New
Jersey
|
22-2376465
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
Number)
|
1415
Wyckoff Road, Wall, New Jersey - 07719
|
732-938-1489
|
(Address
of principal
executive
offices)
|
(Registrant’s
telephone number,
including
area code)
|
Common
Stock - $2.50 Par Value
|
New
York Stock Exchange
|
(Title
of each class)
|
(Name
of each exchange on which
registered)
|
· |
weather
and economic conditions;
|
· |
demographic
changes in the New Jersey Natural Gas (NJNG) service
territory;
|
· |
the
rate of NJNG customer growth;
|
· |
volatility
of natural gas commodity prices and its impact on customer usage,
NJR
Energy Services’ (NJRES) operations and on the Company’s risk management
efforts;
|
· |
changes
in rating agency requirements and/or credit ratings and their effect
on
availability and cost of capital to the
Company;
|
· |
commercial
and wholesale credit risks, including creditworthiness of customers
and
counterparties;
|
· |
the
ability to obtain governmental approvals and/or financing for the
construction, development and operation of certain non-regulated
energy
investments;
|
· |
risks
associated with the management of the Company’s joint ventures and
partnerships;
|
· |
the
impact of governmental regulation (including the regulation of
rates);
|
· |
fluctuations
in energy-related commodity prices;
|
· |
conversion
activity and other marketing efforts;
|
· |
actual
energy usage of NJNG’s customers;
|
· |
the
pace of deregulation of retail gas
markets;
|
· |
access
to adequate supplies of natural gas;
|
· |
the
regulatory and pricing policies of federal and state regulatory
agencies;
|
· |
changes
due to legislation at the federal and state
level;
|
· |
the
availability of an adequate number of appropriate counterparties
in the
wholesale energy trading market;
|
· |
sufficient
liquidity in the wholesale energy trading market and continued access
to
the capital markets;
|
· |
the
disallowance of recovery of environmental-related expenditures and
other
regulatory changes;
|
· |
environmental-related
and other litigation and other
uncertainties;
|
· |
the
effects and impacts of inflation on NJR and its subsidiaries
operations;
|
· |
change
in accounting pronouncements issued by the appropriate standard setting
bodies; and
|
· |
terrorist
attacks or threatened attacks on energy facilities or unrelated energy
companies.
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
||||||||||||
(Thousands, except per share data)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
OPERATING
REVENUES
|
$
|
1,024,636
|
$
|
1,064,422
|
$
|
1,766,101
|
$
|
2,228,998
|
|||||
OPERATING
EXPENSES
|
|||||||||||||
Gas
purchases
|
795,469
|
882,688
|
1,424,154
|
1,921,163
|
|||||||||
Operation
and maintenance
|
32,337
|
31,026
|
60,653
|
58,757
|
|||||||||
Regulatory
rider expenses
|
18,135
|
12,405
|
27,601
|
21,863
|
|||||||||
Depreciation
and amortization
|
8,986
|
8,612
|
17,888
|
17,188
|
|||||||||
Energy
and other taxes
|
30,268
|
26,003
|
44,220
|
44,670
|
|||||||||
Total
operating expenses
|
885,195
|
960,734
|
1,574,516
|
2,063,641
|
|||||||||
OPERATING
INCOME
|
139,441
|
103,688
|
191,585
|
165,357
|
|||||||||
Other
income and expense
|
1,650
|
1,874
|
3,639
|
3,516
|
|||||||||
Interest
charges, net
|
7,091
|
6,173
|
14,966
|
12,656
|
|||||||||
INCOME
BEFORE INCOME TAXES
|
134,000
|
99,389
|
180,258
|
156,217
|
|||||||||
Income
tax provision
|
53,473
|
39,188
|
71,607
|
61,752
|
|||||||||
NET
INCOME
|
$
|
80,527
|
$
|
60,201
|
$
|
108,651
|
$
|
94,465
|
|||||
EARNINGS
PER COMMON SHARE
|
|||||||||||||
BASIC
|
|
$2.89
|
|
$2.16
|
|
$3.91
|
|
$3.41
|
|||||
DILUTED
|
|
$2.87
|
|
$2.14
|
|
$3.89
|
|
$3.37
|
|||||
DIVIDENDS
PER COMMON SHARE
|
|
$0.38
|
|
$0.36
|
|
$0.76
|
|
$0.72
|
|||||
WEIGHTED
AVERAGE SHARES OUTSTANDING
|
|||||||||||||
BASIC
|
27,893
|
27,822
|
27,803
|
27,686
|
|||||||||
DILUTED
|
28,047
|
28,145
|
27,959
|
28,000
|
Six
Months Ended
March
31,
|
|||||||
(Thousands)
|
2007
|
2006
|
|||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net income
|
$
|
108,651
|
$
|
94,465
|
|||
ADJUSTMENTS
TO RECONCILE NET INCOME TO CASH FLOWS
|
|||||||
FROM
OPERATING ACTIVITIES
|
|||||||
Depreciation
and amortization
|
17,888
|
17,188
|
|||||
Unrealized
gain on derivatives
|
(192
|
)
|
(5,206
|
)
|
|||
Amortization
of deferred charges
|
151
|
152
|
|||||
Deferred
income taxes
|
15,231
|
(3,960
|
)
|
||||
Manufactured
gas plant remediation costs
|
(8,814
|
)
|
(16,457
|
)
|
|||
Gain
on asset sale
|
—
|
(617
|
)
|
||||
Cost
of removal - asset retirement obligations
|
(488
|
)
|
—
|
||||
Contribution
to employee benefit plans
|
(300
|
)
|
(300
|
)
|
|||
Changes
in:
|
|||||||
Working
capital
|
96,121
|
(8,833
|
)
|
||||
Other
noncurrent assets
|
23,229
|
25,509
|
|||||
Other
noncurrent liabilities
|
(9,854
|
)
|
(3,823
|
)
|
|||
Cash
flows from operating activities
|
241,623
|
98,118
|
|||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Proceeds
from common stock
|
9,976
|
13,192
|
|||||
Tax
benefit from stock options exercised
|
2,138
|
4,250
|
|||||
Proceeds
from long-term debt
|
—
|
35,800
|
|||||
Proceeds
from sale-leaseback transaction
|
5,482
|
4,090
|
|||||
Purchases
of treasury stock
|
—
|
(9,109
|
)
|
||||
Payments
of long-term debt
|
(1,950
|
)
|
(22,483
|
)
|
|||
Payments
of common stock dividends
|
(20,605
|
)
|
(19,285
|
)
|
|||
Payments
of short-term debt, net of proceeds
|
(153,700
|
)
|
(85,600
|
)
|
|||
Cash
flows used in financing activities
|
(158,659
|
)
|
(79,145
|
)
|
|||
CASH
FLOWS USED IN INVESTING ACTIVITIES
|
|||||||
Expenditures
for:
|
|||||||
Utility
plant
|
(24,540
|
)
|
(21,913
|
)
|
|||
Real
estate properties and other
|
(1,822
|
)
|
(1,720
|
)
|
|||
Cost
of removal
|
(2,736
|
)
|
