Current Report Filing (8-k)
November 03 2017 - 8:39AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 3, 2017
SOUTH JERSEY INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Charter)
|
| | | | |
New Jersey | | 1-6364 | | 22-1901645 |
(State or Other Jurisdiction of Incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
1 South Jersey Plaza, Folsom, NJ 08037
(Address of Principal Executive Offices) (Zip Code)
(609) 561-9000
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
| |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
| |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
| |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
| |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure
On Friday, November 3, 2017, South Jersey Industries, Inc. (“SJI”) will deliver a presentation to the financial community via live webcast, in conjunction with the presentation of its Q3 2017 financial results and future prospects during the company's Q3 2017 Earnings Call. The slide presentation is attached hereto as Exhibit 99. SJI does not intend for this Item 7.01 or Exhibit 99, to be treated as “filed” under the Securities Exchange Act of 1934, as amended, or incorporated by reference into its filings under the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits
Exhibit 99. South Jersey Industries, Inc. slide presentation which will be made available to the financial community in conjunction with the company's Q3 2017 Earnings Call on November 3, 2017.
Exhibit Index
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
| | | |
| SOUTH JERSEY INDUSTRIES, INC. | |
| | | |
Date: November 3, 2017 | By: | /s/ Stephen H. Clark | |
| | Stephen H. Clark | |
| | Executive Vice President & Chief Financial Officer | |
South Jersey Industries
Q3 2017 Business Update
November 3, 2017
Certain statements contained in this presentation may qualify as “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. All statements other than statements of historical fact should be considered forward-looking
statements made in good faith and are intended to qualify for the safe harbor from liability established
by the Private Securities Litigation Reform Act of 1995. Words such as “anticipate”, “believe”, “expect”,
“estimate”, “forecast”, “goal”, “intend”, “objective”, “plan”, “project”, “seek”, “strategy”, “target”, “will”
and similar expressions are intended to identify forward-looking statements. Such forward-looking
statements are subject to risks and uncertainties that could cause actual results to differ materially from
those expressed or implied in the statements. These risks and uncertainties include, but are not limited
to, the following: general economic conditions on an international, national, state and local level;
weather conditions in our marketing areas; changes in commodity costs; changes in the availability of
natural gas; “non-routine” or “extraordinary” disruptions in our distribution system; regulatory,
legislative and court decisions; competition; the availability and cost of capital; costs and effects of legal
proceedings and environmental liabilities; the failure of customers or suppliers to fulfill their contractual
obligations; and changes in business strategies. These cautionary statements should not be construed
by you to be exhaustive. While SJI believes these forward-looking statements to be reasonable, there
can be no assurance that they will approximate actual experience. Further, SJI undertakes no obligation
to update or revise any of its forward-looking statements, whether as a result of new information,
future events or otherwise.
Forward Looking Statements
2
3
Grow
Economic
Earnings
Improve
Quality of
Earnings
Maintain
Balance Sheet
Strength
Maintain Low
to Moderate
Risk Profile
2017 Highlights
Maintain Economic EPS Guidance of $1.14 to $1.20 for 2017
• Announced acquisition of Elizabethtown Gas and Elkton Gas
• Utility rate case resolution provides $39.5 million of incremental revenue
• Executed 11th fuel supply management contract for Tyr Hickory Run Station
• $81.6 million invested YTD through AIRP II and SHARP
• ≈ 6,000 customers added YTD (gross)
The Path to Long Term Growth
Targeted Acquisition of
Elizabethtown Gas & Elkton Gas
4
$1.7B transaction, with effective purchase
price of $1.4B¹
Opportunistic deal that builds scale and improves
