U.S. Markets closed

Edited Transcript of NWN earnings conference call or presentation 2-Aug-17 3:00pm GMT

Thomson Reuters StreetEvents

Q2 2017 Northwest Natural Gas Co Earnings Call

PORTLAND Aug 12, 2017 (Thomson StreetEvents) -- Edited Transcript of Northwest Natural Gas Co earnings conference call or presentation Wednesday, August 2, 2017 at 3:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Brody J. Wilson

Northwest Natural Gas Company - VP, Treasurer, CAO & Controller

* David A. Weber

Northwest Natural Gas Company - CEO & President of Nw Natural Gas Storage LLC and CEO of Gill Ranch Storage LLC

* David H. Anderson

Northwest Natural Gas Company - CEO, President and Director

* Frank Burkhartsmeyer

Northwest Natural Gas Company - CFO & Senior VP

* Kimberly A. Heiting

Northwest Natural Gas Company - CMO and VP of Communications

* Nikki Sparley

================================================================================

Conference Call Participants

================================================================================

* Spencer Everett Joyce

Hilliard Lyons, Research Division - Analyst for Natural Gas and Water Utilities

* Tate H. Sullivan

Sidoti & Company, LLC - Research Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good day, and welcome to the Northwest Natural Gas Second Quarter 2017 Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Nikki Sparley. Please go ahead.

--------------------------------------------------------------------------------

Nikki Sparley, [2]

--------------------------------------------------------------------------------

Thank you, Brian. Good morning, everyone, and welcome to our Second Quarter 2017 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 listing of our cautionary statements, you should refer to the language at the end of our press release and also our SEC filings for additional information.

We expect to file our 10-Q later today.

As mentioned, this teleconference is being recorded and will be available on our website following the call. Please note, these conference 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. Media may contact Melissa Moore at (503) 220-2436.

Speaking this morning are David Anderson, President and Chief Executive Officer; and Frank Burkhartsmeyer, Chief Financial Officer. David and Frank have some prepared remarks, and then will be available along with other members of our executive team to answer your questions. With that, I will turn it over to David for his opening remarks.

--------------------------------------------------------------------------------

David H. Anderson, Northwest Natural Gas Company - CEO, President and Director [3]

--------------------------------------------------------------------------------

Thanks, Nikki, and good morning, everyone. I'll start the day with highlights from the quarter and then turn it over to Frank to cover our financial performance for the quarter and the year-to-date period. Finally, I'll wrap up the call with an update on our North Mist Gas Storage Expansion Project.

The company continues to be financially strong and operate well. This year, net income has increased $4.4 million compared to last year. The utility reported solid results with another quarter of strong customer growth on the back of population growth in our region. The good economy, continued conversions and greater success in the multifamily sector led to 12,700 new customers connecting to our system. The region's economy continues to strengthen. In June, Oregon's employment growth rate was the 5th highest in the nation and unemployment was only 3.7%, just 10 basis points above the record low we experienced a month ago in May.

The area's growth trend is expected to continue. Portland city planners anticipate an additional 260,000 residents over the next 20 years, bringing Portland's population to approximately 880,000 people. About 140,000 jobs are forecasted to be added in that same time period. Currently, the Portland area is experiencing a 10% increase in average home prices over the last 12 months compared to the prior period, despite home sales that were down about 5%. We are seeing similar trends in our Washington service territory where home prices increased 12% year-over-year and home sales were up about 2%. Limited housing inventory is creating a push for new construction, both single-family homes and multifamily units, which should prove beneficial for Northwest Natural.

Over the last 12 months, permits increased 5% in the Portland, Vancouver area, signaling construction remains strong on the heels of a very healthy 2016. And these trends translated to a growth rate of 1.8% in terms of customer growth. We saw an increase in all customer sectors with a steady stream of conversions and an increase in new single-family homes. But growth may not always look like it does today. The city of Portland is planning for greater urban density, likely meaning more high-rises and multifamily developments in the future. That is why we have been working very hard on breaking into the multifamily sector, a sector historically underserved by natural gas. We have launched a comprehensive effort to make inroads in the multifamily market with a focus on making it easier for developers to build with natural gas. And we've made very good progress, using a combination of equipment incentives, streamlined gas infrastructure designs and promotional support.

