Good morning, everyone, and welcome to the CMS Energy Third Quarter 2021 Results. The earnings news release issued earlier today and the presentation used in this webcast are available on CMS Energy's website in the Investor Relations section. This call is being recorded. After the presentation, we will conduct a question-and-answer session and instructions will be provided at that time. [Operator Instructions] Just a reminder, there will be a rebroadcast of this conference call beginning today at 12 p.m. Eastern Time, running through November 4. This presentation is also being webcast and is available on CMS Energy's website in the Investor Relations section. At this time, I would like to turn the call over to Mr. Sri Maddipati, Treasurer and Vice President of Finance and Investor Relations. Please go ahead.

Thank you, Rocco. Good morning everyone. And thank you for joining us today. With me are Garrick Rochow, President and Chief Executive Officer; and Rejji Hayes, Executive Vice President and Chief Financial Officer. This presentation contains forward-looking statements, which are subject to risks and uncertainties. Please refer to our SEC filings for more information regarding the risks and other factors that could cause our actual results to differ materially. This presentation also includes non-GAAP measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in the appendix and posted on our website. Now I'll turn the call over to Garrick.

Thank you, Sri, and thank you, everyone, for joining us today. I'm pleased to share we've delivered another strong quarter and continue to be ahead of plan for the year. I'll walk through the specifics in a moment, but I couldn't be more pleased with the strong execution demonstrated by the team, both operationally and financially. We continue to deliver every day for our customers, co-workers, and for you, our investors. Earlier this month, we completed the sale of EnerBank, grossing over $1 billion in proceeds. I want to thank the entire team that brought this to close. The sale of the bank simplifies in focuses our business models squarely on energy, primarily the regulated utility and important step as we continue to lead the clean energy transformation. The proceeds from this sale with one key initiative in our utility business related to safety, reliability, resiliency, and our clean energy transformation. As shared in previous calls, we have eliminated our equity needs from 2022 through 2024. Furthermore, Rejji will highlight in his prepared remarks, how we have continued to reduce this year's equity needs as well. The key word there continued. As we double down on the clean energy transformation. I am also pleased to share that we received approval for our voluntary green pricing program, which would add an additional 1,000 megawatts of owned renewable generation for our growing renewable portfolio. This program is in high demand in currently oversubscribed. And more importantly, it's what our customers are asking for an important step in offering renewable energy solutions for our customers. As we prepare for the grid of the future, we have a highly visible in detailed capital plans outlined in our recently filed electric distribution infrastructure investment plan. This plan provides a five-year view of the projects down…

Thank you, Garrick and good morning everyone. I’m pleased to offer the details of another strong quarter of financial performance at CMS as a result of solid execution across the company. As a brief reminder, throughout our materials, we report the financial performance of EnerBank as discontinued operations, thereby removing it as a reportable segment in reporting our quarterly and year-to-date results from continuing operations in accordance with generally accepted accounting principles. Now onto the results. For the third quarter, we delivered adjusted net income of $156 million or $0.54 per share. The key drivers for the quarter were higher service restoration expenses attributable to the Argus storms that Garrick mentioned and planned increases in other operating and maintenance expenses in support of key customer and operational initiatives. These sources of negative variance for the quarter were partially offset by favorable weather, the continued recovery of commercial and industrial sales in our electric business and higher rate relief net of investment related expenses. Year-to-date we’ve delivered adjusted net income of $628 million or $2.18 per share, which is up $0.19 per share versus the first nine months of 2020, exclusive of EnerBank’s financial performance. All in, we continue to trend ahead of plan and have substantial financial flexibility heading into the fourth quarter. The waterfall chart on Slide 8 provides more detail on key year-to-date drivers of our financial performance versus 2020. For the first nine months of the year rate relief continues to be the primary driver of our positive year-over-year variance to the tune of $0.45 per share given the constructive regulatory outcomes achieved in the second half of 2020 for our electric and gas businesses. As a reminder, our rate relief figures are stated net of investment related costs such as depreciation and amortization, property taxes and…

Thanks, Rejji. Our simple investment thesis has stood the test of time and continues to be our approach going forward. It’s grounded in a balanced commitment to all our stakeholders, enables us to continue to deliver on our financial objectives. As we’ve highlighted today, we’ve executed on our commitment to the triple bottom line in the first nine months of the year. We’re pleased to have delivered strong results. We’re positioned well to continue that momentum into the last three months of the year. As we move pass the sale of the bank and continued progress to IRP process. This is an exciting time at CMS Energy. With that Rocco, please open the lines for Q&A.

