company Third Quarter 2017 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. today's being that X, today, advised XXXX. be call recorded is November Please

Quarter feature Call available Company's Earnings Southern Third will Investor website. on Relations slides our are that

like at You the Director of go to www.investor.southerncompany.com/webcast. to Please Abramovitz, turn Relations. I Mr. can Aaron the slides would ahead. access Investor over call now

Aaron Abramovitz

Colin. Welcome third Thank Southern you, quarter XXXX Company's to earnings call.

Company, Officer. are and Chief of Southern Joining President Executive Financial Chief Chairman, me and Tom this Beattie, Fanning, afternoon Art Officer

make will could forward-looking today me to remind those we Let our XX-K information. in factors that to discussed addition important differ indicated Form historical including and cause statements providing forward-looking those you in results statements, subsequent the in materially filings. Various from actual

call. discuss in on investor.southerncompany.com. applicable call measure time, well Tom In conference we addition, we today's call financial over will may call. Fanning. the at website during Relations as present this to this to reviewed are the GAAP Reconciliations will be non-GAAP At morning turn included we on Investor the financial released slides information The for as I'll slides the this this our information

Thomas A. Fanning

Good you us. for afternoon joining thank and

always, interest As your Southern in appreciate Company. we

and during on they electric and state-regulated premier, XXXX basis. quarter targets performed remain well on utilities Our for Power the on Southern their track gas deliver and third to an adjusted

our call. results, to first like last our provide I'd provides what's Art financial overview on happened complete Before since of a updates

Power X. line payments are Georgia an and not VCM expects cost Power stipulation Power be Georgia the of $XXX customers. schedule to our X On loan benefit occur PSC the total Toshiba to X, guarantees the and are billion the August by end this Including confirm value first under prudence $X.X X more commitment, Toshiba provide payment. customers. in an additional by completion for Georgia effect; the an On Georgia of Service co-owners, Vogtle. Georgia to to second net Power is Unit not the Plant million $XXX cost service program. requesting is guarantee, units cap; prior Power estimate. expected Energy Georgia filing, quarter and to a guarantor to proceedings new its and expected increase of estimates estimated expected totaling parent is XXXX in billion. project guarantee schedule service project November of additional number approved largest a mitigating XXth and billion, early $XXX a be to the its guarantees that: PSC Final total under two, satisfaction Power cost the risks continues which February Department of VCM to scheduled share. million be XXXX. of revised cost is of for XXXX Earlier today, XX, $X.X the loan the the in Unit previous On the conditional both is estimated with of the by remains obligation, cost the their the than over for work Units $X.X with we parent in expected of conditions for expand Georgia guarantee subject with November Georgia the parent three, Power of Toshiba Factoring overall $X.XX XXXX first the and in the X X Power payment and Vogtle issuance total received Power the of four, and loan to Vogtle September is in is received of for a October to project million co-owners Public Georgia First, of filed billion the XX not is to Commission, Georgia from which which X and one, to XX, certified the A reasonable; the has all of decision guarantee. on the been the Georgia in mitigating commitment Power's present from In received is and XXXX. the recommends

effectively to for claims While Westinghouse. its year, of under and Toshiba believe Loan Agreement. preparing subject co-owners and end the three-plus monetizing be remaining evaluating fulfill in Power approval rights been this will before its of Guarantee actively process years, DoE have the the and Toshiba monetization the payments against owners review We risk the over Any its complete transaction remaining guarantee Georgia we the option customers. Georgia eliminating anticipate is and this obligations Power's could and next the our bankruptcy for

improvement to as communication continuous improved improved Bechtel and management of towards site to prime construction have support two the in the control be contractor to including Southern Nuclear weeks several see even another factor the will updated the schedule. and incremental trend in continued that this Turning step forward factors, monitoring for field. in work A field, This we primary we performance. right the to of trended Westinghouse project construction, can package of and ago performance. in serve success and the transaction improved was Throughout productivity continue be direction attributed seen site going the with finalized leadership the contract productivity from control,

quarter The transaction Gas will expect customary financing weeks third of our Industries assets Elizabethtown both the agreement Gas operating recent for Let's closing to purchase Southern billion objectives. credit to used asset conditions. announcement utility needs entered total Elkton approvals be regarding of and closing Southern EPS Gas move for other and reduce Southern with South growth metric $X.X to of transactions and into Company, our Company anticipate Gas. external Company the to of by Gas. and now ago, we XXXX support and end Company the Jersey proceeds Southern We A regulatory these subject few the

to and parties reliability and a to service value-maximizing outstanding for Gas level Industries, Elizabethtown accustomed the transaction to I'll Gas is the Art call now for are turn We believe financial involved. customers and gratified a this that buyer today. Jersey which is all same South economic review. to Elkton like over of are a receiving providing have We committed

Arthur P. Beattie

Thanks, Tom. everyone. Good afternoon,

you As the we third reported from earnings morning, the XXXX the this released quarter can to $X.XX $X.XX of for materials XXXX. compared earnings of third share see share, in of quarter of per per

XXXX, with the reported in the ended of XXXX. compared of nine $X.XX share for months per XX, same For we a earnings $X.XX share September earnings period

and integration This Services, our were the $X.XX the of Excluding per charges XXXX. of with earnings revenue XXXX in the share and acquisition costs, Company's well and as other third included quarter Southern and materials, associated period per increased state-regulated project, at increased $X.XX interest tax per shares. quarter ended weather, Wholesale with for described for retail September drivers same share Major share earnings our to Gas in compares businesses, nine-month XXXX the third Power milder the expense credits, offset as Kemper Southern $X.XX effects adjusted $X.XX respectively. of earnings the by electric items for and periods XXXX results timing

us for $X.XX the year-end the basis. for we an will fourth the As that on have next the share at $X.XX in XXXX middle adjusted we per just which estimate would for or share per quarter earn earnings our quarter, range above XXXX, of the estimate of

at The Moving quarter. average. our and the office square across outpace growth Offsetting space, nationally in Florida X%, to warehouses experienced has a to these lighting, months most and in footprint encouraging, footprint both robust including trends now employment, service rate especially appliances, and commercial Southern an continues technology system energy-efficient HVAC the growth Georgia. experiencing and customer growth and adoption occurring U.S. of the to sector, strong In residential Economic continue XX national of third the territories. the and with data of is remains now growth of sectors. review consecutive we expansion see both economic positive our our is and new job in and and Company residential the of ongoing footage commercial centers. equipment

Logistics September continues announced reading ISM is expected XX territories industrial top since commerce footprint, climbed impact the infrastructure in for of investment addition, the XX in with negatively years, its been expected to has jobs primary Nationally, expanded to we Index its in its is XXX jobs at Anthem manufacture May of SUVs ASOS a seen growth In in and support in prospects $X activity positive in Daimler jobs the jobs Center, online XXXX. of XXXX. the pace operations the Southern showing of In In in of sales X new the Alabama X,XXX by economic highest robust. manufacturing all Company time, Georgia, in plans for at sector commercial to electricity the center. Economic service Technology the its potential advancement the our increase IT Manufacturing sector. our with has sectors billion have Center development XX.X, create metals in X,XXX and will and to momentum. electric which new and X,XXX to Global digital chemicals, new activity expand over add fastest retailer fulfillment with

Florida sales automakers and reporting growth anticipate territories we sustained repair of the and hurricanes replace as destroyed help end and flooding. economic of Texas by should through from the XXXX, the XXXX recent vehicles ahead, rebuilding and work our that Looking residents associated already in damage sustain higher early by are

equity now you through since At outlined equity has the update and Analyst XXXX. cumulative XXXX billion XXXX forward me for for XXXX provide from our the Day, and continue needs plans remainder you of XXXX insights last October our our remainder to Let and approximately XXXX of into and on $X.X beyond. evolve. we of needs financing Much changed

well Kemper an pending potential and for Toshiba incremental mitigated our need. Elkton rebalance of capital remaining to while the obligation of sale have equity $X XXXX, the incremental Gas For generated that as structure, billion as the greatly our Elizabethtown monetization charges need Gas

drivers key are the few future. to other needs Here in change our expected a equity

