NJR - Earnings call transcript Q1 2019 | New Jersey Resources Corporation

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Operator

Good morning and welcome to The New Jersey Resources First Quarter Fiscal 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Dennis Puma, Director of Investor Relations. ahead. go Please

Dennis Puma

and and as Resources Kate, webcast. everyone. to our and team. our Welcome joined our management Pat Thank Vice senior as Senior quarter good other fiscal Jersey President President Westhoven, Steve first today Financial and Operating XXXX New Officer; here Migliaccio, Officer you, Chief by morning Chief well conference I'm of call members

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

be will of NFE. financial non-GAAP understanding certain X, performance. measures net to more Slide that believe We or referring NFE financial financial as to earnings we provides Turning our complete such a

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

that slides today's on and Westhoven. I'd over Web also Steve? XX-K. like President turn on available to call that X are presentation on our With non-GAAP out which to said, COO, Form this in site Form accompanying fully are are and point to measures item morning. filed Steve furnished financial Our there like the X-K were I'd discussed more our our

Steve Westhoven

review to a morning. from Hopefully our good this you've morning chance Thanks all everyone. Dennis earnings and had release

Before our to quarter, for the gas clean I'd focusing by on outlook. we strategic demand grow. natural results for like discuss to cost the The continues begin today low

of service. Here heated to reliable gas four homes in obligation and three provide Jersey is it natural safe, our New with out are

flexibility operational and this, our each our provide enhance and and enhance million safety, to programs grow maintain we As a natural fact invested send The weather Jersey. of largest gas in vital, strengthen business infrastructure represents to designed resiliency system New cold invest now capacity. and in SRL XXX,XXX and RISE programs our our produced investments we demand, project, in the in NJ our To day are history. as resiliency. our overall highest recently result, designed the in year $XXX $XXX of To retail will have network. we days one of portion pipeline Safe have to meet infrastructure and accomplish we system total integrity over experienced serve and spend over in to we Through excess our distribution customers extreme out the and peak million

apparent. As add to becomes we only supply the additional customers, more continue new for need

Our this to and demand midstream designed infrastructure include Gateway Adelphia low cost PennEast natural constrained investment gas are to help provide currently which and markets. meet supply

and they projects additional assess will themselves. the We opportunities as space in present midstream

opportunities. markets natural gas of deep understanding position well wholesale as Our for future

clean we role play prominent policy focused on recognize in will New forward, energy look we the state's future. a that As Jersey's

million invested will about Jersey commercial $XXX We residential in To-date, about focus of megawatts and solar markets. the we on capacity. continue XXX and have have to New installed solar

investments achieving important gas we ongoing $XXX expect investments spend clean goal. a play will on state continues in growth natural role the which clean path over strategic distribution, to midstream million future. and enhanced position XXXX. well sustainability and renewables, the energy and Jersey's clean support total, energy energy As towards this New our an resiliency on fiscal to affordable to In move future, The projects us in

New distribution and challenge the to reduce opportunities integrity. methane join in emissions Jersey first became company In program at fact the of EPA's Natural the New recently and to strengthen one Jersey both look Gas emissions future which system

As you our provide remain growth a have can on see returns. for shareholders we strong executing attractive focused our to and with foundation strategy

We to reported the $X.XX $X.XX X, share go highlights earnings last Slide of first the share to over I'd the per per like compared net Moving key to from financial quarter. year.

the a you significant Gas, of and performance the tax and start effects milestone, date of We project. recall expect year's in At of currently XXXX. that miles included Jersey of the services. up XX our the first results energy reform early New Natural SRL If last achieved in-service we construction

current nearly margin rates gross utility customers to pace XX,XXX $XX this million. cumulative new of reach added add also XXXX We quarter on XX,XXX based are will of new And over on goal this our the next years. to approximately three additions

also the have Adelphia which Gateway XXXX. remain to We from optimistic in will through process move no two the in in our be and in service found project environmental FERC positive environmental manner midstream significant had Adelphia assessment that a its timely business. FERC developments We approval received impact.

District more application ruling completed the is a total megawatts And financial on like XX be energy properties currently we clean to its process to the turn ventures would solar surveys. service granting installations to four New to over Department in six from update project capacity. and favorable for of year Pat of project PennEast land of over with to into Protection. two the performance. complete totaling and call Court survey Environmental the in the The place will commercial details finally, For to projects Jersey this completed will required add New receive XX.X underway Jersey a access the megawatts I'd when now some projects capacity expect our

