New Jersey
|
1-6364
|
22-1901645
|
(State or other jurisdiction Of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
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1 South Jersey Plaza, Folsom, NJ
|
08037
|
|
(Address of principal executive offices)
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(Zip Code)
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which
registered
|
Common Stock
|
SJI
|
New York Stock Exchange (NYSE)
|
Item 2.01 |
Completion of Acquisition or Disposition of Assets
|
Item
9.01
|
Financial Statements and Exhibits.
|
Exhibit No.
|
Description
|
|
99.1
|
Unaudited pro forma condensed consolidated financial statements and explanatory notes for the Company as of and for the three months
ended March 31, 2019, and for the year ended December 31, 2018.
|
Date: May 30, 2019
|
SOUTH JERSEY INDUSTRIES, INC.
|
|
By:
|
/s/
Cielo Hernandez
|
|
Name: Cielo Hernandez
|
||
Title: Senior Vice President & Chief Financial Officer
|
|
• |
the audited consolidated financial statements of the Company as of and for the year ended December 31, 2018 and the related notes, included in the Company’s
Annual Report on Form 10-K filed with the SEC on February 28, 2019; and
|
|
• |
the unaudited condensed consolidated financial statements of the Company as of and for the three months ended March 31, 2019 and the related notes, included
in the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 8, 2019.
|
Historical
SJI
|
Pro Forma
Adjustments
|
Pro Forma
|
|||||||||||
Assets
|
|||||||||||||
Property, Plant and Equipment:
|
|||||||||||||
Utility Plant, at original cost
|
$
|
4,427,438
|
$
|
-
|
$
|
4,427,438
|
|||||||
Accumulated Depreciation
|
(799,637
|
)
|
-
|
(799,637
|
)
|
||||||||
Nonutility Property and Equipment, net
|
98,278
|
-
|
98,278
|
||||||||||
Property, Plant and Equipment — Net
|
3,726,079
|
-
|
3,726,079
|
||||||||||
Investments:
|
|||||||||||||
Total Investments
|
86,933
|
-
|
86,933
|
||||||||||
Current Assets:
|
|||||||||||||
Cash and Cash Equivalents
|
10,360
|
-
|
10,360
|
||||||||||
Restricted Cash
|
-
|
-
|
-
|
||||||||||
Accounts Receivable, net
|
367,885
|
(78
|
)
|
(b)
|
367,807
|
||||||||
Natural Gas in Storage, average cost
|
26,613
|
-
|
26,613
|
||||||||||
Materials and Supplies, average cost
|
1,744
|
-
|
1,744
|
||||||||||
Assets Held for Sale
|
37,532
|
(9,002
|
)
|
(a)
|
28,530
|
||||||||
Other Prepayments and Current Assets
|
76,573
|
-
|
76,573
|
||||||||||
Total Current Assets
|
520,707
|
(9,080
|
)
|
511,627
|
|||||||||
Regulatory and Other Noncurrent Assets:
|
|||||||||||||
Regulatory Assets
|
624,187
|
-
|
624,187
|
||||||||||
Goodwill and Identifiable Intangible Assets
|
734,607
|
-
|
734,607
|
||||||||||
Other
|
170,849
|
-
|
170,849
|
||||||||||
Total Regulatory and Other Noncurrent Assets
|
1,529,643
|
-
|
1,529,643
|
||||||||||
Total Assets
|
$
|
5,863,362
|
$
|
(9,080
|
)
|
$
|
5,854,282
|
||||||
Capitalization and Liabilities
|
|||||||||||||
Equity:
|
|||||||||||||
Common Stock
|
$
|
115,486
|
$
|
-
|
$
|
115,486
|
|||||||
Premium on Common Stock
|
1,023,097
|
-
|
1,023,097
|
||||||||||
Treasury Stock (at par)
|
(275
|
)
|
-
|
(275
|
)
|
||||||||
Accumulated Other Comprehensive Loss
|
(26,087
|
)
|
-
|
(26,087
|
)
|
||||||||
Retained Earnings
|
402,333
|
(1,185
|
)
|
(d)
|
401,148
|
||||||||
Total Equity
|
1,514,554
|
(1,185
|
)
|
1,513,369
|
|||||||||
Long—Term Debt
|
2,117,903
|
-
|
2,117,903
|
||||||||||
Total Capitalization
|
3,632,457
|
(1,185
|
)
|
3,631,272
|
|||||||||
Current Liabilities:
|
|||||||||||||
Notes Payable
|
355,121
|
-
|
355,121
|
||||||||||
Current Portion of Long—Term Debt
|
333,909
|
(7,380
|
)
|
(c)
|
326,529
|
||||||||
Accounts Payable
|
332,876
|
(87
|
)
|
(b)
|
332,789
|
||||||||
Other Current Liabilities
|
183,149
