Good morning and welcome to the New Jersey Resources Corporation First Quarter 2016 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Dennis Puma, Investor Relations. Please go ahead.

Thank you, Gary. Good morning, everyone. Welcome to New Jersey Resources’ first quarter fiscal 2016 conference call and webcast. I am joined here today by Larry Downes, our Chairman and CEO, Pat Migliaccio, our Chief Financial Officer, as well as other members of our senior management team. As you know, certain statements in today’s call contain estimates and other forward-looking statements within the Private Securities Litigation Reform Act of 1995. We wish to caution listeners of this call that the assumptions forming the basis for forward-looking statements include many factors that are beyond NJR’s ability to control or estimate precisely, which could cause results to materially differ from the company’s expectations. A list of these items can be found, but is not limited to items in the forward-looking statements section of today’s news release filed on Form 8-K and in our most recent 10-K filed with the SEC. Both of these items can be found at sec.gov. NJR does not, by including the statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events. I would also like to point out that there are slides accompanying today’s discussion, which are available on our website and were also filed on our Form 8-K this morning. With that said, I would like to turn the call over to our Chairman and CEO, Larry Downes. Larry?

Thanks, Dennis. Good morning, everyone and thank you for joining us. For those of you who have seen our release this morning, you know that our first fiscal quarter performance was solid. As we begin this morning I want to remind everyone that during my presentation I’ll be discussing our future and I’ll be making forward-looking statements. Our actual results will be affected by many risk factors, including those that are listed on slide two. The complete list is included in our 10-K and as always I would encourage you to please review them carefully. Also as noted on slide three, I will be referring to certain non-GAAP measures such as net financial earnings, or NFE as I am discuss our results. We believe that NFE provides more complete understanding of our financial performance. However, I want to stress that NFE is not intended to be a substitute for GAAP. Our non-GAAP measures that are discussed more fully in Item 7 of our 10-K and please take the time to review that disclosure carefully as well. Moving to slide four, you can see our financial and strategic highlights for the quarter. NFE for the quarter were $0.58 per share compared with $0.65 per share in the first fiscal quarter 2015. The difference is due primarily to lower results at NJR Energy Services. Our fundamentals at New Jersey Natural Gas remained strong. We added 2,046 customers during the first fiscal quarter of 2016 and remain on track to realize a 1.6% customer growth rate during this fiscal year. We filed the base rate case in November to recover investment and operating cost incurred to improve our system and support customer growth initiatives. We also reached another important milestone during the quarter when we retired the last section of cast iron main…

Thanks, Larry and good morning, everyone. As you can see on slide 10 NJNG’s net financial earnings were $30.6 million compared to $28.2 million in the prior quarter. The improved financial performance was driven by a significant increase in gross margin from customer growth, our BGSS incentive programs, and SAVEGREEN our energy efficiency program. Since this inception the BGSS incentive programs have saved customers approximately $800 million and also provided share owners at an average of $0.05 of NFE per share annually. Turning to Slide 11, we added 2,046 new customers in the first quarter with approximately half of those customers coming from other fuels, primarily fuel oil. Combined these new and conversion customers are expect to contribute approximately $4.4 million annually to utility gross margin. Although additions are down in the first quarter due to the timing differences we’re on track for the year and expect to add 8,150 customers to our system in fiscal 2016. This will be about 4% increase over the prior year. Through our fiscal year 2018 we expect customer growth additions of 24,000 to 28,000, representing an annual new customer growth rate of about 1.6%. Most of you are familiar with the regulatory programs that we list on slide 12. I just mentioned the impact that our BGSS incentives have had in the results, our CIP which has been in place for about 10 years significantly mitigated the impact of warm weather and a resulting lower usage levels in our first quarter. This past November-December were among the warmest in our company history. Through SAVEGREEN we invested $8.6 million in the first quarter 2016 and our VP approval to invest $220 million through June of 2017. This program supports New Jersey’s energy efficiency goals by helping both customers and share owners. Also in the…

Thanks, Pat. I want to conclude our call today with a review of our path to future growth which includes a summary of our key initiatives for fiscal 2016, ‘17 and ‘18. I think many of you may recall that the format on slide 18 was originally introduced at our 2014 investor conference and really what it’s designed to do is to summarize the key initiatives each year that support our annual 5% to 9% NFE and 6% to 8% dividend growth target. And so when you look at the slide you will see details for fiscal 2016 and then as you move into fiscal ‘17 and ‘18 you will see it will be the initiatives from ‘16 plus the additional initiatives that you see in ‘17 and ‘18. So I just want to take a moment to summarize that. The growth plan through fiscal ‘18 is based upon strong customer growth, infrastructure investments, regulatory initiatives at New Jersey Natural Gas that will benefit both customers and share owners. We continue to work collaboratively with our regulators on our initiatives that benefit not only our share owners, but also our customers. We also expect to benefit from consistent revenues from our midstream investments; we’re focusing on diversifying CEVs distributed power portfolio combined with improvements in the SREC market fundamentals and the extension in both investment tax credits and production tax credits. And finally we will continue to take advantage of expected natural gas demand growth and price volatility at NJR Energy Services while at the same time providing producer an asset management services. When we look at our strategy, and we look at our fundamentals they remain strong and we think they provide the opportunities for future growth. But as always as I close I want to say thank you to our nearly 1,000 employees for their continued dedication and commitment to our company and our customers. Without their efforts we would not have achieved the excellent results we reported this morning, without everything that they do every day we would not have the strong fundamentals that we have for the future. Our employees are the foundation of our company and I am grateful for what they do every day. So, thank you for your time today and we are ready to take your questions and comments.

