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 December 31, 1993 Commission File Number 1-6364
SOUTH JERSEY INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1901645
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Number One South Jersey Plaza, Route 54
Folsom, New Jersey 08037
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 561-9000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock New York Stock Exchange and
($1.25 par value per share) Philadelphia Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of approximately 8,490,400 shares of voting stock
held by non-affiliates of the registrant as of March 10, 1994 was $187,850,000.
As of March 10, 1994, there were 9,887,571 shares of the registrant's common
stock outstanding.
Documents Incorporated by Reference:
In Part I of Form 10-K: Pages 14, 16, 17, 18 and 20 of 1993
Annual Report to Shareholders
In Part II of Form 10-K: Page 1 and Pages 10 through 22 of 1993
Annual Report to Shareholders
In Part III of Form 10-K: Pages 1 through 12 (except as stated in
Item 11 of this Form 10-K) of the Proxy Statement dated March 9,
1994 for the 1994 Annual Meeting of Shareholders
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PART I
Item 1. Business
General
The registrant, South Jersey Industries, Inc. (the Company), a New Jersey
corporation, was formed in 1969 for the purpose of owning and holding all of the
outstanding common stock of South Jersey Gas Company (South Jersey Gas), a
public utility, and acquiring and developing nonutility lines of business.
Energy & Minerals, Inc. (EMI), a wholly-owned subsidiary of the Company, was
formed in 1977 to own, finance and further develop certain nonutility
businesses. Through a subsidiary, EMI is engaged in the mining, processing and
marketing of construction, commercial, industrial and other specialty sands and
gravels. South Jersey Energy Company, a wholly-owned subsidiary of the Company,
provides services for the acquisition and transportation of natural gas for
commercial and industrial users. R&T Group, Inc. (R&T), a wholly-owned
subsidiary of the Company, was formed in 1989 to own, finance and further
develop certain utility construction, general construction and environmental
remediation businesses. R&T engages in these businesses through several
operating subsidiaries.
Financial Information About Industry Segments
Information regarding the Industry Segments is incorporated by reference
to Note 2 on page 16 of the Company's Annual Report to Shareholders for the year
ended December 31, 1993, which Annual Report is attached to this report.
See Item 14(c)(13).
Description of Business
The Company is engaged in the business of operating, through subsidiaries,
various business enterprises. The Company's most significant subsidiary is
South Jersey Gas.
South Jersey Gas, a New Jersey corporation, is an operating public utility
company engaged in the purchase, transmission and sale of natural gas for
residential, commercial and industrial use in an area of approximately 2,500
square miles in the southern part of New Jersey. South Jersey Gas also
transports natural gas purchased directly by some of its customers.
South Jersey Gas' service territory includes 112 municipalities
throughout Atlantic, Cape May, Cumberland and Salem Counties and portions of
Burlington, Camden and Gloucester Counties, with an estimated permanent
population of 1,004,000.
South Jersey Gas serves 235,067 residential, commercial and industrial
customers (at December 31, 1993) in southern New Jersey. Gas sales and
transportation for 1993 amounted to 59,080,000 Mcf (thousand cubic feet), of
which 48,084,000 Mcf was firm sales and transportation, 7,433,000 Mcf was
interruptible sales and transportation and 3,563,000 Mcf was off system sales.
The breakdown of firm sales includes 40.3% residential, 19.1% commercial, 14.0%
cogeneration and electric generation, 5.4% industrial and other, and 21.2%
transportation. At year-end 1993, the Company served 218,484 residential
customers, 16,206 commercial customers and 377 industrial customers. This
includes 1993 net additions of 5,545 residential customers and 357 commercial
customers. The decrease of 17 industrial customers is mainly attributed to
transfers between customer classifications. South Jersey Gas generates
transportation revenues for delivering such supplies.
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Under a five-year agreement executed in 1990 with Atlantic Electric, an
electric utility serving southern New Jersey, South Jersey Gas supplies natural
gas to Atlantic Electric's combustion turbine facility in Cumberland County.
This gas service is being provided under the terms of a firm electric service
tariff approved by the New Jersey Board of Regulatory Commissioners (BRC) on a
demand/commodity basis. In 1993, 2.9 Bcf (billion cubic feet) was delivered
under this agreement.
South Jersey Gas serviced eight cogeneration facilities in 1993 and one
additional facility is expected to come into service later in 1994. Combined
sales and transportation of natural gas to such customers amounted to
approximately 9 Bcf in 1993.
During 1993, South Jersey Gas began making wholesale non-jurisdictional gas
sales for resale to gas marketers for ultimate delivery to end users. These
"off-system" sales were made possible through the issuance of FERC Order No.
547. This order issues blanket certificates of public convenience and necessity
authorizing all parties, which are not interstate pipelines, to make FERC
jurisdictional gas sales for resale at negotiated rates. During 1993, off-
system sales amounted to 3.6 Bcf. Gas supply utilized to make said sales was
gas available in excess of the requirements of its jurisdictional customers.
Supplies of natural gas available to South Jersey Gas that are in excess of
the quantity required by those customers who use gas as their sole source of
fuel (firm customers) make possible the sale of gas on an interruptible basis to
commercial and industrial customers whose equipment is capable of using natural
gas or other fuels, such as fuel oil and propane. The term "interruptible" is
used in the sense that deliveries of natural gas may be terminated by South
Jersey Gas at any time if this action is necessary to meet the needs of
customers purchasing gas under firm rate tariffs. Usage by interruptible
customers in 1993 amounted to approximately 11.0 Bcf. (Approximately 18.6
percent of the total volume of gas delivered).
No material part of South Jersey Gas business is dependent upon a single
customer or a few customers.
The majority of the South Jersey Gas residential customers reside in the
northern and western portions of its service territory in Burlington, Camden,
Salem and Gloucester counties. Approximately 50 percent of new customers
reside in this section of the service territory, which includes the
residential suburbs of Wilmington and Philadelphia. The franchise area to the
east is centered on Atlantic City and the neighboring resort communities in
Atlantic and Cape May counties, which experience large population increases in
the summer months. The impact of the casino gaming industry on the Atlantic
City area has resulted in the creation of new jobs and the expansion of the
residential and commercial infrastructure necessary to support a developing
year-round economy. Atlantic City is experiencing a second wave of development
as a result of casino gaming. The centerpiece of this development is the new
$254 million dollar multi-purpose convention center, accompanied with a planned
billion dollar hotel and entertainment complex. These facilities will be used
to attract large conventions as well as making Atlantic City into a family
resort on a year around basis. The convention center is expected to be in
operation as early as 1996.
Manufacturers or processors of sand, glass, farm products, paints,
chemicals and petroleum products are located in the western and southern
sectors of the service territory. New commercial establishments and high
technology industrial parks and complexes are expected to be part of the
economic growth of this area.
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South Jersey Gas' service area includes parts of the Pinelands region, a
largely undeveloped area in the heart of southern New Jersey. Future
construction in this area is expected to be limited by statute and by a master
plan adopted by the New Jersey Pinelands Commission; however, in terms of
potential growth, significant portions of South Jersey Gas' service area are not
affected by these limitations.
As a public utility, South Jersey Gas is subject to regulation by the BRC.
Additionally, the Natural Gas Policy Act, which was enacted in November 1978,
contains provisions for Federal regulation of certain aspects of South Jersey
Gas' business. South Jersey Gas is affected by Federal regulation with respect
to transportation and pricing policies applicable to its natural gas purchases
from Transcontinental Gas Pipeline Corporation (Transco), South Jersey Gas'
major supplier, and Columbia Gas Transmission Corporation (Columbia), since such
purchases are made under rates and terms established under the jurisdiction of
the Federal Energy Regulatory Commission (FERC).
Retail sales by South Jersey Gas are made under rate schedules within a
tariff filed with and subject to the jurisdiction of the BRC. These rate
schedules provide primarily for either block rates or demand/commodity rate
structures. The tariff contains provisions permitting South Jersey Gas to pass
on to customers increases and decreases in the cost of purchased gas supplies.
The tariff also contains provisions permitting the recovery of environmental
remediation costs associated with former gas plant sites and for the adjustment
of revenues due to the impact of degree day fluctuations which approximate 7%
greater or less than an established 10-year normal.
Revenue requirements for ratemaking purposes are established on the basis
of firm and interruptible sales projections. In August 1992, the BRC granted
SJG a rate increase of $3.35 million based on an overall rate of return of
10.34% including a 12.1% return on equity. As part of this rate increase, SJG
is allowed to retain the first $3.9 million of base revenues generated by
interruptible sales and 20% of base revenues generated by such sales above that
level until it realizes a 12.1% return on equity. SJG also received authority
to implement the environmental remediation cost recovery mechanism as part of
this order. In January 1994, South Jersey Gas petitioned the BRC for a general
base rate increase of approximately $26.6 million, including a 12.75% return on
equity. Additional information on regulatory affairs and the 1994 rate petition
is incorporated by reference to Note 1 on page 14 and Notes 9 and 10 on pages 17
and 18 of the Company's Annual Report to Shareholders for the year ended
December 31, 1993, which Annual Report is attached to this report. See Item
14(c)(13).
South Jersey Energy Company (Energy Company), a New Jersey corporation,
is a wholly owned non-regulated subsidiary of the Company and is engaged in
providing services for the acquisition and transportation of natural gas for
industrial and commercial users.
Energy & Minerals, Inc., a New Jersey corporation, is a holding
company that owns all of the outstanding common stock of The Morie Company,
Inc. (Morie Company), and an inactive company, South Jersey Fuel, Inc.
(Fuel Company).
Morie Company, a New Jersey corporation, is engaged in the mining,
processing and marketing of a broad range of industrial and commercial sands
and gravels. Its principal products are glass sand used for manufacturing
cookware, containers and flat glass, foundry sand used as the core and molding
medium in iron and steel foundries, and construction sand and gravels. Morie
Company also produces sandblasting sands, filter sands and gravels, well
gravels, special sand mixes for athletic tracks and golf courses, resin-coated
sands, clay products and a wide variety of specialty products, including
specially processed silica for the electronics industry.
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Total customers of Morie Company number in the thousands, and no single
customer accounts for as much as 10% of annual sales. Tonnage sales in 1993
were approximately 9.5% higher than 1992, and Morie Company attributes this
increase to slowly improving economic activity. Keen competition and railroad
deregulation are factors affecting prices on a delivered basis. All Morie
Company facilities are in good operating condition and, along with ample high-
quality mineral reserves, are capable of handling expanding markets and of
supporting increased market share.
Fuel Company, a New Jersey corporation, sold its operating assets in
November 1985 and is no longer in the business of distributing petroleum
products.
R&T, a New Jersey corporation, is a holding company that owns all the
common stock of R and T Castellini Company, Inc. (Castellini Company), S.W.
Downer, Jr. Company, Inc. (Downer Company), Onshore Construction Company, Inc.
(Onshore), Cape Atlantic Crane Co., Inc. (Cape Atlantic) and, beginning in 1993,
R & T Castellini Construction Company, Inc. (R & T Construction). In 1993,
approximately 50% of R&T net sales related to competitive-bid work performed for
South Jersey Gas. No other customer accounted for as much as 10% of R&T's
consolidated revenues in 1993.
Castellini Company, a New Jersey corporation, is engaged in the
installation of gas, water and sewer lines, plant maintenance, site work and
environmental cleanup and remediation.
Downer Company, a New Jersey corporation, is engaged in the installation of
gas, water and sewer lines, plant maintenance, site work and environmental
cleanup and remediation.
Onshore, a New Jersey corporation, is principally engaged in the
installation of large diameter pipe, sewerage plants, bridges, dams and other
heavy construction projects.
Cape Atlantic, a New Jersey corporation, is principally engaged in the
rental of cranes.
R & T Construction, a Delaware Corporation, is engaged in the installation
of gas, water and sewer lines, plant maintenance, site work and environmental
cleanup and remediation.
In 1993, the Company made no public announcement of, or otherwise made
public information about, a new product or industry segment that would require
the investment of a material amount of the assets of the Company or which
otherwise was material.
Raw Materials
South Jersey Gas
Pipeline Supply
South Jersey Gas has direct connections to two interstate pipelines,
Transcontinental Gas Pipe Line (Transco) and Columbia Gas Transmission
(Columbia). During 1993, services provided to South Jersey Gas from these
pipelines along with same provided by CNG Transmission Corporation (CNG) were
subject to changes as directed by the Federal Energy Regulatory Commission
(FERC) when it issued its Order No. 636 "Pipeline Service Obligations and
Revisions to Regulations Governing Self-Implemented Transportation Under Part
284 of the Commission's Regulations" issued on April 8, 1992. This order
required significant alterations in the structure of interstate natural gas
pipeline services.
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Order No. 636 and its companion series of orders (636-A and 636-B) were
intended by the FERC to complete the transition to a competitive natural gas
industry initiated by the Natural Gas Policy Act of 1978 whereby all natural gas
suppliers are able to compete for gas purchases on an equal footing.
The pipeline suppliers mentioned above filed Order No. 636 compliance
filings late in 1992 and also submitted revised compliance filings during 1993.
In these compliance filings each pipeline was required to submit a comprehensive
explanation as to how it intended to implement the restructuring of its pipeline
system services.
The FERC subsequently approved these revised compliance filings in time for
the pipelines to implement the provisions of Order No. 636 in advance of the
1993-94 winter heating season.
Transco
Transco, during 1991, unbundled its sales and transportation services as a
result of a FERC approved settlement that was negotiated with its customers. At
that time South Jersey Gas replaced its Commodity and Demand (CD) gas purchase
contract with Transco with a Firm Transportation (FT) service and a gas purchase
agreement (FS service). The FS service is a FERC approved service that provides
a guaranteed supply of up to 111,869 Mcf per day of gas and gives the Company
the option to buy gas from other suppliers to be transported under the firm
transportation capacity if such supplies are available at lower costs. The
initial term of the FS agreement extends through March 31, 2001.
On May 14, 1993, in response to Transco's compliance filing, the FERC
issued an order in Transco's Order No. 636 restructuring proceeding. In said
order, the FERC required, among other things, that Transco unbundle that portion
of its Eminence Storage Field (approximately 3.1 billion cubic feet (Bcf)),
previously reserved for use by Transco in rendering "swing supply" service to
its sales (FS) customers. The FERC also directed that Transco should make its
unbundled Eminence Storage capacity available on a priority basis to its
existing FS customers and South Jersey Gas was allocated 316,177 Mcf of this
storage capacity.
In addition to FS service, South Jersey Gas has a ten-year gas supply
agreement with Vastar Gas Marketing (Vastar - formerly Arco Natural Gas) for
delivery to its service territory by way of Transco FT service.
During the 1992-93 winter season, South Jersey Gas began receiving delivery
of up to 24,700 Mcf per day of gas under a firm transportation agreement that
was entered into with Transco as part of the Texas Gas-CNG Transmission-Transco
project that was developed to provide additional firm pipeline capacity to
deliver gas to the U.S. Northeast under Transco's Rate Schedule FT-NT. The gas
source that is available for transportation on the Transco-CNG Transmission-
Texas Gas pipeline capacity is purchased from Amerada Hess under a 15 year gas
supply agreement.
Additionally, South Jersey Gas has a winter season peaking transportation
service on the Transco system which is available for the period December 1
through the last day of February of each year. South Jersey Gas' maximum daily
entitlement under this service is 2,900 Mcf per day. South Jersey Gas can
transport third party gas via said service and has contracted with Amerada Hess
for a long-term firm gas supply to fill its capacity during each winter season.
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Columbia
As part of its FERC Order No. 636 restructuring, Columbia unbundled its
traditional sales service from its firm transportation service and as such has
eliminated its previous long term sales service under Rate Schedule CDS. South
Jersey Gas previously held a CDS sales agreement with Columbia which provided
for a maximum daily sales entitlement of 33,816 Mcf per day. As a result of
Columbia's restructuring, South Jersey Gas has been assigned an equivalent
33,816 Mcf per day of firm transportation capacity on both Columbia and its
affiliate Columbia Gulf Transmission Company (Columbia Gulf).
As a result of the above, during 1993, South Jersey Gas entered into long-
term gas purchase agreements with Vastar, Texaco Gas Marketing, and Union
Pacific Fuels for a total of 33,816 Mcf of gas per day to fill this firm
pipeline capacity on the Columbia and Columbia Gulf pipeline systems.
Additionally during 1993, 483,092 Mcf of storage capacity previously
rendered to South Jersey Gas under Columbia's Rate Schedule WS was converted to
storage service rendered under Rate Schedule FSS on a one-for-one basis.
On July 31, 1991, Columbia and its parent, Columbia Gas Systems, Inc. filed
for Chapter 11 bankruptcy protection. Columbia has stated to its customers that
it would fulfil all contractual obligations pending reorganization. To date
Columbia has met all contractual obligations and it is anticipated this will be
the case in the future.
On January 18, 1994 Columbia filed a reorganization plan with the U.S.
Bankruptcy Court for the District of Delaware. An order on this filing is still
pending.
CNG
As part of its Order No. 636 restructuring, CNG has abandoned gas sales
service under its Rate Schedule SCQ. South Jersey Gas previously had an SCQ
Service Agreement with CNG which provided for the delivery of 9,662 Mcf per day
to Transco at Leidy, PA for ultimate delivery to the Company during the period
November 16 through March 31 of each winter season. As a result of Order No.
636 CNG has replaced the 9,662 Mcf per day of SCQ sales service with 5,357 Mcf
per day of Firm Transportation (FT) service from various Appalachian aggregation
points located in Pennsylvania and West Virginia and 408,670 Mcf of storage
capacity with 4,305 Mcf per day of storage withdrawal demand in CNG's GSS
Storage Service. During 1993 to facilitate the utilization of these new
services, South Jersey Gas entered into separate gas sales and capacity
management agreements with CNG Gas Services Corporation, a non-jurisdictional
affiliate of CNG. Through these agreements South Jersey Gas has assigned to CNG
Gas Services its pipeline FT and storage entitlements on the CNG pipeline system
for use to provide South Jersey Gas with up to 9,662 Mcf per day of gas during
the winter seasons, November 16 through March 31 of each year.
Peak-Day Supply
South Jersey Gas plans for a winter season peak-day demand on the basis of
an average daily temperature of 5 degrees F. Gas demand on such a design day
was estimated for the 1993-94 winter season to be 357,980 Mcf versus a design
day supply of 400,521 Mcf. On January 19, 1994, South Jersey Gas experienced a
peak-day demand of 365,629 Mcf with an average temperature of 2.68 degrees F.
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Storage Services
In addition to its normal gas suppliers, South Jersey Gas has nine storage
services that are capable of storing 11.7 Bcf of gas and provide a total daily
delivery capacity of 111,607 Mcf. While these storage services do not represent
an additional source of gas, they do provide South Jersey Gas with flexibility
to acquire gas during periods of low demand and store it until it is needed
during winter heating seasons and other times of high demand.
South Jersey Gas has the following contracts for gas storage service:
Contract Term Storage Capacity
1972 - 1994 1,362,980 Mcf
1980 - 1998 4,257,135 Mcf
Year-to-Year 137,813 Mcf
Year-to-Year 207,770 Mcf (1)
1984 - 1994 1,182,609 Mcf
1987 - 2002 500,000 Mcf
1988 - 2008 1,307,400 Mcf
1989 - 2009 1,099,346 Mcf
1990 - 2005 1,705,000 Mcf
(1) Contract is for storage of liquefied natural gas; the amount shown is
natural gas equivalent.
Supplemental Gas Supplies
In 1993, South Jersey Gas injected 371,653 Mcf of vaporized liquefied
natural gas (LNG) into its distribution system from its McKee City, New Jersey
LNG facility. This LNG was obtained through a long-term LNG purchase agreement
with Distrigas of Massachusetts Corporation and from gas liquefaction services
that were provided by Transco and UGI Utilities, Inc.
South Jersey Gas' three propane-air vaporization plants enable it to
augment natural gas supplies during periods of peak demand by vaporizing liquid
propane and mixing the vaporized propane with air to form a gas that is
compatible with natural gas. During 1993, 2,097 Mcf of propane-air gas was
utilized by South Jersey Gas.
Gas Prices
During 1993 South Jersey Gas purchased and had delivered to it
approximately 44.9 Bcf of natural gas for distribution to its customers in New
Jersey. Of this total, 39.3 Bcf was transported on the Transco pipeline system
and 5.6 Bcf was transported on the Columbia pipeline system.
The Company's average cost of gas purchased in 1993 was $3.72 per Mcf,
which unit cost includes all demand and commodity charges.
Energy & Minerals, Inc.
Morie Company
Morie Company obtains substantially all of the materials which it
processes from its owned or leased properties in New Jersey, Tennessee,
Georgia and Alabama. (See Item 2. "Properties.")
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R&T
Raw materials are not significant to the operations of the R&T Companies.
Patents and Franchises
South Jersey Gas holds nonexclusive franchises granted by municipalities
in the seven-county area of southern New Jersey that it serves. No other
natural gas public utility presently serves the territory covered by South
Jersey Gas' franchises. Otherwise, patents, trademarks, licenses, franchises
and concessions are not material to the business of the Company or any of its
subsidiaries.
Seasonal Aspects
South Jersey Gas experiences seasonal fluctuations in sales when selling
fuel for heating purposes. South Jersey Gas meets this seasonal fluctuation
in demand from its firm customers by buying and storing gas during the summer
months, and by drawing from storage and purchasing supplemental supplies
during the heating season. As a result of this seasonality, South Jersey Gas
experiences reductions of revenues and net income during the second and third
quarters of the year.
Morie Company's mining activities in New Jersey and Tennessee are
normally curtailed during the winter months. Sales during the winter months
are made from inventories accumulated during the previous months. Nevertheless,
the volume of sales during the winter is lower than the volume of sales made
during other seasons, particularly the summer, and Morie Company regularly
shows reductions in revenues and net income during the winter season.
The utility and general construction companies of R&T experience lower
construction activity during the winter months as construction activity in the
northeast is usually reduced or curtailed because of colder temperatures.
Working Capital Practices
As previously indicated under Seasonal Aspects, South Jersey Gas buys and
stores natural gas during the summer months. These purchases are financed by
short-term loans which are substantially paid down during the winter months
when gas revenues are higher. Reference is also made to "Liquidity" on pages
20 and 21 of the Company's Annual Report to Shareholders for the year ended
December 31, 1993, which annual report is attached to this report. See Item
14(c)(13).
Customers
Except for R&T, no material part of the Company's business or that of any
of its subsidiaries is dependent upon a single customer or a few customers, the
loss of which would have a material adverse effect on any such business. (See
pages 3 and 5).
Backlog
Backlog is not material to an understanding of the Company's business or
that of any of its subsidiaries.
Government Contracts
No material portion of the business of the Company or any of its
subsidiaries is subject to renegotiation of profits or termination of
contracts or subcontracts at the election of any government.
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Competition
Although the South Jersey Gas franchises are nonexclusive, none of its
service territory is presently served by any other natural gas public utility.
Competition does exist, however, from suppliers of oil, propane and
electricity for residential, commercial and industrial uses. Additional
competition for certain industrial gas sales may result from the implementation
of the "open access" provision of the FERC Order No. 636 which unbundled the
services which are provided by interstate pipeline suppliers; although the full
effect of unbundling is not yet known, South Jersey Gas has dealt with the
unbundled structure since 1991 and believes it has structured its rates to
enable it to compete effectively with any marketer within the service territory
of South Jersey Gas.
Morie Company competes with a number of other sand and gravel mining
companies in the eastern part of the United States.
The operating companies of R&T Group compete with a number of other
utility and general construction companies.
Research
During the last three fiscal years, neither the Company nor any of its
subsidiaries engaged in research activities to any material extent.
Environmental Matters
Information on environmental matters for South Jersey Gas is incorporated
by reference to Note 9 on pages 17 and 18 of the Company's Annual Report to
Shareholders for the year ended December 31, 1993, which Annual Report is
attached to this report. See Item 14(c)(13).
EMI and its subsidiaries are subject to, and have a corporate policy of
compliance with, legislation and regulation by federal, state and local
authorities with regard to air and water quality control, and other
environmental considerations. Expenditures for environmental purposes are
not expected to materially affect future operations or earnings.
At December 31, 1993, Morie Company had an accrued land reclamation
liability of $971,000 for lands currently being mined. Morie Company believes
that it is in substantial compliance with all applicable environmental laws
and regulations.
Employees
The Company and its subsidiaries had a total of 1,005 employees as of
December 31, 1993.
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Financial Information About Foreign and Domestic Operations and Export Sales
The Company has no foreign operations and export sales have not been a
significant part of the Company's business.
Item 2. Properties
The principal property of South Jersey Gas consists of its gas
transmission and distribution systems that include mains, service connections
and meters. The transmission facilities carry the gas from the connections
with Transco and Columbia to South Jersey Gas' distribution systems for
delivery to customers. As of December 31, 1993, there were approximately 335
miles of mains in the transmission systems and 4,407 miles of mains in the
distribution systems.
South Jersey Gas owns office and service buildings, including its
corporate headquarters, at eight locations in the territory, a liquefied
natural gas storage and vaporization facility, and three propane-air
vaporization plants. Also, South Jersey Gas owns a bus parking lot in
Atlantic City, N.J.
As of December 31, 1993, the South Jersey Gas utility plant had a gross
book value of $473,066,666 and a net book value, after accumulated
depreciation, of $346,344,340. In 1993, $33,367,803 was spent on additions to
utility plant and there were retirements of property having an aggregate gross
book cost of $2,583,711. Construction expenditures for 1994 are currently
expected to approximate $38.0 million.
Virtually all of the South Jersey Gas transmission pipeline, distribution
mains and service connections are in streets or highways or on the property of
others. The South Jersey Gas transmission and distribution systems are
maintained under franchises or permits or rights-of-way, many of which are
perpetual. The South Jersey Gas properties (other than property specifically
excluded) are subject to a lien of mortgage under which its first mortgage bonds
are outstanding. South Jersey Gas' properties are well-maintained and in good
operating condition .
EMI owns two properties in Atlantic City, N.J., which include commercial
space that is being rented to others. EMI also owns and rents two commercial
properties in Millville, N.J., one of which is rented to Morie Company.
Morie Company owns ten plants, six of which are located in New Jersey,
two in Tennessee, one in Georgia and one in Alabama. The Morie Company owns
approximately 5,800 acres of land and leases approximately 5,100 acres of
land. The combined acreage includes approximately 1,400 acres of mineable
reserves. The mineral leases typically grant the right to mine sand and
gravel for an initial period with several renewal options. The mineral leases
typically provide for a royalty per ton mined and sold. Morie Company estimates
its proven reserves of sand at approximately 129,000,000 tons of raw aggregates
which may be profitably extracted and processed, based on present methods of
operation and prevailing prices. Reserves have been estimated on the basis of
laboratory and field analyses of samples produced by techniques such as split
spoon, core drillings and excavating experience on the sites.
R&T operating companies share land and buildings at two principal
locations used for administrative operations and housing facilities for
vehicles, heavy equipment and supplies.
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The Company owns approximately 139 acres of land in Folsom, New Jersey,
approximately 9.29 acres of land in Linwood, New Jersey, and an office building
in Chester, Pennsylvania.
Item 3. Legal Proceedings
The Company is not aware of any pending or potential legal proceedings
that it believes will have a material effect on its operations or consolidated
financial position. Reference is made to Notes 9 and 10 on pages 17 and 18 of
the Company's Annual Report to Shareholders for the year ended December 31,
1993, which Annual Report is attached to this report. See Item 14(c)(13).
Item 4. Submission Of Matters To A Vote of Security Holders
No matter was submitted to a vote of security holders during the fourth
quarter of the 1993 fiscal year.
Item 4-A. Executive Officers (Other Than Directors) of the Registrant
Name Age Positions with the Company
Gerald S. Levitt 49 Vice President
George L. Baulig 51 Secretary and
Assistant Treasurer
Richard B. Tonielli 54 Treasurer
There is no family relationship among the officers of the registrant.
Gerald S. Levitt was elected Vice President of the Company and Senior
Vice President of South Jersey Gas effective November 1, 1983. He has served
as Chief Financial Officer of the Company since October 1, 1989. He was
elected Executive Vice President of South Jersey Gas on November 1, 1986. Mr.
Levitt was Vice President of EMI from November 1983 to November 1986. Mr.
Levitt is also a member of the Board of Directors of Morie Company.
Richard B. Tonielli was elected Treasurer of the Company effective
September 1981. He has served as Senior Vice President, Finance since April 1,
1988 and he has served in other officer positions of South Jersey Gas since
1983. Mr. Tonielli serves as Vice President and Treasurer of EMI (September
1981 to date) and Treasurer of R&T Group, Inc. (October 1989 to date).
George L. Baulig was elected Secretary and Assistant Treasurer of the
Company, South Jersey Gas and EMI effective November 1, 1980. Mr. Baulig is
also Secretary of R&T Group, Inc. (October 1989 to date), South Jersey Energy
Company and Morie Company.
Executive officers of the Company are elected annually and serve at the
pleasure of the Board of Directors.
- 12 -
<PAGE>
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters
Information required by this Item is incorporated by reference to Note 6
on page 17 and the bottom of page 22 of the Company's Annual Report to
Shareholders for the year ended December 31, 1993, which Annual Report is
attached to this report. See Item 14(c)(13).
Item 6. Selected Financial Data
Information required by this Item is incorporated by reference to page 1
of the Company's Annual Report to Shareholders for the year ended December 31,
1993, which Annual Report is attached to this report. See Item 14(c)(13).
Item 7. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Information required by this Item is incorporated by reference to pages
19, 20 and 21 of the Company's Annual Report to Shareholders for the year ended
December 31, 1993, which Annual Report is attached to this report. See Item
14(c)(13).
Item 8. Financial Statements and Supplementary Data
Information required by this Item is incorporated by reference to pages
10 through 19 and page 22 of the Company's Annual Report to Shareholders for
the year ended December 31, 1993, which Annual Report is attached to this
report. See Item 14(c)(13).
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures
None
- 13 -
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Information required by this Item relating to the directors of the
Company is incorporated by reference to pages 2 through 5 of the Company's
definitive Proxy Statement, dated March 9, 1994, filed with the Commission,
File number 1-6364, in connection with the Company's 1994 Annual Meeting of
Shareholders. Information required by this Item relating to the executive
officers (other than Directors) of the Company is set forth in Item 4-A of
this report.
Item 11. Executive Compensation
Information required by this Item is incorporated by reference to pages
5 through 11 (except for the Report of the Compensation/Pension Committee on
page 9 and the Stock Performance Graph on page 10, which are not so
incorporated) of the Company's definitive Proxy Statement, dated March 9, 1994,
filed with the Commission, File number 1-6364, in connection with the Company's
1994 Annual Meeting of Shareholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information required by this Item is incorporated by reference to pages
2 through 5 of the Company's definitive Proxy Statement, dated March 9, 1994,
filed with the Commission, File number 1-6364, in connection with the
Company's 1994 Annual Meeting of Shareholders.
Item 13. Certain Relationships and Related Transactions
Information required by this Item is incorporated by reference to
page 6 of the Company's definitive Proxy Statement, dated March 9, 1994,
filed with the Commission, File number 1-6364, in connection with the
Company's 1994 Annual Meeting of Shareholders.
- 14 -
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Listed below are all financial statements and schedules filed as part
of this report:
1 - The consolidated financial statements and notes to consolidated
financial statements together with the report thereon of Deloitte
& Touche, dated February 16, 1994, are incorporated herein by
reference to pages 10 through 19 of the Company's Annual Report to
Shareholders
for the year ended December 31, 1993, which Annual Report is
attached to this report. See Item 14(c)(13).
2 - Supplementary Financial Information Page(s)
Information regarding selected quarterly financial
data is incorporated herein by reference to page 22 of
the Company's Annual Report to Shareholders for the year
ended December 31, 1993, which Annual Report is
attached to this report. See Item 14(c)(13).
Supplemental Schedules as of December 31, 1993, 1992 and 1991
and for the three years ended December 31, 1993, 1992, and 1991:
The Independent Auditors' Report of Deloitte & Touche,
Auditors of the Company 25
Schedule V - Property, Plant and Equipment 26-34
Schedule VI - Accumulated Depreciation,
Depletion and Amortization of Property,
Plant and Equipment 35-43
Schedule VIII - Valuation and Qualifying Accounts 44
Schedule IX - Short-Term Borrowings 45
Schedule X - Supplementary Income Statement Information 46
(All Schedules, other than those listed above, are
omitted because the information called for is
included in the financial statements filed or
because they are not applicable or are not
required. Separate financial statements are
not presented because all consolidated subsidiaries
are wholly-owned.)
3 - See Item 14(c)(13)
(b) No reports on Form 8-K have been filed by the Company during the quarter
ended December 31, 1993.
- 15 -
<PAGE>
(c) List of Exhibits (Exhibit Number is in Accordance with the Exhibit Table
in Item 601 of Regulation S-K)
Exhibit Incorporated by Reference From
Number Exhibit Reference Document
(3)(a)(i) Certificate of Incorporation (4)(a) Form S-2
of the Company, as amended (2-91515)
through April 19, 1984.
(3)(a)(ii) Amendment to Certificate of (4)(e)(1) Form S-3
Incorporation relating to (33-1320)
two-for-one stock split
effective as of April 28,
1987.
(3)(a)(iii) Amendment to Certificate of (4)(e)(2) Form S-3
Incorporation relating to (33-1320)
director and officer
liability.
(3)(b) Bylaws of the Company as (3)(c) Form 10-K
amended and restated for 1990
through October 1, 1990. (1-6364)
(4)(a) Form of Stock Certificate (4)(a) Form 10-K
for common stock. for 1985
(1-6364)
(4)(b)(i) First Mortgage Indenture (4)(b)(i) Form 10-K
dated October 1, 1947 for 1987
(1-6364)
(4)(b)(vi) Form of South Jersey Gas (4)(b)(vi) Form 10-K
Company First Mortgage for 1980
Bond, 7-7/8% Series due 1994. (1-6364)
(4)(b)(vii) Form of South Jersey Gas (4)(b)(vii) Form 10-K
Company First Mortgage for 1980
Bond, 8-1/4% Series due 1996. (1-6364)
(4)(b)(viii) Form of South Jersey Gas (4)(b)(viii) Form 10-K
Company First Mortgage for 1980
Bond, 8-1/4% Series due 1998. (1-6364)
(4)(b)(x) Twelfth Supplemental Inden- 5(b) Form S-7
ture, dated as of June 1, (2-68038)
1980.
- 16 -
<PAGE>
Exhibit Incorporated by Reference From
Number Exhibit Reference Document
(4)(b)(xii) Fifteenth Supplemental (4)(b)(xiii) Form 10-K
Indenture, dated July for 1986
1, 1986, 9.2% Series (1-6364)
due 1998.
(4)(b)(xiv) Sixteenth Supplemental (4)(b)(xv) Form 10-Q
Indenture dated as of for quarter
April 1, 1988, 10-1/4% ended
Series due 2008. March 31,
1988 (1-6364)
(4)(b)(xv) Seventeenth Supplemental (4)(b)(xv) Form 10-K
Indenture dated as of for 1989
May 1, 1989. (1-6364)
(4)(b)(xvi) Eighteenth Supplemental (4)(e) Form S-3
Indenture, dated as of (33-36581)
March 1, 1990.
(4)(b)(xvii) Nineteenth Supplemental (4)(b)(xvii) Form 10-K
Indenture, dated as of for 1992
April 1, 1992. (1-6364)
(4)(b)(xviii) Twentieth Supplemental
Indenture, dated as of
June 1, 1993.
(filed herewith)
(9) None
(10)(d) Gas storage agreement (GSS)
between South Jersey Gas
Company and Transco,
dated October 1, 1993.
(filed herewith)
(10)(e) Gas storage agreement (S-2) (5)(h) Form S-7
between South Jersey Gas (2-56223)
Company and Transco,
dated December 16, 1953.
(10)(f) Gas storage agreement (LG-A) (5)(f) Form S-7
between South Jersey Gas (2-56223)
Company and Transco,
dated June 3, 1974.
- 17 -
<PAGE>
Exhibit Incorporated by Reference From
Number Exhibit Reference Document
(10)(h) Gas storage agreement (WSS) (10)(h) Form 10-K
between South Jersey Gas for 1991
Company and Transco, dated (1-6364)
August 1, 1991.
(10)(i) Gas storage agreement (LSS)
between South Jersey Gas
Company and Transco,
dated October 1, 1993.
(filed herewith)
(10)(i)(a) Gas storage agreement (10)(i)(a) Form 10-K
(SS-1) between South Jersey for 1988
Gas Company and Transco, (1-6364)
dated May 10, 1987 (effective
April 1, 1988).
(10)(i)(b) Gas storage agreement
(ESS) between South Jersey
Gas Company and Transco,
dated November 1, 1993.
(filed herewith)
(10)(i)(c) Gas transportation service (10)(i)(c) Form 10-K
agreement between South for 1989
Jersey Gas Company and (1-6364)
Transco, dated April 1,
1986.
(10)(i)(e) Service agreement (FS) (10)(i)(e) Form 10-K
between South Jersey Gas For 1991
Company and Transco, dated (1-6364)
August 1, 1991.
(10)(i)(f) Service agreement (FT) (10)(i)(f) Form 10-K
between South Jersey Gas for 1991
Company and Transco, dated (1-6364)
February 1, 1992.
(10)(i)(g) Service agreement (10)(i)(g) Form 10-K
(Incremental FT) for 1991
between South Jersey Gas Company (1-6364)
and Transco, dated August 1,
1991.
(10)(i)(i) Gas storage agreement (SS-2) (10)(i)(i) Form 10-K
between South Jersey Gas for 1991
company and Transco, dated (1-6364)
July 25, 1990.
- 18 -
<PAGE>
Exhibit Incorporated by Reference From
Number Exhibit Reference Document
(10)(i)(j) Gas Transportation Service
Agreement between South
Jersey Gas Company and
Transco, dated December 20,
1991.
(filed herewith)
(10)(i)(k) Amendment to Gas Transportation
Agreement, dated December 20,
1991 between South Jersey Gas
Company and Transco, dated
October 5, 1993.
(filed herewith)
(10)(j)(a) Gas Transportation Service (10)(j)(a) Form 10-K
Agreement (FTS) between South for 1989
Jersey Gas Company and (1-6364)
Equitable Gas Company,
dated November 1, 1986.
(10)(k)(h) Gas Transportation Service
Agreement (TF) between
South Jersey Gas Company
CNG Transmission Corporation
dated October 1, 1993.
(filed herewith)
(10)(k)(i) Gas purchase agreement (10)(k)(i) Form 10-K
between South Jersey Gas for 1989
Company and ARCO Gas Market- (1-6364)
ing, Inc., dated March 5, 1990.
(10)(k)(k) Gas Transportation Service
Agreement (FTS 1) between
South Jersey Gas Company and
Columbia Gulf Transmission
Company, dated November 1,
1993.
(filed herewith)
(10)(k)(l) Assignment Agreement
capacity and service rights
(FTS-2) between South Jersey
Gas Company and Columbia
Gulf Transmission Company,
dated November 1, 1993.
(filed herewith)
- 19 -
<PAGE>
Exhibit Incorporated by Reference From
Number Exhibit Reference Document
(10)(k)(m) FTS Service Agreement
No. 39556 between South
Jersey Gas Company and
Columbia Gas Transmission
Corporation, dated
November 1, 1993.
(filed herewith)
(10)(k)(n) FTS Service Agreement
No. 38099 between South
Jersey Gas Company and
Columbia Gas Transmission
Corporation, dated
November 1, 1993.
(filed herewith)
(10)(k)(o) NTS Service Agreement
No. 39305 between South
Jersey Gas Company and
Columbia Gas Transmission
Corporation, dated
November 1, 1993.
(filed herewith)
(10)(k)(p) FSS Service Agreement
No. 38130 between South
Jersey Gas Company and
Columbia Gas Transmission
Corporation, dated
November 1, 1993.
(filed herewith)
(10)(k)(q) SST Service Agreement
No. 38086 between South
Jersey Gas Company and
Columbia Gas Transmission
Corporation, dated
November 1, 1993.
(filed herewith)
(10)(l) Deferred Payment Plan for (10)(l) Form 10-K
Directors of South Jersey for 1986
Industries, Inc., South (1-6364)
Jersey Gas Company and
Energy & Minerals, Inc.
as amended and restated
August 22, 1986.
- 20 -
<PAGE>
Exhibit Incorporated by Reference From
Number Exhibit Reference Document
(10)(l)(a) Form of Deferred Compen- (10)(j)(a) Form 10-K
sation Agreement between for 1980
the Company and/or a sub- (1-6364)
sidiary and eleven of its
officers.
(10)(l)(b) Schedule of Deferred Com- (10)(l)(b) Form 10-K
pensation Agreements. for 1992
(1-6364)
(10)(l)(c) Supplemental Executive (10)(l)(c) Form 10-K
Retirement Program, as for 1992
amended and restated ef- (1-6364)
fective September 1, 1991,
and form of Agreement
between certain Company
or subsidiary Company officers.
(10)(l)(d) Form of Officer Employment (10)(i)(l) Form 10-K
Agreement between certain for 1991
officers and either the Company (1-6364)
or its Subsidiaries.
