American Water Works Company, Inc. (AWK) Q4 2022 Earnings Call Transcript

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American Water Works Company, Inc. (NYSE:AWK) Q4 2022 Results Conference Call February 16, 2023 9:00 AM ET

Company Participants

Maureen Duffy - Senior Vice President of Communications

Susan Hardwick - President and Chief Executive Officer

John Griffith - Chief Financial Officer

Cheryl Norton - Executive Vice President and Chief Operating Officer

Conference Call Participants

Richard Sunderland - JPMorgan

Gregg Orrill - UBS


Good morning, and invited to American Water's Fourth Quarter and Year-End 2022 Earnings Conference Call. As a reminder, this telephone is being recorded and is besides being webcast pinch an accompanying descent position done nan Company's Investor Relations website. The audio webcast archive will beryllium disposable for 1 twelvemonth connected American Water's Investor Relations website.

I would now for illustration to present your big for today's call, Maureen Duffy, Senior Vice President of Communications. Ms. Duffy, you whitethorn begin.

Maureen Duffy

Thank you. Good morning, everyone, and convey you for joining america for today's call. I'm filling successful coming for Aaron, who is simply a spot nether nan weather. At nan extremity of our prepared remarks, we will unfastened nan telephone for your questions.

Let maine first spell complete immoderate safe harbor language. Today, we will beryllium making forward-looking statements that correspond our expectations regarding our early capacity aliases different early events. These statements are predictions based connected our existent expectations, estimates and assumptions.

However, since these statements woody pinch early events, they are taxable to galore known and chartless risks, uncertainties and different factors that whitethorn origin existent results to beryllium materially different from nan results indicated aliases implied by specified statements.

Additional accusation regarding these risks, uncertainties and factors arsenic good arsenic a much elaborate study of our financials and different important accusation is provided successful nan 4th fourth net merchandise and successful our 2022 Form 10-K, each filed yesterday pinch nan SEC.

And finally, each statements during this position related to net and net per stock mention to diluted net and net per share. Susan Hardwick, our President and CEO, will remark connected our successful 2022 and our longer-term capacity expectations and shareholder value.

John Griffith, our Executive Vice President and CFO, will screen our 2022 financial results successful much detail, supply an update connected acquisition activity and we'll adjacent pinch a reappraisal of our outlook for 2023 and beyond, including financing plans.

Cheryl Norton, our Executive Vice President and COO, will past talk our superior finance scheme complaint guidelines maturation expectations and progressive wide complaint cases earlier concluding pinch immoderate ESG nickname we precocious received. We will past adjacent by answering your questions.

With that, I'll move nan telephone complete to American Water's President and CEO, Susan Hardwick.

Susan Hardwick

Thanks, Maureen, and bully morning, everyone. Thanks for subordinate america today. As we announced yesterday, we vanished 2022 pinch beardown financial results that were conscionable up of our plan.

As shown connected Slide 5, net were $4.51 per stock for nan year, which included $0.06 per stock of favorable upwind we had antecedently discussed. Excluding weather, net of $4.45 per stock were conscionable supra nan midpoint of nan guidance scope we shared primitively backmost successful November of 2021.

Think astir what has occurred globally since November of 2021, including wide inflation, liking rates connected a important climb upward, Russia's penetration of Ukraine, and galore group are returning to nan agency arsenic nan world began to stabilize pursuing recurring waves of COVID outbreak.

When I bespeak connected really overmuch has changed successful nan world since November of 2021, I'm very proud of our company's expertise to enactment focused connected serving our customers safely and reliably, which gave america nan expertise to confidently execute connected nan scheme we shared 1.5 years ago.

I'm besides proud of nan resilient work we consistently present and particularly complete nan past fewer months during an progressive and amended acold large wind play crossed nan country. I want to convey our labor for safely providing reliable work to nan 14 cardinal group we service successful their homes, businesses and communities.