Thank you very much, Garrick. [Operator Instructions] And today’s first question comes from Shar Pourreza with Guggenheim Partners. Please go ahead.

Hi. Good morning, team. It’s actually Constantine here for Shar. Congrats on a challenging but successful quarter.

Thanks, Constantine.

I have a quick question on the cadence of long-term growth that you reiterated today. So the 2022 guidance implies the top of the range performance, as you mentioned, and kind of you expect to execute at the high-end. And one of the opportunities, obviously the IRP, but that may take some time for approval of execution. Just the 8% growth implies some incremental CapEx for the prior plan or any kind of financing items. And is there any change with a glide path or timing for the offset of kind of the near-term dilution from the business optimizations?

Well, let me tag team this with Rejji. But here’s what I’ll offer and here’s what you should hear from this call. High confidence in 2021 and that momentum carries into 2022. And we reaffirmed our guidance for that time period the $2.85 to $2.87. And as we said in previous calls, when I look out at 20 – office 2022 base, it continues to be at this growth rate of 6% to 8%. And I would expect us to be toward the high end of that. Now, we plan conservatively and in Q4 we’ll provide our capital plan. We expect that capital plan to grow with the things you would be familiar with the gas system, the electric system and the supply system. However, the IRP and particularly the Covert plant in 2023 and the dig assets in 2025 are upside to that plan. And once we have complete certainty on and that IRP process and those provide the opportunity for upside to the plan. And so, I mean, that’s the – there’s a great deal of confidence that I have about this five-year window, I’m going to look at from 2021 through 2025. But certainly, Rejji jump in to add some additional context.

Well, Garrick, I think you laid it out well. And Constantine, the only thing I would add just to give you a bit more specifics around the numbers. So our current plan that we’re executing on for five years or 2021 through 2025 is about $13.2 billion. We have not changed that, but we are assuming that we’ll increase that by about $1 billion next year in the next vintage into Garrick’s comments that does not presuppose any outcome for the IRP. And there’s about $1.3 billion of additional capital investment opportunities that is on the outside looking in, which just gives us more confidence in the plan. We also are not planning to issue equity. And so there’s a funding efficiency that will also be accretive to our financial performance as we see it. And what’s also not in a plan from a capital investment perspective that Garrick offered in his prepared remarks was a voluntary green pricing program that we got approval on, which offers about 1 gigawatt of capital investment opportunities, specifically renewable spend that we would own from 2024 through 2027. And so all of that’s on the outside looking in, so you can see why we have great confidence in our ability to deliver towards that high end off of the 2022 base.

Perfect. I think that’s very comprehensive. And maybe just shifting to the regulatory process for bid. Just on the IRP, can you talk about how you’re building kind of some of the stakeholder comfort with the kind of asset retirement and reg asset treatment and the kind of the mechanisms that you’re proposing? Does any of the thinking changed around the generation portfolio in light of the commodity shifts that we have seen?

Well, I’ll offer this one. Just credit to the team here at Consumers Energy and CMS Energy. There’s been an extensive stakeholder process and engagement with staff, with interveners, with the public that’s led up to the filing and has continued through the filing process. And so I feel really confident about that. The messages and the testimony are strong and solid and will yield really good outcomes. But in my prepared remarks, I said, there’s a win in this for everyone. And I really believe that. When you look at this plan, our 2018-2019 IRP was a great plan. This is even better. The resiliency and reliability of our electric supply, we’ve done the modeling. It’s more reliable plan in the past. It’s more affordable, $650 million of savings in this plan over the previous plan. And we cut carbon emissions by 60% by 2025, well ahead of the Paris Accord, the equivalent of taking 12.5 cars off the road. And from my stage point – standpoint here in the regulatory asset treatment, as I shared in the Q2 call, great testimony, and I think we’re going to have a constructive dialogue, and certainly a supportive dialogue we’ll see this afternoon in the intervener comments. And so there is a win in here for everyone. And when there’s a win in there for everyone, there’s a great path to a great outcome. And I believe that we saw that in 2018 and 2019. And so I’m looking forward to seeing staff and interveners testimony this afternoon, it’s going to be supportive. It will be balanced, it’ll be constructive. And were there differences? We’ve done that before, just looking at our 2018, 2019 IRP. I feel good about where we’re at in the process.

Perfect. Thank you. That’s very comprehensive. Then I’ll jump back in the queue. Congrats.

