ELIZABETHTOWN GAS CO, 10-K, 1993-12-13

ELIZABETHTOWN GAS CO
10-K, 1993-12-13
NATURAL GAS TRANSMISSION

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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended September 30, 1993 Commission File # 2-38193

Elizabethtown Gas Company

(Wholly-owned subsidiary of NUI Corporation)

(Exact name of registrant as specified in its charter)

New Jersey 22-0888120
(State of incorporation) (I.R.S. employer identification no.)

One Elizabethtown Plaza, Union, NJ 07083
(Address of principal executive offices, including zip code)

(908) 289-5000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: NONE.

Securities registered pursuant to Section 12(g) of the Act: NONE.

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J (1) (a)
AND (b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM IN THE REDUCED
DISCLOSURE FORMAT.

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days:

YES X NO

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

Common Stock, No Par Value: 1,040,164 shares outstanding
as of October 31, 1993.

DOCUMENTS INCORPORATED BY REFERENCE:

No annual report to security holders, proxy or information statement nor
any prospectus is incorporated herein by reference.

<PAGE>

Elizabethtown Gas Company

Annual Report on Form 10-K For The
Fiscal Year Ended September 30, 1993

TABLE OF CONTENTS

PART I
Page
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . 12
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of Security Holders . . . 13

PART II

Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters . . . . . . . . . . . . . . 13
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . 14
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . 16
Item 8. Financial Statements and Supplementary Data . . . . . . . 22
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure . . . . . . . . . . . . . . . 22

PART III

Item 10. Directors and Executive Officers of the Registrant . . . 22
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . 22
Item 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . . . . . 22
Item 13. Certain Relationships and Related Transactions . . . . . 22

PART IV

Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K . . . . . . . . . . . . . . . . 22

<PAGE>

Elizabethtown Gas Company

Annual Report on Form 10-K For The
Fiscal Year Ended September 30, 1993

PART I

Item 1. Business

Elizabethtown Gas Company ("Elizabethtown" or the "Company") is
engaged primarily in the distribution of natural gas and currently serves
more than 319,000 customers in New Jersey and Florida. Elizabethtown,
which was organized in 1855, operates with two divisions: The New Jersey
Division, that does business as Elizabethtown Gas Company, and the Florida
Division, that does business as City Gas Company of Florida. The Company
is a wholly-owned subsidiary of NUI Corporation ("NUI"), an exempt public
utility holding company that was incorporated in New Jersey in 1969. See
"-Business Plan" and "-The Planned Mergers."

Business Plan

The Company, in accordance with the NUI business plan, is
concentrating on customer growth and the profitability of its gas
distribution business. Growth opportunities could include the acquisition
of additional gas distribution companies, the development of new
franchises and the management of certain service requirements of other
utilities on a contract basis. The Company's strategy involves assembling,
as opportunities become available, a natural gas distribution system in
several states, while maintaining a balanced capital structure. From time
to time, the Company reviews acquisition opportunities and, when
requested, submits acquisition proposals.

The Company's plan takes advantage of opportunities presented by the
restructuring of interstate natural gas pipeline operations and the
increase in supply alternatives. Traditionally, interstate pipelines were
wholesalers of natural gas to local distribution companies and generally
did not provide separate transportation or other services for specific
customers. In 1985, the Federal Energy Regulatory Commission (the "FERC")
adopted Order No. 436 that encouraged interstate pipelines to make
transportation of gas available to customers on a non-discriminatory
basis. Such voluntary "open access" by certain interstate pipelines
enhanced the opportunity for the Company, other local gas distribution
companies and industrial customers to purchase natural gas directly from
gas producers and others. In 1992, the FERC issued Order No. 636 that,
among other things, mandated the separation or "unbundling" of interstate
pipeline sales, transportation and storage services and established
guidelines for capacity management effective in 1993. Order No. 636
increased the opportunity for local gas distribution companies and
industrial customers to purchase natural gas from alternative sources,
while increasing the potential business and regulatory risk borne by a
local gas distribution company with respect to the acquisition and
management of natural gas services.

The business plan envisions a natural gas distribution system in
which, among other matters, local managements conduct the marketing,

1 <PAGE>

customer service and distribution operations in each state served, with
management of gas supply and access to capital markets coordinated
centrally.

Pursuant to the business plan, NUI spun-off its non-utility
businesses to its shareholders and acquired City Gas Company of Florida
which it merged into Elizabethtown in 1988. In 1990, NUI entered into a
merger agreement with Pennsylvania Enterprises, Inc., which conducts
natural gas and water utility operations in northeastern Pennsylvania,
which merger agreement subsequently was terminated. The Company acquired
additional gas utility service areas in Florida in 1991, adding
approximately 6,100 customers. In fiscal 1993, the Company expanded its
Florida operations by initiating natural gas service in St. Lucie County
(see "-Territory and Customers Served-Florida Division") and NUI entered
into an Agreement and Plan of Merger with Pennsylvania & Southern Gas
Company ("PSGS") (see "-The Planned Mergers").

There can be no assurances that the Company will acquire any
additional gas distribution properties, develop new franchises or manage
the gas supply requirements of other companies and, if such actions are
taken, there can be no assurances that they will accomplish the purposes
described above.

The Planned Mergers

On July 27, 1993, NUI and PSGS entered into an Agreement and Plan of
Merger, pursuant to which PSGS would be merged with and into NUI (the
"PSGS Merger"). Under the Agreement and Plan of Merger, NUI will acquire
all of the outstanding common shares of PSGS for approximately $17
million, payable in shares of NUI Common Stock equivalent to $71.50 per
PSGS share, except that each shareholder will receive no less than 2.4 and
no more than 3.0 shares of NUI Common Stock for each PSGS share held. The
exchange value of the NUI Common Stock will be established over the twenty
day trading period immediately prior to the PSGS Merger. The PSGS Merger
will be consummated upon receipt of all required regulatory approvals, the
approval of the stockholders of PSGS and the satisfaction or waiver of
certain other consents and conditions. Upon the effectiveness of the PSGS
Merger, NUI would assume all of the rights and obligations of PSGS.
Following the PSGS Merger, Elizabethtown will be merged with and into NUI
(the "Elizabethtown Merger"). The PSGS Merger, which will result in
approximately a seven percent increase in the number of customers served,
and the Elizabethtown Merger, through which NUI will become an operating
utility company with three divisions providing gas service in six states,
fit within the business plan (see "-Business Plan").

Territory and Customers Served

See "Selected Financial Data-Summary Consolidated Operating Data" for
summary information by customer class with respect to operating revenues,
gas volumes sold or transported and customers served. The Company serves
more than 319,000 customers, of which approximately 72% are in New Jersey
and approximately 28% are in Florida. Approximately 51% of the Company's
customers are residential and commercial customers in New Jersey that
purchase gas primarily for space heating. The Company's operating revenues
for fiscal 1993 amounted to $354.9 million, of which approximately 84%
were generated in New Jersey and approximately 16% were generated in
Florida. Gas throughput volumes sold or transported in fiscal 1993

2 <PAGE>

amounted to 71,688,000 Mcf, of which approximately 87% was sold or
transported in New Jersey and approximately 13% was sold or transported in
Florida. An Mcf is a basic unit of measurement for natural gas comprising
1,000 cubic feet of gas.

In fiscal 1993, the Company's largest single customer, a 614 megawatt
cogeneration facility in New Jersey, accounted for approximately 7% of
operating revenues and approximately 11% of total gas sold or transported.
In fiscal 1993, total throughput for electric generation, including
cogeneration, accounted for approximately 14% of operating revenues and
approximately 26% of total gas sold or transported.

New Jersey Division. The Company, through its New Jersey Division,
provides gas service to approximately 231,000 customers in franchised
territories within seven counties, or portions thereof, in central and
northwestern New Jersey. The New Jersey Division's 1,300 square-mile
service territory has a total population of approximately 950,000. Most of
the New Jersey Division's customers are located in densely-populated
central New Jersey, where increases in the number of customers are
primarily from conversions to gas heating from alternative forms of
heating systems.

The New Jersey Division's gas volumes sold or transported and
customers served for the past three fiscal years were as follows:

Gas Volumes Sold or Transported (in thousands of Mcf)

1991 1992 1993
Firm Customers
Residential 16,348 18,225 19,115
Commercial 8,546 9,639 10,463
Industrial 5,427 5,052 4,781
Interruptible Customers 10,837 9,333 12,345
Transportation 11,758 14,100 15,459
------ ------ ------
Total 52,916 56,349 62,163
====== ====== ======

Customers Served (twelve month average)

1991 1992 1993
Firm Customers
Residential - Heating 142,701 147,447 151,621
Residential - Non-heating 66,980 64,387 62,520
Commercial 15,942 16,249 16,588
Industrial 427 402 377
Interruptible and Transportation 131 143 160
------ ------ ------
Total 226,181 228,628 231,266
====== ====== ======

Approximately 70% of the residential heating customers added in New
Jersey since October 1, 1990 represented homes that were converted to gas
heating from other forms of space heating and the remainder consisted of
new homes. The reduction in residential non-heating customers principally
reflects conversions to full gas heating service. As the pool of
conversion candidates among existing non-heating customers declines, the

3 <PAGE>

Company is increasing its marketing emphasis with respect to heating
system conversions in homes and businesses that do not currently have any
natural gas service. Although new residential construction was slow over
the past several years, the pace of growth in new residential construction
starts has increased recently in the New Jersey Division's northwest
service area.

The Company has increased its marketing emphasis on commercial
conversions and is supporting local economic development groups to attract
new businesses within its service territory. The Company has proposed an
economic development program to help spur economic growth and jobs
creation. The program, which is subject to regulatory approval, would
provide grants and reduced rates for qualifying businesses that start up,
relocate or expand within designated areas.

In fiscal 1993, approximately 13 schools and 360 businesses and
housing complexes, which are subject to New Jersey legislation requiring
the registration, systematic testing and monitoring of underground fuel
oil and propane storage tanks, converted to gas heating systems and/or
switched from interruptible service to firm service. School conversions
totaled approximately 24 in fiscal 1992 and 50 in fiscal 1991. Business
and housing complex conversions totaled approximately 439 in fiscal 1992
and 350 in fiscal 1991. In addition, changing economic conditions, coupled
with environmental concerns and legislation, are creating a market for
natural gas for large commercial air conditioning units and compressed
natural gas fleet vehicles.

The Company provides gas sales and transportation service comprising
twenty percent of the primary fuel requirements of a 614 megawatt
cogeneration facility that began commercial operation in New Jersey in
July 1992 to supply electric power for New York City. The Company's gas
supply contracts with certain large cogeneration customers, including the
614 megawatt facility, allow the Company under certain conditions to take
back gas service to satisfy peak load requirements (see "-Gas Supply and
Operations"). The Company is authorized by the New Jersey Board of
Regulatory Commissioners (the "NJBRC") to retain approximately $2.3
million of the operating margins that are realized from sales to the 614
megawatt facility over approximately four years, of which $0.6 million was
realized in fiscal 1993 and $0.5 million was realized in fiscal 1992. The
margins that otherwise would be realized on gas sold or transported to the
facility are used to reduce gas costs charged to firm customers.

The decreases with respect to firm industrial customers served, which
generate revenues from the sale of gas, principally reflect conversions to
transportation service, which continues to generate revenues for the
Company from the transportation of customer-owned gas. The rate charged to
transportation customers is less than the rate charged to firm industrial
customers because the transportation customer rate does not include any
cost of gas component; however, the operating margins from both rates are
substantially the same. See "-Business Plan" and "-Competition."

The New Jersey Division's "interruptible" customers have alternative
energy sources and use gas on an "as available" basis. Variations in the
volume of gas sold or transported to these customers do not have a
significant direct effect on the Company's earnings because, in accordance
with New Jersey regulatory requirements, from 90% to 95% of the margins
that otherwise would be realized on gas sold or transported to

4 <PAGE>

interruptible customers is used to reduce gas costs charged to firm
customers.

The increase in the number of transportation customers principally
reflects customers converting from industrial sales service, as well as
the addition of new customers. See "-Business Plan" and "-Competition."

In November 1993, the NJBRC issued guidelines which are designed to
provide for the unbundling of natural gas transportation and sales
services to commercial and industrial customers. Under these guidelines
the Company is required to file new tariffs for its New Jersey Division by
April 1, 1994. The Company expects the effect of the new tariffs to be
neutral to the operating revenues and margins of the Company.

