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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, 2018
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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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Commission
File Number
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Exact name of registrant as
specified in its charter and principal
office address and telephone number
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State of
Incorporation
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I.R.S.
Employer
Identification No.
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Name of exchange on which registered
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to Section 12(g) of the Act:
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1-6364
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South Jersey Industries, Inc.
1 South Jersey Plaza
Folsom, NJ 08037
(609) 561-9000
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New Jersey
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22-1901645
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New York Stock Exchange
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Common Stock - $1.25 par value per share
(Title of each class)
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None
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000-22211
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South Jersey Gas Company
1 South Jersey Plaza
Folsom, NJ 08037
(609) 561-9000
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New Jersey
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21-0398330
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N/A
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None
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None
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South Jersey Industries, Inc.:
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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South Jersey Gas Company:
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
x
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Smaller reporting company
o
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Emerging growth 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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South Jersey Industries, Inc.
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South Jersey Gas Company
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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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ABO
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Accumulated Benefit Obligation
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ACB
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ACB Energy Partners, LLC
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ACLE
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AC Landfill Energy, LLC
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Acquisition
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The Company's acquisition of Elizabethtown Gas Company and Elkton Gas Company effective July 1, 2018, from Pivotal Utility Holdings, Inc., a subsidiary of Southern Company Gas
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AFUDC
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Allowance for Funds During Construction
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AIRP
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Accelerated Infrastructure Replacement Program
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AMA
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Asset Management Agreement
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AOCL
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Accumulated Other Comprehensive Loss
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ARO
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Asset Retirement Obligation
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ASC
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Accounting Standards Codification
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ASU
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Accounting Standards Update
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Bcf
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One billion cubic feet
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BCLE
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BC Landfill Energy, LLC
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BGSS
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Basic Gas Supply Service
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BPA
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Bond Purchase Agreement
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BPU
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New Jersey Board of Public Utilities
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CBA
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Collective Bargaining Agreement
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CEGR
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Compounded Earnings Annual Growth Rate
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CIP
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Conservation Incentive Program
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CLEP
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Clean Energy Program
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CODM
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Chief Operating Decision Maker
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Columbia
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Columbia Gas Transmission, LLC
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DCF
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Discounted Cash Flow
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DOJ
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Department of Justice
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Dominion
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Dominion Transmission, Inc.
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DPA
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Deferred Payment Arrangements
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DRP
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Dividend Reinvestment Plan
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dt
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Decatherm
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dts/d
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Decatherms per day
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EEP
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Energy Efficiency Program
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EET
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Energy Efficiency Tracker
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EGR
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Earnings Growth Rate
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ELK
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Elkton Gas Company
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EMI
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Energy & Minerals, Inc.
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EnerConnex
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EnerConnex, LLC
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Energenic
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Energenic US, LLC
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EnergyMark
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EnergyMark, LLC
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EPS
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Earnings Per Share
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ERIP
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Early Retirement Incentive Program
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ERISA
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Employee Retirement Income Security Act of 1974
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ETG
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Elizabethtown Gas Company
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F
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Fahrenheit
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FASB
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Financial Accounting Standards Board
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FERC
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Federal Energy Regulatory Commission
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FSS
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Federal Supply Schedule
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FT
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Firm Transportation
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GAAP
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Generally Accepted Accounting Principles for financial reporting in the United States
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Gulf South
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Gulf South Pipeline
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IAM
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International Association of Machinists and Aerospace Workers
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IBEW
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International Brotherhood of Electrical Workers
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IIP
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Infrastructure Investment Programs
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IIT
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Infrastructure Investment Recovery
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LFGTE
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Landfill Gas-to-Energy
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LIBOR
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London Interbank Offer Rate
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LMP
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Locational Marginal Price
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LNG
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Liquefied Natural Gas
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Marina
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Marina Energy, LLC
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Mcf
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One thousand cubic feet
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MCS
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MCS Energy Partners, LLC
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MDQ
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Maximum Daily Quantities
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MDWQ
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Maximum Daily Withdrawal Quantity
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Midstream
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SJI Midstream, LLC
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Millennium
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Millennium Account Services, LLC
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MPSC
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Maryland Public Service Commission
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MMdts
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One million decatherms
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MMmwh
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One million megawatt hours
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Morie
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The Morie Company, Inc.
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MTM
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Mark-to-market
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MTN
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Medium Term Notes
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MW
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Megawatts
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Mwh
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Megawatt-hours
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National Fuel
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National Fuel Gas Supply Corporation
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NAV
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Net Asset Value
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NBS
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NBS Energy Partners, LLC
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Non-GAAP
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The financial measures that are not prepared in accordance with U.S. GAAP
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NPA
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Note Purchase Agreement
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NJCEP
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New Jersey Clean Energy Program
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NJDEP
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New Jersey Department of Environmental Protection
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NJEDA
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New Jersey Economic Development Authority
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NOL
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Net Operating Loss
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OPEB
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Other Postretirement Benefits
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OSMC
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On-System Margin Sharing Credit
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PennEast
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PennEast Pipeline, LLC
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Potato Creek
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Potato Creek, LLC
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PBO
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Projected Benefit Obligation
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RAC
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Remediation Adjustment Clause
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RAM
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Rate Adjustment Mechanism
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ROE
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Return on Equity
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SAB
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Staff Accounting Bulletin
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Savings Plan
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Employees' Retirement Savings Plan
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SBC
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Societal Benefits Clause
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SBS
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SBS Energy Partners, LLC
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SCLE
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SC Landfill Energy, LLC
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SEC
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Securities and Exchange Commission
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SERP
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Supplemental Executive Retirement Plan
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SHARP
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Storm Hardening and Reliability Program
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SJE
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South Jersey Energy Company
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SJES
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South Jersey Energy Solutions, LLC
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SJESP
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South Jersey Energy Service Plus, LLC
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SJEX
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South Jersey Exploration, LLC
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SJF
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South Jersey Fuel, Inc.
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SJG
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South Jersey Gas Company
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SJI
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South Jersey Industries, Inc., or the Company
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SJIU
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SJI Utilities, Inc.
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SJRG
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South Jersey Resources Group, LLC
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SOA
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Society of Actuaries
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SRECs
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Solar Renewable Energy Credits
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SXLE
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SX Landfill Energy, LLC
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Tax Reform
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Tax Cuts and Jobs Act which was enacted into law on December 22, 2017
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Tennessee
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Tennessee Gas Pipeline Company, L.L.C.
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Tetco
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Texas Eastern Transmission Corp
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TIC
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Transportation Initiation Clause
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Transco
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Transcontinental Gas Pipe Line Company, LLC
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TSA
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Transition Services Agreement
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TSR
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Total Shareholder Return
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USF
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Statewide Universal Service Fund
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Utilities
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Represents SJI's three utility businesses: SJG, ETG, and ELK
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UWUA
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United Workers Union of America
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VIE
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Variable Interest Entities
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WNC
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Weather Normalization Clause
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▪
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SJIU is a holding company that owns SJG, and as of July 1, 2018, ETG and ELK (see "Acquisition" below).
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*
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SJG is a regulated natural gas utility which distributes natural gas in the
seven
southernmost counties of New Jersey.
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*
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ETG is a regulated natural gas utility which distributes natural gas in seven counties in northern and central New Jersey.
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*
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ELK is a regulated natural gas utility which distributes natural gas in northern Maryland.
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•
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SJE acquires and markets electricity to retail end users. SJE previously acquired and marketed natural gas and provided total energy management services to commercial, industrial and residential customers. In November 2018, the Company sold SJE's retail gas businesses.
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•
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SJRG markets natural gas storage, commodity and transportation assets along with fuel management services on a wholesale basis in the mid-Atlantic, Appalachian and southern states.
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SJEX owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania.
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Marina develops and operates on-site energy-related projects. The significant wholly-owned subsidiaries of Marina include:
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ACB, which owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey.
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ACLE, BCLE, SCLE and SXLE, which owns and operates landfill gas-to-energy production facilities in Atlantic, Burlington, Salem and Sussex Counties in New Jersey.
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MCS, NBS and SBS, which owned and operated solar-generation sites located in New Jersey. These entities were sold in October 2018.
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SJESP
receives commissions on service contracts from a third party.
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•
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Midstream invests in infrastructure and other midstream projects, including a current project to build an approximately
118
-mile natural gas pipeline in Pennsylvania and New Jersey.
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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, including those of SJG, are concentrated in New Jersey.
Changes in the economies of New Jersey and surrounding regions could negatively impact the growth opportunities available to SJI and SJG, and the financial condition of the customers and prospects of SJI and SJG.
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•
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Changes in the regulatory environment or unfavorable rate regulation at the Utilities may have an unfavorable impact on financial performance or condition.
SJG and ETG are regulated by the BPU, and ELK is regulated by the MPSC. These regulatory commissions have authority over many of the activities of the utility business including, but not limited to, the rates the Utilities 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 the Utilities' ability to earn a reasonable rate of return on invested capital and/or fully recover operating costs may adversely affect SJI's and SJG's results of operations, financial condition and cash flows.
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•
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SJI and SJG may not be able to respond effectively to competition, which may negatively impact their 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 and SJG's energy products and services.
SJG currently has a conservation incentive program clause that protects its revenues and gross margin against usage that is lower than a set level. ETG has a weather normalization clause which allows ETG to implement surcharges or credits during the months of October through May to compensate for weather-related changes in customer usage from the previous winter period. Should these clauses be terminated without replacement, lower customer energy utilization levels would likely reduce SJI's and SJG's net income. Further, during periods of warmer temperatures, demand and volatility in the natural gas market could decrease, which would negatively impact their financial results.
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•
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High natural gas prices could cause more receivables to be uncollectible.
Higher levels of uncollectibles from either residential or commercial customers would negatively impact net income and could result in higher working capital requirements.
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•
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SJI's and SJG's net income could decrease if it is required to incur additional costs to comply with new governmental safety, health or environmental legislation.
SJI and SJG are 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 and SJG's financial performance and condition.
Climate change is receiving ever increasing attention from both scientists and legislators. 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 and SJG.
Several of SJI's subsidiaries, including SJG, 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, long-term debt of SJI and SJG 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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The inability to obtain capital, particularly short-term capital from commercial banks, could negatively impact the daily operations and financial performance of SJI and SJG.
SJI and SJG use short-term borrowings under committed 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 also 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 their 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 our 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 and SJG.
Several of SJI's subsidiaries, including SJG, have businesses based upon the ability to deliver natural gas or electricity to customers. Disruption in the production or transportation to SJI or SJG from its suppliers could prevent SJI or SJG 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 and SJG'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 and SJG maintain insurance against some, but not all, of these risks and losses. The occurrence of any of these events, even if fully covered by insurance, could adversely affect SJI's or SJG'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 or SJG.
The outcomes of legal
proceedings can be unpredictable and can result in adverse judgments.
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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.
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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SJI's and SJG's business could be adversely impacted by strikes or work stoppages by its unionized employees
. The gas utility operations of SJG and ETG are dependent upon employees represented by unions and covered under collective bargaining agreements. A work stoppage could negatively impact operations, which could impact financial results as well as customer relationships.
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•
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The risk of terrorism may adversely affect the economy as well as SJI's and SJG's business.
An act of terror could result in disruptions of natural gas supplies and cause instability in the financial and capital markets. This could adversely impact SJI's or SJG's ability to deliver products or raise capital and could adversely impact its results of operations.
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•
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Failure to obtain proper approvals and property rights in the PennEast pipeline could hinder SJI's equity investment in the project.
Construction, development and operation of energy investments, specifically the PennEast pipeline, are subject to federal and state regulatory oversight and require certain property rights from public and private property owners, as well as regulatory approvals, including environmental and other permits and licenses. SJI, as well as our joint venture partners in the PennEast pipeline, may be unable to obtain all such needed property rights, permits and licenses to successfully construct and develop the pipeline, and failing to do so could cause SJI's equity investment in the project to become impaired. Such impairment could have a materially adverse effect on SJI's financial condition and results of operations.
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•
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Our business could be harmed by cybersecurity threats and related disruptions.
We rely extensively on information technology systems to process transactions, transmit and store information and manage our business. Disruption or failure of our information technology systems could shut down our facilities or otherwise harm our ability to safely deliver natural gas to our customers, serve our customers effectively, manage our assets, or otherwise materially disrupt our business. Cyber threats are constantly evolving, increasing the difficulty of detecting and successfully defending against them. SJI and SJG have experienced such attacks in the past; however, based on information currently available to SJI and SJG, none have had a material impact on our business, financial condition, results of operations or cash flows. In response, we have invested in expanded cybersecurity systems and procedures designed to safeguard the continuous and uninterrupted performance of our information technology systems and protect against unauthorized access. However, all information technology systems are potentially vulnerable to security threats, including hacking, viruses, other malicious software, and other unlawful attempts to disrupt or gain access to such systems. There is no guarantee that our cybersecurity systems and procedures will prevent or detect the unauthorized access by experienced computer programmers, hackers or others. An attack on or failure of our information technology systems could result in the unauthorized disclosure, theft, misuse or destruction of customer or employee data or business or confidential information, or disrupt the performance of our information technology systems. These events could expose us to potential liability, litigation, governmental inquiries, investigations or regulatory actions, harm our brand and reputation, diminish customer confidence, disrupt operations, and subject us to payment of fines or other penalties, legal claims by our clients and significant remediation costs.
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•
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Tax law or regulation changes may negatively impact financial performance.
SJI and SJG are subject to taxation by various taxing authorities at the federal, state and local levels. Any future changes in tax laws or regulations, including Tax Reform, or interpretation of such laws or regulations, could have a materially adverse effect on SJI's and SJG's financial condition and results of operations.
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•
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The loss of long-tenured employees could negatively impact the daily operations and financial performance of SJI and SJG.
In October 2018, the Company announced it will offer an ERIP for eligible non-union employees and officers. Several employees have accepted the ERIP and will be retiring from the Company within 6 to 12 months. The departure of these individuals, who have varying roles and corresponding oversight responsibilities for SJI and SJG, could adversely impact SJI's and SJG's results of operations.
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•
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Our stated long-term goals are based on various assumptions and beliefs that may not prove to be accurate, and we may not achieve our stated long-term goals by 2020 or at all.
SJI's current long-term goals are to grow Economic Earnings Per Share 6-8% annually while maintaining high quality earnings, a strong balance sheet and a low-to-moderate risk profile. Management established those goals in conjunction with our board of directors based upon a number of different internal and external factors that characterize and influence our current and expected future activities. For example, these long-term goals are based on certain assumptions regarding our participation in a current project to build an approximately 118-mile natural gas pipeline in Pennsylvania and New Jersey. However, construction on this project is not expected to begin until 2019 and is estimated to be completed in late 2020, but may be subject to delay. As a result, no assurance can be given that this project will be completed on time or at all. Also, as noted below, the Acquisition involves risks associated with acquisitions and integrating acquired assets, including the potential exposure to significant liabilities, and the intended benefits of the Acquisition may not be realized. Further, the economy could cause increased customer delinquencies or otherwise negatively affect achievement of our long-term earnings goals. Changes in the New Jersey State administration could lead to unfavorable state and local regulatory changes that could delay approvals, require environmental remediation or capital or other expenditures or otherwise adversely affect our results of operations, financial condition or cash flows. Other factors, assumptions and beliefs of management and our board of directors on which our long-term goals were based may also prove to differ materially from actual future results. Accordingly, we may not achieve our stated long-term goals by 2020 or at all, or our stated long-term goals may be negatively revised as a result of less than expected progress toward achieving these goals, and you are therefore cautioned not to place undue reliance on these goals.
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•
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The Acquisition involves risks associated with acquisitions and integrating acquired assets, including the potential exposure to significant liabilities. The Acquisition may not achieve its intended results and benefits, including anticipated investment opportunities and earnings growth.
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•
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our senior management's attention may be diverted from the management of daily operations to the integration of the Acquisition;
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•
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we could incur significant unknown and contingent liabilities for which we have limited or no contractual remedies or insurance coverage;
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•
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the assets to be acquired may not perform as well as we anticipate; and
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•
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unexpected costs, delays and challenges may arise in integrating the assets acquired in the Acquisition into our existing operations.
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•
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We issued additional securities to provide permanent financing for the Acquisition, and, as a result, we are subject to market risks including market demand for our debt and equity securities. We are also seeking to consummate certain asset sales.
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•
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make it more difficult for us to repay or refinance our debts as they become due during adverse economic and industry conditions;
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•
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limit our flexibility to pursue other strategic opportunities or react to changes in our business and the industries in which we operate and, consequently, place us at a competitive disadvantage to competitors with less debt;
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•
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require an increased portion of our cash flows from operations to be used for debt service payments, thereby reducing the availability of cash flows to fund working capital, capital expenditures, dividend payments and other general corporate purposes;
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•
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result in a downgrade in the credit rating of our indebtedness, which could limit our ability to borrow additional funds or increase the interest rates applicable to our indebtedness;
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•
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result in higher interest expense in the event of increases in market interest rates for both long-term debt as well as short-term commercial paper, bank loans or borrowings under our lines of credit at variable rates;
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•
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reduce the amount of credit available to support hedging activities; and
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•
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require that additional terms, conditions or covenants be placed on us.
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•
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be dilutive to our existing shareholders and earnings per share;
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•
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impact our capital structure and cost of the capital;
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•
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be adversely impacted by movements in the overall equity markets or the utility or natural gas utility industry sectors of that market, which could impact the offering price of our new equity or necessitate the use of other equity or equity-like instruments such as preferred stock, convertible preferred shares, or convertible debt; and
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•
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impact our ability to make our current and future dividend payments
.
|
•
|
The Company may not be able to obtain refinancings of short-term debt, causing the ability to pay such debt at maturity to be at risk.
As a result of the Acquisition, the Company has $733.9 million of debt coming due within the next twelve months. The plan is to obtain refinancings for most of this debt, with the remainder being paid off through various transactions including the expected sale of non-core assets as noted below. The Company can offer no assurances that these refinancings or sales will be successful.
|
•
|
The agreements to sell certain non-core assets of the Company may not be consummated.
An agreement to sell solar assets has been entered into with a third party, with actual sales occurring on a rolling basis as the conditions precedent to the closing of each solar project, including certain regulatory filings and receipt of consents to assignment of project contracts and permits, are satisfied. While certain consents have been received and the sale of certain projects has consummated, we cannot guarantee that all approvals and consents will occur.
|
Name, age and position with the Company
|
|
Period Served
|
|
|
|
Michael J. Renna
, Age 51
|
|
|
Chief Executive Officer
|
|
April 2015 - Present
|
Director
|
|
January 2014 - Present
|
President
|
|
January 2014 - Present
|
Chief Operating Officer
|
|
January 2014 - April 2015
|
Senior Vice President
|
|
January 2013 - January 2014
|
|
|
|
Cielo Hernandez
, Age 43
|
|
|
Chief Financial Officer
|
|
January 2019 - Present
|
Senior Vice President
|
|
January 2019 - Present
|
VP and Chief Financial Officer North America and Canada Region, Maersk Line
|
|
February 2015 - December 2018
|
VP & CFO Latin America Region, APM Terminals
|
|
November 2013 - January 2015
|
|
|
|
Stephen H. Clark
, Age 60
|
|
|
President, SJES
|
|
August 2018 - Present
|
Chief Operating Officer, SJES
|
|
August 2018 - Present
|
Executive Vice President
|
|
January 2017 - Present
|
Senior Vice President
|
|
April 2015 - December 2016
|
Chief Financial Officer
|
|
November 2013 - August 2018
|
Treasurer
|
|
January 2004 - April 2014
|
|
|
|
Kenneth A. Lynch
, Age 53
|
|
|
Chief Accounting & Risk Officer
|
|
August 2018 - Present
|
Chief Risk Officer
|
|
January 2017 - Present
|
Senior Vice President
|
|
April 2015 - Present
|
Chief Accounting Officer
|
|
January 2013 - December 2016
|
|
|
|
Kathleen A. McEndy
, Age 65
|
|
|
Chief Administrative Officer
|
|
June 2015 - Present
|
Senior Vice President
|
|
April 2015 - Present
|
Chief Human Resources Officer
|
|
March 2013 - June 2015
|
Vice President
|
|
March 2013 - April 2015
|
|
|
|
David Robbins, Jr.
, Age 56
|
|
|
President, SJIU
|
|
August 2018 - Present
|
President, SJG
|
|
January 2017 - August 2018
|
Senior Vice President
|
|
April 2015 - Present
|
Vice President
|
|
April 2014 - April 2015
|
Senior Vice President, SJES
|
|
January 2013 - December 2016
|
Chief Operating Officer, SJES
|
|
January 2013 - April 2014
|
|
|
|
Steven R. Cocchi
, Age 41
|
|
|
Chief Strategy and Development Officer
|
|
January 2018 - Present
|
Interim General Counsel
|
|
August 2017 - December 2017
|
Senior Vice President, Strategy and Growth
|
|
April 2017 - Present
|
Vice President, Strategy and Growth
|
|
January 2017 - April 2017
|
Vice President, Rates and Regulatory Affairs
|
|
April 2015 - January 2017
|
Director, Rates and Revenue Requirements
|
|
October 2011 - April 2015
|
|
|
|
Melissa Orsen,
Age 43
|
|
|
Senior Vice President & General Counsel
|
|
January 2018 - Present
|
Chief Executive Officer, New Jersey Economic Development Authority
|
|
March 2015 - December 2017
|
Deputy Commissioner, New Jersey Department of Community Affairs
|
|
March 2014 - March 2015
|
Chief of Staff & Lieutenant Governor, Office of the New Jersey Governor
|
|
January 2011 - March 2014
|
•
|
$100 invested on December 31, 2013 in South Jersey Industries, Inc. common stock, in the S&P 500 Stock Index and in the S&P Utility Index; and
|
•
|
All dividends are reinvested.
|
|
Dec-13
|
Dec-14
|
Dec-15
|
Dec-16
|
Dec-17
|
Dec-18
|
||||||||||||
S&P 500
|
100
|
|
$
|
114
|
|
$
|
115
|
|
$
|
129
|
|
$
|
157
|
|
$
|
150
|
|
|
S&P Utilities
|
$
|
100
|
|
$
|
129
|
|
$
|
123
|
|
$
|
143
|
|
$
|
160
|
|
$
|
167
|
|
SJI
|
$
|
100
|
|
$
|
109
|
|
$
|
91
|
|
$
|
134
|
|
$
|
128
|
|
$
|
119
|
|
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
|
|
|
|
|
|
||||||||||
Operating Results:
|
|
|
|
|
|
||||||||||
Operating Revenues
|
$
|
1,641,338
|
|
$
|
1,243,068
|
|
$
|
1,036,500
|
|
$
|
959,568
|
|
$
|
886,996
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income (Loss) from Continuing Operations
|
$
|
17,903
|
|
$
|
(3,404
|
)
|
$
|
119,061
|
|
$
|
105,610
|
|
$
|
97,628
|
|
Discontinued Operations - Net (1)
|
(240
|
)
|
(86
|
)
|
(251
|
)
|
(503
|
)
|
(582
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Net Income (Loss)
|
$
|
17,663
|
|
$
|
(3,490
|
)
|
$
|
118,810
|
|
$
|
105,107
|
|
$
|
97,046
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Assets
|
$
|
5,956,577
|
|
$
|
3,865,086
|
|
$
|
3,730,567
|
|
$
|
3,480,900
|
|
$
|
3,349,425
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capitalization:
|
|
|
|
|
|
|
|
|
|
||||||
Equity
|
$
|
1,267,022
|
|
$
|
1,192,409
|
|
$
|
1,289,240
|
|
$
|
1,037,539
|
|
$
|
932,432
|
|
Long-Term Debt
|
2,106,863
|
|
1,122,999
|
|
808,005
|
|
1,006,394
|
|
859,491
|
|
|||||
|
|
|
|
|
|
|
|
|
|
Total Capitalization
|
$
|
3,373,885
|
|
$
|
2,315,408
|
|
$
|
2,097,245
|
|
$
|
2,043,933
|
|
$
|
1,791,923
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ratio of Earnings to Fixed Charges (2)
|
1.2x
|
|
0.5x
|
|
5.4
|
x
|
3.8x
|
|
3.8x
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Diluted Earnings (Loss) Per Common Share (Based on Average Diluted Shares Outstanding) (3):
|
|
|
|
|
|
||||||||||
Continuing Operations
|
$
|
0.21
|
|
$
|
(0.04
|
)
|
$
|
1.56
|
|
$
|
1.53
|
|
$
|
1.47
|
|
Discontinued Operations - Net (1)
|
—
|
|
—
|
|
—
|
|
(0.01
|
)
|
(0.01
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Diluted Earnings (Loss) Per Common Share (3)
|
$
|
0.21
|
|
$
|
(0.04
|
)
|
$
|
1.56
|
|
$
|
1.52
|
|
$
|
1.46
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Return (Loss) on Average Equity (4)
|
1.5
|
%
|
(0.3
|
)%
|
10.2
|
%
|
10.7
|
%
|
11.1
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Share Data:
|
|
|
|
|
|
|
|
|
|
||||||
Number of Shareholders of Record
|
6.3
|
|
6.5
|
|
6.7
|
|
6.7
|
|
6.9
|
|
|||||
Average Common Shares (3)
|
83,693
|
|
79,541
|
|
76,362
|
|
68,735
|
|
66,278
|
|
|||||
Common Shares Outstanding at Year End (3)
|
85,506
|
|
79,549
|
|
79,478
|
|
70,966
|
|
68,334
|
|
|||||
Dividend Reinvestment Plan:
|
|
|
|
|
|
|
|
|
|
||||||
Number of Shareholders
|
4.8
|
|
5.0
|
|
5.2
|
|
5.2
|
|
5.2
|
|
|||||
Number of Participating Shares (3)
|
3,317
|
|
3,607
|
|
3,627
|
|
4,170
|
|
4,082
|
|
|||||
Book Value at Year End (3)
|
$
|
14.82
|
|
$
|
14.99
|
|
$
|
16.22
|
|
$
|
14.62
|
|
$
|
13.65
|
|
Dividends Declared per Common Share (3)
|
$
|
1.13
|
|
$
|
1.10
|
|
$
|
1.07
|
|
$
|
1.02
|
|
$
|
0.96
|
|
Market Price at Year End (3)
|
$
|
27.80
|
|
$
|
31.23
|
|
$
|
33.69
|
|
$
|
23.52
|
|
$
|
29.46
|
|
Market-to-Book Ratio (3)
|
1.9
|
x
|
2.1
|
x
|
2.1
|
x
|
1.6x
|
|
2.2x
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||
Consolidated Economic Earnings (5)
|
|
|
|
|
|
|
|
|
|
||||||
Income (Loss) from Continuing Operations
|
$
|
17,903
|
|
$
|
(3,404
|
)
|
$
|
119,061
|
|
$
|
105,610
|
|
$
|
97,628
|
|
Minus/Plus:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized Mark-to-Market Losses/(Gains) on Derivatives and Realized Losses/(Gains) on Inventory Injection Hedges (6)
|
(35,846
|
)
|
14,558
|
|
(26,867
|
)
|
(8,355
|
)
|
8,211
|
|
|||||
Net Loss from Affiliated Companies (6,7)
|
—
|
|
—
|
|
—
|
|
(2,540
|
)
|
2,540
|
|
|||||
Loss on Property, Plant and Equipment (8)
|
105,280
|
|
91,299
|
|
—
|
|
—
|
|
—
|
|
|||||
Net Losses from Legal Proceedings (9)
|
5,910
|
|
56,075
|
|
—
|
|
—
|
|
—
|
|
|||||
Acquisition/Sale Costs (10)
|
34,674
|
|
19,564
|
|
—
|
|
—
|
|
—
|
|
|||||
Customer Credits (11)
|
15,333
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
ERIP (12)
|
6,733
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Other (6,13)
|
—
|
|
2,227
|
|
(165
|
)
|
(165
|
)
|
(165
|
)
|
|||||
Income Taxes (14)
|
(33,753
|
)
|
(70,834
|
)
|
10,813
|
|
4,424
|
|
(4,235
|
)
|
|||||
Additional Tax Adjustments (15)
|
—
|
|
(11,420
|
)
|
—
|
|
—
|
|
—
|
|
|||||
Economic Earnings
|
$
|
116,234
|
|
$
|
98,065
|
|
$
|
102,842
|
|
$
|
98,974
|
|
$
|
103,979
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Earnings (Loss) per Share from Continuing Operations (3)
|
$
|
0.21
|
|
$
|
(0.04
|
)
|
$
|
1.56
|
|
$
|
1.53
|
|
$
|
1.47
|
|
Minus/Plus:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized Mark-to-Market Losses/(Gains) on Derivatives and Realized Losses/(Gains) on Inventory Injection Hedges (6)
|
(0.42
|
)
|
0.18
|
|
(0.35
|
)
|
(0.12
|
)
|
0.12
|
|
|||||
Net Loss from Affiliated Companies (6,7)
|
—
|
|
—
|
|
—
|
|
(0.04
|
)
|
0.04
|
|
|||||
Loss on Property, Plant and Equipment (8)
|
1.24
|
|
1.14
|
|
—
|
|
—
|
|
—
|
|
Net Losses from Legal Proceedings (9)
|
0.07
|
|
0.70
|
|
—
|
|
—
|
|
—
|
|
|||||
Acquisition/Sale Costs (10)
|
0.41
|
|
0.25
|
|
—
|
|
—
|
|
—
|
|
|||||
Customer Credits (11)
|
0.18
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
ERIP (12)
|
0.08
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Other (6,13)
|
—
|
|
0.03
|
|
—
|
|
—
|
|
—
|
|
|||||
Income Taxes (14)
|
(0.39
|
)
|
(0.89
|
)
|
0.13
|
|
0.07
|
|
(0.06
|
)
|
|||||
Additional Tax Adjustments (15)
|
—
|
|
(0.14
|
)
|
—
|
|
—
|
|
—
|
|
|||||
Economic Earnings per Share (3,5)
|
$
|
1.38
|
|
$
|
1.23
|
|
$
|
1.34
|
|
$
|
1.44
|
|
$
|
1.57
|
|
(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 the consolidated financial statements).
|
(2)
|
Calculated as Income (Loss) from Continuing Operations before Income Taxes and Interest Expense divided by Total Fixed Charges, which consists of Interest Expense and Capitalized Interest.
|
(3)
|
All share and per share amounts were adjusted for all periods presented for the 2-for-1 stock split, effected in the form of a stock dividend, effective on May 8, 2015.
|
(4)
|
Calculated based on Income from Continuing Operations.
|
(5)
|
This section includes the 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 and a reconciliation of income from Continuing Operations and earnings per share to Economic Earnings and Economic Earnings per share, respectively.
|
(6)
|
Certain reclassifications have been made to the prior period numbers in these tables to conform to the current period presentation. The 2014-2015 numbers in these line items have been adjusted to be presented before income taxes.
|
(7)
|
Resulting from a reserve for uncollectible accounts recorded by an Energenic subsidiary that owned and operated a central energy center and energy distribution system for a hotel, casino and entertainment complex in Atlantic City, New Jersey . In 2014, this charge was excluded from Economic Earnings as the total economic impact of the proceedings had not been realized. During the second quarter 2015, the Company, through its investment in Energenic, reduced the carrying value of the investment in this project. As such, this charge is included in Economic Earnings in 2015.
|
(8)
|
Represents impairment charges taken in 2018 on solar generating facilities (which was primarily driven by the purchase price in the agreement to sell solar assets being less than the carrying amount of the assets) along with LFGTE assets (which was primarily driven by the remaining carrying value of these assets no longer being recoverable. Also represents impairment charges taken in 2017 on solar generating facilities, LFGTE long-lived assets, LFGTE assets customer relationships, and goodwill.
|
(9)
|
Represents net losses from three separate legal proceedings: (a) charges in 2017 and 2018, including interest, legal fees and the realized difference in the market value of the commodity (including financial hedges) resulting from a ruling in a legal proceeding related to a pricing dispute between SJI and a gas supplier that began in October 2014; (b) a charge in 2017, including legal fees, resulting from a settlement with a counterparty over a dispute related to a three-year capacity management contract; and (c) a gain taken in 2017 resulting from a favorable FERC decision, including interest, over a tariff rate dispute with a counterparty, whereby SJI contended that the counterparty was overcharging for storage demand charges over a ten-year period.
|
(10)
|
Represents costs incurred on the agreement to acquire the assets of ETG and ELK, including legal, consulting and other professional fees. Also included here are costs incurred on the sale of solar and SJE assets, partially offset by gains recorded on the sale of solar assets.
|
(11)
|
Represents credits to ETG and ELK customers that were required as part of the Acquisition.
|
(12
|
Represents costs incurred on the Company's ERIP as well as the benefit of amending the Company's OPEB.
|
(13)
|
Included in this amount are amendments made to an existing interest rate derivative linked to unrealized losses previously recorded in AOCL. SJI reclassified this amount from AOCL to Interest Charges on the consolidated statements of income as a result of the prior hedged transactions being deemed probable of not occurring. Since the economic impact will not be realized until future periods, this amount is excluded from Economic Earnings. Also included is additional depreciation expense within Economic Earnings on a solar generating facility where an impairment charge was recorded in the past, which reduced the depreciable basis and recurring depreciation expense, and the related reduction in depreciation expense was added back in prior years.
|
(14)
|
Determined using a combined average statutory tax rate of approximately 25% for 2018, 39% for 2017 and 40% for 2016, 2015 and 2014.
|
(15)
|
Represents one-time tax adjustments, most notably for Tax Reform.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Operating Revenues
|
$
|
548,000
|
|
|
$
|
517,254
|
|
|
$
|
461,055
|
|
|
$
|
534,290
|
|
|
$
|
501,875
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income
|
$
|
82,949
|
|
|
$
|
72,557
|
|
|
$
|
69,045
|
|
|
$
|
66,578
|
|
|
$
|
66,483
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Shares of Common Stock Outstanding
|
2,339
|
|
|
2,339
|
|
|
2,339
|
|
|
2,339
|
|
|
2,339
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges (1)
|
4.5x
|
|
|
5.4x
|
|
|
5.5x
|
|
|
5.4x
|
|
|
5.4x
|
|
|
As of December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Property, Plant and Equipment, Net
|
$
|
2,383,459
|
|
|
$
|
2,154,083
|
|
|
$
|
1,952,912
|
|
|
$
|
1,770,766
|
|
|
$
|
1,589,369
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Assets
|
$
|
3,118,236
|
|
|
$
|
2,865,974
|
|
|
$
|
2,551,923
|
|
|
$
|
2,288,204
|
|
|
$
|
2,185,672
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalization:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common Equity
|
$
|
1,008,022
|
|
|
$
|
921,433
|
|
|
$
|
839,900
|
|
|
$
|
707,927
|
|
|
$
|
680,568
|
|
Long-Term Debt
|
874,507
|
|
|
758,052
|
|
|
423,177
|
|
|
584,082
|
|
|
507,091
|
|
|||||
Total Capitalization
|
$
|
1,882,529
|
|
|
$
|
1,679,485
|
|
|
$
|
1,263,077
|
|
|
$
|
1,292,009
|
|
|
$
|
1,187,659
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Customers
|
391,092
|
|
|
383,633
|
|
|
377,625
|
|
|
373,100
|
|
|
366,854
|
|
•
|
SJI - This section describes the financial condition and results of operations of SJI and its subsidiaries on a consolidated basis. It includes discussions of our regulated operations, including SJG, and our non-regulated operations.
