SJI Reports Third Quarter 2021 Results Reaffirms Guidance
SJI announced its third quarter 2021 results, reporting a GAAP loss of $(25.8) million, or $(0.23) per share, compared to a loss of $(10.3) million in Q3 2020. Year-to-date GAAP earnings fell to $6.3 million from $88.2 million in 2020. Economic earnings for Q3 were $(18.8) million versus $(6.0) million in the previous year. Despite this, the company reaffirmed its 2021 economic earnings guidance of $1.55-$1.65 per diluted share, with ongoing clean energy projects and utility investments aimed at enhancing service reliability for over 700,000 customers.
- Customer growth of approximately 7,600 new customers in the last 12 months, bringing total to about 409,000.
- Infrastructure upgrades, with $69 million expected to roll into rates by January 2022.
- Continuous progress on clean energy investments, including the Bronx fuel cell project and RNG production at eight dairy farms.
- Q3 2021 GAAP earnings fell to $(25.8) million, significantly worse than $(10.3) million in Q3 2020.
- Year-to-date GAAP earnings dropped to $6.3 million from $88.2 million in 2020.
- Non-utility GAAP earnings were $(81.2) million, down from $27.2 million in 2020.
FOLSOM, NJ , Nov. 03, 2021 (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 Third Quarter 2021 Results
Reaffirms Guidance
FOLSOM, NJ (November 3, 2021) - SJI (NYSE: SJI) today reported operating results for the third quarter and year-to-date (YTD) periods ended September 30, 2021. Highlights include:
- Q3 2021 GAAP earnings
$(0.23) per diluted share compared to$(0.10) per diluted share in 2020 Economic Earnings*$(0.17) per diluted share compared to$(0.06) per diluted share in 2020 - YTD 2021 GAAP earnings
$0.06 per diluted share compared to$0.92 per diluted share in 2020 Economic Earnings$1.02 per diluted share compared to$1.04 per diluted share in 2020 - Key initiatives advancing -- Pre-construction engineering and permitting of LNG redundancy project has commenced; SJG Infrastructure Investment Program (IIP) proposal progressing toward resolution
- Clean Energy investments on track -- Bronx fuel cell project under development; RNG production at eight dairy farms progressing for in-service in 2022
- Reaffirming 2021 economic earnings guidance of
$1.55 -$1.65 per diluted share
"Our utility and non-utility businesses continue to perform very well and we remain on track to achieve our financial goals in 2021," said Mike Renna, SJI President and Chief Executive Officer. "Our regulatory initiatives and clean energy investments targeting enhanced infrastructure safety, reliability and decarbonization for the benefit of our more than 700,000 New Jersey customers and our region continue to advance. My thanks, as always, to our entire team for their exceptional work and continued dedication to our mission," added Renna.
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | |||||||||||||||||||||||||
| GAAP | GAAP | Economic | Economic | GAAP | GAAP | Economic | Economic | |||||||||||||||||||
| Earnings | EPS | Earnings | EPS | Earnings | EPS | Earnings | EPS | |||||||||||||||||||
| Utility | $ | (9.4 | ) | $ | (0.08 | ) | $ | (17.2 | ) | $ | (0.15 | ) | $ | (18.4 | ) | $ | (0.18 | ) | $ | (18.4 | ) | $ | (0.18 | ) | ||
| Non-Utility | $ | (6.8 | ) | $ | (0.06 | ) | $ | 8.1 | $ | 0.07 | $ | 17.5 | $ | 0.17 | $ | 21.6 | $ | 0.21 | ||||||||
| Other | $ | (9.6 | ) | $ | (0.09 | ) | $ | (9.6 | ) | $ | (0.09 | ) | $ | (9.4 | ) | $ | (0.09 | ) | $ | (9.2 | ) | $ | (0.09 | ) | ||
| Total - Continuing Ops | $ | (25.8 | ) | $ | (0.23 | ) | $ | (18.8 | ) | $ | (0.17 | ) | $ | (10.3 | ) | $ | (0.10 | ) | $ | (6.0 | ) | $ | (0.06 | ) | ||
| Average Diluted Shares | 112.4 | 112.4 | 100.6 | 100.6 | ||||||||||||||||||||||
| *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. | ||||||||||||||||||||||||||
Third Quarter 2021 Results
For the three-month period ended September 30, 2021, SJI reported consolidated GAAP earnings of
UTILITY
Utility entities include the regulated operations of South Jersey Gas (SJG) and Elizabethtown Gas (ETG). Third quarter 2021 GAAP earnings were
South Jersey Gas
Performance. Third quarter 2021 GAAP/economic earnings were
Customer Growth. SJG added approximately 7,600 new customers over the last 12 months and now serves approximately 409,000 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. In November 2020, SJG filed a request with the BPU 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 BPU in April 2021, authorizes investment of
Redundancy. In August, the BPU 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 approximately 140,000 customers in Atlantic and Cape May counties.
