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 For the transition period from ____________________ to ______________________ |
Commission File Number | Exact name of registrant as specified in its charter and principal office address and telephone number | State of Incorporation | I.R.S. Employer Identification No. |
1-6364 | South Jersey Industries, Inc. 1 South Jersey Plaza Folsom, NJ 08037 (609) 561-9000 | New Jersey | 22-1901645 |
000-22211 | South Jersey Gas Company 1 South Jersey Plaza Folsom, NJ 08037 (609) 561-9000 | New Jersey | 21-0398330 |
South Jersey Industries, Inc.: | ||
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o |
Smaller reporting company o | Emerging growth company o | |
South Jersey Gas Company: | ||
Large accelerated filer o | Accelerated filer o | Non-accelerated filer x |
Smaller reporting company o | Emerging growth company o |
PART I | FINANCIAL INFORMATION | Page No. |
Item 1. | Financial Statements (Unaudited) | |
South Jersey Industries, Inc. | ||
South Jersey Gas Company | ||
South Jersey Industries, Inc. and South Jersey Gas Company - Combined | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | OTHER INFORMATION | |
Item 1. | ||
Item 1A. | ||
Item 6. | ||
Three Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Operating Revenues (See Note 16): | |||||||
Utility | $ | 75,603 | $ | 81,938 | |||
Nonutility | 151,727 | 162,436 | |||||
Total Operating Revenues | 227,330 | 244,374 | |||||
Operating Expenses: | |||||||
Cost of Sales - (Excluding depreciation) | |||||||
- Utility | 18,181 | 32,331 | |||||
- Nonutility | 127,615 | 147,354 | |||||
Operations (See Note 1) | 58,007 | 37,296 | |||||
Impairment Charges | 99,233 | — | |||||
Maintenance | 6,812 | 4,672 | |||||
Depreciation | 24,771 | 24,556 | |||||
Energy and Other Taxes | 1,243 | 1,551 | |||||
Total Operating Expenses | 335,862 | 247,760 | |||||
Operating Loss (See Note 1) | (108,532 | ) | (3,386 | ) | |||
Other Income and Expense (See Note 1) | 974 | 1,139 | |||||
Interest Charges | (19,561 | ) | (10,979 | ) | |||
Loss Before Income Taxes | (127,119 | ) | (13,226 | ) | |||
Income Taxes | 31,972 | 5,544 | |||||
Equity in Earnings of Affiliated Companies | 1,354 | 70 | |||||
Loss from Continuing Operations | (93,793 | ) | (7,612 | ) | |||
Loss from Discontinued Operations - (Net of tax benefit) | (26 | ) | (47 | ) | |||
Net Loss | $ | (93,819 | ) | $ | (7,659 | ) | |
Basic Earnings Per Common Share: | |||||||
Continuing Operations | $ | (1.12 | ) | $ | (0.10 | ) | |
Discontinued Operations | — | — | |||||
Basic Earnings Per Common Share | $ | (1.12 | ) | $ | (0.10 | ) | |
Average Shares of Common Stock Outstanding - Basic | 84,080 | 79,549 | |||||
Diluted Earnings Per Common Share: | |||||||
Continuing Operations | $ | (1.12 | ) | $ | (0.10 | ) | |
Discontinued Operations | — | — | |||||
Diluted Earnings Per Common Share | $ | (1.12 | ) | $ | (0.10 | ) | |
Average Shares of Common Stock Outstanding - Diluted | 84,080 | 79,549 | |||||
Dividends Declared Per Common Share | $ | 0.28 | $ | 0.27 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Operating Revenues (See Note 16): | |||||||
Utility | $ | 307,371 | $ | 277,707 | |||
Nonutility | 441,904 | 392,496 | |||||
Total Operating Revenues | 749,275 | 670,203 | |||||
Operating Expenses: | |||||||
Cost of Sales - (Excluding depreciation) | |||||||
- Utility | 105,298 | 103,710 | |||||
- Nonutility | 323,566 | 363,117 | |||||
Operations (See Note 1) | 105,051 | 75,744 | |||||
Impairment Charges | 99,233 | — | |||||
Maintenance | 13,674 | 9,653 | |||||
Depreciation | 49,433 | 48,879 | |||||
Energy and Other Taxes | 3,682 | 3,622 | |||||
Total Operating Expenses | 699,937 | 604,725 | |||||
Operating Income (See Note 1) | 49,338 | 65,478 | |||||
Other Income and Expense (See Note 1) | 3,735 | 5,626 | |||||
Interest Charges | (33,533 | ) | (27,724 | ) | |||
Income Before Income Taxes | 19,540 | 43,380 | |||||
Income Taxes | (4,443 | ) | (16,326 | ) | |||
Equity in Earnings of Affiliated Companies | 2,416 | 3,081 | |||||
Income from Continuing Operations | 17,513 | 30,135 | |||||
Loss from Discontinued Operations - (Net of tax benefit) | (92 | ) | (77 | ) | |||
Net Income | $ | 17,421 | $ | 30,058 | |||
Basic Earnings Per Common Share: | |||||||
Continuing Operations | $ | 0.21 | $ | 0.38 | |||
Discontinued Operations | — | — | |||||
Basic Earnings Per Common Share | $ | 0.21 | $ | 0.38 | |||
Average Shares of Common Stock Outstanding - Basic | 81,850 | 79,534 | |||||
Diluted Earnings Per Common Share: | |||||||
Continuing Operations | $ | 0.21 | $ | 0.38 | |||
Discontinued Operations | — | — | |||||
Diluted Earnings Per Common Share | $ | 0.21 | $ | 0.38 | |||
Average Shares of Common Stock Outstanding - Diluted | 82,302 | 79,670 | |||||
Dividends Declared per Common Share | $ | 0.56 | $ | 0.54 |
Three Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Net Loss | $ | (93,819 | ) | $ | (7,659 | ) | |
Other Comprehensive Income, Net of Tax:* | |||||||
Unrealized Gain on Derivatives - Other | 8 | 7 | |||||
Other Comprehensive Income - Net of Tax* | 8 | 7 | |||||
Comprehensive Loss | $ | (93,811 | ) | $ | (7,652 | ) |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Net Income | $ | 17,421 | $ | 30,058 | |||
Other Comprehensive Income, Net of Tax:* | |||||||
Unrealized Gain on Derivatives - Other | 17 | 1,522 | |||||
Other Comprehensive Income - Net of Tax* | 17 | 1,522 | |||||
Comprehensive Income | $ | 17,438 | $ | 31,580 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Net Cash Provided by Operating Activities | $ | 152,828 | $ | 123,658 | |||
Cash Flows from Investing Activities: | |||||||
Capital Expenditures | (125,973 | ) | (142,029 | ) | |||
Proceeds from Sale of Property, Plant & Equipment | — | 3,058 | |||||
Investment in Long-Term Receivables | (3,947 | ) | (4,602 | ) | |||
Proceeds from Long-Term Receivables | 5,035 | 4,948 | |||||
Notes Receivable | — | 3,000 | |||||
Purchase of Company-Owned Life Insurance | (574 | ) | (8,074 | ) | |||
Investment in Affiliate | (8,413 | ) | (19,461 | ) | |||
Net Repayment of Notes Receivable - Affiliate | 2,006 | 243 | |||||
Net Cash Used in Investing Activities | (131,866 | ) | (162,917 | ) | |||
Cash Flows from Financing Activities: | |||||||
Net (Repayments of) Borrowings from Short-Term Credit Facilities | (10,000 | ) | 200 | ||||
Proceeds from Issuance of Long-Term Debt | 1,592,500 | 321,000 | |||||
Principal Repayments of Long-Term Debt | — | (277,400 | ) | ||||
Payments for Issuance of Long-Term Debt | (13,821 | ) | (2,060 | ) | |||
Net Settlement of Restricted Stock | (776 | ) | (751 | ) | |||
Dividends on Common Stock | (22,292 | ) | (21,676 | ) | |||
Proceeds from Sale of Common Stock | 173,750 | — | |||||
Payments for the Issuance of Common Stock | (6,554 | ) | — | ||||
Net Cash Provided by Financing Activities | 1,712,807 | 19,313 | |||||
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | 1,733,769 | (19,946 | ) | ||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 39,695 | 31,910 | |||||
Cash, Cash Equivalents and Restricted Cash at End of Period | $ | 1,773,464 | $ | 11,964 |
June 30, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Property, Plant and Equipment: | |||||||
Utility Plant, at original cost | $ | 2,748,076 | $ | 2,652,244 | |||
Accumulated Depreciation | (509,797 | ) | (498,161 | ) | |||
Nonutility Property and Equipment, at cost | 171,983 | 741,027 | |||||
Accumulated Depreciation | (48,954 | ) | (194,913 | ) | |||
Property, Plant and Equipment - Net | 2,361,308 | 2,700,197 | |||||
Investments: | |||||||
Available-for-Sale Securities | 36 | 36 | |||||
Restricted | 10,664 | 31,876 | |||||
Investment in Affiliates | 72,426 | 62,292 | |||||
Total Investments | 83,126 | 94,204 | |||||
Current Assets: | |||||||
Cash and Cash Equivalents | 22,420 | 7,819 | |||||
Restricted Cash | 1,740,380 | — | |||||
Accounts Receivable | 196,601 | 202,379 | |||||
Unbilled Revenues | 24,464 | 73,377 | |||||
Provision for Uncollectibles | (13,983 | ) | (13,988 | ) | |||
Notes Receivable - Affiliate | 2,907 | 4,913 | |||||
Natural Gas in Storage, average cost | 44,086 | 48,513 | |||||
Materials and Supplies, average cost | 4,200 | 4,239 | |||||
Prepaid Taxes | 30,040 | 41,355 | |||||
Derivatives - Energy Related Assets | 23,892 | 42,139 | |||||
Assets Held For Sale | 329,622 | — | |||||
Other Prepayments and Current Assets | 19,907 | 28,247 | |||||
Total Current Assets | 2,424,536 | 438,993 | |||||
Regulatory and Other Noncurrent Assets: | |||||||
Regulatory Assets | 476,635 | 469,224 | |||||
Derivatives - Energy Related Assets | 10,283 | 5,988 | |||||
Notes Receivable - Affiliate | 13,275 | 13,275 | |||||
Contract Receivables | 28,002 | 28,721 | |||||
Goodwill | 3,578 | 3,578 | |||||
Identifiable Intangible Assets | 12,000 | 12,480 | |||||
Other | 96,754 | 98,426 | |||||
Total Regulatory and Other Noncurrent Assets | 640,527 | 631,692 | |||||
Total Assets | $ | 5,509,497 | $ | 3,865,086 |
June 30, 2018 | December 31, 2017 | ||||||
Capitalization and Liabilities | |||||||
Equity: | |||||||
Common Stock | $ | 106,882 | $ | 99,436 | |||
Premium on Common Stock | 842,327 | 709,658 | |||||
Treasury Stock (at par) | (282 | ) | (271 | ) | |||
Accumulated Other Comprehensive Loss | (36,748 | ) | (36,765 | ) | |||
Retained Earnings | 391,538 | 420,351 | |||||
Total Equity | 1,303,717 | 1,192,409 | |||||
Long-Term Debt | 1,403,802 | 1,122,999 | |||||
Total Capitalization | 2,707,519 | 2,315,408 | |||||
Current Liabilities: | |||||||
Notes Payable | 336,400 | 346,400 | |||||
Current Portion of Long-Term Debt | 1,368,809 | 63,809 | |||||
Accounts Payable | 262,090 | 284,899 | |||||
Customer Deposits and Credit Balances | 28,913 | 43,398 | |||||
Environmental Remediation Costs | 43,808 | 66,372 | |||||
Taxes Accrued | 2,529 | 2,932 | |||||
Derivatives - Energy Related Liabilities | 10,798 | 46,938 | |||||
Deferred Contract Revenues | 329 | 259 | |||||
Derivatives - Other Current | 443 | 748 | |||||
Dividends Payable | 23,941 | — | |||||
Interest Accrued | 13,016 | 9,079 | |||||
Pension Benefits | 2,388 | 2,388 | |||||
Other Current Liabilities | 21,354 | 15,860 | |||||
Total Current Liabilities | 2,114,818 | 883,082 | |||||
Deferred Credits and Other Noncurrent Liabilities: | |||||||
Deferred Income Taxes - Net | 91,690 | 86,884 | |||||
Pension and Other Postretirement Benefits | 105,789 | 101,544 | |||||
Environmental Remediation Costs | 108,054 | 106,483 | |||||
Asset Retirement Obligations | 43,807 | 59,497 | |||||
Derivatives - Energy Related Liabilities | 3,427 | 6,025 | |||||
Derivatives - Other Noncurrent | 6,252 | 9,622 | |||||
Regulatory Liabilities | 299,382 | 287,105 | |||||
Other | 28,759 | 9,436 | |||||
Total Deferred Credits and Other Noncurrent Liabilities | 687,160 | 666,596 | |||||
Commitments and Contingencies (Note 11) | |||||||
Total Capitalization and Liabilities | $ | 5,509,497 | $ | 3,865,086 |
Three Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Operating Revenues (See Note 16) | $ | 76,801 | $ | 83,251 | |||
Operating Expenses: | |||||||
Cost of Sales (Excluding depreciation) | 19,379 | 33,644 | |||||
Operations (See Note 1) | 27,268 | 22,455 | |||||
Maintenance | 6,812 | 4,672 | |||||
Depreciation | 14,401 | 12,873 | |||||
Energy and Other Taxes | 498 | 872 | |||||
Total Operating Expenses | 68,358 | 74,516 | |||||
Operating Income (See Note 1) | 8,443 | 8,735 | |||||
Other Income and Expense (See Note 1) | 607 | 1,039 | |||||
Interest Charges | (6,999 | ) | (6,077 | ) | |||
Income Before Income Taxes | 2,051 | 3,697 | |||||
Income Taxes | (482 | ) | (1,431 | ) | |||
Net Income | $ | 1,569 | $ | 2,266 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Operating Revenues (See Note 16) | $ | 311,260 | $ | 280,065 | |||
Operating Expenses: | |||||||
Cost of Sales (Excluding depreciation) | 109,187 | 106,068 | |||||
Operations (See Note 1) | 56,638 | 46,630 | |||||
Maintenance | 13,674 | 9,653 | |||||
Depreciation | 28,764 | 25,587 | |||||
Energy and Other Taxes | 1,753 | 2,167 | |||||
Total Operating Expenses | 210,016 | 190,105 | |||||
Operating Income (See Note 1) | 101,244 | 89,960 | |||||
Other Income and Expense (See Note 1) | 3,117 | 2,081 | |||||
Interest Charges | (13,727 | ) | (11,955 | ) | |||
Income Before Income Taxes | 90,634 | 80,086 | |||||
Income Taxes | (22,318 | ) | (31,342 | ) | |||
Net Income | $ | 68,316 | $ | 48,744 |
Three Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Net Income | $ | 1,569 | $ | 2,266 | |||
Other Comprehensive Income - Net of Tax: * | |||||||
Unrealized Gain on Derivatives - Other | 8 | 7 | |||||
Other Comprehensive Income - Net of Tax * | 8 | 7 | |||||
Comprehensive Income | $ | 1,577 | $ | 2,273 | |||
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Net Income | $ | 68,316 | $ | 48,744 | |||
Other Comprehensive Income - Net of Tax: * | |||||||
Unrealized Gain on Derivatives - Other | 17 | 14 | |||||
Other Comprehensive Income - Net of Tax * | 17 | 14 | |||||
Comprehensive Income | $ | 68,333 | $ | 48,758 | |||
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Net Cash Provided by Operating Activities | $ | 85,263 | $ | 75,514 | |||
Cash Flows from Investing Activities: | |||||||
Capital Expenditures | (113,226 | ) | (127,209 | ) | |||
Purchase of Company-Owned Life Insurance | — | (4,875 | ) | ||||
Investment in Long-Term Receivables | (3,947 | ) | (4,602 | ) | |||
Proceeds from Long-Term Receivables | 5,035 | 4,948 | |||||
Net Cash Used in Investing Activities | (112,138 | ) | (131,738 | ) | |||
Cash Flows from Financing Activities: | |||||||
Net Borrowings from (Repayments of) Short-Term Credit Facilities | 24,400 | (101,500 | ) | ||||
Proceeds from Issuance of Long-Term Debt | — | 321,000 | |||||
Principal Repayments of Long-Term Debt | — | (200,000 | ) | ||||
Payments for Issuance of Long-Term Debt | (5 | ) | (2,029 | ) | |||
Additional Investment by Shareholder | — | 40,000 | |||||
Net Cash Provided by Financing Activities | 24,395 | 57,471 | |||||
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | (2,480 | ) | 1,247 | ||||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 4,619 | 1,391 | |||||
Cash, Cash Equivalents and Restricted Cash at End of Period | $ | 2,139 | $ | 2,638 |
June 30, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Property, Plant and Equipment: | |||||||
Utility Plant, at original cost | $ | 2,748,076 | $ | 2,652,244 | |||
Accumulated Depreciation | (509,797 | ) | (498,161 | ) | |||
Property, Plant and Equipment - Net | 2,238,279 | 2,154,083 | |||||
Investments: | |||||||
Restricted Investments | 505 | 2,912 | |||||
Total Investments | 505 | 2,912 | |||||
Current Assets: | |||||||
Cash and Cash Equivalents | 1,634 | 1,707 | |||||
Accounts Receivable | 95,420 | 78,571 | |||||
Accounts Receivable - Related Parties | 2,139 | 988 | |||||
Unbilled Revenues | 9,721 | 54,980 | |||||
Provision for Uncollectibles | (13,772 | ) | (13,799 | ) | |||
Natural Gas in Storage, average cost | 12,482 | 14,932 | |||||
Materials and Supplies, average cost | 796 | 825 | |||||
Prepaid Taxes | 27,507 | 38,326 | |||||
Derivatives - Energy Related Assets | 6,726 | 7,327 | |||||
Other Prepayments and Current Assets | 10,849 | 12,670 | |||||
Total Current Assets | 153,502 | 196,527 | |||||
Regulatory and Other Noncurrent Assets: | |||||||
Regulatory Assets | 476,635 | 469,224 | |||||
Long-Term Receivables | 25,347 | 25,851 | |||||
Derivatives - Energy Related Assets | — | 5 | |||||
Other | 18,786 | 17,372 | |||||
Total Regulatory and Other Noncurrent Assets | 520,768 | 512,452 | |||||
Total Assets | $ | 2,913,054 | $ | 2,865,974 |
June 30, 2018 | December 31, 2017 | ||||||
Capitalization and Liabilities | |||||||
Equity: | |||||||
Common Stock | $ | 5,848 | $ | 5,848 | |||
Other Paid-In Capital and Premium on Common Stock | 355,744 | 355,744 | |||||
Accumulated Other Comprehensive Loss | (25,980 | ) | (25,997 | ) | |||
Retained Earnings | 654,153 | 585,838 | |||||
Total Equity | 989,765 | 921,433 | |||||
Long-Term Debt | 558,388 | 758,052 | |||||
Total Capitalization | 1,548,153 | 1,679,485 | |||||
Current Liabilities: | |||||||
Notes Payable | 76,400 | 52,000 | |||||
Current Portion of Long-Term Debt | 263,809 | 63,809 | |||||
Accounts Payable - Commodity | 28,669 | 43,341 | |||||
Accounts Payable - Other | 45,732 | 41,365 | |||||
Accounts Payable - Related Parties | 7,049 | 17,029 | |||||
Derivatives - Energy Related Liabilities | 950 | 9,270 | |||||
Derivatives - Other Current | 318 | 389 | |||||
Customer Deposits and Credit Balances | 24,998 | 41,656 | |||||
Environmental Remediation Costs | 43,502 | 66,040 | |||||
Taxes Accrued | 1,527 | 1,760 | |||||
Pension Benefits | 2,353 | 2,353 | |||||
Interest Accrued | 7,572 | 7,615 | |||||
Other Current Liabilities | 5,922 | 7,027 | |||||
Total Current Liabilities | 508,801 | 353,654 | |||||
Regulatory and Other Noncurrent Liabilities: | |||||||
Regulatory Liabilities | 299,382 | 287,105 | |||||
Deferred Income Taxes - Net | 303,282 | 280,746 | |||||
Environmental Remediation Costs | 107,278 | 105,656 | |||||
Asset Retirement Obligations | 43,011 | 58,714 | |||||
Pension and Other Postretirement Benefits | 92,862 | 88,871 | |||||
Derivatives - Energy Related Liabilities | 114 | 170 | |||||
Derivatives - Other Noncurrent | 5,282 | 6,639 | |||||
Other | 4,889 | 4,934 | |||||
Total Regulatory and Other Noncurrent Liabilities | 856,100 | 832,835 | |||||
Commitments and Contingencies (Note 11) | |||||||
Total Capitalization and Liabilities | $ | 2,913,054 | $ | 2,865,974 |
1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: |
▪ | SJI Utilities, Inc. (SJIU) is a holding company that owns South Jersey Gas Company, along with, as of July 1, 2018, Elizabethtown Gas and Elkton Gas (see "Acquisitions" below). |
▪ | South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey. |
▪ | South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial, industrial and residential customers. |
▪ | South Jersey Resources Group, LLC (SJRG) markets natural gas storage, commodity and transportation assets along with fuel management services on a wholesale basis in the mid-Atlantic, Appalachian and southern states. |
▪ | South Jersey Exploration, LLC (SJEX) owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania. |
▪ | Marina Energy, LLC (Marina) develops and operates on-site energy-related projects. It currently operates projects in New Jersey, Maryland, Massachusetts and Vermont. The significant wholly-owned subsidiaries of Marina include: |
▪ | South Jersey Energy Service Plus, LLC (SJESP) serviced residential and small commercial HVAC systems, installed small commercial HVAC systems, provided plumbing services and serviced appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. On September 1, 2017, SJESP sold certain assets of its residential and small commercial HVAC and plumbing business to a third party. SJESP continues to receive commissions paid on service contracts from the third party and will do so on a go forward basis. |
▪ | SJI Midstream, LLC (Midstream) invests in infrastructure and other midstream projects, including a current project to build an approximately 118-mile natural gas pipeline in Pennsylvania and New Jersey. |
Expense Type | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | Line Item in the Condensed Consolidated Statements of Income | ||||
Consulting & Legal | $ | 9.5 | $ | 15.0 | Operations Expense | ||
Interest Charges (A) | 2.7 | 2.7 | Interest Charges | ||||
Amortization (A,B) | 5.3 | 7.9 | Interest Charges | ||||
Ticking Fees (B) | 0.5 | 1.7 | Interest Charges | ||||
Total Costs (C) | $ | 18.0 | $ | 27.3 |
• | In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This standard improves the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. |
• | In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This standard clarifies identifying performance obligations and the licensing implementation guidance. |
• | In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. This standard provides additional guidance on (a) the objective of the collectibility criterion, (b) the presentation of sales tax collected from customers, (c) the measurement date of non-cash consideration received, (d) practical expedients in respect of contract modifications and completed contracts at transition, and (e) disclosure of the effects of the accounting change in the period of adoption. |
• | In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which amends certain narrow aspects of the guidance, including the disclosure of remaining performance obligations and prior-period performance obligations, as well as other amendments to the guidance on loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples. |
2. | STOCK-BASED COMPENSATION PLAN: |
Grants | Shares Outstanding | Fair Value Per Share | Expected Volatility | Risk-Free Interest Rate | ||||||||||
Officers & Key Employees - | 2016 - TSR | 56,595 | $ | 22.53 | 18.1 | % | 1.31 | % | ||||||
2016 - CEGR, Time | 71,543 | $ | 23.52 | N/A | N/A | |||||||||
2017 - TSR | 48,533 | $ | 32.17 | 20.8 | % | 1.47 | % | |||||||
2017 - CEGR, Time | 79,524 | $ | 33.69 | N/A | N/A | |||||||||
2018 - TSR | 65,351 | $ | 31.05 | 21.9 | % | 2.00 | % | |||||||
2018 - CEGR, Time | 129,902 | $ | 31.23 | N/A | N/A | |||||||||
Directors - | 2018 | 26,416 | $ | 31.16 | N/A | N/A | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Officers & Key Employees | $ | 1,090 | $ | 1,117 | $ | 2,190 | $ | 2,187 | ||||||
Directors | 206 | 256 | 412 | 512 | ||||||||||
Total Cost | 1,296 | 1,373 | 2,602 | 2,699 | ||||||||||
Capitalized | (101 | ) | (104 | ) | (202 | ) | (192 | ) | ||||||
Net Expense | $ | 1,195 | $ | 1,269 | $ | 2,400 | $ | 2,507 |
Officers &Other Key Employees | Directors | Weighted Average Fair Value | |||||||
Nonvested Shares Outstanding, January 1, 2018 | 342,793 | 30,394 | $ | 28.60 | |||||
Granted | 197,844 | 26,416 | $ | 31.17 | |||||
Cancelled/Forfeited | (44,287 | ) | — | $ | 28.34 | ||||
Vested | (44,901 | ) | (30,394 | ) | $ | 30.56 | |||
Nonvested Shares Outstanding, June 30, 2018 | 451,449 | 26,416 | $ | 29.52 |
3. | AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED-PARTY TRANSACTIONS: |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Loss before Income Taxes: | |||||||||||||||
Sand Mining | $ | 7 | $ | (15 | ) | $ | (33 | ) | $ | (32 | ) | ||||
Fuel Oil | (40 | ) | (57 | ) | (81 | ) | (86 | ) | |||||||
Income Tax Benefits | 7 | 25 | 22 | 41 | |||||||||||
Loss from Discontinued Operations — Net | $ | (26 | ) | $ | (47 | ) | $ | (92 | ) | $ | (77 | ) | |||
Earnings Per Common Share from | |||||||||||||||
Discontinued Operations — Net: | |||||||||||||||
Basic and Diluted | $ | — | $ | — | $ | — | $ | — |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Operating Revenues/Affiliates: | |||||||||||||||
SJRG | $ | 1,109 | $ | 1,248 | $ | 3,697 | $ | 2,211 | |||||||
Marina | 89 | 65 | 192 | 147 | |||||||||||
Other | 23 | 21 | 46 | 42 | |||||||||||
Total Operating Revenue/Affiliates | $ | 1,221 | $ | 1,334 | $ | 3,935 | $ | 2,400 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Costs of Sales/Affiliates (Excluding depreciation) | |||||||||||||||
SJRG* | $ | 2,093 | $ | 496 | $ | 27,431 | $ | 10,946 | |||||||
Operations Expense/Affiliates: | |||||||||||||||
SJI | $ | 6,708 | $ | 4,988 | $ | 13,751 | $ | 11,038 | |||||||
Millennium | 744 | 712 | 1,441 | 1,420 | |||||||||||
Other | (117 | ) | (41 | ) | (232 | ) | (80 | ) | |||||||
Total Operations Expense/Affiliates | $ | 7,335 | $ | 5,659 | $ | 14,960 | $ | 12,378 |
4. | COMMON STOCK: |
2018 | ||
Beginning Balance, January 1 | 79,549,080 | |
New Issuances During the Period: | ||
Public Equity Offering | 5,889,830 | |
Stock-Based Compensation Plan | 67,076 | |
Ending Balance, June 30 | 85,505,986 |
• | SJI offered 12,669,491 shares of its common stock, par value $1.25 per share, at a public offering price of $29.50 per share. Of the offered shares, 5,889,830 shares were issued at closing, including 1,652,542 shares pursuant to the underwriters’ option. The gross proceeds from these shares was $173.7 million, with net proceeds after deducting underwriting discounts and commissions of $167.7 million. The remaining 6,779,661 shares of common stock ("Forward Shares") are to be sold by Bank of America, N.A., as forward seller, pursuant to a forward sale agreement. The Company received no proceeds from the sale of the Forward Shares at the closing, and has not received proceeds as of June 30, 2018. SJI has an option to settle the forward sale agreement by delivering newly issued shares of SJI common stock and receive proceeds, subject to certain adjustments, from the sale of those shares, assuming one or more future physical settlements of the forward sale agreement, no later than April 2019. SJI may also choose to settle the forward sale contract with a cash payment, or multiple cash payments, no later than April 2019. In the event SJI elects to settle all or a portion of the forward sale contract with a cash payment, no additional shares of SJI common stock would be issued under the forward sale contract for the portions that were cash settled. |
• | SJI issued and sold 5,750,000 Equity Units, initially in the form of Corporate Units, which included 750,000 Corporate Units pursuant to the underwriters’ option. Each Corporate Unit has a stated amount of $50 and is comprised of (a) a purchase contract obligating the holder to purchase from the Company, and for the Company to sell to the holder for a price in cash of $50, on the purchase contract settlement date, or April 15, 2021, subject to earlier termination or settlement, a certain number of shares of common stock; and (b) a 1/20, or 5%, undivided beneficial ownership interest in $1,000 principal amount of SJI’s 2018 Series A 3.70% Remarketable Junior Subordinated Notes due 2031. SJI will pay the holder quarterly contract adjustment payments at a rate of 3.55% per year on the stated amount of $50 per Equity Unit, in respect of each purchase contract, subject to the Company's right to defer these payments. No deferral period will extend beyond the purchase contract settlement date. The contract adjustment payments are payable quarterly on January 15, April 15, July 15 and October 15 of each year (except that if such date is not a business day, contract adjustment payments will be payable on the following business day, without adjustment), commencing on July 15, 2018. The contract adjustment payments will be subordinated to all of the Company's existing and future “Priority Indebtedness” and will be structurally subordinated to all liabilities of our subsidiaries. The present value of the aggregate amount of the contract adjustment payments due through April 15, 2021 was recorded as Other Current and Noncurrent Liabilities on the condensed consolidated balance sheet, and will be amortized over the life of this instrument. This offering resulted in gross proceeds of approximately $287.5 million, with net proceeds after deducting underwriting discounts and commissions of $278.9 million. As of June 30, 2018, the net proceeds, after amortization of the underwriting discounts, are recorded as Long-Term Debt on the condensed consolidated balance sheets (see Note 14). |
5. | FINANCIAL INSTRUMENTS: |
As of June 30, 2018 | |||||||
Balance Sheet Line Item | SJI | SJG | |||||
Cash and Cash Equivalents | $ | 22,420 | $ | 1,634 | |||
Restricted Cash | 1,740,380 | — | |||||
Restricted Investments | 10,664 | 505 | |||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ | 1,773,464 | $ | 2,139 |
As of December 31, 2017 | |||||||
Balance Sheet Line Item | SJI | SJG | |||||
Cash and Cash Equivalents | $ | 7,819 | $ | 1,707 | |||
Restricted Investments | 31,876 | 2,912 | |||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | $ | 39,695 | $ | 4,619 |
• | For Long-Term Debt, in estimating the fair value, SJI and SJG use the present value of remaining cash flows at the balance sheet date. SJI and SJG based the estimates on interest rates available at the end of each period for debt with similar terms and maturities (Level 2 in the fair value hierarchy, see Note 13). |
• | The estimated fair values of SJI's long-term debt (which includes SJG and all consolidated subsidiaries), including current maturities, as of June 30, 2018 and December 31, 2017, were $2.84 billion and $1.22 billion, respectively. The carrying amounts of SJI's long-term debt, including current maturities, as of June 30, 2018 and December 31, 2017, were $2.77 billion and $1.19 billion, respectively. SJI's carrying amounts as of June 30, 2018 and December 31, 2017 are net of unamortized debt issuance costs of $24.1 million and $17.4 million, respectively. |
• | The estimated fair values of SJG's long-term debt, including current maturities, as of June 30, 2018 and December 31, 2017, were $835.5 million and $838.5 million, respectively. The carrying amount of SJG's long-term debt, including current maturities, as of June 30, 2018 and December 31, 2017, was $822.2 million and $821.9 million, respectively. The carrying amounts as of June 30, 2018 and December 31, 2017 are net of unamortized debt issuance costs of $7.0 million and $7.3 million, respectively. |
6. | SEGMENTS OF BUSINESS: |
• | Gas utility operations (SJIU, consisting of SJG) consist primarily of natural gas distribution to residential, commercial and industrial customers. The result of SJG are only included in this operating segment. |