|
•
|
SJG - This section describes the financial condition and results of operations of SJG, a subsidiary of SJI and separate registrant, which comprises the SJG utility operations segment.
|
|
2018
|
2017
|
2016
|
||||||
Net Income Impact:
|
|
|
|
||||||
CIP - Weather Related
|
$
|
(16.5
|
)
|
$
|
8.7
|
|
$
|
5.9
|
|
CIP - Usage Related
|
7.5
|
|
3.3
|
|
4.0
|
|
|||
Total Net Income Impact
|
$
|
(9.0
|
)
|
$
|
12.0
|
|
$
|
9.9
|
|
|
|
|
|
||||||
Weather Compared to 20-Year Average
|
183.0% colder
|
11.5% warmer
|
8.1% warmer
|
||||||
Weather Compared to Prior Year
|
7.7% colder
|
0.4% warmer
|
2.5% warmer
|
•
|
SJG utility operations consist primarily of natural gas distribution to residential, commercial and industrial customers in southern New Jersey.
|
•
|
ETG utility operations consist primarily of natural gas distribution to residential, commercial and industrial customers in northern and central New Jersey.
|
•
|
ELK utility operations consist of natural gas distribution to residential, commercial and industrial customers in Maryland.
|
•
|
Wholesale energy operations include the activities of SJRG and SJEX.
|
•
|
Retail gas and other operations at SJE included natural gas acquisition and transportation service business lines. This business was sold on November 30, 2018
(see Note 1 to the consolidated financial statements).
|
•
|
Retail electric operations at SJE consist of electricity acquisition and transportation to commercial, industrial and residential customers.
|
•
|
On-site energy production consists of Marina's thermal energy facility and other energy-related projects. Also included in this segment are the activities of ACB, ACLE, BCLE, SCLE, SXLE, along with MCS, NBS and SBS, which were sold in October 2018
(see Note 1 to the consolidated financial statements).
|
•
|
Appliance service operations includes SJESP, which
receives commissions on service contracts from a third party.
|
•
|
Midstream was formed to invest in infrastructure and other midstream projects, including a current project to build a natural gas pipeline in Pennsylvania and New Jersey.
|
•
|
Corporate & Services segment includes costs related to the Acquisition, along with other unallocated costs.
|
•
|
Intersegment represents intercompany transactions between the above SJI consolidated entities.
|
•
|
The net income contribution from the wholesale energy operations at SJRG increased $89.7 million to $66.2 million. The significant drivers for the overall change were as follows:
|
◦
|
$37.5 million increase due to 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. This change was also impacted by Tax Reform.
|
◦
|
$28.9 million increase due to lower legal fees, reserves and interest recorded on a pricing dispute between SJI and a gas supplier as compared with the same period in 2017 (see Note 15 to the consolidated financial statements), along with two other settled cases (see 2017 vs. 2016 discussion below).
|
◦
|
The remaining increase is primarily due to higher margins on daily energy trading activities and an overall increase in sales due to cold weather experienced in the first quarter of 2018, as discussed under "Gross Margin - Energy Group" below. Also contributing was the impact of Tax Reform.
|
•
|
The net income contribution from the gas utility operations at SJG increased $10.3 million to $82.9 million, primarily due to the base rate case settlement, the roll-in of investments for infrastructure replacement and improvement, along with customer growth, partially offset with an overall increase in depreciation, interest and operations expenses.
|
•
|
SJI recorded $30.4 million (after-tax) of additional financing costs and other charges compared to 2017 in connection with the Acquisition (see Note 14 and 20 to the consolidated financial statements). These costs are recorded in the Corporate & Services segment.
|
•
|
The net income contribution from on-site energy production at Marina decreased $17.5 million to a net loss of $78.0 million, primarily due to $78.7 million (after-tax) of impairment charges taken on solar generating facilities and LFGTE assets in 2018, which were driven by the purchase price in the agreement to sell solar assets being less than the carrying amount of the assets, along with the carrying value of LFGTE assets no longer being recoverable. Also contributing were consulting and legal costs incurred as a result of the agreement to sell solar assets. This was partially offset by $56.1 million (after-tax) of impairment charges recorded in 2017, along with gains recorded on the sale of solar assets (see Note 1 to the consolidated financial statements).
|
•
|
SJI recorded $13.5 million of one-time tax gains in 2017 related to the enactment of Tax Reform. See Note 4 to the consolidated financial statements.
|
•
|
SJI recorded $5.0 million (after-tax) related to the implementation of the ERIP as well as amendments made to the OPEB (see Notes 1 and 12 to the consolidated financial statements).
|
•
|
The net income contribution from the retail gas and electric operations at SJE decreased $7.3 million to a net loss of $6.0 million primarily due to the change in unrealized gains and losses on forward financial contracts used to mitigate price risk on retail gas as discussed under "Operating Revenues – Energy Group" below, along with a loss recorded on the sale of the SJE retail gas operations (see Note 1 to the consolidated financial statements).
|
•
|
In connection with the Acquisition (see Note 20 to the consolidated financial statements), SJI consolidated the accounts of ETG and ELK gas utility operations beginning with the third quarter of 2018. This contributed a net loss of $5.2 million in 2018, which included approximately $11.1 million (after-tax) of credits provided to customers of ETG and ELK (see Note 10 to the consolidated financial statements).
|
•
|
The net income contribution from on-site energy production at Marina decreased $76.5 million to a net loss of $60.5 million, primarily due to the following:
|
◦
|
$56.1 million decrease
due to several impairment charges recorded during the year, including impairments on solar generating facilities, LFGTE long-lived assets, LFGTE assets customer relationships, and goodwill (see Note 1 to the consolidated financial statements).
|
◦
|
$9.1 million of investment tax credits on renewable energy facilities recorded in 2016, compared with none recorded in 2017, which is consistent with SJI's previously announced strategy of substantially reducing solar development.
|
◦
|
$4.5 million decrease related to gains on two settlements recorded at Marina in 2016 that did not recur in 2017 (see Note 7 to the consolidated financial statements).
|
◦
|
$1.7 million decrease related to the change in unrealized gains and losses on interest rate derivative contracts (see Note 16 to the consolidated financial statements).
|
◦
|
The remaining decrease is primarily due to an overall increase in operating and interest expenses.
|
•
|
The net income contribution from the wholesale energy operations at SJRG decreased $49.5 million to a net loss of $23.5 million, primarily due to the following:
|
◦
|
$32.6 million decrease resulting from an unfavorable court ruling related to a pricing dispute between SJRG and a supplier, including interest (see Note 15 to the consolidated financial statements)
|
◦
|
$20.6 million decrease 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.
|
◦
|
$5.8 million decrease resulting from a settlement of a legal dispute related to a three-year capacity management contract with a counterparty (see Note 15 to the consolidated financial statements)
|
◦
|
$1.5 million decrease due to legal fees recorded on the two legal disputes noted above
|
◦
|
$5.7 million increase resulting from a favorable FERC decision over a tariff rate dispute with a counterparty, including interest, whereby SJI contended that the counterparty was overcharging for storage demand charges over a ten year period (see Note 15 to the consolidated financial statements).
|
◦
|
$5.3 million increase
due to higher margins earned on daily energy trading activities, colder weather conditions experienced in the fourth quarter of 2017 compared to the prior year, additional margins earned during 2017 on gas supply contracts with three electric generation facilities, and an overall decrease in operating expenses (excluding the legal fees discussed above).
|
•
|
SJI recorded $12.0 million of expenses related to
costs incurred on the Acquisition (see Note 1 to the consolidated financial statements). These include finders fees, consulting and legal charges, among others.
These costs are recorded in the Corporate & Services segment.
|
•
|
The net income contribution from the retail gas and electric operations at SJE decreased $6.2 million to $1.3 million primarily due to the change in unrealized gains and losses on forward financial contracts used to mitigate price risk on retail gas as discussed under "Operating Revenues – Energy Group" below, along with the expiration of a large electric sales contract with a group of school boards.
|
•
|
SJI recorded $13.5 million of tax gains related to the enactment of Tax Reform. See Note 4 to the consolidated financial statements.
|
•
|
The net income
contribution from Midstream increased $4.8 million to $4.6 million primarily due to recognition of AFUDC at PennEast, of which Midstream has a 20% equity interest.
|
•
|
The net income
contribution from gas utility operations at SJG increased $3.5 million to $72.6 million primarily due to increased margin resulting from investments included in the rate case, AIRP II and SHARP rolling into base rates during the fourth quarter of 2017, along with customer growth. This is partially offset by increases in depreciation, interest and operations expenses.
|
•
|
SJI recognized an additional gain of $1.7 million related to the sale of real estate during 2017.
|
•
|
The wholesale energy operations at SJRG purchases and holds natural gas in storage and maintains capacity on interstate pipelines to earn profit margins in the future. The wholesale energy operations utilize derivatives to mitigate price risk in order to substantially lock-in the profit margin that will ultimately be realized. However, both gas stored in inventory and pipeline capacity are not considered derivatives and are not subject to fair value accounting. Conversely, the derivatives used to reduce the risk associated with a change in the value of inventory and pipeline capacity 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 inventory and pipeline capacity are 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, as well as use of capacity, 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 use 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 year ended December 31, 2018, Economic Earnings excludes impairment charges, including charges taken in 2018 on solar generating facilities (which was primarily driven by the purchase price in the agreement to sell solar assets being less than the carrying amount of the assets) along with LFGTE assets (which was primarily driven by the remaining carrying value of these assets no longer being recoverable. For the year ended December 31, 2017, Economic Earnings excludes impairment charges on solar generating facilities, LFGTE long-lived assets, LFGTE assets customer relationships, and goodwill.
|
•
|
For the years ended December 31, 2018 and 2017, Economic Earnings excludes the impact of a May 2017 jury verdict stemming from a pricing dispute with a gas supplier over costs, including interest charges and legal fees incurred, along with the realized difference in the market value of the commodity (including financial hedges).
|
•
|
For the years ended December 31, 2018 and 2017, Economic Earnings excludes various costs related to the Acquisition, a series of agreements whereby Marina agreed to sell its portfolio of solar energy assets to a third-party buyer, and the agreement to sell the assets of SJE's retail gas business.
|
•
|
For the year ended December 31, 2018, Economic Earnings excludes approximately $15.3 million (pre-tax) of credits to ETG and ELK customers that was required as part of the Acquisition.
|
•
|
For the year ended December 31, 2018, Economic Earnings excludes costs incurred on the Company's ERIP as well as the benefit of amending the Company's OPEB.
|
•
|
For the year ended December 31, 2017, Economic Earnings also excludes the impact of a 2017 settlement of a legal claim stemming from a dispute related to a three-year capacity management contract with a counterparty, including legal fees incurred, along with the impact of a favorable FERC decision over a tariff rate dispute with a counterparty, including interest earned.
|
•
|
For the year ended December 31, 2017, Economic Earnings excludes an approximately $2.4 million pre-tax loss related to a new interest rate derivative and amendments made to an existing interest rate derivative linked to unrealized losses previously recorded in AOCL. SJI reclassified this amount from AOCL to Interest Charges on the consolidated statements of income as a result of the prior hedged transactions being deemed probable of not occurring. Since the economic impact will not be realized until future periods, this amount is excluded from Economic Earnings.
|
•
|
For the year ended December 31, 2017, Economic Earnings excludes the impact of one-time tax adjustments, most notably related to the Tax Reform.
|
•
|
The income contribution from the wholesale energy operations at SJRG increased $22.0 million to $43.6 million, primarily due to higher margins on daily energy trading activities and an overall increase in sales due to cold weather experienced in the first quarter of 2018, as discussed under "Gross Margin - Energy Group" below. Also contributing was the impact of Tax Reform, as discussed in Note 1 to the consolidated financial statements.
|
•
|
The income contribution from the gas utility operations at SJG increased $10.3 million to $82.9 million, primarily due to the base rate case settlement, the roll-in of investments for infrastructure replacement and improvement, along with customer growth, partially offset with an overall increase in depreciation, interest and operations expenses.
|
•
|
In connection with the Acquisition, SJI consolidated the results of the ETG and ELK gas utility operations beginning July 2018 (see Note 20 to the consolidated financial statements), contributing net income of $5.8 million for 2018, excluding the customer credits discussed above.
|
•
|
SJI recorded $18.3 million (after-tax) of additional interest charges relating to the debt that was issued during the second quarter of 2018 (see Note 14 to the consolidated financial statements).
|
•
|
The income contribution from on-site energy production at Marina decreased $18.9 million to a net loss of $3.2 million. This was primarily due to the impact of recording no investment tax credits on renewable energy facilities in 2017, compared with $9.1 million in 2016, which is consistent with SJI's previously announced strategy of substantially reducing solar development. Also contributing was $4.5 million for two settlements recorded at Marina during 2016 that did not recur in 2017 (see Note 7 to the consolidated financial statements).
The remaining decrease is primarily due to an overall increase in operating and interest expenses.
|
•
|
The income contribution from the retail gas and electric operations at SJE decreased $1.8 million to a net loss of $0.5 million primarily due to the expiration of a large electric sales contract with a group of school boards.
|
•
|
The income contribution from the wholesale energy operations at SJRG increased $5.3 million to $21.6 million, primarily
due to higher margins earned on daily energy trading activities, colder weather conditions experienced in the fourth quarter of 2017 compared to the prior year, additional margins earned during 2017 on gas supply contracts with three electric generation facilities, and an overall decrease in operating expenses (excluding the legal fees discussed above).
|
•
|
The income
contribution from Midstream increased $4.8 million to $4.6 million primarily due to recognition of AFUDC at PennEast, of which Midstream has a 20% equity interest.
|
•
|
The income
contribution from gas utility operations at SJG increased $3.5 million to $72.6 million primarily due to increased margin resulting from investments included in the rate case, AIRP II and SHARP rolling into base rates during the fourth quarter of 2017, along with customer growth. This is partially offset by increases in depreciation, interest and operations expenses.
|
•
|
SJI recognized an additional gain of $1.7 million related to the sale of real estate during 2017.
|
|
2018
|
2017
|
2016
|
||||||
|
|
|
|
||||||
Income (Loss) from Continuing Operations
|
$
|
17,903
|
|
$
|
(3,404
|
)
|
$
|
119,061
|
|
Minus/Plus:
|
|
|
|
|
|
|
|||
Unrealized Mark-to-Market (Gains) Losses on Derivatives
|
(35,846
|
)
|
14,226
|
|
(27,550
|
)
|
|||
Realized Losses on Inventory Injection Hedges
|
—
|
|
332
|
|
683
|
|
|||
Loss on Property, Plant and Equipment (A)
|
105,280
|
|
91,299
|
|
—
|
|
|||
Net Losses from Legal Proceedings (B)
|
5,910
|
|
56,075
|
|
—
|
|
|||
Acquisition/Sale Costs (C)
|
34,674
|
|
19,564
|
|
—
|
|
|||
Customer Credits (D)
|
15,333
|
|
—
|
|
—
|
|
|||
ERIP and OPEB (E)
|
6,733
|
|
—
|
|
—
|
|
|||
Other (F)
|
—
|
|
2,227
|
|
(165
|
)
|
|||
Income Taxes (G)
|
(33,753
|
)
|
(70,834
|
)
|
10,813
|
|
|||
Additional Tax Adjustments (H)
|
—
|
|
(11,420
|
)
|
—
|
|
|||
|
|
|
|
||||||
Economic Earnings
|
$
|
116,234
|
|
$
|
98,065
|
|
$
|
102,842
|
|
|
|
|
|
||||||
Earnings (Loss) per Share from Continuing Operations
|
$
|
0.21
|
|
$
|
(0.04
|
)
|
$
|
1.56
|
|
Minus/Plus:
|
|
|
|
|
|
|
|||
Unrealized Mark-to-Market (Gains) Losses on Derivatives
|
(0.42
|
)
|
0.18
|
|
(0.36
|
)
|
|||
Realized Losses on Inventory Injection Hedges
|
—
|
|
—
|
|
0.01
|
|
|||
Loss on Property, Plant and Equipment (A)
|
1.24
|
|
1.14
|
|
—
|
|
|||
Net Losses from Legal Proceedings (B)
|
0.07
|
|
0.70
|
|
—
|
|
|||
Acquisition/Sale Costs (C)
|
0.41
|
|
0.25
|
|
—
|
|
|||
Customer Credits (D)
|
0.18
|
|
—
|
|
—
|
|
|||
ERIP and OPEB (E)
|
0.08
|
|
—
|
|
—
|
|
|||
Other (F)
|
—
|
|
0.03
|
|
—
|
|
|||
Income Taxes (G)
|
(0.39
|
)
|
(0.89
|
)
|
0.13
|
|
|||
Additional Tax Adjustments (H)
|
—
|
|
(0.14
|
)
|
—
|
|
|||
|
|
|
|
||||||
Economic Earnings per Share
|
$
|
1.38
|
|
$
|
1.23
|
|
$
|
1.34
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Gains (Losses) on energy-related commodity contracts
|
$
|
34,509
|
|
|
$
|
(13,667
|
)
|
|
$
|
26,935
|
|
Gains (Losses) on interest rate contracts
|
1,337
|
|
|
(677
|
)
|
|
647
|
|
|||
Total before income taxes
|
35,846
|
|
|
(14,344
|
)
|
|
27,582
|
|
|||
Unrealized mark-to-market gains (losses) on derivatives
held by affiliated companies, before taxes
|
—
|
|
|
118
|
|
|
(32
|
)
|
|||
Total unrealized mark-to-market gains (losses) on derivatives
|
35,846
|
|
|
(14,226
|
)
|
|
27,550
|
|
|||
Realized losses on inventory injection hedges
|
—
|
|
|
(332
|
)
|
|
(683
|
)
|
|||
Loss on Property, Plant and Equipment (A)
|
(105,280
|
)
|
|
(91,299
|
)
|
|
—
|
|
|||
Net Losses from Legal Proceedings (B)
|
(5,910
|
)
|
|
(56,075
|
)
|
|
—
|
|
|||
Acquisition/Sale Costs (C)
|
(34,674
|
)
|
|
(19,564
|
)
|
|
—
|
|
|||
Customer Credits (D)
|
(15,333
|
)
|
|
—
|
|
|
—
|
|
|||
ERIP and OPEB (E)
|
(6,733
|
)
|
|
|
|
|
|||||
Other (F)
|
—
|
|
|
(2,227
|
)
|
|
165
|
|
|||
Income Taxes (G)
|
33,753
|
|
|
70,834
|
|
|
(10,813
|
)
|
|||
Additional Tax Adjustments (H)
|
—
|
|
|
11,420
|
|
|
—
|
|
|||
Total reconciling items between (losses) income from continuing
operations and Economic Earnings
|
$
|
(98,331
|
)
|
|
$
|
(101,469
|
)
|
|
$
|
16,219
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Utility Operating Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Firm Sales-
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
$
|
316,593
|
|
|
58
|
%
|
|
$
|
269,721
|
|
|
52
|
%
|
|
$
|
259,881
|
|
|
56
|
%
|
Commercial
|
68,286
|
|
|
13
|
%
|
|
61,514
|
|
|
12
|
%
|
|
55,795
|
|
|
12
|
%
|
|||
Industrial
|
4,630
|
|
|
1
|
%
|
|
4,235
|
|
|
1
|
%
|
|
3,126
|
|
|
1
|
%
|
|||
Cogeneration and Electric Generation
|
9,706
|
|
|
2
|
%
|
|
5,519
|
|
|
1
|
%
|
|
5,257
|
|
|
1
|
%
|
|||
Firm Transportation -
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
12,614
|
|
|
2
|
%
|
|
14,162
|
|
|
3
|
%
|
|
14,989
|
|
|
3
|
%
|
|||
Commercial
|
37,764
|
|
|
7
|
%
|
|
34,986
|
|
|
7
|
%
|
|
32,423
|
|
|
7
|
%
|
|||
Industrial
|
23,993
|
|
|
4
|
%
|
|
20,576
|
|
|
4
|
%
|
|
19,594
|
|
|
4
|
%
|
|||
Cogeneration and Electric Generation
|
4,595
|
|
|
1
|
%
|
|
4,360
|
|
|
1
|
%
|
|
4,472
|
|
|
1
|
%
|
|||
Total Firm Revenues
|
478,181
|
|
|
88
|
%
|
|
415,073
|
|
|
81
|
%
|
|
395,537
|
|
|
85
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interruptible Sales
|
349
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|||
Interruptible Transportation
|
1,178
|
|
|
—
|
|
|
867
|
|
|
—
|
|
|
928
|
|
|
—
|
|
|||
Off-System Sales
|
59,157
|
|
|
11
|
%
|
|
92,376
|
|
|
18
|
%
|
|
51,661
|
|
|
11
|
%
|
|||
Capacity Release
|
7,963
|
|
|
1
|
%
|
|
7,695
|
|
|
1
|
%
|
|
11,778
|
|
|
3
|
%
|
|||
Other
|
1,172
|
|
|
—
|
%
|
|
1,218
|
|
|
—
|
%
|
|
1,133
|
|
|
1
|
%
|
|||
|
548,000
|
|
|
100
|
%
|
|
517,254
|
|
|
100
|
%
|
|
461,055
|
|
|
100
|
%
|
|||
Less: Intercompany Sales
|
6,192
|
|
|
|
|
4,772
|
|
|
|
|
7,236
|
|
|
|
||||||
Total Utility Operating Revenues
|
541,808
|
|
|
|
|
512,482
|
|
|
|
|
453,819
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of Sales - Utility
|
209,649
|
|
|
|
|
204,432
|
|
|
|
|
174,390
|
|
|
|
||||||
Less: Intercompany Cost of Sales
|
6,192
|
|
|
|
|
4,772
|
|
|
|
|
7,236
|
|
|
|
||||||
Total Cost of Sales - Utility (Excluding Depreciation)
|
203,457
|
|
|
|
|
199,660
|
|
|
|
|
167,154
|
|
|
|
||||||
Conservation Recoveries *
|
14,136
|
|
|
|
|
|
7,003
|
|
|
|
|
|
9,202
|
|
|
|
|
|||
RAC recoveries *
|
17,099
|
|
|
|
|
|
11,014
|
|
|
|
|
|
9,326
|
|
|
|
|
|||
EET Recoveries*
|
1,772
|
|
|
|
|
1,284
|
|
|
|
|
2,718
|
|
|
|
||||||
Revenue Taxes
|
1,074
|
|
|
|
|
|
1,162
|
|
|
|
|
|
1,109
|
|
|
|
|
|||
Utility Margin**
|
$
|
304,270
|
|
|
|
|
$
|
292,359
|
|
|
|
|
$
|
264,310
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Utility Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
$
|
213,026
|
|
|
70
|
%
|
|
$
|
180,106
|
|
|
62
|
%
|
|
$
|
162,820
|
|
|
62
|
%
|
Commercial and Industrial
|
89,172
|
|
|
29
|
%
|
|
76,491
|
|
|
26
|
%
|
|
69,396
|
|
|
26
|
%
|
|||
Cogeneration and Electric Generation
|
4,975
|
|
|
1
|
%
|
|
4,762
|
|
|
1
|
%
|
|
4,898
|
|
|
2
|
%
|
|||
Interruptible
|
105
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|||
Off-system Sales & Capacity Release
|
4,434
|
|
|
2
|
%
|
|
5,051
|
|
|
2
|
%
|
|
4,731
|
|
|
2
|
%
|
|||
Other Revenues
|
1,942
|
|
|
1
|
%
|
|
2,107
|
|
|
1
|
%
|
|
2,213
|
|
|
1
|
%
|
|||
Margin Before Weather Normalization & Decoupling
|
313,654
|
|
|
103
|
%
|
|
268,580
|
|
|
92
|
%
|
|
244,137
|
|
|
93
|
%
|
|||
CIP mechanism
|
(12,382
|
)
|
|
(4
|
)%
|
|
20,062
|
|
|
7
|
%
|
|
16,615
|
|
|
6
|
%
|
|||
EET mechanism
|
2,998
|
|
|
1
|
%
|
|
3,717
|
|
|
1
|
%
|
|
3,558
|
|
|
1
|
%
|
|||
Utility Margin**
|
$
|
304,270
|
|
|
100
|
%
|
|
$
|
292,359
|
|
|
100
|
%
|
|
$
|
264,310
|
|
|
100
|
%
|
Utility Operating Revenues:
|
|
||
Firm & Interruptible Sales -
|
|
||
Residential
|
$
|
80,215
|
|
Commercial & Industrial
|
26,784
|
|
|
Firm & Interruptible Transportation -
|
|
||
Residential
|
508
|
|
|
Commercial & Industrial
|
15,148
|
|
|
Other
|
2,949
|
|
|
Total Firm & Interruptible Revenues
|
125,604
|
|
|
Less:
|
|
||
Total Cost of Sales - Utility (Excluding depreciation)
|
53,491
|
|
|
Regulatory Rider Expenses*
|
2,068
|
|
|
Utility Margin**
|
$
|
70,045
|
|
|
|
||
Utility Margin:
|
|
||
Residential
|
$
|
43,293
|
|
Commercial & Industrial
|
26,034
|
|
|
Regulatory Rider Expenses*
|
718
|
|
|
Utility Margin**
|
$
|
70,045
|
|
|
|
||
Degree Days
|
1,724
|
|
•
|
Gross margin from the wholesale energy operations at SJRG increased $122.9 million to $100.8 million for 2018 compared to 2017. The significant drivers for the overall change were as follows:
|
•
|
$50.2 million increase resulting from the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings.
|
•
|
$38.7 million reduction in charges compared to the prior year recorded on a pricing dispute between SJI and a gas supplier (see Note 15 to the consolidated financial statements), along with two other settled cases (see 2017 vs. 2016 discussion below).
|
•
|
The remaining increase is primarily due to higher margins on daily energy trading activities and an overall increase in sales due to cold weather experienced in the first quarter of 2018.
|
•
|
Gross margin from SJE’s retail gas and other operations decreased $2.7 million to $4.7 million for 2018 compared with 2017, primarily due to the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings and represented a total decrease of $2.7 million in 2018 compared with 2017.
|
•
|
Gross margin from SJE’s retail electric operations decreased $4.3 million to $3.2 million in 2018 compared with 2017, primarily due to lower sales volumes in the first two quarters of 2018 resulting from the expiration in the second quarter of 2017 of a large electric sales contract with a group of school boards. Also contributing to the comparative period decrease was the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings and represented a total decrease of $2.4 million in 2018 compared with 2017.
|
•
|
Gross margin from on-site energy production at Marina decreased $24.8 million to $63.3 million in 2018 compared with 2017, primarily due to the sale of certain SREC's (see Note 1 to the consolidated financial statements).
|
•
|
Gross margin from appliance service operations at SJESP decreased $0.8 million to $1.9 million in 2018 compared with 2017, primarily due to the impact of the sale of certain assets of SJESP's residential and small commercial HVAC and plumbing business to a third party, which was completed on September 1, 2017.
|
•
|
Gross margin from SJE’s retail gas and other operations decreased $6.0 million to $7.5 million in 2017 compared with 2016. This was primarily due to the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings and represented a total decrease of $6.3 million in 2017 compared with 2016.
|
•
|
Gross margin from SJE’s retail electric operations decreased $3.0 million to $7.5 million in 2017 compared with 2016. This decrease was primarily due to lower sales volumes resulting from the expiration of a large contract with a group of school boards, along with the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings and represented a total decrease of $0.8 million.
|
•
|
Gross margin from the wholesale energy operations at SJRG decreased $78.8 million to a loss of $22.1 million in 2017 compared with 2016. The significant drivers for the overall change were as follows:
|
•
|
$49.6 million decrease resulting from an unfavorable court ruling related to a pricing dispute between SJRG and a supplier (see Note 15 to the consolidated financial statements), which is excluded for Economic Earnings.
|
•
|
$33.5 million decrease resulting from the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings.
|
•
|
$9.5 million decrease resulting from a settlement of a legal dispute related to a three-year capacity management contract, which is excluded for Economic Earnings.
|
•
|
$7.4 million increase resulting from favorable FERC decision over a tariff rate dispute with a counterparty, whereby SJI contended that the counterparty was overcharging for storage demand charges over a ten year period, which is excluded for Economic Earnings.
|
•
|
The remaining $6.4 million increase resulted from higher margins earned on daily energy trading activities, colder weather conditions in the fourth quarter of 2017, and additional margins earned during 2017 on gas supply contracts with three electric generation facilities.
|
•
|
Gross margin from on-site energy production at Marina increased $4.1 million to $88.2 million in 2017 compared with 2016, primarily due to an increase in SRECs transferred as a result of more solar projects being online compared to the same period in 2016, along with better production.
|
•
|
Gross margin from appliance service operations at SJESP decreased $1.4 million in 2017 compared with 2016 primarily due to the sale of certain assets of SJESP's residential and small commercial HVAC and plumbing business to a third party, which was completed on September 1, 2017 (see Note 1 to the consolidated financial statements).
|
|
2018 vs. 2017
|
2017 vs. 2016
|
||||
SJI Utilities:
|
|
|
||||
SJG Utility Operations
|
$
|
16,316
|
|
$
|
3,592
|
|
ETG Utility Operations
|
52,070
|
|
—
|
|
||
ELK Utility Operations
|
1,218
|
|
—
|
|
||
Subtotal SJI Utilities
|
69,604
|
|
3,592
|
|
||
Nonutility:
|
|
|
||||
Energy Group:
|
|
|
||||
Wholesale Energy Operations
|
(1,560
|
)
|
(130
|
)
|
||
Retail Gas and Other Operations
|
1,705
|
|
1,221
|
|
||
Retail Electric Operations
|
(452
|
)
|
273
|
|
||
Subtotal Energy Group
|
(307
|
)
|
1,364
|
|
||
Energy Services:
|
|
|
||||
On-Site Energy Production
|
9,432
|
|
5,918
|
|
||
Appliance Service Operations
|
(2,227
|
)
|
(928
|
)
|
||
Subtotal Energy Services
|
7,205
|
|
4,990
|
|
||
Total Nonutility
|
6,898
|
|
6,354
|
|
||
Midstream
|
291
|
|
—
|
|
||
Corporate & Services and Intercompany Eliminations
|
10,302
|
|
12,765
|
|
||
Total Operations Expense
|
$
|
87,095
|
|
$
|
22,711
|
|
|
2018 vs. 2017
|
2017 vs. 2016
|
||||
Impairment Charges
|
$
|
13,981
|
|
$
|
91,299
|
|
Maintenance
|
$
|
12,435
|
|
$
|
2,178
|
|
Depreciation
|
$
|
(3,995
|
)
|
$
|
10,329
|
|
Energy and Other Taxes
|
$
|
3,050
|
|
$
|
145
|
|
•
|
$11.1 million due to higher amounts of long-term debt outstanding at SJI and SJG, along with higher interest rates on variable rate debt outstanding at SJI and SJG.
|
•
|
$5.1 million of charges incurred on the bridge credit facility entered into in conjunction with the Acquisition.
|
•
|
$4.0 million of interest charges incurred from an unfavorable court ruling related to a pricing dispute between SJRG and a supplier (see Note 15 to the consolidated financial statements),
|
•
|
$2.4 million resulting from an amendment of an existing interest rate derivative contract previously linked to unrealized losses recorded in AOCL, which was reclassified to interest expense as a result of the prior hedged transactions being deemed probable of not occurring (see Note 16 to the consolidated financial statements).
|
•
|
SJI received approximately $310.6 million in 2018 from the sale of certain solar assets along with the sale of SJE's retail gas operations. See Note 1 to the consolidated financial statements.
|
•
|
SJI paid $11.3 million to enter into a new asset management agreement. See Note 1 to the consolidated financial statements.
|
•
|
SJI made net investments in unconsolidated affiliates of
$6.6 million
and
$32.1 million
in
2018
and
2017
, respectively.
|
•
|
During 2017, SJI received approximately $3.1 million related to the sale of real estate. SJI recognized an after-tax gain on this sale of approximately $1.7 million.
|
•
|
During 2017, SJI made an incremental $7.5 million payment above the prior year to fund company-owned life insurance.
|
•
|
During 2017, SJI received the remaining balance in connection with an outstanding note receivable with a third party. Cash proceeds received in 2017 were
$22.9 million
.
|
Company
|
|
Total Facility
|
|
Usage
|
|
Available Liquidity
|
|
Expiration Date
|
||||||
SJI:
|
|
|
|
|
|
|
|
|
||||||
SJI Syndicated Revolving Credit Facility
|
|
$
|
400,000
|
|
|
$
|
33,100
|
|
(A)
|
$
|
366,900
|
|
|
August 2022
|
Revolving Credit Facility
|
|
50,000
|
|
|
50,000
|
|
|
—
|
|
|
September 2019
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total SJI
|
|
450,000
|
|
|
83,100
|
|
|
366,900
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
SJG:
|
|
|
|
|
|
|
|
|
||||||
Commercial Paper Program/Revolving Credit Facility
|
|
200,000
|
|
|
108,300
|
|
(B)
|
91,700
|
|
|
August 2022
|
|||
Uncommitted Bank Line
|
|
10,000
|
|
|
|
|
|
10,000
|
|
|
August 2019
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total SJG
|
|
210,000
|
|
|
108,300
|
|
|
101,700
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
ETG/ELK:
|
|
|
|
|
|
|
|
|
||||||
ETG/ELK Revolving Credit Facility
|
|
200,000
|
|
|
86,000
|
|
|
114,000
|
|
|
June 2020
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total
|
|
$
|
860,000
|
|
|
$
|
277,400
|
|
|
$
|
582,600
|
|
|
|
•
|
SJI offered
12,669,491
shares of its common stock, par value
$1.25
per share, at a public offering price of
$29.50
per share. Of the offered shares,
5,889,830
shares were issued at closing, including
1,652,542
shares pursuant to the underwriters’ option. The gross proceeds from these shares was
$173.7 million
, with net proceeds, after deducting underwriting discounts and commissions, of
$167.7 million
. The remaining
6,779,661
shares of common stock ("Forward Shares") were to be sold by Bank of America, N.A., as forward seller, pursuant to a forward sale agreement. The Company received no proceeds from the sale of the Forward Shares in 2018. In January 2019, the Company settled the equity forward sale agreement by physically delivering 6,779,661 shares of common stock and receiving net cash proceeds of approximately $189.0 million. See Note 22 to the consolidated financial statements.