Elizabethtown Gas
Performance. Third quarter 2021 GAAP earnings were
Customer Growth. ETG added approximately 4,700 new customers over the last 12 months and now serves approximately 302,000 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 BPU in April 2021, authorizes investment of
NON-UTILITY
Non-utility entities include Energy Management, Energy Production and Midstream. Third quarter 2021 GAAP earnings were
Energy Management
Performance. Energy Management includes Wholesale Services (Fuel Management/Marketing) and Retail Services (Account Services/Energy Consulting). Third quarter 2021 GAAP earnings were
- Wholesale Services/Other third quarter 2021 GAAP earnings were
$(10.8) million compared with$2.4 million in 2020. Third quarter 2021 economic earnings were$3.7 million compared with$7.1 million in 2020, primarily reflecting more robust asset optimization opportunities in the year ago period. - Retail Services third quarter 2021 GAAP earnings were
$0.8 million compared with$0.3 million in 2020. Third quarter 2021 economic earnings were$0.7 million compared with$(0.5) million in 2020, reflecting improved contributions from consulting activities and steady meter reading and appliance service contract fees.
Energy Production
Performance. Energy Production includes renewable (fuel cell/solar) and decarbonization (REV/RNG development) investments. Third quarter 2021 GAAP earnings were
- Renewables third quarter 2021 GAAP earnings were
$2.9 million compared with$13.7 million in 2020. Third quarter 2021 economic earnings were$3.4 million compared with$13.8 million in 2020, primarily reflecting$2.3 million in investment tax credits (ITC's) recorded the latest period associated with solar investments as compared with$12.0 million in ITC's last year related to fuel cell and solar investments. - Decarbonization third quarter 2021 GAAP/economic earnings were
$0.5 million , reflecting contributions from SJI's35% equity interest in REV partially offset by new business investments. RNG development activities at eight dairy farms is proceeding on track, with in-service anticipated in 2022.
