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FOR THE TRANSITION PERIOD FROM TO
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Commission file number 1-8359
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NEW JERSEY RESOURCES CORPORATION
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(Exact name of registrant as specified in its charter)
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New Jersey
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22-2376465
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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1415 Wyckoff Road, Wall, New Jersey 07719
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732-938-1480
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(Address of principal
executive offices)
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(Registrant's telephone number,
including area code)
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Securities registered pursuant to Section 12 (b) of the Act:
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Common Stock - $2.50 Par Value
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New York Stock Exchange
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(Title of each class)
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(Name of each exchange on which registered)
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Securities registered pursuant to Section 12 (g) of the Act:
None
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Large accelerated filer:
x
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Accelerated filer:
o
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Non-accelerated filer:
o
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Smaller reporting company
:
o
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(Do not check if a smaller reporting company)
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Page
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PART I
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 4A.
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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PART III*
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV
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ITEM 15.
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* Portions of Item 10 and Items 11-14 are Incorporated by Reference from the Proxy Statement.
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•
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weather and economic conditions;
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•
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NJR's dependence on operating subsidiaries;
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•
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demographic changes in the New Jersey Natural Gas (NJNG) service territory;
|
•
|
the rate of NJNG customer growth;
|
•
|
volatility of natural gas and other commodity prices and their impact on customer usage, NJNG's incentive programs, 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;
|
•
|
the impact of volatility in the credit markets that would result in the increased cost and/or limit the availability of credit at NJR to fund and support physical gas inventory purchases and other working capital needs at NJRES, and all other non-regulated subsidiaries, as well as negatively affect cost and access to the commercial paper market and other short-term financing markets by NJNG to allow it to fund its commodity purchases, capital expenditures and meet its short-term obligations as they come due;
|
•
|
the ability to comply with debt covenants;
|
•
|
continued failures in the market for auction rate securities;
|
•
|
the impact to the asset values and resulting higher costs and funding obligations of NJR's pension and postemployment benefit plans as a result of downturns in the financial markets, and impacts associated with the Patient Protection and Affordable Care Act;
|
•
|
accounting effects and other risks associated with hedging activities and use of derivatives contracts;
|
•
|
commercial and wholesale credit risks, including the availability of creditworthy customers and counterparties and liquidity in the wholesale energy trading market;
|
•
|
the ability to obtain governmental approvals and/or financing for the construction, development and operation of certain non-regulated energy investments, including our solar energy projects;
|
•
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risks associated with the management of the Company's joint ventures and partnerships;
|
•
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risks associated with our investments in solar energy projects, including the availability of regulatory and tax incentives, construction and regulatory risks and the availability of viable projects;
|
•
|
the level and rate at which costs and expenses are incurred and the extent to which they are allowed to be recovered from customers through the regulatory process in connection with constructing, operating and maintaining NJNG's natural gas transmission and distribution system;
|
•
|
dependence on third-party storage and transportation facilities for natural gas supply;
|
•
|
operating risks incidental to handling, storing, transporting and providing customers with natural gas;
|
•
|
access to adequate supplies of natural gas;
|
•
|
the regulatory and pricing policies of federal and state regulatory agencies;
|
•
|
the costs of compliance with present and future environmental laws, including potential climate change-related legislation;
|
•
|
the ultimate outcome of pending regulatory proceedings;
|
•
|
the disallowance of recovery of environmental-related expenditures and other regulatory changes; and
|
•
|
environmental-related and other litigation and other uncertainties.
|
•
|
NJR Energy Investments (NJREI), an unregulated affiliate that consolidates the Company's unregulated energy-related investments. NJREI includes the following wholly owned subsidiaries:
|
▪
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NJR Clean Energy Ventures (NJRCEV), a subsidiary formed in 2009, which the Company uses to invest in clean energy projects.
|
▪
|
NJR Investment, a company that makes and holds certain energy-related investments, primarily through equity instruments of public companies.
|
▪
|
NJR Energy Corporation (NJR Energy), a company that invests in energy-related ventures.
|
•
|
NJR Retail Holdings (Retail Holdings), an unregulated affiliate that consolidates the Company's unregulated retail operations. Retail Holdings consists of the following wholly owned subsidiaries:
|
▪
|
NJR Home Services (NJRHS), a company that provides heating, ventilation and cooling (HVAC) service repair and contract services to approximately
149,400
customers, as well as invests in clean energy projects.
|
▪
|
Commercial Realty & Resources (CR&R), a company that holds and develops commercial real estate.
|
▪
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NJR Plumbing Services (NJRPS), a company that provides plumbing repair and installation services.
|
•
|
NJR Service (NJR Service), an unregulated company that provides shared administrative services, including corporate communications, financial and planning, internal audit, legal, human resources and information technology for NJR and all subsidiaries
|
|
Operating Revenues
|
Throughput
|
|||||||
|
(Thousands)
|
|
(Bcf)
|
|
|||||
Residential
|
$
|
471,056
|
|
49
|
%
|
40.3
|
|
27
|
%
|
Commercial and other
|
112,582
|
|
12
|
%
|
8.2
|
|
5
|
%
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Firm transportation
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45,616
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|
5
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%
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10.1
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|
7
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%
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Total residential and commercial
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629,254
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66
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%
|
58.6
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|
39
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%
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Interruptible
|
8,454
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|
1
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%
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7.7
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|
5
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%
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Total system
|
637,708
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|
67
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%
|
66.3
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|
44
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%
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|
Incentive programs
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307,772
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33
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%
|
83.9
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|
56
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%
|
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Total
|
$
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945,480
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100
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%
|
150.2
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|
100
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%
|
Pipeline
|
Maximum daily
|
Expiration
|
||
deliverability (dths)
|
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Algonquin Gas Transmission
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12,000
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2011
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Texas Eastern Transmission, L.P.
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330,948
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Various dates between 2011 and 2023
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Tennessee Gas Pipeline Co.
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25,166
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Various dates between 2011 and 2013
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Transcontinental Gas Pipe Line Corp.
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3,931
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2014
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Columbia Gulf Transmission Corp.
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20,000
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|
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2024
|
Total
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392,045
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Pipeline
|
Maximum daily
|
Expiration
|
||
deliverability (dths)
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Texas Eastern Transmission, L.P.
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94,557
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2014
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Transcontinental Gas Pipe Line Corp.
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8,384
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2014
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Total
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102,941
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Company
|
Maximum daily
|
Expiration
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deliverability (dths)
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ANR Pipeline Company
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39,847
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2013
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Dominion Transmission Corporation
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103,714
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Various dates between 2012 and 2017
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Steckman Ridge, L.P.
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38,000
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2020
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Central NY Oil & Gas (Stagecoach)
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25,337
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2011
|
Total
|
206,898
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•
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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 financial margin (as defined below);
|
•
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Providing natural gas portfolio management services to nonaffiliated utilities, electric generation facilities and natural gas producers;
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•
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Leveraging transactions for the delivery of natural gas to customers by aggregating the natural gas commodity costs and transportation costs in order to minimize the total cost required to provide and deliver natural gas to NJRES' customers. These transactions identify the lowest cost alternative with the natural gas supply, transportation availability and markets to which NJRES is able to access through its business footprint and contractual asset portfolio; and
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•
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Managing economic hedging programs that are designed to mitigate adverse market price fluctuations in natural gas transportation and storage commitments.
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•
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NJR Energy Holdings invests in energy-related ventures through its subsidiary, NJNR Pipeline, which consists of its 5.53 percent equity investment in Iroquois, which is a 412-mile natural gas pipeline from the New York-Canadian border to Long Island, New York;
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•
|
NJR Steckman Ridge Storage Company, which holds the Company's 50 percent equity investment in Steckman Ridge. Steckman Ridge is a partnership, jointly owned and controlled by subsidiaries of the Company and subsidiaries of Spectra Energy Corporation, that built, owns and operates a 17.7 Bcf natural gas storage facility in western Pennsylvania.
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•
|
NJRHS, which provid
es
Heating, Ventilating, and Air Conditioning
(HVAC) service, sales and installation of appliances to approximately
149,400
customers and invests in residential clean energy projects;
|
•
|
NJRCEV, a subsidiary formed in 2009, which was created to invest in clean energy projects;
|
•
|
CR&R, which holds and develops commercial real estate.
|
•
|
NJR Investment, a company that invests in and holds certain energy-related investments, primarily through equity instruments of public companies;
|
•
|
NJR Energy, a company that invests in energy-related ventures; and
|
•
|
NJR Service, which provides shared administrative and financial services to the Company and all its subsidiaries.
|
•
|
Principal Executive Officer and Senior Financial Officers Code of Ethics;
|
•
|
the charters of the following Board Committees: Audit, Leadership Development and Compensation and Nominating/Corporate Governance.
