Good morning, and welcome to SJI's First Quarter Earnings Call and Presentation at the AGA Financial Forum. We are webcasting today so we'll stick on script.

With me today are several of our senior officers, as well as our key representatives from the Investor Relations area, so ready to answer your questions during the meeting but also at its conclusion. Of course, as you would expect, we have a slide with the Safe Harbor language.

Please take a look at it. We always show this prior to any financial reporting.

But of note is we will talk about some future events and they're certainly not guarantees of how things are going to turn out but for any information you want to consult us, we just recently filed our 10-Q on Friday, so certainly all details will be there. Now I'd like to start the representation where we always do and talk about our goals.

And Slide 3 really highlights that they have not changed over the last 10 years. We continue to target growing our earnings-per-share by at least 67% a year.

We continue to have our Board of Directors with a policy to grow its dividend by at least 6% to 7%. We're very, very conscious of risk and as we talk about some of our nonregulated businesses you'll see that reflected in how we approach trying to have our risk levels be similar to utility-type risks.

And finally, for those who have an opportunity to see our press release on Friday, we gave guidance for 2013 to grow earnings by 4% to 8%. This, I think is interesting to most people.

Slide 4 demonstrates really our board's commitment to growing our dividend. In addition, it highlights the strength of our earnings performance over the last number -- several years really, as compared to our peers that -- which certainly gives us the opportunity to continue to grow our dividend at a nice pace.

In fact, if you look at in terms of growth, we've grown our dividend by an average of 10% a year over the last several years. And I think as far as our board is concerned, every November at the November board meeting is when they determine how much to increase the dividend by, given their policy.

So we'll expect that to happen again at this year's board meeting in November. This is my self-serving slide of how we performed.

Slide 5 highlights -- in terms of our historical earnings growth over the last 10 years, we've averaged 9.6%, which I think stands reasonably tall in our industry. And I think our future hopefully will bode even better.

And again, I guess, also for those that may be new to South Jersey Industries, our total shareholder return over the last 10 years, Slide 6 highlights that, and as you can see a combination of growing our dividend by double-digits as well as earnings reflects itself in a nice return on -- for shareholders. Over the last 10 years we've actually averaged the return -- total shareholder return of about 15% a year, and I guess it just shows, and someone that invested in our stock 10 years ago would be almost up 400% compared to our peers, and the index is, I think, it's at least double if not more.

But I think what's most important, certainly that's great, but if you're a new shareholder, that won't do a lot for you. So what I think is most important is the next 10 years, and I can tell you we feel -- we're optimistic about what we have in terms of opportunities in front of us than what we have actually experienced over the last 10 years.

I think it's important to at least highlight where our earnings came from in 2012, but also give you some indication of where we think the contributions will come in the future. And Slide 7 highlights Economic Earnings contributions in 2012, and as you can see, we have contributions from all areas of our business but most significantly in South Jersey Gas, our utility, contributed 62% of South Jersey Industries' earnings.

I think, importantly, as you -- as we discuss some of the future direction of the company, expect the SJI pie to get much bigger, but I also expect that South Jersey Gas become an even larger percentage, probably moving more towards the higher end of the 60s, towards 70%, contribution on what we think will be a much larger pie. Just a touch on performance of the past before we start to speak a little bit about what's coming next.

This slide highlights performance between 2012 as compared to 2011. And as you all are well aware of, that or familiar with us, we've actually grew our earnings by 7% over -- year-over-year, and our earnings-per-share by 5%.

One of the key differences in that growth is we did issue shares last year. We, in fact, raised $70 million of equity through our dividend reinvestment plan.

And this is important, we still are committed to having a strong balance sheet, and as we talk about our opportunities to invest capital, we certainly want to make sure that we don't weaken our balance sheet in the process. I can say that as of this point, we have used the Dividend Reinvestment Plan and it had a 2% discount.

I guess, as we saw how much interest we were receiving in our plan, we've actually eliminated the 2% discount right now to slow the pace of equity coming in. We certainly want to keep the plan in place, but we really don't need to raise the equity quite as quickly as it was coming in during the last, really, 1.25 years, I would say.

In terms of the first quarter, as I said, our press release went out on Friday and Slide 9 highlights, for the first quarter, our earnings were running slightly behind last year. But we had a couple things that impacted us year-over-year differently that we're very confident will offset themselves in the latter part of this year.

