Hello and welcome to the NW Natural Holding Company’s Fourth Quarter 2021 Earnings Call. My name is Lauren and I will be coordinating your call today. I will now hand you over to your host Nikki Sparley to begin. Nikki please go ahead..

Thank you, Lauren. Good morning, and welcome to our fourth quarter 2021 earnings call. As a reminder, some of the things that will be said this morning contain forward-looking statements. They are based on management’s assumptions, which may or may not occur.

For a complete list of cautionary statements, refer to the language at the end of our press release. We expect to file our 10-K later today. This teleconference is being recorded and will be available on our website following the call. Please note, these calls are designed for the financial community.

If you are an investor and have additional questions, after the call, please contact me directly at 503-721-2530. News media may contact David Roy at 503-610-7157.

Speaking this morning are David Anderson, President and Chief Executive Officer; Frank Burkhartsmeyer, Senior Vice President and Chief Financial Officer and Kim Heiting, Senior Vice President of Operations and Chief Marketing Officer.

David, Frank and Kim have prepared remarks and then will be available, along with other members of our executive team to answer your questions. With that, I’ll turn it over to David..

Well thanks, Nikki, and good morning, everybody and welcome. 2021 was a year of success for our company and we continue to build on our fundamental strengths as our gas and water utilities grew and we launched a competitive renewable natural gas business.

For 2021, we reported net income of $2.56 per share, which is an 11% increase compared to net income from continuing operations of $2.30 per share in 2020. New rates in Oregon drove results at the natural gas utility along with solid customer growth, and we saw higher revenues at our interstate storage business.

This financial growth is a product of multiyear efforts, a key focus on our long-term plan and proof that consistent progress yields positive results. We also see positive momentum in our local Portland Metro area economy. Unemployment rates in this area declined to 3.9% in December 2021 compared to 7.3% a year ago.

And single-family housing activity remains very strong. Home sales were up 10% for 2021 compared to 2020 with the average sales price up 16%. And new single-family permits issued were up 12% with multi-family permits up 37% in Oregon this past year compared to the prior period. Construction and development remain robust in our region.

This translated into over 11,000 new customers connecting to our gas system during 2021 for a growth rate of 1.5%. Our water and wastewater utilities also continue to grow. Strong residential housing construction, primarily in Idaho and Texas translated into a 3% organic customer growth rate.

We also closed four acquisitions in 2021 most notably, we’ve acquired a stake in the largest privately held water company here in Oregon. The combination of organic growth and acquisitions increased our water utility connections by nearly 30% last year.

Now a few comments on gas utility, on November 1, new rates for gas utility customers went into effect for the current heating season. That included the impacts of the general rate case we concluded in the State of Washington. Despite these increases, our customers continue to pay nearly 30% less for their natural gas today than they did 15 years ago.

And this reflects a decline in commodity costs, energy efficiency efforts and prudent expense management along with smart investments and gas storage assets that continue to reap benefits for customers. The result, natural gas continued to maintain its competitive position as a fuel of choice.

Adding to this performance benefits, natural gas enjoys up to a 60% price advantage over an electric or oil furnace for the typical home we serve.

And our customers are central to our success at Northwest Natural, that’s why I’m thrilled Northwest Natural ranked second in the West among large natural gas utilities, and the JD Power’s residential customer satisfaction study. This continues a nearly 20-year legacy of outstanding results.

I’m proud of all of our employees who make this exceptional service happen every day. And as you know, growth is not always linear and in certain years the focus will be on initiatives and set stage for future growth. 2022 for us is goodyear.

To that end 2021 and 2022 include robust CapEx plans related to crucial span for safety and reliability, technology system upgrades and cybersecurity investments. To recover these long planned project costs, we took the necessary step at the end of 2021 and filed an Oregon general rate case.

The request includes a revenue requirement increase of $73.5 million based on a 50:50 cap structure, and ROAof 9.5% and a cost of capital of about 6.7%. We filed an increase in average rate base of $294 million since the last rate case.

The Oregon Commission and stakeholders had 10 months to review the case, and we expect new rates to be effective November 1. At the same time, we continue to make progress under the landmark Oregon Senate Bill 98 legislation which supports renewable energy procurement and investment by natural gas utilities.

