And then, for like Q&A, if you can remember to repeat the question, just because for the webcast. Okay. This will point to yellow. I believe we have five minutes left, so after 30. Ready? Okay, we're gonna go ahead and get started with our next presentation. You know, first off, thank you everyone who joined us in person and here on the webcast. First off, my name is Joe Noyons with Three Part Advisors. Up next, we have an Energy Services holdco, New Jersey Resources, traded on the New York Stock Exchange under NJR. Presenting on behalf of the company today is going to be the Director of Investor Relations, Adam Prior. Thanks, Joe. Hi, everybody. I appreciate everyone's time. To tell a little bit about us, we're probably a little different than I would imagine most of the companies here. We're about a $4.5 billion small cap company in the energy industry, and basically, we're focused on delivering a high growth rate coupled with a favorable dividend that'll provide a stable and high return for investors over time. So we provide much of what we would consider to be the growth characteristics of a small cap with the balance sheet strength and flexibility of a mid cap. But let me tell you a bit about us. We are an energy infrastructure and Energy Services company. So what does that mean? We have a complementary portfolio of businesses that leverages our expertise as a utility provider. So we are a natural gas utility. In Chicago, it may be someone like Peoples Gas or ComEd, as an example. What we are is New Jersey Natural Gas, which I'll talk about in a minute, that handles essentially the Jersey Shore, if you think about it, but I'll go into location in a bit. This natural gas utility is able to serve a growing customer base, and our core thesis around our company is that there's continued growth in energy demand, but not continued growth in infrastructure assets. As a result, that's only going to increase the value of our assets over time. That means that with a diversified portfolio like we have in the midstream space, as a downstream utility, we are the largest solar owner-operator in the state of New Jersey. We have a renewables platform. All of these things together coincide to provide a very stable earnings profile that should continue now into, and into the future. In addition, we think that our strategically managed assets, you know, are going to help as we continue to transition in an energy transition to a more decarbonized stage over time, in a way that's reliable and provides energy to all of our customers. So what are our core businesses? As you can see here, I'll start with New Jersey Natural Gas. We serve about six hundred thousand customers. I said the Jersey Shore. We're in several different counties throughout the state of New Jersey. I won't make you be geography experts, but if you think Asbury Park, Middletown, Red Bank, some of those areas in Monmouth and Ocean Counties, that's the heart of where we are, about halfway between Philadelphia and New York, located on and around the Jersey Shore, and we provide natural gas distribution to customers there. Clean Energy Ventures is our solar enterprise. That started a few years ago. I'll explain a little bit more about that in a moment, but what we are is an owner-operator of solar assets, traditionally to residences, but also commercial operations, typically somewhere between five and 25 MW. So if you look at NextEra as an example, we're not building out gigantic you know, utility-grade solar out into the grid. We're doing commercial and small business enterprise. Our midstream business is storage and transportation, and this includes assets in both phases. One is a storage asset down in Mississippi. That's a salt cavern that we use to provide natural gas in a capacity-constrained region of the Southeast. And we have a pipeline that goes through Philadelphia up to the Marcellus, called Adelphia, which is our transportation asset there. And then finally, our last two businesses are: we have a sales and marketing business that transports physical gas, called Energy Services, and a home service business, which is our smallest by percentage of earnings, but if you think about it, it's probably our stickiest. We've got about 100,000 customers, and we're providing everything from gas, water heater service, or AC service. I'm actually a service customer myself, and my AC went on the fritz during a hot period earlier this week. One of their guys came in, and yes, I work for the company, but these guys do a pretty good job in how they go about it, so if you think about us from a pie, I would sort of focus you in on this one. Historically, our utility is the predominant amount of our earnings. It is how we're valued, and rightfully so. About 60%-70% usually comes from our utility, with our growth driver being our solar enterprise, and the remaining 20% being Energy Services and our storage and transportation business. The main key that I try to tie out here is that they're all born out of our expertise that started in New Jersey Natural Gas. New Jersey Natural Gas is almost 75 years old. It