Florida Division. The Company, through its Florida Division, is the
second largest natural gas utility in Florida and it supplies gas to
approximately 88,000 customers in Dade and Broward Counties in south
Florida and in Brevard County on the central east coast of Florida, among
the fastest growing areas in the state. The Company initiated natural gas
service in fiscal 1993 to the city of Port St. Lucie in St. Lucie County.
Also, in fiscal 1993, the Company entered into a contract with the
National Aeronautics and Space Administration ("NASA") for the initiation
of natural gas service at Kennedy Space Center ("KSC") in Brevard County.
The Florida Division's service areas cover approximately 1,000 square
miles and have a population of approximately 500,000.

The Florida Division's gas volumes sold or transported and customers
served for the past three fiscal years were as follows:

Gas Volumes Sold or Transported (in thousands of Mcf)

1991 1992 1993
Firm Customers
Residential 1,785 2,026 1,904
Commercial 4,053 4,367 4,455
Interruptible 1,787 1,809 2,186
Transportation 20 716 980
------ ------ ------
Total 7,645 8,918 9,525
====== ====== ======

Customers Served (twelve month average)

1991 1992 1993
Firm Customers
Residential 81,890 83,615 83,541
Commercial 4,350 4,421 4,428
Interruptible and Transportation 30 30 32
------ ------ ------
Total 86,270 88,066 88,001
====== ====== ======

The Florida Division's residential customers purchase gas primarily
for water heating, cooking and clothes drying. Some customers also
purchase gas to provide space heating during the relatively mild winter
season. Customer growth principally reflects new construction. The market
for new residential construction in the counties served by the Florida

5 <PAGE>

Division has been expanding. The Company estimates that operating margins
for the Florida Division were lower by $0.5 million in fiscal 1993 because
of losses suffered by its customers in south Dade County, Florida, in
August 1992 as a result of Hurricane Andrew. As of September 30, 1993,
approximately 2,000 of the customers previously served in the affected
area have not rebuilt, and may not rebuild, homes that were damaged in the
storm.

In fiscal 1993, the Company initiated natural gas service to the city
of Port St. Lucie in St. Lucie County through the construction of a gate
station interconnection with the interstate pipeline system, acquisition
and conversion of an existing underground propane system and the extension
of mains through the city center. The Company expects significant growth
from this start-up investment.

The project to serve KSC, the first of a three-phase Company project
to expand service in Brevard County, will entail a 25 mile pipeline
extension at an estimated cost of $5 million to be incurred principally in
fiscal 1994, upon obtaining all required environmental permits. The
Company expects to expend an additional $10 million over the next 10 years
to complete the final two phases of the main extension and looping
project, which will provide access to additional residential, commercial,
industrial and government customers in the Cape Canaveral, Merritt Island
and Cocoa Beach areas.

In February 1991, the Company acquired certain assets of two small
gas companies in Dade County. This acquisition had the effect of adding
approximately 6,100 customers.

Under energy conservation programs approved by the Florida Public
Service Commission (the "FPSC") that are designed to offset the growth of
Florida's demand for electricity, the Florida Division is allowed to
provide cash allowances to builders for natural gas piping and venting
upon the installation of water heaters, ranges, clothes dryers and heating
systems in new single family and multi-family dwellings. The programs also
allow the Florida Division to provide cash allowances to customers who
replace certain electric appliances with natural gas appliances. The
Florida Division is allowed to recover the expenses of the energy
conservation programs in its rates. Pursuant to the rate case concluded in
August 1991, the Company is allowed to include in rate base certain
additional costs for natural gas piping and venting under the Company's
house piping program.

The Florida Division's commercial customers consist primarily of
schools, businesses and public facilities, the number of which tends to
increase concurrently with the continuing growth in population within the
Florida Division's service areas.

The Florida Division's industrial customers and certain commercial
customers are served under tariffs applicable to "interruptible"
customers. The Company retains all of the operating margins generated on
sales to these customers as these volumes are included in the allocation
of the Florida Division's revenue requirements for ratemaking purposes.

One industrial customer has converted its Florida Division service
from a sales basis to a transportation basis and the Company has added a
customer that purchases transportation service. The Florida Division's

6 <PAGE>

transportation tariff provides margins on transportation services that are
substantially the same as margins earned on gas sales.

Gas Supply and Operations

In 1992, the FERC issued Order No. 636 that, among other things,
mandated the separation or "unbundling" of interstate pipeline sales,
transportation and storage services and established guidelines for
capacity management effective in 1993. The Company's principal pipeline
suppliers for its New Jersey Division have offered some open access
transportation services since the issuance of FERC Order No. 436 in 1985.
Accordingly, while the implementation of Order No. 636 involves the
restructuring of the Company's contracts with all of its pipeline
suppliers, the most significant restructuring pertains to certain
pipelines that together deliver less than one-third of the Company's total
firm gas supply. The transition to Order No. 636 has the effect of
increasing the opportunity for local gas distribution companies and
industrial customers to purchase natural gas from alternative sources,
while increasing the potential business and regulatory risk borne by a
local gas distribution company with respect to the acquisition and
management of natural gas services (see "-Business Plan").

The Company endeavors to utilize its pipeline capacity efficiently by
matching capacity to its load profile to the extent feasible. To this end,
the Company has had a broad unbundled service tariff in effect in New
Jersey since 1987. The Company continues to avail itself of opportunities
to improve the utilization of its pipeline capacity by pursuing broad
based customer growth, including off peak markets, and utilizing capacity
release provisions within Order 636 when operationally feasible.

Under Order No. 636 the pipeline companies are passing through to
their customers transition costs associated with mandated restructuring,
such as costs resulting from buying out unmarketable gas purchase
contracts. The transition costs charged to the Company have amounted to
approximately $1.4 million and are being recovered through the Company's
gas adjustment clauses. The total amount of such transition costs that
ultimately may be charged to the Company is not yet determinable.

The Company has long-term gas delivery contracts with seven
interstate pipeline companies. Under these contracts, the Company has a
right to delivery, on a firm year-round basis, of up to 74.2 million Mcf
of natural gas annually with a maximum of approximately 237,000 Mcf per
day. Both the price and conditions of service of these contracts are
regulated by the FERC.

In addition, the Company has six long-term gas purchase contracts for
the supply of natural gas for its system, including one with an interstate
pipeline company, three with gas marketers and two with independent
producers. Under these contracts, the Company has a right to purchase, on
a firm year-round basis, up to 43.1 million Mcf of natural gas annually
with a maximum of approximately 139,000 Mcf per day. In addition, the
Company has access to spot market gas through the interstate pipeline
system to supplement or replace, on a short-term basis, portions of its
long-term gas purchase contracts when such actions can reduce overall gas
costs or are necessary to supply interruptible customers.

7 <PAGE>

The Company's gas supply during fiscal 1993, came from the following
sources: approximately 27% from purchases under contracts with primary
pipeline suppliers and additional purchases under their filed tariffs;
approximately 73% from purchases from various producers and gas marketers,
purchases under long-term contracts with independent producers and owned
production; and less than 1% from propane and liquefied natural gas
("LNG"). The Company manages its gas supply portfolio so as to assure a
diverse, reliable and secure supply of natural gas at the lowest
reasonable cost. In fiscal 1993, the Company's largest single supplier
accounted for 18% of the Company's total gas purchases.

In order to have available sufficient quantities of gas during the
New Jersey heating season, the Company stores gas during non-peak periods
and purchases supplemental gas, including propane, LNG and gas available
under contracts with certain large cogeneration customers, as it deems
necessary. The storage contracts provide the Company with an aggregate of
12.0 million Mcf natural gas storage capacity and provide the Company with
the right to receive a maximum daily quantity of 150,400 Mcf. The
contracts with cogeneration customers provide 35,800 Mcf of daily gas
supply to meet peak loads by allowing the Company to take back capacity
and supply that otherwise is dedicated to serve those customers.

The Company's peak load facilities in New Jersey include a
propane-air plant with a daily production capacity of 27,400 Mcf, fixed
propane storage totaling 674,000 gallons and rail car sidings capable of
storing an additional 300,000 gallons. The Company has an LNG storage and
vaporization facility with a daily delivery capacity of 24,300 Mcf and
storage capacity of 131,000 Mcf.

The Company owns working interests in gas production from certain gas
wells in New York State. Gas reserves subject to recovery under an
existing rate order applicable to the New Jersey Division are
approximately 250,000 Mcf as of September 30, 1993.

The Company's maximum daily sendout in fiscal 1993 was approximately
329,500 Mcf for its New Jersey Division and approximately 39,700 Mcf for
its Florida Division. The Company maintains sufficient gas supply and
delivery capacity for a maximum daily sendout capacity for the New Jersey
Division of approximately 380,500 Mcf and the Florida Division of
approximately 53,200 Mcf.

Certain of the Company's long-term contracts for the supply, storage
and delivery of natural gas include fixed charges that amount to
approximately $64 million annually, of which approximately $43 million is
associated with pipeline delivery contracts. The Company currently
recovers, and expects to continue to recover, such fixed charges through
its gas adjustment clauses. The Company also is committed to purchase, at
market-related prices, minimum quantities of gas that, in the aggregate,
are approximately 7 million Mcf per year or to pay certain costs in the
event the minimum quantities are not taken. The Company expects that
minimum demand on its systems will continue to exceed these minimum
purchase obligations.

In accordance with a settlement approved by the NJBRC, the Company
recovers through rates charged by its New Jersey Division the costs
(exclusive of carrying costs) of surcharges from its pipeline suppliers
that relate to take-or-pay obligations that the suppliers had with natural

8 <PAGE>

gas producers. See "Commitments and Contingencies," Note 8 of the Notes to
the Company's Consolidated Financial Statements.

The Company distributes gas through approximately 2,600 miles of
steel, cast iron and plastic mains in New Jersey and approximately 2,350
miles of steel and plastic mains in Florida. The Company has physical
interconnections with four interstate pipelines in New Jersey and with the
sole interstate pipeline in Florida.

Regulation

Elizabethtown is subject to regulation with respect to, among other
matters, rates, service, accounting and the issuance of securities. The
New Jersey Division is regulated by the NJBRC. The Florida Division is
regulated by the FPSC. The Company is also subject to regulation by the
United States Department of Transportation under the Natural Gas Pipeline
Safety Act of 1968 with respect to the design, installation, testing,
construction and maintenance of pipeline facilities. Natural gas
purchases, transportation service and storage service provided to the
Company by interstate pipeline companies are subject to regulation by the
FERC. See "-Gas Supply and Operations."

The Company's current rates and tariffs for its New Jersey Division
reflect a rate case that was settled in October 1991, under which the
Company obtained a weather normalization clause and reduced its rates by
an amount equivalent to $500,000 in annual revenues. The weather
normalization clause, which is designed to help stabilize the Company's
results by increasing amounts charged to customers when weather has been
warmer than normal and by decreasing amounts charged when weather has been
colder than normal, was initially adopted on a two-year test basis and has
been extended through fiscal 1994. Revenue adjustments pursuant to the
weather normalization clause increased the Company's operating margins by
$1.3 million in fiscal 1993 and by $0.8 million in fiscal 1992. The New
Jersey rate case settlement reflected a rate base amounting to
approximately $184 million with an allowed overall return of 11.3%, which
would allow the Company the opportunity to earn a 12.4% return on New
Jersey Division utility equity. The Company had filed its application for
a rate change for its New Jersey Division, including the weather
normalization clause, in December 1990 and had requested an increase in
rates equivalent to $11.5 million in annual revenues. The Company reduced
its revenue requirements after the application was filed, reflecting cost
reductions, the expected effect on the cost of capital from a
tax-advantaged financing (see "Management's Discussion and Analysis of
Financial Condition and Results of Operations-Financing Activities and
Resources") and other factors.

The Company had previously increased its New Jersey Division's rates
in February 1990 by an amount equivalent to $3.5 million in annual
revenues, pursuant to a rate order issued by the NJBRC. The Company had
requested an increase in rates equivalent to $13 million in annual
revenues when it had filed its application to the NJBRC in December 1988
for a rate change.

In November 1993, the NJBRC issued guidelines which are designed to
provide for unbundling of natural gas transportation and sales services to
commercial and industrial customers. Under these guidelines the Company is
required to file new tariffs for its New Jersey Division by April 1, 1994.

