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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
December 31, 2014
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____________to ______________.
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New Jersey
(State of incorporation)
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22-1901645
(IRS employer identification no.)
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1 South Jersey Plaza, Folsom, New Jersey 08037
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(609) 561-9000
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(Address of principal executive offices, including zip code)
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(Registrant's telephone number, including area code)
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Common Stock - $1.25 par value per share
(Title of each class)
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New York Stock Exchange
(Name of exchange on which registered)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page No.
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 4A.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Units of Measurement
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For Natural Gas:
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1 Bcf
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= One billion cubic feet
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1dt
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= One decatherm
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1 MMdts
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= One million decatherms
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dts/d
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= Decatherms per day
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MDWQ
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= Maximum daily withdrawal quantity
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For Electric:
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1 MMmwh
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= One million megawatt hours
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1 mwh
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= One megawatt hour
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•
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South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey.
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•
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South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial and industrial customers.
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•
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South Jersey Resources Group, LLC (SJRG) markets natural gas storage, commodity and transportation assets on a wholesale basis in the mid-Atlantic, Appalachian and southern states.
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•
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South Jersey Exploration, LLC (SJEX) owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania.
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•
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Marina Energy LLC (Marina) develops and operates on-site energy-related projects.
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•
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South Jersey Energy Service Plus, LLC (SJESP) services residential and small commercial HVAC systems, installs small commercial HVAC systems, provides plumbing services and services appliances under warranty via a subcontractor arrangement as well as on a time and materials basis.
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•
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SJI Midstream, LLC was formed in 2014 to invest in a project to build a 100-mile natural gas pipeline in Pennsylvania and New Jersey. This subsidiary has not had any significant activity during 2014.
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•
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SJI is a holding company and its assets consist primarily of investments in subsidiaries.
Should SJI's subsidiaries be unable to pay dividends or make other payments to SJI for financial, regulatory, legal or other reasons, SJI's ability to pay dividends on its common stock could be limited. SJI's stock price could be adversely affected as a result.
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•
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SJI's business activities are concentrated in southern New Jersey.
Changes in the economies of southern New Jersey and surrounding regions could negatively impact the growth opportunities available to SJI and the financial condition of the customers and prospects of SJI.
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•
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Changes in the regulatory environment or unfavorable rate regulation at its utility may have an unfavorable impact on SJI's financial performance or condition.
SJI's utility business is regulated by the New Jersey Board of Public Utilities (BPU) which has authority over many of the activities of the utility business including, but not limited to, the rates it charges to its customers, the amount and type of securities it can issue, the nature of investments it can make, the nature and quality of services it provides, safety standards and other matters. The extent to which the actions of regulatory commissions restrict or delay SJG's ability to earn a reasonable rate of return on invested capital and/or fully recover operating costs may adversely affect its results of operations, financial condition and cash flows.
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•
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SJI may not be able to respond effectively to competition, which may negatively impact SJI's financial performance or condition.
Regulatory initiatives may provide or enhance opportunities for competitors that could reduce utility income obtained from existing or prospective customers. Also, competitors in all of SJI's business lines may be able to provide superior or less costly products or services based upon currently available or newly developed technologies.
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•
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Warm weather, high commodity costs, or customer conservation initiatives could result in reduced demand for some of SJI's energy products and services.
SJI's utility currently has a conservation incentive program clause that protects its revenues and gross margin against usage that is lower than a set level. Should this clause be terminated without replacement, lower customer energy utilization levels would likely reduce SJI's net income.
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•
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High natural gas prices could cause more of SJI's receivables to be uncollectible.
Higher levels of uncollectibles from either residential or commercial customers would negatively impact SJI's income and could result in higher working capital requirements.
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•
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SJI's net income could decrease if it is required to incur additional costs to comply with new governmental safety, health or environmental legislation.
SJI is subject to extensive and changing federal and state laws and regulations that impact many aspects of its business; including the storage, transportation and distribution of natural gas, as well as the remediation of environmental contamination at former manufactured gas plant facilities.
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•
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Climate change legislation could impact SJI's financial performance and condition.
Climate change is receiving ever increasing attention from scientists and legislators alike. The debate is ongoing as to the extent to which our climate is changing, the potential causes of this change and its future impacts. Some attribute global warming to increased levels of greenhouse gases, which has led to significant legislative and regulatory efforts to limit greenhouse gas emissions. The outcome of federal and state actions to address global climate change could result in a variety of regulatory programs including additional charges to fund energy efficiency activities or other regulatory actions. These actions could affect the demand for natural gas and electricity, result in increased costs to our business and impact the prices we charge our customers. Because natural gas is a fossil fuel with low carbon content, it is possible that future carbon constraints could create additional demands for natural gas, both for production of electricity and direct use in homes and businesses. Any adoption by federal or state governments mandating a substantial reduction in greenhouse gas emissions could have far-reaching and significant impacts on the energy industry. We cannot predict the potential impact of such laws or regulations on our future consolidated financial condition, results of operations or cash flows.
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•
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SJI's wholesale commodity marketing and retail electric businesses are exposed to the risk that counterparties that owe money or energy to SJI will not be able to meet their obligations for operational or financial reasons.
SJI could be forced to buy or sell commodity at a loss as a result of such failure. Such a failure, if large enough, could also impact SJI's liquidity.
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•
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Increasing interest rates would negatively impact the net income of SJI.
Several of SJI's subsidiaries are capital intensive, resulting in the incurrence of significant amounts of debt financing. Some of the long-term debt of SJI and its subsidiaries is issued at fixed rates or has utilized interest rate swaps to mitigate changes in variable rates. However, newly issued long-term debt of SJI at variable rates, along with all variable rate short-term borrowings, are exposed to the impact of rising interest rates.
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•
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SJI has guaranteed certain obligations of unconsolidated affiliates and is exposed to the risk that these affiliates will not be able to meet performance and financial commitments.
SJI's unconsolidated affiliates develop and operate on-site energy related projects. SJI has guaranteed certain obligations of these affiliates in connection with the development and operation of the facilities. In the event that these projects do not meet specified levels of operating performance or are unable to meet certain financial obligations as they become due, SJI could be required to make payments related to these obligations.
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•
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The inability to obtain capital, particularly short-term capital from commercial banks, could negatively impact the daily operations and financial performance of SJI.
SJI uses short-term borrowings under committed and uncommitted credit facilities provided by commercial banks to supplement cash provided by operations, to support working capital needs, and to finance capital expenditures, as incurred. SJG relies upon short-term borrowings issued under a commercial paper program supported by a committed bank credit facility to support working capital needs, and to finance capital expenditures, as incurred. If the customary sources of short-term capital were no longer available due to market conditions, SJI and its subsidiaries may not be able to meet its working capital and capital expenditure requirements and borrowing costs could increase.
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•
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A downgrade in either SJI's or SJG's credit ratings could negatively affect our ability to access adequate and cost effective capital.
Our ability to obtain adequate and cost effective capital depends to a significant degree on our credit ratings, which are greatly influenced by financial condition and results of operations. If the rating agencies downgrade either SJI's or SJG's credit ratings, particularly below investment grade, our borrowing costs would increase. In addition, we would likely be required to pay higher interest rates in future financings and potential funding sources would likely decrease. To the extent that a decline in SJG's credit rating has a negative effect on SJI, SJI could be required to provide additional support to certain counterparties.
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•
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Hedging activities of the Company designed to protect against commodity price or interest rate risk may cause fluctuations in reported financial results and SJI's stock price could be adversely affected as a result.
Although SJI enters into various contracts to hedge the value of energy assets, liabilities, firm commitments or forecasted transactions, the timing of the recognition of gains or losses on these economic hedges in accordance with accounting principles generally accepted in the United States of America does not always match up with the gains or losses on the items being hedged. The difference in accounting can result in volatility in reported results, even though the expected profit margin is essentially unchanged from the dates the transactions were consummated.
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•
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The inability to obtain natural gas or electricity from suppliers would negatively impact the financial performance of SJI.
Several of SJI's subsidiaries have businesses based upon the ability to deliver natural gas or electricity to customers. Disruption in the production or transportation to SJI from its suppliers could prevent SJI from completing sales to its customers.
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•
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Transporting and storing natural gas involves numerous risks that may result in accidents and other operating risks and costs.
SJI's gas distribution activities involve a variety of inherent hazards and operating risks, such as leaks, accidents, mechanical problems, natural disasters or terrorist activities which could cause substantial financial losses. In addition, these risks could result in loss of human life, significant damage to property, environmental pollution and impairment of operations, which in turn could lead to substantial losses. In accordance with customary industry practice, SJI maintains insurance against some, but not all, of these risks and losses. The occurrence of any of these events not fully covered by insurance could adversely affect SJI's financial position, results of operations and cash flows.
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•
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Adverse results in legal proceedings could be detrimental to the financial condition of SJI.
The outcomes of legal
proceedings can be unpredictable and can result in adverse judgments.
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•
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Renewable energy projects at Marina receive significant benefit from tax and regulatory incentives.
A significant portion of the expected return on investment of these renewable energy projects is dependent upon federal investment tax credits (ITCs) and the future market for renewable energy credits (RECs). The benefits from ITCs are typically available when the project is placed in service while the benefits from RECs are produced during the entire life of the project. As a result, earnings from existing projects would be adversely affected without a liquid REC market. In addition, the return on investment from new projects may not be as attractive if ITCs are not available and/or a liquid REC market ceases to exist. Therefore, these projects are exposed to the risk that currently favorable tax and regulatory incentives expire or are adversely modified.
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•
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Constraints in available pipeline capacity, particularly in the Marcellus Shale producing region, may negatively impact SJI's financial performance.
Increasing natural gas production and/or pipeline transportation disruptions in the Marcellus region, where SJI has natural gas receipt requirements, may cause temporary take-away constraints resulting in higher transportation costs and the sale of shale gas at a loss.
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•
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Failures in the security of our computer systems through cyberattacks, hackers or other sources, could have a material adverse impact on our business and results of operations.
SJI uses computer systems and services that involve the storage of confidential information on our employees, customers and vendors. In addition, certain computer systems monitor and control our generation and distribution processes. Experienced hackers may be able to develop and deploy viruses that exploit the security of our computer systems and thus obtain confidential information and/or disrupt significant business processes. Unauthorized access to confidential information or disruptions to significant business processes could damage our reputation and negatively impact our results of operations and financial condition.
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Name, age and position with the Company
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Period Served
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Edward J. Graham
, Age 57
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Chairman
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April 2005 - Present
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Chief Executive Officer
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February 2004 - Present
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President
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January 2003 - January 2014
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Michael J. Renna
, Age 47
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Director
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January 2014 - Present
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President
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January 2014 - Present
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Chief Operating Officer
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January 2014 - Present
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Senior Vice President
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January 2013 - January 2014
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Vice President
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January 2004 - December 2012
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Jeffrey E. DuBois
, Age 56
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Senior Vice President
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January 2013 - Present
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Vice President
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January 2004 - December 2012
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Stephen H. Clark
, Age 56
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Chief Financial Officer
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November 2013 - Present
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Vice President
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January 2013 - November 2013
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Treasurer
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January 2004 - April 2014
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Gina M. Merritt-Epps
, Age 47
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General Counsel and Corporate Secretary
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May 2009 - Present
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Kathleen A. McEndy
, Age 61
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Vice President
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March 2013 - Present
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Principal, The McEndy Group, LLC
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January 2009 - March 2013
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Kenneth A. Lynch
, Age 49
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Chief Accounting Officer
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January 2013 - Present
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Assistant Vice President
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July 2006 - December 2012
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David Robbins, Jr.
, Age 52
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Vice President
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April 2014 - Present
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Senior Vice President, South Jersey Energy Solutions
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January 2013 - Present
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Chief Operating Officer, South Jersey Energy Solutions
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January 2013 - April 2014
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Vice President, South Jersey Energy Solutions
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April 2011 - December 2012
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Treasurer & Secretary, South Jersey Energy Solutions
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January 2010 - December 2012
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Gregory M. Nuzzo
, Age 40
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Vice President
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April 2014 - Present
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Senior Vice President, South Jersey Energy Solutions
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January 2013 - Present
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Senior Vice President, South Jersey Resources Group
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January 2013 - March 2014
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Vice President, South Jersey Energy Solutions
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January 2012 - December 2012
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Vice President, South Jersey Resources Group
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January 2010 - December 2012
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||||||||||||
Quarter Ended
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Market Price Per Share
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Dividends
|
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Quarter Ended
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Market Price Per Share
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Dividends
|
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||||||||||||||
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Declared
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Declared
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||||||||||||
2014
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High
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Low
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Per Share
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2013
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High
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Low
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Per Share
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||||||||||||
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March 31
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$
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58.09
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$
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51.77
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$
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0.472
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March 31
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$
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56.21
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$
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50.52
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$
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0.443
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June 30
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$
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60.55
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$
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54.41
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$
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0.472
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June 30
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$
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61.78
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$
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54.11
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$
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0.443
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September 30
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$
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60.67
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$
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52.25
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$
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0.472
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September 30
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$
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62.28
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$
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55.97
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$
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0.443
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December 31
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$
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61.23
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$
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53.00
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$
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0.503
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December 31
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$
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61.18
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$
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54.30
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$
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0.472
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|
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•
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$100 invested on December 31, 2009 in South Jersey Industries, Inc. common stock, in the S&P 500 Stock Index and in the S&P Utility Index; and
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•
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All dividends are reinvested.
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Dec-09
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Dec-10
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Dec-11
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Dec-12
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Dec-13
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Dec-14
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||||||||||||
S&P 500
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$
|
100
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$
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115
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$
|
117
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$
|
136
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|
$
|
180
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|
$
|
205
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S&P Utilities
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$
|
100
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$
|
105
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$
|
126
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|
$
|
128
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|
$
|
145
|
|
$
|
187
|
|
SJI
|
$
|
100
|
|
$
|
142
|
|
$
|
157
|
|
$
|
144
|
|
$
|
165
|
|
$
|
180
|
|
|
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||
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|
||||||||||
Operating Results:
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||||||||||
Operating Revenues
|
$
|
886,996
|
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$
|
731,421
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$
|
706,280
|
|
$
|
828,560
|
|
$
|
925,067
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating Income
|
$
|
127,603
|
|
$
|
69,636
|
|
$
|
109,898
|
|
$
|
121,607
|
|
$
|
116,492
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income from Continuing Operations
|
$
|
97,628
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|
$
|
82,389
|
|
$
|
92,776
|
|
$
|
89,859
|
|
$
|
67,285
|
|
Discontinued Operations - Net (1)
|
(582
|
)
|
(796
|
)
|
(1,168
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)
|
(568
|
)
|
(633
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Net Income
|
$
|
97,046
|
|
$
|
81,593
|
|
$
|
91,608
|
|
$
|
89,291
|
|
$
|
66,652
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Assets
|
$
|
3,349,425
|
|
$
|
2,924,855
|
|
$
|
2,631,440
|
|
$
|
2,247,510
|
|
$
|
2,076,615
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capitalization:
|
|
|
|
|
|
|
|
|
|
||||||
Equity
|
$
|
932,432
|
|
$
|
827,000
|
|
$
|
736,214
|
|
$
|
624,114
|
|
$
|
570,097
|
|
Long-Term Debt
|
859,491
|
|
680,400
|
|
601,400
|
|
424,213
|
|
340,000
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Total Capitalization
|
$
|
1,791,923
|
|
$
|
1,507,400
|
|
$
|
1,337,614
|
|
$
|
1,048,327
|
|
$
|
910,097
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ratio of Operating Income to Fixed Charges (2)
|
3.8
|
x
|
3.0
|
x
|
5.1x
|
|
5.4x
|
|
5.3x
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Diluted Earnings Per Common Share (Based on Average Diluted Shares Outstanding):
|
|
|
|
|
|
||||||||||
Continuing Operations
|
$
|
2.94
|
|
$
|
2.57
|
|
$
|
3.01
|
|
$
|
2.99
|
|
$
|
2.25
|
|
Discontinued Operations - Net (1)
|
(0.02
|
)
|
(0.02
|
)
|
(0.04
|
)
|
(0.02
|
)
|
(0.03
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Diluted Earnings Per Common Share
|
$
|
2.92
|
|
$
|
2.55
|
|
$
|
2.97
|
|
$
|
2.97
|
|
$
|
2.22
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Return on Average Equity (3)
|
11.1
|
%
|
10.5
|
%
|
13.6
|
%
|
15.0
|
%
|
12.1
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Share Data:
|
|
|
|
|
|
|
|
|
|
||||||
Number of Shareholders of Record
|
6.9
|
|
6.9
|
|
7.1
|
|
7.1
|
|
7.1
|
|
|||||
Average Common Shares
|
33,139
|
|
31,989
|
|
30,744
|
|
30,000
|
|
29,861
|
|
|||||
Common Shares Outstanding at Year End
|
34,167
|
|
32,715
|
|
31,653
|
|
30,212
|
|
29,873
|
|
|||||
Dividend Reinvestment Plan:
|
|
|
|
|
|
|
|
|
|
||||||
Number of Shareholders
|
5.2
|
|
5.2
|
|
4.8
|
|
4.4
|
|
4.9
|
|
|||||
Number of Participating Shares
|
2,041
|
|
2,059
|
|
2,462
|
|
2,193
|
|
2,682
|
|
|||||
Book Value at Year End
|
$
|
27.29
|
|
$
|
25.28
|
|
$
|
23.26
|
|
$
|
20.66
|
|
$
|
19.08
|
|
Dividends Declared per Common Share
|
$
|
1.92
|
|
$
|
1.80
|
|
$
|
1.65
|
|
$
|
1.50
|
|
$
|
1.36
|
|
Market Price at Year End
|
$
|
58.93
|
|
$
|
55.96
|
|
$
|
50.33
|
|
$
|
56.81
|
|
$
|
52.82
|
|
Dividend Payout:
|
|
|
|
|
|
|
|
|
|
||||||
From Continuing Operations
|
65.2
|
%
|
69.9
|
%
|
54.7
|
%
|
50.1
|
%
|
60.1
|
%
|
|||||
From Total Net Income
|
65.6
|
%
|
70.6
|
%
|
55.4
|
%
|
50.4
|
%
|
60.7
|
%
|
|||||
Market-to-Book Ratio
|
2.2
|
x
|
2.2
|
x
|
2.2x
|
|
2.7x
|
|
2.8x
|
|
|||||
Price Earnings Ratio (3)
|
20.0
|
x
|
21.8
|
x
|
16.7x
|
|
19.0x
|
|
23.4x
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated Economic Earnings (4)
|
|
|
|
|
|
|
|
|
|
||||||
Income from Continuing Operations
|
$
|
97,628
|
|
$
|
82,389
|
|
$
|
92,776
|
|
$
|
89,859
|
|
$
|
67,285
|
|
Minus/Plus:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized Mark-to-Market Losses/(Gains) on Derivatives and Realized (Gains)/Losses on Inventory Injection Hedges
|
4,927
|
|
14,054
|
|
(865
|
)
|
(2,876
|
)
|
13,698
|
|
|||||
Net Loss from Affiliated Companies, Not Part of Ongoing Operations (5)
|
—
|
|
751
|
|
—
|
|
—
|
|
—
|
|
|||||
Unrealized Loss on Property, Plant and Equipment
|
—
|
|
—
|
|
1,402
|
|
—
|
|
—
|
|
|||||
Net Loss from Affiliated Companies (6)
|
1,524
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Other (7)
|
(100
|
)
|
(100
|
)
|
—
|
|
—
|
|
—
|
|
|||||
Economic Earnings
|
$
|
103,979
|
|
$
|
97,094
|
|
$
|
93,313
|
|
$
|
86,983
|
|
$
|
80,983
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per Share from Continuing Operations
|
$
|
2.94
|
|
$
|
2.57
|
|
$
|
3.01
|
|
$
|
2.99
|
|
$
|
2.25
|
|
Minus/Plus:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized Mark-to-Market Losses/(Gains) on Derivatives and Realized (Gains)/Losses on Inventory Injection Hedges
|
0.14
|
|
0.44
|
|
(0.03
|
)
|
(0.10
|
)
|
0.45
|
|
|||||
Net Loss from Affiliated Companies, Not Part of Ongoing Operations (5)
|
—
|
|
0.02
|
|
—
|
|
—
|
|
—
|
|
|||||
Unrealized Loss on Property, Plant and Equipment
|
—
|
|
—
|
|
0.05
|
|
—
|
|
—
|
|
|||||
Net Loss from Affiliated Companies (6)
|
0.05
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Economic Earnings per Share
|
$
|
3.13
|
|
$
|
3.03
|
|
$
|
3.03
|
|
$
|
2.89
|
|
$
|
2.70
|
|
(1)
|
Represents discontinued business segments: sand mining and distribution operations sold in 1996 and fuel oil operations with related environmental liabilities in 1986 (See Note 3 to Consolidated Financial Statements).
|
(2)
|
Calculated as Operating Income divided by Interest Charges.
|
(3)
|
Calculated based on Income from Continuing Operations.
|
(4)
|
This section includes the non-generally accepted accounting principles (“non-GAAP”) financial measures of Economic Earnings and Economic Earnings per share. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of this Report for a discussion regarding the use of non-GAAP financial measures.
|
(5)
|
Resulting from the termination of the contract at LVE Energy Partners, LLC to design, build, own and operate a district energy system and central energy center for a planned resort in Las Vegas, Nevada.
|
(6)
|
Resulting from a reserve for uncollectible accounts recorded by an Energenic subsidiary that owns and operates a central energy center and energy distribution system for a hotel, casino and entertainment complex in Atlantic City, New Jersey (see Note 15 to the consolidated financial statements). This charge is being excluded from Economic Earnings until the total economic impact of the proceedings are realized. Energenic management expects the proceedings to be concluded during 2015.
|
(7)
|
Represents additional depreciation expense within Economic Earnings on a solar generating facility. During 2012 an impairment charge was recorded within Income from Continuing Operations on a solar generating facility which reduced its depreciable basis and recurring depreciation expense. This impairment charge was excluded from Economic Earnings and therefore the related reduction in depreciation expense is being added back.
|
|
2014
|
2013
|
2012
|
||||||
Net Income Benefit:
|
|
|
|
||||||
CIP - Weather Related
|
$
|
(4.7
|
)
|
$
|
(0.3
|
)
|
$
|
9.4
|
|
CIP - Usage Related
|
2.0
|
|
3.4
|
|
5.8
|
|
|||
Total Net Income Benefit
|
$
|
(2.7
|
)
|
$
|
3.1
|
|
$
|
15.2
|
|
|
|
|
|
||||||
Weather Compared to 20-Year Average
|
7.5% colder
|
0.6% colder
|
17.7% warmer
|
||||||
Weather Compared to Prior Year
|
4.6% colder
|
20.6% colder
|
8.6% warmer
|
•
|
Gas utility operations (SJG) consist primarily of natural gas distribution to residential, commercial and industrial customers.
|
•
|
Wholesale energy operations include the activities of SJRG and SJEX.
|
•
|
SJE is involved in both retail gas and retail electric activities.
|
◦
|
Retail gas and other operations include natural gas acquisition and transportation service business lines.
|
◦
|
Retail electric operations consist of electricity acquisition and transportation to commercial and industrial customers.
|
•
|
On-site energy production consists of Marina's thermal energy facility and other energy-related projects.
|
•
|
Appliance service operations includes SJESP’s servicing of appliances under warranty via a subcontractor arrangement as well as on a time and materials basis.
|
•
|
The income contribution from SJRG increased $28.0 million to net income of $5.6 million due primarily to an approximately $16.6 million increase related to higher daily trading margins and higher storage volumes sold as described in "Gross Margin - Energy Group" below, along with an $11.4 million increase resulting from the change in unrealized gains and losses on derivatives used by the wholesale energy operations to mitigate natural gas commodity price risk, as discussed under "Operating Revenues - Energy Group" below.
|
•
|
The income contribution from SJG increased $4.2 million to $66.5 million due primarily to increases in the accelerated infrastructure programs and customer growth over the prior year.
|
•
|
The income contribution from Marina decreased $16.9 million to $22.0 million due primarily to a reserve for uncollectible accounts established at one of Energenic's operating subsidiaries, of which Marina has a 50% equity interest (see Note 15 to the consolidated financial statements), along with the impact of the investment tax credits available on renewable energy facilities as compared to the prior year.
|
•
|
The income contribution from SJRG decreased $21.0 million to a net loss of $22.3 million due primarily to an approximately $12.1 million decrease due to lower daily trading margins as described in Gross Margin - Nonutility below, along with an approximately $8.9 million change in unrealized gains and losses on derivatives used by SJRG to mitigate natural gas commodity price risk, as discussed under Operating Revenues - Nonutility below.
|
•
|
The income contribution from SJE decreased $6.7 million to $0.7 million due primarily to the change in unrealized gains and losses on forward financial contracts used to mitigate price risk on electric as discussed under Operating Revenues – Nonutility below.
|
•
|
The income contribution from Marina increased $11.3 million to $38.9 million due primarily to the impact of the investment tax credits available on renewable energy facilities as compared to the prior year.
|
•
|
The income contribution from SJG increased $4.0 million to $62.2 million due primarily to increases in the accelerated infrastructure programs and customer growth over the prior year.