Midstream
Performance. Midstream includes SJI's
OTHER
Performance. Other entity includes interest on debt, including debt associated with past acquisitions. Third quarter 2021 GAAP earnings were
Nine Months 2021 Results
| Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||
| GAAP | GAAP | Economic | Economic | GAAP | GAAP | Economic | Economic | |||||||||||||||||||
| Earnings | EPS | Earnings | EPS | Earnings | EPS | Earnings | EPS | |||||||||||||||||||
| Utility | $ | 115.5 | $ | 1.05 | $ | 107.7 | $ | 0.98 | $ | 92.3 | $ | 0.96 | $ | 93.5 | $ | 0.98 | ||||||||||
| Non-Utility | $ | (81.2 | ) | $ | (0.74 | ) | $ | 32.2 | $ | 0.29 | $ | 27.2 | $ | 0.29 | $ | 32.9 | $ | 0.34 | ||||||||
| Other | $ | (28.1 | ) | $ | (0.26 | ) | $ | (27.8 | ) | $ | (0.25 | ) | $ | (31.3 | ) | $ | (0.33 | ) | $ | (26.4 | ) | $ | (0.28 | ) | ||
| Total - Continuing Ops | $ | 6.3 | $ | 0.06 | $ | 112.1 | $ | 1.02 | $ | 88.2 | $ | 0.92 | $ | 100.0 | $ | 1.04 | ||||||||||
| Average Diluted Shares | 109.6 | 109.6 | 95.7 | 95.7 | ||||||||||||||||||||||
| *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 nine-month year-to-date (YTD) period ended September 30, 2021, SJI reported consolidated GAAP earnings of
UTILITY
2021 YTD GAAP earnings were
- SJG. 2021 YTD GAAP earnings were
$82.2 million compared with$64.7 million in 2020. 2021 YTD economic earnings were$82.2 million compared with$65.9 million in 2020. Utility margin increased$33.7 million , primarily reflecting rate relief effective October 1, 2020, customer growth and the roll-in of investments from infrastructure replacement programs. Total expenses increased$17.4 million , primarily reflecting higher depreciation and interest expenses. - ETG. 2021 YTD GAAP earnings were
$33.3 million compared with$27.3 million in 2020. 2021 YTD economic earnings were$25.4 million compared with$27.3 million in 2020. Utility margin increased$4.3 million , primarily reflecting customer growth and the roll-in of investments from infrastructure replacement programs. Total expenses increased$6.2 million , primarily reflecting higher depreciation and interest expenses.
NON-UTILITY
2021 YTD GAAP earnings were
- Energy Management. 2021 YTD GAAP earnings were
$(0.4) million compared with$13.7 million in 2020. 2021 YTD economic earnings were$25.4 million compared with$18.8 million in 2020.- Wholesale Services/Other 2021 YTD GAAP earnings were
$(2.4) million compared with$12.7 million in 2020. 2021 YTD economic earnings were$23.3 million compared with$18.3 million in 2020. 2020 YTD results included a$2.9 million after-tax refund from a third-party supplier. 2021 YTD results primarily reflect improved asset optimization opportunities as compared with the year ago period. - Retail Services 2021 YTD GAAP earnings were
$2.1 million compared with$1.0 million in 2020. 2021 YTD economic earnings were$2.1 million compared with$0.5 million in 2020, primarily reflecting improved contributions from consulting activities.
- Wholesale Services/Other 2021 YTD GAAP earnings were
- Energy Production. 2021 YTD GAAP earnings were
$4.6 million compared with$10.3 million in 2020. 2021 YTD economic earnings were$4.9 million compared with$10.9 million in 2020.- Renewables 2021 YTD GAAP earnings were
$3.7 million compared with$10.3 million in 2020. 2021 YTD economic earnings were$4.0 million compared with$10.9 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 2021 YTD GAAP/economic earnings were
$0.9 million , reflecting contributions from SJI's35% equity interest in REV partially offset by initial operating costs and new business investments.
- Renewables 2021 YTD GAAP earnings were
- Midstream. 2021 YTD GAAP earnings were
$(85.4) million compared with$3.2 million in 2020, reflecting an impairment charge of$87.4 million recorded in the quarterly period ended June 30, 2021. 2021 YTD economic earnings were$1.9 million compared with$3.2 million in 2020, reflecting AFUDC related to the project.
OTHER
2021 YTD GAAP earnings were
Capital Expenditures and Cash Flow
For the nine months ended September 30, 2021:
- Net cash provided by operating activities was
$273.9 million compared with$254.2 million in the prior year period, primarily reflecting rate relief at SJG, improved wholesale marketing results and customer growth. - Net cash used in investing activities was
$434.2 million compared with$297.3 million in the prior year period, primarily reflecting$373.5 million in capital expenditures and$54.5 million in affiliate and other investments. - Net cash provided by financing activities was
$143.9 million compared with$25.0 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
35.0% at September 30, 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
43.4% at September 30, 2021 compared with39.7% at December 31, 2020. - At September 30, 2021, SJI had total credit facilities of
$1.0 billion , with$844.8 million of available liquidity.
