Good day, ladies and gentlemen, and welcome to the Q2 2019 NiSource Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Randy Hulen, Vice President of Investor Relations and Treasurer. Mr. Hulen, you may begin.

Thanks, Josh, and good morning, everyone. Welcome to the NiSource second quarter 2019 investor call. Joining me today are Joe Hamrock, Chief Executive Officer; and Donald Brown, Chief Financial Officer. The purpose of this presentation is to review NiSource's financial performance for the second quarter of 2019 as well as provide an update on our operations, growth drivers and financing plans. Following our prepared remarks, we'll open the call to your questions. Slides for today's call are available on nisource.com. Before turning the call over to Joe and Donald, just a quick reminder, some of the statements made during this presentation will be forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements. Information concerning such risks and uncertainties is included in the MD&A and Risk Factors sections of our periodic SEC filings. Additionally, some of the statements made on this recording relate to non-GAAP measures. For additional information on the most directly comparable GAAP measure and a reconciliation of these measures, please refer to the supplemental slides and additional segment information, including our full financial schedules available at nisource.com. With all that out of the way, I'd like to turn the call over to Joe.

Thanks, Randy. Good morning, everyone, and thank you for joining us. Our NiSource teams continued in the second quarter to execute on critical priorities across our business, driving results for investors and all our stakeholders. These priorities include our long-term utility infrastructure modernization programs, safety enhancements across our gas distribution system, our electric generation strategy in Indiana and completing the restoration in the Merrimack Valley. With the progress we've made in these area through the first half of 2019, we remain confident that we’ll deliver on our commitments for the year. Let's turn to Slide 3, which summarizes our key accomplishments through the second quarter and early third quarter. We delivered non-GAAP net operating earnings of $0.05 per share versus $0.07 in 2018, in line with expectations and positioning us to deliver net operating earnings per share within our $1.27 to $1.33 guidance range for 2019. We expect to complete $1.6 billion to $1.7 billion in capital investments in 2019, consistent with our forecast for the year. We remain confident in our long-term forecast of 5% to 7% annual growth of our non-GAAP earnings per share and dividend from 2019 through 2022 and expect to make capital investments of $1.6 billion to $2 billion annually from 2020 through 2022. Gas system safety enhancements are advancing across our seven-state footprint, including accelerated implementation of a Safety Management System or SMS. Our SMS is aligned with the framework developed for pipeline operators by the American Petroleum Institute. SMS is a comprehensive approach to managing safety, emphasizing continual assessment and improvement, and identifying and mitigating potential operational risks proactively. As part of our SMS work, enhancing risk management processes have been introduced at each of our operating companies. We've added additional safety expertise to our Quality Review Board, the independent entity overseeing our SMS implementation. Cynthia Quarterman, former administrator of the Pipeline and Hazardous Materials Safety Administration joined our QRB in June. The now six-member board chaired by former Transportation Secretary, Ray LaHood, includes experts with diverse backgrounds spanning the aviation, energy, and nuclear industries. In addition, Deborah Hersman, former chair of the National Transportation Safety Board was appointed to the NiSource Board of Directors in June. Having these widely respected safety experts on our team is of great value as we focus on continuously improving our safety practices. We are also making significant progress on installing over pressurization protection, automatic shut-off devices on our low-pressure systems. Teams have installed more than 800 of these devices across our footprint, including all necessary work in Virginia. These devices operate like circuit breakers. They are designed so that when they sense operating pressure that is too high or too low, they immediately shutdown gas to the system, regardless of the cause. This work remains a top priority. Our gas team continues to execute on regulatory initiatives with the approval of the settlement in our Virginia base rate case and filing of a new base rate case in Maryland. In Indiana, the hearing began last week in our electric base rate case and is expected to continue until August 7. We filed a partial settlement in April with key stack holders which addresses our revenue requirement, federal tax reform and depreciation schedules related to the early retirement of our coal plants. We expect an order in the fourth quarter. Also in Indiana, the Indiana Utility Regulatory Commission last month approved Power Purchase Agreements in two of our wind project applications. We remained focused on the restoration and customer support in the Merrimack Valley. We are nearly done replacing heating equipment for approximately 875 customers, whose furnaces or boilers were repaired in the weeks following the September 2018 event, and we expect to be 100% complete by September 15. In May, we reached a settlement with the three impacted municipalities in which we agreed to pay $80 million to cover municipal property restoration, including road repair and to resolve all other municipal claims. And as announced on Monday, we reached an agreement in principle to settle all class action lawsuits resulting from the Greater Lawrence event. With that agreement, which is subject to court approval, we've now resolved four major civil claims against the company. Does that reflect on this? I'd like to add that we will always be mindful of the impact this tragic event has had on our customers and everyone in these communities. Now I'd like to turn the call over to Donald, who will discuss our financial performance in more detail. Donald?

