-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vy8lNOgPuFQ5G3R8dbPlYqzkeuP6Dqim5hRI9BEhpMYHJIkpmXgML061/x+sn/UO zbMJT7KZ/RD90cMNW3jJ1g== 0000091928-99-000007.txt : 19991117 0000091928-99-000007.hdr.sgml : 19991117 ACCESSION NUMBER: 0000091928-99-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTH JERSEY INDUSTRIES INC CENTRAL INDEX KEY: 0000091928 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 221901645 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06364 FILM NUMBER: 99752547 BUSINESS ADDRESS: STREET 1: 1 SO JERSEY PLZ STREET 2: RTE 54 CITY: FOLSOM STATE: NJ ZIP: 08037 BUSINESS PHONE: 6095619000 MAIL ADDRESS: STREET 1: 1 SO JERSEY PLZ STREET 2: RTE 54 CITY: FOLSOM STATE: NJ ZIP: 08037 FORMER COMPANY: FORMER CONFORMED NAME: SOUTH JERSEY GAS CO DATE OF NAME CHANGE: 19700507 FORMER COMPANY: FORMER CONFORMED NAME: ATLANTIC CITY GAS CO DATE OF NAME CHANGE: 19680301 10-Q 1 Page 1 of 28 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended September 30, 1999 Commission File Number 1-6364 SOUTH JERSEY INDUSTRIES, INC. (Exact name of registrant as specified in its charter) New Jersey 22-1901645 (State of incorporation) (IRS employer identification no.) 1 South Jersey Plaza, Folsom, NJ 08037 (Address of principal executive offices, including zip code) (609) 561-9000 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of November 5, 1999, there were 11,150,336 shares of the registrant's common stock outstanding. Exhibit Index on page 28 - Title Page - PART I -- FINANCIAL INFORMATION Item 1. Financial Statements -- See Pages 3 through 14 SJI-2 SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED) (In Thousands Except for Per Share Data)
Three Months Ended September 30, ---------------------- 1999 1998 ---------- ---------- Operating Revenues: Utility $49,287 $43,432 Nonutility 9,878 88,067 ---------- ---------- Total Operating Revenues 59,165 131,499 ---------- ---------- Operating Expenses: Gas Purchased for Resale 32,421 26,220 Utility Operations 9,861 10,625 Nonutility Operations 10,028 86,469 Maintenance 1,289 1,120 Depreciation 4,781 4,324 Income Taxes (2,544) (1,697) Other Taxes 1,531 1,603 ---------- ---------- Total Operating Expenses 57,367 128,664 ---------- ---------- Operating Income 1,798 2,835 Interest Charges: Long-Term Debt 3,802 3,646 Short-Term Debt and Other 1,381 1,392 ---------- ---------- Total Interest Charges 5,183 5,038 ---------- ---------- Preferred Dividend Requirements of Subsidiary 769 771 ---------- ---------- Loss from Continuing Operations (4,154) (2,974) Loss from Discontinued Operations - Net (37) (91) ---------- ---------- Net Loss Applicable to Common Stock ($4,191) ($3,065) ========== ========== Average Shares of Common Stock Outstanding 10,975 10,776 ========== ========== Earnings Per Common Share: Continuing Operations ($0.38) ($0.27) Discontinued Operations - Net 0.00 (0.01) ---------- ---------- Earnings Per Common Share ($0.38) ($0.28) ========== ========== Dividends Declared Per Common Share $0.36 $0.36 ========== ========== The accompanying footnotes are an integral part of the financial statements.
SJI-3 SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED) (In Thousands Except for Per Share Data)
Nine Months Ended September 30, ---------------------- 1999 1998 ---------- ---------- Operating Revenues: Utility $249,878 $203,865 Nonutility 32,716 122,145 ---------- ---------- Total Operating Revenues 282,594 326,010 ---------- ---------- Operating Expenses: Gas Purchased for Resale 153,146 117,528 Utility Operations 29,539 31,033 Nonutility Operations 32,182 121,712 Maintenance 3,890 3,991 Depreciation 14,102 12,757 Income Taxes 10,627 7,277 Other Taxes 7,900 7,566 ---------- ---------- Total Operating Expenses 251,386 301,864 ---------- ---------- Operating Income 31,208 24,146 Interest Charges: Long-Term Debt 11,826 11,210 Short-Term Debt and Other 3,322 2,792 ---------- ---------- Total Interest Charges 15,148 14,002 ---------- ---------- Preferred Dividend Requirements of Subsidiary 2,313 2,317 ---------- ---------- Income from Continuing Operations 13,747 7,827 Loss from Discontinued Operations - Net (160) (2,686) ---------- ---------- Net Income Applicable to Common Stock $13,587 $5,141 ========== ========== Average Shares of Common Stock Outstanding 10,846 10,775 ========== ========== Earnings Per Common Share: Continuing Operations $1.27 $0.73 Discontinued Operations - Net (0.02) (0.25) ---------- ---------- Earnings Per Common Share $1.25 $0.48 ========== ========== Dividends Declared Per Common Share $1.08 $1.08 ========== ========== The accompanying footnotes are an integral part of the financial statements.