I’m happy to report we signed an agreement with Archaea to procure RNG on behalf of our customers in the fourth quarter of 2021. Northwest Natural also recently completed commissioning the first of four RNG projects with Tyson Foods and BioCarbN. Construction on our second facility began this month with commissioning slated for early 2023.

To-date, we signed agreements with Archaea to purchase or developing RNG on behalf of our customers, totaling about 3% of Northwest Natural’s current annual sales volume in Oregon. I am very proud of the progress we’ve made in less than two years.

To put it in perspective today, wind and solar accounted for about 11% of our total nation’s electricity supply after decades of investment. We intend to continue to take these critical steps to source more and more of our supply for renewables, knowing that our customers want a de-carbonized system and a clean energy future.

A new survey conducted by an independent leading opinion research firm showed that 77% of Oregon and Southwest Washington voters want access to all forms of energy, renewable energy, hydro, wind, solar and renewable natural gas for a balanced low carbon future.

In fact, 78% of voters value the natural gas system for its critical role in lowering emissions with both affordability and reliability and of course resiliency as top priorities. And nearly 80% of voters support local government’s efforts to encourage the use of natural gas.

Creating value across all of our businesses allowed our Board of Directors to increase our dividend for the 66 consecutive year. Our annual dividend indicated -- indicating dividend rate, it’s now $1.93 per share. We’re very proud to provide return to our shareholders and be one of only three companies on the NYSE with this record.

So with that let me turn over to Frank to give a little bit more details on the quarter and the year results. Frank..

Thank you, David. And good morning, everyone. I will begin by discussing the highlights of the fourth quarter and full year 2021 results and conclude with guidance for 2022. I’ll describe earnings drivers on an after-tax basis using the statutory tax rate of 26.5%.

As a reminder, Northwest Natural’s earnings are seasonal, with the majority of revenues and earnings generated in the first and fourth quarters through the winter heating months.

For the quarter, we reported net income of $40.5 million dollars or $1.32 per share, compared to net income of $45.8 million or $50 from continuing operations for the same period in 2020. The decrease in net income over last year was driven by results in our gas utility which posted a $0.15 per share decline in earnings.

The other businesses posted a $0.03 per share decreased in earnings driven by higher business development costs. Lower earnings at the gas utility were primarily related to higher operations and maintenance and depreciation expenses partially offset by new rates in Oregon and Washington.

Utility market in the gas distribution segment increased $4.5 million as a result of the new rates and customer growth. Utility O&M increased $5.7 million, reflecting higher levels of expense for payroll and benefits, contractor and professional services and information technology upgrades.

Utility depreciation in general taxes increased $1.6 million due to higher property, plant and equipment as we continue to invest in our system.

For the full year 2021, we reported net income of $78.7 million or $2.56 per share, compared to net income from continuing operations at $70.3 million or $2.30 per share for 2020.This $0.26 per share increase was driven by both the gas utility which contributed an additional $0.16 and our other businesses that contributed an additional $0.10 per share.

Higher earnings at the gas utility were primarily related to new rates in Oregon and Washington along with customer growth. Utility margin increased $30.7 million, as higher customer rates and customer growth contributed $30.9 million.

This was partially offset by a loss from the gas cost incentive sharing mechanism as we purchased higher price gas during the February 21 cold weather event.

Utility O&M increased $14.2 million driven by higher employee compensation and benefit costs, lease expenses for our new operations and headquarters building and higher costs related to information technology system upgrades. Depreciation and general taxes increased $9 million.

Net income from our other businesses increased $3 million, largely due to higher asset management revenues from the cold weather event in February.

For 2021, cash provided by operating activities was $160 million, an increase of $15 million compared to last year, we invested $300 million into the business most of which was for the gas utility capital expenditures. Our balance sheet remains strong with ample liquidity.

Moving on to 2022 financial guidance, gas utility capital expenditures for the year are expected to be in the $310 million to $350 million range, including significant projects related to system reinforcement and technology upgrades.

These capital investments coupled with higher forecast expenses from technology and payroll supported our decision to file the Oregon rate case with rates effective in November of this year. Consistent with these business drivers, the company initiated 2022 earnings guidance today for net income in the range of $2.45 to $2.65 per share.

Guidance assumes continued customer growth, average weather conditions and no significant changes in prevailing regulatory policies, mechanisms or outcomes were significant changes in laws, legislation or regulations. We continue to see solid long-term growth in our natural gas and water utilities.