In July, we took another key step to better serve this sector when the Oregon Utility Commission approved a new multifamily tariff, specifically designed to make it easier for mixed-use buildings, buildings with both commercial and residential customers, to install natural gas.

Overall, I am very proud of the progress we've made to date in the multifamily sector and look forward to further serving this growing segment over time.

I would like to say how pleased I am to have Frank join our executive team in May as CFO. Frank comes to Northwest Natural with a wealth of experience in the energy industry and an impressive and varied career and has already made a great addition to the team. I would also like to thank Brody for all of his good work as Interim CFO these last months. And congratulate him, again, on his promotion to Vice President and Treasurer in addition to his roles as Controller and Chief Accounting Officer.

With that, let me turn it over to Frank to cover the financial results. Frank?

--------------------------------------------------------------------------------

Frank Burkhartsmeyer, Northwest Natural Gas Company - CFO & Senior VP [4]

--------------------------------------------------------------------------------

Thank you, David, for the kind words, and good morning, everyone. I'll start with a review of quarter and year-to-date results and wrap up with cash flows and 2017 guidance.

First of all, I'd like to remind you that our earnings are seasonal with approximately 70% of our utility margin generated during the cooler first and fourth quarters. In addition, please note, I will describe individual earnings drivers on an after-tax basis using a statutory tax rate of 39.5%, which is very close to our effective tax rate of 39.9% for the 6 months ended June 30, 2017.

Turning to results. For the second quarter of 2017, we reported net income of $2.7 million compared to $2 million for the second quarter of 2016, an increase of $700,000. Results for the quarter reflect a $1.6 million increase in our utility segment net income, partially offset by a $700,000 decrease in the gas storage segment. The utility's second quarter performance reflected a $3.1 million increase in margin from customer growth and cooler weather in 2017. Offsetting these favorable variances were higher O&M expenses from increased payroll and benefit costs. Our gas storage segment net income for the quarter decreased $700,000 mainly reflecting lower asset management revenues from our Mist facility. As you may recall from the first quarter, our Mist facility is contracted at comparable prices to prior years for the 2017, '18 gas storage year.

At our Gill Ranch facility, we contracted half the facility under firm contracts at slightly higher prices than the prior year. We have allocated the other half of Gill's capacity to our third-party marketer and that pricing is subject to market conditions.

Turning now to year-to-date financial results. For the first 6 months of 2017, we reported net income of $43 million compared to $38.7 million for the same period last year, an increase of $4.4 million. Results were driven by a $6 million increase in the utility's net income, partially offset by a $1.4 million decrease in our gas storage segment. The utility's results reflected a $6.4 million increase in margin and a $2.1 million increase in other income. The $6.4 million increase in utility margin reflected the strongest customer growth rate since 2007 and the effects of a comparatively colder winter in 2017. Margins are largely stabilized from variability and weather, however, weather can affect the margin as we do not have a weather normalization mechanism in Washington and a portion of our Oregon customers have opted out of this mechanism.

So far, 2017 has been colder than 2016 in our service -- and our service territory experienced 12% more heating degree days than average along with record-breaking precipitation. This compares to 2016, which was 22% warmer than average. Offsetting these positive margin factors were lower gains from our gas cost incentive sharing in Oregon. The company and customers continued to benefit from lower actual costs than prices set in rates, although the spread has narrowed this year. Also impacting the utility was a $2.1 million increase in other income, mainly due to a noncash charge taken in 2016 as we closed the environmental cost recovery docket. These items were partially offset by higher O&M and depreciation expenses.

Turning now to the gas storage segment. For the first 6 months of 2017, net income in this segment decreased $1.4 million, reflecting lower asset management revenues from Mist as well as higher expenses at Gill Ranch for pipeline and compressor maintenance. Looking forward for the Gill Ranch facility, we are closely evaluating the draft gas storage regulation for California Division of Oil, Gas, and Geothermal Resources, or DOGGR, published in May. We are participating in the finalization of those rules and expect them to be issued in the second quarter of 2018.

Moving briefly to cash flows. During the first 6 months, the company generated $194 million in operating cash flow. We reinvested those proceeds back into the business with $94 million invested in capital expenditures and we've reduced short-term debt by $53 million.

