☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ______________________
|
Commission
File Number
|
Exact name of registrant as
specified in its charter
|
State of
Incorporation
|
I.R.S.
Employer
Identification No.
|
Securities registered pursuant to Section 12(b) of the Act (Title of each class):
|
Trading Symbol
|
Name of exchange on which registered
|
1-6364
|
South Jersey Industries, Inc.
|
New Jersey
|
22-1901645
|
Common Stock - $1.25 par value per share
|
SJI
|
New York Stock Exchange
|
000-22211
|
South Jersey Gas Co
|
New Jersey
|
21-0398330
|
None
|
N/A
|
N/A
|
|
Address of principal executive offices
|
City
|
State
|
Zip Code
|
Registrant's telephone number, including area code
|
|
South Jersey Industries, Inc.
|
1 South Jersey Plaza
|
Folsom
|
New Jersey
|
08037
|
(609)
|
561-9000
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South Jersey Gas Co
|
1 South Jersey Plaza
|
Folsom
|
New Jersey
|
08037
|
(609)
|
561-9000
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PART I
|
FINANCIAL INFORMATION
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Page No.
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Item 1.
|
Financial Statements (Unaudited)
|
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South Jersey Industries, Inc.
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South Jersey Gas Company
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South Jersey Industries, Inc. and South Jersey Gas Company - Combined
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Item 2.
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Item 3.
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Item 4.
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PART II
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OTHER INFORMATION
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|
Item 1.
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Item 1A.
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Item 6.
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||
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|
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ACB
|
ACB Energy Partners, LLC
|
ACLE
|
AC Landfill Energy, LLC
|
Acquisition
|
The Company's acquisition of the assets of Elizabethtown Gas Company and Elkton Gas Company effective July 1, 2018, from Pivotal Utility Holdings, Inc., a subsidiary of Southern Company Gas
|
AFUDC
|
Allowance for Funds During Construction
|
AIRP
|
Accelerated Infrastructure Replacement Program
|
AMA
|
Asset Management Agreement
|
AOCL
|
Accumulated Other Comprehensive Loss
|
ARO
|
Asset Retirement Obligation
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update
|
Bcf
|
One billion cubic feet
|
BCLE
|
BC Landfill Energy, LLC
|
BGSS
|
Basic Gas Supply Service
|
BPU
|
New Jersey Board of Public Utilities
|
CEGR
|
Compounded Earnings Annual Growth Rate
|
CHP
|
Combined Heat and Power
|
CIP
|
Conservation Incentive Program
|
CLEP
|
Clean Energy Program
|
CODM
|
Chief Operating Decision Maker
|
DRP
|
Dividend Reinvestment Plan
|
dt
|
Decatherm
|
dts/d
|
Decatherms per day
|
EEP
|
Energy Efficiency Program
|
EET
|
Energy Efficiency Tracker
|
EGR
|
Earnings Growth Rate
|
ELK
|
Elkton Gas Company
|
EMI
|
Energy & Minerals, Inc.
|
EnerConnex
|
EnerConnex, LLC
|
Energenic
|
Energenic US, LLC
|
EnergyMark
|
EnergyMark, LLC
|
EPS
|
Earnings Per Share
|
ERIP
|
Early Retirement Incentive Program
|
ERISA
|
Employee Retirement Income Security Act of 1974
|
ETG
|
Elizabethtown Gas Company
|
FASB
|
Financial Accounting Standards Board
|
FERC
|
Federal Energy Regulatory Commission
|
GAAP
|
Generally Accepted Accounting Principles for financial reporting in the United States
|
IAM
|
International Association of Machinists and Aerospace Workers
|
IBEW
|
International Brotherhood of Electrical Workers
|
IIP
|
Infrastructure Investment Programs
|
LFGTE
|
Landfill Gas-to-Energy
|
LIBOR
|
London Interbank Offer Rate
|
LMP
|
Locational Marginal Price
|
Marina
|
Marina Energy, LLC
|
Mcf
|
One thousand cubic feet
|
Midstream
|
SJI Midstream, LLC
|
Millennium
|
Millennium Account Services, LLC
|
MPSC
|
Maryland Public Service Commission
|
MMdts
|
One million decatherms
|
MMmwh
|
One million megawatt hours
|
Morie
|
The Morie Company, Inc.
|
MTN
|
Medium Term Notes
|
MW
|
Megawatts
|
MWh
|
Megawatt-hours
|
Non-GAAP
|
The financial measures that are not prepared in accordance with U.S. GAAP
|
NPA
|
Note Purchase Agreement
|
NJEDA
|
New Jersey Economic Development Authority
|
NYMEX
|
New York Mercantile Exchange
|
OSS
|
Off-System Sales
|
PennEast
|
PennEast Pipeline, LLC
|
Potato Creek
|
Potato Creek, LLC
|
RAC
|
Remediation Adjustment Clause
|
ROE
|
Return on Equity
|
SBC
|
Societal Benefits Clause
|
SCLE
|
SC Landfill Energy, LLC
|
SEC
|
Securities and Exchange Commission
|
SERP
|
Supplemental Executive Retirement Plan
|
SHARP
|
Storm Hardening and Reliability Program
|
SJE
|
South Jersey Energy Company
|
SJES
|
South Jersey Energy Solutions, LLC
|
SJESP
|
South Jersey Energy Service Plus, LLC
|
SJEX
|
South Jersey Exploration, LLC
|
SJF
|
South Jersey Fuel, Inc.
|
SJG
|
South Jersey Gas Co or South Jersey Gas Company
|
SJI
|
South Jersey Industries, Inc., or the Company
|
SJIU
|
SJI Utilities, Inc.
|
SJRG
|
South Jersey Resources Group, LLC
|
SRECs
|
Solar Renewable Energy Credits
|
SXLE
|
SX Landfill Energy, LLC
|
Tax Reform
|
Tax Cuts and Jobs Act which was enacted into law on December 22, 2017
|
TIC
|
Transportation Initiation Clause
|
TSA
|
Transition Services Agreement
|
TSR
|
Total Shareholder Return
|
USF
|
Statewide Universal Service Fund
|
Utilities
|
Represents SJI's three utility businesses: SJG, ETG, and ELK
|
UWUA
|
United Workers Union of America
|
VIE
|
Variable Interest Entity
|
WNC
|
Weather Normalization Clause
|
|
Three Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Operating Revenues:
|
|
|
|
||||
Utility
|
$
|
106,832
|
|
|
$
|
75,603
|
|
Nonutility
|
160,102
|
|
|
151,727
|
|
||
Total Operating Revenues
|
266,934
|
|
|
227,330
|
|
||
Operating Expenses:
|
|
|
|
|
|
||
Cost of Sales - (Excluding depreciation and amortization)
|
|
|
|
|
|
||
- Utility
|
16,721
|
|
|
18,181
|
|
||
- Nonutility
|
148,620
|
|
|
127,615
|
|
||
Operations
|
56,608
|
|
|
58,007
|
|
||
Impairment Charges
|
—
|
|
|
99,233
|
|
||
Maintenance
|
9,273
|
|
|
6,812
|
|
||
Depreciation
|
24,129
|
|
|
24,771
|
|
||
Energy and Other Taxes
|
2,717
|
|
|
1,243
|
|
||
Total Operating Expenses
|
258,068
|
|
|
335,862
|
|
||
Operating Income (Loss)
|
8,866
|
|
|
(108,532
|
)
|
||
|
|
|
|
||||
Other Income and Expense
|
29
|
|
|
974
|
|
||
Interest Charges
|
(28,434
|
)
|
|
(19,561
|
)
|
||
Loss Before Income Taxes
|
(19,539
|
)
|
|
(127,119
|
)
|
||
Income Taxes
|
4,646
|
|
|
31,972
|
|
||
Equity in Earnings of Affiliated Companies
|
1,589
|
|
|
1,354
|
|
||
Loss from Continuing Operations
|
(13,304
|
)
|
|
(93,793
|
)
|
||
Loss from Discontinued Operations - (Net of tax benefit)
|
(95
|
)
|
|
(26
|
)
|
||
Net Loss
|
$
|
(13,399
|
)
|
|
$
|
(93,819
|
)
|
|
|
|
|
||||
Basic Earnings Per Common Share:
|
|
|
|
|
|
||
Continuing Operations
|
$
|
(0.14
|
)
|
|
$
|
(1.12
|
)
|
Discontinued Operations
|
—
|
|
|
—
|
|
||
Basic Earnings Per Common Share
|
$
|
(0.14
|
)
|
|
$
|
(1.12
|
)
|
|
|
|
|
||||
Average Shares of Common Stock Outstanding - Basic
|
92,389
|
|
|
84,080
|
|
||
|
|
|
|
||||
Diluted Earnings Per Common Share:
|
|
|
|
|
|
||
Continuing Operations
|
$
|
(0.14
|
)
|
|
$
|
(1.12
|
)
|
Discontinued Operations
|
—
|
|
|
—
|
|
||
Diluted Earnings Per Common Share
|
$
|
(0.14
|
)
|
|
$
|
(1.12
|
)
|
|
|
|
|
||||
Average Shares of Common Stock Outstanding - Diluted
|
92,389
|
|
|
84,080
|
|
|
|
|
|
||||
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Operating Revenues:
|
|
|
|
||||
Utility
|
$
|
521,178
|
|
|
$
|
307,371
|
|
Nonutility
|
383,054
|
|
|
441,904
|
|
||
Total Operating Revenues
|
904,232
|
|
|
749,275
|
|
||
Operating Expenses:
|
|
|
|
|
|
||
Cost of Sales - (Excluding depreciation and amortization)
|
|
|
|
|
|
||
- Utility
|
205,170
|
|
|
105,298
|
|
||
- Nonutility
|
362,558
|
|
|
323,566
|
|
||
Operations
|
119,434
|
|
|
105,051
|
|
||
Impairment Charges
|
—
|
|
|
99,233
|
|
||
Maintenance
|
18,903
|
|
|
13,674
|
|
||
Depreciation
|
47,814
|
|
|
49,433
|
|
||
Energy and Other Taxes
|
6,934
|
|
|
3,682
|
|
||
Total Operating Expenses
|
760,813
|
|
|
699,937
|
|
||
Operating Income
|
143,419
|
|
|
49,338
|
|
||
|
|
|
|
||||
Other Income and Expense
|
2,604
|
|
|
3,735
|
|
||
Interest Charges
|
(57,087
|
)
|
|
(33,533
|
)
|
||
Income Before Income Taxes
|
88,936
|
|
|
19,540
|
|
||
Income Taxes
|
(20,303
|
)
|
|
(4,443
|
)
|
||
Equity in Earnings of Affiliated Companies
|
3,762
|
|
|
2,416
|
|
||
Income from Continuing Operations
|
72,395
|
|
|
17,513
|
|
||
Loss from Discontinued Operations - (Net of tax benefit)
|
(157
|
)
|
|
(92
|
)
|
||
Net Income
|
$
|
72,238
|
|
|
$
|
17,421
|
|
|
|
|
|
||||
Basic Earnings Per Common Share:
|
|
|
|
|
|
||
Continuing Operations
|
$
|
0.79
|
|
|
$
|
0.21
|
|
Discontinued Operations
|
—
|
|
|
—
|
|
||
Basic Earnings Per Common Share
|
$
|
0.79
|
|
|
$
|
0.21
|
|
|
|
|
|
||||
Average Shares of Common Stock Outstanding - Basic
|
91,863
|
|
|
81,850
|
|
||
|
|
|
|
||||
Diluted Earnings Per Common Share:
|
|
|
|
|
|
||
Continuing Operations
|
$
|
0.79
|
|
|
$
|
0.21
|
|
Discontinued Operations
|
—
|
|
|
—
|
|
||
Diluted Earnings Per Common Share
|
$
|
0.79
|
|
|
$
|
0.21
|
|
|
|
|
|
||||
Average Shares of Common Stock Outstanding - Diluted
|
91,979
|
|
|
82,302
|
|
|
Three Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Net Loss
|
$
|
(13,399
|
)
|
|
$
|
(93,819
|
)
|
|
|
|
|
||||
Other Comprehensive Income, Net of Tax:*
|
|
|
|
|
|
||
|
|
|
|
||||
Unrealized Gain on Derivatives - Other
|
8
|
|
|
8
|
|
||
|
|
|
|
||||
Other Comprehensive Income - Net of Tax*
|
8
|
|
|
8
|
|
||
|
|
|
|
||||
Comprehensive Loss
|
$
|
(13,391
|
)
|
|
$
|
(93,811
|
)
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Net Income
|
$
|
72,238
|
|
|
$
|
17,421
|
|
|
|
|
|
||||
Other Comprehensive Income, Net of Tax:*
|
|
|
|
||||
|
|
|
|
||||
Unrealized Gain on Derivatives - Other
|
16
|
|
|
17
|
|
||
|
|
|
|
||||
Other Comprehensive Income - Net of Tax*
|
16
|
|
|
17
|
|
||
|
|
|
|
||||
Comprehensive Income
|
$
|
72,254
|
|
|
$
|
17,438
|
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Net Cash Provided by Operating Activities
|
$
|
216,079
|
|
|
$
|
152,828
|
|
|
|
|
|
||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||
Capital Expenditures
|
(256,587
|
)
|
|
(125,973
|
)
|
||
Acquisition-related Working Capital Settlement
|
15,600
|
|
|
—
|
|
||
Proceeds from Sale of Property, Plant & Equipment
|
24,292
|
|
|
—
|
|
||
Investment in Long-Term Receivables
|
(6,585
|
)
|
|
(3,947
|
)
|
||
Proceeds from Long-Term Receivables
|
4,983
|
|
|
5,035
|
|
||
Purchase of Company-Owned Life Insurance
|
—
|
|
|
(574
|
)
|
||
Investment in Affiliates
|
(3,088
|
)
|
|
(8,413
|
)
|
||
Advances to Affiliates
|
(858
|
)
|
|
—
|
|
||
Net Repayment of Notes Receivable - Affiliates
|
—
|
|
|
2,006
|
|
||
|
|
|
|
||||
Net Cash Used in Investing Activities
|
(222,243
|
)
|
|
(131,866
|
)
|
||
|
|
|
|
||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||
Net Borrowings from (Repayments of) Short-Term Credit Facilities
|
409,502
|
|
|
(10,000
|
)
|
||
Proceeds from Issuance of Long-Term Debt
|
10,000
|
|
|
1,592,500
|
|
||
Principal Repayments of Long-Term Debt
|
(575,000
|
)
|
|
—
|
|
||
Payments for Issuance of Long-Term Debt
|
(1,275
|
)
|
|
(13,821
|
)
|
||
Net Settlement of Restricted Stock
|
—
|
|
|
(776
|
)
|
||
Dividends on Common Stock
|
(26,562
|
)
|
|
(22,292
|
)
|
||
Proceeds from Sale of Common Stock
|
189,032
|
|
|
173,750
|
|
||
Payments for the Issuance of Common Stock
|
—
|
|
|
(6,554
|
)
|
||
|
|
|
|
||||
Net Cash Provided by Financing Activities
|
5,697
|
|
|
1,712,807
|
|
||
|
|
|
|
||||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash
|
(467
|
)
|
|
1,733,769
|
|
||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
|
31,679
|
|
|
39,695
|
|
||
|
|
|
|
||||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
$
|
31,212
|
|
|
$
|
1,773,464
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Property, Plant and Equipment:
|
|
|
|
||||
Utility Plant, at original cost
|
$
|
4,660,845
|
|
|
$
|
4,341,113
|
|
Accumulated Depreciation
|
(815,987
|
)
|
|
(787,243
|
)
|
||
Nonutility Property and Equipment, at cost
|
151,628
|
|
|
152,232
|
|
||
Accumulated Depreciation
|
(54,845
|
)
|
|
(52,629
|
)
|
||
|
|
|
|
||||
Property, Plant and Equipment - Net
|
3,941,641
|
|
|
3,653,473
|
|
||
|
|
|
|
||||
Investments:
|
|
|
|
|
|
||
Available-for-Sale Securities
|
41
|
|
|
41
|
|
||
Restricted
|
19,019
|
|
|
1,649
|
|
||
Investment in Affiliates
|
81,759
|
|
|
76,122
|
|
||
|
|
|
|
||||
Total Investments
|
100,819
|
|
|
77,812
|
|
||
|
|
|
|
||||
Current Assets:
|
|
|
|
|
|
||
Cash and Cash Equivalents
|
12,193
|
|
|
30,030
|
|
||
Accounts Receivable
|
223,314
|
|
|
337,502
|
|
||
Unbilled Revenues
|
21,253
|
|
|
79,538
|
|
||
Provision for Uncollectibles
|
(20,508
|
)
|
|
(18,842
|
)
|
||
Notes Receivable - Affiliate
|
2,804
|
|
|
1,945
|
|
||
Natural Gas in Storage, average cost
|
49,431
|
|
|
60,425
|
|
||
Materials and Supplies, average cost
|
1,751
|
|
|
1,743
|
|
||
Prepaid Taxes
|
38,982
|
|
|
30,694
|
|
||
Derivatives - Energy Related Assets
|
34,988
|
|
|
54,021
|
|
||
Assets Held For Sale
|
28,696
|
|
|
59,588
|
|
||
Other Prepayments and Current Assets
|
36,056
|
|
|
26,548
|
|
||
|
|
|
|
||||
Total Current Assets
|
428,960
|
|
|
663,192
|
|
||
|
|
|
|
||||
Regulatory and Other Noncurrent Assets:
|
|
|
|
|
|
||
Regulatory Assets
|
682,264
|
|
|
662,969
|
|
||
Derivatives - Energy Related Assets
|
11,883
|
|
|
7,169
|
|
||
Notes Receivable - Affiliate
|
13,275
|
|
|
13,275
|
|
||
Contract Receivables
|
29,325
|
|
|
27,961
|
|
||
Goodwill
|
703,864
|
|
|
734,607
|
|
||
Other
|
116,231
|
|
|
116,119
|
|
||
|
|
|
|
||||
Total Regulatory and Other Noncurrent Assets
|
1,556,842
|
|
|
1,562,100
|
|
||
|
|
|
|
||||
Total Assets
|
$
|
6,028,262
|
|
|
$
|
5,956,577
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Capitalization and Liabilities
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common Stock
|
$
|
115,488
|
|
|
$
|
106,883
|
|
Premium on Common Stock
|
1,024,974
|
|
|
843,268
|
|
||
Treasury Stock (at par)
|
(283
|
)
|
|
(292
|
)
|
||
Accumulated Other Comprehensive Loss
|
(26,079
|
)
|
|
(26,095
|
)
|
||
Retained Earnings
|
362,372
|
|
|
343,258
|
|
||
|
|
|
|
||||
Total Equity
|
1,476,472
|
|
|
1,267,022
|
|
||
|
|
|
|
||||
Long-Term Debt
|
1,798,551
|
|
|
2,106,863
|
|
||
|
|
|
|
||||
Total Capitalization
|
3,275,023
|
|
|
3,373,885
|
|
||
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
|
||
Notes Payable
|
680,002
|
|
|
270,500
|
|
||
Current Portion of Long-Term Debt
|
478,909
|
|
|
733,909
|
|
||
Accounts Payable
|
288,881
|
|
|
410,463
|
|
||
Customer Deposits and Credit Balances
|