|
•
|
SJI issued and sold
5,750,000
Equity Units, initially in the form of Corporate Units, which included
750,000
Corporate Units pursuant to the underwriters’ option. Each Corporate Unit has a stated amount of
$50
and is comprised of (a) a purchase contract obligating the holder to purchase from the Company, and for the Company to sell to the holder for a price in cash of
$50
, on the purchase contract settlement date, or April 15, 2021, subject to earlier termination or settlement, a certain number of shares of common stock; and (b) a
1/20, or 5%
, undivided beneficial ownership interest in
$1,000
principal amount of SJI’s 2018 Series A
3.70%
Remarketable Junior Subordinated Notes due 2031. SJI will pay the holder quarterly contract adjustment payments at a rate of
3.55%
per year on the stated amount of
$50
per Equity Unit, in respect of each purchase contract, subject to the Company's right to defer these payments. No deferral period will extend beyond the purchase contract settlement date. The contract adjustment payments are payable quarterly on January 15, April 15, July 15 and October 15 of each year (except that if such date is not a business day, contract adjustment payments will be payable on the following business day, without adjustment), commencing on July 15, 2018. The contract adjustment payments will be subordinated to all of the Company's existing and future “Priority Indebtedness” and will be structurally subordinated to all liabilities of our subsidiaries. The present value of the contract adjustment payments due through April 15, 2021 are initially charged to Shareholders’ Equity, with an offsetting credit to Other Current and Noncurrent Liabilities on the consolidated balance sheet. These liabilities are accreted over the life of the purchase contract by interest charges to the income statement based on a constant rate calculation. Subsequent contract adjustment payments reduce this liability. This offering resulted in gross proceeds of approximately
$287.5 million
, with net proceeds, after deducting underwriting discounts and commissions, of
$278.9 million
. As of December 31, 2018, the net proceeds, after amortization of the underwriting discounts, are recorded as Long-Term Debt on the consolidated balance sheets (see Note 14).
|
|
|
Up to
|
Years
|
Years
|
More than
|
||||||||||
Contractual Cash Obligations
|
Total
|
1 Year
|
2 & 3
|
4 & 5
|
5 Years
|
||||||||||
|
|
|
|
|
|
||||||||||
Principal Payments on Long-Term Debt
|
$
|
2,867,764
|
|
$
|
733,909
|
|
$
|
495,818
|
|
$
|
106,168
|
|
$
|
1,531,869
|
|
Interest on Long-Term Debt
|
1,091,131
|
|
105,180
|
|
154,071
|
|
124,958
|
|
706,922
|
|
|||||
Construction Obligations
|
320,672
|
|
320,672
|
|
—
|
|
—
|
|
—
|
|
|||||
Operating Leases
|
1,885
|
|
838
|
|
916
|
|
131
|
|
—
|
|
|||||
Commodity Supply Purchase Obligations
|
1,701,676
|
|
626,361
|
|
483,359
|
|
195,228
|
|
396,728
|
|
|||||
Environmental Remediation Costs
|
253,650
|
|
47,592
|
|
131,878
|
|
46,810
|
|
27,370
|
|
|||||
New Jersey Clean Energy Program
|
18,832
|
|
18,832
|
|
—
|
|
—
|
|
—
|
|
|||||
Other Purchase Obligations
|
4,213
|
|
4,213
|
|
—
|
|
—
|
|
—
|
|
|||||
Total Contractual Cash Obligations
|
$
|
6,259,823
|
|
$
|
1,857,597
|
|
$
|
1,266,042
|
|
$
|
473,295
|
|
$
|
2,662,889
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
Utility Throughput - dts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Firm Sales -
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential
|
25,424
|
|
|
16
|
%
|
|
22,107
|
|
|
15
|
%
|
|
22,126
|
|
|
15
|
%
|
Commercial
|
6,037
|
|
|
4
|
%
|
|
5,294
|
|
|
3
|
%
|
|
4,956
|
|
|
3
|
%
|
Industrial
|
434
|
|
|
—
|
|
|
422
|
|
|
—
|
|
|
310
|
|
|
—
|
|
Cogeneration and Electric Generation
|
2,384
|
|
|
1
|
%
|
|
1,300
|
|
|
1
|
%
|
|
1,485
|
|
|
1
|
%
|
Firm Transportation -
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential
|
1,504
|
|
|
1
|
%
|
|
1,635
|
|
|
1
|
%
|
|
1,975
|
|
|
1
|
%
|
Commercial
|
6,978
|
|
|
4
|
%
|
|
6,422
|
|
|
4
|
%
|
|
6,892
|
|
|
5
|
%
|
Industrial
|
10,278
|
|
|
6
|
%
|
|
10,894
|
|
|
7
|
%
|
|
11,612
|
|
|
8
|
%
|
Cogeneration and Electric Generation
|
5,113
|
|
|
3
|
%
|
|
6,199
|
|
|
4
|
%
|
|
7,451
|
|
|
5
|
%
|
Total Firm Throughput
|
58,152
|
|
|
35
|
%
|
|
54,273
|
|
|
35
|
%
|
|
56,807
|
|
|
38
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interruptible Sales
|
28
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
—
|
|
Interruptible Transportation
|
1,039
|
|
|
1
|
%
|
|
1,140
|
|
|
1
|
%
|
|
1,149
|
|
|
1
|
%
|
Off-System
|
13,582
|
|
|
9
|
%
|
|
25,560
|
|
|
17
|
%
|
|
16,526
|
|
|
11
|
%
|
Capacity Release
|
86,249
|
|
|
55
|
%
|
|
70,315
|
|
|
47
|
%
|
|
73,913
|
|
|
50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Throughput - Utility
|
159,050
|
|
|
100
|
%
|
|
151,291
|
|
|
100
|
%
|
|
148,397
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Number of Customers at Year End:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential
|
365,009
|
|
|
93
|
%
|
|
358,026
|
|
|
93
|
%
|
|
352,427
|
|
|
93
|
%
|
Commercial
|
25,657
|
|
|
7
|
%
|
|
25,184
|
|
|
7
|
%
|
|
24,767
|
|
|
7
|
%
|
Industrial
|
426
|
|
|
—
|
|
|
423
|
|
|
—
|
|
|
431
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Customers
|
391,092
|
|
|
100
|
%
|
|
383,633
|
|
|
100
|
%
|
|
377,625
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Annual Degree Days*
|
4,602
|
|
|
|
|
4,272
|
|
|
|
|
4,292
|
|
|
|
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Operations
|
16,316
|
|
$
|
3,383
|
|
Maintenance
|
9,015
|
|
$
|
2,178
|
|
Depreciation
|
5,868
|
|
$
|
6,455
|
|
Energy and Other Taxes
|
517
|
|
$
|
109
|
|
Contractual Cash Obligations
|
Total
|
|
Up to
1 Year
|
|
Years
2 & 3
|
|
Years
4 & 5
|
|
More than
5 Years
|
||||||||||
Principal Payments on Long-Term Debt
|
$
|
900,264
|
|
|
$
|
18,909
|
|
|
$
|
355,818
|
|
|
$
|
71,168
|
|
|
$
|
454,369
|
|
Interest on Long-Term Debt
|
235,322
|
|
|
32,273
|
|
|
45,272
|
|
|
37,952
|
|
|
119,825
|
|
|||||
Commodity Supply Purchase Obligations
|
295,504
|
|
|
295,504
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Environmental Remediation Costs
|
148,071
|
|
|
33,022
|
|
|
74,954
|
|
|
27,118
|
|
|
12,977
|
|
|||||
Construction Obligations
|
477,230
|
|
|
87,137
|
|
|
130,180
|
|
|
65,919
|
|
|
193,994
|
|
|||||
Operating Leases
|
175
|
|
|
56
|
|
|
112
|
|
|
7
|
|
|
—
|
|
|||||
New Jersey Clean Energy Program
|
8,323
|
|
|
8,323
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other Purchase Obligations
|
4,213
|
|
|
4,213
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Contractual Cash Obligations
|
$
|
2,069,102
|
|
|
$
|
479,437
|
|
|
$
|
606,336
|
|
|
$
|
202,164
|
|
|
$
|
781,165
|
|
Assets
|
|
|
|
|
||||||||
Source of Fair Value
|
Maturity
< 1 Year
|
Maturity
1 - 3 Years
|
Maturity
Beyond
3 Years
|
Total
|
||||||||
|
|
|
|
|
||||||||
Prices actively quoted
|
$
|
9,344
|
|
$
|
554
|
|
$
|
57
|
|
$
|
9,955
|
|
|
|
|
|
|
||||||||
Prices provided by other external sources
|
19,529
|
|
3,707
|
|
193
|
|
23,429
|
|
||||
|
|
|
|
|
||||||||
Prices based on internal models or other valuation methods
|
25,148
|
|
2,604
|
|
54
|
|
27,806
|
|
||||
|
|
|
|
|
||||||||
Total
|
$
|
54,021
|
|
$
|
6,865
|
|
$
|
304
|
|
$
|
61,190
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
||||||||
Source of Fair Value
|
Maturity
< 1 Year
|
Maturity
1 - 3 Years
|
Maturity
Beyond
3 Years
|
Total
|
||||||||
|
|
|
|
|
||||||||
Prices actively quoted
|
$
|
6,113
|
|
$
|
1,168
|
|
$
|
10
|
|
$
|
7,291
|
|
|
|
|
|
|
||||||||
Prices provided by other external sources
|
11,048
|
|
1,279
|
|
27
|
|
12,354
|
|
||||
|
|
|
|
|
||||||||
Prices based on internal models or other valuation methods
|
6,973
|
|
4,537
|
|
235
|
|
11,745
|
|
||||
|
|
|
|
|
||||||||
Total
|
$
|
24,134
|
|
$
|
6,984
|
|
$
|
272
|
|
$
|
31,390
|
|
Net Derivatives - Energy Related Liabilities, January 1, 2018
|
$
|
(4,836
|
)
|
Contracts Settled During 2018, Net
|
4,469
|
|
|
Other Changes in Fair Value from Continuing and New Contracts, Net
|
30,167
|
|
|
|
|
||
Net Derivatives - Energy Related Assets, December 31, 2018
|
$
|
29,800
|
|
Notional Amount
|
|
Fixed Interest Rate
|
|
Start Date
|
|
Maturity
|
|
Obligor
|
||
$
|
20,000,000
|
|
|
3.049%
|
|
3/15/2017
|
|
3/15/2027
|
|
SJI
|
$
|
20,000,000
|
|
|
3.049%
|
|
3/15/2017
|
|
3/15/2027
|
|
SJI
|
$
|
10,000,000
|
|
|
3.049%
|
|
3/15/2017
|
|
3/15/2027
|
|
SJI
|
$
|
12,500,000
|
|
|
3.530%
|
|
12/1/2006
|
|
2/1/2036
|
|
SJG
|
$
|
12,500,000
|
|
|
3.430%
|
|
12/1/2006
|
|
2/1/2036
|
|
SJG
|
Assets
|
|
|
|
|
||||||||
Source of Fair Value
|
Maturity
< 1 Year
|
Maturity
1 - 3 Years
|
Maturity
Beyond
3 Years
|
Total
|
||||||||
|
|
|
|
|
||||||||
Prices actively quoted
|
$
|
333
|
|
$
|
15
|
|
$
|
—
|
|
$
|
348
|
|
|
|
|
|
|
||||||||
Prices provided by other external sources
|
126
|
|
—
|
|
—
|
|
126
|
|
||||
|
|
|
|
|
||||||||
Prices based on internal models or other valuation methods
|
5,005
|
|
—
|
|
—
|
|
5,005
|
|
||||
|
|
|
|
|
||||||||
Total
|
$
|
5,464
|
|
$
|
15
|
|
$
|
—
|
|
$
|
5,479
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
||||||||
Source of Fair Value
|
Maturity
< 1 Year
|
Maturity
1 - 3 Years
|
Maturity
Beyond
3 Years
|
Total
|
||||||||
|
|
|
|
|
||||||||
Prices actively quoted
|
$
|
992
|
|
$
|
43
|
|
$
|
—
|
|
$
|
1,035
|
|
|
|
|
|
|
||||||||
Prices provided by other external sources
|
1,077
|
|
—
|
|
—
|
|
1,077
|
|
||||
|
|
|
|
|
||||||||
Prices based on internal models or other valuation methods
|
77
|
|
—
|
|
—
|
|
77
|
|
||||
|
|
|
|
|
||||||||
Total
|
$
|
2,146
|
|
$
|
43
|
|
$
|
—
|
|
$
|
2,189
|
|
Net Derivatives - Energy Related Liabilities, January 1, 2018
|
$
|
(2,108
|
)
|
Contracts Settled During 2018, Net
|
1,943
|
|
|
Other Changes in Fair Value from Continuing and New Contracts, Net
|
3,455
|
|
|
|
|
||
Net Derivatives - Energy Related Assets, December 31, 2018
|
$
|
3,290
|
|
|
South Jersey Industries, Inc. and Subsidiaries
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Revenues:
|
|
|
|
|
|
||||||
Utility
|
$
|
670,715
|
|
|
$
|
512,482
|
|
|
$
|
453,819
|
|
Nonutility
|
970,623
|
|
|
730,586
|
|
|
582,681
|
|
|||
Total Operating Revenues
|
1,641,338
|
|
|
1,243,068
|
|
|
1,036,500
|
|
|||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|||
Cost of Sales - (Excluding depreciation and amortization)
|
|
|
|
|
|
|
|
|
|||
- Utility
|
258,781
|
|
|
199,660
|
|
|
167,154
|
|
|||
- Nonutility
|
796,627
|
|
|
646,567
|
|
|
413,833
|
|
|||
Operations (See Note 1)
|
256,862
|
|
|
169,767
|
|
|
147,056
|
|
|||
Impairment Charges
|
105,280
|
|
|
91,299
|
|
|
—
|
|
|||
Maintenance
|
32,162
|
|
|
19,727
|
|
|
17,549
|
|
|||
Depreciation
|
96,723
|
|
|
100,718
|
|
|
90,389
|
|
|||
Energy and Other Taxes
|
9,537
|
|
|
6,487
|
|
|
6,342
|
|
|||
Net Gain on Sales of Assets
|
(15,379
|
)
|
|
—
|
|
|
—
|
|
|||
Total Operating Expenses
|
1,540,593
|
|
|
1,234,225
|
|
|
842,323
|
|
|||
Operating Income (See Note 1)
|
100,745
|
|
|
8,843
|
|
|
194,177
|
|
|||
|
|
|
|
|
|
||||||
Other Income and Expense (See Note 1)
|
2,404
|
|
|
11,041
|
|
|
5,088
|
|
|||
Interest Charges
|
(90,296
|
)
|
|
(54,019
|
)
|
|
(31,449
|
)
|
|||
Income (Loss) Before Income Taxes
|
12,853
|
|
|
(34,135
|
)
|
|
167,816
|
|
|||
Income Taxes
|
(561
|
)
|
|
24,937
|
|
|
(54,151
|
)
|
|||
Equity in Earnings of Affiliated Companies
|
5,611
|
|
|
5,794
|
|
|
5,396
|
|
|||
Income (Loss) from Continuing Operations
|
17,903
|
|
|
(3,404
|
)
|
|
119,061
|
|
|||
Loss from Discontinued Operations - (Net of tax benefit)
|
(240
|
)
|
|
(86
|
)
|
|
(251
|
)
|
|||
Net Income (Loss)
|
$
|
17,663
|
|
|
$
|
(3,490
|
)
|
|
$
|
118,810
|
|
|
|
|
|
|
|
||||||
Basic Earnings (Loss) per Common Share:
|
|
|
|
|
|
|
|
|
|||
Continuing Operations
|
$
|
0.21
|
|
|
$
|
(0.04
|
)
|
|
$
|
1.56
|
|
Discontinued Operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Basic Earnings (Loss) per Common Share
|
$
|
0.21
|
|
|
$
|
(0.04
|
)
|
|
$
|
1.56
|
|
|
|
|
|
|
|
||||||
Average Shares of Common Stock Outstanding - Basic
|
83,693
|
|
|
79,541
|
|
|
76,362
|
|
|||
|
|
|
|
|
|
||||||
Diluted Earnings (Loss) per Common Share:
|
|
|
|
|
|
|
|
|
|||
Continuing Operations
|
$
|
0.21
|
|
|
$
|
(0.04
|
)
|
|
$
|
1.56
|
|
Discontinued Operations
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted Earnings (Loss) per Common Share
|
$
|
0.21
|
|
|
$
|
(0.04
|
)
|
|
$
|
1.56
|
|
|
|
|
|
|
|
||||||
Average Shares of Common Stock Outstanding - Diluted
|
84,471
|
|
|
79,541
|
|
|
76,475
|
|
|
South Jersey Industries, Inc. and Subsidiaries
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net Income (Loss)
|
$
|
17,663
|
|
|
$
|
(3,490
|
)
|
|
$
|
118,810
|
|
|
|
|
|
|
|
||||||
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||||
Postretirement Liability Adjustment (A)
|
10,636
|
|
|
(10,920
|
)
|
|
(3,197
|
)
|
|||
Unrealized Gain on Available-for-Sale Securities (B)
|
—
|
|
|
—
|
|
|
118
|
|
|||
Unrealized Gain on Derivatives - Other (B)
|
34
|
|
|
1,536
|
|
|
197
|
|
|||
|
|
|
|
|
|
||||||
Other Comprehensive Income (Loss) - Net of Tax
|
10,670
|
|
|
(9,384
|
)
|
|
(2,882
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive Income (Loss)
|
$
|
28,333
|
|
|
$
|
(12,874
|
)
|
|
$
|
115,928
|
|
|
South Jersey Industries, Inc. and Subsidiaries
|
||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net Income (Loss)
|
$
|
17,663
|
|
|
$
|
(3,490
|
)
|
|
$
|
118,810
|
|
Loss from Discontinued Operations
|
240
|
|
|
86
|
|
|
251
|
|
|||
Income (Loss) from Continuing Operations
|
17,903
|
|
|
(3,404
|
)
|
|
119,061
|
|
|||
Adjustments to Reconcile Income from Continuing Operations to Net Cash Provided by Operating Activities:
|
|
|
|
|
|
||||||
Net Gain on Sales of Assets
|
(15,379
|
)
|
|
(2,563
|
)
|
|
—
|
|
|||
Impairment Charges
|
105,280
|
|
|
91,299
|
|
|
—
|
|
|||
Loss on Extinguishment of Debt
|
—
|
|
|
543
|
|
|
—
|
|
|||
Depreciation and Amortization
|
132,914
|
|
|
123,486
|
|
|
109,818
|
|
|||
Net Unrealized (Gain) Loss on Derivatives - Energy Related
|
(34,447
|
)
|
|
13,667
|
|
|
(26,935
|
)
|
|||
Unrealized (Gain) Loss on Derivatives - Other
|
(1,337
|
)
|
|
677
|
|
|
(647
|
)
|
|||
Provision for Losses on Accounts Receivable
|
7,977
|
|
|
6,949
|
|
|
6,907
|
|
|||
CIP Receivable/Payable
|
32,523
|
|
|
915
|
|
|
(24,943
|
)
|
|||
Deferred Gas Costs - Net of Recoveries
|
(46,495
|
)
|
|
(28,092
|
)
|
|
11,753
|
|
|||
Deferred SBC Costs - Net of Recoveries
|
311
|
|
|
(5,578
|
)
|
|
(7,102
|
)
|
|||
Stock-Based Compensation Expense
|
4,144
|
|
|
4,254
|
|
|
3,892
|
|
|||
Deferred and Noncurrent Income Taxes - Net
|
10,392
|
|
|
10,082
|
|
|
55,789
|
|
|||
Environmental Remediation Costs - Net of Recoveries
|
(59,307
|
)
|
|
(39,860
|
)
|
|
(39,731
|
)
|
|||
Gas Plant Cost of Removal
|
(11,184
|
)
|
|
(7,062
|
)
|
|
(6,070
|
)
|
|||
Pension Contribution
|
—
|
|
|
(10,000
|
)
|
|
—
|
|
|||
Changes in:
|
|
|
|
|
|
||||||
Accounts Receivable
|
(106,283
|
)
|
|
21
|
|
|
(67,160
|
)
|
|||
Inventories
|
566
|
|
|
5,589
|
|
|
387
|
|
|||
Prepaid and Accrued Taxes - Net
|
13,418
|
|
|
(23,366
|
)
|
|
4,253
|
|
|||
Accounts Payable and Other Accrued Liabilities
|
114,371
|
|
|
58,858
|
|
|
112,199
|
|
|||
Derivatives - Energy Related
|
5,208
|
|
|
899
|
|
|
6,723
|
|
|||
Other Assets and Liabilities
|
(26,999
|
)
|
|
(6,989
|
)
|
|
4,477
|
|
|||
Cash Flows from Discontinued Operations
|
7
|
|
|
(4
|
)
|
|
(44
|
)
|
|||
|
|
|
|
|
|
||||||
Net Cash Provided by Operating Activities
|
143,583
|
|
|
190,321
|
|
|
262,627
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
||||
Capital Expenditures
|
(341,120
|
)
|
|
(272,965
|
)
|
|
(279,423
|
)
|
|||
Cash Paid for Acquisition, Net of Cash Acquired
|
(1,740,285
|
)
|
|
—
|
|
|
—
|
|
|||
Cash Paid for Purchase of New Contract
|
(11,339
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from Sale of Property, Plant and Equipment
|
310,644
|
|
|
3,547
|
|
|
—
|
|
|||
Investment in Long-Term Receivables
|
(8,643
|
)
|
|
(9,324
|
)
|
|
(10,886
|
)
|
|||
Proceeds from Long-Term Receivables
|
9,813
|
|
|
9,861
|
|
|
10,014
|
|
|||
Notes Receivable
|
—
|
|
|
22,884
|
|
|
9,916
|
|
|||
Purchase of Company-Owned Life Insurance
|
(1,298
|
)
|
|
(9,180
|
)
|
|
(2,398
|
)
|
|||
Investment in Affiliate
|
(9,524
|
)
|
|
(29,636
|
)
|
|
(12,943
|
)
|
|||
Return of Investment in Affiliate
|
—
|
|
|
—
|
|
|
4,750
|
|
|||
Advances on Notes Receivable - Affiliate
|
—
|
|
|
(2,451
|
)
|
|
—
|
|
|||
Net Repayment of Notes Receivable - Affiliate
|
2,967
|
|
|
—
|
|
|
672
|
|
|||
|
|
|
|
|
|
||||||
Net Cash Used in Investing Activities
|
(1,788,785
|
)
|
|
(287,264
|
)
|
|
(280,298
|
)
|
|
South Jersey Industries, Inc. and Subsidiaries
|
||||||
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Property, Plant and Equipment:
|
|
|
|
||||
Utility Plant, at original cost
|
$
|
4,341,113
|
|
|
$
|
2,652,244
|
|
Accumulated Depreciation
|
(787,243
|
)
|
|
(498,161
|
)
|
||
Nonutility Property and Equipment, at cost
|
152,232
|
|
|
741,027
|
|
||
Accumulated Depreciation
|
(52,629
|
)
|
|
(194,913
|
)
|
||
|
|
|
|
||||
Property, Plant and Equipment - Net
|
3,653,473
|
|
|
2,700,197
|
|
||
|
|
|
|
||||
Investments:
|
|
|
|
|
|
||
Available-for-Sale Securities
|
41
|
|
|
36
|
|
||
Restricted
|
1,649
|
|
|
31,876
|
|
||
Investment in Affiliates
|
76,122
|
|
|
62,292
|
|
||
|
|
|
|
||||
Total Investments
|
77,812
|
|
|
94,204
|
|
||
|
|
|
|
||||
Current Assets:
|
|
|
|
|
|
||
Cash and Cash Equivalents
|
30,030
|
|
|
7,819
|
|
||
Accounts Receivable
|
337,502
|
|
|
202,379
|
|
||
Unbilled Revenues
|
79,538
|
|
|
73,377
|
|
||
Provision for Uncollectibles
|
(18,842
|
)
|
|
(13,988
|
)
|
||
Notes Receivable - Affiliate
|
1,945
|
|
|
4,913
|
|
||
Natural Gas in Storage, average cost
|
60,425
|
|
|
48,513
|
|
||
Materials and Supplies, average cost
|
1,743
|
|
|
4,239
|
|
||
Prepaid Taxes
|
30,694
|
|
|
41,355
|
|
||
Derivatives - Energy Related Assets
|
54,021
|
|
|
42,139
|
|
||
Assets Held For Sale
|
59,588
|
|
|
—
|
|
||
Other Prepayments and Current Assets
|
26,548
|
|
|
28,247
|
|
||
|
|
|
|
||||
Total Current Assets
|
663,192
|
|
|
438,993
|
|
||
|
|
|
|
||||
Regulatory and Other Noncurrent Assets:
|
|
|
|
|
|
||
Regulatory Assets
|
662,969
|
|
|
469,224
|
|
||
Derivatives - Energy Related Assets
|
7,169
|
|
|
5,988
|
|
||
Notes Receivable - Affiliate
|
13,275
|
|
|
13,275
|
|
||
Contract Receivables
|
27,961
|
|
|
28,721
|
|
||
Goodwill
|
734,607
|
|
|
3,578
|
|
||
Other (See Note 1)
|
116,119
|
|
|
110,906
|
|
||
|
|
|
|
||||
Total Regulatory and Other Noncurrent Assets
|
1,562,100
|
|
|
631,692
|
|
||
|
|
|
|
||||
Total Assets
|
$
|
5,956,577
|
|
|
$
|
3,865,086
|
|
|
2018
|
|
2017
|
||||
Capitalization and Liabilities
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common Stock: Par Value $1.25 per share; Authorized 120,000,000 shares; Outstanding Shares: 85,506,218 (2018) and 79,549,080 (2017)
|
|
|
|
|
|
||
Balance at Beginning of Year
|
$
|
99,436
|
|
|
$
|
99,347
|
|
Common Stock Issued or Granted Under Stock Plans
|
7,447
|
|
|
89
|
|
||
Balance at End of Year
|
106,883
|
|
|
99,436
|
|
||
Premium on Common Stock
|
843,268
|
|
|
709,658
|
|
||
Treasury Stock (at par)
|
(292
|
)
|
|
(271
|
)
|
||
Accumulated Other Comprehensive Loss
|
(26,095
|
)
|
|
(36,765
|
)
|
||
Retained Earnings
|
343,258
|
|
|
420,351
|
|
||
|
|
|
|
||||
Total Equity
|
1,267,022
|
|
|
1,192,409
|
|
||
|
|
|
|
||||
Long-Term Debt
|
2,106,863
|
|
|
1,122,999
|
|
||
|
|
|
|
||||
Total Capitalization
|
3,373,885
|
|
|
2,315,408
|
|
||
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
|
||
Notes Payable
|
270,500
|
|
|
346,400
|
|
||
Current Portion of Long-Term Debt
|
733,909
|
|
|
63,809
|
|
||
Accounts Payable
|
410,463
|
|
|
284,899
|
|
||
Customer Deposits and Credit Balances
|
32,058
|
|
|
43,398
|
|
||
Environmental Remediation Costs
|
47,592
|
|
|
66,372
|
|
||
Taxes Accrued
|
5,881
|
|
|
2,932
|
|
||
Derivatives - Energy Related Liabilities
|
24,134
|
|
|
46,938
|
|
||
Derivatives - Other Current
|
588
|
|
|
748
|
|
||
Deferred Contract Revenues
|
1,772
|
|
|
259
|
|
||
Interest Accrued
|
14,208
|
|
|
9,079
|
|
||
Pension Benefits
|
3,631
|
|
|
2,388
|
|
||
Other Current Liabilities
|
36,102
|
|
|
15,860
|
|
||
|
|
|
|
||||
Total Current Liabilities
|
1,580,838
|
|
|
883,082
|
|
||
|
|
|
|
||||
Deferred Credits and Other Noncurrent Liabilities:
|
|
|
|
|
|
||
Deferred Income Taxes - Net
|
85,836
|
|
|
86,884
|
|
||
Pension and Other Postretirement Benefits
|
110,112
|
|
|
101,544
|
|
||
Environmental Remediation Costs
|
206,058
|
|
|
106,483
|
|
||
Asset Retirement Obligations
|
80,163
|
|
|
59,497
|
|
||
Derivatives - Energy Related Liabilities
|
7,256
|
|
|
6,025
|
|
||
Derivatives - Other Noncurrent
|
7,285
|
|
|
9,622
|
|
||
Regulatory Liabilities
|
478,499
|
|
|
287,105
|
|
||
Other
|
26,645
|
|
|
9,436
|
|
||
|
|
|
|
||||
Total Deferred Credits and Other Noncurrent Liabilities
|
1,001,854
|
|
|
666,596
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 15)
|
|
|
|
|
|
||
|
|
|
|
||||
Total Capitalization and Liabilities
|
$
|
5,956,577
|
|
|
$
|
3,865,086
|
|
|
South Jersey Industries, Inc. and Subsidiaries
|
|||||||||||||||||||||||
|
Years Ended December 31, 2016, 2017 and 2018
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Common Stock
|
|
Premium on Common Stock
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at January 1, 2016
|
|
$
|
88,707
|
|
|
$
|
499,460
|
|
|
$
|
(296
|
)
|
|
$
|
(24,499
|
)
|
|
$
|
474,167
|
|
|
$
|
1,037,539
|
|
Net Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118,810
|
|
|
118,810
|
|
||||||
Other Comprehensive Loss, Net of Tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,882
|
)
|
|
—
|
|
|
(2,882
|
)
|
||||||
Common Stock Issued or Granted Through Equity Offering or Stock Plans
|
|
10,640
|
|
|
207,483
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
218,153
|
|
||||||
Cash Dividends Declared - Common Stock ($1.07 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(82,380
|
)
|
|
(82,380
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2016
|
|
99,347
|
|
|
706,943
|
|
|
(266
|
)
|
|
(27,381
|
)
|
|
510,597
|
|
|
1,289,240
|
|
||||||
Net Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,490
|
)
|
|
(3,490
|
)
|
||||||
Other Comprehensive Loss, Net of Tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,384
|
)
|
|
—
|
|
|
(9,384
|
)
|
||||||
Common Stock Issued or Granted Under Stock Plans
|
|
89
|
|
|
2,715
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
2,799
|
|
||||||
Cash Dividends Declared - Common Stock ($1.10 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,308
|
)
|
|
(87,308
|
)
|
||||||
Excess Tax Benefit on Restricted Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
552
|
|
|
552
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2017
|
|
99,436
|
|
|
709,658
|
|
|
(271
|
)
|
|
(36,765
|
)
|
|
420,351
|
|
|
1,192,409
|
|
||||||
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,663
|
|
|
17,663
|
|
||||||
Other Comprehensive Loss, Net of Tax
|
|
|
|
|
|
|
|
|
|
|
10,670
|
|
|
|
|
|
10,670
|
|
||||||
Common Stock Issued or Granted Through Equity Offering or Stock Plans
|
|
7,447
|
|
|
133,610
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
141,036
|
|
||||||
Cash Dividends Declared - Common Stock ($1.13 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(94,756
|
)
|
|
(94,756
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2018
|
|
$
|
106,883
|
|
|
$
|
843,268
|
|
|
$
|
(292
|
)
|
|
$
|
(26,095
|
)
|
|
$
|
343,258
|
|
|
$
|
1,267,022
|
|
|
|
Postretirement
Liability
Adjustment (A)
|
|
Unrealized Gain
(Loss) on
Derivatives-Other (B)
|
|
Unrealized Gain
(Loss) on Available-
for-Sale Securities (B)
|
|
Other
Comprehensive
Income (Loss) of
Affiliated
Companies (B)
|
|
Accumulated
Other
Comprehensive
Loss
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at January 1, 2016
|
|
$
|
(22,145
|
)
|
|
$
|
(2,129
|
)
|
|
$
|
(128
|
)
|
|
$
|
(97
|
)
|
|
$
|
(24,499
|
)
|
Changes During Year
|
|
(3,197
|
)
|
|
197
|
|
|
118
|
|
|
—
|
|
|
(2,882
|
)
|
|||||
Balance at December 31, 2016
|
|
(25,342
|
)
|
|
(1,932
|
)
|
|
(10
|
)
|
|
(97
|
)
|
|
(27,381
|
)
|
|||||
Changes During Year
|
|
(10,920
|
)
|
|
1,536
|
|
|
—
|
|
|
—
|
|
|
(9,384
|
)
|
|||||
Balance at December 31, 2017
|
|
(36,262
|
)
|
|
(396
|
)
|
|
(10
|
)
|
|
(97
|
)
|
|
(36,765
|
)
|
|||||
Changes During Year
|
|
10,636
|
|
|
34
|
|
|
|
|
|
|
|
|
10,670
|
|
|||||
Balance at December 31, 2018
|
|
$
|
(25,626
|
)
|
|
$
|
(362
|
)
|
|
$
|
(10
|
)
|
|
$
|
(97
|
)
|
|
$
|
(26,095
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Revenues
|
$
|
548,000
|
|
|
$
|
517,254
|
|
|
$
|
461,055
|
|
Operating Expenses:
|
|
|
|
|
|
|
|||||
Cost of Sales (Excluding depreciation and amortization)
|
209,649
|
|
|
204,432
|
|
|
174,390
|
|
|||
Operations (See Note 1)
|
112,920
|
|
|
96,604
|
|
|
93,012
|
|
|||
Maintenance
|
28,742
|
|
|
19,727
|
|
|
17,549
|
|
|||
Depreciation
|
59,755
|
|
|
53,887
|
|
|
47,432
|
|
|||
Energy and Other Taxes
|
4,246
|
|
|
3,729
|
|
|
3,620
|
|
|||
Total Operating Expenses
|
415,312
|
|
|
378,379
|
|
|
336,003
|
|
|||
Operating Income (See Note 1)
|
132,688
|
|
|
138,875
|
|
|
125,052
|
|
|||
Other Income and Expense (See Note 1)
|
4,685
|
|
|
4,087
|
|
|
1,234
|
|
|||
Interest Charges
|
(28,011
|
)
|
|
(24,705
|
)
|
|
(17,875
|
)
|
|||
Income Before Income Taxes
|
109,362
|
|
|
118,257
|
|
|
108,411
|
|
|||
Income Taxes
|
(26,413
|
)
|
|
(45,700
|
)
|
|
(39,366
|
)
|
|||
Net Income
|
$
|
82,949
|
|
|
$
|
72,557
|
|
|
$
|
69,045
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net Income
|
$
|
82,949
|
|
|
$
|
72,557
|
|
|
$
|
69,045
|
|
|
|
|
|
|
|
||||||
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Postretirement Liability Adjustment (A)