|
•
|
The wholesale energy operations at SJRG purchases and holds natural gas in storage to earn a profit margin from its ultimate sale in the future. The wholesale energy operations use derivatives to mitigate commodity price risk in order to substantially lock-in the profit margin that will ultimately be realized. However, gas stored in inventory is accounted for at the lower of average cost or market; the derivatives used to reduce the risk associated with a change in the value of the inventory are accounted for at fair value, with changes in fair value recorded in operating results in the period of change. As a result, earnings are subject to volatility as the market price of derivatives change, even when the underlying hedged value of the inventory is unchanged. Additionally, volatility in earnings is created when realized gains and losses on derivatives used to mitigate commodity price risk on expected future purchases of gas injected into storage are recognized in earnings when the derivatives settle, but the cost of the related gas in storage is not recognized in earnings until the period of withdrawal. This volatility can be significant from period to period. Over time, gains or losses on the sale of gas in storage will be offset by losses or gains on the derivatives, resulting in the realization of the profit margin expected when the transactions were initiated.
|
•
|
The retail electric operations at SJE uses forward contracts to mitigate commodity price risk on fixed price electric contracts with customers. In accordance with GAAP, the forward contracts are recorded at fair value, with changes in fair value recorded in earnings in the period of change. Several related customer contracts are not considered derivatives and therefore are not recorded in earnings until the electricity is delivered. As a result, earnings are subject to volatility as the market price of the forward contracts change, even when the underlying hedged value of the customer contract is unchanged. Over time, gains or losses on the sale of the fixed price electric under contract will be offset by losses or gains on the forward contracts, resulting in the realization of the profit margin expected when the transactions were initiated.
|
•
|
For the twelve months ended December 31, 2014 and 2013, Economic Earnings includes additional depreciation expense on a solar generating facility. During 2012 an impairment charge was recorded within Income from Continuing Operations on a solar generating facility which reduced its depreciable basis and recurring depreciation expense. This impairment charge was excluded from Economic Earnings and therefore the related reduction in depreciation expense is being added back.
|
•
|
For the twelve months ended December 31, 2014, Economic Earnings excludes a $1.5 million loss (net of tax) from affiliated companies. This adjustment is the result of a reserve for uncollectible accounts recorded by an Energenic subsidiary that owns and operates a central energy center and energy distribution system for a hotel, casino and entertainment complex in Atlantic City, New Jersey (see Note 15 to the consolidated financial statements). This charge is being excluded from Economic Earnings until the total economic impact of the proceedings are realized. Energenic management expects the proceedings to be concluded during 2015.
|
•
|
For the twelve months ended December 31, 2013, Economic Earnings excludes a $0.8 million loss (net of tax) from affiliated companies, not part of ongoing operations. This adjustment is the result of the termination of the contract at LVE Energy Partners, LLC ("LVE") and is being excluded because all of the assets of LVE have been sold and LVE is no longer considered part of the ongoing operations of the Company. LVE was dissolved prior to December 31, 2013; as such, there was no gain/loss from affiliated companies not part of ongoing operations for the twelve months ended December 31, 2014.
|
•
|
For the twelve months ended December 31, 2012, Economic Earnings excludes a $1.4 million impairment charge due to a reduction in the expected cash flows to be received from a solar generating facility, net of tax, determined using a statutory tax rate of 41% (see Note 1 to the consolidated financial statements).
|
•
|
The income contribution from SJRG increased $16.6 million to net income of $9.0 million due primarily to higher daily trading margins and higher storage volumes sold as described in "Gross Margin - Energy Group" below.
|
•
|
The income contribution from SJG increased $4.2 million to $66.5 million due primarily to increases in the accelerated infrastructure programs and customer growth over the prior year.
|
•
|
The income contribution from Marina decreased $14.4 million to $24.0 million due primarily to a reserve for uncollectible accounts established at one of Energenic's operating subsidiaries, of which Marina has a 50% equity interest (see Note 15 to the consolidated financial statements), along with the impact of the investment tax credits available on renewable energy facilities as compared to the prior year.
|
•
|
The income contribution from Marina increased $10.2 million to $38.3 million due primarily to the impact of the investment tax credits available on renewable energy facilities as compared to the prior year.
|
•
|
The income contribution from SJG increased $4.0 million to $62.2 million due primarily to increases in the accelerated infrastructure programs and customer growth over the prior year.
|
•
|
The income contribution from SJRG decreased $12.1 million to a net loss of $7.5 million due primarily to lower daily trading margins as described in Gross Margin - Nonutility below.
|
|
2014
|
2013
|
2012
|
||||||
|
|
|
|
||||||
Income from Continuing Operations
|
$
|
97,628
|
|
$
|
82,389
|
|
$
|
92,776
|
|
Minus/Plus:
|
|
|
|
|
|
|
|||
Unrealized Mark-to-Market Losses/(Gains) on Derivatives
|
4,500
|
|
14,058
|
|
(854
|
)
|
|||
Realized Losses/(Gains) on Inventory Injection Hedges
|
427
|
|
(4
|
)
|
(11
|
)
|
|||
Net Loss from Affiliated Companies, Not Part of Ongoing Operations (A)
|
—
|
|
751
|
|
—
|
|
|||
Unrealized Loss on Property, Plant and Equipment
|
—
|
|
—
|
|
1,402
|
|
|||
Net Loss from Affiliated Companies (B)
|
1,524
|
|
—
|
|
—
|
|
|||
Other (C)
|
(100
|
)
|
(100
|
)
|
—
|
|
|||
|
|
|
|
||||||
Economic Earnings
|
$
|
103,979
|
|
$
|
97,094
|
|
$
|
93,313
|
|
|
|
|
|
||||||
Earnings per Share from Continuing Operations
|
$
|
2.94
|
|
$
|
2.57
|
|
$
|
3.01
|
|
Minus/Plus:
|
|
|
|
|
|
|
|||
Unrealized Mark-to-Market Losses/(Gains) on Derivatives
|
0.13
|
|
0.44
|
|
(0.03
|
)
|
|||
Realized Losses on Inventory Injection Hedges
|
0.01
|
|
—
|
|
—
|
|
|||
Net Loss from Affiliated Companies, Not Part of Ongoing Operations (A)
|
—
|
|
0.02
|
|
—
|
|
|||
Unrealized Loss on Property, Plant and Equipment
|
—
|
|
—
|
|
0.05
|
|
|||
Net Loss from Affiliated Companies (B)
|
0.05
|
|
—
|
|
—
|
|
|||
|
|
|
|
||||||
Economic Earnings per Share
|
$
|
3.13
|
|
$
|
3.03
|
|
$
|
3.03
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Losses on energy related commodity contracts
|
$
|
(6,592
|
)
|
|
$
|
(25,823
|
)
|
|
$
|
(193
|
)
|
(Losses) gains on interest rate contracts
|
(467
|
)
|
|
2,760
|
|
|
660
|
|
|||
Total before income taxes
|
(7,059
|
)
|
|
(23,063
|
)
|
|
467
|
|
|||
Income taxes (D)
|
2,824
|
|
|
9,455
|
|
|
(191
|
)
|
|||
Total after income taxes
|
(4,235
|
)
|
|
(13,608
|
)
|
|
276
|
|
|||
Unrealized mark-to-market (losses) gains on derivatives
held by affiliated companies, net of tax (D)
|
(265
|
)
|
|
(450
|
)
|
|
578
|
|
|||
Total unrealized mark-to-market (losses) gains on derivatives
|
(4,500
|
)
|
|
(14,058
|
)
|
|
854
|
|
|||
Realized (losses) gains on inventory injection hedges, net of tax (D)
|
(427
|
)
|
|
4
|
|
|
11
|
|
|||
Net Loss from Affiliated Companies, Not Part of Ongoing Operations (A)
|
—
|
|
|
(751
|
)
|
|
—
|
|
|||
Unrealized Loss on Property, Plant and Equipment
|
—
|
|
|
—
|
|
|
(1,402
|
)
|
|||
Net Loss from Affiliated Companies (B)
|
(1,524
|
)
|
|
—
|
|
|
—
|
|
|||
Other (C)
|
100
|
|
|
100
|
|
|
—
|
|
|||
Total reconciling items between income from continuing
operations and economic earnings
|
$
|
(6,351
|
)
|
|
$
|
(14,705
|
)
|
|
$
|
(537
|
)
|
|
December 31, 2014
|
|
December 31, 2013
|
|
December 31, 2012
|
|||||||||||||||
Utility Throughput - dth:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Firm Sales -
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
24,508
|
|
|
18
|
%
|
|
22,070
|
|
|
20
|
%
|
|
18,586
|
|
|
14
|
%
|
|||
Commercial
|
5,530
|
|
|
4
|
%
|
|
5,408
|
|
|
5
|
%
|
|
4,733
|
|
|
4
|
%
|
|||
Industrial
|
283
|
|
|
—
|
|
|
292
|
|
|
—
|
|
|
258
|
|
|
1
|
%
|
|||
Cogeneration and electric generation
|
1,035
|
|
|
1
|
%
|
|
1,562
|
|
|
1
|
%
|
|
1,598
|
|
|
1
|
%
|
|||
Firm Transportation -
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
3,291
|
|
|
2
|
%
|
|
3,319
|
|
|
3
|
%
|
|
2,335
|
|
|
2
|
%
|
|||
Commercial
|
7,103
|
|
|
5
|
%
|
|
6,780
|
|
|
6
|
%
|
|
5,587
|
|
|
4
|
%
|
|||
Industrial
|
13,168
|
|
|
10
|
%
|
|
13,051
|
|
|
12
|
%
|
|
12,892
|
|
|
10
|
%
|
|||
Cogeneration and electric generation
|
10,307
|
|
|
7
|
%
|
|
7,977
|
|
|
7
|
%
|
|
9,816
|
|
|
8
|
%
|
|||
Total Firm Throughput
|
65,225
|
|
|
47
|
%
|
|
60,459
|
|
|
54
|
%
|
|
55,805
|
|
|
44
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interruptible Sales
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||
Interruptible Transportation
|
1,401
|
|
|
1
|
%
|
|
1,452
|
|
|
1
|
%
|
|
1,361
|
|
|
1
|
%
|
|||
Off-System
|
9,411
|
|
|
7
|
%
|
|
9,685
|
|
|
9
|
%
|
|
8,318
|
|
|
6
|
%
|
|||
Capacity Release
|
62,193
|
|
|
45
|
%
|
|
40,088
|
|
|
36
|
%
|
|
63,998
|
|
|
49
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Throughput - Utility
|
138,230
|
|
|
100
|
%
|
|
111,698
|
|
|
100
|
%
|
|
129,484
|
|
|
100
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Utility Operating Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Firm Sales-
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
$
|
279,797
|
|
|
56
|
%
|
|
$
|
246,227
|
|
|
56
|
%
|
|
$
|
248,547
|
|
|
59
|
%
|
Commercial
|
63,584
|
|
|
13
|
%
|
|
57,126
|
|
|
13
|
%
|
|
53,726
|
|
|
13
|
%
|
|||
Industrial
|
4,070
|
|
|
1
|
%
|
|
3,485
|
|
|
1
|
%
|
|
2,872
|
|
|
—
|
|
|||
Cogeneration and electric generation
|
6,037
|
|
|
1
|
%
|
|
8,144
|
|
|
2
|
%
|
|
6,562
|
|
|
2
|
%
|
|||
Firm Transportation -
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
20,648
|
|
|
4
|
%
|
|
21,392
|
|
|
5
|
%
|
|
16,388
|
|
|
4
|
%
|
|||
Commercial
|
30,850
|
|
|
6
|
%
|
|
28,165
|
|
|
6
|
%
|
|
24,217
|
|
|
6
|
%
|
|||
Industrial
|
25,737
|
|
|
5
|
%
|
|
23,551
|
|
|
5
|
%
|
|
21,637
|
|
|
5
|
%
|
|||
Cogeneration and electric generation
|
9,531
|
|
|
2
|
%
|
|
6,982
|
|
|
2
|
%
|
|
7,555
|
|
|
2
|
%
|
|||
Total Firm Revenues
|
440,254
|
|
|
88
|
%
|
|
395,072
|
|
|
90
|
%
|
|
381,504
|
|
|
91
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interruptible Sales
|
15
|
|
|
—
|
|
|
342
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|||
Interruptible Transportation
|
1,694
|
|
|
—
|
|
|
1,827
|
|
|
—
|
|
|
1,546
|
|
|
—
|
|
|||
Off-System
|
52,809
|
|
|
11
|
%
|
|
41,488
|
|
|
9
|
%
|
|
30,249
|
|
|
7
|
%
|
|||
Capacity Release
|
5,835
|
|
|
1
|
%
|
|
6,384
|
|
|
1
|
%
|
|
7,322
|
|
|
2
|
%
|
|||
Other
|
1,268
|
|
|
—
|
|
|
1,367
|
|
|
—
|
|
|
1,201
|
|
|
—
|
|
|||
|
501,875
|
|
|
100
|
%
|
|
446,480
|
|
|
100
|
%
|
|
421,874
|
|
|
100
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Intercompany Sales
|
1,123
|
|
|
|
|
1,560
|
|
|
|
|
1,056
|
|
|
|
||||||
Total Utility Operating Revenue
|
500,752
|
|
|
|
|
444,920
|
|
|
|
|
420,818
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of sales
|
230,093
|
|
|
|
|
198,521
|
|
|
|
|
187,655
|
|
|
|
||||||
Conservation recoveries *
|
24,836
|
|
|
|
|
|
15,909
|
|
|
|
|
|
9,019
|
|
|
|
|
|||
Remediation Adjustment Clause recoveries *
|
8,255
|
|
|
|
|
|
8,137
|
|
|
|
|
|
7,823
|
|
|
|
|
|||
Energy Efficiency Tracker (EET) recoveries*
|
4,169
|
|
|
|
|
4,509
|
|
|
|
|
3,350
|
|
|
|
||||||
Revenue taxes
|
1,141
|
|
|
|
|
|
5,247
|
|
|
|
|
|
5,974
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Utility Margin
|
$
|
232,258
|
|
|
|
|
$
|
212,597
|
|
|
|
|
$
|
206,997
|
|
|
|
|||
Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
$
|
159,780
|
|
|
69
|
%
|
|
$
|
138,136
|
|
|
65
|
%
|
|
$
|
118,015
|
|
|
57
|
%
|
Commercial and industrial
|
65,492
|
|
|
29
|
%
|
|
57,495
|
|
|
27
|
%
|
|
51,048
|
|
|
25
|
%
|
|||
Cogeneration and electric generation
|
5,343
|
|
|
2
|
%
|
|
5,022
|
|
|
2
|
%
|
|
5,062
|
|
|
2
|
%
|
|||
Interruptible
|
81
|
|
|
—
|
|
|
114
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|||
Off-system & capacity release
|
3,023
|
|
|
1
|
%
|
|
2,070
|
|
|
1
|
%
|
|
2,044
|
|
|
1
|
%
|
|||
Other revenues
|
2,131
|
|
|
1
|
%
|
|
1,752
|
|
|
1
|
%
|
|
1,602
|
|
|
1
|
%
|
|||
Margin before incentive mechanisms
|
235,850
|
|
|
102
|
%
|
|
204,589
|
|
|
96
|
%
|
|
177,854
|
|
|
86
|
%
|
|||
CIRT mechanism
|
—
|
|
|
—
|
|
|
2,204
|
|
|
1
|
%
|
|
3,031
|
|
|
2
|
%
|
|||
CIP mechanism
|
(4,529
|
)
|
|
(2
|
)%
|
|
5,310
|
|
|
3
|
%
|
|
25,672
|
|
|
12
|
%
|
|||
EET mechanism
|
937
|
|
|
—
|
|
|
494
|
|
|
—
|
|
|
440
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Utility Margin**
|
$
|
232,258
|
|
|
100
|
%
|
|
$
|
212,597
|
|
|
100
|
%
|
|
$
|
206,997
|
|
|
100
|
%
|
Number of Customers at Year End:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
342,155
|
|
|
93
|
%
|
|
337,936
|
|
|
93
|
%
|
|
333,347
|
|
|
93
|
%
|
|||
Commercial
|
24,253
|
|
|
7
|
%
|
|
23,873
|
|
|
7
|
%
|
|
23,506
|
|
|
7
|
%
|
|||
Industrial
|
446
|
|
|
—
|
|
|
447
|
|
|
—
|
|
|
453
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Customers
|
366,854
|
|
|
100
|
%
|
|
362,256
|
|
|
100
|
%
|
|
357,306
|
|
|
100
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Annual Degree Days***
|
4,872
|
|
|
|
|
4,658
|
|
|
|
|
3,862
|
|
|
|
|
|
2014
|
2013
|
Change
|
||||||
|
|
|
|
||||||
SJE Retail Gas Revenue
|
$
|
126.8
|
|
$
|
107.3
|
|
$
|
19.5
|
|
|
|
|
|
||||||
Add: Unrealized Losses (Subtract: Unrealized Gains)
|
0.8
|
|
0.1
|
|
0.7
|
|
|||
|
|
|
|
||||||
SJE Retail Gas Revenue, Excluding Unrealized Losses
|
$
|
127.6
|
|
$
|
107.4
|
|
$
|
20.2
|
|
|
2014
|
2013
|
Change
|
||||||
|
|
|
|
||||||
SJE Retail Electric Revenue
|
$
|
119.0
|
|
$
|
123.7
|
|
$
|
(4.7
|
)
|
|
|
|
|
||||||
Add: Unrealized Losses (Subtract: Unrealized Gains)
|
0.9
|
|
0.7
|
|
0.2
|
|
|||
|
|
|
|
||||||
SJE Retail Electric Revenue, Excluding Unrealized Losses (Gains)
|
$
|
119.9
|
|
$
|
124.4
|
|
$
|
(4.5
|
)
|
|
2014
|
2013
|
Change
|
||||||
|
|
|
|
||||||
SJRG Revenue
|
$
|
76.9
|
|
$
|
0.7
|
|
$
|
76.2
|
|
|
|
|
|
||||||
Add: Unrealized Losses (Subtract: Unrealized Gains)
|
4.9
|
|
25.1
|
|
(20.2
|
)
|
|||
Add: Realized Losses (Subtract: Realized Gains) on Inventory Injection Hedges
|
0.7
|
|
—
|
|
0.7
|
|
|||
|
|
|
|
||||||
SJRG Revenue, Excluding Unrealized Losses (Gains) and Realized Losses (Gains) on Inventory Injection Hedges
|
$
|
82.5
|
|
$
|
25.8
|
|
$
|
56.7
|
|
|
2013
|
2012
|
Change
|
||||||
|
|
|
|
||||||
SJE Retail Electric Revenue
|
$
|
123.7
|
|
$
|
138.3
|
|
$
|
(14.6
|
)
|
|
|
|
|
|
|||||
Add: Unrealized Losses (Subtract: Unrealized Gains)
|
0.7
|
|
(9.1
|
)
|
9.8
|
|
|||
|
|
|
|
|
|
|
|||
SJE Retail Electric Revenue, Excluding Unrealized Losses (Gains)
|
$
|
124.4
|
|
$
|
129.2
|
|
$
|
(4.8
|
)
|
|
2013
|
2012
|
Change
|
||||||
|
|
|
|
||||||
SJRG Revenue
|
$
|
0.7
|
|
$
|
17.2
|
|
$
|
(16.5
|
)
|
|
|
|
|
||||||
Add: Unrealized Losses (Subtract: Unrealized Gains)
|
25.1
|
|
10.0
|
|
15.1
|
|
|||
|
|
|
|
||||||
SJRG Revenue, Excluding Unrealized Losses (Gains) and Realized Losses (Gains) on Inventory Injection Hedges
|
$
|
25.8
|
|
$
|
27.2
|
|
$
|
(1.4
|
)
|
•
|
Gross Margin from SJE's retail gas and other operations increased $0.9 million in 2014 compared with 2013. Excluding the impact of the net change in unrealized gains/losses recorded on forward financial contracts due to price volatility of $0.7 million as discussed above, gross margin increased $1.6 million in 2014 compared with 2013. This increase was primarily due to increases in sales volumes as discussed in "Operating Revenues-Energy Group" above. Excluding the impact of the net change in unrealized gains/losses recorded on forward financial contracts as discussed above, gross margin as a percentage of Operating Revenues did not change significantly in 2014 compared with 2013.
|
•
|
Gross margin from SJE's retail electric operations decreased $0.1 million in 2014 compared with 2013. Excluding the impact of the net change in unrealized gains/losses recorded on forward financial contracts due to price volatility of $0.2 million as discussed above, gross margin increased $0.1 million in 2014 compared with 2013, which does not represent a significant change. Excluding the impact of the unrealized gains/losses discussed above, gross margin as a percentage of Operating Revenues did not change significantly in 2014 compared with 2013.
|
•
|
Gross margin from the wholesale energy operations of SJRG increased $48.9 million in 2014 compared with 2013. Excluding the impact of the net change in unrealized gains and losses recorded on forward financial contracts due to price volatility of $(20.2) million and adjusting for the change in realized gains and losses on all hedges attributed to inventory injection transactions of $0.7 million to align them with the related cost of inventory in the period of withdrawal as discussed above, gross margin for SJRG increased $29.4 million. The increase in gross margin was mainly due to higher margins on daily energy trading activities along with an increase in storage volumes sold as discussed in "Operating Revenues-Energy Group" above.
|
•
|
Gross Margin from on-site energy production at Marina increased $15.6 million in 2014 compared with 2013. Gross margin as a percentage of Operating Revenues increased 14.3 percentage points in 2014 compared with 2013. This was due mainly to the impact of several new, higher margin solar projects added during 2014. Also contributing to the increase is higher hot water production and electricity sales at the wholly-owned thermal facility due to colder temperatures during the first quarter of 2014 as compared to the prior year.
|
•
|
Gross margin from the appliance service operations at SJESP decreased $2.1 million in 2014 compared with 2013. Gross margin as a percentage of Operating Revenues decreased 5.1 percentage points in 2014 compared with 2013. These decreases are mainly due to lower installation jobs compared to the prior year.
|
•
|
Gross Margin from SJE's retail gas and other operations increased $1.3 million in 2013 compared with 2012. Excluding the impact of the net change in unrealized gains/losses recorded on forward financial contracts due to price volatility of $(0.7) million as discussed above, gross margin increased $2.0 million in 2013, compared with 2012. This increase was primarily due to the impact of acquiring a retail gas marketing book in the third quarter of 2012. Excluding the impact of the net change in unrealized gains/losses recorded on forward financial contracts as discussed above, gross margin as a percentage of Operating Revenues did not change significantly in 2013 compared with 2012.
|
•
|
Gross margin from SJE's retail electric operations decreased $12.0 million in 2013, compared with 2012. Excluding the impact of the net change in unrealized gains/losses recorded on forward financial contracts due to price volatility of $9.8 million as discussed above, gross margin decreased $2.2 million in 2013 compared with 2012 mainly due to a significant school board contract that expired in the second quarter of 2012 (See Operating Revenues - Nonutility). Excluding the impact of the unrealized gains/losses discussed above, gross margin as a percentage of Operating Revenues did not change significantly in 2013 compared with 2012.
|
•
|
Gross margin from the wholesale energy operations of SJRG decreased $36.0 million in 2013 compared with 2012. Excluding the impact of the net change in unrealized gains/losses recorded on forward financial contracts of $15.1 million as discussed above, gross margin for SJRG decreased $20.9 million. The decrease in gross margin was mainly due to lower daily trading margins in 2013 as compared with 2012.
|
•
|
Gross Margin from on-site energy production at Marina increased $5.4 million in 2013 compared with 2012. Gross margin as a percentage of Operating Revenues increased 3.9 percentage points in 2013 compared with 2012. This was due mainly to the impact of several new, higher margin renewable energy projects added over the last twelve months.
|
•
|
Gross margin from the appliance service operations at SJESP increased $2.1 million in 2013 compared with 2012. Gross margin as a percentage of Operating Revenues increased 14.9 percentage points in 2013 compared with 2012. These increases are mainly due to the significant decline in personnel costs that resulted from an initiative to right-size our workforce.