33,427
|
|
|
32,058
|
|
||
Environmental Remediation Costs
|
53,230
|
|
|
47,592
|
|
||
Taxes Accrued
|
2,671
|
|
|
5,881
|
|
||
Derivatives - Energy Related Liabilities
|
35,229
|
|
|
24,134
|
|
||
Deferred Contract Revenues
|
1,772
|
|
|
1,772
|
|
||
Derivatives - Other Current
|
1,092
|
|
|
588
|
|
||
Dividends Payable
|
26,562
|
|
|
—
|
|
||
Interest Accrued
|
13,895
|
|
|
14,208
|
|
||
Pension Benefits
|
3,632
|
|
|
3,631
|
|
||
Other Current Liabilities
|
26,766
|
|
|
36,102
|
|
||
|
|
|
|
||||
Total Current Liabilities
|
1,646,068
|
|
|
1,580,838
|
|
||
|
|
|
|
||||
Deferred Credits and Other Noncurrent Liabilities:
|
|
|
|
|
|
||
Deferred Income Taxes - Net
|
89,450
|
|
|
85,836
|
|
||
Pension and Other Postretirement Benefits
|
111,134
|
|
|
110,112
|
|
||
Environmental Remediation Costs
|
201,381
|
|
|
206,058
|
|
||
Asset Retirement Obligations
|
206,741
|
|
|
80,163
|
|
||
Derivatives - Energy Related Liabilities
|
7,278
|
|
|
7,256
|
|
||
Derivatives - Other Noncurrent
|
11,449
|
|
|
7,285
|
|
||
Regulatory Liabilities
|
457,958
|
|
|
478,499
|
|
||
Other
|
21,780
|
|
|
26,645
|
|
||
|
|
|
|
||||
Total Deferred Credits and Other Noncurrent Liabilities
|
1,107,171
|
|
|
1,001,854
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 11)
|
|
|
|
|
|
||
|
|
|
|
||||
Total Capitalization and Liabilities
|
$
|
6,028,262
|
|
|
$
|
5,956,577
|
|
|
|
Common Stock
|
|
Premium on Common Stock
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings
|
|
Total
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2019
|
|
106,883
|
|
|
843,268
|
|
|
(292
|
)
|
|
(26,095
|
)
|
|
343,258
|
|
|
1,267,022
|
|
Net Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85,637
|
|
|
85,637
|
|
Other Comprehensive Income, Net of Tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Common Stock Issued or Granted Through Equity Offering or Stock Plans
|
|
8,603
|
|
|
179,829
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
188,449
|
|
Cash Dividends Declared - Common Stock ($0.29 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,562
|
)
|
|
(26,562
|
)
|
Balance at March 31, 2019
|
|
115,486
|
|
|
1,023,097
|
|
|
(275
|
)
|
|
(26,087
|
)
|
|
402,333
|
|
|
1,514,554
|
|
Net Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,399
|
)
|
|
(13,399
|
)
|
Other Comprehensive Income, Net of Tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Common Stock Issued or Granted Through Equity Offering or Stock Plans
|
|
2
|
|
|
1,877
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
1,871
|
|
Cash Dividends Declared - Common Stock ($0.29 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,562
|
)
|
|
(26,562
|
)
|
Balance at June 30, 2019
|
|
115,488
|
|
|
1,024,974
|
|
|
(283
|
)
|
|
(26,079
|
)
|
|
362,372
|
|
|
1,476,472
|
|
Balance at January 1, 2018
|
|
99,436
|
|
|
709,658
|
|
|
(271
|
)
|
|
(36,765
|
)
|
|
420,351
|
|
|
1,192,409
|
|
Net Income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,240
|
|
|
111,240
|
|
Other Comprehensive Income, Net of Tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
Common Stock Issued or Granted Through Equity Offering or Stock Plans
|
|
80
|
|
|
98
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
175
|
|
Cash Dividends Declared - Common Stock ($0.28 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,336
|
)
|
|
(22,336
|
)
|
Balance at March 31, 2018
|
|
99,516
|
|
|
709,756
|
|
|
(274
|
)
|
|
(36,756
|
)
|
|
509,255
|
|
|
1,281,497
|
|
Net Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93,819
|
)
|
|
(93,819
|
)
|
Other Comprehensive Income, Net of Tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Common Stock Issued or Granted Through Equity Offering or Stock Plans
|
|
7,366
|
|
|
132,571
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
139,929
|
|
Cash Dividends Declared - Common Stock ($0.28 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,898
|
)
|
|
(23,898
|
)
|
Balance at June 30, 2018
|
|
106,882
|
|
|
842,327
|
|
|
(282
|
)
|
|
(36,748
|
)
|
|
391,538
|
|
|
1,303,717
|
|
|
|
Postretirement
Liability
Adjustment
|
|
Unrealized Gain
(Loss) on
Derivatives-Other (A)
|
|
Unrealized Gain
(Loss) on Available-
for-Sale Securities
|
|
Other
Comprehensive
Income (Loss) of
Affiliated
Companies
|
|
Accumulated
Other
Comprehensive
Loss
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2019
|
|
(25,626
|
)
|
|
(362
|
)
|
|
(10
|
)
|
|
(97
|
)
|
|
(26,095
|
)
|
Changes During Period
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Balance at March 31, 2019
|
|
(25,626
|
)
|
|
(354
|
)
|
|
(10
|
)
|
|
(97
|
)
|
|
(26,087
|
)
|
Changes During Period
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Balance at June 30, 2019
|
|
(25,626
|
)
|
|
(346
|
)
|
|
(10
|
)
|
|
(97
|
)
|
|
(26,079
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at January 1, 2018
|
|
(36,262
|
)
|
|
(396
|
)
|
|
(10
|
)
|
|
(97
|
)
|
|
(36,765
|
)
|
Changes During Period
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
Balance at March 31, 2018
|
|
(36,262
|
)
|
|
(387
|
)
|
|
(10
|
)
|
|
(97
|
)
|
|
(36,756
|
)
|
Changes During Period
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Balance at June 30, 2018
|
|
(36,262
|
)
|
|
(379
|
)
|
|
(10
|
)
|
|
(97
|
)
|
|
(36,748
|
)
|
|
Three Months Ended
June 30, |
||||||
|
|||||||
|
2019
|
|
2018
|
||||
Operating Revenues
|
$
|
62,268
|
|
|
$
|
76,801
|
|
|
|
|
|
||||
Operating Expenses:
|
|
|
|
||||
Cost of Sales (Excluding depreciation and amortization)
|
2,654
|
|
|
19,379
|
|
||
Operations
|
25,194
|
|
|
27,268
|
|
||
Maintenance
|
7,006
|
|
|
6,812
|
|
||
Depreciation
|
16,045
|
|
|
14,401
|
|
||
Energy and Other Taxes
|
1,154
|
|
|
498
|
|
||
|
|
|
|
||||
Total Operating Expenses
|
52,053
|
|
|
68,358
|
|
||
|
|
|
|
||||
Operating Income
|
10,215
|
|
|
8,443
|
|
||
|
|
|
|
||||
Other Income and Expense
|
328
|
|
|
607
|
|
||
|
|
|
|
||||
Interest Charges
|
(7,896
|
)
|
|
(6,999
|
)
|
||
|
|
|
|
||||
Income Before Income Taxes
|
2,647
|
|
|
2,051
|
|
||
|
|
|
|
||||
Income Taxes
|
(671
|
)
|
|
(482
|
)
|
||
|
|
|
|
||||
Net Income
|
$
|
1,976
|
|
|
$
|
1,569
|
|
|
|||||||
|
Six Months Ended
June 30, |
||||||
|
|||||||
|
2019
|
|
2018
|
||||
Operating Revenues
|
$
|
334,466
|
|
|
$
|
311,260
|
|
|
|
|
|
||||
Operating Expenses:
|
|
|
|
||||
Cost of Sales (Excluding depreciation and amortization)
|
121,534
|
|
|
109,187
|
|
||
Operations
|
54,291
|
|
|
56,638
|
|
||
Maintenance
|
15,149
|
|
|
13,674
|
|
||
Depreciation
|
31,789
|
|
|
28,764
|
|
||
Energy and Other Taxes
|
3,143
|
|
|
1,753
|
|
||
|
|
|
|
||||
Total Operating Expenses
|
225,906
|
|
|
210,016
|
|
||
|
|
|
|
||||
Operating Income
|
108,560
|
|
|
101,244
|
|
||
|
|
|
|
||||
Other Income and Expense
|
2,259
|
|
|
3,117
|
|
||
|
|
|
|
||||
Interest Charges
|
(15,744
|
)
|
|
(13,727
|
)
|
||
|
|
|
|
||||
Income Before Income Taxes
|
95,075
|
|
|
90,634
|
|
||
|
|
|
|
||||
Income Taxes
|
(24,368
|
)
|
|
(22,318
|
)
|
||
|
|
|
|
||||
Net Income
|
$
|
70,707
|
|
|
$
|
68,316
|
|
|
Three Months Ended
June 30, |
||||||
|
|||||||
|
2019
|
|
2018
|
||||
Net Income
|
$
|
1,976
|
|
|
$
|
1,569
|
|
|
|
|
|
||||
Other Comprehensive Income - Net of Tax: *
|
|
|
|
||||
|
|
|
|
||||
Unrealized Gain on Derivatives - Other
|
8
|
|
|
8
|
|
||
|
|
|
|
||||
Other Comprehensive Income - Net of Tax *
|
8
|
|
|
8
|
|
||
|
|
|
|
||||
Comprehensive Income
|
$
|
1,984
|
|
|
$
|
1,577
|
|
|
|
|
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Net Income
|
$
|
70,707
|
|
|
$
|
68,316
|
|
|
|
|
|
||||
Other Comprehensive Income - Net of Tax: *
|
|
|
|
||||
|
|
|
|
||||
Unrealized Gain on Derivatives - Other
|
16
|
|
|
17
|
|
||
|
|
|
|
||||
Other Comprehensive Income - Net of Tax *
|
16
|
|
|
17
|
|
||
|
|
|
|
||||
Comprehensive Income
|
$
|
70,723
|
|
|
$
|
68,333
|
|
|
|
|
|
|
Six Months Ended
June 30, |
||||||
|
|||||||
|
2019
|
|
2018
|
||||
Net Cash Provided by Operating Activities
|
$
|
126,275
|
|
|
$
|
85,263
|
|
|
|
|
|
||||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital Expenditures
|
(124,122
|
)
|
|
(113,226
|
)
|
||
Investment in Long-Term Receivables
|
(6,585
|
)
|
|
(3,947
|
)
|
||
Proceeds from Long-Term Receivables
|
4,983
|
|
|
5,035
|
|
||
|
|
|
|
||||
Net Cash Used in Investing Activities
|
(125,724
|
)
|
|
(112,138
|
)
|
||
|
|
|
|
||||
Cash Flows from Financing Activities:
|
|
|
|
||||
Net (Repayments of) Borrowings from Short-Term Credit Facilities
|
(4,398
|
)
|
|
24,400
|
|
||
Proceeds from Issuance of Long-Term Debt
|
10,000
|
|
|
—
|
|
||
Payments from Issuance of Long-Term Debt
|
—
|
|
|
(5
|
)
|
||
|
|
|
|
||||
Net Cash Provided by Financing Activities
|
5,602
|
|
|
24,395
|
|
||
|
|
|
|
||||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
|
6,153
|
|
|
(2,480
|
)
|
||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
|
3,262
|
|
|
4,619
|
|
||
|
|
|
|
||||
Cash, Cash Equivalents and Restricted Cash at End of Period
|
$
|
9,415
|
|
|
$
|
2,139
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Property, Plant and Equipment:
|
|
|
|
||||
Utility Plant, at original cost
|
$
|
3,020,518
|
|
|
$
|
2,907,202
|
|
Accumulated Depreciation
|
(546,149
|
)
|
|
(523,743
|
)
|
||
|
|
|
|
||||
Property, Plant and Equipment - Net
|
2,474,369
|
|
|
2,383,459
|
|
||
|
|
|
|
||||
Investments:
|
|
|
|
||||
Restricted Investments
|
7,798
|
|
|
1,278
|
|
||
|
|
|
|
||||
Total Investments
|
7,798
|
|
|
1,278
|
|
||
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and Cash Equivalents
|
1,617
|
|
|
1,984
|
|
||
Accounts Receivable
|
90,190
|
|
|
101,572
|
|
||
Accounts Receivable - Related Parties
|
203
|
|
|
2,442
|
|
||
Unbilled Revenues
|
8,415
|
|
|
43,271
|
|
||
Provision for Uncollectibles
|
(13,724
|
)
|
|
(13,643
|
)
|
||
Natural Gas in Storage, average cost
|
13,270
|
|
|
16,336
|
|
||
Materials and Supplies, average cost
|
619
|
|
|
619
|
|
||
Prepaid Taxes
|
28,475
|
|
|
28,772
|
|
||
Derivatives - Energy Related Assets
|
1,829
|
|
|
5,464
|
|
||
Other Prepayments and Current Assets
|
20,500
|
|
|
11,280
|
|
||
|
|
|
|
||||
Total Current Assets
|
151,394
|
|
|
198,097
|
|
||
|
|
|
|
||||
Regulatory and Other Noncurrent Assets:
|
|
|
|
||||
Regulatory Assets
|
499,864
|
|
|
492,365
|
|
||
Long-Term Receivables
|
27,126
|
|
|
25,531
|
|
||
Derivatives - Energy Related Assets
|
—
|
|
|
15
|
|
||
Other
|
23,159
|
|
|
17,491
|
|
||
|
|
|
|
||||
Total Regulatory and Other Noncurrent Assets
|
550,149
|
|
|
535,402
|
|
||
|
|
|
|
||||
Total Assets
|
$
|
3,183,710
|
|
|
$
|
3,118,236
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Capitalization and Liabilities
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common Stock
|
$
|
5,848
|
|
|
$
|
5,848
|
|
Other Paid-In Capital and Premium on Common Stock
|
355,744
|
|
|
355,744
|
|
||
Accumulated Other Comprehensive Loss
|
(22,341
|
)
|
|
(22,357
|
)
|
||
Retained Earnings
|
739,494
|
|
|
668,787
|
|
||
|
|
|
|
||||
Total Equity
|
1,078,745
|
|
|
1,008,022
|
|
||
|
|
|
|
||||
Long-Term Debt
|
564,808
|
|
|
874,507
|
|
||
|
|
|
|
||||
Total Capitalization
|
1,643,553
|
|
|
1,882,529
|
|
||
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
|
||
Notes Payable
|
103,102
|
|
|
107,500
|
|
||
Current Portion of Long-Term Debt
|
338,909
|
|
|
18,909
|
|
||
Accounts Payable - Commodity
|
34,065
|
|
|
48,490
|
|
||
Accounts Payable - Other
|
43,577
|
|
|
52,966
|
|
||
Accounts Payable - Related Parties
|
6,265
|
|
|
12,563
|
|
||
Derivatives - Energy Related Liabilities
|
5,996
|
|
|
2,146
|
|
||
Derivatives - Other Current
|
464
|
|
|
343
|
|
||
Customer Deposits and Credit Balances
|
22,683
|
|
|
23,862
|
|
||
Environmental Remediation Costs
|
39,860
|
|
|
33,022
|
|
||
Taxes Accrued
|
2,141
|
|
|
1,891
|
|
||
Pension Benefits
|
3,597
|
|
|
3,597
|
|
||
Interest Accrued
|
7,117
|
|
|
7,134
|
|
||
Other Current Liabilities
|
7,664
|
|
|
9,444
|
|
||
|
|
|
|
||||
Total Current Liabilities
|
615,440
|
|
|
321,867
|
|
||
|
|
|
|
||||
Regulatory and Other Noncurrent Liabilities:
|
|
|
|
|
|
||
Regulatory Liabilities
|
272,370
|
|
|
286,539
|
|
||
Deferred Income Taxes - Net
|
350,500
|
|
|
325,886
|
|
||
Environmental Remediation Costs
|
110,491
|
|
|
115,049
|
|
||
Asset Retirement Obligations
|
81,631
|
|
|
79,890
|
|
||
Pension and Other Postretirement Benefits
|
97,970
|
|
|
96,053
|
|
||
Derivatives - Energy Related Liabilities
|
297
|
|
|
43
|
|
||
Derivatives - Other Noncurrent
|
7,236
|
|
|
5,524
|
|
||
Other
|
4,222
|
|
|
4,856
|
|
||
|
|
|
|
||||
Total Regulatory and Other Noncurrent Liabilities
|
924,717
|
|
|
913,840
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 11)
|
|
|
|
|
|
||
|
|
|
|
||||
Total Capitalization and Liabilities
|
$
|
3,183,710
|
|
|
$
|
3,118,236
|
|
|
Common Stock
|
|
Other Paid-In Capital and Premium on Common Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Retained Earnings
|
|
Total
|
|||||
Balance at January 1, 2019
|
5,848
|
|
|
355,744
|
|
|
(22,357
|
)
|
|
668,787
|
|
|
1,008,022
|
|
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
68,731
|
|
|
68,731
|
|
Other Comprehensive Income, Net of Tax
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Balance at March 31, 2019
|
5,848
|
|
|
355,744
|
|
|
(22,349
|
)
|
|
737,518
|
|
|
1,076,761
|
|
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,976
|
|
|
1,976
|
|
Other Comprehensive Income, Net of Tax
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Balance at June 30, 2019
|
5,848
|
|
|
355,744
|
|
|
(22,341
|
)
|
|
739,494
|
|
|
1,078,745
|
|
Balance at January 1, 2018
|
5,848
|
|
|
355,744
|
|
|
(25,997
|
)
|
|
585,838
|
|
|
921,433
|
|
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
66,747
|
|
|
66,747
|
|
Other Comprehensive Income, Net of Tax
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
Balance at March 31, 2018
|
5,848
|
|
|
355,744
|
|
|
(25,988
|
)
|
|
652,585
|
|
|
988,189
|
|
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,569
|
|
|
1,569
|
|
Other Comprehensive Income, Net of Tax
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Balance at June 30, 2018
|
5,848
|
|
|
355,744
|
|
|
(25,980
|
)
|
|
654,154
|
|
|
989,766
|
|
|
Postretirement Liability Adjustment
|
|
Unrealized Gain (Loss) on Derivatives (A)
|
|
Accumulated Other Comprehensive Income (Loss)
|
|||
Balance at January 1, 2019
|
(21,901
|
)
|
|
(456
|
)
|
|
(22,357
|
)
|
Changes During Period
|
—
|
|
|
8
|
|
|
8
|
|
Balance at March 31, 2019
|
(21,901
|
)
|
|
(448
|
)
|
|
(22,349
|
)
|
Changes During Period
|
—
|
|
|
8
|
|
|
8
|
|
Balance at June 30, 2019
|
(21,901
|
)
|
|
(440
|
)
|
|
(22,341
|
)
|
|
|
|
|
|
|
|
||
Balance at January 1, 2018
|
(25,507
|
)
|
|
(490
|
)
|
|
(25,997
|
)
|
Changes During Period
|
—
|
|
|
9
|
|
|
9
|
|
Balance at March 31, 2018
|
(25,507
|
)
|
|
(481
|
)
|
|
(25,988
|
)
|
Changes During Period
|
—
|
|
|
8
|
|
|
8
|
|
Balance at June 30, 2018
|
(25,507
|
)
|
|
(473
|
)
|
|
(25,980
|
)
|
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. 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:
|
▪
|
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.
