Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2016 | May. 02, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NEW JERSEY RESOURCES CORP | |
Entity Central Index Key | 356,309 | |
Current Fiscal Year End Date | --09-30 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 86,052,309 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |||
OPERATING REVENUES | ||||||
Utility | $ 242,536 | $ 374,703 | $ 394,142 | $ 583,430 | ||
Nonutility | 331,657 | 638,387 | 624,309 | 1,253,784 | ||
Total operating revenues | 574,193 | 1,013,090 | 1,018,451 | 1,837,214 | ||
OPERATING EXPENSES | ||||||
Gas Purchases - Utility | 82,374 | 129,281 | 129,039 | 213,544 | ||
Gas Purchases - Nonutility | 287,883 | 662,573 | 541,971 | 1,135,544 | ||
Gas Purchases - Related parties | 2,077 | 3,124 | 4,151 | 6,388 | ||
Operation and maintenance | 53,125 | 52,778 | 99,358 | 97,537 | ||
Regulatory rider expenses | 21,215 | 42,692 | 30,843 | 64,155 | ||
Depreciation and amortization | 17,744 | 15,204 | 34,226 | 29,590 | ||
Energy and other taxes | 15,842 | 24,632 | 25,479 | 38,953 | ||
Total operating expenses | 480,260 | 930,284 | 865,067 | 1,585,711 | ||
OPERATING INCOME | 93,933 | 82,806 | 153,384 | 251,503 | ||
Other income, net | 2,202 | 1,137 | 4,126 | 1,027 | ||
Interest expense, net of capitalized interest | 7,369 | 6,483 | 14,146 | 13,678 | ||
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES | 88,766 | 77,460 | 143,364 | 238,852 | ||
Income tax provision | 17,840 | 20,144 | 26,197 | 61,011 | ||
Equity in earnings of affiliates | 2,402 | 3,587 | 4,808 | 6,382 | ||
NET INCOME | $ 73,328 | $ 60,903 | $ 121,975 | $ 184,223 | ||
EARNINGS PER COMMON SHARE | ||||||
Basic (usd per share) | $ 0.85 | $ 0.71 | $ 1.42 | $ 2.17 | ||
Diluted (usd per share) | 0.84 | 0.71 | 1.41 | [1] | 2.14 | [1] |
DIVIDENDS DECLARED PER COMMON SHARE (usd per share) | $ 0.24 | $ 0.23 | $ 0.48 | $ 0.45 | ||
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||
Basic (in shares) | 85,834 | 85,328 | 85,754 | 84,940 | ||
Diluted (in shares) | 86,858 | 86,370 | 86,778 | 85,982 | ||
[1] | There were no anti-dilutive shares excluded from the calculation of diluted earnings per share for the three and six months ended March 31, 2016 and 2015. |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 73,328 | $ 60,903 | $ 121,975 | $ 184,223 |
Other comprehensive income, net of tax | ||||
Unrealized gain (loss) on available for sale securities, net of tax of $(3,154), $380, $(5,768) and $(75), respectively | 4,500 | (550) | 8,201 | 109 |
Net unrealized gain on derivatives, net of tax of $(21), $(68), $(2) and $(50) respectively | 38 | 118 | 5 | 87 |
Adjustment to postemployment benefit obligation, net of tax of $(175), $(168), $(349), and $(337) respectively | 257 | 239 | 513 | 486 |
Other comprehensive income (loss) | 4,795 | (193) | 8,719 | 682 |
Comprehensive income | $ 78,123 | $ 60,710 | $ 130,694 | $ 184,905 |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax on unrealized gain on available for sale securities | $ (3,154) | $ 380 | $ (5,768) | $ (75) |
Tax on net unrealized loss on derivatives | (21) | (68) | (2) | (50) |
Tax on adjustment for postemployment benefit obligation | $ (175) | $ (168) | $ (349) | $ (337) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 121,975 | $ 184,223 |
Adjustments to reconcile net income to cash flows from operating activities | ||
Unrealized loss (gain) on derivative instruments | 2,035 | (20,198) |
Depreciation and amortization | 34,226 | 29,590 |
Allowance for equity used during construction | (2,357) | (2,014) |
Allowance for bad debt expense | 873 | 1,696 |
Deferred income taxes | 17,980 | 31,576 |
Manufactured gas plant remediation costs | (2,656) | (2,089) |
Equity in earnings of equity investees, net of distributions received | 2,261 | 4,089 |
Cost of removal - asset retirement obligations | (66) | (403) |
Contributions to postemployment benefit plans | (32,167) | (2,434) |
Changes in: | ||
Components of working capital | (13,788) | 42,506 |
Other noncurrent assets | (15,794) | 39,396 |
Other noncurrent liabilities | 2,302 | 20,568 |
Cash flows from operating activities | 114,824 | 326,506 |
CASH FLOWS (USED IN) INVESTING ACTIVITIES | ||
Utility plant expenditures | (76,326) | (58,657) |
Solar and wind equipment expenditures | (70,882) | (88,370) |
Real estate properties and other expenditures | (1,069) | (61) |
Cost of removal expenditures | (20,080) | (11,334) |
Investments in equity investees | (5,948) | (1,264) |
Distribution from equity investees in excess of equity in earnings | 1,131 | 957 |
Withdrawal from (payment to) restricted cash construction fund | 1,007 | (1,484) |
Proceeds from sale of property | 748 | 0 |
Cash flows (used in) investing activities | (171,419) | (160,213) |
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES | ||
Proceeds from issuance of common stock | 8,220 | 28,310 |
Tax benefit from stock options exercised | 0 | 839 |
Proceeds from sale-leaseback transaction | 7,107 | 7,216 |
Proceeds from long-term debt | 0 | 100,000 |
Payments of long-term debt | (5,807) | (4,510) |
Purchases of treasury stock | (1,008) | (3,945) |
Payments of common stock dividends | (41,115) | (38,010) |
Net proceeds from (payments of) short-term debt | 86,150 | (155,000) |
Cash flows from (used in) financing activities | 53,547 | (65,100) |
Change in cash and cash equivalents | (3,048) | 101,193 |
Cash and cash equivalents at beginning of period | 4,928 | 2,151 |
Cash and cash equivalents at end of period | 1,880 | 103,344 |
CHANGES IN COMPONENTS OF WORKING CAPITAL | ||
Receivables | (16,750) | (178,647) |
Inventories | 43,479 | 205,992 |
Recovery of gas costs | (20,396) | 15,734 |
Gas purchases payable | (31,324) | 24,827 |
Gas purchases payable - related parties | (409) | 155 |
Prepaid and accrued taxes | 43,154 | 39,169 |
Accounts payable and other | (25,026) | (35,456) |
Restricted broker margin accounts | (12,478) | (16,707) |
Customers' credit balances and deposits | 226 | (5,821) |
Other current assets | 5,736 | (6,740) |
Components of working capital | (13,788) | 42,506 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION | ||
Cash paid for Interest (net of amounts capitalized) | 15,647 | 12,946 |
Cash paid for Income taxes | 688 | 14,719 |
Accrued capital expenditures | $ 21,663 | $ 26,781 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
PROPERTY, PLANT AND EQUIPMENT | ||
Utility plant, at cost | $ 1,982,080 | $ 1,908,024 |
Construction work in progress | 150,437 | 155,553 |
Solar and wind equipment, real estate properties and other, at cost | 574,655 | 481,003 |
Construction work in progress | 57,764 | 77,705 |
Total property, plant and equipment | 2,764,936 | 2,622,285 |
Accumulated depreciation and amortization, utility plant | (453,924) | (437,097) |
Accumulated depreciation and amortization, solar and wind equipment, real estate properties and other | (68,354) | (56,927) |
Property, plant and equipment, net | 2,242,658 | 2,128,261 |
CURRENT ASSETS | ||
Cash and cash equivalents | 1,880 | 4,928 |
Customer accounts receivable | ||
Billed | 148,822 | 155,273 |
Unbilled revenues | 27,144 | 6,372 |
Allowance for doubtful accounts | (4,923) | (5,189) |
Regulatory assets | 32,638 | 24,258 |
Gas in storage, at average cost | 117,490 | 163,905 |
Materials and supplies, at average cost | 10,074 | 7,138 |
Prepaid and accrued taxes | 3,354 | 36,810 |
Derivatives, at fair value | 54,803 | 40,743 |
Restricted broker margin accounts | 34,156 | 12,990 |
Other | 34,423 | 40,987 |
Total current assets | 459,861 | 488,215 |
NONCURRENT ASSETS | ||
Investments in equity investees | 136,974 | 132,002 |
Regulatory assets | 436,178 | 410,155 |
Derivatives, at fair value | 1,174 | 4,334 |
Available for sale securities | 73,444 | 59,475 |
Other | 69,305 | 61,915 |
Total noncurrent assets | 717,075 | 667,881 |
Total assets | 3,419,594 | 3,284,357 |
CAPITALIZATION | ||
Common stock, $2.50 par value; authorized 150,000,000 shares; outstanding March 31, 2016 — 85,968,887; September 30, 2015 — 85,531,423 | 221,633 | 220,838 |
Premium on common stock | 215,961 | 209,931 |
Accumulated other comprehensive (loss), net of tax | (675) | (9,394) |
Treasury stock at cost and other; shares March 31, 2016 — 2,684,265; September 30, 2015 — 2,804,847 | (87,930) | (92,164) |
Retained earnings | 858,493 | 777,745 |
Common stock equity | 1,207,482 | 1,106,956 |
Long-term debt | 844,391 | 843,595 |
Total capitalization | 2,051,873 | 1,950,551 |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 11,683 | 11,138 |
Short-term debt | 152,500 | 66,350 |
Gas purchases payable | 120,091 | 151,375 |
Gas purchases payable to related parties | 1,152 | 1,601 |
Accounts payable and other | 67,649 | 99,651 |
Dividends payable | 20,633 | 20,528 |
Accrued taxes | 11,024 | 1,326 |
Regulatory liabilities | 0 | 12,154 |
New Jersey clean energy program | 5,586 | 14,293 |
Derivatives, at fair value | 53,735 | 32,791 |
Broker margin accounts | 12,798 | 4,103 |
Customers' credit balances and deposits | 21,016 | 20,790 |
Total current liabilities | 477,867 | 436,100 |
NONCURRENT LIABILITIES | ||
Deferred income taxes | 464,343 | 444,935 |
Deferred investment tax credits | 4,779 | 4,940 |
Deferred gain | 28,926 | 29,334 |
Derivatives, at fair value | 13,913 | 5,529 |
Manufactured gas plant remediation | 178,512 | 180,400 |
Postemployment employee benefit liability | 107,590 | 137,414 |
Regulatory liabilities | 61,333 | 67,533 |
Asset retirement obligation | 21,230 | 19,145 |
Other | 9,228 | 8,476 |
Total noncurrent liabilities | $ 889,854 | $ 897,706 |
Commitments and contingent liabilities (Note 12) | ||
Total capitalization and liabilities | $ 3,419,594 | $ 3,284,357 |
CONDENSED CONSOLIDATED BALANCE7
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - $ / shares | Mar. 31, 2016 | Sep. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 2.50 | $ 2.50 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares outstanding | 85,968,887 | 85,531,423 |
Treasury stock at cost and other, shares | 2,684,265 | 2,804,847 |
NATURE OF THE BUSINESS
NATURE OF THE BUSINESS | 6 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF THE BUSINESS | NATURE OF THE BUSINESS New Jersey Resources Corporation provides regulated gas distribution services and operates certain unregulated businesses primarily through the following subsidiaries: New Jersey Natural Gas Company provides natural gas utility service to approximately 519,100 retail customers in central and northern New Jersey and is subject to rate regulation by the BPU. NJNG comprises the Natural Gas Distribution segment; NJR Energy Services Company comprises the Energy Services segment that maintains and transacts around a portfolio of natural gas storage and transportation capacity contracts and provides physical wholesale energy and energy management services; NJR Clean Energy Ventures Corporation, the Company's distributed power subsidiary, comprises the Clean Energy Ventures segment and consists of the Company's capital investments in distributed power projects, including commercial and residential solar projects and onshore wind investments; NJR Midstream Holdings Corporation invests in energy-related ventures through its subsidiaries, NJR Steckman Ridge Storage Company, which holds the Company's 50 percent combined interest in Steckman Ridge, and NJR Pipeline Company, which holds the Company's 20 percent ownership interest in PennEast and 1.84 million Common Units of Dominion Midstream Partners, L.P. The investments in Steckman Ridge, PennEast and DM comprise the Midstream segment; and NJR Retail Holdings Corporation has two principal subsidiaries, NJR Home Services Company, which provides heating, central air conditioning, standby generators, solar and other indoor and outdoor comfort products to residential homes and businesses throughout New Jersey, and Commercial Realty & Resources Corporation, which owns commercial real estate. NJR Retail Holdings Corporation and NJR Energy Corporation are included in Home Services and Other operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared by NJR in accordance with the rules and regulations of the U.S. Securities and Exchange Commission and Accounting Standards Generally Accepted in the United States of America. The September 30, 2015 , Balance Sheet data is derived from the audited financial statements of the Company. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and the notes thereto included in NJR's 2015 Annual Report on Form 10-K. The Unaudited Condensed Consolidated Financial Statements include the accounts of NJR and its subsidiaries. In the opinion of management, the accompanying Unaudited Condensed Consolidated Financial Statements reflect all adjustments necessary, for a fair presentation of the results of the interim periods presented. These adjustments are of a normal and recurring nature. Because of the seasonal nature of NJR's utility and wholesale energy services operations, in addition to other factors, the financial results for the interim periods presented are not indicative of the results that are to be expected for the fiscal year ending September 30, 2016 . Intercompany transactions and accounts have been eliminated. Gas in Storage The following table summarizes gas in storage, at average cost by company as of: March 31, September 30, ($ in thousands) Gas in Storage Bcf Gas in Storage Bcf NJRES $ 89,514 52.3 $ 93,696 44.6 NJNG 27,976 9.3 70,209 21.4 Total $ 117,490 61.6 $ 163,905 66.0 Sales Tax Accounting Sales tax, that is collected from customers and presented in both operating revenues and operating expenses on the Unaudited Condensed Consolidated Statements of Operations, was $20.7 million and $34 million during the six months ended March 31, 2016 and 2015 , respectively. Available for Sale Securities Included in available for sale securities on the Unaudited Condensed Consolidated Balance Sheets are investments in two publicly traded energy companies. Total unrealized gains associated with these investments are included as a part of accumulated other comprehensive income, a component of common stock equity. Reclassifications of realized gains out of other comprehensive income into income are determined based on average cost. The Company's available for sale securities had a fair value of $73.4 million and $59.5 million as of March 31, 2016 and September 30, 2015 , respectively. Total unrealized gains associated with these equity securities were $24.8 million , $14.6 million after tax, and $10.8 million , $6.4 million after tax, as of March 31, 2016 and September 30, 2015 , respectively. Customer Accounts Receivable Customer accounts receivable include outstanding billings from the following subsidiaries as of: (Thousands) March 31, September 30, NJRES $ 75,691 51 % $ 107,461 69 % NJNG (1) 67,080 45 41,130 26 NJRCEV 1,975 1 1,084 1 NJRHS and other 4,076 3 5,598 4 Total $ 148,822 100 % $ 155,273 100 % (1) Does not include unbilled revenues of $27.1 million and $6.4 million as of March 31, 2016 and September 30, 2015 , respectively. Loan Receivable NJNG provides loans, with terms ranging from two to 10 years, to customers that elect to purchase and install certain energy efficient equipment in accordance with its BPU-approved SAVEGREEN program. The loans are recognized at net present value on the Unaudited Condensed Consolidated Balance Sheets. The Company has recorded $7.5 million and $6.2 million in other current assets and $40.2 million and $36.2 million in other noncurrent assets as of March 31, 2016 and September 30, 2015 , respectively, on the Unaudited Condensed Consolidated Balance Sheets, related to the loans. NJR's policy is to establish an allowance for doubtful accounts when loan balances are in arrears for more than 60 days . As of March 31, 2016 and September 30, 2015 , there was no allowance for doubtful accounts established for the SAVEGREEN loans. Recent Updates to the Accounting Standards Codification Revenue In May 2014, the FASB issued ASU No. 2014-09, and added Topic 606, Revenue from Contracts with Customers , to the ASC. ASC 606 supersedes ASC 605, Revenue Recognition , as well as most industry-specific guidance, and prescribes a single, comprehensive revenue recognition model designed to improve financial reporting comparability across entities, industries, jurisdictions and capital markets. In August 2015, the FASB issued ASU No. 2015-14, which defers the implementation of the new guidance for one year. The new guidance will become effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Upon adoption, the guidance will be applied on a full or modified retrospective basis. The Company is currently evaluating the provisions of ASC 606 to understand the impact, if any, to its financial position, results of operations and cash flows upon adoption. Stock Compensation In June 2014, the FASB issued ASU No. 2014-12, an amendment to ASC 718, Compensation - Stock Compensation , which clarifies the accounting for performance awards when the terms of the award provide that a performance target could be achieved after the requisite service period. The new guidance will become effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption, the amendment will be applied on a prospective or retrospective basis. The Company does not expect this standard to have any impact to its financial position, results of operations and cash flows upon adoption. In March 2016, the FASB issued ASU 2016-9, an amendment to ASC 718, Compensation - Stock Compensation , which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures and statutory tax withholding requirements. The update also addresses the related classification of transactions within the statement of cash flows. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 with early adoption permitted. Upon adoption, the amendments will be applied on a prospective or retrospective basis. The Company is currently evaluating the amendment to understand the impact on its financial position, results of operations and cash flows upon adoption. Consolidation In February 2015, the FASB issued ASU No. 2015-02, an amendment to ASC 810, Consolidation , which changes the consolidation analysis required under GAAP and reevaluates whether limited partnerships and similar entities must be consolidated. The new guidance will become effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption, the amendment will be applied on a full or modified retrospective basis. The Company is currently evaluating the provisions of ASU No. 2015-02 to understand the impact, if any, on its financial position, results of operations and cash flows upon adoption. Interest In April 2015, the FASB issued ASU No. 2015-03, an amendment to ASC 835, Interest - Imputation of Interest, which simplifies the presentation of debt issuance costs by requiring them to be presented in the balance sheet as a deduction from the carrying amount of the liability. The amendments do not affect the recognition and measurement guidance for debt issuance costs. In August 2015, the FASB issued ASU No. 2015-15, which clarified that the amendments contained within ASU No. 2015-03 do not require companies to modify their accounting for costs incurred in obtaining revolving credit facilities. The amended guidance becomes effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption, the amendment will be applied on a retrospective basis. The Company does not expect this standard to have a material impact to its financial position, results of operations or cash flows upon adoption. Intangibles In April 2015, the FASB issued ASU No. 2015-05, an amendment to ASC 350, Intangibles - Goodwill and Other - Internal-Use Software, which clarifies the accounting for fees in a cloud computing arrangement. The amendments provide guidance on how an entity should evaluate the accounting for fees paid in a cloud computing arrangement to determine whether an arrangement includes the sale or license of software. The amended guidance becomes effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption, the amendment can be applied on a prospective or retrospective basis. The Company plans to adopt the guidance on a prospective basis and does not expect this standard to have a material impact to its financial position, results of operations or cash flows upon adoption. Inventory In July 2015, the FASB issued ASU No. 2015-11, an amendment to ASC 330, Inventory , which requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Upon adoption, the amendments will be applied on a prospective basis. The Company is currently evaluating the amendment to understand the impact on its financial position, results of operations and cash flows upon adoption. Income Taxes In November 2015, the FASB issued ASU 2015-17, an amendment to ASC 740, Income Taxes , to simplify the balance sheet presentation of deferred income taxes. The update requires entities to present all deferred tax assets and liabilities as noncurrent. The Company elected to early adopt the amended guidance effective October 1, 2015, and applied the new provisions retrospectively. Accordingly, the following amounts on the Unaudited Condensed Consolidated Balance Sheets, as of September 30, 2015, have been adjusted: (Thousands) As Previously Reported Effect of Change As Adjusted Assets Deferred taxes (current) $ 56,296 $ (56,296 ) $ — Total current assets $ 544,511 $ (56,296 ) $ 488,215 Other noncurrent assets $ 60,300 $ 1,615 $ 61,915 Total noncurrent assets $ 666,266 $ 1,615 $ 667,881 Total assets $ 3,339,038 $ (54,681 ) $ 3,284,357 Capitalization and Liabilities Deferred income taxes $ 499,616 $ (54,681 ) $ 444,935 Total noncurrent liabilities $ 952,387 $ (54,681 ) $ 897,706 Total capitalization and liabilities $ 3,339,038 $ (54,681 ) $ 3,284,357 There was no additional impact to the Unaudited Condensed Consolidated Statements of Operations or the Unaudited Condensed Consolidated Statements of Cash Flows. Financial Instruments In January 2016, the FASB issued ASU 2016-1, an amendment to ASC 825, Financial Instruments , to address certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The standard affects investments in equity securities that do not result in consolidation and are not accounted for under the equity method and the presentation of certain fair value changes for financial liabilities measured at fair value. It also simplifies the impairment assessment of equity investments without a readily determinable fair value by requiring a qualitative assessment. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Upon adoption, the amendments will be applied on a modified-retrospective basis. The Company has evaluated the amendments and noted that, upon adoption, subsequent changes to the fair value of the Company’s available for sale securities will be recorded in the statement of operations as opposed to other comprehensive income. The Company does not expect any other material impacts to its financial position, results of operations or cash flows upon adoption. Leases In February 2016, the FASB issued ASU 2016-2, an amendment to ASC 842, Leases , which provides for a comprehensive overhaul of the lease accounting model and changes the definition of a lease within the accounting literature. Under the new standard, all leases with a term greater than one year will be recorded on the balance sheet. Amortization of the related asset will be accounted for using one of two approaches prescribed by the guidance. Additional disclosures will be required to allow the user to assess the amount, timing and uncertainty of cash flows arising from leasing activities. A modified retrospective transition approach is required for leases existing at the time of adoption. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the amendments to understand the impact on its financial position, results of operations and cash flows upon adoption. |
