Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2017 | May 02, 2017 | |
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 Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 86,438,897 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
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, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING REVENUES | ||||
Utility | $ 295,546 | $ 242,536 | $ 481,102 | $ 394,142 |
Nonutility | 438,000 | 331,657 | 793,472 | 624,309 |
Total operating revenues | 733,546 | 574,193 | 1,274,574 | 1,018,451 |
OPERATING EXPENSES | ||||
Gas Purchases - Utility | 112,445 | 82,374 | 173,765 | 129,039 |
Gas Purchases - Nonutility | 367,328 | 287,883 | 705,260 | 541,971 |
Gas Purchases - Related parties | 2,072 | 2,077 | 4,183 | 4,151 |
Operation and maintenance | 52,342 | 53,125 | 104,570 | 99,358 |
Regulatory rider expenses | 19,893 | 21,215 | 32,494 | 30,843 |
Depreciation and amortization | 20,328 | 17,744 | 39,588 | 34,226 |
Energy and other taxes | 19,485 | 15,842 | 33,586 | 25,479 |
Total operating expenses | 593,893 | 480,260 | 1,093,446 | 865,067 |
OPERATING INCOME | 139,653 | 93,933 | 181,128 | 153,384 |
Other income, net | 5,338 | 2,202 | 9,114 | 4,126 |
Interest expense, net of capitalized interest | 11,436 | 7,369 | 22,051 | 14,146 |
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES | 133,555 | 88,766 | 168,191 | 143,364 |
Income tax provision | 23,932 | 17,815 | 25,950 | 24,537 |
Equity in earnings of affiliates | 5,079 | 2,402 | 7,390 | 4,808 |
NET INCOME | $ 114,702 | $ 73,353 | $ 149,631 | $ 123,635 |
EARNINGS PER COMMON SHARE | ||||
Basic (usd per share) | $ 1.33 | $ 0.85 | $ 1.74 | $ 1.44 |
Diluted (usd per share) | 1.32 | 0.84 | 1.72 | 1.42 |
DIVIDENDS DECLARED PER COMMON SHARE (usd per share) | $ 0.255 | $ 0.24 | $ 0.51 | $ 0.48 |
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||
Basic (in shares) | 86,275 | 85,834 | 86,182 | 85,754 |
Diluted (in shares) | 87,101 | 86,858 | 86,993 | 86,778 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 114,702 | $ 73,353 | $ 149,631 | $ 123,635 | |
Other comprehensive income, net of tax | |||||
Unrealized gain on available for sale securities, net of tax of $(670), $(3,154), $(4,456), and $(5,768), respectively | 1,408 | 4,500 | 6,923 | 8,201 | |
Net unrealized gain on derivatives, net of tax of $0, $(21), $0 and $(2), respectively | [1] | 0 | 38 | 0 | 5 |
Adjustment to postemployment benefit obligation, net of tax of $(217), $(175), $(434), and $(349) respectively | 318 | 257 | 635 | 513 | |
Other comprehensive income | 1,726 | 4,795 | 7,558 | 8,719 | |
Comprehensive income | $ 116,428 | $ 78,148 | $ 157,189 | $ 132,354 | |
[1] | Effective January 1, 2016, the Company elected not to designate its foreign currency derivatives as accounting hedges and, as a result, changes in fair value of the effective portion of the hedges are no longer recorded in OCI. See Note 4 Derivative Instruments for more information on these transactions. |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax on unrealized (loss) gain on available for sale securities | $ (670) | $ (3,154) | $ (4,456) | $ (5,768) |
Tax on net unrealized (loss) gain on derivatives | 0 | (21) | (2) | |
Tax on adjustment for postemployment benefit obligation | $ (217) | $ (175) | $ (434) | $ (349) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 149,631 | $ 123,635 |
Adjustments to reconcile net income to cash flows from operating activities | ||
Unrealized (gain) loss on derivative instruments | (26,553) | 2,035 |
Gain on sale of property and available for sale securities, net | 7,287 | 0 |
Depreciation and amortization | 39,588 | 34,226 |
Allowance for equity used during construction | (1,586) | (2,357) |
Allowance for bad debt expense | 519 | 873 |
Deferred income taxes | 32,202 | 17,980 |
Manufactured gas plant remediation costs | (3,704) | (2,656) |
Distributions received from equity investees, net of equity in earnings | (463) | 2,261 |
Cost of removal - asset retirement obligations | (242) | (66) |
Contributions to postemployment benefit plans | (1,884) | (32,167) |
Tax benefit from stock-based compensation | 1,231 | 1,660 |
Changes in: | ||
Components of working capital | (31,231) | (13,788) |
Other noncurrent assets | 24,580 | (15,794) |
Other noncurrent liabilities | (2,997) | 2,163 |
Cash flows from operating activities | 171,804 | 118,005 |
CASH FLOWS (USED IN) INVESTING ACTIVITIES | ||
Utility plant | (58,761) | (76,326) |
Solar and wind equipment | (89,905) | (70,882) |
Real estate properties and other | (516) | (1,069) |
Cost of removal | (14,838) | (20,080) |
Investments in equity investees | (10,538) | (5,948) |
Distribution from equity investees in excess of equity in earnings | 1,273 | 1,131 |
Withdrawal from restricted cash construction fund | 1,337 | 1,007 |
Proceeds from sale of property, net of closing costs | 9,443 | 748 |
Proceeds from sale of available for sale securities | 6,639 | 0 |
Cash flows (used in) investing activities | (155,866) | (171,419) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net proceeds from short-term debt | 116,200 | 86,150 |
Payments of long-term debt | (41,660) | (5,807) |
Proceeds from sale-leaseback transaction | 9,587 | 7,107 |
Payments of common stock dividends | (43,898) | (41,115) |
Proceeds from issuance of common stock | 9,731 | 8,220 |
Purchases of treasury stock | (6,355) | (1,008) |
Tax withholding payments related to net settled stock compensation | (4,354) | (3,181) |
Cash flows from financing activities | 39,251 | 50,366 |
Change in cash and cash equivalents | 55,189 | (3,048) |
Cash and cash equivalents at beginning of period | 37,546 | 4,928 |
Cash and cash equivalents at end of period | 92,735 | 1,880 |
CHANGES IN COMPONENTS OF WORKING CAPITAL | ||
Receivables | (137,408) | (16,750) |
Inventories | 62,321 | 43,479 |
Recovery of gas costs | (9,616) | (20,396) |
Gas purchases payable | 21,156 | (31,324) |
Gas purchases payable - related parties | 3 | (409) |
Prepaid and accrued taxes | 25,829 | 43,154 |
Accounts payable and other | (10,027) | (25,026) |
Restricted broker margin accounts | 28,432 | (12,478) |
Customers' credit balances and deposits | (12,765) | 226 |
Other current assets | 844 | 5,736 |
Components of working capital | (31,231) | (13,788) |
Cash paid (received) for: | ||
Interest (net of amounts capitalized) | 21,578 | 15,647 |
Income taxes | (6,431) | 688 |
Accrued capital expenditures | $ 23,284 | $ 21,663 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 30, 2016 |
PROPERTY, PLANT AND EQUIPMENT | ||
Utility plant, at cost | $ 2,167,728 | $ 2,107,375 |
Construction work in progress | 108,373 | 122,268 |
Solar and wind equipment, real estate properties and other, at cost | 758,864 | 631,696 |
Construction work in progress | 31,464 | 93,791 |
Total property, plant and equipment | 3,066,429 | 2,955,130 |
Accumulated depreciation and amortization, utility plant | (475,075) | (467,702) |
Accumulated depreciation and amortization, solar and wind equipment, real estate properties and other | (95,050) | (79,776) |
Property, plant and equipment, net | 2,496,304 | 2,407,652 |
CURRENT ASSETS | ||
Cash and cash equivalents | 92,735 | 37,546 |
Customer accounts receivable | ||
Billed | 242,698 | 142,658 |
Unbilled revenues | 42,657 | 5,744 |
Allowance for doubtful accounts | (4,929) | (4,865) |
Regulatory assets | 43,344 | 54,286 |
Gas in storage, at average cost | 143,514 | 206,251 |
Materials and supplies, at average cost | 11,194 | 10,778 |
Prepaid and accrued taxes | 15,528 | 34,179 |
Derivatives, at fair value | 32,103 | 29,964 |
Restricted broker margin accounts | 23,604 | 47,644 |
Asset held for sale | 0 | 7,660 |
Other | 35,509 | 35,419 |
Total current assets | 677,957 | 607,264 |
NONCURRENT ASSETS | ||
Investments in equity method investees | 152,891 | 141,148 |
Regulatory assets | 396,924 | 441,294 |
Derivatives, at fair value | 6,347 | 5,227 |
Available for sale securities | 65,884 | 55,789 |
Other | 61,052 | 60,196 |
Total noncurrent assets | 683,098 | 703,654 |
Total assets | 3,857,359 | 3,718,570 |
CAPITALIZATION | ||
Common stock, $2.50 par value; authorized 150,000,000 shares; outstanding March 31, 2017 — 86,363,986; September 30, 2016 — 86,086,355 | 222,235 | 221,654 |
Premium on common stock | 219,074 | 215,580 |
Accumulated other comprehensive loss, net of tax | (7,597) | (15,155) |
Treasury stock at cost and other; shares March 31, 2017 — 2,529,817; September 30, 2016 — 2,575,139 | (78,616) | (81,044) |
Retained earnings | 931,184 | 825,556 |
Common stock equity | 1,286,280 | 1,166,591 |
Long-term debt | 1,023,968 | 1,055,038 |
Total capitalization | 2,310,248 | 2,221,629 |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 60,723 | 61,452 |
Short-term debt | 237,900 | 121,700 |
Gas purchases payable | 160,605 | 139,452 |
Gas purchases payable to related parties | 1,156 | 1,150 |
Accounts payable and other | 70,981 | 107,184 |
Dividends payable | 22,023 | 21,975 |
Accrued taxes | 8,258 | 1,080 |
Regulatory liabilities | 5,747 | 9,469 |
New Jersey clean energy program | 6,239 | 14,232 |
Derivatives, at fair value | 32,559 | 61,080 |
Customers' credit balances and deposits | 20,069 | 32,834 |
Total current liabilities | 626,260 | 571,608 |
NONCURRENT LIABILITIES | ||
Deferred income taxes | 507,111 | 473,847 |
Deferred investment tax credits | 4,458 | 4,619 |
Deferred gain | 28,121 | 28,519 |
Derivatives, at fair value | 6,105 | 25,252 |
Manufactured gas plant remediation | 165,849 | 172,000 |
Postemployment employee benefit liability | 141,797 | 141,604 |
Regulatory liabilities | 28,457 | 41,411 |
Asset retirement obligation | 29,924 | 28,379 |
Other | 9,029 | 9,702 |
Total noncurrent liabilities | 920,851 | 925,333 |
Commitments and contingent liabilities (Note 12) | ||
Total capitalization and liabilities | $ 3,857,359 | $ 3,718,570 |
CONDENSED CONSOLIDATED BALANCE7
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Sep. 30, 2016 |
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 | 86,363,986 | 86,086,355 |
Treasury stock at cost and other, shares | 2,529,817 | 2,575,139 |
NATURE OF THE BUSINESS
NATURE OF THE BUSINESS | 6 Months Ended |
Mar. 31, 2017 | |
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 528,000 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 Clean Energy Ventures Corporation, the Company's clean energy subsidiary, comprises the Clean Energy Ventures segment and consists of the Company's capital investments in commercial and residential solar projects located throughout New Jersey and onshore wind investments in Montana, Iowa, Kansas, Wyoming and Pennsylvania; 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 in the U.S. and Canada; 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, located in Pennsylvania, and NJR Pipeline Company, which holds the Company's 20 percent ownership interest in PennEast and NJNR Pipeline Company, which holds the Company's 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 throughout New Jersey, and Commercial Realty & Resources Corporation, which owns commercial real estate. NJR Retail Holdings Corporation is included in Home Services and Other operations. NJR Energy Corporation, a subsidiary of CR&R, was dissolved on November 28, 2016, and all assets were moved to CR&R during the first quarter of fiscal 2017. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 2017 | |
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 SEC and GAAP. The September 30, 2016 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 2016 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, 2017 . 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 $ 128,281 46.4 $ 130,493 62.0 NJNG 15,233 4.3 75,758 21.3 Total $ 143,514 50.7 $ 206,251 83.3 Sales Tax Accounting Sales tax that is collected from customers is presented in both operating revenues and operating expenses on the Unaudited Condensed Consolidated Statements of Operations was $16.9 million and $28.1 million during the three and six months ended March 31, 2017 , respectively, and $13.5 million and $20.7 million during the three and six months ended March 31, 2016 , respectively. Effective January 1, 2017, the New Jersey sales tax rate decreased from 7 percent to 6.875 percent . Sale of Asset On March 8, 2017 , CR&R sold an approximately 56,400 square foot office building on five acres of land located in Monmouth County for $9.4 million , net of closing costs, generating a pre-tax gain of $1.9 million , which was recognized in O&M on the Unaudited Condensed Consolidated Statements of Operations. 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. The Company's available for sale securities had a fair value of $65.9 million and $55.8 million as of March 31, 2017 and September 30, 2016 , respectively. Total unrealized gains associated with these investments are included as a part of accumulated other comprehensive income, a component of common stock equity and were $18.5 million , $11.1 million after tax, and $7.2 million , $4.2 million after tax, as of March 31, 2017 and September 30, 2016 , respectively. During the three and six months ended March 31, 2017 , NJR received proceeds of approximately $3.4 million and $6.6 million , respectively, from the sale of available for sale securities and realized a pre-tax gain of $2.8 million and $5.4 million , respectively, which is included in other income, net in the Unaudited Condensed Consolidated Statements of Operations. Reclassifications of realized gains out of other comprehensive income into income are determined based on average cost. Customer Accounts Receivable Customer accounts receivable include outstanding billings from the following subsidiaries as of: (Thousands) March 31, September 30, NJRES $ 135,199 56 % $ 102,884 72 % NJNG (1) 100,449 41 30,951 22 NJRCEV 2,405 1 1,807 1 NJRHS and other 4,645 2 7,016 5 Total $ 242,698 100 % $ 142,658 100 % (1) Does not include unbilled revenues of $42.7 million and $5.7 million as of March 31, 2017 and September 30, 2016 , respectively. Loans 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 recorded $8.2 million and $7.8 million in other current assets and $40.7 million and $39.5 million in other noncurrent assets as of March 31, 2017 and September 30, 2016 , respectively, on the Unaudited Condensed Consolidated Balance Sheets, related to the loans. NJNG'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, 2017 and September 30, 2016 , there was no allowance for doubtful accounts established for the SAVEGREEN loans. Stock Based Compensation Effective January 25, 2017, the shareholders of NJR approved the NJR 2017 Stock Award and Incentive Plan, which replaced the NJR 2007 Stock Award and Incentive Plan. The 2007 plan had 2,367,338 and 4,223 shares available for future issuance to employees and directors, respectively, which were transferred into the 2017 plan. In addition, the 2017 plan increases the total shares available for issuance to 3,135,000 . Recently Adopted Updates to the Accounting Standards Codification Stock Compensation In March 2016, the FASB issued ASU 2016-09, an amendment to ASC 718, Compensation - Stock Compensation , which simplifies several aspects of the accounting for employee share-based compensation, including the accounting for income taxes and forfeitures. The new guidance also increased the threshold for tax withholding to the maximum statutory rate, as applicable, to maintain equity classification and amended the classification of certain tax transactions within the statement of cash flows. The Company elected to early adopt the amended guidance during the third quarter of fiscal 2016 and applied the new provisions as of the beginning of the year of adoption on a retrospective or prospective basis depending on each amendment’s transition requirements. As such, effective October 1, 2015, NJR is recognizing forfeitures as they occur and is recognizing excess tax benefits (deficiencies) as a component of income tax (benefit) provision in its Unaudited Condensed Consolidated Statements of Operations on a prospective basis. All related information for prior periods has been adjusted throughout this report on a retrospective basis to reflect the effects of the adoption. See Note 11. Income Taxes for more information on these transactions. In addition, the following amounts on the Unaudited Condensed Consolidated Financial Statements have been adjusted retrospectively during the three and six months ended March 31, 2016 : (Thousands) As Previously Reported Effect of Change As Adjusted Three Months Ended Statements of Operations Income tax provision $ 17,840 $ (25 ) $ 17,815 Net income $ 73,328 $ 25 $ 73,353 Earnings per common share Basic $ 0.85 $ — $ 0.85 Diluted $ 0.84 $ — $ 0.84 Six Months Ended Statements of Operations Income tax provision $ 26,197 $ (1,660 ) $ 24,537 Net income $ 121,975 $ 1,660 $ 123,635 Earnings per common share Basic $ 1.42 $ 0.02 $ 1.44 Diluted $ 1.41 $ 0.01 $ 1.42 Cash flows from operating activities Net income $ 121,975 $ 1,660 $ 123,635 Tax benefit from stock based compensation $ — $ 1,660 $ 1,660 Other noncurrent liabilities $ 2,302 $ (139 ) $ 2,163 Net cash flows from operating activities $ 114,824 $ 3,181 $ 118,005 Cash flows from financing activities Tax withholding payments related to net settled stock compensation $ — $ (3,181 ) $ (3,181 ) Cash flows from financing activities $ 53,547 $ (3,181 ) $ 50,366 There was no impact to the Unaudited Condensed Consolidated Balance Sheets upon adoption of the new guidance. 