T
|
ANNUAL
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
|
New
Jersey
|
22-1901645
|
(State
of incorporation)
|
(IRS
employer identification no.)
|
Common
Stock
|
|
($1.25
par value per share)
|
New
York Stock Exchange
|
(Title
of each class)
|
(Name
of exchange on which registered)
|
Large
accelerated filer
T
|
Accelerated
filer
£
|
Non-accelerated
filer
£
(Do not
check if a smaller reporting company)
|
Smaller
reporting company
£
|
Page
No.
|
|||
4 | |||
5 | |||
PART
I
|
|||
Item
1.
|
5 | ||
Item
1A.
|
15 | ||
Item
1B.
|
18 | ||
Item
2.
|
18 | ||
Item
3.
|
20 | ||
Item
4.
|
20 | ||
Item
4A.
|
20 | ||
PART
II
|
|||
Item
5.
|
21 | ||
Item
6.
|
23 | ||
Item
7.
|
24 | ||
Item
7A.
|
64 | ||
Item
8.
|
65 | ||
Item
9.
|
123 | ||
Item
9A.
|
123 | ||
Item
9B.
|
126 | ||
PART
III
|
|||
Item
10.
|
126 | ||
Item
11.
|
127 | ||
Item
12.
|
127 | ||
Item
13.
|
127 | ||
Item
14.
|
127 | ||
PART
IV
|
|||
Item
15.
|
128 | ||
132 | |||
134 |
Units
of Meas
ure
ment
|
||
For
Natural Gas:
|
||
1
Mcf
|
=
One thousand cubic feet
|
|
1
MMcf
|
=
One million cubic feet
|
|
1
Bcf
|
=
One billion cubic feet
|
|
1dt
|
=
One decatherm
|
|
1
MMdts
|
=
One million decatherms
|
|
dts/d
|
=
Decatherms per day
|
|
MDWQ
|
=
Maximum daily withdrawal quantity
|
|
·
|
South
Jersey Gas Company (SJG) is a regulated natural gas utility. SJG
distributes natural gas in the seven southernmost counties of New
Jersey.
|
|
·
|
South
Jersey Resources Group, LLC (SJRG) markets wholesale natural gas storage,
commodity and transportation in the mid-Atlantic and southern
states.
|
|
·
|
Marina
Energy, LLC (Marina) develops and operates on-site energy-related
projects.
|
|
·
|
South
Jersey Energy Company (SJE) acquires and markets natural gas and
electricity to retail end users and provides total energy management
services to commercial and industrial
customers.
|
|
·
|
South
Jersey Energy Service Plus, LLC (SJESP) provides residential and light
commercial service and installation of HVAC systems, plumbing services and
appliance repair and service/maintenance
contracts.
|
|
•
|
SJI is a holding company and
its assets consist primarily of investments in subsidiaries.
Should
SJI’s subsidiaries be unable to pay dividends or make other payments to
SJI for financial, regulatory, legal or other reasons, SJI’s ability to
pay dividends on its common stock could be limited. SJI’s stock price
could be adversely affected as a
result.
|
|
•
|
SJI’s business activities are
concentrated in southern New Jersey.
Changes in the economies of
southern New Jersey and surrounding regions could negatively impact the
growth opportunities available to SJI and the financial condition of
customers and prospects of SJI.
|
|
•
|
Changes in the regulatory
environment or unfavorable rate regulation at its utility may have an
unfavorable impact on SJI’s financial performance or
condition.
SJI’s utility business is regulated by the
New Jersey Board of Public Utilities which has authority over many of the
activities of the business including, but not limited to, the rates it
charges to its customers, the amount and type of securities it can issue,
the nature of investments it can make, the nature and quality of services
it provides, safety standards and other matters. The extent to which the
actions of regulatory commissions restrict or delay SJG’s ability to earn
a reasonable rate of return on invested capital and/or fully recover
operating costs may adversely affect its results of operations, financial
condition and cash flows.
|
|
•
|
SJI may not be able to respond
effectively to competition, which may negatively impact SJI’s financial
performance or condition.
Regulatory initiatives may provide or
enhance opportunities for competitors that could reduce utility income
obtained from existing or prospective customers. Also, competitors in all
of SJI’s business lines may be able to provide superior or less costly
products or services based upon currently available or newly developed
technologies.
|
|
•
|
Warm weather, high commodity
costs, or customer conservation initiatives could result in reduced demand
for some of SJI’s energy products and services.
While SJI’s utility
currently has a conservation incentive program clause that protects its
revenues and gross margin against usage per customer that is lower than a
set level, the clause is currently approved as a pilot program through
2013. Should this clause expire without replacement, lower customer energy
utilization levels would likely reduce SJI’s net
income.
|
|
•
|
High natural gas prices could
cause more of SJI’s receivables to be uncollectible.
Higher levels
of uncollectibles from either residential or commercial customers would
negatively impact SJI’s income and could result in higher working capital
requirements.
|
|
•
|
SJI’s net income could decrease
if it is required to incur additional costs to comply with new
governmental safety, health or environmental legislation.
SJI is
subject to extensive and changing federal and state laws and regulations
that impact many aspects of its business; including the storage,
transportation and distribution of natural gas, as well as the remediation
of environmental contamination at former manufactured gas plant
facilities.
|
|
•
|
Proposed climate change
legislation could impact SJI’s financial performance and
condition.
Climate change is receiving ever increasing
attention from scientists and legislators alike. The debate is
ongoing as to the extent to which our climate is changing, the potential
causes of this change and its potential impacts. Some attribute
global warming to increased levels of greenhouse gases, which has led to
significant legislative and regulatory efforts to limit greenhouse gas
emissions. The outcome of proposed federal and state actions to address
global climate change could result in a variety of regulatory programs
including additional charges to fund energy efficiency activities or other
regulatory actions. These actions could affect the demand for
natural gas and electricity, result in increased costs to our business and
impact the prices we charge our customers. Because natural gas is a fossil
fuel with low carbon content, it is possible that future carbon
constraints could create additional demands for natural gas, both for
production of electricity and direct use in homes and
businesses. Any adoption by federal or state governments
mandating a substantial reduction in greenhouse gas emissions could have
far-reaching and significant impacts on the energy industry. We
cannot predict the potential impact of such laws or regulations on our
future consolidated financial condition, results of operations or cash
flows.
|
|
•
|
SJI’s wholesale commodity
marketing business is exposed to the risk that counterparties that owe
money or energy to SJI will not be able to meet their obligations for
operational or financial reasons.
SJI could be forced to buy or
sell commodity at a loss as a result of such failure. Such a failure, if
large enough, could also impact SJI’s
liquidity.
|
|
•
|
Increasing interest rates will
negatively impact the net income of SJI.
Several of SJI’s
subsidiaries are capital intensive, resulting in the incurrence of
significant amounts of debt financing. SJI has issued almost all of its
existing long-term debt at fixed rates or has utilized interest rate swaps
to mitigate changes in variable rates. However, new issues of
long-term debt and all variable rate short-term debt are exposed to the
impact of rising interest rates.
|
|
•
|
SJI has guaranteed certain
obligations of unconsolidated affiliates and is exposed to the risk that
these affiliates will not be able to meet performance and financial
commitments.
SJI’s unconsolidated affiliates develop and
operate on-site energy related projects. SJI has guaranteed
certain obligations of these affiliates in connection with the development
and operation of the facilities. In the event that these
projects do not meet specified levels of operating performance or are
unable to meet certain financial obligations as they become due, SJI could
be required to make payments related to these
obligations.
|
•
|
The inability to obtain
capital, particularly short-term capital from commercial banks, could
negatively impact the daily operations and financial performance of SJI.
SJI uses short-term borrowings under committed and uncommitted
credit facilities provided by commercial banks to supplement cash provided
by operations, to support working capital needs, and to finance capital
expenditures, as incurred.
If the customary
sources of short-term capital were no longer available due to market
conditions, SJI may not be able to meet its working capital and capital
expenditure requirements and borrowing costs could
increase.
|
|
•
|
A downgrade in SJG’s credit
rating could negatively affect its ability to access adequate and cost
effective capital.
SJG’s ability to obtain adequate and cost
effective capital depends largely on its credit ratings, which are greatly
influenced by financial condition and results of operations. If the rating
agencies downgrade SJG’s credit ratings, particularly below investment
grade, SJG’s borrowing costs would increase. In addition, SJG would likely
be required to pay higher interest rates in future financings and
potential funding sources would likely decrease. To the extent that a
decline in SJG’s credit rating has a negative effect on SJI, SJI could be
required to provide additional support to certain counterparties of the
wholesale gas operations.
|
|
•
|
Hedging activities of the
company designed to protect against commodity price or interest rate risk
may cause fluctuations in reported financial results and SJI’s stock price
could be adversely affected as a result.
Although SJI enters into
various contracts to hedge the value of energy assets, liabilities, firm
commitments or forecasted transactions, the timing of the recognition of
gains or losses on these economic hedges in accordance with accounting
principles generally accepted in the United States of America
does not always match up with the gains or losses on the items being
hedged. The difference in accounting can result in volatility in reported
results, even though the expected profit margin is essentially unchanged
from the dates the transactions were
consummated.
|
|
•
|
The inability to obtain natural
gas would negatively impact the financial performance of SJI.
Several of SJI’s subsidiaries have businesses based upon the ability to
deliver natural gas to customers. Disruption in the production of natural
gas or transportation of that gas to SJI from its suppliers, could prevent
SJI from completing sales to its
customers.
|
|
•
|
Transporting and storing
natural gas involves numerous risks that may result in accidents and other
operating risks and costs.
SJI’s gas distribution activities
involve a variety of inherent hazards and operating risks, such as leaks,
accidents, mechanical problems, natural disasters or terrorist activities
which could cause substantial financial losses. In addition, these risks
could result in loss of human life, significant damage to property,
environmental pollution and impairment of operations, which in turn could
lead to substantial losses. In accordance with customary industry
practice, SJI maintains insurance against some, but not all, of these
risks and losses. The occurrence of any of these events not fully covered
by insurance could adversely affect SJI’s financial position, results of
operations and cash flows.
|
|
•
|
Adverse results in legal
proceedings could be detrimental to the financial condition of SJI.
The outcomes of legal
proceedings can be
unpredictable and can result in adverse
judgments.
|
Name,
age and position with the Company
|
Period
Served
|
Edward J. Graham
, Age
52
|
|
Chairman
|
April
2005 - Present
|
Chief
Executive Officer
|
February
2004 - Present
|
President
|
January
2003 - Present
|
David A. Kindlick
, Age
55
|
|
Chief
Financial Officer
|
January
2002 - Present
|
Vice
President
|
June
1997 - Present
|
Jeffery E. DuBois
, Age
51
|
|
Vice
President
|
January
2004 - Present
|
Michael J. Renna
, Age
42
|
|
Vice
President
|
January
2004 - Present
|
Kevin D.
Patrick,
Age 49
|
|
Vice
President
|
June
2007 - Present
|
Albertsons/Super
Valu
|
|
Division
CFO – Eastern Region
|
September
2004 – June 2006
|
Sharon M. Pennington,
Age 47
|
|
Vice
President
|
January
2008 - Present
|
Vice
President (SJI Services LLC)
|
January
2006 – December 2007
|
Assistant
Vice President (SJG)
|
April
2004 – December 2005
|
Gina M. Merritt-Epps
,
Age 42
|
|
Corporate
Counsel and Secretary
|
May
2009 - Present
|
Assistant
General Counsel and Assistant Secretary
|
December
2007 - April 2009
|
Director,
Legal Affairs (SJI Services LLC)
|
June
2006 – November 2007
|
Atlantic
County Department of Law
|
|
Assistant
County Counsel
|
October
2002 – May 2006
|
Market
Price of Common Stock and Related Information
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Quarter
Ended
|
Market
Price Per Share
|
|
Dividends
|
|
Quarter
Ended
|
Market
Price Per Share
|
|
Dividends
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
Declared
|
|
|
|
|
|
|
|
|
|
Declared
|
|
||||||
2009
|
|
High
|
|
|
Low
|
|
|
Per
Share
|
|
2008
|
|
High
|
|
|
Low
|
|
|
Per
Share
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
March 31
|
|
$
|
40.78
|
|
|
$
|
31.98
|
|
|
$
|
0.2975
|
|
March
31
|
|
$
|
38.41
|
|
|
$
|
31.90
|
|
|
$
|
0.2700
|
|
June 30
|
|
$
|
36.20
|
|
|
$
|
33.04
|
|
|
$
|
0.2975
|
|
June
30
|
|
$
|
39.36
|
|
|
$
|
35.31
|
|
|
$
|
0.2700
|
|
September 30
|
|
$
|
37.53
|
|
|
$
|
33.12
|
|
|
$
|
0.2975
|
|
September
30
|
|
$
|
38.99
|
|
|
$
|
33.10
|
|
|
$
|
0.2700
|
|
December 31
|
|
$
|
40.24
|
|
|
$
|
34.07
|
|
|
$
|
0.3300
|
|
December
31
|
|
$
|
40.58
|
|
|
$
|
25.19
|
|
|
$
|
0.2975
|
|
|
·
|
$100
invested on December 31, 2004 in South Jersey Industries, Inc. common
stock, in the S&P 500 Stock Index and in the S&P Utility Index;
and
|
|
·
|
All
dividends are reinvested.
|
Period
|
Total
Number of Shares Purchased
1
|
Average
Price Paid Per Share
1
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
2
|
Maximum
Number of Shares that May Yet be Purchased Under the Plans or
Programs
2
|
|
|||||||||||
October
2009
|
|
|
29,153
|
|
|
$
|
35.3972
|
|
|
|
-
|
|
|
|
-
|
|
November
2009
|
|
|
4,740
|
|
|
$
|
35.6414
|
|
|
|
-
|
|
|
|
-
|
|
December
2009
|
|
|
23,695
|
|
|
$
|
39.9126
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
57,588
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
(1)
|
Represents
discontinued business segments: sand mining and distribution operations
sold in 1996 and fuel oil operations with related environmental
liabilities in 1986 (See Note 2 to Consolidated Financial
Statements).
|
(2)
|
Calculated
as Operating Income divided by Interest
Charges.
|
(3)
|
Calculated
based on Income from Continuing
Operations.
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
||||
Net
Income Benefit:
|
|
|
|
|
|
|
|
|
|
|||
CIP
– Weather Related
|
|
$
|
0.8
|
|
|
$
|
1.6
|
|
|
$
|
1.6
|
|
CIP
– Usage Related
|
|
|
8.5
|
|
|
|
9.2
|
|
|
|
5.9
|
|
Total
Net Income Benefit
|
|
$
|
9.3
|
|
|
$
|
10.8
|
|
|
$
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weather
Compared to 20-Year Average
|
|
1.1%
warmer
|
|
|
4.7%
warmer
|
|
|
3.2%
warmer
|
|
|||
Weather
Compared to Prior Year
|
|
3.9%
colder
|
|
|
1.6%
warmer
|
|
|
13.8%
colder
|
|
|
·
|
a
58.6% decrease in income contribution from SJRG and SJE related to the
change in unrealized gains and losses on derivatives used to mitigate
price risk on natural gas and electric as discussed above, and under
Operating Revenues – Nonutility below,
respectively.
|
|
·
|
a
52.4% increase in gross margin generated by SJRG related to the increase
in storage and market area transportation assets under
contract.
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
||||||||||||||||
Utility Throughput – dth:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Firm
Sales -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential
|
|
|
22,736
|
|
|
|
23
|
%
|
|
|
21,530
|
|
|
|
15
|
%
|
|
|
22,523
|
|
|
|
16
|
%
|
Commercial
|
|
|
6,063
|
|
|
|
6
|
%
|
|
|
6,127
|
|
|
|
4
|
%
|
|
|
6,339
|
|
|
|
4
|
%
|
Industrial
|
|
|
331
|
|
|
|
1
|
%
|
|
|
188
|
|
|
|
-
|
|
|
|
193
|
|
|
|
-
|
|
Cogeneration
and electric generation
|
|
|
322
|
|
|
|
-
|
|
|
561
|
|
|
|
-
|
|
|
1,335
|
|
|
|
1
|
%
|
||
Firm
Transportation -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Residential
|
|
|
2,005
|
|
|
|
2
|
%
|
|
|
1,988
|
|
|
|
1
|
%
|
|
|
1,870
|
|
|
|
1
|
%
|
Commercial
|
|
|
5,930
|
|
|
|
6
|
%
|
|
|
5,687
|
|
|
|
4
|
%
|
|
|
5,927
|
|
|
|
4
|
%
|
Industrial
|
|
|
12,002
|
|
|
|
12
|
%
|
|
|
12,661
|
|
|
|
9
|
%
|
|
|
12,107
|
|
|
|
9
|
%
|
Cogeneration
and electric generation
|
|
|
2,290
|
|
|
|
2
|
%
|
|
|
2,536
|
|
|
|
2
|
%
|
|
|
3,088
|
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total
Firm Throughput
|
|
|
51,679
|
|
|
|
52
|
%
|
|
|
51,278
|
|
|
|
35
|
%
|
|
|
53,382
|
|
|
|
37
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interruptible
Sales
|
|
|
5
|
|
|
|
-
|
|
|
|
35
|
|
|
|
-
|
|
|
|
68
|
|
|
|
-
|
|
Interruptible
Transportation
|
|
|
2,314
|
|
|
|
2
|
%
|
|
|
2,716
|
|
|
|
2
|
%
|
|
|
3,002
|
|
|
|
2
|
%
|
Off-System
|
|
|
6,282
|
|
|
|
7
|
%
|
|
|
9,632
|
|
|
|
7
|
%
|
|
|
17,686
|
|
|
|
13
|
%
|
Capacity
Release
|
|
|
38,387
|
|
|
|
39
|
%
|
|
|
80,665
|
|
|
|
56
|
%
|
|
|
67,430
|
|
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total
Throughput - Utility
|
|
|
98,667
|
|
|
|
100
|
%
|
|
|
144,326
|
|
|
|
100
|
%
|
|
|
141,568
|
|
|
|
100
|
%
|
Utility Operating Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Firm
Sales-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Residential
|
|
$
|
318,143
|
|
|
|
66
|
%
|
|
$
|
320,401
|
|
|
|
57
|
%
|
|
$
|
342,809
|
|
|
|
54
|
%
|
Commercial
|
|
|
71,669
|
|
|
|
15
|
%
|
|
|
81,914
|
|
|
|
15
|
%
|
|
|
80,237
|
|
|
|
13
|
%
|
Industrial
|
|
|
3,824
|
|
|
|
1
|
%
|
|
|
5,434
|
|
|
|
1
|
%
|
|
|
8,381
|
|
|
|
1
|
%
|
Cogeneration
and electric generation
|
|
|
2,709
|
|
|
|
1
|
%
|
|
|
7,940
|
|
|
|
1
|
%
|
|
|
11,722
|
|
|
|
2
|
%
|
Firm
Transportation -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Residential
|
|
|
10,491
|
|
|
|
2
|
%
|
|
|
10,408
|
|
|
|
2
|
%
|
|
|
8,982
|
|
|
|
1
|
%
|
Commercial
|
|
|
19,722
|
|
|
|
4
|
%
|
|
|
18,286
|
|
|
|
3
|
%
|
|
|
17,299
|
|
|
|
3
|
%
|
Industrial
|
|
|
14,751
|
|
|
|
3
|
%
|
|
|
12,504
|
|
|
|
2
|
%
|
|
|
12,229
|
|
|
|
2
|
%
|
Cogeneration
and electric generation
|
|
|
2,272
|
|
|
|
-
|
|
|
|
1,682
|
|
|
|
-
|
|
|
|
1,847
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total
Firm Revenues
|
|
|
443,581
|
|
|
|
92
|
%
|
|
|
458,569
|
|
|
|
81
|
%
|
|
|
483,506
|
|
|
|
76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interruptible
Sales
|
|
|
89
|
|
|
|
-
|
|
|
|
403
|
|
|
|
-
|
|
|
|
785
|
|
|
|
-
|
|
Interruptible
Transportation
|
|
|
2,122
|
|
|
|
-
|
|
|
|
1,786
|
|
|
|
-
|
|
|
|
1,970
|
|
|
|
-
|
|
Off-System
|
|
|
32,978
|
|
|
|
7
|
%
|
|
|
90,430
|
|
|
|
16
|
%
|
|
|
131,586
|
|
|
|
22
|
%
|
Capacity
Release
|
|
|
4,282
|
|
|
|
1
|
%
|
|
|
15,549
|
|
|
|
3
|
%
|
|
|
11,208
|
|
|
|
2
|
%
|
Other
|
|
|
1,324
|
|
|
|
-
|
|
|
|
1,309
|
|
|
|
-
|
|
|
|
1,492
|
|
|
|
-
|
|
|
|
484,376
|
|
|
|
100
|
%
|
|
|
568,046
|
|
|
|
100
|
%
|
|
|
630,547
|
|
|
|
100
|
%
|
|
Less:
|
||||||||||||||||||||||||
Intercompany
Sales
|
|
|
4,112
|
|
|
|
|
|
|
|
7,855
|
|
|
|
|
|
|
|
19,540
|
|
|
|
|
|
Total
Utility Operating Revenues
|
|
|
480,264
|
|
|
|
|
|
|
|
560,191
|
|
|
|
|
|
|
|
611,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of sales
|
|
|
289,740
|
|
|
|
|
|
|
|
375,549
|
|
|
|
|
|
|
|
433,495
|
|
|
|
|
|
Conservation
recoveries *
|
|
|
7,718
|
|
|
|
|
|
|
|
7,741
|
|
|
|
|
|
|
|
4,458
|
|
|
|
|
|
RAC
recoveries *
|
|
|
5,189
|
|
|
|
|
|
|
|
3,079
|
|
|
|
|
|
|
|
2,056
|
|
|
|
|
|
EET
recoveries*
|
190
|
-
|
-
|
|||||||||||||||||||||
Revenue
taxes
|
|
|
8,836
|
|
|
|
|
|
|
|
8,655
|
|
|
|
|
|
|
|
8,850
|
|
|
|
|
|
Utility
Margin
|
|
$
|
168,591
|
|
|
|
|
|
|
$
|
165,167
|
|
|
|
|
|
|
$
|
162,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
|
$
|
104,373
|
|
|
|
62
|
%
|
|
$
|
99,862
|
|
|
|
61
|
%
|
|
$
|
102,077
|
|
|
|
63
|
%
|
Commercial
and industrial
|
|
|
39,853
|
|
|
|
24
|
%
|
|
|
38,995
|
|
|
|
24
|
%
|
|
|
40,036
|
|
|
|
25
|
%
|
Cogeneration
and electric generation
|
|
|
2,251
|
|
|
|
1
|
%
|
|
|
1,997
|
|
|
|
1
|
%
|
|
|
2,212
|
|
|
|
1
|
%
|
Interruptible
|
|
|
144
|
|
|
|
-
|
|
|
|
143
|
|
|
|
-
|
|
|
|
195
|
|
|
|
-
|
|
Off-system
& capacity release
|
|
|
1,416
|
|
|
|
1
|
%
|
|
|
3,349
|
|
|
|
2
|
%
|
|
|
2,994
|
|
|
|
2
|
%
|
Other
revenues
|
|
|
2,511
|
|
|
|
1
|
%
|
|
|
2,440
|
|
|
|
1
|
%
|
|
|
1,952
|
|
|
|
1
|
%
|
Margin
before weather normalization & decoupling
|
|
|
150,548
|
|
|
|
89
|
%
|
|
|
146,786
|
|
|
|
89
|
%
|
|
|
149,466
|
|
|
|
92
|
%
|
CIRT
mechanism
|
|
|
2,198
|
|
|
|
1
|
%
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
||
CIP
mechanism
|
|
|
15,809
|
|
|
|
10
|
%
|
|
|
18,381
|
|
|
|
11
|
%
|
|
|
12,682
|
|
|
|
8
|
%
|
EET
mechanism
|
36
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Utility
Margin
|
|
$
|
168,591
|
|
|
|
100
|
%
|
|
$
|
165,167
|
|
|
|
100
|
%
|
|
$
|
162,148
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Number of Customers at Year
End:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Residential
|
|
|
320,290
|
|
|
|
93
|
%
|
|
|
317,026
|
|
|
|
93
|
%
|
|
|
312,969
|
|
|
|
93
|
%
|
Commercial
|
|
|
22,802
|
|
|
|
7
|
%
|
|
|
22,636
|
|
|
|
7
|
%
|
|
|
22,220
|
|
|
|
7
|
%
|
Industrial
|
|
|
474
|
|
|
|
-
|
|
|
|
474
|
|
|
|
-
|
|
|
|
474
|
|
|
|
-
|
|
Total
Customers
|
|
|
343,566
|
|
|
|
100
|
%
|
|
|
340,136
|
|
|
|
100
|
%
|
|
|
335,663
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Annual
Degree Days:
|
|
|
4,588
|
|
|
|
|
|
|
4,417
|
|
|
|
|
|
|
|
4,488
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Change
|
|
||||
|
|
|
|
|
|
|
|
|
||||
SJRG
Revenue
|
|
$
|
97.1
|
|
|
$
|
115.1
|
|
|
$
|
(18.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
Unrealized Losses (Subtract: Unrealized Gains)
|
|
|
4.1
|
|
|
(8.9
|
)
|
|
|
13.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SJRG
Revenue, Excluding Unrealized Losses (Gains)
|
|
$
|
101.2
|
|
|
$
|
106.2
|
|
|
$
|
(5.0)
|
|
|
|
2008
|
|
|
2007
|
|
|
Change
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
SJRG
Revenue
|
|
$
|
115.1
|
|
|
$
|
75.2
|
|
|
$
|
39.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
Unrealized gains
|
|
|
(8.9
|
)
|
|
|
(3.8
|
)
|
|
|
(5.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SJRG
Revenue, Excluding unrealized gains
|
|
$
|
106.2
|
|
|
$
|
71.4
|
|
|
$
|
34.8
|
|
|
·
|
Gross
margin for SJRG decreased $20.5 million in 2009 compared with 2008.