And in fact, that's why we have guidance of growing 4% to 8%. Some things are more mechanical than anything, and I'll cite an example, our investment tracker for South Jersey Gas is really designed to add to earnings as we invest in infrastructure but it adds immediately but on a straight-line basis, as we roll that into our rates, that then becomes a biometric earnings.

So in this -- in case, year-over-year we would start to, had we rolled it in, in advance of the year, had a much stronger first quarter because of winter season and higher volumes. Instead, we realized that benefit in a much lesser level at -- on a straight-line basis.

What -- so what we expect is that as you look at the next couple of quarters, we will actually have higher earnings than we would have expected but end up at the same place that actually is a shift of earnings of $1.5 million almost between the first quarter and the second and third quarters, and then beyond that, what we expect to be on the volumetric basis, going forward. So that's citing an example.

A couple other things that affected the comparison is some activities on our nonregulated side in terms of using spot gas to serve the market last year for its storage. And it actually created later in the year, although a big profit beginning later in the year, some partial offset in terms of hedge losses.

We don't expect that to repeat this year so, therefore, the first quarter looked better last year. But I think the balance of the year looks much better as we run our business this year.

The other thing that did affect the comparison, I alluded to it a little bit earlier, is we did raise $70 million of equity last year. That caused about a $0.07 dilution impact in our earnings, so that's in place and I guess that's part of what caused the differential between years.

As in -- and again, we've seen that it's so easy for us to raise equity through that vehicle that we've eliminated the discount just to slow that pace. Slide 10 is designed really to talk about why we think we can grow earnings by 4% to 8% this year.

And I -- certainly, it always begins with what the utility has as opportunities. And there's a couple key items on this slide.

One is, is that customer growth that's already taken place last year will get a full year's value of it this year, in addition to our growth rate that's actually increasing this year. We continue to have conversions ahead of our last year's level and far in advance of previous years.

So that alone we expect year-over-year to add incrementally $1.8 million to $2 million of net income. The other big driver is that investment recovery mechanism I talked about in utility.

If you recall, we go -- we are able to replace cast iron and bare steel in our system and earn on that investment immediately. The annualized benefit for 2013 versus 2012 equates to about a $2.5 million incremental net income, so -- largely, which we have not realized in the first quarter.

So combined, the utility, alone, we expect from these 2 mechanisms to have improvements over last year by $4.5 million of net income. And likewise, as I referred to the non-utility side, we expect a number of other activities in the nonutility to produce growth in the second part of the year.

So overall, we feel extremely confident about our growth target of 4% to 8%. If I can, in Slide 11, I'd like to shift the discussion and start to talk about what do we think the next decade has in store for South Jersey Industries, and as you might guess from the slide, we're pretty optimistic.

And what we've done is looked at starting with the next few years, we've really put up a solid plan in place that we think helps growth, particularly in the next few years but and beyond. And highlighted, that is something that's not normal in our space.

We expect to be able to grow South Jersey Gas or Utility by 8% to 12%. In a minute I'll discuss where we feel that optimism, what's driving it.

Likewise, on the nonregulated side, some of the project businesses that we're putting in place, adding this year and have in the queue, really make us confident that we think we can grow the nonregulated side of our business from 4% to 8%. So the combination of those 2 things give us a lot of support for the expectation that we can continue to hit our target, on average, of growing earnings-per-share by at least 6% to 7%.

I intend, I guess, at this point, to start to give you a little bit of detail behind why we think we can achieve those growth rates. So I'll start with South Jersey Gas, and this first slide highlights what we see are the 3 main drivers for South Jersey Gas.

Certainly, customer growth and it highlights we think we can grow the margin, on average, from $2 million to $3.5 million a year, so accumulatively, by 2015, that will be a higher earnings level of $6 million to $8 million. Secondarily, the infrastructure tracker that's already in place and continuing through the period really contributes in the ballpark of $1.5 million to $2 million.

So again, we see that is something -- it's just a matter of operations and adding $4.5 million to $6 million. And finally, something that we've touched on in the past, and it's starting to get closer to a time where it really impact our finances, is a rate case.