Moving to 2017 financial guidance. We continue to forecast accrued capital expenditures in the range of $225 million to $250 million for 2017, including the expected $80 million to $90 million of spend for our North Mist expansion, of which, we have recorded $55 million in the first 6 months. The company reaffirmed 2017 earnings guidance today in the range of $2.05 to $2.25 per share. Guidance assumes customer growth from our utility segment, average weather conditions, slow recovery of the gas storage market and no significant changes in prevailing regulatory policies, mechanisms or outcomes, or significant laws or regulation.

With that, I'll turn the call back over to David for his concluding remarks.

--------------------------------------------------------------------------------

David H. Anderson, Northwest Natural Gas Company - CEO, President and Director [5]

--------------------------------------------------------------------------------

Thanks, Frank, and finally, this morning, let me give you a brief update on our North Mist Expansion Project, a very major project for the company. As we've discussed many times before, the North Mist project will support greater reliability by supplying innovative, no-notice gas storage services to our local electric company Portland General Electric that can be drawn on, frankly, at any time, allowing them to balance the variability of additional renewable power on their electric system via the Port Westward power plant that they own and run. The estimated cost of North Mist continues to be estimated at around $128 million, and includes development of a new reservoir at the Mist facility, a compressor station and a dedicated 13-mile pipeline to their facility.

We continue to expect the majority of the construction and the dollars to be spent and completed this year. To date, we have completed drilling all the wells. The compressor station is currently being manufactured and we expect it to be installed later this fall. Meanwhile, we continue construction on the pipeline from the North Mist facility to the Port Westward electric generating facility, and expect that also to be completed later this fall. The project is on track to be in service for the winter of 2018. When the expansion is placed into service, the investment will immediately be rate based under an established tariff schedule already approved by the Oregon Public Utility Commission.

I am proud of our progress so far this year and confident we will be able to continue executing on the opportunities that lay in front of us. As always, we remain focused on serving customers, working with policymakers to further the needs of our communities, and of course, creating value for our investors. Thanks, again, for taking the time to join us this morning.

And with that, Brian, I think we're open to questions, please.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) The first question comes from Tate Sullivan with Sidoti.

--------------------------------------------------------------------------------

Tate H. Sullivan, Sidoti & Company, LLC - Research Analyst [2]

--------------------------------------------------------------------------------

David, can you talk more about the multifamily tariff you mentioned approved in July. Is it a tariff per unit? Is it for the whole building? Is it up from the previous rate? Or what changed in general?

--------------------------------------------------------------------------------

David H. Anderson, Northwest Natural Gas Company - CEO, President and Director [3]

--------------------------------------------------------------------------------

Let me kind of start here and then I'll get our Chief Marketing Officer on here, because I think it's important that you understand how the mechanism works. When you look at that 12,000 customer number I gave you back, about a little over 1,000 or almost 1,100 come from that multifamily sector. So it's been a good addition to growth, and one of the reasons we've really tackled this is, obviously, to address a growing segment of our area. Frankly, this has lower margins so it's going to provide additional margin to the company but it's not a huge gainer at this point in time. But what's important about that is tackling the segment because these are the individuals that will likely in the near future or long-term future be buying single-family houses, which is our bread and butter for growth. Because what we -- a lot of our research shows that once people have exposure to natural gas, they want it for the rest of their lives. So there's a multifaceted benefit from this. And the biggest issue we had was the first cost of hooking up these multifamily dwellings, and it's a little bit of a paradigm shift for the builder community. I think as you know, when you look at the higher-end multifamily segment, if you will, condos and things like that the developers are usually wanting to put gas in. It's when you start going down to apartment buildings and things like that where first cost is incredibly important. And it was -- frankly, it was a negative influence on them putting gas in the building. So if we could take that, that first cost away from them, we knew that we could probably change their mind and get that access. We also did some research that showed on renting they could probably charge about $25 more per month for a gas-fueled apartment. So there was also some other items we did. But let me turn it over to Kim. I kind of gave you the background. I haven't answered your question yet, but it was important for you and the others on the phone to understand contextually why we tackled this. And it's a positive and it'll provide additional margin. But it might be good to understand how -- what the Oregon PUC approved and how that tariffs in place. So I'll turn it over to Kim Heiting to answer, specifically, your question.

