MPLX Lp (MPLX) Q1 2018 Earnings Report, Transcript and Summary

Good morning and thank you all for holding. Welcome to the MPLX First Quarter Earnings Call. My name is Elan and I will be your operator for today’s call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] Please note this conference is now being recorded. I would now like to turn the call over to Kristina Kazarian. Kristina you may begin.

Good morning and welcome to the MPLX first quarter 2018 earnings webcast and conference call. The synchronized slides that accompany this call can be found on mplx.com under the Investor tab. On the call today we have Gary Heminger, Chairman and CEO; Mike Hennigan, President; Pam Beall, CFO, and other members of the management team. We invite you to read the Safe Harbor statements and no-GAAP disclaimer on Slide 2. It is a reminder that we will be making forward-looking statements during the call and during the question-and-answer session that follows. Actual results may differ materially from what we expect today. Factors that could cause actual results to differ are included there, as well as in our filings with the SEC. Now, I will turn the call over to Gary Heminger for opening remarks on Slide 3.

Thanks Kristina, good morning and thank everyone for joining our call. Before I begin, we are delighted to welcome Kazarian who recently joined our team as Vice President of Investor Relations for MPC and MPLX. Kristina comes through the role with experience at two Wall Street’s premier financial institutions where she led equity research teams covering petroleum refiners, midstream companies and master limited partnerships. She brings a deep understanding of our business and a competitive landscape and will be a tremendous asset as we execute on a corporate strategy. You are likely aware that earlier this morning MPC announces plans to acquire all the outstanding shares of Andeavor to create a leading energy company in the U.S. We’re enthusiastic about MPLX's role in this new leading energy company that is well positioned for long-term growth and value creation for all the stakeholders and we believe this combination and expansion of MPC’s footprint will provide additional strategic and organic growth opportunities for MPLX. Also, at the closing of the transaction, MPC will own the general partner of MPLX and Andeavor Logistics as well as the majority of the limited partner units of both partnerships. We know that a very logical question is, what will the general partner do with the two MLPs post-closing? We’re not commenting on any potential structural considerations for MPLX and Andeavor Logistics today, both will operate as separate MLPs and MPC will evaluate structural considerations at the appropriate time following the close of the Andeavor transaction. As a result, we will not be addressing these questions during the question-and-answer session. Moving to the first quarter results. I am pleased to report that MPLX delivered another strong quarter continuing our track record of sequential earnings growth driven by strong contributions from our underlying base business as well as the February dropdown. We’re executing on our robust organic growth plan and commenced operations of three processing plants in the quarter with five more planned this year as well as three fractionation plants. This growth when combined with our existing business and a strong balance sheet positions MPLX as one of the most compelling investments in the midstream space. With that, let me turn the call over to Mike to review our quarterly financial and operational highlights on Slide 4. Mike?