And we have an expectation that a rate case could contribute somewhere between $8 million and $11.5 million as it's implemented. So as you look at that detail, we feel incredibly confident in our ability to grow at a much higher pace, and what's important about the rate case is it's really based upon the growth in rate base, and I'll talk about that in a minute.

First, let me start to provide a little bit more support for why can we continue growing customers at a pace that, to the best of our knowledge, is at least doubling the national average. And in a period of time where we had a rough economy, with housing has been slow for several years in terms of new construction, we've been fortunate enough to see conversions more than offset what we were losing from the new construction side.

And if you just start to look on this slide, under 2012, we converted 5,200 or almost 5,300 customers. We also did realize some new construction growth of close to 2,200.

The results from that produced about a net customer add of about 6,000 customers, and with everyone there are some lost customers in terms of houses being torn down or changes in ownership that there's always some level of loss. So based on a net 6,000 new customers, we produced $1.8 million of incremental margin.

As we look forward from '13 to '15, we're already actively working on conversions and we're seeing really quite a bit of interest and certainly the economics are supporting that, so growing at a pace of 5,500 to 6,500, we feel incredibly confident in. That gets largely driven, quite frankly, by the queue of opportunity we have.

Within South Jersey, this is about 150,000 households that heat with something other than natural gas. And of that 150,000, 50,000 actually lie on or near our mains, which are much easier to convert and easily inexpensive and easy to connect.

We also are fortunate with what happened in terms of technology in adding natural gas and its pricing. We enjoyed probably a savings versus, certainly, propane oil and even more so electricity, of at least 70%.

So it's the payback in installing natural gas equipment in your house has never been better. We're finding people actually, quite frankly, as we run our main to reach new areas of our -- of South Jersey, we have mayors coming to us asking, "Would you come speak to our -- at a town hall meeting?

Would you come start to provide service to our town? We've never had natural gas."

And certainly, that's true in parts of Cape May County, as an example. The other added thing that's helped us in terms of reaching customers is the improvements we've made to our system through the programs that we've been -- that actually have been in place since 2009 to either enhance our system or replace aging infrastructure.

And an ironic twist is that about 5 years ago, we had less than 40,000 perspective conversion customers on our main. It's actually 50,000 and increasing because the reach of our system continues to grow.

So a very good place to be, very confident, in fact, I think that we need to challenge our salespeople in the gas company a little harder to grow that even a little bit more. I think, in terms of new construction, I think we're being conservative, we're stepping off of 2012, we're not, right now, expecting an enormous growth in new construction but we're seeing signs with requests for gas service that developers are starting to develop projects a little bit more.

So you can see the range we expect to grow, somewhere between 2,000 and 3,500, in terms of new construction. So the result really gives us a great deal of confidence to support adding to our net income in the range of 2 million to 3.5 million a year over the 3-year period.

Shifting over to a slide that at least explains in -- for those that haven't seen it before. We love acronyms in our industry and this is yet another one, AIRP is our infrastructure program where we get to earn on it immediately.

This just highlights how profitable the program in place is today. And in fact, in February of this year, the Board of Public Utilities approved an extension for 4 years, where we can spend $35.3 million annually, or a total of $141 million plus, and earn on that immediately, and you can see the annual benefit of doing that.

And that's a basic formula of how the program's in place. I think, also pretty reasonable to expect continuation of that program beyond the 4 years.

In fact, we have 1,081 miles of cast iron or bare steel remaining in our system to be replaced. So I expect, well beyond this period, we'll continue to ratably move through that inventory, so that's just -- it's functioning as an annuity for us in effect.

The next slide really highlights how do we expect the rate case to have the potential I highlighted. And quite frankly, on Slide 16, it shows the range of investments we expect to add to rate base since our last case, through the ending of what we project to be a completion of a future case.

And we've been very diligent in enhancing our infrastructure outside of the normal -- or inclusive of the normal process, but we've also focused on our technology. Certainly, at this point we've implemented a significant system in terms of dispatching work but also tracking our infrastructure and keeping a great inventory of all history of our systems.

Obviously, that's come under great scrutiny with some of the unfortunate events around the country. We also are enhancing our Customer Information System as well.

So the timing of these IT projects fit well in a test year for rate case. But over and above that, some investment that makes this even more attractive is if you have heard recently, I guess we announced it last Monday, that our contract to serve B.L.

