SJI Reports Fourth Quarter and 2021 Results
SJI reported its 2021 financial results, revealing GAAP earnings of $0.80 per diluted share, down from $1.62 in 2020. Economic earnings stood at $178 million, a 9.2% increase from 2020. The company announced an agreement to be acquired by the Infrastructure Investments Fund for $36.00 per share, a 46.3% premium over the recent trading price. SJI has experienced strong customer growth and made significant investments in infrastructure and clean energy initiatives. Due to the acquisition, SJI's earnings call for Q4 2021 has been cancelled, and financial guidance for 2022 will not be provided.
- Economic earnings increased by $15 million or 9.2% in 2021.
- SJI's dividend was raised to an annual $1.24 per share, marking 23 consecutive years of increases.
- The acquisition agreement reflects a 46.3% premium to the stock's recent trading price.
- GAAP earnings declined from $1.62 to $0.80 per diluted share in 2021.
- Total GAAP earnings for 2021 were $88.5 million, down from $157.3 million in 2020.
- Non-utility segment reported a loss of $52.7 million compared to a profit of $45.9 million in 2020.
Earnings Conference Call Cancelled Given Agreement to be Acquired by the Infrastructure Investments Fund
FOLSOM, NJ , Feb. 24, 2022 (GLOBE NEWSWIRE) --
| Investor Contact: | |
| Daniel Fidell | |
| 609-561-9000 x7027 | |
| dfidell@sjindustries.com | |
| Media Contact: | |
| Dominick DiRocco | |
| 609-561-9000 x4262 | |
| ddirocco@sjindustries.com |
SJI Reports Fourth Quarter and 2021 Results
Earnings Conference Call Cancelled Given Agreement
to be Acquired by the Infrastructure Investments Fund
FOLSOM, NJ (February 24, 2022) - SJI (NYSE: SJI) today reported operating results for the fourth quarter and full year periods ended December 31, 2021. Highlights include:
- 2021 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 results included$0.13 per diluted share in non-recurring gains - Q4 2021 GAAP earnings
$0.72 per diluted share compared to$0.69 per diluted share in 2020 Economic Earnings$0.58 per diluted share compared to$0.62 per diluted share in 2020 - 2021 economic earnings increased
$15.0 million or9.2% , despite ongoing challenge of pandemic, driven by increased profitability from core operating entities SJI Utilities and SJI Energy Enterprises - 2021 highlights include continued strong customer growth and infrastructure modernization, advancement of key regulatory initiatives and clean energy investments, and significant balance sheet improvement
- Dividend increased to indicated annual
$1.24 per share, reflecting 23 consecutive years of rising dividends - Today announced definitive agreement under which the Infrastructure Investments Fund (IIF), an investment vehicle advised by J.P. Morgan Investment Management Inc. will purchase SJI for
$36.00 per share in cash, reflecting an enterprise value of approximately$8.1 billion
"I'm pleased to report that 2021 results achieved the higher end of the expectations we outlined at our Investor Day last May, driven by solid growth across our core operating businesses," said Michael Renna, SJI President and Chief Executive Officer. “As energy markets across the U.S. and New Jersey accelerate the transition toward low carbon and renewable energy, the SJI Board determined that now is the opportune time to join forces with IIF, a trusted partner and long-term investor in utility and renewable energy companies. Together we will be well positioned to execute on our clean energy and decarbonization initiatives in support of the environmental goals of our State and region,” added Renna.