9 <PAGE>

The Company expects the effect of the new tariffs to be neutral to the
operating revenues and margins of the Company.

The Company's current rates and tariffs for its Florida Division
reflect a rate case that was settled in August 1991, under which the
Company increased its rates by an amount equivalent to $3.5 million in
annual revenues. A portion of this increase, equivalent to $2.5 million
annually, was being billed on an interim basis since July 1990. The
Florida rate case settlement reflected a rate base amounting to
approximately $63 million with an allowed overall return of 9.47%, which
would allow the Company the opportunity to earn a 13.0% return on Florida
Division utility equity.

In response to an initiative by the FPSC, several Florida natural gas
utilities agreed in November 1993 to reduce the return allowed on their
utility equity to either 11% or 11.25%. The Company expects to agree to a
reduction in its allowed return on equity; however, it expects the allowed
return, as adjusted, to exceed the return it is actually achieving.
Therefore, the Company expects that the adjustment will not affect
operating revenues and margins.

The Company's rates for its utility operations are based on
recovering the cost of service for those operations, which, among other
factors, provides for a return on utility equity. When the Company applies
for rate adjustments, it estimates its cost of service based on certain
historical costs and pro forma adjustments for known and measurable
changes. As the rate case progresses, the estimates may change as more
information becomes available. Accordingly, the rates that are determined
upon the conclusion of the rate case generally will be different than
those reflected in the application.

The Company's tariffs contain adjustment clauses that enable the
Company to recover purchased gas costs. The adjustment clauses provide for
periodic reconciliation of recoverable gas costs with applicable amounts
billed. Under or over recovery at the reconciliation date is recovered
from or refunded to customers in subsequent periods. See "-Gas Supply and
Operations."

Capital Expenditures

Capital expenditures, which consist primarily of expenditures to
expand and upgrade the Company's gas distribution systems, were
$39.6 million in fiscal 1993, $31.3 million in fiscal 1992 and
$24.8 million in fiscal 1991. Approximately $58.6 million of these capital
expenditures were for construction relating to new customers and
additional distribution, storage and other gas plant facilities. The
Company's capital expenditures are expected to be approximately $48.0
million in fiscal 1994, including approximately $30.7 million for system
expansion. In addition, the net present value of minimum lease payments
relating to noncancelable operating leases, which relate principally to
New Jersey Division office space, is approximately $23.0 million as of
September 30, 1993, including $3.0 million payable in fiscal 1994.

Seasonal Aspects

Sales of gas to some classes of customers are affected by variations
in demand due to changes in weather conditions, including normal seasonal

10 <PAGE>

variations throughout the year. The demand for gas for heating purposes is
closely related to the severity of the winter heating season. Seasonal
variations affect short-term cash requirements.

Persons Employed

As of September 30, 1993, the Company employed 1,011 persons. As of
September 30, 1993, the Utility Workers Union of America (Local 424)
represented 299 employees of the New Jersey Division. The current labor
contract with Local 424 expires on November 20, 1994. It was approved by
the bargaining unit in December 1990 following a 24-day work stoppage
which began upon the expiration of the previous contract. As of September
30, 1993, the Teamsters Union represented 118 employees of the Florida
Division under a contract which expires March 31, 1997.

In July 1990, the Company offered eligible employees a one-time
opportunity to elect early retirement with special incentives. Twenty-five
New Jersey Division employees retired in January 1991 pursuant to the
plan.

Competition

The Company competes with distributors of other fuels and forms of
energy, including electricity, fuel oil and propane, in all portions of
the territories served. Electricity and oil are the primary competition to
natural gas in the residential and commercial markets where the primary
uses of energy are for space heating, water heating, cooking and clothes
drying. In recent years, natural gas has enjoyed a competitive price
advantage over electricity and oil for such purposes, which continues to
allow the Company to obtain a significant share of the residential and
commercial sectors of the new construction market. The number of
residential, commercial and industrial conversions has accelerated
recently due to concerns and legislation regarding underground oil storage
tanks. See "-Territory and Customers Served."

In addition, open access to the interstate pipeline transmission
systems (see "-Business Plan") allows certain industrial customers to
purchase gas from alternative sources for transportation through the
Company's distribution systems and may allow certain industrial customers
to bypass the Company's systems altogether by connecting directly to a gas
pipeline. The Company seeks to remain competitive in the industrial
markets through flexible tariffs.

Franchises

The Company holds non-exclusive municipal franchises and other
consents which enable it to provide natural gas in the territories it
serves. The Company intends to renew these franchises and consents as they
expire.

Environment

The Company is subject to federal and state legislation with respect
to water, air quality, solid waste disposal and employee health and safety
matters and to environmental regulations issued by the United States
Environmental Protection Agency (the "EPA"), the New Jersey Department of

11 <PAGE>

Environmental Protection and Energy (the "NJDEPE"), and other federal and
state agencies.

The Company owns, or previously owned, certain properties on which
gas was manufactured by the New Jersey Division or by other parties in the
past. Coal tar residues are present on six of these sites and the Company
has reported their presence to the EPA, the NJDEPE and the NJBRC. In April
1991, the NJDEPE issued an Administrative Consent Order that establishes
the procedures to be followed by the Company in the development of its
remediation plan for the site on South Street in Elizabeth, New Jersey.
Subsequently, the Company and the NJDEPE entered into Memoranda of
Agreement that establish procedures for the development of investigation
and remediation plans for the other five sites.

The Company expects it will expend in the next twenty years
approximately $25 million, net of approximately $6 million that the
Company estimates will be borne by the prior owner and operator of certain
of the sites, to complete investigation of such sites and the remediation
of the coal tar contamination. The Company, with the assistance of an
outside consulting firm, determined the estimated expenditure by assessing
the cost of (1) obtaining additional required data about each site and (2)
the applicable remedial action, among those currently known, that is most
appropriate for each site. The ultimate costs will depend upon the
investigation and remediation plans that finally are adopted by the
Company, subject to the approval of the NJDEPE, and may be less or greater
than the Company's current estimate. The Company has an accrual of
approximately $25 million for investigation and remediation of the sites
and the related costs have been deferred on its Consolidated Balance
Sheet.

The Company believes that its remediation costs will be recoverable
in rates and that a portion of such costs may be recoverable from the
Company's insurance carriers. The current base rate order for the New
Jersey Division permits the Company to utilize full deferred accounting
for coal tar related expenditures, which amounted to approximately $0.8
million in fiscal 1993 and $0.6 million in fiscal 1992. The current base
rate order provides for the recovery through rates at $130,000 annually of
coal tar related expenditures incurred prior to the rate order. Other New
Jersey utilities also have received authorization to recover similar
environmental expenditures in rates.

Item 2. Properties

The Company owns approximately 2,600 miles of steel, cast iron and
plastic gas mains in New Jersey, together with city gate stations, gas
holders and peak shaving plants, including an LNG storage facility in
Elizabeth, New Jersey. In addition, the Company owns approximately 2,350
miles of steel and plastic mains in Florida, as well as gate stations,
meters and related equipment. The assets of the Florida Division are
subject to the lien of a mortgage securing $11.6 million of indebtedness.

The Company also owns real property in Union, Middlesex, Warren,
Sussex and Hunterdon Counties in New Jersey and in Dade, Broward, Brevard
and St. Lucie Counties in Florida, portions of which are under lease to
others. The Company's owned properties include a general office building
in Hialeah, Florida, that serves as the Florida Division's headquarters;
another office facility in Rockledge, Florida, and various service centers

12 <PAGE>

in New Jersey and in Florida from which the Company dispatches service
crews and conducts construction and maintenance activities. In addition,
the Company owns working interests in certain gas production in New York
State and holds minor working interests in gas properties in Louisiana.

Elizabethtown leases approximately 160,000 square feet in an office
building in Union, New Jersey, which serves as the New Jersey Division's
headquarters. The building is owned and operated by the Liberty Hall Joint
Venture. Participants in the joint venture are Cali Liberty Hall
Associates, a New Jersey general partnership, and a Kean family trust, of
which John Kean and Stewart Kean are trustees. John Kean and Stewart Kean
beneficially own more than 5% of the outstanding shares of NUI Common
Stock. All negotiations relative to the lease were conducted between
Elizabethtown and Cali Liberty Hall Associates. No person involved with
the Kean family trust participated in such discussions. The lease
agreement is for an initial term through 2009 with two consecutive
five-year renewal options. Elizabethtown also has the right of first
refusal to purchase the building in the event the owner seeks to sell the
property. The annual base rent is approximately $2.6 million in 1994,
$2.9 million from 1995 through 1999, $3.3 million from 2000 through 2004
and $3.7 million from 2005 through 2009.

Subject to minor exceptions and encumbrances, all other units of
property materially important to the Company and all principal plants are
owned in fee, except that most of the mains and pipes are installed in
public streets under franchise or statutory rights or are constructed on
rights of way acquired from the apparent owner of the fee.

Item 3. Legal Proceedings

The Company is involved in various claims and litigation incidental
to its business. In the opinion of management, none of these claims and
litigation will have a material adverse effect on the Company's results of
operations or its financial condition.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters

All Elizabethtown's equity securities are owned directly by NUI
which is a reporting company under the Securities exchange act of 1934.
NUI has filed all the material required to be filed pursuant to Section
13, 14 or 15(d) thereof.

13 <PAGE>

Item 6. Selected Financial Data
<TABLE>
Summary Consolidated Financial Data
(in thousands)
<CAPTION>

Fiscal Years Ended September 30,
1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Operating Revenues $265,449 $295,950 $291,320 $291,032 $354,889
Operating Income 21,453 23,384 20,914 27,227 27,807
Interest Expense 10,915 12,144 11,516 12,437 12,856

Income Before the Cumulative
Effect of an Accounting Change $11,372 $12,492 $9,147 $16,477 $15,973
Cumulative Effect of a Change in
Accounting to Accrue Unbilled Revenues 1,193
------ ------ ------ ------ ------
Net Income $12,565 $12,492 $9,147 $16,477 $15,973
====== ====== ====== ====== ======

Total Assets at September 30 $365,784 $378,866 $402,959 $468,912 $489,250

Funds for Construction Held by Trustee at
September 30 $34,123 $24,184

Capitalization at September 30:
Current Portion of Long-Term Debt and
Capital Lease Obligations $3,094 $2,943 $4,148 $5,050 $3,882
Notes Payable to Banks 30,500 24,000 6,800 32,750 63,200
Capital Lease Obligations 17,116 16,369 14,871 13,422 12,290
Long-Term Debt 78,628 77,048 86,189 114,046 112,090
Common Shareholder's Equity 117,487 136,964 143,616 151,166 166,559

<FN>
Note to the Summary Consolidated Financial Data:
Net income for fiscal 1991 includes a provision to write down certain properties amounting to $1.5
million (after tax).

</TABLE>

14 <PAGE>

<TABLE>
Summary Consolidated Operating Data
<CAPTION>
Fiscal Years Ended September 30,
1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
Operating Revenues (Dollars in thousands)
Firm Customers:
Residential $136,019 $150,607 $143,763 $145,149 $170,150
Commercial 68,750 78,224 76,341 76,685 93,633
Industrial 18,275 25,848 24,914 21,928 23,066
Interruptible Customers 34,829 31,650 35,083 31,888 48,838
Transportation 5,832 6,661 7,792 10,410 12,154
Appliance Leasing, Fees and Other 1,745 2,960 3,427 4,972 7,048
------ ------ ------ ------ ------
Total $265,450 $295,950 $291,320 $291,032 $354,889
====== ====== ====== ====== ======

Gas Sold or Transported (MMcf)
Firm Customers:
Residential 19,386 19,598 18,133 20,251 21,019
Commercial 12,486 13,034 12,599 14,006 14,918
Industrial 3,802 5,459 5,427 5,052 4,781
Interruptible Customers 11,152 10,419 12,624 11,142 14,531
Transportation 8,718 10,096 11,778 14,816 16,439
------ ------ ------ ------ ------
Total 55,544 58,606 60,561 65,267 71,688
====== ====== ====== ====== ======

Customers Served (Twelve month averages)
Firm Customers:
Residential 278,168 282,191 291,571 295,449 297,682
Commercial 18,623 19,753 20,292 20,670 21,016
Industrial 434 439 427 402 377
Interruptible and Transportation 154 151 161 173 192
------ ------ ------ ------ ------
Total 297,379 302,534 312,451 316,694 319,267
====== ====== ====== ====== ======

Degree Days
New Jersey (normal: 4,978) 4,841 4,736 4,219 4,880 4,703
Florida (normal: 377) 213 261 150 241 203
Employees 978 976 965 979 1,011
</TABLE>

15 <PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

The following discussion and analysis should be read in conjunction
with "Summary Consolidated Financial Data," "Summary Consolidated
Operating Data" and the Company's Consolidated Financial Statements,
including the notes thereto.

