RGCO - Earnings call transcript Q2 2018

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John D'Orazio

Good morning everyone. Welcome to RGC Resources Second Quarter Earnings Call. I'm John D'Orazio, President and CEO of RGC Resources. Thank you for taking the time out of your day to attend. Please mute your question and hold your questions until the completion of the presentation. today's the available page. Investor to at our link on rgcresources.com and the presentation on is website Also Financial Information

we reminder on a begin, statements Before shown as on Slide forward-looking X. just

financial Slide X, and to operational for Moving on highlights, questions. we outlook to our any review plan key and take XXXX,

$XXX,XXX per reform. a $X.XX, year-to-date quarter and share per Our one-time earnings on charge $X.XX shown tax earnings are second includes related as share are which non-cash of fiscal to Slide X,

Excluding year-to-date a have per charge, the $X.XX share been XXXX. would one-time share per earnings of which $X.XX is ahead

cover quarter later will year-to-date in financial We results more second the presentation. and

one We continued us proceeds have equity be to regulated rise in million public completed support growth $XX primarily a allows from our which strategies offering of in investment utility key is the grow a mid-March. which will earnings. The to rate-based successfully used

meter million second was attributed second capital the slightly customer are The over to in regulated AMR period spent Slide $X.X invested a to $X.X to due million on replacement, utility Slide X the on decrease XXXX shows on AMR or other project. elevated spending. needs. million million our spending due primarily and Again we projects. decline in $X was infrastructure quarter-to-quarter the automated $X $X.X in the X, reading year. a Approximately million capital we quarter highlights, growth, last As same year-to-date behind XXXX quarter,

increasing strategy growth is key margins to second growth. customer Our

residential volumes Slide period our increased quarter increased the year; XX% compared significance in increased second of commercial last our XXX have X. XX% compared Top commercial last growth, XX% year-to-date the same usage X%. XX increased volumes the shown to period and Slide Slide in and added experience volumes On X, customers same year. X, the We to second our XXX added customer to customers and steady our as continue year-to-date. On industrial We quarter on customer

Our strategy component the investment is Mountain in third the growth Valley Pipeline.

underway supports is quarter, a calendar stay invested credit XXXX. the this We from facility announced which also lower April, at are million $XX expand the In borrowing second were to $X.X end billion and was April that XX The project. service facility with Slide able renegotiated the targeted expansion to we cost we We us project. a MVP Construction takes Slide on of in the XX. early XX. and million by In to basis points. the Southgate in $XX

project service and to expansion we the proposed the it We is MVP a speaks The will will will PSNC XX-mile Carolina. Transco is and expand Southgate shipper. of Energy Station the are The Central date Southgate about anchor current believe connect it a pipeline expansion targeted will excited strength and Mainline in XXXX. the the markets serve. North XXX an be that and

would the Paul introduce I will Nester, Financial and our to Chief he like results. financial second Now quarter year-to-date Officer, review

Paul Nester

John. you, Thank

Slide For those we along following XX. on via are of you webcast,

earnings industrial customer margins adjustment, MVP gross prior still Rider growth, tax this the in $XXX,XXX year-to-date. the reform to the Equity volume. the project. adjustment. Year-to-date Gross below prior Equity SAVE year For the due year-to-date approximately Mountain rider increased over Pipeline revenue, $XXX,XXX is tax investment in due $XX,XXX without $XXX,XXX replacement which $XXX,XXX to reform are reform to the margin investment increased increasing increased in gross margins due tax primarily SAVE adjustment. in XXXX the approximately second or than the customer the $XXX,XXX included and to $XXX,XXX margin a year Valley tax due our approximately have the primarily prior industrial gross increases Without increased the in adjustment volume. revenue, growth, infrastructure higher and quarter year increases earnings over

Our flat the core year-to-date. and quarter operating expenses are in

However, our second higher on increased to second borrowings quarter project. capital expenditure large rate. overhead quarter related This had year-to-date the XXXX and as in approximately a and higher John Interest AMR expense $XXX,XXX in earlier, the increased capitalization $XXX,XXX discussed we in XXXX.