| Twelve Months Ended December 31, 2021 | Twelve Months Ended December 31, 2020 | |||||||||||||||||||||||||
| GAAP | GAAP | Economic | Economic | GAAP | GAAP | Economic | Economic | |||||||||||||||||||
| Earnings | EPS | Earnings | EPS | Earnings | EPS | Earnings | EPS | |||||||||||||||||||
| Utility | $ | 178.4 | $ | 1.62 | $ | 170.5 | $ | 1.55 | $ | 156.1 | $ | 1.61 | $ | 157.3 | $ | 1.62 | ||||||||||
| Non-Utility | $ | (52.7 | ) | $ | (0.49 | ) | $ | 44.3 | $ | 0.40 | $ | 45.9 | $ | 0.47 | $ | 45.9 | $ | 0.47 | ||||||||
| Other | $ | (37.1 | ) | $ | (0.34 | ) | $ | (36.8 | ) | $ | (0.33 | ) | $ | (44.7 | ) | $ | (0.46 | ) | $ | (40.3 | ) | $ | (0.41 | ) | ||
| Total - Continuing Ops | $ | 88.5 | $ | 0.80 | $ | 178.0 | $ | 1.62 | $ | 157.3 | $ | 1.62 | $ | 163.0 | $ | 1.68 | ||||||||||
| Average Diluted Shares | 110.1 | 110.1 | 97.0 | 97.0 | ||||||||||||||||||||||
| *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. | ||||||||||||||||||||||||||
2021 Results
For the twelve-month period ended December 31, 2021, SJI reported consolidated GAAP earnings of
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 twelve-month period ended December 31, 2021, economic earnings were
UTILITY
SJI's utility entities include the regulated operations of South Jersey Gas (SJG) and Elizabethtown Gas (ETG). 2021 GAAP earnings were
South Jersey Gas
Performance. 2021 GAAP earnings were
Customer Growth. SJG added approximately 6,400 new customers over the last 12 months and now serves approximately 411,000 customers. SJG’s
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. SJG's Accelerated Infrastructure Replacement Program (AIRP II) authorized investment of
IIP Proposal. SJG has filed a request with the New Jersey Board of Public Utilities (NJBPU) for approval of an Infrastructure Investment Program (IIP) that would accelerate planned capital expenditures to enhance the delivery of safe, reliable, affordable natural gas, create jobs, and support the State’s environmental goals. Under the proposed five-year program, SJG will invest approximately
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 NJBPU in April 2021, authorizes investment of
Redundancy. In August 2021, the NJBPU approved SJG's engineering and route proposal to construct system upgrades in support of a planned 2.0+ Bcf liquefied natural gas (LNG) facility. This project is critically important to ensure service is not interrupted to our customers in the event of a significant outage, either behind our city gate, or on one of the two interstate pipelines that serve the SJG system. Pre-construction engineering and permitting of the project has commenced. We also continue to explore alternatives that will allow for a secondary supply of gas needed to create reliability and resiliency for ~140,000 customers in Atlantic and Cape May counties.
Elizabethtown Gas
Performance. 2021 GAAP earnings were
Customer Growth. ETG added approximately 4,000 new customers over the last 12 months and now serves approximately 305,000 customers. ETG’s
Infrastructure Modernization. ETG's Infrastructure Investment Plan (IIP) authorizes investment of
Energy Efficiency. ETG's energy efficiency program, as approved by the NJBPU in April 2021, authorizes investment of
Base Rate Case. In December 2021, ETG filed a petition with the NJBPU requesting an increase of
NON-UTILITY
SJI's non-utility entities include Energy Management, Energy Production and Midstream. 2021 GAAP earnings were
Energy Management
Performance. Energy Management includes Wholesale Services (Fuel Management/Marketing) and Retail Services (Account Services/Energy Consulting). 2021 GAAP earnings were
- Wholesale Services 2021 GAAP earnings were
$37.3 million compared with$25.6 million in 2020. Economic earnings were$33.5 million compared with$25.1 million in 2020, primarily reflecting improved asset optimization opportunities. For comparative purposes, note that 2020 results included a one-time$2.9 million after-tax refund from a third-party supplier. - Retail Services 2021 GAAP earnings were
$2.8 million compared with$1.2 million in 2020. Economic earnings were$3.5 million compared with$0.9 million in 2020, reflecting improved contributions from consulting activities, meter reading and appliance service contract fees.
Energy Production
Performance. Energy Production includes renewable (fuel cell/solar) and decarbonization (REV/RNG development) investments. 2021 GAAP earnings were (
- Renewables 2021 GAAP earnings were (
$7.5) million compared to$14.9 million in 2020, reflecting an other-than-temporary impairment charge taken on the Company's equity investment in Energenic. Economic earnings were$5.4 million compared to$15.7 million in 2020, primarily reflecting income associated with past fuel cell and solar investments and the timing of recognition of investment tax credits (ITC) from current investments. SJI invested$46.4 million net in renewable projects in 2021, recognizing approximately$3.9 million in ITC. Development of our 5.0 MW fuel cell project in Bronx, New York continues to advance and is expected to become operational in Q2 2022. - Decarbonization 2021 GAAP/economic earnings were
$0.4 million , reflecting contributions from SJI's35% equity interest in REV partially offset by new business investment. RNG development activities at eight dairy farms is proceeding on track, with in-service anticipated later this year.