--------------------------------------------------------------------------------

Kimberly A. Heiting, Northwest Natural Gas Company - CMO and VP of Communications [4]

--------------------------------------------------------------------------------

To build off what David was saying, we know that piping to the apartment is a barrier for the developer in terms of first cost. So under our new tariff, Northwest Natural can invest $750 per unit to offset that first cost to install piping to those units. The developer receives the money up front and we capitalize the cost as a regulatory asset and earn our regulated return. We recover those costs through a low -- monthly fixed bill to the tenant of a little over $10 a month. So again, as David said, this allows us to not only potentially get into new projects, but also build on the projects we're already serving with boiler load and commercial load, retail space or restaurant.

--------------------------------------------------------------------------------

Tate H. Sullivan, Sidoti & Company, LLC - Research Analyst [5]

--------------------------------------------------------------------------------

While I have you, Kim, is the multifamily opportunity -- is it all new build or is there any conversion opportunity of existing multifamilies?

--------------------------------------------------------------------------------

Kimberly A. Heiting, Northwest Natural Gas Company - CMO and VP of Communications [6]

--------------------------------------------------------------------------------

It's difficult in the conversion market for multifamily because of the cost. We did have a couple of projects over the last couple of years. Surprisingly, they converted out wood fireplaces to gas fireplaces. But I think those will be niche opportunities. The lion share of the growth will come from new constructions. Right now, over the next couple of years, we're tracking over 400 projects right here in our service area. So a lot of opportunity, and again, we're excited to have another tool to bring to bear on the market.

--------------------------------------------------------------------------------

Tate H. Sullivan, Sidoti & Company, LLC - Research Analyst [7]

--------------------------------------------------------------------------------

Great. A detail-oriented question on multifamily. Will that be when you break out your customers in your Q? Are they -- those commercial customers versus residential?

--------------------------------------------------------------------------------

Brody J. Wilson, Northwest Natural Gas Company - VP, Treasurer, CAO & Controller [8]

--------------------------------------------------------------------------------

This is Brody Wilson. They will show up as residential and be included in that line. To the extent that they did become more material over time we may look at potentially breaking them out, but at this point, those would largely show up as residential. Again, Kim did mention that most of these multifamilies also come with a commercial meter, which would flow under the commercial line item.

--------------------------------------------------------------------------------

Tate H. Sullivan, Sidoti & Company, LLC - Research Analyst [9]

--------------------------------------------------------------------------------

And then, David. If you could -- or anyone that can talk about your upcoming dividend. I think in the last 2 years that you've increased it in the third quarter. I don't know if that's a long-term track record of the timing. But do you look at your payout ratio based on a normalized weather or post-Mist or how do you evaluate the dividend potential increase?

--------------------------------------------------------------------------------

David H. Anderson, Northwest Natural Gas Company - CEO, President and Director [10]

--------------------------------------------------------------------------------

Obviously, the Board of Directors is the entity that will, ultimately, make that decision. And I think, as you know, this company is incredibly proud of its dividend record. I think we're the third longest dividend increase record on the dividends paid basis on the New York Stock Exchange. So I think that's a, clearly, a motivator both for this management team to continue to increase earnings, but also for this board to look at the payout of those earnings going forward. I will tell you that we tend to look at it on a yearly basis. In the last few years that has been in the third quarter. I don't know if I would etch that as a trend, but it would be our indication to look at it. I think when you talk about payout ratios, we're a little higher than our stated range -- we've been fairly public, of 60% to 70% over the long term. We're a little bit higher than that right now, but of course, as you look forward in terms of our earnings growth and profile, we would hope that, that payout ratio would come down, especially, with the North Mist project and things like that. So I think what you've seen over time, Tate, is when we were below the 60%, you probably had a little bit higher dividend increases. And when we've been above the 70%, which has been the last 3, 4-plus years, those increases have been smaller. But our idea is to continue to grow this. That would be management's intent over the long term. So some years could be slower. Some years could be faster. But at this point, that's a board decision and we'll look at it later this year.

--------------------------------------------------------------------------------

Tate H. Sullivan, Sidoti & Company, LLC - Research Analyst [11]

--------------------------------------------------------------------------------

Last for me. On the progress of your current Mist project, it sounds like most of the construction will be done this year, but then it's all the way another year, or 8 months that you'll actually start getting paid for it? Why that gap?

