Good morning, and welcome to the NW Natural Holding Company's first quarter conference call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Nikki Sparley, Director of Investor Relations. Please go ahead.

Thank you, Brandon. Good morning, and welcome to our first quarter 2020 earnings call. As a reminder, some things that will be said this morning contain forward-looking statements that 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.Our speakers today are doing this call remotely, so please bear with us if we have any technical difficulties or sound quality issues or pauses as we go on and off mute. 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'll turn it over to David.

Well, thank you, Nikki. And good morning, everybody, and welcome to our first quarter call. I hope you are safe and well as we all go through unprecedented times here. Like you, we've adapted to a new normal in the last few weeks as we've limited social interactions and taken every precaution to fight the spread of the coronavirus while continuing to provide essential services to our customers.Personally, I'm very proud of how our company and our employees have responded to this event. I especially want to recognize our field personnel for all they are doing to keep our systems safe and of course, operating reliably.In Oregon, where about 90% of our gas customers reside, a series of progressively restrictive executive orders culminated with the stay-at-home directive beginning on March 23 in Washington, Idaho and Texas, where we have gas and/or water operations also implemented various forms of restrictions.Our natural gas and water utilities, obviously, are critical infrastructure. We've continued all essential functions necessary to provide reliable service while following the guidelines set out in the governor's executive orders, by OSHA and of course, the CDC. We continue to respond to customer issues, emergencies and providing other essential services. In addition, we are performing maintenance and construction on our systems.While we can't predict the full economic effects of the pandemic, I see several mitigating factors for our business. Timing-wise, this executive order coincided with the conclusion of the winter heating season. April and May continue to require some heating resources in the Northwest, but the majority of the sales occur from November through March.In addition to being a pure-play utility business, we benefited from an attractive customer mix. About 87% of our natural gas margin comes from residential and commercial customers, of which a majority are decoupled. And about 8%…

Thank you, David, and good morning, everyone. I will begin with a summary of our first quarter reported financials, and then describe the key metrics we are tracking as we monitor the implications of COVID-19 on our business, and then discuss guidance for 2020.Earnings drivers will be noted on an after-tax basis using the statutory tax rate of 26.5%. Our effective rate for the quarter was 22.8% as a result of the return of excess deferred income taxes to our Oregon customers. Also note that earnings per share comparisons were impacted by the issuance of 1.4 million shares in June 2019 as we raised equity to fund the investment in our gas utility.While the pandemic continues to be at the front of our minds, our first quarter results were largely unaffected by the outbreak. For the quarter, we reported net income from continuing operations of $48.3 million or $1.58 per share compared to net income of $43.4 million or $1.50 per share for the same period in 2019. Last year's results include a regulatory disallowance of $0.23 per share related to an Oregon Commission order. Excluding that disallowance, on an adjusted non-GAAP basis, earnings per share from continuing operations was $1.73 for 2019, with the $1.7 million or $0.15 decline largely due to favorable weather and higher asset management revenues in the prior year.In the gas distribution segment, utility margin increased $1.1 million. Higher customer rates in Washington, customer growth and revenues from the North Mist Expansion Project contributed an additional $8.6 million. This was partially offset by warmer weather in 2020 compared to colder-than-average weather in 2019, which reduced margin by $2.4 million. The remaining $5.2 million decline in utility margin is a result of the Oregon order related to tax reform and pension expense in 2019. With the…

Thanks, Frank. While we continue to focus on our day-to-day operations, we are also advancing key long-term objectives. At this time, it appears that all of our utility commissions are moving key dockets forward and have made the transition to virtual work environments like the rest of us. Frankly, I commend the commissioners and the staffs and the customer groups for continuing to work well under less-than-ideal conditions.As we discussed in prior quarters, we're very pleased to be taking a significant step forward in our energy transition with the passage of Oregon's groundbreaking renewable natural gas legislation. Over the last several months, we've been working closely with the Oregon Commission on rulemaking. And at the end of March, a draft set of rules were issued, and we are currently engaged in the formal comment process with the commission. I'm excited with the progress of our renewable team -- that our renewable team has made and the great strides that they're making in 2020.We're pleased to help communities take advantage of our modern distribution system in new and exciting ways that pragmatically address climate change. I'm also very proud of the progress we've made building our water utility business. So far this year, we've closed 4 transactions, including our first in Texas. Cumulatively, we've invested nearly $110 million in this space. Operationally, the water utilities are performing well amid the pandemic. We've implemented incident command and business continuity plans across these companies, and we've leveraged our natural gas expertise to provide centralized resources and planning as well as provide a larger, stronger balance sheet. The ability of our water utilities to work together during the crisis further validates this roll-up strategy.During 2020, our team will be integrating the utilities we've already purchased and assess the maintenance and CapEx needs of those businesses. We continue to believe in the strong investment potential of this industry as aging infrastructure needs to be replaced, and I remain excited by the growth opportunities ahead in other areas.Our company has weathered many things in the last 162 years, and I'm confident in our ability to handle the challenges at hand. I continue to stand behind our commitment to customers to provide safe and reliable service, and I believe in our regulated business strategy and the resilience of this team. We will continue executing on our strategy and look forward to more success as we look forward in the coming year.So with that, Brandon, thanks for taking time with us this morning, and we'll open it up for questions.

