SEGMENTS OF BUSINESS:

SJI operates in several different reportable operating segments which reflect the financial information regularly evaluated by the CODM. These segments are as follows:


•	SJG utility operations consist primarily of natural gas distribution to residential, commercial and industrial customers in southern New Jersey.


•	ETG utility operations consist primarily of natural gas distribution to residential, commercial and industrial customers in northern and central New Jersey.


•	ELK utility operations consist of natural gas distribution to residential, commercial and industrial customers in Maryland.


•	Wholesale energy operations include the activities of SJRG and SJEX.


•	Retail gas and other operations at SJE included natural gas acquisition and transportation service business lines. This business was sold on November 30, 2018 (see Note 1).


•	Retail electric operations at SJE consist of electricity acquisition and transportation to commercial, industrial and residential customers.


•	On-site energy production consists of Marina's thermal energy facility and other energy-related projects. Also included in this segment are the activities of ACB, ACLE, BCLE, SCLE, SXLE, along with MCS, NBS and SBS, which were sold in October 2018 (see Note 1).


•	Appliance service operations includes SJESP, which receives commissions on service contracts from a third party.


•	Midstream was formed to invest in infrastructure and other midstream projects, including a current project to build a natural gas pipeline in Pennsylvania and New Jersey.


•	Corporate & Services segment includes costs related to the Acquisition, along with other unallocated costs.


•	Intersegment represents intercompany transactions between the above SJI consolidated entities.

SJI groups its utility businesses under its wholly-owned subsidiary SJIU. This group consists of gas utility operations of SJG, ETG and ELK. SJI groups its nonutility operations into separate categories: Energy Group and Energy Services. Energy Group includes wholesale energy, retail gas and other, and retail electric operations. Energy Services includes on-site energy production and appliance service operations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

Information about SJI’s operations in different reportable operating segments is presented below (in thousands). The results for ETG and ELK utility operations are included from the date of the Acquisition, July 1, 2018, through December 31, 2018.



	2018			2017			2016
Operating Revenues:
SJI Utilities:
SJG Utility Operations	$	548,000		$	517,254		$	461,055
ETG Utility Operations	125,604			—			—
ELK Utility Operations	3,302			—			—
Subtotal SJI Utilities	676,906			517,254			461,055
Energy Group:
Wholesale Energy Operations	636,005			352,613			220,707
Retail Gas and Other Operations	101,543			111,048			92,371
Retail Electric Operations	176,945			179,534			182,540
Subtotal Energy Group	914,493			643,195			495,618
Energy Services:
On-Site Energy Production	72,374			99,517			94,375
Appliance Service Operations	1,957			6,488			7,898
Subtotal Energy Services	74,331			106,005			102,273
Corporate & Services	51,000			45,024			35,147
Subtotal	1,716,730			1,311,478			1,094,093
Intersegment Sales	(75,392		)	(68,410		)	(57,593		)
Total Operating Revenues	$	1,641,338		$	1,243,068		$	1,036,500



	2018			2017			2016
Operating Income (See Note 1):
SJI Utilities:
SJG Utility Operations	$	132,688		$	138,875		$	125,052
ETG Utility Operations	2,164			—			—
ELK Utility Operations	(256		)	—			—
Subtotal SJI Utilities	134,596			138,875			125,052
Energy Group:
Wholesale Energy Operations	87,895			(36,815		)	41,667
Retail Gas and Other Operations	(8,721		)	(2,468		)	4,680
Retail Electric Operations	(359		)	3,620			7,007
Subtotal Energy Group	78,815			(35,663		)	53,354
Energy Services:
On-Site Energy Production	(88,230		)	(83,654		)	13,301
Appliance Service Operations	1,818			217			582
Subtotal Energy Services	(86,412		)	(83,437		)	13,883
Midstream	(292		)	—			—
Corporate and Services	(25,962		)	(10,932		)	1,888
Total Operating Income	$	100,745		$	8,843		$	194,177