Thanks Joe, and good morning, everyone. Looking at our second quarter results on Slide 4, we delivered non-GAAP net operating earnings of about $19 million or $0.05 per share compared with about $26 million or $0.07 per share for the same period in 2018. The biggest driver of our non-GAAP financial performance continues to be the impact of our long-term infrastructure modernization investments, supported by constructive regulatory outcomes and established infrastructure trackers. Before turning to our business segment financial results, I'd like to address the Greater Lawrence incident expenses. Our total estimates which is detailed on Slide 10, is somewhat higher due to the class action settlement and other expenses as described in our 10-Q for the second quarter. Going forward with four major civil claims related to the event now resolved and the restoration work near completely, we don't expect any significant future adjustments to the estimate. As a reminder, this estimate excludes any amounts we may incur for potential fines and penalties. Also as we've previously stated, we expect to recover a substantial portion of our Greater Lawrence incident costs through the $800 million of cash and insurance coverage and $300 million of property insurance in place at the time of the event. We started submitting claims in December, 2018 and have recorded casualty insurance recoveries of $670 million through June 30 and have collected $535 million in cast to-date. We have also filed our claim with our property insurer and discussions around this claim and recovery have begun. As insurance recovery process moves forward, we plan to continue to provide quarterly updates on our progress. Let's turn now to the non-GAAP financial results for business segments. Our Gas Distribution Operations segment had operating earnings of about $47 million for the quarter compared with about $36 million for the same period in 2018. The increase was driven primarily by new rates from base rate cases and infrastructure replacement program execution. Our Electric Operations segment reported operating earnings of about $86 million for the quarter compared with operating earnings of about $77 million for the comparable period in 2018. The increase was driven primarily by infrastructure replacement program execution. Looking at our consolidate year-to-date O&M expenses are non-tracked O&M is essentially flat compared to our 2017 baseline. But slightly higher than 2018 due to increased safety related spending in our Gas segment. Looking forward, we expect a slight increase in expenses related to safety enhancement programs we're implementing across the Company. We believe the safety enhancements are prudent benefit of our customers and the communities we served. Our financial results coupled with our solid execution on the regulatory front through the first half of the year strengthens our confidence in reaffirming both our 2019 non-GAAP net operating earnings per share guidance of a $27 to $33 as well as our long-term earnings and dividend growth forecast. We also expect to maintain our current financing plan. Now turning the Slide 5. I'd like to briefly touch on our debt and credit profile. Our total debt level as of June 30 was about $9.2 billion – about $6.9 billion was long-term debt. The weighted-average of maturity on our long-term debt was approximately 18 years in the weighted-average interest rate was approximately 4.6%. At the end of the first quarter, we maintain net available liquidity of about $1 billion, consisting of cash and available capacity under a credit facility and our accounts receivable securitizations. Our credit ratings from all three major rating agencies are investment grade, and we're committed to maintaining our current investment grade ratings. I'd now like to turn to Slide 6, which covers our financing plan for our long-term growth investments. Our current plan continues to include annual equity in the range of $200 million to $300 million from our at-the-market or ATM equity issuance program and $35 million to $60 million from our employee stock purchase and other programs, plus incremental long-term debt. Our ATM is consistent with our approach to provide balanced, predictable financing for our infrastructure investments. In execution of our financing plan is expected to enhance our credit profile by strengthening our funds from operations to debt metric to the 14% to 15% range over the long-term. Before I turn the call back to Joe for a few infrastructure investment and regulatory highlights, I wanted to note that we plan to provide 2020 non-GAAP earnings and capital investment guidance on our third quarter call, consistent with our practice in recent years. Joe?