|
Natural Gas in Storage
|
|
$
|
9,685
|
|
Intangible Asset
|
|
19,200
|
|
|
Profit Sharing - Other Liabilities
|
|
(17,546
|
)
|
|
Total Consideration
|
|
$
|
11,339
|
|
•
|
In January 2018, the FASB issued an amendment (ASU 2018-01) 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 ASUs 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.
|
•
|
In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842) Codification Improvements. The amendments in this ASU reinstate a Topic 840 explicit exception for lessors that are not manufacturers or dealers for determining fair value of the leased property in Topic 842. This exception specifies that such lessors will use their cost, reflecting any volume or trade discounts that may apply, as the fair value of the underlying asset. However, if significant time lapses between the acquisition of the underlying asset and lease commencement, those lessors will be required to apply the definition of fair value (exit price) in Topic 820. Lastly, the amendments in this ASU added an explicit exception to the Topic 250, Accounting Changes and Error Corrections, paragraph 250-10-50-3 interim disclosure requirements in the Topic 842 transition disclosure requirements.
|
2.
|
STOCK-BASED COMPENSATION PLAN:
|
|
Grants
|
|
Shares Outstanding
|
|
Fair Value Per Share
|
|
Expected Volatility
|
|
Risk-Free Interest Rate
|
|||||
Officers & Key Employees -
|
2017 - TSR
|
|
41,103
|
|
|
$
|
32.17
|
|
|
20.8
|
%
|
|
1.47
|
%
|
|
2017 - CEGR, Time
|
|
54,677
|
|
|
$
|
33.69
|
|
|
N/A
|
|
|
N/A
|
|
|
2018 - TSR
|
|
51,731
|
|
|
$
|
31.05
|
|
|
21.9
|
%
|
|
2.00
|
%
|
|
2018 - CEGR, Time
|
|
86,038
|
|
|
$
|
31.23
|
|
|
N/A
|
|
|
N/A
|
|
|
2019 - TSR
|
|
38,934
|
|
|
$
|
32.88
|
|
|
23.2
|
%
|
|
2.40
|
%
|
|
2019 - CEGR, Time
|
|
139,663
|
|
|
$
|
31.26
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Directors -
|
2019
|
|
30,028
|
|
|
$
|
26.89
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|||||||||||
|
2019
|
2018
|
|
2019
|
|
2018
|
||||||||
Officers & Key Employees
|
$
|
1,534
|
|
$
|
1,090
|
|
|
$
|
2,284
|
|
|
$
|
2,190
|
|
Directors
|
202
|
|
206
|
|
|
404
|
|
|
412
|
|
||||
Total Cost
|
1,736
|
|
1,296
|
|
|
2,688
|
|
|
2,602
|
|
||||
|
|
|
|
|
|
|
||||||||
Capitalized
|
47
|
|
(101
|
)
|
|
(34
|
)
|
|
(202
|
)
|
||||
Net Expense
|
$
|
1,783
|
|
$
|
1,195
|
|
|
$
|
2,654
|
|
|
$
|
2,400
|
|
|
Officers and Other Key Employees
|
|
Directors
|
|
Weighted
Average
Fair Value
|
||||
Nonvested Shares Outstanding, January 1, 2019
|
411,809
|
|
|
26,416
|
|
|
$
|
29.57
|
|
Granted
|
181,387
|
|
|
30,028
|
|
|
$
|
30.94
|
|
Cancelled/Forfeited
|
(33,516
|
)
|
|
—
|
|
|
$
|
31.60
|
|
Vested
|
(147,534
|
)
|
|
(26,416
|
)
|
|
$
|
26.04
|
|
Nonvested Shares Outstanding, June 30, 2019
|
412,146
|
|
|
30,028
|
|
|
$
|
31.46
|
|
3.
|
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED-PARTY TRANSACTIONS:
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Loss before Income Taxes:
|
|
|
|
|
|
|
|
||||||||
Sand Mining
|
$
|
(23
|
)
|
|
$
|
7
|
|
|
$
|
(44
|
)
|
|
$
|
(33
|
)
|
Fuel Oil
|
(96
|
)
|
|
(40
|
)
|
|
(153
|
)
|
|
(81
|
)
|
||||
Income Tax Benefits
|
24
|
|
|
7
|
|
|
40
|
|
|
22
|
|
||||
Loss from Discontinued Operations — Net
|
$
|
(95
|
)
|
|
$
|
(26
|
)
|
|
$
|
(157
|
)
|
|
$
|
(92
|
)
|
Earnings Per Common Share from
|
|
|
|
|
|
|
|
|
|||||||
Discontinued Operations — Net:
|
|
|
|
|
|
|
|
|
|||||||
Basic and Diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating Revenues/Affiliates:
|
|
|
|
|
|
|
|
||||||||
SJRG
|
$
|
1,142
|
|
|
$
|
1,109
|
|
|
$
|
2,426
|
|
|
$
|
3,697
|
|
Marina
|
105
|
|
|
89
|
|
|
221
|
|
|
192
|
|
||||
Other
|
20
|
|
|
23
|
|
|
40
|
|
|
46
|
|
||||
Total Operating Revenue/Affiliates
|
$
|
1,267
|
|
|
$
|
1,221
|
|
|
$
|
2,687
|
|
|
$
|
3,935
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Costs of Sales/Affiliates (Excluding depreciation and amortization)
|
|
|
|
|
|
|
|
||||||||
SJRG*
|
$
|
3,335
|
|
|
$
|
2,093
|
|
|
$
|
6,582
|
|
|
$
|
27,431
|
|
|
|
|
|
|
|
|
|
||||||||
Operations Expense/Affiliates:
|
|
|
|
|
|
|
|
||||||||
SJI
|
$
|
5,694
|
|
|
$
|
6,708
|
|
|
$
|
10,420
|
|
|
$
|
13,751
|
|
SJIU
|
578
|
|
|
—
|
|
|
578
|
|
|
—
|
|
||||
Millennium
|
789
|
|
|
744
|
|
|
1,552
|
|
|
1,441
|
|
||||
Other
|
426
|
|
|
(117
|
)
|
|
961
|
|
|
(232
|
)
|
||||
Total Operations Expense/Affiliates
|
$
|
7,487
|
|
|
$
|
7,335
|
|
|
$
|
13,511
|
|
|
$
|
14,960
|
|
4.
|
COMMON STOCK:
|
|
2019
|
|
Beginning Balance, January 1
|
85,506,218
|
|
New Issuances During the Period:
|
|
|
Settlement of Equity Forward Sale Agreement
|
6,779,661
|
|
Stock-Based Compensation Plan
|
104,470
|
|
Ending Balance, June 30
|
92,390,349
|
|
5.
|
FINANCIAL INSTRUMENTS:
|
|
|
As of June 30, 2019
|
|||||
Balance Sheet Line Item
|
|
SJI
|
SJG
|
||||
Cash and Cash Equivalents
|
|
$
|
12,193
|
|
$
|
1,617
|
|
Restricted Investments
|
|
19,019
|
|
7,798
|
|
||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows
|
|
$
|
31,212
|
|
$
|
9,415
|
|
|
|
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
|
|
•
|
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 13).
|
•
|
The estimated fair values of SJI's long-term debt (which includes SJG and all consolidated subsidiaries), including current maturities, as of June 30, 2019 and December 31, 2018, were $2.43 billion and $2.91 billion, respectively. The carrying amounts of SJI's long-term debt, including current maturities, as of June 30, 2019 and December 31, 2018, were $2.28 billion and $2.84 billion, respectively. SJI's carrying amounts as of June 30, 2019 and December 31, 2018 are net of unamortized debt issuance costs of $25.3 million and $27.0 million, respectively.
|
•
|
The estimated fair values of SJG's long-term debt, including current maturities, as of June 30, 2019 and December 31, 2018, were $929.3 million and $895.1 million, respectively. The carrying amounts of SJG's long-term debt, including current maturities, as of June 30, 2019 and December 31, 2018, were $903.7 million and $893.4 million, respectively. The carrying amounts as of June 30, 2019 and December 31, 2018 are net of unamortized debt issuance costs of $6.5 million and $6.8 million, respectively.
|
6.
|
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 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.
|
•
|
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 and SXLE.