|
3,606
|
|
|
(11,090
|
)
|
|
(2,197
|
)
|
|||
Unrealized Gain on Available-for-Sale Securities (B)
|
—
|
|
|
—
|
|
|
98
|
|
|||
Unrealized Gain on Derivatives - Other (B)
|
34
|
|
|
27
|
|
|
27
|
|
|||
|
|
|
|
|
|
||||||
Other Comprehensive Income (Loss) - Net of Tax
|
3,640
|
|
|
(11,063
|
)
|
|
(2,072
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive Income
|
$
|
86,589
|
|
|
$
|
61,494
|
|
|
$
|
66,973
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net Income
|
$
|
82,949
|
|
|
$
|
72,557
|
|
|
$
|
69,045
|
|
Adjustments to Reconcile Income from Continuing Operations to Net Cash Provided by Operating Activities:
|
|
|
|
|
|
||||||
Depreciation and Amortization
|
82,622
|
|
|
71,654
|
|
|
63,901
|
|
|||
Provision for Losses on Accounts Receivable
|
7,997
|
|
|
6,949
|
|
|
6,993
|
|
|||
CIP Receivable/Payable
|
32,523
|
|
|
915
|
|
|
(24,943
|
)
|
|||
Deferred Gas Costs - Net of Recoveries
|
(46,495
|
)
|
|
(28,092
|
)
|
|
11,753
|
|
|||
Deferred SBC Costs - Net of Recoveries
|
311
|
|
|
(5,578
|
)
|
|
(7,102
|
)
|
|||
Environmental Remediation Costs - Net of Recoveries
|
(53,685
|
)
|
|
(39,860
|
)
|
|
(39,735
|
)
|
|||
Deferred and Noncurrent Income Taxes and Credits - Net
|
39,179
|
|
|
78,712
|
|
|
40,980
|
|
|||
Gas Plant Cost of Removal
|
(6,899
|
)
|
|
(7,062
|
)
|
|
(6,070
|
)
|
|||
Pension Contribution
|
—
|
|
|
(7,997
|
)
|
|
—
|
|
|||
Changes in:
|
|
|
|
|
|
||||||
Accounts Receivable
|
(21,749
|
)
|
|
(28,129
|
)
|
|
(24,867
|
)
|
|||
Inventories
|
(1,198
|
)
|
|
(3,222
|
)
|
|
2,696
|
|
|||
Prepaid and Accrued Taxes - Net
|
9,685
|
|
|
(20,993
|
)
|
|
3,980
|
|
|||
Other Prepayments and Current Assets
|
1,390
|
|
|
1,183
|
|
|
(448
|
)
|
|||
Gas Purchases Payable
|
5,149
|
|
|
19,526
|
|
|
14,879
|
|
|||
Accounts Payable and Other Accrued Liabilities
|
(15,194
|
)
|
|
(1,753
|
)
|
|
35,982
|
|
|||
Other Assets
|
(6,705
|
)
|
|
(16,925
|
)
|
|
(7,065
|
)
|
|||
Other Liabilities
|
3,094
|
|
|
14,784
|
|
|
2,183
|
|
|||
Net Cash Provided by Operating Activities
|
112,974
|
|
|
106,669
|
|
|
142,162
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|||
Capital Expenditures
|
(241,873
|
)
|
|
(248,864
|
)
|
|
(225,287
|
)
|
|||
Note Receivable
|
|
|
|
—
|
|
|
9,916
|
|
|||
Purchase of Company Owned Life Insurance
|
—
|
|
|
(4,875
|
)
|
|
—
|
|
|||
Investment in Long-Term Receivables
|
(8,643
|
)
|
|
(9,324
|
)
|
|
(10,886
|
)
|
|||
Proceeds from Long-Term Receivables
|
9,813
|
|
|
9,861
|
|
|
10,014
|
|
|||
Net Cash Used in Investing Activities
|
(240,703
|
)
|
|
(253,202
|
)
|
|
(216,243
|
)
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Net Borrowings from (Repayments of) Short-Term Credit Facilities
|
55,500
|
|
|
(52,300
|
)
|
|
(30,100
|
)
|
|||
Proceeds from Issuance of Long-Term Debt
|
310,000
|
|
|
400,000
|
|
|
61,000
|
|
|||
Principal Repayments of Long-Term Debt
|
(238,909
|
)
|
|
(215,909
|
)
|
|
(27,909
|
)
|
|||
Payments for Issuance of Long-Term Debt
|
(219
|
)
|
|
(2,030
|
)
|
|
(63
|
)
|
|||
Dividends on Common Stock
|
—
|
|
|
(20,000
|
)
|
|
—
|
|
|||
Additional Investment by Shareholder
|
—
|
|
|
40,000
|
|
|
65,000
|
|
|||
Net Cash Provided by Financing Activities
|
126,372
|
|
|
149,761
|
|
|
67,928
|
|
|||
|
|
|
|
|
|
||||||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash
|
(1,357
|
)
|
|
3,228
|
|
|
(6,153
|
)
|
|||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period (See Note 1)
|
4,619
|
|
|
1,391
|
|
|
7,544
|
|
|||
|
|
|
|
|
|
||||||
Cash, Cash Equivalents and Restricted Cash at End of Period (See Note 1)
|
$
|
3,262
|
|
|
$
|
4,619
|
|
|
$
|
1,391
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
|
|
|
|
|||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest (Net of Amounts Capitalized)
|
$
|
28,583
|
|
|
$
|
23,729
|
|
|
$
|
18,497
|
|
Income Taxes (Net of Refunds)
|
$
|
(21,742
|
)
|
|
$
|
(8,476
|
)
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
||||||
Supplemental Disclosures of Noncash Investing Activities
|
|
|
|
|
|
||||||
Capital Expenditures acquired on account but not paid at year-end
|
$
|
32,272
|
|
|
$
|
25,889
|
|
|
$
|
25,275
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
Property, Plant and Equipment:
|
|
|
|
||||
Utility Plant, at original cost
|
$
|
2,907,202
|
|
|
$
|
2,652,244
|
|
Accumulated Depreciation
|
(523,743
|
)
|
|
(498,161
|
)
|
||
|
|
|
|
||||
Property, Plant and Equipment - Net
|
2,383,459
|
|
|
2,154,083
|
|
||
|
|
|
|
||||
Investments:
|
|
|
|
|
|
||
Restricted Investments
|
1,278
|
|
|
2,912
|
|
||
|
|
|
|
||||
Total Investments
|
1,278
|
|
|
2,912
|
|
||
|
|
|
|
||||
Current Assets:
|
|
|
|
|
|
||
Cash and Cash Equivalents
|
1,984
|
|
|
1,707
|
|
||
Accounts Receivable
|
101,572
|
|
|
78,571
|
|
||
Accounts Receivable - Related Parties
|
2,442
|
|
|
988
|
|
||
Unbilled Revenues
|
43,271
|
|
|
54,980
|
|
||
Provision for Uncollectibles
|
(13,643
|
)
|
|
(13,799
|
)
|
||
Natural Gas in Storage, average cost
|
16,336
|
|
|
14,932
|
|
||
Materials and Supplies, average cost
|
619
|
|
|
825
|
|
||
Prepaid Taxes
|
28,772
|
|
|
38,326
|
|
||
Derivatives - Energy Related Assets
|
5,464
|
|
|
7,327
|
|
||
Other Prepayments and Current Assets
|
11,280
|
|
|
12,670
|
|
||
|
|
|
|
||||
Total Current Assets
|
198,097
|
|
|
196,527
|
|
||
|
|
|
|
||||
Regulatory and Other Noncurrent Assets:
|
|
|
|
||||
Regulatory Assets
|
492,365
|
|
|
469,224
|
|
||
Long-Term Receivables
|
25,531
|
|
|
25,851
|
|
||
Derivatives - Energy Related Assets
|
15
|
|
|
5
|
|
||
Other
|
17,491
|
|
|
17,372
|
|
||
|
|
|
|
|
|||
Total Regulatory and Other Noncurrent Assets
|
535,402
|
|
|
512,452
|
|
||
|
|
|
|
||||
Total Assets
|
$
|
3,118,236
|
|
|
$
|
2,865,974
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Capitalization and Liabilities
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common Stock, Par Value $2.50 per share:
|
|
|
|
||||
Authorized - 4,000,000 shares
|
|
|
|
||||
Outstanding - 2,339,139 shares
|
$
|
5,848
|
|
|
$
|
5,848
|
|
Other Paid-In Capital and Premium on Common Stock
|
355,744
|
|
|
355,744
|
|
||
Accumulated Other Comprehensive Loss
|
(22,357
|
)
|
|
(25,997
|
)
|
||
Retained Earnings
|
668,787
|
|
|
585,838
|
|
||
|
|
|
|
||||
Total Equity
|
1,008,022
|
|
|
921,433
|
|
||
|
|
|
|
||||
Long-Term Debt
|
874,507
|
|
|
758,052
|
|
||
|
|
|
|
||||
Total Capitalization
|
1,882,529
|
|
|
1,679,485
|
|
||
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Notes Payable
|
107,500
|
|
|
52,000
|
|
||
Current Portion of Long-Term Debt
|
18,909
|
|
|
63,809
|
|
||
Accounts Payable - Commodity
|
48,490
|
|
|
43,341
|
|
||
Accounts Payable - Other
|
52,966
|
|
|
41,365
|
|
||
Accounts Payable - Related Parties
|
12,563
|
|
|
17,029
|
|
||
Derivatives - Energy Related Liabilities
|
2,146
|
|
|
9,270
|
|
||
Derivatives - Other Current
|
343
|
|
|
389
|
|
||
Customer Deposits and Credit Balances
|
23,862
|
|
|
41,656
|
|
||
Environmental Remediation Costs
|
33,022
|
|
|
66,040
|
|
||
Taxes Accrued
|
1,891
|
|
|
1,760
|
|
||
Pension Benefits
|
3,597
|
|
|
2,353
|
|
||
Interest Accrued
|
7,134
|
|
|
7,615
|
|
||
Other Current Liabilities
|
9,444
|
|
|
7,027
|
|
||
|
|
|
|
||||
Total Current Liabilities
|
321,867
|
|
|
353,654
|
|
||
|
|
|
|
||||
Regulatory and Other Noncurrent Liabilities:
|
|
|
|
|
|
||
Regulatory Liabilities
|
286,539
|
|
|
287,105
|
|
||
Deferred Income Taxes - Net
|
325,886
|
|
|
280,746
|
|
||
Environmental Remediation Costs
|
115,049
|
|
|
105,656
|
|
||
Asset Retirement Obligations
|
79,890
|
|
|
58,714
|
|
||
Pension and Other Postretirement Benefits
|
96,053
|
|
|
88,871
|
|
||
Derivatives - Energy Related Liabilities
|
43
|
|
|
170
|
|
||
Derivatives - Other Noncurrent
|
5,524
|
|
|
6,639
|
|
||
Other
|
4,856
|
|
|
4,934
|
|
||
|
|
|
|
||||
Total Regulatory and Other Noncurrent Liabilities
|
913,840
|
|
|
832,835
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 15)
|
|
|
|
||||
|
|
|
|
||||
Total Capitalization and Liabilities
|
$
|
3,118,236
|
|
|
$
|
2,865,974
|
|
|
Common Stock
|
|
Other Paid-In Capital and Premium on Common Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings
|
|
Total
|
||||||||||
Balance at January 1, 2016
|
$
|
5,848
|
|
|
$
|
250,827
|
|
|
$
|
(12,862
|
)
|
|
$
|
464,114
|
|
|
707,927
|
|
|
Net Income
|
|
|
|
|
|
|
|
|
|
$
|
69,045
|
|
|
69,045
|
|
||||
Other Comprehensive Loss, Net of Tax
|
|
|
|
|
|
|
(2,072
|
)
|
|
|
|
|
(2,072
|
)
|
|||||
Additional Investment by Shareholder
|
|
|
65,000
|
|
|
|
|
|
|
65,000
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2016
|
5,848
|
|
|
315,827
|
|
|
(14,934
|
)
|
|
533,159
|
|
|
839,900
|
|
|||||
Net Income
|
|
|
|
|
|
|
72,557
|
|
|
72,557
|
|
||||||||
Other Comprehensive Loss, Net of Tax
|
|
|
|
|
(11,063
|
)
|
|
|
|
(11,063
|
)
|
||||||||
Cash Dividends Declared – Common Stock
|
|
|
|
|
|
|
(20,000
|
)
|
|
(20,000
|
)
|
||||||||
Additional Investment by Shareholder
|
|
|
40,000
|
|
|
|
|
|
|
40,000
|
|
||||||||
Excess Tax Benefit - See Note 1
|
|
|
—
|
|
|
|
|
122
|
|
|
122
|
|
|||||||
Tax Deficiency from Restricted Stock Plan
|
|
|
(83
|
)
|
|
|
|
—
|
|
|
(83
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2017
|
5,848
|
|
|
355,744
|
|
|
(25,997
|
)
|
|
585,838
|
|
|
921,433
|
|
|||||
Net Income
|
|
|
|
|
|
|
82,949
|
|
|
82,949
|
|
||||||||
Other Comprehensive Loss, Net of Tax
|
|
|
|
|
3,640
|
|
|
|
|
3,640
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2018
|
$
|
5,848
|
|
|
$
|
355,744
|
|
|
$
|
(22,357
|
)
|
|
$
|
668,787
|
|
|
$
|
1,008,022
|
|
|
Postretirement Liability Adjustment (A)
|
|
Unrealized Gain (Loss) on Available-for-Sale Securities (B)
|
|
Unrealized Gain (Loss) on Derivatives (B)
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||
Balance at January 1, 2016
|
$
|
(12,220
|
)
|
|
$
|
(98
|
)
|
|
$
|
(544
|
)
|
|
$
|
(12,862
|
)
|
Changes During Year
|
(2,197
|
)
|
|
98
|
|
|
27
|
|
|
(2,072
|
)
|
||||
Balance at December 31, 2016
|
(14,417
|
)
|
|
—
|
|
|
(517
|
)
|
|
(14,934
|
)
|
||||
Changes During Year
|
(11,090
|
)
|
|
—
|
|
|
27
|
|
|
(11,063
|
)
|
||||
Balance at December 31, 2017
|
(25,507
|
)
|
|
—
|
|
|
(490
|
)
|
|
(25,997
|
)
|
||||
Changes During Year
|
3,606
|
|
|
|
|
|
34
|
|
|
3,640
|
|
||||
Balance at December 31, 2018
|
$
|
(21,901
|
)
|
|
$
|
—
|
|
|
$
|
(456
|
)
|
|
$
|
(22,357
|
)
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
|
▪
|
SJIU is a holding company that owns SJG, and as of July 1, 2018, ETG and ELK (see "Acquisition" below).
|
*
|
SJG is a regulated natural gas utility which distributes natural gas in the
seven
southernmost counties of New Jersey.
|
*
|
ETG is a regulated natural gas utility which distributes natural gas in
seven
counties in northern and central New Jersey.
|
*
|
ELK is a regulated natural gas utility which distributes natural gas in northern Maryland.
|
▪
|
SJE acquires and markets electricity to retail end users. SJE previously acquired and marketed natural gas and provided total energy management services to commercial, industrial and residential customers. In November 2018, the Company sold SJE's retail gas businesses.
|
▪
|
SJRG markets natural gas storage, commodity and transportation assets along with fuel management services on a wholesale basis in the mid-Atlantic, Appalachian and southern states.
|
▪
|
SJEX owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania.
|
▪
|
Marina develops and operates on-site energy-related projects. The significant wholly-owned subsidiaries of Marina include:
|
•
|
ACB, which owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey.
|
•
|
ACLE, BCLE, SCLE and SXLE, which owns and operates landfill gas-to-energy production facilities in Atlantic, Burlington, Salem and Sussex Counties in New Jersey.
|
•
|
MCS, NBS and SBS, which owned and operated solar-generation sites located in New Jersey. These entities were sold in October 2018.
|
▪
|
SJESP
receives commissions on service contracts from a third party.
|
•
|
Midstream invests in infrastructure and other midstream projects, including a current project to build an approximately
118
-mile natural gas pipeline in Pennsylvania and New Jersey.
|
|
|
2018
|
|
2017
|
||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
||||
AROs as of January 1,
|
|
$
|
59,497
|
|
|
$
|
59,427
|
|
Accretion
|
|
1,909
|
|
|
1,955
|
|
||
Additions
|
|
297
|
|
|
1,008
|
|
||
Settlements
|
|
(3,402
|
)
|
|
(2,893
|
)
|
||
Revisions in Estimated Cash Flows (A)
|
|
21,862
|
|
|
—
|
|
||
ARO's as of December 31,
|
|
$
|
80,163
|
|
|
$
|
59,497
|
|
|
|
|
|
|
||||
|
|
2018
|
|
2017
|
||||
SJG:
|
|
|
|
|
||||
AROs as of January 1,
|
|
$
|
58,714
|
|
|
$
|
58,674
|
|
Accretion
|
|
1,880
|
|
|
1,925
|
|
||
Additions
|
|
297
|
|
|
1,008
|
|
||
Settlements
|
|
(2,863
|
)
|
|
(2,893
|
)
|
||
Revisions in Estimated Cash Flows (A)
|
|
21,862
|
|
|
—
|
|
||
ARO's as of December 31,
|
|
$
|
79,890
|
|
|
$
|
58,714
|
|
|
|
SJI (includes SJG and all other consolidated subsidiaries):
|
|
SJG
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Utility Plant
|
|
|
|
|
|
|
|
|
||||||||
Production Plant
|
|
$
|
1,281
|
|
|
$
|
296
|
|
|
$
|
296
|
|
|
$
|
296
|
|
Storage Plant
|
|
92,769
|
|
|
61,909
|
|
|
61,996
|
|
|
61,909
|
|
||||
Transmission Plant
|
|
326,906
|
|
|
258,598
|
|
|
306,654
|
|
|
258,598
|
|
||||
Distribution Plant
|
|
3,466,101
|
|
|
2,044,421
|
|
|
2,212,831
|
|
|
2,044,421
|
|
||||
General Plant
|
|
303,219
|
|
|
175,599
|
|
|
241,095
|
|
|
175,599
|
|
||||
Other Plant
|
|
1,964
|
|
|
1,855
|
|
|
1,855
|
|
|
1,855
|
|
||||
Utility Plant In Service
|
|
4,192,240
|
|
|
2,542,678
|
|
|
2,824,727
|
|
|
2,542,678
|
|
||||
Construction Work In Progress
|
|
148,873
|
|
|
109,566
|
|
|
82,475
|
|
|
109,566
|
|
||||
Total Utility Plant
|
|
$
|
4,341,113
|
|
|
$
|
2,652,244
|
|
|
$
|
2,907,202
|
|
|
$
|
2,652,244
|
|
|
|
|
|
|
|
|
|
|
||||||||
Nonutility Property and Equipment
|
|
|
|
|
|
|
|
|
||||||||
Solar Assets (A)
|
|
$
|
—
|
|
|
$
|
582,379
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cogeneration Assets
|
|
126,228
|
|
|
125,614
|
|
|
—
|
|
|
—
|
|
||||
Other Assets
|
|
26,004
|
|
|
33,034
|
|
|
—
|
|
|
—
|
|
||||
Total Nonutility Property and Equipment
|
|
$
|
152,232
|
|
|
$
|
741,027
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Natural Gas in Storage
|
|
$
|
9,685
|
|
Intangible Asset
|
|
19,200
|
|
|
Profit Sharing - Other Liabilities
|
|
(17,546
|
)
|
|
Total Consideration
|
|
$
|
11,339
|
|
•
|
In March 2016, the FASB issued ASU 2016-08,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)
. This standard improves the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis.
|
•
|
In April 2016, the FASB issued ASU 2016-10,
Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing
. This standard clarifies identifying performance obligations and the licensing implementation guidance.
|
•
|
In May 2016, the FASB issued ASU 2016-12,
Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients
. This standard provides additional guidance on (a) the objective of the collectibility criterion, (b) the presentation of sales tax collected from customers, (c) the measurement date of non-cash consideration received, (d) practical expedients in respect of contract modifications and completed contracts at transition, and (e) disclosure of the effects of the accounting change in the period of adoption.
|
•
|
In December 2016, the FASB issued ASU No. 2016-20,
Technical Corrections and Improvements to (Topic 606), Revenue from Contracts with Customers
, which amends certain narrow aspects of the guidance, including the disclosure of remaining performance obligations and prior-period performance obligations, as well as other amendments to the guidance on loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples.
|
•
|
In January 2018, the FASB issued an amendment to clarify the application of the new lease guidance to land easements and provided relief concerning adoption efforts for existing land easements that are not accounted for as leases under current GAAP.
|
•
|
In July 2018, the FASB issued ASU 2018-10 and 2018-11, which included a number of technical corrections and improvements to this standard, including an additional option for transition. The guidance initially required a modified retrospective transition method of adoption, under which lessees and lessors were to recognize and measure leases at the beginning of the earliest period presented. The additional, optional transition method allows an entity to initially apply the requirements of the lease standard at the adoption date, and avoid restating the comparative periods.
|
•
|
In December 2018, the FASB issued ASU 2018-20,
Narrow-Scope Improvements for Lessors
. The amendments in this ASU permit lessors, as an accounting policy election, to not evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. A lessor making this election will exclude from the consideration in the contract all collections from lessees of taxes within the scope of the election and will provide certain disclosures. The amendments in this ASU related to certain lessor costs also require lessors to exclude from variable payments, and therefore revenue, lessor costs paid by lessees directly to third parties, and require lessors to account for costs excluded from the consideration of a contract that are paid by the lessor and reimbursed by the lessee as variable payments, and record those reimbursed costs as revenue. Lastly, the amendments in this ASU related to recognizing variable payments for contracts with lease and nonlease components require lessors to allocate (rather than recognize as currently required) certain variable payments to the lease and nonlease components when the changes in facts and circumstances on which the variable payment is based occur.
|
2.
|
STOCK-BASED COMPENSATION PLAN:
|
|
Grants
|
|
Shares Outstanding
|
|
Fair Value Per Share
|
|
Expected Volatility
|
|
Risk-Free Interest Rate
|
|||||
Officers & Key Employees -
|
2016 - TSR
|
|
50,531
|
|
|
$
|
22.53
|
|
|
18.1
|
%
|
|
1.31
|
%
|
|
2016 - CEGR, Time
|
|
63,747
|
|
|
23.52
|
|
|
N/A
|
|
|
N/A
|
|
|
|
2017 - TSR
|
|
43,615
|
|
|
$
|
32.17
|
|
|
20.8
|
%
|
|
1.47
|
%
|
|
2017 - CEGR, Time
|
|
71,796
|
|
|
$
|
33.69
|
|
|
N/A
|
|
|
N/A
|
|
|
2018 - TSR
|
|
59,973
|
|
|
$
|
31.05
|
|
|
21.9
|
%
|
|
2.00
|
%
|
|
2018 - CEGR, Time
|
|
122,147
|
|
|
$
|
31.23
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Directors -
|
2018
|
|
26,416
|
|
|
$
|
31.16
|
|
|
N/A
|
|
|
N/A
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Officers & Key Employees
|
$
|
3,321
|
|
|
$
|
3,232
|
|
|
$
|
3,051
|
|
Directors
|
823
|
|
|
1,022
|
|
|
841
|
|
|||
Total Cost
|
4,144
|
|
|
4,254
|
|
|
3,892
|
|
|||
|
|
|
|
|
|
||||||
Capitalized
|
(386
|
)
|
|
(288
|
)
|
|
(385
|
)
|
|||
Net Expense
|
$
|
3,758
|
|
|
$
|
3,966
|
|
|
$
|
3,507
|
|
|
Officers & Other Key Employees
|
|
Directors
|
|
Weighted
Average
Fair Value
|
||||
Nonvested Shares Outstanding, January 1, 2018
|
342,793
|
|
|
30,394
|
|
|
$
|
28.60
|
|
Granted
|
201,858
|
|
|
26,416
|
|
|
$
|
31.17
|
|
Vested
|
(44,902
|
)
|
|
(30,394
|
)
|
|
$
|
26.24
|
|
Cancelled/Forfeited
|
(87,940
|
)
|
|
—
|
|
|
$
|
28.75
|
|
Nonvested Shares Outstanding, December 31, 2018
|
411,809
|
|
|
26,416
|
|
|
|
|
3.
|
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED-PARTY TRANSACTIONS:
|
|
2018
|
|
2017
|
|
2016
|
||||||
Loss before Income Taxes:
|
|
|
|
|
|
||||||
Sand Mining
|
$
|
(118
|
)
|
|
$
|
(84
|
)
|
|
$
|
(205
|
)
|
Fuel Oil
|
(184
|
)
|
|
(175
|
)
|
|
(179
|
)
|
|||
Income Tax Benefits
|
62
|
|
|
173
|
|
|
133
|
|
|||
Loss from Discontinued Operations — Net
|
$
|
(240
|
)
|
|
$
|
(86
|
)
|
|
$
|
(251
|
)
|
Earnings Per Common Share from
|
|
|
|
|
|
|
|||||
Discontinued Operations — Net:
|
|
|
|
|
|
|
|||||
Basic and Diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
SJE - Prior to the sale of SJE's retail gas business (see Note 1), for SJE’s commercial customers for which SJG performed billing services, SJG purchased the related accounts receivable at book value and charged them a purchase of receivable fee for potential uncollectible accounts, and assumed all risk associated with collection.
|
•
|
SJRG - SJG sells natural gas for resale and capacity release to SJRG and also meets some of SJG's gas purchasing requirements by purchasing natural gas from SJRG.
|
•
|
Marina - SJG provides natural gas transportation services to Marina under BPU-approved tariffs.
|
•
|
Millennium - Reads SJG's utility customers’ meters on a monthly basis for a fee.
|
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Revenues/Affiliates:
|
|
|
|
|
|
||||||
SJRG
|
$
|
5,813
|
|
|
$
|
4,458
|
|
|
$
|
6,934
|
|
Marina
|
379
|
|
|
314
|
|
|
302
|
|
|||
Other
|
91
|
|
|
86
|
|
|
83
|
|
|||
Total Operating Revenues/Affiliates
|
$
|
6,283
|
|
|
$
|
4,858
|
|
|
$
|
7,319
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Costs of Sales/Affiliates (Excluding depreciation and amortization)
|
|
|
|
|
|
||||||
SJRG*
|
$
|
33,313
|
|
|
$
|
24,337
|
|
|
$
|
16,306
|
|
|
|
|
|
|
|
||||||
Operations Expense/Affiliates:
|
|
|
|
|
|
||||||
SJI
|
$
|
31,740
|
|
|
$
|
22,154
|
|
|
$
|
20,296
|
|
Millennium
|
2,920
|
|
|
2,856
|
|
|
2,803
|
|
|||
Other
|
(569
|
)
|
|
(653
|
)
|
|
(198
|
)
|
|||
Total Operations Expense/Affiliates
|
$
|
34,091
|
|
|
$
|
24,357
|
|
|
$
|
22,901
|
|
4.
|
INCOME TAXES:
|
Federal
|
|
$
|
(12,766
|
)
|
|
$
|
(33,012
|
)
|
|
$
|
—
|
|
State
|
|
—
|
|
|
—
|
|
|
(1,614
|
)
|
|||
Total Current
|
|
(12,766
|
)
|
|
(33,012
|
)
|
|
(1,614
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
32,571
|
|
|
69,550
|
|
|
33,064
|
|
|||
State
|
|
6,608
|
|
|
9,162
|
|
|
7,916
|
|
|||
Total Deferred
|
|
39,179
|
|
|
78,712
|
|
|
40,980
|
|
|||
Total Income Tax Expense
|
|
$
|
26,413
|
|
|
$
|
45,700
|
|
|
$
|
39,366
|
|
SJI (includes SJG and all other consolidated subsidiaries):
|
|
2018
|
|
2017
|
||||
Deferred Tax Assets:
|
|
|
|
|
||||
Net Operating Loss Carryforward
|
|
$
|
125,418
|
|
|
$
|
152,541
|
|
Investment and Other Tax Credits
|
|
214,698
|
|
|
214,605
|
|
||
Derivatives / Unrealized Loss
|
|
—
|
|
|
2,068
|
|
||
Conservation Incentive Program
|
|
1,701
|
|
|
—
|
|
||
Deferred State Tax
|
|
16,087
|
|
|
16,905
|
|
||
Income Taxes Recoverable Through Rates
|
|
103,434
|
|
|
76,426
|
|
||
Pension & Other Post Retirement Benefits
|
|
16,560
|
|
|
16,624
|
|
||
Deferred Revenues
|
|
5,736
|
|
|
5,726
|
|
||
Provision for Uncollectibles
|
|
5,319
|
|
|
3,854
|
|
||
Other
|
|
4,639
|
|
|
1,949
|
|
||
Total Deferred Tax Asset
|
|
$
|
493,592
|
|
|
$
|
490,698
|
|
Deferred Tax Liabilities:
|
|
|
|
|
||||
Book versus Tax Basis of Property
|
|
$
|
458,772
|
|
|
$
|
486,854
|
|
Deferred Gas Costs - Net
|
|
25,812
|
|
|
10,254
|
|
||
Derivatives / Unrealized Gain
|
|
4,463
|
|
|
—
|
|
||
Environmental Remediation
|
|
20,250
|
|
|
31,393
|
|
||
Deferred Regulatory Costs
|
|
14,351
|
|
|
3,554
|
|
||
Budget Billing - Customer Accounts
|
|
4,550
|
|
|
4,043
|
|
||
Deferred Pension & Other Post Retirement Benefits
|
|
34,095
|
|
|
21,349
|
|
||
Conservation Incentive Program
|
|
—
|
|
|
7,721
|
|
||
Equity In Loss Of Affiliated Companies
|
|
1,417
|
|
|
1,377
|
|
||
Other
|
|
15,718
|
|
|
11,037
|
|
||
Total Deferred Tax Liability
|
|
$
|
579,428
|
|
|
$
|
577,582
|
|
Deferred Tax Liability - Net
|
|
$
|
85,836
|
|
|
$
|
86,884
|
|
|
|
|
|
|
||||
SJG:
|
|
|
|
|
||||
Deferred Tax Assets:
|
|
|
|
|
||||
Net Operating Loss and Tax Credits
|
|
$
|
60,986
|
|
|
$
|
73,785
|
|
Deferred State Tax
|
|
16,754
|
|
|
14,688
|
|
||
Provision for Uncollectibles
|
|
3,776
|
|
|
3,811
|
|
||
Conservation Incentive Program
|
|
1,701
|
|
|
—
|
|
||
Income Taxes Recoverable Through Rates
|
|
67,372
|
|
|
76,426
|
|
||
Pension & Other Post Retirement Benefits
|
|
16,699
|
|
|
15,031
|
|
||
Deferred Revenues
|
|
5,906
|
|
|
6,066
|
|
||
Other
|
|
2,599
|
|
|
2,413
|
|
||
Total Deferred Tax Assets
|
|
$
|
175,793
|
|
|
$
|
192,220
|
|
|
|
|
|
|
||||
Deferred Tax Liabilities:
|
|
|
|
|
||||
Book Versus Tax Basis of Property
|
|
$
|
395,371
|
|
|
$
|
386,642
|
|
Deferred Fuel Costs - Net
|
|
23,642
|
|
|
10,254
|
|
||
Environmental Remediation
|
|
40,753
|
|
|
31,637
|
|
||
Deferred Regulatory Costs
|
|
5,061
|
|
|
3,554
|
|
||
Deferred Pension & Other Post Retirement Benefits
|
|
21,870
|
|
|
21,349
|
|
||
Budget Billing - Customer Accounts
|
|
4,550
|
|
|
4,043
|
|
||
Section 461 Prepayments
|
|
1,081
|
|
|
866
|
|
||
Conservation Incentive Program
|
|
—
|
|
|
7,721
|
|
Other
|
|
9,351
|
|
|
6,900
|
|
||
Total Deferred Tax Liabilities
|
|
$
|
501,679
|
|
|
$
|
472,966
|
|
|
|
|
|
|
||||
Deferred Tax Liability - Net
|
|
$
|
325,886
|
|
|
$
|
280,746
|
|
Expire in:
|
|
Investment Tax Credit Carryforward
|
||
2030
|
|
$
|
11,628
|
|
2031
|
|
25,664
|
|
|
2032
|
|
32,031
|
|
|
2033
|
|
45,606
|
|
|
2034
|
|
37,699
|
|
|
2035
|
|
45,005
|
|
|
2036
|
|
11,744
|
|
|
2037
|
|
636
|
|
|
2038
|
|
93
|
|
|
|
|
$
|
210,106
|
|
SJI (includes SJG and all other consolidated subsidiaries):
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at January 1,
|
|
$
|
1,445
|
|
|
$
|
1,445
|
|
|
$
|
559
|
|
Increase as a result of tax positions taken in prior years
|
|
—
|
|
|
—
|
|
|
886
|
|
|||
Decrease in prior year positions
|
|
(298
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at December 31,
|
|
$
|
1,147
|
|
|
$
|
1,445
|
|
|
$
|
1,445
|
|
|
|
|
|
|
|
|
||||||
SJG:
|
|
|
|
|
|
|
||||||
Balance at January 1,
|
|
$
|
1,361
|
|
|
$
|
1,361
|
|
|
$
|
559
|
|
Increase as a result of tax position taken in prior years
|
|
—
|
|
|
—
|
|
|
802
|
|
|||
Decrease in prior year positions
|
|
(298
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at December 31,
|
|
$
|
1,063
|
|
|
$
|
1,361
|
|
|
$
|
1,361
|
|
5.