Pat Migliaccio

Slide XXXX to net earnings financial X, the expected can range of each business our good of NFE future you our of breakdown $X.XX reaffirmed see the On fiscal Steve per and morning we contributions segments. from Thanks share. everyone. guidance Today $X.XX

total of to investments to our Our customer the regulated infrastructure businesses earnings will growth. continue majority re-buy ride and

the Looking on NJ midstream and the contribute chart to and Energy XX% between to XX%. expect business XX% to pie X% the we contribute left, at between

we to recall, As year XX% contribute two this expect and between reasons is years. you are CEV prior There may XX%, than for which this. higher

of of sales the First a advantage to symmetric take align tax able XXXX. to we're lower rate, to timing

associated Second, year. in we of is with commercial our service placed solar the this recognize a expect all projects to ITC

in XX% on beyond CEV to expect a XX% We fiscal to depicted right. and more normalized range the of chart XXXX return the to by

on to higher There sustained and in could O&M effects the to percent In expenses due changes for XX% provides weather cold reform each degree to you Gas X days X% degree heating degree fiscal in you prices dramatic also a cold and Jersey end Natural of to expect see Slide tax and of remitted lower of illustrate for energy days slightly as TETCO principal breakdown to of services volatility contribute To comparison due our which due in the VGSS related Slide can volatility down X, the also point, primarily lower the inclination to fiscal extreme heating New pricing heating led quarter. daily increase is is that of fiscal results. ventures two incentives. between lack weather a subsidiaries decreased Energy have Decembers, cold on a year-over-year first were We versus prices for MX weather services XXXX less related this month. and a volatility. compared due from last our the to prices last Midstream further the of contrast, extreme at the XXXX see to days sustained we and year. in year-to-year XXXX

results are profitability during As in Slide We on of lock natural for the of energy a because reduced hedge decrease years. in to of SREC result pricing quarter. and spreads this SREC hedging strategy future our X. production narrow market revenue services highlighted the actively gas energy volatility The

over XXXX see, an and $XXX of construction of for can XX% price sales XXXX, under hedged currently average facilities per our energy you SREC are years operational As and SREC. from over

year energy For XX% the XXXX, $XXX. is amount at hedged

increase. auction, prevailing year price approximately begin last energy approach February's market earnings SREC particular, we As seen to has compared report. XX% the our by of BGC with we increased as prices XXXX have In

As a result, we have already begun energy year hedging XXXX.

year with focus XXXX to our fiscal in on the a will update shows We ratios hedge for Slide years. our capital energy X hedge increasing continue outer spending NJNG.

near on a case, XX% our projects provide about The return our remaining be return immediate is than [indiscernible] year. rate November quarter on of real-time to the later For no this filed which or related spend will balance to of investment.

status project and capital XX. You could and see CEV midstream our on Slide spending

service first into mentioned placed investment. in CEV totaling of during we our projects million approximately Steve two segment, quarter As $XX the

year XXXX. investment install eligible to fiscal We our total to expect this projects ITC bringing four for $XXX additional million solar

million a invested Adelphia projects total our PennEast and segment also gateway. We $X.X of midstream in

Moving flows I to million dividend approximately our new of equity update including Respect you financial proceeds on to fiscal cash reinvestment Slide this $XX and our from want XX, to raise projections. program. year

of Steve flows 'XX billion operations for one $X targets. plans our closing and our turn capital to dividend program Our capital by help and back finance now 'XX the strong is investments remarks. some anchored reinvestment growth will fiscal from over that call I'll are cash dividend of in excess for

Steve Westhoven

joining you all thank and us Pat Thanks for today.

successful quarter. to another I'd hard for thank work our our like you their performance. see As we've can that had employees drives

ensure and our the We questions. to executing call to grow we're for customers, I'd to to great service performance like and safe, open deliver have now strategy our shareholders. a dedicated our our team business reliable for

Operator

Miller Please We session. Instructions] will from Morningstar. go [Operator now is first Travis begin ahead. question the The question-and-answer of

Travis Miller

you. Thank morning. Good

Pat Migliaccio

Good morning, Travis.

Steve Westhoven

Travis. Hey,

Travis Miller

had last a I to of the weather what to the operationally polar or you've wonder compare couple and years and year ago? last cold could vortex seen week relative contrast even just we financially or going you if back

Steve Westhoven

Hey, Steve. Travis. This is

immediate to and weather the think that we've afterwards. if some market, we had is experienced of they up has would pipelines place that's it taken little compare a normally cold have operational that on the essentially that right taken that certainly a And back you experience sustained the the bit reduced even issues of off cold lightened when pressure the difference that the previous period. is volatility spell big warming I

to compare if we're periods. were to kind I So between it previous now think of the and fundamental that's what you difference experiencing

Pat Migliaccio

Pat up this Migliaccio. Travis, is weather earnings our We through certainly all reaffirming considered January this into guidance morning. the

Travis Miller

Okay.

give to on then of And switching competition, you're the seeing you're the SREC solar. like about NASDAQ's you seeing what are if wonder you stronger. could through pricing talked seeing competition. more wonder could the great. SRECs that's maybe I not there relationship and more kind a sense being are you there are for Okay, on and or any you if talk I competition why reflected you as any and competition just more if the seeing

Steve Westhoven

I So, the Travis, It's think it's same same. market. the still still

situations but have You a certain year the And market. of Pat take participants the there lot you every in that. that occur I'll through same let are

Pat Migliaccio

the with is likely the Travis and created of driven where SRECs. short fundamentals by energy the passing that situation that's in of SREC demand And for remember year a May XXXX market essentially supply SRECs. leased the legislation the XXXX for market are the and

creates so reflected the hedge the during not XXs and starting but is upward just pricing auction only which that period some the we've well. to also the in of vintage that pressure we're BGS now as And XXs seen on

Travis Miller

appreciate I great. the Okay, answers.

