Good day, and welcome to the Aqua America's Quarter 2 2019 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Brian Dingerdissen. Please go ahead, sir.

Thank you, Eduardo. Good morning, everyone, and thank you for joining us for Aqua America's Second Quarter 2019 Earnings Call. If you did not receive a copy of the press release, you can find it by visiting the Investor Relations section of our website at aquaamerica.com. The slides we will be referencing in the webcast of this event can also be found on our site. 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, reference may be made to certain non-GAAP financial measures. A reconciliation of these non-GAAP to GAAP financial measures is included at the end of the presentation and also posted in the Investor Relations section of the company's website. After the presentation, we will open the call up for questions. Now I would like to pass the call to Chris Franklin.

Okay, thanks, Brian, and thanks, everyone, for joining us. The second quarter was certainly a busy one. We installed a large amount of capital, advanced several municipal acquisitions, continued our work on the Peoples acquisition and the Peoples rate case. And in terms of today's agenda for the call, here's what we'd like to do. We'll start with some highlights since our last earnings report in May, Dan Schuller will then talk about our financial results as well as our rate activity, and I'll give you a brief overview of our progress on the municipal growth strategy. And we have Kim Joyce, our Vice President of Regulatory, Legislative and External Affairs joining us this morning, she'll give you an update on fair market value and the regularly aspects of the Peoples transaction. Finally, we'll conclude the call with a review of our guidance for 2019, and then take any questions that you might have. So let's jump right in. During the second quarter, our employees delivered another strong performance, demonstrating our long-term strategy of growth through acquisition, our investment in infrastructure renewal and of course, our consistent delivery of value to customers, communities and our shareholders. In fact, the first 2 quarters of the year, this year, we invested nearly $270 million in infrastructure investment. That's up 24% over last year's first half and on track for another record capital spending year of approximately $550 million this year. Investing in infrastructure is at the core of our mission to deliver safe and reliable service, and as you know, it also helps fuel our growth in earnings. Our municipal acquisition strategy is on pace for another strong year. We added a signed purchase agreement in Campbell, Ohio just recently. And also announced a letter of intent with DELCORA, which is a…

Thanks, Chris. Good morning, everyone, and thank you for joining the call. As you can see on Slide 9, we're reporting non-GAAP numbers again this quarter that adjust of the impact of the Peoples transaction and integration. You'll see this throughout the year. We reported revenues of $218.9 million in the second quarter of 2019, up 3.3% compared to $211.9 million in the second quarter of 2018. Operations and maintenance expenses were $86.4 million in the second quarter compared to $73.5 million in last year's second quarter. Moving on to GAAP net income, which includes items related to the Peoples transaction. We reported $54.9 million compared to $66.6 million in the second quarter of 2018. GAAP earnings per share, including Peoples-related expenses and incremental shares, were $0.25 in the second quarter compared to $0.37 in 2018. When adjusted for Peoples-related charges, income was up 0.3% from $66.6 million to $66.8 million. And as you can see on the bottom right of the table, adjusted income per share was in line with last year's EPS of $0.37. Now let's move to the revenue waterfall on Slide 10. Breaking down the 3.3% revenue increase, you'll see that growth was the largest contributor, which includes acquisitions in Illinois, Pennsylvania and Virginia as well as organic growth, adding approximately $4 million to revenue. Rates and surcharges added an additional $4 million. Other items decreased revenue by $297,000. And then consumption was lower by $677,000 given the normal trend from conservation and wet weather in some of our states. Next, let's move to the O&M waterfall on Slide 11. Operations and maintenance expenses were $86.4 million for the second quarter compared to $73.5 million in the second quarter of 2018. The largest driver was cost from the Peoples transaction and integration, which increased O&M by…