Thank you, Donald. Now let's turn to some specific highlights for the second quarter and early third quarter of 2019 from our Gas Operations on Slide 7. In Virginia, we received regulatory approval in June of the settlement agreement in our base rate case. The approved settlement supports ongoing infrastructure investment programs, addresses the impacts of federal tax reform and increases annual revenues by $9.5 million, including $8.2 million in revenues currently collected through our infrastructure tracker. Final approved rates went into effect in July 2019. In Maryland, we filed a base rate case request in May with the Maryland Public Service Commission to support continued replacement of aging pipelines and adoption of pipeline safety upgrades. If approved as filed, the request would increase annual revenues by approximately $3.7 million, including $1.2 million of current infrastructure tracker revenue. A commission order is expected by the end of 2019, with rates in effect in January 2020. In Ohio, our first annual application for adjustment to our Capital Expenditure Program rider remains pending before the Public Utilities Commission. The CEP rider, which was first approved by the PUCO in 2018, allows us to recover capital investments and related deferred expenses that are not recovered through our infrastructure modernization tracker. The application seeks to begin recovery of approximately $122 million in capital invested in 2018. A PUCO order is expected in August 2019 with rates affected in September 2019. In Indiana, we filed our latest tracker update request in June and our long-term gas infrastructure modernization program, covering $12.4 million in incremental capital investments made between July 2018 and April 2019. An Indiana Utility Regulatory Commission order is expected in the fourth quarter of 2019 with rates effective November 2019. Also in Indiana, our PHMSA compliance plan, covering approximately $230 million of capital expected to be invested between 2019 and 2023, remains pending before the IURC. We expect an order in the second half of 2019. Now let's turn to our Electric Operations on Slide 8. In June, the IURC approved Power Purchase Agreement applications for two of the three wind projects; Jordan Creek and Roaming Bison that we announced in February. The application for the joint venture and ownership agreement for the third project Rosewater remains pending before the IURC, with an order expected in the third quarter of 2019. The three projects have nameplate capacity totaling 800 megawatts. Jordan Creek and Rosewater are expected to be in operation by late 2020, and Roaming Bison by 2021. The wind project filings are consistent with 2018 Integrated Resource Plan, which calls for the retirement of nearly 80% of our remaining coal-fired generation in the next five years, and all coal generation to be retired by 2028. We expect to issue a second Request for Proposals in the fourth quarter of 2019. Our goal is to transition to the most economical, cleanest electric supply mix available while maintaining reliability, diversity and flexibility for technology and market changes. The hearing is underway in our electric base rate case, which remains pending before the IURC. As we mentioned on our first quarter call, we filed partial settlement agreement in April, which addresses the revenue requirement, federal tax reform and depreciation schedules related to the early retirements of coal-fired generation plans called for in our 2018 integrated resource plan. If approved as filed, the partial settlement is earnings neutral and allows for return on equity of 9.9%. I would add that in May, we reached a settlement with the Industrial Group, which resolves many issues related to implementing a new service structure for industrial customers. The hearing is addressing cost allocation and rate design, and IURC order is anticipated in the fourth quarter of 2019. We continue to execute on our seven-year electric infrastructure modernization program, which includes enhancements to our electric transmission and distribution system designed to further improve system safety and reliability. The IURC approved TDSIC program represents approximately $1.2 billion of electric infrastructure investments expected to be made through 2022. In June, the IURC approved or latest tracker update request covering approximately $59 million an incremental capital investments made from June 2018 through November 2018. Before revisiting our key takeaways for the quarter, I'll share a couple of quick updates. Our NIPSCO subsidiary was named one of the most improved brands nationally in the latest J.D. Power Residential Natural Gas Customer Satisfaction Survey and we had the highest satisfaction among Indiana energy companies. This strong performance is evidence that our team is focused on delivering for our customers is paying off. I mentioned earlier the progress we are making on our accelerated SMS implementation. We were pleased to see the American Gas Association Board recommend in May that all AGA member companies adopted a Pipeline Safety Management System modeled after the API framework. As AGA noted, safety is at the core of what our industry does and adopting SMS is another way gas utilities go above and beyond to protect our employees, customers, and the communities we serve. As we turn to the Q&A portion of the call, I'll share a few key takeaways. Our teams are executing well on our critical priorities across the business. As a result, we're confident in reaffirming our 2019 non-GAAP net operating earnings guidance range of a $1.27 to a $1.33 per share and our financing plan. Our long-term investment driven growth plan is intact and resilient. We continue to expect to grow both net operating earnings per share and our dividend by 5% to 7% annually from 2019 through 2022, and we expect to maintain our current investment grade credit ratings. Safety remains the foundation for all that we do for our customers and the communities we serve and we're advancing that commitment with our accelerated SMS implementation across our seven state footprints with strong independent oversight by our Quality Review Board. Our electric generation strategy is advancing with our wind project PPA's approved and our electric base rate cases progressing with settlements in place addressing key issues and the hearing underway. We're making substantial progress in the Merrimack Valley restoration with heating system replacements, nearly complete and settlements reached in our largest civil cases. Again, I'll note that all of this reinforces our ongoing commitment to residents and businesses impacted by the event. We remain mindful of the impact of this tragic event and we're dedicated to finishing the restoration. Thank you all for participating today and for your ongoing interest in and support of NiSource. We're now ready to take your questions. Josh?