|
|
2014 vs. 2013
|
2013 vs. 2012
|
||||
Gas Utility Operations
|
$
|
16,623
|
|
$
|
7,380
|
|
Nonutility:
|
|
|
||||
Energy Group:
|
|
|
||||
Wholesale Energy Operations
|
1,870
|
|
(560
|
)
|
||
Retail Gas and Other Operations
|
776
|
|
(137
|
)
|
||
Retail Electric Operations
|
325
|
|
799
|
|
||
Subtotal Energy Group
|
2,971
|
|
102
|
|
||
Energy Services:
|
|
|
||||
On-Site Energy Production
|
1,083
|
|
100
|
|
||
Appliance Service Operations
|
530
|
|
(1,108
|
)
|
||
Subtotal Energy Services
|
1,613
|
|
(1,008
|
)
|
||
Total Nonutility
|
4,584
|
|
(906
|
)
|
||
Intercompany Eliminations and Other
|
(1,152
|
)
|
88
|
|
||
Total Operations Expense
|
$
|
20,055
|
|
$
|
6,562
|
|
|
2014 vs. 2013
|
2013 vs. 2012
|
||||
Maintenance
|
$
|
321
|
|
$
|
(479
|
)
|
Depreciation
|
$
|
13,367
|
|
$
|
8,301
|
|
Energy and Other Taxes
|
$
|
(4,096
|
)
|
$
|
(170
|
)
|
Company
|
|
Total Facility
|
|
Usage
|
|
Available Liquidity
|
|
Expiration Date
|
||||||
SJG:
|
|
|
|
|
|
|
|
|
||||||
Commercial Paper Program/Revolving Credit Facility
|
|
$
|
200,000
|
|
|
$
|
101,400
|
|
|
$
|
98,600
|
|
|
May 2018
|
Uncommitted Bank Lines
|
|
10,000
|
|
|
—
|
|
|
10,000
|
|
|
August 2015
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total SJG
|
|
210,000
|
|
|
101,400
|
|
|
108,600
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
SJI:
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Revolving Credit Facility
|
|
400,000
|
|
|
157,900
|
|
|
242,100
|
|
|
February 2018 (A)
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total SJI
|
|
400,000
|
|
|
157,900
|
|
|
242,100
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total
|
|
$
|
610,000
|
|
|
$
|
259,300
|
|
|
$
|
350,700
|
|
|
|
|
|
Up to
|
Years
|
Years
|
More than
|
||||||||||
Contractual Cash Obligations
|
Total
|
1 Year
|
2 & 3
|
4 & 5
|
5 Years
|
||||||||||
|
|
|
|
|
|
||||||||||
Long-Term Debt
|
$
|
1,009,400
|
|
$
|
149,909
|
|
$
|
118,818
|
|
$
|
297,818
|
|
$
|
442,855
|
|
Interest on Long-Term Debt
|
298,915
|
|
33,103
|
|
60,796
|
|
52,039
|
|
152,977
|
|
|||||
Construction Obligations
|
66,379
|
|
66,379
|
|
—
|
|
—
|
|
—
|
|
|||||
Operating Leases
|
1,893
|
|
681
|
|
987
|
|
225
|
|
—
|
|
|||||
Commodity Supply Purchase Obligations
|
735,915
|
|
346,830
|
|
207,719
|
|
75,914
|
|
105,452
|
|
|||||
New Jersey Clean Energy Program
|
10,463
|
|
10,463
|
|
—
|
|
—
|
|
—
|
|
|||||
Other Purchase Obligations
|
1,319
|
|
1,319
|
|
—
|
|
—
|
|
—
|
|
|||||
Total Contractual Cash Obligations
|
$
|
2,124,284
|
|
$
|
608,684
|
|
$
|
388,320
|
|
$
|
425,996
|
|
$
|
701,284
|
|
Assets
|
|
|
|
|
||||||||
Source of Fair Value
|
Maturity
< 1 Year
|
Maturity
1 - 3 Years
|
Maturity
Beyond
3 Years
|
Total
|
||||||||
|
|
|
|
|
||||||||
Prices actively quoted
|
$
|
20,920
|
|
$
|
755
|
|
$
|
—
|
|
$
|
21,675
|
|
|
|
|
|
|
||||||||
Prices provided by other external sources
|
36,036
|
|
6,984
|
|
73
|
|
43,093
|
|
||||
|
|
|
|
|
||||||||
Prices based on internal models or other valuation methods
|
28,412
|
|
5,580
|
|
513
|
|
34,505
|
|
||||
|
|
|
|
|
||||||||
Total
|
$
|
85,368
|
|
$
|
13,319
|
|
$
|
586
|
|
$
|
99,273
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
||||||||
Source of Fair Value
|
Maturity
< 1 Year
|
Maturity
1 - 3 Years
|
Maturity
Beyond
3 Years
|
Total
|
||||||||
|
|
|
|
|
||||||||
Prices actively quoted
|
$
|
41,924
|
|
$
|
7,075
|
|
$
|
10
|
|
$
|
49,009
|
|
|
|
|
|
|
||||||||
Prices provided by other external sources
|
36,765
|
|
3,778
|
|
5
|
|
40,548
|
|
||||
|
|
|
|
|
||||||||
Prices based on internal models or other valuation methods
|
31,055
|
|
8,162
|
|
896
|
|
40,113
|
|
||||
|
|
|
|
|
||||||||
Total
|
$
|
109,744
|
|
$
|
19,015
|
|
$
|
911
|
|
$
|
129,670
|
|
Net Derivatives - Energy Related Liabilities, January 1, 2014
|
$
|
(17,346
|
)
|
Contracts Settled During 2014, Net
|
21,667
|
|
|
Other Changes in Fair Value from Continuing and New Contracts, Net
|
(34,718
|
)
|
|
|
|
||
Net Derivatives - Energy Related Liabilities, December 31, 2014
|
$
|
(30,397
|
)
|
Notional Amount
|
|
Fixed Interest Rate
|
|
Start Date
|
|
Maturity
|
|
Type of Debt
|
|
Obligor
|
||
$
|
14,500,000
|
|
|
3.905%
|
|
3/17/2006
|
|
1/15/2026
|
|
Tax-exempt
|
|
Marina
|
$
|
500,000
|
|
|
3.905%
|
|
3/17/2006
|
|
1/15/2026
|
|
Tax-exempt
|
|
Marina
|
$
|
330,000
|
|
|
3.905%
|
|
3/17/2006
|
|
1/15/2026
|
|
Tax-exempt
|
|
Marina
|
$
|
7,100,000
|
|
|
4.895%
|
|
2/1/2006
|
|
2/1/2016
|
|
Taxable
|
|
Marina
|
$
|
12,500,000
|
|
|
3.430%
|
|
12/1/2006
|
|
2/1/2036
|
|
Tax-exempt
|
|
SJG
|
$
|
12,500,000
|
|
|
3.430%
|
|
12/1/2006
|
|
2/1/2036
|
|
Tax-exempt
|
|
SJG
|
|
South Jersey Industries, Inc. and Subsidiaries
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Operating Revenues:
|
|
|
|
|
|
||||||
Utility
|
$
|
500,752
|
|
|
$
|
444,920
|
|
|
$
|
420,818
|
|
Nonutility
|
386,244
|
|
|
286,501
|
|
|
285,462
|
|
|||
Total Operating Revenues
|
886,996
|
|
|
731,421
|
|
|
706,280
|
|
|||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of Sales - (Excluding depreciation)
|
|
|
|
|
|
|
|
|
|||
- Utility
|
230,093
|
|
|
198,521
|
|
|
187,655
|
|
|||
- Nonutility
|
306,859
|
|
|
270,470
|
|
|
230,147
|
|
|||
Operations
|
140,260
|
|
|
120,205
|
|
|
113,643
|
|
|||
Maintenance
|
13,457
|
|
|
13,136
|
|
|
13,615
|
|
|||
Depreciation
|
63,004
|
|
|
49,637
|
|
|
41,336
|
|
|||
Energy and Other Taxes
|
5,720
|
|
|
9,816
|
|
|
9,986
|
|
|||
Total Operating Expenses
|
759,393
|
|
|
661,785
|
|
|
596,382
|
|
|||
Operating Income
|
127,603
|
|
|
69,636
|
|
|
109,898
|
|
|||
|
|
|
|
|
|
||||||
Other Income and Expense
|
11,819
|
|
|
10,979
|
|
|
11,104
|
|
|||
Interest Charges
|
(29,560
|
)
|
|
(18,825
|
)
|
|
(18,986
|
)
|
|||
Income Before Income Taxes
|
109,862
|
|
|
61,790
|
|
|
102,016
|
|
|||
Income Taxes
|
(4,449
|
)
|
|
19,014
|
|
|
(11,479
|
)
|
|||
Equity in (Loss) Earnings of Affiliated Companies
|
(7,785
|
)
|
|
1,585
|
|
|
2,239
|
|
|||
Income from Continuing Operations
|
97,628
|
|
|
82,389
|
|
|
92,776
|
|
|||
Loss from Discontinued Operations - (Net of tax benefit)
|
(582
|
)
|
|
(796
|
)
|
|
(1,168
|
)
|
|||
Net Income
|
$
|
97,046
|
|
|
$
|
81,593
|
|
|
$
|
91,608
|
|
|
|
|
|
|
|
||||||
Basic Earnings per Common Share:
|
|
|
|
|
|
|
|
|
|||
Continuing Operations
|
$
|
2.95
|
|
|
$
|
2.58
|
|
|
$
|
3.02
|
|
Discontinued Operations
|
(0.02
|
)
|
|
(0.03
|
)
|
|
(0.04
|
)
|
|||
Basic Earnings per Common Share
|
$
|
2.93
|
|
|
$
|
2.55
|
|
|
$
|
2.98
|
|
|
|
|
|
|
|
||||||
Average Shares of Common Stock Outstanding - Basic
|
33,139
|
|
|
31,989
|
|
|
30,744
|
|
|||
|
|
|
|
|
|
||||||
Diluted Earnings per Common Share:
|
|
|
|
|
|
|
|
|
|||
Continuing Operations
|
$
|
2.94
|
|
|
$
|
2.57
|
|
|
$
|
3.01
|
|
Discontinued Operations
|
(0.02
|
)
|
|
(0.02
|
)
|
|
(0.04
|
)
|
|||
Diluted Earnings per Common Share
|
$
|
2.92
|
|
|
$
|
2.55
|
|
|
$
|
2.97
|
|
|
|
|
|
|
|
||||||
Average Shares of Common Stock Outstanding - Diluted
|
33,214
|
|
|
32,046
|
|
|
30,824
|
|
|
South Jersey Industries, Inc. and Subsidiaries
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Pro Forma Earnings Per Share
|
|
|
|
|
|
||||||
Based on Approved Stock Split (See Note 19)
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Basic Earnings per Common Share:
|
|
|
|
|
|
||||||
Continuing Operations
|
$
|
1.47
|
|
|
$
|
1.29
|
|
|
$
|
1.51
|
|
Discontinued Operations
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(0.02
|
)
|
|||
Basic Earnings per Common Share
|
$
|
1.46
|
|
|
$
|
1.28
|
|
|
$
|
1.49
|
|
|
|
|
|
|
|
||||||
Average Shares of Common Stock Outstanding - Basic
|
66,278
|
|
|
63,978
|
|
|
61,488
|
|
|||
|
|
|
|
|
|
||||||
Diluted Earnings per Common Share:
|
|
|
|
|
|
||||||
Continuing Operations
|
$
|
1.47
|
|
|
$
|
1.29
|
|
|
$
|
1.50
|
|
Discontinued Operations
|
(0.01
|
)
|
|
(0.02
|
)
|
|
(0.02
|
)
|
|||
Diluted Earnings per Common Share
|
$
|
1.46
|
|
|
$
|
1.27
|
|
|
$
|
1.48
|
|
|
|
|
|
|
|
||||||
Average Shares of Common Stock Outstanding - Diluted
|
66,428
|
|
|
64,092
|
|
|
61,648
|
|
|||
|
|
|
|
|
|
||||||
Dividends Declared per Common Share
|
$
|
0.96
|
|
|
$
|
0.90
|
|
|
$
|
0.83
|
|
|
South Jersey Industries, Inc. and Subsidiaries
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net Income
|
$
|
97,046
|
|
|
$
|
81,593
|
|
|
$
|
91,608
|
|
|
|
|
|
|
|
||||||
Other Comprehensive (Loss) Income, Net of Tax:*
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||||
Postretirement Liability Adjustment
|
(9,160
|
)
|
|
4,934
|
|
|
(1,842
|
)
|
|||
Unrealized (Loss) Gain on Available-for-Sale Securities
|
(472
|
)
|
|
103
|
|
|
500
|
|
|||
Unrealized Gain (Loss) on Derivatives - Other
|
247
|
|
|
265
|
|
|
(92
|
)
|
|||
Other Comprehensive (Loss) Income of Affiliated Companies
|
(113
|
)
|
|
5,043
|
|
|
(1,233
|
)
|
|||
|
|
|
|
|
|
||||||
Other Comprehensive (Loss) Income - Net of Tax*
|
(9,498
|
)
|
|
10,345
|
|
|
(2,667
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive Income
|
87,548
|
|
|
91,938
|
|
|
88,941
|
|
|
South Jersey Industries, Inc. and Subsidiaries
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net Income
|
$
|
97,046
|
|
|
$
|
81,593
|
|
|
$
|
91,608
|
|
Loss from Discontinued Operations
|
582
|
|
|
796
|
|
|
1,168
|
|
|||
Income from Continuing Operations
|
97,628
|
|
|
82,389
|
|
|
92,776
|
|
|||
Adjustments to Reconcile Income from Continuing Operations to Net Cash Provided by Operating Activities:
|
|
|
|
|
|
||||||
Depreciation and Amortization
|
78,511
|
|
|
64,890
|
|
|
55,089
|
|
|||
Net Unrealized Loss on Derivatives - Energy Related
|
6,592
|
|
|
25,823
|
|
|
193
|
|
|||
Unrealized Loss (Gain) on Derivatives - Other
|
467
|
|
|
(2,760
|
)
|
|
(660
|
)
|
|||
Unrealized Loss on Property, Plant and Equipment
|
—
|
|
|
—
|
|
|
3,506
|
|
|||
Provision for Losses on Accounts Receivable
|
9,519
|
|
|
4,245
|
|
|
4,932
|
|
|||
CIP Receivable/Payable
|
15,226
|
|
|
21,160
|
|
|
(18,106
|
)
|
|||
Deferred Gas Costs - Net of Recoveries
|
(44,976
|
)
|
|
5,473
|
|
|
25,050
|
|
|||
Deferred SBC Costs - Net of Recoveries
|
11,048
|
|
|
2,393
|
|
|
(4,183
|
)
|
|||
Stock-Based Compensation Expense
|
1,893
|
|
|
3,001
|
|
|
2,992
|
|
|||
Deferred and Noncurrent Income Taxes - Net
|
1,670
|
|
|
(21,549
|
)
|
|
20,306
|
|
|||
Environmental Remediation Costs - Net
|
(8,265
|
)
|
|
(367
|
)
|
|
(186
|
)
|
|||
Gas Plant Cost of Removal
|
(4,848
|
)
|
|
(6,092
|
)
|
|
(2,133
|
)
|
|||
Pension Contribution
|
—
|
|
|
(12,700
|
)
|
|
(25,000
|
)
|
|||
Changes in:
|
|
|
|
|
|
||||||
Accounts Receivable
|
(14,323
|
)
|
|
(67,825
|
)
|
|
(59,701
|
)
|
|||
Inventories
|
(4,787
|
)
|
|
(2,449
|
)
|
|
13,481
|
|
|||
Prepaid and Accrued Taxes - Net
|
(5,822
|
)
|
|
17,703
|
|
|
(4,635
|
)
|
|||
Accounts Payable and Other Accrued Liabilities
|
27,429
|
|
|
49,444
|
|
|
18,829
|
|
|||
Derivatives - Energy Related
|
169
|
|
|
1,500
|
|
|
306
|
|
|||
Other Assets and Liabilities
|
(5,444
|
)
|
|
(3,769
|
)
|
|
(4,211
|
)
|
|||
Cash Flows from Discontinued Operations
|
(355
|
)
|
|
(975
|
)
|
|
(819
|
)
|
|||
|
|
|
|
|
|
||||||
Net Cash Provided by Operating Activities
|
161,332
|
|
|
159,535
|
|
|
117,826
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
||||
Capital Expenditures
|
(342,578
|
)
|
|
(316,644
|
)
|
|
(253,845
|
)
|
|||
Proceeds from Sale of Property, Plant and Equipment
|
53
|
|
|
—
|
|
|
29
|
|
|||
Net (Purchase of) Proceeds from Sale of Restricted Investments in Margin Accounts
|
(22,337
|
)
|
|
(25,164
|
)
|
|
755
|
|
|||
Investment in Long-Term Receivables
|
(13,024
|
)
|
|
(7,182
|
)
|
|
(6,243
|
)
|
|||
Proceeds from Long-Term Receivables
|
6,544
|
|
|
5,764
|
|
|
8,182
|
|
|||
Purchase of Company Owned Life Insurance
|
(1,250
|
)
|
|
(5,149
|
)
|
|
(4,547
|
)
|
|||
Investment in Affiliate
|
—
|
|
|
(2,973
|
)
|
|
(39,431
|
)
|
|||
Advances on Notes Receivable - Affiliate
|
(7,521
|
)
|
|
(19,349
|
)
|
|
(67,943
|
)
|
|||
Repayment of Notes Receivable - Affiliate
|
5,094
|
|
|
124,946
|
|
|
13,402
|
|
|||
Other
|
—
|
|
|
(41
|
)
|
|
(6,276
|
)
|
|||
|
|
|
|
|
|
||||||
Net Cash Used in Investing Activities
|
(375,019
|
)
|
|
(245,792
|
)
|
|
(355,917
|
)
|
|||
|
|
|
|
|
|
|
South Jersey Industries, Inc. and Subsidiaries
|
||||||
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
||||
Property, Plant and Equipment:
|
|
|
|
||||
Utility Plant, at original cost
|
$
|
2,002,966
|
|
|
$
|
1,816,804
|
|
Accumulated Depreciation
|
(413,597
|
)
|
|
(392,029
|
)
|
||
Nonutility Property and Equipment, at cost
|
622,079
|
|
|
486,332
|
|
||
Accumulated Depreciation
|
(77,345
|
)
|
|
(52,009
|
)
|
||
|
|
|
|
||||
Property, Plant and Equipment - Net
|
2,134,103
|
|
|
1,859,098
|
|
||
|
|
|
|
||||
Investments:
|
|
|
|
|
|
||
Available-for-Sale Securities
|
8,922
|
|
|
8,716
|
|
||
Restricted
|
65,451
|
|
|
43,115
|
|
||
Investment in Affiliates
|
68,351
|
|
|
78,273
|
|
||
|
|
|
|
||||
Total Investments
|
142,724
|
|
|
130,104
|
|
||
|
|
|
|
||||
Current Assets:
|
|
|
|
|
|
||
Cash and Cash Equivalents
|
4,171
|
|
|
3,818
|
|
||
Accounts Receivable
|
251,892
|
|
|
253,566
|
|
||
Unbilled Revenues
|
62,608
|
|
|
47,594
|
|
||
Provision for Uncollectibles
|
(7,910
|
)
|
|
(5,854
|
)
|
||
Notes Receivable - Affiliate
|
14,657
|
|
|
8,908
|
|
||
Natural Gas in Storage, average cost
|
63,246
|
|
|
57,786
|
|
||
Materials and Supplies, average cost
|
2,125
|
|
|
2,798
|
|
||
Deferred Income Taxes - Net
|
57,748
|
|
|
30,609
|
|
||
Prepaid Taxes
|
14,106
|
|
|
9,431
|
|
||
Derivatives - Energy Related Assets
|
85,368
|
|
|
56,327
|
|
||
Other Prepayments and Current Assets
|
18,686
|
|
|
17,915
|
|
||
|
|
|
|
||||
Total Current Assets
|
566,697
|
|
|
482,898
|
|
||
|
|
|
|
||||
Regulatory and Other Noncurrent Assets:
|
|
|
|
|
|
||
Regulatory Assets
|
357,160
|
|
|
296,081
|
|
||
Derivatives - Energy Related Assets
|
13,905
|
|
|
26,451
|
|
||
Unamortized Debt Issuance Costs
|
9,795
|
|
|
7,803
|
|
||
Notes Receivable - Affiliate
|
36,799
|
|
|
39,907
|
|
||
Contract Receivables
|
19,236
|
|
|
14,595
|
|
||
Notes Receivable
|
7,882
|
|
|
7,882
|
|
||
Other
|
61,124
|
|
|
60,036
|
|
||
|
|
|
|
||||
Total Regulatory and Other Noncurrent Assets
|
505,901
|
|
|
452,755
|
|
||
|
|
|
|
||||
Total Assets
|
$
|
3,349,425
|
|
|
$
|
2,924,855
|
|
|
2014
|
|
2013
|
||||
Capitalization and Liabilities
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common Stock: Par Value $1.25 per share; Authorized 60,000,000 shares; Outstanding Shares: 34,167,430 (2014) and 32,715,042 (2013)
|
|
|
|
||||
Balance at Beginning of Year
|
$
|
40,894
|
|
|
$
|
39,567
|
|
Common Stock Issued or Granted Under Stock Plans
|
1,815
|
|
|
1,327
|
|
||
Balance at End of Year
|
42,709
|
|
|
40,894
|
|
||
Premium on Common Stock
|
480,928
|
|
|
401,011
|
|
||
Treasury Stock (at par)
|
(165
|
)
|
|
(186
|
)
|
||
Accumulated Other Comprehensive Loss
|
(30,258
|
)
|
|
(20,760
|
)
|
||
Retained Earnings
|
439,218
|
|
|
406,041
|
|
||
|
|
|
|
||||
Total Equity
|
932,432
|
|
|
827,000
|
|
||
|
|
|
|
||||
Long-Term Debt
|
859,491
|
|
|
680,400
|
|
||
|
|
|
|
||||
Total Capitalization
|
1,791,923
|
|
|
1,507,400
|
|
||
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
|
||
Notes Payable
|
245,700
|
|
|
353,900
|
|
||
Current Portion of Long-Term Debt
|
149,909
|
|
|
21,000
|
|
||
Accounts Payable
|
272,998
|
|
|
259,757
|
|
||
Customer Deposits and Credit Balances
|
17,958
|
|
|
15,546
|
|
||
Environmental Remediation Costs
|
30,430
|
|
|
16,695
|
|
||
Taxes Accrued
|
2,328
|
|
|
3,234
|
|
||
Derivatives - Energy Related Liabilities
|
109,744
|
|
|
77,993
|
|
||
Interest Accrued
|
7,088
|
|
|
6,363
|
|
||
Pension Benefits
|
1,550
|
|
|
1,275
|
|
||
Other Current Liabilities
|
12,480
|
|
|
9,210
|
|
||
|
|
|
|
||||
Total Current Liabilities
|
850,185
|
|
|
764,973
|
|
||
|
|
|
|
||||
Deferred Credits and Other Noncurrent Liabilities:
|
|
|
|
|
|
||
Deferred Income Taxes - Net
|
344,520
|
|
|
319,368
|
|
||
Investment Tax Credits
|
149
|
|
|
360
|
|
||
Pension and Other Postretirement Benefits
|
115,373
|
|
|
57,370
|
|
||
Environmental Remediation Costs
|
97,742
|
|
|
106,734
|
|
||
Asset Retirement Obligations
|
42,502
|
|
|
41,687
|
|
||
Derivatives - Energy Related Liabilities
|
19,926
|
|
|
22,131
|
|
||
Derivatives - Other
|
10,732
|
|
|
6,676
|
|
||
Regulatory Liabilities
|
41,899
|
|
|
60,949
|
|
||
Finance Obligation
|
19,659
|
|
|
20,656
|
|
||
Other
|
14,815
|
|
|
16,551
|
|
||
|
|
|
|
||||
Total Deferred Credits and Other Noncurrent Liabilities
|
707,317
|
|
|
652,482
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 15)
|
|
|
|
|
|
||
|
|
|
|
||||
Total Capitalization and Liabilities
|
$
|
3,349,425
|
|
|
$
|
2,924,855
|
|
|
South Jersey Industries, Inc. and Subsidiaries
|
|||||||||||||||||||||||
|
Years Ended December 31, 2012, 2013 & 2014
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Common Stock
|
|
Premium on Common Stock
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at January 1, 2012
|
|
$
|
37,765
|
|
|
$
|
273,303
|
|
|
$
|
(193
|
)
|
|
$
|
(28,438
|
)
|
|
$
|
341,677
|
|
|
$
|
624,114
|
|
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91,608
|
|
|
91,608
|
|
||||||
Other Comprehensive Loss, Net of Tax (a)
|
|
|
|
|
|
|
|
|
|
|
(2,667
|
)
|
|
|
|
|
(2,667
|
)
|
||||||
Common Stock Issued or Granted Under Stock Plans
|
|
1,802
|
|
|
72,504
|
|
|
11
|
|
|
|
|
|
(216
|
)
|
|
74,101
|
|
||||||
Cash Dividends Declared - Common Stock ($1.65 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(50,942
|
)
|
|
(50,942
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2012
|
|
39,567
|
|
|
345,807
|
|
|
(182
|
)
|
|
(31,105
|
)
|
|
382,127
|
|
|
736,214
|
|
||||||
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81,593
|
|
|
81,593
|
|
||||||
Other Comprehensive Income, Net of Tax (a)
|
|
|
|
|
|
|
|
|
|
|
10,345
|
|
|
|
|
|
10,345
|
|
||||||
Common Stock Issued or Granted Under Stock Plans
|
|
1,327
|
|
|
55,204
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
56,527
|
|
||||||
Cash Dividends Declared - Common Stock ($1.80 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(57,679
|
)
|
|
(57,679
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2013
|
|
40,894
|
|
|
401,011
|
|
|
(186
|
)
|
|
(20,760
|
)
|
|
406,041
|
|
|
827,000
|
|
||||||
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97,046
|
|
|
97,046
|
|
||||||
Other Comprehensive Loss, Net of Tax (a)
|
|
|
|
|
|
|
|
|
|
|
(9,498
|
)
|
|
|
|
|
(9,498
|
)
|
||||||
Common Stock Issued or Granted Under Stock Plans
|
|
1,815
|
|
|
79,917
|
|
|
21
|
|
|
|
|
|
|
|
|
81,753
|
|
||||||
Cash Dividends Declared - Common Stock ($1.92 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(63,869
|
)
|
|
(63,869
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2014
|
|
$
|
42,709
|
|
|
$
|
480,928
|
|
|
$
|
(165
|
)
|
|
$
|
(30,258
|
)
|
|
$
|
439,218
|
|
|
$
|
932,432
|
|
|
|
Postretirement
Liability
Adjustment
|
|
Unrealized Gain
(Loss) on
Derivatives-Other
|
|
Unrealized Gain
(Loss) on Available-
for-Sale Securities
|
|
Other
Comprehensive
Income (Loss) of
Affiliated
Companies
|
|
Accumulated
Other
Comprehensive
Loss
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at January 1, 2012
|
|
$
|
(21,595
|
)
|
|
$
|
(2,870
|
)
|
|
$
|
(206
|
)
|
|
$
|
(3,767
|
)
|
|
$
|
(28,438
|
)
|
Changes During Year
|
|
(1,842
|
)
|
|
(92
|
)
|
|
500
|
|
|
(1,233
|
)
|
|
(2,667
|
)
|
|||||
Balance at December 31, 2012
|
|
(23,437
|
)
|
|
(2,962
|
)
|
|
294
|
|
|
(5,000
|
)
|
|
(31,105
|
)
|
|||||
Changes During Year
|
|
4,934
|
|
|
265
|
|
|
103
|
|
|
5,043
|
|
|
10,345
|
|
|||||
Balance at December 31, 2013
|
|
(18,503
|
)
|
|
(2,697
|
)
|
|
397
|
|
|
43
|
|
|
(20,760
|
)
|
|||||
Changes During Year
|
|
(9,160
|
)
|
|
247
|
|
|
(472
|
)
|
|
(113
|
)
|
|
(9,498
|
)
|
|||||
Balance at December 31, 2014
|
|
$
|
(27,663
|
)
|
|
$
|
(2,450
|
)
|
|
$
|
(75
|
)
|
|
$
|
(70
|
)
|
|
$
|
(30,258
|
)
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
|
▪
|
South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey.
