Good morning. I'm Paul Nester, President and CEO of RGC Resources. Welcome, and thank you for joining us as we discuss our 2022 second quarter results. We would like to apologize for the technical issues we experienced Monday with our conference call line. We do appreciate your patience and understanding. We believe we have fixed those issues today.

With that, let's review a few administrative items. We have muted all lines [Operator Instructions]. The link to today's presentation is available on the Investor and Financial Information page of our website at www.rgcresources.com. With me on the call this morning is Jason Field, our Chief Financial Officer; and Julie Pellillo, our Controller.

Moving to Slide 1. This presentation does contain forecasts and projections. Slide 1 is our forward-looking statement disclaimer. The agenda is on Slide 2, we're going to change the order a little bit this morning from our prior quarters due to the Mountain Valley impairment.

We will begin with Jason reviewing the financial statements and results followed by an update of our operational accomplishments. I will conclude with a discussion of the outlook for the remainder of fiscal 2022. There will be an opportunity for you to ask questions at the end. We are on Slide 3.

Just as a precursor to Jason's comments, we wanted to remind everyone of our corporate structure.

We use this slide in our investor presentation, RGC Resources, the NASDAQ listed holding company contains 2 subsidiaries, Roanoke Gas, which is our core business, a regulated local distribution company located in Roanoke, Virginia, serving the natural gas needs of 63,000 customers now in the greater Roanoke Valley.

RGC Midstream is our wholly owned subsidiary, which does hold the investments in the Mountain Valley pipeline and in the MVP Southgate. I would like to make a clear statement at this point before Jason begins.

There's no cost or rate impact to Roanoke Gas customers from Midstream's investment in the Mountain Valley Pipeline and the related impairment that was recorded in the second quarter. That's not any different than back in October 2015 when we announced our intention through the midstream subsidiary to invest in the joint venture.

Again, there's never been any cost or rate impact to Roanoke Gas customers. Jason will now discuss our financial statements, capital spending and delivered volumes..

Thank you, Paul. We are on Slide 4. For the second quarter of 2022, our operating income of $7.4 million exceeded the second quarter of 2021 by $344,000 or a 4.8% improvement. The overall net loss for the second quarter reflects the $29.6 million noncash impairment that we recorded on Midstream's Mountain Valley pipeline investment.

One theme that is common to both the quarter and the trailing 12 months is increased gas cost, which was up approximately 36% and is reflected in the higher revenues and operating expenses. As a reminder, gas cost is a pass-through with no operating income impact.

Non-GAAP cost operating expenses for the 3 months have increased primarily due to bad debt expense and other inflationary pressures. Excluding bad debt expense, operating and maintenance expenses are up approximately 3%. Our teams have done a great job managing expenses in a difficult environment.

For the 12 months ending March 31, 2022, operating income, which is mainly from the Roanoke Gas subsidiary, was $14.9 million, a substantial increase of $1.8 million or 14% compared to the prior 12 months ending March 31, 2021.

Our net loss for the 12 months was $20.3 million or $2.42 per share [Technical Difficulty] significant impact of the noncash impairment of our investment in the MVP. Compared to the prior trailing 12 months, we had a decline of approximately $3.5 million of equity in earnings from the MVP.

As shown on Slide 5, to aid in the comparison of our financial performance attributed to operations, we have adjusted our GAAP results for the noncash impairment loss that was recorded during the quarter.

Our underlying net income for the quarter after adjusting for the impairment was $5.1 million and exceeded the prior year quarter net income by $311,000 or 6.5%. For the 12 months ending March 31, 2022, underlying net income of $9.3 million was $1.1 million lower than the prior year, reflecting the reduction in noncash equity earnings of the MVP.

The 12 months ending March 31, 2021, contains 9 months of noncash equity earnings. You may recall that effective January 1, 2021, the MVP joint venture began recording such earnings commensurate with forward construction activities.

If you move to Slide 6, investments made by Roanoke Gas for utility property for the first half of fiscal year 2022 totaled $10,759,000 and was approximately 20% higher than the first half of last fiscal year.

Capital expenditures for main extensions and new customer additions are up $2.5 million from the prior year, driven by the $1.2 million of spending for the Blue Ridge expansion. Saves spending was lower in the first 6 months.

In addition to these investments, we have spent approximately $1.2 million on a onetime gas supply infrastructure project, which we expect to be completed this fall. Our overall capital spending is on plan. If we move to Slide 7. Our second quarter delivered volumes were strong, especially considering the mild winter, which was 4% warmer than 2021.

Delivered volumes of 4.2 million dekatherms were 5.6% higher than the second quarter of 2021, largely due to a 26% increase by the industrial customer class. The same customer that we highlighted in the summer of 2022 began blending natural gas in their fuel mix in late December and increased natural gas consumption throughout the second quarter.

