Kathleen Lally - VP of IR Ralph Izzo - Chairman President & CEO Dan Creeg - EVP & CFO

Paul Patterson - Glenrock Associates Travis Miller - Morningstar Michael Lapides - Goldman Sachs Sophie Karp - Citigroup Gregg Orrill - Barclays Capital

Ladies and gentlemen, thank you for standing by. My name is Kelly and I'm your event operator today. I would like to welcome everyone to today's conference, Public Service Enterprise Group Third Quarter 2015 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded today, Friday, October 30, 2015, and will be available for telephone replay beginning at 1 PM Eastern time today until 11:30 p.m. Eastern time on November 6, 2015. It will also be available as an audio webcast on PSEG's corporate website at www.PSEG.com. I would now like to turn the conference over to Kathleen Lally. Please go ahead.

Thank you, Kelly. Good morning. Thank you all for participating in our earnings call this morning. As you are aware, we released third quarter 2015 earnings statements earlier today. As mentioned, the release and attachments are posted on our website at www.PSEG.com, under the investor section. We also posted a series of slides that detail operating results by Company for the quarter. Our 10-Q for the period ended September 30, 2015, is expected to be filed shortly. As, the earnings release and other matters that we discuss in today's call contain forward looking statements and estimates that are subject to various risks and uncertainties and although we may elect to update those forward looking statements from time-to-time, we specifically disclaim any obligation to do so even if our estimate changes, unless of course we are required to do so. Our release also contains adjusted non-GAAP operating earnings. Please refer to today's 8-K or other filings for a discussion of the factors that may cause results to differ from management's projections, forecasts, and expectations, and for a reconciliation of operating earnings to GAAP results. I would now like to turn the call over to Ralph Izzo, Chairman, President and Chief Executive Officer of Public Service Group, and also joining Ralph on the call today is Dan Creeg, Executive Vice President and Chief Financial Officer. At the conclusion of their remarks, there will be time for your questions and we ask that you limit yourself to one question and one follow up to give everyone an opportunity to join us on the call. Thank you.

Thanks, Kathleen, and thank you everyone for joining us today. Earlier this morning we reported operating earnings for the third quarter of 2015 of $0.80 per share, that's a 4% improvement over the $0.77 earned in 2014's third quarter. The results for the third quarter bring PSEG's operating earnings for the nine months ended September to $2.41 per share, which represents a 6% increase over the $2.27 per share earned during the first nine months of last year. Slides 4 and 5 contain the detail on the results for the third quarter and for the nine months. We delivered solid earnings in the third quarter and year-to-date, and we made excellent progress on our objectives for growing our business. PSE&G continues to deliver on the earnings promise of its expanded capital program and PSEG Power achieved solid operational and financial results driven by improved performance from its nuclear and combined cycle fleet. During the quarter, PSE&G recent agreement with the staff of the New Jersey Board of Public Utilities and the New Jersey Division of Rate Council that provided for PSE&G to invest $905 million over a three year period beginning next year to replace aging cast iron gas mains. Approval by the BPU later this year will allow PSE&G to continue the work begun under Energy Strong, supporting a clean, safe, and reliable gas system well into the future. This agreement follows upon BPU's support earlier this year for a $95 million expansion of PSE&G's investment in energy efficiency programs. PSE&G's focus on improving the resiliency of the grid and increasing operational efficiency has translated once again into PSE&G being recognized as the most reliable utility in the Mid Atlantic region for the 14th consecutive year. PSE&G's responsiveness was also recognized with receipt of the outstanding outage response time award for restoring customers 30% faster than any other large investor owned utility. This is by no means the end of the infrastructure and replacement needs for PSE&G and its customers. Turning to PSEG Power. It is increasing its investment in clean, efficient gas fired capacity. Power cleared a new 540 megawatt combined cycle gas plant at the Sewaren station as part of PJM's reliability pricing model base residual auction. The new unit represents an investment of about $625 million to $675 million. The development of new capacity at Sewaren is in addition to Power's announced plans to construct and operate a new 755-megawatt combined cycle unit at the Keys Energy Center in Maryland for between $825 million and $875 million. Both units are expected to achieve operational status in 2018. PSEG Power's $1.5 billion investment will expand its gas-fired combined cycle capacity in its core PJM market to approximately 3,800 megawatts as Power's overall gas-fired combined cycle capacity, which includes facilities in Bethlehem, New York grows to represent 4600 megawatts. PJM's capacity performance initiative under RPM provided the correct incentives for investment. PSEG Power cleared approximately 8,700 megawatts at an average price of $215 per megawatt day. Auction prices reflected the increased risk of nonperformance associated with the auction's new rules. Power adjusted its bidding strategy to reflect this new reality with an emphasis on availability and reliability under capacity performance. And we believe Power's fleet is well positioned to perform given its dispatch flexibility, diverse fuel mix, and anticipated improvement in efficiency. The new paradigm underlying PJM's capacity market is one sign of a more constructive regulatory environment for wholesale generating assets. The Federal Energy Regulatory Commission's notice of proposed rule-making on energy price formation issued in September is further recognition that rule changes may be required to appropriately compensate generation for the true cost of operation. Our total planned investment program covering PSE&G and Power for the five-year period ending in 2019 has expanded by 20% since the start of the year and now totals $15.6 billion. Our investments in PSE&G are expected to improve the resilience of the grid as we replace aging equipment and meet customer needs for reliability. Our investment programs are projected to result in annual double-digit growth in PSE&G's rate base for the coming five-year period. Our investment in PSEG Power should enhance our market position with improvements in the fleet's efficiency and reliability. In a word, we are executing well in a dynamic market. Based on the strength of our results, we are updating our guidance for 2015's operating earnings. We've narrowed our range for guidance as we've increased the lower end. For 2015, we are now forecasting operating earnings of $2.85 to $2.95 per share, which is different from our prior $2.80 to $2.95 per share. PSE&G has grown to represent more than half of our operating earnings as Power continues to provide strong free cash flow. We have maintained a disciplined approach to investing as our strong financial position supports growth without the need to issue equity. We intend to utilize our financial strength to meet the high standards for reliability expected by our customers and enhance the returns required by our shareholders. I'll now turn the call over to Dan to review our operating results in greater detail.