|
▪
|
South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial and industrial customers.
|
▪
|
South Jersey Resources Group, LLC (SJRG) markets natural gas storage, commodity and transportation assets on a wholesale basis in the mid-Atlantic, Appalachian and southern states.
|
▪
|
South Jersey Exploration, LLC (SJEX) owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania.
|
▪
|
Marina Energy, LLC (Marina) develops and operates on-site energy-related projects.
|
▪
|
South Jersey Energy Service Plus, LLC (SJESP) services residential and small commercial HVAC systems, installs small commercial HVAC systems, provides plumbing services and services appliances under warranty via a subcontractor arrangement as well as on a time and materials basis.
|
•
|
SJI Midstream, LLC was formed in 2014 to invest in a project to build a 100-mile natural gas pipeline in Pennsylvania and New Jersey.
|
|
|
2014
|
|
2013
|
||
|
|
|
|
|
||
AROs as of January 1,
|
|
41,687
|
|
|
39,385
|
|
Accretion
|
|
1,612
|
|
|
1,530
|
|
Additions
|
|
664
|
|
|
743
|
|
Settlements
|
|
(1,461
|
)
|
|
(1,630
|
)
|
Revisions in Estimated Cash Flows (A)
|
|
—
|
|
|
1,659
|
|
ARO's as of December 31,
|
|
42,502
|
|
|
41,687
|
|
2.
|
STOCK-BASED COMPENSATION PLAN:
|
|
Grant Date
|
|
Shares Outstanding
|
|
Fair Value Per Share
|
|
Expected Volatility
|
|
Risk-Free Interest Rate
|
|||||
Officers & Key Employees -
|
Jan. 2013 - TSR
|
|
24,797
|
|
|
$
|
44.38
|
|
|
21.1
|
%
|
|
0.40
|
%
|
|
Jan. 2013 - EPS
|
|
24,797
|
|
|
$
|
51.18
|
|
|
N/A
|
|
|
N/A
|
|
|
Jan. 2014 - TSR
|
|
31,172
|
|
|
$
|
42.62
|
|
|
20.0
|
%
|
|
0.80
|
%
|
|
Jan. 2014 - EPS
|
|
31,172
|
|
|
$
|
54.44
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Directors -
|
Jan. 2014
|
|
11,610
|
|
|
$
|
54.51
|
|
|
N/A
|
|
|
N/A
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Officers & Key Employees
|
$
|
1,260
|
|
|
$
|
2,236
|
|
|
$
|
2,096
|
|
Directors
|
633
|
|
|
765
|
|
|
896
|
|
|||
Total Cost
|
1,893
|
|
|
3,001
|
|
|
2,992
|
|
|||
|
|
|
|
|
|
||||||
Capitalized
|
(147
|
)
|
|
(237
|
)
|
|
(231
|
)
|
|||
Net Expense
|
$
|
1,746
|
|
|
$
|
2,764
|
|
|
$
|
2,761
|
|
|
Officers & Other Key Employees
|
|
Directors
|
|
Weighted
Average
Fair Value
|
||||
Nonvested Shares Outstanding, January 1, 2014
|
94,192
|
|
|
19,617
|
|
|
$
|
50.73
|
|
Granted
|
68,263
|
|
|
11,610
|
|
|
$
|
49.40
|
|
Vested*
|
(36,536
|
)
|
|
(19,617
|
)
|
|
$
|
53.42
|
|
Cancelled/Forfeited
|
(13,981
|
)
|
|
—
|
|
|
$
|
49.49
|
|
Nonvested Shares Outstanding, December 31, 2014
|
111,938
|
|
|
11,610
|
|
|
$
|
48.79
|
|
3.
|
DISCONTINUED OPERATIONS AND AFFILATIONS:
|
|
2014
|
|
2013
|
|
2012
|
||||||
Loss before Income Taxes:
|
|
|
|
|
|
||||||
Sand Mining
|
$
|
(620
|
)
|
|
$
|
(406
|
)
|
|
$
|
(1,396
|
)
|
Fuel Oil
|
(274
|
)
|
|
(816
|
)
|
|
(401
|
)
|
|||
Income Tax Benefits
|
312
|
|
|
426
|
|
|
629
|
|
|||
Loss from Discontinued Operations — Net
|
$
|
(582
|
)
|
|
$
|
(796
|
)
|
|
$
|
(1,168
|
)
|
Earnings Per Common Share from
|
|
|
|
|
|
|
|||||
Discontinued Operations — Net:
|
|
|
|
|
|
|
|||||
Basic
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.04
|
)
|
Diluted
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.04
|
)
|
|
2014
|
2013
|
||||||
Current assets
|
|
$
|
46,683
|
|
|
$
|
57,725
|
|
Noncurrent assets
|
|
$
|
478,240
|
|
|
$
|
494,933
|
|
Current liabilities
|
|
$
|
75,260
|
|
|
$
|
60,355
|
|
Noncurrent liabilities
|
|
$
|
315,801
|
|
|
$
|
341,548
|
|
|
2014
|
2013
|
2012
|
|||||||||
Revenues
|
|
$
|
207,031
|
|
|
$
|
178,026
|
|
|
$
|
148,009
|
|
Cost of sales
|
|
$
|
107,042
|
|
|
$
|
91,228
|
|
|
$
|
71,141
|
|
Income from continuing operations
|
|
$
|
(11,666
|
)
|
|
$
|
6,229
|
|
|
$
|
5,795
|
|
Net Income
|
|
$
|
(11,666
|
)
|
|
$
|
6,229
|
|
|
$
|
5,795
|
|
4.
|
INCOME TAXES:
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Tax at Statutory Rate
|
|
$
|
35,727
|
|
|
$
|
22,181
|
|
|
$
|
36,490
|
|
Increase (Decrease) Resulting from:
|
|
|
|
|
|
|
||||||
State Income Taxes
|
|
1,960
|
|
|
971
|
|
|
5,857
|
|
|||
ESOP
|
|
(1,232
|
)
|
|
(1,176
|
)
|
|
(1,141
|
)
|
|||
Amortization of Investment Tax Credits - Utility
|
|
(211
|
)
|
|
(258
|
)
|
|
(287
|
)
|
|||
AFUDC
|
|
(1,481
|
)
|
|
(916
|
)
|
|
(1,048
|
)
|
|||
Investment and Other Tax Credits
|
|
(30,661
|
)
|
|
(38,179
|
)
|
|
(26,574
|
)
|
|||
Other - Net
|
|
347
|
|
|
(1,637
|
)
|
|
(1,818
|
)
|
|||
Income Taxes:
|
|
|
|
|
|
|
||||||
Continuing Operations
|
|
4,449
|
|
|
(19,014
|
)
|
|
11,479
|
|
|||
Discontinued Operations
|
|
(312
|
)
|
|
(426
|
)
|
|
(629
|
)
|
|||
Net Income Taxes
|
|
$
|
4,137
|
|
|
$
|
(19,440
|
)
|
|
$
|
10,850
|
|
|
|
|
|
|
|
|
|
|
|
|||
The provision for Income Taxes is comprised of the following (in thousands):
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
(62
|
)
|
|
$
|
(273
|
)
|
|
$
|
(8,761
|
)
|
State
|
|
3,052
|
|
|
3,066
|
|
|
221
|
|
|||
Total Current
|
|
2,990
|
|
|
2,793
|
|
|
(8,540
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
1,707
|
|
|
(19,978
|
)
|
|
11,515
|
|
|||
State
|
|
(37
|
)
|
|
(1,571
|
)
|
|
8,791
|
|
|||
Total Deferred
|
|
1,670
|
|
|
(21,549
|
)
|
|
20,306
|
|
|||
Investment Tax Credit - Utility
|
|
(211
|
)
|
|
(258
|
)
|
|
(287
|
)
|
|||
Income Taxes:
|
|
|
|
|
|
|
||||||
Continuing Operations
|
|
4,449
|
|
|
(19,014
|
)
|
|
11,479
|
|
|||
Discontinued Operations
|
|
(312
|
)
|
|
(426
|
)
|
|
(629
|
)
|
|||
Net Income Taxes
|
|
$
|
4,137
|
|
|
$
|
(19,440
|
)
|
|
$
|
10,850
|
|
|
|
2014
|
|
2013
|
||||
Current:
|
|
|
|
|
||||
Net Operating Loss Carryforward
|
|
$
|
(42,839
|
)
|
|
$
|
(26,800
|
)
|
Derivatives / Unrealized Gain
|
|
(7,965
|
)
|
|
(8,608
|
)
|
||
Conservation Incentive Program
|
|
(2,027
|
)
|
|
4,631
|
|
||
Budget Billing - Customer Accounts
|
|
1,138
|
|
|
1,152
|
|
||
Provision for Uncollectibles
|
|
(6,296
|
)
|
|
(1,994
|
)
|
||
Other
|
|
241
|
|
|
1,010
|
|
||
Current Deferred Tax (Asset) Liability - Net
|
|
$
|
(57,748
|
)
|
|
$
|
(30,609
|
)
|
Noncurrent:
|
|
|
|
|
||||
Book versus Tax Basis of Property
|
|
$
|
558,960
|
|
|
$
|
476,039
|
|
Deferred Gas Costs - Net
|
|
22,959
|
|
|
1,330
|
|
||
Environmental
|
|
12,147
|
|
|
13,017
|
|
||
Deferred Regulatory Costs
|
|
6,333
|
|
|
13,665
|
|
||
Deferred State Tax
|
|
(21,548
|
)
|
|
(17,949
|
)
|
||
Investment Tax Credit Basis Gross-Up
|
|
(77
|
)
|
|
(185
|
)
|
||
Deferred Pension & Other Post Retirement Benefits
|
|
39,891
|
|
|
24,218
|
|
||
Pension & Other Post Retirement Benefits
|
|
(34,892
|
)
|
|
(17,777
|
)
|
||
Deferred Revenues
|
|
(11,647
|
)
|
|
(9,593
|
)
|
||
Derivatives / Unrealized Gain
|
|
(4,589
|
)
|
|
2,149
|
|
||
Net Operating Loss Carryforward
|
|
(114,335
|
)
|
|
(90,818
|
)
|
||
Investment and Other Tax Credits
|
|
(154,805
|
)
|
|
(117,726
|
)
|
||
Equity In Loss Of Affiliated Companies
|
|
39,230
|
|
|
37,764
|
|
||
Other
|
|
6,893
|
|
|
5,234
|
|
||
Noncurrent Deferred Tax Liability - Net
|
|
$
|
344,520
|
|
|
$
|
319,368
|
|
Expire in:
|
|
Investment Tax Credit Carryforward
|
||
2030
|
|
$
|
11,628
|
|
2031
|
|
26,613
|
|
|
2032
|
|
32,071
|
|
|
2033
|
|
46,179
|
|
|
2034
|
|
37,079
|
|
|
|
|
$
|
153,570
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Balance at January 1,
|
|
$
|
547
|
|
|
$
|
503
|
|
|
$
|
736
|
|
Increase as a result of tax positions taken in prior years
|
|
5
|
|
|
44
|
|
|
108
|
|
|||
Decrease due to a lapse in the statute of limitations
|
|
—
|
|
|
—
|
|
|
(341
|
)
|
|||
Settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at December 31,
|
|
$
|
552
|
|
|
$
|
547
|
|
|
$
|
503
|
|
5.
|
PREFERRED STOCK:
|
6.
|
COMMON STOCK:
|
|
2014
|
|
2013
|
|
2012
|
|||
Beginning of Year
|
32,715,042
|
|
|
31,653,262
|
|
|
30,212,453
|
|
New Issues During Year:
|
|
|
|
|
|
|
||
Dividend Reinvestment Plan
|
1,440,778
|
|
|
983,417
|
|
|
1,397,583
|
|
Stock-Based Compensation Plan
|
11,610
|
|
|
78,363
|
|
|
43,226
|
|
End of Year
|
34,167,430
|
|
|
32,715,042
|
|
|
31,653,262
|
|
7.
|
FINANCIAL INSTRUMENTS:
|
•
|
For Long-Term Debt, in estimating the fair value, we use the present value of remaining cash flows at the balance sheet date. We based the estimates on interest rates available to SJI at the end of each period for debt with similar terms and maturities (Level 2 in the fair value hierarchy, see Note 17 - Fair Value of Financial Assets and Financial Liabilities). The estimated fair values of SJI's long-term debt, including current maturities, as of
December 31, 2014
and
2013
, were
$1,058.5 million
and
$713.2 million
, respectively. The carrying amounts of SJI's long-term debt, including current maturities, as of
December 31, 2014
and
2013
, was
$1,009.4 million
and
$701.4 million
, respectively.
|
8.
|
SEGMENTS OF BUSINESS:
|
•
|
Gas utility operations (SJG) consist primarily of natural gas distribution to residential, commercial and industrial customers.
|
•
|
Wholesale energy operations include the activities of SJRG and SJEX.
|
•
|
SJE is involved in both retail gas and retail electric activities.
|
◦
|
Retail gas and other operations include natural gas acquisition and transportation service business lines.
|
◦
|
Retail electric operations consist of electricity acquisition and transportation to commercial and industrial customers.
|
•
|
On-Site energy production consists of Marina’s thermal energy facility and other energy-related projects.
|
•
|
Appliance service operations includes SJESP’s servicing of appliances under warranty via a subcontractor arrangement as well as on a time and materials basis.
|
|
2014
|
|
2013
|
|
2012
|
||||||
Operating Revenues:
|
|
|
|
|
|
||||||
Gas Utility Operations
|
$
|
501,875
|
|
|
$
|
446,480
|
|
|
$
|
421,874
|
|
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
77,048
|
|
|
831
|
|
|
17,429
|
|
|||
Retail Gas and Other Operations
|
127,001
|
|
|
107,748
|
|
|
80,486
|
|
|||
Retail Electric Operations
|
123,773
|
|
|
128,932
|
|
|
144,197
|
|
|||
Subtotal Energy Group
|
327,822
|
|
|
237,511
|
|
|
242,112
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
56,129
|
|
|
43,551
|
|
|
38,308
|
|
|||
Appliance Service Operations
|
10,518
|
|
|
13,723
|
|
|
13,646
|
|
|||
Subtotal Energy Services
|
66,647
|
|
|
57,274
|
|
|
51,954
|
|
|||
Corporate & Services
|
30,174
|
|
|
31,286
|
|
|
29,318
|
|
|||
Subtotal
|
926,518
|
|
|
772,551
|
|
|
745,258
|
|
|||
Intersegment Sales
|
(39,522
|
)
|
|
(41,130
|
)
|
|
(38,978
|
)
|
|||
Total Operating Revenues
|
$
|
886,996
|
|
|
$
|
731,421
|
|
|
$
|
706,280
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Operating Income:
|
|
|
|
|
|
|
|
|
|||
Gas Utility Operations
|
$
|
113,690
|
|
|
$
|
105,822
|
|
|
$
|
101,762
|
|
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
9,493
|
|
|
(37,720
|
)
|
|
(2,142
|
)
|
|||
Retail Gas and Other Operations
|
479
|
|
|
278
|
|
|
(1,204
|
)
|
|||
Retail Electric Operations
|
(466
|
)
|
|
(98
|
)
|
|
12,683
|
|
|||
Subtotal Energy Group
|
9,506
|
|
|
(37,540
|
)
|
|
9,337
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
2,560
|
|
|
(2,011
|
)
|
|
(1,696
|
)
|
|||
Appliance Service Operations
|
362
|
|
|
2,995
|
|
|
(225
|
)
|
|||
Subtotal Energy Services
|
2,922
|
|
|
984
|
|
|
(1,921
|
)
|
|||
Corporate and Services
|
1,485
|
|
|
370
|
|
|
720
|
|
|||
Total Operating Income
|
$
|
127,603
|
|
|
$
|
69,636
|
|
|
$
|
109,898
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization:
|
|
|
|
|
|
|
|
|
|||
Gas Utility Operations
|
$
|
52,155
|
|
|
$
|
48,261
|
|
|
$
|
44,171
|
|
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
168
|
|
|
206
|
|
|
229
|
|
|||
Retail Gas and Other Operations
|
83
|
|
|
93
|
|
|
78
|
|
|||
Subtotal Energy Group
|
251
|
|
|
299
|
|
|
307
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
25,020
|
|
|
15,192
|
|
|
9,604
|
|
|||
Appliance Service Operations
|
269
|
|
|
261
|
|
|
308
|
|
|||
Subtotal Energy Services
|
25,289
|
|
|
15,453
|
|
|
9,912
|
|
|||
Corporate and Services
|
816
|
|
|
877
|
|
|
699
|
|
|||
Total Depreciation and Amortization
|
$
|
78,511
|
|
|
$
|
64,890
|
|
|
$
|
55,089
|
|
|
|
|
|
|
|
||||||
Interest Charges:
|
|
|
|
|
|
|
|
|
|||
Gas Utility Operations
|
$
|
17,872
|
|
|
$
|
12,550
|
|
|
$
|
12,427
|
|
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
371
|
|
|
417
|
|
|
229
|
|
|||
Retail Gas and Other Operations
|
267
|
|
|
280
|
|
|
139
|
|
|||
Subtotal Energy Group
|
638
|
|
|
697
|
|
|
368
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
8,723
|
|
|
4,480
|
|
|
4,936
|
|
|||
Corporate and Services
|
8,803
|
|
|
6,004
|
|
|
4,219
|
|
|||
Subtotal
|
36,036
|
|
|
23,731
|
|
|
21,950
|
|
|||
Intersegment Borrowings
|
(6,476
|
)
|
|
(4,906
|
)
|
|
(2,964
|
)
|
|||
Total Interest Charges
|
$
|
29,560
|
|
|
$
|
18,825
|
|
|
$
|
18,986
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Income Taxes:
|
|
|
|
|
|
||||||
Gas Utility Operations
|
$
|
34,895
|
|
|
$
|
34,833
|
|
|
$
|
33,711
|
|
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
4,822
|
|
|
(15,070
|
)
|
|
(907
|
)
|
|||
Retail Gas and Other Operations
|
787
|
|
|
434
|
|
|
(144
|
)
|
|||
Retail Electric Operations
|
(190
|
)
|
|
(40
|
)
|
|
5,181
|
|
|||
Subtotal Energy Group
|
5,419
|
|
|
(14,676
|
)
|
|
4,130
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
(36,404
|
)
|
|
(40,755
|
)
|
|
(26,811
|
)
|
|||
Appliance Service Operations
|
223
|
|
|
1,237
|
|
|
(75
|
)
|
|||
Subtotal Energy Services
|
(36,181
|
)
|
|
(39,518
|
)
|
|
(26,886
|
)
|
|||
Corporate and Services
|
316
|
|
|
347
|
|
|
524
|
|
|||
Total Income Taxes
|
$
|
4,449
|
|
|
$
|
(19,014
|
)
|
|
$
|
11,479
|
|
|
|
|
|
|
|
||||||
Property Additions:
|
|
|
|
|
|
||||||
Gas Utility Operations
|
$
|
201,737
|
|
|
$
|
173,099
|
|
|
$
|
156,990
|
|
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
18
|
|
|
50
|
|
|
23
|
|
|||
Retail Gas and Other Operations
|
1,421
|
|
|
702
|
|
|
177
|
|
|||
Subtotal Energy Group
|
1,439
|
|
|
752
|
|
|
200
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
132,214
|
|
|
151,592
|
|
|
107,993
|
|
|||
Appliance Service Operations
|
84
|
|
|
—
|
|
|
34
|
|
|||
Subtotal Energy Services
|
132,298
|
|
|
151,592
|
|
|
108,027
|
|
|||
Corporate and Services
|
3,995
|
|
|
3,061
|
|
|
4,308
|
|
|||
Total Property Additions
|
$
|
339,469
|
|
|
$
|
328,504
|
|
|
$
|
269,525
|
|
|
2014
|
|
2013
|
||||
Identifiable Assets:
|
|
|
|
||||
Gas Utility Operations
|
$
|
2,185,672
|
|
|
$
|
1,909,126
|
|
Energy Group:
|
|
|
|
||||
Wholesale Energy Operations
|
366,119
|
|
|
331,182
|
|
||
Retail Gas and Other Operations
|
53,073
|
|
|
50,384
|
|
||
Retail Electric Operations
|
23,682
|
|
|
25,496
|
|
||
Subtotal Energy Group
|
442,874
|
|
|
407,062
|
|
||
Energy Services:
|
|
|
|
||||
On-Site Energy Production
|
675,937
|
|
|
576,315
|
|
||
Appliance Service Operations
|
3,105
|
|
|
1,812
|
|
||
Subtotal Energy Services
|
679,042
|
|
|
578,127
|
|
||
Discontinued Operations
|
1,758
|
|
|
1,068
|
|
||
Corporate and Services
|
527,691
|
|
|
406,245
|
|
||
Intersegment Assets
|
(487,612
|
)
|
|
(376,773
|
)
|
||
Total Identifiable Assets
|
$
|
3,349,425
|
|
|
$
|
2,924,855
|
|
Year ended December 31,
|
|
||
2015
|
$
|
5,396
|
|
2016
|
5,396
|
|
|
2017
|
5,396
|
|
|
2018
|
5,396
|
|
|
2019
|
5,396
|
|
|
Thereafter
|
40,022
|
|
|
Total minimum future rentals
|
$
|
67,002
|
|
10.
|
RATES AND REGULATORY ACTIONS:
|
•
|
May 2012 - The BPU issued an Order finalizing the 2011-2012 provisional BGSS rates.
|
•
|
June 2012 - SJG filed its annual BGSS filing with the BPU requesting a
$27.0 million
, or
8.8%
, reduction in gas cost recoveries commencing on October 1, 2012.
|
•
|
September 2012 - The BPU issued an Order approving, on a provisional basis, SJG's request for a
27.0 million
, or
8.8%
, reduction in gas cost recoveries.
|
•
|
January 2013 - SJG credited the accounts of its periodic BGSS customers with refunds totaling
$9.4 million
due to gas costs that were lower than projections.
|
•
|
May 2013 - SJG filed its annual BGSS filing with the BPU requesting a
$0.6 million
reduction in gas cost recoveries.
|
•
|
September 2013 - The BPU issued an Order approving, on a provisional basis, SJG’s request for a
$0.6 million
reduction in gas cost recoveries.
|
•
|
January 2014 - SJG credited the accounts of its periodic BGSS customer with refunds totaling
$11.2 million
due to gas costs that were lower than projected.
|
•
|
May 2014 - SJG filed its annual BGSS filing with the BPU requesting a
$27.0 million
, or a
9.3%
increase in gas cost recoveries.
|
•
|
September 2014 - The BPU issued an Order approving, on a provisional basis, SJG’s request for a
27.0 million
increase in gas cost recoveries.
|
•
|
May 2012 - The BPU issued an Order finalizing the 2011-2012 provisional CIP rates.
|
•
|
June 2012 - SJG made its annual CIP filing with the BPU requesting recovery of
$28.0 million
, which includes a
$8.4 million
non-weather related recovery and a
$19.6 million
weather related recovery.
|
•
|
September 2012 - The BPU issued an Order approving, on a provisional basis, the 2012-2013 CIP rates filed in June 2012, effective October 1, 2012.
|
•
|
March 2013 - SJG filed a joint petition with another utility requesting modification to, and the continuation of, the CIP program effective October 1, 2013.
|
•
|
May 2013 - SJG made its annual CIP filing with the BPU requesting a reduction in revenue of
$17.8 million
, which includes a
$2.3 million
reduction in non-weather related recovery and a
$15.5 million
reduction in weather related recovery.
|
•
|
September 2013 - The BPU issued an Order approving, on a provisional basis, the 2013-2014 CIP rates filed in May 2013, effective October 1, 2013.
