South Jersey Industries — FY2021 Earnings Presentation
29 slides from South Jersey Industries's earnings presentation, Feb 24, 2022
Slide 1: Fourth Quarter and Full Year 2021 Earnings Presentation
Fourth Quarter and Full Year 2021 Earnings Presentation February 24, 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation, including information incorporated by reference, contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including statements regarding
Slide 3: Acquisition
9SJI Acquisition
Slide 4: SJI to be acquired by the Infrastructure Investments Fund
Acquisition SJI to be acquired by the Infrastructure Investments Fund, an investment vehicle advised by J.P. Morgan Investment Management Inc. (IIF) 4 ▪ On February 24, 2022, SJI announced that it has entered into a definitive agreement to be acquired by the Infrastructure Investments Fund, an inves
Slide 5: Full Year 2021 Financial Review
Full Year 2021 Financial Review
Slide 6: 2021 Financial Review Highlights
6 2021 Financial Review Highlights PERFORMANCE ▪ GAAP earnings $0.80 per diluted share compared to $1.62 per diluted share in 2020 ▪ Economic Earnings $1.62 per diluted share compared to $1.68 per diluted share in 2020 ▪ 2020 Earnings included $0.13 per diluted share in one-time gains from tax, rate
Slide 7: 2021 Consolidated Earnings
2021 Consolidated Earnings 7 Note: Earnings and average shares outstanding are in millions. Amounts and/or EPS may not add due to rounding. GAAP GAAP Economic Economic GAAP GAAP Economic Economic Earnings EPS Earnings EPS Earnings EPS Earnings EPS UTILITY South Jersey Gas $127.6 $1.16 $127.6 $1.16 $
Slide 8: 2021 Economic Earnings Consolidated Earnings Bridge – 2020 to 2021
2021 Economic Earnings Consolidated Earnings Bridge – 2020 to 2021 8 UTILITY o SJG $18.4M o ETG $(4.9M) o ELK $(0.3)M NON-UTILITY o Energy Management $10.9M o Energy Production $(10.0)M o Midstream $(2.5)M OTHER o Interest on Debt $3.4M
Slide 9: 2021 Economic Earnings Utility Earnings Bridge – 2020 to 2021
2021 Economic Earnings Utility Earnings Bridge – 2020 to 2021 9 • MARGIN: SJG rate relief, customer growth and infrastructure modernization investment • OPERATION EXPENSES: O&M, bad debt, regulatory riders, and energy and other taxes • DEPRECIATION: Utility investment in property, plant and equipmen
Slide 10: 2021 Economic Earnings Non-Utility Earnings Bridge – 2020 to 2021
2021 Economic Earnings Non-Utility Earnings Bridge – 2020 to 2021 10 WHOLESALE SERVICES o Asset Optimization $11.6M o Fuel Management $(1.1)M o Pipeline Refund $(2.1M) RETAIL SERVICES o Consulting/Other $2.2M o Account Services $0.4M DECARBONIZATION o REV LNG $0.4M o REV Farms $0M RENEWABLES o Fuel
Slide 11: Fourth Quarter 2021 Financial Review
Fourth Quarter 2021 Financial Review
Slide 12: Fourth Quarter 2021 Consolidated Earnings
Fourth Quarter 2021 Consolidated Earnings 12 Note: Earnings and average shares outstanding are in millions. Amounts and/or EPS may not add due to rounding. GAAP GAAP Economic Economic GAAP GAAP Economic Economic Earnings EPS Earnings EPS Earnings EPS Earnings EPS UTILITY South Jersey Gas $45.4 $0.40
Slide 13: Q4 2021 Economic Earnings Consolidated Earnings Bridge
Fourth Quarter 2021 Economic Earnings Consolidated Earnings Bridge – Q4 2020 to Q4 2021 13 UTILITY o SJG $2.0M o ETG $(3.0M) NON-UTILITY o Energy Management $4.4M o Energy Production $(3.9)M o Midstream $(1.3)M OTHER o Interest on Debt $4.8M
Slide 14: Q4 2021 Economic Earnings Utility Earnings Bridge
Fourth Quarter 2021 Economic Earnings Utility Earnings Bridge – Q4 2020 to Q4 2021 14 * We define utility margin, a non-GAAP measure, as natural gas revenues less natural gas costs, regulatory rider expenses and volumetric and revenue-based energy taxes • MARGIN: SJG rate relief, customer growth and
Slide 15: Q4 2021 Economic Earnings Non-Utility Earnings Bridge