Excluding the impact of the net change in unrealized gains and losses
recorded on forward financial contracts as discussed above, gross margin
for SJRG decreased $8.3 million due mainly to the timing of realized hedge
gains and losses related to our storage assets. Storage assets allow SJRG
to lock in the differential between purchasing natural gas at low current
prices and selling equivalent quantities at higher future prices. Gross
margin is generated via seasonal pricing differentials. While this margin
will be attained over the transaction cycle, the timing of physical
injections and withdraws and related hedge settlements can cause earnings
fluctuations for accounting purposes due to the volatile nature of
wholesale gas prices. During the injection season of 2008, NYMEX prices
increased significantly. Typical to our business cycle, we entered into
financial hedges designed to protect our ultimate injection prices at a
time when NYMEX prices were relatively low. These contracts settled in the
injection months when the NYMEX had risen considerably and thus produced
significant realized hedge gains which were recorded into earnings. During
this period we purchased more expensive physical gas that was injected
into storage. During the injection season of 2009, just the opposite
occurred as NYMEX prices fell considerably and our hedge contracts were
settled at significant losses which were recorded into earnings. However,
during this period we were able to purchase physical injection gas at
relatively low prices.
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|||
Storage
(Bcf)
|
|
|
12.2
|
|
|
|
12.2
|
|
|
|
10.0
|
|
Transportation
(dts/day)
|
|
|
153,000
|
|
|
|
124,375
|
|
|
|
69,429
|
|
|
·
|
Gross
Margin for Marina decreased $3.8 million in 2009 compared with 2008. Gross
margin as a percentage of Operating Revenues increased 3.9 percentage
points due mainly to a decrease in low-margin electric sales to Borgata.
As per our contract, the billing rates are designed to recover the
underlying commodity costs over time. However during interim periods,
certain components of the underlying commodity costs are not adjusted
proportionately.
|
|
·
|
Gross
margin from SJE’s retail gas sales decreased $2.8 million in 2009,
compared with 2008. Excluding the impact of a $0.6 million change in
unrealized gains/losses recorded on forward financial contracts, gross
margin decreased $2.2 million in 2009 compared with 2008 due mainly to
lower customer counts (See Operating Revenues – Nonutility) and tighter
margins due to increased competition. Also, during the first quarter of
2008, SJE partially recovered losses from a full requirements customer in
the commercial market that were recognized in 2006. Gross margin as a
percentage of Operating Revenues did not change significantly
in 2009 compared with
2008.
|
|
·
|
Gross
margin from SJE’s retail electricity sales decreased $8.9 million in 2009
compared with 2008. Excluding the impact of a $10.5 million increase in
unrealized losses recorded on forward financial contracts, gross margin
increased $1.6 million in 2009 compared with 2008. This increase was
mainly due to the impact of the school bid as mentioned in Operating
Revenues - Nonutility. Excluding the impact of the unrealized losses,
gross margin as a percentage of Operating Revenues decreased 2.1
percentage points in 2009 compared with 2008. Margins as a percentage of
Operating Revenues declined due to three main factors. First, we recovered
some previously expensed costs in 2008. Second, several of our larger
higher margin customers consumed significantly fewer volumes in 2009.
Third, charges for transmission and marginal losses were substantially
higher in 2009.
|
|
·
|
Gross
margin for SJESP decreased $0.1 million in 2009 compared with
2008. Gross margin as a percentage of Operating Revenues did
not change significantly between
years.
|
|
·
|
Gross
Margin for SJRG increased $19.2 million in 2008, compared with 2007.
Excluding the impact of the net change in unrealized gains and losses
recorded on forward financial contracts as discussed above, gross margin
for SJRG increased $14.1 million in 2008 compared with 2007.
Operationally, margins increased significantly in 2008 due primarily to
favorable time spreads on storage and transportation asset positions that
were locked in and/or improved upon. Storage assets allow SJRG to lock in
the differential between purchasing natural gas at low current prices and
selling equivalent quantities at higher future prices. Gross margin is
generated via seasonal pricing differentials. Similar to storage,
transportation assets allow us to lock in the differential of transporting
natural gas from one delivery point to another. Overall, SJRG’s
contribution to margin has continued to increase as we have expanded our
portfolio of storage and market area transportation assets under contract.
Storage and transportation assets under contract as of December 31 is as
follows:
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|||
Storage
(Bcf)
|
|
|
12.2
|
|
|
|
10.0
|
|
|
|
9.6
|
|
Transportation
(dts/day)
|
|
|
124,375
|
|
|
|
69,429
|
|
|
|
34,311
|
|
|
·
|
Gross
Margin for Marina increased $3.6 million in 2008 compared with 2007 due
mainly to the increase in sales volumes from the thermal plant discussed
in Operating Revenues – Nonutility. Gross margin as a percentage of
Operating Revenues did not change significantly in 2008 compared with
2007.
|
|
·
|
Gross
margin from SJE’s retail gas sales increased $2.2 million in 2008,
compared with 2007. Excluding the impact of a $0.6 million increase in
unrealized gains recorded on forward financial contracts, gross margin
increased $1.6 million in 2008 compared with 2007. Gross margin as a
percentage of Operating Revenues increased 1.3 percentage points in 2008
compared with 2007. Excluding the impact of unrealized gains, this
increase is due mainly to two main factors. First, SJE partially recovered
losses from a full requirements customer in the commercial market that
were recognized in 2006. Second, the 2008 margin reflects the impact of
our initiatives to actively capitalize on market volatility which resulted
in securing more attractive spreads, particularly in the first and fourth
quarters.
|
|
·
|
Gross
margin from SJE’s retail electricity sales were relatively flat in 2008
compared with 2007. Gross margin as a percentage of Operating Revenues
decreased 0.9 percentage points in 2008 compared with 2007 due mainly to
increased competition.
|
|
·
|
Gross
Margin for SJESP increased $0.4 million in 2008, compared with
2007. Gross margin as a percentage of Operating Revenues
decreased 2.1 percentage points in 2008 compared with 2007 due mainly to
increased competition and higher payroll-related, insurance and fleet
costs.
|
|
2009
vs. 2008
|
|
|
2008
vs. 2007
|
|
|||
Utility
|
|
$
|
6,422
|
|
|
$
|
4,375
|
|
Nonutility:
|
|
|
|
|
|
|
|
|
Wholesale
Gas
|
|
|
865
|
|
|
|
1,384
|
|
Retail
Gas and Other
|
|
|
(366
|
)
|
|
|
115
|
|
Retail
Electricity
|
|
|
584
|
|
|
(73
|
)
|
|
On-Site
Energy Production
|
|
|
1,311
|
|
|
|
1,443
|
|
Appliance
Service
|
|
|
586
|
|
|
|
(643
|
)
|
Total
Nonutility
|
|
|
2,980
|
|
|
|
2,226
|
|
Intercompany
Eliminations and Other
|
|
|
(105
|
)
|
|
|
(409
|
)
|
Total
Operations
|
|
$
|
9,297
|
|
|
$
|
6,192
|
|
|
|
2009
vs. 2008
|
|
|
2008
vs. 2007
|
|
||
Maintenance
|
|
$
|
970
|
|
$
|
1,554
|
|
|
Depreciation
|
|
|
2,043
|
|
|
1,295
|
|
|
Energy
and Other Taxes
|
|
|
(390
|
)
|
|
|
(62
|
)
|
Company
|
|
Total
Facility
|
|
|
Usage
(A)
|
|
|
Available
Liquidity
|
|
Expiration
Date
|
|||
|
|
|
|
|
|
|
|
|
|
||||
SJG:
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving
Credit Facility
|
|
$
|
100,000
|
|
|
$
|
85,000
|
|
|
$
|
15,000
|
|
August
2011
|
Line
of Credit
|
|
|
40,000
|
|
|
|
10,000
|
|
|
|
30,000
|
|
December
2010
|
Uncommitted
Bank Lines
|
|
|
55,000
|
|
|
|
14,400
|
|
|
|
40,600
|
|
Various
|
|
|
|
|
|
|
|
|
|
|
||||
Total
SJG
|
|
|
195,000
|
|
|
|
109,400
|
|
|
|
85,600
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
SJI:
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||
Revolving
Credit Facility
|
|
$
|
200,000
|
|
|
$
|
162,000
|
|
|
$
|
38,000
|
|
August
2011
|
Uncommitted
Bank Lines
|
|
|
30,000
|
|
|
|
9,300
|
|
|
|
20,700
|
|
Various
|
|
|
|
|
|
|
|
|
|
|
||||
Total
SJI
|
|
|
230,000
|
|
|
|
171,300
|
|
|
|
58,700
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total
|
|
$
|
425,000
|
|
|
$
|
280,700
|
|
|
$
|
144,300
|
|
|
|
(A)
|
Includes
letters of credit in the amount of $82.0 million under the SJI revolving
credit facility and $2.1 million under the SJI uncommitted bank
lines.
|
|
As
of December 31,
|
|
||||||
|
2009
|
|
|
2008
|
|
|||
|
|
|
|
|
|
|||
Equity
|
|
|
50.0
|
%
|
|
|
47.4
|
%
|
Long-Term
Debt
|
|
|
32.0
|
|
|
|
33.0
|
|
Short-Term
Debt
|
|
|
18.0
|
|
|
|
19.6
|
|
Total
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
Up
to
|
|
|
Years
|
|
|
Years
|
|
|
More
than
|
|
||||||
Contractual Cash
Obligations
|
|
Total
|
|
|
1
Year
|
|
|
2
& 3
|
|
|
4
& 5
|
|
|
5
Years
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Long-Term
Debt
|
|
$
|
347,912
|
|
|
$
|
35,119
|
|
|
$
|
27,447
|
|
|
$
|
50,662
|
|
|
$
|
234,684
|
|
Interest
on Long-Term Debt
|
|
|
233,266
|
|
|
|
19,354
|
|
|
|
35,713
|
|
|
|
32,199
|
|
|
|
146,000
|
|
Capital
Contribution/Advances to Affiliates Obligation
|
|
|
42,400
|
|
|
|
42,400
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Operating
Leases
|
|
|
1,669
|
|
|
|
612
|
|
|
|
738
|
|
|
|
289
|
|
|
|
30
|
|
Commodity
Supply Purchase Obligations
|
|
|
557,847
|
|
|
|
337,910
|
|
|
|
111,768
|
|
|
|
26,888
|
|
|
|
81,281
|
|
New
Jersey Clean Energy Program (Note 9)
|
|
|
33,117
|
|
|
|
9,205
|
|
|
|
23,912
|
|
|
|
-
|
|
|
|
-
|
|
Other
Purchase Obligations
|
|
|
1,538
|
|
|
|
1,392
|
|
|
|
146
|
|
|
|
-
|
|
|
|
-
|
|
Total
Contractual Cash Obligations
|
|
$
|
1,217,749
|
|
|
$
|
445,992
|
|
|
$
|
199,724
|
|
|
$
|
110,038
|
|
|
$
|
461,995
|
|
·
|
In
April 2007, SJI guaranteed certain obligations of LVE Energy Partners, LLC
(LVE), an unconsolidated joint venture in which Marina has a 50% equity
interest. LVE entered into a 25-year contract with a resort
developer to design, build, own and operate a district energy system and
central energy center for a planned resort in Las Vegas,
Nevada. LVE began construction of the facility in 2007 and
expected to provide full energy services in 2010 when the resort was
originally scheduled to be completed. LVE suspended construction of the
district energy system and central energy center in January 2009 after the
resort developer’s August 2008 announcement that it was delaying the
completion of construction of the resort due to the difficult environment
in the capital markets and weak economic conditions. The resort
developer had indicated that it was considering different strategies to
move its project forward, including opening its project in phases and
obtaining a partner, but that it was unlikely construction would resume
during 2009. In October 2009, the resort developer announced that they do
not expect to resume construction on the project for three to five years.
They stated that they remain committed to having a significant presence on
the Las Vegas Strip as part of a long-term growth strategy and continue to
view this site as a major strategic
asset.
|
·
|
In
August 2007, SJI guaranteed certain obligations of BC Landfill Energy, LLC
(BCLE), an unconsolidated joint venture in which Marina has a 50% equity
interest. BCLE has entered into a 20-year agreement with a county
government to lease and operate a facility that will produce electricity
from landfill methane gas. The facility went online in the fourth quarter
of 2007. Although unlikely, the maximum amount that SJI could be obligated
for, in the event that BCLE does not meet minimum specified levels of
operating performance and no mitigating action is taken, or is unable to
meet certain financial obligations as they become due, is approximately
$4.0 million each year. SJI and its partner in this joint
venture have entered into reimbursement agreements that secure
reimbursement for SJI of a proportionate share of any payments made by SJI
on these guarantees. SJI holds a variable interest in BCLE but
is not the primary beneficiary.
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Source of Fair Value
|
|
Maturity
< 1 Year
|
|
|
Maturity
1 - 3 Years
|
|
|
Maturity
Beyond 3 Years
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Prices
actively quoted
|
|
$
|
18,780
|
|
|
$
|
5,104
|
|
|
$
|
48
|
|
|
$
|
23,932
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Prices
provided by other external sources
|
|
|
16,877
|
|
|
|
6,379
|
|
|
|
39
|
|
|
|
23,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Prices
based on internal models or other valuation methods
|
|
|
855
|
|
|
|
15
|
|
|
|
-
|
|
|
|
870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
|
$
|
36,512
|
|
|
$
|
11,498
|
|
|
$
|
87
|
|
|
$
|
48,097
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Source of Fair Value
|
|
Maturity
< 1 Year
|
|
|
Maturity
1 - 3 Years
|
|
|
Maturity
Beyond 3 Years
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Prices
actively quoted
|
|
$
|
13,828
|
|
|
$
|
4,554
|
|
|
$
|
-
|
|
|
$
|
18,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Prices
provided by other external sources
|
|
|
5,668
|
|
|
|
3,973
|
|
|
|
-
|
|
|
|
9,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Prices
based on internal models or other valuation methods
|
|
|
8,764
|
|
|
|
2,283
|
|
|
|
121
|
|
|
|
11,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
|
$
|
28,260
|
|
|
$
|
10,810
|
|
|
$
|
121
|
|
|
$
|
39,191
|
|
Net
Derivatives — Energy Related Assets, January 1,
2009
|
|
$
|
16,289
|
|
Contracts
Settled During 2009, Net
|
|
|
(12,307
|
)
|
Other
Changes in Fair Value from Continuing and New Contracts,
Net
|
|
|
4,924
|
|
|
|
|
|
|
Net
Derivatives — Energy Related Assets, December 31,
2009
|
|
$
|
8,906
|
|
Amount
|
|
|
Fixed
Interest Rate
|
|
Start
Date
|
Maturity
|
Type
|
Obligor
|
|||||
$
|
3,900,000
|
|
|
|
4.795%
|
|
12/01/2004
|
12/01/2014
|
Taxable
|
Marina
|
|||
$
|
8,000,000
|
|
|
|
4.775%
|
|
11/12/2004
|
11/12/2014
|
Taxable
|
Marina
|
|||
$
|
20,000,000
|
|
|
|
4.080%
|
|
11/19/2001
|
12/01/2011
|
Tax-exempt
|
Marina
|
|||
$
|
14,500,000
|
|
|
|
3.905%
|
|
03/17/2006
|
01/15/2026
|
Tax-exempt
|
Marina
|
|||
$
|
500,000
|
|
|
|
3.905%
|
|
03/17/2006
|
01/15/2026
|
Tax-exempt
|
Marina
|
|||
$
|
330,000
|
|
|
|
3.905%
|
|
03/17/2006
|
01/15/2026
|
Tax-exempt
|
Marina
|
|||
$
|
7,100,000
|
|
|
|
4.895%
|
|
02/01/2006
|
02/01/2016
|
Taxable
|
Marina
|
|||
$
|
12,500,000
|
|
|
|
3.430%
|
|
12/01/2006
|
02/01/2036
|
Tax-exempt
|
SJG
|
|||
$
|
12,500,000
|
|
|
|
3.430%
|
|
12/01/2006
|
02/01/2036
|
Tax-exempt
|
SJG
|
Statements of Consolidated
Income
|
South
Jersey Industries, Inc. and Subsidiaries
|
|||||||||||
(In
Thousands Except for Per Share Data)
|
Year
Ended December 31,
|
|||||||||||
|
2009
|
2008
|
2007
|
|||||||||
Operating
Revenues:
|
||||||||||||
Utility
|
$ | 480,264 | $ | 560,191 | $ | 611,007 | ||||||
Nonutility
|
365,180 | 401,786 | 345,364 | |||||||||
Total
Operating Revenues
|
845,444 | 961,977 | 956,371 | |||||||||
Operating
Expenses:
|
||||||||||||
Cost
of Sales - (Excluding depreciation)
|
||||||||||||
-
Utility
|
289,740 | 375,549 | 433,495 | |||||||||
-
Nonutility
|
303,648 | 303,893 | 273,206 | |||||||||
Operations
|
89,066 | 79,769 | 73,577 | |||||||||
Maintenance
|
8,869 | 7,899 | 6,345 | |||||||||
Depreciation
|
31,280 | 29,237 | 27,942 | |||||||||
Energy
and Other Taxes
|
11,731 | 12,121 | 12,183 | |||||||||
Total
Operating Expenses
|
734,334 | 808,468 | 826,748 | |||||||||
Operating
Income
|
111,110 | 153,509 | 129,623 | |||||||||
Other
Income and Expense
|
1,411 | 890 | 2,401 | |||||||||
Interest
Charges
|
(18,992 | ) | (25,676 | ) | (27,215 | ) | ||||||
Income
Before Income Taxes
|
93,529 | 128,723 | 104,809 | |||||||||
Income
Taxes
|
(34,302 | ) | (51,948 | ) | (43,056 | ) | ||||||
Equity
in (Loss) Earnings of Affiliated Companies
|
(926 | ) | 176 | 885 | ||||||||
Income
from Continuing Operations
|
58,301 | 76,951 | 62,638 | |||||||||
Loss
from Discontinued Operations - (Net of tax benefit)
|
(427 | ) | (247 | ) | (391 | ) | ||||||
Net
Income
|
57,874 | 76,704 | 62,247 | |||||||||
Less: Net
Loss Attributable to Noncontrolling Interest in
Subsidiaries
|
231 | 227 | 21 | |||||||||
Net
Income - Attributable to South Jersey Industries, Inc.
Shareholders
|
$ | 58,105 | $ | 76,931 | $ | 62,268 | ||||||
Amounts
Attributable to South Jersey Industries, Inc. Shareholders
|
||||||||||||
Income
from Continuing Operations
|
$ | 58,532 | $ | 77,178 | $ | 62,659 | ||||||
Loss
from Discontinued Operations - (Net of tax
benefit)
|
(427 | ) | (247 | ) | (391 | ) | ||||||
Net
Income - Attributable to South Jersey Industries, Inc.
Shareholders
|
$ | 58,105 | $ | 76,931 | $ | 62,268 | ||||||
Basic
Earnings per Common Share Attributable to South Jersey Industries, Inc.
