South Jersey Industries, Inc. (NYSE:SJI) Q2 2018 Earnings Conference Call Transcript

Aug 09, 2018 • 11:00 am ET

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South Jersey Industries, Inc. (NYSE:SJI) Q2 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Second Quarter 2018 South Jersey Industries Conference Call.

(Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Dan Fidell, VP of IR. You may begin.

Executive
Dan Fidell

Thank you. Good morning, and welcome to SJI's second quarter 2018 earnings conference call and Webcast. I'm joined here today by Mike Renna, our President and CEO; Steve Clark, our EVP and CFO; as well as several additional members of our senior management team.

Our earnings release and the presentation slides intended to accompany the call were issued yesterday after close of the market are also available on our website at www.sjindustries.com. The release and the associated 10-Q provide an in-depth review of earnings on both a GAAP and non-GAAP basis using our non-GAAP measure of economic earnings. Reconciliations of economic earnings to the comparable GAAP measures appear in both documents.

(Forward-Looking Cautionary Statements)

With that said, I'm pleased to introduce our CEO, Mike Renna, who will discuss our current earnings performance and ongoing business transformation efforts. Our CFO, Steve Clark, will then review our financials and outlook. After some closing remarks, we'll then be happy to take your questions.

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

Executive
Mike Renna

Thanks, Dan, and thank you all for joining us this morning. I'm pleased to report solid second quarter and year-to-date results for our Company. Second quarter saw an improvement in earnings per share, driven largely by stronger results from Energy Services and Midstream. Improved performance from both our regulated and non-regulated businesses drove economic earnings of $1.29 per share, up significantly as compared with $0.78 per share last year. In fact, through the first six months of 2018, earnings have exceeded full year results for 2017.

On the regulated side, year-to-date improvement in our gas utility business, South Jersey Gas, reflects the positive impacts of a recent base rate case, solid customer growth and continued infrastructure investment intended to enhance and improve service and reliability to our customers. On the non-regulated side, our wholesale marketing and fuel management businesses posted strong gains as well, capitalizing on favorable weather, tax reform and an additional fuel management contract.

Before I turn it over to Steve to discuss our second quarter and year-to-date earnings performance in more detail, I want to share with you an update on our business transformation efforts. Back in 2015, we began a planned shift toward a more regulated business mix. And over the past three-plus years, we've done much to advance that strategy.

In particular, our second quarter was marked by several historic milestones, including the financing and closing of the Elizabethtown Gas and Elkton Gas acquisitions as well as the announcement of the sale of our portfolio of solar assets. Both of these events served to reinforce our commitment to high-quality regulated earnings growth. We are excited to welcome ETG and Elkton into the SJI family, and we're especially