[Operator Instructions]. Our first question comes from Tate Sullivan with Maxim.

Frank, I have a question with the extra -- with the cash drawdown, the cash you increased as of the end of the last quarter as part of your comments on the lower end of your '20 guidance. Are there costs related to maintaining that cash balance? Or have you already returned it to the banks? And I understand why you would have pulled it, but I apologize if you commented on that earlier.

Yes. I'll just -- I'll start, and then, Frank, if you want to give more details. Obviously, when you -- via a commercial paper and pull-down of bank lines, plus we also did a long-term issuance that was planned anyways. So that was -- the long-term issuance was already built in, and I think that we did the 30-year issuance at the lowest interest rate we've ever done as a company. On the bank lines, yes, there is a little bit of cost for carry, but it's fairly minimal in the scheme of things. Frank, do you want to add anything to that?

No. I don't have any detail to add to that. We will continue to monitor the -- both our local economy and the behavior of banks in the commercial paper market. Right now, we love having the guaranteed liquidity that we have, but it has a modest cost. Of course, we reinvested it. A small rate, but we try to minimize that cost. But right now, we think it's relatively cheap insurance, and we consider that cost when we look at our -- the rest of the year.

And Tate, on that last item, I'll just tell you, we don't plan to hold the cash for the entire year. We're just going to monitor things here closely. And when it appears that we're all on better footing here, we'll go back and return the cash.

Okay. Okay. Understood. You've -- David, you've operated some of the water utilities now for a little bit since announcing the acquisition strategy a couple of years. Can you -- what --has there been key differences? Can you highlight between operating the water utilities versus your natural gas businesses?

It's a good question, Tate. Actually, there's a lot of similarities, to be honest with you, in terms of -- you should be obviously good. Hopefully with the regulatory environment, you ought to be good with customer service. Obviously, on the construction side and putting infrastructure in place, there's a lot of synergies between the two.What we have found during this pandemic, though, is that it's highlighted some additional benefits here, at least from my perspective, as it relates to the water companies. They've been able to take advantage of our supply chain process. So all of us have been, like the rest of the country, trying to get additional PPE and those type items for our men and women that are in the field. And I think a lot of the smaller water companies would have had a much more difficult time doing that if they had not been associated with us. I think they're also enjoying being part of a company with a strong balance sheet.And then I think the last thing I would say is I think we've brought a business continuity and an incident command structure to those utilities that has allowed them to respond very well to this event. And then also, Justin and his team are doing a great job of putting long-term plans together and being much -- being very focused on what these entities need, how we do them and then, ultimately, when we do those capital investments. So some broad comments from me, Tate, on that point.

Our next question comes from Aga Zmigrodzka.

Could you provide more color on 2020 capital program? Do you expect any changes to CapEx due to the impact of COVID-19?

Frank, do you want to take the lead on that one?

Sure. Yes. We've done a bottoms-up review of all of our capital programs going down basically to the project level. And we monitor them very closely with our project managers to flag up any concerns there might be around permitting or other execution issues, and we will continue to monitor that very closely. But you have to remember, about 50% of our projects are safety and reliability. 20% this year, a little bit heavier than usual, is technology. We've got some facilities. And then about 24% growth. And when we look through it at that level, at this time, we do not have significant concerns. We, in fact, feel very confident at this moment that we will stay within our guidance range for the year. Now we'll have to watch this as the economy unfolds, but we're feeling very good about our ability to deliver on that plan right now.

That's very helpful. And you applied for regulatory deferrals to recover COVID-19 expenses. When do you expect potential decisions and impact on earnings?

Yes. Aga, this is David. It's unclear at this time. I mean we're just -- we're really at the early stages of this. But the way deferrals work out in general is you go back in at a later date and work with the regulator on some form or fashion of recovery or other methods. So a little bit early right now to be kind of guessing the timing of that.

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

Well, thank you, Brandon. Thank you, everybody, for joining the call today. I think everybody knows that the AGA Financial Forum, obviously, is not going to happen in person, but there is a virtual forum. So if you would like to be part of that and to talk with us, Nikki Sparley is the person to get a hold of. And with that, thank you for taking the time today, and I'll end the way Aga did. Please be safe. Thank you.

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