New Jersey Resources (NJR) 9 May 212021 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the New Jersey Resources Second Quarter Fiscal 2021 Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Dennis Puma, Director of Investor Relations. Please go ahead.

Okay. good and Christie, you, morning, everyone. Thank New Call and to Jersey Resources Conference XXXX Fiscal Quarter Webcast. Second Welcome I'm joined Chief here CEO; today of by Steve Westhoven, team. management our well other Vice our as senior Pat our Senior President Officer; and Financial as members Migliaccio, President and

basis you statements the listeners caution the call beliefs of call that in As expectations, contain forward-looking assumptions other forming We and know, securities our the within laws. certain current and statements meaning today's estimates for of the forward-looking cause statements be that also X. factors expectations, are beyond or estimate Slide our control can include many materially found our ability in precisely. results from on herein earnings items to future This differ believe the our found could furnished our that forward-looking and as such a These obligation this assume forward-looking earnings, performance. We as Q today's X-K to NFE. in measures do particular SEC. and complete XX-K understanding statement, or or release most more light net financial also referenced Forms filed by events. be revise Form in NFE with as to the any review non-GAAP of financial statement not, financial We on statements section this certain referring of recent including We'll provides of any to

However, it is not intended to be a substitute for GAAP.

seven XX-K. our of financial non-GAAP Item more are measures in Our fully discussed

with said, to Steve President turn highlights furnished are call we'll for and presentation the our today call up morning. for With CEO, the review available that open The website with today's I'll today's were agenda slides is followed this on Our from questions. and call begin Steve? filed by X. found your the Slide Then Form who will X-K quarter, SEC on our results. the Westhoven. financial will over our Pat, accompanying Steve on

shareowners. On financial quarter everyone. the more morning, has Thank you take strong Slide joining $X.XX our through good our business. performance you Services reported year's of XXXX, per NJR X, us by highlights. last and net primarily quarter driven delivered Energy second through performance earnings Midway Thanks, second share, fiscal I'll results, for for at doubling Dennis, This morning, today. than we

placed includes of into this enabled provide share is of Southern combination second per which Link, of led of U.S. the the to across $X.XX business next quarter, in year unusually of our strategically natural geographically range performance unprecedented later as $X.XX cold case. value this color its provide original drivers during the Natural XX-year demand provides to for December, fiscal diverse option to time widespread Jersey the for the NFE guidance illustrates to that more share. past, million call. agreement of Gas, limited to slide. in for Storage $X.XX in assets from be on Services I'll proposition contribution and XXXX volatility. And revenues, guidance Energy During to us fee-based Transportation Services long we announced Energy will business periods management Energy risk, performance This gas. $XXX year. at the At & investments almost detailed to Services' Energy rate from a behind XX% $X.XX costs complete the our increase infrastructure our more located a a to high asset an the of strategy. the New we in and with time outsized last of look service model. our per strategy upside for associated Pat fiscal case the enabled second as the high rate of such settlement meet The of The generation customers needs filed more powerful recover The Services the expected base a of in a over the this Reliability

save Gas Natural their Jersey over megawatts At adding into carbon commitment rollout Energy customers received $XXX our energy lower years, to commercial installed program of completed furthering money sustainability of three and their we Ventures, reduce XXXX, authorized begin SAVEGREEN is to solar this usage, footprint. for by project in expected New our This largest-ever the million first approval year. spending new The efficiency program capacity. helping service, Clean program. our energy X.X

River, in our all doubling during installed customer our Gateway Adelphia located of of to February FERC And and challenging projects of Pennsylvania necessary to zone. Adelphia develop the well goal fiscal the our Gateway capacity to pipeline our weather our commitments is Leaf achieve to we under continue Mississippi, of circumstances. facility performed We has storage meeting proceed South of working construction XXXX. by end obtain finally, construction permits very laterals. of all notice DEP for received event, continued

the number the into service of of a by the end expect year. place facilities We project to

to Turning Slide X.