(10)(l)(e) Schedule of Officer (10)(i)(e) Form 10-K
Employment Agreements. for 1991
(1-6364)
(10)(l)(f) Officer Severance Benefit (10)(l)(g) Form 10-K
Program for all officers. for 1985
(1-6364)
(10)(l)(g) Discretionary Incentive (10(l)(h) Form 10-K
Bonus Program for all for 1985
officers and management (1-6364)
employees.
(10)(l)(h) The 1987 Stock Option and (10)(l)(i) Form 10-K
Stock Appreciation Rights for 1987
Plan including Form of (1-6364)
Agreement.
(10)(p) Retirement Plan for Non- (10)(p) Form 10-K
employee Members of the for 1988
Board of Directors. (1-6364)
(10)(q) Executive Employment (10)(q) Form 10-K
Agreement dated August 1, for 1991
1991 between the Company (1-6364)
and William F. Ryan, President
and Chief Executive Officer.
- 21 -
<PAGE>
Exhibit Incorporated by Reference From
Number Exhibit Reference Document
(11) Not Applicable
(12) Calculation of Ratio of
Earnings to Fixed Charges
(Before Federal Income
Taxes) (filed herewith).
(13) The Annual Report to
Shareholders of the Company
for the year ended December 31,
1993 is filed as an exhibit
hereto solely to the extent
portions are specifically
incorporated by reference
herein.
(16) Not Applicable
(18) Not Applicable
(21) Subsidiaries of the Registrant
(filed herewith).
(22) None
(23) Independent Auditors'
Consent (filed herewith)
(24) Power of Attorney (filed
herewith).
(99) None
- 22 -
<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.
SOUTH JERSEY INDUSTRIES, INC.
BY /s/ G. S. Levitt
G. S. Levitt, Vice President
Date March 23, 1994
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 and on the dates indicated.
Signature Title Date
/s/ William F. Ryan President and Director March 23, 1994
(William F. Ryan) (Principal Executive Officer)
/s/ G. S. Levitt Vice President March 23, 1994
(G. S. Levitt) (Principal Financial Officer)
/s/ Richard B. Tonielli Treasurer (Principal March 23, 1994
(Richard B. Tonielli) Accounting Officer)
/s/ Frank L. Bradley, Jr. Director March 23, 1994
(Frank L. Bradley, Jr.)
/s/ Richard L. Dunham Director March 23, 1994
(Richard L. Dunham)
/s/ W. Cary Edwards Director March 23, 1994
(W. Cary Edwards)
/s/ Thomas L. Glenn, Jr. Director March 23, 1994
(Thomas L. Glenn, Jr.)
/s/ Vincent E. Hoyer Director March 23, 1994
(Vincent E. Hoyer)
/s/ Herman D. James Director March 23, 1994
(Herman D. James)
/s/ Marilyn Ware Lewis Director March 23, 1994
(Marilyn Ware Lewis)
/s/ Clarence D. McCormick Director March 23, 1994
(Clarence D. McCormick)
- 23 -
<PAGE>
/s/ Peter M. Mitchell Director March 23, 1994
(Peter M. Mitchell)
/s/ Jackson Neall Director March 23, 1994
(Jackson Neall)
/s/ Shirli M. Vioni Director March 23, 1994
(Shirli M. Vioni)
/s/ Frederick A. Westphal Director March 23, 1994
(Frederick A. Westphal)
- 24 -
<PAGE>
INDEPENDENT AUDITORS' REPORT
South Jersey Industries, Inc.:
We have audited the consolidated financial statements of South Jersey
Industries,
Inc. and its subsidiaries as of December 31, 1993 and 1992 and for each of the
three years in the period ended December 31, 1993 and have issued our report
thereon dated February 16, 1994, which report includes an explanatory paragraph
as to the Company changing its method of accounting for income taxes, effective
January 1, 1993, to conform with Statement of Financial Standards No. 109 and
its method of accounting for postretirement benefits other than pensions,
effective January 1, 1993, to conform with Statement of Financial Accounting
Standards No. 106; such financial statements and report are included in your
1993 Annual Report to Shareholders and are incorporated herein by reference.
Our audits also included the financial statement schedules of South Jersey
Industries, Inc. and its subsidiaries, listed in Item 14. These financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
DELOITTE & TOUCHE
Cherry Hill, New Jersey
February 16, 1994
- 25 -
<PAGE>
<TABLE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT*
YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -----------------------------------------------------------------------------------------------------------------------
Balance at Other Changes Balance at
Beginning Additions Add (Deduct)- End
Classification of Period At Cost Retirements Describe** of Period
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
South Jersey Industries, Inc.
Intangible $ 24,560 $ 0 $ 0 $ 0 $ 24,560
Land 1,306,447 0 400 0 1,306,047
Plant & Equipment 323,154 2,650 8,229 0 317,575
------------- ------------- ------------- ------------- ---------------
Total 1,654,161 2,650 8,629 0 1,648,182
------------- ------------- ------------- ------------- ---------------
South Jersey Gas Company
Gas Plant in Service:
Intangible 2,480,904 0 0 (74,780) 2,406,124
Production 925,011 69,706 2,116 (694) 991,907
Storage 7,603,337 106,911 51,675 22,816 7,681,389
Transmission 50,725,167 2,000,102 434,569 690,841 52,981,541
Distribution 352,309,202 22,261,237 1,329,523 5,028,218 378,269,134
General 25,884,381 6,454,347 765,828 (5,741,179) 25,831,721
------------- ------------- ------------- ------------- ---------------
439,928,002 30,892,303 2,583,711 (74,778) 468,161,816
Construction Work in Progress 2,429,350 2,475,500 0 0 4,904,850
------------- ------------- ------------- ------------- ---------------
Total Gas Plant 442,357,352 33,367,803 2,583,711 (74,778) 473,066,666
Other Property:
Land 4,702,753 301 0 0 4,703,054
Building & Equipment 198,581 0 0 (107,806) 90,775
------------- ------------- ------------- ------------- ---------------
Total 447,258,686 33,368,104 2,583,711 (182,584) 477,860,495
------------- ------------- ------------- ------------- ---------------
* See Note 1 to Consolidated Financial Statements on page 14 of the 1993 Annual Report to Shareholders for
disclosure of depreciation methods.
** Amortization of intangibles, property transfers, sales and adjustments.
- 26 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT*
YEAR ENDED DECEMBER 31, 1993
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -----------------------------------------------------------------------------------------------------------------------
Balance at Other Changes Balance at
Beginning Additions Add (Deduct)- End
Classification of Period At Cost Retirements Describe** of Period
- -----------------------------------------------------------------------------------------------------------------------
South Jersey Energy Company
Intangible $ 219 $ 0 $ 0 $ 0 $ 219
Plant & Equipment 13,974 0 0 0 13,974
------------- ------------- ------------- ------------- ---------------
Total 14,193 0 0 0 14,193
------------- ------------- ------------- ------------- ---------------
Energy & Minerals, Inc.
Land 1,047,163 156,000 0 99,651 1,302,814
Plant & Equipment 451,265 0 152,437 0 298,828
------------- ------------- ------------- ------------- ---------------
Total 1,498,428 156,000 152,437 99,651 1,601,642
------------- ------------- ------------- ------------- ---------------
The Morie Company, Inc.
Land & Mineral Rights 4,601,808 12,385 688 (10,600) 4,602,905
Plant & Equipment 37,798,618 1,761,963 608,439 0 38,952,142
------------- ------------- ------------- ------------- ---------------
Total 42,400,426 1,774,348 609,127 (10,600) 43,555,047
------------- ------------- ------------- ------------- ---------------
S. W. Downer, Jr. Company
Land 168,000 20,712 0 0 188,712
Building & Equipment 1,946,898 198,001 40,110 0 2,104,789
------------- ------------- ------------- ------------- ---------------
Total 2,114,898 218,713 40,110 0 2,293,501
------------- ------------- ------------- ------------- ---------------
* See Note 1 to Consolidated Financial Statements on page 14 of the 1993 Annual Report to Shareholders for
disclosure of depreciation methods.
** Amortization of intangibles, property transfers, sales and adjustments.
- 27 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT*
YEAR ENDED DECEMBER 31, 1993
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -----------------------------------------------------------------------------------------------------------------------
Balance at Other Changes Balance at
Beginning Additions Add (Deduct)- End
Classification of Period At Cost Retirements Describe** of Period
- -----------------------------------------------------------------------------------------------------------------------
R and T Castellini Company
Land $ 50,698 $ 2,850 $ 0 $ 0 $ 53,548
Building & Equipment 2,105,027 132,563 11,500 0 2,226,090
------------- ------------- ------------- ------------- ---------------
Total 2,155,725 135,413 11,500 0 2,279,638
------------- ------------- ------------- ------------- ---------------
Onshore Construction
Equipment 1,767,781 17,732 0 (24) 1,785,489
------------- ------------- ------------- ------------- ---------------
Cape Atlantic Crane
Equipment 512,281 0 20,000 0 492,281
------------- ------------- ------------- ------------- ---------------
R & T Castellini Construction Company
Equipment 0 642,446 0 0 642,446
------------- ------------- ------------- ------------- ---------------
Total South Jersey Industries, Inc.
Consolidated $499,376,579 $ 36,315,406 $ 3,425,514 $ (93,557) $ 532,172,914
============= ============= ============= ============= ===============
* See Note 1 to Consolidated Financial Statements on page 14 of the 1993 Annual Report to Shareholders for
disclosure of depreciation methods.
** Amortization of intangibles, property transfers, sales and adjustments.
- 28 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT*
YEAR ENDED DECEMBER 31, 1992
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -----------------------------------------------------------------------------------------------------------------------
Balance at Other Changes Balance at
Beginning Additions Add (Deduct)- End
Classification of Period At Cost Retirements Describe** of Period
- -----------------------------------------------------------------------------------------------------------------------
South Jersey Industries, Inc.
Intangible $ 24,560 $ 0 $ 0 $ 0 $ 24,560
Land 1,249,299 57,548 400 0 1,306,447
Plant & Equipment 301,146 22,008 0 0 323,154
------------- ------------- ------------- ------------- ---------------
Total 1,575,005 79,556 400 0 1,654,161
------------- ------------- ------------- ------------- ---------------
South Jersey Gas Company
Gas Plant in Service:
Intangible 2,555,684 0 0 (74,780) 2,480,904
Production 918,031 6,980 0 0 925,011
Storage 7,596,869 6,162 1,749 2,055 7,603,337
Transmission 47,702,281 2,995,426 35,803 63,263 50,725,167
Distribution 328,001,148 21,749,763 1,541,870 4,100,161 352,309,202
General 23,899,932 6,664,258 515,330 (4,164,479) 25,884,381
------------- ------------- ------------- ------------- ---------------
410,673,945 31,422,589 2,094,752 (73,780) 439,928,002
Construction Work in Progress 4,198,180 (1,768,830) 0 0 2,429,350
------------- ------------- ------------- ------------- ---------------
Total Gas Plant 414,872,125 29,653,759 2,094,752 (73,780) 442,357,352
Other Property:
Land 4,693,408 9,345 0 0 4,702,753
Building & Equipment 198,581 0 0 0 198,581
------------- ------------- ------------- ------------- ---------------
Total 419,764,114 29,663,104 2,094,752 (73,780) 447,258,686
------------- ------------- ------------- ------------- ---------------
* See Note 1 to Consolidated Financial Statements on page 16 of the 1992 Annual Report to Shareholders for
disclosure of depreciation methods.
** Amortization of intangibles, property transfers, sales and adjustments.
- 29 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT*
YEAR ENDED DECEMBER 31, 1992
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -----------------------------------------------------------------------------------------------------------------------
Balance at Other Changes Balance at
Beginning Additions Add (Deduct)- End
Classification of Period At Cost Retirements Describe** of Period
- -----------------------------------------------------------------------------------------------------------------------
South Jersey Energy Company
Intangible $ 219 $ 0 $ 0 $ 0 $ 219
Plant & Equipment 13,746 228 0 0 13,974
------------- ------------- ------------- ------------- ---------------
Total 13,965 228 0 0 14,193
------------- ------------- ------------- ------------- ---------------
Energy & Minerals, Inc.
Land 1,047,163 0 0 0 1,047,163
Intangible 2,268 0 0 (2,268) 0
Plant & Equipment 451,265 0 0 0 451,265
------------- ------------- ------------- ------------- ---------------
Total 1,500,696 0 0 (2,268) 1,498,428
------------- ------------- ------------- ------------- ---------------
The Morie Company, Inc.
Intangible 8,920 0 0 (8,920) 0
Land & Mineral Rights 4,559,753 52,655 0 (10,600) 4,601,808
Plant & Equipment 37,034,409 1,245,171 480,962 0 37,798,618
------------- ------------- ------------- ------------- ---------------
Total 41,603,082 1,297,826 480,962 (19,520) 42,400,426
------------- ------------- ------------- ------------- ---------------
* See Note 1 to Consolidated Financial Statements on page 16 of the 1992 Annual Report to Shareholders for
disclosure of depreciation methods.
** Amortization of intangibles, property transfers, sales and adjustments.
- 30 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT*
YEAR ENDED DECEMBER 31, 1992
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -----------------------------------------------------------------------------------------------------------------------
Balance at Other Changes Balance at
Beginning Additions Add (Deduct)- End
Classification of Period At Cost Retirements Describe** of Period
- -----------------------------------------------------------------------------------------------------------------------
S. W. Downer, Jr. Company
Land $ 168,000 $ 0 $ 0 $ 0 $ 168,000
Building & Equipment 1,865,743 86,105 9,000 4,050 1,946,898
------------- ------------- ------------- ------------- ---------------
Total 2,033,743 86,105 9,000 4,050 2,114,898
------------- ------------- ------------- ------------- ---------------
R and T Castellini Company
Land 28,259 22,439 0 0 50,698
Building & Equipment 2,013,352 109,175 17,500 0 2,105,027
------------- ------------- ------------- ------------- ---------------
Total 2,041,611 131,614 17,500 0 2,155,725
------------- ------------- ------------- ------------- ---------------
Onshore Construction
Equipment 1,338,307 429,474 0 0 1,767,781
------------- ------------- ------------- ------------- ---------------
Cape Atlantic Crane
Equipment 502,318 9,963 0 0 512,281
------------- ------------- ------------- ------------- ---------------
Total South Jersey Industries, Inc.
Consolidated $470,372,841 $ 31,697,870 $ 2,602,614 $ (91,518) $ 499,376,579
============= ============= ============= ============= ===============
* See Note 1 to Consolidated Financial Statements on page 16 of the 1992 Annual Report to Shareholders for
disclosure of depreciation methods.
** Amortization of intangibles, property transfers, sales and adjustments.
- 31 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT*
YEAR ENDED DECEMBER 31, 1991
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -----------------------------------------------------------------------------------------------------------------------
Balance at Other Changes Balance at
Beginning Additions Add (Deduct)- End
Classification of Period At Cost Retirements Describe** of Period
- -----------------------------------------------------------------------------------------------------------------------
South Jersey Industries, Inc.
Intangible $ 24,560 $ 0 $ 0 $ 0 $ 24,560
Land 1,215,916 33,783 400 0 1,249,299
Plant & Equipment 298,806 2,340 0 0 301,146
------------- ------------- ------------- ------------- ---------------
Total 1,539,282 36,123 400 0 1,575,005
------------- ------------- ------------- ------------- ---------------
South Jersey Gas Company
Gas Plant in Service:
Intangible 2,630,464 0 0 (74,780) 2,555,684
Production 880,935 23,114 1,000 14,982 918,031
Storage 7,588,188 14,165 5,890 406 7,596,869
Transmission 44,243,711 2,790,804 196 667,962 47,702,281
Distribution 302,692,199 22,713,428 1,022,232 3,617,753 328,001,148
General 22,879,981 5,786,045 479,973 (4,286,121) 23,899,932
------------- ------------- ------------- ------------- ---------------
380,915,478 31,327,556 1,509,291 (59,798) 410,673,945
Construction Work in Progress 3,303,796 894,384 0 0 4,198,180
------------- ------------- ------------- ------------- ---------------
Total Gas Plant 384,219,274 32,221,940 1,509,291 (59,798) 414,872,125
Other Property:
Land 4,689,971 3,437 0 0 4,693,408
Building & Equipment 198,581 0 0 0 198,581
------------- ------------- ------------- ------------- ---------------
Total 389,107,826 32,225,377 1,509,291 (59,798) 419,764,114
------------- ------------- ------------- ------------- ---------------
* See Note 1 to Consolidated Financial Statements on page 16 of the 1991 Annual Report to Shareholders for
disclosure of depreciation methods.
** Amortization of intangibles, property transfers, sales and adjustments.
- 32 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT*
YEAR ENDED DECEMBER 31, 1991
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -----------------------------------------------------------------------------------------------------------------------
Balance at Other Changes Balance at
Beginning Additions Add (Deduct)- End
Classification of Period At Cost Retirements Describe** of Period
- -----------------------------------------------------------------------------------------------------------------------
South Jersey Energy Company
Intangible $ 219 $ 0 $ 0 $ 0 $ 219
Plant & Equipment 13,746 0 0 0 13,746
------------- ------------- ------------- ------------- ---------------
Total 13,965 0 0 0 13,965
------------- ------------- ------------- ------------- ---------------
Energy & Minerals, Inc.
Land 1,045,631 1,532 0 0 1,047,163
Intangible 2,268 0 0 0 2,268
Plant & Equipment 439,180 37,505 25,420 0 451,265
------------- ------------- ------------- ------------- ---------------
Total 1,487,079 39,037 25,420 0 1,500,696
------------- ------------- ------------- ------------- ---------------
The Morie Company, Inc.
Intangible 9,784 0 0 (864) 8,920
Land & Mineral Rights 4,536,302 55,921 21,870 (10,600) 4,559,753
Plant & Equipment 34,688,247 2,646,520 300,358 0 37,034,409
------------- ------------- ------------- ------------- ---------------
Total 39,234,333 2,702,441 322,228 (11,464) 41,603,082
------------- ------------- ------------- ------------- ---------------
* See Note 1 to Consolidated Financial Statements on page 16 of the 1991 Annual Report to Shareholders for
disclosure of depreciation methods.
** Amortization of intangibles, property transfers, sales and adjustments.
- 33 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT*
YEAR ENDED DECEMBER 31, 1991
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -----------------------------------------------------------------------------------------------------------------------
Balance at Other Changes Balance at
Beginning Additions Add (Deduct)- End
Classification of Period At Cost Retirements Describe** of Period
- -----------------------------------------------------------------------------------------------------------------------
S. W. Downer, Jr. Company
Land $ 168,000 $ 0 $ 0 $ 0 $ 168,000
Building & Equipment 1,792,563 84,013 15,000 4,167 1,865,743
------------- ------------- ------------- ------------- ---------------
Total 1,960,563 84,013 15,000 4,167 2,033,743
------------- ------------- ------------- ------------- ---------------
R and T Castellini Company
Land 28,259 0 0 0 28,259
Building & Equipment 1,983,347 36,005 6,000 0 2,013,352
------------- ------------- ------------- ------------- ---------------
Total 2,011,606 36,005 6,000 0 2,041,611
------------- ------------- ------------- ------------- ---------------
Onshore Construction
Equipment 1,232,970 105,337 0 0 1,338,307
------------- ------------- ------------- ------------- ---------------
Cape Atlantic Crane
Equipment 501,495 823 0 0 502,318
------------- ------------- ------------- ------------- ---------------
Total South Jersey Industries, Inc.
Consolidated $437,089,119 $ 35,229,156 $ 1,878,339 $ (67,095) $ 470,372,841
============= ============= ============= ============= ===============
* See Note 1 to Consolidated Financial Statements on page 16 of the 1991 Annual Report to Shareholders for
disclosure of depreciation methods.
** Amortization of intangibles, property transfers, sales and adjustments.
- 34 -
</TABLE>
<PAGE>
<TABLE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1993
<CAPTION>
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -------------------------------------------------------------------------------------------------------------------------
Balance at Additions Charged Other Changes Balance at
Beginning to Costs and Add (Deduct)- End
Classification of Period Expenses Retirements Describe* of Period
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
South Jersey Industries, Inc.
Plant & Equipment $ 176,345 $ 29,758 $ 0 $ 0 $ 206,103
------------- ------------- ------------- ------------- ---------------
South Jersey Gas Company **
Gas Plant in Service:
Production 77,925 46,172 2,116 919 122,900
Storage 4,271,279 332,210 51,675 (5,090) 4,546,724
Transmission 16,787,280 1,463,103 434,569 (1,962) 17,813,852
Distribution 89,126,837 9,754,665 1,329,523 (640,781) 96,911,198
General 7,072,396 967,214 765,828 53,870 7,327,652
------------- ------------- ------------- ------------- ---------------
Total 117,335,717 12,563,364 2,583,711 (593,044) 126,722,326
Other Property 73,882 0 0 (73,882) 0
------------- ------------- ------------- ------------- ---------------
Total 117,409,599 12,563,364 2,583,711 (666,926) 126,722,326
------------- ------------- ------------- ------------- ---------------
South Jersey Energy Company
Plant & Equipment 8,350 2,428 0 0 10,778
------------- ------------- ------------- ------------- ---------------
* Transfers, cost of removal of utility plant and salvage.
** Certain reclassifications have been made of prevously reported amounts to conform with
classifications used in the current year.
- 35 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1993
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -------------------------------------------------------------------------------------------------------------------------
Balance at Additions Charged Other Changes Balance at
Beginning to Costs and Add (Deduct)- End
Classification of Period Expenses Retirements Describe* of Period
- -------------------------------------------------------------------------------------------------------------------------
Energy & Minerals, Inc.
Plant & Equipment $ 55,193 $ 25,888 $ 27,938 $ (1,920) $ 51,223
------------- ------------- ------------- ------------- ---------------
The Morie Company, Inc.
Land & Minerals Rights 1,021,588 118,082 0 0 1,139,670
Building & Equipment 23,666,834 2,803,590 585,105 (202,148) 25,683,171
------------- ------------- ------------- ------------- ---------------
Total 24,688,422 2,921,672 585,105 (202,148) 26,822,841
------------- ------------- ------------- ------------- ---------------
S. W. Downer, Jr. Company
Building & Equipment 758,755 215,970 23,813 0 950,912
------------- ------------- ------------- ------------- ---------------
* Transfers, cost of removal of utility plant and salvage.
- 36 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1993
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -------------------------------------------------------------------------------------------------------------------------
Balance at Additions Charged Other Changes Balance at
Beginning to Costs and Add (Deduct)- End
Classification of Period Expenses Retirements Describe* of Period
- -------------------------------------------------------------------------------------------------------------------------
R and T Castellini Company
Building & Equipment $ 862,942 $ 229,311 $ 11,500 $ 0 $ 1,080,753
------------- ------------- ------------- ------------- ---------------
Onshore Construction
Equipment 471,028 199,223 0 0 670,251
------------- ------------- ------------- ------------- ---------------
Cape Atlantic Crane
Equipment 182,909 57,340 7,000 0 233,249
------------- ------------- ------------- ------------- ---------------
R & T Castellini Construction Company
Equipment 0 38,267 0 0 38,267
------------- ------------- ------------- ------------- ---------------
Total South Jersey Industries, Inc.
Consolidated $144,613,543 $ 16,283,221 $ 3,239,067 $ (870,994) $ 156,786,703
============= ============= ============= ============= ===============
* Transfers, cost of removal of utility plant and salvage.
- 37 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1992
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -------------------------------------------------------------------------------------------------------------------------
Balance at Additions Charged Other Changes Balance at
Beginning to Costs and Add (Deduct)- End
Classification of Period Expenses Retirements Describe* of Period
- -------------------------------------------------------------------------------------------------------------------------
South Jersey Industries, Inc.
Plant & Equipment $ 147,256 $ 29,089 $ 0 $ 0 $ 176,345
------------- ------------- ------------- ------------- ---------------
South Jersey Gas Company **
Gas Plant in Service:
Production 53,667 14,625 0 9,633 77,925
Storage 3,955,892 329,813 1,749 (12,677) 4,271,279
Transmission 15,449,479 1,399,175 35,803 (25,571) 16,787,280
Distribution 82,101,801 9,016,997 1,541,870 (450,091) 89,126,837
General 6,649,491 904,286 515,330 33,949 7,072,396
------------- ------------- ------------- ------------- ---------------
Total 108,210,330 11,664,896 2,094,752 (444,757) 117,335,717
Other Property 73,882 0 0 0 73,882
------------- ------------- ------------- ------------- ---------------
Total 108,284,212 11,664,896 2,094,752 (444,757) 117,409,599
------------- ------------- ------------- ------------- ---------------
South Jersey Energy Company
Plant & Equipment 5,926 2,424 0 0 8,350
------------- ------------- ------------- ------------- ---------------
* Transfers, cost of removal of utility plant and salvage.
** Certain reclassifications have been made of prevously reported amounts to conform with
classifications used in the current year.
- 38 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1992
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -------------------------------------------------------------------------------------------------------------------------
Balance at Additions Charged Other Changes Balance at
Beginning to Costs and Add (Deduct)- End
Classification of Period Expenses Retirements Describe* of Period
- -------------------------------------------------------------------------------------------------------------------------
Energy & Minerals, Inc.
Plant & Equipment $ 31,085 $ 24,108 $ 0 $ 0 $ 55,193
------------- ------------- ------------- ------------- ---------------
The Morie Company, Inc.
Land & Minerals Rights 913,728 107,860 0 0 1,021,588
Building & Equipment 21,662,710 2,720,336 508,877 (207,335) 23,666,834
------------- ------------- ------------- ------------- ---------------
Total 22,576,438 2,828,196 508,877 (207,335) 24,688,422
------------- ------------- ------------- ------------- ---------------
S. W. Downer, Jr. Company
Building & Equipment 514,956 248,749 4,950 0 758,755
------------- ------------- ------------- ------------- ---------------
* Transfers, cost of removal of utility plant and salvage.
- 39 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1992
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -------------------------------------------------------------------------------------------------------------------------
Balance at Additions Charged Other Changes Balance at
Beginning to Costs and Add (Deduct)- End
Classification of Period Expenses Retirements Describe* of Period
- -------------------------------------------------------------------------------------------------------------------------
R and T Castellini Company
Building & Equipment $ 604,104 $ 274,143 $ 15,305 $ 0 $ 862,942
------------- ------------- ------------- ------------- ---------------
Onshore Construction
Equipment 285,528 185,500 0 0 471,028
------------- ------------- ------------- ------------- ---------------
Cape Atlantic Crane
Equipment 124,441 58,468 0 0 182,909
------------- ------------- ------------- ------------- ---------------
Total South Jersey Industries, Inc.
Consolidated $132,573,946 $ 15,315,573 $ 2,623,884 $ (652,092) $ 144,613,543
============= ============= ============= ============= ===============
* Transfers, cost of removal of utility plant and salvage.
- 40 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1991
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -------------------------------------------------------------------------------------------------------------------------
Balance at Additions Charged Other Changes Balance at
Beginning to Costs and Add (Deduct)- End
Classification of Period Expenses Retirements Describe* of Period
- -------------------------------------------------------------------------------------------------------------------------
South Jersey Industries, Inc.
Plant & Equipment $ 119,761 $ 27,495 $ 0 $ 0 $ 147,256
------------- ------------- ------------- ------------- ---------------
South Jersey Gas Company **
Gas Plant in Service:
Production 25,274 14,411 (1,000) 12,982 53,667
Storage 3,634,051 328,666 5,890 (935) 3,955,892
Transmission 14,210,834 1,242,766 196 (3,925) 15,449,479
Distribution 75,253,371 8,331,574 1,022,232 (460,912) 82,101,801
General 6,219,006 861,715 479,973 48,743 6,649,491
------------- ------------- ------------- ------------- ---------------
Total 99,342,536 10,779,132 1,507,291 (404,047) 108,210,330
Other Property 73,882 0 0 0 73,882
------------- ------------- ------------- ------------- ---------------
Total 99,416,418 10,779,132 1,507,291 (404,047) 108,284,212
------------- ------------- ------------- ------------- ---------------
South Jersey Energy Company
Plant & Equipment 3,544 2,382 0 0 5,926
------------- ------------- ------------- ------------- ---------------
* Transfers, cost of removal of utility plant and salvage.
** Certain reclassifications have been made of prevously reported amounts to conform with
classifications used in the current year.
- 41 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1991
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -------------------------------------------------------------------------------------------------------------------------
Balance at Additions Charged Other Changes Balance at
Beginning to Costs and Add (Deduct)- End
Classification of Period Expenses Retirements Describe* of Period
- -------------------------------------------------------------------------------------------------------------------------
Energy & Minerals, Inc.
Plant & Equipment $ 31,456 $ 24,642 $ 23,093 $ (1,920) $ 31,085
------------- ------------- ------------- ------------- ---------------
The Morie Company, Inc.
Land & Minerals Rights 810,512 103,216 0 0 913,728
Building & Equipment 19,408,747 2,721,104 287,722 (179,419) 21,662,710
------------- ------------- ------------- ------------- ---------------
Total 20,219,259 2,824,320 287,722 (179,419) 22,576,438
------------- ------------- ------------- ------------- ---------------
S. W. Downer, Jr. Company
Building & Equipment 280,235 245,554 10,833 0 514,956
------------- ------------- ------------- ------------- ---------------
* Transfers, cost of removal of utility plant and salvage.
- 42 -
<PAGE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1991
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- -------------------------------------------------------------------------------------------------------------------------
Balance at Additions Charged Other Changes Balance at
Beginning to Costs and Add (Deduct)- End
Classification of Period Expenses Retirements Describe* of Period
- -------------------------------------------------------------------------------------------------------------------------
R and T Castellini Company
Building & Equipment $ 326,084 $ 281,687 $ 3,667 $ 0 $ 604,104
------------- ------------- ------------- ------------- ---------------
Onshore Construction
Equipment 132,069 153,459 0 0 285,528
------------- ------------- ------------- ------------- ---------------
Cape Atlantic Crane
Equipment 66,224 58,217 0 0 124,441
------------- ------------- ------------- ------------- ---------------
Total South Jersey Industries, Inc.
Consolidated $120,595,050 $ 14,396,888 $ 1,832,606 $ (585,386) $ 132,573,946
============= ============= ============= ============= ===============
* Transfers, cost of removal of utility plant and salvage.
- 43 -
</TABLE>
<PAGE>
<TABLE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
Col. A. Col. B. Col. C. Col. D. Col. E.
- ----------------------------------------------------------------------------------------------------------------------
Additions
-------
(1) (2)
Charged to
Balance at Charged to Other Balance at
Beginning Costs and Accounts- Deductions- End
Classification of Period Expenses Describe * Describe ** of Period
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Provision for Uncollectible Accounts $ 1,071,200 $ 912,929 $ 320,337 $ 1,278,137 $ 1,026,329
YEAR ENDED DECEMBER 31, 1992
Provision for Uncollectible Accounts $ 1,162,200 $ 1,090,310 $ 562,613 $ 1,743,923 $ 1,071,200
YEAR ENDED DECEMBER 31, 1991
Provision for Uncollectible Accounts $ 1,062,200 $ 1,271,586 $ 352,685 $ 1,524,271 $ 1,162,200
* Recoveries of accounts previously written off and minor adjustments.
** Uncollectible accounts written off.
- 44 -
</TABLE>
<PAGE>
<TABLE>
SOUTH JERSEY INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
<CAPTION>
Col. A. Col. B. Col. C. Col. D. Col. E. Col. F.
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted
Category of Weighted Maximum Amount Average Amount Average
Aggregate Balance Average Outstanding Outstanding Interest
Short-Term at End Interest During During Rate During
Borrowing* of Period Rate the Period the Period** the Period***
- ------------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1993
<S> <C> <C> <C> <C> <C>
Notes Payable to Banks $ 82,750,000 3.48% $ 90,600,000 $ 67,682,000 3.41%
YEAR ENDED DECEMBER 31, 1992
Notes Payable to Banks $ 61,100,000 3.81% $ 70,900,000 $ 47,200,000 4.32%
YEAR ENDED DECEMBER 31, 1991
Notes Payable to Banks $ 70,600,000 5.95% $ 72,700,000 $ 46,998,000 6.4%
* Unsecured promissory notes with maturities of less than one year.
** Computed using daily balances.
*** Computed by dividing total interest on short-term debt by average debt outstanding.
- 45 -
</TABLE>
SOUTH JERSEY INDUSTRIES, INC.
NUMBER ONE SOUTH JERSEY PLAZA
ROUTE 54
FOLSOM, NEW JERSEY 08037
FORM 10-K FYE 12/31/93
EXHIBIT INDEX
Incorporated by
Reference From
Reference Reference
Number Description of Exhibit Exhibit Document
(3)(a)(i) Certificate of Incorporation (4)(a) Form S-2
of the Company, as amended (2-91515)
through April 19, 1984.
(3)(a)(ii) Amendment to Certificate of (4)(e)(1) Form S-3
Incorporation relating to (33-1320)
two-for-one stock split
effective as of April 28,
1987.
(3)(a)(iii) Amendment to Certificate of (4)(e)(2) Form S-3
Incorporation relating to (33-1320)
director and officer
liability.
(3)(b) Bylaws of the Company as (3)(c) Form 10-K
amended and restated for 1990
through October 1, 1990. (1-6364)
(4)(a) Form of Stock Certificate (4)(a) Form 10-K
for common stock. for 1985
(1-6364)
(4)(b)(i) First Mortgage Indenture (4)(b)(i) Form 10-K
dated October 1, 1947 for 1987
(1-6364)
(4)(b)(vi) Form of South Jersey Gas (4)(b)(vi) Form 10-K
Company First Mortgage for 1980
Bond, 7-7/8% Series due 1994. (1-6364)
(4)(b)(vii) Form of South Jersey Gas (4)(b)(vii) Form 10-K
Company First Mortgage for 1980
Bond, 8-1/4% Series due 1996. (1-6364)
(4)(b)(viii) Form of South Jersey Gas (4)(b)(viii) Form 10-K
Company First Mortgage for 1980
Bond, 8-1/4% Series due 1998. (1-6364)
(4)(b)(x) Twelfth Supplemental Inden- 5(b) Form S-7
ture, dated as of June 1, (2-68038)
1980.
<PAGE>
SOUTH JERSEY INDUSTRIES, INC.
NUMBER ONE SOUTH JERSEY PLAZA
ROUTE 54
FOLSOM, NEW JERSEY 08037
FORM 10-K FYE 12/31/93
EXHIBIT INDEX
Incorporated by
Reference From
Reference Reference
Number Description of Exhibit Exhibit Document
(4)(b)(xii) Fifteenth Supplemental (4)(b)(xiii) Form 10-K
Indenture, dated July 1, for 1986
1986, 9.2% Series due 1998. (1-6364)
(4)(b)(xiv) Sixteenth Supplemental (4)(b)(xv) Form 10-Q
Indenture dated as of for quarter
April 1, 1988, 10-1/4% ended
Series due 2008. March 31,
1988 (1-6364)
(4)(b)(xv) Seventeenth Supplemental (4)(b)(xv) Form 10-K
Indenture dated as of for 1989
May 1, 1989. (1-6364)
(4)(b)(xvi) Eighteenth Supplemental (4)(e) Form S-3
Indenture, dated as of (33-36581)
March 1, 1990.
(4)(b)(xvii) Nineteenth Supplemental Form 10-K
Indenture, dated as of for 1992
April 1, 1992. (1-6364)
(4)(b)(xviii) Twentieth Supplemental
Indenture, dated as of
June 1, 1993.
(filed herewith)
(9) None
(10)(d) Gas storage agreement GSS
between South Jersey Gas
Company and Transco,
dated October 1, 1993.
(filed herewith)
(10)(e) Gas storage agreement (5)(h) Form S-7
between South Jersey Gas (2-56223)
Company and Transco,
dated December 16, 1953.
<PAGE>
SOUTH JERSEY INDUSTRIES, INC.
NUMBER ONE SOUTH JERSEY PLAZA
ROUTE 54
FOLSOM, NEW JERSEY 08037
FORM 10-K FYE 12/31/93
EXHIBIT INDEX
Incorporated by
Reference From
Reference Reference
Number Description of Exhibit Exhibit Document
(10)(f) Gas storage agreement (5)(f) Form S-7
between South Jersey Gas (2-56223)
Company and Transco,
dated June 3, 1974.
(10)(h) Gas storage agreement (WSS) (10)(h) Form 10-K
between South Jersey Gas for 1991
Company and Transco dated (1-6364)
August 1, 1991.
(10)(i) Gas storage agreement (LSS)
between South Jersey Gas
Company and Transco,
dated October 31, 1993.
(filed herewith)
(10)(i)(a) Gas storage and sales (10)(i)(a) Form 10-K
agreement between South for 1988
Jersey Gas Company and (1-6364)
Transco, dated May 10,
1987 (effective April 1, 1988).
(10)(i)(b) Gas storage agreement (ESS)
between South Jersey Gas
Company and Transco,
dated November 1, 1993.
(filed herewith)
(10)(i)(c) Gas Transportation Service (10)(i)(c) Form 10-K
Agreement between South for 1989
Jersey Gas Company and (1-6364)
Transco, dated April 1,
1986.
(10)(i)(e) Service agreement (FS) (10)(i)(e) Form 10-K
between South Jersey Gas for 1991
Company and Transco, (1-6364)
dated August 1, 1991.
<PAGE>
SOUTH JERSEY INDUSTRIES, INC.
NUMBER ONE SOUTH JERSEY PLAZA
ROUTE 54
FOLSOM, NEW JERSEY 08037
FORM 10-K FYE 12/31/93
EXHIBIT INDEX
Incorporated by
Reference From
Reference Reference
Number Description of Exhibit Exhibit Document
(10)(i)(f) Service agreement (FT) between (10)(i)(f) Form 10-K
South Jersey Gas Company for 1991
and Transco, dated February 1, (1-6364)
1992.
(10)(i)(g) Service agreement (Incremental (10)(i)(g) Form 10-K
FT) between South Jersey Gas for 1991
Company and Transco, dated (1-6364)
August 1, 1991.
(10)(i)(i) Gas storage agreement (SS-2) (10)(i)(i) Form 10-K
between South Jersey Gas for 1991
Company and Transco, dated (1-6364)
July 25, 1990.
(10)(i)(j) Gas Transportation Service
Agreement between South
Jersey Gas Company and Transco,
dated December 20, 1991.
(filed herewith)
(10)(i)(k) Amendment to Gas Transportation
Agreement, dated December 20,
1991 between South Jersey Gas
Company and Transco, dated
October 5, 1993.
(filed herewith)
(10)(j)(a) Gas Transportation Service (10)(j)(a) Form 10-K
Agreement (FTS) between South for 1989
Jersey Gas Company and (1-6364)
Equitable Gas Company,
dated November 1, 1986.
(10)(k)(h) Gas Transportation Service (10)(k)(h) Form 10-K
Agreement (TF) between South for 1989
Jersey Gas Company and (1-6364)
Consolidated Gas Trans-
mission Corporation, dated
November 21, 1987.
<PAGE>
SOUTH JERSEY INDUSTRIES, INC.
NUMBER ONE SOUTH JERSEY PLAZA
ROUTE 54
FOLSOM, NEW JERSEY 08037
FORM 10-K FYE 12/31/93
EXHIBIT INDEX
Incorporated by
Reference From
Reference Reference
Number Description of Exhibit Exhibit Document
(10)(k)(i) Gas purchase agreement (10)(k)(i) Form 10-K
between South Jersey Gas for 1989
Company and ARCO Gas Market- (1-6364)
ing, Inc., dated March 5, 1990.
(10)(k)(k) Gas Transportation Service
Agreement (FTS 1) between
South Jersey Gas Company and
Columbia Gulf Transmission
Company, dated November 1,
1993.
(filed herewith)
(10)(k)(l) Assignment Agreement
capacity and service rights
(FTS-2) between South Jersey
Gas Company and Columbia
Gulf Transmission Company,
dated November 1, 1993.
(filed herewith)
(10)(k)(m) FTS Service Agreement
No. 39556 between South
Jersey Gas Company and
Columbia Gas Transmission
Corporation, dated
November 1, 1993.
(filed herewith)
(10)(k)(n) FTS Service Agreement
No. 38099 between South
Jersey Gas Company and
Columbia Gas Transmission
Corporation, dated
November 1, 1993.
(filed herewith)
<PAGE>
SOUTH JERSEY INDUSTRIES, INC.
NUMBER ONE SOUTH JERSEY PLAZA
ROUTE 54
FOLSOM, NEW JERSEY 08037
FORM 10-K FYE 12/31/93
EXHIBIT INDEX
Incorporated by
Reference From
Reference Reference
Number Description of Exhibit Exhibit Document
(10)(k)(o) NTS Service Agreement
No. 39305 between South
Jersey Gas Company and
Columbia Gas Transmission
Corporation, dated
November 1, 1993.
(filed herewith)
(10)(k)(p) FSS Service Agreement
No. 38130 between South
Jersey Gas Company and
Columbia Gas Transmission
Corporation, dated
November 1, 1993.
(filed herewith)
(10)(k)(q) SST Service Agreement
No. 38086 between South
Jersey Gas Company and
Columbia Gas Transmission
Corporation, dated
November 1, 1993.