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 Company adopted the new guidance in the first quarter of fiscal 2017 and applied the new provisions on a prospective basis, which did not impact its financial position, results of operations or 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 Company adopted the new guidance in the first quarter of fiscal 2017 and applied the new provisions on a full retrospective basis, which did not impact its financial position, results of operations or 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 on the balance sheet as a deduction from the carrying amount of the liability. The amendment does 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 amendment contained within ASU No. 2015-03 does not require companies to modify their accounting for costs incurred in obtaining revolving credit facilities. The Company adopted the new guidance in the first quarter of fiscal 2017 and applied the new provisions on a full retrospective basis. In addition, the following amounts on the Unaudited Condensed Consolidated Balance Sheets have been adjusted, retrospectively, as of September 30, 2016. (Thousands) As Previously Reported Effect of Change As Adjusted Assets Other noncurrent assets $ 68,708 $ (8,512 ) $ 60,196 Total noncurrent assets $ 712,166 $ (8,512 ) $ 703,654 Total assets $ 3,727,082 $ (8,512 ) $ 3,718,570 Capitalization and Liabilities Long-term debt $ 1,063,550 $ (8,512 ) $ 1,055,038 Total capitalization $ 2,230,141 $ (8,512 ) $ 2,221,629 Total capitalization and liabilities $ 3,727,082 $ (8,512 ) $ 3,718,570 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 amendment provides 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 Company adopted the new guidance in the first quarter of fiscal 2017 and applied the new provisions on a prospective basis, which did not impact its financial position, results of operations or cash flows upon adoption. Other 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 the Company’s fiscal year ending September 30, 2019, and interim periods within that year. The Company continues to evaluate the provisions of ASC 606, however, based on the review of customer contracts to date, it is not anticipating a material impact to its financial position, results of operations or cash flows upon adoption. The Company anticipates significant new disclosures as a result of the new standard and currently expects to transition to the new guidance using the modified retrospective approach. The Company is also monitoring industry specific developments that may have an impact, including our ability to recognize revenue for contracts where collectability is uncertain. 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 or 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 the Company’s fiscal year ending September 30, 2018, and interim periods within that year. Upon adoption, the amendment 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. Financial Instruments In January 2016, the FASB issued ASU 2016-01, 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 the Company’s fiscal year ending September 30, 2019, and interim periods within that year. Upon adoption, the amendment will be applied on a modified-retrospective basis. The Company evaluated the amendment and noted that, upon adoption, subsequent changes to the fair value of the Company’s available for sale securities will be recorded in the Consolidated 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. In June 2016, the FASB issued ASU 2016-13, an amendment to ASC 326, Financial Instruments - Credit Losses, which changes the impairment model for certain financial assets that have a contractual right to receive cash, including trade and loan receivables. The new model requires recognition based upon an estimation of expected credit losses rather than recognition of losses when it is probable that they have been incurred. The guidance is effective for the Company’s fiscal year ending September 30, 2021, and interim periods within that year, with early adoption permitted. The Company is currently evaluating the amendment to understand the impact on its financial position, results of operations and cash flows upon adoption and will apply the new guidance to its trade and loan receivables on a modified retrospective basis. Leases In February 2016, the FASB issued ASU 2016-02, 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 the Company’s fiscal year ending September 30, 2020, and interim periods within that year, with early adoption permitted. The Company is currently evaluating the amendment to understand the impact on its financial position, results of operations and cash flows upon adoption. Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, an amendment to ASC 230, Statement of Cash Flows, which addresses eight specific cash flow issues for which there has been diversity in practice. The guidance is effective for the Company’s fiscal year ending September 30, 2019, and interim periods within that year with early adoption permitted. Upon adoption, the amendment will be applied on a retrospective basis. The Company is currently evaluating the amendment to understand the impact on its consolidated statements of cash flows upon adoption. In November 2016, the FASB issued ASU No. 2016-18, an amendment to ASC 230, Statement of Cash Flows, which requires that any amounts that are deemed to be restricted cash or restricted cash-equivalents be included in cash and cash-equivalent balances on the cash flow statement and, therefore, transfers between cash and restricted cash accounts will no longer be recognized within the statement of cash flows. The guidance is effective for the Company’s fiscal year ending September 30, 2019, with early adoption permitted. Upon adoption, the amendment will be applied on a retrospective basis. Based on the Company's historical restricted cash balances, it does not expect any material impacts to its financial position, results of operations or cash flows upon adoption. Business Combinations In January 2017, the FASB issued ASU No. 2017-01, an amendment to ASC 805, Business Combinations , clarifying the definition of a business in the ASC, which is intended to reduce the complexity surrounding the assessment of a transaction as an asset acquisition or business combination. The amendment provides an initial fair value screen to reduce the number of transactions that would fit the definition of a business, and when the screen threshold is not met, provides an updated model that further clarifies the characteristics of a business. The guidance is effective for the Company’s fiscal year ending September 30, 2019, and interim periods within that year with early adoption permitted. Upon adoption, the amendment will be applied on a prospective basis. The amendment could potentially have material impacts on future transactions that the Company may enter into by altering the Company’s conclusion on what accounting to apply to acquisitions. Gains and Losses from the Derecognition of Nonfinancial Assets In February 2017, the FASB issued ASU No. 2017-05, an amendment to ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets , which clarifies the scope and accounting related to the derecognition of nonfinancial assets, including partial sales and contributions of nonfinancial assets to a joint venture or other non-controlled investee. The guidance is effective concurrently with ASC 606, which is effective for the Company’s fiscal year ending September 30, 2019, and interim periods within that year with early adoption permitted. ASU No. 2017-05 may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The Company is currently evaluating the amendment to understand the impact on its financial position, results from operations, and cash flows upon adoption. Compensation - Retirement Benefits In March 2017, the FASB issued ASU No. 2017-07, an amendment to ASC 715, Compensation - Retirement Benefits , which changes the presentation of net periodic benefit cost on the income statement by requiring companies to present all components of net periodic benefit cost, other than service cost, outside a subtotal of income from operations. The amendment also states that only the service cost component of net periodic benefits costs is eligible for capitalization, when applicable. The guidance is effective for the Company’s fiscal year ending September 30, 2019, and interim periods within that year with early adoption permitted. Upon adoption, the amendment will be applied on a retrospective basis for presentation and changes to capitalization of costs will be applied on a prospective basis. The Company is continuing to evaluate the amendment to fully understand the impact on its financial position, results of operations and cash flows upon adoption. The Company is also monitoring industry specific developments on the new guidance to determine the appropriate treatment of these changes in a rate regulated environment. |
REGULATION
REGULATION | 6 Months Ended |
Mar. 31, 2017 | |
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 capital investments 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 rates, BGSS and other regulatory tariff riders. NJNG is required to make an annual filing to the BPU by June 1 of each year for review of its BGSS, CIP and various other programs and related rates. Annual rate changes are requested to be effective at the beginning of the following fiscal year. In addition, NJNG is also permitted to request approval of certain rate or program changes on an interim basis. All rate and program changes are subject to proper notification and BPU review and approval. In September 2016 , the BPU approved NJNG's base rate case, effective October 1, 2016, which included an increase in base rates in the amount of $45 million . The base rate increase includes a return on common equity of 9.75 percent , a common equity ratio of 52.5 percent and a depreciation rate of 2.4 percent . The approval also included the five -year extension of SAFE II, rate recovery of NJ RISE capital investment costs through June 30, 2016, recovery of NJNG’s SAFE I, NGV and LNG capital investments and recovery of other costs previously deferred in regulatory assets. 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 $ 23,834 $ 36,957 New Jersey Clean Energy Program 6,239 14,232 Underrecovered gas costs 13,271 — Derivatives at fair value, net — 3,097 Total current regulatory assets $ 43,344 $ 54,286 Regulatory assets-noncurrent Environmental remediation costs Expended, net of recoveries $ 19,067 $ 19,595 Liability for future expenditures 165,849 172,000 Deferred income taxes 21,209 20,273 Derivatives at fair value, net 4,392 23,384 SAVEGREEN 15,604 25,208 Postemployment and other benefit costs 151,414 157,027 Deferred Superstorm Sandy costs 14,116 15,201 Other noncurrent regulatory assets 5,273 8,606 Total noncurrent regulatory assets $ 396,924 $ 441,294 Regulatory liability-current Derivatives at fair value, net $ 5,747 $ — Overrecovered gas costs — 9,469 Total current regulatory liabilities $ 5,747 $ 9,469 Regulatory liabilities-noncurrent Cost of removal obligation $ 17,224 $ 30,549 New Jersey Clean Energy Program 10,269 10,657 Other noncurrent regulatory liabilities 964 205 Total noncurrent regulatory liabilities $ 28,457 $ 41,411 Regulatory filings and/or actions that occurred during the current fiscal year include the following: • On March 31, 2017 , NJNG filed its annual petition with the BPU requesting a base rate change in the amount of $4.3 million for the recovery of NJ RISE and SAFE II capital investment costs related to the period ending June 30, 2017 , pursuant to the base rate case order dated September 23, 2016 . The filing will be updated to reflect actual results in July 2017, with changes to base rates effective October 1, 2017 . |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Mar. 31, 2017 | |
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 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, the 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 exchange 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 are typically used to hedge demand fee payments on pipeline capacity, storage and gas purchase agreements. Accordingly, changes in the fair value of foreign exchange contracts are recognized in gas purchases on the Unaudited Condensed Consolidated Statements of Operations. For transactions occurring on or before December 31, 2015, NJRES' foreign exchange contracts were designated as cash flow hedges, and the effective portion of the hedges were recorded in OCI. As a result of NJRES entering into transactions to borrow natural gas, commonly referred to as “park and loans,” an embedded derivative is recognized 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 the use of forward and futures contracts. All contracts require the Company to physically deliver SRECs through the transfer of certificates as per contractual settlement schedules. The Company applies NPNS accounting to SREC forward and futures contracts entered into on or before December 31, 2015. Effective for contracts executed on or after January 1, 2016, NJRES no longer elects NPNS accounting treatment on all SREC forward sales 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 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 normal accounting for certain contracts. 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 charged to expense in the current period earnings based on the BGSS factor times the therm sales. Effective for contracts executed on or after January 1, 2016, NJNG no longer elects NPNS accounting treatment on all physical forward 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 recovered in future rates. Upon settlement, any gain or loss will be amortized into earnings over the life of the future underlying 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, 2017 September 30, 2016 (Thousands) Balance Sheet Location Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Derivatives not designated as hedging instruments: NJNG: Physical commodity contracts Derivatives - current $ 64 $ 17 $ 235 $ 1,154 Financial commodity contracts Derivatives - current 2,240 928 805 2,979 Derivatives - noncurrent — — 75 386 Interest rate contracts Derivatives - noncurrent — 4,392 — 23,073 NJRES: Physical commodity contracts Derivatives - current 4,080 2,460 5,994 11,660 Derivatives - noncurrent 6,084 588 3,987 1,212 Financial commodity contracts Derivatives - current 25,717 29,127 22,929 45,255 Derivatives - noncurrent 263 1,125 1,165 581 Foreign currency contracts Derivatives - current 2 27 1 32 Fair value of derivatives not designated as hedging instruments $ 38,450 $ 38,664 $ 35,191 $ 86,332 Total fair value of derivatives $ 38,450 $ 38,664 $ 35,191 $ 86,332 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 at the contract level unit of account 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, 2017: Derivative assets: NJRES Physical commodity contracts $ 10,164 $ (540 ) $ (200 ) $ 9,424 Financial commodity contracts 25,980 (25,068 ) — 912 Foreign currency contracts 2 (2 ) — — Total NJRES $ 36,146 $ (25,610 ) $ (200 ) $ 10,336 NJNG Physical commodity contracts $ 64 $ (2 ) $ — $ 62 Financial commodity contracts 2,240 (928 ) (1,312 ) — Total NJNG $ 2,304 $ (930 ) $ (1,312 ) $ 62 Derivative liabilities: NJRES Physical commodity contracts $ 3,048 $ (540 ) $ — $ 2,508 Financial commodity contracts 30,252 (25,068 ) (5,184 ) — Foreign currency contracts 27 (2 ) — 25 Total NJRES $ 33,327 $ (25,610 ) $ (5,184 ) $ 2,533 NJNG Physical commodity contracts $ 17 $ (2 ) $ — $ 15 Financial commodity contracts 928 (928 ) — — Interest rate contracts 4,392 — — 4,392 Total NJNG $ 5,337 $ (930 ) $ — $ 4,407 As of September 30, 2016: Derivative assets: NJRES Physical commodity contracts $ 9,981 $ (2,837 ) $ (755 ) $ 6,389 Financial commodity contracts 24,094 (17,945 ) (6,149 ) — Foreign currency contracts 1 (1 ) — — Total NJRES $ 34,076 $ (20,783 ) $ (6,904 ) $ 6,389 NJNG Physical commodity contracts $ 235 $ (31 ) $ — $ 204 Financial commodity contracts 880 (880 ) — — Total NJNG $ 1,115 $ (911 ) $ — $ 204 Derivative liabilities: NJRES Physical commodity contracts $ 12,872 $ (2,837 ) $ 1,200 $ 11,235 Financial commodity contracts 45,836 (17,945 ) (27,891 ) — Foreign currency contracts 32 (1 ) — 31 Total NJRES $ 58,740 $ (20,783 ) $ (26,691 ) $ 11,266 NJNG Physical commodity contracts $ 1,154 $ (31 ) $ — $ 1,123 Financial commodity contracts 3,365 (880 ) (2,485 ) — Interest rate contracts 23,073 — — 23,073 Total NJNG $ 27,592 $ (911 ) $ (2,485 ) $ 24,196 (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) Includes transactions with NAESB netting election, transactions held by FCMs 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 to be used for storage injection and its subsequent sale 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 delivered. 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: 2017 2016 2017 2016 NJRES: Physical commodity contracts Operating revenues $ 4,982 $ 9,128 $ 6,725 $ 21,002 Physical commodity contracts Gas purchases (3,982 ) (5,583 ) (12,781 ) (26,820 ) Financial commodity contracts Gas purchases 38,121 21,820 7,510 63,096 Foreign currency contracts Gas purchases 53 — (33 ) — Total unrealized and realized gains (losses) $ 39,174 $ 25,365 $ 1,421 $ 57,278 NJRES designated its foreign exchange contracts entered into prior to January 1, 2016, as cash flow hedges and, as a result, changes in fair value of the effective portion of the hedges were recorded in OCI and, upon settlement of the contracts, realized gains and (losses) were reclassified from AOCI to gas purchases on the Unaudited Condensed Consolidated Statements of Operations. The following table reflects the effect of derivative instruments that were designated as cash flow hedges on OCI during the three and six months ended March 31, 2016 : (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) March 31, 2016 Three Months Ended Six Months Ended Three Months Ended Six Months Ended Foreign currency contracts $ 29 $ (35 ) $ 30 $ 42 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 approval. At settlement, the resulting gains and/or losses are payable to or recoverable from utility customers and are deferred in regulatory assets or liabilities resulting in no impact to earnings. The following table reflects the gains (losses) associated with NJNG's derivative instruments as of: Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2017 2016 2017 2016 NJNG: Physical commodity contracts $ (3,780 ) $ (14,528 ) $ (2,730 ) $ (14,528 ) Financial commodity contracts (418 ) (5,151 ) 10,760 (10,786 ) Interest rate contracts (1,690 ) (11,071 ) 18,681 (8,705 ) Total unrealized and realized (losses) gains $ (5,888 ) $ (30,750 ) $ 26,711 $ (34,019 ) NJNG and NJRES had the following outstanding long (short) derivatives as of: Volume (Bcf) March 31, September 30, NJNG Futures 24.6 23.6 Physical 5.7 9.2 NJRES Futures (64.2 ) (79.1 ) Options — 1.2 Physical 64.0 94.6 Not included in the previous table are NJRES' gross notional amount of foreign currency transactions of approximately $2.2 million , NJNG’s treasury lock agreement as previously discussed and 314,500 SRECs at NJRES that are open as of March 31, 2017 . Broker Margin Futures exchanges have contract specific performance bond requirements, also known as margin requirements that require the posting of cash or cash equivalents relating to traded contracts. Margin requirements consist of initial margin that is posted upon the initiation of a position, maintenance margin that is usually expressed as a percent of initial margin, and variation margin that fluctuates based on the daily marked-to-market relative to maintenance margin requirements. 