Thank you.

And our next question today comes from Jeremy Tonet with JPMorgan. Please go ahead.

Good morning, Jeremy.

Hi. Good morning. Just want to pick up on the CapEx side here and just wanted to see how you thinking about going to hardening investments at this point? And specifically, do you think in reaction to the storms this summer, we could kind of see more movement on this side?

Let me offer this. As I shared in my prepared remarks, we had a great response during the storm and I’ll be really clear. The fact pattern of storms has been different across the state. We’ve had one major storm. But if you stand back and look at the big picture and look forward from a strategy perspective, there certainly is a call for greater resiliency and grid hardening. And that’s an opportunity, opportunity from an investment perspective and an opportunity to create greater value for our customers. And so I think there’s a couple of thing driving that. One, we’re seeing more severe weather, not just in Michigan, but across the U.S. And so that is certainly a driver in the equation. And then two, when we think about this transition to electric vehicles and be able to support those vehicles, not only do we need the capacity out there to be able to do that, but also we want to ensure that when we do have an interruption in service, today it’s just the refrigerator, tomorrow it’s the refrigerator and the EV and their ability to get to work. That’s a whole new standard of performance. And so again, big picture perspective looking at for the future, I see this as an opportunity and inflection point where we spend more time and thinking about resiliency and grid hardening. I’ll share one last point on this. I’ve had the opportunity post-storm to talk with the governor to talk with the chair scripts and I can’t speak for them, but certainly a positive direction when we talk about how do we design the grid for the future, with climate change and with severe weather in mind. And so again, it’s an opportunity for investors and an opportunity to create additional value for our customers.

Got it. That’s very helpful. Thanks for that. And maybe just thinking about load as we exit the pandemic here. Just wondering if you could provide thoughts, I guess, as far as trends by class and really on the residential side, how you’re seeing, I guess, stickiness there and just any thoughts that you could share on that side?

Yes. Jeremy, this is Rejji. I can offer some color there. And we do have a slide in our appendix of the presentation, which is helpful, Slide 13 I’ll point you to also the detailed 15 Page Digest, also some good content on load. But what I can say at a very high level is we continued to be encouraged by the residential weather normalized load we’re seeing. So, you probably saw a year-to-date down roughly 2%, but that certainly compares favorable to plan where we assumed a more aggressive return to facilities for workers. And so we do think that this sort of hybrid format or mass teleworking trend should carry on and potentially be part of a new normal. And so in our budget, we had much more bearish expectations. This year we actually thought there’d be a quicker recovery and you see this down 2%, that’s an excess of plan and so we see performance to the upside there. And then we also compare it to the pre-pandemic level and relative to 2019, we’re up about 2.5%. And so we do think there’s a very nice bit of resiliency to the residential load. And again, it offers a higher margin relative to the other customer classes as you know.

Got it. That’s very helpful. Thank you.

Thank you.

And our next question today comes from Insoo Kim at Goldman Sachs. Please go ahead.

Hi. It’s Rebecca on for Insoo. Thanks for taking our questions. So for the ALJ decision on your rate case, it was roughly 25% of your requested revenue increase. So can you describe which items constitute the difference? And then if this gets adopted, would this impact your 2022 and 2023 growth trajectory?

Well, I’ll offer this. I really view this PFD from the ALJ as a bookend. And Michigan’s constructive regulatory environment and this commission and previous commissions have really shown a balanced and constructive approach. And I can’t speak for the commissioners, but my interaction with the commissioners would suggest this, that they believe and support healthy utilities, good outcomes from electric and gas rate cases. And when you have those and similar goals, it leads to good outcomes. And so I view we’re going to get an outcome in this electric order that’s in December, that’s both constructive and balanced, good for Michigan’s residents, Michigan – our customers, and frankly, good for CMS Energy. But Rejji if you want to just jump into some of the differences.

Yes. Rebecca, thanks for the question. So what I would add there is you do have a few sources, or I’ll say buckets of variants that lead to that delta between what we requested and where the PFD ended up. And so I would say cost of capital is a component. So we asked for 10.5% ROE, the ALJ was at 9.7%. And so that makes up a good portion of the difference. Also you see a difference in equity thickness. And so we were at 52% equity relative to debt and the PFD was about a point lower than that I call it 51% and change. And so those are the primary sources of difference. There also were differences in opinion on the capital required to really strengthen and harden the system. And so I think, if memory serves me, there was about $0.25 billion of capital investments that we were proposing for resiliency and reliability, which obviously we think is critically important, particularly on the heels of the August storm activity we saw. And we saw that also as a recommended disallowance of future spend. And so I’d say those are the major buckets there. And I think once you normalize for the prevailing ROE and equity thickness, you start to tighten that gap, but it’s primarily those buckets.