REGULATION
REGULATION | 6 Months Ended |
Mar. 31, 2016 | |
Regulated Operations [Abstract] | |
REGULATION | REGULATION NJNG is subject to cost-based regulation, therefore, it is permitted to recover authorized operating expenses and earn a reasonable return on its utility investment based on the BPU's approval. The impact of the ratemaking process and decisions authorized by the BPU allows NJNG to capitalize or defer certain costs that are expected to be recovered from its customers as regulatory assets and to recognize certain obligations representing amounts that are probable future expenditures as regulatory liabilities in accordance with accounting guidance applicable to regulated operations. NJNG's recovery of costs is facilitated through its base tariff rates, BGSS and other regulatory tariff riders. As recovery of regulatory assets is subject to BPU approval, if there are any changes in regulatory positions that indicate recovery is not probable, the related cost would be charged to income in the period of such determination. Regulatory assets and liabilities included on the Unaudited Condensed Consolidated Balance Sheets are comprised of the following: (Thousands) March 31, September 30, Regulatory assets-current Conservation Incentive Program $ 3,190 $ — New Jersey Clean Energy Program 5,586 14,293 Underrecovered gas costs 5,052 — Derivatives at fair value, net 18,810 9,965 Total current regulatory assets $ 32,638 $ 24,258 Regulatory assets-noncurrent Environmental remediation costs Expended, net of recoveries $ 16,122 $ 18,886 Liability for future expenditures 178,512 180,400 Deferred income taxes 18,956 17,460 Derivatives at fair value, net 12,932 5,153 SAVEGREEN 23,009 26,882 Postemployment and other benefit costs 136,346 140,636 Deferred Superstorm Sandy costs 15,201 15,201 Conservation Incentive Program 28,686 — Other noncurrent regulatory assets 6,414 5,537 Total noncurrent regulatory assets $ 436,178 $ 410,155 Regulatory liability-current Conservation Incentive Program $ — $ 5,167 Overrecovered gas costs — 6,987 Total current regulatory liabilities $ — $ 12,154 Regulatory liabilities-noncurrent Cost of removal obligation $ 46,348 $ 54,880 New Jersey Clean Energy Program 14,087 11,956 Other noncurrent regulatory liabilities 898 697 Total noncurrent regulatory liabilities $ 61,333 $ 67,533 Regulatory filings and/or actions that occurred during the current fiscal year include the following: • On October 15, 2015 , the BPU approved a base rate increase related to NJ RISE allowing NJNG to recover costs through July 31, 2015 , resulting in a .07 percent increase to the average residential heat customer's bill, effective November 1, 2015 . • On October 15, 2015 , the BPU issued an order approving the continuation of the BGSS Incentive Programs with modification to the storage incentive program, beginning with the 2015 storage injection period, and termination of the FRM Program, effective November 1, 2015 . • On October 27, 2015 , NJNG notified the BPU that bill credits to residential and small commercial customers would be issued from November 2015 through February 2016. A total of $61.6 million in bill credits were issued during that period. • On November 13, 2015 , NJNG filed a base rate petition with the BPU to increase its base tariff rates in the amount of $147.6 million . On May 4, 2016 , NJNG supplemented its base rate case testimony supporting its November 2015 petition, which amended the accounting treatment and noted that the SRL project would not be completed by December 31, 2016. In addition, the Company seeks to modify the rate treatment to include the September 30, 2016 balance of project spending and rate adjustments on a quarterly basis until the project is complete. • On December 24, 2015 , NJNG filed an SBC petition with the BPU to increase the RA factor, to decrease the NJCEP factor and to request approval of its remediation expenses incurred through June 30, 2015 , resulting in an overall decrease of .8 percent to the average residential heat customer's bill. • On January 27, 2016 , the BPU approved NJNG’s July 2015 petition to maintain its existing SAVEGREEN recovery rate. On April 15, 2016 , NJNG filed a petition with the BPU to extend its current program, which was set to expire on July 31, 2017 , to December 31, 2018 . • On January 27, 2016 , the BPU approved NJNG's proposed SRL pipeline installation, operation and route selection, as modified by NJNG, including specific requirements regarding permitting, safety and integrity assessment. On March 18, 2016 , the BPU approved the application for the SRL to be exempt from municipal land use ordinances. • On February 24, 2016 , the BPU approved on a final basis NJNG's June 2015 BGSS/CIP filing which continues its existing BGSS rate and adjusted its CIP rates resulting in a .08 percent increase to the average residential heat customer's bill effective October 1, 2015 . |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company is subject to commodity price risk due to fluctuations in the market price of natural gas, SRECs, and electricity. To manage this risk, the Company enters into a variety of derivative instruments including, but not limited to, futures contracts, physical forward contracts, financial options and swaps to economically hedge the commodity price risk associated with its existing and anticipated commitments to purchase and sell natural gas, SRECs, and electricity. In addition, the Company may utilize foreign currency derivatives to hedge Canadian dollar denominated gas purchases and/or sales. Therefore, the Company's primary underlying risks include commodity prices, interest rates and foreign currency. These contracts, with a few exceptions as described below, are accounted for as derivatives. Accordingly, all of the financial and certain of the Company's physical derivative instruments are recorded at fair value on the Unaudited Condensed Consolidated Balance Sheets. For a more detailed discussion of the Company's fair value measurement policies and level disclosures associated with NJR's derivative instruments, see Note 5. Fair Value . NJRES Since NJRES chooses not to designate its financial commodity and physical forward commodity derivatives as accounting hedges or to elect NPNS, changes in the fair value of these derivatives are recorded as a component of gas purchases or operating revenues, as appropriate for NJRES, on the Unaudited Condensed Consolidated Statements of Operations as unrealized gains or (losses). For NJRES at settlement, realized gains and (losses) on all financial derivative instruments are recognized as a component of gas purchases and realized gains and (losses) on all physical derivatives follow the presentation of the related unrealized gains and (losses) as a component of either gas purchases or operating revenues. NJRES also enters into natural gas transactions in Canada and, consequently, is exposed to fluctuations in the value of Canadian currency relative to the U.S. dollar. NJRES may utilize foreign currency derivatives to lock in the currency translation rate associated with natural gas transactions denominated in Canadian currency. The derivatives may include currency forwards, futures, or swaps and are accounted for as derivatives. These derivatives may be used to hedge future forecasted cash payments associated with transportation and storage contracts along with purchases of natural gas. For transactions occurring on or before December 31, 2015, NJRES designates its foreign exchange contracts as cash flow hedges, and the effective portion of the hedges are recorded in OCI. Effective January 1, 2016, on a prospective basis, the Company has elected not to designate its foreign currency derivatives as accounting hedges. Accordingly, changes in the fair value of foreign exchange contracts entered into from January 1, 2016 on, are recognized in gas purchases on the Unaudited Condensed Consolidated Statements of Operations. As a result of NJRES entering into transactions to borrow gas, commonly referred to as “park and loans,” an embedded derivative is created relating to differences between the fair value of the amount borrowed and the fair value of the amount that will ultimately be repaid, based on changes in the forward price for natural gas prices at the borrowed location over the contract term. This embedded derivative is accounted for as a forward sale in the month in which the repayment of the borrowed gas is expected to occur, and is considered a derivative transaction that is recorded at fair value on the Unaudited Condensed Consolidated Balance Sheets, with changes in value recognized in current period earnings. Expected production of SRECs is hedged through forward and futures contracts. The contracts require the Company to physically deliver the SRECs upon settlement. For transactions occurring on or before December 31, 2015, the Company elects NPNS accounting treatment on SREC forward and futures contracts. Effective January 1, 2016, on a prospective basis, NJRES no longer elects NPNS accounting treatment on SREC contracts and recognizes changes in the fair value of these derivatives as a component of operating revenues. Upon settlement of the contract, the related revenue is recognized when the SREC certificate is transferred to the counterparty. NPNS is a contract-by-contract election and, where it makes sense to do so, we can and may elect certain contracts to be normal. NJNG Changes in fair value of NJNG's financial commodity derivatives are recorded as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets. The Company elects NPNS accounting treatment on all physical commodity contracts that NJNG entered into on or before December 31, 2015, and accounts for these contracts on an accrual basis. Accordingly, physical natural gas purchases are recognized in regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets when the contract settles and the natural gas is delivered. The average cost of natural gas is amortized in current period earnings based on the current BPU BGSS factor and therm sales. Effective January 1, 2016, on a prospective basis, NJNG no longer elects NPNS accounting treatment on all of its physical commodity contracts. However, since NPNS is a contract-by-contract election, where it makes sense to do so, we can and may elect certain contracts to be normal. Because NJNG recovers these amounts through future BGSS rates as increases or decreases to the cost of natural gas in NJNG’s tariff for gas service, the changes in fair value of these contracts are deferred as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets. In an April 2014 BPU Order, NJNG received regulatory approval to enter into interest rate risk management transactions related to long-term debt securities. On June 1, 2015, NJNG entered into a treasury lock transaction to fix a benchmark treasury rate of 3.26 percent associated with a forecasted $125 million debt issuance expected in May 2018. This forecasted debt issuance coincides with the maturity of NJNG's existing $125 million , 5.6 percent notes due May 15, 2018 . The change in fair value of NJNG's treasury lock agreement is recorded as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets since NJNG believes that the market value upon settlement will be reflected in future rates. Upon settlement, any gain or loss will be amortized in earnings over the life of the future debt issuance. Fair Value of Derivatives The following table reflects the fair value of NJR's derivative assets and liabilities recognized on the Unaudited Condensed Consolidated Balance Sheets as of: Fair Value March 31, 2016 September 30, 2015 (Thousands) Balance Sheet Location Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Derivatives designated as hedging instruments: NJRES: Foreign currency contracts Derivatives - current $ 7 $ — $ — $ — Fair value of derivatives designated as hedging instruments $ 7 $ — $ — $ — Derivatives not designated as hedging instruments: NJNG: Physical commodity contracts Derivatives - current $ 58 $ 90 $ — $ — Financial commodity contracts Derivatives - current 2,252 21,014 207 10,163 Derivatives - noncurrent — — — 925 Interest rate contracts Derivatives - noncurrent — 12,932 — 4,228 NJRES: Physical commodity contracts Derivatives - current 5,245 8,892 4,854 9,281 Derivatives - noncurrent 914 158 1,718 — Financial commodity contracts Derivatives - current 47,241 23,739 35,682 13,347 Derivatives - noncurrent 260 823 2,626 386 Fair value of derivatives not designated as hedging instruments $ 55,970 $ 67,648 $ 45,087 $ 38,330 Total fair value of derivatives $ 55,977 $ 67,648 $ 45,087 $ 38,330 Offsetting of Derivatives NJR transacts under master netting arrangements or equivalent agreements that allow it to offset derivative assets and liabilities with the same counterparty. However, NJR's policy is to present its derivative assets and liabilities on a gross basis on the Unaudited Condensed Consolidated Balance Sheets. The following table summarizes the reported gross amounts, the amounts that NJR has the right to offset but elects not to, financial collateral, as well as the net amounts NJR could present on the Unaudited Condensed Consolidated Balance Sheets but elects not to. (Thousands) Amounts Presented in Balance Sheets (1) Offsetting Derivative Instruments (2) Financial Collateral Received/Pledged (3) Net Amounts (4) As of March 31, 2016: Derivative assets: NJRES Physical commodity contracts $ 6,159 $ (1,344 ) $ (1,000 ) $ 3,815 Financial commodity contracts 47,501 (19,324 ) (12,846 ) 15,331 Foreign currency contracts 7 — — 7 Total NJRES $ 53,667 $ (20,668 ) $ (13,846 ) $ 19,153 NJNG Physical commodity contracts $ 58 $ (1 ) $ — $ 57 Financial commodity contracts 2,252 (2,252 ) — — Total NJNG $ 2,310 $ (2,253 ) $ — $ 57 Derivative liabilities: NJRES Physical commodity contracts $ 9,050 $ (1,345 ) $ (1,200 ) $ 6,505 Financial commodity contracts 24,562 (19,324 ) (5,238 ) — Total NJRES $ 33,612 $ (20,669 ) $ (6,438 ) $ 6,505 NJNG Physical commodity contracts $ 90 $ (1 ) $ — $ 89 Financial commodity contracts 21,014 (2,252 ) (18,762 ) — Interest rate contracts 12,932 — — 12,932 Total NJNG $ 34,036 $ (2,253 ) $ (18,762 ) $ 13,021 As of September 30, 2015: Derivative assets: NJRES Physical commodity contracts $ 6,562 $ (1,326 ) $ — $ 5,236 Financial commodity contracts 38,308 (13,734 ) 3,841 28,415 Total NJRES $ 44,870 $ (15,060 ) $ 3,841 $ 33,651 NJNG Financial commodity contracts $ 207 $ (207 ) $ — $ — Derivative liabilities: NJRES Physical commodity contracts $ 9,271 $ (1,326 ) $ (1,200 ) $ 6,745 Financial commodity contracts 13,733 (13,733 ) — — Total NJRES $ 23,004 $ (15,059 ) $ (1,200 ) $ 6,745 NJNG Financial commodity contracts $ 11,088 $ (207 ) $ (10,881 ) $ — Interest rate contracts 4,228 — — 4,228 Total NJNG $ 15,316 $ (207 ) $ (10,881 ) $ 4,228 (1) Derivative assets and liabilities are presented on a gross basis in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20. (2) Offsetting derivative instruments include: transactions with NAESB netting election, transactions held by FCM's with net margining and transactions with ISDA netting. (3) Financial collateral includes cash balances at FCMs as well as cash received from or pledged to other counterparties. (4) Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20. NJRES utilizes financial derivatives to economically hedge the gross margin associated with the purchase of physical gas for injection into storage and the subsequent sale of physical gas at a later date. The gains or (losses) on the financial transactions that are economic hedges of the cost of the purchased gas are recognized prior to the gains or (losses) on the physical transaction, which are recognized in earnings when the natural gas is sold. Therefore, mismatches between the timing of the recognition of realized gains or (losses) on the financial derivative instruments and gains or (losses) associated with the actual sale of the natural gas that is being economically hedged along with fair value changes in derivative instruments creates volatility in the results of NJRES, although the Company's intended economic results relating to the entire transaction are unaffected. The following table reflects the effect of derivative instruments on the Unaudited Condensed Consolidated Statements of Operations as of: (Thousands) Location of gain (loss) recognized in income on derivatives Amount of gain (loss) recognized in income on derivatives Three Months Ended Six Months Ended March 31, March 31, Derivatives not designated as hedging instruments: 2016 2015 2016 2015 NJRES: Physical commodity contracts Operating revenues $ 9,128 $ (1,144 ) $ 21,002 $ 14,947 Physical commodity contracts Gas purchases (5,583 ) 10,063 (26,820 ) (9,793 ) Financial commodity contracts Gas purchases 21,820 (27,204 ) 63,096 90,517 Total unrealized and realized gains (losses) $ 25,365 $ (18,285 ) $ 57,278 $ 95,671 The table above does not include (losses) gains associated with NJNG's financial derivatives of $(5.2) million and $(5.5) million for the three months ended March 31, 2016 and 2015 , respectively, and $(10.8) million and $(24.5) million for the six months ended March 31, 2016 and 2015 , respectively, NJNG's physical derivatives of $(14.5) million for both the three and six months ended March 31, 2016 , and the treasury rate lock of $(11.1) million and $(8.7) million for the three and six months ended March 31, 2016 . NJNG’s derivative contracts are part of the Company's risk management activities that relate to its natural gas purchases, BGSS incentive programs and debt financing. These transactions are entered into pursuant to regulatory guidance and, at settlement, the resulting gains and/or losses are payable to and/or recoverable from customers. Any changes in the value of NJNG's financial derivatives are deferred in regulatory assets or liabilities resulting in no impact to earnings. NJRES previously designated its foreign exchange contracts as cash flow hedges, therefore, changes in fair value of the effective portion of the hedges are recorded in OCI and, upon settlement of the contracts, realized gains and (losses) are reclassified from OCI to gas purchases on the Unaudited Condensed Consolidated Statements of Operations. The following table reflects the effect of derivative instruments designated as cash flow hedges on OCI as of March 31 : (Thousands) Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion) Amount of Gain or (Loss) Recognized on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, Derivatives in cash flow hedging relationships: 2016 2015 2016 2015 2016 2015 Foreign currency contracts $ 29 $ (381 ) $ 30 $ 567 $ — $ — (Thousands) Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion) Amount of Gain or (Loss) Recognized on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Six Months Ended Six Months Ended Six Months Ended March 31, March 31, March 31, Derivatives in cash flow hedging relationships: 2016 2015 2016 2015 2016 2015 Foreign currency contracts $ (35 ) $ (405 ) $ 42 $ 542 $ — $ — NJNG and NJRES had the following outstanding long (short) derivatives as of: Volume (Bcf) March 31, September 30, NJNG Futures (1) 15.2 25.8 Physical 5.9 — NJRES Futures (88.6 ) (91.1 ) Options 3.6 1.2 Physical (2) 137.4 48.2 (1) Not included is the notional amount of $125 million related to NJNG’s treasury lock agreement. (2) Not included are 48,000 SRECs that are open as of March 31, 2016 . Broker Margin Generally, exchange-traded futures contracts require posted collateral, referred to as margin, usually in the form of cash. The amount of margin required is comprised of a fixed initial amount based on exchange requirements and a variable amount based on a daily mark-to-market. The Company maintains separate broker margin accounts for NJNG and NJRES. The balances by company, are as follows: (Thousands) Balance Sheet Location March 31, September 30, NJNG Broker margin - Current assets $ 20,235 $ 12,990 NJRES Broker margin - Current assets $ 13,921 $ — Broker margin - Current (liabilities) $ (12,798 ) $ (4,103 ) Wholesale Credit Risk NJNG and NJRES are exposed to credit risk as a result of their wholesale marketing activities. As a result of the inherent volatility in