Thank you, Ralph, and good morning, everybody. I'll review our quarterly operating earnings as well as the outlook for full-year results by subsidiary company. As Ralph noted, PSEG reported operating earnings for the third quarter of 2015 of $0.80 per share versus $0.70 per share in the third quarter of last year. For the nine months ended September 30th, we reported operating earnings of $2.41 per share versus $2.27 per share last year. We provided you a waterfall chart on Slide 10 that takes you through the net changes in quarter-over-quarter operating earnings by major business and a similar chart on Slide 12 that provides you with the changes in operating earnings by each business on a year-to-date basis. I'll now review each Company in more detail starting with PSE&G. As shown on Slide 14, the reported operating earnings for the third quarter of $0.44 per share compared with $0.39 per share a year ago. PSE&G's earnings in the third quarter reflect the benefit of warmer than normal weather and an increase in revenue associated with PSE&G's expanded capital program. The improvement in revenue more than offset a moderate increase in operating expenses. Returns from PSE&G's expanded investment in transmission added $0.03 per share to earnings in the quarter. Weather conditions, which were much warmer than normal and warmer than a year ago, provided PSE&G's earnings $0.02, improved PSE&G's earnings by $0.02 per share. Earnings comparisons also improved by $0.01 per share due to an increase in electric demand coupled with revenue recovery and infrastructure related investment programs. And consistent with the first half of the year, PSE&G experienced an increase in pension expense resulting in a reduction in the quarter-over-quarter earnings of $0.01 per share. Electric sales grew 7% during the third quarter as residential customers responded to temperatures which produced 38% higher temperature humidity index than levels experienced in the year-ago period and 19% higher than normal. And on a weather-normalized basis, electric sales advanced 8/10 of a percent in the quarter and 4/10 of a percent for the nine months ended September. Growth for the nine-month period is in line with our long-term expectations for weather normalized electric sales growth. As Ralph mentioned, PSE&G reached settlement in principal with the staff of the BPU and the New Jersey Division of Rate Council on the Company's gas system modernization program, or GSMP. The settlement provides for an investment of $905 million over a three year period beginning in 2016 and under the settlement we would invest $650 million in the program at a 975 return on equity with the remaining $255 million investment recovered as part of our next base rate case. And you may recall that we agreed as part of our Energy Strong program to file a base rate case no later than November 1, 2017. PSE&G with the addition of programs of proven pending has increased its investment program for the five year period ending in 2019 to $11.8 billion, and this represents a 10% increase in PSE&G's capital investment plans since the start of the year and should support estimated annual double digit growth in PSE&G's rate base over this time frame. PSE&G has also filed an update of its formula rate for transmission at the Federal Energy Regulatory Commission. The update supports PSE&G's ability to earn its authorized return on an expanded capital base and would increase transmission revenues in 2016 by $146 million. Remember, PSE&G's investment in transmission is expected to grow to about 50% of its rate base by the end of 2019 versus approximately 40% at the end of 2014. We've increased our forecast of PSE&G's operating earnings for 2015 given strong year-to-date results and are now forecasting operating earnings of $785 million to $805 million versus $760 million to $775 million previously. Now turning to Power. Power reported operating earnings for the third quarter of 2015 of $0.33 per share and adjusted EBITDA of $401 million, and that's compared with operating earnings of $0.34 per share and adjusted EBITDA of $386 million for the third quarter of 2014. Power's results for the quarter reflect the impact of strong hedging and increase in operation from the gas fired combined cycle fleet, and an improvement in spark spreads which offset the effect of an expected decline in capacity prices. Higher average prices on energy hedges coupled with reduction in the cost of supply more than offset the impact on earnings of lower wholesale market prices for energy, and these items combine to increase Power's quarter-over-quarter earnings comparisons by $0.07 per share. This improvement in margin in the quarter was partially offset by an expected decline in PJM's capacity revenues which reduce Power's quarter-over-quarter earnings by $0.03 per share. The reduction in capacity revenues reflects the retirement of 1800 megawatts of older inefficient peaking capacity that was no longer compliant with environmental requirements. The average price received on PJM's capacity in the third quarter was in line with the year ago levels at $186 per megawatt day. Increase in O&M expense reduced quarter-over-quarter earnings by $0.03 per share. This increase in operating expenses primarily reflects differences in timing of outages at PSEGs Power's nuclear facilities and is not an indicator of a higher embedded