Form 8-K SOUTH JERSEY INDUSTRIES For: Nov 04
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E-mailUNITED 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
November 4, 2016
(Date of earliest event reported)
SOUTH JERSEY INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
New Jersey | 1-6364 | 22-1901645 |
(State of incorporation) | (Commission File Number) | (IRS employer identification no.) |
1 South Jersey Plaza, Folsom, New Jersey 08037
(Address of principal executive offices, including 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:
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)) |
Item 7.01 Regulation FD Disclosure
On Friday, November 4, 2016, South Jersey Industries, Inc. (“SJI”) will deliver a presentation to the financial community via live webcast, in conjunction with the presentation of its Q3 2016 financial results and future prospects during the company's Q3 2016 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 Earnings Call on November 4, 2016.
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 4, 2016 | By: | /s/ Stephen H. Clark | |
Stephen H. Clark | |||
Chief Financial Officer | |||
South Jersey Industries
Q3 2016 Business Update – 11/4/16
Forward Looking Statements
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” 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.
2
Strategic Focus
3
Grow Economic Earnings
Improve Quality of Earnings
Strengthen Balance Sheet
Maintain Low to Moderate Risk Profile
$150 Million By 2020
4
$1.5 Billion of Regulated Capital Investment
• B.L. England pipeline project
• 1-2 Rate Cases
• PennEast Pipeline
• Residential natural gas
conversions
• Target large volume customers
• 2016 ≈422K DTs /day on-line
• Contributes 3%-5% of total earnings in
2016
• Greater SREC production in strong
NJ SREC market
• Accelerated Infrastructure
Replacement Program (AIRP)
• Storm Hardening and Reliability
Program (SHARP)
• Organic growth in retail commodity
business
• CNG stations and fleet conversions
• 2020 ≈1MM+ DTs/day on-line
• Contributes 6%-9% of total
earnings in 2020
• Optimize remaining landfill assets
• Maximize transport capacity
Customer Growth
Fuel Management
Asset Optimization
5
Key Accomplishments
AIRP
Energy
Production
BL England
Other
• Improved operating performance from existing assets
• Strong solar production and SREC price recovery
• Successful hedging strategy
• On track to achieve EPS target between $1.29 - $1.35
•McKee City liquefaction facility on-line for current heating season
•Two additional fuel management contracts contributing in Q3
• Oral arguments on appeals of SJG’s BPU approval completed in
October
• Decision from appeals court expected by year end
• December 1 roll-in of current program investments
• 5-year, $302.5M program extension approved 10/31
Q3
2016
Q3
2015 Variance
YTD
2016
YTD
2015 Variance
In millions except per share data
Gas Utility $(3.3) $(3.4) $0.1 $46.1 $44.4 $1.7
SJ Energy Group $4.2 $(9.6) $13.8 $14.1 $3.7 $10.4
SJ Energy Services $8.9 $0.5 $8.4 $12.9 $6.7 $6.2
SJI $9.7 $(12.5) $22.2 $73.1 $54.7 $18.4
SJI EPS $0.12 $(0.18) $0.30 $0.97 $0.80 $0.17
6
SJI Financial Results – GAAP
For the three and nine months ended September 30th
Q3
2016
Q3
2015 Variance
YTD
2016
YTD
2015 Variance
In millions except per share data
Gas Utility $(3.3) $(3.4) $0.1 $46.1 $44.4 $1.7
SJ Energy Group $(1.4) $(2.3) $0.9 $10.4 $6.1 $4.3
SJ Energy Services $8.7 $0.8 $7.9 $13.3 $5.4 $7.9
SJI $3.9 $(5.0) $8.9 $69.6 $55.8 $13.8
SJI EPS $0.05 $(0.07) $0.12 $0.92 $0.82 $0.10
7
SJI Financial Results – Economic Earnings*
For the three and nine months ended September 30th
*SJI uses the non-GAAP measure of Economic Earnings when discussing results. Economic Earnings eliminates all unrealized gains and losses
on commodity derivative transactions 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. 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.
8
Utility Drivers
South Jersey Gas
Incremental changes period over period¹ Q3 YTD
2015 Income ($3.4) $44.4
Customer Growth $0.2 $1.8
Accelerated Infrastructure Investments $1.1 $4.3
Off System Sales $0.1 $0.3
O & M Expenses² $0.2 ($1.3)
Depreciation³ ($0.7) ($2.6)
Other ($0.8) ($0.8)
2016 Income ($3.3) $46.1
In millions
¹ Slide depicts changes to period over period net income, it is not intended to be a substitute for financial statements.
² Excludes regulatory rider expenses that are passed through to customers.
³Depreciation expenses associated with accelerated infrastructure investments are reflected within that line item.
9
Non-Utility Drivers
SJ Energy Group
In millions
Incremental changes period over period ¹ Q3 YTD
2015 Economic Earnings ($2.3) $6.1
Retail Gas & Electric $0.3 ($0.5)
Wholesale - Asset Optimization ($0.2) $3.2
Wholesale - Fuel Management $0.8 $1.6
2016 Economic Earnings ($1.4) $10.4
¹ Slide depicts changes to period over period net income, it is not intended to be a substitute for financial statements.
10
Non-Utility Drivers
SJ Energy Services
Incremental changes period over period¹ Q3 YTD
2015 Economic Earnings $0.8 $5.4
CHP $0.1 ($1.9)
Renewable $3.4 $7.4
Other $0.0 $0.1
ITC $0.5 ($14.0)
ACR related recovery/write down $3.9 $16.3
2016 Economic Earnings $8.7 $13.3
In millions
¹ Slide depicts changes to period over period net income, it is not intended to be a substitute for financial statements.
Appendix 11
12
Utility Customer Growth
12 Months Ending
September 30, 2016
Net Customer Additions 4,830
Incremental Net Income
from Customer Additions
$2.6M
YOY Net Growth Rate 1.3%
12 Months Ending September 30,
2016
Conversions 4,864
New Construction 2,465
Total Gross Customer Additions 7,329
13
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 with 80% of
capacity under 15-year agreements
with utility/energy affiliates of
project sponsors
Application
submitted
9/24/15
FERC draft EIS
issued 7/22/16
Final
environmental
review
expected Dec
2016
Targeted in-
service date
2H 2018
14
Counterparty Location
Capacity
(MW)
Volume
(Dth/day) Start Date Term
NextEra/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
June 2016 5 Years
Moxie - Patriot Lycoming Co, PA 825 137,655
In service
June 2016 4 Years
Panda - Stonewall Leesburg, VA 750 110,000 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
To Be Announced TBA 990 121,000 TBA 4 Years
Fuel Supply Management
15
Solar SREC Generation
*Total production at 12/31 reflected from 2012 through 2015; 2016 includes 9 months actual and 3
months projected, from existing assets
26,193
55,766
111,908
136,379
220,688
0
50
100
150
200
250
0
50,000
100,000
150,000
200,000
250,000
2012 2013 2014 2015 2016*
SRECs generated Capacity
Number of
SRECs
Capacity,
MW DC
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