Guidance and Outlook
Based on solid operational performance for the nine months year-to-date, we are reaffirming our expectation for 2021 economic earnings of
Our long-term economic earnings per share growth target remains 5 to 8 percent, with significant step ups anticipated in 2023 and 2025, driven by timing associated with utility rate cases and clean energy investments. Our long-term targets are based on expected annual rate base growth of approximately 10 percent, driven by above-average customer growth, a long runway for infrastructure modernization, and clean energy and decarbonization investment.
We are also affirming our five-year capital expenditures outlook through 2025 of approximately
Conference Call & Webcast
SJI will host a conference call and webcast on Thursday, November 4 to discuss third quarter 2021 financial results. To access the call, please dial the applicable number approximately 5-10 minutes prior to the start time. No passcode is required. The call will also be webcast in a listen-only format for the media and general public. The webcast can be accessed at investors.sjindustries.com under Events & Presentations.
Date/Time: Thursday, November 4, 11:00 a.m. ET
Dial-In: Toll Free: 888-347-6081; Toll: 412-317-5181
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; and public health crises and epidemics or pandemics, such as the novel coronavirus (COVID-19). 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” in this Quarterly Report, SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2020 and in any other SEC filings made by SJI or SJG during 2020 and 2021 and prior to the filing of this 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 interest; 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 nine months ended September 30, 2021 and 2020, 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 derivative instruments on the related transactions, as well as the impact of contractual arrangements and other events that management believes make period to period comparisons of SJI's operations difficult or potentially confusing. 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 Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
| (Loss) Income from Continuing Operations | $ | (25,830 | ) | $ | (10,344 | ) | $ | 6,308 | $ | 88,178 | |||||||||
| Minus/Plus: | |||||||||||||||||||
| Unrealized Mark-to-Market Losses on Derivatives | 19,815 | 5,904 | 35,089 | 11,847 | |||||||||||||||
| Income Attributable to Noncontrolling Interest | (238 | ) | — | (540 | ) | — | |||||||||||||
| Impairment of Equity Method Investment (A) | — | — | 87,370 | — | |||||||||||||||
| Acquisition/Sale Net Costs (B) | 924 | (77 | ) | 1,602 | 1,241 | ||||||||||||||
| Other Costs (C) | (10,960 | ) | 77 | (10,960 | ) | 977 | |||||||||||||
| Income Taxes (D) | (2,519 | ) | (1,564 | ) | (20,971 | ) | (3,484 | ) | |||||||||||
| Additional Tax Adjustments (E) | — | — | 14,176 | 1,214 | |||||||||||||||
| Economic Earnings | $ | (18,808 | ) | $ | (6,004 | ) | $ | 112,074 | $ | 99,973 | |||||||||
| (Loss) Earnings per Share from Continuing Operations | $ | (0.23 | ) | $ | (0.10 | ) | $ | 0.06 | $ | 0.92 | |||||||||
| Minus/Plus: | |||||||||||||||||||
| Unrealized Mark-to-Market Losses on Derivatives | 0.17 | 0.06 | 0.32 | 0.12 | |||||||||||||||
| Income Attributable to Noncontrolling Interest | — | — | (0.01 | ) | — | ||||||||||||||
| Impairment of Equity Method Investment (A) | — | — | 0.80 | — | |||||||||||||||
| Acquisition/Sale Net Costs (B) | 0.01 | — | 0.01 | 0.01 | |||||||||||||||
| Other Costs (C) | (0.10 | ) | — | (0.10 | ) | 0.01 | |||||||||||||
| Income Taxes (D) | (0.02 | ) | (0.02 | ) | (0.19 | ) | (0.03 | ) | |||||||||||
| Additional Tax Adjustments (E) | — | — | 0.13 | 0.01 | |||||||||||||||
| Economic Earnings per Share | $ | (0.17 | ) | $ | (0.06 | ) | $ | 1.02 | $ | 1.04 | |||||||||
(A) Represents an other-than-temporary impairment charge on the Company’s equity method investment in PennEast.
