Essential Utilities Inc (WTRG) Q2 2025 Earnings Call Transcript

Essential Utilities Inc (NYSE: WTRG) Q2 2025 Earnings Call dated Aug. 01, 2025

Corporate Participants:

Brian Dingerdissen — Vice President, Treasurer, FP&A and Investor Relations

Christopher Franklin — Chairman and Chief Executive Officer, Essential Utilities

Colleen Arnold — President, Aqua

Daniel Schuller — Executive Vice President, Chief Financial Officer

Analysts:

Julian Dumoulin-Smith — Analyst

Ryan Connors — Analyst

Davis Sunderland — Analyst

Presentation:

Operator

Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the Essential Q2 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to Brian Dingerdissen. You may begin.

Brian Dingerdissen — Vice President, Treasurer, FP&A and Investor Relations

Thank you. Good morning, everyone, and thank you for joining us for the second quarter 2025 earnings call. If you did not receive a copy of the press release, you can find it by visiting our website. The slides are also found on the website. As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risks, uncertainties and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. Please refer to our most recent 10-Q, 10-K and other SEC filings for a description of such risks and uncertainties.

During the course of this call, references may be made to certain non-GAAP financial measures. Reconciliation of any non-GAAP to GAAP financial measures is posted on our website. We will begin the call with Chris Franklin, our Chairman and CEO, who will provide an update on the company. Then Colleen Arnold, the President of our Aqua business, will provide an update on the water business. Dan Schuller, our Chief Financial Officer, will then provide an overview of the financial results before Chris closes the call and opens it up for questions.

With that, I will turn the call over to Chris Franklin.

Christopher Franklin — Chairman and Chief Executive Officer, Essential Utilities

Hey, thanks, Brian, and good morning, everyone. Let’s just jump right in on Slide 5 there with some highlights from the quarter. We delivered another strong quarter reporting GAAP earnings per share of $0.38. That’s a 35% increase over the same quarter last year. Both our water and gas businesses performed very well and in line with our expectations. And simply put, both divisions are firing on all cylinders. Our gas business continued its impressive trajectory with net income for the quarter of $17.5 million. I’m not going to steal any thunder from Colleen. She’s going to share a little bit more about the water business in a few minutes, but as you come to expect, we are executing nearly flawlessly in both our water and our natural gas segments.

Based on our strong year-to-date performance, we expect to achieve GAAP earnings per share above our guidance range of $2.07 to $2.11, largely due to several non-recurring benefits. We’re also reaffirming our capital investment plans with a target of approximately $1.4 billion in infrastructure investment for 2025. As of June 30th, we’ve already deployed $613 million in critical infrastructure improvements across our footprint.

Now, let me take a moment to highlight some exciting developments happening in our home state of Pennsylvania. Earlier this month, we participated in the Pennsylvania Energy and Innovation Summit, which was hosted by our new United States Senator, Dave McCormick. Energy leaders from around the country gathered to share thoughts, breakthroughs and in energy and technology. And our Gas Division President, Mike Huwar, showcased our ongoing hydrogen pilot project. This is a cutting-edge technology developed in partnership with H Quest and the University of Pittsburgh. Now, the comparatively low-price of energy in Pennsylvania makes it such a logical choice for hyperscalers looking to locate data centers. And we continue to have active discussions with some of those hyperscalers as we speak.

Now moving from Pennsylvania to Texas, we serve customers in the Kerrville area of Texas. You’ll recall the terrible flood that took place just several weeks ago. Fortunately, all of our employees and their families made it through the storm. One of our employees and his family had 9 feet of water in their home had some absolutely harrowing moments, but thank God they’re healing from their injuries and working to reestablish their home.

During the height of the event, we had some customer outages, but restored service to most customers within 24 hours and all customers within 48 hours, a really exemplary job done by our Texas team. Speaking of employees, last month, we wrapped up our most recent employee engagement survey under the theme Better Together and I know employee engagement is becoming a common topic for investors. Now, our results reflected the impact of our focused efforts to enhance our work environment.

In fact, participation in the survey increased 23%, which was fantastic. Satisfaction scores rose by 6% and on average, survey scores improved by 7 points. These results reflect our continued focus on creating an engaging, inclusive and supportive workplace. Each year, we take great pride in reminding shareholders that for more than 30 years in a row, we’ve increased our dividend. And as an expression of continued confidence, yesterday, the Board of Directors approved a 5.25% increase in the dividend. We remain committed to delivering long-term shareholder value through dividends and share price appreciation.