[Operator Instructions] Our first question comes from Julien Dumoulin-Smith with Bank of America. You may proceed with your question. Julien Dumoulin-Smith: Hey, good morning.

Good morning, Julien.

Good morning. Julien Dumoulin-Smith: Hey, pleasure. So a couple quick items. First, maybe a little bit more housekeeping. How are you thinking about strategic avenues here with respect to Massachusetts? I know that there's a lot going forward here. Just if you can comment at all, I’d be curious. And then I've got a couple of others.

Thanks Julien. It was a matter of policy. We do not comment on M&A rumors or speculation. Our focus in Massachusetts is on delivering safe and reliable natural gas and high-quality service to our over 300,000 customers there. And continuing the restoration and rebuilding that we've talked about here this morning, and those efforts in the Merrimack Valley continue. And our focus remains on that level of service across our entire seven state footprint. Julien Dumoulin-Smith: Excellent. And then moving to a more substantive matters I suppose, when you think about Indiana, are you talking about an RFP coming up? How do you think about some of the challenges that we saw this spring in Indiana, maybe at the legislature, et cetera, we've got perhaps a little bit of a follow through on that front as well. Can you comment how you evaluate or think about some of the pressures there relative to sort of an economic pursuit of resources with respect to your RFP process? I'm just curious how you balance both of those, especially in the decarbonization trajectory you talk about?

Yes. I mean there's obviously going to be a bit of a tail on the policy agenda there, especially with the taskforce setting up and we'd expect to see continued discourse around the transition of electric generation, not just in our portfolio, but in the state and in the region. As we all know, that's a pretty high profile discussion in many of the states across the Midwest. So we're front and center in that. I think that the thing neutralizes that or makes it kind of more objective and transparent is the very approach that we've taken that being to issue RFPs at every step along the way. So that everyone can see what's available in the market and what the straightforward economics and the alternatives are. And as we noted, we'll continue to use that approach with another round of RFPs this fall. So that that discussion can be informed by objective market data and we'll continue with that policy. And we don't know what we'll see in the next round. So we'll continue to keep an open mind as well as we step through this. Julien Dumoulin-Smith: Excellent. Quick housekeeping or last item here. With respect to – I think I heard a 3Q update on CapEx, is that when we'll get a little bit more detailed on what this new approach with respect to gas, risk assessments, playout more materially with respect to both cost and CapEx?

Absolutely. We're planning and expect to provide guidance both from an earning standpoint as well as a capital standpoint. And at that point, we'll be able to provide some perspectives on how SMS may have shaped our portfolio both from an O&M standpoint as well as a capital standpoint. Julien Dumoulin-Smith: And inclusive of the RFP expectations or is that would be later on?

Yes. I would say the RFP expectations will be later on in 2020. Julien Dumoulin-Smith: Okay, great. Thank you, guys. Really appreciate the time.

Thank you, Julien.

Thank you. And our next question comes from Michael Weinstein of Credit Suisse. You may proceed with your question.

Hi, guys.

Good morning, Michael.

On the RFPs and the IRP at NIPSCO, I think you and I have talked to before about the use of tax equity, possibly being proposed to regulators for regulated projects. And just want to give you comment on that and whether that mitigates future financing needs in terms of equity needs and going forward?