England, a generating plant that had been predominantly coal- and oil-fired that is now going to convert to natural gas. I believe it's about 450 megawatts, and we've now completed the contract there, executed the contract with B.L.

England and the Board of Public Utilities has approved that contract. How that relates to the rate case?

Or a potential rate case? Of that -- it will actually be a $90-million investment.

I guess it's about 15 miles of 24-inch pipe substantial project. Of that $90 million, $35 million will be dedicated specifically to B.L.

England to serve it and $55 million will actually loop our system, reinforce it, but also enable us to reach B.L. England.

The $55 million part of that investment would fit right in the test year for a rate case. Now we have not offered any specific data when we're going to file a case, but what we have repeatedly said is the latter part of the year would be an ideal time, would enable us if we can complete a case, our last case was 9 months.

If we complete a case within 9 to 12 months, it could yield some benefit for 2014 and 2015 but it also can include the completion of the project for B.L. England.

So I think that's a real attractive timing, but as I said, we still are studying it and haven't put out something formally that we've done. And we thought it might be a good idea to present that to the regulators first before we actually announce what we're doing.

In terms of electric generation opportunities, and this is servicing them. This is a slide that highlights the contract I just referred to at B.L.

England. And our expectation is, as I said, that, that should go probably into 2015, as far as completing our work, but we would expect them to start using test gas in 2015 and actually go commercial in 2016, so we think that's a great project.

Also to note is that there are other opportunities in South Jersey to convert plants like that as well. This slide, I think, I want to highlight the top item, which is really something that's developing and it's relatively new, is the hardening of assets.

Unfortunately, New Jersey experienced the brunt of Sandy in the fall. We were incredibly fortunate in the southern part because the eye of the storm went directly over us, but what -- it did raise attention to, and the governor's office is very focused on this, is what can we do to harden critical facilities in New Jersey?

Whether they be hospitals, state facilities or other essential facilities, so that if they lose power, they continue to operate. And the proposal that is being worked on by the BPU and a potential regulation would be to encourage CHP development at these facilities on site, and actually have the gas utilities do a combination of things: provide a grant, up to 30% of the investment in the form of a grant; and secondarily, provide a no-interest loan to the developer to likewise support.

So in total, these gas utility provide 50% of the investment and earn on it like an investment in rate base and then develop those projects. In terms of savings, part of the savings that the facility receives or benefits from, would go towards paying down the loan.

And so, as from the natural -- the utility side, that would turn into us earning on that unamortized balance. It's really attractive for us to encourage natural gas, and fortunate for us, we also have a business that develops these projects and they could benefit by winning some of those on the other side.

I do -- I'll quickly go through, I alluded to AIRP, and we expect that to continue. I did mention that there are some other facilities that could be converted, like B.L.

England, to natural gas and not a big contributor currently but we continue to build fueling stations for CNG, our second one will go online in June. And we, over the longer term, will convert our entire fleet as well as we're seeing a lot of other fleets show interest.

So CNG is a future opportunity for us. Let me quickly shift over to the nonregulated businesses and highlight what we think supports their growth rate of 4% to 8% over the next 3 years.

And I'll go through them in detail in a moment, but certainly the top of the list is our investments in CHP-type projects, and none of this reflects the impact that hardening might have on this, that's a new development. The other thing I'll highlight on this list is because we see such potential elsewhere, we'll start to reduce our investment in Solar, so we'll realize less solar ITC over the, really, the '14 and '15 time period and beyond.

I think what we're looking at is certainly, with Marcellus gas being so affordable, we're seeing quite a bit of CHP opportunity, and so I really think we feel confident supporting this growth rate. Let me touch on some of the projects we have in place and also some of the things we think are coming in the future.

Slide 21 reflects the committed retail projects that are already in development and are going to come online in 2013. The larger of the projects, SMU, is the thermal facility, and CHP facility for that matter, that will serve Montclair State University.

Likewise, Hartford Hospital connected to that purchase we made last year will install fuel cell. Both of these will come online and contribute to earnings this year.

We also highlight 7 solar projects that are committed and being worked on, and there's a few more coming along in the queue as well. So we expect year-over-year solar to reduce as we focus and we've get better places to deploy our money, quite frankly.