You tin spot present connected Slide 5, a checklist of immoderate of our cardinal accomplishments successful 2022, and John and Cheryl will adhd to these successful their remarks. Overall, we judge nan takeaway coming for investors and analysts is that our beardown execution successful 2022, amid a challenging backdrop, coupled pinch our clear superior maturation plan, it demonstrates American Water's expertise to present connected our semipermanent plan. I'm very assured we tin execute our plans successful '23 and beyond and nan awesome -- pinch nan awesome momentum we person from 2022.

Turning to Slide 6. As you tin see, we person delivered an exceptional full shareholder return complete nan past 5 years, including a increasing grounds of important dividend increases. We're very proud of this history, which besides compares favorably connected a three-year look backmost for TSR. I want to acknowledge, though, that our banal and h2o inferior stocks successful wide did not execute arsenic good successful 2022 compared to nan broader inferior sector.

Valuations of precocious PE stocks fell quickly successful nan first half of 2022 arsenic existent and expected liking complaint hikes changed nan scenery of finance opportunities. As a result, nan PE aggregate spread that had greatly expanded betwixt h2o utilities and electrical and state utilities successful caller years narrowed successful 2022, each of that while we continued our very beardown performance.

This floor plan shows intelligibly nan effect of nan macro situation we person been successful and really it affected valuation without respect to circumstantial performance. And arsenic we've seen truthful acold successful 2023, this revaluing of nan marketplace has stabilized arsenic galore different macroeconomic drivers person stabilized, including liking rates.

If this continues to clasp true, I'm assured our company's fundamentals and nan execution of our strategies will thrust shareholder worth and very competitory full shareholder returns for galore years to come, which takes america to Slide 7.

The comments that we'll stock coming are an affirmation of nan financial plan, targets and guidance we laid retired past November. Later, John will recap nan drivers for maturation successful 2023, but large picture, we judge nan operation of our EPS growth, our beardown dividend, and ESG premium, and nan affordability of our work continues to beryllium rewarded by investors and distinguishes america from others successful nan inferior sector.

I'll punctual you that we judge nan runway for our maturation and for achieving these targets is very long, surely done 2027 successful our five-year scheme and beyond. This is primarily, of course, owed to important investments successful infrastructure and regulated acquisitions.

And we get further into nan plan, spot nan afloat effect connected net from nan accrued superior spending and proceed our way grounds of occurrence successful nan regulatory arena we will present connected our net maturation scheme and wrong nan target range.

And pinch that, I'll move it complete to John to screen much item connected 2022 financial results, our '23 outlook and our financing plans. John?

John Griffith

Thank you, Susan, and bully morning, everyone. Turning to Slide 9. I'll commencement by providing much specifications connected our financial results for nan year. In 2022, net were $4.51 per stock compared to $6.95 per stock successful 2021. Fourth 4th and afloat twelvemonth 2021 results included a summation of $2.70 per stock from nan waste of Homeowner Services and nan $0.19 per stock publication to nan American Water Charitable Foundation from nan proceeds of nan sale.

Excluding this nett summation successful 2021, net grew by $0.26 per stock successful 2022. Earnings connected infrastructure finance were nan cardinal driver of nan growth. In 2022, we saw an summation of $0.89 per stock related to higher revenues from caller rates, acquisitions and integrated growth.

Also, arsenic discussed past quarter, upwind was favorable by an estimated $0.06 per stock successful 2022 and $0.04 nett year-over-year owed chiefly to warmer and drier conditions successful 2022. Revenues successful 2022 were favorable to scheme for nan twelvemonth owed to patient integrated request and favorable and timely complaint lawsuit execution successful summation to nan favorable weather.

These factors, mixed pinch disbursal guidance and little pension costs arsenic compared to plan, helped offset nan impacts of ostentation we earned successful 2022. Specifically, O&M and different disbursal accrued by $0.31 per stock year-over-year pinch an estimated $0.23 of inflationary costs connected chemicals, powerfulness and different substance and higher liking rates.

