Good morning, ladies and gentlemen. Welcome to the New Jersey Resources Fiscal 2023 Second Quarter Conference Call and Webcast. At this time, all participants are in a listen-only mode, and please be advised that this call is being recorded. After the speaker’s prepared remarks, there will be a question-and-answer session. [Operator Instructions] And now at this time, I would like to turn things over to Mr. Adam Prior, Director of Investor Relations. Mr. Prior please go ahead sir.

Thank you. Welcome to New Jersey Resources fiscal 2023 second quarter conference call and webcast. I am joined here today by Steve Westhoven, our President and CEO; Roberto Bel, our Senior Vice President and Chief Financial Officer; as well as other members of our senior management team. Certain statements in today's conference 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 for 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 in slide 1. These items can also be found in the forward-looking statements section of today's earnings release furnished on Form 8-K 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 statement 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 and financial margin 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 seven of our 10-K. The slides accompanying today's presentation are available on our website and were furnished on our Form 8-K filed this morning. Our agenda for today is found on slide 3. Steve will begin with this quarter's highlight, followed by Roberto who will review our financial results. Then we will open it up for your questions. With that said, I will turn the call over to our President and CEO, Steve Westhoven. Please go ahead Steve.

Thanks Adam and good morning everyone. We had another solid quarter, executing our strategy and delivering results in line with our expectations. In addition, we are reiterating our fiscal 2023 NFEPS guidance range of $2.62 to $2.72 per share. Overall, we reported net financial earnings of $1.16 per share in the second quarter of this year. During the first calendar quarter much of the Eastern half of the country experienced the warmest weather in recorded history. But remember our utility New Jersey Natural Gas decoupled, meaning the utility gross margin is insulated from changes due to weather and customer usage. We continue to see a trend in strong customer growth at New Jersey Natural Gas and achieved higher utility gross margin for the period. In addition, we were able to provide cost savings to our customers by issuing a bill credit and lowering rates following the recent decrease in natural gas prices. We will continue to monitor market conditions and use our expertise to manage costs and provide savings to our customers whenever possible. At CEV, we placed an additional six commercial solar projects into service, growing our installed capacity by over 13% since the end of our fiscal year. This increases our total solar in service to 440 megawatts. In our storage and transportation business, we benefited from solid operating performance for the Adelphia Gateway and Leaf River and continue to explore potential organic growth opportunities to maximize those assets. And finally, although the winter was unusually warm, which resulted in lower energy usage Energy Services generated another profitable quarter. Turning to slide 5. As I noted earlier, we are reiterating our fiscal 2023 NFEPS guidance range of $2.62 to $2.72 per share. We initially raised this guidance by $0.20 following our first quarter results due to higher contribution…

Thank you, Steve, and good morning everyone. Slide 9 shows the main drivers of our NFE for the second quarter and first half of fiscal 2023. For the first half of fiscal 2023, we reported a strong year-over-year improvement in our consolidated results. Year-to-date NFE was $22.6 million, or $2.30 per share, compared with $196 million, or $2.04 per share last year. This represents a 13% improvement in our net financial earnings per share for the period. For the second quarter of fiscal 2023, we reported NFE of $112.3 million, or $1.16 per share compared with $130.2 million, or $1.36 per share last year. Through the quarter higher utility gross margin at New Jersey Natural Gas and higher revenues at our S&T and CEV businesses were more than offset by higher depreciation and interest expenses, which now include the impact of Adelphia Gateway being fully placed into service lower financial margin at Energy Services higher expenses related to our IT investments and a $5 million difference in the timing of incentive compensation accruals related to our NPL performance earlier this year. Turning to our capital plan on Slide 10. As we have said before for fiscal year 2023 and 2024, we expect to invest between $1.1 billion and $1.4 billion across the company and our capital plan remains on track to achieve these investment levels. We expect to tighten our CapEx ranges in future quarters, specifically at CEV, as PJM interconnection time lines and the regulatory outcomes on certain New Jersey projects become more clear. We are comfortable with the lower end of our CEV CapEx range for fiscal 2023 and have a number of opportunities that could move us toward the higher end. Our capital projections for fiscal 2023 and 2024 are anchored by strong cash flow from operations and consistent with our long-term NFEPS growth target of 7% to 9%. And while we have no plans to issue block equity our existing dividend reinvestment program includes a waiver discount feature that allows us to raise equity on an opportunistic basis. With that, I will turn the call back to Steve.

