Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 01, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | SOUTH JERSEY INDUSTRIES INC | |
Entity Central Index Key | 91,928 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 85,502,759 | |
South Jersey Gas Company | ||
Document Information [Line Items] | ||
Entity Registrant Name | SOUTH JERSEY GAS Co | |
Entity Central Index Key | 1,035,216 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 2,339,139 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Revenues (See Note 16): | ||
Utility | $ 231,768 | $ 195,769 |
Nonutility | 290,177 | 230,060 |
Total Operating Revenues | 521,945 | 425,829 |
Cost of Sales - (Excluding depreciation) | ||
- Utility | 87,117 | 71,379 |
- Nonutility | 195,951 | 215,763 |
Operations (See Note 1) | 47,044 | 38,448 |
Maintenance | 6,862 | 4,981 |
Depreciation | 24,662 | 24,323 |
Energy and Other Taxes | 2,439 | 2,071 |
Total Operating Expenses | 364,075 | 356,965 |
Operating Income (See Note 1) | 157,870 | 68,864 |
Other Income and Expense (See Note 1) | 2,761 | 4,487 |
Interest Charges | (13,972) | (16,745) |
Income Before Income Taxes | 146,659 | 56,606 |
Income Taxes | (36,415) | (21,870) |
Equity in Earnings of Affiliated Companies | 1,062 | 3,011 |
Income from Continuing Operations | 111,306 | 37,747 |
Loss from Discontinued Operations - (Net of tax benefit) | (66) | (30) |
Net Income | $ 111,240 | $ 37,717 |
Basic Earnings Per Common Share: | ||
Continuing Operations (in dollars per share) | $ 1.40 | $ 0.47 |
Discontinued Operations (in dollars per share) | 0 | 0 |
Basic Earnings Per Common Share (in dollars per share) | $ 1.40 | $ 0.47 |
Average Shares of Common Stock Outstanding - Basic (in shares) | 79,595 | 79,519 |
Diluted Earnings Per Common Share: | ||
Continuing Operations (in dollars per share) | $ 1.40 | $ 0.47 |
Discontinued Operations (in dollars per share) | 0 | 0 |
Diluted Earnings Per Common Share (in dollars per share) | $ 1.40 | $ 0.47 |
Average Shares of Common Stock Outstanding - Diluted (in shares) | 79,724 | 79,641 |
Dividends Declared Per Common Share (in dollars per share) | $ 0.28 | $ 0.27 |
South Jersey Gas Company | ||
Operating Revenues (See Note 16): | ||
Total Operating Revenues | $ 234,459 | $ 196,814 |
Cost of Sales - (Excluding depreciation) | ||
Cost of Sales (Excluding depreciation) | 89,808 | 72,424 |
Operations (See Note 1) | 29,370 | 24,175 |
Maintenance | 6,862 | 4,981 |
Depreciation | 14,363 | 12,714 |
Energy and Other Taxes | 1,255 | 1,295 |
Total Operating Expenses | 141,658 | 115,589 |
Operating Income (See Note 1) | 92,801 | 81,225 |
Other Income and Expense (See Note 1) | 2,510 | 1,042 |
Interest Charges | (6,728) | (5,878) |
Income Before Income Taxes | 88,583 | 76,389 |
Income Taxes | (21,836) | (29,911) |
Net Income | $ 66,747 | $ 46,478 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Net Income | $ 111,240 | $ 37,717 | |
Other Comprehensive Income, Net of Tax: | |||
Unrealized Gain on Derivatives - Other | 9 | 1,515 | |
Other Comprehensive Income - Net of Tax | [1] | 9 | 1,515 |
Comprehensive Income | $ 111,249 | $ 39,232 | |
Combined statutory tax rate | 25.00% | 40.00% | |
South Jersey Gas Company | |||
Net Income | $ 66,747 | $ 46,478 | |
Other Comprehensive Income, Net of Tax: | |||
Unrealized Gain on Derivatives - Other | 9 | 7 | |
Other Comprehensive Income - Net of Tax | [2] | 9 | 7 |
Comprehensive Income | $ 66,756 | $ 46,485 | |
Combined statutory tax rate | 25.00% | 40.00% | |
[1] | Determined using a combined average statutory tax rate of approximately 25% and 40% in 2018 and 2017, respectively. | ||
[2] | Determined using a combined average statutory tax rate of approximately 25% and 40% in 2018 and 2017, respectively. |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net Cash Provided by Operating Activities | $ 95,201 | $ 79,528 |
Cash Flows from Investing Activities: | ||
Capital Expenditures | (58,816) | (67,278) |
Proceeds from Sale of Property, Plant & Equipment | 0 | 3,058 |
Investment in Long-Term Receivables | (1,916) | (2,362) |
Proceeds from Long-Term Receivables | 2,390 | 2,554 |
Notes Receivable | 0 | 3,000 |
Purchase of Company-Owned Life Insurance | (279) | (8,074) |
Investment in Affiliate | (3,975) | (5,902) |
Net Repayment of Notes Receivable - Affiliate | 1,065 | 2,251 |
Net Cash Used in Investing Activities | (61,531) | (72,753) |
Cash Flows from Financing Activities: | ||
Net Repayments of Short-Term Credit Facilities | (98,300) | (91,000) |
Proceeds from Issuance of Long-Term Debt | 50,000 | 273,000 |
Principal Repayments of Long-Term Debt | 0 | (200,000) |
Payments for Issuance of Long-Term Debt | (1,264) | (2,021) |
Net Settlement of Restricted Stock | (776) | (751) |
Net Cash Provided by Financing Activities | (50,340) | (20,772) |
Net Decrease in Cash, Cash Equivalents and Restricted Cash | (16,670) | (13,997) |
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 39,695 | 31,910 |
Cash, Cash Equivalents and Restricted Cash at End of Period | 23,025 | 17,913 |
South Jersey Gas Company | ||
Net Cash Provided by Operating Activities | 44,492 | 56,986 |
Cash Flows from Investing Activities: | ||
Capital Expenditures | (54,960) | (56,086) |
Investment in Long-Term Receivables | (1,916) | (2,362) |
Proceeds from Long-Term Receivables | 2,390 | 2,554 |
Purchase of Company-Owned Life Insurance | 0 | (4,875) |
Net Cash Used in Investing Activities | (54,486) | (60,769) |
Cash Flows from Financing Activities: | ||
Net Repayments of Short-Term Credit Facilities | 11,100 | (104,300) |
Proceeds from Issuance of Long-Term Debt | 0 | 273,000 |
Principal Repayments of Long-Term Debt | 0 | (200,000) |
Payments for Issuance of Long-Term Debt | (5) | (2,021) |
Additional Investment by Shareholder | 0 | 40,000 |
Net Cash Provided by Financing Activities | 11,095 | 6,679 |
Net Decrease in Cash, Cash Equivalents and Restricted Cash | 1,101 | 2,896 |
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 4,619 | 1,391 |
Cash, Cash Equivalents and Restricted Cash at End of Period | $ 5,720 | $ 4,287 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment: | ||
Utility Plant, at original cost | $ 2,696,087 | $ 2,652,244 |
Accumulated Depreciation | (504,936) | (498,161) |
Nonutility Property and Equipment, at cost | 745,826 | 741,027 |
Accumulated Depreciation | (205,230) | (194,913) |
Property, Plant and Equipment - Net | 2,731,747 | 2,700,197 |
Investments: | ||
Available-for-Sale Securities | 36 | 36 |
Restricted Investments | 16,713 | 31,876 |
Investment in Affiliates | 66,970 | 62,292 |
Total Investments | 83,719 | 94,204 |
Current Assets: | ||
Cash and Cash Equivalents | 6,312 | 7,819 |
Accounts Receivable | 243,395 | 202,379 |
Unbilled Revenues | 62,601 | 73,377 |
Provision for Uncollectibles | (14,684) | (13,988) |
Notes Receivable - Affiliate | 3,848 | 4,913 |
Natural Gas in Storage, average cost | 33,422 | 48,513 |
Materials and Supplies, average cost | 4,233 | 4,239 |
Prepaid Taxes | 20,391 | 41,355 |
Derivatives - Energy Related Assets | 24,386 | 42,139 |
Other Prepayments and Current Assets | 29,602 | 28,247 |
Total Current Assets | 413,506 | 438,993 |
Regulatory and Other Noncurrent Assets: | ||
Regulatory Assets | 491,629 | 469,224 |
Derivatives - Energy Related Assets | 12,268 | 5,988 |
Notes Receivable - Affiliate | 13,275 | 13,275 |
Contract Receivables | 27,638 | 28,721 |
Goodwill | 3,578 | 3,578 |
Identifiable Intangible Assets | 12,240 | 12,480 |
Other | 100,480 | 98,426 |
Total Regulatory and Other Noncurrent Assets | 661,108 | 631,692 |
Total Assets | 3,890,080 | 3,865,086 |
Equity: | ||
Common Stock | 99,516 | 99,436 |
Other Paid-In Capital and Premium on Common Stock | 709,756 | 709,658 |
Treasury Stock (at par) | (274) | (271) |
Accumulated Other Comprehensive Loss | (36,756) | (36,765) |
Retained Earnings | 509,255 | 420,351 |
Total Equity | 1,281,497 | 1,192,409 |
Long-Term Debt | 974,749 | 1,122,999 |
Total Capitalization | 2,256,246 | 2,315,408 |
Current Liabilities: | ||
Notes Payable | 248,100 | 346,400 |
Current Portion of Long-Term Debt | 263,809 | 63,809 |
Accounts Payable | 259,684 | 284,899 |
Customer Deposits and Credit Balances | 29,356 | 43,398 |
Environmental Remediation Costs | 60,846 | 66,372 |
Taxes Accrued | 6,814 | 2,932 |
Derivatives - Energy Related Liabilities | 12,486 | 46,938 |
Deferred Contract Revenues | 262 | 259 |
Derivatives - Other Current | 526 | 748 |
Dividends Payable | 22,334 | 0 |
Interest Accrued | 7,790 | 9,079 |
Pension Benefits | 2,388 | 2,388 |
Other Current Liabilities | 9,785 | 15,860 |
Total Current Liabilities | 924,180 | 883,082 |
Deferred Credits and Other Noncurrent Liabilities: | ||
Deferred Income Taxes - Net | 123,239 | 86,884 |
Pension and Other Postretirement Benefits | 104,262 | 101,544 |
Environmental Remediation Costs | 101,551 | 106,483 |
Asset Retirement Obligations | 59,807 | 59,497 |
Derivatives - Energy Related Liabilities | 4,153 | 6,025 |
Derivatives - Other Noncurrent | 7,194 | 9,622 |
Regulatory Liabilities | 300,358 | 287,105 |
Other | 9,090 | 9,436 |
Total Deferred Credits and Other Noncurrent Liabilities | 709,654 | 666,596 |
Commitments and Contingencies (Note 11) | ||
Total Capitalization and Liabilities | 3,890,080 | 3,865,086 |
South Jersey Gas Company | ||
Property, Plant and Equipment: | ||
Utility Plant, at original cost | 2,696,087 | 2,652,244 |
Accumulated Depreciation | (504,936) | (498,161) |
Property, Plant and Equipment - Net | 2,191,151 | 2,154,083 |
Investments: | ||
Restricted Investments | 2,322 | 2,912 |
Total Investments | 2,322 | 2,912 |
Current Assets: | ||
Cash and Cash Equivalents | 3,398 | 1,707 |
Accounts Receivable | 128,583 | 78,571 |
Accounts Receivable - Related Parties | 2,842 | 988 |
Unbilled Revenues | 44,287 | 54,980 |
Provision for Uncollectibles | (14,491) | (13,799) |
Natural Gas in Storage, average cost | 5,190 | 14,932 |
Materials and Supplies, average cost | 824 | 825 |
Prepaid Taxes | 17,156 | 38,326 |
Derivatives - Energy Related Assets | 404 | 7,327 |
Other Prepayments and Current Assets | 12,895 | 12,670 |
Total Current Assets | 201,088 | 196,527 |
Regulatory and Other Noncurrent Assets: | ||
Regulatory Assets | 491,629 | 469,224 |
Long-Term Receivables | 24,874 | 25,851 |
Derivatives - Energy Related Assets | 0 | 5 |
Other | 19,063 | 17,372 |
Total Regulatory and Other Noncurrent Assets | 535,566 | 512,452 |
Total Assets | 2,930,127 | 2,865,974 |
Equity: | ||
Common Stock | 5,848 | 5,848 |
Other Paid-In Capital and Premium on Common Stock | 355,744 | 355,744 |
Accumulated Other Comprehensive Loss | (25,988) | (25,997) |
Retained Earnings | 652,584 | 585,838 |
Total Equity | 988,188 | 921,433 |
Long-Term Debt | 558,218 | 758,052 |
Total Capitalization | 1,546,406 | 1,679,485 |
Current Liabilities: | ||
Notes Payable | 63,100 | 52,000 |
Current Portion of Long-Term Debt | 263,809 | 63,809 |
Accounts Payable - Commodity | 37,810 | 43,341 |
Accounts Payable - Other | 34,923 | 41,365 |
Accounts Payable - Related Parties | 13,176 | 17,029 |
Customer Deposits and Credit Balances | 24,788 | 41,656 |
Environmental Remediation Costs | 60,528 | 66,040 |
Taxes Accrued | 5,785 | 1,760 |
Derivatives - Energy Related Liabilities | 784 | 9,270 |
Derivatives - Other Current | 337 | 389 |
Interest Accrued | 5,938 | 7,615 |
Pension Benefits | 2,353 | 2,353 |
Other Current Liabilities | 5,755 | 7,027 |
Total Current Liabilities | 519,086 | 353,654 |
Deferred Credits and Other Noncurrent Liabilities: | ||
Deferred Income Taxes - Net | 302,524 | 280,746 |
Pension and Other Postretirement Benefits | 91,264 | 88,871 |
Environmental Remediation Costs | 100,736 | 105,656 |
Asset Retirement Obligations | 59,018 | 58,714 |
Derivatives - Energy Related Liabilities | 328 | 170 |
Derivatives - Other Noncurrent | 5,669 | 6,639 |
Regulatory Liabilities | 300,358 | 287,105 |
Other | 4,738 | 4,934 |
Total Deferred Credits and Other Noncurrent Liabilities | 864,635 | 832,835 |
Total Capitalization and Liabilities | $ 2,930,127 | $ 2,865,974 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: GENERAL - South Jersey Industries, Inc. (SJI or the Company) currently provides a variety of energy-related products and services primarily through the following wholly-owned subsidiaries: ▪ South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey. ▪ South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial, industrial and residential customers. ▪ South Jersey Resources Group, LLC (SJRG) markets natural gas storage, commodity and transportation assets along with fuel management services on a wholesale basis in the mid-Atlantic, Appalachian and southern states. ▪ South Jersey Exploration, LLC (SJEX) owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania. ▪ Marina Energy, LLC (Marina) develops and operates on-site energy-related projects. It currently operates projects in New Jersey, Maryland, Massachusetts and Vermont. The significant wholly-owned subsidiaries of Marina include: • ACB Energy Partners, LLC (ACB) owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey. • AC Landfill Energy, LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE) and SX Landfill Energy, LLC (SXLE) own and operate landfill gas-to-energy production facilities in Atlantic, Burlington, Salem and Sussex Counties located in New Jersey. • MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS) own and operate solar-generation sites located in New Jersey. ▪ South Jersey Energy Service Plus, LLC (SJESP) serviced residential and small commercial HVAC systems, installed small commercial HVAC systems, provided plumbing services and serviced appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. On September 1, 2017, SJESP sold certain assets of its residential and small commercial HVAC and plumbing business to a third party. SJESP continues to receive commissions paid on service contracts from the third party and will do so on a go forward basis. ▪ SJI Midstream, LLC (Midstream) invests in infrastructure and other midstream projects, including a current project to build an approximately 118 -mile natural gas pipeline in Pennsylvania and New Jersey. In October 2017, SJI announced that it had entered into agreements to acquire the assets of Elizabethtown Gas and Elkton Gas from Pivotal Utility Holdings, Inc., a subsidiary of Southern Company Gas. SJI is acquiring the assets of both companies for total consideration of $1.7 billion . The transaction is expected to close in mid-2018, and is subject to approvals by the New Jersey Board of Public Utilities (BPU) and the Maryland Public Service Commission (PSC), with limited approvals also required from the Federal Energy Regulatory Commission (FERC), as well as certain anti-trust filings and approvals. In April 2018, SJI completed public equity offerings and issued long-term debt to help fund the acquisition (see Note 17). In connection with the acquisition, SJI has incurred total fees of $9.3 million during the three months ended March 31, 2018 . Of these fees, $5.5 million were related to consulting and legal expenses and recorded as Operations Expenses in the condensed consolidated statements of income for the three months ended March 31, 2018 . The remaining $3.8 million relates to a senior unsecured bridge facility (the “Bridge Facility”), which was entered into in the fourth quarter of 2017. Debt issuance costs associated with the Bridge Facility of $2.6 million were amortized to interest expense during the three months ended March 31, 2018 . Also incurred was $1.2 million of ticking fees which are also recorded as interest expense during the three months ended March 31, 2018 . The interest expenses noted above are recorded in Interest Charges in the condensed consolidated statements of income. All of the above costs are included in the Corporate & Services segment. BASIS OF PRESENTATION - SJI's condensed consolidated financial statements include the accounts of SJI, its wholly-owned subsidiaries (including SJG) and subsidiaries in which SJI has a controlling interest. SJI eliminates all significant intercompany accounts and transactions. In management’s opinion, the unaudited condensed consolidated financial statements of SJI and SJG reflect all normal and recurring adjustments needed to fairly present their respective financial positions, operating results and cash flows at the dates and for the periods presented. SJI’s and SJG'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. As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited condensed consolidated financial statements of SJI and SJG contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial statements should be read in conjunction with SJI’s and SJG's Annual Reports on Form 10-K for the year ended December 31, 2017 for a more complete discussion of the accounting policies and certain other information. Certain reclassifications have been made to SJI's and SJG's prior period condensed consolidated statements of income to conform to the current period presentation. The non-service cost components of net periodic pension and postretirement benefit costs are now included as a reduction to Other Income and Expense, as opposed to being recorded as an Operations Expense, to conform with ASU 2017-07, which is described below under "New Accounting Pronouncements." This caused Other Income to be reduced, and Operations Expense to also be reduced, by $1.2 million and $0.6 million for SJI and SJG, respectively, for the three months ended March 31, 2017. This also caused a reclassification to SJI's prior period segments disclosure in Note 6 to increase Operating Income within both the Gas Utility Operations and Corporate & Services segments by $0.6 million for the three months ended March 31, 2017. Certain reclassifications have been made to SJI's prior period segments disclosures to conform to the current period presentation. The activities of SJI Midstream, which were presented in the Corporate & Services segment during the three months ended March 31, 2017, are now separated into the Midstream segment for the same period in 2018. This caused prior period adjustments to Interest Charges, Income Taxes and Property Additions in Note 6. REVENUE-BASED TAXES - SJG collects certain revenue-based energy taxes from its customers. Such taxes include the New Jersey State Sales Tax and Public Utilities Assessment (PUA). State sales tax is recorded as a liability when billed to customers and is not included in revenue or operating expenses. The PUA is included in both Utility Revenue and Energy and Other Taxes and totaled $0.4 million for both the three months ended March 31, 2018 and 2017. IMPAIRMENT OF LONG-LIVED ASSETS - Long-lived assets that are held and used are reviewed for impairment whenever events or changes in circumstances indicate carrying values may not be recoverable. Such reviews are performed in accordance with ASC 360. An impairment loss is indicated if the total future estimated undiscounted cash flows expected from an asset are less than its carrying value. An impairment charge is measured by the difference between an asset's carrying amount and fair value with the difference recorded within Operating Expenses on the condensed consolidated statements of income. Fair values can be determined by a variety of valuation methods, including third-party appraisals, sales prices of similar assets, and present value techniques. No impairments were identified at SJI or SJG for the three months ended March 31, 2018 . SJI recorded an impairment charge of $0.3 million during the first quarter of 2017 due to a reduction in the expected cash flows to be received from a solar generating facility within the on-site energy production segment. For the three months ended March 31, 2017 , no impairments were identified at SJG. Marina’s solar energy projects rely on returns from electricity and solar renewable energy credits (SRECs). A decrease in the value of electricity and SRECs due to market conditions and/or legislative changes may negatively impact Marina's return on its investments as well as lead to impairment of the respective assets. GAS EXPLORATION AND DEVELOPMENT - SJI capitalizes all costs associated with gas property acquisition, exploration and development activities under the full cost method of accounting. Capitalized costs include costs related to unproved properties, which are not amortized until proved reserves are found or it is determined that the unproved properties are impaired. All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. No impairment charges were recorded during the three months ended March 31, 2018 or 2017 . As of March 31, 2018 and December 31, 2017 , $8.6 million and $8.7 million , respectively, related to interests in proved and unproved properties in Pennsylvania, net of amortization, is included with Nonutility Property and Equipment and Other Noncurrent Assets on SJI's condensed consolidated balance sheets. TREASURY STOCK - SJI uses the par value method of accounting for treasury stock. As of March 31, 2018 and December 31, 2017 , SJI held 219,136 and 216,642 shares of treasury stock, respectively. These shares are related to deferred compensation arrangements where the amounts earned are held in the stock of SJI. INCOME TAXES - Deferred income taxes are provided for all significant temporary differences between the book and taxable bases of assets and liabilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 - “Income Taxes.” A valuation allowance is established when it is determined that it is more likely than not that a deferred tax asset will not be realized. On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Reform") was enacted into law, which changed various corporate income tax provisions within the existing Internal Revenue Code. The law became effective January 1, 2018 but was required to be accounted for in the period of enactment, as such SJI adopted the new law in the fourth quarter of 2017. SJI and SJG were impacted in several ways as a result of Tax Reform, including provisions related to the permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%, modification of bonus depreciation and changes to the deductibility of certain business-related expenses. The SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of Tax Reform. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date of Tax Reform for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of Tax Reform for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of Tax Reform is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of Tax Reform. SJI and SJG were able to make reasonable, good faith estimates of certain effects and, therefore, recorded provisional adjustments for the following: the tax rules regarding the appropriate bonus deprecation rate that should be applied to assets placed in service after September 27, 2017, including the information required to compute the applicable depreciable tax basis. Further, Tax Reform is unclear in certain respects and will require interpretations and implementing regulations by the Internal Revenue Service, as well as state tax authorities. Tax Reform could also be subject to potential amendments and technical corrections which could impact the Company’s financial statements. Any required changes to the provisional estimates would result in the recording of regulatory assets or liabilities to the extent such amounts are probable of settlement or recovery through customer rates and a net change to income tax expense for any other amounts. Final adjustments to the provisional amounts are expected to be recorded by the third quarter of 2018. The accounting for all other applicable provisions of Tax Reform is considered complete based on the current interpretation. GOODWILL - Goodwill represents the excess of the consideration paid over the fair value of identifiable net assets acquired. Goodwill is not amortized, but instead is subject to impairment testing on an annual basis, and between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. No such events have occurred during the three months ended March 31, 2018 . Goodwill totaled $3.6 million on the condensed consolidated balance sheets of SJI as of both March 31, 2018 and December 31, 2017 . NEW ACCOUNTING PRONOUNCEMENTS - Other than as described below, no new accounting pronouncement issued or effective during 2018 or 2017 had, or are expected to have, a material impact on the condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC Topic 606). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition , and in most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. In connection with this new standard, the FASB has issued several amendments to ASU 2014-09, as follows: • In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . This standard improves the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. • In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing . This standard clarifies identifying performance obligations and the licensing implementation guidance. • In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . This standard provides additional guidance on (a) the objective of the collectibility criterion, (b) the presentation of sales tax collected from customers, (c) the measurement date of non-cash consideration received, (d) practical expedients in respect of contract modifications and completed contracts at transition, and (e) disclosure of the effects of the accounting change in the period of adoption. • In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , which amends certain narrow aspects of the guidance, including the disclosure of remaining performance obligations and prior-period performance obligations, as well as other amendments to the guidance on loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples. The new guidance in ASU 2014-09, as well as all amendments discussed above, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. On January 1, 2018, SJI and SJG adopted ASU 2014-09 and all amendments, which meant adopting the guidance in ASC 606. SJI and SJG adopted the new guidance using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under ASC 605. See Note 16. The methods of recognizing revenue for SJI's and SJG's contracts with customers is the same under ASC 605 and ASC 606, as revenues from contracts that SJI and SJG have with customers are currently recorded as gas or electricity is delivered to the customer, which is consistent with the new guidance under ASC 606. As such, there was no significant impact to revenues for the quarter ended March 31, 2018 as a result of applying ASC 606, and there was no cumulative catch-up to retained earnings under the modified retrospective method for changes in accounting for revenues. Further, there were no significant changes to our business processes, systems or internal controls over financial reporting needed to support recognition and disclosure under the new guidance. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which enhances the reporting model for financial instruments and includes amendments to address aspects of recognition, measurement, presentation and disclosure. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for only certain portions of the new guidance. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In March 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which establishes a new lease accounting model for lessees. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The new standard also will result in enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases. The accounting for leases by the lessor remains relatively the same. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Management has formed an implementation team that is inventorying leases and evaluating the impact that adoption of this guidance will have on SJI's and SJG's financial statements, which includes monitoring industry specific developments including the exposure draft issued by the FASB that would introduce a land easement practical expedient to ASC 842. Consistent with the requirements of the standard, SJI and SJG expect to both transition to the new guidance using the modified retrospective approach, although this could be subject to change based on new guidance from the FASB. The Company does not plan to early adopt the new guidance. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . This standard requires recognition of the current and deferred income tax effects of an intra-entity asset transfer, other than inventory, when the transfer occurs, as opposed to current GAAP, which requires companies to defer the income tax effects of intra-entity asset transfers until the asset has been sold to an outside party. The income tax effects of intra-entity inventory transfers will continue to be deferred until the inventory is sold. ASU 2016-16 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, with early adoption permitted. The standard is required to be adopted on a modified retrospective basis with a cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . This new standard provides amended and clarifying guidance regarding whether an integrated set of assets and activities acquired is deemed the acquisition of a business (and, thus, accounted for as a business combination) or the acquisition of assets. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The amendments in this update are effective for annual and any interim impairment tests performed in periods beginning after December 31, 2019. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU is designed to improve guidance related to the presentation of defined benefit costs in the income statement. In particular, this ASU requires an employer to report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Adoption of this guidance was applied retrospectively and did not have a material impact on the financial statements of SJI or SJG; however, current and prior period presentation on the condensed consolidated statements of income were modified for SJI and SJG to conform to this guidance, as described under “Basis of Presentation” above. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU clarifies and reduces both (i) diversity in practice and (ii) cost and complexity when applying the guidance in Topic 718, to a change to the terms and conditions of a share-based payment award. This standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . This ASU is intended to improve the financial reporting of hedging relationships so that it represents a more faithful portrayal of an entity’s risk management activities (i.e. to help financial statement users understand an entity’s risk exposures and the manner in which hedging strategies are used to manage them), as well as to further simplify the application of the hedge accounting guidance in GAAP. The standard is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income . This ASU allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from Tax Reform. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Reform and will improve the usefulness of information reported to financial statement users. The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In February 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which gave improvements and enhancements to ASU 2016-01 discussed above. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. SJI and SJG adopted this guidance during the first quarter of 2018 in conjunction with adopting ASU 2016-01 discussed above. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In March 2018, the FASB issued ASU 2018-04, Investments—Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 (SEC Update) . This ASU incorporates recent SEC guidance which was issued in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and SEC rules and regulation. ASU No. 2018-04 was effective upon issuance. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update) . This ASU incorporates recent SEC guidance related to the income tax accounting implications of Tax Reform. ASU No. 2018-05 was effective upon issuance. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. |