level of expenses. Lastly, the absence of prior year tax benefits reduced quarter-over-quarter earnings by $0.02 per share. As Ralph mentioned, in August PJM completed the RPM capacity auction for the 2018, 2019 year. More than 98% of Power's capacity that cleared the auction met the new capacity performance or CP standards. The price Power will receive for capacity is expected to grow to $215 per megawatt day on average for the capacity year beginning June 1, 2018, from the $168 per megawatt day for the current year. On Slide 28, we have detail on the results of the latest capacity auction, including the number of megawatts that cleared the auction as well as the average price Power expects to receive for its capacity. Power cleared a new efficient combined cycle unit at Sewaren and plans to retire a similar amount of older inefficient steam units at that site. With the results of the latest auction, Power should see growth in its capacity revenues through 2018. The generating fleet's operational flexibility continues to be demonstrated during this period of low energy pricing. Improved performance from the nuclear fleet and increased production in the gas fired combined cycle fleet offset a decline in production at the coal fired stations. Our nuclear fleet operated at an average capacity factor of 95% for the quarter, producing 7.8 TWh of output, representing 53% of total generation. This also represents a 3% increase in output. Performance of the nuclear facilities benefited from the absence of repair work at Salem 2 in 2014 and showed improvement year-over-year in spite of an early start to the refueling outage at Peach Bottom 3. Production from the gas fired combined cycle fleet increased 7% to 5.4 TWh for the quarter, representing 36% of total generation. The fleet operated extremely well running at an average capacity factor of 73% during the quarter in response to market demand. Output also benefited from the completion of capacity enhancement work at the Linden and Bergen stations which added 94 megawatts to the two stations over the past year. Warmer than normal summer weather had a favorable impact on the dispatch of our peaking fleet as dispatch of our coal fired assets was affected by lower wholesale energy prices. Wholesale market energy prices during the quarter continue to reflect a decline in the price of gas based on an overabundance of gas supply in the region, strong production of gas from the Marcellus Basin coupled with insufficient takeaway pipeline capacity has not unexpectedly resulted in lower prices for gas. Power's combined cycle fleet benefited from its access to low cost gas supply in the summer and enjoyed strong spark spreads as power prices held up better than the price of gas. Power fleet is expected to produce energy at the lower end of its forecasted range of output for 2015 of 55 to 57 terawatt hours, reflecting reduced expectations for output from our coal-fired stations. This was slightly less than our prior forecast and would provide a nominal increase in output year-over-year. Approximately 80% to 85% of anticipated production for the fourth quarter is hedged at an average price of $52 per megawatt hour. Moving to 2016, Power has hedged 65% to 70% of its forecasted generation of 55 to 57 terawatt hours at an average price of $51 per megawatt hour. For 2017 Power has hedged 35% to 40% of its forecasted generation of 55 to 57 terawatt hours at an average price of $49 per megawatt hour. The percent of energy hedged in ‘16 and ‘17 is consistent with but at the lower end of the range for Power's prescribed ratable hedging policy. And the forecast for ’16 and ’17 continues to assume that 11 to 12 terawatt hours of annual output are hedged at BGS prices. Forecast range for Power's operating earnings for 2015 has been narrowed to $620 million to $650 million from the $620 million to $680 million prior range. This forecast of operating earnings represents adjusted EBITDA for the full year in the range of $1,545 billion to $1,595 billion. Now, turning to enterprise and other where we reported operating earnings of $11 million or $0.03 per share for the third quarter of 2015 versus operating earnings of $22 million or $0.04 per share in the third quarter of 2014 and the decline in operating earnings reflects the absence of prior year tax benefits at Energy Holdings partially offset by lower expenses and higher interest income at the parent. And the forecast for enterprise and other full-year earnings for 2015 remains $40 million to $50 million. And lastly relating to financing, PCG closed the quarter with $271 million of cash on its balance sheet with debt at the end of the quarter representing 41.5% of consolidated capital. PCG's five-year capital program has increased to $15.6 billion with the announced agreements for PSE&G and Power's plans to develop new capacity. PSE&G's capital program represents 75% of our planned capital expenditures with Power's capital program representing 25%. Given our strong balance sheet and expectations for Power's free cash flow generation, we're able to finance our capital requirements without the need to issue equity. So as mentioned, we are pleased to update our guidance for 2015's operating earnings to $2.85 to $2.95 per share and results in this range would represent the third year of growth in operating earnings. And we're now ready for your questions.

