Good morning. And welcome to the Eversource Energy Fourth Quarter and Year End 2018 Results. My name is Brendon, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded. And I will now turn it over to Jeffrey Kotkin. You may begin, sir.

Thank you, Brendon. Good morning and thank you for joining us. I'm Jeff Kotkin, Eversource Energy's Vice President for Investor Relations. During this call, we'll be referencing slides that we posted last night on our website. And as you can see on slide 1, some of the statements made during this investor call may be forward-looking as defined within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and are subject to risk and uncertainty, which may cause the actual results to differ materially from forecasts and projections. These factors are set forth in the news release issued yesterday. Additional information about the various factors that may cause actual results to differ can be found in our Annual Report on Form 10-K for the year ended December 31, 2017, and on Form 10-Q for the three months ended September 30, 2018. Additionally, our explanation of how and why we use certain non-GAAP measures is contained within our news release and the slides we posted last night and in our most recent 10-K. As you can see on slide 2, speaking today will be Jim Judge, our Chairman, President and CEO; and Phil Lembo, our Executive Vice President and CFO. Also joining us today are Leon Olivier, our Executive Vice President for Enterprise Energy Strategy and Business Development. John Moreira, our Treasurer and Senior VP for Finance and Regulatory; and Jay Buth, our VP and Controller. Now I will turn to slide 4 and turn over the call to Jim Judge.

Thank you, Jeff. And thank you everyone for joining us this morning. I am happy, very pleased to discuss our successful performance in 2018 and the very strong future we see for Eversource. Our 8,000 talented and dedicated employees undertake their work everyday to improve the experiences of our customers, support our approximately 500 communities and execute the forward looking clean energy policies of our state. And doing so, we've created a solid, very long track record of delivering significant value to our shareholders. And doing so in a way that effectively manages the risks of our business. A regulated business cannot be successful without positive relationships with its regulators. We firmly believe that our success in achieving top tier reliability and safety performance were combined with our success and reducing our O&M cost by more than 20% since 2012, enables us to create constructive regulatory frameworks that are fair to both customers and investors. As you can see on slide 4, we settled two major distribution rate cases in Connecticut in 2018. One for our electric business and for our natural gas business. The Connecticut Light and Power settlement was the first electric rate case settlement in Connecticut since 1986 and underscores the level of trust and transparency that we develop with other parties. Less than seven months after the three year CL&P settlement went into effect, we implemented a separate three year rate settlement through Yankee Gas. Both CL&P and Yankee Gas settlements provide us with forward looking rate mechanisms that allow us to step up our investments and our infrastructure to better serve our customers without suffering the earnings consequences of rate lag. In 2018, we also moved ahead with some of our strategic initiatives to support relentless focus on sustainability and greenhouse gas reduction. In addition…

Thank you, Jim. And today my part of the call will cover the 2018 results. An update on our key regulatory dockets. Look at 2019 guidance. Our new five-year financial forecast and a discussion about financing plans during that forecast period. As Jim said, we had strong 2018 from both an earnings and operational perspective. Beginning with slide 10, we earned $3.25 per share for the full year compared with $3.11 in 2017. A year ago we have projected earnings of between $3.20 per share and $3.30. So we're right in line with that projection. Our electric distribution segments earns a $1.44 per share in 2018 compared with earnings of $1.57 in 2017. The decrease was primarily due to low generation earnings as a result of the divestiture of our New Hampshire generating unit assets. Also offsetting the higher revenues were increases in depreciation, interest and property tax expenses. Our Electric Transmission segment earned a $1.34 per share in 2018 compared with $1.23 in 2017. Improved results primarily reflect our increased investments in that business. Our Natural Gas Distribution business earned $0.29 per share in 2018 compared with $0.23 in 2017. The increase was primarily due to higher revenues at our Yankee Gas Connecticut property, which would not decoupled until late in the year, as well as the outcome of a Yankee Gas rate review in the increased revenues related to our capital investment tracker mechanisms. On the Water Distribution segment, we earned $0.10 per share in 2018 and we acquired Aquarion in December so no 2017 results to report there. Eversource parent and other earned $0.08 per share in 2018 including two non recurring items that we discussed in the third quarter. The $0.08 per share write-off of our investment in Access Northeast and a $0.06 gain from various…

Thank you, Phil. And I'm going to return the call to Brendon to remind you how to enter your question.