(filed herewith)
(10)(l) Deferred Payment Plan for (10)(l) Form 10-K
Directors of South Jersey for 1986
Industries, Inc., South (1-6364)
Jersey Gas Company and
Energy & Minerals, Inc.
as amended and restated
August 22, 1986.
(10)(l)(a) Form of Deferred Compen- (10)(j)(a) Form 10-K
sation Agreement between for 1980
the Company and/or a sub- (1-6364)
sidiary and eleven of its
officers.
(10)(l)(b) Schedule of Deferred Com- (10)(l)(b) Form 10-K
pensation Agreements. for 1992
(1-6364)
<PAGE>
SOUTH JERSEY INDUSTRIES, INC.
NUMBER ONE SOUTH JERSEY PLAZA
ROUTE 54
FOLSOM, NEW JERSEY 08037
FORM 10-K FYE 12/31/93
EXHIBIT INDEX
Incorporated by
Reference From
Reference Reference
Number Description of Exhibit Exhibit Document
(10)(l)(c) Supplemental Executive (10)(l)(c) Form 10-K
Retirement Program, as for 1992
amended and restated ef- (1-6364)
fective September 1, 1991,
and form of Agreement
between certain Company
or subsidiary Company
officers.
(10)(l)(d) Form of Officer Employment (10)(i)(d) Form 10-K
Agreement between certain for 1991
officers and either the Company (1-6364)
or its Subsidiaries.
(10)(l)(e) Schedule of Officer (10)(i)(e) Form 10-K
Employment Agreements. for 1991
(1-6364)
(10)(l)(f) Officer Severance Benefit (10)(l)(g) Form 10-K
Program for all officers. for 1985
(1-6364)
(10)(l)(g) Discretionary Incentive (10(l)(h) Form 10-K
Bonus Program for all for 1985
officers and management (1-6364)
employees.
(10)(l)(h) The 1987 Stock Option and (10)(l)(i) Form 10-K
Stock Appreciation Rights for 1987
Plan including Form of (1-6364)
Agreement.
(10)(p) Retirement Plan for Non- (10)(p) Form 10-K
employee Members of the for 1988
Board of Directors. (1-6364)
(10)(q) Executive Employment Agreement (10)(q) Form 10-K
dated August 1, 1991 between the for 1991
Company and William F. Ryan, (1-6364)
President and Chief Executive
Officer.
<PAGE>
SOUTH JERSEY INDUSTRIES, INC.
NUMBER ONE SOUTH JERSEY PLAZA
ROUTE 54
FOLSOM, NEW JERSEY 08037
FORM 10-K FYE 12/31/93
EXHIBIT INDEX
Incorporated by
Reference From
Reference Reference
Number Description of Exhibit Exhibit Document
(11) Not Applicable
(12) Calculation of Ratio of Earnings to Fixed Charges
(Before Federal Income
Taxes) (filed herewith).
(13) The Annual Report to Shareholders
of the Company for the year
ended December 31, 1993 is
filed as an exhibit hereto
solely to the extent portions
are specifically incorporated
by reference herein.
(16) Not Applicable
(18) Not Applicable
(21) Subsidiaries of the Registrant.
(filed herewith)
(22) None
(23) Independent Auditors' Consent
(filed herewith)
(24) Power of Attorney
(filed herewith)
(99) None
<PAGE>
Exhibit (4)(b)(xviii)
[CONFORMED COPY]
This instrument was prepared by
STEPHEN R. MILLER
Stephen R. Miller, Esq.
MORTGAGE
SOUTH JERSEY GAS COMPANY
TO
NEW JERSEY NATIONAL BANK Trustee
TWENTIETH SUPPLEMENTAL INDENTURE
Dated as of June 1, 1993
Providing for the issuance of
First Mortgage Bonds,
6.95% Series due 2013
and
Further Supplementing and Amending the
Indenture of Mortgage
Dated October 1, 1947
(This Instrument Contains After-Acquired Property Provisions)
THIS TWENTIETH SUPPLEMENTAL INDENTURE
dated as of June 1,
1993 between SOUTH JERSEY GAS
COMPANY, a New Jersey corporation, with
principal offices at Number One South
Jersey Plaza, Route 5.4, Folsom, New Jersey
08037, party of the first part,
hereinafter called the 'Company,' and NEW JERSEY
NATIONAL BANK (successor trustee to
Guarantee Bank), a national banking association
with principal offices at 370 Scotch Road,
West Trenton, New Jersey 08628, party of the
second part, hereinafter called 'Trustee,*
as Trustee under the Indenture of Mortgage
hereinafter mentioned, Wftnesseth that:
Whereas, the Company has
heretofore duly executed, acknowledged
and
delivered to Guarantee Bank and Trust
Company (name later changed to Guarantee
Bank), as Trustee, a certain Indenture of
Mortgage dated October 1, 1947 (hereinafter
called the Original Indenture,) to provide
for the issuance of, and to secure, fts First
Mortgage Bonds (the 'Bonds'), issuable in
series and without limit as to aggregate
principal amount (except as provided under
Article Ill of the Original Indenture), and by
the Original Indenture granted and conveyed
unto the Trustee, upon the trusts and for
the uses and purposes therein specifically
set forth, certain real estate, franchises and
other property therein described or which
might be thereafter acquired by it, to secure
the payment of the principal of and
interest on the Bonds from time to time issued
thereunder, and pursuant to which the
Company provided for the creation of an initial
series of First Mortgage Bonds
designated as asouth Jersey Gas Company First
Mortgage Bonds, 4 1/8% Series due
1977' (herein and in the Original Indenture
sometimes called the 'Bonds of the lnftial
Series"); and
WHEREAS, the Original Indenture
provides that Bonds may be issued
thereunder
from time to time and in one or more series,
upon conditions therein fully provided, the
Bonds of each series to be substantially in
the forms therein reefted for the Bonds of
the lnftial Series but with such omissions,
variations and insertions as are authorized or
permitted by the Original Indenture and
determined and specified by the Board of
Directors of the Company; and
WHEREAS, the Company has
heretofore duly executed, acknowledged
and
delivered to the Trustee a First
Supplemental Indenture dated as of October 1, 1952,
a Second Supplemental Indenture dated as
of February 1, 1961, a Third Supplemental
Indenture dated as of July 1, 1963, a
Fourth Supplemental Indenture dated as of
August 1, 1966, a Fffth Supplemental
Indenture dated as of September 1, 1968, a Sixth
Supplemental Indenture dated as of July
1, 1969, a Seventh Supplemental Indenture
dated as of July 1, 1971, an Eighth
Supplemental Indenture dated as of June 1, 1973,
a Ninth Supplemental Indenture dated as
of July 1, 1974, a Tenth Supplemental
Indenture dated as of November 10,
1976, an Eleventh Supplemental Indenture dated
as of December 1, 1979, a Tweffth
Supplemental Indenture dated as of June 1, 1980,
a Thirteenth Supplemental Indenture
dated as of August 1, 1981, a Fourteenth
Supplemental Indenture dated as of August
1, 1984, a Fifteenth Supplemental Indenture
dated as of July 1, 1986, a Sixteenth
Supplemental Indenture dated as of April 1, 1988,
a Seventeenth Supplemental Indenture
dated as of May 1, 1989, an Eighteenth
Supplemental Indenture dated as of
March 1, 1990 and a Nineteenth Supplemental
Indenture dated as of April 1, 1992
(hereinafter called, respectively, the 'First
Supplement,, the 'Second Supplement,o
the IThird Supplement,' the 'Fourth
2
Supplement,' the "Fffth Supplement,* the
'Sixth Supplement,, the oseventh
Supplement,,
the 'Eighth Supplement,g the INinth
Supplement,, the 'Tenth Supplement,' the 'Eleventh
Supplement,' the 'Twelfth Supplement,,
the 'Thirteenth Supplement,' the IFourteenth
Supplement,' the 'Fffteenth Supplement,'
the 'Sixteenth Supplement,, the Seventeenth
Supplement', the OEighteenth
Supplement' and the onineteenth Supplement*) (the
Original Indenture, all such
supplemental indentures and the Twentieth Supplemental
Indenture being hereinafter collectively
referred to as the lindenturel), pursuant to which
the Company provided for the creation
of a second series of Bonds designated as
'South Jersey Gas Company First
Mortgage Bonds, 3 7/8% Series due 1977, (herein
and in the First Supplement sometimes called
the 'Bonds of the Second Series'), a third
series of Bonds designated as 'South
Jersey Gas Company First Mortgage Bonds, 5%
Series due 19864 (herein and in the
Second Supplement sometimes called the 'Bonds
of the Third Series,), a fourth series
of Bonds designated as 'South Jersey Gas
Company First Mortgage Bonds, 4 1/2%
Series due 1988, (herein and in the Third
Supplement sometimes called the 'Bonds of
the Fourth Series'), a fifth series of Bonds
designated as 'South Jersey Gas Company
First Mortgage Bonds, 5.70% Series due
1991' (herein and in the Fourth
Supplement sometimes called the "Bonds of the Fifth
Series'), a sixth series of Bonds
designated as 'South Jersey Gas Company First
Mortgage Bonds, 7% Series due 1993'
(herein and in the Fffth Supplement sometimes
called the Bonds of the Sixth Series'), a
seventh series of Bonds designated as 'South
Jersey Gas Company First Mortgage
Bonds, 7 7/8% Series due 1994' (herein and in
the Sixth Supplement sometimes called the
'Bonds of the Seventh Series'), an eighth
series of Bonds designated as OSouth
Jersey Gas Company First Mortgage Bonds,
8 1/4% Series due 1996' (herein and in
the Seventh Supplement sometimes called the
SSBonds of the Eighth Series), a ninth
series of Bonds designated as 'South Jersey Gas
Company First Mortgage Bonds, 8 1/4%
Series due 1998, (herein and in the Eighth
Supplement sometimes called the 'Bonds of
the Ninth Series'), a tenth series of Bonds
designated as 'SoLAh Jersey Gas Company
First Mortgage Bonds, 9 1/2% Series due
1989' (herein and in the Ninth
Supplement sometimes called the 'Bonds of the Tenth
Seriesm), an eleventh series of Bonds
designated as 'South Jersey Gas Company First
Mortgage Bonds, 8% Series due 1995'
(herein and in the Twelfth Supplement
sometimes called the 'Bonds of the
Eleventh Series'), a tweffth series of Bonds
designated as 'South Jersey Gas Company
First Mortgage Bonds, 15 3/4% Series due
1996' (herein and in the Thirteenth
Supplement sometimes called the 'Bonds of the
Twelfth Series'), a thirteenth series of
Bonds designated as 'South Jersey Gas Company
First Mortgage Bonds, 14 3/8% Series
due 19961 (herein and in the Fourteenth
Supplement sometimes called the obonds of
the Thirteenth Series'), a fourteenth series
of Bonds designated as 'South Jersey
Gas Company First Mortgage Bonds, 9.20%
Series due 19980 (herein and in the
Fifteenth Supplement sometimes called the 'Bonds
of the Fourteenth Series'), a fifteenth
series of Bonds designated as 'South Jersey Gas
Company First Mortgage Bonds, 10 1/4%
Series due 2008' (herein and in the Sixteenth
Supplement sometimes called the 'Bonds of
the Fifteenth Seriesm), a sixteenth series
of Bonds designated as 'South Jersey
Gas Company First Mortgage Bonds, 9% Series
due 20100 (herein and in the
Eighteenth Supplement sometimes called the 'Bonds of
the Sixteenth Serieso) and a seventeenth
series of Bonds designated as 'South Jersey
3
Gas Company First Mortgage Bonds,
8.19% Series due 2007, (herein
and in the
Nineteenth Supplement sometimes called
the 'Bonds of the Seventeenth Series'); and
WHEREAS, pursuant to the
Indenture there have been executed,
authenticated
and issued, and there are
outstanding as of the date of execution hereof by the
Company, First Mortgage Bonds of series
and in principal amounts as follows:
Now
Series
Issued Outstanding
Bonds of the Initial Series......
$ 4,000,000 -0-
Bonds of the Second Series....
$ 4,500,000 -0-
Bonds of the Third Series......
$ 4,500,000 -0-
Bonds of the Fourth Series.....
$ 5,000,000 -0-
Bonds of the Fffth Series......
s 5,000,000 -0-
Bonds of the Sixth Series......
$ 6,000,000 $ 2,986,000
Bonds of the Seventh Series....
$ 6,000,000 $ 3,123,000
Bonds of the Eighth Series.....
$ 4,000,000 $ 2,271,000
Bonds of the Ninth Series......
$ 6,000,000 $ 3,534,000
Bonds of the Tenth Series.....
$ 6,000,000 -0-
Bonds of the Eleventh Series...
s 1,000,000 $ 268,174
Bonds of the Twelfth Series....
$20,000,000 -0-
Bonds of the Thirteenth Series
$10,000,000 -0-
Bonds of the Fourteenth Series
$20,000,000 $11,111,112
Bonds of the Fffteenth Series...
$25,000,000 $25,000,000
Bonds of the Sixteenth Series...
$35,000,000 $35,000,000
Bonds of the Seventeenth Series .
$25,000,000 $25,000,000
and
WHEREAS, said Bonds of the
Sixth Series, Bonds of the Seventh
Series, Bonds
of the Eighth Series, Bonds of the
Ninth Series, Bonds of the Eleventh Series, Bonds
of the Fourteenth Series, Bonds of the
Fifteenth Series, Bonds of the Sixteenth Series
and Bonds of the Seventeenth Series
constitute the only Bonds outstanding under the
Indenture; and
WHEREAS, the Company, by
appropriate resolutions adopted by
fts Board of
Directors pursuant to the terms of the
Original Indenture, has duly determined to create
a new series of Bonds to be issued
under the Indenture, including this Twentieth
Supplemental Indenture dated as of
June 1, 1993 (hereinafter called the otwentieth
Supplements), to be designated as
'South Jersey Gas Company First Mortgage Bonds,
6.95% Series due 20135 (hereinafter
sometimes called the 'Bonds of the Eighteenth
Series'), and has duly determined
that the terms and form of the Bonds of the
Eighteenth Series, which will be fully
registered bonds, and the form of the Trustee's
Certificate of Authentication to be set
forth on the Bonds of the Eighteenth Series, shall
be substantially as follows,
respectively:
4
[FORM OF
BOND]
No.
$
SOUTH JERSEY GAS
COMPANY
FIRST MORTGAGE BOND, 6.95%
SERIES DUE 2013
SOUTH JERSEY GAS COMPANY, a New
Jersey corporation (hereinafter called
the
mCompanyo), for value received,
promises to pay on July . 1, 2013, to
, or
registered assigns, on the surrender hereof, the
principal sum of
DOLLARS, and to pay interest thereon
from the date hereof, at the rate of 6.95%
per annum (computed on the basis of a
360-day year of twelve 30-day months),
until payment of said principal sum, such
interest to be payable January 1 and
July 1 in each year, commencing January 1,
1994, and to pay on demand interest at
the rate of 7.95% per annum (computed on
the basis of a 360-day year of twelve 30-day
months) on any overdue principal and, to
the extent permitted by applicable law, on
any overdue interest, from the due date
thereof until the obligation of the Company
with respect to the payment thereof shall be
discharged.
All payments of principal (which
term as used in this Bond includes
the
Redemption Price below referred to ff this
Bond is called for redemption) hereof and
interest hereon shall be paid at the
corporate trust office of New Jersey National Bank
(hereinafter called the oTrustee'), or fts
successor as Trustee under the indenture below
mentioned, or at such other places as the
Company may agree pursuant to Section 2.7
of the Twentieth Supplement (as hereinafter
defined), in such coin or currency of the
United States of America as at the time of
payment shall constitute legal tender for the
payment of public and private debts.
This Bond is one of an authorized
issue of Bonds of the Company,
designated
as fts First Mortgage Bonds, without
specified limit as to aggregate authorized principal
amount and issuable in one or more series
(each of which is hereinafter referred to as
a mSeries'), all issued or to be issued
under and (except in respect of any sinking,
replacement, purchase, or other analogous
fund provided in said indenture or in any
supplement thereto for any one or more
particular series of Bonds) equally and ratably
secured by an indenture dated October
1, 1947 (hereinafter called the 'Original
Indenture') between the Company and
Guarantee Bank and Trust Company, as
predecessor trustee, as supplemented by
indentures supplemental thereto, including a
Twentieth Supplemental Indenture dated as
of June 1, 1993 (hereinafter called the
oTwentieth Supplement,), duly executed
by the Company to the Trustee, to which
5
Original Indenture
and all
indentures
supplemental thereto
(herein sometimes
collectively
called the
'Indenture') reference is hereby made for a
description of the property
mortgaged and
pledged and the respective rights of the Company,
the Trustee, and the
Bondholders in
respect thereof, and for a specification of the
principal amount of said
Bonds from time
to time issuable thereunder and the conditions upon
which said Bonds
may be issued and shall be
secured.
The Bonds
of the 6.95%
Series due 2013,
of which this
Bond is one,
are of
similar tenor
hereto, and are limited to the aggregate authorized
principal amount of
$35,000,000, except
as provided in Section 2.11 of the Original
Indenture (relating to
replacement of
mutilated, lost, destroyed or stolen Bonds).
The Bonds
of this Series
are entitled to
the benefit of
the sinking fund
provided
for in Article 11
of the Twentieth Supplement, and all Bonds of all
Series are entitled to
the benefit of the
replacement fund provided for in the Indenture.
As more
fully provided in
the Indenture, the
Bonds of this
Series are subject
to
redemption, either as
a whole or in part from time to time, on not more
than 60 nor less
than 30 days
written notice in advance of the date fixed for
redemption (a) after June
30, 2003, and
subject to any required approval of the Board
of Regulatory
Commissioners of
New Jersey, or any successor agency, at the
election of the
Company upon
payment of an amount equal to the applicable
percentage of the
principal amount
thereof set forth in the tabulation below
under the heading
'Redemption Price, during
the respective periods set forth in said tabulation:
Twelve Months'
Period
Beginning July
1 Redemption Price
200
3..
...
...
...
...
...
...
...
...
...
...
...
...
103
.29
%
2004...................................... 102.93%
2005...................................... 102.56%
2006...................................... 102.19%
2007...................................... 101.83%
2008...................................... 101.46%
2009...................................... 101.10%
2010...................................... 100.73%
2011...................................... 100.37%
2012...................................... 100.00%
together with
accrued interest to
the date fixed
for redemption, (b)
after June 30,
2003
by operation of
said sinking fund (as provided in Anicle 11 of the
Twentieth Supplement)
upon payment of
the principal amount thereof together with accrued
interest to the date
fixed for
redemption, (c) through the application of proceeds
from the condemnation
of property subject
to the lien of the Indenture, or proceeds of sale
of such property to
a governmental
body or agency having the power of eminent
domain made as the
6
result of the threat (evidenced in writing
by such body or agency) of
condemnation of
such property, but not through the
application of funds from any other source, upon
payment of the principal amount thereof
together with accrued interest to the date fixed
for redemption, or (d) by any combination
of (a), (b) and (c). Except as set forth in this
paragraph, the Bonds of this Series are not
subject to redemption.
On certain defaufts by the Company,
as provided in the indenture, the
principal
of said Bonds may become payable in advance
of the expressed maturity thereof.
Bonds of this Series are issuable
in denominations of $100,000 and any
integral
muftiple of $1,000 larger than $100,000,
except that such Bonds may be issued in
denominations of less than $100,000 when
necessary after a partial redemption.
As more fully provided in the
Indenture, any Bonds of this Series,
upon payment
of the charges specified in the Indenture
and upon surrender at the corporate trust
office of the Trustee, may be exchanged
for an equal aggregate principal amount of
Bonds of this Series of any of the
authorized denominations.
As more fully provided in the
Indenture, any of the provisions of the
Indenture
or any Bond issued pursuant thereto
may be aftered, amended, or eliminated, or
additional provisions added, with the
consent of the holders or registered owners
(evidenced as in the Indenture provided) of
at least 66 2/3% in principal amount of
the Bonds issued thereunder and then
outstanding, or, ff such change pertains only to
the Bonds of one or more Series but less
than all Series of Bonds outstanding, the
holders or registered owners of at least
66 2,/3% in principal amount of the then
outstanding Bonds of each Series to which
such change pertains; provided, however, that
none of the provisions of any Bond with
respect to the time, terms, manner, or amount
of any payment of the principal thereof or
interest thereon shall be changed without the
consent of the holder or registered owner
of such Bond nor shall there be reduced the
percentage of Bonds the holders of which
are required to consent to the execution of
any supplemental indenture.
No recourse under or upon any
obligation, covenant or agreement
contained
in the Indenture or in any indenture
supplemental thereto, or in any Bond issued under
the Indenture or coupon thereby
secured or because of any indebtedness thereby
secured, shall be had against any
incorporator, or against any past, present or future
stockholder, officer or director, as
such, of the Company or of any successor
corporation, either directly or through the
Company or any successor corporation, under
any rule of law, statute or
constitutional provision or by the enforcement of any
assessment or by any legal or equitable
proceeding or otherwise, ft being expressly
agreed and understood that the Indenture
and any indenture supplemental thereto, and
the obligations thereby secured, are solely
corporate obligations, and that no personal
liability whatever shall attach to, or be
incurred by, such incorporators, stockholders,
officers or directors, as such, of the
Company, or of any successor corporation, or any
of them, because of the incurring of the
indebtedness thereby authorized, or under or
7
by reason of any of the obligations,
covenants or agreements contained in
the Indenture
or in any indenture supplemental thereto,
or in any of the Bonds or coupons thereby
secured, or implied therefrom.
The execution by the Trustee, or by
fts successor in trust under the
Indenture,
of the Trustee's cenificate of
authentication set forth hereon is essential to the validity
of this Bond.
This Bond is transferable, but only
as provided in the Indenture and on
payment
of charges therein specified upon surrender
hereof, by the registered owner in person
or by attorney duly authorized in writing,
at the corporate trust office of the Trustee;
upon any such transfer a new Bond similar
hereto will be issued to the transferee. The
Company, the Trustee and any paying
agent may deem and treat the person in whose
name this Bond is registered as the
absolute owner hereof for the purpose of receiving
payment of or on account of the principal
and the interest on this Bond and for all other
purposes; and neither the Company nor
the Trustee nor any paying agent shall be
affected by any notice to the contrary.
IN WITNESS WHEFTEOF, SOurH
JERsEy GAS COMPANY has caused this
Bond to be
duly executed by the manual or facsimile
signatures of fts proper officers under fts
corporate seal or a facsimile thereof.
Dated
SOUTH JERSEY GAS COMPANY
By
President
[CORPORATE SEAL]
Attest:
Secretary
8
[FORM OF TRUSTEE'S CERTIFICATE
OF AUTHENTICATION]
The within Bond is one of the Bonds
of the Series designated therein, which
are described or provided for in the within-
mentioned Indenture.
NEw JERsEy NATIONAL BANK,
TRUSTEE
By
Authorized Signatory
; and
WHEREAS, the Company deems ft
advisable and has determined pursuant to
the
provisions of the Original Indenture, to
convey, transfer and assign to the Trustee and
to subject to the lien of the Indenture with
the same effect as though included in the
granting clauses of the Original Indenture
certain additional property now owned by the
Company; and
WHEREAS, the execution and
delivery of the Twentieth Supplement
have been
duly authorized by the Board of Directors of
the Company at a meeting duly called and
held according to law; and
WHEREAS, all acts and things
prescribed by law, by the charrer and
bylaws of
the Company and by the Indenture
necessary to make the Bonds of the Eighteenth
Series, when executed by the Company and
authenticated by the Trustee as in the
Indenture provided, valid, binding and legal
obligations of the Company, and to make
the Twentieth Supplement a valid, binding and
legal instrument in accordance with fts
terms, have been done, performed and
fulfilled, and the execution and delivery hereof
have been in all respects duly authorized;
Now, THEREFORE, THis TWENTIETH
SUPPLEMENT WITNESSETH, that by way of
further
assurance and in consideration of the
premises and of the acceptance by the Trustee
of the trusts hereby created, and in order to
secure further the payment of the principal
of, the premium, ff any, and the
interest on all Bonds at any time issued and
oLAstanding under the Indenture,
according to their tenor and effect, and the
performance and observance by the
Company of the covenants and conditions
contained in the Indenture and in said Bonds,
the Company has executed and delivered
the Twentieth Supplement, and has
granted, bargained, sold, conveyed, aliened,
enfeoffed, mortgaged, pledged, released,
confirmed, assigned, transferred and set over,
and by these presents does grant, bargain,
sell, convey, alien, enfeoff, mortgage,
9
pledge, release, confirm, assign, transfer
and set over unto the Trustee, fts
successors
in the trust and fts and their assigns,
the following described property:
1. All and singular fts lands,
real estate and any and every
interest in lands or
real estate wheresoever situate,
2. All buildings, structures,
machinery, apparatus and
equipment situate upon
the premises referred to above or
appurtenant thereto or used in connection therewith,
and all property of the Company used
or useful in and about the business of
manufacturing, transmitting and
disposing of gas for light, heat, power or other
purposes and consisting of, inter alia,
gas works and plants. engines, furnaces, boilers,
generators, machinery, shafting,
betting, retorts, tanks, condensers, pumps, steam
holders, gas holders, purifiers,
scrubbers, tar extractors, separators, dehydrators,
pressure regulators, blowers,
compressors, motors, exhausters, tracks and sidings, oil-
gas generators, expansions tanks, gas
mains, pipes, gas transmissions systems, gas
distribution systems, tunnels, service
pipes, pipe line fittings, gates, valves, connections,
implements, gas meters, lamps, and all
other appliances, instruments, equipment, stores,
repair parts and the like, now owned by
the Company, and all other property for similar
uses hereafter in any way acquired by
the Company or to which it may hereafter be
entitled, ft being hereby expressly
agreed that any and all personal property covered
by the foregoing description, whether or
not located in or upon the real property of the
Company, shall be considered as
fixtures and appurtenances constituting part of the
real property of the Company.
3. All easements, rights of way,
rights, franchises, contracts,
permits, leases,
licenses, privileges and appurtenances
belonging or in any way appertaining to the
premises and property hereinbefore
referred to, or to any other property now owned by
the Company or hereafter acquired by ft,
and every part thereof, or derived or acquired
by the Company in any manner
whatsoever; and all the reversions, remainders,
revenues, rents, issues, and profits of
all property at any time subject hereto and all the
estate, right, title, interest, property,
possession, claim, and demand whatsoever, as well
at law as in equity, of the Company, of,
in, and to the same and every part thereof.
4. All other property of whatever
kind and description, whether
real or personal,
now owned or which may at any time
hereafter be acquired by the Company, and
whether or not specifically described or
referred to herein, excepting, however, all materials
and supplies consumable in the
operation of the properties of the Company, all
merchandise and products acquired,
manufactured, produced, or held for sale in the
usual course of business, all
automobiles and motor vehicles, and all cash, accounts
receivable, stocks, bonds, notes, and
other securities which are neither specifically
pledged with the Trustee nor required by
any provision of the Indenture to be pledged
with the Trustee.
5. All money, securities, or
property of any kind which
may at any time be
paid, conveyed, assigned, transferred
or delivered to the Trustee by the Company or
10
any other person, to be held hereunder
as additional security for all the
Bonds, which
money, securities, or property the
Trustee is hereby authorized to receive and accept.
UNDEFT AND SUWECT to any
excepted encumbrances of the
character defined in
Subdivision A of Section 3.04 of the
Original Indenture.
forever. To HAVE ANc) To HOLD the
same unto the Trustee, fts successors and assigns,
IN TRUST, nevertheless, for the
benefit of the Trustee in respect of
all reasonable
compensation due ft hereunder and all
expenses and liabilities incurred by ft pursuant
hereto without negligence or bad
faith, and for the equal and ratable benefit and
security of the holders, present and
future, of all Bonds at any time issued and
outstanding under the Indenture, and
for the enforcement of the payment thereof, when
payable, and the performance and
observance of the covenants and conditions
contained in the Indenture, without
preference, priority or distinction (except as
otherwise herein specifically provided),
of any one of such Bonds over any other of such
Bonds by reason of priority in issue
or acquisition or otherwise, so that, except as
aforesaid, the principal (which term
as used in this Twentieth Supplement where the
context requires includes the
Redemption Price contained in the form of Bond
hereinbefore set forth in the recitals
contained in the Twentieth Supplement ff the Bond
is called for redemption) of and
interest on each Bond at any time issued and
outstanding under the Indenture shall
be equally and ratably secured hereby, as if all
of such Bonds had been executed,
authenticated, delivered, sold, and negotiated
simuftaneously with the execlrtion and
delivery hereof; and it is hereby covenanted and
declared that all Bonds at any time
issued and outstanding under the Indenture are to
be issued, authenticated, and
delivered, and that the mortgaged property is to be held
by the Trustee, upon and subject to
the covenants, conditions, uses and trusts as in
the Original Indenture and in any
supplemental indenture, including the Twentieth
Supplement, contained;
PROVIDED, HOWEVER, and these
presents are upon the condition
that if the
Company, fts successors or assigns,
shall pay or cause to be paid the principal of and
interest on all said Bonds, together
with the premium, d any, payable on such of said
Bonds as may have been called for
redemption prior to maturity, or shall provide, as
permitted by the Indenture, for the
payment thereof by depositing with the Trustee the
entire amount due or to become due
thereon for principal, interest and premium, if any,
and ff the Company shall also pay
or cause to be paid all other sums payable under
the Indenture by it, then the
Indenture, including the Twentieth Supplement, and the
estate and rights thereby granted
shall cease, determine and be void, otherwise to be
and remain in full force and effect.
IT is HEREBY FURTHER
COVENANTED, DECLARED AND AGREED
by and between the
Company and the Trustee for the
benefit of those who shall hold Bonds of the
Eighteenth Series, or any of them, as
follows:
1 1
ARTICLE I
DESCRIPTION OF BONDS OF THE
EIGHTEENTH SERIES
The Bonds of the Eighteenth Series
shall be designated as 'South Jersey
Gas
Company First Mortgage Bonds, 6.95% Series
due 2013,' and shall be issuable as fully
registered Bonds, substantially in the form
hereinbefore reefted, but they may bear and
contain such legends and modifications
as may be required by law or as may be
necessary to comply with requirements of
any stock exchange or of any regulatory
board, body or official. Except as provided
in Section 2.11 of the Original Indenture, the
aggregate principal amount of Bonds
authorized by the Twentieth Supplement is limited
tO $35,000,000, and except as aforesaid,
and except for exchanges and transfers, the
Company shall not execute and the Trustee
shall not authenticate or deliver Bonds of
the Eighteenth Series in excess of such
aggregate principal amount.
Except as otherwise provided in
Section 2.11 of the Original Indenture,
Bonds
of the Eighteenth Series shall be dated and
shall bear interest from the January I or
July 1 next preceding the date of
authentication thereof by the Trustee, except that ff
the authentication date is an interest
payment date, such Bonds shall be dated, and
shall bear interest from, the
authentication date; provided, however, that if upon
authentication of any Bond of the Eighteenth
Series upon the transfer or in exchange
for other such Bonds or under Section 2.6
of the Twentieth Supplement, interest on
the Bonds of the Eighteenth Series shall be
in default, the date from which such Bond
shall bear interest shall be the date to
which interest shall have been paid upon the
Bond transferred or surrendered in
exchange for the Bond so authenticated; and
providedprther, however, that in the case of
the authentication of Bonds of the Eighteenth
Series upon an original issue
hereunder, such Bonds may be dated the date of
authentication thereof and in such case
shall bear interest from such date of
authentication.
Bonds of the Eighteenth Series shall
mature July 1, 2013, and shall bear
interest
on the unpaid principal amount thereof at
the rate of 6.95% per annum (computed on
the basis of a 360-day year of twelve 30-
day months), payable on January 1 and July
1 in each year, commencing January 1,
1994, and shall bear interest payable on
demand at the rate of 7.95% per annum
(computed on the basis of a 360-day year of
twelve 30-day months) on any overdue
principal and, to the extent permitted by
applicable law, on any overdue interest,
from the due date thereof. until the obligation
of the Company with respect to the payment
thereof shall be discharged. All payments
of principal and interest shall be made at
the corporate trust office of New Jersey
National Bank or fts successor as Trustee
under the Indenture, or at such other places
as the Company may agree pursuant to
Section 2.7 of the Twentieth Supplement, in
.such coin or currency of the United States of
America as at the time of payment shall
constitute legal tender for the payment of
public and private debts.
12
Bonds of the Eighteenth Series
shall be issuable in denominations of
$100,000
and in any integral muftiple of $1,000
larger than $100,000; provided, however, that such
Bonds may be issued in denominations of less
than $100,000 when necessary to satisfy
the requirements of Section 2.6 of the
Twentieth Supplement. Each Bond of such
Series, and each of the authorized
denominations, shall bear such appropriate
distinguishing numbers and letters as may be
adopted by the Company.
Bonds of the Eighteenth Series
shall be transferable and exchangeable
as to
denominations and registered name upon
the same terms and conditions as are
applicable under Section 2.1 0 of the
Original Indenture to fully registered Bonds of the
lnftial Series.
ARTICLE 11
REDEMPTION OF AND
SINKING FUND FOR
BONDS OF THE
EIGHTEENTH SERIES
SECTION 2.1. Bonds of the
Eighteenth Series shall be subject to
redemption,
either as a whole or in part from time to
time:
(a) after June 30, 2003.
and subject to any
required approval of
the
Board of Regulatory Commissioners
of New Jersey (the 'New Jersey BRCI),
formerly the Board of Public
Utilities of New Jersey, or any successor agency,
at the election of the Company
upon payment of an amount equal to the
applicable percentage of the
principal amount thereof specified under the
heading Redemption Price, in the
tabulation contained in the form of Bond
hereinbefore set forth in the
recitals in the Twentieth Supplement;
(b) after June 30,
2003, upon payment
of the principal
amount
thereof, through the operation of
the sinking fund for the Bonds of the
Eighteenth Series provided for in
Section 2.2 of the Twentieth Supplement;
(c) upon payment of
the principal
amount thereof
through the
application pursuant to Subdivision
C of Section 6.07 of the Original Indenture
of proceeds from the condemnation
of property subject to the lien of the
Indenture, or proceeds of sale of
such property to a governmental body or
agency having the power of eminent
domain made as a result of the threat
(evidenced in writing by such
body or agency) of condemnation of such
property, but not through the
application of money from any other sourc&; or
(d) by any combination of
clauses (a), (b) and
(c);
together in each case with accrued interest to
the date fixed for redemption. Except as
set forth in this Section 2.1, the Bonds of
the Eighteenth Series are not subject to
redemption.
13
SECTION 2.2. As further security for
the Bonds of the Eighteenth Series and
to create and maintain a sinking fund
(herein referred to as the 'sinking fund') for the
benefit thereof, the Company covenants to
pay in cash, so long as any of the Bonds
of the Eighteenth Series remain outstanding,
to the Trustee, on or before July 1 of
each year, commencing July 1, 2003, and
continuing to and including July 1, 2012,
the sum of $3,150,000. For purposes of this
Section 2.2, any redemption of less than
all of the Bonds of the Eighteenth Series
pursuant to Section 2.1 of the Twentieth
Supplement shall be applied to principal
payments in inverse order of their scheduled
maturity.
In addition to the mandatory
payments for the sinking fund required
by this
Section, the Company may, at fts option, pay
in cash to the sinking fund, at the same
time as any annual mandatory sinking
fund payment is made, not more than an
additional $3,150,000 (such payments being
herein referred to as voluntary sinking fund
paymentsm), provided, however, that the
amount of such voluntary sinking fund payments
shall not exceed $8,750,000 in the
aggregate. The right to make voluntary sinking fund
payments pursuant to this paragraph shall be
non-cumulative and shall lapse ff, and to
the extent, not exercised on any date when
such voluntary sinking fund payment may
be made. The Company shall give the Trustee
not more than 90 nor less than 60 days
written notice of fts intention to make a
voluntary sinking fund payment and the amount
of such payment.
The Trustee shall select for
redemption, in the manner set forth in
Section 2.5
of the Twentieth Supplement, such principal
amount of Bonds of the Eighteenth Series
as the amount of such sinking fund payment
to be paid in cash on or before the next
succeeding July 1 shall be sufficient to
redeem. The Trustee shall certify to the
Company the numbers of the Bonds selected
and the portion of the principal amount
of each Bond that is to be redeemed.
The Trustee shall, not more than 60
nor less than 30 days in advance of
such
July 1, give, in the name of the Company,
written notice that Bonds of the Eighteenth
Series bearing the serial numbers specified
have been called for redemption through
the sinking fund, that they will be due and
payable on such July 1 at the corporate
trust office of the Trustee at a stated
amount which shall be the principal amount
thereof, together with accrued interest to
said date, and that all interest thereon will
cease to accrue after said date (unless
the Company shall default in making such
payment on said date). Such notice of
redemption shall be given to the registered
owners of Bonds Which, or portions of which,
are to be redeemed by mailing the same
to such registered owners, at their
respective addresses as the same appear on the
registry books kept in accordance with
Section 2.10 of the Original Indenture.
SECTION 2.3. The election of the
Company to redeem any of the Bonds of
the
Eighteenth Series, other than through the
sinking fund above provided for, shall be
evidenced by a resolution of fts Board of
Directors calling all or a stated principal
14
amount thereof for redemption on a
stated date. At least 40 days prior
to such
redemption date (or at such later time as
shall be satisfactory to the Trustee), the
Company shall file with the Trustee a
certified copy of such resolution. The Company
shall on or before such redemption date
deposit with the Trustee the total redemption
price of all Bonds so called, with accrued
interest thereon to the redemption date.
If the Company elects to redeem less
than all of the Bonds of the
Eighteenth
Series, the particular Bonds to be redeemed
shall be selected by the Trustee in the
manner set forth in Section 2.5 of the
Twentieth Supplement from the Bonds of the
Eighteenth Series then outstanding. The
Trustee shall certify to the Company the
numbers of the Bonds selected and the
portion of the principal amount of each Bond
that is to be redeemed.
The Trustee shall, not more than 60
nor less than 30 days in advance of
such
redemption date, give, in the name of the
Company, written notice that Bonds of the
Eighteenth Series bearing the serial numbers
specified have been called for redemption,
that they will be due and payable on such
redemption date at the corporate trust office
of the Trustee at a stated amount (which
shall be the applicable redemption price), and
that all interest thereon will cease to
accrue after said date (unless the Company shall
defauft in payment of the amount necessary
to effect such redemption). If all the Bonds
of the Eighteenth Series be called, the
notice shall so state and may omit the numbers
thereof. The notice shall state that the
Bonds will be payable at the stated redemption
price, plus accrued interest to the
redemption date. If the redemption date is an interest
payment date,the notice may state that the
interest payment due on such date will be
paid in the usual manner. Such notice of
redemption shall be given, to the registered
owners of Bonds which, or portions of which,
are to be redeemed by mailing the same
to such registered owners, at their
respective addresses as the same appear on the
aforementioned registry books.
Before any money shall be applied
by the Trustee to the redemption of
Bonds
under this Section, the Company shall
deliver to the Trustee a certificate of the
President or a Vice President of the
Company stating that all conditions precedent
provided for herein (including compliance
with all applicable covenants) relating to such
redemption have been complied with.
SECTION 2.4. Each Bond so called
for redemption under either Section
2.2
or Section 2.3 shall be due and payable
at the places and price and on the date
specified in such notice. Subject to any
agreement entered into pursuant to Section
2.7, beginning on the date when each Bond
shall be due and payable as aforesaid, the
holder thereof may present the same for
redemption, in negotiable form, and the Trustee
shall, out of the money deposited with R
under the provisions of this Article, then and
there pay and redeem the same or cause
the same to be paid and redeemed; after
said date (unless upon such presentation on
or after the due date the Trustee shall
have refused or failed to make such payment)
all further interest shall cease to accrue
thereon. In any case where the
redemption date is an interest payment date, the
15
interest payment due on such date on Bonds
called for redemption may be paid in
the
usual manner.
SECTION 2.5. Whenever less than
all of the outstanding Bonds of
the
Eighteenth Series are to be redeemed, the
principal amount of Bonds of the Eighteenth
Series to be redeemed shall be prorated
among the holders of the Bonds of the
Eighteenth Series in the proportion, as
nearly as practicable, that their respective
holdings bear to the aggregate principal
amount of Bonds of the Eighteenth Series
outstanding on the date of selection. In
making any proration pursuant to this provision,
the Trustee may make such adjustment as in
fts sole discretion ft may determine to the
end that the principal amount prorated to
each holder of Bonds shall be in each
instance $1,000 or an integral muftiple
thereof.
SECTION 2.6. If only a part of any
fully registered Bond shall be selected
by
the Trustee in the manner set forth in
Section 2.5 of the Twentieth Supplement, the
notice of redemption hereinbefore provided
for shall specify the distinctive number of
such Bond and the portion of the
principal amount thereof to be redeemed. Upon
surrender of such Bond for partial
redemption and upon payment of th.e portion so
ries, in aggregate
called for redemption, a new Bond or Bonds
of the Eighteenth Se '
principal amount equal to the unredeemed
portion of such surrendered Bond, shall be
executed by the Company, authenticated by
the Trustee, and delivered to the registered
owner thereof, without expense to such
holder.
