Okay. Thank you, Christie, and good morning, everyone.

Welcome to New Jersey Resources Second Quarter Fiscal 2021 Conference Call and Webcast. I'm 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 caution listeners of this call that the current expectations, assumptions and beliefs forming the basis for 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 1. These items can also 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 statement referenced herein in light of future events. We'll also 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, it is not intended to be a substitute for GAAP.

Our non-GAAP financial measures are discussed more fully in Item seven of our 10-K. Our agenda for today is found on Slide 2.

Steve will begin today's call with highlights from the quarter, followed by Pat, who will review our financial results. Then we'll open the call up for your questions.

The slides accompanying today's presentation are available on our website and were furnished on Form 8-K filed with the SEC this morning. With that said, I'll turn the call over to our President and CEO, Steve Westhoven.

Steve?

Thanks, Dennis, and good morning, everyone. Thank you for joining us today.

Midway through fiscal 2021, NJR has delivered strong performance for our shareowners. On Slide 3, I'll take you through the highlights.

This morning, we reported second quarter net financial earnings of $1.77 per share, more than doubling last year's second quarter results, primarily driven by performance at our Energy Services business. During the second quarter, periods of widespread cold across the U.S.

led to an unusually high demand for natural gas. And as in the past, Energy Services strategically located in geographically diverse Storage & Transportation assets enabled that business to meet the needs of its customers during a time of unprecedented volatility.

The outsized performance of Energy Services illustrates the limited risk, high upside value proposition of our long option strategy. The combination of this strategy and the generation of more fee-based revenues, such as the 10-year asset management agreement we announced in December, provides for a powerful business model.

Pat will provide a more detailed look at the drivers behind Energy Services' performance later in the call. The contribution from Energy Services enabled us to increase our NFE guidance for fiscal 2021 for the second time this year to a range of $2.05 to $2.15 per share from our original guidance of $1.55 to $1.65 per share.

I'll provide more color on the next slide. At New Jersey Natural Gas, we filed a base rate case to recover almost $850 million of infrastructure investments in the settlement of our last rate case.

This includes costs associated with the Southern Reliability Link, which is over 90% complete and expected to be placed into service this fiscal year. New Jersey Natural Gas received approval for SAVEGREEN 2020, our largest-ever energy efficiency program.

This new program authorized $259 million in spending over three years, furthering our commitment to sustainability by helping customers lower their energy usage, save money and reduce their carbon footprint. The rollout of the program is expected to begin this year.

At Clean Energy Ventures, we completed our first commercial solar project into service, adding 2.7 megawatts of installed capacity. We continue to develop our pipeline of projects to achieve our goal of doubling our installed capacity by the end of fiscal 2024.

Leaf River, our storage facility located in Mississippi, performed well during the February weather event, meeting all of our customer commitments under very challenging circumstances. And finally, we continued construction of Adelphia Gateway South zone.

Adelphia Gateway has received all necessary Pennsylvania DEP permits and is working to obtain FERC notice to proceed for construction of laterals. We expect to place a number of the project facilities into service by the end of the year.

Turning to Slide 4. We are increasing our fiscal 2021 NFE guidance to $2.05 to $2.15 per share, an increase of $0.20 per share compared to our March 15 update.

Our initial guidance's increase incorporated estimated bad debt to account for any Energy Services customers negatively impacted by the February weather event. Today's upwards guidance revision reflects payment by all of Energy Services customers apart from one due to bankruptcy.

Our fiscal 2022 and long-term NFE guidance remains unchanged. As a reminder, guidance for fiscal 2022 is $2.20 to $2.30 per share.

And we are maintaining our long-term annual growth rate of 6% to 10% for fiscal 2022 NFE, excluding hedged services. Slide 5 provides additional detail on our base rate case filing.

On March 30, we requested an increase to base rates of $165.7 million, equivalent to an increase of $118 million in operating income. Since the conclusion of our last case in 2019, New Jersey Natural Gas has invested nearly $850 million to upgrade and enhance the safety and reliability of our transmission and distribution systems.

This includes the installation of the Southern Reliability Link at a cost of more than $300 million. We hope that the BPU's review of our filing will be complete before the end of 2021.

We look forward to a successful conclusion announced at the interest of our customers and the company. On Slide 6, I'll take you through some operational highlights of New Jersey Natural Gas.

Looking at the top left, we invested $198 million this fiscal year with about 26% of the CapEx providing near real-time returns. We added almost 3,700 new customers over the first six months of the year, below our regular growth rate due to the ongoing pandemic.

However, we still expect to add approximately 28,000 to 30,000 new customers during the three-year period from fiscal 2021 to 2023. As I mentioned earlier, construction on SRL continues to progress as well.

On Slide 7, I'll take you through the operational highlights of Clean Energy Ventures. During the quarter, we completed our first out-of-state project in Connecticut.

This is a small but noteworthy step toward executing on the regional solar investment strategy we discussed during our November Analyst Day. We now have over 360 megawatts of installed capacity.

Total invested capital at CEV for the first six months was $38 million. We expect to see some in-service dates shift from the beginning of fiscal 2021 to the beginning of fiscal 2022 as a result of permitting and interconnection delays related to the pandemic.