Thanks, Gary. As Gary mentioned we’re pleased to report record quarterly financial results with adjusted EBITDA of $716 million and distributable cash flow $619 million. We announced our 21st consecutive increase in our quarterly distribution to 61 in three quarter cents per common unit a 14% increase over the distribution of first quarter last year. We also affirmed our distribution growth guidance of 10% for 2018 and our intent to continue to execute a self-funding model with no expected new units to be issued this year to fund our organic capital investments. The partnership ended the quarter with leverage of 3.8 times well below levels for an investment grade credit profile and strong distribution coverage of 1.29 times. Slide five provides an overview of our logistics and storage segment. Before I cover the quarterly highlights, there continues to be a lot of discussion in the market regarding policy revision no longer allowing MLPs to recover an income tax allowance and cost to service rate filings. I just want to reiterate what we disclosed in our press release issued on March 16, we expect these revisions to have a minimums impact on the partnerships earnings and cash flows. Turning back to our LNS quarterly highlights, we completed the dropdown of our refining logistics assets and fuels distribution services, commissioned the Robinson butane cavern and added two boats and 13 barges to our marine fleet. Further expansion to our fleet are expected later this year. The partnership also completed the first phase of our expansion of the Ozark and Wood River-to-Patoka pipeline systems which delivered cushion crude to Wood River-to-Patoka, this expansion capacity is ramping up as boosters and connections are completed at cushion. The full expansion to 360,000 barrels per day is expected to be available by mid-2018. We’re pleased to bring these projects online which provide additional high-quality fee-based earnings to the partnership as well as logistics solutions and crude optionality to MPC and other market participants. Moving to our gathering and processing segment, Slide 6 provides an overview of our operations in the Marcellus and Utica Shale during the quarter. Gathered volumes increased 46% over the same quarter last year to an average of 2.7 billion cubic feet per day setting a new record for the partnership. Process volumes average approximately 5.1 billion cubic feet per day in the quarter representing a 10% increase over the same quarter last year. While volumes were up versus the first quarter of 2017, there were a couple of factors that resulted in lower processing volume versus the fourth quarter of last year. First, much of this decline was planned as producers temporarily shut in wells that were producing in the fourth quarter in order to safely frac and complete new wells in the vicinity of the existing wells. This frac is common the industry, where you take one step back in order to gain two steps forward in terms of volume levels. We also had a planned shutdown at our Houston complex to complete maintenance and turnaround work in advance of placing our new 200 million cubic feet per day plan in service. In addition to the two planned reductions, we’re also experienced unexpectedly harsh winter conditions in the Northeast that impacted producer volumes and some of our facilities. With these activities behind us, we expect new wells to come online in the second quarter leading to higher volumes in the quarter and continuing the growth trends throughout the year. We have a positive outlook for buying growth in the Northeast. To support this growth, we expect to add 800 million cubic feet per day of incremental capacity during the second half of the year through plant additions at our Sherwood, Majorsville, and Harman Creek complexes. Slide 7 provides a summary of our fractionated volumes in the Marcellus and Utica regions. We produced a record 395,000 barrels a day of ethane and heavier NGLs in the quarter, up 18% over the same quarter last year. During the second half of the year we expect to add 20,000 barrels per day ethane fractionation capacity at both Sherwood and Harmon Creek and 60,000 barrels per day, propane plus fractionation capacity at our Hopedale Complex. These capacity additions will further strengthen our position as the largest fractionator in the Northeast. Moving to our Southwest operations on Slide 8 gathered volumes averaged nearly 1.5 billion cubic feet per day for the first quarter representing a 10% increase over the same quarter last year. Process volumes averaged over 1.3 billion cubic feet per day for the quarter, a 5% increase over first-quarter 2017. We are pleased to report continued progress on our Permian growth strategy, we commenced operations of the 200 million cubic feet per day Argo plant, doubling our processing capacity in the highly prolific Delaware Basin. Construction of the Omega plant in the STACK shale play of Oklahoma continues and is expected to be operational by mid-2018. These midstream assets and joint venture interests expand our footprint in Southwest and provide a partnership growth and diversification of cash flows. Before I turn the call over to Pam I want to take a moment to summarize why we continue to believe MPLX is one of the most attractive investments in the midstream space. First in the logistics and storage segment over the past year, we have acquired from MPC midstream assets and services that are projected to generate $1.4 billion of annual EBITDA for the partnership. These are fee-based earnings streams with almost no commodity sensitivity to them. We have a strong focus on continuing to be a superior midstream service provider at MPC and at the same time, we see an opportunity to attract more third parties to our current assets as well as replace some of the third parties who currently provide logistic services to MPC. On the gathering and processing side, we’ve a solid foundation, particularly in the Northeast, where we are the largest processor and fractionator in the region. We also have a presence in the Permian and STACK and expect to see growth in these regions. We remain bullish on U.S. crude and natural gas production, are enthusiastic about the long runway of investment opportunities for MPLX. With the support of MPC as our sponsor we have the ability to develop incremental infrastructure to support growth across the hydrocarbon value chain, importantly, including export opportunities. We’re executing a self-funding model and intend to finance our approximate $2 billion of organic growth without issuing public equity. Our plan is to fund the growth with retained cash and debt while maintaining an investment-grade credit profile and strong distribution coverage. The future for MPLX is bright. We are one of the premier midstream investment offerings and are well-positioned to deliver long-term sustainable distribution growth to our investors. I will now turn the call over to Pam to cover some financial highlights. Pam?