O&M and different besides accrued owed to liking disbursal connected caller debt, state-level gross taxes and insurance. Depreciation disbursal besides accrued $0.14 per stock successful support of maturation successful nan regulated businesses.

And arsenic a reminder, 2021 results included $0.12 per stock of operating net from our erstwhile New York subsidiary. The different operating conception results decreased successful 2022 arsenic nan $0.31 per stock of operating net from HOS successful 2021 was mostly offset by $0.24 per stock of net successful 2022 from liking income and gross stock agreements.

Finally, I want to statement that we person a descent successful nan appendix that provides immoderate further specifications connected 4th fourth results, which were besides connected plan. Turning to Slide 10. You'll spot that successful 2022, we had a beardown twelvemonth of business improvement maturation arsenic we closed connected $335 cardinal of acquisitions, which represents 70,000 customer connections crossed 7 states.

I deliberation it's worthy pausing for a infinitesimal to admit nan tremendous magnitude of activity it takes crossed our authorities teams successful collaboration pinch our firm squad to create these opportunities, execute acquisition agreements and astir importantly, adjacent connected specified a sizable number of acquisitions.

The last statistic connected immoderate 1 almanac year's worthy of acquisitions are often nan consequence of galore years of groundwork. We are assured we are nan correct prime for communities and hunt of solutions to their challenges, and we will proceed to thrust that vision. We are group up good for 2023 to beryllium a beardown twelvemonth for maturation done acquisitions.

To commencement nan year, we had $326 cardinal of signed acquisition agreements crossed 9 states, which includes nan Butler Area Sewer Authority, wastewater strategy successful Pennsylvania, we talked astir past quarter. The integration activity to adhd Butler's customers, operations and labor connected to nan American Water level is progressing arsenic planned.

We expect to adjacent connected that acquisition by nan extremity of 2023, pending regulatory support and look guardant to serving these caller customers. Of course, arsenic we adjacent connected transactions, nan activity to build and refill nan acquisition pipeline is continuous crossed our footprint. Our pipeline of complete 1.3 cardinal customer connections is simply a beardown starring parameter that supports this portion of our net maturation triangle.

Moving to a chat of our financial health. On Slide 11, we supply a summary of our beardown financial information arsenic we caput into 2023. As a motion of continued financial strength, some S&P and Moody's person precocious affirmed our in installments ratings of azygous A and Baa1, respectively, and pinch a unchangeable outlook for both. We judge our indebtedness maturity levels, on pinch our planned indebtedness issuances, are very manageable.

Our laddered attack to semipermanent indebtedness financings complete nan years is important to minimize liking complaint consequence successful a rising complaint environment. I expect america to proceed to rumor fixed-rate semipermanent indebtedness to protect against liking complaint volatility.

For full indebtedness to capital, which astatine year-end was conscionable supra our target of 60% aliases less, we expect a meaningful alteration successful 2023 erstwhile we rumor equity. And finally, connected liquidity, we proceed to stay assured that we will person capable entree to superior for nan foreseeable future.

Moving connected to Slide 12. As Susan mentioned, we are affirming our net guidance for 2023 successful nan scope of $4.72 to $4.82 per share. With our grounds of execution, we are assured successful our expertise to execute our net expectations for 2023.

The factors down our 2023 guidance and semipermanent outlook are accordant pinch our messaging erstwhile we initiated 2023 guidance successful November of 2022. This year's maturation builds connected nan accelerated CapEx scheme we put distant successful November of 2021, which is driven by superior finance to service our customers.

Recent acquisitions that are being incorporated into progressive complaint cases aliases conscionable completed complaint cases will besides thrust gross and net maturation this year. The regulatory solutions we pursued successful our caller cases and are pursuing successful our progressive cases specified arsenic costs deferrals and disbursal betterment mechanisms are intimately aligned pinch nan liking of our -- of regulators and customers.

This attack helps to negociate affordability and limit variability of customer bills, which yet aligns pinch our investors' interests arsenic well. We are assured that we person successful spot regulatory solutions for complete 75% of nan elevated costs we expect successful nan adjacent term, including definite accumulation costs, liking and pension costs.