business mix
Transaction value 23.4x estimated 2018
earnings based on equity value of $850M ($1.4B
less $550M of debt)
Significantly additive to SJI 2020 Economic
Earnings goal of $150M
¹Adjusted for $312M tax basis step-up 980388_1.wor - NY008P5T
NJJ
PA
DE
MD
NY
VA
South Jersey Gas
Elizabethtown Gas
Elkton Gas
Significant opportunities for incremental investment
Projected average cap-ex of $135M annually
$800M of additional investment potential to replace aging infrastructure
$450M of incremental capital investment opportunities
5
Targeted Acquisition of
Elizabethtown Gas & Elkton Gas
Elizabethtown Gas & Elkton Gas Capex (2018-2021)
South Jersey Gas –
Base Rate Case Settlement
6
Revenues from base rates will increase by $39.5 million
Additive to SHARP and AIRP II roll-ins that occurred on
October 1, 2017
Rate of Return is 6.80%
Return on Equity of 9.60%
Equity-to-capital ratio of 52.5%
SJI Capital Investment
$1.9B of planned Cap Ex 2016-2020¹
Focused on regulated utility and FERC regulated growth
$291M
$318M $329M
$515M
$411M
2016A 2017P 2018P 2019P 2020P
Regulated Utility FERC regulated Non-Utility
2016A-2020P
74%
20%
6%
% Utility
and FERC
regulated:
94%
7¹Capital expenditures shown are inclusive of affiliate investments and do not reflect any projections for pending acquisition
Utility Capital Investment
2016-2020 Utility Cap-Ex Breakdown
Base Capital
Rate case settlement effective November 1
≈ $850M planned capital investment 2016-2020
Utility HQ targeted for September 2018 completion
AIRP II (Accelerated Infrastructure Replacement
Program)
$4.7M increase in annual revenues effective Oct. 1,
based on $46.1M investment
Currently in year two of 5-year, $302.5M program
SHARP (Storm Hardening and Reliability Program)
$3.4M increase in annual revenues effective Oct. 1, based
on $33.3M investment
Phase II petition filed November 1
BL England
Proposed ≈ $115M pipeline to supply natural gas to the
former BL England generating facility
Final Pinelands Commission approval received February 24
Legal appeal process continues, with a favorable resolution
expected before year end
8
Base
capital
61%
AIRP
22%
SHARP
11%
BL
England
6%
GAAP Earnings – 2017 v 2016
For the three and nine months ended September 30
Q3 2017 Q3 2016 Variance YTD 2017 YTD 2016 Variance
In millions except per share data
Gas Utility ($5.8) ($3.3) ($2.5) $43.0 $46.1 ($3.1)
Midstream $1.3 $0.0 $1.3 $3.7 ($0.1) $3.8
SJ Energy Group ($7.4) $4.2 ($11.6) ($27.0) $14.1 ($41.1)
SJ Energy Services $(25.7) $8.9 ($34.6) ($28.9) $12.9 ($41.8)
SJI ($37.5) $9.7 ($47.2) $(7.4) $73.1 ($80.5)
SJI EPS ($0.47) $0.12 ($0.59) $(0.09) $0.97 ($1.06)
9
Economic Earnings – 2017 v 2016
For the three and nine months ended September 30
Q3 2017 Q3 2016 Variance YTD 2017 YTD 2016 Variance
In millions except per share data
Gas Utility ($5.8) ($3.3) ($2.5) $43.0 $46.1 ($3.1)
Midstream $1.3 $0.0 $1.3 $3.7 ($0.1) $3.8
SJ Energy Group ($0.8) ($1.4) $0.6 $9.6 $10.4 ($0.8)
SJ Energy Services $1.3 $8.7 ($7.4) $0.0 $13.3 ($13.3)
SJI ($4.0) $3.9 $(7.9) $58.1 $69.6 ($11.5)
SJI EPS ($0.05) $0.05 $0.00 $0.73 $0.92 ($0.19)
10
*SJI uses the non-GAAP measure of Economic Earnings when discussing results. A full explanation and reconciliation of this non-GAAP measure is provided
under “Explanation and Reconciliation of Non-GAAP Financial Measures” in the Earnings Release.
South Jersey Gas
In millions¹ Q3 YTD Performance Notes
2016 Net Income ($3.3) $46.1
Customer Growth $0.2 $1.6 1.5% YOY customer growth
Accelerated Infrastructure
Investments
($0.8) $2.8 AIRP II and SHARP investments roll-in to base
rates October 1
Off System Sales $0.0 $0.1
O&M Expenses² ($1.2) ($3.9) Resource investments supporting future growth;
increased reserve for uncollectible accounts
Depreciation³ ($0.5) ($1.6) Additional assets placed in service
Interest Charges – Net of Capitalized³ ($0.7) ($1.2)
R&D Tax Credit $0.0 ($1.0) Non-recurring credit benefited 2016
Other $0.5 $0.1
2017 Net Income ($5.8) $43.0
¹ Slide depicts changes to period over period net income, it is not intended to be a substitute for financial statements.
² Excludes expenses where there is a corresponding credit in operating revenues (i.e., no impact on our financial results).
³ Expenses associated with accelerated infrastructure investments are reflected within that line item.
