Hello, everyone. My name is Karina, and I will be your conference operator today. At this time, I would like to welcome everyone to the New Jersey Resources Fiscal 2025 Second Quarter and First Half Financial Results Conference Call. [Operator Instructions] I would now like to turn the call over to Adam Prior, Director of Investor Relations. Please go ahead.

Thank you. Welcome to New Jersey Resources Fiscal 2025 second quarter conference call and webcast. I'm 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 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 of 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 on Slide 2. These items can also be found in the forward-looking statements section of yesterday's earnings release furnished on Form 8-K and in our most recent Forms 10-K and 10-Q we 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'll 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, financial margin, adjusted funds from operations, and adjusted debt 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 7 of our 10-K. The slides accompanying today's presentation are available on our website and were furnished on our Form 8-K filed yesterday. Steve will begin with this quarter's highlights beginning on Slide 4, followed by Roberto, who will review our financial results. Then we will open the call 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. At NJR, we recognize that affordability and reliability remain the foundation of our value proposition to our customers, and our long-term strategy reflects that. In today's environment, delivering safe, affordable, and reliable energy is more critical than ever. That's why we are focused on disciplined capital deployment, operational excellence, and strategic innovation across all of our business segments. Our results this quarter once again demonstrate the strength of this approach. Fiscal 2025 continues to be a strong year for NJR. In the second quarter, we delivered solid results across all of our business segments. These results reflect the strength of our integrated portfolio and consistent execution by our team to drive long-term sustainable growth. In particular, our wholesale gas marketing business, NJR Energy Services, reported strong performance during the winter by capitalizing on periods of pricing volatility through its long option strategy. As a result of this outperformance, we are raising our fiscal 2025 NFEPS guidance by $0.10 a share to a revised range of $3.15 to $3.30 per share. Looking at our other subsidiaries, we saw solid execution in the quarter from our entire portfolio of complementary businesses. At New Jersey Natural Gas, we completed the first full quarter of new rates following our base rate case settlement. We also initiated investments under the expanded SAVEGREEN program, our largest energy efficiency filing to date, which earns near real-time returns. At Clean Energy Ventures, we are advancing our solar portfolio with new projects coming online and building a growing diversified project pipeline. We continue to prioritize disciplined capital deployment and strategic expansion across multiple states. Our Storage and Transportation business also continue to make progress. We continue the capacity recovery project at Leaf River and remain engaged in the settlement process for Adelphia Gateway's…

Thank you, Steve, and good morning, everyone. Slide 11 shows the main drivers of our NFE for the second quarter and year-to-date period of fiscal 2025. In the second quarter, we reported an NFEPS of $1.78 per share, compared with NFEPS of $1.41 per share last year. We saw higher NFE at New Jersey Natural Gas, driven by higher utility gross margin, as a result of our recent base rate case settlement, and Storage and Transportation reported improved performance versus the prior year, driven by higher revenues at Leaf River. At Clean Energy Ventures, we reported higher NFE for the year-to-date period, primarily driven by the sale of our residential solar portfolio during our fiscal first quarter. For fiscal 2025, we expect that a sale of our residential solar assets will generate a net benefit of approximately $0.30 per share, reflecting both the gain on sale and the lack of earnings contribution from that business for the remainder of the year. Now let's move to slide 12, where we will discuss NJR capital plan. For fiscal 2025 and fiscal 2026, we're planning capital expenditures ranging from $1.3 billion to $1.6 billion, which aligns with our long-term NFEPS growth target of 7% to 9%. We do not make any changes to our capital plan compared to our prior disclosure, and expect spending between $610 million and $790 million in capital investments during fiscal 2025. These investments align with our long-term strategy to enhance utility infrastructure, expand clean energy investments, and optimize our storage and transportation capabilities. As highlighted in slide 13, our strong balance sheet and liquidity position enable us to execute on our strategic priorities while maintaining financial flexibility. Our adjusted funds from operations to adjusted debt ratio is projected to range between 19% and 21% for fiscal 2025, which reflects our ability to generate solid operating cash flows and manage debt effectively. These levels are consistent with maintaining our investment credit rating at NJNG and a strong balance sheet at NJR. We expect our cash flow from operations to be between $460 million and $500 million in fiscal 2025, providing a solid foundation for our capital plan, dividends, and other corporate needs. With that, I'll turn the call back to Steve for concluding remarks on slide 14.