So, let’s take a look at Slide 6 and touch on a couple of community engagement issues. In April, we successfully concluded our fourth annual Essential Earth Day, and this is a 30-day campaign dedicated to environmental stewardship and community engagement. The slide showcases our efforts in recent years, which include volunteer events, environmental programs and a significant investment from our essential foundation.

As recognition for our community engagement and leadership, we were recently honored as one of Greater Philadelphia’s most community-minded businesses. This is a recognition that we really appreciate and take to heart. Modeled after the Points of Light National program, the award recognizes companies that set the standard for civic engagement through using their time, talent and resources. This commitment to community engagement is something we do in all of our states where we have businesses.

And finally, on a personal note, I am thrilled and honored to be named the Chairman-elect of the Philadelphia Chamber of Commerce. I look forward to partnering with leaders from around the region to promote economic growth and regional priorities, which hopefully end up with more utility customers.

Moving to Slide 7, let’s talk about the shareholder value. We continue to deliver steady, reliable growth in earnings and dividends. 2025 is shaping up to be another strong year with core earnings per share expected to grow this year between 5% and 7%. Most of this growth is driven by investments in water and natural gas infrastructure. Of note, since we started providing annual guidance back in 2016, we have consistently met or exceeded market expectations.

This consistency has enabled strong dividend growth underpinned by the outstanding execution of our operations team and their commitment to communities we serve. I have to tell you, I continue to be impressed by what our team has achieved and I’m honored to continue to be steward of this great company with its 140-year history. Today, I want to continue the tradition of spotlighting our business segment leaders. Last quarter, you heard from Mike Huwar, President of our Natural Gas division.

And today, we welcome Colleen Arnold, President of our Water Division, who will share some thoughts on our water business. Colleen?

Colleen Arnold — President, Aqua

Thanks, Chris. I’m happy to be here today and especially appreciate the opportunity to highlight the important work that the team at Aqua is doing. As a reminder for our investors, Aqua, as Chris just mentioned, has a strong 140-year history and has grown from a small water company in suburban Philadelphia to serving more than 1 million customers with over $7 billion of rate base in eight states.

Notably, as shown on Slide 9, we are expecting annual rate base growth of 6% through 2029, not including acquisitions. And the need for infrastructure investment has never been greater. The DPA estimating $1 trillion of need in water and wastewater infrastructure, that growth rate could easily grow with acquisitions. Now, I’ve worked in the water industry for over 30 years, including as a consultant for municipalities and for a large city itself. Between the increasing complexity of PFAS, cybersecurity, wastewater and declining funding, the conditions have never been more opportune.

Now, highlighting our operational excellence on Slide 10, as you see on the left, our O&M efficiency performs in the top-quartile and has done so for over a decade. We take pride in ensuring that we are spending our customers’ dollars efficiently. But equally important is that it is not at the expense of safe, reliable service. The top right-hand side chart shows that we outperform Water Systems nationally with 5 to 9 times fewer health based and aesthetic violations. The bottom chart also shows our strong safety record, the top-quartile performance with respect to severe safety incidents.

Also, as we move to Slide 11, we are tremendously proud of our industry-leading PFAS commitments. We have been working on this for our customers since 2016, well before the EPA and state MCL because it was the right thing to do for our customers. Our laboratory in Pennsylvania was one of the first certified and we sampled all of our sources proactively, enabling us to be where we are today.

At this point, we have over 50 of our 300 plus sites mitigated and approximately another 50 under-construction. This level of execution was made possible by the ingenuity of our engineering team, who designed a proprietary modular system with applicability for groundwater systems. We’ve recently signed a distribution agreement with Chartwater to sell this patent-pending solution called PFAS Guard community water systems. It is generating a lot of interest.

While we expect increased regulation to enhance acquisition opportunities, municipal systems, speaking from my experience, having worked with one, are slow to meet regulatory requirements and many are just beginning to do the initial monitoring for PFAS now. The extension of regulatory deadlines may enable them to delay longer. However, we remain optimistic that as the monitoring results come in with our strong leadership, proven track record and partnerships, this will be a strong avenue for acquisition growth.

