NewJersey Resources Corporation

Good day, and thank you for standing by. Welcome to the New Jersey Resources Second Quarter Fiscal 2021 Conference Call. At this time, I'll participate on a listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I will now like to hand the conference over to you to speak today, Dennis Puma, Director of Investor Relations. Please go ahead.

Okay, thank you, Christy, and good morning, everyone. Welcome to New Jersey Resources' second quarter Fiscal 21 Conference Forum webcast. I'm joined here today by Steve Westhoven, our President and CEO, Patrick Migliaccio, our Senior Vice President and Chief Financial Officer, as well as other members of our Senior Management Team. As you know, certain statements in today's call contain estimates and other forward-looking statements within the meaning of our security laws. We wish to caution listeners of this call that the current expectations, assumptions, and beliefs forming the basis for our forward-looking statements include many factors that are beyond our ability to control or estimate precisely. This could cause results materially different from our expectations as found on slide one. These items can also be found in the forward-looking statement section of today's earnings release furnished on Form 8-K and in our most recent Forms 10-K and 10-Q as filed with the SEC. We do not, by including this statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events. We'll also be referring to certain non-GAAP financial measures such as net financial earnings or NFV. We believe that NFV provides a more complete understanding of our financial performance. However, it is not intended to be a substitute for GAAP. Our non-GAAP financial measures are discussed more fully in item seven of our 10-K. Our agenda for today is found on slide two. Steve will begin today's call with highlights from the quarter followed by Pat who will review our financial results. Then we'll open the call up for your questions. The slides accompanying today's presentation are available on our website and were furnished on form 8K filed with the SEC this morning. With that said, I'll turn the call over to our president and CEO, Steve Westhoven.

Steve? Thanks, Dennis, and good morning, everyone. Thank you for joining us today. Midway through fiscal 2021, NJR has delivered strong performance for our shareholders. And on slide three, I'll take you through the highlights. This morning reported second quarter net financial earnings of $1.77 per share, more than doubling last year's second quarter results, primarily driven by performance at our energy services business. During the second quarter, periods of widespread cold across the U.S. led to an unusually high demand for natural gas. And as in the past, energy services strategically located in geographically diverse storage and transportation assets enabled that business to meet the needs of its customers during a time of unprecedented volatility. The outside performance of energy services illustrates the limited risk, high upside value proposition of our long option strategy. The combination of this strategy and the generation of more fee-based revenues, such as the 10-year asset management agreement we announced in December, provides for a powerful business model. Pat will provide a more detailed look at the drivers behind energy services performance later in the call. The contributions from Energy Services enabled us to increase our NFE guidance for fiscal 2021 for the second time this year to a range of $205 to $215 per share. From our original guidance of $1.55 to $1.65 per share. I'll provide more color on the next slide. At New Jersey Natural Gas, we filed a base rate case to recover almost $850 million of infrastructure investments since the settlement of our last rate case. This includes costs associated with the Southern Reliability Link, which is over 90% complete and expected to be placed in the service this fiscal year. New Jersey Natural Gas received approval for Save Green 2020, our largest ever energy efficiency program. This new program authorized $259 million in spending over three years, furthering our commitment to sustainability by helping customers lower their energy usage, save money, and reduce their carbon footprint. The rollout of the program is expected to begin this year. At Clean Energy Ventures, we placed our first commercial solar project into service, adding 2.7 megawatts of installed capacity. We continue to develop our pipeline of projects to achieve our goal of doubling our installed capacity by the end of fiscal 2024. Leaf River, our storage facility, located in Mississippi, performed well during the February weather event, meeting all of our customer commitments under very challenging circumstances. And finally, we continued construction on the Delphia Gateway South Zone. The Delphia Gateway has received all necessary Pennsylvania DEP permits and is working to obtain FERC notice to proceed for construction of laterals. We expect to place a number of the project facilities into service by the end of the year. Turning to slide four, we are increasing our fiscal 2021 NFP guidance to 205 to 215 per share, an increase of 20 cents per share compared to our March 15th update. Our initial guidance increase incorporated estimated bad debt to account for any energy services customers negatively impacted by the February weather event. Today's upwards guidance revision reflects payment by all of energy services customers apart from one due to bankruptcy. Our fiscal 2022 and long-term NFV guidance remains unchanged. As a reminder, guidance for fiscal 2022 is $220 to $230 per share. And we are maintaining our long-term annual growth rate of 6% to 10% off of our fiscal 2022 NFV, excluding energy services. Slide 5 provides additional detail on our base rate case filing. On March 30th, we requested an increase to base rates of $165.7 million, equivalent to an increase of $118 million in operating income. Since the conclusion of our last case in 2019, New Jersey Natural Gas has invested nearly $850 million to upgrade and enhance the safety and reliability of our transmission and distribution systems. This includes the installation of a southern reliability link at a cost of more than $300 million. We hope that the BP's review of our filing will be complete before the end of 2021, and we look forward to a successful conclusion that balances the interests of our customers and the company. On slide six, I'll take you through some operational highlights of New Jersey Natural Gas. Looking at the top left, we invested $198 million this fiscal year, with about 26% of the capex providing near real-time returns. We added almost 3,700 new customers over the first six months of the year, below our regular growth rate due to the ongoing pandemic. However, we still expect to add approximately 28,000 to 30,000 new customers during the three-year period for fiscal 2021 to 2023. As I mentioned earlier, construction on SRL continues to progress as well. On slide seven, I'll take you through the operational highlights of Clean Energy Ventures. During the quarter, we completed our first out-of-state project in Connecticut. This is a small but noteworthy step towards executing on the regional solar investment strategy we discussed during our November analyst day. We now have over 360 megawatts installed capacity. Total invested capital at CEV for the first six months was $38 million. We expect to see some in-service dates shift from the beginning of fiscal 2021 to the beginning of fiscal 2022, as a result of permitting and interconnection delays related to the pandemic. However, we remain on track to meet our goal of adding an incremental 160 to 180 megawatts of capacity by the end of fiscal year 2022. The bottom right shows our expected CED revenue for fiscal 2021, the significant portion of which is secured through our SREC hedging program. While we adjusted our capital forecast for this year, most of these projects were scheduled to be in service toward the end of the fiscal year. marginally affecting expected revenue. Before I turn the call over to Pat, I want to take a moment to provide an update on our sustainability initiatives on slide eight. In January, we issued our 2020 Corporate Sustainability Report. For the first time, this year's report includes disclosures in line with SASB, the Sustainability Accounting Standards Board, and the American Gas Association's frameworks, furthering our commitment to transparency and reporting on ESG matters. and on Earth Day this past month, we launched a significant new sustainability program, NJR's Coastal Climate Initiative. This program supports local-based climate solutions that have an impact on the communities we serve. CCI's first endeavor will be to work with the New Jersey chapter of the Nature Conservancy to support the restoration of saltwater tidal wetlands in the Barnegat Bay, part of New Jersey's natural gas service territory. These areas of coastline are carbon sinks, ecosystems that remove carbon dioxide from the atmosphere, storing it in the ground soil. And they also act as natural barriers that mitigate storm surge, protecting people and property in our coastal communities. And now I'll turn the call over to Pat to go through the financials. Pat.