Ladies and gentlemen, we will now begin the question-and-answer session for members of the financial community [Operator Instructions]. Your first question will come from the line of Paul Patterson with Glenrock Associates.

Last quarter you were discussing potentially exploring the retail market and I was wondering if you had any update on that or any thoughts given the third quarter and what have you?

Paul, it's Ralph. We did talk about it and we still are considering different options. Again to the extent that we think about retail, it's only in the context of the effectiveness of our hedges. This is not an offensive play. This is how do we make sure that assets that we own and operate in places like PS zone and in places like Eastern Mac and places like Bethlehem, New York, are effectively hedged when the liquid hub is at PJM west. So it's really just about the effectiveness of hedging and how to make sure that we optimize that. So, one thing we did to make sure we hedge effectively by purchasing the Keys Energy Center. That's not retail. That's a way to get at managing basis differentials and effective hedges. So we are still looking at it, but nothing imminent to announce.

Okay. And then on the re-contracting and low cost of service -- again a good quarter for that. Given where you see things heading into 2016, any thoughts about how that -- how things look with respect to that?

So that was definitely explicitly stated in Dan's point of you view, right. So we don't out guess the market. We have a very clear set of guidelines that we give our trading organization in terms of how much they can hedge in terms of max and mins, all based upon calculations of VaR and gross margin at risk, and we allow them to use their judgment in terms of how market sentiment might be affecting near term prices that may be slightly out of whack with respect to fundamentals, and we allow them to lean a little bit heavier in their hedging as they did last year which benefited us because prices did kind of come up pretty strong after last winter. And as Dan pointed out, right now we're a little bit lighter than we would typically be hedged in 2017, but still within our normal range, not taking a strong point of view that the market has this all wrong, but you can infer from that that we think maybe there's a little bit more bearishness in the market than is normally the case.

Okay. Thanks a lot.

Your next question will come from the line of Travis Miller with Morningstar.

Good morning. Thank you.

Hi, Travis.

Real quick one. I want to clarify. Do you guys expect the BPU to decide on that gas replacement program later this year, is that right?

We're told it's going to be on the November agenda.

November agenda. Okay. Great. And then thinking more broadly here, those plants that you retired, what did you see during the summer in terms of how that capacity and ultimately energy at the peak levels was replaced? Were you guys picking up some of that? Were there other areas where you were seeing that replaced?

Our Kearny peaking units did run during the summer. We did have to run our Hudson unit on gas during the summer, but Sewaren, the units that we replaced, did not run during the summer.

Okay. So you're picking up that mostly with your other facilities, is that?

That's right. We had some expansion in some of our combined cycle units which ran, our LM6000s ran, but the old steam units that sometimes in the past we had to turn on, we did not have to turn on this year.