increasing to March are $X.XX update. share NFE to We per our $X.XX XX XXXX compared an fiscal share, our of per $X.XX guidance to increase

customers increase to estimated negatively from payment the impacted all one Energy revision to weather by guidance guidance's bankruptcy. apart debt incorporated customers February initial by bad event. Today's reflects Services Our any due account Energy of upwards for Services

long-term NFE and XXXX unchanged. guidance remains fiscal Our

growth the detail the case has for Gas requested On And million for income. filing. we base rate to XXXX, per increase provides share. our in to will fiscal and of review invested additional cost This to that systems. Link on installation Natural equivalent Southern of be XX, Since hope BPU's highlights of and a long-term case maintaining Jersey $XXX through operating Gas. complete last our of look our customers the $XXX the is interest Natural reliability than million. before million XXXX. base conclusion NFE, We at X% and March announced Slide filing you our XXXX New New X of XXXX of We I'll As safety an services. fiscal X, $XXX.X Reliability hedged a increase and annual Slide at of million, nearly transmission upgrade $XXX company. to excluding of of our the On the includes to successful guidance enhance end the $X.XX some our forward Jersey to the of we of conclusion rates distribution a rate reminder, more in an take are operational $X.XX XX%

We regular rate top the due customers X,XXX left, at of $XXX months year the over almost to real-time fiscal our year, new the the ongoing added with of XX% first Looking growth we providing million this invested CapEx returns. below near six about the pandemic.

three-year XX,XXX XXXX. to during add fiscal the to XXXX we to period However, from new still customers expect XX,XXX approximately

As Energy On I I'll operational to take Slide construction you progress of Clean on mentioned continues earlier, the highlights Ventures. SRL as through well. X,

November quarter, for we solar have the first our This invested discussed completed out-of-state during the the installed investment During but over Day. megawatts noteworthy in Total on We project a was we Connecticut. executing first months now six strategy is capital XXX step at regional our CEV Analyst small toward $XX capacity. of million.

permitting a the beginning to in-service of pandemic. We as related expect some the to XXXX to fiscal shift of beginning of the interconnection delays and fiscal XXXX see result dates from

capacity the of revenue which SREC for our expected significant our goal However, of XXXX. track of bottom XXXX, secured portion fiscal year megawatts right hedging shows of adding fiscal a to end CEV to is on meet The we by incremental through XXX program. XXX remain our

adjusted revenue. toward we to these capital year, affecting our service fiscal this While forecast scheduled of projects end of be most expected the for were in marginally the year,

X. to take I turn want Sustainability the Pat, our over January, In on our update Report. an a on issued to Slide call XXXX I initiatives we Before provide to moment Corporate sustainability

NJR's program, Gas' to from that a ecosystems that support chapter in work atmosphere, Jersey solutions the first local-based we communities Association's it time, the dioxide are frameworks, transparency and the significant carbon program Bay, coastline Standards restoration with Conservancy New line of impact and of tidal furthering of territory. we areas wetlands in American on Jersey remove carbon storing matters. this Gas in past to have now first on the Initiative. sinks service Nature be Barnegat I'll CCI's the And And this disclosures financials. This supports Natural soil. Sustainability saltwater part month, Pat? the These Earth Pat as surge, also endeavor ground they that communities. our includes commitment For in climate to launched to Accounting the will the over the act The the reporting barriers ESG with Coastal Climate New year's report Day storm protecting And new mitigate call on people an serve. Board, natural the turn SASB, coastal to sustainability and our through go properties

of the Slide Thanks, XX Steve, second for quarter. and our NFE shows drivers good everyone. main morning, the

slide. last around financial the quarter take partly detail Storage and the the our to per compared the improved and illustrates $XXX.X in operation, increase gross process was to related CEV's next Services increased & quarter how flat you an during were gas for method and able accounting assets of deferral temperatures the technology margin that income partially as relating Energy year. As to in now usually NFE to which that Through NFE abnormal Services credits saw to drove Slide periods. storage in the comparable Services loan due expenses expense. compared which utility compensation offset holds a to markets revenue. CEV most Leaf through of Transportation natural weather or Services operating the these which hub Reported from fiscal last performance high in assets by by a to lower in was Gulf was also supply recast weather, share share primarily in this higher a higher million variety NFE year, investment event Energy strong to loan we're February higher of River due quarter, during colder due the The XX customers, million for Energy provides and, during on $X.XX Energy or period XXXX. such, margin. second at compared and the I'll utilizing storage services the natural $XX.X $X.XX reminder, additional Mid-Continent of of NFE to details high and per profitability. Energy primarily for of NFE Services resulted was using to – there turn gas, basically satisfy increased tax was demand NJNG's regions. financials demand $XX the to million

