|
Investor Contact: |
|
Daniel Fidell |
|
609-561-9000 x7027 |
|
dfidell@sjindustries.com |
| |
|
Media Contact: |
|
Dominick DiRocco |
|
609-561-9000 x4262 |
|
ddirocco@sjindustries.com |
SJI Reports Second Quarter 2022
ResultsAcquisition Proceeding on
Track
FOLSOM, NJ (August 3, 2022) -
SJI (NYSE: SJI) today reported operating results for the second
quarter ended June 30, 2022. Highlights include:
- Q2 2022 GAAP earnings $(0.15) per
diluted share compared to $(0.87) per diluted share in 2021
Economic Earnings* $0.05 per diluted share compared to $0.02 per
diluted share in 2021
- YTD 2022 GAAP earnings $0.90 per
diluted share compared to $0.30 per diluted share in 2021 Economic
Earnings $1.27 per diluted share compared to $1.22 per diluted
share in 2021
- YTD Economic EPS improvement
reflects increased profitability from both Utility and Non-Utility
operations and the impact of financing activities
- Acquisition by Infrastructure
Investment Fund (IIF) on track; Closing expected in Q4 2022
- Regulatory initiatives advancing —
SJG new Infrastructure Investment Program (IIP) authorized; Base
rate cases for ETG/SJG proceeding on schedule
- RNG production at ten dairy farms
under development; Expected in-service in 2022/2023
"Our businesses have performed very well year-to-date, and we
remain on track to achieve our financial goals in 2022," said Mike
Renna, SJI President and Chief Executive Officer. "Our regulatory
initiatives and clean energy investments targeting enhanced
infrastructure safety, reliability and decarbonization continue to
advance. And our acquisition by IIF continues to secure requisite
approvals, with closing of the transaction expected later this
year,” added Renna.
| |
|
Three Months Ended June 30, 2022 |
|
Three Months Ended June 30, 2021 |
| |
|
GAAP |
GAAP |
Economic |
Economic |
|
GAAP |
GAAP |
Economic |
Economic |
|
|
|
Earnings |
EPS |
Earnings |
EPS |
|
Earnings |
EPS |
Earnings |
EPS |
|
Utility |
|
$ |
1.5 |
|
$ |
0.01 |
|
$ |
2.8 |
|
$ |
0.02 |
|
|
$ |
3.3 |
|
$ |
0.03 |
|
$ |
3.3 |
|
$ |
0.03 |
|
| Non-Utility |
|
$ |
(11.3 |
) |
$ |
(0.09 |
) |
$ |
12.7 |
|
$ |
0.10 |
|
|
$ |
(90.7 |
) |
$ |
(0.82 |
) |
$ |
8.1 |
|
$ |
0.07 |
|
|
Other |
|
$ |
(8.8 |
) |
$ |
(0.07 |
) |
$ |
(9.2 |
) |
$ |
(0.07 |
) |
|
$ |
(9.3 |
) |
$ |
(0.08 |
) |
$ |
(9.3 |
) |
$ |
(0.08 |
) |
|
Total - Continuing Ops |
|
$ |
(18.7 |
) |
$ |
(0.15 |
) |
$ |
6.3 |
|
$ |
0.05 |
|
|
$ |
(96.7 |
) |
$ |
(0.87 |
) |
$ |
2.0 |
|
$ |
0.02 |
|
| Average Diluted
Shares |
|
|
125.9 |
|
|
|
125.9 |
|
|
|
|
110.9 |
|
|
|
110.9 |
|
| *Non-GAAP, see
"Explanation and Reconciliation of Non-GAAP Financial
Measures." |
|
|
|
|
|
| Note: Earnings
and average shares outstanding are in millions. Amounts and/or EPS
may not add due to rounding. |
|
|
Second Quarter 2022 Results
For the three-month period ended June 30, 2022, SJI reported
consolidated GAAP earnings of $(18.7) million compared with $(96.7)
million in the prior year period.
SJI uses the non-GAAP measure of economic earnings when
discussing results. We believe this presentation provides clarity
into the continuing earnings of our business. A full explanation
and reconciliation of economic earnings is provided under
“Explanation and Reconciliation of Non-GAAP Financial Measures”
later in this report and in our 10-K for the year ending
December 31, 2021.
For the three-month period ended June 30, 2022, economic
earnings were $6.3 million compared with $2.0 million in the prior
year period.
UTILITY
Utility entities include the regulated operations of South
Jersey Gas (SJG) and Elizabethtown Gas (ETG). Second quarter 2022
GAAP earnings were $1.5 million compared with $3.3 million in 2021.
Economic earnings were $2.8 million compared with $3.3 million in
2021.
South Jersey Gas
Performance. Second quarter 2022 GAAP earnings
were $4.8 million compared with $6.3 million in 2021. Economic
earnings were $6.2 million compared with $6.3 million in 2021.
Utility margin increased $4.5 million, reflecting customer growth
and the roll-in of investments from infrastructure replacement
programs. We define utility margin, a non-GAAP measure, as natural
gas revenues plus depreciation and amortization expenses, less
natural gas costs, regulatory rider expenses and related volumetric
and revenue-based energy taxes. Total expenses increased $4.6
million, primarily reflecting higher depreciation and interest
expenses.
Customer Growth. SJG added approximately 6,600
new customers over the last 12 months and now serves approximately
413,000 customers. SJG’s 1.2% customer growth rate compares
favorably to the peer average and remains driven by gas conversions
from alternate fuels such as oil and propane, and new
construction.