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 $ 3,354 $ 4,822 NJRES Broker margin - Current assets $ 20,250 $ 42,822 Due to CME rulebook changes that took effect in January 2017, variation margin is being treated as a settlement payment, rather than collateral. As a result, the Company is now required to present variation margin net with the related derivative assets and/or liabilities on the Unaudited Condensed Consolidated Balance Sheets for any derivatives the Company clears through the CME. This change is being applied on a prospective basis. In September 30, 2016, prior to the rule change, the Company reported the variation margin as a separate unit of account within restricted broker margin on the Unaudited Condensed Consolidated Balance Sheets. There was no impact to the Company’s derivative gains or losses in the Unaudited Condensed Consolidated Statements of Operations as a result of the CME rule amendment. Wholesale Credit Risk NJNG, NJRES and NJRCEV are exposed to credit risk as a result of their sales/wholesale marketing activities. As a result of the inherent volatility in the prices of natural gas commodities, derivatives, SRECs, electricity 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 fails to perform the obligations under its contract (e.g., failed to deliver or pay for natural gas, SRECs, electricity or RECs), then the Company could sustain a loss. NJR monitors and manages the credit risk of its wholesale 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 counterparty'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, 2017 . 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 $ 155,318 Noninvestment grade 35,381 Internally rated investment grade 8,974 Internally rated noninvestment grade 27,114 Total $ 226,787 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, 2017 and September 30, 2016 , was $4.5 million and $23.1 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, 2017 and September 30, 2016 , the Company would have been required to post an additional $4.5 million and $23.1 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, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair Value of Assets and Liabilities The fair value of cash and cash equivalents, 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 at NJNG and NJR, including current maturities, excluding capital leases and debt issuance costs, is as follows: (Thousands) March 31, September 30, Carrying value (1) $ 1,047,045 $ 1,082,845 Fair market value $ 1,041,750 $ 1,131,077 (1) Excludes capital leases of $45.9 million and $42.2 million as of March 31, 2017 and September 30, 2016 , 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, 2017 , 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 the data is: • widely accepted and public; • non-proprietary and sourced from an independent third party; and • 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, 2017: Assets: Physical commodity contracts $ — $ 10,228 $ — $ 10,228 Financial commodity contracts 28,220 — — 28,220 Financial commodity contracts - foreign exchange — 2 — 2 Available for sale equity securities - energy industry 65,884 — — 65,884 Money market funds 65,115 — — 65,115 Other 1,249 — — 1,249 Total assets at fair value $ 160,468 $ 10,230 $ — $ 170,698 Liabilities: Physical commodity contracts $ — $ 3,065 $ — $ 3,065 Financial commodity contracts 31,180 — — 31,180 Financial commodity contracts - foreign exchange — 27 — 27 Interest rate contracts — 4,392 — 4,392 Total liabilities at fair value $ 31,180 $ 7,484 $ — $ 38,664 As of September 30, 2016: Assets: Physical commodity contracts $ — $ 10,216 $ — $ 10,216 Financial commodity contracts 24,974 — — 24,974 Financial commodity contracts - foreign exchange — 1 — 1 Available for sale equity securities - energy industry 55,789 — — 55,789 Money market funds 34,072 — — 34,072 Other 1,444 — — 1,444 Total assets at fair value $ 116,279 $ 10,217 $ — $ 126,496 Liabilities: Physical commodity contracts $ — $ 14,026 $ — $ 14,026 Financial commodity contracts 49,201 — — 49,201 Financial commodity contracts - foreign exchange — 32 — 32 Interest rate contracts — 23,073 — 23,073 Total liabilities at fair value $ 49,201 $ 37,131 $ — $ 86,332 |
INVESTMENTS IN EQUITY METHOD IN
INVESTMENTS IN EQUITY METHOD INVESTEES | 6 Months Ended |
Mar. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
INVESTMENTS IN EQUITY METHOD INVESTEES | INVESTMENTS IN EQUITY METHOD INVESTEES NJR's investments in equity method investees include the following as of: (Thousands) March 31, September 30, Steckman Ridge (1) $ 121,809 $ 123,155 PennEast 31,082 17,993 Total $ 152,891 $ 141,148 (1) Includes loans with a total outstanding principal balance of $70.4 million for both March 31, 2017 and September 30, 2016 . 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 120 -mile pipeline that will extend from northeast Pennsylvania to western New Jersey, which is estimated to be in service by the first quarter of fiscal 2019 . 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. See Note 14. Related Party Transactions for more information on these intercompany transactions. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Mar. 31, 2017 | |
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) 2017 2016 2017 2016 Net income, as reported $ 114,702 $ 73,353 $ 149,631 $ 123,635 Basic earnings per share Weighted average shares of common stock outstanding-basic 86,275 85,834 86,182 85,754 Basic earnings per common share $1.33 $0.85 $1.74 $1.44 Diluted earnings per share Weighted average shares of common stock outstanding-basic 86,275 85,834 86,182 85,754 Incremental shares (1) 826 1,024 811 1,024 Weighted average shares of common stock outstanding-diluted 87,101 86,858 86,993 86,778 Diluted earnings per common share (2) $1.32 $0.84 $1.72 $1.42 (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, 2017 and 2016 . |
COMMON STOCK EQUITY
COMMON STOCK EQUITY | 6 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
COMMON STOCK EQUITY | COMMON STOCK EQUITY Changes in common stock equity during the six months ended March 31, 2017 , were 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, 2016 86,086 $ 221,654 $ 215,580 $ (15,155 ) $ (81,044 ) $ 825,556 $ 1,166,591 Net income 149,631 149,631 Other comprehensive income 7,558 7,558 Common stock issued: Incentive plan 232 581 4,788 5,369 Dividend reinvestment plan (1) 279 (1,266 ) 10,994 9,728 Cash dividend declared ($.51 per share) (44,003 ) (44,003 ) Treasury stock and other (233 ) (28 ) (8,566 ) (8,594 ) Balance at March 31, 2017 86,364 $ 222,235 $ 219,074 $ (7,597 ) $ (78,616 ) $ 931,184 $ 1,286,280 (1) Shares sold through the DRP are issued from treasury stock at average cost, which may differ from the actual market price paid. 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. In December 2015, NJR registered 5 million shares of NJR common stock for issuance under the DRP. NJR raised $9.7 million and $8.2 million of equity through the DRP, by issuing approximately 279,000 and 260,000 shares of treasury stock, during the six months ended March 31, 2017 and 2016 , respectively. Accumulated Other Comprehensive Income (Loss) The following table presents the changes in the components of accumulated other comprehensive income (loss), net of related tax effects during the three months ended March 31, 2017 and 2016 : (Thousands) Available for Sale Securities Cash Flow Hedges Postemployment Benefit Obligation Total Balance at December 31, 2016 $ 9,713 $ — $ (19,036 ) $ (9,323 ) Other comprehensive income (loss), net of tax Other comprehensive income, before reclassifications, net of tax of $(1,808), $0, $0, $(1,808) 3,054 — — 3,054 Amounts reclassified from accumulated other comprehensive income, net of tax of $1,138, $0, $(217), $921 (1,646 ) — 318 (2) (1,328 ) Net current-period other comprehensive income, net of tax of $(670), $0, $(217), $(887) 1,408 — 318 1,726 Balance at March 31, 2017 $ 11,121 $ — $ (18,718 ) $ (7,597 ) Balance as of December 31, 2015 $ 10,086 $ (33 ) $ (15,523 ) $ (5,470 ) Other comprehensive income, net of tax Other comprehensive income (loss), before reclassifications, net of tax of $(3,154), $(10), $0, $(3,164) 4,500 19 — 4,519 Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(11), $(175), $(186) — 19 257 276 Net current-period other comprehensive income, net of tax of ($3,154), $(21), $(175), $(3,350) 4,500 38 257 4,795 Balance as of March 31, 2016 $ 14,586 $ 5 $ (15,266 ) $ (675 ) The following table presents the changes in the components of accumulated other comprehensive income (loss), net of related tax effects during the six months ended March 31, 2017 and 2016 : (Thousands) Available for Sale Securities Cash Flow Hedges Postemployment Benefit Obligation Total Balance at September 30, 2016 $ 4,198 $ — $ (19,353 ) $ (15,155 ) Other comprehensive income (loss), net of tax Other comprehensive income, before reclassifications, net of tax of $(6,648), $0, $0, $(6,648) 10,096 — — 10,096 Amounts reclassified from accumulated other comprehensive income, net of tax of $2,192, $0, $(434), $1,758 (3,173 ) — 635 (2) (2,538 ) Net current-period other comprehensive income, net of tax of $(4,456), $0, $(434), $(4,890) 6,923 — 635 7,558 Balance at March 31, 2017 $ 11,121 $ — $ (18,718 ) $ (7,597 ) Balance as of September 30, 2015 $ 6,385 $ — $ (15,779 ) $ (9,394 ) Other comprehensive income (loss), 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 as of March 31, 2016 $ 14,586 $ 5 $ (15,266 ) $ (675 ) (1) Consists of realized losses related to foreign currency derivatives, which are reclassified to gas purchases on the Unaudited Condensed Consolidated Statements of Operations. Effective January 1, 2016, the Company elected not to designate its foreign currency derivatives as accounting hedges and, as a result, changes in fair value of the effective portion of the hedges are no longer recorded in OCI. (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, 2017 | |
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 $ 237,900 $ 121,700 Weighted average interest rate at end of period 1.75 % 1.43 % Amount available at end of period (2) $ 173,686 $ 288,910 NJNG Bank revolving credit facilities (3) $ 250,000 $ 250,000 May 2019 Commercial paper outstanding at end of period $ — $ — Weighted average interest rate at end of period — % — % Amount available at end of period (4) $ 249,269 $ 249,269 (1) Committed credit facilities, which require commitment fees on the unused amounts. (2) Letters of credit outstanding total $13.4 million and $14.4 million for March 31, 2017 and September 30, 2016 , 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 for both March 31, 2017 and September 30, 2016 , which reduces the amount available by the same amount. 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. Long-term Debt NJNG On January 17, 2017, the Company completed the purchase of three FMBs in lieu of redemption with an aggregate principal amount totaling $35.8 million . The FMBs bore interest at rates ranging from 4.5 percent to 4.9 percent . The bonds purchased in lieu of redemption are being held by the Company to provide an opportunity to evaluate remarketing alternatives. NJNG received $9.6 million and $7.1 million in December 2016 and 2015 , 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. NJNG exercised early purchase options with respect to meter leases by making final principal payments of $1 million during the six months ended March 31, 2017 . NJNG did not exercise early purchase options during the six months ended March 31, 2016 . |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 6 Months Ended |
Mar. 31, 2017 | |
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) 2017 2016 2017 2016 2017 2016 2017 2016 Service cost $ 2,087 $ 1,898 $ 4,174 $ 3,796 $ 1,095 $ 1,131 $ 2,190 $ 2,261 Interest cost 2,442 2,835 4,885 5,671 1,387 1,564 2,773 3,128 Expected return on plan assets (4,828 ) (5,030 ) (9,656 ) (10,059 ) (1,191 ) (1,211 ) (2,383 ) (2,422 ) Recognized actuarial loss 2,206 1,821 4,413 3,641 1,092 818 2,185 1,637 Prior service cost amortization 28 27 55 55 (91 ) (91 ) (182 ) (182 ) Net periodic benefit cost $ 1,935 $ 1,551 $ 3,871 $ 3,104 $ 2,292 $ 2,211 $ 4,583 $ 4,422 The Company made a discretionary contribution of $30 million during the first quarter of fiscal 2016, to improve the funded status of the pension plans based on then current actuarial assumptions, which included the adoption of the most recent mortality table. The Company does not expect to be required to make additional contributions to fund the pension plans during fiscal 2017 or 2018 based on current actuarial assumptions; however, funding requirements are uncertain and can depend significantly on changes in actuarial assumptions, returns on plan assets 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, 2017 . |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2017 | |
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 unrecognized tax benefits. During the six months ended March 31, 2017 and 2016 , 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, 2017 and 2016 , were 15.6 percent and 17.7 percent , respectively. The decreased effective tax rate is due primarily to an increase in forecasted tax credits for the fiscal year ending September 30, 2017 , compared with the prior fiscal year. Forecasted tax credits, net of deferred taxes, were $34.6 million and $27.1 million for fiscal 2017 and 2016, respectively. To the extent there are discrete tax items that are not included in the forecasted effective tax rate, the actual effective tax rate will differ from the estimated annual effective tax rate. The Company recognized $1.5 million and $1.7 million during the six months ended March 31, 2017 and 2016 , respectively, in additional tax benefits associated with the vesting of share-based awards and the release of a valuation allowance associated with state tax net operating losses, as a component of income tax provision in its Unaudited Condensed Consolidated Statements of Operations. Since the tax effects of the awards and the valuation allowance are treated as discrete items, NJR’s actual effective tax rate was 14.8 percent and 16.6 percent as of March 31, 2017 and 2016 , respectively. As of March 31, 2017 , the Company has federal and state income tax net operating losses of approximately $78.7 million and $344.7 million , respectively, which generally have a life of 20 years. The Company has recorded federal and state income tax receivables and deferred tax assets of approximately $27.5 million and $20.2 million , respectively, on the Unaudited Condensed Consolidated Balance Sheets, reflecting the tax benefits associated with these net operating losses. As of September 30, 2016 , the Company had federal and state income tax net operating losses of approximately $78.7 million and $310.6 million , respectively, deferred federal and state tax assets of approximately $27.5 million and $18.2 million , respectively. As of September 30, 2016 , the Company recorded a valuation allowance in the amount of $262,000 associated with state net operating loss carryforwards at CR&R. As a result of taxable income generated from the sale of property and available for sale securities during the six months ended March 31, 2017 , the Company determined the benefits resulting from the state net operating loss carryforwards at CR&R are more likely than not to be realized prior to their expiration. Accordingly, the Company released the related valuation allowance against these state net operating loss carryforwards. There were no other valuation allowances needed for the Company as of March 31, 2017 . In addition, as of March 31, 2017 and September 30, 2016 , the Company had an ITC/PTC carryforward of approximately $111 million and $74 million , respectively, which has a life of 20 years. The Company expects to utilize this entire carryforward, which would begin to expire in fiscal 2034. 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 during 2020 and to 22 percent for property under construction during 2021. For any property that is under construction before 2022, but not placed in service before 2024, the ITC will be reduced to 10 percent. In addition, the PTC was extended 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, 2017 | |
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 fixed charges of approximately $40 million at current contract rates and volumes for the remainder of the fiscal year, 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 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, 2017 , for natural gas purchases and future demand fees for the next five fiscal year periods are as follows: (Thousands) 2017 2018 2019 2020 2021 Thereafter NJRES: Natural gas purchases $ 179,517 $ 121,391 $ 55,395 $ — $ — $ — Storage demand fees 19,525 28,869 16,195 12,913 8,822 8,580 Pipeline demand fees 38,347 48,509 19,057 8,137 7,605 10,403 Sub-total NJRES $ 237,389 $ 198,769 $ 90,647 $ 21,050 $ 16,427 $ 18,983 NJNG: Natural gas purchases $ 45,266 $ 11,250 $ — $ — $ — $ — Storage demand fees 14,568 29,187 25,772 14,476 7,802 11,705 Pipeline demand fees 25,400 81,229 116,976 112,555 90,106 732,538 Sub-total NJNG (1) $ 85,234 $ 121,666 $ 142,748 $ 127,031 $ 97,908 $ 744,243 Total $ 322,623 $ 320,435 $ 233,395 $ 148,081 $ 114,335 $ 763,226 (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 June 2016 , the BPU approved NJNG’s December 2015 filing, which requested approval of its MGP expenditures incurred through June 30, 2015 , with recovery of $9.4 million annually related to the SBC RA factor with rates effective July 9, 2016 . As of March 31, 2017 , $19.1 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 $143.9 million to $231.6 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, NJNG recorded an MGP remediation liability and a corresponding regulatory asset on the Unaudited Condensed Consolidated Balance Sheets of $172 million as of September 30, 2016 , based on the most likely amount at year end and $165.8 million as of March 31, 2017 , which includes adjustments for actual expenditures during fiscal 2017 . 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 In February 2015, a natural gas fire and explosion occurred in Stafford Township, New Jersey as a result of a natural gas leak emanating from an underground pipe. There were no fatalities, although several employees of NJNG were injured and several homes were damaged. NJNG notified its insurance carrier and believes that any costs associated with the incident, including attorneys’ fees, property damage and other losses, will be substantially covered by insurance. The Company believes the resolution of any potential claims associated with the incident will not have a material effect on its financial condition, results of operations or cash flows. As of March 31, 2017 , NJNG estimates that liabilities associated with claims will range between $600,000 and $3.2 million and has accrued the lower end of the range, as we do not believe there is an amount within the range that is more probable than any other. 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, 2017 | |
