x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
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 £
|
SOUTH
JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
|
||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
|
||||||||
(In
Thousands Except for Per Share Data)
|
||||||||
Three
Months Ended
|
||||||||
September
30,
|
||||||||
2009
|
2008
|
|||||||
Operating
Revenues:
|
||||||||
Utility
|
$ | 55,958 | $ | 63,687 | ||||
Nonutility
|
71,129 | 146,726 | ||||||
Total
Operating Revenues
|
127,087 | 210,413 | ||||||
Operating
Expenses:
|
||||||||
Cost
of Sales - (Excluding depreciation)
|
||||||||
-
Utility
|
31,377 | 40,324 | ||||||
-
Nonutility
|
63,751 | 61,935 | ||||||
Operations
|
20,044 | 17,923 | ||||||
Maintenance
|
2,301 | 1,925 | ||||||
Depreciation
|
7,880 | 7,333 | ||||||
Energy
and Other Taxes
|
1,649 | 1,646 | ||||||
Total
Operating Expenses
|
127,002 | 131,086 | ||||||
Operating
Income
|
85 | 79,327 | ||||||
Other
Income and Expense
|
294 | 437 | ||||||
Interest
Charges
|
(5,298 | ) | (5,745 | ) | ||||
(Loss)
Income Before Income Taxes
|
(4,919 | ) | 74,019 | |||||
Income
Taxes
|
3,206 | (30,367 | ) | |||||
Equity
in Earnings of Affiliated Companies
|
(314 | ) | 147 | |||||
(Loss)
Income from Continuing Operations
|
(2,027 | ) | 43,799 | |||||
Loss
from Discontinued Operations - (Net of tax benefit)
|
(16 | ) | (76 | ) | ||||
Net
(Loss) Income
|
(2,043 | ) | 43,723 | |||||
Less:
Net Loss Attributable to Noncontrolling Interest in
Subsidiaries
|
169 | 59 | ||||||
Net
(Loss) Income - Attributable to South Jersey Industries,
Inc.
|
$ | (1,874 | ) | $ | 43,782 | |||
Amounts
Attributable to South Jersey Industries, Inc. Shareholders
|
||||||||
(Loss)
Income from Continuing Operations
|
$ | (1,858 | ) | $ | 43,858 | |||
Loss
from Discontinued Operations - (Net of tax benefit)
|
(16 | ) | (76 | ) | ||||
Net
(Loss) Income
|
$ | (1,874 | ) | $ | 43,782 | |||
Basic
Earnings Per Common Share Attributable to South Jersey Industries, Inc.
Shareholders:
|
||||||||
Continuing
Operations
|
$ | (0.062 | ) | $ | 1.475 | |||
Discontinued
Operations
|
(0.001 | ) | (0.002 | ) | ||||
Basic
Earnings Per Common Share
|
$ | (0.063 | ) | $ | 1.473 | |||
Average
Shares of Common Stock Outstanding - Basic
|
29,796 | 29,729 | ||||||
Diluted
Earnings Per Common Share Attributable to South Jersey Industries, Inc.
Shareholders:
|
||||||||
Continuing
Operations
|
$ | (0.062 | ) | $ | 1.469 | |||
Discontinued
Operations
|
(0.001 | ) | (0.003 | ) | ||||
Diluted
Earnings Per Common Share
|
$ | (0.063 | ) | $ | 1.466 | |||
Average
Shares of Common Stock Outstanding - Diluted
|
29,796 | 29,865 | ||||||
Dividends
Declared per Common Share
|
$ | 0.298 | $ | 0.270 | ||||
The
accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
|
SOUTH
JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
|
||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
|
||||||||
(In
Thousands Except for Per Share Data)
|
||||||||
Nine
Months Ended
|
||||||||
September
30,
|
||||||||
2009
|
2008
|
|||||||
Operating
Revenues:
|
||||||||
Utility
|
$ | 360,522 | $ | 393,262 | ||||
Nonutility
|
263,224 | 301,038 | ||||||
Total
Operating Revenues
|
623,746 | 694,300 | ||||||
Operating
Expenses:
|
||||||||
Cost
of Sales - (Excluding depreciation)
|
||||||||
-
Utility
|
223,876 | 261,604 | ||||||
-
Nonutility
|
227,392 | 231,141 | ||||||
Operations
|
65,034 | 56,805 | ||||||
Maintenance
|
6,162 | 5,412 | ||||||
Depreciation
|
23,169 | 21,758 | ||||||
Energy
and Other Taxes
|
8,483 | 8,628 | ||||||
Total
Operating Expenses
|
554,116 | 585,348 | ||||||
Operating
Income
|
69,630 | 108,952 | ||||||
Other
Income and Expense
|
638 | 1,070 | ||||||
Interest
Charges
|
(14,303 | ) | (17,246 | ) | ||||
Income
Before Income Taxes
|
55,965 | 92,776 | ||||||
Income
Taxes
|
(20,068 | ) | (38,245 | ) | ||||
Equity
in Earnings of Affiliated Companies
|
(1,247 | ) | 593 | |||||
Income
from Continuing Operations
|
34,650 | 55,124 | ||||||
Loss
from Discontinued Operations - (Net of tax benefit)
|
(58 | ) | (101 | ) | ||||
Net
Income
|
34,592 | 55,023 | ||||||
Less:
Net Loss Attributable to Noncontrolling Interest in
Subsidiaries
|
145 | 165 | ||||||
Net
Income - Attributable to South Jersey Industries, Inc.
|
$ | 34,737 | $ | 55,188 | ||||
Amounts
Attributable to South Jersey Industries, Inc. Shareholders
|
||||||||
Income
from Continuing Operations
|
$ | 34,795 | $ | 55,289 | ||||
Loss
from Discontinued Operations - (Net of tax benefit)
|
(58 | ) | (101 | ) | ||||
Net
Income
|
$ | 34,737 | $ | 55,188 | ||||
Basic
Earnings Per Common Share Attributable to South Jersey Industries, Inc.
Shareholders:
|
||||||||
Continuing
Operations
|
$ | 1.168 | $ | 1.862 | ||||
Discontinued
Operations
|
(0.002 | ) | (0.004 | ) | ||||
Basic
Earnings Per Common Share
|
$ | 1.166 | $ | 1.858 | ||||
Average
Shares of Common Stock Outstanding - Basic
|
29,782 | 29,699 | ||||||
Diluted
Earnings Per Common Share Attributable to South Jersey Industries, Inc.