STOCK-BASED COMPENSATION PLAN
STOCK-BASED COMPENSATION PLAN | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION PLAN | STOCK-BASED COMPENSATION PLAN: On April 30, 2015, the shareholders of SJI approved the adoption of SJI's 2015 Omnibus Equity Compensation Plan (Plan), replacing the Amended and Restated 1997 Stock-Based Compensation Plan that had terminated on January 26, 2015. Under the Plan, shares may be issued to SJI’s officers (Officers), non-employee directors (Directors) and other key employees. No options were granted or outstanding during the three months ended March 31, 2018 and 2017 . No stock appreciation rights have been issued under the plans. During the three months ended March 31, 2018 and 2017 , SJI granted 185,214 and 158,688 restricted shares, respectively, to Officers and other key employees under the Plan. Performance-based restricted shares vest over a three -year period and are subject to SJI achieving certain market and earnings-based performance targets, which can cause the actual amount of shares that ultimately vest to range from 0% to 200% of the original shares granted. In 2015, SJI began granting time-based shares of restricted stock, one-third of which vest annually over a three -year period and which are limited to a 100% payout. Vesting of time-based grants is contingent upon SJI achieving a return on equity (ROE) of at least 7% during the initial year of the grant and meeting the service requirement. Provided that the 7% ROE requirement is met in the initial year, payout is solely contingent upon the service requirement being met in years two and three of the grant. Beginning in 2018, the vesting and payout of time-based shares of restricted stock is only contingent upon the service requirement being met in years one , two , and three of the grant. During the three months ended March 31, 2018 and 2017 , Officers and other key employees were granted 56,634 and 48,790 shares of time-based restricted stock, respectively, which are included in the shares noted above. Grants containing market-based performance targets use SJI's total shareholder return (TSR) relative to a peer group to measure performance. As TSR-based grants are contingent upon market and service conditions, SJI is required to measure and recognize stock-based compensation expense based on the fair value at the date of grant on a straight-line basis over the requisite three -year period of each award. In addition, SJI identifies specific forfeitures of share-based awards, and compensation expense is adjusted accordingly over the requisite service period. Compensation expense is not adjusted based on the actual achievement of performance goals. The fair value of TSR-based restricted stock awards on the date of grant is estimated using a Monte Carlo simulation model. Through 2014, grants containing earnings-based targets were based on SJI's earnings growth rate per share (EGR) relative to a peer group to measure performance. In 2015, earnings-based performance targets included pre-defined EGR and ROE goals to measure performance. Beginning in 2016, performance targets include pre-defined compounded earnings annual growth rate (CEGR) for SJI. As EGR-based, ROE-based and CEGR-based grants are contingent upon performance and service conditions, SJI is required to measure and recognize stock-based compensation expense based on the fair value at the date of grant over the requisite three -year period of each award. The fair value is measured as the market price at the date of grant. The initial accruals of compensation expense are based on the estimated number of shares expected to vest, assuming the requisite service is rendered and probable outcome of the performance condition is achieved. That estimate is revised if subsequent information indicates that the actual number of shares is likely to differ from previous estimates. Compensation expense is ultimately adjusted based on the actual achievement of service and performance targets. During the three months ended March 31, 2018 and 2017 , SJI granted 26,416 and 30,394 restricted shares, respectively, to Directors. Shares issued to Directors vest over twelve months and contain no performance conditions. As a result, 100% of the shares granted generally vest. The following table summarizes the nonvested restricted stock awards outstanding for SJI at March 31, 2018 and the assumptions used to estimate the fair value of the awards: Grants Shares Outstanding Fair Value Per Share Expected Volatility Risk-Free Interest Rate Officers & Key Employees - 2016 - TSR 58,205 $ 22.53 18.1 % 1.31 % 2016 - CEGR, Time 73,344 $ 23.52 N/A N/A 2017 - TSR 49,981 $ 32.17 20.8 % 1.47 % 2017 - CEGR, Time 81,372 $ 33.69 N/A N/A 2018 - TSR 64,290 $ 31.05 21.9 % 2.00 % 2018 - CEGR, Time 120,924 $ 31.23 N/A N/A Directors - 2018 26,416 $ 31.16 N/A N/A Expected volatility is based on the actual volatility of SJI’s share price over the preceding three -year period as of the valuation date. The risk-free interest rate is based on the zero-coupon U.S. Treasury Bond, with a term equal to the three -year term of the Officers’ and other key employees’ restricted shares. As notional dividend equivalents are credited to the holders during the three -year service period, no reduction to the fair value of the award is required. As the Directors’ restricted stock awards contain no performance conditions and dividends are paid or credited to the holder during the requisite service period, the fair value of these awards are equal to the market value of the shares on the date of grant. The following table summarizes the total stock-based compensation cost to SJI for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended 2018 2017 Officers & Key Employees $ 1,100 $ 1,070 Directors 206 256 Total Cost 1,306 1,326 Capitalized (101 ) (88 ) Net Expense $ 1,205 $ 1,238 As of March 31, 2018 , there was $9.3 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under the plans. That cost is expected to be recognized over a weighted average period of 2.1 years. The following table summarizes information regarding restricted stock award activity for SJI during the three months ended March 31, 2018 , excluding accrued dividend equivalents: Officers &Other Key Employees Directors Weighted Average Fair Value Nonvested Shares Outstanding, January 1, 2018 342,793 30,394 $ 28.60 Granted 185,214 26,416 $ 31.17 Cancelled/Forfeited (34,990 ) — $ 28.21 Vested (44,901 ) (30,394 ) $ 30.56 Nonvested Shares Outstanding, March 31, 2018 448,116 26,416 $ 29.46 During the three months ended March 31, 2018 and 2017 , SJI awarded 63,030 shares to its Officers and other key employees at a market value of $1.9 million , and 65,628 shares at a market value of $2.2 million , respectively. During the three months ended March 31, 2018 and 2017 , SJI also granted 26,416 and 30,394 shares to its Directors at a market value of $0.8 million and $1.0 million , respectively. SJI has a policy of issuing new shares to satisfy its obligations under the Plan; therefore, there are no cash payment requirements resulting from the normal operation of the Plan. However, a change in control could result in such shares becoming nonforfeitable or immediately payable in cash. At the discretion of the Officers, Directors and other key employees, the receipt of vested shares can be deferred until future periods. These deferred shares are included in Treasury Stock on the condensed consolidated balance sheets. South Jersey Gas Company - Officers and other key employees of SJG participate in the stock-based compensation plans of SJI. During the three months ended March 31, 2018 and 2017 , SJG officers and other key employees were granted 26,652 and 21,061 shares of SJI restricted stock, respectively. The cost of outstanding stock awards for SJG during the three months ended March 31, 2018 and 2017 was $0.2 million and $0.1 million , respectively. Approximately 60% of these costs were capitalized on SJG's condensed balance sheets to Utility Plant. |
AFFILIATIONS, DISCONTINUED OPER
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS | AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED-PARTY TRANSACTIONS: AFFILIATIONS — The following affiliated entities are accounted for under the equity method: PennEast Pipeline Company, LLC (PennEast) - Midstream has a 20% investment in PennEast, which is planning to construct an approximately 118 -mile natural gas pipeline that will extend from Northeastern Pennsylvania into New Jersey. Energenic – US, LLC (Energenic) - Marina and a joint venture partner formed Energenic, in which Marina has a 50% equity interest. Energenic developed and operated on-site, self-contained, energy-related projects. Millennium Account Services, LLC (Millennium) - SJI and a joint venture partner formed Millennium, in which SJI has a 50% equity interest. Millennium reads utility customers’ meters on a monthly basis for a fee. 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. EnergyMark, LLC (EnergyMark) - SJE has a 33% investment in EnergyMark, an entity that acquires and markets natural gas to retail end users. For the three months ended March 31, 2018 and 2017 , SJRG had net sales to EnergyMark of $14.6 million and $15.2 million , respectively. During the first three months of 2018 and 2017 , SJI made net investments in unconsolidated affiliates of $2.9 million and $3.7 million , respectively. As of March 31, 2018 and December 31, 2017 , the outstanding balance of Notes Receivable – Affiliate was $17.1 million and $18.2 million , respectively. As of March 31, 2018 , $13.6 million of these notes were secured by property, plant and equipment of the affiliates, accrue interest at 7.5% and are to be repaid through 2025 . The remaining $3.5 million of these notes are unsecured and accrue interest at variable rates. 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 March 31, 2018 , SJI had a net asset of approximately $67.0 million included in Investment in Affiliates on the condensed 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 March 31, 2018 , is limited to its combined equity contributions and the Notes Receivable-Affiliate in the aggregate amount of $84.1 million . 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 (see Note 11). Summarized operating results of the discontinued operations for the three months ended March 31, 2018 and 2017 , were (in thousands, except per share amounts): Three Months Ended 2018 2017 Loss before Income Taxes: Sand Mining $ (40 ) $ (17 ) Fuel Oil (42 ) (29 ) Income Tax Benefits 16 16 Loss from Discontinued Operations — Net $ (66 ) $ (30 ) Earnings Per Common Share from Discontinued Operations — Net: Basic and Diluted $ — $ — SJG RELATED-PARTY TRANSACTIONS - There have been no significant changes in the nature of SJG’s related-party transactions since December 31, 2017 . See Note 3 to the Financial Statements in Item 8 of SJI's and SJG’s Form 10-K for the year ended December 31, 2017 for a detailed description of the related parties and their associated transactions. A summary of related-party transactions involving SJG, excluding pass-through items, included in SJG's Operating Revenues were as follows (in thousands): Three Months Ended 2018 2017 Operating Revenues/Affiliates: SJRG $ 2,588 $ 963 Marina 103 82 Other 23 21 Total Operating Revenue/Affiliates $ 2,714 $ 1,066 Related-party transactions involving SJG, excluding pass-through items, included in SJG's Cost of Sales and Operating Expenses were as follows (in thousands): Three Months Ended 2018 2017 Costs of Sales/Affiliates (Excluding depreciation) SJRG* $ 25,338 $ 10,450 Operations Expense/Affiliates: SJI $ 7,043 $ 6,050 Millennium 697 708 Other (115 ) (39 ) Total Operations Expense/Affiliates $ 7,625 $ 6,719 *As discussed in Note 1 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017 , revenues and expenses related to the energy trading activities of the wholesale energy operations at SJRG are presented on a net basis in Operating Revenues – Nonutility on the condensed consolidated income statement. |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
COMMON STOCK | COMMON STOCK: The following shares were issued and outstanding for SJI: 2018 Beginning Balance, January 1 79,549,080 New Issuances During the Period: Stock-Based Compensation Plan 63,809 Ending Balance, March 31 79,612,889 The par value ( $1.25 per share) of stock issued was recorded in Common Stock and the net excess over par value of approximately $0.1 million was recorded in Premium on Common Stock. There were 2,339,139 shares of SJG's common stock (par value $2.50 per share) outstanding as of March 31, 2018 . SJG did not issue any new shares during the period. SJI owns all of the outstanding common stock of SJG. SJI's EARNINGS PER COMMON SHARE (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 129,369 and 121,812 for the three months ended March 31, 2018 and 2017, respectively. These additional shares relate to SJI's restricted stock as discussed in Note 2. DIVIDEND REINVESTMENT PLAN (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 2017 or 2018. SJI does not intend to issue equity capital via the DRP in 2018. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS: RESTRICTED INVESTMENTS — Marina is required to maintain escrow accounts related to ongoing capital projects. As of both March 31, 2018 and December 31, 2017 , the escrowed funds, including interest earned, totaled $0.3 million which are recorded in Restricted Investments on the condensed consolidated balance sheets. SJI and SJG maintain margin accounts with selected counterparties to support their risk management activities. The balances required to be held in these margin accounts increase as the net value of the outstanding energy-related contracts with the respective counterparties decrease. As of March 31, 2018 and December 31, 2017 , SJI's balances (including SJG) in these accounts totaled $16.4 million and $31.6 million , respectively, held by the counterparty, which is recorded in Restricted Investments on the condensed consolidated balance sheets. As of March 31, 2018 and December 31, 2017 , SJG's balance held by the counterparty totaled $2.3 million and $2.9 million and was recorded in Restricted Investments on the condensed balance sheets. The carrying amounts of the Restricted Investments for both SJI and SJG approximate their fair values at March 31, 2018 and December 31, 2017 , which would be included in Level 1 of the fair value hierarchy (see Note 13). The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands): As of March 31, 2018 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 6,312 $ 3,398 Restricted Investments 16,713 2,322 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 23,025 $ 5,720 As of December 31, 2017 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 7,819 $ 1,707 Restricted Investments 31,876 2,912 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 39,695 $ 4,619 NOTES RECEIVABLE-AFFILIATES - As of March 31, 2018 , SJI had approximately $13.6 million included in Notes Receivable - Affiliate on the condensed consolidated balance sheets, due from Energenic, which is secured by its cogeneration assets for energy service projects. This note is subject to a reimbursement agreement that secures reimbursement for SJI, from its joint venture partner, of a proportionate share of any amounts that are not repaid. LONG-TERM RECEIVABLES - SJG provides financing to customers for the purpose of attracting conversions to natural gas heating systems from competing fuel sources. The terms of these loans call for customers to make monthly payments over periods ranging from five to ten years, with no interest. The carrying amounts of such loans were $6.6 million and $7.0 million as of March 31, 2018 and December 31, 2017 , respectively. The current portion of these receivables is reflected in Accounts Receivable and the non-current portion is reflected in Contract Receivables on the condensed consolidated balance sheets. The carrying amounts noted above are net of unamortized discounts resulting from imputed interest in the amount of $0.7 million as of both March 31, 2018 and December 31, 2017 . The annualized amortization to interest is not material to SJI’s or SJG's condensed consolidated financial statements. The carrying amounts of these receivables approximate their fair value at March 31, 2018 and December 31, 2017 , which would be included in Level 2 of the fair value hierarchy (see Note 13). CREDIT RISK - As of March 31, 2018 , SJI had approximately $4.3 million , or 11.9% , of the current and noncurrent Derivatives – Energy Related Assets transacted with one counterparty. This counterparty has contracts with a large number of diverse customers which minimizes the concentration of this risk. A portion of these contracts may be assigned to SJI in the event of default by the counterparty. FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VALUE - The fair value of a financial instrument is the market price to sell an asset or transfer a liability at the measurement date. The carrying amounts of SJI's and SJG's financial instruments approximate their fair values at March 31, 2018 and December 31, 2017 , except as noted below. • For Long-Term Debt, in estimating the fair value, SJI and SJG use the present value of remaining cash flows at the balance sheet date. SJI and SJG based the estimates on interest rates available at the end of each period for debt with similar terms and maturities (Level 2 in the fair value hierarchy, see Note 13). • The estimated fair values of SJI's long-term debt (which includes SJG and all consolidated subsidiaries), including current maturities, as of March 31, 2018 and December 31, 2017 , were $1,257.1 million and $1,216.1 million , respectively. The carrying amounts of SJI's long-term debt, including current maturities, as of March 31, 2018 and December 31, 2017 , were $1,238.6 million and $1,186.8 million , respectively. SJI's carrying amounts as of March 31, 2018 and December 31, 2017 are net of unamortized debt issuance costs of $15.6 million and $17.4 million , respectively. • The estimated fair values of SJG's long-term debt, including current maturities, as of March 31, 2018 and December 31, 2017 , were $831.6 million and $838.5 million , respectively. The carrying amount of SJG's long-term debt, including current maturities, as of March 31, 2018 and December 31, 2017 , was $822.0 million and $821.9 million , respectively. The carrying amounts as of March 31, 2018 and December 31, 2017 are net of unamortized debt issuance costs of $7.1 million and $7.3 million , respectively. OTHER FINANCIAL INSTRUMENTS - The carrying amounts of SJI's and SJG's other financial instruments approximate their fair values at March 31, 2018 and December 31, 2017 . |
SEGMENTS OF BUSINESS
SEGMENTS OF BUSINESS | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENTS OF BUSINESS | SEGMENTS OF BUSINESS: SJI operates in several different reportable operating segments which reflect the financial information regularly evaluated by the chief operating decision maker (CODM). These segments are as follows: • Gas utility operations (SJG) consist primarily of natural gas distribution to residential, commercial and industrial customers. The result of SJG are only included in this operating segment. • Wholesale energy operations include the activities of SJRG and SJEX. • SJE is involved in both retail gas and retail electric activities. ◦ Retail gas and other operations include natural gas acquisition and transportation service business lines. ◦ Retail electric operations consist of electricity acquisition and transportation to commercial, industrial and residential customers. • On-site energy production consists of Marina's thermal energy facility and other energy-related projects. Also included in this segment are the activities of ACB, ACLE, BCLE, SCLE, SXLE, MCS, NBS and SBS. • Appliance service operations includes SJESP, which serviced residential and small commercial HVAC systems, installed small commercial HVAC systems, provided plumbing services and serviced appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. On September 1, 2017, SJESP sold certain assets of its residential and small commercial HVAC and plumbing business to a third party. SJESP continues to receive commissions paid on service contracts from the third party and will do so on a go forward basis. • Midstream was formed to invest in infrastructure and other midstream projects, including a current project to build a natural gas pipeline in Pennsylvania and New Jersey. • Costs incurred related to the agreement to acquire Elizabethtown Gas and Elkton Gas are recorded in the Corporate & Services segment. SJI groups its nonutility operations into two categories: Energy Group and Energy Services. Energy Group includes wholesale energy, retail gas and other, and retail electric operations. Energy Services includes on-site energy production and appliance service operations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are treated as if the sales or transfers were to third parties at current market prices. Information about SJI’s operations in different reportable operating segments is presented below (in thousands): Three Months Ended 2018 2017 Operating Revenues: Gas Utility Operations $ 234,459 $ 196,814 Energy Group: Wholesale Energy Operations 190,343 127,517 Retail Gas and Other Operations 40,201 36,878 Retail Electric Operations 44,035 48,957 Subtotal Energy Group 274,579 213,352 Energy Services: On-Site Energy Production 21,157 19,612 Appliance Service Operations 520 1,658 Subtotal Energy Services 21,677 21,270 Corporate and Services 13,000 11,596 Subtotal 543,715 443,032 Intersegment Sales (21,770 ) (17,203 ) Total Operating Revenues $ 521,945 $ 425,829 Three Months Ended 2018 2017 Operating Income (See Note 1): Gas Utility Operations $ 92,801 $ 81,225 Energy Group: Wholesale Energy Operations 75,657 (11,626 ) Retail Gas and Other Operations (5,758 ) (1,667 ) Retail Electric Operations (208 ) 1,306 Subtotal Energy Group 69,691 (11,987 ) Energy Services: On-Site Energy Production (554 ) (1,969 ) Appliance Service Operations 503 (72 ) Subtotal Energy Services (51 ) (2,041 ) Corporate and Services (4,571 ) 1,667 Total Operating Income $ 157,870 $ 68,864 Depreciation and Amortization: Gas Utility Operations $ 20,315 $ 17,362 Energy Group: Wholesale Energy Operations 23 28 Retail Gas and Other Operations 75 83 Subtotal Energy Group 98 111 Energy Services: On-Site Energy Production 10,271 11,593 Appliance Service Operations — 54 Subtotal Energy Services 10,271 11,647 Corporate and Services 3,214 401 Total Depreciation and Amortization $ 33,898 $ 29,521 Interest Charges (See Note 1): Gas Utility Operations $ 6,728 $ 5,878 Energy Group: Wholesale Energy Operations — 3,059 Retail Gas and Other Operations 146 85 Subtotal Energy Group 146 3,144 Energy Services: On-Site Energy Production 3,847 5,814 Midstream 426 510 Corporate and Services 7,470 4,731 Subtotal 18,617 20,077 Intersegment Borrowings (4,645 ) (3,332 ) Total Interest Charges $ 13,972 $ 16,745 Three Months Ended 2018 2017 Income Taxes (See Note 1): Gas Utility Operations $ 21,836 $ 29,911 Energy Group: Wholesale Energy Operations 19,127 (6,319 ) Retail Gas and Other Operations (1,534 ) (447 ) Retail Electric Operations (58 ) 535 Subtotal Energy Group 17,535 (6,231 ) Energy Services: On-Site Energy Production (1,157 ) (3,069 ) Appliance Service Operations 131 (17 ) Subtotal Energy Services (1,026 ) (3,086 ) Midstream 62 (84 ) Corporate and Services (1,992 ) 1,360 Total Income Taxes $ 36,415 $ 21,870 Property Additions (See Note 1): Gas Utility Operations $ 50,237 $ 62,280 Energy Group: Wholesale Energy Operations 5 3 Retail Gas and Other Operations 173 295 Subtotal Energy Group 178 298 Energy Services: On-Site Energy Production 1,113 7,349 Appliance Service Operations — 6 Subtotal Energy Services 1,113 7,355 Midstream 211 152 Corporate and Services 3,345 93 Total Property Additions $ 55,084 $ 70,178 March 31, 2018 December 31, 2017 Identifiable Assets: Gas Utility Operations $ 2,930,127 $ 2,865,974 Energy Group: Wholesale Energy Operations 150,330 208,785 Retail Gas and Other Operations 57,497 56,935 Retail Electric Operations 32,149 34,923 Subtotal Energy Group 239,976 300,643 Energy Services: On-Site Energy Production 584,349 582,587 Appliance Service Operations 491 1,338 Subtotal Energy Services 584,840 583,925 Midstream 64,831 63,112 Discontinued Operations 1,751 1,757 Corporate and Services 640,996 711,038 Intersegment Assets (572,441 ) (661,363 ) Total Identifiable Assets $ 3,890,080 $ 3,865,086 |