Steve Westhoven

Travis. Thanks

Operator

Please Lynch. is Merrill question Dennis of ahead. next Bank from The go America Coleman of

Dennis Coleman

everyone. Good Yes. Thanks. morning

to I different to done me. SRL rate try that. that fits how little and service I one so of rate -- get am for the that's wondering if little with in plan back you just seems I logistics couple just bit a is case include it comment the little been a Just maybe and moved bit that's maybe has can was thought like and case. a guess in bit on the a

Steve Westhoven

that's Dennis, still the No, plan.

to to of case include So of remember rate completion months SRL. test the six the end rate the but that base that year. we're we with regulation, to additions are with November XXXX, New after up Recall we Jersey in will file file the required permitted within a the up of sync

SRL And so the in include timing to of case that be and the that. how rate influences both we'd able

Dennis Coleman

some Perfect. closing? but environmental And had that. once I then I that the at file still you guess you FERC. to do get Thanks. approval on then to proceed Adelphia, for got Then forgotten And permit, the you've work also

Steve Westhoven

from we'll That's right. transfer Tallinn Adelphia expect then, in from our be like a customers FERC southern We serving January then that regulated operation then the project that received then and second fall over to ownership our able and quarter environmental we pipeline become FERC into natural we'll on the and fall receive gas final we to begin once this to that over FERC assessment And certificate the converted jurisdiction, timeframe. Xth receive FERC Gateway. the spring jurisdiction, And portion and in then, will FERC under construction of the immediately those future. at customers point on that'll IEC line

Dennis Coleman

said understand second it, Got Steve. to fiscal quarter? just make second And you talking you're sure Thanks. I quarter

Steve Westhoven

Yes.

Dennis Coleman

Okay.

Steve Westhoven

of it'll months about, to assessment like XX X, actually after are very you it's spring. sometime assessment. days receive XX around predict. Dennis, the yes, this thumb and so your But Usually it's issued. But schedules days environmental X be rule after hard in was FERCs there environmental

Dennis Coleman

spend then that if you could dollars in I then, Okay. this That's about billion talked helpful. CapEx? for would I dollar to tie just that that guess out billion the be And

Pat Migliaccio

that's Dennis correct.

expect year our always 'XX 'XX. we expect portion fiscal have in construction that to we earnings on occur the contribute stated fiscal the the materially southern So our and that project to in will

Dennis Coleman

Perfect. for That's all I have. the update. Thanks

Pat Migliaccio

Dennis. Thanks

Operator

Your next Management. Investment go D'Ambrisi from question is ahead. Please of Castleton Stephen

Stephen D'Ambrisi

Hey, guys. you? How are

Steve Westhoven

Hey, Steve.

Pat Migliaccio

morning, Good Steve.

Stephen D'Ambrisi

Thanks my question. taking for

I quick for year basically pretty guess the the looks NFE look Act impact. when quarter like by with flat first CEV, was one. up at Just the quarter XXXX I earnings And I guess it for Jobs given surprised guidance had is for first adjusted for Cuts that midpoint of $X.XX. I Tax a

when or that the walk the and how missed. through that guess, year you because a gets comes was of and rest us I timing I that the I SREC in can recognized is So I big think ITCs thing these through impact that think

Steve Westhoven

Yes.

rate of income. how the the in doing with NJR consistent then So are tax Stephen recognize to throughout for remember required amount that ITCs an certain effective we so, and record only forecast we annual we year a

it is So for us. strictly timing

in income credit being recognized second and expect would you'll the of more third that the you So as see quarter benefit. investment tax that tax

Stephen D'Ambrisi

That's all much great. very I guys. had. Thanks Okay,

Operator

I There over Instructions] session. at time. other Dennis turn question-and-answer [Operator would Puma This are remarks. closing no like for this back conference to questions to concludes our the

Dennis Puma

Okay. Thank Kate. you,

to thank this for wanted us morning. everyone Just joining

replay is for on a this reminder of recording Web call As available our site.

and As always Jersey investment we interest in Thanks. New appreciate your Resources. Bye.

Operator

now conference The today's you for presentation. concluded. has Thank attending

You may now disconnect.

New Jersey Resources (NJR) 6 Feb 192019 Q1 Earnings call transcript