Shareholders:
|
||||||||
Continuing
Operations
|
$ | 1.164 | $ | 1.854 | ||||
Discontinued
Operations
|
(0.002 | ) | (0.004 | ) | ||||
Diluted
Earnings Per Common Share
|
$ | 1.162 | $ | 1.850 | ||||
Average
Shares of Common Stock Outstanding - Diluted
|
29,885 | 29,828 | ||||||
Dividends
Declared per Common Share
|
$ | 0.893 | $ | 0.810 | ||||
The
accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
|
SOUTH
JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
|
||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
|
||||||||
(In
Thousands)
|
||||||||
Three
Months Ended
|
||||||||
September
30,
|
||||||||
2009
|
2008
|
|||||||
Net
(Loss) Income
|
$ | (2,043 | ) | $ | 43,723 | |||
Other
Comprehensive Loss, Net of Tax:*
|
||||||||
Unrealized
Gain (Loss) on Available-for-Sale Securities
|
344 | (355 | ) | |||||
Unrealized
Loss on Derivatives - Other
|
(339 | ) | (20 | ) | ||||
Other
Comprehensive Loss of Affiliated Companies
|
(600 | ) | (347 | ) | ||||
Other
Comprehensive Loss - Net of Tax*
|
(595 | ) | (722 | ) | ||||
Comprehensive
(Loss) Income
|
(2,638 | ) | 43,001 | |||||
Less:
Comprehensive Loss Attributable to Noncontrolling Interest in
Subsidiaries
|
169 | 59 | ||||||
Comprehensive
(Loss) Income Attributable to South Jersey Industries,
Inc.
|
$ | (2,469 | ) | $ | 43,060 | |||
Nine
Months Ended
|
||||||||
September
30,
|
||||||||
2009 | 2008 | |||||||
Net
Income
|
$ | 34,592 | $ | 55,023 | ||||
Other
Comprehensive Income (Loss), Net of Tax:*
|
||||||||
Unrealized
Gain (Loss) on Available-for-Sale Securities
|
441 | (635 | ) | |||||
Unrealized
Gain on Derivatives - Other
|
605 | 499 | ||||||
Other
Comprehensive Income (Loss) of Affiliated Companies
|
1,800 | (154 | ) | |||||
Other
Comprehensive Income (Loss)- Net of Tax*
|
2,846 | (290 | ) | |||||
Comprehensive
Income
|
37,438 | 54,733 | ||||||
Less:
Comprehensive Loss Attributable to Noncontrolling Interest in
Subsidiaries
|
145 | 165 | ||||||
Comprehensive
Income Attributable to South Jersey Industries, Inc.
|
$ | 37,583 | $ | 54,898 | ||||
*
Determined using a combined statutory tax rate of 41.08%.
|
||||||||
The
accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
|
SOUTH
JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
|
||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
||||||||
(In
Thousands)
|
||||||||
Nine
Months Ended
|
||||||||
September
30,
|
||||||||
2009
|
2008
|
|||||||
Net
Cash Provided by Operating Activities
|
$ | 121,591 | $ | 32,072 | ||||
Cash
Flows from Investing Activities:
|
||||||||
Capital
Expenditures
|
(61,314 | ) | (45,048 | ) | ||||
Net
Proceeds from (Purchase of) Restricted Investments in Margin
Account
|
28,958 | (11,150 | ) | |||||
Purchase
of Restricted Investments with Escrowed Loan Proceeds
|
- | (75 | ) | |||||
Investment
in Long-Term Receivables
|
(3,486 | ) | (2,857 | ) | ||||
Proceeds
from Long-Term Receivables
|
3,633 | 2,923 | ||||||
Purchase
of Company Owned Life Insurance
|
(4,444 | ) | (4,287 | ) | ||||
Investment
in Affiliate
|
(2,436 | ) | (781 | ) | ||||
Advances
on Notes Receivable - Affiliate
|
(11,647 | ) | (4,832 | ) | ||||
Repayment
of Notes Receivable - Affiliate
|
1,100 | - | ||||||
Other
|
175 | - | ||||||
Net
Cash Used in Investing Activities
|
(49,461 | ) | (66,107 | ) | ||||
Cash
Flows from Financing Activities:
|
||||||||
Net
(Repayments of) Borrowings from Lines of Credit
|
(56,750 | ) | 40,835 | |||||
Proceeds
from Issuance of Long-Term Debt
|
- | 25,000 | ||||||
Payments
for Issuance of Long-Term Debt
|
(96 | ) | (247 | ) | ||||
Principal
Repayments of Long-Term Debt
|
(100 | ) | (25,079 | ) | ||||
Dividends
on Common Stock
|
(17,729 | ) | (16,042 | ) | ||||
Proceeds
from Sale of Common Stock
|
- | 2,076 | ||||||
Net
Cash (Used in) Provided by Financing Activities
|
(74,675 | ) | 26,543 | |||||
Net
Decrease in Cash and Cash Equivalents
|
(2,545 | ) | (7,492 | ) | ||||
Cash
and Cash Equivalents at Beginning of Period
|
5,775 | 11,678 | ||||||
Cash
and Cash Equivalents at End of Period
|
$ | 3,230 | $ | 4,186 | ||||
The
accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
|
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
Assets
|
||||||||
Property,
Plant and Equipment:
|
||||||||
Utility
Plant, at original cost
|
$ | 1,224,350 | $ | 1,172,014 | ||||
Accumulated
Depreciation
|
(309,473 | ) | (295,432 | ) | ||||
Nonutility
Property and Equipment, at cost
|
127,594 | 121,658 | ||||||
Accumulated
Depreciation
|
(18,778 | ) | (15,632 | ) | ||||
Property,
Plant and Equipment - Net
|
1,023,693 | 982,608 | ||||||
Investments:
|
||||||||
Available-for-Sale
Securities
|
5,712 | 4,859 | ||||||
Restricted
|
2,140 | 31,098 | ||||||
Investment
in Affiliates
|
2,310 | 1,966 | ||||||
Total
Investments
|
10,162 | 37,923 | ||||||
Current
Assets:
|
||||||||
Cash
and Cash Equivalents
|
3,230 | 5,775 | ||||||
Accounts
Receivable
|
112,039 | 121,683 | ||||||
Unbilled
Revenues
|
17,266 | 52,907 | ||||||
Provision
for Uncollectibles
|
(6,743 | ) | (5,757 | ) | ||||
Natural
Gas in Storage, average cost
|
112,963 | 162,387 | ||||||
Materials
and Supplies, average cost
|
13,993 | 12,778 | ||||||
Prepaid
Taxes
|
25,789 | 14,604 | ||||||
Derivatives
- Energy Related Assets
|
45,656 | 63,201 | ||||||
Other
Prepayments and Current Assets
|
7,536 | 7,506 | ||||||
Total
Current Assets
|
331,729 | 435,084 | ||||||
Regulatory
and Other Noncurrent Assets:
|
||||||||
Regulatory
Assets
|
246,791 | 270,434 | ||||||
Derivatives
- Energy Related Assets
|
13,141 | 19,712 | ||||||
Unamortized
Debt Issuance Costs
|
6,844 | 7,166 | ||||||
Notes
Receivable - Affiliates
|
18,003 | 7,457 | ||||||
Contract
Receivables
|
13,194 | 13,565 | ||||||
Other
|
23,044 | 19,478 | ||||||
Total
Regulatory and Other Noncurrent Assets
|
321,017 | 337,812 | ||||||
Total
Assets
|
$ | 1,686,601 | $ | 1,793,427 |
SOUTH
JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
|
||||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
||||||||
(In
Thousands)
|
||||||||
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
Capitalization and
Liabilities
|
||||||||
Common
Equity:
|
||||||||
Common
Stock
|
$ | 37,245 | $ | 37,161 | ||||
Premium
on Common Stock
|
253,643 | 252,495 | ||||||
Treasury
Stock (at par)
|
(171 | ) | (176 | ) | ||||
Accumulated
Other Comprehensive Loss
|
(21,353 | ) | (24,199 | ) | ||||
Retained
Earnings