And as discussed last quarter, we’ve launched our competitive renewable natural gas business. As a result, we are now targeting long-term earnings per share growth rate of 4% to 6% from 2022 to 2027. With that, I’ll turn the call back over to David..

Well, thanks, Frank. This past year, we made significant progress on our business strategy. Our focus moving forward is clear maximizing returns from our strong and growing regulated gas utility and positioning our business for incremental long-term growth by investing in water utilities, and the competitive renewable natural gas business.

We will keep our focus on the future making sound investments today to ensure sustainable growth for tomorrow. And to that end, we released our destination zero scenario report for the gas utility in November last year. This report illustrates different possible scenarios to transform into a provider of carbon neutral energy by 2050.

Kim Heiting our Senior Vice President of Operation will touch on the details of this work in a minute. But central to it is our belief that a diversified energy system is more affordable, more reliable, and importantly, more resilient. Events in Texas and California are stark reminders of like two energy systems are better than one.

The electric and gas systems depend on each other to serve our communities. And each system provides different benefits. In fact, by their nature, each system complements the other and hedges against certain risks. With wires above ground delivering renewable electrons and pipes below ground delivering renewable molecules.

This diversification helps us effectively meet different energy needs, and will be even more important going forward as climate change and the potential for more severe weather post new risks. With that, let me turn it over to Kim to give a little bit more details on the report and the announces. Kim..

Thanks, David. Our destination zero analysis is the next evolution for us and builds up for 2016 carbon savings goal for our customers use and the 2019 study we commissioned with the environmental consultant E3. That study analyzed effective pathways for the region to achieve the climate recorded reduction targets by 2050.

Since then, we’ve continued to build on our internal carbon modeling capabilities, and evaluate new developments that allow us to evolve our thinking about the possibilities for our system.

In this new work, we evaluated multiple scenarios with technologies that exist today, some of which are further along the development path in Europe, but all of which are considered viable tools that we are either actively pursuing or evaluating now.

The three scenarios we modeled is both supply and demand side levers designed to achieve carbon neutrality for the emissions associated with our sales, customers synergies and future customer growth.

All of them use varying levels of renewable natural gas, clean hydrogen, synthetic gas, and enhanced energy efficiency including gas heat pumps and hybrid heating systems as well as the conservative level of offsets and carbon capture.

We use different assumptions to tackle these components to stress test our ability to achieve carbon neutrality under different conditions and views of future technology adoption and availability of renewable supply.

We believe the most likely scenario will be a combination of activities that make usage more efficient, and also reduce the carbon intensity of the energy we deliver. And of course, all scenarios rely on the adoption of supportive policies over time to lower costs for technology innovations like renewable or clean hydrogen.

Driving that policy support is the focus of Northwest Natural and our industry going forward. While our analysis in modeling continues to evolve as we progress through this transition.

Our views of the future remains consistent, which is a transformed gas system, distributing renewable molecules, enabling our region’s ability to achieve its ambitious climate goals in a reliable, resilient and more affordable way..

Well, thanks, Kim. I’m very proud of our team and their efforts and under Kim’s leadership, we’re in great place there. I believe this is one of the first in-depth de-carbonization scenario reports by gas utility, and it’s a critical planning tool that helps us continue to make progress in addition to moving our gas utility towards a renewable future.

Last year, we also launched a competitive renewable natural gas strategy and formed a new non-regulated subsidiary Northwest Natural renewables. By forming this new organization, we are committed to leading the energy transition in providing renewable natural gas to the utility, commercial, industrial and transportation sectors.

We’re focused on providing cost effective solutions to help these sectors de-carbonize using existing waste streams and renewable energy resources. As you know, we’re in the beginning of a historic energy system transformation. And we’re confident the demand for renewable fuels is going to continue to grow.

We project a substantial increase in renewable natural gas demand and the voluntary and compliance driven targets instituted by states in utilities. We see promising investment potential in RNG and believe we’re well positioned to help fulfill this need, as aligned with our core competencies and as a natural extension of our sustainability efforts.

We’re also an attracted counterparty for developers and feedstock owners seeking a reliable long-term strategic partner. Most RNG projects are sized right for us to effectively transact and to provide meaningful growth in cash flow.

And as you know, we’ve already taken our first steps with a 20-year RNG supply agreement and a total $50 million investment. I’m excited to announce that as of the end of January, Mike Kotyk joined our team to lead our competitive RNG efforts.