SJI-4 SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands)
(Unaudited) September 30, December 31, ---------------------- ------------- 1999 1998 1998 ---------- ---------- ------------- Assets - ------ Property, Plant and Equipment: Utility Plant, at original cost $713,117 $656,830 $681,848 Accumulated Depreciation (188,898) (176,367) (179,605) Nonutility Property and Equipment, at cost 3,118 2,988 2,981 Accumulated Depreciation (906) (968) (965) ---------- ---------- ------------- Property, Plant and Equipment - Net 526,431 482,483 504,259 ---------- ---------- ------------- Investments: Available-for-Sale Securities 1,392 711 931 Investment in Affiliate 2,087 1,253 1,440 ---------- ---------- ------------- Total Investments 3,479 1,964 2,371 ---------- ---------- ------------- Current Assets: Cash and Cash Equivalents 3,060 5,584 5,991 Notes Receivable - Affiliate 4,550 4,350 4,350 Accounts Receivable 24,975 23,468 42,600 Unbilled Revenues 5,112 4,163 19,489 Provision for Uncollectibles (1,187) (1,234) (1,283) Natural Gas in Storage, average cost 30,662 28,195 27,619 Materials and Supplies, average cost 4,006 3,973 4,051 Prepaid Taxes 8,845 13,599 13,850 Prepayments and Other Current Assets 4,272 3,654 3,419 ---------- ---------- ------------- Total Current Assets 84,295 85,752 120,086 ---------- ---------- ------------- Accounts Receivable - Merchandise 1,133 1,687 1,554 ---------- ---------- ------------- Regulatory and Other Non-Current Assets: Environmental Remediation Costs: Expended - Net 25,818 23,177 27,500 Liability for Future Expenditures 52,939 50,697 52,939 Gross Receipts & Franchise Taxes 3,252 3,696 3,585 Income Taxes - Flowthrough Depreciation 11,775 13,265 13,021 Deferred Fuel Costs - Net 7,953 2,723 5,509 Deferred Postretirement Benefit Costs 5,050 5,679 5,522 Other 8,019 7,707 11,749 ---------- ---------- ------------- Total Regulatory and Other Non-Current Assets 114,806 106,944 119,825 ---------- ---------- ------------- Total Assets $730,144 $678,830 $748,095 ========== ========== ============= The accompanying footnotes are an integral part of the financial statements.
SJI-5 SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands)
(Unaudited) September 30, December 31, ---------------------- ------------- 1999 1998 1998 ---------- ---------- ------------- Capitalization and Liabilities - ------------------------------ Common Equity: Common Stock $13,937 $13,472 $13,474 Premium on Common Stock 120,938 111,234 111,253 Capital Stock Expense (51) - - Retained Earnings 46,381 42,542 44,507 ---------- ---------- ------------- Total Common Equity 181,205 167,248 169,234 ---------- ---------- ------------- Preferred Stock and Securities of Subsidiary: Redeemable Cumulative Preferred Stock: South Jersey Gas Company, Par Value $100 per share Authorized - 45,504, 46,404 and 46,404 shares Outstanding Shares: Series A, 4.70% -- 1,200, 2,100 and 2,100 shares 120 210 210 Series B, 8.00% -- 19,242 shares 1,924 1,924 1,924 Company-Guaranteed Manditorily Redeemable Preferred Securities of Subsidiary Trust: Par Value $25 per share, 1,400,000 shares Authorized and Outstanding 35,000 35,000 35,000 ---------- ---------- ------------- Total Preferred Stock and Securities of Subsidiary 37,044 37,134 37,134 ---------- ---------- ------------- Long-Term Debt 185,704 166,853 194,710 ---------- ---------- ------------- Total Capitalization 403,953 371,235 401,078 ---------- ---------- ------------- Current Liabilities: Notes Payable 95,375 94,800 97,000 Current Maturities of Long-Term Debt 8,876 8,876 8,876 Accounts Payable 39,332 30,293 51,960 Customer Deposits 5,305 5,552 5,576 Environmental Remediation Costs 10,110 18,644 9,668 Taxes Accrued 1,424 1,175 1,531 Interest Accrued and Other Current Liabilities 8,343 9,542 14,010 ---------- ---------- ------------- Total Current Liabilities 168,765 168,882 188,621 ---------- ---------- ------------- Deferred Credits and Other Non-Current Liabilities: Deferred Income Taxes - Net 84,521 77,859 84,827 Investment Tax Credits 4,946 5,335 5,239 Pension and Other Postretirement Benefits 14,413 12,281 14,227 Environmental Remediation Costs 47,263 36,949 47,925 Other 6,283 6,289 6,178 ---------- ---------- ------------- Total Deferred Credits and Other Non-Current Liabilities 157,426 138,713 158,396 ---------- ---------- ------------- Commitments and Contingencies Total Capitalization and Liabilities $730,144 $678,830 $748,095 ========== ========== ============= The accompanying footnotes are an integral part of the financial statements.
SJI-6 SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED) (In Thousands)
Nine Months Ended September 30, ----------------------- 1999 1998 ---------- ---------- Cash Flows from Operating Activities: Net Income Applicable to Common Stock $13,587 $5,141 Adjustments to Reconcile Net Income to Cash Flows Provided by Operating Activities: Depreciation and Amortization 16,256 14,247 Provision for Losses on Accounts Receivable 678 950 Revenues and Fuel Costs Deferred - Net (2,444) 284 Loss on Disposal of Property - 26 Deferred and Non-Current Income Taxes and Credits - Net 291 3,160 Environmental Remediation Costs - Net 1,462 (1,195) Changes in: Accounts Receivable 31,228 24,333 Inventories (2,998) (3,782) Prepayments and Other Current Assets (888) (270) Prepaid and Accrued Taxes - Net 4,898 (13,212) Accounts Payable and Other Accrued Liabilities (18,566) (21,633) Other - Net 4,158 (2,021) ---------- ---------- Net Cash Provided by Operating Activities 47,662 6,028 ---------- ---------- Cash Flows from Investing Activities: Investment in Affiliate (647) (404) (Loan to) Repayment of Affiliate (200) 211 Proceeds from the Sale of Assets - Net - 2 Purchase of Available-for-Sale Securities (461) (669) Capital Expenditures, Cost of Removal and Salvage (36,899) (39,596) ---------- ---------- Net Cash Used in Investing Activities (38,207) (40,456) ---------- ---------- Cash Flows from Financing Activities: Net (Repayments of) Borrowings from Lines of Credit (1,625) 48,900 Principal Repayments of Long-Term Debt (9,006) (9,625) Dividends on Common Stock (11,713) (11,637) Proceeds from Sale of Common Stock 10,048 160 Repurchase of Preferred Stock (90) (90) Payments for Issuance of Long-Term Debt and Preferred Securities - (138) ---------- ---------- Net Cash (Used in) Provided by Financing Activities (12,386) 27,570 ---------- ---------- Net Decrease in Cash and Cash Equivalents (2,931) (6,858) Cash and Cash Equivalents at Beginning of Period 5,991 12,442 ---------- ---------- Cash and Cash Equivalents at End of Period $3,060 $5,584 ========== ========== The accompanying footnotes are an integral part of the financial statements.