|
•
|
May 2014 - SJG made its annual CIP filing with the BPU requesting a revenue reduction of
$21.8 million
, which includes a
$4.2 million
increase in non-weather related revenues and a
$26.0 million
reduction in weather related revenues.
|
•
|
September 2014 - The BPU issued an Order approving, on a provisional basis, the 2014-2015 CIP rates filed in May 2014, effective October 1 2014.
|
•
|
May 2012 - The BPU approved a modification and extension of the CIRT II program (CIRT III), allowing SJG to accelerate an incremental
$35.0 million
of capital spending through December 2012.
|
•
|
October 2012 - SJG filed a petition requesting a
$13.2 million
increase in annual revenues by rolling
$110.6 million
of CIRT I, II and III investments into base rates.
|
•
|
September 2013 - The BPU approved the base rate roll in of the CIRT I, II and III program investments effective October 2013, resulting in a
$15.5 million
increase in annual revenue. This approval also concluded Phase II of the 2010 base rate case.
|
•
|
September 2014 - The BPU approved SJG’s base rate case, which included a
$7.5 million
increase in revenues associated with the roll in of
$69.9 million
of AIRP investments into base rates.
|
•
|
August 2014 - The BPU approved the Storm Hardening and Reliability Program (SHARP), authorizing SJG to invest
$103.5 million
over
three
years for system hardening on barrier islands. SJG will earn on a return on these investments as they are made and will reflect the investments in base rates through annual rate adjustments.
|
•
|
May 2012 - SJG filed a petition requesting the approval of a new Energy Efficiency Program (“EEP II”) and to continue the existing EET to recover all costs associated with the EEP II through a
$3.1 million
increase in annual revenues. These programs provide customers with increased incentives to reduce their natural gas consumption. In June 2013, the BPU approved the EEP II program in the form of an extension of the existing EEP program, permitting SJG to invest
$24.0 million
in energy efficiency programs through June 2015. The BPU also approved in June 2013 an extension of the EET with a
$2.1 million
revenue increase effective July 2013.
|
•
|
June 2012 - SJG filed a petition requesting a continuation of the original Energy Efficiency Program (“EEP I”) to bridge the gap between the expiration of the EEP I program on April 30, 2012, and the implementation of the proposed new EEP II program. This petition was approved by the BPU in August 2012. Also in June 2012, SJG filed its 2012 - 2013 annual EET rate adjustment petition requesting a
$5.8 million
increase in annual revenues to recover the costs associated with its EEP I program. The BPU approved this petition in September 2014.
|
•
|
May 2013 - SJG filed its annual petition requesting an increase of
$2.2 million
for current EET programs. The BPU approved this petition in September 2014.
|
•
|
May 2014 - SJG filed its annual EET rate adjustment petition requesting an
$1.4 million
increase in revenues to recover the costs of, and the allowed return on, prior investments associated with energy efficiency programs. The petition is currently pending.
|
•
|
September 2014 - The BPU approved a revenue increase of
$2.2 million
associated with the 2012-2013 annual EET rate adjustment filing, with rates effective October 1, 2014.
|
•
|
In January 2015 - SJG filed a petition with the BPU seeking to continue offering energy efficiency programs through June 2018 with a proposed budget of
$56.0 million
and with the same rate recovery mechanism that exists for its current energy efficiency programs.
|
•
|
July 2012 - SJG made its annual 2012-2013 SBC filing requesting an
$11.8 million
increase in SBC recoveries. The BPU approved this filing in July 2013.
|
•
|
September 2012 - The BPU finalized rates for the 2010-2011 SBC petition effective October 1, 2012.
|
•
|
July 2013 - SJG made its annual 2013-2014 SBC filing requesting a
$6.4 million
decrease in SBC revenues. The BPU approved this filing in September 2014.
|
•
|
July 2014 - SJG made its annual 2014-2015 SBC filing requesting a
$25.7 million
decrease in SBC revenues.
|
•
|
June 2012 - SJG made its annual USF filing, along with the State's other electric and gas utilities, proposing to decrease annual statewide gas revenues by
$0.5 million
. This proposal was designed to decrease SJG's annual USF revenue by
$0.1 million
.
|
•
|
September 2012 - The BPU approved the statewide budget of
$78.0 million
for all of the State's gas utilities. SJG's portion of the total is approximately
$8.2 million
, which decreased rates effective October 1, 2012, resulting in a
$0.1 million
decrease to SJG's annual USF recoveries.
|
•
|
June 2013 - SJG made its annual USF filing, along with the State’s other electric and gas utilities, proposing to decrease the statewide gas revenues by
$29.4 million
. This proposal was designed to decrease SJG's annual USF revenue by
$3.7 million
.
|
•
|
September 2013 - The BPU approved the statewide USF budget of
$54.4 million
for all the State’s gas utilities. SJG's portion of the total is approximately
$5.8 million
, which decreased rates effective October 1, 2013, resulting in a
$3.4 million
decrease to SJG's USF recoveries.
|
•
|
June 2014 - SJG made its annual USF filing, along with the State’s other electric and gas utilities, proposing to increase the statewide gas revenues by
$19.9 million
. This proposal was designed to increase SJG’s annual USF revenue by
$2.6 million
.
|
•
|
September 2014 - The BPU approved the statewide budget of
$71.8 million
for all the State’s gas utilities. SJG's portion of the total is approximately
$7.9 million
, which increased rates effective October 1, 2014, resulting in a
$2.6 million
increase to its USF recoveries.
|
11.
|
REGULATORY ASSETS & REGULATORY LIABILITIES:
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
Environmental Remediation Costs:
|
|
|
|
||||
Expended - Net
|
$
|
29,540
|
|
|
$
|
29,945
|
|
Liability for Future Expenditures
|
124,308
|
|
|
119,492
|
|
||
Deferred Asset Retirement Obligation Costs
|
31,584
|
|
|
31,142
|
|
||
Deferred Pension and Other Postretirement Benefit Costs
|
99,040
|
|
|
59,284
|
|
||
Deferred Gas Costs - Net
|
32,202
|
|
|
—
|
|
||
Conservation Incentive Program Receivable
|
—
|
|
|
10,526
|
|
||
Societal Benefit Costs Receivable
|
385
|
|
|
10,408
|
|
||
Premium for Early Retirement of Debt
|
—
|
|
|
955
|
|
||
Deferred Interest Rate Contracts
|
7,325
|
|
|
3,735
|
|
||
Energy Efficiency Tracker
|
11,247
|
|
|
10,420
|
|
||
Pipeline Supplier Service Charges
|
5,441
|
|
|
7,106
|
|
||
Pipeline Integrity Cost
|
3,431
|
|
|
2,902
|
|
||
AFUDC - Equity Related Deferrals
|
10,781
|
|
|
7,810
|
|
||
Other Regulatory Assets
|
1,876
|
|
|
2,356
|
|
||
|
|
|
|
||||
Total Regulatory Assets
|
$
|
357,160
|
|
|
$
|
296,081
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
Excess Plant Removal Costs
|
$
|
35,940
|
|
|
$
|
40,029
|
|
Deferred Revenues - Net
|
—
|
|
|
19,067
|
|
||
Conservation Incentive Program - Payable
|
4,700
|
|
|
—
|
|
||
Other Regulatory Liabilities
|
1,259
|
|
|
1,853
|
|
||
|
|
|
|
||||
Total Regulatory Liabilities
|
$
|
41,899
|
|
|
$
|
60,949
|
|
12.
|
PENSION AND OTHER POSTRETIREMENT BENEFITS:
|
|
Pension Benefits
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Service Cost
|
$
|
4,510
|
|
|
$
|
5,421
|
|
|
$
|
4,533
|
|
Interest Cost
|
10,735
|
|
|
9,439
|
|
|
9,622
|
|
|||
Expected Return on Plan Assets
|
(13,491
|
)
|
|
(11,914
|
)
|
|
(10,341
|
)
|
|||
Amortizations:
|
|
|
|
|
|
|
|||||
Prior Service Cost
|
175
|
|
|
251
|
|
|
251
|
|
|||
Actuarial Loss
|
5,716
|
|
|
9,006
|
|
|
7,629
|
|
|||
Net Periodic Benefit Cost
|
7,645
|
|
|
12,203
|
|
|
11,694
|
|
|||
Capitalized Benefit Costs
|
(3,047
|
)
|
|
(5,002
|
)
|
|
(4,684
|
)
|
|||
Total Net Periodic Benefit Expense
|
$
|
4,598
|
|
|
$
|
7,201
|
|
|
$
|
7,010
|
|
|
Other Postretirement Benefits
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Service Cost
|
$
|
891
|
|
|
$
|
1,139
|
|
|
$
|
1,037
|
|
Interest Cost
|
2,852
|
|
|
2,730
|
|
|
3,001
|
|
|||
Expected Return on Plan Assets
|
(2,603
|
)
|
|
(2,378
|
)
|
|
(2,105
|
)
|
|||
Amortizations:
|
|
|
|
|
|
|
|||||
Prior Service Cost (Credits)
|
152
|
|
|
(283
|
)
|
|
(283
|
)
|
|||
Actuarial Loss
|
974
|
|
|
1,738
|
|
|
1,725
|
|
|||
Net Periodic Benefit Cost
|
2,266
|
|
|
2,946
|
|
|
3,375
|
|
|||
Capitalized Benefit Costs
|
(722
|
)
|
|
(1,172
|
)
|
|
(1,340
|
)
|
|||
Total Net Periodic Benefit Expense
|
$
|
1,544
|
|
|
$
|
1,774
|
|
|
$
|
2,035
|
|
|
Regulatory Assets
|
|
Accumulated Other
Comprehensive Loss
(pre-tax)
|
||||||||||||
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||
Balance at January 1, 2013
|
$
|
68,713
|
|
|
$
|
27,184
|
|
|
$
|
35,431
|
|
|
$
|
4,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amounts Arising during the Period:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Actuarial Gain
|
(20,554
|
)
|
|
(9,171
|
)
|
|
(4,173
|
)
|
|
(390
|
)
|
||||
Amounts Amortized to Net Periodic Costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Actuarial Loss
|
(5,319
|
)
|
|
(1,555
|
)
|
|
(3,642
|
)
|
|
(177
|
)
|
||||
Prior Service (Cost) Credit
|
(208
|
)
|
|
194
|
|
|
(42
|
)
|
|
82
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2013
|
42,632
|
|
|
16,652
|
|
|
27,574
|
|
|
3,710
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts Arising during the Period:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Actuarial Loss
|
31,075
|
|
|
7,826
|
|
|
14,698
|
|
|
2,269
|
|
||||
Prior Service Cost
|
486
|
|
|
4,146
|
|
|
14
|
|
|
981
|
|
||||
Amounts Amortized to Net Periodic Costs:
|
|
|
|
|
|
|
|
||||||||
Net Actuarial Loss
|
(2,841
|
)
|
|
(628
|
)
|
|
(2,819
|
)
|
|
(187
|
)
|
||||
Prior Service Cost
|
(175
|
)
|
|
(133
|
)
|
|
1
|
|
|
(18
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2014
|
$
|
71,177
|
|
|
$
|
27,863
|
|
|
$
|
39,468
|
|
|
$
|
6,755
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||
Prior Service Costs
|
$
|
199
|
|
|
$
|
499
|
|
Net Actuarial Loss
|
$
|
5,922
|
|
|
$
|
1,235
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||
Prior Service Costs
|
$
|
12
|
|
|
$
|
108
|
|
Net Actuarial Loss
|
$
|
4,355
|
|
|
$
|
302
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
|
||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Change in Benefit Obligations:
|
|
|
|
|
|
|
|
||||||||
Benefit Obligation at Beginning of Year
|
$
|
216,395
|
|
|
$
|
224,389
|
|
|
$
|
62,355
|
|
|
$
|
68,779
|
|
Service Cost
|
4,510
|
|
|
5,421
|
|
|
891
|
|
|
1,139
|
|
||||
Interest Cost
|
10,735
|
|
|
9,439
|
|
|
2,852
|
|
|
2,730
|
|
||||
Actuarial (Gain) Loss
|
42,746
|
|
|
(14,272
|
)
|
|
8,151
|
|
|
(6,361
|
)
|
||||
Retiree Contributions
|
—
|
|
|
—
|
|
|
488
|
|
|
388
|
|
||||
Plan Amendments
|
550
|
|
|
—
|
|
|
5,143
|
|
|
—
|
|
||||
Benefits Paid
|
(9,502
|
)
|
|
(8,582
|
)
|
|
(4,288
|
)
|
|
(4,320
|
)
|
||||
Benefit Obligation at End of Year
|
$
|
265,434
|
|
|
$
|
216,395
|
|
|
$
|
75,592
|
|
|
$
|
62,355
|
|
|
|
|
|
|
|
|
|
||||||||
Change in Plan Assets:
|
|
|
|
|
|
|
|
||||||||
Fair Value of Plan Assets at Beginning of Year
|
$
|
178,093
|
|
|
$
|
150,160
|
|
|
$
|
41,653
|
|
|
$
|
36,032
|
|
Actual Return on Plan Assets
|
10,397
|
|
|
22,556
|
|
|
596
|
|
|
5,621
|
|
||||
Employer Contributions
|
1,535
|
|
|
13,959
|
|
|
4,773
|
|
|
3,932
|
|
||||
Retiree Contributions
|
—
|
|
|
—
|
|
|
488
|
|
|
388
|
|
||||
Benefits Paid
|
(9,502
|
)
|
|
(8,582
|
)
|
|
(4,288
|
)
|
|
(4,320
|
)
|
||||
Fair Value of Plan Assets at End of Year
|
$
|
180,523
|
|
|
$
|
178,093
|
|
|
$
|
43,222
|
|
|
$
|
41,653
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Funded Status at End of Year:
|
$
|
(84,911
|
)
|
|
$
|
(38,302
|
)
|
|
$
|
(32,370
|
)
|
|
$
|
(20,701
|
)
|
Amounts Related to Unconsolidated Affiliate
|
57
|
|
|
(7
|
)
|
|
301
|
|
|
365
|
|
||||
Accrued Net Benefit Cost at End of Year
|
$
|
(84,854
|
)
|
|
$
|
(38,309
|
)
|
|
$
|
(32,069
|
)
|
|
$
|
(20,336
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts Recognized in the Statement of Financial Position Consist of:
|
|
|
|
|
|
|
|
||||||||
Current Liabilities
|
$
|
(1,550
|
)
|
|
$
|
(1,275
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Noncurrent Liabilities
|
(83,304
|
)
|
|
(37,034
|
)
|
|
(32,069
|
)
|
|
(20,336
|
)
|
||||
Net Amount Recognized at End of Year
|
$
|
(84,854
|
)
|
|
$
|
(38,309
|
)
|
|
$
|
(32,069
|
)
|
|
$
|
(20,336
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts Recognized in Regulatory Assets Consist of:
|
|
|
|
|
|
|
|
||||||||
Prior Service Costs
|
$
|
944
|
|
|
$
|
634
|
|
|
$
|
4,965
|
|
|
$
|
952
|
|
Net Actuarial Loss
|
70,233
|
|
|
41,998
|
|
|
22,898
|
|
|
15,700
|
|
||||
|
$
|
71,177
|
|
|
$
|
42,632
|
|
|
$
|
27,863
|
|
|
$
|
16,652
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts Recognized in Accumulated Other Comprehensive Loss Consist of (pre-tax):
|
|
|
|
|
|
|
|
||||||||
Prior Service Costs
|
$
|
86
|
|
|
$
|
69
|
|
|
$
|
1,113
|
|
|
$
|
150
|
|
Net Actuarial Loss
|
39,382
|
|
|
27,505
|
|
|
5,642
|
|
|
3,560
|
|
||||
|
$
|
39,468
|
|
|
$
|
27,574
|
|
|
$
|
6,755
|
|
|
$
|
3,710
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Discount Rate
|
4.25
|
%
|
|
5.09
|
%
|
|
4.20
|
%
|
|
4.91
|
%
|
Rate of Compensation Increase
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||
Discount Rate
|
5.09
|
%
|
|
4.26
|
%
|
|
5.03
|
%
|
|
4.91
|
%
|
|
4.14
|
%
|
|
4.92
|
%
|
Expected Long-Term Return on Plan Assets
|
7.75
|
%
|
|
7.50
|
%
|
|
7.50
|
%
|
|
6.25
|
%
|
|
6.60
|
%
|
|
6.60
|
%
|
Rate of Compensation Increase
|
3.50
|
%
|
|
3.25
|
%
|
|
3.25
|
%
|
|
3.50
|
%
|
|
3.25
|
%
|
|
3.25
|
%
|
|
2014
|
|
2013
|
||
Medical Care and Drug Cost Trend Rate Assumed for Next Year
|
7.00
|
%
|
|
7.00
|
%
|
Dental Care Cost Trend Rate Assumed for Next Year
|
4.75
|
%
|
|
4.75
|
%
|
Rate to which Cost Trend Rates are Assumed to Decline (the Ultimate Trend Rate)
|
4.75
|
%
|
|
4.75
|
%
|
Year that the Rate Reaches the Ultimate Trend Rate
|
2023
|
|
|
2023
|
|
|
1-Percentage- Point Increase
|
|
1-Percentage- Point Decrease
|
||||
Effect on the Total of Service and Interest Cost
|
$
|
145
|
|
|
$
|
(122
|
)
|
Effect on Postretirement Benefit Obligation
|
$
|
4,742
|
|
|
$
|
(3,818
|
)
|
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Cash / Cash Equivalents:
|
|
|
|
|
|
|
|
|
|||||||
Common/Collective Trust Funds (a)
|
$
|
692
|
|
|
$
|
—
|
|
|
$
|
692
|
|
|
$
|
—
|
|
STIF-Type Instrument (b)
|
1,252
|
|
|
—
|
|
|
1,252
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds - U.S. (a)
|
51,197
|
|
|
—
|
|
|
51,197
|
|
|
—
|
|
||||
Common/Collective Trust Funds - International (a)
|
30,963
|
|
|
—
|
|
|
30,963
|
|
|
—
|
|
||||
U.S. Large-Cap (c)
|
12,961
|
|
|
12,961
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid-Cap (c)
|
5,147
|
|
|
5,147
|
|
|
—
|
|
|
—
|
|
||||
U.S. Small-Cap (c)
|
232
|
|
|
232
|
|
|
—
|
|
|
—
|
|
||||
International (c)
|
3,369
|
|
|
3,369
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income:
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds (a)
|
48,375
|
|
|
—
|
|
|
48,375
|
|
|
—
|
|
||||
Guaranteed Insurance Contract (d)
|
10,912
|
|
|
—
|
|
|
—
|
|
|
10,912
|
|
||||
Hedge Funds (e)
|
4,331
|
|
|
—
|
|
|
—
|
|
|
4,331
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
||||||||
Private Equity Fund (f)
|
3,616
|
|
|
—
|
|
|
—
|
|
|
3,616
|
|
||||
Common/Collective Trust Fund - Real Estate (g)
|
7,476
|
|
|
—
|
|
|
—
|
|
|
7,476
|
|
||||
Total
|
$
|
180,523
|
|
|
$
|
21,709
|
|
|
$
|
132,479
|
|
|
$
|
26,335
|
|
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Cash / Cash Equivalents:
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds (a)
|
$
|
416
|
|
|
$
|
—
|
|
|
$
|
416
|
|
|
$
|
—
|
|
STIF-Type Instrument (b)
|
1,177
|
|
|
—
|
|
|
1,177
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds - U.S. (a)
|
51,837
|
|
|
—
|
|
|
51,837
|
|
|
—
|
|
||||
Common/Collective Trust Funds - International (a)
|
34,093
|
|
|
—
|
|
|
34,093
|
|
|
—
|
|
||||
U.S. Large-Cap (c)
|
11,661
|
|
|
11,661
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid-Cap (c)
|
4,135
|
|
|
4,135
|
|
|
—
|
|
|
—
|
|
||||
International (c)
|
3,664
|
|
|
3,664
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income:
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds (a)
|
45,847
|
|
|
—
|
|
|
45,847
|
|
|
—
|
|
||||
Guaranteed Insurance Contract (d)
|
11,322
|
|
|
—
|
|
|
—
|
|
|
11,322
|
|
||||
Hedge Funds (e)
|
4,154
|
|
|
—
|
|
|
—
|
|
|
4,154
|
|
||||
Other types of investments:
|
|
|
|
|
|
|
|
||||||||
Private Equity Fund (f)
|
3,046
|
|
|
—
|
|
|
—
|
|
|
3,046
|
|
||||
Common/Collective Trust Fund - Real Estate (g)
|
6,741
|
|
|
—
|
|
|
—
|
|
|
6,741
|
|
||||
Total
|
$
|
178,093
|
|
|
$
|
19,460
|
|
|
$
|
133,370
|
|
|
$
|
25,263
|
|
(a)
|
This category represents common/collective trust fund investments through a commingled employee benefit trust (excluding real estate). These commingled funds are not traded publicly; however, the majority of the underlying assets held in these funds are stocks and bonds that are traded on active markets and prices for these assets are readily observable. Also included in these funds are interest rate swaps, asset-backed securities, mortgage-backed securities and other investments with observable market values. Holdings in these commingled funds are classified as Level 2 investments.
|
(b)
|
This category represents short-term investment funds held for the purpose of funding disbursement payment arrangements. Underlying assets are valued based on quoted prices in active markets, or where quoted prices are not available, based on models using observable market information. Since not all values can be obtained from quoted prices in active markets, these funds are classified as Level 2 investments.
|
(c)
|
This category of equity investments represents a managed portfolio of common stock investments in five sectors: telecommunications, electric utilities, gas utilities, water and energy. These common stocks are actively traded on exchanges and price quotes for these shares are readily available. These common stocks are classified as Level 1 investments.
|
(d)
|
This category represents SJI's Group Annuity contracts with a nationally recognized life insurance company. The contracts are the assets of the plan, while the underlying assets of the contracts are owned by the contract holder. Valuation is based on a formula and calculation specified within the contract. Since the valuation is based on the reporting entity's own assumptions, these contracts are classified as Level 3 investments.
|
(e)
|
This category represents a collection of underlying funds which are all domiciled outside of the United States. All of the underlying fund managers are based in the U.S.; however, they do not necessarily trade only in U.S. markets. The fair value of these funds is determined by the underlying fund's general partner or manager. These funds are classified as Level 3 investments.
|
(f)
|
This category represents a limited partnership/commingled trust which includes several investments in U.S. leveraged buyout, venture capital, and special situation funds. Fund valuations are reported on a
90
day lag and, therefore, the value reported herein represents the market value as of September 30, 2014 and 2013, respectively. The fund's investments are stated at fair value, which is generally based on the valuations provided by the general partners or managers of such investments. Fund investments are illiquid and resale is restricted. These funds are classified as Level 3 investments.
|
(g)
|
This category represents real estate common/collective trust fund investments through a commingled employee benefit trust. These commingled funds are part of a direct investment in a pool of real estate properties. These funds are valued by investment managers on a periodic basis using pricing models that use independent appraisals from sources with professional qualifications. Since these valuation inputs are not highly observable, the real estate funds are classified as Level 3 investments.
|
|
Guaranteed
|
|
|
|
Private
|
|
|
|
|
||||||||||
|
Insurance
|
|
Hedge
|
|
Equity
|
|
Real
|
|
|
||||||||||
|
Contract
|
|
Funds
|
|
Funds
|
|
Estate
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at January 1, 2013
|
$
|
12,449
|
|
|
$
|
—
|
|
|
$
|
3,216
|
|
|
$
|
6,009
|
|
|
$
|
21,674
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Relating to assets still held at the reporting date
|
(179
|
)
|
|
154
|
|
|
76
|
|
|
732
|
|
|
783
|
|
|||||
Relating to assets sold during the period
|
17
|
|
|
—
|
|
|
431
|
|
|
—
|
|
|
448
|
|
|||||
Purchases, Sales and Settlements
|
(965
|
)
|
|
4,000
|
|
|
(677
|
)
|
|
—
|
|
|
2,358
|
|
|||||
Balance at December 31, 2013
|
11,322
|
|
|
4,154
|
|
|
3,046
|
|
|
6,741
|
|
|
25,263
|
|
|||||
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Relating to assets still held at the reporting date
|
498
|
|
|
177
|
|
|
(24
|
)
|
|
735
|
|
|
1,386
|
|
|||||
Relating to assets sold during the period
|
13
|
|
|
—
|
|
|
325
|
|
|
—
|
|
|
338
|
|
|||||
Purchases, Sales and Settlements
|
(921
|
)
|
|
—
|
|
|
269
|
|
|
—
|
|
|
(652
|
)
|
|||||
Balance at December 31, 2014
|
$
|
10,912
|
|
|
$
|
4,331
|
|
|
$
|
3,616
|
|
|
$
|
7,476
|
|
|
$
|
26,335
|
|
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2014:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
153
|
|
|
$
|
153
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity Securities:
|
|
|
|
|
|
|
|
|
|||||||
Common/Collective Trust Funds - U.S. (a)
|
$
|
10,493
|
|
|
$
|
—
|
|
|
$
|
10,493
|
|
|
$
|
—
|
|
Common/Collective Trust Funds - International (a)
|
7,373
|
|
|
—
|
|
|
7,373
|
|
|
—
|
|
||||
Mutual Fund - U.S. (b)
|
4,723
|
|
|
4,723
|
|
|
—
|
|
|
—
|
|
||||
Mutual Funds - International (b)
|
1,795
|
|
|
1,795
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income:
|
|
|
|
|
|
|
|
|
|
|
|||||
Common/Collective Trust Funds - Bonds (a)
|
11,597
|
|
|
—
|
|
|
11,597
|
|
|
—
|
|
||||
Mutual Funds - Bonds (b)
|
2,820
|
|
|
2,820
|
|
|
—
|
|
|
—
|
|
||||
Other Types of Investments:
|
|
|
|
|
|
|
|
||||||||
Mutual Funds - REITS (b)
|
308
|
|
|
308
|
|
|
—
|
|
|
—
|
|
||||
Company Owned Life Insurance (c)
|
3,960
|
|
|
—
|
|
|
3,960
|
|
|
—
|
|
||||
Total
|
$
|
43,222
|
|
|
$
|
9,799
|
|
|
$
|
33,423
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2013:
|
|
|
|
|
|
|
|
||||||||
Equity Securities:
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds - U.S. (a)
|
$
|
13,098
|
|
|
$
|
—
|
|
|
$
|
13,098
|
|
|
$
|
—
|
|
Common/Collective Trust Funds - International (a)
|
10,586
|
|
|
—
|
|
|
10,586
|
|
|
—
|
|
||||
Mutual Fund - U.S. Large-Cap (b)
|
2,969
|
|
|
2,969
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income:
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds - Bonds (a)
|
15,000
|
|
|
—
|
|
|
15,000
|
|
|
—
|
|
||||
Total
|
$
|
41,653
|
|
|
$
|
2,969
|
|
|
$
|
38,684
|
|
|
$
|
—
|
|
(a)
|
This category represents common/collective trust fund investments through a commingled employee benefit trust (excluding real estate). These commingled funds are not traded publicly; however, the majority of the underlying assets held in these funds are stocks and bonds that are traded on active markets and prices for these assets are readily observable. Also included in these funds are interest rate swaps, asset-backed securities, mortgage-backed securities and other investments with observable market values. Holdings in these commingled funds are classified as Level 2 investments.
|
(b)
|
This category represents mutual fund investments. The mutual funds are actively traded on exchanges and price quotes for the shares are readily available. These mutual funds are classified as Level 1 investments.
|
(c)
|
This category represents Company-owned life insurance policies with a nationally known life insurance company. The value of these policies is backed by a series of common/collective trust funds held by the insurance carrier similar to category (a) above. Holdings in these insurance policies are classified as Level 2 investments.