However, we remain on track to meet our goal of adding incremental 160 to 180 megawatts of capacity by the end of fiscal year 2022. The bottom right shows our expected CEV revenue for fiscal 2021, a significant portion of which is secured through our SREC hedging program.

While we adjusted our capital forecast for this year, most of these projects were scheduled to be in service toward the end of the fiscal year, marginally affecting expected revenue. Before I turn the call over to Pat, I want to take a moment to provide an update on our sustainability initiatives on Slide 8.

In January, we issued our 2020 Corporate Sustainability Report. For the first time, this year's report includes disclosures in line with SASB, the Sustainability Accounting Standards Board, and the American Gas Association's frameworks, furthering our commitment to transparency and reporting on ESG matters.

And on Earth Day this past month, we launched a significant new sustainability program, NJR's Coastal Climate Initiative. This program supports local-based climate solutions that have an impact on the communities we serve.

CCI's first endeavor will be to work with the New Jersey chapter The Nature Conservancy to support the restoration of saltwater tidal wetlands in the Barnegat Bay, part of New Jersey Natural Gas' service territory. These areas of coastline are carbon sinks ecosystems that remove carbon dioxide from the atmosphere, storing it in the ground soil.

And they also act as natural barriers that mitigate storm surge, protecting people and properties in our coastal communities. And now I'll turn the call over to Pat to go through the financials.

Pat?

Thanks, Steve, and good morning, everyone. Slide 10 shows the main drivers of our NFE for the second quarter.

As a reminder, we're now utilizing the deferral method accounting for investment tax credits at CEV and, as such, recast our financials for the comparable periods. Reported NFE of $170.6 million or $1.77 per share compared to NFE of $84.3 million or $0.88 per share in the second quarter of fiscal 2020.

NJNG's NFE was lower due to higher loan expenses partially offset by utility gross margin. The higher loan was primarily due to increased compensation and technology expense.

CEV's NFE was basically flat compared to last year. Storage & Transportation saw an increase in NFE during the quarter, most related to increased operating income from Leaf River relating to hub services revenue.

Energy Services improved $94 million primarily due to higher financial margin compared to last year, the details of which I'll take you through on the next slide. Slide 11 provides the additional detail around Energy Services performance during the quarter and that illustrates how temperatures were partly abnormal during the February weather event in the Mid-Continent and Gulf markets and also the storage assets that Energy Services holds in these regions.

Through this period of colder weather, there was high demand for natural gas, which Energy Services was able to satisfy by using storage assets to supply natural gas to a variety of customers, and usually high demand resulted in a strong process – operation, which in turn drove Energy Services profitability. Turning to Slide 12, we'll take you through some of the changes in our capital plan for fiscal 2021 and 2022.

As Steve mentioned earlier, we're starting to see some of the in-service dates for certain CEV projects shift to fiscal 2022 due to permitting and interconnection delays related to pandemic. We've adjusted our capital plan accordingly.

For fiscal 2021, we now expect to spend between $96 million and $180 million at CEV compared to our prior forecast of approximately $165 million. However, the capital is simply shifting to fiscal 2022.

We still expect to reach our goal of adding 160 to 180 megawatts of capacity over the two-year period. It's also important to note that the NFE for fiscal 2021 were largely unaffected by the shift in capital.

Revenues will be minimally impacted given the majority of our projects have expected in-service dates toward the end of the fiscal year. And with the change in financing and accounting methods, the impact related to ITTs will be a fraction of what would have been previously.

On Slide 13, you can see our product pipeline for fiscal 2021 and 2022 was about $255 million, which represents 80% of our targeted CapEx for the next two years. Approximately one-third of our project pipeline is currently out-of-state projects.

And for the projects in New Jersey, we expect to earn an average TREC factor of 0.9 per kilowatt hour. Turning to Slide 14, you can see the update to our cash flows and financing projections.

Our cash flow from operations remained strong, with no equity needs for the foreseeable future aside from our normal DRIP program. Demonstrating the strength of our cash flows, Fitch recently affirmed NJNG's investment-grade credit rating with a stable outlook.

On slide 15, we've highlighted the details of our SREC hedging program. As you can see, we are well-hedged in the next three energy years.

We have 93% of our 2024 volumes hedged. And for the first time, we've been able to hedge SRECs four and five years out.

The market fundamentals for energy years 2025 to 2026 are supporting strong pricing, with SREC trading at or above 85% of SACP, with 36% and 10% hedged for 2025 and 2026, respectively. I'll now hand the call back to Steve for some closing remarks.

Thanks, Pat. Before I open the call to questions, I'd like to summarize the quarter.

Through the first half of the year, NJR delivered strong results. The over-performance from Energy Services allowed us to increase our guidance for the fiscal year and provides the flexibility to reinvest in our business.

We file the rate case to recover our infrastructure investments, including the costs associated with SRL, received approval for SAVEGREEN 2020, our largest-ever energy efficiency program. CEV has a strong pipeline of projects that will allow us to reach our goal of adding 160 to 180 megawatts of capacity by the end of fiscal 2022.

