SEGMENTS OF BUSINESS

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENTS OF BUSINESS

SEGMENTS OF BUSINESS:

ASC 280, Segment Reporting, establishes standards for reporting information about operating segments and requires that a public business enterprise report financial and descriptive information about its reportable operating segments. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the CODM in deciding how to allocate resources and in assessing performance.

Beginning with the first quarter of 2021, our internal management reporting, specifically around our nonutility businesses, changed primarily due to recent acquisitions and divestitures, and new product lines entered into as a result. These were primarily within the fuel cell, solar, RNG, and retail businesses. Refer to Item 1, along with Note 1 to the Consolidated Financial Statements in Item 8, of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2020 for information about these acquisitions and divestitures.

As a result of these changes in our businesses, the Company realigned its operating segments. The realigned segments reflect the financial information regularly evaluated by the CODM, which for SJI is the Company's Chief Executive Officer.

The operating 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 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. On July 31, 2020, SJI sold ELK to a third-party buyer.

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

•Retail services operations includes the activities of SJE, SJESP and SJEI, as well as our equity interest in Millennium.

•Renewables consists of:

◦The Catamaran joint venture, which owns Annadale.

◦Solar-generation sites located in New Jersey, and three legacy solar projects, one of which was sold during the first quarter of 2020.

◦The activities of ACLE, BCLE, SCLE and SXLE. Operations at BCLE, SCLE, and SXLE ceased during the second quarter of 2020.

◦MTF and ACB, which were sold in the first quarter of 2020.

•Decarbonization consists of

◦SJI Renewables Energy Ventures, LLC, which includes our equity interest in REV, which is included in Equity in Earnings of Affiliated Companies on the condensed consolidated statements of income.

◦SJI RNG Devco, LLC, which includes the renewable natural gas development rights in certain dairy farms; there are no operating results from this entity at this time.

•Midstream invests in infrastructure and other midstream projects, including an investment in PennEast.

•Corporate & Services segment includes costs related to financing, acquisitions and divestit