Midstream
Performance. Midstream includes SJI's
OTHER
Performance. Other includes interest on debt, including debt associated with past acquisitions. 2021 GAAP earnings were
Fourth Quarter 2021 Results
| Three Months Ended December 31, 2021 | Three Months Ended December 31, 2020 | |||||||||||||||||||||||||
| GAAP | GAAP | Economic | Economic | GAAP | GAAP | Economic | Economic | |||||||||||||||||||
| Earnings | EPS | Earnings | EPS | Earnings | EPS | Earnings | EPS | |||||||||||||||||||
| Utility | $ | 62.8 | $ | 0.55 | $ | 62.8 | $ | 0.55 | $ | 63.8 | $ | 0.63 | $ | 63.8 | $ | 0.63 | ||||||||||
| Non-Utility | $ | 28.4 | $ | 0.25 | $ | 12.1 | $ | 0.11 | $ | 18.7 | $ | 0.19 | $ | 12.9 | $ | 0.13 | ||||||||||
| Other | $ | (9.1 | ) | $ | (0.08 | ) | $ | (9.0 | ) | $ | (0.08 | ) | $ | (13.4 | ) | $ | (0.13 | ) | $ | (13.8 | ) | $ | (0.14 | ) | ||
| Total - Continuing Ops | $ | 82.2 | $ | 0.72 | $ | 66.0 | $ | 0.58 | $ | 69.1 | $ | 0.69 | $ | 63.0 | $ | 0.62 | ||||||||||
| Average Diluted Shares | 113.6 | 113.6 | 100.8 | 100.8 | ||||||||||||||||||||||
| *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. | ||||||||||||||||||||||||||
For the three month period ended December 31, 2021, SJI reported consolidated GAAP earnings of
Economic earnings were
UTILITY
Fourth quarter 2021 GAAP/economic earnings were
- SJG. Fourth Quarter GAAP/economic earnings were
$45.4 million compared with$43.4 million in 2020. Utility margin increased$4.5 million , primarily reflecting customer growth and the roll-in of investments from infrastructure replacement programs. Total expenses increased$2.5 million , primarily reflecting higher depreciation and interest expenses. - ETG. Fourth Quarter GAAP/economic earnings were
$17.4 million compared with$20.4 million in 2020. Utility margin decreased$2.6 million , primarily reflecting timing associated with customer growth and the roll-in of investments from infrastructure replacement programs. Total expenses increased$0.4 million , primarily reflecting higher depreciation and interest expenses.
NON-UTILITY
Fourth quarter 2021 GAAP earnings were
- Energy Management. Fourth quarter 2021 GAAP earnings were
$40.5 million compared with$13.2 million in 2020. Economic earnings were$11.5 million compared with$7.2 million in 2020.- Wholesale Services GAAP earnings were
$39.7 million compared with$12.9 million in 2020. Economic earnings were$10.2 million compared with$6.8 million in 2020, primarily reflecting improved asset optimization opportunities. - Retail Services GAAP earnings were
$0.7 million compared with$0.2 million in 2020. Economic earnings were$1.4 million compared with$0.3 million in 2020, primarily reflecting improved contributions from consulting activities.
- Wholesale Services GAAP earnings were
- Energy Production. Fourth quarter 2021 GAAP earnings were
$(11.7) million compared with$4.6 million in 2020. Economic earnings were$0.9 million compared with$4.8 million in 2020.- Renewables GAAP earnings were (
$11.2) million compared with$4.6 million in 2020, reflecting an other-than-temporary impairment charge taken on the Company's equity investment in Energenic. Economic earnings were$1.4 million compared with$4.8 million in 2020, reflecting income associated with past fuel cell and solar investments and the timing of recognition of ITC's from current investments. - Decarbonization GAAP/economic earnings were
$(0.5) million , reflecting contributions from SJI's35% equity interest in REV offset by initial operating costs and new business investments.
- Renewables GAAP earnings were (
- Midstream. Fourth quarter 2021 GAAP/economic earnings were
$(0.3) million compared with$0.9 million in 2020, reflecting the absence of AFUDC related to the project.
OTHER
Fourth quarter 2021 GAAP earnings were
Capital Expenditures and Cash Flow
For the twelve months ended December 31, 2021:
- Net cash provided by operating activities was
$273.1 million compared with$311.6 million in the prior year period, primarily reflecting rate relief at SJG, improved wholesale marketing results and customer growth offset by increased utility remediation costs and a third-party gas supplier refund in 2020. - Net cash used in investing activities was
$645.5 million compared with$507.8 million in the prior year period, primarily reflecting$532.0 million in capital expenditures and$58.4 million in REV, fuel cell and solar investments. - Net cash provided by financing activities was
$360.0 million compared with$209.6 million in the prior year period, primarily reflecting debt and equity issuances partially offset by debt repayment and refinancing.