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Office
|
Name
|
Age
|
Officer
Since
|
Chairman of the Board, President and Chief Executive Officer
|
Laurence M. Downes
|
53
|
1986
|
Executive Vice President and Chief Operating Officer, NJNG and Senior Vice President, Corporate Affairs and Marketing
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Kathleen T. Ellis
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57
|
2004
|
Senior Vice President and Chief Financial Officer
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Glenn C. Lockwood
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49
|
1990
|
Senior Vice President and General Counsel
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Mariellen Dugan
|
44
|
2005
|
Senior Vice President, NJRES
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Stephen Westhoven
|
42
|
2004
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Vice President, Corporate Services, NJR Service
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Deborah G. Zilai
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57
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1996
|
|
2010
|
2009
|
Dividends Paid
|
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|
High
|
Low
|
High
|
Low
|
2010
|
2009
|
Fiscal Quarter
|
|
|
|
|
|
|
First
|
$38.55
|
$34.49
|
$40.22
|
$21.90
|
$0.31
|
$0.28
|
Second
|
$38.17
|
$33.49
|
$42.37
|
$29.95
|
$0.34
|
$0.31
|
Third
|
$39.01
|
$34.07
|
$37.57
|
$30.79
|
$0.34
|
$0.31
|
Fourth
|
$39.68
|
$34.42
|
$40.61
|
$35.64
|
$0.34
|
$0.31
|
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
|
||||
07/01/10 - 07/31/10
|
—
|
|
—
|
|
—
|
|
|
1,729,471
|
08/01/10 - 08/31/10
|
41,700
|
|
37.93
|
|
41,700
|
|
(1)
|
1,687,771
|
09/01/10 - 09/30/10
|
—
|
|
—
|
|
—
|
|
|
1,687,771
|
Total
|
41,700
|
|
$37.93
|
|
41,700
|
|
|
1,687,771
|
(Thousands, except per share data)
|
|
|
|
|
|
||||||||||
Fiscal Years Ended September 30,
|
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||
SELECTED FINANCIAL DATA
|
|
|
|
|
|
||||||||||
Operating Revenues
|
$
|
2,639,304
|
|
$
|
2,592,460
|
|
$
|
3,816,210
|
|
$
|
3,021,765
|
|
$
|
3,271,229
|
|
Operating Expenses
|
|
|
|
|
|
||||||||||
Gas purchases
|
2,167,558
|
|
2,245,169
|
|
3,330,756
|
|
2,625,560
|
|
2,639,489
|
|
|||||
Operation and maintenance
|
148,565
|
|
149,151
|
|
148,384
|
|
136,601
|
|
121,384
|
|
|||||
Regulatory rider expenses
|
45,966
|
|
44,992
|
|
39,666
|
|
37,605
|
|
28,587
|
|
|||||
Depreciation and amortization
|
32,267
|
|
30,328
|
|
38,464
|
|
36,235
|
|
34,753
|
|
|||||
Energy and other taxes
|
56,823
|
|
74,750
|
|
65,602
|
|
62,499
|
|
58,632
|
|
|||||
Total Operating Expenses
|
2,451,179
|
|
2,544,390
|
|
3,622,872
|
|
2,898,500
|
|
2,882,845
|
|
|||||
Operating Income
|
188,125
|
|
48,070
|
|
193,338
|
|
123,265
|
|
388,384
|
|
|||||
Other income
|
5,258
|
|
4,409
|
|
4,368
|
|
4,294
|
|
4,725
|
|
|||||
Interest expense, net of capitalized interest
|
21,251
|
|
21,014
|
|
25,811
|
|
27,613
|
|
25,669
|
|
|||||
Income before Income Taxes
|
172,132
|
|
31,465
|
|
171,895
|
|
99,946
|
|
367,440
|
|
|||||
Income tax provision
|
64,692
|
|
11,376
|
|
66,034
|
|
39,778
|
|
148,554
|
|
|||||
Equity in earnings of affiliates
|
10,017
|
|
7,153
|
|
3,307
|
|
2,765
|
|
3,022
|
|
|||||
Net Income
|
$
|
117,457
|
|
$
|
27,242
|
|
$
|
109,168
|
|
$
|
62,933
|
|
$
|
221,908
|
|
Total Assets
|
$
|
2,563,133
|
|
$
|
2,321,030
|
|
$
|
2,635,297
|
|
$
|
2,210,354
|
|
$
|
2,398,928
|
|
|
|
|
|
|
|
||||||||||
CAPITALIZATION
|
|
|
|
|
|
||||||||||
Common stock equity
|
$
|
725,483
|
|
$
|
689,726
|
|
$
|
728,068
|
|
$
|
650,648
|
|
$
|
629,861
|
|
Long-term debt
|
428,925
|
|
455,492
|
|
455,117
|
|
383,184
|
|
332,332
|
|
|||||
Total Capitalization
|
$
|
1,154,408
|
|
$
|
1,145,218
|
|
$
|
1,183,185
|
|
$
|
1,033,832
|
|
$
|
962,193
|
|
|
|
|
|
|
|
||||||||||
COMMON STOCK DATA
|
|
|
|
|
|
||||||||||
Earnings per share-Basic
|
$2.84
|
$0.65
|
|
$2.61
|
|
$1.50
|
|
$5.31
|
|
||||||
Earnings per share-Diluted
|
$2.82
|
$0.64
|
|
$2.59
|
|
$1.49
|
|
$5.27
|
|
||||||
Dividends declared per share
|
$1.36
|
$1.24
|
|
$1.11
|
|
$1.01
|
|
$0.96
|
|
Fiscal Years Ended September 30,
|
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||
Operating Revenues
($ in thousands)
|
|
|
|
|
|
||||||||||
Residential
|
$
|
471,056
|
|
$
|
686,798
|
|
$
|
594,147
|
|
$
|
584,727
|
|
$
|
598,274
|
|
Commercial, Industrial and other
|
112,582
|
|
144,565
|
|
149,177
|
|
132,113
|
|
172,465
|
|
|||||
Firm transportation
|
45,616
|
|
40,356
|
|
28,634
|
|
36,794
|
|
28,656
|
|
|||||
Total residential and commercial
|
629,254
|
|
871,719
|
|
771,958
|
|
753,634
|
|
799,395
|
|
|||||
Interruptible
|
8,454
|
|
5,711
|
|
11,840
|
|
7,141
|
|
12,134
|
|
|||||
Total system
|
637,708
|
|
877,430
|
|
783,798
|
|
760,775
|
|
811,529
|
|
|||||
Incentive programs
|
307,772
|
|
204,571
|
|
295,026
|
|
244,813
|
|
327,245
|
|
|||||
Total Operating Revenues
|
$
|
945,480
|
|
$
|
1,082,001
|
|
$
|
1,078,824
|
|
$
|
1,005,588
|
|
$
|
1,138,774
|
|
Throughput (Bcf)
|
|
|
|
|
|
||||||||||
Residential
|
40.3
|
|
43.6
|
|
40.8
|
|
41.8
|
|
39.4
|
|
|||||
Commercial, Industrial and other
|
8.2
|
|
9.8
|
|
9.0
|
|
9.4
|
|
10.4
|
|
|||||
Firm transportation
|
10.1
|
|
9.4
|
|
8.9
|
|
8.6
|
|
7.4
|
|
|||||
Total residential and commercial
|
58.6
|
|
62.8
|
|
58.7
|
|
59.8
|
|
57.2
|
|
|||||
Interruptible
|
7.7
|
|
4.1
|
|
6.4
|
|
6.5
|
|
7.2
|
|
|||||
Total system
|
66.3
|
|
66.9
|
|
65.1
|
|
66.3
|
|
64.4
|
|
|||||
Incentive programs
|
83.9
|
|
66.1
|
|
34.5
|
|
36.5
|
|
38.4
|
|
|||||
Total Throughput
|
150.2
|
|
133.0
|
|
99.6
|
|
102.8
|
|
102.8
|
|
|||||
Customers at Year-End
|
|
|
|
|
|
||||||||||
Residential
|
438,274
|
|
437,793
|
|
437,655
|
|
435,169
|
|
429,834
|
|
|||||
Commercial, Industrial and other
|
26,312
|
|
27,771
|
|
29,002
|
|
28,916
|
|
28,914
|
|
|||||
Firm transportation
|
25,724
|
|
20,965
|
|
16,830
|
|
14,104
|
|
12,874
|
|
|||||
Total residential and commercial
|
490,310
|
|
486,529
|
|
483,487
|
|
478,189
|
|
471,622
|
|
|||||
Interruptible
|
43
|
|
45
|
|
46
|
|
45
|
|
48
|
|
|||||
Incentive programs
|
40
|
|
36
|
|
27
|
|
26
|
|
35
|
|
|||||
Total Customers at Year-End
|
490,393
|
|
486,610
|
|
483,560
|
|
478,260
|
|
471,705
|
|
|||||
Interest Coverage Ratio
(1)
|
9.43
|
|
8.19
|
|
6.08
|
|
6.03
|
|
7.63
|
|
|||||
Average Therm Use per Customer
|
|
|
|
|
|
||||||||||
Residential
|
919
|
|
995
|
|
931
|
|
960
|
|
920
|
|
|||||
Commercial, Industrial and other
|
4,986
|
|
4,777
|
|
5,303
|
|
5,710
|
|
5,084
|
|
|||||
Degree Days
|
4,341
|
|
4,791
|
|
4,399
|
|
4,481
|
|
4,367
|
|
|||||
Weather as a Percent of Normal
(2)
|
91
|
%
|
101
|
%
|
91
|
%
|
94
|
%
|
90
|
%
|
|||||
Number of Employees
|
582
|
|
613
|
|
572
|
|
548
|
|
516
|
|
(1)
|
NJNG's Income from Operations divided by interest expense.
|
(2)
|
Normal heating degree-days are based on a 20-year average, calculated based upon 3 reference areas representative of NJNG's service territory.
|
($ in thousands)
|
2010
|
|
2009
|
||||||||
Assets
|
|
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
1,904,545
|
|
75
|
%
|
|
$
|
1,797,165
|
|
77
|
%
|
Energy Services
|
432,380
|
|
17
|
|
|
327,532
|
|
14
|
|
||
Midstream Assets
|
159,882
|
|
6
|
|
|
153,609
|
|
7
|
|
||
Retail and Other
|
85,864
|
|
3
|
|
|
69,411
|
|
3
|
|
||
Intercompany Assets
(1)
|
(19,538
|
)
|
(1
|
)
|
|
(26,687
|
)
|
(1
|
)
|
||
Total
|
$
|
2,563,133
|
|
100
|
%
|
|
$
|
2,321,030
|
|
100
|
%
|
(1)
|
Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.
|
($ in Thousands)
|
2010
|
|
2009
|
|
2008
|
||||||||||||
Net Income (Loss)
|
|
|
|
|
|
|
|
|
|||||||||
Natural Gas Distribution
|
$
|
70,242
|
|
60
|
%
|
|
$
|
65,403
|
|
240
|
%
|
|
$
|
42,479
|
|
39
|
%
|
Energy Services
|
42,711
|
|
36
|
|
|
(32,632
|
)
|
(120
|
)
|
|
67,166
|
|
61
|
|
|||
Midstream Assets
|
6,444
|
|
5
|
|
|
2,873
|
|
11
|
|
|
1,839
|
|
2
|
|
|||
Retail and Other
|
(1,712
|
)
|
(1
|
)
|
|
(8,251
|
)
|
(30
|
)
|
|
(2,316
|
)
|
(2
|
)
|
|||
Intercompany net income
(1)
|
(228
|
)
|
—
|
|
|
(151
|
)
|
(1
|
)
|
|
—
|
|
—
|
|
|||
Total
|
$
|
117,457
|
|
100
|
%
|
|
$
|
27,242
|
|
100
|
%
|
|
$
|
109,168
|
|
100
|
%
|
Net financial earnings by business segment and operations are as follows:
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
($ in Thousands)
|
2010
|
|
2009
|
|
2008
|
||||||||||||
Net Financial Earnings (Loss)
|
|
|
|
|
|
|
|
|
|||||||||
Natural Gas Distribution
|
$
|
70,242
|
|
69
|
%
|
|
$
|
65,403
|
|
65
|
%
|
|
$
|
42,479
|
|
46
|
%
|
Energy Services
|
24,814
|
|
25
|
|
|
31,179
|
|
31
|
|
|
47,003
|
|
49
|
|
|||
Midstream Assets
|
6,444
|
|
6
|
|
|
2,873
|
|
3
|
|
|
1,839
|
|
2
|
|
|||
Retail and Other
|
264
|
|
—
|
|
|
1,666
|
|
1
|
|
|
2,494
|
|
3
|
|
|||
Intercompany net financial earnings (loss)
(1)
|
—
|
|
—
|
|
|
(151
|
)
|
—
|
|
|
—
|
|
—
|
|
|||
Total
|
$
|
101,764
|
|
100
|
%
|
|
$
|
100,970
|
|
100
|
%
|
|
$
|
93,815
|
|
100
|
%
|
•
|
Earning a reasonable rate of return on the investments in its natural gas distribution system, as well as recovery of all prudently incurred costs in order to provide safe and reliable service throughout NJNG's territory;
|
•
|
Working with the BPU and the Department of the Public Advocate, Division of Rate Counsel (Rate Counsel), on the continuing review of the Conservation Incentive Program (CIP). The CIP allows NJNG to promote conservation programs to its customers while maintaining protection of its utility gross margin against potential losses 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 new customer growth rate, which is expected to be approximately 1.3 percent annually over the next 2 years;
|
•
|
Generating earnings from various BPU-authorized gross margin-sharing incentive programs;
|
•
|
Maintaining the integrity of its infrastructure, while working with the BPU to accelerate certain infrastructure projects in an effort to stimulate the local and state economies;
|
•
|
Coordinating with the BPU on NJNG's clean energy goals; and
|
•
|
Managing the volatility of wholesale natural gas prices through a hedging program designed to keep customers' Basic Gas Supply Service (BGSS) rates as stable as possible.
|
•
|
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;
|
•
|
Providing natural gas portfolio management services to nonaffiliated utilities,
natural gas producers
and electric generation facilities;
|
•
|
Leveraging transactions for the delivery of natural gas to customers by aggregating the natural gas commodity costs and transportation costs in order to minimize the total cost required to provide and deliver natural gas to NJRES' customers by identifying the lowest cost alternative with the natural gas supply, transportation availability and markets to which NJRES is able to access through its business footprint and contractual asset portfolio; and
|
•
|
Managing economic hedging programs that are designed to mitigate adverse market price fluctuations in natural gas transportation and storage commitments.
|
•
|
an increase in operating revenues of
$186.3 million
and gas purchases of
$64.1 million
at NJRES stemming from higher average sales and gas purchase volumes partially offset by lower average prices, which correlate to the lower price levels on the NYMEX that averaged
$4.49
per MMBtu
during fiscal
2010
compared with
$4.68
per MMBtu
during fiscal
2009
. In addition, operating revenue increased due to higher unrealized gains in the value of derivatives.
|
•
|
an increase in operating revenues of
$16.6 million
at Retail and Other due primarily to lower unrealized losses at NJR Energy, as a result of the settlement of certain natural gas swap contracts, which reduced NJR Energy's exposure to shifts in market pricing during fiscal
2010
; partially offset by
|
•
|
a decrease in operating revenues of
$136.5 million
and gas purchases of
$119.1 million
at NJNG primarily as a result of additional bill credits and refunds during fiscal
2010
along with a decrease in firm sales due to reductions in the average periodic BGSS rate for residential and small commercial customers and weather being
9.4 percent
warmer than the prior year, partially offset by an increase in off-system sales.
|
•
|
a decrease in Operating revenues of $1.2 billion and Gas purchases of $1 billion at NJRES and a decrease in Operating revenues of $8.8 million at Retail and Other as a result of lower average prices on the NYMEX;
|
•
|
an increase in Operating revenues of $3.2 million and a decrease in Gas purchases of $43.3 million at NJNG. The increase in Operating revenue was due primarily to an increase in base rates, while increased credits from incentive programs contributed to the decrease in Gas purchases.