RATES AND REGULATORY ACTIONS
RATES AND REGULATORY ACTIONS | 3 Months Ended |
Mar. 31, 2018 | |
Public Utilities, General Disclosures [Abstract] | |
RATES AND REGULATORY ACTIONS | RATES AND REGULATORY ACTIONS: SJG is subject to the rules and regulations of the New Jersey Board of Public Utilities (BPU). In March 2018, SJG filed a petition with the BPU for a change in rates, customer refund and rider associated with the implementation of Tax Reform. The BPU subsequently approved an interim rate reduction, effective April 1, 2018, to reflect the change in the corporate tax rate within SJG’s base rates. This petition is currently pending. Also in March 2018, SJG filed a petition with the BPU seeking to continue its existing Energy Efficiency Programs (EEP's), with modifications, and to implement new programs (the “EEP IV”) for a five -year period with a proposed budget of approximately $195.4 million and with the same rate recovery mechanism that exists for its current EEP's. Under its existing EEP's, SJG is permitted to recover incremental operating and maintenance expenses and earn a return of, and return on, program investments. The matter is currently pending BPU approval. There have been no other significant regulatory actions or changes to SJG's rate structure since December 31, 2017 . See Note 10 to the Consolidated Financial Statements in Item 8 of SJI's and SJG's Annual Report on Form 10-K for the year ended December 31, 2017 . |
REGULATORY ASSETS AND REGULATOR
REGULATORY ASSETS AND REGULATORY LIABILITIES | 3 Months Ended |
Mar. 31, 2018 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
REGULATORY ASSETS AND REGULATORY LIABILITIES | REGULATORY ASSETS AND REGULATORY LIABILITIES: There have been no significant changes to the nature of SJG’s regulatory assets and liabilities since December 31, 2017 , which are described in Note 11 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017 . SJI has no regulatory assets or regulatory liabilities other than those of SJG. SJI's and SJG's Regulatory Assets consisted of the following items (in thousands): March 31, 2018 December 31, 2017 Environmental Remediation Costs: Expended - Net $ 110,529 $ 100,327 Liability for Future Expenditures 161,263 171,696 Deferred Asset Retirement Obligation Costs 42,622 42,368 Deferred Pension and Other Postretirement Benefit Costs 78,211 78,211 Deferred Gas Costs - Net 54,351 16,838 Conservation Incentive Program Receivable 12,118 26,652 Societal Benefit Costs Receivable 2,699 2,484 Deferred Interest Rate Contracts 6,006 7,028 Energy Efficiency Tracker 1,832 2,094 Pipeline Supplier Service Charges 686 708 Pipeline Integrity Cost 4,977 5,280 AFUDC - Equity Related Deferrals 12,899 12,785 Other Regulatory Assets 3,436 2,753 Total Regulatory Assets $ 491,629 $ 469,224 ENVIRONMENTAL REMEDIATION COSTS - SJG has two regulatory assets associated with environmental costs related to the cleanup of 12 sites where SJG or its predecessors previously operated gas manufacturing plants. The first asset, "Environmental Remediation Cost: Expended - Net," represents what was actually spent to clean up the sites, less recoveries through the Remediation Adjustment Clause (RAC) and insurance carriers. These costs meet the deferral requirements of GAAP, as the BPU allows SJG to recover such expenditures through the RAC. The other asset, "Environmental Remediation Cost: Liability for Future Expenditures," relates to estimated future expenditures required to complete the remediation of these sites. SJG recorded this estimated amount as a regulatory asset with the corresponding current and noncurrent liabilities on the condensed consolidated balance sheets under the captions "Current Liabilities" (both SJI and SJG), "Deferred Credits and Other Noncurrent Liabilities" (SJI) and "Regulatory and Other Noncurrent Liabilities" (SJG). The BPU allows SJG to recover the deferred costs over seven -year periods after they are spent. DEFERRED GAS COSTS - NET - Over/Under collections of gas costs are monitored through SJG's Basic Gas Supply Service (BGSS) bill credit. Net undercollected gas costs are classified as a regulatory asset, and net overcollected gas costs are classified as a regulatory liability. Derivative contracts used to hedge natural gas purchases are also included in the BGSS, subject to BPU approval. The BGSS regulatory asset increased $37.5 million from December 31, 2017 to March 31, 2018, primarily due to the actual gas commodity costs exceeding recoveries from customers. CONSERVATION INCENTIVE PROGRAM (CIP) RECEIVABLE – The CIP tracking mechanism adjusts earnings when actual usage per customer experienced during the period varies from an established baseline usage per customer. Actual usage per customer was more than the established baseline during the first three months of 2018, resulting in a decrease in the receivable. This is primarily the result of cold weather experienced in the region. SOCIETAL BENEFIT COSTS (SBC) RECEIVABLE - This regulatory asset primarily represents the deferred expenses incurred under the New Jersey Clean Energy Program, which is a mechanism designed to recover costs associated with energy efficiency and renewable energy programs. Previous SBC rates produced recoveries greater than SBC costs, which resulted in the regulatory liability. SJI's and SJG's Regulatory Liabilities consisted of the following items (in thousands): March 31, 2018 December 31, 2017 Excess Plant Removal Costs $ 23,527 $ 23,295 Excess Deferred Taxes 276,831 263,810 Total Regulatory Liabilities $ 300,358 $ 287,105 EXCESS DEFERRED TAXES - As disclosed in Note 11 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017 , the Excess Deferred Tax balance relates to Tax Reform enacted into law December 22, 2017 (see Note 1). The increase in this regulatory liability of $13.0 million during the first three months of 2018 is related to excess tax amounts that were billed to customers in the first quarter of 2018. Pending approval by the BPU of the refund methodology, amounts are expected to be returned to customers in May 2018. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | 3 Months Ended |
Mar. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | PENSION AND OTHER POSTRETIREMENT BENEFITS: For the three months ended March 31, 2018 and 2017 , net periodic benefit cost related to the employee and officer pension and other postretirement benefit plans for SJI consisted of the following components (in thousands): Pension Benefits Three Months Ended 2018 2017 Service Cost $ 2,177 $ 1,382 Interest Cost 5,108 2,955 Expected Return on Plan Assets (7,633 ) (3,524 ) Amortizations: Prior Service Cost 71 33 Actuarial Loss 4,132 2,613 Net Periodic Benefit Cost 3,855 3,459 Capitalized Benefit Cost (483 ) (1,271 ) Deferred Benefit Cost (751 ) (161 ) Total Net Periodic Benefit Expense $ 2,621 $ 2,027 Other Postretirement Benefits Three Months Ended 2018 2017 Service Cost $ 81 $ 247 Interest Cost 217 601 Expected Return on Plan Assets (305 ) (853 ) Amortizations: Prior Service Cost (31 ) (86 ) Actuarial Loss 111 312 Net Periodic Benefit Cost 73 221 Capitalized Benefit Cost (5 ) (55 ) Total Net Periodic Benefit Expense $ 68 $ 166 The Pension Benefits Net Periodic Benefit Cost incurred by SJG was approximately $2.5 million of the totals presented in the table above for both the three months ended March 31, 2018 and 2017 .During the three months ended March 31, 2018, and 2017, the Other Postretirement Benefits Net Periodic Benefit Cost incurred by SJG was less than $0.1 million and approximately $0.1 million, respectively, of the totals presented in the table above. Capitalized benefit costs reflected in the table above relate to SJG’s construction program. Effective January 1, 2018, SJI and SJG adopted FASB ASU 2017-07 which stipulates that only the service cost component of net benefit cost is eligible for capitalization. In SJG's rate case settlement in October 2017, The BPU allowed the deferral until the next base rate case of incremental expense associated with the adoption. SJI contributed $10.0 million to the pension plans, of which SJG contributed $8.0 million , in January 2017. No contributions were made to the pension plans by either SJI or SJG during the three months ended March 31, 2018 . SJI and SJG do not expect to make any additional contributions to the pension plans in 2018; however, changes in future investment performance and discount rates may ultimately result in a contribution. Payments related to the unfunded supplemental executive retirement plan (SERP) are expected to be approximately $2.4 million in 2018 . Prior to the base rate case settlement in October 2017, SJG also had a regulatory obligation to contribute approximately $3.6 million annually to the other postretirement benefit plans’ trusts, less direct costs incurred. The recent rate case settlement allows SJG to modify the future funding requirement level up to a limit that represents full funding of its obligation and to the maximum tax deduction allowed. See Note 12 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017 for additional information related to SJI’s and SJG's pension and other postretirement benefits. |
LINES OF CREDIT
LINES OF CREDIT | 3 Months Ended |
Mar. 31, 2018 | |
Line of Credit Facility [Abstract] | |
LINES OF CREDIT | LINES OF CREDIT: Credit facilities and available liquidity as of March 31, 2018 were as follows (in thousands): Company Total Facility Usage Available Liquidity Expiration Date SJI: Syndicated Revolving Credit Facility $ 400,000 $ 141,000 (A) $ 259,000 August 2022 Revolving Credit Facility 50,000 50,000 — September 2019 Total SJI 450,000 191,000 259,000 SJG: Commercial Paper Program/Revolving Credit Facility 200,000 64,000 (B) 136,000 August 2022 Uncommitted Bank Line 10,000 10,000 August 2018 (C) Total SJG 210,000 64,000 146,000 Total $ 660,000 $ 255,000 $ 405,000 (A) Includes letters of credit outstanding in the amount of $6.0 million . (B) Includes letters of credit outstanding in the amount of $0.9 million . (C) SJG expects to renew this facility prior to expiration. The SJG facilities are restricted as to use and availability specifically to SJG; however, if necessary, the SJI facilities can also be used to support SJG’s liquidity needs. Borrowings under these credit facilities are at market rates. SJI's weighted average interest rate on these borrowings, which changes daily, was 2.67% and 1.98% at March 31, 2018 and 2017 , respectively. SJG did not have any outstanding borrowings at March 31, 2018 under the credit facility; however, SJG did have $64.0 million outstanding under the commercial paper program. SJG's weighted average interest rate on these borrowings, which changes daily, was 2.32% and 1.15% at March 31, 2018 and March 31, 2017 , respectively. SJI's average borrowings outstanding under these credit facilities (which includes SJG), not including letters of credit, during the three months ended March 31, 2018 and 2017 were $238.0 million and $287.9 million , respectively. The maximum amounts outstanding under these credit facilities, not including letters of credit, during the three months ended March 31, 2018 and 2017 were $431.0 million and $354.1 million , respectively. SJG's average borrowings outstanding under its credit facilities during the three months ended March 31, 2018 and 2017 were $47.7 million and $34.7 million , respectively. The maximum amounts outstanding under its credit facilities during the three months ended March 31, 2018 and 2017 were $85.0 million and $110.1 million , respectively. The SJI and SJG principal credit facilities are provided by a syndicate of banks. In January 2018, the Note Purchase Agreements (NPA) for Senior Unsecured Notes issued by SJI were amended to reflect a financial covenant limiting the ratio of indebtedness to total capitalization (as defined in the respective NPA) to not more than 0.70 to 1, measured at the end of each fiscal quarter. SJI and SJG were in compliance with this covenant as of March 31, 2018 . However, one SJG bank facility still contains a financial covenant limiting the ratio of indebtedness to total capitalization (as defined in the respective credit agreement) to not more that 0.65 to 1 measured at the end of each fiscal quarter. As a result, SJG must ensure that the ratio of indebtedness to total capitalization (as defined in the respective credit agreement) does not exceed 0.65 to 1, as measured at the end of each fiscal quarter. SJG has a commercial paper program under which SJG may issue short-term, unsecured promissory notes to qualified investors up to a maximum aggregate amount outstanding at any time of $200.0 million . The notes have fixed maturities which vary by note, but may not exceed 270 days from the date of issue. Proceeds from the notes are used for general corporate purposes. SJG uses the commercial paper program in tandem with its $200.0 million revolving credit facility and does not expect the principal amount of borrowings outstanding under the commercial paper program and the credit facility at any time to exceed an aggregate of $200.0 million . In the fourth quarter of 2017, SJI entered into a $2.6 billion syndicated, committed Bridge Facility to support its $1.7 billion bid for the assets of the Elizabethtown Gas Company and Elkton Gas Company. The Bridge Facility was upsized to accommodate the aggregate amount of SJI's bank credit facilities and Senior Unsecured Notes pending the amendment of the one financial covenant of the amount of debt-to-capitalization from 0.65 to 1 to 0.70 to 1 . In April 2018, the Bridge Facility was subsequently reduced to approximately $1.16 billion (see Note 17). |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES: GUARANTEES — As of March 31, 2018 , SJI had issued $6.1 million of parental guarantees on behalf of an unconsolidated subsidiary. These guarantees generally expire within the next two years and were issued to enable the subsidiary to market retail natural gas. GAS SUPPLY CONTRACTS - In the normal course of business, SJG and SJRG have entered into long-term contracts for natural gas supplies, firm transportation and gas storage service. The transportation and storage service agreements with interstate pipeline suppliers were made under Federal Energy Regulatory Commission (FERC) approved tariffs. SJG's cumulative obligation for gas supply-related demand charges and reservation fees paid to suppliers for these services averages approximately $5.8 million per month and is recovered on a current basis through the BGSS. SJRG's cumulative obligation for demand charges and reservation fees paid to suppliers for these services is approximately $0.5 million per month. SJRG has also committed to purchase a minimum of 604,000 dts/d and up to 954,000 dts/d of natural gas, from various suppliers, for terms ranging from 3 to 10 years at index-based prices. COLLECTIVE BARGAINING AGREEMENTS — Unionized personnel represent approximately 40% and 57% of SJI's and SJG's workforce at March 31, 2018 , respectively. SJI has collective bargaining agreements with two unions that represent these employees: the International Brotherhood of Electrical Workers (IBEW) Local 1293 and the International Association of Machinists and Aerospace Workers (IAM) Local 76. SJG employees represented by the IBEW operate under a collective bargaining agreement that runs through February 2022. SJG's remaining unionized employees are represented by the IAM and operate under a collective bargaining agreement that runs through August 2021. STANDBY LETTERS OF CREDIT — As of March 31, 2018 , SJI provided $6.0 million of standby letters of credit through its revolving credit facility to enable SJE to market retail electricity and for various construction and operating activities. SJG provided a $0.9 million letter of credit under its revolving credit facility to support the remediation of environmental conditions at certain locations in SJG's service territory. SJG has provided $25.1 million of additional letters of credit under a separate facility outside of the revolving credit facility to support variable-rate demand bonds issued through the New Jersey Economic Development Authority (NJEDA) to finance the expansion of SJG’s natural gas distribution system. PENDING LITIGATION — SJI and SJG are subject to claims arising in the ordinary course of business and other legal proceedings. SJI has been named in, among other actions, certain gas supply contract disputes and certain product liability claims related to our former sand mining subsidiary. SJI is currently involved in a pricing dispute related to two long-term gas supply contracts. On May 8, 2017, a jury from the United States District Court for the District of Colorado returned a verdict in favor of the plaintiff supplier. On July 21, 2017, the Court entered Final Judgment against SJG and SJRG. As a result of this ruling, SJG and SJRG have accrued, including interest, $20.6 million and $53.9 million , respectively, from the first quarter of 2017 through March 31, 2018 . We believe that the amount to be paid by SJG reflects a gas cost that ultimately will be recovered from SJG’s customers through adjusted rates. As such, this amount was recorded as both an Accounts Payable and a reduction of Regulatory Liabilities on the condensed consolidated balance sheets of both SJI and SJG as of March 31, 2018 . The amount associated with SJRG was also recorded as an Accounts Payable on the condensed consolidated balance sheets of SJI as of March 31, 2018 , with charges of $0.1 million to Cost of Sales - Nonutility on the condensed consolidated statements of income of SJI for the three months ended March 31, 2018 . SJI also recorded $0.2 million to Interest Charges on the condensed consolidated statements of income for the three months ended March 31, 2018 . In April 2018, SJI filed an appeal of this judgment. During the pendency of the appeal, SJI continues to dispute the supplier invoices received and has created a reserve to reflect the difference between the invoices and paid amounts. The plaintiff supplier filed a second related lawsuit against SJG and SJRG in the United States District Court for the District of Colorado on December 21, 2017, alleging that SJG and SJRG have continued to breach the gas supply contracts notwithstanding the judgment in the prior lawsuit. The plaintiff supplier is seeking recovery of the amounts disputed by SJI since the earlier judgment, and a declaration regarding the price under the disputed contracts going forward until the contracts terminate in October 2019. SJI moved to stay the second lawsuit pending resolution of the post-judgment motions in the first lawsuit and any appeal of that lawsuit. All legal reserves related to this second lawsuit are recorded as part of the accrued amounts disclosed above. Liabilities related to claims are accrued when the amount or range of amounts of probable settlement costs or other charges for these claims can be reasonably estimated. For matters other than the pricing dispute noted above, SJI has accrued approximately $3.1 million and $ 3.0 million related to all claims in the aggregate as of March 31, 2018 and December 31, 2017 , respectively, of which SJG has accrued approximately $0.8 million and $0.7 million as of March 31, 2018 and December 31, 2017 , respectively. Although SJI and SJG do not presently believe that these matters will have a material adverse effect on its business, given the inherent uncertainties in such situations, SJI and SJG can provide no assurance regarding the outcome of litigation. ENVIRONMENTAL REMEDIATION COSTS — SJG incurred and recorded costs for environmental cleanup of 12 sites where SJG or its predecessors operated gas manufacturing plants. SJG stopped manufacturing gas in the 1950s. SJI and some of its nonutility subsidiaries also recorded costs for environmental cleanup of sites where SJF previously operated a fuel oil business and Morie maintained equipment, fueling stations and storage. Other than the changes discussed in Note 8 to the condensed consolidated financial statements, there have been no changes to the status of SJI’s environmental remediation efforts since December 31, 2017 , as described in Note 15 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017 . |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS: Certain SJI subsidiaries, including SJG, are involved in buying, selling, transporting and storing natural gas and buying and selling retail electricity for their own accounts as well as managing these activities for third parties. These subsidiaries are subject to market risk on expected future purchases and sales due to commodity price fluctuations. SJI and SJG use a variety of derivative instruments to limit this exposure to market risk in accordance with strict corporate guidelines. These derivative instruments include forward contracts, swap agreements, options contracts and futures contracts. As of March 31, 2018 , SJI and SJG had outstanding derivative contracts as follows (1 MMdts = one million decatherms; 1 MMmWh = one million megawatt hours): SJI Consolidated SJG Derivative contracts intended to limit exposure to market risk to: Expected future purchases of natural gas (in MMdts) 45.3 13.3 Expected future sales of natural gas (in MMdts) 53.8 0.3 Expected future purchases of electricity (in MMmWh) 2.4 — Expected future sales of electricity (in MMmWh) 2.0 — Basis and Index related net purchase (sale) contracts (in MMdts) 31.8 (3.1 ) These contracts, which have not been designated as hedging instruments under GAAP, are measured at fair value and recorded in Derivatives - Energy Related Assets or Derivatives - Energy Related Liabilities on the condensed consolidated balance sheets of SJI and SJG. For SJE and SJRG contracts, the net unrealized pre-tax gains (losses) for these energy-related commodity contracts are included with realized gains (losses) in Operating Revenues – Nonutility on the condensed consolidated statements of income for SJI. These pre-tax gains were $23.4 million and $14.7 million for the three months ended March 31, 2018 and 2017, respectively . For SJG's contracts, the costs or benefits are recoverable through the BGSS clause, subject to BPU approval. As a result, the net unrealized pre-tax gains and losses for these energy-related commodity contracts are included with realized gains and losses in Regulatory Assets or Regulatory Liabilities on the condensed consolidated balance sheets of both SJI and SJG. As of March 31, 2018 and December 31, 2017 , SJG had $0.7 million and $2.1 million of unrealized losses, respectively, included in its BGSS related to energy-related commodity contracts. SJI, including SJG, has also entered into interest rate derivatives to hedge exposure to increasing interest rates and the impact of those rates on cash flows of variable-rate debt. These interest rate derivatives, some of which had been designated as hedging instruments under GAAP, are measured at fair value and recorded in Derivatives - Other on the condensed consolidated balance sheets. Hedge accounting has been discontinued prospectively for these derivatives. As a result, any unrealized gains and losses on these derivatives, that were previously included in Accumulated Other Comprehensive Loss (AOCL) on the condensed consolidated balance sheets, are being recorded in earnings over the remaining life of the derivative. In March 2017, SJI entered into a new interest rate derivative and amended the existing interest rate derivative linked to unrealized losses previously recorded in AOCL. SJI reclassified $2.4 million of pre-tax unrealized loss in AOCL to Interest Charges on the condensed consolidated statements of income as a result of the prior hedged transactions being deemed probable of not occurring. For SJG interest rate derivatives, the fair value represents the amount SJG would have to pay the counterparty to terminate these contracts as of those dates. As of March 31, 2018 , SJI’s active interest rate swaps were as follows: Notional Amount Fixed Interest Rate Start Date Maturity Obligor $ 20,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 20,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 10,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 12,500,000 3.530% 12/1/2006 2/1/2036 SJG $ 12,500,000 3.430% 12/1/2006 2/1/2036 SJG The unrealized gains and losses on interest rate derivatives that are not designated as cash flow hedges are included in Interest Charges in the condensed consolidated statements of income. However, for selected interest rate derivatives at SJG, management believes that, subject to BPU approval, the market value upon termination can be recovered in rates and, therefore, these unrealized losses have been included in Other Regulatory Assets in the condensed consolidated balance sheets. The fair values of all derivative instruments, as reflected in the condensed consolidated balance sheets as of March 31, 2018 and December 31, 2017 , are as follows (in thousands): SJI (includes SJG and all other consolidated subsidiaries): Derivatives not designated as hedging instruments under GAAP March 31, 2018 December 31, 2017 Assets Liabilities Assets Liabilities Energy-related commodity contracts: Derivatives - Energy Related - Current $ 24,386 $ 12,486 $ 42,139 $ 46,938 Derivatives - Energy Related - Non-Current 12,268 4,153 5,988 6,025 Interest rate contracts: Derivatives - Other - Current — 526 — 748 Derivatives - Other - Noncurrent — 7,194 — 9,622 Total derivatives not designated as hedging instruments under GAAP $ 36,654 $ 24,359 $ 48,127 $ 63,333 Total Derivatives $ 36,654 $ 24,359 $ 48,127 $ 63,333 SJG: Derivatives not designated as hedging instruments under GAAP March 31, 2018 December 31, 2017 Assets Liabilities Assets Liabilities Energy-related commodity contracts: Derivatives – Energy Related – Current $ 404 $ 784 $ 7,327 $ 9,270 Derivatives – Energy Related – Non-Current — 328 5 170 Interest rate contracts: Derivatives – Other Current — 337 — 389 Derivatives – Other Noncurrent — 5,669 — 6,639 Total derivatives not designated as hedging instruments under GAAP $ 404 $ 7,118 $ 7,332 $ 16,468 Total Derivatives $ 404 $ 7,118 $ 7,332 $ 16,468 SJI and SJG enter into derivative contracts with counterparties, some of which are subject to master netting arrangements, which allow net settlements under certain conditions. These derivatives are presented at gross fair values on the condensed consolidated balance sheets. As of March 31, 2018 and December 31, 2017 , information related to these offsetting arrangements were as follows (in thousands): As of March 31, 2018 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 SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 36,654 $ — $ 36,654 $ (10,086 ) (A) $ — $ 26,568 Derivatives - Energy Related Liabilities $ (16,639 ) $ — $ (16,639 ) $ 10,086 (B) $ 755 $ (5,798 ) Derivatives - Other $ (7,720 ) $ — $ (7,720 ) $ — $ — $ (7,720 ) SJG: Derivatives - Energy Related Assets $ 404 $ — $ 404 $ (342 ) (A) $ — $ 62 Derivatives - Energy Related Liabilities $ (1,112 ) $ — $ (1,112 ) $ 342 (B) $ 755 $ (15 ) Derivatives - Other $ (6,006 ) $ — $ (6,006 ) $ — $ — $ (6,006 ) As of December 31, 2017 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 SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 48,127 $ — $ 48,127 $ (24,849 ) (A) $ — $ 23,278 Derivatives - Energy Related Liabilities $ (52,963 ) $ — $ (52,963 ) $ 24,849 (B) $ 8,832 $ (19,282 ) Derivatives - Other $ (10,370 ) $ — $ (10,370 ) $ — $ — $ (10,370 ) SJG: Derivatives - Energy Related Assets $ 7,332 $ — $ 7,332 $ (208 ) (A) $ — $ 7,124 Derivatives - Energy Related Liabilities $ (9,440 ) $ — $ (9,440 ) $ 208 (B) $ 1,543 $ (7,689 ) Derivatives - Other $ (7,028 ) $ — $ (7,028 ) $ — $ — $ (7,028 ) (A) The balances at March 31, 2018 and December 31, 2017 were related to derivative liabilities which can be net settled against derivative assets. (B) The balances at March 31, 2018 and December 31, 2017 were related to derivative assets which can be net settled against derivative liabilities. The effect of derivative instruments on the condensed consolidated statements of income for the three months ended March 31, 2018 and 2017 are as follows (in thousands): Three Months Ended Derivatives in Cash Flow Hedging Relationships under GAAP 2018 2017 SJI (includes SJG and all other consolidated subsidiaries): Interest Rate Contracts: Losses reclassified from AOCL into income (a) $ (12 ) $ (2,487 ) SJG: Interest Rate Contracts: Losses reclassified from AOCL into income (a) $ (12 ) $ (12 ) (a) Included in Interest Charges Three Months Ended Derivatives Not Designated as Hedging Instruments under GAAP 2018 2017 SJI (includes SJG and all other consolidated subsidiaries): Gains on energy-related commodity contracts (a) $ 23,353 $ 14,688 Gains (Losses) on interest rate contracts (b) 1,628 (1,005 ) Total $ 24,981 $ 13,683 (a) Included in Operating Revenues - Nonutility (b) Included in Interest Charges Certain of SJI’s derivative instruments contain provisions that require immediate payment or demand immediate and ongoing collateralization on derivative instruments in net liability positions in the event of a material adverse change in the credit standing of SJI. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a liability position on March 31, 2018 , is $1.0 million . If the credit-risk-related contingent features underlying these agreements were triggered on March 31, 2018 , SJI would have been required to settle the instruments immediately or post collateral to its counterparties of approximately $0.2 million after offsetting asset positions with the same counterparties under master netting arrangements. |