Thanks, Roberto. Before we move to Q&A, I'd like to briefly address NJR's positioning in light of the evolving macroeconomic environment, specifically in relation to tariffs. As many of you know, the situation remains fluid. New Jersey Natural Gas is our largest business unit, and because our business activities are domestic, we are largely insulated from the impact of imported goods and materials. Almost all of our gas supply comes from domestic suppliers, including many of the nation's largest interstate pipelines. Additionally, New Jersey Natural Gas' capital program uses domestically sourced materials, such as plastic pipes and infrastructure components, minimizing exposure to current tariffs. At Clean Energy Ventures, we are proactive when it comes to project cost containment. Most of our contracts incorporate structured provisions that preserve returns in the event of cost increases. As a result, we do not expect the uncertainty around tariffs will materially impact our near-term investments. Our solar investment pipeline remains broad and diverse, giving us meaningful flexibility in how and when we deploy capital. It's also important to emphasize that NJR's strong balance sheet continues to support our strategy and is well-positioned in any short-term market dislocation. We are not relying on equity issuances to fund our capital plan. We have substantial liquidity and healthy cash flows, and our debt maturity profile is staggered, with no term debt due at the holdco level in fiscal 2025. To conclude, NJR is poised for sustained long-term growth across our diverse portfolio of businesses. Our balanced mix of regulated and non-regulated investments continues to support peer-leading performance. We raised our initial NFEPS guidance for the fifth consecutive year, and our revised range of $3.15 to $3.30 per share reflects the strength of our business model and our ability to navigate dynamic market conditions. So with that, let's open up the line for questions.

[Operator Instructions] Your first question comes from the line of Richard Sunderland of JPMorgan.

Hi, good morning, and thanks for the time today. Starting with the Leaf River expansion, what is the timing of a potential decision to advance that project? Also, curious, how much capital would that require and what sort of returns you're targeting?

So we just completed the open season and evaluating those bids and doing that at the same exact time as the costs associated with the expansion to really put together the entire transaction. We don't have a finite timeline set right now. We don't have a determined point in which we'd actually go because you don't know whether you're going to complete the contracts or not. As far as total capital costs, I'm going to estimate somewhere between $175 million to $200 billion total costs. Don't hold me to that, but it would probably be somewhere in that area. And then as far as returns go, they'd be in line with what you'd expect for a midstream invest. I think that's as far as we'd probably go with that right now. But yes, it's from the positive side it's great. Markets are supported down in that region. It's a great asset. I think we're in a good position to move forward. We just need to put all these pieces together to make that capital investment.

Understood. That's very helpful. And then appreciate the tariff commentary. I just wanted to drill in a little bit more for CEV. So, at the sort of project level, do you see cost exposure to tariffs, which is then covered by the contractual protections you referenced? I guess I'm just trying to think how do you see development pace if costs do increase, even if your returns are protected?

It's really too early to say. I mean, it's such a fluid situation. We put that commentary in place just to kind of give a view of how we're thinking about it. And also that we've already thought about the change to this market. If you remember we've had tariffs on solar panels. We've had changes in ITC. We've had a number of issues over the past, what, 15 years that we've been in this market, developing this market. So state monitoring provisions certainly offer us some protection. As you can imagine, if you look at our capital plan, the construction for many of these facilities is already happening, even though their commercial operation isn't going to happen until fiscal year 2026 or 2027. So these things are done well in advance, and we're just trying to convey to the market that we've thought about this we've got some protections in place. And given the fact that from a state perspective, very high financial, solar is been one place one place where it's been a successful program, driving down costs, we've been able to develop, we've been deploy capital. So, we feel for all those reasons, it's a good place to be. And I think with tariffs and all the other things that could happen, we're trying to prepare ahead of them, but we don't really see any impacts over the next, like, 12, 24 months or so.

Your next question comes from the line of Jamieson Ward of Jefferies.

Good morning. Hey, it was great hosting you guys recently in Texas and nicely done on the beat and raise. If I could just expand on Richard's Leaf River question here, how should we think about the expected economics in terms of how they compare to your existing caverns and also just given current storage market dynamics?

Yes, I think the way to think about that this is something that we're only going to build if we get the returns that are appropriate for the investments that we're making, right? So what I'm trying to say there is that we've got to get the contracts in place. We've got to be able to lock in a significant portion of materials in that clear line of sight and what our construction costs are and then have a little bit of an extra in order to have safety factor through probably a multiyear cycle of developing out that cavern. So hopefully that gives you a flavor for how we're thinking about this and the types of returns that we would have to have in order to make all that happen. I don't know if it's comparable to our initial investment because that investment was up and running. It was already contracted. It was already done. It was largely de-risked. This is a little bit different from that.