--------------------------------------------------------------------------------

David H. Anderson, Northwest Natural Gas Company - CEO, President and Director [12]

--------------------------------------------------------------------------------

Let me give you just a little bit background. If we get a little bit deeper, I'll have Dave Weber, here, kind of go through some operational issues with you. Right now, the compressor station is being built off-site. And as I call it, it's like an erector set. They're building it. They'll disassemble it and take it up to our location and build it. That's probably not -- it's a critical path but I wouldn't consider it a true critical path for the project. The most critical path for the project is the 2018, 2019 winter and service date of the pipeline construction. And we're right in the middle, right now, of directional drilling and putting that pipeline in place. That appears to be going fairly well and we need to get that done now, Tate, because I think as you know, you've been to the Northwest. We start getting rain in the September or October time period, so we need to get it done during this construction window. So that's the most critical path item that could affect the overall schedule of the project. Regarding your specific question, when we get all this done later this year, then you'll start the process of, obviously, testing the facility but more importantly, filling the reservoir and putting operational characteristics in place like that. And that will take most of next year. If you get this in the fall and you get the operation, the facility up and running, knock the kinks out of it and that's why it won't be ready until the winter of '18. And that's when it goes in service. And so to you revenue question, that's specifically when the billings to -- it's already under -- it's being rate based. It's already under a tariff schedule. That's when we can start charging PGE the tariff, which starts the cash flows and then also starts the earnings. Of course, as you know right now, there's AFUDC earnings on the expenditures. But that's when it would look more like an in-service regulatory -- an in-service rate-based item. Does that make sense?

--------------------------------------------------------------------------------

Tate H. Sullivan, Sidoti & Company, LLC - Research Analyst [13]

--------------------------------------------------------------------------------

Yes. I mean, filling the reservoir. I imagine, okay -- it would -- I mean, what time period are we're talking? I guess you're implying 6 to 7 months to do that after the testing?

--------------------------------------------------------------------------------

David H. Anderson, Northwest Natural Gas Company - CEO, President and Director [14]

--------------------------------------------------------------------------------

This is Dave Weber who runs our gas storage and is the lead on this project. Why don't you give a little bit more detail on the operational issues.

--------------------------------------------------------------------------------

David A. Weber, Northwest Natural Gas Company - CEO & President of Nw Natural Gas Storage LLC and CEO of Gill Ranch Storage LLC [15]

--------------------------------------------------------------------------------

As soon as the pipeline is complete and we have a connection to the reservoir, we're going to inject over a Bcf of base gas. And we are going to inject it very slowly because this reservoir was produced out over many, many years and we want to push back the water gas interface slowly, so we create a nice round bubble. We can do it quicker, but we want this reservoir to be sound for the next 80 to 100 years. So we want to push this gas out nice and slow for the base gas. And then we're going to inject working gas that PGE is going to buy, and we're going to put that working gas into the facility. And then we're going to be able to perform operational tests because the acceptance criteria we have with the contractor are operational in nature as opposed to just physical completion. So they're not done when the facility is actually erector-setted together, as David said. They're done when we can successfully perform the injection withdrawal tests that we set up for this facility. So once we get the base gas in and get enough working gas in, we're pretty much into the June, July time frame. Then we're going to perform the series of injection withdrawal tests. And once those are all validated and we correct any issues that come out of that, we should be well underway in the September, October time frame. So we're taking our time to get the gas in the ground nice and slow, and we're taking our time to make sure that all of the operational characteristics -- this is a unique facility. This is no-notice service. So this a not like a traditional gas storage facility where you make nomination from the day and throughout the day you work that nomination off. PGE's plan could turn on in under 6 minutes, and when it does, we need to be able to put gas in that pipeline. So that means the facility testing is critical to show that the facility can make that quick turnaround, because the gas could be going both directions with only in a 6 to 10 minute time frame depending upon what's going on. So this is not something we want to jump into nor does PGE want us to jump into without a thorough shakedown cruise of the facility. So we don't get that traditional storage startup time. We're going to use that time next summer to get this done.

--------------------------------------------------------------------------------

Operator [16]

--------------------------------------------------------------------------------

Next question comes from Spencer Joyce with Hilliard Lyons.

