Good morning and welcome to the New Jersey Resources Third Quarter Fiscal 2019 Earnings Teleconference. All participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Mr. Dennis Puma, Director of Investor Relations. Please go ahead.

Thank you, Debbie. And good morning, everyone. Welcome to New Jersey Resources third quarter fiscal 2019 conference call and webcast. I'm joined here today by Steve Westhoven, our President and Chief Operating Officer, Pat Migliaccio, our Senior Vice President and 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 meaning of the securities laws. We wish to caution listeners on this call that the current expectations and beliefs forming the basis of our forward-looking statements include many factors that are beyond our ability to control or estimate precisely, which could cause results to materially differ from our expectations as found on slide 1. These items can be found in the forward-looking statement section of today's earnings release furnished on Form 8-K and in our most recent Form 10-K and 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. Turning to slide 2, we will be referring to certain non-GAAP financial measures such as net financial earnings, or NFE. We believe that NFE provides a more complete understanding of our financial performance. However, NFE is not intended to be a substitute for GAAP. Our non-GAAP financial measures are discussed more fully in Item 7 of our 10-K. Our agenda for today is found on slide 3. Steve will begin today's call with highlights from the quarter followed by Pat with a review of our financial results and projections. We'll then open the call up to your questions. I'd also like to point out that there are slides accompanying today's discussion, which are available on our website and were furnished on our Form 8-K filed this morning. With that said, I'd like to turn the call over to our President and Chief Operating Officer, Steve Westhoven. Steve?

Thanks, Dennis. And good morning, everyone. Before we begin discussing our results, I wanted to take a moment to talk about Larry Downes' announcement that he will be retiring as CEO on September 30 of this year. He will remain Chairman until our Annual Meeting in January. Thanks to Larry's leadership, we have a solid foundation and a talented team that will continue to grow our company. I joined New Jersey Resources in 1990 and have worked for Larry for nearly 30 years. I want to take this opportunity to thank him for all he has done for our company and for me personally. I appreciate the confidence the board has placed in me to succeed Larry and I look forward to working with the employees of NJR to do what we do best, serve our customers and provide returns to our shareowners. Turning to the quarter, we're pleased to announce SRL received the Burlington County road opening permits and we now have all major approvals to complete the project. SRL is a critical project for our company to significantly strengthen our delivery system and enhance reliability and resiliency for over 1 million people in Ocean, Monmouth and Burlington counties. We will also support the critical mission of the joint base, McGuire-Dix-Lakehurst, which is the second largest employer in New Jersey. As you know, we began construction last December, and so far we've installed approximately 50% of the 30-mile project. SRL has undergone a thorough and extensive regulatory and governmental review. And I would like to thank the various state agencies, local communities, as well as our team for their dedication and hard work throughout this process. Our Midstream infrastructure investments also made progress during the quarter. For PennEast, all land surveys have been completed, which puts the partnership in…

Thanks, Steve. And good morning, everyone. Slide 10 provides a breakdown of the NFE changes from year-to-year for both the three months and nine months ended June 30. In the third quarter of fiscal 2019, the net financial loss was $17.5 million or $0.20 per share compared with a loss of $8 million or $0.09 per share during the same period last year. As you can see from the chart, third quarter results from our regulated businesses were lower due to increased O&M, mostly related to our new technology investments and related consulting costs. For our unregulated businesses, the net decrease in NFE is primarily due to the absence of NFE contributions from the wind portfolio, which was sold in February of this year. For the nine months ended June 30, NFE totaled $149 million or $1.67 per share compared with $269.4 million or $3.08 per share during the same period in fiscal 2018. The New Jersey Natural Gas was also basically flat, with lower BGSS incentives and higher O&M, offset by increases in margin from our infrastructure programs. Both Midstream and CEV earnings declined largely due to the effects of tax reform last year. Excluding tax reform, Midstream NFE increased nearly $2 million and CEV earnings increased $8 million over the nine-month period last year. As Steve mentioned before, Energy Services results decreased due to lower price volatility compared to the prior year. The results of our SREC hedging program are highlighted on slide 11. We hedge our SREC production to lock in revenue for future energy years. For energy years 2020 and 2021, our SREC revenues for existing projects are hedged and, therefore, unaffected by changes in SREC prices. For energy year 2022, over 40% of the expected output is hedged at about 83% of the Solar Alternative…

Thanks, Pat. We appreciate the time that you guys took to join us today. We'd like to recognize our employees for their hard work that drives our performance. And I'd now like to open the call for questions.

[Operator Instructions]. The first question comes from Travis Miller with Morningstar. Please go ahead.

Good morning.

Hi, Travis.

Can you hear me okay there?

Okay.

Okay, great. I just wonder if you could go through a little more on that CEV and that shift to the higher percentage of earnings. Was that something that was temporary or is that something that is more structural or something else going on there?

Travis, this is Pat Migliaccio. For this year, we are seeing some increased SREC sales both from the generation side as well as some projects came on a little earlier than we anticipated. The earnings contribution of 35% to 45% is really only for this year. You'll see on the materials today, we provided long-term guidance. We would expect CEV to be more in the 10% to 25% range.

Okay, great. And then, kind of similar, that $150 million green bond, are there restrictions around that or different terms and then a typical bond issue that you guys would do? Just wonder if you could talk through that a little bit and even the decision to do that.

No restrictions other than the fact it must be used for green investment and we will have to get our auditors to review and make sure that that's in compliance with the provisions in the private placement agreement. Other than that, the coupon, the all-in rate was similar to what we'd expect to get if it wasn't a green bond, although we did see a slight uptick in demand for the private placement paper.

Okay. And does this give you more firepower, for lack of a better word, to build on the solar projects, maybe up the CapEx in 2020, 2021?

No, Travis. This is part of our planned debt issuance for this year.

Okay, great. I appreciate the help.

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

All right, Debbie. Thank you all for joining us this morning. I just want to remind everyone that a recording of this call is available for replay on our website. And as always, we appreciate your interest and investment in New Jersey Resources. Goodbye.

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