SJI-7 Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1. Significant Accounting Practices: Consolidation - The consolidated financial statements include the accounts of South Jersey Industries, Inc. (SJI) and its subsidiaries. All significant intercompany accounts and transactions were eliminated. SJI reclassified some previously reported amounts to conform with current year classifications. In the company's opinion, the condensed consolidated financial statements reflect all adjustments needed to fairly present SJI's financial position and operating results at the dates and for the periods presented. SJI's businesses are subject to seasonal fluctuations and, accordingly, this interim financial information should not be the basis for estimating the full year's operating results. Estimates and Assumptions - Our financial statements are prepared to conform with generally accepted accounting principles. Management makes estimates and assumptions that affect the amounts reported in the financial statements and related disclosures. Therefore, actual results could differ from those estimates. New Accounting Pronouncement - In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities," which is effective for our fiscal year ending December 31, 2001. This statement establishes accounting and reporting standards for derivative instruments, including those embedded in other contracts, and for hedging activities. It requires recognizing derivatives as assets or liabilities at fair value on the balance sheet. We are currently evaluating the effects of FASB No. 133 on SJI's financial condition and results of operations, which will vary based on our use of derivative instruments at the time of adoption. Note 2. Discontinued Operations and Affiliations: Discontinued Operations - Summarized operating results of the discontinued operations were (in thousands): Three Months Ended Nine Months Ended September 30, September 30, --------------- ---------------- 1999 1998 1999 1998 ------ ------ ------ ------- Loss before Income Taxes: Sand Mining $ (40) $ (51) $ (181) $(3,566) Construction (3) (77) (27) (530) Fuel Oil (17) (12) (55) (36) Income Tax Credits 23 49 103 1,446 ------ ------ ------ ------- Loss from Discontinued Operations - Net $ (37) $ (91) $ (160) $(2,686) ====== ====== ====== ======= Earnings per Common Share from Discontinued Operations $ 0.00 $(0.01) $(0.02) $(0.25) ====== ====== ====== ====== SJI-8 Affiliations - In April 1999, South Jersey Energy Company, Inc. (SJE, a wholly-owned subsidiary of SJI) and Energy East Solutions, Inc. (a subsidiary of Energy East Corporation) formed South Jersey Energy Solutions, LLC, a jointly-owned limited liability company (LLC) to market retail electricity and energy management services. The LLC is intended to create significant efficiencies and expand service capabilities for both companies upon the completion of proceedings to implement the electric utility restructuring legislation. Note 3. Common Stock: SJI has 20,000,000 shares of authorized Common Stock. The following shares were issued and outstanding: 1999 1998 ---------- ---------- Beginning Balance, January 1 10,778,990 10,771,413 New Issues During Period: Dividend Reinvestment and Stock Purchase Plan 366,610 - Employees' Stock Ownership Plan 4,144 3,875 Stock Option & Stock Appreciation Rights Plan 31 1,952 ---------- ---------- Ending Balance, September 30 11,149,775 10,777,240 ========== ========== The par value ($1.25 per share) of stock issued in 1999 and 1998 was credited to Common Stock. Net excess over par value of $9,685,618 and $238,072 respectively, was credited to Premium on Common Stock for the nine months ended September 30, 1999 and 1998, respectively. Stock Option and Stock Appreciation Rights Plan - Under this plan, not more than 306,000 shares in the aggregate may be issued to SJI's officers and other key employees. No options or stock appreciation rights may be granted under the Plan after January 23, 2007. At September 30, 1999 and 1998, SJI had 4,500 and 5,000 options outstanding, respectively, all exercisable at prices from $17.89 to $24.69 per share. During the nine months ended September 30, 1999 and 1998, 500 and 8,060 options were surrendered for the issuance of 31 and 1,952 shares, respectively. No options were granted in 1999 and 1998. No stock appreciation rights were issued under the Plan. Stock options outstanding at September 30, 1999 and 1998, had no effect on EPS. Dividend Reinvestment and Stock Purchase Plan (DRP) and Employees' Stock Ownership Plan (ESOP) - Effective June 1999, newly issued shares of common stock offered through the DRP are issued directly by SJI. All shares offered through the ESOP continue to be issued directly by SJI. As of September 30, 1999, SJI reserved 695,473 and 27,352 shares of authorized, but unissued, common stock for future issuance to the DRP and ESOP, respectively. SJI-9 Note 4. Income Taxes: The significant components of federal and state income taxes reflected in the condensed statements of consolidated income are as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, ----------------- ---------------- 1999 1998 1999 1998 ------- ------- ------- ------- Current: Federal $(2,147) $ 533 $ 7,237 $ 2,448 State (494) (300) 3,099 1,669 ------- ------- ------- ------- Total Current (2,641) 233 10,336 4,117 Deferred: Federal 326 (1,721) 977 3,059 State (131) (110) (393) 398 ------- ------- ------- ------- Total Deferred 195 (1,831) 584 3,457 Investment Tax Credit (98) (99) (293) (297) ------- ------- ------- ------- Income Taxes as reported on the Condensed Statements of Consolidated Income (2,544) (1,697) 10,627 7,277 Tax Associated with Discontinued Operations (23) (49) (103) (1,446) ------- ------- ------- ------- Net Income Taxes $(2,567) $(1,746) $10,524 $ 5,831 ======= ======= ======= ======= Note 5. Recent Regulatory Actions: SJG began a pilot program in April 1997, giving residential customers a choice of gas supplier. During the initial enrollment period in 1997, nearly 13,000 residential customers applied for and received this service. The BPU subsequently expanded the number of potential participants to 50,000 and, as of September 30, 1999, enrollment totaled 28,623. In January 2000, all of SJG's customers will become eligible to choose a gas supplier. Participants' bills are reduced for cost of gas charges and applicable taxes. The resulting decrease in revenues is offset by a corresponding decrease in gas costs and taxes under SJG's BPU-approved fuel clause. While the program reduces utility revenues, it does not affect SJG's net income, financial condition or margins. In September 1998, SJG filed its annual LGAC, TAC and DSMC with the BPU. The LGAC and DSMC cover the period November 1 through October 31 of each year. The TAC period runs from October 1 through May 31. On May 12, 1999, the BPU approved a $7.1 million increase in rates as part of the current filing, which SJI-10 included the results of the previous two annual filings. We are