• | Wholesale energy operations include the activities of SJRG and SJEX. |
• | SJE is involved in both retail gas and retail electric activities. |
◦ | Retail gas and other operations include natural gas acquisition and transportation service business lines. |
◦ | Retail electric operations consist of electricity acquisition and transportation to commercial, industrial and residential customers. |
• | On-site energy production consists of Marina's thermal energy facility and other energy-related projects. Also included in this segment are the activities of ACB, ACLE, BCLE, SCLE, SXLE, MCS, NBS and SBS. |
• | Appliance service operations includes SJESP, which serviced residential and small commercial HVAC systems, installed small commercial HVAC systems, provided plumbing services and serviced appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. On September 1, 2017, SJESP sold certain assets of its residential and small commercial HVAC and plumbing business to a third party. SJESP continues to receive commissions paid on service contracts from the third party and will do so on a go forward basis. |
• | Midstream was formed to invest in infrastructure and other midstream projects, including a current project to build a natural gas pipeline in Pennsylvania and New Jersey. |
• | Costs incurred related to the agreement to acquire Elizabethtown Gas and Elkton Gas are recorded in the Corporate & Services segment. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Operating Revenues: | |||||||||||||||
Gas Utility Operations | $ | 76,801 | $ | 83,251 | $ | 311,260 | $ | 280,065 | |||||||
Energy Group: | |||||||||||||||
Wholesale Energy Operations | 67,220 | 76,409 | 257,563 | 203,926 | |||||||||||
Retail Gas and Other Operations | 23,168 | 21,759 | 63,369 | 58,637 | |||||||||||
Retail Electric Operations | 42,662 | 42,620 | 86,697 | 91,577 | |||||||||||
Subtotal Energy Group | 133,050 | 140,788 | 407,629 | 354,140 | |||||||||||
Energy Services: | |||||||||||||||
On-Site Energy Production | 24,734 | 25,135 | 45,891 | 44,747 | |||||||||||
Appliance Service Operations | 451 | 1,980 | 971 | 3,638 | |||||||||||
Subtotal Energy Services | 25,185 | 27,115 | 46,862 | 48,385 | |||||||||||
Corporate and Services | 11,082 | 11,013 | 24,082 | 22,609 | |||||||||||
Subtotal | 246,118 | 262,167 | 789,833 | 705,199 | |||||||||||
Intersegment Sales | (18,788 | ) | (17,793 | ) | (40,558 | ) | (34,996 | ) | |||||||
Total Operating Revenues | $ | 227,330 | $ | 244,374 | $ | 749,275 | $ | 670,203 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Operating (Loss) Income (See Note 1): | ||||||||||||||
Gas Utility Operations | $ | 8,443 | $ | 8,735 | $ | 101,244 | $ | 89,960 | ||||||
Energy Group: | ||||||||||||||
Wholesale Energy Operations | (10,472 | ) | (18,191 | ) | 65,185 | (29,817 | ) | |||||||
Retail Gas and Other Operations | 1,659 | (1,560 | ) | (4,099 | ) | (3,227 | ) | |||||||
Retail Electric Operations | 1,094 | 1,155 | 886 | 2,461 | ||||||||||
Subtotal Energy Group | (7,719 | ) | (18,596 | ) | 61,972 | (30,583 | ) | |||||||
Energy Services: | ||||||||||||||
On-Site Energy Production | (100,435 | ) | 5,104 | (100,989 | ) | 3,135 | ||||||||
Appliance Service Operations | 442 | 66 | 945 | (6 | ) | |||||||||
Subtotal Energy Services | (99,993 | ) | 5,170 | (100,044 | ) | 3,129 | ||||||||
Corporate and Services | (9,263 | ) | 1,305 | (13,834 | ) | 2,972 | ||||||||
Total Operating (Loss) Income | $ | (108,532 | ) | $ | (3,386 | ) | $ | 49,338 | $ | 65,478 | ||||
Depreciation and Amortization: | ||||||||||||||
Gas Utility Operations | $ | 20,274 | $ | 17,446 | $ | 40,589 | $ | 34,808 | ||||||
Energy Group: | ||||||||||||||
Wholesale Energy Operations | 29 | 33 | 52 | 61 | ||||||||||
Retail Gas and Other Operations | 78 | 84 | 153 | 167 | ||||||||||
Subtotal Energy Group | 107 | 117 | 205 | 228 | ||||||||||
Energy Services: | ||||||||||||||
On-Site Energy Production | 10,324 | 11,674 | 20,595 | 23,267 | ||||||||||
Appliance Service Operations | — | 56 | — | 110 | ||||||||||
Subtotal Energy Services | 10,324 | 11,730 | 20,595 | 23,377 | ||||||||||
Corporate and Services | 5,951 | 418 | 9,165 | 819 | ||||||||||
Total Depreciation and Amortization | $ | 36,656 | $ | 29,711 | $ | 70,554 | $ | 59,232 | ||||||
Interest Charges (See Note 1): | ||||||||||||||
Gas Utility Operations | $ | 6,999 | $ | 6,077 | $ | 13,727 | $ | 11,955 | ||||||
Energy Group: | ||||||||||||||
Wholesale Energy Operations | — | 134 | — | 3,193 | ||||||||||
Retail Gas and Other Operations | 105 | 64 | 251 | 149 | ||||||||||
Subtotal Energy Group | 105 | 198 | 251 | 3,342 | ||||||||||
Energy Services: | ||||||||||||||
On-Site Energy Production | 4,098 | 3,877 | 7,945 | 9,691 | ||||||||||
Midstream | 479 | 125 | 905 | 635 | ||||||||||
Corporate and Services | 13,368 | 4,816 | 20,838 | 9,547 | ||||||||||
Subtotal | 25,049 | 15,093 | 43,666 | 35,170 | ||||||||||
Intersegment Borrowings | (5,488 | ) | (4,114 | ) | (10,133 | ) | (7,446 | ) | ||||||
Total Interest Charges | $ | 19,561 | $ | 10,979 | $ | 33,533 | $ | 27,724 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||
Income Taxes (See Note 1): | ||||||||||||||
Gas Utility Operations | $ | 482 | $ | 1,431 | $ | 22,318 | $ | 31,342 | ||||||
Energy Group: | ||||||||||||||
Wholesale Energy Operations | (2,478 | ) | (6,384 | ) | 16,649 | (12,703 | ) | |||||||
Retail Gas and Other Operations | 474 | (593 | ) | (1,060 | ) | (1,040 | ) | |||||||
Retail Electric Operations | 307 | 472 | 249 | 1,007 | ||||||||||
Subtotal Energy Group | (1,697 | ) | (6,505 | ) | 15,838 | (12,736 | ) | |||||||
Energy Services: | ||||||||||||||
On-Site Energy Production | (26,489 | ) | 219 | (27,646 | ) | (2,850 | ) | |||||||
Appliance Service Operations | 106 | 36 | 237 | 19 | ||||||||||
Subtotal Energy Services | (26,383 | ) | 255 | (27,409 | ) | (2,831 | ) | |||||||
Midstream | (22 | ) | (1 | ) | 40 | (85 | ) | |||||||
Corporate and Services | (4,352 | ) | (724 | ) | (6,344 | ) | 636 | |||||||
Total Income Taxes | $ | (31,972 | ) | $ | (5,544 | ) | $ | 4,443 | $ | 16,326 | ||||
Property Additions (See Note 1): | ||||||||||||||
Gas Utility Operations | $ | 65,148 | $ | 66,128 | $ | 115,385 | $ | 128,408 | ||||||
Energy Group: | ||||||||||||||
Wholesale Energy Operations | 27 | 4 | 32 | 7 | ||||||||||
Retail Gas and Other Operations | 136 | 133 | 309 | 428 | ||||||||||
Subtotal Energy Group | 163 | 137 | 341 | 435 | ||||||||||
Energy Services: | ||||||||||||||
On-Site Energy Production | 570 | 2,917 | 1,683 | 10,266 | ||||||||||
Appliance Service Operations | — | 254 | — | 260 | ||||||||||
Subtotal Energy Services | 570 | 3,171 | 1,683 | 10,526 | ||||||||||
Midstream | 99 | 5 | 310 | 157 | ||||||||||
Corporate and Services | 8,204 | 834 | 11,549 | 927 | ||||||||||
Total Property Additions | $ | 74,184 | $ | 70,275 | $ | 129,268 | $ | 140,453 |
June 30, 2018 | December 31, 2017 | ||||||
Identifiable Assets: | |||||||
Gas Utility Operations | $ | 2,913,054 | $ | 2,865,974 | |||
Energy Group: | |||||||
Wholesale Energy Operations | 124,975 | 208,785 | |||||
Retail Gas and Other Operations | 39,992 | 56,935 | |||||
Retail Electric Operations | 35,043 | 34,923 | |||||
Subtotal Energy Group | 200,010 | 300,643 | |||||
Energy Services: | |||||||
On-Site Energy Production | 476,498 | 582,587 | |||||
Appliance Service Operations | 205 | 1,338 | |||||
Subtotal Energy Services | 476,703 | 583,925 | |||||
Midstream | 68,348 | 63,112 | |||||
Discontinued Operations | 1,751 | 1,757 | |||||
Corporate and Services | 2,388,305 | 711,038 | |||||
Intersegment Assets | (538,674 | ) | (661,363 | ) | |||
Total Identifiable Assets | $ | 5,509,497 | $ | 3,865,086 |
7. | RATES AND REGULATORY ACTIONS: |
8. | REGULATORY ASSETS AND REGULATORY LIABILITIES: |
June 30, 2018 | December 31, 2017 | ||||||
Environmental Remediation Costs: | |||||||
Expended - Net | $ | 122,022 | $ | 100,327 | |||
Liability for Future Expenditures | 150,780 | 171,696 | |||||
Deferred Asset Retirement Obligation Costs | 29,913 | 42,368 | |||||
Deferred Pension and Other Postretirement Benefit Costs | 78,211 | 78,211 | |||||
Deferred Gas Costs - Net | 60,025 | 16,838 | |||||
Conservation Incentive Program Receivable | 3,771 | 26,652 | |||||
Societal Benefit Costs Receivable | 1,751 | 2,484 | |||||
Deferred Interest Rate Contracts | 5,601 | 7,028 | |||||
Energy Efficiency Tracker | 2,189 | 2,094 | |||||
Pipeline Supplier Service Charges | 662 | 708 | |||||
Pipeline Integrity Cost | 4,805 | 5,280 | |||||
AFUDC - Equity Related Deferrals | 13,172 | 12,785 | |||||
Other Regulatory Assets | 3,733 | 2,753 | |||||
Total Regulatory Assets | $ | 476,635 | $ | 469,224 |
June 30, 2018 | December 31, 2017 | ||||||
Excess Plant Removal Costs | $ | 22,367 | $ | 23,295 | |||
Excess Deferred Taxes | 277,015 | 263,810 | |||||
Total Regulatory Liabilities | $ | 299,382 | $ | 287,105 |
9. | PENSION AND OTHER POSTRETIREMENT BENEFITS: |
Pension Benefits | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Service Cost | $ | 639 | $ | 1,112 | $ | 2,816 | $ | 2,494 | |||||||
Interest Cost | 716 | 2,931 | 5,824 | 5,886 | |||||||||||
Expected Return on Plan Assets | (19 | ) | (3,529 | ) | (7,652 | ) | (7,053 | ) | |||||||
Amortizations: | |||||||||||||||
Prior Service Cost | (13 | ) | 33 | 58 | 66 | ||||||||||
Actuarial Loss | 1,632 | 2,528 | 5,764 | 5,141 | |||||||||||
Net Periodic Benefit Cost | 2,955 | 3,075 | 6,810 | 6,534 | |||||||||||
Capitalized Benefit Cost | (554 | ) | (1,129 | ) | (1,037 | ) | (2,400 | ) | |||||||
Deferred Benefit Cost | (374 | ) | (139 | ) | (1,125 | ) | (300 | ) | |||||||
Total Net Periodic Benefit Expense | $ | 2,027 | $ | 1,807 | $ | 4,648 | $ | 3,834 |
Other Postretirement Benefits | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Service Cost | $ | 360 | $ | 208 | $ | 441 | $ | 455 | |||||||
Interest Cost | 859 | 609 | 1,076 | 1,209 | |||||||||||
Expected Return on Plan Assets | (1,578 | ) | (853 | ) | (1,883 | ) | (1,705 | ) | |||||||
Amortizations: | |||||||||||||||
Prior Service Cost | (141 | ) | (86 | ) | (172 | ) | (172 | ) | |||||||
Actuarial Loss | 340 | 307 | 451 | 619 | |||||||||||
Net Periodic Benefit Cost | (160 | ) | 185 | (87 | ) | 406 | |||||||||
Capitalized Benefit Cost | — | (46 | ) | (5 | ) | (101 | ) | ||||||||
Total Net Periodic Benefit Expense | $ | (160 | ) | $ | 139 | $ | (92 | ) | $ | 305 |
10. | LINES OF CREDIT: |
Company | Total Facility | Usage | Available Liquidity | Expiration Date | ||||||||||
SJI: | ||||||||||||||
Syndicated Revolving Credit Facility | $ | 400,000 | $ | 216,100 | (A) | $ | 183,900 | August 2022 | ||||||
Revolving Credit Facility | 50,000 | 50,000 | — | September 2019 | ||||||||||
Total SJI | 450,000 | 266,100 | 183,900 | |||||||||||
SJG: | ||||||||||||||
Commercial Paper Program/Revolving Credit Facility | 200,000 | 77,200 | (B) | 122,800 | August 2022 | |||||||||
Uncommitted Bank Line | 10,000 | — | 10,000 | August 2018 (C) | ||||||||||
Total SJG | 210,000 | 77,200 | 132,800 | |||||||||||
Total | $ | 660,000 | $ | 343,300 | $ | 316,700 |
11. | COMMITMENTS AND CONTINGENCIES: |
12. | DERIVATIVE INSTRUMENTS: |
SJI Consolidated | SJG | |||
Derivative contracts intended to limit exposure to market risk to: | ||||
Expected future purchases of natural gas (in MMdts) | 69.4 | 10.9 | ||
Expected future sales of natural gas (in MMdts) | 56.0 | 0.5 | ||
Expected future purchases of electricity (in MMmWh) | 2.3 | — | ||
Expected future sales of electricity (in MMmWh) | 1.9 | — | ||
Basis and Index related net purchase (sale) contracts (in MMdts) | 56.9 | 2.3 |
Notional Amount | Fixed Interest Rate | Start Date | Maturity | Obligor | ||||||
$ | 20,000,000 | 3.049% | 3/15/2017 | 3/15/2027 | SJI | |||||
$ | 20,000,000 | 3.049% | 3/15/2017 | 3/15/2027 | SJI | |||||
$ | 10,000,000 | 3.049% | 3/15/2017 | 3/15/2027 | SJI | |||||
$ | 12,500,000 | 3.530% | 12/1/2006 | 2/1/2036 | SJG | |||||
$ | 12,500,000 | 3.430% | 12/1/2006 | 2/1/2036 | SJG |
SJI (includes SJG and all other consolidated subsidiaries): | ||||||||||||||||
Derivatives not designated as hedging instruments under GAAP | June 30, 2018 | December 31, 2017 | ||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||
Energy-related commodity contracts: | ||||||||||||||||
Derivatives - Energy Related - Current | $ | 23,892 | $ | 10,798 | $ | 42,139 | $ | 46,938 | ||||||||
Derivatives - Energy Related - Non-Current | 10,283 | 3,427 | 5,988 | 6,025 | ||||||||||||
Interest rate contracts: | ||||||||||||||||
Derivatives - Other - Current | — | 443 | — | 748 | ||||||||||||
Derivatives - Other - Noncurrent | — | 6,252 | — | 9,622 | ||||||||||||
Total derivatives not designated as hedging instruments under GAAP | $ | 34,175 | $ | 20,920 | $ | 48,127 | $ | 63,333 | ||||||||
Total Derivatives | $ | 34,175 | $ | 20,920 | $ | 48,127 | $ | 63,333 |
SJG: | ||||||||||||||||
Derivatives not designated as hedging instruments under GAAP | June 30, 2018 | December 31, 2017 | ||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||
Energy-related commodity contracts: | ||||||||||||||||
Derivatives – Energy Related – Current | $ | 6,726 | $ | 950 | $ | 7,327 | $ | 9,270 | ||||||||
Derivatives – Energy Related – Non-Current | — | 114 | 5 | 170 | ||||||||||||
Interest rate contracts: | ||||||||||||||||
Derivatives – Other Current | — | 318 | — | 389 | ||||||||||||
Derivatives – Other Noncurrent | — | 5,282 | — | 6,639 | ||||||||||||
Total derivatives not designated as hedging instruments under GAAP | $ | 6,726 | $ | 6,664 | $ | 7,332 | $ | 16,468 | ||||||||
Total Derivatives | $ | 6,726 | $ | 6,664 | $ | 7,332 | $ | 16,468 |
As of June 30, 2018 | ||||||||||||||||||||||||
Description | Gross amounts of recognized assets/liabilities | Gross amount offset in the balance sheet | Net amounts of assets/liabilities in balance sheet | Gross amounts not offset in the balance sheet | Net amount | |||||||||||||||||||
Financial Instruments | Cash Collateral Posted | |||||||||||||||||||||||
SJI (includes SJG and all other consolidated subsidiaries): | ||||||||||||||||||||||||
Derivatives - Energy Related Assets | $ | 34,175 | $ | — | $ | 34,175 | $ | (8,246 | ) | (A) | $ | — | $ | 25,929 | ||||||||||
Derivatives - Energy Related Liabilities | $ | (14,225 | ) | $ | — | $ | (14,225 | ) | $ | 8,246 | (B) | $ | 155 | $ | (5,824 | ) | ||||||||
Derivatives - Other | $ | (6,695 | ) | $ | — | $ | (6,695 | ) | $ | — | $ | — | $ | (6,695 | ) | |||||||||
SJG: | ||||||||||||||||||||||||
Derivatives - Energy Related Assets | $ | 6,726 | $ | — | $ | 6,726 | $ | (390 | ) | (A) | $ | — | $ | 6,336 | ||||||||||
Derivatives - Energy Related Liabilities | $ | (1,064 | ) | $ | — | $ | (1,064 | ) | $ | 390 | (B) | $ | — | $ | (674 | ) | ||||||||
Derivatives - Other | $ | (5,600 | ) | $ | — | $ | (5,600 | ) | $ | — | $ | — | $ | (5,600 | ) |
As of December 31, 2017 | ||||||||||||||||||||||||
Description | Gross amounts of recognized assets/liabilities | Gross amount offset in the balance sheet | Net amounts of assets/liabilities in balance sheet | Gross amounts not offset in the balance sheet | Net amount | |||||||||||||||||||
Financial Instruments | Cash Collateral Posted | |||||||||||||||||||||||
SJI (includes SJG and all other consolidated subsidiaries): | ||||||||||||||||||||||||
Derivatives - Energy Related Assets | $ | 48,127 | $ | — | $ | 48,127 | $ | (24,849 | ) | (A) | $ | — | $ | 23,278 | ||||||||||
Derivatives - Energy Related Liabilities | $ | (52,963 | ) | $ | — | $ | (52,963 | ) | $ | 24,849 | (B) | $ | 8,832 | $ | (19,282 | ) | ||||||||
Derivatives - Other | $ | (10,370 | ) | $ | — | $ | (10,370 | ) | $ | — | $ | — | $ | (10,370 | ) | |||||||||
SJG: | ||||||||||||||||||||||||
Derivatives - Energy Related Assets | $ | 7,332 | $ | — | $ | 7,332 | $ | (208 | ) | (A) | $ | — | $ | 7,124 | ||||||||||
Derivatives - Energy Related Liabilities | $ | (9,440 | ) | $ | — | $ | (9,440 | ) | $ | 208 | (B) | $ | 1,543 | $ | (7,689 | ) | ||||||||
Derivatives - Other | $ | (7,028 | ) | $ | — | $ | (7,028 | ) | $ | — | $ | — | $ | (7,028 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Derivatives in Cash Flow Hedging Relationships under GAAP | 2018 | 2017 | 2018 | 2017 | ||||||||||||
SJI (includes SJG and all other consolidated subsidiaries): | ||||||||||||||||
Interest Rate Contracts: | ||||||||||||||||
Losses reclassified from AOCL into income (a) | $ | (12 | ) | $ | (12 | ) | $ | (24 | ) | $ | (2,499 | ) | ||||
SJG: | ||||||||||||||||
Interest Rate Contracts: | ||||||||||||||||
Losses reclassified from AOCL into income (a) | $ | (12 | ) | $ | (12 | ) | (24 | ) | (24 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Derivatives Not Designated as Hedging Instruments under GAAP | 2018 | 2017 | 2018 | 2017 | ||||||||||||
SJI (includes SJG and all other consolidated subsidiaries): | ||||||||||||||||
(Losses) Gains on energy-related commodity contracts (a) | $ | (6,178 | ) | $ | (7,855 | ) | $ | 17,175 | $ | 6,832 | ||||||
Gains (Losses) on interest rate contracts (b) | 620 | (379 | ) | 2,248 | (1,384 | ) | ||||||||||
Total | $ | (5,558 | ) | $ | (8,234 | ) | $ | 19,423 | $ | 5,448 |
13. | FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES: |
• | Level 1: Observable inputs, such as quoted prices in active markets for identical assets or liabilities. |
• | Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. |
• | Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. |
As of June 30, 2018 | Total | Level 1 | Level 2 | Level 3 | |||||||||||
SJI (includes SJG and all other consolidated subsidiaries): | |||||||||||||||
Assets | |||||||||||||||
Available-for-Sale Securities (A) | $ | 36 | $ | 36 | $ | — | $ | — | |||||||
Derivatives – Energy Related Assets (B) | 34,175 | 1,808 | 8,581 | 23,786 | |||||||||||
$ | 34,211 | $ | 1,844 | $ | 8,581 | $ | 23,786 | ||||||||
SJG: | |||||||||||||||
Assets | |||||||||||||||
Derivatives – Energy Related Assets (B) | $ | 6,726 | $ | 729 | $ | — | $ | 5,997 | |||||||
$ | 6,726 | $ | 729 | $ | — | $ | 5,997 | ||||||||
SJI (includes SJG and all other consolidated subsidiaries): | |||||||||||||||
Liabilities | |||||||||||||||
Derivatives – Energy Related Liabilities (B) | $ | 14,225 | $ | 3,107 | $ | 5,693 | $ | 5,425 | |||||||
Derivatives – Other (C) | 6,695 | — | 6,695 | — | |||||||||||
$ | 20,920 | $ | 3,107 | $ | 12,388 | $ | 5,425 | ||||||||
SJG: | |||||||||||||||
Liabilities | |||||||||||||||
Derivatives – Energy Related Liabilities (B) | $ | 1,064 | $ | 390 | $ | 674 | $ | — | |||||||
Derivatives – Other (C) | 5,600 | — | 5,600 | — | |||||||||||
$ | 6,664 | $ | 390 | $ | 6,274 | $ | — |
As of December 31, 2017 | Total | Level 1 | Level 2 | Level 3 | |||||||||||
SJI (includes SJG and all other consolidated subsidiaries): | |||||||||||||||
Assets | |||||||||||||||
Available-for-Sale Securities (A) | $ | 36 | $ | 36 | $ | — | $ | — | |||||||
Derivatives – Energy Related Assets (B) | 48,127 | 5,155 | 21,869 | 21,103 | |||||||||||
$ | 48,163 | $ | 5,191 | $ | 21,869 | $ | 21,103 | ||||||||
SJG: | |||||||||||||||
Assets | |||||||||||||||
Derivatives – Energy Related Assets (B) | $ | 7,332 | $ | 208 | $ | 230 | $ | 6,894 | |||||||
$ | 7,332 | $ | 208 | $ | 230 | $ | 6,894 | ||||||||
SJI (includes SJG and all other consolidated subsidiaries): | |||||||||||||||
Liabilities | |||||||||||||||
Derivatives – Energy Related Liabilities (B) | $ | 52,963 | $ | 10,687 | $ | 24,283 | $ | 17,993 | |||||||
Derivatives – Other (C) | 10,370 | — | 10,370 | — | |||||||||||
$ | 63,333 | $ | 10,687 | $ | 34,653 | $ | 17,993 | ||||||||
SJG: | |||||||||||||||
Liabilities | |||||||||||||||
Derivatives – Energy Related Liabilities (B) | $ | 9,440 | $ | 1,750 | $ | 2,848 | $ | 4,842 | |||||||
Derivatives – Other (C) | 7,028 | — | 7,028 | — | |||||||||||
$ | 16,468 | $ | 1,750 | $ | 9,876 | $ | 4,842 |
Type | Fair Value at June 30, 2018 | Valuation Technique | Significant Unobservable Input | Range [Weighted Average] | ||
Assets | Liabilities | |||||
Forward Contract - Natural Gas | $16,260 | $3,686 | Discounted Cash Flow | Forward price (per dt) | $1.74- $8.25 [$2.92] | (A) |
Forward Contract - Electric | $7,526 | $1,739 | Discounted Cash Flow | Fixed electric load profile (on-peak) | 37.45% - 100.00% [53.30%] | (B) |
Fixed electric load profile (off-peak) | 0.00% - 62.55% [46.70%] | (B) |
Type | Fair Value at December 31, 2017 | Valuation Technique | Significant Unobservable Input | Range [Weighted Average] | ||
Assets | Liabilities | |||||
Forward Contract - Natural Gas | $13,519 | $15,686 | Discounted Cash Flow | Forward price (per dt) | $1.79 - $12.09 [$3.01] | (A) |
Forward Contract - Electric | $7,584 | $2,307 | Discounted Cash Flow | Fixed electric load profile (on-peak) | 36.36% - 100.00% [53.39%] | (B) |
Fixed electric load profile (off-peak) | 0.00% - 63.64% [46.61%] | (B) |
Type | Fair Value at June 30, 2018 | Valuation Technique | Significant Unobservable Input | Range [Weighted Average] | ||||||
Assets | Liabilities | |||||||||
Forward Contract - Natural Gas | $ | 5,997 | $ | — | Discounted Cash Flow | Forward price (per dt) | $2.99- $6.17 [$4.48] | (A) |
Type | Fair Value at December 31, 2017 | Valuation Technique | Significant Unobservable Input | Range [Weighted Average] | ||||||
Assets | Liabilities | |||||||||
Forward Contract - Natural Gas | $ | 6,894 | $ | 4,842 | Discounted Cash Flow | Forward price (per dt) | $2.42 - $6.67 [$5.25] | (A) |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | ||||||
SJI (includes SJG and all other consolidated subsidiaries): | |||||||
Balance at beginning of period | $ | 16,586 | $ | 3,110 | |||
Other Changes in Fair Value from Continuing and New Contracts, Net | 6,215 | 10,204 | |||||
Settlements | (4,440 | ) | 5,047 | ||||
Balance at end of period | $ | 18,361 | $ | 18,361 | |||
SJG: | |||||||
Balance at beginning of period | $ | (6 | ) | $ | 2,052 | ||
Other Changes in Fair Value from Continuing and New Contracts, Net | 6,003 | 5,997 | |||||
Settlements | — | (2,052 | ) | ||||
Balance at end of period | $ | 5,997 | $ | 5,997 |
Three Months Ended June 30, 2017 | Six Months Ended June 30, 2017 | ||||||
SJI (includes SJG and all other consolidated subsidiaries): | |||||||
Balance at beginning of period | $ | 16,234 | $ | 9,035 | |||
Other Changes in Fair Value from Continuing and New Contracts, Net | 7,982 | 6,994 | |||||
Transfers in/(out) of Level 3 (A) | (748 | ) | (748 | ) | |||
Settlements | (6,067 | ) | 2,120 | ||||
Balance at end of period | $ | 17,401 | $ | 17,401 | |||
SJG: | |||||||
Balance at beginning of period | $ | 511 | $ | 926 | |||
Other Changes in Fair Value from Continuing and New Contracts, Net | 6,422 | 6,933 | |||||
Settlements | — | (926 | ) | ||||
Balance at end of period | $ | 6,933 | $ | 6,933 |
14. | LONG-TERM DEBT: |
15. | ACCUMULATED OTHER COMPREHENSIVE LOSS: |
Postretirement Liability Adjustment | Unrealized Gain (Loss) on Derivatives-Other | Unrealized Gain (Loss) on Available-for-Sale Securities | Other Comprehensive Income (Loss) of Affiliated Companies | Total | |||||||||||
Balance at April 1, 2018 (a) | $ | (36,262 | ) | $ | (387 | ) | $ | (10 | ) | $ | (97 | ) | $ | (36,756 | ) |
Other comprehensive income before reclassifications | — | — | — | — | — | ||||||||||
Amounts reclassified from AOCL (b) | — | 8 | — | — | 8 | ||||||||||
Net current period other comprehensive income | — | 8 | — | — | 8 | ||||||||||
Balance at June 30, 2018 (a) | $ | (36,262 | ) | $ | (379 | ) | $ | (10 | ) | $ | (97 | ) | $ | (36,748 | ) |
Postretirement Liability Adjustment | Unrealized Gain (Loss) on Derivatives-Other | Unrealized Gain (Loss) on Available-for-Sale Securities | Other Comprehensive Income (Loss) of Affiliated Companies | Total | |||||||||||
Balance at January 1, 2018 (a) | $ | (36,262 | ) | $ | (396 | ) | $ | (10 | ) | $ | (97 | ) | $ | (36,765 | ) |
Other comprehensive income before reclassifications | — | — | — | — | — | ||||||||||
Amounts reclassified from AOCL (b) | — | 17 | — | — | 17 | ||||||||||
Net current period other comprehensive income | — | 17 | — | — | 17 | ||||||||||
Balance at June 30, 2018 (a) | $ | (36,262 | ) | $ | (379 | ) | $ | (10 | ) | $ | (97 | ) | $ | (36,748 | ) |
Components of AOCL | Amounts Reclassified from AOCL | Affected Line Item in the Condensed Consolidated Statements of Income | |||||||||
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | ||||||||||
Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | $ | 12 | $ | 24 | Interest Charges | ||||||
Income Taxes | (4 | ) | (7 | ) | Income Taxes (a) | ||||||
Losses from reclassifications for the period net of tax | $ | 8 | $ | 17 |
Postretirement Liability Adjustment | Unrealized Gain (Loss) on Derivatives-Other | Total | |||||||||
Balance at April 1, 2018 (a) | $ | (25,507 | ) | $ | (481 | ) | $ | (25,988 | ) | ||
Other comprehensive loss before reclassifications | — | — | — | ||||||||
Amounts reclassified from AOCL (b) | — | 8 | 8 | ||||||||
Net current period other comprehensive income | — | 8 | 8 | ||||||||
Balance at June 30, 2018 (a) | $ | (25,507 | ) | $ | (473 | ) | $ | (25,980 | ) |
Postretirement Liability Adjustment | Unrealized Gain (Loss) on Derivatives-Other | Total | |||||||||
Balance at January 1, 2018 (a) | $ | (25,507 | ) | $ | (490 | ) | $ | (25,997 | ) | ||
Other comprehensive loss before reclassifications | — | — | — | ||||||||
Amounts reclassified from AOCL (b) | — | 17 | 17 | ||||||||
Net current period other comprehensive income (loss) | — | 17 | 17 | ||||||||
Balance at June 30, 2018 (a) | $ | (25,507 | ) | $ | (473 | ) | $ | (25,980 | ) |
Components of AOCL | Amounts Reclassified from AOCL | Affected Line Item in the Condensed Statements of Income | ||||||||||
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | |||||||||||
Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges | $ | 12 | $ | 24 | Interest Charges | |||||||
Income Taxes | (4 | ) | (7 | ) | Income Taxes (a) | |||||||
Losses from reclassifications for the period net of tax | $ | 8 | $ | 17 |
16. | REVENUE: |
• | SJI and SJG have elected the Practical Expedient in ASC 606 for recognizing revenue on contracts with customers on a portfolio of performance obligations with similar characteristics, as we reasonably expect the effects of applying the guidance to the portfolio would not differ materially from applying it to individual contracts. |
• | SJI and SJG apply the accounting guidance for recognizing revenue on contracts with customers on a series of distinct goods and services as one performance obligation, as long as the distinct goods and services are part of a series that are substantially the same and satisfied over time, and the same method would be used to measure progress towards satisfaction of the performance obligation. All performance obligations noted below under "Revenue Recognized Over Time" apply this guidance. |
Revenue Recognized Over Time: | ||
Reportable Segment | Performance Obligation | Description |
Gas Utility Operations; Wholesale Energy Operations; Retail Gas and Other Operations | Natural Gas | SJG sells natural gas to residential, commercial and industrial customers, and price is based on regulated tariff rates which are established by the BPU. There is an implied contract between SJG and a customer for the purchase, delivery, and sale of gas, and the customer is billed monthly, with payment due within 30 days. SJRG sells natural gas to commercial customers at either a fixed quantity or at variable quantities based on a customer's needs. Payment is due on the 25th of each month for the previous month's deliveries. SJE sells natural gas to commercial, industrial and residential customers at fixed prices throughout the life of the contract, with the customer billed monthly and payment due within 30 days. For all three segments, revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) or through the passage of time ratably as the customer uses natural gas, which represents satisfaction of the performance obligation. |
Gas Utility Operations; Wholesale Energy Operations | Pipeline transportation capacity | SJG and SJRG sell pipeline transportation capacity on a wholesale basis to various customers on the interstate pipeline system and transport natural gas purchased directly from producers or suppliers to their customers. These contracts to sell this capacity are at a price, quantity and time period agreed to by both parties determined on a contract by contract basis. Payment is due on the 25th of each month for the previous month's deliveries. Revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) or through the passage of time ratably coinciding with the delivery of gas and the customer obtaining control, which represents satisfaction of the performance obligation. |
Wholesale Energy Operations | Fuel Management Services | SJRG currently has eleven fuel supply management contracts where SJRG has acquired pipeline transportation capacity that allows SJRG to match end users, many of which are merchant generators, with producers looking to find a long-term solution for their supply. Natural gas is sold to the merchant generator daily based on their needs, with payment made either weekly or biweekly depending on the contract. Revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) coinciding with the delivery of gas and the customer obtaining control, which represents satisfaction of the performance obligation. |
