NewJersey Resources Corporation

Thank you, everyone. Welcome to New Jersey Resources Fiscal 2023 First Quarter Conference Call and Webcast. I'm joined here today by Steve Westhoven, our President and CEO, Roberto Bell, our Senior Vice President and Chief Financial Officer, as well as other members of our Senior Management Team. Certain statements in today's call contain estimates and other forward-looking statements within the meaning of the securities laws. We wish to caution listeners of this call that the current expectations, assumptions, and beliefs forming the basis of our forward-looking statements include many factors that are beyond our ability to control or estimate precisely. This could cause results to materially differ from our expectations as found on slide one. These items can also be found in the forward-looking statements section of today's earnings release furnished on Form 8K and in our most recent Forms 10K and 10Q as filed with the SEC. We do not, by including this statement, assume any obligation to review or revise any forward-looking statement referenced herein in light of future events. We will also be referring to certain non-GAAP financial measures, such as net financial earnings or NFV. We believe that NFV, net financial loss, utility gross margin, and financial margin provide a more complete understanding of our financial performance. However, these non-GAAP measures are not intended to be a substitute for GAAP. Our non-GAAP financial measures are discussed more fully in Item 7 of our 10-K. Our agenda for today is found on slide two. Steve will begin with this quarter's highlights, followed by Roberto, who will review our financial results. Then we will open the call for your questions. The slides accompanying today's presentation are available on our website and were furnished on our Form 8-K file this morning. With that said, I will turn the call over to our President and CEO, Steve Westhoven. Please go ahead, Steve.

Thanks, Adam, and good morning, everyone. We delivered strong results in the first quarter. This includes exceptional performance during a unique weather event over the Christmas weekend. This speaks to the resiliency of our physical infrastructure and also to the talent and determination of our people. As a result of NJR's successful operation during this event, we're raising our fiscal 2023 guidance by 20 cents to 262 to 272 per share. Before we move to the quarterly results and our forecast for the year, I'd like to begin with an update on our sustainability and decarbonization efforts on slide three. Last week, we issued NJR's fiscal 2022 corporate sustainability report, our 14th consecutive annual report dating back to 2008. The report details our goals and accomplishments in sustainability and other ESG-related areas, as well as our approach to innovation, low-carbon fuels, energy efficiency, and environmental stewardship. I'd like to cover just a few of the report's highlights with you. We believe the fastest and most cost-effective tool to reduce emissions is through energy efficiency initiatives. Last year, we invested more than $53 million in New Jersey Natural Gas's energy efficiency programs, the highest single-year investment of this type in our company's history. Growing these programs is a central element to our decarbonization strategy, and New Jersey Natural Gas has long been a leader in this area. On solar, we continue to advance our leadership at Clean Energy Ventures by placing into service two milestone projects of national significance, including one of the largest cap landfill solar arrays and the largest floating solar installation in the United States. And finally, our $20 million endowment supports our charitable foundation work. These resources enable our foundation to focus on medium and long-term partnerships that drive outcomes that make a difference for local communities and the environment. We hope that all of you have an opportunity to review the report. Turning to slide four, we reported net financial earnings of $1.14 per share in the first quarter, a 65% increase from the same period a year ago. As I noted earlier, we are especially proud of our company's performance during Winter Storm Elliott, which was a historic event that impacted the entire country. In our service territory, we saw temperatures fall as much as 50 degrees in just under 12 hours. The impact of these record low temperatures limited gas supply in certain locations in the US. At New Jersey Natural Gas, our customers were able to enjoy their holiday without curtailments. This speaks to the resiliency of our gas supply network, as well as the dedication of our team, which worked throughout the holiday weekend to ensure that we met all obligations to our customers. In our storage and transportation business, we reported exceptional operating performance from Adelphia Gateway and Leaf River throughout the winter event. At Energy Services, our long option strategy generated significant value during the volatile conditions created by the winter storm. which led to higher than expected NFE during the period. We also continued to deliver on our commitment to generate more stable fee-based revenue at that business unit, as we received a $73.5 million cash payment associated with the asset management agreements announced in December of 2020. Finally, at Clean Energy Ventures, we placed four commercial solar projects into service since the end of the fiscal year, growing our installed capacity by approximately 43 megawatts, or over 11%. Turning to slide five, as a result of this outperformance, we are raising our fiscal 2023 NFVPS guidance range by 20 cents to 262 to 272 per share. We are also maintaining our expected long-term NFVPS growth range of 79% from our original 2022 guidance, which is among the highest in our peer group. And as communicated last quarter, we expect to be at the higher end of the range for fiscal 2024. As I mentioned in my opening remarks, New Jersey Natural Gas had a strong quarter of execution, as highlighted on slide 6. We invested $91 million in New Jersey Natural Gas during the first quarter, with over 36% of that capex providing near real-time returns. We reported strong customer growth, adding over 2,100 new customers in the first quarter compared to approximately 1,700 in the first quarter last year. We still expect to file our next rate case in fiscal 2024, consistent with the completion of our major technology investments. Moving to slide seven, we continue to see positive momentum at Clean Energy Ventures. Since the end of fiscal 2022, we have placed over 43 megawatts of new solar projects into service and maintain a robust pipeline of future solar investments. We are encouraged with recent progress at PJM QReform and New Jersey Solar Policy In late November, FERC approved PJM's Q reform proposal. Although we are still navigating near-term delays, this process should create efficiencies and greater predictability for solar development. In December, the New Jersey Board of Public Utilities approved the state's solar successor program for projects over 5 megawatts. The goal of incentivizing at least 300 megawatts of annual solar capacity should help to broaden development opportunities in the state. And with that, I'll turn the call to Roberto for a review of the financial statements. Roberto?

Thank you, Steve, and good morning, everyone. Slide 9 shows the main drivers of our NFE for the first quarter of fiscal 2023. We reported NFE of $110.3 million, or $1.14 per share, compared with $65.8 million, or $0.69 per share, last year. New Jersey National Gas saw an NFE improvement of $3.6 million, primarily due to the impact of new base rates that went into effect on December 1st, 2021, a higher contribution to utility gross margin from our BGSS incentive programs and new customer growth. EBS NFE improved by $3.2 million, primarily due to higher SREC and electricity sales. Storage and transportation increased by $3.3 million, largely due to Adelphia Gateway becoming fully operational in the fourth quarter of fiscal 2022 and the excellent operational performance at both Adelphia and Leaf River during the quarter. And finally, energy services improved by $35 million due to the execution from our team during winter storm Elliott. Turning to our capital plan on slide 10, our projections for 2023 and 2024 are unchanged from the last conference call. And over the next two years, we expect to invest between $1.1 and $1.4 billion across a company. We expect to tighten our CapEx projections in future quarters, particularly in the case of CEV, as New Jersey regulatory program approvals and PGMs interconnection timelines become more clear. This capital deployment is expected to support growth throughout our business units and is consistent with our long-term NFEPS growth target of 7% to 9%. Finally, on slide 11, most of our debt is fixed, and we don't have significant maturities in any particular year. As mentioned in our prior call, our NFVPS guidance for fiscal 2023 and our long-term NFVPS growth guidance incorporate the assumption of high interest rates for the foreseeable future. With that, I'll turn the call back to Steve.