Infrastructure Modernization. Through
infrastructure replacement programs, SJG enhances the safety and
reliability of our system while earning our authorized utility
return on approved investments in a timely manner. In June, the New
Jersey Board of Public Utilities (NJBPU) authorized a new
Infrastructure Investment Program (IIP) that accelerates planned
capital expenditures to enhance the delivery of safe, reliable,
affordable natural gas, create jobs, and support the State’s
environmental goals. SJG's new program authorizes investment of
$200 million from 2022-2027 for important infrastructure upgrades
including the replacement of up to 250 miles of pre-code coated
steel and vintage plastic main. Our annualized investment of
approximately $40 million from July 2022 to June 2023 is
anticipated to be rolled into rates on October 1, 2023.
Base Rate Case. In April, SJG filed a petition
with the NJBPU requesting an increase of $73.1 million to its base
rates, which was updated in July to an increase of $73.3 million.
The request is based on a proposed pre-tax return on invested
capital of 7.77%, with a capital structure that includes a common
equity component of 57.0% and a return on common equity of 10.75%.
The request is predominantly driven by the significant capital
investments that SJG has made since its last base rate proceeding
that was resolved in 2020. These capital investments have been and
will continue to be made to ensure the safety, reliability and
resiliency of SJG's distribution system, allow SJG to continue to
provide safe, reliable and best in class customer service, and
facilitate the environmental goals of NJ and SJI's commitment to
ensuring that it is part of New Jersey’s clean energy future. A
resolution of the case is expected later this year.
Energy Efficiency. Through energy efficiency
programs, SJG advances New Jersey’s clean energy goals in a manner
that benefits customers, the environment and the State’s green
economy while recovering our investments in a timely manner. SJG's
energy efficiency program, as approved by the BPU in April 2021,
authorizes investment of $133.2 million from July 1, 2021 to June
30, 2024. The revenue requirement associated with our net
investment of approximately $25 million from July 2021 to June 2022
commenced recovery in July 2021 under the terms of the program.
Elizabethtown GasPerformance.
Second quarter 2022 GAAP/economic earnings were $(3.4) million
compared with $(3.0) million in 2021. Utility margin, as previously
defined, increased $2.0 million, reflecting customer growth and the
roll-in of investments from infrastructure replacement programs.
Total expenses increased $2.4 million, primarily reflecting higher
O&M and interest expenses.
Customer Growth. ETG added approximately 5,000
new customers over the last 12 months and now serves approximately
307,000 customers. ETG’s 1.5% customer growth rate has increased
from its historic 0.9% rate, driven by increases in gas conversions
from alternate fuels such as oil and propane, and new
construction.
Infrastructure Modernization. ETG's
Infrastructure Investment Plan (IIP) authorizes investment of $300
million from 2019-2024 for important infrastructure upgrades
including the replacement of up to 250 miles of cast iron and bare
steel mains. Our investment of approximately $58 million from July
2021 to June 2022 is anticipated to be rolled into rates on October
1, 2022.
Base Rate Case. In December 2021, ETG filed a
petition with the NJBPU requesting an increase of $76.6 million,
which was updated in February 2022 to a requested increase of $72.9
million and in May 2022 to a requested increase of $77.3 million.
The request is predominantly driven by the significant capital
investments that ETG has made since its last base rate proceeding
that was resolved in 2019. These capital investments have been and
will continue to be made to ensure the safety, reliability and
resiliency of ETG's distribution system, allow ETG to continue to
provide safe, reliable and best in class customer service, and
facilitate the environmental goals of NJ and SJI's commitment to
ensuring that it is part of New Jersey’s clean energy future. A
resolution of the case is expected in Q3 2022.
Energy Efficiency. ETG's energy efficiency
program, as approved by the BPU in April 2021, authorizes
investment of $74.0 million from July 1, 2021 to June 30, 2024. The
revenue requirement associated with our net investment of
approximately $12.7 million from July 2021 to June 2022 commenced
recovery in July 2021 under the terms of the program.
NON-UTILITY
SJI's non-utility entities include Energy Management, Energy
Production and Midstream. Second quarter 2022 GAAP earnings were
$(11.3) million compared with $(90.7) million in 2021. Economic
earnings were $12.7 million compared with $8.1 million in 2021.
Energy Management
Performance. Energy Management includes
Wholesale Services (Fuel Management/Marketing) and Retail Services
(Account Services/Energy Consulting). Second quarter 2022 GAAP
earnings were $(22.2) million compared with $(4.1) million in 2021.
Economic earnings were $2.4 million compared with $7.0 million in
2021, reflecting lower margins from daily energy trading activities
and less robust asset optimization opportunities as compared with
the year ago period, and contributions from consulting activities,
meter reading and appliance service contract fees.
Energy Production
Performance. Energy Production primarily
includes renewable (fuel cell/solar) and decarbonization (REV/RNG
development) investments. Second quarter 2022 GAAP earnings were
$10.2 million compared with $(0.4) million in 2021. Economic
earnings were $10.2 million compared with $(0.2) million in 2021,
primarily reflecting investment tax credits (ITC's) and income
associated with fuel cell and solar investments, and contributions
from SJI's 35% equity interest in REV. RNG development activities
at ten dairy farms is proceeding on track, with in-service
anticipated in 2022/2023.
Midstream
Performance. Second quarter GAAP/economic
earnings were $0.8 million compared with $(86.1) million in 2021.