Flats for the EPS horizon. contribution First, of to tax tax of Power The third diminish deployed reduce Southern expected Company's equity by and not expected wind Power's debt over renewable Southern equity tax likely Cactus in amount announced Southern to equity is party significantly Southern forecast common the July third-party growth. explore is to vehicle equity Moreover, will use of project the for financing the future in Power secured projects. the same use

considering to minority solar portfolio Southern Additionally, equity launching interest process of a sell a Power's in we assets. are

an taken We U.S., part the of have as and we utility-scale very leadership the across proud continue assets to solar Company. of integral Southern are we position these view in Power Southern and

to this assets. Selling extract underlying objectives. value in quality the in market further one-third the opportunity the manner value believe financial capital has our overall represents we in tied of a supports the the up portfolio market, to redeploy interest from contracts considering a However, to that and tremendous portfolio long-dated clear of our

closing likely an financing will time initiate with longer will potential updated for a schedule We also year-end and some sale in cost The mid-XXXX. Vogtle plans. before have X process our and X on impact term a

and for of equity capital of in be Vogtle's the a project increased financing would obligation have While a and greatly impact expect part would structure. of billion cost of financing the retail as it Power's Vogtle Georgia the We Any incremental Toshiba potential our reduce schedule incremental not needs term mitigate costs. needs, longer and equity however, near-term capital debt on and X result from monetization $X.X X risk plan. change do, significant will

past, our needs evolve. we Finally, operations the as modernize our customers' as evaluating we've to alluded business actively opportunities are basic in to

well the with is EPS long-term call turn have long-term Our growth look funding would initiatives capital objective projections fourth EPS quarter our his the growth remarks. opportunities over to contribution serve way requirements. as the financing as These plans increase call long-term of in our on February. to long-term the state-regulated prices. We our added back maintaining forward customers you sharing for to our now anticipate closing We and as utilities. benefits always I'll affordable our updated Tom strengthening we of these modernization could improve our while

Thomas A. Fanning

relationships see exactly competitive operations subsidiary, to by as continue as including state we we positive evidenced Gas expected, closing, complementing to foster our Southern In Company continue this jurisdictions, electric several our year. In Power. rate outstanding performing regulatory Art. Thanks constructive outcomes our Southern generation

long-term. well deliver the to positioned we to As investors beyond, value are XXXX over ahead we look our to and

Hurricane accept including than Finally, tireless Hurricane able line experienced mention to million Thanks efforts and service. for the during customers those its roughly that in impact our that catastrophic quarter, We five days restore system-wide service who and industry. all our that, less we from service we own the collaboration power events help to of to could our and wake weather X.X to I region others to staff the well outages support crews as incurred of in restore would be collaboration and not were close to by of especially United companies efforts Government. the utility and to restoration Georgia customers represent in third remiss of occurred the across Harvey. as tremendous Irma Alabama. pleased Both on these damage and Prior States of utilities, municipal electric operating between service in contribute an recent efforts with investor-owned along for were territory co-ops, utilities cooperation unprecedented outside

once for afternoon. of Perry, our fact, Department all daily Rick Energy Secretary, at offering opportunity. again a help Thanks As of of teleconferences, unfailing us a joining matter in U.S. this participant was valued every

question-and-answer ready the the questions. of to take on portion we're move now to Operator, will now call. We

Operator

sir. you, Thank

from ISI. Our with first Gordon question Greg Evercore of comes the line

is ahead. open. line Please go Your

Thomas A. Fanning

Greg. Hi,

Greg Gordon

afternoon guys. Good

Arthur P. Beattie

Greg. Hi

Greg Gordon

I Can direction not Is regard simply plan the some puts reason to sort on give why questions the today, updating to formally ask with the plan? us of some financing us? and trying sort of no-go takes about for decision get on Vogtle it out be don't to the because and that, once lay know you'll more we able we yet go, clearly you're

Arthur P. Beattie

that, Yes, of from or the plan just you any the this in but might initiatives come more preview, we'll the on about modernization lots a call. next give included plus There's excluded moving plan. chew so that yet, to parts is in Greg,

Thomas A. Fanning

one. in and interest Yeah, the idea minority have we'll better a other solar's the later. of Sale

Greg Gordon

Okay, stock. but right. relative common this a you $X year, said billion guys you that of said needed you had Kemper, needed a Because never equity billion to you of $X

the or the minority the not right? equity things $X run, close needed of need could the theoretically going equity, deal, right? billion that's late to need you what Elizabethtown short now, eliminate part sale, limit interest year to a all so some next those common till cash tax of You third-party wrong? So forward for but severely the bringing that's just monetization from Toshiba, cash, find maybe the even Or in not

Arthur P. Beattie

actually but We will can need certainly run. The You're the monetization think equal the short time, the out run. will in correct. we help it itself short eliminate in over

Greg Gordon

main Okay. my Thank That was guys. question, you.

Arthur P. Beattie

You're welcome.

Thomas A. Fanning

Thank you.

Operator

line question of Angie with Storozynski And comes our the next from Macquarie.

ahead. go Please open. is line Your

Thomas A. Fanning

questions, you? - Inc. Capital Angie. Hello, never this but time Angie I will Macquarie I (USA), around. Storozynski are How ask M&A

okay. So,

will with bear your you okay? from pursuing some your So Georgia, So lessons the construction it. of me, in just are project nuclear be project. learned There

the lessons but go continued anybody have maybe an now, now, growth construction future, earnings to which through V.C. offer for why You South objective, You, this to are acquisition construction. positioned Vogtle in those project, from else Carolina? grow the potentially applying not earnings and X% than better in Summer higher the could some of attempt not learned

through you be why a rational talk help, an operation of have for there You a There guys? would incredible that events needs me course record. just that utility track so is not

Thomas A. Fanning

for I us decades, mean known Look, for the question. bet. I Yeah. Angie, you've thanks

opportunity. really You comment specific can't on any

being a the seller As Elizabethtown, pay as and AGL, we with kind attention those with We of same threshold, cetera. really roughly both et use disciplined buyer. to

And we so have know that wherever an we'll screen. that radar look active apply and we logic you

extraordinarily are like Certainly, Storozynski In Macquarie tell, objectives, long one-on-ones these all the different in any my think putt. now. that's probably Capital of is the many right time answer of will customers, said public, before I've other but of earnings a Inc. and bit balance deals (USA), - this the external hard Angie companies attempt best I everything else, and to order and done. get then different calls, As to first a

Okay...

Thomas A. Fanning

the needs opine to – longer is There's partners so why Understood. reason at Is second the to the monetization through DoE SCANA? are especially have Toshiba saw it's there Inc. moving understand – we that - many with Angie pieces, the what I it's there now. Macquarie Vogtle Storozynski right just project securitization, so hard many there, And (USA), is, than of so Toshiba on question see them taking that and my you proceeds. Capital the

Thomas A. Fanning

Yeah.

course As the of is Toshiba loan a guarantee guarantees. DoE a underlying financing, the the normal that of package, part security

they so package, outstanding, only a And bit of belief a change anything Macquarie of My to new in Capital will change that the existing there Inc. for taking for the time have in we to get but little by a Storozynski in essentially OMB security it's a approval that we a the get new commitment and is has - (USA), It's process. loans not OMB the this taking say package. in process will some done. Angie DoE. get just just security and

Okay. you. Thank That's all I have.

Thomas A. Fanning

Thank ma'am. Yes, you.

Operator

question from next the of our comes Mizuho. line Paul Fremont with And

ahead. Your line go open. is Please

Thomas A. Fanning

Hello, Paul.