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||
2015
|
$
|
9,998
|
|
|
$
|
4,850
|
|
2016
|
$
|
10,555
|
|
|
$
|
5,072
|
|
2017
|
$
|
10,950
|
|
|
$
|
5,095
|
|
2018
|
$
|
12,228
|
|
|
$
|
5,149
|
|
2019
|
$
|
13,283
|
|
|
$
|
5,256
|
|
2020 - 2024
|
$
|
78,239
|
|
|
$
|
27,720
|
|
13.
|
LINES OF CREDIT:
|
Company
|
|
Total Facility
|
|
Usage
|
|
Available Liquidity
|
|
Expiration Date
|
||||||
SJG:
|
|
|
|
|
|
|
|
|
||||||
Commercial Paper Program/Revolving Credit Facility
|
|
$
|
200,000
|
|
|
$
|
101,400
|
|
|
$
|
98,600
|
|
|
May 2018
|
Uncommitted Bank Lines
|
|
10,000
|
|
|
—
|
|
|
10,000
|
|
|
August 2015
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total SJG
|
|
210,000
|
|
|
101,400
|
|
|
108,600
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
SJI:
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Revolving Credit Facility
|
|
400,000
|
|
|
157,900
|
|
|
242,100
|
|
|
February 2018 (A)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total SJI
|
|
400,000
|
|
|
157,900
|
|
|
242,100
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total
|
|
$
|
610,000
|
|
|
$
|
259,300
|
|
|
$
|
350,700
|
|
|
|
14.
|
LONG-TERM DEBT:
|
|
|
|
2014
|
|
2013
|
|||||
Long-Term Debt (A):
|
|
|
|
|
|
|||||
South Jersey Gas Company:
|
|
|
|
|
|
|||||
First Mortgage Bonds: (B)
|
|
|
|
|
|
|||||
4.52%
|
Series due 2014 (C)
|
|
—
|
|
|
11,000
|
|
|||
5.115%
|
Series due 2014 (C)
|
|
—
|
|
|
10,000
|
|
|||
5.387%
|
Series due 2015
|
|
10,000
|
|
|
10,000
|
|
|||
5.437%
|
Series due 2016
|
|
10,000
|
|
|
10,000
|
|
|||
4.6%
|
Series due 2016
|
|
17,000
|
|
|
17,000
|
|
|||
4.657%
|
Series due 2017
|
|
15,000
|
|
|
15,000
|
|
|||
7.97%
|
Series due 2018
|
|
10,000
|
|
|
10,000
|
|
|||
7.125%
|
Series due 2018
|
|
20,000
|
|
|
20,000
|
|
|||
5.587%
|
Series due 2019
|
|
10,000
|
|
|
10,000
|
|
|||
3.00%
|
Series due 2024
|
|
50,000
|
|
|
50,000
|
|
|||
3.03%
|
Series due 2024
|
|
35,000
|
|
|
35,000
|
|
|||
3.63%
|
Series due 2025
|
|
10,000
|
|
|
10,000
|
|
|||
4.84%
|
Series due 2026
|
|
15,000
|
|
|
15,000
|
|
|||
4.93%
|
Series due 2026
|
|
45,000
|
|
|
45,000
|
|
|||
4.03%
|
Series due 2027
|
|
45,000
|
|
|
45,000
|
|
|||
4.01%
|
Series due 2030
|
|
50,000
|
|
|
50,000
|
|
|||
4.23%
|
Series due 2030 (D)
|
|
30,000
|
|
|
—
|
|
|||
3.74%
|
Series due 2032
|
|
35,000
|
|
|
35,000
|
|
|||
5.55%
|
Series due 2033
|
|
32,000
|
|
|
32,000
|
|
|||
6.213%
|
Series due 2034
|
|
10,000
|
|
|
10,000
|
|
|||
5.45%
|
Series due 2035
|
|
10,000
|
|
|
10,000
|
|
|||
Series A 2006 Bonds at variable rates due 2036 (E)
|
|
25,000
|
|
|
25,000
|
|
||||
SJG Term Facility (F)
|
|
59,000
|
|
|
—
|
|
||||
|
|
|
|
|
|
|||||
Marina Energy LLC: (G)
|
|
|
|
|
|
|||||
Series A 2001 Bonds at variable rates due 2031
|
|
20,000
|
|
|
20,000
|
|
||||
Series B 2001 Bonds at variable rates due 2021
|
|
25,000
|
|
|
25,000
|
|
||||
Series A 2006 Bonds at variable rates due 2036
|
|
16,400
|
|
|
16,400
|
|
||||
|
|
|
|
|
||||||
South Jersey Industries:
|
|
|
|
|
||||||
2.39
|
%
|
Series A 2012 Notes due 2015
|
|
64,000
|
|
|
64,000
|
|
||
2.71
|
%
|
Series B 2012 Notes due 2017
|
|
16,000
|
|
|
16,000
|
|
||
3.05
|
%
|
Series due 2019 (H)
|
|
60,000
|
|
|
—
|
|
||
3.05
|
%
|
Series due 2019 (H)
|
|
30,000
|
|
|
—
|
|
||
3.05
|
%
|
Series due 2019 (H)
|
|
50,000
|
|
|
—
|
|
||
3.46
|
%
|
Series C 2012 Notes due 2022
|
|
35,000
|
|
|
35,000
|
|
||
Series Notes at variable rates due 2019 (H)
|
|
40,000
|
|
|
—
|
|
||||
Series Notes at variable rates due 2019 (H)
|
|
60,000
|
|
|
—
|
|
||||
South Jersey Industries Term Loan at variable rates due 2015 (I)
|
|
50,000
|
|
|
50,000
|
|
||||
|
|
|
|
|
|
|||||
Total Long-Term Debt Outstanding
|
|
1,009,400
|
|
|
701,400
|
|
||||
Less Current Maturities
|
|
(149,909
|
)
|
|
(21,000
|
)
|
||||
|
|
|
|
|
|
|||||
Total Long-Term Debt
|
|
$
|
859,491
|
|
|
$
|
680,400
|
|
(A)
|
Long-term debt maturities and sinking funds requirements for the succeeding
five
years are as follows (in thousands): 2015,
$149,909
; 2016,
$27,909
; 2017,
$90,909
; 2018,
$38,909
; and 2019,
$258,909
.
|
(B)
|
The First Mortgage dated October 1, 1947, as supplemented, securing the First Mortgage Bonds constitutes a direct first mortgage lien on substantially all utility plant.
|
(C)
|
In July 2014, SJG retired
$11.0 million
aggregate principal amount of
4.52%
MTN's at maturity. In September 2014, SJG retired
$10.0 million
aggregate principal amount of
5.115%
MTN's at maturity.
|
(D)
|
In January 2014, SJG issued
$30.0 million
aggregate principal amount of
4.23%
Medium Term Notes due January 2030.
|
(E)
|
These variable rate demand bonds bear interest at a floating rate that resets weekly. The interest rate as of
December 31, 2014
was
0.08%
. Liquidity support on these bonds is provided under a separate letter of credit facility that expires in August 2015; as such, these bonds have been included in the current portion of long-term debt on the consolidated balance sheets. These bonds contain no financial covenants.
|
(F)
|
In June 2014, SJG entered into a
$200.0 million
multiple-draw term facility offered by a syndicate of banks which expires in June 2017. SJG can draw under this facility through June 2016 and this facility bears interest at a floating rate based on LIBOR plus a spread determined by SJG's credit ratings. As of December 31, 2014, SJG had borrowed an aggregate
$59.0 million
under this facility and the proceeds were used to pay down short-term debt.
|
(G)
|
Marina has issued
$61.4 million
of unsecured variable-rate revenue bonds through the New Jersey Economic Development Authority (NJEDA). The variable rates at
December 31, 2014
for the Series A 2001, Series B 2001, and Series A 2006 bonds were
0.08%
,
0.16%
and
0.08%
respectively. The interest rate on all but
$39.0 million
of the bonds has been effectively fixed via interest rate swaps at
4.22%
until January 2026. These bonds contain no financial covenants. Liquidity support on these bonds is provided under a letter of credit facility from a commercial bank that expires in August, 2015.
|
(H)
|
In June 2014, SJI entered into a Note Purchase Agreement that provided for SJI to issue an aggregate of
$240.0 million
of medium term notes, all of which were issued as follows: (a) in June 2014, SJI issued
$60.0 million
aggregate principal amount of
3.05%
Senior Notes due June 2019, and
$40.0 million
aggregate principal amount of Floating Rate Senior Notes due June 2019; (b) in August 2014, SJI issued
$30.0 million
aggregate principal amount of
3.05%
Senior Notes due August 2019; and (c) in September 2014, SJI issued
$50.0 million
aggregate principal amount of
3.05%
Senior Notes due September 2019, and
$60.0 million
aggregate principal amount of Floating Rate Senior Notes due September 2019. At December 31, 2014, the floating rate was
1.57%
.
|
(I)
|
In October 2013, SJI entered into an unsecured, variable-rate term loan of
$50.0 million
, which matures in October 2015. This agreement replaces existing facilities that were set to expire in November 2013. The variable rate at December 31, 2013 was
1.20%
.
|
15.
|
COMMITMENTS AND CONTINGENCIES:
|
|
2014
|
|
2013
|
||||
Beginning of Year
|
$
|
123,429
|
|
|
$
|
112,098
|
|
Accruals
|
18,533
|
|
|
22,821
|
|
||
Expenditures
|
(13,790
|
)
|
|
(11,490
|
)
|
||
End of Year
|
$
|
128,172
|
|
|
$
|
123,429
|
|
16.
|
DERIVATIVE INSTRUMENTS:
|
Notional Amount
|
|
Fixed Interest Rate
|
|
Start Date
|
|
Maturity
|
|
Type of Debt
|
|
Obligor
|
||
$
|
14,500,000
|
|
|
3.905%
|
|
3/17/2006
|
|
1/15/2026
|
|
Tax-exempt
|
|
Marina
|
$
|
500,000
|
|
|
3.905%
|
|
3/17/2006
|
|
1/15/2026
|
|
Tax-exempt
|
|
Marina
|
$
|
330,000
|
|
|
3.905%
|
|
3/17/2006
|
|
1/15/2026
|
|
Tax-exempt
|
|
Marina
|
$
|
7,100,000
|
|
|
4.895%
|
|
2/1/2006
|
|
2/1/2016
|
|
Taxable
|
|
Marina
|
$
|
12,500,000
|
|
|
3.430%
|
|
12/1/2006
|
|
2/1/2036
|
|
Tax-exempt
|
|
SJG
|
$
|
12,500,000
|
|
|
3.430%
|
|
12/1/2006
|
|
2/1/2036
|
|
Tax-exempt
|
|
SJG
|
Derivatives not designated as hedging instruments under GAAP
|
|
2014
|
|
2013
|
||||||||||||
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Energy related commodity contracts:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related – Current
|
|
85,368
|
|
|
109,744
|
|
|
$
|
56,327
|
|
|
$
|
77,993
|
|
||
Derivatives – Energy Related – Non-Current
|
|
13,905
|
|
|
19,926
|
|
|
26,451
|
|
|
22,131
|
|
||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives - Other
|
|
—
|
|
|
10,732
|
|
|
—
|
|
|
6,676
|
|
||||
Total derivatives not designated as hedging instruments under GAAP
|
|
99,273
|
|
|
140,402
|
|
|
82,778
|
|
|
106,800
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total Derivatives
|
|
$
|
99,273
|
|
|
$
|
140,402
|
|
|
$
|
82,778
|
|
|
$
|
106,800
|
|
Derivatives in Cash Flow Hedging Relationships
|
|
2014
|
|
2013
|
|
2012
|
||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
||||||
Losses recognized in AOCL on effective portion
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(752
|
)
|
Losses reclassified from AOCL into income (a)
|
|
$
|
(419
|
)
|
|
$
|
(448
|
)
|
|
$
|
(594
|
)
|
Losses recognized in income on ineffective portion (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
Derivatives Not Designated as Hedging Instruments under GAAP
|
|
2014
|
|
2013
|
|
2012
|
||||||
Losses on energy related commodity contracts (a)
|
|
$
|
(6,592
|
)
|
|
$
|
(25,823
|
)
|
|
$
|
(193
|
)
|
(Losses) gains on interest rate contracts (b)
|
|
(467
|
)
|
|
2,760
|
|
|
660
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
(7,059
|
)
|
|
$
|
(23,063
|
)
|
|
$
|
467
|
|
17.
|
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES:
|
•
|
Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
•
|
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
|
As of December 31, 2014
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Available-for-Sale Securities (A)
|
$
|
8,922
|
|
|
$
|
5,952
|
|
|
$
|
2,970
|
|
|
$
|
—
|
|
Derivatives – Energy Related Assets (B)
|
99,273
|
|
|
21,675
|
|
|
43,093
|
|
|
34,505
|
|
||||
|
$
|
108,195
|
|
|
$
|
27,627
|
|
|
$
|
46,063
|
|
|
$
|
34,505
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Liabilities (B)
|
$
|
129,670
|
|
|
$
|
49,009
|
|
|
$
|
40,548
|
|
|
$
|
40,113
|
|
Derivatives – Other (C)
|
10,732
|
|
|
—
|
|
|
10,732
|
|
|
—
|
|
||||
|
$
|
140,402
|
|
|
$
|
49,009
|
|
|
$
|
51,280
|
|
|
$
|
40,113
|
|
As of December 31, 2013
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Available-for-Sale Securities (A)
|
$
|
8,716
|
|
|
$
|
8,716
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – Energy Related Assets (B)
|
82,778
|
|
|
4,385
|
|
|
27,182
|
|
|
51,211
|
|
||||
|
$
|
91,494
|
|
|
$
|
13,101
|
|
|
$
|
27,182
|
|
|
$
|
51,211
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Liabilities (B)
|
$
|
100,124
|
|
|
$
|
4,236
|
|
|
$
|
52,772
|
|
|
$
|
43,116
|
|
Derivatives – Other (C)
|
6,676
|
|
|
—
|
|
|
6,676
|
|
|
—
|
|
||||
|
$
|
106,800
|
|
|
$
|
4,236
|
|
|
$
|
59,448
|
|
|
$
|
43,116
|
|
Type
|
Fair Value at December 31, 2014
|
Valuation Technique
|
Significant Unobservable Input
|
Range [Weighted Average]
|
|||||
|
Assets
|
Liabilities
|
|
|
|
||||
Forward Contract - Natural Gas
|
$
|
26,485
|
|
$
|
33,882
|
|
Discounted Cash Flow
|
Forward price (per dt)
|
$(2.04) - $7.83 [$(0.30)]
|
Forward Contract - Electric
|
$
|
8,020
|
|
$
|
6,231
|
|
Discounted Cash Flow
|
Fixed electric load profile (on-peak)
|
8.06% - 100.00% [55.97%]
|
Fixed electric load profile (off-peak)
|
0.00% - 91.94% [44.03%]
|
Type
|
Fair Value at December 31, 2013
|
Valuation Technique
|
Significant Unobservable Input
|
Range [Weighted Average]
|
|||||
|
Assets
|
Liabilities
|
|
|
|
||||
Forward Contract - Natural Gas
|
$
|
41,444
|
|
$
|
36,043
|
|
Discounted Cash Flow
|
Forward price (per dt)
|
$(1.75) - $6.05 [$(0.79)]
|
Forward Contract - Electric
|
$
|
9,767
|
|
$
|
7,073
|
|
Discounted Cash Flow
|
Fixed electric load profile (on-peak)
|
8.06% - 100.00% [54.55%]
|
Fixed electric load profile (off-peak)
|
0.00% - 91.94% [45.45%]
|
|
|
Year Ended December 31, 2014
|
||
Balance at January 1, 2014
|
|
$
|
8,095
|
|
Other changes in fair value from continuing and new contracts, net
|
|
(17,153
|
)
|
|
Settlements
|
|
3,450
|
|
|
|
|
|
||
Balance at December 31, 2014
|
|
$
|
(5,608
|
)
|
|
|
Year Ended December 31, 2013
|
||
Balance at January 1, 2013
|
|
$
|
2,762
|
|
Other changes in fair value from continuing and new contracts, net
|
|
1,573
|
|
|
Transfers in/(out) of Level 3 (A)
|
|
2,748
|
|
|
Settlements
|
|
1,012
|
|
|
|
|
|
||
Balance at December 31, 2013
|
|
$
|
8,095
|
|
18.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS (AOCL):
|
|
Postretirement Liability Adjustment
|
|
Unrealized Gain (Loss) on Derivatives-Other
|
|
Unrealized Gain (Loss) on Available-for-Sale Securities
|
|
Other Comprehensive Income (Loss) of Affiliated Companies
|
|
Total
|
||||||||||
Balance at January 1, 2014 (a)
|
$
|
(18,503
|
)
|
|
$
|
(2,697
|
)
|
|
$
|
397
|
|
|
$
|
43
|
|
|
$
|
(20,760
|
)
|
Other comprehensive income before reclassifications
|
(11,012
|
)
|
|
|
|
76
|
|
|
|
|
|
(10,936
|
)
|
||||||
Amounts reclassified from AOCL (b)
|
1,852
|
|
|
247
|
|
|
(548
|
)
|
|
(113
|
)
|
|
1,438
|
|
|||||
Net current period other comprehensive income
|
(9,160
|
)
|
|
247
|
|
|
(472
|
)
|
|
(113
|
)
|
|
(9,498
|
)
|
|||||
Balance at December 31, 2014 (a)
|
$
|
(27,663
|
)
|
|
$
|
(2,450
|
)
|
|
$
|
(75
|
)
|
|
$
|
(70
|
)
|
|
$
|
(30,258
|
)
|
|
Amounts Reclassified from AOCL
|
|
Affected Line Item in the Condensed Consolidated Statements of Income
|
||||
For the Year Ended December 31, 2014
|
|
||||||
Actuarial Loss on Postretirement Benefits
|
$
|
3,023
|
|
|
Operating Expenses: Operations
|
||
Income Taxes
|
(1,171
|
)
|
|
Income Taxes (a)
|
|||
|
$
|
1,852
|
|
|
|
||
Unrealized Gain on Derivatives-Other - interest rate contracts designated as cash flow hedges
|
$
|
418
|
|
|
Interest Charges
|
||
Income Taxes
|
(171
|
)
|
|
Income Taxes (a)
|
|||
|
$
|
247
|
|
|
|
||
|
|
|
|
||||
Unrealized Loss on Available-for-Sale Securities
|
$
|
(918
|
)
|
|
Other Income
|
||
Income Taxes
|
370
|
|
|
Income Taxes (a)
|
|||
|
$
|
(548
|
)
|
|
|
||
|
|
|
|
||||
Income of Affiliated Companies
|
$
|
(176
|
)
|
|
Equity in Loss of Affiliated Companies
|
||
Income Taxes
|
63
|
|
|
Income Taxes (a)
|
|||
|
$
|
(113
|
)
|
|
|
||
|
|
|
|
||||
Losses from reclassifications for the period net of tax
|
$
|
1,438
|
|
|
|
19.
|
SUBSEQUENT EVENT:
|
|
|
2014 Quarter Ended
|
|
2013 Quarter Ended
|
||||||||||||||||||||||||||||
|
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
||||||||||||||||
Operating Revenues
|
|
$
|
350,201
|
|
|
$
|
133,271
|
|
|
$
|
122,427
|
|
|
$
|
281,097
|
|
|
$
|
255,631
|
|
|
$
|
122,592
|
|
|
$
|
128,808
|
|
|
$
|
224,390
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of Sales - (Excluding depreciation)
|
|
228,138
|
|
|
78,947
|
|
|
76,073
|
|
|
153,794
|
|
|
152,301
|
|
|
87,827
|
|
|
89,160
|
|
|
139,703
|
|
||||||||
Operations and Maintenance Including Fixed Charges
|
|
64,684
|
|
|
56,174
|
|
|
56,039
|
|
|
69,384
|
|
|
52,226
|
|
|
47,114
|
|
|
47,789
|
|
|
54,674
|
|
||||||||
Income Taxes
|
|
11,869
|
|
|
(9,510
|
)
|
|
(8,325
|
)
|
|
10,415
|
|
|
7,772
|
|
|
(11,632
|
)
|
|
(5,533
|
)
|
|
(9,621
|
)
|
||||||||
Energy and Other Taxes
|
|
1,953
|
|
|
1,241
|
|
|
1,196
|
|
|
1,330
|
|
|
3,833
|
|
|
1,664
|
|
|
1,458
|
|
|
2,861
|
|
||||||||
Total Expenses
|
|
306,644
|
|
|
126,852
|
|
|
124,983
|
|
|
234,923
|
|
|
216,132
|
|
|
124,973
|
|
|
132,874
|
|
|
187,617
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other Income and Expense
|
|
4,654
|
|
|
3,282
|
|
|
(1,720
|
)
|
|
(2,182
|
)
|
|
3,838
|
|
|
3,297
|
|
|
2,845
|
|
|
2,584
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Income (Loss) from Continuing Operations
|
|
48,211
|
|
|
9,701
|
|
|
(4,276
|
)
|
|
43,992
|
|
|
43,337
|
|
|
916
|
|
|
(1,221
|
)
|
|
39,357
|
|
||||||||
Loss from Discontinued Operations - (Net of tax benefit)
|
|
(313
|
)
|
|
(80
|
)
|
|
(120
|
)
|
|
(69
|
)
|
|
(471
|
)
|
|
(28
|
)
|
|
(200
|
)
|
|
(97
|
)
|
||||||||
Net Income (Loss)
|
|
$
|
47,898
|
|
|
$
|
9,621
|
|
|
$
|
(4,396
|
)
|
|
$
|
43,923
|
|
|
$
|
42,866
|
|
|
$
|
888
|
|
|
$
|
(1,421
|
)
|
|
$
|
39,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic Earnings Per Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Continuing Operations
|
|
$
|
1.47
|
|
|
$
|
0.29
|
|
|
$
|
(0.13
|
)
|
|
$
|
1.31
|
|
|
$
|
1.37
|
|
|
$
|
0.03
|
|
|
$
|
(0.04
|
)
|
|
$
|
1.22
|
|
Discontinued Operations
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.02
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Basic Earnings Per Common Share
|
|
$
|
1.46
|
|
|
$
|
0.29
|
|
|
$
|
(0.13
|
)
|
|
$
|
1.31
|
|
|
$
|
1.35
|
|
|
$
|
0.03
|
|
|
$
|
(0.04
|
)
|
|
$
|
1.22
|
|
Average Shares of Common Stock Outstanding - Basic
|
|
32,765
|
|
|
32,963
|
|
|
33,166
|
|
|
33,652
|
|
|
31,757
|
|
|
31,949
|
|
|
31,984
|
|
|
32,259
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted Earnings Per Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Continuing Operations
|
|
$
|
1.47
|
|
|
$
|
0.29
|
|
|
$
|
(0.13
|
)
|
|
$
|
1.30
|
|
|
$
|
1.36
|
|
|
$
|
0.03
|
|
|
$
|
(0.04
|
)
|
|
$
|
1.22
|
|
Discontinued Operations
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Diluted Earnings Per Common Share
|
|
$
|
1.46
|
|
|
$
|
0.29
|
|
|
$
|
(0.13
|
)
|
|
$
|
1.30
|
|
|
$
|
1.35
|
|
|
$
|
0.03
|
|
|
$
|
(0.04
|
)
|
|
$
|
1.22
|
|
Average Shares of Common Stock Outstanding - Diluted
|
|
32,842
|
|
|
33,037
|
|
|
33,166
|
|
|
33,727
|
|
|
31,811
|
|
|
32,012
|
|
|
31,984
|
|
|
32,306
|
|
NOTE:
|
Because of the seasonal nature of the business and the volatility from energy related derivatives, statements for the 3-month periods are not indicative of the results for a full year.