(2,154
|
)
|
|||
Equity
investments
|
(52,500
|
)
|
—
|
||||
Investment
in restricted cash construction fund
|
—
|
(12,500
|
)
|
||||
Proceeds
from asset sales
|
1,792
|
3,006
|
|||||
Cash
flows used in investing activities
|
(79,806
|
)
|
(35,281
|
)
|
|||
Change
in cash and temporary investments
|
3,158
|
(16,308
|
)
|
||||
Cash
and temporary investments at beginning of period
|
4,991
|
25,008
|
|||||
Cash
and temporary investments at end of period
|
$
|
8,149
|
$
|
8,700
|
|||
CHANGES
IN COMPONENTS OF WORKING CAPITAL
|
|||||||
Receivables
|
$
|
(191,654
|
)
|
$
|
(134,008
|
)
|
|
Inventories
|
204,313
|
166
|
|||||
Underrecovered
gas costs
|
13,330
|
67,315
|
|||||
Gas
purchases payable
|
90,970
|
(24,190
|
)
|
||||
Prepaid
and accrued taxes, net
|
67,402
|
52,850
|
|||||
Accounts
payable and other
|
1,984
|
(12,959
|
)
|
||||
Restricted
broker margin accounts
|
(43,411
|
)
|
57,902
|
||||
Customers’
credit balances and deposits
|
(47,695
|
)
|
(9,069
|
)
|
|||
Other
current assets
|
882
|
(7,781
|
)
|
||||
Other
current liabilities
|
—
|
941
|
|||||
Total
|
$
|
96,121
|
$
|
(8,833
|
)
|
||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOWS INFORMATION
|
|||||||
Cash
paid for
|
|||||||
Interest
(net of amounts capitalized)
|
$
|
13,954
|
$
|
11,341
|
|||
Income
taxes
|
$
|
28,319
|
$
|
33,487
|
(Thousands)
|
March
31,
2007
|
September
30,
2006
|
|||||
PROPERTY,
PLANT AND EQUIPMENT
|
|||||||
Utility
plant, at cost
|
$
|
1,267,108
|
$
|
1,243,586
|
|||
Real
estate properties and other, at cost
|
27,702
|
27,136
|
|||||
1,294,810
|
1,270,722
|
||||||
Accumulated
depreciation and amortization
|
(348,283
|
)
|
(335,783
|
)
|
|||
Property,
plant and equipment, net
|
946,527
|
934,939
|
|||||
CURRENT
ASSETS
|
|||||||
Cash
and temporary investments
|
8,149
|
4,991
|
|||||
Accounts
receivable:
|
|||||||
Billed
|
285,188
|
133,615
|
|||||
Unbilled
|
53,915
|
12,543
|
|||||
Allowance
for doubtful accounts
|
(3,970
|
)
|
(2,679
|
)
|
|||
Regulatory
assets
|
8,105
|
8,105
|
|||||
Gas
in storage, at average cost
|
305,737
|
512,942
|
|||||
Materials
and supplies, at average cost
|
3,806
|
3,599
|
|||||
Prepaid
state taxes
|
—
|
26,343
|
|||||
Derivatives,
at fair value
|
75,430
|
223,559
|
|||||
Broker
margin account
|
60,024
|
30,833
|
|||||
Other
|
10,898
|
11,665
|
|||||
Total
current assets
|
807,282
|
965,516
|
|||||
NONCURRENT
ASSETS
|
|||||||
Equity
investments
|
82,709
|
27,208
|
|||||
Regulatory
assets
|
311,061
|
322,986
|
|||||
Derivatives,
at fair value
|
40,731
|
94,638
|
|||||
Prepaid
pension
|
19,483
|
21,045
|
|||||
Restricted
cash construction fund
|
8,500
|
8,500
|
|||||
Deferred
finance charges
|
8,089
|
8,876
|
|||||
Other
|
3,644
|
15,220
|
|||||
Total
noncurrent assets
|
474,217
|
498,473
|
|||||
Total
Assets
|
$
|
2,228,026
|
$
|
2,398,928
|
(Thousands)
|
March
31,
2007
|
September
30,
2006
|
|||||
CAPITALIZATION
|
|||||||
Common
stock equity
|
$
|
652,805
|
$
|
621,662
|
|||
Long-term
debt
|
335,477
|
332,332
|
|||||
Total
capitalization
|
988,282
|
953,994
|
|||||
CURRENT
LIABILITIES
|
|||||||
Current
maturities of long-term debt
|
4,126
|
3,739
|
|||||
Short-term
debt
|
127,000
|
280,700
|
|||||
Gas
purchases payable
|
388,849
|
297,879
|
|||||
Accounts
payable and other
|
48,895
|
46,823
|
|||||
Dividends
payable
|
10,615
|
10,056
|
|||||
Accrued
taxes
|
64,559
|
9,267
|
|||||
Regulatory
liabilities
|
15,040
|
1,710
|
|||||
Clean
energy program
|
10,775
|
8,244
|
|||||
Derivatives,
at fair value
|
106,955
|
163,557
|
|||||
Broker
margin account
|
—
|
14,220
|
|||||
Customers’
credit balances and deposits
|
13,265
|
60,960
|
|||||
Total
current liabilities
|
790,079
|
897,155
|
|||||
NONCURRENT
LIABILITIES
|
|||||||
Deferred
income taxes
|
179,748
|
227,100
|
|||||
Deferred
investment tax credits
|
7,674
|
7,835
|
|||||
Deferred
revenue
|
10,152
|
10,206
|
|||||
Derivatives,
at fair value
|
45,545
|
85,036
|
|||||
Manufactured
gas plant remediation
|
105,400
|
105,400
|
|||||
Regulatory
liabilities
|
60,488
|
64,220
|
|||||
Clean
energy program
|
4,897
|
11,335
|
|||||
Asset
retirement obligation
|
23,461
|
23,293
|
|||||
Other
|
12,300
|
13,354
|
|||||
Total
noncurrent liabilities
|
449,665
|
547,779
|
|||||
Total
Capitalization and Liabilities
|
$
|
2,228,026
|
$
|
2,398,928
|
(Thousands)
|
March
31,
2007
|
September
30,
2006
|
Recovery
Period
|
||||||
Regulatory
assets-current
|
|||||||||
WNC
|
$
|
8,105
|
$
|
8,105
|
Less
than one year (1)
|
|
|||
Total
|
$
|
8,105
|
$
|
8,105
|
|||||
Regulatory
assets-noncurrent
|
|||||||||
Remediation
costs (Notes 2 and 12)
|
|||||||||
Expended,
net
|
$
|
82,158
|
$
|
83,746
|
(2)
|
|
|||
Liability
for future expenditures
|
105,400
|
105,400
|
(3)
|
|
|||||
CIP
|
14,347
|
—
|
(4)
|
|
|||||
Deferred
income and other taxes
|
13,554
|
13,476
|
Various
|
||||||
Postemployment
benefit costs (Note 9)
|
1,966
|
2,117
|
Through
Sept. 2014 (5)
|
|
|||||
Derivatives
(Note 7)
|
70,850
|
82,451
|
Through
Oct. 2011 (6)
|
|
|||||
SBC
|
22,786
|
35,796
|
Various
(7)
|
|
|||||
Total
|
$
|
311,061
|
$
|
322,986
|
(
Thousands
)
|
March
31,
2007
|
September
30,
2006
|
|||||
Regulatory
liabilities-current
|
|||||||
Overrecovered
gas costs (1)
|
$
|
15,040
|
$
|
1,710
|
|||
Total
|
$
|
15,040
|
$
|
1,710
|
|||
Regulatory
liabilities-noncurrent
|
|||||||
Cost
of removal obligation (2)
|
$
|
59,340
|
$
|
58,161
|
|||
Market
development fund (MDF) (3)
|
1,148
|
6,059
|
|||||
Total
|
$
|
60,488
|
$
|
64,220
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
||||||||||
(Thousands)
|
2007
|
2006
|
2007
|
2006
|
|||||||
NJRES
|
$
|
507
|
$
|
5,173
|
$
|
275
|
$
|
8,767
|
|||
NJR
Energy
|
21
|
20
|
50
|
35
|
|||||||
Total
Consolidated
|
$
|
528
|
$
|
5,193
|
$
|
325
|
$
|