Paul Fremont

regulatory I additional were still disallowances be in some guess, Mississippi table? If expect is to the call. proceeding, equity the in that into there Good as are Hey. should parties you Mississippi. matters there open of recommended off shareholders or Power, were infuse that intervener would any by that further

Thomas A. Fanning

had rate of something a energy about maybe numbers been the rate three less more a averages that. Mississippi asset circumstance industry or We is times process reliability equivalent under times the table. this understand, The gasifier of going way. off we're and financial pretty everybody unfolds. a Power integrity to to along process now that We'll in taken very What's said Paul, in of protect is customers the the consistently see though, has cycle X% we've remaining the than what that one-third combined to that way, painful round much where should has right outage Mississippi evaluated delivering be the Power,

asset, we to is fairly. expect economic be a and an asset treated this terrific So

Paul Fremont

would you Power, as I of circumstances on sort Mississippi under if any? consider mean, a selling potentially follow-up then what that, And

Thomas A. Fanning

think I question Well, that of to with Paul. that do. exceedingly answered goes in companies, whether be buy representing sell, we or Listen, the try assets, to that we interest I we to to and Angie's everything too, goes goes shareholders, question disciplined that

is for return benefit best benefit account, just the best that that rate, of So the think. leave question, of the assets taking mix ultimately all shareholders. to of That's to long-term I the into risk Southern Company inuring profile, what way our growth our

Paul Fremont

me. for it you. That's Okay. Thank

Thomas A. Fanning

Thank you sir.

Operator

Our Michael line of from Suisse. with the comes Credit next question Weinstein

Securities Suisse How Your - line Tom. ahead. LLC you is go Please open. doing? Credit Hi, Weinstein Michael (USA) are

Thomas A. Fanning

Hey, All you this on have (USA) to be they - of a Credit as Is regulators? Michael. monetization allow they keep are indication Are looking do any Michael how would LLC it project? right. the Weinstein and payments How to Suisse help treated you refund? Hey, the going you? Securities going balance by are to sheet refunds? the the for finance Or to be

Arthur P. Beattie

this LLC to from (USA) one their Credit - discussions construction We've we to there's we they been had the no Right. provide provisions, but The regulators, run of prevent to and in short Weinstein finalization recommend in the that for even a rate way? that NCCR work progress guarantees trying it Suisse of with once rate, Securities customers and that. some AFUDC have apply benefit the accrue in $X.X What Michael would loan to regulators attempt in which as billion reduction that benchmark. it pass would will fact customers balance refund DoE is this does would their that

Arthur P. Beattie

so. believe Don't

All be Michael Securities I think those Credit independent. right. Okay. - (USA) Weinstein LLC all would Suisse

Thomas A. Fanning

Commission the of regulation long-term a long for Georgia had Yeah, you record of benefit track has know customers. the constructive

LLC you I Weinstein Suisse - they'll Michael Credit Thank very follow that Securities much. practice. (USA) Okay. think

Thomas A. Fanning

Yes, you. Thank sir.

Operator

question Stephen line Our comes the with from of Stanley. Byrd next Morgan

go ahead. open. Your Please line is

Thomas A. Fanning

Hey, Stephen.

Stephen Calder Byrd

or I cost O&M you about, When cost that utilities, for afternoon. there? further good look that's be businesses? all your about anything thinking that different of the to an utility curious, imagine But specific just further cutting be think in you you under that I cost explore at businesses. we see the there cutting just could did utility some ongoing structure of wanted thing I'm have further could is at potential some at terms in way you Hi, potential your the but

Thomas A. Fanning

years Yeah. employing now to we're and and better in modernization context. way displace now, through What small a because with we plan able it, is for O&M with capital. that? office XXX more technology Interestingly, doing local call is of Stephen, customers of because we're a is requiring should perhaps we points Southeast to while what think certain in to modern we've model displacing business I in state do Georgia, customers, way reduced every the think are town with about we're practice, historical it the customers. what those to our we actions Why or this opportunities our a We and have enabling put about in been state physical see more presence connect for are with how thinking a largely the in presence expanded we our have being example, Georgia, in technology. largely,

these I times, about interestingly that in changes the number. the right our as that's have were I think very base. effect uncertain almost may also, And customer four we to think

last was fleet. helped. We're America in think I our kind most the trusted also in of of generating customer-facing kinds changes in That's have named think evaluating so utility the business. changes Georgia and Power those we year,

taking renewables, where the is operation. sends and best at every creating customer And that small this point, customers we small, what That is, PowerSecure we make, check to effect, the provide so and us the with largely the technology believe continue of our no In created, model five what some doing have I carbon and the prices aren't traditional this believe destruction. our about of the making, on in giving have kind the we and I meter a on service other of displacing side I with allowing that I and would Southern the to speaks does latest the of think, rather that of think final say infrastructure utilities business customer call future satisfaction us selling something energy we call, thing but having Southeast, a we're lowest improvements is our I and Once think changing. what option to in is moving gas the sell the we're what that's the about in you very thinking advent And has and at five customer the reliability, other United The us premises, energy the more then month, where kind customers and best about, do very been, in a creative up with steps a about what relationship XXXX, meter Now, control exercise Southeast. States. will long-term areas words, in again in say, now utilities see a least natural in important, this that to top low I coal, on between move to technology nuclear, transition thinks a that. think plan to we in the do importance and the were otherwise again, including would service. of another opportunity to

indifferent and still better to because going does better reductions better order it make the reliability, be to with of impacted was along seek you provide customer CapEx, Michael's but bills in that, an modernization about that add and to to customer Art every more budget think try by we're – continue We more efforts, was increase may I mentioned, call, service. keep CapEx as response these in to, bill, how in O&M our it earlier to – and thinking the ways cost, idea time keep

Arthur P. Beattie

earnings, to most Southern O&M Stephen, that you increase that year's of a if Gas, last a comment basis, was it other in which hefty consolidated as-reported year-to-date year-to-date our but year-over-year, inclusion Yeah. on one shows regard, of in look pretty due non-fuel not is in the at increase number.

I period, if companies' X% look down almost same at they're year-over-year. the So operating electric

parts a regard. that lot So, of are there moving in

Thomas A. Fanning

let idea. past, in talked throw And We've memory. recent years my haven't one me more about in it this done

have program our we We include optionality spending. where place this into in

weather this it it third we something last weather was year-to-date, but think what want hot. In was this quarter, was Art, was was exceedingly I I that reasonably words, this quarter negative. And $X.XX, had say year, the it? of so year, normal, year's recall other $X.XX to yes, $X.XX, like And year-over-year in

Arthur P. Beattie

$X.XX.

Thomas A. Fanning

able maintain effective $X.XX. our cost We've through earnings management. been to

actual I'm structure. over kind you changes in We've almost I any describing and these, are at demonstrated year year, of of cost and changes there I year, describing and are company, what if was So guess, look over kind strategic our reliable tactical earlier our always most our record, predictable we performers the that guarantee to performance future, the compared is hit track look almost the guidance, for Southern you of one our we if Company can't but earnings at in it, industry. and

Stephen Calder Byrd

the team just been taking the sense? outside the budget, really makes an the is it if Very, over been sort of project? any all was has team independent And there has it assessments to party just then case separate and you thinking core part here, Or i.e., very Bechtel that had a the look? Vogtle, Or the been of been I just together, helpful. involvement of is an SCANA, shifting Have done SCANA in developing about project. of just independent project assessment really that of engaged the that's entire

Thomas A. Fanning

along issues. Absolutely, to won't yeah. speak No the way, SCANA's I

to Jacobs, clear sits the been as the and everything all really of He's him, Bechtel lots the very are whether and done. has I look on really table of VCM us along Further, through way, we've had are evaluations. and Georgia. we The staff, issues monitor Dr. significant Fluor as transparent made access kind had ultimately that we've is, we've Our processes a relationship the and they soup cost, at went with the everything to in issues, go, mean, easy, And complete this foundation had so exceedingly involved. meetings guy. risk. idea of PwC the and who which the all had we've assessment these through a whether independent of been staff going to with commission testimony. wanted the both upon terrific independent Bechtel we've the it's they assessment. commission nuts, they of with the commercial Bill an Gosh, to that forward, course, in whether we to decision Kenrich this at for He's is independent all a new us. assessments. the He through are go fees firm We no-go, independent where cover have have and provided called has made schedule of

future So, I effective we've B, relationship. to been, commercial and using only it A, the I an the information we've not transparent; used in in but past, think exceedingly that create, think,

Stephen Calder Byrd

I That's had. helpful, That's thanks. very all

Thomas A. Fanning

Yep, thank you.