|
•
|
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 among the above SJI consolidated entities.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating Revenues:
|
|
|
|
|
|
|
|
||||||||
SJI Utilities:
|
|
|
|
|
|
|
|
||||||||
SJG Utility Operations
|
62,268
|
|
|
$
|
76,801
|
|
|
$
|
334,466
|
|
|
$
|
311,260
|
|
|
ETG Utility Operations
|
44,854
|
|
|
—
|
|
|
185,028
|
|
|
—
|
|
||||
ELK Utility Operations
|
944
|
|
|
—
|
|
|
4,318
|
|
|
—
|
|
||||
Subtotal SJI Utilities
|
108,066
|
|
|
76,801
|
|
|
523,812
|
|
|
311,260
|
|
||||
Energy Group:
|
|
|
|
|
|
|
|
||||||||
Wholesale Energy Operations
|
126,483
|
|
|
67,220
|
|
|
316,490
|
|
|
257,563
|
|
||||
Retail Gas and Other Operations
|
—
|
|
|
23,168
|
|
|
—
|
|
|
63,369
|
|
||||
Retail Electric Operations
|
20,531
|
|
|
42,662
|
|
|
43,222
|
|
|
86,697
|
|
||||
Subtotal Energy Group
|
147,014
|
|
|
133,050
|
|
|
359,712
|
|
|
407,629
|
|
||||
Energy Services:
|
|
|
|
|
|
|
|
||||||||
On-Site Energy Production
|
14,788
|
|
|
24,734
|
|
|
26,118
|
|
|
45,891
|
|
||||
Appliance Service Operations
|
484
|
|
|
451
|
|
|
1,015
|
|
|
971
|
|
||||
Subtotal Energy Services
|
15,272
|
|
|
25,185
|
|
|
27,133
|
|
|
46,862
|
|
||||
Corporate and Services
|
11,815
|
|
|
11,082
|
|
|
21,186
|
|
|
24,082
|
|
||||
Subtotal
|
282,167
|
|
|
246,118
|
|
|
931,843
|
|
|
789,833
|
|
||||
Intersegment Sales
|
(15,233
|
)
|
|
(18,788
|
)
|
|
(27,611
|
)
|
|
(40,558
|
)
|
||||
Total Operating Revenues
|
$
|
266,934
|
|
|
$
|
227,330
|
|
|
$
|
904,232
|
|
|
$
|
749,275
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating Income (Loss):
|
|
|
|
|
|
|
|
|
|
||||||
SJI Utilities:
|
|
|
|
|
|
|
|
||||||||
SJG Utility Operations
|
$
|
10,215
|
|
|
$
|
8,443
|
|
|
$
|
108,560
|
|
|
$
|
101,244
|
|
ETG Utility Operations
|
2,051
|
|
|
—
|
|
|
46,200
|
|
|
—
|
|
||||
ELK Utility Operations
|
(32
|
)
|
|
—
|
|
|
598
|
|
|
—
|
|
||||
Subtotal SJI Utilities
|
12,234
|
|
|
8,443
|
|
|
155,358
|
|
|
101,244
|
|
||||
Energy Group:
|
|
|
|
|
|
|
|
||||||||
Wholesale Energy Operations
|
(2,386
|
)
|
|
(10,472
|
)
|
|
(4,892
|
)
|
|
65,185
|
|
||||
Retail Gas and Other Operations
|
—
|
|
|
1,659
|
|
|
—
|
|
|
(4,099
|
)
|
||||
Retail Electric Operations
|
(2,313
|
)
|
|
1,094
|
|
|
(3,969
|
)
|
|
886
|
|
||||
Subtotal Energy Group
|
(4,699
|
)
|
|
(7,719
|
)
|
|
(8,861
|
)
|
|
61,972
|
|
||||
Energy Services:
|
|
|
|
|
|
|
|
||||||||
On-Site Energy Production
|
1,343
|
|
|
(100,435
|
)
|
|
1,461
|
|
|
(100,989
|
)
|
||||
Appliance Service Operations
|
421
|
|
|
442
|
|
|
1,016
|
|
|
945
|
|
||||
Subtotal Energy Services
|
1,764
|
|
|
(99,993
|
)
|
|
2,477
|
|
|
(100,044
|
)
|
||||
Corporate and Services
|
(433
|
)
|
|
(9,263
|
)
|
|
(5,555
|
)
|
|
(13,834
|
)
|
||||
Total Operating Income (Loss)
|
$
|
8,866
|
|
|
$
|
(108,532
|
)
|
|
$
|
143,419
|
|
|
$
|
49,338
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and Amortization:
|
|
|
|
|
|
|
|
|
|
||||||
SJI Utilities:
|
|
|
|
|
|
|
|
||||||||
SJG Utility Operations
|
$
|
23,083
|
|
|
$
|
20,274
|
|
|
$
|
45,785
|
|
|
$
|
40,589
|
|
ETG Utility Operations
|
6,813
|
|
|
—
|
|
|
13,471
|
|
|
—
|
|
ELK Utility Operations
|
113
|
|
|
—
|
|
|
225
|
|
|
—
|
|
||||
Subtotal SJI Utilities
|
30,009
|
|
|
20,274
|
|
|
59,481
|
|
|
40,589
|
|
||||
Energy Group:
|
|
|
|
|
|
|
|
||||||||
Wholesale Energy Operations
|
25
|
|
|
29
|
|
|
48
|
|
|
52
|
|
||||
Retail Gas and Other Operations
|
—
|
|
|
78
|
|
|
—
|
|
|
153
|
|
||||
Subtotal Energy Group
|
25
|
|
|
107
|
|
|
48
|
|
|
205
|
|
||||
Energy Services:
|
|
|
|
|
|
|
|
||||||||
On-Site Energy Production
|
1,256
|
|
|
10,324
|
|
|
2,508
|
|
|
20,595
|
|
||||
Appliance Service Operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Subtotal Energy Services
|
1,256
|
|
|
10,324
|
|
|
2,508
|
|
|
20,595
|
|
||||
Corporate and Services
|
1,754
|
|
|
5,951
|
|
|
2,998
|
|
|
9,165
|
|
||||
Total Depreciation and Amortization
|
$
|
33,044
|
|
|
$
|
36,656
|
|
|
$
|
65,035
|
|
|
$
|
70,554
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Charges:
|
|
|
|
|
|
|
|
|
|
||||||
SJI Utilities:
|
|
|
|
|
|
|
|
||||||||
SJG Utility Operations
|
$
|
7,896
|
|
|
$
|
6,999
|
|
|
$
|
15,744
|
|
|
$
|
13,727
|
|
ETG Utility Operations
|
6,620
|
|
|
—
|
|
|
12,941
|
|
|
—
|
|
||||
ELK Utility Operations
|
5
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
Subtotal SJI Utilities
|
14,521
|
|
|
6,999
|
|
|
28,696
|
|
|
13,727
|
|
||||
Energy Group:
|
|
|
|
|
|
|
|
||||||||
Retail Gas and Other Operations
|
—
|
|
|
105
|
|
|
—
|
|
|
251
|
|
||||
Subtotal Energy Group
|
—
|
|
|
105
|
|
|
—
|
|
|
251
|
|
||||
Energy Services:
|
|
|
|
|
|
|
|
||||||||
On-Site Energy Production
|
2,138
|
|
|
4,098
|
|
|
4,423
|
|
|
7,945
|
|
||||
Midstream
|
555
|
|
|
479
|
|
|
1,099
|
|
|
905
|
|
||||
Corporate and Services
|
14,659
|
|
|
13,368
|
|
|
30,063
|
|
|
20,838
|
|
||||
Subtotal
|
31,873
|
|
|
25,049
|
|
|
64,281
|
|
|
43,666
|
|
||||
Intersegment Borrowings
|
(3,439
|
)
|
|
(5,488
|
)
|
|
(7,194
|
)
|
|
(10,133
|
)
|
||||
Total Interest Charges
|
$
|
28,434
|
|
|
$
|
19,561
|
|
|
$
|
57,087
|
|
|
$
|
33,533
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Income Taxes:
|
|
|
|
|
|
|
|
|
|
||||||
SJI Utilities:
|
|
|
|
|
|
|
|
||||||||
SJG Utility Operations
|
$
|
671
|
|
|
$
|
482
|
|
|
$
|
24,368
|
|
|
$
|
22,318
|
|
ETG Utility Operations
|
(809
|
)
|
|
—
|
|
|
6,093
|
|
|
—
|
|
||||
ELK Utility Operations
|
(9
|
)
|
|
—
|
|
|
154
|
|
|
—
|
|
||||
Subtotal SJI Utilities
|
(147
|
)
|
|
482
|
|
|
30,615
|
|
|
22,318
|
|
||||
Energy Group:
|
|
|
|
|
|
|
|
||||||||
Wholesale Energy Operations
|
(481
|
)
|
|
(2,478
|
)
|
|
(958
|
)
|
|
16,649
|
|
||||
Retail Gas and Other Operations
|
—
|
|
|
474
|
|
|
—
|
|
|
(1,060
|
)
|
||||
Retail Electric Operations
|
(569
|
)
|
|
307
|
|
|
(818
|
)
|
|
249
|
|
||||
Subtotal Energy Group
|
(1,050
|
)
|
|
(1,697
|
)
|
|
(1,776
|
)
|
|
15,838
|
|
||||
Energy Services:
|
|
|
|
|
|
|
|
||||||||
On-Site Energy Production
|
121
|
|
|
(26,489
|
)
|
|
(357
|
)
|
|
(27,646
|
)
|
||||
Appliance Service Operations
|
136
|
|
|
106
|
|
|
303
|
|
|
237
|
|
||||
Subtotal Energy Services
|
257
|
|
|
(26,383
|
)
|
|
(54
|
)
|
|
(27,409
|
)
|
||||
Midstream
|
(33
|
)
|
|
(22
|
)
|
|
(65
|
)
|
|
40
|
|
||||
Corporate and Services
|
(3,673
|
)
|
|
(4,352
|
)
|
|
(8,417
|
)
|
|
(6,344
|
)
|
||||
Total Income Taxes
|
$
|
(4,646
|
)
|
|
$
|
(31,972
|
)
|
|
$
|
20,303
|
|
|
$
|
4,443
|
|
|
|
|
|
|
|
|
|
||||||||
Property Additions:
|
|
|
|
|
|
|
|
||||||||
SJI Utilities:
|
|
|
|
|
|
|
|
||||||||
SJG Utility Operations
|
$
|
67,257
|
|
|
$
|
65,148
|
|
|
$
|
122,562
|
|
|
$
|
115,385
|
|
ETG Utility Operations
|
53,938
|
|
|
—
|
|
|
91,962
|
|
|
—
|
|
||||
ELK Utility Operations
|
983
|
|
|
—
|
|
|
1,628
|
|
|
—
|
|
||||
Subtotal SJI Utilities
|
122,178
|
|
|
65,148
|
|
|
216,152
|
|
|
115,385
|
|
||||
Energy Group:
|
|
|
|
|
|
|
|
||||||||
Wholesale Energy Operations
|
—
|
|
|
27
|
|
|
—
|
|
|
32
|
|
||||
Retail Gas and Other Operations
|
—
|
|
|
136
|
|
|
—
|
|
|
309
|
|
||||
Subtotal Energy Group
|
—
|
|
|
163
|
|
|
—
|
|
|
341
|
|
||||
Energy Services:
|
|
|
|
|
|
|
|
||||||||
On-Site Energy Production
|
141
|
|
|
570
|
|
|
164
|
|
|
1,683
|
|
||||
Subtotal Energy Services
|
141
|
|
|
570
|
|
|
164
|
|
|
1,683
|
|
||||
Midstream
|
7
|
|
|
99
|
|
|
19
|
|
|
310
|
|
||||
Corporate and Services
|
1
|
|
|
8,204
|
|
|
586
|
|
|
11,549
|
|
||||
Total Property Additions
|
$
|
122,327
|
|
|
$
|
74,184
|
|
|
$
|
216,921
|
|
|
$
|
129,268
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Identifiable Assets:
|
|
|
|
||||
SJI Utilities:
|
|
|
|
||||
SJG Utility Operations
|
$
|
3,183,710
|
|
|
$
|
3,118,236
|
|
ETG Utility Operations
|
2,291,156
|
|
|
2,148,175
|
|
||
ELK Utility Operations
|
19,043
|
|
|
16,482
|
|
||
Subtotal SJI Utilities
|
5,493,909
|
|
|
5,282,893
|
|
||
Energy Group:
|
|
|
|
||||
Wholesale Energy Operations
|
177,183
|
|
|
266,417
|
|
||
Retail Gas and Other Operations (A)
|
141
|
|
|
12,736
|
|
||
Retail Electric Operations
|
34,394
|
|
|
39,345
|
|
||
Subtotal Energy Group
|
211,718
|
|
|
318,498
|
|
||
Energy Services:
|
|
|
|
||||
On-Site Energy Production
|
170,251
|
|
|
195,329
|
|
||
Appliance Service Operations
|
81
|
|
|
—
|
|
||
Subtotal Energy Services
|
170,332
|
|
|
195,329
|
|
||
Midstream
|
78,246
|
|
|
72,333
|
|
||
Discontinued Operations
|
1,742
|
|
|
1,777
|
|
||
Corporate and Services
|
317,842
|
|
|
387,482
|
|
||
Intersegment Assets
|
(245,527
|
)
|
|
(301,735
|
)
|
||
Total Identifiable Assets
|
$
|
6,028,262
|
|
|
$
|
5,956,577
|
|
7.
|
RATES AND REGULATORY ACTIONS:
|
8.
|
REGULATORY ASSETS AND REGULATORY LIABILITIES:
|
|
June 30, 2019
|
|||||||||||
|
SJG
|
ETG
|
ELK
|
Total SJI
|
||||||||
Environmental Remediation Costs:
|
|
|
|
|
||||||||
Expended - Net
|
$
|
136,772
|
|
$
|
16,510
|
|
$
|
—
|
|
$
|
153,282
|
|
Liability for Future Expenditures
|
150,351
|
|
103,349
|
|
—
|
|
253,700
|
|
||||
Deferred ARO Costs
|
33,659
|
|
10,655
|
|
128
|
|
44,442
|
|
||||
Deferred Pension Costs - Unrecognized Prior Service Cost
|
—
|
|
38,996
|
|
14
|
|
39,010
|
|
||||
Deferred Pension and Other Postretirement Benefit Costs
|
79,466
|
|
2,607
|
|
30
|
|
82,103
|
|
||||
Deferred Gas Costs - Net
|
60,993
|
|
—
|
|
549
|
|
61,542
|
|
||||
SBC Receivable
|
150
|
|
—
|
|
—
|
|
150
|
|
||||
Deferred Interest Rate Contracts
|
7,700
|
|
—
|
|
—
|
|
7,700
|
|
||||
Energy Efficiency Tracker
|
4,919
|
|
—
|
|
—
|
|
4,919
|
|
||||
Pipeline Supplier Service Charges
|
571
|
|
—
|
|
—
|
|
571
|
|
||||
Pipeline Integrity Cost
|
5,325
|
|
—
|
|
—
|
|
5,325
|
|
||||
AFUDC - Equity Related Deferrals
|
10,224
|
|
—
|
|
—
|
|
10,224
|
|
||||
Weather Normalization
|
—
|
|
—
|
|
252
|
|
252
|
|
||||
Other Regulatory Assets
|
9,734
|
|
9,085
|
|
225
|
|
19,044
|
|
||||
|
|
|
|
|
||||||||
Total Regulatory Assets
|
$
|
499,864
|
|
$
|
181,202
|
|
$
|
1,198
|
|
$
|
682,264
|
|
|
December 31, 2018
|
|||||||||||
|
SJG
|
ETG
|
ELK
|
Total SJI
|
||||||||
Environmental Remediation Costs:
|
|
|
|
|
||||||||
Expended - Net
|
$
|
136,227
|
|
$
|
10,875
|
|
$
|
—
|
|
$
|
147,102
|
|
Liability for Future Expenditures
|
148,071
|
|
104,594
|
|
—
|
|
252,665
|
|
||||
Deferred ARO Costs
|
31,096
|
|
—
|
|
—
|
|
31,096
|
|
||||
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
|
|
||||
Deferred Gas Costs - Net
|
57,889
|
|
—
|
|
289
|
|
58,178
|
|
||||
SBC Receivable
|
2,173
|
|
—
|
|
—
|
|
2,173
|
|
||||
Deferred Interest Rate Contracts
|
5,867
|
|
—
|
|
—
|
|
5,867
|
|
||||
Energy Efficiency Tracker
|
2,319
|
|
—
|
|
—
|
|
2,319
|
|
||||
Pipeline Supplier Service Charges
|
617
|
|
—
|
|
—
|
|
617
|
|
||||
Pipeline Integrity Cost
|
5,140
|
|
—
|
|
—
|
|
5,140
|
|
||||
AFUDC - Equity Related Deferrals
|
13,914
|
|
—
|
|
—
|
|
13,914
|
|
||||
Weather Normalization
|
—
|
|
3,210
|
|
139
|
|
3,349
|
|
||||
Other Regulatory Assets
|
8,931
|
|
8,023
|
|
211
|
|
17,165
|
|
||||
|
|
|
|
|
||||||||
Total Regulatory Assets
|
$
|
492,365
|
|
$
|
169,921
|
|
$
|
683
|
|
$
|
662,969
|
|
|
June 30, 2019
|
|||||||||||
|
SJG
|
ETG
|
ELK
|
Total SJI
|
||||||||
Excess Plant Removal Costs
|
$
|
17,910
|
|
$
|
47,827
|
|
$
|
1,386
|
|
$
|
67,123
|
|
Excess Deferred Taxes
|
252,854
|
|
120,470
|
|
1,231
|
|
374,555
|
|
||||
CIP Payable
|
1,606
|
|
—
|
|
—
|
|
1,606
|
|
||||
Weather Normalization
|
—
|
|
1,641
|
|
—
|
|
1,641
|
|
||||
Amounts to be Refunded to Customers
|
—
|
|
12,750
|
|
—
|
|
12,750
|
|
||||
Other Regulatory Liabilities
|
—
|
|
283
|
|
—
|
|
283
|
|
||||
|
|
|
|
|
||||||||
Total Regulatory Liabilities
|
$
|
272,370
|
|
$
|
182,971
|
|
$
|
2,617
|
|
$
|
457,958
|
|
|
December 31, 2018
|
|||||||||||
|
SJG
|
ETG
|
ELK
|
Total SJI
|
||||||||
Excess Plant Removal Costs
|
$
|
20,805
|
|
$
|
47,909
|
|
$
|
1,393
|
|
$
|
70,107
|
|
Excess Deferred Taxes
|
259,863
|
|
118,757
|
|
1,231
|
|
379,851
|
|
||||
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
|
|
9.
|
PENSION AND OTHER POSTRETIREMENT BENEFITS:
|
|
Pension Benefits
|
||||||||||||||
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service Cost
|
$
|
1,081
|
|
|
$
|
639
|
|
|
$
|
2,800
|
|
|
$
|
2,816
|
|
Interest Cost
|
4,435
|
|
|
716
|
|
|
8,664
|
|
|
5,824
|
|
||||
Expected Return on Plan Assets
|
(4,942
|
)
|
|
(19
|
)
|
|
(10,135
|
)
|
|
(7,652
|
)
|
||||
Amortizations:
|
|
|
|
|
|
|
|
|
|||||||
Prior Service Cost
|
27
|
|
|
(13
|
)
|
|
53
|
|
|
58
|
|
||||
Actuarial Loss
|
2,360
|
|
|
1,632
|
|
|
4,797
|
|
|
5,764
|
|
||||
Net Periodic Benefit Cost
|
2,961
|
|
|
2,955
|
|
|
6,179
|
|
|
6,810
|
|
||||
Capitalized Benefit Cost
|
(374
|
)
|
|
(554
|
)
|
|
(968
|
)
|
|
(1,037
|
)
|
||||
Deferred Benefit Cost
|
(653
|
)
|
|
(374
|
)
|
|
(1,194
|
)
|
|
(1,125
|
)
|
||||
Total Net Periodic Benefit Expense
|
$
|
1,934
|
|
|
$
|
2,027
|
|
|
$
|
4,017
|
|
|
$
|
4,648
|
|
|
Other Postretirement Benefits
|
||||||||||||||
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service Cost
|
$
|
37
|
|
|
$
|
360
|
|
|
$
|
271
|
|
|
$
|
441
|
|
Interest Cost
|
806
|
|
|
859
|
|
|
1,434
|
|
|
1,076
|
|
||||
Expected Return on Plan Assets
|
(1,133
|
)
|
|
(1,578
|
)
|
|
(2,282
|
)
|
|
(1,883
|
)
|
||||
Amortizations:
|
|
|
|
|
|
|
|
|
|
||||||
Prior Service Cost
|
(145
|
)
|
|
(141
|
)
|
|
(288
|
)
|
|
(172
|
)
|
||||
Actuarial Loss
|
321
|
|
|
340
|
|
|
584
|
|
|
451
|
|
||||
Net Periodic Benefit Cost
|
(114
|
)
|
|
(160
|
)
|
|
(281
|
)
|
|
(87
|
)
|
||||
Capitalized Benefit Cost
|
(99
|
)
|
|
—
|
|
|
(155
|
)
|
|
(5
|
)
|
||||
Deferred Benefit Cost
|
119
|
|
|
—
|
|
|
235
|
|
|
—
|
|
||||
Total Net Periodic Benefit Expense
|
$
|
(94
|
)
|
|
$
|
(160
|
)
|
|
$
|
(201
|
)
|
|
$
|
(92
|
)
|
10.
