Good day, and welcome to the NW Natural Holdings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Nikki Sparley. Please go ahead.

Thank you, Chantelle. Good morning, and welcome to our second quarter 2019 earnings call. As a reminder, some of the things that will be said this morning contain forward-looking statements. They are based on management's assumptions, which may or may not occur. In addition, some of our comments today reference non-GAAP adjusted measures. For a complete reconciliation of these measures and other cautionary statements, refer to the language and reconciliation at the end of our press release. We expect to file our 10-Q later today. As mentioned, this teleconference is being recorded and will be available on our website following the call. Please note, these calls are designed for the financial community. If you are an investor and have additional questions after the call, please contact me directly at 503-721-2530. News media may contact Melissa Moore at 503-220-2436. Speaking this morning are David Anderson, President and Chief Executive Officer; and Frank Burkhartsmeyer, Senior Vice President and Chief Financial Officer. David and Frank have prepared remarks and then will be available along with other members of our executive team to answer your questions. With that, I will turn it over to David.

Thanks, Nikki. And good morning everybody. I'll start today with highlights from the quarter, and then turn it over to Frank to cover our financial performance. And then I'll wrap up the call with a look ahead. We're halfway through the year and have executed very well on our growth initiatives and have posted strong financial results. For the first six months, net income increased $0.11 per share to $1.56 per share compared to $1.45 per share for the same period in 2018. As previously discussed, our – this year's first quarter results included a onetime regulatory pension disallowance, a $0.23 per share related to an Oregon commission order. Excluding that disallowance, on an adjusted basis, net income increased $0.34 per share or $10.4 million to $52.1 million or $1.79 per share for the first six months of 2019. These results reflect new rates in Oregon and customer growth. The regional economy continues to be good and the labor market remains strong. Unemployment levels in our service territory remain at historic lows. After several years of exceptional growth, the housing market remains steady. In fact, over the last 12 months, we've connected more than 12,400 new customers, resulting in a growth rate of 1.7%. As previously announced in May, we placed the North Mist gas storage expansion into service. The expansion provides an innovative no-notice service that supports Portland General Electric as they manage the volatility of the electric grid and integrate renewables. North Mist is just the latest expansion in a 30-year history of development at the Mist storage field. What began with depleted reservoirs in the 1980s has grown into 20 billion cubic feet of storage, with this 4 billion cubic feet addition. Mist delivers energy to our region at the most critical times. With only a single pipeline serving the region, this facility is essential for reliable gas and electricity service. Now an update on our Washington rate case. As you may remember, our Washington service territory covers about 11% of our overall customer account or roughly 10% of overall revenues. In May, we filed a settlement with the commission reflecting our agreement with all parties on almost all items. One party has disagreed on the decoupling methodology currently used by all other gas utilities in the state. Under the all-party settlement, Northwest Natural's revenue requirement would increase $5.1 million, and it's based on an ROE of 9.4% and a cost of capital of 7.2%. Rate base would be – would increase – excuse me, increase $45.9 million to a total of $173.7 million. We expect an order from the commission this fall with rates effective November 1. With that, let me turn it over to Frank to go over the financials a little bit deeper. Frank?

Thank you, David and good morning. I will begin with a summary of our second quarter and year-to-date reported financials and then discuss our cash flows and guidance for the year. As a reminder, Northwest Natural's earnings are seasonal with the majority of revenues generated in the first and fourth quarters during the winter heating season. Also notice that our effective tax rate was 23.4% for the second quarter, slightly below our statutory rate of 26.5%. The main difference is a result of returning excess deferred income taxes related to tax reform to our Oregon customers. We expect the lower effective tax rate to persist, as we continue to provide these benefits to customers. I'll describe earnings drivers on an after-tax basis using the statutory tax rate of 26.5%. For the quarter, we reported net income from continuing operations of $2.1 million or $0.07 per share, compared to a loss of $300,000 or $0.01 per share for the same period in 2018. The $0.08 per share increase is comprised of a $0.14 per share increase in the natural gas utility segment, partially offset by a $0.06 per share decline from lower asset management revenues at Mist and higher non-operating expenses associated with developing the water business. In the natural gas utility segment, margin increased $8.3 million largely due to higher Oregon rates and strong customer growth, which collectively added $4.6 million. Storage revenue from the North Mist expansion contributed an additional $1.6 million. In addition, lower environmental expenses, coupled with warmer weather contributed $2.2 million. The $2.1 million increase in other expense was offset by an increase in revenues. This is the result of the Oregon rate case, which froze the pension balancing account and increased customer rates to reflect current FAS 87 expense. Interest expense increased $1.2 million primarily…