--------------------------------------------------------------------------------

Spencer Everett Joyce, Hilliard Lyons, Research Division - Analyst for Natural Gas and Water Utilities [17]

--------------------------------------------------------------------------------

Two, hopefully, pretty quick ones from me. First one piggybacking kind off the North Mist discussion already. Given that it's rate-based, will we see that reported in the storage segment? Or will we perhaps see that in the utility once we transition from the AFUDC to the revenue?

--------------------------------------------------------------------------------

David H. Anderson, Northwest Natural Gas Company - CEO, President and Director [18]

--------------------------------------------------------------------------------

Why don't I turn it over to my finance team?

--------------------------------------------------------------------------------

Frank Burkhartsmeyer, Northwest Natural Gas Company - CFO & Senior VP [19]

--------------------------------------------------------------------------------

Sure, that will be reported in the utility segment. It is rate based.

--------------------------------------------------------------------------------

Spencer Everett Joyce, Hilliard Lyons, Research Division - Analyst for Natural Gas and Water Utilities [20]

--------------------------------------------------------------------------------

Okay, perfect. Then separately, sticking with the utility segment. I know you discussed a couple of times the margin growth via kind of a combined weather plus customer growth. But I was wondering if you could give us a little more detail on how much of the growth was driven by customer growth. And then perhaps if -- and I'm not sure if you've disclosed this in the past, but what -- perhaps the annualized margin per customer might be? And I know Q2 is kind of an odd quarter to ask that question, but could you give us any more color there?

--------------------------------------------------------------------------------

David H. Anderson, Northwest Natural Gas Company - CEO, President and Director [21]

--------------------------------------------------------------------------------

I'll let Frank go through the weather and the margin growth. On that last item, it's not really a disclosable item. But I'll just tell you for rate-making purposes, just so you understand our tariff in Oregon, this is what it kind of works back to, for residential is around $368 per customer. Kim, commercial would be?

--------------------------------------------------------------------------------

Kimberly A. Heiting, Northwest Natural Gas Company - CMO and VP of Communications [22]

--------------------------------------------------------------------------------

About $1,400 per customer.

--------------------------------------------------------------------------------

David H. Anderson, Northwest Natural Gas Company - CEO, President and Director [23]

--------------------------------------------------------------------------------

About $1,400 per customer. So as we do rates and you work backwards into what the rate piece is, so if you think about that $368, that's what we whether adjust or decouple to in Oregon. I don't have the Washington numbers off the top of my head. That's only about 10% of our service territory. So that kind of somewhat addresses that latter question, but I'll turn it over to Frank and Brody for more details on margin as reported.

--------------------------------------------------------------------------------

Frank Burkhartsmeyer, Northwest Natural Gas Company - CFO & Senior VP [24]

--------------------------------------------------------------------------------

Sure. And we've not, typically, disclosed a particular dollar amount just due to weather. But clearly, the cooler weather in the first 4 months of the year did benefit us on those that are not under the smoothing mechanisms. I don't want to put a specific dollar amount or pennies on it, but it was a fair amount of the growth. But it really was a combination of the customer growth and the weather. We did have some negative factors. We mentioned that we did have less gain on our cost of gas sharing mechanism this year. So there were some offsets in the margin there, but it was shared by both the customer growth and the weather.

--------------------------------------------------------------------------------

Spencer Everett Joyce, Hilliard Lyons, Research Division - Analyst for Natural Gas and Water Utilities [25]

--------------------------------------------------------------------------------

Okay. That's helpful. And I think that Dave's number is there on kind of backing into the margin per customer was kind of what I was looking for there.

--------------------------------------------------------------------------------

Operator [26]

--------------------------------------------------------------------------------

This concludes our question-and-answer session. I would like to turn the conference back over to David Anderson for any closing remarks.

--------------------------------------------------------------------------------

David H. Anderson, Northwest Natural Gas Company - CEO, President and Director [27]

--------------------------------------------------------------------------------

Brian, thank you. And for all you that joined us this morning, thank you. If you have any questions, make sure you reach out to Nikki. She's going to be here all day and will help you run down additional answers. We do really appreciate your support. With that, we'll sign off. Goodbye, everybody.

--------------------------------------------------------------------------------

Operator [28]

--------------------------------------------------------------------------------

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.