SJI - Earnings call transcript Q4 2018 | South Jersey Industries Inc

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Q4, 2018 South Jersey Industries' Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions how to participate will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. of President Vice Fidell, Investor Relations. Dan may you begin. Sir,

Dan Fidell

Mike welcome Thank earnings quarter fourth as morning, well today conference Executive additional and and senior you. everyone to management by here and joined of and as I SJI's our Officer; webcast. President Chief Good call am Renna, members XXXX our several and full team.

our presentation close website call were also after the of Our and market the available www.sjindustries.com. the earnings issued at accompany on release The release slides that review provide an measure earnings XX-K of and comparable documents. are the GAAP the and the and earnings. associated appear economic basis in-depth economic non-GAAP of our measures on to the both GAAP both using earnings Reconciliations non-GAAP in of yesterday

I'm performance said, Principal be Mike outlook. our to call statements to that materially of performance Officer, who be of a then that happy expectations, on With Mike Actual note segments to future for today's and review SEC. then XX-K balance these our will Financial and our take differ then various file results Hernandez, the the factors may those me and Cielo will SJI's After XX-Q review with we'll current that, our by references individual pleased will discuss as And throughout your guidance. Renna, and plans, the indicated discussed making introduce opportunities in SJI. including earnings CEO, company's result Forms important those we'll from sheet. Let questions. financial

Mike. now over introduction, that me let to with it So turn

Michael Renna

Good Dan. Thanks, everyone. morning,

level changes to take a at address I SJI. want two at moment Before to the we outset management senior start,

successful company Steve is across and in President, career the level retiring distinguished Our and company. shown a over from Clarke himself Executive very leadership effective every effective long Steve at today, the countless ways has Vice

hand miss intellect to Steve wish you for of investment all well brought and same many good Like you Hernandez. our and years and job introduce steady as of know, we you counsel, also leadership On much. then done. non-regulated for in and very CFO Steve's was will the and that and chapter you Steve, our wise to you more behalf recently and President operations. we As our I'd family, Cielo humor the this all begin best over five a CFO, thank exciting you Senior new welcome SJI the we to Vice Liz community, like

expertise make Ceilo activities. brings to impressive we the of drive from to shortly efforts. to on leadership business proven have the at Many like coming strong conferences opportunity only have technical also you'll give meetings our about an will meet performance. as our and operational of route an update to that first, approach some you are exactly transformation not I in team. remarks Cielo business is We integral a But want but track our leader And an business profitability, several transformation months. you excellence and She hear units thrilled join principled record operational to Cielo our and with partnering

less With regulatory track record to be process on excited XXXX. In the in was change approval some acquisitions, I'm and with completed our and pleased history. Elkton of earnings, with integration addition QX, XXXX Full X is closing our than our progress in most the company's in witnessed months. by significant very future. seamless to Elizabethtown to financing certainly and our regard

management contracts to with non-regulated and marketing record October. of by achieved achieved fuel infrastructure we front, our our driven wholesale became With the in proposal operations, SHARP efficiency weather core at infrastructure On multi-year that and programs operational. respect the cold energy replacement an SJG ETG results, and extensions regulatory filed three for BPU additional we

strengthen Regarding executed sheet. to pay marketing assets debt sale business non-core using and and gas our of retail down cash proceeds transformation, balance we our successfully the solar

proceeds simultaneously while early also beyond. opportunities, leveraging XXXX all businesses. series incentive growth transformation Elkton, process absorb, These We launched help better costs were down earnings people, few XXXX. their to strengthen economic months will technology our be have program driving and we issuance the and forward a in repayment the I we debt. equity efforts, align not included with of In plans we very across this into which effectively our business able our successful non-core the of and the to assets, $XXX.X our a balance could first using strategy of cost of for our and our in to employees sheet further from while retirement support year, did internal of sales our ETG Again, all achieving proud and resource record initiatives and of commitment designed million excellence. January

are non-regulated Southern; significant of XXXX,Ww and non-core our our executing regulatory on remaining with earlier, down toward Elkton review effectively achieving focused and As ETG including look integrating businesses savings we effectively business from transition the mentioned acquisitions, completing the initiatives remainder agreement services of strategy. our cost winding the our transformation