As it relates to pension costs, pinch our year-end pension responsibility re-measurement completed, we now cognize nan pension disbursal for 2023, and it is afloat reflected successful our unchanged 2023 EPS guidance range. Finally, 2023 results will use from MSG's successful summation of its first Navy statement that we announced past summer, which will beryllium afloat transitioned successful March of this year.

Moving connected to our financing plan. We proceed to expect to rumor an estimated $2 cardinal of equity from 2023 done 2027. Consistent pinch our anterior messaging, taxable to marketplace conditions, we scheme to raise a important information of nan full planned equity successful 2023. The remaining information of nan $2 cardinal of planned equity not completed successful 2023 is expected to beryllium issued adjacent nan extremity of nan existent five-year plan.

As we've said for respective quarters now, we expect equity will beryllium a regular financing instrumentality to money incremental maturation successful nan finance scheme and to support a beardown equilibrium sheet. We besides proceed to expect to raise superior annually successful nan indebtedness markets, including later this year.

On Slide 13, we are affirming immoderate much specifics regarding nan cardinal drivers for 2023 that I conscionable discussed. These drivers are besides mostly accordant pinch what we shared past quarter, and show nan value of our ongoing regulatory execution.

Recent caller gross successful Pennsylvania, New Jersey and Illinois, together pinch infrastructure surcharge mechanisms relationship for a important mostly of nan $1.10 to $1.20 per stock gross summation successful 2023 shown connected this slide, besides reflected connected nan financing plans we expect to execute successful 2023 that I conscionable reviewed.

Wrapping up connected Slide 14, I'll echo Susan connected really we thrust our maturation strategy and our operating plans to execute our company's targets and goals. For nan communities we already service and nan communities we dream to service successful nan future, nan superior finance needs that are required to present much sustainable h2o and wastewater services are very large. It's up to america to find ways to equilibrium these finance needs pinch nan affordability of services for our customers.

As you've heard today, we are affirming our semipermanent net and dividend maturation targets and our different semipermanent financial targets stay unchanged. We judge our 7% to 9% EPS and dividend maturation targets are compelling and support our position successful nan apical tier of maturation successful nan industry.

The operation of our maturation outlook, supported by our important yet low-risk superior finance plan, arsenic good arsenic our ESG activity premium and constructive position connected affordability should proceed to beryllium rewarded by investors. Based upon this and our history of executing connected our strategies, we expect to proceed to present a very competitive, sustainable shareholder return for galore years to come.

With that, I'll move it complete to Cheryl to screen our CapEx and complaint guidelines maturation plan, complaint lawsuit updates, and much connected ESG. Cheryl?

Cheryl Norton

Thanks, John, and bully morning, everyone. On Slide 16, I want to commencement by acknowledging that our full institution did an fantabulous occupation of safely executing connected our accelerated superior scheme and safely performing our day-to-day activity successful 2022.

While we didn't scope our eventual extremity of zero injuries, we did grounds our champion twelvemonth ever successful position of information performance. That's rather an accomplishment since 2022 was besides a grounds twelvemonth of full finance successful American Water, and we knowledgeable immoderate utmost upwind conditions. We somewhat exceeded our $2.5 cardinal extremity for nan twelvemonth by making prudent finance decisions crossed our footprint and by acquiring galore caller systems, which John said astir earlier.

Looking up to 2023, and arsenic we told you successful November, we accrued our finance scheme this clip to $2.9 cardinal wide and astir $2.5 cardinal for superior expenditures. This will apt beryllium our caller yearly period for nan adjacent fewer years. Coupled pinch elaborate task plans, we expect this gait of finance to thrust improvements successful h2o value and reliability for nan use of our customers.

These investments besides make important economical use to nan section and location economies while improving nan biology compliance of nan systems and nan communities. These investments should besides favorably effect our tube replacement cycles, which are overmuch amended than nan manufacture average. Taken together, these actions show really nan values of ESG are integrated into our mundane work.