Mike brings more than 25-years of experience in this sector, and I know we’re ready and resourced to pursue these opportunities. In conclusion, we intend to remain disciplined and focus as we assess other RNG investments to support the energy transition, and provide additional earnings and cash flow growth for the company.

Turning to our water utility business, since announcing our initial transaction four years ago, we’ve solidified our water strategy and increased the number of customers we serve fivefold through nearly 20 acquisitions across four states. And we’re not stopping there.

Last year, we signed purchase agreements that were more than doubled our total number of connections. And most notably, we signed our largest acquisition today to acquire Far West Water and wastewater utilities in Yuma, Arizona, which serves approximately 25,000 customers.

I’m pleased to expand into our fifth state and in a region that is fast growing. The acquisition subject to regulatory approval is expected to close in the fourth quarter of this year and be accretive to earnings per share after its whole first full year of operations.

Just this month, we also announced additional agreements to acquire two water utilities near our existing systems in Texas.

And central to the water utility business is strong in collaborative relationships with regulators and we’ve been pleased with their support to consolidate this fragmented industry finally, approval of acquisitions and recovery for proven investments for safety and reliability.

We remain excited about the investment potential for this business and we look forward to more announcements soon. So in conclusion, your company is financially strong, and I’m pleased with the opportunities the renewables and water sectors have allowed us to increase our long-term earnings per share growth rate of 4% to 6%.

We intend to continue working on your behalf to pursue sustainable growth. Thanks for joining us this morning. With that Lauren, I think we’re ready to open it up for questions..

Thank you. Our first question comes from the line of Julien Dumoulin-Smith from Bank of America. Julien, please proceed..

Hi, this is actually Cody Clark on for Julien. Good morning..

Good morning..

So first wondering if we can talk a little bit more about the CapEx update and what’s driving the increase there? Are the main drivers really around customer growth, continued pipeline replacement or is there other factors that you would call out? And also, what are you forecasting for customer growth through the course of the plan?.

Hi, Cody, it’s Frank. Yes, great question. So midpoint-to-midpoint from guidance, we’ve got about $300 million more in our forecast for CapEx. There is three key drivers of that part of it safety and reliability, we’ve got some reinforced system reinforcement and some gas storage work that needs to be done some inline inspection, etcetera.

That’s about a third of it, a little bit more than a third of it. We’ve also got some increased IT spend primarily around our customer information system, which we’ve known need to be updated. It’s over 20 years old, we’ve got to get our current SAP system updated.

But now that we’re nearly through that we put this into our plan for the next five years. And that’s about a third that along with some cybersecurity spend, is about a third of it. And then the balance of it is renewable natural gas projects that are in our pipeline.

And for the gas utility, we’re really have quite a bit of confidence around getting into the business. So those three things add up to about 300 million of increase. On the customer growth side, we finished last year at 1.5%.

We think when we come out of this unusual economy, that’ll be up just a little bit, we’ve got about 1.5%, 1.6%, in our long-term growth plan for customer..

Okay, understood, that’s very helpful.

And then, curious if you can frame where you sit within the 4% to 6%, long-term EPS guidance range, what will push you to the top or the bottom of that range? And just curious if they’re incremental investments that are not currently contemplated in the updated plan?.

Yes, another good question. We have a lot of confidence always in the next few years on our capital, and we only put in things that have line of sight.

So we do see over time that as we roll forward into those future years, we get a little bit more clarity on things that we’re comfortable, or we get them into our IRP, and we’re comfortable putting them into our forecast. So there’s always some potential upside in the gas utility there also with renewable natural gases in the utility as we do that.

I think the other area is, we’ve been adding to our water portfolio, and we’ll continue to see opportunities to invest there. And then on the competitive renewable business, obviously, there’s opportunities for further growth there.

What we’ve got in that business right now is what we’ve already got with the EDL arrangement in the business around that, but I can see some further growth there down the line..

Okay, got it. Thanks so much. I’ll jump back in the queue..

Thanks, Cody..

Our next question comes from the line of Chris Ellinghaus from Siebert Williams. Chris, please go ahead..

Hi, Chris..

Hi, everybody. David, this RNG strategy is very interesting.

Have you got any benchmarks or targets that you want to talk about in terms of what kind of scale or kind of capital you might like to deploy in that business?.