So we have started the conversations with our regulators in Indiana. We have the one project that is a joint venture project. It's new to Indiana and its news across the country. In terms of that type of structure in a regulated business, we think we are progressing on that and expect to get an order in the third quarter around that joint venture investment. From a financing standpoint, look at it up front. There certainly is the opportunity for an equity investor to take most of the investment upfront. How we are looking to structure these transactions though is that on the backend, in some future period, five years, 10 years, we would end up having ownership, most of that ownership of those projects. So I'd say it's a short-term period where we wouldn't have to put in the amount of investment for the full project. But at some point, we would want to have the bulk of that investment within the utility.

Right. That makes sense. With the risk of the investor purchasing the tax credits, so that that would in theory reduces the cost of the project?

That is correct, yep. And provide the tax savings to our customers.

Correct. Right, and then on the NTSB investigation, do you have any indication about timing on that when it's supposed to come out and what are your expectations in terms of what it might say?

Yes. As you might imagine, Michael, we can't speak for the NTSB and their process and their discourse. We've been working very closely with them literally from day one, and remain in that mode of working with aligned objective that to understand everything that led to the incident and how we can work to prevent those incidents in the future. They have said that they expected within a year or so of the incident to have a report, but again we don't have any specific details on that.

Gotcha. And on insurance recovery and pace of recoveries, has that coming in a little faster than expected on exactly as you expected? How is that affecting the – I guess the drag on earnings as a result of having to finance the cost, while you await recovery?

Yes. The insurance progress has progressed as you see we brought in $535 million of cash and both the receivable of $670 and so it's going really well, our insurance policy holders are working very constructively with us we've done. I think a very good job of providing them a lot of information to support the claims process. And so I think that has helped move the process along and obviously that has helped us from a financing standpoint and reduce the financing needs really short-term debt here this year. So we still have more to go to get the $800 million and we do continue to expect to get a substantial portion of that $800 million between the end of this year and next year. Having said that – with the – more than half of those proceeds coming through this year, we do expect that we'll be in the market here in the third quarter to help finance the company long-term. So working on that plan, so it won't give out any details yet, but we expect that we'll be in for a long-term financing in the third quarter.

Okay. Gotcha. Thank you.

Thanks, Michael.

Thank you. And our next question comes from Christopher Turnure with J.P. Morgan. You may proceed with your question.

Thank you. Don, maybe you could just go back in time a little bit and remind us of the last time you did a kind of junior subordinated note and the cost there and your overall experience and how that fit into the capital structure?

Yes, thanks. So we've done two preferred equity issuances both last year through did a June issuances $400 million of 5.65%, and then a December 2018 issuance $500 million at 6.5%. So we're looking at structures like that that preferred equity structure allowed us to have about 50% equity credit with the rating agencies. So we do like that. We've also got a structure in place that allows us to call that that note in five years. And so it gives us some flexibility there as we look forward. So that's one of the items that we are looking at potentially going forward. We've seen others in the industry take advantage of hybrids and prefer to in particular. And so it seems like the pricing as well as the understanding from investors says I think become a lot more clear in looks – continue to look like a viable opportunity for us.

Okay. So kind of within the realm of different types of convertible debt or non-convertible kind of subordinated debt and preferred equity. It sounds like you're happy with the experience last year and investors are kind of well receiving of those types of issuances?

Yes, absolutely. I'd say we continue to get investor support and questions of if we do it, please give them a call. And that's what we're trying to balance and understand as we look forward for our cash flow needs as well as ensuring we hit our credit targets.

Okay. And I guess, I just wanted to confirm, based on this slide and your message in the script today that kind of all elements of the 2019 and 2020 funding needs are reiterated. In other words, the ATM, the internal programs, the debt, et cetera. Even though part of that to TBD like no pieces of that have changed given your progress so far on the insurance?

That's correct. That's correct.

Okay. And then just my other question is, given that progress, is there kind of any reason to waiver at all on your 5% to 7% EPS growth target of the 2019 base waiver as in kind of within the range or around the range?

No. And as I said, we plan to give guidance for 2020 and beyond on our third quarter call.

Okay, great. Thanks Don.

Thank you. And our next question comes from Steve Fleishman with Wolfe Research. You may proceed with your question.

Yes. Hey, good mornings. So just a brief question. In the past you've talked about potentially shifting maybe if we needed to a little bit of the equity ATM in the 2019 versus 2020, but I'm wondering now with the insurance money coming in pretty good, how are you feeling about whether you need to do that or not?