Fourth Quarter 2021 Economic Earnings Non-Utility Earnings Bridge – Q4 2020 to Q4 2021 15 WHOLESALE SERVICES o Asset Optimization $4.8M o Fuel Management $(1.4)M RETAIL SERVICES o Consulting/Other $0.8M o Account Services $0.2M RENEWABLES o Fuel Cell/Solar $(2.6)M o ITC’s/Other $(0.8)M DECARBONIZATI
Slide 16: Business Initiatives Update
Business Initiatives Update
Slide 17: SJI Utilities Key Regulatory Initiatives Advancing
SJI Utilities (SJIU) Key Regulatory Initiatives Advancing 17 Proposed $742.5M over five years to replace 825 miles of aging steel main and install excess flow valves ▪ Considerable investments past decade to modernize system focused on cast iron/bare steel main replacement ▪ New program will take pl
Slide 18: SJI Energy Enterprises RNG Dairy Farm Development On Track
SJI Energy Enterprises (SJIEE) RNG Dairy Farm Development On Track 18 MCE = Milking Cow Equivalents SJI RNG DevCo ▪ Initial investment in dairy farm development rights in 2020 ▪ Right of first refusal (ROFR) to purchase additional development rights for a total portfolio of up to 25 dairy farms ▪ Ad
Slide 19: Financial Metrics
9SJI Financial Metrics
Slide 20: Capital Sources and Uses
Financial Metrics Capital Sources and Uses (Twelve Month Period Ended December 31, 2021) Capital Sources ~1.1B Capital Uses ~1.1B 20 CASH FLOW FROM INVESTING $645 CASH FLOW FROM OPERATIONS $273 DEBT ISSUANCE $442 DEBT REPAYMENT/OTHER $368 DIVIDENDS, $133 EQUITY ISSUANCE $431 M ill io n s
Slide 21: Equity Capitalization / Credit Ratings
Financial Metrics Equity Capitalization / Credit Ratings Equity-to-Total Cap Credit Ratings 21 Note: Non-GAAP includes mandatory convertible equity units and equity credit from rating agencies for long-duration debt. Results are rounded. S&P SJI SJG ETG BBB BBB BBB Stable Stable Stable Moody's SJI S
Slide 22: Liquidity and Debt Maturities
Liquidity and Debt Maturities Ample Liquidity Available at SJI and Utilities No Significant Debt Maturities Next Five Years Long-Term Debt Maturities As of December 31, 2021, Millions Liquidity As of December 31, 2021, Millions 22 Note: Excludes $335 million mandatory convertible equity units due 20
Slide 23: Appendix
9SJI Appendix
Slide 24: Our Mission: 21st Century Clean Energy Infrastructure Company
2 4 Our Mission 21st Century Clean Energy Infrastructure Company ▪ $3B+ infrastructure company supplying safe, reliable and affordable energy and supporting economic growth ▪ U.S. and New Jersey accelerating transition to low carbon and renewable energy future ▪ In 2021, launched utility-centered $3
Slide 25: Experienced Senior Team Focused on Execution
Experienced Senior Team Focused on Execution Mike Renna President & Chief Executive Officer Joined in 1998 ▪ Prior to his leadership role at SJI, Mr. Renna held the titles of president of South Jersey Energy Solutions and South Jersey Energy ▪ Appointed to the South Jersey Energy Solutions executive
Slide 26: Decarbonization Goals
Decarbonization Goals Our Pathway To A Clean Energy Future ▪ 70% Reduction in Carbon Emissions and Consumption by 2030 ▪ 100% Reduction in Carbon Emissions and Consumption by 2040 ▪ At least 25% of Annual Capex on Sustainability Investments 26
Slide 27: Strong Growth Through 2025 and Beyond
Strong Growth Through 2025 and Beyond Driving Significant Shareholder Value 27 SECTOR FUNDAMENTALS STRATEGIC PLAN FINANCIAL TARGETS $3B+ existing infrastructure are valuable assets, performing essential role supplying reliable energy to homes and businesses and supporting economic growth Utilities w
Slide 28: Future Growth Opportunities
Future Growth Opportunities Focused on Both Utility and Non-Utility Investments 28 HISTORIC TRACK RECORD PRESENT FUTURE OPPORTUNITIES REDUCING ENERGY CONSUMPTION/EMISSIONS Conservation Incentive Program (SJG) Replacement of Aging Infrastructure (SJG) Conservation Incentive Programs (SJG and ETG) Rep
Slide 29: 9SJI
9SJI
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