|
PREFERRED STOCK:
|
6.
|
COMMON STOCK:
|
|
2018
|
|
2017
|
|
2016
|
|||
Beginning of Year
|
79,549,080
|
|
|
79,478,055
|
|
|
70,965,622
|
|
New Issuances During Year:
|
|
|
|
|
|
|
||
Dividend Reinvestment Plan
|
—
|
|
|
—
|
|
|
417,095
|
|
Stock-Based Compensation Plan
|
67,308
|
|
|
71,025
|
|
|
45,338
|
|
Public Equity Offering
|
5,889,830
|
|
|
—
|
|
|
8,050,000
|
|
End of Year
|
85,506,218
|
|
|
79,549,080
|
|
|
79,478,055
|
|
•
|
SJI offered
12,669,491
shares of its common stock, par value
$1.25
per share, at a public offering price of
$29.50
per share. Of the offered shares,
5,889,830
shares were issued at closing, including
1,652,542
shares pursuant to the underwriters’ option. The gross proceeds from these shares was
$173.7 million
, with net proceeds, after deducting underwriting discounts and commissions, of
$167.7 million
. The remaining
6,779,661
shares of common stock ("Forward Shares") were to be sold by Bank of America, N.A., as forward seller, pursuant to a forward sale agreement. The Company received no proceeds from the sale of the Forward Shares in 2018. In January 2019, the Company settled the equity forward sale agreement; see Note 22.
|
•
|
SJI issued and sold
5,750,000
Equity Units, initially in the form of Corporate Units, which included
750,000
Corporate Units pursuant to the underwriters’ option. Each Corporate Unit has a stated amount of
$50
and is comprised of (a) a purchase contract obligating the holder to purchase from the Company, and for the Company to sell to the holder for a price in cash of
$50
, on the purchase contract settlement date, or April 15, 2021, subject to earlier termination or settlement, a certain number of shares of common stock; and (b) a
1/20, or 5%
, undivided beneficial ownership interest in
$1,000
principal amount of SJI’s 2018 Series A
3.70%
Remarketable Junior Subordinated Notes due 2031. SJI will pay the holder quarterly contract adjustment payments at a rate of
3.55%
per year on the stated amount of
$50
per Equity Unit, in respect of each purchase contract, subject to the Company's right to defer these payments. No deferral period will extend beyond the purchase contract settlement date. The contract adjustment payments are payable quarterly on January 15, April 15, July 15 and October 15 of each year (except that if such date is not a business day, contract adjustment payments will be payable on the following business day, without adjustment), commencing on July 15, 2018. The contract adjustment payments will be subordinated to all of the Company's existing and future “Priority Indebtedness” and will be structurally subordinated to all liabilities of our subsidiaries. The present value of the contract adjustment payments due through April 15, 2021 are initially charged to Shareholders’ Equity, with an offsetting credit to Other Current and Noncurrent Liabilities on the consolidated balance sheet. These liabilities are accreted over the life of the purchase contract by interest charges to the income statement based on a constant rate calculation. Subsequent contract adjustment payments reduce this liability. This offering resulted in gross proceeds of approximately
$287.5 million
, with net proceeds, after deducting underwriting discounts and commissions, of
$278.9 million
. As of December 31, 2018, the net proceeds, after amortization of the underwriting discounts, are recorded as Long-Term Debt on the consolidated balance sheets (see Note 14).
|
7.
|
FINANCIAL INSTRUMENTS:
|
|
|
As of December 31, 2018
|
|||||
Balance Sheet Line Item
|
|
SJI
|
SJG
|
||||
Cash and Cash Equivalents
|
|
30,030
|
|
1,984
|
|
||
Restricted Investments
|
|
1,649
|
|
1,278
|
|
||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows
|
|
$
|
31,679
|
|
$
|
3,262
|
|
|
|
As of December 31, 2017
|
|||||
Balance Sheet Line Item
|
|
SJI
|
SJG
|
||||
Cash and Cash Equivalents
|
|
7,819
|
|
1,707
|
|
||
Restricted Investments
|
|
31,876
|
|
2,912
|
|
||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows
|
|
$
|
39,695
|
|
$
|
4,619
|
|
•
|
For Long-Term Debt, in estimating the fair value, SJI and SJG use the present value of remaining cash flows at the balance sheet date. SJI and SJG based the estimates on interest rates available at the end of each period for debt with similar terms and maturities (Level 2 in the fair value hierarchy, see Note 17).
|
•
|
The estimated fair values of SJI's long-term debt (which includes SJG and all consolidated subsidiaries), including current maturities, as of
December 31, 2018
and
2017
, were
$2.91 billion
and
$1.22 billion
, respectively. The carrying amounts of SJI's long-term debt, including current maturities, as of
December 31, 2018
and
2017
, were
$2.84 billion
and
$1.19 billion
, respectively. The carrying amounts as of
December 31, 2018
and
2017
are net of unamortized debt issuance costs of
$27.0 million
and
$17.4 million
, respectively.
|
•
|
The estimated fair values of SJG's long-term debt, including current maturities, as of
December 31, 2018
and
2017
, were
$895.1 million
and
$838.5 million
, respectively. The carrying amount of SJG's long-term debt, including current maturities, as of
December 31, 2018
and
2017
, was
$893.4 million
and
$821.9 million
, respectively. The carrying amounts as of
December 31, 2018
and
2017
are net of unamortized debt issuance costs of
$6.8 million
and
$7.3 million
, respectively.
|
8.
|
SEGMENTS OF BUSINESS:
|
•
|
SJG utility operations consist primarily of natural gas distribution to residential, commercial and industrial customers in southern New Jersey.
|
•
|
ETG utility operations consist primarily of natural gas distribution to residential, commercial and industrial customers in northern and central New Jersey.
|
•
|
ELK utility operations consist of natural gas distribution to residential, commercial and industrial customers in Maryland.
|
•
|
Wholesale energy operations include the activities of SJRG and SJEX.
|
•
|
Retail gas and other operations at SJE included natural gas acquisition and transportation service business lines. This business was sold on November 30, 2018
(see Note 1).
|
•
|
Retail electric operations at SJE consist of electricity acquisition and transportation to commercial, industrial and residential customers.
|
•
|
On-site energy production consists of Marina's thermal energy facility and other energy-related projects. Also included in this segment are the activities of ACB, ACLE, BCLE, SCLE, SXLE, along with MCS, NBS and SBS, which were sold in October 2018
(see Note 1).
|
•
|
Appliance service operations includes SJESP, which
receives commissions on service contracts from a third party.
|
•
|
Midstream was formed to invest in infrastructure and other midstream projects, including a current project to build a natural gas pipeline in Pennsylvania and New Jersey.
|
•
|
Corporate & Services segment includes costs related to the Acquisition, along with other unallocated costs.
|
•
|
Intersegment represents intercompany transactions between the above SJI consolidated entities.
|
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Revenues:
|
|
|
|
|
|
||||||
SJI Utilities:
|
|
|
|
|
|
||||||
SJG Utility Operations
|
$
|
548,000
|
|
|
$
|
517,254
|
|
|
$
|
461,055
|
|
ETG Utility Operations
|
125,604
|
|
|
—
|
|
|
—
|
|
|||
ELK Utility Operations
|
3,302
|
|
|
—
|
|
|
—
|
|
|||
Subtotal SJI Utilities
|
676,906
|
|
|
517,254
|
|
|
461,055
|
|
|||
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
636,005
|
|
|
352,613
|
|
|
220,707
|
|
|||
Retail Gas and Other Operations
|
101,543
|
|
|
111,048
|
|
|
92,371
|
|
|||
Retail Electric Operations
|
176,945
|
|
|
179,534
|
|
|
182,540
|
|
|||
Subtotal Energy Group
|
914,493
|
|
|
643,195
|
|
|
495,618
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
72,374
|
|
|
99,517
|
|
|
94,375
|
|
|||
Appliance Service Operations
|
1,957
|
|
|
6,488
|
|
|
7,898
|
|
|||
Subtotal Energy Services
|
74,331
|
|
|
106,005
|
|
|
102,273
|
|
|||
Corporate & Services
|
51,000
|
|
|
45,024
|
|
|
35,147
|
|
|||
Subtotal
|
1,716,730
|
|
|
1,311,478
|
|
|
1,094,093
|
|
|||
Intersegment Sales
|
(75,392
|
)
|
|
(68,410
|
)
|
|
(57,593
|
)
|
|||
Total Operating Revenues
|
$
|
1,641,338
|
|
|
$
|
1,243,068
|
|
|
$
|
1,036,500
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Operating Income (See Note 1):
|
|
|
|
|
|
|
|
|
|||
SJI Utilities:
|
|
|
|
|
|
||||||
SJG Utility Operations
|
$
|
132,688
|
|
|
$
|
138,875
|
|
|
$
|
125,052
|
|
ETG Utility Operations
|
2,164
|
|
|
—
|
|
|
—
|
|
|||
ELK Utility Operations
|
(256
|
)
|
|
—
|
|
|
—
|
|
|||
Subtotal SJI Utilities
|
134,596
|
|
|
138,875
|
|
|
125,052
|
|
|||
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
87,895
|
|
|
(36,815
|
)
|
|
41,667
|
|
|||
Retail Gas and Other Operations
|
(8,721
|
)
|
|
(2,468
|
)
|
|
4,680
|
|
|||
Retail Electric Operations
|
(359
|
)
|
|
3,620
|
|
|
7,007
|
|
|||
Subtotal Energy Group
|
78,815
|
|
|
(35,663
|
)
|
|
53,354
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
(88,230
|
)
|
|
(83,654
|
)
|
|
13,301
|
|
|||
Appliance Service Operations
|
1,818
|
|
|
217
|
|
|
582
|
|
|||
Subtotal Energy Services
|
(86,412
|
)
|
|
(83,437
|
)
|
|
13,883
|
|
|||
Midstream
|
(292
|
)
|
|
—
|
|
|
—
|
|
|||
Corporate and Services
|
(25,962
|
)
|
|
(10,932
|
)
|
|
1,888
|
|
|||
Total Operating Income
|
$
|
100,745
|
|
|
$
|
8,843
|
|
|
$
|
194,177
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization:
|
|
|
|
|
|
|
|
|
|||
SJI Utilities:
|
|
|
|
|
|
||||||
SJG Utility Operations
|
$
|
82,622
|
|
|
$
|
71,654
|
|
|
$
|
63,901
|
|
ETG Utility Operations
|
13,580
|
|
|
—
|
|
|
—
|
|
|||
ELK Utility Operations
|
222
|
|
|
—
|
|
|
—
|
|
|||
Subtotal SJI Utilities
|
96,424
|
|
|
71,654
|
|
|
63,901
|
|
|||
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
105
|
|
|
125
|
|
|
484
|
|
|||
Retail Gas and Other Operations
|
279
|
|
|
323
|
|
|
337
|
|
|||
Subtotal Energy Group
|
384
|
|
|
448
|
|
|
821
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
23,123
|
|
|
46,928
|
|
|
43,395
|
|
|||
Appliance Service Operations
|
—
|
|
|
153
|
|
|
301
|
|
|||
Subtotal Energy Services
|
23,123
|
|
|
47,081
|
|
|
43,696
|
|
|||
Corporate and Services
|
12,983
|
|
|
4,303
|
|
|
1,400
|
|
|||
Total Depreciation and Amortization
|
$
|
132,914
|
|
|
$
|
123,486
|
|
|
$
|
109,818
|
|
|
|
|
|
|
|
||||||
Interest Charges (See Note 1):
|
|
|
|
|
|
|
|
|
|||
SJI Utilities:
|
|
|
|
|
|
||||||
SJG Utility Operations
|
$
|
28,011
|
|
|
$
|
24,705
|
|
|
$
|
17,875
|
|
ETG Utility Operations
|
10,478
|
|
|
—
|
|
|
—
|
|
|||
ELK Utility Operations
|
4
|
|
|
—
|
|
|
—
|
|
|||
Subtotal SJI Utilities
|
38,493
|
|
|
24,705
|
|
|
17,875
|
|
|||
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
—
|
|
|
3,150
|
|
|
—
|
|
|||
Retail Gas and Other Operations
|
487
|
|
|
250
|
|
|
350
|
|
|||
Subtotal Energy Group
|
487
|
|
|
3,400
|
|
|
350
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
15,364
|
|
|
16,838
|
|
|
11,961
|
|
Midstream
|
1,966
|
|
|
985
|
|
|
—
|
|
|||
Corporate and Services
|
54,107
|
|
|
23,819
|
|
|
12,118
|
|
|||
Subtotal
|
110,417
|
|
|
69,747
|
|
|
42,304
|
|
|||
Intersegment Borrowings
|
(20,121
|
)
|
|
(15,728
|
)
|
|
(10,855
|
)
|
|||
Total Interest Charges
|
$
|
90,296
|
|
|
$
|
54,019
|
|
|
$
|
31,449
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Income Taxes (See Note 1):
|
|
|
|
|
|
||||||
SJI Utilities:
|
|
|
|
|
|
||||||
SJG Utility Operations
|
$
|
26,413
|
|
|
$
|
45,700
|
|
|
$
|
39,366
|
|
ETG Utility Operations
|
(3,086
|
)
|
|
—
|
|
|
—
|
|
|||
ELK Utility Operations
|
(70
|
)
|
|
—
|
|
|
—
|
|
|||
Subtotal SJI Utilities
|
23,257
|
|
|
45,700
|
|
|
39,366
|
|
|||
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
22,473
|
|
|
(14,720
|
)
|
|
15,882
|
|
|||
Retail Gas and Other Operations
|
(2,360
|
)
|
|
(544
|
)
|
|
2,118
|
|
|||
Retail Electric Operations
|
(101
|
)
|
|
1,480
|
|
|
2,862
|
|
|||
Subtotal Energy Group
|
20,012
|
|
|
(13,784
|
)
|
|
20,862
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
(26,397
|
)
|
|
(39,262
|
)
|
|
(6,353
|
)
|
|||
Appliance Service Operations
|
534
|
|
|
4
|
|
|
232
|
|
|||
Subtotal Energy Services
|
(25,863
|
)
|
|
(39,258
|
)
|
|
(6,121
|
)
|
|||
Midstream
|
(190
|
)
|
|
(41
|
)
|
|
—
|
|
|||
Corporate and Services
|
(16,655
|
)
|
|
(17,554
|
)
|
|
44
|
|
|||
Total Income Taxes
|
$
|
561
|
|
|
$
|
(24,937
|
)
|
|
$
|
54,151
|
|
|
|
|
|
|
|
||||||
Property Additions:
|
|
|
|
|
|
||||||
SJI Utilities:
|
|
|
|
|
|
||||||
SJG Utility Operations
|
$
|
253,617
|
|
|
$
|
253,545
|
|
|
$
|
228,275
|
|
ETG Utility Operations
|
90,259
|
|
|
—
|
|
|
—
|
|
|||
ELK Utility Operations
|
1,820
|
|
|
—
|
|
|
—
|
|
|||
Subtotal SJI Utilities
|
345,696
|
|
|
253,545
|
|
|
228,275
|
|
|||
Energy Group:
|
|
|
|
|
|
||||||
Wholesale Energy Operations
|
34
|
|
|
14
|
|
|
7
|
|
|||
Retail Gas and Other Operations
|
495
|
|
|
889
|
|
|
1,642
|
|
|||
Subtotal Energy Group
|
529
|
|
|
903
|
|
|
1,649
|
|
|||
Energy Services:
|
|
|
|
|
|
||||||
On-Site Energy Production
|
2,686
|
|
|
12,588
|
|
|
38,193
|
|
|||
Appliance Service Operations
|
—
|
|
|
260
|
|
|
431
|
|
|||
Subtotal Energy Services
|
2,686
|
|
|
12,848
|
|
|
38,624
|
|
|||
Midstream
|
119
|
|
|
218
|
|
|
505
|
|
|||
Corporate and Services
|
1,826
|
|
|
2,233
|
|
|
636
|
|
|||
Total Property Additions
|
$
|
350,856
|
|
|
$
|
269,747
|
|
|
$
|
269,689
|
|
|
2018
|
|
2017
|
||||
Identifiable Assets:
|
|
|
|
||||
SJI Utilities:
|
|
|
|
||||
SJG Utility Operations
|
$
|
3,118,236
|
|
|
$
|
2,865,974
|
|
ETG Utility Operations
|
2,148,175
|
|
|
—
|
|
||
ELK Utility Operations
|
16,482
|
|
|
—
|
|
||
Subtotal SJI Utilities
|
5,282,893
|
|
|
2,865,974
|
|
||
Energy Group:
|
|
|
|
||||
Wholesale Energy Operations
|
266,417
|
|
|
208,785
|
|
||
Retail Gas and Other Operations
|
12,736
|
|
|
56,935
|
|
||
Retail Electric Operations
|
39,345
|
|
|
34,923
|
|
||
Subtotal Energy Group
|
318,498
|
|
|
300,643
|
|
||
Energy Services:
|
|
|
|
||||
On-Site Energy Production
|
195,329
|
|
|
582,587
|
|
||
Appliance Service Operations
|
—
|
|
|
1,338
|
|
||
Subtotal Energy Services
|
195,329
|
|
|
583,925
|
|
||
Discontinued Operations
|
1,777
|
|
|
1,757
|
|
||
Midstream
|
72,333
|
|
|
63,112
|
|
||
Corporate and Services
|
387,482
|
|
|
711,038
|
|
||
Intersegment Assets
|
(301,735
|
)
|
|
(661,363
|
)
|
||
Total Identifiable Assets
|
$
|
5,956,577
|
|
|
$
|
3,865,086
|
|
Year ended December 31,
|
|
||
2019
|
$
|
5,396
|
|
2020
|
5,396
|
|
|
2021
|
5,396
|
|
|
2022
|
5,396
|
|
|
2023
|
5,396
|
|
|
Thereafter
|
18,438
|
|
|
Total minimum future rentals
|
45,418
|
|
10.
|
RATES AND REGULATORY ACTIONS:
|
•
|
January 2016 - SJG provided a BGSS bill credit of approximately
$20.0 million
to its residential and small commercial customers. This credit was in addition to the overall rate reduction that was approved by the BPU and took effect in 2015.
|
•
|
June 2016 - SJG filed its annual BGSS filing with the BPU, requesting a
$47.1 million
decrease in gas cost recoveries.
|
•
|
September 2016 - The BPU issued an Order approving, on a provisional basis, SJG’s request for a
$47.1 million
decrease in gas cost recoveries, effective October 2016.
|
•
|
December 2016 - SJG provided a BGSS bill credit of approximately
$10.0 million
to its residential and small commercial customers. The credit was in addition to the overall rate reduction that was approved by the BPU and took effect in October 2016.
|
•
|
April 2017 - SJG provided a BGSS bill credit of approximately
$8.0 million
to its residential and small commercial customers. The credit was in addition to the overall rate reduction that was approved by the BPU and took effect in October 2016.
|
•
|
June 2017 - SJG filed its annual BGSS filing with the BPU, requesting a
$4.7 million
decrease in gas cost recoveries.
|
•
|
September 2017 - The BPU issued an Order approving, on a provisional basis, SJG’s request for a
$4.7 million
decrease in gas cost recoveries associated with the 2017-2018 BGSS year, effective October 2017.
|
•
|
May 2018 - SJG received BPU final approval of provisional rates that were authorized in a BPU order during September 2017, as they relate to SJG's 2017-2018 BGSS filing, as submitted to the BPU in June 2017. The impact of the final rates was a
$4.7 million
decrease in revenue.
|
•
|
June 2018 - SJG filed its annual BGSS filing with the BPU requesting a
$65.5 million
increase in gas recoveries, which included a
$53.7 million
under-recovered deferred balance.
|
•
|
September 2018 - The BPU issued an Order approving, on a provisional basis, SJG's request for a
$65.5 million
increase in the gas cost recoveries associated with the 2018-2019 BGSS year, effective October 1, 2018. The matter was thereafter referred to the Office of Administrative Law for further proceedings. Presently, the parties are engaged in settlement negotiations. In the event a settlement is not reached, evidentiary hearings are scheduled for April 2019. A range of potential outcomes include, among other things, provisional rates will be made final, a reduction in rates to minimize negative financial impacts on ratepayers for a set period of time, a disallowance of part or all of the under-recovered deferred balance, modifications to the Company’s existing risk/hedging policies, limitations on affiliate transactions, and/or additional filing requirements associated with future annual BGSS filings.
|
•
|
December 2018 - SJG submitted a notice of intent to self-implement a BGSS rate adjustment based on a
5%
increase of the monthly bill of a typical residential customer, effective February, 1, 2019.
|
•
|
June 2016 - SJG filed its annual CIP filing with the BPU, requesting a
$46.5 million
increase in revenues, which includes a
$9.9 million
increase in non-weather related revenues and a
$36.6 million
increase in weather related revenues.
|
•
|
September 2016 - The BPU issued an Order approving, on a provisional basis, the 2016-2017 CIP rates filed in June 2016, effective October 2016.
|
•
|
June 2017 - SJG filed its annual CIP filing with the BPU requesting a
$0.2 million
increase in revenues, which included a
$1.1 million
increase in non-weather related revenues and a
$0.9 million
decrease in weather related revenues.
|
•
|
September 2017 - The BPU issued an Order approving the 2017-2018 CIP Year rates filed in June 2017, effective October 2017.
|
•
|
May 2018 - SJG received BPU final approval of provisional rates that were authorized in a BPU order during September 2017, as they relate to SJG's 2017-2018 CIP filing, as submitted to the BPU in June 2017. The impact of the final rates was a
$0.2 million
increase in revenue.
|
•
|
September 2018 - SJG received BPU final approval of a
$26.4 million
decrease in CIP annual revenues, effective October 1, 2018, on a provisional basis, associated with the 2018-2019 CIP year, which runs from October 1, 2018 through September 30, 2019.
|
•
|
February 2016 - SJG filed a petition with the BPU for approval to continue its AIRP, which was set to expire at the end of 2016. In its petition, SJG requested to extend the AIRP for an additional
seven
years with program investments totaling approximately
$500.0 million
. In its Petition, SJG also requested to increase revenues by
$13.0 million
to reflect in base rates all AIRP investments made from the time of SJG’s last base rate case to the end of the initial AIRP.
|
•
|
October 2016 - The BPU issued an Order approving an extension of the AIRP for a
five
-year period (“AIRP II”), commencing October 1, 2016, with authorized investments of up to
$302.5 million
to continue replacing cast iron and unprotected bare steel mains and associated services. The BPU also approved an
$11.0 million
increase in revenues associated with the roll in of
$80.2 million
of AIRP investments, inclusive of
$5.7 million
of AFUDC into base rates, effective December 1, 2016.
|
•
|
April 2017 - SJG filed a petition, pursuant to the October 2016 BPU approval of the AIRP II, seeking a base rate adjustment to increase annual revenues by approximately
$4.5 million
to reflect the roll-in of
$42.0 million
of AIRP II investments made from October 1, 2016 through June 30, 2017.
|
•
|
September 2017 - The BPU issued an Order approving an increase in annual revenues from base rates of
$5.0 million
to reflect the roll-in of
$46.1 million
AIRP II investments made from October 2016 through June 2017, effective October 1, 2017.
|
•
|
April 2018 - SJG submitted its second annual filing, pursuant to the October 2016 BPU approval of the AIRP II, seeking a base rate adjustment to increase annual revenues by approximately
$6.6 million
to reflect the roll-in of
$60.4 million
of AIRP II investments placed in service from July 1, 2017 through June 30, 2018. This was approved in September 2018.
|
•
|
April 2016 - SJG filed a petition seeking a base rate adjustment to increase annual revenues by approximately
$4.3 million
to reflect approximately
$33.7 million
of SHARP investments made from July 2015 through June 2016.
|
•
|
September 2016 - The BPU approved an increase in annual revenues from base rates of
$3.9 million
to reflect the roll-in of
$33.7 million
of SHARP investments made from July 2015 through June 2016, effective October 1, 2016.
|
•
|
April 2017 - SJG filed a petition seeking a base rate adjustment to increase annual revenues by approximately
$4.0 million
to reflect approximately
$35.7 million
of SHARP investments made from July 2016 through June 2017.
|
•
|
September 2017 - The BPU issued an Order approving an increase in annual revenues from base rates of
$3.6 million
to reflect the roll-in of
$33.3 million
SHARP investments made from July 2016 through June 2017, effective October 1, 2017.
|
•
|
November 2017 - SJG filed a petition with the BPU for approval to continue its storm hardening efforts under a second phase of SHARP (“SHARP II”). Phase one of SJG’s initial SHARP expired in June of 2017. In its petition, SJG proposed a
three
-year program, with a total investment level of approximately
$110.3 million
, focused on four system enhancement projects within the coastal regions. SJG also proposed to recover the SHARP II through annual base rate adjustments, with no impact to customer bills until October 2019. This was approved by the BPU in May 2018 with a total of
$100.3 million
recoverable through SHARP II. Pursuant to the order, SHARP II investments are to be recovered through annual base rate adjustments.
|
•
|
February 2016 - The BPU approved a revenue decrease of
$7.9 million
associated with the two most recent annual EET rate adjustment filings, effective April 1, 2016.
|
•
|
June 2016 - SJG filed its annual EET rate adjustment petition, requesting a
$0.8 million
decrease in revenues to continue recovering the costs of, and the allowed return on, prior investments associated with EEPs.
|
•
|
October 2016 - The BPU approved a revenue decrease of
$1.6 million
associated with SJG's annual EET rate adjustment filing, effective November 10, 2016.
|
•
|
November 2016 - SJG filed a letter petition requesting an extension of its current EEP III through December 31, 2018, allowing SJG to spend the remainder of its existing BPU approved budget over the extended term.
|
•
|
January 2017 - The BPU issued an Order approving SJG’s request to extend the expiration date of EEP III from August 2017 to December 2018, without any modification to the subprograms or the amount of the previously authorized budget of
$36.3 million
, inclusive of operation and maintenance expenses.
|
•
|
June 2017 - SJG filed its Eighth Annual EET Filing, requesting a
$3.0 million
increase in revenues to continue recovering the costs of, and the allowed return on, prior investments associated with EEPs.
|
•
|
November 2017 - The BPU issued an Order approving a revenue increase of
$2.6 million
associated with the Eighth Annual EET Filing, effective December 1, 2017.
|
•
|
March 2018 - SJG filed a petition with the BPU seeking to continue its existing EEP's, with modifications, and to implement new programs (the “EEP IV”) for a five-year period with a proposed budget of approximately
$195.4 million
and with the same rate recovery mechanism that exists for its current EEP's. Under its existing EEP's, SJG is permitted to recover incremental operating and maintenance expenses and earn a return of, and return on, program investments.
|
•
|
June 2018 - SJG filed its ninth annual EET rate adjustment petition, requesting a
$1.6 million
decrease in revenues to continue recovering the costs of, and the allowed return on, prior investments associated with its EEPs.
|
•
|
October 2018 - The BPU issued an Order approving SJG's request to continue its existing EEPs with modifications, and to implement several new EEP's for a period of three years (the "EEP IV"), with a total budget of
$81.3 million
and a revenue increase of
$3.5 million
, effective November 1, 2018.
|
•
|
January 2019 - The BPU issued an Order approving a revenue decrease of
$1.6 million
associated with SJG's annual EET rate adjustment filing, effective February, 1, 2019.
|
•
|
July 2016 - SJG made its annual 2016-2017 SBC filing, requesting a
$16.0 million
increase in SBC revenues. The BPU approved this filing in May 2017.
|
•
|
July 2017 - SJG made its annual 2017-2018 SBC filing, requesting an
$8.5 million
increase in annual revenues. The BPU approved this filing in January 2018.
|
•
|
July 2018 - SJG made its annual 2018-2019 SBC filing, requesting
$3.4 million
decrease in annual revenues.
|
•
|
June 2016 - SJG made its annual USF filing, along with the State’s other electric and gas utilities, proposing to increase the statewide gas revenues by
$56.0 million
. This proposal was designed to increase SJG’s annual USF revenue by
$1.1 million
.
|
•
|
September 2016 - The BPU approved the statewide budget of
$56.0 million
for all the State’s gas utilities. SJG's portion of the total is approximately
$5.6 million
, which increased rates effective October 1, 2016, resulting in a
$1.1 million
increase to its USF recoveries.
|
•
|
June 2017 - SJG made its annual USF filing, along with the State’s other gas utilities, proposing to decrease the statewide gas revenues by
$16.3 million
. This proposal was designed to decrease SJG’s annual USF revenue by
$2.0 million
.
|
•
|
September 2017 - The BPU approved the statewide budget of
$38.3 million
for all the State’s gas utilities. SJG's portion of the total was approximately
$3.2 million
, resulting in a
$2.2 million
decrease to its USF recoveries effective October 1, 2017.
|
•
|
June 2018 - SJG made its annual USF filing, along with the State's other gas utilities, proposing to decrease statewide electric and gas revenues by
$10.4 million
. This proposal included an increase to SJG's annual USF recoveries of
$0.9 million
.
|
•
|
September 2018 - The BPU approved the Statewide USF annual 2018-2019 budget for all of New Jersey's gas utilities. SJG's portion of the total is approximately
$3.7 million
, resulting in a
$0.9 million
increase to its USF recoveries, effective October 1, 2018.
|
•
|
A final base rate adjustment to reflect an annual revenue reduction of approximately
$25.9 million
;
|
•
|
A one-time customer refund of approximately
$13.8 million
, including interest, for over collected tax during the period January 1, 2018 through September 30, 2018; and
|
•
|
A customer refund of approximately
$27.5 million
for the "Unprotected" Excess Deferred Income Tax through a separate tariff rider over a
five
-year period. The refund related to the "Protected" Excess Deferred Tax will be addressed no later than March 31, 2019.
|
•
|
May 2018 - The BPU issued an Order approving, on a final basis, the provisional rates that were authorized by the BPU in its September 2017 Order, effective June 2018.
|
•
|
May 2018 - ETG filed its annual BGSS filing with the BPU, requesting a
$7.1 million
decrease in gas cost recoveries. This was approved in September 2018.
|
•
|
December 2018 - ETG submitted a notice of intent to self-implement a BGSS rate adjustment based on a
5%
increase of the monthly bill of a typical residential customer, effective February 1, 2019; that adjustment took effect on February 1, 2019.
|
•
|
June 2018 - ETG filed to extend its EEPs through December 2019.
|
•
|
August 2018 - The BPU issued an Order on ETG’s November 2017 filing approving a revenue increase of
$1.2 million
to an annual revenue of
$2.2 million
effective September 2018 to continue recovering the costs of, and the allowed return on, prior investments associated with its EEPs.
|
•
|
August 2018 - ETG filed its annual EEP rate adjustment petition, requesting a revenue increase of
$1.3 million
to an annual revenue of
$2.2 million
to continue recovering the costs of, and the allowed return on, prior investments associated with its EEPs.
|
•
|
October 2018 - The Board approved EEPs extension through February 2019, consistent in all other respects with the Board's April 2017 Order.
|
•
|
January 2019 - ETG entered into a Stipulation with Board Staff and the New Jersey Division of Rate Counsel extending its EEP through February 29, 2020 at a total budget of approximately
$3.0 million
.
|
•
|
August 2018 - ETG filed its annual WNC rate adjustment petition, requesting a revenue decrease of
$0.8 million
to an annual revenue of
$6.3 million
to recover a deficiency from warmer than normal weather. This was approved in October 2018.
|
•
|
August 2018 - ETG filed its annual OSMC rate adjustment petition, requesting a revenue increase of
$1.1 million
. This was approved in October 2018.
|
•
|
August 2018 - ETG filed its annual RAC filing with the BPU, requesting a
$6.9 million
increase in RAC recoveries.
|
•
|
October 2018 - The BPU issued an Order maintain the current rate with no change in RAC recoveries, effective November 2018.
|
•
|
August 2018 - ETG filed its annual CEP rate adjustment petition, requesting a revenue decrease of
$1.6 million
to an annual revenue of
$10.0 million
to recovery costs mandated by the Board. This was approved in October 2018.
|
•
|
June 2018 - ETG made its annual USF filing, along with the State’s other gas utilities, proposing to increase statewide electric and gas revenues by
$7.2 million
. This proposal included an increase to ETG’s annual USF recoveries of
$0.8 million
.
|
•
|
September 2018 - The BPU approved the Statewide budget of
$45.5 million
for all the State's gas utilities. ETG’s portion of the total is approximately
$4.8 million
, resulting in a
$0.8 million
increase to its USF recoveries, effective October 1, 2018.
|
11.