SECTION 2.7. The Company may
enter into an agreement with the
registered
owner of any Bond of the Eighteenth Series
(or prospective registered owner of any
such Bond) providing for the payment
without the surrender of such Bond to such
registered owner (or to such prospective
registered owner, upon becoming a registered
owner of any such Bond) of the principal of
and the premium, d any, and interest on
such Bond or any part thereof at a place
other than the offices or agencies therein
specified, and for the making of notation as
to principal payments, ff any, on such Bond
by such registered owner or by any agent of
the Company or of the Trustee. A copy
of any such agreement shall be filed with
the Trustee. The Trustee is authorized to
approve any such agreement, and shall
thereafter make all payments on such Bond as
provided in such agreement. The Trustee
shall not be liable for any act or omission to
act on the part of the Company, any
such registered owne@ or any agent of the
Company in connection with any such
agreement.
SECTION 2.8. So long as any of
the Bonds of the Eighteenth Series
shall
remain outstanding, upon any application
by the Trustee of funds from sources
described in Section 2.1(c) of the
Twentieth Supplement to the redemption of Bonds
pursuant to Subdivision C of Section 6.07 of
the Original Indenture, ff less than all
Bonds of all Series then outstanding are to
be redeemed, a principal amount of Bonds
of the Eighteenth Series shall be redeemed
by the application of a portion of such
funds, such portion to be determined by
muftiplying the total amount of such funds so
to be applied by a fraction the numerator
of which shall be the aggregate amount
16
required for the redemption, pursuant to
Subdivision C of Section 6.07
(exclusive of
accrued interest, d any), of all of the
Bonds of the Eighteenth Series outstanding on
the date of the selection for such
redemption and the denominator of which shall be the
aggregate amount required for the
redemption, pursuant to such Subdivision C of
Section 6.07 (exclusive of accrued
interest, ff any), of all of the Bonds of all Series
outstanding on such date; provided,
however, that nothing in this Section 2.8 shall restrict
the manner (Dro rata, by lot or otherwise)
by which the remaining balance of such funds
shall be applied to the redemption of
Bonds of any Series other than the Eighteenth
Series.
SECTION 2.9. Bonds paid or
retired by the use of any money
subject to the
lien of the Indenture, or by the operation
of the sinking fund provided for in this Anicle
11 (whether through mandatory sinking
fund' payments or voluntary sinking fund
payments), or by the operation of any
replacement, purchase, or other analogous fund,
or made the basis of a credit against the
obligations of the Company under any sinking,
replacement, purchase, or other
analogous fund, may thereafter be made the basis of
the authentication of a like principal
amount of Bonds of any Series under the provisions
of Section 3.06 of the Original Indenture.
SECTION 2.1 0. To the extent the
Company shall elect to include the
same, the
principal amount of Bonds redeemed by
the operation of the sinking fund provided for
in this Article 11 (whether through
mandatory sinking fund payments or voluntary sinking
fund payments) shall be included
among the Bonds purchased, paid or otherwise
acquired or retired by the Company
specified in Section 5.19(A)(3) of the Original
Indenture.
ARTICLE Ill
ADDiTIONAL COVENANTS OF
THE COMPANY
SECTION 3.1. So long as any
Bonds of the Eighteenth Series
shall remain
outstanding, the Company will not
declare or pay any dividend on any shares of fts
Common Stock (other than dividends
payable in shares of fts Common Stock) or make
any distribution on such shares, or
purchase or otherwise acquire any such shares
(except shares acquired without cost
to the Company), or advance any amount to or
invest any amount in the property,
securities or indebtedness of, or guarantee any
indebtedness of, any subsidiary N, after
giving effect to such action, the sum of the
aggregate amounts so declared, paid,
distributed, purchased, acquired, advanced,
invested or guaranteed after December
31, 1992 would exceed the aggregate net
income of the Company available for
dividends on fts Common Stock earned after such
date plus the sum of $35,000,000. For
the purposes of this Section 3.1, 'subsidiary'
shall mean any corporation directly or
indirectly controlled by or under common control
with the Company.
17
For the purpose of calculating
the requirements of this Section, the
net income
of the Company available for
dividends on fts Common Stock shall be determined in
accordance with such system of
accounts as may be prescribed by any governmental
authority having jurisdiction in the
premises or in the absence thereof in accordance
with generally accepted accounting
principles as in effect at such time; provided, however,
that (a) the deductions for depreciation
or renewal or replacement reserves in respect
of each year shall be the amount taken
therefor on the accounts of the Company or the
amount required to be stated in item (1)
of the Replacement Fund Cerifficate to be filed
under Section 5.19 of the Original
Indenture with respect to the period ending at the
close of such year, whichever be greater,
and (b) no deduction or adjustment shall be
made from gross income for or in
respect of (i) expenses in connection with the
redemption or retirement of any
securities issued by the Company, including any
amount paid in excess of the principal or
par or stated value of securities redeemed or
retired, and, ff such redemption or
retirement is effected with the proceeds of sale of
other securities of the Company, interest
on the securities redeemed or retired from the
date on which the funds required for
such redemption or retirement shall be deposited
in trust for such purpose to the date of
such redemption or retirement, (ii) profits or
losses from sales of capital assets or
taxes in respect of such profits, (iii) any
adjustments to retained earnings
(including tax adjustments) applicable to any period
prior to January 1, 1993, (iv) charges for
the write-off of unamortized debt discount and
expense carried on the books of the
Company at December 31, 1992, or (v) charges
for the write-off or write-down of the
amount at which any property of the Company was
carried on fts books at December 31,
1992, to the extent that the same shall be
approved by, or be made pursuant to any
rule, regulation, or order of, any governmental
authority having jurisdiction in the
premises and shall not be required by such authority
to be charged against earnings accumulated
after December 31, 1992.
SECTION 3.2. So long as any
Bonds of the Eighteenth Series
shall remain
outstanding, the Company will satisfy
its obligations under the Replacement Fund
provided for in Section 5.19 of the
Original Indenture first through the use of all available
property additions and retired Bonds of
any Series and then, if and only to the extent
that said property additions and
retired Bonds are not sufficient to satisfy such
obligations, through the use of cash.
SECTION 3.3. So long as any
Bonds of the Eighteenth Series
shall remain
outstanding, in the event that the Company
shall consolidate or merge with or into any
corporation or corporations, or the
Company shall transfer all of fts property and
franchises to any other corporation, the
corporation formed by any such consolidation,
or into which the Company shall be so
merged, or which shall acquire such property
of the Company, shall be a
corporation incorporated under the laws of the United
States, any State or the District of
Columbia.
SECTION 3.4. So long as any
Bonds of the Eighteenth Series
shall remain
outstanding, no owner of any portion of
the mortgaged property will be entitled to any
18
credit against interest payable on any Bonds
by reason of the payment of any tax
on
such property.
ARTICLE IV
ISSUE AND AUTHENTICATION OF BONDS OF
THE EIGHTEENTH SERIES
Upon compliance by the Company
with the requirements of the
Indenture,
including the Twentieth Supplement, for the
issuance of additional Bonds, Bonds of the
Eighteenth Series up to an aggregate
principal amount of $35,000,000 may forthwith,
or from time to time, be executed by the
Company and delivered to the Trustee, and
the Trustee shall thereupon authenticate and
deliver said Bonds in accordance with the
provisions of Article Ill of the Original
Indenture. The signature of the officers -of the
Company on Bonds of the Eighteenth Series
may be by facsimile ff so authorized by
the Company's Board of Directors.
ARTICLE V
AMENDMENT TO THE
ORIGINAL INDENTURE
SECTION 5.l. Section 3.06 of the
Original Indenture shall be amended to
delete
paragraph (2) of subsection A thereof, so
that such Section shall thereafter read in full
as follows:
'SECTION 3.06.
ADDITIONAL BONDS--CONDITIONS
FOR
AUTHENTICATION--ACQUISITION OR
REFUNDING OF BONDS ISSUED
HEREUNDER. Whenever any Bonds
shall have been acquired, paid, or retired
by the Company, or whenever the
Company shall have made provision for the
payment of any Bonds (as such
provision for payment is defined in Article 1), or
shall surrender any Bonds to the
Trustee, thereupon or at any time thereafter
additional Bonds shall be
authenticated and delivered by the Trustee in a
principal amount not exceeding the
principal amount of the Bonds so acquired,
paid, retired, surrendered, or for
the payment of which such provision shall have
been made, upon application by
the Company and upon compliance with the
following conditions, in addition to
those specified in Section 3.03:
A. Any Bonds so acquired,
paid, retired or
surrendered, or for
which
payment shall have been so
provided, may, when deposited with the Trustee
as below provided in Subdivision
B, be uncancelled or may have been
cancelled; provided, however, that
in respect of any which shall have been
cancelled prior to or concurrently
with the application for such authentication
(and, for the purposes of this
Subdivision A, in case payment shall have been
so provided for such Bonds, the
same shall be deemed to have been cancelled
19
upon the date of such provision for
payment) no Bond shall have been
aLAhenticated in lieu thereof or in
exchange therefor or by virtue of the
acquisition, payment, retirement,
cancellation, or such provision for payment
thereof; nor shall any money have
been withdrawn hereunder by virtue of such
acquisition, payment, retirement,
cancellation, or provision.
B. There shall be
delivered to the
Trustee the following
documents:
(1) The Bonds so
acquired,
paid, retired,
or
surrendered.
Any
of such Bonds which
shall be uncancelled shall be in negotiable form
or accompanied by
proper instruments of assignment and transfer,
and shall be
accompanied by all unmatured coupons, ff any,
appertaining thereto.
In the case of any Bonds for which payment
shall have been so
provided, such Bonds shall not then be required
to be deposited, but in
lieu thereof the Company shall deliver to the
Trustee a statement
describing the same; thereafter, upon payment
of such Bonds, the same
shall forthwith be delivered to the Trustee
for cancellation. In
the case of any Bonds which shall have been
paid or retired or
surrendered and which shall have theretofore been
cancelled and cremated
by the Trustee, such Bonds shall not be
required to be
deposited, but in lieu thereof the Company shall deliver
to the Trustee a
statement describing the same and specifying the
date upon which the
same were paid or retired or surrendered and
were cancelled and
cremated.
(2) If the Bonds so
deposited shall
be cancelled
Bonds, or ff
in
lieu of such deposit of
Bonds a statement by the Company shall be
delivered as provided in
subparagraph (1) of this Subdivision B, a
certificate by the
President or a Vice-President of the Company,
stating such facts in
connection therewith as may reasonably be
required to show
compliance with the conditions specified in
Subdivision A.
C. If the Bonds so
acquired, paid,
retired,
surrendered, or the
payment of which has been so
provided for, shall not at any time theretofore
have been bona fide issued by the
Company, and ff they shall bear interest at
a lower rate per annum than the new
Bonds the authentication of which is then
applied for, the net earnings
condition specified in Subdivision C of Section 3.04
shall be complied with, and the
Company shall deliver to the Trustee (i) a net
earnings certificate, conforming to
the provisions of Subdivision E (3) of Section
3.04, showing the fixed charges
and net earnings of the Company in such
reasonable detail as may be
required to show compliance with said condition,
(ii) an opinion of counsel conforming
to the provisions of
Subdivision E (4) (b)
of Section 3.04, and (iii) a
certificate by the trustee or mortgagee of each prior
lien conforming to the provisions of
Subdivision E (5) of Section 3.04.8
20
SECTION 5.2. The foregoing
amendment to Section 3.06 of the
Original
Indenture shall become effective Upon the
earlier to occur of the following:
(a) the date as of which
no Bonds remain
outstanding that
were part
of a series of Bonds initially
issued prior to the issuance of Bonds of the
Eighteenth Series;
(b) the date as of which
a supplemental
indenture to the
Indenture
is executed by the Company and
the Trustee selling forth the foregoing
amendment to Section 3.06 of the
Original Indenture, after the holders of at least
66 2/3% of the Bonds then
outstanding have consented to and approved the
execution of such supplemental
indenture, all in accordance with Article X and
the other relevant provisions of
the Original Indenture.
SECTION 5.3. Each holder of
any Bonds of the Eighteenth Series, by
the
acceptance by such holder of such Bonds,
(a) consents to and approves the foregoing
amendment to Section 3.06 of the Original
Indenture, and consents to and approves the
execution by the Company and the Trustee of
a supplemental indenture to the Indenture
setting forth such amendment, and (b)
agrees to execute such instrument or
instruments as may be requested by the
Company or the Trustee to evidence such
consent and approval in accordance with
Section 10.02 of the Original Indenture.
ARTICLE VI
CONCERNING THE
TRUSTEE
SECTION 6.1. The Trustee, for ftseff
and fts successors in said trusts,
hereby
accepts the trust hereby provided and
agrees to perform the same upon the terms and
conditions contained in the Indenture,
including the Twentieth Supplement. The Trustee
shall not be responsible in any manner
whatsoever for the recitals in the Twentieth
Supplement.
SECTION 6.2. So long as any
Bonds of the Eighteenth Series shall
remain
oLAstanding, any successor trustee to the
Trustee shall at all times be a corporation
which shall have at all times a
combined capital and surplus of not less than
$100,000,000. If any such successor
trustee publishes reports of condition annually,
pursuant to law or to the requirements of
a supervising or examining authority, the
combined capital and surplus of such
successor trustee at any time for the purposes
of this Section shall be deemed to be fts
combined capital and surplus as set forth in
fts most recent report of condition so
published.
21
ARTICLE VII
CONCERNING EVENTQ OF
DEFAULT
SECTION 7.1. So long as any
Bonds of the Eighteenth Series shall
remain
outstanding, the following shall constitute
events of defauft within the meaning of
Section 9.02 of the Original Indenture (in
addition to the events of default set forth in
Section 9.02 of the Original Indenture):
(a) ff the Company shall
defauft in the payment
of any portion of
the
principal of any Bond of the
Eighteenth Series, as and when the same shall
have become due, whether at the
stated maturity thereof or upon proceedings
for redemption (pursuant to the
provisions of any sinking, replacement, purchase
or other analogous fund established
in the Original Indenture or in the Twentieth
Supplement or pursuant to any
optional or other redemption) or otherwise;
provided, however, that in the event
the Company and the Trustee shall have
taken all action required to be taken
so that each such payment of principal by
means of wire transfer could
reasonably be expected to be effective on the due
date thereof, but nevertheless, any
such transfer shall not have been credited
to the account of a registered owner
of Bonds of the Eighteenth Series to whom
such payment is required to be made
effective as of the due date, the Company
shall not be deemed to have
defaulted upon the obligation to make such
payment until the expiration of five
days following said due date;
(b) if the Company shall
defauft in the
payment of any
installment
of interest due on any Bond of the
Eighteenth Series and such default shall
continue for a period of 10 days; or
(c) if the Company shall
default in the
performance of or
compliance
with any covenant, condition or term
contained in the Indenture, including the
Twentieth Supplement, and such
default shall continue for 30 days after the
Company shall have knowledge thereof.
SECTION 7.2. So long as any
Bonds of the Eighteenth Series shall
remain
otAstanding, the Company covenants that if at
any time or times or from time to time
an event of defauft referred to in Section 7.1
of the Twentieth Supplement shall occur,
the Company will, on demand of the Trustee,
forthwith pay to the Trustee, for the benefit
of all holders of Bonds then outstanding under
the Indenture, a sum equal to the total
amount then due for principal and interest
on all Bonds then outstanding under the
Indenture, with interest thereon (to the
extent that payment of such interest is
enforceable under applicable law) in accordance
with the terms of the respective Bonds.
Should said sum not be so paid to the
Trustee, ft shall be entitled, at any time
or times and from time to time, in fts own name
and as Trustee of an express trust and
22
without the possession or production of any
Bonds of any Series or coupons, to
recover
judgment for the same against the
Company or any other obligor upon such Bonds.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. As supplemented and
amended by the Twentieth Supplement,
the Indenture is in all respects ratified
and confirmed, and the Indenture, including the
Twentieth Supplement, shall be read as one
instrument. All terms used in the Twentieth
Supplement shall have the same meaning
as used elsewhere in the Indenture except
where the context clearly indicates
otherwise.
SECTION 8.2. The Twentieth
Supplement has been dated as of June
1, 1993
for convenience. The date of actual
execution hereof by each of the parties is the date
shown by the acknowledgement of exectaion
hereof by fts officers.
SECTION 8.3. The Twentieth
Supplement may be executed in
several
counterparts, each of which shall be
considered an original and all collectively as but
one instrument.
SECTION 8.4. The approval of the
New Jersey BRC of the execution and
delivery of these presents, and of the issue
of any Bonds of the Eighteenth Series,
shall not be construed as approval of said
BRC of any other act, matter or thing which
requires approval of said BRC under the laws
of the State of New Jersey; nor shall the
approval of said BRC of the issue of any
such Bonds bind said BRC or any other public
body or authority of the State of New Jersey
having jurisdiction in the premises in any
future application for the issuance of Bonds
under the indenture.
IN WITNESS WHEREOF, the Company
and the Trustee have caused these
presents
to be duly executed under their respective
corporate seals by their respective proper
23
officers, all duly authorized thereunto, and have
caused these presents to be dated as
of the day and year first above written.
SOUTH
JERSEY GAS COMPANY
William F. Ryan
President
Attest: SOUTH
JE
Rs
Ey
GA
S
CO
MP
AN
Y
CORPORATE
SEAL
G. L. BAULIG
1910
G.L. Baulig
NEw JERSEY
Secretary and Assistant
Treasurer
NEw
JERsEy NATIONAL BANK
By MICHA
EL J.
JUDGE
Michael J. Judge
Vice
President
Attest: NEw JE
RS
EY
NA
TI
ON
AL
BA
NK
CORPORATE
SEAL
BETH LAIRD
1970
Beth Laird NEw
JERSEY
Assistant Vice President
24
STATE OF NEw JERSEY
ss.:
COUNTY OF ATLANTIC
BE IT REMEMBERED, that on this 23rd day
of June, 1993, before me, a Notary
Public of New Jersey, personally appeared
WiLLiAm F. RYAN, who, I am satisfied, is
President of South Jersey Gas Company,
one of the corporations named in the
foregoing deed or instrument, and I having
first made known to him the contents
thereof, he acknowledged that he had signed
the same as such officer for and on
behaff of such corporation, that the same
was made by such corporation as its
voluntary act and deed, and sealed with fts
corporate seal, by virtue of authority of its
board of directors, and that he has received,
without charge, a true copy of said
foregoing deed or instrument. All of which is
hereby certified.
W. J. SMETHURST, JR.
W. J. SMETHURST, JR.
NoTARY PUBLIC
Notary Public of New Jersey w. j. SMETHURST, JR.
NEw JERSEY
NOTARY PUBLIC OF NEW JERSEY
My
Commission Expires: my commISSION EXPIRES: JULY 30, 1996
STATE OF NEw JERSEY
ss.:
COUNTY OF MERCER
BE IT REMEMBERED, that on this 24th day
of June, 1993, before me, a Notary
Public of New Jersey, personally appeared
Michael J. Judge, who, I am satisfied, is a
Vice President of New Jersey National Bank,
one of the corporations named in the
foregoing deed or instrument, and I having
first made known to him the contents
thereof, he acknowledged that he had signed
the same as such officer for and on
behaff of such corporation, that the same
was made by such corporation as its
voluntary act and deed, and sealed with fts
corporate seal, by virtue of authority of fts
board of directors. All of which is hereby
certified.
ANNE R. WELLING ANNE R.
WELLING
NOTARY PUBLIC Notary
Public of New Jersey
NEw JERSEY
My
Commission Expires:
ANNE R WELLING
NOTARY PUBLIC OF NEW JERSEY
My
Commission Expires Mar. 1, 1994
25
The within Twentieth Supplemental Indenture has been recorded and filed as
follows:
Date of
County
Recordation Book Page
New Jersey:
Atlantic..............
June 24, 1993 5061 181 et seq.
Burlington............
June 25, 1993 5091 262 et seq.
Camden.............
June 25, 1993 4005 732 et seq.
Cape May............
June 24, 1993 2063 206 et seq.
Cumberland...........
June 25, 1993 1672 233 et seq.
Gloucester............
June 25, 1993 2401 058 et seq.
Salem...............
June 25, 1993 719 031 et seq.
Exhibit (10)(d)
SERVICE AGREEMENT
between
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
and
SOUTH JERSEY GAS COMPANY
SERVICE AGREEMENT UNDER RATE SCHEDULE
GSS
THIS AGREEMENT entered into this first day of October,
1993, by and between TRANSCONTINENTAL GAS PIPE LINE
CORPORATION, a Delaware corporation, hereinafter
referred to as."Seller", first party., and SOUTH JERSEY GAS
COMPANY, a New Jersey corporation, hereinafter referred
to as "Buyer", second party,
W I T N E S S E T H:
WHEREAS, Buyer desires to purchase and Seller desires
to sell natural gas storage service under Seller's Rate
Schedule GSS as set forth herein; and
WHEREAS, Seller and Consolidated Natural Gas
Transmission Corporation
("CNG") have entered into an agreement providing for
underground natural gas storage service by CNG for
Seller; and
WHEREAS, pursuant to the terms of the Joint
Stipulation approved by the Commission's order dated
July 16, 1993 in Docket Nos. RS92-86-003, RP92-108-000,
and RP92-137-000 which amended Seller's certificate in
Docket No. CP61-194, Seller and Buyer agree to a twenty
year contract term for the Storage Demand Quantity
and Storage Capacity Quantity set forth in Article I
hereof;
NOW THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
SERVICE TO BE RENDERED
Subject to the terms and provisions of this agreement
and of Seller's Rate Schedule GSS, Seller agrees to
receive from Buyer for storage, inject into storage
for Buyer's account, store, withdraw from storage
(or cause to be
injected into storage for Buyer's account, stored, and
withdrawn from storage)
and deliver to Buyer, quantities of natural gas as follows:
To withdraw from storage or cause
to be withdrawn from
storage, the gas stored for Buyer's account up
to a maximum quantity
in any day of 14,347 Mcf, which quantity
shall be Buyer's Storage Demand.
To receive and store or cause to be
stored up to a total quantity at any one
time of 740,965 Mcf, which quantity shall
be Buyer's Storage Capacity Quantity.
ARTICLE II
POINT OF DELIVERY
The Point or Points of Delivery for all natural gas
delivered by Seller to
Buyer under this agreement shall be at or near:
(1) Harmony Road Meter Station, located adjacent to
Seller's Woodbury line, northwesterly of the
junction of said line and Harmony Road, East
Greenwich Township, Gloucester County, New Jersey.
(2) Lawnside Meter-Station, located adjacent to Seller's
Trenton-Woodbury line
near the New Jersey Turnpike and the boundary line
between the Boroughs of Barrington and Lawnside,
Camden County, New Jersey.
2
SERVICE AGREEMENT UNDER RATE SCHEDULE
GSS
(Continued)
ARTICLE II
POINT OF DELIVERY
(Continued)
(3) Prospect Meter Station, located adjacent t 0
Seller's Woodbury line,
southerly of U. S. Highway No. 130 in Logan
Township, Gloucester County, New Jersey-
(4) Woodbury Meter Station, located adjacent to
Seller's Woodbury line,
Southwesterly of the junction of Highland
Road and Egg Harbor Road,
Deptford Township, Gloucester County, New Jersey.
(5) Shell Meter Station, located at approximately
milepost 12.49 on Seller's Woodbury line in
Gloucester Countys New Jersey.
(6) West Deptford meter Station, located in the
Mid-Atlantic Industrial Park area of West
Deptford Township, Gloucester County, New Jersey.
ARTICLE III
DELIVERY PRESSURE
Seller shall deliver natural gas to Buyer at
the Point(s) of Delivery at a pressure(s) of: not
less than two hundred (200) pounds per square inch
gauge, or at such other pressures as may be agreed upon
in the day-to_day operations of Buyer and Seller.
ARTICLE IV
TERM OF AGREEMENT
This agreement shall be ef f ective October 1,
1993 and shall remain in force and effect through
March 31, 2013.
ARTICLE V
RATE SCHEDULE AND PRICE
Buyer shall pay Seller for natural gas
service rendered hereunder in
accordance with Seller'B Rate Schedule GSS and the
applicable provisions of the General Terms and
Conditions of Seller's FERC Gas Tariff as filed
with the Federal Energy Regulatory Commission, and
as the same may be amended or
superseded from time to time at the initiative of either
party.
Such rate schedule and General Terms and Conditions
are by this reference made a part hereof.
ARTICLE VI
MISCELLANEOUS
1. The subject headings of the Articles of
this agreement are inserted
for the purpose of convenient reference and are not
intended to be a part of this agreement nor to be-
considered in any interpretation of the same.
3
SERVICE AGREEMENT UNDER RATE SCHEDULE
GSS
(Continued)
ARTICLE VI
MISCELLANEOUS
(Continued)
2. This agreement supersedes and cancels as of
the ef f ective date hereof
the following contract:
None. Service Agreement dated April 13,
1972 expired on April 1, 1992.
3. No waiver by either party of any one or
more defaults by the other
in the performance of any provisions of this
agreement shall operate or be construed as a waiver of
any future default or defaults, whether of a like
or different character.
4. This agreement shall be interpreted,
performed and enforced in
accordance with the laws of the State of New Jersey.
5. This agreement shall be binding upon, and
inure to the benefit of the
parties hereto and their respective successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have
caused this agreement to be signed by their
respective Presidents or Vice Presidents thereunto
duly authorized and have caused their respective corporate
seals to be hereunto
af fixed and attested by their respective Secretaries or
Assistant Secretaries the
day and year above written.
ATTEST:
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
[SEAL]
By
Secretary
Thomas E. Skains (Seller)
Senior Vice President
Transportation and Customer Services
ATTEST:
SOUTH JERSEY GAS COMPANY
By Secretary
William C. Bingham
Senior Vice President
Gas Supply
4
Exhibit (10)(i)
SERVICE AGREEMENT
between
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
and
SOUTH JERSEY GAS COMPANY
SERVICE AGREEMENT UNDER RATE SCHEDULE
LSS
THIS AGREEMENT entered into this first day of
October, 1993, by and between TRANSCONTINENTAL GAS PIPE
LINE CORPORATION, a Delaware corporation, hereinafter
referred to as "Seller", first party, and SOUTH JERSEY GAS
COMPANY a New Jersey corporation, hereinafter referred
to as "Buyer", second party,
W I T N E S S E T H:
WHEREAS, Buyer desires to purchase and Seller
desires to sell natural gas storage service under
Seller's Rate Schedule LSS as set forth herein; and
WHEREAS, Seller and Penn York Energy Corporation
("Penn York") entered into
an agreement dated October 3, 1984 providing for
underground natural gas storage service by Penn York for
Seller; and
WHEREAS, Seller and Consolidated Natural Gas
Transmission Corporation ("CNG") are extending the term
of the-agreement providing for-underground natural
gas storage service by CNG for Seller; and
WHEREAS, pursuant to the terms of the Joint
Stipulation approved by the Commission's Order dated
July 16, 1993 in Docket Nos. RS92-86-003, RP92-108-000,
and RP92-137-000 which amended Seller's certificate in
Docket No. CP84-335, Seller and Buyer agree to a twenty
year contract term extension;
NOW THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
SERVICE TO BE RENDERED
Subject to the terms and provisions of this
agreement and of Seller's Rate Schedule LSS, Seller
agrees to receive from Buyer for storage, inject
into storage for Buyer's account, store, withdraw from
storage (or cause to be injected into storage for
Buyer's account, stored, and withdrawn from storage)
and deliver to Buyer, quantities of natural gas (less fuel
allowance) as follows:
To withdraw from storage or cause to be
withdrawn from storage, transport and deliver to
Buyer at the delivery pointb set forth below, the
gas stored for Buyer's account up to a maximum
quantity in any day of
(a) 12,000 dt, for the period October 1,
1993 through March 31, 1994, and
(b) 8,250 dt, for the period April 1, 1994
through March 31, 2013, which quantity shall be
Buyer's Storage Demand.
To receive and store or cause to be stored up
to a total quantity at
any one time of
(a) 1,224,060 dt, for the period October 1,
1993 through March 31, 1994, and
(b) 816,000 dt, for ihe period April 1,
1994 through March 31, 2013,
which quantity shall be Buyer's Storage Capacity
Quantity.
ARTICLE II
POINT OF DELIVERY
The Point or Points of Delivery for all natural gall
delivered by Seller to Buyer under this agreement shall
be at or near:
2
SERVICE AGREEMENT UNDER RATE
SCHEDULE LSS
(Continued)
ARTICLE II
POINT OF DELIVERY
(Continued)
(1) Harmony Road Meter Station, located adjacent to
Seller's Woodbury line, northwesterly of the
junction of said line and Harmony Road,
East
Greenwich Township, Gloucester County, New Jersey.
(2) Lawnside Meter Station, located adjacent to
Seller's Trenton-Woodbury line near the New
Jersey Turnpike and the boundary line between the
Boroughs of Barrington and Lawnside, Camden
County, New Jersey.
(3) Prospect Meter Station, located adjacent to
Seller's Woodbury line,
southerly of U. S. Highway No. 130 in Logan
Township, Gloucester County,
New Jersey.
(4) Woodbury Meter Station, located adjacent to
Seller's Woodbury line,
southwesterly of the junction of Highland
Road and Egg Harbor Road,
Deptford Township, Gloucester County, New Jersey.
(5) Shell Meter Station, located at approximately
milepost 12.49 on Seller's Woodbury line in
Gloucester County, New Jersey.
(6) West Deptford Meter Station, located in the
Mid-Atlantic Industrial Park area of West
Deptford Township, Gloucester County,.New Jersey.
ARTICLE III
DELIVERY PRESSURE
Seller shall deliver natural gas to Buyer at the
Point(s) of Delivery at a pressure(s) of: not less
than fifty (50) pounds per square inch gauge, or at
such other pressures as may be agreed upon in the day-
today operations of Buyer and Seller.
ARTICLE IV
TERM OF AGREEMENT
This agreement shall be effective October 1, 1993
and shall remain in force and effect until April 1,
2013.
ARTICLE V
RATE SCHEDULE AND PRICE
Buyer shall pay Seller for natural gas
service rendered hereunder in accordance with Seller's
Rate Schedule LSS and the applicable provisions of
the General Terms and Conditions of Seller's FERC
Gas Tariff as filed with the Federal Energy
Regulatory commission, and as the same may be
amended or
superseded from time to time at the initiative of either
party. Such rate
schedule and General Terms and Conditions are by
this reference made a part
hereof.
3
SERVICE AGREEMENT UNDER RATE SCHEDULE
LSS
(Continued)
ARTICLE VI
MISCELLANEOUS
The subject headings of the Articles of this
agreement are inserted
for the purpose of convenient reference and are not
intended to be a part of this agreement nor to be
considered in any interpretation of the same.
2. This agreement supersedes and cancels as of
the effective date hereof
the following contract:
Service Agreement dated October 31, 1984.
3. No waiver by either party of any one or more
defaults by the other
in the performance of any provisions of this agreement
shall operate or be construed as a waiver of any future
default or defaults, whether of a like or different
character.
4. This agreement shall be interpreted '
performed and enforced in
accordance with the laws of the State of New JerBey.
5. This agreement shall be binding upon, and
inure to the benefit of the
parties hereto and their respective successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have caused
this agreeme'nt to be signed by their respective
Presidents or Vice Presidents thereunto duly
authorized and have caused their respective corporate
seals to be hereunto
affixed and attested by their respective Secretaries or
Assistant Secretaries the
day and year above written.
ATTEST:
TRANSCONTINENTAL GAS PIPELINE
CORPORATION
By
Thomas E. Skains
Senior Vice President
Transportation and Customer Services
SOUTH JERSEY GAS COMPANY
By
William C. Bingham, Jr.
Senior Vice President
Gas Supply
Exhibit (10)(i)(b)
SERVICE AGREEMENT
BETWEEN
TRANSCONTINENTAL GAS PIPE LINE CORPORATION AND
SOUTH JERSEY GAS COMPANY
SERVICE AGREEMENT UNDER RATE SCHEDULE ESS
THIS AGREEMENT entered into
this first clay of November, 1993,
by and between TRANSCONTINENTAL GAS
PIPE LINE CORPORATION, a Delaware
corporation, hereinafter referred to as
"Seller," first party, and SOLTTH JERSEY GAS
COMPANY, hereinafter referred to as "Buyer,"
second party,
WITNESSETH
WHEREAS, Seller has made available to
Buyer storage capacity from its Eminence
Storage Field under Part 284 of the
Commission's Regulations; and Buyer desires to
purchase and Seller desires to sell natural
gas storage service under Seller's Rate Schedule
ESS as set forth herein:
NOW, THEREFORE, Seller and Buyer agree
as follows:
ARTICLE I
SERVICE TO BE RENDERED
1. Subject to the terms and
provisions of this agreement and of Seller's
Rate Schedule ESS, Seller
agrees to inject into storage for Buyer's
account, store and withdraw from storage,
quantities of natural gas as follows:
To withdraw from storage up
to a maximum quantity on
any day of 39,373 Mcf,
which quantity shall be
Buyer's Storage Demand
Quantity, or such greater
dally quantity, as appler-
able from time
to time, pursuant to the terms
and conditions of Seller's
Rate Schedule ESS.
To inject into storage a
maximum quantity on any
day of 5,250 Mcf, which
quantity shall be Buyer's
Storage Injection Quantity, or
such greater dally quantity,
as applicable from time to
time, pursuant to the terms
and conditions of Seller's
Rate Schedule ESS.
To receive and store up to a
total quantity at any one time
of 327,243 Mcf, which
quantity shall
be Buyer's Storage Capacity
Quantity.
ARTICLE II
POINT(S) OF RECEIPT AND DELIVERY
The Point of Receipt for injection of
natural gas delivered to Seller by Buyer and the
Point of Delivery for withdrawal of natural
gas delivered by Seller to Buyer under this
agreement shall be at the point of
interconnection
of Seller's pipeline facilities and its Eminence
Storage Field located in Covington County,
Mississippi. Such gas shall be delivered or
received at the prevailing pressure in
Seller's pipeline system not to exceed the
maximum allowable operating pressure.
ARTICLE III
TERM OF AGREEMENT
This agreement shall be effective
November 1, 1993 and shall remain in force
and effect until March 31, 2001, and year to
year thereafter, subject to termination by
either party upon six (6) months advance
written notice
to the other party.
SERVICE AGREEMENT UNDER RATE SCHEDULE ESS
(Continued)
ARTICLE IV
RATE SCHEDULE AND PRICE
1. Buyer shall pay Seller for
natural gas delivered to Buyer bereunder
in accordance with Seller's
Rate Schedule ESS and the applicable provisions
of the General Terms and Conditions of
Seller's FERC Gas Tariff as filed with the
Federal Energy Regulatory Commission, and
as the same may be legally amended or
superseded from time to time. Such Rate
Schedule and General Terms and Conditions
are by this reference made a part
hereof.
ARTICLE V
MISCELLANEOUS
1. The subject headings of the
Articles of this agreement are inserted for
the purpose of convenient
reference and are not intended to be part of
this agreement nor to be considered in any
interpretation of the same.
2. This agreement supersedes
and cancels as of the effective date
hereof the following contracts
between the parties hereto:
3. No waiver by either party of
any one or more defaults by the other
in the performance of any
provisions of this agreement sball operate or
be construed as a waiver bf any future
default or defaults, whether of a like or
different character.
4. This agreement shall be
interpreted, performed and enforced in
accordance with the laws of the
State of Texas.
5. This agreement shall be
binding upon, and inure to the benefit of
the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties
hereto have caused this agreement to be
signed by their respective officers or
representatives thereunto duly authorized.
TRANSCONTINENTAL GAS PIPELINE CORPORATION
(Seller)
By
Thomas E. Skains, Senior Vice President
Transportation and Customer Services
SOUTH JERSEY GAS COMPANY
(Buyer)
By
William C. Bingham, Jr., Senior Vice President,
Gas Supply
Transcontinental Gas Pipe line Corporation
2800 Post Oak Boulevard
P.O. Box 1396
Houston, Texas 77251-1396
713-439-2000
October 26, 1993
Mr. Bob Barbieri
South Jersey Gas Company
One South Jersey Plaza
Route 54
Folsom, New Jersey 08037
Dear Bob:
Transcontinental Gas Pipe Line Corporation (TGPL) and South
Jersey Gas Company executed a Rate Schedule ESS
Service Agreement, effective November 1, 1993, as a part of
TGPL's compliance with the Federal Energy Regulatory
Commission's (FERC) Order No. 636 in
Docket No. RP92-86. Notwithstanding anything contained in
Article III (Term) thereof, South Jersey Gas Company hereby
agrees not to exercise its contract termination rights under
the Rate Schedule ESS Service Agreement as long as TGPL has an
obligation to provide Rate Schedule FS service to South Jersey
Gas Company.
Very truly yours,
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
By:
Thomas E. Skains
Senior Vice President
Transportation and Customer Services
ACCEPTED AND AGREED TO:
South Jersey Gas Company
BY:
William C. Bingham, Jr.
Sr. Vice President, Gas Supply
AMENDMENT TO SERVICE AGREEMENT UNDER RATE SCHEDULE ESS
THIS AMENDMENT is made and entered into
effective as of the first day of December,
1993 by and between SOUTH JERSEY GAS
COMPANY, hereinafter referred to as
"Buyer," and TRANSCONTINENTAL GAS PIPE LINE
CORPORATION, hereinafter referred to as "Seller."
WITNESSETH:
WHEREAS, Buyer and Selle r entered
into an Agreement under Seller's Rate
Schedule ESS effective as of November 1, 1993,
(Agreement); and
WHEREAS, Buyer and Seller desire to
amend this Agreement in order to provide
for the increased capacity and deliverability
attributable to Phase I (as described in
Seller's Eminence Expansion Application in
Docket No. CP90-2230-000) of Seller's Eminence
Storage Field Expansion approved by the
Federal Energy Regulatory Commission
(Commission) on April 18, 1991, in Docket
No. CP90-2230-000, and the allocation of such
increased deliverability in accordance with
the Commission's Order on October 4, 1993, in
Docket No. RS92-86-004, et. al., (October 4
Order); and
WHEREAS, Buyer and Seller agree that
the Agreement shall be further amended
effective as of the in-service date of Phase II
(as described in Seller's Expansion Application
in Docket No. CP9O- 2230-005) of Seller's
Eminence Storage Field Expansion to provide for
any applicable revisions to the level of
deliverability and capacity service compared to
Buyer's deliverability and capacity as of
December 1, 1993 in order to comply with the
allocation authorized by the aforementioned
October 4 Order; and
WHEREAS, Buyer and Seller agree that
the Agreement shall be further amended
effective as of the in-service date of Phase III
(as described in Seller's Expansion Application
in Docket No. CP9O- 2230-005) of Seller's
Eminence Storage Field Expansion to provide for
any applicable revisions to the level of
deliverability and capacity service compared to
Buyer's deliverability and capacity as of the
effective date of Phase 11 in order to comply
with the allocation authorized by the
aforementioned October 4 Order.
NOW THEREFORE, in consideration of
the premises and mutual covenants
hereinafter contained, the parties amend the
Agreement as follows:
1 . Article I is hereby deleted in its
entirety effective December 1, 1993 and the
following substituted therefor for the period
extending until the in-service date of Phase 11
of Seller's Eminence Storage Field Expansion:
ARTICLE I
SERVICE TO BE RENDERED
1 . Subject to the terms and
provisions of this agreement and of
Seller's Rate Schedule ESS, Seller
agrees to inject into storage for Buyer's
account, store and withdraw from
storage, quantities of natural gas as
follows:
To withdraw from storage up to a
maximum quantity on any day
of 68,248 Mcf, which
quantity shall be Buyer's Storage
Demand Quantity, or such
greater daily quantity, as
applicable from time to time,
pursuant to the terms and
conditions of Seller's Rate
Schedule ESS.
To inject into storage a maximum
quantity on any day of 5,250
Mcf, which quantity shall be
Buyer's Storage Injection
Quantity, or such greater daily
quantity, as applicable from
time to time, pursuant to the
terms and conditions of
Seller's Rate Schedule ESS.
To receive and store up to a
total quantity at any ons
time of 480,535 Mcf, which
quantity shall be Buyer's Storage
Capacity Quantity.
AMENDMENT TO SERVICE AGREEMENT UNDER RATE SCHEDULE ESS
(CONTINUED)
2. This Amendment shall be effective
for the period commencing December 1,
1993 and ending on the in-service date of
Phase 11 of Saller's Eminence Storage
Field Expansion. Buyer and Seller hereby
agree to execute
a) a further amendment to
Article I of the Agreement effective
as of the in-service date of Phase
11 of Seller's Eminence Storage
Field Expansion to revise the
capacity and deliverability, as
necessary, to take into account
the Phase 11 expansion and
b) a further amendment to
Article I of the Agreement
effective as of the in-
service date of Phase Ill of
Seller's Eminence Storage Field
Expansion to revise the capacity
and deliverability, as necessary, to
take into account the Phase Ill
expansion.
3. Except as hereinabove amended, the
Agreement shall remain in full force and
effect as written.