|
LINES OF CREDIT:
|
Company
|
|
Total Facility
|
|
Usage
|
|
Available Liquidity
|
|
Expiration Date
|
||||||
SJI:
|
|
|
|
|
|
|
|
|
||||||
SJI Syndicated Revolving Credit Facility
|
|
$
|
500,000
|
|
|
$
|
396,600
|
|
(A)
|
$
|
103,400
|
|
|
August 2022
|
Revolving Credit Facility
|
|
50,000
|
|
|
50,000
|
|
|
—
|
|
|
September 2019 (D)
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total SJI
|
|
550,000
|
|
|
446,600
|
|
|
103,400
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
SJG:
|
|
|
|
|
|
|
|
|
||||||
Commercial Paper Program/Revolving Credit Facility
|
|
200,000
|
|
|
104,000
|
|
(B)
|
96,000
|
|
|
August 2022
|
|||
Uncommitted Bank Line
|
|
10,000
|
|
|
—
|
|
|
10,000
|
|
|
August 2019 (D)
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total SJG
|
|
210,000
|
|
|
104,000
|
|
|
106,000
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
ETG/ELK:
|
|
|
|
|
|
|
|
|
||||||
ETG/ELK Revolving Credit Facility
|
|
200,000
|
|
|
140,900
|
|
(C)
|
59,100
|
|
|
June 2021
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
960,000
|
|
|
$
|
691,500
|
|
|
$
|
268,500
|
|
|
|
11.
|
COMMITMENTS AND CONTINGENCIES:
|
12.
|
DERIVATIVE INSTRUMENTS:
|
|
SJI Consolidated
|
SJG
|
||
Derivative contracts intended to limit exposure to market risk to:
|
|
|
||
Expected future purchases of natural gas (in MMdts)
|
90.8
|
|
24.5
|
|
Expected future sales of natural gas (in MMdts)
|
87.7
|
|
0.3
|
|
Expected future purchases of electricity (in MMmWh)
|
1.1
|
|
|
|
Expected future sales of electricity (in MMmWh)
|
0.9
|
|
|
|
|
|
|
||
Basis and Index related net purchase (sale) contracts (in MMdts)
|
18.8
|
|
3.8
|
|
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
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Energy-related commodity contracts:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives - Energy Related - Current
|
|
$
|
34,988
|
|
|
$
|
35,229
|
|
|
$
|
54,021
|
|
|
$
|
24,134
|
|
Derivatives - Energy Related - Non-Current
|
|
11,883
|
|
|
7,278
|
|
|
7,169
|
|
|
7,256
|
|
||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives - Other - Current
|
|
—
|
|
|
1,092
|
|
|
—
|
|
|
588
|
|
||||
Derivatives - Other - Noncurrent
|
|
—
|
|
|
11,449
|
|
|
—
|
|
|
7,285
|
|
||||
Total derivatives not designated as hedging instruments under GAAP
|
|
$
|
46,871
|
|
|
$
|
55,048
|
|
|
$
|
61,190
|
|
|
$
|
39,263
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Derivatives
|
|
$
|
46,871
|
|
|
$
|
55,048
|
|
|
$
|
61,190
|
|
|
$
|
39,263
|
|
SJG:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments under GAAP
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Energy-related commodity contracts:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related – Current
|
|
$
|
1,829
|
|
|
$
|
5,996
|
|
|
$
|
5,464
|
|
|
$
|
2,146
|
|
Derivatives – Energy Related – Non-Current
|
|
—
|
|
|
297
|
|
|
15
|
|
|
43
|
|
||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives – Other - Current
|
|
—
|
|
|
464
|
|
|
—
|
|
|
343
|
|
||||
Derivatives – Other - Noncurrent
|
|
—
|
|
|
7,236
|
|
|
—
|
|
|
5,524
|
|
||||
Total derivatives not designated as hedging instruments under GAAP
|
|
$
|
1,829
|
|
|
$
|
13,993
|
|
|
$
|
5,479
|
|
|
$
|
8,056
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Derivatives
|
|
$
|
1,829
|
|
|
$
|
13,993
|
|
|
$
|
5,479
|
|
|
$
|
8,056
|
|
As of June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
|
|
$
|
46,871
|
|
|
$
|
—
|
|
|
$
|
46,871
|
|
|
$
|
(25,996
|
)
|
(A)
|
$
|
—
|
|
|
$
|
20,875
|
|
Derivatives - Energy Related Liabilities
|
|
$
|
(42,507
|
)
|
|
$
|
—
|
|
|
$
|
(42,507
|
)
|
|
$
|
25,996
|
|
(B)
|
$
|
10,371
|
|
|
$
|
(6,140
|
)
|
Derivatives - Other
|
|
$
|
(12,541
|
)
|
|
$
|
—
|
|
|
$
|
(12,541
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(12,541
|
)
|
SJG:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives - Energy Related Assets
|
|
$
|
1,829
|
|
|
$
|
—
|
|
|
$
|
1,829
|
|
|
$
|
(45
|
)
|
(A)
|
$
|
—
|
|
|
$
|
1,784
|
|
Derivatives - Energy Related Liabilities
|
|
$
|
(6,293
|
)
|
|
$
|
—
|
|
|
$
|
(6,293
|
)
|
|
$
|
45
|
|
(B)
|
$
|
5,794
|
|
|
$
|
(454
|
)
|
Derivatives - Other
|
|
$
|
(7,700
|
)
|
|
$
|
—
|
|
|
$
|
(7,700
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7,700
|
)
|
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
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Derivatives in Cash Flow Hedging Relationships under GAAP
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
||||||||
Losses reclassified from AOCL into income (a)
|
|
$
|
(12
|
)
|
|
$
|
(12
|
)
|
|
$
|
(24
|
)
|
|
$
|
(24
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
SJG:
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
||||||||
Losses reclassified from AOCL into income (a)
|
|
$
|
(12
|
)
|
|
$
|
(12
|
)
|
|
(24
|
)
|
|
(24
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Derivatives Not Designated as Hedging Instruments under GAAP
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
|
||||||||
(Losses) Gains on energy-related commodity contracts (a)
|
|
$
|
(143
|
)
|
|
$
|
(6,178
|
)
|
|
$
|
(12,203
|
)
|
|
$
|
17,175
|
|
(Losses) Gains on interest rate contracts (b)
|
|
(1,745
|
)
|
|
620
|
|
|
(2,835
|
)
|
|
2,248
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
(1,888
|
)
|
|
$
|
(5,558
|
)
|
|
$
|
(15,038
|
)
|
|
$
|
19,423
|
|
13.
|
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 June 30, 2019
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Available-for-Sale Securities (A)
|
$
|
41
|
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives – Energy Related Assets (B)
|
46,871
|
|
|
6,935
|
|
|
16,212
|
|
|
23,724
|
|
||||
|
$
|
46,912
|
|
|
$
|
6,976
|
|
|
$
|
16,212
|
|
|
$
|
23,724
|
|
SJG:
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Assets (B)
|
$
|
1,829
|
|
|
$
|
45
|
|
|
$
|
24
|
|
|
$
|
1,760
|
|
|
$
|
1,829
|
|
|
$
|
45
|
|
|
$
|
24
|
|
|
$
|
1,760
|
|
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Liabilities (B)
|
$
|
42,507
|
|
|
$
|
20,245
|
|
|
$
|
8,498
|
|
|
$
|
13,764
|
|
Derivatives – Other (C)
|
12,541
|
|
|
—
|
|
|
12,541
|
|
|
—
|
|
||||
|
$
|
55,048
|
|
|
$
|
20,245
|
|
|
$
|
21,039
|
|
|
$
|
13,764
|
|
SJG:
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivatives – Energy Related Liabilities (B)
|
$
|
6,293
|
|
|
$
|
5,839
|
|
|
$
|
402
|
|
|
$
|
52
|
|
Derivatives – Other (C)
|
7,700
|
|
|
—
|
|
|
7,700
|
|
|
—
|
|
||||
|
$
|
13,993
|
|
|
$
|
5,839
|
|
|
$
|
8,102
|
|
|
$
|
52
|
|
As of December 31, 2018
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
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
|
|
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 June 30, 2019
|
Valuation Technique
|
Significant Unobservable Input
|
Range
[Weighted Average] |
|
|||||
|
Assets
|
Liabilities
|
|
|
|
|
||||
Forward Contract - Natural Gas
|
$
|
1,760
|
|
$
|
52
|
|
Discounted Cash Flow
|
Forward price (per dt)
|
$1.78 - $5.78 [$2.66]
|
(A)
|
Type
|
Fair Value at December 31, 2018
|
Valuation Technique
|
Significant Unobservable Input
|
Range
[Weighted Average] |
|
|||||
|
Assets
|
Liabilities
|
|
|
|
|
||||
Forward Contract - Natural Gas
|
$
|
5,005
|
|
$
|
77
|
|
Discounted Cash Flow
|
Forward price (per dt)
|
$3.13 - $6.00 [$4.53]
|
(A)
|
|
Three Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2019 |
||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
||||
Balance at beginning of period
|
$
|
8,277
|
|
|
$
|
16,061
|
|
Other Changes in Fair Value from Continuing and New Contracts, Net (A)
|
6,553
|
|
|
4,285
|
|
||
Settlements
|
(4,870
|
)
|
|
(10,386
|
)
|
||
|
|
|
|
||||
Balance at end of period
|
$
|
9,960
|
|
|
$
|
9,960
|
|
|
|
|
|
||||
SJG:
|
|
|
|
||||
Balance at beginning of period
|
$
|
1,706
|
|
|
$
|
4,928
|
|
Other Changes in Fair Value from Continuing and New Contracts, Net (A)
|
2
|
|
|
1,708
|
|
||
Settlements
|
—
|
|
|
(4,928
|
)
|
||
|
|
|
|
||||
Balance at end of period
|
$
|
1,708
|
|
|
$
|
1,708
|
|
|
Three Months Ended
June 30, 2018 |
|
Six Months Ended
June 30, 2018 |
||||
SJI (includes SJG and all other consolidated subsidiaries):
|
|
|
|
||||
Balance at beginning of period
|
$
|
16,586
|
|
|
$
|
3,110
|
|
Other Changes in Fair Value from Continuing and New Contracts, Net (A)
|
6,215
|
|
|
10,204
|
|
||
Settlements
|
(4,440
|
)
|
|
5,047
|
|
||
|
|
|
|
||||
Balance at end of period
|
$
|
18,361
|
|
|
$
|
18,361
|
|
|
|
|
|
||||
SJG:
|
|
|
|
||||
Balance at beginning of period
|
$
|
(6
|
)
|
|
$
|
2,052
|
|
Other Changes in Fair Value from Continuing and New Contracts, Net (A)
|
6,003
|
|
|
5,997
|
|
||
Settlements
|
—
|
|
|
(2,052
|
)
|
||
|
|
|
|
||||
Balance at end of period
|
$
|
5,997
|
|
|
$
|
5,997
|
|
14.
|
LONG-TERM DEBT:
|
15.
|
ACCUMULATED OTHER COMPREHENSIVE LOSS:
|
|
Postretirement Liability Adjustment
|
Unrealized Gain (Loss) on Derivatives-Other
|
Unrealized Gain (Loss) on Available-for-Sale Securities
|
Other Comprehensive Income (Loss) of Affiliated Companies
|
Total
|
||||||||||
Balance at April 1, 2019 (a)
|
$
|
(25,626
|
)
|
$
|
(354
|
)
|
$
|
(10
|
)
|
$
|
(97
|
)
|
$
|
(26,087
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Amounts reclassified from AOCL (b)
|
—
|
|
8
|
|
—
|
|
—
|
|
8
|
|
|||||
Net current period other comprehensive income
|
—
|
|
8
|
|
—
|
|
—
|
|
8
|
|
|||||
Balance at June 30, 2019 (a)
|
$
|
(25,626
|
)
|
$
|
(346
|
)
|
$
|
(10
|
)
|
$
|
(97
|
)
|
$
|
(26,079
|
)
|
|
Postretirement Liability Adjustment
|
Unrealized Gain (Loss) on Derivatives-Other
|
Unrealized Gain (Loss) on Available-for-Sale Securities
|
Other Comprehensive Income (Loss) of Affiliated Companies
|
Total
|
||||||||||
Balance at January 1, 2019 (a)
|
$
|
(25,626
|
)
|
$
|
(362
|
)
|
$
|
(10
|
)
|
$
|
(97
|
)
|
$
|
(26,095
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Amounts reclassified from AOCL (b)
|
—
|
|
16
|
|
—
|
|
—
|
|
16
|
|
|||||
Net current period other comprehensive income
|
—
|
|
16
|
|
—
|
|
—
|
|
16
|
|
|||||
Balance at June 30, 2019 (a)
|
$
|
(25,626
|
)
|
$
|
(346
|
)
|
$
|
(10
|
)
|
$
|
(97
|
)
|
$
|
(26,079
|
)
|
Components of AOCL
|
Amounts Reclassified from AOCL
|
|
Affected Line Item in the Condensed Consolidated Statements of Income
|
||||||||
Three Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2019 |
|
||||||||
Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges
|
$
|
12
|
|
|
$
|
24
|
|
|
Interest Charges
|
||
Income Taxes
|
(4
|
)
|
|
(8
|
)
|
|
Income Taxes (a)
|
||||
Losses from reclassifications for the period net of tax
|
$
|
8
|
|
|
$
|
16
|
|
|
|
|
Postretirement Liability Adjustment
|
|
Unrealized Gain (Loss) on Derivatives-Other
|
|
Total
|
||||||
Balance at April 1, 2019 (a)
|
$
|
(21,901
|
)
|
|
$
|
(448
|
)
|
|
$
|
(22,349
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
—
|
|
|
—
|
|
|||
Amounts reclassified from AOCL (b)
|
—
|
|
|
8
|
|
|
8
|
|
|||
Net current period other comprehensive income
|
—
|
|
|
8
|
|
|
8
|
|
|||
Balance at June 30, 2019 (a)
|
$
|
(21,901
|
)
|
|
$
|
(440
|
)
|
|
$
|
(22,341
|
)
|
|
Postretirement Liability Adjustment
|
|
Unrealized Gain (Loss) on Derivatives-Other
|
|
Total
|
||||||
Balance at January 1, 2019 (a)
|
$
|
(21,901
|
)
|
|
$
|
(456
|
)
|
|
$
|
(22,357
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
—
|
|
|
—
|
|
|||
Amounts reclassified from AOCL (b)
|
—
|
|
|
16
|
|
|
16
|
|
|||
Net current period other comprehensive income (loss)
|
—
|
|
|
16
|
|
|
16
|
|
|||
Balance at June 30, 2019 (a)
|
$
|
(21,901
|
)
|
|
$
|
(440
|
)
|
|
$
|
(22,341
|
)
|
Components of AOCL
|
|
Amounts Reclassified from AOCL
|
|
Affected Line Item in the Condensed Statements of Income
|
||||||||
|
Three Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2019 |
|
||||||||
Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges
|
|
$
|
12
|
|
|
$
|
24
|
|
|
Interest Charges
|
||
Income Taxes
|
|
(4
|
)
|
|
(8
|
)
|
|
Income Taxes (a)
|
||||
Losses from reclassifications for the period net of tax
|
|
$
|
8
|
|
|
$
|
16
|
|
|
|
16.