had... We've been publicly traded for over 40 years, and if you look at our businesses from solar, it started from our regulatory construct in New Jersey Natural Gas, where we got to understand what the renewables market was gonna grow out in the state of New Jersey. And then outside of that, our expertise in the storage markets allowed us to take advantage of their sales and marketing business, and then from storage and transportation, strategically placed assets that we know better than most because we were able to trade in and out of those. So I'll start with the utility. As I mentioned, if you take a look at the map of New Jersey, you know, we've got about 11 million people in the state, heavily land-constrained, steady population growth. About our customer growth is somewhere between 1.7%-2% a year. This is almost entirely residential. 90% are homes, some commercial operations, but what they are, people traveling from New York down to New Jersey or that now commute, and we actually saw an uptick in COVID, when we thought that we would see a downward trend. So we're now starting to see a return to sort of pre-pandemic consistency when it comes to our customer growth. And even though we're land-constrained and even though we're capacity-constrained in terms of population, we're seeing areas where previously we had, like, a mall. Now it's getting bulldozed, and 1,000 residential units are going up. So while it's great for us from a utility perspective, probably as a person who lives in these counties, it's a little maybe more challenging to take, right? Like, now I'm seeing more multifamily homes. But for us, it provides a nice, consistent source of revenue growth. So we're in about six counties throughout the state. If you think about the way utilities work in general, these are all franchised locations. They're sort of mini monopolies, and within their service territory, we share New Jersey with three other gas utilities, and we are the second-largest in the state when it comes to size and population. As a utility, we're regulated, which means that you have to be in a state that provides stable and regular, you know, regular outcomes that you can hang your hat on, and luckily, we are in one in New Jersey. So the way to look at this is, over time, we have to go in to work with our regulators to set rates on behalf of customers. We make capital investments. We then recover those in time as we go and go into what's called a rate case, which I'll talk about in a second. We've had four rate cases over the last 20 years. All four have come out with similar outcomes and have been stable, and that's been largely the result of our relationship with our regulators and the way that we act in and around our customers. If you're not familiar with gas utilities, a way to think about it is: How are you aligned with your customers? How is Peoples Gas aligned with Chicago customers? How is New Jersey Natural Gas aligned with us? So the way that we look at this is any areas that we can have alignment with our regulators, our customers, and our investors, the better. So the way to think about it is we are decoupled. Pricing of natural gas is somewhat... It's a pass-through, so when Russia took Ukraine and had an attack two years ago, and we saw natural gas prices jump up to the high single digits, our customers were largely not as impacted because we were able to hedge those prices and pass on a lower rate of return to them. It didn't impact our earnings at all. We're simply a cost-of-service model. We are getting paid on the margin to provide reliable services to these customers, and influences up and down in terms of pricing is somewhat irrelevant for us, so when we look at revenue, it's a metric, but our revenue that we care about most is financial margin that drops to the bottom. Heavily focused on energy efficiency as a driver, you might not think about this as a utility, but we are in a position where we are supported by our state to get a near real-time return on any capital investment that we have when it comes to energy efficiency. This can be everything from putting a Nest thermostat in your house or doing an energy audit, you know, on your garage or putting a high-energy, high-efficiency furnace in. So as a utility, we're somewhat unique. We're one of probably the few companies here that have presented at this conference that actually wants you to use less of our primary product, and we want you to view it in the most efficient manner possible because we're able to go get a return from that and then pass on that efficiency through you through lower bills. It's a win-win through our regulators, our customers, and our investors. Rate case. Without going in, if you're not a utility expert, the way that regulated businesses recover rates is over time. You go in, you file a rate, base rate case with your regulating body, and then the next set of rates are approved or settled. It's a process. We're in one now. We were in one in 2016, 2019, 2021. This one is straight down the middle when it comes to rate case outcomes. Or I'm sorry, rate case process. Main