Overview

Net income for fiscal 1993 was $16.0 million, as compared with net
income of $16.5 million for fiscal 1992 and $9.1 million for fiscal 1991.
The decrease in net income in fiscal 1993 as compared with fiscal 1992
reflects the realization of certain investment gains in fiscal 1992 and
higher interest expense in fiscal 1993, partly offset by higher volumes of
gas sold or transported as a result of adding residential and commercial
customers and increased demand by industrial customers. The increase in
net income in fiscal 1992 as compared with fiscal 1991 reflects higher
volumes of gas sold or transported as a result of adding residential and
commercial customers, increased demand by industrial customers, increased
heating demand as a result of cooler weather, margin effects from the
implementation of higher rates in Florida and a weather normalization
clause in New Jersey, and the realization of certain investment gains;
partly offset by higher interest expense.

Results of Operations

Operating Revenues and Operating Margin. The following summarizes the
Company's revenues and operating margins for the past three fiscal years
(in thousands):

1991 1992 1993
Operating Revenues $291,320 $291,032 $354,889
Purchased Gas and Fuel (151,928) (139,309) (195,842)
Gross Receipts and Franchise
Taxes (28,875) (30,297) (30,472)
------ ------ ------
Operating Margins $110,517 $121,426 $128,575
====== ====== ======

The Company's operating revenues increased by $63.9 million, or 22%,
for fiscal 1993 as compared with fiscal 1992 and decreased by
$0.3 million, or 0.1%, for fiscal 1992 as compared with fiscal 1991. This
increase for fiscal 1993 as compared with fiscal 1992 principally reflects
additional residential and commercial customers served and higher volumes
sold or transported to industrial customers, as well as the effect of
increased gas costs, partly offset by the effects of weather that was 2%
warmer during the heating season (as measured in degree days). The effects
on operating revenues for fiscal 1992 as compared with fiscal 1991 from
adding residential and commercial customers and from a heating season that
was 16% cooler were offset by the effects of shifts by industrial
customers from sales service to transportation service and by lower gas
costs. Gas cost adjustment clauses in both New Jersey and Florida enable
the Company to pass through to customers, through periodic adjustments to
the amounts billed, increased or decreased costs incurred by the Company
for purchased gas, without affecting operating margins. Adjustments
related to changes in gas costs had the net effect of increasing operating

16 <PAGE>

revenues by $12.4 million in fiscal 1993 and $4.4 million in fiscal 1991
and reducing operating revenues by $16.0 million in fiscal 1992, with
offsetting adjustments to purchased gas and fuel costs and to gross
receipts and franchise taxes. Margin rates applicable to industrial
transportation service are substantially the same as margin rates
applicable to sales services for such customers.

The Company's total operating margins in fiscal 1993 increased by
$7.1 million, or 5.9%, as compared with fiscal 1992. The total number of
customers served increased by 2,572 or 0.8%, as compared with fiscal 1992.
In New Jersey, the number of heating customers served increased by 4,715,
or 3.0%, as compared with fiscal 1992, including the effects of converting
existing water heating and cooking service customers into gas-heating
customers. The Company estimates that operating margins were lower by
$0.5 million in fiscal 1993 because of losses suffered by its customers in
August 1992 as a result of Hurricane Andrew, as approximately 2,000 of the
customers previously served have not rebuilt, and may not rebuild, homes
that were damaged in the storm.

The Company's total operating margins in fiscal 1992 increased by
$10.9 million, or 9.9%, as compared with fiscal 1991. The total number of
customers served increased by 4,243 or 1.4%, as compared with fiscal 1991,
and the number of heating customers served in New Jersey increased by
4,829, or 3.1%, as compared with fiscal 1991, including the effects of
converting existing water heating and cooking service customers into
gas-heating customers.

Operating margins from industrial customers amounted to $13.6 million
in fiscal 1993, $12.9 million in fiscal 1992 and $11.5 million in fiscal
1991. The year-to-year increases principally reflect the inception of
service in fiscal 1992 for a cogeneration facility in New Jersey and an
industrial facility in Florida.

Operating Income. The following summarizes elements of the Company's
operating income for the past three fiscal years (in thousands):

1991 1992 1993
Operating Margins $110,517 $121,426 $128,575
Operation and Maintenance Expenses (65,975) (66,910) (71,885)
Depreciation and Amortization (12,962) (14,273) (15,082)
Payroll and Other Taxes (5,152) (4,978) (5,258)
------ ------ ------
Operating Income Before Income
Taxes 26,428 35,265 36,350

Income Taxes (5,514) (8,038) (8,543)
------ ------ ------
Operating Income $20,914 $27,227 $27,807
====== ====== ======

The Company's operating income before income taxes increased by $1.1
million in fiscal 1993 as compared with fiscal 1992, principally
reflecting the improvement in operating margins, partially offset by
increased operation and maintenance expenses. In fiscal 1992, operating
income before income taxes increased by $8.8 million as compared with
fiscal 1991, principally reflecting the improvement in operating margins

17 <PAGE>

and the absence of certain non-recurring charges incurred in fiscal 1991
in connection with a work stoppage at the New Jersey Division ($0.6
million) and a write down of certain house piping costs at the Florida
Division ($0.8 million). The work stoppage, which began upon the
expiration of an existing labor contract, was resolved when agreement was
reached with respect to the current four-year contract at the New Jersey
Division commencing as of November 21, 1990. Operation and maintenance
expenses increased by 7.5% in fiscal 1993 as compared with fiscal 1992
and, excluding the non-recurring charges incurred in fiscal 1991, by 4.0%
in fiscal 1992 as compared with fiscal 1991, principally reflecting system
growth and, in fiscal 1993, management services previously borne by NUI.

Other Income and Expense. Other income, net, for fiscal 1992 included
realized net pretax gains on the sale of marketable securities amounting
to $0.8 million. The write down of properties in fiscal 1991 relates to
certain reserves of natural gas that are recoverable based upon market
prices that had declined significantly.

Interest Expense. Interest expense increased in fiscal 1992 and 1993
reflecting higher outstanding borrowings, partly offset by lower
prevailing interest rates.

Regulatory Matters

The Company's current rates and tariffs reflect rate cases concluded
in both New Jersey and Florida in 1991. In the New Jersey case, which was
settled in October 1991, the Company obtained a weather normalization
clause and reduced its rates by an amount equivalent to $500,000 in annual
revenues. The weather normalization clause, which is designed to help
stabilize the Company's results by increasing amounts charged to customers
when weather has been warmer than normal and by decreasing amounts charged
when weather has been colder than normal, was initially adopted on a
two-year test basis and has been extended through fiscal 1994. Revenue
adjustments pursuant to the weather normalization clause increased the
Company's operating margins by $1.3 million in fiscal 1993 and by $0.8
million in fiscal 1992. The New Jersey rate case settlement reflected a
rate base amounting to approximately $184 million with an allowed overall
return of 11.3%, which would allow the Company the opportunity to earn a
12.4% return on New Jersey Division utility equity. In the Florida case,
which was settled in August 1991, the Company increased its rates by an
amount equivalent to $3.5 million in annual revenues. A portion of this
increase, equivalent to $2.5 million annually, was being billed on an
interim basis since July 1990. The Florida rate case settlement reflected
a rate base amounting to approximately $63 million with an allowed overall
return of 9.47%, which would allow the Company the opportunity to earn a
13.0% return on Florida Division utility equity.

18 <PAGE>

reduction in its allowed return on equity; however, it expects the allowed
return, as adjusted, to exceed the return it is actually achieving.
Therefore, the Company expects that the adjustment will not affect
operating revenues and margins.

Financing Activities and Resources

Financing Resources. The Company generally funds its operations with
internally generated cash, supplemented with borrowings under its bank
lines of credit to satisfy seasonal requirements. The Company also borrows
under its bank lines of credit to finance portions of its construction
expenditures, pending refinancing through the issuance of equity or
long-term indebtedness at a later date depending upon prevailing market
conditions. The Company seeks to assure access to funds for system growth
and integrity through timely issuances of additional equity capital by NUI
or long-term debt at the lowest reasonable costs that provide fair returns
to investors.

Internally Generated Funds. Net cash provided by operating activities
before changes in working capital was $44.2 million in fiscal 1993,
$38.0 million in fiscal 1992 and $32.6 million in fiscal 1991. Working
capital increased $42.1 million in fiscal 1993 and $23.1 million in fiscal
1992, and decreased $8.0 million in fiscal 1991. The increases in net
working capital in fiscal 1993 and fiscal 1992 principally reflect
increased year end purchases of fuel supplies for the coming heating
season and accelerated payments of gross receipts and franchise taxes
under New Jersey law (see "-Capital Expenditures and Commitments"). This
was partially offset by the realization of deferred taxes that had been
established previously in connection with accruals of gross receipts and
franchise taxes. The decrease in net working capital in fiscal 1991
principally reflects lower fuel supplies acquired for inventory, partially
offset by the effect of funding a litigation settlement. The level of fuel
supplies at year end purchased in advance of peak heating season demand is
dependent upon market conditions and system operating requirements.

Long-Term Debt and Funds for Construction Held by Trustee. In October
1991, pursuant to agreements with the New Jersey Economic Development
Authority, the Company issued gas facilities revenue bonds that mature in
October 2021 in the amount of $46.2 million at 6.75% and $8.4 million at
6.625% to finance expenditures through fiscal 1995 for the construction of
certain gas facilities and related equipment in New Jersey, including
approximately $11.4 million expended prior to incurring this long-term
debt. The unexpended portion of the net proceeds from these borrowings was
$24.2 million at September 30, 1993, and is classified on the Company's
consolidated balance sheet as funds for construction held by trustee until
drawn upon incurring eligible expenditures.

In fiscal 1992, in accordance with the optional prepayment provisions
of the underlying indenture agreements, the Company borrowed under its
bank lines of credit to repay $6.6 million of 6.5% sinking fund debentures
and $6.1 million of 9.5% sinking fund debentures in advance of their
scheduled maturities.

Short-Term Debt. The weighted average daily amounts outstanding of
notes payable to banks and the weighted average interest rates on those
amounts were $32.2 million at 3.6% in fiscal 1993, $13.0 million at 5.0%
in fiscal 1992 and $16.0 million at 7.9% in fiscal 1991. At September 30,

19 <PAGE>

1993, the Company had outstanding notes payable to banks amounting to
$63.2 million and available unused lines of credit amounting to
$63.7 million.

Common Stock and Dividends. NUI is Elizabethtown's sole shareholder.
NUI contributed additional equity capital amounting to $10.0 million in
fiscal 1993 and $6.5 million in fiscal 1991. Elizabethtown paid dividends
to NUI amounting to $10.7 million in fiscal 1993 and $9.2 million in
fiscal 1992 and 1991.

Capital Expenditures and Commitments

As discussed in "-Commitments and Contingencies," Note 8 of the Notes
to the Company's Consolidated Financial Statements, the Company expects it
will expend in the next twenty years approximately $25 million to complete
investigation and remediation of the contamination on New Jersey
properties which the Company owns or previously owned on which gas was
manufactured in the past. The ultimate costs will depend upon the
investigation and remediation plans that finally are adopted by the
Company, subject to the approval of the NJDEPE, and may be less or greater
than the Company's current estimate. The Company believes the remediation
costs will be recoverable in rates and that a portion of such costs may be
recoverable from the Company's insurance carriers.

In June 1991, legislation was enacted in New Jersey that accelerates
the payments of approximately $30 million of gross receipts and franchise
taxes by an average of almost one and a half years in stages from 1992
through 1994. The Company expects that future base rate orders will
reflect the recovery of prospective costs associated with the related
additional financing requirements.

20 <PAGE>

The implementation of FERC Order No. 636 required the restructuring
of the Company's contracts with certain pipeline companies that together
supply less than one-third of the Company's total firm gas supply. Under
Order No. 636 the pipeline companies are passing through to their
customers transition costs associated with mandated restructuring, such as
costs resulting from buying out unmarketable gas purchase contracts. The
transition costs charged to the Company have amounted to approximately
$1.4 million and are being recovered through the Company's gas adjustment
clauses.