Lastly, speaking of growth, I wanted to spend a little bit of time on Aqua Texas, where we have grown by nearly 25,000 connections to over 100,000 connections over the last 10 years and currently, have another 90,000 under contract or negotiations. This is in line with the impressive growth the state has seen with 16% population increase and corresponding 30% GDP growth or economic expansion. Our three core operational areas outside Spring, Austin and Fort Worth, Texas grew from 20% to 40%.

Most notably, Austin Metro, our area of highest developer growth grew 40%. Based on customer growth and infrastructure needs, we expect to nearly double the [Technical Issues] $1.1 billion in Texas by year-end 2029. And now, it would be a good time to mention that we recently led with the Texas Association of Water Companies passage of future test year legislation. This will enable us to recover that capital investment and minimize regulatory lag. I would like to thank our amazing employees who really made that possible. We are excited for our future in Texas.

And with that, I will turn it to Dan for a review of the financials.

Daniel Schuller — Executive Vice President, Chief Financial Officer

Thanks, Colleen. Let’s begin on Slide 15 with a high-level view of the first quarter results and then we’ll get into the details on the waterfall. Our quarterly performance was strong with revenues up 18.5% due primarily to favorable rate case outcomes in Pennsylvania, both for our gas and water subsidiaries, higher purchased gas costs and increased gas volumes. Corresponding earnings per share are up 35.7% on a year-over-year basis due to those drivers, partially offset by higher O&M, depreciation, interest and taxes.

On Slide 16, we have the revenue waterfall for the first quarter. Revenues increased $80.5 million from $434.4 million a year ago to $514.9 million this year. Approximately, $44 million of that increase is a result of rates and surcharges with $31 million of that attributed to water and $13 million from natural gas. Purchased gas, which represents the cost of the gas sold by the company, increased $23 million year-over-year due to an increase in gas commodity prices and higher natural gas usage.

The other category of $9.8 million includes $4.6 million in weather normalization and $4.1 million in reduced tax referral store credits to customers as a result of last year’s people’s rate order. Increased gas volumes provided $4.3 million in increased revenue, while growth in the water business contributed $2.1 million. These were offset by $2.6 million from lower water volumes. Due to wet weather, we saw decreased consumption in a number of our states.

Next, on Slide 17, our O&M slide, we see O&M expenses up about $6 million or 4.2% year-over-year. The main drivers include an increase in employee-related costs of $6.1 million compared to prior period, an increase in bad debt expense of $2.2 million and increases in legal expenses, partially offset by favorability in other expenses, primarily as a result of capitalization. The increase in employee-related costs includes about $650,000 of increased insurance reserves as we move the People’s employees from a fully-insured health plan to a self-insured health plan. We normalize out the growth, the Universal Services rider increase and the higher-than-normal employee expenses such as the insurance reserve due to a year-over-year increase of less than 3%, which is in line with our historic norms.

On Slide 18, our earnings slide, you can see the previously mentioned effect, an $0.11 positive impact from rates and surcharges, a $0.01 increase due to higher natural gas volume and a $0.02 negative impact due to lower water volume and increased expenses. And turning to Slide 19, as you remember, this is a slide we introduced last quarter that provides more insight into how our annual EPS breaks out by quarter. We’ve now added the two quarters as reported with both at the high-end of the shaded ranges.

For the third quarter 2025, we expect our EPS to be between 10% and 20% of our annual guidance. We expect our fourth quarter to be between 20% and 30% of our yearly guidance. We have some non-recurring items this year that benefit earnings. So on a normalized basis, we continue to target $2.07 to $2.11. And as Chris mentioned, we currently expect GAAP EPS to exceed $2.11.

Lastly, let’s move to Slide 20 to provide an update on regulatory activity. On July 1st, 2025, our natural gas operating subsidiary in Kentucky received an order from the Kentucky Public Service Commission. This order approved the settlement agreement that allows base rate increases designed to increase total annual operating revenue by $7.7 million or 11.2%. New rates in Kentucky went into effect on July 1st.