|
REVENUE:
|
|
|
|
|
|
|
Three Months Ended
June 30, 2019 |
|||||||||||||||||||||||||||
|
SJG Utility Operations
|
ETG Utility Operations
|
ELK Utility Operations
|
Wholesale Energy Operations
|
Retail Electric Operations
|
On-Site Energy Production
|
Appliance Service Operations
|
Corporate Services and Intersegment
|
Total
|
||||||||||||||||||
Customer Type:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Residential
|
$
|
28,679
|
|
$
|
27,503
|
|
$
|
207
|
|
$
|
—
|
|
$
|
2,953
|
|
$
|
—
|
|
$
|
484
|
|
$
|
—
|
|
$
|
59,826
|
|
Commercial & Industrial
|
15,503
|
|
16,065
|
|
482
|
|
111,794
|
|
12,419
|
|
14,788
|
|
—
|
|
(3,418
|
)
|
167,633
|
|
|||||||||
OSS & Capacity Release
|
2,244
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,244
|
|
|||||||||
Other
|
571
|
|
1,527
|
|
39
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,137
|
|
|||||||||
|
$
|
46,997
|
|
$
|
45,095
|
|
$
|
728
|
|
$
|
111,794
|
|
$
|
15,372
|
|
$
|
14,788
|
|
$
|
484
|
|
$
|
(3,418
|
)
|
$
|
231,840
|
|
Product Line:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Gas
|
$
|
46,997
|
|
$
|
45,095
|
|
$
|
728
|
|
$
|
111,794
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,234
|
)
|
$
|
203,380
|
|
Electric
|
—
|
|
—
|
|
—
|
|
—
|
|
15,372
|
|
—
|
|
—
|
|
(2,184
|
)
|
13,188
|
|
|||||||||
Solar
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,438
|
|
—
|
|
—
|
|
6,438
|
|
|||||||||
CHP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,794
|
|
—
|
|
—
|
|
6,794
|
|
|||||||||
Landfills
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,556
|
|
—
|
|
—
|
|
1,556
|
|
|||||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
484
|
|
—
|
|
484
|
|
|||||||||
|
$
|
46,997
|
|
$
|
45,095
|
|
$
|
728
|
|
$
|
111,794
|
|
$
|
15,372
|
|
$
|
14,788
|
|
$
|
484
|
|
$
|
(3,418
|
)
|
$
|
231,840
|
|
Six Months Ended
June 30, 2019 |
|||||||||||||||||||||||||||
|
SJG Utility Operations
|
ETG Utility Operations
|
ELK Utility Operations
|
Wholesale Energy Operations
|
Retail Electric Operations
|
On-Site Energy Production
|
Appliance Service Operations
|
Corporate Services and Intersegment
|
Total
|
||||||||||||||||||
Customer Type:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Residential
|
$
|
213,633
|
|
$
|
127,492
|
|
$
|
1,961
|
|
$
|
—
|
|
$
|
6,761
|
|
$
|
—
|
|
$
|
1,015
|
|
$
|
—
|
|
$
|
350,862
|
|
Commercial & Industrial
|
61,091
|
|
58,213
|
|
2,140
|
|
311,561
|
|
25,422
|
|
26,118
|
|
—
|
|
(6,425
|
)
|
478,120
|
|
|||||||||
OSS & Capacity Release
|
4,014
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,014
|
|
|||||||||
Other
|
1,243
|
|
4,174
|
|
104
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,521
|
|
|||||||||
|
$
|
279,981
|
|
$
|
189,879
|
|
$
|
4,205
|
|
$
|
311,561
|
|
$
|
32,183
|
|
$
|
26,118
|
|
$
|
1,015
|
|
$
|
(6,425
|
)
|
$
|
838,517
|
|
Product Line:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Gas
|
$
|
279,981
|
|
$
|
189,879
|
|
$
|
4,205
|
|
$
|
311,561
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(2,634
|
)
|
$
|
782,992
|
|
Electric
|
—
|
|
—
|
|
—
|
|
—
|
|
32,183
|
|
—
|
|
—
|
|
(3,791
|
)
|
28,392
|
|
|||||||||
Solar
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,014
|
|
—
|
|
—
|
|
9,014
|
|
|||||||||
CHP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14,153
|
|
—
|
|
—
|
|
14,153
|
|
|||||||||
Landfills
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,951
|
|
—
|
|
—
|
|
2,951
|
|
|||||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,015
|
|
—
|
|
1,015
|
|
|||||||||
|
$
|
279,981
|
|
$
|
189,879
|
|
$
|
4,205
|
|
$
|
311,561
|
|
$
|
32,183
|
|
$
|
26,118
|
|
$
|
1,015
|
|
$
|
(6,425
|
)
|
$
|
838,517
|
|
Three Months Ended
June 30, 2018
|
||||||||||||||||||||||||||||||
|
SJG Utility Operations
|
ETG Utility Operations
|
ELK Utility Operations
|
Wholesale Energy Operations
|
Retail Gas and Other Operations
|
Retail Electric Operations
|
On-Site Energy Production
|
Appliance Service Operations
|
Corporate Services and Intersegment
|
Total
|
||||||||||||||||||||
Customer Type:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Residential
|
$
|
43,982
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,391
|
|
$
|
—
|
|
$
|
451
|
|
$
|
—
|
|
$
|
50,824
|
|
Commercial & Industrial
|
18,563
|
|
—
|
|
—
|
|
76,376
|
|
15,121
|
|
22,430
|
|
24,734
|
|
—
|
|
(7,705
|
)
|
149,519
|
|
||||||||||
OSS & Capacity Release
|
972
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
972
|
|
||||||||||
Other
|
539
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
539
|
|
||||||||||
|
$
|
64,056
|
|
$
|
—
|
|
$
|
—
|
|
$
|
76,376
|
|
$
|
15,121
|
|
$
|
28,821
|
|
$
|
24,734
|
|
$
|
451
|
|
$
|
(7,705
|
)
|
$
|
201,854
|
|
Product Line:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Gas
|
$
|
64,056
|
|
$
|
—
|
|
$
|
—
|
|
$
|
76,376
|
|
$
|
15,121
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,914
|
)
|
$
|
153,639
|
|
Electric
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
28,821
|
|
—
|
|
—
|
|
(2,012
|
)
|
26,809
|
|
||||||||||
Solar
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
15,905
|
|
—
|
|
(3,779
|
)
|
12,126
|
|
||||||||||
CHP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,161
|
|
—
|
|
—
|
|
7,161
|
|
||||||||||
Landfills
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,668
|
|
—
|
|
—
|
|
1,668
|
|
||||||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
451
|
|
—
|
|
451
|
|
||||||||||
|
$
|
64,056
|
|
$
|
—
|
|
$
|
—
|
|
$
|
76,376
|
|
$
|
15,121
|
|
$
|
28,821
|
|
$
|
24,734
|
|
$
|
451
|
|
$
|
(7,705
|
)
|
$
|
201,854
|
|
Six Months Ended
June 30, 2018
|
||||||||||||||||||||||||||||||
|
SJG Utility Operations
|
ETG Utility Operations
|
ELK Utility Operations
|
Wholesale Energy Operations
|
Retail Gas and Other Operations
|
Retail Electric Operations
|
On-Site Energy Production
|
Appliance Service Operations
|
Corporate Services and Intersegment
|
Total
|
||||||||||||||||||||
Customer Type:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Residential
|
$
|
191,244
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
$
|
14,487
|
|
—
|
|
$
|
971
|
|
—
|
|
$
|
206,702
|
|
||||
Commercial & Industrial
|
59,368
|
|
—
|
|
—
|
|
250,222
|
|
48,367
|
|
44,380
|
|
45,891
|
|
—
|
|
(16,475
|
)
|
431,753
|
|
||||||||||
OSS & Capacity Release
|
6,176
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,176
|
|
||||||||||
Other
|
1,202
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,202
|
|
||||||||||
|
$
|
257,990
|
|
$
|
—
|
|
$
|
—
|
|
$
|
250,222
|
|
$
|
48,367
|
|
$
|
58,867
|
|
$
|
45,891
|
|
$
|
971
|
|
$
|
(16,475
|
)
|
$
|
645,833
|
|
Product Line:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Gas
|
$
|
257,990
|
|
$
|
—
|
|
$
|
—
|
|
$
|
250,222
|
|
$
|
48,367
|
|
—
|
|
—
|
|
—
|
|
$
|
(6,488
|
)
|
$
|
550,091
|
|
|||
Electric
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
58,867
|
|
—
|
|
—
|
|
(3,680
|
)
|
55,187
|
|
||||||||||
Solar
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
27,741
|
|
—
|
|
(6,307
|
)
|
21,434
|
|
||||||||||
CHP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
15,014
|
|
—
|
|
—
|
|
15,014
|
|
||||||||||
Landfills
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,136
|
|
—
|
|
—
|
|
3,136
|
|
||||||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
971
|
|
—
|
|
971
|
|
||||||||||
|
$
|
257,990
|
|
$
|
—
|
|
$
|
—
|
|
$
|
250,222
|
|
$
|
48,367
|
|
$
|
58,867
|
|
$
|
45,891
|
|
$
|
971
|
|
$
|
(16,475
|
)
|
$
|
645,833
|
|
17.
|
BUSINESS COMBINATION:
|
(in thousands)
|
ETG and ELK
|
||
Property, Plant and Equipment
|
$
|
1,202,435
|
|
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
|
39,470
|
|
|
Regulatory Assets
|
136,212
|
|
|
Goodwill
|
700,286
|
|
|
Total assets acquired
|
2,130,448
|
|
|
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
|
192,811
|
|
|
Asset Retirement Obligation
|
113,093
|
|
|
Other
|
1,107
|
|
|
Total liabilities assumed
|
405,763
|
|
|
Total net assets acquired
|
$
|
1,724,685
|
|
18.
|
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS:
|
|
2019
|
||
Beginning Balance, January 1
|
$
|
734,607
|
|
Acquisition-related Working Capital Settlement
|
(15,600
|
)
|
|
Fair Value Adjustments During Measurement Period
|
(15,143
|
)
|
|
Ending Balance, June 30
|
$
|
703,864
|
|
19.
|
LEASES:
|
|
As of June 30, 2019
|
|||||
|
SJI Consolidated
|
SJG
|
||||
2019 (excluding the six months ended June 30, 2019)
|
$
|
850
|
|
$
|
91
|
|
2020
|
1,080
|
|
152
|
|
||
2021
|
233
|
|
39
|
|
||
2022
|
65
|
|
21
|
|
||
2023
|
34
|
|
19
|
|
||
Thereafter
|
114
|
|
114
|
|
||
Total future minimum lease payments
|
2,376
|
|
436
|
|
||
Less imputed interest
|
82
|
|
38
|
|
||
Total lease payments
|
$
|
2,294
|
|
$
|
398
|
|
Included in the condensed consolidated balance sheet
|
|
|
||||
Current lease liabilities (included in Other Current Liabilities)
|
$
|
1,519
|
|
$
|
169
|
|
Long-term lease liabilities (included in Other Noncurrent Liabilities)
|
775
|
|
229
|
|
||
Total lease liabilities
|
$
|
2,294
|
|
$
|
398
|
|
|
Total
|
Up to 1 year
|
Years 2&3
|
Years 4&5
|
More than 5 years
|
|||||
SJI Consolidated
|
1,885
|
|
838
|
|
916
|
|
131
|
|
—
|
|
SJG
|
175
|
|
56
|
|
112
|
|
7
|
|
—
|
|
Year ended June 30,
|
|
||
2019 (remaining six months)
|
$
|
2,698
|
|
2020
|
5,396
|
|
|
2021
|
5,396
|
|
|
2022
|
5,396
|
|
|
2023
|
5,396
|
|
|
2024
|
5,396
|
|
|
Thereafter
|
13,042
|
|
|
Total minimum future rentals
|
$
|
42,720
|
|
20.
|
SUBSEQUENT EVENT:
|
•
|
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.
|
•
|
SJG utility operations consist primarily of natural gas distribution to residential, commercial and industrial customers in southern New Jersey.
|
▪
|
ETG utility operations consist 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.
|
•
|
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 and SXLE.
|
•
|
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 among the above SJI consolidated entities.
|
•
|
The net income contribution from on-site energy production at Marina for the three months ended June 30, 2019 increased $77.9 million to a net loss of $0.1 million, primarily due to $74.2 million of impairment charges taken on solar generating facilities in the second quarter of 2018, which were primarily driven by the purchase price in the agreement to sell solar assets being less than the carrying amount of the assets (see Note 1 to the condensed consolidated financial statements). Also contributing were consulting and legal costs related to the sale of Marina's solar assets to a third-party buyer that were incurred during the three months ended June 30, 2018 that did not recur in the same period in 2019. Lower depreciation expense resulting from the sale of solar assets also contributed to the overall increase in net income. These are partially offset with lower margins resulting from less SREC revenue as discussed under "Gross Margin - Energy Services" below.
|
•
|
Acquisition costs were approximately $13.0 million lower during the three months ended June 30, 2019 compared with the same period in 2018. This is primarily due to the Company incurring less legal, consulting and other professional fees related to the Acquisition than the prior year period, as the costs incurred in 2018 were to finalize the Acquisition. These costs are recorded in the Corporate & Services segment.
|
•
|
The net income contribution from the wholesale energy operations at SJRG for the three months ended June 30, 2019 increased $6.4 million to a net loss of $1.4 million compared with the same period in 2018, primarily 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 was partially offset with lower margins on daily energy trading activities in the second quarter of 2019 compared to the same period in the prior year as discussed under "Gross Margin - Energy Group" below.
|
•
|
The net income contribution from gas utility operations at SJG for the three months ended June 30, 2019 increased $0.4 million to $2.0 million, primarily due to roll-in of infrastructure program investments and customer growth, partially offset by an overall increase in depreciation and interest expenses.
|
•
|
SJI recorded $7.9 million of financing/interest costs in connection with the Acquisition during the three months ended June 30, 2019 (see Notes 1 and 17 to the condensed consolidated financial statements). These costs are related to debt that was entered into during the second quarter of 2018 in order to finance the Acquisition. These costs are recorded in the Corporate & Services segment.
|
•
|
In connection with the Acquisition (see Notes 1 and 17 to the condensed consolidated financial statements), SJI consolidated the accounts of ETG and ELK gas utility operations beginning with the third quarter of 2018. ETG and ELK contributed a combined net loss of $3.9 million for the three months ended June 30, 2019.
|
•
|
The net income contribution from SJE for the three months ended June 30, 2019 decreased $3.5 million to a net loss of $1.5 million compared with the same period in 2018. This was primarily due to the sale of the retail gas business in the fourth quarter of 2018, along with the change in unrealized gains and losses recorded on forward financial contracts at the retail electric operations at SJE due to price volatility as discussed under "Gross Margin - Energy Group" below.
|
•
|
The change in unrealized gains and losses on the Company's interest rate derivative contracts contributed a $1.7 million decrease in net income when comparing the three months ended June 30, 2019 to the same period in 2018.
|
•
|
The net income contribution from on-site energy production at Marina for the six months ended June 30, 2019 increased $79.7 million to a net loss of $1.4 million, primarily due to $74.2 million of impairment charges taken on solar generating facilities in the second quarter of 2018, which were primarily driven by the purchase price in the agreement to sell solar assets being less than the carrying amount of the assets (see Note 1 to the condensed consolidated financial statements). Also contributing were consulting and legal costs related to the sale of Marina's solar assets to a third-party buyer that were incurred during the six months ended June 30, 2018 that did not recur in the same period in 2019. Lower depreciation expense resulting from the sale of solar assets also contributed to the overall increase in net income. These are partially offset with lower margins resulting from less SREC revenue as discussed under "Gross Margin - Energy Services" below.
|
•
|
In connection with the Acquisition (see Notes 1 and 17 to the condensed consolidated financial statements), SJI consolidated the accounts of ETG and ELK gas utility operations beginning with the third quarter of 2018. ETG and ELK contributed combined net income of $27.4 million for the six months ended June 30, 2019.
|
•
|
Acquisition costs were approximately $18.5 million lower during the six months ended June 30, 2019 compared with the same period in 2018. This is primarily due to the Company incurring less legal, consulting and other professional fees related to the Acquisition than the prior year period, as the costs incurred in 2018 were to finalize the Acquisition. These costs are recorded in the Corporate & Services segment.
|
•
|
The net income contribution from gas utility operations at SJG for the six months ended June 30, 2019 increased $2.4 million to $70.7 million, primarily due to roll-in of infrastructure program investments and customer growth, partially offset by an overall increase in depreciation and interest expenses.
|
•
|
The net income contribution from the wholesale energy operations at SJRG for the six months ended June 30, 2019 decreased $51.6 million to a net loss of $2.8 million compared with the same period in 2018, primarily due to lower margins on daily energy trading activities and an overall decrease in sales as discussed under "Operating Revenues - Energy Group" below. Also contributing was the change in unrealized gains and losses on forward financial contracts due to price volatility, as discussed under "Operating Revenues - Energy Group" below.
|
•
|
SJI recorded $16.4 million of financing/interest costs in connection with the Acquisition during the six months ended June 30, 2019 (see Notes 1 and 17 to the condensed consolidated financial statements). These costs are related to debt that was entered into during the second quarter of 2018 in order to finance the Acquisition. These costs are recorded in the Corporate & Services segment.
|
•
|
The change in unrealized gains and losses on the Company's interest rate derivative contracts contributed a $3.8 million decrease in net income when comparing the six months ended June 30, 2019 to the same period in 2018.
|
•
|
SJI recorded $2.2 million of costs to reorganize and restructure the business, including severance and other employee separation costs, that were incurred during the six months ended June 30, 2019. These costs are recorded in the Corporate & Services segment. A significant portion of the volatility in operating results is due to the impact of the accounting methods associated with SJI’s derivative activities. SJI uses derivatives to limit its exposure to market risk on transactions to buy, sell, transport and store natural gas and to buy and sell retail electricity. SJI also uses derivatives to limit its exposure
|
•
|
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 commodity 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 three and six months ended June 30, 2019, Economic Earnings excludes costs incurred to reorganize and restructure the business, including severance and other employee separation costs.