Got you. Thank you for the color there. Appreciated your comments in the prepared remarks around affordability. Just wanted to also expand on that just with your core utility business now contributing about 65% to 68% of earnings and after a successful November 2024 rate case settlement. Just given the affordability concerns and legislative initiatives highlighted recently in the state, how do you view the regulatory environment over the next 12 to 24 months and then maybe heading into your next rate case? And are there any specific regulatory mechanisms you're pursuing to further reduce lag between investment and recovery beyond SAVEGREEN and IIP? Thank you.

Jason, we're in a good spot from a regulatory calendar perspective, having completed our rate case and having completed our energy efficiency filing and having that done really gives some clear air for the next 12, 24, 36 months and when our next rate case would come back. There's a lot of legislation that's being put forth right now around affordability. I'd say that in any year there's about 10,000 pieces of legislation that are submitted. So what's going to make it through and what's not is hard to say right now. But I can tell you from our perspective as a company we've been very focused on affordability. We're focused on making sure that the way that we invest money has a minimal impact on our customers and everything that we do from hedging programs to BGSS to deploying capital at times we're really, really conscious around affordability for our customers. Natural gas is still the cheapest way to heat your home in the state of New Jersey and we don't want to give up that position willingly. So we're going to work on making certain that we still maintain that position going forward.

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

Hi, everyone. Thank you. Two more quick ones on Leaf River. One, is there any equipment or supplies that you need to order to complete that project if you decide to go forward?

Yes, I mean, we certainly have to order compressors, there'll be piping associated with it. A big chunk of the dollars is just -- the order in and out happened, that is there, is that right?

Yes, you broke up a little bit there. But anyway, so you do have to order this. Is there risk then the implication there, is there risk in terms of supply chain or tariffs or anything else in terms of getting what you need to build that?

I think it's more on that right now. We're still working through kind of preliminary signs and things like that, trying to find those up with contracts so for even an optimistic timeframe those orderings would be out, multiple months or maybe even a year. I think it would take a while to determine whether this is going to be impactful and because the environment is so fluid. It's a brownfield site, so we don't have to order as much. We don't have to put as much infrastructure in place as somebody that's building a greenfield site so that's certainly positive to our point. And given the fact that we've already have the wells in place for progress to order, and we've got the grinding facilities in place, which is a big part of construction, puts us at an advantage, so we're in a good place from that perspective, but too early to tell on when things of that nature at this point.

Okay, perfect. And then a higher level question to utility. You continue to see customer growth over and over and over. What's going on there, right? What are some of the fundamentals where we don't necessarily see that at some other utilities? Is there a business mix change in terms of residential-to-business or business-to-residential? What are some of the fundamental shifts you're seeing here in terms of still continuing to get customer growth?

Hi, Travis. It’s Pat Migliaccio. So, to answer your question, there's been no change in the mix. We are predominantly residential service territory, so 90% residential, 7% commercial. I would say that we have a really attractive service territory, principally Monmouth, Ocean, and Morris Counties, ample room for development, great demographics in terms of some of the highest per capita income brackets in the state of New Jersey, and just a great place to live. We hit those all by the short traps, so. And on the flip side, though, we are also constantly advocating for ways we can save customers money, and that's through our SAVEGREEN energy efficiency program, largest ever in the state. But that really provides customers an opportunity to conduct their energy out of their home and figure out a way to make them more energy efficient for those homes that have already been constructed. So, I hope that answers your question, but we do believe that we continue to see fantastic customer growth.

Our next question comes from Robert Mosca of Mizuho Securities.

Hi. Morning, everyone. Just one from me. I think there was maybe an updated draft to the proposed energy master plan a little bit after your 1Q update. Just wondering if there's anything in particular, you're focused on during the comment period and anything that might change just given some of the recent affordability legislation proposed in New Jersey? Kind of open-ended question, but curious to get your thoughts there.

Thanks, Rob. So, there was a presentation that was put forth on the energy master plan, but there was not a whole draft document of the energy master plan issued. They did allow for a comment period, which we did submit comments on. I'm not sure what the follow-up will be on that. Just as a reminder, we are going to go through a gubernatorial election this November, so you're going to change the administration. So, I fully expect that a new administration this fall will be drafting probably a new energy master plan. So, I think as far as you're concerned, it's a staging moment to see how this plays out over the next year or so and see what a new administration's goals are.

This concludes our Q&A section. I will now turn the call back over to Adam Pryor for closing remarks. Please go ahead.

I'd like to thank you all for joining us. We look forward to seeing many of you at AGA later this month, and as always, we appreciate your interest and investment in NJR. Have a great day.