currently in the process of preparing the 1999 annual filing which should be filed with the BPU during the fourth quarter. In April 1999, the BPU approved new hourly appliance service rates which SJG implemented in that same month. On June 30, 1999, SJG filed a proposal to implement several new service contract plans and to expand its existing service contract plans to include appliances not presently covered. Subsequently, SJG increased the price of its existing service contract plans effective August 1, 1999. The new rates and plans are competitive with those of other service providers in New Jersey and are designed to increase earnings and cash flows. In August 1998, SJG filed with the BPU to recover increased remediation costs expended from August 1995 through July 1998. On September 30, 1999, the BPU approved the filed annual recovery level of $6.5 million. This represents an annual increase of approximately $4.5 million over the recovery previously included in rates. In July 1999, SJG filed its annual RAC with the BPU proposing no change in the current level of recovery. This filing is still pending at the BPU. Note 6. Segments of Business: Information about SJI's operations in different industry segments is presented below (in thousands): Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 1999 1998 1999 1998 -------- -------- -------- -------- Operating Revenues: Gas Utility Operations $ 51,694 $ 43,480 $253,425 $204,221 Other Industries 11,654 88,329 35,138 122,848 -------- -------- -------- -------- Subtotal 63,348 131,809 288,563 327,069 Intersegment Sales (4,183) (310) (5,969) (1,059) -------- -------- -------- -------- Total Operating Revenues $ 59,165 $131,499 $282,594 $326,010 ======== ======== ======== ======== The decrease in operating revenues from Other Industries is due primarily to SJE's wholesale electricity sales which began and ended in 1998. Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 1999 1998 1999 1998 -------- -------- -------- -------- Operating Income: Gas Utility Operations $ (2,104) $ (414) $ 39,770 $ 31,152 Other Industries 134 1,955 1,482 1,655 -------- -------- -------- -------- Subtotal (1,970) 1,541 41,252 32,807 SJI-11 Income Taxes 2,544 1,697 (10,627) (7,276) General Corporate 1,224 (403) 583 (1,385) -------- -------- -------- -------- Total Operating Income $ 1,798 $ 2,835 $ 31,208 $ 24,146 ======== ======== ======== ======== Depreciation and Amortization: Gas Utility Operations $ 5,454 $ 4,823 $ 16,194 $ 14,211 Other Industries 18 7 39 19 Discontinued Operations 8 6 23 17 -------- -------- -------- -------- Total $ 5,480 $ 4,836 $ 16,256 $ 14,247 ======== ======== ======== ======== Property Additions: Gas Utility Operations $ 10,958 $ 13,625 $ 35,992 $ 38,879 Other Industries 181 8 229 78 -------- -------- -------- -------- Total $ 11,139 $ 13,633 $ 36,221 $ 38,957 ======== ======== ======== ======== Identifiable Assets: Gas Utility Operations $712,814 $653,019 Other Industries 13,316 20,357 Discontinued Operations 2,376 1,690 -------- -------- Subtotal 728,506 675,066 Corporate Assets 14,090 23,577 Intersegment Assets (12,452) (19,813) -------- -------- Total Assets $730,144 $678,830 ======== ======== SJI's interest expense relates primarily to SJG's borrowing and financing activities. Interest income is essentially derived from borrowings between the subsidiaries and is eliminated during consolidation. These amounts are included in our condensed statements of consolidated income and not shown above. Gas Utility Operations consist primarily of natural gas distribution to residential, commercial and industrial customers. Other Industries include the natural gas and electric acquisition and transportation service companies. Total Operating Revenues by industry segment include both sales to unaffiliated customers, as reported in SJI's condensed statements of consolidated income, and intercompany sales, which are accounted for at the fair market value of the goods or services rendered. Operating Income is total revenues less operating expenses, income taxes and general corporate expenses, as shown on the condensed statements of consolidated income. SJI-12 Identifiable Assets are those used in each segment of SJI's operations. Corporate assets are principally cash and cash equivalents, land, buildings and equipment held for corporate use. Note 7. Retained Earnings: Restrictions exist under various loan agreements regarding the amount of cash dividends or other distributions that we may pay on SJG's common stock. SJI's total equity in its subsidiaries' retained earnings, which is free of these restrictions, was approximately $44.6 million as of September 30, 1999. Note 8. Commitments and Contingencies: Construction Commitments - SJI's estimated cost of construction and environmental remediation programs for 1999 totals $54.6 million. Commitments were made regarding these programs. Pending Litigation - SJI is subject to claims arising in the ordinary course of business and other legal proceedings. We set up reserves when these claims become apparent. We also maintain insurance and record probable insurance recoveries relating to outstanding claims. Environmental Remediation Costs - SJI incurred and recorded costs for environmental clean up of sites where SJG or its predecessors operated gas manufacturing plants. SJG stopped manufacturing gas over 35 years ago. SJI and some of its nonutility subsidiaries also recorded costs for environmental clean up of sites where South Jersey Fuel Company (SJF) previously operated a fuel oil business and Morie maintained equipment, fueling stations and storage. Since the early 1980s, SJI recorded environmental remediation costs of $117.2 million, of which $59.8 million was spent as of September 30, 1999. With the assistance of an outside consulting firm, we estimate that future costs to clean up SJG's sites will range from $52.9 million to $160.3 million. We recorded the lower end of this range as a liability. It is reflected on the 1999 condensed consolidated balance sheet under the captions Current Liabilities and Deferred Credits and Other Non-Current Liabilities. SJG did not adjust the accrued liability for future insurance recoveries, which management is pursuing. We use insurance proceeds to offset related legal fees and to reduce the balance of deferred environmental remediation costs. Recorded amounts include estimated costs based on projected investigation and remediation work plans using existing technologies. Actual costs could differ from the estimates due to the long-term nature of the projects, changing technology, government regulations and site specific requirements. The major portion of recorded environmental costs relate to the cleanup of SJG's former gas manufacturing sites. SJG recorded $110.5 million for the remediation of these sites and spent $57.6 million through September 30, 1999. SJI-13 SJG has two regulatory assets associated with environmental cost. The first regulatory asset is titled Environmental