(B) Represents costs incurred in 2021 to finalize the transactions related to acquiring Bronx Midco and solar projects and costs incurred to cease operations at ACLE, along with the final working capital payment on the sale of ELK, which was finalized during the first quarter of 2021. Also represents items recognized during 2020 such as costs incurred to prepare to exit the TSA, costs incurred to acquire EnerConnex and Annadale, and gains/losses recognized and costs incurred on the sale of solar assets as well as MTF/ACB.
(C) For 2021, includes a gain recognized by ETG from a Uniform Transitional Utility Assessment settlement agreement. For 2020, represents severance and other employee separation costs.
(D) The income taxes were determined using a combined average statutory tax rate.
(E) Represents additional tax adjustments, primarily including a federal deferred tax asset valuation allowance at SJI related to the impairment charge described in (A), and a one-time tax adjustment in 2020 resulting from the BPU's approval of a stipulation for SJG.
Summary of Utility Margin
The following tables summarize Utility Margin for SJG and ETG (in thousands):
SJG:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Utility Margin: | |||||||||||||||
| Residential | $ | 23,630 | $ | 25,109 | $ | 181,330 | $ | 144,977 | |||||||
| Commercial and Industrial | 15,111 | 13,695 | 76,233 | 60,771 | |||||||||||
| Cogeneration and Electric Generation | 1,136 | 1,120 | 3,558 | 3,471 | |||||||||||
| Interruptible | 15 | 8 | 94 | 41 | |||||||||||
| Off-System Sales & Capacity Release | 237 | 222 | 1,170 | 1,178 | |||||||||||
| Other Revenues | 523 | 457 | 1,502 | 1,118 | |||||||||||
| Margin Before Weather Normalization & Decoupling | 40,652 | 40,611 | 263,887 | 211,556 | |||||||||||
| CIP Mechanism | 1,011 | (5,770 | ) | 885 | 19,593 | ||||||||||
| EET Mechanism | 1,644 | 1,485 | 4,653 | 4,532 | |||||||||||
| Utility Margin** | $ | 43,307 | $ | 36,326 | $ | 269,425 | $ | 235,681 | |||||||
ETG:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
| Utility Margin: | |||||||||||||||||||
| Residential | $ | 13,634 | $ | 14,281 | $ | 101,168 | $ | 93,849 | |||||||||||
| Commercial & Industrial | 14,623 | 13,870 | 64,396 | 57,419 | |||||||||||||||
| Regulatory Rider Expenses* | (1,871 | ) | (1,802 | ) | (16,049 | ) | (6,011 | ) | |||||||||||
| Utility Margin** | $ | 26,386 | $ | 26,349 | $ | 149,515 | $ | 145,257 | |||||||||||
*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
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS)/INCOME (UNAUDITED)
(In Thousands Except for Per Share Data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||
| Operating Revenues: | |||||||||||||||||||
| Utility | $ | 106,123 | $ | 103,383 | $ | 653,009 | $ | 636,110 | |||||||||||
| Nonutility | 259,508 | 158,166 | 698,750 | 419,515 | |||||||||||||||
| Total Operating Revenues | 365,631 | 261,549 | 1,351,759 | 1,055,625 | |||||||||||||||
| Operating Expenses: | |||||||||||||||||||
| Cost of Sales - (Excluding depreciation and amortization) | |||||||||||||||||||