Thanks, Mike. Turning to our financial highlights on slide nine. We reported adjusted EBITDA of $760 million and distributable cash flow of $619 million to the first quarter both of which are referenced to the partnership. We’re now providing segment adjusted EBITDA in addition to segment income for our respective business segments. We believe this supplemental non-GAAP financial measure will be useful to investors and other stakeholders. Total logistics segment adjusted EBITDA was $437 million while the gathering and processing segment contributed $323 million in adjusted EBITDA. The bridge on slide 10, shows the change in adjusted EBITDA from the first quarter 2017 to the first quarter of 2018. Since the prior year quarter, we increased adjusted EBITDA by $337 million, $283 million of this increase came from the assets and services acquired from MPC with each dropdown contribution broken out separately on the waterfall. The adjusted EBITDA for the refining logistics assets and fuel distribution services included the onetime benefit of approximately $24 million in the first quarter related to the treatment of this dropdown for the partial period. With our strategic actions now complete we continue to expect the assets and services acquired from MPC in 2017 and 2018 to generate approximately $1.4 billion of annual adjusted EBITDA. The increase in the logistics in storage segment was primarily driven by earnings from Ozark pipeline and the expansion of our marine fleet that Mike referenced earlier. The gathering and processing segment, fire gather process and fractionated volumes accounted for the majority of the increase. Slide 11 provides a summary of key financial highlights and select balance sheet information. On February 1, we grew 4.1 billion on our term loan to fund the dropdown transaction with MCC. And on February 5, we’ve successfully raised $5.5 billion in unsecured senior notes with a weighted average coupon of 4.4%, the notes offering was significantly oversubscribed demonstrating confidence in the quality of our asset base. Net proceeds from this offering were used to repaid the term loan, outstanding borrowings on our bank revolving credit facility and our facility with MPC. Remaining proceeds will be used for general partnership purposes including our continued investment in the business. We had approximately $2.7 billion of liquidity at the end of the quarter with approximately $2.2 billion available on our bank revolving credit facility and $500 million available on intercompany facility with MPC. We’ve since increase the availability on our credit facility with MPC to $1 billion. The increase borrowing capacity provides the partnership additional financing flexibility and provides interest expense savings across the enterprise. Consistent with our intent to manage to a self-funding model no public equity was issued in the first quarter. We’re committed to maintaining a strong balance sheet and ended the quarter with a leverage ratio of 3.8 times comfortably within levels of appropriate for an investment grade credit profile. With a solid track record of growing distribution to unitholders in last week the Board of Directors of our general partner declared a distribution of 61 and three quarters cents to common unit. This distribution supports our prior guidance and we continue to expect 2018 calendar year distribution growth of approximately 10%. With our strong balance sheet and robust organic growth opportunities, we’re well position to deliver attractive long term returns for our unit holders. And now let me turn the call back over to Kristina.

Thanks, Pam. [Operator Instructions] With that we’ll now open the call to questions. Moderator?

Thank you. And we’ll now begin the question-and-answer session. [Operator Instructions] Our first question today is from Jeremy Tonet from JPMorgan.

I just want to start off with the -- if you could update us post the ANDV merger what the dropdown inventory at MPC would look like?

Jeremy it’s way too early for us to be able to project or forecast at this time. As you know as required both the MLPs will operate the normal ordinary course of business, in the meantime between the announcement here and closing. And we really will not start looking at the structure that I have said this morning, this is a gate, a day 2 issue for bringing these MLPs together, but as we have stated before, the dropdowns at MPC are largely complete with the big dropdowns we’ve completed in February of this year, and we have a few assets still in MPC but business will be normal as usual, with both sides managing their MLPs between now and closing.

Maybe if I could just turn to the organic growth opportunities set for MPLX on the gathering and processing side in the Permian and STACK I was wondering if you could update us there as far as your commercial activities and if you see more expansion opportunities there?

I am going to have Mike cover this but let me say one thing, I talked about this a good while, Greg and I both said this morning, is that the natural synergy that was just announced last week that Andeavor is going to be part of the Gray Oak pipeline and with our big demands, Galveston Bay is a 600,000 barrel a day refinery, about 200,000 of that is a light suite input, so there’s just a natural synergy there, and with that pipeline opportunities as we’re looking at other pipeline opportunities that may fit for us as well to serve Galveston Bay. So I just want to speak to that synergy but Mike will go into the detail of other assets.