Depreciation and Amortization:
SJI Utilities:
SJG Utility Operations	$	82,622		$	71,654		$	63,901
ETG Utility Operations	13,580			—			—
ELK Utility Operations	222			—			—
Subtotal SJI Utilities	96,424			71,654			63,901
Energy Group:
Wholesale Energy Operations	105			125			484
Retail Gas and Other Operations	279			323			337
Subtotal Energy Group	384			448			821
Energy Services:
On-Site Energy Production	23,123			46,928			43,395
Appliance Service Operations	—			153			301
Subtotal Energy Services	23,123			47,081			43,696
Corporate and Services	12,983			4,303			1,400
Total Depreciation and Amortization	$	132,914		$	123,486		$	109,818

Interest Charges (See Note 1):
SJI Utilities:
SJG Utility Operations	$	28,011		$	24,705		$	17,875
ETG Utility Operations	10,478			—			—
ELK Utility Operations	4			—			—
Subtotal SJI Utilities	38,493			24,705			17,875
Energy Group:
Wholesale Energy Operations	—			3,150			—
Retail Gas and Other Operations	487			250			350
Subtotal Energy Group	487			3,400			350
Energy Services:
On-Site Energy Production	15,364			16,838			11,961



Midstream	1,966			985			—
Corporate and Services	54,107			23,819			12,118
Subtotal	110,417			69,747			42,304
Intersegment Borrowings	(20,121		)	(15,728		)	(10,855		)
Total Interest Charges	$	90,296		$	54,019		$	31,449



	2018			2017			2016

Income Taxes (See Note 1):
SJI Utilities:
SJG Utility Operations	$	26,413		$	45,700		$	39,366
ETG Utility Operations	(3,086		)	—			—
ELK Utility Operations	(70		)	—			—
Subtotal SJI Utilities	23,257			45,700			39,366
Energy Group:
Wholesale Energy Operations	22,473			(14,720		)	15,882
Retail Gas and Other Operations	(2,360		)	(544		)	2,118
Retail Electric Operations	(101		)	1,480			2,862
Subtotal Energy Group	20,012			(13,784		)	20,862
Energy Services:
On-Site Energy Production	(26,397		)	(39,262		)	(6,353		)
Appliance Service Operations	534			4			232
Subtotal Energy Services	(25,863		)	(39,258		)	(6,121		)
Midstream	(190		)	(41		)	—
Corporate and Services	(16,655		)	(17,554		)	44
Total Income Taxes	$	561		$	(24,937	)	$	54,151

Property Additions:
SJI Utilities:
SJG Utility Operations	$	253,617		$	253,545		$	228,275
ETG Utility Operations	90,259			—			—
ELK Utility Operations	1,820			—			—
Subtotal SJI Utilities	345,696			253,545			228,275
Energy Group:
Wholesale Energy Operations	34			14			7
Retail Gas and Other Operations	495			889			1,642
Subtotal Energy Group	529			903			1,649
Energy Services:
On-Site Energy Production	2,686			12,588			38,193
Appliance Service Operations	—			260			431
Subtotal Energy Services	2,686			12,848			38,624
Midstream	119			218			505
Corporate and Services	1,826			2,233			636
Total Property Additions	$	350,856		$	269,747		$	269,689

(1) The property additions for ETG Utility Operations and ELK Utility Operations in 2018 do not include the approximately $1.077 billion and $12.3 million, respectively, of Property, Plant and Equipment obtained through the Acquisition as discussed in Note 20.



	2018			2017
Identifiable Assets:
SJI Utilities:
SJG Utility Operations	$	3,118,236		$	2,865,974
ETG Utility Operations	2,148,175			—
ELK Utility Operations	16,482			—
Subtotal SJI Utilities	5,282,893			2,865,974
Energy Group:
Wholesale Energy Operations	266,417			208,785
Retail Gas and Other Operations	12,736			56,935
Retail Electric Operations	39,345			34,923
Subtotal Energy Group	318,498			300,643
Energy Services:
On-Site Energy Production	195,329			582,587
Appliance Service Operations	—			1,338
Subtotal Energy Services	195,329			583,925
Discontinued Operations	1,777			1,757
Midstream	72,333			63,112
Corporate and Services	387,482			711,038
Intersegment Assets	(301,735		)	(661,363		)
Total Identifiable Assets	$	5,956,577		$	3,865,086