Balance Sheet
- Equity-to-total capitalization was
35.8% at December 31, 2021 compared with32.2% at December 31, 2020, 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
43.6% at December 31, 2021 compared with39.6% at December 31, 2020. - At December 31, 2021, SJI had total credit facilities of
$1.0 billion , with$653.3 million of available liquidity.
Acquisition
In a separate press release issued today, SJI announced that it has entered into a definitive agreement to be acquired by the Infrastructure Investments Fund, an investment vehicle advised by J.P. Morgan Investment Management Inc. (IIF). The per share purchase price of
Conference Call Cancelled
In light of the announced transaction with IIF, SJI’s previously planned conference call and webcast set for Thursday, February 24 at 11:00am ET to discuss 2021 financial results is cancelled. SJI will not be providing financial guidance for full year 2022 as a result of the pending transaction.
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, 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, should be considered forward-looking statements made in good faith by SJI, as applicable, and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this release, or any other documents, words such as “anticipate,” “believe,” "estimate," “expect,” “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. 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 forward-looking statements. 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 under the heading “Item 1A. Risk Factors” on Form 10-K for the year ended December 31, 2021 and in any other SEC filings made by SJI or SJG during 2020 and 2021 and prior to the filing of this earnings release.
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 and SJG'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 2021, 2020 and 2019 are described in (A)-(G) 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):
| 2021 | 2020 | 2019 | |||||||
| Income from Continuing Operations | $ | 88,514 | $ | 157,297 | $ | 77,189 | |||
| Minus/Plus: | |||||||||
| Unrealized Mark-to-Market (Gains) Losses on Derivatives | (5,567 | ) | (5,145 | ) | 14,546 | ||||
| (Income) Loss Attributable to Noncontrolling Interests | (653 | ) | 42 | — | |||||
| Impairment of Equity Method Investments (A) | 102,872 | — | — | ||||||
| Loss on Property, Plant and Equipment (B) | — | — | 10,745 | ||||||
| Net Losses from a Legal Proceeding in a Pricing Dispute (C) | — | — | 2,336 | ||||||
| Acquisition/Sale Net Costs (D) | 1,438 | 2,174 | 3,468 | ||||||
| Other Costs (E) | (7,855 | ) | 1,983 | 4,179 | |||||
| Income Taxes (F) | (14,897 | ) | 527 | (9,423 | ) | ||||
| Additional Tax Adjustments (G) | 14,176 | 6,081 | — | ||||||
| Economic Earnings | $ | 178,028 | $ | 162,959 | $ | 103,040 | |||
| Earnings per Share from Continuing Operations | $ | 0.80 | $ | 1.62 | $ | 0.84 | |||
| Minus/Plus: | |||||||||
| Unrealized Mark-to-Market (Gains) Losses on Derivatives | (0.05 | ) | (0.05 | ) | 0.16 | ||||
| Impairment of Equity Method Investments (A) | 0.93 | — | — | ||||||
| Loss on Property, Plant and Equipment (B) | — | — | 0.12 | ||||||
| Net Losses from a Legal Proceeding in a Pricing Dispute (C) | — | — | 0.02 | ||||||
| Acquisition/Sale Net Costs (D) | 0.01 | 0.02 | 0.04 | ||||||
| Other Costs (E) | (0.07 | ) | 0.02 | 0.04 | |||||
| Income Taxes (F) | (0.13 | ) | 0.01 | (0.10 | ) | ||||
| Additional Tax Adjustments (G) | 0.13 | 0.06 | — | ||||||
| Economic Earnings per Share | $ | 1.62 | $ | 1.68 | $ | 1.12 | |||
(A) Represents other-than-temporary impairment charges on the Company’s equity method investments in PennEast and Energenic, as well as an other-than-temporary impairment charge recognized by Marina related to the realizability of the outstanding notes receivable, including accrued interest, related to Energenic.
(B) Represents impairment charges taken in 2019 on solar generating facilities along with the agreement to sell MTF and ACB, which were both driven by the expected purchase prices being less than the carrying value of the assets.
(C) Represents net losses, including interest, legal fees and the realized difference in the market value of the commodity (including financial hedges), resulting from a ruling in a legal proceeding related to a pricing dispute between SJI and a gas supplier that began in October 2014.