|
258,116 | 249,973 | ||||||
Total
South Jersey Industries, Inc. Shareholders' Equity
|
527,480 | 515,254 | ||||||
Noncontrolling
Interest in Subsidiaries
|
1,048 | 1,194 | ||||||
Total
Equity
|
528,528 | 516,448 | ||||||
Long-Term
Debt
|
332,684 | 332,784 | ||||||
Total
Capitalization
|
861,212 | 849,232 | ||||||
Current
Liabilities:
|
||||||||
Notes
Payable
|
155,800 | 212,550 | ||||||
Current
Portion of Long-Term Debt
|
25,112 | 25,112 | ||||||
Accounts
Payable
|
65,672 | 120,162 | ||||||
Customer
Deposits and Credit Balances
|
19,914 | 14,449 | ||||||
Environmental
Remediation Costs
|
18,604 | 13,670 | ||||||
Taxes
Accrued
|
4,864 | 5,510 | ||||||
Derivatives
- Energy Related Liabilities
|
32,372 | 50,925 | ||||||
Deferred
Income Taxes - Net
|
20,246 | 25,009 | ||||||
Deferred
Contract Revenues
|
6,924 | 5,840 | ||||||
Dividends
Payable
|
8,864 | - | ||||||
Interest
Accrued
|
4,797 | 6,519 | ||||||
Pension
and Other Postretirement Benefits
|
1,031 | 1,031 | ||||||
Other
Current Liabilities
|
12,522 | 19,130 | ||||||
Total
Current Liabilities
|
376,722 | 499,907 | ||||||
Deferred
Credits and Other Noncurrent Liabilities:
|
||||||||
Deferred
Income Taxes - Net
|
203,237 | 184,294 | ||||||
Investment
Tax Credits
|
1,596 | 1,832 | ||||||
Pension
and Other Postretirement Benefits
|
77,733 | 80,835 | ||||||
Environmental
Remediation Costs
|
51,090 | 54,495 | ||||||
Asset
Retirement Obligations
|
23,047 | 22,553 | ||||||
Derivatives
- Energy Related Liabilities
|
12,255 | 15,699 | ||||||
Derivatives
- Other
|
8,464 | 14,088 | ||||||
Regulatory
Liabilities
|
50,950 | 50,447 | ||||||
Other
|
20,295 | 20,045 | ||||||
Total
Deferred Credits and Other Noncurrent Liabilities
|
448,667 | 444,288 | ||||||
Commitments
and Contingencies (Note 12)
|
||||||||
Total
Capitalization and Liabilities
|
$ | 1,686,601 | $ | 1,793,427 | ||||
The
accompanying notes are an integral part of the unaudited condensed
consolidated financial statements.
|
1.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES:
|
|
▪
|
South
Jersey Gas Company (SJG) is a regulated natural gas utility. SJG
distributes natural gas in the seven southernmost counties of New
Jersey.
|
|
▪
|
South
Jersey 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) installs residential and small
commercial HVAC systems, provides plumbing services and services
appliances via the sale of appliance service
programs.
|
Fair
Values of Derivative Instruments
|
||||||||||
Asset
Derivatives
|
||||||||||
September
30, 2009
|
December
31, 2008
|
|||||||||
Balance
Sheet Location
|
Fair
Value
|
Balance
Sheet Location
|
Fair
Value
|
|||||||
Derivatives
not designated as hedging instruments under GAAP
|
||||||||||
Energy
related commodity contracts
|
Derivatives
- Energy Related Assets-Current
|
$
|
45,656
|
Derivatives
- Energy Related Assets-Current
|
$
|
63,201
|
||||
Noncurrent
|
13,141
|
Noncurrent
|
19,712
|
|||||||
Total
asset derivatives
|
$
|
58,797
|
$
|
82,913
|
||||||
Liability
Derivatives
|
||||||||||
September
30, 2009
|
December
31, 2008
|
|||||||||
Balance
Sheet Location
|
Fair
Value
|
Balance
Sheet Location
|
Fair
Value
|
|||||||
Derivatives
designated as hedging instruments under GAAP
|
||||||||||
Interest
rate contracts
|
Derivatives
- Other
|
$
|
2,678
|
Derivatives
- Other
|
$
|
3,551
|
||||
Derivatives
not designated as hedging instruments under GAAP
|
||||||||||
Energy
related commodity contracts
|
Derivatives
- Energy Related Liabilities-Current
|
32,372
|
Derivatives
- Energy Related Liabilities-Current
|
50,925
|
||||||
Noncurrent
|
12,255
|
Noncurrent
|
15,699
|
|||||||
Interest
rate contracts
|
Derivatives
- Other
|
5,786
|
Derivatives
- Other
|
10,537
|
||||||
Total
derivatives not designated as hedging instruments under
GAAP
|
50,413
|
77,161
|
||||||||
Total
liability derivatives
|
$
|
53,091
|
$
|
80,712
|
Derivatives in Cash Flow
Hedging Relationships
|
||||||||||||||||||||||||||
Amount
of Gain or
(Loss)
Recognized in OCI on Derivative
(Effective
Portion)
|
Location
of Gain or (Loss)
Reclassified
From
Accumulated
OCI
into
Income
(Effective
Portion)
|
Amount
of Gain or
(Loss)
Reclassified
from
Accumulated
OCI
into Income
(Effective
Portion)
|
Location
of Gain
or
(Loss)
Recognized
in
Income
on
Derivative
(Ineffective
Portion
and
Amount
Excluded
from
Effectiveness
Testing)
|
Amount
of Gain or (Loss)
Recognized
in
Income
on Derivative
(Ineffective
Portion
and
Amount
Excluded
from
Effectiveness
Testing)
|
||||||||||||||||||||||
Three
Months Ended
|
Three
Months Ended
|
Three
Months Ended
|
||||||||||||||||||||||||
September
30,
|
September
30,
|
September
30,
|
||||||||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||||
Interest
rate contracts
|
$ | (390 | ) | $ | (27 | ) |
Interest
Charges
|
$ | (192 | ) | $ | (164 | ) |
Interest
Charges
|
$ | - | $ | - |
Amount
of Gain or (Loss)
Recognized
in OCI on Derivative
(Effective
Portion)
|
Location
of Gain
or
(Loss)
Reclassified
From
Accumulated
OCI
into Income
(Effective
Portion)
|
Amount
of Gain or
(Loss)
Reclassified
from
Accumulated
OCI
into Income
(Effective
Portion)
|
Location
of Gain
or
(Loss)
Recognized
in
Income
on
Derivative
(Ineffective
Portion
and
Amount
Excluded
from
Effectiveness
Testing)
|
Amount
of Gain or
(Loss)
Recognized
in
Income on Derivative
(Ineffective
Portion
and
Amount
Excluded
from
Effectiveness
Testing)
|
||||||||||||||||||||||
Nine
Months Ended
|
Nine
Months Ended
|
Nine
Months Ended
|
||||||||||||||||||||||||
September
30,
|
September
30,
|
September
30,
|
||||||||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||||
Interest
rate contracts
|
$ | 514 | $ | 113 |
Interest
Charges
|
$ | (548 | ) | $ | (443 | ) |
Interest
Charges
|
$ | - | $ | - |
Derivatives
Not Designated as Hedging Instruments under GAAP
|
||||||||||||||||||
Location
of Gain or (Loss) Recognized in Income on Derivative
|
Amount
of Gain or (Loss)
Recognized
in Income on
Derivative
|
Amount
of Gain or (Loss) Recognized in Income
on
Derivative
|
||||||||||||||||
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||||
Energy
related commodity contracts
|
Operating
Revenues - Non Utility
|
$
|
1,541
|
$
|
71,903
|
$
|
(12,019
|
)
|
$
|
2,116
|
||||||||
Interest
rate contracts
|
Interest
Charges
|
(300
|
)
|
-
|
855
|
-
|
||||||||||||
Total
|
$
|
1,241
|
$
|
71,903
|
$
|
(11,164
|
)
|
$
|
2,116
|
2.