Jeremy as you know we’re putting a lot of emphasis on growth in the Permian, we did announce that our Argo plant has started up, so that’s our second plant in the Delaware basin, we’re hoping to continue to progress that and in time get to announce another plant. As you also know, I've been pretty vocal about we want to get into long-haul pipelines, both on the gas, NGL or even crude side. All those things are still priorities for MPLX. We also as you mentioned continue to look at the stack as an area for growth and as Gary mentioned having our sponsor get more involved in the crude areas is good for us. We certainly on our own have had an emphasis in that crude area and I’ve been vocal before that we’ve been looking at crude projects that would support MPCs growth in the Golf Course region. So, we’re excited about the transaction that has occurred, we have lot of good things going that we’ve already spoken about, and then obviously some more things will be available in the future hopefully.

Thank you. Our next question is from Shneur Gershuni from UBS.

Hi. Good morning everyone. Just to clarify your response to Jeremy’s first question with respect to drop. So, are you seeing at this point right now that there are no expected drops or MPC as a result of the merger of ANDV and MPC? Or you just sort of view that as part of the structure review. I’m just trying to understand the subtle differences between them?

No, I wasn’t trying to be subtle there. All I said Shneur was, there’ll be business as usual both parties will determine what is best for their MLP until we close. And I didn’t say that there won’t be any drops for MPLX, we said right now what the very strong coverage ratio. I can let Mike and Pam here to discuss, don’t know if you have -- I don’t think if you have anything quite for the second quarter, but I don’t, Mike?

Yeah. I’ll just add, as Gary mentioned what we’ve been trying to say from the MPLX model standpoint is we’re going to self-fund organic growth that we’ve already disclosed about $2 billion whereas we’re going to keep our coverage ratio up at a high level that gives investor's comfort on stability. We finished the year of 2017 at 1.28, we just finished the quarter at 1.29, we have debt to EBITDA at 3.8 in the quarter. So, we’re going to continue to execute the plan that we’ve had, at the same time we’re very excited about the transaction this month that has announced. That’s a great thing for everybody involved and we look forward to seeing how that plays out in the future.

Maybe a better way to ask the question is, is there any language that prevents Andeavor from making any drops before the merger of Andeavor and MPC?

What we said was again, both parties are going to operate their assets in the normal course of business. And I can’t go in deeper than that at this time.

Okay. Maybe a follow up on a business-related question. There has been a lot of talk about over production of natural gas causing natural gas price realizations to drop and potentially impacting Marcellus. With Mariner East 2 at some point coming into services are any of your customers looking at shifting rigs hopefully from say big gas wells in Utica to the more liquid rich wells in parts of the Marcellus that have less gas and so forth. Do you see sort of that trend potentially emerging as there is more NGL to be more capacity?

Yeah, a couple of comments for you. First off, we are still just as bullish to Marcellus Utica as we’ve, obviously there is a lot of associated gas that comes out of the Permian, there’ll be an important part of the natural gas dynamic going forward. But outside of that associated gas we believe the Northeast has the lowest cost structure for natural gas production for the U.S., so it will continue to be a very important part of the natural gas supply and demand going forward. Specifically, to your question we’re encouraged that we’re seeing from the producers on both the dry and the wet increased activity. Obviously, that's part of the reason that we've announced eight processing plants this year, with the majority of those up in the Northeast, so we are gearing up for considerable growth in the Marcellus, Utica, you saw volumes pick up in 2017 in the dry area. Specifically, to your question, we are seeing some movement from dry to wet, as absolute flat price continues to increase and you’re seeing propane prices and C3, C4 prices continually move back up with crude price. So I think you’re seeing a little bit of both, we’re bullish, that’s why we had the -- the plans we’ve had in place, they were going to progress -- pretty good organic growth program up in the Northeast, and then I know we get the question a lot about associated gas versus Marcellus, Utica and I always encourage people to look at any consulting out there, and anyone that you want to pick and you'll see that the Marcellus, Utica growth is still a very important part of the natural gas supply demand balance.

Thank you. Our next question is from Michael Blum from Wells Fargo.

First question is on your very strong commitment to self-funding, will that still hold in place regardless of any future acquisitions you undertake at MPLX, including potentially MPLX buying Andeavor’s MLP?

So, Michael, what we said in the past is that self-funding model is there to represent our organic growth program, we said we do not plan to issue any equity to support that organic growth, but if there was a situation where a project was large enough or an acquisition or something along those lines that required that access to the capital market, we would look at that, but from this pure self-funding standpoint we were trying to relate to the market as that's related to our organic program.