the prices of natural gas commodities, derivatives, SRECs and RECs, the market value of contractual positions with individual counterparties could exceed established credit limits or collateral provided by those counterparties. If a counterparty failed to perform the obligations under its contract (e.g., failed to deliver or pay for natural gas, SRECs and RECs), then the Company could sustain a loss. NJR monitors and manages the credit risk of its wholesale marketing operations through credit policies and procedures that management believes reduce overall credit risk. These policies include a review and evaluation of current and prospective counterparties' financial statements and/or credit ratings, daily monitoring of counterparties' credit limits and exposure, daily communication with traders regarding credit status and the use of credit mitigation measures, such as collateral requirements and netting agreements. Examples of collateral include letters of credit and cash received for either prepayment or margin deposit. Collateral may be requested due to NJR's election not to extend credit or because exposure exceeds defined thresholds. Most of NJR's wholesale marketing contracts contain standard netting provisions. These contracts include those governed by ISDA and the NAESB. The netting provisions refer to payment netting, whereby receivables and payables with the same counterparty are offset and the resulting net amount is paid to the party to which it is due. Internally-rated exposure applies to counterparties that are not rated by S&P or Moody's. In these cases, the Company's or guarantor's financial statements are reviewed, and similar methodologies and ratios used by S&P and/or Moody's are applied to arrive at a substitute rating. Gross credit exposure is defined as the unrealized fair value of physical and financial derivative commodity contracts, plus any outstanding wholesale receivable for the value of natural gas delivered and/or financial derivative commodity contract that has settled for which payment has not yet been received. The following is a summary of gross credit exposures grouped by investment and noninvestment grade counterparties, as of March 31, 2016 . The amounts presented below have not been reduced by any collateral received or netting and exclude accounts receivable for NJNG retail natural gas sales and services and NJRCEV residential solar installations. (Thousands) Gross Credit Exposure Investment grade $ 84,613 Noninvestment grade 8,407 Internally rated investment grade 11,537 Internally rated noninvestment grade 12,974 Total $ 117,531 Conversely, certain of NJNG's and NJRES' derivative instruments are linked to agreements containing provisions that would require cash collateral payments from the Company if certain events occur. These provisions vary based upon the terms in individual counterparty agreements and can result in cash payments if NJNG's credit rating were to fall below its current level. NJNG's credit rating, with respect to S&P, reflects the overall corporate credit profile of NJR. Specifically, most, but not all, of these additional payments will be triggered if NJNG's debt is downgraded by the major credit agencies, regardless of investment grade status. In addition, some of these agreements include threshold amounts that would result in additional collateral payments if the values of derivative liabilities were to exceed the maximum values provided for in relevant counterparty agreements. Other provisions include payment features that are not specifically linked to ratings, but are based on certain financial metrics. Collateral amounts associated with any of these conditions are determined based on a sliding scale and are contingent upon the degree to which the Company's credit rating and/or financial metrics deteriorate, and the extent to which liability amounts exceed applicable threshold limits. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position on March 31, 2016 and September 30, 2015 , was $13 million and $4.2 million , respectively, for which the Company had not posted collateral. If all thresholds related to the credit-risk-related contingent features underlying these agreements had been invoked on March 31, 2016 and September 30, 2015 , the Company would have been required to post an additional $13 million and $4.2 million , respectively, to its counterparties. These amounts differ from the respective net derivative liabilities reflected on the Unaudited Condensed Consolidated Balance Sheets because the agreements also include clauses, commonly known as “Rights of Offset,” that would permit the Company to offset its derivative assets against its derivative liabilities for determining additional collateral to be posted, as previously discussed. |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair Value of Assets and Liabilities The fair value of cash and temporary investments, accounts receivable, current loan receivables, accounts payable, commercial paper and borrowings under revolving credit facilities are estimated to equal their carrying amounts due to the short maturity of those instruments. Non-current loan receivables are recorded based on what the Company expects to receive, which approximates fair value. The Company regularly evaluates the credit quality and collection profile of its customers to approximate fair value. The estimated fair value of long-term debt, including current maturities and excluding capital leases is as follows: (Thousands) March 31, September 30, Carrying value (1) $ 807,845 $ 807,845 Fair market value $ 832,202 $ 817,319 (1) Excludes capital leases of $48.2 million and $46.9 million as of March 31, 2016 and September 30, 2015 , respectively. NJR utilizes a discounted cash flow method to determine the fair value of its debt. Inputs include observable municipal and corporate yields, as appropriate for the maturity of the specific issue and the Company's credit rating. As of March 31, 2016 , NJR discloses its debt within Level 2 of the fair value hierarchy. Fair Value Hierarchy NJR applies fair value measurement guidance to its financial assets and liabilities, as appropriate, which include financial derivatives and physical commodity contracts qualifying as derivatives, available for sale securities and other financial assets and liabilities. In addition, authoritative accounting literature prescribes the use of a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on the source of the data used to develop the price inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to inputs that are based on unobservable market data and include the following: Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets. NJR's Level 1 assets and liabilities include exchange traded natural gas futures and options contracts, listed equities and money market funds. Exchange traded futures and options contracts include all energy contracts traded on the NYMEX/CME and ICE that NJR refers internally to as basis swaps, fixed swaps, futures and financial options that are cleared through a FCM. Level 2 Other significant observable inputs such as interest rates or price data, including both commodity and basis pricing that is observed either directly or indirectly from publications or pricing services. NJR's Level 2 assets and liabilities include over-the-counter physical forward commodity contracts and swap contracts, SREC forward sales or derivatives that are initially valued using observable quotes and are subsequently adjusted to include time value, credit risk or estimated transport pricing components for which no basis price is available. Level 2 financial derivatives consist of transactions with non-FCM counterparties (basis swaps, fixed swaps and/or options). NJNG's treasury lock is also considered Level 2 as valuation is based on quoted market interest and swap rates as inputs to the valuation model. Inputs are verifiable and do not require significant management judgment. For some physical commodity contracts the Company utilizes transportation tariff rates that are publicly available and that it considers to be observable inputs that are equivalent to market data received from an independent source. There are no significant judgments or adjustments applied to the transportation tariff inputs and no market perspective is required. Even if the transportation tariff input were considered to be a “model,” it would still be considered to be a Level 2 input as: 1) The data is widely accepted and public 2) The data is non-proprietary and sourced from an independent third party 3) The data is observable and published These additional adjustments are generally not considered to be significant to the ultimate recognized values. Level 3 Inputs derived from a significant amount of unobservable market data. These include NJR's best estimate of fair value and are derived primarily through the use of internal valuation methodologies. Assets and liabilities measured at fair value on a recurring basis are summarized as follows: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Thousands) (Level 1) (Level 2) (Level 3) Total As of March 31, 2016: Assets: Physical commodity contracts $ — $ 6,217 $ — $ 6,217 Financial commodity contracts 49,753 — — 49,753 Financial commodity contracts - foreign exchange — 7 — 7 Available for sale equity securities - energy industry 73,444 — — 73,444 Other (1) 1,607 — — 1,607 Total assets at fair value $ 124,804 $ 6,224 $ — $ 131,028 Liabilities: Physical commodity contracts $ — $ 9,140 $ — $ 9,140 Financial commodity contracts 45,576 — — 45,576 Interest rate contracts — 12,932 — 12,932 Total liabilities at fair value $ 45,576 $ 22,072 $ — $ 67,648 As of September 30, 2015: Assets: Physical commodity contracts $ — $ 6,572 $ — $ 6,572 Financial commodity contracts 38,515 — — 38,515 Available for sale equity securities - energy industry 59,475 — — 59,475 Other (1) 1,572 — — 1,572 Total assets at fair value $ 99,562 $ 6,572 $ — $ 106,134 Liabilities: Physical commodity contracts $ — $ 9,281 $ — $ 9,281 Financial commodity contracts 24,821 — — 24,821 Interest rate contracts — 4,228 — 4,228 Total liabilities at fair value $ 24,821 $ 13,509 $ — $ 38,330 (1) Includes various money market funds. |
INVESTMENTS IN EQUITY INVESTEES
INVESTMENTS IN EQUITY INVESTEES | 6 Months Ended |
Mar. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
INVESTMENTS IN EQUITY INVESTEES | INVESTMENTS IN EQUITY INVESTEES NJR's investments in equity investees includes the following investments as of: (Thousands) March 31, September 30, Steckman Ridge (1) $ 124,446 $ 125,649 PennEast 12,528 6,353 Total $ 136,974 $ 132,002 (1) Includes loans with a total outstanding principal balance of $70.4 million for both March 31, 2016 and September 30, 2015 . The loans accrue interest at a variable rate that resets quarterly and are due October 1, 2023. NJR, through a subsidiary, NJR Pipeline Company, formed PennEast with five other investors, and plans to construct and operate a 118 -mile pipeline that will extend from northeast Pennsylvania to western New Jersey. NJRES and NJNG have entered into storage and park and loan agreements with Steckman Ridge. In addition, NJNG has entered into a precedent capacity agreement with PennEast, which is estimated to be in service during the last quarter of fiscal 2018 or the first quarter of fiscal 2019 . See Note 14. Related Party Transactions for more information on these intercompany transactions. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table presents the calculation of the Company's basic and diluted earnings per share for: Three Months Ended Six Months Ended March 31, March 31, (Thousands, except per share amounts) 2016 2015 2016 2015 Net income, as reported $ 73,328 $ 60,903 $ 121,975 $ 184,223 Basic earnings per share Weighted average shares of common stock outstanding-basic 85,834 85,328 85,754 84,940 Basic earnings per common share $0.85 $.71 $1.42 $2.17 Diluted earnings per share Weighted average shares of common stock outstanding-basic 85,834 85,328 85,754 84,940 Incremental shares (1) 1,024 1,042 1,024 1,042 Weighted average shares of common stock outstanding-diluted 86,858 86,370 86,778 85,982 Diluted earnings per common share (2) $.84 $.71 $1.41 $2.14 (1) Incremental shares consist primarily of unvested stock awards and performance shares. (2) There were no anti-dilutive shares excluded from the calculation of diluted earnings per share for the three and six months ended March 31, 2016 and 2015 . |
COMMON STOCK EQUITY
COMMON STOCK EQUITY | 6 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
COMMON STOCK EQUITY | COMMON STOCK EQUITY Changes in common stock equity during the six months ended March 31, 2016 , are as follows: (Thousands) Number of Shares Common Stock Premium on Common Stock Accumulated Other Comprehensive (Loss) Income Treasury Stock And Other Retained Earnings Total Balance at September 30, 2015 85,531 $ 220,838 $ 209,931 $ (9,394 ) $ (92,164 ) $ 777,745 $ 1,106,956 Net income 121,975 121,975 Other comprehensive income 8,719 8,719 Common stock issued: Incentive plan 317 795 8,356 9,151 Dividend reinvestment plan 260 (2,271 ) 10,469 8,198 Cash dividend declared ($.48 per share) (41,227 ) (41,227 ) Treasury stock and other (139 ) (55 ) (6,235 ) (6,290 ) Balance at March 31, 2016 85,969 $ 221,633 $ 215,961 $ (675 ) $ (87,930 ) $ 858,493 $ 1,207,482 NJR satisfies its external common equity requirements, if any, through issuances of its common stock, including the proceeds from stock issuances under its DRP. The DRP allows NJR, at its option, to use treasury shares or newly issued shares to raise capital. On December 14, 2015, NJR registered 5 million shares of NJR common stock for issuance under the DRP. NJR raised $8.2 million and $7.7 million of equity through the DRP, by issuing approximately 260,000 and 279,000 shares of treasury stock, during the six months ended March 31, 2016 and 2015 , respectively. NJR also raised approximately $19.8 million of equity by issuing approximately 688,000 new shares through the waiver discount feature of the DRP during the six months ended March 31, 2015 . NJR issued no new shares through the waiver discount feature of the DRP during the six months ended March 31, 2016 . Accumulated Other Comprehensive Income The following table presents the changes in the components of accumulated other comprehensive income, net of related tax effects: (Thousands) Available for Sale Securities Cash Flow Hedges Postemployment Benefit Obligation Total Balance at September 30, 2015 $ 6,385 $ — $ (15,779 ) $ (9,394 ) Other comprehensive income, net of tax Other comprehensive income (loss), before reclassifications, net of tax of $(5,768), $13, $0, $(5,755) 8,201 (22 ) — 8,179 Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(15), $(349), $(364) — 27 (1) 513 (2) 540 Net current-period other comprehensive income, net of tax of ($5,768), $(2), $(349), $(6,119) 8,201 5 513 8,719 Balance at March 31, 2016 $ 14,586 $ 5 $ (15,266 ) $ (675 ) Balance at September 30, 2014 $ 4,782 $ (93 ) $ (10,283 ) $ (5,594 ) Other comprehensive income (loss), net of tax Other comprehensive income (loss), before reclassifications, net of tax of $(75), $149, $0, $74 109 (256 ) — (147 ) Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(199), $(337), $(536) — 343 (1) 486 (2) 829 Net current-period other comprehensive income, net of tax of $(75), $(50), $(337), $(462) 109 87 486 682 Balance as of March 31, 2015 $ 4,891 $ (6 ) $ (9,797 ) $ (4,912 ) (1) Consists of realized losses related to foreign currency derivatives, which are reclassified to gas purchases on the Unaudited Condensed Consolidated Statements of Operations. (2) Included in the computation of net periodic pension cost, a component of operations and maintenance expense on the Unaudited Condensed Consolidated Statements of Operations. |
DEBT
DEBT | 6 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT NJR and NJNG finance working capital requirements and capital expenditures through various short-term debt and long-term financing arrangements, including a commercial paper program, committed unsecured credit facilities and private placement debt shelf facilities. Credit Facilities A summary of NJR's credit facility and NJNG's commercial paper program and credit facility are as follows: (Thousands) March 31, September 30, Expiration Dates NJR Bank revolving credit facilities (1) $ 425,000 $ 425,000 September 2020 Notes outstanding at end of period $ 115,500 $ 39,350 Weighted average interest rate at end of period 1.36 % 1.17 % Amount available at end of period (2) $ 286,441 $ 369,176 Bank revolving credit facilities (3) $ — $ 100,000 October 2015 Amount available at end of period $ — $ 100,000 NJNG Bank revolving credit facilities (1) $ 250,000 $ 250,000 May 2019 Commercial paper outstanding at end of period $ 37,000 $ 27,000 Weighted average interest rate at end of period .46 % .20 % Amount available at end of period (4) $ 212,269 $ 222,269 (1) Committed credit facilities, which require commitment fees on the unused amounts. (2) Letters of credit outstanding total $23.1 million and $16.5 million as of March 31, 2016 and September 30, 2015 , respectively, which reduces amount available by the same amount. (3) Uncommitted credit facilities, which require no commitment fees. (4) Letters of credit outstanding total $731,000 and $731,000 as of March 31, 2016 and September 30, 2015 , respectively, which reduces the amount available by the same amount. On October 24, 2014 , NJR entered into a $100 million uncommitted line of credit agreement, with Santander Bank, N.A., which expired on October 24, 2015 . Amounts available under credit facilities are reduced by bank or commercial paper borrowings, as applicable, and any outstanding letters of credit. Neither NJNG nor the results of its operations are obligated or pledged to support the NJR credit or debt shelf facilities. NJR Long-term Debt On March 22, 2016 , NJR entered into a Note Purchase Agreement, under which the Company has agreed to sell, on August 18, 2016 , $50 million of the Company’s 3.2 percent senior notes due August 18, 2023 , and $100 million of the Company’s 3.54 percent senior notes due August 18, 2026 . The notes will be guaranteed by certain unregulated subsidiaries of the Company. The notes will be unsecured. The proceeds of the notes will be used for general corporate purposes, including working capital and capital expenditures. NJNG Long-term Debt NJNG received $7.1 million and $7.2 million in December 2015 and 2014 , respectively, in connection with the sale-leaseback of its natural gas meters. NJNG records a capital lease obligation that is paid over the term of the lease and has the option to purchase the meters back at fair value upon expiration of the lease. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Pension and Other Postemployment Benefit Plans The components of the net periodic cost for pension benefits, including the Company's Pension Equalization Plan, and OPEB costs (principally health care and life insurance) for employees and covered dependents were as follows: Pension OPEB Three Months Ended Six Months Ended Three Months Ended Six Months Ended March 31, March 31, March 31, March 31, (Thousands) 2016 2015 2016 2015 2016 2015 2016 2015 Service cost $ 1,898 $ 1,871 $ 3,796 $ 3,742 $ 1,131 $ 1,064 $ 2,261 $ 2,127 Interest cost 2,835 2,550 5,671 5,100 1,564 1,435 3,128 2,870 Expected return on plan assets (5,030 ) (4,273 ) (10,059 ) (8,545 ) (1,211 ) (1,244 ) (2,422 ) (2,488 ) Recognized actuarial loss 1,821 1,747 3,641 3,492 818 735 1,637 1,471 Prior service cost amortization 27 27 55 55 (91 ) (91 ) (182 ) (182 ) Net periodic benefit cost $ 1,551 $ 1,922 $ 3,104 $ 3,844 $ 2,211 $ 1,899 $ 4,422 $ 3,798 The Company made a discretionary contribution of $30 million during the six months ended March 31, 2016 , to improve the funded status of the pension plans based on current actuarial assumptions, which includes the most recent mortality table change. The Company does not expect to be required to make additional contributions to fund the pension plans over the next two fiscal years based on current actuarial assumptions; however, funding requirements are uncertain and can depend significantly on changes in actuarial assumptions, returns on plan assets, interest rates and changes in the demographics of eligible employees and covered dependents. In addition, as in the past, the Company may elect to make contributions in excess of the minimum required amount to the plans. There were no discretionary contributions made during the six months ended March 31, 2015 . |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES NJR evaluates its tax positions to determine the appropriate accounting and recognition of potential future obligations associated with uncertain tax positions. During the six months ended March 31, 2016 and 2015 , based on its analysis, the Company determined there was no need to recognize any liabilities associated with uncertain tax positions. To calculate the estimated annual effective tax rate, NJR considers forecasted pre-tax book income and estimated permanent book versus tax differences, as well as tax credits associated with solar and wind projects. For investment tax credits the estimate is based on solar projects that are probable of being completed and placed in service during the current fiscal year based on the best information available at each reporting period. For production tax credits the estimate is based on the forecast of electricity produced during the current fiscal year based on the best information available at each reporting period. Adjustments to the effective tax rate and management's estimates will occur as information and assumptions change. The forecasted effective tax rates for the six months ended March 31, 2016 and 2015 , were 17.7 percent and 24.9 percent , respectively. The decreased tax rate is due primarily to a decrease in forecasted pre-tax income for the fiscal year ended September 30, 2016 , compared to the prior fiscal year. Forecasted tax credits, net of deferred taxes, are $27.1 million and $26.7 million for fiscal 2016 and 2015, respectively. As of March 31, 2016 , the Company has total state income tax net operating losses of approximately $226.1 million , which generally have a life of 20 years. The Company has recorded a deferred state tax asset of approximately $13.2 million on the Unaudited Condensed Consolidated Balance Sheets, reflecting the tax benefit associated with the loss carryforwards. In addition, as of March 31, 2016 , the Company has recorded a valuation allowance of $270,000 because it believes that it is more likely than not that the state net operating losses related to CR&R will expire unused. As of September 30, 2015 , the Company had total state income tax net operating losses of approximately $218.1 million , a deferred state tax asset of approximately $12.8 million and a valuation allowance of $176,000 . In addition, as of September 30, 2015 , the Company had an ITC carryforward of approximately $22.1 million , all of which was generated in fiscal year 2015 , and has a life of 20 years. The Company expects to utilize this entire carryforward. In December 2015, the Consolidated Appropriations Act extended the 30 percent ITC for solar property that is under construction on or before December 31, 2019. The credit will decline to 26 percent for property under construction as of and during 2020 and to 20 percent for property under construction as of and during 2021. For any property that is under construction before 2022, but not placed in service before 2024 the energy credit will be reduced to 10 percent. In addition, the Consolidated Appropriations Act retroactively extends the PTC for five years through December 31, 2019, with a gradual three year phase out for any project for which construction of the facility begins after December 31, 2016. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 6 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | COMMITMENTS AND CONTINGENT LIABILITIES Cash Commitments NJNG has entered into long-term contracts, expiring at various dates through October 2033 , for the supply, storage and transportation of natural gas. These contracts include annual fixed charges of approximately $35.7 million at current contract rates and volumes, which are recoverable through BGSS. For the purpose of securing storage and pipeline capacity, NJRES enters into storage and pipeline capacity contracts, which require the payment of certain demand charges by NJRES to maintain the ability to access such natural gas storage or pipeline capacity, during a fixed time period, which generally ranges from one to 10 years. Demand charges are established by interstate storage and pipeline operators and are regulated by the FERC. These demand charges represent commitments to pay storage providers or pipeline companies for the right to store and/or transport natural gas utilizing their respective assets. Commitments as of March 31, 2016 , for natural gas purchases and future demand fees for the next five fiscal year periods are as follows: (Thousands) 2016 2017 2018 2019 2020 Thereafter NJRES: Natural gas purchases $ 151,898 $ 127,345 $ 82,142 $ 49,608 $ — $ — Storage demand fees 21,405 31,439 13,117 6,728 4,953 4,055 Pipeline demand fees 51,496 60,034 24,137 6,158 2,903 3,782 Sub-total NJRES $ 224,799 $ 218,818 $ 119,396 $ 62,494 $ 7,856 $ 7,837 NJNG: Natural gas purchases $ 23,178 $ 62,070 $ 39,166 $ 39,421 $ 41,226 $ 93,884 Storage demand fees 14,495 29,099 22,237 12,834 5,776 — Pipeline demand fees 21,249 64,985 68,736 88,201 89,945 818,494 Sub-total NJNG $ 58,922 $ 156,154 $ 130,139 $ 140,456 $ 136,947 $ 912,378 Total (1) $ 283,721 $ 374,972 $ 249,535 $ 202,950 $ 144,803 $ 920,215 (1) Does not include amounts related to intercompany asset management agreements between NJRES and NJNG. Legal Proceedings Manufactured Gas Plant Remediation NJNG is responsible for the remedial cleanup of five MGP sites, dating back to gas operations in the late 1800s and early 1900s, which contain contaminated residues from former gas manufacturing operations. NJNG is currently involved in administrative proceedings with the NJDEP, and participating in various studies and investigations by outside consultants, to determine the nature and extent of any such contaminated residues and to develop appropriate programs of remedial action, where warranted, under Administrative Consent Orders or Memoranda of Agreement with the NJDEP. NJNG may recover its remediation expenditures, including carrying costs, over rolling seven -year periods pursuant to a RA approved by the BPU. In May 2015 , the BPU approved NJNG's MGP expenditures incurred through June 2014 and to recover $8.5 million annually related to the SBC RA factor, with rates effective June 1, 2015 . On December 24, 2015 , NJNG requested approval of its MGP expenditures incurred through June 30, 2015 . As of March 31, 2016 , $16.1 million of previously incurred remediation costs, net of recoveries from customers and insurance proceeds, are included in regulatory assets on the Unaudited Condensed Consolidated Balance Sheets. NJNG periodically, and at least annually, performs an environmental review of the MGP sites, including a review of potential liability for investigation and remedial action. NJNG estimated at the time of the most recent review that total future expenditures to remediate and monitor the five MGP sites for which it is responsible, including potential liabilities for Natural Resource Damages that might be brought by the NJDEP for alleged injury to groundwater or other natural resources concerning these sites, will range from approximately $150.9 million to $242.1 million . NJNG's estimate of these liabilities is based upon known facts, existing technology and enacted laws and regulations in place when the review was completed. Where it is probable that costs will be incurred, and the information is sufficient to establish a range of possible liability, NJNG accrues the most likely amount in the range. If no point within the range is more likely than the other, it is NJNG's policy to accrue the lower end of the range. Accordingly, as of March 31, 2016 , NJNG recorded an MGP remediation liability and a corresponding regulatory asset of $178.5 million on the Unaudited Condensed Consolidated Balance Sheets, based on the most likely amount. The actual costs to be incurred by NJNG are dependent upon several factors, including final determination of remedial action, changing technologies and governmental regulations, the ultimate ability of other responsible parties to pay and any insurance recoveries. NJNG will continue to seek recovery of MGP-related costs through the RA. If any future regulatory position indicates that the recovery of such costs is not probable, the related non-recoverable costs would be charged to income in the period of such determination. General The Company is party to various other claims, legal actions and complaints arising in the ordinary course of business. In the Company's opinion, the ultimate disposition of these matters will not have a material effect on its financial condition, results of operations or cash flows. |
BUSINESS SEGMENT AND OTHER OPER
BUSINESS SEGMENT AND OTHER OPERATIONS DATA | 6 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT AND OTHER OPERATIONS DATA | BUSINESS SEGMENT AND OTHER OPERATIONS DATA NJR organizes its businesses based on a combination of factors, including its products and its regulatory environment. As a result, the Company manages the businesses through the following reportable segments and other operations: the Natural Gas Distribution segment consists of regulated energy and off-system, capacity and storage management operations; the Energy Services segment consists of unregulated wholesale energy operations; the Clean Energy Ventures segment consists of capital investments in distributed power projects; the Midstream segment consists of NJR's investments in natural gas transportation and storage facilities; the Home Services and Other operations consist of heating, cooling and water appliance sales, installations and services, commercial real estate development, other investments and general corporate activities. Information related to the Company's various business segments and other operations is detailed below: Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2016 2015 2016 2015 Operating revenues Natural Gas Distribution External customers $ 242,536 $ 374,703 $ 394,142 $ 583,430 Energy Services External customers (1) 316,703 626,107 592,885 1,226,669 Intercompany 3,255 56,097 5,766 59,223 Clean Energy Ventures External customers 7,662 4,068 15,456 10,303 Subtotal 570,156 1,060,975 1,008,249 1,879,625 Home Services and Other External customers 7,292 8,212 15,968 16,812 Intercompany 639 375 1,536 786 Eliminations (3,894 ) (56,472 ) (7,302 ) (60,009 ) Total $ 574,193 $ 1,013,090 $ 1,018,451 $ 1,837,214 Depreciation and amortization Natural Gas Distribution $ 11,598 $ 10,647 $ 22,836 $ 21,192 Energy Services 23 23 46 45 Clean Energy Ventures 5,876 4,297 10,986 7,888 Midstream 2 1 3 3 Subtotal 17,499 14,968 33,871 29,128 Home Services and Other 237 238 464 476 Eliminations 8 (2 ) (109 ) (14 ) Total $ 17,744 $ 15,204 $ 34,226 $ 29,590 Interest income (2) Natural Gas Distribution $ 60 $ 10 $ 128 $ 100 Energy Services — 13 72 13 Clean Energy Ventures — 22 — 22 Midstream 450 242 714 481 Subtotal 510 287 914 616 Home Services and Other 123 201 160 201 Eliminations (580 ) (242 ) (951 ) (481 ) Total $ 53 $ 246 $ 123 $ 336 (1) Includes sales to Canada, which accounted for 2.9 and 4.4 percent of total operating revenues during the six months ended March 31, 2016 and 2015 . (2) Included in other income, net on the Unaudited Condensed Consolidated Statements of Operations. Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2016 2015 2016 2015 Interest expense, net of capitalized interest Natural Gas Distribution $ 4,690 $ 4,388 $ 9,278 $ 8,997 Energy Services 168 288 376 801 Clean Energy Ventures 2,552 1,661 4,605 3,478 Midstream 130 210 172 460 Subtotal 7,540 6,547 14,431 13,736 Home Services and Other 105 (64 ) 105 (58 ) Eliminations (276 ) — (390 ) — Total $ 7,369 $ 6,483 $ 14,146 $ 13,678 Income tax provision (benefit) Natural Gas Distribution $ 22,710 $ 23,778 $ 36,573 $ 37,944 Energy Services 7,805 3,923 13,000 49,800 Clean Energy Ventures (13,915 ) (9,042 ) (25,502 ) (28,763 ) Midstream 1,530 1,819 3,170 3,311 Subtotal 18,130 20,478 27,241 62,292 Home Services and Other (1,456 ) (972 ) (1,744 ) (1,424 ) Eliminations 1,166 638 700 143 Total $ 17,840 $ 20,144 $ 26,197 $ 61,011 Equity in earnings of affiliates Midstream $ 3,508 $ 4,581 $ 7,053 $ 8,356 Eliminations (1,106 ) (994 ) (2,245 ) (1,974 ) Total $ 2,402 $ 3,587 $ 4,808 $ 6,382 Net financial earnings Natural Gas Distribution $ 48,961 $ 48,594 $ 79,531 $ 76,780 Energy Services 17,005 36,316 27,019 52,752 Clean Energy Ventures 11,806 13,010 19,311 22,018 Midstream 2,228 2,604 4,572 4,724 Subtotal 80,000 100,524 130,433 156,274 Home Services and Other (2,040 ) (1,359 ) (2,623 ) (1,951 ) Eliminations (80 ) (22 ) (298 ) (70 ) Total $ 77,880 $ 99,143 $ 127,512 $ 154,253 Capital expenditures Natural Gas Distribution $ 47,366 $ 33,243 $ 96,406 $ 69,991 Clean Energy Ventures 25,876 33,025 70,882 88,370 Subtotal 73,242 66,268 167,288 158,361 Home Services and Other 272 50 1,069 61 Total $ 73,514 $ 66,318 $ 168,357 $ 158,422 Investments in equity investees Midstream $ 3,102 $ 717 $ 5,948 $ 1,264 Total $ 3,102 $ 717 $ 5,948 $ 1,264 The Chief Executive Officer, who uses NFE as a measure of profit or loss in measuring the results of the Company's segments and operations, is the chief operating decision maker of the Company. A reconciliation of consolidated NFE to consolidated net income is as follows: Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2016 2015 2016 2015 Net financial earnings $ 77,880 $ 99,143 $ 127,512 $ 154,253 Less: Unrealized loss (gain) on derivative instruments and related transactions 3,170 68,474 2,035 (20,198 ) Effects of economic hedging related to natural gas inventory (1,054 ) (23,450 ) 2,759 (32,215 ) Tax adjustments 2,436 (6,784 ) 743 22,443 Net income $ 73,328 $ 60,903 $ 121,975 $ 184,223 The Company uses derivative instruments as economic hedges of purchases and sales of physical gas inventory. For GAAP purposes, these derivatives are recorded at fair value and related changes in fair value are included in reported earnings. Revenues and cost of gas related to physical gas flow is recognized when the gas is delivered to customers. Consequently, there is a mismatch in the timing of earnings recognition between the economic hedges and physical gas flows. Timing differences occur in two ways: • Unrealized gains and losses on derivatives are recognized in reported earnings in periods prior to physical gas inventory flows; and • Unrealized gains and losses of prior periods are reclassified as realized gains and losses when derivatives are settled in the same period as physical gas inventory movements occur. NFE is a measure of the earnings based on eliminating these timing differences, to effectively match the earnings effects of the economic hedges with the physical sale of gas, SRECs and foreign currency contracts. Consequently, to reconcile between GAAP and NFE, current period unrealized gains and losses on the derivatives are excluded from NFE as a reconciling item. Additionally, realized derivative gains and losses are also included in current period net income. However, NFE includes only realized gains and losses related to natural gas sold out of inventory, effectively matching the full earnings effects of the derivatives with realized margins on physical gas flows. NJR also calculates a quarterly tax adjustment based on an estimated annual effective tax rate for NFE purposes. The Company's assets for the various business segments and business operations are detailed below: (Thousands) March 31, September 30, Assets at end of period: Natural Gas Distribution $ 2,372,033 $ 2,305,293 Energy Services 243,989 260,021 Clean Energy Ventures 566,582 504,885 Midstream 199,703 182,007 Subtotal 3,382,307 3,252,206 Home Services and Other 106,541 88,880 Intercompany assets (1) (69,254 ) (56,729 ) Total $ 3,419,594 $ 3,284,357 (1) Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS NJRES may periodically enter into storage or park and loan agreements with its affiliated FERC-regulated natural gas storage facility, Steckman Ridge. As of March 31, 2016 , NJRES has entered into storage and park and loan transactions with Steckman Ridge for varying terms, all of which will expire by October 2020 . NJRES had demand fees, net of eliminations, associated with Steckman Ridge of $1.4 million and $926,000 during the six months ended March 31, 2016 and 2015 , respectively, and demand fees payable of $377,000 and $375,000 as of March 31, 2016 and September 30, 2015 , respectively. In January 2010 , NJNG entered into a 10 -year agreement effective April 1, 2010 , for 3 Bcf of firm storage capacity with Steckman Ridge. Under the terms of the agreement, NJNG incurs demand fees, at market rates, of approximately $9.3 million annually, a portion of which is eliminated in consolidation. These fees are recoverable through NJNG's BGSS mechanism and are included in regulatory assets. During the six months ended March 31, 2016 and 2015 , NJNG had demand fees, net of eliminations, associated with Steckman Ridge of $2.8 million and $2.9 million , respectively, and demand fees payable of $775,000 as of both March 31, 2016 and September 30, 2015 . NJNG and NJRES have entered into various asset management agreements. Under the terms of these agreements, NJNG releases certain transportation and storage contracts to NJRES. NJNG retains the right to purchase market priced gas or fixed price storage gas from NJRES. As of March 31, 2016 , NJNG and NJRES had three asset management agreements with expiration dates ranging from October 2016 through March 2018 . NJNG has entered into a 15 year transportation precedent agreement for committed capacity of 180,000 dths per day with PennEast, which is estimated to be in service during the last quarter of fiscal 2018 or the first quarter of fiscal 2019 . |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Available for Sale Securities | Available for Sale Securities Included in available for sale securities on the Unaudited Condensed Consolidated Balance Sheets are investments in two publicly traded energy companies. Total unrealized gains associated with these investments are included as a part of accumulated other comprehensive income, a component of common stock equity. Reclassifications of realized gains out of other comprehensive income into income are determined based on average cost. |
Loan Receivable | Loan Receivable NJNG provides loans, with terms ranging from two to 10 years, to customers that elect to purchase and install certain energy efficient equipment in accordance with its BPU-approved SAVEGREEN program. The loans are recognized at net present value on the Unaudited Condensed Consolidated Balance Sheets. The Company has recorded $7.5 million and $6.2 million in other current assets and $40.2 million and $36.2 million in other noncurrent assets as of March 31, 2016 and September 30, 2015 , respectively, on the Unaudited Condensed Consolidated Balance Sheets, related to the loans. NJR's policy is to establish an allowance for doubtful accounts when loan balances are in arrears for more than 60 days . As of March 31, 2016 and September 30, 2015 , there was no allowance for doubtful accounts established for the SAVEGREEN loans. |
Recent Updates to the Accounting Standards Codification | Recent Updates to the Accounting Standards Codification Revenue In May 2014, the FASB issued ASU No. 2014-09, and added Topic 606, Revenue from Contracts with Customers , to the ASC. ASC 606 supersedes ASC 605, Revenue Recognition , as well as most industry-specific guidance, and prescribes a single, comprehensive revenue recognition model designed to improve financial reporting comparability across entities, industries, jurisdictions and capital markets. In August 2015, the FASB issued ASU No. 2015-14, which defers the implementation of the new guidance for one year. The new guidance will become effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Upon adoption, the guidance will be applied on a full or modified retrospective basis. The Company is currently evaluating the provisions of ASC 606 to understand the impact, if any, to its financial position, results of operations and cash flows upon adoption. Stock Compensation In June 2014, the FASB issued ASU No. 2014-12, an amendment to ASC 718, Compensation - Stock Compensation , which clarifies the accounting for performance awards when the terms of the award provide that a performance target could be achieved after the requisite service period. The new guidance will become effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption, the amendment will be applied on a prospective or retrospective basis. The Company does not expect this standard to have any impact to its financial position, results of operations and cash flows upon adoption. In March 2016, the FASB issued ASU 2016-9, an amendment to ASC 718, Compensation - Stock Compensation , which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures and statutory tax withholding requirements. The update also addresses the related classification of transactions within the statement of cash flows. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 with early adoption permitted. Upon adoption, the amendments will be applied on a prospective or retrospective basis. The Company is currently evaluating the amendment to understand the impact on its financial position, results of operations and cash flows upon adoption. Consolidation In February 2015, the FASB issued ASU No. 2015-02, an amendment to ASC 810, Consolidation , which changes the consolidation analysis required under GAAP and reevaluates whether limited partnerships and similar entities must be consolidated. The new guidance will become effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption, the amendment will be applied on a full or modified retrospective basis. The Company is currently evaluating the provisions of ASU No. 2015-02 to understand the impact, if any, on its financial position, results of operations and cash flows upon adoption. Interest In April 2015, the FASB issued ASU No. 2015-03, an amendment to ASC 835, Interest - Imputation of Interest, which simplifies the presentation of debt issuance costs by requiring them to be presented in the balance sheet as a deduction from the carrying amount of the liability. The amendments do not affect the recognition and measurement guidance for debt issuance costs. In August 2015, the FASB issued ASU No. 2015-15, which clarified that the amendments contained within ASU No. 2015-03 do not require companies to modify their accounting for costs incurred in obtaining revolving credit facilities. The amended guidance becomes effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption, the amendment will be applied on a retrospective basis. The Company does not expect this standard to have a material impact to its financial position, results of operations or cash flows upon adoption. Intangibles In April 2015, the FASB issued ASU No. 2015-05, an amendment to ASC 350, Intangibles - Goodwill and Other - Internal-Use Software, which clarifies the accounting for fees in a cloud computing arrangement. The amendments provide guidance on how an entity should evaluate the accounting for fees paid in a cloud computing arrangement to determine whether an arrangement includes the sale or license of software. The amended guidance becomes effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Upon adoption, the amendment can be applied on a prospective or retrospective basis. The Company plans to adopt the guidance on a prospective basis and does not expect this standard to have a material impact to its financial position, results of operations or cash flows upon adoption. Inventory In July 2015, the FASB issued ASU No. 2015-11, an amendment to ASC 330, Inventory , which requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Upon adoption, the amendments will be applied on a prospective basis. The Company is currently evaluating the amendment to understand the impact on its financial position, results of operations and cash flows upon adoption. Income Taxes In November 2015, the FASB issued ASU 2015-17, an amendment to ASC 740, Income Taxes , to simplify the balance sheet presentation of deferred income taxes. The update requires entities to present all deferred tax assets and liabilities as noncurrent. The Company elected to early adopt the amended guidance effective October 1, 2015, and applied the new provisions retrospectively. Accordingly, the following amounts on the Unaudited Condensed Consolidated Balance Sheets, as of September 30, 2015, have been adjusted: (Thousands) As Previously Reported Effect of Change As Adjusted Assets Deferred taxes (current) $ 56,296 $ (56,296 ) $ — Total current assets $ 544,511 $ (56,296 ) $ 488,215 Other noncurrent assets $ 60,300 $ 1,615 $ 61,915 Total noncurrent assets $ 666,266 $ 1,615 $ 667,881 Total assets $ 3,339,038 $ (54,681 ) $ 3,284,357 Capitalization and Liabilities Deferred income taxes $ 499,616 $ (54,681 ) $ 444,935 Total noncurrent liabilities $ 952,387 $ (54,681 ) $ 897,706 Total capitalization and liabilities $ 3,339,038 $ (54,681 ) $ 3,284,357 There was no additional impact to the Unaudited Condensed Consolidated Statements of Operations or the Unaudited Condensed Consolidated Statements of Cash Flows. Financial Instruments In January 2016, the FASB issued ASU 2016-1, an amendment to ASC 825, Financial Instruments , to address certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The standard affects investments in equity securities that do not result in consolidation and are not accounted for under the equity method and the presentation of certain fair value changes for financial liabilities measured at fair value. It also simplifies the impairment assessment of equity investments without a readily determinable fair value by requiring a qualitative assessment. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Upon adoption, the amendments will be applied on a modified-retrospective basis. The Company has evaluated the amendments and noted that, upon adoption, subsequent changes to the fair value of the Company’s available for sale securities will be recorded in the statement of operations as opposed to other comprehensive income. The Company does not expect any other material impacts to its financial position, results of operations or cash flows upon adoption. Leases In February 2016, the FASB issued ASU 2016-2, an amendment to ASC 842, Leases , which provides for a comprehensive overhaul of the lease accounting model and changes the definition of a lease within the accounting literature. Under the new standard, all leases with a term greater than one year will be recorded on the balance sheet. Amortization of the related asset will be accounted for using one of two approaches prescribed by the guidance. Additional disclosures will be required to allow the user to assess the amount, timing and uncertainty of cash flows arising from leasing activities. A modified retrospective transition approach is required for leases existing at the time of adoption. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the amendments to understand the impact on its financial position, results of operations and cash flows upon adoption. |
Derivative Instruments | The Company is subject to commodity price risk due to fluctuations in the market price of natural gas, SRECs, and electricity. To manage this risk, the Company enters into a variety of derivative instruments including, but not limited to, futures contracts, physical forward contracts, financial options and swaps to economically hedge the commodity price risk associated with its existing and anticipated commitments to purchase and sell natural gas, SRECs, and electricity. In addition, the Company may utilize foreign currency derivatives to hedge Canadian dollar denominated gas purchases and/or sales. Therefore, the Company's primary underlying risks include commodity prices, interest rates and foreign currency. These contracts, with a few exceptions as described below, are accounted for as derivatives. Accordingly, all of the financial and certain of the Company's physical derivative instruments are recorded at fair value on the Unaudited Condensed Consolidated Balance Sheets. For a more detailed discussion of the Company's fair value measurement policies and level disclosures associated with NJR's derivative instruments, see Note 5. Fair Value . NJRES Since NJRES chooses not to designate its financial commodity and physical forward commodity derivatives as accounting hedges or to elect NPNS, changes in the fair value of these derivatives are recorded as a component of gas purchases or operating revenues, as appropriate for NJRES, on the Unaudited Condensed Consolidated Statements of Operations as unrealized gains or (losses). For NJRES at settlement, realized gains and (losses) on all financial derivative instruments are recognized as a component of gas purchases and realized gains and (losses) on all physical derivatives follow the presentation of the related unrealized gains and (losses) as a component of either gas purchases or operating revenues. NJRES also enters into natural gas transactions in Canada and, consequently, is exposed to fluctuations in the value of Canadian currency relative to the U.S. dollar. NJRES may utilize foreign currency derivatives to lock in the currency translation rate associated with natural gas transactions denominated in Canadian currency. The derivatives may include currency forwards, futures, or swaps and are accounted for as derivatives. These derivatives may be used to hedge future forecasted cash payments associated with transportation and storage contracts along with purchases of natural gas. For transactions occurring on or before December 31, 2015, NJRES designates its foreign exchange contracts as cash flow hedges, and the effective portion of the hedges are recorded in OCI. Effective January 1, 2016, on a prospective basis, the Company has elected not to designate its foreign currency derivatives as accounting hedges. Accordingly, changes in the fair value of foreign exchange contracts entered into from January 1, 2016 on, are recognized in gas purchases on the Unaudited Condensed Consolidated Statements of Operations. As a result of NJRES entering into transactions to borrow gas, commonly referred to as “park and loans,” an embedded derivative is created relating to differences between the fair value of the amount borrowed and the fair value of the amount that will ultimately be repaid, based on changes in the forward price for natural gas prices at the borrowed location over the contract term. This embedded derivative is accounted for as a forward sale in the month in which the repayment of the borrowed gas is expected to occur, and is considered a derivative transaction that is recorded at fair value on the Unaudited Condensed Consolidated Balance Sheets, with changes in value recognized in current period earnings. Expected production of SRECs is hedged through forward and futures contracts. The contracts require the Company to physically deliver the SRECs upon settlement. For transactions occurring on or before December 31, 2015, the Company elects NPNS accounting treatment on SREC forward and futures contracts. Effective January 1, 2016, on a prospective basis, NJRES no longer elects NPNS accounting treatment on SREC contracts and recognizes changes in the fair value of these derivatives as a component of operating revenues. Upon settlement of the contract, the related revenue is recognized when the SREC certificate is transferred to the counterparty. NPNS is a contract-by-contract election and, where it makes sense to do so, we can and may elect certain contracts to be normal. NJNG Changes in fair value of NJNG's financial commodity derivatives are recorded as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets. The Company elects NPNS accounting treatment on all physical commodity contracts that NJNG entered into on or before December 31, 2015, and accounts for these contracts on an accrual basis. Accordingly, physical natural gas purchases are recognized in regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets when the contract settles and the natural gas is delivered. The average cost of natural gas is amortized in current period earnings based on the current BPU BGSS factor and therm sales. Effective January 1, 2016, on a prospective basis, NJNG no longer elects NPNS accounting treatment on all of its physical commodity contracts. However, since NPNS is a contract-by-contract election, where it makes sense to do so, we can and may elect certain contracts to be normal. Because NJNG recovers these amounts through future BGSS rates as increases or decreases to the cost of natural gas in NJNG’s tariff for gas service, the changes in fair value of these contracts are deferred as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets. In an April 2014 BPU Order, NJNG received regulatory approval to enter into interest rate risk management transactions related to long-term debt securities. On June 1, 2015, NJNG entered into a treasury lock transaction to fix a benchmark treasury rate of 3.26 percent associated with a forecasted $125 million debt issuance expected in May 2018. This forecasted debt issuance coincides with the maturity of NJNG's existing $125 million , 5.6 percent notes due May 15, 2018 . The change in fair value of NJNG's treasury lock agreement is recorded as a component of regulatory assets or liabilities on the Unaudited Condensed Consolidated Balance Sheets since NJNG believes that the market value upon settlement will be reflected in future rates. Upon settlement, any gain or loss will be amortized in earnings over the life of the future debt issuance. |
Fair Value Hierarchy | Fair Value Hierarchy NJR applies fair value measurement guidance to its financial assets and liabilities, as appropriate, which include financial derivatives and physical commodity contracts qualifying as derivatives, available for sale securities and other financial assets and liabilities. In addition, authoritative accounting literature prescribes the use of a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on the source of the data used to develop the price inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to inputs that are based on unobservable market data and include the following: Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets. NJR's Level 1 assets and liabilities include exchange traded natural gas futures and options contracts, listed equities and money market funds. Exchange traded futures and options contracts include all energy contracts traded on the NYMEX/CME and ICE that NJR refers internally to as basis swaps, fixed swaps, futures and financial options that are cleared through a FCM. Level 2 Other significant observable inputs such as interest rates or price data, including both commodity and basis pricing that is observed either directly or indirectly from publications or pricing services. NJR's Level 2 assets and liabilities include over-the-counter physical forward commodity contracts and swap contracts, SREC forward sales or derivatives that are initially valued using observable quotes and are subsequently adjusted to include time value, credit risk or estimated transport pricing components for which no basis price is available. Level 2 financial derivatives consist of transactions with non-FCM counterparties (basis swaps, fixed swaps and/or options). NJNG's treasury lock is also considered Level 2 as valuation is based on quoted market interest and swap rates as inputs to the valuation model. Inputs are verifiable and do not require significant management judgment. For some physical commodity contracts the Company utilizes transportation tariff rates that are publicly available and that it considers to be observable inputs that are equivalent to market data received from an independent source. There are no significant judgments or adjustments applied to the transportation tariff inputs and no market perspective is required. Even if the transportation tariff input were considered to be a “model,” it would still be considered to be a Level 2 input as: 1) The data is widely accepted and public 2) The data is non-proprietary and sourced from an independent third party 3) The data is observable and published These additional adjustments are generally not considered to be significant to the ultimate recognized values. Level 3 Inputs derived from a significant amount of unobservable market data. These include NJR's best estimate of fair value and are derived primarily through the use of internal valuation methodologies. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Gas in Storage | The following table summarizes gas in storage, at average cost by company as of: March 31, September 30, ($ in thousands) Gas in Storage Bcf Gas in Storage Bcf NJRES $ 89,514 52.3 $ 93,696 44.6 NJNG 27,976 9.3 70,209 21.4 Total $ 117,490 61.6 $ 163,905 66.0 |
Accounts Receivable by Subsidiary | Customer accounts receivable include outstanding billings from the following subsidiaries as of: (Thousands) March 31, September 30, NJRES $ 75,691 51 % $ 107,461 69 % NJNG (1) 67,080 45 41,130 26 NJRCEV 1,975 1 1,084 1 NJRHS and other 4,076 3 5,598 4 Total $ 148,822 100 % $ 155,273 100 % (1) Does not include unbilled revenues of $27.1 million and $6.4 million as of March 31, 2016 and September 30, 2015 , respectively. |
Schedule of Retrospective Application of New Accounting Standard | In November 2015, the FASB issued ASU 2015-17, an amendment to ASC 740, Income Taxes , to simplify the balance sheet presentation of deferred income taxes. The update requires entities to present all deferred tax assets and liabilities as noncurrent. The Company elected to early adopt the amended guidance effective October 1, 2015, and applied the new provisions retrospectively. Accordingly, the following amounts on the Unaudited Condensed Consolidated Balance Sheets, as of September 30, 2015, have been adjusted: (Thousands) As Previously Reported Effect of Change As Adjusted Assets Deferred taxes (current) $ 56,296 $ (56,296 ) $ — Total current assets $ 544,511 $ (56,296 ) $ 488,215 Other noncurrent assets $ 60,300 $ 1,615 $ 61,915 Total noncurrent assets $ 666,266 $ 1,615 $ 667,881 Total assets $ 3,339,038 $ (54,681 ) $ 3,284,357 Capitalization and Liabilities Deferred income taxes $ 499,616 $ (54,681 ) $ 444,935 Total noncurrent liabilities $ 952,387 $ (54,681 ) $ 897,706 Total capitalization and liabilities $ 3,339,038 $ (54,681 ) $ 3,284,357 |
REGULATION (Tables)
REGULATION (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Regulated Operations [Abstract] | |
Schedule of Regulatory Assets and Liabilities | Regulatory assets and liabilities included on the Unaudited Condensed Consolidated Balance Sheets are comprised of the following: (Thousands) March 31, September 30, Regulatory assets-current Conservation Incentive Program $ 3,190 $ — New Jersey Clean Energy Program 5,586 14,293 Underrecovered gas costs 5,052 — Derivatives at fair value, net 18,810 9,965 Total current regulatory assets $ 32,638 $ 24,258 Regulatory assets-noncurrent Environmental remediation costs Expended, net of recoveries $ 16,122 $ 18,886 Liability for future expenditures 178,512 180,400 Deferred income taxes 18,956 17,460 Derivatives at fair value, net 12,932 5,153 SAVEGREEN 23,009 26,882 Postemployment and other benefit costs 136,346 140,636 Deferred Superstorm Sandy costs 15,201 15,201 Conservation Incentive Program 28,686 — Other noncurrent regulatory assets 6,414 5,537 Total noncurrent regulatory assets $ 436,178 $ 410,155 Regulatory liability-current Conservation Incentive Program $ — $ 5,167 Overrecovered gas costs — 6,987 Total current regulatory liabilities $ — $ 12,154 Regulatory liabilities-noncurrent Cost of removal obligation $ 46,348 $ 54,880 New Jersey Clean Energy Program 14,087 11,956 Other noncurrent regulatory liabilities 898 697 Total noncurrent regulatory liabilities $ 61,333 $ 67,533 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Assets and Liabilities | The following table reflects the fair value of NJR's derivative assets and liabilities recognized on the Unaudited Condensed Consolidated Balance Sheets as of: Fair Value March 31, 2016 September 30, 2015 (Thousands) Balance Sheet Location Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Derivatives designated as hedging instruments: NJRES: Foreign currency contracts Derivatives - current $ 7 $ — $ — $ — Fair value of derivatives designated as hedging instruments $ 7 $ — $ — $ — Derivatives not designated as hedging instruments: NJNG: Physical commodity contracts Derivatives - current $ 58 $ 90 $ — $ — Financial commodity contracts Derivatives - current 2,252 21,014 207 10,163 Derivatives - noncurrent — — — 925 Interest rate contracts Derivatives - noncurrent — 12,932 — 4,228 NJRES: Physical commodity contracts Derivatives - current 5,245 8,892 4,854 9,281 Derivatives - noncurrent 914 158 1,718 — Financial commodity contracts Derivatives - current 47,241 23,739 35,682 13,347 Derivatives - noncurrent 260 823 2,626 386 Fair value of derivatives not designated as hedging instruments $ 55,970 $ 67,648 $ 45,087 $ 38,330 Total fair value of derivatives $ 55,977 $ 67,648 $ 45,087 $ 38,330 |
Offsetting Assets | The following table summarizes the reported gross amounts, the amounts that NJR has the right to offset but elects not to, financial collateral, as well as the net amounts NJR could present on the Unaudited Condensed Consolidated Balance Sheets but elects not to. (Thousands) Amounts Presented in Balance Sheets (1) Offsetting Derivative Instruments (2) Financial Collateral Received/Pledged (3) Net Amounts (4) As of March 31, 2016: Derivative assets: NJRES Physical commodity contracts $ 6,159 $ (1,344 ) $ (1,000 ) $ 3,815 Financial commodity contracts 47,501 (19,324 ) (12,846 ) 15,331 Foreign currency contracts 7 — — 7 Total NJRES $ 53,667 $ (20,668 ) $ (13,846 ) $ 19,153 NJNG Physical commodity contracts $ 58 $ (1 ) $ — $ 57 Financial commodity contracts 2,252 (2,252 ) — — Total NJNG $ 2,310 $ (2,253 ) $ — $ 57 Derivative liabilities: NJRES Physical commodity contracts $ 9,050 $ (1,345 ) $ (1,200 ) $ 6,505 Financial commodity contracts 24,562 (19,324 ) (5,238 ) — Total NJRES $ 33,612 $ (20,669 ) $ (6,438 ) $ 6,505 NJNG Physical commodity contracts $ 90 $ (1 ) $ — $ 89 Financial commodity contracts 21,014 (2,252 ) (18,762 ) — Interest rate contracts 12,932 — — 12,932 Total NJNG $ 34,036 $ (2,253 ) $ (18,762 ) $ 13,021 As of September 30, 2015: Derivative assets: NJRES Physical commodity contracts $ 6,562 $ (1,326 ) $ — $ 5,236 Financial commodity contracts 38,308 (13,734 ) 3,841 28,415 Total NJRES $ 44,870 $ (15,060 ) $ 3,841 $ 33,651 NJNG Financial commodity contracts $ 207 $ (207 ) $ — $ — Derivative liabilities: NJRES Physical commodity contracts $ 9,271 $ (1,326 ) $ (1,200 ) $ 6,745 Financial commodity contracts 13,733 (13,733 ) — — Total NJRES $ 23,004 $ (15,059 ) $ (1,200 ) $ 6,745 NJNG Financial commodity contracts $ 11,088 $ (207 ) $ (10,881 ) $ — Interest rate contracts 4,228 — — 4,228 Total NJNG $ 15,316 $ (207 ) $ (10,881 ) $ 4,228 (1) Derivative assets and liabilities are presented on a gross basis in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20. (2) Offsetting derivative instruments include: transactions with NAESB netting election, transactions held by FCM's with net margining and transactions with ISDA netting. (3) Financial collateral includes cash balances at FCMs as well as cash received from or pledged to other counterparties. (4) Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20. |
Offsetting Liabilities | The following table summarizes the reported gross amounts, the amounts that NJR has the right to offset but elects not to, financial collateral, as well as the net amounts NJR could present on the Unaudited Condensed Consolidated Balance Sheets but elects not to. (Thousands) Amounts Presented in Balance Sheets (1) Offsetting Derivative Instruments (2) Financial Collateral Received/Pledged (3) Net Amounts (4) As of March 31, 2016: Derivative assets: NJRES Physical commodity contracts $ 6,159 $ (1,344 ) $ (1,000 ) $ 3,815 Financial commodity contracts 47,501 (19,324 ) (12,846 ) 15,331 Foreign currency contracts 7 — — 7 Total NJRES $ 53,667 $ (20,668 ) $ (13,846 ) $ 19,153 NJNG Physical commodity contracts $ 58 $ (1 ) $ — $ 57 Financial commodity contracts 2,252 (2,252 ) — — Total NJNG $ 2,310 $ (2,253 ) $ — $ 57 Derivative liabilities: NJRES Physical commodity contracts $ 9,050 $ (1,345 ) $ (1,200 ) $ 6,505 Financial commodity contracts 24,562 (19,324 ) (5,238 ) — Total NJRES $ 33,612 $ (20,669 ) $ (6,438 ) $ 6,505 NJNG Physical commodity contracts $ 90 $ (1 ) $ — $ 89 Financial commodity contracts 21,014 (2,252 ) (18,762 ) — Interest rate contracts 12,932 — — 12,932 Total NJNG $ 34,036 $ (2,253 ) $ (18,762 ) $ 13,021 As of September 30, 2015: Derivative assets: NJRES Physical commodity contracts $ 6,562 $ (1,326 ) $ — $ 5,236 Financial commodity contracts 38,308 (13,734 ) 3,841 28,415 Total NJRES $ 44,870 $ (15,060 ) $ 3,841 $ 33,651 NJNG Financial commodity contracts $ 207 $ (207 ) $ — $ — Derivative liabilities: NJRES Physical commodity contracts $ 9,271 $ (1,326 ) $ (1,200 ) $ 6,745 Financial commodity contracts 13,733 (13,733 ) — — Total NJRES $ 23,004 $ (15,059 ) $ (1,200 ) $ 6,745 NJNG Financial commodity contracts $ 11,088 $ (207 ) $ (10,881 ) $ — Interest rate contracts 4,228 — — 4,228 Total NJNG $ 15,316 $ (207 ) $ (10,881 ) $ 4,228 (1) Derivative assets and liabilities are presented on a gross basis in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20. (2) Offsetting derivative instruments include: transactions with NAESB netting election, transactions held by FCM's with net margining and transactions with ISDA netting. (3) Financial collateral includes cash balances at FCMs as well as cash received from or pledged to other counterparties. (4) Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20. |