Retail Electric Operations | Electricity | SJE sells electricity to commercial, industrial and residential customers at fixed prices throughout the life of the contract, with the customer billed monthly and payment due within 30 days. Revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) or through the passage of time ratably coinciding with the delivery of electricity and the customer obtaining control, which represents satisfaction of the performance obligation. |
On-Site Energy Production | Solar | Marina has several wholly-owned solar projects that earn revenue based on electricity generated. The customer pays monthly as electricity is being generated, with payment due within 30 days. The performance obligation is satisfied as kwh's of energy are generated (i.e. unit of output), which is when revenue is recognized. As disclosed in Note 1, solar assets are in the process of being sold to a third party; however, as of June 30, 2018, all solar assets were still owned by Marina. |
On-Site Energy Production | Marina Thermal Facility | Marina has a contract with a casino and resort in Atlantic City, NJ to provide cooling, heating and emergency power. There are multiple performance obligations with this contract, including electric, chilled water and hot water, and each of these are considered distinct and separately identifiable, and they are all priced separately. These performance obligations are satisfied over time ratably as they are used by the customer, who is billed monthly. Payment is due within 30 days. |
Revenue Recognized at a Point in Time: | ||
Reportable Segment | Performance Obligation | Description |
On-Site Energy Production | SREC's | The customer is billed based on a contracted amount of SREC's to be sold, with the price based on the market price of the SRECs at the time of generation. This does not represent variable consideration as the price is known and established at the time of generation and delivery to the customer. The performance obligation is satisfied at the point in time the SREC is delivered to the customer, which is when revenue is recognized. Payment terms are approximately 10 days subsequent to delivery. As disclosed in Note 1, SJI has entered into an agreement to sell SREC's generated to a third party. |
Three Months Ended June 30, 2018 | ||||||||||||||||||||||||
Gas Utility Operations | Wholesale Energy Operations | Retail Gas and Other Operations | Retail Electric Operations | On-Site Energy Production | Appliance Service Operations | Corporate Services and Intersegment | Total | |||||||||||||||||
Customer Type: | ||||||||||||||||||||||||
Residential | $ | 43,982 | $ | — | $ | — | $ | 6,391 | $ | — | $ | 451 | $ | — | $ | 50,824 | ||||||||
Commercial & Industrial | 18,563 | 76,376 | 15,121 | 22,430 | 24,734 | — | (7,705 | ) | 149,519 | |||||||||||||||
OSS & Capacity Release | 972 | — | — | — | — | — | — | 972 | ||||||||||||||||
Other | 539 | — | — | — | — | — | — | 539 | ||||||||||||||||
$ | 64,056 | $ | 76,376 | $ | 15,121 | $ | 28,821 | $ | 24,734 | $ | 451 | $ | (7,705 | ) | $ | 201,854 | ||||||||
Product Line: | ||||||||||||||||||||||||
Gas | $ | 64,056 | $ | 76,376 | $ | 15,121 | $ | — | $ | — | $ | — | $ | (1,914 | ) | $ | 153,639 | |||||||
Electric | — | — | 28,821 | — | — | (2,012 | ) | 26,809 | ||||||||||||||||
Solar | — | — | — | 15,905 | — | (3,779 | ) | 12,126 | ||||||||||||||||
CHP | — | — | — | 7,161 | — | — | 7,161 | |||||||||||||||||
Landfills | — | — | — | 1,668 | — | — | 1,668 | |||||||||||||||||
Other | — | — | — | — | 451 | — | 451 | |||||||||||||||||
$ | 64,056 | $ | 76,376 | $ | 15,121 | $ | 28,821 | $ | 24,734 | $ | 451 | $ | (7,705 | ) | $ | 201,854 |
Six Months Ended June 30, 2018 | ||||||||||||||||||||||||
Gas Utility Operations | Wholesale Energy Operations | Retail Gas and Other Operations | Retail Electric Operations | On-Site Energy Production | Appliance Service Operations | Corporate Services and Intersegment | Total | |||||||||||||||||
Customer Type: | ||||||||||||||||||||||||
Residential | $ | 191,244 | $ | — | $ | — | $ | 14,487 | $ | — | $ | 971 | $ | — | $ | 206,702 | ||||||||
Commercial & Industrial | 59,368 | 250,222 | 48,367 | 44,380 | 45,891 | — | (16,475 | ) | 431,753 | |||||||||||||||
OSS & Capacity Release | 6,176 | — | — | — | — | — | — | 6,176 | ||||||||||||||||
Other | 1,202 | — | — | — | — | — | — | 1,202 | ||||||||||||||||
$ | 257,990 | $ | 250,222 | $ | 48,367 | $ | 58,867 | $ | 45,891 | $ | 971 | $ | (16,475 | ) | $ | 645,833 | ||||||||
Product Line: | ||||||||||||||||||||||||
Gas | $ | 257,990 | $ | 250,222 | $ | 48,367 | $ | — | $ | — | $ | — | $ | (6,488 | ) | $ | 550,091 | |||||||
Electric | — | — | 58,867 | — | — | (3,680 | ) | 55,187 | ||||||||||||||||
Solar | — | — | — | 27,741 | — | (6,307 | ) | 21,434 | ||||||||||||||||
CHP | — | — | — | 15,014 | — | — | 15,014 | |||||||||||||||||
Landfills | — | — | — | 3,136 | — | — | 3,136 | |||||||||||||||||
Other | — | — | — | — | 971 | — | 971 | |||||||||||||||||
$ | 257,990 | $ | 250,222 | $ | 48,367 | $ | 58,867 | $ | 45,891 | $ | 971 | $ | (16,475 | ) | $ | 645,833 |
Accounts Receivable (1) | Unbilled Revenue (2) | |||||
SJI (including SJG and all other consolidated subsidiaries): | ||||||
Beginning balance as of 1/1/18 | $ | 202,379 | $ | 73,377 | ||
Ending balance as of 6/30/18 | 196,601 | 24,464 | ||||
Increase (Decrease) | $ | (5,778 | ) | $ | (48,913 | ) |
SJG: | ||||||
Beginning balance as of 1/1/18 | $ | 78,571 | $ | 54,980 | ||
Ending balance as of 6/30/18 | 95,420 | 9,721 | ||||
Increase (Decrease) | $ | 16,849 | $ | (45,259 | ) |
17. | SUBSEQUENT EVENTS: |
• | SJI - This section describes the financial condition and results of operations of South Jersey Industries, Inc. and its subsidiaries on a consolidated basis. It includes discussions of our regulated operations, including South Jersey Gas Company (SJG), and our non-regulated operations. |
• | SJG - This section describes the financial condition and results of operations of SJG, a wholly-owned subsidiary of SJI Utilities, Inc, which comprises the gas utility operations segment. |
• | Gas utility operations (SJIU, consisting of SJG) consist primarily of natural gas distribution to residential, commercial and industrial customers. The result of SJG are only included in this operating segment. |
• | Wholesale energy operations include the activities of South Jersey Resources Group, LLC (SJRG) and South Jersey Exploration, LLC (SJEX). |
• | South Jersey Energy Company (SJE) is involved in both retail gas and retail electric activities. |
◦ | Retail gas and other operations include natural gas acquisition and transportation service business lines. |
◦ | Retail electric operations consist of electricity acquisition and transportation to commercial, industrial and residential customers. |
• | On-site energy production consists of the thermal energy facility of Marina Energy, LLC (Marina) and other energy-related projects. Also included in this segment are the activities of ACB Energy Partners, LLC (ACB), AC Landfill Energy, LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE), SX Landfill Energy, LLC (SXLE), MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS). |
• | Appliance service operations includes South Jersey Energy Service Plus, LLC (SJESP), which serviced residential and small commercial HVAC systems, installed small commercial HVAC systems, provided plumbing services and serviced appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. On September 1, 2017, SJESP sold certain assets of its residential and small commercial HVAC and plumbing business to a third party. SJESP continues to receive commissions paid on service contracts from the third party and will do so on a go forward basis. |
• | SJI Midstream, LLC (Midstream) was formed to invest in infrastructure and other midstream projects, including a current project to build a natural gas pipeline in Pennsylvania and New Jersey. |
• | Costs incurred related to the agreement to acquire Elizabethtown Gas and Elkton Gas are recorded in the Corporate & Services segment. |
• | The net income contribution from on-site energy production at Marina for the three months ended June 30, 2018 decreased $78.9 million to a net loss of $78.0 million, primarily due to $74.2 million (after-tax) of impairment charges taken on solar generating facilities in the second quarter of 2018, which were primarily driven by the purchase price in the agreement to sell solar assets being less than the carrying amount of the assets (see Note 1 to the condensed consolidated financial statements). Also contributing were consulting and legal costs incurred as a result of the expected sale of Marina's solar assets to a third-party buyer. |
• | SJI recorded $13.5 million (after-tax) of expenses related to costs incurred in connection with the acquisition of the assets of Elizabethtown Gas and Elkton Gas (collectively, the "Acquisition"), which closed July 1, 2018; see Notes 1 and 17 to the condensed consolidated financial statements. These expenses included consulting and legal charges, along with fees and interest on loans to fund the acquisition. These costs are recorded in the Corporate & Services segment. |
• | The net income contribution from the wholesale energy operations at SJRG for the three months ended June 30, 2018 increased $3.5 million to a net loss of $7.8 million compared with the same period in 2017, primarily due to the following: |
◦ | $5.8 million increase resulting from an unfavorable legal settlement that occurred during the second quarter of 2017, which SJRG did not incur in 2018. |
◦ | $3.1 million decrease due to the change in unrealized gains and losses on derivatives used by the wholesale energy operations to mitigate natural gas commodity price risk, as discussed under "Operating Revenues - Energy Group" below. This change was also impacted by Tax Reform. |
• | The net income contribution from the retail gas and electric operations at SJE for the three months ended June 30, 2018 increased $2.2 million to $2.0 million compared with the same period in 2017, primarily due to the change in unrealized gains and losses on forward financial contracts used to mitigate price risk on retail gas as discussed under "Operating Revenues – Energy Group" below, along with the impact of Tax Reform, as discussed in Note 1 to the condensed consolidated financial statements. |
• | The net income contribution from on-site energy production at Marina for the six months ended June 30, 2018 decreased $77.7 million to a net loss of $81.1 million, primarily due to $74.2 million (after-tax) of impairment charges taken on solar generating facilities in the second quarter of 2018, which were primarily driven by the purchase price in the agreement to sell solar assets being less than the carrying amount of the assets (see Note 1 to the condensed consolidated financial statements). Also contributing were consulting and legal costs incurred as a result of the expected sale of Marina's solar assets to a third-party buyer. |
• | SJI recorded $20.4 million (after-tax) of expenses related to costs incurred in connection with the acquisition of the assets of Elizabethtown Gas and Elkton Gas (collectively, the "Acquisition"), which closed July 1, 2018; see Notes 1 and 17 to the condensed consolidated financial statements. These expenses included consulting and legal charges, along with fees and interest on loans to fund the acquisition. These costs are recorded in the Corporate & Services segment. |
• | The net income contribution from the retail gas and electric operations at SJE for the six months ended June 30, 2018 decreased $2.1 million to a net loss of $2.1 million, primarily due to the change in unrealized gains and losses on forward financial contracts used to mitigate price risk on retail gas as discussed under "Operating Revenues – Energy |
• | The net income contribution from the wholesale energy operations at SJRG for the six months ended June 30, 2018 increased $68.5 million to $48.8 million primarily due to the following: |
◦ | $27.7 million increase primarily due to higher margins on daily energy trading activities and an overall increase in sales due to cold weather experienced in the first quarter of 2018, as discussed under "Gross Margin - Energy Group" below. Also contributing was the impact of the Tax Reform, as discussed in Note 1 to the condensed consolidated financial statements. |
◦ | $25.4 million increase due to lower legal fees, reserves and interest recorded on a pricing dispute between SJI and a gas supplier during the first half of 2018 versus 2017 (see Note 11 to the condensed consolidated financial statements). |
◦ | $9.6 million increase due to the change in unrealized gains and losses on derivatives used by the wholesale energy operations to mitigate natural gas commodity price risk, as discussed under "Operating Revenues - Energy Group" below. This change was also impacted by Tax Reform. |
◦ | $5.8 million increase resulting from an unfavorable legal settlement that occurred during the second quarter of 2017, which SJRG did not incur in 2018. |
• | The net income contribution from gas utility operations at SJG for the six months ended June 30, 2018 increased $19.6 million to $68.3 million, primarily due to the base rate case settlement, the roll-in of investments for infrastructure replacement and improvement, along with customer growth. |
• | The wholesale energy operations at SJRG purchases and holds natural gas in storage and maintains capacity on interstate pipelines to earn profit margins in the future. The wholesale energy operations utilize derivatives to mitigate commodity price risk in order to substantially lock-in the profit margin that will ultimately be realized. However, both gas stored in inventory and pipeline capacity are not considered derivatives and are not subject to fair value accounting. Conversely, the derivatives used to reduce the risk associated with a change in the value of inventory and pipeline capacity are accounted for at fair value, with changes in fair value recorded in operating results in the period of change. As a result, earnings are subject to volatility as the market price of derivatives change, even when the underlying hedged value of inventory and pipeline capacity are unchanged. Additionally, volatility in earnings is created when realized gains and losses on derivatives used to mitigate commodity price risk on expected future purchases of gas injected into storage are recognized in earnings when the derivatives settle, but the cost of the related gas in storage is not recognized in earnings until the period of withdrawal. This volatility can be significant from period to period. Over time, gains or losses on the sale of gas in storage, as well as use of capacity, will be offset by losses or gains on the derivatives, resulting in the realization of the profit margin expected when the transactions were initiated. |
• | The retail electric operations at SJE use forward contracts to mitigate commodity price risk on fixed price electric contracts with customers. In accordance with GAAP, the forward contracts are recorded at fair value, with changes in fair value recorded in earnings in the period of change. Several related customer contracts are not considered derivatives and, therefore, are not recorded in earnings until the electricity is delivered. As a result, earnings are subject to volatility as the market price of the forward contracts change, even when the underlying hedged value of the customer contract is unchanged. Over time, gains or losses on the sale of the fixed price electric under contract will be offset by losses or gains on the forward contracts, resulting in the realization of the profit margin expected when the transactions were initiated. |
• | For the three and six months ended June 30, 2018, Economic Earnings excludes approximately $99.2 million (pre-tax) of impairment charges recorded on solar generating facilities, which was primarily driven by the purchase price in the agreement to sell solar assets being less than the carrying amount of the assets. See Note 1 to the condensed consolidated financial statements. |
• | For the three and six months ended June 30, 2018, Economic Earnings excludes various costs related to the agreement to acquire the assets of Elizabethtown Gas and Elkton Gas, along with various costs related to a series of agreements whereby Marina will sell its portfolio of solar energy assets to a third-party buyer. See Note 1 to the condensed consolidated financial statements. |
• | For the three and six months ended June 30, 2017, Economic Earnings excludes the impact of a May 2017 jury verdict stemming from a pricing dispute with a gas supplier over costs, including interest charges and legal fees incurred, along with the realized difference in the market value of the commodity (including financial hedges). Economic Earnings also excludes the impact of a 2017 settlement of a legal claim stemming from a dispute related to a three-year capacity management contract with a counterparty, including legal fees incurred. |
• | For the six months ended June 30, 2017, Economic Earnings excludes an approximately $2.4 million pre-tax loss related to a new interest rate derivative and amendments made to an existing interest rate derivative linked to unrealized losses previously recorded in Accumulated Other Comprehensive Loss (AOCL). SJI reclassified this amount from AOCL to Interest Charges on the condensed consolidated statements of income as a result of the prior hedged transactions being deemed probable of not occurring. Since the economic impact will not be realized until future periods, this amount is excluded from Economic Earnings. See Note 12 to the condensed consolidated financial statements. |
• | For the six months ended June 30, 2017, Economic Earnings excludes an approximately $0.3 million pre-tax charge incurred related to an impairment charge due to a reduction in the expected cash flows to be received from a solar generating facility, for which the economic impact will not be realized until a future period. See Note 1 to the condensed consolidated financial statements. An impairment charge was also recorded in 2012 within Income from Continuing Operations on a separate solar generating facility which reduced its depreciable basis and recurring depreciation expense, and this was also excluded from Economic Earnings. |
• | The income contribution from the wholesale energy operations at SJRG for the six months ended June 30, 2018 increased $27.7 million to $36.8 million, primarily due to higher margins on daily energy trading activities and an overall increase in sales due to cold weather experienced in the first quarter of 2018, as discussed under "Gross Margin - Energy Group" below. Also contributing was the impact of the Tax Reform, as discussed in Note 1 to the condensed consolidated financial statements. |
• | The income contribution from gas utility operations at SJG for the six months ended June 30, 2018 increased $19.6 million to $68.3 million, primarily due to the base rate case settlement, the roll-in of investments for infrastructure replacement and improvement, along with customer growth. |
• | The income contribution from the retail gas and electric operations at SJE for the six months ended June 30, 2018 decreased $1.8 million to a net loss of $0.8 million primarily due to the expiration in the second quarter of 2017 of a large electric sales contract with a group of school boards. Also contributing was a lower tax benefit on SJE's net loss as a result of Tax Reform. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Loss) Income from Continuing Operations | $ | (93,793 | ) | $ | (7,612 | ) | $ | 17,513 | $ | 30,135 | |||||
Minus/Plus: | |||||||||||||||
Unrealized Mark-to-Market Losses (Gains) on Derivatives | 5,697 | 8,336 | (19,493 | ) | (5,573 | ) | |||||||||
Realized Losses on Inventory Injection Hedges | — | — | — | 332 | |||||||||||
Unrealized Loss on Property, Plant and Equipment (A) | 99,233 | — | 99,233 | 256 | |||||||||||
Net Losses from Legal Proceedings (B) | 1,661 | 11,620 | 3,006 | 55,607 | |||||||||||
Acquisition/Sale Costs (C) | 26,246 | — | 35,523 | — | |||||||||||
Other (D) | — | (46 | ) | — | 2,305 | ||||||||||
Income Taxes (E) | (33,555 | ) | (7,821 | ) | (29,875 | ) | (21,028 | ) | |||||||
Economic Earnings | $ | 5,489 | $ | 4,477 | $ | 105,907 | $ | 62,034 | |||||||
Earnings per Share from Continuing Operations | $ | (1.12 | ) | $ | (0.10 | ) | $ | 0.21 | $ | 0.38 | |||||
Minus/Plus: | |||||||||||||||
Unrealized Mark-to-Market Losses (Gains) on Derivatives | 0.07 | 0.11 | (0.23 | ) | (0.07 | ) | |||||||||
Unrealized Loss on Property, Plant and Equipment (A) | 1.18 | — | 1.20 | — | |||||||||||
Net Losses from Legal Proceedings (B) | 0.02 | 0.14 | 0.04 | 0.70 | |||||||||||
Acquisition/Sale Costs (C) | 0.31 | — | 0.43 | — | |||||||||||
Other (D) | — | — | — | 0.03 | |||||||||||
Income Taxes (E) | (0.39 | ) | (0.09 | ) | (0.36 | ) | (0.26 | ) | |||||||
Economic Earnings per Share | $ | 0.07 | $ | 0.06 | $ | 1.29 | $ | 0.78 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(Losses) Gains on Energy Related Commodity Contracts | $ | (6,178 | ) | $ | (7,855 | ) | $ | 17,175 | $ | 6,832 | |||||
Gains (Losses) on Interest Rate Contracts | 620 | (379 | ) | 2,248 | (1,384 | ) | |||||||||
Total before income taxes | (5,558 | ) | (8,234 | ) | 19,423 | 5,448 | |||||||||
Unrealized mark-to-market (losses) gains on derivatives held by affiliated companies, before taxes | (139 | ) | (102 | ) | 70 | 125 | |||||||||
Total unrealized mark-to-market (losses) gains on derivatives | (5,697 | ) | (8,336 | ) | 19,493 | 5,573 | |||||||||
Realized Losses on Inventory Injection Hedges | — | — | (332 | ) | |||||||||||
Unrealized Loss on Property, Plant and Equipment (A) | (99,233 | ) | — | (99,233 | ) | (256 | ) | ||||||||
Net Losses from Legal Proceedings (B) | (1,661 | ) | (11,620 | ) | (3,006 | ) | (55,607 | ) | |||||||
Acquisition/Sale Costs (C) | (26,246 | ) | — | (35,523 | ) | — | |||||||||
Other (D) | — | 46 | — | (2,305 | ) | ||||||||||
Income Taxes (E) | 33,555 | 7,821 | 29,875 | 21,028 | |||||||||||
Total reconciling items between income (losses) from continuing operations and economic earnings | $ | (99,282 | ) | $ | (12,089 | ) | $ | (88,394 | ) | $ | (31,899 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Utility Operating Revenues: | |||||||||||||||
Firm Sales - | |||||||||||||||
Residential | $ | 42,184 | $ | 35,498 | 182,938 | $ | 150,090 | ||||||||
Commercial | 10,478 | 11,000 | 39,227 | 36,640 | |||||||||||
Industrial | 613 | 669 | 2,770 | 2,489 | |||||||||||
Cogeneration & Electric Generation | 1,750 | 675 | 3,049 | 1,462 | |||||||||||
Firm Transportation - | |||||||||||||||
Residential | 1,798 | 1,828 | 8,306 | 8,033 | |||||||||||
Commercial | 6,063 | 5,379 | 22,535 | 18,164 | |||||||||||
Industrial | 5,687 | 4,652 | 12,049 | 9,462 | |||||||||||
Cogeneration & Electric Generation | 1,014 | 1,054 | 2,350 | 2,234 | |||||||||||
Total Firm Revenues | 69,587 | 60,755 | 273,224 | 228,574 | |||||||||||
Interruptible Sales | 8 | 22 | 123 | 22 | |||||||||||
Interruptible Transportation | 256 | 193 | 578 | 432 | |||||||||||
Off-System Sales | 4,600 | 20,421 | 32,185 | 47,199 | |||||||||||
Capacity Release | 2,075 | 1,537 | 4,649 | 3,280 | |||||||||||
Other | 275 | 323 | 501 | 558 | |||||||||||
76,801 | 83,251 | 311,260 | 280,065 | ||||||||||||
Less: Intercompany Sales | (1,198 | ) | (1,313 | ) | (3,889 | ) | (2,358 | ) | |||||||
Total Utility Operating Revenues | 75,603 | 81,938 | 307,371 | 277,707 | |||||||||||
Less: | |||||||||||||||
Cost of Sales - Utility | 19,379 | 33,644 | 109,187 | 106,068 | |||||||||||
Less: Intercompany Cost of Sales | (1,198 | ) | (1,313 | ) | (3,889 | ) | (2,358 | ) | |||||||
Total Cost of Sales - Utility (Excluding depreciation) | 18,181 | 32,331 | 105,298 | 103,710 | |||||||||||
Conservation Recoveries* | 3,288 | 1,246 | 8,964 | 3,794 | |||||||||||
RAC Recoveries* | 4,086 | 2,500 | 8,172 | 5,001 | |||||||||||
EET Recoveries* | 465 | 302 | 977 | 686 | |||||||||||
Revenue Taxes | 179 | 195 | 545 | 634 | |||||||||||
Utility Margin** | $ | 49,404 | $ | 45,364 | $ | 183,415 | $ | 163,882 | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Utility Margin: | |||||||||||||||
Residential | $ | 32,744 | $ | 24,054 | $ | 128,807 | $ | 97,500 | |||||||
Commercial and Industrial | 16,512 | 12,825 | 52,155 | 39,657 | |||||||||||
Cogeneration and Electric Generation | 1,196 | 1,093 | 2,191 | 2,221 | |||||||||||
Interruptible | (102 | ) | 33 | 27 | 37 | ||||||||||
Off-System Sales & Capacity Release | 608 | 676 | 2,543 | 2,632 | |||||||||||
Other Revenues | 817 | 615 | 1,043 | 849 | |||||||||||
Margin Before Weather Normalization & Decoupling | 51,775 | 39,296 | 186,766 | 142,896 | |||||||||||
CIP Mechanism | (3,145 | ) | 5,166 | (4,905 | ) | 19,141 | |||||||||
EET Mechanism | 774 | 902 | 1,554 | 1,845 | |||||||||||
Utility Margin** | $ | 49,404 | $ | 45,364 | $ | 183,415 | $ | 163,882 | |||||||
Degree Days: | 535 | 427 | 2,961 | 2,584 |
• | Gross margin from the wholesale energy operations at SJRG increased $6.8 million to a loss of $7.5 million for the three months ended June 30, 2018 compared with the same period in 2017, primarily due to: |
◦ | $9.5 million increase due to an unfavorable settlement of a legal dispute that occurred in the second quarter of 2017, which SJRG did not incur in 2018. |
◦ | $2.9 million decrease resulting from the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings. |
• | Gross margin from the wholesale energy operations at SJRG increased $93.0 million to $71.5 million for the six months ended June 30, 2018 compared with the same period in 2017, primarily due to: |
◦ | $40.6 million charge from prior year recorded on a pricing dispute between SJI and a gas supplier during the first quarter of 2018 versus 2017 (see Note 11 to the condensed consolidated financial statements). |
◦ | $10.7 million increase resulting from the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings. |
◦ | $9.5 million increase due to an unfavorable settlement of a legal dispute that occurred in the second quarter of 2017, which SJRG did not incur in 2018. |
◦ | The remaining $32.2 million increase is primarily due to higher margins on daily energy trading activities and an overall increase in sales due to cold weather experienced in the first quarter of 2018. |
• | Gross margin from SJE’s retail gas and other operations increased $3.2 million to $4.0 million for the three months ended June 30, 2018 compared with the same period in 2017. This was primarily due to the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings and represented a total increase of $3.1 million. |
• | Gross margin from SJE’s retail gas and other operations decreased $0.9 million to $0.6 million for the six months ended June 30, 2018 compared with the same period in 2017. This was primarily due to the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings and represented a total decrease of $0.9 million. |
• | Gross margin from SJE’s retail electric operations decreased $0.1 million to $2.1 million and $1.6 million to $2.7 million for the three and six months ended June 30, 2018, respectively, compared with the same periods in 2017, primarily due to lower sales volumes resulting from the expiration in the second quarter of 2017 of a large electric sales contract with a group of school boards. Partially offsetting this decrease was the change in unrealized gains and losses recorded on forward financial contracts due to price volatility, which is excluded for Economic Earnings and represented a total increase of $1.5 million and $0.6 million for the three and six months ended June 30, 2018, respectively, compared with the same periods in 2017. |
• | Gross margin from on-site energy production at Marina decreased $0.4 million to $25.1 million and $0.7 million to $42.5 million for the three and six months ended June 30, 2018, respectively, compared with the same periods in 2017, which did not represent a significant change. |
• | Gross margin from appliance service operations at SJESP decreased $0.5 million to $0.5 million and $0.7 million to $1.0 million for the three and six months ended June 30, 2018, respectively, compared with the same periods in 2017, primarily due to the sale of certain assets of SJESP's residential and small commercial HVAC and plumbing business to a third party, which was completed on September 1, 2017 (see Note 1 to the condensed consolidated financial statements). |
Three Months Ended June 30, 2018 vs. 2017 | Six Months Ended June 30, 2018 vs. 2017 | ||||||
Gas Utility Operations | $ | 4,813 | $ | 10,008 | |||
Nonutility: | |||||||
Energy Group: | |||||||
Wholesale Energy Operations | (965 | ) | (1,760 | ) | |||
Retail Gas and Other Operations | (2 | ) | 235 | ||||
Retail Electric Operations | 20 | (114 | ) | ||||
Subtotal Energy Group | (947 | ) | (1,639 | ) | |||
Energy Services: | |||||||
On-Site Energy Production | 7,145 | 7,024 | |||||
Appliance Service Operations | (777 | ) | (1,542 | ) | |||
Subtotal Energy Services | 6,368 | 5,482 | |||||
Total Nonutility | 5,421 | 3,843 | |||||
Corporate & Services and Intercompany Eliminations | 10,477 | 15,456 | |||||
Total Operations Expense | $ | 20,711 | $ | 29,307 |