[Operator Instructions]

First question this morning is from Mike Weinstein from Credit Suisse. Good morning. Mike.

Good morning, guys. Thanks for the big update. A question on the equity coming out. Can you give us I mean I know that you said it's going to be opportunistic, but can you give us a sense of whether some of it is back end loaded for the wind project? I think you said that you wouldn't be investing in the wind projects until they come online, right. So that'd be pretty far out. And I mean that was I think the Ørsted is only $225 million so that wouldn't be that much of the $2 billion equity to account for that. Maybe you can give us a sense of what that equity is for like why do you need equity now. I mean I understand that with bonus depreciation rolling our tax cash taxpayer at some point in this plan. So that would be a contributor. Can you just tell us like what's driving the $2 billion of equity and when you'll need most of it is? Is it backend loaded or front unloaded?

Sure. So, Mike, let me let me just add to something that you mentioned or clarify a few things. The capital program of $13 billion and the construction of 830 megawatts is included over the next five years not just that initial payment that you referenced to the partnership in Ørsted. So it's the construction of the 830 megawatts where the turbines and our CapEx program. So as I said, we will be opportunistic and assess what our needs are over that time period. No rush to need to do anything, but we'll take our time to look at what our construction program looks like over that time period and make some determination over the course of that period. So I wouldn't say that any of it is front end or backend loaded. I just say we'd be opportunistic of how we're going to approach it going forward.

Is -- how much of it is driven by the fact that you are becoming a cash taxpayer again and because I mean just a few years ago we were talking about the possibility of stock buybacks right. So this is the flip of that. I'm just wondering what's the driver of the $2 billion.

Yes. Mike, we better tax cash payer actually, we are tax and cash payer this year and we expect to be a tax cash payer next year. We had about $160 million of cash taxes in 2018 and will probably be in the 130 to 150 range in 2019 in terms of cash payment. And just to clarify in terms of, we had not really discussed share buyback I know but we got the question a lot, but I've always and we've always said that our focus is on investing in the infrastructure of business. And we didn't see that we would be in that mode of buying shares back that we would be continuing to invest in the business. And as I said, we've had a significant capital program over many years and have the next five years as even larger as I described going forward.

Mike, this is Jim. Just to add to a point that Phil made earlier in his comments. I think it's important to recognize that we're guiding towards 6% the midpoint of the range through 2023 and in the process we're not only funding the core business CapEx, but we're funding the build-out of the offshore wind as well, with virtually no earnings contribution from that business until 2024 when revolution wind comes online. So we're basically guiding to 6% even with the drag associated with the offshore wind investment.

Got you, and that offshore wind investment is just -- just the Ørsted for now just a 50% investment for now, right?

That is our partnership with Ørsted 50% on day one.

Next question is from Insoo Kim from Goldman Sachs. Good morning, Insoo.

Good morning. Maybe to ask the timing of the equity in a different way. So I think you have mentioned in the past that you wanted to keep the current Moody's credit rating intact. Do you have any sense of does that imply target FFO debt of, let's say 14% to 15%? And, if so, what time period do you look to I guess achieve or at least maintain that level?

Well, certainly we like where our Moody's credit rating is as you're right that we were target to maintain that credit rating. And you are also right that would indicate FFO to debt at those levels which --so that would imply we would be targeting that to maintain those rating. So there's really no change there, and I think that as we get into our kind of our spring forecast period with the rating agencies will, we obviously have discussed any press release that comes out and will provide an updated forecast as we go forward.

Understood and then regarding the 5% to 7 % EPS CAGR through this time period. Do you expect it to be a little bit lumpy given a lot of the regulated, the bulk of the increase of the regulate investments are in the next three years and then you have a lot of the wind construction financing without the earnings benefit coming in the latter half of that period. I just --I'm just trying to gauge whether they're --it's more of stable or whether we could expect some lumpiness?

I say it's more stable. Yes, I mean certainly any particular quarter could have particular things in it, but I'd say you should expect us to be in a stable growth environment.

Understood and just one more if I could What's the total potential opportunity set for AMI at least over this five-year period that could add to the rate base growth?