Effect of Derivative Instruments on Consolidated Statements of Operations | The following table reflects the effect of derivative instruments on the Unaudited Condensed Consolidated Statements of Operations as of: (Thousands) Location of gain (loss) recognized in income on derivatives Amount of gain (loss) recognized in income on derivatives Three Months Ended Six Months Ended March 31, March 31, Derivatives not designated as hedging instruments: 2016 2015 2016 2015 NJRES: Physical commodity contracts Operating revenues $ 9,128 $ (1,144 ) $ 21,002 $ 14,947 Physical commodity contracts Gas purchases (5,583 ) 10,063 (26,820 ) (9,793 ) Financial commodity contracts Gas purchases 21,820 (27,204 ) 63,096 90,517 Total unrealized and realized gains (losses) $ 25,365 $ (18,285 ) $ 57,278 $ 95,671 |
Effect of Derivative Instruments Designated as Cash Flow Hedges on OCI | The following table reflects the effect of derivative instruments designated as cash flow hedges on OCI as of March 31 : (Thousands) Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion) Amount of Gain or (Loss) Recognized on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, Derivatives in cash flow hedging relationships: 2016 2015 2016 2015 2016 2015 Foreign currency contracts $ 29 $ (381 ) $ 30 $ 567 $ — $ — (Thousands) Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion) Amount of Gain or (Loss) Recognized on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Six Months Ended Six Months Ended Six Months Ended March 31, March 31, March 31, Derivatives in cash flow hedging relationships: 2016 2015 2016 2015 2016 2015 Foreign currency contracts $ (35 ) $ (405 ) $ 42 $ 542 $ — $ — |
Schedule of Outstanding Long (Short) Derivatives | NJNG and NJRES had the following outstanding long (short) derivatives as of: Volume (Bcf) March 31, September 30, NJNG Futures (1) 15.2 25.8 Physical 5.9 — NJRES Futures (88.6 ) (91.1 ) Options 3.6 1.2 Physical (2) 137.4 48.2 (1) Not included is the notional amount of $125 million related to NJNG’s treasury lock agreement. (2) Not included are 48,000 SRECs that are open as of March 31, 2016 . |
Schedule of Broker Margin Accounts by Company | The balances by company, are as follows: (Thousands) Balance Sheet Location March 31, September 30, NJNG Broker margin - Current assets $ 20,235 $ 12,990 NJRES Broker margin - Current assets $ 13,921 $ — Broker margin - Current (liabilities) $ (12,798 ) $ (4,103 ) |
Summary of Gross Credit Exposures | The following is a summary of gross credit exposures grouped by investment and noninvestment grade counterparties, as of March 31, 2016 . The amounts presented below have not been reduced by any collateral received or netting and exclude accounts receivable for NJNG retail natural gas sales and services and NJRCEV residential solar installations. (Thousands) Gross Credit Exposure Investment grade $ 84,613 Noninvestment grade 8,407 Internally rated investment grade 11,537 Internally rated noninvestment grade 12,974 Total $ 117,531 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The estimated fair value of long-term debt, including current maturities and excluding capital leases is as follows: (Thousands) March 31, September 30, Carrying value (1) $ 807,845 $ 807,845 Fair market value $ 832,202 $ 817,319 (1) Excludes capital leases of $48.2 million and $46.9 million as of March 31, 2016 and September 30, 2015 , respectively. |
Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized as follows: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Thousands) (Level 1) (Level 2) (Level 3) Total As of March 31, 2016: Assets: Physical commodity contracts $ — $ 6,217 $ — $ 6,217 Financial commodity contracts 49,753 — — 49,753 Financial commodity contracts - foreign exchange — 7 — 7 Available for sale equity securities - energy industry 73,444 — — 73,444 Other (1) 1,607 — — 1,607 Total assets at fair value $ 124,804 $ 6,224 $ — $ 131,028 Liabilities: Physical commodity contracts $ — $ 9,140 $ — $ 9,140 Financial commodity contracts 45,576 — — 45,576 Interest rate contracts — 12,932 — 12,932 Total liabilities at fair value $ 45,576 $ 22,072 $ — $ 67,648 As of September 30, 2015: Assets: Physical commodity contracts $ — $ 6,572 $ — $ 6,572 Financial commodity contracts 38,515 — — 38,515 Available for sale equity securities - energy industry 59,475 — — 59,475 Other (1) 1,572 — — 1,572 Total assets at fair value $ 99,562 $ 6,572 $ — $ 106,134 Liabilities: Physical commodity contracts $ — $ 9,281 $ — $ 9,281 Financial commodity contracts 24,821 — — 24,821 Interest rate contracts — 4,228 — 4,228 Total liabilities at fair value $ 24,821 $ 13,509 $ — $ 38,330 (1) Includes various money market funds. |
INVESTMENTS IN EQUITY INVESTE27
INVESTMENTS IN EQUITY INVESTEES (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
Schedule of Equity Method Investments | NJR's investments in equity investees includes the following investments as of: (Thousands) March 31, September 30, Steckman Ridge (1) $ 124,446 $ 125,649 PennEast 12,528 6,353 Total $ 136,974 $ 132,002 (1) Includes loans with a total outstanding principal balance of $70.4 million for both March 31, 2016 and September 30, 2015 . The loans accrue interest at a variable rate that resets quarterly and are due October 1, 2023. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Basic and Diluted | The following table presents the calculation of the Company's basic and diluted earnings per share for: Three Months Ended Six Months Ended March 31, March 31, (Thousands, except per share amounts) 2016 2015 2016 2015 Net income, as reported $ 73,328 $ 60,903 $ 121,975 $ 184,223 Basic earnings per share Weighted average shares of common stock outstanding-basic 85,834 85,328 85,754 84,940 Basic earnings per common share $0.85 $.71 $1.42 $2.17 Diluted earnings per share Weighted average shares of common stock outstanding-basic 85,834 85,328 85,754 84,940 Incremental shares (1) 1,024 1,042 1,024 1,042 Weighted average shares of common stock outstanding-diluted 86,858 86,370 86,778 85,982 Diluted earnings per common share (2) $.84 $.71 $1.41 $2.14 (1) Incremental shares consist primarily of unvested stock awards and performance shares. (2) There were no anti-dilutive shares excluded from the calculation of diluted earnings per share for the three and six months ended March 31, 2016 and 2015 . |
COMMON STOCK EQUITY (Tables)
COMMON STOCK EQUITY (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Changes in Common Stock Equity | Changes in common stock equity during the six months ended March 31, 2016 , are as follows: (Thousands) Number of Shares Common Stock Premium on Common Stock Accumulated Other Comprehensive (Loss) Income Treasury Stock And Other Retained Earnings Total Balance at September 30, 2015 85,531 $ 220,838 $ 209,931 $ (9,394 ) $ (92,164 ) $ 777,745 $ 1,106,956 Net income 121,975 121,975 Other comprehensive income 8,719 8,719 Common stock issued: Incentive plan 317 795 8,356 9,151 Dividend reinvestment plan 260 (2,271 ) 10,469 8,198 Cash dividend declared ($.48 per share) (41,227 ) (41,227 ) Treasury stock and other (139 ) (55 ) (6,235 ) (6,290 ) Balance at March 31, 2016 85,969 $ 221,633 $ 215,961 $ (675 ) $ (87,930 ) $ 858,493 $ 1,207,482 |
Components of Accumulated Other Comprehensive Income, Net of Tax | The following table presents the changes in the components of accumulated other comprehensive income, net of related tax effects: (Thousands) Available for Sale Securities Cash Flow Hedges Postemployment Benefit Obligation Total Balance at September 30, 2015 $ 6,385 $ — $ (15,779 ) $ (9,394 ) Other comprehensive income, net of tax Other comprehensive income (loss), before reclassifications, net of tax of $(5,768), $13, $0, $(5,755) 8,201 (22 ) — 8,179 Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(15), $(349), $(364) — 27 (1) 513 (2) 540 Net current-period other comprehensive income, net of tax of ($5,768), $(2), $(349), $(6,119) 8,201 5 513 8,719 Balance at March 31, 2016 $ 14,586 $ 5 $ (15,266 ) $ (675 ) Balance at September 30, 2014 $ 4,782 $ (93 ) $ (10,283 ) $ (5,594 ) Other comprehensive income (loss), net of tax Other comprehensive income (loss), before reclassifications, net of tax of $(75), $149, $0, $74 109 (256 ) — (147 ) Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(199), $(337), $(536) — 343 (1) 486 (2) 829 Net current-period other comprehensive income, net of tax of $(75), $(50), $(337), $(462) 109 87 486 682 Balance as of March 31, 2015 $ 4,891 $ (6 ) $ (9,797 ) $ (4,912 ) (1) Consists of realized losses related to foreign currency derivatives, which are reclassified to gas purchases on the Unaudited Condensed Consolidated Statements of Operations. (2) Included in the computation of net periodic pension cost, a component of operations and maintenance expense on the Unaudited Condensed Consolidated Statements of Operations. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | A summary of NJR's credit facility and NJNG's commercial paper program and credit facility are as follows: (Thousands) March 31, September 30, Expiration Dates NJR Bank revolving credit facilities (1) $ 425,000 $ 425,000 September 2020 Notes outstanding at end of period $ 115,500 $ 39,350 Weighted average interest rate at end of period 1.36 % 1.17 % Amount available at end of period (2) $ 286,441 $ 369,176 Bank revolving credit facilities (3) $ — $ 100,000 October 2015 Amount available at end of period $ — $ 100,000 NJNG Bank revolving credit facilities (1) $ 250,000 $ 250,000 May 2019 Commercial paper outstanding at end of period $ 37,000 $ 27,000 Weighted average interest rate at end of period .46 % .20 % Amount available at end of period (4) $ 212,269 $ 222,269 (1) Committed credit facilities, which require commitment fees on the unused amounts. (2) Letters of credit outstanding total $23.1 million and $16.5 million as of March 31, 2016 and September 30, 2015 , respectively, which reduces amount available by the same amount. (3) Uncommitted credit facilities, which require no commitment fees. (4) Letters of credit outstanding total $731,000 and $731,000 as of March 31, 2016 and September 30, 2015 , respectively, which reduces the amount available by the same amount. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Benefit Costs | The components of the net periodic cost for pension benefits, including the Company's Pension Equalization Plan, and OPEB costs (principally health care and life insurance) for employees and covered dependents were as follows: Pension OPEB Three Months Ended Six Months Ended Three Months Ended Six Months Ended March 31, March 31, March 31, March 31, (Thousands) 2016 2015 2016 2015 2016 2015 2016 2015 Service cost $ 1,898 $ 1,871 $ 3,796 $ 3,742 $ 1,131 $ 1,064 $ 2,261 $ 2,127 Interest cost 2,835 2,550 5,671 5,100 1,564 1,435 3,128 2,870 Expected return on plan assets (5,030 ) (4,273 ) (10,059 ) (8,545 ) (1,211 ) (1,244 ) (2,422 ) (2,488 ) Recognized actuarial loss 1,821 1,747 3,641 3,492 818 735 1,637 1,471 Prior service cost amortization 27 27 55 55 (91 ) (91 ) (182 ) (182 ) Net periodic benefit cost $ 1,551 $ 1,922 $ 3,104 $ 3,844 $ 2,211 $ 1,899 $ 4,422 $ 3,798 |
COMMITMENTS AND CONTINGENT LI32
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Long-term Purchase Commitment | Commitments as of March 31, 2016 , for natural gas purchases and future demand fees for the next five fiscal year periods are as follows: (Thousands) 2016 2017 2018 2019 2020 Thereafter NJRES: Natural gas purchases $ 151,898 $ 127,345 $ 82,142 $ 49,608 $ — $ — Storage demand fees 21,405 31,439 13,117 6,728 4,953 4,055 Pipeline demand fees 51,496 60,034 24,137 6,158 2,903 3,782 Sub-total NJRES $ 224,799 $ 218,818 $ 119,396 $ 62,494 $ 7,856 $ 7,837 NJNG: Natural gas purchases $ 23,178 $ 62,070 $ 39,166 $ 39,421 $ 41,226 $ 93,884 Storage demand fees 14,495 29,099 22,237 12,834 5,776 — Pipeline demand fees 21,249 64,985 68,736 88,201 89,945 818,494 Sub-total NJNG $ 58,922 $ 156,154 $ 130,139 $ 140,456 $ 136,947 $ 912,378 Total (1) $ 283,721 $ 374,972 $ 249,535 $ 202,950 $ 144,803 $ 920,215 (1) Does not include amounts related to intercompany asset management agreements between NJRES and NJNG. |
BUSINESS SEGMENT AND OTHER OP33
BUSINESS SEGMENT AND OTHER OPERATIONS DATA (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Information related to the Company's various business segments and other operations is detailed below: Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2016 2015 2016 2015 Operating revenues Natural Gas Distribution External customers $ 242,536 $ 374,703 $ 394,142 $ 583,430 Energy Services External customers (1) 316,703 626,107 592,885 1,226,669 Intercompany 3,255 56,097 5,766 59,223 Clean Energy Ventures External customers 7,662 4,068 15,456 10,303 Subtotal 570,156 1,060,975 1,008,249 1,879,625 Home Services and Other External customers 7,292 8,212 15,968 16,812 Intercompany 639 375 1,536 786 Eliminations (3,894 ) (56,472 ) (7,302 ) (60,009 ) Total $ 574,193 $ 1,013,090 $ 1,018,451 $ 1,837,214 Depreciation and amortization Natural Gas Distribution $ 11,598 $ 10,647 $ 22,836 $ 21,192 Energy Services 23 23 46 45 Clean Energy Ventures 5,876 4,297 10,986 7,888 Midstream 2 1 3 3 Subtotal 17,499 14,968 33,871 29,128 Home Services and Other 237 238 464 476 Eliminations 8 (2 ) (109 ) (14 ) Total $ 17,744 $ 15,204 $ 34,226 $ 29,590 Interest income (2) Natural Gas Distribution $ 60 $ 10 $ 128 $ 100 Energy Services — 13 72 13 Clean Energy Ventures — 22 — 22 Midstream 450 242 714 481 Subtotal 510 287 914 616 Home Services and Other 123 201 160 201 Eliminations (580 ) (242 ) (951 ) (481 ) Total $ 53 $ 246 $ 123 $ 336 (1) Includes sales to Canada, which accounted for 2.9 and 4.4 percent of total operating revenues during the six months ended March 31, 2016 and 2015 . (2) Included in other income, net on the Unaudited Condensed Consolidated Statements of Operations. Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2016 2015 2016 2015 Interest expense, net of capitalized interest Natural Gas Distribution $ 4,690 $ 4,388 $ 9,278 $ 8,997 Energy Services 168 288 376 801 Clean Energy Ventures 2,552 1,661 4,605 3,478 Midstream 130 210 172 460 Subtotal 7,540 6,547 14,431 13,736 Home Services and Other 105 (64 ) 105 (58 ) Eliminations (276 ) — (390 ) — Total $ 7,369 $ 6,483 $ 14,146 $ 13,678 Income tax provision (benefit) Natural Gas Distribution $ 22,710 $ 23,778 $ 36,573 $ 37,944 Energy Services 7,805 3,923 13,000 49,800 Clean Energy Ventures (13,915 ) (9,042 ) (25,502 ) (28,763 ) Midstream 1,530 1,819 3,170 3,311 Subtotal 18,130 20,478 27,241 62,292 Home Services and Other (1,456 ) (972 ) (1,744 ) (1,424 ) Eliminations 1,166 638 700 143 Total $ 17,840 $ 20,144 $ 26,197 $ 61,011 Equity in earnings of affiliates Midstream $ 3,508 $ 4,581 $ 7,053 $ 8,356 Eliminations (1,106 ) (994 ) (2,245 ) (1,974 ) Total $ 2,402 $ 3,587 $ 4,808 $ 6,382 Net financial earnings Natural Gas Distribution $ 48,961 $ 48,594 $ 79,531 $ 76,780 Energy Services 17,005 36,316 27,019 52,752 Clean Energy Ventures 11,806 13,010 19,311 22,018 Midstream 2,228 2,604 4,572 4,724 Subtotal 80,000 100,524 130,433 156,274 Home Services and Other (2,040 ) (1,359 ) (2,623 ) (1,951 ) Eliminations (80 ) (22 ) (298 ) (70 ) Total $ 77,880 $ 99,143 $ 127,512 $ 154,253 Capital expenditures Natural Gas Distribution $ 47,366 $ 33,243 $ 96,406 $ 69,991 Clean Energy Ventures 25,876 33,025 70,882 88,370 Subtotal 73,242 66,268 167,288 158,361 Home Services and Other 272 50 1,069 61 Total $ 73,514 $ 66,318 $ 168,357 $ 158,422 Investments in equity investees Midstream $ 3,102 $ 717 $ 5,948 $ 1,264 Total $ 3,102 $ 717 $ 5,948 $ 1,264 |
Reconciliation of Consolidated NFE to Consolidated Net Income | A reconciliation of consolidated NFE to consolidated net income is as follows: Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2016 2015 2016 2015 Net financial earnings $ 77,880 $ 99,143 $ 127,512 $ 154,253 Less: Unrealized loss (gain) on derivative instruments and related transactions 3,170 68,474 2,035 (20,198 ) Effects of economic hedging related to natural gas inventory (1,054 ) (23,450 ) 2,759 (32,215 ) Tax adjustments 2,436 (6,784 ) 743 22,443 Net income $ 73,328 $ 60,903 $ 121,975 $ 184,223 |
Reconciliation of Assets from Segment to Consolidated | The Company's assets for the various business segments and business operations are detailed below: (Thousands) March 31, September 30, Assets at end of period: Natural Gas Distribution $ 2,372,033 $ 2,305,293 Energy Services 243,989 260,021 Clean Energy Ventures 566,582 504,885 Midstream 199,703 182,007 Subtotal 3,382,307 3,252,206 Home Services and Other 106,541 88,880 Intercompany assets (1) (69,254 ) (56,729 ) Total $ 3,419,594 $ 3,284,357 (1) Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation. |
NATURE OF THE BUSINESS (Details
NATURE OF THE BUSINESS (Details) shares in Thousands | 6 Months Ended |
Mar. 31, 2016subsidiarycustomershares | |
Common Units [Member] | |
Nature of Business [Line Items] | |
Ownership interest exchanged (in shares) | shares | 1,840 |
Steckman Ridge [Member] | |
Nature of Business [Line Items] | |
Equity method investment, ownership percentage | 50.00% |
PennEast [Member] | |
Nature of Business [Line Items] | |
Equity method investment, ownership percentage | 20.00% |
NJNG [Member] | |
Nature of Business [Line Items] | |
Total retail customers | customer | 519,100 |
NJR Retail Holdings Corporation [Member] | |
Nature of Business [Line Items] | |
Number of principal subsidiaries | subsidiary | 2 |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - GAS IN STORAGE (Details) $ in Thousands | Mar. 31, 2016USD ($)Bcf | Sep. 30, 2015USD ($)Bcf |
Inventory [Line Items] | ||
Gas in Storage | $ | $ 117,490 | $ 163,905 |
Bcf | Bcf | 61.6 | 66 |
NJRES [Member] | ||
Inventory [Line Items] | ||
Gas in Storage | $ | $ 89,514 | $ 93,696 |
Bcf | Bcf | 52.3 | 44.6 |
NJNG [Member] | ||
Inventory [Line Items] | ||
Gas in Storage | $ | $ 27,976 | $ 70,209 |
Bcf | Bcf | 9.3 | 21.4 |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SALES TAX ACCOUNTING (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accounting Policies [Abstract] | ||
Sales tax | $ 20.7 | $ 34 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - AVAILABLE FOR SALE SECURITIES (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Sep. 30, 2015 | |
Investment [Line Items] | ||
Available for sale securities | $ 73,444 | $ 59,475 |
Unrealized gain | 24,800 | 10,800 |
Unrealized gain, net of tax | $ 14,600 | $ 6,400 |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CUSTOMER ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Billed | $ 148,822 | $ 155,273 | |
Receivable by subsidiary, percentage | 100.00% | 100.00% | |
Unbilled revenues | $ 27,144 | $ 6,372 | |
NJRES [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Billed | $ 75,691 | $ 107,461 | |
Receivable by subsidiary, percentage | 51.00% | 69.00% | |
NJNG [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Billed | [1] | $ 67,080 | $ 41,130 |
Receivable by subsidiary, percentage | [1] | 45.00% | 26.00% |
NJRCEV [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Billed | $ 1,975 | $ 1,084 | |
Receivable by subsidiary, percentage | 1.00% | 1.00% | |
NJRHS and Other [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Billed | $ 4,076 | $ 5,598 | |
Receivable by subsidiary, percentage | 3.00% | 4.00% | |
[1] | Does not include unbilled revenues of $27.1 million and $6.4 million as of March 31, 2016 and September 30, 2015, respectively. |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - LOAN RECEIVABLE (Details) - USD ($) | 6 Months Ended | |
Mar. 31, 2016 | Sep. 30, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable in other current assets | $ 7,500,000 | $ 6,200,000 |
Loans receivable in other noncurrent assets | $ 40,200,000 | 36,200,000 |
Threshold period in establishing allowance for doubtful accounts | 60 days | |
Allowance for doubtful accounts | $ 0 | $ 0 |
Minimum [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loan term | 2 years | |
Maximum [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loan term | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NEW ACCOUNTING STANDARD (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
Assets | ||
Deferred taxes (current) | $ 0 | |
Total current assets | $ 459,861 | 488,215 |
Other noncurrent assets | 69,305 | 61,915 |
Total noncurrent assets | 717,075 | 667,881 |
Total assets | 3,419,594 | 3,284,357 |
Capitalization and Liabilities | ||
Deferred income taxes | 464,343 | 444,935 |
Total noncurrent liabilities | 889,854 | 897,706 |
Total capitalization and liabilities | $ 3,419,594 | 3,284,357 |
As Previously Reported [Member] | ||
Assets | ||
Deferred taxes (current) | 56,296 | |
Total current assets | 544,511 | |
Other noncurrent assets | 60,300 | |
Total noncurrent assets | 666,266 | |
Total assets | 3,339,038 | |
Capitalization and Liabilities | ||
Deferred income taxes | 499,616 | |
Total noncurrent liabilities | 952,387 | |
Total capitalization and liabilities | 3,339,038 | |
Effect of Change [Member] | ||
Assets | ||
Deferred taxes (current) | (56,296) | |
Total current assets | (56,296) | |
Other noncurrent assets | 1,615 | |
Total noncurrent assets | 1,615 | |
Total assets | (54,681) | |
Capitalization and Liabilities | ||
Deferred income taxes | (54,681) | |
Total noncurrent liabilities | (54,681) | |
Total capitalization and liabilities | $ (54,681) |
REGULATION - REGULATORY ASSETS
REGULATION - REGULATORY ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | $ 32,638 | $ 24,258 |
Regulatory assets-noncurrent | 436,178 | 410,155 |
Regulatory liability-current | 0 | 12,154 |
Regulatory liabilities-noncurrent | 61,333 | 67,533 |