All never to forward year for our rate review you our financial expected share the and per look to operational been earnings performance. progress growth With as on. Cielo I of I've X% now more which growth. of goes future long including reviewing with a to XX% term over it foundation turn and base top X% that, economic to tier growth, our provides X% optimistic I'll to

Cielo Hernandez

in SJI months ahead. excited our future with Thank community you, I'm for many to of warm in the that Mike, the to positive welcome. look very investment you meeting I'm join forward and I about too.

the deck earnings, you a As well. both the will earlier, review and have will made GAAP provide earnings the and as encourage release available to slide noted I detailed Dan we with information information regarding you

into of were these of strong Jersey a our performance NHS Group. of combination results non-GAAP dilution economic interest share XXXX reflects management with acquisitions offset the Elkton business. improvement each earnings, For share, and improved segment. the financing XXXX partially that and per of our our we South of of Energy the midstream do, the focus economic insight and $X.XX lower earnings offset Gas as SJI and will fourth in quarter will now and business by with $X.XX cost divestitures. additional at earnings compared The performance share The were guidance measures Group warmer purpose reflects I the as drivers per Elizabethtown economic SJI year at of at normally That Gas by $X.XX per weather. review results believe in Energy impact as Services, at XXXX. on to and related this $X.XX value provide on compared in was share quarterly per XXXX. a March results call due briefly Gas to we discussion acquisition measures share full the

conversions. driven national $X.XX year our by opportunities. Our contributions expect XXXX share we Elizabethtown case, per On AFUDC the SJG growth than average, last growth. period last a the infrastructure annual approval. an the consumer prepared over $X.XX has net of and the over from related were of receipt ETG results years to XX partial in more of up share prior consolidated enhanced improvement gas customer with the year. In that the XXXX. improvement for Midstream future the increase investments per months reflect share represent ETG. The base the to between utilities' now X,XXX per skewed of X.X% per was The customer revenues of X.X% case grade revisions improvement evenly earnings our above well with our and $X.XX months XXXX compared by $X.XX [ph] FERC XX rate share growth. basis replacement with guidance contributed of rate. a compared EZG customers rate driving SJG commercial with added $X.XX rolling on catch of a with split reflects per growth record reflecting three until base profitability which rate last focus of ownership impact The share original in a is the quarters net a and asset

larger Turning $X.XX our last to per extremely tax to strong business that per an largely hot QX reflects with wholesale XXXX a a warm consolidated our portfolio the share weather the $X.XX improved share non-related of the in by of prior including The increase Fuel our portfolio earnings per share optimization driven by contracts. $X.XX reforms. Energy and XXXX share Group federal year from economic QX operations, per weather earnings year. the by result compared $X.XX was compared in impact driven cold of management the

an XXXX sale Management. entity roughly contributed last we Now Sachs versus of Goldman solar the assets by our to and June announced breakeven Energy year. a results slight Services managed Asset improvement In

committed sheet to So to that our a capital spending remains turning balance structure now plan. supports our SJI review, capital

equity non-GAAP capitalization, total was total reflecting guidance ample total our investments and XXXX maintain about to the we liquidity December credit December compared December growth At equity conversion units measure to XXXX, equity at XX.X% Including grade as XX.X% ratings. capitalization a our XX, at to XX.X% While XX, conversion solid convertible our this total financing in communicated was ratio acquisitions mandatory previously this in plans XXXX. XXXX. capitalization our of equity adjusted

late debt more proceeds net our We majority and retail balance for also sale in cash agreement In our million equity of our deployed a repayment majority for debt mentioned solar into from Mike focus $XXX January. settled repayment. of cash continued million. deployed In our the core we strengthen our than those we marketing sale have remain assets activities XXXX. and $XXX of a gas As proceeds have receiving approximately sheet XXXX proceeds January forward of in

turn XX to increase that latest raise rate quarterly Directors I I regular each the this $X.XX an performance. wanted annualized to of my per concludes now of share. years. remind operational voted to Lastly, dividend SJI Board SJI the the With to review last guidance. will November of company now in dividend our That the has Mike, to it of review increased you

