RGCO - Earnings call transcript Q2 2019

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John D'Orazio

Good morning. I'm John D'Orazio, President and CEO of RGC Resources, Inc. Welcome and thank you for joining us as we discuss RGC Resources' Second Quarter 2019 Results.

First, I would like to go over a few administrative items. [Operator Instructions] The link to today's presentation is available on our Investor & Financial Information page on our website at www.rgcresources.com. with slide reminder X. presentation as forward-looking the on shown begin a on quick statements, We

outlook end Moving plan operational our to to review XXXX on slide key and X. financial Q&A. with Today, we for and highlights,

a As strong we quarter. very shown X, on slide had

XX% of in XXXX or our will discussed per later financial presentation. an earnings quarter second quarter are $X.XX, results over Second is XXXX. the which share $X.XX improvement Further details be

utility spent to regulated the invested same replacement, $X.X primarily million growth million a other to million customer slide increase second on spending and on As highlights, growth. X% on was a quarter, due elevated capital X we period customer in last approximately infrastructure in over The the needs. change $X.X related million year. $X.X We $X quarter-to-quarter

slide As our due growth. $XXX,XXX spending over XXXX, increased infrastructure first capital replacement approximately year-to-date primarily half and customer of to shown the on X,

steady during slide customer to For to added customer second XXX. bringing the XXX additions X, year-to-date We growth. quarter, we continue experience customers

and in compared XXXX the slide to As quarter the a Over to second Commercial was to volumes X% Despite to slightly increased industrial show and warmer the year. and on slightly consistent as volumes compared X.X% weather prior for on X, the consistent industrial period due total same prior noted XXXX. continue decreased This lines to warmer were increased period-over-period. volumes compared X. growth. slide weather, year-to-date year. Commercial

Paul review financial our to Now to I results. would Nester, Chief introduce Officer, Financial like

Paul Nester

Thank you, John.

X. following along via For we webcast, on you those slide are of

implemented XXXX which year. over resulted to as increases estimated forma offset the last Mountain XXXX in maintenance rate lift, increases quarter earnings expense case, our expenses January were increased rate income results. in favorable is is X, by our expenditures XXXX, same margin This begin due case, in These rate higher increase depreciation Equity investment when by Pipeline approximately the operating construction the inclusion year. to revenue interim in year. provide XXXX rate began to over Other second non-SAVE April an XXXX. as rate $X.X pretax lift our rates rate quarter X, due was case. the refund, $XXX,XXX quarter will to pro in current spending impact primarily revenue last in since We from We effective million. income related Margin Valley second XXXX. the building sharing, non-gas revenue the Operating of the capital base compared various $XXX,XXX net operation in which and well of reviewing

now results over at year-to-date XXXX. by outlook or drivers the impacted of Trailing $X.X Moving Operating Equity income primarily discuss $X.X in remainder on prior increases to million in were XXXX on of or XX due investment revenue and compared the approximately primarily depreciation the increased income delivered to Other most XX% revenue of X $XXX,XXX the the case volumes. and over quarter maintenance combined strong John same year-to-date higher the are the XX%. the $X.X These approximately results. by expenses. lift periods. to increases with the Net million approximately and MVP increased offset for year. to will customer million to earnings income increased from and growth income construction to our operating XX by various increased sharing. the impact due first $XXX,XXX increased project. net our rate due Trailing

John D'Orazio

Paul. you, Thank

expenditure are capital review XXXX, In to track let's fiscal Now on our invest million. approximately projections. we $XX

effect replacement a be and into a in case Gas rates expected is went Roanoke The million The case currently final We its end underway, XX% our in complete. in rate fiscal general $X Mountain order during invested fiscal focus rate field infrastructure slide report the $X.X XXXX. project by in will Pipeline. is investing by the million on the million quarter second to highlighted regulated will with We filed a XXXX, Valley on in remaining staff XX, MVP $XX.X 'XX. with January third As October invested growth. invested project shutdown. X, after back remainder project and customer anticipate year-end. be have proposed utility approximately an $XX audit of million The year-to-date. MVP additional fiscal the quarter. The the of during approximately $XX.X approximately million the We hope winter the is and

per guidance is XXXX fiscal $X.XX concludes Finally, our now to That $X.XX earnings share. our prepared remarks.

the take into We'll cycle, portfolio the agency continue will allowing nearly any And with from with will wherever open advantage is balanced MBS in to market well mortgage earnings opportunities will [Technical seasoned lines. the our Our replicate a diversified that strategy CMBS exist. be portfolio to core and we believe credit audience. questions progress they that further impossible to take today. stream, while the credit of We may we the strong us support Difficulty]

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[Technical balanced, to allocation again in agency XX% will with from …our to On a a try the works. unmute and quarter-over-over. line see basis equity to asset agencies We credit Difficulty] remains assets modest total and that if XX% well increase

Michael Gaugler

Gentlemen?

Paul Nester

are you Mike, to hear able us? Hey

Michael Gaugler

now. am I

Paul Nester

ahead, go can speak. Well, Thank you. you Okay.

John D'Orazio

Sorry about that.

Michael Gaugler

No worries.

us you I think when you to unmuted, line. another kick

I we're fine. think we when unmute,

touch wouldn't your side. just on anything I So

John D'Orazio

not touch going to Okay, you. thank anything. We're

Michael Gaugler

just and areas. Atlantic runs this looking partnership's appears is just Atlantic given some that to be, Coast a And similarly in options Listen, deteriorating what runs, Obviously, slightly it, opinion, I'm just line and my question, additional for issues, expansion for the at where let's if call one is guys. some wondering outlook having to MVP Coast.

Paul Nester

EQM And specifically opportunities X.X the of a there's disclosed the that has for are or you explored. there managing per Mike, pipeline. Bcf the day being volume in And Equitrans opportunity think add - they I day on XX-Q that possibly Thank Yes. shipping recent most that some X.X Midstream disclosed partner, question. their the filing expansion are to

sure So correlation it's obviously, that development I'm any that's to development. that, Coast. has not the positive Atlantic an direct exciting and a

heard those we, expansion the to we haven't details there. there Mountain upside the opportunity some do We believe or But some Valley. frankly, details - the not of about is know yet

Michael Gaugler

that just more you Would at double-stacking? require compression? Or would be looking

Paul Nester

would and also I think Correct. some It disclosed. require publicly compression, that be would

Michael Gaugler

my been rapid I Equitrans. Okay. to apologize, But... season a chance side. at haven't I quick look had a and from earnings It's

Paul Nester

That's first necessary. it apologies and development, a disclosed. been publicly new time No has very again,

Michael Gaugler

All right. I'll gentlemen. you there. stop Thank

Paul Nester

you. Thank

John D'Orazio

Thank quarter If questions, more any again. have right. are this earnings no you All call. there Anybody else questions? our concludes second

RGC Resources (RGCO) 12 May 192019 Q2 Earnings call transcript