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spk01: Good morning and welcome to the Southwest Gas Holdings first quarter earning conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Tom Moran, General Counsel, Southwest Gas Holdings. Please go ahead.
spk09: Thank you, Vaishnavi. Hello, everyone, and welcome to the Southwest Gas Holdings first quarter 2023 earnings call. Throughout the call, we will be referencing presentation slides, which we have posted on our investor relations website. I'm joined on today's call by Karen Haller, President and CEO of Southwest Gas Holdings. Rob Stefani, Senior Vice President and Chief Financial Officer. Justin Brown, President of Southwest Gas Corporation. Paul Daly, President and CEO of Century Group. And Chad Van Sweden, the CFO of Century Group. Please note that on today's call, the company will address certain factors that may impact this year's earnings and provide some longer-term guidance. Some of the information that will be discussed today contains forward-looking statements. These statements are based on management's assumptions, which may or may not come true, and you should refer to the language on slides two and three of this presentation and in the press release, as well as our SEC filings for a description of the factors that may cause actual results to differ from our forward-looking statements. All forward-looking statements are made as of today and we assume no obligation to update any such statement.
spk02: I'll now turn the call over to Karen. Thanks, Tom. I'm pleased you're joining us today to discuss the Southwest Gas Holding's first quarter results. Turning to slide five, we are making significant process on our transformational strategy of returning Southwest Gas to its core foundation as a premier fully regulated natural gas utility. We are enhancing efficiency and productivity across our operations and pursuing constructive break-case outcomes of the utility, while also preparing Sentry for its future as a strong, stand-alone infrastructure services leader. Customer growth and demand remain strong, and we continue to benefit from population growth across our As a result, we believe Southwest Gas is uniquely positioned for continued growth and success as we safely address the needs of our customers, invest in the communities we serve, and deliver value for our shareholders. We are strategically deploying capital, investing in our operations so that we can meet the demand for safe, reliable, and affordable energy solutions. while working constructively with our regulators and legislators to complement our strong organic rate-based growth. We are confident in our momentum and remain on track to deliver 5 to 7 percent CAGR in rate-based growth over the next three years, while also maintaining a strong investment-grade balance sheet and delivering a competitive dividend to our stockholders. As you can see on slide six, We are making excellent progress on our 2023 strategic priorities. We completed several key strategic milestones during the first quarter, including the $1.5 billion sale of Mountain West and the RAS-RES process earlier this year to confirm our financing plan for 2023. Under the financing plan, during the first quarter, we issued $247 million of equity at Southwest Holdings, and $300 million of debt at Southwest Gas. In mid-April, we issued a $550 million term loan at Southwest Holdings. We continue to see limited near-term equity needs for 2024 and 2025 and anticipate equity needs of less than $100 million in total through the end of 2025. We remain on track with the century spend. We submitted an IRS private letter ruling requesting requests during the first quarter, and filed notice of intent with the ACC in April. Our team is now focused on the SEC Form 10 submission. As previously stated, we expect to complete the spend of centuries during the fourth quarter of 2023 or the first quarter of 2024. At the utility, we are focused on the utility optimization review and will begin prioritizing initiatives later this year, as I will cover in more detail. Of note on the regulatory side, in the quarter, we finalized our Arizona general rate case, which led to the ACC's approval and authorization of the largest revenue increase in Southwest gas industry, $54 million, with rates effective February 1, 2023. We also filed a proposed change to the Arizona PGA recovery mechanism in late February, And lastly, we expect to file our Nevada rate case in the third quarter of this year. We are pleased with our continued progress and our strategic plan is on track. On slide seven, we walked through our strong first quarter performance at Southwest and Century. We are proud to announce that at the utility, we delivered the highest quarterly net income on records. we experienced another quarter of strong customer growth, adding 42,000 new meter sets over the last 12 months, while continuing to make investments to ensure our system remains safe and reliable for the benefit of our customers. At Century, we announced record-setting first quarter revenue and EBITDA. This strong first quarter performance reduced Century's last 12 months net debt to EBITDA the prior quarter. Sentry also grew its offshore wind portfolio and showcased continued growth of its strong base of gas and electric utility customers. As Paul will discuss, Sentry continues to win new business based on the strength of its relationships and capabilities and is well positioned to play a critical role in the continuing energy transition. As shown on slide 8, We've been actively advancing a multi-step evaluation process to optimize the performance of the utility through a comprehensive review and identification of potential optimization opportunities. We recently hired consultants, including a top business and management firm, to complement the work we have been doing internally to assist us in our deep dive review into the current cost structure of the utility. This review is about ensuring the investments we are making are efficient, targeted, and positively contributing to building a solid foundation for future success. We anticipate this identification process will continue through the second quarter, and then we will refine and develop prioritized action plans by identifying cost savings and efficiency