IN WITNESS THEREOF, the parties hereto have
executed this Amendment.
TRANSCONTINENTAL GAS PIPELINE CORPORATION
BY
Thomas E. Skains
Senior Vice President
Transportation and Customer Services
SOUTH JERSEY GAS COMPANY
William C. Bingham, Jr.,
Senior Vice President, Gas Supply
Exhibit (10)(i)(j)
SERVICE AGREEMENT
THIS AGREEMENT entered into as of this
20th day of December 1991, by and between
TRANSCONTINENTAL GAS PIPELINE CORPORATION, a
Delaware corporation, hereinafter referred to
as "Seller," first party, and SOUTH JERSEY
GAS COMPANY, hereinafter referred to as
"Buyer" second party,
WITNESSETH
WHEREAS, Buyer has requested and Seller
has agreed to transport on a firm basis up
to the dekatherm equivalent of up to 17,700
Mcf per day of natural gas (plus applicable
fuel and line loss make-up) from point(s) of
receipt on the pipeline system of Texas Gas
Transmission Corporation (Texas Gas) and
redeliver equivalent quantities of natural gas
to point(s) of delivery on Sellers pipeline
system;
WHEREAS, in order to provide such
transportation service, Seller has entered
into underivine firm transportation
arrangements with Texas Gas and CNG
Transmission Corporation (CNG) and is willing
to construct, install and operate such other
facilities necessary to provide such firm
transportation service to Buyer contingent upon
and subject to mutually agreeable operating
terms and conditions and the receipt and
acceptance by Seller of the Federal Energy
Regulatory Commission and@ any other
necessary regulatory approvals required to
construct, install and operate such facilities.
NOW THEREFORE, Seller and Buyer agree as
follows:
ARTICLE 11
POINT(S) OF RECEIPT
Buyer shall deliver or cause to be
delivered gas at the point(s) of receipt
hereunder at a pressure sufficient to allow the
gas to enter the pipeline system at the varying
pressures that may exist in such system from
time to time. In the event the maximum
operating pressure(s) of the pipeline
system, at the point(s) of receipt hereunder,
is from time to time increased or decreased,
then the maximum allowable pressure(s) of
the gas delivered or caused to be
delivered by Buyer at the point(s) of receipt
hereunder shall be correspondingly increased
or decreased upon written notification to
Buyer. The point(s) of receipt for natural
gas received for transportation pursuant to
this agreement and the daily receipt
obligation at each such point shall be:
See Exhibit "A" attached hereto for
the point(s) of receipt and
corresponding daily receipt obligation(s).
ARTICLE Ill
POINT(S) OF DELIVERY
Seller shall redeliver to Buyer or for the
account of Buyer the gas transported hereunder
at the following point(s) of delivery and at a
pressure(s) of:
See Exhibit "B" attached hereto for the
point(s) of delivery and corresponding
pressure(s).
ARTICLE IV
TERM OF AGREEMENT
This agreement shall be effective as of
the later of November 1, 1992 or the date
that the facilities of Seller,, CNG and
Texas Gas necessary to commence service of
all or part of Buyer's TCQ hereunder are
ready for service, and shall remain in force
and in effect through October 31, 2007 and
year to'year thereafter unless terminated by
either party upon twelve months written
notice; provided, however, this agreement
shall terminate immediately and, subject to
the receipt of necessary authorizations, if
any, Seller may discontinue service hereunder
if (a) Buyer in Seller's reasonable judgment
fails to demonstrate credit worthiness and
(b) Buyer falls to provide adequate
security in accordance with Section 7 of
Seller's Rate Schedule FT-NT.
ARTICLE V
RATE SCHEDULE AND PRICE
1. Buyer shall pay Seller for natural gas
delivered to Buyer hereunder in accordance
with Seller's Rate Schedule FT-NT and the
applicable provisions of the General Terms
and Conditions of Seller's FERC Gas Tariff as
filed with the Federal Energy Regulatory
Commission and as the same may be
legally amended or superseded from time to
time. Such Rate Schedule and General
Terms and Conditions are by this reference made
a part hereof.
2. Seller and Buyer agree that the
quantity of gas that Buyer delivers or
causes to be delivered for transportation
hereunder shall include the quantities of
gas retained for applicable compressor fuel
and line loss make-up in providing the
transportation service hereunder, which
quantity may be changed from time to time
and which will be specified in the currently
effective Sheet No. 50 of Volume No. I of
this Tariff which relates to service under
this agreement and which is incorporated
herein.
3. In addition to the applicable charges
for firm transportation service pursuant to
Section 3 of Seller's Rate Schedule FT-NT,
Buyer shall -reimburse Seller for any and all
filing fees incurred as a result of Buyer's
request for service under Seller's Rate
Schedule FT-NT, to 'the extent such fees
are imposed upon Seller by the Federal
Energy Regulatory Commission or any
successor governmental authority having
jurisdiction.
4. Seller shall have the unilateral
right to propose, file and make effective
with the Federal Energy Regulatory
Commission, or other regulatory authority
having jurisdiction, changes and revisions to
the rates and rate design proposed pursuant
to Section 4 of the Natural Gas Act, or to
propose, file and make effective superseding
rates or rate schedulesp for the purpose of
changing the rates, charges, rate design, and
other provisions thereof effective as to
Buyer; provided however that the (i) firm-
character of service (ii) term, (iii)
quantities and (iv) points of receipt and
delivery shall not be subject to unilateral
change under this paragraph. Buyer shall have
the right to oppose any such filings or
proposals by Seller.
ARTICLE VI
MISCELLANEOUS
1. This agreement supersedes and cancels
as of the effective date hereof the following
contract(s) between the parties hereto:
2. No waiver by either party of any one
or more defaults by the other in the
performance of any provisions of this
agreement shall operate or be construed as
a waiver of any future default or defaults,
whether of a like or different character.
3. The interpretation a nd performance of
this agreement shall be in accordance with
the laws of the State of Texas, without
recourse to the law governing conflict of
laws, and to all present and future valid laws
with respect to the subject matter, including
present and future orders, rules and
regulations of duly constituted authorities.
4. This agreement shall be binding upon,
and inure to the benefit of the parties
hereto and their respective successors and
assigns.
5. Notices to either party shall be in
writing and shall be considered as duly
delivered when mailed to the other party at the
following address:
(a) If to Seller:
Transcontinental Gas PipeLine
Corporation
P. 0. Box 1396
Houston, Texas 77251
Attention: Customer Services
(b) If to Buyer:
South Jersey Gas Company
One South Jersey Plaza
Folsom, New Jersey 08037
Attention: William C. Bingham, Jr.
Such addresses may be changed from time to time
by mailing appropriate notice thereof to the
other party by certified or registered mail.
IN WITNESS WHEREOF, the parties hereto
have caused this agreement to be signed by
their respective officers or representatives
thereunto duly authorized.
TRANSCONTINENTAL GAS PIPELINE CORPORATION
(Seller)
ATTEST:
Thomas E. Skeins
Senior Vice President
Transportation & Customer Services
SOUTH JERSEY GAS COMPANY
(Buyer)
ATTEST:
By G. Baulig
Corporate Secretary
William C. Bingham, Jr.
Senior Vice President,
Gas Supply
EXHIBIT "A"
The point(s) of receipt for natural gas received for transportation
pursuant to this agreement and the daily receipt obligation at each such
point shall be:
(Mcf/d)
Points of Receipt
Daily Receipt Obligation*
1. Interconnection between the
2,830 system of Texas Gas and the
tailgate of the Champlin
Processing Plant near Carthage
in Panola County, Texas
2. Interconnection on the system of
4,250 Texas Gas at Cornerstone-Ada in
Webster Parish, Louisiana
3. Interconnection between the system
7,080 of Texas Gas and the tailgate of
the Texaco Henry Plant in Vermilion
Parish, Louisiana
4. Interconnection between the systems
4,5l0 of Texas Gas and Seller at Mamou
(Eunice) in Evangeline Parish,
Louisiana
18,670
These quantities include the quantities of gas retained for
applicable compressor fuel and line loss make-up on the systems of CNG
and Seller, but such auantities do not include the additional quantities of
gas retained for applicable compressor fuel and line loss make-up on
the system of Texas Gas, as provided for in Article V Section 2 of this
agreement. In addition,.service hereunder up to such quantities is
subject to the same terms and conditions applicable to service up to
Buyer's ;TCQ as set forth in footnote I on page 2 of this agreement.
EXHIBIT "B"
The point(s) Of delivery and he pressure(s) at each such Point for
natural gas transported pursuant to this agreement shall be:
Point(s) of Delivery*
Pressure(s)*
Harmony Road Meter Station, located adjacent
to Seller's Not less than three Woodbury
Line, northwesterly hundred and fifty (350)
of the junction of said line Pounds Per
square inch and Harmony Road, East gauge.
Greenwich Townships Gloucester County New
Jersey.
Woodbury Meter Station, located adjacent to
Sellers Not less than three Woodbury Line,
southwesterly hundred and twenty-
of the junction of Highland five (325)
Pounds per Road and Egg Harbor-Road, square
inch gauge.
Deptford Togwnshipp Gloucester County, New
Jersey.
Lawnside Meter Station, located adjacent to
Seller's Not less than three Trenton-
Woodbury Line near hundred (300) Pounds
the New Jersey Turnpike and per square
inch gauge. the boundary line between the
Boroughs of Burlington and Lawnside Camden
County, New Jersey.
Service hereunder is subject to the same terms and conditions
applicable to service up to Buyer's TCQ as set forth In addition deliveries
to or in footnote I on page 2, of this agreement. ti t liveries to
or for the account Of Buyer shall be subject to the limits of the
Delivery-Point Entitlements (DpEs) of the entity receiving gas at the
Point(s) of Delivery, amended from time to time. as such DPEs may be
Buyer Shall notify Seller as soon as Possible in the event the
delivery pressure falls below the delivery point pressure and Seller shall
have eight (8) hours from such notification within which to correct
the pressure deficiency provided however that such 1) limitation shall
not apply in cases of force majeure events or operating conditions beyond
Transco's control.
Exhibit (10)(i)(k)
AMENDMENT TO SERVICE AGREEMENT
THIS AMENDMENT is made and entered into this 5th day of
October 1993 by and between TRANSCONTINENTAL GAS PIPE LINE
CORPORATION, hereinafter referred to as "Seller", and SOUTH
JERSEY GAS COMPANY, hereinafter referred to as "Buyer".
WITNESSETH
WHEREAS, Seller and Buyer have entered into a
Service Agreement under Seller's Rate Schedule FT-NT dated
December 20, 1991, hereinafter referred to as the
"Agreement"; and
WHEREAS, the 'Federal Energy Regulatory Commission in
Docket No. CP90-687-009 issued an order dated September 2,
1993 ("Order") approving the assignment of South Jersey
Energy Company's FT-NT firm transportation capacity to Buyer,
hereinafter referred to as the "Assignment"; and
WHEREAS, Seller has accepted the authorizations granted
in the order; and
WHEREAS, Seller and Buyer desire to amend the
Agreement to reflect the increased Transportation
Contract Quantity ("TCQII) resulting from the Assignment.
NOW, THEREFORE, Seller and Buyer agree to amend the
Agreement as follows:
1. Paragraph I of Article I of the Agreement shall
be deleted in its entirety and replaced by the following:
ARTICLE I
GAS TRANSPORTATION SERVICE
1. Subject to the terms and provisions of this
agreement and of Seller's Rate Schedule FT-NT, Buyer
agrees to deliver or cause to be delivered
natural gas for transportation hereunder (plus
applicable fuel and line loss make-up) and Seller agrees
to receive, transport and redeliver natural gas to Buyer
or for the account of Buyer, on a firm basis, up to,
the dekatherm equivalent of a Transportation Contract
Quantity ("TCQII) of 24,700 Mcf per day effective
November 1, 1993.
2. EXHIBIT "All to the Agreement shall be deleted in
its entirety and replaced by the attached Revised Exhibit
"A".
3. This Amendment shall be effective as of November 1,
1993. Except as herein amended, the Agreement shall
remain in full force and effect pursuant to the terms
thereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be signed by their respective
officers or representatives duly authorized.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
(Seller)
By
Thomas E. Skains
Senior Vice President
Transportation and Customer Services
SOUTH JERSEY GAS COMPANY
(Buyer)
By
William C. Bingham
Sr. Vice President
Gas Supply
REVISED EXHIBIT "A"
The points of receipt for natural gas transportation pursuant to this
agreement and the daily receipt obligation at each such point shall be:
Point of Receipt Daily Receipt Obligation*
(Mcf/d)
1. Interconnection between the 0
system of Texas Gas and the
tailgate of the Champlin
Processing Plant near Carthage
in Panola County, Texas
2. Interconnection on the system 0
of Texas Gas at Cornerstone-Ada
in Webster Parish, Louisiana
3. Interconnection between the 13,024
system of Texas Gas and tailgate
of the Texaco Henry Plant in
Vermilion Parish, Louisiana
4. Interconnection between the 13,022
systems of Texas Gas and Seller
at Mamou (Eunice) in Evangeline
Parish, Louisiana
These quantities include the quantities of gas retained for
applicable compressor fuel and line loss make-up on the systems of
CNG -and Seller, but such quantities do not include the additional
quantities of gas retained for applicable fuel and line loss make-up on
the system of Texas Gas.
SOUTH JERSEY GAS COMPANY
M E M O R A N D U M
5 May 1993
TO G. L. Baulig
FROM: W. C. Bingham, Jr.
SUBJECT FT-NT AMENDMENT TO SERVICE
AGREEMENT, TEXAS GAS-CNG TRARSMISSION - TRANSCO
PROJECT
Attached herewith to be placeed In the Corporate
Secretary's File is one fully executed original of the FT-NT
Amendment to Service Agreement dated February 1, 1993,
between Transco and South jersey Gas Company.
This Exhibit "A" should replace that which was filed
with the Agreement currently in your file.
W. C. Bingham, Jr.
WCB:LaV
enc-'s
cc: Gas Supply Department
Transcontinental Gas Pipe Line Corporation
Dated 2/1/93 EXHIBIT "A"
The point(s) of receipt for natural gas received for transpor on
pursuant to this agreement daily receipt obligation at each such
Point shall be:
AMENDMENT TO SERVICE AGREEMENT
THIS AMENDMENT is made and entered into this 1st day
of February, 1993 by and between TRANSCONTINENTAL GAS
PIPE LINE CORPORATION, hereinafter referred to as "Seller",
and SOUTH JERSEY GAS COMPANY, hereinafter referred to as
"Buyer".
WITNESSETH
WHEREAS, Seller and Buyer have entered into a
Service Agreement under Seller's Rate Schedule FT-NT dated
December 20, 1991, hereinafter referred to as the "Agreement";
and
WHEREAS, Seller and Buyer desire to amend the Agreement
to realign the daily receipt obligation.
NOW, THEREFORE, Seller and Buyer agree to amend the
Agreement as follows:
EXHIBIT "A" to the agreement shall be deleted in its
entirety and replaced by the following:
"EXHIBIT "A"
The points of receipt for natural gas transportation pursuant to this
agreement and the daily receipt obligation at each such point shall be:
Point of Receipt Daily Receipt Obligation*
(Mcf/d)
1. Interconnection between the 0
system of Texas Gas and the
tailgate of the Champlin
Processing Plant near Carthage
in Panola County, Texas
2. Interconnection on the system 0
of Texas Gas at Cornerstone-Ada
in Webster Parish, Louisiana
3. Interconnection between the 9,333
system of Texas Gas and tailgate
of the Texaco Henry Plant in
Vermilion Parish, Louisiana
4. Interconnection between the 9,332
systems of Texas Gas and Seller
at Manou (Eunice) in Evangeline
Parish, Louisiana
These quantities include the quantities of gas retained for
applicable compressor fuel and line loss make-up on the systems of CNG
and Seller, but such quantities do not include the additional quantities of
gas retained for applicable fuel and line loss make-up on the system of
Texas Gas, as provided for in Article V, Section 2 of this agreement."
IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be signed by their
respective officers or representatives duly authorized.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION (Seller)
By
Thomas E. Skains
Senior Vice President
Transportation and Customer Services
SOUTH JERSEY GAS COMPANY
(Buyer)
By
William C. Bingham
Sr. Vice President
Gas Supply
PRECEDENT AGREEMENT
(Transportation Service)
This Precedent Agreement is made as of the 28th of
December, 1989, by and between TRANSCONTINENTAL GAS PIPE
LINE CORPORATION, a Delaware corporation, hereinafter
Called "Transco" p and SOUTH JERSEY GAS COMPANY, a New
Jersey corporation, hereinafter called "Shipper")
pursuant to the following terms and representations:
WITNESSETH:
WHEREAS, Shipper has requested Transco to transport
on a firm basis commencing on or about November 1, 1991
quantities of natural gas from Points of Receipt on the
pipeline system of Texas Gas Transmission Corporation
("Texas Gas") to Points of Delivery on Transco's pipeline
system; and WHEREAS, Transco is agreeable to providing
such firm transportation service as soon as all regulatory
approvals are secured or as soon thereafter as is
reasonably practicable when all of the necessary
facilities are ready for service; and
WHEREAS, Transco has entered into precedent
agreements for firm transportation with Texas Gas and CNG
Transmission Corporation (IICNG") in order to provide the
requested transportation service; and
WHEREAS, Transco has agreed to file with the Federal
Energy Regulatory Commission ("FERCII), and Shipper has
agreed to support, an application for a certificate of
public convenience and necessity requesting authorization
to provide this firm transportation service and to
construct the necessary facilities; and
WHEREAS, Transco will construct, install and operate
such facilities on a basis consistent with the operating
terms and conditions and assumptions of Transco's Delivery
Point Entitlement proposal, filed at the FERC in Docket
No. CP89-484. In the event such operating terms and
conditions and assumptions are determined to be
inapplicable, it is Transco's intent to diligently pursue
a mutually agreeable alternative design for the proposed
facilities, provided such facilities do not result in a
material increase in the proposed rates for service;
NOW, THEREFORE, in consideration of the
mutual covenants herein assumed, Transco and Shipper
agree as follows:
1. Shipper has requested and Transco has agreed to
transport on a firm basis up to the dekatherm
equivalent of 25 000 Mcf per day ("Transportation
Demand") (IITDII) of natural gas from Points of Receipt on
the pipeline system of Texas Gas to Points of
Delivery on Transcols pipeline system, as set forth in
Exhibit A hereto. Transco and Shipper agree that
Shipper's TD may be decreased by Transco as necessary
to balance service requests by all project participants
with the level of service available as determined in
Transcols sole and reasonable judgment or to reflect
any reallocation of capacity required by FERC as a
condition of approval of Transcols certificate
application. Shipper represents that its participation in
Transco's project is exclusive with respect to the
volumes nominated and the proposed market(s) to be served.
2. Firm transportation service will be provided
in accordance with Transco's proposed Rate Schedule
FT-NT, a copy of which is attached, and the
applicable provisions of the General Terms and Conditions
of Transcols FERC Gas Tariff as filed with the FERC and
as same may be legally amended or superseded from
time to time. The parties hereto recognize, however,
that certain provisions of Transcols Rate Schedule FT-
NT (including but not limited to the gas scheduling
and balancing procedures, penalties, and methods for
determining daily receipts and deliveries) are the
subject of and will be modified in accordance with the
outcome of Transcols current rate proceeding in Docket
No. RP87-7-000, et al.
3. Transco and Shipper agree to seek and
exercise good faith efforts to seek, and to cause any
and all other parties whose participation is required
to seek, such contract rights (including Shipper's gas
supply arrangements and any necessary upstream or
downstream transportation agreements), property rights,
financing arrangements and regulatory approvals
(including but not limited to any licenses, permits,
certifidates or other approvals from the FERC) as may be
necessary to effectuate the receipt of gas at the
Receipt Points and the delivery of gas at the Delivery
Points, in the quantities set forth in Exhibit A
hereto throughout the term of the firm
transportation service agreement contained in Rate
Schedule FT-NT . In this regard, Transco and
Shipper mutually agree to use good faith efforts to
cooperate and support each other in obtaining such
authorizations, financing arrangements, property
rights, contract rights or regulatory approvals
which are required to effectuate the service
contemplated by this Precedent Agreement and to
provide each other with any necessary
information requested in order to obtain such
authorizations, rights or approvals. The parties
further agree to utilize good faith efforts to keep
each other apprised of their progress in obtaining
any necessary contract rights, property rights,
financing arrangements and regulatory approvals.
4. Shipper agrees to reimburse Transco for its pro
rata portion of any and all filing fees incurred by
Transco as a result of seeking authorization to
provide the proposed service to Shipper.
5. This Agreement is subject to
Shipper's demonstration of creditworthiness in a
manner reasonably satisfactory to Transco. In
addition, Shipper shall, on or before June 30, 1990, or
such later date as Transco may deem appropriate,
provide Transco with sufficient data to evidence a
bona fide market, gas supply arrangements, and any
upstream and downstream transportation arrangements
necessary to effectuate the receipt and delivery of gas
as contemplated herein. If the foregoing conditions
precedent set forth in this paragraph have not been
satisfied by June 30, 1990, then at any time
thereafter during which any of said conditions
precedent remain unsatisfied, Transco shall have the
right, at its sole discretion, to terminate this
agreement on ten (10) days advance written notice to
Shipper. To the extent that the FERC shall determine
that information in addition to that required by
Transco is necessary, Shipper shall provide Transco with
such additional information within the time required by
the FERC.
6. The acquisition of all necessary regulatory
approvals referenced in Paragraph 3 on terms reasonably
satisfactory to Transco and the acceptance by
Transco of such required FERC and other regulatory
authorizations are conditions precedent to the
execution of the firm transportation service
agreement contained in Transco's proposed Rate
Schedule FT-NT
7. Performance by Transco of the obligation to
commence construction of facilities is expressly made
subject to the following conditions precedent: (a) the
closing of any necessary financing arrangements for
Shipper's proposed facility (if applicable) upon terms
that provide Transco a reasonable basis to conclude
that Shipper will be able to perform its obligations
under the firm service agreement; and (b) the
commencement of construction of Shipper's proposed
facility (if applicable).
8. If any of the conditions precedent set forth in
Paragraph 6 have not been satisfied on or before
December 31, 1992, then at any time thereafter during
which any of said conditions precedent remain unsatisfied,
either party hereto shall have the right to terminate
this agreement by giving ten (10) days advance written
notice to the other. COMplete the construction Of such
facilities and commence deliveries Contemplate hereunder
by November 1, 1991.
9. The parties hereto recognize that Texas Gas, CNG
and Transco will be required to incur certain expenses
prior to the Commission's authorization of the proposed
transportation service in order to ensure that the
construction of facilities will proceed on a timely basis.
In addition to other remedies available to Transco,
Shipper agrees to reimburse Transco for its pro rata
portion of any and all such reasonable expenses in the
event that the following two conditions are met (1)
Shipper terminates this Precedent Agreement and its
participation in the project in a way that is inconsistent
with Paragraph 8 above; and (2) Transco determines in its
sole and reasonable judgment not to proceed with the
proposed firm transportation service at the proposed level
due to a lack of project participation. In this regard,
Transco agrees to provide Shipper with prior written
notice of any such expense which will exceed
$1,000,000.00.
10. Within thirty (30) days after the date on which
all the conditions precedent specified in Paragraph 6
above are satisfied, Transco and Shipper shall execute and
deliver the firm service agreement contained in Transco's
Rate Schedule FN-NT. Upon execution of the agreement,
Transco shall proceed and shall cause CNG and Texas Gas to
proceed with the construction of authorized facilities in
order to fulfill the terms of this Precedent Agreement and
to make it possible for the commencement of deliveries to
Shipper on or about November 1, 1991. If, after
proceeding with due diligence to obtain necessary
materials and to construct the necessary facilities,
Transco, CNG or Texas Gas is unable to complete such
construction and place such facilities in operation by the
aforementioned date, Transco shall continue to proceed
with due diligence to complete or cause the completion of
such construction, place such facilities in operation, and
commence service to Shipper at the earliest practicable
date thereafter. Transco shall not be liable nor shall
this Precedent Agreement or the aforementioned agreement
be subject to cancellation if, despite its exercise of due
diligence, Transco is unable to complete the construction
of such facilities and commence deliveries contemplated
hereunder by November 1, 1991.
11. Notices under this agreement shall be addressed
as follows:
Shipper:
South Jersey Gas Company
One South Jersey Plaza
Folsom, New Jersey 08037
Attention: Mr. William Bingham, Jr
Transcontinental Gas Pipe Line
Corporation
2800 Post Oak Boulevard
P.O. Box 1396
Houston, Texas 77251
Attention: Senior Vice President
-Transportation and
Customer Services
12. Any individual or entity which shall succeed by
purchase, merger or consolidation to the properties,
substantially as an entirety, of Transco or Shipper, as
the case may be, shall be entitled to the rights and shall
be subject to the obligations of its Predecessor in title
under this agreement. Either party may, without relieving
itself of its obligations under this agreement, assign any
of its rights hereunder to a company with which it is
affiliated, but otherwise no assignment of this agreement
or any of the rights or obligations hereunder shall be
made unless there first shall have been obtained the
consent thereto in writing of the other party. It is
agreed, however, that the restrictions on assignment
contained in this paragraph shall not in any way prevent
either party to this agreement from pledging or mortgaging
its rights hereunder as security for its indebtedness.
13. No modification of the terms and provisions of
this agreement shall be made except by the execution of a
written agreement.
14. This agreement may be executed in multiple
counterpart originals.
IN WITNESS WHEREOF, the parties hereto have executed
this Precedent Agreement as of the day of the year first
above written.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION (Seller)
By
Thomas E. Skains
Senior Vice President
Transportation and Customer Services
SOUTH JERSEY GAS COMPANY
(Buyer)
By
G. L. Baulig
Secretary
William C. Bingham
Sr. Vice President
Gas Supply
EXHIBIT "A"
For each delivery points Shipper shall nominate a daily quantity. The
sum of the daily quantities will equal Shipper's Transportation Demand.
Delivery Transportation
Point(s) 1 Demand
(Mcf/d) 2/
Prospect 0
Harmony Road 7,000
Woodbury 8,000
Lawnside 10,000
Total Transportation
Contract Demand 25,000
Specify Receipt Points and Daily Quantities to be delivered to Texas
Gas Transmission. Receipt PO!nt Quantities are subject to final allocations
by Transco.
Carthage, Texas Mcf/d
Eunice, Louisiana Mcf/d
1. Customers with multiple delivery points should
specify a maximum dally quantity
at each metering station.
2. Specify the quantities to be delivered by Transco
at each deliverv Doint. The dekatherm equivalent
of the volumes to be delivered at the delivery P-
oi-nt(s) will be received at the receipt point(s),
plus an amount for fuel and/or normal operational
loss associated with the transportation.
Transcontinental Gas
Pipe Line Corporation
2800 Post Oak Boulevard
P. 0. Box 1396
Houston, Texas 77251-1396
713-439-2000
William N. Shoff
Vice President Business Development & Planning
Exhibit (10)(k)(k)
SERVICE AGREEMENT NO.38019
CONTROL NO.1993-10-02 - 1417
FTS1 SERVICE AGREEMENT
THIS AGREEMENT. made and entered into this 01
day of November 1993 , by and between:
COLUMBIA GULF TRANSMISSION COMPANY
("TRANSPORTER")
AND
SOUTH JERSEY GAS CO
(SHIPPER")
WITNESSETH: That in consideration of the
mutu.1 covenants herein contained, the
parties hereto agree as follows:
Section 1 - Service to be rendered
Transporter shall perform and Shipper shall
receive the service in accordance with the
provisions of the effective FTS1 Rate Schedule
and applicable General Terms and Condi
tions of Transporter's FERC Gas Tariff, First
Revised Volume No. 1 (Tariff), on file with
the Federal Energ Regulatory Commission
(Commission), as the same may be amended
or superseded in accordance with the rules
and regulations of the Commission herein
contained. The maximum obligations of
Transporter to deliver gas hereunder to or for
Shipper, the designation of the points of
delivery at which transporter shall deliver
or cause gas to be delivered to or for Shipper,
and the points of receipt at which the Shipper
shall deliver or cause gas to be delivered, are
specified in Appendix A. as the same may be
amended from time to time by agreement
between Shipper and Transporter, or in
accordance with the rules and regulations
of the Co mission. Service hereunder shall
be provided subject to the provisions of
Part 284.222 of Subpart G of the
Commission's regulations. Shipper warrants
that service hereunder is being provided
on behalf AN INTERSTATE- PIPELINE COMPANY,
COLUMBIA GAS TRANSMISSION.
Section 2- Term - Service under this Agreement
shall CO mence as of NOVEMBER 1 , 1993 , and
shall continue in full force and effect until
OCTOBER 31, 2009' and from YEAR -to-YEAR
thereafter unless terminated by either party
upon 6 MONTHs' written notice to the other
prior to the end of initial term granted or
any anniversary date thereafter. Shipper and
Transporter agree to avail themselves
of the Commission's pregranted abandonment
authority upon termination of this
Agreement subject to a right of first refusal
Shipper may have under the Commission's
regulations and Transporter's Tariff.
Section 3. Rates. Shipper shall pay the charges
and furnish Retainage as described in the
above-referene Rate Schedule, unless otherwise
agreed to by the parties in writing and
specified as an amendment to the Service
Agreement Section 4. Notices. Notices io
Transporter under this Agreement shall be
addressed to it at Post Office B 683,
Houston, Texas 77001. Attention: Director,
Planning, Transportation and Exchange and
notices Shipper shall be addressed to it at
SOUTH JERSEY GAS CO
ONE SOUTH JERSEY PLAZA
ROUTE 54
FOLSOM, NJ 08037
ATTN- William C. Bingham, Jr.
until changed by either party by written notice.
Section 5 superseded agreements. This service
agreement supersedes and cancels, as of the
ffective date hereof, the following service
agreements: FTS1 34567.
Revision No.
Control No. 1993-10-02 14
Appendix A to Service Agreement No. 38019
Under Rate Schedule FTS1
Between (Transporter) COLUMBIA GULF TRANSMISSION COMPANY
and (Shipper) SOUTH JERSEY GAS CO
Transportation Demand 10,293 Dth/day
Primary Receipt Points
Measuring Measuring Maximum Daily
Point No. Point Name Quantity (Dth/Day)
2700010 CGT-RAYNE 10,293
Revision No.
Control No. 1993-10-02 -1417
Appendix A to Service Agreement No. 38019
Under Rate Schedule FTS 1
Between (TransPorter) COLUMBIA GULF TRANSMISSION COMPANY
and (Shipper) SOUTH JERSEY GAS CO
Primary Delivery Points
Measuring Measuring Maximum Daily
Point No. Point Name Quantity (Dth/Day)
801 TCO-LEACH 10,293
Revision No.
Control No. 1993-10-02 - 1417
Appendix A to Service Agreement No. 380 19
Under Rate Schedule FTS1
Between (Transporter) COLUMBIA GULF TRANSMISSION COMPANY
and (Shipper) SOUTH JERSEY GAS CO
The Master List of Interconnects (MLI) as defined in Section
1 of the General Terms and Conditions is incorporated herein
by reference for purposes of listing valid secondary
interruptible receipt points and delivery points.
CANCELLATION OF PREVIOUS APPENDIX A
Service changes pursuant to this Appendix A shall become
effective as of NOVEMBER 01 , 1993. This Appendix A
shall cancel and supersede the previous Appendix A effective
as of N/A to the Service Agreement referenced above. With
the exception of this Appendix A, all other terms and
conditions of said Service Agreement shall remain in full
force and effect.
SOUTH JERSEY GAS CO
By
William C. Bingham, Jr.
Title: Sr. Vice President, Gas Supply
Date 12 November 1993
COLUMBIA GULF TRANSMISSION COMPANY
By
Title: Vice President
Date 12-01-93
Exhibit (10)(k)(l)
Assignment Agreement No. 37848
Control No. 930905-207
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (Agreement) made and
entered into this 1st Of November, 1993, is by and among
SOUTH JERSEY GAS COMPANY (Assignee), and COLUMBIA
GULF TRANSMISSION COMPANY (Transporter).
W I T N E S S E T H:
WHEREAS, pursuant to a Release Notice complying
with Section 14 of the general terms and conditions of
Transporter's FERC Gas Tariff, Second Revised, Volume No.
I (Tariff) Columbia Gas Transmission released capacity and
service rights under its Service Agreement with Transporter
or under a prior Assignment Agreement, subject to the
requirements of section 14; and
WHEREAS, Assignee is to be awarded all or part of
such capacity and service rights in accordance with
Section 14 of the Transporter's Tariff.
NOW, THEREFORE, in consideration of the mutual
covenants herein contained, the parties agree as follows:
1. Assignment. Transporter hereby assigns to
Assignee the capacity and service rights
hereinafter specified in Releasor's Agreement under
the T-1 Rate Schedule with transporter dated
November 1, 1966, having Agreement Number 90500, to
the extent described in Appendix A attached hereto
and incorporated herein by reference.
obligations of Assignee
(a) Assignee shall be responsible for
nominating and scheduling with Transporter all
service to be rendered by Transporter for the
benefit of Assignee under this Agreement.
(b) Assignee shall comply with (i) the terms
and conditions of Transporter's FTS-1 Rate
Schedule, (ii) Appendix A attached hereto, and
(iii) the General Terms and Conditions of
Transporter's Tariff, under which Assignee
shall be deemed to be a "Shipper".
(c) Assignee shall pay Transporter a
reservation charge equal to the maximum
reservation charge for service under
Transporter's FTS-1 Rate Schedule per
Dth/day per month, plus any demand
surcharges, and (ii) all commodity charges,
plus any commodity surcharges, and (iii) any
penalties or imbalance correction costs
associated with the capacity and service
rights
Assignment Agreement No. 37848
Control No. 930905-207
FORM OF ASSIGNMENT AGREEMENT
(Cont'd)
Assigned under this agreement, as set forth in
Transporter's currently-effective assigned under this Ag s
may be adjusted from time to time upon approval Tariff, as
any of these charge Commission may be adjusted from time to
time upon approval of the Federal Energy Regulator
3. Obligations of Transporter. Transporter shall
provide service to Assignee and shall bill Releasor
and Assignee in accordance with (i) the assigned
Service Agreement or Assignment Agreement described
in Section I above, (ii) Transporter's FTS-1 Rate
Schedule, (iii) Appendix A attached hereto, and (iv)
the General Terms and Conditions of Transporter's
Tariff.
4. Term. Service under this Agreement shall
commence as of November 1, 1993, and shall continue
in full force and effect until Releasor permanently
assigns to Assignee the capacity on Transporter
described herein in accordance with Releasor's Order
No. 636 restructuring proposal as approved by the
Federal Energy Regulatory Commission in Docket No.
RS92-5-000, et al, or upon the further order of the
Commission.
5. Releasor's Recall Rights N/A
6. Notices. Notices given under this Agreement
shall be provided in accordance with Section 29 of
the General Terms and Conditions of Transporter's
Tariff as follows:
If to Transporter: Columbia Gulf Transmission
Company
P. 0. Box 1273
Charleston, West Virginia
25325-1273 ATTN: Transportation &
Exchange
If to Assignee: South Jersey Gas Company
One South Jersey Plaza
Route 54
Folsom, NJ 08037
ATTN: Mr. William C. Binghan
7. Successors and Assigns. Consistent with Section
14 of the General Terms and Conditions of
Transporter's Tariff, this Agreement shall be
binding upon, and shall insure to the benefit of,
the parties hereto and their respective
successors and their respective successors and
assigns; provided that if this Agreement is subject
to recall rights as set forth in Section 5 above,
the capacity and service rights assigned herein
shall not vary the recall provisions contained in
the original assignment.
8. Other Provisions. All applicable provisions
of Transporter's Tariff are incorporated herein
and made a part hereof by reference.
Revision No. N/A
Control No. 930905-207
Appendix A to Service Agreement No.
Under Rate Schedule FTS-1 Between Columbia Gulf
Transmission Company and South Jersey Gas Company
(Shipper)
The Master List of Interconnects (MLI) as
defined in Section 1 of the General Terms and
Conditions is incorporated herein by reference of or
purposes of listing valid secondary interruptible
receipt points and delivery points.
CANCELLATION OF PREVIOUS APPENDIX A
Service changes pursuant to this Appendix A
shall become effective as of November 1, 1993.
This Appendix A shall cancel and supersede the
previous Appendix A effective NA, to the Service
Agreement referenced above. With the exception of
this Appendix A, all other terms and conditions
of said Service Agreement shall remain in full
force and effect.
COLUMBIA GULF TRANSMISSION COMPANY
By
Title: Vice President
Date 12-01-93
SOUTH JERSEY GAS COMPANY
By William C. Bingham
Title: Sr. Vice President, Gas Supply
Date October 22, 1993
Revision No. N/A
Control No. 930905-207
Appendix A to Service Agreement No. Under Rate
Schedule F-TS-1
Between (Transporter) Columbia Gulf Transmission
Company (Shipper) and South Jersey Gas Company
Transportation Demand 35,692 Dth/day
Primary Receipt Points
Measuring Maximum Daily Measuring
Point No. Quantity DT/day Point Name
2700010 35,692 CGT-Rayne 1/
Primary Delivery Point
Measuring Maximum Daily Measuring
Point No. Quantity DT/day Point Name
801 35,692 Leach 1/
1. The Transportation Demand and the firm capacity
rights will fluctuate seasonally for this measuring
point. During the winter season (11-01 through 3-31)
the Transportation Demand rights will be 35,692 DT/day
and during the summer season (04-01 through 10-31)
the Transportation Demand will be 32,844 Dth/d.
No. Assignment Agreement
Control No. 930905-207
FORM OF ASSIGNMENT AGREEMENT
(Cont'd)
9. Applicable Law. Thi s Ag reement shall be
construed and interpreted under the laws of the State of
Texas.
COLUMBIA GULF TRANSMISSION COMPANY
By:
Name:
Title: Vice President
Date: 12-01-93
SOUTH JERSEY GAS COMPANY
By:
Name: William C. Bingham, Jr.
Title: Sr. Vice President, Gas Supply
Date: October 22, 1993
Note: Appendix A attached hereto and incorporated
herein by reference, shall be Transporters form of
Appendix A set forth in Transporter's Tariff
pertaining to Transporter's Rate Schedule under
which the service assigned in this Assignment
Agreement is released , by Transporter, completed
to describe the capacity and service rights assigned
to Assignee under this Assignment Agreement.
Exhibit (10)(k)(m)
Service Agreement No. 39556
Control No. 930905-0277
FTS SERVICE AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of
November, 1993, by
and between COLUMBIA GAS TRANSMISSION CORPORATION ("Seller") and
SOUTH JERSEY GAS
COMPANY ("Buyer").
WITNESSETH: That in consideration of the mutual
covenants herein
contained, the parties hereto agree as follows:
Section 1. Service to be Rendered. Seller shall perform
and Buyer shall
receive service in accordance with the provisions of the
effective FTS Rate Schedule and applicable General Terms and
Conditions of Seller's FERC Gas Tariff,
Second Revised Volume No. 1 (Tariff), on file with the Federal
Energy Regulatory Commission (Commission), as the same may be
amended or superseded in accordance
with the rules and regulations of the Commission. The
maximum obligation of
Seller to deliver gas hereunder to or for Buyer, the
designation of the points
of delivery at which Seller shall deliver or cause gas to be
delivered to or for
Buyer, and the points of receipt at which Buyer shall deliver or
cause gas to be delivered, are specified in Appendix A, as the
same may be amended from time to
time by agreement between Buyer and Seller, or in accordance
with the rules and regulations of the Commission. Service
hereunder shall be provided subject to
the provisions of Part 284.102 of Subpart B of the
Commission's regulations.
Buyer warrants that service hereunder is being provided on behalf
of SOUTH JERSEY
GAS COMPANY, a local distribution company.
- Section 2. Term. Service under this Agreement
shall commence as of
November 1, 1993, and shall continue in full force and effect
until October 31,
2009 and from year-to-year thereafter unless terminated by either
party upon six
(6) months' written notice to the other prior to the end of
the initial term
granted or any anniversary date thereafter. Pre-granted
abandonment shall apply
upon termination of this Agreement, subject to any right of
first refusal Buyer
may have under the Commission's regulations and Seller's Tariff.
Section 3. Rates. Buyer shall pay Seller the
charges and furnish
Retainage as described in the above-referenced Rate Schedule,
unless otherwise
agreed to by the parties in writing and specified as an amendment
to this Service Agreement.
Section 4. Notices. Notices to Seller under this
Agreement shall be
addressed to it at 'Post Office Box 1273, Charleston, West
Virginia 25325-
1273, Attention: Director, Transportation and Exchange and
notices to Buyer
shall be addressed to it at One South Jersey Plaza, Route
54, Folsom, NJ
08037 Attention: Mr. William C. Bingham, until changed by
either party by
written notice.
Service Agreement
No. 39556
Control No.
930905-0277
FTS SERVICE AGREEMENT (Cont'd)
Section 5. Prior Service Agreements. This Agreement is
being entered into
by the parties hereto pursuant to the Commmission's Order No. 636
and its orders
dated July 14, 1993 and September 29, 1993, with respect to
Seller's Order No.
