South Jersey Industries, Inc. (NYSE:SJI) Q3 2018 Earnings Conference Call Transcript

Nov 08, 2018 • 11:00 am ET


South Jersey Industries, Inc. (NYSE:SJI) Q3 2018 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Third Quarter 2018 South Jersey Industries Earnings 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, Mr. Dan Fidell, Vice President, Investor Relations. Sir, you may begin.

Daniel Mark Fidell

Thank you, Lauren. Good morning, everyone, and welcome to SJI's Third Quarter 2018 Earnings Conference Call and Webcast. I'm joined here today by Mike Renna, our President and Chief Executive Officer; 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 the close of the market and are also available on our website at The release and the associated 10-Q provide an in-depth review of earnings on both the 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. Let me note just at the beginning here that throughout today's call, we'll be making references to future expectations, plans and opportunities for SJI. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the company's Forms 10-K and 10-Q on file with the SEC.

And with that said, I'm pleased to introduce our CEO, Mike Renna, who will discuss our current earnings performance and outlook. SJI's Principal Financial Officer, Ken Lynch, will then review the performance of our individual segments, who will be followed then by SJI's Treasurer and Principal Financial Officer for our utilities, Ann Anthony, who will review our balance sheet, cash flow and guidance. We'll then be happy to take your questions. So with that introduction, let me now turn it over to Mike.

Michael J. Renna

Thanks, Dan, and good morning. Our third quarter results were in line with expectations, and we remain on track to deliver solid economic EPS in 2018. The impressive growth at South Jersey Gas, coupled with opportunities afforded through the acquisitions of Elizabethtown and Elkton Gas, and business transformation activities that include a targeted separation of our non-core, non-regulated businesses, have positioned us for economic EPS growth of 6% to 8% annually well into the next decade.

Excluding the impacts of acquisitions and divestitures, SJI reported a loss of economic earnings for the third quarter of $0.11 per share, compared with the loss of $0.05 per share last year. Year-to-date, economic earnings are $1.15 per share as compared to $0.73 per share last year. Our year-to-date results reflect stronger performance from South Jersey Gas and South Jersey Energy Group, which houses our wholesale and fuel management businesses. South Jersey Gas results reflect the positive impacts of our recent base rate case, solid customer growth and continued infrastructure investment intended to enhance and improve service and reliability to our customers.

Energy Group suggests we capitalize on favorable weather, tax reform and three additional fuel management contracts coming online.

Before I turn