Remediation Cost: Expended - Net. These expenditures represent what was actually spent to clean up former gas manufacturing plant sites. These costs meet the requirements of FASB Statement No. 71, "Accounting for the Effects of Certain Types of Regulation." The BPU allowed SJG to recover expenditures through July 1998 and petitions to recover costs through July 1999 are pending. The other regulatory asset titled Environmental Remediation Cost: Liability for Future Expenditures relates to estimated future expenditures determined under the guidance of FASB Statement No. 5, "Accounting for Contingencies." This amount, which relates to former manufactured gas plant sites, was recorded as a deferred debit with the corresponding amount reflected on the condensed consolidated balance sheet under the captions, Current Liabilities and Deferred Credits and Other Non-Current Liabilities. The deferred debit is a regulatory asset under FASB No. 71. The BPU's intent, evidenced by current practice, is to allow SJG to recover the deferred costs after they are spent. SJG files with the BPU to recover these costs in rates through its RAC. The BPU has consistently allowed the full recovery over 7-year periods, and SJG believes this will continue. As of September 30, 1999, SJG's unamortized remediation costs of $25.8 million are reflected on the condensed consolidated balance sheet under the caption Regulatory and Other Non-Current Assets. Since BPU approval of the RAC in 1992, SJG recovered $20.6 million through rates as of September 30, 1999. With Morie's sale, Energy & Minerals, Inc. (EMI) assumed responsibility for environmental liabilities which we estimate to range between $3.1 million and $9.7 million. The information available on these sites is sufficient only to establish a range of probable liability, and no point within the range is more likely than any other. Therefore, EMI continues to accrue the lower end of the range. Changes in the accrual are included in the condensed statements of consolidated income under the caption, Loss from Discontinued Operations - Net. SJI and SJF estimated their potential exposure for the future remediation of four sites where fuel oil operations existed years ago. Estimates for SJI's site range between $0.3 million and $0.9 million, while SJF's estimated liability ranges from $1.3 million to $4.8 million for its three sites. The lower ends of these ranges were recorded and are reflected on the condensed consolidated balance sheet under Current Liabilities and Deferred Credits and Other Non-Current Liabilities as of September 30, 1999. SJI-14 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition Overview South Jersey Industries, Inc. (SJI) has two operating subsidiaries, South Jersey Gas Company (SJG) and South Jersey Energy Company (SJE). SJG is a regulated natural gas distribution company serving 270,692 customers at September 30, 1999, compared with 263,883 customers at September 30, 1998. SJG also makes off-system sales of natural gas on a wholesale basis to various customers on the interstate pipeline system and transports natural gas purchased directly from producers or suppliers for our own sales and for some of our customers. SJE provides services for the acquisition and transportation of natural gas for retail end users and markets total energy management services. SJE also markets an air quality monitoring system that provides around-the-clock, real time monitoring for airborne substances around a site or facility. In 1998, SJE bought and sold electricity in the wholesale market. However, as a result of an alliance with Energy East Solutions, Inc. (EES, a subsidiary of Energy East Corporation), SJE ceased buying and selling wholesale electricity. SJE began marketing retail electricity in New Jersey in November 1999 through a limited liability company, jointly owned with EES. SJE has one operating subsidiary, SJ EnerTrade (EnerTrade). EnerTrade, formed in October 1997, provides services for the sale of natural gas to energy marketers, electric and gas utilities, and other wholesale users in the mid-Atlantic and southern regions of the country. Forward Looking Statements This report contains certain forward-looking statements concerning projected future financial performance, future operating performance, future plans and courses of action and future economic conditions. All statements in this report other than statements of historical fact are forward-looking statements. These forward-looking statements are made based upon management's expectations and beliefs concerning future events impacting the company and involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and actual results could differ materially from those expressed or implied in the forward-looking statements. A number of factors could cause our actual results to differ materially from those anticipated, including, but not limited to the following: general economic conditions on an international, federal, state and local level; weather conditions in the company's marketing areas; regulatory and court decisions; competition in the company's regulated and deregulated activities; the availability and cost of capital; the company's ability to maintain existing and/or establish successful new alliances and joint ventures to take advantage of marketing opportunities; costs and effects of unanticipated legal proceedings, environmental liabilities and Year 2000 related costs or operating problems; and changes in business strategies. SJI-15 Pilot Program - Choice of Gas Supplier SJG operates a New Jersey Board of Public Utilities (BPU) approved pilot program giving residential customers a choice of gas supplier. Currently the program is open to 50,000 potential participants and, as of September 30, 1999, enrollment totaled 28,623. In January 2000, all of SJG's customers will become eligible to choose a gas supplier. Participants' bills are reduced for cost of gas charges and applicable taxes. The resulting decrease in SJG's revenues is offset by a corresponding decrease in gas costs and taxes under a BPU-approved fuel clause. While the program reduces utility revenues, it does not affect SJG's net income, financial condition or margins. Energy Adjustment Clauses In 1998, the BPU approved a revised Temperature Adjustment Clause (TAC) for SJG, effective October 1998. TAC adjustments had the following impacts on 1999 and 1998 third quarter and nine month net earnings: 1999 1998 ------ ------ TAC Adjustment Increase to Net Income ($ in thousands) Quarter Ended 9/30 $0 $0 Nine Months Ended 9/30 $1,232 $247 While the revenue and income impacts of TAC adjustments are recorded as incurred, cash inflows or outflows directly attributable to TAC adjustments do not begin until the next TAC year. Each TAC year begins October 1. Status of Year 2000 Conversion State of Readiness We prepared a Year 2000 Impact and Assessment Study and developed a detailed plan to enable SJI to be ready for year 2000. Ready means that mission critical