|
(a)
|
Listed below are all financial statements and schedules filed as part of this Report:
|
(b)
|
List of Exhibits (Exhibit Number is in Accordance with the Exhibit Table in Item 601 of Regulation S-K).
|
Exhibit Number
|
|
Description
|
|
Reference
|
|
|
|
|
|
(3)(a)(i)
|
|
Certificate of Incorporation of South Jersey Industries, Inc., as amended through April 19, 1984.
|
|
Incorporated by reference from Exhibit (4)(a) of Form S-2 (2-91515).
|
|
|
|
|
|
(3)(a)(ii)
|
|
Amendment to Certificate of Incorporation relating to two-for-one stock split effective as of April 28, 1987.
|
|
Incorporated by reference from Exhibit (4)(e)(1) of Form S-3 (33-1320).
|
|
|
|
|
|
(3)(a)(iii)
|
|
Amendment to Certificate of Incorporation relating to director and officer liability.
|
|
Incorporated by reference from Exhibit (4)(e)(2) of Form S-3 (33-1320).
|
|
|
|
|
|
(3)(a)(iv)
|
|
Amendment to Certificate of Incorporation relating to two-for-one stock split effective as of June 30, 2005.
|
|
Incorporated by reference from Exhibit 3 of Form 10-Q of SJI filed on May 10, 2005.
|
(3)(a)(v)
|
|
Amendment to Certificate of Incorporation as of April 23, 2009 establishing the annual election of the South Jersey Industries, Inc. directors
|
|
Incorporated by reference from Exhibit 99.2 of Form 8-K filed on April 28, 2009.
|
|
|
|
|
|
(3)(b)(i)
|
|
Bylaws of South Jersey Gas Company as amended and restated through January 1, 2013.
|
|
Incorporated by reference from Exhibit 3.1 of Form 8-K of SJG as filed January 4, 2013.
|
|
|
|
|
|
(3)(b)(ii)
|
|
Bylaws of South Jersey Industries, Inc. as amended January 23, 2015.
|
|
Incorporated by reference from Exhibit 3.2 of Form 8-K of SJI as filed January 26, 2015.
|
|
|
|
|
|
(4)(a)
|
|
Form of Stock Certificate for common stock.
|
|
Incorporated by reference from Exhibit (4)(a) of Form 10-K for 1985 (1-6364).
|
|
|
|
|
|
(4)(b)(i)
|
|
First Mortgage Indenture dated October 1, 1947.
|
|
Incorporated by reference from Exhibit (4)(b)(i) of Form 10-K for 1987 (1-6364).
|
|
|
|
|
|
(4)(b)(ii)
|
|
Nineteenth Supplemental Indenture dated as of April 1, 1992.
|
|
Incorporated by reference from Exhibit (4)(b)(xvii) of Form 10-K for 1992 (1-6364).
|
|
|
|
|
|
(4)(b)(iii)
|
|
Twenty-First Supplemental Indenture dated as of March 1, 1997.
|
|
Incorporated by reference from Exhibit (4)(b)(xviv) of Form 10-K for 1997(1-6364).
|
|
|
|
|
|
(4)(b)(iv)
|
|
Twenty-Second Supplemental Indenture dated as of October 1, 1998.
|
|
Incorporated by reference from Exhibit (4)(b)(ix) of Form S-3 (333-62019).
|
|
|
|
|
|
(4)(b)(v)
|
|
Twenty-Third Supplemental Indenture dated as of September 1, 2002.
|
|
Incorporated by reference from Exhibit (4)(b)(x) of Form S-3 (333-98411).
|
|
|
|
|
|
(4)(b)(vi)
|
|
Twenty-Fourth Supplemental Indenture dated as of September 1, 2005.
|
|
Incorporated by reference from Exhibit (4)(b)(vi) of Form S-3 (333-126822).
|
|
|
|
|
|
(4)(b)(vii)
|
|
Amendment to Twenty-Fourth Supplemental Indenture dated as of March 31, 2006
|
|
Incorporated by reference from Exhibit 4 of Form 8-K of SJG as filed April 26, 2006.
|
|
|
|
|
|
(4)(b)(viii)
|
|
Amendment No. 2 to the Twenty-Fourth Supplemental Indenture dated as of December 20, 2010.
|
|
Incorporated by reference from Exhibit (4)(b)(viii) of Form 10-K for 2010
|
|
|
|
|
|
(4)(b)(ix)
|
|
Loan Agreement by and between New Jersey Economic Development Authority and SJG dated April 1, 2006.
|
|
Incorporated by reference from Exhibit 10 of Form 8-K of SJG as filed April 26, 2006.
|
|
|
|
|
|
(4)(b)(x)
|
|
Twenty-Fifth Supplemental Indenture dated as of March 29, 2012.
|
|
Incorporated by reference from Exhibit 4.1 of Form 8-K of SJG as filed April 3, 2012.
|
|
|
|
|
|
(4)(c)(i)
|
|
Medium Term Note Indenture of Trust dated October 1, 1998.
|
|
Incorporated by reference from Exhibit 4(e) of Form S-3 (333-62019).
|
|
|
|
|
|
(4)(c)(ii)
|
|
First Supplement to Indenture of Trust dated as of June 29, 2000.
|
|
Incorporated by reference from Exhibit 4.1 of Form 8-K of SJG dated July 12, 2001.
|
|
|
|
|
|
(4)(c)(iii)
|
|
Second Supplement to Indenture of Trust dated as of July 5, 2000.
|
|
Incorporated by reference from Exhibit 4.2 of Form 8-K of SJG dated July 12, 2001.
|
|
|
|
|
|
(4)(c)(iv)
|
|
Third Supplement to Indenture of Trust dated as of July 9, 2001.
|
|
Incorporated by reference from Exhibit 4.3 of Form 8-K of SJG dated July 12, 2001.
|
|
|
|
|
|
(4)(c)(v)
|
|
Fourth Supplement to Indenture of Trust dated as of February 26, 2010.
|
|
Incorporated by reference from Exhibit 4.1 of Form 8-K of SJG dated March 5, 2010.
|
|
|
|
|
|
(10)(a)(i)
|
|
Gas storage agreement (GSS) between South Jersey Gas Company and Transco dated October 1, 1993.
|
|
Incorporated by reference from Exhibit (10)(d) of Form 10-K for 1993 (1-6364).
|
Exhibit Number
|
|
Description
|
|
Reference
|
|
|
|
|
|
(10)(a)(ii)
|
|
Gas storage agreement (LG-A) between South Jersey Gas Company and Transco dated June 3, 1974.
|
|
Incorporated by reference from Exhibit (5)(f) of Form S-7 (2-56223).
|
|
|
|
|
|
(10)(a)(iii)
|
|
Gas storage agreement (WSS) between South Jersey Resources Group LLC and Transco dated May 1, 2006.
|
|
Incorporated by reference from Exhibit (10)(a)(iii) of Form 10-K for 2008.
|
|
|
|
|
|
(10)(a)(iv)
|
|
Gas storage agreement (LSS) between South Jersey Gas Company and Transco dated October 1, 1993.
|
|
Incorporated by reference from Exhibit (10)(i) of Form 10-K for 1993 (1-6364).
|
|
|
|
|
|
(10)(a)(v)
|
|
Gas storage agreement (SS-1) between South Jersey Gas Company and Transco dated May 10, 1987 (effective April 1, 1988).
|
|
Incorporated by reference from Exhibit (10)(i)(a) of Form 10-K for 1988 (1-6364).
|
|
|
|
|
|
(10)(b)(i)
|
|
Gas storage agreement (SS-2) between South Jersey Gas Company and Transco dated July 25, 1990.
|
|
Incorporated by reference from Exhibit (10)(i)(i) of Form 10-K for 1991 (1-6364).
|
|
|
|
|
|
(10)(b)(ii)
|
|
Amendment to gas transportation agreement dated December 20, 1991 between South Jersey Gas Company and Transco dated October 5, 1993.
|
|
Incorporated by reference from Exhibit (10)(i)(k) of Form 10-K for 1993 (1-6364).
|
|
|
|
|
|
(10)(b)(iii)
|
|
CNJEP Service agreement between South Jersey Gas Company and Transco dated June 27, 2005.
|
|
Incorporated by reference from Exhibit (10)(i)(l) of Form 10-K for 2005 (1-6364).
|
|
|
|
|
|
(10)(c)(i)
|
|
FTS Service Agreement No. 38099 between South Jersey Gas Company and Columbia Gas Transmission Corporation dated November 1, 1993.
|
|
Incorporated by reference from Exhibit (10)(k)(n) of Form 10-K for 1993 (1-6364).
|
|
|
|
|
|
(10)(c)(ii)
|
|
NTS Service Agreement No. 39305 between South Jersey Gas Company and Columbia Gas Transmission Corporation dated November 1, 1993.
|
|
Incorporated by reference from Exhibit (10)(k)(o) of Form 10-K for 1993 (1-6364).
|
|
|
|
|
|
(10)(c)(iii)
|
|
FSS Service Agreement No. 38130 between South Jersey Gas Company and Columbia Gas Transmission Corporation dated November 1, 1993.
|
|
Incorporated by reference from Exhibit (10)(k)(p) of Form 10-K for 1993 (1-6364).
|
(10)(d)(i)
|
|
SST Service Agreement No. 38086 between South Jersey Gas Company and Columbia Gas Transmission Corporation dated November 1, 1993.
|
|
Incorporated by reference from Exhibit (10)(k)(q) of Form 10-K for 1993 (1-6364).
|
|
|
|
|
|
(10)(e)(i)*
|
|
Deferred Payment Plan for Directors of South Jersey Industries, Inc., South Jersey Gas Company, Energy & Minerals, Inc., R&T Group, Inc. and South Jersey Energy Company as amended and restated October 21, 1994.
|
|
Incorporated by reference from Exhibit (10)(l) of Form 10-K for 1994 (1-6364).
|
|
|
|
|
|
(10)(e)(ii)*
|
|
Schedule of Deferred Compensation Agreements.
|
|
Incorporated by reference from Exhibit (10)(l)(b) of Form 10-K for 1997 (1-6364).
|
|
|
|
|
|
(10)(e)(iii)*
|
|
Form of Officer Change in Control Agreements, effective January 1, 2013, between certain officers and either South Jersey Industries, Inc. or its subsidiaries.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI as filed January 25, 2013.
|
|
|
|
|
|
(10)(e)(iv)*
|
|
Schedule of Officer Agreements (filed herewith).
|
|
|
|
|
|
|
|
(10)(f)(i)*
|
|
Officer Severance Plan (filed herewith).
|
|
|
(10)(f)(ii)*
|
|
Supplemental Executive Retirement Program, as amended and restated effective January 1, 2009 and Form of Agreement between certain SJI or subsidiary officers.
|
|
Incorporated by reference from Exhibit (10)(f)(ii) of Form 10-K for 2009.
|
|
|
|
|
|
(10)(f)(iii)*
|
|
South Jersey Industries, Inc. 1997 Stock-Based Compensation Plan (As Amended and Restated Effective January 1, 2012).
|
|
Incorporated by reference from Exhibit 10.3 of Form 8-K of SJI as filed January 6, 2012.
|
|
|
|
|
|
(10)(g)(i)
|
|
Four-Year Revolving Credit Agreement, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated May 2, 2011.
|
|
|
|
|
|
(10)(g)(ii)
|
|
Four-Year Revolving Credit Agreement, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated May 6, 2011.
|
|
|
|
|
|
(10)(g)(iii)
|
|
Note Purchase Agreement dated as of March 1, 2010.
|
|
Incorporated by reference from Exhibit 10 of Form 8-K of SJG dated March 5, 2010.
|
|
|
|
|
|
(10)(g)(iv)
|
|
Note Purchase Agreement dated as of December 30, 2010.
|
|
Incorporated by reference from Exhibit 10 of Form 8-K of SJG dated January 5, 2011.
|
|
|
|
|
|
(10)(g)(v)
|
|
Commercial Paper Dealer Agreement, dated as of July 1, 2011, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated July 1, 2011.
|
|
|
|
|
|
(10)(g)(vi)
|
|
Commercial Paper Dealer Agreement, dated as of January 5, 2012, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated January 9, 2012.
|
|
|
|
|
|
(10)(g)(vii)
|
|
Letter of Credit Reimbursement Agreements dated as of March 15, 2012.
|
|
Incorporated by reference from Exhibit 10.1-10.3 of Form 8-K of SJI dated March 21, 2012.
|
|
|
|
|
|
(10)(g)(viii)
|
|
Note Purchase Agreement dated as of April 2, 2012.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated April 3, 2012.
|
|
|
|
|
|
(10)(g)(ix)
|
|
Term Loan Credit Agreement, dated as of June 1, 2012, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated June 1, 2012.
|
|
|
|
|
|
(10)(g)(x)
|
|
Note Purchase Agreement, dated as of June 28, 2012, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated June 29, 2012.
|
|
|
|
|
|
(10)(g)(xi)
|
|
Note Purchase Agreement, dated as of September 20, 2012, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated September 25, 2012.
|
|
|
|
|
|
(10)(g)(xii)
|
|
First Amendment to Credit Agreement, dated as of February 11, 2013, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated February 14, 2013.
|
|
|
|
|
|
(10)(g)(xiii)
|
|
First Amendment to Credit Agreement, dated as of September 27, 2013, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated September 30, 2013.
|
|
|
|
|
|
(10)(g)(xiv)
|
|
Term Loan Credit Agreement, dated as of October 28, 2013, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated October 30, 2013.
|
|
|
|
|
|
(10)(g)(xv)
|
|
Note Purchase Agreement, dated as of November 21, 2013, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated November 21, 2013.
|
|
|
|
|
|
(10)(g)(xvi)
|
|
Second Amendment to Credit Agreement, dated as of September 27, 2013, for SJI.
|
|
Incorporated by reference from Exhibit 10(g)(xvi) of Form 10-K of SJI as filed February 28, 2014.
|
|
|
|
|
|
(10)(g)(xvii)
|
|
Term Loan Credit Agreement, dated as of June 5, 2014, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated June 5, 2014.
|
|
|
|
|
|
(10)(g)(xviii)
|
|
Note Purchase Agreement, dated as of June 26, 2014, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated June 26, 2014.
|
|
|
|
|
|
(12)
|
|
Calculation of Ratio of Earnings to Fixed Charges (Before Federal Income Taxes) (filed herewith).
|
|
|
|
|
|
|
|
(14)
|
|
Code of Ethics.
|
|
Incorporated by reference from Exhibit 14 of Form 10-K for 2007.
|
|
|
|
|
|
(21)
|
|
Subsidiaries of the Registrant (filed herewith).
|
|
|
|
|
|
|
|
(23)
|
|
Independent Registered Public Accounting Firm's Consent (filed herewith).
|
|
|
|
|
|
|
|
(31.1)
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
(31.2)
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
(32.1)
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
(32.2)
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
(101.INS)
|
|
eXtensible Business Reporting Language (XBRL) Instance Document (filed herewith).
|
|
|
(101.SCH)
|
|
XBRL Taxonomy Extension Schema (filed herewith).
|
|
|
|
|
|
|
|
(101.CAL)
|
|
XBRL Taxonomy Extension Calculation Linkbase (filed herewith).
|
|
|
|
|
|
|
|
(101.DEF)
|
|
XBRL Taxonomy Extension Definition Linkbase (filed herewith).
|
|
|
|
|
|
|
|
(101.LAB)
|
|
XBRL Taxonomy Extension Label Linkbase (filed herewith).
|
|
|
|
|
|
|
|
(101.PRE)
|
|
XBRL Taxonomy Extension Presentation Linkbase (filed herewith).
|
|
|
|
|
|
|
|
|
SOUTH JERSEY INDUSTRIES, INC.
|
||
|
BY:
|
/s/ Stephen H. Clark
|
|
|
|
Stephen H. Clark
|
|
|
|
Chief Financial Officer
|
|
|
Date:
|
February 27, 2015
|
|
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ Edward J. Graham
|
|
Chairman of the Board & Chief Executive Officer
|
February 27, 2015
|
(Edward J. Graham)
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Michael J. Renna
|
|
Director, President & Chief Operating Officer
|
February 27, 2015
|
(Michael J. Renna)
|
|
|
|
|
|
|
|
/s/ Stephen H. Clark
|
|
Chief Financial Officer
|
February 27, 2015
|
(Stephen H. Clark)
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
/s/ Sarah M. Barpoulis
|
|
Director
|
February 27, 2015
|
(Sarah M. Barpoulis)
|
|
|
|
|
|
|
|
/s/ Thomas A. Bracken
|
|
Director
|
February 27, 2015
|
(Thomas A. Bracken)
|
|
|
|
|
|
|
|
/s/ Keith S. Campbell
|
|
Director
|
February 27, 2015
|
(Keith S. Campbell)
|
|
|
|
|
|
|
|
/s/ Victor A. Fortkiewicz
|
|
Director
|
February 27, 2015
|
(Victor A. Fortkiewicz)
|
|
|
|
|
|
|
|
/s/ Sheila Hartnett-Devlin
|
|
Director
|
February 27, 2015
|
(Sheila Hartnett-Devlin)
|
|
|
|
|
|
|
|
/s/ Walter M. Higgins, III
|
|
Director
|
February 27, 2015
|
(Walter M. Higgins, III)
|
|
|
|
|
|
|
|
/s/ Sunita Holzer
|
|
Director
|
February 27, 2015
|
(Sunita Holzer)
|
|
|
|
|
|
|
|
/s/ Joseph H. Petrowski
|
|
Director
|
February 27, 2015
|
(Joseph H. Petrowski)
|
|
|
|
|
|
|
|
/s/ Frank L. Sims
|
|
Director
|
February 27, 2015
|
(Frank L. Sims)
|
|
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Management Service Fee Revenues
|
|
$
|
21,118
|
|
|
$
|
16,269
|
|
|
$
|
15,449
|
|
|
|
|
|
|
|
|
||||||
Operating Expenses:
|
|
|
|
|
|
|
||||||
Operations
|
|
18,183
|
|
|
14,979
|
|
|
13,869
|
|
|||
Depreciation
|
|
439
|
|
|
260
|
|
|
183
|
|
|||
Energy and Other Taxes
|
|
813
|
|
|
465
|
|
|
419
|
|
|||
Total Operating Expenses
|
|
19,435
|
|
|
15,704
|
|
|
14,471
|
|
|||
|
|
|
|
|
|
|
||||||
Operating Income
|
|
1,683
|
|
|
565
|
|
|
978
|
|
|||
|
|
|
|
|
|
|
||||||
Other Income:
|
|
|
|
|
|
|
||||||
Equity in Earnings of Subsidiaries
|
|
97,628
|
|
|
82,389
|
|
|
92,776
|
|
|||
Other
|
|
7,283
|
|
|
5,459
|
|
|
3,270
|
|
|||
|
|
|
|
|
|
|
|
|||||
Total Other Income
|
|
104,911
|
|
|
87,848
|
|
|
96,046
|
|
|||
|
|
|
|
|
|
|
||||||
Interest Charges
|
|
8,803
|
|
|
6,004
|
|
|
4,219
|
|
|||
Income Taxes
|
|
163
|
|
|
20
|
|
|
29
|
|
|||
|
|
|
|
|
|
|
||||||
Income from Continuing Operations
|
|
97,628
|
|
|
82,389
|
|
|
92,776
|
|
|||
|
|
|
|
|
|
|
||||||
Equity in Undistributed Earnings of Discontinued Subsidiaries
|
|
(582
|
)
|
|
(796
|
)
|
|
(1,168
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net Income
|
|
$
|
97,046
|
|
|
$
|
81,593
|
|
|
$
|
91,608
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Net Income
|
|
$
|
97,046
|
|
|
$
|
81,593
|
|
|
$
|
91,608
|
|
Other Comprehensive (Loss) Income - Net of Tax*
|
|
|
|
|
|
|
||||||
Postretirement Liability Adjustment
|
|
(9,160
|
)
|
|
4,934
|
|
|
(1,842
|
)
|
|||
Unrealized (Loss) Gain on Available-for-Sale Securities
|
|
(472
|
)
|
|
103
|
|
|
500
|
|
|||
Unrealized Gain (Loss) on Derivatives
|
|
134
|
|
|
5,308
|
|
|
(1,325
|
)
|
|||
Total Other Comprehensive (Loss) Income - Net of Tax*
|
|
(9,498
|
)
|
|
10,345
|
|
|
(2,667
|
)
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive Income
|
|
$
|
87,548
|
|
|
$
|
91,938
|
|
|
$
|
88,941
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Retained Earnings - Beginning
|
|
$
|
406,041
|
|
|
$
|
382,127
|
|
|
$
|
341,677
|
|
Net Income
|
|
97,046
|
|
|
81,593
|
|
|
91,608
|
|
|||
|
|
503,087
|
|
|
463,720
|
|
|
433,285
|
|
|||
|
|
|
|
|
|
|
||||||
Dividends Declared - Common Stock
|
|
(63,869
|
)
|
|
(57,679
|
)
|
|
(51,158
|
)
|
|||
|
|
|
|
|
|
|
||||||
Retained Earnings - Ending
|
|
$
|
439,218
|
|
|
$
|
406,041
|
|
|
$
|
382,127
|
|
|
||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
|
||||||
CASH PROVIDED BY OPERATING ACTIVITIES
|
|
$
|
22,244
|
|
|
$
|
1,316
|
|
|
$
|
1,840
|
|
|
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Net Advances to Associated Companies
|
|
(104,979
|
)
|
|
(68,900
|
)
|
|
(174,593
|
)
|
|||
Capital Expenditures
|
|
(1,610
|
)
|
|
(360
|
)
|
|
(454
|
)
|
|||
Proceeds from Sale of Property, Plant & Equipment
|
|
27
|
|
|
6
|
|
|
29
|
|
|||
Purchase of Company Owned Life Insurance
|
|
(1,250
|
)
|
|
(5,149
|
)
|
|
(4,547
|
)
|
|||
Investment in Affiliate
|
|
(25,000
|
)
|
|
(25,000
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Net Cash Used In Investing Activities
|
|
(132,812
|
)
|
|
(99,403
|
)
|
|
(179,565
|
)
|
|||
|
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
||||||
Proceeds from Issuance of Long Term Debt
|
|
240,000
|
|
|
—
|
|
|
115,000
|
|
|||
Payments for Issuance of Long Term Debt
|
|
(1,558
|
)
|
|
—
|
|
|
(665
|
)
|
|||
Net (Repayments of) Borrowing from Lines of Credits
|
|
(144,100
|
)
|
|
101,600
|
|
|
42,000
|
|
|||
Dividends on Common Stock
|
|
(63,869
|
)
|
|
(57,679
|
)
|
|
(50,942
|
)
|
|||
Proceeds from Sale of Common Stock
|
|
80,680
|
|
|
54,028
|
|
|
70,241
|
|
|||
|
|
|
|
|
|
|
||||||
Net Cash Provided by Financing Activities
|
|
111,153
|
|
|
97,949
|
|
|
175,634
|
|
|||
|
|
|
|
|
|
|
||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
585
|
|
|
(138
|
)
|
|
(2,091
|
)
|
|||
|
|
|
|
|
|
|
||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
|
1,831
|
|
|
1,969
|
|
|
4,060
|
|
|||
|
|
|
|
|
|
|
||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
|
$
|
2,416
|
|
|
$
|
1,831
|
|
|
$
|
1,969
|
|
|
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
|
||||
|
|
|
|
|
||||
Property Plant and Equipment:
|
|
|
|
|
||||
Nonutility Property, Plant and Equipment, at cost
|
|
$
|
3,521
|
|
|
$
|
1,506
|
|
Accumulated Depreciation
|
|
(1,370
|
)
|
|
(752
|
)
|
||
|
|
|
|
|
|
|
||
Property, Plant and Equipment - Net
|
|
2,151
|
|
|
754
|
|
||
|
|
|
|
|
|
|||
Investments:
|
|
|
|
|
|
|||
Investments in Subsidiaries
|
|
983,721
|
|
|
887,671
|
|
||
Available-for-Sale Securities
|
|
28
|
|
|
21
|
|
||
|
|
|
|
|
|
|
||
Total Investments
|
|
983,749
|
|
|
887,692
|
|
||
|
|
|
|
|
|
|||
Current Assets:
|
|
|
|
|
|
|||
Cash and Cash Equivalents
|
|
2,416
|
|
|
1,831
|
|
||
Receivable from Associated Companies
|
|
463,756
|
|
|
358,620
|
|
||
Accounts Receivable
|
|
35
|
|
|
46
|
|
||
Other
|
|
747
|
|
|
1,510
|
|
||
|
|
|
|
|
|
|
||
Total Current Assets
|
|
466,954
|
|
|
362,007
|
|
||
|
|
|
|
|
|
|
||
Other Noncurrent Assets
|
|
44,887
|
|
|
35,882
|
|
||
|
|
|
|
|
|
|
||
Total Assets
|
|
$
|
1,497,741
|
|
|
$
|
1,286,335
|
|
|
|
|
|
|
|
|
||
Capitalization and Liabilities
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Equity:
|
|
|
|
|
|
|||
Common Stock SJI
|
|
|
|
|
|
|||
Par Value $1.25 a share
|
|
|
|
|
|
|||
Authorized - 60,000,000 shares
|
|
|
|
|
|
|||
Outstanding - 34,167,430 (2014) and 32,715,042 (2013)
|
|
42,709
|
|
|
$
|
40,894
|
|
|
Premium on Common Stock
|
|
480,928
|
|
|
401,011
|
|
||
Treasury Stock (at par)
|
|
(165
|
)
|
|
(186
|
)
|
||
Accumulated Other Comprehensive Loss
|
|
(30,258
|
)
|
|
(20,760
|
)
|
||
Retained Earnings
|
|
439,218
|
|
|
406,041
|
|
||
|
|
|
|
|
|
|
||
Total Equity
|
|
932,432
|
|
|
827,000
|
|
||
|
|
|
|
|
|
|
||
Long-Term Debt
|
|
291,000
|
|
|
165,000
|
|
||
|
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
|
|
||
Notes Payable - Banks
|
|
144,300
|
|
|
288,400
|
|
||
Current Portion of Long-Term Debt
|
|
114,000
|
|
|
—
|
|
||
Payable to Associated Companies
|
|
413
|
|
|
257
|
|
||
Accounts Payable
|
|
400
|
|
|
322
|
|
||
Other Current Liabilities
|
|
5,062
|
|
|
2,063
|
|
||
|
|
|
|
|
|
|
||
Total Current Liabilities
|
|
264,175
|
|
|
291,042
|
|
||
|
|
|
|
|
|
|
||
Other Noncurrent Liabilities
|
|
10,134
|
|
|
3,293
|
|
||
|
|
|
|
|
|
|
||
Total Capitalization and Liabilities
|
|
$
|
1,497,741
|
|
|
$
|
1,286,335
|
|
1.