Thanks, Frank. Turning now to the water side of the business, we hit an important milestone in May with the close and purchase of the Sun Water – Sunriver water utility, our largest water transaction to date. Sunriver is one of the state's longest standing and oldest resort communities in Central Oregon. Our water utility and wastewater company there serve a combined 9,400 connections. The acquisition is projected to be accretive in the first full year of operations. In June, we entered into an agreement to acquire our first municipally owned water and wastewater utilities from the Taylor Mountain Water and Sewer District located near Idaho Falls. Although, this is a small acquisition, it is a clear example of the benefits of our roll-up strategy, while growing our existing footprint, opportunities in other water sectors are unfolding that allow us to continue growing in a disciplined and measured manner. Through water acquisitions like these, we're adding an earnings stream that has a low risk and strong cash flow profile, much like our regulated natural gas utility. So far, we've committed nearly $70 million of investment in the water sector. And once we close all outstanding transactions, we'll serve approximately 47,000 people through 18,000 connections in Oregon, Washington and Idaho. We're working on closing a few smaller water transactions and integrating all these businesses into our platform. We'll continue pursuing targets west of Mississippi. I remain very excited about the potential growth in this business. As we've discussed before, we have a commitment to help reduce greenhouse gas emissions in the communities we serve. Each year, Northwest Natural delivers more energy in Oregon than any other utility, gas or electric, for a modest carbon footprint. The use of natural gas in our customers' homes and businesses accounts for just 5% of…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Thank you. Your first question comes from Sarah Akers, Wells Fargo. Go ahead please.

Good morning Sarah.

Hey good morning. Just a question on the cadence of EPS this year. Looks like the midpoint of 2019 guidance implies an annual increase of about $0.10. And as you said, you're up $0.34 year-to-date. So what are the negative drivers in the back half of the year that are expected to drive EPS down over $0.20 or so versus last year's second half?

Hi Sarah it’s Frank. Good morning. Yes there’s a couple of things that are different this year than last year. And one way to think about it is, with tax reform and the rate case last year. So until we got our rate case done, it wasn't exactly clear how we would return the benefits of tax reform to customers over what kind of phasing. So in the third quarter, when we got rates set, we were able to finalize our – the credit back. So we had been reserving throughout the year or accruing throughout the year our expectation, which meant – in fact, we had probably accrued a little bit faster that benefit to the customers in the first two quarters, and then we're able to reverse some of that in the third quarter. So our third quarter impact from tax reform was dampened last year versus this year. So we expect in the nonheating quarters, this year to be normal, and you'll see a greater effect from tax reform in the third quarter than you did last year. In addition, you'll recall that part of the rate case was that we reduced our sharing percentage on interstate storage. So last year, in the second half, between the Enbridge account event and better optimization opportunities for the customer, we had a bit more interstate storage benefits than we would expect this year. And then, finally, we just have some expenses that will come through. It's not straight across through the year. We'll be relocating to our new headquarters, got to move some servers, et cetera. So there's some additional expense in the second half that we didn't have in the first half. And I'd say that really captures it. But as you recall, Q3 is our absolute nonheating quarter, and thus you really see the effect of the shaping of tax reform in the nonheating quarters, and Q3 would be the big quarter for that.

Got it. Thanks. And then any updated thoughts on the timing of the next rate case filing in Oregon?

Yes, it’s a good question. We completed the rate case in Oregon last year, and we are evaluating right now the next level rate case. We continue to make substantial investments into the system, and are also looking forward in relation to what expenses look like, et cetera. So probably have a little bit more information on that at year-end or by year-end, but at this point, we're in the evaluation mode right now.

Got it. Thanks a lot.

Thanks Sarah.

Thank you. This concludes our question-and-answer session. I would now like to turn the conference over to David for any closing remarks.

Thanks, Chantelle. And thanks everybody for joining us this morning. As always, if you have any questions or follow-up, please reach out to Nikki. And with that, we'll conclude the call. Have a great day.