Michael Renna

you, as great activity. operations as our for balance review of Thank that our strengthening sheet well Cielo

be economic contribute XXXX to to of Turning to of million share. to per $XXX we XX% our with earnings interest Consistent strategy, diluted economic XX% $X.XX operations excluding expected guidance, range or in $XX are acquisition-related $X.XX the earnings, to costs. regulated in to our expect

and costs the and with XXXX intend we agreement to non-regulated with reflects we of our divestitures to by non-core regulatory associated I our and and have is acquisitions Southern, ETG our with health strategy. point that of think out which operational our associated XXXX. early and associated implementation businesses with timing services execution important exit and transition the Financing guidance requirements it the

the the per expense transition $X.XX per spoke of, additional just guidance I items additional reflects $X.XX related of For and XXXX interest acquisition cost to including the that an transition in year costs. share clarity financing services several share

with expected from more items, million our in additional In do growth note is with following issuances in we conservative which it approximately performance reduced be $X.XX regulated related addition, year repeatable. along and initiative very share in included anticipate equity partially XXXX. not transition than from weather important cold to our was expectations that in are draw that resulting in is $XXX not supporting to the expenditures to any Capital per XX% year, XXXX and BT that of It experience these utility equity O&M more forward offsetting our our February, are wholesale. operations businesses and projects January considered XXXX,

investment; long expected our approximately lower SJG XXXX exit be and transformation replacement and to transition regulated recovery legacy again, accelerated utility stated of we portfolio utility expect expenditures are strategy and of $XXX growth results in of operations and agreement; are however, rate. of benefit the execution and our term Capital above reshaping operating rebound both our including XXXX costs from infrastructure at to by both expiration X% our earnings to Looking contracts activities. X% XXXX XXXX, earnings than million services including ETG; regulatory growth to significantly significantly projects. with the more driven base supporting of expected wholesale marketing customer XXXX XX% business to

issuance equity support of utility previously $XXX our million communicated, to redundancy projects. As a an anticipate we planned

anticipate our execute BL is reflects regulatory There the critical very however, to to on want will the very update and are to X. to impacts. assumes to forward and QX assure We further transformation completing filing of to England. late soon started on actions guidance providing open we months. encouraged made business release over Rockland our natural great this our project with months, project it bring and earnings But with the before you by in England, land With with The additional XXXX we decision BL May and confident we As I want current respect With provide And the completed to we are remaining takeaways. gas up questions application we've always the strides in NJDEP region. PennEast, coming timeline you those Capital as conjunction by however, at important potential surveys guidance construction look to initiatives coming two XXXX. PennEast assure project I recent clean a I an regard affordable remain exit project. by that disappointed delays want you to for in our this important

this to natural effective a the gas a was with for environmentally PJM BL point. First, England bad region known constraint announcement is repowering solution prudent as cost and

secondary explore impact will a who resiliency of to XXX,XXX and May natural provide us customers create plan, water alternatives for to Atlantic to hot in our their importantly, gas we've and begun needed reliability Second, and expected families. not the on more their for meals hot County already count heat for growth that and as supply allow this to Cape is homes,

We most in clarify, with likely alternatives expect of the details first at our the as end quarter. quarter is these first guidance additional to share our

I conclude working by They these these have diligently day force as I to our now want work side outstanding foundation plan. thank humbled to for exceptional side out. As day. remain laying And feel been behind driving for I efforts always results. my their with our am the and professionals X,XXX fortunate in execute for many the day our dedicated and employees remarks, work every months by us on to

Dan Fidell

Thank Mike. for remarks concludes the that we're to questions. line Operator, you prepared our now ready open

Operator

question Understand. [Operator from Instructions] with Chris Ellinghaus Capital. comes first Williams Our

Your line is now open.

Chris Ellinghaus

Hey morning. everybody. Good

Michael Renna

Chris. Hi

Dan Fidell

morning Good Chris.

Chris Ellinghaus

of and the the going was you the you related elaborate to year-over-yearchange, that buddy. segment, in Steve, Welcome much Elizabethtown of interest I'm miss corporate Can sort to Cielo how expense?