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 its 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 Clean Energy Ventures segment consists of capital investments in clean energy projects; the Energy Services segment consists of unregulated wholesale energy operations; 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) 2017 2016 2017 2016 Operating revenues Natural Gas Distribution External customers $ 295,546 $ 242,536 $ 481,102 $ 394,142 Clean Energy Ventures External customers 12,943 7,662 20,510 15,456 Energy Services External customers (1) 417,608 316,703 756,538 592,885 Intercompany 2,679 3,255 930 5,766 Subtotal 728,776 570,156 1,259,080 1,008,249 Home Services and Other External customers 7,449 7,292 16,424 15,968 Intercompany 1,055 639 2,086 1,536 Eliminations (3,734 ) (3,894 ) (3,016 ) (7,302 ) Total $ 733,546 $ 574,193 $ 1,274,574 $ 1,018,451 Depreciation and amortization Natural Gas Distribution $ 12,263 $ 11,598 $ 24,293 $ 22,836 Clean Energy Ventures 7,923 5,876 14,964 10,986 Energy Services 17 23 33 46 Midstream 2 2 3 3 Subtotal 20,205 17,499 39,293 33,871 Home Services and Other 199 237 420 464 Eliminations (76 ) 8 (125 ) (109 ) Total $ 20,328 $ 17,744 $ 39,588 $ 34,226 Interest income (2) Natural Gas Distribution $ 97 $ 60 $ 172 $ 128 Energy Services — — — 72 Midstream 512 450 974 714 Subtotal 609 510 1,146 914 Home Services and Other 132 123 253 160 Eliminations (633 ) (580 ) (1,216 ) (951 ) Total $ 108 $ 53 $ 183 $ 123 (1) Includes sales to Canada, which accounted for 1.5 and 2.9 percent of total operating revenues during the six months ended March 31, 2017 and 2016 . (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) 2017 2016 2017 2016 Interest expense, net of capitalized interest Natural Gas Distribution $ 6,392 $ 4,690 $ 13,216 $ 9,278 Clean Energy Ventures 4,055 2,552 7,379 4,605 Energy Services 716 168 1,287 376 Midstream 414 130 470 172 Subtotal 11,577 7,540 22,352 14,431 Home Services and Other 123 105 197 105 Eliminations (264 ) (276 ) (498 ) (390 ) Total $ 11,436 $ 7,369 $ 22,051 $ 14,146 Income tax provision (benefit) Natural Gas Distribution $ 30,499 $ 22,704 $ 45,386 $ 36,211 Clean Energy Ventures (24,756 ) (13,916 ) (36,643 ) (25,650 ) Energy Services 16,277 7,805 13,101 12,710 Midstream 1,502 1,530 3,151 3,170 Subtotal 23,522 18,123 24,995 26,441 Home Services and Other 1,066 (1,474 ) 821 (2,604 ) Eliminations (656 ) 1,166 134 700 Total $ 23,932 $ 17,815 $ 25,950 $ 24,537 Equity in earnings of affiliates Midstream $ 6,119 $ 3,508 $ 9,450 $ 7,053 Eliminations (1,040 ) (1,106 ) (2,060 ) (2,245 ) Total $ 5,079 $ 2,402 $ 7,390 $ 4,808 Net financial earnings Natural Gas Distribution $ 60,233 $ 48,967 $ 90,581 $ 79,893 Clean Energy Ventures 22,743 11,807 25,585 19,459 Energy Services 15,746 17,005 19,233 27,309 Midstream 4,948 2,228 7,335 4,572 Subtotal 103,670 80,007 142,734 131,233 Home Services and Other 708 (2,022 ) 2,250 (1,763 ) Eliminations (272 ) (80 ) (495 ) (298 ) Total $ 104,106 $ 77,905 $ 144,489 $ 129,172 Capital expenditures Natural Gas Distribution $ 34,744 $ 47,366 $ 73,599 $ 96,406 Clean Energy Ventures 43,120 25,876 89,905 70,882 Subtotal 77,864 73,242 163,504 167,288 Home Services and Other 345 272 516 1,069 Total $ 78,209 $ 73,514 $ 164,020 $ 168,357 Investments in equity investees Midstream $ 5,902 $ 3,102 $ 10,538 $ 5,948 Total $ 5,902 $ 3,102 $ 10,538 $ 5,948 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) 2017 2016 2017 2016 Net financial earnings $ 104,106 $ 77,905 $ 144,489 $ 129,172 Less: Unrealized (gain) loss on derivative instruments and related transactions (54,855 ) 3,170 (26,553 ) 2,035 Tax effect 19,679 (1,152 ) 9,922 (739 ) Effects of economic hedging related to natural gas inventory 34,328 (1,054 ) 16,389 2,759 Tax effect (12,334 ) 384 (6,130 ) (1,001 ) Net income to NFE tax adjustment 2,586 3,204 1,230 2,483 Net income $ 114,702 $ 73,353 $ 149,631 $ 123,635 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 net income 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 $ 2,572,576 $ 2,517,401 Clean Energy Ventures 709,289 665,696 Energy Services 328,372 327,626 Midstream 212,439 186,259 Subtotal 3,822,676 3,696,982 Home Services and Other 126,255 109,487 Intercompany assets (1) (91,572 ) (87,899 ) Total $ 3,857,359 $ 3,718,570 (1) Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS 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 as a component of regulatory assets. NJRES may periodically enter into storage or park and loan agreements with its affiliated FERC-jurisdictional natural gas storage facility, Steckman Ridge. As of March 31, 2017 , NJRES has entered into transactions with Steckman Ridge for varying terms, all of which expire by October 2020 . Demand fees, net of eliminations, associated with Steckman Ridge were as follows: Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2017 2016 2017 2016 NJNG $ 1,383 $ 1,385 $ 2,793 $ 2,774 NJRES 689 692 1,390 1,377 Total $ 2,072 $ 2,077 $ 4,183 $ 4,151 The following table summarizes demand fees payable to Steckman Ridge as of: (Thousands) March 31, September 30, NJNG $ 780 $ 775 NJRES 376 375 Total $ 1,156 $ 1,150 NJNG and NJRES have entered into various asset management agreements, the effects of which are eliminated in consolidation. Under the terms of these agreements, NJNG releases certain transportation and storage contracts to NJRES. As of March 31, 2017 , NJNG and NJRES had three asset management agreements with expiration dates ranging from October 2017 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 by the first quarter of fiscal 2019 . |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
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. |
Loans Receivable | Loans 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 recorded $8.2 million and $7.8 million in other current assets and $40.7 million and $39.5 million in other noncurrent assets as of March 31, 2017 and September 30, 2016 , respectively, on the Unaudited Condensed Consolidated Balance Sheets, related to the loans. NJNG'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, 2017 and September 30, 2016 , there was no allowance for doubtful accounts established for the SAVEGREEN loans. |
Recently Adopted Updates to the Accounting Standards Codification | Recently Adopted Updates to the Accounting Standards Codification Stock Compensation In March 2016, the FASB issued ASU 2016-09, an amendment to ASC 718, Compensation - Stock Compensation , which simplifies several aspects of the accounting for employee share-based compensation, including the accounting for income taxes and forfeitures. The new guidance also increased the threshold for tax withholding to the maximum statutory rate, as applicable, to maintain equity classification and amended the classification of certain tax transactions within the statement of cash flows. The Company elected to early adopt the amended guidance during the third quarter of fiscal 2016 and applied the new provisions as of the beginning of the year of adoption on a retrospective or prospective basis depending on each amendment’s transition requirements. As such, effective October 1, 2015, NJR is recognizing forfeitures as they occur and is recognizing excess tax benefits (deficiencies) as a component of income tax (benefit) provision in its Unaudited Condensed Consolidated Statements of Operations on a prospective basis. All related information for prior periods has been adjusted throughout this report on a retrospective basis to reflect the effects of the adoption. See Note 11. Income Taxes for more information on these transactions. In addition, the following amounts on the Unaudited Condensed Consolidated Financial Statements have been adjusted retrospectively during the three and six months ended March 31, 2016 : (Thousands) As Previously Reported Effect of Change As Adjusted Three Months Ended Statements of Operations Income tax provision $ 17,840 $ (25 ) $ 17,815 Net income $ 73,328 $ 25 $ 73,353 Earnings per common share Basic $ 0.85 $ — $ 0.85 Diluted $ 0.84 $ — $ 0.84 Six Months Ended Statements of Operations Income tax provision $ 26,197 $ (1,660 ) $ 24,537 Net income $ 121,975 $ 1,660 $ 123,635 Earnings per common share Basic $ 1.42 $ 0.02 $ 1.44 Diluted $ 1.41 $ 0.01 $ 1.42 Cash flows from operating activities Net income $ 121,975 $ 1,660 $ 123,635 Tax benefit from stock based compensation $ — $ 1,660 $ 1,660 Other noncurrent liabilities $ 2,302 $ (139 ) $ 2,163 Net cash flows from operating activities $ 114,824 $ 3,181 $ 118,005 Cash flows from financing activities Tax withholding payments related to net settled stock compensation $ — $ (3,181 ) $ (3,181 ) Cash flows from financing activities $ 53,547 $ (3,181 ) $ 50,366 There was no impact to the Unaudited Condensed Consolidated Balance Sheets upon adoption of the new guidance. 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 Company adopted the new guidance in the first quarter of fiscal 2017 and applied the new provisions on a prospective basis, which did not impact its financial position, results of operations or 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 Company adopted the new guidance in the first quarter of fiscal 2017 and applied the new provisions on a full retrospective basis, which did not impact its financial position, results of operations or 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 on the balance sheet as a deduction from the carrying amount of the liability. The amendment does 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 amendment contained within ASU No. 2015-03 does not require companies to modify their accounting for costs incurred in obtaining revolving credit facilities. The Company adopted the new guidance in the first quarter of fiscal 2017 and applied the new provisions on a full retrospective basis. In addition, the following amounts on the Unaudited Condensed Consolidated Balance Sheets have been adjusted, retrospectively, as of September 30, 2016. (Thousands) As Previously Reported Effect of Change As Adjusted Assets Other noncurrent assets $ 68,708 $ (8,512 ) $ 60,196 Total noncurrent assets $ 712,166 $ (8,512 ) $ 703,654 Total assets $ 3,727,082 $ (8,512 ) $ 3,718,570 Capitalization and Liabilities Long-term debt $ 1,063,550 $ (8,512 ) $ 1,055,038 Total capitalization $ 2,230,141 $ (8,512 ) $ 2,221,629 Total capitalization and liabilities $ 3,727,082 $ (8,512 ) $ 3,718,570 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 amendment provides 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 Company adopted the new guidance in the first quarter of fiscal 2017 and applied the new provisions on a prospective basis, which did not impact its financial position, results of operations or cash flows upon adoption. Other 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 the Company’s fiscal year ending September 30, 2019, and interim periods within that year. The Company continues to evaluate the provisions of ASC 606, however, based on the review of customer contracts to date, it is not anticipating a material impact to its financial position, results of operations or cash flows upon adoption. The Company anticipates significant new disclosures as a result of the new standard and currently expects to transition to the new guidance using the modified retrospective approach. The Company is also monitoring industry specific developments that may have an impact, including our ability to recognize revenue for contracts where collectability is uncertain. 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 or 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 the Company’s fiscal year ending September 30, 2018, and interim periods within that year. Upon adoption, the amendment 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. Financial Instruments In January 2016, the FASB issued ASU 2016-01, 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 the Company’s fiscal year ending September 30, 2019, and interim periods within that year. Upon adoption, the amendment will be applied on a modified-retrospective basis. The Company evaluated the amendment and noted that, upon adoption, subsequent changes to the fair value of the Company’s available for sale securities will be recorded in the Consolidated 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. In June 2016, the FASB issued ASU 2016-13, an amendment to ASC 326, Financial Instruments - Credit Losses, which changes the impairment model for certain financial assets that have a contractual right to receive cash, including trade and loan receivables. The new model requires recognition based upon an estimation of expected credit losses rather than recognition of losses when it is probable that they have been incurred. The guidance is effective for the Company’s fiscal year ending September 30, 2021, and interim periods within that year, with early adoption permitted. The Company is currently evaluating the amendment to understand the impact on its financial position, results of operations and cash flows upon adoption and will apply the new guidance to its trade and loan receivables on a modified retrospective basis. Leases In February 2016, the FASB issued ASU 2016-02, 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 the Company’s fiscal year ending September 30, 2020, and interim periods within that year, with early adoption permitted. The Company is currently evaluating the amendment to understand the impact on its financial position, results of operations and cash flows upon adoption. Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, an amendment to ASC 230, Statement of Cash Flows, which addresses eight specific cash flow issues for which there has been diversity in practice. The guidance is effective for the Company’s fiscal year ending September 30, 2019, and interim periods within that year with early adoption permitted. Upon adoption, the amendment will be applied on a retrospective basis. The Company is currently evaluating the amendment to understand the impact on its consolidated statements of cash flows upon adoption. In November 2016, the FASB issued ASU No. 2016-18, an amendment to ASC 230, Statement of Cash Flows, which requires that any amounts that are deemed to be restricted cash or restricted cash-equivalents be included in cash and cash-equivalent balances on the cash flow statement and, therefore, transfers between cash and restricted cash accounts will no longer be recognized within the statement of cash flows. The guidance is effective for the Company’s fiscal year ending September 30, 2019, with early adoption permitted. Upon adoption, the amendment will be applied on a retrospective basis. Based on the Company's historical restricted cash balances, it does not expect any material impacts to its financial position, results of operations or cash flows upon adoption. Business Combinations In January 2017, the FASB issued ASU No. 2017-01, an amendment to ASC 805, Business Combinations , clarifying the definition of a business in the ASC, which is intended to reduce the complexity surrounding the assessment of a transaction as an asset acquisition or business combination. The amendment provides an initial fair value screen to reduce the number of transactions that would fit the definition of a business, and when the screen threshold is not met, provides an updated model that further clarifies the characteristics of a business. The guidance is effective for the Company’s fiscal year ending September 30, 2019, and interim periods within that year with early adoption permitted. Upon adoption, the amendment will be applied on a prospective basis. The amendment could potentially have material impacts on future transactions that the Company may enter into by altering the Company’s conclusion on what accounting to apply to acquisitions. Gains and Losses from the Derecognition of Nonfinancial Assets In February 2017, the FASB issued ASU No. 2017-05, an amendment to ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets , which clarifies the scope and accounting related to the derecognition of nonfinancial assets, including partial sales and contributions of nonfinancial assets to a joint venture or other non-controlled investee. The guidance is effective concurrently with ASC 606, which is effective for the Company’s fiscal year ending September 30, 2019, and interim periods within that year with early adoption permitted. ASU No. 2017-05 may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The Company is currently evaluating the amendment to understand the impact on its financial position, results from operations, and cash flows upon adoption. Compensation - Retirement Benefits In March 2017, the FASB issued ASU No. 2017-07, an amendment to ASC 715, Compensation - Retirement Benefits , which changes the presentation of net periodic benefit cost on the income statement by requiring companies to present all components of net periodic benefit cost, other than service cost, outside a subtotal of income from operations. The amendment also states that only the service cost component of net periodic benefits costs is eligible for capitalization, when applicable. The guidance is effective for the Company’s fiscal year ending September 30, 2019, and interim periods within that year with early adoption permitted. Upon adoption, the amendment will be applied on a retrospective basis for presentation and changes to capitalization of costs will be applied on a prospective basis. The Company is continuing to evaluate the amendment to fully understand the impact on its financial position, results of operations and cash flows upon adoption. The Company is also monitoring industry specific developments on the new guidance to determine the appropriate treatment of these changes in a rate regulated environment. |