636 compliance filing and relates to the following existing
Service Agreements:
FTS Service Agreement No. 34555, effective November 1,
1989, as it may
have been amended, providing for transportation service
under the FTS Rate
Schedule.
The terms of Service Agreement No. 39556 shall become
effective as of the
effective date hereof, however, the parties agree that neither the
execution nor
the performance of Service Agreement 39556 shall prejudice
any recoupment or
other rights that Buyer may have under@or with respect to the
above-referenced
Service Agreements.
SOUTH JERSEY GAS COMPANY COLUMBIA GAS
TRANSMISSION CORPORATION
By
William C. Bingham, Jr.
Title Sr. Vice President, Gas Supply
Revision No.
Appendix A to Service Agreement NO. 3 9 5 5 6Control No. 1993-09-05-0277
Under Rate SchedUle F T S
Between (Seller) C 0 L U M B I A G A S T R A N S M I S S I 0 N C 0 R P 0 R A T
I 0 N
and(Buyer) SOUTH JERSEY GAS CO
Transportation Demand 10,022 2Dth/day
Primary Receipt Points
Scheduling Scheduling Measuring Measuring Maximum Daily
Point No. Point Name Point No. Point Name Quantity
(Dth/Day)
1 TCO-LEACH 801
10,022
Appendix A to Service Agreement No. 3 9 5 5 6
Under Rate Schedule F T S
Between (Seller)CO LUMB I'A GAS TRAN SMI SS I ON COR POR ATION
and (Buyer) S 0 U T H J E R S E Y G A S C 0
Revision No.
Control No. 1 9 9 3 - 0 9 - 0 5 - 0277
Primary Delivery Points
Maximum Daily
Scheduling Scheduling Measuring Measuring Delivery
Obligation
Point No. Point Name Point No. Point Name (Dth/Day)
109 SOUTH JERSEY GAS CO 109
10,022
Appendix A to Service Agreement No. 3 9 5 5 6
Under Rate Schedule F T S
13etween (Seller)CO LUMB I A GAS TRAN SMISS I ON COR POR ATION
and(Buyer) SOUTH JERSEY GAS CO
Control No. 1 9 9 3 - 0 9 - 0 5 - 0277
Revision No.
The Master List of Interconnects (MLI) as defined in Section 1 of the General
Terms and Conditions of Seller's Tariff is incorporated herein by reference for
the purposes
of listing valid secondary interruptible receipt points and delivery points.
Service changes pursuant to this Appendix A shall become effective as of N 0 V
E M B E R 0 1 . I 9 9 3 This Appendix A shall cancel and supersede the
previous
Appendix A effective as of N / A to the Service Agreement referenced above.
With the exception of this Appendix A, all other terms and
conditions of said Service Agreement shall remain in full force and effect.
SOUTH JERSEY GAS
By
William C. Bingham, Jr.
Its Sr. Vice President, Gas Supply
Date 12 November 1993
COLUMBIA GAS TRANSMISSION CORPORATION
By
Its
Date 11/30/93
Exhibit (10) (k) (n)
Service Agreement
No. 38099
Control No.
930905-130
FTS SERVICE AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of
November, 1993, by
and between COLUMBIA GAS TRANSMISSION CORPORATION ("Seller") and
SOUTH JERSEY GAS
COMPANY ("Buyer").
WITNESSETH: That in consideration of the mutual
covenants herein
contained, the parties hereto agree as follows:
Section 1. Service to be Rendered. Seller shall
perform and Buyer shall
receive service in accordance with the provisions of the
effective FTS Rate Schedule and applicable General Terms and
Conditions of Seller's FERC Gas Tariff,
Second Revised Volume No. 1 (Tariff), on file with the Federal
Energy Regulatory Commission (Commission), as the same may be
amended or superseded in accordance
with the rules and regulations of the Commission. The
maximum obligation of
Seller to deliver gas hereunder to or for Buyer, the
designation of the points
of delivery at which Seller shall deliver or cause gas to be
delivered to or for
Buyer, and the points of receipt at which Buyer shall deliver or
cause gas to be delivered, are specified in Appendix A, as the
same may be amended from time to
time by agreement between Buyer and Seller, or in accordance
with the rules and regulations of the Commission. Service
hereunder shall be provided subject to
the provisions of Part 284.102 of Subpart B of the
Commission's regulations.
Buyer warrants that service hereunder is being provided on behalf
of SOUTH JERSEY
GAS COMPANY, a local distribution company.
Section 2. Term. Service under this Agreement
shall commence as of
November 1, 1993, and shall continue in full force and effect
until October 31,
2009 and from year-to-year thereafter unless terminated by
either party upon six
(6) months' written notice to the other prior to the end of
the initial term
granted or any anniversary date thereafter. Pregranted
abandonment shall apply
upon termination of this Agreement, subject to any right of
first refusal Buyer
may have under the Commission's regulations and Seller's Tariff.
Section 3. Rates. Buyer shall pay Seller the
charges and furnish
Retainage as described in the above-referenced Rate Schedule,
unless otherwise
agreed to by the parties in writing and specified as an amendment
to this Service Agreement.
Section 4. Notices. Notices to Seller under this
Agreement shall be
addressed to it at Post Office Box 1273, Charleston, West
Virginia 25325-
1273, Attention: Director, Transportation and Exchange and
notices to Buyer
shall be addressed to it at One South Jersey Plaza,
Route 54, Folsom, NJ
08037 Attention: Mr. William C. Bingham, until changed by
either party by
written notice.
Service
Agreement No.
38099
Control No.
930905-130
FTS SERVICE AGREEMENT (Cont'd)
Section 5. Pr-ior Service-Agreements. This Agreement is
being entered into
by the parties hereto-pursuant to tne Commmission's Order No.
636 and its orders
dated July 14, 1993 and September 29, 1993, with respect to
Seller's Order No.
636 compliance filing and relates to the following existing
Service Agreements:
CDS Service Agreement No. 36086, effective November 1,
1989, as it may
have been amended, providing for a bundled sales,
transportation and
storage service under the CDS Rate Schedule.
The terms of Service Agreement No. 38099 shall become
effective as of the effective date hereof, however, the
parties agree that neither the execution nor
the performance of Service Agreement 38099 shall prejudice
any recoupment or
other rights that Buyer may have under or with respect to the
above-referenced
Service Agreements.
SOUTH JERSEY GAS COMPANY COLUMBIA GAS
TRANSMISSION CORPORATION
By
William C. Bingham, Jr.
Title Sr. Vice President, Gas Supply
Revision No.
Control No.
Appendix A to Service Agreement No. 3 8 o g g
Under Rate Schedule F T S
Between (Seller)COLUMBIA GAS TRANSMISSION CORPORATION
and (Buyer) SOUTH JERSEY CAS CO
1 9 9 3 - 0 9 - 0 50 1 3 0
Primary Delivery Points
Maximum
Daily
Scheduling Scheduling Measuring 0 Measuring Delivery
Obligation
Point No. Point Name Point No. Point Name
(Dth/Day)
109 SOUTH JERSEY GAS CO 109
12,499
Revision No.
Appendix A to Service Agreement NO. 3 9 0 9 g Control No. 1 9 9 3 0 9 0 5
0 1 3 0
Under Rate SchedUle F T S
Between (Seller) CO LUMB I A GAS TRAN SMISS I ON COR POR ATION
and(Buyer) SOUTH JERSEY GAS CO
Transportation Demand 1 2 , 4 9 9Dth/day
Primary Receipt Points
Scheduling- Scheduling Measuring Measuring Maximum
Daily
Point No. Point Name Point No. Point Name Quantity
(Dth/Day)
901 TCO-LEACH 801
12,489
Appendix A to Service Agreement No. 3 a o oa
Under Rate Schedule F: T S
Between (Seller) C 0 L U M B I A G A S T R A N S M I S S I 0 N C 0 R P 0 R A T
I 0 N
and(Buyer) SOUTH JERSEY GAS CO
Revision No.
Control No. 1 9 9 3 - o 9 - 0 1 3 0
ALL GAS SHALL BE DELIVERED AT EXISTING POINTS OF INTERCONNECTION
WITHIN
THE MDDO'S IN SELLER'S CURRENTLY EFFECTIVE SST SERVICE
AGREEMENT WITH
BUYER, WHICH FOR SUCH POINTS SET FORTH ARE INCORPORATED
HEREIN BY REFERENCE.
Appendix A to Service Agreement NO. 3 8 0 9 9
Under Rate Schedule F T S
Between (Seller)COLUMBIA GAS TRANSMISSION CORPORATION
and(Buyer) SOUTH JERSEY GAS CO
Revision No.
Control No. 1 9 9 3 - o 9 - o 5 - 0 1 3 0
The Master List of Interconnects (MLI) as defined in Section 1 of the General
Terms and Conditions of Seller's Tariff is incorporated herein by referencefor
the purposes
of listing valid secondary interruptible receipt points and delivery points.
Service changes- pursuant to this Appendix A shall become effective as of N 0 v
E M B E R 0 1 , 1 9 9 3
This Appendix A shall cancel and supersede the previous
, to the Service Agreement referenced above. With the exception of this
Appendix A, all other terms and
Appendix A effective as of N / A
conditions of said Service Agreement shall remain in full force and effect.
SOUTH JERSEY GAS 00
By
William C. Bingham, Jr.
Its Sr. Vice President Gas Supply
Date 12 November 1993
COLUMBIA GAS TRANSMISSION CORPORATION
By
7
Its
Date 11/30/93
Exhibit (10) (k) (o)
Service Agreement No.
39305
Control No. 930905-
0273
NTS SERVICE AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of
November, 1993, by
and between COLUMBIA GAS TRANSMISSION CORPORATION ("Seller") and
SOUTH JERSEY GAS
COMPANY ("Buyer").
WITNESSETH: That in consideration of the mutual
covenants herein
contained, the parties hereto agree as follows:
Section 1. Service to be Rendered. Seller shall perform
and Buyer shall
receive service in accordance with the provisions of the
effective NTS Rate Schedule and applicable General Terms and
Conditions of Seller's FERC Gas Tariff,
Second Revised Volume No. I (Tariff), on file with the Federal
Energy Regulatory Commission (Commission), as the same may be
amended or superseded in accordance
with the rules and regulations of the Commission. The maximum
obligation of
Seller to deliver gas hereunder to or for Buyer, the designation
of the points
of delivery at which Seller shall deliver or cause gas to be
delivered to or for
Buyer, and the points of receipt at which Buyer shall deliver or
cause gas to be delivered, are specified in Appendix A, as the
same may be amended from time to
time by agreement between Buyer and Seller, or in accordance with
the rules and regulations of the Commission. Service hereunder
shall be provided subject to
the provisions of Part 284.102 of Subpart B of the
Commission's regulations.
Buyer warrants that service hereunder is being provided on behalf
of SOUTH JERSEY
GAS COMPANY, a local distribution company.
Section 2. Term. Service under this Agreement shall
commence as of
November 1, 1993, and shall continue in full force and effect
until October 31,
2009 and from year-to-year thereafter unless terminated by either
party upon six
(6) months' written notice to the other prior to the end of
the initial term
granted or any anniversary date thereafter. Pre-granted
abandonment shall apply
upon termination of this Agreement, subject to any right of first
refusal Buyer
may have under the Commission's regulations and Seller's Tariff.
Section 3. Rates. Buyer shall pay Seller the
charges and furnish
Retainage as described in the above-referenced Rate Schedule,
unless otherwise
agreed to by the parties in writing and specified as an amendment
to this Service Agreement.
Section 4. Notices. Notices to Seller under this
Agreement shall be
addressed to it at Post Office Box 1273, Charleston, West
Virginia 25325-
1273, Attention: Director, Transportation and Exchange and
notices to Buyer
shall be addressed to it at One South Jersey Plaza, Route
54, Folsom, NJ
08037 Attention: Mr. William C. Bingham, until changed by
either party by
written notice.
Service Agreement
No. 39305
Control No. 930905-
273
NTS SERVICE AGREEMENT (Cont'd)
Section 5. Prior Service Agreements. This Agreement is being
entered into
by the parties hereto pursuant to the Commission's Order No. 636 and
its orders
dated July 14, 1993 and September 29, 1993, with respect to
Seller's Order No.
636 compliance filing and relates to the following existing Service
Agreements:
CDS Service Agreement No. 36086, effective November 1, 1989,
as it may
have been amended, providing for a bundled sales,
transportation and
storage service under the CDS Rate Schedule.
The terms of Service Agreement No. 39305 shall become effective
as of the
effective date hereof, however, the parties agree that neither the
execution nor
the performance of Service Agreement 39305 shall prejudice any
recoupment or
other rights that Buyer may have under or with respect to the
above-referenced
Service Agreements.
Section 6. Conversion. Buyer may convert all or a portion of
its service
under the NTS Rate Schedule to an equivalent level of Transportation
Demand under
Seller's FTS Rate Schedule by providing at least twelve month's
written notice
(Notice Period) of Buyer's intent to convert; provided that the
conversion shall
be effective concurrently with the effective date of revised rates
pursuant to
Seller's first general rate filing under Section 4(e) of the
Natural Gas Act
following the Notice Period. The converted FTS service agreement
shall contain
the same receipt and delivery points, MDDOs ( or applicable portion)
and delivery
pressure requirement (if applicable) as those in effect under the
NTS service
agreement on the date of termination. This conversion option shall
expire on and
any notice by Buyer hereunder must be submitted to Seller by
October 31, 1995.
SOUTH JERSEY GAS COMPANY COLUMBIA GAS TRANSMISS
PORATION
By By
William C. Bingham, Jr.
Title Sr. Vice President. Gas Supply Title 7
Revision No.
Control No.
Appendix A to Service Agreement No. 3 9 3 0 5
Under Rate Schedule N T S
Between (Seller)CO LUMB I A GAS TRAN SMISS I ON COR POR ATION
and(Buyer) SOUTH JERSEY GAS CO
1 9 9 3 - 0 9 - o 5 - 0273
Primary Delivery Points
Maximum Daily
Scheduling Scheduling Measuring Measuring
Delivery Obligation
Point No. Point Name Point No. Point Name
(Dth/Day)
109 SOUTH JERSEY GAS CO 109 22,511
Appendix A to Service Agreement NO. 3 9 3 0 5
Under Rate Schedule N T S
Between (Seller) CO LUMB I A GAS TRAN SMISS I ON COR POR ATION
and(Buyer) SOUTH JERSEY GAS CO
Revision No.
Control No. 1 9 9 3 - 0 9 - 0 5 - 0273
Transportation Demand 2 2 , 5 1 1 Dth/day
Primary Receipt Points
Scheduling Scheduling Measuring Measuring
Point No. Point Name
Maximum Daily
Point No. Point Name
Quantity (Dth/Dav)
801 TCO-LEACH 801
2 2
22511
Appendix A to Service Agreement No. 3 9 3 0 5 is
Under Rate Schedule N T S
Between (Seller)CO LUMB i A GAS TRAN SMISS I ON COR POR ATION
and(Buyer) SOUTH JERSEY GAS CO
Revision No.
Control No. 1 9 9 3 - 0 9 - 0 5 - 0 2 7 3
The Master List of Interconnects (MLI) as defined in Section 1 of the General
Terms and Conditions of Seller's Tariff is incorporated herein by reference for
the purposes
of listing valid secondary interruptible receipt points and delivery points.
Service changes pursuant to this Appendix A shall become effective as of N 0 V
E M B E R 0 1 , 1 9 9 3 This Appendix A shall cancel and supersede the previous
Appendix A effective as of N / A , to the Service Agreement referenced above.
With the exception of this Appendix A, all other terms and
conditions of said Service Agreement shall remain in full force and effect.
SOUTH, JERSEY GAS CO
13y
William C. Bingham, Jr.
Its -Sr. Vice President, gas Supply
Date -12 November 1993
COLUMBIA GAS TRANSMISSION CORPORATION
By
Its
Date 11/30/93
Exhibit (10)(k)(p)
Agreement No. 38130
Control No. 930905-0186
FSS SERVICE AGREEMENT
THIS AGREEMENT, made and entered into this 1st
day of November, 1993, by and between COLUMBIA GAS
TRANSMISSION CORPORATION ("Seller") and SOUTH JERSEY
GAS COMPANY ("Buyer").
WITNESSETH: That in consideration of the
mutual covenants herein
contained, the parties hereto agree as follows:
Section 1. Service to be Rendered. Seller
shall perform and Buyer shall receive the service in
accordance with the provisions of the effective FSS
Rate Schedule and applicable General Terms and
Conditions of Seller's FERC Gas Tariff, Second
Revised Volume No. 1 (Tariff), on file with the
Federal Energy Regulatory Commission (Commission), as
the same may be amended or superseded in accordance
with the rules and regulations of the Commission.
Seller shall store quantities of gas for Buyer up to
but not exceeding Buyer's Storage Contract Quantity
as specified in Appendix A, as the same may be
amended from time to time by agreement between
Buyer and Seller, or in accordance with the rules
and regulations of the Commission. Service hereunder
shall be provided subject to the provisions of Part
284.223 of Subpart G of the Commission's
regulations. Buyer warrants that service hereunder is
being provided on behalf of Buyer
Section 2. Term. Service under this
Agreement shall commence as of November 1, 1993 and
shall continue in full force and effect until
October 31, 2009 and from year to year thereafter
unless terminated by either party upon six months
written notice to the other party prior to the end
of the initial term granted or any anniversary date
thereafter. Pre-granted abandonment shall apply upon
termination of this Agreement, subject to any right of
first refusal Buyer may have under the Commission's
regulations and Seller's Tariff.
Section 3. Rates. Buyer shall pay the charges
and furnish the Retainage percentage set forth in
the above-referenced Rate Schedule and specified in
Seller's currently effective Tariff, unless otherwise
agreed to by the parties in writing and specified as
an amendment to this Service Agreement.
Section 4. Notices. Notices to Seller
under this Agreement shall be addressed to it at
Post Office Box 1273, Charleston, West Virginia
25325-1273, Attention: Director, Transportation and
Exchange, and notices to Buyer shall be addressed
to it at One South Jersey Plaza, Route 54, Folsom,
New Jersey 08037, Attention: Norman Sumner, until
changed by either party by written notice.
Section 5. Prior Service Agreements. This
Agreement is being entered into by the parties
hereto pursuant to the Commission's Order No. 636 and
its orders dated July 14, 1993 and September 29, 1993,
with respect to Seller's Order No. 636 compliance
filing and relates to the following existing Service
Agreements:
FSS Service Agreement No. 34635, effective
November 1, 1989, as it may have been amended,
providing for storage and transportation
service under the FSS Rate Schedule.
Agreement No. 38130
Control No. 930905-0186
CDS Service Agreement No. 36086, effective November
1, 1989, as it may have been amended, providing
for a bundled sales, transportation and storage
service under the CDS Rate Schedule.
WS Service Agreement No. 36087, effective November
1, 1989, as it may have been amended, providing
for a bundled storage and delivery
service under the WS Rate Schedule.
The terms of Service Agreement No. 38130 shall
become effective as of the effective date hereof,
however, the parties agree that neither the execution
nor the performance of Service Agreement No. 38130 shall
prejudice any recoupment or other rights that Buyer may
have under or with respect to the above-referenced
Service Agreements.
COLUMBIA GAS TRANSMISSION CORPORATION
SOUTH JERSEY GAS COMPANY
By
William C. Bingham, Jr.
Sr. Vice President, Gas Supply
Revision No.
Control No. 1993-09-05 0186
Appendix A to Service Agreement No. 38130
Under Rate Schedule FSS
Between (Seller) COLUMBIA GAS TRANSMISSION CORPORATION
and (Buyer) SOUTH JERSEY GAS CO
Storage Contract Quantity 1,160,333 Dth
Maximum Daily Storage Quantity
20,500 Dth per day
CANCELLATION OF PREVIOUS APPENDIX A
Service changes pursuant to this Appendix A shall
become off ective as of NOVEMBER 0 1 , 1993 . This
Appendix A shall cancel and supersede the previous
Appendix A effective as of N/A , to the
Service Agreement referenced above. With the exception
of this Appendix k all other terms and conditions of
said Service Agreement shall remain in full force and
eff ect.
SOUTH JERSEY GAS CO
By
William C. Bingham, Jr.,
Title Sr. Vice President, Gas Supply
Date 12 November 1993
COLUMBIA GAS TRANSMISSION CORPORATION
By
Title
Date 11/30/93
Exhibit (10) (k) (q)
Service Agreement
No. 38086
Control No. 930905-
009
SST SERVICE AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of
November, 1993, by
and between COLUMBIA GAS TRANSMISSION CORPORATION ("Seller") and
SOUTH JERSEY GAS
COMPANY ("Buyer").
WITNESSETH: That in consideration of the mutual
covenants herein
contained, the parties hereto agree as follows:
Section 1. Service to be Rendered. Seller shall perform
and Buyer shall receive service in accordance with the
provisions of the effective SST Rate Schedule and applicable
General Terms and Conditions of Seller's FERC Gas Tariff,
Second Revised Volume No. 1 (Tariff), on file with the Federal
Energy Regulatory Commission (Commission), as the same may be
amended or superseded in accordance
with the rules and regulations of the Commission. The
maximum obligation of
Seller to deliver gas hereunder to or for Buyer, the designation
of the points
of delivery at which Seller shall deliver or cause gas to be
delivered to or for
Buyer, and the points of receipt at which Buyer shall deliver or
cause gas to be delivered, are specified in Appendix A, as the
same may be amended from time to
time by agreement between Buyer and Seller, or in accordance with
the rules and regulations of the Commission. Service hereunder
shall be provided subject to
the provisions of Part 284.223 of Subpart G of the
Commission's regulations.
Buyer warrants that service hereunder is being provided on behalf of
Buyer.
Section 2. Term. Service under this Agreement shall
commence as of
November l-, 1993, and shall continue in full force and effect
until October 31,
2009 and from year-to-year thereafter unless terminated by either
party upon six
(6) months' written notice to the other prior to the end of
the initial term
granted or any anniversary date thereafter. Pre-granted
abandonment shall apply
upon termination of this Agreement, subject to any right of
first refusal Buyer
may have under the Commission's regulations and Seller's Tariff.
Section 3. Rates. Buyer shall pay Seller the
charges and furnish
Retainage as described in the above-referenced Rate Schedule,
unless otherwise
agreed to by the parties in writing and specified as an amendment
to this Service Agreement.
Section 4. Notices. Notices to Seller under this
Agreement shall be
addressed to it at Post Office Box 1273, Charleston, West
Virginia 25325-
1273, Attention: Director, Transportation and Exchange and
notices to Buyer
shall be addressed to it at One South Jersey Plaza, Route
54, Folsom, NJ
08037 Attention: Mr. William C. Bingham, until changed by
either party by
written notice.
Service Agreement
No. 38086
Control No. 930905-
009
SST SERVICE AGREEMENT (Cont'd)
Section 5. Prior Service Agreements.- This Agreement is
being entered
into by the parties hereto pursuant to tne Commission's Order No.
636 and its
orders dated July 14, 1993 and September 29, 1993, with respect to
Seller's Order
No. 636 compliance filing and relates to the following
existing Service
Agreements:
FSS Service Agreement No. 34635, effective November 1, 1989,
as it may
have been amended, providing for storage and transportation
service under
the FSS Rate Schedule.
CDS Service Agreement No. 36086, effective November 1, 1989,
as it may
have been amended, providing for bundled sales, transportation
and storage
service under the CDS Rate Schedule.
WS Service Agreement No. 36087, effective November 1, 1989, as
it may have
been amended, providing for a bundled storage and delivery
service under
the WS Rate Schedule.
The terms of Service Agreement No. 38086 shall become effective
as of the
effective date hereof, however, the parties agree that neither the
execution nor
the performance of Service Agreement 38086 shall prejudice any
recoupment or
other rights that Buyer may have under or with respect to the
above-referenced
Service Agreements.
SOUTH JERSEY GAS COMPANY COLUMBIA GAS TRANSMISSION
CORPORATION
By
William C. Bingham, Jr.
Title Sr Vice President, Gas Supply
APPendix A to Service Agreement No. 3 8 0 8 6
Under Rate Schedule S S T
Between (Seller)CO L UMB i A GAS T RAN SMISS i ON CORPO RAT
and(Buyer) SOUTH JERSEY GAS CO
Revision No.
Control No. 1 0 9 3 - 0 9 - 0 5 - 0 0 0 9
October through March Transportation Demand
20,500 Dth/day
April through September Transportation Demand 10,250 Dth/day
Primary Receipt Points
Scheduling Scheduling Maximum
Daily
Point No. Point Name Quantity
(Dth/Day)
STOW STORAGE WITHDRAWALS
20,500
Appendix A to Service Agreement NO. 3 8 0 9 6
Under Rate Schedule S S T
Between (Seller)CO LUMB I A GAS TRAN SMISS I ON COR POR ATION
and(Buyer) SOUTH JERSEY GAS CO
Control No. 1 9 9 3 - 0 9 - 0 5 - 0 0 9
Primary Delivery Points
Maximum
Delivery
Pressure
Maximum Daily
Scheduling Scheduling Measuring
Measuring Delivery Obligation Obligation
Point No. Point Name -- int
No. Point Name
109 SOUTH JERSEY GAS CO
629898 SWEDESBORO 65,522
350
ApPendix A to Service Agreement NO. 3 8 0 8 a
Under Rate Schedule S S T
Between (Seller)CO LUMB I A GAS TRAN SMISS I ON COR POR ATION
and (Buyer) S 0 U T H JERSEY GAS CO
Revision No.
Control No. 1 9 9 3 - 0 9 - 0 5 - 0 0 9
Sl IF A MAXIMUM PRESSURE IS NOT SPECIFICALLY STATED, THEN SELLER'S OBLIGATION
SHALL BE AS STATED IN SECTION 13 (DELIVERY PRESSURE) OF THE GENERAL TERMS AND
CONDITIONS.
GFNT UNLESS STATION SPECIFIC MDDOS ARE SPECIFIED IN A SEPARATE FIRM
SERViCE AGREEMENT BETWEEN SELLER AND BUYER, SELLER'S AGGREGATE
MAXIMUM DAILY DELIVERY OBLIGATION, UNDER THIS AND ANY OTHER
SERVICE AGREEMENT BETWEEN SELLER AND BUYER, AT THE STATIONS
LISTED ABOVE SHALL NOT EXCEED THE MDDO QUANTITIES SET FORTH
ABOVE
FOR EACH STATION. ANY STATION SPECIFIC MDDOS IN A SEPARATE
FIRM
SERVICE AGREEMENT BETWEEN SELLER AND BUYER SHALL BE
ADDITIVE TO
THE INDIVIDUAL STATION MODOS SET FORTH ABOVE.
Appendix A to Service Agreement NO. 3 9 0 8 6
Under Rate Schedule s s T
Between (Seller)CO LUMB I A GAS TRAN SMISS I ON CORPORATION
and(Buyer) SOUTH JERSEY GAS CO
Revision No.
Control No. 1 9 9 3 - 0 9 - 0 5
0 0 0 9
The Master List of Interconnects (MLI) as defined in Section 1 of the General
Terms and Conditions of Seller's Tariff is incorporated herein by referencefor
the purposes
of listing valid secondary receipt and delivery points.
Service changes pursuant to this Appendix A shall become effective as of N 0 V
E M B E R 0 1 , 1 9 9 3 This Appendix A shall cancel and supersede the previous
Appendix A effective as of N / A , to the Service Agreement referenced above.
With the exception of this Appendix A, all other terms and
conditions of said Service Agreement shall remain in full force and effect.
SOUTH JERSEY GAS CO
By
William C. Bingham, Jr.
Its Sr. Vice President Gas Supply
Date 12 November 1993
COLUMBIA GAS TRANSMISSION CORPORATION
Its
Date 11/30/93
<TABLE>
Exhibit 12
SOUTH JERSEY INDUSTRIES
Calculation of Ratio of Earnings to
Fixed Charges (Before Federal Income Taxes)
(In Thousands)
<CAPTION>
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Income * $ 15,158 $ 15,319 $ 11,905 $ 11,841 $ 13,868
Federal Income Taxes 7,055 7,092 5,449 5,073 5,159
Interest Charges 15,588 15,851 15,310 14,922 12,289
---------- ---------- ---------- ---------- ----------
Total Available $ 37,801 $ 38,262 $ 32,664 $ 31,836 $ 31,316
========== ========== ========== ========== ==========
Total Available 2.43x 2.41x 2.13x 2.13x 2.55x
--------------
Interest Charges
* Net Income before Preferred Stock Dividend and before Cumulative Effect of
a Change in Accounting Principle.
</TABLE>
Table of Contents
1 Financial Highlights
1 Dividend Reinvestment and Stock Purchase Plan
2 Report to Shareholders
4 Company Profiles
6 Issues Management
10 Consolidated Financial Statements and Schedule
19 Management's Discussion
22 Quarterly Financial Data
23 Comparative Operating Statistics
24 SJI Directors
24 SJI Officers
South Jersey Industries, Inc.
South Jersey Gas Company
South Jersey Energy Company
Energy & Minerals, Inc.
- The Morie Company, Inc.
R & T Group, Inc.
- R and T Castellini Company, Inc.
- Cape Atlantic Crane Company, Inc.
- S. W. Downer, Jr. Company, Inc.
- Onshore Construction Company, Inc.
- R & T Castellini Construction Company, Inc.
Cover
EXHIBIT 13
SOUTH JERSEY INDUSTRIES, INC.
MAP - Outline of USA with operational territories of South Jersey
Industries, Inc. superimposed thereon.
ANNUAL REPORT
1993
<TABLE>
1993 HIGHLIGHTS
<CAPTION>
Five-Year Summary of Selected Financial Data South Jersey Industries, Inc. and Subsidiaries
(In Thousands Where Applicable) Year Ended December 31,
---------------------------------------------------------
1993 1992 1991 1990 1989
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Operating Results:
Operating Revenues $333,941 $316,666 $278,921 $260,027 $258,647
========= ========= ========= ========= =========
Operating Income $ 30,746 $ 31,170 $ 27,215 $ 26,763 $ 26,157
========= ========= ========= ========= =========
Income before Cumulative Effect
of a Change in Accounting Principle $ 14,971 $ 15,127 $ 11,702 $ 11,622 $ 13,633
========= ========= ========= ========= =========
Net Income Applicable to Common Stock (1) $ 15,353 $ 15,127 $ 11,702 $ 11,622 $ 13,633
========= ========= ========= ========= =========
Total Assets $531,778 $471,274 $446,424 $421,544 $400,963
========= ========= ========= ========= =========
Capitalization:
Long-Term Obligations and
Redeemable Preferred Stock $146,889 $121,537 $109,429 $114,576 $ 70,247
Common Equity 140,526 132,053 125,006 122,603 114,380
--------- --------- --------- --------- ---------
Total Capitalization $287,415 $253,590 $234,435 $237,179 $184,627
========= ========= ========= ========= =========
Ratio of Income from Operations to Fixed
Charges (Before Federal Income Taxes) 2.43 2.41 2.13 2.13 2.55
========= ========= ========= ========= =========
Earnings Applicable to Common Stock
(Based on Average Shares) (2):
Before Cumulative Effect of a Change in Accounting Principle $ 1.55 $ 1.61 $ 1.28 $ 1.33 $ 1.61
Cumulative Effect of a Change in Accounting Principle 0.04 - - - -
--------- --------- --------- --------- ---------
Earnings per Common Share $ 1.59 $ 1.61 $ 1.28 $ 1.33 $ 1.61
========= ========= ========= ========= =========
Return on Average Common Equity 11.27% 11.77% 9.45% 9.81% 12.04%
========= ========= ========= ========= =========
Share Data (2):
Number of Shareholders 13.1 12.5 11.6 11.7 11.5
Average Common Shares 9,680 9,394 9,159 8,742 8,478
Common Shares Outstanding at Year End 9,805 9,498 9,239 9,029 8,480
Dividend Reinvestment and Stock Purchase Plan:
Number of Shareholders 5.7 5.0 4.0 3.7 3.5
Number of Participating Shares 2,716 2,483 2,190 2,114 1,947
Book Value at Year End $ 14.33 $ 13.90 $ 13.53 $ 13.58 $ 13.49
Cash Dividends Declared $ 1.433 $ 1.412 $ 1.412 $ 1.402 $ 1.358
Market Price at Year End 23 3/4 23 19 7/8 18 5/8 20 3/4
Dividend Payout:
Gross 89.2% 87.1% 109.9% 103.1% 83.5%
Net (3) 64.6% 63.4% 82.8% 89.8% 82.7%
Market Price to Book Value 165.7% 165.5% 146.9% 137.2% 153.8%
Price Earnings Ratio 14.94 14.29 15.53 14.00 12.89
Certain reclassifications have been made of previously reported amounts to conform with classifications used in
the current year.
(1) Included is the Cumulative Effect of a Change in Accounting Principle for Income Taxes.
(2) Per share data has been restated to reflect the 2 percent Stock Dividend declared on January 22, 1993.
(3) Net Dividend Payout Ratio determined using dividends paid less dividends reinvested
through the Company's Dividend Reinvestment and Stock Purchase Plan.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
SJI's Dividend Reinvestment and Stock Purchase Plan provides record shareholders of the Company's
common stock with a way to increase their investment in the Company without payment of any brokerage
commission or service charge.
Shareholders who participate in the Plan may purchase shares of common stock by the automatic reinvestment
of dividends. Optional purchases are permitted each quarter up to a maximum of $6,000 as prescribed in the
Plan. Participants receive a 3 percent discount from the average market price calculated as prescribed in the Plan.
The offer and sale of shares under the Plan will be made only through a Prospectus, which may be obtained by
contacting the Shareholder Records Department, Number One South Jersey Plaza, Route 54, Folsom, NJ 08037-9917,
(609) 561-9000.
- 1 -
</TABLE>
To Our Shareholders
Financial Results
It is my pleasure to report that South Jersey Industries, Inc.'s consolidated
net income reached $15.4 million in 1993, which represents a modest increase
over the previous record $15.1 million achieved in 1992. Earnings per average
share of common stock were $1.59 in 1993 compared with $1.61 in 1992, based on
9.7 million and 9.4 million average shares outstanding, respectively. The
consolidated results include a positive impact of $382,000 from the adoption of
Financial Accounting Standards Board Statement No. 109, "Accounting for Income
Taxes."
The improvement in SJI's consolidated net income during 1993 reflects South
Jersey Gas Company's net income which reached an all-time high of $16.7 million
marking nearly an 8 percent increase over last year's record $15.4 million. New
customer additions, colder weather, the positive impact of FASB 109 and a new
rate structure, implemented in 1992, contributed to Gas Company's outstanding
results.
SJI's nonutility companies experienced lower net income during 1993. The lower
earnings resulted from lower margins and a negative impact from the FASB 109
accounting change. The Morie Company, Inc. experienced significant improvement
in commercial s and sales in New Jersey. This had a positive effect on Morie's
income which was higher in 1993 compared with 1992 before the accounting change.
A highly competitive bidding environment, due to slow economic conditions in the
construction sector, continued to impact R & T Group, Inc. resulting in losses
in both 1993 and 1992. South Jersey Energy Company reported net income in 1993
which surpassed 1992's results by 19 percent. Increased margins from natural gas
sales and the addition of 18 new customers contributed to Energy Company's
greater earnings.
INSERT - BAR CHARTS
SOUTH JERSEY INDUSTRIES, INC.
1989 1990 1991 1992 1993
CONSOLIDATED NET INCOME
APPLICABLE TO COMMON
SHAREHOLDERS ($ MILLIONS) 13.63 11.62 11.70 15.13 15.35
SOUTH JERSEY INDUSTRIES, INC.
1989 1990 1991 1992 1993
EARNINGS PER SHARE
APPLICABLE TO COMMON
SHAREHOLDERS AND
DIVIDENDS DECLARED
(DOLLARS) 1.358 1.402 1.412 1.412 1.433
DIVIDENDS PER SHARE
EARNINGS PER SHARE 1.61 1.33 1.28 1.61 1.59
Looking Ahead
While our consolidated net income for the last two years has been favorable, we
recognize that the business environment is changing and SJI must change with it
to remain profitable and competitive. Through the strategic planning process of
SJI and each of its subsidiaries, we have taken a proactive, rather than a
reactive, approach to change. This dynamic process fosters an atmosphere of
creativity and flexibility within each of our companies, enabling us to
anticipate change and modify our businesses to compete well into the next
- 2 -
century. These modifications include making capital improvements, designing new
marketing strategies, streamlining the workforce, implementing technological
advances, and revising operating procedures and organizational structures.
SJI has evolved into a company with diverse, yet complementary, investments in
natural gas distribution and acquisition services, sand mining and processing,
utility and general construction and environmental cleanup and remediation. A
synergy exists among our subsidiaries which plays an important role in SJI's
growth and development. Our companies work together to identify business
opportunities through the strategic planning and issues management processes.
For example, the recent deregulation of the natural gas industry is creating
opportunities for all of SJI's businesses. As we examine these opportunities, we
are adapting our businesses so that each of our companies will participate in,
and benefit from, the new gas industry environment.
The changing energy regulatory environment has impacted the manner in which the
financial community rates utility companies for bond issues. As part of a $26.6
million base rate case filing in January 1994, Gas Company asked the New Jersey
Board of Regulatory Commissioners to make a policy decision concerning important
financial matters, prior to the litigation of the rate case. The purpose of our
request is to provide the BRC with an opportunity to clearly state its position
on our company's need to meet independent rating agency criteria, which will
enable us to secure optimal interest rates on our First Mortgage Bonds. In so
doing, the time and cost associated with the prosecution of the case will be
minimized. In light of changes in the marketplace, resulting in increased
competition, Gas Company faces more uncertainties and greater risks and should
receive consideration for its positive and successful approach to change. A
successful ruling in this matter will enable Gas Company to secure capital at
the lowest possible cost, provide improved returns to shareholders and maintain
appropriate interest coverages.
Economic conditions continue to create greater competition for each of our
nonutility businesses. This has provided a stimulus for expanding the services
we deliver and the geographic areas in which we market our products and
services. R & T Group is taking several steps to increase its competitiveness in
the marketplace. We have expanded our area of operations into additional Middle
Atlantic States and the Southeast to include North Carolina, Virginia and
Florida. Within the next three years, w e plan to extend our operations into
Maryland, West Virginia, Georgia, Tennessee, Alabama and other states with
strong growth prospects.
To address our growth in the Middle Atlantic and Southeast regions, we formed a
new subsidiary, R & T Castellini Construction Company, Inc. Morie also has
participated in expansion activities by adding to its line of golf course
products and increasing its market share of golf course customers in the
northeastern states.
INSERT: Photograph of William F. Ryan, President
Taking advantage of the new gas industry environment, Energy Company plans to
expand its area of operations outside of southern New Jersey into northern New
Jersey, Pennsylvania, Delaware and Maryland.
In 1994, a valued member of SJI's board of directors, Frederick A. Westphal,
will retire as a director. Mr. Westphal served as a director of our company for
eight years. We thank him for his contribution to our company's growth and
success and wish him a happy, healthy retirement. In looking ahead to the next
decade and the challenges we will face, our subsidiaries will work together to
enhance shareholder value. Through the dedication of our employees and the
support of our shareholders, SJI will build upon its success and continue to
maintain its competitive edge.
William F. Ryan
President
February 16, 1994
- 3 -
Company Profiles
INSERT: BAR CHART -
South Jersey Gas Company
1989 1990 1991 1992 1993
Number of Customers at
Year End (thousands) 210,700 217,600 223,400 229,200 235,100
South Jersey Industries, Inc.
Description: A diversified holding company with investments in natural gas
distribution, natural resources development, utility construction, general
contracting and environmental cleanup and remediation.
Mission: To manage investments which provide shareholders with growth in current
income, complemented with long-term capital appreciation; to diversify, through
acquisition, into similar or related businesses and through internal development
of core businesses.
Subsidiaries: South Jersey Gas Company, South Jersey Energy Company, Energy &
Minerals, Inc., R & T Group, Inc.
Headquarters: Folsom, N.J.
Market Area: SJI's subsidiaries operate along the Eastern Seaboard primarily in
the Middle Atlantic States.
South Jersey Gas Company
Description: Natural gas distribution company; SJI's principal subsidiary
Mission: To provide a fair return to investors; to promote the use of natural
gas as a clean, efficient and economical energy choice; to respond to the needs
of the region with innovative programs and services; to exceed mandated
requirements in providing safe, adequate and proper service at economical rates;
to aggressively pursue additional customers in the service area
Headquarters: Folsom, N.J.
Other Locations: Glassboro, Pleasantville, Millville, Swainton, Waterford, McKee
City, Northfield, Ocean City
Service Area: 2,500 square miles within the seven southern counties of New
Jersey
Customer Profile: 93 percent residential and 7 percent commercial and industrial
as of December 31, 1993
Electric Generation Customer: One customer with sales and transportation of
about 3 bcf in 1993
Cogeneration Customers: Eight facilities served in 1993; combined sales and
transportation service to all cogeneration customers in 1993 totaled about 9
bcf; one additional facility scheduled for service in 1994
Customer Growth: 7,600 new customers added in 1993; a total of 235,000 customers
as of December 31, 1993
Customer Conversions: 2,126 in 1993 compared with 2,178 in 1992
Natural Gas Heat: Over 90 percent of new homes heat with natural gas in Gas
Company's service area
Marketing Opportunities: Commercial and residential growth in Gloucester,
Camden, Burlington and Atlantic Counties; conversions from oil and electric
throughout the service area; targeted opportunities related to Atlantic City's
gaming industry
South Jersey Energy Company
Description: Provides services for the acquisition and transportation of natural
gas
Mission: To provide enhanced earnings capability and reduced economic risk
through a diversified service; to assist industrial and commercial businesses in
acquiring and transporting their own natural gas supplies, as well as supplying
administrative expertise to manage those purchases
Headquarters: Folsom, N.J.