| - Utility | 24,128 | 29,277 | 183,927 | 210,167 | |||||||||||||||
| - Nonutility | 264,237 | 146,752 | 677,507 | 379,583 | |||||||||||||||
| Operations and Maintenance | 61,198 | 63,307 | 194,182 | 197,311 | |||||||||||||||
| Depreciation | 33,081 | 27,977 | 97,924 | 81,877 | |||||||||||||||
| Energy and Other Taxes | (8,040 | ) | 2,730 | (1,245 | ) | 9,228 | |||||||||||||
| Total Operating Expenses | 374,604 | 270,043 | 1,152,295 | 878,166 | |||||||||||||||
| Operating (Loss) Income | (8,973 | ) | (8,494 | ) | 199,464 | 177,459 | |||||||||||||
| Other Income and Expense | 2,225 | 5,143 | 7,885 | 7,621 | |||||||||||||||
| Interest Charges | (31,468 | ) | (27,762 | ) | (94,112 | ) | (88,887 | ) | |||||||||||
| (Loss) Income Before Income Taxes | (38,216 | ) | (31,113 | ) | 113,237 | 96,193 | |||||||||||||
| Income Taxes | 11,727 | 19,467 | (25,340 | ) | (13,725 | ) | |||||||||||||
| Equity in Earnings (Loss) of Affiliated Companies | 659 | 1,302 | (81,589 | ) | 5,710 | ||||||||||||||
| (Loss) Income from Continuing Operations | (25,830 | ) | (10,344 | ) | 6,308 | 88,178 | |||||||||||||
| Loss from Discontinued Operations - (Net of tax benefit) | (127 | ) | (58 | ) | (278 | ) | (178 | ) | |||||||||||
| Net (Loss) Income | (25,957 | ) | (10,402 | ) | 6,030 | 88,000 | |||||||||||||
| Less: Income Attributable to Noncontrolling Interest | 173 | — | 390 | — | |||||||||||||||
| Net (Loss) Income Attributable to South Jersey Industries, Inc. | $ | (26,130 | ) | $ | (10,402 | ) | $ | 5,640 | $ | 88,000 | |||||||||
| Basic (Loss) Earnings Per Common Share: | |||||||||||||||||||
| Continuing Operations | $ | (0.23 | ) | $ | (0.10 | ) | $ | 0.06 | $ | 0.92 | |||||||||
| Discontinued Operations | — | — | — | — | |||||||||||||||
| Net (Loss) Income | (0.23 | ) | (0.10 | ) | 0.06 | 0.92 | |||||||||||||
| Less: Income Attributable to Noncontrolling Interest | — | — | — | — | |||||||||||||||
| Net (Loss) Income Attributable to South Jersey Industries, Inc. | $ | (0.23 | ) | $ | (0.10 | ) | $ | 0.06 | $ | 0.92 | |||||||||
| Average Shares of Common Stock Outstanding - Basic | 112,448 | 100,587 | 108,108 | 95,599 | |||||||||||||||
| Diluted (Loss) Earnings Per Common Share: | |||||||||||||||||||
| Continuing Operations | $ | (0.23 | ) | $ | (0.10 | ) | $ | 0.06 | $ | 0.92 | |||||||||
| Discontinued Operations | — | — | — | — | |||||||||||||||
| Net (Loss) Income | (0.23 | ) | (0.10 | ) | 0.06 | 0.92 | |||||||||||||
| Less: Income Attributable to Noncontrolling Interest | — | — | — | — | |||||||||||||||
| Net (Loss) Income Attributable to South Jersey Industries, Inc. | $ | (0.23 | ) | $ | (0.10 | ) | $ | 0.06 | $ | 0.92 | |||||||||
| Average Shares of Common Stock Outstanding - Diluted | 112,448 | 100,587 | 109,589 | 95,724 | |||||||||||||||
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
| Nine Months Ended September 30, | |||||||||
| 2021 | 2020 | ||||||||
| Net Cash Provided by Operating Activities | $ | 273,927 | $ | 254,200 | |||||
| Cash Flows from Investing Activities: | |||||||||
| Capital Expenditures | (373,516 | ) | (344,828 | ) | |||||