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 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, the 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 exchange 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 are typically used to hedge demand fee payments on pipeline capacity, storage and gas purchase agreements. Accordingly, changes in the fair value of foreign exchange contracts are recognized in gas purchases on the Unaudited Condensed Consolidated Statements of Operations. For transactions occurring on or before December 31, 2015, NJRES' foreign exchange contracts were designated as cash flow hedges, and the effective portion of the hedges were recorded in OCI. As a result of NJRES entering into transactions to borrow natural gas, commonly referred to as “park and loans,” an embedded derivative is recognized 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 the use of forward and futures contracts. All contracts require the Company to physically deliver SRECs through the transfer of certificates as per contractual settlement schedules. The Company applies NPNS accounting to SREC forward and futures contracts entered into on or before December 31, 2015. Effective for contracts executed on or after January 1, 2016, NJRES no longer elects NPNS accounting treatment on all SREC forward sales 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 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 normal accounting for certain contracts. 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 charged to expense in the current period earnings based on the BGSS factor times the therm sales. Effective for contracts executed on or after January 1, 2016, NJNG no longer elects NPNS accounting treatment on all physical forward 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 recovered in future rates. Upon settlement, any gain or loss will be amortized into earnings over the life of the future underlying 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 the data is: • widely accepted and public; • non-proprietary and sourced from an independent third party; and • 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, 2017 | |
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 $ 128,281 46.4 $ 130,493 62.0 NJNG 15,233 4.3 75,758 21.3 Total $ 143,514 50.7 $ 206,251 83.3 |
Accounts Receivable by Subsidiary | Customer accounts receivable include outstanding billings from the following subsidiaries as of: (Thousands) March 31, September 30, NJRES $ 135,199 56 % $ 102,884 72 % NJNG (1) 100,449 41 30,951 22 NJRCEV 2,405 1 1,807 1 NJRHS and other 4,645 2 7,016 5 Total $ 242,698 100 % $ 142,658 100 % (1) Does not include unbilled revenues of $42.7 million and $5.7 million as of March 31, 2017 and September 30, 2016 , respectively. |
Schedule of Retrospective Application of New Accounting Standard | In addition, the following amounts on the Unaudited Condensed Consolidated Financial Statements have been adjusted retrospectively during the three and six months ended March 31, 2016 : (Thousands) As Previously Reported Effect of Change As Adjusted Three Months Ended Statements of Operations Income tax provision $ 17,840 $ (25 ) $ 17,815 Net income $ 73,328 $ 25 $ 73,353 Earnings per common share Basic $ 0.85 $ — $ 0.85 Diluted $ 0.84 $ — $ 0.84 Six Months Ended Statements of Operations Income tax provision $ 26,197 $ (1,660 ) $ 24,537 Net income $ 121,975 $ 1,660 $ 123,635 Earnings per common share Basic $ 1.42 $ 0.02 $ 1.44 Diluted $ 1.41 $ 0.01 $ 1.42 Cash flows from operating activities Net income $ 121,975 $ 1,660 $ 123,635 Tax benefit from stock based compensation $ — $ 1,660 $ 1,660 Other noncurrent liabilities $ 2,302 $ (139 ) $ 2,163 Net cash flows from operating activities $ 114,824 $ 3,181 $ 118,005 Cash flows from financing activities Tax withholding payments related to net settled stock compensation $ — $ (3,181 ) $ (3,181 ) Cash flows from financing activities $ 53,547 $ (3,181 ) $ 50,366 In addition, the following amounts on the Unaudited Condensed Consolidated Balance Sheets have been adjusted, retrospectively, as of September 30, 2016. (Thousands) As Previously Reported Effect of Change As Adjusted Assets Other noncurrent assets $ 68,708 $ (8,512 ) $ 60,196 Total noncurrent assets $ 712,166 $ (8,512 ) $ 703,654 Total assets $ 3,727,082 $ (8,512 ) $ 3,718,570 Capitalization and Liabilities Long-term debt $ 1,063,550 $ (8,512 ) $ 1,055,038 Total capitalization $ 2,230,141 $ (8,512 ) $ 2,221,629 Total capitalization and liabilities $ 3,727,082 $ (8,512 ) $ 3,718,570 |
REGULATION (Tables)
REGULATION (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
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 $ 23,834 $ 36,957 New Jersey Clean Energy Program 6,239 14,232 Underrecovered gas costs 13,271 — Derivatives at fair value, net — 3,097 Total current regulatory assets $ 43,344 $ 54,286 Regulatory assets-noncurrent Environmental remediation costs Expended, net of recoveries $ 19,067 $ 19,595 Liability for future expenditures 165,849 172,000 Deferred income taxes 21,209 20,273 Derivatives at fair value, net 4,392 23,384 SAVEGREEN 15,604 25,208 Postemployment and other benefit costs 151,414 157,027 Deferred Superstorm Sandy costs 14,116 15,201 Other noncurrent regulatory assets 5,273 8,606 Total noncurrent regulatory assets $ 396,924 $ 441,294 Regulatory liability-current Derivatives at fair value, net $ 5,747 $ — Overrecovered gas costs — 9,469 Total current regulatory liabilities $ 5,747 $ 9,469 Regulatory liabilities-noncurrent Cost of removal obligation $ 17,224 $ 30,549 New Jersey Clean Energy Program 10,269 10,657 Other noncurrent regulatory liabilities 964 205 Total noncurrent regulatory liabilities $ 28,457 $ 41,411 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
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, 2017 September 30, 2016 (Thousands) Balance Sheet Location Asset Derivatives Liability Derivatives Asset Derivatives Liability Derivatives Derivatives not designated as hedging instruments: NJNG: Physical commodity contracts Derivatives - current $ 64 $ 17 $ 235 $ 1,154 Financial commodity contracts Derivatives - current 2,240 928 805 2,979 Derivatives - noncurrent — — 75 386 Interest rate contracts Derivatives - noncurrent — 4,392 — 23,073 NJRES: Physical commodity contracts Derivatives - current 4,080 2,460 5,994 11,660 Derivatives - noncurrent 6,084 588 3,987 1,212 Financial commodity contracts Derivatives - current 25,717 29,127 22,929 45,255 Derivatives - noncurrent 263 1,125 1,165 581 Foreign currency contracts Derivatives - current 2 27 1 32 Fair value of derivatives not designated as hedging instruments $ 38,450 $ 38,664 $ 35,191 $ 86,332 Total fair value of derivatives $ 38,450 $ 38,664 $ 35,191 $ 86,332 |
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, 2017: Derivative assets: NJRES Physical commodity contracts $ 10,164 $ (540 ) $ (200 ) $ 9,424 Financial commodity contracts 25,980 (25,068 ) — 912 Foreign currency contracts 2 (2 ) — — Total NJRES $ 36,146 $ (25,610 ) $ (200 ) $ 10,336 NJNG Physical commodity contracts $ 64 $ (2 ) $ — $ 62 Financial commodity contracts 2,240 (928 ) (1,312 ) — Total NJNG $ 2,304 $ (930 ) $ (1,312 ) $ 62 Derivative liabilities: NJRES Physical commodity contracts $ 3,048 $ (540 ) $ — $ 2,508 Financial commodity contracts 30,252 (25,068 ) (5,184 ) — Foreign currency contracts 27 (2 ) — 25 Total NJRES $ 33,327 $ (25,610 ) $ (5,184 ) $ 2,533 NJNG Physical commodity contracts $ 17 $ (2 ) $ — $ 15 Financial commodity contracts 928 (928 ) — — Interest rate contracts 4,392 — — 4,392 Total NJNG $ 5,337 $ (930 ) $ — $ 4,407 As of September 30, 2016: Derivative assets: NJRES Physical commodity contracts $ 9,981 $ (2,837 ) $ (755 ) $ 6,389 Financial commodity contracts 24,094 (17,945 ) (6,149 ) — Foreign currency contracts 1 (1 ) — — Total NJRES $ 34,076 $ (20,783 ) $ (6,904 ) $ 6,389 NJNG Physical commodity contracts $ 235 $ (31 ) $ — $ 204 Financial commodity contracts 880 (880 ) — — Total NJNG $ 1,115 $ (911 ) $ — $ 204 Derivative liabilities: NJRES Physical commodity contracts $ 12,872 $ (2,837 ) $ 1,200 $ 11,235 Financial commodity contracts 45,836 (17,945 ) (27,891 ) — Foreign currency contracts 32 (1 ) — 31 Total NJRES $ 58,740 $ (20,783 ) $ (26,691 ) $ 11,266 NJNG Physical commodity contracts $ 1,154 $ (31 ) $ — $ 1,123 Financial commodity contracts 3,365 (880 ) (2,485 ) — Interest rate contracts 23,073 — — 23,073 Total NJNG $ 27,592 $ (911 ) $ (2,485 ) $ 24,196 (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) Includes transactions with NAESB netting election, transactions held by FCMs 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, 2017: Derivative assets: NJRES Physical commodity contracts $ 10,164 $ (540 ) $ (200 ) $ 9,424 Financial commodity contracts 25,980 (25,068 ) — 912 Foreign currency contracts 2 (2 ) — — Total NJRES $ 36,146 $ (25,610 ) $ (200 ) $ 10,336 NJNG Physical commodity contracts $ 64 $ (2 ) $ — $ 62 Financial commodity contracts 2,240 (928 ) (1,312 ) — Total NJNG $ 2,304 $ (930 ) $ (1,312 ) $ 62 Derivative liabilities: NJRES Physical commodity contracts $ 3,048 $ (540 ) $ — $ 2,508 Financial commodity contracts 30,252 (25,068 ) (5,184 ) — Foreign currency contracts 27 (2 ) — 25 Total NJRES $ 33,327 $ (25,610 ) $ (5,184 ) $ 2,533 NJNG Physical commodity contracts $ 17 $ (2 ) $ — $ 15 Financial commodity contracts 928 (928 ) — — Interest rate contracts 4,392 — — 4,392 Total NJNG $ 5,337 $ (930 ) $ — $ 4,407 As of September 30, 2016: Derivative assets: NJRES Physical commodity contracts $ 9,981 $ (2,837 ) $ (755 ) $ 6,389 Financial commodity contracts 24,094 (17,945 ) (6,149 ) — Foreign currency contracts 1 (1 ) — — Total NJRES $ 34,076 $ (20,783 ) $ (6,904 ) $ 6,389 NJNG Physical commodity contracts $ 235 $ (31 ) $ — $ 204 Financial commodity contracts 880 (880 ) — — Total NJNG $ 1,115 $ (911 ) $ — $ 204 Derivative liabilities: NJRES Physical commodity contracts $ 12,872 $ (2,837 ) $ 1,200 $ 11,235 Financial commodity contracts 45,836 (17,945 ) (27,891 ) — Foreign currency contracts 32 (1 ) — 31 Total NJRES $ 58,740 $ (20,783 ) $ (26,691 ) $ 11,266 NJNG Physical commodity contracts $ 1,154 $ (31 ) $ — $ 1,123 Financial commodity contracts 3,365 (880 ) (2,485 ) — Interest rate contracts 23,073 — — 23,073 Total NJNG $ 27,592 $ (911 ) $ (2,485 ) $ 24,196 (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) Includes transactions with NAESB netting election, transactions held by FCMs 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: 2017 2016 2017 2016 NJRES: Physical commodity contracts Operating revenues $ 4,982 $ 9,128 $ 6,725 $ 21,002 Physical commodity contracts Gas purchases (3,982 ) (5,583 ) (12,781 ) (26,820 ) Financial commodity contracts Gas purchases 38,121 21,820 7,510 63,096 Foreign currency contracts Gas purchases 53 — (33 ) — Total unrealized and realized gains (losses) $ 39,174 $ 25,365 $ 1,421 $ 57,278 The following table reflects the gains (losses) associated with NJNG's derivative instruments as of: Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2017 2016 2017 2016 NJNG: Physical commodity contracts $ (3,780 ) $ (14,528 ) $ (2,730 ) $ (14,528 ) Financial commodity contracts (418 ) (5,151 ) 10,760 (10,786 ) Interest rate contracts (1,690 ) (11,071 ) 18,681 (8,705 ) Total unrealized and realized (losses) gains $ (5,888 ) $ (30,750 ) $ 26,711 $ (34,019 ) |
Effect of Derivative Instruments Designated as Cash Flow Hedges on OCI | The following table reflects the effect of derivative instruments that were designated as cash flow hedges on OCI during the three and six months ended March 31, 2016 : (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) March 31, 2016 Three Months Ended Six Months Ended Three Months Ended Six Months Ended Foreign currency contracts $ 29 $ (35 ) $ 30 $ 42 |
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 24.6 23.6 Physical 5.7 9.2 NJRES Futures (64.2 ) (79.1 ) Options — 1.2 Physical 64.0 94.6 Not included in the previous table are NJRES' gross notional amount of foreign currency transactions of approximately $2.2 million , NJNG’s treasury lock agreement as previously discussed and 314,500 SRECs at NJRES that are open as of March 31, 2017 . |
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 $ 3,354 $ 4,822 NJRES Broker margin - Current assets $ 20,250 $ 42,822 |
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, 2017 . 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 $ 155,318 Noninvestment grade 35,381 Internally rated investment grade 8,974 Internally rated noninvestment grade 27,114 Total $ 226,787 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The estimated fair value of long-term debt at NJNG and NJR, including current maturities, excluding capital leases and debt issuance costs, is as follows: (Thousands) March 31, September 30, Carrying value (1) $ 1,047,045 $ 1,082,845 Fair market value $ 1,041,750 $ 1,131,077 (1) Excludes capital leases of $45.9 million and $42.2 million as of March 31, 2017 and September 30, 2016 , 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, 2017: Assets: Physical commodity contracts $ — $ 10,228 $ — $ 10,228 Financial commodity contracts 28,220 — — 28,220 Financial commodity contracts - foreign exchange — 2 — 2 Available for sale equity securities - energy industry 65,884 — — 65,884 Money market funds 65,115 — — 65,115 Other 1,249 — — 1,249 Total assets at fair value $ 160,468 $ 10,230 $ — $ 170,698 Liabilities: Physical commodity contracts $ — $ 3,065 $ — $ 3,065 Financial commodity contracts 31,180 — — 31,180 Financial commodity contracts - foreign exchange — 27 — 27 Interest rate contracts — 4,392 — 4,392 Total liabilities at fair value $ 31,180 $ 7,484 $ — $ 38,664 As of September 30, 2016: Assets: Physical commodity contracts $ — $ 10,216 $ — $ 10,216 Financial commodity contracts 24,974 — — 24,974 Financial commodity contracts - foreign exchange — 1 — 1 Available for sale equity securities - energy industry 55,789 — — 55,789 Money market funds 34,072 — — 34,072 Other 1,444 — — 1,444 Total assets at fair value $ 116,279 $ 10,217 $ — $ 126,496 Liabilities: Physical commodity contracts $ — $ 14,026 $ — $ 14,026 Financial commodity contracts 49,201 — — 49,201 Financial commodity contracts - foreign exchange — 32 — 32 Interest rate contracts — 23,073 — 23,073 Total liabilities at fair value $ 49,201 $ 37,131 $ — $ 86,332 |
INVESTMENTS IN EQUITY METHOD 27
INVESTMENTS IN EQUITY METHOD INVESTEES (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Schedule of Equity Method Investments | NJR's investments in equity method investees include the following as of: (Thousands) March 31, September 30, Steckman Ridge (1) $ 121,809 $ 123,155 PennEast 31,082 17,993 Total $ 152,891 $ 141,148 (1) Includes loans with a total outstanding principal balance of $70.4 million for both March 31, 2017 and September 30, 2016 . 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, 2017 | |
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) 2017 2016 2017 2016 Net income, as reported $ 114,702 $ 73,353 $ 149,631 $ 123,635 Basic earnings per share Weighted average shares of common stock outstanding-basic 86,275 85,834 86,182 85,754 Basic earnings per common share $1.33 $0.85 $1.74 $1.44 Diluted earnings per share Weighted average shares of common stock outstanding-basic 86,275 85,834 86,182 85,754 Incremental shares (1) 826 1,024 811 1,024 Weighted average shares of common stock outstanding-diluted 87,101 86,858 86,993 86,778 Diluted earnings per common share (2) $1.32 $0.84 $1.72 $1.42 (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, 2017 and 2016 . |
COMMON STOCK EQUITY (Tables)
COMMON STOCK EQUITY (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Changes in Common Stock Equity | Changes in common stock equity during the six months ended March 31, 2017 , were 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, 2016 86,086 $ 221,654 $ 215,580 $ (15,155 ) $ (81,044 ) $ 825,556 $ 1,166,591 Net income 149,631 149,631 Other comprehensive income 7,558 7,558 Common stock issued: Incentive plan 232 581 4,788 5,369 Dividend reinvestment plan (1) 279 (1,266 ) 10,994 9,728 Cash dividend declared ($.51 per share) (44,003 ) (44,003 ) Treasury stock and other (233 ) (28 ) (8,566 ) (8,594 ) Balance at March 31, 2017 86,364 $ 222,235 $ 219,074 $ (7,597 ) $ (78,616 ) $ 931,184 $ 1,286,280 (1) Shares sold through the DRP are issued from treasury stock at average cost, which may differ from the actual market price paid. |
Components of Accumulated Other Comprehensive Income (Loss), Net of Tax | The following table presents the changes in the components of accumulated other comprehensive income (loss), net of related tax effects during the three months ended March 31, 2017 and 2016 : (Thousands) Available for Sale Securities Cash Flow Hedges Postemployment Benefit Obligation Total Balance at December 31, 2016 $ 9,713 $ — $ (19,036 ) $ (9,323 ) Other comprehensive income (loss), net of tax Other comprehensive income, before reclassifications, net of tax of $(1,808), $0, $0, $(1,808) 3,054 — — 3,054 Amounts reclassified from accumulated other comprehensive income, net of tax of $1,138, $0, $(217), $921 (1,646 ) — 318 (2) (1,328 ) Net current-period other comprehensive income, net of tax of $(670), $0, $(217), $(887) 1,408 — 318 1,726 Balance at March 31, 2017 $ 11,121 $ — $ (18,718 ) $ (7,597 ) Balance as of December 31, 2015 $ 10,086 $ (33 ) $ (15,523 ) $ (5,470 ) Other comprehensive income, net of tax Other comprehensive income (loss), before reclassifications, net of tax of $(3,154), $(10), $0, $(3,164) 4,500 19 — 4,519 Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(11), $(175), $(186) — 19 257 276 Net current-period other comprehensive income, net of tax of ($3,154), $(21), $(175), $(3,350) 4,500 38 257 4,795 Balance as of March 31, 2016 $ 14,586 $ 5 $ (15,266 ) $ (675 ) The following table presents the changes in the components of accumulated other comprehensive income (loss), net of related tax effects during the six months ended March 31, 2017 and 2016 : (Thousands) Available for Sale Securities Cash Flow Hedges Postemployment Benefit Obligation Total Balance at September 30, 2016 $ 4,198 $ — $ (19,353 ) $ (15,155 ) Other comprehensive income (loss), net of tax Other comprehensive income, before reclassifications, net of tax of $(6,648), $0, $0, $(6,648) 10,096 — — 10,096 Amounts reclassified from accumulated other comprehensive income, net of tax of $2,192, $0, $(434), $1,758 (3,173 ) — 635 (2) (2,538 ) Net current-period other comprehensive income, net of tax of $(4,456), $0, $(434), $(4,890) 6,923 — 635 7,558 Balance at March 31, 2017 $ 11,121 $ — $ (18,718 ) $ (7,597 ) Balance as of September 30, 2015 $ 6,385 $ — $ (15,779 ) $ (9,394 ) Other comprehensive income (loss), 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 as of March 31, 2016 $ 14,586 $ 5 $ (15,266 ) $ (675 ) (1) Consists of realized losses related to foreign currency derivatives, which are reclassified to gas purchases on the Unaudited Condensed Consolidated Statements of Operations. Effective January 1, 2016, the Company elected not to designate its foreign currency derivatives as accounting hedges and, as a result, changes in fair value of the effective portion of the hedges are no longer recorded in OCI. (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, 2017 | |
