Schedule I

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule I

SCHEDULE I - SOUTH JERSEY INDUSTRIES, INC.

CONDENSED STATEMENTS OF INCOME

(In Thousands)

	2017			2016			2015
Management Service Fee Revenues	$	34,321		$	25,463		$	20,990
Operating Expenses:
Operations	45,182			23,852			17,979
Depreciation	311			377			406
Energy and Other Taxes	1,324			1,033			806
Total Operating Expenses	46,817			25,262			19,191
Operating (Loss) Income	(12,496		)	201			1,799
Other Income:
Equity in (Losses) Earnings of Subsidiaries (See Note 1)	(2,793		)	119,061			105,610
Other	16,752			11,953			10,145
Total Other Income	13,959			131,014			115,755
Interest Charges	23,818			12,148			11,822
Income Taxes	(18,951		)	6			122
(Loss) Income from Continuing Operations	(3,404		)	119,061			105,610
Equity in Undistributed Earnings of Discontinued Operations	(86		)	(251		)	(503		)
Net (Loss) Income	$	(3,490	)	$	118,810		$	105,107

SCHEDULE I - SOUTH JERSEY INDUSTRIES, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

	2017			2016			2015
Net (Loss) Income	$	(3,490	)	$	118,810		$	105,107
Other Comprehensive Income (Loss) - Net of Tax
Postretirement Liability Adjustment (A)	(10,920		)	(3,197		)	5,518
Unrealized Gain (Loss) on Available-for-Sale Securities (B)	—			118			(53		)
Unrealized Gain on Derivatives - Other (B)	1,536			197			294
Total Other Comprehensive (Loss) Income - Net of Tax	(9,384		)	(2,882		)	5,759
Comprehensive (Loss) Income	$	(12,874	)	$	115,928		$	110,866

(A) Determined using a combined average statutory tax rate of 27% for 2017 and 40% for 2016 and 2015.

(B) Determined using a combined average statutory tax rate of 39% for 2017 and 40% for 2016 and 2015.

SCHEDULE I - SOUTH JERSEY INDUSTRIES, INC.

CONDENSED STATEMENTS OF RETAINED EARNINGS

(In Thousands)

	2017			2016			2015
Retained Earnings - Beginning	$	510,597		$	474,167		$	439,218
Net (Loss) Income	(3,490		)	118,810			105,107
	507,107			592,977			544,325
Dividends Declared - Common Stock	(87,308		)	(82,380		)	(70,158		)
Excess Tax Benefit on Restricted Stock	552			—			—
Retained Earnings - Ending	$	420,351		$	510,597		$	474,167

SCHEDULE I - SOUTH JERSEY INDUSTRIES, INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE TWELVE MONTHS ENDED DECEMBER 31,

(In Thousands)

	2017			2016			2015
CASH PROVIDED BY OPERATING ACTIVITIES (See Note 1)	$	17,339		$	20,507		$	38,926
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Advances to) Repayments from Associated Companies	(16,096		)	32,300			(118,802		)
Capital Expenditures	(801		)	(345		)	(150		)
Purchase of Company Owned Life Insurance	(9,180		)	(2,398		)	(2,328		)
Investment in Affiliate	(40,000		)	(65,000		)	—
Net Cash Used in Investing Activities	(66,077		)	(35,443		)	(121,280		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Long Term Debt	50,000			—			50,000
Principal Repayments of Long Term Debt	(16,000		)	—			(114,000		)
Payments for Issuance of Long Term Debt	(12,174		)	(84		)	(55		)
Net Borrowings from (Repayments of) Short-Term Credit Facilities	102,600			(105,500		)	153,000
Dividends on Common Stock	(87,308		)	(82,380		)	(70,158		)
Net Settlement of Restricted Stock (See Note 1)	(751		)	(387		)	(333		)
Proceeds from Sale of Common Stock	—			214,426			63,192
Net Cash Provided by Financing Activities	36,367			26,075			81,646
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash	(12,371		)	11,139			(708		)
Cash, Cash Equivalents and Restricted Cash at Beginning of Year	12,847			1,708			2,416
Cash, Cash Equivalents and Restricted Cash at End of Year	$	476		$	12,847		$	1,708

SCHEDULE I - SOUTH JERSEY INDUSTRIES, INC.