Thanks Steve. I think it's something we're still looking at. It is still early, but certainly the insurance progress that we've made has been positive. And I think it's less likely that we would pull forward, but I think it's a little early for us to commit for this year. But as you said, if we were to do that, it would be a pull forward from 2020, so that on an average basis it's $200 million to $300 million a year.

Okay. And then just one thing just want to check is, I know you'll give 2020 guidance I guess on the Q3 call, but just your 5% to 7% growth rate is already kind of in place for the next several years. So unless something dramatic changes, we should generally just assume that is the rough growth rate?

That's correct. Yes, that is our guidance.

Okay. Thank you.

Thank you.

Thank you, Steve. Have a good day.

Thank you. And our next question comes from Insoo Kim with Goldman Sachs. You may proceed with your question.

Thank you. First question is in Indiana, I know you'd be giving your CapEx guidance in the third quarter earnings, but given the HB1470 legislation that was passed this spring on the TDSIC mechanism, any update on how much incremental investment exists beyond the base plan? Is it just more incremental in nature or do you see potentially bulkier opportunities there?

Yes. Insoo, thanks. Insightful question. As you noted and we sort of already answered it, we'll guide 2020 on Q3, whether we have that level of specificity at that point in time remains unclear. As you noted, that mechanism is a TDSIC related mechanism. And so the more likely moment that we would talk about those capital plans would be when we file the next TDSIC filing, which maybe a little bit later than that. We're still working through that planning. All of that said, we do see an opportunity there for enhanced grid modernization investments and some key technology investments that our teams are working through as we go through this planning cycle.

Understood. And then more broadly, when you look at your overall portfolio of utilities and just longer term growth opportunities overall in the industry, is your preference to remain more exposed to gas versus electric? Whether it's organically or inorganic?

We like our mix. We always evaluate the performance and potential of not just the mix, but the individual companies and that's what drives our investment and our regulatory cycle and guides such decisions as what we'd like to mix to look like. But we like the position that we're in.

Great. Thank you very much.

Thank you.

Thank you. And our next question comes from Shahriar Pourreza with Guggenheim Partners. You may proceed with your question.

Hey. Good morning, guys.

Good morning, Shahriar.

Sorry, I hopped in couple of minutes late. Don, you specifically called out any sort of potential O&M update as a result of the SMS program as we head into the third quarter. Without going into specifics, do you kind of envision the O&M growth profile changing as a result of the programs?

So the way I’ll answer it, it's too early to provide any specific perspective, but we've certainly have kicked off SMS in a much more accelerated way this year. We've got a team looking at – I think there is 18 or 19 different work streams looking at our assets and our procedures and our risk management programs. And we're learning a lot about how we can enhance our operations. And so I expect we will have some changes that come through and are delivered through across our seven states. Too early to say whether that changes our overall O&M program and profile, but certainly there will be some enhanced investment in our Gas Operations as we continue to implement SMS across the seven states.

Okay. That's helpful. And Joe, I obviously appreciate that you can't come around Maryland – Massachusetts in any kind of strategic things, but what sort of costs coming to light around expenditures and capital. Can you just remind us how you're thinking about the rate case in Massachusetts?

Yes. We've talked about that throughout the year, Shahriar. It's a little early to set up the plans for the rate case or regulatory strategy more generally in Massachusetts. We've remained focused on restoration. We've remained focused on a positioning the company to move forward and the communities to move forward. And the property insurance claim in particular relates to any potential regulatory strategy related to the capital investments in the Merrimack Valley. So there's a number of steps that would need to set up before we're able to talk about specific regulatory strategies. Of said before and would continue to say that that we wouldn't expect that to be any sooner than late this year or early next year before we're in a position to talk about that strategy.

Got it, thanks. That was it. Thank you, guys.

Thank you.

Thank you. And our next question comes from Greg Gordon with Evercore. You may proceed with your question.

Hey, good morning, guys. A lot of my – if not all my questions were answered, but just to clarify, one thing. Your insurance recoveries have been pretty good. You show on that slide that you've gotten a significant portion of a $670 million of the $800 million of casualty already in the door.

That's correct.