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 $ 237,900 $ 121,700 Weighted average interest rate at end of period 1.75 % 1.43 % Amount available at end of period (2) $ 173,686 $ 288,910 NJNG Bank revolving credit facilities (3) $ 250,000 $ 250,000 May 2019 Commercial paper outstanding at end of period $ — $ — Weighted average interest rate at end of period — % — % Amount available at end of period (4) $ 249,269 $ 249,269 (1) Committed credit facilities, which require commitment fees on the unused amounts. (2) Letters of credit outstanding total $13.4 million and $14.4 million for March 31, 2017 and September 30, 2016 , 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 for both March 31, 2017 and September 30, 2016 , which reduces the amount available by the same amount. |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
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) 2017 2016 2017 2016 2017 2016 2017 2016 Service cost $ 2,087 $ 1,898 $ 4,174 $ 3,796 $ 1,095 $ 1,131 $ 2,190 $ 2,261 Interest cost 2,442 2,835 4,885 5,671 1,387 1,564 2,773 3,128 Expected return on plan assets (4,828 ) (5,030 ) (9,656 ) (10,059 ) (1,191 ) (1,211 ) (2,383 ) (2,422 ) Recognized actuarial loss 2,206 1,821 4,413 3,641 1,092 818 2,185 1,637 Prior service cost amortization 28 27 55 55 (91 ) (91 ) (182 ) (182 ) Net periodic benefit cost $ 1,935 $ 1,551 $ 3,871 $ 3,104 $ 2,292 $ 2,211 $ 4,583 $ 4,422 |
COMMITMENTS AND CONTINGENT LI32
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Long-term Purchase Commitment | Commitments as of March 31, 2017 , for natural gas purchases and future demand fees for the next five fiscal year periods are as follows: (Thousands) 2017 2018 2019 2020 2021 Thereafter NJRES: Natural gas purchases $ 179,517 $ 121,391 $ 55,395 $ — $ — $ — Storage demand fees 19,525 28,869 16,195 12,913 8,822 8,580 Pipeline demand fees 38,347 48,509 19,057 8,137 7,605 10,403 Sub-total NJRES $ 237,389 $ 198,769 $ 90,647 $ 21,050 $ 16,427 $ 18,983 NJNG: Natural gas purchases $ 45,266 $ 11,250 $ — $ — $ — $ — Storage demand fees 14,568 29,187 25,772 14,476 7,802 11,705 Pipeline demand fees 25,400 81,229 116,976 112,555 90,106 732,538 Sub-total NJNG (1) $ 85,234 $ 121,666 $ 142,748 $ 127,031 $ 97,908 $ 744,243 Total $ 322,623 $ 320,435 $ 233,395 $ 148,081 $ 114,335 $ 763,226 (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, 2017 | |
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) 2017 2016 2017 2016 Operating revenues Natural Gas Distribution External customers $ 295,546 $ 242,536 $ 481,102 $ 394,142 Clean Energy Ventures External customers 12,943 7,662 20,510 15,456 Energy Services External customers (1) 417,608 316,703 756,538 592,885 Intercompany 2,679 3,255 930 5,766 Subtotal 728,776 570,156 1,259,080 1,008,249 Home Services and Other External customers 7,449 7,292 16,424 15,968 Intercompany 1,055 639 2,086 1,536 Eliminations (3,734 ) (3,894 ) (3,016 ) (7,302 ) Total $ 733,546 $ 574,193 $ 1,274,574 $ 1,018,451 Depreciation and amortization Natural Gas Distribution $ 12,263 $ 11,598 $ 24,293 $ 22,836 Clean Energy Ventures 7,923 5,876 14,964 10,986 Energy Services 17 23 33 46 Midstream 2 2 3 3 Subtotal 20,205 17,499 39,293 33,871 Home Services and Other 199 237 420 464 Eliminations (76 ) 8 (125 ) (109 ) Total $ 20,328 $ 17,744 $ 39,588 $ 34,226 Interest income (2) Natural Gas Distribution $ 97 $ 60 $ 172 $ 128 Energy Services — — — 72 Midstream 512 450 974 714 Subtotal 609 510 1,146 914 Home Services and Other 132 123 253 160 Eliminations (633 ) (580 ) (1,216 ) (951 ) Total $ 108 $ 53 $ 183 $ 123 (1) Includes sales to Canada, which accounted for 1.5 and 2.9 percent of total operating revenues during the six months ended March 31, 2017 and 2016 . (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) 2017 2016 2017 2016 Interest expense, net of capitalized interest Natural Gas Distribution $ 6,392 $ 4,690 $ 13,216 $ 9,278 Clean Energy Ventures 4,055 2,552 7,379 4,605 Energy Services 716 168 1,287 376 Midstream 414 130 470 172 Subtotal 11,577 7,540 22,352 14,431 Home Services and Other 123 105 197 105 Eliminations (264 ) (276 ) (498 ) (390 ) Total $ 11,436 $ 7,369 $ 22,051 $ 14,146 Income tax provision (benefit) Natural Gas Distribution $ 30,499 $ 22,704 $ 45,386 $ 36,211 Clean Energy Ventures (24,756 ) (13,916 ) (36,643 ) (25,650 ) Energy Services 16,277 7,805 13,101 12,710 Midstream 1,502 1,530 3,151 3,170 Subtotal 23,522 18,123 24,995 26,441 Home Services and Other 1,066 (1,474 ) 821 (2,604 ) Eliminations (656 ) 1,166 134 700 Total $ 23,932 $ 17,815 $ 25,950 $ 24,537 Equity in earnings of affiliates Midstream $ 6,119 $ 3,508 $ 9,450 $ 7,053 Eliminations (1,040 ) (1,106 ) (2,060 ) (2,245 ) Total $ 5,079 $ 2,402 $ 7,390 $ 4,808 Net financial earnings Natural Gas Distribution $ 60,233 $ 48,967 $ 90,581 $ 79,893 Clean Energy Ventures 22,743 11,807 25,585 19,459 Energy Services 15,746 17,005 19,233 27,309 Midstream 4,948 2,228 7,335 4,572 Subtotal 103,670 80,007 142,734 131,233 Home Services and Other 708 (2,022 ) 2,250 (1,763 ) Eliminations (272 ) (80 ) (495 ) (298 ) Total $ 104,106 $ 77,905 $ 144,489 $ 129,172 Capital expenditures Natural Gas Distribution $ 34,744 $ 47,366 $ 73,599 $ 96,406 Clean Energy Ventures 43,120 25,876 89,905 70,882 Subtotal 77,864 73,242 163,504 167,288 Home Services and Other 345 272 516 1,069 Total $ 78,209 $ 73,514 $ 164,020 $ 168,357 Investments in equity investees Midstream $ 5,902 $ 3,102 $ 10,538 $ 5,948 Total $ 5,902 $ 3,102 $ 10,538 $ 5,948 |
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) 2017 2016 2017 2016 Net financial earnings $ 104,106 $ 77,905 $ 144,489 $ 129,172 Less: Unrealized (gain) loss on derivative instruments and related transactions (54,855 ) 3,170 (26,553 ) 2,035 Tax effect 19,679 (1,152 ) 9,922 (739 ) Effects of economic hedging related to natural gas inventory 34,328 (1,054 ) 16,389 2,759 Tax effect (12,334 ) 384 (6,130 ) (1,001 ) Net income to NFE tax adjustment 2,586 3,204 1,230 2,483 Net income $ 114,702 $ 73,353 $ 149,631 $ 123,635 |
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 $ 2,572,576 $ 2,517,401 Clean Energy Ventures 709,289 665,696 Energy Services 328,372 327,626 Midstream 212,439 186,259 Subtotal 3,822,676 3,696,982 Home Services and Other 126,255 109,487 Intercompany assets (1) (91,572 ) (87,899 ) Total $ 3,857,359 $ 3,718,570 (1) Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule Of Demand Fees And Demand Fees Payable | Demand fees, net of eliminations, associated with Steckman Ridge were as follows: Three Months Ended Six Months Ended March 31, March 31, (Thousands) 2017 2016 2017 2016 NJNG $ 1,383 $ 1,385 $ 2,793 $ 2,774 NJRES 689 692 1,390 1,377 Total $ 2,072 $ 2,077 $ 4,183 $ 4,151 The following table summarizes demand fees payable to Steckman Ridge as of: (Thousands) March 31, September 30, NJNG $ 780 $ 775 NJRES 376 375 Total $ 1,156 $ 1,150 |
NATURE OF THE BUSINESS (Details
NATURE OF THE BUSINESS (Details) shares in Thousands, customer in Thousands | 6 Months Ended |
Mar. 31, 2017subsidiarycustomershares | |
Common Units | |
Nature of Business [Line Items] | |
Ownership interest exchanged (in shares) | shares | 1,840 |
Steckman Ridge | |
Nature of Business [Line Items] | |
Equity method investment, ownership percentage | 50.00% |
PennEast | |
Nature of Business [Line Items] | |
Equity method investment, ownership percentage | 20.00% |
NJNG | |
Nature of Business [Line Items] | |
Total retail customers | customer | 528 |
NJR Retail Holdings Corporation | |
Nature of Business [Line Items] | |
Number of principal subsidiaries | subsidiary | 2 |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - GAS IN STORAGE (Details) $ in Thousands | Mar. 31, 2017USD ($)Bcf | Sep. 30, 2016USD ($)Bcf |
Inventory [Line Items] | ||
Gas in Storage, value | $ | $ 143,514 | $ 206,251 |
Gas in Storage, Bcf | Bcf | 50.7 | 83.3 |
NJRES | ||
Inventory [Line Items] | ||
Gas in Storage, value | $ | $ 128,281 | $ 130,493 |
Gas in Storage, Bcf | Bcf | 46.4 | 62 |
NJNG | ||
Inventory [Line Items] | ||
Gas in Storage, value | $ | $ 15,233 | $ 75,758 |
Gas in Storage, Bcf | Bcf | 4.3 | 21.3 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SALES TAX ACCOUNTING (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Jan. 01, 2017 | Dec. 31, 2016 | |
Subsequent Event [Line Items] | ||||||
Sales tax | $ 16.9 | $ 13.5 | $ 28.1 | $ 20.7 | ||
NEW JERSEY | ||||||
Subsequent Event [Line Items] | ||||||
State sales tax, percent | 6.875% | 7.00% |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SALE OF ASSET (Details) - Mar. 08, 2017 $ in Millions | USD ($)a | ft² |
Accounting Policies [Abstract] | ||
Area of real estate property | 5 | 56,400 |
Proceeds from sale of real estate | $ 9.4 | |
Gain on sale of real estate | $ 1.9 |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - AVAILABLE FOR SALE SECURITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Available for sale securities | $ 65,884 | $ 65,884 | $ 55,789 | |
Unrealized gain | 18,500 | 7,200 | ||
Unrealized gain, net of tax | 11,100 | $ 4,200 | ||
Proceeds from sale of available for sale securities | 3,400 | 6,639 | $ 0 | |
Pre-tax gain on sale of available-for-sale securities | $ 2,800 | $ 5,400 |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CUSTOMER ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 30, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed | $ 242,698 | $ 142,658 |
Receivable by subsidiary, percentage | 100.00% | 100.00% |
Unbilled revenues | $ 42,657 | $ 5,744 |
NJRES | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed | $ 135,199 | $ 102,884 |
Receivable by subsidiary, percentage | 56.00% | 72.00% |
NJNG | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed | $ 100,449 | $ 30,951 |
Receivable by subsidiary, percentage | 41.00% | 22.00% |
NJRCEV | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed | $ 2,405 | $ 1,807 |
Receivable by subsidiary, percentage | 1.00% | 1.00% |
NJRHS and other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed | $ 4,645 | $ 7,016 |
Receivable by subsidiary, percentage | 2.00% | 5.00% |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - LOAN RECEIVABLE (Details) - USD ($) | 6 Months Ended | |
Mar. 31, 2017 | Sep. 30, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans receivable in other current assets | $ 8,200,000 | $ 7,800,000 |
Loans receivable in other noncurrent assets | $ 40,700,000 | 39,500,000 |
Threshold period in establishing allowance for doubtful accounts | 60 days | |
Allowance for doubtful accounts | $ 0 | $ 0 |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loan term | 2 years | |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loan term | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - STOCK BASED COMPENSATION (Details) - shares | Jan. 25, 2017 | Jan. 24, 2017 |
NJR 2017 Stock Award And Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for issuance | 3,135,000 | |
Employees | NJR 2007 Stock Award And Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for issuance | 2,367,338 | |
Directors | NJR 2007 Stock Award And Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for issuance | 4,223 |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - NEW ACCOUNTING STANDARD (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Income Statement [Abstract] | |||||
Income tax provision | $ 23,932 | $ 17,815 | $ 25,950 | $ 24,537 | |
Net income | $ 114,702 | $ 73,353 | $ 149,631 | $ 123,635 | |
EARNINGS PER COMMON SHARE | |||||
Basic (usd per share) | $ 1.33 | $ 0.85 | $ 1.74 | $ 1.44 | |
Diluted (usd per share) | $ 1.32 | $ 0.84 | $ 1.72 | $ 1.42 | |
Cash flows (used in) operating activities | |||||
Net income, as reported | $ 114,702 | $ 73,353 | $ 149,631 | $ 123,635 | |
Tax benefit from stock-based compensation | 1,231 | 1,660 | |||
Other noncurrent liabilities | (2,997) | 2,163 | |||
Net cash flows (used in) operating activities | 171,804 | 118,005 | |||
Cash flows from financing activities | |||||
Tax withholding payments related to net settled stock compensation | (4,354) | (3,181) | |||
Cash flows from financing activities | 39,251 | 50,366 | |||
Assets | |||||
Other noncurrent assets | 61,052 | 61,052 | $ 60,196 | ||
Total noncurrent assets | 683,098 | 683,098 | 703,654 | ||
Total assets | 3,857,359 | 3,857,359 | 3,718,570 | ||
Capitalization and Liabilities | |||||
Long-term debt | 1,023,968 | 1,023,968 | 1,055,038 | ||
Total capitalization | 2,310,248 | 2,310,248 | 2,221,629 | ||
Total capitalization and liabilities | $ 3,857,359 | $ 3,857,359 | 3,718,570 | ||
As Previously Reported | |||||
Income Statement [Abstract] | |||||
Income tax provision | 17,840 | 26,197 | |||
Net income | $ 73,328 | $ 121,975 | |||
EARNINGS PER COMMON SHARE | |||||
Basic (usd per share) | $ 0.85 | $ 1.42 | |||
Diluted (usd per share) | $ 0.84 | $ 1.41 | |||
Cash flows (used in) operating activities | |||||
Net income, as reported | $ 73,328 | $ 121,975 | |||
Tax benefit from stock-based compensation | 0 | ||||
Other noncurrent liabilities | 2,302 | ||||
Net cash flows (used in) operating activities | 114,824 | ||||
Cash flows from financing activities | |||||
Tax withholding payments related to net settled stock compensation | 0 | ||||
Cash flows from financing activities | 53,547 | ||||
Assets | |||||
Other noncurrent assets | 68,708 | ||||
Total noncurrent assets | 712,166 | ||||
Total assets | 3,727,082 | ||||
Capitalization and Liabilities | |||||
Long-term debt | 1,063,550 | ||||
Total capitalization | 2,230,141 | ||||
Total capitalization and liabilities | 3,727,082 | ||||
Effect of Change | |||||
Income Statement [Abstract] | |||||
Income tax provision | (25) | (1,660) | |||
Net income | $ 25 | $ 1,660 | |||
EARNINGS PER COMMON SHARE | |||||
Basic (usd per share) | $ 0 | $ 0.02 | |||
Diluted (usd per share) | $ 0 | $ 0.01 | |||
Cash flows (used in) operating activities | |||||
Net income, as reported | $ 25 | $ 1,660 | |||
Tax benefit from stock-based compensation | 1,660 | ||||
Other noncurrent liabilities | (139) | ||||
Net cash flows (used in) operating activities | 3,181 | ||||
Cash flows from financing activities | |||||
Tax withholding payments related to net settled stock compensation | (3,181) | ||||
Cash flows from financing activities | $ (3,181) | ||||
Assets | |||||
Other noncurrent assets | (8,512) | ||||
Total noncurrent assets | (8,512) | ||||
Total assets | (8,512) | ||||
Capitalization and Liabilities | |||||
Long-term debt | (8,512) | ||||
Total capitalization | (8,512) | ||||
Total capitalization and liabilities | $ (8,512) |
REGULATION - REGULATORY FILINGS
REGULATION - REGULATORY FILINGS (Details) - USD ($) $ in Millions | Mar. 31, 2017 | Oct. 01, 2016 |
Schedule of Regulatory Filings [Line Items] | ||
Increase in base tariff rates | $ 45 | |
Return on equity | 9.75% | |
Public utilities, approved equity capital structure, percentage | 52.50% | |
Composite rate of depreciation | 2.40% | |
Recovery of expenditures, approved rolling period | 5 years | |
NJNG | ||
Schedule of Regulatory Filings [Line Items] | ||
Increase in base tariff rates | $ 4.3 |
REGULATION - REGULATORY ASSETS
REGULATION - REGULATORY ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 30, 2016 |
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | $ 43,344 | $ 54,286 |
Regulatory assets-noncurrent | 396,924 | 441,294 |
Regulatory liability-current | 5,747 | 9,469 |
Regulatory liabilities-noncurrent | 28,457 | 41,411 |
Overrecovered gas costs | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liability-current | 0 | 9,469 |
Derivatives at fair value, net | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liability-current | 5,747 | 0 |
Cost of removal obligation | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liabilities-noncurrent | 17,224 | 30,549 |
New Jersey Clean Energy Program | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liabilities-noncurrent | 10,269 | 10,657 |
Other noncurrent regulatory liabilities | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory liabilities-noncurrent | 964 | 205 |
Conservation Incentive Program | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 23,834 | 36,957 |
New Jersey Clean Energy Program | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 6,239 | 14,232 |
Underrecovered gas costs | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 13,271 | 0 |
Derivatives at fair value, net | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-current | 0 | 3,097 |
Regulatory assets-noncurrent | 4,392 | 23,384 |
Expended, net of recoveries | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 19,067 | 19,595 |
Liability for future expenditures | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 165,849 | 172,000 |
Deferred income taxes | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 21,209 | 20,273 |
SAVEGREEN | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 15,604 | 25,208 |
Postemployment and other benefit costs | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 151,414 | 157,027 |
Deferred Superstorm Sandy costs | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | 14,116 | 15,201 |