Economic earnings were $0.0 million compared with $1.2 million in
2021, reflecting the absence of allowance for funds used during
construction following cessation of the PennEast Pipeline project
in 2021.
OTHER
Performance. Other entity includes interest on
debt, including debt associated with past acquisitions. Second
quarter 2022 GAAP earnings were $(8.8) million compared with $(9.3)
million in 2021. Economic earnings were $(9.2) million compared
with $(9.3) million in 2021, reflecting lower outstanding
indebtedness partially offset by higher interest and bank fees.
Six Months 2022 Results
| |
|
Six Months Ended June 30, 2022 |
|
Six Months Ended June 30, 2021 |
| |
|
GAAP |
GAAP |
Economic |
Economic |
|
GAAP |
GAAP |
Economic |
Economic |
|
|
|
Earnings |
EPS |
Earnings |
EPS |
|
Earnings |
EPS |
Earnings |
EPS |
|
Utility |
|
$ |
128.7 |
|
$ |
1.05 |
|
$ |
130.0 |
|
$ |
1.06 |
|
|
$ |
124.9 |
|
$ |
1.16 |
|
$ |
124.9 |
|
$ |
1.16 |
|
| Non-Utility |
|
$ |
3.3 |
|
$ |
0.03 |
|
$ |
43.6 |
|
$ |
0.35 |
|
|
$ |
(74.4 |
) |
$ |
(0.69 |
) |
$ |
24.1 |
|
$ |
0.22 |
|
|
Other |
|
$ |
(21.2 |
) |
$ |
(0.17 |
) |
$ |
(17.9 |
) |
$ |
(0.15 |
) |
|
$ |
(18.4 |
) |
$ |
(0.17 |
) |
$ |
(18.2 |
) |
$ |
(0.17 |
) |
|
Total - Continuing Ops |
|
$ |
110.7 |
|
$ |
0.90 |
|
$ |
155.8 |
|
$ |
1.27 |
|
|
$ |
32.1 |
|
$ |
0.30 |
|
$ |
130.9 |
|
$ |
1.22 |
|
| Average Diluted
Shares |
|
|
122.9 |
|
|
|
122.9 |
|
|
|
|
107.4 |
|
|
|
107.4 |
|
| *Non-GAAP, see
"Explanation and Reconciliation of Non-GAAP Financial
Measures." |
|
|
|
|
|
| Note: Earnings
and average shares outstanding are in millions. Amounts and/or EPS
may not add due to rounding. |
|
|
Six months YTD GAAP earnings were $110.7 million compared with
$32.1 million in 2021. Economic earnings were $155.8 million
compared with $130.9 million in the year-ago period.
UTILITY
Utility entities contributed six months YTD GAAP earnings of
$128.7 million compared with $124.9 million in 2021. Economic
earnings were $130.0 million compared with $124.9 million in the
year-ago period.
- SJG. YTD GAAP
earnings were $93.5 million compared with $89.9 million in 2021.
Economic earnings were $94.9 million compared with $89.9 million in
2021. Utility margin increased $13.4 million, reflecting customer
growth and the roll-in of investments from infrastructure
replacement programs. Total expenses increased $8.4 million,
primarily reflecting higher depreciation and interest
expenses.
- ETG. YTD
GAAP/economic earnings were $35.2 million compared with $35.0
million in 2021. Utility margin increased $5.7 million, reflecting
customer growth and the roll-in of investments from infrastructure
replacement programs. Total expenses increased $5.5 million,
primarily reflecting higher depreciation and interest
expenses.
NON-UTILITY
Six months YTD GAAP earnings were $3.3 million compared with
$(74.4) million in 2021. Economic earnings were $43.6 million
compared with $24.1 million in 2021.
- Energy Management.
YTD GAAP earnings were $(7.1) million compared with $9.6 million in
2021. Economic earnings were $32.9 million compared with $20.9
million in 2021, reflecting improved asset optimization
opportunities, colder weather and improved contributions from
consulting activities.
- Energy Production.
YTD GAAP earnings were $9.8 million compared with $1.2 million in
2021. Economic earnings were $10.7 million compared with $1.0
million in 2021, reflecting ITC's and income associated with fuel
cell and solar investments and contributions from SJI's equity
interest in REV.
- Midstream. YTD
GAAP earnings were $0.6 million compared with $(85.1) million in
2021. Economic earnings were $0.0 million compared with $2.2
million in 2021, reflecting the absence of AFUDC related to the
project.
OTHER
Six months YTD GAAP earnings were $(21.2) million compared with
$(18.4) million in 2021. Economic earnings were $(17.9) million
compared with $(18.2) million in 2021, reflecting lower outstanding
indebtedness partially offset by higher interest and bank fees.
Capital Expenditures and Cash Flow
For the three months ended June 30, 2022:
- Net cash provided by operating
activities was $323.6 million compared with $241.7 million in the
prior year period, primarily reflecting improved wholesale
marketing results and customer growth.
- Net cash used in investing
activities was $(312.9) million compared with $(269.3) million in
the prior year period, primarily reflecting utility capital
expenditures and REV, fuel cell and solar investments.
- Net cash provided by financing
activities was $15.6 million compared with $73.8 million in the
prior year period, primarily reflecting equity issuance partially
offset by debt repayment.
Balance Sheet
- Equity-to-total capitalization was
37.6% at June 30, 2022 compared with 35.8% at December 31, 2021,
largely reflecting equity financing and repayment of debt.