Thanks, Dan. We've noted in the last several calls that we continue to see a strong pipeline of acquisitions in our municipal strategy, especially in the states where we have fair market value laws. On Slide 17, you can see our 8 signed municipal purchase agreements, which total about 22,600 customer connections. I'm very excited about these customers joining us. Just recently, we signed an agreement to acquire the water system of Campbell, Ohio, which has approximately 3,200 customers. And as a reminder, Ohio is our second-largest state with roughly 150,000 customers and a state where we are the only regulated water utility of size. Ohio also has 1,400 municipal water systems and about 1,000 wastewater systems. So there's a lot of opportunity for us to be a solution in Ohio. Now that Ohio has a fair market value law, we expect to see interest from municipalities continue to increase as it has in Pennsylvania and Illinois, where the laws have been in effect for a longer period of time. And I should mention on this slide that we do expect a couple of these transactions to close in early 2020 simply because of some regulatory process expansions. And however, we expect -- we do expect to see our total new customers added in 2019 along with organic to still be within our targeted range of 2% to 3% growth. It's also important to note that as you think about what this adds to earnings that for very $100 million in rate base from acquisition, we add -- we expect about $5 million in additional earnings to be generated from that increase, assuming normal ROEs and that would, of course, exclude any pursuit cost. In addition to our signed acquisitions, in recent quarters, we've also highlighted some of the opportunities we're pursuing that are still in the earlier stages. On Slide 18, you can see that we are actively pursuing some fairly large municipal systems and a total of over 400,000 customers in our active pipeline. In July, a large municipal wastewater system in Southeastern Pennsylvania known as DELCORA signed a letter of intent committing to exclusive discussions with Aqua. Giving you a sense of the size, DELCORA serves approximately 500,000 people. We talked about our company-wide serving about 3 million people, so we have 1 million customer connections, so it gives a sense. This system has a number of wholesale and larger industrial customers, so it's not all retail. But they -- it serves approximately 500,000 people in about 42 municipalities, and so this is significant to us. If we reach an agreement on an opportunity of this size, we would likely look to put an ATM or an at-the-market program in place to raise some additional equity. But as we've said, aside from acquisitions, we do not see any additional need for equity in the near term. And now with that, let me pass it to Kim to provide some updates on the Peoples front. Kim?

Thanks, Chris. This morning, I'll provide an overview of the transaction time line related to the regulatory approvals needed prior to our joining with Peoples. At the outset, I'd just like to say that it has been a pleasure working with the Peoples team on this joint effort, and I also appreciate all the hard work of those who participated in the approval process in the various dockets in all the states. In looking at Slide 20, Aqua and Peoples filed applications in the 3 states where Peoples currently provides natural gas service, which are Kentucky, West Virginia and Pennsylvania. As was reported on the last earnings call, the parties were able to reach unanimous settlement agreements in both Kentucky and West Virginia, and those two commissions have both issued orders allowing the transaction to proceed to closing. Kentucky has a 4-month statutory time line, and we received approval on March 13. And we have received approval on West Virginia on April 23. Next, I'll focus on the Pennsylvania regulatory approval process for the Peoples acquisition. The first highlight on the time line slide that there were 2 other very important dockets being processed at the commission as well. The Aqua Pennsylvania water and wastewater rate case and the Peoples natural gas rate case, both, in our view, reaching very positive outcomes. So turning to the next side. For the Peoples acquisition with Kentucky and West Virginia regulatory approval already received, we are now waiting for a review in Pennsylvania. A nonunanimous settlement agreement was filed with 9 of the 11 intervenors either supporting or not opposing the agreement, which was filed on June 25. The settlement agreement was supported by the Office of Consumer Advocate with two intervening unions, low-income advocate, several gas suppliers, the Oil and Gas Association,…

All Right, thanks, Kim, and I'll conclude the call with a quick summary and a review of our 2019 guidance. Looking at Page 24, we're affirming our stand-alone 2019 financial guidance for Aqua. We're also reaffirming the expected closing time frame, as Kim just said, for the Peoples transaction as the same time line we essentially disclosed in June. We expect Aqua stand-alone adjusted income to be $1.45 to $1.50 per share. This excludes the impact of the Peoples transaction and equity offering as well as any earnings from Peoples, any future earnings from Peoples. We're on track for our best year of infrastructure investment with about $550 million to be spent on replacing and improving pipe, plant and other infrastructure. Through 2021, we expect to invest approximately $1.4 billion and this will help drive rate base growth of about 7%. As I mentioned earlier, we have 8 signed municipal acquisition agreements and expect to close most of those this year. Together with organic growth, our customer count will increase this year by 2% to 3%. And finally, we've passed most of the important milestones in the regulatory process and in our integration planning for the Peoples acquisition and expect to close in the fall after receiving regulatory approval in Pennsylvania. Importantly, we plan, as Dan mentioned, to hold an Analyst Day in New York City in December. December 5 is our target date. At that meeting, it's our intention to provide longer-term guidance to you. As I've said on previous calls, we will provide this longer-term guidance only after we finish 4 things, right? We said we need to finish the Aqua rate case in Pennsylvania. That is complete. We need to finish the Peoples rate case in Pennsylvania. We do have a settlement on that. We need to close the Peoples transaction. We expect this fall. And then we need to conclude and finish our analysis on the repair tax impact in Pennsylvania with Peoples as well. So in summary, our performance for the second quarter is a result of a lot of hard work from the team on a number of different fronts. So we continue our long history of dividend growth. The Peoples transaction supports our ability to continue this growth. Our fair market legislation passed in Texas, and again, that's the seventh of our 8 states to pass this important legislation. Our municipal acquisition program is strong and delivering good results, and we're pursuing larger opportunities, including the DELCORA opportunity. Peoples filed a settlement for the rate case, which we've mentioned. And for the transaction, we're on track to closing in the fall, as Kim discussed. So with all of that, I will conclude and open the call for questions.