|
STOCK-BASED
COMPENSATION PLAN:
|
Grant
Date
|
Shares
Outstanding
|
Fair
Value Per Share
|
Expected
Volatility
|
Risk-Free
Interest Rate
|
|||||
Officers
& Key Employees -
|
Jan.
2007
|
37,991
|
$
|
29.210
|
18.5%
|
4.9%
|
|||
Jan.
2008
|
42,823
|
$
|
34.030
|
21.7%
|
2.9%
|
||||
Jan.
2009
|
39,037
|
$
|
39.350
|
28.6%
|
1.2%
|
||||
Directors
-
|
Dec.
2006
|
9,261
|
$
|
34.020
|
-
|
-
|
|||
Jan.
2008
|
8,667
|
$
|
36.355
|
-
|
-
|
||||
Jan.
2009
|
9,559
|
$
|
40.265
|
-
|
-
|
||||
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Officers
& Key Employees
|
$
|
335
|
$
|
286
|
$
|
1,005
|
$
|
858
|
||||||||
Directors
|
82
|
67
|
247
|
201
|
||||||||||||
Total
Cost
|
417
|
353
|
1,252
|
1,059
|
||||||||||||
Capitalized
|
(43
|
)
|
(37
|
)
|
(128
|
)
|
(112
|
)
|
||||||||
Net
Expense
|
$
|
374
|
$
|
316
|
$
|
1,124
|
$
|
947
|
Weighted
Average
|
||||||||||||
Officers
& Other
|
Grant
Date
|
|||||||||||
Key
Employees
|
Directors
|
Fair
Value
|
||||||||||
Nonvested
Shares Outstanding, January 1, 2009
|
83,103
|
17,928
|
$
|
32.386
|
||||||||
Granted
|
41,437
|
9,559
|
39.522
|
|||||||||
Forfeited
|
(4,689
|
)
|
-
|
36.102
|
||||||||
Nonvested
Shares Outstanding, September 30, 2009
|
119,851
|
27,487
|
$
|
34.737
|
3.
|
DISCONTINUED
OPERATIONS:
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Loss
before Income Taxes:
|
||||||||||||||||
Sand
Mining
|
$
|
(22
|
)
|
$
|
(22
|
)
|
$
|
(77
|
)
|
$
|
(73
|
)
|
||||
Fuel
Oil
|
(3
|
)
|
(95
|
)
|
(12
|
)
|
(83
|
)
|
||||||||
Income
Tax Benefits
|
9
|
41
|
31
|
55
|
||||||||||||
Loss
from Discontinued Operations — Net
|
$
|
(16
|
)
|
$
|
(76
|
)
|
$
|
(58
|
)
|
$
|
(101
|
)
|
||||
Earnings
Per Common Share from
|
||||||||||||||||
Discontinued
Operations — Net:
|
||||||||||||||||
Basic
|
$
|
(0.001
|
)
|
$
|
(0.002
|
)
|
$
|
(0.002
|
)
|
$
|
(0.004
|
)
|
||||
Diluted
|
$
|
(0.001
|
)
|
$
|
(0.003
|
)
|
$
|
(0.002
|
)
|
$
|
(0.004
|
)
|
4.
|
COMMON
STOCK:
|
2009
|
||||
Beginning
Balance, January 1
|
29,728,697
|
|||
New
Issues During Period:
|
||||
Stock-Based
Compensation Plan
|
67,535
|
|||
Ending
Balance, September 30
|
29,796,232
|
5.
|
FINANCIAL
INSTRUMENTS:
|
6.