(D) Represents the following:
- Costs incurred in 2021 to finalize the transactions related to acquiring Bronx Midco and solar projects
- The final working capital payment on the sale of ELK, which was finalized during the first quarter of 2021
- Costs incurred in 2020 to acquire EnerConnex, Annadale, and four solar LLCs
- Gain recorded in 2020 on the step-acquisition of EnerConnex
- Costs incurred and gains/losses recognized in 2020 on the sales of MTF/ACB and ELK
- Costs incurred and gains recognized in 2020 and 2019 on the sale of certain solar assets. The gains pertain to those projects that were not impaired in previous periods.
(E) For 2021, includes a gain recognized by ETG from a UTUA settlement agreement. For 2021, 2020 and 2019, represents severance and other employee separation costs, along with costs incurred to cease operations at landfill gas-to-energy production facilities, including ACLE in 2021.
(F) The income taxes on (A) through (E) above are determined using a combined average statutory tax rate applicable to each period presented.
(G) Represents additional tax adjustments, primarily including
- In 2021, a federal deferred tax asset valuation allowance at SJI related to the impairment charge described in (A)
- In 2020, a state deferred tax valuation allowance at SJI
- In 2020, a one-time tax expense resulting from SJG's stipulation of settlement with the BPU.
Summary of Utility Margin
The following tables summarize Utility Margin for SJG and ETG (in thousands):
SJG:
| 2021 | 2020 | 2019 | |||||
| Utility Margin: | |||||||
| Residential | $ | 251,758 | $ | 217,399 | $ | 213,787 | |
| Commercial and Industrial | 103,740 | 88,684 | 90,489 | ||||
| Cogeneration and Electric Generation | 4,840 | 4,788 | 4,896 | ||||
| Interruptible | 119 | 58 | 88 | ||||
| Off-system Sales & Capacity Release | 2,964 | 1,781 | 3,333 | ||||
| Other Revenues | 1,947 | 1,385 | 1,646 | ||||
| Margin Before Weather Normalization & Decoupling | 365,368 | 314,095 | 314,239 | ||||
| CIP mechanism | 14,982 | 27,965 | (844 | ) | |||
| EET mechanism | 5,954 | 5,999 | 4,489 | ||||
| Utility Margin (C) | $ | 386,304 | $ | 348,059 | $ | 317,884 | |
ETG:
| 2021 | 2020 | 2019 | ||||||
| Utility Margin: | ||||||||
| Residential | 144,688 | $ | 139,230 | $ | 110,519 | |||
| Commercial & Industrial | 88,912 | 86,851 | 63,605 | |||||
| Regulatory Rider Mechanisms | (19,650 | ) | (13,690 | ) | 1,746 | |||
| Utility Margin** | $ | 213,950 | $ | 212,391 | $ | 175,870 | ||
*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 SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except for Per Share Data)
| Year Ended December 31, | |||||||||||
| 2021 | 2020 | 2019 | |||||||||
| Operating Revenues: | |||||||||||
| Utility | $ | 958,383 | $ | 918,428 | $ | 896,874 | |||||
| Nonutility | 1,033,613 | 622,955 | 731,752 | ||||||||
| Total Operating Revenues | 1,991,996 | 1,541,383 | 1,628,626 | ||||||||
| Operating Expenses: | |||||||||||
| Cost of Sales - (Excluding depreciation and amortization) | |||||||||||
| - Utility | 296,356 | 297,094 | 351,284 | ||||||||
| - Nonutility | 948,167 | 561,841 | 680,683 | ||||||||
| Operations and Maintenance | 265,140 | 272,171 | 276,093 | ||||||||
| Impairment Charges | — | — | 10,745 | ||||||||
| Depreciation | 131,778 | 118,715 | 99,753 | ||||||||
| Energy and Other Taxes | 1,435 | 11,918 | 11,996 | ||||||||
| Net Gain on Sales of Assets | — | (2,578 | ) | (3,133 | ) | ||||||
| Total Operating Expenses | 1,642,876 | 1,259,161 | 1,427,421 | ||||||||
| Operating Income | 349,120 | 282,222 | 201,205 | ||||||||
| Other Income and Expense | 4,592 | 7,979 | 4,208 | ||||||||
| Interest Charges | (127,130 | ) | (118,534 | ) | (114,477 | ) | |||||