FAIR VALUE OF FINANCIAL ASSETS
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES | FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES: GAAP establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques. The levels of the hierarchy are described below: • Level 1: Observable inputs, such as quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. For financial assets and financial liabilities measured at fair value on a recurring basis, information about the fair value measurements for each major category is as follows (in thousands): As of March 31, 2018 Total Level 1 Level 2 Level 3 SJI (includes SJG and all other consolidated subsidiaries): Assets Available-for-Sale Securities (A) $ 36 $ 36 $ — $ — Derivatives – Energy Related Assets (B) 36,654 935 14,121 21,598 $ 36,690 $ 971 $ 14,121 $ 21,598 SJG: Assets Derivatives – Energy Related Assets (B) $ 404 $ 342 $ 62 $ — $ 404 $ 342 $ 62 $ — SJI (includes SJG and all other consolidated subsidiaries): Liabilities Derivatives – Energy Related Liabilities (B) $ 16,639 $ 3,947 $ 7,680 $ 5,012 Derivatives – Other (C) 7,720 — 7,720 — $ 24,359 $ 3,947 $ 15,400 $ 5,012 SJG: Liabilities Derivatives – Energy Related Liabilities (B) $ 1,112 $ 1,097 $ 9 $ 6 Derivatives – Other (C) 6,006 — 6,006 — $ 7,118 $ 1,097 $ 6,015 $ 6 As of December 31, 2017 Total Level 1 Level 2 Level 3 SJI (includes SJG and all other consolidated subsidiaries): Assets Available-for-Sale Securities (A) $ 36 $ 36 $ — $ — Derivatives – Energy Related Assets (B) 48,127 5,155 21,869 21,103 $ 48,163 $ 5,191 $ 21,869 $ 21,103 SJG: Assets Derivatives – Energy Related Assets (B) $ 7,332 $ 208 $ 230 $ 6,894 $ 7,332 $ 208 $ 230 $ 6,894 SJI (includes SJG and all other consolidated subsidiaries): Liabilities Derivatives – Energy Related Liabilities (B) $ 52,963 $ 10,687 $ 24,283 $ 17,993 Derivatives – Other (C) 10,370 — 10,370 — $ 63,333 $ 10,687 $ 34,653 $ 17,993 SJG: Liabilities Derivatives – Energy Related Liabilities (B) $ 9,440 $ 1,750 $ 2,848 $ 4,842 Derivatives – Other (C) 7,028 — 7,028 — $ 16,468 $ 1,750 $ 9,876 $ 4,842 (A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. (B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable. Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forward contracts, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary. Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration. (C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment. The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands): SJI (includes SJG and all other consolidated subsidiaries) : Type Fair Value at March 31, 2018 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $14,669 $3,037 Discounted Cash Flow Forward price (per dt) $1.72 - $7.14 [$2.65] (A) Forward Contract - Electric $6,929 $1,975 Discounted Cash Flow Fixed electric load profile (on-peak) 37.45% - 100.00% [53.28%] (B) Fixed electric load profile (off-peak) 0.00% - 62.55% [46.72%] (B) Type Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $13,519 $15,686 Discounted Cash Flow Forward price (per dt) $1.79 - $12.09 [$3.01] (A) Forward Contract - Electric $7,584 $2,307 Discounted Cash Flow Fixed electric load profile (on-peak) 36.36% - 100.00% [53.39%] (B) Fixed electric load profile (off-peak) 0.00% - 63.64% [46.61%] (B) SJG: Type Fair Value at March 31, 2018 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ — $ 6 Discounted Cash Flow Forward price (per dt) $2.16- $2.61 [$2.28] (A) Type Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ 6,894 $ 4,842 Discounted Cash Flow Forward price (per dt) $2.42 - $6.67 [$5.25] (A) (A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas. (B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak. The changes in fair value measurements of Derivatives – Energy Related Assets and Liabilities for the three months ended March 31, 2018 and 2017 , using significant unobservable inputs (Level 3), are as follows (in thousands): Three Months Ended SJI (includes SJG and all other consolidated subsidiaries): Balance at beginning of period $ 3,110 Other Changes in Fair Value from Continuing and New Contracts, Net 3,989 Settlements 9,487 Balance at end of period $ 16,586 SJG: Balance at beginning of period $ 2,052 Other Changes in Fair Value from Continuing and New Contracts, Net (6 ) Settlements (2,052 ) Balance at end of period $ (6 ) Three Months Ended SJI (includes SJG and all other consolidated subsidiaries): Balance at beginning of period $ 9,035 Other Changes in Fair Value from Continuing and New Contracts, Net (988 ) Settlements 8,187 Balance at end of period $ 16,234 SJG: Balance at beginning of period $ 926 Other Changes in Fair Value from Continuing and New Contracts, Net 511 Settlements (926 ) Balance at end of period $ 511 Total gains included in earnings for SJI for the three months ended March 31, 2018 that are attributable to the change in unrealized gains relating to those assets and liabilities included in Level 3 still held as of March 31, 2018 , are $4.0 million . These gains are included in Operating Revenues-Nonutility on the condensed consolidated statements of income. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2018 | |
Long-term Debt, Unclassified [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT: In January 2018, SJI issued the following Medium Term Notes (MTN's): (a) $25.0 million aggregate principal amount of 3.32% Senior Notes, Series 2017A-2, due January 2025 and (b) $25.0 million aggregate principal amount of 3.56% Senior Notes, Series 2017B-2, due January 2028. SJI and SJG did not issue or retire any other long-term debt during the three months ended March 31, 2018 . |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS: The following table summarizes the changes in SJI's accumulated other comprehensive loss (AOCL) for the three months ended March 31, 2018 (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 January 1, 2018 (a) $ (36,262 ) $ (396 ) $ (10 ) $ (97 ) $ (36,765 ) Other comprehensive income before reclassifications — — — — — Amounts reclassified from AOCL (b) — 9 — — 9 Net current period other comprehensive income — 9 — — 9 Balance at March 31, 2018 (a) $ (36,262 ) $ (387 ) $ (10 ) $ (97 ) $ (36,756 ) (a) Determined using a combined average statutory tax rate of 25% . (b) See table below. The following table provides details about reclassifications out of SJI's AOCL for the three months ended March 31, 2018 (in thousands): Components of AOCL Amounts Reclassified from AOCL Affected Line Item in the Condensed Consolidated Statements of Income Three Months Ended Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges $ 12 Interest Charges Income Taxes (3 ) Income Taxes (a) Losses from reclassifications for the period net of tax $ 9 (a) Determined using a combined average statutory tax rate of 25% . The following table summarizes the changes in SJG's AOCL for the three months ended March 31, 2018 (in thousands): Postretirement Liability Adjustment Unrealized Gain (Loss) on Derivatives-Other Total Balance at January 1, 2018 (a) $ (25,507 ) $ (490 ) $ (25,997 ) Other comprehensive loss before reclassifications — — — Amounts reclassified from AOCL (b) — 9 9 Net current period other comprehensive income — 9 9 Balance at March 31, 2018 (a) $ (25,507 ) $ (481 ) $ (25,988 ) (a) Determined using a combined average statutory tax rate of 25% . (b) See table below. The reclassifications out of SJG's AOCL during the three months ended March 31, 2018 are as follows (in thousands): Components of AOCL Amounts Reclassified from AOCL Affected Line Item in the Condensed Statements of Income Three Months Ended Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges $ 12 Interest Charges Income Taxes (3 ) Income Taxes (a) Losses from reclassifications for the period net of tax $ 9 (a) Determined using a combined average statutory tax rate of 25% . |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE: At contract inception, SJI and SJG assess the goods and services promised in all of its contracts with customers, and identifies a performance obligation for each promise to transfer to a customer a distinct good or service. As applicable for each revenue stream and customer contract type, SJI and SJG follow two approaches: • SJI and SJG have elected the Practical Expedient in ASC 606 for recognizing revenue on contracts with customers on a portfolio of performance obligations with similar characteristics, as we reasonably expect the effects of applying the guidance to the portfolio would not differ materially from applying it to individual contracts. • SJI and SJG apply the accounting guidance for recognizing revenue on contracts with customers on a series of distinct goods and services as one performance obligation, as long as the distinct goods and services are part of a series that are substantially the same and satisfied over time, and the same method would be used to measure progress towards satisfaction of the performance obligation. All performance obligations noted below under "Revenue Recognized Over Time" apply this guidance. Below is a listing of all performance obligations that arise from contracts with customers, along with details on the satisfaction of each performance obligation, the significant payment terms, and the nature of the goods and services being transferred: Revenue Recognized Over Time: Reportable Segment Performance Obligation Description Gas Utility Operations; Wholesale Energy Operations; Retail Gas and Other Operations Natural Gas SJG sells natural gas to residential, commercial and industrial customers, and price is based on regulated tariff rates which are established by the BPU. There is an implied contract between SJG and a customer for the purchase, delivery, and sale of gas, and the customer is billed monthly, with payment due within 30 days. SJRG sells natural gas to commercial customers at either a fixed quantity or at variable quantities based on a customer's needs. Payment is due on the 25th of each month for the previous month's deliveries. SJE sells natural gas to commercial, industrial and residential customers at fixed prices throughout the life of the contract, with the customer billed monthly and payment due within 30 days. For all three segments, revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) or through the passage of time ratably as the customer uses natural gas, which represents satisfaction of the performance obligation. Gas Utility Operations; Wholesale Energy Operations Pipeline transportation capacity SJG and SJRG sell pipeline transportation capacity on a wholesale basis to various customers on the interstate pipeline system and transport natural gas purchased directly from producers or suppliers to their customers. These contracts to sell this capacity are at a price, quantity and time period agreed to by both parties determined on a contract by contract basis. Payment is due on the 25th of each month for the previous month's deliveries. Revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) or through the passage of time ratably coinciding with the delivery of gas and the customer obtaining control, which represents satisfaction of the performance obligation. Wholesale Energy Operations Fuel Management Services SJRG currently has ten fuel supply management contracts where SJRG has acquired pipeline transportation capacity that allows SJRG to match end users, many of which are merchant generators, with producers looking to find a long-term solution for their supply. Natural gas is sold to the merchant generator daily based on their needs, with payment made either weekly or biweekly depending on the contract. Revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) coinciding with the delivery of gas and the customer obtaining control, which represents satisfaction of the performance obligation. Retail Electric Operations Electricity SJE sells electricity to commercial, industrial and residential customers at fixed prices throughout the life of the contract, with the customer billed monthly and payment due within 30 days. Revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) or through the passage of time ratably coinciding with the delivery of electricity and the customer obtaining control, which represents satisfaction of the performance obligation. On-Site Energy Production Solar Marina has several wholly-owned solar projects that earn revenue based on electricity generated. The customer pays monthly as electricity is being generated, with payment due within 30 days. The performance obligation is satisfied as kwh's of energy are generated (i.e. unit of output), which is when revenue is recognized. On-Site Energy Production Marina Thermal Facility Marina has a contract with a casino and resort in Atlantic City, NJ to provide cooling, heating and emergency power. There are multiple performance obligations with this contract, including electric, chilled water and hot water, and each of these are considered distinct and separately identifiable, and they are all priced separately. These performance obligations are satisfied over time ratably as they are used by the customer, who is billed monthly. Payment is due within 30 days. Revenue Recognized at a Point in Time: Reportable Segment Performance Obligation Description On-Site Energy Production SREC's The customer is billed based on a contracted amount of SREC's to be sold, with the price based on the market price of the SRECs at the time of generation. This does not represent variable consideration as the price is known and established at the time of generation and delivery to the customer. The performance obligation is satisfied at the point in time the SREC is delivered to the customer, which is when revenue is recognized. Payment terms are approximately 10 days subsequent to delivery. For all revenue streams listed above, revenue is recognized using the Practical Expedient in ASC 606 which allows an entity to recognize revenue in the amount that is invoiced, as long as that amount corresponds to the value to the customer ("Invoiced Practical Expedient"). SJI's and SJG's contracts with customers discussed above are at prices that are known to the customer at the time of delivery, either through a fixed contractual price or market prices that are established and tied to each delivery. These amounts match the value to the customer as they are purchasing and obtaining the good or service on the same day at the agreed-upon price. This eliminates any variable consideration in transaction price, and as a result revenue is recognized at this price at the time of delivery. SJI and SJG have determined that the above methods provide a faithful depiction of the transfer of goods or services to the customer. For all above performance obligations, SJI's and SJG's efforts are expended throughout the contract based on seasonality and customer needs. Further, for various contracts among each performance obligation, SJI and SJG may have a stand ready obligation to provide goods or services on an as needed basis to the customer. Because the Invoiced Practical Expedient is used for recognizing revenue, SJI and SJG further adopted the Practical Expedient in ASC 606 that allows both company's to not disclose additional information regarding remaining performance obligations. Revenues from contracts with customers total $444.0 million and $193.9 million for SJI and SJG, respectively. The SJG balance is a part of the gas utility operating segment, and is before intercompany eliminations with other SJI entities. Revenues on the condensed consolidated statements of income that are not with contracts with customers consist of (a) revenues from alternative revenue programs at the gas utility operations at SJG, and (b) nonutility revenue from derivative contracts at the wholesale energy, retail gas and retail electric operating segments. SJI and SJG disaggregate revenue from contracts with customers into customer type and product line. SJI and SJG have determined that disaggregating revenue into these categories achieves the disclosure objective in ASC 606 to depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors. Further, disaggregating revenue into these categories is consistent with information regularly reviewed by the CODM in evaluating the financial performance of SJI's operating segments. SJG only operates in the Gas Utility Operations segment. See Note 6 for further information regarding SJI's operating segments. Disaggregated revenues from contracts with customers, by both customer type and product line, are disclosed below, by operating segment, for the three months ended March 31, 2018 (in thousands): Three Months Ended Gas Utility Operations Wholesale Energy Operations Retail Gas and Other Operations Retail Electric Operations On-Site Energy Production Appliance Service Operations Corporate Services and Intersegment Total Customer Type: Residential 147,262 — — 8,096 — 520 — 155,878 Commercial & Industrial 40,805 173,846 33,246 21,950 21,157 — (8,770 ) 282,234 OSS & Capacity Release 5,204 — — — — — — 5,204 Other 663 — — — — — — 663 193,934 173,846 33,246 30,046 21,157 520 (8,770 ) 443,979 Product Line: Gas 193,934 173,846 33,246 — — — (4,574 ) 396,452 Electric — — — 30,046 — — (1,668 ) 28,378 Solar — — — — 11,836 — (2,528 ) 9,308 CHP — — — — 7,853 — — 7,853 Landfills — — — — 1,468 — — 1,468 Other — — — — — 520 — 520 193,934 173,846 33,246 30,046 21,157 520 (8,770 ) 443,979 The following table provides information about SJI's and SJG's receivables and unbilled revenue from contracts with customers (in thousands): Accounts Receivable (1) Unbilled Revenue (2) SJI (including SJG and all other consolidated subsidiaries): Beginning balance as of 1/1/18 $ 202,379 $ 73,377 Ending balance as of 3/31/18 243,395 62,601 Increase (Decrease) $ (41,016 ) $ 10,776 SJG: Beginning balance as of 1/1/18 $ 78,571 $ 54,980 Ending balance as of 3/31/18 128,583 44,287 Increase (Decrease) $ (50,012 ) $ 10,693 (1) Included in Accounts Receivable in the condensed consolidated balance sheets. A receivable is SJI's and SJG's right to consideration that is unconditional, as only the passage of time is required before payment is expected from the customer. All of SJI's and SJG's Accounts Receivable arise from contracts with customers. (2) Included in Unbilled Revenues in the condensed consolidated balance sheets. All unbilled revenue for SJI and SJG arises from contracts with customers. Unbilled revenue relates to SJI's and SJG's right to receive payment for commodity delivered but not yet billed. This represents contract assets that arise from contracts with customers, which is defined in ASC 606 as the right to payment in exchange for goods already transferred to a customer, excluding any amounts presented as a receivable. The unbilled revenue is transferred to accounts receivable when billing occurs and the rights to collection become unconditional. The change in unbilled revenues for the three months ended March 31, 2018 is due primarily to the timing difference between SJI and SJG delivering the commodity to the customer and the customer actually receiving the bill for payment. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS: In April 2018, the Company completed the following public offerings, the net proceeds of which are expected to fund a portion of the consideration to be paid for the assets of Elizabethtown Gas and Elkton Gas (see Note 1): • 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, including 1,652,542 shares pursuant to the underwriters’ option. The gross proceeds from these shares was $173.7 million , with net proceeds after deducting underwriting discounts and commissions of $167.7 million . The remaining 6,779,661 shares of common stock ("Forward Shares") are to be sold by Bank of America, N.A., as forward seller, pursuant to a forward sale agreement. The Company received no proceeds from the sale of the Forward Shares at the closing. SJI has an option to settle the forward sale agreement by delivering newly issued shares of SJI common stock and receive proceeds, subject to certain adjustments, from the sale of those shares, assuming one or more future physical settlements of the forward sale agreement, no later than April 2019. SJI may also choose to settle the forward sale contract with a cash payment, or multiple cash payments, no later than April 2019. In the event SJI elects to settle all or a portion of the forward sale contract with a cash payment, no additional shares of SJI common stock would be issued under the forward sale contract for the portions that were cash settled. • 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. This offering resulted in gross proceeds of approximately $287.5 million , with net proceeds after deducting underwriting discounts and commissions of $278.9 million . In April 2018, SJI entered into a Note Purchase Agreement (NPA) that provides for the issuance by the Company of an aggregate of $250.0 million of senior unsecured notes. Pursuant to the NPA, the Company issued $90.0 million of 3.18% Senior Notes, Series 2018A, due April 2021. The NPA also provides for the issuance of (a) $80.0 million aggregate principal amount of the Company’s 3.78% Senior Notes, Series 2018B, due 2028, on the ten -year anniversary of the date of initial issuance; and (b) $80.0 million aggregate principal amount of the Company’s 3.88% Senior Notes, Series 2018C, due 2030, on the twelve -year anniversary of the date of initial issuance. The Company anticipates issuing the additional notes at future dates to be determined. In April 2018, SJI paid down $116.0 million of its syndicated revolving credit facility, along with its $50.0 million revolving credit facility. As a result of SJI's equity and debt issuances noted above, along with the successful amendment of SJI's Senior Unsecured Notes and bank credit facilities (see Note 10), the Bridge Facility has subsequently been reduced to $1.16 billion and is expected to be reduced by future issuances of long-term and short-term debt closer to the date of the closing of the acquisition. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
GENERAL | GENERAL - South Jersey Industries, Inc. (SJI or the Company) currently provides a variety of energy-related products and services primarily through the following wholly-owned subsidiaries: ▪ South Jersey Gas Company (SJG) is a regulated natural gas utility. SJG distributes natural gas in the seven southernmost counties of New Jersey. ▪ South Jersey Energy Company (SJE) acquires and markets natural gas and electricity to retail end users and provides total energy management services to commercial, industrial and residential customers. ▪ South Jersey Resources Group, LLC (SJRG) markets natural gas storage, commodity and transportation assets along with fuel management services on a wholesale basis in the mid-Atlantic, Appalachian and southern states. ▪ South Jersey Exploration, LLC (SJEX) owns oil, gas and mineral rights in the Marcellus Shale region of Pennsylvania. ▪ Marina Energy, LLC (Marina) develops and operates on-site energy-related projects. It currently operates projects in New Jersey, Maryland, Massachusetts and Vermont. The significant wholly-owned subsidiaries of Marina include: • ACB Energy Partners, LLC (ACB) owns and operates a natural gas fueled combined heating, cooling and power facility located in Atlantic City, New Jersey. • AC Landfill Energy, LLC (ACLE), BC Landfill Energy, LLC (BCLE), SC Landfill Energy, LLC (SCLE) and SX Landfill Energy, LLC (SXLE) own and operate landfill gas-to-energy production facilities in Atlantic, Burlington, Salem and Sussex Counties located in New Jersey. • MCS Energy Partners, LLC (MCS), NBS Energy Partners, LLC (NBS) and SBS Energy Partners, LLC (SBS) own and operate solar-generation sites located in New Jersey. ▪ South Jersey Energy Service Plus, LLC (SJESP) serviced residential and small commercial HVAC systems, installed small commercial HVAC systems, provided plumbing services and serviced appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. On September 1, 2017, SJESP sold certain assets of its residential and small commercial HVAC and plumbing business to a third party. SJESP continues to receive commissions paid on service contracts from the third party and will do so on a go forward basis. ▪ SJI Midstream, LLC (Midstream) invests in infrastructure and other midstream projects, including a current project to build an approximately 118 -mile natural gas pipeline in Pennsylvania and New Jersey. |
BASIS OF PRESENTATION | BASIS OF PRESENTATION - SJI's condensed consolidated financial statements include the accounts of SJI, its wholly-owned subsidiaries (including SJG) and subsidiaries in which SJI has a controlling interest. SJI eliminates all significant intercompany accounts and transactions. In management’s opinion, the unaudited condensed consolidated financial statements of SJI and SJG reflect all normal and recurring adjustments needed to fairly present their respective financial positions, operating results and cash flows at the dates and for the periods presented. SJI’s and SJG'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. As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the accompanying unaudited condensed consolidated financial statements of SJI and SJG contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). These financial statements should be read in conjunction with SJI’s and SJG's Annual Reports on Form 10-K for the year ended December 31, 2017 for a more complete discussion of the accounting policies and certain other information. |