|
SEGMENTS
OF BUSINESS:
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Operating
Revenues:
|
||||||||||||||||
Gas
Utility Operations
|
$
|
56,305
|
$
|
64,563
|
$
|
364,253
|
$
|
396,038
|
||||||||
Wholesale
Gas Operations
|
4,337
|
79,828
|
78,352
|
76,225
|
||||||||||||
Retail
Gas and Other Operations
|
20,482
|
37,670
|
81,641
|
138,635
|
||||||||||||
Retail
Electric Operations
|
35,725
|
15,313
|
70,187
|
48,876
|
||||||||||||
On-Site
Energy Production
|
9,528
|
14,123
|
28,228
|
37,092
|
||||||||||||
Appliance
Service Operations
|
4,002
|
4,891
|
13,233
|
14,100
|
||||||||||||
Corporate
& Services
|
4,375
|
4,139
|
14,536
|
13,135
|
||||||||||||
Subtotal
|
134,754
|
220,527
|
650,430
|
724,101
|
||||||||||||
Intersegment
Sales
|
(7,667
|
)
|
(10,114
|
)
|
(26,684
|
)
|
(29,801
|
)
|
||||||||
Total
Operating Revenues
|
$
|
127,087
|
$
|
210,413
|
$
|
623,746
|
$
|
694,300
|
||||||||
Operating
Income:
|
||||||||||||||||
Gas
Utility Operations
|
$
|
233
|
$
|
1,184
|
$
|
55,522
|
$
|
58,613
|
||||||||
Wholesale
Gas Operations
|
(898
|
)
|
72,122
|
17,843
|
34,474
|
|||||||||||
Retail
Gas and Other Operations
|
(49
|
)
|
322
|
(134
|
)
|
2,311
|
||||||||||
Retail
Electric Operations
|
(753
|
)
|
619
|
(10,441
|
)
|
1,656
|
||||||||||
On-Site
Energy Production
|
1,140
|
4,094
|
5,082
|
9,030
|
||||||||||||
Appliance
Service Operations
|
142
|
752
|
757
|
1,780
|
||||||||||||
Corporate
and Services
|
270
|
234
|
1,001
|
1,088
|
||||||||||||
Total
Operating Income
|
$
|
85
|
$
|
79,327
|
$
|
69,630
|
$
|
108,952
|
||||||||
Depreciation
and Amortization:
|
||||||||||||||||
Gas
Utility Operations
|
$
|
7,287
|
$
|
7,804
|
$
|
24,101
|
$
|
23,283
|
||||||||
Wholesale
Gas Operations
|
78
|
28
|
68
|
59
|
||||||||||||
Retail
Gas and Other Operations
|
6
|
4
|
16
|
13
|
||||||||||||
Appliance
Services Operations
|
76
|
73
|
219
|
227
|
||||||||||||
On-Site
Energy Production
|
933
|
784
|
2,747
|
2,289
|
||||||||||||
Corporate
and Services
|
135
|
111
|
378
|
312
|
||||||||||||
Total Depreciation
and Amortization
|
$
|
8,515
|
$
|
8,804
|
$
|
27,529
|
$
|
26,183
|
||||||||
Interest
Charges:
|
||||||||||||||||
Gas
Utility Operations
|
$
|
4,085
|
$
|
4,586
|
$
|
12,334
|
$
|
14,179
|
||||||||
Wholesale
Gas Operations
|
43
|
201
|
305
|
407
|
||||||||||||
Retail
Gas and Other Operations
|
7
|
3
|
7
|
111
|
||||||||||||
On-Site
Energy Production
|
1,133
|
905
|
1,479
|
2,515
|
||||||||||||
Corporate
and Services
|
136
|
317
|
575
|
942
|
||||||||||||
Subtotal
|
5,404
|
6,012
|
14,700
|
18,154
|
||||||||||||
Intersegment
Borrowings
|
(106
|
)
|
(267
|
)
|
(397
|
)
|
(908
|
)
|
||||||||
Total
Interest Charges
|
$
|
5,298
|
$
|
5,745
|
$
|
14,303
|
$
|
17,246
|
||||||||
Income
Taxes:
|
||||||||||||||||
Gas
Utility Operations
|
$
|
(1,665
|
)
|
$
|
(1,306
|
)
|
$
|
18,051
|
$
|
18,706
|
||||||
Wholesale
Gas Operations
|
(280
|
)
|
29,554
|
7,553
|
14,199
|
|||||||||||
Retail
Gas and Other Operations
|
(19
|
)
|
133
|
(40
|
)
|
930
|
||||||||||
Retail
Electric Operations
|
(309
|
)
|
254
|
(4,289
|
)
|
672
|
||||||||||
On-Site
Energy Production
|
(1,221
|
)
|
1,245
|
(1,912
|
)
|
2,554
|
||||||||||
Appliance
Service Operations
|
83
|
322
|
349
|
778
|
||||||||||||
Corporate
and Services
|
205
|
165
|
356
|
406
|
||||||||||||
Total
Income Taxes
|
$
|
(3,206
|
)
|
$
|
30,367
|
$
|
20,068
|
$
|
38,245
|
|||||||
Property
Additions:
|
||||||||||||||||
Gas
Utility Operations
|
$
|
24,111
|
$
|
13,900
|
$
|
57,732
|
$
|
37,171
|
||||||||
Wholesale
Gas Operations
|
8
|
1,359
|
14
|
4,697
|
||||||||||||
Retail
Gas and Other Operations
|
-
|
-
|
14
|
-
|
||||||||||||
Appliance
Service Operations
|
135
|
5
|
504
|
25
|
||||||||||||
On-Site
Energy Production
|
3,980
|
1,340
|
5,338
|
2,581
|
||||||||||||
Corporate
and Services
|
77
|
(664
|
)
|
242
|
44
|
|||||||||||
Total
Property Additions
|
$
|
28,311
|
$
|
15,940
|
$
|
63,844
|
$
|
44,518
|
September
30,
2009
|
December
31,
2008
|
|||||||
Identifiable
Assets:
|
||||||||
Gas
Utility Operations
|
$
|
1,310,748
|
$
|
1,354,015
|
||||
Wholesale
Gas Operations
|
152,873
|
196,487
|
||||||
Retail
Gas and Other Operations
|
29,822
|
42,939
|
||||||
Retail
Electric Operations
|
12,208
|
5,594
|
||||||
On-Site
Energy Production
|
132,483
|
123,913
|
||||||
Appliance
Service Operations
|
19,189
|
17,704
|
||||||
Discontinued
Operations
|
1,200
|
1,409
|
||||||
Corporate
and Services
|
50,447
|
91,641
|
||||||
Subtotal
|
1,708,970
|
1,833,702
|
||||||
Intersegment
Assets
|
(22,369
|
)
|
(40,275
|
)
|
||||
Total
Identifiable Assets
|
$
|
1,686,601
|
$
|
1,793,427
|
7.
|
RATES
AND REGULATORY ACTIONS:
|
8.
|
REGULATORY
ASSETS & REGULATORY
LIABILITIES:
|
September
30, 2009
|
December
31, 2008
|
|||||||
Environmental
Remediation Costs:
|
||||||||
Expended
- Net
|
$
|
48,944
|
$
|
48,143
|
||||
Liability
for Future Expenditures
|
65,679
|
64,093
|
||||||
Income
Taxes-Flowthrough Depreciation
|
1,996
|
2,729
|
||||||
Deferred
Asset Retirement Obligation Costs
|
22,299
|
21,901
|
||||||
Deferred
Gas Costs - Net
|
4,587
|
18,406
|
||||||
Deferred
Pension and Other Postretirement Benefit Costs
|
79,879
|
80,162
|
||||||
Conservation
Incentive Program Receivable
|
14,535
|
22,048
|
||||||
Societal
Benefit Costs Receivable
|
625
|
1,753
|
||||||
Premium
for Early Retirement of Debt
|
1,086
|
1,208
|
||||||
Other
Regulatory Assets
|
7,161
|
9,991
|
||||||
Total
Regulatory Assets
|
$
|
246,791
|
$
|
270,434
|
September
30, 2009
|
December
31, 2008
|
|||||||
Excess
Plant Removal Costs
|
$
|
48,689
|
$
|
48,820
|
||||
Other
Regulatory Liabilities
|
2,261
|
1,627
|
||||||
Total
Regulatory Liabilities
|
$
|
50,950
|
$
|
50,447
|
9.