Operator

the Ali Our Agha next of question comes with line from SunTrust.

line Please open. Your is ahead. go

Thomas A. Fanning

Ali. Hey,

Ali Agha

Hey, afternoon. Tom. Good

Thomas A. Fanning

Good afternoon.

Ali Agha

I clear out be the versus laid million. slide $XXX wanted for Is am on original accurate, just up I question. XX. right? looking like this will equity year that $XXX at reading end that When you're we as looks million, First you at to the

Thomas A. Fanning

correct. That's

Ali Agha

Okay.

think? cetera. again, is then so to all net-net, the high-level previously you the have that that a the to asset sales, were not things likely say put fair your various what or And moved is potential from message fair it et less is you needs you around, When perspective, that are monetization, out I laid mean it than together, thinking

Arthur P. Beattie

upcoming in efforts, go are we with all a said you what last had we'll the than are we Vogtle, especially to of potential on call. cost near-term, increase outlined our talk plan certainly think February. near-term, have – time, modernization that as our which the associated in more about part as lot they I But before, less we've through related increased

know And I lot lot you're all So, that on. a of moving to is going that gist the let it. think getting but to yeah, parts, intended do slide was of stuff there's you there's of

Ali Agha

the of solar again, been things those part you portfolio, monetization sales, Yeah, had not pushing the for utility of equity, that the gas these big were I tax think, but earlier.

Vogtle with (XX:XX) the but that case. with just if cash even just So that's there's was in, modernization, the increase seems be that to I wanted it coming and more not clear maybe the

Thomas A. Fanning

It coming clear. more There is in. is cash

companies, vast in to when we modernization will I about need thing think so of in equity those investments. future, think be other that the operating this effort very increases make marginal the additions associated we with represent that the any majority them will the is regulated for clear

Ali Agha

weather-normalized in X% looking versus a expectation, for sales, quarter, but flat at down trends but slightly still to you're your Okay. up your down separate the on the third note, year. And the X.X% in year-to-date,

your near-term you're long-term changed wondering thinking and outlook? your have thoughts about load weather-normalized Just how when both

Arthur P. Beattie

by Well, sales pull year partially out could at this that you X%. the weather we normal quarter, weather, but I is don't were residential and down which least in explained, think the technically call hurricane, specifically it

we thought rest would by some I be, influenced strong expect but not the for be Industrially, of momentum and will outages associated been that and of this with hurricane the that. it as the that the into think we stronger. was it's as year XXXX

in plan forecast our still think So When improve think I – long-term we're now, X XXXX, X.X%. the we but about our estimated forecast, say, new always we we in of low last that for year, by you And could X%, on number had right we'll our February. year-end. kind in I to update think

Thomas A. Fanning

we X.X%. the in Yeah, are for storm X% month quarter into the and of trivia, those X.X%; during of you the for the that our load; Georgia lost

the kind of of that effects. storm magnitude the gives you So

Ali Agha

storm permanency I Or were that? see. to temporary, to also base a clarify, how moves forward? wanted as on you attached Last about O&M O&M tactical in we off the as make about going cost there question. nature? those come in. costs view think XXXX increase we Should should one-time you can the some and Tom, other talking Is

Thomas A. Fanning

things I I if back favorable – identify then we've opportunity budgeting these Power, that we it we back going up revenues, higher had, and where our weather, just for Yeah, do that CFO only sakes, do when we Ali, have we do, we call flexible this but been do, heaven Mississippi identify to tee to we things system of example, really want are was this started for I doing things the we that we them. have if and to would mean,

exceedingly we satisfy some that and to the be able do a we're Interestingly, period over we to and over kind or weather. to where priority is really, a hotter and this bang comprehensively takes aren't, the it's so it's time. in worked and with some CFO get way of a been buck confidence a a of since more, I've have sense up gives And in O&M of now we So the actually do fourth-rank variations well. us of goes And years in very handle orderly biggest kind we able time. enabled for back, sensible, we gosh, economy that to weather, think Southern, and decade are level years O&M the of we what system. of normalized across And a spending

we fact years need. results deliver and years been satisfaction the reliability So period. of down, been low It's is exceedingly beneficial. the and it's that some able through the maintain we we that demonstration up, overall this we this some exceedingly, the we've rate And it's to customer have, have,

Ali Agha

Understood. Thank you.

Thomas A. Fanning

Yeah, you. sir, thank

Operator

with comes Our next Michael the from line question Goldman of Lapides Sachs.

Your line Please is ahead. go open.

Thomas A. Fanning

Michael. Hey,

Michael Lapides

it construction my one Bechtel others, to you or gas protect more Power's on project your years you on project. you've Tom. continuing Georgia multiple and management do Vogtle Thank complete Georgia be contract a the One the guys then question. the be project inflation and Whether Vogtle, cost On more left Hey, on have for business. Power with still of or even taking even from and it partners got before project? you delays how

Thomas A. Fanning

lot variance XX% Well, is already other in already taken In of number a equipment one, out. the estimate is the on-site. words, the of

but estimate, also cost contingency. contingency contingency a the only schedule not healthy have in We included in

in We have Bechtel. incentive commercial structures with relationship the

all Fluor months is which all that six headed And an us that schedule think us since showing Westinghouse taken direction. given contingency. from Bechtel of that are I they're of improved the based calls set in the right productivity has for a we've and on metrics, site over

think extension. the other it's We're six-month about if of a in So, schedule. kind we're of a words, schedule therefore, kind you contingency own XX-month filing making, XX-month; a for metrics it, our providing

The those of is really of equipment to in pointing of most to real and wire right forward numbers the the going that, our go right like to able stuff hit and importantly, and are being efficiency pipes these things site. direction. labor the key going now type and at but success All to commodity

through is executing say has me years. relationship Vogtle I'll McGarvey over X. with be execute other ability Sean had Building help U.S. that this can with I turbulent understand that a endeavor period of They in a believe that favorable the do Westinghouse, our success. personally, just The is were company, that to very to they way and X supporters a been to in enormous ours I critical terrific this done. will think Trades have And The everything overall in their terrific partner and thing they

pretty those work, type cooperation you if up of I kind think the the we're on-site, labor skilled So of line kinds but variables. of feeling having of big metrics, kind improved commercial with good, incentives, the are we're

Michael Lapides

with them think inflation is when or along they due able you project for commercial cost put recall other and the and downside schedule is in on the Power, is budget, sharing don't Oglethorpe, this, share in to a Georgia what incremental the challenging the you project And are finish on being downside in about metrics, time the there public just creeps or to I to below either the for there's where or downside simply owners? where on project there if Bechtel there execute it upside domain and even budget

Thomas A. Fanning

no. estimate both their of is performance. is fee to that half for taken Yeah. allow that Michael, think cost We plenty of good essentially schedule incentive we've and contingency. Their tied

Michael Lapides

Got it.

little Southeast been seeing exposure, to of it's want had whether Kinder, I midstream SONAT I you've seeing and it bit from you're it you bought you've the that might to offshoot now partake move as had for positioned business. where incremental to topic just AGL half change for that? you you while since curious in obviously a about mean, a and solution there's potential to and well well, that bit opportunities Okay. midstream a offshoot since a requires gas are little a time gas, need and the of opportunities be in

Thomas A. Fanning

looked So things. some at we have other

questions. solutions the time. of you look And for Gas to values, when as around gas continue get gas another just long We Bloom, directional one we're the the if provided feed. and new seeing technology energy of revolution done by those with it with fracking drilling is long, a is we've so-called going and infrastructure which at these then looks to a kind is prominent be opportunities

did have of Gas we obligations. so We million. Georgia. million $XXX with to haven't original over have other our can placeholder the to, that in Georgia big to system was kind the at or Natural gas a in some but efforts, interstate an speak pipelines through We dealt Fairburn, say far expansion Southern SONAT looked that hit the want they It $XXX so I thresholds.

that. done we've So

expanded investment. even initial have We beyond our

kind are figure of underway, already still out and those. Gas how their there ones out we're The on has executing own big people Southern them kind projects to done. and I are other get still trying of think to

Michael Lapides

And of that the to that that's premature incremental stuff I Yeah. even nuclear Transco or like down. about the and has of generation of be going years. two in projects like know the Carolina, to do gas to at a didn't last it South thinking it come lateral four more Carolina. demand three gas is a over move opportunities the maybe comes Either to had SONAT these start an going South And strong look the major a previously of it's state ACP point, east very it's things and will doesn't that gas-fired lot very, than I some to a need if utilizing it. had lot to two cycle LDC years, further there asked it's question reason seems in forward that. now kind strikes all goes one And go three it me, only just or the of to one that's you're

Thomas A. Fanning

region, think we that question its a this Michael, to fascinating do that prefer and just optimal for of implication question South kind as about the Yeah, way may and not the how Carolina answer. about is a be we Thinking that's think that moves?