And then second question just as you continue to add capacity in the Northeast in the processing and frac side, can you just talk kind of big picture how you're thinking about handling the incremental NGL equity barrels that are coming out in light of the fact that Mariner East 2 is likely delayed?

Michael, we continue with the same plan that we’ve done to-date. Up until this point we are moving all the NGL barrels through the existing ethane pipes that are available and we’re moving a lot of the C3 plus obviously, through mostly through rail; that will continue to be our plan until the Mariner system comes up. We still are very supportive of both Mariner 1 and Mariner 2 coming online. We've been asked the question a couple a times if this is delayed further, does that impact us? And we’ve stated that, we don’t see any impact throughout the remainder of the year if it were delayed further. Obviously at some point if it continues to be delayed we’d have to make additional plans but right now we’re assuming that Mariner will be coming up and it will be a major part of the NGL takeaway up in the Northeast.

Thank you. Our next question is from Barrett Blaschke from MUFG Securities.

Just a couple of kind of housekeeping, a lot of mine have been asked, as we’re thinking about ongoing growth in processing and fractionation in the Northeast where do you sort of see a ceiling, are you sort of ceiling our – are you feeling do you feeling like you’re getting close to it. And then is there a point where MPLX comes a bigger part of a downstream solution for takeaway capacity?

Yeah. To your first part Barrett, right now we continue to see just growth, we’re not seeing anything that gives us any concerns up in the Northeast. As it was mentioned earlier, I often get asked the question about associated gas and obviously associated gas been free with the crude production down in the Permian. Well, we certainly agree with that, but I always try and point out to everybody that the lowest cost gas outside of that associated gas is in the Northeast in the Marcellus, Utica. So, I’m still very bullish that the growth in natural gas supply demand will have a major part up in the Northeast. Second question was on NGL takeaway. As I just mentioned, previously we are supportive of the Mariner system coming online, we look forward to the opportunity to have further discussions whether it's JVs or anything along with those lines in that regard, but for right now we’re just supportive of seeing those pipelines come online and increase the dynamic up in the Northeast of NGL takeaway.

Thank you. Our next question is from Corey Goldman from Jefferies.

Hi, guys. So just a quick question, if I can actually go back to the presentation of the Andeavor marathon on slide 16. You guys give the breakdown two high quality MLPs. And I’m sorry if I can't tell if the disclosures were meant for the 2018 EBITDA using facts that consensus. Is that guidance sort of the 2018 EBITDA based on your expectations? Or is that you are referring to further source FactSet?

I think what I’m looking at is, if you’re referring to the chart that has the two bars that's just consensus the state that came out of the FactSet.

Okay. So, one, two AMDX and three MPLX, right?

Yes. It’s correct. That whole chart is the sources FactSet data.

Understood. Okay. I don’t know if you guys gave guidance for the MPLX, even though you talked about that last quarter not providing it. So, I just wanted to confirm that, that’s all I have. Thank you.

Thank you. Our next question is from Ross Payne from Wells Fargo Securities.

How are you doing guys? Hey, Mike you obviously voiced before this transaction was announced with MPC and then Andeavor that you have an interest getting into the Permian. Do you have interest beyond what Andeavor brings to the table with their pipeline exposure et cetera? Thanks.

Yeah, Ross obviously I can’t speak for ANDX, but as you stated we are pretty public, that one of MPLXs goals was to get more active in the Permian both on the NGL and gas side with our processing plants. Also mentioned we want to get into long haul pipelines. At the end of the day the exposure that we’re going to have there is independent but also obviously complementary because we’re very excited that our sponsor has engaged in a transaction that brings more footprint into Permian. So, obviously we see more growth opportunities in the future. But in the short-term we’re going to continue to focus on what we stated in the past. And that includes crude exposure as Gary mentioned earlier that something that we were working on independently and an obviously the sponsor transaction adds to that and provides growth for us in the future hopefully as well.

And Mike did you guys look at Gray Oak before this is what?

So, we are obviously always evaluating all the projects that are out there Gray Oak is one of the projects that’s been out in the public domain, we’ve been looking at that, as well as others, so we have been part of that process, and we’ll continue to be that way.

Thank you. Our next question is from Matthew Phillips from Guggenheim Partners.

So on -- Gary you mentioned on Gray Oak downstream connectivity to Galveston, MPLX obviously has the Texas City, tank farm, I mean what kind of opportunities you all see downstream in terms of expansion opportunities in the Houston and Galveston area?