Conservation Incentive Program [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liability-current | 0 | 5,167 |
Overrecovered Gas Costs [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liability-current | 0 | 6,987 |
Cost of Removal Obligation [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liabilities-noncurrent | 46,348 | 54,880 |
New Jersey Clean Energy Program [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liabilities-noncurrent | 14,087 | 11,956 |
Other Noncurrent Regulatory Liabilities [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liabilities-noncurrent | 898 | 697 |
Conservation Incentive Program [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 3,190 | 0 |
Regulatory assets-noncurrent | 28,686 | 0 |
New Jersey Clean Energy Program [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 5,586 | 14,293 |
Underrecovered Gas Costs [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 5,052 | 0 |
Derivatives at Fair Value, Net [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 18,810 | 9,965 |
Regulatory assets-noncurrent | 12,932 | 5,153 |
Environmental Remediation Costs Expended, Net of Recoveries [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 16,122 | 18,886 |
Environmental Remediation Costs Liability for Future Expenditures [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 178,512 | 180,400 |
Deferred Income Taxes [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 18,956 | 17,460 |
SAVEGREEN [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 23,009 | 26,882 |
Postemployment and Other Benefit Costs [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 136,346 | 140,636 |
Deferred Superstorm Sandy Costs [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 15,201 | 15,201 |
Other Noncurrent Regulatory Assets [Member] | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | $ 6,414 | $ 5,537 |
REGULATION - REGULATORY FILINGS
REGULATION - REGULATORY FILINGS (Details) - USD ($) $ in Millions | Dec. 24, 2015 | Nov. 13, 2015 | Oct. 15, 2015 | Mar. 31, 2016 |
Schedule of Regulatory [Line Items] | ||||
Bill credits issued during the period | $ 61.6 | |||
Increase in base tariff rates | $ 147.6 | |||
NJ RISE Program [Member] | ||||
Schedule of Regulatory [Line Items] | ||||
Increase (decrease) in approved rate, percentage | 0.07% | |||
NJCEP [Member] | ||||
Schedule of Regulatory [Line Items] | ||||
Increase (decrease) in approved rate, percentage | (0.80%) | |||
CIP [Member] | ||||
Schedule of Regulatory [Line Items] | ||||
Increase in average residential heat customer's bill (as a percent) | 0.08% |
DERIVATIVE INSTRUMENTS - BALANC
DERIVATIVE INSTRUMENTS - BALANCE SHEET RELATED DISCLOSURES (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 01, 2015 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Benchmark interest rate | 3.26% | ||
Notional amount of foreign currency derivatives | $ 125,000 | ||
Fair Value | |||
Derivative assets, current | $ 54,803 | $ 40,743 | |
Derivative liabilities, current | 53,735 | 32,791 | |
Derivative assets, noncurrent | 1,174 | 4,334 | |
Derivative liabilities, noncurrent | 13,913 | 5,529 | |
Derivative assets | 55,977 | 45,087 | |
Derivative liabilities | 67,648 | 38,330 | |
Not Designated as Hedging Instrument [Member] | |||
Fair Value | |||
Derivative assets | 55,970 | 45,087 | |
Derivative liabilities | 67,648 | 38,330 | |
NJRES [Member] | Designated as Hedging Instrument [Member] | Foreign Currency Contracts [Member] | |||
Fair Value | |||
Derivative assets, current | 7 | 0 | |
Derivative liabilities, current | 0 | 0 | |
Derivative assets | 7 | 0 | |
Derivative liabilities | 0 | 0 | |
NJRES [Member] | Not Designated as Hedging Instrument [Member] | Physical Commodity Contracts [Member] | |||
Fair Value | |||
Derivative assets, current | 5,245 | 4,854 | |
Derivative liabilities, current | 8,892 | 9,281 | |
Derivative assets, noncurrent | 914 | 1,718 | |
Derivative liabilities, noncurrent | 158 | 0 | |
NJRES [Member] | Not Designated as Hedging Instrument [Member] | Financial Commodity Contracts [Member] | |||
Fair Value | |||
Derivative assets, current | 47,241 | 35,682 | |
Derivative liabilities, current | 23,739 | 13,347 | |
Derivative assets, noncurrent | 260 | 2,626 | |
Derivative liabilities, noncurrent | 823 | 386 | |
NJNG [Member] | Interest Rate Contracts [Member] | |||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Notional amount of foreign currency derivatives | 125,000 | 125,000 | |
NJNG [Member] | Not Designated as Hedging Instrument [Member] | Physical Commodity Contracts [Member] | |||
Fair Value | |||
Derivative assets, current | 58 | 0 | |
Derivative liabilities, current | 90 | 0 | |
NJNG [Member] | Not Designated as Hedging Instrument [Member] | Financial Commodity Contracts [Member] | |||
Fair Value | |||
Derivative assets, current | 2,252 | 207 | |
Derivative liabilities, current | 21,014 | 10,163 | |
Derivative assets, noncurrent | 0 | 0 | |
Derivative liabilities, noncurrent | 0 | 925 | |
NJNG [Member] | Not Designated as Hedging Instrument [Member] | Interest Rate Contracts [Member] | |||
Fair Value | |||
Derivative assets, noncurrent | 0 | 0 | |
Derivative liabilities, noncurrent | 12,932 | $ 4,228 | |
First Mortgage [Member] | Series Ll [Member] | NJNG [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Debt issued | $ 125,000 | ||
Interest rate, stated percentage | 5.60% |
DERIVATIVE INSTRUMENTS - OFFSET
DERIVATIVE INSTRUMENTS - OFFSETTING OF ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 | |
NJRES [Member] | |||
Derivative assets: | |||
Amounts Presented in Balance Sheets | [1] | $ 53,667 | $ 44,870 |
Offsetting Derivative Instruments | [2] | (20,668) | (15,060) |
Financial Collateral Received/Pledged | [3] | (13,846) | 3,841 |
Net Amounts | [4] | 19,153 | 33,651 |
Derivative liabilities: | |||
Amounts Presented in Balance Sheets | [1] | 33,612 | 23,004 |
Offsetting Derivative Instruments | [2] | (20,669) | (15,059) |
Financial Collateral Received/Pledged | [3] | (6,438) | (1,200) |
Net Amounts | [4] | 6,505 | 6,745 |
NJRES [Member] | Physical Commodity Contracts [Member] | |||
Derivative assets: | |||
Amounts Presented in Balance Sheets | [1] | 6,159 | 6,562 |
Offsetting Derivative Instruments | [2] | (1,344) | (1,326) |
Financial Collateral Received/Pledged | [3] | (1,000) | 0 |
Net Amounts | [4] | 3,815 | 5,236 |
Derivative liabilities: | |||
Amounts Presented in Balance Sheets | [1] | 9,050 | 9,271 |
Offsetting Derivative Instruments | [2] | (1,345) | (1,326) |
Financial Collateral Received/Pledged | [3] | (1,200) | (1,200) |
Net Amounts | [4] | 6,505 | 6,745 |
NJRES [Member] | Financial Commodity Contracts [Member] | |||
Derivative assets: | |||
Amounts Presented in Balance Sheets | [1] | 47,501 | 38,308 |
Offsetting Derivative Instruments | [2] | (19,324) | (13,734) |
Financial Collateral Received/Pledged | [3] | (12,846) | 3,841 |
Net Amounts | [4] | 15,331 | 28,415 |
Derivative liabilities: | |||
Amounts Presented in Balance Sheets | [1] | 24,562 | 13,733 |
Offsetting Derivative Instruments | [2] | (19,324) | (13,733) |
Financial Collateral Received/Pledged | [3] | (5,238) | 0 |
Net Amounts | [4] | 0 | 0 |
NJRES [Member] | Foreign Currency Contracts [Member] | |||
Derivative assets: | |||
Amounts Presented in Balance Sheets | [1] | 7 | |
Offsetting Derivative Instruments | [2] | 0 | |
Financial Collateral Received/Pledged | [3] | 0 | |
Net Amounts | [4] | 7 | |
NJNG [Member] | |||
Derivative assets: | |||
Amounts Presented in Balance Sheets | [1] | 2,310 | |
Offsetting Derivative Instruments | [2] | (2,253) | |
Financial Collateral Received/Pledged | [3] | 0 | |
Net Amounts | [4] | 57 | |
Derivative liabilities: | |||
Amounts Presented in Balance Sheets | [1] | 34,036 | 15,316 |
Offsetting Derivative Instruments | [2] | (2,253) | (207) |
Financial Collateral Received/Pledged | [3] | (18,762) | (10,881) |
Net Amounts | [4] | 13,021 | 4,228 |
NJNG [Member] | Physical Commodity Contracts [Member] | |||
Derivative assets: | |||
Amounts Presented in Balance Sheets | [1] | 58 | |
Offsetting Derivative Instruments | [2] | (1) | |
Financial Collateral Received/Pledged | [3] | 0 | |
Net Amounts | [4] | 57 | |
Derivative liabilities: | |||
Amounts Presented in Balance Sheets | [1] | 90 | |
Offsetting Derivative Instruments | [2] | (1) | |
Financial Collateral Received/Pledged | [3] | 0 | |
Net Amounts | [4] | 89 | |
NJNG [Member] | Financial Commodity Contracts [Member] | |||
Derivative assets: | |||
Amounts Presented in Balance Sheets | [1] | 2,252 | 207 |
Offsetting Derivative Instruments | [2] | (2,252) | (207) |
Financial Collateral Received/Pledged | [3] | 0 | 0 |
Net Amounts | [4] | 0 | 0 |
Derivative liabilities: | |||
Amounts Presented in Balance Sheets | [1] | 21,014 | 11,088 |
Offsetting Derivative Instruments | [2] | (2,252) | (207) |
Financial Collateral Received/Pledged | [3] | (18,762) | (10,881) |
Net Amounts | [4] | 0 | 0 |
NJNG [Member] | Interest Rate Contracts [Member] | |||
Derivative liabilities: | |||
Amounts Presented in Balance Sheets | [1] | 12,932 | 4,228 |
Offsetting Derivative Instruments | [2] | 0 | 0 |
Financial Collateral Received/Pledged | [3] | 0 | 0 |
Net Amounts | [4] | $ 12,932 | $ 4,228 |
[1] | Derivative assets and liabilities are presented on a gross basis in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20. | ||
[2] | Offsetting derivative instruments include: transactions with NAESB netting election, transactions held by FCM's with net margining and transactions with ISDA netting. | ||
[3] | Financial collateral includes cash balances at FCMs as well as cash received from or pledged to other counterparties. | ||
[4] | Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20. |
DERIVATIVE INSTRUMENTS - INCOME
DERIVATIVE INSTRUMENTS - INCOME STATEMENT RELATED DISCLOSURES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Foreign Currency Contracts [Member] | Gas Purchases [Member] | Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | $ 29 | $ (381) | $ (35) | $ (405) |
Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion) | 30 | 567 | 42 | 542 |
Amount of Gain or (Loss) Recognized on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | 0 | 0 | 0 | 0 |
NJRES [Member] | Not Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | 25,365 | (18,285) | 57,278 | 95,671 |
NJRES [Member] | Not Designated as Hedging Instrument [Member] | Physical Commodity Contracts [Member] | Operating Revenues [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | 9,128 | (1,144) | 21,002 | 14,947 |
NJRES [Member] | Not Designated as Hedging Instrument [Member] | Physical Commodity Contracts [Member] | Gas Purchases [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | (5,583) | 10,063 | (26,820) | (9,793) |
NJRES [Member] | Not Designated as Hedging Instrument [Member] | Financial Commodity Contracts [Member] | Gas Purchases [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | 21,820 | (27,204) | 63,096 | 90,517 |
NJNG [Member] | Physical Commodity Contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative instruments, gain (loss) recognized in regulatory assets and liabilities | (14,500) | (14,500) | ||
NJNG [Member] | Financial Commodity Contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative instruments, gain (loss) recognized in regulatory assets and liabilities | (5,200) | $ (5,500) | (10,800) | $ (24,500) |
NJNG [Member] | Treasury Lock [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative instruments, gain (loss) recognized in regulatory assets and liabilities | $ (11,100) | $ (8,700) |
DERIVATIVE INSTRUMENTS - VOLUME
DERIVATIVE INSTRUMENTS - VOLUME (Details) MWh in Thousands, $ in Millions | Mar. 31, 2016USD ($)BcfMWh | Sep. 30, 2015USD ($)Bcf | Jun. 01, 2015USD ($) | |
Derivative [Line Items] | ||||
Notional amount | $ | $ 125 | |||
NJNG [Member] | Treasury Lock [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | $ | $ 125 | $ 125 | ||
NJNG [Member] | Long [Member] | Futures [Member] | ||||
Derivative [Line Items] | ||||
Volume | [1] | 15.2 | 25.8 | |
NJNG [Member] | Long [Member] | Physical [Member] | ||||
Derivative [Line Items] | ||||
Volume | 5.9 | 0 | ||
NJRES [Member] | SREC [Member] | ||||
Derivative [Line Items] | ||||
Volume | MWh | [2] | 48 | ||
NJRES [Member] | Long [Member] | Physical [Member] | ||||
Derivative [Line Items] | ||||
Volume | [2] | 137.4 | 48.2 | |
NJRES [Member] | Long [Member] | Options [Member] | ||||
Derivative [Line Items] | ||||
Volume | 3.6 | 1.2 | ||
NJRES [Member] | Short [Member] | Futures [Member] | ||||
Derivative [Line Items] | ||||
Volume | 88.6 | 91.1 | ||
[1] | Not included is the notional amount of $125 million related to NJNG’s treasury lock agreement. | |||
[2] | Not included are 48,000 SRECs that are open as of March 31, 2016. |
DERIVATIVE INSTRUMENTS - BROKER
DERIVATIVE INSTRUMENTS - BROKER MARGIN DEPOSITS (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 |
Derivative [Line Items] | ||
Broker margin - Current assets | $ 34,156 | $ 12,990 |
Broker margin - Current (liabilities) | (12,798) | (4,103) |
NJNG [Member] | ||
Derivative [Line Items] | ||
Broker margin - Current assets | 20,235 | 12,990 |
NJRES [Member] | ||
Derivative [Line Items] | ||
Broker margin - Current assets | 13,921 | 0 |
Broker margin - Current (liabilities) | $ (12,798) | $ (4,103) |
DERIVATIVE INSTRUMENTS - CREDIT
DERIVATIVE INSTRUMENTS - CREDIT RISK EXPOSURE (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2016 | Sep. 30, 2015 | |
Credit Risk Exposure [Line Items] | ||
Gross Credit Exposure | $ 117,531 | |
Derivative, net liability position, aggregate fair value | 13,000 | $ 4,200 |
Additional collateral, aggregate fair value | 13,000 | $ 4,200 |
Investment Grade [Member] | ||
Credit Risk Exposure [Line Items] | ||
Gross Credit Exposure | 84,613 | |
Noninvestment Grade [Member] | ||
Credit Risk Exposure [Line Items] | ||
Gross Credit Exposure | 8,407 | |
Internally Rated Investment Grade [Member] | ||
Credit Risk Exposure [Line Items] | ||
Gross Credit Exposure | 11,537 | |
Internally Rated Noninvestment Grade [Member] | ||
Credit Risk Exposure [Line Items] | ||
Gross Credit Exposure | $ 12,974 |
FAIR VALUE - DEBT (Details)
FAIR VALUE - DEBT (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Capital leases | $ 48,200 | $ 46,900 | |
Level 2 [Member] | Carrying Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt, fair value | [1] | 807,845 | 807,845 |
Level 2 [Member] | Fair Market Value [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt, fair value | $ 832,202 | $ 817,319 | |
[1] | Excludes capital leases of $48.2 million and $46.9 million as of March 31, 2016 and September 30, 2015, respectively. |
FAIR VALUE - HIERARCHY (Details
FAIR VALUE - HIERARCHY (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | $ 55,977 | $ 45,087 | |
Liabilities | 67,648 | 38,330 | |
Fair Value, Measurements, Recurring [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available for sale equity securities - energy industry | 73,444 | 59,475 | |
Other | [1] | 1,607 | 1,572 |
Total assets at fair value | 131,028 | 106,134 | |
Total liabilities at fair value | 67,648 | 38,330 | |
Fair Value, Measurements, Recurring [Member] | Physical Commodity Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 6,217 | 6,572 | |
Liabilities | 9,140 | 9,281 | |
Fair Value, Measurements, Recurring [Member] | Financial Commodity Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 49,753 | 38,515 | |
Liabilities | 45,576 | 24,821 | |
Fair Value, Measurements, Recurring [Member] | Financial Commodity Contracts - Foreign Exchange [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 7 | ||
Fair Value, Measurements, Recurring [Member] | Interest Rate Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 12,932 | 4,228 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets, (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available for sale equity securities - energy industry | 73,444 | 59,475 | |
Other | [1] | 1,607 | 1,572 |
Total assets at fair value | 124,804 | 99,562 | |
Total liabilities at fair value | 45,576 | 24,821 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets, (Level 1) [Member] | Physical Commodity Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Liabilities | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets, (Level 1) [Member] | Financial Commodity Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 49,753 | 38,515 | |
Liabilities | 45,576 | 24,821 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets, (Level 1) [Member] | Financial Commodity Contracts - Foreign Exchange [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | ||
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets, (Level 1) [Member] | Interest Rate Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available for sale equity securities - energy industry | 0 | 0 | |
Other | [1] | 0 | 0 |
Total assets at fair value | 6,224 | 6,572 | |
Total liabilities at fair value | 22,072 | 13,509 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Physical Commodity Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 6,217 | 6,572 | |
Liabilities | 9,140 | 9,281 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Financial Commodity Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Liabilities | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Financial Commodity Contracts - Foreign Exchange [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 7 | ||
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Interest Rate Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 12,932 | 4,228 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Available for sale equity securities - energy industry | 0 | 0 | |
Other | [1] | 0 | 0 |
Total assets at fair value | 0 | 0 | |
Total liabilities at fair value | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Physical Commodity Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Liabilities | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Financial Commodity Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | 0 | |
Liabilities | 0 | 0 | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Financial Commodity Contracts - Foreign Exchange [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets | 0 | ||
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | Interest Rate Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | $ 0 | $ 0 | |
[1] | Includes various money market funds. |
INVESTMENTS IN EQUITY INVESTE51
INVESTMENTS IN EQUITY INVESTEES (Details) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2016USD ($)mi | Sep. 30, 2015USD ($) | ||
Schedule of Equity Method Investments [Line Items] | |||
Investments in equity investees | $ 136,974 | $ 132,002 | |
Steckman Ridge [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments in equity investees | [1] | 124,446 | 125,649 |
Steckman Ridge [Member] | Equity Method Investee [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Total outstanding principal balance of loans | 70,400 | 70,400 | |
PennEast [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments in equity investees | $ 12,528 | $ 6,353 | |
Construction plan, project area (in miles) | mi | 118 | ||
[1] | Includes loans with a total outstanding principal balance of $70.4 million for both March 31, 2016 and September 30, 2015. The loans accrue interest at a variable rate that resets quarterly and are due October 1, 2023. |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |||
Earnings Per Share [Abstract] | ||||||
Net income, as reported | $ 73,328 | $ 60,903 | $ 121,975 | $ 184,223 | ||
Basic earnings per share | ||||||
Weighted average shares of common stock outstanding-basic (shares) | 85,834,000 | 85,328,000 | 85,754,000 | 84,940,000 | ||
Basic earnings per common share (usd per share) | $ 0.85 | $ 0.71 | $ 1.42 | $ 2.17 | ||
Diluted earnings per share | ||||||
Weighted average shares of common stock outstanding-basic (shares) | 85,834,000 | 85,328,000 | 85,754,000 | 84,940,000 | ||
Incremental shares | 1,024,000 | 1,042,000 | 1,024,000 | [1] | 1,042,000 | [1] |
Weighted average shares of common stock outstanding-diluted (shares) | 86,858,000 | 86,370,000 | 86,778,000 | 85,982,000 | ||
Diluted earnings per common share (usd per share) | $ 0.84 | $ 0.71 | $ 1.41 | [2] | $ 2.14 | [2] |
Anti-dilutive shares excluded from the calculation of diluted earnings per share | 0 | 0 | 0 | 0 | ||
[1] | Incremental shares consist primarily of unvested stock awards and performance shares. | |||||
[2] | There were no anti-dilutive shares excluded from the calculation of diluted earnings per share for the three and six months ended March 31, 2016 and 2015. |
COMMON STOCK EQUITY - CHANGE IN
COMMON STOCK EQUITY - CHANGE IN COMMON STOCK EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 14, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period (shares) | 85,531,423 | ||||
Balance as of beginning of period | $ 1,106,956 | ||||
Net income | $ 73,328 | $ 60,903 | 121,975 | $ 184,223 | |
Other comprehensive income | $ 4,795 | $ (193) | 8,719 | $ 682 | |
Common stock issued: | |||||
Incentive plan | $ 9,151 | ||||
Dividend reinvestment plan (in shares) | 5,000,000 | 260,000 | 279,000 | ||
Dividend reinvestment plan | $ 8,198 | ||||
Cash dividend declared ($.48 per share) | (41,227) | ||||
Treasury stock and other | $ (6,290) | ||||
Balance as of end of period (shares) | 85,968,887 | 85,968,887 | |||
Balance as of end of period | $ 1,207,482 | $ 1,207,482 | |||
Cash dividend declared per share (usd per share) | $ 0.24 | $ 0.23 | $ 0.48 | $ 0.45 | |
Common Stock [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period (shares) | 85,531,000 | ||||
Balance as of beginning of period | $ 220,838 | ||||
Common stock issued: | |||||
Incentive plan (in shares) | 317,000 | ||||
Incentive plan | $ 795 | ||||
Dividend reinvestment plan (in shares) | 260,000 | ||||
Treasury stock and other (shares) | (139,000) | ||||
Balance as of end of period (shares) | 85,969,000 | 85,969,000 | |||
Balance as of end of period | $ 221,633 | $ 221,633 | |||
Premium on Common Stock [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period | 209,931 | ||||