Shareholders:
|
||||||||||||
Continuing
Operations
|
$ | 1.97 | $ | 2.60 | $ | 2.13 | ||||||
Discontinued
Operations
|
(0.02 | ) | (0.01 | ) | (0.02 | ) | ||||||
Basic
Earnings per Common Share
|
$ | 1.95 | $ | 2.59 | $ | 2.11 | ||||||
Average
Shares of Common Stock Outstanding - Basic
|
29,785 | 29,707 | 29,480 | |||||||||
Diluted
Earnings per Common Share Attributable to South Jersey Industries, Inc.
Shareholders:
|
||||||||||||
Continuing
Operations
|
$ | 1.96 | $ | 2.59 | $ | 2.12 | ||||||
Discontinued
Operations
|
(0.02 | ) | (0.01 | ) | (0.02 | ) | ||||||
Diluted
Earnings per Common Share
|
$ | 1.94 | $ | 2.58 | $ | 2.10 | ||||||
Average
Shares of Common Stock Outstanding - Diluted
|
29,893 | 29,843 | 29,593 | |||||||||
Dividends
Declared per Common Share
|
$ | 1.22 | $ | 1.11 | $ | 1.01 |
Statements of Consolidated Cash
Flows
|
South
Jersey Industries, Inc. and Subsidiaries
|
|||||||||||
(In
Thousands)
|
Year
Ended December 31,
|
|||||||||||
|
2009
|
2008
|
2007
|
|||||||||
Cash
Flows from Operating Activities:
|
||||||||||||
Net
Income
|
$ | 57,874 | $ | 76,704 | $ | 62,247 | ||||||
Loss
from Discontinued Operations
|
427 | 247 | 391 | |||||||||
Income
from Continuing Operations
|
58,301 | 76,951 | 62,638 | |||||||||
Adjustments
to Reconcile Income from Continuing Operations to Net Cash Provided by
|
||||||||||||
Operating Activities: | ||||||||||||
Depreciation
and Amortization
|
39,447 | 35,665 | 32,865 | |||||||||
Net
Unrealized Loss (Gain) on Derivatives - Energy Related
|
14,815 | (9,317 | ) | (3,635 | ) | |||||||
Unrealized
Loss on Derivatives - Other
|
1,210 | 2,174 | - | |||||||||
Provision
for Losses on Accounts Receivable
|
2,728 | 2,332 | 2,603 | |||||||||
TAC/CIP
Receivable
|
5,376 | 2,641 | (7,946 | ) | ||||||||
Deferred
Gas Costs - Net of Recoveries
|
(7,910 | ) | 5,885 | 7,755 | ||||||||
Deferred
SBC Costs - Net of Recoveries
|
(119 | ) | 1,199 | 3,960 | ||||||||
Stock-Based
Compensation Expense
|
1,481 | 1,263 | 1,090 | |||||||||
Deferred
and Noncurrent Income Taxes - Net
|
21,917 | 23,014 | 12,030 | |||||||||
Environmental
Remediation Costs - Net
|
(449 | ) | (26,175 | ) | (10,926 | ) | ||||||
Gas
Plant Cost of Removal
|
(1,678 | ) | (1,463 | ) | (1,275 | ) | ||||||
Changes
in:
|
||||||||||||
Accounts
Receivable
|
(28,003 | ) | (14,293 | ) | (5,232 | ) | ||||||
Inventories
|
68,591 | (48,599 | ) | 21,459 | ||||||||
Prepaid
and Accrued Taxes - Net
|
(4,818 | ) | (7,022 | ) | 8,916 | |||||||
Accounts
Payable and Other Accrued Liabilities
|
(8,213 | ) | 14,018 | (5,036 | ) | |||||||
Margin
Account Liability
|
- | (4,112 | ) | 4,112 | ||||||||
Derivatives
- Energy Related
|
12,366 | (17,564 | ) | 21,050 | ||||||||
Other
Assets and Liabilities
|
(345 | ) | (8,931 | ) | 3,474 | |||||||
Cash
Flows from Discontinued Operations
|
493 | (1,277 | ) | (56 | ) | |||||||
Net
Cash Provided by Operating Activities
|
175,190 | 26,389 | 147,846 | |||||||||
Cash
Flows from Investing Activities:
|
||||||||||||
Capital
Expenditures
|
(109,307 | ) | (61,972 | ) | (55,539 | ) | ||||||
Net
Proceeds from Sale of (Purchase of) Restricted Investments in Margin
Account
|
25,883 | (29,731 | ) | 10,404 | ||||||||
Proceeds
from Sale of Restricted Investments from Escrowed Loan
Proceeds
|
- | 5,170 | 6,710 | |||||||||
Purchase
of Restricted Investments with Escrowed Loan Proceeds
|
- | (77 | ) | (523 | ) | |||||||
Investment
in Long-Term Receivables
|
(4,730 | ) | (5,558 | ) | (4,123 | ) | ||||||
Proceeds
from Long-Term Receivables
|
5,399 | 3,399 | 3,877 | |||||||||
Purchase
of Company Owned Life Insurance
|
(4,444 | ) | (4,287 | ) | (3,917 | ) | ||||||
Investment
in Affiliate
|
(3,999 | ) | (2,969 | ) | (7,463 | ) | ||||||
Return
of Investment in Affiliate
|
175 | 7,470 | 7,208 | |||||||||
Proceeds
from Sale of Investment in Affiliate
|
- | 58 | - | |||||||||
Advances
on Notes Receivable - Affilate
|
(26,780 | ) | (7,457 | ) | - | |||||||
Repayment
of Advances on Notes Receivable - Affiliate
|
2,897 | - | - | |||||||||
Net
Cash Used in Investing Activities
|
(114,906 | ) | (95,954 | ) | (43,366 | ) | ||||||
Cash
Flows from Financing Activities:
|
||||||||||||
Net
(Repayments of) Borrowings from Lines of Credit
|
(15,950 | ) | 94,260 | (76,310 | ) | |||||||
Proceeds
from Issuance of Long-Term Debt
|
- | 25,000 | - | |||||||||
Principal
Repayments of Long-Term Debt
|
(9,985 | ) | (25,106 | ) | (2,389 | ) | ||||||
Dividends
on Common Stock
|
(36,426 | ) | (32,914 | ) | (29,656 | ) | ||||||
Proceeds
from Sale of Common Stock
|
- | 2,076 | 7,484 | |||||||||
Payments
for Issuance of Long-Term Debt
|
(178 | ) | (320 | ) | - | |||||||
Other
|
303 | 666 | 137 | |||||||||
Net
Cash (Used in) Provided by Financing Activities
|
(62,236 | ) | 63,662 | (100,734 | ) | |||||||
Net
(Decrease) Increase in Cash and Cash Equivalents
|
(1,952 | ) | (5,903 | ) | 3,746 | |||||||
Cash
and Cash Equivalents at Beginning of Year
|
5,775 | 11,678 | 7,932 | |||||||||
Cash
and Cash Equivalents at End of Year
|
$ | 3,823 | $ | 5,775 | $ | 11,678 | ||||||
Supplemental
Disclosures of Cash Flow Information
|
||||||||||||
Cash
paid during the year for:
|
||||||||||||
Interest
(Net of Amounts Capitalized)
|
$ | 20,519 | $ | 24,253 | $ | 27,025 | ||||||
Income
Taxes (Net of Refunds)
|
$ | 11,844 | $ | 35,363 | $ | 22,461 | ||||||
Supplemental
Disclosures of Non-Cash Investing Activities
|
||||||||||||
Capital
Expenditures acquired on account but unpaid as of year-end
|
$ | 19,934 | $ | 7,877 | $ | 4,797 | ||||||
Guarantee
of certain obligations of unconsolidated affiliates
|
$ | 6,852 | $ | - | $ | 1,985 |
Consolidated Balance Sheets
(In
Thousands)
|
South
Jersey Industries, Inc. and Subsidiaries
|
|||||||
December 31,
|
||||||||
|
2009
|
2008
|
||||||
Assets
|
||||||||
Property,
Plant and Equipment:
|
||||||||
Utility
Plant, at original cost
|
$ | 1,275,792 | $ | 1,172,014 | ||||
Accumulated
Depreciation
|
(314,627 | ) | (295,432 | ) | ||||
Nonutility
Property and Equipment, at cost
|
132,119 | 121,658 | ||||||
Accumulated
Depreciation
|
(20,212 | ) | (15,632 | ) | ||||
Property,
Plant and Equipment - Net
|
1,073,072 | 982,608 | ||||||
Investments:
|
||||||||
Available-for-Sale
Securities
|
5,958 | 4,859 | ||||||
Restricted
|
5,215 | 31,098 | ||||||
Investment
in Affiliates
|
2,483 | 1,966 | ||||||
Total
Investments
|
13,656 | 37,923 | ||||||
Current
Assets:
|
||||||||
Cash
and Cash Equivalents
|
3,823 | 5,775 | ||||||
Accounts
Receivable
|
141,109 | 121,683 | ||||||
Unbilled
Revenues
|
58,598 | 52,907 | ||||||
Provision
for Uncollectibles
|
(6,268 | ) | (5,757 | ) | ||||
Notes
Receivable - Affiliate
|
502 | - | ||||||
Natural
Gas in Storage, average cost
|
99,697 | 162,387 | ||||||
Materials
and Supplies, average cost
|
6,877 | 12,778 | ||||||
Prepaid
Taxes
|
20,093 | 14,604 | ||||||
Derivatives
- Energy Related Assets
|
36,512 | 63,201 | ||||||
Other
Prepayments and Current Assets
|
7,412 | 7,506 | ||||||
Total
Current Assets
|
368,355 | 435,084 | ||||||
Regulatory
and Other Noncurrent Assets:
|
||||||||
Regulatory
Assets
|
240,462 | 270,434 | ||||||
Derivatives
- Energy Related Assets
|
11,585 | 19,712 | ||||||
Unamortized
Debt Issuance Costs
|
6,788 | 7,166 | ||||||
Notes
Receivable - Affiliate
|
30,838 | 7,457 | ||||||
Contract
Receivables
|
13,544 | 13,565 | ||||||
Other
|
23,708 | 19,478 | ||||||
Total
Regulatory and Other Noncurrent Assets
|
326,925 | 337,812 | ||||||
Total
Assets
|
$ | 1,782,008 | $ | 1,793,427 | ||||
Capitalization
and Liabilities
|
||||||||
Capitalization:
|
||||||||
Equity
|
$ | 544,564 | $ | 516,448 | ||||
Long-Term
Debt
|
312,793 | 332,784 | ||||||
Total
Capitalization
|
857,357 | 849,232 | ||||||
Current
Liabilities:
|
||||||||
Notes
Payable
|
196,600 | 212,550 | ||||||
Current
Portion of Long-Term Debt
|
35,119 | 25,112 | ||||||
Accounts
Payable
|
123,921 | 120,162 | ||||||
Customer
Deposits and Credit Balances
|
14,128 | 14,449 | ||||||
Environmental
Remediation Costs
|
23,639 | 13,670 | ||||||
Taxes
Accrued
|
6,518 | 5,510 | ||||||
Derivatives
- Energy Related Liabilities
|
28,260 | 50,925 | ||||||
Deferred
Income Taxes - Net
|
19,897 | 25,009 | ||||||
Deferred
Contract Revenues
|
6,081 | 5,840 | ||||||
Interest
Accrued
|
6,211 | 6,519 | ||||||
Pension
and Other Postretirement Benefits
|
1,109 | 1,031 | ||||||
Other
Current Liabilities
|
17,301 | 19,130 | ||||||
Total
Current Liabilities
|
478,784 | 499,907 | ||||||
Deferred
Credits and Other Noncurrent Liabilities:
|
||||||||
Deferred
Income Taxes - Net
|
215,346 | 184,294 | ||||||
Investment
Tax Credits
|
1,518 | 1,832 | ||||||
Pension
and Other Postretirement Benefits
|
69,141 | 80,835 | ||||||
Environmental
Remediation Costs
|
49,803 | 54,495 | ||||||
Asset
Retirement Obligations
|
23,229 | 22,553 | ||||||
Derivatives
- Energy Related Liabilities
|
10,931 | 15,699 | ||||||
Derivatives
- Other
|
5,823 | 14,088 | ||||||
Regulatory
Liabilities
|
50,193 | 50,447 | ||||||
Other
|
19,883 | 20,045 | ||||||
Total
Deferred Credits and Other Noncurrent Liabilities
|
445,867 | 444,288 | ||||||
Commitments
and Contingencies (Note 14)
|
||||||||
Total
Capitalization and Liabilities
|
$ | 1,782,008 | $ | 1,793,427 |
Statements of Consolidated
Capitalization
(In
Thousands Except for Share Data)
|
South
Jersey Industries, Inc. and Subsidiaries
December 31,
|
|||||||
|
2009
|
2008
|
||||||
Equity:
|
||||||||
Common
Stock: Par Value $1.25 per share; Authorized 60,000,000
shares;
|
||||||||
Outstanding
Shares: 29,796,232 (2009) and 29,728,697 (2008)
|
||||||||
Balance
at Beginning of Year
|
$ | 37,161 | $ | 37,010 | ||||
Common
Stock Issued or Granted Under Stock Plans
|
84 | 151 | ||||||
Balance
at End of Year
|
37,245 | 37,161 | ||||||
Premium
on Common Stock
|
254,503 | 252,495 | ||||||
Treasury
Stock (at par)
|
(183 | ) | (176 | ) | ||||
Accumulated
Other Comprehensive Loss
|
(19,469 | ) | (24,199 | ) | ||||
Retained
Earnings
|
271,505 | 249,973 | ||||||
Total
South Jersey Industries, Inc. Shareholders' Equity
|
543,601 | 515,254 | ||||||
Noncontrolling
Interest in Subsidiaries
|
963 | 1,194 | ||||||
Total
Equity
|
544,564 | 516,448 | ||||||
Long-Term
Debt: (A)
|
||||||||
South
Jersey Gas Company:
|
||||||||
First
Mortgage Bonds: (B)
|
||||||||
6.12% Series due 2010 | 10,000 | 10,000 | ||||||
6.74% Series due 2011 | 10,000 | 10,000 | ||||||
6.57% Series due 2011 | 15,000 | 15,000 | ||||||
4.46% Series due 2013 | 10,500 | 10,500 | ||||||
5.027% Series due 2013 | 14,500 | 14,500 | ||||||
4.52% Series due 2014 | 11,000 | 11,000 | ||||||
5.115% Series due 2014 | 10,000 | 10,000 | ||||||
5.387% Series due 2015 | 10,000 | 10,000 | ||||||
5.437% Series due 2016 | 10,000 | 10,000 | ||||||
6.50% Series due 2016 (C) | - | 9,873 | ||||||
4.60% Series due 2016 | 17,000 | 17,000 | ||||||
4.657% Series due 2017 | 15,000 | 15,000 | ||||||
7.97% Series due 2018 | 10,000 | 10,000 | ||||||
7.125% Series due 2018 | 20,000 | 20,000 | ||||||
5.587% Series due 2019 | 10,000 | 10,000 | ||||||
7.7% Series due 2027 | 35,000 | 35,000 | ||||||
5.55% Series due 2033 | 32,000 | 32,000 | ||||||
6.213% Series due 2034 | 10,000 | 10,000 | ||||||
5.45% Series due 2035 | 10,000 | 10,000 | ||||||
Series
A 2006 Bonds at variable rates due 2036 (D)
|
25,000 | 25,000 | ||||||
Marina
Energy LLC: (E)
|
||||||||
Series
A 2001 Bonds at variable rates due 2031
|
20,000 | 20,000 | ||||||
Series
B 2001 Bonds at variable rates due 2021
|
25,000 | 25,000 | ||||||
Series
A 2006 Bonds at variable rates due 2036
|
16,400 | 16,400 | ||||||
AC
Landfill Energy, LLC: (F)
|
||||||||
Bank
Term Loan, 6% due 2014
|
331 | 442 | ||||||
Mortgage
Bond, 4.19% due 2019
|
1,181 | 1,181 | ||||||
Total
Long-Term Debt Outstanding
|
347,912 | 357,896 | ||||||
Less
Current Maturities
|
(35,119 | ) | (25,112 | ) | ||||
Total
Long-Term Debt
|
312,793 | 332,784 | ||||||
Total
Capitalization
|
$ | 857,357 | $ | 849,232 |
(A)
|
The
long-term debt maturities and sinking fund requirements for the succeeding
five years are as follows:
|
(B)
|
SJG's
First Mortgage dated October 1, 1947, as supplemented, securing the First
Mortgage Bonds constitutes a direct first mortgage lien on substantially
all utility plant.
|
(C)
|
In
November 2009 SJG retired its 6.5% First Mortgage Bonds at
par.
|
(D)
|
On
April 20, 2006, SJG issued $25.0 million of tax exempt, auction rate debt
through the New Jersey Economic Development Authority (NJEDA) under its
$150.0 million MTN Program. These bonds were repurchased by the Company in
June 2008 and remarketed to the public in August 2008 as variable rate
demand bonds with liquidity support provided by a letter of credit from a
commercial bank. As of December 31, 2008 and 2009, the respective letter
of credit expires in August of the subsequent year. Consequently, these
bonds are included in the current portion of long-term debt. Material
terms of the original bonds, such as the 2036 maturity date, floating rate
interest that resets weekly, and a first mortgage collateral position,
remain unchanged.
|
(E)
|
Marina
has issued $61.4 million of unsecured variable-rate revenue bonds through
the (NJEDA). The variable rates at December 31, 2009 for the Series A
2001, Series B 2001, and Series A 2006 bonds were 0.25%, 0.28% and 0.25%
respectively.
|
(F)
|
The
debt of AC Landfill Energy is secured by a first mortgage interest in
plant and equipment, and an assignment of rents and leases of the
facility.
|
Statements of Consolidated Changes In
Equity
|
||||||||||||||||||||||||||||
(In
Thousands)
|
South
Jersey Industries, Inc. and Subsidiaries
|
|||||||||||||||||||||||||||
Years
Ended December 31, 2007, 2008 & 2009
|
||||||||||||||||||||||||||||
|
Common
Stock
|
Premium
on Common Stock
|
Treasury
Stock
|
Accumulated
Other Comprehensive Loss
|
Retained
Earnings
|
Noncontrolling
Interest in Subsidiaries
|
Total
|
|||||||||||||||||||||
Balance
at January 1, 2007
|
$ | 36,657 | $ | 239,763 | $ | - | $ | (7,791 | ) | $ | 173,636 | $ | 461 | $ | 442,726 | |||||||||||||
Net
Income
|
62,268 | (21 | ) | 62,247 | ||||||||||||||||||||||||
Other
Comprehensive Loss, Net of Tax (a)
|
(2,524 | ) | (2,524 | ) | ||||||||||||||||||||||||
Common
Stock Issued or Granted Under Stock Plans
|
353 | 8,686 | (187 | ) | (125 | ) | 8,727 | |||||||||||||||||||||
Cash
Dividends Declared - Common Stock
|
(29,656 | ) | (29,656 | ) | ||||||||||||||||||||||||
Balance
at December 31, 2007
|
37,010 | 248,449 | (187 | ) | (10,315 | ) | 206,123 | 440 | 481,520 | |||||||||||||||||||
Net
Income
|
76,931 | (227 | ) | 76,704 | ||||||||||||||||||||||||
Other
Comprehensive Loss, Net of Tax (a)
|
(13,884 | ) | (13,884 | ) | ||||||||||||||||||||||||
Contributions
to noncontrolling interest in subsidiaries
|
981 | 981 | ||||||||||||||||||||||||||
Common
Stock Issued or Granted Under Stock Plans
|
151 | 4,046 | 11 | (167 | ) | 4,041 | ||||||||||||||||||||||
Cash
Dividends Declared - Common Stock
|
(32,914 | ) | (32,914 | ) | ||||||||||||||||||||||||
Balance
at December 31, 2008
|
37,161 | 252,495 | (176 | ) | (24,199 | ) | 249,973 | 1,194 | 516,448 | |||||||||||||||||||
Net
Income
|
58,105 | (231 | ) | 57,874 | ||||||||||||||||||||||||
Other
Comprehensive Income, Net of Tax (a)
|
4,730 | 4,730 | ||||||||||||||||||||||||||
Common
Stock Issued or Granted Under Stock Plans
|
84 | 2,008 | (7 | ) | (147 | ) | 1,938 | |||||||||||||||||||||
Cash
Dividends Declared - Common Stock
|
(36,426 | ) | (36,426 | ) | ||||||||||||||||||||||||
Balance
at December 31, 2009
|
$ | 37,245 | $ | 254,503 | $ | (183 | ) | $ | (19,469 | ) | $ | 271,505 | $ | 963 | $ | 544,564 |
Disclosure of Changes In Accumulated Other
Comprehensive Loss Balances (a)
|
||||||||||||||||||||
(In
Thousands)
|
Postretirement
Liability Adjustment
|
Unrealized
Gain (Loss) on Derivatives-Other
|
Unrealized
Gain (Loss) on Available-for-Sale Securities
|
Other
Comprehensive Income (Loss) of Affiliated Companies
|
Accumulated
Other Comprehensive Loss
|
|||||||||||||||
Balance
at January 1, 2007
|
$ | (7,156 | ) | $ | (842 | ) | $ | 207 | $ | - | $ | (7,791 | ) | |||||||
Changes
During Year
|
199 | (1,385 | ) | (195 | ) | (1,143 | ) | (2,524 | ) | |||||||||||
Balance
at December 31, 2007
|
(6,957 | ) | (2,227 | ) | 12 | (1,143 | ) | (10,315 | ) | |||||||||||
Changes
During Year
|
(6,877 | ) | (1,062 | ) | (730 | ) | (5,215 | ) | (13,884 | ) | ||||||||||
Balance
at December 31, 2008
|
(13,834 | ) | (3,289 | ) | (718 | ) | (6,358 | ) | (24,199 | ) | ||||||||||
Changes
During Year
|
1,208 | 958 | 533 | 2,031 | 4,730 | |||||||||||||||
Balance
at December 31, 2009
|
$ | (12,626 | ) | $ | (2,331 | ) | $ | (185 | ) | $ | (4,327 | ) | $ | (19,469 | ) |
(a)
|
Determined
using a combined statutory tax rate of
41.08%
|
Statements of Consolidated Comprehensive
Income
|
South
Jersey Industries, Inc. and Subsidiaries
|
|||||||||||
(In
Thousands)
|
Year
Ended December 31,
|
|||||||||||
2009
|
2008
|
2007
|
||||||||||
Net
Income
|
$ | 57,874 | $ | 76,704 | $ | 62,247 | ||||||
Other
Comprehensive Income (Loss), Net of Tax: (a)
|
||||||||||||
Postretirement
Liability Adjustment
|
1,208 | (6,877 | ) | 199 | ||||||||
Unrealized
Gain (Loss) on Available-for-Sale Securities
|
533 | (730 | ) | (195 | ) | |||||||
Unrealized
Gain (Loss) on Derivatives - Other
|
958 | (1,062 | ) | (1,385 | ) | |||||||
Other
Comprehensive Income (Loss) of Affiliated Companies
|
2,031 | (5,215 | ) | (1,143 | ) | |||||||
Other
Comprehensive Income (Loss)- Net of Tax (a)
|
4,730 | (13,884 | ) | (2,524 | ) | |||||||
Comprehensive
Income
|
62,604 | 62,820 | 59,723 | |||||||||
Less:
Comprehensive Loss Attributable to Noncontrolling Interest in
Subsidiaries
|
231 | 227 | 21 | |||||||||
Comprehensive
Income Attributable to South Jersey Industries, Inc.