- Assuming conversion of mandatory
convertible equity units and equity credit from rating agencies for
long-duration debt, SJI's adjusted equity-to-total capitalization,
a non-GAAP measure, was 45.3% at June 30, 2022 compared with 43.6%
at December 31, 2021.
- At June 30, 2022, SJI had total
credit facilities of $1.0 billion, with $647.8 million of available
liquidity.
Dividends
On August 3, SJI’s Board of Directors declared its regular
dividend of $0.3100 per share for the third quarter of 2022. The
dividend is payable October 4, 2022 to shareholders of record at
the close of business on September 9, 2022. This is SJI's 71st
consecutive year of paying dividends.
Acquisition
On February 24, 2022, SJI announced that it had entered into a
definitive agreement to be acquired by IIF. The per share purchase
price of $36.00 represented a 46.3% premium to SJI’s 30-day volume
weighted average price (VWAP) as of February 23, 2022, the last
trading day prior to the announcement of the agreement. The
transaction was unanimously approved by SJI’s Board of Directors
and is expected to close in the fourth quarter of 2022, subject to
the approval of SJI’s shareholders, the receipt of regulatory
approvals, including by the New Jersey Board of Public Utilities,
and other customary closing conditions. Dividends payable to SJI
shareholders are expected to continue in the ordinary course until
the closing, subject to approval by SJI’s Board of Directors. Upon
completion of the transaction, SJI’s shares will no longer trade on
the New York Stock Exchange, and SJI will become a private
company.
About SJI
SJI (NYSE: SJI), an energy infrastructure holding company based
in Folsom, NJ, delivers energy services to customers through two
primary subsidiaries: SJI Utilities (SJIU) and SJI Energy
Enterprises (SJIEE). SJIU houses the company’s regulated natural
gas utility operations, delivering safe, reliable and affordable
natural gas to more than 700,000 residential, commercial and
industrial customers across New Jersey via its South Jersey Gas and
Elizabethtown Gas subsidiaries. SJIEE houses the company’s
non-utility operations primarily focused on clean energy
development and decarbonization via renewable energy production and
energy management activities. Visit sjindustries.com for more
information about SJI and its subsidiaries.
Forward-Looking Statements and Risk Factors
This news release, 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 guidance, industry prospects or future results
of operations or financial position, expected sources of
incremental margin, strategy, financing needs, future capital
expenditures and the outcome or effect of ongoing litigation, are
forward-looking. This Quarterly Report uses 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. These forward-looking statements are
based on the beliefs and assumptions of management at the time that
these statements were prepared and are inherently uncertain.
Forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied in the forward-looking statements. These risks
and uncertainties include, but are not limited to, general economic
conditions on an international, national, state and local level;
weather conditions in SJI’s marketing areas; changes in commodity
costs; changes in the availability of natural gas; “non-routine” or
“extraordinary” disruptions in SJI’s distribution system;
cybersecurity incidents and related disruptions; 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, suppliers or
business partners to fulfill their contractual obligations; changes
in business strategies; failure to satisfy the conditions to
closing of the Merger; the diversion of management time on
Merger-related issues; and public health crises and epidemics or
pandemics, such as the COVID-19 pandemic. These risks and
uncertainties, as well as other risks and uncertainties that could
cause our actual results to differ materially from those expressed
in the forward-looking statements, are described in greater detail
in Part II, Item 1A in this Quarterly Report, and Part I, Item 1A
in SJI’s and SJG's Annual Report on Form 10-K for the year ended
December 31, 2021, as they may be supplemented from time to time by
other SEC filings made by SJI or SJG. earnings release. Also refer
to the additional risk factor described below:
Explanation of Non-GAAP Financial Measures
Management uses the non-GAAP financial measures of Economic
Earnings and Economic Earnings per share when evaluating its
results of operations. These non-GAAP financial measures should not
be considered as an alternative to GAAP measures, such as net
income, operating income, earnings per share from continuing
operations or any other GAAP measure of financial performance. We
define Economic Earnings as: Income from Continuing Operations, (i)
less the change in unrealized gains and plus the change in
unrealized losses on non-utility derivative transactions; (ii) less
income and plus losses attributable to noncontrolling interests;
and (iii) less the impact of transactions, contractual arrangements
or other events where management believes period to period
comparisons of SJI's operations could be difficult or potentially
confusing. With respect to part (iii) of the definition of Economic
Earnings, items excluded from Economic Earnings for the three and
six months ended June 30, 2022 and 2021, are described in (A)-(E)
in the table below. Economic Earnings is a significant financial
measure used by our management to indicate the amount and timing of
income from continuing operations that we expect to earn after
taking into account the impact of the items described above.
Management uses Economic Earnings to manage its business and to
determine such items as incentive/compensation arrangements and
allocation of resources. Specifically regarding derivatives, we
believe that this financial measure indicates to investors the
profitability of the entire derivative-related transaction and not
just the portion that is subject to mark-to-market valuation under
GAAP. We believe that considering only the change in market value
on the derivative side of the transaction can produce a false sense
as to the ultimate profitability of the total transaction as no
change in value is reflected for the non-derivative portion of the
transaction.