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Utility Gross Margin
|
|
|
|
||||||
Operating revenues
|
$
|
945,480
|
|
$
|
1,082,001
|
|
$
|
1,078,824
|
|
Less:
|
|
|
|
||||||
Gas purchases
|
590,813
|
|
709,906
|
|
753,249
|
|
|||
Energy and other taxes
|
48,958
|
|
66,768
|
|
58,539
|
|
|||
Regulatory rider expense
|
46,076
|
|
44,992
|
|
39,666
|
|
|||
Total Utility Gross Margin
|
259,633
|
|
260,335
|
|
227,370
|
|
|||
Operation and maintenance expense
|
103,226
|
|
106,814
|
|
98,035
|
|
|||
Depreciation and amortization
|
31,464
|
|
29,417
|
|
37,723
|
|
|||
Other taxes not reflected in utility gross margin
|
4,009
|
|
3,740
|
|
3,476
|
|
|||
Operating income
|
120,934
|
|
120,364
|
|
88,136
|
|
|||
Other income
|
4,343
|
|
3,474
|
|
3,460
|
|
|||
Interest expense, net of capitalized interest
|
16,618
|
|
18,706
|
|
21,277
|
|
|||
Income tax provision
|
38,417
|
|
39,729
|
|
27,840
|
|
|||
Net income
|
$
|
70,242
|
|
$
|
65,403
|
|
$
|
42,479
|
|
•
|
a decrease in operating revenues and gas purchases related to firm sales in the amount of $131.1 million, inclusive of sales tax, and $122.9 million, respectively, as a result of a decrease of approximately 28 percent in the average periodic BGSS rate per therm for residential and small commercial customers and 7.4 percent per therm for large commercial customers, offset by an increase in riders of 6.5 percent per therm;
|
•
|
a decrease in operating revenues and gas purchases in the amount of $61.3 million and $57.3 million, respectively, due to a combination of refunds and bill credits in fiscal 2010 of $110.4 million, compared with bill credits in fiscal
2009
of $49.1 million, inclusive of sales tax refunds of $7.2 million and $3.2 million, respectively. NJNG extends refunds and credits to customers to manage reductions in the cost to acquire wholesale natural gas, compared with the established rate included in its BGSS tariff ;
|
•
|
a decrease in operating revenues and gas purchases related to firm sales in the amount of $64.8 million and $46 million, respectively, due to lower therm usage due primarily to customer conservation and weather being
9.4 percent
warmer than the prior year, partially offset by an increase in operating revenue of $13 million, as a result of higher accruals relating to the CIP during fiscal
2010
; partially offset by
|
•
|
an increase in operating revenues and gas purchases related to off-system sales in the amount of $103.2 million and $103.3 million, respectively, as a result of 55 percent higher volumes due primarily to greater opportunities in the wholesale energy market.
|
•
|
an increase in Operating revenue related to firm sales in the amount of $79.9 million as a result of increases in BGSS, base rates, rates associated with riders and sales tax and TEFA as described below and an increase in Gas purchases in the amount of $39.2 million, as a result of the BGSS increases;
|
•
|
an increase in Operating revenue and Gas purchases related to firm sales in the amount of $52.2 million and $34.2 million, respectively, due primarily to weather being 8.9 percent colder than the same period of the prior fiscal year, partially offset by a decrease in Operating revenue of $19.2 million, as a result of lower accruals relating to the CIP during fiscal 2009;
|
•
|
a decrease in Operating revenue and Gas purchases related to off-system sales in the amount of $85.4 million and $86.6 million, respectively, as a result of a 47 percent lower average sales prices that decreased from $10.13/dth to $5.37/dth due to the change in the wholesale price of natural gas;
|
•
|
a net decrease in Operating revenue and Gas purchases of $15 million related to fiscal 2009 temporary rate credits of approximately $45 million extended to customers, compared with a BGSS refund of $30 million given to customers during fiscal 2008. NJNG extends these credits and refunds to its customers to manage the recovery of its gas costs during periods when wholesale natural gas costs are declining in comparison with the established rate included in NJNG's BGSS tariff;
|
•
|
a decrease of $6.5 million in Gas purchases related to increased amounts received through the storage incentive program due primarily to the timing of the incentive margins during the program's injection period compared with the same period in the prior fiscal year;
|
•
|
a decrease in Operating revenue and Gas purchases related to interruptible sales in the amount of $6.1 million and $5.4 million, respectively, due to a decrease in sales to electric co-generation customers; and
|
•
|
a decrease of $1.7 million in Gas purchases related to increased amounts earned through the financial risk management (FRM) and capacity release incentive programs of $3.8 million in fiscal
2009
compared with $2.1 million in fiscal
2008
due primarily to lower NYMEX market prices in comparison to published benchmark prices, resulting in additional opportunities to purchase call options that were below the established quarterly Financial Risk Management (FRM) benchmark pricing levels.
|
•
|
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 or Storage Incentive programs (defined below in
Incentive Programs
) are shared between customers and NJNG; and
|
|
2010
|
|
2009
|
|
2008
|
|
Residential transport
|
17,932
|
|
14,608
|
|
11,542
|
|
Commercial transport
|
7,792
|
|
6,357
|
|
5,288
|
|
Total transport
|
25,724
|
|
20,965
|
|
16,830
|
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Weather
(1)
|
$
|
9,032
|
|
$
|
(177
|
)
|
$
|
9,073
|
|
Usage
|
6,886
|
|
3,101
|
|
13,033
|
|
|||
Total
|
$
|
15,918
|
|
$
|
2,924
|
|
$
|
22,106
|
|
(1)
|
Compared with the 20-year average, weather was
8.6 percent
warmer-than-normal during fiscal
2010
,
0.9 percent
colder-than-normal during fiscal
2009
and
8.7 percent
warmer-than-normal during fiscal
2008
.
|
•
|
a decrease in bad debt expense of
$3.9 million
due primarily to lower reserve requirements during fiscal
2010
as a result of BGSS customer credits;
|
•
|
a decrease of
$2.5 million
due primarily to higher capitalized engineering costs during fiscal 2010;
|
•
|
a decrease in compensation costs of
$1.3 million
due primarily to lower incentive accruals;
|
•
|
a decrease in consulting fees of
$580,000
due primarily to higher consulting fees in fiscal 2009 associated with clean energy programs that did not recur in fiscal 2010; partially offset by
|
•
|
an increase in fringe benefits of
$4 million
related to pension and health benefit costs due to the impact of a decline in the returns on plan assets and the decline in the discount rate used to measure plan liabilities coupled with an increase in actual medical claims; and
|
•
|
an increase in charitable contributions of
$725,000
.
|
•
|
increased benefit costs of $3.1 million, primarily due to a $1.4 million credit in fiscal
2008
, that did not recur in fiscal 2009, related to an adjustment to accrued medical premium expenses to reflect lower costs based on actual claims, coupled with higher medical claims in fiscal
2009
and increased Pension/OPEB costs;
|
•
|
an increase in the bad debt expense of $2.5 million associated with higher operating revenues and additional write-offs as a result of the economic recession and the aging of receivables;
|
•
|
increased labor costs of $1.1 million due primarily to annual wage increases and an increase in the number of employees;
|
•
|
an increase in computer software leasing and maintenance of $1.0 million;
|
•
|
higher pipeline integrity management costs of $641,000
due to additional system assessments; and
|
•
|
an increase of $515,000 in contractors expenses due to third party damage repair and increased maintenance.
|
•
|
Storage:
NJRES attempts to take advantages of differences in market prices occurring over different time periods (time spreads) as follows:
|
◦
|
NJRES can purchase gas to inject into storage and concurrently lock in margin with a contract to sell the natural gas at a higher price at a future date;
|
◦
|
NJRES can purchase a future contract with an early delivery date at a lower price and simultaneously sell another future contract with a later delivery date having a higher price; and
|
◦
|
NJRES can “borrow” gas from a pipeline or storage operator and repay that gas at a later date, and earn a margin by selling the gas at a later date at a higher price and/or by receiving a fee.
|
•
|
Transportation (Basis):
Similarly, NJRES benefits from pricing differences between various receipt and delivery points along a natural gas pipeline as follows:
|
◦
|
NJRES can utilize its pipeline capacity by purchasing natural gas at a lower price location and transporting to a higher value location. NJRES can enter into a basis swap contract, a financial commodity derivative based on the price of natural gas at 2 different locations, when it will lead to positive cash flows and margin for NJRES.
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Operating revenues
|
$
|
1,685,044
|
|
$
|
1,498,742
|
|
$
|
2,714,733
|
|
Gas purchases (including demand charges)
|
1,601,701
|
|
1,537,634
|
|
2,577,667
|
|
|||
Gross margin (loss)
|
83,343
|
|
(38,892
|
)
|
137,066
|
|
|||
Operation and maintenance expense
|
14,947
|
|
16,468
|
|
27,384
|
|
|||
Depreciation and amortization
|
153
|
|
205
|
|
206
|
|
|||
Other taxes
|
858
|
|
1,574
|
|
1,134
|
|
|||
Operating income (loss)
|
67,385
|
|
(57,139
|
)
|
108,342
|
|
|||
Other income
|
15
|
|
570
|
|
204
|
|
|||
Interest expense, net
|
1,439
|
|
322
|
|
2,574
|
|
|||
Income tax provision (benefit)
|
23,250
|
|
(24,259
|
)
|
38,806
|
|
|||
Net income (loss)
|
$
|
42,711
|
|
$
|
(32,632
|
)
|
$
|
67,166
|
|
•
|
31.4
Bcf of net short futures contracts and fixed swap positions, and;
|
•
|
11.1
Bcf of net short basis swap positions.
|
•
|
31.5
Bcf of net short futures contracts and fixed swap positions, and;
|
•
|
11.5
Bcf of net short basis swap positions.
|
•
|
20.7
Bcf of net short futures contracts and fixed swap positions, and;
|
•
|
46.4
Bcf of net short basis swap positions.
|
•
|
Unrealized gains and losses on derivatives are recognized in reported earnings in periods prior to sales of physical gas inventory flows; and
|
•
|
Settlement of economic hedges that result in realized gains and losses prior to when the related physical gas inventory movements occur.