software, hardware, devices, systems, facilities and business relationships are prepared to operate satisfactorily through the end of 1999 and beyond. SJI revised 100% of affected programming code as of June 1, 1999. We believe that 98% of all, and 100% of our mission critical, embedded technology is Y2K ready. We have tested all revisions on an as completed basis and will continue to test through the end of this year. SJI-16 As of November 12, 1999, SJG's SCADA software, which monitors natural gas flow throughout our distribution system, was replaced with an updated, Y2K ready version. SJG's gas distribution system is designed to provide uninterrupted gas flow and has regularly tested back-up procedures in place to ensure gas flow in the event of hardware, software, electrical or SCADA failures. This function had previously been identified in the June 1999 Form 10-Q as not being Y2K ready. In June 1998, all vendors were notified by letter requesting verification of their Y2K readiness. Since then, follow-up requests for information have been made on an on going basis to those vendors who did not reply. A current analysis of this process indicates that 73% of all product and service vendors and 100% of our mission critical vendors have responded and are Y2K ready. A review of the vendors that have not replied has been conducted to assess the impact that the potential loss of their products and services will have on the company's supply chain and our ability to conduct business after January 1, 2000. Based upon this review and verification from our critical suppliers regarding their Y2K readiness, we believe that there will be no disruptions in SJI's supply chain on or after January 1, 2000 which will impede our ability to conduct business as usual. Year 2000 Costs We project Y2K costs to total $0.54 million, with $0.44 million having been spent through September 30, 1999. Year 2000 Risks and Contingency Plans The worst case scenario that concerns us the most is a temporary disruption of service to our gas customers. As a contingency, our gas distribution system can be operated manually. We have received assurances from our two direct connect gas supply pipelines that they are Y2K ready. We are seeking assurances from the companies that supply gas to our system that they will be Y2K ready. We have prepared contingency plans for use in the event that they are not ready. We continually update our contingency plans to address potential Y2K related problems. All contingency plans for high priority items such as service continuation, safety and revenues have been completed. Y2K Summary If some key systems and devices are not ready for the Year 2000, in particular at pipeline, telecommunication, electricity or banking service vendors, there will likely be adverse effects on the company's business, results of operations and financial condition. While unexpected Y2K problems can occur, we do not anticipate any material difficulty in achieving Y2K readiness based upon the nature of SJI's operating and information systems and the state of planning and remediation. Any problems that arise within the company should be immaterial to our financial position or operating results. SJI-17 Results of Operations - Three and Nine Months Ended September 30, 1999 Compared to Three and Nine Months Ended September 30, 1998 Operating Revenues - Utility Revenues increased $5.9 million in the third quarter and $46.0 million in the first nine months of 1999 compared with the prior year periods. The primary reasons for the increases were increased off-system sales and 6,809 additional customers at SJG. Nine month results also benefited significantly from the revised TAC. These factors more than offset revenue reductions due to the continued migration of firm gas sales to firm transportation. Note, however, that SJG's tariffs are structured so that profits are derived from the transportation of gas, not the sale of the commodity. Consequently, the switch to firm transportation reduced revenues but did not impact profitability. Weather in the third quarter and first nine months of 1999 was 65.0% and 14.5% colder, respectively, than the prior year periods. Weather was 29.8% colder and 3.42% warmer for the third quarter and first nine months, respectively, than the 20-year average. Previously, changes in temperatures were typically the single most important factor in explaining revenue fluctuations for comparative periods in SJI's utility operations. Revisions to SJG's TAC that became effective in October 1998 significantly reduced the weather related volatility in SJI's utility revenues. However, comparisons for the first two quarters of 1999 to the prior year periods continued to show volatility as 1998 revenues were heavily influenced by weather. Weather experienced during the third quarter of the year historically has had a minimal impact on SJG's earnings as heating requirements are at their seasonal low point during July, August and September in our service territory. Revenues for 1999 will be closely tied to the 20-year normal temperatures and not actual weather conditions. The following is a comparison of operating revenue and throughput for the three and nine month periods ended September 30, 1999 vs. the same periods ended September 30, 1998. SJI-18 3rd Quarter Year to Date ---------------- ------------------ 1999 1998 1999 1998 ------- ------- -------- -------- Operating Revenues (Thousands): Firm Residential $12,986 $14,834 $110,547 $102,180 Commercial 3,306 4,126 24,508 25,942 Industrial 921 523 3,645 3,072 Cogeneration & Electric Generation 4,259 3,815 7,062 7,234 Firm Transportation 5,209 4,428 22,171 16,736 ------- ------- -------- -------- Total Firm Operating Revenues 26,681 27,726 167,933 155,164 Interruptible 277 373 1,270 2,024 Interruptible Transportation 305 518 1,200 1,954 Off-System 22,704 12,479 77,747 36,704 Capacity Release & Storage 870 1,351 2,600 5,041 Other 856 1,070 2,675 3,334 Intercompany Sales (2,406) (85) (3,547) (356) ------- ------- -------- -------- Total Utility Operating Revenues $49,287 $43,432 $249,878 $203,865 ======= ======= ======== ======== Throughput (MMcf): Firm Residential 1,260 1,308 12,839 11,710 Commercial 403 485 3,240 3,457 Industrial 26 43 185 273 Cogeneration & Electric Generation 1,297 1,336 2,047 2,229 Firm Transportation 5,704 5,345 18,368 16,629 ------- ------- -------- -------- Total Firm Throughput 8,690 8,517 36,679 34,298 Interruptible 63 101 307 562 Interruptible Transportation 711 1,224 2,645 4,622 Off-System 8,277 5,539 33,052 15,415 Capacity Release & Storage 8,149 8,253 19,508 22,391 ------- ------- -------- -------- Total Throughput 25,890 23,634 92,191 77,288 ======= ======= ======== ======== Operating Revenues - Nonutility Nonutility operating revenues decreased by $78.2 million and $89.4 million for the third quarter and nine month periods of 1999, respectively, almost entirely due to the discontinuation of SJE's wholesale electric trading activities. The loss of these revenues