ACCUMULATED OTHER COMPREHENSIVE LOSS

9 Months Ended

Sep. 30, 2019

COMMON STOCK:

The following shares were issued and outstanding for SJI:


			2019
Beginning Balance, January 1			85,506,218
New Issuances During the Period:
Settlement of Equity Forward Sale Agreement			6,779,661
Stock-Based Compensation Plan			106,997
Ending Balance, September 30			92,392,876

The par value ($1.25 per share) of stock issued was recorded in Common Stock and the net excess over par value of approximately $183.4 million was recorded in Premium on Common Stock. The increase is discussed under "Forward Shares" below.

There were 2,339,139 shares of SJG's common stock (par value $2.50 per share) outstanding as of September 30, 2019. SJG did not issue any new shares during the period. SJIU owns all of the outstanding common stock of SJG.

FORWARD SHARES - In the second quarter of 2018, 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. On January 15, 2019, SJI settled its equity forward sale agreement by physically delivering the remaining 6,779,661 shares of common stock and receiving net cash proceeds of approximately $189.0 million. The forward price used to determine cash proceeds received by SJI at settlement was calculated based on the initial forward sale price, as adjusted for underwriting fees, interest rate adjustments as specified in the equity forward agreement and any dividends paid on our common stock during the forward period.

CONVERTIBLE UNITS - In 2018, 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. The net proceeds, after amortization of the underwriting discounts, are recorded as Long-Term Debt on the condensed consolidated balance sheets.

SJI's 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 116,904 for the nine months ended September 30, 2019. For the nine months ended September 30, 2018, incremental shares of 742,313 were not included in the denominator for the diluted EPS calculation because they would have an antidilutive effect on EPS. For the three months ended September 30, 2019 and 2018, incremental shares of 129,979 and 1,245,564, 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 Equity Units discussed above, accounted for under the treasury stock method.

DIVIDENDS PER SHARE — SJI's dividends per share were $0.29 and $0.28 for the three months ended September 30, 2019 and 2018, respectively, and $0.87 and $0.84 for the nine months ended September 30, 2019 and 2018, respectively. Cash dividends were not declared or paid by the Utilities to SJI during the three and nine months ended September 30, 2019 or 2018.

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 2018 or 2019. SJI does not intend to issue equity capital via the DRP in 2019.

Comprehensive Income (Loss) Note

ACCUMULATED OTHER COMPREHENSIVE LOSS:

The following table summarizes the changes in SJI's AOCL for the three and nine months ended September 30, 2019 (in thousands):


	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 July 1, 2019 (a)	$	(25,626)	$	(346)	$	(10)	$	(97)	$	(26,079)
Other comprehensive income before reclassifications	—		—		—		—		—
Amounts reclassified from AOCL (b)	—		9		—		—		9
Net current period other comprehensive income	—		9		—		—		9
Balance at September 30, 2019 (a)	$	(25,626)	$	(337)	$	(10)	$	(97)	$	(26,070)


	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, 2019 (a)	$	(25,626)	$	(362)	$	(10)	$	(97)	$	(26,095)
Other comprehensive income before reclassifications	—		—		—		—		—
Amounts reclassified from AOCL (b)	—		25		—		—		25
Net current period other comprehensive income	—		25		—		—		25
Balance at September 30, 2019 (a)	$	(25,626)	$	(337)	$	(10)	$	(97)	$	(26,070)

(a) Determined using a combined average statutory tax rate of approximately 27%.

(b) See table below.

The following table provides details about reclassifications out of SJI's AOCL for the three and nine months ended September 30, 2019 (in thousands):


Components of AOCL	Amounts Reclassified from AOCL							Affected Line Item in the Condensed Consolidated Statements of Income
			Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges	$	12		$	35		Interest Charges
Income Taxes	(3)			(10)			Income Taxes (a)
Losses from reclassifications for the period net of tax	$	9		$	25

(a) Determined using a combined average statutory tax rate of approximately 27%.

The following table summarizes the changes in SJG's AOCL for the three and nine months ended September 30, 2019 (in thousands):


	Postretirement Liability Adjustment		Unrealized Gain (Loss) on Derivatives-Other		Total
Balance at July 1, 2019 (a)	$	(21,901)	$	(440)	$	(22,341)
Other comprehensive loss before reclassifications	—		—		—
Amounts reclassified from AOCL (b)	—		9		9
Net current period other comprehensive income	—		9		9
Balance at September 30, 2019 (a)	$	(21,901)	$	(431)	$	(22,332)


	Postretirement Liability Adjustment		Unrealized Gain (Loss) on Derivatives-Other		Total
Balance at January 1, 2019 (a)	$	(21,901)	$	(456)	$	(22,357)
Other comprehensive loss before reclassifications	—		—		—
Amounts reclassified from AOCL (b)	—		25		25
Net current period other comprehensive income (loss)	—		25		25
Balance at September 30, 2019 (a)	$	(21,901)	$	(431)	$	(22,332)

(a) Determined using a combined average statutory tax rate of approximately 27%.

(b) See table below.

The reclassifications out of SJG's AOCL during the three and nine months ended September 30, 2019 are as follows (in thousands):


Components of AOCL	Amounts Reclassified from AOCL							Affected Line Item in the Condensed Statements of Income
			Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges	$	12		$	35		Interest Charges
Income Taxes	(3)			(10)			Income Taxes (a)
Losses from reclassifications for the period net of tax	$	9		$	25

(a) Determined using a combined average statutory tax rate of approximately 27%.