As of September 30, 1993, the scheduled repayments of the Company's
long-term debt over the next five years were as follows: $1.9 million in
fiscal 1994, $1.1 million in fiscal 1995, $1.1 million in fiscal 1996,
$3.2 million in fiscal 1997 and $1.0 million in fiscal 1998. The gas
facilities revenue bonds that are due in 2014 and the remaining balance of
first mortgage bonds become eligible in fiscal 1994 for optional
prepayment amounting to $1.3 million in excess of their $57.3 million face
value.

The Company's future capital expenditures and commitments will likely
require additional debt and equity financing.

Pending Acquisition

On July 27, 1993, NUI and PSGS entered into an Agreement and Plan of
Merger, pursuant to which PSGS would be merged with and into NUI (the
"PSGS Merger"). Under the Agreement and Plan of Merger, NUI will acquire
all of the outstanding common shares of PSGS for approximately $17
million, payable in shares of NUI Common Stock equivalent to $71.50 per
PSGS share, except that each shareholder will receive no less than 2.4 and
no more than 3.0 shares of NUI Common Stock for each PSGS share held. The
exchange value of the NUI Common Stock will be established immediately
prior to the merger. The PSGS Merger will be consummated upon receipt of
all required regulatory approvals, the approval of the stockholders of
PSGS, and the satisfaction or waiver of certain other consents and
conditions. Upon the effectiveness of the PSGS Merger, NUI would assume
all of the rights and obligations of PSGS. Following the PSGS Merger,
Elizabethtown will be merged with and into NUI (the "Elizabethtown
Merger").

The PSGS Merger will be accounted for as a purchase of PSGS by NUI in
accordance with generally accepted accounting principles. Accordingly, due
to the effects of the regulatory process, the underlying net assets of
PSGS will become the assets of NUI at, generally, their historical net
book value and the excess of the purchase price over the historical net
book value of the underlying net assets of PSGS, which amounts to
approximately $6.8 million, will be added to utility plant as a "utility
plant acquisition adjustment," which will be amortized over a thirty-year
period that approximates the remaining useful life of the utility plant
acquired.

Under its business plan, the Company concentrates on customer growth
and the profitability of the gas distribution business. The PSGS Merger,
which will result in a seven percent increase in the number of customers
served, and the Elizabethtown Merger, through which NUI will become an
operating utility company with three divisions providing gas service in
six states, fit within the business plan. Further growth opportunities,

21 <PAGE>

which could include the acquisition of additional gas distribution
companies, the development of new franchises and the management of certain
service requirements of other utilities on a contract basis, will likely
require additional debt and equity financing.

Effects of Inflation

The Company's tariffs provide gas cost adjustment clauses through
which rates charged to customers are adjusted for changes in the cost of
gas on a reasonably current basis. Increases in other utility costs and
expenses not otherwise offset by increases in revenue could have an
adverse effect on earnings due to the time lag associated with the
regulatory process and the relative uncertainty of whether the regulatory
process will allow full recovery of such costs. The ratemaking process
limits the recovery of utility plant costs to original cost and net cost
of removal on the basis of approved depreciation rates. Replacement of
long-lived utility plant assets is made at significantly higher current
costs that should be recoverable through rates in future periods as such
assets are depreciated.

Item 8. Financial Statements and Supplementary Data

Consolidated financial statements of the Company at September 30,
1993 and 1992 and for each of the fiscal years in the three year period
ended September 30, 1993 and the auditors' report thereon, and unaudited
quarterly financial data for the two-year period ended September 30, 1993
are included herewith as indicated on the "Index to Financial Statements
and Schedules" on page F-1.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

PART III

Item 10. Directors and Executive Officers of the Registrant

Not required.

Item 11. Executive Compensation

Not required.

Item 12. Security Ownership of Certain Beneficial Owners and Management

Not required.

Item 13. Certain Relationships and Related Transactions

Not required.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

22 <PAGE>

(a) (1) Consolidated financial statements of the Company at September 30,
1993 and 1992 and for each of the fiscal years in the three-year period
ended September 30, 1993 and the auditors' report thereon are included
herewith as indicated on the "Index to Financial Statements and Schedules"
on page F-1.

(2) The applicable financial statement schedules for the fiscal years
1993, 1992 and 1991 are included herewith as indicated on the "Index to
Financial Statements and Schedules" on page F-1.

(3) Exhibits:
Exhibit
No. Description Reference
------- ----------- ---------

3(i) Certificate of Incorporation of Incorporated by reference
Elizabethtown, dated March 6, to Exhibit 3(i) to
1966, as amended through December Elizabethtown's Form 10-K
23, 1992 Report for Fiscal 1992

3(ii) By-Laws of Registrant, as adopted Incorporated by reference
September 30, 1980, as amended to Exhibit 3(ii) to
through May 4, 1990 Elizabethtown's Form 10-K
Report for Fiscal 1990
10(i) Service Agreement by and between Incorporated by reference
Transcontinental Gas Pipe Line to Exhibit 10-1 to NUI
Corporation and Elizabethtown, Registration Statement
dated February 1, 1992 No. 33-50561

10(ii) Service Agreement under Rate Incorporated by reference
Schedule GSS by and between to Exhibit 10-2 to NUI
Transcontinental Gas Pipe Line Registration Statement
Corporation and Elizabethtown, No. 33-50561
dated May 3, 1972
10(iii) Service Agreement under Rate Incorporated by reference
Schedule LG-A by and between to Exhibit 10-3 to NUI
Transcontinental Gas Pipe Line Registration Statement
Corporation and Elizabethtown, No. 33-50561
dated January 12, 1971

10(iv) Service Agreement by and between Incorporated by reference
Transcontinental Gas Pipe Line to Exhibit 10-4 to NUI
Corporation and Elizabethtown, Registration Statement
dated November 1, 1991 No. 33-50561

10(v) Firm Gas Transportation Agreement Incorporated by reference
for Storage Gas by and among to Exhibit 10-5 to NUI
Transcontinental Gas Pipe Line Registration Statement
Corporation, Elizabethtown and No. 33-50561
Penn-York Energy Corporation,
dated November 1, 1984
10(vi) Firm Gas Transportation Agreement Incorporated by reference
by and among Transcontinental Gas to Exhibit 10-6 to NUI
Pipe Line Corporation, Registration Statement
Elizabethtown and National Fuel No. 33-50561
Gas Supply Corporation, dated
November 1, 1984

23 <PAGE>

Exhibit
No. Description Reference
------- ----------- ---------

10(vii) Gas Transportation Agreement by Incorporated by reference
and among Transcontinental Gas to Exhibit 10-7 to NUI
Pipe Line Corporation and Registration Statement
Elizabethtown, dated February 4, No. 33-50561
1991

10(viii) Service Agreement for Rate
Schedule CDS by and between Texas Incorporated by reference
Eastern Transmission Corporation to Exhibit 10-8 to NUI
and Elizabethtown, dated June 1, Registration Statement
1993 No. 33-50561
10(ix) Service Agreement under Rate
Schedule SS-2 by and between Texas Incorporated by reference
Eastern Transmission Corporation to Exhibit 10-9 to NUI
and Elizabethtown, dated April 12, Registration Statement
1990 No. 33-50561

10(x) Service Agreement for Rate
Schedule FTS-5 by and between Incorporated by reference
Texas Eastern Transmission to Exhibit 10-10 to NUI
Corporation and Elizabethtown, Registration Statement
dated June 1, 1993 No. 33-50561
10(xi) Service Agreement under Rate
Schedule SS-3 by and between Texas Incorporated by reference
Eastern Transmission Corporation to Exhibit 10-11 to NUI
and Elizabethtown, dated April 12, Registration Statement
1990 No. 33-50561

10(xii) Service Agreement for Rate
Schedule FTS-5 by and between Incorporated by reference
Texas Eastern Transmission to Exhibit 10-12 to NUI
Corporation and Elizabethtown, Registration Statement
dated June 1, 1993 No. 33-50561

10(xiii) Service Agreement for Rate
Schedule FTS-2 by and between Incorporated by reference
Texas Eastern Transmission to Exhibit 10-13 to NUI
Corporation and Elizabethtown, Registration Statement
dated June 1, 1993 No. 33-50561
10(xiv) Service Agreement under NTS Rate Incorporated by reference
Schedule by and between Columbia to Exhibit 10(xiv) to
Gas Transmission Corporation and NUI's Form 10-K Report
Elizabethtown, dated November 1, for Fiscal 1993
1993

10(xv) Service Agreement under SST Rate Incorporated by reference
Schedule by and between Columbia to Exhibit 10(xv) to
Gas Transmission Corporation and NUI's Form 10-K Report
Elizabethtown, dated November 1, for Fiscal 1993
1993

24 <PAGE>

Exhibit
No. Description Reference
------- ----------- ---------

10(xvi) Service Agreement under FTS Rate Incorporated by reference
Schedule by and between Columbia to Exhibit 10(xvi) to
Gas Transmission Corporation and NUI's Form 10-K Report
Elizabethtown, dated November 1, for Fiscal 1993
1993

10(xvii) Gas Transportation Agreement under Incorporated by reference
FT-G Rate Schedule by and between to Exhibit 10(xvii) to
Tennessee Gas Pipeline Company and NUI's Form 10-K Report
Elizabethtown (Contract #597), for Fiscal 1993
dated September 1, 1993
10(xviii) Gas Transportation Agreement under Incorporated by reference
FT-G Rate Schedule by and between to Exhibit 10(xviii) to
Tennessee Gas Pipeline Company and NUI's Form 10-K Report
Elizabethtown (Contract #603), for Fiscal 1993
dated September 1, 1993

10(xix) Gas Transportation Agreement by Incorporated by reference
and between Tennessee Gas Pipeline to Exhibit 10-17 to NUI
Company and Elizabethtown, dated Registration Statement
March 30, 1993 No. 33-50561
10(xx) Firm Transportation Service Incorporated by reference
Agreement under FTS-1 Rate to Exhibit 10(xx) to
Schedule by and between City Gas NUI's Form 10-K Report
and Florida Gas Transmission dated for Fiscal 1993
October 1, 1993

10(xxi) Lease Agreement between Incorporated by reference
Elizabethtown and Liberty Hall to Exhibit 10(vi) of
Joint Venture, dated August 17, Elizabethtown's Form 10-K
1987 Report for Fiscal 1987

10(xxii) Form of Termination of Employment Incorporated by reference
and Change in Control Agreements to Exhibit 10(xi) of
NUI's Form 10-K Report
for Fiscal 1991
21 Subsidiaries of Elizabethtown Gas Filed herewith
Company

Exhibits listed above which have heretofore been filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933
or the Securities Exchange Act of 1934, and which were designated as noted
above and have not been amended, are hereby incorporated by reference and
made a part hereof with the same effect as if filed herewith.

Elizabethtown is a party to various agreements with respect to
long-term indebtedness to which the total amount of indebtedness
authorized under each agreement, respectively, does not exceed 10% of the
total assets of the Company on a consolidated basis. The Company hereby
agrees to furnish to the Securities and Exchange Commission copies of such
agreements upon request.

(b) Reports on Form 8-K:

25 <PAGE>

No reports were filed on Form 8-K during the quarter ended September
30, 1993.

26 <PAGE>

INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

Consolidated Financial Statements of Elizabethtown Gas Company and
Subsidiaries:

Report of Independent Public Accountants . . . . . F-2

Consolidated Financial Statements as of
September 30, 1993 and 1992 and for Each
of the Fiscal Years in the Three-Year Period
Ended September 30, 1993 . . . . . . . . . . . . . F-3

Financial Statement Schedules of Elizabethtown Gas Company and
Subsidiaries:

Report of Independent Public Accountants . . . . . F-2

Schedule V Property, Plant and Equipment
for Each of the Fiscal Years in the Three-Year
Period Ended September 30, 1993 . . . . . . . . . F-17

Schedule VI Accumulated Depreciation and
Amortization of Property, Plant and Equipment
for Each of the Fiscal Years in the Three-Year
Period Ended September 30, 1993 . . . . . . . . . F-18

Schedule VIII Valuation and Qualifying Accounts
for Each of the Fiscal Years in the Three-Year
Period Ended September 30, 1993 . . . . . . . . . F-19

Schedule IX Short-Term Borrowings
for Each of the Fiscal Years in the Three-Year
Period Ended September 30, 1993 . . . . . . . . . F-21

All other schedules are omitted because they are not required,
are inapplicable or the information is otherwise shown in the financial
statements or notes thereto.

