NewJersey Resources Corporation

Thank you for standing by. My name is Jessica and I will be your conference operator today. At this time, I would like to welcome everyone to the New Jersey Resources Fiscal 2024 First Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Adam Pryor, Director of Investor Relations. Please go ahead.

Thank you. Welcome to New Jersey Resources Fiscal 2024 First Quarter Conference Call and Webcast. I am 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 teams. 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 statement section of today's earnings release furnished on form 8K 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 statements referenced herein in light of future events. We will also be referring to certain non-GAAP financial measures, such as net financial earnings, or NFE. We believe that NFE, net financial loss, utility gross margin, financial margin, adjusted funds from operations, and adjusted debt 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. The slides accompanying today's presentation are available on our website and were furnished on Form 8-K filed this morning. Our agenda for today is found on Slide 4. Steve will begin with this quarter's highlights, followed by Roberta, who will review our financial results. Then we will open the call for your questions. I will turn the call over to our President and CEO, Steve Westhoughton. Please go ahead, Steve. Thanks, Adam.

Good morning, everyone. Fiscal 2024 is off to a good start, and we delivered strong performance in the first quarter. Positive momentum continued in the start of the second quarter as energy services outperformed in January, capitalizing on weather volatility. As a result, we are announcing a 15-cent increase in our NFVPS guidance to $2.85 to $3 per share. Before we discuss our quarterly results and forecast more fully, I'll begin with an update on our sustainability and decarbonization efforts on slide five. Last month, we issued NJR's fiscal 2023 corporate sustainability report, our 15th consecutive report dating back to 2008. This report is an important part of our commitment to transparency with all of our stakeholders in the evolving energy landscape. It details our leadership and accomplishments in emissions reduction and renewable energy, as well as our long-term vision for the role of existing pipeline infrastructure in a lower carbon future. Just as important, this year's report also shows how the strong culture of innovation in our organization is having a positive impact on how we execute strategies, engage in dynamic partnerships, and deploy cutting-edge technology in new ways. I'd like to cover just a few of the report's highlights. Last year, we invested approximately $60 million in Safe Green, New Jersey Natural Gas's energy efficiency program. Clean energy ventures continue to innovate, commissioning the largest cap landfill and floating solar arrays in North America. We advanced cutting-edge lower-carbon energy solutions, including the installation of localized carbon capture technology at our Wall, New Jersey headquarters and high-efficiency gas heat pumps at other facilities in the state. And as I mentioned, we engaged in new partnerships with a number of well-known academic and research entities to support our innovation efforts. Finally, NJR was recognized by Newsweek as one of America's most responsible companies for the fifth consecutive year. We hope that you've all had an opportunity to review the report. Moving to the first quarter and year-to-date operating highlights on slide six, We executed our business strategy and delivered net financial earnings of 74 cents per share in the first quarter, which was in line with our expectations. At New Jersey Natural Gas, we filed the base rate case to recover capital investments of approximately $850 million since the settlement of our last rate case in 2021. In addition, New Jersey Natural Gas filed for a new save green program of approximately $482 million, which is the largest energy efficiency filing in our history. At Clean Energy Ventures, we placed another four megawatts into service and continue to grow and diversify our project pipeline. And finally, reported solid contributions from S&T and energy services in line with expectations. Moving to slide seven, in November, we provided an NFEPS initial guidance range of $2.70 per share to $2.85 per share. And as I mentioned earlier, we benefited from our outperformance in energy services during the January weather event that allowed us to raise our NFEPS 2024 NFEPS guidance by $0.15 to $2.85 to $3 per share. As discussed in prior calls, we expect fiscal 2024 to exceed our stated 7% to 9% long-term growth rate. Slide 8 shows the expected NFEPS contribution by business segment for fiscal year 2024, which reflects the AMA contribution as well as a significant portion of our net financial earnings coming from our utility business. Looking ahead, we feel comfortable with our long-term growth rate in future years, and we expect to return to a more normalized segment contribution in fiscal 2025. With that, I'll turn to discussion of our business units, beginning on slide nine. We invested $102 million at New Jersey Natural Gas through a variety of programs in the first quarter of fiscal 2024. with 46% of that capex providing near real-time returns. Within that 46% is the Save Green program, as I mentioned earlier, which helps residential and commercial customers lower their energy usage. We spent approximately $13 million in the first quarter to help our customers save money and reduce their carbon footprint. Finally, we achieved solid new customer growth during the period, adding approximately 2,100 new customers through the combination of new construction and conversions. Slide 10 provides additional detail on our base rate case filings. On January 31st, we requested an increase of base rates of $222.6 million, equivalent to an increase of approximately $159 million in operating income. Since the conclusion of our last case in 2021, New Jersey Natural Gas has invested nearly $850 million to upgrade and enhance the safety and reliability of our transmission and distribution systems, as well as our IT investments. Moving to slide 11, our solar business, Clean Energy Ventures, followed an exceptional 2023 with continued momentum heading into the new year. We added four megawatts of new solar capacity and continue to grow our pipelines. which now includes approximately 870 megawatts of potential investment options. Over the past few years, we have continued to expand our portfolio geographically with 51% of our pipeline now located outside of New Jersey. Our focus is on delivering solar investment opportunities that provide high single-digit unlevered returns. With that, I'll turn the call to Roberto for a review of our financial results. Roberto?