opportunities to execute on over the next couple of years This process will help support the tremendous growth we have across our service territory, pass on savings to our customers, improve ROEs, and result in positive returns for our stockholders. We also believe these efforts will complement our commitment to delivering excellent customer service and operational efficiency. As I mentioned previously, we added 42,000 new utility customers during the past 12 months and expect to continue to benefit from strong demographic and economic growth in the Southwest. Between 2023 and 2028, population growth is projected to be 3.76% in Arizona and 3.9% in Nevada. New customer growth combined with our pipeline replacement activities associated with our safety and integrity management programs are the cornerstones of our $2 billion three-year capital expenditure program. We are committed to working collaboratively with our regulators to ensure these investments get moved into rate-based in a timely manner, either through rate cases or tracker programs. These commitments and efforts have delivered approximately 10% authorized rate-based CAGR over the past five years, and we expect to continue to grow our rate base at a compound annual growth rate of 5% to 7% over the next three years. I will now turn the call over to Rob, who will review our financial performance for the quarter.
spk06: Thanks, Karen. On slide 11, we outline our earnings per share performance for the first quarter. The company's consolidated gap and adjusted EPS are shown by each operating company. As Karen mentioned earlier, the utility and Century each had a record-setting first quarter. The utility recorded its highest quarterly net income on record. Century recorded its highest ever first quarter revenue in EBITDA. On an adjusted basis, we finished the first quarter of 2023 with EPS of $1.69 per share versus an adjusted EPS of $1.74 per share from the year prior, which included a full three months of Mountain West. The company concluded the sale of Mountain West in February 2023. Excluding Mountain West from each quarter, The first quarter adjusted EPS increased approximately 11% from the prior year first quarter. In the appendix, we provide a reconciliation of adjustments by operating company. The vast majority of the first quarter adjustments relate to the sale of Mountain West, about $73 million pre-tax, including expenses associated with the disintegration with a small incremental amount related to the century spin and incremental Mountain West costs prior to the sale. Now I'd like to provide a walk through the performance of each operating company. Moving on to slide 12, you will see the year-over-year performance drivers for our utility, Southwest Gas Corporation. In the first quarter of 2023, utility gross margin increased by 34 million compared to last year. This improvement was primarily driven by the combination of customer growth and rate relief. New rates went into effect for the full quarter in Nevada in 2023, and since February 1, 2023, in Arizona, including approved regulatory trackers. Also included is revenue from the Arizona Vintage Steel Pipe and Customer-Owned Yardline programs and other increases we described in our Form 10-Q filed earlier this morning. O&M increased $12 million between quarters, approximately $4 million of which was due to increased cost of fuel used in our Great Basin operations. which is recorded in O&M, but which is offset in margin, so is net neutral to earnings. Other drivers contributing to the cost increases include outside services, combined leak survey, and line locating, as well as insurance-related claims. Other income increased $17 million compared to last year. This was driven by increased interest income related to carrying costs associated with regulatory account balances, largely related to the purchase gas cost recovery mechanism. and favorable quarter-over-quarter changes in non-service-related components of employee post-retirement benefits, as well as improvement in investment returns underlying the company-owned life insurance policy values. Interest expense increased by $12 million from the prior year, primarily due to interest associated with senior notes issued in 2022 and 2023, as well as the $450 million term loan issued in January of this year to support gas purchases. Depreciation and amortization increased marginally, including offsetting reduction and amortization related to certain regulatory account balances. Moving on to Century's results this past quarter, slide 13 reviews the drivers behind Century's record first quarter adjusted EBITDA results. Century's first quarter revenues increased by $129 million compared to the prior year. This increase was driven by offshore wind projects at Riggs-Dissler, emergency response, and a large gas project delivering natural gas to a battery factory in the Midwest. Century's revenues were partially offset by corresponding increases in operating expenses driven by higher volume of infrastructure services provided and increased subcontractor costs on offshore wind projects. Additionally, Century saw increased interest expense because of higher SOFR interest rates on outstanding variable rate borrowings quarter over quarter. Century is well-positioned to continue serving its long-term customers while leveraging our geographic reach and expertise to serve new customers and markets. We are very excited about the opportunities we see in 2023 and beyond for Century. Century has strong momentum heading into the rest of the year. On slide 14, we outline our recently completed 2023 financing plan for Southwest Gas Holdings and Southwest Gas Corporations. As Karen noted, we do not anticipate meaningful equity needs in 2024 through 2025. In total, for the 2024 through 2025 period, we currently expect less than $100 million in equity issuance at Southwest Gas Holdings. This happens as the PGA is expected to unwind, generating significant cash flows, as Justin will discuss later in the call. At Holdings, we plan to target an FFO debt ratio of approximately 14% by 2025 and and our recently executed financing plan puts us on a path toward that. Now I'll turn it over to Justin Brown, president of the utility, to review Southwest Gas Corporation's operational highlights.