RECLASSIFICATIONS | Certain reclassifications have been made to SJI's and SJG's prior period condensed consolidated statements of income to conform to the current period presentation. The non-service cost components of net periodic pension and postretirement benefit costs are now included as a reduction to Other Income and Expense, as opposed to being recorded as an Operations Expense, to conform with ASU 2017-07, which is described below under "New Accounting Pronouncements." This caused Other Income to be reduced, and Operations Expense to also be reduced, by $1.2 million and $0.6 million for SJI and SJG, respectively, for the three months ended March 31, 2017. This also caused a reclassification to SJI's prior period segments disclosure in Note 6 to increase Operating Income within both the Gas Utility Operations and Corporate & Services segments by $0.6 million for the three months ended March 31, 2017. Certain reclassifications have been made to SJI's prior period segments disclosures to conform to the current period presentation. The activities of SJI Midstream, which were presented in the Corporate & Services segment during the three months ended March 31, 2017, are now separated into the Midstream segment for the same period in 2018. This caused prior period adjustments to Interest Charges, Income Taxes and Property Additions in Note 6. |
REVENUE-BASED TAXES | REVENUE-BASED TAXES - SJG collects certain revenue-based energy taxes from its customers. Such taxes include the New Jersey State Sales Tax and Public Utilities Assessment (PUA). State sales tax is recorded as a liability when billed to customers and is not included in revenue or operating expenses. |
IMPAIRMENT OF LONG-LIVED ASSETS | IMPAIRMENT OF LONG-LIVED ASSETS - Long-lived assets that are held and used are reviewed for impairment whenever events or changes in circumstances indicate carrying values may not be recoverable. Such reviews are performed in accordance with ASC 360. An impairment loss is indicated if the total future estimated undiscounted cash flows expected from an asset are less than its carrying value. An impairment charge is measured by the difference between an asset's carrying amount and fair value with the difference recorded within Operating Expenses on the condensed consolidated statements of income. Fair values can be determined by a variety of valuation methods, including third-party appraisals, sales prices of similar assets, and present value techniques. |
GAS EXPLORATION AND DEVELOPMENT | GAS EXPLORATION AND DEVELOPMENT - SJI capitalizes all costs associated with gas property acquisition, exploration and development activities under the full cost method of accounting. Capitalized costs include costs related to unproved properties, which are not amortized until proved reserves are found or it is determined that the unproved properties are impaired. All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. |
TREASURY STOCK | TREASURY STOCK - SJI uses the par value method of accounting for treasury stock. |
INCOME TAXES | INCOME TAXES - Deferred income taxes are provided for all significant temporary differences between the book and taxable bases of assets and liabilities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 740 - “Income Taxes.” A valuation allowance is established when it is determined that it is more likely than not that a deferred tax asset will not be realized. On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Reform") was enacted into law, which changed various corporate income tax provisions within the existing Internal Revenue Code. The law became effective January 1, 2018 but was required to be accounted for in the period of enactment, as such SJI adopted the new law in the fourth quarter of 2017. SJI and SJG were impacted in several ways as a result of Tax Reform, including provisions related to the permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%, modification of bonus depreciation and changes to the deductibility of certain business-related expenses. The SEC staff issued Staff Accounting Bulletin 118 (SAB 118), which provides guidance on accounting for the tax effects of Tax Reform. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date of Tax Reform for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of Tax Reform for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of Tax Reform is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of Tax Reform. SJI and SJG were able to make reasonable, good faith estimates of certain effects and, therefore, recorded provisional adjustments for the following: the tax rules regarding the appropriate bonus deprecation rate that should be applied to assets placed in service after September 27, 2017, including the information required to compute the applicable depreciable tax basis. Further, Tax Reform is unclear in certain respects and will require interpretations and implementing regulations by the Internal Revenue Service, as well as state tax authorities. Tax Reform could also be subject to potential amendments and technical corrections which could impact the Company’s financial statements. Any required changes to the provisional estimates would result in the recording of regulatory assets or liabilities to the extent such amounts are probable of settlement or recovery through customer rates and a net change to income tax expense for any other amounts. Final adjustments to the provisional amounts are expected to be recorded by the third quarter of 2018. The accounting for all other applicable provisions of Tax Reform is considered complete based on the current interpretation. |
GOODWILL | GOODWILL - Goodwill represents the excess of the consideration paid over the fair value of identifiable net assets acquired. Goodwill is not amortized, but instead is subject to impairment testing on an annual basis, and between annual tests whenever events or changes in circumstances indicate that the fair value of a reporting unit may be below its carrying amount. No such events have occurred during the three months ended March 31, 2018 . |
NEW ACCOUNTING PRONOUNCEMENTS | NEW ACCOUNTING PRONOUNCEMENTS - Other than as described below, no new accounting pronouncement issued or effective during 2018 or 2017 had, or are expected to have, a material impact on the condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC Topic 606). This ASU supersedes the revenue recognition requirements in FASB ASC 605, Revenue Recognition , and in most industry-specific topics. The new guidance identifies how and when entities should recognize revenue. The new rules establish a core principle requiring the recognition of revenue to depict the transfer of promised goods or services to customers in an amount reflecting the consideration to which the entity expects to be entitled in exchange for such goods or services. In connection with this new standard, the FASB has issued several amendments to ASU 2014-09, as follows: • In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) . This standard improves the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. • In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing . This standard clarifies identifying performance obligations and the licensing implementation guidance. • In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . This standard provides additional guidance on (a) the objective of the collectibility criterion, (b) the presentation of sales tax collected from customers, (c) the measurement date of non-cash consideration received, (d) practical expedients in respect of contract modifications and completed contracts at transition, and (e) disclosure of the effects of the accounting change in the period of adoption. • In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , which amends certain narrow aspects of the guidance, including the disclosure of remaining performance obligations and prior-period performance obligations, as well as other amendments to the guidance on loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples. The new guidance in ASU 2014-09, as well as all amendments discussed above, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. On January 1, 2018, SJI and SJG adopted ASU 2014-09 and all amendments, which meant adopting the guidance in ASC 606. SJI and SJG adopted the new guidance using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under ASC 605. See Note 16. The methods of recognizing revenue for SJI's and SJG's contracts with customers is the same under ASC 605 and ASC 606, as revenues from contracts that SJI and SJG have with customers are currently recorded as gas or electricity is delivered to the customer, which is consistent with the new guidance under ASC 606. As such, there was no significant impact to revenues for the quarter ended March 31, 2018 as a result of applying ASC 606, and there was no cumulative catch-up to retained earnings under the modified retrospective method for changes in accounting for revenues. Further, there were no significant changes to our business processes, systems or internal controls over financial reporting needed to support recognition and disclosure under the new guidance. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which enhances the reporting model for financial instruments and includes amendments to address aspects of recognition, measurement, presentation and disclosure. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted for only certain portions of the new guidance. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In March 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which establishes a new lease accounting model for lessees. The new standard requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The new standard also will result in enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases. The accounting for leases by the lessor remains relatively the same. The standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, with early adoption permitted. Management has formed an implementation team that is inventorying leases and evaluating the impact that adoption of this guidance will have on SJI's and SJG's financial statements, which includes monitoring industry specific developments including the exposure draft issued by the FASB that would introduce a land easement practical expedient to ASC 842. Consistent with the requirements of the standard, SJI and SJG expect to both transition to the new guidance using the modified retrospective approach, although this could be subject to change based on new guidance from the FASB. The Company does not plan to early adopt the new guidance. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . This standard requires recognition of the current and deferred income tax effects of an intra-entity asset transfer, other than inventory, when the transfer occurs, as opposed to current GAAP, which requires companies to defer the income tax effects of intra-entity asset transfers until the asset has been sold to an outside party. The income tax effects of intra-entity inventory transfers will continue to be deferred until the inventory is sold. ASU 2016-16 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods, with early adoption permitted. The standard is required to be adopted on a modified retrospective basis with a cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . This new standard provides amended and clarifying guidance regarding whether an integrated set of assets and activities acquired is deemed the acquisition of a business (and, thus, accounted for as a business combination) or the acquisition of assets. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. The amendments in this update are effective for annual and any interim impairment tests performed in periods beginning after December 31, 2019. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU is designed to improve guidance related to the presentation of defined benefit costs in the income statement. In particular, this ASU requires an employer to report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Adoption of this guidance was applied retrospectively and did not have a material impact on the financial statements of SJI or SJG; however, current and prior period presentation on the condensed consolidated statements of income were modified for SJI and SJG to conform to this guidance, as described under “Basis of Presentation” above. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU clarifies and reduces both (i) diversity in practice and (ii) cost and complexity when applying the guidance in Topic 718, to a change to the terms and conditions of a share-based payment award. This standard is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, with early adoption permitted. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . This ASU is intended to improve the financial reporting of hedging relationships so that it represents a more faithful portrayal of an entity’s risk management activities (i.e. to help financial statement users understand an entity’s risk exposures and the manner in which hedging strategies are used to manage them), as well as to further simplify the application of the hedge accounting guidance in GAAP. The standard is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income . This ASU allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from Tax Reform. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Reform and will improve the usefulness of information reported to financial statement users. The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Management is currently determining the impact that adoption of this guidance will have on the financial statements of SJI and SJG. In February 2018, the FASB issued ASU 2018-03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which gave improvements and enhancements to ASU 2016-01 discussed above. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. SJI and SJG adopted this guidance during the first quarter of 2018 in conjunction with adopting ASU 2016-01 discussed above. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In March 2018, the FASB issued ASU 2018-04, Investments—Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 (SEC Update) . This ASU incorporates recent SEC guidance which was issued in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and SEC rules and regulation. ASU No. 2018-04 was effective upon issuance. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (SEC Update) . This ASU incorporates recent SEC guidance related to the income tax accounting implications of Tax Reform. ASU No. 2018-05 was effective upon issuance. Adoption of this guidance did not have an impact on the financial statement results of SJI or SJG. |
FAIR VALUE | (A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. (B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable. Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forward contracts, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary. Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration. (C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment. GAAP establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques. The levels of the hierarchy are described below: • Level 1: Observable inputs, such as quoted prices in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. • Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. Assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of financial assets and financial liabilities and their placement within the fair value hierarchy. |
STOCK-BASED COMPENSATION PLAN (
STOCK-BASED COMPENSATION PLAN (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the nonvested restricted stock awards outstanding and the assumptions used to estimate the fair value of the awards | The following table summarizes the nonvested restricted stock awards outstanding for SJI at March 31, 2018 and the assumptions used to estimate the fair value of the awards: Grants Shares Outstanding Fair Value Per Share Expected Volatility Risk-Free Interest Rate Officers & Key Employees - 2016 - TSR 58,205 $ 22.53 18.1 % 1.31 % 2016 - CEGR, Time 73,344 $ 23.52 N/A N/A 2017 - TSR 49,981 $ 32.17 20.8 % 1.47 % 2017 - CEGR, Time 81,372 $ 33.69 N/A N/A 2018 - TSR 64,290 $ 31.05 21.9 % 2.00 % 2018 - CEGR, Time 120,924 $ 31.23 N/A N/A Directors - 2018 26,416 $ 31.16 N/A N/A |
Summary of the total stock-based compensation cost for the period | The following table summarizes the total stock-based compensation cost to SJI for the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended 2018 2017 Officers & Key Employees $ 1,100 $ 1,070 Directors 206 256 Total Cost 1,306 1,326 Capitalized (101 ) (88 ) Net Expense $ 1,205 $ 1,238 |
Summary of information regarding restricted stock award activity during the period excluding accrued dividend equivalents | The following table summarizes information regarding restricted stock award activity for SJI during the three months ended March 31, 2018 , excluding accrued dividend equivalents: Officers &Other Key Employees Directors Weighted Average Fair Value Nonvested Shares Outstanding, January 1, 2018 342,793 30,394 $ 28.60 Granted 185,214 26,416 $ 31.17 Cancelled/Forfeited (34,990 ) — $ 28.21 Vested (44,901 ) (30,394 ) $ 30.56 Nonvested Shares Outstanding, March 31, 2018 448,116 26,416 $ 29.46 |
AFFILIATIONS, DISCONTINUED OP25
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Summary of operating results of discontinued operations | Summarized operating results of the discontinued operations for the three months ended March 31, 2018 and 2017 , were (in thousands, except per share amounts): Three Months Ended 2018 2017 Loss before Income Taxes: Sand Mining $ (40 ) $ (17 ) Fuel Oil (42 ) (29 ) Income Tax Benefits 16 16 Loss from Discontinued Operations — Net $ (66 ) $ (30 ) Earnings Per Common Share from Discontinued Operations — Net: Basic and Diluted $ — $ — |
Summary of related party transactions | A summary of related-party transactions involving SJG, excluding pass-through items, included in SJG's Operating Revenues were as follows (in thousands): Three Months Ended 2018 2017 Operating Revenues/Affiliates: SJRG $ 2,588 $ 963 Marina 103 82 Other 23 21 Total Operating Revenue/Affiliates $ 2,714 $ 1,066 Related-party transactions involving SJG, excluding pass-through items, included in SJG's Cost of Sales and Operating Expenses were as follows (in thousands): Three Months Ended 2018 2017 Costs of Sales/Affiliates (Excluding depreciation) SJRG* $ 25,338 $ 10,450 Operations Expense/Affiliates: SJI $ 7,043 $ 6,050 Millennium 697 708 Other (115 ) (39 ) Total Operations Expense/Affiliates $ 7,625 $ 6,719 *As discussed in Note 1 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2017 , revenues and expenses related to the energy trading activities of the wholesale energy operations at SJRG are presented on a net basis in Operating Revenues – Nonutility on the condensed consolidated income statement. |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of common stock shares issued and outstanding | The following shares were issued and outstanding for SJI: 2018 Beginning Balance, January 1 79,549,080 New Issuances During the Period: Stock-Based Compensation Plan 63,809 Ending Balance, March 31 79,612,889 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Reconciliation of cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands): As of March 31, 2018 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 6,312 $ 3,398 Restricted Investments 16,713 2,322 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 23,025 $ 5,720 As of December 31, 2017 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 7,819 $ 1,707 Restricted Investments 31,876 2,912 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 39,695 $ 4,619 |
Reconciliation of restricted cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows (in thousands): As of March 31, 2018 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 6,312 $ 3,398 Restricted Investments 16,713 2,322 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 23,025 $ 5,720 As of December 31, 2017 Balance Sheet Line Item SJI SJG Cash and Cash Equivalents $ 7,819 $ 1,707 Restricted Investments 31,876 2,912 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 39,695 $ 4,619 |
SEGMENTS OF BUSINESS (Tables)
SEGMENTS OF BUSINESS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segments of Business | Information about SJI’s operations in different reportable operating segments is presented below (in thousands): Three Months Ended 2018 2017 Operating Revenues: Gas Utility Operations $ 234,459 $ 196,814 Energy Group: Wholesale Energy Operations 190,343 127,517 Retail Gas and Other Operations 40,201 36,878 Retail Electric Operations 44,035 48,957 Subtotal Energy Group 274,579 213,352 Energy Services: On-Site Energy Production 21,157 19,612 Appliance Service Operations 520 1,658 Subtotal Energy Services 21,677 21,270 Corporate and Services 13,000 11,596 Subtotal 543,715 443,032 Intersegment Sales (21,770 ) (17,203 ) Total Operating Revenues $ 521,945 $ 425,829 Three Months Ended 2018 2017 Operating Income (See Note 1): Gas Utility Operations $ 92,801 $ 81,225 Energy Group: Wholesale Energy Operations 75,657 (11,626 ) Retail Gas and Other Operations (5,758 ) (1,667 ) Retail Electric Operations (208 ) 1,306 Subtotal Energy Group 69,691 (11,987 ) Energy Services: On-Site Energy Production (554 ) (1,969 ) Appliance Service Operations 503 (72 ) Subtotal Energy Services (51 ) (2,041 ) Corporate and Services (4,571 ) 1,667 Total Operating Income $ 157,870 $ 68,864 Depreciation and Amortization: Gas Utility Operations $ 20,315 $ 17,362 Energy Group: Wholesale Energy Operations 23 28 Retail Gas and Other Operations 75 83 Subtotal Energy Group 98 111 Energy Services: On-Site Energy Production 10,271 11,593 Appliance Service Operations — 54 Subtotal Energy Services 10,271 11,647 Corporate and Services 3,214 401 Total Depreciation and Amortization $ 33,898 $ 29,521 Interest Charges (See Note 1): Gas Utility Operations $ 6,728 $ 5,878 Energy Group: Wholesale Energy Operations — 3,059 Retail Gas and Other Operations 146 85 Subtotal Energy Group 146 3,144 Energy Services: On-Site Energy Production 3,847 5,814 Midstream 426 510 Corporate and Services 7,470 4,731 Subtotal 18,617 20,077 Intersegment Borrowings (4,645 ) (3,332 ) Total Interest Charges $ 13,972 $ 16,745 Three Months Ended 2018 2017 Income Taxes (See Note 1): Gas Utility Operations $ 21,836 $ 29,911 Energy Group: Wholesale Energy Operations 19,127 (6,319 ) Retail Gas and Other Operations (1,534 ) (447 ) Retail Electric Operations (58 ) 535 Subtotal Energy Group 17,535 (6,231 ) Energy Services: On-Site Energy Production (1,157 ) (3,069 ) Appliance Service Operations 131 (17 ) Subtotal Energy Services (1,026 ) (3,086 ) Midstream 62 (84 ) Corporate and Services (1,992 ) 1,360 Total Income Taxes $ 36,415 $ 21,870 Property Additions (See Note 1): Gas Utility Operations $ 50,237 $ 62,280 Energy Group: Wholesale Energy Operations 5 3 Retail Gas and Other Operations 173 295 Subtotal Energy Group 178 298 Energy Services: On-Site Energy Production 1,113 7,349 Appliance Service Operations — 6 Subtotal Energy Services 1,113 7,355 Midstream 211 152 Corporate and Services 3,345 93 Total Property Additions $ 55,084 $ 70,178 March 31, 2018 December 31, 2017 Identifiable Assets: Gas Utility Operations $ 2,930,127 $ 2,865,974 Energy Group: Wholesale Energy Operations 150,330 208,785 Retail Gas and Other Operations 57,497 56,935 Retail Electric Operations 32,149 34,923 Subtotal Energy Group 239,976 300,643 Energy Services: On-Site Energy Production 584,349 582,587 Appliance Service Operations 491 1,338 Subtotal Energy Services 584,840 583,925 Midstream 64,831 63,112 Discontinued Operations 1,751 1,757 Corporate and Services 640,996 711,038 Intersegment Assets (572,441 ) (661,363 ) Total Identifiable Assets $ 3,890,080 $ 3,865,086 |
REGULATORY ASSETS AND REGULAT29
REGULATORY ASSETS AND REGULATORY LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Regulatory Assets and Liabilities Disclosure [Abstract] | |
Schedule of Regulatory Assets | SJI's and SJG's Regulatory Assets consisted of the following items (in thousands): March 31, 2018 December 31, 2017 Environmental Remediation Costs: Expended - Net $ 110,529 $ 100,327 Liability for Future Expenditures 161,263 171,696 Deferred Asset Retirement Obligation Costs 42,622 42,368 Deferred Pension and Other Postretirement Benefit Costs 78,211 78,211 Deferred Gas Costs - Net 54,351 16,838 Conservation Incentive Program Receivable 12,118 26,652 Societal Benefit Costs Receivable 2,699 2,484 Deferred Interest Rate Contracts 6,006 7,028 Energy Efficiency Tracker 1,832 2,094 Pipeline Supplier Service Charges 686 708 Pipeline Integrity Cost 4,977 5,280 AFUDC - Equity Related Deferrals 12,899 12,785 Other Regulatory Assets 3,436 2,753 Total Regulatory Assets $ 491,629 $ 469,224 |
Schedule of Regulatory Liabilities | SJI's and SJG's Regulatory Liabilities consisted of the following items (in thousands): March 31, 2018 December 31, 2017 Excess Plant Removal Costs $ 23,527 $ 23,295 Excess Deferred Taxes 276,831 263,810 Total Regulatory Liabilities $ 300,358 $ 287,105 |
PENSION AND OTHER POSTRETIREM30
PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
Schedule of defined benefit plans disclosures | For the three months ended March 31, 2018 and 2017 , net periodic benefit cost related to the employee and officer pension and other postretirement benefit plans for SJI consisted of the following components (in thousands): Pension Benefits Three Months Ended 2018 2017 Service Cost $ 2,177 $ 1,382 Interest Cost 5,108 2,955 Expected Return on Plan Assets (7,633 ) (3,524 ) Amortizations: Prior Service Cost 71 33 Actuarial Loss 4,132 2,613 Net Periodic Benefit Cost 3,855 3,459 Capitalized Benefit Cost (483 ) (1,271 ) Deferred Benefit Cost (751 ) (161 ) Total Net Periodic Benefit Expense $ 2,621 $ 2,027 Other Postretirement Benefits Three Months Ended 2018 2017 Service Cost $ 81 $ 247 Interest Cost 217 601 Expected Return on Plan Assets (305 ) (853 ) Amortizations: Prior Service Cost (31 ) (86 ) Actuarial Loss 111 312 Net Periodic Benefit Cost 73 221 Capitalized Benefit Cost (5 ) (55 ) Total Net Periodic Benefit Expense $ 68 $ 166 |
LINES OF CREDIT (Tables)
LINES OF CREDIT (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Line of Credit Facility [Abstract] | |
Schedule of lines of credit | Credit facilities and available liquidity as of March 31, 2018 were as follows (in thousands): Company Total Facility Usage Available Liquidity Expiration Date SJI: Syndicated Revolving Credit Facility $ 400,000 $ 141,000 (A) $ 259,000 August 2022 Revolving Credit Facility 50,000 50,000 — September 2019 Total SJI 450,000 191,000 259,000 SJG: Commercial Paper Program/Revolving Credit Facility 200,000 64,000 (B) 136,000 August 2022 Uncommitted Bank Line 10,000 10,000 August 2018 (C) Total SJG 210,000 64,000 146,000 Total $ 660,000 $ 255,000 $ 405,000 (A) Includes letters of credit outstanding in the amount of $6.0 million . (B) Includes letters of credit outstanding in the amount of $0.9 million . (C) SJG expects to renew this facility prior to expiration. |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Outstanding derivative contracts | As of March 31, 2018 , SJI and SJG had outstanding derivative contracts as follows (1 MMdts = one million decatherms; 1 MMmWh = one million megawatt hours): SJI Consolidated SJG Derivative contracts intended to limit exposure to market risk to: Expected future purchases of natural gas (in MMdts) 45.3 13.3 Expected future sales of natural gas (in MMdts) 53.8 0.3 Expected future purchases of electricity (in MMmWh) 2.4 — Expected future sales of electricity (in MMmWh) 2.0 — Basis and Index related net purchase (sale) contracts (in MMdts) 31.8 (3.1 ) |
Schedule of notional amounts of outstanding derivative positions | As of March 31, 2018 , SJI’s active interest rate swaps were as follows: Notional Amount Fixed Interest Rate Start Date Maturity Obligor $ 20,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 20,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 10,000,000 3.049% 3/15/2017 3/15/2027 SJI $ 12,500,000 3.530% 12/1/2006 2/1/2036 SJG $ 12,500,000 3.430% 12/1/2006 2/1/2036 SJG |