Turning to Slide 17. I won't walk overmuch clip here, but this chart simply illustrates nan consequence of our continued execution connected superior investments. The operation of infrastructure projects and acquisitions is succeeding successful increasing our complaint guidelines astatine a semipermanent complaint of 8% to 9%. Rate guidelines growth, of course, will thrust net maturation arsenic we make prudent investments successful our systems pinch constructive regulatory outcomes.

Let's move to Slide 18 and reappraisal nan awesome components of our 10-year superior finance expenditure plan. Our attraction continues to beryllium infrastructure renewal astatine 68% to 70% of nan scheme done 2032. These investments are chiefly for tube replacement and upgrading h2o and wastewater curen facilities.

We besides expect to allocate 10% to 12% of our superior expenditures to resiliency successful bid to harden our systems, amended cyber and beingness security, and reside ambiance variability. This allocation has accrued complete wherever we've been historically. Our resiliency has been tested complete nan past fewer months pinch floods successful California and nan bitter acold temperatures successful galore of our work territories complete this past vacation season.

As Susan said earlier, our systems and our teams did a awesome occupation of weathering nan storms and preventing immoderate awesome work disruptions during these caller events. It shouldn't beryllium mislaid connected our investors aliases different stakeholders that our labor successful nan section person nan champion skills, training and expertise successful nan industry, which leads to these awesome results erstwhile we're tested.

Our committedness to make needed investments to heighten h2o value remains very strong, including steps we're taking to amended our broad root h2o protection programs and upgrade our curen facilities. Every h2o supplier must beryllium prepared to reside a broader scope of contaminants and beryllium fresh to meet much stringent regulations.

Finally, we'll proceed to put successful caller technologies to heighten our customer acquisition and alteration our labor to thrust efficiencies. Overall, our superior scheme is very overmuch aligned pinch our biology goals and different ESG-related values that we prioritize arsenic a company.

Let's spell to Slide 19 and screen nan latest regulatory activity successful our states. Shown connected this descent is simply a summary of pending aliases precocious completed wide complaint cases pinch immoderate cardinal facts for each. In nan appendix, you'll besides find immoderate specifications related to infrastructure surcharges arsenic good arsenic a snapshot of nan cardinal outcomes from nan astir caller wide complaint lawsuit successful our apical 10 states.

As Susan alluded to successful her comments earlier, for us, nan expertise to execute connected our regulatory strategies is simply a captious occurrence facet for continuing to turn our business each year. However, we cognize that customer affordability is particularly online of galore inferior investors and analysts heading into 2023, a taxable I'll speak much astir successful a fewer minutes.

Because of these concerns, we judge our constructive complaint lawsuit outcomes successful 2022 should beryllium tangible grounds of nan support we person from regulators for needed infrastructure investments to present high-quality work to our customers.

The communal thread successful each of these wide complaint cases is nan attraction connected betterment of infrastructure investments made since nan past information of cases totaling complete $4 billion, and successful immoderate states, nan rolling of acquisitions.

As we said, though, location are infrastructure mechanisms successful respective of our states that are reducing nan lag of regulatory recovery. This useful alongside our clip framework betwixt wide complaint cases of astir 2 years successful our bigger states. Turning concisely to progressive complaint cases. Our cases successful California and Missouri were revenge successful July and are progressing arsenic expected truthful far.

In January of 2023, we revenge an update successful Missouri for costs and different needed elements of nan lawsuit pinch hearings to beryllium held this month. We expect nan lawsuit to scope conclusion by nan extremity of nan 2nd 4th of 2023.

In California, we precocious applied for a Water Resources Sustainability Plan, which is an update to nan wide complaint case. This scheme requests nan continuation of a decoupling system that stems from authorities nan politician precocious signed that allows nan California Public Utilities Commission to see a decoupling mechanism.

We judge decoupling is simply a ratemaking strategy that's bully for some our customers and for nan situation because it rewards customers for conserving h2o arsenic we make investments to renew and amended our drinking h2o infrastructure.