We currently have three pending rate cases or surcharges in North Carolina, which is a three-year forward-looking rate case. Ohio, Texas and Virginia with requested annual revenue increases of $96.6 million. So, it’s a busy year on the regulatory front. We continue to manage our regulatory activity to maintain safe and reliable service, earn an appropriate return on the capital that we invest and minimize regulatory lag, while always considering affordability for our customers.

Before I conclude, we wanted to take a moment to recognize Bob Rubin. Bob has been with the company for 36 years and he’s been our Chief Accounting Officer for 20 years. During this time, Bob said ultimate responsibility for our financials and SEC filings and he’s played a critical role in our earnings call press. Thanks for your contribution to the company, Bob and for your friendship. You will be missed. Fortunately, over the past few quarters, Bob has worked to transition his role to Brad Palmer, our new Chief Accounting Officer, so we won’t miss a beat. Welcome to that new role, Brad.

And with that, I’ll turn it back over to Chris. Chris?

Christopher Franklin — Chairman and Chief Executive Officer, Essential Utilities

All right. Thanks, Dan. Now, let’s move to Slide 23, where we touch on our long-term growth through acquisition strategy that for many years and really continues to be focused on growing our water and wastewater business. Last week, we finalized our $37.75 million purchase of the City of Beaver Falls wastewater System in Beaver County, Pennsylvania, serving about 7,000 customers that’s out near Pittsburgh. We plan to invest $10 million in the system focused primarily on improving both operational efficiency and environmental compliance. We’re very excited to welcome our new customers and bring their system up to our standards.

Now, for 2025, in total, the company has acquired systems which serve approximately 10,300 customers for approximately $58 million. We also have another four signed purchase agreements for relatively small systems in Pennsylvania and Texas. I’ll remind you that progress on DELCORA continues to be stalled by a stay put in place by a federal bankruptcy court judge related to the bankruptcy of the City of Chester. Now, there is really nothing new to report on DELCORA, but I’ll remind you that is not included in our current guidance numbers.

Now, turning to Slide 24, I’ll close by reiterating some of our goals and aspirations, both short term and long term. We continue to see strong growth potential in both our water and gas platforms and expect our combined utility rate base to grow at a compounded annual growth rate of about 8%. Breaking this down a little further, the regulated water segment is expected to grow about 6% and our regulated natural gas segment rate base will grow about 11%. We are reaffirming our 5% to 7% multi-year earnings per share guidance through 2027. This includes acquisitions expected to close in 2025 and 2026, but as we’ve said before, excludes DELCORA.

This projection includes the crucial work that we’re doing to remediate PFAS across our water platform as well as our work to replace aging water and natural gas pipes. We remain committed to maintaining a strong balance sheet, improving our cash flow and debt metrics and delivering consistent dividend growth while keeping our payout ratio between 60% and 65%. All in all, we see a bright future for our company as we continue to invest in our nation’s infrastructure and continue to deliver long-term value to our shareholders.

And with that, I’m going to conclude the formal remarks for today and we’ll open it up for questions. Let me send it back to you, operator.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Julian Dumoulin-Smith with Jefferies. Your line is open.

Julian Dumoulin-Smith

Hey, good morning, team.

Christopher Franklin

Good morning.

Julian Dumoulin-Smith

Hey, good to chat with you guys. Happy Friday. Yeah. Maybe actually just to break it down, a bit of a nuance question, but has implications here. You guys provide this timing through the year in terms of quarterly earnings. If you take the midpoints from those and kind of look at what’s implied — kind of implies maybe high-end or better if you look at implied third quarter and fourth quarter here. Again, I don’t mean to nitpick too much, but if you have any comment there, I’d love to kind of read between the lines there if there’s anything you’d say.

Daniel Schuller

Yes, for sure.

Julian Dumoulin-Smith

Sorry for the extend [Multiple Speakers]

Daniel Schuller

Yeah. So what we had said — what we said on the call here, both Chris made the point and I did as well that we’re going to come out on a GAAP basis above our guidance range, so above that $2 — that Julian?

Julian Dumoulin-Smith

Yeah. No, no.

Daniel Schuller

All of a sudden we had some strange music going on. So, let me give you a little bit of detail there. So, as I said, we’re going to come out above the GAAP guidance range. And we had strong revenue in gas this winter with more gas usage than weather alone would have predicted. And then this year as well, we benefited from some tax items and the reversal of a regulatory reserve as a result of the Pennsylvania rate order, and we had some insurance proceeds as well. Those were on the positive side.