|
REGULATORY ASSETS & REGULATORY LIABILITIES:
|
|
December 31, 2018
|
|
December 31, 2017
|
|||||||||||||
|
SJG
|
ETG
|
ELK
|
Total SJI
|
|
Total SJI and SJG
|
||||||||||
Environmental Remediation Costs:
|
|
|
|
|
|
|
||||||||||
Expended - Net
|
$
|
136,227
|
|
$
|
10,875
|
|
$
|
—
|
|
$
|
147,102
|
|
|
$
|
100,327
|
|
Liability for Future Expenditures
|
148,071
|
|
104,594
|
|
—
|
|
252,665
|
|
|
171,696
|
|
|||||
Deferred Asset Retirement Obligation Costs
|
31,096
|
|
—
|
|
—
|
|
31,096
|
|
|
42,368
|
|
|||||
Deferred Pension Costs - Unrecognized Prior Service Cost
|
—
|
|
40,612
|
|
14
|
|
40,626
|
|
|
—
|
|
|||||
Deferred Pension and Other Postretirement Benefit Costs
|
80,121
|
|
2,607
|
|
30
|
|
82,758
|
|
|
78,211
|
|
|||||
Deferred Gas Costs - Net
|
57,889
|
|
—
|
|
289
|
|
58,178
|
|
|
16,838
|
|
|||||
CIP Receivable
|
—
|
|
—
|
|
—
|
|
—
|
|
|
26,652
|
|
|||||
Societal Benefit Costs Receivable
|
2,173
|
|
—
|
|
—
|
|
2,173
|
|
|
2,484
|
|
|||||
Deferred Interest Rate Contracts
|
5,867
|
|
—
|
|
—
|
|
5,867
|
|
|
7,028
|
|
|||||
Energy Efficiency Tracker
|
2,319
|
|
—
|
|
—
|
|
2,319
|
|
|
2,094
|
|
|||||
Pipeline Supplier Service Charges
|
617
|
|
—
|
|
—
|
|
617
|
|
|
708
|
|
|||||
Pipeline Integrity Cost
|
5,140
|
|
—
|
|
—
|
|
5,140
|
|
|
5,280
|
|
|||||
AFUDC - Equity Related Deferrals
|
13,914
|
|
—
|
|
—
|
|
13,914
|
|
|
12,785
|
|
|||||
Weather Normalization
|
—
|
|
3,210
|
|
139
|
|
3,349
|
|
|
—
|
|
|||||
Other Regulatory Assets
|
8,931
|
|
8,023
|
|
211
|
|
17,165
|
|
|
2,753
|
|
|||||
|
|
|
|
|
|
|
||||||||||
Total Regulatory Assets
|
$
|
492,365
|
|
$
|
169,921
|
|
$
|
683
|
|
$
|
662,969
|
|
|
$
|
469,224
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|||||||||||||
|
SJG
|
ETG
|
ELK
|
Total SJI
|
|
Total SJI and SJG
|
||||||||||
Excess Plant Removal Costs
|
20,805
|
|
47,909
|
|
1,393
|
|
$
|
70,107
|
|
|
$
|
23,295
|
|
|||
Excess Deferred Taxes
|
259,863
|
|
118,757
|
|
1,231
|
|
379,851
|
|
|
263,810
|
|
|||||
Deferred Revenues - Net
|
—
|
|
3,188
|
|
—
|
|
3,188
|
|
|
—
|
|
|||||
CIP Payable
|
5,871
|
|
—
|
|
—
|
|
5,871
|
|
|
—
|
|
|||||
Amounts to be Refunded to Customers
|
—
|
|
17,039
|
|
—
|
|
17,039
|
|
|
—
|
|
|||||
Other Regulatory Liabilities
|
—
|
|
2,443
|
|
—
|
|
2,443
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
||||||||||
Total Regulatory Liabilities
|
$
|
286,539
|
|
$
|
189,336
|
|
$
|
2,624
|
|
$
|
478,499
|
|
|
$
|
287,105
|
|
SJI (includes SJG and all other consolidated subsidiaries):
|
Pension Benefits
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Service Cost
|
$
|
6,442
|
|
|
$
|
4,989
|
|
|
$
|
4,843
|
|
Interest Cost
|
13,778
|
|
|
11,772
|
|
|
12,125
|
|
|||
Expected Return on Plan Assets
|
(18,672
|
)
|
|
(14,105
|
)
|
|
(13,508
|
)
|
|||
Amortizations:
|
|
|
|
|
|
|
|||||
Prior Service Cost
|
116
|
|
|
131
|
|
|
212
|
|
|||
Actuarial Loss
|
11,528
|
|
|
10,282
|
|
|
9,394
|
|
|||
Net Periodic Benefit Cost
|
13,192
|
|
|
13,069
|
|
|
13,066
|
|
|||
Curtailment and Special Termination Costs
|
7,324
|
|
|
—
|
|
|
—
|
|
|||
Capitalized Benefit Costs
|
(2,243
|
)
|
|
(4,723
|
)
|
|
(4,645
|
)
|
|||
Deferred Benefit Costs
|
(1,987
|
)
|
|
(527
|
)
|
|
(645
|
)
|
|||
Total Net Periodic Benefit Expense
|
$
|
16,286
|
|
|
$
|
7,819
|
|
|
$
|
7,776
|
|
SJI (includes SJG and all other consolidated subsidiaries):
|
Other Postretirement Benefits
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Service Cost
|
$
|
945
|
|
|
$
|
910
|
|
|
$
|
851
|
|
Interest Cost
|
2,430
|
|
|
2,418
|
|
|
2,615
|
|
|||
Expected Return on Plan Assets
|
(4,286
|
)
|
|
(3,411
|
)
|
|
(3,104
|
)
|
|||
Amortizations:
|
|
|
|
|
|
|
|||||
Prior Service Credits
|
(344
|
)
|
|
(344
|
)
|
|
(344
|
)
|
|||
Actuarial Loss
|
903
|
|
|
1,238
|
|
|
1,109
|
|
|||
Net Periodic Benefit Cost
|
(352
|
)
|
|
811
|
|
|
1,127
|
|
|||
Curtailment and Special Termination Costs
|
1,286
|
|
|
(106
|
)
|
|
—
|
|
|||
Capitalized Benefit Costs
|
(290
|
)
|
|
(46
|
)
|
|
(277
|
)
|
|||
Deferred Benefit Costs
|
580
|
|
|
—
|
|
|
—
|
|
|||
Total Net Periodic Benefit Expense
|
$
|
1,224
|
|
|
$
|
659
|
|
|
$
|
850
|
|
SJG:
|
Pension Benefits
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Service Cost
|
$
|
5,073
|
|
|
$
|
4,303
|
|
|
$
|
4,144
|
|
Interest Cost
|
10,010
|
|
|
9,925
|
|
|
10,292
|
|
|||
Expected Return on Plan Assets
|
(12,513
|
)
|
|
(11,366
|
)
|
|
(11,029
|
)
|
|||
Amortization:
|
|
|
|
|
|
||||||
Prior Service Cost
|
112
|
|
|
127
|
|
|
203
|
|
|||
Actuarial Loss
|
10,074
|
|
|
8,692
|
|
|
7,975
|
|
|||
Net Periodic Benefit Cost
|
12,756
|
|
|
11,681
|
|
|
11,585
|
|
|||
Capitalized Benefit Costs
|
(1,943
|
)
|
|
(4,723
|
)
|
|
(4,645
|
)
|
|||
Affiliate SERP Allocations
|
(3,861
|
)
|
|
(2,235
|
)
|
|
(1,960
|
)
|
|||
Deferred Benefit Costs
|
(1,987
|
)
|
|
(527
|
)
|
|
(644
|
)
|
|||
Total Net Periodic Benefit Expense
|
$
|
4,965
|
|
|
$
|
4,196
|
|
|
$
|
4,336
|
|
SJG:
|
Other Postretirement Benefits
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Service Cost
|
$
|
583
|
|
|
$
|
582
|
|
|
$
|
576
|
|
Interest Cost
|
1,698
|
|
|
1,897
|
|
|
2,120
|
|
|||
Expected Return on Plan Assets
|
(3,449
|
)
|
|
(3,101
|
)
|
|
(2,823
|
)
|
|||
Amortization:
|
|
|
|
|
|
||||||
Prior Service Credits
|
(257
|
)
|
|
(257
|
)
|
|
(257
|
)
|
|||
Actuarial Loss
|
695
|
|
|
972
|
|
|
945
|
|
|||
Net Periodic Benefit Cost
|
(730
|
)
|
|
93
|
|
|
561
|
|
|||
Capitalized Benefit Costs
|
(257
|
)
|
|
(46
|
)
|
|
(277
|
)
|
|||
Deferred Benefit Costs
|
580
|
|
|
—
|
|
|
—
|
|
|||
Total Net Periodic Benefit (Income)/Expense
|
$
|
(407
|
)
|
|
$
|
47
|
|
|
$
|
284
|
|
SJI (includes SJG and all other consolidated subsidiaries):
|
Regulatory Assets
|
|
Accumulated Other
Comprehensive Loss
(pre-tax)
|
||||||||||||
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||
Balance at January 1, 2017
|
$
|
68,450
|
|
|
$
|
17,243
|
|
|
$
|
39,590
|
|
|
$
|
2,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amounts Arising during the Period:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Actuarial Gain
|
2,711
|
|
|
(3,286
|
)
|
|
18,506
|
|
|
1,614
|
|
||||
Prior Service Credit
|
—
|
|
|
257
|
|
|
—
|
|
|
84
|
|
||||
Amounts Amortized to Net Periodic Costs:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Actuarial Loss
|
(6,066
|
)
|
|
(972
|
)
|
|
(4,160
|
)
|
|
(1,013
|
)
|
||||
Prior Service Cost
|
(126
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2017
|
64,969
|
|
|
13,242
|
|
|
53,932
|
|
|
3,506
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts Arising during the Period:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Actuarial Gain (Loss)
|
8,637
|
|
|
5,662
|
|
|
(5,953
|
)
|
|
(1,819
|
)
|
||||
Prior Service Credit
|
70
|
|
|
(3,247
|
)
|
|
—
|
|
|
(2,471
|
)
|
||||
Other (Curtailments, Settlements, Special Termination)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,586
|
|
||||
Amounts Amortized to Net Periodic Costs:
|
|
|
|
|
|
|
|
||||||||
Net Actuarial Loss
|
(6,025
|
)
|
|
(695
|
)
|
|
(5,450
|
)
|
|
(199
|
)
|
||||
Prior Service Cost
|
(112
|
)
|
|
257
|
|
|
(4
|
)
|
|
84
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2018
|
$
|
67,539
|
|
|
$
|
15,219
|
|
|
$
|
42,525
|
|
|
$
|
687
|
|
SJG:
|
Regulatory Assets
|
|
Accumulated Other Comprehensive Loss (pre-tax)
|
||||||||||||
|
Pension Benefits
|
|
Other Postretirement Benefits
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||
Balance at January 1, 2017
|
$
|
68,450
|
|
|
$
|
17,243
|
|
|
$
|
24,102
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts Arising during the Period:
|
|
|
|
|
|
|
|
||||||||
Net Actuarial Gain
|
2,711
|
|
|
(3,286
|
)
|
|
17,881
|
|
|
—
|
|
||||
Prior Service Credit
|
—
|
|
|
257
|
|
|
—
|
|
|
—
|
|
||||
Amounts Amortized to Net Periodic Costs:
|
|
|
|
|
|
|
|
||||||||
Net Actuarial Loss
|
(6,066
|
)
|
|
(972
|
)
|
|
(2,627
|
)
|
|
—
|
|
||||
Prior Service Cost
|
(126
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2017
|
64,969
|
|
|
13,242
|
|
|
39,356
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts Arising during the Period:
|
|
|
|
|
|
|
|
||||||||
Net Actuarial Gain
|
6,590
|
|
|
5,071
|
|
|
(911
|
)
|
|
—
|
|
||||
Prior Service Credit
|
70
|
|
|
(3,247
|
)
|
|
—
|
|
|
—
|
|
||||
Other (Curtailments, Settlements, Special Termination)
|
—
|
|
|
—
|
|
|
|
|
|
||||||
Amounts Amortized to Net Periodic Costs:
|
|
|
|
|
|
|
|
||||||||
Net Actuarial Loss
|
(6,025
|
)
|
|
(695
|
)
|
|
(4,049
|
)
|
|
—
|
|
||||
Prior Service Cost
|
(111
|
)
|
|
257
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2018
|
$
|
65,493
|
|
|
$
|
14,628
|
|
|
$
|
34,396
|
|
|
$
|
—
|
|
SJI and SJG (costs are the same for both entities):
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||
Prior Service Cost/(Credit)
|
$
|
101
|
|
|
$
|
(474
|
)
|
Net Actuarial Loss
|
$
|
5,837
|
|
|
$
|
965
|
|
SJI (includes SJG and all other consolidated subsidiaries):
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||
|
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Change in Benefit Obligations:
|
|
|
|
|
|
|
|
||||||||
Benefit Obligation at Beginning of Year
|
$
|
316,289
|
|
|
$
|
278,288
|
|
|
$
|
62,283
|
|
|
$
|
60,350
|
|
Acquisition Opening Obligation
|
100,362
|
|
|
—
|
|
|
13,195
|
|
|
—
|
|
||||
Service Cost
|
6,442
|
|
|
4,989
|
|
|
945
|
|
|
910
|
|
||||
Interest Cost
|
13,778
|
|
|
11,772
|
|
|
2,430
|
|
|
2,418
|
|
||||
Actuarial Loss (Gain)
|
(26,274
|
)
|
|
32,893
|
|
|
(3,534
|
)
|
|
1,411
|
|
||||
Retiree Contributions
|
—
|
|
|
—
|
|
|
265
|
|
|
19
|
|
||||
Plan Amendments
|
7,394
|
|
|
—
|
|
|
(3,012
|
)
|
|
—
|
|
||||
Benefits Paid
|
(15,835
|
)
|
|
(11,653
|
)
|
|
(3,061
|
)
|
|
(2,825
|
)
|
||||
Benefit Obligation at End of Year
|
$
|
402,156
|
|
|
$
|
316,289
|
|
|
$
|
69,511
|
|
|
$
|
62,283
|
|
|
|
|
|
|
|
|
|
||||||||
Change in Plan Assets:
|
|
|
|
|
|
|
|
||||||||
Fair Value of Plan Assets at Beginning of Year
|
$
|
216,065
|
|
|
$
|
189,542
|
|
|
$
|
57,922
|
|
|
$
|
50,532
|
|
Acquisition Beginning Fair Value
|
94,685
|
|
|
—
|
|
|
15,659
|
|
|
—
|
|
||||
Actual Return on Plan Assets
|
(10,399
|
)
|
|
25,807
|
|
|
(3,050
|
)
|
|
7,390
|
|
||||
Employer Contributions
|
2,704
|
|
|
12,369
|
|
|
2,796
|
|
|
2,806
|
|
||||
Retiree Contributions
|
—
|
|
|
—
|
|
|
265
|
|
|
19
|
|
||||
Benefits Paid
|
(15,835
|
)
|
|
(11,653
|
)
|
|
(3,061
|
)
|
|
(2,825
|
)
|
||||
Fair Value of Plan Assets at End of Year
|
$
|
287,220
|
|
|
$
|
216,065
|
|
|
$
|
70,531
|
|
|
$
|
57,922
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Funded Status at End of Year:
|
$
|
(114,936
|
)
|
|
$
|
(100,224
|
)
|
|
$
|
1,020
|
|
|
$
|
(4,361
|
)
|
Amounts Related to Unconsolidated Affiliate
|
(147
|
)
|
|
135
|
|
|
320
|
|
|
518
|
|
||||
Accrued Net Benefit Cost at End of Year
|
$
|
(115,083
|
)
|
|
$
|
(100,089
|
)
|
|
$
|
1,340
|
|
|
$
|
(3,843
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts Recognized in the Statement of Financial Position Consist of:
|
|
|
|
|
|
|
|
||||||||
Current Liabilities
|
$
|
(3,631
|
)
|
|
$
|
(2,388
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Noncurrent Liabilities
|
(111,452
|
)
|
|
(97,701
|
)
|
|
1,340
|
|
|
(3,843
|
)
|
||||
Net Amount Recognized at End of Year
|
$
|
(115,083
|
)
|
|
$
|
(100,089
|
)
|
|
$
|
1,340
|
|
|
$
|
(3,843
|
)
|
|
|
|
|
|
|
|
|
||||||||
Amounts Recognized in Regulatory Assets Consist of:
|
|
|
|
|
|
|
|
||||||||
Prior Service Costs
|
$
|
162
|
|
|
$
|
428
|
|
|
$
|
(5,765
|
)
|
|
$
|
(2,775
|
)
|
Net Actuarial Loss
|
67,377
|
|
|
64,541
|
|
|
20,984
|
|
|
16,017
|
|
||||
|
$
|
67,539
|
|
|
$
|
64,969
|
|
|
$
|
15,219
|
|
|
$
|
13,242
|
|
|
|
|
|
|
|
|
|
||||||||
Amounts Recognized in Accumulated Other Comprehensive Loss Consist of (pre-tax):
|
|
|
|
|
|
|
|
||||||||
Prior Service Costs
|
$
|
268
|
|
|
$
|
47
|
|
|
$
|
(1,707
|
)
|
|
$
|
(906
|
)
|
Net Actuarial Loss
|
42,257
|
|
|
53,885
|
|
|
2,394
|
|
|
4,412
|
|
||||
|
$
|
42,525
|
|
|
$
|
53,932
|
|
|
$
|
687
|
|
|
$
|
3,506
|
|
SJG:
|
|
|
|
|
Other
|
||||||||||
|
Pension Benefits
|
|
Postretirement Benefits
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Change in Benefit Obligations
:
|
|
|
|
|
|
|
|
||||||||
Benefit Obligation at Beginning of Year
|
$
|
269,066
|
|
|
$
|
236,356
|
|
|
$
|
49,098
|
|
|
$
|
48,549
|
|
Service Cost
|
5,073
|
|
|
4,303
|
|
|
583
|
|
|
582
|
|
||||
Interest Cost
|
10,010
|
|
|
9,925
|
|
|
1,698
|
|
|
1,897
|
|
||||
Actuarial Loss (Gain)
|
(13,009
|
)
|
|
27,892
|
|
|
(1,271
|
)
|
|
328
|
|
||||
Retiree Contributions
|
—
|
|
|
—
|
|
|
143
|
|
|
15
|
|
||||
Plan Amendments
|
4,169
|
|
|
—
|
|
|
(3,247
|
)
|
|
—
|
|
||||
Benefits Paid
|
(10,486
|
)
|
|
(9,410
|
)
|
|
(2,122
|
)
|
|
(2,273
|
)
|
||||
Benefit Obligation at End of Year
|
$
|
264,823
|
|
|
$
|
269,066
|
|
|
$
|
44,882
|
|
|
$
|
49,098
|
|
Change in Plan Assets:
|
|
|
|
|
|
|
|
|
|||||||
Fair Value of Plan Assets at Beginning of Year
|
$
|
174,277
|
|
|
$
|
154,729
|
|
|
$
|
52,663
|
|
|
$
|
45,948
|
|
Actual Return on Plan Assets
|
(6,175
|
)
|
|
18,666
|
|
|
(2,893
|
)
|
|
6,715
|
|
||||
Employer Contributions
|
2,669
|
|
|
10,292
|
|
|
1,979
|
|
|
2,259
|
|
||||
Retiree Contributions
|
—
|
|
|
—
|
|
|
143
|
|
|
14
|
|
||||
Benefits Paid
|
(10,486
|
)
|
|
(9,410
|
)
|
|
(2,122
|
)
|
|
(2,273
|
)
|
||||
Fair Value of Plan Assets at End of Year
|
$
|
160,285
|
|
|
$
|
174,277
|
|
|
$
|
49,770
|
|
|
$
|
52,663
|
|
|
|
|
|
|
|
|
|
||||||||
Funded Status at End of Year
:
|
|
|
|
|
|
|
|
||||||||
Accrued Net Benefit Cost at End of Year
|
$
|
(104,538
|
)
|
|
$
|
(94,789
|
)
|
|
$
|
4,888
|
|
|
$
|
3,565
|
|
Amounts Recognized in the Statement of Financial Position Consist of:
|
|
|
|
|
|
|
|
||||||||
Current Liabilities
|
$
|
(3,597
|
)
|
|
$
|
(2,353
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Noncurrent Liabilities
|
(100,941
|
)
|
|
(92,436
|
)
|
|
4,888
|
|
|
3,565
|
|
||||
Net Amount Recognized at End of Year
|
$
|
(104,538
|
)
|
|
$
|
(94,789
|
)
|
|
$
|
4,888
|
|
|
$
|
3,565
|
|
Amounts Recognized in Regulatory Assets Consist of:
|
|
|
|
|
|
|
|
||||||||
Prior Service Costs
|
$
|
163
|
|
|
$
|
428
|
|
|
$
|
(5,765
|
)
|
|
$
|
(2,775
|
)
|
Net Actuarial Loss
|
65,330
|
|
|
64,541
|
|
|
20,393
|
|
|
16,017
|
|
||||
Net Amount Recognized at End of Year
|
$
|
65,493
|
|
|
$
|
64,969
|
|
|
$
|
14,628
|
|
|
$
|
13,242
|
|
Amounts Recognized in Accumulated Other Comprehensive Loss Consist of:
|
|
|
|
|
|
|
|
||||||||
Net Actuarial Loss
|
$
|
34,396
|
|
|
$
|
39,356
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Discount Rate
|
4.39
|
%
|
|
3.73
|
%
|
|
3.63
|
%
|
|
3.63
|
%
|
Rate of Compensation Increase
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||
Discount Rate
|
3.73
|
%
|
|
4.30
|
%
|
|
4.83
|
%
|
|
4.13
|
%
|
|
4.13
|
%
|
|
4.73
|
%
|
Expected Long-Term Return on Plan Assets
|
7.25
|
%
|
|
7.25
|
%
|
|
7.50
|
%
|
|
6.75
|
%
|
|
6.50
|
%
|
|
6.50
|
%
|
Rate of Compensation Increase
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
||||||||
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Cash / Cash Equivalents:
|
|
|
|
|
|
|
|
|
|||||||
Cash
|
$
|
92,224
|
|
|
$
|
92,224
|
|
|
$
|
—
|
|
|
$
|
—
|
|
STIF-Type Instrument (a)
|
1,653
|
|
|
—
|
|
|
1,653
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap (b)
|
13,684
|
|
|
13,684
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid-Cap (b)
|
1,502
|
|
|
1,502
|
|
|
—
|
|
|
—
|
|
||||
International (b)
|
2,327
|
|
|
2,327
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income:
|
|
|
|
|
|
|
|
|
|||||||
Guaranteed Insurance Contract (c)
|
8,453
|
|
|
—
|
|
|
—
|
|
|
8,453
|
|
||||
Subtotal Fair Value
|
$
|
119,843
|
|
|
$
|
109,737
|
|
|
$
|
1,653
|
|
|
$
|
8,453
|
|
|
|
|
|
|
|
|
|
||||||||
Measured at net asset value practical expedient (g):
|
|
|
|
|
|
|
|
||||||||
Private Equity Fund (d)
|
$
|
8,867
|
|
|
|
|
|
|
|
||||||
Common/Collective Trust Funds - Real Estate (e)
|
9,737
|
|
|
|
|
|
|
|
|||||||
|
18,604
|
|
|
|
|
|
|
|
|||||||
Other Common/Collective Trust Funds (f):
|
|
|
|
|
|
|
|
||||||||
Cash/Cash Equivalents
|
696
|
|
|
|
|
|
|
|
|||||||
Equity Securities - U.S.
|
63,418
|
|
|
|
|
|
|
|
|||||||
Equity Securities - International
|
33,391
|
|
|
|
|
|
|
|
|||||||
Fixed Income
|
51,268
|
|
|
|
|
|
|
|
|||||||
|
148,773
|
|
|
|
|
|
|
|
|||||||
Subtotal measured at net asset value practical expedient
|
$
|
167,377
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Total Fair Value
|
$
|
287,220
|
|
|
|
|
|
|
|
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Cash / Cash Equivalents:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
72
|
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
—
|
|
STIF-Type Instrument (a)
|
1,522
|
|
|
—
|
|
|
1,522
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap (b)
|
13,526
|
|
|
13,526
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid-Cap (b)
|
1,701
|
|
|
1,701
|
|
|
—
|
|
|
—
|
|
||||
U.S. Small-Cap (b)
|
490
|
|
|
490
|
|
|
—
|
|
|
—
|
|
||||
International (b)
|
3,260
|
|
|
3,260
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income:
|
|
|
|
|
|
|
|
||||||||
Guaranteed Insurance Contract (c)
|
9,211
|
|
|
—
|
|
|
—
|
|
|
9,211
|
|
||||
Subtotal Fair Value
|
$
|
29,782
|
|
|
$
|
19,049
|
|
|
$
|
1,522
|
|
|
$
|
9,211
|
|
|
|
|
|
|
|
|
|
||||||||
Measured at net asset value practical expedient (g):
|
|
|
|
|
|
|
|
||||||||
Private Equity Fund (d)
|
$
|
7,111
|
|
|
|
|
|
|
|
||||||
Common/Collective Trust Funds - Real Estate (e)
|
9,813
|
|
|
|
|
|
|
|
|||||||
|
16,924
|
|
|
|
|
|
|
|
|||||||
Other Common/Collective Trust Funds (f):
|
|
|
|
|
|
|
|
||||||||
Cash/Cash Equivalents
|
477
|
|
|
|
|
|
|
|
|||||||
Equity Securities - U.S.
|
75,699
|
|
|
|
|
|
|
|
|||||||
Equity Securities - International
|
39,077
|
|
|
|
|
|
|
|
|||||||
Fixed Income
|
54,106
|
|
|
|
|
|
|
|
|||||||
|
169,359
|
|
|
|
|
|
|
|
|||||||
Subtotal measured at net asset value practical expedient
|
$
|
186,283
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Total Fair Value
|
$
|
216,065
|
|
|
|
|
|
|
|
SJG:
|
|
|
|
|
|
|
|
||||||||
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Cash / Cash Equivalents:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
STIF-Type Instrument (a)
|
1,359
|
|
|
—
|
|
|
1,359
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap (b)
|
11,247
|
|
|
11,247
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid-Cap (b)
|
1,234
|
|
|
1,234
|
|
|
—
|
|
|
—
|
|
||||
International (b)
|
1,912
|
|
|
1,912
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income:
|
|
|
|
|
|
|
|
||||||||
Guaranteed Insurance Contract (c)
|
6,947
|
|
|
—
|
|
|
—
|
|
|
6,947
|
|
||||
Subtotal Fair Value
|
$
|
22,718
|
|
|
$
|
14,412
|
|
|
$
|
1,359
|
|
|
$
|
6,947
|
|
|
|
|
|
|
|
|
|
||||||||
Measured at net asset value practical expedient (g):
|
|
|
|
|
|
|
|
||||||||
Private Equity Fund (d)
|
$
|
7,288
|
|
|
|
|
|
|
|
||||||
Common/Collective Trust Funds - Real Estate (e)
|
8,003
|
|
|
|
|
|
|
|
|||||||
|
15,291
|
|
|
|
|
|
|
|
|||||||
Other Common/Collective Trust Funds (f):
|
|
|
|
|
|
|
|
||||||||
Cash/Cash Equivalents
|
572
|
|
|
|
|
|
|
|
|||||||
Equity Securities - U.S.
|
52,123
|
|
|
|
|
|
|
|
|||||||
Equity Securities - International
|
27,444
|
|
|
|
|
|
|
|
|||||||
Fixed Income
|
42,137
|
|
|
|
|
|
|
|
|||||||
|
122,276
|
|
|
|
|
|
|
|
|||||||
Subtotal measured at net asset value practical expedient
|
$
|
137,567
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Total Fair Value
|
$
|
160,285
|
|
|
|
|
|
|
|
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Cash / Cash Equivalents:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
58
|
|
|
$
|
58
|
|
|
$
|
—
|
|
|
$
|
—
|
|
STIF-Type Instrument (a)
|
1,228
|
|
|
—
|
|
|
1,228
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap (b)
|
10,910
|
|
|
10,910
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid-Cap (b)
|
1,372
|
|
|
1,372
|
|
|
—
|
|
|
—
|
|
||||
U.S. Small-Cap (b)
|
395
|
|
|
395
|
|
|
—
|
|
|
—
|
|
||||
International (b)
|
2,629
|
|
|
2,629
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income:
|
|
|
|
|
|
|
|
||||||||
Guaranteed Insurance Contract (c)
|
7,429
|
|
|
—
|
|
|
—
|
|
|
7,429
|
|
||||
Subtotal Fair Value
|
$
|
24,021
|
|
|
$
|
15,364
|
|
|
$
|
1,228
|
|
|
$
|
7,429
|
|
|
|
|
|
|
|
|
|
||||||||
Measured at net asset value practical expedient (g):
|
|
|
|
|
|
|
|
||||||||
Private Equity Fund (d)
|
$
|
5,735
|
|
|
|
|
|
|
|
||||||
Common/Collective Trust Funds - Real Estate (e)
|
7,920
|
|
|
|
|
|
|
|
|||||||
|
13,655
|
|
|
|
|
|
|
|
|||||||
Other Common/Collective Trust Funds (f):
|
|
|
|
|
|
|
|
||||||||
Cash/Cash Equivalents
|
385
|
|
|
|
|
|
|
|
|||||||
Equity Securities - U.S.
|
61,057
|
|
|
|
|
|
|
|
|||||||
Equity Securities - International
|
31,519
|
|
|
|
|
|
|
|
|||||||
Fixed Income
|
43,640
|
|
|
|
|
|
|
|
|||||||
|
136,601
|
|
|
|
|
|
|
|
|||||||
Subtotal measured at net asset value practical expedient
|
$
|
150,256
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Total Fair Value
|
$
|
174,277
|
|
|
|
|
|
|
|
(a)
|
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.
|
(b)
|
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.
|
(c)
|
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.
|
(d)
|
This category represents a limited partnership which includes several investments in U.S. leveraged buyout, venture capital, and special situation funds. Fund valuations are reported on a
90
to
120
day lag and, therefore, the value reported herein represents the market value as of June or September 30, 2018 and 2017, respectively, with cash flow changes through December applied. 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. See (g) below.
|
(e)
|
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. See (g) below.
|
(f)
|
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. Also included in these funds are interest rate swaps, asset backed securities, mortgage backed securities and other investments with observable market values. See (g) below.
|
(g)
|
Subsequent to the issuance of SJI’s and SJG’s 2017 financial statements, management determined that certain investments classified as Level 2 and Level 3 investments as of December 31, 2017 should have been excluded from the fair value hierarchy table and classified as “investments measured at net asset value practical expedient” as a result of adopting ASU 2015-07,
Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)”
on January 1, 2017. As a result, the table above has been revised to reclassify these investments from Level 2 and Level 3 investments as of December 31, 2017 to investments measured at net asset value practical expedient. The correction of this classification resulted in a decrease in previously reported Level 2 and Level 3 investments as of December 31, 2017 of
$169.4 million
and
$17.1 million
for SJI, respectively, and
$136.6 million
and
$13.7 million
for SJG, respectively, and an increase in the classified investments measured at net asset value practical expedient. The correction of this classification had no effect on SJI’s and SJG’s financial statements.
|
SJI (includes SJG and all other consolidated subsidiaries):
|
Guaranteed
|
|
Private
|
|
|
|
|
||||||||
|
Insurance
|
|
Equity
|
|
Real
|
|
|
||||||||
|
Contract
|
|
Funds (A)
|
|
Estate (A)
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance at January 1, 2017
|
$
|
9,714
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,714
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
||||||||
Relating to assets still held at the reporting date
|
245
|
|
|
—
|
|
|
—
|
|
|
245
|
|
||||
Relating to assets sold during the period
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Purchases, Sales and Settlements
|
(760
|
)
|
|
—
|
|
|
—
|
|
|
(760
|
)
|
||||
Balance at December 31, 2017
|
9,211
|
|
|
—
|
|
|
—
|
|
|
9,211
|
|
||||
Actual return on plan assets:
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Relating to assets still held at the reporting date
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
||||
Relating to assets sold during the period
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Purchases, Sales and Settlements
|
(718
|
)
|
|
—
|
|
|
—
|
|
|
(718
|
)
|
||||
Balance at December 31, 2018
|
$
|
8,453
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,453
|
|
SJG:
|
Guaranteed
Insurance
Contract
|
|
Private
Equity
Funds (A)
|
|
Real
Estate (A)
|
|
Total
|
||||||||
Balance at January 1, 2017
|
$
|
7,930
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,930
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
|
|||||
Relating to assets still held at the reporting date
|
103
|
|
|
—
|
|
|
—
|
|
|
103
|
|
||||
Relating to assets sold during the period
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Purchases, Sales and Settlements
|
(613
|
)
|
|
—
|
|
|
—
|
|
|
(613
|
)
|
||||
Balance at December 31, 2017
|
$
|
7,429
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,429
|
|
Actual return on plan assets:
|
|
|
|
|
|
|
|
|
|
|
|||||
Relating to assets still held at the reporting date
|
98
|
|
|
—
|
|
|
—
|
|
|
98
|
|
||||
Relating to assets sold during the period
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Purchases, Sales and Settlements
|
(591
|
)
|
|
—
|
|
|
—
|
|
|
(591
|
)
|
||||
Balance at December 31, 2018
|
$
|
6,947
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,947
|
|
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
||||||||
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
16,720
|
|
|
$
|
16,720
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other Types of Investments:
|
|
|
|
|
|
|
|
||||||||
Mutual Funds - REITS (a)
|
822
|
|
|
822
|
|
|
—
|
|
|
—
|
|
||||
Subtotal Fair Value
|
$
|
17,542
|
|
|
$
|
17,542
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Measured at net asset value practical expedient (c):
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds (b):
|
|
|
|
|
|
|
|
||||||||
Equity Securities - U.S.
|
$
|
14,069
|
|
|
|
|
|
|
|
||||||
Equity Securities - International
|
9,720
|
|
|
|
|
|
|
|
|||||||
Fixed Income
|
15,315
|
|
|
|
|
|
|
|
|||||||
Company Owned Life Insurance (b)
|
13,885
|
|
|
|
|
|
|
|
|||||||
Subtotal measured at net asset value practical expedient
|
$
|
52,989
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Total Fair Value
|
$
|
70,531
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Other Types of Investments:
|
|
|
|
|
|
|
|
||||||||
Mutual Funds - REITS (a)
|
$
|
864
|
|
|
$
|
864
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Subtotal Fair Value
|
$
|
864
|
|
|
$
|
864
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Measured at net asset value practical expedient (c):
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds (b):
|
|
|
|
|
|
|
|
||||||||
Equity Securities - U.S.
|
$
|
15,101
|
|
|
|
|
|
|
|
||||||
Equity Securities - International
|
11,378
|
|
|
|
|
|
|
|
|||||||
Fixed Income
|
15,272
|
|
|
|
|
|
|
|
|||||||
Company Owned Life Insurance (b)
|
15,307
|
|
|
|
|
|
|
|
|||||||
Subtotal measured at net asset value practical expedient
|
$
|
57,058
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Total Fair Value
|
$
|
57,922
|
|
|
|
|
|
|
|
SJG:
|
|
|
|
|
|
|
|
||||||||
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
859
|
|
|
$
|
859
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other Types of Investments:
|
|
|
|
|
|
|
|
||||||||
Mutual Funds - REITS (a)
|
740
|
|
|
740
|
|
|
—
|
|
|
—
|
|
||||
Subtotal Fair Value
|
$
|
1,599
|
|
|
$
|
1,599
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Measured at net asset value practical expedient (c):
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds (b):
|
|
|
|
|
|
|
|
||||||||
Equity Securities - U.S.
|
$
|
12,645
|
|
|
|
|
|
|
|
||||||
Equity Securities - International
|
8,735
|
|
|
|
|
|
|
|
|||||||
Fixed Income
|
13,764
|
|
|
|
|
|
|
|
|||||||
Company Owned Life Insurance (b)
|
13,027
|
|
|
|
|
|
|
|
|||||||
Subtotal measured at net asset value practical expedient
|
$
|
48,171
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Total Fair Value
|
$
|
49,770
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Asset Category
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Other Types of Investments:
|
|
|
|
|
|
|
|
||||||||
Mutual Funds - REITS (a)
|
$
|
777
|
|
|
$
|
777
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Subtotal Fair Value
|
$
|
777
|
|
|
$
|
777
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Measured at net asset value practical expedient (c):
|
|
|
|
|
|
|
|
||||||||
Common/Collective Trust Funds (b):
|
|
|
|
|
|
|
|
||||||||
Equity Securities - U.S.