Yes, that’s a good question, Chris. And obviously, we’re in the early days, I think, frankly, very similar to the conversation we had on water four years ago, we would not have gotten into this business if we didn’t think we could reach some kind of scale.

Not really ready yet to put mile markers or milepost out there on we’re going to be ex-size at this date or anything but what I am seeing as an a very attractive investment opportunity, we just hired Mike Kotyk, he is new President of this renewable business for us.

So he is currently staffing up and he is polishing off the business plan and so I’ll have a little bit more belief on what he thinks he can achieve in the coming periods.

But obviously, we feel good enough about it to where Frank and I and the team felt we could raise the earnings guidance for three to five to four to six over the long-term, and that’s the RNG where you’re considering additive, it’s not filling any holes, it’s additive to the portfolio.

So give us a little bit of time, Chris, we’ve executing on one agreement, I think we need to execute on a couple more. And that could be contracts like we did this time, I think development is definitely in the works to develop, it takes a little bit longer to work out, like our Tyson project that we’re doing in the utility.

But I really see an excellent opportunity in this space, both from opportunity for us to invest. And I think what’s important about that these are opportunities to invest based on our size, they’re not beyond our reach, again, very similar to the water platforms.

And then, I just believe the demand characteristics are going to remain incredibly strong if not increasing..

So, the 1% increase to the growth rate, can you just sort of talk about how that breaks down in your on -- the increase in the utility CapEx versus the expansion in the RNG strategy? Where did that 1% come from principally?.

Hey Chris, its Frank. I would split it between those two, just in general, there’s 300 million more of CapEx, obviously driving rate base growth, which is leading the incremental earnings.

The RNG is making up most of the rest of it, but also the Far West transaction is bringing earnings into the business that weren’t there when we did earnings last year. So it’s really all three parts of the business. But I’d say the rate base in the RNG are the key drivers of that that would have brought it up.

I’m not sure Far West alone would have done it, but it’s additive, of course, as well..

Okay. Frank, you’ve added to the CapEx and you’re launching this RNG strategy, which I presume, ultimately you’d love to spend a lot of money on, in addition to the water acquisitions.

Have you got any thoughts about equity requirements going forward for what you envision for your plan?.

Yes. Well, of course, this capital and the 300 million at the utility and 80 plus in Far West it is adding to our capital needs as we’ve been, we’d like to be real clear, we want to manage this company. We are at the core utility.

We’d like to stay close to a 50:50 capital structure throughout the business that can fluctuate a little bit, but so we’re going to need both debt and equity over this plan and some of this capital is front-end loaded. So we will need to raise capital.

But you know, we’re never too specific on particular timing or exact amounts, Chris, but we do like to be transparent that when you’re growing the business like we are, we will need capital..

Okay.

And, Frank, aside from the technicality of becoming a reportable segment, have you got any thoughts on starting to provide some more detailed disclosure on the water business as it’s as it’s growing?.

Well, we’ve had great success this last year, and of course, we’ll close it this year, which will double the size of that business we’re getting there, David has kind of said a few times that, we’re looking, we’d like to get 500 million or so invested in this business over the five-year plan.

And I think you’re getting to the point where you’ve got enough in that segment that, we’re probably going to have to start talking a little bit more about the earnings, breaking that out. And again, as we have the renewables business growing, we’ll expect to provide some detail there.

Other than that, we do have kind of a 10% of net incomes or threshold typically or assets that we will start looking at it breaking that out, but on the water, we’re still not quite there. But let us get Far West closed. And that’s not the end of our dreams in that business. I think we see a lot of opportunity in our water pipeline right now.

The business development team has been busy. And we’ll expect to keep growing that and as it becomes more and more material, we will have to, we know we’ll need to disclose some more about that. We’re not quite to scale here. And we’d like to get a little closer to that as that comes through..

And one last thing, Kim, you talked about synthetic gas? Can you just elaborate on the synthetic gas that you sort of put into your calculus there?.

Yes, I think one of the reasons, certainly we have a lot of excitement around hydrogen is just the flexibility and the ability to leverage our systems. So as we’ve talked about before, we’re obviously looking at blended hydrogen right into our system up to a certain percentage.

And dedicated hydrogen systems down the line, especially for industrial use. But there’s also this sweet spot in the middle, which is synthetic gas or methylated hydrogen, when you take potentially renewable electricity, you create renewable hydrogen, and then you add waste CO2 from an industrial process, or maybe even power generation emissions.