| Income Before Income Taxes | 226,582 | 171,667 | 90,936 | ||||||||
| Income Taxes | (47,107 | ) | (22,664 | ) | (21,061 | ) | |||||
| Equity in (Losses) Earnings of Affiliated Companies | (90,961 | ) | 8,294 | 7,314 | |||||||
| Income from Continuing Operations | 88,514 | 157,297 | 77,189 | ||||||||
| Income (Loss) from Discontinued Operations - (Net of taxes) | 51 | (255 | ) | (272 | ) | ||||||
| Net Income | 88,565 | 157,042 | 76,917 | ||||||||
| Subtract/Add: Income (Loss) Attributable to Noncontrolling Interests | 474 | (42 | ) | — | |||||||
| Net Income Attributable to South Jersey Industries, Inc. | $ | 88,091 | $ | 157,084 | $ | 76,917 | |||||
| Basic Earnings per Common Share: | |||||||||||
| Continuing Operations | $ | 0.81 | $ | 1.62 | $ | 0.84 | |||||
| Discontinued Operations | — | — | — | ||||||||
| Net Income | 0.81 | 1.62 | 0.84 | ||||||||
| Subtract/Add: Income (Loss) Attributable to Noncontrolling Interests | — | — | — | ||||||||
| Net Income Attributable to South Jersey Industries, Inc. | $ | 0.81 | $ | 1.62 | $ | 0.84 | |||||
| Average Shares of Common Stock Outstanding - Basic | 109,269 | 96,854 | 92,130 | ||||||||
| Diluted Earnings per Common Share: | |||||||||||
| Continuing Operations | $ | 0.80 | $ | 1.62 | $ | 0.84 | |||||
| Discontinued Operations | — | — | — | ||||||||
| Net Income | 0.80 | 1.62 | 0.84 | ||||||||
| Subtract/Add: Income (Loss) Attributable to Noncontrolling Interests | — | — | — | ||||||||
| Net Income Attributable to South Jersey Industries, Inc. | $ | 0.80 | $ | 1.62 | $ | 0.84 | |||||
| Average Shares of Common Stock Outstanding - Diluted | 110,120 | 96,995 | 92,253 | ||||||||
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| Year Ended December 31, | |||||||||||
| 2021 | 2020 | 2019 | |||||||||
| Cash Flows from Operating Activities: | |||||||||||
| Net Income | $ | 88,565 | $ | 157,042 | $ | 76,917 | |||||
| (Income) Loss from Discontinued Operations - Net of taxes | (51 | ) | 255 | 272 | |||||||
| Income from Continuing Operations | 88,514 | 157,297 | 77,189 | ||||||||
| Adjustments to Reconcile Income from Continuing Operations to Net Cash Provided by Operating Activities: | |||||||||||
| Net Gain on Sales of Assets | — | (2,578 | ) | (3,133 | ) | ||||||
| Step Acquisition Gain | — | (1,971 | ) | 0 | |||||||
| Payment of Swap Termination | — | (8,173 | ) | — | |||||||
| Gain on Insurance Proceeds | — | — | (794 | ) | |||||||
| Impairment Charges | — | — | 10,745 | ||||||||
| Impairment on Investments in Equity Method Investees | 102,872 | — | — | ||||||||
| Gain from Tax Settlement | (10,960 | ) | — | — | |||||||
| Depreciation and Amortization | 211,652 | 170,647 | 133,385 | ||||||||
| Net Unrealized (Gain) Loss on Derivatives - Energy Related | (5,567 | ) | (385 | ) | 11,748 | ||||||
| Unrealized (Gain) Loss on Derivatives - Other | — | (4,760 | ) | 2,798 | |||||||
| Provision for Uncollectibles | 10,159 | 9,558 | 10,432 | ||||||||
| CIP Receivable/Payable | 3,237 | (27,807 | ) | 922 | |||||||
| Deferred Gas Costs and Energy Related Derivatives - Net of Recoveries | (29,000 | ) | 44,450 | 16,654 | |||||||
| Stock-Based Compensation Expense | 5,966 | 5,797 | 5,209 | ||||||||
| Deferred and Noncurrent Income Taxes - Net | 47,342 | 21,841 | 21,543 | ||||||||
| Environmental Remediation Costs - Net of Recoveries | (34,057 | ) | (19,325 | ) | (49,180 | ) | |||||
| Gas Plant Cost of Removal | (13,847 | ) | (16,777 | ) | (18,823 | ) | |||||
| Dividends Received from Equity Method Investments | 2,849 | 1,714 | 1,770 | ||||||||
| Income from Equity Method Investments | (5,467 | ) | (8,294 | ) | (7,314 | ) | |||||
| Societal Benefit Costs Regulatory Asset and Liabilities | (21,915 | ) | (23,068 | ) | (24,503 | ) | |||||