Common stock issued: | |||||
Incentive plan | 8,356 | ||||
Dividend reinvestment plan | (2,271) | ||||
Treasury stock and other | (55) | ||||
Balance as of end of period | 215,961 | 215,961 | |||
Accumulated Other Comprehensive (Loss) Income [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period | (9,394) | $ (5,594) | |||
Other comprehensive income | 8,719 | 682 | |||
Common stock issued: | |||||
Balance as of end of period | (675) | $ (4,912) | (675) | $ (4,912) | |
Treasury Stock And Other [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period | (92,164) | ||||
Common stock issued: | |||||
Dividend reinvestment plan | 10,469 | ||||
Treasury stock and other | (6,235) | ||||
Balance as of end of period | (87,930) | (87,930) | |||
Retained Earnings [Member] | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period | 777,745 | ||||
Net income | 121,975 | ||||
Common stock issued: | |||||
Cash dividend declared ($.48 per share) | (41,227) | ||||
Balance as of end of period | $ 858,493 | $ 858,493 |
COMMON STOCK EQUITY - COMMON ST
COMMON STOCK EQUITY - COMMON STOCK EQUITY NARRATIVE (Details) - USD ($) $ in Millions | Dec. 14, 2015 | Mar. 31, 2016 | Mar. 31, 2015 |
Equity [Abstract] | |||
Number of treasury shares issued from raising of equity through the DRP | 5,000,000 | 260,000 | 279,000 |
Equity raised through the DRP | $ 8.2 | $ 7.7 | |
Additional equity raised | $ 19.8 | ||
Additional shares issued through the waiver discount feature of the DRP | 0 | 688,000 |
COMMON STOCK EQUITY - ACCUMULAT
COMMON STOCK EQUITY - ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | ||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | |||||
Balance as of beginning of period | $ 1,106,956 | ||||
Other comprehensive income (loss) | $ 4,795 | $ (193) | 8,719 | $ 682 | |
Balance as of end of period | 1,207,482 | 1,207,482 | |||
Available for Sale Securities [Member] | |||||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | |||||
Balance as of beginning of period | 6,385 | 4,782 | |||
Other comprehensive income (loss), before reclassifications, net of tax | 8,201 | 109 | |||
Amounts reclassified from accumulated other comprehensive income, net of tax | 0 | 0 | |||
Other comprehensive income (loss) | 8,201 | 109 | |||
Balance as of end of period | 14,586 | 4,891 | 14,586 | 4,891 | |
Tax on other comprehensive income (loss) before reclassifications | 5,768 | 75 | |||
Tax on amounts reclassified from accumulated other comprehensive income | 0 | 0 | |||
Tax on net current-period other comprehensive income (loss) | 5,768 | 75 | |||
Cash Flow Hedges [Member] | |||||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | |||||
Balance as of beginning of period | 0 | (93) | |||
Other comprehensive income (loss), before reclassifications, net of tax | (22) | (256) | |||
Amounts reclassified from accumulated other comprehensive income, net of tax | [1] | 27 | 343 | ||
Other comprehensive income (loss) | 5 | 87 | |||
Balance as of end of period | 5 | (6) | 5 | (6) | |
Tax on other comprehensive income (loss) before reclassifications | (13) | (149) | |||
Tax on amounts reclassified from accumulated other comprehensive income | 15 | 199 | |||
Tax on net current-period other comprehensive income (loss) | 2 | 50 | |||
Postemployment Benefit Obligation [Member] | |||||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | |||||
Balance as of beginning of period | (15,779) | (10,283) | |||
Other comprehensive income (loss), before reclassifications, net of tax | 0 | 0 | |||
Amounts reclassified from accumulated other comprehensive income, net of tax | [2] | 513 | 486 | ||
Other comprehensive income (loss) | 513 | 486 | |||
Balance as of end of period | (15,266) | (9,797) | (15,266) | (9,797) | |
Tax on other comprehensive income (loss) before reclassifications | 0 | 0 | |||
Tax on amounts reclassified from accumulated other comprehensive income | 349 | 337 | |||
Tax on net current-period other comprehensive income (loss) | 349 | 337 | |||
Total [Member] | |||||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | |||||
Balance as of beginning of period | (9,394) | (5,594) | |||
Other comprehensive income (loss), before reclassifications, net of tax | 8,179 | (147) | |||
Amounts reclassified from accumulated other comprehensive income, net of tax | 540 | 829 | |||
Other comprehensive income (loss) | 8,719 | 682 | |||
Balance as of end of period | $ (675) | $ (4,912) | (675) | (4,912) | |
Tax on other comprehensive income (loss) before reclassifications | 5,755 | (74) | |||
Tax on amounts reclassified from accumulated other comprehensive income | 364 | 536 | |||
Tax on net current-period other comprehensive income (loss) | $ 6,119 | $ 462 | |||
[1] | Consists of realized losses related to foreign currency derivatives, which are reclassified to gas purchases on the Unaudited Condensed Consolidated Statements of Operations. | ||||
[2] | Included in the computation of net periodic pension cost, a component of operations and maintenance expense on the Unaudited Condensed Consolidated Statements of Operations. |
DEBT - CREDIT FACILITIES (Detai
DEBT - CREDIT FACILITIES (Details) - USD ($) | Mar. 31, 2016 | Sep. 30, 2015 | |
NJR [Member] | Letter of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Letters of credit outstanding, amount | $ 23,100,000 | $ 16,500,000 | |
NJR [Member] | Notes [Member] | |||
Line of Credit Facility [Line Items] | |||
Amount outstanding at end of period | $ 115,500,000 | $ 39,350,000 | |
Weighted average interest rate at end of period | 1.36% | 1.17% | |
Amount available at end of period | [1] | $ 286,441,000 | $ 369,176,000 |
NJR [Member] | Revolving Credit Facility [Member] | |||
Line of Credit Facility [Line Items] | |||
Amount available at end of period | 0 | 100,000,000 | |
NJR [Member] | Revolving Credit Facility [Member] | Committed Credit Facilities Due September 2020 [Member] | |||
Line of Credit Facility [Line Items] | |||
Bank revolving credit facilities | [2] | 425,000,000 | 425,000,000 |
NJR [Member] | Revolving Credit Facility [Member] | Uncommitted Credit Facilities Due October 2015 [Member] | |||
Line of Credit Facility [Line Items] | |||
Bank revolving credit facilities | [3] | 0 | 100,000,000 |
NJNG [Member] | Commercial Paper [Member] | |||
Line of Credit Facility [Line Items] | |||
Amount outstanding at end of period | $ 37,000,000 | $ 27,000,000 | |
Weighted average interest rate at end of period | 0.46% | 0.20% | |
Amount available at end of period | [4] | $ 212,269,000 | $ 222,269,000 |
NJNG [Member] | Letter of Credit [Member] | |||
Line of Credit Facility [Line Items] | |||
Letters of credit outstanding, amount | 731,000 | 731,000 | |
NJNG [Member] | Revolving Credit Facility [Member] | Committed Credit Facilities Due May 2019 [Member] | |||
Line of Credit Facility [Line Items] | |||
Bank revolving credit facilities | [2] | $ 250,000,000 | $ 250,000,000 |
[1] | Letters of credit outstanding total $23.1 million and $16.5 million as of March 31, 2016 and September 30, 2015, respectively, which reduces amount available by the same amount. | ||
[2] | Committed credit facilities, which require commitment fees on the unused amounts. | ||
[3] | Uncommitted credit facilities, which require no commitment fees. | ||
[4] | Letters of credit outstanding total $731,000 and $731,000 as of March 31, 2016 and September 30, 2015, respectively, which reduces the amount available by the same amount. |
DEBT - SCHEDULE OF LONG TERM DE
DEBT - SCHEDULE OF LONG TERM DEBT (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 22, 2016 | |
Debt Instrument [Line Items] | |||
Proceeds from sale-leaseback transaction | $ 7,107 | $ 7,216 | |
NJR [Member] | Unsecured senior note 3.2% [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 50,000 | ||
Interest rate, stated percentage | 3.20% | ||
NJR [Member] | Unsecured senior note 3.54% [Member] | |||
Debt Instrument [Line Items] | |||
Senior notes | $ 100,000 | ||
Interest rate, stated percentage | 3.54% | ||
NJNG [Member] | |||
Debt Instrument [Line Items] | |||
Proceeds from sale-leaseback transaction | $ 7,100 | $ 7,200 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Components of net periodic cost | ||||
Discretionary contribution | $ 30,000,000 | $ 0 | ||
Pension [Member] | ||||
Components of net periodic cost | ||||
Service cost | $ 1,898,000 | $ 1,871,000 | 3,796,000 | 3,742,000 |
Interest cost | 2,835,000 | 2,550,000 | 5,671,000 | 5,100,000 |
Expected return on plan assets | (5,030,000) | (4,273,000) | (10,059,000) | (8,545,000) |
Recognized actuarial loss | 1,821,000 | 1,747,000 | 3,641,000 | 3,492,000 |
Prior service cost amortization | 27,000 | 27,000 | 55,000 | 55,000 |
Net periodic benefit cost | 1,551,000 | 1,922,000 | 3,104,000 | 3,844,000 |
OPEB [Member] | ||||
Components of net periodic cost | ||||
Service cost | 1,131,000 | 1,064,000 | 2,261,000 | 2,127,000 |
Interest cost | 1,564,000 | 1,435,000 | 3,128,000 | 2,870,000 |
Expected return on plan assets | (1,211,000) | (1,244,000) | (2,422,000) | (2,488,000) |
Recognized actuarial loss | 818,000 | 735,000 | 1,637,000 | 1,471,000 |
Prior service cost amortization | (91,000) | (91,000) | (182,000) | (182,000) |
Net periodic benefit cost | $ 2,211,000 | $ 1,899,000 | $ 4,422,000 | $ 3,798,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 17.70% | 24.90% | |
Forecasted tax credits, net of deferred tax | $ 27,100 | $ 26,700 | |
Operating Loss Carryforwards [Line Items] | |||
Tax benefit associated with the loss carryforwards | 13,200 | $ 12,800 | |
ITC carryforward, expiration period | 20 years | ||
NJRCEV [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
ITC carryforward | $ 22,100 | ||
State and Local Jurisdiction [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 226,100 | 218,100 | |
Net operating loss carryforwards, expiration term | 20 years | ||
Valuation allowance | $ 270 | $ 176 |
COMMITMENTS AND CONTINGENT LI60
COMMITMENTS AND CONTINGENT LIABILITIES - SCHEDULE OF FUTURE COMMITTED EXPENSES (Details) $ in Thousands | 6 Months Ended | |
Mar. 31, 2016USD ($) | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Current charges recoverable through BGSS | $ 35,700 | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | ||
2,016 | 283,721 | [1] |
2,017 | 374,972 | [1] |
2,018 | 249,535 | [1] |
2,019 | 202,950 | [1] |
2,020 | 144,803 | [1] |
Thereafter | 920,215 | [1] |
NJRES [Member] | ||
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | ||
2,016 | 224,799 | |
2,017 | 218,818 | |
2,018 | 119,396 | |
2,019 | 62,494 | |
2,020 | 7,856 | |
Thereafter | 7,837 | |
NJRES [Member] | Natural Gas Purchases [Member] | ||
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | ||
2,016 | 151,898 | |
2,017 | 127,345 | |
2,018 | 82,142 | |
2,019 | 49,608 | |
2,020 | 0 | |
Thereafter | 0 | |
NJRES [Member] | Storage Demand Fees [Member] | ||
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | ||
2,016 | 21,405 | |
2,017 | 31,439 | |
2,018 | 13,117 | |
2,019 | 6,728 | |
2,020 | 4,953 | |
Thereafter | 4,055 | |
NJRES [Member] | Pipeline Demand Fees [Member] | ||
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | ||
2,016 | 51,496 | |
2,017 | 60,034 | |
2,018 | 24,137 | |
2,019 | 6,158 | |
2,020 | 2,903 | |
Thereafter | $ 3,782 | |
NJRES [Member] | Minimum [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Storage and pipeline capacity, contract term | 1 year | |
NJRES [Member] | Maximum [Member] | ||
Long-term Purchase Commitment [Line Items] | ||
Storage and pipeline capacity, contract term | 10 years | |
NJNG [Member] | ||
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | ||
2,016 | $ 58,922 | |
2,017 | 156,154 | |
2,018 | 130,139 | |
2,019 | 140,456 | |
2,020 | 136,947 | |
Thereafter | 912,378 | |
NJNG [Member] | Natural Gas Purchases [Member] | ||
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | ||
2,016 | 23,178 | |
2,017 | 62,070 | |
2,018 | 39,166 | |
2,019 | 39,421 | |
2,020 | 41,226 | |
Thereafter | 93,884 | |
NJNG [Member] | Storage Demand Fees [Member] | ||
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | ||
2,016 | 14,495 | |
2,017 | 29,099 | |
2,018 | 22,237 | |
2,019 | 12,834 | |
2,020 | 5,776 | |
Thereafter | 0 | |
NJNG [Member] | Pipeline Demand Fees [Member] | ||
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | ||
2,016 | 21,249 | |
2,017 | 64,985 | |
2,018 | 68,736 | |
2,019 | 88,201 | |
2,020 | 89,945 | |
Thereafter | $ 818,494 | |
[1] | Does not include amounts related to intercompany asset management agreements between NJRES and NJNG. |
COMMITMENTS AND CONTINGENT LI61
COMMITMENTS AND CONTINGENT LIABILITIES - LEGAL PROCEEDINGS (Details) $ in Thousands | 6 Months Ended | |
Mar. 31, 2016USD ($)site | Sep. 30, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of MGP sites | site | 5 | |
Recovery of expenditures, including carrying costs, rolling period approved by the BPU | 7 years | |
Site Contingency [Line Items] | ||
Regulatory assets | $ 436,178 | $ 410,155 |
Minimum [Member] | ||
Site Contingency [Line Items] | ||
Litigation settlement, gross | 150,900 | |
Maximum [Member] | ||
Site Contingency [Line Items] | ||
Litigation settlement, gross | 242,100 | |
Environmental Remediation Costs Expended, Net of Recoveries [Member] | ||
Site Contingency [Line Items] | ||
Regulatory assets | 16,122 | 18,886 |
Environmental Remediation Costs Liability for Future Expenditures [Member] | ||
Site Contingency [Line Items] | ||
Regulatory assets | 178,512 | $ 180,400 |
SBC [Member] | September 2014 SBC Filing [Member] | ||
Site Contingency [Line Items] | ||
Requested rate, amount | $ 8,500 |
BUSINESS SEGMENT AND OTHER OP62
BUSINESS SEGMENT AND OTHER OPERATIONS DATA - RECONCILIATION OF SEGMENT INCOME TO CONSOLIDATED (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | ||
Segment Reporting Information [Line Items] | |||||
Utility | $ 242,536 | $ 374,703 | $ 394,142 | $ 583,430 | |
Nonutility | 331,657 | 638,387 | 624,309 | 1,253,784 | |
Total operating revenues | 574,193 | 1,013,090 | 1,018,451 | 1,837,214 | |
Depreciation and amortization | 17,744 | 15,204 | 34,226 | 29,590 | |
Interest income | [1] | 53 | 246 | 123 | 336 |
Interest expense, net of capitalized interest | 7,369 | 6,483 | 14,146 | 13,678 | |
Income tax provision (benefit) | 17,840 | 20,144 | 26,197 | 61,011 | |
Equity in earnings of affiliates | 2,402 | 3,587 | 4,808 | 6,382 | |
Net financial earnings | 77,880 | 99,143 | 127,512 | 154,253 | |
Capital expenditures | 73,514 | 66,318 | 168,357 | 158,422 | |
Investments in equity investees | 3,102 | 717 | $ 5,948 | $ 1,264 | |
Canada [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Percentage to total operating revenues | 2.90% | 4.40% | |||
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total operating revenues | 570,156 | 1,060,975 | $ 1,008,249 | $ 1,879,625 | |
Depreciation and amortization | 17,499 | 14,968 | 33,871 | 29,128 | |
Interest income | [1] | 510 | 287 | 914 | 616 |
Interest expense, net of capitalized interest | 7,540 | 6,547 | 14,431 | 13,736 | |
Income tax provision (benefit) | 18,130 | 20,478 | 27,241 | 62,292 | |
Net financial earnings | 80,000 | 100,524 | 130,433 | 156,274 | |
Capital expenditures | 73,242 | 66,268 | 167,288 | 158,361 | |
Operating Segments [Member] | Natural Gas Distribution [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 11,598 | 10,647 | 22,836 | 21,192 | |
Interest income | [1] | 60 | 10 | 128 | 100 |
Interest expense, net of capitalized interest | 4,690 | 4,388 | 9,278 | 8,997 | |
Income tax provision (benefit) | 22,710 | 23,778 | 36,573 | 37,944 | |
Net financial earnings | 48,961 | 48,594 | 79,531 | 76,780 | |
Capital expenditures | 47,366 | 33,243 | 96,406 | 69,991 | |
Operating Segments [Member] | Natural Gas Distribution [Member] | External Customers [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Utility | 242,536 | 374,703 | 394,142 | 583,430 | |
Operating Segments [Member] | Energy Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 23 | 23 | 46 | 45 | |
Interest income | [1] | 0 | 13 | 72 | 13 |
Interest expense, net of capitalized interest | 168 | 288 | 376 | 801 | |
Income tax provision (benefit) | 7,805 | 3,923 | 13,000 | 49,800 | |
Net financial earnings | 17,005 | 36,316 | 27,019 | 52,752 | |
Operating Segments [Member] | Energy Services [Member] | External Customers [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Nonutility | [2] | 316,703 | 626,107 | 592,885 | 1,226,669 |
Operating Segments [Member] | Energy Services [Member] | Intercompany [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Nonutility | 3,255 | 56,097 | 5,766 | 59,223 | |
Operating Segments [Member] | Clean Energy Ventures [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 5,876 | 4,297 | 10,986 | 7,888 | |
Interest income | [1] | 0 | 22 | 0 | 22 |
Interest expense, net of capitalized interest | 2,552 | 1,661 | 4,605 | 3,478 | |
Income tax provision (benefit) | (13,915) | (9,042) | (25,502) | (28,763) | |
Net financial earnings | 11,806 | 13,010 | 19,311 | 22,018 | |
Capital expenditures | 25,876 | 33,025 | 70,882 | 88,370 | |
Operating Segments [Member] | Clean Energy Ventures [Member] | External Customers [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Nonutility | 7,662 | 4,068 | 15,456 | 10,303 | |
Operating Segments [Member] | Midstream [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 2 | 1 | 3 | 3 | |
Interest income | [1] | 450 | 242 | 714 | 481 |
Interest expense, net of capitalized interest | 130 | 210 | 172 | 460 | |
Income tax provision (benefit) | 1,530 | 1,819 | 3,170 | 3,311 | |
Equity in earnings of affiliates | 3,508 | 4,581 | 7,053 | 8,356 | |
Net financial earnings | 2,228 | 2,604 | 4,572 | 4,724 | |
Investments in equity investees | 3,102 | 717 | 5,948 | 1,264 | |
Corporate, Non-Segment [Member] | Home Services and Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 237 | 238 | 464 | 476 | |
Interest income | [1] | 123 | 201 | 160 | 201 |
Interest expense, net of capitalized interest | 105 | (64) | 105 | (58) | |
Income tax provision (benefit) | (1,456) | (972) | (1,744) | (1,424) | |
Net financial earnings | (2,040) | (1,359) | (2,623) | (1,951) | |
Capital expenditures | 272 | 50 | 1,069 | 61 | |
Corporate, Non-Segment [Member] | Home Services and Other [Member] | External Customers [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Nonutility | 7,292 | 8,212 | 15,968 | 16,812 | |
Corporate, Non-Segment [Member] | Home Services and Other [Member] | Intercompany [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Nonutility | 639 | 375 | 1,536 | 786 | |
Eliminations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Nonutility | (3,894) | (56,472) | (7,302) | (60,009) | |
Depreciation and amortization | 8 | (2) | (109) | (14) | |
Interest income | [1] | (580) | (242) | (951) | (481) |
Interest expense, net of capitalized interest | (276) | 0 | (390) | 0 | |
Income tax provision (benefit) | 1,166 | 638 | 700 | 143 | |
Equity in earnings of affiliates | (1,106) | (994) | (2,245) | (1,974) | |
Net financial earnings | $ (80) | $ (22) | $ (298) | $ (70) | |
[1] | Included in other income, net on the Unaudited Condensed Consolidated Statements of Operations. | ||||
[2] | Includes sales to Canada, which accounted for 2.9 and 4.4 percent of total operating revenues during the six months ended March 31, 2016 and 2015. |
BUSINESS SEGMENT AND OTHER OP63
BUSINESS SEGMENT AND OTHER OPERATIONS DATA - NET FINANCIAL EARNINGS LOSS RECONCILIATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting [Abstract] | ||||
Net financial earnings | $ 77,880 | $ 99,143 | $ 127,512 | $ 154,253 |
Less: | ||||
Unrealized loss (gain) on derivative instruments and related transactions | 3,170 | 68,474 | 2,035 | (20,198) |
Effects of economic hedging related to natural gas inventory | (1,054) | (23,450) | 2,759 | (32,215) |
Tax adjustments | 2,436 | (6,784) | 743 | 22,443 |
NET INCOME | $ 73,328 | $ 60,903 | $ 121,975 | $ 184,223 |
BUSINESS SEGMENT AND OTHER OP64
BUSINESS SEGMENT AND OTHER OPERATIONS DATA - RECONCILIATION OF SEGMENT ASSETS TO CONSOLIDATED (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Sep. 30, 2015 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $ 3,419,594 | $ 3,284,357 | |
Subtotal [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 3,382,307 | 3,252,206 | |
Natural Gas Distribution [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 2,372,033 | 2,305,293 | |
Energy Services [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 243,989 | 260,021 | |
Clean Energy Ventures [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 566,582 | 504,885 | |
Midstream [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 199,703 | 182,007 | |
Home Services and Other [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 106,541 | 88,880 | |
Intercompany Assets [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | [1] | $ (69,254) | $ (56,729) |
[1] | Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation. |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | Apr. 01, 2010USD ($)Bcf | Mar. 31, 2016USD ($)Bcf / dcontract | Mar. 31, 2015USD ($) | Sep. 30, 2015USD ($) |
Related Party Transaction [Line Items] | ||||
Number of asset management agreements | contract | 3 | |||
NJRES to Steckman Ridge Affiliate | ||||
Related Party Transaction [Line Items] | ||||
Demand fees expense recognized pertaining to related party agreement | $ 1,400 | $ 926 | ||
Due to related parties | 377 | $ 375 | ||
NJNG to Steckman RIdge Affiliate | ||||
Related Party Transaction [Line Items] | ||||
Demand fees expense recognized pertaining to related party agreement | 2,800 | $ 2,900 | ||
Due to related parties | $ 775 | $ 775 | ||
Related party agreement term | 10 years | |||
Natural gas sold at cost under asset management agreement (in Bcf) | Bcf | 3 | |||
Approximate annual demand fees under agreement | $ 9,300 | |||
NJNG to PennEast Affiliate [Member] | ||||
Related Party Transaction [Line Items] | ||||
Transportation precedent agreement, period | 15 years | |||
Transportation capacity under precedent agreement from NJNG with PennEast (in bcf per day) | Bcf / d | 0.18 |