8,802
|
(Thousands)
|
March
31,
2007
|
September
30,
2006
|
||||||
NJNG
broker margin deposit
|
$
|
23,187
|
$
|
30,833
|
||||
NJRES
broker margin deposit (liability)
|
$
|
36,837
|
$
|
(14,220
|
)
|
(Thousands)
|
March
31,
2007
|
September
30,
2006
|
|||||
Steckman
Ridge
|
$
|
52,749
|
$
|
—
|
|||
Iroquois
|
21,349
|
20,414
|
|||||
Other
|
8,611
|
6,794
|
|||||
Total
|
$
|
82,709
|
$
|
27,208
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
|||||||||||
(Thousands)
|
2007
|
2006
|
2007
|
2006
|
||||||||
Net
income, as reported
|
$
|
80,527
|
$
|
60,201
|
$
|
108,651
|
$
|
94,465
|
||||
|
||||||||||||
Basic
earnings per share:
|
||||||||||||
Weighted
average shares of common stock outstanding - basic
|
27,893
|
27,822
|
27,803
|
27,686
|
||||||||
Basic
Earnings per Common Share
|
|
$2.89
|
|
$2.16
|
|
$3.91
|
|
$3.41
|
||||
Diluted
earnings per share:
|
||||||||||||
Weighted
average shares of common stock outstanding - basic
|
27,893
|
27,822
|
27,803
|
27,686
|
||||||||
Incremental
shares
(1)
|
154
|
323
|
156
|
314
|
||||||||
Weighted
average shares of common stock outstanding - diluted
|
28,047
|
28,145
|
27,959
|
28,000
|
||||||||
Diluted
Earnings per Common Share
|
|
$2.87
|
|
$2.14
|
$
|
$3.89
|
$
|
$3.37
|
(Thousands)
|
March
31,
2007
|
September
30,
2006
|
|||||
NJR
|
|||||||
Long
- term debt
(1)
|
$
|
25,000
|
$
|
25,000
|
|||
Bank
credit facilities
|
$
|
325,000
|
$
|
325,000
|
|||
Amount
outstanding at end of period
|
|||||||
Notes
payable to banks
|
$
|
60,900
|
$
|
129,200
|
|||
Weighted
average interest rate at end of period
|
|||||||
Notes
payable to banks
|
5.6
|
%
|
6.0
|
%
|
|||
NJNG
|
|||||||
Long
- term debt
(1)
|
$
|
254,800
|
$
|
254,800
|
|||
Bank
credit facilities
|
$
|
250,000
|
$
|
250,000
|
|||
Amount
outstanding at end of period
|
|||||||
Commercial
paper
|
$
|
66,100
|
$
|
151,500
|
|||
Weighted
average interest rate at end of period
|
|||||||
Commercial
paper
|
5.3
|
%
|
4.7
|
%
|
|||
NJRES
|
|||||||
Bank
credit facilities
|
$
|
30,000
|
$
|
—
|
|||
Amount
outstanding at end of period
|
|||||||
Notes
payable to banks
|
$
|
—
|
$
|
—
|
|||
Weighted
average interest rate at end of period
|
|||||||
Notes
payable to banks
|
—
|
—
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
||||||||||||
($
in Thousands)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Capitalized
interest - Utility plant
|
$
|
358
|
$
|
299
|
$
|
737
|
$
|
560
|
|||||
Weighted
average interest rates
|
5.36
|
%
|
4.54
|
%
|
5.36
|
%
|
4.22
|
%
|
|||||
Capitalized
interest - Real estate properties and other
|
$
|
86
|
$
|
—
|
$
|
129
|
$
|
—
|
|||||
Weighted
average interest rates
|
5.37
|
%
|
—
|
%
|
5.46
|
%
|
—
|
%
|
|||||
Capitalized
interest - Equity investments
|
$
|
211
|
$
|
—
|
$
|
211
|
$
|
—
|
|||||
Weighted
average interest rates
|
5.40
|
%
|
—
|
%
|
5.40
|
%
|
—
|
%
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
||||||||||||
(Thousands)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Operating
Revenues
|
|||||||||||||
Natural
Gas Distribution
|
$
|
450,811
|
$
|
471,406
|
$
|
690,218
|
$
|
865,752
|
|||||
Energy
Services
|
568,388
|
587,525
|
1,064,175
|
1,350,720
|
|||||||||
Retail
and Other
|
5,508
|
5,560
|
11,848
|
12,663
|
|||||||||
Subtotal
|
1,024,707
|
1,064,491
|
1,766,241
|
2,229,135
|
|||||||||
Intersegment
revenues
(1)
|
(71
|
)
|
(69
|
)
|
(140
|
)
|
(137
|
)
|
|||||
Total
|
$
|
1,024,636
|
$
|
1,064,422
|
$
|
1,766,101
|
$
|
2,228,998
|
|||||
Operating
Income
|
|||||||||||||
Natural
Gas Distribution
|
$
|
58,736
|
$
|
57,514
|
$
|
95,452
|
$
|
90,961
|
|||||
Energy
Services
|
81,410
|
46,863
|
96,256
|
73,964
|
|||||||||
Retail
and Other
|
(705
|
)
|
(689
|
)
|
(123
|
)
|
432
|
||||||
Total
|
$
|
139,441
|
$
|
103,688
|
$
|
191,585
|
$
|
165,357
|
|||||
Net
Income
|
|
||||||||||||
Natural
Gas Distribution
|
$
|
33,226
|
$
|
33,509
|
$
|
53,134
|
$
|
52,192
|
|||||
Energy
Services
|
47,180
|
26,999
|
54,999
|
41,896
|
|||||||||
Retail
and Other
|
121
|
(307
|
)
|
518
|
377
|
||||||||
Total
|
$
|
80,527
|
$
|
60,201
|
$
|
108,651
|
$
|
94,465
|
(Thousands)
|
March
31,
2007
|
September
30,
2006
|
|||||
Assets
at end of period
|
|||||||
Natural
Gas Distribution
|
$
|
1,520,716
|
$
|
1,586,934
|
|||
Energy
Services
|
554,709
|
714,867
|
|||||
Retail
and Other
|
167,621
|
107,213
|
|||||
Intersegment
Assets
(1)
|
(15,020
|
)
|
(10,086
|
)
|
|||
Total
|
$
|
2,228,026
|
$
|
2,398,928
|
Pension
|
OPEB
|
||||||||||||||||||||||||
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
||||||||||||||||||||||
(Thousands)
|
2007
|
2006
|
2007
|
2006
|
2007
|
2006
|
2007
|
2006
|
|||||||||||||||||
Service
cost
|
$
|
713
|
$
|
751
|
$
|
1,426
|
$
|
1,502
|
$
|
454
|
$
|
380
|
$
|
909
|
$
|
760
|
|||||||||
Interest
cost
|
1,525
|
1,408
|
3,050
|
2,816
|
757
|
615
|
1,514
|
1,230
|
|||||||||||||||||
Expected
return on plan assets
|
(2,052
|
)
|
(1,782
|
)
|
(4,104
|
)
|
(3,564
|
)
|
(541
|
)
|
(458
|
)
|
(1,081
|
)
|
(916
|
)
|
|||||||||
Prior
service cost amortization
|
21
|
21
|
42
|
42
|
20
|
19
|
39
|
—
|
|||||||||||||||||
Transition
obligation amortization
|
—
|
—
|
—
|
—
|
89
|
89
|
179
|
38
|
|||||||||||||||||
Recognized
actuarial loss
|
399
|
433
|
798
|
866
|
266
|
206
|
531
|
178
|
|||||||||||||||||
Net
initial obligation
|
—
|
(3
|
)
|
—
|
(6
|
)
|
—
|
—
|
—
|
412
|
|||||||||||||||
Recognized
net periodic cost
|
$
|
606
|
$
|
828
|
$
|
1,212
|
$
|
1,656
|
$
|
1,045
|
$
|
851
|
$
|
2,091
|
$
|
1,702
|
Balance
at October 1, 2006
|
$
|
23,293
|
||
Accretion
|
656
|
|||
Additions
|
—
|
|||
Retirements
|
(488
|
)
|
||
Balance
at March 31, 2007
|
$
|
23,461
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
|||||||||||
(Millions)
|
2007
|
2006
|
2007
|
2006
|
||||||||
NJRES
|
$
|