The filing has besides been updated pinch much timely customer request estimates and to bespeak coming rates approved by nan commission, effective January 1, 2023. The exertion itself includes infrastructure renewals, wildfire mitigation, ambiance resiliency efforts and strengthening affordability programs successful summation to nan caller Water Resources Sustainability Plan.

And successful Virginia, we person a colony connected record and expect a last determination successful nan first 4th of 2023. On nan regulatory beforehand extracurricular of wide complaint cases, location were a fewer notable developments since our 3rd 4th call. Staying successful California and relating to nan Monterey Water Supply Project, successful November, nan Coastal Commission approved our desalination coastal improvement licence exertion aft galore years of organization chat and successful ray of immoderate further commitments from america to nan community.

Then successful December, nan California Public Utilities Commission issued its determination that authorizes america to participate into an amended h2o acquisition statement and addressed complaint betterment for nan associated facilities.

Subsequently, we revenge an exertion for rehearing, requesting inclusion of each infrastructure costs successful nan costs headdress for nan groundwater replenishment task description and requested AFUDC that was not included successful nan decision.

We are awaiting a ruling connected our application. American Water is committed to being a solutions supplier to nan communities successful Monterey County, some done nan advances successful nan h2o proviso task and done maintaining our existent level of operations successful nan area. Just past month, respective communities successful Monterey were impacted by evacuations owed to flooding that occurred there.

Because of our astonishing labor and reliable assets, California American Water maintained normal work to its customers during this challenging time. Finally, successful California, we're still awaiting a ruling from nan committee connected nan pending costs of superior case.

Switching gears to Pennsylvania. Last month, nan Department of Environmental Protection issued a maximum contaminant modular for 2 PFAS chemicals. Based connected our proactive testing, we've identified 1 American Water location successful Pennsylvania that requires action based connected nan caller regulations.

The curen upgrade for that installation was already successful process and is anticipated to beryllium online later this year. In nan meantime, we've taken nan contaminated good retired of work temporarily to negociate PFAS levels successful nan h2o provided to our customers and guarantee early compliance pinch nan caller regulations.

We are still awaiting nan caller U.S. EPA standards, which we expect will beryllium delivered later this year. We've already performed important testing and study crossed our systems successful compliance pinch authorities level guidance and person been acknowledged for that work, which will thief pass our action plans erstwhile nan EPA issues its standards.

For example, our Short Hill Station task successful New Jersey was completed to meet New Jersey authorities regulations and was recognized pinch nan Governor's Environmental Excellence Award successful 2020 for its activity successful h2o curen related to PFAS removal.

Broadly, we judge we are nan leaders successful nan manufacture connected this topic, arsenic evidenced by our activity pinch nan Water Research Foundation connected PFAS communications and different projects. Our investigation scientists are often invited by nan EPA, Maybrook, AWWA, and nan Water Research Foundation to speaking engagements that pass stakeholders and colleagues successful nan h2o industry.

Finally, we were honored to beryllium nan only backstage inferior invited to a caller arena astatine nan White House focusing connected reducing lead exposure, replacing some nan companies' and customers' portions of lead work lines is simply a portion of our existent superior plan.

Our extremity is to switch a important mostly of known lead work lines successful our work areas by nan twelvemonth 2030. To show nan magnitude of our regulatory execution efforts, you tin spot connected Slide 20 that we person $416 cardinal successful annualized caller revenues and rates since January of 2022.

This includes $308 cardinal from wide complaint cases and measurement increases and $108 cardinal from infrastructure surcharges. We person $181 cardinal of full annualized gross petition pending, which includes 2 infrastructure surcharge proceedings.

Throughout nan remainder of nan year, we expect to record further wide complaint cases to screen infrastructure investments and acquisitions since nan past cases. As always, execution connected these regulatory priorities is cardinal to our scheme for maturation successful nan business.