[Operator Instructions]. We'll take our first question from Julien Dumoulin-Smith from Bank of America Merrill Lynch.

This is actually Ryan Greenwald on for Julien. So can you just talk a little more about discussion so far in PA. And I know you guys are saying 2020 in terms of repairs tax if anything is done there. But can you just touch on your overall confidence in implementing it and how it would ideally look?

Yes. So that certainly there are two pieces of that, Ryan. There's the current portion, which we can choose to elect. We can go ahead and elect that, and you'd see the benefit in the income statement immediately. And the other is really the catch-up, which is where you look back and you say if repair had been in place over the past years, what would that be worth and how is that treated in terms of going forward? And so on that second portion, on the catch-up, for that you actually need a basic commission order indicating how that catch-up would be treated. So think about our own Pennsylvania situation back in 2011, 2012. We had a significant catch-up that was put on the balance sheet and the commission order indicated that we would amortize that catch-up deduction over a 10-year period of time. So that's the kind of thing we'd look for on the catch-up as some kind of a treatment of that catch-up. I won't say exactly it's what we had in Pennsylvania, I was just giving that as an example. But it's really the 2 pieces, and we'd expect that we would go ahead and implement it in 2020, and you'd see the current impact, if you will. So it's -- where we are now, we've been really determined what would that framework look like, how much of their capital qualifies for repair under that framework, quantifying then what that potential current portion is and what that would look like and then quantifying that catch-up and discussing a strategy around that catch-up deduction. Does that help, Ryan, in terms of giving you a sense of it?

Yes. Do you have a sense right now in terms of what would qualify?

Well, it is a pipe business. So in terms of replacement, a portion of that pipe would clearly qualify for repair tax. But I'd say we're still working through that process. And as Chris commented at the end of the call, as we get through all these pieces, the two rate cases, the closing the transaction, the assessment of the repair at Peoples, then we'll give you the longer-term guidance.

As you can imagine, Ryan, we'd actually hoped to have closed this transaction this summer, which then would have put us on the inside of the company and accelerated some of those -- some of that look at these things. But that's been a little bit delayed. I don't want to suggest that we've had anything but really fine cooperation between the two companies, but clearly, we're still not the owner of the company yet. So a little bit of that work is delayed just because of that -- the delay in closing.

And there really is a fair bit of analysis, Ryan, to actually get those things quantified.

Yes. Fair enough. And just shifting away from the diversification into gas, can you touch on your appetite for diversifying more into new states with the core water business as fair market value legislation's making its way through?

Yes. I think we're wide open to opportunities in other states. Having said that, we've put a lot of focus on passing this fair market legislation. And as we stated in a prepared remarks, 7 of 8 states we've seen the passage of it where we currently do business. But having said that, we've always said if we expanded to other states, we would look to get a strong foothold, and we wouldn't want to dabble in a state, we'd like to -- if we enter, enter with a presence, call that with a target of at least getting to 30,000 customers. But I will say that where we've seen fair market value passed already in our existing 8 states, we're seeing an awful lot of opportunity and activity. And so it's kept us pretty busy in our existing states. Not to say we're not always taking a look around, but we are pretty busy in our 8 states already.

We'll now take our next question from Ryan Connors of Boenning and Scattergood.

I wanted to spend a little bit time on the regulatory approval process for Peoples. Obviously, you've mentioned, Chris, it's taken a little longer than expected. Kim mention disappointment at not reaching a global settlement. Can you just talk about what it is -- what aspects of the process have surprised you relative to your initial expectations, just in terms of what exactly has played out differently than you envisioned it initially?