Shareholders
|
$ | 62,835 | $ | 63,047 | $ | 59,744 |
(a)
|
Determined
using a combined statutory tax rate of
41.08%.
|
1.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES:
|
|
|
2009
|
|
|
2008
|
|
||
AROs
as of January 1,
|
|
$
|
22,553
|
|
$
|
24,604
|
|
|
Accretion
|
|
|
507
|
|
|
|
441
|
|
Additions
|
193
|
136
|
|
|||||
Settlements
|
|
|
(24
|
)
|
|
|
(37
|
)
|
Revisions
in Estimated Cash Flows*
|
-
|
(2,591
|
)
|
|||||
ARO’s
as of December 31,
|
|
$
|
23,229
|
|
|
$
|
22,553
|
|
Notional
Amount
|
|
Fixed
Interest
Rate
|
Start
Date
|
Maturity
|
Type
of Debt
|
Obligor
|
||||||
$
|
3,900,000
|
|
4.795
|
%
|
12/01/2004
|
12/01/2014
|
Taxable
|
Marina
|
||||
$
|
8,000,000
|
|
4.775
|
%
|
11/12/2004
|
11/12/2014
|
Taxable
|
Marina
|
||||
$
|
20,000,000
|
|
4.080
|
%
|
11/19/2001
|
12/01/2011
|
Tax-exempt
|
Marina
|
||||
$
|
14,500,000
|
|
3.905
|
%
|
03/17/2006
|
01/15/2026
|
Tax-exempt
|
Marina
|
||||
$
|
500,000
|
|
3.905
|
%
|
03/17/2006
|
01/15/2026
|
Tax-exempt
|
Marina
|
||||
$
|
330,000
|
|
3.905
|
%
|
03/17/2006
|
01/15/2026
|
Tax-exempt
|
Marina
|
||||
$
|
7,100,000
|
|
4.895
|
%
|
02/01/2006
|
02/01/2016
|
Taxable
|
Marina
|
||||
$
|
12,500,000
|
|
3.430
|
%
|
12/01/2006
|
02/01/2036
|
Tax-exempt
|
SJG
|
||||
$
|
12,500,000
|
|
3.430
|
%
|
12/01/2006
|
02/01/2036
|
Tax-exempt
|
SJG
|
Year
ended December 31,
|
||||||||||||
Derivatives
in Cash Flow Hedging Relationships
|
2009
|
2008
|
2007
|
|||||||||
Interest
Rate Contracts:
|
||||||||||||
Gains
or (losses) recognized in OCI on effective portion
|
$ | 164 | $ | (2,739 | ) | $ | (2,431 | ) | ||||
Losses
reclassified from accumulated OCI into income (a)
|
$ | (1,462 | ) | $ | (936 | ) | $ | (80 | ) | |||
Gains
or (losses) recognized in income on ineffective portion
(a)
|
- | - | - |
|
Grant
|
Shares
|
|
Fair
Value
|
|
Expected
|
Risk-Free
|
|||
|
Date
|
Outstanding
|
|
Per
Share
|
|
Volatility
|
Interest
Rate
|
|||
|
|
|
|
|
|
|
|
|
||
Officers
&
|
Jan.
2008
|
42,144
|
|
$
|
34.030
|
|
21.7%
|
2.9%
|
||
Key
Employees
|
Jan.
2009
|
38,137
|
$
|
39.350
|
|
28.6%
|
1.2%
|
|||
|
|
|
|
|
|
|
|
|||
Directors
-
|
Jan.
2008
|
7,704
|
|
$
|
36.355
|
|
-
|
-
|
||
|
Jan.
2009
|
8,690
|
|
$
|
40.265
|
|
-
|
-
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|||
Officers
& Key Employees
|
|
$
|
1,322
|
|
|
$
|
1,144
|
|
|
$
|
996
|
|
Directors
|
|
|
330
|
|
|
|
268
|
|
|
|
209
|
|
Total
Cost
|
|
|
1,652
|
|
|
|
1,412
|
|
|
|
1,205
|
|
Capitalized
|
|
|
(171
|
)
|
|
|
(149
|
)
|
|
|
(115
|
)
|
Net
Expense
|
|
$
|
1,481
|
|
|
$
|
1,263
|
|
|
$
|
1,090
|
|
|
Officers
&Key Employees
|
|
|
Directors
|
|
|
Weighted
Average Grant Date Fair Value
|
|||||
Nonvested
Shares Outstanding, January 1, 2009
|
|
|
83,103
|
|
|
|
17,928
|
|
|
$
|
32.386
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Granted
|
|
|
41,437
|
|
|
|
9,559
|
|
|
$
|
39.522
|
|
Vested*
|
|
|
(37,605
|
)
|
|
|
(11,093
|
)
|
|
$
|
30.463
|
|
Cancelled/Forfeited
|
|
|
(6,654
|
)
|
|
|
-
|
|
|
$
|
35.930
|
|
Nonvested
Shares Outstanding, December 31, 2009
|
|
|
80,281
|
|
|
|
16,394
|
|
|
$
|
36.874
|
2.
|
DISCONTINUED
OPERATIONS, AFFILIATIONS AND CONTROLLING
INTERESTS:
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
||||
Loss
before Income Taxes:
|
|
|
|
|
|
|
|
|
|
|||
Sand
Mining
|
|
$
|
(289
|
)
|
|
$
|
(227
|
)
|
|
$
|
(411
|
)
|
Fuel
Oil
|
|
|
(362
|
)
|
|
|
(149
|
)
|
|
|
(95
|
)
|
Income
Tax Benefits
|
|
|
224
|
|
|
129
|
|
|
|
115
|
|
|
Loss
from Discontinued Operations
|
|
$
|
(427
|
)
|
|
$
|
(247
|
)
|
|
$
|
(391
|
)
|
Earnings
Per Common Share from
|
|
|
|
|
|
|
|
|
|
|
||
Discontinued
Operations
|
|
|
|
|
|
|
|
|
|
|
||
Basic
and Diluted
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
3.
|
INCOME
TAXES:
|
|
2009
|
|
|
2008
|
|
|||
Current:
|
|
|
|
|
|
|
||
Deferred
Gas Costs - Net
|
|
$
|
4,122
|
|
$
|
4,122
|
|
|
Derivatives
/ Unrealized Gain
|
|
|
8,818
|
|
|
12,849
|
|
|
Conservation
Incentive Program
|
|
|
7,396
|
|
|
9,056
|
|
|
Other
|
|
|
(439)
|
|
|
(1,018
|
)
|
|
Current
Deferred Tax Liability - Net
|
|
$
|
19,897
|
|
$
|
25,009
|
|
|
Noncurrent:
|
|
|
|
|
|
|
||
Book
versus Tax Basis of Property
|
|
$
|
212,452
|
|
$
|
182,139
|
|
|
Deferred
Gas Costs - Net
|
|
|
7,567
|
|
|
5,470
|
|
|
Environmental
|
|
|
15,712
|
|
|
19,302
|
|
|
Deferred
Regulatory Costs
|
|
|
1,259
|
|
|
1,246
|
|
|
Deferred
State Tax
|
|
|
(9,369)
|
|
|
(7,692
|
)
|
|
Investment
Tax Credit Basis Gross-Up
|
|
|
(782)
|
|
|
(944
|
)
|
|
Deferred
Pension & Other Post Retirement Benefits
|
|
|
28,783
|
|
|
32,311
|
|
|
Pension
& Other Post Retirement Benefits
|
|
|
(25,776)
|
|
|
(32,550
|
)
|
|
Deferred
Revenues
|
|
|
(14,924)
|
|
|
(11,761
|
)
|
|
Derivatives/Unrealized Gain
|
|
|
(2,545)
|
|
|
(3,060
|
)
|
|
Other
|
|
|
2,969
|
|
|
(167
|
)
|
|
Noncurrent
Deferred Tax Liability - Net
|
|
$
|
215,346
|
|
$
|
184,294
|
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|||
Balance
at January 1,
|
|
$
|
1,722
|
|
|
$
|
1,926
|
|
|
$
|
2,125
|
|
|
||||||||||||
Increase
as a result of tax positions taken in prior years
|
|
|
59
|
|
|
|
253
|
|
|
|
154
|
|
Decrease
due to a lapse in the statute of limitations
|
|
|
(683
|
)
|
|
|
(457
|
)
|
|
|
(353
|
)
|
|
||||||||||||
Balance
at December 31,
|
|
$
|
1,098
|
|
|
$
|
1,722
|
|
|
$
|
1,926
|
|
4.
|
PREFERRED
STOCK:
|
5.
|
COMMON
STOCK:
|
|
2009
|
2008
|
2007
|
|||||||||
Beginning
of Year
|
29,728,697 | 29,607,802 | 29,325,593 | |||||||||
New
Issues During Year:
|
||||||||||||
Dividend
Reinvestment Plan
|
- | 60,390 | 212,428 | |||||||||
Stock-Based
Compensation Plan
|
67,535 | 60,505 | 69,781 | |||||||||
End
of Year
|
29,796,232 | 29,728,697 | 29,607,802 |
6.
|
FINANCIAL
INSTRUMENTS:
|
7.
|
SEGMENTS
OF BUSINESS:
|
2009
|
2008
|
2007
|
||||||||||
Operating
Revenues:
|
||||||||||||
Gas
Utility Operations
|
$ | 484,376 | $ | 568,046 | $ | 630,547 | ||||||
Wholesale
Gas Operations
|
97,475 | 115,550 | 75,747 | |||||||||
Retail
Gas and Other Operations
|
109,414 | 177,342 | 174,043 | |||||||||
Retail
Electric Operations
|
113,606 | 60,046 | 51,098 | |||||||||
On-Site
Energy Production
|
37,031 | 46,980 | 40,084 | |||||||||
Appliance
Service Operations
|
18,900 | 19,184 | 17,224 | |||||||||
Corporate
& Services
|
19,948 | 18,221 | 14,778 | |||||||||
Subtotal
|
880,750 | 1,005,369 | 1,003,521 | |||||||||
Intersegment
Sales
|
(35,306 | ) | (43,392 | ) | (47,150 | ) | ||||||
Total
Operating Revenues
|
$ | 845,444 | $ | 961,977 | $ | 956,371 | ||||||
Operating
Income:
|
||||||||||||
Gas
Utility Operations
|
$ | 81,439 | $ | 84,417 | $ | 83,989 | ||||||
Wholesale
Gas Operations
|
29,601 | 50,985 | 33,156 | |||||||||
Retail
Gas and Other Operations
|
78 | 2,718 | 192 | |||||||||
Retail
Electric Operations
|
(7,459 | ) | 2,096 | 2,201 | ||||||||
On-Site
Energy Production
|
5,309 | 10,435 | 8,406 | |||||||||
Appliance
Service Operations
|
1,361 | 2,040 | 1,003 | |||||||||
Corporate
and Services
|
781 | 818 | 676 | |||||||||
Total
Operating Income
|
$ | 111,110 | $ | 153,509 | $ | 129,623 | ||||||
Depreciation
and Amortization:
|
||||||||||||
Gas
Utility Operations
|
$ | 34,507 | $ | 31,506 | $ | 29,317 | ||||||
Wholesale
Gas Operations
|
304 | 311 | 6 | |||||||||
Retail
Gas and Other Operations
|
21 | 18 | 13 | |||||||||
On-Site
Energy Production
|
3,804 | 3,097 | 2,955 | |||||||||
Appliance
Service Operations
|
306 | 301 | 280 | |||||||||
Corporate
and Services
|
505 | 432 | 294 | |||||||||
Total
Depreciation and Amortization
|
$ | 39,447 | $ | 35,665 | $ | 32,865 | ||||||
Interest
Charges:
|
||||||||||||
Gas
Utility Operations
|
$ | 16,442 | $ | 18,938 | $ | 20,985 | ||||||
Wholesale
Gas Operations
|
339 | 956 | 2,204 | |||||||||
Retail
Gas and Other Operations
|
16 | 111 | 190 | |||||||||
On-Site
Energy Production
|
1,928 | 5,541 | 3,698 | |||||||||
Corporate
and Services
|
780 | 1,704 | 3,772 | |||||||||
Subtotal
|
19,505 | 27,250 | 30,849 | |||||||||
Intersegment
Borrowings
|
(513 | ) | (1,574 | ) | (3,634 | ) | ||||||
Total
Interest Charges
|
$ | 18,992 | $ | 25,676 | $ | 27,215 | ||||||
Income
Taxes:
|
||||||||||||
Gas
Utility Operations
|
$ | 27,104 | $ | 26,508 | $ | 26,652 | ||||||
Wholesale
Gas Operations
|
12,456 | 20,738 | 12,786 | |||||||||
Retail
Gas and Other Operations
|
20 | 1,087 | 55 | |||||||||
Retail
Electric
|
(3,064 | ) | 853 | 883 | ||||||||
On-Site
Energy Production
|
(3,138 | ) | 1,486 | 1,851 | ||||||||
Appliance
Service Operations
|
601 | 890 | 489 | |||||||||
Corporate
and Services
|
323 | 386 | 340 | |||||||||
Total
Income Taxes
|
$ | 34,302 | $ | 51,948 | $ | 43,056 | ||||||
Property
Additions:
|
||||||||||||
Gas
Utility Operations
|
$ | 110,694 | $ | 56,198 | $ | 49,061 | ||||||
Wholesale
Gas Operations
|
27 | 2,707 | 330 | |||||||||
Retail
Gas and Other Operations
|
16 | 11 | 74 | |||||||||
On-Site
Energy Production
|
9,760 | 5,911 | 5,495 | |||||||||
Appliance
Service Operations
|
577 | 86 | 219 | |||||||||
Corporate
and Services
|
290 | 140 | 1,381 | |||||||||
Total
Property Additions
|
$ | 121,364 | $ | 65,053 | $ | 56,560 | ||||||
Identifiable
Assets:
|
||||||||||||
Gas
Utility Operations
|
$ | 1,357,062 | $ | 1,354,015 | ||||||||
Wholesale
Gas Operations
|
194,989 | 196,487 | ||||||||||
Retail
Gas and Other Operations
|
35,506 | 42,939 | ||||||||||
Retail
Electric Operations
|
13,433 | 5,594 | ||||||||||
On-Site
Energy Production
|
135,288 | 123,913 | ||||||||||
Appliance
Service Operations
|
18,832 | 17,704 | ||||||||||
Discontinued
Operations
|
1,215 | 1,409 | ||||||||||
Subtotal
|
1,756,325 | 1,742,061 | ||||||||||
Corporate
and Services
|
56,543 | 91,641 | ||||||||||
Intersegment
Assets
|
(30,860 | ) | (40,275 | ) | ||||||||
Total
Identifiable Assets
|
$ | 1,782,008 | 1,793,427 |
8.
|
LEASES:
|
Year
ended December 31,
|
|
|
|
|
2010
|
|
$
|
5,396
|
|
2011
|
|
|
5,396
|
|
2012
|
|
|
5,396
|
|
2013
|
|
|
5,396
|
|
2014
|
|
|
5,396
|
|
Thereafter
|
|
|
67,002
|
|
Total
minimum future rentals
|
|
$
|
93,982
|
|
9.
|
RATES
AND REGULATORY ACTIONS:
|
|
·
|
June
2007 – SJG made the annual periodic BGSS filing with the BPU requesting a
$16.9 million, or 5.0%, decrease in gas cost recoveries in response to
decreasing wholesale gas costs and a $5.4 million benefit derived from the
Company electing not to extend the terms of two firm transportation
contracts beyond their primary
terms.
|
|
·
|
October
2007 – The BPU approved on a provisional basis, a $36.7 million, or 11%,
annual decrease in gas cost recoveries due to the continuing decrease in
wholesale gas costs subsequent to SJG’s June 2007
filing.
|
|
·
|
May
2008 – SJG made its annual periodic BGSS filing with the BPU requesting a
$73.7 million, or 23%, increase in gas cost recoveries in response to
increasing wholesale gas costs.
|
|
·
|
November
2008 – The BPU approved on a provisional basis, a $38.0 million, or 12%,
increase in gas costs recoveries reflecting a lower increase in gas costs
then originally projected in our May 2008
filing.
|
|
·
|
December
2008 – As part of a global settlement, the BPU approved on a provisional
basis, a decrease in gas cost recoveries of $9.0 million, or 3%, due to
the continued decline in projections in the wholesale gas
market.
|
|
·
|
June
2009 - SJG made its annual BGSS filing to the BPU requesting a $54.7
million reduction, or 17.5% decrease, in gas cost recoveries in response
to projected decreases in wholesale
gas.
|
|
·
|
August
2009 - The BPU issued an Order finalizing the 2008-2009 provisional BGSS
rates.
|
|
·
|
September
2009 - The BPU approved, on a provisional basis, a $54.7 million, or
17.5%, decrease in gas cost
recoveries.
|
|
·
|
June
2007 – SJG made the first annual CIP filing, requesting recovery of $14.3
million in deficiency, of which $9.6 million was non-weather
related.
|
|
·
|
October
2007 – The BPU approved on a provisional basis, recovery of $15.5 million
in deficiency, of which $9.1 million was non-weather
related.
|
|
·
|
May
2008 – SJG made its annual CIP filing, requesting recovery of $19.1
million, of which $14.1 million was non-weather
related.
|
|
·
|
December
2008 – As part of a global settlement, the BPU approved, on a provisional
basis, the recovery of CIP revenue of $20.4 million, of which $16.4
million was non-weather related.
|
|
·
|
June
2009 - SJG made its annual CIP filing to the BPU requesting recovery of
$13.4 million, which included a $13.7 million non-weather related
recovery, partially offset by a credit of $0.3 million which was weather
related.
|
|
·
|
August
2009 - The BPU issued an Order finalizing the 2008-2009 provisional CIP
rates.
|
|
·
|
September
2009 - The BPU approved, on a provisional basis, the recovery of CIP
revenue of $13.4 million.
|
|
·
|
January
2009 - SJG filed a petition with the BPU for approval of an accelerated
infrastructure investment program and associated rate tracker as discussed
above.
|
|
·
|
April
2009 – The BPU approved SJG’s petition for the CIRT, including a first
year estimated capital expenditure level of $70.5 million and estimated
revenue of $3.2 million.
|
|
·
|
November
2009 - SJG made its annual CIRT filing, requesting $10.6 million in
additional revenue.
|
|
·
|
December
2009 – The BPU approved, on a provisional basis, recovery of an additional
$9.9 million in CIRT revenue.
|
|
·
|
January
2009 – SJG filed a petition with the BPU for approval of an energy
efficiency program as noted above.
|
|
·
|
July
2009 - The BPU approved SJG’s petition for the EET with a revenue recovery
of $1.3 million.
|
|
·
|
December
2007 – SJG made the annual SBC filing, superseding the 2005 and 2006 SBC
filings, requesting a $7.4 million increase in annual SBC
recoveries.
|
|
·
|
December
2008 – As part of the global settlement, the BPU approved an increase in
the RAC portion of the SBC, resulting in an increase in revenue of $8.5
million. In addition, the BPU approved a reduction in the
interest rate utilized to calculate deferred tax on the
RAC.
|
|
·
|
January
2009 - SJG made its annual 2008-2009 SBC filing requesting $7.9 million
increase in SBC recoveries.
|
|
·
|
August
2009 - SJG made its annual 2009-2010 SBC filing, requesting a $15.5
million increase in SBC recoveries which includes a net increase in
Remediation Adjustment Clause, Clean Energy Program Clause and
Transportation Initiation Clause.
|
|
·
|
July
2007 – SJG made its annual USF filing, along with the state’s other
electric and gas utilities, proposing to decrease annual statewide gas
revenues to $78.1 million. This rate proposal was approved by
the BPU in October 2007, on an interim basis, and was designed to decrease
the annual USF revenues by $3.4 million for SJG. The revised
rates were effective from October 5, 2007 through September 30,
2008.
|
|
·
|
June
2008 – SJG made its annual USF filing, along with the state’s other
electric and gas utilities, proposing to increase annual statewide gas
revenues to $97.3 million. This proposal is designed to
increase the annual USF revenue by $2.6 million for
SJG.
|
|
·
|
October
2008 – The BPU approved the statewide budget of $96.7 million for all of
the State’s gas utilities. SJG’s portion of this total is
approximately $8.8 million and increased rates were implemented effective
October 27, 2008 resulting in a $2.5 million increase to our annual USF
recoveries.
|
|
·
|
June
2009 - SJG made its annual USF filing, along with the state’s other
electric and gas utilities, proposing to decrease annual statewide gas
revenues by $39.1 million. This proposal was designed to
decrease SJG’s annual USF revenue by $4.9
million.
|
|
·
|
October
2009 – The BPU approved the statewide budget of $60.1 million for all of
the State’s gas utilities. SJG’s portion of this total is
approximately $5.1 million and decreased rates were implemented effective
October 12, 2009 resulting in a $4.1 million decrease to SJG’s annual USF
recoveries.
|
10.