|
(428
|
)
|
(d)
|
182,721
|
||||||||
Total Current Liabilities
|
1,205,055
|
(7,895
|
)
|
1,197,160
|
|||||||||
Deferred Credits and Other Noncurrent Liabilities:
|
|||||||||||||
Deferred Income Taxes – Net
|
111,614
|
-
|
111,614
|
||||||||||
Regulatory Liabilities
|
478,592
|
-
|
478,592
|
||||||||||
Other
|
435,644
|
-
|
435,644
|
||||||||||
Total Deferred Credits and Other Noncurrent Liabilities
|
1,025,850
|
-
|
1,025,850
|
||||||||||
Total Capitalization and Liabilities
|
$
|
5,863,362
|
$
|
(9,080
|
)
|
$
|
5,854,282
|
Historical
SJI
|
Pro Forma
Adjustments
|
Pro Forma
|
|||||||||||
Operating Revenues:
|
|||||||||||||
Utility
|
$
|
414,346
|
$
|
-
|
$
|
414,346
|
|||||||
Nonutility
|
222,952
|
(96
|
)
|
(e)
|
222,856
|
||||||||
Total Operating Revenues
|
637,298
|
(96
|
)
|
637,202
|
|||||||||
Operating Expenses:
|
|||||||||||||
Cost of Sales – (Excluding depreciation)
|
|||||||||||||
— Utility
|
188,449
|
-
|
188,449
|
||||||||||
— Nonutility
|
213,938
|
-
|
213,938
|
||||||||||
Operations
|
62,826
|
(51
|
)
|
(f)
|
62,775
|
||||||||
Impairment Charges
|
-
|
-
|
-
|
||||||||||
Maintenance
|
9,630
|
(54
|
)
|
(h)
|
9,576
|
||||||||
Depreciation
|
23,685
|
-
|
23,685
|
||||||||||
Energy and Other Taxes
|
4,217
|
-
|
4,217
|
||||||||||
Net Gain on Sale of Assets
|
-
|
-
|
|||||||||||
Total Operating Expenses
|
502,745
|
(105
|
)
|
502,640
|
|||||||||
Operating Income
|
134,553
|
9
|
134,562
|
||||||||||
Other Income and Expense
|
2,575
|
-
|
2,575
|
||||||||||
Interest Charges
|
(28,653
|
)
|
2,104
|
(l)
|
(26,549
|
)
|
|||||||
Income Before Income Taxes
|
108,475
|
2,113
|
110,588
|
||||||||||
Income Taxes
|
(24,949
|
)
|
(560
|
)
|
(m)
|
(25,509
|
)
|
||||||
Equity in Earnings of Affiliates
|
2,173
|
-
|
2,173
|
||||||||||
Income from Continuing Operations
|
$
|
85,699
|
$
|
1,553
|
$
|
87,252
|
|||||||
Basic Earnings Per Common Share:
|
|||||||||||||
Continuing Operations
|
$
|
0.94
|
$
|
0.96
|
|||||||||
Average Shares of Common Stock Outstanding – Basic
|
91,332
|
91,332
|
|||||||||||
Diluted Earnings Per Common Share:
|
|||||||||||||
Continuing Operations
|
$
|
0.94
|
$
|
0.95
|
|||||||||
Average Shares of Common Stock Outstanding – Diluted
|
91,432
|
91,432
|
Historical
SJI
|
Pro Forma
Adjustments
|
Pro Forma
|
|||||||||||
Operating Revenues:
|
|||||||||||||
Utility
|
$
|
670,715
|
$
|
-
|
$
|
670,715
|
|||||||
Nonutility
|
970,623
|
(36,850
|
)
|
(e)
|
933,773
|
||||||||
Total Operating Revenues
|
1,641,338
|
(36,850
|
)
|
1,604,488
|
|||||||||
Operating Expenses:
|
|||||||||||||
Cost of Sales – (Excluding depreciation)
|
|||||||||||||
— Utility
|
258,781
|
-
|
258,781
|
||||||||||
— Nonutility
|
796,627
|
-
|
796,627
|
||||||||||
Operations
|
256,862
|
(11,164
|
)
|
(f)
|
245,698
|
||||||||
Impairment Charges
|
105,280
|
(88,377
|
)
|
(g)
|
16,903
|
||||||||
Maintenance
|
32,162
|
(2,119
|
)
|
(h)
|
30,043
|
||||||||
Depreciation
|
96,723
|
(16,339
|
)
|
(i)
|
80,384
|
||||||||
Energy and Other Taxes
|
9,537
|
(872
|
)
|
(j)
|
8,665
|
||||||||
Net Gain on Sale of Assets
|
(15,379
|
)
|
(15,379
|
)
|
|||||||||
Total Operating Expenses
|
1,540,593
|
(118,871
|
)
|
1,421,722
|
|||||||||
Operating Income
|
100,745
|
82,021
|
182,766
|
||||||||||
Other Income and Expense
|
2,404
|
(41
|
)
|
(k)
|
2,363
|
||||||||
Interest Charges
|
(90,296
|
)
|
5,024
|
(l)
|
(85,272
|
)
|
|||||||
Income Before Income Taxes
|
12,853
|
87,004
|
99,857
|
||||||||||
Income Taxes
|
(561
|
)
|
(19,525
|
)
|
(m)
|
(20,086
|
)
|
||||||
Equity in Earnings of Affiliates
|
5,611
|
-
|
5,611
|
||||||||||
Income from Continuing Operations
|
$
|
17,903
|
$
|
67,479
|
$
|
85,382
|
|||||||
Basic Earnings Per Common Share:
|
|||||||||||||
Continuing Operations
|
$
|
0.21
|
$
|
1.02
|
|||||||||
Average Shares of Common Stock Outstanding – Basic