Well, in our --when you look at it, I'll say for us nothing has been approved, right. So if you did a full rollout in Connecticut and Massachusetts you might be at a $1 billion or for full rollout everywhere for AMI it should proceed what the program like that it would be over multiple years to get that installed. So that's the sizing that you should be thinking about there.

Great, thanks Insoo. Next question is from Julien Dumoulin-Smith from Bank of America. Good morning, Julien.

Hey, good morning, team. Thank you. Perhaps just to kick off on the offshore side if I can you. Elaborate a little bit on how you think about the size of the equity check now? I mean I know you've put down something of a down payment here with 225. I know that you are targeting regulated like returns on this investment, but what is the equity check that you're going to need just the kind of backdoor if you will into the 2024-ish earnings profile that we're talking about here?

Yes. Julien, this is Jim. I don't know you mentioned regulated returns, Ørsted is identified high single digit IRS as an appropriate return target, and importantly is the limit on that so that translates more to mid-teens ROE for us. We would expect offshore wind to be our highest earning business segment.

I'm sorry, okay, to run and reconcile with that mid-teens on what kind of equity check? And should we include the 225 that you've paid as part of that equity as part of the denominator in that ROE?

Yes. I mean certainly the 225 is part of the total cost of the project. There will be construction costs that go in there but you can imagine that given the competitive nature of this business that discussing specific construction costs or other assumptions would be sort of I think letting a little bit too much out of the bag in terms of competitors. So I say we'll try to be transparent. I think you probably have an assessment of your own as to what a megawatt cost to build or something like that, but the 225 is part I'm just getting started and there'll be construction cost that get added to that as we go forward.

Sorry maybe this might be a little more power way to ask it. What about like equity contribution is like a percentage of the capitalization. I know you have ITC's and the capitalization but it's we taking 50:50, 30:70, kind of high conceptually?

Yes, Julien, I'll try it another way that we're not going to sort of disclose the financing construct of our bids, but we are saying that the dramatic increase in our core business CapEx, coupled with the cost estimates that we have to build out the offshore win suggest that we want to do about a $2 billion equity issue through this five year window to continue to maintain the track record that we have, and that track record is one that's worth noting in terms of credibility and consistency. I mean if you look at the slide 5, we have had a remarkable run whether you look at one, three, five, 10 year performance of outperforming the index and outperforming the S&P 500. And I go back, if you looked at twenty years I was CFO of NSTAR 20 years ago. I think the results; the performance results are even more dramatic. So this consistency and a believe credibility given the track record. And while the financial performance has been top tier here, for the majority of that window of time we're also in top tier in terms of financial conditions. So we've put together a financing plan here that is going to allow us to again be a top tier finishing performer at the same time of having the top tier credit rating. So the finance --the financing are fungible right in terms of we have cash needs whether it's core business or whether it's offshore wind. And what size here I think is one that's going to allow us to continue a wonderful track record that we've had. And we've got commitment and conviction to deliver on that 5% to 7% of earnings growth and dividend growth that we've had going for so many years.

If I can just jump in real quickly on the 5% to 7%, obviously, there's --you are rebasing after 325. How are you thinking about the sort of the shape of that to get to the midpoint? I mean you just raise CapEx, the same time raising equity, seems like it's about a nickel decline versus the prior baseline for 2021 but I'm sort of curious as you see this out play out through 2023. Are you still saying it is midpoint of that 5% to 7% versus the prior baseline?

Yes. We are. Absolutely and again just in terms of the rebase lining comment. I mean traditionally our track record has been set each year we would move into the new year and then add another year and this year we're adding two more years into that. So it's very traditional as to how we've addressed giving you the long-term guidance but certainly conviction in a stable way with being in the middle of that range is clearly what we're confident and delivering.

Thank you, Julien. Next question is from Stephen Byrd from Morgan Stanley. Good morning, Stephen.

Good morning. I wanted to talk about offshore wind as well and just conceptually with your partnership with the Ørsted, obviously, Ørsted is a very accomplished offshore wind developer. At a high level how have you all determine the allocation of risk? Is it sort of essentially a true partnership where all risks are shared equally between the partners or there --is there a bit of a different delineation in terms of responsibility and risk between the two partners?

It's a shared risk 50:50. We collaborate on various benches into the RFP. The basis for the returns that we expect promote bids. So it's a true 50:50 partnership from a risk perspective.