|
REGULATORY
ASSETS & REGULATORY
LIABILITIES:
|
|
|
2009
|
|
|
2008
|
|
||
Environmental
Remediation Costs:
|
|
|
|
|
|
|
||
Expended
- Net
|
|
$
|
42,924
|
|
|
$
|
48,143
|
|
Liability
for Future Expenditures
|
|
|
69,056
|
|
|
|
64,093
|
|
Income
Taxes-Flowthrough Depreciation
|
|
|
1,752
|
|
|
|
2,729
|
|
Deferred
Asset Retirement Obligation Costs
|
|
|
22,438
|
|
|
|
21,901
|
|
Deferred
Gas Costs - Net
|
|
|
6,519
|
|
|
|
18,406
|
|
Deferred
Pension and Other Postretirement Benefit Costs
|
|
|
71,192
|
|
|
|
80,162
|
|
Conservation
Incentive Program Receivable
|
|
|
16,672
|
|
|
|
22,048
|
|
Societal
Benefit Costs Receivable
|
|
|
1,872
|
|
|
|
1,753
|
|
Premium
for Early Retirement of Debt
|
|
|
1,046
|
|
|
|
1,208
|
|
Other
Regulatory Assets
|
|
|
6,991
|
|
|
|
9,991
|
|
Total
Regulatory Assets
|
|
$
|
240,462
|
|
|
$
|
270,434
|
|
|
2009
|
|
|
2008
|
|
|||
Excess
Plant Removal Costs
|
|
$
|
48,715
|
|
|
$
|
48,820
|
|
Other
|
|
|
1,478
|
|
|
|
1,627
|
|
|
|
|
|
|
|
|
||
Total
Regulatory
Liabilities
|
|
$
|
50,193
|
|
|
$
|
50,447
|
|
11.
|
PENSION
AND OTHER POSTRETIREMENT BENEFITS:
|
|
|
Pension
Benefits
|
|
|
Other
Postretirement Benefits
|
|
||||||||||||||||||
|
|
2009
|
|
|
2008
|
2007
|
2009
|
2008
|
2007
|
|
||||||||||||||
Service
Cost
|
|
$
|
3,225
|
|
|
$
|
3,198
|
|
|
$
|
3,324
|
|
|
$
|
893
|
|
|
$
|
968
|
|
|
$
|
976
|
|
Interest
Cost
|
|
|
8,694
|
|
|
|
8,320
|
|
|
|
7,765
|
|
|
|
3,208
|
|
|
|
2,957
|
|
|
|
2,681
|
|
Expected
Return on Plan Assets
|
|
|
(7,553
|
)
|
|
|
(10,417
|
)
|
|
|
(9,998
|
)
|
|
|
(1,551
|
)
|
|
|
(2,195
|
)
|
|
|
(2,091
|
)
|
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Prior
Service Cost (Credits)
|
|
|
278
|
|
|
|
292
|
|
|
|
292
|
|
|
|
(355
|
)
|
|
|
(355
|
)
|
|
|
(355
|
)
|
Actuarial
Loss
|
|
|
5,405
|
|
|
|
1,608
|
|
|
|
1,923
|
|
|
|
1,896
|
|
|
|
744
|
|
|
|
606
|
|
Net
Periodic Benefit Cost
|
|
|
10,049
|
|
|
|
3,001
|
|
|
|
3,306
|
|
|
|
4,091
|
|
|
|
2,119
|
|
|
|
1,817
|
|
Capitalized
Benefit Costs
|
|
|
(3,798
|
)
|
|
|
(1,073
|
)
|
|
|
(1,131
|
)
|
|
|
(1,676
|
)
|
|
|
(765
|
)
|
|
|
(648
|
)
|
Total
Net Periodic Benefit Expense
|
|
$
|
6,251
|
|
|
$
|
1,928
|
|
|
$
|
2,175
|
|
|
$
|
2,415
|
|
|
$
|
1,354
|
|
|
$
|
1,169
|
|
Regulatory Assets | Accumulated Other Comprehensive Loss (pre-tax) | |||||||||||||||
Pension
Benefits
|
Other
Postretirement Benefits
|
Pension
Benefits
|
Other
Postretirement Benefits
|
|||||||||||||
Balance
at January 1, 2008
|
$ | 20,533 | $ | 10,263 | $ | 11,052 | $ | 756 | ||||||||
Amounts
Arising during the Period:
|
||||||||||||||||
Net
Actuarial Loss
|
36,171 | 13,036 | 11,015 | 1,585 | ||||||||||||
Amounts
Amortized to Net Periodic Costs:
|
||||||||||||||||
Net
Actuarial Loss
|
(691 | ) | (677 | ) | (907 | ) | (61 | ) | ||||||||
Prior
Service (Cost) Credit
|
(239 | ) | 254 | (52 | ) | 94 | ||||||||||
Balance
at December 31, 2008
|
55,774 | 22,876 | 21,108 | 2,374 | ||||||||||||
Amounts
Arising during the Period:
|
||||||||||||||||
Net
Actuarial (Gain) Loss
|
(4,188 | ) | 610 | (357 | ) | 72 | ||||||||||
Prior
Service Cost
|
347 | - | 60 | - | ||||||||||||
Amounts
Amortized to Net Periodic Costs:
|
||||||||||||||||
Net
Actuarial Loss
|
(3,641 | ) | (1,746 | ) | (1,729 | ) | (142 | ) | ||||||||
Prior
Service (Cost) Credit
|
(228 | ) | 254 | (48 | ) | 94 | ||||||||||
Balance
at December 31, 2009
|
$ | 48,064 | $ | 21,994 | $ | 19,034 | $ | 2,398 |
|
|
Pension
Benefits
|
|
|
Other
Postretirement Benefits
|
|
||
Prior
Service Costs (Credits)
|
|
$
|
237
|
|
|
$
|
(254
|
)
|
Net
Actuarial Loss
|
|
$
|
3,137
|
|
|
$
|
1,409
|
|
|
|
Pension
Benefits
|
|
|
Other
Postretirement
Benefits
|
|
||
Prior
Service Costs (Credits)
|
|
$
|
43
|
|
|
$
|
(101
|
)
|
Net
Actuarial Loss
|
|
$
|
1,623
|
|
|
$
|
179
|
|
|
|
|
|
|
|
|
Other
Postretirement
|
|
||||||||
|
Pension
Benefits
|
|
|
Benefits
|
|
|||||||||||
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|||||
Change
in Benefit Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Benefit
Obligation at Beginning of Year
|
|
$
|
142,672
|
|
|
$
|
133,015
|
|
|
$
|
50,842
|
|
|
$
|
46,651
|
|
Service
Cost
|
|
|
3,225
|
|
|
|
3,198
|
|
|
|
893
|
|
|
|
968
|
|
Interest
Cost
|
|
|
8,694
|
|
|
|
8,320
|
|
|
|
3,208
|
|
|
|
2,957
|
|
Actuarial
Loss
|
|
|
1,943
|
|
|
|
5,408
|
|
|
4,329
|
|
|
|
3,552
|
||
Retiree
Contributions
|
|
|
-
|
|
|
|
-
|
|
|
|
193
|
|
|
|
164
|
|
Plan
Amendments
|
407
|
-
|
-
|
-
|
||||||||||||
Benefits
Paid
|
|
|
(7,933
|
)
|
|
|
(7,269
|
)
|
|
|
(3,327
|
)
|
|
|
(3,450
|
)
|
Benefit
Obligation at End of Year
|
|
$
|
149,008
|
|
|
$
|
142,672
|
|
|
$
|
56,138
|
|
|
$
|
50,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Change
in Plan Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Fair
Value of Plan Assets at Beginning of Year
|
|
$
|
88,276
|
|
|
$
|
120,414
|
|
|
$
|
22,815
|
|
|
$
|
31,251
|
|
Actual
Return on Plan Assets
|
|
|
14,027
|
|
|
(31,745
|
)
|
|
|
5,172
|
|
|
(8,910
|
)
|
||
Employer
Contributions
|
|
|
11,528
|
|
|
|
6,876
|
|
|
|
3,636
|
|
|
|
3,760
|
|
Retiree
Contributions
|
|
|
-
|
|
|
|
-
|
|
|
|
193
|
|
|
|
164
|
|
Benefits
Paid
|
|
|
(7,933
|
)
|
|
|
(7,269
|
)
|
|
|
(3,327
|
)
|
|
|
(3,450
|
)
|
Fair
Value of Plan Assets at End of Year
|
|
$
|
105,898
|
|
|
$
|
88,276
|
|
|
$
|
28,489
|
|
|
$
|
22,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Funded
Status at End of Year:
|
|
$
|
(43,110
|
)
|
|
$
|
(54,396
|
)
|
|
$
|
(27,649
|
)
|
|
$
|
(28,027
|
)
|
Amounts
Related to Unconsolidated Affiliate
|
|
|
169
|
|
|
|
261
|
|
|
340
|
|
|
|
296
|
|
|
Accrued
Net Benefit Cost at End of Year
|
|
$
|
(42,941
|
)
|
|
$
|
(54,135
|
)
|
|
$
|
(27,309
|
)
|
|
$
|
(27,731
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Amounts
Recognized in the Statement of Financial Position Consist
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Current
Liabilities
|
|
$
|
(1,109
|
)
|
|
$
|
(1,031
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
Noncurrent
Liabilities
|
|
|
(41,832
|
)
|
|
|
(53,104
|
)
|
|
|
(27,309
|
)
|
|
|
(27,731
|
)
|
Net
Amount Recognized at End of Year
|
|
$
|
(42,941
|
)
|
|
$
|
(54,135
|
)
|
|
$
|
(27,309
|
)
|
|
$
|
(27,731
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Amounts
Recognized in Regulatory Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Consist
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Prior
Service Costs (Credit)
|
|
$
|
1,500
|
|
|
$
|
1,381
|
|
|
$
|
(469
|
)
|
|
$
|
(723
|
)
|
Net
Actuarial Loss
|
|
|
46,564
|
|
|
|
54,393
|
|
|
|
22,463
|
|
|
|
23,599
|
|
|
$
|
48,064
|
|
|
$
|
55,774
|
|
|
$
|
21,994
|
|
|
$
|
22,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Amounts
Recognized in Accumulated Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Comprehensive
Loss Consist of (pre-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Prior
Service Costs (Credit)
|
|
$
|
246
|
|
|
$
|
236
|
|
|
$
|
(306
|
)
|
|
$
|
(400
|
)
|
Net
Actuarial Loss
|
|
|
18,788
|
|
|
|
20,872
|
|
|
|
2,704
|
|
|
|
2,774
|
|
|
$
|
19,034
|
|
|
$
|
21,108
|
|
|
$
|
2,398
|
|
|
$
|
2,374
|
|
|
Pension
Benefits
|
|
Other
Postretirement Benefits
|
|||||||||||||
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
||||
Discount
Rate
|
|
|
6.22
|
%
|
|
|
6.24
|
%
|
|
|
6.22
|
%
|
|
|
6.24
|
%
|
Rate
of Compensation Increase
|
|
|
3.60
|
%
|
|
|
3.60
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
Pension
Benefits
|
|
|
Other
Postretirement Benefits
|
|
||||||||||||||||||
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
||||||
Discount
Rate
|
|
|
6.24
|
%
|
|
|
6.36
|
%
|
|
|
6.04
|
%
|
|
|
6.24
|
%
|
|
|
6.36
|
%
|
|
|
6.04
|
%
|
Expected
Long-Term Return on Plan Assets
|
|
|
8.25
|
%
|
|
|
8.50
|
%
|
|
|
8.75
|
%
|
|
|
6.80
|
%
|
|
|
7.00
|
%
|
|
|
7.25
|
%
|
Rate
of Compensation Increase
|
|
|
3.60
|
%
|
|
|
3.60
|
%
|
|
|
3.60
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2009
|
|
|
2008
|
|
||
Medical
Care and Drug Cost Trend Rate Assumed for Next Year
|
|
|
9.00
|
%
|
|
|
9.00
|
%
|
Dental
Care Cost Trend Rate Assumed for Next Year
|
|
|
4.75
|
%
|
|
|
6.33
|
%
|
Rate
to which Cost Trend Rates are Assumed to Decline (the Ultimate Trend
Rate)
|
|
|
4.75
|
%
|
|
|
5.00
|
%
|
Year
that the Rate Reaches the Ultimate Trend Rate
|
|
2019
|
|
|
2012
|
|
|
|
1-Percentage-Point
Increase
|
|
|
1-Percentage-Point
Decrease
|
|
||
Effect
on the Total of Service and Interest Cost
|
|
$
|
94
|
|
|
(79
|
)
|
|
Effect
on Postretirement Benefit Obligation
|
|
$
|
1,917
|
|
|
(1,722
|
)
|
Asset
Category
|
Total
|
Level
1
|
Level
2
|
Level
3
|
||||||||||||
Cash
/ Cash Equivalents:
|
||||||||||||||||
Common/Collective
Trust Funds (a)
|
$ | 526 | $ | - | $ | 526 | $ | - | ||||||||
STIF-Type
Instrument (b)
|
1,066 | 1,066 | - | |||||||||||||
Equity
securities:
|
||||||||||||||||
Common/Collective
Trust Funds (a)
|
49,487 | - | 49,487 | - | ||||||||||||
U.S.
Large-Cap (c)
|
6,510 | 6,510 | - | - | ||||||||||||
U.S.
Mid-Cap (c)
|
5,224 | 5,224 | - | - | ||||||||||||
U.S.
Small-Cap (c)
|
57 | 57 | - | - | ||||||||||||
International
(c)
|
510 | 510 | - | - | ||||||||||||
Fixed
Income:
|
||||||||||||||||
Common/Collective
Trust Funds (a)
|
22,629 | - | 22,629 | - | ||||||||||||
Guaranteed
Insurance Contract (d)
|
11,677 | - | - | 11,677 | ||||||||||||
Other
types of investments:
|
||||||||||||||||
Hedge
Funds (e)
|
1,101 | - | - | 1,101 | ||||||||||||
Private
Equity Fund (f)
|
2,704 | - | - | 2,704 | ||||||||||||
Real
Estate:
|
||||||||||||||||
Common/Collective
Trust Fund (g)
|
4,407 | - | - | 4,407 | ||||||||||||
Tota
l
|
$ | 105,898 | $ | 12,301 | $ | 73,708 | $ | 19,889 |
|
(a)
|
This
category represents common/collective trust fund investments through a
commingled employee benefit trust (excluding real
estate). These commingled funds are not traded publicly;
however, the underlying assets (stocks and bonds) held in these funds are
traded on active markets and prices for these assets are readily
observable. Holdings in these commingled funds are classified
as Level 2 investments.
|
|
(b)
|
This
category represents short-term investment funds held for the purpose
of funding disbursement payment arrangements. Underlying assets
are valued based on quoted prices in active markets, or where quoted
prices are not available, based on models using observable market
information. Since not all values can be obtained from quoted prices in
active markets, these funds are classified as Level 2
investments.
|
|
(c)
|
This
category of equity investments represents a managed portfolio of common
stock investments in five sectors: telecommunications, electric utilities,
gas utilities, water and energy. These common stocks are
actively traded on exchanges and price quotes for these shares are readily
available. These common stocks are classified as Level 1
investments.
|
|
(d)
|
This
category represents SJI’s Group Annuity contracts with a nationally
recognized life insurance company. The contracts are the assets
of the plan, while the underlying assets of the contracts are owned by the
contract holder. Valuation is based on a formula and
calculation specified within the contract. Since the valuation
is based on the reporting enity
’
s own
assumptions, these contracts are classified as Level 3
investments.
|
|
(e)
|
This
category represents a collection of underlying funds which are all
domiciled outside of the United States. Most of the underlying
fund managers are based in the U.S.; however, they do not necessarily
trade only in U.S. markets. It is important to note that
the SJI Pension Funds are in the process of divesting investments from
this fund of funds. The fair value of these funds is determined
by the underlying fund’s general partner or manager. These funds are
classified as Level 3 investments.
|
|
(f)
|
This
category represents a limited partnership which includes several
investments in U.S. leveraged buyout, venture capital, and special
situation funds. Fund valuations are reported on a 90 day lag
and, therefore, the value reported herein represents the market value as
of September 30, 2009. The fund’s investments are stated at
fair value, which is generally based on the valuations provided by the
general partners or managers of such investments. Fund
investments are illiquid and resale is restricted. These funds
are classified as Level 3
investments.
|
|
(g)
|
This
category represents real estate common/collective trust fund investments
through a commingled employee benefit trust. These commingled
funds are part of a direct investment in a pool of real estate
properties. These funds are valued by investment managers on a
periodic basis using pricing models that use independent appraisals from
sources with professional qualifications. Since these valuation
inputs are not highly observable, the real estate funds are classified as
Level 3 investments.
|
Fair
Value Measurement Using Significant
|
||||||||||||||||||||
Unobservable
Inputs (Level 3)
|
||||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Guaranteed
|
Private
|
|||||||||||||||||||
Insurance
|
Hedge
|
Equity
|
Real
|
|||||||||||||||||
|
Contract
|
Funds
|
Funds
|
Estate
|
Total
|
|||||||||||||||
Balance
at December 31, 2008
|
$ | 12,349 | $ | 3,069 | $ | 2,836 | $ | 6,488 | $ | 24,742 | ||||||||||
Actual
return on plan assets:
|
||||||||||||||||||||
Relating
to assets still held at the reporting date
|
710 | (129 | ) | (275 | ) | (2,081 | ) | (1,775 | ) | |||||||||||
Relating
to assets sold during the period
|
23 | (441 | ) | - | - | (418 | ) | |||||||||||||
Purchases,
Sales and Settlements
|
(1,405 | ) | (1,398 | ) | 143 | - | (2,660 | ) | ||||||||||||
Balance
at December 31, 2009
|
$ | 11,677 | $ | 1,101 | $ | 2,704 | $ | 4,407 | $ | 19,889 |
Asset
Category
|
Total
|
Level
1
|
Level
2
|
Level
3
|
||||||||||||
Equity
Securities:
|
||||||||||||||||
U.S.
Large-Cap
|
$ | 10,295 | $ | 10,295 | $ | - | $ | - | ||||||||
U.S.
Mid & Small-Cap
|
3,563 | 3,563 | - | - | ||||||||||||
International
|
4,277 | 4,277 | - | - | ||||||||||||
Fixed
Income:
|
||||||||||||||||
Corporate
Bonds
|
10,354 | 10,354 | - | - | ||||||||||||
Tota
l
|
$ | 28,489 | $ | 28,489 | $ | - | $ | - |
|
|
Pension
Benefits
|
|
|
Other
Postretirement Benefits
|
|
||
2010
|
|
$
|
7,696
|
|
|
$
|
3,870
|
|
2011
|
|
$
|
7,767
|
|
|
$
|
4.111
|
|
2012
|
|
$
|
7,941
|
|
|
$
|
4,103
|
|
2013
|
|
$
|
8,236
|
|
|
$
|
4,223
|
|
2014
|
|
$
|
8,584
|
|
|
$
|
4,193
|
|
2015
– 2019
|
|
$
|
51,223
|
|
|
$
|
22,327
|
|
12.
|
RETAINED
EARNINGS:
|
13.
|
UNUSED
LINES OF CREDIT:
|
Company
|
|
Total
Facility
|
|
|
Usage
(A)
|
|
|
Available
Liquidity
|
|
Expiration
Date
|
|||
|
|
|
|
|
|
|
|
|
|
||||
SJG:
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving
Credit Facility
|
|
$
|
100,000
|
|
|
$
|
85,000
|
|
|
$
|
15,000
|
|
August
2011
|
Line
of Credit
|
|
|
40,000
|
|
|
|
10,000
|
|
|
|
30,000
|
|
December
2010
|
Uncommitted
Bank Lines
|
|
|
55,000
|
|
|
|
14,400
|
|
|
|
40,600
|
|
Various
|
|
|
|
|
|
|
|
|
|
|
||||
Total
SJG
|
|
|
195,000
|
|
|
|
109,400
|
|
|
|
85,600
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
SJI:
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||
Revolving
Credit Facility
|
|
$
|
200,000
|
|
|
$
|
162,000
|
|
|
$
|
38,000
|
|
August
2011
|
Uncommitted
Bank Lines
|
|
|
30,000
|
|
|
|
9,300
|
|
|
|
20,700
|
|
Various
|
|
|
|
|
|
|
|
|
|
|
||||
Total
SJI
|
|
|
230,000
|
|
|
|
171,300
|
|
|
|
58,700
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total
|
|
$
|
425,000
|
|
|
$
|
280,700
|
|
|
$
|
144,300
|
|
|
(A)
|
Includes
letters of credit in the amount of $82.0 million under the SJI revolving
credit facility and $2.1 million under the SJI uncommitted bank
lines.
|
14.
|
COMMITMENTS
AND CONTINGENCIES:
|
·
|
In
April 2007, SJI guaranteed certain obligations of LVE Energy Partners, LLC
(LVE), an unconsolidated joint venture in which Marina has a 50% equity
interest. LVE entered into a 25-year contract with a resort
developer to design, build, own and operate a district energy system and
central energy center for a planned resort in Las Vegas,
Nevada. LVE began construction of the facility in 2007 and
expected to provide full energy services in 2010 when the resort was
originally scheduled to be completed. LVE suspended construction of the
district energy system and central energy center in January 2009 after the
resort developer’s August 2008 announcement that it was delaying the
completion of construction of the resort due to the difficult environment
in the capital markets and weak economic conditions. The resort
developer had indicated that it was considering different strategies to
move its project forward, including opening its project in phases and
obtaining a partner, but that it was unlikely construction would resume
during 2009. In October 2009, the resort developer announced that they do
not expect to resume construction on the project for three to five years.