Michael Renna

'XX 'XX? For to XXXX to or 'XX

Chris Ellinghaus

that $XX year-over-year. in How of delta much XXXX category, that's the The interest expense? other million-ish change

Michael Renna

Standby, we're for Chris, getting it you.

Chris Ellinghaus

your tax can also in expected effective on rate? guidance, XXXX the to And you elaborate income

Michael Renna

Income tax rate for XXXX?

Dan Fidell

rate about, Yeah asking is that tax Chris? the effective XXXX, you're for what

Chris Ellinghaus

Yeah.

Dan Fidell

be Yeah, XX%. I mean, around XX%, right it'll the

Chris Ellinghaus

Okay, did cancellation? you guys the find England BL about When out great.

Michael Renna

the started last We XX last about rumblings to hear the and within to it four. seven within it probably confirmed days

Chris Ellinghaus

are transition sooner? still services still you agreement hoping completing I about, complete know are by And early - XXXX, to you talked that the you

Michael Renna

year to and the final really the completed have XXXX, stretch systems. XXXX is end. early into going We'll just majority early of of by very What's it kind the of cut over

Chris Ellinghaus

final phase? verification The and type testing

Michael Renna

We'll do Yeah, in January right. XXXX. that's of exactly that

Chris Ellinghaus

Okay. equity And is guidance XXXX, anticipated the specifically? that for your go lastly, LNG how to into much of the elaborate project you in can

Ann Anthony

it's Chris. Ann.

utilities. supporting as see on investments would again, based it towards of be going at well as, what think LNG we I the today, product project, that other bulk capital the down

Chris Ellinghaus

Sure.

Okay. Thank you very much.

Cielo Hernandez

question, Hey it's of your Chris. first back - I to about cost. million have going $XX

Chris Ellinghaus

That's after tax?

Michael Renna

correct. Yeah,

Cielo Hernandez

Yeah, correct. is that

Chris Ellinghaus

Okay. excellent. That's

much. very you thank Okay,

Michael Renna

Thanks Chris.

Operator

Dennis Coleman comes next question Thank with you. from Bank Instructions] Our [Operator of America.

open. now is line Your

Dennis Coleman

and If what little back morning, can good your let my retirement, England just the circle BL same in me the be, I in about they could And or Cielo luck Yes. bit scale welcome are situation, add to Steve. terms also alternatives investment? talk of you Good a everyone. might to

Michael Renna

of are they they'll be But exactly We're still but are redundancy providing able know important to customers of scale. adequate I that be we significant investment we redundancy about, that off of the region. they be mean, deem one do things will again, yeah, be single XX% a to to line. our require provide that that same going XX% most to - refining plans be served you're us I is of don't the that to right now for guess significant. they'll And being talking the to I our to line

of will England, a team Dave but So will and of BL package probably support will what redundancy for similar on able on equity final for LNG on $XXX significant Robbins a redundancy to it be as side right to plan provide working redundancy. investment the to part now be that package. we're be path us we'll the a doing point to entire alternative consider that and million that is It capital as Ann's

Dennis Coleman

Okay.

smaller like an maybe a something or line, something it's it's, is alternative. I like guess diameter So that,

Michael Renna

pipe And protected. going my It's Yeah, looping customers testing terms really be be the redundancy that sure But in that you're scale not XX would involve be right mean all I diameter. of of be it be to what not skills engineering will it existing inch are Yeah, issue. would now. a XXX,XXX planned like - into will line. feeds make it no, smaller address But to it's it some area. would -

Dennis Coleman

Okay, case ETG any filing. and rate color then on the

think I guess happen, will and is XXXX there's that - - I when

Steven Cocchi

Yeah. Dennis this is Steve Cocchi.

we this Gas I that and aware for point, than that timing requirements at ETG you're in earlier anticipating both we're filing significantly we're rate At Elizabethtown. required cases of point, looking this in regulatory the for of So probably At think Jersey XXXX. making something by have at South terms QX.

the to when filing. that determined obviously conversations have We've as regulators date be So we're exact for ready with around that got well. our will

in see you we're So but stay this At tuned thinking should something. point QX.