and take some plan changes the Turning XXXX of for fiscal capital in to Slide our XX, we'll through XXXX. you

to capital adjusted As plan some to in-service accordingly. due We've see pandemic. related shift Steve for dates mentioned to delays starting CEV projects XXXX interconnection fiscal our permitting earlier, and we're certain to of the

and For million forecast at to spend of $XX fiscal compared CEV million. $XXX XXXX, between expect prior $XXX we our million to approximately now

what XXXX. be to the by impacted and represents of We our change about factor next can for of goal the of expect hour. expect of TREC And in have XXX earn in-service fiscal million, for for fraction targeted projects capacity shift to and impact related in capital. project largely our capital the pipeline XX% minimally the megawatts two XXXX for dates the CapEx pipeline XX, out-of-state to important XXXX to shifting the still in fiscal to majority the projects. However, XXX Jersey, is you the to also per And Slide expected XXXX fiscal is two-year were previously. unaffected projects one-third our which simply an ITTs been see Revenues On kilowatt over average will year. have the X.X of note New of of methods, NFE a adding reach with product It's will period. currently fiscal of be the the end financing our was accounting our $XXX Approximately toward would that given we years.

projections. XX, Slide update to financing cash to our can flows you Turning the and see

hedging no Our rating On aside with outlook. equity NJNG's program. for normal with highlighted DRIP XX, details future our foreseeable we've of of our flows, stable slide investment-grade Fitch our cash cash flow from the operations needs a credit remained the SREC from strength program. Demonstrating the strong, affirmed recently

well-hedged in energy the As see, we you next can years. are three

for XXXX the We XXXX we've SACP, hedged XXXX now remarks. pricing, and the for volumes energy SRECs And able years to years are of hedged. four time, and fundamentals our XXXX been hedge have XX% to market five strong out. hand first XX% XX% XXXX, trading for I'll and of supporting to Steve some above back at SREC call XX% with for respectively. closing The or with

Pat. Thanks,

and fiscal to year to I open notice increase call to pipeline year, guidance of proceed for for we to Adelphia I'll the for our of Gateway. allow the received like will that end I'd including year. flexibility us a Before for SRL, want NJR reinvest strong the a our filed work XXXX, program. over-performance costs adding from Energy permits for Through by Pennsylvania thank XXX fiscal to through reach of projects We associated case of our of And of the SAVEGREEN investments, to for I received the approval the capacity results. quarter. first energy summarize questions. of us half first XXX XXXX. construction FERC employees laterals our largest-ever call provides to necessary now the of this all efficiency allowed to goal to delivered their the The with DEP all questions, Services And megawatts open the and our half hard the in the file for with rate recover has business. our strong CEV infrastructure

[Operator with line will question the come Gabriel Mizuho. Your Instructions] from Moreen of

the cash recent wanted ask to the guidance. ops flow year. on for first much from I just So

you to than if midpoint the from $XX you I I'm – think compared benefit last the raised by that quarter, Services. little a less Obviously, million, that's Energy right. reading

you wondering that speak bit if a So first. to can I'm little just

is Hi Migliaccio. Pat Gabe, this

than by You're related $XX Energy million, tweaks less is couple the of about there, guidance from what operations a is There in little correct, minor majority change just a which other of increased Services. the raised. cash the but are ultimate to bit

Is with those noticed you? that of On Thanks cost you kind cost up first a about I terms speak to of stay confident finish last where can of kind have of to up talk is bit. the you recoverability Maybe project? this could increases, costs of SRL, if the your then couple – percentage also that little Okay. I are of something to you some on in of And your moved Pat. all, projects. the