Market Area: New Jersey and surrounding states
Customer Profile: A broad range of end users from small commercial accounts to
large-volume industrials, as well as cogeneration and electric generation
companies
Gas Volumes: 10 bcf sold to customers during 1993
Marketing Opportunities: Expansion into new geographic areas outside of southern
New Jersey with an emphasis on the aggregation of gas supplies for commercial
customers
Energy & Minerals, Inc.
Description: Manages the natural resources development operations of The Morie
Company, Inc., which mines and processes commercial and industrial sand and
gravel
Mission: To provide enhanced earnings capability and reduced economic risk
through product diversity; to provide quality products and services at
competitive prices in an environmentally responsible manner
Headquarters: EMI - Folsom, N.J.; Morie - Millville, N.J.
Morie's Other Locations: Cedar Lake, N.J.; Vineland, N.J.; Port Elizabeth, N.J.;
Mauricetown, N.J.; Tuckahoe, N.J.; Camden, Tenn.; Tuscaloosa, Ala.; Junction
City, Ga.
Morie's Market Area: Eastern United States and Canada
- 4 -
INSERT: Photograph - Construction Worker --
Title -- Each of SJI's subsidiaries will benefit from an improving
construction industry.
Morie's Products: Sand and gravel for industrial, commercial, consumer,
recreational and filtration uses
Morie's Customer Profile: Glass and automobile manufacturers, foundries,
sandblasting operations, hardware and other retail stores, landscaping
businesses, building supply houses, race tracks, baseball fields, tennis courts,
golf courses, landfills and municipalities
Morie's Marketing Opportunities: Expansion into new geographic areas through
aggressive marketing of recreational products
R & T Group, Inc.
Description: Manages the operations of five companies involved in utility
construction, general contracting and environmental services
Mission: To provide enhanced earnings capability and reduced economic risk
through diversified services; to provide quality services at competitive prices
in an environmentally responsible manner Subsidiaries: R and T Castellini
Company, Inc.; Cape Atlantic Crane Company, Inc.; S. W. Downer, Jr. Company,
Inc.; Onshore Construction Company, Inc.; R & T Castellini Construction Company,
Inc.
Headquarters: Folsom, N.J.
Other Locations: Glassboro, N.J.; Pitman, N.J.; Vineland, N.J.; Manassas, Va.;
Raleigh-Durham, N.C.; Orlando, Fla.
Market Area: Middle Atlantic and Southeastern states
Services Provided: Utility Construction - natural gas, telephone, electric,
water and sewer systems; General Contracting - site preparation and development,
crane work, demolition and disposal, dam and bridge construction and
construction of sewerage treatment plants and pump stations; Environmental
Services - site evaluation, underground tank removal and contaminated soil
removal, transport and disposal
Customer Profile: Utilities, builders and developers, utility authorities,
municipal public works departments, the New Jersey Department of Environmental
Protection and Energy, the U.S. Army, the New Jersey Federal Bankruptcy Court
and municipal emergency response teams
Marketing Opportunities: Expansion into new geographic areas particularly in the
environmental remediation and utility construction segments of the business
Statement at end of section:
SJI has evolved into a company with diverse, yet complementary, investments
in natural gas distribution and acquisition services, sand mining and
processing, utility and general construction and environmental cleanup and
remediation.
- 5 -
ISSUES MANAGEMENT
Issues management is playing a greater role in SJI's strategic planning process.
Identifying issues that impact our subsidiaries helps us understand, anticipate
and manage change in the marketplace. As shareholders, you will have questions
about how these issues and changes are affecting our companies. In the following
pages, we will examine how SJI's subsidiaries are growing by embracing the
challenges and opportunities presented by a more competitive environment.
Synergy of SJI's Subsidiaries
Q. What relationships exist among SJI's subsidiary companies? And, how
might those relationships change or evolve over the next five years?
A. Each of SJI's subsidiaries is distinct. Yet, they complement each other
in ways that allow them to work together to benefit our shareholders.
South Jersey Gas Company, South Jersey Energy Company, The Morie
Company, Inc. and R & T Group, Inc. have traditionally concentrated
their business activities within the same geographic area, southern New
Jersey. And, energy consumption is the common thread that links each of
these companies. For example, Gas Company and Energy Company provide
natural gas services to energy consumers. R & T Group participates in
the utility and general contracting and construction business, while
Morie produces sand and gravel products used by the construction
industry. Coming full circle, their involvement in construction
activities helps to create new energy consumers for both Gas Company and
Energy Company.
Deregulation of the natural gas industry will provide opportunities for
Gas Company and Energy Company to sell natural gas outside of their
service area. With access to a network of pipeline systems, traveling
from the southeast, both companies will benefit from the business
relationships developed by Morie and R & T Group in the South.
Additionally, Morie's experience in the southeastern states will benefit
R & T Group as it extends its operations into the South.
Therefore, the relationships that now exist among our companies will
continue to mature over the next five years as we expand our geographic
areas of operation. Our companies are working together to develop an
informational network to enhance this expansion. As the natural gas
industry evolves and competition increases, the growth potential for
each of our subsidiaries will be enhanced through this synergistic
alliance.
INSERT: Photograph - Four men sitting roundtable style
Title: A special SJI task force was formed to assess the impact and
evaluate the opportunities created by changes in the natural gas
industry.
- 6 -
The Environment
Q. How are SJI's subsidiaries protecting and improving our environment?
A. The preservation of our environment has become one of the nation's most
pressing issues. All of SJI's subsidiaries are environmentally conscious
and have the potential to play an even greater role in keeping our air,
land and water safe and clean for future generations.
Through issues management, Gas Company and Energy Company have
identified potential opportunities presented by the National Energy
Policy Act, the Clean Air Act Amendments and the New Jersey Energy
Masterplan. For example, the Clean Air Act Amendments will provide
prospects for incremental natural gas sales through the requirement to
eliminate millions of tons of sulphur dioxide and nitrogen oxide
emissions produced by the generation of electricity. Industries using
coal or oil in their facilities will be required to lower emissions as
well. Switching to natural gas, a cleaner energy source, is a viable
alternative to the cost of installing pollution-control measures.
The mandates of the Energy Policy Act and the Clean Air Act call for
alternative fuels for fleet vehicles starting in 1996 and 1998,
respectively. Gas Company provides natural gas service to two customers
already using natural gas vehicles. Natural gas will be the clear choice
as a pollution-control measure and Gas Company is prepared to expand its
service to this market.
A growing understanding of the environment has contributed to changes in
state and federal laws. New Jersey has adopted strict regulations
governing the installation, maintenance and monitoring of underground
storage tanks. These regulations will contribute to the current trend of
conversion from oil to natural gas, providing growth opportunities for
Gas Company.
During 1993, Gas Company continued its active efforts at remediating
former coal gas manufacturing sites within our service area, consistent
with our concern for the environment. We have already reclaimed one and
are conducting environmental investigations at several others. Our rate
structure now allows us to recover the cleanup costs from ratepayers. To
lessen the impact on our customers, Gas Company is pursuing litigation
to recover these costs from insurers.
To address the growing need for environmental services, R & T Group has
expanded over the last several years. We are pursuing opportunities
created by these regulations to help affected businesses. Also, New
Jersey's Industrial Site Remediation Act, formerly the Environmental
Cleanup and Remediation Act, streamlined the process of remediating
contaminated industrial property. This action will spur the reuse of
many abandoned and contaminated properties in New Jersey providing
additional opportunities for R & T Group in the areas of site
evaluations; services for all forms of remediation; and the removal,
transport and disposal of contaminated soil.
INSERT: Photograph - two people in environmental protective clothing.
Title: SJI's business are committed to preserving the environmental
integrity of our air, land and water.
Morie and the sand mining industry continue to work toward a balance
between mining and protecting the environment. Our efforts to preserve
the environment involve interaction with the New Jersey Pinelands
Commission, the National Park Service and other agencies connected with
the federal Wild and Scenic River Program. Morie is a member of the
Wildlife Habitat Enhancement Council and works with its planners and
biologists to structure the reclamation of our former mining sites
considering the needs of the areas' wildlife.
Expanding Competition
Q. How has increased competition impacted SJI's subsidiaries and
what actions are being taken to overcome the competition?
A. Increased competition has impacted the way our companies market their
services and products. To meet this challenge, we continually analyze
the needs of consumers and have created new products and services to
fill those needs. Also, we have expanded our areas of operation so we
may continue to add to our customer base.
- 7 -
Gas Company continues to encounter greater competition from oil dealers
and the electric industry. Even with this competition, we added 7,600
new customers in 1993. Over 90 percent of all new homes in Gas Company's
service area are using natural gas for heating.
INSERT: Photograph - Scene of Transmission Pipeline
Title: Deregulation of the natural gas industry has resulted in a more
open and accessible pipeline system for buyers and sellers of natural
gas.
Conversion of alternate fuel users, who live on or near the company's
distribution mains, offers the greatest potential for increased revenues
at minimum cost. During 1993, 2,126 consumers converted to natural gas
compared with 2,178 conversions in 1992. We accomplished this through
our marketing efforts, which included a multi-media advertising campaign
featuring testimonials from customers, contractors and developers. Also,
programs that encouraged contractors to recommend natural gas to their
customers added to our success in the conversion market.
Within the next five years, technological advances in both heating and
cooling will give Gas Company the opportunity to increase its market
share in the residential and small commercial market. Commercial
distribution of the new natural gas heat pump , which heats and cools,
began during the first quarter of 1994. Gas Company is subsidizing the
cost of several units during the introduction of this product into the
marketplace. And, over the next three years, we will support nearly 400
of these units. We are currently working with builders and contractors
to enlist their assistance in promoting the natural gas heat pump.
R & T Group opened a new office in Florida and created a new subsidiary
to facilitate the expansion of our market area along the eastern
seaboard from New Jersey to Florida. We also augmented our employee
training to obtain additional certifications in environmental
remediation. Our goal is to develop our employees to improve the quality
and efficiency of their work. Also, we regularly receive feedback from
the bidding process to help us fine-tune our bids.
The quality of Morie's products and service sets our company apart from
our competition. To ensure our competitive edge, we expanded our golf
course product market further into the northeastern United States. Also,
we added several new product lines to our trap sand and greens
construction mix. We will host our second annual symposium for the golf
industry during 1994. Additionally, we plan to extend our sand and
gravel reserves in New Jersey and have reduced costs in our major plant
locations by using off-peak energy and acquiring less expensive energy
supplies.
Q. What impact will the deregulation of the natural gas industry (FERC
Orders 636 and 547) have on Gas Company and SJI's other subsidiaries?
A. The Federal Energy Regulatory Commission has acted to deregulate the
natural gas industry to increase competition. Most recently, the FERC
issued Order 636 to continue the evolution toward a more open and
accessible pipeline system for buyers and sellers of natural gas.
Pipeline companies will now sell each of their services separately that
were historically "bundled" together. Another element of this
deregulation allows companies that
- 8 -
have excess pipeline transportation or storage capacity to market this
capacity through electronic bulletin boards and other means.
In November 1993, SJI formed an internal task force to address these
changes to assure that each of our subsidiaries participates fully in
the new gas industry environment. The task force is reviewing operating
requirements of pipeline companies, natural gas distribution companies,
natural gas futures of the New York Mercantile Exchange and other
service companies to identify appropriate marketing opportunities. This
comprehensive review will generate recommended action plans to position
our companies prominently among the competition.
Deregulation will create additional opportunities for Energy Company.
Many companies will be unprepared for the responsibilities associated
with purchasing, arranging transportation and storing their own gas
supplies. Therefore, Energy Company's expertise will be a valuable
resource for those businesses.
The effects of the new gas industry environment will have only a minimal
impact on Gas Company since we have operated under the "unbundled"
concept for about three years. We have structured our tariffs to allow
our large-volume customers, who are able to use the unbundled system, to
benefit from the new gas industry environment, while maintaining
Gas Company's margins.
Gas Company must have guaranteed contracts for long-term gas supplies to
meet the demands of our service area and, in particular, to serve our
core residential, commercial and small industrial customers, who are
unable to purchase their own gas supplies. Therefore, we entered into
long-term gas supply agreements to replace our former pipeline contract
demand services. During 1993, the addition of four new contracts
provided Gas Company with a total of nine long-term gas supply
agreements with major suppliers. Additionally, we entered into a letter
of intent with Texas Eastern Transmission Corporation which will enable
Texas Eastern to extend its pipeline facilities into southern New Jersey
providing us with direct access to our third major pipeline.
The implementation of Order 547, which allows gas sales by companies
other than pipelines on the interstate systems, will afford us new
prospects for selling additional volumes of natural gas. As a result,
both Gas Company and Energy Company will increase their potential
profitability through increased sales from the offering of enhanced
services or decreased expenses.
Financial Relations
Q. How has the revised outlook of the financial analysts and independent
rating agencies affected SJI and Gas Company and what steps are we
taking in response?
A. The financial analyst and rating agency community recognizes that the
business environment in which utilities operate is undergoing
considerable change. With added competition, companies such as Gas
Company are facing more business uncertainties and greater market risks.
In response to the changing utility industry, rating agencies created a
new framework for rating utility companies, which considers the
escalating competitive pressures. When reviewing SJI's performance,
financial analysts generally use other utilities for comparison
purposes because of the major role played by Gas Company in that
performance. SJI, however, strives to communicate the contributions
made by our nonutility subsidiaries to analysts, so they may
differentiate SJI from its traditional peers.
As part of the rate case filing made in January 1994, Gas Company
requested that the New Jersey Board of Regulatory Commissioners take a
unique approach to resolving issues directly related to financial
evaluation, rather than send the case to the Office of Administrative
Law for litigation. As part of our rate case filing, we asked the BRC to
allow Gas Company to meet the criteria established by independent rating
agencies to attain the highest possible rating for our First Mortgage
Bonds. We have also initiated a communications program with the
financial community to raise awareness of the actions already taken by
Gas Company to reduce the higher risks encountered by comparable natural
gas distribution companies. One example is Gas Company's proactive
approach to FERC Order 636, as discussed earlier. The way in which we
are addressing the challenges created by the FERC's actions demonstrates
a leading position among our peers in the natural gas industry.
The issues that we have focused on in this report are providing many
positive opportunities for SJI. We will continue to build on our
successes by developing the complementary relationships that exist among
our companies, ensuring a leadership position in each of our lines of
business.
- 9 -
<TABLE>
Statements of Consolidated Income South Jersey Industries, Inc. and Subsidiaries
(In Thousands Except for Per Share Data) Year Ended December 31,
<CAPTION>
---------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Operating Revenues:
Utility (Note 1) $268,541 $255,041 $220,070
Nonutility 65,400 61,625 58,851
--------- --------- ---------
Total Operating Revenues 333,941 316,666 278,921
--------- --------- ---------
Operating Expenses:
Gas Purchased for Resale 145,786 137,492 115,528
Operation and Maintenance - Utility 39,977 35,572 32,928
Nonutility 59,603 55,395 51,974
Depreciation and Depletion (Note 1) 15,379 14,526 13,665
Federal Income Taxes (Notes 1 & 4) 7,055 7,092 5,449
State Gross Receipts & Franchise Taxes and Other Taxes (Note 1) 35,395 35,419 32,162
--------- --------- ---------
Total Operating Expenses 303,195 285,496 251,706
--------- --------- ---------
Operating Income 30,746 31,170 27,215
--------- --------- ---------
Interest Charges:
Long-Term Debt 12,400 11,480 10,914
Short-Term Debt 2,603 2,307 3,086
Other 585 2,064 1,310
--------- --------- ---------
Total Interest Charges 15,588 15,851 15,310
--------- --------- ---------
Income Before Preferred Stock Dividend 15,158 15,319 11,905
Preferred Stock Dividend Requirements of Subsidiary 187 192 203
--------- --------- ---------
Income Before Cumulative Effect of a Change in Accounting Principle 14,971 15,127 11,702
Cumulative Effect of a Change in Accounting Principle (Note 1) 382 - -
--------- --------- ---------
Net Income Applicable to Common Stock $ 15,353 $ 15,127 $ 11,702
========= ========= =========
Average Shares of Common Stock Outstanding (Note 6) 9,680 9,394 9,159
========= ========= =========
Earnings Per Common Share (Note 6):
Before Cumulative Effect of a Change in Accounting Principle $ 1.55 $ 1.61 $ 1.28
Cumulative Effect of a Change in Accounting Principle 0.04 - -
--------- --------- ---------
Earnings Per Common Share $ 1.59 $ 1.61 $ 1.28
========= ========= =========
Cash Dividends Declared Per Common Share $ 1.433 $ 1.412 $ 1.412
========= ========= =========
Statements of Consolidated Retained Earnings (In Thousands) Year Ended December 31,
---------------------------------
1993 1992 1991
--------- --------- ---------
Balance at Beginning of Year $ 32,409 $ 35,306 $ 36,534
Net Income Applicable to Common Stock 15,353 15,127 11,702
Cash Dividends Declared - Common Stock (13,873) (13,262) (12,930)
Stock Dividend Declared - Common Stock (Note 6) - (4,762) -
--------- --------- ---------
Balance at End of Year (Note 8) $ 33,889 $ 32,409 $ 35,306
========= ========= =========
The accompanying schedule and footnotes are an integral part of the financial statements.
- 10 -
</TABLE>
<TABLE>
Statements of Consolidated Cash Flows South Jersey Industries, Inc. and Subsidiaries
(In Thousands) Year Ended December 31,
---------------------------------
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income Applicable to Common Stock $ 15,353 $ 15,127 $ 11,702
Adjustments to Reconcile Net Income to Cash Flows:
Depreciation, Depletion and Amortization 18,204 17,034 16,177
Provision for Losses on Accounts Receivable 913 1,090 1,272
Revenues and Fuel Costs Deferred - Net (18,306) (1,564) 5,215
Deferred and Non-Current Federal Income Taxes
and Credits - Net 4,665 3,271 2,691
Cumulative Effect of a Change in Accounting Principle (382) - -
Environmental Remediation Costs 990 (1,610) (4,458)
Changes in:
Accounts Receivable (6,615) (811) (9,945)
Inventories (2,145) (688) 2,321
Prepayments and Other Current Assets (268) 213 384
Gross Receipts & Franchise Taxes Accrued (15,940) 3,393 250
Accounts Payable and Accrued Liabilities (4,246) 5,654 (631)
Other - Net 1,944 (2,528) (1,407)
--------- --------- ---------
Net Cash (Used In) Provided by Operating Activities (5,833) 38,581 23,571
--------- --------- ---------
Cash Flows from Investing Activities:
Investment In Non-Associated Companies - (147) -
Capital Expenditures, Cost of Removal and Salvage (36,710) (32,158) (35,611)
--------- --------- ---------
Net Cash Used in Investing Activities (36,710) (32,305) (35,611)
--------- --------- ---------
Cash Flows from Financing Activities:
Net Borrowings from (Repayments of) Lines of Credit 21,650 (9,500) 21,775
Principal Repayments of Long-Term Debt (9,845) (8,902) (8,501)
Dividends on Common Stock (13,873) (13,262) (12,930)
Repurchase of Preferred Stock (90) (110) (240)
Proceeds from Sale of Long-Term Debt 35,457 25,000 593
Proceeds from Sale of Common Stock 6,993 5,182 3,631
--------- --------- ---------
Net Cash Provided by (Used In) Financing Activities 40,292 (1,592) 4,328
--------- --------- ---------
Net (Decrease) Increase in Cash and Cash Equivalents (2,251) 4,684 (7,712)
Cash and Cash Equivalents at Beginning of Year 12,186 7,502 15,214
--------- --------- ---------
Cash and Cash Equivalents at End of Year $ 9,935 $ 12,186 $ 7,502
========= ========= =========
Supplemental Disclosures of Cash Flow Information
Cash paid during the year for:
Interest (Net of Amounts Applicable to LGAC
Overcollections and Amounts Capitalized) $ 14,086 $ 13,490 $ 14,612
Income Taxes (Net of Refunds) $ 4,728 $ 3,463 $ 2,995
The accompanying schedule and footnotes are an integral part of the financial statements.
- 11 -
</TABLE>
<TABLE>
Consolidated Balance Sheet South Jersey Industries, Inc. and Subsidiarie
(In Thousands) December 31,
-----------------------
<CAPTION>
<S> <C> <C>
Assets 1993 1992
Property, Plant and Equipment: (Note 1)
Utility Plant, at original cost $ 470,842 $ 440,058
Accumulated Depreciation (126,722) (117,336)
Gas Plant Acquisition Adjustment - Net 2,225 2,300
Nonutility Property and Equipment, at cost 59,106 57,019
Accumulated Depreciation and Depletion (30,065) (27,278)
---------- ----------
Property, Plant and Equipment - Net 375,386 354,763
---------- ----------
Investment in Non-Associated Companies 917 917
---------- ----------
Current Assets:
Cash and Cash Equivalents (Notes 1 & 7) 9,935 12,186
Accounts Receivable 31,026 29,710
Unbilled Revenues (Note 1) 18,502 14,161
Provision for Uncollectibles (1,026) (1,071)
Natural Gas in Storage, average cost 12,202 10,479
Materials and Supplies, average cost 11,489 11,067
Prepayments and Other 2,771 2,503
---------- ----------
Total Current Assets 84,899 79,035
---------- ----------
Accounts Receivable - Merchandise 2,221 2,735
---------- ----------
Deferred Debits: (Note 1)
Environmental Remediation Costs (Note 9) 26,223 15,329
Gross Receipts & Franchise Taxes 5,668 6,069
Income Taxes - Flowthrough Depreciation (Note 4) 17,296 -
Deferred Fuel Costs 5,345 -
Other 13,823 12,426
---------- ----------
Total Deferred Debits 68,355 33,824
---------- ----------
Total Assets $ 531,778 $ 471,274
========== ==========
Capitalization and Liabilities
Capitalization (see Schedule):
Common Equity (Notes 6 & 8) $ 140,526 $ 132,053
Redeemable Cumulative Preferred Stock (Note 3) 2,584 2,674
Long-Term Debt 144,305 118,863
---------- ----------
Total Capitalization 287,415 253,590
---------- ----------
Current Liabilities:
Notes Payable (Note 7) 82,750 61,100
Current Maturities of Long-Term Debt 8,230 8,060
Accounts Payable 27,814 31,070
Customer Deposits 5,781 5,505
Gross Receipts & Franchise Taxes Accrued (Note 1) 13,904 29,844
Environmental Remediation Costs (Note 9) 3,624 -
Interest Accrued and Other Current Liabilities 9,275 10,541
---------- ----------
Total Current Liabilities 151,378 146,120
---------- ----------
Deferred Credits and Other Non-Current Liabilities: (Note 1)
Accumulated Deferred Income Taxes - Net (Note 4) 63,648 45,343
Investment Tax Credits 7,428 7,818
Deferred Revenues - 12,961
Pension and Other Postretirement Benefits 6,602 1,861
Environmental Remediatin Costs (Note 9) 8,260 -
Other 7,047 3,581
---------- ----------
Total Deferred Credits and Other Non-Current Liabilities 92,985 71,564
---------- ----------
Commitments and Contingencies (Note 9)
Total Capitalization and Liabilities $ 531,778 $ 471,274
========== ==========
The accompanying schedule and footnotes are an integral part of the financial statements.
- 12 -
</TABLE>
<TABLE>
Schedule of Consolidated Capitalization South Jersey Industries, Inc. and Subsidiarie
(In Thousands Except for Share Data) December 31,
---------------------
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Common Equity (Notes 6 & 8)
Common Stock: Par Value $1.25 per share; Authorized 20,000,000 shares;
Outstanding Shares: 9,804,576 (1993) and 9,497,700 (1992)
Balance at Beginning of Year $ 11,872 $ 11,548
Dividend Reinvestment and Stock Purchase Plan & Employee Stock Option Plan 384 324
--------- ---------
Balance at End of Year 12,256 11,872
Premium on Common Stock 94,381 87,772
Retained Earnings 33,889 32,409
--------- ---------
Total Common Equity 140,526 132,053
--------- ---------
Redeemable Cumulative Preferred Stock (Note 3)
South Jersey Gas Company, Par Value $100 per share
Authorized Shares: 50,904 (1993) and 51,804 (1992)
Outstanding Shares: Series A, 4.70% - 6,600 (1993) and 7,500 (1992) 660 750
Series B, 8.00% - 19,242 (1993) and 19,242 (1992) 1,924 1,924
--------- ---------
Total Redeemable Cumulative Preferred Stock 2,584 2,674
--------- ---------
Long-Term Debt (A)
South Jersey Gas Company:
First Mortgage Bonds (B):
7% Series due 1993 - 2,986
7 7/8% Series due 1994 2,986 3,123
8% Series due 1995 205 329
8 1/4% Series due 1996 2,180 2,271
8 1/4% Series due 1998 3,534 3,671
9.2% Series due 1998 7,111 11,111
8.19% Series due 2007 25,000 25,000
10 1/4% Series due 2008 25,000 25,000
9% Series due 2010 35,000 35,000
6.95% Series due 2013 (C) 35,000 -
Energy & Minerals, Inc.:
Senior Notes, 9.66% due 2000 (D) 6,125 7,000
Direct Reduction Note, 9.1% due 1994 319 432
R & T Group, Inc.:
Senior Notes, 9.66% due 2000 (D) 9,625 11,000
Master Lease Agreement (E) 450 -
--------- ---------
Total Long-Term Debt Outstanding 152,535 126,923
Less Current Maturities 8,230 8,060
--------- ---------
Total Long-Term Debt 144,305 118,863
--------- ---------
Total Capitalization $287,415 $253,590
========= =========
(A) The long-term debt maturities and sinking fund requirements for the succeeding five years are as follows:
1994, $8,230,000; 1995, $7,068,000; 1996, $8,904,000; 1997, $7,401,000; and 1998, $9,728,000.
(B) SJG's First Mortgage dated October 1, 1947, as supplemented, securing the First Mortgage Bonds constitutes
a direct first mortgage lien on substantially all utility plant.
(C) On June 29, 1993, SJG sold privately $35.0 million of its First Mortgage Bonds, 6.95% Series due July 1, 2013.
(D) These notes are the subject of a support agreement by SJI.
(E) On December 15, 1993, R & T Castellini Construction Company, a subsidiary of R & T Group, Inc., incurred
long-term financing of $456,724, 5.84% due 1998, as part of a capital lease agreement for various items of
construction equipment. This note is secured by a direct lien against said equipment.
- 13 -
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Practices:
Consolidation - The consolidated financial statements include the accounts of
South Jersey Industries, Inc. (the Company) and all of its subsidiaries. Certain
intercompany transactions, amounting to approximately $6.1 million, $6.8 million
and $6.8 million, respectively, in 1993, 1992 and 1991, were not eliminated.
Such amounts were capitalized to utility plant or environmental remediation
costs on the South Jersey Gas Company (SJG) books of account (See Note 9). All
other significant intercompany accounts and transactions have been eliminated.
Certain reclassifications have been made of previously reported amounts to
conform with classifications used in the current year.
Regulation - The Company's principal subsidiary, SJG, is subject to the rules
and regulations of the New Jersey Board of Regulatory Commissioners (BRC) and
maintains its accounts in accordance with the prescribed Uniform System of
Accounts of that Board.
On August 10, 1992, the BRC granted SJG a rate increase of $3.35 million based
on an overall rate of return of 10.34 percent, including a 12.1 percent return
on equity. As part of this increase, SJG is allowed to retain the first $3.9
million of base revenues generated by interruptible sales and 20 percent of base
revenues generated from such sales above that level until it reaches a 1 2.1
percent return on equity.
In addition to the rate increase, the BRC approved a temperature adjustment
clause (TAC), which is being implemented on a trial basis. This is a mechanism
designed to reduce the impact of extreme fluctuations in temperature on SJG and
its customers. The BRC also permitted SJG to recover from ratepayers the
carrying costs associated with the acceleration of gross receipts and franchise
tax payments through 1993, and SJG is permitted to petition the BRC solely for
the impact of the accelerated payment in 1994. In addition, the BRC order
provides that the effect of SJG's adoption of FASB No. 106 will be addressed in
its next rate petition (See Note 10). A combined filing for the amortization of
environmental remediation costs and Levelized Gas Adjustment Clause (LGAC)
recovery became effective in January 1993 as approved by the BRC. As future
environmental remediation costs are incurred, SJG will recover these costs over
subsequent 7-year periods (See Note 9).
Utility Revenues - SJG, in accordance with industry practices, bills most of its
customers on a monthly cycle basis, although certain large industrial customers
are billed at or near the end of each month. An accrual is made to recognize the
unbilled revenues from the date of the last bill to the end of period.
In accordance with a BRC order, SJG is allowed to recover the excess cost of gas
sold over the cost thereof included in the base rates through the LGAC. Such
collection is made on a forecasted basis, after a hearing, upon BRC order. Under
and over recoveries of gas costs are deferred and included in the determination
of the following year's LGAC. Interest is paid on overcollected LGAC balances
based on SJG's return on rate base as determined in its last base rate
proceeding.
During December 1993, the BRC approved a net increase in SJG's annual adjustment
clauses, which include the LGAC, TAC and Remediation Adjustment Clause, in the
amount of $23.8 million. This increase was necessary primarily as a result of
increases anticipated in the cost of gas and does not provide a profit to SJG.
Property, Plant & Equipment - Utility plant is stated at original cost as
defined for regulatory purposes; nonutility plant is stated at cost. The cost of
additions, replacements and renewals of units of property is charged to the
appropriate plant account.
Depreciation and Amortization - Depreciation of gas utility plant is provided on
a straight-line basis over the estimated remaining lives of the various classes
of property. These estimates are periodically reviewed and adjustments are made
as required after approval by the BRC. The composite rate per annum for all
depreciable utility property was approximately 2.8 percent in 1993, 1992 and
1991. Generally, with the exception of extraordinary retirements, accumulated
depreciation is charged with the cost of depreciable utility property retired,
together with removal costs less salvage. The gas plant acquisition adjustment,
in the initial amount of approximately $3.0 million, is being amortized on a
straight-line basis over a 40-year period. The unamortized balance amounting to
$2.2 million at December 31, 1993, is not included in rate base. Depreciation
of nonutility property is computed generally on a straight-line basis over the
estimated useful lives of the property, ranging up to 45 years. Any gain or loss
realized upon the disposition of nonutility property is recognized in
determining net income.
Federal Income and Other Taxes - Deferred Federal Income Taxes are provided for
all significant temporary differences between book and taxable income. In
February 1992, the Financial Accounting Standards Board issued FASB No. 109
entitled "Accounting for Income Taxes". The Company adopted this statement in
1993. Its adoption resulted in the recording on the balance sheet of additional
assets and liabilities, with the difference being credited to earnings as a
cumulative effect of a change in accounting principle (See Note 4). The primary
asset created as a result of adopting FASB No. 109 is income taxes - flowthrough
depreciation in the amount of $17.6 million as of January 1, 1993. This amount
represents the recording of the net tax effect of excess liberalized
depreciation over book depreciation on utility plant because of temporary
differences for which, prior to FASB No. 109, deferred taxes had not previously
been provided. These tax benefits were previously flowed through in rates and
management believes that as the amortization of the asset occurs, it will be
recoverable through rates. Management is seeking such recovery as part of its
January 7, 1994, petition for a general base rate increase (See Note 10).
The cumulative effect of this change as of January 1, 1993, was to increase
income by $382,000, or $0.04 per share. Restatement of prior years for the
effect of FASB No. 109 would not have materially changed previously reported
earnings.
The investment tax credits (ITC) attributable to SJG were deferred and continue
to be amortized at the annual rate of 3 percent, which approximates the life of
the related assets.
SJG, effective March 1, 1978, began accruing Gross Receipts and Franchise Taxes
on current revenues, the basis for such taxes through 1991, rather than on the
previous basis of taxes paid. The one-time increase resulting from this change
has been deferred and is being amortized on a straight-line basis to operations
over a 30-year period.
- 14 -
Notes to Consolidated Financial Statements, Continued
Pensions - The Company and its subsidiaries have several defined benefit
retirement plans that provide annuity payments to substantially all full-time
regular employees upon retirement. Approximately 76 percent of the plans' assets
are invested in securities which, under their terms, provide for fixed income
and a return of principal. The remaining assets of the plans are invested in
professionally managed common stock portfolios. The companies pay the entire
cost of the plans and the total provisions made for such plans in 1993, 1992 and
1991 aggregated approximately $1.8 million, $1.6 million and $1.6 million,
respectively, including amounts for amortization of the cost of past service
benefits over a period of approximately 30 years. Net periodic pension cost for
1993, 1992 and 1991 included the following components:
Thousands of Dollars
1993 1992 1991
------ ------ ------
Service cost - benefits earned during the period $1,351 $1,189 $1,200
Interest cost on projected benefit obligation 2,723 2,552 2,338
Actual return on plan assets (3,184) (2,444) (2,971)
Net amortization and deferral 903 281 998
------ ------ ------
Net periodic pension cost $1,793 $1,578 $1,565
====== ====== ======
Assumptions as of December 31 were:
Discount rate 7.25% 8.0%-8.5% 8.5%
Rate of increase in compensation levels 4.6% 4.8% 6.5%
Expected long-term rate of return on assets 8.5%-9.5% 8.5%-9.5% 8.5%-9.5%
The following table sets forth the plans' funded status at December 31, 1993 and
1992:
Actuarial present value of benefit obligations:
Thousands of Dollars
1993 1992
-------- --------
Vested benefit obligation $(32,337) $(27,843)
-------- --------
Accumulated benefit obligation $(32,550) $(28,011)
-------- --------
Projected benefit obligation $(40,964) $(35,312)
Plan assets at fair value 32,976 30,244
Projected benefit obligation in excess of plan assets (7,988) (5,068)
Unrecognized net loss 2,871 1,313
Prior service cost not yet recognized
in net periodic pension cost 2,633 2,067
Unrecognized net obligation at January 1 986 796
--------- --------
Pension liability recognized in
the consolidated balance sheet $ (1,498 $ (892)
========= ========
The increase in the Company's projected benefit obligation during 1993 was
primarily the result of decreasing the discount rate for the Company's plans
from 8.0 - 8.5 percent in 1992 to 7.25 percent in 1993.
The Company and its subsidiaries also provide postretirement health care and
life insurance benefits to substantially all retired employees. The aggregate
amounts paid for 1993, 1992 and 1991 were not material.
Effective January 1, 1993, the Company adopted FASB No. 106 entitled "Employers'
Accounting for Postretirement Benefits Other Than Pensions". This statement
requires the Company to accrue the estimated cost of retiree benefit payments
during the years the employee provides services.
The Company previously expensed the cost of these benefits, which are
principally health care, on a pay-as-you-go basis. The Company has elected to
recognize the unfunded transition obligation of approximately $27.8 million over
a period of 20 years.
The majority of the Company's costs apply to its utility subsidiary, SJG, which
is currently recovering these costs on a pay-as-you-go basis through its rates.
SJG is recording a regulatory asset pursuant to a BRC order for the amount by
which the co st exceeds the current level recovered in rates. The recovery of
this regulatory asset, which amounted to approximately $3.9 million at December
31, 1993, is being addressed in SJG's current base rate case proceeding and it
is expected that the recovery will be included in base rates (See Note 10). The
following table sets forth the life and health care plans' funded status.
Actuarial present value of accumulated postretirement benefit obligations:
Thousands of Dollars
December 31, January 1,
1993 1993
--------- ---------
Retirees $ (9,260) $ (8,740)
Other active plan participants (24,953) (19,080)
Accumulated postretirement benefit obligation (34,213) (27,820)
Fair value of plan assets - -
Accumulated postretirement benefit
obligation in excess of plan assets (34,213) (27,820)
Unrecognized loss 3,745 -
Unrecognized transition obligation 26,429 27,820
--------- ---------
Postretirement benefit liability recognized
in the consolidated balance sheet $ (4,039) $ -
========= =========
The increase in the Company's accumulated postretirement benefit obligation and
the resulting unrecognized loss during 1993 were primarily the result of
decreasing the discount rate for the Company's plans as discussed later.
Net postretirement benefit cost for the year ended December 31, 1993, consisted
of the following components:
Thousands of Dollars
Service cost - benefits earned during the period $1,144
actual return on plan assets -
Interest cost on accumulated postretirement benefit obligation 2,196
Amortization of transition obligation 1,391
------
Net postretirement benefit cost $4,731
======
The assumed health care cost trend rates used in measuring the accumulated
postretirement benefit obligations in 1993 ranged from 8.10 percent to 11.42
percent, decreasing linearly each successive year until each reaches 6.75
percent in 2002 and 2007, respectively, after which they remain constant. If the
health care cost trend rate assumptions were increased by 1 percent, the
accumulated postretirement benefit obligation as of December 31, 1993, would be
increased by 17.9 percent. The effect of this change on the sum of the service
cost and interest cost would be an increase of 22.3 percent. The assumed
discount rates used in determining the accumulated postretirement benefit
obligation as of December 31, 1993, and January 1, 1993, were 7.25 percent and
8.0 percent, respectively.
Statements of Cash Flows - For purposes of reporting cash flows, all highly
liquid investments with original maturities of three months or less are
considered cash equivalents.
- 15 -
Notes to Consolidated Financial Statements, Continued
2. Segments of Business:
Information about the Company's operations in different industry segments is
presented below:
Thousands of Dollars
1993 1992 1991
-------- -------- --------
Operating Revenues:
Gas Utility Operations $277,581 $255,258 $220,296
Sand Mining Operations 28,435 27,149 27,097
Other Industries 37,250 34,860 32,002
-------- -------- --------
Total 343,266 317,267 279,395
Intersegment Sales (9,325) (601) (474)
-------- -------- --------
Consolidated Operating Revenues $333,941 $316,666 $278,921
======== ======== ========
Operating Income:
Gas Utility Operations $ 37,388 $ 37,408 $ 31,032
Sand Mining Operations 2,517 2,442 1,635
Other Industries 204 241 1,434
-------- -------- --------
Total 40,109 40,091 34,101
Federal Income Taxes (7,055) (7,092) (5,449)
General Corporate Expense (2,308) (1,829) (1,437)
-------- -------- --------
Total Operating Income $ 30,746 $ 31,170 $ 27,215
======== ======== ========
Depreciation, Depletion and Amortization:
Gas Utility Operations $ 13,881 $ 12,703 $ 11,806
Sand Mining Operations 2,713 2,622 2,656
Other Industries 1,610 1,709 1,715
-------- -------- --------
Total $ 18,204 $ 17,034 $ 16,177
======== ======== ========
Property Additions:
Gas Utility Operations $ 33,260 $ 29,663 $ 32,226
Sand Mining Operations 1,732 1,315 2,702
Other Industries 1,128 736 265
-------- -------- --------
Total $ 36,120 $ 31,714 $ 35,193
======== ======== ========
Identifiable Assets:
Gas Utility Operations $479,204 $416,177 $394,015
Sand Mining Operations 30,841 30,903 32,331
Other Industries 15,727 12,483 14,323
-------- -------- --------
Total 525,772 459,563 440,669
Corporate Assets 20,495 25,219 19,305
Intersegment Assets (14,489) (13,508) (13,550)
-------- -------- --------
Consolidated Identifiable Assets $531,778 $471,274 $446,424
======== ======== ========
Gas utility operations consist primarily of natural gas distribution to
residential, commercial and industrial customers. Sand mining operations consist
primarily of mining and processing sand, gravel and clay. Other industries
include the utility construction, environmental services and general contracting
firms, and the natural gas acquisition service company.
Total operating revenues by industry segment include both sales to unaffiliated
customers, as reported in the Company's statements of consolidated income, and
intercompany sales, which are accounted for generally at the fair market value
of the goods or services rendered.
Operating income is total revenues less operating expenses, Federal Income
Taxes, and general corporate expenses, as shown on the statements of
consolidated income.
Identifiable assets are those assets that are used in each segment of the
Company's operations. Corporate assets are principally cash and cash items, and
land, buildings and equipment held for corporate use.
3. Redeemable Cumulative Preferred Stock:
Purchase funds for the Cumulative Preferred Stock, Series A and Series B,
require SJG to offer annually to purchase 900 and 1,500 shares, respectively, at
par value thereof, plus accrued dividends.
If preferred stock dividends are in arrears, no dividends may be declared or
paid, or other distribution made on the SJG Common Stock; and, if four or more
quarterly dividends are in arrears, the Preferred Shareholders may elect a
majority of the SJG directors.
The Company has 2,500,000 authorized shares of Preference Stock, no par value,
none of which has been issued.