Company | Total Facility | Usage | Available Liquidity | Expiration Date | ||||||||||
SJI: | ||||||||||||||
Syndicated Revolving Credit Facility | $ | 400,000 | $ | 216,100 | (A) | $ | 183,900 | August 2022 | ||||||
Revolving Credit Facility | 50,000 | 50,000 | — | September 2019 | ||||||||||
Total SJI | 450,000 | 266,100 | 183,900 | |||||||||||
SJG: | ||||||||||||||
Commercial Paper Program/Revolving Credit Facility | 200,000 | 77,200 | (B) | 122,800 | August 2022 | |||||||||
Uncommitted Bank Line | 10,000 | — | 10,000 | August 2018 (C) | ||||||||||
Total SJG | 210,000 | 77,200 | 132,800 | |||||||||||
Total | $ | 660,000 | $ | 343,300 | $ | 316,700 |
• | SJI offered 12,669,491 shares of its common stock, par value $1.25 per share, at a public offering price of $29.50 per share. Of the offered shares, 5,889,830 shares were issued at closing, including 1,652,542 shares pursuant to the underwriters’ option. The gross proceeds from these shares was $173.7 million, with net proceeds after deducting underwriting discounts and commissions of $167.7 million. The remaining 6,779,661 shares of common stock ("Forward Shares") are to be sold by Bank of America, N.A., as forward seller, pursuant to a forward sale agreement. The Company received no proceeds from the sale of the Forward Shares at the closing, and has not received proceeds as of June 30, 2018. SJI has an option to settle the forward sale agreement by delivering newly issued shares of SJI common stock and receive proceeds, subject to certain adjustments, from the sale of those shares, assuming one or more future physical settlements of the forward sale agreement, no later than April 2019. SJI may also choose to settle the forward sale contract with a cash payment, or multiple cash payments, no later than April 2019. In the event SJI elects to settle all or a portion of the forward sale contract with a cash payment, no additional shares of SJI common stock would be issued under the forward sale contract for the portions that were cash settled. |
• | SJI issued and sold 5,750,000 Equity Units, initially in the form of Corporate Units, which included 750,000 Corporate Units pursuant to the underwriters’ option. Each Corporate Unit has a stated amount of $50 and is comprised of (a) a purchase contract obligating the holder to purchase from the Company, and for the Company to sell to the holder for a price in cash of $50, on the purchase contract settlement date, or April 15, 2021, subject to earlier termination or settlement, a certain number of shares of common stock; and (b) a 1/20, or 5%, undivided beneficial ownership interest in $1,000 principal amount of SJI’s 2018 Series A 3.70% Remarketable Junior Subordinated Notes due 2031. SJI will pay the holder quarterly contract adjustment payments at a rate of 3.55% per year on the stated amount of $50 per Equity Unit, in respect of each purchase contract, subject to the Company's right to defer these payments. No deferral period will extend beyond the purchase contract settlement date. The contract adjustment payments are payable quarterly on January 15, April 15, July 15 and October 15 of each year (except that if such date is not a business day, contract adjustment payments will be payable on the following business day, without adjustment), commencing on July 15, 2018. The contract adjustment payments will be subordinated to all of the Company's existing and future “Priority Indebtedness” and will be structurally subordinated to all liabilities of our subsidiaries. The present value of the aggregate amount of the contract adjustment payments due through April 15, 2021 was recorded as Other Current and Noncurrent Liabilities on the condensed consolidated balance sheet, and will be amortized over the life of this instrument. This offering resulted in gross proceeds of approximately $287.5 million, with net proceeds after deducting underwriting discounts and commissions of $278.9 million. As of June 30, 2018, the net proceeds, after amortization of the underwriting discounts, are recorded as Long-Term Debt on the condensed consolidated balance sheets. |
As of June 30, 2018 | As of December 31, 2017 | ||||
Equity | 29.5 | % | 43.7 | % | |
Long-Term Debt | 62.9 | % | 43.6 | % | |
Short-Term Debt | 7.6 | % | 12.7 | % | |
Total | 100.0 | % | 100.0 | % |
• | In order to pay for the Acquisition of ETG and ELK (see Note 1 to the condensed consolidated financial statements), SJI maintained $1.74 billion in an escrow account as of June 30, 2018. On July 1, 2018, the Company paid the purchase prices for ETG and ELK ($1.69 billion and $10.0 million, respectively), plus an adjustment for the net working capital of each business (see Note 17 to the condensed consolidated financial statements). |
• | $1.59 billion increase in long-term debt (excluding unamortized debt issuance costs), which increased due to several SJI borrowings entered into to fund the acquisition of ETG and ELK, (see Note 14 to the condensed consolidated financial statements) |
• | Approximately $110.4 million increase in construction obligations primarily due to vendor agreements at the gas utility operations at SJG due to new construction and environmental projects for 2018; |
• | As part of the issuance of Equity and Corporate Units, the Company has a purchase contract obligating the holder of the units to purchase from the Company, and for the Company to sell to the holder for a price in cash of $50, a certain number of shares of common stock. See Note 4 to the condensed consolidated financial statements. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Utility Throughput – decatherms(dt): | |||||||||||
Firm Sales - | |||||||||||
Residential | 3,322 | 2,458 | 16,052 | 13,286 | |||||||
Commercial | 911 | 710 | 3,620 | 3,218 | |||||||
Industrial | 521 | 53 | 736 | 254 | |||||||
Cogeneration & Electric Generation | (35 | ) | 87 | 220 | 220 | ||||||
Firm Transportation - | |||||||||||
Residential | 198 | 178 | 1,027 | 1,021 | |||||||
Commercial | 1,172 | 979 | 4,313 | 3,577 | |||||||
Industrial | 2,363 | 2,579 | 5,338 | 5,633 | |||||||
Cogeneration & Electric Generation | 1,158 | 1,543 | 2,179 | 2,705 | |||||||
Total Firm Throughput | 9,610 | 8,587 | 33,485 | 29,914 | |||||||
Interruptible Sales | 1 | 3 | 10 | 3 | |||||||
Interruptible Transportation | 233 | 279 | 534 | 670 | |||||||
Off-System Sales | 1,130 | 5,997 | 7,877 | 11,978 | |||||||
Capacity Release | 23,551 | 13,571 | 41,580 | 34,669 | |||||||
Total Throughput - Utility | 34,525 | 28,437 | 83,486 | 77,234 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Income Impact: | |||||||||||||||
CIP – Weather Related | $ | (0.6 | ) | $ | 2.2 | $ | 0.3 | $ | 8.0 | ||||||
CIP – Usage Related | (1.1 | ) | 0.9 | (3.3 | ) | 3.3 | |||||||||
Total Net Income Impact | $ | (1.7 | ) | $ | 3.1 | $ | (3.0 | ) | $ | 11.3 | |||||
Weather Compared to 20-Year Average | 193.7% Colder | 23.9% Warmer | 178.5% Colder | 15.1% Warmer | |||||||||||
Weather Compared to Prior Year | 25.5% Colder | 26.5% Warmer | 14.6% Colder | 7.6% Warmer |
Three Months Ended June 30, 2018 vs. 2017 | Six Months Ended June 30, 2018 vs. 2017 | |||||
Operations | 4,813 | $ | 10,008 | |||
Maintenance | 2,140 | $ | 4,021 | |||
Depreciation | 1,528 | $ | 3,177 | |||
Energy and Other Taxes | (374 | ) | $ | (414 | ) |
As of June 30, 2018 | As of December 31, 2017 | ||||
Common Equity | 52.4 | % | 51.3 | % | |
Long-Term Debt | 43.6 | % | 45.8 | % | |
Short-Term Debt | 4.0 | % | 2.9 | % | |
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 | $ | 1,712 | $ | 96 | $ | — | $ | 1,808 | |||||||
Prices provided by other external sources | 5,970 | 2,501 | 110 | 8,581 | |||||||||||
Prices based on internal models or other valuation methods | 16,210 | 7,009 | 567 | 23,786 | |||||||||||
Total | $ | 23,892 | $ | 9,606 | $ | 677 | $ | 34,175 | |||||||
Liabilities | |||||||||||||||
Source of Fair Value | Maturity <1 Year | Maturity 1 -3 Years | Maturity Beyond 3 Years | Total | |||||||||||
Prices actively quoted | $ | 1,529 | $ | 1,515 | $ | 63 | $ | 3,107 | |||||||
Prices provided by other external sources | 4,337 | 1,356 | — | 5,693 | |||||||||||
Prices based on internal models or other valuation methods | 4,932 | 371 | 122 | 5,425 | |||||||||||
Total | $ | 10,798 | $ | 3,242 | $ | 185 | $ | 14,225 |
• | NYMEX (New York Mercantile Exchange) is the primary national commodities exchange on which natural gas is traded. Volumes of our NYMEX contracts included in the table above under "Prices actively quoted" are 44.3 million decatherms (dts) with a weighted average settlement price of $2.90 per dt. |
• | Basis represents the differential to the NYMEX natural gas futures contract for delivering gas to a specific location. Volumes of our basis contracts, along with volumes of our discounted index related purchase and sales contracts, included in the table above under "Prices provided by other external sources" and "Prices based on internal models or other valuation methods" are 56.9 million dts with a weighted average settlement price of $(0.51) per dt. |
• | Fixed Price Gas Daily represents the price of a NYMEX natural gas futures contract adjusted for the difference in price for delivering the gas at another location. Volumes of our Fixed Price Gas Daily contracts included in the table above under "Prices provided by other external sources" are 30.9 million dts with a weighted average settlement price of $2.39 per dt. |
• | Volumes of electric included in the table above under "Prices based on internal models or other valuation methods" are 0.4 million megawatt hours (mwh) with a weighted average settlement price of $32.61 per mwh. |
Net Derivatives — Energy Related Liabilities, January 1, 2018 | $ | (4,836 | ) |
Contracts Settled During the Six Months Ended June 30, 2018, Net | 11,245 | ||
Other Changes in Fair Value from Continuing and New Contracts, Net | 13,541 | ||
Net Derivatives — Energy Related Assets, June 30, 2018 | $ | 19,950 |
Notional Amount | Fixed Interest Rate | Start Date | Maturity | Obligor | ||||||
$ | 20,000,000 | 3.049% | 3/15/2017 | 3/15/2027 | SJI | |||||
$ | 20,000,000 | 3.049% | 3/15/2017 | 3/15/2027 | SJI | |||||
$ | 10,000,000 | 3.049% | 3/15/2017 | 3/15/2027 | SJI | |||||
$ | 12,500,000 | 3.530% | 12/1/2006 | 2/1/2036 | SJG | |||||
$ | 12,500,000 | 3.430% | 12/1/2006 | 2/1/2036 | SJG |
Assets | ||||||||||||
Source of Fair Value | Maturity < 1 Year | Maturity 1 - 3 Years | Total | |||||||||
Prices Actively Quoted (NYMEX) | $ | 729 | $ | — | $ | 729 | ||||||
Prices Provided by Other External Sources (Basis) | — | — | — | |||||||||
Prices based on internal models or other valuable methods | 5,997 | — | 5,997 | |||||||||
Total | $ | 6,726 | $ | — | $ | 6,726 |
Liabilities | ||||||||||||
Maturity | Maturity | |||||||||||
Source of Fair Value | < 1 Year | 1 - 3 Years | Total | |||||||||
Prices Actively Quoted (NYMEX) | $ | 276 | $ | 114 | $ | 390 | ||||||
Prices Provided by Other External Sources (Basis) | 674 | — | 674 | |||||||||
Prices based on internal models or other valuable methods | — | — | — | |||||||||
Total | $ | 950 | $ | 114 | $ | 1,064 |
Net Derivatives — Energy Related Liabilities, January 1, 2018 | $ | (2,108 | ) |
Contracts Settled During the Six Months ended June 30, 2018, Net | 1,560 | ||
Other Changes in Fair Value from Continuing and New Contracts, Net | 6,210 | ||
Net Derivatives — Energy Related Assets, June 30, 2018 | $ | 5,662 |
• | our senior management’s attention may be diverted from the management of daily operations to the integration of the assets acquired in the Acquisition; |
• | we could incur significant unknown and contingent liabilities for which we have limited or no contractual remedies or insurance coverage; |
• | the assets to be acquired may not perform as well as we anticipate; and |
• | unexpected costs, delays and challenges may arise in integrating the assets acquired in the Acquisition into our existing operations. |
• | make it more difficult for us to repay or refinance our debts as they become due during adverse economic and industry conditions; |
• | limit our flexibility to pursue other strategic opportunities or react to changes in our business and the industry in which we operate and, consequently, place us at a competitive disadvantage to competitors with less debt; |
• | require an increased portion of our cash flows from operations to be used for debt service payments, thereby reducing the availability of cash flows to fund working capital, capital expenditures, dividend payments and other general corporate purposes; |
• | result in a downgrade in the credit rating of our indebtedness, which could limit our ability to borrow additional funds or increase the interest rates applicable to our indebtedness; |
• | result in higher interest expense in the event of increases in market interest rates for both long-term debt as well as short-term commercial paper, bank loans or borrowings under our line of credit at variable rates; |
• | reduce the amount of credit available to support hedging activities; and |
• | require that additional terms, conditions or covenants be placed on us. |
• | be dilutive to our existing shareholders and earnings per share; |
• | impact our capital structure and cost of the capital; |
• | be adversely impacted by movements in the overall equity markets or the utility or natural gas utility industry sectors of that market, which could impact the offering price of our new equity or necessitate the use of other equity or equity-like instruments such as preferred stock, convertible preferred shares, or convertible debt; and |
• | impact our ability to make our current and future dividend payments. |
Exhibit No. | Description | |
Certification of SJI's Principal Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act. | ||
Certification of SJI's Principal Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act. | ||
Certification of SJG's Principal Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act. | ||
Certification of SJG's Principal Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act. | ||
Certification of SJI's Principal Executive Officer Pursuant to Rule 13a-14(b) of the Exchange Act as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code). | ||
Certification of SJI's Principal Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code). | ||
Certification of SJG's Principal Executive Officer Pursuant to Rule 13a-14(b) of the Exchange Act as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code). | ||
Certification of SJG's Principal Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code). | ||
101 | The following financial statements from South Jersey Industries, Inc.’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2018, filed with the Securities and Exchange Commission on August 8, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income; (ii) the Condensed Consolidated Statements of Comprehensive Income; (iii) the Condensed Consolidated Statements of Cash Flows; (iv) the Condensed Consolidated Balance Sheets and (v) the Notes to Condensed Consolidated Financial Statements. The following financial statements from South Jersey Gas’ Quarterly Report on Form 10-Q for the three and six months ended June 30, 2018, filed with the Securities and Exchange Commission on August 8, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Statements of Income; (ii) the Condensed Statements of Comprehensive Income; (iii) the Condensed Statements of Cash Flows; and (iv) the Condensed Balance Sheets. |
SOUTH JERSEY INDUSTRIES, INC. | |||
Dated: | August 8, 2018 | By: | /s/ Stephen H. Clark |
Stephen H. Clark | |||
Executive Vice President & Chief Financial Officer - SJI | |||
(Principal Financial Officer) |
SOUTH JERSEY GAS COMPANY | |||
Dated: | August 8, 2018 | By: | /s/ Ann T. Anthony |
Ann T. Anthony | |||
Treasurer - SJG | |||
(Principal Financial Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2018, of South Jersey Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15 d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
South Jersey Industries, Inc. | |||
Date: | August 8, 2018 | By: | /s/ Michael J. Renna |
Michael J. Renna | |||
Principal Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2018, of South Jersey Industries, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15 d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
South Jersey Industries, Inc. | |||
Date: | August 8, 2018 | By: | /s/ Stephen H. Clark |
Stephen H. Clark | |||
Principal Financial Officer |
South Jersey Gas Company | |||
Date: | August 8, 2018 | By: | /s/ Craig S. Jennings |
Craig S. Jennings | |||
President & Chief Operations Officer |
South Jersey Gas Company | |||
Date: | August 8, 2018 | By: | /s/ Ann T. Anthony |
Ann T. Anthony | |||
Principal Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Michael J. Renna | |
Name: Michael J. Renna | |
Title: Principal Executive Officer | |
August 8, 2018 |
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Stephen H. Clark | |
Name: Stephen H. Clark | |
Title: Principal Financial Officer | |
August 8, 2018 |
/s/ Craig S. Jennings | |
Name: Craig S. Jennings | |
Principal Executive Officer | |
August 8, 2018 |
/s/ Ann T. Anthony | |
Name: Ann T. Anthony | |
Principal Financial Officer | |
August 8, 2018 |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Aug. 01, 2018 |
|
Document Information [Line Items] | ||
Entity Registrant Name | SOUTH JERSEY INDUSTRIES INC | |
Entity Central Index Key | 0000091928 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 85,506,217 | |
South Jersey Gas Company | ||
Document Information [Line Items] | ||
Entity Registrant Name | SOUTH JERSEY GAS Co | |
Entity Central Index Key | 0001035216 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 2,339,139 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Operating Revenues (See Note 16): | ||||
Utility | $ 75,603 | $ 81,938 | $ 307,371 | $ 277,707 |
Nonutility | 151,727 | 162,436 | 441,904 | 392,496 |
Total Operating Revenues | 227,330 | 244,374 | 749,275 | 670,203 |
Cost of Sales - (Excluding depreciation) | ||||
- Utility | 18,181 | 32,331 | 105,298 | 103,710 |
- Nonutility | 127,615 | 147,354 | 323,566 | 363,117 |
Operations (See Note 1) | 58,007 | 37,296 | 105,051 | 75,744 |
Impairment Charges | 99,233 | 0 | ||
Maintenance | 6,812 | 4,672 | 13,674 | 9,653 |
Depreciation | 24,771 | 24,556 | 49,433 | 48,879 |
Energy and Other Taxes | 1,243 | 1,551 | 3,682 | 3,622 |
Total Operating Expenses | 335,862 | 247,760 | 699,937 | 604,725 |
Operating Loss (See Note 1) | (108,532) | (3,386) | 49,338 | 65,478 |
Other Income and Expense (See Note 1) | 974 | 1,139 | 3,735 | 5,626 |
Interest Charges | (19,561) | (10,979) | (33,533) | (27,724) |
Loss Before Income Taxes | (127,119) | (13,226) | 19,540 | 43,380 |
Income Taxes | 31,972 | 5,544 | (4,443) | (16,326) |
Equity in Earnings of Affiliated Companies | 1,354 | 70 | 2,416 | 3,081 |
Loss from Continuing Operations | (93,793) | (7,612) | 17,513 | 30,135 |
Loss from Discontinued Operations - (Net of tax benefit) | (26) | (47) | (92) | (77) |
Net Loss | $ (93,819) | $ (7,659) | $ 17,421 | $ 30,058 |
Basic Earnings Per Common Share: | ||||
Continuing Operations (in dollars per share) | $ (1.12) | $ (0.10) | $ 0.21 | $ 0.38 |
Discontinued Operations (in dollars per share) | 0.00 | 0.00 | 0.00 | 0.00 |
Basic Earnings Per Common Share (in dollars per share) | $ (1.12) | $ (0.10) | $ 0.21 | $ 0.38 |
Average Shares of Common Stock Outstanding - Basic (in shares) | 84,080 | 79,549 | 81,850 | 79,534 |
Diluted Earnings Per Common Share: | ||||
Continuing Operations (in dollars per share) | $ (1.12) | $ (0.10) | $ 0.21 | $ 0.38 |
Discontinued Operations (in dollars per share) | 0.00 | 0.00 | 0.00 | 0.00 |
Diluted Earnings Per Common Share (in dollars per share) | $ (1.12) | $ (0.10) | $ 0.21 | $ 0.38 |
Average Shares of Common Stock Outstanding - Diluted (in shares) | 84,080 | 79,549 | 82,302 | 79,670 |
Dividends Declared Per Common Share (in dollars per share) | $ 0.28 | $ 0.27 | $ 0.56 | $ 0.54 |
South Jersey Gas Company | ||||
Operating Revenues (See Note 16): | ||||
Total Operating Revenues | $ 76,801 | $ 83,251 | $ 311,260 | $ 280,065 |
Cost of Sales - (Excluding depreciation) | ||||
Cost of Sales (Excluding depreciation) | 19,379 | 33,644 | 109,187 | 106,068 |
Operations (See Note 1) | 27,268 | 22,455 | 56,638 | 46,630 |
Maintenance | 6,812 | 4,672 | 13,674 | 9,653 |
Depreciation | 14,401 | 12,873 | 28,764 | 25,587 |
Energy and Other Taxes | 498 | 872 | 1,753 | 2,167 |
Total Operating Expenses | 68,358 | 74,516 | 210,016 | 190,105 |
Operating Loss (See Note 1) | 8,443 | 8,735 | 101,244 | 89,960 |
Other Income and Expense (See Note 1) | 607 | 1,039 | 3,117 | 2,081 |
Interest Charges | (6,999) | (6,077) | (13,727) | (11,955) |
Loss Before Income Taxes | 2,051 | 3,697 | 90,634 | 80,086 |
Income Taxes | (482) | (1,431) | (22,318) | (31,342) |
Net Loss | $ 1,569 | $ 2,266 | $ 68,316 | $ 48,744 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
||||||
Net Income (Loss) | $ (93,819) | $ (7,659) | $ 17,421 | $ 30,058 | |||||
Other Comprehensive Income, Net of Tax: | |||||||||
Unrealized Gain on Derivatives - Other | 8 | 7 | 17 | 1,522 | |||||
Other Comprehensive Income (Loss) - Net of Tax | [1] | 8 | 7 | 17 | 1,522 | ||||
Comprehensive Income (Loss) | (93,811) | (7,652) | $ 17,438 | $ 31,580 | |||||
Combined statutory tax rate | 25.00% | 40.00% | |||||||
South Jersey Gas Company | |||||||||
Net Income (Loss) | 1,569 | 2,266 | $ 68,316 | $ 48,744 | |||||
Other Comprehensive Income, Net of Tax: | |||||||||
Unrealized Gain on Derivatives - Other | 8 | 7 | 17 | 14 | |||||
Other Comprehensive Income (Loss) - Net of Tax | [2] | 8 | 7 | 17 | 14 | ||||
Comprehensive Income (Loss) | $ 1,577 | $ 2,273 | $ 68,333 | $ 48,758 | |||||
Combined statutory tax rate | 25.00% | 40.00% | |||||||
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: GENERAL - South Jersey Industries, Inc. (SJI or the Company) currently provides a variety of energy-related products and services primarily through the following wholly-owned subsidiaries:
•ACB Energy Partners, LLC (ACB) owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey. •AC Landfill Energy, LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE) and SX Landfill Energy, LLC (SXLE) own and operate landfill gas-to-energy production facilities in Atlantic, Burlington, Salem and Sussex Counties located in New Jersey. •MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS) own and operate solar-generation sites located in New Jersey.
BASIS OF PRESENTATION - SJI's condensed consolidated financial statements include the accounts of SJI, its wholly-owned subsidiaries (including SJG) and subsidiaries in which SJI has a controlling interest. SJI eliminates all significant intercompany accounts and transactions. In management’s opinion, the unaudited condensed consolidated financial statements of SJI and SJG reflect all normal and recurring adjustments needed to fairly present their respective financial positions, operating results and cash flows at the dates and for the periods presented. SJI’s and SJG's businesses are subject to seasonal fluctuations and, accordingly, this interim financial information should not be the basis for estimating the full year’s operating results. As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited condensed consolidated financial statements of SJI and SJG contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial statements should be read in conjunction with SJI’s and SJG's Annual Reports on Form 10-K for the year ended December 31, 2017 for a more complete discussion of the accounting policies and certain other information. Certain reclassifications have been made to SJI's and SJG's prior period condensed consolidated statements of income to conform to the current period presentation. The non-service cost components of net periodic pension and postretirement benefit costs are now included as a reduction to Other Income and Expense, as opposed to being recorded as an Operations Expense, to conform with ASU 2017-07, which is described below under "New Accounting Pronouncements." This caused a reduction to both Operations Expense and Other Income on the condensed consolidated statements of income for the three and six months ended June 30, 2017. This also caused a reclassification to SJI's prior period segments disclosure in Note 6 to increase Operating Income within both the Gas Utility Operations and Corporate & Services segments for the three and six months ended June 30, 2017. Certain reclassifications have been made to SJI's prior period segments disclosures to conform to the current period presentation. The activities of SJI Midstream, which were presented in the Corporate & Services segment during the three and six months ended June 30, 2017, are now separated into the Midstream segment for the same periods in 2018. This caused prior period adjustments to Interest Charges, Income Taxes and Property Additions in Note 6. ACQUISITIONS - In October 2017, SJI announced that it had entered into agreements to acquire the assets of Elizabethtown Gas (ETG) and Elkton Gas (ELK) from Pivotal Utility Holdings, Inc., a subsidiary of Southern Company Gas (collectively, the "Acquisition"). SJI, through its wholly-owned subsidiary SJIU, is acquiring the assets of both companies for total consideration of $1.7 billion. The Acquisition closed on July 1, 2018 (see Note 17). In the second quarter of 2018, SJI completed public equity offerings and issued long-term debt to help fund the Acquisition (see Notes 4 and 14, respectively). In connection with the Acquisition, SJI incurred the following fees during the three and six months ended June 30, 2018 (in millions):