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Mark Barnett with Morningstar. Please go ahead.

Hey, good morning everybody.

Good morning, Mark.

Congratulations Pat and Glenn first of all get that out of the way.

Thank you, Mark.

Thank you.

Just a couple of quick things here, one on the just the minor item on the rate case, but you had a number of ways to kind of generate incentive extra margin from the utility. Do you think that any of that is set to change following a new rate regime or should we generally be expecting about a steady performance there?

Mark, we don’t expect any of that to change. Mark Sperduto was in the room. Do you want to add anything to that?

No, I think what you might be referring to are the BGSS incentives as well as our CIP. Those two regulatory initiatives have been decided and they are continuing right through the right case without any change. There are recent decisions in both of those areas.

Right. I just kind of from a bigger picture just wanted to get your sense of how that would change with a new fixed rate. But that sounds like no problem there. Couple of quick questions on the Ringer Hill projects, you mentioned that it was hedged for 15 years with an industrial uptick or so two things, one, generally how fixed do you view the revenue contribution from that project? And then two, how do you view your own sort of cost of capital and hurdle rate with an industrial offtake or versus a utility offtake there?

Mark can we ask Pat to respond to that and we also have with us Stan Kosierowski who heads up CEV. So they will take your question. Pat?

Good morning, Mark. So we hedged the majority of the output on that project. The Ringer Hill project through that agreement. And so while we didn’t disclosed a specific number rest assured the majority of the power is hedged. In terms of the cost of capital assumptions relative to the industrial partner the counter party choose not to be named on our press release, industrial partner was as close as we could come to describing their line of business. But we don’t consider the credit quality of the counter party in our return calculations and there are credit protections in the agreements with the counter party. So the credit quality deteriorated. I don’t know if Stan has anything to add.

Okay. Just this is sort of a growing trend with some of the more distributed generations I was just curious to see your kind of framework for analyzing this kind of a project when your offtake was not sort of fully regulated utility. But appreciate that guys. Thanks.

The next question comes from Brian Russo with Ladenburg Thalmann. Please go ahead.

Hi, good morning.

Good morning, Brian.

So just to clarify the wind farm announced last night that was assumed in your capital forecast, CapEx forecast, correct?

Yeah, Brian. This is Pat Migliaccio. That’s correct.

Okay. And with the PGC and ITC extension clearly there is upside opportunities and upside CapEx opportunity. How much incremental CapEx do you think you can handle without needing significant amount of equity to funding?

Brian, this is Larry. I think at this point what we are doing is as you know just as I said we had really assumed that we would not have the ITC and the PTC and that with the CapEx numbers that we were putting out there in the forecast. Now that this is in place what we’ll be doing is a complete let’s see at the portfolio and the distribution between wind and solar. There may be some changes there, but what will not change is the 10% to 20%.

Got you, okay. And the SREC hedges slide and average price it looks like the hedges percentage basis increased and so did the average prices maybe you could just talk a little bit more about what you are seeing in that market in terms of pricing et cetera?

Sure Brian. This is Pat Migliaccio again. We’ve seen over the course of the last several weeks certainly strengthen in the SREC market reflecting the BGS auctions and the purchasing behavior that leads up to the BGS options in the state of New Jersey. So to put things in perspective energy years ‘16 and ‘17 are trading in a bid ask between say 285 and 295 over the course of the last several weeks. So as you might imagine we’ve been aggressively hedging given those market prices. Because they are near 90% of the SACP, which is the penalty rate the PLSCs pay if they don’t acquire those SRECs.

Brian we also and we guided to this in a lot of detail at the October Investor Meeting. We spend a lot of time internally understanding the market and where it is relative to the renewable portfolio standards. So as we said our expectation was that there would be some improvement in the SREC market fundamentals and we’re seeing a little bit of that right now. But internally when we’re making our hedging decisions we’re not looking take an enormous [ph] amount of risk on the movement of SREC prices and you can see that reflected in some of the hedging strategies and decisions that we’ve made.

Okay. And you mentioned PennEast the FERC filing is it still considered on schedule?

Yeah as we’ve disclosed right now, we’re going through the FERC process and expecting to get the FERC certificate. So there is no change to the schedule right now.

And then lastly with the decline in natural gas, what kind of offset do you think there is to the $147 million base rate increase, which on a percentage basis is fairly large?

I'm going to ask Mark Sperduto to talk about that.

Well the system that for gas cost each June and coming up in this June we’ll do a forecast of our gas cost. And that forecast will coincide approximately with the timing of our base rate case increase. So until that time, as mentioned gas prices have been historically low and those types of prices would be reflected contemporaneously with the change in our base rate case increase this coming October-November timeframe.

So Brian I think at this point it’s impossible to really predict that with the specificity right now.

Okay. And then lastly I noticed midstream first quarter ‘16 was up year-over-year, but yet you sold Iroquois. I think you mentioned Steckman Ridge growth. Maybe you could just add a little bit more color to that.

Yeah Brian, Pat gave without – Steckman Ridge provided – more than offset the decline of revenue that we saw from the difference in dividend income on our Dominion Midstream units versus the income from Iroquois and principally the same fundamentals that we see that drive the solid performance of NJRS are driving the performance of Steckman Ridge. So you’ve got some spreads in the Marcellus area that are leading to higher hub services and storage revenue at least in the short-term in Steckman Ridge.

Great, thank you.

Yeah.

[Operator Instructions] As there are no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Dennis Puma for any closing remarks.

Thank you, Gary. I want to thank everyone for joining us again today. As a reminder, a recording of the call is available for replay on our website. Again we appreciate your interest and investment in New Jersey Resources. Thanks have a great day. Bye.