spk04: Thank you, Rob. Starting on slide 16, we provide an overview of our most recent Arizona rate case with new rates that became effective February 1. In addition to being the single largest increase we've ever experienced in a rate case, there are several other key aspects of the case that are important to highlight. First, reaching agreement prior to hearing to use a target equity layer of 50% and an improved authorized ROE of 9.3%. Second, authorization to use a post-test year plant adjustment consisting of 12 months, a finding that all our gas purchases were prudently incurred, and lastly, the continuation of key regulatory mechanisms like our full revenue decoupling, our customer-owned yard line program, our property tax tracker, and our income tax tracker. We believe that each of these items and this outcome helps demonstrate our collaborative approach and constructive relationships with the ACC, ACC staff, and other stakeholders. We're also actively preparing for and evaluating other future rate case filings across our various jurisdictions. We remain on schedule to file a Nevada rate case later this year, and we're continuing to target a third quarter filing. We are currently evaluating our needs in Arizona and determining the appropriate time for filing our next Arizona rate case. Given our existing five-year rate case schedule in California, we plan to file our next rate case in the third quarter of 2024. And lastly, we're also evaluating the timing of our next Great Basin rate case. And due to a prior settlement commitment, we know that that filing will occur prior to June of 2025. Turning to slide 17. We highlight other recent regulatory filings that are currently pending before our commissions, as well as some other recent constructive outcomes. First, in Arizona, we have three filings currently pending, a request to modify our existing PGA mechanism, our annual COIL surcharge filing requesting $4.3 million in surcharge revenue, and our recently filed notice of reorganization to separate Century from Southwest Holdings. We expect each of these to be resolved this calendar year, and since the ACC staff have already issued their report supporting the COIL filing, we expect that matter to appear on an ACC open meeting agenda in the near future. In Nevada, we recently received approval of an all-party settlement for our annual rate adjustment filing. As part of this proceeding, the parties in the commission also review our gas purchases during the test period and found them to be reasonable and prudent. As we mentioned on the last call, we also have two filings pending in California. If the filings are approved, we believe both projects will be instrumental in clean energy technology development and demonstrating the role natural gas plays in a sustainable energy future by providing energy reliability, resiliency, and security to customers while also lowering GHG emissions and helping support on-site combined heat and power and solar generation developments. Great Basin has also made a couple recent filings with the FERC for various replacement and expansion work to meet the needs of our Great Basin customers and the increasing demand for natural gas across northern Nevada and northern California. The FERC already issued a certificate of public convenience and necessity for our proposed mainline replacement project, and we anticipate construction to start later this summer. Completion of this project will coincide with the timing of our next rate case to minimize any regulatory lag associated with the project. We just filed a request for the proposed expansion project, but upon FERC approval, new rates will become effective immediately upon completion of the project since it is a fully contracted expansion. We currently anticipate approval and completion of that project prior to the end of next year. Turning to slide 18. Earlier this year, Governor Lombardo issued an executive order in Nevada highlighting his energy priorities and policy objectives for the next decade. The executive order articulates support for an all-of-the-above approach to energy, placing an emphasis on affordability and reliability, as well as the important role energy plays in economic development, as well as his commitment to ensure safe, reliable, and affordable energy remains available to all Nevadans. including ensuring that Nevada homes and businesses have access to natural gas for use in their homes and businesses. Consistent with this executive order, we've been working with various stakeholders, including the Public Utilities Commission of Nevada, on legislation that would establish a robust and thoughtful approach to natural gas planning. The proposed legislation will require gas utilities to make filings every three years identifying customer demands resource plans for meeting those demands, including creating pathways for pursuing clean fuel technologies like hydrogen and renewable natural gas, as well as expanded opportunities for energy efficiency programs for our customers. The legislation will also ensure alignment among all stakeholders by providing gas utilities the opportunity to seek pre-approval of these investments before investments are actually made. The legislation was voted out of committee unanimously and is currently working its way through the legislative process. Turning to slide 19, this past winter we experienced colder than forecasted weather, interstate pipeline outages, and lower storage inventories in the western half of the United States that constrained supplies resulting in higher gas costs. The colder than normal weather necessitated a greater quantity of purchased gas to meet customer demand across our service territory, resulting in a significant increase in our PGA balances during the quarter. Slide 19 provides an update of our PGA balances at the end of the quarter and an overview of each of the gas or cost recovery mechanisms. We continue to maintain constructive gas cost recovery mechanisms in each of our jurisdictions that allow us to timely recover these costs with monthly or quarterly rate changes. As shown on the graph, We anticipate significant recoveries over the next couple years as we recover these gas costs and start to see our PGA balances come down. This will also provide enhanced cash flows to help cover financing needs over the next couple years. I'll now turn the call over to Paul Daly, President and CEO of Century Group.