|
BASIS OF PRESENTATION:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Col. A
|
|
Col. B
|
|
Col. C
|
|
Col. D
|
|
Col. E
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Classification
|
|
Balance at Beginning of Period
|
|
Charged to Costs and Expenses
|
|
Charged to Other Accounts - Describe (a)
|
|
Deductions - Describe (b)
|
|
Balance at End of Period
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Provision for Uncollectible
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts for the Year Ended
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2014
|
|
$
|
5,854
|
|
|
$
|
9,519
|
|
|
$
|
(102
|
)
|
|
$
|
7,361
|
|
|
$
|
7,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Provision for Uncollectible
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts for the Year Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2013
|
|
$
|
5,924
|
|
|
$
|
4,245
|
|
|
$
|
(41
|
)
|
|
$
|
4,274
|
|
|
$
|
5,854
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Provision for Uncollectible
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts for the Year Ended
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2012
|
|
$
|
5,337
|
|
|
$
|
4,932
|
|
|
$
|
110
|
|
|
$
|
4,455
|
|
|
$
|
5,924
|
|
Name
|
Capacities in Which Served
|
Effective
Date
of
Agreement
|
Severance
Multiple of
Base Salary
and Average
Annual Bonus
|
Duration of Continued Medical
Insurance
|
|
|
|
|
|
Edward J. Graham
|
Chairman and Chief Executive Officer, South Jersey Industries, Inc.
|
1/1/13
|
3X
|
3 years
|
|
|
|
|
|
Michael J. Renna
|
Director, President and Chief Operating Officer, South Jersey Industries, Inc.
|
1/1/13
|
2X
|
2 years
|
|
|
|
|
|
Jeffrey E. DuBois
|
Senior Vice President, South Jersey Industries, Inc.
|
1/1/13
|
2X
|
2 years
|
|
|
|
|
|
Stephen H. Clark
|
Chief Financial Officer, South Jersey Industries, Inc.
|
1/1/13
|
2X
|
2 years
|
|
|
|
|
|
Gina M. Merritt-Epps
|
General Counsel and Corporate Secretary, South Jersey Industries, Inc.
|
1/1/13
|
2X
|
2 years
|
I.
|
Purpose
|
II.
|
Participation
|
|
A.
|
A Company officer designated as a Participant under this Plan by the Compensation Committee (the “Committee”) of the Board of Directors of SJI (the “Board”), and whose name is listed in
Schedule A
, as may be amended from time to time shall be eligible to participate in this Plan, each such designated employee, a “Participant.”
|
|
B.
|
A Participant may be removed from participation in the Plan by vote of the Committee. Once such removal is effective, the former Participant will not be entitled to benefits under the terms of the Plan unless and until again designated as a Participant in accordance with the applicable Plan terms.
|
III.
|
Entitlement to Plan Benefits
|
|
A.
|
A Participant shall be entitled to benefits under this Plan if the Committee determines that the following requirements of this Section III.A have been met:
|
|
1.
|
the Participant’s employment is involuntarily terminated by the Company without Cause (as defined in Section III.B) or by the Participant with Good Reason (as defined in Section III.C);
|
|
2.
|
the Participant is not entitled to severance benefits in connection with such employment termination under any individual agreement entered into between the Participant and the Company or any other Company severance or change in control plan, program, or policy; and
|
|
3.
|
the Participant timely executes and delivers to the Company a release of claims in a form provided by the Company with the applicable consideration period set forth below and such release becomes irrevocable prior to the 60th day following the Date of Termination (as defined in Section III.D), which release shall not release entitlement to benefits under the terms of the Plan if the Participant is entitled to benefits under such terms. For this purpose, if the Participant is age 40 or older, the period of time that Participant shall have to consider the release to revoke the release after execution shall be as required by the Age Discrimination in Employment Act (ADEA). If the Participant is under age 40, the Participant shall have a reasonable period of time to consider the release, such period to be as determined by the Company. If the Participant fails to execute the release within the applicable time period, the right to receive severance under the Plan shall terminate upon the expiration of the applicable consideration period, unless the Company determines otherwise or unless otherwise required by applicable law.
|
|
B.
|
For purposes of this Plan, “Cause” means conduct by a Participant involving one or more of the following:
|
|
1.
|
the Participant’s willful and continued failure to substantially perform his or her duties other than any such failure resulting from the Participant’s incapacity due to physical or mental illness or injury, provided that the Board or the Chief Executive Officer has provided written notice of termination for Cause to the Participant, and the Participant has not corrected the act or failure to act that constitutes the grounds for Cause as set forth in the Company’s notice of termination within 30 days of the Participant’s receipt of the notice;
|
|
2.
|
the Participant’s conviction of, plea of no contest to, or plea of nolo contendere to, a crime under state or federal law;
|
|
3.
|
the Participant’s willful misconduct which is materially injurious to the Companies, monetarily or otherwise; or
|
|
4.
|
the Participant’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s premises or while performing the Participant’s duties and responsibilities.
|
|
C.
|
For purposes of this Plan, “Good Reason” means one of the occurrence of one of the following events with respect to a Participant:
|
|
1.
|
the assignment to the Participant by the Companies, without the Participant’s express written approval, of duties inconsistent with the Participant’s position, duties, responsibilities, titles, or offices with the Companies, or any removal of the Participant from or any failure to re-elect the Participant to any such positions, other than a failure to re-elect the Participant to the Board of Directors of the Company by the Company’s stockholders;
|
|
2.
|
a material reduction in the Participant’s base salary, other than in connection with an across-the-board, proportional reduction in annual base salary affecting all similarly-situated executives of the Company;
|
|
3.
|
the taking of any action by the Companies which would materially reduce the Participant’s target opportunity under any annual bonus program; a relocation of the Companies’ corporate headquarters to a location more than 50 miles
outside of Folsom, New Jersey, or the Participant’s relocation by the Company to any place more than 50 miles
from the location at which the Participant performed the Participant’s duties, except for required travel by the Participant on the Companies’ business;
|
|
4.
|
a material breach of this Plan by the Companies.
|
|
D.
|
For purposes of this Plan, “Date of Termination” means the date on which the Participant’s employment with the Company ends.
|
IV.
|
Severance Payments
|
|
A.
|
A Participant entitled to benefits under this Plan (and who has complied with Section III.A.3) shall receive the following:
|
|
1.
|
A lump sum cash payment equal to one times the Participant’s annual base salary.
|
|
2.
|
Provided the Participant is eligible for and timely elects COBRA continuation coverage, monthly reimbursement payments of the monthly COBRA premium costs for the Participant and, where applicable, the Participant’s spouse and dependents, for the 12 month period following the Date of Termination (the “Coverage Period”) under the Companies’ group medical plan, as in effect from time to time, less the amount the Participant would have been required to contribute for such coverage if the Participant were an active participant. The COBRA health care continuation coverage period shall run concurrently with the Coverage Period. Notwithstanding the foregoing, the Company reserves the right to restructure the foregoing reimbursement arrangement in any manner reasonably necessary or appropriate to avoid penalties or negative tax consequences to the Participant or the Company, as determined by the Company in its sole and absolute discretion, provided that the restructured arrangement shall be structured in a manner reasonably intended to preserve the foregoing economic benefit to the Participant.
|
|
3.
|
With respect to any outstanding equity awards that vest over time, such awards will automatically accelerate and vest and, to the extent applicable, become exercisable, as of the Date of Termination. With respect to any equity awards that vest based on the attainment of performance goals, such awards will vest and, to the extent applicable, become exercisable subject to and in accordance with the terms of the outstanding equity award agreement evidencing the award and the plan pursuant to which it was granted.
|
|
B.
|
Except as required by Section X.P, the Companies shall pay, or commence paying, the severance payments set forth in Section IV.A.1 and 2 above within 60 days following the Date of Termination, subject to the Participant’s execution and non-revocation of a general release and waiver of claims in a form of agreement prepared by the Companies. Notwithstanding any provision of this Plan to the contrary, in no event shall the timing of the execution of the general release and waiver of claims, directly or indirectly, result in the Participant designating the calendar year of a payment, and if a payment that is subject to execution of the general release and waiver of claims could be made in more than one taxable year, payment shall be made in the later taxable year.
|
|
C.
|
Except as otherwise explicitly provided herein, in an individual agreement or by Company policy, or under the terms of the applicable plan document, all participation by the Participant in Company benefit programs, other than participation in its health, dental and vision, coverage if a COBRA election is timely made, shall end on the Date of Termination. No contribution to the Company’s retirement programs may be made from or with respect to the amounts paid under this Plan.
|
V.
|
Employee Retirement Income Security Act
|
|
A.
|
The “Plan Administrator” shall be one or more individuals appointed by the Company or, if no individual is so appointed, the Company shall be the Plan Administrator and these responsibilities shall be implemented by the Committee. The Plan Administrator shall be the “administrator” within the meaning of Section 3(16) of ERISA and the Named Fiduciary for purposes of Section 402 of ERISA.
|
|
B.
|
The Plan Administrator shall have full power and discretionary authority to administer the Plan in accordance with its terms and subject to the requirements of applicable law. The Plan Administrator shall have the authority and responsibility to: (i) construe the terms of the Plan, including the authority to remedy any omissions, ambiguities, or inconsistencies in the provisions of the Plan; (ii) resolve all questions of fact under the Plan, including, without limitation, questions concerning eligibility, participation, and benefits and all other related or incidental matters; and (iii) establish such procedures for the Plan as it deems advisable, including the establishment of a claims procedure consistent with Section 503 of ERISA. Such claims procedure is set forth on Schedule B hereto.
|
|
C.
|
The Plan Administrator’s decisions and determinations (including determinations of the meaning and reference of terms used in the Plan) shall be conclusive and binding upon all Participants and their beneficiaries, heirs, and assigns, in the absence of clear and convincing evidence that the Plan Administrator acted in a manner that was arbitrary and capricious.
|
VI.
|
No Obligation to Mitigate Damages; No Effect on Other Contractual Rights
|
|
A.
|
A Participant shall not be required to mitigate damages or the amount of any payment provided for under this Plan by seeking other employment or otherwise.
|
|
B.
|
The amount of any payment provided to a Participant under this Plan shall not be reduced by any compensation earned by the Participant as the result of employment by another employer after the Date of Termination.
|
|
C.
|
The provisions of this Plan, and any payment provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish the Participant’s existing rights, or rights which would accrue solely as a result of the passage of time under any plan of benefits provided to officers and managers of the Companies.
|
VII.
|
Confidential Information
|
|
A.
|
Confidential Information
. “Confidential Information” means all information (including, without limitation, all business records and plans, financial statements, customer lists and records, trade secrets, technical information, products, product design information, price structure, costs, software, files, books, logs, charts, studies, reports, surveys, schedules, maps, statistical information, and other proprietary information) which may be furnished, disclosed, or developed to or by a Participant, or which a Participant may discover during the course of the Participant’s employment, which is not generally known outside of SJI, or that the Participant should reasonably believe to be proprietary or non-public information.
|
|
B.
|
Protection of Confidential Information
. Participant understands and acknowledges that the Confidential Information has been developed or obtained by SJI by the investment of significant time, effort, and expense, and that the Confidential Information is a valuable, special, and unique asset of SJI which provides SJI with a significant competitive advantage, and needs to be protected from improper disclosure. In consideration for the disclosure of the Confidential Information, Participant agrees to hold in confidence and to not disclose the Confidential Information to any person or entity without the prior written consent of SJI.
|
|
C.
|
No copying
.
A Participant will not copy or modify any Confidential Information without the prior written consent of SJI with the intent to distribute externally.
|
|
D.
|
Unauthorized Disclosure of Information
.
If it appears that a Participant has disclosed (or has threatened to disclose) Confidential Information in violation of this Plan, SJI shall be entitled to an injunction to restrain the Participant from disclosing, in whole or in part, the Confidential Information. SJI shall not be prohibited by this provision from pursuing other remedies, including a claim for losses and damages.
|
|
E.
|
Return of Confidential Information
. Upon the written request of SJI, a Participant shall return to SJI all written materials containing the Confidential Information. Participant shall also deliver to SJI written statements signed by the Participant certifying that all materials have been returned within five days of receipt of the request.
|
|
F.
|
Limited License to Use
. A Participant shall not acquire any intellectual property rights under this Plan except the limited right to use set out above. Participant acknowledges that, as between SJI and the Participant, the Confidential Information and all related copyrights and other intellectual property rights, are (and at all times will be) the property of SJI, even if suggestions, comments, and/or ideas made by the Participant are incorporated into the Confidential Information or related materials during the period of this Plan.
|
|
G.
|
Confidentiality after Termination of Employment
. The confidentiality provisions of this Plan shall remain in full force and effect during the Participant’s employment and after the termination of a Participant’s employment.
|
VIII.
|
Noncompetition
|
|
A.
|
The Participant acknowledges that, during the course of the Participant’s employment hereunder, the Participant will have access to the Companies’ customer and business prospects, knowledge of and experience in the techniques and methods the Companies used to do business in its industries, and other information and know-how which, even if not directly disclosed to a competitor of the Companies, would give a competitor significant and unfair advantages over the Companies if made available to it through the Participant’s employment.
|
|
B.
|
Employee acknowledges that SJI is engaged in the business of providing services for the acquisition, sale, and transportation of natural gas, electricity, and related products, for wholesale and retail users, and marketing total energy management services and other energy related services, throughout New Jersey, Pennsylvania, New York, and other geographic areas within the United States.
|
|
C.
|
Accordingly, unless the Participant requests in writing and is thereafter authorized in writing to do so by the Companies, the Participant will not, during the term of the Participant’s employment and, in the case of the Participant’s termination from employment for any reason, for a period of one year thereafter (collectively, “the Noncompetition Period”), directly or indirectly own, manage, operate, join, control, or participate in the ownership, management, operation, or control of, or be employed by, any business corporation, proprietorship, partnership, or other entity which competes with or is engaged in any alliance or joint venture with any of the Companies.
|
|
D.
|
The Participant further agrees that, unless he/she requests in writing and is thereafter authorized in writing to do so by the Companies, the Participant will not, during the Noncompetition Period, directly or indirectly on behalf of any entity other than the Companies (i) induce or attempt to induce any employee or independent contractor of the Companies to leave the employ of, or terminate or adversely affect the contractual relationship with, the Companies, (ii) hire or affirmatively seek any business affiliation with any person who was an employee of the Companies within six months after such person ceased to be an employee of the Companies, or (iii) induce or attempt to induce any customer, supplier, licensee, franchisee, or other business relation of the Companies to cease or reduce doing business with the Companies or in any way interfere with the relationship between any such customer, supplier, licensee, or business relation and the Companies (including making any negative statements or communications about the Companies).
|
|
E.
|
The undertakings in this Section VIII shall apply only to those areas where the Companies engage or propose to engage in business or which the Companies, at the termination of the Participant’s employment hereunder have defined as their market territory, but shall not apply if the Company is or the Companies are, and after 30 days’ written notice to the Companies thereof continue to be, in default of its or their obligation to make any of the payments they are then required to make to the Participant under the Plan and the Participant is not in default in the performance of his obligations to the Companies under the Plan.
|
|
F.
|
If the provisions of this Section VIII should ever be adjudicated to exceed the time, geographic, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, or other limitations permitted by the law applicable in that jurisdiction. In addition, the Participant hereby authorizes the Companies to bring the Participant’s obligations hereunder to the attention of, and to provide a copy or description of pertinent Sections of this Plan to, any entity which the Companies believe may offer or has offered employment to the Participant.
|
IX.
|
Papers
|
X.
|
Miscellaneous
|
|
A.
|
Enforcement
. The Participant acknowledges that in the event of his or her breach or threat of breach of Sections VII, VIII, and IX of this Plan, the Companies’ remedies at law will be inadequate and, in such event, the Companies will be entitled to appropriate injunctive and other equitable relief in addition to its legal remedies.
|
|
B.
|
Notices
. All notices and other communications provided for herein that one party intends to give to the other party shall be in writing and shall be considered given when emailed, mailed by certified mail, return receipt requested, or personally delivered, either to the party or at the address set forth below (or to such other address as a party shall designate by notice hereunder):
|
|
C.
|
Amendment and Termination
. This Plan and the benefits described herein or set forth on Schedule A may be amended or terminated by the Committee at any time.
|
|
D.
|
Binding Effect and Non-Assignability
. This Plan shall inure to the benefit of the Participant’s heirs and personal representatives and shall be binding upon the successor of the Companies, including any entity with which the Companies may be merged or consolidated or which may acquire all or substantially all of the assets of the Companies.
|
|
E.
|
Arbitration
. Following a Participant’s exhaustion of the claims procedures set forth in Schedule B, any controversy or claim arising out of or relating to this Plan or the breach thereof shall be settled by arbitration in the County of Atlantic, State of New Jersey, in accordance with the rules then in effect of the American Arbitration Association (“AAA”), and judgment upon the award rendered may be entered in any court having jurisdiction thereof. In any such arbitration each party will choose one arbitrator and those two arbitrators will choose a third. Each party will pay the costs associated with its arbitrator and will divide equally the cost associated with the third arbitrator. The parties will divide equally the costs and fees associated with AAA. Notwithstanding anything to the contrary in this Section X.F, either party may commence in any court having jurisdiction over the parties hereto any action to obtain injunctive relief.
|
|
F.
|
Equitable Relief
. The Companies and the Participant confirm that the restrictions contained in Sections VII, VIII, and IX are, in view of the nature of the business of the Companies, reasonable and necessary to protect the legitimate interests of the Companies, and that any violation of any provision of those Sections will result in irreparable injury to the Companies. The Participant hereby agrees that, in the event of any breach or threatened breach of the terms or conditions of the Plan by the Participant, the Companies’ remedies at law will be inadequate and, in any such event, any of them shall be entitled to commence an action for preliminary and permanent injunctive relief and other equitable relief in any court of competent jurisdiction, notwithstanding any provision hereof relating to arbitration. The Participant further irrevocably consents to the jurisdiction of any state or federal court located in the State of New Jersey over any suit, action, or proceeding arising out of or relating to this Section and hereby waives, to the fullest extent permitted by law, any objection that he may now or hereafter have to such jurisdiction or to the laying of venue of any such suit, action or proceeding brought in such a court and any claim that such suit, action or proceeding has been brought in an inconvenient forum. The Participant agrees that effective service of process may be made upon him by mail under the notice provisions contained in Section X.B. No party hereto shall be required to post a bond prior to the commencement of any suit, action or proceeding relating to this Section.
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G.
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Governing Law
. To the extent not preempted by ERISA, this Plan shall be governed by the laws of the State of New Jersey.
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H.
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Entire Plan
. The terms of this Plan supersede all severance provisions of any agreement executed between each Participant and the Company including, but not limited to, offer letters, individual employment agreements, and any other policy or program of the Company.
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I.
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Waiver
. Any term or provision of this Plan may be waived in writing at any time by the party entitled to the benefit thereof. The failure of either party at any time to require performance of any provision of this Plan which has not been waived in writing shall not affect such party’s rights at a later time to enforce such provision. No consent or wavier by either party to any default or to any breach of a condition or term of this Plan shall be deemed or construed to be a consent or waiver to any other breach or default.
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J.
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Invalidity of Portion of Plan
. If any provision of this Plan or the application thereof to either party shall be invalid or unenforceable to any extent, the remainder of this Plan shall not be affected thereby an shall be enforceable to the fullest extent of the law.
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K.
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Recoupment
. All payments provided under this Plan shall be subject to any recoupment or clawback policies approved by the Board from time to time that allow recoupment of any severance if the Participant engages in activities or takes actions that cause detrimental harm to the Companies or unjustly enrich the Participant.
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L.
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Benefits of the Plan
. This Plan is for the benefit of each of the Companies, and each of them as well as the Companies shall have standing to enforce it as though it is a party hereto. Each reference in this Plan to an obligation by any of the Companies shall be a reference to the obligation of the Company to cause the Companies to perform such obligation. Each undertaking by any of the Companies in this Plan shall be the undertaking of the Company to cause the Companies to perform such undertaking.
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M.
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No Fiduciary or Employment Relationship
. Nothing contained in this Plan and no action taken pursuant to the provisions of this Plan shall create or be construed to create a trust of any kind or fiduciary relationship or contract for employment between the Company and any employee, and nothing in this Plan shall affect the right of the Company to terminate the employment of any employee for any reason whatsoever.
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N.
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Withholding
. All payments under this Plan shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Plan all federal, state, and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation. The Participant shall be solely responsible for all federal, state, and local taxes due with respect to any payment received under this Plan.
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O.
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Compliance with Section 409A of the Internal Revenue Code
.
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1.
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This Plan shall be interpreted to avoid any penalty sanctions under section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (“Section 409A”). If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Section 409A, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. For purposes of Section 409A, all payments to be made upon the Participant’s termination of employment under this Plan may only be made upon the Participant’s “separation from service” within the meaning of such term under Section 409A, each payment made under this Plan shall be treated as a separate payment, and the right to a series of installment payments under this Plan shall be treated as a right to a series of separate payments.
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2.
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All reimbursements and in kind benefits provided under this Plan shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the Participant’s lifetime (or during a shorter period of time specified in this Plan), (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit. If expenses are incurred in connection with litigation, any reimbursements under the Plan shall be paid not later than the end of the calendar year following the year in which the litigation is resolved.
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3.
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Notwithstanding any provision in this Plan to the contrary, if at the time of the Participant’s termination of employment with the Companies, SJI has securities which are publicly-traded on an established securities market and the Participant is a “specified employee” (as such terms is defined in Section 409A) and if it is necessary to postpone the commencement of any payments upon the Participant’s termination of employment to prevent any accelerated or additional tax under Section 409A, then the Companies shall postpone the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Participant) that are not otherwise paid within the short-term deferral and separation pay plan exceptions under Treas. Reg. section 1.409A-1(b)(4) and (9), respectively, until the first payroll date that occurs after the date that is six months following the Participant’s “separation from service” with the Companies. If any payments are postponed due to such requirements, such amounts shall be paid in a lump sum to the Participant, and any installment payments due to the Participant shall recommence, on the first payroll date that occurs after the date that is six months following the Participant’s “separation from service” with the Companies. If the Participant dies during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of Section 409A shall be paid to the personal representative of the Participant’s estate within 60 days after the date of the Participant’s death.
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4.
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Notwithstanding the foregoing, to the extent that the Plan or any payment or benefit hereunder were determined not to comply with Section 409A, then neither the Company, the Committee, the Plan Administrator, nor its or their designees or agents shall be liable to the Participants or any other person for any actions, decisions, or determinations made in good faith.
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Stephen H. Clark
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Jeffrey E. DuBois
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Edward J. Graham
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Gina Merritt-Epps
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Michael J. Renna
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South Jersey Industries, Inc.
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Date:
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February 27, 2015
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By:
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/s/ Edward J. Graham
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Edward J. Graham
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Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K for the period ended
December 31, 2014
, of South Jersey Industries, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15 d-15(f)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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South Jersey Industries, Inc.
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Date:
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February 27, 2015
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By:
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/s/ Stephen H. Clark
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Stephen H. Clark
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Stephen H. Clark
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Name: Stephen H. Clark
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Title: Chief Financial Officer
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February 27, 2015
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