Reconciliation of Non-GAAP Financial
Measures
The following table presents a reconciliation of
our income from continuing operations and earnings per share from
continuing operations to Economic Earnings and Economic Earnings
per share (in thousands, except per share data):
| |
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
| |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| (Loss) Income from Continuing
Operations |
$ |
(18,678 |
) |
|
$ |
(96,660 |
) |
|
$ |
110,736 |
|
|
$ |
32,138 |
|
| Minus/Plus: |
|
|
|
|
|
|
|
| Unrealized Mark-to-Market
Losses on Derivatives |
|
33,922 |
|
|
|
15,230 |
|
|
|
55,191 |
|
|
|
15,274 |
|
|
Income Attributable to Noncontrolling Interests |
|
(104 |
) |
|
|
(120 |
) |
|
|
(291 |
) |
|
|
(299 |
) |
|
Impairment of Equity Method Investment (A) |
|
— |
|
|
|
87,370 |
|
|
|
— |
|
|
|
87,370 |
|
|
Impairment of Property, Plant & Equipment (B) |
|
1,897 |
|
|
|
— |
|
|
|
1,897 |
|
|
|
— |
|
|
Acquisition/Sale Net Costs (C) |
|
(1,342 |
) |
|
|
406 |
|
|
|
5,149 |
|
|
|
674 |
|
|
Income Taxes (D) |
|
(9,391 |
) |
|
|
(18,414 |
) |
|
|
(16,922 |
) |
|
|
(18,451 |
) |
|
Additional Tax Adjustments (E) |
|
— |
|
|
|
14,176 |
|
|
|
— |
|
|
|
14,176 |
|
|
Economic Earnings |
$ |
6,304 |
|
|
$ |
1,988 |
|
|
$ |
155,760 |
|
|
$ |
130,882 |
|
| |
|
|
|
|
|
|
|
| Earnings per Share from
Continuing Operations |
$ |
(0.15 |
) |
|
$ |
(0.87 |
) |
|
$ |
0.90 |
|
|
$ |
0.30 |
|
|
Minus/Plus: |
|
|
|
|
|
|
|
| Unrealized Mark-to-Market
Losses on Derivatives |
|
0.27 |
|
|
|
0.14 |
|
|
|
0.45 |
|
|
|
0.14 |
|
|
Income Attributable to Noncontrolling Interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Impairment of Equity Method Investment (A) |
|
— |
|
|
|
0.79 |
|
|
|
— |
|
|
|
0.81 |
|
|
Impairment of Property, Plant & Equipment (B) |
|
0.02 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
Acquisition/Sale Net Costs (C) |
|
(0.01 |
) |
|
|
— |
|
|
|
0.04 |
|
|
|
0.01 |
|
|
Income Taxes (D) |
|
(0.08 |
) |
|
|
(0.17 |
) |
|
|
(0.14 |
) |
|
|
(0.17 |
) |
|
Additional Tax Adjustments (E) |
|
— |
|
|
|
0.13 |
|
|
|
— |
|
|
|
0.13 |
|
|
Economic Earnings per Share |
$ |
0.05 |
|
|
$ |
0.02 |
|
|
$ |
1.27 |
|
|
$ |
1.22 |
|
(A) Represents an other-than-temporary
impairment charge taken in 2021 on the Company’s equity method
investment in PennEast.
(B) Represents an other-than-temporary
impairment charge on property, plant & equipment at SJG that
was deemed unusable.
(C) In 2022, represents costs incurred related
to the Merger Agreement and to finalize the transactions related to
acquiring Bronx Midco and solar projects, partially offset with
gains recorded on the sale of assets. In 2021, represents the final
working capital payment on the sale of Elkton.
(D) The income taxes were determined using a
combined average statutory tax rate.
(E) Represents a federal deferred tax asset valuation allowance
taken in 2021 at SJI related to the impairment charge described in
(A).
Summary of Utility Margin
The following tables summarize Utility Margin
for SJG and ETG (in thousands):
South Jersey Gas
| |
Three Months EndedJune 30, |
Six Months EndedJune 30, |
| |
|
2022 |
|
|
|
2021 |
|
2022 |
|
|
|
2021 |
|
| Utility
Margin: |
|
|
|
|
|
|
| Residential |
$ |
40,345 |
|
|
$ |
37,728 |
$ |
163,823 |
|
|
$ |
157,701 |
|
| Commercial and Industrial |
|
21,499 |
|
|
|
20,101 |
|
66,086 |
|
|
|
61,123 |
|
| Cogeneration and Electric
Generation |
|
953 |
|
|
|
1,172 |
|
2,204 |
|
|
|
2,421 |
|
| Interruptible |
|
19 |
|
|
|
14 |
|
45 |
|
|
|
79 |
|
| Off-System Sales &
Capacity Release |
|
920 |
|
|
|
195 |
|
3,183 |
|
|
|
932 |
|
| Other Revenues |
|
661 |
|
|
|
736 |
|
901 |
|
|
|
979 |
|
|
Margin Before Weather Normalization & Decoupling |
|
64,397 |
|
|
|
59,946 |
|
236,242 |
|
|
|
223,235 |
|
|
CIP Mechanism |
|
(669 |
) |
|
|
636 |
|
(1,395 |
) |
|
|
(126 |
) |
|
EET Mechanism |
|
1,920 |
|
|
|
1,555 |
|
3,724 |
|
|
|
3,009 |
|
|
Utility Margin** |
$ |
65,648 |
|
|
$ |
62,137 |
$ |
238,571 |
|
|
$ |
226,118 |
|
Elizabethtown Gas
| |
Three Months EndedJune 30, |
Six Months EndedJune 30, |
| |
|
2022 |
|
|
|
2021 |
|
|
2022 |
|
|
|
2021 |
|
| Utility
Margin: |
|
|
|
|
|
|
| Residential |
$ |
21,427 |
|
|
$ |
21,552 |
|
$ |
89,033 |
|
|
$ |
87,533 |
|
| Commercial &
Industrial |
|
16,629 |
|
|
|
16,716 |
|
|
47,775 |
|
|
|
49,773 |
|
| Regulatory Rider Mechanisms
(B) |
|
(1,917 |
) |
|
|
(4,130 |
) |
|
(7,967 |
) |
|
|
(14,178 |
) |
|
Utility Margin (C) |
$ |
36,139 |
|
|
$ |
34,138 |
|
$ |
128,841 |
|
|
$ |
123,128 |
|
*B-Represents pass-through expenses for which
there is a corresponding credit in operating
revenues. Therefore, such recoveries have no impact on
financial results.
