Good morning. I'm John D'Orazio, President and CEO of RGC Resources, Inc. Welcome and thank you for joining us as we discuss RGC Resources' Second Quarter 2019 Results. First, I would like to go over a few administrative items.

[Operator Instructions] The link to today's presentation is available on our Investor & Financial Information page on our website at www.rgcresources.com. We begin the presentation with a quick reminder on forward-looking statements, as shown on slide 1. Moving on to slide 2.

Today, we plan to review key operational and financial highlights, our outlook for 2019 and end with Q&A. As shown on slide 3, we had a very strong quarter. Second quarter 2019 earnings per share are $0.58, which is an $0.11 or 23% improvement over second quarter 2018.

Further details of our financial results will be discussed later in the presentation. As slide 4 highlights, we invested $5.3 million in a regulated utility in the second quarter, a 6% increase over the same period last year.

We spent approximately $2 million on infrastructure replacement, $2.7 million on customer growth and $0.4 million on other capital needs. The quarter-to-quarter change was primarily due to elevated spending related to customer growth.

As shown on slide 5, our year-to-date capital spending increased approximately $600,000 over the first half of 2018, primarily due to infrastructure replacement and customer growth. For slide 6, we continue to experience steady customer growth. We added 179 customers during the second quarter, bringing year-to-date customer additions to 392.

As noted on slide 7, total volumes for the second quarter 2019 decreased slightly as compared to the prior year. This was due to a 4.2% warmer weather compared to the same period in 2018. Commercial and industrial lines were consistent period-over-period. Over on slide 8.

Despite warmer weather, year-to-date volumes increased slightly compared to the prior year. Commercial and industrial volumes increased 2% and continue to show consistent growth. Now I would like to introduce Paul Nester, Chief Financial Officer, to review our financial results..

Thank you, John. For those of you following along via webcast, we are on slide 9. We will begin by reviewing second quarter results. Operating income is approximately $6.2 million. We implemented interim non-gas building rate effective January 1, 2019, related to our rate case.

These rates provide revenue lift from the inclusion in rate base of non-SAVE capital expenditures since the 2013 rate case, which was our last rate case, in the 2019 pro forma year. This revenue lift, net an estimated rate refund, resulted in margin increase over the same quarter last year.

Margin increases were offset by higher depreciation expense as well as increases in various operation and maintenance expenses in the current year. Equity earnings in our Mountain Valley Pipeline investment increased over $500,000 due to construction spending in 2018.

Other operating income is favorable when compared to the second quarter 2018 primarily due to the $156,000 pretax impact of revenue sharing, which began April 1, 2018. Moving on to our year-to-date results.

Operating income increased to approximately $9.5 million primarily due to revenue lift from the rate case combined with customer growth and strong delivered volumes. These increases were offset by higher depreciation and increases in various operating and maintenance expenses.

Equity earnings in the MVP investment increased approximately $920,000 due to the 2018 construction on the project. Other income increased by approximately $200,000 primarily due to the impact of revenue sharing. Net income increased over $1.5 million or 29% compared to the first 6 most of the prior year.

Trailing 12 net income increased over $2.5 million or 41%. Trailing 12 results are impacted by the same drivers at the quarter and year-to-date periods. John will now discuss our outlook for the remainder of 2019..

Thank you, Paul. Now let's review our capital expenditure projections. In fiscal 2019, we are on track to invest approximately $46 million. As highlighted on slide 10, $22.8 million will be invested in a regulated utility with a focus on infrastructure replacement and customer growth.

The remaining $23 million will be invested in Mountain Valley Pipeline. Roanoke Gas filed its general rate case in October 2018, and proposed rates went into effect January 1, 2019. The rate case audit is currently underway, with the staff report expected by the end of our fiscal third quarter. We hope to have a final order by fiscal year-end.

The MVP project is back in the field after the winter shutdown. The project is approximately 80% complete. We invested approximately $3 million in the MVP project during the second quarter and approximately $13.2 million year-to-date. We anticipate investing an additional $9.8 million during the remainder of fiscal '19.

Finally, our fiscal 2019 earnings guidance is now $1.02 to $1.07 per share..

Our portfolio is well diversified with agency MBS and CMBS balanced with the seasoned credit portfolio that will be nearly impossible to replicate today.

And we progress further into the credit cycle, we believe that our strategy will continue to support a strong core earnings stream, while allowing us to take advantage of opportunities in the mortgage market wherever they may exist. So I'll stop here and turn the… [Technical Difficulty] There must be a robot caller [ph] on the line there.

We will try to unmute the line again and see if that works. …our equity allocation to agencies and credit remains well balanced, with a modest increase in agency assets from 49% to 50% quarter-over-over. On a total asset basis [Technical Difficulty].

Gentlemen?.

Hey Mike, are you able to hear us?.

I am now..

Okay. Well, go ahead, you can speak. Thank you..

Sorry about that..

No worries. I think when you unmuted, you kick us to another line. I think when we unmute, we're fine. So I just wouldn't touch anything on your side..

Okay, thank you. We're not going to touch anything..

Listen, just one question, guys. Obviously, Atlantic Coast is having some issues, and that line runs, let's call it, similarly to where MVP runs in some areas.

And I'm just wondering if the partnership's looking at additional options for expansion given what appears to be, and this is just my opinion, a slightly deteriorating outlook for Atlantic Coast..

Yes. Thank you for the question. And the managing partner, Mike, EQM or Equitrans Midstream has disclosed in their most recent 10-Q filing that there are some expansion opportunities that are being explored.

And I think they specifically disclosed that there's the opportunity to possibly add 0.5 a day - 0.5 Bcf per day of shipping volume on the pipeline. So that's an exciting development obviously, and it's a positive development. I'm not sure that, that has any direct correlation to the Atlantic Coast.

We haven't heard those details yet or we, frankly, do not know the details about of the expansion opportunity there. But there is some - we believe some upside to the Mountain Valley..

Would that require just more compression? Or would you be looking at double-stacking?.

Correct. It would require some compression, and I think that would also be publicly disclosed..

Okay. I apologize, I haven't had a chance to look at Equitrans. It's been a rapid and quick earnings season from my side. But....

No apologies necessary. That's a very new development, and again, first time it has been publicly disclosed..

All right. I'll stop there. Thank you gentlemen..

Thank you..

Anybody else have any questions? All right. If there are no more questions, this concludes our second quarter earnings call. Thank you again..