It's good question, Ryan. And I could summarize it largely in two words, Goodwin Tombaugh. That's the system Kim described. It's the gas gathering system in Southwest Pennsylvania. We knew there was a system that was struggling, and it was a topic of conversation between the agencies prior to this transaction. And what had become apparent was -- during the transaction is the various opinions on how to fix the problem. And where we find ourselves, and even to some extent the Peoples organization, we find ourselves between agencies that have 2 different philosophies on how to fix the problem. And so it's been very difficult to bring them to one central approach. And I will say, Ryan, that over the last several months, we've had a lot of discussions with all of the agencies about common ground, and we believe that the settlement signed by 9 of the parties is really fair common ground. And in fact, we have offered, in the document sheet you've seen, some rate credits as part of that to help subsidize that work. Having said all that, at the end of the day, we need to see this discussion play out in front of the administrative law judge. She will issue an opinion and then obviously the results of that in front of the 5 Pennsylvania Public Utility commissioners. And I know there's some strong language in some of these documents, but I think if you read any of those from any transaction, there's an element of that and then there's the real substance, which I'm talking about here, which is really around Goodwin Tombaugh. [Indiscernible] Okay. Okay.

Sure. Yes. So my follow on to that -- and let me just stress this is purely a hypothetical question. So this is -- it's not a base case. But let's say we had a scenario where you do not get approval from the PUC, whether they reject a positive initial decision or the converse. Am I -- are we safe to assume that that's not game over? What would happen is you would recalibrate based on Goodwin Tombaugh and then just refile with whatever the -- adjusting the transaction according to what is needed. Is that a fair assumption?

Yes. I'm going to give it to Kim. But let me just say this right out of the chute, there is nothing that would lead us to believe that the Pennsylvania Public Utility commission would go down that route. Think about it this way, the various scenarios don't include and have never included the payment of -- for the system on anybody's nickel but the users of the system and the customers in general. So I think the Pennsylvania Public Utility commission will follow past precedent and law, and we don't see anything like that happening. But having said that, I'll let Kim give an answer to this speculation.

Sure, Ryan. So just agreeing with Chris, we have full confidence, and we're seeing -- proceeding regulatory approval in Pennsylvania. But if for some reason the commission looked at the settlement agreement and made some tweaks or made some changes to some of the provisions that the parties agreed to, at that point, we would just reconvene with those parties and revisit those particular issues and try to resolve them, and then resubmit the settlement agreement for approval.

Got it. Right. Which is the underlying -- what I'm getting at. It's not to -- it's a refi -- it's not a yay/nay, it's a process.

That's more likely the process, right.

Yes. Okay. And then my other one was on Peoples rate case. That's great news on the settlement there. Can you just give us -- there was one outstanding item on the mainline extensions, which is a little bit cryptic, especially for those of us who aren't as versed on the gas side. Can you just give us a cliff notes version of what that is, how you see that playing out? And is there any residual financial materiality that might come out of that, the various scenarios with that outstanding item?

Let me lay the context and then I'm going to flip it Kim too. So this provision that you're talking about is one that other gas utilities, including Colombia and Pennsylvania already have, right? They already have the ability to use this. It's the ability to essentially say -- I'm going to use an example -- to go to a neighborhood of customers and say, hey, listen, if you all sign up for service, we can run a line and recover at least a portion of that line that runs to your homes, the new gas line to -- and have it financed in -- generally in rates, and that's the layman's version of what it does. I think the position of the Office of Small Business is essentially that they don't want small businesses to play any portion in that subsidization of those new customers. And so I think that's their point of view, and the commissioners will ultimately decide whether or not the small businesses are included. I will say, and I'll conclude with this, that in a gas-rich, low-cost environment in Western Pennsylvania, this is a strong alternative to propane and electric. And so therefore, generally, the commission regulators encourage this kind of expansion of gas service for customer who desire it. And Kim?

Yes. Chris and you summarized it very well, and it's just a philosophical opinion for the Office of Small Business Advocate. As the mainline extensions are built out, certainly those costs are spread across the entire Peoples' customer base. And the Office of Small Business Advocate doesn't believe that their clients should have to pay for that. So it's a subsidization issue, Ryan, but I think that the commission will take a look at. But ultimately, a lot of gas companies have similar mainline extension programs that have been approved by the commission in other instances.

And we'll now take the next question from Durgesh Chopra from Evercore.

This is Jeffrey on Durgesh. So I just want to go a bit further with the Peoples gas rate case. How should we think about the earned ROEs assuming you get the rate case settlement approved? And how does that compare to the earned ROEs in your water businesses?