Okay. Thanks. And then for the EDIP, how much of that is in your five-year base plan and would that be incremental to your rate base or earnings growth?

I’m sorry. I missed the first part you said for your what?

EDIP filing in your five-year base plan.

Yes. So the $4 billion that does a lot of capital to be clear, the $4 billion of capital attributable to the EDIP and further we announced that there is the electric distribution infrastructure investment plan that does align. With the spend rate we’ve been on for some time, and so in our current five-year capital plan of $13.2 billion, about $5.5 billion of that is attributable to electric distribution. And so we’re on this sort of run rate of over $1 billion a year – $1 billion per year of capital investment. And we think that’s appropriate to balance resilience, reliability, as well as affordability. And so that’s effectively what this EDIP propose is.

Okay. Thanks so much.

Thank you.

And our next question today comes from Jonathan Arnold of Vertical Research. Please go ahead.

Hey, good morning, guys.

Good morning.

Can you just Rejji you mentioned on the roll forward of the capital clan, you would do probably – probably about $1 billion associated with that. Could you just – is that the voluntary green pricing being rolled in? Is it something else? Would the VGP be incremental may a little more color on that comment?

Yes. Sure, Jonathan. So to be clear the $1 billion that we’ll likely add to our next five-year plan from 2022 to 2026, that does not include the VGP and the opportunity there for that gigawatt of renewables, nor does it include any of the potential capital investment opportunity associated with the IRP. What it will likely entail is as you may recall, we had when we rolled out our ten-year plan and say the back half of 2019, if memory serves me, we said we had about $3 million to $4 billion of upside capital investment opportunities, which were not part of that 10 year $25 billion plan. And it largely had to do with electric and gas infrastructure modernization. And so those will be the likely components that are added to the capital plan going forward and represent that call it roughly $1 billion of upside. I also think we’re going to obviously roll forward our IRP related solar investments that are part of just the existing IRP that we’re executing on. So you’ll probably see some of that come into the plan as well as we add another year to our five-year rolling CapEx plan. Is that helpful.

Yes, very helpful, Rejji. So said another way that $3 billion to $4 billion is still there, despite the VGP and the IRP.

That’s exactly right.

Okay. And then can I just push, you mentioned that the VGP is already oversubscribed. Give us any flavor of sort of by how much, and what’s the pathway to potentially expanding that?

Well, I’d offer this one. Some of those are non-disclosure agreements, but just some public announcements, on Earth Day of this year, I was with the governor and we were announced that we were supporting the state facilities and they’re moved to renewable energy. So that’s an example. I’ll share with you that I was with a large customer just yesterday the global company, and they were looking at their large manufacturing facilities here in Michigan and looking at renewable type options. And so we're seeing a definite directional – direction in terms of sustainability among our large industrial customers, and this serves their needs. And so I'm not going to get into how much or from an oversubscription standpoint, but hopefully those examples provide some color on the context of opportunity there.

And Jonathan, the only thing I would add is if the spirit of your question is whether there will be sufficient demand for that gigawatt of opportunity, that we certainly feel very competent that there'll be requisite demand to meet the gigawatt of opportunity for the voluntary program.

The question was a bit more if you're oversubscribed, how are you – you need to add to it in order to keep – having those conversations.

And as we see it, that's what the voluntary green program would offer up about a gigawatt of additional capacity that we would own in the form of most likely solar new builds.

So at this point, I mean to answer your question, Jonathan, and at this point, we don't need to add to it. There's some runway there and we'd look to construct these renewable assets in the 24 to 27 timeline. So it's oversubscribed from what we have right now, and this will make up a good portion of that 1,000 megawatts, but there's more room to grow over there.

Okay. Thank you.

Thank you. Our next question today comes from Michael Sullivan at Wolfe Research. Please go ahead.

Hey, good morning, everyone. I'm sorry to put you on the spot a little bit here, but just seeing some of these filing start to come in on the IRP looks like some of the environmental parties pushing back on the gas plant additions, I guess, is that surprising to you guys at all? And ways to kind of come to some sort of agreement with them path forward. Any thoughts there?