|
PENSION
AND OTHER POSTRETIREMENT BENEFITS:
|
Pension
Benefits
|
||||||||||||||||
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Service
Cost
|
$
|
806
|
$
|
800
|
$
|
2,419
|
$
|
2,399
|
||||||||
Interest
Cost
|
2,174
|
2,080
|
6,521
|
6,240
|
||||||||||||
Expected
Return on Plan Assets
|
(1,888
|
)
|
(2,605
|
)
|
(5,665
|
)
|
(7,814
|
)
|
||||||||
Amortizations:
|
||||||||||||||||
Prior
Service Cost
|
70
|
73
|
209
|
219
|
||||||||||||
Actuarial
Loss
|
1,351
|
402
|
4,053
|
1,206
|
||||||||||||
Net
Periodic Benefit Cost
|
2,513
|
750
|
7,537
|
2,250
|
||||||||||||
Capitalized
Benefit Costs
|
(949
|
)
|
(263
|
)
|
(2,848
|
)
|
(788
|
)
|
||||||||
Total
Net Periodic Benefit Expense
|
$
|
1,564
|
$
|
487
|
$
|
4,689
|
$
|
1,462
|
Other
Postretirement Benefits
|
||||||||||||||||
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Service
Cost
|
$
|
223
|
$
|
242
|
$
|
670
|
$
|
726
|
||||||||
Interest
Cost
|
802
|
739
|
2,406
|
2,217
|
||||||||||||
Expected
Return on Plan Assets
|
(388
|
)
|
(549
|
)
|
(1,164
|
)
|
(1,646
|
)
|
||||||||
Amortizations:
|
||||||||||||||||
Prior
Service Credits
|
(89
|
)
|
(89
|
)
|
(266
|
)
|
(266
|
)
|
||||||||
Actuarial
Loss
|
503
|
186
|
1,422
|
558
|
||||||||||||
Net
Periodic Benefit Cost
|
1,051
|
529
|
3,068
|
1,589
|
||||||||||||
Capitalized
Benefit Costs
|
(480
|
)
|
(188
|
)
|
(1,257
|
)
|
(563
|
)
|
||||||||
Total
Net Periodic Benefit Expense
|
$
|
571
|
$
|
341
|
$
|
1,811
|
$
|
1,026
|
10.
|
RETAINED
EARNINGS:
|
11.
|
UNUSED
LINES OF CREDIT:
|
Company
|
Total
Facility
|
Usage
(A)
|
Available
Liquidity
|
Expiration
Date
|
|||||||||
SJG:
|
|||||||||||||
Revolving
Credit Facility
|
$
|
100,000
|
$
|
80,100
|
$
|
19,900
|
August
2011
|
||||||
Line
of Credit
|
40,000
|
—
|
40,000
|
December
2009 (B)
|
|||||||||
Uncommitted
Bank Lines
|
45,000
|
6,500
|
38,500
|
Various
|
|||||||||
Total
SJG
|
185,000
|
86,600
|
98,400
|
||||||||||
SJI:
|
|||||||||||||
Revolving
Credit Facility
|
$
|
200,000
|
$
|
172,300
|
$
|
27,700
|
August
2011
|
||||||
Uncommitted
Bank Lines
|
30,000
|
6,300
|
23,700
|
Various
|
|||||||||
Total
SJI
|
230,000
|
178,600
|
51,400
|
||||||||||
Total
|
$
|
415,000
|
$
|
265,200
|
$
|
149,800
|
|
(A)
|
Includes
letters of credit in the amount of $109.4
million.
|
|
(B)
|
The
Company anticipates extending this line of credit during the fourth
quarter of 2009.
|
12.
|
COMMITMENTS
AND CONTINGENCIES:
|
13.
|
FAIR
VALUE OF FINANCIAL ASSETS AND FINANCIAL
LIABILITIES:
|
|
·
|
Level
1: Observable inputs such as quoted prices in active markets
for identical assets or
liabilities.
|
|
·
|
Level
2: Inputs other than quoted prices that are observable for the
asset or liability, either directly or indirectly; these include quoted
prices for similar assets or liabilities in active markets and quoted
prices for identical or similar assets or liabilities in markets that are
not active.
|
|
·
|
Level
3: Unobservable inputs that reflect the reporting entity’s own
assumptions.
|
Total
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Assets
|
||||||||||||||||
Available-for-Sale
Securities (A)
|
$
|
5,712
|
$
|
5,712
|
$
|
-
|
$
|
-
|
||||||||
Derivatives
– Energy Related Assets (B)
|
58,797
|
31,140
|
27,153
|
504
|
||||||||||||
$
|
64,509
|
$
|
36,852
|
$
|
27,153
|
$
|
504
|
|||||||||
Liabilities
|
||||||||||||||||
Derivatives
– Energy Related Liabilities (B)
|
$
|
44,627
|
$
|
22,016
|
$
|
9,719
|
$
|
12,892
|
||||||||
Derivatives
– Other (C)
|
8,464
|
-
|
8,464
|
-
|
||||||||||||
$
|
53,091
|
$
|
22,016
|
$
|
18,183
|
$
|
12,892
|
Three
Months
|
Nine
Months
|
|||||||
Balance
at beginning of period
|
$ |
(11,594
|
)
|
$ |
101
|
|||
Total
losses (realized/unrealized) included in earnings
|
(753
|
)
|
(11,978
|
)
|
||||
Transfers
in and/or out of Level 3, net
|
-
|
-
|
||||||
Purchases,
sales, issuances and settlements, net
|
(40
|
)
|
(510
|
)
|
||||
Balance
at September 30, 2009
|
$
|
(12,387
|
)
|
$
|
(12,387
|
)
|
14.