|
83,693
|
83,693
|
|||||||||||
Diluted Earnings Per Common Share:
|
|||||||||||||
Continuing Operations
|
$
|
0.21
|
$
|
1.01
|
|||||||||
Average Shares of Common Stock Outstanding – Diluted
|
84,471
|
84,471
|
|
(a) |
To eliminate the Company’s divestiture of solar assets related to the Sixth Tranche as of March 31, 2019, which was previously classified as held for sale.
|
|
(b) |
Reflects adjustments for assets purchased or liabilities assumed by the Buyer. The Buyer purchased or assumed accounts receivable and accounts payable.
|
|
(c) |
Reflects total net proceeds from the sale of assets included in the Sixth Tranche that were used to partially pay down the Company’s $475.0 million in
aggregate principal amount of Floating Rate Senior Notes due 2019 on the one-year anniversary of the date of initial issuance, which at the Company’s option, bears interest at a variable base rate or a variable LIBOR (“Floating Rate
Notes”).
|
(In thousands)
|
As of March 31, 2019
|
|||
Purchase price of Projects included in the Sixth Tranche
|
$
|
6,374
|
||
Purchase price of SRECs included in the Sixth Tranche
|
1,788
|
|||
Less: transaction costs
|
(782
|
)
|
||
Total net proceeds
|
$
|
7,380
|
|
(d) |
To record the gain on sale of the Sixth Tranche, net of tax effect, as illustrated in the table below. As the gain is directly attributable to the Transaction
and is not expected to have a continuing impact on the Company’s operations, the estimated gain is only reflected on the unaudited pro forma condensed consolidated balance sheet. The income tax associated with the estimated loss has
been included within the Other Current Liabilities line item.
|
(In thousands)
|
As of March 31, 2019
|
|||
Net proceeds from the Sixth Tranche
|
$
|
7,380
|
||
Less: cost basis of assets sold
|
(8,993
|
)
|
||
Loss on sale, before tax
|
(1,613
|
)
|
||
Plus: income tax benefit
|
428
|
|||
Net loss on sale of assets of the Sixth Tranche
|
$
|
(1,185
|
)
|
|
(e) |
To eliminate the historical revenues of the assets sold within the Tranches.
|
|
(f) |
To eliminate the historical direct operations cost of the assets sold within the Tranches. No pro forma adjustment was made for historical indirect overhead
costs that were allocated down to Marina.
|
|
(g) |
To eliminate the historical impairment expense recorded for each of the assets sold within the Tranches.
|
|
(h) |
To eliminate the historical direct maintenance expense of the assets sold within the Tranches. No pro forma adjustment was made for historical indirect
maintenance expense that was allocated down to Marina.
|
|
(i) |
To eliminate the historical depreciation expense recorded of the assets sold within the Tranches.
|
|
(j) |
To eliminate the historical energy and other tax expense recorded for the assets sold within the Tranches. No pro forma adjustment was made for historical
indirect energy and other tax expense that was allocated down to Marina.
|
|
(k) |
To eliminate historical other income and expense recorded for the assets sold within the Tranches.
|
|
(l) |
To reflect the reduction of interest expense as a result of the partial pay down of the Floating Rate Notes using the net proceeds from the Tranches.
|
|
(m) |
To eliminate the historical income tax expense of the assets sold within the Tranches, as well as adjustments to record the income tax impacts of the pro
forma adjustments using the blended statutory tax rates of 26.53% and 27.0% for the three months ended March 31, 2019 and the year ended December 31, 2018, respectively. These rates do not reflect SJI’s effective tax rates, which
include other items and may be significantly different than the rates assumed for purposes of preparing these statements for a variety of reasons.
|