Yes. I think it's important to note it is a black box settlement, but we have a pretty good sense of where ROEs come out there, and we think those ROEs come out where you would expect them to be for a Pennsylvania utility business. And in terms of the settlement and the increase in revenue that comes from the settlement, that's very nicely in line with what we had in our acquisition model. So we're quite comfortable with the outcome here on that rate case.

Got you. And then just moving on, and this can be broad strokes on DELCORA since I know you're in the due diligence process. But how should we think about the potential rate base add there?

Yes. I would say at this point, since we don't have a purchase price announced and there's still work being done around that, that's going to be a hard thing for us to give you. I think the stated -- and I'm trying to get the words right because it's municipal, the depreciated asset base, something like that, is around 260 or 240.

240.

But that's what's stated in their books. And so I wouldn't put that in the model or anything, it's just that's -- if you go on the Internet, that's probably what you'll find. I would say, what you see what we come up with in terms of purchase price and rate base.

And we'll take the next question from Richard Verdi from Coker & Palmer.

Brian's doing a good job of keeping up -- keeping me up to speed with things, so I'm quite clear. I just have one a question because I jumped on the call very, very late and I apologize for that, so if this was addressed again, I apologize. Chris, did the company see any kind of unfavorable weather conditions during the quarter that impact earnings?

There was a minor impact, but I wouldn't say it was a significant contributor to earnings. Dan, you addressed that in your prepared comments.

Yes. Consumption down a little bit. And obviously, we see continued conservation. We did see some wet weather in some states. But it was a mix, a bit of a checker board if you look across the portfolio. Good weather, I'll say that, for water sales in certain locations and wet weather in others.

I'll take the next question from Haley Sue [ph] from Macquarie.

So could you just give me an estimate of what would be a good estimate of the 2020 share count starting from where we are now and somewhere in the middle of the range for principal equity units?

Yes. So you're looking for 2020 share count. Give me 1 minute, I'll pull something up here. As I said on earlier calls, we'll continue to be as clear as we can on these. So if we take -- so for 2020, what you'll see there, we'll have, call it, our original base, we'll have the new common offering, we'll have the pipe and then will have measured around the TEUs. So you'll, in total, be somewhere around, call it, between 250 million and 255 million shares. So it's probably a little bit more, but think of that as your range.

And now we're at 220 million, right?

Yes. That's right. You see just about 220 million for the second quarter. And then in the third quarter, what you're likely to see there -- what you'll see there is the TEU shares and the common shares, you'll see them for a full quarter, whereas you only saw those shares for 69 days of the quarter for Q2.

[Operator Instructions]. And now I'll take our next question from Jonathan Reeder from Wells Fargo.

In terms of the Peoples rate case settlement, does that assume a full income tax allowance or like a normal tax rate for that business?

Yes. It does.

Okay. And then you're saying you don't -- when you elect, I guess, the tax agreement in 2020, the current portion will just flow to the bottom line? There's no approval necessary. It's just the catch-up portion that is subject to whatever treatment.

You're correct. There's not a required approval for that election and to see that current portion. It's really the catch-up that requires the commission decision.

Okay. And then can you give a little more color, Chris, on what a potential deal with DELCORA might look like? Is it definitely an outright acquisition? Or could there be some sort of like JV partnership structure? I wasn't entirely clear on that.

Yes. No, the anticipated outcome is a full acquisition. And I think the attractive part for DELCORA is that they would be -- they would essentially become the company's Pennsylvania wastewater division, and we would aggregate all of our wastewater customers under that new entity and -- but they would be a fully owned component of our -- Aqua America -- Aqua Pennsylvania.

Okay. So they would, in a sense, assume all your other wastewater systems and run it for you to some degree?

Yes. That's what we anticipate that the -- we're really impressed with the talent there. And so the people, the management are -- we're impressed by, and we think would be a great match with the folks we already have doing wastewater at the company now. To give you a sense, Jonathan, the company overall, we have about 100,000 wastewater customers now. We're talking about DELCORA's role would really be in Pennsylvania or Southeast Pennsylvania role. And if you think about that, even announced already, we have 10,000 customers joining us from Cheltenham, which is not yet closed, but we put it in our list as well. It would be significant for everybody.

Okay. And then is it your typical municipal deal that it would fall under the fair market value legislation that would apply? Or is there a cap to the size of the deal that can fall in the fair market value?

Well, here's the way I would put it because we're still in negotiations and due diligence, so I don't want to front-run the agreement, but suffice it to say we don't anticipate taking goodwill on this transaction.