| Excess Deferred Income Tax | (21,901 | ) | (14,668 | ) | (8,505 | ) | |||||
| Changes in: | |||||||||||
| Accounts Receivable | (85,911 | ) | (48,576 | ) | 92,614 | ||||||
| Accounts Payable and Other Accrued Liabilities | 80,715 | 49,981 | (137,717 | ) | |||||||
| Other Assets and Liabilities | (51,570 | ) | 26,733 | (13,988 | ) | ||||||
| Cash Flows from Discontinued Operations | 2 | 3 | — | ||||||||
| Net Cash Provided by Operating Activities | 273,113 | 311,639 | 121,052 | ||||||||
| Cash Flows from Investing Activities: | |||||||||||
| Capital Expenditures | (532,026 | ) | (486,451 | ) | (504,212 | ) | |||||
| Acquisition-related Working Capital Settlement | (267 | ) | — | 15,600 | |||||||
| Cash Paid for Acquisitions, Net of Cash Acquired | — | (21,613 | ) | (3,952 | ) | ||||||
| Proceeds from Business Dispositions and Sale of Property, Plant and Equipment | — | 119,948 | 26,938 | ||||||||
| Investment in Contract Receivables | (22,215 | ) | (24,449 | ) | (15,718 | ) | |||||
| Proceeds from Contract Receivables | 13,969 | 12,904 | 10,301 | ||||||||
| Proceeds from Company-Owned Life Insurance | — | — | 1,694 | ||||||||
| Investment in Subsidiary, Net of Cash Acquired | (44,356 | ) | (79,181 | ) | — | ||||||
| Investment in Affiliates | (14,039 | ) | (12,139 | ) | (4,866 | ) | |||||
| Net Advances on Notes Receivable - Affiliates | (46,563 | ) | (19,301 | ) | (3,433 | ) | |||||
| Net Repayment of Notes Receivable - Affiliates | — | 2,531 | — | ||||||||
| Net Cash Used in Investing Activities | (645,497 | ) | (507,751 | ) | (477,648 | ) | |||||
| Cash Flows from Financing Activities: | |||||||||||
| Net (Repayments of) Borrowings from Short-Term Credit Facilities | (262,400 | ) | (252,300 | ) | 578,200 | ||||||
| Proceeds from Issuance of Long-Term Debt | 460,000 | 1,050,000 | 429,657 | ||||||||
| Payments for Issuance of Long-Term Debt | (17,632 | ) | (8,191 | ) | (2,744 | ) | |||||
| Principal Repayments of Long-Term Debt | (117,909 | ) | (667,909 | ) | (733,909 | ) | |||||
| Dividends on Common Stock | (133,336 | ) | (114,643 | ) | (106,938 | ) | |||||
| Proceeds from Sale of Common Stock | 429,772 | 200,000 | 189,032 | ||||||||
| Payments for the Issuance of Common Stock | (2,322 | ) | (2,409 | ) | — | ||||||
| Capital Contributions of Noncontrolling Interests in Subsidiary | 3,820 | 6,037 | — | ||||||||
| Other | — | (1,023 | ) | — | |||||||
| Net Cash Provided by Financing Activities | 359,993 | 209,562 | 353,298 | ||||||||
| Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | (12,391 | ) | 13,450 | (3,298 | ) | ||||||
| Cash, Cash Equivalents and Restricted Cash at Beginning of Year | 41,831 | 28,381 | 31,679 | ||||||||
| Cash, Cash Equivalents and Restricted Cash at End of Year | $ | 29,440 | $ | 41,831 | $ | 28,381 | |||||
| Supplemental Disclosures of Cash Flow Information | |||||||||||
| Cash paid (received) during the year for: | |||||||||||
| Interest (Net of Amounts Capitalized) | $ | 122,070 | $ | 108,901 | $ | 114,015 | |||||
| Income Taxes (Net of Refunds) | $ | (301 | ) | $ | (4,336 | ) | $ | (10,639 | ) | ||
| Supplemental Disclosures of Non-Cash Investing Activities | |||||||||||
| Capital Expenditures acquired on account but unpaid as of year-end | $ | 36,389 | $ | 37,616 | $ | 54,321 | |||||
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
| 2021 | 2020 | ||||||
| Assets | |||||||
| Property, Plant and Equipment: | |||||||
| Utility Plant, at original cost | $ | 5,682,805 | $ | 5,265,661 | |||
| Accumulated Depreciation | (975,619 | ) | (914,122 | ) | |||
| Nonutility Property and Equipment, at cost | 240,503 | 147,764 | |||||
