91928--3/1/2007--SOUTH_JERSEY_INDUSTRIES

related topics

{gas, price, oil}

{condition, economic, financial}

{financial, litigation, operation}

{tax, income, asset}

{loan, real, estate}

{cost, regulation, environmental}

{operation, natural, condition}

{capital, credit, financial}

SJI is a holding company and its assets consist primarily of investments in subsidiaries. SJI s business activities are concentrated in southern New Jersey. Changes in the regulatory environment or unfavorable rate regulation at its utility may have an unfavorable impact on SJI s financial performance or condition. SJI may not be able to respond effectively to competition, which may negatively impact SJI s financial performance or condition. Warm weather, high commodity costs, or customer conservation initiatives could result in reduced demand for some of SJI s energy products and services. High natural gas prices could cause more of SJI s receivables to be uncollectible. SJI s net income could decrease if it is required to incur additional costs to comply with new governmental safety, health or environmental legislation. SJI s wholesale commodity marketing business is exposed to the risk that counterparties that owe money or energy to SJI will not be able to meet their obligations for operational or financial reasons. Increasing interest rates will negatively impact the net income of SJI. A downgrade in SJG s credit rating could negatively affect its ability to access adequate and cost effective capital. Hedging activities of the company designed to protect against commodity price or interest rate risk may cause fluctuations in reported financial results and SJI s stock price could be adversely affected as a result. The inability to obtain natural gas would negatively impact the financial performance of SJI. Transporting and storing natural gas involves numerous risks that may result in accidents and other operating risks and costs. Adverse results in legal proceedings could be detrimental to the financial condition of SJI.

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91928--3/1/2007--SOUTH_JERSEY_INDUSTRIES_INC