11
Utility Customer Growth
12 Months Ending
September 30, 2017
Margin Growth from Customer Additions $2.2M
Conversions 5,531
New Construction 2,700
Total Gross Customer Additions 8,231
Net Customer Additions 5,456
Year Over Year Net Growth Rate 1.5%
12
13
South Jersey Energy Group
For the three and nine months ended September 30
Q3 2017 Q3 2016 Variance YTD 2017 YTD 2016 Variance
Economic Earnings, in millions
SJ ENERGY GROUP ($0.8) ($1.4) $0.6 $9.6 $10.4 ($0.8)
Retail Commodity ($0.8) $0.4 ($1.2) $0.2 $1.3 ($1.1)
Fuel Management $1.4 $1.3 $0.1 $4.1 $3.0 $1.1
Wholesale Mktg / Asset
Optimization
($1.5) ($3.1) $1.6 $5.1 $6.1 ($1.0)
SJ Exploration $0.1 $0.0 $0.1 $0.2 $0.0 $0.2
Fuel management improvement driven by increased volumes
Record low spreads from warmer weather that impacted YTD wholesale marketing were
partly offset by improved Q3 performance
14
South Jersey Energy Services
For the three and nine months ended September 30
Q3 2017 Q3 2016 Variance YTD 2017 YTD 2016 Variance
Economic Earnings, in millions
SJ ENERGY SERVICES $1.3 $8.7 ($7.4) $0.0 $13.3 ($13.3)
CHP $0.5 $3.6 ($3.1) $0.5 $5.7 ($5.2)
Solar $2.4 $3.5 ($1.1) $2.5 $3.8 ($1.3)
Landfills ($1.3) ($0.4) ($0.9) ($2.9) ($1.4) ($1.5)
ITC $0.0 $1.8 ($1.8) $0.0 $4.6 ($4.6)
Other ($0.3) $0.2 ($0.5) ($0.1) $0.6 ($0.7)
CHP comparison in 3Q impacted by non-recurring $4.3M settlement that benefited 2016
Strong solar production continues, offset by softer MD SREC market
No ITC in 2017 earnings
Appendix
PennEast Pipeline Project
$200M investment with FERC
level returns projected
20% equity owner in $1.0B+, 1
BCF, 118-mile interstate pipeline
from Marcellus region of PA into
NJ
Fully subscribed; 80% of capacity
under 15-year agreements
Application
submitted
9/24/15
FERC draft EIS
issued
7/22/16
Final EIS
issued
4/7/17
Targeted
construction
2018
16
17
Non-Utility GAAP Earnings – 2017 v 2016
For the three and nine months ended September 30
Q3 2017 Q3 2016 Variance YTD 2017 YTD 2016 Variance
GAAP Earnings, in millions
SJ ENERGY GROUP ($7.4) $4.2 ($11.6) ($27.0) $14.1 ($41.1)
Retail Commodity ($0.5) ($0.8) $0.3 ($0.5) $4.4 ($4.9)
Fuel Management $1.4 $1.3 $0.1 $4.1 $3.0 $1.1
Wholesale Mktg / Asset
Optimization
($8.4) $3.7 ($12.1) ($30.8) $6.7 ($37.5)
SJ Exploration $0.1 $0.0 $0.1 $0.2 $0.0 $0.2
18
Non-Utility GAAP Earnings – 2017 v 2016
For the three and nine months ended September 30
Q3 2017 Q3 2016 Variance YTD 2017 YTD 2016 Variance
GAAP Earnings, in millions
SJ ENERGY SERVICES $(25.7) $8.9 ($34.6) ($28.9) $12.9 ($41.8)
CHP $0.5 $3.7 ($3.2) ($1.0) $5.4 ($6.4)
Solar $(24.7) $3.5 ($28.2) $(24.9) $3.8 ($28.7)
Landfills ($1.3) ($0.4) ($0.9) ($2.9) ($1.5) ($1.4)
ITC $0.0 $1.8 ($1.8) $0.0 $4.6 ($4.6)
Other ($0.3) $0.2 ($0.5) ($0.1) $0.6 ($0.7)
Fuel Supply Management
19
Counterparty Location
Capacity
(MW)
Volume
(Dth/day) Start Date Term
Starwood Marcus Hook, PA 750 80,000 In service 2016 - evergreen
LS Power West Deptford, NJ 738 36,000 In service 15 Years
LS Power II West Deptford, NJ 400 31,000 In service 15 Years
Moxie - Liberty Bradford Co, PA 825 137,655 In service 5 Years
Moxie - Patriot Lycoming Co, PA 825 137,655 In service 4 Years
Panda - Stonewall Leesburg, VA 750 110,000
In service
May 2017 4 Years
Moxie - Freedom Luzerne, PA 1,029 157,000 2018 10 Years
Lordstown Trumbell, OH 1,029 160,000 2018 5 Years
Invenergy - Lackawanna Jessup, PA 1,045 210,000 2018 10 Years
Hickory Run Lawrence County, PA 1,000 162,000 2020 5 years
To Be Announced TBA 990 121,000 TBA 4 Years
Solar SREC Generation
MW DC Number of SRECs
* Actual annual production reflected from 2012 through 2016. Estimated 2017 production reflects nine months actual and
three months forecasted, assuming normal weather conditions.
20
26,193
55,766
111,908
136,379
224,737
237,222
-
50,000
100,000
150,000
200,000
250,000
0
50
100
150
200
250
2012 2013 2014 2015 2016 2017
SRECs generated MWs Installed
This regulatory filing also includes additional resources:
q32017quarterlyresultsfinal.pdf
South Jersey Industries (NYSE:SJI)
Historical Stock Chart
From Mar 2024 to Apr 2024
South Jersey Industries (NYSE:SJI)
Historical Stock Chart
From Apr 2023 to Apr 2024