| Cash Paid for Acquisitions, Net of Cash Acquired | — | (10,932 | ) | ||||||
| Proceeds from Business Dispositions and Sale of Property, Plant & Equipment | — | 119,948 | |||||||
| Investment in Contract Receivables | (16,429 | ) | (18,787 | ) | |||||
| Proceeds from Contract Receivables | 10,494 | 10,457 | |||||||
| Investment in Affiliates | (13,155 | ) | (1,353 | ) | |||||
| Advances to Affiliates | (26,615 | ) | — | ||||||
| Net Repayment of Notes Receivable - Affiliates | — | 2,504 | |||||||
| Acquisition/Divestiture Working Capital Settlement | (267 | ) | — | ||||||
| Investment in Subsidiary, Net of Cash Acquired | (14,683 | ) | (54,328 | ) | |||||
| Net Cash Used in Investing Activities | (434,171 | ) | (297,319 | ) | |||||
| Cash Flows from Financing Activities: | |||||||||
| Net Repayments of Short-Term Credit Facilities | (453,900 | ) | (251,700 | ) | |||||
| Proceeds from Issuance of Long-Term Debt | 460,000 | 800,000 | |||||||
| Principal Repayments of Long-Term Debt | (110,000 | ) | (660,000 | ) | |||||
| Payments for Issuance of Long-Term Debt | (16,304 | ) | (6,810 | ) | |||||
| Dividends on Common Stock | (64,460 | ) | (54,553 | ) | |||||
| Proceeds from Sale of Common Stock | 329,772 | 200,000 | |||||||
| Payments for the Issuance of Common Stock | (2,318 | ) | (1,897 | ) | |||||
| Capital Contributions of Noncontrolling Interest in Subsidiary | 1,072 | — | |||||||
| Net Cash Provided by Financing Activities | 143,862 | 25,040 | |||||||
| Net Decrease in Cash, Cash Equivalents and Restricted Cash | (16,382 | ) | (18,079 | ) | |||||
| Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 41,831 | 28,381 | |||||||
| Cash, Cash Equivalents and Restricted Cash at End of Period | $ | 25,449 | $ | 10,302 | |||||
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In Thousands)
| September 30, 2021 | December 31, 2020 | ||||||||
| Assets | |||||||||
| Property, Plant and Equipment: | |||||||||
| Utility Plant, at original cost | $ | 5,566,423 | $ | 5,265,661 | |||||
| Accumulated Depreciation | (970,861 | ) | (914,122 | ) | |||||
| Nonutility Property and Equipment, at cost | 183,294 | 147,764 | |||||||
| Accumulated Depreciation | (37,427 | ) | (35,069 | ) | |||||
| Property, Plant and Equipment - Net | 4,741,429 | 4,464,234 | |||||||
| Investments: | |||||||||
| Available-for-Sale Securities | 32 | 32 | |||||||
| Restricted | 34 | 7,786 | |||||||
| Investment in Affiliates | 36,157 | 106,230 | |||||||
| Total Investments | 36,223 | 114,048 | |||||||
| Current Assets: | |||||||||
| Cash and Cash Equivalents | 25,415 | 34,045 | |||||||
| Accounts Receivable | 272,286 | 278,723 | |||||||
| Unbilled Revenues | 26,783 | 85,423 | |||||||
| Provision for Uncollectibles | (43,065 | ) | (30,582 | ) | |||||
| Notes Receivable - Affiliate | 4,340 | 2,847 | |||||||
| Natural Gas in Storage, average cost | 65,325 | 39,440 | |||||||
| Materials and Supplies, average cost | 1,066 | 2,561 | |||||||
| Prepaid Taxes | 47,505 | 23,851 | |||||||
| Derivatives - Energy Related Assets | 141,690 | 41,439 | |||||||
| Other Prepayments and Current Assets | 30,311 | 29,081 | |||||||