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Operating revenues
|
$
|
1,685,044
|
|
$
|
1,498,742
|
|
$
|
2,714,733
|
|
Less: Gas purchases
|
1,601,701
|
|
1,537,634
|
|
2,577,667
|
|
|||
Add:
|
|
|
|
||||||
Unrealized (gain) loss on derivative instruments and related instruments
|
(31,113
|
)
|
47,631
|
|
(18,449
|
)
|
|||
Effects of economic hedging related to natural gas inventory
|
3,469
|
|
55,940
|
|
(14,528
|
)
|
|||
Financial margin
|
$
|
55,699
|
|
$
|
64,679
|
|
$
|
104,089
|
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Operating (loss) income
|
$
|
67,385
|
|
$
|
(57,139
|
)
|
$
|
108,342
|
|
Add:
|
|
|
|
||||||
Operation and maintenance expense
|
14,947
|
|
16,468
|
|
27,384
|
|
|||
Depreciation and amortization
|
153
|
|
205
|
|
206
|
|
|||
Other taxes
|
858
|
|
1,574
|
|
1,134
|
|
|||
Subtotal - Gross margin (loss)
|
83,343
|
|
(38,892
|
)
|
137,066
|
|
|||
Add:
|
|
|
|
||||||
Unrealized (gain) loss on derivative instruments and related instruments
|
(31,113
|
)
|
47,631
|
|
(18,449
|
)
|
|||
Effects of economic hedging related to natural gas inventory
|
3,469
|
|
55,940
|
|
(14,528
|
)
|
|||
Financial margin
|
$
|
55,699
|
|
$
|
64,679
|
|
$
|
104,089
|
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Net (loss) income
|
$
|
42,711
|
|
$
|
(32,632
|
)
|
$
|
67,166
|
|
Add:
|
|
|
|
||||||
Unrealized (gain) loss derivative instruments and related transactions, net of taxes
|
(19,029
|
)
|
29,337
|
|
(10,838
|
)
|
|||
Effects of economic hedging related to natural gas inventory, net of taxes
|
1,132
|
|
34,474
|
|
(9,325
|
)
|
|||
Net financial earnings
|
$
|
24,814
|
|
$
|
31,179
|
|
$
|
47,003
|
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Equity in earnings of affiliates
|
$
|
12,996
|
|
$
|
6,886
|
|
$
|
3,467
|
|
Operation and maintenance expense
|
$
|
659
|
|
$
|
595
|
|
$
|
369
|
|
Interest expense, net
|
$
|
1,485
|
|
$
|
1,428
|
|
$
|
88
|
|
Net income
|
$
|
6,444
|
|
$
|
2,873
|
|
$
|
1,839
|
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Iroquois
|
$
|
4,610
|
|
$
|
4,666
|
|
$
|
3,467
|
|
Steckman Ridge
|
8,386
|
|
2,220
|
|
—
|
|
|||
Total equity in earnings
|
$
|
12,996
|
|
$
|
6,886
|
|
$
|
3,467
|
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Operating revenues
|
$
|
30,551
|
|
$
|
14,008
|
|
$
|
22,850
|
|
Operation and maintenance expense
|
$
|
29,971
|
|
$
|
26,073
|
|
$
|
22,806
|
|
Net loss
|
$
|
(1,712
|
)
|
$
|
(8,251
|
)
|
$
|
(2,316
|
)
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Net loss
|
$
|
(1,712
|
)
|
$
|
(8,251
|
)
|
$
|
(2,316
|
)
|
Add:
|
|
|
|
||||||
Unrealized loss on derivative instruments, net of taxes
|
1,976
|
|
9,917
|
|
4,810
|
|
|||
Net financial earnings
|
$
|
264
|
|
$
|
1,666
|
|
$
|
2,494
|
|
|
2010
|
|
2009
|
|
Common stock equity
|
55
|
%
|
53
|
%
|
Long-term debt
|
32
|
|
35
|
|
Short-term debt
|
13
|
|
12
|
|
Total
|
100
|
%
|
100
|
%
|
|
|
Up to
|
2-3
|
4-5
|
After
|
||||||||||
(Thousands)
|
Total
|
1 Year
|
Years
|
Years
|
5 Years
|
||||||||||
Long-term debt
(1)
|
$
|
544,526
|
|
$
|
35,610
|
|
$
|
31,220
|
|
$
|
86,688
|
|
$
|
391,008
|
|
Capital lease obligations
(1)
|
77,838
|
|
14,576
|
|
17,613
|
|
15,948
|
|
29,701
|
|
|||||
Operating leases
(1)
|
7,760
|
|
2,394
|
|
3,046
|
|
969
|
|
1,351
|
|
|||||
Short-term debt
|
147,600
|
|
147,600
|
|
—
|
|
—
|
|
—
|
|
|||||
New Jersey Clean Energy Program
(1)
|
30,935
|
|
12,644
|
|
18,291
|
|
—
|
|
—
|
|
|||||
Construction obligations
|
2,619
|
|
2,619
|
|
—
|
|
—
|
|
—
|
|
|||||
Accelerated Infrastructure Program (AIP)
|
23,251
|
|
23,251
|
|
—
|
|
—
|
|
—
|
|
|||||
Remediation expenditures
(2)
|
201,600
|
|
23,600
|
|
53,900
|
|
14,000
|
|
110,100
|
|
|||||
Natural gas supply purchase obligations-NJNG
|
24,036
|
|
24,036
|
|
—
|
|
—
|
|
—
|
|
|||||
Demand fee commitments-NJNG
|
693,962
|
|
95,279
|
|
193,680
|
|
133,096
|
|
271,907
|
|
|||||
Natural gas supply purchase obligations-NJRES
|
578,442
|
|
356,190
|
|
222,252
|
|
—
|
|
—
|
|
|||||
Demand fee commitments-NJRES
|
192,523
|
|
76,790
|
|
62,286
|
|
24,484
|
|
28,963
|
|
|||||
Total contractual cash obligations
|
$
|
2,525,092
|
|
$
|
814,589
|
|
$
|
602,288
|
|
$
|
275,185
|
|
$
|
833,030
|
|
(1)
|
These obligations include an interest component, as defined under the related governing agreements or in accordance with the applicable tax statute.
|
(2)
|
Expenditures are estimated.
|
•
|
seasonality of NJR's business;
|
•
|
fluctuations in wholesale natural gas prices;
|
•
|
timing of storage injections and withdrawals;
|
•
|
management of the deferral and recovery of gas costs;
|
•
|
changes in contractual assets utilized to optimize margins related to natural gas transactions; and
|
•
|
timing of the collections of receivables and payments of current liabilities.
|
•
|
higher natural gas inventory cost at NJRES during fiscal 2010, relative to fiscal 2009, in addition to an increase in volumes during fiscal 2010 that contributed approximately $208 million toward the decrease in cash. NJRES' average cost of gas during fiscal 2010 increased approximately 9 percent from $3.37 per MMBtu to $3.67 per MMBtu compared with a 65 percent reduction in average cost of gas during fiscal 2009;
|
•
|
a decrease in NJNG's gas costs recovered of approximately $137 million during fiscal 2010 due primarily to a continuation of BPU approved BGSS rate decreases, coupled with refunds and bill credits issued to customers totaling $110.4 million during fiscal 2010 compared with bill credits of $49.1 million during fiscal 2009 and a higher BGSS rate that was in place during fiscal 2009 to allow NJNG to collect gas costs that were underrecovered from the prior fiscal year; offset by
|
•
|
a favorable change in restricted broker margin requirements of $49.5 million due primarily to a reduction in margin calls as a result of unrealized and realized gains during fiscal 2010; and.
|
•
|
a decrease in cash of $183.9 million resulting from an increase in accounts receivable balances due primarily to higher sales volumes coupled with higher average sales prices at NJRES during fiscal 2010.
|
•
|
an increase in cash of $293.8 million resulting from an increase in accounts payable balances due primarily to higher purchase volumes coupled with higher average purchase prices at NJRES during fiscal 2010.
|
•
|
lower costs associated with natural gas inventory at NJRES due primarily to the decline in commodity prices in fiscal 2009 compared with rising prices during fiscal 2008. As a general indicator, NYMEX prices declined approximately 50 percent during fiscal 2009 compared with an increase of approximately 16 percent during fiscal 2008;
|
•
|
a reduction in receivable balances at NJRES due primarily to a 63 percent decrease in average sales price in fiscal 2009 compared with an increase in receivable balances during fiscal 2008, which resulted from a 31 percent increase in volumes coupled with a 37 percent increase in average sales prices;
|
•
|
an increase in NJNG's gas costs recovered during fiscal
2009
as a result of gas costs falling below the commodity component of NJNG's BGSS rate billed to its customers compared with fiscal
2008
. The amount of gas costs overrecovered was moderated by a BGSS refund of $30 million issued to NJNG's customers during fiscal
2008
and temporary rate credits of $45 million during fiscal
2009
;
|
•
|
discretionary cash contributions of $27.7 million to NJR's postemployment benefit plans; and
|
•
|
a decrease in NJRES payable balances primarily related to a 70 percent decrease in the cost of natural gas purchases, offset by a 25 percent increase in purchase volumes compared with an increase in both cost and volumes, during fiscal
2008
, as described below.