Separate financial statements for Elizabethtown Gas Company are
omitted because no material restrictions exist in the flow of funds from
subsidiaries to the Elizabethtown Gas Company through intercompany loans,
advances and cash dividends.

F-1 <PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Elizabethtown Gas Company:

We have audited the accompanying consolidated balance sheets and
statements of consolidated capitalization of Elizabethtown Gas Company (a
New Jersey corporation) and subsidiaries as of September 30, 1993 and
1992, and the related statements of consolidated income, cash flows, taxes
and shareholder's equity, for each of the three years in the period ended
September 30, 1993. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Elizabethtown Gas Company and subsidiaries as of September 30, 1993 and
1992, and the results of their operations and their cash flows for each of
the three years in the period ended September 30, 1993, in conformity with
generally accepted accounting principles.

We have also audited, in accordance with generally accepted auditing
standards, the consolidated balance sheets and statements of consolidated
capitalization as of September 30, 1991, 1990 and 1989, and the related
consolidated statements of income, cash flows, taxes and shareholder's
equity, for each of the two years in the period ended September 30, 1990
(none of which are presented herein), and have expressed an unqualified
opinion on those financial statements. In our opinion, the information set
forth in the summary consolidated financial data for each of the five
years in the period ending September 30, 1993, appearing under the heading
"Summary Consolidated Financial Data" is fairly stated in all material
respects in relation to the consolidated financial statements from which
it has been derived.

Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedules listed in Item
14(a)(2) are presented for purposes of complying with the Securities and
Exchange Commission's rules and are not part of the basic financial
statements. These schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required
to be set forth therein in relation to the basic financial statements
taken as a whole.

ARTHUR ANDERSEN & CO.

New York, New York
November 23, 1993

F-2 <PAGE>

<TABLE>
Elizabethtown Gas Company and Subsidiaries
Statements of Consolidated Income
(Dollars in thousands)
<CAPTION>
Years Ended September 30,
1991 1992 1993
<S> <C> <C> <C>
Operating Revenues $291,320 $291,032 $354,889
------ ------ ------

Operating Expenses
Purchased gas and fuel 151,928 139,309 195,842
Other operation 61,306 61,586 66,356
Maintenance 4,669 5,324 5,529
Depreciation and amortization 12,962 14,273 15,082
General taxes 34,027 35,275 35,730
Income taxes 5,514 8,038 8,543
------ ------ ------
Total operating expenses 270,406 263,805 327,082
------ ------ ------

Operating Income 20,914 27,227 27,807

Other Income and Expense
Dividend and interest income 793 761 587
Other income, net 806 1,612 787
Write down of properties (2,325)
Income taxes 475 (686) (352)
------ ------ ------
Total other income and expense, net (251) 1,687 1,022
------ ------ ------

Interest Expense 11,516 12,437 12,856
------ ------ ------

Net Income $9,147 $16,477 $15,973
====== ====== ======
</TABLE>

See the notes to the consolidated financial statements.

F-3 <PAGE>

<TABLE>
Elizabethtown Gas Company and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)

<CAPTION>
September 30,
1992 1993
<S> <C> <C>
ASSETS
Property, Plant and Equipment
Utility plant, at original cost $447,610 $483,853
Accumulated depreciation and amortization (140,086) (151,725)
Unamortized plant acquisition adjustment 15,696 15,084
------ ------
Net utility plant 323,220 347,212
------ ------
Funds for Construction Held by Trustee 34,123 24,184
------ ------
Investments in Marketable Securities 759 3,986
------ ------
Current Assets
Cash and temporary cash investments 3,303 1,662
Accounts receivable 29,845 27,609
Allowance for doubtful accounts (1,369) (1,225)
Amounts receivable from NUI 6,854 6,735
Fuel inventories, at average cost, and deferred cost of gas, net 18,002 28,456
Deferred Federal income taxes 7,672 2,625
Materials, supplies and other 5,906 6,924
------ ------
Current assets 70,213 72,786
------ ------
Deferred Charges and Other Assets 40,597 41,082
------ ------
$468,912 $489,250
====== ======

CAPITALIZATION AND LIABILITIES
Capitalization (See accompanying statements)
Common shareholder's equity $151,166 $166,559
Preferred stock
Long-term debt 114,046 112,090
------ ------
Capitalization 265,212 278,649
------ ------
Capital Lease Obligations 13,422 12,290
------ ------
Current Liabilities<PAGE>

Current portion of long-term debt and capital lease obligations 5,050 3,882
Notes payable to banks 32,750 63,200
Accounts payable, customer deposits and accrued liabilities 48,576 46,798
Amounts payable to NUI 7,066 525
General taxes 19,929 6,078
Federal income taxes 2,403 524
------ ------
Current liabilities 115,774 121,007
------ ------
Deferred Credits and Other Liabilities
Deferred Federal income taxes 34,985 37,737
Deferred investment tax credits 8,132 7,687
Other liabilities 31,387 31,880
------ ------
Deferred credits and other liabilities 74,504 77,304
------ ------

$468,912 $489,250
====== ======

</TABLE>
See the notes to the consolidated financial statements.

F-4 <PAGE>

<TABLE>
Elizabethtown Gas Company and Subsidiaries
Statements of Consolidated Cash Flows
(Dollars in thousands)
<CAPTION>
Years Ended September 30,
1991 1992 1993
<S> <C> <C> <C>
Operating Activities
Net income $ 9,147 $ 16,477 $ 15,973
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 14,512 15,644 16,346
Write-down of gas producing properties 2,325
Amortization of non-current fuel inventory 1,066 860 709
Deferred Federal income taxes 3,480 2,814 8,343
Amortization of deferred investment tax credits (469) (462) (461)
Other 2,533 2,711 3,269
Effect of changes in:
Accounts receivable, net (397) (6,270) 1,912
Fuel inventories and deferred cost of gas, net 10,011 (10,747) (10,454)
Accounts payable, deposits and accruals 1,541 3,121 (13,201)
General taxes (1,147) (4,437) (13,851)
Other (2,014) (4,729) (6,547)
------ ------ ------
Net cash provided by operating activities 40,588 14,982 2,038
------ ------ ------
Financing Activities
Equity contributed by NUI 6,500 10,000
Dividends paid to NUI (9,228) (9,176) (10,744)
Proceeds from issuance of long-term debt 52,860
Funds for construction held by trustee (32,338) 11,015
Repayments of long-term debt (1,051) (25,914) (2,734)
Repayments under capital lease obligations (2,139) (2,355) (1,874)
Net short-term borrowings (5,800) 25,950 30,450
------ ------ ------
Net cash provided by (used for) financing activities (11,718) 9,027 36,113
------ ------ ------
Investing Activities
Additions to utility plant (27,714) (30,742) (35,442)
Proceeds from sales of marketable securities 98 6,170
Marketable securities transferred from NUI (3,227)
Other (268) (574) (1,123)
------ ------ ------
Net cash used for investing activities (27,884) (25,146) (39,792)
------ ------ ------

Net Increase (Decrease) in Cash and Temporary Cash Investments $986 ($1,137) ($1,641)
====== ====== ======

Cash and Temporary Cash Investments
At beginning of period $3,454 $4,440 $3,303
At end of period 4,440 3,303 1,662

Supplemental Disclosures of Cash Flows
Income taxes paid $4,286 $6,144 $2,810
Interest paid 11,535 12,943 12,120
</TABLE>

See the notes to the consolidated financial statements.

F-5 <PAGE>

<TABLE>
Elizabethtown Gas Company and Subsidiaries
Statements of Consolidated Taxes
(Dollars in thousands)
<CAPTION>
Years Ended September 30,
1991 1992 1993
<S> <C> <C> <C>
General Taxes
Gross receipts and franchise $ 28,875 $ 30,297 $ 30,472
Payroll 2,749 2,850 2,992
Other 2,403 2,128 2,266
------ ------ ------
Total general taxes $34,027 $35,275 $35,730
------ ------ ------
Federal Income Taxes
Currently payable $1,742 $5,934 $681
Deferred, net 3,480 2,814 8,343
Amortization of investment tax credits (469) (462) (461)
------ ------ ------
Provision for Federal income taxes $4,753 $8,286 $8,563
------ ------ ------
Sources of Deferred Federal Income Taxes
Depreciation of utility plant $2,157 $2,650 $2,313
Litigation settlement 2,103
Alternative minimum tax (808) 286 (1,102)
Write-down of gas producing properties (791)
Gross receipts and franchise taxes (676) (643) 4,947
Deferred charges (1,193) (360) 1,282
Other, net 1,336 881 903
------ ------ ------
Provision for deferred Federal income taxes $3,480 $2,814 $8,343
------ ------ ------
Reconciliation of Federal Income Tax at Statutory Rate to
Provision for Income Taxes
Income before Federal income taxes $13,900 $24,763 $24,536
====== ====== ======
Federal income taxes computed at the statutory tax rate
(34% in fiscal 1991 and 1992 and 34.75% in fiscal 1993)
$4,726 $8,419 $8,526
Increase (reduction) resulting from:
Excess of book over tax depreciation not previously
deferred 432 446 432
Amortization of investment tax credits (469) (462) (461)
Other, net 64 (117) 66
------ ------ ------
Provision for Federal income taxes 4,753 8,286 8,563
Provision for state income taxes 286 438 332
------ ------ ------
Total provision for income taxes 5,039 8,724 8,895
Less: provision (credit) included in other income and
expense (475) 686 352
------ ------ ------
Provision for income taxes included in operating expenses $5,514 $8,038 $8,543
====== ====== ======
</TABLE>

See the notes to the consolidated financial statements.

F-6 <PAGE>

<TABLE>
Elizabethtown Gas Company and Subsidiaries
Statements of Consolidated Capitalization
(Dollars in thousands)
<CAPTION>
September 30,
1992 1993
<S> <C> <C>
Long-Term Debt

Gas facilities revenue bonds
6.75% due October 1, 2021 * $ 46,200 $ 46,200
6.625% due October 1, 2021 * 8,400 8,400
11% due June 1, 2014 25,000 25,000
11.25% due June 1, 2014 21,500 21,500

First mortgage bonds
8.5% due May 1, 2002 9,091 8,182
8% due April 1, 1997 2,750 2,625
14% due July 1, 1994 1,500 800
7.25% due January 1, 1993 1,000 -
------ ------
Long-term debt, including current portion 115,441 112,707
Subsidiary's guaranty of ESOP indebtedness 1,458 1,339
------ ------
Total long-term debt, including current portion 116,899 114,046
Current portion of long-term debt (2,853) (1,956)
------ ------
Total long-term debt 114,046 112,090
------ ------

Preferred Stock, 500,000 shares authorized; none issued - -
------ ------

Common Shareholder's Equity
Common Stock, no par value;
Shares authorized: 1,500,000
Shares outstanding: 1,040,164 78,322 88,322
Retained earnings 74,302 79,669
Unrealized loss on marketable securities (93)
Subsidiary's guaranty of ESOP indebtedness (1,458) (1,339)
------ ------
Total common shareholder's equity 151,166 166,559
------ ------
Total Capitalization $265,212 $278,649
====== ======

<FN>
* The unexpended portion of the net proceeds from this indebtedness, amounting to $24.2 million as
of September 30, 1993, is carried on the Company's consolidated balance sheet as funds for
construction held by trustee until drawn upon incurring eligible construction expenditures.
</TABLE>

See the notes to the consolidated financial statements.

F-7 <PAGE>

<TABLE>
Elizabethtown Gas Company and Subsidiaries
Statements of Consolidated Shareholder's Equity
(Dollars in thousands)

Valuation of Guaranty of
Common Retained Marketable ESOP
Stock Earnings Securities Indebtedness Total
<S> <C> <C> <C> <C> <C>
Balance, October 1, 1990 $ 71,822 $ 66,803 $ - ($1,661) $136,964
Net Income 9,147 9,147
Cash dividends (9,228) (9,228)
Contributions from NUI 6,500 6,500
ESOP transactions 140 93 233
------ ------ ------ ------ ------
Balance September 30, 1991 78,322 66,862 (1,568) 143,616

Net income 16,477 16,477
Cash dividends (9,176) (9,176)
Contributions from NUI
ESOP transactions 139 110 249
------ ------ ------ ------ ------
Balance, September 30, 1992 78,322 74,302 (1,458) 151,166

Net income 15,973 15,973
Cash dividends (10,744) (10,744)
Contributions from NUI 10,000 10,000
Valuation adjustments (93) (93)
ESOP transactions 138 119 257
------ ------ ------ ------ ------
Balance, September 30, 1993 $88,322 $79,669 ($93) ($1,339) $166,559
====== ====== ====== ====== ======
</TABLE>

See the notes to the consolidated financial statements.