38.8
|
$
|
16.9
|
$
|
74.1
|
$
|
34.1
|
||||
NJNG
|
19.0
|
21.4
|
38.2
|
42.5
|
||||||||
Total
|
$
|
57.8
|
$
|
38.3
|
$
|
112.3
|
$
|
76.6
|
Six
Months Ended
March
31,
|
|||||||||||||
($
in Thousands)
|
2007
|
2006
|
|||||||||||
Net
Income
|
|||||||||||||
Natural
Gas Distribution
|
$
|
53,134
|
49
|
%
|
$
|
52,192
|
55
|
%
|
|||||
Energy
Services
|
54,999
|
50
|
41,896
|
44
|
|||||||||
Retail
and Other
|
518
|
1
|
377
|
1
|
|||||||||
Total
|
$
|
108,651
|
100
|
%
|
$
|
94,465
|
100
|
%
|
· |
Working
with the BPU and New Jersey Department of the Public Advocate, Division
of
Rate Counsel (Rate Counsel), for the development of the decoupling
of the
impact of customer usage on utility gross margin, which has allowed
for
the implementation of the Customer Incentive Program (CIP). The CIP
allows
NJNG to promote conservation programs to its customers while maintaining
protection of its utility gross margin associated with reduced customer
usage. CIP usage differences are calculated annually and are recovered
one
year following the end of the CIP usage year;
|
· |
Managing
its customer growth, which is expected to total about 2.0 percent
annually;
|
· |
Generating
earnings from various BPU-authorized gross margin-sharing incentive
programs, which are currently approved through October 31, 2007. An
extension has been requested to link the expiration of these programs
with
the end of the initial three-year pilot program of the CIP. The initial
term of the CIP is October 1, 2006 through September 30, 2009. Under
certain conditions the CIP may be extended one additional year beyond
the
initial term;
|
· |
Managing
the volatility of wholesale natural gas prices through a hedging
program
designed to keep customers’ prices as stable as possible;
and
|
· |
Improving
its cost structure through various productivity
initiatives.
|
· |
Providing
natural gas portfolio management services to nonaffiliated utilities
and
electric generation facilities;
|
· |
Identifying
and benefiting from variations in pricing of natural gas transportation
and storage assets due to location or timing differences of natural
gas
prices to generate gross margin; and
|
· |
Managing
hedging programs that are designed to mitigate adverse market price
fluctuations in natural gas transportation and storage commitments
utilized to generate gross margin through the use of a cash-flow
hedging
strategy.
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
||||||||||||||||||
%
|
%
|
||||||||||||||||||
($
in Thousands)
|
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||
Operating
revenues
|
$
|
1,024,636
|
$
|
1,064,422
|
(3.7
|
)%
|
$
|
1,766,101
|
$
|
2,228,998
|
(20.8
|
)%
|
|||||||
Gas
purchases
|
$
|
795,469
|
$
|
882,688
|
(9.9
|
)%
|
$
|
1,424,154
|
$
|
1,921,163
|
(25.9
|
)%
|
· |
Increased
refunds to NJNG customers in fiscal 2007;
and
|
· |
Reduced
off-system sales
|
· |
Increased
revenues at NJRES due to greater market pricing volatility as a result
of
the impact of weather in relation to the cost to acquire gas and
contracts
to sell gas in NJRES’ market area; and
|
· |
The
impact of 12.4 percent colder weather than prior fiscal year on NJNG’s
revenues
|
· |
Refunds
to NJNG residential and small commercial customers
;
and
|
· |
Less
favorable market pricing conditions affecting NJRES’ revenues as a result
of volatility in the markets due to severe weather conditions in
fiscal
2006 that did not recur in fiscal 2007.
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
||||||||||||
(Thousands)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Utility
Gross Margin
|
|||||||||||||
Operating
revenues
|
$
|
450,811
|
$
|
471,406
|
$
|
690,218
|
$
|
865,752
|
|||||
Less:
|
|||||||||||||
Gas
purchases
|
312,863
|
346,650
|
463,856
|
651,782
|
|||||||||
Energy
and other taxes
|
28,778
|
24,481
|
41,298
|
41,766
|
|||||||||
Regulatory
rider expense
|
18,135
|
12,405
|
27,601
|
21,863
|
|||||||||
Total
Utility Gross Margin
|
$
|
91,035
|
$
|
87,870
|
$
|
157,463
|
$
|
150,341
|
|||||
Utility
Gross Margin
|
|||||||||||||
Residential
and commercial
|
$
|
80,154
|
$
|
78,237
|
$
|
134,664
|
$
|
130,906
|
|||||
Transportation
|
9,884
|
6,479
|
18,321
|
12,861
|
|||||||||
Total
Utility Firm Gross Margin
|
90,038
|
84,716
|
152,985
|
143,767
|
|||||||||
Incentive
programs
|
906
|
2,932
|
4,184
|
6,046
|
|||||||||
Interruptible
|
91
|
222
|
294
|
528
|
|||||||||
Total
Utility Gross Margin
|
91,035
|
87,870
|
157,463
|
150,341
|
|||||||||
Operation
and maintenance expense
|
22,692
|
21,083
|
42,947
|
40,950
|
|||||||||
Depreciation
and amortization
|
8,848
|
8,477
|
17,586
|
16,900
|
|||||||||
Other
taxes not reflected in utility gross margin
|
759
|
796
|
1,478
|
1,530
|
|||||||||
Operating
income
|
$
|
58,736
|
$
|
57,514
|
$
|
95,452
|
$
|
90,961
|
|||||
Other
income
|
838
|
715
|
1,885
|
1,540
|
|||||||||
Interest
charges, net
|
5,244
|
3,990
|
10,637
|
7,774
|
|||||||||
Income
tax provision
|
21,104
|
20,730
|
33,566
|
32,535
|
|||||||||
Net
income
|
$
|
33,226
|
$
|
33,509
|
$
|
53,134
|
$
|
52,192
|
· |
Utility
Firm Gross Margin, which is derived from residential and commercial
customers who receive natural gas service from NJNG through either
sales
or transportation tariffs;
|
· |
Incentive
programs, where margins generated or savings achieved from BPU-approved
off-system sales, capacity release, Financial Risk Management (defined
in
Incentive Programs, below) or storage incentive programs are shared
between customers and NJNG; and
|
· |
Utility
gross margin from interruptible customers, which is generated from
large
commercial and industrial customers who receive non-firm natural
gas
service at lower rates, and is subject to BPU-approved
incentives.