**Utility Margin is a non-GAAP financial measure
and is further defined on page 2 under SJG performance. The
definition of Utility Margin is the same for SJG and ETG gas
utility operations.
SOUTH JERSEY INDUSTRIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
(LOSS)/INCOME (UNAUDITED)(In Thousands Except for
Per Share Data)
| |
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
| |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| Operating
Revenues: |
|
|
|
|
|
|
|
|
Utility |
$ |
181,111 |
|
|
$ |
144,270 |
|
|
$ |
671,330 |
|
|
$ |
546,886 |
|
|
Nonutility |
|
330,320 |
|
|
|
167,558 |
|
|
|
664,679 |
|
|
|
439,242 |
|
|
Total Operating Revenues |
|
511,431 |
|
|
|
311,828 |
|
|
|
1,336,009 |
|
|
|
986,128 |
|
| Operating
Expenses: |
|
|
|
|
|
|
|
|
Cost of Sales - (Excluding depreciation and amortization) |
|
|
|
|
|
|
|
|
- Utility |
|
67,133 |
|
|
|
33,286 |
|
|
|
267,637 |
|
|
|
159,799 |
|
|
- Nonutility |
|
354,237 |
|
|
|
168,209 |
|
|
|
662,001 |
|
|
|
413,270 |
|
|
Operations and Maintenance |
|
62,791 |
|
|
|
62,881 |
|
|
|
141,769 |
|
|
|
132,984 |
|
|
Depreciation |
|
34,181 |
|
|
|
33,031 |
|
|
|
68,138 |
|
|
|
64,843 |
|
|
Impairment Charges |
|
1,897 |
|
|
|
— |
|
|
|
1,897 |
|
|
|
— |
|
|
Energy and Other Taxes |
|
3,338 |
|
|
|
2,812 |
|
|
|
8,113 |
|
|
|
6,795 |
|
|
Total Operating Expenses |
|
523,577 |
|
|
|
300,219 |
|
|
|
1,149,555 |
|
|
|
777,691 |
|
| Operating (Loss)
Income |
|
(12,146 |
) |
|
|
11,609 |
|
|
|
186,454 |
|
|
|
208,437 |
|
| |
|
|
|
|
|
|
|
| Other Income and
Expense |
|
2,891 |
|
|
|
3,592 |
|
|
|
5,494 |
|
|
|
5,660 |
|
| Interest
Charges |
|
(31,561 |
) |
|
|
(31,185 |
) |
|
|
(63,140 |
) |
|
|
(62,644 |
) |
| (Loss) Income Before
Income Taxes |
|
(40,816 |
) |
|
|
(15,984 |
) |
|
|
128,808 |
|
|
|
151,453 |
|
| Income
Taxes |
|
22,067 |
|
|
|
4,702 |
|
|
|
(18,599 |
) |
|
|
(37,067 |
) |
| Equity in Earnings
(Loss) of Affiliated Companies |
|
71 |
|
|
|
(85,378 |
) |
|
|
527 |
|
|
|
(82,248 |
) |
| (Loss) Income from
Continuing Operations |
|
(18,678 |
) |
|
|
(96,660 |
) |
|
|
110,736 |
|
|
|
32,138 |
|
| Loss from Discontinued
Operations - (Net of tax benefit) |
|
(152 |
) |
|
|
(80 |
) |
|
|
(222 |
) |
|
|
(151 |
) |
|
Net (Loss) Income |
|
(18,830 |
) |
|
|
(96,740 |
) |
|
|
110,514 |
|
|
|
31,987 |
|
| Less: Income Attributable
to Noncontrolling Interests |
|
76 |
|
|
|
88 |
|
|
|
211 |
|
|
|
217 |
|
| Net (Loss) Income
Attributable to South Jersey Industries, Inc. |
$ |
(18,906 |
) |
|
$ |
(96,828 |
) |
|
$ |
110,303 |
|
|
$ |
31,770 |
|
| |
|
|
|
|
|
|
|
| Basic Earnings Per
Common Share: |
|
|
|
|
|
|
|
|
Continuing Operations |
$ |
(0.15 |
) |
|
$ |
(0.87 |
) |
|
$ |
0.92 |
|
|
$ |
0.30 |
|
|
Discontinued Operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Net (Loss) Income |
|
(0.15 |
) |
|
|
(0.87 |
) |
|
|
0.92 |
|
|
|
0.30 |
|
| Less: Income Attributable to
Noncontrolling Interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Net (Loss) Income Attributable
to South Jersey Industries, Inc. |
$ |
(0.15 |
) |
|
$ |
(0.87 |
) |
|
$ |
0.92 |
|
|
$ |
0.30 |
|
| |
|
|
|
|
|
|
|
| Average Shares of
Common Stock Outstanding - Basic |
|
122,442 |
|
|
|
110,902 |
|
|
|
120,316 |
|
|
|
105,902 |
|
| |
|
|
|
|
|
|
|
| Diluted Earnings Per
Common Share: |
|
|
|
|
|
|
|
|
Continuing Operations |
$ |
(0.15 |
) |
|
$ |
(0.87 |
) |
|
$ |
0.90 |
|
|
$ |
0.30 |
|
|
Discontinued Operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Net (Loss) Income |
|
(0.15 |
) |
|
|