| Accumulated Depreciation | (35,367 | ) | (35,069 | ) | |||
| Property, Plant and Equipment - Net | 4,912,322 | 4,464,234 | |||||
| Investments: | |||||||
| Available-for-Sale Securities | 37 | 32 | |||||
| Restricted | 686 | 7,786 | |||||
| Investment in Affiliates | 38,509 | 106,230 | |||||
| Total Investments | 39,232 | 114,048 | |||||
| Current Assets: | |||||||
| Cash and Cash Equivalents | 28,754 | 34,045 | |||||
| Accounts Receivable | 343,835 | 278,723 | |||||
| Unbilled Revenues | 87,357 | 85,423 | |||||
| Provision for Uncollectibles | (41,763 | ) | (30,582 | ) | |||
| Notes Receivable - Affiliate | 5,695 | 2,847 | |||||
| Natural Gas in Storage, average cost | 59,744 | 39,440 | |||||
| Materials and Supplies, average cost | 1,053 | 2,561 | |||||
| Prepaid Taxes | 33,977 | 23,851 | |||||
| Derivatives - Energy Related Assets | 95,041 | 41,439 | |||||
| Other Prepayments and Current Assets | 25,269 | 29,081 | |||||
| Total Current Assets | 638,962 | 506,828 | |||||
| Regulatory and Other Noncurrent Assets: | |||||||
| Regulatory Assets | 672,416 | 673,992 | |||||
| Derivatives - Energy Related Assets | 22,488 | 6,935 | |||||
| Notes Receivable - Affiliate | 64,254 | 31,073 | |||||
| Contract Receivables | 45,339 | 41,428 | |||||
| Goodwill | 706,960 | 706,960 | |||||
| Other | 206,699 | 143,650 | |||||
| Total Regulatory and Other Noncurrent Assets | 1,718,156 | 1,604,038 | |||||
| Total Assets | $ | 7,308,672 | $ | 6,689,148 | |||
| 2021 | 2020 | ||||||
| Capitalization and Liabilities | |||||||
| Equity: | |||||||
| Common Stock | $ | 146,675 | $ | 125,740 | |||
| Premium on Common Stock | 1,559,060 | 1,218,000 | |||||
| Treasury Stock (at par) | (287 | ) | (321 | ) | |||
| Accumulated Other Comprehensive Loss | (26,729 | ) | (38,216 | ) | |||
| Retained Earnings | 310,433 | 355,678 | |||||
| Total South Jersey Industries, Inc. Equity | 1,989,152 | 1,660,881 | |||||
| Noncontrolling Interests | 10,289 | 5,995 | |||||
| Total Equity | 1,999,441 | 1,666,876 | |||||
| Long-Term Debt | 3,189,009 | 2,776,400 | |||||
| Total Capitalization | 5,188,450 | 4,443,276 | |||||
| Current Liabilities: | |||||||
| Notes Payable | 334,000 | 596,400 | |||||
| Current Portion of Long-Term Debt | 66,076 | 142,801 | |||||
| Accounts Payable | 330,164 | 256,589 | |||||
| Customer Deposits and Credit Balances | 40,355 | 35,899 | |||||
| Environmental Remediation Costs | 40,905 | 45,265 | |||||
| Taxes Accrued | 4,937 | 6,025 | |||||
| Derivatives - Energy Related Liabilities | 60,002 | 27,006 | |||||
| Derivatives - Other Current | 568 | 659 | |||||
| Deferred Contract Revenues | 753 | 479 | |||||
| Interest Accrued | 23,611 | 21,140 | |||||
| Other Current Liabilities | 54,311 | 31,369 | |||||
| Total Current Liabilities | 955,682 | 1,163,632 | |||||
| Deferred Credits and Other Noncurrent Liabilities: | |||||||
| Deferred Income Taxes | 198,901 | 149,534 | |||||
| Environmental Remediation Costs | 125,176 | 148,310 | |||||
| Asset Retirement Obligations | 229,030 | 202,092 | |||||
| Derivatives - Energy Related Liabilities | 16,079 | 4,947 | |||||
| Derivatives - Other Noncurrent | 7,432 | 9,279 | |||||
| Regulatory Liabilities | 398,951 | 420,577 | |||||
| Other | 188,971 | 147,501 | |||||
| Total Deferred Credits and Other Noncurrent Liabilities | 1,164,540 | 1,082,240 | |||||
| Commitments and Contingencies (Note 15) | |||||||
| Total Capitalization and Liabilities | $ | 7,308,672 | $ | 6,689,148 | |||
FAQ
What were SJI's GAAP earnings for 2021?
What is the acquisition price for SJI by the Infrastructure Investments Fund?
When is the expected closing date for the acquisition of SJI?
Why was SJI's earnings call cancelled?
Did SJI provide financial guidance for 2022?