Matthew what I said was on the call this morning that Andeavor Logistics through their gathering system they’re gathering a significant amount of crude in the Permian area, and we are a natural customer in our refining and we’ll see what happens. Gray Oak was announced today, does not include a connection into Galveston Bay. But I said that we’re looking at that as well as we’re looking at a few other options that are coming out of Permian as well to see what the best project is and I look at it kind of a high-grade problem that there’re going to be several options that we have in order to be able to our connect into Galveston Bay. So not only for servicing Galveston Bay, Mike can speak on other -- some other opportunities that we believe can be in and around our GBR facility.

So, Matthew as Ross just asked, we’ve been intensely focused on the Permian as an area where we think we can create value at MPLX, we've been looking at these crude projects and we’ve been vocal about our involvement in looking in that. Gary just mentioned, one of our primary goals is to enable better supply into Galveston Bay. In addition to that, as you just mentioned one of our goals is to be more active in the export community and we are growing out our tank farm at Texas City as a portion of that strategy we’ll continue to look for other opportunities as far as exporting goes, that's another important part of this, so being part of the value chain that gets us into the crude game is something that we stated as a goal, continues to be, obviously the sponsored transaction brings another dynamic to that, but absent that it's an area that we've been focusing on and we’ll continue to evaluate a couple opportunities as well as pursue long haul pipes in general, whether they’re gas or crude, those are the things that we've been talking to you about in the recent past.

In the follow up, I mean on the presentation for the acquisition you all provide in the appendix some nice pro forma footprints on both Permian and Bakken for the Andeavor assets, would the lack of Rockies assets pro forma mapping here imply that they don’t quite fit into MPLX's long-term plans as much, as does other two basins?

Not all on, in fact we’re one of the biggest purchasers of Rockies type crude, that can get into the DAPL pipeline system as well as the crude that can get down into Cushing and then get back up into Patoka, so we have many opportunities and the word that we like to use is optionality in the way we support our supply needs for all refineries. And the same thing goes for Andeavor's refineries, they have been able to do a very good job of moving barrels from the Bakken West, so you just look at our opportunities there. I think we have a lot of opportunities for solutions going forward.

Thank you. And we do have time for one final question. And our last question today is from Craig Shere from Tuohy Brothers.

Beyond 2018 do you see the need for robust MLP coverage to cover equity funding for new growth projects, that’s something systemic the MLP space is going to have to face for years to come and something that would be unchanged by any material expansion of scale at your MLP level?

So, this is Mike. One of the things that we’re trying to be very attentive to is the investor basin and what they’re looking for. And we think there is a combination of good long-term growth as well as providing sustainable coverage. So, right now what we’re trying to provide is both, I mean we’ve guided this year for 10% growth in distribution which we think is pretty strong signal of our confidence in our long-term plans. At the same time, that we’ve guided that we would have coverage greater than 1.2 and as you just saw in our announced results we were 1.29 for the quarter. So, we continue to think there is a good balance needed, investors need to see that’s stability from one side of it as well as continued growth and that’s our mission. We have guided past 2018, but we’ll continue to be in concept with the market and provide investors what we think they’re looking for as far as they valued investment.

Do you think in terms of market appetite for our really stable large entity to support lower risk growth CapEx, but there is still an open question as to whether there is sufficient market support that would allow for tapping external equity for growth funding say years from now?

Yeah. I mean I’m not going to speculate out three years from now, but what I can tell you is that again along the same lines of we saw a need in the market to show that stability, show like you said that lack of dilution and that’s why we’ve been very vocal about the self-funding model. At the same time, we have a pretty robust program, we’re announced at about $2 billion of organic growth, we’re going to do that with coverage and with debt. So, I think we’re providing the market place with what they’re looking for from an MLPs offering. And we feel pretty good about the future of MPLX from that standpoint we think we’re providing the model that the market is looking for, we’re excited about the investments that we have planned and now we’re also very excited about the transaction that the sponsor's announced today.

Yeah, Craig. This is Pam and I'll just add to that that as Mike highlighted earlier if there was a scenario where we needed to raise equity we would. So, first and foremost is we’re going to defend investment grade credit profile that we have, we don’t to see a need to issue equity based on our current organic growth platform. But, if the need arose than we would definitely do it to make sure that we have the investment grade credit profile that we want to have sustainably through the future.