Fair value of derivative instruments | The fair values of all derivative instruments, as reflected in the condensed consolidated balance sheets as of March 31, 2018 and December 31, 2017 , are as follows (in thousands): SJI (includes SJG and all other consolidated subsidiaries): Derivatives not designated as hedging instruments under GAAP March 31, 2018 December 31, 2017 Assets Liabilities Assets Liabilities Energy-related commodity contracts: Derivatives - Energy Related - Current $ 24,386 $ 12,486 $ 42,139 $ 46,938 Derivatives - Energy Related - Non-Current 12,268 4,153 5,988 6,025 Interest rate contracts: Derivatives - Other - Current — 526 — 748 Derivatives - Other - Noncurrent — 7,194 — 9,622 Total derivatives not designated as hedging instruments under GAAP $ 36,654 $ 24,359 $ 48,127 $ 63,333 Total Derivatives $ 36,654 $ 24,359 $ 48,127 $ 63,333 SJG: Derivatives not designated as hedging instruments under GAAP March 31, 2018 December 31, 2017 Assets Liabilities Assets Liabilities Energy-related commodity contracts: Derivatives – Energy Related – Current $ 404 $ 784 $ 7,327 $ 9,270 Derivatives – Energy Related – Non-Current — 328 5 170 Interest rate contracts: Derivatives – Other Current — 337 — 389 Derivatives – Other Noncurrent — 5,669 — 6,639 Total derivatives not designated as hedging instruments under GAAP $ 404 $ 7,118 $ 7,332 $ 16,468 Total Derivatives $ 404 $ 7,118 $ 7,332 $ 16,468 |
Offsetting assets | As of March 31, 2018 and December 31, 2017 , information related to these offsetting arrangements were as follows (in thousands): As of March 31, 2018 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 SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 36,654 $ — $ 36,654 $ (10,086 ) (A) $ — $ 26,568 Derivatives - Energy Related Liabilities $ (16,639 ) $ — $ (16,639 ) $ 10,086 (B) $ 755 $ (5,798 ) Derivatives - Other $ (7,720 ) $ — $ (7,720 ) $ — $ — $ (7,720 ) SJG: Derivatives - Energy Related Assets $ 404 $ — $ 404 $ (342 ) (A) $ — $ 62 Derivatives - Energy Related Liabilities $ (1,112 ) $ — $ (1,112 ) $ 342 (B) $ 755 $ (15 ) Derivatives - Other $ (6,006 ) $ — $ (6,006 ) $ — $ — $ (6,006 ) As of December 31, 2017 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 SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 48,127 $ — $ 48,127 $ (24,849 ) (A) $ — $ 23,278 Derivatives - Energy Related Liabilities $ (52,963 ) $ — $ (52,963 ) $ 24,849 (B) $ 8,832 $ (19,282 ) Derivatives - Other $ (10,370 ) $ — $ (10,370 ) $ — $ — $ (10,370 ) SJG: Derivatives - Energy Related Assets $ 7,332 $ — $ 7,332 $ (208 ) (A) $ — $ 7,124 Derivatives - Energy Related Liabilities $ (9,440 ) $ — $ (9,440 ) $ 208 (B) $ 1,543 $ (7,689 ) Derivatives - Other $ (7,028 ) $ — $ (7,028 ) $ — $ — $ (7,028 ) (A) The balances at March 31, 2018 and December 31, 2017 were related to derivative liabilities which can be net settled against derivative assets. (B) The balances at March 31, 2018 and December 31, 2017 were related to derivative assets which can be net settled against derivative liabilities. |
Offsetting liabilities | As of March 31, 2018 and December 31, 2017 , information related to these offsetting arrangements were as follows (in thousands): As of March 31, 2018 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 SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 36,654 $ — $ 36,654 $ (10,086 ) (A) $ — $ 26,568 Derivatives - Energy Related Liabilities $ (16,639 ) $ — $ (16,639 ) $ 10,086 (B) $ 755 $ (5,798 ) Derivatives - Other $ (7,720 ) $ — $ (7,720 ) $ — $ — $ (7,720 ) SJG: Derivatives - Energy Related Assets $ 404 $ — $ 404 $ (342 ) (A) $ — $ 62 Derivatives - Energy Related Liabilities $ (1,112 ) $ — $ (1,112 ) $ 342 (B) $ 755 $ (15 ) Derivatives - Other $ (6,006 ) $ — $ (6,006 ) $ — $ — $ (6,006 ) As of December 31, 2017 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 SJI (includes SJG and all other consolidated subsidiaries): Derivatives - Energy Related Assets $ 48,127 $ — $ 48,127 $ (24,849 ) (A) $ — $ 23,278 Derivatives - Energy Related Liabilities $ (52,963 ) $ — $ (52,963 ) $ 24,849 (B) $ 8,832 $ (19,282 ) Derivatives - Other $ (10,370 ) $ — $ (10,370 ) $ — $ — $ (10,370 ) SJG: Derivatives - Energy Related Assets $ 7,332 $ — $ 7,332 $ (208 ) (A) $ — $ 7,124 Derivatives - Energy Related Liabilities $ (9,440 ) $ — $ (9,440 ) $ 208 (B) $ 1,543 $ (7,689 ) Derivatives - Other $ (7,028 ) $ — $ (7,028 ) $ — $ — $ (7,028 ) (A) The balances at March 31, 2018 and December 31, 2017 were related to derivative liabilities which can be net settled against derivative assets. (B) The balances at March 31, 2018 and December 31, 2017 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 for the three months ended March 31, 2018 and 2017 are as follows (in thousands): Three Months Ended Derivatives in Cash Flow Hedging Relationships under GAAP 2018 2017 SJI (includes SJG and all other consolidated subsidiaries): Interest Rate Contracts: Losses reclassified from AOCL into income (a) $ (12 ) $ (2,487 ) SJG: Interest Rate Contracts: Losses reclassified from AOCL into income (a) $ (12 ) $ (12 ) (a) Included in Interest Charges Three Months Ended Derivatives Not Designated as Hedging Instruments under GAAP 2018 2017 SJI (includes SJG and all other consolidated subsidiaries): Gains on energy-related commodity contracts (a) $ 23,353 $ 14,688 Gains (Losses) on interest rate contracts (b) 1,628 (1,005 ) Total $ 24,981 $ 13,683 (a) Included in Operating Revenues - Nonutility (b) Included in Interest Charges |
FAIR VALUE OF FINANCIAL ASSET33
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value of assets and liabilities | For financial assets and financial liabilities measured at fair value on a recurring basis, information about the fair value measurements for each major category is as follows (in thousands): As of March 31, 2018 Total Level 1 Level 2 Level 3 SJI (includes SJG and all other consolidated subsidiaries): Assets Available-for-Sale Securities (A) $ 36 $ 36 $ — $ — Derivatives – Energy Related Assets (B) 36,654 935 14,121 21,598 $ 36,690 $ 971 $ 14,121 $ 21,598 SJG: Assets Derivatives – Energy Related Assets (B) $ 404 $ 342 $ 62 $ — $ 404 $ 342 $ 62 $ — SJI (includes SJG and all other consolidated subsidiaries): Liabilities Derivatives – Energy Related Liabilities (B) $ 16,639 $ 3,947 $ 7,680 $ 5,012 Derivatives – Other (C) 7,720 — 7,720 — $ 24,359 $ 3,947 $ 15,400 $ 5,012 SJG: Liabilities Derivatives – Energy Related Liabilities (B) $ 1,112 $ 1,097 $ 9 $ 6 Derivatives – Other (C) 6,006 — 6,006 — $ 7,118 $ 1,097 $ 6,015 $ 6 As of December 31, 2017 Total Level 1 Level 2 Level 3 SJI (includes SJG and all other consolidated subsidiaries): Assets Available-for-Sale Securities (A) $ 36 $ 36 $ — $ — Derivatives – Energy Related Assets (B) 48,127 5,155 21,869 21,103 $ 48,163 $ 5,191 $ 21,869 $ 21,103 SJG: Assets Derivatives – Energy Related Assets (B) $ 7,332 $ 208 $ 230 $ 6,894 $ 7,332 $ 208 $ 230 $ 6,894 SJI (includes SJG and all other consolidated subsidiaries): Liabilities Derivatives – Energy Related Liabilities (B) $ 52,963 $ 10,687 $ 24,283 $ 17,993 Derivatives – Other (C) 10,370 — 10,370 — $ 63,333 $ 10,687 $ 34,653 $ 17,993 SJG: Liabilities Derivatives – Energy Related Liabilities (B) $ 9,440 $ 1,750 $ 2,848 $ 4,842 Derivatives – Other (C) 7,028 — 7,028 — $ 16,468 $ 1,750 $ 9,876 $ 4,842 (A) Available-for-Sale Securities include securities that are traded in active markets and securities that are not traded publicly. The securities traded in active markets are valued using the quoted principal market close prices that are provided by the trustees and are categorized in Level 1 in the fair value hierarchy. (B) Derivatives – Energy Related Assets and Liabilities are traded in both exchange-based and non-exchange-based markets. Exchange-based contracts are valued using unadjusted quoted market sources in active markets and are categorized in Level 1 in the fair value hierarchy. Certain non-exchange-based contracts are valued using indicative price quotations available through brokers or over-the-counter, on-line exchanges and are categorized in Level 2. These price quotations reflect the average of the bid-ask mid-point prices and are obtained from sources that management believes provide the most liquid market. For non-exchange-based derivatives that trade in less liquid markets with limited pricing information, model inputs generally would include both observable and unobservable inputs. In instances where observable data is unavailable, management considers the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 as the model inputs generally are not observable. Significant Unobservable Inputs - Management uses the discounted cash flow model to value Level 3 physical and financial forward contracts, which calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return and credit spreads. Inputs to the valuation model are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third party pricing sources. The validity of the mark-to-market valuations and changes in mark-to-market valuations from period to period are examined and qualified against historical expectations by the risk management function. If any discrepancies are identified during this process, the mark-to-market valuations or the market pricing information is evaluated further and adjusted, if necessary. Level 3 valuation methods for natural gas derivative contracts include utilizing another location in close proximity adjusted for certain pipeline charges to derive a basis value. The significant unobservable inputs used in the fair value measurement of certain natural gas contracts consist of forward prices developed based on industry-standard methodologies. Significant increases (decreases) in these forward prices for purchases of natural gas would result in a directionally similar impact to the fair value measurement and for sales of natural gas would result in a directionally opposite impact to the fair value measurement. Level 3 valuation methods for electric represent the value of the contract marked to the forward wholesale curve, as provided by daily exchange quotes for delivered electricity. The significant unobservable inputs used in the fair value measurement of electric contracts consist of fixed contracted electric load profiles; therefore, no change in unobservable inputs would occur. Unobservable inputs are updated daily using industry-standard techniques. Management reviews and corroborates the price quotations to ensure the prices are observable which includes consideration of actual transaction volumes, market delivery points, bid-ask spreads and contract duration. (C) Derivatives – Other are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment. |
Quantitative information regarding significant unobservable inputs, assets | The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands): SJI (includes SJG and all other consolidated subsidiaries) : Type Fair Value at March 31, 2018 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $14,669 $3,037 Discounted Cash Flow Forward price (per dt) $1.72 - $7.14 [$2.65] (A) Forward Contract - Electric $6,929 $1,975 Discounted Cash Flow Fixed electric load profile (on-peak) 37.45% - 100.00% [53.28%] (B) Fixed electric load profile (off-peak) 0.00% - 62.55% [46.72%] (B) Type Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $13,519 $15,686 Discounted Cash Flow Forward price (per dt) $1.79 - $12.09 [$3.01] (A) Forward Contract - Electric $7,584 $2,307 Discounted Cash Flow Fixed electric load profile (on-peak) 36.36% - 100.00% [53.39%] (B) Fixed electric load profile (off-peak) 0.00% - 63.64% [46.61%] (B) SJG: Type Fair Value at March 31, 2018 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ — $ 6 Discounted Cash Flow Forward price (per dt) $2.16- $2.61 [$2.28] (A) Type Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ 6,894 $ 4,842 Discounted Cash Flow Forward price (per dt) $2.42 - $6.67 [$5.25] (A) (A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas. (B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak. |
Quantitative information regarding significant unobservable inputs, liabilities | The following table provides quantitative information regarding significant unobservable inputs in Level 3 fair value measurements (in thousands): SJI (includes SJG and all other consolidated subsidiaries) : Type Fair Value at March 31, 2018 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $14,669 $3,037 Discounted Cash Flow Forward price (per dt) $1.72 - $7.14 [$2.65] (A) Forward Contract - Electric $6,929 $1,975 Discounted Cash Flow Fixed electric load profile (on-peak) 37.45% - 100.00% [53.28%] (B) Fixed electric load profile (off-peak) 0.00% - 62.55% [46.72%] (B) Type Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Input Range [Weighted Average] Assets Liabilities Forward Contract - Natural Gas $13,519 $15,686 Discounted Cash Flow Forward price (per dt) $1.79 - $12.09 [$3.01] (A) Forward Contract - Electric $7,584 $2,307 Discounted Cash Flow Fixed electric load profile (on-peak) 36.36% - 100.00% [53.39%] (B) Fixed electric load profile (off-peak) 0.00% - 63.64% [46.61%] (B) SJG: Type Fair Value at March 31, 2018 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ — $ 6 Discounted Cash Flow Forward price (per dt) $2.16- $2.61 [$2.28] (A) Type Fair Value at December 31, 2017 Valuation Technique Significant Unobservable Input Range Assets Liabilities Forward Contract - Natural Gas $ 6,894 $ 4,842 Discounted Cash Flow Forward price (per dt) $2.42 - $6.67 [$5.25] (A) (A) Represents the range, along with the weighted average, of forward prices for the sale and purchase of natural gas. (B) Represents the range, along with the weighted average, of the percentage of contracted usage that is loaded during on-peak hours versus off-peak. |
Changes in fair value using significant unobservable inputs | The changes in fair value measurements of Derivatives – Energy Related Assets and Liabilities for the three months ended March 31, 2018 and 2017 , using significant unobservable inputs (Level 3), are as follows (in thousands): Three Months Ended SJI (includes SJG and all other consolidated subsidiaries): Balance at beginning of period $ 3,110 Other Changes in Fair Value from Continuing and New Contracts, Net 3,989 Settlements 9,487 Balance at end of period $ 16,586 SJG: Balance at beginning of period $ 2,052 Other Changes in Fair Value from Continuing and New Contracts, Net (6 ) Settlements (2,052 ) Balance at end of period $ (6 ) Three Months Ended SJI (includes SJG and all other consolidated subsidiaries): Balance at beginning of period $ 9,035 Other Changes in Fair Value from Continuing and New Contracts, Net (988 ) Settlements 8,187 Balance at end of period $ 16,234 SJG: Balance at beginning of period $ 926 Other Changes in Fair Value from Continuing and New Contracts, Net 511 Settlements (926 ) Balance at end of period $ 511 |
ACCUMULATED OTHER COMPREHENSI34
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of changes in accumulated other comprehensive loss (AOCL) | The following table summarizes the changes in SJG's AOCL for the three months ended March 31, 2018 (in thousands): Postretirement Liability Adjustment Unrealized Gain (Loss) on Derivatives-Other Total Balance at January 1, 2018 (a) $ (25,507 ) $ (490 ) $ (25,997 ) Other comprehensive loss before reclassifications — — — Amounts reclassified from AOCL (b) — 9 9 Net current period other comprehensive income — 9 9 Balance at March 31, 2018 (a) $ (25,507 ) $ (481 ) $ (25,988 ) (a) Determined using a combined average statutory tax rate of 25% . (b) See table below. The following table summarizes the changes in SJI's accumulated other comprehensive loss (AOCL) for the three months ended March 31, 2018 (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 January 1, 2018 (a) $ (36,262 ) $ (396 ) $ (10 ) $ (97 ) $ (36,765 ) Other comprehensive income before reclassifications — — — — — Amounts reclassified from AOCL (b) — 9 — — 9 Net current period other comprehensive income — 9 — — 9 Balance at March 31, 2018 (a) $ (36,262 ) $ (387 ) $ (10 ) $ (97 ) $ (36,756 ) (a) Determined using a combined average statutory tax rate of 25% . (b) See table below. |
Reclassifications out of AOCL | The reclassifications out of SJG's AOCL during the three months ended March 31, 2018 are as follows (in thousands): Components of AOCL Amounts Reclassified from AOCL Affected Line Item in the Condensed Statements of Income Three Months Ended Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges $ 12 Interest Charges Income Taxes (3 ) Income Taxes (a) Losses from reclassifications for the period net of tax $ 9 (a) Determined using a combined average statutory tax rate of 25% . The following table provides details about reclassifications out of SJI's AOCL for the three months ended March 31, 2018 (in thousands): Components of AOCL Amounts Reclassified from AOCL Affected Line Item in the Condensed Consolidated Statements of Income Three Months Ended Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges $ 12 Interest Charges Income Taxes (3 ) Income Taxes (a) Losses from reclassifications for the period net of tax $ 9 (a) Determined using a combined average statutory tax rate of 25% . |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | Below is a listing of all performance obligations that arise from contracts with customers, along with details on the satisfaction of each performance obligation, the significant payment terms, and the nature of the goods and services being transferred: Revenue Recognized Over Time: Reportable Segment Performance Obligation Description Gas Utility Operations; Wholesale Energy Operations; Retail Gas and Other Operations Natural Gas SJG sells natural gas to residential, commercial and industrial customers, and price is based on regulated tariff rates which are established by the BPU. There is an implied contract between SJG and a customer for the purchase, delivery, and sale of gas, and the customer is billed monthly, with payment due within 30 days. SJRG sells natural gas to commercial customers at either a fixed quantity or at variable quantities based on a customer's needs. Payment is due on the 25th of each month for the previous month's deliveries. SJE sells natural gas to commercial, industrial and residential customers at fixed prices throughout the life of the contract, with the customer billed monthly and payment due within 30 days. For all three segments, revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) or through the passage of time ratably as the customer uses natural gas, which represents satisfaction of the performance obligation. Gas Utility Operations; Wholesale Energy Operations Pipeline transportation capacity SJG and SJRG sell pipeline transportation capacity on a wholesale basis to various customers on the interstate pipeline system and transport natural gas purchased directly from producers or suppliers to their customers. These contracts to sell this capacity are at a price, quantity and time period agreed to by both parties determined on a contract by contract basis. Payment is due on the 25th of each month for the previous month's deliveries. Revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) or through the passage of time ratably coinciding with the delivery of gas and the customer obtaining control, which represents satisfaction of the performance obligation. Wholesale Energy Operations Fuel Management Services SJRG currently has ten fuel supply management contracts where SJRG has acquired pipeline transportation capacity that allows SJRG to match end users, many of which are merchant generators, with producers looking to find a long-term solution for their supply. Natural gas is sold to the merchant generator daily based on their needs, with payment made either weekly or biweekly depending on the contract. Revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) coinciding with the delivery of gas and the customer obtaining control, which represents satisfaction of the performance obligation. Retail Electric Operations Electricity SJE sells electricity to commercial, industrial and residential customers at fixed prices throughout the life of the contract, with the customer billed monthly and payment due within 30 days. Revenue is currently being recognized over time based upon volumes delivered (i.e. unit of output) or through the passage of time ratably coinciding with the delivery of electricity and the customer obtaining control, which represents satisfaction of the performance obligation. On-Site Energy Production Solar Marina has several wholly-owned solar projects that earn revenue based on electricity generated. The customer pays monthly as electricity is being generated, with payment due within 30 days. The performance obligation is satisfied as kwh's of energy are generated (i.e. unit of output), which is when revenue is recognized. On-Site Energy Production Marina Thermal Facility Marina has a contract with a casino and resort in Atlantic City, NJ to provide cooling, heating and emergency power. There are multiple performance obligations with this contract, including electric, chilled water and hot water, and each of these are considered distinct and separately identifiable, and they are all priced separately. These performance obligations are satisfied over time ratably as they are used by the customer, who is billed monthly. Payment is due within 30 days. Revenue Recognized at a Point in Time: Reportable Segment Performance Obligation Description On-Site Energy Production SREC's The customer is billed based on a contracted amount of SREC's to be sold, with the price based on the market price of the SRECs at the time of generation. This does not represent variable consideration as the price is known and established at the time of generation and delivery to the customer. The performance obligation is satisfied at the point in time the SREC is delivered to the customer, which is when revenue is recognized. Payment terms are approximately 10 days subsequent to delivery. |
Disaggregation of Revenue | Disaggregated revenues from contracts with customers, by both customer type and product line, are disclosed below, by operating segment, for the three months ended March 31, 2018 (in thousands): Three Months Ended Gas Utility Operations Wholesale Energy Operations Retail Gas and Other Operations Retail Electric Operations On-Site Energy Production Appliance Service Operations Corporate Services and Intersegment Total Customer Type: Residential 147,262 — — 8,096 — 520 — 155,878 Commercial & Industrial 40,805 173,846 33,246 21,950 21,157 — (8,770 ) 282,234 OSS & Capacity Release 5,204 — — — — — — 5,204 Other 663 — — — — — — 663 193,934 173,846 33,246 30,046 21,157 520 (8,770 ) 443,979 Product Line: Gas 193,934 173,846 33,246 — — — (4,574 ) 396,452 Electric — — — 30,046 — — (1,668 ) 28,378 Solar — — — — 11,836 — (2,528 ) 9,308 CHP — — — — 7,853 — — 7,853 Landfills — — — — 1,468 — — 1,468 Other — — — — — 520 — 520 193,934 173,846 33,246 30,046 21,157 520 (8,770 ) 443,979 |
Contract with Customer, Asset and Liability | The following table provides information about SJI's and SJG's receivables and unbilled revenue from contracts with customers (in thousands): Accounts Receivable (1) Unbilled Revenue (2) SJI (including SJG and all other consolidated subsidiaries): Beginning balance as of 1/1/18 $ 202,379 $ 73,377 Ending balance as of 3/31/18 243,395 62,601 Increase (Decrease) $ (41,016 ) $ 10,776 SJG: Beginning balance as of 1/1/18 $ 78,571 $ 54,980 Ending balance as of 3/31/18 128,583 44,287 Increase (Decrease) $ (50,012 ) $ 10,693 (1) Included in Accounts Receivable in the condensed consolidated balance sheets. A receivable is SJI's and SJG's right to consideration that is unconditional, as only the passage of time is required before payment is expected from the customer. All of SJI's and SJG's Accounts Receivable arise from contracts with customers. (2) Included in Unbilled Revenues in the condensed consolidated balance sheets. All unbilled revenue for SJI and SJG arises from contracts with customers. Unbilled revenue relates to SJI's and SJG's right to receive payment for commodity delivered but not yet billed. This represents contract assets that arise from contracts with customers, which is defined in ASC 606 as the right to payment in exchange for goods already transferred to a customer, excluding any amounts presented as a receivable. The unbilled revenue is transferred to accounts receivable when billing occurs and the rights to collection become unconditional. The change in unbilled revenues for the three months ended March 31, 2018 is due primarily to the timing difference between SJI and SJG delivering the commodity to the customer and the customer actually receiving the bill for payment. |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended | ||
Mar. 31, 2018USD ($)countymishares | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)shares | |
Accounting Policies [Abstract] | |||
Number of counties in which SJG operates | county | 7 | ||
Length of pipeline (in miles) | mi | 118 | ||
Public utility assessment | $ 400,000 | $ 400,000 | |
Amount of costs related to interests in proved and unproved properties in Pennsylvania, net of amortization | $ 8,600,000 | $ 8,700,000 | |
Shares of treasury stock held (in shares) | shares | 219,136 | 216,642 | |
Goodwill | $ 3,578,000 | $ 3,578,000 | |
Public Utilities, General Disclosures [Line Items] | |||
Nonoperating income | (2,761,000) | (4,487,000) | |
Costs and expenses | (364,075,000) | (356,965,000) | |
Impairment charge | 0 | 0 | |
Identified impairments | 0 | 0 | |
South Jersey Gas Company | |||
Public Utilities, General Disclosures [Line Items] | |||
Nonoperating income | (2,510,000) | (1,042,000) | |
Costs and expenses | (141,658,000) | (115,589,000) | |
Impairment charge | 0 | 300,000 | |
Accounting Standards Update 2017-07 | |||
Public Utilities, General Disclosures [Line Items] | |||
Nonoperating income | 1,200,000 | ||
Accounting Standards Update 2017-07 | South Jersey Gas Company | |||
Public Utilities, General Disclosures [Line Items] | |||
Costs and expenses | 600,000 | ||
Corporate and Services | Sales Revenue, Net | Accounting Standards Update 2017-07 | |||
Public Utilities, General Disclosures [Line Items] | |||
Prior period reclassification adjustment | $ 600,000 | ||
Gas Utility Operations | Operating Segments | Sales Revenue, Net | Accounting Standards Update 2017-07 | |||
Public Utilities, General Disclosures [Line Items] | |||
Prior period reclassification adjustment | $ 600,000 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Acquisition (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||||
Payment to acquire assets | $ 58,816 | $ 67,278 | ||
Unamortized debt issuance costs | 15,600 | $ 17,400 | ||
Interest Charges | 13,972 | $ 16,745 | ||
Elizabethtown Gas and Elkton Gas | ||||
Business Acquisition [Line Items] | ||||
Payment to acquire assets | $ 1,700,000 | |||
Legal fees | 9,300 | |||
Unamortized debt issuance costs | $ 3,800 | |||
Interest Charges | 2,600 | |||
Ticking fees | 1,200 | |||
Operating Expense | Elizabethtown Gas and Elkton Gas | ||||
Business Acquisition [Line Items] | ||||
Legal fees | $ 5,500 |
STOCK-BASED COMPENSATION PLAN38
STOCK-BASED COMPENSATION PLAN (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2018 | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Number of options granted (in shares) | 0 | 0 | ||
Number of options outstanding (in shares) | 0 | 0 | ||
Vesting period of shares | 3 years | |||
Service period of shares | 3 years | |||
Fair value per share (in dollars per share) | $ 28.60 | $ 29.46 | ||
Expected volatility, measurement period | 3 years | |||
Total Cost | $ 1,306 | $ 1,326 | ||
Capitalized | (101) | (88) | ||
Net Expense | $ 1,205 | 1,238 | ||
Unrecognized compensation cost of awards granted under the plan | $ 9,300 | |||
Weighted average period over which unrecognized compensation cost is to be recognized | 2 years 1 month 12 days | |||
Additional disclosures [Abstract] | ||||