spk07: Thanks, Justin. Turning to slide 20, we are excited about our continued progress towards our future as a standalone strategic utility infrastructure services leader. We continue to benefit from strong tailwinds across utility and markets that support Sentry's long-term growth. And we expect this growth will accelerate as we deliver on opportunities in the electric T&D hardening and expansion, 5G data comm build-out, offshore wind, and other renewable and energy transition programs. Importantly, as we work towards our pending spin, we have the resources, capabilities, and business structure to continue to deliver on our growth opportunities. On slide 21, I will dive deeper into our customer and project expansion efforts. Our customer relationships are built on a strong foundation of partnerships and collaboration, and we are trusted to support their long-term capital spending programs. We are also building new relationships and expanding our work across North America. During the quarter, we signed and began work on a $125 million gas pipeline construction contract in Indiana to an electric vehicle battery plant. We expect to continue to benefit from the strong sector tailwinds across our gas and electric G&D markets, as well as significant multi-year opportunities in 5G and offshore wind-related infrastructure. We are making particularly strong progress in expanding our clean energy projects. Today, we have secured wind contracts worth more than $525 million for the supply and fabrication of wind towers, secondary steel assemblies capable of generating 2.9 gigawatts of clean energy. We recorded $47.5 million in revenue during the first quarter for our sustainable wind energy projects. and we're projecting to deliver approximately $250 million of wind energy revenues for the full year. To date, our startup productivity, fabricating the first 5% of the tower assemblies, is close to achieving budgeted full production performance metrics. With our scale and expertise, our operating companies were called upon for support following a number of tornadoes and other storms that left countless communities in the southeast and northeast without power during the first quarter. Our approach to serving those in need is differentiated through a consolidated offering, which is delivered through multiple operating companies. During the quarter, we deployed nearly 1,200 employees across 22 states for this restoration work. Slide 22 highlights Century's strong financial performance over the past year. While we continue to face some of the headwinds that we experienced in 2022, our performance has continued to improve, and we delivered an increase of $49 million of EBITDA year over year. Additionally, revenue growth remained strong. As both Karen and Rob mentioned earlier, we delivered both record revenue, first quarter revenues, and EBITDA. Of note, the strong growth trajectory can be seen in our legacy century business, as well as the more recently added Riggs-Dissler operations. And as you can see in the charts on the right, our portfolio has become much more balanced, most notably in the gross profit area. At the same time, we remain diversified geographically with no one geography representing more than 11% of revenues. We look forward to sharing our progress in the coming year as we work towards completing CenturySpin. With that, I'll turn it back to Karen.