Michael Lapides

Tom. you, it. Much Thank Okay. appreciate

Thomas A. Fanning

You bet.

Operator

question next Arnold Our of from Bank. comes Jonathan Deutsche with the line

Your open. ahead. go line is Please

Thomas A. Fanning

Jonathan. Hello

Jonathan Philip Arnold

eliminated it, me, were but the said XXXX? equity think the kind mean and – I just XXXX, near-term are kind strikes in you've says Hi, to mitigated XXXX. of you endorsed just on Thank equity, or you I near-term Greg's the our greatly done you is question, needs of guys. in word or for even it planning It your taking call. does slide want

presumably want sure right that. on So but to it means I'm XXXX, I make

Arthur P. Beattie

have and XXXX will details call, and to right. little but settle down mitigated be then as are yet you thinking we'll wait of have well. that all parts see There of on be We'll to the moving just XXXX a and kind about next a filled until you're it think give lot Yeah. bit. some in the I

Jonathan Philip Arnold

Thanks, then ... Art. And

Thomas A. Fanning

continue and the equity side, other are we core efforts on of the that to utilities. source that on modernization CapEx And

Arthur P. Beattie

right. That's

Jonathan Philip Arnold

as just you you last Kemper these then we And you mean, obviously reiterated. then X% for things but together, withdrew had the I Right. the tie slide growth that step-down quarter the showed that

then still pointing that Assuming and that question the to another was higher. it – you're or in you're same, suggested that

endorsing say that that. concept didn't to just curious anything or... you're you whether was Just I

Thomas A. Fanning

we Yeah, were. are we where

Arthur P. Beattie

Yeah.

Thomas A. Fanning

long-term We're Jonathan. were, We are a where we on X% still trajectory.

all update call – we'll the in early this course, is, February Of it next year. whatever the

Jonathan Philip Arnold

helpful, provide metrics can you give similar a behind there of Okay. some you're productivity can there? that finally but extra us of you that thank sort insight or for Are that It's some on all number? or little showing. they just you color summary Vogtle, do subsets anything very And the then look

Arthur P. Beattie

Well, I Jonathan... think,

Thomas A. Fanning

I said... think you

Arthur P. Beattie

on that I site. That our different nuclear in and would island the building, think important order now, but we'll are approaches right think we're block. those And where metrics, where the turbine as you the that's critical are around with focus because the on productivity and those meet construction goal would you issues define of outlined. the I want you're keenly there most power Yeah, to unit are that aspects different aspects and the of right, all schedules the on we've most to path focus be to

Thomas A. Fanning

but we improving at look as And in weeks in kind if and help regulatory things. only two just ultimately these you will example, sites, which concrete not expansion, our iron A broader (XX:XX) every with for different we pace through see other sit will kind compared, And us is of up streamline fascinating other as question lot work to opening variety of site so on and fronts. rebar you it's in work and of project involved fronts, ground, a meetings. the the also or a of the putting process a variety of of

right. Art's So

in think critical of deal us great moving great forward right flexibility I maintaining of a nuclear these on for schedule. flexibility going now that path other up island, opening the is deal the a us but by and we're provides fronts,

Jonathan Philip Arnold

Okay, contingency. and on to it your understand make includes that sure slide before metric and I just comment the six

you the months that if to Is around were So hold early. metric on six plant ...? bring effectively that X, you'd

Thomas A. Fanning

but That's a numbers, XX-month fellows, that's X.X metric. is And around in I round schedule, here, months, correct think we a right. XX me if to this were on it bring

you're contingency. any of below not if eating into X.X, So you're sort

Jonathan Philip Arnold

I going think you, And was up finally, by helpful. may into just curious insight what I guys not now? guess you the about on Sanmen All fire of we APXXXX right. I or supposed That's the to weren't Tom. have if there? any Thank be hear may

Thomas A. Fanning

that just that approvals Jonathan. of waiting are fuel. reason it's they surmise only governmental Yeah, technical they can real We haven't on. loaded know why no We

Jonathan Philip Arnold

you. Thank Okay.

Thomas A. Fanning

schedule. me to Hey, to very X.X let clear. a just schedule, XX-month a XX-month equal me, Jonathan, is excuse be equal X.X is

but hope I you're just in clear. between and that X in that's between very XX X.X, If months. and to be want months means XX you're obvious,

Operator

line next with of Associates. Patterson from comes the Glenrock Our question Paul

go ahead. line Please is open. Your

Thomas A. Fanning

Hello, Paul.

Paul Patterson

it is going? how Hey,

Thomas A. Fanning

Awesome.

Paul Patterson

Great.

the quickly just Vogtle, it bit co-owners. seems On on that here. focus more a there's of little So a

I I I don't they're up. recall coming just the hearing maybe and And it. missed at testifying be to that going think

wondering in – that sort might change? you more So on? And that what cetera. if of et be you – requests, the terms seems sort if describe a to know there a me could let elaborate be going just of or is of could unusual data I'm focus the just is maybe of

Thomas A. Fanning

it and a been that available was in now the Power in and a one to Georgia's munis, City this a have needed do that's We And thing forward, most important Georgia way. of as projects interesting. think Well, And very through It's co-ops, of the clear Dalton, joint really that's listen, going working of to this participation. challenges us, history. the we I seeing reflection arm-in-arm. be is shared through we've what economic the in a the right interest is the interest: opportunities

Paul Patterson

Okay.

Okay. on, settlement And Do moving any let there's think this. you get a in VCM? that me possibility deflated ask we'll this you

Thomas A. Fanning

might be questions But relevant in unfold. about Everyone's continue it's process some at filings, response the It to I've table. say with said great always a the therapeutic allows everybody Georgia's possible. always seat settlements to practice, a possible. practice boy, It's to that heard. to allow voice triennial and before is

we'll or not. right we think settle the whether I conclusion get

Paul Patterson

Okay.

perhaps just Okay. wondering you the you And of comes sort then guys and as factors if might could there's on the and potential the go there that or interesting. O&M there, about on comment to perhaps modernization I'm size that be might thinking of be nature with grid if grid lead the thinking tie-in sort not? any that what for just of this sort what you and modernization, about are you of

Arthur P. Beattie

degree from it opportunities on other. directly a along to O&M with linked to there, rates. to in order goes identify To we'll impacts have that perspective identify timing each minimize additional they're the the we Well, the

other. the to lead will one So

Paul. We point, size have not this outlined at

our process on with quite call. We our next detail not you yet. more through that will give on We're

Thomas A. Fanning

this to CEO a CEOs being can to really I tell on driven the way by the this customer Power different and thing. and of Stan at kind both is recall, initiative. leading the really Connally, but exciting company. that CEOs, of how There's all system requirements. figure of initiatives. behalf a head across the you modernize different technology out a is Yeah. parts do comprehensive currently all Gulf And It's in to kind changes, effort of these market when It's

Paul Patterson

mean, we this, I you about it any out? technological things? But is of is have I pay whether to deployment about what Or there any sort that type whether of sort when bunch anything on stands think of or whole just O&M, itself Okay. And for save I'm can like business might we And capital just not as that? not wondering of were of how or some talking sense about or meant a this O&M. before

Thomas A. Fanning

I earlier And well, is a modernization marketplace, really distribution, kind can administrative customers. a yeah. CapEx. fact, small in of the whole to gave of example with kind is a in so-called manifold in Gosh, objective reducing the transmission systems of the chain, resource, of as here even physical approach only Sure. we and modernize this technology locations but towns deploy modernization increase trust It and their making as it to the easier this to of not variety and customers, their actually do us We're our how for and and ultimately to points the notion internal can how as pushing in goes the improve human operation as improving a imagine, with but for business into areas. company. customers result of generation we supply presence really you satisfaction it

Paul Patterson

Thanks Okay. lot. a Great.