They stated that they remain committed to having a significant presence on
the Las Vegas Strip as part of a long-term growth strategy and continue to
view this site as a major strategic
asset.
|
·
|
In
August 2007, SJI guaranteed certain obligations of BC Landfill Energy, LLC
(BCLE), an unconsolidated joint venture in which Marina has a 50% equity
interest. BCLE has entered into a 20-year agreement with a county
government to lease and operate a facility that will produce electricity
from landfill methane gas. The facility went online in the fourth quarter
of 2007. Although unlikely, the maximum amount that SJI could be obligated
for, in the event that BCLE does not meet minimum specified levels of
operating performance and no mitigating action is taken, or is unable to
meet certain financial obligations as they become due, is approximately
$4.0 million each year. SJI and its partner in this joint
venture have entered into reimbursement agreements that secure
reimbursement for SJI of a proportionate share of any payments made by SJI
on these guarantees.
|
|
|
2009
|
|
|
2008
|
|
||
Beginning
of Year
|
|
$
|
68,165
|
|
|
$
|
77,905
|
|
Accruals
|
|
|
16,975
|
|
|
|
18,649
|
|
Expenditures
|
|
|
(11,698
|
)
|
|
|
(28,389
|
)
|
End
of Year
|
|
$
|
73,442
|
|
|
$
|
68,165
|
|
15.
|
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.
|
|
|
Total
|
|
|
Level
1
|
|
|
Level
2
|
|
|
Level
3
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-Sale
Securities (A)
|
|
$
|
5,958
|
|
|
$
|
5,958
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Derivatives
– Energy Related Assets (B)
|
|
|
48,097
|
|
|
|
23,933
|
|
|
|
23,295
|
|
|
|
869
|
|
|
$
|
54,055
|
|
|
$
|
29,891
|
|
|
$
|
23,295
|
|
|
$
|
869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Derivatives
– Energy Related Liabilities (B)
|
|
$
|
39,191
|
|
|
$
|
18,382
|
|
|
$
|
9,641
|
|
|
$
|
11,168
|
|
Derivatives
– Other (C)
|
|
|
5,823
|
|
|
|
-
|
|
|
|
5,823
|
|
|
|
-
|
|
|
|
$
|
45,014
|
|
|
$
|
18,382
|
|
|
$
|
15,464
|
|
|
$
|
11,168
|
|
Balance
at January 1, 2009
|
|
$
|
101
|
|
Purchases,
Sales, Issuances, Settlements, net
|
(543
|
)
|
||
Total
gains (realized/unrealized) included in earnings
|
|
|
(9,857
|
)
|
Transfers
in and/or out of Level 3, net
|
-
|
|||
Balance
at December 31, 2009
|
|
$
|
(10,299
|
)
|
16.
|
AVAILABLE–FOR–SALE
SECURITIES:
|
|
Less
than 12 Months
|
Greater
Than 12 Months
|
Total
|
|||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
Marketable
Equity Securities
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
2009
|
$ | - | $ | - | $ | 4,493 | $ | 534 | $ | 4,493 | $ | 534 | ||||||||||||
2008
|
$ | 3,609 | $ | 1,218 | $ | - | $ | - | $ | 3,609 | $ | 1,218 |
2009
Quarter Ended
|
2008
Quarter Ended
|
|||||||||||||||||||||||||||||||
March 31
|
June 30
|
Sept. 30
|
Dec. 31
|
March 31
|
June 30
|
Sept. 30
|
Dec. 31
|
|||||||||||||||||||||||||
Operating
Revenues
|
$ | 362,176 | $ | 134,483 | $ | 127,087 | $ | 221,698 | $ | 348,047 | $ | 135,840 | $ | 210,413 | $ | 267,677 | ||||||||||||||||
Expenses:
|
||||||||||||||||||||||||||||||||
Cost
of Sales - (Excluding depreciation)
|
265,508 | 90,632 | 95,128 | 142,120 | 266,756 | 123,730 | 102,259 | 186,697 | ||||||||||||||||||||||||
Operations
and Maintenance Including Fixed Charges
|
37,621 | 35,524 | 35,523 | 39,539 | 35,047 | 33,248 | 32,926 | 41,360 | ||||||||||||||||||||||||
Income
Taxes
|
20,218 | 3,056 | (3,206 | ) | 14,234 | 17,164 | (9,286 | ) | 30,367 | 13,703 | ||||||||||||||||||||||
Energy
and Other Taxes
|
5,167 | 1,667 | 1,649 | 3,248 | 4,866 | 2,116 | 1,646 | 3,493 | ||||||||||||||||||||||||
Total
Expenses
|
328,514 | 130,879 | 129,094 | 199,141 | 323,833 | 149,808 | 167,198 | 245,253 | ||||||||||||||||||||||||
Other
Income and Expense
|
(1,974 | ) | 1,385 | (20 | ) | 1,094 | 497 | 582 | 584 | (597 | ) | |||||||||||||||||||||
Income
(Loss) from Continuing Operations
|
31,688 | 4,989 | (2,027 | ) | 23,651 | 24,711 | (13,386 | ) | 43,799 | 21,827 | ||||||||||||||||||||||
Loss
from Discontinued Operations - (Net of tax
benefit)
|
(19 | ) | (23 | ) | (16 | ) | (369 | ) | (24 | ) | (1 | ) | (76 | ) | (146 | ) | ||||||||||||||||
Net
Income (Loss)
|
31,669 | 4,966 | (2,043 | ) | 23,282 | 24,687 | (13,387 | ) | 43,723 | 21,681 | ||||||||||||||||||||||
Less:
Net (Income) Loss Attributable to Noncontrolling Interest in
Subsidiaries
|
(66 | ) | 42 | 169 | 86 | 1 | 105 | 59 | 62 | |||||||||||||||||||||||
Net
Income (Loss) - Attributable to South Jersey Industries, Inc.
Shareholders
|
$ | 31,603 | $ | 5,008 | $ | (1,874 | ) | $ | 23,368 | $ | 24,688 | $ | (13,282 | ) | $ | 43,782 | $ | 21,743 | ||||||||||||||
Amounts
Attributable to South Jersey Industries, Inc. Shareholders
|
||||||||||||||||||||||||||||||||
Income
(Loss) from Continuing Operations
|
$ | 31,622 | $ | 5,031 | $ | (1,858 | ) | $ | 23,737 | $ | 24,712 | $ | (13,281 | ) | $ | 43,858 | $ | 21,889 | ||||||||||||||
Loss
from Discontinued Operations - (Net of tax
benefit)
|
(19 | ) | (23 | ) | (16 | ) | (369 | ) | (24 | ) | (1 | ) | (76 | ) | (146 | ) | ||||||||||||||||
Net
Income (Loss) - Attributable to South Jersey Industries, Inc.
Shareholders
|
$ | 31,603 | $ | 5,008 | $ | (1,874 | ) | $ | 23,368 | $ | 24,688 | $ | (13,282 | ) | $ | 43,782 | $ | 21,743 | ||||||||||||||
Basic
Earnings Per Common Share Attributable to South Jersey Industries, Inc.
Shareholders:
|
||||||||||||||||||||||||||||||||
Continuing
Operations
|
$ | 1.06 | $ | 0.17 | $ | (0.06 | ) | $ | 0.80 | $ | 0.83 | $ | (0.45 | ) | $ | 1.48 | $ | 0.74 | ||||||||||||||
Discontinued
Operations
|
(0.00 | ) | (0.00 | ) | (0.00 | ) | (0.02 | ) | (0.00 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | ||||||||||||||||
Basic
Earnings Per Common Share
|
$ | 1.06 | $ | 0.17 | $ | (0.06 | ) | $ | 0.78 | $ | 0.83 | $ | (0.45 | ) | $ | 1.47 | $ | 0.73 | ||||||||||||||
Average
Shares of Common Stock Outstanding - Basic
|
29,752 | 29,796 | 29,796 | 29,796 | 29,640 | 29,728 | 29,729 | 29,729 | ||||||||||||||||||||||||
Diluted
Earnings Per Common Share Attributable to South Jersey Industries, Inc.
Shareholders:
|
||||||||||||||||||||||||||||||||
Continuing
Operations
|
$ | 1.06 | $ | 0.17 | $ | (0.06 | ) | $ | 0.79 | $ | 0.83 | $ | (0.45 | ) | $ | 1.47 | $ | 0.73 | ||||||||||||||
Discontinued
Operations
|
(0.00 | ) | (0.00 | ) | (0.00 | ) | (0.01 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) | ||||||||||||||||
Diluted
Earnings Per Common Share
|
$ | 1.06 | $ | 0.17 | $ | (0.06 | ) | $ | 0.78 | $ | 0.83 | $ | (0.45 | ) | $ | 1.47 | $ | 0.73 | ||||||||||||||
Average
Shares of Common Stock Outstanding - Diluted
|
29,851 | 29,902 | 29,796 | 29,916 | 29,764 | 29,728 | 29,865 | 29,886 |
NOTE:
|
Because
of the seasonal nature of the business and the volatility from energy
related derivatives, statements for the 3-month periods are not indicative
of the results for a full
year.
|
(a)
|
Listed
below are all financial statements and schedules filed as part of this
report:
|
(b)
|
List
of Exhibits (Exhibit Number is in Accordance with the Exhibit Table in
Item 601 of Regulation S-K).
|
Exhibit
Number
|
Description
|
Reference
|
|
(3)(a)(i)
|
Certificate
of Incorporation of South Jersey Industries, Inc., as amended through
April 19, 1984.
|
Incorporated
by reference from Exhibit (4)(a) of Form S-2 (2-91515).
|
|
(3)(a)(ii)
|
Amendment
to Certificate of Incorporation relating to two-for-one stock split
effective as of April 28, 1987.
|
Incorporated
by reference from Exhibit (4)(e)(1) of Form S-3
(33-1320).
|
|
(3)(a)(iii)
|
Amendment
to Certificate of Incorporation relating to director and officer
liability.
|
Incorporated
by reference from Exhibit (4)(e)(2) of Form S-3
(33-1320).
|
|
(3)(a)(iv)
|
Amendment
to Certificate of Incorporation relating to two-for-one stock split
effective as of June 30, 2005.
|
Incorporated
by reference from Exhibit 3 of Form 10-Q of SJI filed on May 10,
2005.
|
|
(3)(a)(v)
|
Amendment
to Certificate of Incorporation as of April 23, 2009 establishing the
annual election of the South Jersey Industries, Inc.
directors
|
Incorporated
by reference from Exhibit 99.2 of Form 8-K filed on April 28,
2009.
|
|
Bylaws
of South Jersey Industries, Inc. as amended and restated through April 23,
2009. (filed herewith)
|
|||
(4)(a)
|
Form
of Stock Certificate for common stock.
|
Incorporated
by reference from Exhibit (4)(a) of Form 10-K for 1985
(1-6364).
|
|
(4)(b)(i)
|
First
Mortgage Indenture dated October 1, 1947.
|
Incorporated
by reference from Exhibit (4)(b)(i) of Form 10-K for 1987
(1-6364).
|
|
(4)(b)(ii)
|
Nineteenth
Supplemental Indenture dated as of April 1, 1992.
|
Incorporated
by reference from Exhibit (4)(b)(xvii) of Form 10-K for 1992
(1-6364).
|
|
(4)(b)(iii)
|
Twenty-First
Supplemental Indenture dated as of March 1, 1997.
|
Incorporated
by reference from Exhibit (4)(b)(xviv) of Form 10-K for
1997(1-6364).
|
|
(4)(b)(iv)
|
Twenty-Second
Supplemental Indenture dated as of October 1, 1998.
|
Incorporated
by reference from Exhibit (4)(b)(ix) of Form S-3
(333-62019).
|
|
(4)(b)(v)
|
Twenty-Third
Supplemental Indenture dated as of September 1, 2002.
|
Incorporated
by reference from Exhibit (4)(b)(x) of Form S-3
(333-98411).
|
|
(4)(b)(vi)
|
Twenty-Fourth
Supplemental Indenture dated as of September 1, 2005.
|
Incorporated
by reference from Exhibit (4)(b)(vi) of Form S-3
(333-126822).
|
|
(4)(b)(vii)
|
Amendment
to Twenty-Fourth Supplemental Indenture dated as of March 31,
2006
|
Incorporated
by reference from Exhibit 4 of Form 8-K of SJG as filed April 26,
2006.
|
|
(4)(b)(viii)
|
Loan
Agreement by and between New Jersey Economic Development Authority and SJG
dated April 1, 2006.
|
Incorporated
by reference from Exhibit 10 of Form 8-K of SJG as filed April 26,
2006.
|
|
(4)(c)(i)
|
Medium
Term Note Indenture of Trust dated October 1, 1998.
|
Incorporated
by reference from Exhibit 4(e) of Form S-3 (333-62019).
|
|
(4)(c)(ii)
|
First
Supplement to Indenture of Trust dated as of June 29,
2000.
|
Incorporated
by reference from Exhibit 4.1 of Form 8-K of SJG dated July 12,
2001.
|
|
(4)(c)(iii)
|
Second
Supplement to Indenture of Trust dated as of July 5, 2000.
|
Incorporated
by reference from Exhibit 4.2 of Form 8-K of SJG dated July 12,
2001.
|
|
(4)(c)(iv)
|
Third
Supplement to Indenture of Trust dated as of July 9, 2001.
|
Incorporated
by reference from Exhibit 4.3 of Form 8-K of SJG dated July 12,
2001.
|
|
(10)(a)(i)
|
Gas
storage agreement (GSS) between South Jersey Gas Company and Transco dated
October 1, 1993.
|
Incorporated
by reference from Exhibit (10)(d) of Form 10-K for 1993
(1-6364).
|
Exhibit
Number
|
Description
|
Reference
|
|
(10)(a)(ii)
|
Gas
storage agreement (LG-A) between South Jersey Gas Company and Transco
dated June 3, 1974.
|
Incorporated
by reference from Exhibit (5)(f) of Form S-7 (2-56223).
|
|
(10)(a)(iii)
|
Gas
storage agreement (WSS) between South Jersey Resources Group LLC and
Transco dated May 1, 2006.
|
Incorporated
by reference from Exhibit (10)(a)(iii) of Form 10-K for
2008.
|
|
(10)(a)(iv)
|
Gas
storage agreement (LSS) between South Jersey Gas Company and Transco dated
October 1, 1993.
|
Incorporated
by reference from Exhibit (10)(i) of Form 10-K for 1993
(1-6364).
|
|
(10)(a)(v)
|
Gas
storage agreement (SS-1) between South Jersey Gas Company and Transco
dated May 10, 1987 (effective April 1, 1988).
|
Incorporated
by reference from Exhibit (10)(i)(a) of Form 10-K for 1988
(1-6364).
|
|
(10)(b)(i)
|
Gas
storage agreement (SS-2) between South Jersey Gas Company and Transco
dated July 25, 1990.
|
Incorporated
by reference from Exhibit (10)(i)(i) of Form 10-K for 1991
(1-6364).
|
|
(10)(b)(ii)
|
Amendment
to gas transportation agreement dated December 20, 1991 between South
Jersey Gas Company and Transco dated October 5, 1993.
|
Incorporated
by reference from Exhibit (10)(i)(k) of Form 10-K for 1993
(1-6364).
|
|
(10)(b)(iii)
|
CNJEP
Service agreement between South Jersey Gas Company and Transco dated June
27, 2005.
|
Incorporated
by reference frm Exhibit (10)(i)(l) of Form 10-K for
2005 (1-6364).
|
|
(10)(c)(i)
|
FTS
Service Agreement No. 38099 between South Jersey Gas Company and Columbia
Gas Transmission Corporation dated November 1, 1993.
|
Incorporated
by reference from Exhibit (10)(k)(n) of Form 10-K for 1993
(1-6364).
|
|
(10)(c)(ii)
|
NTS
Service Agreement No. 39305 between South Jersey Gas Company and Columbia
Gas Transmission Corporation dated November 1, 1993.
|
Incorporated
by reference from Exhibit (10)(k)(o) of Form 10-K for 1993
(1-6364).
|
|
(10)(c)(iii)
|
FSS
Service Agreement No. 38130 between South Jersey Gas Company and Columbia
Gas Transmission Corporation dated November 1, 1993.
|
Incorporated
by reference from Exhibit (10)(k)(p) of Form 10-K for 1993
(1-6364).
|
Exhibit
Number
|
Description
|
Reference
|
|
(10)(d)(i)
|
SST
Service Agreement No. 38086 between South Jersey Gas Company and Columbia
Gas Transmission Corporation dated November 1, 1993.
|
Incorporated
by reference from Exhibit (10)(k)(q) of Form 10-K for 1993
(1-6364).
|
|
(10)(e)(i)*
|
Deferred
Payment Plan for Directors of South Jersey Industries, Inc., South Jersey
Gas Company, Energy & Minerals, Inc., R&T Group, Inc. and South
Jersey Energy Company as amended and restated October 21,
1994.
|
Incorporated
by reference from Exhibit (10)(l) of Form 10-K for 1994
(1-6364).
|
|
(10)(e)(ii)*
|
Schedule
of Deferred Compensation Agreements.
|
Incorporated
by reference from Exhibit (10)(l)(b) of Form 10-K for 1997
(1-6364).
|
|
(10)(e)(iii)*
|
Form
of Officer Employment Agreement between certain officers and either South
Jersey Industries, Inc. or its subsidiaries.
|
Incorporated
by reference from Exhibit 10(e)(iii) of Form 10-K for
2008.
|
|
(10)(e)(iv)*
|
Schedule
of Officer Employment Agreements.
|
Incorporated
by reference from Exhibit 10(e)(iv) of Form 10-K for
2008.
|
|
(10)(f)(i)*
|
Officer
Severance Benefit Program for all Officers.
|
Incorporated
by reference from Exhibit (10)(l)(g) of Form 10-K for 1985
(1-6364).
|
|
Supplemental
Executive Retirement Program, as amended and restated effective January 1,
2009 and Form of Agreement between certain SJI or subsidiary officers.
(filed herewith)
|
|||
(10)(f)(iii)*
|
South
Jersey Industries, Inc. 1997 Stock-Based Compensation Plan (As Amended and
Restated Effective January 26, 2005).
|
Incorporated
by reference from Exhibit 10 of Form 10-Q of SJI as filed May 10,
2005.
|
|
(10)(g)(i)
|
Five-year
Revolving Credit Agreement for SJI.
|
Incorporated
by reference from Exhibit 10 of Form 8-K of SJI as filed August 25,
2006.
|
|
(10)(g)(ii)
|
Five-year
Revolving Credit Agreement for SJG.
|
Incorporated
by reference from Exhibit 10 of Form 8-K of SJG as filed on August 8,
2006.
|
|
(10)(g)(iii)
|
Letter
of Credit Reimbursement Agreement dated December 20, 2007.
|
Incorporated
by reference from Exhibit 10 (g) (iii) of Form 10-K for
2007.
|
|
(10)(g)(iv)
|
Loan
Agreement between Toronto Dominion (New York) LLC and SJG dated December
15, 2008.
|
Incorporated
by reference from Exhibit (10)(g)(iv) of Form 10-K for
2008.
|
|
Amendment
No. 1 dated December 14, 2009 to the Loan Agreement between Toronto
Dominion (New York) LLC and SJG. (filed herewith)
|
|||
Calculation
of Ratio of Earnings to Fixed Charges (Before Federal Income Taxes) (filed
herewith).
|
|||
(14)
|
Code
of Ethics.
|
Incorporated
by reference from Exhibit 14 of Form 10-K for 2007.
|
|
Subsidiaries
of the Registrant (filed herewith).
|
|||
Independent
Registered Public Accounting Firm’s Consent (filed
herewith).
|
|||
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (filed herewith).
|
|||
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (filed herewith).
|
|||
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (filed herewith).
|
|||
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (filed herewith).
|
SOUTH
JERSEY INDUSTRIES, INC.
|
|||
BY:
|
/s/ David A. Kindlick
|
||
David
A. Kindlick
|
|||
Vice
President & Chief Financial Officer
|
|||
Date:
February 26,
2010
|
Signature
|
Title
|
Date
|
||
|
|
|
||
|
|
|
||
/s/
Edward J. Graham
|
President,
Chairman of the Board & Chief Executive Officer
|
February
26, 2010
|
||
(Edward
J. Graham)
|
(Principal
Executive Officer)
|
|
||
|
|
|
||
|
|
|
||
/s/
David A. Kindlick
|
Vice
President & Chief Financial Officer
|
February
26, 2010
|
||
(David
A. Kindlick)
|
(Principal
Financial and Accounting Officer)
|
|
||
|
|
|
||
|
|
|
||
/s/
Gina Merritt-Epps
|
Corporate Counsel
&
|
February
26, 2010
|
||
(Gina
Merritt-Epps)
|
Secretary
|
|
||
|
|
|
||
|
|
|
||
/s/
Shirli M. Billings
|
Director
|
February
26, 2010
|
||
(Shirli
M. Billings)
|
|
|
||
|
|
|
||
|
|
|
||
/s/
Helen R. Bosley
|
Director
|
February
26, 2010
|
||
(Helen
R. Bosley)
|
|
|
||
|
|
|
||
|
|
|
||
/s/
Thomas A. Bracken
|
Director
|
February
26, 2010
|
||
(Thomas
A. Bracken)
|
|
|
||
|
|
|
||
|
|
|
||
/s/
Keith S. Campbell
|
Director
|
February
26, 2010
|
||
(Keith
S. Campbell)
|
|
|
||
|
|
|
||
|
|
|
||
/s/
W. Cary Edwards
|
Director
|
February
26, 2010
|
||
(W.