I would offer this, when I say there's a wind in there forever one. It's clear that the environmental community loves the fact that we're eliminating coal and would like natural gas not to be the substitute, but here's what we know that the only way that you can deliver the resiliency and the supply side of the business and make sure we don't have an interruption in service, like was evident in Texas is to have natural gas as part of the solution. And so like I said, the staff and the other interveners are certainly mindful of the resiliency and the importance of natural gas within the state. So there's a lot of give and take within these. And I would just offer this in 2018. And in 2019 we had a lot of different points of view from an intervener perspective and we settled that case. And so differences are expected and we worked through those just like we have done and we have a track record of doing that.

Makes sense. And just sticking with the IRP, the other key focus area, I think you touched on a little, was the regulatory asset treatment at any parties in particular, you would expect to maybe push back on that. Initially, as we start to see the testimony.

Again, I would offer this and you have said this on the Q2 call and in other settings, this is an integrated resource plan and it's not a buffet. We've put together a great plan for Michigan. There was a winning in it for everyone. And so, we've been really clear about the need for recovery of, and on the asset. And so going forward, I mean, that's part of the plan and we've got testimony to support that. And as I stated earlier, when there's a win in there for everyone, there's a path to a good order and a good outcome. And so where there is differences, we have shown – we have the ability to work with everyone. And so again, I just see a nice positive outcome here in next year in 2022.

Great, thanks. Thanks a lot, Garrick.

Next question today comes from Julien Dumoulin-Smith with Bank of America. Please go ahead.

Hey, good morning team. Thanks for the time. Appreciate the opportunity to connect. So just in brief, if we can talk about the supportive commentary you brought up a moment ago around the testimony here, can you elaborate a little bit of specifically what your expectations are this afternoon and perhaps more specifically as you stated supportive, I imagine that you see across latitude towards the settlement here. I just want to make sure I'm acquainting one towards the other, right. I mean in terms of what this translates to next in terms of order,

Well, I would offer this. I mean, I don't have a visibility into the testimony until it's published. And so, I mean, obviously we had a great discussion with number of the interveners. We know some of their points of view where there might be good support and where there might be small differences. And so again, I would reflect on it this way. Again, we've done this in the past many times and rate cases and the like, and we've certainly done this with an IRP where there's differences. We find a way to work through those. And again, I think this afternoon, we're going to see, and I look forward to reading it. I think we're going to see supportive comments in general. And so when, again, when there's a winning in there for everyone, there's a path to a successful outcome. Now, I don't know if it's going to go down the path of settlement or we'll take it to the full order. But again, when there's a win there, there's an opportunity for success and that's what I'm confident about.

Excellent. All right. And then just coming back to the rate case a little bit here, given the discrepancy between the ALJ and the staff, does that inform your strategy heading into your next filing here in Q1 at all? I mean, obviously there's some specific deltas there that you alluded to a moment ago, Rejji, but can you, can you elaborate a little bit more and maybe how you move forward, especially in the next cases, if there's anything yet?

This is a constructive regulatory environment. Julien, you know that, I know that and I really see this PFD as a bookend, as I stated earlier. And so the conversations that we have with staff in outside of cases is really how do we continue to ensure a safe and reliable natural gas system? How do we ensure and bring clean energy to Michigan? How do we ensure the reliability and resiliency in electric grid? And so those are in line with our goals and what we want to do as well. And so, we'll continue to be thoughtful about that process to make sure we balance customer's affordability with that. But I don't see any real change in plans as a result of a specific ALJ, PFD at all.

And Julien, this is Rejji. The only thing I would add is, at the end of the day, it also speaks to just the benefit of the Michigan regulatory construct and the legislation in that. Any event there is misalignment because ultimately at the end of the day, the commission's order will dictate where we end up. But in the event, there is a misalignment, there's a forward-looking test here. And so obviously we have not incurred the expenses on the capital or the O&M side. And so if we see misalignment in terms of where we'd like to go versus where the commission ends up, where we can toggle the capital and spend program accordingly. So again, it just speaks to the constructive nature, not just of decisions we've seen in the past, but also the rate construct and the legislation itself.

Yes, I hear you bookend is the keyword here, actually, guys, best of luck. We'll speak soon.

Thanks, Julien. Thank you.

And our next question today comes from Travis Miller at Morningstar. Please go ahead.

Good morning. Thank you.

Good morning, Travis.