(A) These interest charges relate to debt that was issued during the second quarter of 2018 to fund a portion of the purchase price for the Acquisition, along with the amortization of debt issuance costs incurred. See Note 14. (B) Relates to a senior unsecured bridge facility (the “Bridge Facility”), which was entered into in the fourth quarter of 2017. This Bridge Facility was terminated as of June 30, 2018. (C) All of these costs are included in the Corporate & Services segment. Not included in the table above are costs incurred, including underwriting discounts and commissions, related to equity and debt issuances of $6.5 million and $13.8 million, respectively, which are recorded in Premium on Common Stock and Long-Term Debt (net of $0.1 million of amortization), respectively, on the condensed consolidated balance sheet as of June 30, 2018. These equity and debt issuances were used to fund a portion of the Acquisition. See Notes 4 and 14. AGREEMENT TO SELL SOLAR ASSETS - On June 27, 2018, the Company, through its wholly-owned subsidiary, Marina, entered into a series of agreements whereby Marina will sell its portfolio of solar energy assets (the “Transaction”) to a third-party buyer. As part of the Transaction, Marina has agreed to sell 76 distributed solar energy projects located at 143 sites across New Jersey, Maryland, Massachusetts and Vermont with total capacity of approximately 204 MW and a net book value as of June 30, 2018 of $428.9 million (the “Projects”). Total consideration for the Transaction is $347.9 million in cash. As part of the Transaction, Marina will sell the assets comprising the Projects or, in some cases, 100% of the equity interests of certain special purpose companies wholly-owned by Marina that own the assets comprising certain Projects, including MCS, NBS and SBS. The sale of individual Projects will occur on a rolling basis as the conditions precedent to each closing are satisfied, including obtaining certain regulatory filings and receipt of consents to assignment of project contracts and permits. Depending on the timing of closing with respect to individual Projects, the individual purchase prices for those Projects may be adjusted to account for Project revenues retained by Marina during the period prior to such closings, with a maximum aggregate downward adjustment of approximately $5.4 million. Also in connection with the Transaction, Marina will lease certain of the Projects that have not yet passed the fifth anniversary of their placed-in-service dates for U.S. federal income tax purposes back from the buyer from the date each such project is acquired by the buyer until the later of the first anniversary of the applicable acquisition date and the fifth anniversary of the applicable placed-in-service date of the project. The Company currently expects that all but one of the Projects will satisfy all closing conditions on or before December 31, 2018; the remaining Project is expected to satisfy all closing conditions on or before August 31, 2019. The Company has recorded all of the assets related to these projects as Assets Held For Sale on the condensed consolidated balance sheets as of June 30, 2018, where they will remain until closing conditions have been met and the assets are transferred to the buyer. IMPAIRMENT OF LONG-LIVED ASSETS - Long-lived assets that are held and used are reviewed for impairment whenever events or changes in circumstances indicate carrying values may not be recoverable. Such reviews are performed in accordance with ASC 360. An impairment loss is indicated if the total future estimated undiscounted cash flows expected from an asset are less than its carrying value. An impairment charge is measured by the difference between an asset's carrying amount and fair value with the difference recorded within Operating Expenses on the condensed consolidated statements of income. Fair values can be determined by a variety of valuation methods, including third-party appraisals, sales prices of similar assets, and present value techniques. The Transaction described above under "Agreement to Sell Solar Assets" triggered an indicator of impairment as the purchase price was less than the carrying amount for several of the assets being sold (but not all of them) and, as a result, several assets were considered to be impaired. The Company measured the impairment loss as the difference between the carrying amount of the respective assets and the fair value, which was determined using the purchase price and the expected cash flows from the assets, including potential price reductions resulting from the timing needed to satisfy all required closing conditions. As a result, the Company recorded an impairment charge within the on-site energy production segment of $99.2 million (pre-tax) in Operating Expenses during the three and six months ended June 30, 2018, to reduce the carrying amount of several assets to their fair market value. The Company estimated the purchase price with the expectation that all but one of the Projects will satisfy all closing conditions on or before December 31, 2018; the remaining Project is expected to satisfy all closing conditions on or before August 31, 2019. No impairments were identified at SJG for the three and six months ended June 30, 2018. SJI recorded an impairment charge of $0.3 million for the six months ended June 30, 2017 due to a reduction in the expected cash flows to be received from a solar generating facility within the on-site energy production segment. No impairments charges were identified at SJI for the three months ended June 30, 2017. For the three and six months ended June 30, 2017, no impairments were identified at SJG. REVENUE-BASED TAXES - SJG collects certain revenue-based energy taxes from its customers. Such taxes include the New Jersey State Sales Tax and Public Utilities Assessment (PUA). State sales tax is recorded as a liability when billed to customers and is not included in revenue or operating expenses. The PUA is included in both Utility Revenue and Energy and Other Taxes and totaled $0.2 million for both the three months ended June 30, 2018 and 2017, and $0.5 million and $0.6 million for the six months ended June 30, 2018 and 2017, respectively. GAS EXPLORATION AND DEVELOPMENT - SJI capitalizes all costs associated with gas property acquisition, exploration and development activities under the full cost method of accounting. Capitalized costs include costs related to unproved properties, which are not amortized until proved reserves are found or it is determined that the unproved properties are impaired. All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. No impairment charges were recorded on these properties during the three and six months ended June 30, 2018 or 2017. As of June 30, 2018 and December 31, 2017, $8.6 million and $8.7 million, respectively, related to interests in unproved properties in Pennsylvania, net of amortization, is included with Nonutility Property and Equipment and Other Noncurrent Assets on SJI's condensed consolidated balance sheets. TREASURY STOCK - SJI uses the par value method of accounting for treasury stock. As of June 30, 2018 and December 31, 2017, SJI held 225,333 and 216,642 shares of treasury stock, respectively. These shares are related to deferred compensation arrangements where the amounts earned are held in the stock of SJI. INCOME TAXES - Deferred income taxes are provided for all significant temporary differences between the book and taxable bases of assets and liabilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 - “Income Taxes.” A valuation allowance is established when it is determined that it is more likely than not that a deferred tax asset will not be realized. On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Reform") was enacted into law, which changed various corporate income tax provisions within the existing Internal Revenue Code. The law became effective January 1, 2018 but was required to be accounted for in the period of enactment, as such SJI adopted the new law in the fourth quarter of 2017. SJI and SJG were impacted in several ways as a result of Tax Reform, including provisions related to the permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%, modification of bonus depreciation and changes to the deductibility of certain business-related expenses. The SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of Tax Reform. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date of Tax Reform for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of Tax Reform for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of Tax Reform is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of Tax Reform. SJI and SJG were able to make reasonable, good faith estimates of certain effects and, therefore, recorded provisional adjustments for the following: the tax rules regarding the appropriate bonus deprecation rate that should be applied to assets placed in service after September 27, 2017, including the information required to compute the applicable depreciable tax basis. Further, Tax Reform is unclear in certain respects and will require interpretations and implementing regulations by the Internal Revenue Service, as well as state tax authorities. Tax Reform could also be subject to potential amendments and technical corrections which could impact the Company’s financial statements. Any required changes to the provisional estimates would result in the recording of regulatory assets or liabilities to the extent such amounts are probable of settlement or recovery through customer rates and a net change to income tax expense for any other amounts. Final adjustments to the provisional amounts are expected to be recorded by the fourth quarter of 2018. The accounting for all other applicable provisions of Tax Reform is considered complete based on the current interpretation. GOODWILL - Goodwill represents the excess of the consideration paid over the fair value of identifiable net assets acquired. Goodwill is not amortized, but instead is subject to impairment testing on an annual basis, and between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. No such events have occurred during the three and six months ended June 30, 2018. Goodwill totaled $3.6 million on the condensed consolidated balance sheets of SJI as of both June 30, 2018 and December 31, 2017. NEW ACCOUNTING PRONOUNCEMENTS - Other than as described below, no new accounting pronouncements issued or effective during 2018 or 2017 had, or are expected to have, a material impact on the condensed consolidated financial statements of SJI, or the condensed financial statements of SJG. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC Topic 606). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and in most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. In connection with this new standard, the FASB has issued several amendments to ASU 2014-09, as follows:
The new guidance in ASU 2014-09, as well as all amendments discussed above, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. On January 1, 2018, SJI and SJG adopted ASU 2014-09 and all amendments, which meant adopting the guidance in ASC 606. SJI and SJG adopted the new guidance using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under ASC 605. See Note 16. The methods of recognizing revenue for SJI's and SJG's contracts with customers is the same under ASC 605 and ASC 606, as revenues from contracts that SJI and SJG have with customers are currently recorded as gas or electricity is delivered to the customer, which is consistent with the new guidance under ASC 606. As such, there was no significant impact to revenues for the three and six months ended June 30, 2018 for SJI or SJG as a result of applying ASC 606, and there was no cumulative catch-up to retained earnings for SJI or SJG under the modified retrospective method for changes in accounting for revenues. Further, there were no significant changes to SJI's or SJG's business processes, systems or internal controls over financial reporting needed to support recognition and disclosure under the new guidance. In March 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The new standard also will result in enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases. The accounting for leases by the lessor remains relatively the same. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Management has formed an implementation team that has completed the process of inventorying all current contracts, including those of newly acquired ETG and ELK, and has determined the population of leases that will be in scope under the new guidance. Management is currently evaluating the impact that adoption of the guidance on these identified leases will have on SJI's and SJG's financial statements, which includes monitoring industry specific developments including the exposure draft issued by the FASB that would introduce a land easement practical expedient to ASC 842. Consistent with the requirements of the standard, SJI and SJG expect to both transition to the new guidance using the modified retrospective approach, although this could be subject to change based on new guidance from the FASB. The Company does not plan to early adopt the new guidance. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The amendments in this update are effective for annual and any interim impairment tests performed in periods beginning after December 31, 2019. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU is designed to improve guidance related to the presentation of defined benefit costs in the income statement. In particular, this ASU requires an employer to report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Adoption of this guidance was applied retrospectively and did not have a material impact on the financial statements of SJI or SJG; however, current and prior period presentation on the condensed consolidated statements of income were modified for SJI and SJG to conform to this guidance, as described under “Basis of Presentation” above. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This ASU is intended to improve the financial reporting of hedging relationships so that it represents a more faithful portrayal of an entity’s risk management activities (i.e. to help financial statement users understand an entity’s risk exposures and the manner in which hedging strategies are used to manage them), as well as to further simplify the application of the hedge accounting guidance in GAAP. The standard is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income. This ASU allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from Tax Reform. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Reform and will improve the usefulness of information reported to financial statement users. The standard is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In March 2018, the FASB issued ASU 2018-04, Investments—Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 (SEC Update). This ASU incorporates recent SEC guidance which was issued in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and SEC rules and regulation. ASU No. 2018-04 was effective upon issuance. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This ASU aligns the accounting for share-based payment awards issued to employees and nonemployees. Under the new guidance, equity-classified share-based payment awards issued to nonemployees will now be measured on the grant date, instead of the previous requirement to remeasure the awards through the performance completion date. For performance conditions, compensation cost associated with the award will be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition. The current requirement to reassess the classification (equity or liability) for nonemployee awards upon vesting will be eliminated, except for awards in the form of convertible instruments. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. |
STOCK-BASED COMPENSATION PLAN |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION PLAN | STOCK-BASED COMPENSATION PLAN: On April 30, 2015, the shareholders of SJI approved the adoption of SJI's 2015 Omnibus Equity Compensation Plan (Plan), replacing the Amended and Restated 1997 Stock-Based Compensation Plan that had terminated on January 26, 2015. Under the Plan, shares may be issued to SJI’s officers (Officers), non-employee directors (Directors) and other key employees. No options were granted or outstanding during the six months ended June 30, 2018 and 2017. No stock appreciation rights have been issued under the plans. During the six months ended June 30, 2018 and 2017, SJI granted 197,844 and 167,444 restricted shares, respectively, to Officers and other key employees under the Plan. Performance-based restricted shares vest over a three-year period and are subject to SJI achieving certain market and earnings-based performance targets, which can cause the actual amount of shares that ultimately vest to range from 0% to 200% of the original shares granted. In 2015, SJI began granting time-based shares of restricted stock, one-third of which vest annually over a three-year period and which are limited to a 100% payout. Vesting of time-based grants is contingent upon SJI achieving a return on equity (ROE) of at least 7% during the initial year of the grant and meeting the service requirement. Provided that the 7% ROE requirement is met in the initial year, payout is solely contingent upon the service requirement being met in years two and three of the grant. Beginning in 2018, the vesting and payout of time-based shares of restricted stock is only contingent upon the service requirement being met in years one, two, and three of the grant. During the six months ended June 30, 2018 and 2017, Officers and other key employees were granted 64,712 and 52,971 shares of time-based restricted stock, respectively, which are included in the shares noted above. Grants containing market-based performance targets use SJI's total shareholder return (TSR) relative to a peer group to measure performance. As TSR-based grants are contingent upon market and service conditions, SJI is required to measure and recognize stock-based compensation expense based on the fair value at the date of grant on a straight-line basis over the requisite three-year period of each award. In addition, SJI identifies specific forfeitures of share-based awards, and compensation expense is adjusted accordingly over the requisite service period. Compensation expense is not adjusted based on the actual achievement of performance goals. The fair value of TSR-based restricted stock awards on the date of grant is estimated using a Monte Carlo simulation model. In 2015, earnings-based performance targets included pre-defined EGR and ROE goals to measure performance. Beginning in 2016, performance targets include pre-defined compounded earnings annual growth rate (CEGR) for SJI. As EGR-based, ROE-based and CEGR-based grants are contingent upon performance and service conditions, SJI is required to measure and recognize stock-based compensation expense based on the fair value at the date of grant over the requisite three-year period of each award. The fair value is measured as the market price at the date of grant. The initial accruals of compensation expense are based on the estimated number of shares expected to vest, assuming the requisite service is rendered and probable outcome of the performance condition is achieved. That estimate is revised if subsequent information indicates that the actual number of shares is likely to differ from previous estimates. Compensation expense is ultimately adjusted based on the actual achievement of service and performance targets. During the six months ended June 30, 2018 and 2017, SJI granted 26,416 and 30,394 restricted shares, respectively, to Directors. Shares issued to Directors vest over twelve months and contain no performance conditions. As a result, 100% of the shares granted generally vest. The following table summarizes the nonvested restricted stock awards outstanding for SJI at June 30, 2018 and the assumptions used to estimate the fair value of the awards:
Expected volatility is based on the actual volatility of SJI’s share price over the preceding three-year period as of the valuation date. The risk-free interest rate is based on the zero-coupon U.S. Treasury Bond, with a term equal to the three-year term of the Officers’ and other key employees’ restricted shares. As notional dividend equivalents are credited to the holders during the three-year service period, no reduction to the fair value of the award is required. As the Directors’ restricted stock awards contain no performance conditions and dividends are paid or credited to the holder during the requisite service period, the fair value of these awards are equal to the market value of the shares on the date of grant. The following table summarizes the total stock-based compensation cost to SJI for the three and six months ended June 30, 2018 and 2017 (in thousands):
As of June 30, 2018, there was $8.1 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under the plans. That cost is expected to be recognized over a weighted average period of 2.0 years. The following table summarizes information regarding restricted stock award activity for SJI during the six months ended June 30, 2018, excluding accrued dividend equivalents:
During the six months ended June 30, 2018 and 2017, SJI awarded 66,894 shares to its Officers and other key employees at a market value of $2.0 million, and 65,628 shares at a market value of $2.2 million, respectively. During the six months ended June 30, 2018 and 2017, SJI also granted 26,416 and 30,394 shares to its Directors at a market value of $0.8 million and $1.0 million, respectively. SJI has a policy of issuing new shares to satisfy its obligations under the Plan; therefore, there are no cash payment requirements resulting from the normal operation of the Plan. However, a change in control could result in such shares becoming nonforfeitable or immediately payable in cash. At the discretion of the Officers, Directors and other key employees, the receipt of vested shares can be deferred until future periods. These deferred shares are included in Treasury Stock on the condensed consolidated balance sheets. South Jersey Gas Company - Officers and other key employees of SJG participate in the stock-based compensation plans of SJI. During the six months ended June 30, 2018 and 2017, SJG officers and other key employees were granted 32,185 and 24,001 shares of SJI restricted stock, respectively. The cost of outstanding stock awards for SJG during each of the six months ended June 30, 2018 and 2017 was $0.3 million. Approximately 64% of these costs were capitalized on SJG's condensed balance sheets to Utility Plant. |
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS | AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED-PARTY TRANSACTIONS: AFFILIATIONS — The following affiliated entities are accounted for under the equity method: PennEast Pipeline Company, LLC (PennEast) - Midstream has a 20% investment in PennEast, which is planning to construct an approximately 118-mile natural gas pipeline that will extend from Northeastern Pennsylvania into New Jersey. Energenic – US, LLC (Energenic) - Marina and a joint venture partner formed Energenic, in which Marina has a 50% equity interest. Energenic developed and operated on-site, self-contained, energy-related projects. Millennium Account Services, LLC (Millennium) - SJI and a joint venture partner formed Millennium, in which SJI has a 50% equity interest. Millennium reads utility customers’ meters on a monthly basis for a fee. Potato Creek, LLC (Potato Creek) - SJI and a joint venture partner formed Potato Creek, in which SJI has a 30% equity interest. Potato Creek owns and manages the oil, gas and mineral rights of certain real estate in Pennsylvania. EnergyMark, LLC (EnergyMark) - SJE has a 33% investment in EnergyMark, an entity that acquires and markets natural gas to retail end users. SJRG had net sales to EnergyMark of $8.0 million and $7.3 million for the three months ended June 30, 2018 and 2017, respectively, and $21.2 million and $20.6 million for the six months ended June 30, 2018 and 2017, respectively. EnerConnex, LLC (EnerConnex) - In the second quarter of 2018, SJI entered into an agreement to obtain a 25% investment in EnerConnex, which is a retail and wholesale broker and consultant that matches end users with suppliers for the procurement of natural gas and electricity. The investment made by SJI in EnerConnex was not material. During the first six months of 2018 and 2017, SJI made net investments in unconsolidated affiliates of $6.4 million and $19.2 million, respectively. As of June 30, 2018 and December 31, 2017, the outstanding balance of Notes Receivable – Affiliate was $16.2 million and $18.2 million, respectively. As of June 30, 2018, $13.7 million of these notes were secured by property, plant and equipment of the affiliates, accrue interest at 7.5% and are to be repaid through 2025. The remaining $2.5 million of these notes are unsecured and accrue interest at variable rates. SJI holds significant variable interests in these entities but is not the primary beneficiary. Consequently, these entities are accounted for under the equity method because SJI does not have both (a) the power to direct the activities of the entity that most significantly impact the entity’s economic performance and (b) the obligation to absorb losses of the entity that could potentially be significant to the entity or the right to receive benefits from the entity that could potentially be significant to the entity. As of June 30, 2018, SJI had a net asset of approximately $72.4 million included in Investment in Affiliates on the condensed consolidated balance sheets related to equity method investees, in addition to Notes Receivable – Affiliate as discussed above. SJI’s maximum exposure to loss from these entities as of June 30, 2018, is limited to its combined equity contributions and the Notes Receivable-Affiliate in the aggregate amount of $88.6 million. DISCONTINUED OPERATIONS - Discontinued Operations consist of the environmental remediation activities related to the properties of South Jersey Fuel, Inc. (SJF) and the product liability litigation and environmental remediation activities related to the prior business of The Morie Company, Inc. (Morie). SJF is a subsidiary of Energy & Minerals, Inc. (EMI), an SJI subsidiary, which previously operated a fuel oil business. Morie is the former sand mining and processing subsidiary of EMI. EMI sold the common stock of Morie in 1996. SJI conducts tests annually to estimate the environmental remediation costs for these properties (see Note 11). Summarized operating results of the discontinued operations for the three and six months ended June 30, 2018 and 2017, were (in thousands, except per share amounts):
SJG RELATED-PARTY TRANSACTIONS - There have been no significant changes in the nature of SJG’s related-party transactions since December 31, 2017. See Note 3 to the Financial Statements in Item 8 of SJI's and SJG’s Form 10-K for the year ended December 31, 2017 for a detailed description of the related parties and their associated transactions. A summary of related-party transactions involving SJG, excluding pass-through items, included in SJG's Operating Revenues were as follows (in thousands):
Related-party transactions involving SJG, excluding pass-through items, included in SJG's Cost of Sales and Operating Expenses were as follows (in thousands):
*As discussed in Note 1 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017, revenues and expenses related to the energy trading activities of the wholesale energy operations at SJRG are presented on a net basis in Operating Revenues – Nonutility on the condensed consolidated income statement. |
COMMON STOCK |
6 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||
COMMON STOCK | COMMON STOCK: The following shares were issued and outstanding for SJI:
The par value ($1.25 per share) of stock issued was recorded in Common Stock and the net excess over par value of approximately $132.7 million was recorded in Premium on Common Stock. There were 2,339,139 shares of SJG's common stock (par value $2.50 per share) outstanding as of June 30, 2018. SJG did not issue any new shares during the period. SJIU owns all of the outstanding common stock of SJG. PUBLIC OFFERINGS - In April 2018, the Company completed the following public offerings, the net proceeds of which were used to fund a portion of the consideration paid for the assets of ETG and ELK (see Note 1):
SJI's EARNINGS PER COMMON SHARE (EPS) - SJI's Basic EPS is based on the weighted-average number of common shares outstanding. The incremental shares required for inclusion in the denominator for the diluted EPS calculation were 452,210 and 136,332 for the six months ended June 30, 2018 and 2017, respectively. For the three months ended June 30, 2018 and 2017, incremental shares of 806,695 and 150,852, respectively, were not included in the denominator for the diluted EPS calculation because they would have an antidilutive effect on EPS. These additional shares relate to SJI's restricted stock as discussed in Note 2, along with the impact of the Forward Shares and Equity Units discussed above, accounted for under the treasury stock method. DIVIDEND REINVESTMENT PLAN (DRP) — SJI offers a DRP which allows participating shareholders to purchase shares of SJI common stock by automatic reinvestment of dividends or optional purchases. SJI currently purchases shares on the open market to fund share purchases by DRP participants, and as a result SJI did not raise any equity capital through the DRP in 2017 or 2018. SJI does not intend to issue equity capital via the DRP in 2018. |
FINANCIAL INSTRUMENTS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments, Owned, at Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS: RESTRICTED CASH — In order to pay for the Acquisition (see Note 1), SJI maintained $1.74 billion in an escrow account as of June 30, 2018 in anticipation of the July 1, 2018 closing date (see Note 17). This amount was recorded in Restricted Cash on the condensed consolidated balance sheets of SJI as of June 30, 2018. RESTRICTED INVESTMENTS — SJI and SJG maintain margin accounts with selected counterparties to support their risk management activities. The balances required to be held in these margin accounts increase as the net value of the outstanding energy-related contracts with the respective counterparties decrease. As of June 30, 2018 and December 31, 2017, SJI's balances (including SJG) in these accounts totaled $10.6 million and $31.6 million, respectively, held by the counterparty, which is recorded in Restricted Investments on the condensed consolidated balance sheets. As of June 30, 2018 and December 31, 2017, SJG's balance held by the counterparty totaled $0.5 million and $2.9 million and was recorded in Restricted Investments on the condensed balance sheets. The carrying amounts of the Restricted Investments for both SJI and SJG approximate their fair values at June 30, 2018 and December 31, 2017, which would be included in Level 1 of the fair value hierarchy (see Note 13). The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):
NOTES RECEIVABLE-AFFILIATES - As of June 30, 2018, SJI had approximately $13.7 million included in Notes Receivable - Affiliate on the condensed consolidated balance sheets, due from Energenic, which is secured by its cogeneration assets for energy service projects. This note is subject to a reimbursement agreement that secures reimbursement for SJI, from its joint venture partner, of a proportionate share of any amounts that are not repaid. LONG-TERM RECEIVABLES - SJG provides financing to customers for the purpose of attracting conversions to natural gas heating systems from competing fuel sources. The terms of these loans call for customers to make monthly payments over periods ranging from five to ten years, with no interest. The carrying amounts of such loans were $5.9 million and $7.0 million as of June 30, 2018 and December 31, 2017, respectively. The current portion of these receivables is reflected in Accounts Receivable and the non-current portion is reflected in Contract Receivables on the condensed consolidated balance sheets. The carrying amounts noted above are net of unamortized discounts resulting from imputed interest in the amount of $0.7 million as of both June 30, 2018 and December 31, 2017. The annualized amortization to interest is not material to SJI’s or SJG's condensed consolidated financial statements. The carrying amounts of these receivables approximate their fair value at June 30, 2018 and December 31, 2017, which would be included in Level 2 of the fair value hierarchy (see Note 13). CREDIT RISK - As of June 30, 2018, SJI had approximately $10.0 million, or 29.1%, of the current and noncurrent Derivatives – Energy Related Assets transacted with three counterparties. One counterparty has contracts with a large number of diverse customers which minimizes the concentration of this risk. A portion of these contracts may be assigned to SJI in the event of default by the counterparty. The other two counterparties are investment grade rated. FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VALUE - The fair value of a financial instrument is the market price to sell an asset or transfer a liability at the measurement date. The carrying amounts of SJI's and SJG's financial instruments approximate their fair values at June 30, 2018 and December 31, 2017, except as noted below.