Thomas A. Fanning

bet. You

Operator

line the Wells from Patel comes question next of with Kamal Our Fargo.

is with line Your ahead your open. go Please question.

Thomas A. Fanning

Kamal. Hello,

Kamal B. Patel

Good afternoon, gentlemen. How are you?

Thomas A. Fanning

Terrific.

Kamal B. Patel

a Had of couple questions.

would potential the asset that to value? at book at say evaluating, market a you're sales is premium that Looking you value fair

Thomas A. Fanning

It answer. Elizabethtown. That's depends hard to certainly mean asset. the was fair in I on it

Kamal B. Patel

investor guess, Okay. solar be And portfolio, the the case, that demand demand, is that would given the I the with not? yieldco even seems it and financial like

Arthur P. Beattie

looking they're off flows of coming so. believe we cash we Yeah, of capital very of XX-year kind average predictable, life out there, that. assets, into deployment for kind passive think high-quality are of There investors

think the there's in So we marketplace. value

Thomas A. Fanning

more than those organized an of solar a think value market. kinds We say, immense structures have asset upon dependent

Kamal B. Patel

needs then mitigated, from the at yourself your equity machinations looking in near-term debt to you understand see company? do And where be holding at to the Okay. looking an I perspective longer term, FFO but issuance.

Arthur P. Beattie

maintain we the our also OpCo, of achieve to towards to order the I progress stake in the equity in use from of we'll our but we proceeds sales. can That's those overall have think achieve the certainly and We'll these that reduce debt so eliminate well over target target. targets. we as need, some asset longer term, Well, that put ground

Thomas A. Fanning

aiming at? target And coverage the we're ratio,

Arthur P. Beattie

XX% debt. to FFO

Kamal B. Patel

Thanks the time. Okay. for

Thomas A. Fanning

you. Thank bet. You

Operator

Our comes Visium. line the from Ashar with question Khan next of

ahead. Your line is open. go Please

Thomas A. Fanning

Ashar, have you. glad to

Ashar Hasan Khan

How Hi. guys doing? you are

Thomas A. Fanning

Awesome.

Ashar Hasan Khan

that go you I know of? Art, quarter in that Could the with was did don't Tom, you wanted on remind of to, that moving remind $X.XX us us number? to you these second you The what to up the last parts. Kemper was How made that if up call. back had detriment from can I provided some $X.XX slide come

Arthur P. Beattie

to of would the it piece earning we an write-off. Well, no from a was and need longer that additional asset related the would that the Kemper it equity have fact project, the create

the splits could $X.XX to but I have we you. you, earning was to don't $X.XX the then I another So $X.XX get equity. asset I for them for and think to the $X.XX think

Thomas A. Fanning

That's the numbers. round

Arthur P. Beattie

are Those rough.

Ashar Hasan Khan

Okay.

equity have of alleviated now make or no? $X.XX as with, So now being with look come up that drag the we that a that through we need other to some $X.XX forward mechanisms lower does

Arthur P. Beattie

And XXXX next guidance No. longer we achieve up our towards term. earnings in I yet. the our forward. the still and what that over best we're still best guess think ourselves it's still we'll going but assessment call, the early approach certainly still as trying it's going for an to to see where It's clear

Thomas A. Fanning

more to metrics. EPS Certainly gives respect in flexibility credit changes us with growth and

to balance is our shareholders. Our idea that, long-term commitment to maintain

Ashar Hasan Khan

Okay. Thank much. you so

Thomas A. Fanning

you. Thank

Arthur P. Beattie

You're welcome.

Operator

Our Capital next Levi line question Avon Advisors. from the of Andy with comes

go Your Please open. ahead. line is

Thomas A. Fanning

Hello, Andy.

Andrew Stuart Levi

Hi, guys. doing? How you

Thomas A. Fanning

Great.

Arthur P. Beattie

Good.

Andrew Stuart Levi

I know And Just don't. questions. should maybe a couple I but this,

your you whatever for all whatever, any or or on it's asset sell of the the because whether is or else you that, up solar Elizabethtown goes into pocket? write-offs leakage basically, sales, there NOLs or or tax On that end may it, selling, whatever

Arthur P. Beattie

it oddly of Actually which Yeah. that loss, kind of... but gain, Elizabethtown, a we to a is on slight taxable a do has book expect lot but will in enough, with be could result there odd,

Andrew Stuart Levi

right? cash, not That's

Arthur P. Beattie

accretion. The

Thomas A. Fanning

Goodwill.

Arthur P. Beattie

me. Excuse Goodwill.

Andrew Stuart Levi

Right.

Arthur P. Beattie

of gain as it not, with likely result whether depends assets the that well. a happens we but would on then, what course, And do than a in more or tax solar transaction

Thomas A. Fanning

NOL, And recall, are an deferred. in due since taxes we're any

Arthur P. Beattie

Right.

Andrew Stuart Levi

you so able... will be Okay,

Thomas A. Fanning

for of It's a period free time.

Andrew Stuart Levi

...to receive cash.

Thomas A. Fanning

Yeah.

Andrew Stuart Levi

right. All

in cash the Okay, kind next so of that's of couple door... all years, run, short the in

Thomas A. Fanning

it. That's

Andrew Stuart Levi

your And ...for then... use. question. That was my

Thomas A. Fanning

to But a good time ...

Andrew Stuart Levi

On that we're of we should forecast raise and the been on cash cap revised raises. kind about about type of you're that some to of going think on way earn Is just I'm then and ahead so to get about myself earning that maybe in assets regulated CapEx and recently of are not that? expect the getting and probably redeploy you've rid this, various a again, is maybe but one talking to getting thinking of are same ahead be the but myself, the quarter, this mod am you with one, of side, of capital? type a fourth what Or would obviously kind grid you way able I significant return getting doing to

Thomas A. Fanning

face. we always our of the we all look, that And Well, to impact thing. buy also goes at that always asset, kind tactical it of or sell are always best mindful should publics of long-term very not we and whether any that we who's viewed with as the be right? take, a look a external owner it, So and okay? we That's

example, day I merger, said, announced like So considered for Resources when Elizabethtown, the and AGL calls. the we we even that I on got

the So attractive an a for in folks. asset of was variety always market that

accretes just run. balance home And just improve that's that's and of we returns, somebody remember, to forward, as math to is That's be? return. think the what to a to going a portfolio. be and risk that. we really years we X be the it's do the risk do, So are where of can trying of Where kind with will going reduce If risk to about function that combined going and else asset. all that's in not returns, we're XX we Value It next opportunistic, is think return.

Andrew Stuart Levi

to with utilities? CapEx some has the do future So opportunities really, it nothing at

Thomas A. Fanning

No.

Andrew Stuart Levi

be, it of there then to would And be then maybe that? where don't of earnings of is final like do off get you that's with, question basically thought okay. potentially there small that of I that ahead give that my myself of again, or will because XXXX's of but Okay. and Kemper it has off when to want – X% and, be too, XXXX something would Will rebase type some off you be reiterated. guidance or

Thomas A. Fanning

reduce (X:XX:XX). mean grow to at $X.XX that exactly. X%, you XXXX, before, shown grow the I Yes, you $X.XX, it kind take math that of we've X% That's forever.

Andrew Stuart Levi

Okay. very you Got it. Thank much.

Thomas A. Fanning

You bet. Thank you.