earnings. let's Now review were compared They prior in briefly the $X.XX $X.XX our trailing XX-month period. to

I'll the first John charge tax back per one-time XXXX reported outlook. discuss At Excluding earnings would improved this to $X.XX the share. X.X% to in have quarter, the to it point, hand

John D'Orazio

Paul. you, Thank

capital review Slide our XX. expenditure Let's projections on

XX% of and $XX customer $X.X the We approximately our our to on in fiscal XXXX, anticipate of focus We Further, an in from XXXX. investing are maintaining increase million million approximately spending. XXXX. $XX we capital of growth replacement for spend remainder infrastructure representing million plan fiscal MVP

Finally, our That concludes is now our per from to $X.XX range the fiscal share. XXXX take We'd remarks. any to $X.XX audience. prepared questions earnings like guidance

Mark Levin

Mark are John, Hey, How this is doing? Levin. you

John D'Orazio

are Hi, Mark. Good, how you?

Mark Levin

I'm doing doing well, thank great, you.

quick on. of couple a questions just So

when First housekeeping, is file Q? you to guys your expect

John D'Orazio

We Monday. to our on plan file Q

Mark Levin

got Monday, On it.

guess one. this. easy. But with I easy we will start so the all Okay, they’re that’s

of do to So in XXXX, you and year-over-year puts what some particular thinking it the are increase the of takes is item? line in and appropriate terms think that maybe what O&M about expense be in

Paul Nester

morning. How good are you? Mark, is This Paul. Hey

Mark Levin

fine, I'm How Paul. are you?

Paul Nester

by Doing okay. fiscal year, think be one take it's the really that end good. of we're I'll going Mark. We if flat to the

allow year-to-date level as heavier than spending, have first half of the in John the we capitalize going overheads to year through of mentioned, should which March. half be a and capital the us to is Our second greater

rest can fiscal optimistic the continue we're manage the through to year. So those expenses we that of

Mark Levin

$X.XX XXXX, of this by then, And you service then above great. year-over-year? update where key the $X.XX in of maybe that that Can a drivers what $X.XX your XXXX. to like for you maybe are it’s or maybe about incremental about get I is expect finish on bit little think project to about end the are or guidance your That's that you think talk you -- year. the $X.XX the just And on when an -- degree the investment MVP confidence

Paul Nester

great a that's Yes, question.

the state all challenges the project place opposition federal, to is and some that like. key scheduling some from quarter For XXXX to kind the But the on notices proceed have the in project. And team or are you know in has there a permitting this toward circumstance. their contingency as portions calendar management plans of some since had press service these project they significant three the with in obviously And FERC some including are still of in for of received Mountain were working sitters contingency Valley there delays. last built-in of

they've and XXXX to feel that we schedule got So a continue pretty in to plan we'll proceed a good confident and good service.

John D'Orazio

it they the at confident recent in that conversation of service are fairly will them, be Yes, Mark in most our end XXXX. with

feel good we So about that.

Paul Nester

Yes, cold Southwest a in wet here hopefully it’s spring been Virginia.

construction to back So a be it is on helpful. bit and little dry going that can get to allow schedule, out

So we how progresses. will see it

Mountain the of has in Your XXXX; little projections Coming to a a procedural bit delays the due the investment second question the permitting fiscal of key the our is on lot original half year higher year in of a that growth the out half their fiscal of the driver. were investments lagged. Valley there MVP the first key and certainly the first delays for drivers on XXXX in

we spend pick-up Mountain CapEx on some we see We'll nice our $XX horizon. a still year Valley year-over-year investments and lift have from have also then continued from plan this some XXXX investment. be in the million rate-based still will there customer reasonable our versus -- to So XXXX the we growth

Mark Levin

you color. thank the Great, Appreciate guys.

Paul Nester

you. Thank

John D'Orazio

great has All Thank I a there for everyone questions? no hope want everybody and you. questions, Are I more further any you. weekend. attending right. With thank to Thank

RGC Resources (RGCO) 5 May 182018 Q2 Earnings call transcript