Good day and welcome to the New Jersey Resources year-end 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. Please go ahead.

Thank you Sarah, and good morning everyone. Welcome to New Jersey Resources year-end fiscal 2019 conference call and webcast. I am joined here today by Steve Westhoven, our President and CEO, 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 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 one.These items can 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 Q as filed with the SEC. We do not, by including this statement, assume any obligation to review or revise any particular forward-looking statements referenced herein in light of future events.We will also be referring to certain non-GAAP 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.Turning to slide two, our agenda can be found. Steve will begin today's call with highlights from the year and outlook for fiscal 2020, followed by Pat with a review of our financial results. We will then open the call up to your questions.I would also like to point out that there are slides accompanying today's presentation, which are available on our website and were also furnished on Form 8-K filed this morning.With that said, I would like to turn the call over to our CEO, Steve Westhoven. Steve?

Thanks Dennis, and good morning everyone. I would like to begin on slide four. We reported net financial earnings of $1.96 per share for fiscal 2019 compared to $2.74 per share the prior year. There are two main reasons for the difference. First, the one-time positive effects of tax reform in 2018. And second, the contrast between energy services performance in 2019 compared to its outstanding performance in 2018. If we compare our 2019 results against those from 2016, our NFE increased at a compounded annual growth rate of 6.8% meeting our 6% to 8% long term expected growth rate. Highlighting our commitment to shareholders, we increased our dividend for the 24th consecutive year.Turning to slide five. I will walk you through the accomplishments from New Jersey Natural Gas. First, we reached settlement with the New Jersey Board of Public Utilities on our rate case with a $62.2 million increase to rates that went into effect on November 15. We appreciate the productive relationship we have with our regulators and the continued commitment to investing in our energy infrastructure. Second, we met our annual customer growth target of 1.8% in fiscal 2019. The current demographics and fuel pricing dynamics in our service territory will continue to drive new residential construction and conversions. Third, the Southern Reliability Link received its last remaining permits for the final phase of construction. We currently expect an in-service date of 2021. Recovery for SRL will come in a future rate case proceeding. We also replaced 72 miles of bare steel main through SAFE and continued the hardening and reinforcement of our system through NJ RISE. And finally, during 2019, we filed with the BPU for our new infrastructure investment program. We expect to conclude the regulatory process during 2020.On slide six, I will update you…

Thanks Steve. Good morning everyone. Slide 14 shows the main drivers of how the NFE changes from fiscal 2018 to fiscal 2019. For 2019, we reported NFE of $175 million or $1.96 per share compared to $240.5 million or $2.74 per share in 2018. Excluding the $60 million, NJR's consolidated NFE in 2019 declined by $5.9 million with approximately $ 4 million of decline coming from our unregulated businesses and roughly $2 million coming from our regulated businesses.On the regulated side, NJNG's total gross margin increased in 2019 but was primarily offset by a higher O&M expenses and reduced contributions from BGSS incentives. Partially offsetting this decline into our midstream, we saw a decrease in O&M expenses.Turning to our unregulated businesses, CEV performed exceptionally well in 2019 reporting a $63 million NFE improvement due to higher SREC sales and an increase in investment tax credits. As a reminder, in 2018 most of our solar projects were financed through sale leaseback transactions, which was not the case in 2019. Offsetting CEV's positive NFE contributions, energy services had a challenging year when compared to its outstanding 2018 performance.Turning to slide 15 and as Steve mentioned, we reached a settlement with the New Jersey Board of Public Utilities on NJNG's rate case. The BPU approved a $62 million rate increase that become effective on November 15 and equates to an annualized NFE increase of approximately $37 million. Under the terms of the settlement, our overall allowed rate of return is 6.95% which includes return on equity of 9.6% with a 54% equity layer.Our depreciation rate increased to 2.78% compared to the prior rate of 2.4%. Importantly, the approved rate base is $1.8 billion. We expect it to grow at an annualized rate of approximately 10% over the next three years. Clean Energy Ventures…

Thanks Pat. We expect NJR to continue delivering long term value for its shareholders, anchored by our regulated utility and the infrastructure investment opportunities provided by our other business segments. To summarize, we offer investors an attractive 8% to 11% expected total return based on our dividend yield of 2% to 3% and our long-term NFEPS growth of 6% to 8%.We appreciate that you took the time today to join us and I would like to recognize and thank our employees for all their hard work and dedication that drives our performance. I would like now to open the call for questions.