|
· |
The
effect of the CIP in the current fiscal year, which captures the
impact
from both weather and customer usage, when compared to the same periods
in
the prior fiscal year when the WNC, which did not capture the impact
of
lower usage per degree day, was in effect;
and
|
· |
An
increase in fixed revenue as a result of customer
growth.
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
March
31,
|
March
31,
|
||||||||||||
(Thousands)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Operating
revenues
|
$
|
568,388
|
$
|
587,525
|
$
|
1,064,175
|
$
|
1,350,720
|
|||||
Gas
purchases (including fixed demand charges)
|
482,606
|
536,038
|
960,298
|
1,269,381
|
|||||||||
Gross
margin
|
85,782
|
51,487
|
103,877
|
81,339
|
|||||||||
Operation
and maintenance expense
|
4,150
|
4,423
|
7,153
|
6,941
|
|||||||||
Depreciation
and amortization
|
54
|
51
|
108
|
103
|
|||||||||
Other
taxes
|
168
|
150
|
360
|
331
|
|||||||||
Operating
income
|
$
|
81,410
|
$
|
46,863
|
$
|
96,256
|
$
|
73,964
|
|||||
Net
income
|
$
|
47,180
|
$
|
26,999
|
$
|
54,999
|
$
|
41,896
|
Three
Months Ended
March
31,
|
Six
Months Ended
March
31,
|
||||||||||||
(Thousands)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Operating
revenues
|
$
|
5,508
|
$
|
5,560
|
$
|
11,848
|
$
|
12,663
|
|||||
Other
income
|
$
|
832
|
$
|
788
|
$
|
1,639
|
$
|
1,442
|
|||||
Net
income
|
$
|
121
|
$
|
(307
|
)
|
$
|
518
|
$
|
377
|
March
31,
2007
|
September
30,
2006
|
||||||
Common
stock equity
|
58
|
%
|
50
|
%
|
|||
Long-term
debt
|
30
|
27
|
|||||
Short-term
debt
|
12
|
23
|
|||||
Total
|
100
|
%
|
100
|
%
|
Up to
|
2-3
|
4-5
|
After
|
|||||||||||||
(Thousands)
|
Total
|
1 Year
|
Years
|
Years
|
5 Years
|
|||||||||||
Long-term
debt
*
|
$
|
448,822
|
$
|
12,835
|
$
|
22,110
|
$
|
72,973
|
$
|
340,904
|
||||||
Capital
lease obligations
*
|
87,399
|
7,994
|
15,988
|
19,178
|
44,239
|
|||||||||||
Operating
leases
*
|
7,897
|
2,652
|
3,401
|
1,254
|
590
|
|||||||||||
Short-term
debt
|
127,000
|
127,000
|
—
|
—
|
—
|
|||||||||||
Clean
energy program
*
|
15,672
|
10,775
|
4,897
|
—
|
—
|
|||||||||||
Construction
obligations
|
5,826
|
5,826
|
—
|
—
|
—
|
|||||||||||
Natural
gas supply purchase obligations - NJNG
|
155,550
|
150,306
|
548
|
4,696
|
—
|
|||||||||||
Demand
fee commitments - NJNG
|
429,831
|
80,848
|
148,479
|
110,956
|
89,548
|
|||||||||||
Natural
gas supply purchase obligations - NJRES
|
1,043,587
|
534,858
|
508,729
|
—
|
—
|
|||||||||||
Demand
fee commitments - NJRES
|
207,855
|
71,576
|
86,624
|
34,968
|
14,687
|
|||||||||||
Total
NJR, NJNG and NJRES contractual cash
Obligations
|
$
|
2,529,439
|
$
|
1,004,670
|
$
|
790,776
|
$
|
244,025
|
$
|
489,968
|
· |
A
decrease in the change in accounts receivable of $57.6 million and
an
increase in customer credit balances of $56.7 million, primarily
as a
result of a $71.5 million credit issued to retail customers and warmer
weather and reduced customer usage at NJNG.
|
· |
A
decrease in gas inventory at NJNG due to lower volumes held in inventory,
as well as lower wholesale natural gas
prices.
|
· |
An
increase in gas purchases payable at NJNG and NJRES as a result of
increased customer demand.
|
· |
An
increase in broker margin balances resulting from settlements during
the
six month period and lower market prices on natural gas futures
contracts.