|
AVAILABLE–FOR–SALE
SECURITIES:
|
Less
than 12 Months
|
Greater
Than 12 Months
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
Marketable
Equity Securities
|
$
|
-
|
$
|
-
|
$
|
4,245
|
$
|
655
|
$
|
4,245
|
$
|
655
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Utility Throughput – dth:
|
||||||||||||||||
Firm
Sales -
|
||||||||||||||||
Residential
|
1,706
|
1,559
|
16,070
|
14,490
|
||||||||||||
Commercial
|
673
|
652
|
4,319
|
4,065
|
||||||||||||
Industrial
|
26
|
13
|
231
|
103
|
||||||||||||
Cogeneration
& Electric Generation
|
176
|
156
|
278
|
528
|
||||||||||||
Firm
Transportation -
|
||||||||||||||||
Residential
|
139
|
136
|
1,410
|
1,351
|
||||||||||||
Commercial
|
647
|
598
|
4,132
|
3,927
|
||||||||||||
Industrial
|
2,906
|
3,095
|
8,875
|
9,542
|
||||||||||||
Cogeneration
& Electric Generation
|
799
|
1,115
|
1,518
|
2,040
|
||||||||||||
Total
Firm Throughput
|
7,072
|
7,324
|
36,833
|
36,046
|
||||||||||||
Interruptible
Sales
|
-
|
1
|
4
|
28
|
||||||||||||
Interruptible
Transportation
|
492
|
509
|
1,700
|
2,034
|
||||||||||||
Off-System
|
544
|
1,458
|
4,309
|
7,330
|
||||||||||||
Capacity
Release
|
10,560
|
20,196
|
28,023
|
47,253
|
||||||||||||
Total
Throughput - Utility
|
18,668
|
29,488
|
70,869
|
92,691
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Utility Operating Revenues:
|
||||||||||||||||
Firm
Sales -
|
||||||||||||||||
Residential
|
$
|
33,929
|
$
|
26,587
|
$
|
243,212
|
$
|
214,098
|
||||||||
Commercial
|
9,129
|
9,650
|
53,663
|
53,449
|
||||||||||||
Industrial
|
309
|
874
|
2,637
|
6,051
|
||||||||||||
Cogeneration
& Electric Generation
|
1,267
|
2,166
|
2,312
|
7,453
|
||||||||||||
Firm
Transportation -
|
||||||||||||||||
Residential
|
1,090
|
1,081
|
7,413
|
7,161
|
||||||||||||
Commercial
|
2,449
|
2,124
|
13,435
|
12,532
|
||||||||||||
Industrial
|
3,638
|
2,974
|
10,841
|
9,247
|
||||||||||||
Cogeneration
& Electric Generation
|
681
|
599
|
1,474
|
1,356
|
||||||||||||
Total
Firm Revenues
|
52,492
|
46,055
|
334,987
|
311,347
|
||||||||||||
Interruptible
Sales
|
(16
|
)
|
22
|
79
|
304
|
|||||||||||
Interruptible
Transportation
|
465
|
334
|
1,551
|
1,301
|
||||||||||||
Off-System
|
1,904
|
14,403
|
23,154
|
72,989
|
||||||||||||
Capacity
Release
|
1,171
|
3,512
|
3,594
|
9,265
|
||||||||||||
Other
|
289
|
237
|
888
|
832
|
||||||||||||
56,305
|
64,563
|
364,253
|
396,038
|
|||||||||||||
Less:
Intercompany Sales
|
(347
|
)
|
(876
|
)
|
(3,731
|
)
|
(2,776
|
)
|
||||||||
Total
Utility Operating Revenues
|
55,958
|
63,687
|
360,522
|
393,262
|
||||||||||||
Less:
|
||||||||||||||||
Cost
of Sales
|
31,377
|
40,324
|
223,876
|
261,604
|
||||||||||||
Conservation
Recoveries*
|
1,247
|
1,116
|
6,636
|
6,149
|
||||||||||||
RAC
Recoveries*
|
1,210
|
695
|
3,627
|
2,084
|
||||||||||||
EET
Recoveries*
|
81
|
-
|
81
|
-
|
||||||||||||
Revenue
Taxes
|
923
|
871
|
6,264
|
5,913
|
||||||||||||
Utility
Margin
|
$
|
21,120
|
$
|
20,681
|
$
|
120,038
|
$
|
117,512
|
||||||||
Margin:
|
||||||||||||||||
Residential
|
$
|
12,699
|
$
|
12,094
|
$
|
74,836
|
$
|
69,230
|
||||||||
Commercial
and Industrial
|
6,325
|
6,185
|
28,779
|
27,334
|
||||||||||||
Cogeneration
and Electric Generation
|
875
|
641
|
1,750
|
1,540
|
||||||||||||
Interruptible
|
8
|
11
|
96
|
92
|
||||||||||||
Off-system
& Capacity Release
|
208
|
572
|
1,108
|
2,160
|
||||||||||||
Other
Revenues
|
859
|
1,085
|
2,075
|
1,868
|
||||||||||||
Margin
Before Weather Normalization & Decoupling
|
20,974
|
20,588
|
108,644
|
102,224
|
||||||||||||
CIRT
Mechanism
|
551
|
-
|
926
|
-
|
||||||||||||
CIP
Mechanism
|
(409
|
)
|
93
|
10,464
|
15,288
|
|||||||||||
EET
Mechanism
|
4
|
-
|
4
|
-
|
||||||||||||
Utility
Margin
|
$
|
21,120
|
$
|
20,681
|
$
|
120,038
|
$
|
117,512
|
||||||||
Degree Days:
|
34
|
18
|
3,033
|
2,753
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
Income Benefit:
|
||||||||||||||||
CIP
– Weather Related
|
$
|
-
|
$
|
-
|
$
|
(0.1
|
)
|
$
|
1.6
|
|||||||
CIP
– Usage Related
|
(0.2
|
)
|
0.1
|
6.3
|
7.4
|
|||||||||||
Total
Net Income Benefit
|
$
|
(0.2
|
)
|
$
|
0.1
|
$
|
6.2
|
$
|
9.0
|
|||||||
Weather
Compared to 20-Year Average
|
30.5%
warmer
|
62.5%
warmer
|
0.2% colder
|
9.0%
warmer
|
||||||||||||
Weather
Compared to Prior Year
|
85.3% colder
|
14.3%
warmer
|
10.2%
colder
|
7.8%
warmer
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||||||||||
2009
|
2008
|
Change
|
2009
|
2008
|
Change
|
|||||||||||||||||||
SJRG
Revenue
|
$
|
4.3
|
$
|
79.8
|
$
|
(75.5
|
)
|
$
|
78.1
|
$
|
75.9
|
$
|
2.2
|
|||||||||||
Add:
Unrealized Losses (Subtract: Unrealized Gains)
|
(2.4
|
)
|
(71.7
|
)
|
69.3
|
(0.6
|
)
|
(2.0
|
)
|
1.4
|
||||||||||||||
SJRG
Revenue, Excluding Unrealized Losses (Gains)
|
$
|
1.9
|
$
|
8.1
|
$
|
(6.2
|
)
|
$
|
77.5
|
$
|
73.9
|
$
|
3.6
|
|
§
|
Gross
margin for SJRG decreased $72.9 million and $16.2 million for the three
and nine months ended September 30, 2009 compared with the same periods in
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 $3.6 million and $14.8 million for the three and
nine months ended September 30, 2009, respectively, compared with the same
periods in 2008 due 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 summer injection season of 2008, NYMEX prices increased
significantly. Typical to our business cycle, prior to the summer
injection season, 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 summer injection
season of 2009, just the opposite occurred as NYMEX prices fell
considerably and our hedge contracts were settled at significant losses
which were also recorded into earnings. However, during this period we
were able to purchase physical injection gas at relatively low
prices.