Cary Edwards)
|
|
|
||
|
|
|
||
|
|
|
||
/s/
Sheila Hartnett-Devlin
|
Director
|
February
26, 2010
|
||
(Sheila
Hartnett-Develin)
|
|
|
||
|
|
|
||
|
|
|
||
/s/
Walter M. Higgins, III
|
Director
|
February
26, 2010
|
||
(Walter
M. Higgins, III)
|
|
|
||
|
|
|
||
|
|
|
||
/s/
William J. Hughes
|
Director
|
February
26, 2010
|
||
(William
J. Hughes)
|
|
|
||
|
|
|
||
|
|
|
||
/s/
Herman D. James
|
Director
|
February
26, 2010
|
||
(Herman
D. James)
|
|
|
||
|
|
|
||
|
|
|
||
/s/
Joseph H. Petrowski
|
Director
|
February
26, 2010
|
||
(Joseph
H. Petrowski)
|
|
|
||
|
|
|
||
|
|
|
SC
HEDULE I - SOUTH JERSEY INDUSTRIES,
INC.
|
|
|||||||||||
STATEMENTS
OF INCOME
|
||||||||||||
(In
Thousands)
|
||||||||||||
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Operating
Revenues
|
|
$
|
10,238
|
|
|
$
|
9,176
|
|
|
$
|
7,045
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations
|
|
|
9,005
|
|
|
|
7,945
|
|
|
|
6,120
|
|
Depreciation
|
|
|
135
|
|
|
|
139
|
|
|
|
106
|
|
Energy
and Other Taxes
|
|
|
258
|
|
|
|
243
|
|
|
|
175
|
|
Total
Operating Expenses
|
|
|
9,398
|
|
|
|
8,327
|
|
|
|
6,401
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Operating
Income
|
|
|
840
|
|
|
|
849
|
|
|
|
644
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Other
Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in Earnings of Subsidiaries
|
|
|
58,531
|
|
|
|
77,178
|
|
|
|
62,659
|
|
Other
|
|
|
(22
|
)
|
|
|
835
|
|
|
|
3,076
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Total
Other Income
|
|
|
58,509
|
|
|
|
78,013
|
|
|
|
65,735
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest
Charges
|
|
|
775
|
|
|
|
1,698
|
|
|
|
3,762
|
|
Income
Taxes
|
|
|
42
|
|
|
(14
|
)
|
|
|
(42
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Income
from Continuing Operations
|
|
|
58,532
|
|
|
|
77,178
|
|
|
|
62,659
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity
in Undistributed Earnings of Discontinued Subsidiaries
|
|
|
(427
|
)
|
|
|
(247
|
)
|
|
|
(391
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||
Net
Income
|
|
$
|
58,105
|
|
|
$
|
76,931
|
|
|
$
|
62,268
|
|
SCHEDULE
I - SOUTH JERSEY INDUSTRIES, INC.
|
||||||||||||
STATEMENTS
OF COMPREHENSIVE INCOME
|
||||||||||||
(In
Thousands)
|
||||||||||||
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$
|
58,105
|
|
|
$
|
76,931
|
|
|
$
|
62,268
|
|
Other
Comprehensive Income (Loss) – Net of Tax*
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement
Liability Adjustment
|
|
|
1,208
|
|
|
(6,877
|
)
|
|
|
(199
|
)
|
|
Unrealized
Gain (Loss) on Available-for-Sale Securities
|
|
|
533
|
|
|
(730
|
)
|
|
|
(195
|
)
|
|
Unrealized
Gain (Loss) on Derivatives
|
|
|
2,989
|
|
|
(6,277
|
)
|
|
|
(2,528
|
)
|
|
Total
Other Comprehensive Income (Loss) – Net of Tax*
|
|
|
4,730
|
|
|
(13,884
|
)
|
|
|
(2,524
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Comprehensive
Income
|
|
$
|
62,835
|
|
|
$
|
63,047
|
|
|
$
|
59,744
|
|
SCHEDULE
I - SOUTH JERSEY INDUSTRIES, INC.
|
||||||||||||
STATEMENTS
OF RETAINED EARNINGS
|
||||||||||||
(In
Thousands)
|
||||||||||||
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained
Earnings - Beginning
|
|
$
|
249,973
|
|
|
$
|
206,123
|
|
|
$
|
174,407
|
|
Cumulative
Effect Adjustment
|
|
|
-
|
|
|
|
-
|
|
|
(771
|
)
|
|
Retained
Earnings – Beginning, as adjusted
|
|
|
249,973
|
|
|
|
206,123
|
|
|
|
173,636
|
|
Net
Income
|
|
|
58,105
|
|
|
|
76,931
|
|
|
|
62,268
|
|
|
|
|
308,078
|
|
|
|
283,054
|
|
|
|
235,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
Declared - Common Stock
|
|
|
(36,573
|
)
|
|
|
(33,081
|
)
|
|
|
(29,781
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained
Earnings - Ending
|
|
$
|
271,505
|
|
|
$
|
249,973
|
|
|
$
|
206,123
|
|
|
|
|
|
|
|
|
|
|
|
|||
SCHEDULE
I - SOUTH JERSEY INDUSTRIES, INC.
|
|
|||||||||||
STATEMENTS
OF CASH FLOWS
|
|
|||||||||||
FOR
THE TWELVE MONTHS ENDED DECEMBER 31,
|
|
|||||||||||
(In
Thousands)
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
CASH
PROVIDED BY OPERATING ACTIVITIES
|
|
$
|
13,650
|
|
|
$
|
15,454
|
|
|
$
|
20,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Repayment from (Advances to) Associated
Companies
|
|
|
39,030
|
|
|
(40,695
|
)
|
|
|
57,107
|
||
Capital
Expenditures
|
|
|
(53
|
)
|
|
|
(23
|
)
|
|
|
(50
|
)
|
Purchase
of Company Owned Life Insurance
|
|
|
(4,444
|
)
|
|
|
(4,287
|
)
|
|
|
(3,917
|
)
|
Other
|
|
|
-
|
|
|
|
365
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by (Used In) Investing Activities
|
|
|
34,533
|
|
|
(44,640
|
)
|
|
|
53,140
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Borrowings from Associated Companies
|
|
|
-
|
|
|
|
-
|
|
|
|
1,419
|
|
Net
(Repayments from) Borrowings Lines of Credits
|
|
|
(10,800
|
)
|
|
|
58,050
|
|
|
|
(51,150
|
)
|
Dividends
on Common Stock
|
|
|
(36,426
|
)
|
|
|
(32,914
|
)
|
|
|
(29,656
|
)
|
Proceeds
from Sale of Common Stock
|
|
|
-
|
|
|
|
2,076
|
|
|
|
7,484
|
|
Other
|
|
|
-
|
|
|
|
329
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used in) Provided by Financing Activities
|
|
|
(47,226
|
)
|
|
|
27,541
|
|
|
(71,903
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
|
|
|
957
|
|
|
(1,645
|
)
|
|
|
1,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
|
|
662
|
|
|
|
2,307
|
|
|
|
453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS AT END OF YEAR
|
|
$
|
1,619
|
|
|
$
|
662
|
|
|
$
|
2,307
|
|
SCHEDULE
I - SOUTH JERSEY INDUSTRIES, INC.
|
|
|||||||
BALANCE
SHEETS
|
|
|||||||
(In
Thousands)
|
|
|||||||
|
|
2009
|
|
|
2008
|
|
||
Assets
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
Property
Plant and Equipment:
|
|
|
|
|
|
|
||
Nonutility
Property, Plant and Equipment, at cost
|
|
$
|
825
|
|
|
$
|
825
|
|
Accumulated
Depreciation
|
|
|
(595
|
)
|
|
|
(486
|
)
|
|
|
|
|
|
|
|
||
Property,
Plant and Equipment - Net
|
|
|
230
|
|
|
|
339
|
|
|
|
|
|
|
|
|
||
Investments:
|
|
|
|
|
|
|
|
|
Investments
in Subsidiaries
|
|
|
590,602
|
|
|
|
539,551
|
|
Available-for-Sale
Securities
|
|
|
17
|
|
|
|
18
|
|
|
|
|
|
|
|
|
||
Total
Investments
|
|
|
590,619
|
|
|
|
539,569
|
|
|
|
|
|
|
|
|
||
Current
Assets:
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
|
1,619
|
|
|
|
662
|
|
Receivable
from Associated Companies
|
|
|
30,314
|
|
|
|
70,177
|
|
Accounts
Receivable
|
|
|
48
|
|
|
|
21
|
|
Other
|
|
|
475
|
|
|
|
908
|
|
|
|
|
|
|
|
|
||
Total
Current Assets
|
|
|
32,456
|
|
|
|
71,768
|
|
|
|
|
|
|
|
|
||
Other
Noncurrent Assets
|
|
|
14,076
|
|
|
|
10,778
|
|
|
|
|
|
|
|
|
||
Total
Assets
|
|
$
|
637,381
|
|
|
$
|
622,454
|
|
|
|
|
|
|
|
|
|
|
Capitalization and
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common
Stock SJI
|
|
|
|
|
|
|
|
|
Par
Value $1.25 a share
|
|
|
|
|
|
|
|
|
Authorized
- 60,000,000 shares
|
|
|
|
|
|
|
|
|
Outstanding
– 29,728,697 shares and 29,607,802
|
|
$
|
37,245
|
|
|
$
|
37,161
|
|
Premium
on Common Stock
|
|
|
254,503
|
|
|
|
252,495
|
|
Treasury
Stock (at par)
|
|
|
(183
|
)
|
|
|
(176
|
)
|
Accumulated
Other Comprehensive Loss
|
|
|
(19,469
|
)
|
|
|
(24,199
|
)
|
Retained
Earnings
|
|
|
271,505
|
|
|
|
249,973
|
|
|
|
|
|
|
|
|
||
Total
Equity
|
|
|
543,601
|
|
|
|
515,254
|
|
|
|
|
|
|
|
|
||
Current
Liabilities:
|
|
|
|
|
|
|
|
|
Notes
Payable - Banks
|
|
|
87,200
|
|
|
|
98,000
|
|
Payable
to Associated Companies
|
|
|
285
|
|
|
|
1,118
|
|
Accounts
Payable
|
|
|
216
|
|
|
|
239
|
|
Other
Current Liabilities
|
|
|
2,118
|
|
|
|
1,444
|
|
|
|
|
|
|
|
|
||
Total
Current Liabilities
|
|
|
89,819
|
|
|
|
100,801
|
|
|
|
|
|
|
|
|
||
Other
Noncurrent Liabilities
|
|
|
3,961
|
|
|
|
6,399
|
|
|
|
|
|
|
|
|
||
Total
Capitalization and Liabilities
|
|
$
|
637,381
|
|
|
$
|
622,454
|
|
SOUTH
JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
|
|
|||||||||||||||||||
SCHEDULE
II - VALUATION AND QUALIFYING ACCOUNTS
|
|
|||||||||||||||||||
(In
Thousands)
|
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Col.
A
|
|
Col.
B
|
|
Col.
C
|
|
|
Col.
D
|
|
|
Col.
E
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
Additions
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Classification
|
|
Balance
at Beginning of Period
|
|
|
Charged
to Costs and Expenses
|
|
|
Charged
to Other Accounts - Describe (a)
|
|
|
Deductions
- Describe (b)
|
|
|
Balance
at End of Period
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Provision
for Uncollectible
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts
for the Year Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
December
31, 2009
|
|
$
|
5,757
|
|
|
$
|
2,728
|
|
|
$
|
595
|
|
$
|
2,812
|
|
|
$
|
6,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for Uncollectible
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
for the Year Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2008
|
|
$
|
5,491
|
|
|
$
|
2,332
|
|
|
$
|
279
|
|
|
$
|
2,345
|
|
|
$
|
5,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for Uncollectible
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
for the Year Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2007
|
|
$
|
5,224
|
|
|
$
|
2,603
|
|
|
$
|
725
|
|
|
$
|
3,061
|
|
|
$
|
5,491
|
|
AMENDMENTS
|
||||
Article
I
|
Section
1.2
|
Amended
March 19, 1970
|
||
Article
I
|
Section
1.2
|
Amended
April 16, 1970
|
||
Article
II
|
Section
2.1
|
Amended
February l8, 1971
|
||
Article
II
|
Section
2.1
|
Amended
June 22, 1972
|
||
Article
II
|
Section
2.1
|
Amended
August 23, 1973
|
||
Article
II
|
Section
2.1
|
Amended
February 20, 1975
|
||
Article
II
|
Section
2.1
|
Amended
February 19, 1976
|
||
Article
II
|
Section
2.1
|
Amended
February 17, 1977
|
||
Article
II
|
Section
2.1
|
Amended
February 16, 1978
|
||
Article
II
|
Section
2.1
|
Amended
February 15, 1979
|
||
Article
II
|
Section
2.1
|
Amended
August 23, 1979
|
||
Article
I
|
Section
1.3
|
Amended
November 16, 1979
|
||
Article
I
|
Section
1.4
|
Amended
November 16, 1979
|
||
Article
II
|
Section
2.2 (c)
|
Amended
November 16, 1979
|
||
Article
II
|
Section
2.4
|
Amended
November 16, 1979
|
||
Article
III
|
Section
3.1
|
Amended
November 16, 1979
|
||
Article
III
|
Section
3.2
|
Amended
November 16, 1979
|
||
Article
III
|
Section
3.3
|
Amended
November 16, 1979
|
||
Article
III
|
Section
3.4
|
Amended
November 16, 1979
|
||
Article
V
|
Section
5.1
|
Amended
November 16, 1979
|
||
Article
II
|
Section
2.4
|
Amended
October 24, 1980
|
||
Article
II
|
Section
2.1
|
Amended
April 22, 1981 (Special Mtg.)
|
||
Article
II
|
Section
2.1
|
Amended
October 23, 1981
|
||
Article
III
|
Section
3.1, 3.2, and 3.3
|
Amended
October 23, 1981
|
||
Article
II
|
Section
2.1, 2.3
|
Amended
January 21, 1983
|
||
Article
II
|
Section
2.5
|
Amended
by including new section Jan. 21, 1983
|
||
Article
IV
|
Section
6.2
|
Amended
January 21, 1983
|
||
Article
II
|
Section
2.1
|
Amended
January 24, 1986
|
||
Article
I
|
Section
1.3
|
Amended
April 18, 1989, eff. April 19, 1989 (Spl.Mtg.)
|
||
Article
I
|
Section
1.4
|
Amended
April 18, 1989, eff. April 19, 1989 (Spl.Mtg.)
|
||
Article
II
|
Section
2.1
|
Amended
April 18, 1989, eff. April 19, 1989 (Spl.Mtg.)
|
||
Article
II
|
Section
2.2
|
Amended
April 18, 1989, eff. April 19, 1989 (Spl.Mtg.)
|
||
Article
III
|
Section
3.1
|
Amended
April 18, 1989, eff. April 19, 1989 (Spl.Mtg.)
|
||
Article
III
|
Section
3.2
|
Amended
April 18, 1989, eff. April 19, 1989 (Spl.Mtg.)
|
||
Article
V
|
Section
5.1
|
Amended
April 18, 1989, eff. April 19, 1989 (Spl.Mtg.)
|
||
Article
V
|
Section
5.1
|
Amended
November 17, 1989
|
Article
V
|
Section
5.4
|
Amended
by including new section November 17, 1989
|
||
Article
II
|
Section
2.1
|
Amended
October 1, 1990.
|
||
Article
II
|
Section
2.1
|
Amended
April 23, 1992.
|
||
Article
II
|
Section
2.1
|
Amended
April 22, 1993.
|
||
Article
II
|
Section
2.1
|
Amended
September 1, 1993.
|
||
Article
II
|
Section
2.1
|
Amended
April 21, 1994.
|
||
Article
II
|
Section
2.1
|
Amended
February 17, 1995.
|
||
Article
I
|
Section
1.3 and 1.4
|
Amended
April 20, 1995.
|
||
Article
II
|
Section
2.2 (c) and 2.4
|
Amended
April 20, 1995.
|
||
Article
III
|
Section
3.1, 3.2, and 3.3
|
Amended
April 20, 1995.
|
||
Article
II
|
Section
2.1
|
Amended
August 23, 1996.
|
||
Article
II
|
Section
2.1
|
Amended
April 17, 1997.
|
||
Article
I
|
Section
1.3
|
Amended
October 24, 1997.
|
||
Article
I
|
Section
1.6
|
Amended
by adding new section October 24, 1997.
|
||
Article
II
|
Section
2.6
|
Amended
by adding new section October 24, 1997.
|
||
Article
II
|
Section
2.1
|
Amended
December 30, 1997.
|
||
Article
III
|
Section
3.1
|
Amended
December 30, 1997.
|
||
Article
II
|
Section
2.1
|
Amended
April 23, 1998.
|
||
Article
II
|
Section
2.1
|
Amended
October 23, 1998.
|
||
Article
III
|
Section
3.1
|
Amended
October 23, 1998.
|
||
Article
II
|
Section
2.1
|
Amended
May 21, 1999.
|
||
Article
II
|
Section
2.1
|
Amended
November 19, 1999.
|
||
Article
II
|
Section
2.1
|
Amended
November 17, 2000.
|
||
Article
II
|
Section
2.1
|
Amended
January 24, 2003.
|
||
Article
II
|
Section
2.1
|
Amended
January 28, 2004.
|
||
Article
II
|
Section
2.1
|
Amended
April 29, 2004.
|
||
Article
II
|
Section
2.1
|
Amended
May 25, 2006.
|
||
Article
II
|
Section
2.1
|
Amended
April 18, 2008.
|
||
Article
II
|
Section
2.1
|
Amended
April 23, 2009.
|
Page | ||||
I.
|
PURPOSE
|
1
|
||
II.
|
DEFINITIONS
|
1
|
||
III.
|
DETERMINATION
OF PROGRAM BENEFITS
|
3
|
||
IV.
|
PROTECTION
OF CONFIDENTIAL INFORMATION: NONCOMPETITION
|
6
|
||
V.
|
CLAIMS
PROCEDURES
|
7
|
||
VI.
|
MISCELLANEOUS
|
8
|
||
ATTACHMENT
“A”
|
12
|
|||
ATTACHMENT
“B”
|
14
|
|
(a)
|
“Accrued
Benefit” shall mean a vested right to benefits under the Program which
shall commence upon an Officer’s attaining age fifty (50) while employed
by the Company or death after attaining age fifty (50) and while employed
by the Company. The “Accrued Benefit” shall be equivalent to
two percent (2%) of Final Average Compensation per Year of Service
(inclusive of both the Pension Plan and the Program) up to the maximum
stipulated in Section III (a)(1) below, plus an additional five percent
(5%) of Final Average Compensation.
|
|
(b)
|
“Actuarial
Equivalent” shall mean that all benefit forms payable under this Program
shall be the actuarial equivalent of a life annuity with six years
guaranteed. The actuarial factors used in making those
determinations shall be the applicable actuarial factors specified in the
Pension Plan.
|
|
(c)
|
“Board”
shall mean the Board of Directors of South Jersey Industries,
Inc.
|
|
(d)
|
“Change
in Control” for the exclusive purposes of this Program, shall mean any of
the following: (1) approval by the shareholders of the Company without the
recommendation and approval of the Board of any plan or proposal for the
consolidation, merger, liquidation, dissolution or acquisition of the
Company or all or substantially all of its assets; (2) election to the
Board who constitute a majority of the directors, different from the
individuals who as of the Effective Date constituted the entire Board (the
“original Board”), unless those individuals were recommended for election
as directors by a majority of the original Board, or by successor
directors recommended by the original Board; or (3) the acquisition by any
person of twenty percent (20%) or more of the stock of the Company having
general voting rights in the election of directors (for purposes of this
clause (3), the term “person” shall include any individual or entity or
any combination of two or more individuals or entities acting as a group
within the meaning of section 13(d) of the Securities Exchange Act of
1934, as amended for the purpose of acquiring, holding or disposing of
stock of the Company).
|
|
(e)
|
“Code”
shall mean the Internal Revenue Code of 1986, as amended and the
regulations promulgated thereunder.
|
|
(f)
|
“Committee”
shall mean the Compensation/Pension Committee as appointed by the Board to
administer the Program pursuant to Section VI (a)
hereunder.
|
|
(g)
|
“Company”
shall mean South Jersey Industries, Inc., South Jersey Energy Solutions,
LLC and South Jersey Gas Company.
|
|
(h)
|
“Effective
Date” shall mean January 1, 2009, the effective date of this amendment and
restatement of the Program. The Program was originally effective October
1, 1983, and previously amended and restated effective January 1, 1989,
September 1, 1991, July 1, 1997, December 1, 2001, and February 1,
2003.
|
|
(i)
|
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as
amended.
|
|
(j)
|
“Final
Average Compensation” shall mean an Officer’s average total cash
compensation (salary plus annual incentive bonus earned and paid before
any reduction for amounts deferred by the Officer pursuant to a defined
contribution plan maintained by the Company that qualifies under section
401(a) of the Code and satisfies the requirements of section 401(k) or
section 125 of the Code, or pursuant to any other nonqualified plan which
permits the voluntary deferral of compensation) for the highest thirty-six
(36) consecutive calendar months of the final sixty (60) months prior to
the earliest of the Officer’s actual retirement, death or
disability.
|
|
(k)
|
“Grandfathered
Amount” shall mean the portion of an Officer’s Accrued Benefit
attributable to amounts earned and vested for purposes of section 409A of
the Code as of December 31, 2004. Pursuant to section 409A of
the Code, this portion is calculated as the present value of the amount to
which the Officer would have been entitled under the Program if the
Officer voluntarily terminated services without cause on December 31, 2004
and received a payment of the benefits available under the Program on the
earliest possible date allowed under the Program to receive a payment of
benefits following the termination of services and received the benefits
in the form with the maximum
value.
|
|
(l)
|
“Officer”
shall mean Chief Executive Officer, President, Executive Vice Presidents,
Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents,
Secretary, Assistant Secretaries, Treasurer, Assistant Treasurers,
Controller and Assistant Controllers of the Company, or other officers as
prescribed by the Bylaws of the Company from time to time, who have
attained the age of fifty (50) and who have executed the Supplemental
Executive Retirement Agreement, substantially in the form attached hereto
as
Attachment
“A”
.
|
|
(m)
|
“Pension
Plan” shall mean the Retirement Plan for Employees of South Jersey
Industries, Inc. as identified in the plan document for the Pension
Plan.
|
|
(n)
|
“Program”
shall mean the Supplemental Executive Retirement Program of the Company as
set forth in this document, including any and all amendments hereto and
restatements hereof.
|
|
(o)
|
“Separation
from Service” shall mean an Officer’s “separation from service” with the
Company within the meaning of such term under section 409A of the
Code.
|
|
(p)
|
“Year
of Service” shall mean any calendar month of service during which the
employee was working at a rate which would yield 1,000 hours of service
for the year measured from anniversaries of date of
hire.
|
|
(a)
|
Normal Retirement
Benefit
. Subject to Section III (b) below, the benefit
payable to an Officer eligible under this Program shall be as
follows:
|
|
(1)
|
A
benefit of two percent (2%) of the Officer’s Final Average Compensation,
multiplied by the Officer’s Years of Service (not to exceed thirty (30)
years), inclusive of the Pension Plan benefit; except in the instance
where the Pension Plan benefit yields a percentage of Final Average
Compensation calculated on the basis of a life annuity with six years
guaranteed in excess of sixty percent (60%), whereas, in such case, the
higher qualified Pension Plan benefit shall be payable, plus an additional
five percent (5%) of the Final Average Compensation. (See
Attachment
“B”
.)
|
|
(2)
|
An
Officer’s Accrued Benefit under this Section III (a) attributable to the
Grandfathered Amount shall be paid at the same time and in the same form
as the Officer’s accrued benefit under the Pension Plan. An
Officer’s Accrued Benefit under this Section III (a) attributable to the
non-Grandfathered Amount shall commence on the later of the first day of
the month immediately following (A) the Officer’s Separation from Service
or (B) the date on which the Officer attains age fifty-five (55), and
shall be paid (I) in the form of a life annuity with six years guaranteed
to an Officer who is unmarried as of the date payment is to commence and
(II) in the form of a fifty percent (50%) joint and survivor annuitant
option for the spouse of the Officer without any actuarial reduction, for
both the Program and the Pension Plan, for an Officer who is married as of
the date payment is to commence.