When I look at CHP, for those not as familiar, this is an outline of how we structure those deals. And Slide 22 will show that: one, we're very adverse to risk, so all of our cost, including commodity or pass-through, but the returns are more attractive; we'll invest about $20 million to $30 million of equity; we'll project finance these; and we expect returns in the 15% to 20% range obviously, better than utility returns and that will ramp up over the life of these projects as we pay down debt, so that it'd be a little bit below on the front end and obviously, much higher on the back end.

We expect to be able to deliver 1 to 2 of these Montclair State-type projects a year, and that supports really the growth in this area. And again, we're now already starting to talk to customers and assessing what hardening regulation may mean to us.

Another area I think -- although we're going to reduce our investment in renewables, we're very focused on making sure that those projects that are in place perform as we've intended. And I guess, the first expectation is we'll certainly reduce the investment in solar and so realize less ITC, but I think some of the activities happening around solar and landfill generation projects will improve.

We expect the SREC's values to continue to increase. The legislation that was passed in 2012 goes into effect in June of 2013.

And what that does, it increases the requirement that electric utilities have to buy in terms of SRECs. So we would expect to see the value of SRECs continue to go up into June and beyond, as a designed shortage of supply happens.

Starting in June of 2013, the penalty rate if they don't buy SRECs, the electric utility, is about $340. So they're currently trading about $130, we see that moving in that direction.

I guess, of note, the projects we currently add, the cost is driving down significantly. So the breakeven for us, even on the SREC part, is down in the $140 to $150 range in -- most recently and as high as maybe $180.

So we're already near breakeven at the underperforming market we only expect that to improve. In terms of the landfills, we experienced a couple operational issues in the first quarter.

One would be related to fuel supply, which we've solved, and the other is maintenance agreement. So those corrections have been put in place so we expect them to perform better in the balance of the year.

Marcellus marketing is where we actually have under long-term contract to market gas for producers. And we see -- at this point, we have terms of contracts from 3 to 10 years.

We see this continuing to grow volume and margin. And one of the things we are doing to enhance that profitability is restructuring agreements for underlying pipeline capacity and storage facilities, so we see our cost driving down and we also see the volume that we're working on delivering for producers increasing.

This is an area I alluded to earlier in terms of a benefit to South Jersey Gas, but as important, it stands for the nonregulated side, is being a fuel manager for merchant generators. We already do that and have had it in place for a number of years for New Era in Pennsylvania.

By -- we expect to add a number of these by 2015. We already announced LS Power in New Jersey and that comes online in 2014.

And we're in -- B.L. England also is a great candidate for us to be a fuel manager of -- in South Jersey, and we're in negotiations with about 7 other developers to be their fuel managers in the region.

The next slide, I will just highlight quickly, the structure of those contracts. And why I emphasize this is it's really more like an annuity income stream than you're accustomed to in the wholesale side.

A good part of our profit comes in the form of reservation fees, and we also get paid a profit through the -- on the throughput to the plant. Importantly, though, we don't take commodity risks for index-based deals.

So we see our ability to add these over the next several years just to be strong. I'll quickly move through retail commodity.

We continue to build our portfolio in this area, and I think our optimism on growth here is not only by the amount of customers we serve but also some of the margin improvements. And it's a great home for our producer's gas.

And so finally, the summary on -- it's not unlike I spoke to with gas company, the hardening legislation offers a great opportunity for the non-regs as well, as with the fuel manager services that I alluded to. Shale, we still have -- own quite a bit of mineral rights in Pennsylvania.

I don't think that's going to really generate a lot of income over the next 3 years, but in the longer term I think that has a nice opportunity to contribute. I do want to just double back quickly, one of the hardening opportunities I didn't mention in the gas utility side is also how can gas utilities harden their assets in the Barrel Islands in New Jersey.

Many of the areas that get damaged are low-pressure main cast-iron, and we could replace that in a more expeditious fashion. The BPU in New Jersey wants us to submit something to them by September.

So we see this as a potential to be a AIRP or infrastructure-type program on top of what we have in place. Finally, just repeating what we think we can accomplish over the next 3 years, and I guess as I've mentioned, we also see quite a bit of opportunity beyond the next 3 years.

So with that, I'll open it up to questions. Ed?