was partially offset by increased levels of retail gas sales to residential customers and casinos in Atlantic City. SJI-19 Gas Purchased for Resale Gas purchased for resale increased $6.2 million and $35.6 million for the third quarter and nine month periods of 1999, respectively, compared with the same periods in 1998 due principally to increased sales volumes, particularly to off-system customers. These increases were partially offset by SJG's ability to buy gas during the first nine months of 1999 at an average cost of $2.28/dt compared with $2.30/dt in 1998. Gas supply sources include contract and open-market purchases. SJG secures and maintains its own gas supplies to serve its customers. Utility Operations A summary of net changes in Utility Operations (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 1999 vs. 1998 1999 vs. 1998 ------------- ------------- Other Production Expense $3 $13 Transmission 30 75 Distribution (509) (710) Customer Accounts and Services (61) (401) Sales (21) (39) Administration and General (197) (472) Other (9) 40 ------- ------- $(764) $(1,494) ======= ======= Distribution expenses declined due to improvements in operating practices. These improvements included the implementation of an automated dispatch system and home based reporting of service personal. Customer Accounts and Services costs decreased in 1999 principally due to a decrease in reserves for uncollectible accounts and reduced meter reading expenses. Meter reading expenses declined due to a change to bimonthly meter reading during the first six months. We began to read meters on a monthly basis again during the third quarter but continued to reduce expenses by completing the outsourcing of the meter reading function to Millenium Services, LLP. Millenium is a joint venture, equally owned by SJI and Conectiv, Inc. Administrative and General costs decreased for the three and nine month periods from 1998 levels principally due to a decline in amortized regulatory expenses. SJI-20 Other Operating Expenses A summary of principal changes in other consolidated operating expenses (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 1999 vs. 1998 1999 vs. 1998 ------------- ------------- Nonutility Operations $(76,441) $(89,530) Maintenance 169 (101) Depreciation 457 1,345 Income Taxes (847) 3,350 Other Taxes (72) 334 Decreases in nonutility expenses almost entirely reflect the discontinuation of SJE's wholesale electricity trading activities, partially offset by increased levels of retail gas sales to residential customers and casinos in Atlantic City. Depreciation is higher due to increased investment in property, plant and equipment by SJG. Income Tax changes reflect the impact of changes in pre-tax income. Other taxes increased for the first nine months because of higher sales volumes due primarily to lower temperatures in the first quarter of 1999 and adjustments recorded in 1998 related to the Energy Tax Reform Act implemented January 1998. Interest Charges Interest charges increased in 1999 due to the effect of increased short and long-term debt outstanding, partially offset by lower interest rates experienced during the first nine months of this year. The debt was incurred primarily to support the expansion and upgrade of SJG's gas transmission and distribution system. Discontinued Operations Loss from discontinued operations decreased $2.5 million for the first nine months of 1999 principally due to a product liability settlement recorded in June 1998 and decreased environmental remediation costs. SJI-21 Net Income Applicable to Common Stock Net income (in thousands) and earnings per common share reflect the following changes: Three Months Ended Nine Months Ended September 30, September 30, 1999 vs. 1998 1999 vs. 1998 ------------- ------------- (Loss) Income from Continuing Operations $(1,180) $5,920 Loss from Discontinued Operations - Net 54 2,526 ------- ------- Net (Loss) Income Increase $(1,126) $8,446 ======= ======= (Loss) Earnings per Common Share: Continuing Operations $(0.11) $0.54 Discontinued Operations - Net 0.01 0.23 ------- ------- (Loss) Earnings per Share Increase $(0.10) $0.77 ======= ======= The details affecting the changes in net income and earnings per share are discussed under the appropriate captions above. Liquidity The seasonal nature of gas operations; the timing of construction and remediation expenditures and related permanent financing; as well as mandated tax and sinking fund payment dates require large, short-term cash requirements. These requirements are generally met by cash from operations and short-term lines of credit. We maintain short-term lines of credit with a number of banks, totaling $144.0 million, of which $48.6 million was available at September 30, 1999. The credit lines are uncommitted and unsecured with interest rates typically available based upon the Federal Funds Rates or London Interbank Offered Rates (LIBOR). SJI-22 The changes in cash flows from operating activities (in thousands): Nine Months Ended September 30, 1999 vs. 1998 ------------- Increases/(Decreases): Net Income Applicable to Common Stock $ 8,446 Depreciation and Amortization 2,009 Provision for Losses on Accounts Receivable (272) Revenues and Fuel Costs Deferred - Net (2,728) Loss on Disposal of Property (26) Deferred and Non-Current Income Taxes and Credits - Net (2,869) Environmental Remediation Costs-Net 2,657 Accounts Receivable 6,895 Inventories 784 Prepayments and Other Current Assets (618) Prepaid and Accrued Taxes - Net 18,110 Accounts Payable and Other Accrued Liabilities 3,067 Other - Net 6,179 ------- Net Cash Provided by Operating Activities $41,634 ======= Depreciation and Amortization are non-cash charges to income and do not impact cash flow. Changes in depreciation cost reflect the effect of additions and reductions to fixed assets. Decreases in Revenues and Fuel Costs Deferred - Net reflect the impact of payments or credits to customers for amounts previously overcollected and the undercollection of fuel costs resulting from increases in natural gas costs. Increases reflect the impact of overcollection of fuel costs or the recovery of previously deferred fuel costs. Changes in Deferred and Non-Current Income Taxes and Credits - Net represent the differences between taxes accrued and amounts paid. Generally, deferred income taxes related to deferred fuel costs will be paid in the next year. Changes in Environmental Remediation Costs - Net represent the differences between amounts expended for environmental remediation compared with amounts collected under the RAC and insurance recoveries. Changes in Accounts Receivable are primarily due to the discontinuation of wholesale electricity sales by SJE. This cash source was partially offset by higher off-system sales and the impact of colder weather on SJG's sales volumes. Weather and commodity prices also impact this line item. Changes impact cash flows when receivables are collected in subsequent periods. SJI-23 Changes in Inventories