|
|
§
|
Gross
margin for Marina decreased $2.3 million and $3.1 million for the three
and nine months ended September 30, 2009, respectively, compared with the
same periods in 2008 due mainly to a decrease in chilled and hot water
billing rates. Gross margin as a percentage of Operating Revenues
increased 1.6 and 5.2 percentage points in the three and nine months ended
September 30, 2009, respectively, compared with the same periods in 2008
due 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 $0.7 million and $2.5 million
for the three and nine months ended September 30, 2009, respectively,
compared with the same periods in 2008 due mainly to lower customer counts
(See Operating Revenues – Nonutility). 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 for the
three and nine months ended September 30, 2009 compared with the same
periods in 2008.
|
|
§
|
Gross
margin from SJE’s retail electricity sales decreased $1.0 million and
$11.6 million in the three and nine months ended September 30, 2009,
respectively, compared with the same periods in 2008. Excluding the impact
of a $0.9 million and $12.5 million increase in unrealized losses recorded
on forward financial contracts for the three and nine months ended
September 30, 2009, gross margin decreased $0.1 million and increased $0.9
million in the three and nine months ended September 30, 2009 compared
with the same periods in 2008. Margins for the comparative three month
periods 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. For the nine month comparative periods, the impact of the
items noted above were more than offset by 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 5.3 and 1.7 percentage points for the three and nine months
ended September 30, 2009, respectively, compared with the same periods in
2008.
|
|
§
|
Gross
margin for SJESP decreased $0.5 million and $0.6 million during the three
and nine months ended September 30, 2009 compared with the same periods in
2008. Gross margin as a percentage of Operating Revenues
decreased 2.8 percentage points and 2.0 percentage points for the three
and nine months ended September 30, 2009, respectively, compared with the
same periods in 2008 due mainly to higher personnel-related
costs.
|
Three
Months Ended
September
30, 2009 vs. 2008
|
Nine
Months Ended
September
30, 2009 vs. 2008
|
|||||||
Utility
|
$
|
1,351
|
$
|
6,062
|
||||
Nonutility:
|
||||||||
Wholesale
Gas
|
156
|
430
|
||||||
Retail
Gas and Other
|
(353)
|
(33)
|
||||||
Retail
Electricity
|
348
|
453
|
||||||
On-Site
Energy Production
|
577
|
956
|
||||||
Appliance
Service
|
112
|
409
|
||||||
Total
Nonutility
|
840
|
2,215
|
||||||
Intercompany
Eliminations and Other
|
(70)
|
(48)
|
||||||
Total
Operations
|
$
|
2,121
|
$
|
8,229
|
Company
|
Total
Facility
|
Usage
(A)
|
Available
Liquidity
|
Expiration
Date
|
|||||||||
SJG:
|
|||||||||||||
Revolving
Credit Facility
|
$
|
100,000
|
$
|
80,100
|
$
|
19,900
|
August
2011
|
||||||
Line
of Credit
|
40,000
|
—
|
40,000
|
December
2009 (B)
|
|||||||||
Uncommitted
Bank Lines
|
45,000
|
6,500
|
38,500
|
Various
|
|||||||||
Total
SJG
|
185,000
|
86,600
|
98,400
|
||||||||||
SJI:
|
|||||||||||||
Revolving
Credit Facility
|
$
|
200,000
|
$
|
172,300
|
$
|
27,700
|
August
2011
|
||||||
Uncommitted
Bank Lines
|
30,000
|
6,300
|
23,700
|
Various
|
|||||||||
Total
SJI
|
230,000
|
178,600
|
51,400
|
||||||||||
Total
|
$
|
415,000
|
$
|
265,200
|
$
|
149,800
|
(A)
|
Includes
letters of credit in the amount of $109.4
million.
|
|
(B)
|
The
Company anticipates extending this line of credit during the fourth
quarter of 2009.
|
As
of
September
30, 2009
|
As
of
December
31, 2008
|
|||||||
Common
Equity
|
50.7
|
%
|
47.4
|
%
|
||||
Long-Term
Debt
|
34.3
|
33.0
|
||||||
Short-Term
Debt
|
15.0
|
19.6
|
||||||
Total
|
100.0
|
%
|
100.0
|
%
|
Assets
|
||||||||||||||||
Source of Fair
Value
|
Maturity
< 1 Year
|
Maturity
1 - 3 Years
|
Maturity
Beyond 3 Years
|
Total
|
||||||||||||
Prices
actively quoted
|
$
|
25,548
|
$
|
5,496
|
$
|
96
|
$
|
31,140
|
||||||||
Prices
provided by other external sources
|
19,672
|
7,358
|
123
|
27,153
|
||||||||||||
Prices
based on internal models or other valuation methods
|
436
|
68
|
-
|
504
|
||||||||||||
Total
|
$
|
45,656
|
$
|
12,922
|
$
|
219
|
$
|
58,797
|
Liabilities
|
||||||||||||||||
Source of Fair Value
|
Maturity
< 1 Year
|
Maturity
1 - 3 Years
|
Maturity
Beyond 3 Years
|
Total
|
||||||||||||
Prices
actively quoted
|
$
|
15,827
|
$
|
6,130
|
$
|
59
|
$
|
22,016
|
||||||||
Prices
provided by other external sources
|
6,049
|
3,655
|
15
|
9,719
|
||||||||||||
Prices
based on internal models or other valuation methods
|
10,496
|
2,315
|
81
|
12,892
|
||||||||||||
Total
|
$
|
32,372
|
$
|
12,100
|
$
|
155
|
$
|
44,627
|
Net
Derivatives — Energy Related Assets, January 1, 2009
|
$
|
16,289
|
||
Contracts
Settled During Nine Months Ended September 30, 2009, Net
|
(6,991
|
)
|
||
Other
Changes in Fair Value from Continuing and New Contracts,
Net
|
4,872
|
|||
Net
Derivatives — Energy Related Assets September 30,
2009
|
$
|
14,170
|
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
|
Period
|
Total
Number of Shares Purchased1
|
Average
Price Paid Per Share1
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs2
|
Maximum
Number of Shares that May Yet be Purchased Under the Plans or
Programs2
|
||||||||||||
July
2009
|
30,596
|
$
|
36.4057
|
-
|
-
|
|||||||||||
August 2009
|
4,508
|
$
|
34.9408
|
-
|
-
|
|||||||||||
September 2009
|
-
|
-
|
-
|
-
|
||||||||||||
Total
|
35,104
|
-
|
-
|
Exhibit
No.
|
Description
|
|
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange
Act.
|
||
Certification
of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange
Act.
|
||
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(b) of the Exchange Act
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United
States Code).
|
||
Certification
of Chief Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United
States Code).
|
SOUTH
JERSEY INDUSTRIES, INC.
|
|||
(Registrant)
|
|||
Dated:
November 6, 2009
|
By:
/
|
s/
Edward J. Graham
|
|
Edward
J. Graham
|
|||
Chairman,
President & Chief Executive Officer
|
|||
Dated:
November 6, 2009
|
By:
|
/s/
David A. Kindlick
|
|
David
A. Kindlick
|
|||
Vice
President & Chief Financial
Officer
|