Are you thinking about sizing your financing needs against your assumed insurance recoveries? Are you assuming that you're ultimately going to be able to recover the full $1.1 billion of casualty and property insurance? Or are you assuming some risk adjustment against the property portion when we think about that in light of the total costs that you've currently incurred for the Greater Lawrence event today?

Yes. So on the casualty insurance that the $800 million, and as you noted, we've booked about a $670 million receivable. We are certainly well into that process and conversations with our remaining insurance providers, so very confident in getting substantial portion of that, if not all of that $800 million. The property insurance claim, we just filed a few weeks back. So it's very early in the process to talk about recovery, amount of recovery and timing of recovery. And so they are just now our provider having an opportunity to review the claim. It also note that part of that claim that we're working through that our insurance provider is looking for is to have more information about the assets that were damaged in the Merrimack Valley incident, and that's subject to the NTSB investigation right now. So timing wise, this one is going – was always going to be a little slower. And we've got to work through that process with them. But as I said, through my notes earlier, we'll continue to provide updates quarterly on our overall insurance progress, including the property insurance.

Okay, because as I think about the – your financing needs, which you've also been very clear on and gave us the update on incremental long-term debt. I mean with $1.68 billion to $1.69 billion of current estimated costs that that could theoretically create a $300 million swing factor, which I presume would be caught up in the non-convertible subordinated debt or preferred equity portion of the financings is that's the independent variable at this point. Is that fair or unfair?

Yes. Absolutely that figures into our long-term financing needs, the amount and timing of the property insurance claim. But also looking at just our overall plan both capital and our operating plan. And so that's the process that we're in right now to really understand what are the different levers and how things are shaping up for 2020 and beyond. But property insurance figures into that and will impact financing obviously.

Okay. But when you flex assumptions for different recoveries on the insurance, you still feel like you're comfortable inside that 5% to 7% earnings growth aspiration based on a reasonable risk adjustment for recoveries on the remaining insurance. That it's fair reason why you're still confident in the growth rate.

Absolutely. Yes.

Okay. Thank you.

Thank you.

Thank you. [Operator Instructions] Our next question comes from Charles Fishman with Morningstar. You may proceed with your question.

Good morning. I kicked this around with Randy a couple of weeks ago and if I got any of the numbers wrong, blame me, not them, but to replace the coal plants who are retiring, a little over 2,500 megawatts of capacity. You've got three big wind projects, roughly 800 megawatts so you still have around 1,700 megawatts there'll be future RFPs, I assume. What piece of that would you anticipate being from in probably gas of that 1,700 megawatts. I'm just assuming all of it can't be intermittent solar or wind.

Yes. Insightful question, Charles. And the best place to start would be to look back at the IRP from last year. And that reflected a long-term view based off of the RFP we took last year, which was from memory about a 65, 35, 65 renewables, 35 natural gas from capacity. And keep in mind in the MISO market, we're about three gigawatts out of 102 or so gigawatts. So it's a bigger equation than our own standalone portfolio is another way to think about that with transmission. The strength of the transmission system there. All of that said, the key driver in the way we've set this up is that we can step through time and reevaluate the market and the planning portfolio as we stepped through time. So that 800 is nameplate that is not the credit you get in the capacity market for that. And so it's a relatively small portion of the overall portfolio and it's a way to start the process, kind of fills in for the loss of Bailey, the retirement of Bailey and doesn't really yet start the progression to replace the plants we would retire in 2023 and ultimately in 2028. So it's a pretty dynamic step through time approach to this that will answer that question iteratively as we go.

So roughly of the 2,500 megawatts of coal retirements, roughly you're saying one-third would have to be natural gas. Would any of that be a combined cycle or do you think it'd be all peaking at this point?

And I'm not saying would have to be then I want to be careful about what you're hearing. It's not would have to be, it's the IRP that we ran last year showed about that makes and that accounted our existing Sugar Creek combined cycle station. So I'm talking about the total portfolio, not the replacement portfolio.

Okay. Interesting Times. Thank you.

Thank you.

Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Joe Hamrock for any further remarks.

Thanks Josh. And thanks to all of you for tuning in today on a bit what I know is a busy day for you. And thanks for your ongoing interest and support. We look forward to continuing engagement with you as we step through the remainder of the year. Make it a good and safe day. Have a good one.

Thank you. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Everyone have a wonderful day.