4. Federal Income Taxes:
Income tax expense applicable to operations is lower than the tax that would
have resulted by applying the statutory rate to income from operations before
Federal Income Tax for 1993, 1992, and 1991. The reasons for the differences
are as follows:
Thousands of Dollars
1993 1992 1991
------ ------ ------
Tax at Statutory Rate $7,775 $7,622 $5,864
Increase (Decrease) Resulting from:
Additional Statutory Depletion Allowance (405) (365) (240)
Amortization of ITC (389) (389) (389)
BRC Order - Flow back of Excess
Deferred Taxes (67) (67) (52)
Other - Net 141 291 266
------ ------ ------
Total Provision for Federal Income Taxes $7,055 $7,092 $5,449
====== ====== ======
The provision for Federal Income Taxes is composed of the following:
Thousands of Dollars
1993 1992 1991
------ ------ ------
Current $2,390 $3,821 $2,758
------ ------ ------
Deferred:
Repair Allowance Permitted Under the Class
Life Asset Depreciation Range System 34 (65) 102
Excess of Tax Depreciation Over
Book Depreciation - Net 2,870 3,278 3,180
Deferred Fuel Costs 5,536 - -
Environmental Remediation Costs - Net (287) 340 1,666
Additional Amortization of Gross Receipts Taxes (136) (136) (136)
Advances for Construction 19 36 (337)
BRC Order - Flow Back of Excess
Deferred Taxes (67) (67) (52)
Premium on Bond Redemption (58) (10) (48)
Alternative Minimum Tax (2,042) (510) (1,303)
Other - Net (815) 794 8
------ ------ ------
Total Deferred 5,054 3,660 3,080
------ ------ ------
ITC (389) (389) (389)
------ ------ ------
Total $7,055 $7,092 $5,449
====== ====== ======
- 16 -
Notes to Consolidated Financial Statements, Continued
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's net deferred tax liability are as follows:
Thousands of Dollars
December 31, January 1,
1993 1993
------- -------
Deferred Tax Liabilities:
Tax Depreciation Over Book Depreciation $53,069 $50,770
Difference Between Book and Tax Basis of Property 3,285 3,038
Deferred Fuel Costs 5,536 -
Environmental Remediation Costs 4,773 5,059
Excess Protected 3,726 3,793
Gross Receipts Taxes 1,927 2,063
Other 1,138 2,429
------- -------
Total Deferred Tax Liabilities 73,454 67,152
------- -------
Deferred Tax Assets:
Alternative Minimum Tax 5,980 3,650
ITC Basis Gross Up 3,826 4,027
------- -------
Total Deferred Tax Assets 9,806 7,677
------- -------
Net Deferred Tax Liability $63,648 $59,475
======= =======
The IRS has completed examinations of the Company's consolidated Federal Income
Tax returns for the years ended 1982 through 1988. Adjustments resulting from
these audits are not expected to have a material effect on the Company's
financial position.
5. Disclosure about Fair Value of Financial Instruments:
Long-Term Debt - The fair values of the Company's long-term debt, including
current maturities, as of December 31, 1993 and 1992, are estimated to be $165.7
million and $135.6 million, respectively (carrying amounts $152.5 million and
$126.9 million, respectively) and are estimated based on the interest rates
available to the Company at each respective year end for debt with similar terms
and remaining maturities. The Company retires higher cost debt whenever it is
cost effective to do so within the constraints of the respective debt covenants.
Other Financial Instruments - The carrying amounts of the Company's other
financial instruments are a reasonable estimate of their fair values at December
31, 1993 and 1992.
6. Common Stock:
The Company has 20,000,000 shares of Common Stock authorized of which the
following shares were issued and outstanding:
1993 1992 1991
--------- --------- ---------
Beginning of Year 9,497,700 9,238,519 9,029,369
New Issues During Year:
Dividend Reinvestment and
Stock Purchase Plan 281,295 241,874 202,386
Employees' Stock Ownership Plan 4,941 5,577 6,254
Stock Option & Stock Appreciation
Rights Plan 20,640 11,730 510
--------- --------- ---------
End of Year 9,804,576 9,497,700 9,238,519
========= ========= =========
The average shares of Common Stock outstanding for 1993, 1992, and 1991 were
9,680,035, 9,393,652, and 9,158,932, respectively. In 1993, 1992, and 1991,
approximately $6.6 million, $9.6 million, and $3.1 million, respectively, were
credited to Premium on Common Stock.
On January 22, 1993, the Company's Board of Directors declared a 2 percent
common stock dividend, payable on March 31, 1993 to shareholders of record at
the close of business on March 10, 1993. Accordingly, the Company's financial
statements and related per share amounts have been restated.
The Company has a Stock Option and Stock Appreciation Rights Plan under which
not more than 306,000 shares in the aggregate may be issued to officers and
other key employees of the Company and its subsidiaries. No options or stock
appreciation rights may be granted under the plan after January 23, 1997. At
December 31, 1993, the Company had 53,620 options outstanding, exercisable at
prices from $17.16 to $24.69 per share. At December 31, 1992, the Company had
64,260 options outstanding, exercisable at prices from $17.16 to $17.89 per
share. During 1993, 1992 and 1991, 20,640, 11,730 and 510 options were
exercised, respectively, at prices ranging from $17.16 to $17.89 per share. On
September 16, 1993, the Company granted options on 10,000 shares exercisable at
$24.69. No options were granted in 1992 or 1991. No stock appreciation rights
have been issued under the plan. The stock options outstanding at December 31,
1993, 1992, and 1991 did not have a material effect on the earnings per share
calculations. The Company also has a Dividend Reinvestment and Stock Purchase
Plan (DRP) and Employees' Stock Ownership Plan (ESOP). As of December 31, 1993,
237,407 and 57,387 shares of authorized but unissued Common Stock were reserved
for future issuance to the DRP and ESOP, respectively.
7. Unused Lines of Credit and Compensating Balances:
Unused lines of credit available at December 31, 1993, were approximately $52.5
million. Borrowings under these lines of credit are at market rates which
approximated 3.5 percent at December 31, 1993. Demand deposits are maintained
with lending banks on an informal basis and do not constitute compensating
balances.
8. Retained Earnings:
There are certain restrictions under various loan agreements as to the amount of
cash dividends or other distributions that may be paid on the Common Stock of
certain subsidiaries. The Company's aggregate equity in its subsidiaries'
retained earnings that are free of these restrictions was approximately $33.9
million at December 31, 1993.
9. Commitments and Contingencies:
The estimated cost of construction and environmental remediation programs of the
Company and its subsidiaries for the year 1994 aggregates $32.8 million and, in
connection therewith, certain commitments have been made.
In May 1990, the BRC approved the stipulation entered into by the parties which
allowed SJG to collect 100 percent of its gas costs which reflect producer -
supplier take-or-pay costs from ratepayers. All costs billed by pipeline
suppliers on a volumetric basis are being passed through on a current basis.
Costs billed on a fixed basis were paid to a pipeline over a 3-year period, but
are being recovered from ratepayers over a 6-year period without interest. This
recovery mechanism started in November 1990. During 1993, 1992, and 1991, the
amount of these costs which have been
- 17 -
Notes to Consolidated Financial Statements, Continued
flowed through to SJG, net of refunds, was approximately $2.1 million, $5.4
million, and $5.6 million, respectively. Based on current estimates and
information available, there are no remaining fixed costs to be billed to SJG
under this stipulation.
SJG, in the normal course of conducting business, has entered into long-term
contracts for the supply of natural gas, firm transportation, and long-term firm
gas storage service. The earliest expiration of any of these contracts is 1997;
however, the initial primary term of this agreement can be extended annually
through October 1999. All of the transportation and storage service agreements
between SJG and its interstate pipeline suppliers are provided under tariffs on
file with, and approved by, the Federal Energy Regulatory Commission (FERC).
SJG's cumulative obligations for demand charges paid to its suppliers for all of
these services is approximately $5.0 million per month which is recovered on a
current basis through the LGAC.
During 1992, the FERC issued a series of orders requiring all interstate
pipelines to restructure their services. Included in these orders is FERC Order
No. 636 which required pipelines to separate their sales and transportation
services and change their rate design. Also, as a result of these orders, SJG
will incur certain transition costs, which have yet to be determined, that are
associated with its pipeline suppliers unbundling their services. SJG expects to
recover any costs resulting from these orders through its LGAC.
SJI and its subsidiaries have responded to requests from the U.S. Environmental
Protection Agency and the New Jersey Department of Environmental Protection and
Energy for information regarding several sites at which SJG or predecessor
companies operated gas manufacturing plants or a nonutility subsidiary
previously operated a fuel oil business. Manufactured gas operations were
terminated at all SJG sites more than 30 years ago. Through December 31, 1993,
the Company has recorded environmental remediation costs of $28.9 million, of
which $17.0 million has been expended. Management's estimate of the remaining
liability of approximately $11.9 million is reflected on the consolidated
balance sheet under the captions "Current Liabilities" and "Deferred Credits and
Other Non-Current Liabilities". Such amounts have not been adjusted for
potential insurance recovery, which management is pursuing. Recorded amounts
include estimated costs to be incurred through 1996 based on projected
investigation and remediation work plans using existing technologies. Estimates
beyond this time cannot be made on a reliable basis due to changing technology,
government regulations and site specific requirements and, therefore, have not
been recorded; however, the total costs to be incurred after 1996 may be
substantial. The major portion of such costs relate to the remediation of former
gas manufacturing sites of SJG, which has recorded and expended amounts of $26.8
million and $16.4 million, respectively, through December 31, 1993. SJG has
established a regulatory asset for these costs and is recovering its costs as
expended over 7-year amortization periods, as authorized by the BRC.
SJG has recovered $2.4 million through rates as of December 31, 1993. The
balance of such costs and payments, amounting to $2.1 million and $0.6 million,
respectively, relates to other environmental related costs including nonutility
sites previously used in fuel oil operations.
In June 1991, new gross receipts and franchise tax legislation was adopted in
New Jersey. The new legislation is accelerating the tax payments to a current
year basis by 1994. The transition to the current year basis required SJG to
make an additional annual payment of $15.4 million on April 1, 1993, and an
additional payment of approximately $13.7 million is required in 1994. In 1992,
SJG received a BRC rate order allowing recovery of the costs associated with the
acceleration of these tax payments through 1993. SJG petitioned the BRC for the
impact of the accelerated payment in 1994 as part of its current base rate
filing (See Notes 1 and 10).
10. Subsequent Event:
On January 7, 1994, SJG petitioned the BRC for a general base rate increase of
approximately $26.6 million based on a projected overall rate of return of 10.36
percent, including a 12.75 percent return on equity. As part of this petition,
SJG is seeking recovery of the carrying costs on expenditures for environmental
remediation of former gas manufacturing sites and on the accelerated payment of
gross receipts and franchise taxes in 1994. In addition, SJG is seeking recovery
of the additional cost of providing postretirement benefits other than pensions
in an effort to begin funding its increasing liability for such costs (See Note
1).
Management's Responsibilities for Financial Statements
The management of South Jersey Industries, Inc. is responsible for the integrity
and objectivity of the financial statements and related disclosures of the
Company. These statements and disclosures have been prepared using management's
best judgment and are in conformity with generally accepted accounting
principles.
The Company has adopted Financial Accounting Standards Board (FASB) Statement
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions", and FASB No. 109, "Accounting for Income Taxes", effective January 1,
1993.
The Board of Directors, acting through its Audit Committee, which is composed of
outside directors, oversees management's responsibilities for accounting,
internal control and financial reporting. The Audit Committee meets periodically
with management and the internal and independent auditors to discuss auditing
and financial matters, and to assure that each is carrying out its
responsibilities. The internal auditors and independent auditors have access to
the members of the Audit Committee at any time.
- 18 -
INDEPENDENT AUDITORS' REPORT
To the Shareholders and
Board of Directors of
South Jersey Industries, Inc.:
We have audited the consolidated balance sheet of South Jersey Industries, Inc.
and subsidiaries as of December 31, 1993 and 1992, and the related statements of
consolidated income, consolidated retained earnings and consolidated cash flows
for each of the three years in the period ended December 31, 1993. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the 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 audit provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of South Jersey Industries, Inc. and
subsidiaries as of December 31, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the
period ended December 31, 1993, in conformity with generally accepted accounting
principles.
As discussed in Notes 1 and 4 to the consolidated financial statements, the
Company changed its method of accounting for income taxes effective January 1,
1993, to conform with Statement of Financial Accounting Standards No. 109 and
its method of accounting for postretirement benefits other than pensions
effective January 1, 1993, to conform with Statement of Financial Accounting
Standards No. 106.
Deloitte & Touche
Cherry Hill, New Jersey
February 16, 1994
Management's Discussion
and Analysis of
Results of Operations
and Financial Condition
Results of Operations - 1993 Compared with 1992 - Utility revenues increased in
1993 principally due to increased residential sales, recognition of previously
deferred levelized gas adjustment clause overcollections, and higher
interruptible sales. Such increases were partially offset by lower cogeneration
and electric generation firm sales. The increase in residential sales reflects
the impact of 5,500 net customer additions and temperatures which were slightly
colder in 1993.
Nonutility revenue increased due to increased sales by The Morie Company, Inc.
and South Jersey Energy Company, partially offset by lower revenues by R&T
Group, Inc. Increased sales were partially offset by increased cost of sales and
other operating expenses. Nonutility operating results includes increased
operating income by The Morie Company, Inc. and South Jersey Energy Company,
partially offset by an R&T Group operating loss in 1993. R&T Group continues to
experience the impact resulting from price competition and depressed economic
activity in the construction sector. While R&T Group's construction revenues
decreased in 1993, revenues from environmental remediation activities increased.
Gas purchased for resale increased in 1993 due to increased volumes of gas sold
and higher unit prices. Utility operation expense is higher primarily due to
increased payroll and employee benefit cost and higher distribution and
regulatory expense. Maintenance cost is higher in 1993 principally due to
increases in gas utility maintenance cost partially offset by lower nonutility
maintenance cost. Utility maintenance cost includes the amortization of deferred
costs related to the remediation of former gas manufacturing sites.
Depreciation is higher in 1993 due to increased investment in property, plant
and equipment.
Interest charges decreased in 1993 due to a decrease in the balance of
overcollections associated with the cost of purchased natural gas and decreased
interest rates. Partially offsetting the decrease in interest expense was higher
long-term interest due to an increase in the level of long-term debt
outstanding.
In 1993, the Company adopted FASB No. 109, "Accounting for Income Taxes", which
resulted in an increase in net income of $382,000 and the creation of a
regulatory asset of approximately $17.6 million (See Notes 1 and 4). Also, in
1993, the Company adopted FASB No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions", which resulted in the recording of
a regulatory asset for the level of costs not currently recovered in rates (See
Note 1). As provided by FASB No. 106, the Company has elected to recognize the
unfunded transition obligation of approximately $27.8 million over a period of
20 years.
Net income applicable to common stock increased in 1993 as a result of the
improvement in utility earnings. This includes the effect of retaining increased
margins on interruptible sales as a result of the base rate case order which
became effective August 10, 1992. Earnings per share is lower due to the impact
of a higher average number of common shares outstanding in 1993.
- 19 -
Management's Discussion, Continued
Results of Operations - 1992 Compared with 1991 - Utility revenues increased in
1992, principally due to increased sales of 3.2 billion cubic feet of natural
gas to residential and commercial markets resulting from temperatures that were
17.2 percent colder in 1992 and approximately 5,800 net customer additions.
Revenues from industrial customers, cogeneration and electric generation
customers and the transportation of natural gas to various customer groups were
also higher in 1992. Industrial, cogeneration and electric generation and
transportation volumes increased by 6.8 billion cubic feet to 26.2 billion cubic
feet in 1992.
Utility operating income increased to a record level in 1992, principally due to
the effects of greater volumes of gas sold to heat-sensitive customers and
increased revenues from cogeneration customers. The rate case settlement in
August 1992, which resulted in a higher percentage retention of profits from
interruptible sales, also contributed to the increase in operating income.
Nonutility revenues increased in 1992 for SJE and R&T Group. Nonutility
operating income was higher in 1992 compared with 1991 mainly due to lower
operating expenses by Morie. Increased sales by SJE and R&T Group were offset by
higher operating expenses. R&T Group's net loss was higher due to greater price
competition and the depressed economic activity which continues to affect the
construction industry.
The increase in purchased gas expense in 1992 is related to the increase in
natural gas volumes sold by SJG. Tax expense increased in 1992 due to higher net
income and increased gas volume sales. Depreciation expense was higher in 1992
due to increased investments in property, plant and equipment. Interest charges
increased in 1992 because of higher levels of long-term debt outstanding and an
increase in interest expense associated with overcollections of fuel costs.
Partially offsetting this in crease was a decrease in short-term interest
charges in 1992 due to lower interest rates.
Earnings per share increased in 1992 primarily because of higher utility net
income, partially offset by an increase in the average number of common shares
outstanding. The increase in shares outstanding is primarily from the
participation by shareholders in the Company's Dividend Reinvestment and Stock
Purchase Plan.
Liquidity - Management anticipates that future operations will continue to
generate sufficient cash flows to meet its operating needs, pay dividends, repay
current portions of long-term debt, and finance a portion of the Company's
planned capital expenditures. In 1993, cash flow was impacted by an accelerated
gross receipts and franchise tax payment of $15.4 million to the State of New
Jersey and, in 1994, cash flow will be further impacted by a final accelerated
gross receipt and franchise tax payment of approximately $13.7 million, as
described in Note 9. The effect of the accelerated tax payments are reflected in
the Statements of Consolidated Cash Flows. Through December 31, 1993, SJG has
recovered the costs associated with such payments in rates as allowed by the BRC
and has petitioned the BRC for continued recovery (See Note 10).
Seasonal aspects of the Company's subsidiary operations affect cash flows,
revenues and operating expenses and, generally, the level of current assets and
current liabilities. Utility operations are usually greater during the first and
fourth quarter s, reflecting the impact of higher sales resulting from colder
temperatures. Sand mining and construction operations are usually greater during
the second and third quarters, reflecting higher demand for sand products and
construction services during warmer weather.
In other matters, the enactment of The Omnibus Budget Reconciliation Act of 1993
is not expected to have a material effect on the liquidity of SJI or its
subsidiaries.
Cash flows from operations are impacted by amounts collected in excess of, or
undercollections from, tariffs established under SJG's Levelized Gas Adjustment
Clause (LGAC). Overcollections represent increases in cash flow while
undercollections reflect decreases in cash flow. In 1993, cash flow from
operating activities was reduced by $18.3 million primarily as a result of the
impact of overcollections in 1992 which were returned to customers under the
LGAC. Overcollections are reflected in the balance sheet under the caption
"Revenues and Fuel Costs Deferred - Net" and undercollections are reflected in
the balance sheet under the caption "Deferred Fuel Costs". Beginning in December
1993, SJG began recovery of $23.8 million under its annual adjustment clauses
(See Note 1).
Short-term bank lines of credit aggregate $135.25 million of which $52.5 million
was unused at December 31, 1993. The credit lines are uncommitted and unsecured,
with borrowings thereunder being affected for various terms of less than one
year, at interest rates less than the prime rate of interest, in effect at the
time of borrowing.
Cash flow from nonutility operations is generally retained in the nonutility
companies with amounts in excess of cash requirements being passed up to the
Company either as a dividend or as a temporary short-term loan. Such activities
are not considered material in relation to the financial statements taken as a
whole.
The adoption of FASB No. 109 "Accounting for Income Taxes" resulted in the
creation of a regulatory asset and a deferred income tax liability of $17.6
million. It is expected that as the amortization of the asset occurs, such
amortization will be recoverable through rates. Also, FASB No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions", requires an accrual
basis of accounting for such benefits. Its adoption in 1993, as measured in
accordance with the statement, resulted in a projected annual cost of $4.7
million, including $1.4 million amortization of the actuarially computed
unfunded transition obligation of $27.8 million. The unfunded transition
obligation is being recognized over 20 years. The majority of the
postretirement benefit costs apply to SJG, which, as prescribed by the New
Jersey Board of Regulatory Commissioners (BRC), has recorded a regulatory asset
in the amount of approximately $3.9 million (See Note 1), representing the
excess of the annual cost over the level of costs recovered under current rates.
The recovery of this regulatory asset is addressed in the base rate case filed
with the BRC in January 1994, and it is expected that the recovery of such asset
will be included in base rates. It is not expected that the adoption of FASB No.
106 and No. 109 will adversely impact liquidity or debt covenants. In addition,
the application of FASB No. 112, "Employers' Accounting for Postemployment
Benefits", and FASB No. 115 "Accounting for Certain Investments In Debt and
Equity Securities" to become effective in 1994, are expected to have an
immaterial effect on the Company's financial statements and cash flows.
During 1992, the FERC issued a series of orders requiring all interstate
pipelines to restructure their services. Included in these orders is FERC Order
No. 636 which required the pipelines to separate sales and transportation
services and to change their rate design. Under FERC Order No. 636, as amended,
SJG is responsible for securing and maintaining its own gas supplies from
producers and other suppliers. SJG has entered into several contracts which,
when combined, replaced 100 percent of long-term gas supplies previously
purchased from interstate pipelines. SJG does not expect any adverse impact on
its operations, cash flows or
- 20 -
Management's Discussion, Continued
liquidity from the implementation of FERC Order No. 636. SJG expects to recover
any costs resulting from these orders through its LGAC.
The FERC's actions unbundling the services of natural gas pipelines under Orders
No. 636 and 547 were designed to increase competition by providing greater
access by buyers and sellers to pipeline systems. As a result, companies such
as SJG and SJE have greater flexibility in marketing gas, transportation and
storage capacity, thereby providing greater profit opportunities. Although the
impact of such sales or net income was not material in 1993, it is expected that
the SJI companies' resources and experience in this area should result in
increasing revenues and profits in future years.
SJG, in the normal course of conducting business, has entered into long-term
contracts for the supply of natural gas, firm transportation, and long-term firm
gas storage service. The earliest expiration of any of these contracts is 1997;
however, the initial primary term of this agreement can be extended annually
through October 1999. All of the transportation, and storage service agreements
between SJG and its interstate pipeline suppliers are provided under tariffs on
file with, and approved by, the FERC. SJG's cumulative obligations for demand
charges paid t o its suppliers for all of these services is approximately $5.0
million per month which is recovered on a current basis through its LGAC.
There are presently gas-producer state regulations which could limit natural gas
production. SJG has not experienced any limitations in its ability to obtain
natural gas supplies and believes that its gas supply agreements will allow it
to obtain supplies at competitive prices and to compete with other energy
supplier s in the marketplace on an ongoing basis.
Through December 31, 1993, the Company has recorded environmental remediation
costs of $28.9 million, of which $17.0 million has been expended. The remaining
liability of approximately $11.9 million is reflected in the balance sheet under
the captions "Current Liabilities" and "Deferred Credits and Other Non-Current
Liabilities". Such amounts have not been adjusted for potential insurance
recovery, which management is pursuing. Recorded amounts include estimated
costs to be incurred through 1996 based on projected investigation and
remediation work plans using existing technologies. Estimates beyond this time
cannot be made on a reliable basis due to changing technology, government
regulations and site specific requirements and, therefore, have not been
recorded; however, the total costs to be incurred after 1996 could be
substantial. The major portion of such costs relate to the remediation of former
gas manufacturing sites of SJG, which has recorded and expended amounts of $26.8
million and $16.4 million, respectively, through December 31, 1993. SJG has
established a regulatory asset for these costs and is recovering its costs over
7-year amortization periods, as authorized by the BRC. SJG has recovered $2.4
million through rates as of December 31, 1993. The balance of such costs and
payments, amounting to $2.1 million and $0.6 million, respectively, relates to
other environmental related costs including nonutility sites previously used in
fuel oil operations.
Capital Resources - The Company has a continuing need for cash resources and
capital, primarily to invest in new and replacement equipment and facilities for
its utility subsidiary. Total construction expenditures for utility and
nonutility operations were $36.7 million in 1993. Construction expenditures
over the next three years, including environmental remediation, are estimated at
a level of approximately $33.0 million annually. Such investment is expected to
be funded from several sources including cash generated by operations, temporary
use of short-term debt, sale of first mortgage bonds, sale of common stock
and capital leases.
The Company plans to continue the sale of common stock under its Dividend
Reinvestment and Stock Purchase Plan, the proceeds of which will be used for
general corporate purposes. In 1993, SJI issued 306,876 shares of common stock
through its various plans, including a Stock Option and Stock Appreciation
Rights Plan, its Dividend Reinvestment and Stock Purchase Plan and Employees'
Stock Ownership Plan for approximately $7.0 million. In 1992, SJI issued 259,181
common shares for approximately $5.2 million under such plans (shares issued
reflect the 2 percent stock dividend declared in the first quarter of 1993 - See
Note 6).
On June 29, 1993, SJG sold $35.0 million of its First Mortgage Bonds, 6.95%
Series, and on April 29, 1992, SJG sold $25.0 million of First Mortgage Bonds,
8.19% Series. The proceeds of such issues were used to reduce short-term debt
incurred in connection with SJG's construction program.
Inflation - The impact of inflation on nonutility operations tends to follow the
movement of the general price index. The nonutility operations respond to this
by implementing cost control measures and increasing prices in an attempt to
maintain or improve each company's financial results.
As to utility operations, the ratemaking process provides that only the original
cost of utility plant is recoverable in revenues as depreciation. Therefore, the
excess cost of utility plant, stated in terms of current cost over the original
cost of utility plant, is not presently recoverable. While the ratemaking
process gives no recognition to the current cost of replacing utility plant,
based on past practices the Company believes it will be allowed to earn on the
increased cost of its net investment as replacement of facilities actually
occurs.
Summary - The Company is confident it will have sufficient cash flow to meet its
operating, capital and dividend needs and is taking and will take such actions
necessary to employ its resources effectively.
- 21 -
<TABLE>
Quarterly Financial Data
The summarized quarterly results of operations of the Company, in thousands except for per share
amounts, for 1993 and 1992 are presented below:
<CAPTION>
1993 Quarter Ended 1992 Quarter Ended
------------------------------------------ ------------------------------------------
March 31 June 30 Sept. 30 Dec. 31 March 31 June 30 Sept. 30 Dec. 31
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues $113,447 $ 65,150 $ 60,529 $ 94,815 $ 94,171 $ 61,044 $ 55,564 $105,887
--------- --------- --------- --------- --------- --------- --------- ---------
Operating Expenses:
Operation and Maintenance
Including Fixed Charges 83,124 59,378 57,739 76,092 66,762 52,166 53,562 86,346
Federal Income Taxes 5,168 (115) (788) 2,790 4,570 710 (949) 2,761
Gross Receipts, Franchise
and Other Taxes 14,994 5,810 4,322 10,269 13,789 6,366 4,331 10,933
--------- --------- --------- --------- --------- --------- --------- ---------
Income (Loss) Before Preferred
Stock Dividend Requirement 10,161 77 (744) 5,664 9,050 1,802 (1,380) 5,847
Preferred Stock Dividend
Requirement of Subsidiary 47 47 46 47 49 48 47 48
--------- --------- --------- --------- --------- --------- --------- ---------
Income (Loss) Before Cumulative
Effect of a Change in
Accounting Principle 10,114 30 (790) 5,617 9,001 1,754 (1,427) 5,799
Cumulative Effect of a Change
in Accounting Principle 382 - - - - - - -
--------- --------- --------- --------- --------- --------- --------- ---------
Net Income (Loss) Applicable
to Common Stock $ 10,496 $ 30 $ (790) $ 5,617 $ 9,001 $ 1,754 $ (1,427) $ 5,799
========= ========= ========= ========= ========= ========= ========= =========
Earnings (Loss) Per Common
Share (Based on Average
Shares Outstanding)(1)(2):
Before Cumulative Effect of a Change
in Accounting Principle $ 1.06 $ 0.00 $ (0.08) $ 0.57 $ 0.97 $ 0.19 $ (0.15) $ 0.61
Cumulative Effect of a Change
in Accounting Principle 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00
--------- --------- --------- --------- --------- --------- --------- ---------
$ 1.10 $ 0.00 $ (0.08) $ 0.57 $ 0.97 $ 0.19 $ (0.15) $ 0.61
========= ========= ========= ========= ========= ========= ========= =========
Average Shares Outstanding (2) 9,567 9,636 9,713 9,804 9,290 9,360 9,427 9,498
(1) The sum of the quarters for 1992 does not equal the total due to rounding.
(2) Per share data has been restated to reflect the 2 percent Stock Dividend declared on January 22, 1993.
NOTE: Because of the seasonal nature of the business, statements for the three-month periods are not
indicative of the results for a full year.
</TABLE>
<TABLE>
Market Price of Common Stock and Related Information
<CAPTION>
Market Price Market Price
Quarter Ended Per Share Dividends Quarter Ended Per Share Dividends
------------- ------------------ Declared ------------- ------------------ Declared
1993 High Low Per Share 1992 High Low Per Share
------------- -------- -------- --------- ------------- -------- -------- ---------
<S> <C> <C> <C> <S> <C> <C> <C>
March 31 26 22 1/4 $0.353 March 31 21 3/8 19 1/2 $0.353
June 30 25 1/2 23 5/8 $0.360 June 30 21 3/4 19 1/2 $0.353
Sept. 30 27 1/2 24 1/8 $0.360 Sept. 30 23 3/8 21 1/8 $0.353
Dec. 31 25 3/4 22 7/8 $0.360 Dec. 31 23 5/8 22 1/4 $0.353
These quotations are based on the list of composite transactions of the New York Stock Exchange. The Company's
stock is traded on the New York and Philadelphia stock exchanges and the ticker symbol is SJI. The Company
has declared and expects to continue to declare regular quarterly cash dividends. As of December 10, 1993,
the latest available date, the stock records indicate that there were approximately 13,115 shareholders.
- 22 -
</TABLE>
<TABLE>
South Jersey Industries, Inc. and Subsidiaries Comparative Operating Statistics
<CAPTION>
1993 1992 1991 1990 1989
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
South Jersey Gas Company
Operating Revenues (Thousands):
Firm
Residential $142,409 $131,749 $117,904 $112,362 $126,241
Commercial 57,392 56,774 51,833 51,102 54,042
Industrial & Other 14,725 17,273 12,070 15,871 14,381
Cogeneration & Electric Generation 23,726 24,110 12,899 2,213 153
Firm Transportation 13,746 11,120 10,252 8,578 5,729
--------- --------- --------- --------- ---------
Total Firm 251,998 241,026 204,958 190,126 200,546
Interruptible 11,299 8,283 9,425 14,375 18,270
Interruptible Transportation 2,412 2,837 2,891 2,896 2,416
Off System 8,788 - - - -
Other 3,084 3,112 3,022 3,139 3,153
--------- -------- -------- -------- --------
Total Operating Revenues $277,581 $255,258 $220,296 $210,536 $224,385
========= ========= ========= ========= =========
Gas Sales and Transportation Volumes (MMcf):
Firm
Residential 19,368 18,748 16,442 15,439 17,762
Commercial 9,182 9,686 8,812 8,514 9,007
Industrial & Other 2,599 3,341 2,412 2,911 2,687
Cogeneration & Electric Generation 6,741 8,629 4,593 693 36
Firm Transportation 10,194 8,739 6,858 4,965 3,943
--------- --------- --------- --------- ---------
Total Firm Sales 48,084 49,143 39,117 32,522 33,435
--------- --------- --------- --------- ---------
Interruptible 3,105 2,333 2,613 4,158 5,607
Interruptible Transportation 4,328 5,455 5,519 5,429 4,635
Off System 3,563 - - - -
--------- --------- --------- --------- ---------
Total Gas Sales & Transportation 59,080 56,931 47,249 42,109 43,677
========= ========= ========= ========= =========
Number of Customers at Year End:
Residential 218,484 212,939 207,366 201,962 195,398
Commercial 16,206 15,849 15,629 15,275 14,936
Industrial 377 394 393 399 399
--------- --------- --------- --------- ---------
Total Customers 235,067 229,182 223,388 217,636 210,733
========= ========= ========= ========= =========
Maximum Daily Sendout (MMcf) 318 290 277 270 272
========= ========= ========= ========= =========
Annual Degree Days 4,953 4,916 4,195 3,597 4,786
========= ========= ========= ========= =========
Normal Degree Days (Rolling Average) * 4,453 4,409 4,557 4,559 4,578
========= ========= ========= ========= =========
The Morie Company, Inc.
Operating Revenues (Thousands):
New Jersey $ 16,175 $ 14,884 $ 16,344 $ 18,136 $ 18,374
Other 12,260 12,265 10,753 10,607 11,549
--------- --------- --------- --------- ---------
Total Operating Revenues $ 28,435 $ 27,149 $ 27,097 $ 28,743 $ 29,923
========= ========= ========= ========= =========
Sand & Gravel Sales (Thousands of Tons):
New Jersey 1,634 1,359 1,749 1,942 1,953
Other 914 969 850 880 999
--------- --------- --------- --------- ---------
Total Sales 2,548 2,328 2,599 2,822 2,952
========= ========= ========= ========= =========
* Average degree days recorded in SJG service territory during 5-year period ended June 30 of prior year.
- 23 -
</TABLE>
SOUTH JERSEY INDUSTRIES, INC.
BOARD OF DIRECTORS
Frank L. Bradley, Jr.
Retired; former Chairman of the Board, President and CEO of
Stone & Webster Management Consultants, Inc., New York, N.Y.
Richard L. Dunham
Chairman of Zinder Companies, Inc., an economic and regulatory
consulting firm, Washington, D.C.
W. Cary Edwards
Of Counsel, law firm of Mudge, Rose, Guthrie, Alexander & Ferdon,
Parsippany, N.J.
Thomas L. Glenn, Jr.
Chairman, Glenn Insurance, Inc., Absecon, N.J.
Vincent E. Hoyer
Retired; former President of New Jersey Manufacturers
Insurance Company, West Trenton, N.J.
Herman D. James, Ph.D.
President, Rowan College of New Jersey, Glassboro, N.J.
Marilyn Ware Lewis
Chairman of the Board, American Water Works Company, Inc.,
Voorhees, N.J.
Clarence D. McCormick
Chairman, President and Director of The Farmers and Merchants
National Bank and Southern Jersey Bancorp of Delaware, Bridgeton, N.J.
Peter M. Mitchell, Ph.D.
President, Massachusetts Maritime Academy, Buzzards Bay, Mass.
Jackson Neall
Retired; former real estate appraiser and registered builder
William F. Ryan
President and Chief Executive Officer of South Jersey Industries, Inc.;
Chairman of the Board, President and Chief Executive Officer of
South Jersey Gas Company; Chairman of the Board and Chief Executive Officer
of Energy & Minerals, Inc. and R & T Group, Inc.
Shirli M. Vioni, Ph.D.
Superintendent, Oberlin, Ohio City Schools, Oberlin, Ohio
Frederick A. Westphal
Retired; former President, New Jersey State Chamber of Commerce,
Trenton, N.J.
SOUTH JERSEY INDUSTRIES, INC.
COMMITTEES AND MEMBERS
Executive Committee
William F. Ryan, Chairman
Frank L. Bradley, Jr.
Richard L. Dunham
Thomas L. Glenn, Jr.
Clarence D. McCormick
Peter D. Mitchell
Frederick A. Westphal
Compensation/Pension Committee
Frederick A. Westphal, Chairman
Frank L. Bradley, Jr.
Richard L. Dunham
W. Cary Edwards
Vincent E. Hoyer
Marilyn Ware Lewis
Clarence D. McCormick
Audit Committee
Thomas L. Glenn, Jr., Chairman
W. Cary Edwards
Herman D. James
Marilyn Ware Lewis
Jackson Neall
Shirli M. Vioni
Frederick A. Westphal
Management Development Committee
Peter M. Mitchell, Chairman
Vincent E. Hoyer
Herman D. James
Jackson Neall
Shirli M. Vioni
William F. Ryan*
*Ex Officio
SOUTH JERSEY INDUSTRIES, INC.
OFFICERS
William F. Ryan
President and Chief Executive Officer
Gerald S. Levitt
Vice President and Chief Financial Officer
George L. Baulig
Secretary and Assistant Treasurer
Richard B. Tonielli
Treasurer
William J. Smethurst, Jr.
Assistant Secretary and Assistant Treasurer
- 24 -
CORPORATE HEADQUARTERS
Number One South Jersey Plaza
Route 54
Folsom, NJ 08037-9917
(609) 561-9000
TDD only 1-800-547-9085
Transfer Agent and Registrar
First Fidelity Bank, N.A., New Jersey
Stock Transfer Department
765 Broad Street
Newark, NJ 07101
Dividend, Dividend Reinvestment and
Other Shareholder Inquiries
South Jersey Industries, Inc.
Shareholders Records Department
Number One South Jersey Plaza
Route 54
Folsom, NJ 08037-9917
ANNUAL MEETING INFORMATION
The Annual Meeting of Shareholders will be held on
Thursday, April 21, 1994 at 10:00 a.m. at the company's
corporate headquarters.
South Jersey Industries, Inc. stock is traded on the
New York and Philadelphia stock exchanges under
the trading symbol, SJI.
The information contained herein is not given in connection
with any sale or offer of, or solicitation of an offer to buy,
any securities.
This report is printed on recycled paper
Exhibit 21
SUBSIDIARIES OF REGISTRANT
AS OF DECEMBER 31, 1993
% of Voting
Securities State of
Owned by Parent Relationship Incorporation
South Jersey Industries, Inc. Registrant Parent New Jersey
South Jersey Gas Company (4) 98.91 (1) New Jersey
Energy & Minerals, Inc. (4) 100 (1) New Jersey
The Morie Company, Inc. (4) 100 (2) New Jersey
South Jersey Fuel, Inc. (4) 100 (2) New Jersey
South Jersey Energy
Company (4) 100 (1) New Jersey
R&T Group, Inc. (4) 100 (1) New Jersey
R and T Castellini
Company, Inc. (4) 100 (3) New Jersey
Cape Atlantic Crane
Company, Inc. (4) 100 (3) New Jersey
S.W. Downer, Jr.
Company, Inc. (4) 100 (3) New Jersey
Onshore Construction
Company, Inc. (4) 100 (3) New Jersey
R & T Castellini
Construction
Company, Inc. (4) 100 (3) Delaware
(1) Subsidiary of South Jersey Industries, Inc.
(2) Subsidiary of Energy & Minerals, Inc.
(3) Subsidiary of R&T Group, Inc.
(4) Subsidiary included in financial statements
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
South Jersey Industries, Inc:
We consent to the incorporation by reference in Registration
Statement Nos. 33-27132, 33-20196 and 33-44278 on Forms S-8
and Registration Statement Nos. 33-24123 and 33-36581 on
Forms S-3 of our reports dated February 16, 1994 appearing in
and incorporated by reference in the Annual Report on Form
10-K of South Jersey Industries, Inc. for the year ended
December 31, 1993.
DELOITTE & TOUCHE
Cherry Hill, New Jersey
March 16, 1994
Exhibit 24
Page 1 of 2
SOUTH JERSEY INDUSTRIES, INC.
POWER OF ATTORNEY
Each of the undersigned, in his capacity as an officer or
director, or both, as the case may be, of South Jersey Industries,
Inc., a New Jersey corporation, does hereby appoint William F. Ryan,
Gerald S. Levitt, and G.L. Baulig, and each of them, severally, as his
or her true and lawful attorneys or attorney to execute in his or her
name, place and stead, in his or her capacity as a director or officer,
or both, as the case may be, of said corporation, its Annual Report for
the fiscal year ended December 31, 1993 on Form
10-K, pursuant to Section 13 of the Securities Exchange Act of 1934,
and any and all amendments thereto and instruments necessary or
incidental in connection therewith, and to file the same with the
Securities and Exchange Commission; and does hereby provide that each
of said attorneys shall have power to act hereunder with or without the
other said attorneys, and shall have full power of substitution and
resubstitution and that each of said attorneys shall have full power
and authority to do and perform in the name and on behalf of the
undersigned in any and all capacities every act whatsoever required to
be done in the premises, as fully and to all intents and purposes as he
or she might or could do in person, hereby ratifying and approving the
acts of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned have executed this instrument,
this 23th day of March 1994.
/s/ William F. Ryan
William F. Ryan, President and Director
/s/ Frank L. Bradley, Jr.
Frank L. Bradley, Jr., Director
/s/ Richard L. Dunham
Richard L. Dunham, Director
/s/ W. Cary Edwards
W. Cary Edwards, Director
/s/ Thomas L. Glenn, Jr.
Thomas L. Glenn, Jr., Director
Re: Power of Attorney -- 10-K Page 2 of 2
/s/ Vincent E. Hoyer
Vincent E. Hoyer, Director
/s/ Herman D. James
Herman D. James, Director
/s/ Marilyn Ware Lewis
Marilyn Ware Lewis, Director
/s/ Clarence D. McCormick
Clarence D. McCormick, Director
/s/ Peter M. Mitchell
Peter M. Mitchell, Director
/s/ Jackson Neall
Jackson Neall, Director
/s/ Shirli M. Vioni
Shirli M. Vioni, Director
/s/ Frederick A. Westphal
Frederick A. Westphal, Director
/s/ Gerald S. Levitt
Gerald S. Levitt, Vice President
/s/ Richard B. Tonielli
Richard B. Tonielli, Treasurer