|
Standard &
Poor’s
|
Moody’s
|
|
Corporate
Rating
|
A+
|
N/A
|
Commercial
Paper
|
A-1
|
P-1
|
Senior
Secured
|
AA-
|
Aa3
|
Ratings
Outlook
|
Negative
|
Stable
|
Balance
September 30,
|
Increase
(Decrease)
in Fair
|
Amounts
|
Balance
March 31,
|
||||||||||
(Thousands)
|
2006
|
Market Value
|
Settled
|
2007
|
|||||||||
NJNG
|
$
|
(82,451
|
)
|
$
|
10,399
|
$
|
(1,202
|
)
|
$
|
(70,850
|
)
|
||
NJRES
|
116,547
|
(26,373
|
)
|
91,495
|
(1,321
|
)
|
|||||||
NJR
Energy
|
35,423
|
754
|
360
|
35,817
|
|||||||||
Total
|
$
|
69,519
|
$
|
(15,220
|
)
|
$
|
90,653
|
$
|
(36,354
|
)
|
(Thousands)
|
Remaining
2007
|
2008
|
2009
- 2011
|
After
2011
|
Total
FairValue
|
|||||||||||
Price
based on NYMEX
|
$
|
(29,616
|
)
|
$
|
(1,761
|
)
|
$
|
(3,071
|
)
|
$
|
—
|
$
|
(34,448
|
)
|
||
Price
based on over-the-counter
|
—
|
—
|
—
|
—
|
—
|
|||||||||||
Published
quotations
|
(1,128
|
)
|
(840
|
)
|
62
|
—
|
$
|
(1,906
|
)
|
|||||||
Total
|
$
|
(30,744
|
)
|
$
|
(2,601
|
)
|
$
|
(3,009
|
)
|
$
|
—
|
$
|
(36,354
|
)
|
Volume
|
Price per
|
Amounts
Included in
Derivatives
|
||||||||
(Bcf)
|
Mmbtu
|
(Thousands)
|
||||||||
NJNG
|
||||||||||
Futures
|
(18.3)
|
|
$
|
6.45
- $ 9.39
|
$
|
(18,296
|
)
|
|||
Options
|
5.0
|
$
|
7.50
- $ 11.00
|
2,934
|
||||||
Swaps
|
6.1
|
$
|
3.99
- $ 8.74
|
(55,488
|
)
|
|||||
NJRES
|
||||||||||
Futures
|
(16.9)
|
|
$
|
6.32
- $ 11.59
|
(9,596
|
)
|
||||
Swaps
|
(42.5)
|
|
$
|
6.30
- $ 11.98
|
8,275
|
|||||
NJRE
|
||||||||||
Swaps
|
39.0
|
$
|
3.07
- $ 4.41
|
35,817
|
||||||
Total
|
$
|
(36,354
|
)
|
(Thousands)
|
Gross
Credit
Exposure
|
Net
Credit
Exposure
|
|||||
Investment
grade
|
$
|
216,864
|
$
|
182,915
|
|||
Noninvestment
grade
|
1,148
|
-
|
|||||
Internally
rated investment grade
|
15,005
|
7,275
|
|||||
Internally
rated noninvestment grade
|
7,666
|
-
|
|||||
Total
|
$
|
240,683
|
$
|
190,190
|
(Thousands)
|
Gross
Credit
Exposure
|
Net
Credit
Exposure
|
|||||
Investment
grade
|
$
|
29,196
|
$
|
24,794
|
|||
Noninvestment
grade
|
60
|
-
|
|||||
Internally
rated investment grade
|
2,189
|
997
|
|||||
Internally
rated noninvestment grade
|
290
|
-
|
|||||
Total
|
$
|
31,735
|
$
|
25,791
|
Period
|
Total
Number of Shares (or Units) Purchased
|
Average
Price Paid per Share (or Unit)
|
Total
Number of Shares (or Units) Purchased as Part of Publicly Announced
Plans
or Programs
|
Maximum
Number (or Approximate Dollar Value) of Shares (or Units) That
May Yet Be
Purchased Under the Plans or Programs
|
01/1/07
- 01/31/07
|
—
|
—
|
—
|
348,147
|
02/1/07
- 02/28/07
|
—
|
—
|
—
|
348,147
|
03/1/07
- 03/31/07
|
—
|
—
|
—
|
348,147
|
Total
|
—
|
—
|
—
|
348,147
|
(a)
|
Exhibits
|
10.1
|
Limited
Liability Company Agreement of Steckman Ridge GP, LLC dated as
of March 2,
2007
|
10.2
|
Limited
Partnership Agreement of Steckman Ridge, LP dated as of March 2,
2007
|
31.1
|
Certification
of the Chief Executive Officer pursuant to section 302 of the
Sarbanes-Oxley Act
|
31.2
|
Certification
of the Chief Financial Officer pursuant to section 302 of the
Sarbanes-Oxley Act
|
32.1
|
Certification
of the Chief Executive Officer pursuant to section 906 of the
Sarbanes-Oxley Act*
|
32.2
|
Certification
of the Chief Financial Officer pursuant to section 906 of the
Sarbanes-Oxley Act*
|
S
IGNATURES
|
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
|
|
NEW
JERSEY RESOURCES
|
|
Date:
May 2, 2007
|
|
/s/Glenn
C. Lockwood
|
|
Glenn
C. Lockwood
|
|
Senior
Vice President and Chief Financial
Officer
|
Page
|
|||
ARTICLE
1
|
DEFINITIONS
|
1
|
|
1.01
|
Definitions
|
1
|
|
1.02
|
Interpretation
|
7
|
|
ARTICLE
2
|
ORGANIZATION
|
7
|
|
2.01
|
Formation
|
7
|
|
2.02
|
Name
|
7
|
|
2.03
|
Registered
Office; Registered Agent; Principal Office in the United States;
Other
Offices
|
8
|
|
2.04
|
Purposes
|
8
|
|
2.05
|
Foreign
Qualification
|
8
|
|
2.06
|
Formation
of Partnership
|
8
|
|
2.07
|
Term
|
8
|
|
ARTICLE
3
|
MEMBERSHIP;
DISPOSITIONS OF INTERESTS
|
8
|
|
3.01
|
Current
Members
|
8
|
|
3.02
|
Representations,
Warranties and Covenants
|
8
|
|
3.03
|
Dispositions
and Encumbrances of Membership Interests and LP Interests
|
9
|
|
3.04
|
Creation
of Additional Membership Interests
|
12
|
|
3.05
|
Access
to Information
|
12
|
|
3.06
|
Confidential
Information
|
13
|
|
3.07
|
Liability
to Third Parties
|
14
|
|
3.08
|
Use
of Members’ Names and Trademarks
|
14
|
|
ARTICLE
4
|
CAPITAL
CONTRIBUTIONS
|
14
|
|
4.01
|
Capital
Contributions
|
14
|
|
4.02
|
Loans
|
14
|
|
4.03
|
No
Other Contribution Obligations
|
14
|
|
4.04
|
Return
of Contributions
|
14
|
|
4.05
|
Capital
Accounts
|
14
|
|
4.06
|
Failure
to Make a Capital Contribution
|
16
|
|
ARTICLE
5
|
DISTRIBUTIONS
AND ALLOCATIONS
|
18
|
|
5.01
|
Distributions
|
18
|
|
5.02
|
Distributions
on Dissolution and Winding Up
|
18
|
|
5.03
|
Withholding
|
18
|
|
5.04
|
Allocations
|
18
|
|
5.05
|
Special
Allocations
|
18
|
|
5.06
|
Curative
Allocations
|
20
|
|
5.07
|
Varying
Interests
|
20
|
|
ARTICLE
6
|
MANAGEMENT
|
20
|
|
6.01
|
Generally
|
20
|
|
6.02
|
Management
Committee
|
20
|
|
6.03
|
Operations
and Management Agreement
|
23
|
|
6.04
|
Conflicts
of Interest
|
24
|
|
6.05
|
Indemnification
for Breach of Agreement
|
24
|
|
6.06
|
General
Regulatory Matters
|
24
|
|
6.07
|
Initial
Facilities
|
25
|
ARTICLE
7
|
TAXES
|
25
|
|
7.01
|
Tax
Returns
|
25
|
|
7.02
|
Tax
Elections
|
25
|
|
7.03
|
Tax
Matters Member
|
25
|
|
ARTICLE
8
|
BOOKS,
RECORDS, REPORTS, AND BANK ACCOUNTS
|
26
|
|
8.01
|
Maintenance
of Books; Reports
|
26
|
|
8.02
|
Bank
Accounts
|
26
|
|
ARTICLE
9
|
WITHDRAWAL
|
26
|
|
9.01
|
No
Right of Withdrawal
|
26
|
|
9.02
|
Deemed
Withdrawal
|
27
|
|
9.03
|
Effect
of Withdrawal
|
27
|
|
ARTICLE
10
|
DISPUTE
RESOLUTION
|
28
|
|
10.01
|
Disputes
|
28
|
|
10.02
|
Negotiation
to Resolve Disputes
|
28
|
|
10.03
|
Selection
of Arbitrator
|
28
|
|
10.04
|
Conduct
of Arbitration
|
29
|
|
10.05
|
Consolidation
|
29
|
|
ARTICLE
11
|
DISSOLUTION,
WINDING UP AND TERMINATION
|
29
|
|
11.01
|
Dissolution
|
29
|
|
11.02
|
Winding
Up and Termination
|
30
|
|
11.03
|
Deficit
Capital Accounts
|
31
|
|
11.04
|
Certificate
of Cancellation
|
31
|
|
ARTICLE
12
|
GENERAL
PROVISIONS
|
31
|
|
12.01
|
Offset
|
31
|
|
12.02
|
Notices
|
31
|
|
12.03
|
Entire
Agreement; Superseding Effect
|
31
|
|
12.04
|
Effect
of Waiver or Consent
|
31
|
|
12.05
|
Amendment
or Restatement
|
31
|
|
12.06
|
Binding
Effect
|
31
|
|
12.07
|
Governing
Law; Severability
|
32
|
|
12.08
|
Further
Assurances
|
32
|
|
12.09
|
Waiver
of Certain Rights
|
32
|
|
12.10
|
Counterparts
|
32
|
Name
and Address
|
Sharing
Ratio
|
Parent
|
Representative
and Alternate Representatives
|
Spectra
Energy Transmission Services, LLC
5400
Westheimer Court
Houston,
Texas 77056-5310
Attn:
Christine M. Pallenik
Fax:
(713) 386-4694
|
50%
|
Spectra
Energy Corp
|
R.