Okay. And then how do they use the proceeds? Is it a municipal agency where they can redeploy those proceeds into, I guess, other kind of specific uses like kind of the driver behind them coming to the table? How should we think of that?

Yes. One of the impressive parts about the principles that they are opposing this transaction with, and they've said publicly so I'm not giving you anything that's not in the public realm, but they anticipate taking 100% of the proceeds and putting them against future rates. So it's a nice outcome for customers that get a prolonged period of rate stability and a combination with a professional utility. They've got to build another expansion of the plant, they have a lot of capital to spend in the coming years, and so we can be helpful with -- on that aspect of it and at the same time, their team gets some expanded opportunities to grow, and their customers get long-term rate stability.

And that's good detail, I appreciate that. A little housecleaning, Dan, kind of goes back to Richard's question, but on a non-GAAP basis, help me understand why net income was flat despite having at least a full month of PA rate release in place, certainly during a higher consumption month?

Yes. So I guess a couple of things to comment on there. Coming off repair, you don't expect to see a big bump in earnings from the case, and remember that case really shifted those benefits -- the benefits of repair to the customers because now it's incorporated into the revenue requirement. We did, of course, see 5 weeks or so of the new rates in Pennsylvania so they are incorporated there, so you did see -- you do see a revenue pickup when you look at the income, you see it's more flattish, but with that revenue -- you see the revenue in pickup, but even though you've got increased expenses there, depreciation is up year-on-year because of the capital expenditures, remember we invested kind of $500 million of capital over the last year. Interest is also up similarly based on that capital expenditure over that time period -- a few additional costs in there related to pensions and so forth, so that's why you see the $0.37 last year, $0.37 on an adjusted basis this year. .

Right, but that depreciation and interest, I mean, now you have forward looking test here in PA. Shouldn't that have contemplated those items where there could have been some accretion or...

I think that's fair too.

Fair point.

First point though, Jonathan, if you think about it, coming out of Pennsylvania rate case, first one in seven years and taking the -- coming out of the repair, which is the key element, there's just not a huge uplift out of that case. I think that's the right way to think of it. You come out of it and you've had to spend an enormous amount of capital to overcome income generated from savings on the tax line, right? And so there's just not a huge uplift that comes from the first case as there will when the company's back on its normal rate case cadence going forward from here.

And while the case does contemplate those, remember you're only seeing about 5 weeks of that new revenue versus a full quarter of new revenue.

Yes. That's true. You have a good point.

And we'll take the next question once again from Ryan Connors from Boenning and Scattergood.

Just a quick follow-up. You were talking about the DELCORA opportunity there, which is great. And then there's been some news flow here locally around Chester that the city wants to put out an RFP that's just to sell that water system and apparently doing some legal maneuvering around the Board and stuff like that. Do you have any comment on that -- on those news items and whether that's -- we should look at that as being back alive again or is that just over-reading that?

Yes. So let's just level set for everybody. Chester Water Authority located in Chester is one of the most depressed third cities in the United States. But it serves also Delaware County and Chester County or portions thereof. So it has about 42,000 customers, water customers. And so it's a sizable system. In 2012, there was a piece of legislation that passed that took control, this is a 100-year-old utility owned by the city of Chester. It took the -- the legislation in 2012 changed the governance and gave Chester County 3 votes on their Board, Delaware County three votes on their Board and the city of Chester 3 votes on their Board. Prior to that, it was all the city of Chester appointed votes. So the debate now is, did that change the ownership or did that just change the government -- the governance? Because Chester would argue the city of Chester argues they were never reimbursed for any transition of ownership, it's really owned by them, and therefore, they're in a, call it prebankruptcy, it's Act 47 here in Pennsylvania. So they need the proceeds from the sale. So the city is arguing that they are the owner, the rightful owner and they get to sell it. The Authority is saying no, no, we're independent, we're the owner and you can't sell us. This, ultimately, will be decided in court. It's being litigated today, in fact, not literally today but currently, and I think once that happens, the city will -- should they be the rightful owner, they'll put it out for bid and sell the Authority. But I think it will be tied up in court for the foreseeable future.

Okay, so not there though?

Not there by far.

It appears there are no further questions at this time. I'd like to thank the conference back to Chris. Please go ahead, sir.

Thank you all for joining us today. Obviously Brian, Dan and I always remain available for follow-up, but thank you for joining our call today. Thank you for your questions.

This now conclude today's call. Thanks for your participation. You may now disconnect.