Because we make prudent investments and person skilled and dedicated labor moving connected these cases, we're very assured successful obtaining constructive outcomes arsenic we did successful 2022.

On Slide 21, arsenic I mentioned earlier, customer affordability is beforehand and halfway successful nan inferior manufacture successful 2023. One of nan astir difficult challenges we look successful nan h2o and wastewater manufacture is balancing customer affordability pinch nan magnitude of nan strategy investments that are needed.

Thankfully, arsenic we now person different afloat year's information to bespeak on, our institution is still successful a very bully comparative position successful position of affordability aliases wallet stock astatine little than 1% of median family income. We proceed to judge that our affordability proposition is an important differentiator.

And finally, connected Slide 22, I'd for illustration to item an ESG communicative that is simply a spot different than others than nan others we person shared this past year. We're proud to opportunity that American Water earns nan SAFETY Act Designation from nan Department of Homeland Security successful 2022, nan first h2o and wastewater institution to do so.

Not only is this awesome nickname of nan activity we do each time to support our labor and organization safe, but it besides gives america nan opportunity to fortify our processes and summation knowledge sharing pinch nan U.S. government.

So pinch that, I'll move it backmost complete to nan usability and statesman Q&A and return immoderate questions you whitethorn have.

Question-and-Answer Session


At this time, we will statesman nan question-and-answer session. [Operator Instructions] And nan first mobility comes from Richard Sunderland pinch JPMorgan.

Richard Sunderland

Maybe starting pinch nan equity update. I cognize you reiterated a akin connection to 3Q, but conscionable -- now that we're getting into 2023, I conscionable wanted to spot if location was thing other you could stock connected benignant of timing your connection arsenic we're into nan almanac twelvemonth now.

Susan Hardwick

Rich, acknowledgment for nan question. I'll inquire John to remark connected that.

John Griffith

Rich, nary update successful position of timing. We'll rumor nan bulk of nan $2 cardinal successful 2023. And past immoderate we don't rumor successful '23, we'll rumor successful nan backmost extremity of our 2023 to 2027 scheme period.

Richard Sunderland

Okay. Got it. Very clear. And past you noted nan stabilizing chemic costs, and I spot nan differences successful nan '23 locomotion from 3Q and past nan existent tech. But conscionable is that really nan -- looking at, I think, is simply a $0.01 revision location connected nan full range. Is that really nan alteration you're seeing versus first assumptions? I guess, what I'm really getting astatine is crossed that intention, immoderate benignant of activity wrong nan guidance scope now that you person last marks and much statement of show connected nan chemicals beforehand comparative to your first outlook?

Susan Hardwick

Yes. Rich, I'd opportunity nary alteration from what we've antecedently discussed, some successful position of our results successful '22 and expectations for '23. As we talked past quarter, beautiful successful successful nan regulatory arena to really mitigate astir of that vulnerability going into '23. And now that we vanished our pension re-measurement, arsenic John commented on, surely expect nary alteration to our guidance comparative to that issue.


Thank you. And nan adjacent mobility comes from Gregg Orrill pinch UBS.

Gregg Orrill

To follow-up connected nan equity, conscionable really does that position you for incremental acquisitions? Is location benignant of immoderate constituent of prefunding there? And past if there's a follow-up, conscionable connected nan complaint base, really did that travel successful for 2022 versus your expectation? And really does that -- if it's different, really does that effect your guidance going forward?

Susan Hardwick

Let maine return nan first -- aliases nan 2nd portion of that first. No surprises comparative to complaint guidelines arsenic we ended nan year. And again, arsenic we look retired really into this five-year period, don't expect immoderate changes from what we've antecedently shown you astir complaint base. And John, you want to remark connected nan equity question?

John Griffith

Sure. Greg, I would conscionable opportunity that nan magnitude of equity that we're raising and nan cadence of nan equity does seizure nan various scenarios that we've tally astir regulated acquisitions.


Thank you. And this concludes our question-and-answer session. The convention telephone has now concluded arsenic well. Thank you for attending. You whitethorn now disconnect.

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