We’ve also had some headwinds this year. We’ve had the wet summer in several of our states, which has impacted us in Q2, it’s currently continuing to impact us in the early part of the third quarter. Interest rates, of course, remain higher-than-expected. Inflation is still impacting some areas like chemicals, and we’re still in the investing stage on our lean initiative.

So and of course, it’s still early in the year relative to the gas business. We’ve had one-half — we’ve had half of last year’s heating season, we still have November and December to go this year. So, things can still move around and thus we’re not being overly specific on where we’ll land, but we’re saying on a GAAP basis, it will be above the guidance range.

Julian Dumoulin-Smith

Yeah, got it. Thank you very much. Just wanted to elaborate a little bit there. And then just on the cash flow front, I mean, just where are you trending on FFO through the year here? And then specifically within that, how are you thinking about PFAS here and some of the tailwinds from the settlements here and the timing for the collection of those, if you will?

Daniel Schuller

Yeah. So you’ll see — let me touch on those in pieces. So, our focus really for this year is to be above that 12% downgrade threshold, ideally put some distance in there, call it, like a 12.2% target area, because we’ve obviously, been in close conversations with Moody’s and we’d like to see that negative outlook removed in early 2026 once they see full-year 2025 results. And then in terms of PFAS settlement dollars coming in and being helpful from a cash perspective, you’ll see when we file a Q on Monday next week, you’ll see that we received just about $7.1 million in PFAS proceeds from those lawsuits already. And we expect a number this year that’s kind of in the $45 million, $46 million range in total.

Julian Dumoulin-Smith

Got it. All right. Excellent. Thank you. Appreciate that. I’ll leave it there. I’ll let others have questions. But thank you and nicely done. Good luck in Texas here.

Daniel Schuller

Thanks, Julian.

Operator

Our next question comes from the line of Ryan Connors with Northcoast Research. Your line is open.

Christopher Franklin

Hey, Ryan.

Daniel Schuller

Good morning. Ryan.

Ryan Connors

So, a couple of big-picture questions on Pennsylvania and then a housekeeping for you, Dan. So, I know you’re out of rates in Pennsylvania at the moment, but obviously, we have the new consumer advocate there. So and I assume your team watches other matters going on really closely. So, curious whether you’ve gotten able to get any feel for the approach that he is going to take and how that will differ from the prior consumer advocate?

And then secondly, been hearing some chatter about the office small business advocate being tougher to get to the settlement table on various matters and maybe being the next fly in the ointment, if you will. So I wonder if you have any perspective on that as well.

Christopher Franklin

Yeah, listen, I think our engagement with Darryl Lawrence and the OCA has been very positive. I would expect that Darryl and his team will continue to do their job as advocates for the customers and we’ll do our job. But I do think that there is a maybe an enhanced desire in that group to figure things out, put this puzzle together in a way that’s constructive and that all parties feel like they’ve come out of it with a win, if you will, or at least not with a loss. And so I do expect a more constructive relationship there at the OCA. That’s been our observation so far.

Listen, the small business advocate, she has a role as well and these are statutory parties and they’ve got their priorities. I would say this, the advocate has been very open to conversations. He’s visited us here at the company in Bryn Mawr and she has been open to conversation on all the topics. So listen, I’m hopeful that we can have constructive relationships with all the advocates and that’s been our experience so far.

Ryan Connors

Great. That’s very helpful color. Thank you, Chris. And then secondly, on the fair market value front, I’ve been hearing that there are some municipal sellers out there holding out for a price above the reasonable review ratio that was set in the reform to FMV in Pennsylvania. And I guess the reasoning is that the PUC does have the ability to approve something above that level on a case-by-case basis. Is that something you’ve seen? And would you be willing to go take that risk over the cap or would you just be staying kind of at or below the RRR?

Christopher Franklin

Yeah. I can’t say that we’ve seen that yet. But I will say that on occasion, we might pay more than the RRR if we thought that, for example, there was huge rate base growth and we could grow into it. I’d like to think that the RRR is a target for both seller and buyer given impact on rates, right? And I think that was the Chairman and the commission’s primary goal here was to minimize impact on rates from transactions. And we’re big believers that that’s important. And so, I’m not saying it would never happen, but we like to see both buyer and seller be closer to that RRR than above it.