spk02: Thanks, Paul. On slide 24, we cover our outlook and guidance for the remainder of the year. We are reaffirming company guidance at both utility and century. We are confident that each business' strong first quarter performance will help drive full year results in line with the guidance we initiated last quarter. As you know, Century's business is seasonal, with most of the activity occurring in the second and third quarters. On slide 25, we would like to reiterate that Southwest Gas Holdings remains committed to paying a competitive dividend to our stockholders. We are holding the dividend flat in 2023 and will revisit our pro forma dividend policy closer to the execution of the Century spend in the fourth quarter of 2023 or first quarter of 2024. Looking ahead, we expect to maintain a payout ratio competitive with utility peers and expect to consider the run rate level of earnings of the fully regulated business considering expected rate case outcomes in California, Arizona, and Nevada. Before we open the call-up to Q&A, I want to emphasize that our teams are focused on executing our 2023 strategic priorities, delivering strong financial results and providing exceptional service to our customers. At Southwest Gas Holdings, we are confident in our path forward as a premier pure-play natural gas utility. We will continue delivering steady, organic rate-based growth through strong regional demand dynamics, as well as earnings growth through financial discipline, operational excellence, and constructive regulatory relationships. We're advancing toward the planned tax-free spin of Centrix, putting the company in a better position to align the stockholders and deliver the business organically with healthy cash flow generation. With that, I'd like to open the call for questions.
spk01: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, Please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Chris Ellinghaus with Cyborg Williamshank. Please go ahead.
spk05: Hey, everybody. Hey, Chris. On century growth, the 9% to 11% EBITDA, does that suggest that you anticipate more offshore wind contracts that will help to fill in the gap for your contract at EBITDA over the next couple of years?
spk08: It does not assume any additional contracts from what we have currently contracted for, which is about $525 million. We do anticipate that there will be additional offshore wind revenues, but it's not dependent on there being additional offshore wind revenues.
spk05: So are you anticipating any sort of ongoing maintenance value in the offshore business?
spk08: We are not. We're not expecting to have MSA contracts like we do for our gas and electric utility services on the offshore wind side.
spk05: Also, given the sort of population growth that you talked about, which is really quite quite strong. Is there, you know, anticipated upside to the three-year rate-based CAGR for the gas utility?
spk04: Hey, Chris. It's Justin. At this point in time, you know, we're continuing to monitor. You know, we saw a little bit of a downturn last fall, right? But then we've noticed this first quarter things continue to go pretty well. And so I think it's something we're monitoring closely, but at this time we're still kind of in line with what our expectations are on CapEx growth for the guidance we've given.
spk05: Okay. Justin, can you also sort of address, you know, what you're seeing in migration and your housing markets given, you know, what's up with the economy and interest rates of late?
spk04: Yeah, I mean, I think I actually saw something recently where like Penske had, you know, some survey where they do on trucks moving and it's like Arizona and Nevada are in the top four and they have been the last two years. So I think to your point, I think our service territory continues to remain in a very attractive part of the country where people are relocating to. And I think that's why, you know, when we look over the last couple of years and the fact that we added, 42,000 first-time meter sets over the last 12 months. It's just something we continue to see growth and we're excited about.
spk05: Okay, great. One last thing, you know, the PGA balances, where do you see the PGA ending up at the end of 24? So what is sort of that drawdown from the 900 and plus million that you expect?
spk04: Yeah, so I think a lot of it's heavily dependent on gas prices, right? Because as you draw down, you backfill with gas prices. But I think if you look at that chart, I think that kind of gives you a ballpark idea of kind of what we expect to come in, assuming, you know, kind of a stabilized level of gas prices.
spk05: Okay, great. Thanks a bunch. Appreciate it, Skylar. You bet.
spk01: Again, as a reminder, if you have a question, please press star then 1 to be joined into the queue. Our next question comes from Julian Dumoulin-Smith with Bank of America. Please go ahead.
spk03: Hey, good morning team. Thank you all very much for the commentary. Good morning. Karen, if I can just to jump in, I heard your commentary about pursuing a deep dive into the current cost structure. Obviously, expecting to effectuate a spin hopefully later this year, if not early next. What's the timeline for kind of a fully revamped view inclusive of some of these latest cost efforts on the utility side and or across both, right? I mean, when do you think you'll come back with kind of an updated view on your overall earnings profile, if you will? Is that something prior to the spin?
spk02: Yeah, well, we're currently working with our consultants and looking at all of the deep dive right now. So we're continuing to go through that process and we'll do so through the second quarter. I believe by the third quarter, we should be able to start looking at identifying what some of those initiatives are going to be and then looking at prioritizing those in the third and fourth quarter as we move forward to execute all of those. So it's a process that, you know, we're in process. I believe that for the spend, depending upon the time of the spend, you may be able to execute or start executing on some of those optimization initiatives. But a lot of that will depend upon, that answer depends upon the timing of the spend, which we've identified as the fourth quarter or first quarter of next year.