replacement, covering new customer growth, energy efficiency, and it's use whatever metaphor you like, down the middle of the fairway. We're right in the middle of that process now with the hope to conclude it by the end of the year, with new rates in place for our customers by next year, through the winter heating season. Moving to solar. How does a natural gas utility get involved in solar? So in two thousand and nine, New Jersey started an operation where they started to look at the expansion of renewable energy throughout the state. This was a perfect opportunity for us to use our relationship with regulators to be able to expand there, while also furthering a decarbonization strategy that we have all around our company. So we started to look at growth in residences, putting solar on top of rooftops for homes, but also one to 25MW commercial processes and get there. So what we did was we built a... About 0.5 GW of in-service capacity right now and have a robust pipeline of investment options. So we think that over the course of the next few years, we could double or even triple what we have in service in terms of solar, and we take a bottoms-up approach to these things. We go project by project, and we look at it. If they can deliver high single-digit unlevered returns, that's when we invest. We started in New Jersey, we grew in there, and now we've started to expand out of state where half of our pipeline is now outside of the state of New Jersey. These can be in markets where we can build a minimum threshold of that high single-digit levered returns, while also having upside from things like power pricing increases. Our storage and transportation business was born out of our utility and energy marketing practice. We have great industry knowledge and value of infrastructure, and as a result, we were able to go and invest and acquire assets where markets were most capacity constrained and would continue to grow. So we have three main assets. One is a JV that we have with Enbridge, which is a storage asset in central Pennsylvania called Steckman Ridge. But there are two main assets, are the pipeline that I mentioned here in Pennsylvania that goes from the southern Philly region to customers. Kimberly-Clark was able to take a coal-fired plant, convert it to natural gas, and help push their decarbonization narrative, and at the same time, we were able to provide them safe and reliable service. So we think that these assets are strategically placed and are able to... Ultimately, as markets get more tight and as storage becomes harder and harder to build, which it is, it's challenging to get any new infrastructure built in America these days. Our value of our existing assets will only continue to go, and if we maximize them, then we're in good shape. Finally, I won't spend too much time on our Energy Services business. This is our. We manage a portfolio of physical assets that we serve customers all across America, and our strategy is predicated on the idea that as natural gas demand starts to grow and it's harder to build, we put ourselves in a position to take advantage of volatility. This is our capital plan. So we are looking to spend somewhere between $1.2 billion and $1.5 billion over the next two years, and this is spread throughout our businesses. And the way we think about it is this goes both into our utility, but it's also a competition for capital. Where we get the highest and most accelerated return is where we will start to divert or defer our capital to. It's a very consistent plan that we have continued to see structure with over the last few years, and we'll continue to look at that as we grow. Some thoughts about balance sheet and how we fund this. We have stated on the record we have no plans to issue block equity to be able to finance this plan. This is purely through cash flow. It's reinvested into our business, but also through the idea that our debt takes into account higher interest rates for longer, and our plan, if interest rates come down, would just be upside. Earnings, which I haven't really touched on, but I will now. The way to think about our business is: how do I think about a utility and its growth? Most utilities out there will have a growth rate that'd be predicated on bottom-line profit and expansion or margin. The average utility grows somewhere between 4% and 6%. We grow 7% to 9%, and we think that's as a result of our diversified operations. The way we structure our plan and our guidance are the things that we can control. We know what rates are at the utility. We know what the solar assets are going to be able to provide us in terms of generation and bottom-line profit. Our storage and transportation contracts are long-contracted assets, so we're not as greatly affected by fluctuations in price. So we build this floor that's here above a growth rate that is already at the highest point of our peer group. So that's our foundation. However, we have optionality throughout all of our enterprises to be able to take advantage of upside in each one. So I'll give you an example. We had a Winter Storm Uri a few years