Weighted average fair value nonvested shares-beginning balance (in dollars per share) | $ 28.60 | |||
Weighted average fair value nonvested shares-granted during the period (in dollars per share) | 31.17 | |||
Weighted average fair value nonvested shares- forfeited during the period (in dollars per share) | 28.21 | |||
Weighted average fair value nonvested shares-vested during the period (in dollars per share) | 30.56 | |||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 29.46 | |||
South Jersey Gas Company | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Costs capitalized | 60.00% | |||
Officers and Key Employees | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Number of shares granted (in shares) | 185,214 | |||
Shares outstanding (in shares) | 342,793 | 448,116 | ||
Total Cost | $ 1,100 | $ 1,070 | ||
Number of shares awarded | 63,030 | 65,628 | ||
Fair value of shares issued | $ 1,900 | $ 2,200 | ||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Nonvested shares outstanding, beginning balance (in shares) | 342,793 | |||
Granted (in shares) | 185,214 | |||
Cancelled/Forfeited (in shares) | (34,990) | |||
Vested (in shares) | (44,901) | |||
Nonvested shares outstanding, ending balance (in shares) | 448,116 | |||
Officers and Key Employees | 2016 - TSR | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Shares outstanding (in shares) | 58,205 | 58,205 | ||
Fair value per share (in dollars per share) | $ 22.53 | $ 22.53 | ||
Expected volatility | 18.10% | |||
Risk-free interest rate | 1.31% | |||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Nonvested shares outstanding, ending balance (in shares) | 58,205 | |||
Additional disclosures [Abstract] | ||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 22.53 | |||
Officers and Key Employees | 2016 - CEGR, Time | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Shares outstanding (in shares) | 73,344 | 73,344 | ||
Fair value per share (in dollars per share) | $ 23.52 | $ 23.52 | ||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Nonvested shares outstanding, ending balance (in shares) | 73,344 | |||
Additional disclosures [Abstract] | ||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 23.52 | |||
Officers and Key Employees | 2017 - TSR | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Shares outstanding (in shares) | 49,981 | 49,981 | ||
Fair value per share (in dollars per share) | $ 32.17 | $ 32.17 | ||
Expected volatility | 20.80% | |||
Risk-free interest rate | 1.47% | |||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Nonvested shares outstanding, ending balance (in shares) | 49,981 | |||
Additional disclosures [Abstract] | ||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 32.17 | |||
Officers and Key Employees | 2017 - CEGR, Time | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Shares outstanding (in shares) | 81,372 | 81,372 | ||
Fair value per share (in dollars per share) | $ 33.69 | $ 33.69 | ||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Nonvested shares outstanding, ending balance (in shares) | 81,372 | |||
Additional disclosures [Abstract] | ||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 33.69 | |||
Officers and Key Employees | 2018 - TSR | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Shares outstanding (in shares) | 64,290 | 64,290 | ||
Fair value per share (in dollars per share) | $ 31.05 | $ 31.05 | ||
Expected volatility | 21.90% | |||
Risk-free interest rate | 2.00% | |||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Nonvested shares outstanding, ending balance (in shares) | 64,290 | |||
Additional disclosures [Abstract] | ||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 31.05 | |||
Officers and Key Employees | 2018 - CEGR, Time | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Shares outstanding (in shares) | 120,924 | 120,924 | ||
Fair value per share (in dollars per share) | $ 31.23 | $ 31.23 | ||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Nonvested shares outstanding, ending balance (in shares) | 120,924 | |||
Additional disclosures [Abstract] | ||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 31.23 | |||
Director | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Number of shares granted (in shares) | 26,416 | 30,394 | ||
Vesting period of shares | 12 months | |||
Director shares vested | 100.00% | |||
Shares outstanding (in shares) | 30,394 | 26,416 | ||
Total Cost | $ 206 | $ 256 | ||
Fair value of shares issued | $ 800 | $ 1,000 | ||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Nonvested shares outstanding, beginning balance (in shares) | 30,394 | |||
Granted (in shares) | 26,416 | 30,394 | ||
Cancelled/Forfeited (in shares) | 0 | |||
Vested (in shares) | (30,394) | |||
Nonvested shares outstanding, ending balance (in shares) | 26,416 | |||
Director | 2018 | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Shares outstanding (in shares) | 26,416 | 26,416 | ||
Fair value per share (in dollars per share) | $ 31.16 | $ 31.16 | ||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Nonvested shares outstanding, ending balance (in shares) | 26,416 | |||
Additional disclosures [Abstract] | ||||
Weighted average fair value nonvested shares-ending balance (in dollars per share) | $ 31.16 | |||
Stock Appreciation Rights | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Number of shares granted (in shares) | 0 | |||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Granted (in shares) | 0 | |||
Restricted Stock | Year one | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Vesting period of shares | 1 year | |||
Restricted Stock | Year two | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Vesting period of shares | 2 years | |||
Service period of shares | 2 years | |||
Restricted Stock | Year three | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Vesting period of shares | 3 years | |||
Service period of shares | 3 years | |||
Restricted Stock | Officers and Key Employees | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Number of shares granted (in shares) | 185,214 | 158,688 | ||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Granted (in shares) | 185,214 | 158,688 | ||
Restricted Stock | Officers and Key Employees | Minimum | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Percentage of actual amount of shares that ultimately vest of original share units granted | 0.00% | |||
Restricted Stock | Officers and Key Employees | Maximum | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Percentage of actual amount of shares that ultimately vest of original share units granted | 200.00% | |||
Restricted Stock | South Jersey Gas Company's officers and other key employees | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Number of shares granted (in shares) | 26,652 | 21,061 | ||
Net Expense | $ 200 | $ 100 | ||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Granted (in shares) | 26,652 | 21,061 | ||
Time-based Restricted Stock | Minimum | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Return on equity award threshold | 7.00% | |||
Time-based Restricted Stock | Officers and Key Employees | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Number of shares granted (in shares) | 56,634 | 48,790 | ||
Vesting period of shares | 3 years | 3 years | ||
Payout limit | 100.00% | |||
Restricted stock award activity, excluding accrued dividend equivalents [Roll Forward] | ||||
Granted (in shares) | 56,634 | 48,790 | ||
Time-based Restricted Stock | Officers and Key Employees | Year one | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Percentage of shares vested | 3333.00% | |||
Time-based Restricted Stock | Officers and Key Employees | Year two | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Percentage of shares vested | 3333.00% | |||
Time-based Restricted Stock | Officers and Key Employees | Year three | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Percentage of shares vested | 3333.00% | |||
Total Shareholder Return | ||||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | ||||
Vesting period of shares | 3 years |
AFFILIATIONS, DISCONTINUED OP39
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS - Narrative (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)mi | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||
Length of pipeline (in miles) | mi | 118 | ||
Investments in unconsolidated affiliates | $ 2.9 | $ 3.7 | |
Notes receivable - affiliate | $ 17.1 | $ 18.2 | |
Interest accrual on secured notes receivable | 7.50% | ||
Net asset - included in investment in affiliates and other noncurrent liabilities | $ 67 | ||
Combined equity contributions and the notes receivable - affiliate | $ 84.1 | ||
Energenic US LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity interest | 50.00% | ||
Millennium Account Services, LLC (Millennium) | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity interest | 50.00% | ||
Potato Creek, LLC (Potato Creek) | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity interest | 30.00% | ||
PennEast Pipeline Company, LLC (PennEast) | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity interest | 20.00% | ||
Secured Debt | |||
Schedule of Equity Method Investments [Line Items] | |||
Notes receivable - affiliate | $ 13.6 | ||
Unsecured Debt | |||
Schedule of Equity Method Investments [Line Items] | |||
Notes receivable - affiliate | $ 3.5 | ||
South Jersey Energy Company | EnergyMark | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity interest | 33.00% | ||
SJRG | EnergyMark | |||
Schedule of Equity Method Investments [Line Items] | |||
Total Operating Revenue/Affiliates | $ 14.6 | $ 15.2 |
AFFILIATIONS, DISCONTINUED OP40
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS - Summarized Operating Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Loss Before Income Taxes: | ||
Income Tax Benefits | $ 16 | $ 16 |
Loss from Discontinued Operations — Net | $ (66) | $ (30) |
Earnings (Loss) Per Common Share from Discontinued Operations - Net | ||
Basic and Diluted (in dollars per share) | $ 0 | $ 0 |
Sand Mining | ||
Loss Before Income Taxes: | ||
Loss Before Income Taxes | $ (40) | $ (17) |
Fuel Oil | ||
Loss Before Income Taxes: | ||
Loss Before Income Taxes | $ (42) | $ (29) |
AFFILIATIONS, DISCONTINUED OP41
AFFILIATIONS, DISCONTINUED OPERATIONS AND RELATED PARTY TRANSACTIONS - Related Party Transactions (Details) - SJG - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Revenues/Affiliates: | ||
Total Operating Revenue/Affiliates | $ 2,714 | $ 1,066 |
Operations Expense/Affiliates: | ||
Total Operations Expense/Affiliates | 7,625 | 6,719 |
SJRG | ||
Operating Revenues/Affiliates: | ||
Total Operating Revenue/Affiliates | 2,588 | 963 |
Costs of Sales/Affiliates (Excluding depreciation) | 25,338 | 10,450 |
Marina | ||
Operating Revenues/Affiliates: | ||
Total Operating Revenue/Affiliates | 103 | 82 |
SJI | ||
Operations Expense/Affiliates: | ||
Total Operations Expense/Affiliates | 7,043 | 6,050 |
Millennium | ||
Operations Expense/Affiliates: | ||
Total Operations Expense/Affiliates | 697 | 708 |
Other | ||
Operating Revenues/Affiliates: | ||
Total Operating Revenue/Affiliates | 23 | 21 |
Operations Expense/Affiliates: | ||
Total Operations Expense/Affiliates | $ (115) | $ (39) |
COMMON STOCK - Summary of Share
COMMON STOCK - Summary of Shares Issued and Outstanding (Details) | 3 Months Ended |
Mar. 31, 2018shares | |
Common Stock [Roll Forward] | |
Beginning balance (in shares) | 79,549,080 |
New Issuances During the Period: | |
Stock-Based Compensation Plan (in shares) | 63,809 |
Ending balance (in shares) | 79,612,889 |
COMMON STOCK - Narrative (Detai
COMMON STOCK - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Par value of common stock (in dollars per share) | $ 1.25 | ||
Net excess over par value recorded in premium on common stock | $ 0.1 | ||
Shares of common stock outstanding (in shares) | 79,612,889 | 79,549,080 | |
Incremental shares included in diluted EPS calculation (in shares) | 129,369 | 121,812 | |
South Jersey Gas Company | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Par value of common stock (in dollars per share) | $ 2.50 | ||
Shares of common stock outstanding (in shares) | 2,339,139 |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Restricted investments held In escrow | $ 300 | $ 300 | ||
Margin accounts with selected counterparties to support risk management activities | 16,400 | 31,600 | ||
Cash and Cash Equivalents | 6,312 | 7,819 | ||
Restricted Investments | 16,713 | 31,876 | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | 23,025 | 39,695 | $ 17,913 | $ 31,910 |
Notes Receivable - Affiliate | $ 13,275 | 13,275 | ||
Energenic US LLC | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Equity interest | 50.00% | |||
Notes Receivable - Affiliate | $ 13,600 | |||
South Jersey Gas Company | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Margin accounts with selected counterparties to support risk management activities | 2,300 | 2,900 | ||
Cash and Cash Equivalents | 3,398 | 1,707 | ||
Restricted Investments | 2,322 | 2,912 | ||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows | 5,720 | 4,619 | $ 4,287 | $ 1,391 |
South Jersey Gas Company | Financing Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Carrying amount of loans, net of unamortized discounts | 6,600 | 7,000 | ||
Imputed interest of loans | $ 700 | $ 700 | ||
South Jersey Gas Company | Financing Receivable | Minimum | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Initial term of note | 5 years | |||
South Jersey Gas Company | Financing Receivable | Maximum | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Initial term of note | 10 years |
FINANCIAL INSTRUMENTS - Credit
FINANCIAL INSTRUMENTS - Credit Risk (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($)counterparty | |
Concentration Risk [Line Items] | |
Number of counterparties | counterparty | 1 |
Supplier Concentration Risk | Derivatives Energy Related Assets | |
Concentration Risk [Line Items] | |
Current and noncurrent derivatives | $ | $ 4.3 |
Percentage of current and noncurrent derivatives | 11.90% |
FINANCIAL INSTRUMENTS - Financi
FINANCIAL INSTRUMENTS - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt, including current maturities | $ 1,257.1 | $ 1,216.1 |
Carrying amount of long-term debt, including current maturities | 1,238.6 | 1,186.8 |
Unamortized debt issuance costs | 15.6 | 17.4 |
South Jersey Gas Company | ||
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt, including current maturities | 831.6 | 838.5 |
Carrying amount of long-term debt, including current maturities | 822 | 821.9 |
Unamortized debt issuance costs | $ 7.1 | $ 7.3 |
SEGMENTS OF BUSINESS (Details)
SEGMENTS OF BUSINESS (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)category | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | $ 521,945 | $ 425,829 | |
Total Operating Income | 157,870 | 68,864 | |
Total Depreciation and Amortization | 33,898 | 29,521 | |
Total Interest Charges | 13,972 | 16,745 | |
Total Income Taxes | 36,415 | 21,870 | |
Total Property Additions | 55,084 | 70,178 | |
Total Identifiable Assets | 3,890,080 | $ 3,865,086 | |
Discontinued Operations | |||
Segment Reporting Information [Line Items] | |||
Total Identifiable Assets | $ 1,751 | 1,757 | |
Energy Group and Energy Services | |||
Segment Reporting Information [Line Items] | |||
Number of operating categories | category | 2 | ||
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | $ 543,715 | 443,032 | |
Total Interest Charges | 18,617 | 20,077 | |
Operating Segments | Gas Utility Operations | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | 234,459 | 196,814 | |
Total Operating Income | 92,801 | 81,225 | |
Total Depreciation and Amortization | 20,315 | 17,362 | |
Total Interest Charges | 6,728 | 5,878 | |
Total Income Taxes | 21,836 | 29,911 | |
Total Property Additions | 50,237 | 62,280 | |
Total Identifiable Assets | 2,930,127 | 2,865,974 | |
Operating Segments | Energy Group | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | 274,579 | 213,352 | |
Total Operating Income | 69,691 | (11,987) | |
Total Depreciation and Amortization | 98 | 111 | |
Total Interest Charges | 146 | 3,144 | |
Total Income Taxes | 17,535 | (6,231) | |
Total Property Additions | 178 | 298 | |
Total Identifiable Assets | 239,976 | 300,643 | |
Operating Segments | Energy Group | Wholesale Energy Operations | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | 190,343 | 127,517 | |
Total Operating Income | 75,657 | (11,626) | |
Total Depreciation and Amortization | 23 | 28 | |
Total Interest Charges | 0 | 3,059 | |
Total Income Taxes | 19,127 | (6,319) | |
Total Property Additions | 5 | 3 | |
Total Identifiable Assets | 150,330 | 208,785 | |
Operating Segments | Energy Group | Retail Gas and Other Operations | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | 40,201 | 36,878 | |
Total Operating Income | (5,758) | (1,667) | |
Total Depreciation and Amortization | 75 | 83 | |
Total Interest Charges | 146 | 85 | |
Total Income Taxes | (1,534) | (447) | |
Total Property Additions | 173 | 295 | |
Total Identifiable Assets | 57,497 | 56,935 | |
Operating Segments | Energy Group | Retail Electric Operations | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | 44,035 | 48,957 | |
Total Operating Income | (208) | 1,306 | |
Total Income Taxes | (58) | 535 | |
Total Identifiable Assets | 32,149 | 34,923 | |
Operating Segments | Energy Services | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | 21,677 | 21,270 | |
Total Operating Income | (51) | (2,041) | |
Total Depreciation and Amortization | 10,271 | 11,647 | |
Total Income Taxes | (1,026) | (3,086) | |
Total Property Additions | 1,113 | 7,355 | |
Total Identifiable Assets | 584,840 | 583,925 | |
Operating Segments | Energy Services | On-Site Energy Production | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | 21,157 | 19,612 | |
Total Operating Income | (554) | (1,969) | |
Total Depreciation and Amortization | 10,271 | 11,593 | |
Total Interest Charges | 3,847 | 5,814 | |
Total Income Taxes | (1,157) | (3,069) | |
Total Property Additions | 1,113 | 7,349 | |
Total Identifiable Assets | 584,349 | 582,587 | |
Operating Segments | Energy Services | Appliance Service Operations | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | 520 | 1,658 | |
Total Operating Income | 503 | (72) | |
Total Depreciation and Amortization | 0 | 54 | |
Total Income Taxes | 131 | (17) | |
Total Property Additions | 0 | 6 | |
Total Identifiable Assets | 491 | 1,338 | |
Corporate and Services | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | 13,000 | 11,596 | |
Total Operating Income | (4,571) | 1,667 | |
Total Depreciation and Amortization | 3,214 | 401 | |
Total Interest Charges | 7,470 | 4,731 | |
Total Income Taxes | (1,992) | 1,360 | |
Total Property Additions | 3,345 | 93 | |
Total Identifiable Assets | 640,996 | 711,038 | |
Intersegment eliminations | |||
Segment Reporting Information [Line Items] | |||
Total Operating Revenues | (21,770) | (17,203) | |
Total Interest Charges | (4,645) | (3,332) | |
Total Identifiable Assets | (572,441) | (661,363) | |
SJI Midstream, LLC | |||
Segment Reporting Information [Line Items] | |||
Total Identifiable Assets | 64,831 | $ 63,112 | |
SJI Midstream, LLC | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total Interest Charges | 426 | 510 | |
Total Income Taxes | 62 | (84) | |
Total Property Additions | $ 211 | $ 152 |
RATES AND REGULATORY ACTIONS (D
RATES AND REGULATORY ACTIONS (Details) - New Jersey Board of Public Utilities - South Jersey Gas Company $ in Millions | 1 Months Ended |
Mar. 31, 2018USD ($) | |
Schedule of Capitalization [Line Items] | |
Requested term (in years) | 5 years |
Public utilities, requested rate increase (decrease), amount | $ (195.4) |
REGULATORY ASSETS AND REGULAT49
REGULATORY ASSETS AND REGULATORY LIABILITIES - Regulatory Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | $ 491,629 | $ 469,224 |
Environmental Remediation Costs: Expended - Net | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 110,529 | 100,327 |
Environmental Remediation Costs: Liability for Future Expenditures | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 161,263 | 171,696 |
Deferred Asset Retirement Obligation Costs | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 42,622 | 42,368 |
Deferred Pension and Other Postretirement Benefit Costs | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 78,211 | 78,211 |
Deferred Gas Costs | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 54,351 | 16,838 |
Conservation Incentive Program Receivable | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 12,118 | 26,652 |
Societal Benefit Costs Receivable | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 2,699 | 2,484 |
Deferred Interest Rate Contracts | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 6,006 | 7,028 |
Energy Efficiency Tracker | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 1,832 | 2,094 |
Pipeline Supplier Service Charges | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 686 | 708 |
Pipeline Integrity Cost | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 4,977 | 5,280 |
AFUDC - Equity Related Deferrals | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | 12,899 | 12,785 |
Other Regulatory Assets | ||
Regulatory Assets [Line Items] | ||
Total Regulatory Assets | $ 3,436 | $ 2,753 |
REGULATORY ASSETS AND REGULAT50
REGULATORY ASSETS AND REGULATORY LIABILITIES - Narrative and Regulatory Liabilities (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)siteasset | Dec. 31, 2017USD ($) | |
Regulatory Liabilities [Line Items] | ||
Total Regulatory Liabilities | $ 300,358 | $ 287,105 |
Deferred Revenues - Net | ||
Regulatory Liabilities [Line Items] | ||
Increase in Regulatory Assets | 37,500 | |
Tax Reform | ||
Regulatory Liabilities [Line Items] | ||
Increase in Regulatory Assets | 13,000 | |
Excess Plant Removal Costs | ||
Regulatory Liabilities [Line Items] | ||
Total Regulatory Liabilities | 23,527 | 23,295 |
Energy Efficiency Tracker | ||
Regulatory Liabilities [Line Items] | ||
Total Regulatory Liabilities | $ 276,831 | $ 263,810 |
Environmental restoration costs | ||
Regulatory Assets [Line Items] | ||
Number of regulatory assets | asset | 2 | |
Number of sites for environmental cleanup | site | 12 | |
Original recovery period of expenditures | 7 years |
PENSION AND OTHER POSTRETIREM51
PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | |
Pension Benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service Cost | $ 2,177,000 | $ 1,382,000 | |
Interest Cost | 5,108,000 | 2,955,000 | |
Expected Return on Plan Assets | (7,633,000) | (3,524,000) | |
Amortizations: | |||
Prior Service Cost | 71,000 | 33,000 | |
Actuarial Loss | 4,132,000 | 2,613,000 | |
Net Periodic Benefit Cost | 3,855,000 | 3,459,000 | |
Capitalized Benefit Cost | (483,000) | (1,271,000) | |
Deferred Benefit Cost | (751,000) | (161,000) | |
Total Net Periodic Benefit Expense | 2,621,000 | 2,027,000 | |
Contributions | $ 10,000,000 | 0 | |
Estimated future contributions | 0 | ||
Pension Benefits | South Jersey Gas Company | |||
Amortizations: | |||
Net Periodic Benefit Cost | 2,500,000 | 2,500,000 | |
Contributions | $ 8,000,000 | ||
Estimated future contributions | 0 | ||
Other Postretirement Benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service Cost | 81,000 | 247,000 | |
Interest Cost | 217,000 | 601,000 | |
Expected Return on Plan Assets | (305,000) | (853,000) | |
Amortizations: | |||
Prior Service Cost | (31,000) | (86,000) | |
Actuarial Loss | 111,000 | 312,000 | |
Net Periodic Benefit Cost | 73,000 | 221,000 | |
Capitalized Benefit Cost | (5,000) | (55,000) | |
Total Net Periodic Benefit Expense | 68,000 | 166,000 | |
Defined benefit plan regulatory obligation to contribute to the plan during the period | 3,600,000 | ||
Other Postretirement Benefits | South Jersey Gas Company | |||
Amortizations: | |||
Net Periodic Benefit Cost | 100,000 | $ 100,000 | |
Supplemental executive retirement plan | |||
Amortizations: | |||
Estimated future contributions | $ 2,400,000 |
LINES OF CREDIT (Details)
LINES OF CREDIT (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | |
Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Total Facility | $ 660,000,000 | |
Usage | 255,000,000 | |
Available Liquidity | $ 405,000,000 | |
Weighted average interest rate on borrowings | 2.67% | 1.98% |
Average borrowings outstanding | $ 238,000,000 | $ 287,900,000 |
Maximum amounts outstanding | $ 431,000,000 | $ 354,100,000 |
Financial covenant, ratio of indebtedness to consolidated total capitalization, syndicate (not more than) | 0.70 | |
Line of Credit | SJI | ||
Line of Credit Facility [Line Items] | ||
Total Facility | $ 450,000,000 | |
Usage | 191,000,000 | |
Available Liquidity | 259,000,000 | |
Line of Credit | SJI | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Total Facility | 400,000,000 | |
Usage | 141,000,000 | |
Available Liquidity | 259,000,000 | |
Letters of credit outstanding | 6,000,000 | |
Line of Credit | SJI | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Total Facility | 50,000,000 | |
Usage | 50,000,000 | |
Available Liquidity | 0 | |
Line of Credit | South Jersey Gas Company | ||
Line of Credit Facility [Line Items] | ||
Total Facility | 210,000,000 | |
Usage | 64,000,000 | |
Available Liquidity | $ 146,000,000 | |
Weighted average interest rate on borrowings | 2.32% | 1.15% |
Average borrowings outstanding | $ 47,700,000 | $ 34,700,000 |
Maximum amounts outstanding | $ 85,000,000 | $ 110,100,000 |
Financial covenant, ratio of indebtedness to consolidated total capitalization (not more than) | 0.65 | |
Line of Credit | South Jersey Gas Company | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Total Facility | $ 200,000,000 | |
Usage | 64,000,000 | |
Available Liquidity | 136,000,000 | |
Letters of credit outstanding | 900,000 | |
Line of Credit | South Jersey Gas Company | Uncommitted Bank Line | ||
Line of Credit Facility [Line Items] | ||
Total Facility | 10,000,000 | |
Usage | ||
Available Liquidity | 10,000,000 | |
Unsecured promissory notes | SJG Commercial Paper Program | ||
Line of Credit Facility [Line Items] | ||
Total Facility | $ 200,000,000 | |
Fixed maturities of notes, at maximum number of days | 270 days |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 3 Months Ended | 15 Months Ended | ||
Mar. 31, 2018USD ($)siteuniondecatherm / daycontract | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($)siteuniondecatherm / daycontract | Dec. 31, 2017USD ($) | |
Commitment and Contingencies [Line Items] | ||||
Percentage of personnel represented by collective bargaining agreements | 40.00% | 40.00% | ||
Number of unions | union | 2 | 2 | ||
Cost of Sales - Nonutility | $ 195,951,000 | $ 215,763,000 | ||
Interest Charges | 13,972,000 | 16,745,000 | ||
Approximate amount accrued related to all claims | $ 3,100,000 | $ 3,100,000 | $ 3,000,000 | |
Environmental restoration costs | ||||
Commitment and Contingencies [Line Items] | ||||
Number of sites for environmental cleanup | site | 12 | 12 | ||
Pricing dispute, long-term gas supply contract | ||||
Commitment and Contingencies [Line Items] | ||||
Number of long-term gas supply contracts | contract | 2 | 2 | ||
Line of Credit | ||||
Commitment and Contingencies [Line Items] | ||||
Letter of credit provided | $ 660,000,000 | $ 660,000,000 | ||
Standby letters of credit | ||||
Commitment and Contingencies [Line Items] | ||||
Letter of credit provided | 6,000,000 | $ 6,000,000 | ||
South Jersey Gas Company | ||||
Commitment and Contingencies [Line Items] | ||||
Cumulative obligation for demand charges and reservation fees per month | $ 5,800,000 | |||
Percentage of personnel represented by collective bargaining agreements | 57.00% | 57.00% | ||
Interest Charges | $ 6,728,000 | $ 5,878,000 | ||
Approximate amount accrued related to all claims | 800,000 | $ 800,000 | $ 700,000 | |
South Jersey Gas Company | Pricing dispute, long-term gas supply contract | Judicial ruling | ||||
Commitment and Contingencies [Line Items] | ||||
