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DERIVATIVE INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

As of March 31, 2021, SJI and SJG had outstanding derivative contracts as follows:


	SJI Consolidated	SJG
Derivative contracts intended to limit exposure to market risk to:
Expected future purchases of natural gas (in MMdts)	77.7	13.6
Expected future sales of natural gas (in MMdts)	104.5	0.6



Basis and Index related net purchase contracts (in MMdts)	78.8	12.5

Schedule of notional amounts of outstanding derivative positions

As of March 31, 2021, SJG’s active interest rate swaps were as follows:


Notional Amount		Fixed Interest Rate	Start Date	Maturity
$	12,500,000	3.530%	12/1/2006	2/1/2036
$	12,500,000	3.430%	12/1/2006	2/1/2036

Fair value of derivative instruments

The fair values of all derivative instruments, as reflected in the condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020, are as follows (in thousands):


SJI (includes SJG and all other consolidated subsidiaries):
Derivatives not designated as hedging instruments under GAAP	March 31, 2021				December 31, 2020
	Assets		Liabilities		Assets		Liabilities
Energy-related commodity contracts:
Derivatives - Energy Related - Current	$	38,541	$	21,837	$	41,439	$	27,006
Derivatives - Energy Related - Non-Current	16,084		11,818		6,935		4,947
Interest rate contracts:
Derivatives - Other - Current	—		502		—		659
Derivatives - Other - Noncurrent	—		6,939		—		9,279
Total derivatives not designated as hedging instruments under GAAP	$	54,625	$	41,096	$	48,374	$	41,891

Total Derivatives	$	54,625	$	41,096	$	48,374	$	41,891


SJG:
Derivatives not designated as hedging instruments under GAAP	March 31, 2021				December 31, 2020
	Assets		Liabilities		Assets		Liabilities
Energy-related commodity contracts:
Derivatives – Energy Related – Current	$	4,382	$	352	$	4,053	$	2,868
Derivatives – Energy Related – Non-Current	—		275		87		190
Interest rate contracts:
Derivatives – Other - Current	—		502		—		659
Derivatives – Other - Noncurrent	—		6,939		—		9,279
Total derivatives not designated as hedging instruments under GAAP	$	4,382	$	8,068	$	4,140	$	12,996

Total Derivatives	$	4,382	$	8,068	$	4,140	$	12,996

Offsetting assets

Information related to these offsetting arrangements were as follows (in thousands):


As of March 31, 2021
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/(Received)
SJI (includes SJG and all other consolidated subsidiaries):
Derivatives - Energy Related Assets	$	54,625	$	—	$	54,625	$	(26,491)	(A)	$	(5,163)	$	22,971
Derivatives - Energy Related Liabilities	$	(33,655)	$	—	$	(33,655)	$	26,491	(B)	$	—	$	(7,164)
Derivatives - Other	$	(7,441)	$	—	$	(7,441)	$	—		$	—	$	(7,441)
SJG:
Derivatives - Energy Related Assets	$	4,382	$	—	$	4,382	$	(613)	(A)	$	—	$	3,769
Derivatives - Energy Related Liabilities	$	(627)	$	—	$	(627)	$	613	(B)	$	—	$	(14)
Derivatives - Other	$	(7,441)	$	—	$	(7,441)	$	—		$	—	$	(7,441)


As of December 31, 2020
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/(Received)
SJI (includes SJG and all other consolidated subsidiaries):
Derivatives - Energy Related Assets	$	48,374	$	—	$	48,374	$	(24,027)	(A)	$	—	$	24,347
Derivatives - Energy Related Liabilities	$	(31,953)	$	—	$	(31,953)	$	24,027	(B)	$	2,176	$	(5,750)
Derivatives - Other	$	(9,938)	$	—	$	(9,938)	$	—		$	—	$	(9,938)
SJG:
Derivatives - Energy Related Assets	$	4,140	$	—	$	4,140	$	(716)	(A)	$	—	$	3,424
Derivatives - Energy Related Liabilities	$	(3,058)	$	—	$	(3,058)	$	716	(B)	$	2,176	$	(166)
Derivatives - Other	$	(9,938)	$	—	$	(9,938)	$	—		$	—	$	(9,938)

(A) The balances at March 31, 2021 and December 31, 2020 were related to derivative liabilities which can be net settled against derivative assets.

(B) The balances at March 31, 2021 and December 31, 2020 were related to derivative assets which can be net settled against derivative liabilities.

Offsetting liabilities

Information related to these offsetting arrangements were as follows (in thousands):


As of March 31, 2021
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/(Received)
SJI (includes SJG and all other consolidated subsidiaries):
Derivatives - Energy Related Assets	$	54,625	$	—	$	54,625	$	(26,491)	(A)	$	(5,163)	$	22,971
Derivatives - Energy Related Liabilities	$	(33,655)	$	—	$	(33,655)	$	26,491	(B)	$	—	$	(7,164)
Derivatives - Other	$	(7,441)	$	—	$	(7,441)	$	—		$	—	$	(7,441)
SJG:
Derivatives - Energy Related Assets	$	4,382	$	—	$	4,382	$	(613)	(A)	$	—	$	3,769
Derivatives - Energy Related Liabilities	$	(627)	$	—	$	(627)	$	613	(B)	$	—	$	(14)
Derivatives - Other	$	(7,441)	$	—	$	(7,441)	$	—		$	—	$	(7,441)


As of December 31, 2020
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/(Received)
SJI (includes SJG and all other consolidated subsidiaries):
Derivatives - Energy Related Assets	$	48,374	$	—	$	48,374	$	(24,027)	(A)	$	—	$	24,347
Derivatives - Energy Related Liabilities	$	(31,953)	$	—	$	(31,953)	$	24,027	(B)	$	2,176	$	(5,750)
Derivatives - Other	$	(9,938)	$	—	$	(9,938)	$	—		$	—	$	(9,938)
SJG:
Derivatives - Energy Related Assets	$	4,140	$	—	$	4,140	$	(716)	(A)	$	—	$	3,424
Derivatives - Energy Related Liabilities	$	(3,058)	$	—	$	(3,058)	$	716	(B)	$	2,176	$	(166)
Derivatives - Other	$	(9,938)	$	—	$	(9,938)	$	—		$	—	$	(9,938)

(A) The balances at March 31, 2021 and December 31, 2020 were related to derivative liabilities which can be net settled against derivative assets.

(B) The balances at March 31, 2021 and December 31, 2020 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 are as follows (in thousands):


	Three Months Ended March 31,
Derivatives Previously in Cash Flow Hedging Relationships under GAAP	2021		2020
SJI (includes SJG and all other consolidated subsidiaries):
Interest Rate Contracts:
Losses reclassified from AOCL into income (a)	$	(12)	$	(12)

SJG:
Interest Rate Contracts:
Losses reclassified from AOCL into income (a)	$	(12)	$	(12)

(a) Included in Interest Charges


	Three Months Ended March 31,
Derivatives Not Designated as Hedging Instruments under GAAP	2021		2020
SJI (no balances for SJG; includes all other consolidated subsidiaries):
Losses on energy-related commodity contracts (a)	$	(44)	$	(276)
Losses on interest rate contracts (b)	—		(4,046)

Total	$	(44)	$	(4,322)

(a) Included in Operating Revenues - Nonutility

(b) Included in Interest Charges

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5624163-113959

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+ Details