Understood. And then when I think about the permitting process. I'm just not familiar with everything that would be involved or sort of other approval elements, and just thinking through permitting risk and other risks here. At a high level again, don't need to go through every permit, but how do you think about execution risk for these projects. You obviously have PPAs in place which is a huge element here, but how do we think about the potential risks of execution here?

That's about 24 -months permitting and citing calendar and site assessment work that has to go on. And then the US O&M is a key agency and then you get state and local permitting as well. Construction then is another 24 months, so right now where we are in the cycle is we expect South Fork site to be finished by the end of 2022 on that calendar. And the Revolution wind which is the larger one, 700 megawatts of PPAs to be done by the end of 2023.

Okay, understood and then just one last question just on Northern Pass. You highlighted on a slide which is really helpful all the permits and I guess the two next steps that I'm thinking about are the New Hampshire Supreme Court review and the Army Corps of Engineers process. Would you mind just talking a little bit further about next steps there and sort of how we think about those two pending processes?

Sure. So the process has kicked off at the New Hampshire Supreme Court. They agreed to hear our case, received briefs on the case. So we expect that oral arguments would soon be determined in New Hampshire probably in the May timeframe and then there really is no precise deadline or timeframe that's required for the court to decide, but we would expect some decision to be in by the end of the year type of thing. So the Army Corps permit is really --there's been a preliminary assessment of that and really at this stage once all of the other approvals are made, we don't see any issue in moving through that Army Corps permitting process.

Thanks Stephen. Next question is from Praful Mehta of Citi. Good morning, Praful.

Good morning, guys. How are you doing? Great, so sorry but I'm going to dig into a little bit of the offshore wind again. And I think the question from my side is more conceptual as in you really on this call gone headlong into offshore wind, right. Did the focus on offshore wind is increase significantly, obviously, the partnership with Ørsted and I think the skeptics still there are plenty of skeptics on offshore wind more around the concerns on execution risk. Clearly, it's been done in Europe but the risks around large projects execution approvals still seems to be pretty high among investors in the US. How would you -- how did you get comfortable with that risk? And do you believe that there would be --that this would be executed on time on budget? Or do you see any big risk that allowed that you worry about?

Yes. I think it's a good question. I do think it's important to note that, well; there was a lot of discussion of the offshore wind. What's particularly notable is that the dramatic increase in our core business CapEx for the three years in particular is about 25% increase for the next three years. And that's driving a lot of our growth prospects along with the rate platforms that we have in place. Ørsted has a long track record in many countries of going through the sighting process of delivering on projects and actually coming in under budget and on schedule. I understand that it's a new process here in the US. The sense that we get is that policymakers in particularly in the states in New England. I have a very strong appetite for more offshore wind. We've been through some of the site assessment plan already in 2017 has been actually completed already. So we're basically right where we thought would be from a sighting and permitting perspective. And I think there's a lot of excitement around the demand and the interest in offshore wind. We're making commitments in the various states in terms of economic development et cetera. So I have reason to believe that the spending that we have in the plan of 2022 and 2023 is likely to take place as we go through the permitting process and begin construction.

I just add a couple things to that another as more information that you have and the more certainty you have going into the process certainly reduces the risk exposure. And we've been at this for multiple years, three years basically to do site analysis to start the ball rolling in terms of permitting. So the lack of surprises there to somebody who maybe and it has just been a winner of a lease who has been in but really hasn't been able to do multiple years of wind and sea bed assessments and those types of things. So another comfort factor I'd add would be the amount of preliminary engineering and preliminary work that I has identified and move forward on a number of these items.

Got you, that's super helpful color. And just in terms of returns, clearly the return sounds pretty good based on the current views of the --and the forecast. Is there in your assessment, given you've done so much analysis on it, where are the big levers that could drive returns downwards or upwards? Is it just construction or the other factors that we should be thinking about as well?

Well, certainly construction is a big element in terms of --and as Jim mentioned, our track record and for our projects being completed on time and on schedule. And four sets track record for completing projects on time and on schedule are pretty high up on the list. So construction cost could be one of them.