Operator

comes Research. Fleishman from Steve question the line with next Wolfe of Our

Your line is Please open. go ahead.

Thomas A. Fanning

Steve. Hello,

Steve Fleishman

Yeah, Tom. hi, good afternoon. Hey,

question monetization ties one Just on it and guess, the I but – also rate, in the Toshiba growth with monetization. with the Vogtle

not going to until have this thing up. that units rate, to ROE anyway. way the in in address a some in help you just are for out that going deal monetization that you and a it's temporary with how period you look growth to XXXX are Because that Just Can like reset are period?

Thomas A. Fanning

just to have we a a the things settlement to treated in But on looks is XXXX in-service. same you we Whether those divot whether like against growth and resolves two all you're the that X% brief split those back X%. when service, or few you're right XXXX pieces moving or at the deploy clear of units a X% itself. clear or rate, in long-term year they how as that, will it you , are of, if the two the how but back cash. underperforming keep you consequence travel to It them way and There's Our through, X%. depends any the but just

is X%. Our long-term rate growth

Steve Fleishman

way getting if and then delay but... get money period that Okay. cost that above to is limit plants this kind the the you're just And the that there you able of obviously up you that some could limits cap sooner, I mean if of period. a get

Thomas A. Fanning

There is no cost cap per se.

Steve Fleishman

just It's based timing. Okay. on all

Thomas A. Fanning

Yeah.

Arthur P. Beattie

That's correct.

Thomas A. Fanning

to and Steve, very right. clear this the I on that. That's other just all X% be thing. about want Hey,

challenges in the that's sustainable we and been regular, $X.XX. rate to $X.XX a (X:XX:XX) growth County, our believe We we in Kemper and have increasing that long-term and growth from way predictable because rate even dividends the with of at increased

belief per this purview one strategy. to of our set ultimately but dividend so setting ultimately drives ultimately are any that is regulatory value. on kind We construct impact a long-term is due And our have won't the long-term course, the se an our X% deviation – what of on dividend is of a board, policy of trajectory, year the

Steve Fleishman

feeling Okay. close the sector you view curious, talked to particularly a your How be addressed And you about way in then out the about some just, this of interest bonus like curious I'd the utility kind I'm deduction. I issues maybe right to outcome and the that so tax of given coming are you're way, are guess upfront, reform. it.

Thomas A. Fanning

sir. Yes,

gotten first the Senate. terrific McCarthy, with We forward me had in folks Kevin Kevin let the we've the House. and that in say pushing understand and been thing in the White So this Brady all support met certainly really

be It's but either we'll credit. believe coffee that get worth a tax unanimity in the guess. Production get cup and will the I and there fairly of best credits or parochial. timeline me my Here's whatever, we the Senate. treated ultimately believe is eliminated I production for moved in House let Congress in or for tax Vogtle.

I some XXXX will we CapEx we And my what for in of and for we interest. we of will defined came believe done out. ratable – deduct will with stepping be as for retain follow but that was the back of industry, to that, exchange for go taxes public where I parochialism, will ACRS back And we property out not then kind in depreciation now. Now believe accorded follow we utility what I the we'll have expensing was think ability – up was in that XXXX. originally is as some That's schedule

Steve Fleishman

Okay.

So it's the of a utility industry... kind carve-out for

Thomas A. Fanning

has Which existed since...

Steve Fleishman

rate-making. reflect ...to its unique

Thomas A. Fanning

been it's of guys And very terrific engagement been and sensible a Congress listening. have with kind in these Yeah.

Steve Fleishman

House Do you the will... think

Thomas A. Fanning

sorry. I'm

Steve Fleishman

look Will at our since be out bill. you the think come with first the will House this that

Thomas A. Fanning

see. mean right it I will. now, I Well, think let's but guessing I'm

Steve Fleishman

Okay.

Thomas A. Fanning

benefits CapEx. for on benefit is dependent get benefit. of sway sake. plans. those the us expansion or in another don't place giving upon heaven's that I are expensing our put long-term based deployment over We really and really. tax year capital environmental They're transmission and decades one Look a Those largely big It's generation just of

benefit However form on energy near-term. the the they're of in most of capital has with giving of benefit customers immediate isn't deductibility kind to be an the customers' tend of negative expensing us that cost Especially a tax. elimination really interest they're and regressive a bills so hurting impact energy,

actually pays itself. trade So the for

interest keep and for that in capital and CapEx Let's the for tax let's schedule the retain on intensive depreciation world. industries gets important deductibility. the Congress most it's really

Steve Fleishman

Okay. Thank you.

Thomas A. Fanning

bet. You

Operator

question from with Mehta next comes line Citigroup. the Praful of Our

line Please ahead. Your go open. is

Thomas A. Fanning

Thank us. joining Hello. for you

Praful Mehta

you the appreciate Thank marathon and for it. Hi. thank you session, so

Thomas A. Fanning

Always happy.

Praful Mehta

Yeah.

point tax actually reform helpful perspective. color and the was So very

deductibility also understand interest effectively interest the tax of tax or expense holding at it's an will to to the down, out, XX%, basically rate come from XX% tax rate let company then comes deduction saying if you're right, that say it that or wanted plays down? Just what and shield down comes

Thomas A. Fanning

That's right.

Praful Mehta

Southern, are I million the you by looking your What and does debt. debt are plan evaluating you mean now, saw holding you company right this increased $XXX that holding in like the for at company – actually

to the rates come given down. So out given actually just wanted company tax tax might about how the and reform figure debt thinking you're holding

Thomas A. Fanning

industry I some a on this Southern. to you've is equation. simultaneous Overall, we centered fair greater it of subject is taxes. whole mean, a it's look Yeah, believe But to more for important stuff. trade including or boy income it the it goes of because less in net

bit that's an position tax of our to rate carry with position plan. factored of financial forward gets a into any extended The us is tax other or sort credit thing impact unused we've but every this lower

Praful Mehta

you, Got enough. fair and

Arthur P. Beattie

some other The rating friendly. it, junior a characteristics around it's to issue which add is the debt, more subordinated perspective from agency debt will equity

Praful Mehta

you. Got Thanks.

will your targets well? you debt as with So, help it to FFO

Arthur P. Beattie

Yep.

Praful Mehta

of sale effectively were been you of interest Got sale higher for have for potentially the projects, understand to And about solar same assets that your wanted could of you. also in the be one-third get or referencing the price this purchase you sale market prices terms than minority the same? the would interest prices

Thomas A. Fanning

huge the of really Yeah, get hey, of going where kind to dictate agreed, of let market argument valuation sort any We've market we all we're you would about what, not a are. prices internally prefer know to had get. may We this. that into what

Arthur P. Beattie

That's right.

Thomas A. Fanning

enough. soon We'll know

there. for you your patience thank So

Praful Mehta

for that's And plan finally are of fine. sold. just projects proceeds, part then you pay down that associated point the being is any to there when on Yeah, debt the that get the

one-third level? a to of full going to So, project, the down if debt is of be stay is well you're or selling let's debt the the say as going paid one-third at

Arthur P. Beattie

at we basis. finance portfolio we Yeah, on finance Power, even Southern a

debt equity use they've proceeds ratio. and We XX% would So got to reduce equity.

Thomas A. Fanning

way it's much flexibility you a understand than we a Power lot and is say a to say project from the And more apart structure. simpler finance financing, Southern approach got project finance gives us

Praful Mehta

Got you. thanks Well, so much guys.

Thomas A. Fanning

bet. you. Thank You

Operator

next of from Julien go comes Bank America Dumoulin-Smith line Our question of Lynch. ahead. with Please Merrill the

Thomas A. Fanning

you? are how Julien,

Arthur P. Beattie

Hello?

Thomas A. Fanning

Julien?