And we received all necessary Pennsylvania DEP permits and filed with FERC for a notice to proceed for construction of laterals for Adelphia Gateway. I want to thank all of our employees for their hard work through the first half of this year.

And now I'll open the call for questions.

So much for the recent year. I wanted to ask first just on the cash flow from ops guidance.

I think compared to last quarter, you raised the midpoint by $20 million, if I'm reading that right. Obviously, that's a little less than you – the benefit from Energy Services.

So I'm just wondering if you can speak to that a little bit first.

Hi Gabe, this is Pat Migliaccio. You're correct, cash from operations increased by about $20 million, which is just a little bit less than what the ultimate guidance raised.

There are a couple of other minor tweaks in there, but the majority of the change is related to Energy Services.

Okay. Thanks Pat.

Maybe if I could also talk about some of your projects. On SRL, I noticed the cost moved up a little bit.

Is that something – first of all, are you confident this is where your costs kind of stay with the last couple of percentage you kind of have to finish up on the project? And then in terms of recoverability of those cost increases, can you speak to that to you?

Yes, Gabe, this is Steve. So the project is about 97% complete, so almost finished at this point.

And yes, we expect to recover all those costs. Remember, this project has been approved by BPU, received all necessary permits.

And really this is borne ahead of Superstorm Sandy and the need for resiliency, so a lot of support for the project. We'll go through the process for the rate case to see recovery and see how it turns out.

But all indications certainly point towards recovery.

Got it. Thanks Steve.

And then on Adelphia, in terms of getting the permits from the FERC to start construction, and the collaterals you're expecting in service, has that timing shifted at all in terms of the project?

I think it hasn't shifted too much, maybe by a month or two. So we have adjusted our margins slightly, that certain portions of the projects are going to start going in service at the end of the year.

But a little bit of detail associated with the contracts that will come in, we're not changing anything from a financial guidance on the project, but construction is what construction is. It has been shifting slightly, if you will.

Gabe. You probably noticed that the CapEx schedules, just to take a look at that.

We did shift a modest amount of capital, $25 million, $26 million on the Adelphia Gateway project from fiscal 2021 to fiscal 2022, just reflecting that minor change in some of those components of the project.

That's helpful. And just last one on this, maybe just an update on Leaf River.

Clearly, it sounds like the asset performed well during winter storm. I know it's mostly contracted, but what are you seeing from customers there as far as, I guess, interest in, I don't know, expansion or contract value at the asset?

Yes. The asset performed very well.

Everybody knows it was an extreme weather event took place down in that region in February. So we're pretty pleased with some pumps in – some earnings due to some short-term services they were able to provide.

As you look forward, you would expect that, that need for reliability in that market would drive some higher asset values. We don't have anything to report yet, but I would expect that certainly, all the utilities in real users, fiscal users down in that area are looking to bring more reliability into their book going forward.

Thanks Steve.

Good morning everyone.

Hi Travis.

You've talked in the past here recently about derisking Energy Services, and I guess two questions on that line. One, have you already derisked it such that your games would have been even larger?

Had you not gone through the derisking process or started it? And then two, is this kind of delta, I guess, over a normal level, all what we would expect in future extreme events, right, even on the derisking type of scenario as you've laid out?

I wish I could answer that question accurately as far as what would be the delta or what would be the amount that you would expect in a period of high volatility. But you can see, if you go back and look at prices down in that area, they were up in the $1,000 per MMBtu type range.

We've never experienced that before. And I think if you look across the U.S.

even historically, you're going to get $250 or something. So it was definitely multiple times higher.

So I think trying to predict forward volatility is something that would be very, very hard to predict in the future. I think back to the first part of your question, we had all the assets in our book.

The AMA agreement doesn't start until the end of 2021, 2022 time frame. So all the assets are in the books, so kind of a full portfolio from that perspective.

But going forward, we thought a number of assets that we're going to see that are going to be utilized in the future, and storage was the largest component contributor this year to the P&L of the book. And remember that the asset management agreement is really centered around transport assets.

Okay. So you do still have the optionality even under your derisking strategy, you would want to keep that optionality?

If there's still going to be a significant portfolio that needs to be managed in the future, yes.

Okay. And then on the Clean Energy Ventures, how are you thinking about financing that as it becomes a larger share of your CapEx program?

Is it project debt or do you plan on taking that on your balance sheet?

Travis, this is Pat Migliaccio. So our plan that we laid out at the Analyst Day is to finance all of our commercial solar projects with tax equity sale-leaseback.

And that is still considered on balance sheet, although it does receive, what I'll describe as, favorable treatment from Fitch in terms of how we select and methodology. Once you get out to a number of years out, 2025, 2026, we will have some more optionality in terms of how we think about that kind of thing.

But for now, it's all going to be sale-leaseback financing tax equity structures for commercial. And then residential, we financed through the private station market as we have our other nonregulated investments.

Okay. Very good.

That’s all I have, thank you.

All right, thanks Travis.

Yes. Thank you, Christie.

And I want to thank everyone for joining us this morning. As a reminder, a recording of this call is available on our website.

Also, I want to thank you for your interest and investment in New Jersey Resources. Thank you.

Goodbye.