Notwithstanding
the foregoing, at the time payment is to commence under this Section III
(a)(2), an Officer shall be permitted to choose from among such Actuarial
Equivalent optional forms of annuity payment in lieu of the automatic form
of payment described in the preceding sentence as the Company may
offer.
|
|
(3)
|
An
Officer’s Accrued Benefit under this Section III (a) shall be supplemented
to the extent necessary to ensure that the Officer receives a benefit
under this Program which is at least equal to the benefit that would have
been paid to the Officer under the Pension Plan had that benefit been
determined without regard to the limit on compensation taken into account
under the Pension Plan imposed by section 401(a)(17) of the Code and
without regard to the limit on benefits payable under the Pension Plan
imposed by section 415 of the Code.
|
|
(4)
|
To
the extent permitted under section 409A of the Code, an Officer may defer
the date on which payment of his Accrued Benefit attributable to
non-Grandfathered Amounts is to commence up to two times by submitting a
deferred payment election form to the Committee in such form and manner as
the Committee may determine. An Officer’s election to defer the
payment commencement date shall be effective only if: (A) the
Committee receives the deferred payment election form at least twelve (12)
full months before payment of the Officer’s Accrued Benefit under the
Program is to commence, (B) the deferred payment election is not effective
for a period of twelve (12) months from the date made, (C) the date on
which payment of the Officer’s Accrued Benefit is deferred for a period of
five years from the date payment of the Officer’s Accrued Benefit
otherwise would have commenced and (D) the deferred payment election does
not result in an impermissible acceleration of payment as described in
section 409A of the Code.
|
|
(b)
|
Early Retirement
Reduction
. Notwithstanding any provision of the Program
to the contrary, if an Officer commences receiving payment prior to his
attainment of age sixty (60), unless the Board determines otherwise, the
amount of the Officer’s annual benefit shall be equal to the normal
retirement benefit, as calculated under Section III (a) above, multiplied
by one hundred percent (100%) minus one-sixth of one percent (1/6%) for
each month by which the date on which the date of commencement of payment
of the Officer’s Accrued Benefit precedes the Officer’s sixtieth (60th)
birthday.
|
|
(c)
|
Disability
Benefit
. If an Officer receives disability benefits
under insurance provided by the Company, the Officer shall continue to
accumulate service for purposes of the Program benefit as calculated under
Section III (a) above until the first day following the expiration of the
six month period beginning on the date of the Officer’s disability at
which time the Officer shall be deemed to have incurred a Separation from
Service. Notwithstanding the preceding sentence, if the
Officer’s Separation from Service occurs prior to the Officer’s attainment
of age 55, the Officer shall continue to accumulate service for purposes
of the Program benefit as calculated under Section III (a) above until the
earlier of the date on which the Officer recovers from his disability or
the date on which the Officer attains age 55. The benefit shall
be based on Final Average Compensation determined to the date of
disability. An Officer’s Accrued Benefit under this Section III
(c) at the time specified in Section III (a)(2)
above.
|
|
(d)
|
Death
Benefit
. If an Officer dies after attaining age fifty
(50) while employed by the Company, but before commencement of payment of
the Officer’s Accrued Benefit hereunder, the Officer’s surviving spouse
shall be entitled to an annual survivor pension equal to fifty percent
(50%) of the Officer’s Accrued Benefit calculated in accordance with
Section III (a) above, and without the application of any early retirement
penalty reduction as described in Section III (b) above. The
benefit payable to the surviving spouse under this Section III (d)
attributable to the Grandfathered Amount shall commence at the same time
and in the same form as the death benefit under the Pension
Plan. The benefit payable to the surviving spouse under this
Section III (d) attributable to the non-Grandfathered Amount shall be paid
to the surviving spouse in a lump sum in an amount that is Actuarially
Equivalent to the benefit described under this Section III (d) within
sixty (60) days following the date of the Officer’s
death.
|
|
(e)
|
Six Month Delay for
Specified Employees
. Notwithstanding any provision of
this Program to the contrary, if an Officer is a “specified employee” of
the Company within the meaning of such term under section 409A of the Code
at the time of the Officer’s Separation from Service and if payment of any
benefit under the Program attributable to non-Grandfathered Amounts is
required to be postponed for a period of six months after Separation from
Service pursuant to section 409A of the Code, payment of such amount shall
be postponed as required by section 409A of the Code, and the accumulated
postponed amount shall be credited with interest at the prime rate
published in the
Wall
Street Journal
on date of the Officer’s Separation from Service for
the period beginning on the first day of the month following the Officer’s
Separation from Service and ending on the date payment is
made. Payment of the accumulated postponed amount plus interest
shall be paid in a lump sum payment within ten (10) days after the end of
the six (6)-month period. If the Officer dies during the
postponement period prior to the payment of postponed amount, the amounts
withheld on account of section 409A shall be paid to the Officer’s
surviving spouse or their authorized designee within sixty (60) days after
the date of the Officer’s death. A “specified employee” shall
mean an employee who, at any time during the twelve (12)-month period
ending on the identification date, is a “specified employee” under section
409A of the Code, as determined by the Board or its
delegate. The determination of specified employees, including
the number and identity of persons considered specified employees and the
identification date, shall be made by the Board or its delegate in
accordance with the provisions of sections 416(i) and 409A of the
Code.
|
|
(a)
|
to
keep confidential during and after the Officer’s employment by the Company
all matters of and information relating to the Company, and not to
disclose them to anyone outside of the Company under any circumstances, or
to anyone within the Company who is not in a position where the Officer
needs to know such information;
|
|
(b)
|
to
deliver promptly to the Company on termination of the Officer’s
employment, or at any time that the Company may so request, all memoranda,
notes, records, reports and other documents (and all copies thereof)
relating to the business of the Company which the Officer may then possess
or have under the Officer’s control;
and
|
|
(c)
|
during
the term of the Officer’s employment and for a period of ten (10) years
thereafter, not directly or indirectly to (1) enter the employ of, or
render any services to, any person, firm or corporation engaged in any
business competitive with the business of the Company in any area serviced
by the Company or in which the Company does business; (2) engage in such
business for the Officer’s own account; or (3) become interested in any
such business as an individual, partner, director, Officer, principal,
agent, employee, trustee, consultant or in any other relationship or
capacity. Anything to the contrary herein notwithstanding, the
Officer may be retained as an independent advisor and consultant to the
President of the Company as to such matters as the President of the
Company may from time to time request; provided that in the event the
Officer is retained as an independent advisor and consultant, no payment
shall be made to such Officer under the Program unless such Officer has a
Separation from Service.
|
|
(a)
|
Claim
. Any
person or entity claiming a benefit, requesting an interpretation or
ruling under the Program (hereinafter referred to as “claimant”), or
requesting information under the Program shall present the request in
writing to the Committee, which shall respond in writing as soon as
practical.
|
|
(b)
|
Denial of
Claim
. If the claim or request is denied, the written
notice of denial shall state:
|
|
(1)
|
The
reason(s) for denial;
|
|
(2)
|
Reference
to the specific Program provisions on which the denial is
based;
|
|
(3)
|
A
description of any additional material or information required and an
explanation of why it is necessary;
and
|
|
(4)
|
An
explanation of the Program’s claim review procedures and the time limits
applicable to such procedures, including the right to bring a civil action
under section 502(a) of ERISA.
|
|
(c)
|
Review of
Claim
. Any claimant whose claim or request is denied or
who has not received a response within sixty (60) days may request a
review by notice given in writing or in electronic form to the
Committee. Such request must be made within sixty (60) days
after receipt by the claimant of the written notice of denial, or in the
event the claimant has not received a response, sixty (60) days after
receipt by the Committee of the claimant’s claim or
request. The claim or request shall be reviewed by the
Committee which may, but shall not be required to, grant the claimant a
hearing. On review, the claimant may have representation,
examine pertinent documents, and submit issues and comments in
writing.
|
|
(d)
|
Final
Decision
. The decision on review shall normally be made
within sixty (60) days after the Committee’s receipt of claimant’s claim
or request. If an extension of time is required for a hearing
or other special circumstances, the claimant shall be notified and the
time limit shall be one hundred twenty (120) days. The decision
shall be in writing or in electronic form and
shall:
|
|
(1)
|
state
the specific reason(s) for the
denial;
|
|
(2)
|
reference
the relevant Program provisions;
|
|
(3)
|
state
that the claimant is entitled to receive, upon request and free of charge,
and have reasonable access to and copies of all documents, records and
other information relevant to the claim for benefits;
and
|
|
(4)
|
state
that the claimant may bring an action under section 502(a) of
ERISA.
|
|
(a)
|
Administration of
Program
. The Program shall be administered by the
Committee. The Committee shall have full power, discretion and
authority to recommend interpretation, construction and administration of
the Program and any part thereof to the Board. The Committee
may recommend to the Board employment of legal counsel, consultants,
actuaries and agents, as it deems desirable, in the administration of the
Program, and may rely on the opinion(s) of such counsel, the advice of
such consultants, and the computations of such
actuary(ies). The Committee shall have such rights, duties and
privileges under the Program as are allocated to the Trust Committee under
the Pension Plan.
|
|
(b)
|
Arbitration
. Any
controversy or claim arising out of or related to this Program that
remains after exhaustion of the claims procedures set forth in Section V
above, including any rights to benefits which have accrued under this
Program, or the interpretation, construction or administration of the
Program, shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment
upon the award rendered by the Arbitrators is binding and may be entered
in any Court having jurisdiction
thereof.
|
|
(1)
|
The
arbitration panel shall consist of three arbitrators, one appointed by
each party, and a third, neutral arbitrator appointed by the first two
arbitrators.
|
|
(2)
|
Each
party shall appoint its arbitrator within fourteen days after the filing
of the Demand for Arbitration, and the third arbitrator shall be appointed
within ten days thereafter.
|
|
(3)
|
The
third, neutral arbitrator, shall serve as chairman of the arbitration
panel.
|
|
(4)
|
All
decisions of the arbitration panel, including the award, must be by at
least a majority.
|
|
(c)
|
Amendment, Suspension
and Termination
. The Program may be amended, suspended,
or terminated in whole or in part at any time and from time to time by the
Board. No such amendment, suspension or termination shall
retroactively impair or otherwise adversely affect the rights of any
person to whom benefits are payable under this Program that have accrued
prior to that date.
|
|
(d)
|
Change in
Control
. Upon a Change in Control, the Company shall, as
soon as possible, but in no event longer than forty-five (45) days
following the Change in Control, make an irrevocable contribution to a
Rabbi Trust or, other comparable funding vehicle in an amount that is
equal to one hundred twenty percent (120%) of the amount necessary to pay
each program participant or beneficiary the benefits accrued for the
Program participants and their beneficiaries under the terms of the
Program on the date of the Change in Control, determined using the same
actuarial assumptions and methods as are used in funding the Pension
Plan.
|
|
(e)
|
Proof of Date of
Birth
. In order to be eligible to receive payments under
this Program, the Officer, or the Officer’s surviving spouse seeking
benefits under Section III (d) of this Program shall provide written proof
of the date of birth of the Officer to the
Committee.
|
|
(f)
|
Notices
. Each
Officer or surviving spouse or their authorized designee shall be
responsible for furnishing the Committee with the current and proper
address for the mailing of notices, reports and benefit
payments. Any notice required or permitted to be given shall be
deemed given if directed to the person to whom addressed at such address
and mailed by regular United States mail, first-class and
prepaid. If any check mailed to such address is returned as
undeliverable to the addressee, mailing of checks will be suspended until
the Officer or surviving spouse furnishes proper
address.
|
|
(g)
|
Nonalienation of
Benefits
. All amounts payable under the Program shall be
made only to the person or persons designated by the Program and not to
any other person or corporation. No part of an Officer’s
benefit shall be liable for the debts, contracts, or engagements of any
Officer, the Officer’s surviving spouse, or successors in interest and,
except as hereinafter provided with respect to family disputes, the rights
of any Officer under this Program are personal and may not be subject to
execution by levy, attachment, or garnishment or by any other legal or
equitable proceeding. In addition, the Officer, the Officer’s
surviving spouse, or successors in interest, shall have no right to
assign, anticipate, commute, transfer, pledge or encumber any Program
benefits or payments in any manner whatsoever. If any Officer,
surviving spouse or successor in interest is adjudicated bankrupt or
purports to anticipate, alienate, sell, transfer, assign, pledge,
encumber, or charge any distribution or payment from the Program,
voluntarily or involuntarily, the Committee, in its discretion, may cancel
such distribution or payment (or any part thereof) to or for the benefit
of such Officer, the Officer’s surviving spouse or successor in interest
in such manner, as the Committee shall direct. The provisions
of the Program shall inure to the benefit of each Officer and the
Officer’s surviving spouse, heirs, executors, administrators or successors
in interest. In cases of family disputes, the Company will
observe the terms of the Program unless and until ordered to do otherwise
by a state or federal court. As a condition of participation,
an Officer agrees to hold the Company harmless from any claim that arises
out of the Company’s obeying the final order of any state or federal
court, whether such order effects a judgment of such court or is issued to
enforce a judgment or order of another court. For purposes of
this Section VI (g), “family dispute” means a dispute relating to
provision of child support, alimony payments, or marital property rights
to a spouse, former spouse or other dependent of the
Officer.
|
|
(h)
|
Withholding
. The
Company may make such provisions and take such actions as it may deem
necessary or appropriate for the withholding of federal, state or local
taxes with respect to amounts payable under this Program, including the
withholding of appropriate amounts from benefits payable to an Officer or
the Officer’s surviving spouse or their authorized
designee. The Officer, the Officer’s surviving spouse or their
authorized designee shall be responsible for the payment of all individual
tax liabilities relating to any
benefits.
|
|
(i)
|
Reliance on
Data
. The Company, the Committee and all other persons
associated with the Program’s operation shall have the right to rely on
the veracity and accuracy of any required written data provided by the
Officer or the surviving spouse including representation of age, health
and marital status.
|
|
(j)
|
No Contract of
Employment
. Neither the establishment of the Program,
nor any modification thereof, nor the payment of any benefits shall be
construed as giving any Officer the right to be retained in the service of
any entity constituting the Company, and all Officers shall remain subject
to discharge to the same extent as if the Program had never been
adopted.
|
|
(k)
|
Unfunded Status of
Program
. The Program is intended to constitute an
“unfunded” deferred compensation plan for the Officers. Nothing
contained in the Program, and no action taken pursuant to the Program,
shall create or be construed to create a trust of any kind. The
Company shall reflect on its books each Officer’s interest hereunder, but
neither an Officer, the Officer’s surviving spouse, their designees nor
any other person shall under any circumstances acquire any property
interest in any specific assets of the Company. Nothing
contained in this Program and no action taken pursuant hereto shall create
or be construed to create a fiduciary relationship between the Company and
an Officer or any other person. An Officer’s right to receive
payments under the Program shall be no greater than the right of an
unsecured general creditor of the Company. All payments shall
be made from the general funds of the Company, and no special or separate
fund shall be established and no segregation of assets shall be made to
assure payment.
|
|
(l)
|
Severability of
Provisions
. If any provision of this Program shall be
held invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provisions hereof, and this Program shall be
construed and enforced as if such provisions had not been
included.
|
|
(m)
|
Controlling
Law
. This Program shall be construed and enforced
according to the laws of the State of New Jersey without reference to the
principles of conflict of laws, to the extent not preempted by federal
law, which shall otherwise control.
|
|
(n)
|
Effect on Other
Plans
. Any benefit payable under the Program shall not
be deemed salary or other compensation for the purpose of computing
benefits under any employee benefit plans or other arrangements of the
Company for the benefit of its
employees.
|
|
(o)
|
Section 409A of the
Code
. The Program is intended to comply with the
applicable requirements of section 409A of the Code, and shall be
administered in accordance with section 409A of the
Code. Notwithstanding provision of the Program to the contrary,
distributions under the Program shall only be made in a manner, and upon
an event, permitted by section 409A of the Code. If a payment
is not made by the designated payment date under the Program, the payment
shall be made by December 31 of the calendar year in which the designated
date occurs. Distributions upon termination of employment shall
only be made upon an Officer’s “separation from service” within the
meaning of such term under section 409A of the Code. To the
extent that any provision of the Program would cause a conflict with the
requirements of section 409A of the Code, or would cause the
administration of the Program to fail to satisfy the requirements of
section 409A of the Code, such provision shall be deemed null and void to
the extent permitted by applicable law. An Officer shall not
designate the calendar year of a payment except in accordance with the
rules relating to payment elections under section 409A of the
Code.
|
|
2.
|
OFFICER’S
SERVICES
.
The
OFFICER
shall
faithfully, and to the best of the Officer’s ability, devote all of the
Officer’s working time exclusively to the performance of such services for
the
COMPANY
as may
be assigned to the Officer from time to time under written employment
agreements or otherwise and the
OFFICER
shall not, for
remuneration or profit, directly or indirectly render any service to, or
undertake any employment for, any other person, firm or corporation,
without first obtaining the written consent of the President and Chief
Executive Officer of the
COMPANY
.
|
|
3.
|
PROGRAM
RETIREMENT INCOME
.
The
COMPANY
agrees to
provide the
OFFICER
with a
Supplemental Executive Retirement Program as outlined in the Program
documents attached as Exhibit
A.
|
|
4.
|
ASSIGNABILITY
.
This
Agreement shall inure to the benefit of any assignee of the
COMPANY
, and the
OFFICER
specifically
agrees, on demand, to execute any and all necessary documents reasonably
requested in connection therewith.
|
|
5.
|
ENTIRE
AGREEMENT
.
This
Agreement (including Exhibit A) constitutes the entire understanding
between the parties hereto with reference to the subject matter hereof and
shall not be changed or modified except by a written instrument signed by
both parties. This agreement amends and restates all prior
agreements between the
COMPANY
and the
OFFICER
relating to the
Supplemental Executive Retirement Program. Otherwise, all
existing contracts of employment between the
COMPANY
and the
OFFICER
shall survive
the making of this Agreement and, except to the extent amended hereby,
remain in full force and effect.
|
SOUTH JERSEY INDUSTRIES,
INC.
|
OFFICER
|
|||
By:
|
By:
|
|||
Title:
|
Title:
|
2007
|
2006
|
2005
|
||||||||||||||
Base
Salary
|
225,000 | 215,000 | 200,000 | |||||||||||||
Annual
Cash
|
45,000 | 43,000 | 40,000 | |||||||||||||
|
|
|
||||||||||||||
Totals
|
270,000 | 258,000 | 240,000 | |||||||||||||
FAC
|
$ | 256,000.00 | ||||||||||||||
doh
|
9/3/72
|
term
|
12/31/07
|
|||||||||||||
dor
|
1/01/08
|
35.33 |
Years
of Service @ 2% for each service year
|
0.7066 | |||
With
incremental 5% Program benefit
|
0.7566 | |||
Program
maximum w/5% increment
|
0.65 | |||
Pension
Benefit Before Early Retirement Penalty
|
$ | 166,400.00 | ||
Less: 0%
Early Retirement Penalty
|
$ | 0.00 | ||
Annual
Pension Benefit
|
$ | 166,400.00 | ||
Monthly
Pension Benefit
|
$ | 13,866.67 |
Level
|
Corporate
Credit Rating
|
Applicable
Base Rate Margin
|
Applicable
LIBOR Margin
|
I
|
Greater
than BBB-/Baa3
|
0.000%
|
1.75%
|
II
|
Less
than or equal to
BBB-/Baa3
or no rating
|
0.000%
|
2.00%
|
BORROWER
:
|
SOUTH
JERSEY GAS COMPANY
|
||
By:
|
|||
Name:
|
|||
Title:
|
LENDER:
|
|||
TORONTO
DOMINION (NEW YORK) LLC
|
|||
By:
|
|||
Name:
|
|||
Title:
|
Fiscal
Year Ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
Net
Income*
|
$
|
58,532
|
$
|
77,178
|
$
|
62,659
|
$
|
72,250
|
$
|
39,770
|
||||||||||
Income
Taxes
|
34,302
|
51,948
|
43,056
|
49,683
|
27,619
|
|||||||||||||||
Fixed
Charges**
|
19,314
|
25,828
|
27,719
|
28,640
|
22,521
|
|||||||||||||||
Capitalized
Interest
|
(322
|
)
|
(152
|
)
|
(504
|
)
|
(969
|
)
|
(1,571
|
)
|
||||||||||
Total
Available
|
$
|
111,826
|
$
|
154,802
|
$
|
132,930
|
$
|
149,604
|
$
|
88,339
|
||||||||||
Total
Available
|
5.8
|
x
|
6.0
|
x
|
4.8
|
x
|
5.2
|
x
|
3.9
|
x
|
||||||||||
Fixed
Charges
|
Percentage
of
|
||||||
Voting
Securities
|
||||||
Directly
or Indirectly
|
||||||
Owned
by Immediate Parent
|
Relationship
|
State
of Incorporation
|
||||
South
Jersey Industries, Inc.
|
Registrant
|
Parent
|
New
Jersey
|
|||
South
Jersey Gas Company
|
100
|
(1)
|
New
Jersey
|
|||
Marina
Energy LLC
|
100
|
(5)
|
New
Jersey
|
|||
South
Jersey Energy Company
|
100
|
(5)
|
New
Jersey
|
|||
South
Jersey Resources Group, LLC
|
100
|
(5)
|
Delaware
|
|||
South
Jersey Energy Service Plus, LLC
|
100
|
(5)
|
New
Jersey
|
|||
SJ
EnerTrade, Inc.
|
100
|
(2)
|
New
Jersey
|
|||
Energy
& Minerals, Inc.
|
100
|
(1)
|
New
Jersey
|
|||
R&T
Group, Inc.
|
100
|
(1)
|
New
Jersey
|
|||
South
Jersey Fuel, Inc.
|
100
|
(3)
|
New
Jersey
|
|||
South
Jersey Energy Solutions, LLC
|
100
|
(1)
|
New
Jersey
|
|||
SJI
Services, LLC
|
100
|
(1)
|
New
Jersey
|
|||
AC
Landfill Energy, LLC
|
51
|
(4)
|
New
Jersey
|
|||
WC
Landfill Energy, LLC
|
51
|
(4)
|
New
Jersey
|
South Jersey Industries, Inc. | ||
Date:
February 26, 2010
|
By:
|
/s/
Edward J. Graham
|
Edward
J. Graham
|
||
Chairman, President
& Chief Executive Officer
|
South
Jersey Industries, Inc.
|
||
Date:
February 26, 2010
|
By:
|
/s/ David A. Kindlick
|
David
A. Kindlick
|
||
Vice
President & Chief Financial
Officer
|
/s/
Edward J. Graham
|
|
Name: Edward
J. Graham
|
|
Title: Chief
Executive Officer
|
|
February
26, 2010
|
/s/
David A. Kindlick
|
|
Name:
David A. Kindlick
|
|
Title:
Chief Financial Officer
|
|
February
26, 2010
|