It could, but we have a fair degree of conflict, did a lot of due diligence with our board in terms of entering into this deepwater transaction. And I think what's important to recognize is that now with Ørsted, we have the one and two closest leases to the mainland that means that the construction costs, the water depth are appealing in terms of a build out. We were worth --it's worth noting that the Ørsted lease that we entered into in 2016 cost was $600,000 and again it's -- at least it's very close to shore. Leases that are owned another 20 or 25 miles in deeper water move up transmission costs just sold a couple of weeks ago for one $135 million a piece. So I think that's a pretty good indication that there's a lot of value here. That this robust interest in offshore wind build-out and we have some significant advantages in cost and construction because of the locations of our two appealing leases.

Thank you, Praful. Next question is from Antoine Armand from Bank of America. Good morning. Antoine.

Hey, guys. Thanks for taking my question. I just wanted to get a quick sense of new debt financing needs this year beyond the maturities.

Typically, we don't give a precise schedule of our debt financing needs throughout the course of the year or the exact timing of it. But I do expect that for the maturities that we have we have $800 million of maturities that we would be financing, refinancing those and depending on levels of short-term debt, we could be doing issuances that are incrementally higher than that. So most of those would be at the various operating entities who have needs because they have their own construction programs and they finance their construction with internal funds plus debt financing. So $800 million is what the maturities are, and I would expect we will probably do something above that to keep our short-term debt levels down.

Got it and then over the five-year period. So you have of [1275] of CapEx. You have this $2 billion of equity $500 million combined of treasury shares. And then I mean cash from ops so you probably doing at least $2 billion a year. So if you have added these all up you have very limited incremental debt issuance over the period. Is that a right way to think about this?

Yes and then we have as we've mentioned a few times that we are additive to that $13 billion capital plan is the build-out of the offshore wind that I didn't here in that list of items.

Thank you, Antoine. Next a question is from Angie Storozynski from Macquarie. Good morning, Angie.

Good morning. No questions about offshore winds for change, but a different angle. So would you be interested in an expanding your T&D businesses in New England? If there were to be a federal asset sales in New England?

Hi, Angie. This is Jim. We would be obviously interested at the right price in terms of expanding our T&D's core business. We have the long, long track record of being a disciplined bidder when you look at the transactions that we've done 20 years ago company that form NSTAR was done and it's seen as hugely positive from a shareholder perspective over that 20-year period. Seven years ago now we did the deal that merged NU and NSTAR into what's now Eversource. Again, a deal that was widely recognized as being a big win for investors as well as customers. And then we did water acquisition deal that we did last year which true to form was delivered on, it was accretive to earnings in the first year as we have indicated in the --they actually our earnings performance outperformed our budget or our expectations for that business. So whether it's T&D or the water business, we think our core platform is a successful one and we would be interested in extending, but there have been a dozens and dozens of transactions in this region that have taken place that we didn't win because again we were disciplined bitter. So it'll all come down to the value that we can bring to the transaction. And what the asking price would be for the acquisition.

But none of this is envisioned in or embedded in that $2 billion of equity issuances, right. This is just to finance your current CapEx plans and then you're not trying to shore up your balance sheets for a potential M&A deal?

No. It's strictly for as I mentioned its capital --the capital plans we have and the investment activities that are in the five-year horizon.

Thanks, Angie. Next question is from Andrew Weisel from Scotia Howard Weil. Good morning, Andrew.

Hey, good morning, everyone. That was a long time to not talk about offshore wind, kidding of course, but just one or two going back to that topic. Strategically, Ørsted obviously now on to Block Island and is interested in developing offshore in the mid-Atlantic. Would you consider expanding beyond New England and New York or you're going to stick to your former corporate name of Northeast utilities?

So, we will. Northeast utilities is an old name but certainly the assets that we acquired in the transaction with Ørsted were the deepwater North East assets. There were other assets that were not part of the transaction. So we see our competency in this particular region as opposed to across the US. Proximity was a fact there are other leases that the Ørsted bought in the process that were further down the east coast from the mid-Atlantic area. And we didn't buy into those properties. So we at this stage, we feel that the proximity is important. These two leases are right off the coast of Massachusetts and Rhode Island coastal core operations. So that was a factor in the decision at this point.

Okay. Then I know that you guys are very confident the construction will be on time and on schedule. My question is mechanically or procedurally what happens if you're not able to deliver on the obligations under the various PPAs? In other words how does the each state treat that potential scenario where the --did the turbines aren't spinning on time?