Other noncurrent regulatory assets | ||
Regulatory Assets And Liabilities [Line Items] | ||
Regulatory assets-noncurrent | $ 5,273 | $ 8,606 |
DERIVATIVE INSTRUMENTS - BALANC
DERIVATIVE INSTRUMENTS - BALANCE SHEET RELATED DISCLOSURES (Details) - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 01, 2015 |
Derivatives, Fair Value [Line Items] | |||
Benchmark interest rate | 3.26% | ||
Notional amount of foreign currency derivatives | $ 125,000,000 | ||
Fair Value | |||
Derivative assets, current | $ 32,103,000 | $ 29,964,000 | |
Derivative liabilities, current | 32,559,000 | 61,080,000 | |
Derivative assets, noncurrent | 6,347,000 | 5,227,000 | |
Derivative liabilities, noncurrent | 6,105,000 | 25,252,000 | |
Derivative assets | 38,450,000 | 35,191,000 | |
Derivative liabilities | 38,664,000 | 86,332,000 | |
Foreign currency contracts | |||
Derivatives, Fair Value [Line Items] | |||
Notional amount of foreign currency derivatives | 2,200,000 | ||
Not Designated as Hedging Instrument | |||
Fair Value | |||
Derivative assets | 38,450,000 | 35,191,000 | |
Derivative liabilities | 38,664,000 | 86,332,000 | |
NJNG | Not Designated as Hedging Instrument | Physical commodity contracts | |||
Fair Value | |||
Derivative assets, current | 64,000 | 235,000 | |
Derivative liabilities, current | 17,000 | 1,154,000 | |
NJNG | Not Designated as Hedging Instrument | Financial commodity contracts | |||
Fair Value | |||
Derivative assets, current | 2,240,000 | 805,000 | |
Derivative liabilities, current | 928,000 | 2,979,000 | |
Derivative assets, noncurrent | 0 | 75,000 | |
Derivative liabilities, noncurrent | 0 | 386,000 | |
NJNG | Not Designated as Hedging Instrument | Interest rate contracts | |||
Fair Value | |||
Derivative assets, noncurrent | 0 | 0 | |
Derivative liabilities, noncurrent | 4,392,000 | 23,073,000 | |
NJRES | Not Designated as Hedging Instrument | Physical commodity contracts | |||
Fair Value | |||
Derivative assets, current | 4,080,000 | 5,994,000 | |
Derivative liabilities, current | 2,460,000 | 11,660,000 | |
Derivative assets, noncurrent | 6,084,000 | 3,987,000 | |
Derivative liabilities, noncurrent | 588,000 | 1,212,000 | |
NJRES | Not Designated as Hedging Instrument | Financial commodity contracts | |||
Fair Value | |||
Derivative assets, current | 25,717,000 | 22,929,000 | |
Derivative liabilities, current | 29,127,000 | 45,255,000 | |
Derivative assets, noncurrent | 263,000 | 1,165,000 | |
Derivative liabilities, noncurrent | 1,125,000 | 581,000 | |
NJRES | Not Designated as Hedging Instrument | Foreign currency contracts | |||
Fair Value | |||
Derivative assets, current | 2,000 | 1,000 | |
Derivative liabilities, current | 27,000 | $ 32,000 | |
Series Ll | NJNG | |||
Derivatives, Fair Value [Line Items] | |||
Debt issued | $ 125,000,000 | ||
Interest rate, stated percentage | 5.60% |
DERIVATIVE INSTRUMENTS - OFFSET
DERIVATIVE INSTRUMENTS - OFFSETTING OF ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 30, 2016 |
NJRES | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | $ 36,146 | $ 34,076 |
Offsetting Derivative Instruments | (25,610) | (20,783) |
Financial Collateral Received/Pledged | (200) | (6,904) |
Net Amounts | 10,336 | 6,389 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 33,327 | 58,740 |
Offsetting Derivative Instruments | (25,610) | (20,783) |
Financial Collateral Received/Pledged | (5,184) | (26,691) |
Net Amounts | 2,533 | 11,266 |
NJRES | Physical commodity contracts | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 10,164 | 9,981 |
Offsetting Derivative Instruments | (540) | (2,837) |
Financial Collateral Received/Pledged | (200) | (755) |
Net Amounts | 9,424 | 6,389 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 3,048 | 12,872 |
Offsetting Derivative Instruments | (540) | (2,837) |
Financial Collateral Received/Pledged | 0 | 1,200 |
Net Amounts | 2,508 | 11,235 |
NJRES | Financial commodity contracts | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 25,980 | 24,094 |
Offsetting Derivative Instruments | (25,068) | (17,945) |
Financial Collateral Received/Pledged | 0 | (6,149) |
Net Amounts | 912 | 0 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 30,252 | 45,836 |
Offsetting Derivative Instruments | (25,068) | (17,945) |
Financial Collateral Received/Pledged | (5,184) | (27,891) |
Net Amounts | 0 | 0 |
NJRES | Foreign currency contracts | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 2 | 1 |
Offsetting Derivative Instruments | (2) | (1) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 0 | 0 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 27 | 32 |
Offsetting Derivative Instruments | (2) | (1) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 25 | 31 |
NJNG | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 2,304 | 1,115 |
Offsetting Derivative Instruments | (930) | (911) |
Financial Collateral Received/Pledged | (1,312) | 0 |
Net Amounts | 62 | 204 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 5,337 | 27,592 |
Offsetting Derivative Instruments | (930) | (911) |
Financial Collateral Received/Pledged | 0 | (2,485) |
Net Amounts | 4,407 | 24,196 |
NJNG | Physical commodity contracts | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 64 | 235 |
Offsetting Derivative Instruments | (2) | (31) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 62 | 204 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 17 | 1,154 |
Offsetting Derivative Instruments | (2) | (31) |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | 15 | 1,123 |
NJNG | Financial commodity contracts | ||
Derivative assets: | ||
Amounts Presented in Balance Sheets | 2,240 | 880 |
Offsetting Derivative Instruments | (928) | (880) |
Financial Collateral Received/Pledged | (1,312) | 0 |
Net Amounts | 0 | 0 |
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 928 | 3,365 |
Offsetting Derivative Instruments | (928) | (880) |
Financial Collateral Received/Pledged | 0 | (2,485) |
Net Amounts | 0 | 0 |
NJNG | Interest rate contracts | ||
Derivative liabilities: | ||
Amounts Presented in Balance Sheets | 4,392 | 23,073 |
Offsetting Derivative Instruments | 0 | 0 |
Financial Collateral Received/Pledged | 0 | 0 |
Net Amounts | $ 4,392 | $ 23,073 |
DERIVATIVE INSTRUMENTS - INCOME
DERIVATIVE INSTRUMENTS - INCOME STATEMENT RELATED DISCLOSURES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Foreign currency contracts | Gas purchases | Cash Flow Hedging | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) | $ 29 | $ (35) | ||
Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion) | 30 | 42 | ||
Not Designated as Hedging Instrument | NJRES | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | $ 39,174 | 25,365 | $ 1,421 | 57,278 |
Not Designated as Hedging Instrument | NJRES | Physical commodity contracts | Operating revenues | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | 4,982 | 9,128 | 6,725 | 21,002 |
Not Designated as Hedging Instrument | NJRES | Physical commodity contracts | Gas purchases | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | (3,982) | (5,583) | (12,781) | (26,820) |
Not Designated as Hedging Instrument | NJRES | Financial commodity contracts | Gas purchases | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | 38,121 | 21,820 | 7,510 | 63,096 |
Not Designated as Hedging Instrument | NJRES | Foreign currency contracts | Gas purchases | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | 53 | 0 | (33) | 0 |
Not Designated as Hedging Instrument | NJNG | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | (5,888) | (30,750) | 26,711 | (34,019) |
Not Designated as Hedging Instrument | NJNG | Physical commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | (3,780) | (14,528) | (2,730) | (14,528) |
Not Designated as Hedging Instrument | NJNG | Financial commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | (418) | (5,151) | 10,760 | (10,786) |
Not Designated as Hedging Instrument | NJNG | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in income on derivatives | $ (1,690) | $ (11,071) | $ 18,681 | $ (8,705) |
DERIVATIVE INSTRUMENTS - VOLUME
DERIVATIVE INSTRUMENTS - VOLUME (Details) | Mar. 31, 2017USD ($)Bcfcertificate | Sep. 30, 2016Bcf | Jun. 01, 2015USD ($) |
Derivative [Line Items] | |||
Derivative, notional amount | $ | $ 125,000,000 | ||
Foreign currency contracts | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ | $ 2,200,000 | ||
NJNG | Long | Futures | |||
Derivative [Line Items] | |||
Volume | 24.6 | 23.6 | |
NJNG | Long | Physical | |||
Derivative [Line Items] | |||
Volume | 5.7 | 9.2 | |
NJRES | Physical commodity contracts | |||
Derivative [Line Items] | |||
Number of SRECs | certificate | 314,500 | ||
NJRES | Long | Physical | |||
Derivative [Line Items] | |||
Volume | 64 | 94.6 | |
NJRES | Long | Options | |||
Derivative [Line Items] | |||
Volume | 0 | 1.2 | |
NJRES | Short | Futures | |||
Derivative [Line Items] | |||
Volume | 64.2 | 79.1 |
DERIVATIVE INSTRUMENTS - BROKER
DERIVATIVE INSTRUMENTS - BROKER MARGIN DEPOSITS (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 30, 2016 |
NJNG | ||
Derivative [Line Items] | ||
Broker margin - Current assets | $ 3,354 | $ 4,822 |
NJRES | ||
Derivative [Line Items] | ||
Broker margin - Current assets | $ 20,250 | $ 42,822 |
DERIVATIVE INSTRUMENTS - CREDIT
DERIVATIVE INSTRUMENTS - CREDIT RISK EXPOSURE (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2017 | Sep. 30, 2016 | |
Credit Risk Exposure [Line Items] | ||
Gross Credit Exposure | $ 226,787 | |
Derivative, net liability position, aggregate fair value | 4,500 | $ 23,100 |
Additional collateral, aggregate fair value | 4,500 | $ 23,100 |
Investment grade | ||
Credit Risk Exposure [Line Items] | ||
Gross Credit Exposure | 155,318 | |
Noninvestment grade | ||
Credit Risk Exposure [Line Items] | ||
Gross Credit Exposure | 35,381 | |
Internally rated investment grade | ||
Credit Risk Exposure [Line Items] | ||
Gross Credit Exposure | 8,974 | |
Internally rated noninvestment grade | ||
Credit Risk Exposure [Line Items] | ||
Gross Credit Exposure | $ 27,114 |
FAIR VALUE - DEBT (Details)
FAIR VALUE - DEBT (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 30, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Capital leases | $ 45,900 | $ 42,200 |
Level 2 | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 1,047,045 | 1,082,845 |
Level 2 | Fair market value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 1,041,750 | $ 1,131,077 |
FAIR VALUE - HIERARCHY (Details
FAIR VALUE - HIERARCHY (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 30, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 38,450 | $ 35,191 |
Liabilities | 38,664 | 86,332 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale equity securities - energy industry | 65,884 | 55,789 |
Other | 1,249 | 1,444 |
Total assets at fair value | 170,698 | 126,496 |
Total liabilities at fair value | 38,664 | 86,332 |
Fair Value, Measurements, Recurring | Physical commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 10,228 | 10,216 |
Liabilities | 3,065 | 14,026 |
Fair Value, Measurements, Recurring | Financial commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 28,220 | 24,974 |
Liabilities | 31,180 | 49,201 |
Fair Value, Measurements, Recurring | Foreign currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2 | 1 |
Liabilities | 27 | 32 |
Fair Value, Measurements, Recurring | Interest rate contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 4,392 | 23,073 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets, (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale equity securities - energy industry | 65,884 | 55,789 |
Other | 1,249 | 1,444 |
Total assets at fair value | 160,468 | 116,279 |
Total liabilities at fair value | 31,180 | 49,201 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets, (Level 1) | Physical commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets, (Level 1) | Financial commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 28,220 | 24,974 |
Liabilities | 31,180 | 49,201 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets, (Level 1) | Foreign currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets, (Level 1) | Interest rate contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale equity securities - energy industry | 0 | 0 |
Other | 0 | 0 |
Total assets at fair value | 10,230 | 10,217 |
Total liabilities at fair value | 7,484 | 37,131 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Physical commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 10,228 | 10,216 |
Liabilities | 3,065 | 14,026 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Financial commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Foreign currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2 | 1 |
Liabilities | 27 | 32 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Interest rate contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 4,392 | 23,073 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale equity securities - energy industry | 0 | 0 |
Other | 0 | 0 |
Total assets at fair value | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Physical commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Financial commodity contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Foreign currency contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Interest rate contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Money market funds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 65,115 | 34,072 |
Money market funds | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets, (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 65,115 | 34,072 |
Money market funds | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Money market funds | Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 0 | $ 0 |
INVESTMENTS IN EQUITY METHOD 54
INVESTMENTS IN EQUITY METHOD INVESTEES (Details) $ in Thousands | 6 Months Ended | |
Mar. 31, 2017USD ($)Investormi | Sep. 30, 2016USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||
Investments in equity investees | $ 152,891 | $ 141,148 |
Steckman Ridge | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments in equity investees | 121,809 | 123,155 |
Steckman Ridge | Equity Method Investee | ||
Schedule of Equity Method Investments [Line Items] | ||
Total outstanding principal balance of loans | 70,400 | 70,400 |
PennEast | ||
Schedule of Equity Method Investments [Line Items] | ||
Investments in equity investees | $ 31,082 | $ 17,993 |
Number of investors in pipeline construction and operation | Investor | 5 | |
Construction plan, project area (in miles) | mi | 120 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income, as reported | $ 114,702 | $ 73,353 | $ 149,631 | $ 123,635 |
Basic earnings per share | ||||
Weighted average shares of common stock outstanding-basic (shares) | 86,275,000 | 85,834,000 | 86,182,000 | 85,754,000 |
Basic earnings per common share (usd per share) | $ 1.33 | $ 0.85 | $ 1.74 | $ 1.44 |
Diluted earnings per share | ||||
Weighted average shares of common stock outstanding-basic (shares) | 86,275,000 | 85,834,000 | 86,182,000 | 85,754,000 |
Incremental shares | 826,000 | 1,024,000 | 811,000 | 1,024,000 |
Weighted average shares of common stock outstanding-diluted (shares) | 87,101,000 | 86,858,000 | 86,993,000 | 86,778,000 |
Diluted (loss) earnings per common share (usd per share) | $ 1.32 | $ 0.84 | $ 1.72 | $ 1.42 |
Anti-dilutive shares excluded from the calculation of diluted earnings per share | 0 | 0 | 0 | 0 |
COMMON STOCK EQUITY - NARRATIVE
COMMON STOCK EQUITY - NARRATIVE (Details) - USD ($) shares in Thousands, $ in Millions | 1 Months Ended | 6 Months Ended | |
Dec. 31, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | |
Equity [Abstract] | |||
Number of treasury shares issued from raising of equity through the DRP | 5,000 | 279 | 260 |
Equity raised through the DRP | $ 9.7 | $ 8.2 |
COMMON STOCK EQUITY - CHANGE IN
COMMON STOCK EQUITY - CHANGE IN COMMON STOCK EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period (shares) | 86,086,355 | ||||
Balance as of beginning of period | $ 1,166,591 | ||||
Net income | $ 114,702 | $ 73,353 | 149,631 | $ 123,635 | |
Other comprehensive income | $ 1,726 | $ 4,795 | 7,558 | $ 8,719 | |
Common stock issued: | |||||
Incentive plan | $ 5,369 | ||||
Dividend reinvestment plan (in shares) | 5,000,000 | 279,000 | 260,000 | ||
Dividend reinvestment plan | $ 9,728 | ||||
Cash dividend declared ($.51 per share) | (44,003) | ||||
Treasury stock and other | $ (8,594) | ||||
Balance as of end of period (shares) | 86,363,986 | 86,363,986 | |||
Balance as of end of period | $ 1,286,280 | $ 1,286,280 | |||
Cash dividend declared per share (usd per share) | $ 0.255 | $ 0.24 | $ 0.51 | $ 0.48 | |
Common Stock | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period (shares) | 86,086,000 | ||||
Balance as of beginning of period | $ 221,654 | ||||
Common stock issued: | |||||
Incentive plan (in shares) | 232,000 | ||||
Incentive plan | $ 581 | ||||
Dividend reinvestment plan (in shares) | 279,000 | ||||
Treasury stock and other (shares) | (233,000) | ||||
Balance as of end of period (shares) | 86,364,000 | 86,364,000 | |||
Balance as of end of period | $ 222,235 | $ 222,235 | |||
Premium on Common Stock | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period | 215,580 | ||||
Common stock issued: | |||||
Incentive plan | 4,788 | ||||
Dividend reinvestment plan | (1,266) | ||||
Treasury stock and other | (28) | ||||
Balance as of end of period | 219,074 | 219,074 | |||
Accumulated Other Comprehensive (Loss) Income | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period | (9,323) | $ (5,470) | (15,155) | $ (9,394) | |
Other comprehensive income | 7,558 | ||||
Common stock issued: | |||||
Balance as of end of period | $ (5,470) | (7,597) | $ (675) | (7,597) | $ (675) |
Treasury Stock And Other | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period | (81,044) | ||||
Common stock issued: | |||||
Dividend reinvestment plan | 10,994 | ||||
Treasury stock and other | (8,566) | ||||
Balance as of end of period | (78,616) | (78,616) | |||
Retained Earnings | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance as of beginning of period | 825,556 | ||||
Net income | 149,631 | ||||
Common stock issued: | |||||
Cash dividend declared ($.51 per share) | (44,003) | ||||
Balance as of end of period | $ 931,184 | $ 931,184 |
COMMON STOCK EQUITY - ACCUMULAT