ago hit. All of a sudden, we saw incredible volatility. We were able to capture that through our Energy Services platform. We were able to take storage out of the ground at price X and sell it to Y. We didn't anticipate that; it wasn't part of our plan. But if you think that weather volatility will continue, we are in a position where our floor will then be able to take advantage of that. Our solar business is able to take advantage of power pricing upside. So if power is here and capacity continues to get constrained or AI demand continues to drive, we can take advantage of that on top of, on top of this. And so for the last several years, we've been able to set our guidance at our growth rate, which is already high, and then exceed it due to a confluence of all these events, whether it be weather volatility, storage constraints, or other. And again, it goes back to our core thesis that it's hard to get these assets built, and so they're just going to continue to increase in value. And if we can put ourselves in a position where there's upside optionality on top of an already high growth rate, we're in a good spot. We've grown our dividend in conjunction with our growth rate. If we're at 7%-9%, we're growing our dividend 7%-9%. I think we've increased it every year for the last 28 years, which makes us a Dividend Aristocrat, which is pretty fancy for a bunch of guys from New Jersey. But in general, it tracks along with our growth rate, and we see no reason to have that not continue. I'll sum up. The way that we look at ourselves is if we build a foundation of core operations that are here, so a stable growth rate that's expected, and understandable, and predictable, then we can build upside on top of that, that can exceed an already high growth rate. You couple that with a dividend yield, and all of a sudden, you're a company that is a SMID cap, that's providing investors with an 11%-13% return that they expect and can anticipate, and that we've delivered on over the last several years. So it's a different makeup than maybe some of the high growth companies here, but we actually think one of the reasons we're here is that we speak to a lot of utility investors, and they value us a certain way, rightfully so. But maybe there's a broader swath of investors that can look at us and say, "Hey, this is actually an energy infrastructure company that's diversified, that is providing a growth rate that is sort of small cap in nature with the financial strength of a mid cap." So that's our story, you know, as a whole. I know I sort of fire hosed a lot at you guys, but I'm happy to take any questions that you might have about the energy markets or utilities in general. Just a question. Your partner, or I wish it's your partner, but the other utility in New Jersey, South Jersey, went private, I think. Mm-hmm. Does that affect when you go into a rate case, does that, like? How does that affect you all? Does that change your-- Does the comp... Are the regulators more in favor of you as a public company than them, or does that change anything for you all? Now, I'll repeat the question. The question's relating to one of the companies that we operate in the state of New Jersey, is a company called South Jersey Industries, and about two years ago, they were taken private by an infrastructure fund run by JPMorgan, and the question is whether that impacts us from a regulatory relationship perspective. The answer is, it really doesn't. New Jersey is a good state to take a holistic look at how rate case outcomes are done over time. Historically, they've been settled across all the utilities, whether it be electric or gas, throughout the state. South Jersey Industries, being private or public, really doesn't factor into that decision because we're going to regulators with New Jersey Natural Gas, not necessarily as a public entity. They're not taking into account as closely, maybe our non-regulated businesses as they would otherwise. It really hasn't been an impact, and we've had consistent outcomes. In 2016, 2019, 2021, and hopefully in 2024, you know, we're coming to the conclusion of that process, but then it's been the same stable ROE, you know, high single digits, 9.6% across the state. Same, same equity layer, and nothing's really changed. We're in a rate case now. One of our other companies, which you guys may know, PSEG, is in one now, and we really haven't had any impact for the idea that SJI went private. We got a lot of questions about it, as you can imagine. There's not a lot of publicly traded neighbors in New Jersey that one goes public or goes private, excuse me. You know, our answer at the time was, you know, we don't really comment on other competitors and whatnot, but it was good to see the private markets, you know, start to value these assets the way that, you know, maybe public markets could. Sure? If you don't mind me asking, what was the take private multiple on that deal? It's at rate base, if I remember right, it was close to two times rate base. So, the way to look at utilities is we have an amount of assets and rate base, and most utilities