|
|
Standard and Poor's
|
Moody's
|
Corporate Rating
|
A
|
N/A
|
Commercial Paper
|
A-1
|
P-1
|
Senior Secured
|
A+
|
Aa3
|
Ratings Outlook
|
Stable
|
Stable
|
(Thousands)
|
Balance
September 30,
2009
|
Increase
(Decrease) in Fair
Market Value
|
Less
Amounts
Settled
|
Balance
September 30,
2010
|
||||||||||||
NJNG
|
|
$
|
(8,073
|
)
|
|
$
|
(40,718
|
)
|
|
$
|
(32,294
|
)
|
|
$
|
(16,497
|
)
|
NJRES
|
|
27,926
|
|
|
94,602
|
|
|
64,990
|
|
|
57,538
|
|
||||
NJR Energy
|
|
3,355
|
|
|
(7,220
|
)
|
|
(3,865
|
)
|
|
—
|
|
||||
Total
|
|
$
|
23,208
|
|
|
$
|
46,664
|
|
|
$
|
28,831
|
|
|
$
|
41,041
|
|
(Thousands)
|
2011
|
2012
|
2013-2015
|
After 2015
|
Total
Fair Value
|
|||||||||||||
Price based on NYMEX
|
$
|
22,303
|
|
$
|
(1,976
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,327
|
|
Price based on other external data
|
21,735
|
|
(910
|
)
|
|
(111
|
)
|
|
—
|
|
|
20,714
|
|
|||||
Total
|
$
|
44,038
|
|
$
|
(2,886
|
)
|
|
$
|
(111
|
)
|
|
$
|
—
|
|
|
$
|
41,041
|
|
|
|
Volume Bcf
|
Price per MMBtu
|
Amounts included in Derivatives (Thousands)
|
||||
NJNG
|
Futures
|
20.8
|
|
$3.75 - $6.35
|
|
$
|
(11,444
|
)
|
|
Swaps
|
(8.7
|
)
|
$3.85 - $5.15
|
|
(5,053
|
)
|
|
|
Options
|
—
|
|
$0.00 - $0.00
|
|
—
|
|
|
NJRES
|
Futures
|
(13.0
|
)
|
$3.72 - $7.11
|
|
31,770
|
|
|
|
Swaps
|
(7.3
|
)
|
$3.55 - $8.46
|
|
25,761
|
|
|
|
Options
|
0.6
|
|
$0.02 - $0.02
|
|
7
|
|
|
Total
|
|
|
|
|
$
|
41,041
|
|
(Thousands)
|
Balance
September 30,
2009
|
Increase
(Decrease) in Fair
Market Value
|
Less
Amounts
Settled
|
Balance
September 30,
2010
|
||||||||
NJRES - Prices based on other external data
|
|
$
|
16,295
|
|
17,485
|
|
15,790
|
|
|
$
|
17,990
|
|
(Thousands)
|
Balance
September 30,
2009
|
Increase
(Decrease) in Fair
Market Value
|
Less
Amounts
Settled
|
Balance
September 30,
2010
|
||||||||
NJRES
|
|
$
|
—
|
|
25
|
|
—
|
|
|
$
|
25
|
|
(Thousands)
|
2011
|
2012
|
|
2013-2015
|
After 2015
|
Total
Fair Value
|
||
Prices based on other external data
|
$15
|
4
|
|
6
|
|
—
|
|
$25
|
Derivative Fair Value Sensitivity Analysis
|
|
||||||||||||||
(Thousands)
|
HENRY HUB FUTURES and FIXED PRICE SWAPS
|
||||||||||||||
% increase in NYMEX natural gas futures prices
|
—
|
%
|
5
|
%
|
10
|
%
|
15
|
%
|
20
|
%
|
|||||
Estimated Change in Derivative Fair Value
|
$
|
—
|
|
$
|
(6,700
|
)
|
$
|
(13,400
|
)
|
$
|
(20,100
|
)
|
$
|
(26,800
|
)
|
Ending Derivative Fair Value
|
$
|
53,590
|
|
$
|
46,890
|
|
$
|
40,190
|
|
$
|
33,490
|
|
$
|
26,790
|
|
|
|
|
|
|
|
||||||||||
% decrease in NYMEX natural gas futures prices
|
—
|
%
|
(5
|
)%
|
(10
|
)%
|
(15
|
)%
|
(20
|
)%
|
|||||
Estimated Change in Derivative Fair Value
|
$
|
—
|
|
$
|
6,700
|
|
$
|
13,400
|
|
$
|
20,100
|
|
$
|
26,800
|
|
Ending Derivative Fair Value
|
$
|
53,590
|
|
$
|
60,290
|
|
$
|
66,990
|
|
$
|
73,690
|
|
$
|
80,390
|
|
(Thousands)
|
Gross Credit Exposure
|
Net Credit Exposure
|
||||||
Investment grade
|
|
$
|
111,603
|
|
|
$
|
73,136
|
|
Noninvestment grade
|
|
8,685
|
|
|
204
|
|
||
Internally rated investment grade
|
|
36,714
|
|
|
19,439
|
|
||
Internally rated noninvestment grade
|
|
11,056
|
|
|
2,393
|
|
||
Total
|
|
$
|
168,058
|
|
|
$
|
95,172
|
|
(Thousands)
|
Gross Credit Exposure
|
Net Credit Exposure
|
||||||
Investment grade
|
|
$
|
16,635
|
|
|
$
|
11,481
|
|
Noninvestment grade
|
|
471
|
|
|
283
|
|
||
Internally rated investment grade
|
|
251
|
|
|
98
|
|
||
Internally rated noninvestment grade
|
|
324
|
|
|
—
|
|
||
Total
|
|
$
|
17,681
|
|
|
$
|
11,862
|
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
improvements in the design of internal control over financial reporting related to the accounting of commodity transacting, resulting in the implementation of new and expanded processes and controls; and
|
(Thousands)
|
|
|
|
||||||
Fiscal Years Ended September 30,
|
2010
|
2009
|
2008
|
||||||
OPERATING REVENUES
|
|
|
|
||||||
Utility
|
$
|
937,433
|
|
$
|
1,082,001
|
|
$
|
1,078,824
|
|
Nonutility
|
1,701,871
|
|
1,510,459
|
|
2,737,386
|
|
|||
Total operating revenues
|
2,639,304
|
|
2,592,460
|
|
3,816,210
|
|
|||
OPERATING EXPENSES
|
|
|
|
||||||
Gas purchases:
|
|
|
|
||||||
Utility
|
576,220
|
|
707,758
|
|
753,249
|
|
|||
Nonutility
|
1,591,338
|
|
1,537,411
|
|
2,577,507
|
|
|||
Operation and maintenance
|
148,565
|
|
149,151
|
|
148,384
|
|
|||
Regulatory rider expenses
|
45,966
|
|
44,992
|
|
39,666
|
|
|||
Depreciation and amortization
|
32,267
|
|
30,328
|
|
38,464
|
|
|||
Energy and other taxes
|
56,823
|
|
74,750
|
|
65,602
|
|
|||
Total operating expenses
|
2,451,179
|
|
2,544,390
|
|
3,622,872
|
|
|||
OPERATING INCOME
|
188,125
|
|
48,070
|
|
193,338
|
|
|||
Other income
|
5,258
|
|
4,409
|
|
4,368
|
|
|||
Interest expense, net of capitalized interest
|
21,251
|
|
21,014
|
|
25,811
|
|
|||
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES
|
172,132
|
|
31,465
|
|
171,895
|
|
|||
Income tax provision
|
64,692
|
|
11,376
|
|
66,034
|
|
|||
Equity in earnings of affiliates
|
10,017
|
|
7,153
|
|
3,307
|
|
|||
NET INCOME
|
$
|
117,457
|
|
$
|
27,242
|
|
$
|
109,168
|
|
|
|
|
|
||||||
EARNINGS PER COMMON SHARE
|
|
|
|
||||||
BASIC
|
$2.84
|
$0.65
|
|
$2.61
|
|
||||
DILUTED
|
$2.82
|
$0.64
|
|
$2.59
|
|
||||
|
|
|
|
||||||
DIVIDENDS PER COMMON SHARE
|
$1.36
|
$1.24
|
|
$1.11
|
|
||||
|
|
|
|
||||||
WEIGHTED AVERAGE SHARES OUTSTANDING
|
|
|
|
||||||
BASIC
|
41,364
|
|
42,119
|
|
41,878
|
|
|||
DILUTED
|
41,630
|
|
42,465
|
|
42,176
|
|
(Thousands)
|
|
|
|
|
|
||||||
Fiscal Years Ended September 30,
|
2010
|
|
2009
|
|
2008
|
||||||
|
|
|
|
|
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
117,457
|
|
|
$
|
27,242
|
|
|
$
|
109,168
|
|
Adjustments to reconcile net income to cash flows from operating activities:
|
|
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments
|
(27,392
|
)
|
|
64,465
|
|
|
(12,929
|
)
|
|||
Depreciation and amortization
|
33,192
|
|
|
31,142
|
|
|
39,367
|
|
|||
Allowance for equity used during construction
|
(2,165
|
)
|
|
(568
|
)
|
|
—
|
|
|||
Allowance for bad debt expense
|
3,307
|
|
|
9,739
|
|
|
4,530
|
|
|||
Deferred income taxes
|
68,458
|
|
|
(31,435
|
)
|
|
13,715
|
|
|||
Manufactured gas plant remediation costs
|
(3,824
|
)
|
|
(12,867
|
)
|
|
(18,958
|
)
|
|||
Equity in earnings of affiliates, net of distributions received
|
839
|
|
|
2,924
|
|
|
(52
|
)
|
|||
Cost of removal - asset retirement obligations
|
(809
|
)
|
|
(943
|
)
|
|
(969
|
)
|
|||
Contributions to postemployment benefit plans
|
(19,567
|
)
|
|
(27,676
|
)
|
|
(1,014
|
)
|
|||
Changes in:
|
|
|
|
|
|
||||||
Components of working capital
|
(35,297
|
)
|
|
154,271
|
|
|
(35,992
|
)
|
|||
Other noncurrent assets
|
3,525
|
|
|
5,886
|
|
|
(4,591
|
)
|
|||
Other noncurrent liabilities
|
1,691
|
|
|
45,061
|
|
|
40,093
|
|
|||
Cash flows from operating activities
|
139,415
|
|
|
267,241
|
|
|
132,368
|
|
|||
CASH FLOWS (USED) IN INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Expenditures for
|
|
|
|
|
|
||||||
Utility plant
|
(86,620
|
)
|
|
(75,107
|
)
|
|
(72,329
|
)
|
|||
Real estate properties and other
|
(3,558
|
)
|
|
(388
|
)
|
|
(1,117
|
)
|
|||
Cost of removal
|
(7,201
|
)
|
|
(6,139
|
)
|
|
(6,833
|
)
|
|||
Investments in equity investees
|
(4,300
|
)
|
|
(43,843
|
)
|
|
(23,662
|
)
|
|||
(Investment in) withdrawal from restricted cash construction fund
|
(445
|
)
|
|
4,200
|
|
|
—
|
|
|||
Proceeds from available for sale investments
|
721
|
|
|
—
|
|
|
—
|
|
|||
Cash flows (used in) investing activities
|
(101,403
|
)
|
|
(121,277
|
)
|
|
(103,941
|
)
|
|||
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock
|
6,487
|
|
|
16,441
|
|
|
16,028
|
|
|||
Proceeds from long-term debt
|
—
|
|
|
—
|
|
|
125,000
|
|
|||
Tax benefit from stock options exercised
|
669
|
|
|
1,686
|
|
|
630
|
|
|||
Proceeds from sale-leaseback transaction
|
4,925
|
|
|
6,268
|
|
|
7,485
|
|
|||
Payments of long-term debt
|
(6,749
|
)
|
|
(60,362
|
)
|
|
(5,565
|
)
|
|||
Purchases of treasury stock
|
(29,650
|
)
|
|
(30,670
|
)
|
|
(11,039
|
)
|
|||
Payments of common stock dividends
|
(53,137
|
)
|
|
(50,967
|
)
|
|
(45,201
|
)
|
|||