spk03: Got it. So it sounds like it aligns fairly well. And then just on the credit side, I heard the commentary today and Nicely done on the latest efforts here, but can you elaborate a little bit more about the target leverage metrics at the spin co? Just to kind of think through what that looks like in tandem with your expectations on achieving the 14% at, call it parent co by 25. Just, I want to make sure I understand where the debt allocation is traveling and just what your expectations are on what that might cost, et cetera, on the spin co.
spk06: Hey, Julian. It's Rob. Thanks for the question. I think as was exhibited in the first quarter of the century, it's able to organically de-lever, and they de-levered about a half a turn from the prior quarter. We'll look for them to continue that progress throughout the year. You know, we went through the RAS-RES process, and as indicated in the year-end call, we targeted approximately a $300 billion deleveraging effort at Century. We'll continue to evaluate the amount, but we expect that that would put them, you know, kind of in line with the current comp universe, who has also done acquisitions recently. You know, the Century Group continues to, you know, integrate the RIGS acquisition. And I think as you're seeing from this quarter's financial results, you know, we're starting to get an uptick in EBITDA, you know, from that acquisition. So net-net, you know, I think if you look at the comps, you know, use the guidance that we provided with respect to that $300 million pushdown, you know, that's effectively what we're targeting. Got it.
spk03: Okay, fair enough.
spk06: The form of that may not, the form of that, it's probably important to highlight, the form of that may not be a push down. It could be, you know, if the IPO markets were to reopen, that that could provide a structure to provide the deleveraging as well as a sponsored spin transaction. You know, or as stated, we could push it down and also look to do a retained stake or just do a straight spin with the debt raise up top at holdings.
spk03: Right, yep, indeed. Thank you. And by the way, what was that peer metric that you were talking about on, like, I suppose debt to EBITDA? Sorry to clarify that. Just what are you seeing amongst peers?
spk06: Yeah, I mean, I think if you take a look at the comps and you also need to fast forward, right, like, you know, bake in the EBITDA kind of growth that Chad had highlighted earlier in the Q&A, right? But, you know, in that kind of three to three and a half times range seems to be where the comps are sitting today.
spk03: Yeah, that makes sense.
spk06: Some are obviously lower, but I think if you look at the comps that have done acquisitions, it's in that range.
spk03: Yeah, indeed. And sorry to clarify this earlier, the commenter and century, how lumpy is the win supposed to be? I mean, obviously, nice success this year at about a quarter billion. But in future periods, obviously, this offshore stuff is fairly lumpy. I want to make sure I heard your commentary right there.
spk08: Yeah. The wind business is more project driven than our traditional utility services work. So it will be a bit lumpier. We have $525 million under contract currently. We expect to do about $250 million in offshore wind revenue this year. We have a nice pipeline of opportunities that are building as that market in the U.S. further develops. We currently have visibility on about $2.5 billion of future projects with similar scope of services to what We're currently performing at about $2.6 billion of related future work to connect the offshore wind projects to the existing electric power grid. So there will certainly be competition for those future opportunities, but we're pleased with the competitive position that Riggs-Dissler has established with a first mover advantage for participation in a significant number of the initial projects currently under development.
spk06: Julian, this is Rob. Just to build on what Chad just said, the growth in that business has been significant. I think the Century Group's signing contracts almost every month on these wind projects. While it may be lumpy, it's obviously extremely positive for the rig's business. It demonstrates their ability to execute. It's a business that You know, we're not doing, it's important to clarify, we're not doing the work out in the water. You know, we're pouring foundations and doing that work onshore.
spk07: Hey, Julian, this is Paul. One thing to note, although we don't have an MSA like our traditional T&D MSAs, we do have a framework agreement with our client that is long-term. In fact, there's no end date to it. That is, as they get additional contracts or additional work we'll get additional work too.
spk03: Excellent. Glad to hear it. Thank you guys for clarifying that. I really appreciate all the details. And take care. Good luck. We'll speak soon.
spk08: Thanks, Julie.
spk01: As we have no further questions, this concludes the question and answer session. I would like to turn the conference back over to Tom Moran for any closing remarks.
spk09: Thank you, Prof. Navi. Thank you all for joining us today. This concludes our conference call. Thank you for your interest in Southwest Gas Holdings and have a good day.
spk01: This concludes today's Southwest Gas Holdings first quarter 2023 earnings call and webcast. You may disconnect your line at this time. Have a wonderful day.
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