Mark Fiedorek
Alternate:
Gregory
P. Bilinski
|
NJR
Steckman Ridge Storage Company
1415
Wyckoff Road
Wall,
New Jersey 07719
Attn:
William P. Scharfenberg
Fax:
(732) 938-1226
|
50%
|
New
Jersey Resources Corporation
|
Richard
R. Gardner
Alternate:
Jeffrey
S. Davidson
|
· |
The
area inside the brown line on Exhibit F to the
PSA
|
· |
Any
shaded tracts on Exhibit F to the PSA
|
· |
Any
other leases conveyed to the Partnership at the Closing under the
PSA
|
Acquisition
|
$105,000,000
|
Development:
|
||
Wells
|
-
15 new wells
-
5
existing well conversions
|
$54,382,198
|
Gathering
System
|
-
6.625 in. pipe
-
8.625 in. pipe
-
16 in. pipe
|
$31,679,713
|
Station
|
-
Compressor
-
Cooler
-
Heater
-
Dehydration
-
Slug Catcher
-
Measurement & Regulation
|
$36,239,008
|
Pad
Gas
|
-
Gas required to maintain minimum reservoir pressure
|
$19,390,352
|
Development
Total
|
$141,691,271
|
Total
|
$246,691,271
|
Page
|
|||
ARTICLE
1
|
DEFINITIONS
|
1
|
|
1.01
|
Definitions
|
1
|
|
1.02
|
Interpretation
|
7
|
|
ARTICLE
2
|
ORGANIZATION
|
7
|
|
2.01
|
Formation
|
7
|
|
2.02
|
Name
|
7
|
|
2.03
|
Registered
Office; Registered Agent; Principal Office in the United States;
Other
Offices
|
7
|
|
2.04
|
Purposes
|
7
|
|
2.05
|
Foreign
Qualification
|
8
|
|
2.06
|
PSA
|
8
|
|
2.07
|
Term
|
8
|
|
ARTICLE
3
|
PARTNERSHIP;
DISPOSITIONS OF INTERESTS
|
8
|
|
3.01
|
Initial
Partners
|
8
|
|
3.02
|
Representations,
Warranties and Covenants
|
8
|
|
3.03
|
Dispositions
and Encumbrances of LP Interests
|
9
|
|
3.04
|
Creation
of Additional Partnership Interests
|
10
|
|
3.05
|
Access
to Information
|
10
|
|
3.06
|
Confidential
Information
|
10
|
|
3.07
|
Liability
to Third Parties
|
12
|
|
3.08
|
Use
of Partners’ Names and Trademarks
|
12
|
|
ARTICLE
4
|
CAPITAL
CONTRIBUTIONS
|
12
|
|
4.01
|
Capital
Contributions
|
12
|
|
4.02
|
Loans
|
12
|
|
4.03
|
No
Other Contribution Obligations
|
13
|
|
4.04
|
Return
of Contributions
|
13
|
|
4.05
|
Capital
Accounts
|
13
|
|
4.06
|
Failure
to Make a Capital Contribution
|
14
|
|
ARTICLE
5
|
DISTRIBUTIONS
AND ALLOCATIONS
|
15
|
|
5.01
|
Distributions
|
15
|
|
5.02
|
Distributions
on Dissolution and Winding Up
|
16
|
|
5.03
|
Withholding
|
16
|
|
5.04
|
Allocations
|
16
|
|
5.05
|
Special
Allocations
|
16
|
|
5.06
|
Curative
Allocations
|
17
|
|
5.07
|
Varying
Interests
|
17
|
|
ARTICLE
6
|
MANAGEMENT
|
18
|
|
6.01
|
Generally
|
18
|
|
6.02
|
Officers
|
18
|
|
6.03
|
Operations
and Management Agreement
|
18
|
|
6.04
|
Conflicts
of Interest
|
18
|
|
6.05
|
Indemnification
for Breach of Agreement
|
19
|
|
6.06
|
General
Regulatory Matters
|
19
|
|
6.07
|
Disclaimer
of Duties
|
19
|
ARTICLE
7
|
TAXES
|
19
|
|
7.01
|
Tax
Returns
|
19
|
|
7.02
|
Tax
Elections
|
19
|
|
7.03
|
Tax
Matters Partner
|
19
|
|
ARTICLE
8
|
BOOKS,
RECORDS, REPORTS, AND BANK ACCOUNTS
|
20
|
|
8.01
|
Maintenance
of Books; Reports
|
20
|
|
8.02
|
Bank
Accounts
|
21
|
|
ARTICLE
9
|
WITHDRAWAL
|
21
|
|
9.01
|
No
Right of Withdrawal
|
21
|
|
9.02
|
Deemed
Withdrawal
|
21
|
|
9.03
|
Effect
of Withdrawal
|
21
|
|
ARTICLE
10
|
DISPUTE
RESOLUTION
|
22
|
|
10.01
|
Disputes
|
22
|
|
10.02
|
Negotiation
to Resolve Disputes
|
22
|
|
10.03
|
Selection
of Arbitrator
|
22
|
|
10.04
|
Conduct
of Arbitration
|
23
|
|
10.05
|
Consolidation
|
23
|
|
ARTICLE
11
|
DISSOLUTION,
WINDING UP AND TERMINATION
|
23
|
|
11.01
|
Dissolution
|
23
|
|
11.02
|
Winding
Up and Termination
|
24
|
|
11.03
|
Deficit
Capital Accounts
|
25
|
|
11.04
|
Certificate
of Cancellation
|
25
|
|
ARTICLE
12
|
GENERAL
PROVISIONS
|
25
|
|
12.01
|
Offset
|
25
|
|
12.02
|
Notices
|
25
|
|
12.03
|
Entire
Agreement; Superseding Effect
|
25
|
|
12.04
|
Effect
of Waiver or Consent
|
25
|
|
12.05
|
Amendment
or Restatement
|
25
|
|
12.06
|
Binding
Effect
|
25
|
|
12.07
|
Governing
Law; Severability
|
26
|
|
12.08
|
Further
Assurances
|
26
|
|
12.09
|
Waiver
of Certain Rights
|
26
|
|
12.10
|
Counterparts
|
26
|
Name
and Address
|
Sharing
Ratio
|
Parent
|
Steckman
Ridge GP, LLC
5400
Westheimer Court
Houston,
Texas 77056-5310
Attn:
Christine M. Pallenik
Fax:
(713) 386-4694
With
a copy to:
1415
Wyckoff Road
Wall,
NJ 07719
Attn:
William P. Scharfenberg
Fax:
(732) 938-1226
|
1%
|
N/A
|
Spectra
Energy Transmission Resource, LLC
5400
Westheimer Court
Houston,
Texas 77056-5310
Attn:
Christine M. Pallenik
Fax:
(713) 386-4694
|
49.5%
|
Spectra
Energy Corp
|
NJR
Steckman Ridge Storage Company
1415
Wyckoff Road
Wall,
NJ 07719
Attn:
William P. Scharfenberg
Fax:
(732) 938-1226
|
49.5%
|
New
Jersey Resources Corporation
|
· |
New
wells and the conversion of 5 existing wells to injection and withdrawal
wells
|
· |
A
gathering system comprised of primarily of NPS 6, 8 and 16 pipe.