Net proceeds (payments) of short-term debt
|
4,200
|
|
|
(34,800
|
)
|
|
(78,279
|
)
|
|||
Cash flows (used in) from financing activities
|
(73,255
|
)
|
|
(152,404
|
)
|
|
9,059
|
|
|||
Change in cash and temporary investments
|
(35,243
|
)
|
|
(6,440
|
)
|
|
37,486
|
|
|||
Cash and temporary investments at beginning of year
|
36,186
|
|
|
42,626
|
|
|
5,140
|
|
|||
Cash and temporary investments at end of year
|
$
|
943
|
|
|
$
|
36,186
|
|
|
$
|
42,626
|
|
CHANGES IN COMPONENTS OF WORKING CAPITAL
|
|
|
|
|
|
||||||
Receivables
|
$
|
(66,189
|
)
|
|
$
|
117,733
|
|
|
$
|
(98,326
|
)
|
Inventories
|
(38,743
|
)
|
|
169,157
|
|
|
(50,747
|
)
|
|||
Recovery of gas costs
|
(72,688
|
)
|
|
64,197
|
|
|
(37,577
|
)
|
|||
Gas purchases payable
|
100,290
|
|
|
(193,487
|
)
|
|
134,335
|
|
|||
Prepaid and accrued taxes
|
(10,431
|
)
|
|
(8,047
|
)
|
|
767
|
|
|||
Accounts payable and other
|
291
|
|
|
(5,593
|
)
|
|
(1,117
|
)
|
|||
Restricted broker margin accounts
|
35,468
|
|
|
(14,045
|
)
|
|
(15,003
|
)
|
|||
Customers' credit balances and deposits
|
18,740
|
|
|
9,760
|
|
|
36,195
|
|
|||
Other current assets
|
(2,035
|
)
|
|
14,596
|
|
|
(4,519
|
)
|
|||
Total
|
$
|
(35,297
|
)
|
|
$
|
154,271
|
|
|
(35,992
|
)
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
|
|
|
|
|
|
||||||
Cash paid for
|
|
|
|
|
|
||||||
Interest (net of amounts capitalized)
|
$
|
14,665
|
|
|
$
|
18,866
|
|
|
$
|
25,877
|
|
Income taxes
|
$
|
24,177
|
|
|
$
|
34,298
|
|
|
$
|
28,763
|
|
(Thousands)
|
|
|
||||
September 30,
|
2010
|
2009
|
||||
|
|
|
||||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
||||
Utility plant, at cost
|
$
|
1,525,348
|
|
$
|
1,438,945
|
|
Real estate properties and other, at cost
|
33,497
|
|
30,195
|
|
||
|
1,558,845
|
|
1,469,140
|
|
||
Accumulated depreciation and amortization
|
(423,126
|
)
|
(404,701
|
)
|
||
Property, plant and equipment, net
|
1,135,719
|
|
1,064,439
|
|
||
|
|
|
||||
CURRENT ASSETS
|
|
|
||||
Cash and temporary investments
|
943
|
|
36,186
|
|
||
Customer accounts receivable
|
|
|
||||
Billed
|
162,961
|
|
101,945
|
|
||
Unbilled revenues
|
7,411
|
|
8,616
|
|
||
Allowance for doubtful accounts
|
(2,993
|
)
|
(6,064
|
)
|
||
Regulatory assets
|
51,466
|
|
5,878
|
|
||
Gas in storage, at average cost
|
336,163
|
|
297,464
|
|
||
Materials and supplies, at average cost
|
6,070
|
|
6,026
|
|
||
Prepaid state taxes
|
55,880
|
|
37,886
|
|
||
Derivatives, at fair value
|
135,186
|
|
131,070
|
|
||
Restricted broker margin accounts
|
19,241
|
|
26,250
|
|
||
Deferred taxes
|
—
|
|
20,801
|
|
||
Other
|
12,680
|
|
18,131
|
|
||
Total current assets
|
785,008
|
|
684,189
|
|
||
|
|
|
||||
NONCURRENT ASSETS
|
|
|
||||
Investments in equity investees
|
169,234
|
|
160,508
|
|
||
Regulatory assets
|
454,601
|
|
391,025
|
|
||
Derivatives, at fair value
|
7,957
|
|
9,536
|
|
||
Other
|
10,614
|
|
11,333
|
|
||
Total noncurrent assets
|
642,406
|
|
572,402
|
|
||
Total assets
|
$
|
2,563,133
|
|
$
|
2,321,030
|
|
(Thousands, except share amounts)
|
|
|
||||
September 30,
|
2010
|
2009
|
||||
|
|
|
||||
CAPITALIZATION
|
|
|
||||
Common stock, $2.50 par value; authorized 75,000,000 shares; outstanding 2010-41,173,608; 2009-41,585,751
|
$
|
109,713
|
|
$
|
109,386
|
|
Premium on common stock
|
251,147
|
|
249,219
|
|
||
Accumulated other comprehensive (loss), net of tax
|
(12,007
|
)
|
(10,052
|
)
|
||
Treasury stock at cost and other; shares 2010-2,719,761; 2009-2,176,724
|
(110,385
|
)
|
(84,598
|
)
|
||
Retained earnings
|
487,015
|
|
425,771
|
|
||
Common stock equity
|
725,483
|
|
689,726
|
|
||
Long-term debt
|
428,925
|
|
455,492
|
|
||
Total capitalization
|
1,154,408
|
|
1,145,218
|
|
||
|
|
|
||||
CURRENT LIABILITIES
|
|
|
||||
Current maturities of long-term debt
|
31,257
|
|
6,510
|
|
||
Short-term debt
|
147,600
|
|
143,400
|
|
||
Gas purchases payable
|
230,402
|
|
130,112
|
|
||
Accounts payable and other
|
47,297
|
|
44,448
|
|
||
Dividends payable
|
13,998
|
|
13,026
|
|
||
Deferred and accrued taxes
|
23,737
|
|
11,205
|
|
||
Regulatory liabilities
|
—
|
|
36,203
|
|
||
New Jersey clean energy program
|
12,644
|
|
10,920
|
|
||
Derivatives, at fair value
|
78,447
|
|
94,853
|
|
||
Restricted broker margin accounts
|
28,459
|
|
—
|
|
||
Customers' credit balances and deposits
|
91,957
|
|
73,218
|
|
||
Total current liabilities
|
705,798
|
|
563,895
|
|
||
|
|
|
||||
NONCURRENT LIABILITIES
|
|
|
||||
Deferred income taxes
|
278,551
|
|
235,863
|
|
||
Deferred investment tax credits
|
6,549
|
|
6,870
|
|
||
Deferred revenue
|
7,656
|
|
8,203
|
|
||
Derivatives, at fair value
|
5,640
|
|
6,250
|
|
||
Manufactured gas plant remediation
|
201,600
|
|
146,700
|
|
||
Postemployment employee benefit liability
|
93,742
|
|
89,035
|
|
||
Regulatory liabilities
|
57,648
|
|
56,450
|
|
||
New Jersey clean energy program
|
18,291
|
|
28,449
|
|
||
Asset retirement obligation
|
26,009
|
|
25,097
|
|
||
Other
|
7,241
|
|
9,000
|
|
||
Total noncurrent liabilities
|
702,927
|
|
611,917
|
|
||
Commitments and contingent liabilities (Note 14)
|
|
|
|
|||
Total capitalization and liabilities
|
$
|
2,563,133
|
|
$
|
2,321,030
|
|
(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, 2007
|
41,612
|
|
$
|
108,223
|
|
$
|
226,571
|
|
|
$
|
(931
|
)
|
|
$
|
(69,948
|
)
|
$
|
386,734
|
|
$
|
650,649
|
|
Net income
|
|
|
|
|
|
|
|
109,168
|
|
109,168
|
|
|||||||||||
Other comprehensive (loss)
|
|
|
|
|
(1,783
|
)
|
|
|
|
(1,783
|
)
|
|||||||||||
Common stock issued under stock plans
|
555
|
|
376
|
|
9,800
|
|
|
|
|
6,212
|
|
|
16,388
|
|
||||||||
Tax benefits from stock plans
|
|
|
630
|
|
|
|
|
|
|
630
|
|
|||||||||||
Transition adjustment - uncertain tax positions
|
|
|
|
|
|
|
|
1,188
|
|
1,188
|
|
|||||||||||
Cash dividend declared
|
|
|
|
|
|
|
|
(46,344
|
)
|
(46,344
|
)
|
|||||||||||
Treasury stock and other
|
(109
|
)
|
|
|
|
|
|
(1,828
|
)
|
|
(1,828
|
)
|
||||||||||
Balance at September 30, 2008
|
42,058
|
|
108,599
|
|
237,001
|
|
|
(2,714
|
)
|
|
(65,564
|
)
|
450,746
|
|
728,068
|
|
||||||
Net income
|
|
|
|
|
|
|
|
27,242
|
|
27,242
|
|
|||||||||||
Other comprehensive (loss)
|
|
|
|
|
(7,338
|
)
|
|
|
|
(7,338
|
)
|
|||||||||||
Common stock issued under stock plans
|
636
|
|
787
|
|
10,532
|
|
|
|
|
9,096
|
|
|
20,415
|
|
||||||||
Tax benefits from stock plans
|
|
|
1,686
|
|
|
|
|
|
|
1,686
|
|
|||||||||||
Cash dividend declared
|
|
|
|
|
|
|
|
(52,217
|
)
|
(52,217
|
)
|
|||||||||||
Treasury stock and other
|
(1,108
|
)
|
|
|
|
|
|
(28,130
|
)
|
|
(28,130
|
)
|
||||||||||
Balance at September 30, 2009
|
41,586
|
|
109,386
|
|
249,219
|
|
|
(10,052
|
)
|
|
(84,598
|
)
|
425,771
|
|
689,726
|
|
||||||
Net income
|
|
|
|
|
|
|
|
117,457
|
|
117,457
|
|
|||||||||||
Other comprehensive (loss)
|
|
|
|
|
(1,955
|
)
|
|
|
|
(1,955
|
)
|
|||||||||||
Common stock issued under stock plans
|
289
|
|
327
|
|
1,602
|
|
|
|
|
5,743
|
|
|
7,672
|
|
||||||||
Tax benefits from stock plans
|
|
|
326
|
|
|
|
|
|
|
326
|
|
|||||||||||
Cash dividend declared
|
|
|
|
|
|
|
|
(56,213
|
)
|
(56,213
|
)
|
|||||||||||
Treasury stock and other
|
(701
|
)
|
|
|
|
|
|
(31,530
|
)
|
|
(31,530
|
)
|
||||||||||
Balance at September 30, 2010
|
41,174
|
|
$
|
109,713
|
|
$
|
251,147
|
|
|
$
|
(12,007
|
)
|
|
$
|
(110,385
|
)
|
$
|
487,015
|
|
$
|
725,483
|
|
(Thousands)
|
|
|
|
||||||
Year ended September 30,
|
2010
|
2009
|
2008
|
||||||
Net income
|
$
|
117,457
|
|
$
|
27,242
|
|
$
|
109,168
|
|
Unrealized (loss) gain on available for sale securities, net of tax of $(1,066), $37 and $(82), respectively
(1)
|
1,544
|
|
(52
|
)
|
118
|
|
|||
Net unrealized (loss) on derivatives, net of tax of $69, $74 and $81, respectively
|
(97
|
)
|
(105
|
)
|
(122
|
)
|
|||
Adjustment to postemployment benefit obligation, net of tax of $1,464, $4,856 and $1,213, respectively
|
(3,402
|
)
|
(7,181
|
)
|
(1,779
|
)
|
|||
Other comprehensive (loss)
|
(1,955
|
)
|
(7,338
|
)
|
(1,783
|
)
|
|||
Comprehensive income
|
$
|
115,502
|
|
$
|
19,904
|
|
$
|
107,385
|
|
(1)
|
Available for sale securities are included in Investments in equity investees in the Consolidated Balance Sheets.
|
1.