F-8 <PAGE>

Elizabethtown Gas Company and Subsidiaries
Notes to the Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Principles of Consolidation. The consolidated financial statements
include the accounts of Elizabethtown Gas Company ("Elizabethtown") and
its wholly-owned subsidiaries (the "Company"). Elizabethtown, which is a
wholly-owned subsidiary of NUI Corporation ("NUI"), distributes natural
gas in New Jersey and Florida. Intercompany accounts and transactions have
been eliminated in consolidation.

Certain reclassifications have been made to the prior year financial
statements to conform with the current year presentation.

Regulation.The Company's operations are subject to regulation by the
New Jersey Board of Regulatory Commissioners (the "NJBRC") and the Florida
Public Service Commission (the "FPSC").

Property, Plant and Equipment. Utility plant is stated at its
original cost at the time it was placed into service. Depreciation is
provided on a composite straight-line basis using rates approved by the
state commissions. The estimated service lives used range from 5 to 84
years. At the time properties are retired, the original cost plus the cost
of retirement, less salvage, is charged to accumulated depreciation.

The unamortized plant acquisition adjustment represents the remaining
unamortized portion of the excess, at the date of acquisition of the
Florida Division, of the purchase price over the book value of the net
assets acquired. The plant acquisition adjustment is being amortized on a
straight-line basis over thirty years.

Repairs of all property, plant and equipment and replacements and
renewals of minor items of property are charged to maintenance expense as
incurred.

Revenues and Gas and Fuel Costs. Operating revenues include accrued
unbilled revenues through the end of each accounting period. Operating
revenues also include adjustments attributable to the New Jersey
Division's weather normalization clause that are accrued during the winter
heating season and billed or credited to customers in the following year.
Weather normalization adjustments increased the Company's operating
margins (operating revenues less purchased gas and fuel and gross receipts
and franchise taxes) by approximately $1.3 million in fiscal 1993 and $0.8
million in fiscal 1992.

Costs of gas and fuel are recognized as expenses in accordance with
the gas cost adjustment clause applicable in each state. Such clauses
provide for periodic reconciliations of actual recoverable gas costs and
the estimated amounts that have been billed to customers. Under or over
recoveries are deferred when they arise and are recovered from or refunded
to customers in subsequent periods.

Income Taxes. The Company provides deferred Federal income taxes for
differences between book and tax income other than taxes associated with a
portion of the differences in depreciation of New Jersey Division utility

F-9 <PAGE>

plant additions prior to October 1, 1975 that, in accordance with a rate
order, are being flowed through to customers. The net amount of such
differences for which deferred income taxes have not been provided was
approximately $8 million at September 30, 1993. Under the established
ratemaking practices, taxes attributable to these differences for which
deferred taxes were not previously provided are collected in customers'
rates when due for payment.

Investment tax credits, which were generated principally in
connection with additions to utility plant made prior to January 1, 1986,
are being amortized over the estimated service lives of the properties
that gave rise to the credits.

As of October 1, 1993, the Company will adopt Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes,"
which, among other things, changes the method used by enterprises to
account for deferred income taxes. Accordingly, the Company will record
deferred income taxes not previously provided for the differences between
the book and tax bases of assets, and will adjust previously established
deferred income taxes to reflect the currently expected Federal income tax
rate. Adoption of SFAS No. 109 will not have a material effect on the
Company's net income because, as discussed above, deferred taxes
previously not provided will be collected from customers as the taxes are
paid and the adjustment of deferred tax balances to reflect the current
Federal income tax rate generally will be included in operating income
over the remaining depreciable lives of the related property in accordance
with the provisions of the Tax Reform Act of 1986, and the Company's
revenue requirements for ratemaking purposes will be reduced concurrently.
As of October 1, 1993, the Company will increase the deferred tax
liability by approximately $9.0 million, increase the unamortized plant
acquisition adjustment by approximately $9.2 million and record a net
regulatory liability of approximately $0.2 million.

Postretirement Benefits Other Than Pensions. The Company provides
certain health care benefits to substantially all retirees receiving
benefits under a Company pension plan, other than the Florida Division
plan, who reach retirement age while working for the Company. The cost of
these benefits, which is expensed as claims are incurred, was $0.7 million
in fiscal 1993, $0.6 million in fiscal 1992 and $0.8 million in fiscal
1991.

As of October 1, 1993, the Company will adopt the accounting method
required by SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," which, among other things, requires
enterprises to accrue the expected cost of these benefits during the years
that eligible employees render the necessary service. The adoption of SFAS
No. 106 will give rise to an unfunded postretirement benefit obligation
amounting to $21 million. The Company has received an order from the NJBRC
permitting it to defer for as long as five years the difference between
the amount of expense computed as claims are incurred and the amount
computed on the accrual method, pending ratemaking treatment that would be
considered in a full rate case. The consensus issued in 1993 by the
Emerging Issues Task Force of the Financial Accounting Standards Board
(the "EITF") permits rate regulated companies to defer such expenses when
the ratemaking treatment provides for them to be fully recovered in the
subsequent fifteen year period. The Company expects to seek ratemaking
treatment that is consistent with the EITF's consensus and, accordingly,

F-10 <PAGE>

the adoption of SFAS No. 106 is not expected to have a material effect
upon the Company's net income.

The Company continually evaluates alternative ways to manage these
benefits and control their costs. Any changes in the plan or revisions to
assumptions that affect the amount of expected future benefits may have a
significant effect on the amount of the reported obligation and the annual
deferrals and expense.

2. Pending Acquisition

On July 27, 1993, NUI and Pennsylvania & Southern Gas Company
("PSGS") entered into an Agreement and Plan of Merger, pursuant to which
PSGS would be merged with and into NUI (the "PSGS Merger"). Under the
Agreement and Plan of Merger, NUI will acquire all of the outstanding
common shares of PSGS for approximately $17 million, payable in shares of
NUI Common Stock equivalent to $71.50 per PSGS share, except that each
shareholder will receive no less than 2.4 and no more than 3.0 shares of
NUI Common Stock for each PSGS share held. The exchange value of the NUI
Common Stock will be established immediately prior to the merger. The PSGS
Merger will be consummated upon receipt of all required regulatory
approvals, the approval of the stockholders of PSGS, and the satisfaction
or waiver of certain other consents and conditions. Upon the effectiveness
of the PSGS Merger, NUI would assume all of the rights and obligations of
PSGS. Following the PSGS Merger, Elizabethtown will be merged with and
into NUI (the "Elizabethtown Merger").

3. Capitalization

Long-Term Debt. In October 1991, pursuant to agreements between
Elizabethtown and the New Jersey Economic Development Authority, gas
facilities revenue bonds that mature in October 2021 were issued in the
amount of $46.2 million at 6.75% and $8.4 million at 6.625% to finance
expenditures through fiscal 1995 for the construction of certain gas
facilities and related equipment in New Jersey, including approximately
$11.4 million expended prior to incurring this long-term debt. The
unexpended portion of the net proceeds from these borrowings was
$24.2 million at September 30, 1993 and is classified on the Company's

F-11 <PAGE>

consolidated balance sheet as funds for construction held by trustee until
drawn upon incurring eligible expenditures.

In fiscal 1992, in accordance with the optional prepayment provisions
of the underlying indenture agreements, Elizabethtown borrowed under its
bank lines of credit to repay $6.6 million of 6.5% sinking fund debentures
and $6.1 million of 9.5% sinking fund debentures in advance of their
scheduled maturities.

The Florida Division's assets collateralize a mortgage and deed of
trust, dated November 1, 1959, and subsequent modifications thereof.

Preferred Stock. Elizabethtown has 500,000 shares of authorized but
unissued preferred stock.

Common Stock. NUI contributed additional equity capital amounting to
$10.0 million in fiscal 1993 and $6.5 million in fiscal 1991.

Employee Stock Ownership Plan. The Company provides an employee stock
ownership plan for certain employees of its Florida Division (the "ESOP"),
which was funded initially with indebtedness that is guaranteed by a
subsidiary of Elizabethtown. The Company incurred ESOP contribution
expense amounting to $0.9 million in fiscal 1993, $0.7 million in fiscal
1992 and $1.0 million in fiscal 1991, representing contributions for loan
payments and to acquire additional shares of NUI Common Stock. As of
September 30, 1993, the ESOP trust held 263,103 shares of NUI Common
Stock, of which 179,493 shares were allocated to participating employees.
Participating employees are entitled to vote the allocated shares and the
ESOP trustees vote the remainder of the shares.

4. Notes Payable to Banks

At September 30, 1993, the Company's outstanding notes payable to
banks were $63.2 million with a combined weighted average interest rate of
3.8%. Unused lines of credit at September 30, 1993 were $63.7 million.
While there are no formal compensating balance requirements, certain banks
have indicated that satisfactory balances should be maintained to support
the lines of credit and services provided.

The weighted average daily amount outstanding of notes payable to
banks and the weighted average interest rate on that amount was
$32.2 million at 3.6% in fiscal 1993, $13.0 million at 5.0% in fiscal 1992
and $16.0 million at 7.9% in fiscal 1991.

5. Leases

Property, plant and equipment held under capital leases amounted to
$22.0 million at September 30, 1993 and $22.4 million at September 30,

F-12 <PAGE>

1992, with related accumulated amortization of $8.0 million in 1993 and
$7.0 million in 1992. These properties consisted principally of leasehold
improvements and office furniture and fixtures for a divisional
headquarters. A summary of future minimum payments for properties held
under capital leases follows (in thousands):

1994 $ 3,107
1995 2,409
1996 2,149
1997 1,966
1998 1,839
1999 and Thereafter 8,532
------
Total Future Minimum Payments 20,002
Amount Representing Interest (5,786)
Current Portion of Capital Lease Obligations (1,926)
------
Capital Lease Obligations $12,290
======

Minimum payments under noncancelable operating leases, which relate
principally to office space for a divisional headquarters, are
approximately $3.0 million in each of the next five years.

Rents charged to operating expenses were $4.0 million in fiscal 1993,
$3.7 million in fiscal 1992 and $3.6 million in fiscal 1991.

6. Other Income and Expense

The write down of properties in fiscal 1991 relates to certain
reserves of natural gas that are recoverable based upon market prices that
had declined significantly.

7. Pension Benefits

The Company has non-contributory defined benefit retirement plans
which cover substantially all of its employees, other than the Florida
Division's unionized employees who participate in a union sponsored
multi-employer plan. The Company funds its plans in accordance with the
requirements of the Employee Retirement Income Security Act of 1974
(ERISA) and makes contributions to the union sponsored plan in accordance
with its contractual obligations. Benefits paid under the Company's plans
are based on years of service and levels of compensation. The Company's
actuarial calculation of pension expense is based on the projected unit
cost method.

F-13 <PAGE>

The components of pension expense for the Company's plans were as
follows (in thousands):

1991 1992 1993
Service Cost $ 1,580 $ 1,608 $ 1,775
Interest Cost 3,746 4,078 4,394
Return on Plan Assets (12,908) (6,744) (11,240)
Net Amortization 6,869 556 4,805
------ ------ ------
Pension Credit $(713) $(502) $(266)
====== ====== ======

The status of the Company's funded plans as of September 30 was as
follows (in thousands):

1992 1993
Actuarial Present Value of Benefit Obligation:
Vested Benefits $ 39,455 $ 42,724
Non-vested Benefits 2,759 2,758
------ ------
Accumulated Benefit Obligation 42,214 45,482
Projected Increases in Compensation Levels 11,684 10,072
------ ------
Projected Benefit Obligation 53,898 55,554
Market Value of Plan Assets 69,201 68,184
------ ------
Plan Assets in Excess of Projected Benefit
Obligation 15,303 12,630
Unrecognized Net Loss and Prior Service Cost (7,645) (6,502)
Unrecognized Net Transition Asset (5,881) (4,416)
------ ------
Pension Prepayment $1,777 $1,712
====== ======

The projected benefit obligation for the Company's principal pension
plan was calculated using a discount rate of 7% in fiscal 1993 and 8.25%
in fiscal 1992 and an assumed annual increase in compensation levels of 5%
in fiscal 1993 and 5.25% in fiscal 1992. The expected long-term rate of
return on assets is 9%. The assets of the Company's funded plans are
invested primarily in publicly-traded fixed income and equity securities.