when they are purchased are at some multiple of that plus earnings. You said you don't have plans to issue equity, which is great to hear from a utility. Can you just talk about how it sounds like you plan to fund it with either cash flow or debt, but if you could put that out and then just talk about how that extra profit. Where does that extra profitability come from, from operating businesses? Sure. So the question's relating to, you know, our statement that we don't issue, plan to issue block equity and how we fund our growth over time. So I'll go to. We love talking about our balance sheet. When we saw interest rates go up over the course of the last two years, we weren't as impacted as maybe some others in utility land. Our peers had taken maybe short-term interest at lower rates. We're much more staggered over time. So this is our term debt over the course of, you know, a certain period and looking out, and we have debt, you know, going out until several years at both the utility level and at our Holdco. Very staggered, no initial towers, no immediate impact from rates, and as a result, we get a lot of consistency in the way that we're able to plan. So to answer your question directly, we get a lot of cash flow that comes in that we are able to basically use as anti-dilutive effects. So our energy marketing business, let's say they have a year of outperformance. A Winter Storm Uri occurs. We're able to take that cash and use that to defer potential equity issuances over time. We do have some just through our DRIP and things like that, but it's moderate in nature and not... We don't have an existing ATM program where we have to hit the capital markets in order to grow. We're able to do all of that through basically this complementary, you know, portfolio of businesses that then spit out free cash flow that we can invest back into our business. And then we're, you know, our debt markets are pretty stable and, like I mentioned, staggered over time. So we actually think our balance sheet is one of our best stories. It's that we can provide a very strong growth rate and a strong CapEx profile with a balance sheet that is stable and well in excess of what any of our downgrade grade thresholds are for our credit, you know, ratings, groups, or anything like that. I don't know if I answered your question fully. Yeah. What is your debt to FFO at the moment? Our adjusted debt to FFO is about 18%, and that's well in advance of what a downgrade threshold would be, and we're rated by Fitch and Moody's when it comes to that. I might have missed it. Did you say where are you getting your natural gas from? You're just a pipeline company, right? So our gas supply for our utility is, it's pretty diverse. So we get natural gas from several different sources. We're in the Northeast, so if you were to look at large natural gas pipelines running across the Northeast that you might imagine, you know, Transco, TETCO, these are the kinds of places where we would pull gas from. In our utility, what's interesting is having supply diversity is huge because you're not as subject to gas price swings. Right. You don't have concerns. We have the ability to tap into several different pipelines. In addition, we have storage on site in terms of our service territory. So in many cases, we're able to take storage out of the ground at certain prices in the event that they have been volatile, and then take advantage of that on behalf of our customers. And then we share in that margin, and investors share in the profits that we make off of that. We call it our Basic Gas Supply Service or our Storage Incentive Program. And then what we do every year to try to mitigate price fluctuation is we hedge. So we don't enter a winter season, November first, unless 75% of our gas supply needs for the coming winter season are hedged in advance. So when we saw gas prices skyrocket in the spring of 2023, we were largely not as impacted. Now, we do get to pass those through to customers, but we were able to pass through a much lower increase than maybe some of our peers who don't hedge. And so our customers weren't quite as impacted by those gas prices that we passed through on our customer bill, and we weren't impacted on the bottom line portion at all. The Energy Ventures businesses, are those mostly power purchase agreements, like long contracted? It's a blend. It's a blend. Yeah. So, about half grid connected, half net metered, and the way we look at it is a lot of our out-of-state stuff, unless it has a regulatory construct that's similar to New Jersey. So think of the revenue profile of this business. We put in a solar project. This can be, let's say, 10 MW, just for hypothetical reasons. In the majority of the revenues that come from that project to our business will come through subsidy income. So we have a, let's say in New Jersey, we have a REC program where utilities are penalized if they don't purchase in a certain amount of renewable energy credits. We can then take that REC, and that makes up 80% of the threshold of that project. The other 20% can go through power pricing increases, and