CONDENSED BALANCE SHEETS (In Thousands)

	2017			2016
Assets
Property Plant and Equipment:
Nonutility Property, Plant and Equipment, at cost	$	3,318		$	2,685
Accumulated Depreciation	(2,194		)	(2,026		)
Property, Plant and Equipment - Net	1,124			659
Investments:
Investments in Subsidiaries	1,209,308			1,233,856
Available-for-Sale Securities	36			32
Total Investments	1,209,344			1,233,888
Current Assets:
Cash and Cash Equivalents	476			12,847
Receivable from Associated Companies	636,327			550,227
Accounts Receivable	52			49
Other	5,017			—
Total Current Assets	641,872			563,123
Other Noncurrent Assets	50,735			44,974
Total Assets	$	1,903,075		$	1,842,644
Capitalization and Liabilities
Equity:
Common Stock SJI
Par Value $1.25 a share
Authorized - 120,000,000 shares
Outstanding Shares - 79,549,080 (2017) and 79,478,055 (2016)	$	99,436		$	99,347
Premium on Common Stock	709,658			706,943
Treasury Stock (at par)	(271		)	(266		)
Accumulated Other Comprehensive Loss	(36,765		)	(27,381		)
Retained Earnings	420,351			510,597
Total Equity	1,192,409			1,289,240
Long-Term Debt	364,946			323,971
Current Liabilities:
Notes Payable - Banks	294,400			191,800
Current Portion of Long-Term Debt	—			16,000
Payable to Associated Companies	404			382
Accounts Payable	17,316			211
Other Current Liabilities	7,763			7,707
Total Current Liabilities	319,883			216,100
Other Noncurrent Liabilities	25,837			13,333
Total Capitalization and Liabilities	$	1,903,075		$	1,842,644

Notes to Condensed Financial Statements

1. BASIS OF PRESENTATION:

Pursuant to rules and regulations of the SEC, the parent-company only condensed financial statements of SJI do not reflect all of the information and notes normally included with financial statements prepared in accordance with GAAP in the United States. Therefore, these condensed financial statements should be read in conjunction with the consolidated financial statements and related notes included under Item 8 in this Form 10-K.

Certain reclassifications have been made to SJI's prior period condensed statements of cash flows to conform to the current period presentation. Cash paid by an employer when directly withholding shares for tax-withholding purposes is now classified as a financing activity in the condensed statements of cash flows to conform to ASU 2016-09, which is described under "New Accounting Pronouncements" in Note 1 to the consolidated financial statements. This caused SJI's prior period Cash Flows Provided by Operating Activities to increase by $0.4 million and $0.3 million for 2016 and 2015, respectively, and Net Cash Flows from Financing Activities to decrease by the same amount.

Dividends received from subsidiaries were $20.0 million and $40.8 million for 2017 and 2015, respectively. Dividends were not received from subsidiaries in 2016.

The following table provides a reconciliation between SJI's equity in earnings from its subsidiaries to total income from continuing operations (in thousands):

	Year Ended December 31, 2017			Year Ended December 31, 2016		Year Ended December 31, 2015
Equity in (Losses) Earnings of Subsidiaries	$	(2,793	)	$	119,061	$	105,610
Acquisition Costs, net of tax (A)	(12,031		)	—		—
Impact of Tax Adjustments (B)	11,420			—		—
(Loss) Income From Continuing Operations	$	(3,404	)	$	119,061	$	105,610

(A)    Represents costs incurred on the agreement to acquire the assets of Elizabethtown Gas and Elkton Gas (see Note 1 to the consolidated financial statements).

(B)    Represents one-time tax adjustments, most notably for Tax Reform, which was signed into law in December 2017. See Note 4 to the consolidated financial statements.