Certain key employees also participate in an unfunded supplemental
retirement plan. The projected benefit obligation under this plan was
$3.1 million as of September 30, 1993 and $1.8 million as of September 30,
1992, and the expense for this plan is approximately $0.4 million
annually.

8. Commitments and Contingencies

Commitments. Capital expenditures are expected to be approximately
$48.0 million in fiscal 1994.

Environmental Matters. The Company is subject to federal and state
legislation with respect to water, air quality, solid waste disposal and
employee health and safety matters and to environmental regulations issued
by the United States Environmental Protection Agency (the "EPA"), the New

F-14 <PAGE>

Jersey Department of Environmental Protection and Energy (the "NJDEPE"),
and other federal and state agencies.

Gas Procurement Contracts. Certain of the Company's long-term
contracts for the supply, storage and delivery of natural gas include
fixed charges that amount to approximately $64 million annually, of which
approximately $43 million is associated with pipeline delivery contracts.
The Company currently recovers, and expects to continue to recover, such
fixed charges through its gas adjustment clauses. The Company also is
committed to purchase, at market-related prices, minimum quantities of gas
that, in the aggregate, are approximately 7 million Mcf per year or to pay
certain costs in the event the minimum quantities are not taken. The
Company expects that minimum demand on its systems will continue to exceed
these minimum purchase obligations.

The implementation of Federal Energy Regulatory Commission ("FERC")
Order No. 636 required the restructuring of the Company's contracts with
certain pipeline companies that together supply less than one-third of the
Company's total firm gas supply. Under Order No. 636 the pipeline

F-15 <PAGE>

companies are passing through to their customers transition costs
associated with mandated restructuring, such as costs resulting from
buying out unmarketable gas purchase contracts. The transition costs
charged to the Company have amounted to approximately $1.4 million and are
being recovered through the Company's gas adjustment clauses.

Additionally, certain of the Company's suppliers received FERC
approval of surcharges on their rates to recover costs incurred to settle
certain take-or-pay obligations they had with natural gas producers. The
New Jersey Division has received approval from the NJBRC to recover that
portion of the surcharge that is based on a unit rate in the same manner
as it recovers other commodity costs and to recover fixed charges over a
nine-year period, ending in 1997. Of these fixed charges, the amount
deferred as of September 30, 1993 was $2.0 million.

Other. In addition, the Company is involved in various claims and
litigation incidental to its business. In the opinion of management, none
of these claims and litigation will have a material adverse effect on the
Company's results of operations or its financial condition.

F-16 <PAGE>
<TABLE>

SCHEDULE V
Elizabethtown Gas Company and Subsidiaries
Property, Plant and Equipment
For Each of the Fiscal Years in the
Three-Year Period Ended September 30, 1993
(Dollars in thousands)
<CAPTION>

Balance, Balance,
Beginning Additions Other End of
Classification of Period at Cost Retirements Changes Period
<S> <C> <C> <C> <C> <C>
1991
Intangible plant $ - $ 630 $ - $ - $ 630
Non-depreciable plant 1,842 57 1,899
Production 8,132 9 2 8,139
Storage 6,520 34 99 6,455
Transmission plant 1,717 1,717
Distribution plant 319,491 22,599 835 2,935 344,190
General plant 49,849 3,486 899 12 52,448
Gas producing properties 1,418 (15) 1,403
Construction work in progress 5,563 (1,984) 3,579
------ ------ ------ ------ ------
$394,532 $24,816 $1,835 $2,947 (a) $420,460
====== ====== ====== ====== ======
1992
Intangible plant $630 $417 $ - $ - $1,047
Non-depreciable plant 1,899 12 1,911
Production 8,139 23 2 8,160
Storage 6,455 401 306 6,550
Transmission plant 1,717 578 2,295
Distribution plant 344,190 22,209 1,065 365,334
General plant 52,448 6,118 2,809 55,757
Gas producing properties 1,403 1,403
Construction work in progress 3,579 1,574 5,153
------ ------ ------ ------ ------
$420,460 $31,332 $4,182 $ - $447,610
====== ====== ====== ====== ======
1993
Intangible plant $1,047 $27 $ - $ - $1,074
Non-depreciable plant 1,911 6 200 (b) 2,117
Production 8,160 267 8,427
Storage 6,550 1,155 7,705
Transmission plant 2,295 51 2,346
Distribution plant 365,334 31,044 1,194 587 (b) 395,771
General plant 55,757 6,242 2,158 (787)(b) 59,054
Gas producing properties 1,403 1,403
Construction work in progress 5,153 803 5,956
------ ------ ------ ------ ------
$447,610 $39,595 $3,352 $ - $483,853
====== ====== ====== ====== ======
<F1>
a) Added as a result of an acquisition.
<F2>
b) Reclassifications among accounts.

</TABLE>
F-17 <PAGE>
<TABLE>

SCHEDULE VI
Elizabethtown Gas Company and Subsidiaries
Accumulated Depreciation and Amortization
of Property, Plant and Equipment
For Each of the Fiscal Years in the
Three-Year Period Ended September 30, 1993
(Dollars in thousands)
<CAPTION>
Additions Charged to
---------------------
Balance, Deprec- Other Changes Balance,
Beginning iation Other Retire- ----------------- End of
Classification of Period Expense Expenses ments Salvage Other Period
<S> <C> <C> <C> <C> <C> <C> <C>
1991
Intangible plant $ - $ 11 $ - $ - $ - $ - $ 11
Production 3,987 257 2 (25)(a) 4,217
Storage 5,338 306 99 5,545
Transmission plant 1,014 31 1,045

(400)(a)
Distribution plant 93,881 8,938 835 54 1,173 (b) 102,811

General plant 10,414 3,419 787 894 1,012 (13)(a) 14,725
Gas producing properties 1,062 148 1,210
------ ------ ------ ------ ------ ------ ------
$115,696 $12,962 $935 $1,830 $1,066 $735 $129,564
====== ====== ====== ====== ====== ====== ======
1992
Intangible plant $11 $127 $ - $ - $ - $ - $138
Production 4,217 250 2 (34) 4,431
Storage 5,545 308 306 (70) 5,477
Transmission plant 1,045 36 1,081
Distribution plant 102,811 9,386 1,065 1 (523) 110,610
General plant 14,725 4,166 610 2,791 309 (31) 16,988
Gas producing properties 1,210 151 1,361
------ ------ ------ ------ ------ ------ ------
$129,564 $14,273 $761 $4,164 $310 $(658)(a) $140,086
====== ====== ====== ====== ====== ====== ======
1993
Intangible plant $138 $221 $ - $ - $ - $ - $359
Production 4,431 255 (194)(a) 4,492
Storage 5,477 349 (5)(a) 5,821
Transmission plant 1,081 42 1,123

(889)(a)
Distribution plant 110,610 10,099 1,180 172 (b) 118,812

(35)(a)
General plant 16,988 4,116 600 1,782 (172)(b) 19,715
Gas producing properties 1,361 42 1,403
------ ------ ------ ------ ------ ------ ------
$140,086 $15,082 $642 $2,962 $ - $(1,123) $151,725
====== ====== ====== ====== ====== ====== ======
<F1>
a) Removal costs.
<F2>
b) Added as a result of an acquisition.
<F3>
c) Reclassifications among accounts.

</TABLE>

F-18 <PAGE>
<TABLE>

SCHEDULE VIII
Elizabethtown Gas Company and Subsidiaries
Valuation and Qualifying Accounts
For Each of the Fiscal Years in the
Three-Year Period Ended September 30, 1993
(Dollars in thousands)
<CAPTION>
Additions
--------------------------
Balance, Charged to Balance,
Beginning Costs and End of
Description of Period Expenses Other Deductions Period
<S> <C> <C> <C> <C> <C>
1991
Allowance for doubtful accounts $ 1,262 $ 2,333 $ 514(a) $ 3,068(b) $ 1,041
Reserve for litigation $6,760 $(260) $6,500(c) $ -
Reserve for environmental
matters (d) 24,700 $24,700

1992
Allowance for doubtful accounts $1,041 $2,281 $744(a) $2,696(b) $1,370
Reserve for environmental
matters (d) $24,700 $24,700

1993
Allowance for doubtful accounts $1,370 $1,852 $474(a) $2,471(b) $1,225
Reserve for environmental
matters (d) $24,700 $24,700

<F1>
a) Recoveries.
<F2>
b) Uncollectible amounts written off.
<F3>
c) In February 1991, the Company paid $6.5 million to settle an antitrust lawsuit and, in a related
transaction, $1.5 million to acquire certain gas distribution assets which added 6,100 customers in
the Florida Division. The cost of the settlement was charged against the reserve established by the
Company in conjunction with assuming the related litigation when it acquired the Florida Division
in 1988.

F-19 <PAGE>

<F4>
d) The related cost of the reserve established in fiscal 1991 was recorded as a deferred charge, as
have subsequent expenditures amounting to approximately $0.8 million in fiscal 1993 and $0.6
million in fiscal 1992. See "Commitments and Contingencies-Environmental Matters," Note 8 of the
Notes to the Consolidated Financial Statements.

</TABLE>
F-20 <PAGE>

<TABLE>
SCHEDULE IX
Elizabethtown Gas Company and Subsidiaries
Short-Term Borrowings
For Each of the Fiscal Years in the
Three-Year Period Ended September 30, 1993
(Dollars in thousands)

<CAPTION>
1991 1992 1993
<S> <C> <C> <C>
Amount outstanding at year end $ 6,800(a) $ 32,750 $ 63,200
Maximum amount outstanding $ 39,000 $ 32,750 $ 63,950
Average daily amount outstanding $ 15,967 $ 13,002 $ 32,188
Range of interest rates 5.875-10.50% 3.22-7.45% 3.13-5.00%
Weighted average interest rates:
On average daily amount outstanding 7.94% 4.96% 3.58%
On year end balance 6.78% 3.88% 3.84%

<FN>
a) Excludes $11.4 million of notes payable to banks that were refinanced with the net proceeds of
gas facilities revenue bonds issued in fiscal 1992.

</TABLE>

F-21 <PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Date: December 10, 1993 ELIZABETHTOWN GAS COMPANY
(Registrant)

By: ROBERT P. KENNEY, PRESIDENT & By: JOSEPH P. COUGHLIN,
CHIEF EXECUTIVE OFFICER SECRETARY

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the Capacities on the dates indicated.

December 10, 1993 JOHN KEAN, DIRECTOR

December 10, 1993 C. R. CARVER, DIRECTOR

December 10, 1993 DUNCAN S. ELLSWORTH, JR., DIRECTOR

December 10, 1993 DR. VERA KING FARRIS, DIRECTOR

December 10, 1993 ROBERT W. KEAN, JR., DIRECTOR

December 10, 1993 STEWART B. KEAN, DIRECTOR

December 10, 1993 STEPHEN SCHACHMAN, DIRECTOR

December 10, 1993 FREDERICK W. SULLIVAN, DIRECTOR

DAVID P. VINCENT, RAND W. SMITH,
CHIEF FINANCIAL OFFICER CHIEF ACCOUNTING OFFICER

Supplemental Information to be furnished with reports filed pursuant to
Section 15 (d) of the Act by Registrants Which Have Not Registered
Securities Pursuant to Section 12 of the Act:

No annual report covering Registrant's last fiscal year or any proxy
material has been sent to security holders.
Registrant is a wholly-owned subsidiary of NUI Corporation. <PAGE>

INDEX TO EXHIBITS

Exhibit
No. Description

21 Subsidiaries of Elizabethtown Gas Company <PAGE>

EXHIBIT NO. 21

SUBSIDIARIES OF ELIZABETHTOWN GAS COMPANY

Essel Corporation (a Florida corporation) and Utility Billing
Services, Inc. (a New Jersey corporation) are wholly-owned subsidiaries of
Elizabethtown Gas Company.

Natural Gas Services, Inc. (a Delaware corporation) is a wholly-owned
subsidiary of Essel Corporation.
<PAGE>