Julien Dumoulin-Smith

want love on basis, talk you of I a talk let's talk little the – days Southern this want income might kind the you maybe side any EBITDA. side. to about of but to we're this, about? to Power you to try Any here I'd other initially the we all consolidated kind but the to metrics world talk historically, bit have here suppose know net about about? that on Do of quickly we take think CAFD, early I I So, a hear one-third monetization more on metric of whatever talk you in size up? how sense mean,

Arthur P. Beattie

may interest this. as investor, here. that and contract there it solar be a in target as way We lives. Well, cash like that's to we is we I XX think, Julien, that up XX-year flows There talk lots are think X,XXX the the these megawatts much think be average of about could there's included passive to for and just outlined of that, kind in we've the projects

Thomas A. Fanning

into Southern We at something directly directly metrics. that's track other We they people if translates stock because the net and for yes, away internal thing EPS, income that record, their do to to value. from which stay you objectives. easy cash And the look tried we value beat historically, talk is, do Power's translates regularly into

Julien Dumoulin-Smith

we Got think it. about... Should

Thomas A. Fanning

As they this year. did

Julien Dumoulin-Smith

Absolutely.

business expectations business thinking be I'm about me linearly of of this perhaps given with of this thereby or out is down going the on kind an there on something the I check confidence saying, we said mean, a acceleration to sort down we'll earnings as to and about be swap that you sell elsewhere? and chunk this, should Let taking this with

Thomas A. Fanning

Southern share a all expect is We'll this call, along. earnings There go increase through its Power contribute will an of in or but in should at reduction. not that is growth has what detail next it that all previous you the EPS

the keeping EPS, in October are laid XXXX that of out plan of Southern terms contribution exactly We with Company. we in to

Arthur P. Beattie

to a would selling we to of owner intent assets our additions to the thing. of future no buy portfolio. to that one-time right portion is is offer And There ongoing that this solar like solar

Julien Dumoulin-Smith

the kind of the about the back not for part storage is footprint? to around necessarily if Coming them. gas storage Obviously, turn in traditional Excellent. long-term think the prospects I Maybe that core, value net have overall metric. doesn't this of it gas and this assets earnings question. to what business? mean ultimately a that specific in across do are reflected you income your How

Thomas A. Fanning

it's the been, think earnings is answer. don't will short be. our significant Hasn't We picture, don't think to it

Julien Dumoulin-Smith

us? about against bit you're enough. a of of negatives looking fair are talking big terms novel just here, obviously us program. been for that what if maybe, the you lot of of a maybe uses talking can positives Can of little originally Okay, the summarize have that sense you'd at that about necessarily need last, Because cash little of folks to outside summarize a not give a you flows the big almost the modernization in here, equity raise then asking you could and a bit hour-and-a-half cash try bit Actually, I to articulated? cash try little and and

Thomas A. Fanning

Yes. I before I the know, pluses We and terrific equity we the that like that in I had mean are Elizabethtown, market. mean, we for found opportunistic don't the started I any buyer talking in had interest were well a we said, that fact need Art about.

a discussions series really of over of So culmination that time. a was

an equity, we're growth to X% equity rate certainly Southern way. impact has Southern the Power, on EPS able to the maintain using our forward of tax our needs along and going contribution overall

words, cash thing that other In will would sale us. lump I a over another is guarantee, we the of have think we'll interest Art really minority a that solar Toshiba as The get time it said to raise monetization, interesting certainly Power other Southern sum. gotten now is issue. X-plus portfolio, it's in the The of be the years, before,

that's timing. just So

associated with increases associated Whatever and then approving equity business I with think Public associated the the Georgia we credit O&M with and plans X&X, CapEx on Mississippi Commission it's OpCos. in Service support modernization In up Kemper. Power with Vogtle whatever's to needs, in end decreases in and the metrics of terms this the

them have next those the quarter all plan pieces and puts takes, and the the We up, add financial first year. will in

Julien Dumoulin-Smith

Thank you Really all it. very luck. Great. appreciate Good much.

Thomas A. Fanning

you. Thanks joining You bet. Thank for us.

Operator

line next our with question State Jenkins the And of comes Investment Board. from Dan of Wisconsin

with is your line ahead Your Please open. go question.

Thomas A. Fanning

Hey, Dan, us. thanks joining for

Dan Jenkins

Good afternoon.

been in of schedule a most your answered, mine So Carolina, the or nest have terms stirred Georgia, wondering been couple South wondering just that I in one, have more with seeing I activity interveners of any of in terms was the are hornet's but aggressiveness VCM in Vogtle. the that's Commission case? In uptick in around particular, around you given up

Thomas A. Fanning

can't issues Dr. and It's both to us. those that on way Dan, I responsive any processed. them, in that The be and of but It's the Jacobs that for can South such any I VCM aware Public a have proven we good of Carolina. processed. worked bet is terrific. so to we the you had Certainly, certainly can come to of ways, this certainly right? with to read for have comment we've has be blessing been news I

now participate exercise to have VCM sake. a in been we've and what As It's for XX any kind of all interveners well, invited. every heaven's VCM is welcoming process the

So process, at don't these kind so and has Georgia of good the a Public been I we've think had Service surprises all this Commission.

whether public kind support of public thing, a or thoughtful other that had So a is years, government. or here the the supported in process. has at I thoughtful in just regime we to we've the think Commission general, you now be legislature Georgia. the evaluating federal the and the have proceed widely will it's our the do, out when or The Vogtle broad and think in we I run think we've way statements the state terrific tremendous look of support I clear, we over say, to been the And Governor polling by the I in of position have, Commission

boy, still in move but still the completely get and other have very and We've that loan that through. lot mindful should good the participation the tax streamlining ends to and our And terrific significant boy, them a forward. support credit support to NRC, or national environment get know but should think should tests, I level, such on consolidated We continued see oh I this You I the which does I ITAC of be and in Vogtle We'll think to continue is table. issues, thank going There's great process. I forward. execute. the how eliminated security production of a think have the that, seen risk you've at kind of We that's guarantees for to up, getting the tests, host say. external a just really we why federal government concerns, support,

Dan Jenkins

think side, In are Okay. mostly? you was curious I the I Michael, was to waiting XX% that about, I think, – commodities talked know you that are what when productivity it components you mentioned, still response the I of the on to receive,

Arthur P. Beattie

construction complete those of necessary are to of equipment wire, the most Dan, commodities, assets. just the

So, components most major the the of are ground. on

Dan Jenkins

things none So of the being... are

Arthur P. Beattie

Not aware that of. I'm

Dan Jenkins

...whatever.

Okay.

Arthur P. Beattie

there, Yeah, stuff. big your turbines are there. the Panels are all

Dan Jenkins

All the whatever? and shield panels

Arthur P. Beattie

that all big stuff there. generators, is Steam Yeah.

Dan Jenkins

verify, items nuclear think are I mentioned what scheduled and that quarter earnings more I are just so? what on critical of little you this or or to three And kind fourth little your detail before months for turbine a then you'd the building. island next Okay. if the next path give kind the call, of was bit, wondering a

Arthur P. Beattie

Yeah. we'll lot in of progress Unit a Dan, then the term both It's X. XX, the believe. And slide and both it I horizon for X appendix, outline that near we've that you, outlines and Unit them got a stuff projects. slide for items

Thomas A. Fanning

to kind containment building, when when that pointing path these see earlier, you at And I things, kinds think critical like is look as items. of of Art you said words

Arthur P. Beattie

Correct.

Dan Jenkins

all That's I Thank Okay. have. you.

Arthur P. Beattie

Dan. you, Thank

Thomas A. Fanning

you, Thank sir.

Operator

any there at further questions. And are there no time, closing this are Sir, remarks?

Thomas A. Fanning

Yeah, patience. activities are now until want be they're time, right thank I going some activities we not know for you I got everybody. on executed. and thank just dimensionable positive an a of to It's to I your know those and lot exciting going of positive

as excited see and by what to takes certainly, an next Thanks about We're have future our investor. much lot as forward. participation expect and we on path. in quarter the next a We that much. very your information to in our that appreciate means going we'll feel and our thorough earnings and confident more explanation and to more the call, a very attention growth rate gives the We

Operator

call. Thank does Company you, conclude XXXX sir. Ladies and this Southern quarter the earnings gentlemen, third

may now You disconnect.

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