|
$
|
13,572
|
|
|
|
|
|
|
|
||||||
Equity Securities - International
|
10,226
|
|
|
|
|
|
|
|
|||||||
Fixed Income
|
13,726
|
|
|
|
|
|
|
|
|||||||
Company Owned Life Insurance (b)
|
14,362
|
|
|
|
|
|
|
|
|||||||
Subtotal measured at net asset value practical expedient
|
$
|
51,886
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Total Fair Value
|
$
|
52,663
|
|
|
|
|
|
|
|
(a)
|
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.
|
(b)
|
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. Also included in these funds are interest rate swaps, asset backed securities, mortgage backed securities and other investments with observable market values. This category also 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.
|
(c)
|
Subsequent to the issuance of SJI’s and SJG’s 2017 financial statements, management determined that certain investments classified as Level 2 investments as of December 31, 2017 should have been excluded from the fair value hierarchy table and classified as “investments measured at net asset value practical expedient” as a result of adopting ASU 2015-07 on January 1, 2017. As a result, the table above has been revised to reclassify these investments from Level 2 investments as of December 31, 2017 to investments measured at net asset value practical expedient. The correction of this classification resulted in a decrease in previously reported Level 2 investments as of December 31, 2017 of
$57.1 million
for SJI and
$51.9 million
for SJG and an increase in the classified investments measured at net asset value practical expedient. The correction of this classification had no effect on SJI’s and SJG’s financial statements.
|
SJI (includes SJG and all other consolidated subsidiaries):
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||
2019
|
$
|
21,690
|
|
|
$
|
5,873
|
|
2020
|
$
|
22,382
|
|
|
$
|
5,853
|
|
2021
|
$
|
22,517
|
|
|
$
|
5,811
|
|
2022
|
$
|
23,108
|
|
|
$
|
5,728
|
|
2023
|
$
|
23,883
|
|
|
$
|
5,561
|
|
2024 - 2028
|
$
|
122,192
|
|
|
$
|
24,069
|
|
SJG:
|
Pension Benefits
|
|
Other
Postretirement Benefits
|
||||
2019
|
$
|
12,777
|
|
|
$
|
3,879
|
|
2020
|
$
|
13,265
|
|
|
$
|
3,888
|
|
2021
|
$
|
13,674
|
|
|
$
|
3,817
|
|
2022
|
$
|
14,207
|
|
|
$
|
3,739
|
|
2023
|
$
|
14,788
|
|
|
$
|
3,639
|
|
2024 - 2028
|
$
|
79,003
|
|
|
$
|
15,444
|
|
13.
|
LINES OF CREDIT:
|
Company
|
|
Total Facility
|
|
Usage
|
|
Available Liquidity
|
|
Expiration Date
|
||||||
SJI:
|
|
|
|
|
|
|
|
|
||||||
SJI Syndicated Revolving Credit Facility
|
|
$
|
400,000
|
|
|
$
|
33,100
|
|
(A)
|
$
|
366,900
|
|
|
August 2022
|
Revolving Credit Facility
|
|
50,000
|
|
|
50,000
|
|
|
—
|
|
|
September 2019
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total SJI
|
|
450,000
|
|
|
83,100
|
|
|
366,900
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
SJG:
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Commercial Paper Program/Revolving Credit
Facility
|
|
200,000
|
|
|
108,300
|
|
(B)
|
91,700
|
|
|
August 2022
|
|||
Uncommitted Bank Line
|
|
10,000
|
|
|
|
|
|
10,000
|
|
|
August 2019
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total SJG
|
|
210,000
|
|
|
108,300
|
|
|
101,700
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
ETG/ELK:
|
|
|
|
|
|
|
|
|
||||||
ETG/ELK Revolving Credit Facility
|
|
200,000
|
|
|
86,000
|
|
|
114,000
|
|
|
June 2020
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total
|
|
$
|
860,000
|
|
|
$
|
277,400
|
|
|
$
|
582,600
|
|
|
|
14.
|
LONG-TERM DEBT:
|
4.22%
|
Series 2018A-2 due 2033
|
|
55,000
|
|
|
—
|
|
||
4.29%
|
Series 2018A-3 due 2038
|
|
150,000
|
|
|
—
|
|
||
4.37%
|
Series 2018A-4 due 2048
|
|
200,000
|
|
|
—
|
|
||
4.52%
|
Series 2018A-5 due 2058
|
|
75,000
|
|
|
—
|
|
||
Total SJI Consolidated Long-Term Debt Outstanding (S)
|
|
$
|
2,867,764
|
|
|
$
|
1,204,173
|
|
|
Less SJI Consolidated Current Maturities
|
|
(733,909
|
)
|
|
(63,809
|
)
|
|||
Total SJI Consolidated Long-Term Debt (S)
|
|
$
|
2,133,855
|
|
|
$
|
1,140,364
|
|
(A)
|
Long-term debt maturities for SJI for the succeeding
five
years are as follows (in thousands): 2019:
$733,909
; 2020:
$377,909
; 2021:
$405,409
; 2022:
$66,084
; and 2023:
$40,084
. Long-term debt maturities for SJG for the succeeding
five
years are as follows (in thousands): 2019:
$18,909
; 2020:
$327,909
; 2021:
$27,909
; 2022:
$31,084
; and 2023:
$40,084
. Regarding the debt that is due within one year at SJI, the Company has intentions to either pay down or refinance this debt, see Note 1.
|
(B)
|
In January 2017, SJG entered into a First Mortgage Indenture, which provides for the issuance by SJG of bonds, notes or other securities that are secured by a lien on substantially all of the operating properties and franchises of SJG.
|
(C)
|
In 2018, SJG retired
$10.0 million
of
7.97%
MTN's, along with
$20.0 million
of
7.125%
MTN's.
|
(D)
|
SJG has
$50.0 million
of
3.00%
MTN's, with
$10.0 million
due annually beginning September 2020 with the final payment due September 2024.
|
(E)
|
SJG has
$35.0 million
of
3.03%
MTN's, with
$7.0 million
due annually beginning November 2020 with the final payment due November 2024.
|
(F)
|
SJG pays
$0.9 million
annually toward the principal amount of
3.63%
MTN's, with the final payment to be made December 2025. As such,
$0.9 million
of the total outstanding amount on this debt is classified in current portion of long-term debt on the consolidated balance sheets as it is due within one year.
|
(G)
|
SJG has
$15.0 million
of
4.84%
MTN's, with
$2.5 million
due annually beginning March 2021 with the final payment due March 2026.
|
(H)
|
SJG has
$45.0 million
of
4.93%
MTN's, with
$7.5 million
due annually beginning June 2021 with the final payment due June 2026. SJG also has
$45.0 million
of
4.03%
MTN's, with
$9.0 million
due annually beginning in December 2023 with the final payment due in December 2027.
|
(I)
|
SJG has
$42.0 million
of
4.01%
MTN's with several due dates, as follows:
$8.0 million
due November 2019;
$2.0 million
due November 2025;
$3.0 million
due November 2026;
$8.0 million
due November 2027; and
$7.0 million
each due November 2028, 2029 and 2030.
|
(J)
|
SJG has
$35.0 million
of
3.74%
MTN's, with
$3.175 million
due annually beginning April 2022 with final payment due April 2032.
|
(K)
|
These variable rate demand bonds bear interest at a floating rate that resets weekly. The interest rate as of
December 31, 2018
was
1.78%
. Liquidity support on these bonds is provided under a separate letter of credit facility that expires in August 2021; as such, these bonds are recorded in current portion of long-term debt on the consolidated balance sheets. These bonds contain no financial covenants.
|
(L)
|
In January 2017, SJG entered into an unsecured,
$200.0 million
multiple-draw term loan credit agreement, on which SJG had borrowed the full
$200.0 million
as of December 31, 2017. In 2018, this was paid down, and in October 2018, SJG entered into an unsecured,
$400.0 million
term loan credit agreement (the “Credit Agreement”), which is syndicated among
eight
banks. Under the Credit Agreement, the Company can borrow up to an aggregate of
$400.0 million
from time to time until October 26, 2019. All loans under the Credit Agreement become due and payable on April 26, 2020. As of December 31, 2018, SJG borrowed
$310.0 million
.
|
(M)
|
Proceeds from these debt issuances, which occurred in the second quarter of 2018, were used to fund the Acquisition (see Notes 1 and 20).
|
(N)
|
At
December 31, 2018
, the floating rate on these Senior Notes was
4.38%
.
|
(P)
|
In April 2018, SJI completed a public offering of Equity Units for gross proceeds of
$287.5 million
(see Note 6). As of
December 31, 2018
, these Equity Units were not converted into equity.
|
(Q)
|
At
December 31, 2018
, the floating rate on these Senior Notes was
3.76%
.
|
(R)
|
In December 2018, ETG issued
$530.0 million
aggregate principal amount of its First Mortgage Bonds, Series 2018A, which were issued in
five
Tranches as shown in the table above. These bonds were issued under that First Mortgage Indenture dated as of July 2, 2018 between ETG and a Trustee, as supplemented by that First Supplement dated as of December 20, 2018, pursuant to a BPA dated as of December 20, 2018 between ETG and the purchasers named therein. The proceeds from the sale of these bonds were used to repay short-term indebtedness under a previous
$530.0 million
,
364
-day term loan credit agreement dated as of June 26, 2018 among ETG (Borrower), SJI (Guarantor), the lenders party thereto and Bank of America, N.A., as Administrative Agent. Prior to repayment, the term loans bore interest at a variable base rate or a variable LIBOR at the election of the Company.
|
(S)
|
Total SJI consolidated Long-Term Debt in the table above does not include unamortized debt issuance costs of
$27.0 million
and
$17.4 million
for the years ended
December 31, 2018
and
2017
, respectively. Total SJG Long-Term Debt in the table above does not include unamortized debt issuance costs of
$6.8 million
and
$7.3 million
for the years ended
December 31, 2018
and
2017
, respectively.
|
(T)
|
In July 2018, the interest rates on these senior notes increased
25
basis points per annum due to a rating fee provision included in the respective note purchase agreements. This rating fee provision was triggered upon the S&P downgrading SJI from BBB+ to BBB.
|
15.
|
COMMITMENTS AND CONTINGENCIES:
|
SJI (includes SJG and all other consolidated subsidiaries):
|
2018
|
|
2017
|
||||
Beginning of Year
|
$
|
172,855
|
|
|
$
|
155,013
|
|
Accruals
|
58,706
|
|
|
56,405
|
|
||
Expenditures
|
(51,176
|
)
|
|
(38,563
|
)
|
||
Opening Balance Sheet Adjustment (See Note 20)
|
73,265
|
|
|
—
|
|
||
End of Year
|
$
|
253,650
|
|
|
$
|
172,855
|
|
SJG:
|
2018
|
|
2017
|
||||
Beginning of Year
|
$
|
171,696
|
|
|
$
|
153,047
|
|
Accruals
|
21,695
|
|
|
55,814
|
|
||
Expenditures
|
(45,320
|
)
|
|
(37,165
|
)
|
||
End of Year
|
$
|
148,071
|
|
|
$
|
171,696
|
|
16.
|
DERIVATIVE INSTRUMENTS:
|
|
SJI Consolidated
|
SJG
|
||
Derivative contracts intended to limit exposure to market risk to:
|
|
|
||
Expected future purchases of natural gas (in MMdts)
|
88.6
|
|
8.6
|
|
Expected future sales of natural gas (in MMdts)
|
71.6
|
|
0.7
|
|
Expected future purchases of electricity (in MMmWh)
|
1.7
|
|
—
|
|
Expected future sales of electricity (in MMmWh)
|
1.3
|
|
—
|
|
|
|
|
||
Basis and Index related net purchase/(sale) contracts (in MMdts)
|
54.9
|
|
(1.1
|
)
|
Notional Amount
|
|
Fixed Interest Rate
|
|
Start Date
|
|
Maturity
|
Obligor
|
||
$
|
20,000,000
|
|
|
3.049%
|
|
3/15/2017
|
|
3/15/2027
|
SJI
|
$
|
20,000,000
|
|
|
3.049%
|
|
3/15/2017
|
|
3/15/2027
|
SJI
|
$
|
10,000,000
|
|
|
3.049%
|
|
3/15/2017
|
|
3/15/2027
|
SJI
|
$
|
12,500,000
|
|
|
3.530%
|
|
12/1/2006
|
|
2/1/2036
|
SJG
|
$
|
12,500,000
|
|
|
3.430%
|
|
12/1/2006
|
|
2/1/2036
|
SJG
|
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments under GAAP
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Energy-related commodity contracts:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives - Energy Related - Current
|
|
$
|
54,021
|
|
|
$
|
24,134
|
|
|
$
|
42,139
|
|
|
$
|
46,938
|
|
Derivatives - Energy Related - Non-Current
|
|
7,169
|
|
|
7,256
|
|
|
5,988
|
|
|
6,025
|
|
||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives - Other - Current
|
|
—
|
|
|
588
|
|
|
—
|
|
|
748
|
|
||||
Derivatives - Other - Noncurrent
|
|
—
|
|
|
7,285
|
|
|
—
|
|
|
9,622
|
|
||||
Total derivatives not designated as hedging instruments under GAAP
|
|
$
|
61,190
|
|
|
$
|
39,263
|
|
|
$
|
48,127
|
|
|
$
|
63,333
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Derivatives
|
|
$
|
61,190
|
|
|
$
|
39,263
|
|
|
$
|
48,127
|
|
|
$
|
63,333
|
|
SJG:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments under GAAP
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Energy-related commodity contracts:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related – Current
|
|
$
|
5,464
|
|
|
$
|
2,146
|
|
|
$
|
7,327
|
|
|
$
|
9,270
|
|
Derivatives – Energy Related – Non-Current
|
|
15
|
|
|
43
|
|
|
5
|
|
|
170
|
|
||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives - Other - Current
|
|
—
|
|
|
343
|
|
|
—
|
|
|
389
|
|
||||
Derivatives - Other - Non-Current
|
|
—
|
|
|
5,524
|
|
|
—
|
|
|
6,639
|
|
||||
Total derivatives not designated as hedging instruments under GAAP
|
|
5,479
|
|
|
8,056
|
|
|
7,332
|
|
|
16,468
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total Derivatives
|
|
$
|
5,479
|
|
|
$
|
8,056
|
|
|
$
|
7,332
|
|
|
$
|
16,468
|
|
As of December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Description
|
|
Gross amounts of recognized assets/liabilities
|
|
Gross amount offset in the balance sheet
|
|
Net amounts of assets/liabilities in balance sheet
|
|
Gross amounts not offset in the balance sheet
|
|
Net amount
|
||||||||||||||
|
|
|
|
Financial Instruments
|
|
Cash Collateral Posted
|
|
|||||||||||||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
||||||||||||||||||||||||
Derivatives - Energy Related Assets
|
|
$
|
61,190
|
|
|
$
|
—
|
|
|
$
|
61,190
|
|
|
$
|
(21,045
|
)
|
(A)
|
$
|
(7,252
|
)
|
|
$
|
32,893
|
|
Derivatives - Energy Related Liabilities
|
|
$
|
(31,390
|
)
|
|
$
|
—
|
|
|
$
|
(31,390
|
)
|
|
$
|
21,045
|
|
(B)
|
$
|
—
|
|
|
$
|
(10,345
|
)
|
Derivatives - Other
|
|
$
|
(7,873
|
)
|
|
$
|
—
|
|
|
$
|
(7,873
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7,873
|
)
|
SJG:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives - Energy Related Assets
|
|
$
|
5,479
|
|
|
$
|
—
|
|
|
$
|
5,479
|
|
|
$
|
(347
|
)
|
(A)
|
$
|
688
|
|
|
$
|
5,820
|
|
Derivatives - Energy Related Liabilities
|
|
$
|
(2,189
|
)
|
|
$
|
—
|
|
|
$
|
(2,189
|
)
|
|
$
|
347
|
|
(B)
|
$
|
—
|
|
|
$
|
(1,842
|
)
|
Derivatives - Other
|
|
$
|
(5,867
|
)
|
|
$
|
—
|
|
|
$
|
(5,867
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5,867
|
)
|
As of December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Description
|
|
Gross amounts of recognized assets/liabilities
|
|
Gross amount offset in the balance sheet
|
|
Net amounts of assets/liabilities in balance sheet
|
|
Gross amounts not offset in the balance sheet
|
|
Net amount
|
||||||||||||||
|
|
|
|
Financial Instruments
|
|
Cash Collateral Posted
|
|
|||||||||||||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
||||||||||||||||||||||||
Derivatives - Energy Related Assets
|
|
$
|
48,127
|
|
|
$
|
—
|
|
|
$
|
48,127
|
|
|
$
|
(24,849
|
)
|
(A)
|
$
|
—
|
|
|
$
|
23,278
|
|
Derivatives - Energy Related Liabilities
|
|
$
|
(52,963
|
)
|
|
$
|
—
|
|
|
$
|
(52,963
|
)
|
|
$
|
24,849
|
|
(B)
|
$
|
8,832
|
|
|
$
|
(19,282
|
)
|
Derivatives - Other
|
|
$
|
(10,370
|
)
|
|
$
|
—
|
|
|
$
|
(10,370
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(10,370
|
)
|
SJG:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives - Energy Related Assets
|
|
$
|
7,332
|
|
|
$
|
—
|
|
|
$
|
7,332
|
|
|
$
|
(208
|
)
|
(A)
|
$
|
—
|
|
|
$
|
7,124
|
|
Derivatives - Energy Related Liabilities
|
|
$
|
(9,440
|
)
|
|
$
|
—
|
|
|
$
|
(9,440
|
)
|
|
$
|
208
|
|
(B)
|
$
|
1,543
|
|
|
$
|
(7,689
|
)
|
Derivatives - Other
|
|
$
|
(7,028
|
)
|
|
$
|
—
|
|
|
$
|
(7,028
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7,028
|
)
|
Derivatives in Cash Flow Hedging Relationships under GAAP
|
|
2018
|
|
2017
|
|
2016
|
|
||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
||||||
Losses reclassified from AOCL into income (a)
|
|
$
|
(46
|
)
|
|
$
|
(2,524
|
)
|
|
$
|
(333
|
)
|
|
|
|
|
|
|
|
|
|
||||||
SJG:
|
|
|
|
|
|
|
|
||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
||||||
Losses reclassified from AOCL into income (a)
|
|
$
|
(46
|
)
|
|
$
|
(46
|
)
|
|
(46
|
)
|
|
Derivatives Not Designated as Hedging Instruments under GAAP
|
|
2018
|
|
2017
|
|
2016
|
||||||
SJI (no balances for SJG; includes all other consolidated subsidiaries):
|
|
|
|
|
|
|
||||||
Gains (losses) on energy-related commodity contracts (a)
|
|
$
|
34,509
|
|
|
$
|
(13,667
|
)
|
|
$
|
26,935
|
|
Gains (losses) on interest rate contracts (b)
|
|
1,337
|
|
|
(677
|
)
|
|
647
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
35,846
|
|
|
$
|
(14,344
|
)
|
|
$
|
27,582
|
|
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, 2018
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
||||||||
Available-for-Sale Securities (A)
|
$
|
41
|
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – Energy Related Assets (B)
|
61,190
|
|
|
9,955
|
|
|
23,429
|
|
|
27,806
|
|
||||
|
$
|
61,231
|
|
|
$
|
9,996
|
|
|
$
|
23,429
|
|
|
$
|
27,806
|
|
SJG:
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Assets (B)
|
$
|
5,479
|
|
|
$
|
348
|
|
|
$
|
126
|
|
|
$
|
5,005
|
|
|
$
|
5,479
|
|
|
$
|
348
|
|
|
$
|
126
|
|
|
$
|
5,005
|
|
|
|
|
|
|
|
|
|
||||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Liabilities (B)
|
$
|
31,390
|
|
|
$
|
7,291
|
|
|
$
|
12,354
|
|
|
$
|
11,745
|
|
Derivatives – Other (C)
|
7,873
|
|
|
—
|
|
|
7,873
|
|
|
—
|
|
||||
|
$
|
39,263
|
|
|
$
|
7,291
|
|
|
$
|
20,227
|
|
|
$
|
11,745
|
|
|
|
|
|
|
|
|
|
||||||||
SJG:
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Liabilities (B)
|
$
|
2,189
|
|
|
$
|
1,035
|
|
|
$
|
1,077
|
|
|
$
|
77
|
|
Derivatives – Other (C)
|
5,867
|
|
|
—
|
|
|
5,867
|
|
|
—
|
|
||||
|
$
|
8,056
|
|
|
$
|
1,035
|
|
|
$
|
6,944
|
|
|
$
|
77
|
|
As of December 31, 2017
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
||||||||
Available-for-Sale Securities (A)
|
$
|
36
|
|
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – Energy Related Assets (B)
|
48,127
|
|
|
5,155
|
|
|
21,869
|
|
|
21,103
|
|
||||
|
$
|
48,163
|
|
|
$
|
5,191
|
|
|
$
|
21,869
|
|
|
$
|
21,103
|
|
|
|
|
|
|
|
|
|
||||||||
SJG:
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Assets (B)
|
$
|
7,332
|
|
|
$
|
208
|
|
|
$
|
230
|
|
|
$
|
6,894
|
|
|
$
|
7,332
|
|
|
$
|
208
|
|
|
$
|
230
|
|
|
$
|
6,894
|
|
|
|
|
|
|
|
|
|
||||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Liabilities (B)
|
$
|
52,963
|
|
|
$
|
10,687
|
|
|
$
|
24,283
|
|
|
$
|
17,993
|
|
Derivatives – Other (C)
|
10,370
|
|
|
—
|
|
|
10,370
|
|
|
—
|
|
||||
|
$
|
63,333
|
|
|
$
|
10,687
|
|
|
$
|
34,653
|
|
|
$
|
17,993
|
|
|
|
|
|
|
|
|
|
||||||||
SJG:
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Liabilities (B)
|
$
|
9,440
|
|
|
$
|
1,750
|
|
|
$
|
2,848
|
|
|
$
|
4,842
|
|
Derivatives – Other (C)
|
7,028
|
|
|
—
|
|
|
7,028
|
|
|
—
|
|
||||
|
$
|
16,468
|
|
|
$
|
1,750
|
|
|
$
|
9,876
|
|
|
$
|
4,842
|
|
Type
|
Fair Value at December 31, 2018
|
Valuation Technique
|
Significant Unobservable Input
|
Range [Weighted Average]
|
|
|||||
|
Assets
|
Liabilities
|
|
|
|
|
||||
Forward Contract - Natural Gas
|
$
|
20,706
|
|
$
|
8,976
|
|
Discounted Cash Flow
|
Forward price (per dt)
|
$1.56 - $9.00 [$3.12]
|
(A)
|
Forward Contract - Electric
|
$
|
7,100
|
|
$
|
2,769
|
|
Discounted Cash Flow
|
Fixed electric load profile (on-peak)
|
0.00% - 100.00% [54.55%]
|
(B)
|
Fixed electric load profile (off-peak)
|
0.00% - 100.00% [45.45%]
|
(B)
|
Type
|
Fair Value at December 31, 2017
|
Valuation Technique
|
Significant Unobservable Input
|
Range [Weighted Average]
|
|
|||||
|
Assets
|
Liabilities
|
|
|
|
|
||||
Forward Contract - Natural Gas
|
$
|
13,519
|
|
$
|
15,686
|
|
Discounted Cash Flow
|
Forward price (per dt)
|
$1.79 - $12.09 [$3.01]
|
(A)
|
Forward Contract - Electric
|
$
|
7,584
|
|
$
|
2,307
|
|
Discounted Cash Flow
|
Fixed electric load profile (on-peak)
|
36.36% - 100.00% [53.39%]
|
(B)
|
Fixed electric load profile (off-peak)
|
0.00% - 63.64% [46.61%]
|
(B)
|
Type
|
Fair Value at December 31, 2017
|
Valuation Technique
|
Significant Unobservable Input
|
Range [Weighted Average]
|
|
|||||
|
Assets
|
Liabilities
|
|
|
|
|
||||
Forward Contract - Natural Gas
|
$
|
6,894
|
|
$
|
4,842
|
|
Discounted Cash Flow
|
Forward price (per dt)
|
$2.42 - $6.67 [$5.25]
|
(A)
|
|
|
Year Ended December 31, 2018
|
||
Balance at January 1, 2018
|
|
$
|
3,110
|
|
Other changes in fair value from continuing and new contracts, net
|
|
14,418
|
|
|
Settlements
|
|
(1,467
|
)
|
|
|
|
|
||
Balance at December 31, 2018
|
|
$
|
16,061
|
|
|
|
Year Ended December 31, 2017
|
||
Balance at January 1, 2017
|
|
$
|
9,035
|
|
Other changes in fair value from continuing and new contracts, net
|
|
1,857
|
|
|
Transfers in to/(out of) of Level 3 (A)
|
|
(954
|
)
|
|
Settlements
|
|
(6,828
|
)
|
|
|
|
|
||
Balance at December 31, 2017
|
|
$
|
3,110
|
|
|
|
Year Ended December 31, 2018
|
||
Balance at January 1, 2018
|
|
$
|
2,052
|
|
Other changes in fair value from continuing and new contracts, net
|
|
4,928
|
|
|
Settlements
|
|
(2,052
|
)
|
|
|
|
|
||
Balance at December 31, 2018
|
|
$
|
4,928
|
|
|
|
Year Ended December 31, 2017
|
||
Balance at January 1, 2017
|
|
$
|
926
|
|
Other changes in fair value from continuing and new contracts, net
|
|
2,258
|
|
|
Transfers in to/(out of) of Level 3 (A)
|
|
(206
|
)
|
|
Settlements
|
|
(926
|
)
|
|
|
|
|
||
Balance at December 31, 2017
|
|
$
|
2,052
|
|
|
Postretirement Liability Adjustment (A)
|
|
Unrealized Gain (Loss) on Derivatives-Other (A)
|
|
Unrealized Gain (Loss) on Available-for-Sale Securities (A)
|
|
Other Comprehensive Income (Loss) of Affiliated Companies (A)
|
|
Total
|
||||||||||
Balance at January 1, 2018
|
$
|
(36,262
|
)
|
|
$
|
(396
|
)
|
|
$
|
(10
|
)
|
|
$
|
(97
|
)
|
|
$
|
(36,765
|
)
|
Other comprehensive income before reclassifications
|
10,636
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,636
|
|
|||||
Amounts reclassified from AOCL (B)
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|||||
Net current period other comprehensive income
|
10,636
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
10,670
|
|
|||||
Balance at December 31, 2018
|
$
|
(25,626
|
)
|
|
$
|
(362
|
)
|
|
$
|
(10
|
)
|
|
$
|
(97
|
)
|
|
$
|
(26,095
|
)
|
|
Amounts Reclassified from AOCL
|
|
Affected Line Item in the Statements of Consolidated Income
|
||||
For the Year Ended December 31, 2018
|
|
||||||
Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges
|
$
|
46
|
|
|
Interest Charges
|
||
Income Taxes
|
(12
|
)
|
|
Income Taxes (a)
|
|||
|
$
|
34
|
|
|
|
|
Postretirement Liability Adjustment (A)
|
|
Unrealized Gain (Loss) on Derivatives-Other (A)
|
|
Total
|
||||||
Balance at January 1, 2018
|
(25,507
|
)
|
|
(490
|
)
|
|
$
|
(25,997
|
)
|
||
Other comprehensive loss before
reclassifications
|
3,606
|
|
|
—
|
|
|
3,606
|
|
|||
Amounts reclassified from AOCL (B)
|
—
|
|
|
34
|
|
|
34
|
|
|||
Net current period other comprehensive loss
|
3,606
|
|
|
34
|
|
|
3,640
|
|
|||
Balance at December 31, 2018
|
$
|
(21,901
|
)
|
|
$
|
(456
|
)
|
|
$
|
(22,357
|
)
|
|
|
|
|
|
|
Components of AOCL
|
Amounts Reclassified from AOCL
|
|
Affected Line Item in the Statements of Income
|
||
For the Year Ended December 31, 2018
|
|
||||
Unrealized Loss on Derivatives-Other - Interest Rate Contracts designated as cash flow hedges
|
$
|
46
|
|
|
Interest Charges
|
Income Taxes
|
(12
|
)
|
|
Income Taxes (a)
|
|
|
$
|
34
|
|
|
|
•
|
SJI and SJG have elected the Practical Expedient in ASC 606 for recognizing revenue on contracts with customers on a portfolio of performance obligations with similar characteristics, as we reasonably expect the effects of applying the guidance to the portfolio would not differ materially from applying it to individual contracts.
|
•
|
SJI and SJG apply the accounting guidance for recognizing revenue on contracts with customers on a series of distinct goods and services as one performance obligation, as long as the distinct goods and services are part of a series that are substantially the same and satisfied over time, and the same method would be used to measure progress towards satisfaction of the performance obligation. All performance obligations noted below under "Revenue Recognized Over Time" apply this guidance.
|
Revenue Recognized at a Point in Time:
|
||
Reportable Segment
|
Performance Obligation
|
Description
|
On-Site Energy Production
|
SREC's
|
The customer is billed based on a contracted amount of SREC's to be sold, with the price based on the market price of the SRECs at the time of generation. This does not represent variable consideration as the price is known and established at the time of generation and delivery to the customer. The performance obligation is satisfied at the point in time the SREC is delivered to the customer, which is when revenue is recognized. Payment terms are approximately 10 days subsequent to delivery. As disclosed in Note 1, SJI has entered into an agreement to sell SREC's generated to a third party; as a result, no revenue with customers from SREC agreements was recorded since this agreement was signed.
