8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 12, 2007

South Jersey Industries, Inc.

(Exact name of registrant as specified in its charter)

New Jersey	1-6364	22-1901645
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer Identification No.)
of incorporation)

1 South Jersey Plaza, Route 54, Folsom, NJ	08037
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:  (609) 561-9000 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[_] Written communications pursuant to Rule 425 under the Securities Act.

[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act.

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

[_] Pre-commencement communications pursuant to Rule 13(3)-4(c) under the Exchange Act.

Item 4.02(a). Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

On February 12, 2007, South Jersey Industries, Inc. (SJI or the Company) determined that it is necessary to amend and restate its consolidated financial statements for each of the years ended December 31, 2004 and 2005 as well as each of the Company’s quarterly reports with respect to 2005 and 2006. Selected financial data for each of the years ended December 31, 2002 through 2005 will likewise be restated with respect to the accounting and disclosures for certain derivative transactions under Statement of Financial Accounting Standards 133 “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133). The Company’s quarterly reports for 2006 will also be restated to appropriately reflect costs incurred during those quarters related to a supply contract. The Audit Committee of the SJI Board of Directors has discussed the restatement with Deloitte & Touche, LLP, which served as the Company’s independent registered public accounting firm for all affected periods. Restated financial information for these periods will be included in the SJI Annual Report on Form 10-K for the year ended December 31, 2006.

The decision to undertake the restatement was announced in a press release on February 13, 2007, which is attached as an exhibit to this Form 8-K. In light of the conclusion to restate the Company’s consolidated financial statements, the Audit Committee has concluded that readers should no longer rely on the Company’s previously filed consolidated financial statements and related independent registered public accounting firm’s reports for each of the years ended December 31, 2004 and 2005, each of the Company’s quarterly reports with respect to 2005 and 2006, and the selected financial data for each of the years ended December 31, 2002 through 2005 as being in compliance with Generally Accepted Accounting Principles (GAAP).

SJI has determined that its documentation for selected cash flow hedge transactions did not meet the requirements of paragraph 28 of SFAS 133. Paragraph 28 states that a forecasted transaction being hedged should be described with sufficient specificity so that when the transaction occurs, it is clear whether that transaction is or is not the hedged transaction. Management has now determined that documentation of these hedges did not contain sufficient specificity to qualify them for hedge accounting treatment.

The primary effect of this change is that any increases or decreases in the fair value of the derivative instruments are included in the calculation of the Company’s net income for the period in which the increases or decreases in fair value occur. Under the previous accounting treatment used by the Company, increases and decreases in fair value of the derivative instruments were initially recorded on the balance sheet under Accumulated Other Comprehensive Income (AOCI) and did not increase or decrease net income until the transaction being hedged affected earnings. While the impact of this change on net income in any reporting period can be significant, there is no change in the overall impact on operating income and net income over the life of a derivative instrument. Moreover, total cash flows from operating activities are the same in any accounting period under either accounting treatment. By recognizing increases and decreases in the fair value of derivative instruments in net income in each period during the existence of the hedge, rather than when the hedge expires and the underlying transaction is completed, the restatement will result in quarterly changes to previously reported AOCI, operating income, income from continuing operations and net income. Due to the change in accounting treatment, SJI will recognize the changes in the fair value of these derivative instruments in accounting periods earlier than those in which the related purchases or sales of the natural gas actually occur.

Management estimates that the cumulative effects of the restatements will significantly increase retained earnings as of September 30, 2006. The Company is in the process of determining the impact on any individual year or quarter being restated. In addition, management estimates that the results of the restatement will significantly increase net income from operations for the year ended December 31, 2006.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

99. South Jersey Industries press release dated February 13, 2007.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

     SOUTH JERSEY INDUSTRIES, INC.

Date: February 14, 2007By: /s/ David A. Kindlick

     David A. Kindlick

          Vice President & Chief Financial Officer

EX-99

February 13, 2007

For Immediate Release

Phone: 609-561-9000

Contact: Stephen Clark x4260

David Kindlick x4244

SJI Announces Reassessment of Accounting Treatment for Derivative Transactions

Financial Results For Prior Periods to be Restated

Restatement Will Not Impact Cash Flows, Liquidity or Financial Condition of SJI

Folsom, NJ - South Jersey Industries (NYSE: SJI) today announced its intention to amend and restate certain prior period financial statements as a result of a reassessment of its accounting treatment related to certain derivative transactions under Statement of Financial Accounting Standards 133 “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”) and for the impact of certain costs of a supply contract. SJI remains confident in its long-term goal of growing earnings per share from continuing operations by an average of at least 6% to 7% annually.

“SJI implemented hedge accounting for energy-related derivatives in 2002, in consultation with our outside auditors, because of our belief that hedge accounting reflects the true economic impact of certain transactions on our financial statements,” stated SJI Chairman and CEO Edward J. Graham. SJI utilizes derivatives to limit market risk associated with its gas marketing activities. “Clearly, we believe that managing the business in this fashion is the right thing to do for our shareholders. SJI has determined that the very technical aspects of SFAS 133 and the evolving judgments surrounding documentation of cash flow hedge accounting requires us to reassess our accounting and recognize gains and losses on certain derivatives in each period during the term of a hedge rather than when settlement of the underlying hedged transactions occur. This has resulted in the need to restate our financial results for certain prior periods,” continued Graham. “However, it is important for me to emphasize that our expectations for SJI’s long-term performance have not changed and that these restatements do not reflect any underlying change in the economic performance of our company,” concluded Graham.

Management estimates that the cumulative effects of the restatements significantly increase retained earnings as of September 30, 2006. The company is in the process of determining the impact on any individual year or quarter. In addition, management estimates that the results of the restatement will significantly increase net income from operations for the year ended December 31, 2006.

- MORE -

SJI Announces Reassessment of Accounting Treatment Add 1

Webcast Details

South Jersey Industries’ Chairman and CEO, Edward J. Graham’s remarks to investors at Wall Street Access’ West Coast Conference in Las Vegas on Wednesday, February 14, 2007 at 3:45pm PST will be made available to investors via a live webcast. Graham will be discussing SJI’s future prospects and will address the contents of this press release. To access the webcast simply visit the South Jersey Industries website at http://www.sjindustries.com , click on Investors and then click on the webcast icon. A recorded version of the webcast will be available at SJI’s website. SJI encourages shareholders, media and members of the financial community to listen to the conference call or webcast.

Forward-Looking Statement

This news release contains forward-looking statements. All statements other than statements of historical fact included in this press release should be considered forward-looking statements made in good faith by the Company and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this press release words such as “anticipate”, “believe”, “expect”, “estimate”, “forecast”, “goal”, “intend”, “objective”, “plan”, “project”, “seek”, “strategy” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. These risks and uncertainties include, but are not limited to, the following: general economic conditions on an international, national, state and local level; weather conditions in our marketing areas; changes in commodity costs; changes in the availability of natural gas; “non-routine” or “extraordinary” disruptions in our distribution system; regulatory, legislative and court decisions; competition; the availability and cost of capital; costs and effects of legal proceedings and environmental liabilities; the failure of customers or suppliers to fulfill their contractual obligations; and changes in business strategies. SJI assumes no duty to update these statements should actual events differ from expectations.

South Jersey Industries (NYSE: SJI) is an energy services holding company for South Jersey Gas, South Jersey Energy Solutions, South Jersey Energy, South Jersey Resources Group, South Jersey Energy Service Plus and Marina Energy. Visit http://www.sjindustries.com for more information about SJI and its subsidiaries.

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