| Total Current Assets | 571,656 | 506,828 | |||||||
| Regulatory and Other Noncurrent Assets: | |||||||||
| Regulatory Assets | 669,487 | 673,992 | |||||||
| Derivatives - Energy Related Assets | 37,307 | 6,935 | |||||||
| Notes Receivable - Affiliate | 54,956 | 31,073 | |||||||
| Contract Receivables | 47,127 | 41,428 | |||||||
| Goodwill | 706,960 | 706,960 | |||||||
| Other | 158,866 | 143,650 | |||||||
| Total Regulatory and Other Noncurrent Assets | 1,674,703 | 1,604,038 | |||||||
| Total Assets | $ | 7,024,011 | $ | 6,689,148 | |||||
| September 30, 2021 | December 31, 2020 | ||||||||
| Capitalization and Liabilities | |||||||||
| Equity: | |||||||||
| Common Stock | $ | 140,561 | $ | 125,740 | |||||
| Premium on Common Stock | 1,463,655 | 1,218,000 | |||||||
| Treasury Stock (at par) | (280 | ) | (321 | ) | |||||
| Accumulated Other Comprehensive Loss | (38,191 | ) | (38,216 | ) | |||||
| Retained Earnings | 262,842 | 355,678 | |||||||
| Total South Jersey Industries, Inc. Equity | 1,828,587 | 1,660,881 | |||||||
| Noncontrolling Interest | 7,457 | 5,995 | |||||||
| Total Equity | 1,836,044 | 1,666,876 | |||||||
| Long-Term Debt | 3,195,869 | 2,776,400 | |||||||
| Total Capitalization | 5,031,913 | 4,443,276 | |||||||
| Current Liabilities: | |||||||||
| Notes Payable | 142,500 | 596,400 | |||||||
| Current Portion of Long-Term Debt | 66,076 | 142,801 | |||||||
| Accounts Payable | 300,955 | 256,589 | |||||||
| Customer Deposits and Credit Balances | 37,833 | 35,899 | |||||||
| Environmental Remediation Costs | 41,150 | 45,265 | |||||||
| Taxes Accrued | 5,471 | 6,025 | |||||||
| Derivatives - Energy Related Liabilities | 106,244 | 27,006 | |||||||
| Deferred Contract Revenues | 764 | 479 | |||||||
| Derivatives - Other Current | 560 | 659 | |||||||
| Dividends Payable | 34,016 | — | |||||||
| Interest Accrued | 36,442 | 21,140 | |||||||
| Pension Benefits | 3,704 | 3,704 | |||||||
| Other Current Liabilities | 43,065 | 27,665 | |||||||
| Total Current Liabilities | 818,780 | 1,163,632 | |||||||
| Deferred Credits and Other Noncurrent Liabilities: | |||||||||
| Deferred Income Taxes - Net | 173,242 | 149,534 | |||||||
| Pension and Other Postretirement Benefits | 128,984 | 135,023 | |||||||
| Environmental Remediation Costs | 131,124 | 148,310 | |||||||
| Asset Retirement Obligations | 205,355 | 202,092 | |||||||
| Derivatives - Energy Related Liabilities | 25,124 | 4,947 | |||||||
| Derivatives - Other Noncurrent | 7,467 | 9,279 | |||||||
| Regulatory Liabilities | 418,422 | 420,577 | |||||||
| Other | 83,600 | 12,478 | |||||||
| Total Deferred Credits and Other Noncurrent Liabilities | 1,173,318 | 1,082,240 | |||||||
| Commitments and Contingencies (Note 11) | |||||||||
| Total Capitalization and Liabilities | $ | 7,024,011 | $ | 6,689,148 | |||||
FAQ
What were SJI's Q3 2021 GAAP earnings?
How does SJI's Q3 2021 performance compare to 2020?
What is the economic earnings guidance for SJI in 2021?
What impact did customer growth have on SJI's performance?
What are the key infrastructure projects SJI is working on?