I have two questions going back to the storms. First one is in your discussions that you referenced with regulators, governor either within or outside of the rate cases, there've been any talk in addition to some of the public comments about fines or penalties or other kinds of pushback on the storm response. That's my first question. And then the second question was the 16 funds. Can you kind of break that down in terms of how you offset that to stay on track with the guidance and for this year?

Well, two part, this one between Rejji , take the second question and I'll take the first piece. I would offer this, one again, conversation with the governor's office in which chair scripts have been constructive. And again, I don't want to speak for the chair, but I would offer this, the commission has been supportive of both our electric reliability spend as of recent the capital investments, as well as increased forestry spend. We increased our forestry spend this year by little over 60%, and that was supported through a rate case process by the commission and the commissioners understand that we're in the first year, that the number one cause for outages is tree trimming. And we have a very aggressive program now in place, which will benefit our customers. And so our commissioners, I believe, understand that we're in the early years of these larger investments and operational maintenance expense, which will help our customers. And so I think there's full recognition of that. I have not heard any talk at all, zero from the governor's office or from the commission on any sort of penalties associated with the storms in August.

Okay, great.

And Travis, the only thing I would add is with respect to the $0.16 of negative variance that I noted my prepared remarks for Q3 of this year versus Q3 of last year, it was in large part offset as a result of just good weather we saw throughout quarter, it was quite warm the month of August and that offset a lot of the incremental service restoration costs that were incurred. And I also want to give credit – where credit is due. I think the fact that we've already exceeded our expectations on cost savings across the organization was also quite helpful in offsetting some of the service restoration. And then lastly, again, as I mentioned, residential down 2% year-to-date, roughly versus year-to-date last year, but it's ahead of plan two. And so you've got a little favorable mix as well versus plan. So all of those factors have largely offset the service restoration expense that we saw in Q3.

Yes. Thanks. And then just a quick clarification on the $0.16 that was incremental to plan, or did that include typical storm related expenses? I assume you include…

Yes, the $0.16 was incremental to Q3 of 2020. So it's just – that's a historical comp and that's what that estimate is predicated on versus plant, a little higher than planned. But remember, in addition to having a decent amount of service restoration in our budget, we also utilize some regulatory mechanisms both what we call a voluntary refund mechanism that we put in place at the end of 2020 that provided additional budgetary support. And then we also shared a gain on the sale of some assets related to our transmission assets in 2020, but offered additional I’d say regulatory liabilities to support that provide additional budgetary installation of the service restoration this year.

Okay, great. Thanks so much, appreciate the details.

Thank you.

And our next question comes from Ryan Levine with Citi. Please go ahead.

Good morning. So one on financing proposal, in your plan it looks you reduced your equity needs for this year by about $43 million. Can you walk us through what’s the driver of that and how much is really contributed to the purchase price adjustment for the recent asset sale and if there is any other factors that are driving that number if there is some conservatism baked to that?

Hey, Ryan, thanks for the question. So the EnerBank sale gross proceeds and the upside associated there was the key driver that enabled us to reduce our equity financing needs the year and the way it works. And it's a little nuanced I've been doing M&A for almost 20 years, but for Fincos or financial service companies, you have your traditional adjustments from signed to close on a working capital side, but from a financial service companies, you also get credit if the book equity of the business increases from signed to close, and we saw that with EnerBank’s outperformance over those handful of months. And so that led to about $60 million of upside from the gross proceeds we announced at signing which was $960 million, not to the amount that we ultimately saw at closing, which was over $1 billion, call it, just under $1.20 billion. And so that's what gave us the upside and financial flexibility to reduce the equity needs. And so it's really a function of just that really strong performance at the bank that it created their book equity that gave us more proceeds at close.

I mean, that's a bigger number than the amount of equity you reduced. Is there some conservative baked into your reduction in equity needs or is this effectively a few million dollars worth of pre-funding of future equity needs or future capital needs?

Yes. So remember we have about $57 million of equity forwards that we've already put in place. And we have been putting those in place even before we announced the sale of the bank. And so that gives you effectively a four for how low you're going to go, because at some point we will settle that. And so that's why we stopped at that sort of $57 million. It's because of the existing equity forwards we already have in place.

Okay, great. So I guess that helps you for future years for capital needs. Appreciate it. That's all I have.

Thanks.

Ladies and gentlemen, this concludes our question-and-answer session. I like to turn the conference back over to Garrick Rochow for closing remarks.

Thanks, Rocco. And I'd like to thank you all again for joining us today. We're looking forward to seeing you at EEI in the near future here and take care and stay safe.

Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may disconnect your lines and have a wonderful day.