Dennis Coleman

full can And of that. be that XXXX the We'll us, we the bit is that about just information detailed the comments XXX of you in the for one forward that delays year. might so where little you East, just from potential. Penn delta bit break out your sort if spend know given this up a a forward How much capital few budget, little more maybe But gave look guidance, Great. look will on months. I then to to the guess a more we

Michael Renna

Yeah.

top was. a relatively what me And to I'm East the my if the So that is head smaller fall Penn can to It wasn't think trying a wouldn't big changed. is say have of relatively Penn number. hear East XXXX. in Dennis I'd it XXXX. is number you off going majority into it - a

Dennis Coleman

it impact But was XXX? delayed, if would XXXX, the

Michael Renna

sure. delay plan Yeah, XXXX, our for right obviously But in 'XX, now 'XX have the purposes, million think beyond $XX we I for

Dennis Coleman

me. you That's all it We'll see for Okay. next week.

Michael Renna

right.. All

Operator

Thank you. And question next Walker our Investment MFS Scott with comes with Management.

is line open. now Your

Scott Walker

for the each clarify wondering not into baked embedded you specificity question. at and directionally, of kind if maybe returns taking but thanks could the are utility guidance. that Hi, XXXX with I'm

Steven Cocchi

issue expect earn think which issues deal rate until Elizabethtown. Look, really what start and looking we've right just we of this cases number case Gas authorized And there's Scott, to the standard that that this lag discussed, filing to recover and as have And is made. Elizabethtown. Jersey in can expenditures timing some We've is we rate Cocchi on companies regulatory At South said that significant to with South is to the a at Jersey we on in regulatory of and capital capital got across always I there's Jersey return for I we're world at both we rate both now. this a investments on cases clearly coming again. be going right get Steve obviously XXXX, all the that's base point, significant New at a come in think case. out Gas rate our lag equity, now to more with. utility But on X.X% we've

Scott Walker

to XXXX, pro so in and what saying get to mid-nines underscore capital kind trying that think trying some number the earn get were market and year plan? to with of is, in clearly if size confidence you uncomfortable your is the Right some market are I'm that I'm people rebound to today way forma on at at I to

Steven Cocchi

a expect expenditures can with if pages think probably place in that base infrastructure of on activities into rate capital deck take regard the XXXX. of expect cases regulatory calculate include a rate the the those what we would I bit see we returns at included and timing planned of of roll well cases. down as the we on and we've that be in to have our that South in we've And annual to little got hopefully to proposed you would of at of to earning type some rate expect kind look our programs base those return our out top Jersey coming you in that gas as investments base infrastructure

in a look out you got return, similar and you've New have our you figure be. can that kind across of combination Jersey cases similar you prior at to things others if expenditures where the we of So capital would what seen

Scott Walker

think that and - lot in clarify of Okay, but XXXX? it, I headwind agreement $X.XX was I'm there's if did sorry going Southern I today transition on the you about missed

Michael Renna

is, It yes.

Scott Walker

go by offset that some away And but how for or addition that we of will should think 'XX? cost about

Michael Renna

BT There and of take drive but go It away. further some initiatives down addition that be organization. smaller albeit will root yes as there'll then overheads be the throughout but some, will is cost cost offset and we the

total in So reduction overall in significant a expecting we're cost.

Scott Walker

Yeah. Thank you.

Operator

I'm And questions further back call for Instructions] over [Operator showing in you time. to I'd no closing Thank the the turn this remarks. to any like at Dan queue Fidell

Dan Fidell

everyone this morning. us Thank for you joining

this of to recording website. a reminder a be available on our call is As going

always As for Dan myself, feel to questions, Jacobson free and either Eric analyst Marissa inquiries. Travaline investor media or for contact or Fidell please

found This and joining concludes day. investment our for earnings Our your on interest continued and in a Again contact materials. good thanks be may for SJI. call. us our earnings today presentation release information Have and

Operator

today's Ladies does your participation and program you may conclude conference. in great Everyone all a thank your have you disconnect. This gentlemen and for day.

South Jersey Industries (SJIIU) 28 Feb 192018 Q4 Earnings call transcript