reflect the impact of seasonal requirements, temperatures and price changes. Changes in Prepaid and Accrued Taxes - Net reflect the impact of differences between taxes paid and taxes accrued. Significant timing differences exist in cash flows during the year. Approximately 50% of SJG's taxes are paid in installments during the first half of the year and the remaining 50% are paid on May 15 of each year. SJG uses short-term borrowings to pay taxes, resulting in a temporary increase in the short-term debt level. The carrying costs of timing differences are recognized in base utility rates. Changes in Accounts Payable and Other Current Liabilities reflect the impact of timing differences between the accrual and payment of costs. Changes in Other - Net reflect numerous changes in noncurrent assets and liabilities, including a settlement of an eminent domain proceeding and accrued deferred income taxes. Cash flow from nonutility operations is generally retained by those companies with amounts in excess of cash requirements passed up to SJI either as dividends or as temporary short-term loans. Nonutility operations are service oriented and have not required significant investment in capital facilities, inventories or personnel. Regulatory Matters In September 1999, the BPU approved SJG's filed request to recover costs incurred to remediate environmental problems at former manufactured gas plant sites as permitted under a previously approved Remediation Adjustment Clause (RAC) in our tariff. SJG's RAC level increased from $0.0032 per therm to $0.0107 per therm to include all RAC related expenditures made between 1993 and 1998. Consequently, SJG will recover via the RAC an additional $4.5 million per year for the next seven years as a result of this ruling. On February 9, 1999, the "Electric Discount and Energy Competition Act" P.L. 1999, c. 23 (the Act) was signed into law in New Jersey. This bill establishes the framework and necessary time schedules for the deregulation and restructuring of the electric and natural gas utilities in the state. As to natural gas utilities, the Act completes the "unbundling" rate process, establishes a time frame for the institution of competitive services for customer accounting functions and also sets forth a time frame for a determination as to whether basic gas supply services should become competitive. The Act also contains numerous provisions which require the BPU to promulgate and adopt a variety of standards related to the implementation of the Act. These required standards address fair competition, affiliate relations, accounting, competitive services, supplier licensing, consumer protection and aggregation. On March 31, 1999, the BPU issued Draft Interim Standards in response to the Act. In issuing its Order, the BPU stated that the Draft Interim Standards ". . . do not necessarily represent the final views of the Board on these matters. . ." As such, the BPU has undertaken an extensive comment and meeting process to address the concerns of all impacted SJI-24 parties. SJG has been actively participating in this process, and management believes the final standards will not have a material adverse effect on the company. Other matters are incorporated by reference to Note 5 to the condensed consolidated financial statements included as part of this report. Capital Resources SJI has a continuing need for cash resources and capital, primarily to invest in new and replacement facilities and equipment and for environmental remediation costs. Net construction and remediation expenditures for the first nine months of 1999 amounted to $35.4 million. The costs for 1999, 2000 and 2001 are estimated at approximately $54.6 million, $57.8 million and $56.7 million, respectively. We will fund these expenditures from several sources, which may include cash generated by operations, temporary use of short-term debt, sale of medium-term notes, capital leases, RAC recoveries, insurance recoveries and the issuance of equity. Effective June 1999, SJI changed the way that shares were purchased by participants in the company's Dividend Reinvestment Plan (DRP). Since 1994, our DRP purchased shares for participants on the open market. Now plan participants are receiving newly issued shares. On September 30, the DRP participants received a total of 172,983 newly issued shares at a discounted price of $27.1541 per share. We chose to offer a 2% discount on DRP investments because it was the most cost effective way to raise equity capital in the quantities that we are seeking. The revised DRP has provided SJI with $9.96 million of equity capital through September 30 and we expect to raise an additional $8 million to $12 million via this method by December 2000. Other Events In April 1999, SJE and EES completed the formation of a jointly owned limited liability company to market retail electricity and energy management services. The LLC is intended to create significant efficiencies and expand service capabilities for both companies upon the completion of proceedings to implement the electric utility restructuring legislation. SJE and GZA GeoEnvironmental, Inc. (GZA) have begun marketing a jointly- developed air monitoring system which is designed to assist companies involved in environmental clean-up. The partners were awarded their first contract to install the system in April 1999. A second contract was obtained in September. The relationship between SJE and GZA currently exists on a contract-by-contract basis. Summary SJI is confident it will have sufficient cash flow to meet its operating, capital and dividend needs and is taking and will take such actions necessary to employ its resources effectively. SJI-25 PART II OTHER INFORMATION Item l. Legal Proceedings Information required by this Item is incorporated by reference to Part I, Item 1, Note 8, on pages 13 and 14, excluding the first two paragraphs of the Note, regarding contingencies, including pending litigation and matters related to environmental remediation. Item 6. Exhibits and Reports on Form 8-K (b) No reports on Form 8-K were filed during the quarter for which this report is filed. SJI-26 SIGNATURES 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. (Registrant) Dated: November 15, 1999 By: /s/ David A. Kindlick David A. Kindlick Vice President, Financial Operations Dated: November 15, 1999 By: /s/ William J. Smethurst, Jr. William J. Smethurst, Jr. Treasurer SJI-27 SOUTH JERSEY INDUSTRIES, INC. Index to Exhibits Exhibit Number Description -------------- ----------- 27 Financial Data Schedule (Submitted only in electronic format to the Securities and Exchange Commission). SJI-28 EX-27 2 SJI EXHIBIT 27
UT 1,000 9-MOS DEC-31-1999 SEP-30-1999 PER-BOOK 524,219 5,691 84,295 114,806 1,133 730,144 13,937 120,887 46,381 181,205 35,000 2,044 185,704 95,375 0 0 8,876 0 0 0 221,940 730,144 282,594 10,627 240,759 251,386 31,208 0 31,208 15,148 13,587 2,313 13,587 11,713 11,826 47,662 1.25 1.25
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