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Year Ended December 31, 2018
|
||||||||||||||||||||||||||||||
|
SJG Utility Operations
|
ETG Utility Operations
|
ELK Utility Operations
|
Wholesale Energy Operations
|
Retail Gas Operations
|
Retail Electric Operations
|
On-site Energy Production
|
Appliance Service Operations
|
Corporate Services and Intersegment
|
Total
|
||||||||||||||||||||
Customer Type:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Residential
|
$
|
329,207
|
|
$
|
82,763
|
|
$
|
1,482
|
|
|
|
$
|
29,762
|
|
—
|
|
$
|
1,957
|
|
—
|
|
$
|
445,171
|
|
||||||
Commercial & Industrial
|
132,055
|
|
42,935
|
|
1,815
|
|
652,833
|
|
75,651
|
|
94,483
|
|
72,374
|
|
—
|
|
(24,392
|
)
|
1,047,754
|
|
||||||||||
OSS & Capacity Release
|
11,536
|
|
|
—
|
|
|
|
|
—
|
|
—
|
|
—
|
|
11,536
|
|
||||||||||||||
Other
|
2,699
|
|
2,949
|
|
65
|
|
|
|
|
—
|
|
—
|
|
—
|
|
5,713
|
|
|||||||||||||
|
$
|
475,497
|
|
$
|
128,647
|
|
$
|
3,362
|
|
$
|
652,833
|
|
$
|
75,651
|
|
$
|
124,245
|
|
$
|
72,374
|
|
$
|
1,957
|
|
$
|
(24,392
|
)
|
$
|
1,510,174
|
|
Product Line:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Gas
|
$
|
475,497
|
|
$
|
128,647
|
|
$
|
3,362
|
|
$
|
652,833
|
|
$
|
75,651
|
|
|
|
—
|
|
$
|
(10,181
|
)
|
$
|
1,325,809
|
|
|||||
Electric
|
|
|
|
|
|
124,245
|
|
|
—
|
|
(7,904
|
)
|
116,341
|
|
||||||||||||||||
Solar
|
|
|
|
|
|
|
35,444
|
|
—
|
|
(6,307
|
)
|
29,137
|
|
||||||||||||||||
CHP
|
|
|
|
|
|
|
30,473
|
|
—
|
|
—
|
|
30,473
|
|
||||||||||||||||
Landfills
|
|
|
|
|
|
|
6,457
|
|
—
|
|
—
|
|
6,457
|
|
||||||||||||||||
Other
|
|
|
|
|
|
|
|
1,957
|
|
—
|
|
1,957
|
|
|||||||||||||||||
|
$
|
475,497
|
|
$
|
128,647
|
|
$
|
3,362
|
|
$
|
652,833
|
|
$
|
75,651
|
|
$
|
124,245
|
|
$
|
72,374
|
|
$
|
1,957
|
|
$
|
(24,392
|
)
|
$
|
1,510,174
|
|
(in thousands)
|
ETG and ELK
|
||
Property, Plant and Equipment
|
$
|
1,089,342
|
|
Accounts Receivable
|
45,875
|
|
|
Provision for Uncollectibles
|
(6,579
|
)
|
|
Natural Gas in Storage
|
12,204
|
|
|
Materials and Supplies
|
345
|
|
|
Other Prepayments and Current Assets
|
200
|
|
|
Deferred Income Taxes
|
21,024
|
|
|
Regulatory Assets
|
136,213
|
|
|
Goodwill
|
731,029
|
|
|
Total assets acquired
|
2,029,653
|
|
|
Accounts Payable
|
13,089
|
|
|
Other Current Liabilities
|
9,185
|
|
|
Environmental Remediation Costs - Current
|
7,100
|
|
|
Pension and Other Postretirement Benefits
|
3,213
|
|
|
Environmental Remediation Costs - Non Current
|
66,165
|
|
|
Regulatory Liabilities
|
189,509
|
|
|
Other
|
1,107
|
|
|
Total liabilities assumed
|
289,368
|
|
|
Total net assets acquired
|
$
|
1,740,285
|
|
(In thousands, except per share data)
|
|
Year Ended December 31
|
||||||
|
|
2018
|
|
2017
|
||||
Revenues
|
|
$
|
1,829,823
|
|
|
$
|
1,555,124
|
|
Net (loss) income
|
|
$
|
74,770
|
|
|
$
|
(9,824
|
)
|
Earnings (loss) per share
|
|
$
|
0.89
|
|
|
$
|
(0.11
|
)
|
|
2018
|
2017
|
||||
Beginning Balance, January 1
|
$
|
3,578
|
|
$
|
4,838
|
|
Impairment of Goodwill
|
—
|
|
(1,260
|
)
|
||
Goodwill from Acquisition
|
756,247
|
|
—
|
|
||
Fair Value Adjustments During Measurement Period
|
(25,218
|
)
|
—
|
|
||
Ending Balance, December 31
|
$
|
734,607
|
|
$
|
3,578
|
|
22.
|
SUBSEQUENT EVENTS:
|
Cost of Sales (excluding depreciation)
|
|
89,808
|
|
|
19,379
|
|
|
16,079
|
|
|
84,383
|
|
|
72,424
|
|
|
33,644
|
|
|
29,499
|
|
|
68,865
|
|
||||||||
Operations, Depreciation and Maintenance Including Fixed Charges (See Note 1)
|
|
57,323
|
|
|
55,480
|
|
|
53,239
|
|
|
63,386
|
|
|
47,748
|
|
|
46,077
|
|
|
46,877
|
|
|
54,221
|
|
||||||||
Income Taxes
|
|
21,836
|
|
|
482
|
|
|
(2,818
|
)
|
|
6,913
|
|
|
29,911
|
|
|
1,431
|
|
|
(3,688
|
)
|
|
18,046
|
|
||||||||
Energy and Other Taxes
|
|
1,255
|
|
|
498
|
|
|
988
|
|
|
1,505
|
|
|
1,295
|
|
|
872
|
|
|
865
|
|
|
697
|
|
||||||||
Total Expenses
|
|
170,222
|
|
|
75,839
|
|
|
67,488
|
|
|
156,187
|
|
|
151,378
|
|
|
82,024
|
|
|
73,553
|
|
|
141,829
|
|
||||||||
Other Income and Expense (See Note 1)
|
|
2,510
|
|
|
607
|
|
|
2,141
|
|
|
(573
|
)
|
|
1,042
|
|
|
1,039
|
|
|
1,027
|
|
|
979
|
|
||||||||
Net Income (Loss)
|
|
$
|
66,747
|
|
|
$
|
1,569
|
|
|
$
|
(8,976
|
)
|
|
$
|
23,609
|
|
|
$
|
46,478
|
|
|
$
|
2,266
|
|
|
$
|
(5,771
|
)
|
|
$
|
29,584
|
|
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
|
|
|
|
|
|
|
Common Stock Underwriting Agreement, dated as of April 18, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 1.1 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
Equity Units Underwriting Agreement, dated as of April 18, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 1.2 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
Asset Purchase Agreement, dated as of October 15, 2017, by and between Pivotal Utility Holdings, Inc. and South Jersey Industries, Inc.
|
|
Incorporated by reference from Exhibit 2.1 of Form 8-K of SJI as filed October 16, 2017.
|
|
|
|
|
|
|
|
Asset Purchase Agreement, dated as of June 27, 2018, by and between Marina and GSRP Project Holdings I, LLC.
|
|
Incorporated by reference from Exhibit 2.1 of Form 8-K of SJI as filed July 3, 2018.
|
|
|
|
|
|
|
|
Solar Renewable Energy Certificate Purchase and Sale Agreement, dated as of June 27, 2018, by and between Marina and GSRP Project Holdings I, LLC.
|
|
Incorporated by reference from Exhibit 2.2 of Form 8-K of SJI as filed July 3, 2018.
|
|
|
|
|
|
|
|
Fifth Amendment Asset Purchase Agreement dated as of February 27, 2019 by and between Marina and GSRP Project Holdings I, LLC (filed herewith).
|
|
|
|
|
|
|
|
|
|
Certificate of Incorporation of South Jersey Industries, Inc., dated November 10, 1969.
|
|
Incorporated by reference from Exhibit 3.1 of Form 8-K of SJI as filed May 10, 2016.
|
|
|
|
|
|
|
|
Certificate of Amendment of the Certificate of Incorporation of SJI, dated April 21, 1983.
|
|
Incorporated by reference from Exhibit 3.2 of Form 8-K of SJI as filed May 10, 2016.
|
|
|
|
|
|
|
|
Certificate of Amendment of the Certificate of Incorporation of SJI, dated April 19, 1984.
|
|
Incorporated by reference from Exhibit 3.3 of Form 8-K of SJI as filed May 10, 2016.
|
|
|
|
|
|
|
|
Certificate of Amendment of the Certificate of Incorporation of SJI, dated April 23, 1987.
|
|
Incorporated by reference from Exhibit 3.4 of Form 8-K of SJI as filed May 10, 2016.
|
|
Certificate of Amendment of the Certificate of Incorporation of SJI, dated October 7, 1996.
|
|
Incorporated by reference from Exhibit 3.6 of Form 8-K of SJI as filed May 10, 2016.
|
|
|
|
|
|
|
|
Certificate of Amendment of the Certificate of Incorporation of SJI, dated May 5, 2005.
|
|
Incorporated by reference from Exhibit 3.7 of Form 8-K of SJI as filed May 10, 2016.
|
|
|
|
|
|
|
|
Certificate of Amendment of the Certificate of Incorporation of SJI, dated April 28, 2009.
|
|
Incorporated by reference from Exhibit 3.8 of Form 8-K of SJI as filed May 10, 2016.
|
|
|
|
|
|
|
|
Certificate of Amendment of the Certificate of Incorporation of SJI, dated June 2014.
|
|
Incorporated by reference from Exhibit 3.9 of Form 8-K of SJI as filed May 10, 2016.
|
|
|
|
|
|
|
|
Certificate of Amendment of the Certificate of Incorporation of SJI, dated February 27, 2015.
|
|
Incorporated by reference from Exhibit 3.10 of Form 8-K of SJI as filed May 10, 2016.
|
|
|
|
|
|
|
|
Certificate of Incorporation of South Jersey Gas Company.
|
|
Incorporated by reference from Exhibit 3(a) of Form 10-K of SJG as filed March 26, 1997.
|
|
|
|
|
|
|
|
Bylaws of South Jersey Industries, Inc. as amended and restated through April 21, 2017.
|
|
Incorporated by reference from Exhibit 3.2(ii) of Form 8-K of SJI as filed April 24, 2017.
|
|
|
|
|
|
|
|
Bylaws of South Jersey Gas Company as amended and restated through April 21, 2017.
|
|
Incorporated by reference from Exhibit 3.2(ii) of Form 8-K of SJG as filed April 24, 2017.
|
|
|
|
|
|
|
|
Form of Stock Certificate for common stock.
|
|
Incorporated by reference from Exhibit 4.9 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
Junior Subordinated Indenture, dated as of April 23, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 4.1 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
First Supplemental Indenture, dated as of April 23, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 4.2 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
Form of 2018 Series A 3.70% Remarketable Junior Subordinated Notes due 2031, dated as of April 23, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 4.3 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
Purchase Contract and Pledge Agreement, dated as of April 23, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 4.4 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
Form of Remarketing Agreement, dated as of April 23, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 4.5 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
Form of Corporate Units, dated as of April 23, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 4.6 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
Form of Treasury Units, dated as of April 23, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 4.7 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
Forward Sale Agreement, dated, April 18, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 4.8 of Form 8-K of SJI as filed April 23, 2018.
|
|
|
|
|
|
|
|
First Mortgage Indenture, dated as of July 2, 2018, for ETG.
|
|
Incorporated by reference from Exhibit 4.1 of Form 8-K of SJI as filed December 26, 2018.
|
|
|
|
|
|
|
|
First Supplemental Indenture, dated as of December 20, 2018, for ETG.
|
|
Incorporated by reference from Exhibit 4.2 of Form 8-K of SJI as filed December 26, 2018.
|
|
|
|
|
|
|
|
Supplemental Indenture Amending and Restating First Mortgage Indenture, dated as of January 23, 2017, for SJG.
|
|
Incorporated by reference from Exhibit 4.1 of Form 8-K of SJG dated January 30, 2017.
|
|
|
|
|
|
|
|
First Supplemental Indenture, dated as of January 23, 2017, for SJG
|
|
Incorporated by reference from Exhibit 4.2 of Form 8-K of SJG dated January 30, 2017.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
Fifth Supplement, dated as of January 25, 2017, for SJG
|
|
Incorporated by reference from Exhibit 4.3 of Form 8-K of SJG dated January 30, 2017.
|
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|
Reference
|
|
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).
|
|
|
|
|
|
|
|
Schedule of Deferred Compensation Agreements.
|
|
Incorporated by reference from Exhibit (10)(l)(b) of Form 10-K for 1997 (1-6364).
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
Schedule of Officer Agreements (filed herewith).
|
|
|
|
|
|
|
|
|
|
Officer Severance Plan.
|
|
Incorporated by reference from Exhibit (10)(f)(i) of Form 10-K for 2014.
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
Term Loan Credit Agreement, dated as of October 28, 2015, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated November 2, 2015.
|
|
|
|
|
|
|
|
First Amendment to Letter of Credit Reimbursement Agreements dated as of March 10, 2016.
|
|
Incorporated by reference from Exhibit 10.1-10.3 of Form 8-K of SJI dated March 11, 2016.
|
|
|
|
|
|
|
|
364-Day Revolving Credit Agreement, dated as of September 7, 2016, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated September 9, 2016.
|
|
|
|
|
|
|
|
Note Purchase Agreement, dated as of January 25, 2017, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated January 30, 2017.
|
|
|
|
|
|
|
|
Term Loan Credit Agreement, dated as of January 26, 2017, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated January 30, 2017.
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
Five-Year Revolving Credit Agreement, dated as of August 7, 2017, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated August 10, 2017.
|
|
|
|
|
|
|
|
Five-Year Revolving Credit Agreement, dated as of August 14, 2017, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated August 15, 2017.
|
|
|
|
|
|
|
|
Note Purchase Agreement, dated as of August 16, 2017, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated January 19, 2018.
|
|
|
|
|
|
|
First Amendment to 364-Day Revolving Credit Agreement, dated as of September 6, 2017, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated September 6, 2017.
|
|
|
|
|
|
|
|
Note Purchase Agreement, dated as of April 25, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated April 27, 2018.
|
|
|
|
|
|
|
|
Floating Rate Note Purchase Agreement, dated as of June 20, 2018, for SJI.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated June 26, 2018.
|
|
|
|
|
|
|
|
Term Loan Credit Agreement, dated as of June 26, 2018, for ETG (Borrower) and SJI (Guarantor).
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated July 2, 2018.
|
|
|
|
|
|
|
|
Revolving Credit Agreement, dated as of June 26, 2018, for ETG and ELK (Borrowers) and SJI (Guarantor).
|
|
Incorporated by reference from Exhibit 10.2 of Form 8-K of SJI dated July 2, 2018.
|
|
|
|
|
|
|
|
Second Amendment to the Note Purchase Agreement (dated as of June 28, 2012) for SJI, dated as of July 3, 2018.
|
|
Incorporated by reference from Exhibit 99.1 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
Second Amendment to the Note Purchase Agreement (dated as of June 26, 2014) for SJI, dated as of July 3, 2018.
|
|
Incorporated by reference from Exhibit 99.2 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
Second Amendment to the Note Purchase Agreement (dated as of August 16, 2017) for SJI, dated as of July 3, 2018.
|
|
Incorporated by reference from Exhibit 99.3 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
First Amendment to the Note Purchase Agreement (dated as of April 25, 2018) for SJI, dated as of July 3, 2018.
|
|
Incorporated by reference from Exhibit 99.4 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
First Amendment to the Note Purchase Agreement (dated as of March 1, 2010) for SJG, dated as of July 3, 2018.
|
|
Incorporated by reference from Exhibit 99.5 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
First Amendment to the Note Purchase Agreement (dated as of December 30, 2010) for SJG, dated as of July 3, 2018.
|
|
Incorporated by reference from Exhibit 99.6 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
First Amendment to the Note Purchase Agreement (dated as of April 2, 2012) for SJG, dated as of July 3, 2018.
|
|
Incorporated by reference from Exhibit 99.7 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
Second Amendment to the Note Purchase Agreement (dated as of September 20, 2012) for SJG, dated as of July 3, 2018.
|
|
Incorporated by reference from Exhibit 99.8 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
First Amendment to the Note Purchase Agreement (dated as of November 21, 2013) for SJG, dated as of July 3, 2018.
|
|
Incorporated by reference from Exhibit 99.9 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
First Amendment to the Note Purchase Agreement (dated as of January 25, 2017) for SJG, dated as of July 3, 2018.
|
|
Incorporated by reference from Exhibit 99.10 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
First Amendment to the Five-Year Revolving Credit Agreement (dated as of August 14, 2017) for SJG, dated as of June 14, 2018.
|
|
Incorporated by reference from Exhibit 99.11 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
First Amendment to the Term Loan Credit Agreement (dated as of January 26, 2017) for SJG, dated as of June 15, 2018.
|
|
Incorporated by reference from Exhibit 99.12 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
Third Amendment to the 364-Day Revolving Credit Agreement (dated as of September 6, 2016) for SJI, dated as of June 13, 2018.
|
|
Incorporated by reference from Exhibit 99.13 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
Second Amendment to the Five-Year Revolving Credit Agreement (dated as of August 7, 2017) for SJI, dated as of June 14, 2018.
|
|
Incorporated by reference from Exhibit 99.14 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
Second Amendment to the Term Loan Credit Agreement (dated as of October 28, 2015) for SJI, dated as of June 26, 2018.
|
|
Incorporated by reference from Exhibit 99.15 of Form 8-K of SJI dated July 10, 2018.
|
|
|
|
|
|
|
|
Term Loan Credit Agreement, dated as of October 26, 2018, for SJG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJG dated October 31, 2018.
|
|
|
|
|
|
|
|
Bond Purchase Agreement, dated as of December 20, 2018, for ETG.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated December 26, 2018.
|
|
|
|
|
|
|
|
Equity Distribution and Purchase Agreement, dated as of December 31, 2015, by and among Energenic, Marina and DCO Energy, LLC.
|
|
Incorporated by reference from Exhibit 10.1 of Form 8-K of SJI dated January 7, 2016.
|
|
|
|
|
|
|
|
Equity Distribution and Purchase Agreement, dated as of December 31, 2015, by and among Energenic, DCO Energy, LLC and Marina.
|
|
Incorporated by reference from Exhibit 10.2 of Form 8-K of SJI dated January 7, 2016.
|
|
|
|
|
|
|
|
Code of Ethics.
|
|
Incorporated by reference from Exhibit 14 of Form 10-K for 2007.
|
|
|
|
|
|
|
|
SJI - Subsidiaries of the Registrant (filed herewith).
|
|
|
|
|
|
|
|
|
|
Independent Registered Public Accounting Firm's Consent (filed herewith).
|
|
|
|
|
|
|
|
|
|
SJI - Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
|
|
SJG - Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
|
|
SJI - Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
|
|
SJG - Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
|
|
SJI - Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
|
|
SJG - Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
|
|
SJI - Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
|
|
|
|
|
|
SJG - Certification of Principal 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/ Cielo Hernandez
|
|
|
|
Cielo Hernandez
|
|
|
|
Senior Vice President & Chief Financial Officer
|
|
|
Date:
|
February 27, 2019
|
|
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ Walter M. Higgins, III
|
|
Director, Chairman of the Board
|
February 27, 2019
|
(Walter M. Higgins, III)
|
|
|
|
|
|
|
|
/s/ Michael J. Renna
|
|
Director, President & Chief Executive Officer
|
February 27, 2019
|
(Michael J. Renna)
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Cielo Hernandez
|
|
Senior Vice President & Chief Financial Officer
|
February 27, 2019
|
(Cielo Hernandez)
|
|
(Principal Financial & Accounting Officer)
|
|
|
|
|
|
/s/ Sarah M. Barpoulis
|
|
Director
|
February 27, 2019
|
(Sarah M. Barpoulis)
|
|
|
|
|
|
|
|
/s/ Thomas A. Bracken
|
|
Director
|
February 27, 2019
|
(Thomas A. Bracken)
|
|
|
|
|
|
|
|
/s/ Keith S. Campbell
|
|
Director
|
February 27, 2019
|
(Keith S. Campbell)
|
|
|
|
|
|
|
|
/s/ Victor A. Fortkiewicz
|
|
Director
|
February 27, 2019
|
(Victor A. Fortkiewicz)
|
|
|
|
|
|
|
|
/s/ Sheila Hartnett-Devlin
|
|
Director
|
February 27, 2019
|
(Sheila Hartnett-Devlin)
|
|
|
|
|
|
|
|
/s/ Sunita Holzer
|
|
Director
|
February 27, 2019
|
(Sunita Holzer)
|
|
|
|
|
|
|
|
/s/ Joseph M. Rigby
|
|
Director
|
February 27, 2019
|
(Joseph M. Rigby)
|
|
|
|
|
|
|
|
/s/ Frank L. Sims
|
|
Director
|
February 27, 2019
|
(Frank L. Sims)
|
|
|
|
|
|
SOUTH JERSEY GAS COMPANY
|
|
BY:
|
/s/ Ann T. Anthony
|
|
|
Ann T. Anthony
|
|
|
Treasurer - SJG
|
|
Date:
|
February 27, 2019
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ David Robbins, Jr.
|
|
President
|
|
February 27, 2019
|
(David Robbins, Jr.)
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Ann T. Anthony
|
|
Treasurer
|
|
February 27, 2019
|
(Ann T. Anthony)
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Walter M. Higgins III
|
|
Director, Chairman of the Board
|
|
February 27, 2019
|
(Walter M. Higgins III)
|
|
|
|
|
|
|
|
|
|
/s/ Thomas A. Bracken
|
|
Director
|
|
February 27, 2019
|
(Thomas A. Bracken)
|
|
|
|
|
|
|
|
|
|
/s/ Victor A. Fortkiewicz
|
|
Director
|
|
February 27, 2019
|
(Victor A. Fortkiewicz)
|
|
|
|
|
|
|
|
|
|
/s/ Sunita Holzer
|
|
Director
|
|
February 27, 2019
|
(Sunita Holzer)
|
|
|
|
|
|
|
|
|
|
/s/ Joseph M. Rigby
|
|
Director
|
|
February 27, 2019
|
(Joseph M. Rigby)
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Management Service Fee Revenues
|
|
$
|
42,934
|
|
|
$
|
34,321
|
|
|
$
|
25,463
|
|
|
|
|
|
|
|
|
||||||
Operating Expenses:
|
|
|
|
|
|
|
||||||
Operations
|
|
67,869
|
|
|
43,513
|
|
|
22,194
|
|
|||
Depreciation
|
|
600
|
|
|
311
|
|
|
377
|
|
|||
Energy and Other Taxes
|
|
1,517
|
|
|
1,324
|
|
|
1,033
|
|
|||
Total Operating Expenses
|
|
69,986
|
|
|
45,148
|
|
|
23,604
|
|
|||
|
|
|
|
|
|
|
||||||
Operating (Loss) Income
|
|
(27,052
|
)
|
|
(10,827
|
)
|
|
1,859
|
|
|||
|
|
|
|
|
|
|
||||||
Other Income:
|
|
|
|
|
|
|
||||||
Equity in Earnings (Losses) of Subsidiaries (See Note 1)
|
|
65,327
|
|
|
(2,793
|
)
|
|
119,061
|
|
|||
Other
|
|
17,608
|
|
|
15,083
|
|
|
10,295
|
|
|||
|
|
|
|
|
|
|
|
|||||
Total Other Income
|
|
82,935
|
|
|
12,290
|
|
|
129,356
|
|
|||
|
|
|
|
|
|
|
||||||
Interest Charges
|
|
54,678
|
|
|
23,818
|
|
|
12,148
|
|
|||
Income Taxes
|
|
(16,698
|
)
|
|
(18,951
|
)
|
|
6
|
|
|||
|
|
|
|
|
|
|
||||||
Income (Loss) from Continuing Operations
|
|
17,903
|
|
|
(3,404
|
)
|
|
119,061
|
|
|||
|
|
|
|
|
|
|
||||||
Equity in Undistributed Earnings of Discontinued Operations
|
|
(240
|
)
|
|
(86
|
)
|
|
(251
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net Income (Loss)
|
|
$
|
17,663
|
|
|
$
|
(3,490
|
)
|
|
$
|
118,810
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Net Income (Loss)
|
|
$
|
17,663
|
|
|
$
|
(3,490
|
)
|
|
$
|
118,810
|
|
Other Comprehensive Income (Loss) - Net of Tax
|
|
|
|
|
|
|
||||||
Postretirement Liability Adjustment (A)
|
|
10,636
|
|
|
(10,920
|
)
|
|
(3,197
|
)
|
|||
Unrealized Gain on Available-for-Sale Securities (B)
|
|
—
|
|
|
—
|
|
|
118
|
|
|||
Unrealized Gain on Derivatives - Other (B)
|
|
34
|
|
|
1,536
|
|
|
197
|
|
|||
Total Other Comprehensive Income (Loss) - Net of Tax
|
|
10,670
|
|
|
(9,384
|
)
|
|
(2,882
|
)
|
|||
|
|
|
|
|
|
|
||||||
Comprehensive Income (Loss)
|
|
$
|
28,333
|
|
|
$
|
(12,874
|
)
|
|
$
|
115,928
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Retained Earnings - Beginning
|
|
$
|
420,351
|
|
|
$
|
510,597
|
|
|
$
|
474,167
|
|
Net Income (Loss)
|
|
17,663
|
|
|
(3,490
|
)
|
|
118,810
|
|
|||
|
|
438,014
|
|
|
507,107
|
|
|
592,977
|
|
|||
|
|
|
|
|
|
|
||||||
Dividends Declared - Common Stock
|
|
(94,756
|
)
|
|
(87,308
|
)
|
|
(82,380
|
)
|
|||
Excess Tax Benefit on Restricted Stock
|
|
—
|
|
|
552
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Retained Earnings - Ending
|
|
$
|
343,258
|
|
|
$
|
420,351
|
|
|
$
|
510,597
|
|
|
||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
||||||
CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
|
$
|
(6,447
|
)
|
|
$
|
17,339
|
|
|
$
|
20,507
|
|
|
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Net Repayments from (Advances to) Associated Companies
|
|
366,342
|
|
|
(16,096
|
)
|
|
32,300
|
|
|||
Capital Expenditures
|
|
(24,155
|
)
|
|
(801
|
)
|
|
(345
|
)
|
|||
Cash Paid for Acquisition
|
|
(1,740,291
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from Sale of PPE
|
|
51
|
|
|
—
|
|
|
—
|
|
|||
Purchase of Company Owned Life Insurance
|
|
(1,298
|
)
|
|
(9,180
|
)
|
|
(2,398
|
)
|
|||
Investment in Affiliate
|
|
—
|
|
|
(40,000
|
)
|
|
(65,000
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net Cash Used in Investing Activities
|
|
(1,399,351
|
)
|
|
(66,077
|
)
|
|
(35,443
|
)
|
|||
|
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
||||||
Proceeds from Issuance of Long Term Debt
|
|
1,592,500
|
|
|
50,000
|
|
|
—
|
|
|||
Principal Repayments of Long Term Debt
|
|
—
|
|
|
(16,000
|
)
|
|
—
|
|
|||
Payments for Issuance of Long Term Debt
|
|
(15,513
|
)
|
|
(12,174
|
)
|
|
(84
|
)
|
|||
Net Borrowings from (Repayments of) Short-Term Credit Facilities
|
|
(217,400
|
)
|
|
102,600
|
|
|
(105,500
|
)
|
|||
Dividends on Common Stock
|
|
(94,756
|
)
|
|
(87,308
|
)
|
|
(82,380
|
)
|
|||
Net Settlement of Restricted Stock (See Note 1)
|
|
(776
|
)
|
|
(751
|
)
|
|
(387
|
)
|
|||
Proceeds from Sale of Common Stock
|
|
173,750
|
|
|
—
|
|
|
214,426
|
|
|||
Payments for the Issuance of Common Stock
|
|
(7,149
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Net Cash Provided by Financing Activities
|
|
1,430,656
|
|
|
36,367
|
|
|
26,075
|
|
|||
|
|
|
|
|
|
|
||||||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
|
|
24,858
|
|
|
(12,371
|
)
|
|
11,139
|
|
|||
|
|
|
|
|
|
|
||||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Year
|
|
476
|
|
|
12,847
|
|
|
1,708
|
|
|||
|
|
|
|
|
|
|
||||||
Cash, Cash Equivalents and Restricted Cash at End of Year
|
|
$
|
25,334
|
|
|
$
|
476
|
|
|
$
|
12,847
|
|
|
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
|
||||
|
|
|
|
|
||||
Property Plant and Equipment:
|
|
|
|
|
||||
Nonutility Property, Plant and Equipment, at cost
|
|
$
|
4,188
|
|
|
$
|
3,318
|
|
Accumulated Depreciation
|
|
(2,488
|
)
|
|
(2,194
|
)
|
||
|
|
|
|
|
|
|
||
Property, Plant and Equipment - Net
|
|
1,700
|
|
|
1,124
|
|
||
|
|
|
|
|
|
|||
Investments:
|
|
|
|
|
|
|||
Investments in Subsidiaries
|
|
2,458,680
|
|
|
1,209,308
|
|
||
Available-for-Sale Securities
|
|
41
|
|
|
36
|
|
||
|
|
|
|
|
|
|
||
Total Investments
|
|
2,458,721
|
|
|
1,209,344
|
|
||
|
|
|
|
|
|
|||
Current Assets:
|
|
|
|
|
|
|||
Cash and Cash Equivalents
|
|
25,334
|
|
|
476
|
|
||
Receivable from Associated Companies
|
|
270,478
|
|
|
636,327
|
|
||
Accounts Receivable
|
|
38
|
|
|
52
|
|
||
Other
|
|
19,100
|
|
|
5,017
|
|
||
|
|
|
|
|
|
|
||
Total Current Assets
|
|
314,950
|
|
|
641,872
|
|
||
|
|
|
|
|
|
|
||
Other Noncurrent Assets
|
|
53,838
|
|
|
50,735
|
|
||
|
|
|
|
|
|
|
||
Total Assets
|
|
$
|
2,829,209
|
|
|
$
|
1,903,075
|
|
|
|
|
|
|
|
|
||
Capitalization and Liabilities
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Equity:
|
|
|
|
|
|
|||
Common Stock SJI
|
|
|
|
|
|
|||
Par Value $1.25 a share
|
|
|
|
|
|
|||
Authorized - 120,000,000 shares
|
|
|
|
|
|
|||
Outstanding Shares - 85,506,218 (2018) and 79,549,080 (2017)
|
|
$
|
106,883
|
|
|
$
|
99,436
|
|
Premium on Common Stock
|
|
843,268
|
|
|
709,658
|
|
||
Treasury Stock (at par)
|
|
(292
|
)
|
|
(271
|
)
|
||
Accumulated Other Comprehensive Loss
|
|
(26,095
|
)
|
|
(36,765
|
)
|
||
Retained Earnings
|
|
343,258
|
|
|
420,351
|
|
||
|
|
|
|
|
|
|
||
Total Equity
|
|
1,267,022
|
|
|
1,192,409
|
|
||
|
|
|
|
|
|
|
||
Long-Term Debt
|
|
708,360
|
|
|
364,946
|
|
||
|
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
|
|
||
Notes Payable - Banks
|
|
77,000
|
|
|
294,400
|
|
||
Current Portion of Long-Term Debt
|
|
715,000
|
|
|
—
|
|
||
Payable to Associated Companies
|
|
899
|
|
|
404
|
|
||
Accounts Payable
|
|
6,378
|
|
|
17,316
|
|
||
Other Current Liabilities
|
|
27,895
|
|
|
7,763
|
|
||
|
|
|
|
|
|
|
||
Total Current Liabilities
|
|
827,172
|
|
|
319,883
|
|
||
|
|
|
|
|
|
|
||
Other Noncurrent Liabilities
|
|
26,655
|
|
|
25,837
|
|
||
|
|
|
|
|
|
|
||
Total Capitalization and Liabilities
|
|
$
|
2,829,209
|
|
|
$
|
1,903,075
|
|
1.
|
BASIS OF PRESENTATION:
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||
Equity in Earnings (Losses) of Subsidiaries
|
|
$
|
65,327
|
|
|
$
|
(2,793
|
)
|
|
$
|
119,061
|
|
General & Administrative Costs, net of tax (A)
|
|
(29,727
|
)
|
|
(12,031
|
)
|
|
—
|
|
|||
Interest Charges, net of tax (B)
|
|
(17,697
|
)
|
|
—
|
|
|
—
|
|
|||
Impact of Tax Adjustments (C)
|
|
—
|
|
|
11,420
|
|
|
—
|
|
|||
Income (Loss) From Continuing Operations
|
|
$
|
17,903
|
|
|
$
|
(3,404
|
)
|
|
$
|
119,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Col. A
|
|
Col. B
|
|
Col. C
|
|
Col. D
|
|
Col. E
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
Additions
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Classification
|
|
Balance at Beginning of Period
|
|
Charged to Costs and Expenses
|
|
Acquisition Adjustments (a)
|
|
Charged to Other Accounts - Describe (b)
|
|
Deductions - Describe (c)
|
|
Balance at End of Period
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Provision for Uncollectible
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Accounts for the Year Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
December 31, 2018
|
|
$
|
13,988
|
|
|
$
|
7,977
|
|
|
6,579
|
|
|
$
|
(466
|
)
|
|
$
|
9,236
|
|
|
$
|
18,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Provision for Uncollectible
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Accounts for the Year Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
December 31, 2017
|
|
$
|
12,744
|
|
|
$
|
6,949
|
|
|
—
|
|
|
$
|
(394
|
)
|
|
$
|
5,311
|
|
|
$
|
13,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Provision for Uncollectible
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Accounts for the Year Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
December 31, 2016
|
|
$
|
10,252
|
|
|
$
|
6,907
|
|
|
—
|
|
|
$
|
(47
|
)
|
|
$
|
4,368
|
|
|
$
|
12,744
|
|
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 (b)
|
|
Deductions -
Describe (c)
|
|
Balance at End
of Period
|
||||||||||
Provision for Uncollectible
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts for the Year Ended
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018
|
$
|
13,799
|
|
|
$
|
7,997
|
|
|
$
|
(466
|
)
|
|
$
|
7,687
|
|
|
$
|
13,643
|
|
Provision for Uncollectible
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts for the Year Ended
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2017
|
$
|
12,570
|
|
|
$
|
6,949
|
|
|
$
|
(394
|
)
|
|
$
|
5,326
|
|
|
$
|
13,799
|
|
Provision for Uncollectible
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts for the Year Ended
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
$
|
9,778
|
|
|
$
|
6,993
|
|
|
$
|
(47
|
)
|
|
$
|
4,154
|
|
|
$
|
12,570
|
|
a.
|
The following definitions are hereby added:
|
b.
|
The definition of “Tissington Project” is hereby deleted in its entirety and replaced with the following:
|
c.
|
The definition of “Tissington Project Purchase Date” is hereby deleted in its entirety and replaced with the following:
|
d.
|
The definition of “Tissington Project Purchase Price” is hereby deleted in its entirety and replaced with the following:
|
By:
/s/ Stephen H. Clark
|
|
Name: Stephen H. Clark
|
|
Title: President
|
|
By:
/s/ John Yoder
|
|
Name: Jon Yoder
|
|
Title: Authorized Signatory
|
|
Name
|
Capacities in Which Served
|
Effective
Date
of
Agreement
|
Severance
Multiple of
Base Salary
and Average
Annual Bonus
|
Duration of Continued Medical
Insurance
|
|
|
|
|
|
Michael J. Renna
|
Director, President and Chief Executive Officer, South Jersey Industries, Inc.
|
1/1/19
|
3X
|
3 years
|
|
|
|
|
|
Cielo Hernandez
|
Senior Vice President and Chief Financial Officer, South Jersey Industries, Inc.
|
1/14/19
|
2X
|
2 years
|
|
|
|
|
|
Stephen H. Clark
|
Executive Vice President, South Jersey Industries, Inc. and President and Chief Operating Officer, South Jersey Energy Solutions, LLC
|
1/1/19
|
2X
|
2 years
|
|
|
|
|
|
Kathleen A. McEndy
|
Senior Vice President and Chief Administrative Officer, South Jersey Industries, Inc.
|
1/1/19
|
2X
|
2 years
|
|
|
|
|
|
Kenneth A. Lynch
|
Senior Vice President and Chief Accounting & Risk Officer, South Jersey Industries, Inc.
|
1/1/19
|
2X
|
2 years
|
|
|
|
|
|
David Robbins, Jr.
|
Senior Vice President, South Jersey Industries, Inc. and President, SJI Utilities, Inc.
|
1/1/19
|
2X
|
2 years
|
|
|
|
|
|
Steven R. Cocchi
|
Chief Strategy and Development Officer and Senior Vice President, Strategy and Growth, South Jersey Industries, Inc.
|
1/1/19
|
2X
|
2 years
|
|
|
|
|
|
Melissa Orsen
|
Senior Vice President & General Counsel, South Jersey Industries, Inc.
|
1/1/19
|
2X
|
2 years
|
|
|
South Jersey Industries, Inc.
|
|
|
|
|
|
Date:
|
February 27, 2019
|
By:
|
/s/ Michael J. Renna
|
|
|
|
Michael J. Renna
|
|
|
|
Principal Executive Officer
|
|
|
South Jersey Gas Company
|
|
|
|
|
|
Date:
|
February 27, 2019
|
By:
|
/s/ David Robbins, Jr.
|
|
|
|
David Robbins, Jr.
|
|
|
|
President & Chief Operations Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended
December 31, 2018
, of South Jersey Industries, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a)
|
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;
|
b)
|
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;
|
c)
|
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
|
d)
|
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.
|
5.
|
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 functions):
|
a)
|
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
|
b)
|
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.
|
|
|
South Jersey Industries, Inc.
|
|
|
|
|
|
Date:
|
February 27, 2019
|
By:
|
/s/ Cielo Hernandez
|
|
|
|
Cielo Hernandez
|
|
|
|
Senior Vice President & Chief Financial Officer
|
|
|
South Jersey Gas Company
|
|
|
|
|
|
Date:
|
February 27, 2019
|
By:
|
/s/ Ann T. Anthony
|
|
|
|
Ann T. Anthony
|
|
|
|
Principal Financial Officer
|
/s/ David Robbins. Jr.
|
|
Name: David Robbins, Jr.
|
|
Principal Executive Officer
|
|
February 27, 2019
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Cielo Hernandez
|
|
Name: Cielo Hernandez
|
|
Senior Vice President & Chief Financial Officer
|
|
February 27, 2019
|
/s/ Ann T. Anthony
|
|
Name: Ann T. Anthony
|
|
Principal Financial Officer
|
|
February 27, 2019
|
|