Welcome to RGC Resources First Quarter Earnings Call. I am John D'Orazio, President and CEO of RGC Resources. Thank you for taking the time out of your day to attend. [Operator Instructions] Also the link to today's presentation is available on our website at www.rgcresources.com, on the investor and financial information page.

Before we begin, just a reminder on forward-looking statements as shown on Slide 2..

Moving to Slide 3, we plan to review key operational and financial highlights, our outlook for 2018, and take any questions..

Moving to Slide 4, first quarter earnings per share was $0.28, which included a onetime noncash charge of $208,000 related to tax reform. Excluding the onetime charge, earnings per share would have been $0.31, which is equal to the first quarter 2017. We will cover more first quarter financial results later in the presentation..

I would like to review the 4 primary components of our earnings growth strategy. Number 1, continued investment in a regulated utility, which will allow us to grow rate base of earnings. Number 2, increased margins through customer growth. Number 3, control our operating expenses.

And number 4, invest in projects or businesses outside of the regulated utility, for us, at this time, that is the Mountain Valley Pipeline. .

I will now review first quarter investment in the regulated utility. I'm on Slide 5. We invested $5.35 million, a $0.5 million increase or 9% over the same period last year..

Approximately $2.6 million was spent on infrastructure replacement, $1.5 million on customer growth and the balance on other capital needs. Moving on to Slide 6. We continue to experience steady customer growth. We added 205 customers in the first quarter..

On Slide 7, our commercial volumes increased 14% and industrial volumes 8% in the first quarter compared to the same period last year. Of significance, our top 10 customers' usage increased 14%. The final strategy component in the -- is the investment in the Mountain Valley Pipeline. We are on Slide 8.

The October to December period was very successful for the Mountain Valley Pipeline. FERC issued the certificate of public convenience and necessity in October. To date, the project has received approval on all federal permits and critical state permits.

FERC also issued notice to proceed approval on 2 phases, the pipeline is anticipated to be in service at the end of 2018. In the first quarter, we invested $1.2 million in the project..

Now I would like to introduce Paul Nester, our Chief Financial Officer. He will review the first quarter financial results and discuss in more detail the impact of tax reform. .

Thank you, John. For those of you following along via webcast, we are on Slide 9. Gross margin is approximately $318,000 lower, however, that decrease is due to a $462,000 tax reform adjustment that we will discuss in more detail later. Gross margin without the tax adjustment increased $156,000. Increases in the infrastructure replacement rider or SAVE.

Customer growth and industrial volumes were offset by an unfavorable impact from the weather normalization adjustment. Equity earnings in our Mountain Valley Pipeline investment increased approximately $64,000 over the prior year due to the increasing investment in the project.

We have managed our other operating expenses to be essentially flat for the quarter when compared to the prior year. Interest expense increased approximately $154,000 or 34% on higher borrowing and higher rate..

Now let's briefly review our trailing 12-month earnings. We were $0.83 compared to $0.85 in the prior period, excluding the onetime tax charge, earnings would have improved 2.5% to $0.86 per share..

Moving to Slide 10, which highlights the first quarter impacts of tax reform. Our unregulated operations had a onetime charge of $208,000 related to the write down of net deferred tax assets.

In the Roanoke Gas utility, we have adjusted gross margins and tax expense equally by $462,000 for the estimated amount of the tax rate change included in Roanoke Gas customer charges..

At this point, I'll hand it back over to John to discuss the 2018 outlook. .

Thank you, Paul. Let's review our capital expenditure projections on Slide 11. We are maintaining our focus on infrastructure replacement and customer growth, representing approximately 80% of our capital spending. We plan to spend approximately $20 million in fiscal 2018.

As the Mountain Valley Pipeline has started construction and expected to be in service at the end of 2018, our investment for the remainder of fiscal 2018 will be approximately $23 million. Finally, for fiscal 2018 earnings, we still maintain our guidance of $0.91 per share. .

That concludes our prepared remarks, we would now like to take any questions from the audience. .

It's Michael Gaugler from Janney.

I saw some -- I saw the news article in the Roanoke Times, wondering if you could maybe flesh it out a little bit more for us on the tree cutting situation for Mountain Valley and how you see that playing out? What the odds are that perhaps there might be a delay in putting that in service as a result of that?.

Yes, thank you for your question, Mike. And the project's approach at this point has been to essentially subdivide the requests deferred for the notices to proceed. And the fault there is that if they can get individual items approved and able to move forward on those.

Per chance, if there is a judicial event that possibly halts an item, it doesn't halt the entire project. The article you're referring to, what was a local U.S. district court action regarding access to approximately 300 properties that the project did not actually have easements to at this point.

In other words, those property owners were holding out essentially for eminent domain. We think that the project's managing that appropriately. And that ultimately the judicial process there will be resolved and that the project will gain access to those properties and can begin tree cutting in the appropriate time windows. .

Okay, well, that's good. And just one housekeeping question.

When the 10 -- when do you expect to have the 10-Q out?.

We're going to file that this morning, actually, right after the call. .

Good question. .

Are there any more questions? All right, if there are no other questions. I'd like to thank you, and wish everybody a great day. Thank you for attending..