|
· |
A
station comprised of a driver and compression, dehydration, separator,
heater, cooler, slug catcher, buildings, measurement and regulation.
|
· |
Base
gas
|
· |
The
area inside the brown line on Exhibit F to the
PSA
|
· |
Any
shaded tracts on Exhibit F to the PSA
|
· |
Any
other leases conveyed to the Partnership at the Closing under the
PSA
|
I,
Laurence M. Downes, certify that:
|
|||
1)
|
I
have reviewed this Quarterly Report on Form 10-Q of New Jersey
Resources
Corporation;
|
||
(2)
|
Based
on my knowledge, this Quarterly Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to
make the statements made, in light of the circumstances under which
such
statements were made, not misleading with respect to the period
covered by
this Quarterly Report;
|
||
(3)
|
Based
on my knowledge, the financial statements, and other financial
information
included in this Quarterly Report, fairly present in all material
respects
the financial condition, results of operations and cash flows of
the
Registrant as of, and for, the periods presented in this Quarterly
Report;
|
||
(4)
|
The
Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures
(as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-f15(f) and 15d-15(f) for the Registrant and have:
|
||
a.)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the Registrant, including
its
consolidated subsidiaries, is made known to us by others within
those
entities, particularly during the period in which this Quarterly
Report is
being prepared;
|
||
b.)
|
designed
such internal control over financial reporting, or caused such
internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
||
c.)
|
evaluated
the effectiveness of the Registrant's disclosure controls and procedures
and presented in this Quarterly Report our conclusions about the
effectiveness of the disclosure controls and procedures, as of
the end of
the period covered by this Quarterly Report based on such
evaluation;
|
||
d.)
|
disclosed
in this report any change in the Registrant’s internal control over
financial reporting that occurred during the Registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely
to
adversely affect, the Registrant’s internal control over financial
reporting; and
|
||
5)
|
The
Registrant's other certifying officers and I have disclosed, based
on our
most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing
the
equivalent functions):
|
||
a.)
|
all
significant deficiencies in the design or operation of internal
control
over financial reporting which are reasonably likely to adversely
affect
the Registrant's ability to record, process, summarize and report
financial information; and
|
||
b.)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
control
over financial reporting.
|
||
Date:
May 2, 2007
|
By:
/s/ Laurence M. Downes
|
||
Laurence
M. Downes
Chairman
& Chief Executive Officer
|
I,
Glenn C. Lockwood, certify that:
|
|||
1)
|
I
have reviewed this Quarterly Report on Form 10-Q of New Jersey Resources
Corporation;
|
||
2)
|
Based
on my knowledge, this Quarterly Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to
make the statements made, in light of the circumstances under which
such
statements were made, not misleading with respect to the period covered
by
this Quarterly Report;
|
||
3)
|
Based
on my knowledge, the financial statements, and other financial information
included in this Quarterly Report, fairly present in all material
respects
the financial condition, results of operations and cash flows of
the
Registrant as of, and for, the periods presented in this Quarterly
Report;
|
||
4)
|
The
Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-f15(f) and 15d-15(f) for the Registrant and have:
|
||
a)
|
designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this Quarterly
Report is
being prepared;
|
||
b)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
||
c)
|
evaluated
the effectiveness of the Registrant's disclosure controls and procedures
and presented in this Quarterly Report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of
the period covered by this Quarterly Report based on such
evaluation;
|
||
d)
|
disclosed
in this report any change in the Registrant’s internal control over
financial reporting that occurred during the Registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely
to
adversely affect, the Registrant’s internal control over financial
reporting; and
|
||
5)
|
The
Registrant's other certifying officers and I have disclosed, based
on our
most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing
the
equivalent functions):
|
||
a)
|
all
significant deficiencies in the design or operation of internal control
over financial reporting which are reasonably likely to adversely
affect
the Registrant's ability to record, process, summarize and report
financial information; and
|
||
b)
|
any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
control
over financial reporting.
|
||
Date:
May 2, 2007
|
By:
/s/ Glenn C. Lockwood
|
||
Glenn C. Lockwood
Senior Vice President, Chief Financial
Officer
|
The
undersigned, Laurence M. Downes, hereby certifies as follows:
|
||
(a)
|
I
am the Chief Executive Officer of New Jersey Resources Corporation
(the
“Company”);
|
|
(b)
|
To
the best of my knowledge, the Company’s Quarterly Report on Form 10-Q for
the period ended March 31, 2007 (the “Report”) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of
1934, as amended; and
|
|
(c)
|
To
the best of my knowledge, based upon a review of the Report, the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
|
NEW
JERSEY RESOURCES CORPORATION
|
||
Date:
May 2, 2007
|
By:
/s/ Laurence M. Downes
|
|
Laurence
M. Downes
Chairman
& Chief Executive Officer
|
||
This
certificate accompanies this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company
for purposes of Section 18 or any other provision of the Securities
Exchange Act of 1934, as amended.
|
||
A
signed original of this written statement required by Section 906
has been
provided to the Company and will be retained by the Company and furnished
to the Securities and Exchange Commission or its staff upon
request.
|
The
undersigned, Glenn C. Lockwood, hereby certifies as
follows:
|
||
(a)
|
I
am the Chief Financial Officer of New Jersey Resources Corporation
(the
“Company”);
|
|
(b)
|
To
the best of my knowledge, the Company’s Quarterly Report on Form 10-Q for
the period ended March 31, 2007 (the “Report”) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of
1934, as amended; and
|
|
(c)
|
To
the best of my knowledge, based upon a review of the Report, the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
|
NEW
JERSEY RESOURCES CORPORATION
|
||
Date:
May 2, 2007
|
By:
/s/ Glenn C. Lockwood
|
|
Glenn
C. Lockwood
Senior
Vice President Chief Financial Officer
|
||
This
certificate accompanies this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company
for purposes of Section 18 or any other provision of the Securities
Exchange Act of 1934, as amended.
|
||
A
signed original of this written statement required by Section 906
has been
provided to the Company and will be retained by the Company and furnished
to the Securities and Exchange Commission or its staff upon
request.
|