DISCONTINUED OPERATIONS AND AFFILIATIONS

12 Months Ended

Dec. 31, 2012

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS AND AFFILATIONS

DISCONTINUED OPERATIONS AND AFFILATIONS:

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.

Summarized operating results of the discontinued operations for the years ended December 31, were (in thousands, except per share amounts):

	2012			2011			2010
Loss before Income Taxes:
Sand Mining	$	(1,396	)	$	(169	)	$	(440	)
Fuel Oil	(401		)	(701		)	(530		)
Income Tax Benefits	629			302			337
Loss from Discontinued Operations — Net	$	(1,168	)	$	(568	)	$	(633	)
Earnings Per Common Share from
Discontinued Operations — Net:
Basic	$	(0.04	)	$	(0.02	)	$	(0.02	)
Diluted	$	(0.04	)	$	(0.02	)	$	(0.03	)

AFFILIATIONS — The following affiliated entities are accounted for under the equity method:

Marina and a joint venture partner formed the following entities in which Marina has a 50% equity interest:

LVE Energy Partners, LLC (LVE), which has entered into a contract to design, build, own and operate a district energy system and central energy center for a planned resort in Las Vegas, Nevada.

Energenic – US, LLC (Energenic), which develops and operates on-site, self-contained, energy-related projects.

In April 2012, Energenic acquired The Energy Network, LLC, a holding company for the Hartford Steam Company, TEN Companies and CNE Power I, LLC, for approximately $50.5 million. In conjunction with the acquisition, Marina made a capital contribution to Energenic of $7.6 million and provided $35.4 million of advances which are expected to be repaid by Energenic when permanent financing is obtained.

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.

During 2012, 2011 and 2010, the Company made investments in, and provided net advances to, unconsolidated affiliates of $94.0 million, $14.6 million and $100.9 million, respectively. The purpose of these investments and advances was to acquire The Energy Network, LLC (discussed above), to cover certain project related costs of LVE (See Note 15), and to develop landfill gas-fired electric production facilities, solar and thermal energy projects.  As of December 31, 2012 and 2011, the outstanding balance on these Notes Receivable – Affiliate was $156.7 million and $114.7 million, respectively. Approximately $99.9 million of these notes are secured by property, plant and equipment of the affiliates, accrue interest at 7.5% and are to be repaid through 2025. The remaining $56.8 million of these notes are unsecured, and are either non-interest bearing or accrue interest at variable rates and are to be repaid when the affiliate secures permanent financing.

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 December 31, 2012, the Company had a net asset of approximately $73.9 million included in Investment in Affiliates and Other Noncurrent Liabilities on the 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 December 31, 2012 is limited to its combined equity contributions and the Notes Receivable-Affiliate in the amount of $233.6 million.

The following tables present summarized financial information of the total balances for all Affiliates (of which, on average, SJI has only a 50% equity interest) accounted for under the equity method (in thousands):

	2012			2011
Current assets		$	57,711		$	26,390
Noncurrent assets		$	759,996		$	625,556
Current liabilities		$	211,628		$	71,375
Noncurrent liabilities		$	460,560		$	540,166

	2012			2011			2010
Revenues		$	148,009		$	95,647		$	75,476
Cost of sales		$	71,141		$	64,181		$	52,187
Net Income (loss)		$	5,795		$	1,522		$	(3,536	)