I think, yes, this is Lee, Andrew. The issue the PPAs has certain provisions and adapted essentially required you to post more credit letter, letter of credit but the penalties are relatively speaking to the investment are minimal if you don't meet the in-service dates.

Okay, very good. Then just a quick one on the equity. If I heard correctly, Phil, I think you said that drip needs would come from the Treasury stock for the bulk of the $2 billion number. Should we expect block issuances as needed or it would be more like an equity forward deal?

There are many different ways of doing that whether they be block trade or roadshows or forward or so in terms of an ATM kind of program. So not really prescribing specifically the intent, but certainly all of those would be or the method, all of those methods would be evaluated and we would move forward again opportunistically and in a manner that we felt was appropriate for the time.

Got it. And in the past few years one of the drip obligations been?

It's $90 million to $100 million, anyone.

Thank you, Andrew. Next question is from Paul Patterson from Glenrock. Good morning, Paul.

Good morning. How you doing? Just a few quick ones the ROE in New Hampshire, you guys said that you're under earning your lot. I just wondering could you tell us what it was for 2018?

We've just filed our final numbers are in the process of doing it. I say it's just shy of an 8%, it's below 8%.

Okay and then with respect to -- know that a grid mod is not in the Connecticut or New Hampshire in your forecast, but I also knows that the grid mod docket has sort of been in held in abeyance for some, I'm not clear why. Could you sort of elaborate a little bit more what might be going on there?

Yes. I just commented with the new governor coming in there have been some changes. The former share of PURA has now taken a more significant job as the Commissioner of Deep. So I think it's got to do with the changes organizationally that happened with --when the new administration comes in, yes.

And in New Hampshire it's-- they typically have a smaller staff than any of the other states. And in fact just recently they started to move forward in a more active way in terms of draft mechanism, or draft position papers that will require more, some more studies. So it's moving along and if there's no particular reason other than staffing at this stage.

And then I think after this year, you're expecting O&M to be flat. Is that tied in any way to the CapEx that you guys have been investing or just is that just the savings that you guys are doing from just what you guys have often been doing? There's a cost containing.

Well, certainly I did highlight on the call that certainly there the CapEx investment has driven improvements and high levels of reliability and safety and performance for our customers, but it also helps in terms of taking other costs out of the business. If you repair something that you don't have to go visit two or three times to repair, if you replace it you'd have some O&M savings. So certainly the O&M gets reduced as a result of it. So being flat is really a challenge because you've got inflation. You've got negotiated wage increases. So really you're taking kind of 2% to 3% of cost out of the business just to stay flat.

Okay and then just on the offshore wind. Are you guys thinking of doing perm EPCs or anything like that with respect to the execution of the actual build out or how do you guys look at that? I know you mentioned that this Ørsted and what-have-you is it's got a good track record but other than that I'm just wondering anything any idea of up for EPCs or how should we think of that?

Yes, Paul, this is Lee. I think the way to think that is that Ørsted brings all of the resident competencies that they need, that they just coming off building or in the process and building over 2,200 megawatts for the UK alone. And again as Jim said, all on schedule below budget and so they're very good shape for them. It's a core expertise that's what they do. So really wouldn't make any sense to bring it EPC. There are other developers that clearly will have to bring in an EPC because they just don't have that core competency.

Okay and then the capacity factor, just could you remind me what it is that you guys are expecting for wind? Offshore wind.

Capacity factors, they're on the range of 45% to 50% capacity factors on the wind, and it's higher in the winter when prices are the highest in the region including New York and so there's a great benefit in that winter period for reliability and price suppression as well.

Okay and then just finally weather adjusted sales growth for 2018, could you tell us what that was?

I didn't tell you what it was but for electric, Paul, it was and again I preface my answer by saying as a result of our great plans that we have in place 90% of our revenues all of Massachusetts, all of Connecticut are decoupled. So weather has no impact only New Hampshire is the only jurisdiction that is still, it's not decoupled but weather adjusted normalized for the year was down slightly like 0.2%.

Thank you, Paul. Next question is from Travis Miller for Morningstar. Good morning, Travis.