we have a very conservative multiple. If all of a sudden power prices start to skyrocket, we can benefit from that upside. In the event that we have a PPA agreement in place, we make sure that that is hitting that high single digit, you know, unlevered return, or we won't invest. If you look at our pipeline, we've got about 475 MW of capacity right now. All this contracted or under exclusivity growth that we expect to have will either be through PPAs that have that high single digit unlevered return criteria, or they have some construct in place. An example would be like Rhode Island, where they have a feed-in tariff, where we know over the next 20 years, this is exactly what it is. Again, we're building a solar enterprise that has a utility-like return threshold. 7%-9% is going to be used to support that, that growth, and if it doesn't hit that, we simply won't invest, and we're a certain size that we don't have to be forced into any, you know, quarter by quarter concerns or anything like that. We just- I'm still trying to get my head around the 7%-9% growth when you've got 1.5%-2% customer growth. Sure. What am I missing in there that's gonna drive... Because I'm assuming your rate case keeps your returns pretty similar, or where is the additional growth? Is it these other ventures you're putting money into, or is it- It's not purely customer growth that that drives that mechanism. So, our customer growth is actually, I think, higher than the U.S. average, but our growth rate comes from anything from our investments that we make, that we then ask for a return on. So let's say main replacement. We go in, and we spend $150 million in main replacement. We have been able to return a 9.6% ROE on that investment for a larger customer base. But it's not... A 1.7% customer growth- Right ... is just the amount of service that we're providing. We still need to go in and maintain what we're doing to ensure reliable service, and that's what we earn a return on and a bottom-line profit on. And the customer growth is just on top of that. So, you're spending CapEx in excess of the customers as you're upgrading? ... and maintaining a reliable service over time. Then there's areas where we can expand. So we have a SAVEGREEN program that's energy efficiency focused, which I mentioned earlier. That we get a near real-time return on. So we go in and evaluate someone's home, or we provide them, let's say, a zero-interest loan to go through and do an energy audit of your home. Those are areas where we can get immediate recovery from our regulators, and at the same time, we help them get more efficient. We're able to get a return on that that's equal to what our return would be when we go in for a rate case. So customer growth's 1.7%, but it's all residential, it's all sticky, slow, steady. It's not based on like a large commercial enterprise, you know, Tesla coming to Texas. You know, there's nothing like that that we're relying on. This is all pretty capacity-constrained growth, in a population-constrained area that we're growing in. Just to ask one follow-up: What advantage does New Jersey Resources have in building solar versus somebody else? What do you-- Is there some advantages to being a natural gas utility that you can get a better return from the solar environment? Not a better return. I would say our expertise over the last 15 years has given us an advantage over smaller players. I think the way to look at it is not as a natural gas utility, but as a larger company. So we have a balance sheet that we're able to go into, where maybe a smaller owner, operator or developer. Like, we're the largest in New Jersey. You know, some small, smaller groups or like Goldman Sachs would go in and do some, but they're not even doing it quite as much. And so we're able to then give a stronger balance sheet from those smaller developers to be able to back on, and at the same time, we now have expertise over the last fifteen years to keep our projects running at a high utilization rate, and we're able to integrate other solar projects. We've grown through a combination of greenfield and brownfield. So it starts with like a relationship with a developer. I'll point to you, you know, you're a developer A, you go in, you build a project, and we're able to fund and own and operate that over time. And we can use our balance sheet to be able to be stronger there. There are some interesting crossovers. So like we have a hydrogen facility that is in our rate base right now, that's pumping hydrogen today into people's homes, clean energy, and we... It's small. We created it as a pilot program to help, you know, our further our decarbonization strategy, but it's powered by our solar business, and the wastewater that we go through is also part of that decarbonization area, so like, there are areas where it starts to overlap, and you see the expertise that grows across our disparate business units where it makes sense, but largely, the operation of the unit, whether it's point person B or company C, putting it into place, you know, a solar panel is going to operate the way it does.