Thanks, Roberto. Turning to Slide 11. In March New Jersey's Governor, Phil Murphy announced a series of executive orders with revised plans and targets for the state's clean energy future. We embrace our company's role in transitioning the state to cleaner forms of energy and reaching long-term carbon emissions reduction goals. NJR has been working toward decarbonization and a cleaner energy future for many years and it's executing on our strategy to dramatically reduce greenhouse gas emissions. With the strong encouragement of the state, we have invested billions to reduce emissions through energy efficiency modernize our infrastructure and advance technological innovation. We have had preliminary discussions with the state policymakers. We will continue to collaborate with our regulators and other utilities in the state as these processes unfold. In conclusion, NJR is an energy infrastructure company focusing on meeting the needs of our customers, as well as aligning with the clean energy future. The reaffirmation of our guidance range and long-term growth rates reflects the strength of our complementary portfolio of businesses. But I also want to thank all of our employees for their hard work and contribution. With that, I will now open the call for questions.

Thank you, Mr. Westhoven. [Operator Instructions] We will take our first question this morning from Mr. Richard Sunderland of JPMorgan.

Hi, good morning. Thanks for the time today.

Hi Richard.

Starting with CEV. You saw the shift in CEVs pipeline from New Jersey to out-of-state. Curious if you could speak to how the regional efforts are unfolding and how you see the relative attractiveness of opportunities out-of-state versus in-state at this point and particularly compared back to your expectations a few years ago when you launched this broader initiative?

Yes Richard, thanks for the question. If you go back to our 2020 Investor Day, we highlighted that we have a strategy going forward to diversify our solar investments outside of the state of New Jersey. And that was really based on our ability and the capability that we have built here in the company to be able to invest in this place and certainly provide returns. And then also a little bit of a diversification outside of the State of New Jersey. I think it is healthy to accomplish the capital looking projects and being able to get the highest return. Remember that as we look outside the state we look for a similar risk profile the one that really aligns with our overall company to make sure that the structure really fits in simulates subsidies that are REC credits or feed-in tariffs and things like that. The percentage seems to be around the 50-40 level and we expect that to continue to go forward. So, really a shift that we expected and planned for in our strategy and overall you are seeing some of the success by some of the investments outside of the state of New Jersey.

Got it. That is very helpful context there. Just a quick follow-up on that front. So, in consideration of what you are seeing here in those balance of opportunities could you just revisit again what you are looking for in kind of revising the CapEx outlook here particularly what exactly would move you to the high end in consideration of both New Jersey and these regional opportunities?

Yes, I think for this year we stayed in the range of our CapEx expectations. We feel comfortable at the lower end of the range. Still have a lot of the fiscal year left. And we have got some decent amount of deal flow through this space waiting for regulatory approvals and permits and things like that. So, we stay in the range for what it is but we see potential to be within that range through the end of the year if that is helpful to answer your question.

Got it, certainly. And then shifting gears, could you parse the storage and transportation results a little more finely? Curious what drove the year-over-year decline? And considering you have had some of the I guess hub services outperformance over the past few quarters. Is this now more of a normalized quarterly base for 2Q at least?

So, I am going to ask Roberto to take that question. There is a little bit of a transition from construction going to an active operations.

Yes. Rich this is Roberto. So, I think that the more helpful way to look at this is on a year-to-date basis. And year-to-date actually the business unit is up. And when you part it out and break it into pieces you will see that revenues are actually dramatically up. And what is affecting the quarter in particular you have higher depreciation and amortization because remember Adelphia came into service at the end of last fiscal year and you have higher interest expenses and we don't have any more AFUDC equity. So, when you break it from that perspective we are actually doing better than last year and the complexion of those earnings are much better. All of this discussion is now compared to some non-cash earnings we had the year before.

Got it. That was very clear. Thanks for that and thanks for the time today.

Thanks Richard.

Thank you. [Operator Instructions]. We go next now to Travis Miller at Morningstar.

Thank you. Good morning.

Hey Travis.

Given that the first half fiscal year performance here so far and thinking about the high end of the range, any thoughts on pulling forward any kind of cost or investments? Is that a possibility? Is that something you are thinking about from 2024 to set that up?

I think we do all the things that we tend to set up the fiscal year. And certainly, our guidance speaks for itself. I really don't have any things to speak about saying we are going to be moving things around to that point. So we have got our projections, we have got our earnings as we stated and let those speak themselves.