COMMON STOCK EQUITY - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance as of beginning of period | $ 1,166,591 | |||
Other comprehensive income (loss), before reclassifications, net of tax | $ 3,054 | $ 4,519 | 10,096 | $ 8,179 |
Amounts reclassified from accumulated other comprehensive income, net of tax | (1,328) | 276 | (2,538) | 540 |
Other comprehensive income | 1,726 | 4,795 | 7,558 | 8,719 |
Balance as of end of period | 1,286,280 | 1,286,280 | ||
Available for Sale Securities | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance as of beginning of period | 9,713 | 10,086 | 4,198 | 6,385 |
Other comprehensive income (loss), before reclassifications, net of tax | 3,054 | 4,500 | 10,096 | 8,201 |
Amounts reclassified from accumulated other comprehensive income, net of tax | (1,646) | 0 | (3,173) | 0 |
Other comprehensive income | 1,408 | 4,500 | 6,923 | 8,201 |
Balance as of end of period | 11,121 | 14,586 | 11,121 | 14,586 |
Tax on other comprehensive income (loss) before reclassifications | 1,808 | 3,154 | 6,648 | 5,768 |
Tax on amounts reclassified from accumulated other comprehensive income | (1,138) | 0 | (2,192) | 0 |
Tax on net current-period other comprehensive income (loss) | 670 | 3,154 | 4,456 | 5,768 |
Cash Flow Hedges | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance as of beginning of period | 0 | (33) | 0 | 0 |
Other comprehensive income (loss), before reclassifications, net of tax | 0 | 19 | 0 | (22) |
Amounts reclassified from accumulated other comprehensive income, net of tax | 0 | 19 | 0 | 27 |
Other comprehensive income | 0 | 38 | 0 | 5 |
Balance as of end of period | 0 | 5 | 0 | 5 |
Tax on other comprehensive income (loss) before reclassifications | 0 | 10 | 0 | (13) |
Tax on amounts reclassified from accumulated other comprehensive income | 0 | 11 | 0 | 15 |
Tax on net current-period other comprehensive income (loss) | 0 | 21 | 0 | 2 |
Postemployment Benefit Obligation | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance as of beginning of period | (19,036) | (15,523) | (19,353) | (15,779) |
Other comprehensive income (loss), before reclassifications, net of tax | 0 | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income, net of tax | 318 | 257 | 635 | 513 |
Other comprehensive income | 318 | 257 | 635 | 513 |
Balance as of end of period | (18,718) | (15,266) | (18,718) | (15,266) |
Tax on other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 |
Tax on amounts reclassified from accumulated other comprehensive income | 217 | 175 | 434 | 349 |
Tax on net current-period other comprehensive income (loss) | 217 | 175 | 434 | 349 |
Total | ||||
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | ||||
Balance as of beginning of period | (9,323) | (5,470) | (15,155) | (9,394) |
Other comprehensive income | 7,558 | |||
Balance as of end of period | (7,597) | (675) | (7,597) | (675) |
Tax on other comprehensive income (loss) before reclassifications | 1,808 | 3,164 | 6,648 | 5,755 |
Tax on amounts reclassified from accumulated other comprehensive income | (921) | 186 | (1,758) | 364 |
Tax on net current-period other comprehensive income (loss) | $ 887 | $ 3,350 | $ 4,890 | $ 6,119 |
DEBT - CREDIT FACILITIES (Detai
DEBT - CREDIT FACILITIES (Details) - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 |
NJR | Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit outstanding, amount | $ 13,400,000 | $ 14,400,000 |
NJR | Notes | ||
Line of Credit Facility [Line Items] | ||
Amount outstanding at end of period | $ 237,900,000 | $ 121,700,000 |
Weighted average interest rate at end of period | 1.75% | 1.43% |
Amount available at end of period | $ 173,686,000 | $ 288,910,000 |
NJR | Revolving Credit Facility | Committed Credit Facilities Due September 2020 | ||
Line of Credit Facility [Line Items] | ||
Bank revolving credit facilities | 425,000,000 | 425,000,000 |
NJNG | Commercial Paper | ||
Line of Credit Facility [Line Items] | ||
Amount outstanding at end of period | $ 0 | $ 0 |
Weighted average interest rate at end of period | 0.00% | 0.00% |
Amount available at end of period | $ 249,269,000 | $ 249,269,000 |
NJNG | Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Letters of credit outstanding, amount | 731,000 | 731,000 |
NJNG | Revolving Credit Facility | Committed Credit Facilities Due May 2019 | ||
Line of Credit Facility [Line Items] | ||
Bank revolving credit facilities | $ 250,000,000 | $ 250,000,000 |
DEBT - SCHEDULE OF LONG TERM DE
DEBT - SCHEDULE OF LONG TERM DEBT (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | |
Debt Instrument [Line Items] | |||
Payments of long-term debt | $ 41,660 | $ 5,807 | |
Proceeds from sale-leaseback transaction | 9,587 | 7,107 | |
NJNG | |||
Debt Instrument [Line Items] | |||
Proceeds from sale-leaseback transaction | 9,600 | $ 7,100 | |
Sale leaseback transaction, other payments required | $ 1,000 | ||
NJNG | First Mortgage | |||
Debt Instrument [Line Items] | |||
Payments of long-term debt | $ 35,800 | ||
Series II | NJNG | First Mortgage | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.50% | 4.50% | |
Series KK | NJNG | First Mortgage | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.90% | 4.90% |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | |
Components of net periodic cost | |||||
Discretionary contribution | $ 30,000,000 | $ 0 | |||
Pension | |||||
Components of net periodic cost | |||||
Service cost | $ 2,087,000 | $ 1,898,000 | 4,174,000 | $ 3,796,000 | |
Interest cost | 2,442,000 | 2,835,000 | 4,885,000 | 5,671,000 | |
Expected return on plan assets | (4,828,000) | (5,030,000) | (9,656,000) | (10,059,000) | |
Recognized actuarial loss | 2,206,000 | 1,821,000 | 4,413,000 | 3,641,000 | |
Prior service cost amortization | 28,000 | 27,000 | 55,000 | 55,000 | |
Net periodic benefit cost | 1,935,000 | 1,551,000 | 3,871,000 | 3,104,000 | |
OPEB | |||||
Components of net periodic cost | |||||
Service cost | 1,095,000 | 1,131,000 | 2,190,000 | 2,261,000 | |
Interest cost | 1,387,000 | 1,564,000 | 2,773,000 | 3,128,000 | |
Expected return on plan assets | (1,191,000) | (1,211,000) | (2,383,000) | (2,422,000) | |
Recognized actuarial loss | 1,092,000 | 818,000 | 2,185,000 | 1,637,000 | |
Prior service cost amortization | (91,000) | (91,000) | (182,000) | (182,000) | |
Net periodic benefit cost | $ 2,292,000 | $ 2,211,000 | $ 4,583,000 | $ 4,422,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Loss Carryforwards [Line Items] | ||||||
Forecasted effective tax rate | 15.60% | 17.70% | ||||
Forecasted tax credits, net of deferred tax | $ 27,100 | |||||
Excess tax benefits associated with vesting of share-based awards | $ 1,500 | $ 1,700 | ||||
Actual effective tax rate since tax effects of awards are treated as discrete item | 14.80% | 16.60% | ||||
Deferred tax assets, federal | 27,500 | $ 27,500 | 27,500 | |||
Deferred tax asset, state | 20,200 | 20,200 | 18,200 | |||
ITC carryforward | 111,000 | $ 111,000 | 74,000 | |||
ITC carryforward, expiration period | 20 years | |||||
Federal | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating loss carryforwards | 78,700 | $ 78,700 | 78,700 | |||
State | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating loss carryforwards | $ 344,700 | $ 344,700 | 310,600 | |||
Valuation allowance | $ 262 | |||||
Scenario, Forecast | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Forecasted tax credits, net of deferred tax | $ 34,600 |
COMMITMENTS AND CONTINGENT LI63
COMMITMENTS AND CONTINGENT LIABILITIES - SCHEDULE OF FUTURE COMMITTED EXPENSES (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2017USD ($) | |
Long-term Purchase Commitment [Line Items] | |
Current charges recoverable through BGSS | $ 40,000 |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2,017 | 322,623 |
2,018 | 320,435 |
2,019 | 233,395 |
2,020 | 148,081 |
2,021 | 114,335 |
Thereafter | 763,226 |
NJRES | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2,017 | 237,389 |
2,018 | 198,769 |
2,019 | 90,647 |
2,020 | 21,050 |
2,021 | 16,427 |
Thereafter | 18,983 |
NJRES | Natural gas purchases | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2,017 | 179,517 |
2,018 | 121,391 |
2,019 | 55,395 |
2,020 | 0 |
2,021 | 0 |
Thereafter | 0 |
NJRES | Storage demand fees | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2,017 | 19,525 |
2,018 | 28,869 |
2,019 | 16,195 |
2,020 | 12,913 |
2,021 | 8,822 |
Thereafter | 8,580 |
NJRES | Pipeline demand fees | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2,017 | 38,347 |
2,018 | 48,509 |
2,019 | 19,057 |
2,020 | 8,137 |
2,021 | 7,605 |
Thereafter | $ 10,403 |
NJRES | Minimum | |
Long-term Purchase Commitment [Line Items] | |
Storage and pipeline capacity, contract term | 1 year |
NJRES | Maximum | |
Long-term Purchase Commitment [Line Items] | |
Storage and pipeline capacity, contract term | 10 years |
NJNG | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2,017 | $ 85,234 |
2,018 | 121,666 |
2,019 | 142,748 |
2,020 | 127,031 |
2,021 | 97,908 |
Thereafter | 744,243 |
NJNG | Natural gas purchases | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2,017 | 45,266 |
2,018 | 11,250 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
Thereafter | 0 |
NJNG | Storage demand fees | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2,017 | 14,568 |
2,018 | 29,187 |
2,019 | 25,772 |
2,020 | 14,476 |
2,021 | 7,802 |
Thereafter | 11,705 |
NJNG | Pipeline demand fees | |
Natural Gas Purchases and Future Demand Fees, Next Five Fiscal Years | |
2,017 | 25,400 |
2,018 | 81,229 |
2,019 | 116,976 |
2,020 | 112,555 |
2,021 | 90,106 |
Thereafter | $ 732,538 |
COMMITMENTS AND CONTINGENT LI64
COMMITMENTS AND CONTINGENT LIABILITIES - LEGAL PROCEEDINGS (Details) | Jun. 29, 2016USD ($) | Mar. 31, 2017USD ($)site | Sep. 30, 2016USD ($) |
Site Contingency [Line Items] | |||
Number of MGP sites | site | 5 | ||
Recovery of expenditures, including carrying costs, rolling period approved by the BPU | 7 years | ||
Regulatory assets | $ 396,924,000 | $ 441,294,000 | |
Manufactured gas plant remediation | 165,849,000 | 172,000,000 | |
Minimum | |||
Site Contingency [Line Items] | |||
Litigation settlement, gross | 143,900,000 | ||
Loss contingency, estimate of possible loss | 600,000 | ||
Maximum | |||
Site Contingency [Line Items] | |||
Litigation settlement, gross | 231,600,000 | ||
Loss contingency, estimate of possible loss | 3,200,000 | ||
Expended, net of recoveries | |||
Site Contingency [Line Items] | |||
Regulatory assets | 19,067,000 | 19,595,000 | |
Liability for future expenditures | |||
Site Contingency [Line Items] | |||
Regulatory assets | $ 165,849,000 | $ 172,000,000 | |
SBC | December 2015 SBC Filing | |||
Site Contingency [Line Items] | |||
Public utilities, approved rate, amount | $ 9,400,000 |
BUSINESS SEGMENT AND OTHER OP65
BUSINESS SEGMENT AND OTHER OPERATIONS DATA - RECONCILIATION OF SEGMENT INCOME TO CONSOLIDATED (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Utility | $ 295,546 | $ 242,536 | $ 481,102 | $ 394,142 |
Nonutility | 438,000 | 331,657 | 793,472 | 624,309 |
Total operating revenues | 733,546 | 574,193 | 1,274,574 | 1,018,451 |
Depreciation and amortization | 20,328 | 17,744 | 39,588 | 34,226 |
Interest income | 108 | 53 | 183 | 123 |
Interest expense, net of capitalized interest | 11,436 | 7,369 | 22,051 | 14,146 |
Income tax provision (benefit) | 23,932 | 17,815 | 25,950 | 24,537 |
Equity in earnings of affiliates | 5,079 | 2,402 | 7,390 | 4,808 |
Net financial earnings | 104,106 | 77,905 | 144,489 | 129,172 |
Capital expenditures | 78,209 | 73,514 | 164,020 | 168,357 |
Investments in equity investees | 5,902 | 3,102 | $ 10,538 | $ 5,948 |
Canada | ||||
Segment Reporting Information [Line Items] | ||||
Percentage to total operating revenues | 1.50% | 2.90% | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total operating revenues | 728,776 | 570,156 | $ 1,259,080 | $ 1,008,249 |
Depreciation and amortization | 20,205 | 17,499 | 39,293 | 33,871 |
Interest income | 609 | 510 | 1,146 | 914 |
Interest expense, net of capitalized interest | 11,577 | 7,540 | 22,352 | 14,431 |
Income tax provision (benefit) | 23,522 | 18,123 | 24,995 | 26,441 |
Net financial earnings | 103,670 | 80,007 | 142,734 | 131,233 |
Capital expenditures | 77,864 | 73,242 | 163,504 | 167,288 |
Operating Segments | Natural Gas Distribution | ||||
Segment Reporting Information [Line Items] | ||||
Utility | 295,546 | 242,536 | 481,102 | 394,142 |
Depreciation and amortization | 12,263 | 11,598 | 24,293 | 22,836 |
Interest income | 97 | 60 | 172 | 128 |
Interest expense, net of capitalized interest | 6,392 | 4,690 | 13,216 | 9,278 |
Income tax provision (benefit) | 30,499 | 22,704 | 45,386 | 36,211 |
Net financial earnings | 60,233 | 48,967 | 90,581 | 79,893 |
Capital expenditures | 34,744 | 47,366 | 73,599 | 96,406 |
Operating Segments | Clean Energy Ventures | ||||
Segment Reporting Information [Line Items] | ||||
Nonutility | 12,943 | 7,662 | 20,510 | 15,456 |
Depreciation and amortization | 7,923 | 5,876 | 14,964 | 10,986 |
Interest expense, net of capitalized interest | 4,055 | 2,552 | 7,379 | 4,605 |
Income tax provision (benefit) | (24,756) | (13,916) | (36,643) | (25,650) |
Net financial earnings | 22,743 | 11,807 | 25,585 | 19,459 |
Capital expenditures | 43,120 | 25,876 | 89,905 | 70,882 |
Operating Segments | Energy Services | ||||
Segment Reporting Information [Line Items] | ||||
Nonutility | 417,608 | 316,703 | 756,538 | 592,885 |
Depreciation and amortization | 17 | 23 | 33 | 46 |
Interest income | 0 | 0 | 0 | 72 |
Interest expense, net of capitalized interest | 716 | 168 | 1,287 | 376 |
Income tax provision (benefit) | 16,277 | 7,805 | 13,101 | 12,710 |
Net financial earnings | 15,746 | 17,005 | 19,233 | 27,309 |
Operating Segments | Midstream | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 2 | 2 | 3 | 3 |
Interest income | 512 | 450 | 974 | 714 |
Interest expense, net of capitalized interest | 414 | 130 | 470 | 172 |
Income tax provision (benefit) | 1,502 | 1,530 | 3,151 | 3,170 |
Equity in earnings of affiliates | 6,119 | 3,508 | 9,450 | 7,053 |
Net financial earnings | 4,948 | 2,228 | 7,335 | 4,572 |
Investments in equity investees | 5,902 | 3,102 | 10,538 | 5,948 |
Intercompany | ||||
Segment Reporting Information [Line Items] | ||||
Nonutility | 1,055 | 639 | 2,086 | 1,536 |
Intercompany | Energy Services | ||||
Segment Reporting Information [Line Items] | ||||
Nonutility | 2,679 | 3,255 | 930 | 5,766 |
Home Services and Other | ||||
Segment Reporting Information [Line Items] | ||||
Nonutility | 7,449 | 7,292 | 16,424 | 15,968 |
Depreciation and amortization | 199 | 237 | 420 | 464 |
Interest income | 132 | 123 | 253 | 160 |
Interest expense, net of capitalized interest | 123 | 105 | 197 | 105 |
Income tax provision (benefit) | 1,066 | (1,474) | 821 | (2,604) |
Net financial earnings | 708 | (2,022) | 2,250 | (1,763) |
Capital expenditures | 345 | 272 | 516 | 1,069 |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Nonutility | (3,734) | (3,894) | (3,016) | (7,302) |
Depreciation and amortization | (76) | 8 | (125) | (109) |
Interest income | (633) | (580) | (1,216) | (951) |
Interest expense, net of capitalized interest | (264) | (276) | (498) | (390) |
Income tax provision (benefit) | (656) | 1,166 | 134 | 700 |
Equity in earnings of affiliates | (1,040) | (1,106) | (2,060) | (2,245) |
Net financial earnings | $ (272) | $ (80) | $ (495) | $ (298) |
BUSINESS SEGMENT AND OTHER OP66
BUSINESS SEGMENT AND OTHER OPERATIONS DATA - NET FINANCIAL EARNINGS (LOSS) RECONCILIATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting [Abstract] | ||||
Net financial earnings | $ 104,106 | $ 77,905 | $ 144,489 | $ 129,172 |
Less: | ||||
Unrealized (gain) loss on derivative instruments and related transactions | (54,855) | 3,170 | (26,553) | 2,035 |
Tax effect | 19,679 | (1,152) | 9,922 | (739) |
Effects of economic hedging related to natural gas inventory | 34,328 | (1,054) | 16,389 | 2,759 |
Tax effect | (12,334) | 384 | (6,130) | (1,001) |
Net income to NFE tax adjustment | 2,586 | 3,204 | 1,230 | 2,483 |
NET INCOME | $ 114,702 | $ 73,353 | $ 149,631 | $ 123,635 |
BUSINESS SEGMENT AND OTHER OP67
BUSINESS SEGMENT AND OTHER OPERATIONS DATA - RECONCILIATION OF SEGMENT ASSETS TO CONSOLIDATED (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Sep. 30, 2016 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 3,857,359 | $ 3,718,570 |
Operating Segments | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 3,822,676 | 3,696,982 |
Operating Segments | Natural Gas Distribution | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 2,572,576 | 2,517,401 |
Operating Segments | Energy Services | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 328,372 | 327,626 |
Operating Segments | Clean Energy Ventures | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 709,289 | 665,696 |
Operating Segments | Midstream | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 212,439 | 186,259 |
Home Services and Other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 126,255 | 109,487 |
Intercompany Assets | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ (91,572) | $ (87,899) |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | Apr. 01, 2010USD ($)Bcf | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2017USD ($)Bcf / dcontract | Mar. 31, 2016USD ($) | Sep. 30, 2016USD ($) |
Related Party Transaction [Line Items] | ||||||
Demand fees expense recognized pertaining to related party agreement | $ 2,072 | $ 2,077 | $ 4,183 | $ 4,151 | ||
Demand fees payable | 1,156 | $ 1,156 | $ 1,150 | |||
Number of asset management agreements | contract | 3 | |||||
NJNG to NJRES Affilate | ||||||
Related Party Transaction [Line Items] | ||||||
Asset management agreement, period | 10 years | |||||
NJNG to Steckman RIdge Affiliate | ||||||
Related Party Transaction [Line Items] | ||||||
Natural gas sold at cost under asset management agreement (in Bcf) | Bcf | 3 | |||||
Approximate annual demand fees under agreement | $ 9,300 | |||||
Demand fees expense recognized pertaining to related party agreement | 1,383 | 1,385 | $ 2,793 | 2,774 | ||
Demand fees payable | 780 | 780 | 775 | |||
NJRES to Steckman Ridge Affiliate | ||||||
Related Party Transaction [Line Items] | ||||||
Demand fees expense recognized pertaining to related party agreement | 689 | $ 692 | 1,390 | $ 1,377 | ||
Demand fees payable | $ 376 | $ 376 | $ 375 | |||
NJNG to PennEast Affiliate | ||||||
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 |