We expect this customer to continue to use comparable volumes of natural gas through the third quarter. On Slide 8, you'll see that our year-to-date volumes are 1% higher than the volumes we delivered for the first 6 months of 2021 in spite of warmer weather.

The decline in deliveries to our residential customers, which are weather related was generally offset by the increase to our industrial customers. Paul will now discuss our customer and service growth as well as the outlook for the remainder of our fiscal year..

Thank you, Jason. We're on Slide 9. We've had a stellar beginning to 2022. Our customer additions are up 29% for the first 6 months when compared to 2021. Our new main miles are on the exact same pace as 2021, which you may recall was a significant increase from historical norms.

We expect the new customer main addition trends to continue through fiscal year-end. Moving to Slide 10. As we look ahead to the second half of fiscal 2022, we expect our capital spending to be approximately $24.5 million. We think there will be a shift in the mix of spending in the second half of this year.

Jason highlighted just a moment ago, our new business and save spending. We think there's going to be a shift -- a small shift, if you will, maybe $1 million from new business to save in the second half of the year. We do expect to spend another $4 million to complete the large natural gas supply infrastructure project.

We've been hinting at this project, as you know, for many quarters now, but we will be publicly announcing that next week, actually on May 17. There will be a press release around that. So stay tuned for that. Moving to Slide 11. We've discussed the financial impact of the MVP investment impairment.

Last week, Equitrans, the MVP operator announced a plan to pursue obtaining the Fish and Wildlife service and the U.S. Force Service permits needed to complete the project by the second half of calendar 2023 next year. They also announced that overall project cash costs are expected to be around $6.6 billion.

We would just like to add to that, that the project is still 94% complete or over 94% complete as has been widely discussed. But we including the other joint venture partners continue to support and work vigorously to see the MVP project completed.

Again, going back to 2015, when we became a member of the joint venture, we've regularly and consistently spoken about the needed supply from Mountain Valley Pipeline. In U.S. natural gas prices, as most of you know, are presently more than double this past winter pricing and more than triple the pricing from 2020 to 2021.

If the Mountain Valley were in service today, this would not be the case. We are really troubled by the fact that area businesses and residential customers have been and will continue to be forced to absorb elevated natural gas costs resulting from the -- really the nonpractical and illegitimate legal challenges to the Mountain Valley Pipeline.

But it's not just the Mountain Valley as you know, many of the other large pipeline infrastructure projects in the United States has faced similar challenges and then forced to stop.

The Roanoke Valley, the Commonwealth of Virginia in the United States need the Mountain Valley pipeline more than ever, allowing the completion of the MVP would relieve domestic supply constraints. That's very, very important.

We could start moving gas from the Marcellus and Utica basins to the Mid-Atlantic, Southeast and even the Northeast of Transco -- Transco pipeline, but it would relieve domestic supply constraints and be the quickest, smartest and simplest action to also assist those in Europe who are suffering due to inadequate access to natural gas.

So again, we urge and continue to work for the Mountain Valley to be completed, and we think concerns citizens should also urge that because it is a very real impact right now to everyone. Moving on to Slide 12. Let's discuss our earnings guidance.

This slide depicts underlying earnings from the 2 segments we've discussed previously, the Roanoke Gas utility and RGC midstream after adjusting for the noncash impairment loss. We expect underlying earnings for fiscal 2022 to be in the range of $0.96 to $1.02 per share.

I would like to mention the $27 million common stock equity placement that we announced in late March. We issued 1,350,000 shares or 16% of our pre-offering shares outstanding. This did not have a material dilutive effect on the March 31 per share results.

However, it will have an effect for the full fiscal year 2022, and we estimate this effect to be approximately $0.10 per share by the time we reach September 30, 2022. I would like to just mention the support of investors from that March offering the InterTech Group, T. Rowe Price, Mr.

Ted Gibson, we greatly appreciate their show of support by making such a significant investment in our company during this time period. We really appreciate them. I would like to also just have a little commentary about the dividend.

You can see we've got the implied dividend payout ratio and again, we use the term implied because it's going against our underlying earnings per share. Our expected quarterly dividend for the remainder of the fiscal year is unchanged at this point.

And you can see the ratio there implies in the 80% range, that's a very comfortable place, we believe, based on our cash earnings and the operations of our company. That concludes our prepared remarks. If you have any questions, Jason and I would be happy to entertain those. [Operator Instructions]. All right. Well, very good.

If there are no questions at this point, this does conclude our second quarter earnings call. Thank you again for joining us, and we look forward to speaking with you again in August to discuss the third quarter. We hope you have a wonderful day and the rest of your week. Thank you so much..

End of Q&A:.