OTHER FINANCIAL INSTRUMENTS - The carrying amounts of SJI's and SJG's other financial instruments approximate their fair values at June 30, 2018 and December 31, 2017. |
SEGMENTS OF BUSINESS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENTS OF BUSINESS | SEGMENTS OF BUSINESS: SJI operates in several different reportable operating segments which reflect the financial information regularly evaluated by the chief operating decision maker (CODM). These segments are as follows:
SJI groups its nonutility operations into two categories: Energy Group and Energy Services. Energy Group includes wholesale energy, retail gas and other, and retail electric operations. Energy Services includes on-site energy production and appliance service operations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are treated as if the sales or transfers were to third parties at current market prices. Information about SJI’s operations in different reportable operating segments is presented below (in thousands):
|
RATES AND REGULATORY ACTIONS |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Public Utilities, General Disclosures [Abstract] | |
RATES AND REGULATORY ACTIONS | RATES AND REGULATORY ACTIONS: SJG is subject to the rules and regulations of the New Jersey Board of Public Utilities (BPU). In March 2018, SJG filed a petition with the BPU for a change in rates, customer refund and rider associated with the implementation of Tax Reform. The BPU subsequently approved an interim rate reduction, effective April 1, 2018, to reflect the change in the corporate tax rate within SJG’s base rates. This petition is currently pending BPU approval Also in March 2018, SJG filed a petition with the BPU seeking to continue its existing Energy Efficiency Programs (EEP's), with modifications, and to implement new programs (the “EEP IV”) for a five-year period with a proposed budget of approximately $195.4 million and with the same rate recovery mechanism that exists for its current EEP's. Under its existing EEP's, SJG is permitted to recover incremental operating and maintenance expenses and earn a return of, and return on, program investments. The matter is currently pending BPU approval. In April 2018, SJG submitted its second annual filing, pursuant to the October 2016 BPU approval of the Accelerated Infrastructure Replacement Program (“AIRP II”), seeking a base rate adjustment to increase annual revenues by approximately $6.6 million to reflect the roll-in of $60.7 million of AIRP II investments placed in service from July 1, 2017 through June 30, 2018. The matter is currently pending BPU approval. In May 2018, The BPU issued an order approving a second phase of the Storm Hardening and Reliability Program (“SHARP II”) for a three-year period, commencing June 1, 2018, with authorized investments of up to $100.3 million to continue storm hardening efforts to further improve safety, redundancy and resiliency of SJG’s natural gas system in coastal areas. Pursuant to the order, SHARP II investments are to be recovered through annual base rate adjustments. Also in May 2018, SJG received BPU final approval of provisional rates that were authorized in a BPU order during September 2017, as they relate to SJG's 2017-2018 Basic Gas Supply Service (“BGSS”) and Conservation Incentive Program (“CIP”) filing, as submitted to the BPU in June 2017. The impact of the final rates was a $4.7 million decrease in revenue related to SJG’s BGSS and a $0.2 million increase in revenue related to SJG's CIP. The net impact of the rate changes requested in the filing is a $4.5 million revenue decrease. In June 2018, SJG filed its annual BGSS and CIP filing with the BPU, requesting a $65.5 million increase in gas cost recoveries related to its BGSS and a $26.4 million decrease in revenues related to its CIP, resulting in a net revenue increase of $39.1 million. The matter is currently pending BPU approval. Also in June 2018, SJG filed its ninth annual Energy Efficiency Tracker (“EET”) rate adjustment petition, requesting a $1.6 million decrease in revenues to continue recovering the costs of, and the allowed return on, prior investments associated with its EEPs. The matter is currently pending BPU approval. Additionally, in June 2018, SJG filed its annual Universal Service Fund (“USF”) petition, along with the State’s other electric and gas utilities, seeking an increase in revenues of approximately $0.9 million. The matter is currently pending BPU approval. As of June 30, 2018, SJI received all necessary approvals by the BPU, Maryland Public Service Commission (PSC), Federal Energy Regulatory Commission (FERC) and Federal Communications Commission (FCC), as well as certain anti-trust filings and approvals, in order to complete the Acquisition. The Acquisition was completed on July 1, 2018 (see Note 17). There have been no other significant regulatory actions or changes to SJG's rate structure since December 31, 2017. See Note 10 to the Consolidated Financial Statements in Item 8 of SJI's and SJG's Annual Report on Form 10-K for the year ended December 31, 2017. |
REGULATORY ASSETS AND REGULATORY LIABILITIES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REGULATORY ASSETS AND REGULATORY LIABILITIES | REGULATORY ASSETS AND REGULATORY LIABILITIES: There have been no significant changes to the nature of SJG’s regulatory assets and liabilities since December 31, 2017, which are described in Note 11 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017. As of June 30, 2018 and December 31, 2017, SJI had no regulatory assets or regulatory liabilities other than those of SJG; SJI will have regulatory assets and liabilities related to ETG and ELK beginning July 1, 2018 (see Note 17). SJI's and SJG's Regulatory Assets consisted of the following items (in thousands):
ENVIRONMENTAL REMEDIATION COSTS - SJG has two regulatory assets associated with environmental costs related to the cleanup of 12 sites where SJG or its predecessors previously operated gas manufacturing plants. The first asset, "Environmental Remediation Cost: Expended - Net," represents what was actually spent to clean up the sites, less recoveries through the Remediation Adjustment Clause (RAC) and insurance carriers. These costs meet the deferral requirements of GAAP, as the BPU allows SJG to recover such expenditures through the RAC. The other asset, "Environmental Remediation Cost: Liability for Future Expenditures," relates to estimated future expenditures required to complete the remediation of these sites. SJG recorded this estimated amount as a regulatory asset with the corresponding current and noncurrent liabilities on the condensed consolidated balance sheets under the captions "Current Liabilities" (both SJI and SJG), "Deferred Credits and Other Noncurrent Liabilities" (SJI) and "Regulatory and Other Noncurrent Liabilities" (SJG). The BPU allows SJG to recover the deferred costs over seven-year periods after they are spent. DEFERRED ASSET RETIREMENT OBLIGATION COSTS - SJG records asset retirement obligations primarily related to the legal obligation to cut and cap gas distribution pipelines when taking those pipelines out of service. Deferred asset retirement obligation costs represent the period to period passage of time (accretion) and the revision to cash flows originally estimated to settle the retirement obligation. The Deferred Asset Retirement Obligation Costs regulatory asset decreased $12.5 million from December 31, 2017 to June 30, 2018, due to revisions to the settlement timing, retirement costs, and changes to inflation and discount rates used to measure the expected retirement costs. A corresponding decrease was made to the Asset Retirement Obligation liability, thus having no impact on earnings. DEFERRED GAS COSTS - NET - Over/Under collections of gas costs are monitored through SJG's BGSS bill credit. Net undercollected gas costs are classified as a regulatory asset, and net overcollected gas costs are classified as a regulatory liability. Derivative contracts used to hedge natural gas purchases are also included in the BGSS, subject to BPU approval. The BGSS regulatory asset increased $43.2 million from December 31, 2017 to June 30, 2018, primarily due to the actual gas commodity costs exceeding recoveries from customers. CONSERVATION INCENTIVE PROGRAM (CIP) RECEIVABLE – The CIP tracking mechanism adjusts earnings when actual usage per customer experienced during the period varies from an established baseline usage per customer. Actual usage per customer was more than the established baseline during the first six months of 2018, resulting in a decrease in the receivable. This is primarily the result of cold weather experienced in the region. SJI's and SJG's Regulatory Liabilities consisted of the following items (in thousands):
EXCESS DEFERRED TAXES - As disclosed in Note 11 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017, the Excess Deferred Tax balance relates to Tax Reform enacted into law December 22, 2017 (see Note 1). The increase in this regulatory liability of $13.2 million during the first six months of 2018 is related to excess tax amounts that were billed to customers in the first quarter of 2018, which, pending approval by the BPU of the refund methodology, are expected to be returned to customers in September 2018. |
PENSION AND OTHER POSTRETIREMENT BENEFITS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | PENSION AND OTHER POSTRETIREMENT BENEFITS: For the three and six months ended June 30, 2018 and 2017, net periodic benefit cost related to the employee and officer pension and other postretirement benefit plans for SJI consisted of the following components (in thousands):
The Pension Benefits Net Periodic Benefit Cost incurred by SJG was approximately $1.9 million and $2.3 million of the totals presented in the table above for the three months ended June 30, 2018 and 2017, respectively, and $4.3 million and $4.8 million of the totals presented in the table above for the six months ended June 30, 2018 and 2017, respectively. For the three months ended June 30, 2018, and 2017, the Other Postretirement Benefits Net Periodic Benefit Cost incurred by SJG was less than $0.1 million and approximately $0.1 million, respectively, of the totals presented in the table above. For the six months ended June 30, 2018 and 2017, the Other Postretirement Benefits Net Periodic Benefit Cost incurred by SJG was less than $0.1 million and $0.2 million, respectively, of the totals presented in the table above. Capitalized benefit costs reflected in the table above relate to SJG’s construction program. Effective January 1, 2018, SJI and SJG adopted FASB ASU 2017-07 which stipulates that only the service cost component of net benefit cost is eligible for capitalization. In SJG's rate case settlement in October 2017, The BPU allowed the deferral until the next base rate case of incremental expense associated with the adoption. SJI contributed $10.0 million to the pension plans, of which SJG contributed $8.0 million, in January 2017. No contributions were made to the pension plans by either SJI or SJG during the six months ended June 30, 2018. SJI and SJG do not expect to make any additional contributions to the pension plans in 2018; however, changes in future investment performance and discount rates may ultimately result in a contribution. Payments related to the unfunded supplemental executive retirement plan (SERP) are expected to be approximately $2.4 million in 2018. See Note 12 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017 for additional information related to SJI’s and SJG's pension and other postretirement benefits. |
LINES OF CREDIT |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LINES OF CREDIT | LINES OF CREDIT: Credit facilities and available liquidity as of June 30, 2018 were as follows (in thousands):
(A) Includes letters of credit outstanding in the amount of $6.1 million. (B) Includes letters of credit outstanding in the amount of $0.8 million. (C) SJG expects to renew this facility prior to expiration. On June 26, 2018, the Acquisition company used to acquire the assets of ETG and ELK entered into a $200.0 million, two-year revolving credit agreement with several lenders. This facility is available to be used by ETG and ELK (the Borrowers) post-acquisition to provide daily liquidity. Neither SJI nor SJG may borrow underneath this facility; as a result, this amount is not included in the table above as of June 30, 2018. At the election of the Borrowers, the revolving loans will bear interest at a variable base rate or a variable London Interbank Offered Rate (“LIBOR”). The revolving credit agreement provides for the extension of credit to the Borrowers by the lenders thereunder in a total aggregate amount of $200.0 million. This facility contains one financial covenant, limiting the ratio of indebtedness to total capitalization (as defined in the credit agreement) to not more than 0.70 to 1, measured at the end of each fiscal quarter. There were no borrowings under this facility as of June 30, 2018. The SJG facilities are restricted as to use and availability specifically to SJG; however, if necessary, the SJI facilities can also be used to support SJG’s liquidity needs. Borrowings under these credit facilities are at market rates. SJI's weighted average interest rate on these borrowings (which includes SJG), which changes daily, was 2.90% and 2.21% at June 30, 2018 and 2017, respectively. SJG did not have any outstanding borrowings at June 30, 2018 under its credit facility; however, SJG did have $77.2 million outstanding under the commercial paper program. SJG's weighted average interest rate on these borrowings, which changes daily, was 2.33% and 1.36% at June 30, 2018 and 2017, respectively. SJI's average borrowings outstanding under these credit facilities (which includes SJG), not including letters of credit, during the six months ended June 30, 2018 and 2017 were $201.6 million and $272.4 million, respectively. SJG's average borrowings outstanding under its credit facilities during the six months ended June 30, 2018 and 2017 were $49.3 million and $20.2 million, respectively. The SJI and SJG principal credit facilities are provided by a syndicate of banks. In January 2018, the Note Purchase Agreements (NPA) for Senior Unsecured Notes issued by SJI, as well as the credit agreements with its syndicate of banks, were amended to reflect a financial covenant limiting the ratio of indebtedness to total capitalization (as defined in the respective NPA or credit agreement) to not more than 0.70 to 1, measured at the end of each fiscal quarter. For SJI, the equity units are treated as equity (as opposed to how they are classified on the condensed consolidated balance sheet, as long term debt) for purposes of the covenant calculation. Further, in the event that SJI receives less than $500.0 million of net cash proceeds from the issuance of equity or equity-linked securities, that financial covenant limiting the ratio of indebtedness to total capitalization (as defined in the respective NPA or credit agreement) increases to not more than 0.75 to 1, measured at the end of each fiscal quarter, for a period of one year following the closing of the acquisition of ETG and ELK. SJI and SJG were in compliance with this covenant as of June 30, 2018. However, one SJG bank facility still contains a financial covenant limiting the ratio of indebtedness to total capitalization (as defined in the respective credit agreement) to not more than 0.65 to 1 measured at the end of each fiscal quarter. As a result, SJG must ensure that the ratio of indebtedness to total capitalization (as defined in the respective credit agreement) does not exceed 0.65 to 1, as measured at the end of each fiscal quarter. SJG is was in compliance with this covenant as of June 30, 2018. SJG has a commercial paper program under which SJG may issue short-term, unsecured promissory notes to qualified investors up to a maximum aggregate amount outstanding at any time of $200.0 million. The notes have fixed maturities which vary by note, but may not exceed 270 days from the date of issue. Proceeds from the notes are used for general corporate purposes. SJG uses the commercial paper program in tandem with its $200.0 million revolving credit facility and does not expect the principal amount of borrowings outstanding under the commercial paper program and the credit facility at any time to exceed an aggregate of $200.0 million. In the fourth quarter of 2017, SJI entered into a $2.6 billion syndicated, committed Bridge Facility to support its $1.7 billion bid for the assets of ETG and ELK. As a result of the equity and debt issuances entered into by the Company to fund the Acquisition (see Note 14), the Bridge Facility was terminated as of June 30, 2018. |
COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES: GUARANTEES — As of June 30, 2018, SJI had issued $6.1 million of parental guarantees on behalf of an unconsolidated subsidiary. These guarantees generally expire within the next two years and were issued to enable the subsidiary to market retail natural gas. GAS SUPPLY CONTRACTS - In the normal course of business, SJG and SJRG have entered into long-term contracts for natural gas supplies, firm transportation and gas storage service. The transportation and storage service agreements with interstate pipeline suppliers were made under Federal Energy Regulatory Commission (FERC) approved tariffs. SJG's cumulative obligation for gas supply-related demand charges and reservation fees paid to suppliers for these services averages approximately $5.7 million per month and is recovered on a current basis through the BGSS. SJRG's cumulative obligation for demand charges and reservation fees paid to suppliers for these services is approximately $0.5 million per month. SJRG has also committed to purchase a minimum of 752,500 dts/d and up to 892,500 dts/d of natural gas, from various suppliers, for terms ranging from 3 to 10 years at index-based prices. COLLECTIVE BARGAINING AGREEMENTS — Unionized personnel represent approximately 41% and 58% of SJI's and SJG's workforce at June 30, 2018, respectively. SJI has collective bargaining agreements with two unions that represent these employees: the International Brotherhood of Electrical Workers (IBEW) Local 1293 and the International Association of Machinists and Aerospace Workers (IAM) Local 76. SJG employees represented by the IBEW operate under a collective bargaining agreement that runs through February 2022. SJG's remaining unionized employees are represented by the IAM and operate under a collective bargaining agreement that runs through August 2021. STANDBY LETTERS OF CREDIT — As of June 30, 2018, SJI provided $6.1 million of standby letters of credit through its revolving credit facility to enable SJE to market retail electricity and for various construction and operating activities. SJG provided a $0.8 million letter of credit under its revolving credit facility to support the remediation of environmental conditions at certain locations in SJG's service territory. SJG has provided $25.1 million of additional letters of credit under a separate facility outside of the revolving credit facility to support variable-rate demand bonds issued through the New Jersey Economic Development Authority (NJEDA) to finance the expansion of SJG’s natural gas distribution system. EQUITY AND CORPORATE UNITS - As part of the issuance of Equity and Corporate Units, the Company has a purchase contract obligating the holder of the units to purchase from the Company, and for the Company to sell to the holder for a price in cash of $50, a certain number of shares of common stock. See Note 4. PENDING LITIGATION — SJI and SJG are subject to claims arising in the ordinary course of business and other legal proceedings. SJI has been named in, among other actions, certain gas supply contract disputes and certain product liability claims related to our former sand mining subsidiary. SJI is currently involved in a pricing dispute related to two long-term gas supply contracts. On May 8, 2017, a jury from the United States District Court for the District of Colorado returned a verdict in favor of the plaintiff supplier. On July 21, 2017, the Court entered Final Judgment against SJG and SJRG. As a result of this ruling, SJG and SJRG have accrued, including interest, $20.6 million and $54.9 million, respectively, from the first quarter of 2017 through June 30, 2018. We believe that the amount to be paid by SJG reflects a gas cost that ultimately will be recovered from SJG’s customers through adjusted rates. As such, $20.6 million was recorded as both an Accounts Payable and a reduction of Regulatory Liabilities on the condensed consolidated balance sheets of both SJI and SJG as of June 30, 2018. Similarly, $54.9 million was associated with SJRG and was also recorded as an Accounts Payable on the condensed consolidated balance sheets of SJI as of June 30, 2018, with charges of $0.9 million and $1.0 million to Cost of Sales - Nonutility on the condensed consolidated statements of income of SJI for the three and six months ended June 30, 2018, respectively. SJI also recorded $0.2 million and $0.4 million to Interest Charges on the condensed consolidated statements of income for the three and six months ended June 30, 2018, respectively. In April 2018, SJI filed an appeal of this judgment. During the pendency of the appeal, SJI continues to dispute the supplier invoices received and has created a reserve to reflect the differences between the invoices and paid amounts. The plaintiff supplier filed a second related lawsuit against SJG and SJRG in the United States District Court for the District of Colorado on December 21, 2017, alleging that SJG and SJRG have continued to breach the gas supply contracts notwithstanding the judgment in the prior lawsuit. The plaintiff supplier is seeking recovery of the amounts disputed by SJI since the earlier judgment, and a declaration regarding the price under the disputed contracts going forward until the contracts terminate in October 2019. The matter is currently scheduled for a jury trial in May 2019. All legal reserves related to this second lawsuit are recorded as part of the accrued amounts disclosed above. Liabilities related to claims are accrued when the amount or range of amounts of probable settlement costs or other charges for these claims can be reasonably estimated. For matters other than the pricing dispute noted above, SJI has accrued approximately $3.1 million and $3.0 million related to all claims in the aggregate as of June 30, 2018 and December 31, 2017, respectively, of which SJG has accrued approximately $0.8 million and $0.7 million as of June 30, 2018 and December 31, 2017, respectively. Although SJI and SJG do not presently believe that these matters will have a material adverse effect on its business, given the inherent uncertainties in such situations, SJI and SJG can provide no assurance regarding the outcome of litigation. ENVIRONMENTAL REMEDIATION COSTS — SJG incurred and recorded costs for environmental cleanup of 12 sites where SJG or its predecessors operated gas manufacturing plants. SJG stopped manufacturing gas in the 1950s. SJI and some of its nonutility subsidiaries also recorded costs for environmental cleanup of sites where SJF previously operated a fuel oil business and Morie maintained equipment, fueling stations and storage. Other than the changes discussed in Note 8 to the condensed consolidated financial statements, there have been no changes to the status of SJI’s environmental remediation efforts since December 31, 2017, as described in Note 15 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017. |
DERIVATIVE INSTRUMENTS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS: Certain SJI subsidiaries, including SJG, are involved in buying, selling, transporting and storing natural gas and buying and selling retail electricity for their own accounts as well as managing these activities for third parties. These subsidiaries are subject to market risk on expected future purchases and sales due to commodity price fluctuations. SJI and SJG use a variety of derivative instruments to limit this exposure to market risk in accordance with strict corporate guidelines. These derivative instruments include forward contracts, swap agreements, options contracts and futures contracts. As of June 30, 2018, SJI and SJG had outstanding derivative contracts as follows (1 MMdts = one million decatherms; 1 MMmWh = one million megawatt hours):
These contracts, which have not been designated as hedging instruments under GAAP, are measured at fair value and recorded in Derivatives - Energy Related Assets or Derivatives - Energy Related Liabilities on the condensed consolidated balance sheets of SJI and SJG. For SJE and SJRG contracts, the net unrealized pre-tax gains (losses) for these energy-related commodity contracts are included with realized gains (losses) in Operating Revenues – Nonutility on the condensed consolidated statements of income for SJI. These pre-tax gains (losses) were $(6.2) million and $(7.9) million for the three months ended June 30, 2018 and 2017, respectively, and $17.2 million and $6.8 million for the six months ended June 30, 2018 and 2017, respectively. For SJG's contracts, the costs or benefits are recoverable through the BGSS clause, subject to BPU approval. As a result, the net unrealized pre-tax gains and losses for these energy-related commodity contracts are included with realized gains and losses in Regulatory Assets or Regulatory Liabilities on the condensed consolidated balance sheets of both SJI and SJG. As of June 30, 2018 and December 31, 2017, SJG had $5.7 million and $(2.1) million of unrealized gains (losses), respectively, included in its BGSS related to energy-related commodity contracts. SJI, including SJG, has also entered into interest rate derivatives to hedge exposure to increasing interest rates and the impact of those rates on cash flows of variable-rate debt. These interest rate derivatives, some of which had been designated as hedging instruments under GAAP, are measured at fair value and recorded in Derivatives - Other on the condensed consolidated balance sheets. Hedge accounting has been discontinued prospectively for these derivatives. As a result, any unrealized gains and losses on these derivatives, that were previously included in Accumulated Other Comprehensive Loss (AOCL) on the condensed consolidated balance sheets, are being recorded in earnings over the remaining life of the derivative. In March 2017, SJI entered into a new interest rate derivative and amended the existing interest rate derivative linked to unrealized losses previously recorded in AOCL. SJI reclassified $2.4 million of pre-tax unrealized loss in AOCL to Interest Charges on the condensed consolidated statements of income as a result of the prior hedged transactions being deemed probable of not occurring. For SJG interest rate derivatives, the fair value represents the amount SJG would have to pay the counterparty to terminate these contracts as of those dates. As of June 30, 2018, SJI’s active interest rate swaps were as follows:
The unrealized gains and losses on interest rate derivatives that are not designated as cash flow hedges are included in Interest Charges in the condensed consolidated statements of income. However, for selected interest rate derivatives at SJG, management believes that, subject to BPU approval, the market value upon termination can be recovered in rates and, therefore, these unrealized losses have been included in Other Regulatory Assets in the condensed consolidated balance sheets. The fair values of all derivative instruments, as reflected in the condensed consolidated balance sheets as of June 30, 2018 and December 31, 2017, are as follows (in thousands):
SJI and SJG enter into derivative contracts with counterparties, some of which are subject to master netting arrangements, which allow net settlements under certain conditions. These derivatives are presented at gross fair values on the condensed consolidated balance sheets. As of June 30, 2018 and December 31, 2017, information related to these offsetting arrangements were as follows (in thousands):