(0.87 |
) |
|
|
0.90 |
|
|
|
0.30 |
|
| Less: Income Attributable to
Noncontrolling Interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Net (Loss) Income Attributable
to South Jersey Industries, Inc. |
$ |
(0.15 |
) |
|
$ |
(0.87 |
) |
|
$ |
0.90 |
|
|
$ |
0.30 |
|
| |
|
|
|
|
|
|
|
| Average Shares of
Common Stock Outstanding - Diluted |
|
122,442 |
|
|
|
110,902 |
|
|
|
122,887 |
|
|
|
107,389 |
|
SOUTH JERSEY INDUSTRIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)(In Thousands)
| |
Six Months EndedJune 30, |
| |
|
2022 |
|
|
|
2021 |
|
| Net Cash Provided by
Operating Activities |
$ |
323,580 |
|
|
$ |
241,651 |
|
| |
|
|
|
| Cash Flows from
Investing Activities: |
|
|
|
|
Capital Expenditures |
|
(260,757 |
) |
|
|
(232,138 |
) |
|
Investment in Contract Receivables |
|
(11,324 |
) |
|
|
(18,335 |
) |
|
Proceeds from Contract Receivables |
|
6,612 |
|
|
|
12,928 |
|
|
Investment in Affiliates |
|
(40,158 |
) |
|
|
(9,802 |
) |
|
Return of Investment in Affiliates |
|
10,466 |
|
|
|
— |
|
|
Advances to Affiliates |
|
(12,105 |
) |
|
|
(7,924 |
) |
|
Net Repayment of Notes Receivable - Affiliates |
|
— |
|
|
|
890 |
|
|
Divestiture Working Capital Settlement |
|
— |
|
|
|
(267 |
) |
|
Investment in Subsidiary, Net of Cash Acquired |
|
(5,660 |
) |
|
|
(14,672 |
) |
| |
|
|
|
| Net Cash Used in Investing
Activities |
|
(312,926 |
) |
|
|
(269,320 |
) |
| |
|
|
|
| Cash Flows from
Financing Activities: |
|
|
|
|
Net Repayments of Short-Term Credit Facilities |
|
(100 |
) |
|
|
(571,700 |
) |
|
Proceeds from Issuance of Long-Term Debt |
|
— |
|
|
|
460,000 |
|
|
Principal Repayments of Long-Term Debt |
|
(48,176 |
) |
|
|
(100,000 |
) |
|
Payments for Issuance of Long-Term Debt |
|
— |
|
|
|
(12,761 |
) |
|
Dividends on Common Stock |
|
(36,398 |
) |
|
|
(30,453 |
) |
|
Proceeds from Sale of Common Stock |
|
100,380 |
|
|
|
329,772 |
|
|
Payments for the Issuance of Common Stock |
|
— |
|
|
|
(2,300 |
) |
|
Capital Distributions to Noncontrolling Interests in
Subsidiaries |
|
(130 |
) |
|
|
— |
|
|
Capital Contributions of Noncontrolling Interests in
Subsidiaries |
|
43 |
|
|
|
1,213 |
|
| |
|
|
|
| Net Cash Provided by Financing
Activities |
|
15,619 |
|
|
|
73,771 |
|
| |
|
|
|
| Net Increase in Cash,
Cash Equivalents and Restricted Cash |
|
26,273 |
|
|
|
46,102 |
|
| Cash, Cash Equivalents
and Restricted Cash at Beginning of Period |
|
29,440 |
|
|
|
41,831 |
|
| |
|
|
|
| Cash, Cash Equivalents
and Restricted Cash at End of Period |
$ |
55,713 |
|
|
$ |
87,933 |
|
SOUTH JERSEY INDUSTRIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)(In Thousands)
| |
June 30,2022 |
|
December 31,2021 |
| Assets |
|
|
|
| Property, Plant and
Equipment: |
|
|
|
|
Utility Plant, at original cost |
$ |
5,870,464 |
|
|
$ |
5,682,805 |
|
|
Accumulated Depreciation |
|
(1,005,538 |
) |
|
|
(975,619 |
) |
|
Nonutility Property and Equipment, at cost |
|
287,314 |
|
|
|
240,503 |
|
|
Accumulated Depreciation |
|
(38,630 |
) |
|
|
(35,367 |
) |
| |
|
|
|
|
Property, Plant and Equipment - Net |
|
5,113,610 |
|
|
|
4,912,322 |
|
| |
|
|
|
|
Investments: |
|
|
|
|
Available-for-Sale Securities |
|
37 |
|
|
|
37 |
|
|
Restricted |
|
2,241 |
|
|
|
686 |
|
|
Investment in Affiliates |
|
70,264 |
|
|
|
38,509 |
|
| |
|
|
|
|
Total Investments |
|
72,542 |
|
|
|
39,232 |
|
| |
|
|
|
| Current
Assets: |
|
|
|
|
Cash and Cash Equivalents |
|
53,472 |
|
|
|
28,754 |
|
|
Accounts Receivable |
|
378,095 |
|
|
|
343,835 |
|
|
Unbilled Revenues |
|
23,012 |