And you can turn it back into a gaseous form. And they call that synthetic gas or methylated hydrogen. And the beauty of that is that you can flow that directly into your pipeline system, not unlike as RNGs. It’s interchangeable than with a conventional natural gas molecule.

So there’s no blending limits, you can put it in your storage, leveraging that long duration storage, asset and benefit in the gas system. It is one more step. So it adds a little bit of cost. But when we’ve been doing some evaluation of that it scales, we think it can be cost competitive with RNG.

And so we’re certainly looking at all those applications of hydrogen, but that’s the synthetic gas piece..

Okay, thank you, everybody. Appreciate the details..

Thanks, Chris..

Our final question comes from the line of Selman Akyol from Stifel. Selman, please go ahead..

Good morning, Selman..

Good morning. Let me just follow up on that on that last question.

When you’re talking about the methylated gas, does that require any incentives from the government in order to make that work? Or are you guys seeing that economics can be done on their own without any subsidies, so to speak?.

Well, some of the analysis we’ve done if you can get it to scale, right, if you can -- and the benefit of methylated gas or synthetic gas is that you can cite the electrolyzer at a big renewable energy facility like say a big wind farm and so the opportunity there is you could get it to scale.

And when we’ve done the analysis it in our view, it can be close to what some of the RNG is coming in at now.

That said, I think our view is that we are going to have an industry and an as an energy -- throughout the energy sector we’re going to need incentives from the federal government to drive the cost down of hydrogen and all these different applications and I don’t think we’re alone in the gas business.

I think we’re hearing that from our electric friends and also from transportation. So not only do we believe that that will enable and development much quicker, but we believe that’s a growing recognition at the federal government level..

Yes. And Selman AGA has been very actively, even my role last year as Chair working on the hill, even with the Secretary of Energy and there is a recognition that hydrogen, I think her words were in, we need to have a moon shot on it.

And so I think all of these, if you want, if you’re really serious about de-carbonization and addressing climate change, it’s our belief, it’s an all of the above strategy.

And the federal government’s got a role here, including state governments, frankly, to support the transition, frankly, like we did, when I started my career in the age with wind and solar, we wouldn’t be where we are within those two asset classes without the stimulus that was provided to make that happen. So I think it’s a big piece of it.

But I also think, as Kim indicated, I think this is moving forward anyways, and it’s competitive with our renewable natural gas, if you can get the scale she’s talking about..

Great, thank you for that. On the topic of RNG, you guys know that you’re now up to about 3% of your sales being in RNG.

Can you talk about the growth rate of that? And so a year from now, can you say what percentage you think you might be looking at? Is it just the sales? So to three grow to five, does it grow to four? Does it grow to six?.

Yes, this is Justin Palfreyman. I’m happy to take that question. Under SB-98, which is our RNG enabling legislation, we have right now a 5% sales volume target by 2025 that increases to 10%.

So that’s really what we are tracking to in terms of our internal projections and the work that our renewables team is doing both procuring and investing in RNG that could evolve as other policies evolve in at the state and potentially at the federal level.

And as we look at longer term including our 2050 vision, we see getting to much higher levels of renewables. And we are very optimistic that we’re able to execute on that..

Got it. And then just last one for me here on a $50 million investment with EDL.

Can you guys talk about your expected returns for that?.

Hey, Selman, it’s Frank. Good to hear from you. Yes, we have a an expectation that in this segment, we can get 10%, north of 10% IRRs are non-regulated RNG investments unlevered..

Got you. So you think of that as and I know David kind of refer to is still kind of spooling up waiting to see the business plan.

Is that 10% of this investment or would that be 10% once you guys achieve some sort of scale?.

Yes, that would be off of this. And so as we look at incremental investments, if you move the hurdle that we would look to cross to make that investment. So no there’s no scaling involved for that..

Got it. Thank you very much..

You’re welcome..

Thanks, Selman..

We currently have no further questions. So now hand back over to David Anderson for any closing remarks..

Well, thank you, Lauren. And thank you, everybody, for joining us this Friday morning. Obviously, if you have any further questions or detailed questions, please reach out to Nikki you have her number and she’ll be happy to help you out. With that have a great weekend. And Lauren will shut the call down. Thanks, everybody..

This concludes today’s call. Thank you for joining. You may now disconnect your lines..