(A) The balances at June 30, 2018 and December 31, 2017 were related to derivative liabilities which can be net settled against derivative assets. (B) The balances at June 30, 2018 and December 31, 2017 were related to derivative assets which can be net settled against derivative liabilities. The effect of derivative instruments on the condensed consolidated statements of income for the three and six months ended June 30, 2018 and 2017 are as follows (in thousands):
(a) Included in Interest Charges
(a) Included in Operating Revenues - Nonutility (b) Included in Interest Charges Certain of SJI’s derivative instruments contain provisions that require immediate payment or demand immediate and ongoing collateralization on derivative instruments in net liability positions in the event of a material adverse change in the credit standing of SJI. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position on June 30, 2018, is $0.5 million. If the credit-risk-related contingent features underlying these agreements were triggered on June 30, 2018, SJI would have been required to settle the instruments immediately or post collateral to its counterparties of approximately $0.2 million after offsetting asset positions with the same counterparties under master netting arrangements. |
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES | FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES: GAAP establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques. The levels of the hierarchy are described below:
Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. For financial assets and financial liabilities measured at fair value on a recurring basis, information about the fair value measurements for each major category is as follows (in thousands):
(A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. (B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable. Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forward contracts, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary. Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration. (C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment. The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands): SJI (includes SJG and all other consolidated subsidiaries):
SJG:
(A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas. (B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak. The changes in fair value measurements of Derivatives – Energy Related Assets and Liabilities for the three and six months ended June 30, 2018 and 2017, using significant unobservable inputs (Level 3), are as follows (in thousands):
Total gains included in earnings for SJI for the three and six months ended June 30, 2018 that are attributable to the change in unrealized gains relating to those assets and liabilities included in Level 3 still held as of June 30, 2018, are $6.2 million and $10.2 million, respectively. These gains are included in Operating Revenues-Nonutility on the condensed consolidated statements of income. |
LONG-TERM DEBT |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Long-term Debt, Unclassified [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT: In January 2018, SJI issued the following Medium Term Notes (MTN's): (a) $25.0 million aggregate principal amount of 3.32% Senior Notes, Series 2017A-2, due January 2025 and (b) $25.0 million aggregate principal amount of 3.56% Senior Notes, Series 2017B-2, due January 2028. In April 2018, SJI entered into a Note Purchase Agreement (NPA) that provides for the issuance by the Company of an aggregate of $250.0 million of senior unsecured notes. During the second quarter of 2018, the Company issued these senior unsecured notes as follows: (a) $90.0 million aggregate principal amount of 3.18% Senior Notes, Series 2018A, due April 2021; (b) $80.0 million aggregate principal amount of 3.82% Senior Notes, Series 2018B, due 2028; and (c) $80.0 million aggregate principal amount of 3.92% Senior Notes, Series 2018C, due 2030. In April 2018, SJI completed a public offering of Equity Units for gross proceeds of $287.5 million (see Note 4). As of June 30, 2018, these Equity Units were not converted into equity; as such, the net proceeds, after amortization of the underwriting discounts, of $279.0 million are recorded as Long-Term Debt on the condensed consolidated balance sheets. On June 20, 2018, SJI issued an aggregate of $475.0 million of Floating Rate Senior Notes, Series 2018D, due 2019 on the one-year anniversary of the date of initial issuance. These notes will be repaid using the proceeds of the various contemplated asset sales or refinanced. On June 26, 2018, the Acquisition company used to acquire the assets of ETG entered into a $530.0 million, 364-day term loan credit agreement with several lenders. SJI guaranteed this facility until the closing of the Acquisition. On June 28, 2018, the lenders funded the term loan facility. At the election of the Company, the term loans will bear interest at a variable base rate or a variable LIBOR. ETG intends to arrange a refinancing of this term facility during the third quarter of 2018 upon the attainment of a rating by either S&P or Moody's. The April 2018 and June 2018 debt issuances were used to fund the Acquisition, which closed July 1, 2018 (see Notes 1 and 17). SJI and SJG did not issue or retire any other long-term debt during the six months ended June 30, 2018. |
ACCUMULATED OTHER COMPREHENSIVE LOSS |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS: The following table summarizes the changes in SJI's accumulated other comprehensive loss (AOCL) for the three and six months ended June 30, 2018 (in thousands):
(a) Determined using a combined average statutory tax rate of 25%. (b) See table below. The following table provides details about reclassifications out of SJI's AOCL for the three and six months ended June 30, 2018 (in thousands):
(a) Determined using a combined average statutory tax rate of 25%. The following table summarizes the changes in SJG's AOCL for the three and six months ended June 30, 2018 (in thousands):
(a) Determined using a combined average statutory tax rate of 25%. (b) See table below. The reclassifications out of SJG's AOCL during the three and six months ended June 30, 2018 are as follows (in thousands):
(a) Determined using a combined average statutory tax rate of 25%. |
REVENUE |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE: At contract inception, SJI and SJG assess the goods and services promised in all of its contracts with customers, and identifies a performance obligation for each promise to transfer to a customer a distinct good or service. As applicable for each revenue stream and customer contract type, SJI and SJG follow two approaches:
Below is a listing of all performance obligations that arise from contracts with customers, along with details on the satisfaction of each performance obligation, the significant payment terms, and the nature of the goods and services being transferred:
For all revenue streams listed above, revenue is recognized using the Practical Expedient in ASC 606 which allows an entity to recognize revenue in the amount that is invoiced, as long as that amount corresponds to the value to the customer ("Invoiced Practical Expedient"). SJI's and SJG's contracts with customers discussed above are at prices that are known to the customer at the time of delivery, either through a fixed contractual price or market prices that are established and tied to each delivery. These amounts match the value to the customer as they are purchasing and obtaining the good or service on the same day at the agreed-upon price. This eliminates any variable consideration in transaction price, and as a result revenue is recognized at this price at the time of delivery. SJI and SJG have determined that the above methods provide a faithful depiction of the transfer of goods or services to the customer. For all above performance obligations, SJI's and SJG's efforts are expended throughout the contract based on seasonality and customer needs. Further, for various contracts among each performance obligation, SJI and SJG may have a stand ready obligation to provide goods or services on an as needed basis to the customer. Because the Invoiced Practical Expedient is used for recognizing revenue, SJI and SJG further adopted the Practical Expedient in ASC 606 that allows both company's to not disclose additional information regarding remaining performance obligations. SJI revenues from contracts with customers totaled $201.9 million and $645.8 million for the three and six months ended June 30, 2018, respectively. SJG revenues from contracts with customers totaled $64.1 million and $258.0 million for the three and six months ended June 30, 2018, respectively. The SJG balance is a part of the gas utility operating segment, and is before intercompany eliminations with other SJI entities. Revenues on the condensed consolidated statements of income that are not with contracts with customers consist of (a) revenues from alternative revenue programs at the gas utility operations at SJG, and (b) both utility and nonutility revenue from derivative contracts at the gas utility operations, wholesale energy, retail gas and retail electric operating segments. SJI and SJG disaggregate revenue from contracts with customers into customer type and product line. SJI and SJG have determined that disaggregating revenue into these categories achieves the disclosure objective in ASC 606 to depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors. Further, disaggregating revenue into these categories is consistent with information regularly reviewed by the CODM in evaluating the financial performance of SJI's operating segments. SJG only operates in the Gas Utility Operations segment. See Note 6 for further information regarding SJI's operating segments. Disaggregated revenues from contracts with customers, by both customer type and product line, are disclosed below, by operating segment, for the three and six months ended June 30, 2018 (in thousands):
The following table provides information about SJI's and SJG's receivables and unbilled revenue from contracts with customers (in thousands):
(1) Included in Accounts Receivable in the condensed consolidated balance sheets. A receivable is SJI's and SJG's right to consideration that is unconditional, as only the passage of time is required before payment is expected from the customer. All of SJI's and SJG's Accounts Receivable arise from contracts with customers. (2) Included in Unbilled Revenues in the condensed consolidated balance sheets. All unbilled revenue for SJI and SJG arises from contracts with customers. Unbilled revenue relates to SJI's and SJG's right to receive payment for commodity delivered but not yet billed. This represents contract assets that arise from contracts with customers, which is defined in ASC 606 as the right to payment in exchange for goods already transferred to a customer, excluding any amounts presented as a receivable. The unbilled revenue is transferred to accounts receivable when billing occurs and the rights to collection become unconditional. The change in unbilled revenues for the six months ended June 30, 2018 is due primarily to the timing difference between SJI and SJG delivering the commodity to the customer and the customer actually receiving the bill for payment. |
SUBSEQUENT EVENTS |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS: In October 2017, the Company entered into two separate definitive asset purchase agreements with Pivotal Utility Holding, Inc. to acquire the assets and assume certain liabilities of New Jersey-based ETG and Maryland-based ELK, (collectively, the "Acquisition"). Pursuant to the terms of the asset purchase agreements, the Company agreed to acquire ETG and ELK for a total aggregate purchase price equal to $1.7 billion in cash, consisting of $1.69 billion for ETG and $10.0 million for ELK, in each case, subject to certain customary working capital adjustments upon the close of the Acquisition. The Company received all necessary approvals, and on July 1, 2018, the Company completed the Acquisition. The Company paid the respective purchase prices noted above for ETG and ELK on July 1, 2018, plus an adjustment for the net working capital of each business. Also, as part of the Acquisition, the Company was required by the BPU to provide the customers of ETG and ELK with an approximately $15.3 million rate credit within ninety days of closing. Beginning with SJI's Quarterly Report on Form 10-Q for the three and nine months ending September 30, 2018, SJI will report on a consolidated basis representing the combined operations of ETG and ELK, along with current wholly-owned subsidiaries of SJI. Because SJI was deemed the accounting acquirer in this combination under GAAP, the historical financial statements of ETG and ELK will be reflected in SJI's future quarterly and annual reports. Due to the close proximity in timing of the Acquisition and SJI's filing of this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2018, the valuation report is not yet available, and the initial accounting for the business combination is incomplete; therefore, the Company is unable to disclose certain information required by ASC 805 "Business Combinations." The Company plans to provide preliminary purchase price allocation information in SJI's Quarterly Report on Form 10-Q for the three and nine months ending September 30, 2018. In July 2018, Standard & Poor's (S&P) downgraded SJI and SJG, from BBB+ with a negative outlook to BBB with a stable outlook. S&P had revised the outlook for both SJI and SJG from stable to negative after the announcement of the Acquisition in October 2017. In July 2018, as part of the agreement for Marina to sell its solar assets to a third party (see Note 1), Marina received a cash payment of $62.5 million for the sale of certain SRECs. In August 2018, the State of New Jersey filed a civil enforcement action against SJG and several other current and former owners of certain property in Atlantic City, NJ seeking payment for damages to the state’s natural resources. SJG and its predecessors previously operated a former manufactured gas plant on a portion of the property, which is currently being remediated by the Company with a licensed site remediation professional and funded via SJG’s remediation adjustment clause. Since the filing of the civil complaint is so recent, the Company can provide no assessment of the claim or assurance regarding its outcome. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||
GENERAL | GENERAL - South Jersey Industries, Inc. (SJI or the Company) currently provides a variety of energy-related products and services primarily through the following wholly-owned subsidiaries:
•ACB Energy Partners, LLC (ACB) owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey. •AC Landfill Energy, LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE) and SX Landfill Energy, LLC (SXLE) own and operate landfill gas-to-energy production facilities in Atlantic, Burlington, Salem and Sussex Counties located in New Jersey. •MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS) own and operate solar-generation sites located in New Jersey.
|
||||||||||||||||||||||||||||||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION - SJI's condensed consolidated financial statements include the accounts of SJI, its wholly-owned subsidiaries (including SJG) and subsidiaries in which SJI has a controlling interest. SJI eliminates all significant intercompany accounts and transactions. In management’s opinion, the unaudited condensed consolidated financial statements of SJI and SJG reflect all normal and recurring adjustments needed to fairly present their respective financial positions, operating results and cash flows at the dates and for the periods presented. SJI’s and SJG's businesses are subject to seasonal fluctuations and, accordingly, this interim financial information should not be the basis for estimating the full year’s operating results. As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited condensed consolidated financial statements of SJI and SJG contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial statements should be read in conjunction with SJI’s and SJG's Annual Reports on Form 10-K for the year ended December 31, 2017 for a more complete discussion of the accounting policies and certain other information. |
||||||||||||||||||||||||||||||||
RECLASSIFICATIONS | Certain reclassifications have been made to SJI's and SJG's prior period condensed consolidated statements of income to conform to the current period presentation. The non-service cost components of net periodic pension and postretirement benefit costs are now included as a reduction to Other Income and Expense, as opposed to being recorded as an Operations Expense, to conform with ASU 2017-07, which is described below under "New Accounting Pronouncements." This caused a reduction to both Operations Expense and Other Income on the condensed consolidated statements of income for the three and six months ended June 30, 2017. This also caused a reclassification to SJI's prior period segments disclosure in Note 6 to increase Operating Income within both the Gas Utility Operations and Corporate & Services segments for the three and six months ended June 30, 2017. Certain reclassifications have been made to SJI's prior period segments disclosures to conform to the current period presentation. The activities of SJI Midstream, which were presented in the Corporate & Services segment during the three and six months ended June 30, 2017, are now separated into the Midstream segment for the same periods in 2018. This caused prior period adjustments to Interest Charges, Income Taxes and Property Additions in Note 6. |
||||||||||||||||||||||||||||||||
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS - Long-lived assets that are held and used are reviewed for impairment whenever events or changes in circumstances indicate carrying values may not be recoverable. Such reviews are performed in accordance with ASC 360. An impairment loss is indicated if the total future estimated undiscounted cash flows expected from an asset are less than its carrying value. An impairment charge is measured by the difference between an asset's carrying amount and fair value with the difference recorded within Operating Expenses on the condensed consolidated statements of income. Fair values can be determined by a variety of valuation methods, including third-party appraisals, sales prices of similar assets, and present value techniques. |
||||||||||||||||||||||||||||||||
REVENUE-BASED TAXES | REVENUE-BASED TAXES - SJG collects certain revenue-based energy taxes from its customers. Such taxes include the New Jersey State Sales Tax and Public Utilities Assessment (PUA). State sales tax is recorded as a liability when billed to customers and is not included in revenue or operating expenses. The PUA is included in both Utility Revenue and Energy and Other Taxes and totaled $0.2 million for both the three months ended June 30, 2018 and 2017, and $0.5 million and $0.6 million for the six months ended June 30, 2018 and 2017, respectively. |
||||||||||||||||||||||||||||||||
GAS EXPLORATION AND DEVELOPMENT | GAS EXPLORATION AND DEVELOPMENT - SJI capitalizes all costs associated with gas property acquisition, exploration and development activities under the full cost method of accounting. Capitalized costs include costs related to unproved properties, which are not amortized until proved reserves are found or it is determined that the unproved properties are impaired. All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. |
||||||||||||||||||||||||||||||||
TREASURY STOCK | TREASURY STOCK - SJI uses the par value method of accounting for treasury stock. |
||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES - Deferred income taxes are provided for all significant temporary differences between the book and taxable bases of assets and liabilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 - “Income Taxes.” A valuation allowance is established when it is determined that it is more likely than not that a deferred tax asset will not be realized. On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Reform") was enacted into law, which changed various corporate income tax provisions within the existing Internal Revenue Code. The law became effective January 1, 2018 but was required to be accounted for in the period of enactment, as such SJI adopted the new law in the fourth quarter of 2017. SJI and SJG were impacted in several ways as a result of Tax Reform, including provisions related to the permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%, modification of bonus depreciation and changes to the deductibility of certain business-related expenses. The SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of Tax Reform. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date of Tax Reform for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of Tax Reform for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of Tax Reform is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of Tax Reform. SJI and SJG were able to make reasonable, good faith estimates of certain effects and, therefore, recorded provisional adjustments for the following: the tax rules regarding the appropriate bonus deprecation rate that should be applied to assets placed in service after September 27, 2017, including the information required to compute the applicable depreciable tax basis. Further, Tax Reform is unclear in certain respects and will require interpretations and implementing regulations by the Internal Revenue Service, as well as state tax authorities. Tax Reform could also be subject to potential amendments and technical corrections which could impact the Company’s financial statements. Any required changes to the provisional estimates would result in the recording of regulatory assets or liabilities to the extent such amounts are probable of settlement or recovery through customer rates and a net change to income tax expense for any other amounts. Final adjustments to the provisional amounts are expected to be recorded by the fourth quarter of 2018. The accounting for all other applicable provisions of Tax Reform is considered complete based on the current interpretation. |
||||||||||||||||||||||||||||||||
GOODWILL | GOODWILL - Goodwill represents the excess of the consideration paid over the fair value of identifiable net assets acquired. Goodwill is not amortized, but instead is subject to impairment testing on an annual basis, and between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. No such events have occurred during the three and six months ended June 30, 2018. |
||||||||||||||||||||||||||||||||
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS - Other than as described below, no new accounting pronouncements issued or effective during 2018 or 2017 had, or are expected to have, a material impact on the condensed consolidated financial statements of SJI, or the condensed financial statements of SJG. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC Topic 606). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition, and in most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. In connection with this new standard, the FASB has issued several amendments to ASU 2014-09, as follows:
The new guidance in ASU 2014-09, as well as all amendments discussed above, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. On January 1, 2018, SJI and SJG adopted ASU 2014-09 and all amendments, which meant adopting the guidance in ASC 606. SJI and SJG adopted the new guidance using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under ASC 605. See Note 16. The methods of recognizing revenue for SJI's and SJG's contracts with customers is the same under ASC 605 and ASC 606, as revenues from contracts that SJI and SJG have with customers are currently recorded as gas or electricity is delivered to the customer, which is consistent with the new guidance under ASC 606. As such, there was no significant impact to revenues for the three and six months ended June 30, 2018 for SJI or SJG as a result of applying ASC 606, and there was no cumulative catch-up to retained earnings for SJI or SJG under the modified retrospective method for changes in accounting for revenues. Further, there were no significant changes to SJI's or SJG's business processes, systems or internal controls over financial reporting needed to support recognition and disclosure under the new guidance. In March 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The new standard also will result in enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases. The accounting for leases by the lessor remains relatively the same. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Management has formed an implementation team that has completed the process of inventorying all current contracts, including those of newly acquired ETG and ELK, and has determined the population of leases that will be in scope under the new guidance. Management is currently evaluating the impact that adoption of the guidance on these identified leases will have on SJI's and SJG's financial statements, which includes monitoring industry specific developments including the exposure draft issued by the FASB that would introduce a land easement practical expedient to ASC 842. Consistent with the requirements of the standard, SJI and SJG expect to both transition to the new guidance using the modified retrospective approach, although this could be subject to change based on new guidance from the FASB. The Company does not plan to early adopt the new guidance. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The amendments in this update are effective for annual and any interim impairment tests performed in periods beginning after December 31, 2019. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU is designed to improve guidance related to the presentation of defined benefit costs in the income statement. In particular, this ASU requires an employer to report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Adoption of this guidance was applied retrospectively and did not have a material impact on the financial statements of SJI or SJG; however, current and prior period presentation on the condensed consolidated statements of income were modified for SJI and SJG to conform to this guidance, as described under “Basis of Presentation” above. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. This ASU is intended to improve the financial reporting of hedging relationships so that it represents a more faithful portrayal of an entity’s risk management activities (i.e. to help financial statement users understand an entity’s risk exposures and the manner in which hedging strategies are used to manage them), as well as to further simplify the application of the hedge accounting guidance in GAAP. The standard is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income. This ASU allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from Tax Reform. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Reform and will improve the usefulness of information reported to financial statement users. The standard is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In March 2018, the FASB issued ASU 2018-04, Investments—Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 (SEC Update). This ASU incorporates recent SEC guidance which was issued in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and SEC rules and regulation. ASU No. 2018-04 was effective upon issuance. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. This ASU aligns the accounting for share-based payment awards issued to employees and nonemployees. Under the new guidance, equity-classified share-based payment awards issued to nonemployees will now be measured on the grant date, instead of the previous requirement to remeasure the awards through the performance completion date. For performance conditions, compensation cost associated with the award will be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition. The current requirement to reassess the classification (equity or liability) for nonemployee awards upon vesting will be eliminated, except for awards in the form of convertible instruments. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. |
||||||||||||||||||||||||||||||||
FAIR VALUE | GAAP establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques. The levels of the hierarchy are described below:
Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. (A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. (B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable. Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forward contracts, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary. Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration. (C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Separately Recognized Transactions | In connection with the Acquisition, SJI incurred the following fees during the three and six months ended June 30, 2018 (in millions):