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

Good morning. Thank you.

Good morning Travis.

Good morning.

Just questions on Leaf River here. You mentioned accretive. Is there any way that you can give kind of a range that's embedded in your guidance for that?

Hi Travis. This is Pat Migliaccio. We have indicated, it's nominally accretive in fiscal year 2020 after taking into consideration the dilutive impacts of our equity issuance. I think, if you think about this from a long-term perspective, the guidance we have provided is, I think about this in terms of a double-digit ROE, but on the lower side.

Okay. And then when we think about strategically, was this just an opportunity that you saw come up at a good price, good growth potential, good return? Or is this something that you see as more strategic for the non-regulated segment, perhaps expanding more projects down there in the Gulf Coast or other LNG-type related infrastructure?

Hi Travis. This is Steve. I think we have shared with you before that we have been in this market for quite some time looking at midstream assets, especially in certain areas that provide for growth and where we think there is some significant future opportunity. Leaf River fit that on all counts. So, we were able to make the investment, able to meet it at a price that we thought we think is good for us and our shareholders, and we are going to continue to pursue these types of assets in the market. It's just a matter of, it's hard to predict on when we will be able to achieve the next acquisition or when the next one will come in, but certainly we are going to pursue this in the future.

Sure. Okay. And then just one real other quick one here. The contracts you mentioned, that 80% contract, what's within those contracts just in terms of variability? Is their price exposure or volume exposure? And what's kind of the sensitivity around those contracts? And then also on the uncontracted part?

Travis. They are traditional contracts where majority of the dollars coming in are fixed demand charges. And then the portion that isn't contracted are taken to the shorter-term market. So, I would imagine one year, maybe less type timeframe, park and loan type transactions. I think it's a typical mix for storage facility, but really the attractive part of this are a majority of the revenues are fixed demand charges coming from customers in a longer contracted period.

Got it. Thanks so much.

Our next question comes from. Shar Pourreza with Guggenheim Partners. Please go ahead

Hi. Good morning guys.

Good morning Shar.

Good morning Shar.

So just one question. The incremental equity that you guys announced for 2020, I think some of it was shifted from 2021. Have you provided any kind of -- is there any sort of question if we get PennEast gets further delayed? So as we sort of think about your projected balance sheet metrics like FFO-to-debt, has the incremental equity raised provided some sort of a cushion? Should we get any sort of potential cash flow implications from further delays? So I guess where do we stand around your balance sheet capacity?

Shar. This is Pat Migliaccio. So I think it's fair to say that the equity issuance contemplates PennEast in it, and should that result in a delay, that would provide us a little bit of cushion in the future.

Okay. Just what I want to confirm is the equity was not solely attributed to the Leaf acquisition? A part of it is building a cushion, if there was a PennEast delay?

Yes. So, if you think about this from the purchase price, Leaf River purchase price was $367 million. If you looked at roughly at 50-50 debt equity mix, break that down, it's $140 million. And so, the balance would be, what I will call, regular way equity needs that would satisfy capital expenditures for PennEast and/or Adelphia Gateway and other items that we have in our capital plan.

Can I just ask. Pat, what's the level of cushion, right? So, can you just give me a little bit of a sensitivity towards sort of what your balance sheet capacity is, especially when you look at your credit metrics, FFO-to-debt, assuming that, let's say, the PennEast project gets a further delay? So, like I guess what have you accounted for as far as the delay in the project?

Shar, as you can appreciate, there are a number of variables that go into that, not the least of which is energy services performance of any year, because that's going to impact our equity side. So, I don't know that I can provide you any more specific guidance than we already have today.

All right. Great. Thanks guys. I appreciate it. That was it.

Thanks.

Thanks Shar.

[Operator Instructions]. At this time, there are no further questions. I would like to turn the conference back over to Dennis Puma for any closing remarks.

All right. Thank you, Sarah. I want to thank everybody for joining us this morning. As a reminder, a recording of this call will be available 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.