South Jersey Industries : SJI Reports Second Quarter 2022 Results Acquisition Proceeding on Track - Form 8-K

SJI Reports Second Quarter 2022 Results

Acquisition 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.

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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.

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Elizabethtown Gas

Performance. 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.

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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.

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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.

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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.

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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 June 30,	Six Months Ended June 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 amounts included in continuing operations related to PennEast partnership distributions. 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).

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Summary of Utility Margin

The following tables summarize Utility Margin for SJG and ETG (in thousands):

South Jersey Gas

Three Months Ended June 30,	Six Months Ended June 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 Ended June 30,	Six Months Ended June 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.

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SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS)/INCOME (UNAUDITED)

(In Thousands Except for Per Share Data)

Three Months Ended June 30,	Six Months Ended June 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

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SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In Thousands)

Six Months Ended June 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

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SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED 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

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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

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