|
NATURE OF THE BUSINESS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
2010
|
2009
|
||||||||||
($ in thousands)
|
Gas in Storage
|
|
Bcf
|
Gas in Storage
|
|
Bcf
|
||||||
NJNG
|
|
$
|
181,098
|
|
24.7
|
|
|
$
|
175,201
|
|
21.9
|
|
NJRES
|
|
155,065
|
|
42.3
|
|
|
122,263
|
|
36.3
|
|
||
Total
|
|
$
|
336,163
|
|
67.0
|
|
|
$
|
297,464
|
|
58.2
|
|
(Millions)
|
2010
|
2009
|
2008
|
||||||
NJRES
|
$
|
105.1
|
|
$
|
114.2
|
|
$
|
115.9
|
|
NJNG
|
98.6
|
|
83.2
|
|
73.9
|
|
|||
Total
|
$
|
203.7
|
|
$
|
197.4
|
|
$
|
189.8
|
|
|
September 30,
|
|||||||||||
($ in thousands)
|
2010
|
2009
|
2008
|
|||||||||
AFUDC:
|
|
|
|
|
|
|
||||||
Debt
|
$
|
978
|
|
|
$
|
748
|
|
|
$
|
1,129
|
|
|
Equity
|
2,165
|
|
|
568
|
|
|
—
|
|
|
|||
Weighted average rate
|
7.39
|
|
%
|
4.33
|
|
%
|
4.80
|
|
%
|
|||
|
|
|
|
|
|
|
||||||
Real estate properties and other:
|
|
|
|
|
|
|
||||||
Capitalized interest
|
—
|
|
|
—
|
|
|
$
|
79
|
|
|
||
Weighted average interest rate
|
—
|
|
%
|
—
|
|
%
|
3.70
|
|
%
|
|||
|
|
|
|
|
|
|
||||||
Investments in equity investees:
|
|
|
|
|
|
|
||||||
Capitalized interest
|
—
|
|
|
$
|
1,909
|
|
|
$
|
3,355
|
|
|
|
Weighted average interest rate
|
—
|
|
%
|
5.27
|
|
%
|
5.70
|
|
%
|
|||
|
|
|
|
|
|
|
||||||
Total capitalized costs
|
$
|
3,143
|
|
|
$
|
3,225
|
|
|
$
|
4,563
|
|
|
Net weighted average rate
|
7.39
|
|
%
|
4.80
|
|
%
|
4.73
|
|
%
|
|
September 30,
|
||||||||
(Millions)
|
2010
|
2009
|
2008
|
||||||
Sales Tax
|
$
|
41.6
|
|
$
|
58.7
|
|
$
|
51.0
|
|
TEFA
|
8.3
|
|
8.9
|
|
8.4
|
|
|||
Total
|
$
|
49.9
|
|
$
|
67.6
|
|
$
|
59.4
|
|
(Thousands)
|
2010
|
2009
|
||||
Unrealized gain on available for sale securities
|
$
|
4,492
|
|
$
|
2,948
|
|
Net unrealized gain on derivatives
|
27
|
|
124
|
|
||
Postemployment benefit obligation adjustment
|
(16,526
|
)
|
(13,124
|
)
|
||
Total
|
$
|
(12,007
|
)
|
$
|
(10,052
|
)
|
($ in thousands)
|
2010
|
|
2009
|
||||||||
NJNG
(1)
|
$
|
17,983
|
|
11
|
%
|
|
$
|
21,398
|
|
21
|
%
|
NJRES
|
136,064
|
|
83
|
|
|
73,451
|
|
72
|
|
||
NJRHS and other
|
8,914
|
|
6
|
|
|
7,096
|
|
7
|
|
||
Total
|
$
|
162,961
|
|
100
|
%
|
|
$
|
101,945
|
|
100
|
%
|
(1)
|
Does not include unbilled revenues of
$7.4 million
and
$8.6 million
as of
September 30, 2010
and
2009
, respectively.
|
•
|
October 2008 - The BPU provisionally approved, effective October 3, 2008, NJNG's CIP petition filed in May 2008 requesting an additional $6.8 million and modification to its CIP recovery rates. The additional amount brought the total recovery requested to $22.4 million and included amounts accrued and estimated through
September 30, 2008
.
|
•
|
April 2009 - NJNG submitted a proposal to extend its CIP mechanism, as currently structured, until October 1, 2010. The extension was requested due to the continuing nature of energy efficiency programs at the state and federal levels in concert with the issuance of the economic stimulus programs. As a result of no action taken by the BPU as of September 30, 2009, the CIP remained in effect for an additional year or until a final order was issued by the BPU.
|
•
|
June 2009 - The BPU issued their final order approving NJNG's recovery of $6.8 million of CIP rates for fiscal 2008. In addition, NJNG filed its annual BGSS and CIP filing (2010 BGSS/CIP filing) for recoverable CIP amounts for fiscal 2009, requesting approval to modify its CIP recovery rates effective October 1, 2009, resulting in total annual recovery requested for fiscal 2009 of $6.9 million, representing amounts accrued and estimated through
September 30, 2009
. NJNG also included a request to reduce the WNC rate to facilitate recovery of its remaining balance in fiscal
2010
. The rates included in the filing were provisionally approved on September 16, 2009.
|
•
|
December 2009 - NJNG submitted a petition requesting approval from the BPU for an extension of its CIP mechanism, as currently structured, through September 30, 2013. On January 20, 2010, the BPU approved an extension to NJNG's CIP through September 30, 2013.
|
•
|
June 2010 - The BPU issued their final order approving NJNG's recovery of $6.9 million of CIP rates for fiscal
2009
. In addition, NJNG filed its annual BGSS and CIP filing (2011 BGSS/CIP/WNC filing) for recoverable CIP amounts for fiscal
2010
, requesting approval to modify its CIP recovery rates effective October 1, 2010, resulting in total annual recovery requested for fiscal
2010
of $12.1 million, an increase of $5.2 million. The request represents recovery of amounts accrued and estimated through
September 30, 2010
. The request results in an increase of 0.7 percent for the average residential heating customer, which is offset by a BGSS decrease of 3.5 percent as discussed below. NJNG also included a request to maintain the current Weather Normalization Clause (WNC) rate through December 31, 2010, and transfer any remaining WNC balance to the BGSS balance.
|
•
|
September 2010 - The BPU approved, on a provisional basis, a 3.5 percent decrease for the average residential heating customer related to the BGSS rate effective September 16, 2010, an increase to the Company's
pre-tax
balancing charge, effective October 1, 2010, a 0.7 percent increase related to the CIP rates effective October 1, 2010, the continuation of the current WNC rate through December 31, 2010, and the transfer of any remaining WNC balance to the BGSS balance.
|
•
|
December 2008 - NJNG provided notice that it would implement a $30 million BGSS-related rate credit that would lower residential and small commercial sales customers' bills in January and February 2009. This rate credit was due primarily to a decline in wholesale commodity costs subsequent to the October 2008 BGSS price change. On February 20, 2009, NJNG provided notice to the BPU that its BGSS-related rate credit would be extended through March 31, 2009, to reduce BGSS charges by an additional $15 million.
|
•
|
June 2009 - NJNG proposed a decrease of 17.6 percent for the average residential heating customer in its
2010
BGSS/CIP filing of which 15.7 percent was due to the reduction in commodity costs based on the continuing decline in the wholesale natural gas market. The balance of the rate change is related to changes to the CIP rate, as previously discussed, and a minor reduction to the rate related to collecting the remaining balance under the WNC. In September 2009, the BPU approved on a provisional basis a stipulation in that case which included a decrease of approximately 19 percent to the average residential heating customer of which 17.2 percent is due to the reduction to the BGSS price and the balance of rate change was related to the CIP and WNC rates as previously discussed.
|
•
|
October 2009 - NJNG provided refunds of approximately $37.4 million to residential and small commercial customers due to the decline in the wholesale price of natural gas.
|
•
|
January 2010 - NJNG notified the BPU that bill credits would be provided to residential and small commercial customers, based on individual customer usage, in February 2010 and March 2010. NJNG provided credits of approximately $35.3 million.
|
•
|
March 2010 - NJNG notified the BPU that it would extend the BGSS bill credit for residential and small commercial customers through April 30, 2010. NJNG provided credits of approximately $15.2 million.
|
•
|
May 2010 - NJNG provided refunds of approximately $22.5 million to residential and small commercial customers due to the decline in the wholesale price of natural gas.
|
•
|
June 2010 - The BPU approved the June 2009 provisional BGSS rate reduction of 17.2 percent on a final basis. In addition, NJNG filed its annual BGSS and CIP filing (2011 BGSS/CIP/WNC filing) requesting a decrease of 2.8 percent for the average residential heating customer of which 3.5 percent was due to the reduction in commodity costs. The balance of the rate change of 0.7 percent is related to changes to the CIP rate, as previously discussed.
|
•
|
September 2010 -
The BPU approved, on a provisional basis, a 3.5 percent decrease
for the average residential heating customer related
to the BGSS rate effective September 16, 2010, an increase to the Company's pre-tax balancing charge, effective October 1, 2010, a 0.7 percent increase related to the CIP rates effective October 1, 2010, the continuation of the current WNC rate through December 31, 2010
, and the transfer of any remaining WNC balance to the BGSS balance
.
|
•
|
October 2008 - The BPU released a final Order in the NJCEP, updating state utilities' funding obligations for the period from January 1, 2009, to December 31, 2012. As a result, NJNG recorded an obligation and a corresponding regulatory asset at a present value of $44.3 million in the Consolidated Balance Sheets. As of
September 30, 2010
, NJNG had a
$30.9 million
obligation remaining.
|
•
|
January 2009 - NJNG filed an application (January 2009 SBC filing) regarding its SBC to increase its MGP factor and its NJCEP factor while maintaining its effective rate on USF. This filing, if approved, will result in an overall increase of approximately 0.48 percent per month for an average residential bill.
|
•
|
June 2009 - Natural gas utilities in the State of New Jersey collectively filed with the BPU to decrease the statewide USF rate, which was approved by the BPU on a provisional basis, effective October 12, 2009. The USF change decreased the average monthly bill of a residential heating customer by 0.6 percent.
|
•
|
March 2010 - NJNG, BPU Staff and Rate Counsel executed a Settlement for the January 2009 SBC filing to allow for an increase in the MGP and NJCEP factors, while maintaining the current statewide USF factor. The new MGP factor recovers MGP incurred costs through
September 30, 2008
, resulting in an expected total annual recovery of approximately $20 million. The Stipulation was approved by the BPU in a Final Decision and Order on April 28, 2010.
|
•
|
June 2010 - NJNG filed an application (June 2010 SBC filing) regarding its SBC to maintain the current MGP factor approved in April 2010 and to maintain the current NJCEP. In addition, natural gas utilities in the State of New Jersey collectively filed with the BPU to increase the statewide USF rate to be effective October 1, 2010. If approved, the USF change would result in an overall increase to the average monthly bill of a residential heating customer by 0.03 percent.
|
•
|
October 2010 - The BPU approved NJNG's USF rate, effective November 1, 2010. The BPU Order approves the recovery of the USF program year budget and the recovery of deferred USF administrative costs.
|
(Thousands)
|
2010
|
2009
|
Recovery
|
|||||||
Regulatory assets-current
|
|
|
|
|
||||||
Underrecovered gas costs
|
$
|
36,485
|
|
$
|
—
|
|
(1
|
)
|
|
|
CIP
|
14,960
|
|
5,800
|
|
(1
|
)
|
|
|||
WNC
|
21
|
|
78
|
|
(2
|
)
|
|
|||
Total current
|
$
|
51,466
|
|
$
|
5,878
|
|
|
|
||
Regulatory assets-noncurrent
|
|
|
|
|
||||||
Remediation costs (Note 14)
|
|
|
|
|
||||||
Expended, net of recoveries
|
$
|
75,707
|
|
$
|
85,461
|
|
(3
|
)
|
|
|
Liability for future expenditures
|
201,600
|
|
146,700
|
|
(4
|
)
|
|
|||
Deferred income and other taxes
|
13,860
|
|
11,560
|
|
(1
|
)
|
|
|||
Derivatives, net (Note 4)
|
16,497
|
|
8,073
|
|
(5
|
)
|
|
|||
Energy Efficiency Program
|
3,958
|
|
1,174
|
|
(6
|
)
|
|
|||
New Jersey Clean Energy Program
|
30,935
|
|
39,369
|
|
(6
|
)
|
|
|||
Pipeline Integrity Management
|
1,148
|
|
448
|
|
(7
|
)
|
|
|||
Postemployment benefit costs (Note 11)
|
106,225
|
|
94,305
|
|
(8
|
)
|
|
|||
Other regulatory assets
|
4,671
|
|
3,935
|
|
(6
|
)
|
|
|||
Total noncurrent
|
$
|
454,601
|
|
$
|
391,025
|
|
|
|
(1)
|
Recoverable, subject to BPU approval, without interest.
|
(2)
|
Recoverable as a result of BPU approval in October 2010, without interest. This balance reflects the net results from winter period of fiscal 2006. No new WNC activity is being recorded since October 1, 2006 due to the existence of the CIP.
|
(3)
|
Recoverable, subject to BPU approval over rolling 7-year periods, with interest.
|
(4)
|
Estimated future expenditures. Recovery will be requested when actual expenditures are incurred (see
Note 14. Commitments and Contingent Liabilities).