(A) These interest charges relate to debt that was issued during the second quarter of 2018 to fund a portion of the purchase price for the Acquisition, along with the amortization of debt issuance costs incurred. See Note 14. (B) Relates to a senior unsecured bridge facility (the “Bridge Facility”), which was entered into in the fourth quarter of 2017. This Bridge Facility was terminated as of June 30, 2018. (C) All of these costs are included in the Corporate & Services segment. |
STOCK-BASED COMPENSATION PLAN (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the nonvested restricted stock awards outstanding and the assumptions used to estimate the fair value of the awards | The following table summarizes the nonvested restricted stock awards outstanding for SJI at June 30, 2018 and the assumptions used to estimate the fair value of the awards:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the total stock-based compensation cost for the period | The following table summarizes the total stock-based compensation cost to SJI for the three and six months ended June 30, 2018 and 2017 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of information regarding restricted stock award activity during the period excluding accrued dividend equivalents | The following table summarizes information regarding restricted stock award activity for SJI during the six months ended June 30, 2018, excluding accrued dividend equivalents:
|
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of operating results of discontinued operations | Summarized operating results of the discontinued operations for the three and six months ended June 30, 2018 and 2017, were (in thousands, except per share amounts):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of related party transactions | A summary of related-party transactions involving SJG, excluding pass-through items, included in SJG's Operating Revenues were as follows (in thousands):
Related-party transactions involving SJG, excluding pass-through items, included in SJG's Cost of Sales and Operating Expenses were as follows (in thousands):
*As discussed in Note 1 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017, revenues and expenses related to the energy trading activities of the wholesale energy operations at SJRG are presented on a net basis in Operating Revenues – Nonutility on the condensed consolidated income statement. |
COMMON STOCK (Tables) |
6 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||
Schedule of common stock shares issued and outstanding | The following shares were issued and outstanding for SJI:
|
FINANCIAL INSTRUMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments, Owned, at Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of restricted cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands):
|
SEGMENTS OF BUSINESS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments of Business | Information about SJI’s operations in different reportable operating segments is presented below (in thousands):
|
REGULATORY ASSETS AND REGULATORY LIABILITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Regulatory Assets | SJI's and SJG's Regulatory Assets consisted of the following items (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Regulatory Liabilities | SJI's and SJG's Regulatory Liabilities consisted of the following items (in thousands):
|
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of defined benefit plans disclosures | For the three and six months ended June 30, 2018 and 2017, net periodic benefit cost related to the employee and officer pension and other postretirement benefit plans for SJI consisted of the following components (in thousands):
|
LINES OF CREDIT (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of lines of credit | Credit facilities and available liquidity as of June 30, 2018 were as follows (in thousands):
(A) Includes letters of credit outstanding in the amount of $6.1 million. (B) Includes letters of credit outstanding in the amount of $0.8 million. (C) SJG expects to renew this facility prior to expiration. |
DERIVATIVE INSTRUMENTS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding derivative contracts | As of June 30, 2018, SJI and SJG had outstanding derivative contracts as follows (1 MMdts = one million decatherms; 1 MMmWh = one million megawatt hours):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of notional amounts of outstanding derivative positions | As of June 30, 2018, SJI’s active interest rate swaps were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of derivative instruments | The fair values of all derivative instruments, as reflected in the condensed consolidated balance sheets as of June 30, 2018 and December 31, 2017, are as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting assets | As of June 30, 2018 and December 31, 2017, information related to these offsetting arrangements were as follows (in thousands):
(A) The balances at June 30, 2018 and December 31, 2017 were related to derivative liabilities which can be net settled against derivative assets. (B) The balances at June 30, 2018 and December 31, 2017 were related to derivative assets which can be net settled against derivative liabilities. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting liabilities | As of June 30, 2018 and December 31, 2017, information related to these offsetting arrangements were as follows (in thousands):
(A) The balances at June 30, 2018 and December 31, 2017 were related to derivative liabilities which can be net settled against derivative assets. (B) The balances at June 30, 2018 and December 31, 2017 were related to derivative assets which can be net settled against derivative liabilities. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives in cash flow hedging relationships | The effect of derivative instruments on the condensed consolidated statements of income for the three and six months ended June 30, 2018 and 2017 are as follows (in thousands):
(a) Included in Interest Charges
(a) Included in Operating Revenues - Nonutility (b) Included in Interest Charges |
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of assets and liabilities | For financial assets and financial liabilities measured at fair value on a recurring basis, information about the fair value measurements for each major category is as follows (in thousands):
(A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. (B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable. Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forward contracts, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary. Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration. (C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quantitative information regarding significant unobservable inputs, assets | The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands): SJI (includes SJG and all other consolidated subsidiaries):
SJG:
(A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas. (B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quantitative information regarding significant unobservable inputs, liabilities | The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands): SJI (includes SJG and all other consolidated subsidiaries):
SJG:
(A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas. (B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in fair value using significant unobservable inputs | The changes in fair value measurements of Derivatives – Energy Related Assets and Liabilities for the three and six months ended June 30, 2018 and 2017, using significant unobservable inputs (Level 3), are as follows (in thousands):
|
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in accumulated other comprehensive loss (AOCL) | The following table summarizes the changes in SJG's AOCL for the three and six months ended June 30, 2018 (in thousands):
(a) Determined using a combined average statutory tax rate of 25%. (b) See table below. The following table summarizes the changes in SJI's accumulated other comprehensive loss (AOCL) for the three and six months ended June 30, 2018 (in thousands):
(a) Determined using a combined average statutory tax rate of 25%. (b) See table below. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassifications out of AOCL | The reclassifications out of SJG's AOCL during the three and six months ended June 30, 2018 are as follows (in thousands):
(a) Determined using a combined average statutory tax rate of 25%. The following table provides details about reclassifications out of SJI's AOCL for the three and six months ended June 30, 2018 (in thousands):
(a) Determined using a combined average statutory tax rate of 25%. |
REVENUE (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | Below is a listing of all performance obligations that arise from contracts with customers, along with details on the satisfaction of each performance obligation, the significant payment terms, and the nature of the goods and services being transferred:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Disaggregated revenues from contracts with customers, by both customer type and product line, are disclosed below, by operating segment, for the three and six months ended June 30, 2018 (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract with Customer, Asset and Liability | The following table provides information about SJI's and SJG's receivables and unbilled revenue from contracts with customers (in thousands):
(1) Included in Accounts Receivable in the condensed consolidated balance sheets. A receivable is SJI's and SJG's right to consideration that is unconditional, as only the passage of time is required before payment is expected from the customer. All of SJI's and SJG's Accounts Receivable arise from contracts with customers. (2) Included in Unbilled Revenues in the condensed consolidated balance sheets. All unbilled revenue for SJI and SJG arises from contracts with customers. Unbilled revenue relates to SJI's and SJG's right to receive payment for commodity delivered but not yet billed. This represents contract assets that arise from contracts with customers, which is defined in ASC 606 as the right to payment in exchange for goods already transferred to a customer, excluding any amounts presented as a receivable. The unbilled revenue is transferred to accounts receivable when billing occurs and the rights to collection become unconditional. The change in unbilled revenues for the six months ended June 30, 2018 is due primarily to the timing difference between SJI and SJG delivering the commodity to the customer and the customer actually receiving the bill for payment. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Acquisition (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|---|
Oct. 31, 2017 |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Business Acquisition [Line Items] | ||||||
Payment to acquire assets | $ 125,973 | $ 142,029 | ||||
Interest Charges | $ 19,561 | $ 10,979 | 33,533 | $ 27,724 | ||
Unamortized debt issuance costs | 24,100 | $ 17,400 | 24,100 | |||
Elizabethtown Gas and Elkton Gas | ||||||
Business Acquisition [Line Items] | ||||||
Payment to acquire assets | $ 1,700,000 | $ 1,700,000 | ||||
Legal fees | 18,000 | 27,300 | ||||
Amortization | 100 | |||||
Payments of financing costs | 6,500 | |||||
Unamortized debt issuance costs | 13,800 | 13,800 | ||||
Operating Expense | Elizabethtown Gas and Elkton Gas | ||||||
Business Acquisition [Line Items] | ||||||
Legal fees | 9,500 | 15,000 | ||||
Interest Expense | ||||||
Business Acquisition [Line Items] | ||||||
Interest Charges | 2,700 | 2,700 | ||||
Interest Expense | Elizabethtown Gas and Elkton Gas | ||||||
Business Acquisition [Line Items] | ||||||
Amortization | 5,300 | 7,900 | ||||
Ticking fees | $ 500 | $ 1,700 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Solar Asset Sale (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
Jun. 27, 2018
USD ($)
site
project
MW
|
Dec. 31, 2017
USD ($)
|
---|---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Regulatory Assets | $ 476,635 | $ 469,224 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | Marina | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of solar energy projects | project | 76 | ||
Number of solar energy sites | site | 143 | ||
Capacity of solar energy projects | MW | 204 | ||
Consideration | $ 347,900 | ||
Ownership interest prior to disposal | 100.00% | ||
Potential aggregate downward adjustment | $ 5,400 | ||
Solar assets | Disposal Group, Held-for-sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Regulatory Assets | $ 428,900 |
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS - Summarized Operating Results (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Loss Before Income Taxes: | ||||
Income Tax Benefits | $ 7 | $ 25 | $ 22 | $ 41 |
Loss from Discontinued Operations — Net | $ (26) | $ (47) | $ (92) | $ (77) |
Earnings (Loss) Per Common Share from Discontinued Operations - Net | ||||
Basic and Diluted (in dollars per share) | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 |
Sand Mining | ||||
Loss Before Income Taxes: | ||||
Loss Before Income Taxes | $ 7 | $ (15) | $ (33) | $ (32) |
Fuel Oil | ||||
Loss Before Income Taxes: | ||||
Loss Before Income Taxes | $ (40) | $ (57) | $ (81) | $ (86) |
COMMON STOCK - Summary of Shares Issued and Outstanding (Details) |
6 Months Ended |
---|---|
Jun. 30, 2018
shares
| |
Common Stock [Roll Forward] | |
Beginning balance (in shares) | 79,549,080 |
New Issuances During the Period: | |
Number of shares issued | 5,889,830 |
Stock-Based Compensation Plan (in shares) | 67,076 |
Ending balance (in shares) | 85,505,986 |
COMMON STOCK - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Par value of common stock (in dollars per share) | $ 1.25 | $ 1.25 | |||
Net excess over par value recorded in premium on common stock | $ 132.7 | ||||
Shares of common stock outstanding (in shares) | 85,505,986 | 85,505,986 | 79,549,080 | ||
Incremental shares included in diluted EPS calculation (in shares) | 806,695 | 150,852 | 452,210 | 136,332 | |
South Jersey Gas Company | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Par value of common stock (in dollars per share) | $ 2.50 | $ 2.50 | |||
Shares of common stock outstanding (in shares) | 2,339,139 | 2,339,139 |
FINANCIAL INSTRUMENTS - Credit Risk (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
counterparty
| |
Concentration Risk [Line Items] | |
Number of counterparties | counterparty | 3 |
Supplier Concentration Risk | Derivatives Energy Related Assets | |
Concentration Risk [Line Items] | |
Current and noncurrent derivatives | $ | $ 10.0 |
Percentage of current and noncurrent derivatives | 29.10% |
FINANCIAL INSTRUMENTS - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt, including current maturities | $ 2,840.0 | $ 1,220.0 |
Carrying amount of long-term debt, including current maturities | 2,770.0 | 1,190.0 |
Unamortized debt issuance costs | 24.1 | 17.4 |
South Jersey Gas Company | ||
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt, including current maturities | 835.5 | 838.5 |
Carrying amount of long-term debt, including current maturities | 822.2 | 821.9 |
Unamortized debt issuance costs | $ 7.0 | $ 7.3 |
REGULATORY ASSETS AND REGULATORY LIABILITIES - Narrative and Regulatory Liabilities (Details) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018
USD ($)
site
asset
|
Dec. 31, 2017
USD ($)
|
|
Regulatory Assets and Liabilities Disclosure [Abstract] | ||
Revision of estimate of asset retirement obligation | $ 12,500 | |
Regulatory Liabilities [Line Items] | ||
Total Regulatory Liabilities | 299,382 | $ 287,105 |
Deferred Revenues - Net | ||
Regulatory Liabilities [Line Items] | ||
Increase in Regulatory Assets | 43,200 | |
Tax Reform | ||
Regulatory Liabilities [Line Items] | ||
Increase in Regulatory Assets | 13,200 | |
Total Regulatory Liabilities | 277,015 | 263,810 |
Excess Plant Removal Costs | ||
Regulatory Liabilities [Line Items] | ||
Total Regulatory Liabilities | $ 22,367 | $ 23,295 |
Environmental restoration costs | ||
Regulatory Assets [Line Items] | ||
Number of regulatory assets | asset | 2 | |
Number of sites for environmental cleanup | site | 12 | |
Original recovery period of expenditures | 7 years |
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Jan. 31, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Pension Benefits | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service Cost | $ 639,000 | $ 1,112,000 | $ 2,816,000 | $ 2,494,000 | |
Interest Cost | 716,000 | 2,931,000 | 5,824,000 | 5,886,000 | |
Expected Return on Plan Assets | (19,000) | (3,529,000) | (7,652,000) | (7,053,000) | |
Amortizations: | |||||
Prior Service Cost | (13,000) | 33,000 | 58,000 | 66,000 | |
Actuarial Loss | 1,632,000 | 2,528,000 | 5,764,000 | 5,141,000 | |
Net Periodic Benefit Cost | 2,955,000 | 3,075,000 | 6,810,000 | 6,534,000 | |
Capitalized Benefit Cost | (554,000) | (1,129,000) | (1,037,000) | (2,400,000) | |
Deferred Benefit Cost | (374,000) | (139,000) | (1,125,000) | (300,000) | |
Total Net Periodic Benefit Expense | 2,027,000 | 1,807,000 | 4,648,000 | 3,834,000 | |
Contributions | $ 10,000,000 | 0 | |||
Estimated future contributions | 0 | 0 | |||
Pension Benefits | South Jersey Gas Company | |||||
Amortizations: | |||||
Net Periodic Benefit Cost | 1,900,000 | 2,300,000 | 4,300,000 | 4,800,000 | |
Contributions | $ 8,000,000 | ||||
Estimated future contributions | 0 | 0 | |||
Other Postretirement Benefits | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Service Cost | 360,000 | 208,000 | 441,000 | 455,000 | |
Interest Cost | 859,000 | 609,000 | 1,076,000 | 1,209,000 | |
Expected Return on Plan Assets | (1,578,000) | (853,000) | (1,883,000) | (1,705,000) | |
Amortizations: | |||||
Prior Service Cost | (141,000) | (86,000) | (172,000) | (172,000) | |
Actuarial Loss | 340,000 | 307,000 | 451,000 | 619,000 | |
Net Periodic Benefit Cost | (160,000) | 185,000 | (87,000) | 406,000 | |
Capitalized Benefit Cost | 0 | (46,000) | (5,000) | (101,000) | |
Total Net Periodic Benefit Expense | (160,000) | 139,000 | (92,000) | 305,000 | |
Other Postretirement Benefits | South Jersey Gas Company | |||||
Amortizations: | |||||
Net Periodic Benefit Cost | 100,000 | $ 100,000 | 100,000 | $ 200,000 | |
Supplemental executive retirement plan | |||||
Amortizations: | |||||
Estimated future contributions | $ 2,400,000 | $ 2,400,000 |
DERIVATIVE INSTRUMENTS - Effect of Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Interest Rate Contracts: | ||||
Total | $ (5,558) | $ (8,234) | $ 19,423 | $ 5,448 |
Fair value of derivative instruments with credit-risk-related features | 500 | 500 | ||
Additional collateral, aggregate fair value | 200 | 200 | ||
Derivatives in Cash Flow Hedging Relationships under GAAP | ||||
Interest Rate Contracts: | ||||
Losses reclassified from AOCL into income | (12) | (12) | (24) | (2,499) |
Derivatives in Cash Flow Hedging Relationships under GAAP | SJG | ||||
Interest Rate Contracts: | ||||
Losses reclassified from AOCL into income | (12) | (12) | (24) | (24) |
Derivatives not designated as hedging instruments under GAAP | ||||
Interest Rate Contracts: | ||||
(Losses) gains on energy-related commodity contracts | (6,178) | (7,855) | 17,175 | 6,832 |
Gains (Losses) on interest rate contracts | $ 620 | $ (379) | $ 2,248 | $ (1,384) |
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Changes in Measurements (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at beginning of period | $ 16,586 | $ 16,234 | $ 3,110 | $ 9,035 |
Other Changes in Fair Value from Continuing and New Contracts, Net | 6,215 | 7,982 | 10,204 | 6,994 |
Transfers in/(out) of Level 3 (A) | (748) | (748) | ||
Settlements | (4,440) | (6,067) | 5,047 | 2,120 |
Balance at end of period | 18,361 | 17,401 | 18,361 | 17,401 |
SJG | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at beginning of period | (6) | 511 | 2,052 | 926 |
Other Changes in Fair Value from Continuing and New Contracts, Net | 6,003 | 6,422 | 5,997 | 6,933 |
Settlements | 0 | 0 | (2,052) | (926) |
Balance at end of period | $ 5,997 | $ 6,933 | $ 5,997 | $ 6,933 |
ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassifications out of AOCL (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income Taxes | $ (31,972) | $ (5,544) | $ 4,443 | $ 16,326 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (8) | $ (17) | ||
Combined statutory tax rate | 25.00% | 40.00% | ||
South Jersey Gas Company | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income Taxes | 482 | $ 1,431 | $ 22,318 | $ 31,342 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (8) | $ (17) | ||
Combined statutory tax rate | 25.00% | 40.00% | ||
Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges | South Jersey Gas Company | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (8) | $ (17) | ||
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income Taxes | (4) | (7) | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (17) | |||
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges | South Jersey Gas Company | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income Taxes | (4) | (7) | ||
Net Income (Loss) Attributable to Parent | 8 | 17 | ||
Interest Charges | Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | 12 | 24 | ||
Interest Charges | Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges | South Jersey Gas Company | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | $ 12 | $ 24 |
REVENUE (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 201,854 | $ 645,833 |
South Jersey Gas Company | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 64,100 | $ 258,000 |
REVENUE Disaggregated Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 201,854 | $ 645,833 |
Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 50,824 | 206,702 |
Commercial & Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 149,519 | 431,753 |
OSS & Capacity Release | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 972 | 6,176 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 539 | 1,202 |
Gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 153,639 | 550,091 |
Electric | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 26,809 | 55,187 |
Solar | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 12,126 | 21,434 |
CHP | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,161 | 15,014 |
Landfills | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,668 | 3,136 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 451 | 971 |
Gas Utility Operations | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 64,056 | 257,990 |
Gas Utility Operations | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 43,982 | 191,244 |
Gas Utility Operations | Commercial & Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 18,563 | 59,368 |
Gas Utility Operations | OSS & Capacity Release | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 972 | 6,176 |
Gas Utility Operations | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 539 | 1,202 |
Gas Utility Operations | Gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 64,056 | 257,990 |
Wholesale Energy Operations | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 76,376 | 250,222 |
Wholesale Energy Operations | Commercial & Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 76,376 | 250,222 |
Wholesale Energy Operations | Gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 76,376 | 250,222 |
Retail Gas and Other Operations | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 15,121 | 48,367 |
Retail Gas and Other Operations | Commercial & Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 15,121 | 48,367 |
Retail Gas and Other Operations | Gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 15,121 | 48,367 |
Retail Electric Operations | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 28,821 | 58,867 |
Retail Electric Operations | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 6,391 | 14,487 |
Retail Electric Operations | Commercial & Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 22,430 | 44,380 |
Retail Electric Operations | Electric | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 28,821 | 58,867 |
On-Site Energy Production | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 24,734 | 45,891 |
On-Site Energy Production | Commercial & Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 24,734 | 45,891 |
On-Site Energy Production | Solar | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 15,905 | 27,741 |
On-Site Energy Production | CHP | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,161 | 15,014 |
On-Site Energy Production | Landfills | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,668 | 3,136 |
Appliance Service Operations | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 451 | 971 |
Appliance Service Operations | Residential | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 451 | 971 |
Appliance Service Operations | Commercial & Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | |
Appliance Service Operations | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 451 | 971 |
Corporate Services and Intersegment | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (7,705) | (16,475) |
Corporate Services and Intersegment | Commercial & Industrial | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (7,705) | (16,475) |
Corporate Services and Intersegment | Gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (1,914) | (6,488) |
Corporate Services and Intersegment | Electric | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (2,012) | (3,680) |
Corporate Services and Intersegment | Solar | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ (3,779) | $ (6,307) |
REVENUE Accounts Receivable (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Accounts Receivable | $ 196,601 | $ 202,379 |
Unbilled Revenues | 24,464 | 73,377 |
South Jersey Gas Company | ||
Disaggregation of Revenue [Line Items] | ||
Accounts Receivable | 95,420 | 78,571 |
Unbilled Revenues | 9,721 | $ 54,980 |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||
Disaggregation of Revenue [Line Items] | ||
Accounts Receivable | (5,778) | |
Unbilled Revenues | (48,913) | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | South Jersey Gas Company | ||
Disaggregation of Revenue [Line Items] | ||
Accounts Receivable | 16,849 | |
Unbilled Revenues | $ (45,259) |
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|---|
Jul. 01, 2018 |
Jul. 31, 2018 |
Oct. 31, 2017 |
Dec. 31, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Subsequent Event [Line Items] | ||||||
Payment to acquire assets | $ 125,973 | $ 142,029 | ||||
Elizabethtown Gas and Elkton Gas | ||||||
Subsequent Event [Line Items] | ||||||
Payment to acquire assets | $ 1,700,000 | $ 1,700,000 | ||||
Elizabethtown Gas and Elkton Gas | Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Public utilities rate credit | $ 15,300 | |||||
Elkton Gas | ||||||
Subsequent Event [Line Items] | ||||||
Payment to acquire assets | 10,000 | |||||
Elizabethtown Gas | ||||||
Subsequent Event [Line Items] | ||||||
Payment to acquire assets | $ 1,690,000 | |||||
Marina | Disposal Group, Held-for-sale, Not Discontinued Operations | Solar assets | Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from sale of productive assets | $ 62,500 |
Y?ZWO7JD"+>C>,"8C>A:/(/KKD\VW9%
M!0=Q;6RO-)D=6Z)':O_A?^%]/_65R7/9J.!9:-,)V/_U20C-S7K(@UG)Q;1P
MXZ#B)]T]+LRS[/N8?J!%._1HT=@H;OX 4$L#!!0 ( R$"$T_H^1;CP<
M !HJ 8 >&PO=V]R:W-H965T[Y=+)KMWI5%\ZDZNY/_SU-5ET7K;^OG17.N7;'K*Y7'!4=1LBB+PVF^6O9E
M#_5J6;VTQ\/)/=2SYJ4LB_J_M3M6E[LYS=\*/A^>]VU7L%@MS\6S^\NU7\X/
MM;];7%O9'4IW:@[5:5:[I[OY/=UNK.TJ](J_#^[23*YG72B/5?6UN_E]=S>/
M.D?NZ+9MUT3A?U[=QAV/74O>Q[]CH_-KGUW%Z?5;Z[_VP?M@'HO&;:KC/X==
MN[^;9_/9SCT5+\?VO"O(5E8Q8V8*&I*VNTAJ?",A*^5EG6F(?M1VJG&E1%87$9"5^K+FM._=0/
M%5!!]< ,WV+3LYZ$QV2'5]/%;&S_1Q%58Y8U*J/204R##:>@=X% %(^E>\3A*TSU7%(R%?\=SB!]>%#B(T.5*:H8N3O/(N _O XYO\#I^F_;.PC>P
9>I
M>**Q\7_ATTA]9:;ERJ*K=O[YQ"8W6COPJ6P>?"Z=G^+%$-"XL#WXO9G>\F0X
MW<]C2I9_1?D'4$L#!!0 ( R$"$V>N,_GMP$ -(# 9 >&PO=V]R
M:W-H965T
<3F]QH[<"GLKGSN71^BA=#
M0./"]H/?F^DM3X;3_3RF9/E7E+\!4$L#!!0 ( R$"$VU92]DMP$ -(#
M 9 >&PO=V]R:W-H965T
N%QPEO,B/M)?E+\43Z68.2W+/LEH7B4LMTIZ6-B/:+9%H310
MB-\)O5:=L25#>67L34Z^[Q?V1"JB*=UQ21&+QX6N:)I*)J'C;T-JMSZE87?\
MP;Y5P8M@7N.*KECZ)]GST\(.;6M/#_$YY<_L^HTV 7FVU43_@UYH*N!2B?"Q
M8VFEOJW=N>(L:UB$E"Q^KY])KI[7AO_###; C0%N#8@W:$ : ](:8#1HX#8&
M[E@/7F/@C?7@-P;^IT&@ZE$G2V5_'?-X.2_9U2KK#53$E@3AN7.11 TFJC&X@\%^'[(V(:A%.$) JP)#*B)LF!-$^BY6$,;5
M9(S@V8S@V4(8#PZ(@&DEBH!T\Q%@F, %"5Q%X/84:$F/:HRG,+G"!%H^AA ]
M$1XHP@-$:"XBSW"!4*C)&,;TA/B@$!\0HCF):DS0<2+ZJ_AHVV@<;&W"/ "V
M,6%^']8++@"#"X#@IEIP@>$G]"'9(W%; !<," ]!X:$I'&N.HM H/<8>(=I+
MN1X'VP(PY/ONC3=K"JJ>&JH1UC?UU$@/\8+03/=(W/8^KB<<3>!>/3&Z"L$W
M^BRZT>X14#.MWZ\:4#?-^KX'(&1@_R"P[3\B#*C1:AXUH $UJ_N0]7W(9A#2
M#P=N^H@8X> ;6Q/!71^Y7Z@PW+,1T+3U"D?([,A&3CUCSQHYO
.FZI2H\Q^+.:A!3SD>??)2AY"2)5U>4B8FQ9P,VFMPORRL?Y!83$G
M+.($I[>5 /#!\SG\79VL*\KRW1.,$X<6C'PE[<#LQ5QXCL$Z65>4Y7%C[CBP
M&DQ\U@5%6CT83@[ B8/]#HJT?L!D
QB"KS'@Y$4V'OT@=T#Q=ZCP_T#D&0(BNS]PVV,205[F +G
M\;'=(78>C1X0!#N/H@74WCMT('/!9YYMG+LPDQ#V,07NXR-K#L7NH_/ILC#L
M/@96OH$L'<@8+_6XI)']G^T+03
MP7)^3/?RIVQ^'1\J/0H&+]NLD&6=J=*KY&[AW].[-8M: X/XG.=Z7@&L;$&TGTPKV(#&N
MH*-X@"L;;&5S5_T!URS<<* "+D5 I&AMEQYT\=:,./#0,[$SG+IA]6*P3$B>.EQ'#Q,%L\G$0.
M%[@F&+\A6UP3S#YW.)F^&E'0]' *1BU+(:N]Z>YJ;Z-.I6DM1[-#!WD/IN5Y
M@W?MY_>TVF=E[3VJ1C=.IKW9*=5('0N9Z9P/NN,=!KG<->VMT/=5U_9U@T8=
M^Y8V&/KJY7]02P,$% @ #(0(30&TUG:J P N! !D !X;"]W;W)K
M