SEGMENTS OF BUSINESS | SEGMENTS OF BUSINESS: SJI operates in several different reportable operating segments which reflect the financial information regularly evaluated by the chief operating decision maker. These segments are as follows: • Gas utility operations (SJG) consists primarily of natural gas distribution to residential, commercial and industrial customers. • Wholesale energy operations include the activities of SJRG and SJEX. • SJE is involved in both retail gas and retail electric activities. ◦ Retail gas and other operations include natural gas acquisition and transportation service business lines. ◦ Retail electric operations consist of electricity acquisition and transportation to commercial and industrial customers. • On-site energy production consists of Marina's thermal energy facility and other energy-related projects. • Appliance service operations includes SJESP’s servicing of appliances under warranty via a subcontractor arrangement as well as on a time and materials basis. • The activities of Midstream are a part of the Corporate & Services segment. SJI groups its nonutility operations into two 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. Intersegment sales and transfers are treated as if the sales or transfers were to third parties at current market prices. Information about SJI’s operations in different reportable operating segments is presented below (in thousands): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Operating Revenues: Gas Utility Operations $ 58,634 $ 60,952 $ 402,104 $ 340,656 Energy Group: Wholesale Energy Operations 9,352 (3,538 ) 77,973 28,898 Retail Gas and Other Operations 11,757 18,900 67,900 95,281 Retail Electric Operations 44,240 29,961 110,203 98,233 Subtotal Energy Group 65,349 45,323 256,076 222,412 Energy Services: On-Site Energy Production 18,898 16,453 47,606 42,196 Appliance Service Operations 2,290 2,319 7,346 7,610 Subtotal Energy Services 21,188 18,772 54,952 49,806 Corporate & Services 6,925 7,001 23,776 21,324 Subtotal 152,096 132,048 736,908 634,198 Intersegment Sales (11,034 ) (9,621 ) (35,183 ) (28,299 ) Total Operating Revenues $ 141,062 $ 122,427 $ 701,725 $ 605,899 Three Months Ended Nine Months Ended 2015 2014 2015 2014 Operating (Loss) Income: Gas Utility Operations $ (2,501 ) $ 3,368 $ 82,649 $ 75,813 Energy Group: Wholesale Energy Operations (11,813 ) (10,314 ) 3,675 (20,437 ) Retail Gas and Other Operations (4,821 ) (390 ) (1,581 ) 1,387 Retail Electric Operations 1,034 373 1,026 (521 ) Subtotal Energy Group (15,600 ) (10,331 ) 3,120 (19,571 ) Energy Services: On-Site Energy Production 2,265 2,171 3,960 4,547 Appliance Service Operations 216 60 411 322 Subtotal Energy Services 2,481 2,231 4,371 4,869 Corporate and Services 567 619 1,518 1,041 Total Operating (Loss) Income $ (15,053 ) $ (4,113 ) $ 91,658 $ 62,152 Depreciation and Amortization: Gas Utility Operations $ 14,911 $ 12,942 $ 43,317 $ 38,375 Energy Group: Wholesale Energy Operations 191 37 238 123 Retail Gas and Other Operations 39 19 79 61 Subtotal Energy Group 230 56 317 184 Energy Services: On-Site Energy Production 7,650 6,540 22,158 18,480 Appliance Service Operations 85 68 232 202 Subtotal Energy Services 7,735 6,608 22,390 18,682 Corporate and Services 261 (41 ) 961 413 Total Depreciation and Amortization $ 23,137 $ 19,565 $ 66,985 $ 57,654 Interest Charges: Gas Utility Operations $ 4,809 $ 4,046 $ 15,112 $ 12,680 Energy Group: Wholesale Energy Operations 150 74 280 190 Retail Gas and Other Operations — 43 120 237 Subtotal Energy Group 150 117 400 427 Energy Services: On-Site Energy Production 2,433 1,835 6,409 6,110 Corporate and Services 2,857 2,376 8,784 6,016 Subtotal 10,249 8,374 30,705 25,233 Intersegment Borrowings (2,142 ) (1,606 ) (6,523 ) (4,535 ) Total Interest Charges $ 8,107 $ 6,768 $ 24,182 $ 20,698 Three Months Ended Nine Months Ended 2015 2014 2015 2014 Income Taxes: Gas Utility Operations $ (2,871 ) $ 534 26,593 25,440 Energy Group: Wholesale Energy Operations (4,615 ) (3,896 ) 2,238 (7,077 ) Retail Gas and Other Operations (2,038 ) (121 ) (370 ) 895 Retail Electric Operations 422 152 419 (213 ) Subtotal Energy Group (6,231 ) (3,865 ) 2,287 (6,395 ) Energy Services: On-Site Energy Production (2,015 ) (5,092 ) (26,923 ) (25,521 ) Appliance Service Operations 94 39 191 227 Subtotal Energy Services (1,921 ) (5,053 ) (26,732 ) (25,294 ) Corporate and Services 55 59 218 283 Total Income Taxes $ (10,968 ) $ (8,325 ) $ 2,366 $ (5,966 ) Property Additions: Gas Utility Operations $ 55,335 $ 56,414 $ 160,836 $ 148,012 Energy Group: Wholesale Energy Operations 4 — 383 10 Retail Gas and Other Operations 642 563 1,763 960 Subtotal Energy Group 646 563 2,146 970 Energy Services: On-Site Energy Production 36,805 22,194 67,226 47,769 Appliance Service Operations 51 8 379 14 Subtotal Energy Services 36,856 22,202 67,605 47,783 Corporate and Services 193 1,144 1,794 2,725 Total Property Additions $ 93,030 $ 80,323 $ 232,381 $ 199,490 September 30, 2015 December 31, 2014 Identifiable Assets: Gas Utility Operations $ 2,288,303 $ 2,185,672 Energy Group: Wholesale Energy Operations 240,476 366,119 Retail Gas and Other Operations 37,658 53,073 Retail Electric Operations 46,148 23,682 Subtotal Energy Group 324,282 442,874 Energy Services: On-Site Energy Production 711,194 675,937 Appliance Service Operations 4,080 3,105 Subtotal Energy Services 715,274 679,042 Discontinued Operations 1,582 1,758 Corporate and Services 590,392 527,691 Intersegment Assets (520,325 ) (487,612 ) Total Identifiable Assets $ 3,399,508 $ 3,349,425 |