Ryan Connors

Got it. Okay. Very helpful. And then Dan, yeah, just on the tax rate, it really continues to kind of jump around and at least for us found it very difficult to model. So, any perspective you can give us on where — how should we should think about the landing zone there, not only for the balance of ’25, but even into next year, like what’s your advice here on trying to model that tax line because it really seems to be kind of a random spin.

Daniel Schuller

Yeah. I think about that is for the full of 2025, think of a low-single digit benefit and then and then for the whole of 2026, at this point, of course, we haven’t finished our budget or plan, but I think of that as a low-single digit expense. So, think about crossover from — at year-end from small benefits this year to small expense next year.

Ryan Connors

Got it. That’s exactly what we were looking for. Thank you very much. Thanks, guys.

Daniel Schuller

Yeah, for sure.

Christopher Franklin

Thank you.

Operator

And again, [Operator Instructions]. And we have a question comes from the line of Davis Sunderland with Baird. Your line is open.

Christopher Franklin

Hey, Davis.

Daniel Schuller

Good morning, Davis.

Davis Sunderland

Good morning, Chris. Good morning, Dan. Good morning, Colleen. Thank you for the time. Happy Friday.

Daniel Schuller

Yeah.

Davis Sunderland

Two questions from me. Maybe first, just jumping back, Chris, your comments about the hyperscalers and obviously, a lot of activity going on in Pennsylvania right now. Could you maybe just talk a bit more about the potential opportunity here and specifically the timeline for ultimately folding some of these into rate base? I just — I guess I’m trying to square the stable customer count through ’27 makes me think maybe beyond that would be the opportunity, but just wanted to clarify some of the thoughts there. And then I have one more.

Christopher Franklin

Yeah. I think, listen, most of the hyperscalers that are talking about really short-term turnaround. They want to build and get in service. And as I said, I think Pennsylvania, a prime location for that particularly, Western Pennsylvania where there is low-cost energy. I have to be careful in what I say, there are some NDAs in place and I can’t really talk much about the opportunities we’re engaged with right now. But I will say quick turnaround. And I would also just maybe position it to think about as you think about these things, maybe not all rate base are all regulated, but some unregulated opportunities as well.

Davis Sunderland

That is super helpful. Thank you for that. And then maybe second one, Colleen, I appreciate the comments on PFAS and thank you for that. Maybe just wanted to ask about this potential EPA push-out and the rule maybe coming out later this fall. I would assume no change to how you guys were thinking about it and flowing ahead with the upgrades, but maybe just more about what you’re thinking munis might do is this any change in maybe the acquisition pipeline, if there’s maybe a push-out in some opportunities related to that or any thoughts? Thanks, guys.

Colleen Arnold

Yeah, thanks for the question. And as I said in my comments, there’s no change to our program at all. We’re full steam ahead. I do think really in terms of the acquisition and the growth opportunities, there’s no change there either. Most municipalities are going to wait till the last possible minute. They’re just starting monitoring and so, they’ll — this gives them a little bit more time to keep their head in the sand, but the opportunities are going to be there. And like I said, with our position, with the amount of experience we have with systems operating — operating well, we’re going to be really well-positioned to help them.

Christopher Franklin

And Colleen, if you think about it, yeah, they might have a couple of more years to comply. But given the fact that we have a resource, a solution, maybe we can help accelerate some of those solutions with our filtration system. And who knows, maybe that starts some conversation would be great.

Colleen Arnold

Yes. And when I was at the American Motor works Annual Conference this year, generating a lot of interest a lot coming up to me, the engineers coming up to me, I’m asking about it. And as they, like I said, get their heads out of this hand and know they have to comply. I know our solution is going to be a great fit.

Davis Sunderland

This is great. Thank you both. I appreciate the time, guys.

Daniel Schuller

Take care.

Operator

That concludes the question-and-answer session. I would like to turn the call back over to Chris Franklin for closing remarks.

Christopher Franklin

Thanks, folks. Appreciate you joining us today. As always, the team is ready to answer questions or follow-ups if you have them. Thanks so much. Have a great weekend.

Operator

Ladies and gentlemen, that concludes today’s call. Thank you all for joining and you may now disconnect.