A little bit of the peaking units were up as well. Coal units is where our volume was down. Our peakers picked up some of that volume.

Okay. More strategically, how do you think now about enterprise and what you can do there when investments might go there, just that segment in general?

Well, we see really two primary operating subsidiaries in power and in utility, Travis. The earnings that you see at enterprise really are borne out of some residual legacy leases on real estate that are very, very small and of course LIPA which is on an exactly as planned trajectory of starting out at $0.03, going to $0.08 by 2017. This year I think it's about $0.03 or $0.04. Next year that will go up to $0.06 or $0.07 and then $0.07 or $0.08 two years after as per the contract. There are no plans to put a lot up at the parent level in terms of new businesses.

Okay. Great. Thank you very much.

Your next question will come from the line of Michael Lapides with Goldman Sachs.

Hey, Ralph. Thank you guys for taking my question. I want to know if we should see what your investment in Power is for the next couple of years as a bit of a strategy shift or a bit of a view in the market? And the reason why I ask that is if I go back over the prior six or seven, six or eight years a lot of what you've done in Power is actually more of the harvest mode. Meaning, once you finish the environmental CapEx on Hudson and Mercer, a lot of what you had done at Power had either been divesting assets or realizing the significant cash flow, the free cash flow, that the remaining assets the large portfolio created. We're now seeing a little bit of a shift and now you're becoming much more of an investor in new assets, whether it's building on existing sites or buying development projects. Is that a do you think the market has changed type of view or is there some other structural view that you're trying to express in utilizing the cash flow that way versus other potential methodologies, either allocating it to the balance sheet or allocating it even more investment at E&G? Just curious.

That's a very good question, Michael. We do get that from a lot of our investors so I thank you for giving us a chance to answer it. It is definitely not a strategy shift. We believe that both businesses are quite viable, quite strong, and need to be tended to in terms of their investment and growth opportunities. I think if you look at a short enough period of time, you could create whatever strategy you want to from a short enough period of time, but if I just take you back over the last five years, PSE&G made up about 80% of the capital program versus Power being 20%, and if I look ahead five years based on what I know today, that 80/20 becomes 75/25 and it's no more than that. So, if you think about Power the last five years, we spent $400 million operating nuclear units. We spent a couple $100 million dollars on peakers. We spent a couple $100 million dollars on advanced gas path upgrades. So, now we're not doing that. Instead, we're going to take an old steam unit that had 550 megawatts of capacity that there was no way it could survive in a CP future and said, okay, instead of just retiring that and leaving nothing there and losing the injection rights, let's build a combined cycle unit because we like the way those numbers look. Instead of upgrading, instead of expanding, we're going to build a natural gas combined cycle unit. As I mentioned before when I was answering Paul's question, there's some changes going on in basis. We want to know how can we manage that better. We saw a great opportunity handling that in the key investment. At the same time we announced $1 billion in new utility investments between gas system maintenance modernization and energy efficiency, and as we pointed out that program at $300 million a year run rate has 30 years to go. We only got three years of approval. So what we have is do very strong businesses, both worthy of investment, both which we look at where we can maximize the benefit for our customers and achieve the return expectations of our shareholders. So really nothing has changed; absolutely understandable why people would ask the question. If you just looked at a three-month window, all the sudden you see, wow, Power's investing $1.6 billion and utility's investing $1 billion. but I don't think you should look at narrow short windows like that.

One other question, you talk about rate-based growth at the utilities, meaning double-digit rate base growth. Do you expect earnings growth to match rate base growth over time?

So it will be close but it can't match it. So the reason for that is quite simple. I am so proud of our utility folks for controlling costs, but even in the best of years you have labor escalation in our union contracts that are like 2.5%. You just look at management wage growth of 2.5%, 3% and then you look at load growth on a weather-normalized basis of 0.4% on the electric side and I think it's 0.8% on the gas side. So you just do the arithmetic and the O&M expense outstrips the growth in load. So that bit of a drag peels away at some of the contemporaneous returns that you go get from the rate-based growth. That's why these things don't match perfectly.

[Operator Instructions] You have a question from the line of Sophie Karp with Citigroup.

Thank you for taking my question. I wanted to ask you about the nuclear economics as we continue to see very low gas environment obviously in the -- if this prevails do you see any meaningful change in the nuclear economics for your assets and does that change your view of their long-term strategy with respect to those assets?