Amount to be paid to supplier | 20,600,000 | |||
South Jersey Gas Company | Line of Credit | ||||
Commitment and Contingencies [Line Items] | ||||
Letter of credit provided | 210,000,000 | 210,000,000 | ||
South Jersey Gas Company | Syndicated Revolving Credit Facility | Line of Credit | ||||
Commitment and Contingencies [Line Items] | ||||
Letter of credit provided | 200,000,000 | 200,000,000 | ||
Letters of credit outstanding | 900,000 | 900,000 | ||
South Jersey Gas Company | Letters of credit under separate facility | ||||
Commitment and Contingencies [Line Items] | ||||
Letter of credit provided | 25,100,000 | $ 25,100,000 | ||
South Jersey Resources Group | ||||
Commitment and Contingencies [Line Items] | ||||
Cumulative obligation for demand charges and reservation fees per month | $ 500,000 | |||
Minimum purchase commitment (in dts/d) | decatherm / day | 604,000 | 604,000 | ||
Maximum purchase commitment (in dts/d) | decatherm / day | 954,000 | 954,000 | ||
Minimum length of contract | 3 years | |||
Maximum length of contract | 10 years | |||
South Jersey Resources Group | Pricing dispute, long-term gas supply contract | Judicial ruling | ||||
Commitment and Contingencies [Line Items] | ||||
Amount to be paid to supplier | $ 53,900,000 | |||
Cost of Sales - Nonutility | $ 100,000 | |||
Interest Charges | 200,000 | |||
Parental guarantee | ||||
Commitment and Contingencies [Line Items] | ||||
Parental guarantees | $ 6,100,000 | $ 6,100,000 | ||
Guarantee expiration period | 2 years |
DERIVATIVE INSTRUMENTS - Outsta
DERIVATIVE INSTRUMENTS - Outstanding Contracts (Details) MMcfe in Thousands, MWh in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018USD ($) | Mar. 31, 2018USD ($)MWh | Mar. 31, 2018USD ($)MMcfe | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Derivative [Line Items] | |||||
Reclassified unrealized gain (loss) to interest income (expense) | $ (2,400,000) | ||||
Interest Rate Swap, $20,000,000 Contract 1 | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 20,000,000 | $ 20,000,000 | $ 20,000,000 | ||
Fixed Interest Rate | 3.049% | 3.049% | 3.049% | ||
Interest Rate Swap, $20,000,000 Contract 2 | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 20,000,000 | $ 20,000,000 | $ 20,000,000 | ||
Fixed Interest Rate | 3.049% | 3.049% | 3.049% | ||
Interest Rate Swap, $10,000,000 | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | ||
Fixed Interest Rate | 3.049% | 3.049% | 3.049% | ||
Basis and Index related net purchase (sales) contracts | |||||
Derivative [Line Items] | |||||
Notional amount (natural gas in mmcfe and electricity in mwh) | MMcfe | 29,000 | ||||
Derivatives not designated as hedging instruments under GAAP | |||||
Derivative [Line Items] | |||||
Gain (loss) on energy related derivative instruments not designated as hedging instruments | $ 23,353,000 | $ 14,688,000 | |||
Expected future purchases | |||||
Derivative [Line Items] | |||||
Notional amount (natural gas in mmcfe and electricity in mwh) | 2.4 | 45,400 | |||
Expected future sales | |||||
Derivative [Line Items] | |||||
Notional amount (natural gas in mmcfe and electricity in mwh) | 2 | 57,000 | |||
SJG | |||||
Derivative [Line Items] | |||||
Unrealized gains (losses) | 700,000 | $ 2,100,000 | |||
Unamortized balance | $ 900,000 | ||||
SJG | Interest Rate Swap, $12,500,000 Contract 1 | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 12,500,000 | $ 12,500,000 | $ 12,500,000 | ||
Fixed Interest Rate | 3.53% | 3.53% | 3.53% | ||
SJG | Interest Rate Swap, $12,500,000 Contract 2 | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 12,500,000 | $ 12,500,000 | $ 12,500,000 | ||
Fixed Interest Rate | 3.43% | 3.43% | 3.43% | ||
SJG | Basis and Index related net purchase (sales) contracts | |||||
Derivative [Line Items] | |||||
Notional amount (natural gas in mmcfe and electricity in mwh) | MMcfe | (3,100) | ||||
SJG | Expected future purchases | |||||
Derivative [Line Items] | |||||
Notional amount (natural gas in mmcfe and electricity in mwh) | MMcfe | 13,300 | ||||
SJG | Expected future sales | |||||
Derivative [Line Items] | |||||
Notional amount (natural gas in mmcfe and electricity in mwh) | MMcfe | 300 |
DERIVATIVE INSTRUMENTS - Fair V
DERIVATIVE INSTRUMENTS - Fair Value of all Derivative Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Assets | $ 36,654 | $ 48,127 |
Liabilities | 24,359 | 63,333 |
South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 404 | 7,332 |
Liabilities | 7,118 | 16,468 |
Commodity Contract | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 36,654 | 48,127 |
Liabilities | 0 | 0 |
Commodity Contract | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 404 | 7,332 |
Liabilities | 0 | 0 |
Derivatives not designated as hedging instruments under GAAP | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 36,654 | 48,127 |
Liabilities | 24,359 | 63,333 |
Derivatives not designated as hedging instruments under GAAP | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 404 | 7,332 |
Liabilities | 7,118 | 16,468 |
Derivatives not designated as hedging instruments under GAAP | Commodity Contract | Derivatives - Energy Related - Current | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 24,386 | 42,139 |
Liabilities | 12,486 | 46,938 |
Derivatives not designated as hedging instruments under GAAP | Commodity Contract | Derivatives - Energy Related - Current | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 404 | 7,327 |
Liabilities | 784 | 9,270 |
Derivatives not designated as hedging instruments under GAAP | Commodity Contract | Derivatives - Energy Related - Non-Current | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 12,268 | 5,988 |
Liabilities | 4,153 | 6,025 |
Derivatives not designated as hedging instruments under GAAP | Commodity Contract | Derivatives - Energy Related - Non-Current | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 5 |
Liabilities | 328 | 170 |
Derivatives not designated as hedging instruments under GAAP | Interest rate contracts | Derivatives - Other - Current | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 526 | 748 |
Derivatives not designated as hedging instruments under GAAP | Interest rate contracts | Derivatives - Other - Current | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 337 | 389 |
Derivatives not designated as hedging instruments under GAAP | Interest rate contracts | Derivatives - Other - Noncurrent | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 7,194 | 9,622 |
Derivatives not designated as hedging instruments under GAAP | Interest rate contracts | Derivatives - Other - Noncurrent | South Jersey Gas Company | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | $ 5,669 | $ 6,639 |
DERIVATIVE INSTRUMENTS - Offset
DERIVATIVE INSTRUMENTS - Offsetting Arrangements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Offsetting Derivative Assets [Abstract] | ||
Gross amounts of recognized assets/liabilities | $ 36,654 | $ 48,127 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amount offset in the balance sheet | 24,359 | 63,333 |
SJG | ||
Offsetting Derivative Assets [Abstract] | ||
Gross amounts of recognized assets/liabilities | 404 | 7,332 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amount offset in the balance sheet | 7,118 | 16,468 |
Commodity Contract | ||
Offsetting Derivative Assets [Abstract] | ||
Gross amounts of recognized assets/liabilities | 36,654 | 48,127 |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | 36,654 | 48,127 |
Gross amounts not offset in the balance sheet, Financial Instruments | (10,086) | (24,849) |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | 0 | 0 |
Net amount | 26,568 | 23,278 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts of recognized assets/liabilities | (16,639) | (52,963) |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | (16,639) | (52,963) |
Gross amounts not offset in the balance sheet, Financial Instruments | 10,086 | 24,849 |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | 755 | 8,832 |
Net amount | (5,798) | (19,282) |
Commodity Contract | SJG | ||
Offsetting Derivative Assets [Abstract] | ||
Gross amounts of recognized assets/liabilities | 404 | 7,332 |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | 404 | 7,332 |
Gross amounts not offset in the balance sheet, Financial Instruments | (342) | (208) |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | 0 | 0 |
Net amount | 62 | 7,124 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts of recognized assets/liabilities | (1,112) | (9,440) |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | (1,112) | (9,440) |
Gross amounts not offset in the balance sheet, Financial Instruments | 342 | 208 |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | 755 | 1,543 |
Net amount | (15) | (7,689) |
Other | ||
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts of recognized assets/liabilities | (7,720) | (10,370) |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | (7,720) | (10,370) |
Gross amounts not offset in the balance sheet, Financial Instruments | 0 | 0 |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | 0 | 0 |
Net amount | (7,720) | (10,370) |
Other | SJG | ||
Offsetting Derivative Liabilities [Abstract] | ||
Gross amounts of recognized assets/liabilities | (6,006) | (7,028) |
Gross amount offset in the balance sheet | 0 | 0 |
Net amounts of assets/liabilities in balance sheet | (6,006) | (7,028) |
Gross amounts not offset in the balance sheet, Financial Instruments | 0 | 0 |
Gross amounts not offset in the balance sheet, Cash Collateral Posted | 0 | 0 |
Net amount | $ (6,006) | $ (7,028) |
DERIVATIVE INSTRUMENTS - Effect
DERIVATIVE INSTRUMENTS - Effect of Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Interest Rate Contracts: | ||
Total | $ 24,981 | $ 13,683 |
Fair value of derivative instruments with credit-risk-related features | 1,000 | |
Additional collateral, aggregate fair value | 200 | |
Derivatives in Cash Flow Hedging Relationships under GAAP | ||
Interest Rate Contracts: | ||
Losses reclassified from AOCL into income | (12) | (2,487) |
Derivatives in Cash Flow Hedging Relationships under GAAP | SJG | ||
Interest Rate Contracts: | ||
Losses reclassified from AOCL into income | (12) | (12) |
Derivatives not designated as hedging instruments under GAAP | ||
Interest Rate Contracts: | ||
(Losses) gains on energy-related commodity contracts | 23,353 | 14,688 |
Losses on interest rate contracts | $ 1,628 | $ (1,005) |
FAIR VALUE OF FINANCIAL ASSET58
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Measured on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Available-for-Sale Securities | $ 36 | $ 36 |
Derivatives - Energy Related Assets | 36,654 | 48,127 |
Total Assets | 36,690 | 48,163 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 16,639 | 52,963 |
Derivatives - Other | 7,720 | 10,370 |
Total Liabilities | 24,359 | 63,333 |
SJG | ||
Assets | ||
Derivatives - Energy Related Assets | 404 | 7,332 |
Total Assets | 404 | 7,332 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 1,112 | 9,440 |
Derivatives - Other | 6,006 | 7,028 |
Total Liabilities | 7,118 | 16,468 |
Level 1 | ||
Assets | ||
Available-for-Sale Securities | 36 | 36 |
Derivatives - Energy Related Assets | 935 | 5,155 |
Total Assets | 971 | 5,191 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 3,947 | 10,687 |
Derivatives - Other | 0 | 0 |
Total Liabilities | 3,947 | 10,687 |
Level 1 | SJG | ||
Assets | ||
Derivatives - Energy Related Assets | 342 | 208 |
Total Assets | 342 | 208 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 1,097 | 1,750 |
Derivatives - Other | 0 | 0 |
Total Liabilities | 1,097 | 1,750 |
Level 2 | ||
Assets | ||
Available-for-Sale Securities | 0 | 0 |
Derivatives - Energy Related Assets | 14,121 | 21,869 |
Total Assets | 14,121 | 21,869 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 7,680 | 24,283 |
Derivatives - Other | 7,720 | 10,370 |
Total Liabilities | 15,400 | 34,653 |
Level 2 | SJG | ||
Assets | ||
Derivatives - Energy Related Assets | 62 | 230 |
Total Assets | 62 | 230 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 9 | 2,848 |
Derivatives - Other | 6,006 | 7,028 |
Total Liabilities | 6,015 | 9,876 |
Level 3 | ||
Assets | ||
Available-for-Sale Securities | 0 | 0 |
Derivatives - Energy Related Assets | 21,598 | 21,103 |
Total Assets | 21,598 | 21,103 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 5,012 | 17,993 |
Derivatives - Other | 0 | 0 |
Total Liabilities | 5,012 | 17,993 |
Level 3 | SJG | ||
Assets | ||
Derivatives - Energy Related Assets | 0 | 6,894 |
Total Assets | 0 | 6,894 |
Liabilities | ||
Derivatives - Energy Related Liabilities | 6 | 4,842 |
Derivatives - Other | 0 | 0 |
Total Liabilities | $ 6 | $ 4,842 |
FAIR VALUE OF FINANCIAL ASSET59
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Quantitative Information Regarding Significant Unobservable Inputs (Details) - Forward Contracts - Fair Value, Inputs, Level 3 $ in Thousands | Mar. 31, 2018USD ($)$ / decatherm | Dec. 31, 2017USD ($)$ / decatherm |
Natural Gas | Minimum | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 1.72 | 1.79 |
Natural Gas | Minimum | South Jersey Gas Company | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 2.16 | 2.42 |
Natural Gas | Maximum | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 7.14 | 12.09 |
Natural Gas | Maximum | South Jersey Gas Company | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 2.61 | 6.67 |
Natural Gas | Weighted Average | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 2.65 | 3.01 |
Natural Gas | Weighted Average | South Jersey Gas Company | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Forward price (in dollars per dt) | $ / decatherm | 2.28 | 5.25 |
Electricity | Minimum | On-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 37.45% | 36.36% |
Electricity | Minimum | Off-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 0.00% | 0.00% |
Electricity | Maximum | On-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 100.00% | 100.00% |
Electricity | Maximum | Off-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 62.55% | 63.64% |
Electricity | Weighted Average | On-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 53.28% | 53.39% |
Electricity | Weighted Average | Off-Peak | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Fixed electric load profile | 46.72% | 46.61% |
Discounted Cash Flow | Natural Gas | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Assets | $ | $ 14,669 | $ 13,519 |
Liabilities | $ | 3,037 | 15,686 |
Discounted Cash Flow | Natural Gas | South Jersey Gas Company | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Assets | $ | 0 | 6,894 |
Liabilities | $ | 6 | 4,842 |
Discounted Cash Flow | Electricity | ||
Fair Value Inputs, Assets And Liabilities, Quantitative Information [Line Items] | ||
Assets | $ | 6,929 | 7,584 |
Liabilities | $ | $ 1,975 | $ 2,307 |
FAIR VALUE OF FINANCIAL ASSET60
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Changes in Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Balance at beginning of period | $ 3,110 | $ 9,035 |
Other Changes in Fair Value from Continuing and New Contracts, Net | 3,989 | (988) |
Settlements | 9,487 | 8,187 |
Balance at end of period | 16,586 | 16,234 |
SJG | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Balance at beginning of period | 2,052 | 926 |
Other Changes in Fair Value from Continuing and New Contracts, Net | (6) | 511 |
Settlements | (2,052) | (926) |
Balance at end of period | $ (6) | $ 511 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | Mar. 31, 2018 | Jan. 31, 2018 |
Debt Instrument [Line Items] | ||
Interest rate | 7.50% | |
Medium-term notes | Series 2017A-2, Due January 2025 | ||
Debt Instrument [Line Items] | ||
Principal amount issued | $ 25,000,000 | |
Interest rate | 3.32% | |
Medium-term notes | Series 2017B-2, Due January 2028 | ||
Debt Instrument [Line Items] | ||
Principal amount issued | $ 25,000,000 | |
Interest rate | 3.56% |
ACCUMULATED OTHER COMPREHENSI62
ACCUMULATED OTHER COMPREHENSIVE LOSS - Summary of Changes (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,192,409 | ||
Other comprehensive income before reclassifications | 0 | ||
Amounts reclassified from AOCL | 9 | ||
Other Comprehensive Income - Net of Tax | [1] | 9 | $ 1,515 |
Ending balance | $ 1,281,497 | ||
Combined statutory tax rate | 25.00% | 40.00% | |
South Jersey Gas Company | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | $ 921,433 | ||
Other comprehensive income before reclassifications | 0 | ||
Amounts reclassified from AOCL | 9 | ||
Other Comprehensive Income - Net of Tax | [2] | 9 | $ 7 |
Ending balance | $ 988,188 | ||
Combined statutory tax rate | 25.00% | 40.00% | |
Total | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | $ (36,765) | ||
Ending balance | (36,756) | ||
Postretirement Liability Adjustment | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (36,262) | ||
Other comprehensive income before reclassifications | 0 | ||
Amounts reclassified from AOCL | 0 | ||
Other Comprehensive Income - Net of Tax | 0 | ||
Ending balance | (36,262) | ||
Unrealized Gain (Loss) on Derivatives-Other | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (396) | ||
Other comprehensive income before reclassifications | 0 | ||
Amounts reclassified from AOCL | 9 | ||
Other Comprehensive Income - Net of Tax | 9 | ||
Ending balance | (387) | ||
Unrealized Gain (Loss) on Available-for-Sale Securities | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (10) | ||
Other comprehensive income before reclassifications | 0 | ||
Amounts reclassified from AOCL | 0 | ||
Other Comprehensive Income - Net of Tax | 0 | ||
Ending balance | (10) | ||
Other Comprehensive Income (Loss) of Affiliated Companies | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (97) | ||
Other comprehensive income before reclassifications | 0 | ||
Amounts reclassified from AOCL | 0 | ||
Other Comprehensive Income - Net of Tax | 0 | ||
Ending balance | (97) | ||
Total | South Jersey Gas Company | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (25,997) | ||
Ending balance | (25,988) | ||
Postretirement Liability Adjustment | South Jersey Gas Company | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (25,507) | ||
Other comprehensive income before reclassifications | 0 | ||
Amounts reclassified from AOCL | 0 | ||
Other Comprehensive Income - Net of Tax | 0 | ||
Ending balance | (25,507) | ||
Unrealized Gain (Loss) on Derivatives-Other | South Jersey Gas Company | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (490) | ||
Other comprehensive income before reclassifications | 0 | ||
Amounts reclassified from AOCL | 9 | ||
Other Comprehensive Income - Net of Tax | 9 | ||
Ending balance | $ (481) | ||
[1] | Determined using a combined average statutory tax rate of approximately 25% and 40% in 2018 and 2017, respectively. | ||
[2] | Determined using a combined average statutory tax rate of approximately 25% and 40% in 2018 and 2017, respectively. |
ACCUMULATED OTHER COMPREHENSI63
ACCUMULATED OTHER COMPREHENSIVE LOSS - Reclassifications out of AOCL (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||
Income Taxes | $ 36,415 | $ 21,870 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ (9) | |
Combined statutory tax rate | 25.00% | 40.00% |
South Jersey Gas Company | ||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||
Income Taxes | $ 21,836 | $ 29,911 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ (9) | |
Combined statutory tax rate | 25.00% | 40.00% |
Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges | South Jersey Gas Company | ||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ (9) | |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | ||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||
Income Taxes | (3) | |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges | South Jersey Gas Company | ||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||
Income Taxes | (3) | |
Net Income (Loss) Attributable to Parent | 9 | |
Interest Charges | Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | ||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||
Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | 12 | |
Interest Charges | Reclassification out of Accumulated Other Comprehensive Income | Unrealized Loss in on Derivatives - Other - Interest Rate Contracts designated as cash flow hedges | South Jersey Gas Company | ||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||
Unrealized Loss on Derivatives-Other - interest rate contracts designated as cash flow hedges | $ 12 |
REVENUE (Details)
REVENUE (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 443,979 |
South Jersey Gas Company | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 193,900 |
REVENUE Disaggregated Revenue (
REVENUE Disaggregated Revenue (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 443,979 |
Residential | |
Disaggregation of Revenue [Line Items] | |
Revenue | 155,878 |
Commercial & Industrial | |
Disaggregation of Revenue [Line Items] | |
Revenue | 282,234 |
OSS & Capacity Release | |
Disaggregation of Revenue [Line Items] | |
Revenue | 5,204 |
Other | |
Disaggregation of Revenue [Line Items] | |
Revenue | 663 |
Gas | |
Disaggregation of Revenue [Line Items] | |
Revenue | 396,452 |
Electric | |
Disaggregation of Revenue [Line Items] | |
Revenue | 28,378 |
Solar | |
Disaggregation of Revenue [Line Items] | |
Revenue | 9,308 |
CHP | |
Disaggregation of Revenue [Line Items] | |
Revenue | 7,853 |
Landfills | |
Disaggregation of Revenue [Line Items] | |
Revenue | 1,468 |
Other | |
Disaggregation of Revenue [Line Items] | |
Revenue | 520 |
Gas Utility Operations | |
Disaggregation of Revenue [Line Items] | |
Revenue | 193,934 |
Gas Utility Operations | Residential | |
Disaggregation of Revenue [Line Items] | |
Revenue | 147,262 |
Gas Utility Operations | Commercial & Industrial | |
Disaggregation of Revenue [Line Items] | |
Revenue | 40,805 |
Gas Utility Operations | OSS & Capacity Release | |
Disaggregation of Revenue [Line Items] | |
Revenue | 5,204 |
Gas Utility Operations | Other | |
Disaggregation of Revenue [Line Items] | |
Revenue | 663 |
Gas Utility Operations | Gas | |
Disaggregation of Revenue [Line Items] | |
Revenue | 193,934 |
Wholesale Energy Operations | |
Disaggregation of Revenue [Line Items] | |
Revenue | 173,846 |
Wholesale Energy Operations | Commercial & Industrial | |
Disaggregation of Revenue [Line Items] | |
Revenue | 173,846 |
Wholesale Energy Operations | Gas | |
Disaggregation of Revenue [Line Items] | |
Revenue | 173,846 |
Retail Gas and Other Operations | |
Disaggregation of Revenue [Line Items] | |
Revenue | 33,246 |
Retail Gas and Other Operations | Commercial & Industrial | |
Disaggregation of Revenue [Line Items] | |
Revenue | 33,246 |
Retail Gas and Other Operations | Gas | |
Disaggregation of Revenue [Line Items] | |
Revenue | 33,246 |
On-Site Energy Production | |
Disaggregation of Revenue [Line Items] | |
Revenue | 21,157 |
On-Site Energy Production | Commercial & Industrial | |
Disaggregation of Revenue [Line Items] | |
Revenue | 21,157 |
On-Site Energy Production | Solar | |
Disaggregation of Revenue [Line Items] | |
Revenue | 11,836 |
On-Site Energy Production | CHP | |
Disaggregation of Revenue [Line Items] | |
Revenue | 7,853 |
On-Site Energy Production | Landfills | |
Disaggregation of Revenue [Line Items] | |
Revenue | 1,468 |
Corporate Services and Intersegment | |
Disaggregation of Revenue [Line Items] | |
Revenue | (8,770) |
Corporate Services and Intersegment | Commercial & Industrial | |
Disaggregation of Revenue [Line Items] | |
Revenue | (8,770) |
Corporate Services and Intersegment | Gas | |
Disaggregation of Revenue [Line Items] | |
Revenue | (4,574) |
Corporate Services and Intersegment | Electric | |
Disaggregation of Revenue [Line Items] | |
Revenue | (1,668) |
Corporate Services and Intersegment | Solar | |
Disaggregation of Revenue [Line Items] | |
Revenue | (2,528) |
Retail Electric Operations | |
Disaggregation of Revenue [Line Items] | |
Revenue | 30,046 |
Retail Electric Operations | Residential | |
Disaggregation of Revenue [Line Items] | |
Revenue | 8,096 |
Retail Electric Operations | Commercial & Industrial | |
Disaggregation of Revenue [Line Items] | |
Revenue | 21,950 |
Retail Electric Operations | Electric | |
Disaggregation of Revenue [Line Items] | |
Revenue | 30,046 |
Appliance Service Operations | |
Disaggregation of Revenue [Line Items] | |
Revenue | 520 |
Appliance Service Operations | Residential | |
Disaggregation of Revenue [Line Items] | |
Revenue | 520 |
Appliance Service Operations | Other | |
Disaggregation of Revenue [Line Items] | |
Revenue | $ 520 |
REVENUE Accounts Receivable (De
REVENUE Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Disaggregation of Revenue [Line Items] | ||
Accounts Receivable | $ 243,395 | $ 202,379 |
Unbilled Revenues | 62,601 | 73,377 |
South Jersey Gas Company | ||
Disaggregation of Revenue [Line Items] | ||
Accounts Receivable | 128,583 | 78,571 |
Unbilled Revenues | 44,287 | $ 54,980 |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||
Disaggregation of Revenue [Line Items] | ||
Accounts Receivable | (41,016) | |
Unbilled Revenues | 10,776 | |
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | South Jersey Gas Company | ||
Disaggregation of Revenue [Line Items] | ||
Accounts Receivable | (50,012) | |
Unbilled Revenues | $ 10,693 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | 1 Months Ended | |
Apr. 30, 2018 | Mar. 31, 2018 | |
Subsequent Event [Line Items] | ||
Par value of common stock (in dollars per share) | $ 1.25 | |
Interest rate | 7.50% | |
Common Stock | Subsequent event | ||
Subsequent Event [Line Items] | ||
Shares available for issuance | 12,669,491 | |
Number of shares issued | 5,889,830 | |
Par value of common stock (in dollars per share) | $ 1.25 | |
Price per share (in usd per share) | $ 29.50 | |
Consideration received, gross | $ 173,700,000 | |
Consideration received | $ 167,700,000 | |
Common Stock | Over-Allotment Option | Subsequent event | ||
Subsequent Event [Line Items] | ||
Number of shares issued | 1,652,542 | |
Capital Units | Subsequent event | ||
Subsequent Event [Line Items] | ||
Number of shares issued | 5,750,000 | |
Corporate Unit, stated value per share (in usd per share) | $ 50 | |
Corporate Unit, cash redemption value (in usd per share) | $ 50 | |
Consideration received, gross | 287,500,000 | |
Consideration received | $ 278,900,000 | |
Capital Units | Over-Allotment Option | Subsequent event | ||
Subsequent Event [Line Items] | ||
Number of shares issued | 750,000 | |
Series 2018A, Due 2031 | Subsequent event | ||
Subsequent Event [Line Items] | ||
Interest rate | 3.70% | |
3.18% Notes, Due April 2021 | Subsequent event | ||
Subsequent Event [Line Items] | ||
Principal amount issued | $ 90,000,000 | |
Interest rate | 3.18% | |
Series 2018 B, 3.78% Senior Notes | Subsequent event | ||
Subsequent Event [Line Items] | ||
Principal amount issued | $ 80,000,000 | |
Interest rate | 3.78% | |
Term (in years) | 10 years | |
Series 2018 C. 3.88% Senior Notes | Subsequent event | ||
Subsequent Event [Line Items] | ||
Principal amount issued | $ 80,000,000 | |
Interest rate | 3.88% | |
Term (in years) | 12 years | |
Scenario, Forecast | Series 2018A, Due 2031 | Capital Units | ||
Subsequent Event [Line Items] | ||
Interest in notes issued, percent | 5.00% | |
Bank of America, N.A. | Common Stock | Private Placement | Subsequent event | ||
Subsequent Event [Line Items] | ||
Number of shares held for forward contract | 6,779,661 | |
Unsecured promissory notes | Subsequent event | ||
Subsequent Event [Line Items] | ||
Principal amount issued | $ 250,000,000 | |
Line of Credit | Line of Credit | Subsequent event | ||
Subsequent Event [Line Items] | ||
Repayments of debt | 116,000,000 | |
Revolving Credit Facility | Line of Credit | Subsequent event | ||
Subsequent Event [Line Items] | ||
Repayments of debt | 50,000,000 | |
Bridge Loan | Subsequent event | ||
Subsequent Event [Line Items] | ||
Principal amount issued | $ 1,160,000,000 |