Okay. Very good. And then similar to the last question on storage and transportation. What about the Energy Services, quarterly delta there? Any details that you could provide on that?

I mean it was a dramatically different year last year than this year. So you have got a decent delta. But our Energy Services group going back to the last quarter has performed very well. It allowed us to a certain extent, raise guidance for this year and they are still able to achieve positive earnings in this quarter, which is a very low energy use quarter and they are doing well. So that is the only color that I can give but the quarter-to-quarter comparisons I know can be a little bit difficult because of when volatility happens and how does this unit performs on a quarter-to-quarter basis.

Okay. So the usage being a big factor?

Yes.

Yes. This is Roberto. Yes to what Steve said, what I would say is that once again looking at the year-to-date the business is actually performing better than last year. And so on an overall basis we are doing better.

Okay. Very good. That’s all I had. Thanks.

Thanks, Travis.

Thank you. We go next now to Robert Mosca at Mizuho.

Hi, thanks, everyone. So on your cash flow guidance, it did not seem like there was a change in the near-term outlook on your CFO guide, despite the falling gas prices. Can you just talk about the present case as to why you might not be modeling a working capital benefit there? Is that just conservatism?

Hey, Robert, can you just repeat the beginning of that question because I didn’t catch that?

Sure, yes. So there was not a change in your cash flow from operations guidance or we might have seen a little bit of a working capital benefit here. Could you just talk about why that has not been modeled in your outlook? Is that conservatism or something else?

Robert, this is Roberto. So our cash flow from operations guidance for the year has not changed in last quarter. And what you can see once you look at our results is that we were performing very well actually. Remember, what you see there in our 10-Q is our year-to-date results. So again for the year, we are not modifying those projections and we are exactly within our expectations.

Right. And I guess, I am asking it I think in the prior quarter you said there was a working capital sequential uplift, if gas prices were to fall? Are you just being conservative with that outlook for the next couple of years on gas prices?

Robert, it's hard to understand you. Something wrong with the line. Can you speak up in maybe louder, and repeat that question only for that.

Sorry, guys. maybe this will be better. So I guess -- what I am asking is I think in the past quarter you had said that, we might see a working capital benefit if gas prices were to fall, and that was kind of an element of conservatism you were taking in your guidance. Just wondering, why that is maybe not being included in the 2023 and 2024 guidance yet?

Yes. So, we haven't fully updated that, yet. But you are right, we may have some upside especially in 2024, which is not incorporated in the numbers. But again, it is too early to say that right? We are superbly linear in the year.

Okay. That is fair. And then separately, I think you mentioned in your prepared remarks, looking at opportunities in storage and transportation. It sounds like maybe along the Gulf Coast. Can you kind of expand on those thoughts? Is that within Leaf River, or they are opportunities you are assessing around that asset or outside of this?

Nothing to announce, I will say that. But you can certainly see, volatility in the Gulf Coast region growth in usage either from electric generation or from the LNG liquefiers that are being built down there. This puts a lot of pressure, on assets. And there is a lot of conversations talking about potential expansions and services and things like that. So, just giving a little bit of color around those markets, as these natural gas demands grow, our assets are in good places to be able to serve some of that. But again, nothing to announce, but we are having conversations.

Okay. Appreciate it, Steve. And then last one from me, is just any impacts to your system from that early in service regional energy access.

So any impact we will certainly get more supply to the region, which is very much needed. You can see by the high gas price that we have seen in the past for City Gate, that there is an extreme amount of demand that is here, and our utilities to contractor for that. So more reliable supply on firm contracts it is always welcome to the area and we will be using that contract when it comes into the service.

Okay. Great. Thanks for the time, everyone.

Thank you.

[Operator Instructions] It appears we have no further questions today. I would like to turn the conference back to the management team, for any closing or additional remarks.

I'd like to thank everybody, for joining us this morning. As a reminder, a recording of this call is available for replay on our website. As always, we appreciate your interest in investment in NJR. And we look forward to seeing many of you at AGA later this month. Thank you, everyone and have a good morning.

Thank you, Mr. Westhoven. Ladies and gentlemen, again, that does conclude the New Jersey Resources Fiscal 2023 Second Quarter Conference Call and webcast. We would like to thank you all so much for joining us and wish you all, a great day. Goodbye.