Sophie, it's an excellent question. Each of our units is over 1,000 megawatts. I think if you look at both fixed and variable O&M, I don't know if we've published the operating cost of them, but it is $37 a megawatt hour, both fixed and variable. If you look at nuclear fuel costs it's far, far, far less than that. So given our capacity prices, given our variable O&M costs, our units are absolutely fine. They'd be a lot finer if gas was at $8 and $10 an MMBtu. But as you well know, some of the challenges other units have had is, number one, their size in terms of their ability to spread their fixed cost and, number two, some of the distortions that are created by the production tax credit in particular from wind farms. That's not to minimize the competitive pressures associated with natural gas, but what we're seeing is margin compression and we're nowhere near a point operating at anything but positive margins for those units. I think there will be a period, I don't know how long that will be, of competitive pressure on them, but eventually there's going to be a price on carbon. I don't know if that's going to be under CPP or some other paradigm, and these units will be able to ride through these a little bit more difficult times without any problem and then really benefit from that carbon regimen in the future.

My other question was about transmission investments. Are you looking into any incremental transmission investment opportunities right now maybe through FERC order 1000 or any other transmission investments that are not currently in your plan or have not been contemplated previously?

So I mean the FERC 1000 process has been around for a while and I guess I would say has been gaining traction for a while. We've been through the most recent and first opportunity here within PJM and with Artificial Island. So, yes, we are definitely involved in them. I think a lot of the areas in the country are still formulating the best way to move into this new regimen, so I would say that the prognosis for large investments in the very near term in that regard are probably less, but I think over time it is still an area where we think we have the skills and expertise that we can bring to it and we think we can be very successful in that arena.

And Sophie, it's important to realize that the $12 billion in the utilities prospective five-year capital program of which I think 60% or 70% is transmission. None of that is subject to FERC order 1000 competition. It's all stuff that doesn't meet the criteria for FERC 1000. The exception as Dan just implied is the $120 million of Artificial Island project that we won that's included in that number.

Your next question will come from the line of Gregg Orrill with Barclays.

Ralph, you've talked about having an excess balance sheet capacity of $2 billion to $3 billion against your FFO to debt targets.

Right.

And where does stock buyback stand in the way you're thinking of using that money? Has anything changed about your thinking?

Sure, thanks, Gregg, for the question. So nothing has changed really. We have this sort of three tiered prioritization on how to use the balance sheet. Number one is reinvesting in the business and we've been public about the fact that we will bid Bridgeport Harbor combined cycle unit in the upcoming forward capacity market in New England in February. I just mentioned a minute ago that the gas system needs $300 million per year and we have a three year program. If you subtract three from five that means there's two years that are unfunded in the plan right now. You may recall, Gregg, that we when we originally filed for Energy Strong goodness gracious two and half years ago we asked for $3.6 million as the first part of a five year program and we got $1.2 million approved and it was only put into a three year program, so that's halfway done already. And if you take 1.5 from 5, that means three and a half years of the five year program is unfunded, so there's $1 billion plus in investment opportunity there. So just looking at those three, Bridgeport Harbor, gas, and Energy Strong, you're looking at anywhere from $2.5 billion to $3 billion of investment opportunity that we've publicly discussed. Second thing is, look, let's face it, we know the utility's a steady grower but we know Power's in a commodity cyclical business and we know how important dividends are to our investors and we've been promising consistent growth in our dividend, so we'd like to make sure that balance sheet has a little bit of an ability to absorb some of the ebbs and flows of the commodity markets, so that's a second priority for us. And then, third but not one that we would never do but something that we talk about all the time, if our cost of capital is a little out of whack because the balance sheet is a little too robust and the investment opportunities are kind of far off, then let's think about share repurchase as a way to get that cost of capital back in line. So that really hasn't changed at all in terms of the three tier prioritization but perhaps a little more color on the details.

Mr. Izzo, Mr. Creeg, there are no further questions at this time. Please continue with your presentation or closing remarks.

Thank you very much. So, look, I hope your take away is the same as the message we were trying to deliver which is the Company is in great shape. Our fleet of plants, our nuclear units, our combined cycle units are running well. The utility is hitting all of its growth targets as it executes its capital program and the balance sheet remains very healthy. So, we hope that you all come out to meet Dan if you haven't met him just yet. He stepped right in and fabulous job for us, and we'll see you in Florida in two weeks. Thanks, everyone. Have a good day.

Ladies and gentlemen, that does conclude your conference call for today. You may now disconnect and thank you for participating.