|
|
|
87,357 |
|
|
Provision for Uncollectibles |
|
(50,876 |
) |
|
|
(41,763 |
) |
|
Notes Receivable - Affiliates |
|
5,258 |
|
|
|
5,695 |
|
|
Natural Gas in Storage, average cost |
|
69,615 |
|
|
|
59,744 |
|
|
Materials and Supplies, average cost |
|
1,633 |
|
|
|
1,053 |
|
|
Prepaid Taxes |
|
43,699 |
|
|
|
33,977 |
|
|
Derivatives - Energy Related Assets |
|
157,217 |
|
|
|
95,041 |
|
|
Other Prepayments and Current Assets |
|
27,490 |
|
|
|
25,269 |
|
| |
|
|
|
|
Total Current Assets |
|
708,615 |
|
|
|
638,962 |
|
| |
|
|
|
| Regulatory and Other
Noncurrent Assets: |
|
|
|
|
Regulatory Assets |
|
643,014 |
|
|
|
672,416 |
|
|
Derivatives - Energy Related Assets |
|
61,923 |
|
|
|
22,488 |
|
|
Notes Receivable - Affiliates |
|
94,969 |
|
|
|
64,254 |
|
|
Contract Receivables |
|
49,381 |
|
|
|
45,339 |
|
|
Goodwill |
|
706,960 |
|
|
|
706,960 |
|
|
Other |
|
209,587 |
|
|
|
206,699 |
|
| |
|
|
|
|
Total Regulatory and Other Noncurrent Assets |
|
1,765,834 |
|
|
|
1,718,156 |
|
| |
|
|
|
|
Total Assets |
$ |
7,660,601 |
|
|
$ |
7,308,672 |
|
| |
June 30,2022 |
|
December 31,2021 |
| Capitalization and
Liabilities |
|
|
|
| Equity: |
|
|
|
|
Common Stock |
$ |
153,081 |
|
|
$ |
146,675 |
|
|
Premium on Common Stock |
|
1,654,503 |
|
|
|
1,559,060 |
|
|
Treasury Stock (at par) |
|
(316 |
) |
|
|
(287 |
) |
|
Accumulated Other Comprehensive Loss |
|
(26,712 |
) |
|
|
(26,729 |
) |
|
Retained Earnings |
|
346,374 |
|
|
|
310,433 |
|
|
Total South Jersey Industries, Inc. Equity |
|
2,126,930 |
|
|
|
1,989,152 |
|
|
Noncontrolling Interests |
|
10,413 |
|
|
|
10,289 |
|
|
Total Equity |
|
2,137,343 |
|
|
|
1,999,441 |
|
| |
|
|
|
| Long-Term
Debt |
|
3,177,991 |
|
|
|
3,189,009 |
|
| |
|
|
|
|
Total Capitalization |
|
5,315,334 |
|
|
|
5,188,450 |
|
| |
|
|
|
| Current
Liabilities: |
|
|
|
|
Notes Payable |
|
333,900 |
|
|
|
334,000 |
|
|
Current Portion of Long-Term Debt |
|
31,076 |
|
|
|
66,076 |
|
|
Accounts Payable |
|
429,986 |
|
|
|
330,164 |
|
|
Customer Deposits and Credit Balances |
|
32,136 |
|
|
|
40,355 |
|
|
Environmental Remediation Costs |
|
39,654 |
|
|
|
40,905 |
|
|
Taxes Accrued |
|
4,559 |
|
|
|
4,937 |
|
|
Derivatives - Energy Related Liabilities |
|
146,919 |
|
|
|
60,002 |
|
| Deferred Contract
Revenues |
|
356 |
|
|
|
753 |
|
|
Derivatives - Other Current |
|
320 |
|
|
|
568 |
|
|
Dividends Payable |
|
37,964 |
|
|
|
— |
|
|
Interest Accrued |
|
22,051 |
|
|
|
23,611 |
|
|
Other Current Liabilities |
|
40,478 |
|
|
|
54,311 |
|
| |
|
|
|
|
Total Current Liabilities |
|
1,119,399 |
|
|
|
955,682 |
|
| |
|
|
|
| Deferred Credits and
Other Noncurrent Liabilities: |
|
|
|
|
Deferred Income Taxes - Net |
|
224,421 |
|
|
|
198,901 |
|
|
Environmental Remediation Costs |
|
124,984 |
|
|
|
125,176 |
|
|
Asset Retirement Obligations |
|
233,061 |
|
|
|
229,030 |
|
|
Derivatives - Energy Related Liabilities |
|
50,446 |
|
|
|
16,079 |
|
|
Derivatives - Other Noncurrent |
|
4,031 |
|
|
|
7,432 |
|
|
Regulatory Liabilities |
|
408,942 |
|
|
|
398,951 |
|
|
Other |
|
179,983 |
|
|
|
188,971 |
|
| |
|
|
|
|
Total Deferred Credits and Other Noncurrent Liabilities |
|
1,225,868 |
|
|
|
1,164,540 |
|
| |
|
|
|
| Commitments and
Contingencies (Note 11) |
|
|
|
| |
|
|
|
|
Total Capitalization and Liabilities |
$ |
7,660,601 |
|
|
$ |
7,308,672 |
|
South Jersey Industries (NYSE:SJI)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
South Jersey Industries (NYSE:SJI)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024