|
•
|
For the three and six months ended June 30, 2019 and 2018, Economic Earnings excludes costs to acquire the assets of ETG and ELK, including legal, consulting and other professional fees, and costs incurred to exit the Transaction Service Agreement (TSA). Economic Earnings also excludes costs incurred and gains recognized on the sale of the remaining solar assets, and the sale of certain SREC's.
|
•
|
For the three and six months ended June 30, 2019 and 2018, 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 three and six months ended June 30, 2018, Economic Earnings excludes approximately $99.2 million (pre-tax) of impairment charges recorded 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. See Note 1 to the condensed consolidated financial statements.
|
•
|
SJI recorded $7.9 million of financing costs and other charges in connection with the Acquisition during the three months ended June 30, 2019 (see Notes 1 and 17 to the condensed consolidated financial statements). These costs are related to debt that was entered into during the second quarter of 2018 in order to finance the Acquisition. These costs are recorded in the Corporate & Services segment.
|
•
|
The income contribution from on-site energy production at Marina for the three months ended June 30, 2019 decreased $4.1 million to a net loss of $1.8 million, primarily due to less SREC revenue in 2019 as a result of the sale of solar assets to a third party buyer as discussed under "Gross Margin - Energy Services" below. This is partially offset with lower depreciation expense resulting from the sale of solar assets.
|
•
|
In connection with the Acquisition (see Notes 1 and 17 to the condensed consolidated financial statements), SJI consolidated the accounts of ETG and ELK gas utility operations beginning with the third quarter of 2018. ETG and ELK contributed a combined net loss of $3.9 million for the three months ended June 30, 2019.
|
•
|
The income contribution from the wholesale energy operations at SJRG for the three months ended June 30, 2019 decreased $2.8 million to a net loss of $2.0 million, primarily due to lower margins on daily energy trading activities during the three months ended June 30, 2019 compared to the same period in the prior year.
|
•
|
The income contribution from gas utility operations at SJG for the three months ended June 30, 2019 increased $0.4 million to $2.0 million, primarily due to roll-in of infrastructure program investments and customer growth, partially offset by an overall increase in depreciation and interest expenses.
|
•
|
The income contribution from the wholesale energy operations at SJRG for the six months ended June 30, 2019 decreased $31.6 million to $5.2 million, primarily due to lower margins on daily energy trading activities during the six months ended June 30, 2019 compared to the same period in the prior year.
|
•
|
SJI recorded $16.4 million of financing costs and other charges in connection with the Acquisition during the six months ended June 30, 2019 (see Notes 1 and 17 to the condensed consolidated financial statements). These costs are related to debt that was entered into during the second quarter of 2018 in order to finance the Acquisition and are recorded in the Corporate & Services segment.
|
•
|
In connection with the Acquisition (see Notes 1 and 17 to the condensed consolidated financial statements), SJI consolidated the accounts of ETG and ELK gas utility operations beginning with the third quarter of 2018. ETG and ELK contributed a combined net income of $27.4 million for the six months ended June 30, 2019.
|
•
|
The net income contribution from gas utility operations at SJG for the six months ended June 30, 2019 increased $2.4 million to $70.7 million, primarily due to roll-in of infrastructure program investments and customer growth, partially offset by an overall increase in depreciation and interest expenses.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Income from Continuing Operations
|
$
|
(13,304
|
)
|
|
$
|
(93,793
|
)
|
|
$
|
72,395
|
|
|
$
|
17,513
|
|
Minus/Plus:
|
|
|
|
|
|
|
|
||||||||
Unrealized Mark-to-Market Losses (Gains) on Derivatives
|
1,888
|
|
|
5,697
|
|
|
15,038
|
|
|
(19,493
|
)
|
||||
Loss on Property, Plant and Equipment (A)
|
—
|
|
|
99,233
|
|
|
—
|
|
|
99,233
|
|
||||
Net Losses from a Legal Proceeding in a Pricing Dispute (B)
|
986
|
|
|
1,661
|
|
|
1,977
|
|
|
3,006
|
|
||||
Acquisition/Sale Net (Gains) Costs (C)
|
(1,822
|
)
|
|
26,246
|
|
|
163
|
|
|
35,523
|
|
||||
Other Costs (D)
|
422
|
|
|
—
|
|
|
2,995
|
|
|
—
|
|
||||
Income Taxes (E)
|
(391
|
)
|
|
(33,555
|
)
|
|
(5,352
|
)
|
|
(29,875
|
)
|
||||
Economic Earnings
|
$
|
(12,221
|
)
|
|
$
|
5,489
|
|
|
$
|
87,216
|
|
|
$
|
105,907
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per Share from Continuing Operations
|
$
|
(0.14
|
)
|
|
$
|
(1.12
|
)
|
|
$
|
0.79
|
|
|
$
|
0.21
|
|
Minus/Plus:
|
|
|
|
|
|
|
|
||||||||
Unrealized Mark-to-Market Losses (Gains) on Derivatives
|
0.02
|
|
|
0.07
|
|
|
0.16
|
|
|
(0.23
|
)
|
||||
Loss on Property, Plant and Equipment (A)
|
—
|
|
|
1.18
|
|
|
—
|
|
|
1.20
|
|
||||
Net Losses from a Legal Proceeding in a Pricing Dispute (B)
|
0.01
|
|
|
0.02
|
|
|
0.02
|
|
|
0.04
|
|
||||
Acquisition/Sale Net (Gains) Costs (C)
|
(0.02
|
)
|
|
0.31
|
|
|
0.01
|
|
|
0.43
|
|
||||
Other Costs (D)
|
0.01
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
||||
Income Taxes (E)
|
(0.01
|
)
|
|
(0.39
|
)
|
|
(0.06
|
)
|
|
(0.36
|
)
|
||||
Economic Earnings per Share
|
$
|
(0.13
|
)
|
|
$
|
0.07
|
|
|
$
|
0.95
|
|
|
$
|
1.29
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
(Losses) Gains on Energy Related Commodity Contracts
|
$
|
(143
|
)
|
|
$
|
(6,178
|
)
|
|
$
|
(12,203
|
)
|
|
$
|
17,175
|
|
(Losses) Gains on Interest Rate Contracts
|
(1,745
|
)
|
|
620
|
|
|
(2,835
|
)
|
|
2,248
|
|
||||
Total before income taxes
|
(1,888
|
)
|
|
(5,558
|
)
|
|
(15,038
|
)
|
|
19,423
|
|
||||
Unrealized mark-to-market gains on derivatives held by affiliated companies, before taxes
|
—
|
|
|
(139
|
)
|
|
—
|
|
|
70
|
|
||||
Total unrealized mark-to-market (losses) gains on derivatives
|
(1,888
|
)
|
|
(5,697
|
)
|
|
(15,038
|
)
|
|
19,493
|
|
||||
Loss on Property, Plant and Equipment (A)
|
—
|
|
|
(99,233
|
)
|
|
—
|
|
|
(99,233
|
)
|
||||
Net Losses from a Legal Proceeding in a Pricing Dispute (B)
|
(986
|
)
|
|
(1,661
|
)
|
|
(1,977
|
)
|
|
(3,006
|
)
|
||||
Acquisition/Sale Net Gains (Costs) (C)
|
1,822
|
|
|
(26,246
|
)
|
|
(163
|
)
|
|
(35,523
|
)
|
||||
Other Costs (D)
|
(422
|
)
|
|
—
|
|
|
(2,995
|
)
|
|
—
|
|
||||
Income Taxes (E)
|
391
|
|
|
33,555
|
|
|
5,352
|
|
|
29,875
|
|
||||
Total reconciling items between (losses) income from continuing operations and economic earnings
|
$
|
(1,083
|
)
|
|
$
|
(99,282
|
)
|
|
$
|
(14,821
|
)
|
|
$
|
(88,394
|
)
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Utility Operating Revenues:
|
|
|
|
|
|
|
|
||||||||
Firm Sales -
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
27,139
|
|
|
$
|
42,184
|
|
|
207,105
|
|
|
$
|
182,938
|
|
|
Commercial
|
9,721
|
|
|
10,478
|
|
|
46,415
|
|
|
39,227
|
|
||||
Industrial
|
603
|
|
|
613
|
|
|
2,535
|
|
|
2,770
|
|
||||
Cogeneration & Electric Generation
|
391
|
|
|
1,750
|
|
|
971
|
|
|
3,049
|
|
||||
Firm Transportation -
|
|
|
|
|
|
|
|
||||||||
Residential
|
1,540
|
|
|
1,798
|
|
|
6,528
|
|
|
8,306
|
|
||||
Commercial
|
6,715
|
|
|
6,063
|
|
|
21,953
|
|
|
22,535
|
|
||||
Industrial
|
5,653
|
|
|
5,687
|
|
|
12,250
|
|
|
12,049
|
|
||||
Cogeneration & Electric Generation
|
1,241
|
|
|
1,014
|
|
|
2,969
|
|
|
2,350
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total Firm Revenues
|
53,003
|
|
|
69,587
|
|
|
300,726
|
|
|
273,224
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interruptible Sales
|
—
|
|
|
8
|
|
|
62
|
|
|
123
|
|
||||
Interruptible Transportation
|
260
|
|
|
256
|
|
|
640
|
|
|
578
|
|
||||
Off-System Sales
|
7,119
|
|
|
4,600
|
|
|
29,546
|
|
|
32,185
|
|
||||
Capacity Release
|
1,575
|
|
|
2,075
|
|
|
2,951
|
|
|
4,649
|
|
||||
Other
|
311
|
|
|
275
|
|
|
541
|
|
|
501
|
|
||||
|
62,268
|
|
|
76,801
|
|
|
334,466
|
|
|
311,260
|
|
||||
Less: Intercompany Sales
|
(1,247
|
)
|
|
(1,198
|
)
|
|
(2,647
|
)
|
|
(3,889
|
)
|
||||
Total Utility Operating Revenues
|
61,021
|
|
|
75,603
|
|
|
331,819
|
|
|
307,371
|
|
||||
Less:
|
|
|
|
|
|
|
|
|
|||||||
Cost of Sales - Utility
|
2,654
|
|
|
19,379
|
|
|
121,534
|
|
|
109,187
|
|
||||
Less: Intercompany Cost of Sales
|
(1,247
|
)
|
|
(1,198
|
)
|
|
(2,647
|
)
|
|
(3,889
|
)
|
||||
Total Cost of Sales - Utility (Excluding depreciation)
|
1,407
|
|
|
18,181
|
|
|
118,887
|
|
|
105,298
|
|
||||
Total Gross Margin
|
59,614
|
|
|
57,422
|
|
|
212,932
|
|
|
202,073
|
|
||||
Conservation Recoveries*
|
2,560
|
|
|
3,288
|
|
|
9,358
|
|
|
8,964
|
|
||||
RAC Recoveries*
|
5,219
|
|
|
4,086
|
|
|
10,438
|
|
|
8,172
|
|
||||
EET Recoveries*
|
650
|
|
|
465
|
|
|
1,146
|
|
|
977
|
|
||||
Revenue Taxes
|
204
|
|
|
179
|
|
|
880
|
|
|
545
|
|
||||
Utility Margin**
|
$
|
50,981
|
|
|
$
|
49,404
|
|
|
$
|
191,110
|
|
|
$
|
183,415
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Utility Margin:
|
|
|
|
|
|
|
|
||||||||
Residential
|
$
|
27,945
|
|
|
$
|
32,744
|
|
|
$
|
126,812
|
|
|
$
|
128,807
|
|
Commercial and Industrial
|
15,574
|
|
|
16,512
|
|
|
51,822
|
|
|
52,155
|
|
||||
Cogeneration and Electric Generation
|
1,064
|
|
|
1,196
|
|
|
2,268
|
|
|
2,191
|
|
||||
Interruptible
|
19
|
|
|
(102
|
)
|
|
43
|
|
|
27
|
|
||||
Off-System Sales & Capacity Release
|
515
|
|
|
608
|
|
|
2,186
|
|
|
2,543
|
|
||||
Other Revenues
|
538
|
|
|
817
|
|
|
787
|
|
|
1,043
|
|
||||
Margin Before Weather Normalization & Decoupling
|
45,655
|
|
|
51,775
|
|
|
183,918
|
|
|
186,766
|
|
||||
CIP Mechanism
|
4,382
|
|
|
(3,145
|
)
|
|
5,256
|
|
|
(4,905
|
)
|
||||
EET Mechanism
|
944
|
|
|
774
|
|
|
1,936
|
|
|
1,554
|
|
||||
Utility Margin**
|
$
|
50,981
|
|
|
$
|
49,404
|
|
|
$
|
191,110
|
|
|
$
|
183,415
|
|
|
Three Months Ended June 30, 2019
|
Six Months Ended June 30, 2019
|
||||
Utility Operating Revenues:
|
|
|
||||
Firm & Interruptible Sales -
|
|
|
||||
Residential
|
$
|
27,134
|
|
$
|
123,393
|
|
Commercial & Industrial
|
8,470
|
|
37,445
|
|
||
Firm & Interruptible Transportation -
|
|
|
||||
Residential
|
284
|
|
996
|
|
||
Commercial & Industrial
|
7,438
|
|
19,020
|
|
||
Other
|
1,528
|
|
4,174
|
|
||
Total Firm & Interruptible Revenues
|
44,854
|
|
185,028
|
|
||
Less:
|
|
|
||||
Total Cost of Sales - Utility (Excluding depreciation)
|
15,084
|
|
84,062
|
|
||
Total Gross Margin
|
29,770
|
|
100,966
|
|
||
Regulatory Rider Expenses*
|
1,199
|
|
3,459
|
|
||
Utility Margin**
|
$
|
28,571
|
|
$
|
97,507
|
|
Utility Margin:
|
|
|
||||
Residential
|
$
|
15,980
|
|
$
|
62,501
|
|
Commercial & Industrial
|
12,135
|
|
34,108
|
|
||
Regulatory Rider Expenses*
|
456
|
|
898
|
|
||
Utility Margin**
|
$
|
28,571
|
|
$
|
97,507
|
|
|
|
|
||||
Degree Days
|
424
|
|
2,994
|
|
•
|
Revenues from wholesale energy operations at SJRG, net of intercompany transactions, increased $59.5 million to $126.4 million for the three months ended June 30, 2019 compared with the same period in 2018. Revenues earned on gas supply contracts with electric generation facilities increased primarily due to three contracts that began operations in the second quarter of 2018 or later. Also contributing to the increase 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 increase of $11.6 million for the three months ended June 30, 2019 compared with the same period in 2018.
|
•
|
Revenues from wholesale energy operations at SJRG, net of intercompany transactions, increased $59.5 million to $316.4 million for the six months ended June 30, 2019 compared with the same period in 2018. Revenues earned on gas supply contracts with electric generation facilities increased for the six months ended June 30, 2019 compared with the same period in 2018primarily due to three contracts that began operations in the second quarter of 2018 or later as discussed above. Offsetting this increase was an overall decrease in sales, specifically compared to the first two weeks of January 2018 due to market conditions during that time, 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 $27.9 million for the six months ended June 30, 2019 compared with the same period in 2018. As discussed in Note 1 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2018, revenues and expenses related to the energy trading activities of the wholesale energy operations at SJRG are presented on a net basis in Operating Revenues – Nonutility on the condensed consolidated income statement.
|
•
|
The retail gas operations at SJE were sold November 30, 2018. As a result, the Company recorded no revenues from this business during the three and six months ended June 30, 2019, as opposed to revenues, net of intercompany transactions, of $22.7 million and $61.3 million for the same periods in the prior year.
|
•
|
Revenues from retail electric operations at SJE, net of intercompany transactions, decreased $22.2 million to $19.0 million, and $43.4 million to $40.7 million for the three and six months ended June 30, 2019, respectively, compared with the same periods in 2018, primarily due to lower average LMP per megawatt hour and lower overall sales volumes. Also contributing to the 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 .$2.8 million and $3.8 million for the three and six months ended June 30, 2019, respectively, compared with the same periods in 2018.
|
•
|
Revenues from on-site energy production at Marina, net of intercompany transactions, decreased $6.3 million, or 31.0%, to $14.1 million, and decreased $13.8 million, or 35.6%, to $24.8 million for the three and six months ended June 30, 2019, respectively, compared with the same periods in 2018, primarily due to less SREC revenue in 2019 as a result of the sale of solar assets to a third party buyer (see Note 1 to the condensed consolidated financial statements).
|
•
|
The change in revenues from appliance service operations at SJESP, net of intercompany transactions, was not significant.
|
•
|
Gross margin from the wholesale energy operations at SJRG increased $7.7 million to $0.2 million for the three months ended June 30, 2019 compared with the same period in 2018, The main driver for the overall increase 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 increase of $11.6 million. This was partially offset with lower margins on daily energy trading activities.
|
•
|
Gross margin from the wholesale energy operations at SJRG decreased $71.1 million to $0.4 million primarily due to lower margins on daily energy trading activities and an overall decrease in sales as noted under "Operating Revenues-Energy Group" above. Also contributing 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 $27.9 million for the six months ended June 30, 2019 compared with the same period in 2018.
