COMMON STOCK

12 Months Ended

Dec. 31, 2020

Stockholders' Equity Note [Abstract]

COMMON STOCK:

The following shares were issued and outstanding at December 31:


	2020	2019	2018
Beginning of Year	92,394,155	85,506,218	79,549,080
New Issuances During Year:
Settlement of Equity Forward Sale Agreement	—	6,779,661	—
Stock-Based Compensation Plan	75,502	108,276	67,308
Public Equity Offering	8,122,283	—	5,889,830
End of Year	100,591,940	92,394,155	85,506,218

The par value ($1.25 per share) of stock issued was recorded in Common Stock and the net excess over par value was recorded in Premium on Common Stock.

There were 2,339,139 shares of SJG's common stock (par value $2.50 per share) outstanding as of December 31, 2020. SJG did not issue any new shares during the period. SJIU owns all of the outstanding common stock of SJG.

AUTHORIZED SHARES - On October 16, 2020, SJI filed an amendment to its Certificate of Incorporation that increased the authorized number of shares of its common stock from 120,000,000 to 220,000,000 and the aggregate number of shares authorized to be issued by SJI from 122,500,000 to 222,500,000.

ATM EQUITY OFFERING - In April 2020, SJI entered into an ATM Equity Offering Sales Agreement (the "Sales Agreement") to sell, from time to time, shares of the Company’s common stock, par value $1.25 per share, having an aggregate sale price up to $200.0 million, through an “at-the-market” equity offering program. In June 2020, 8,122,283 shares were sold pursuant to the Sales Agreement at an average market price of approximately $24.62 for total net proceeds of $198.0 million after deducting commissions and other general & administrative expenses. These sales exhausted the shares that were available for sale under the Sales Agreement. The Company is using the net proceeds from this offering for general corporate purposes.

FORWARD SHARES - In 2018, SJI offered 12,669,491 shares of its common stock, par value $1.25 per share, at a public offering price of $29.50 per share. Of the offered shares, 5,889,830 shares were issued at closing. On January 15, 2019, SJI settled its equity forward sale agreement by physically delivering the remaining 6,779,661 shares of common stock and receiving net cash proceeds of approximately $189.0 million. The forward price used to determine cash proceeds received by SJI at settlement was calculated based on the initial forward sale price, as adjusted for underwriting fees, interest rate adjustments as specified in the equity forward agreement and any dividends paid on our common stock during the forward period.

CONVERTIBLE UNITS - In 2018, SJI issued and sold 5,750,000 Equity Units, initially in the form of Corporate Units, which included 750,000 Corporate Units pursuant to the underwriters’ option. Each Corporate Unit has a stated amount of $50 and is comprised of (a) a purchase contract obligating the holder to purchase from the Company, and for the Company to sell to the holder for a price in cash of $50, on the purchase contract settlement date, or April 15, 2021, subject to earlier termination or settlement, a certain number of shares of common stock; and (b) a 1/20, or 5%, undivided beneficial ownership interest in $1,000 principal amount of SJI’s 2018 Series A 3.70% Remarketable Junior Subordinated Notes due 2031. SJI will pay the holder quarterly contract adjustment payments at a rate of 3.55% per year on the stated amount of $50 per Equity Unit, in respect of each purchase contract, subject to the Company's right to defer these payments. The net proceeds, after amortization of the underwriting discounts, are recorded as Long-Term Debt on the consolidated balance sheets.

The convertible units consisted of the following (in thousands):


	2020		2019		2018
Principal amount:
Principal (A)	$	287,500	$	287,500	$	287,500
Unamortized debt discount and issuance costs (A)	7,181		7,737		8,269
Net carrying amount	$	280,319	$	279,763	$	279,231
Carrying amount of the equity component (B)	$	—	$	—	$	—

(A) Included in the consolidated balance sheets within Long-Term Debt.

(B) There is currently no equity portion.

During 2020, 2019, and 2018, the Company recognized approximately $0.6 million, $0.5 million and $0.4 million, respectively, of amortization of debt discount and issuance costs prior to capitalization of interest, and $10.7 million, $10.7 million and $7.7 million, respectively, of coupon interest expense, all of which was included in Interest Charges on the consolidated statements of income. The effective interest rate was 4.0%.

EPS — SJI's Basic EPS is based on the weighted-average number of common shares outstanding. The incremental shares required for inclusion in the denominator for the diluted EPS calculation were 141,076, 123,021, and 777,603 shares for the years ended December 31, 2020, 2019, and 2018, respectively. These shares relate to SJI’s restricted stock as discussed in Note 2, along with the Equity Units discussed above, which are accounted for under the treasury stock method.

DRP — SJI offers a DRP which allows participating shareholders to purchase shares of SJI common stock by automatic reinvestment of dividends or optional purchases. SJI currently purchases shares on the open market to fund share purchases by DRP participants, and as a result SJI did not raise any equity capital through the DRP in 2020, 2019 or 2018.

RETAINED EARNINGS — The Utilities are limited by their regulatory authorities on the amount of cash dividends or other distributions they are able to transfer to their parent, specifically of which could impact their capitalization structure. In addition, SJG and ETG's First Mortgage Indentures contain restrictions regarding the amount of cash dividends or other distributions that they may pay on their common stock. As of December 31, 2020, these loan restrictions did not affect the amount that may be distributed from the Utilities's retained earnings.

EQUITY CONTRIBUTIONS MADE BY SJI — SJG received $109.5 million in equity contributions from SJI in 2020; there were no equity contributions to SJG in 2019 or 2018. Future equity contributions will occur on an as needed basis.