Steve. this Gabe, is Yes,

resiliency, we So costs. ahead so about finished project. to out. BPU, project expect go Superstorm and for this is is all really approved the case the certainly recovery been to complete, Sandy borne all yes, project towards recover how permits. necessary XX% at all those this through the recovery. a this by almost indications has the process for of rate turns need lot received point point. We'll and for And Remember, And the of see But support so see it

from in to shifted of collaterals of And FERC the Thanks expecting start the project? terms has construction, that then it. Got Steve. service, on you're and at Adelphia, permits in getting the the terms timing all in

I a think it too maybe by hasn't shifted month or two. much,

will. has financial contracts have margins So little but the to But what at bit associated service going start you in will that guidance anything project, certain portions are end we're we our if that a is. going year. with detail come of the the changing projects on in, from adjusted slightly, construction a of not is It shifting the the construction slightly, been of

Gabe.

CapEx $XX the XXXX that. $XX just a just Adelphia change that XXXX, shift million, Gateway from look the modest some of to capital, did We in on amount that noticed project at schedules, the components a of fiscal probably minor project. of fiscal You million those to take reflecting

are winter but you I guess, there That's just performed Leaf I during don't sounds just on one helpful. customers expansion asset like asset? contract as contracted, seeing well it at it's this, what And value Clearly, far the know last mostly on I in, know, an maybe storm. as, or from update River. interest the

extreme knows Yes. weather that February. it in event in down well. was place Everybody The asset very took an region performed

provide. some pumps they were some pleased earnings in we're pretty So services some due to to – able short-term with

reliability all you book have but market more drive that, forward, real As in expect would into in are that down would We values. that to higher that looking in for to yet, look reliability forward. need users certainly, bring some you fiscal their utilities expect asset I would going don't anything report the users, area that

Steve. Thanks

comes Morningstar. question with from Miller of next line Travis Your the

morning everyone. Good

Travis. Hi

then derisked would that two such recently in through Services, Energy it that talked even One, and gone Had derisking games past the you your the you here questions larger? have I already You've not line. been about have on of guess delta, in scenario of we started normal as future And or over type process a two, derisking guess, right, events, would expect level, derisking it? what this the I kind all out? even is you've laid extreme on

a range. I wish amount go before. of the see, that the question going in per even look down something. if you be were as type you to you We've could historically, what prices in would or would think across at or the that $X,XXX and answer $XXX area, if volatility. accurately expect far that delta back they you But be never I U.S. in as up get what I high would period MMBtu experienced that the can And look you're

it higher. So was definitely multiple times

predict trying think hard future. to very, be predict something the to very that I volatility So would in forward is

the all agreement your XXXX the I in frame. had XXXX, the AMA to start back we first book. of assets part The time question, until end of think our doesn't

So the transport number assets is really component we're and But are utilized going book. from remember was in see we all assets perspective. future, largest the a the the in And the year portfolio be storage kind management going going to contributor centered that asset are a that books, the the P&L assets. to so that to this around of agreement that full of forward, thought of

Okay.

under still that optionality? So want your would the keep even to have you optionality you do derisking strategy,

be still needs there's in yes. a future, managed significant to the going to be that portfolio If

financing that debt your or about plan a on Okay. share program? balance Is as sheet? you And of are then that Ventures, taking do CapEx your on how project Energy on it the larger thinking it you becomes Clean

Pat Migliaccio. this Travis, is

a laid we get is methodology. of our it receive, equity number thing. have market about all through private all will investments. for at that that of out tax years does kind station solar what And we But commercial. still projects financing on optionality sale-leaseback. we XXXX, how to now, of sheet, considered nonregulated for we tax we terms balance commercial in Analyst out, the XXXX, select going sale-leaseback think we favorable structures as, out as and treatment how be plan more to you our it's that terms Fitch to equity financed although Day in of some And of with Once from describe residential, our other So then the finance is have I'll

Very all That’s thank I Okay. have, you. good.

All Travis. right, thanks

are no There closing further at time. questions Are remarks? this any there

everyone Thank thank Christie. And joining Yes. you, us to want this morning. for I

a As Resources. to for a you. and thank our reminder, investment interest this want Thank I Also, is recording call your of New website. available in Goodbye. on Jersey you

This concludes Thank you today’s conference participating. for call.

You may disconnect. now