|
•
|
The retail gas operations at SJE were sold November 30, 2018. As a result, the Company recorded no margin from this business during the three and six months ended June 30, 2019, as opposed to $4.0 million and $0.6 million for the same periods in the prior year.
|
•
|
Gross margin from SJE’s retail electric operations decreased $3.5 million to a loss of $1.5 million, and $4.7 million to a loss of $2.0 million, for the three and six months ended June 30, 2019, respectively, compared with the same periods in 2018, 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 .$2.8 million and $3.8 million for the three and six months ended June 30, 2019, respectively, compared with the same periods in 2018.
|
•
|
Gross margin from on-site energy production at Marina decreased $12.8 million to $12.3 million, and $21.3 million to $21.2 million for the three and six months ended June 30, 2019, respectively, compared with the same periods in 2018, primarily due to less SREC revenue in 2019 as a result of the sale of solar assets to a third party buyer (see Note 1 to the condensed consolidated financial statements).
|
•
|
The change in gross margin from appliance service operations at SJESP was not significant.
|
|
Three Months Ended June 30,
2019 vs. 2018 |
|
Six Months Ended June 30,
2019 vs. 2018 |
||||
SJI Utilities:
|
|
|
|
||||
SJG Utility Operations
|
$
|
(2,074
|
)
|
|
$
|
(2,347
|
)
|
ETG Utility Operations
|
17,865
|
|
|
35,839
|
|
||
ELK Utility Operations
|
500
|
|
|
1,024
|
|
||
Subtotal SJI Utilities
|
16,291
|
|
|
34,516
|
|
||
Nonutility:
|
|
|
|
||||
Energy Group:
|
|
|
|
||||
Wholesale Energy Operations
|
(320
|
)
|
|
(922
|
)
|
||
Retail Gas and Other Operations
|
(2,576
|
)
|
|
(4,989
|
)
|
||
Retail Electric Operations
|
191
|
|
|
566
|
|
||
Subtotal Energy Group
|
(2,705
|
)
|
|
(5,345
|
)
|
||
Energy Services:
|
|
|
|
||||
On-Site Energy Production
|
(6,276
|
)
|
|
(6,395
|
)
|
||
Appliance Service Operations
|
52
|
|
|
(28
|
)
|
||
Subtotal Energy Services
|
(6,224
|
)
|
|
(6,423
|
)
|
||
Total Nonutility
|
(8,929
|
)
|
|
(11,768
|
)
|
||
Midstream
|
10
|
|
|
71
|
|
||
Corporate & Services and Intercompany Eliminations
|
(8,771
|
)
|
|
(8,436
|
)
|
||
Total Operations Expense
|
$
|
(1,399
|
)
|
|
$
|
14,383
|
|
•
|
SJI received approximately $24.3 million during the first six months of 2019 from the sale of certain solar assets. See Note 1 to the condensed consolidated financial statements.
|
•
|
SJI received $15.6 million as an adjustment to the purchase price related to the Acquisition. See Note 17 to the condensed consolidated financial statements.
|
•
|
During the first six months of 2019 and 2018, SJI made net investments in unconsolidated affiliates of $3.9 million and $6.4 million, respectively.
|
Company
|
|
Total Facility
|
|
Usage
|
|
Available Liquidity
|
|
Expiration Date
|
||||||
SJI:
|
|
|
|
|
|
|
|
|
||||||
SJI Syndicated Revolving Credit Facility
|
|
$
|
500,000
|
|
|
$
|
396,600
|
|
(A)
|
$
|
103,400
|
|
|
August 2022
|
Revolving Credit Facility
|
|
50,000
|
|
|
50,000
|
|
|
—
|
|
|
September 2019 (D)
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total SJI
|
|
550,000
|
|
|
446,600
|
|
|
103,400
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
SJG:
|
|
|
|
|
|
|
|
|
||||||
Commercial Paper Program/Revolving Credit Facility
|
|
200,000
|
|
|
104,000
|
|
(B)
|
96,000
|
|
|
August 2022
|
|||
Uncommitted Bank Line
|
|
10,000
|
|
|
—
|
|
|
10,000
|
|
|
August 2019 (D)
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total SJG
|
|
210,000
|
|
|
104,000
|
|
|
106,000
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
ETG/ELK:
|
|
|
|
|
|
|
|
|
||||||
ETG/ELK Revolving Credit Facility
|
|
200,000
|
|
|
140,900
|
|
(C)
|
59,100
|
|
|
June 2021
|
|||
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
960,000
|
|
|
$
|
691,500
|
|
|
$
|
268,500
|
|
|
|
|
As of June 30, 2019
|
|
As of December 31, 2018
|
||
Equity
|
33.4
|
%
|
|
28.9
|
%
|
Long-Term Debt
|
51.3
|
%
|
|
64.9
|
%
|
Short-Term Debt
|
15.3
|
%
|
|
6.2
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
•
|
RC Cape May Holdings, LLC has communicated to SJG that it no longer intends to proceed with a project to re-power the former BL England facility with natural gas. The proposed project was approved by the BPU in 2015 and the New Jersey Pinelands Commission in 2017, and would have supplied natural gas to this facility as well as provided a secondary supply of natural gas to customers in Atlantic and Cape May counties. SJG remains committed to meeting the vitally important needs of residents and businesses in these counties and is exploring other alternatives.
|
•
|
$565.0 million decrease in long-term debt (excluding unamortized debt issuance costs), which decreased due to the net pay downs that occurred in 2019, as discussed under "Liquidity and Capital Resources" above (also see Note 14 to the condensed consolidated financial statements). Also resulting from these pay downs was an overall decrease in future interest payments.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Utility Throughput – dts:
|
|
|
|
|
|
|
|
||||
Firm Sales -
|
|
|
|
|
|
|
|
||||
Residential
|
2,530
|
|
|
3,322
|
|
|
15,508
|
|
|
16,052
|
|
Commercial
|
864
|
|
|
911
|
|
|
3,987
|
|
|
3,620
|
|
Industrial
|
64
|
|
|
521
|
|
|
259
|
|
|
736
|
|
Cogeneration & Electric Generation
|
56
|
|
|
(35
|
)
|
|
139
|
|
|
220
|
|
Firm Transportation -
|
|
|
|
|
|
|
|
||||
Residential
|
123
|
|
|
198
|
|
|
751
|
|
|
1,027
|
|
Commercial
|
966
|
|
|
1,172
|
|
|
3,673
|
|
|
4,313
|
|
Industrial
|
2,190
|
|
|
2,363
|
|
|
4,980
|
|
|
5,338
|
|
Cogeneration & Electric Generation
|
1,025
|
|
|
1,158
|
|
|
2,367
|
|
|
2,179
|
|
|
|
|
|
|
|
|
|
||||
Total Firm Throughput
|
7,818
|
|
|
9,610
|
|
|
31,664
|
|
|
33,485
|
|
|
|
|
|
|
|
|
|
||||
Interruptible Sales
|
—
|
|
|
1
|
|
|
6
|
|
|
10
|
|
Interruptible Transportation
|
227
|
|
|
233
|
|
|
547
|
|
|
534
|
|
Off-System Sales
|
2,478
|
|
|
1,130
|
|
|
7,541
|
|
|
7,877
|
|
Capacity Release
|
24,903
|
|
|
23,551
|
|
|
42,234
|
|
|
41,580
|
|
|
|
|
|
|
|
|
|
||||
Total Throughput - Utility
|
35,426
|
|
|
34,525
|
|
|
81,992
|
|
|
83,486
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net Income Impact:
|
|
|
|
|
|
|
|
||||||||
CIP – Weather Related
|
$
|
4.4
|
|
|
$
|
(0.6
|
)
|
|
$
|
5.0
|
|
|
$
|
0.3
|
|
CIP – Usage Related
|
(0.8
|
)
|
|
(1.1
|
)
|
|
(0.8
|
)
|
|
(3.3
|
)
|
||||
Total Net Income Impact
|
$
|
3.6
|
|
|
$
|
(1.7
|
)
|
|
$
|
4.2
|
|
|
$
|
(3.0
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weather Compared to 20-Year Average
|
133.3% Colder
|
|
193.7% Colder
|
|
271.9% Colder
|
|
178.5% Colder
|
||||||||
Weather Compared to Prior Year
|
74.0% Warmer
|
|
25.5% Colder
|
|
4.6% Warmer
|
|
14.6% Colder
|
|
Three Months Ended June 30,
2019 vs. 2018 |
|
Six Months Ended June 30,
2019 vs. 2018 |
|||
Operations
|
(2,074
|
)
|
|
$
|
(2,347
|
)
|
Maintenance
|
194
|
|
|
$
|
1,475
|
|
Depreciation
|
1,644
|
|
|
$
|
3,025
|
|
Energy and Other Taxes
|
656
|
|
|
$
|
1,390
|
|
|
As of June 30, 2019
|
|
As of December 31, 2018
|
||
Common Equity
|
51.7
|
%
|
|
50.2
|
%
|
Long-Term Debt
|
43.4
|
%
|
|
44.5
|
%
|
Short-Term Debt
|
4.9
|
%
|
|
5.3
|
%
|
|
|
|
|
||
Total
|
100.0
|
%
|
|
100.0
|
%
|
Assets
|
|
|
|
|
|
|
|
||||||||
Source of Fair Value
|
Maturity
< 1 Year
|
|
Maturity
1 -3 Years
|
|
Maturity
Beyond 3 Years
|
|
Total
|
||||||||
Prices actively quoted
|
$
|
6,900
|
|
|
$
|
34
|
|
|
$
|
1
|
|
|
$
|
6,935
|
|
Prices provided by other external sources
|
11,406
|
|
|
4,452
|
|
|
354
|
|
|
16,212
|
|
||||
Prices based on internal models or other valuation methods
|
16,682
|
|
|
6,847
|
|
|
195
|
|
|
23,724
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
34,988
|
|
|
$
|
11,333
|
|
|
$
|
550
|
|
|
$
|
46,871
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||
Source of Fair Value
|
Maturity
<1 Year
|
|
Maturity
1 -3 Years
|
|
Maturity
Beyond 3 Years
|
|
Total
|
||||||||
Prices actively quoted
|
$
|
17,878
|
|
|
$
|
2,340
|
|
|
$
|
27
|
|
|
$
|
20,245
|
|
Prices provided by other external sources
|
7,472
|
|
|
1,026
|
|
|
—
|
|
|
8,498
|
|
||||
Prices based on internal models or other valuation methods
|
9,879
|
|
|
3,721
|
|
|
164
|
|
|
13,764
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
35,229
|
|
|
$
|
7,087
|
|
|
$
|
191
|
|
|
$
|
42,507
|
|
•
|
NYMEX is the primary national commodities exchange on which natural gas is traded. Volumes of our NYMEX contracts included in the table above under "Prices actively quoted" are 59.0 MMdts with a weighted average settlement price of $2.77 per dt.
|
•
|
Basis represents the differential to the NYMEX natural gas futures contract for delivering gas to a specific location. Volumes of our basis contracts, along with volumes of our discounted index related purchase and sales contracts, included in the table above under "Prices provided by other external sources" and "Prices based on internal models or other valuation methods" are 18.8 MMdts with a weighted average settlement price of $(0.55) per dt.
|
•
|
Fixed Price Gas Daily represents the price of a NYMEX natural gas futures contract adjusted for the difference in price for delivering the gas at another location. Volumes of our Fixed Price Gas Daily contracts included in the table above under "Prices provided by other external sources" are 55.9 MMdts with a weighted average settlement price of $2.07 per dt.
|
•
|
Volumes of electric included in the table above under "Prices based on internal models or other valuation methods" are 0.2 MMmwh with a weighted average settlement price of $32.34 per mwh.
|
Net Derivatives — Energy Related Assets, January 1, 2019
|
$
|
29,800
|
|
Contracts Settled During the Six Months Ended June 30, 2019, Net
|
(21,830
|
)
|
|
Other Changes in Fair Value from Continuing and New Contracts, Net
|
(3,606
|
)
|
|
|
|
||
Net Derivatives — Energy Related Assets, June 30, 2019
|
$
|
4,364
|
|
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
|
|
Total
|
||||||
Prices actively quoted
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
45
|
|
Prices provided by other external sources
|
|
24
|
|
|
—
|
|
|
24
|
|
|||
Prices based on internal models or other valuable methods
|
|
1,760
|
|
|
—
|
|
|
1,760
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
1,829
|
|
|
$
|
—
|
|
|
$
|
1,829
|
|
Liabilities
|
|
|
|
|
|
|
||||||
|
|
Maturity
|
|
Maturity
|
|
|
||||||
Source of Fair Value
|
|
< 1 Year
|
|
1 - 3 Years
|
|
Total
|
||||||
Prices actively quoted
|
|
$
|
5,542
|
|
|
$
|
297
|
|
|
$
|
5,839
|
|
Prices provided by other external sources
|
|
402
|
|
|
—
|
|
|
402
|
|
|||
Prices based on internal models or other valuable methods
|
|
52
|
|
|
—
|
|
|
52
|
|
|||
|
|
|
|
|
|
|
||||||
Total
|
|
$
|
5,996
|
|
|
$
|
297
|
|
|
$
|
6,293
|
|
Net Derivatives — Energy Related Assets, January 1, 2019
|
$
|
3,290
|
|
Contracts Settled During the Six Months ended June 30, 2019, Net
|
(3,331
|
)
|
|
Other Changes in Fair Value from Continuing and New Contracts, Net
|
(4,423
|
)
|
|
Net Derivatives — Energy Related Liabilities, June 30, 2019
|
$
|
(4,464
|
)
|
Exhibit No.
|
|
Description
|
|
|
|
|
Certification of SJI's Principal Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act.
|
|
|
|
|
|
Certification of SJI's Principal Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act.
|
|
|
|
|
|
Certification of SJG's Principal Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act.
|
|
|
|
|
|
Certification of SJG's Principal Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act.
|
|
|
|
|
|
Certification of SJI's Principal Executive Officer Pursuant to Rule 13a-14(b) of the Exchange Act as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
|
|
|
|
|
|
Certification of SJI's Principal Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
|
|
|
|
|
|
Certification of SJG's Principal Executive Officer Pursuant to Rule 13a-14(b) of the Exchange Act as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
|
|
|
|
|
|
Certification of SJG's Principal Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
|
|
|
|
|
101
|
|
The following financial statements from South Jersey Industries, Inc.’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2019, filed with the Securities and Exchange Commission on August 8, 2019 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income; (ii) the Condensed Consolidated Statements of Comprehensive Income; (iii) the Condensed Consolidated Statements of Cash Flows; (iv) the Condensed Consolidated Balance Sheets; (v) the Condensed Consolidated Statements of Equity; and (vi) the Notes to Condensed Consolidated Financial Statements. The following financial statements from South Jersey Gas’ Quarterly Report on Form 10-Q for the three and six months ended June 30, 2019, filed with the Securities and Exchange Commission on August 8, 2019 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Condensed Statements of Income; (ii) the Condensed Statements of Comprehensive Income; (iii) the Condensed Statements of Cash Flows; (iv) the Condensed Balance Sheets; and (v) the Condensed Statements of Equity.
|
|
|
SOUTH JERSEY INDUSTRIES, INC.
|
|
|
|
|
|
Dated:
|
August 8, 2019
|
By:
|
/s/ Cielo Hernandez
|
|
|
|
Cielo Hernandez
|
|
|
|
Senior Vice President & Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
SOUTH JERSEY GAS COMPANY
|
|
|
|
|
|
Dated:
|
August 8, 2019
|
By:
|
/s/ Ann T. Anthony
|
|
|
|
Ann T. Anthony
|
|
|
|
Treasurer - SJG
|
|
|
|
(Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2019, 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 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; and
|
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 function):
|
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:
|
August 8, 2019
|
By:
|
/s/ Michael J. Renna
|
|
|
|
Michael J. Renna
|
|
|
|
Principal Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2019, 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 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; and
|
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 function):
|
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:
|
August 8, 2019
|
By:
|
/s/ Cielo Hernandez
|
|
|
|
Cielo Hernandez
|
|
|
|
Senior Vice President & Chief Financial Officer
|
|
|
South Jersey Gas Company
|
|
|
|
|
|
Date:
|
August 8, 2019
|
By:
|
/s/ David Robbins, Jr.
|
|
|
|
David Robbins, Jr.
|
|
|
|
President & Chief Operations Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
South Jersey Gas Company
|
|
|
|
|
|
Date:
|
August 8, 2019
|
By:
|
/s/ Ann T. Anthony
|
|
|
|
Ann T. Anthony
|
|
|
|
Principal Financial Officer
|
(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/ Michael J. Renna
|
|
Name: Michael J. Renna
|
|
Principal Executive Officer
|
|
August 8, 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
|
|
August 8, 2019
|
/s/ David Robbins, Jr.
|
|
Name: David Robbins, Jr.
|
|
Principal Executive Officer
|
|
August 8, 2019
|
/s/ Ann T. Anthony
|
|
Name: Ann T. Anthony
|
|
Principal Financial Officer
|
|
August 8, 2019
|