Good morning, thank you. I'll return to the offshore wind if you don't mind. The agreement with Ørsted outside of the projects in the works right now. When we are thinking about that CapEx beyond and thinking out to the big potential what type of obligation as part of that deal with Ørsted and partnership with Ørsted. You have an obligation there to invest if say Ørsted were to make a decision to go forward?

No. With any opportunity we have the right to participate or not. There's no commitment or obligation to fully build out the 4,000 megawatt. We have an option to proceed or not.

Okay, on your own, based on your own economics and decision, okay. And then in terms of policy to again apart from the PPA is in place, are there any policies that need to go into effect in any of those northeastern states to promote offshore winds such that you could make it easier to go forward or are you going to be competing with other renewable sources on some of those non-identified projects?

Yes. Well, there's been a mixture. This clearly been actual offshore wind specific RFPs, the state of Massachusetts was the first to legislate it 1,600 megawatts need to be bid and it's specific to offshore wind. If it completed 800 of that with the first solicitation, we expect the next one to occur the first half of 2019 here. Additional legit legislation in Massachusetts has asked the Department of Energy resources to take a look at doubling that number to go to 3,200 megawatts. The state of New York has legislated 2,400 megawatts that they're going to do through multiple solicitations. Connecticut and Rhode Island have been active as well. In New York, the governor has actually suggested that he thinks that they should go to 9,000 megawatts although only 2,400 has been legislated to date. So the policy is in the form of offshore wind solicitations. One of the Connecticut solicitations that took place last year had offshore wind among other clean energy resources. And in that instance revolution wind project won an additional 100 megawatts, but there were also solar and nuclear commitments in that process as well. So the majority are offshore wind specific but there was some clean energy RFPs that would invite all fuel sources. A- Lee Now we just mentioned Jim that in Connecticut the governor has filed a bill yesterday a Senate bill that would add additional 1,000 megawatts offshore wind. So that's firming up as well.

Okay, great, now is1, 000 megawatts up a pure offshore wind. A- Lee Yes, Pure offshore wind.

Thanks Travis. Next question is from Andy levy from Exodus Point. Good morning, Andy.

Hey, guys. Can you hear me? Okay and I apologize if this was answered or that has been popping around so just get back on the equity. How much of the $2 billion is allocated for the offshore wind? The spread out.

Yes. There's no specific allocation, Andy, is the direct answer. We would look at our total portfolio of construction and investment needs which we said is $13 billion over the next five years for our CapEx. And then add on to that the build out our share of the cost of the 830 megawatts of build out of the offshore wind. So looking at the total pot is where we would focus not specifically find it in that area.

No. No. I understand that but if you didn't have the offshore wind how much equity would you be issuing?

Well you're asking it the same way only differently.

Yes, you could, Phil.

As I said, the $2 billion of equity supports kind of our total CapEx and offshore wind for the next --

Okay. So let me ask you different then. What's the proper capital structure for an offshore wind project?

So that when you -- you did miss it, Andy, because we talked about cost.

Okay. What's the bottom line of that?

That's a competitive process, obviously, we are not going to disclose the cap structure or the capital cost.

But I guess your return on investment however you measure it must be based on kind of how you finance it right?

Correct.

Okay, that's not -- that something at some point will you share that with us?

Yes. We've been saying based upon actually Ørsted has disclosed an 8% unlevered IRR which is going to give us a return that we think would be a transmission like or better when you look at so the returns on equity that we would expect there.

Okay and that's assuming that everything goes as planned or do you have a contingency built in into that?

We work with Ørsted building appropriate contingency is not only in terms of spending, but in terms of schedule.

Thanks Andy. Next question is from Mike Weinstein from Credit Suisse. Good morning, Mike.

Hey, guys. And just one quick follow-up. I just wanted to explicit --have you explicitly say that just confirm that you basically have offshore wind, additional offshore wind in the equity number, but it's not in the CapEx plan correct?

That is correct. It's not --it's not CapEx, it's equity investment.

Right. So there's a certain amount that's -- that's why the equity might look high to some people because it's not in as part of that $12 billion to $13 billion CapEx plan?

That's exactly correct, Mike.

Okay. But you're not saying how much?

That's correct also, yes.

Okay. Just wanted to get that out there. Thank you. End of Q&A

All right. Well, thank you very much for joining us today. If you have any follow-up questions, feel free to give us a call or send us an email. We look forward to seeing you at the conferences in early March. Take care.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.