South Jersey Industries, Inc. (NYSE:SJI) Q2 2015 Earnings Conference Call - Final Transcript
Aug 07, 2015 • 11:00 am ET
Good day ladies and gentlemen, and welcome to the Q2 2015 South Jersey Industries earnings conference call. My name is Greta, and I'll be your operator for today. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator instructions)
I would now like to turn the conference over to your host for today, Ann Anthony, Treasurer. Please proceed.
Thank you. Good morning and welcome to the conference call for SJI's second quarter fiscal 2015 results. I am Ann Anthony, Treasurer for South Jersey Industries, and I am joined today by members of our senior management team, including Mike Renna, President and CEO of SJI; Steve Clark, our CFO; Jeff DuBois, President of South Jersey Gas; and Marissa Travaline, our Director overseeing Investor Relations.
As you may know, we issued a news release this morning announcing the results we will be discussing on the call today. That release includes an in-depth review of earnings on both a GAAP and non-GAAP basis using our non-GAAP measure of economic earnings.
This measure eliminates all unrealized gains and losses on commodity and on the ineffective portion of interest rate derivative transactions. It also adjusts for realized gains and losses attributed to hedges on inventory transactions, and for the impact of transactions or contractual arrangements where the true economic impact will be realized in a future period. The news release is currently available on our website at www.sjindustries.com. in the Newsroom section.
(Forward-Looking Cautionary Statements)
Also note that our 2014 numbers have been adjusted to reflect the impact of the stock split that occurred on May 8.
With that said, I'd like to turn the call over to our CFO, Steve Clark, to detail our year-to-date and second quarter 2015 results.
Stephen H. Clark
Thank you, Ann, and good morning to everyone on the call and thanks for joining us. As we stated in the release, earnings were impacted by a breakdown of our investment in costs associated with the central energy facility that had previously served a former rental property in Atlantic City. We discussed on previous calls Revel's bankruptcy and closing in mid-2014 and the long drawn-out sale process that was completed in April of this year.
Since our central energy facility was a logical source of power for the Revel property, we anticipated that our contract to provide heating, cooling and power to the facility would be renegotiated to some reduced level with the new owner. Unfortunately, the new owner has shown little to no interest in reopening Revel or striking a deal for energy services.
While we remain ready to provide service to Revel, a lack of any recent and meaningful progress toward a new deal warranted the write-down we took in the second quarter. This write-down reflects our investment in central energy facility of Revel. It does not include the value of our cogeneration equipment located within the facility, as we expect to be able to re-purpose that equipment to serve our customers.
Now let's review results.