|
(5)
|
Recoverable, subject to BPU approval, through BGSS, without interest.
|
(6)
|
Recoverable with interest, subject to BPU approval.
|
(7)
|
Recoverable, subject to BPU review and approval in the next base rate case. NJNG is limited to recording a regulatory asset that does not exceed $700,000 per year. In addition, to the extent that project costs are lower than the approved PIM annual expense of $1.4 million, NJNG will record a regulatory liability that will be refundable as a credit to customer's gas costs when the net cumulative liability exceeds $1 million.
|
(8)
|
Recoverable, subject to BPU approval, without interest. Includes unrecognized service costs recorded, that NJNG has determined are recoverable in rates charged to customers (see
Note 11. Employee
Benefit Plans
). Amount as of
September 30, 2010
, includes approximately $4.0 million related to changes in the tax treatment for Medicare Subsidy D expenses as a result of the Patient Protection and Affordable Care Act enacted in March 2010.
|
(Thousands)
|
2010
|
2009
|
||||
Regulatory liability-current
|
|
|
||||
Overrecovered gas costs
(1)
|
$
|
—
|
|
$
|
36,203
|
|
Total current
|
$
|
—
|
|
$
|
36,203
|
|
Regulatory liabilities-noncurrent
|
|
|
||||
Cost of removal obligation
(2)
|
$
|
57,648
|
|
$
|
56,450
|
|
Total noncurrent
|
$
|
57,648
|
|
$
|
56,450
|
|
(1)
|
Refundable, subject to BPU approval, through BGSS with interest.
|
(2)
|
NJNG accrues and collects for cost of removal in rates. This liability represents collections in excess of actual expenditures. Approximately $24.1 million, including accretion of $1.6 million for the fiscal year ended
September 30, 2010
, of regulatory assets relating to asset retirement obligations have been netted against the cost of removal obligation as of
September 30, 2010
(see
Note 12. Asset Retirement Obligations).
|
|
|
|
Fair Value
|
||||||||||||||
|
|
|
2010
|
|
2009
|
||||||||||||
(Thousands)
|
Balance Sheet Location
|
Asset
Derivatives
|
Liability
Derivatives
|
Asset
Derivatives
|
Liability
Derivatives
|
||||||||||||
NJNG:
|
|
|
|
|
|
|
|
|
|
||||||||
Financial commodity contracts
|
Derivatives - current
|
|
$
|
9,952
|
|
|
$
|
24,724
|
|
|
$
|
15,801
|
|
|
$
|
24,274
|
|
|
Derivatives - noncurrent
|
|
—
|
|
|
1,725
|
|
|
1,077
|
|
|
677
|
|
||||
NJRES:
|
|
|
|
|
|
|
|
|
|
||||||||
Physical forward commodity contracts
|
Derivatives - current
|
|
18,566
|
|
|
5,879
|
|
|
22,674
|
|
|
10,044
|
|
||||
|
Derivatives - noncurrent
|
|
5,482
|
|
|
179
|
|
|
3,878
|
|
|
214
|
|
||||
Financial commodity contracts
|
Derivatives - current
|
|
106,653
|
|
|
47,844
|
|
|
89,140
|
|
|
60,054
|
|
||||
|
Derivatives - noncurrent
|
|
2,465
|
|
|
3,736
|
|
|
4,157
|
|
|
5,316
|
|
||||
NJR Energy:
|
|
|
|
|
|
|
|
|
|
||||||||
Financial commodity contracts
|
Derivatives - current
|
|
—
|
|
|
—
|
|
|
3,455
|
|
|
481
|
|
||||
|
Derivatives - noncurrent
|
|
—
|
|
|
—
|
|
|
424
|
|
|
43
|
|
||||
Total fair value of derivatives
|
|
|
$
|
143,118
|
|
|
$
|
84,087
|
|
|
$
|
140,606
|
|
|
$
|
101,103
|
|
|
|
Fair Value
|
|||||||||||||||||||
|
|
|
2010
|
|
|
2009
|
|
||||||||||||||
(Thousands)
|
Balance Sheet Location
|
Asset
Derivatives
|
Liability
Derivatives
|
Asset
Derivatives
|
Liability
Derivatives
|
||||||||||||||||
NJRES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Derivatives - current
|
|
$
|
15
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Derivatives - noncurrent
|
|
10
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
||||
Total fair value of derivatives
|
|
|
$
|
25
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
(Thousands)
|
Amount of Gain (Loss) in OCI (effective portions)
|
Amount of Gain (Loss) reclassifed from OCI into income (Gas Purchases)
|
Gain (Loss) recognized in income on Derivative (ineffective portion)
|
||||||||||||||||||||||||
|
|
2010
|
|
2009
|
|
|
2010
|
|
2009
|
|
|
2010
|
|
2009
|
|
||||||||||||
Foreign exchange contracts
|
|
$
|
25
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total
|
|
$
|
25
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(Thousands)
|
Location of Gain (Loss) recognized in income on Derivative
|
Amount of Gain (Loss) recognized
in income on Derivative
(1)
|
||||||||
Derivatives not designated as hedging instruments under ASC 815:
|
|
2010
|
|
2009
|
|
|||||
NJRES:
|
|
|
|
|
|
|
||||
Physical commodity contracts
|
Operating revenues
|
|
$
|
40,392
|
|
|
$
|
8,762
|
|
|
Physical commodity contracts
|
Gas purchases
|
|
(3,608
|
)
|
|
20,907
|
|
|
||
Financial commodity contracts
|
Gas purchases
|
|
89,987
|
|
|
33,529
|
|
|
||
Subtotal NJRES
|
|
|
126,771
|
|
|
63,198
|
|
|
||
NJR Energy:
|
|
|
|
|
|
|
||||
Financial commodity contracts
|
Operating revenues
|
|
(509
|
)
|
|
(9,899
|
)
|
|
||
Total NJRES and NJR Energy unrealized and realized gains
|
|
$
|
126,262
|
|
|
$
|
53,299
|
|
|
(1)
|
Since the provisions of ASC 815-10-50 did not become effective for NJR until January 1, 2009, amounts for
September 30, 2009
only include gains and losses for the January 1, 2009 through
September 30, 2009
period, therefore, fiscal
2009
is not comparative to fiscal
2010
.
|
(Thousands)
|
Balance Sheet Location
|
2010
|
2009
|
||||
NJNG broker margin deposit
|
Broker margin - Current assets
|
$
|
19,241
|
|
$
|
16,458
|
|
NJRES broker margin deposit
|
Broker margin - Current (liabilities) assets
|
$
|
(28,459
|
)
|
$
|
9,792
|
|
(Thousands)
|
Gross Credit
Exposure
|
||||
Investment grade
|
|
$
|
128,238
|
|
|
Noninvestment grade
|
|
9,156
|
|
|
|
Internally rated investment grade
|
|
36,965
|
|
|
|
Internally rated noninvestment grade
|
|
11,380
|
|
|
|
Total
|
|
$
|
185,739
|
|
|
|
September 30,
|
|||||
(Thousands)
|
2010
|
2009
|
||||
Carrying value
|
$
|
460,200
|
|
$
|
462,000
|
|
Fair market value
|
$
|
495,000
|
|
$
|
477,900
|
|
Level 1
|
Unadjusted quoted prices for identical assets or liabilities in active markets; NJR's Level 1 assets and liabilities include exchange traded financial derivative contracts, listed equities, and money market funds.
|
Level 2
|
Price data, which includes both commodity and basis price data other than Level 1 quotes, 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 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. These additional adjustments are 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 September 30, 2010:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical forward commodity contracts
|
|
$
|
—
|
|
|
|
$
|
24,048
|
|
|
|
$
|
—
|
|
|
$
|
24,048
|
|
Financial derivative contracts - natural gas
|
|
58,824
|
|
|
|
60,246
|
|
|
|
—
|
|
|
119,070
|
|
||||
Financial commodity contracts - foreign exchange
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
|
25
|
|
||||
Available for sale equity securities - Energy industry
(1)
|
|
10,290
|
|
|
|
—
|
|
|
|
—
|
|
|
10,290
|
|
||||
Other assets
|
|
947
|
|
|
|
—
|
|
|
|
—
|
|
|
947
|
|
||||
Total assets at fair value
|
|
$
|
70,061
|
|
|
|
$
|
84,319
|
|
|
|
$
|
—
|
|
|
$
|
154,380
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical forward commodity contracts
|
|
$
|
—
|
|
|
|
$
|
6,058
|
|
|
|
$
|
—
|
|
|
$
|
6,058
|
|
Financial commodity contracts - natural gas
|
|
38,497
|
|
|
|
39,532
|
|
|
|
—
|
|
|
78,029
|
|
||||
Financial commodity contracts - foreign exchange
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Other liabilities
|
|
936
|
|
|
|
—
|
|
|
|
—
|
|
|
936
|
|
||||
Total liabilities at fair value
|
|
$
|
39,433
|
|
|
|
$
|
45,590
|
|
|
|
$
|
—
|
|
|
$
|
85,023
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of September 30, 2009
:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical forward commodity contracts
|
|
$
|
—
|
|
|
|
$
|
26,552
|
|
|
|
$
|
—
|
|
|
$
|
26,552
|
|
Financial derivative contracts - natural gas
(2)
|
|
47,065
|
|
|
|
66,989
|
|
|
|
—
|
|
|
114,054
|
|
||||
Available for sale equity securities - Energy industry
(1)
|
|
7,872
|
|
|
|
—
|
|
|
|
—
|
|
|
7,872
|
|
||||
Other assets
|
|
1,467
|
|
|
|
—
|
|
|
|
—
|
|
|
1,467
|
|
||||
Total assets at fair value
|
|
$
|
56,404
|
|
|
|
$
|
93,541
|
|
|
|
$
|
—
|
|
|
$
|
149,945
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Physical forward commodity contracts
|
|
$
|
—
|
|
|
|
$
|
10,258
|
|
|
|
$
|
—
|
|
|
$
|
10,258
|
|
Financial derivative contracts - natural gas
(2)
|
|
40,313
|
|
|
|
50,532
|
|
|
|
—
|
|
|
90,845
|
|
||||
Other liabilities
|
|
1,467
|
|
|
|
—
|
|
|
|
—
|
|
|
1,467
|
|
||||
Total liabilities at fair value
|
|
$
|
41,780
|
|
|
|
$
|
60,790
|
|
|
|
$
|
—
|
|
|
$
|
102,570
|
|
(1)
|
Included in Investments in equity investees in the Unaudited Condensed Consolidated Balance Sheets.
|
(2)
|
Subsequent to the issuance of our 2009 Form 10-K we determined that the fair value table as of
September 30, 2009
, improperly classified certain exchange cleared financial instruments as Level 1 financial derivative contracts assets and liabilities. Accordingly, we have corrected the classification of such amounts previously reported in our 2009 Form 10-K as of
September 30, 2009
by decreasing Level 1 financial derivative contracts-assets $34.2 million with a corresponding increase in Level 2, and decreasing Level 1 financial derivative contracts-liabilities $28.1 million with a corresponding increase in Level 2. These changes in the disclosed classification of the basis of valuation had no effect on the reported fair values of the related assets and liabilities.
|
|
Fair Value Measurements Using
|
||||
|
Significant Unobservable Inputs
|
||||
(Thousands)
|
(Level 3)
|
||||
Beginning balance
|
|
$
|
937
|
|
|
Total gains realized and unrealized
(1)
|
|
320
|
|
|
|
Purchases, sales, issuances and settlements, net
|
|
(774
|
)
|
|
|
Net transfers in and/or (out) of Level 3
|
|
(483
|
)
|
|
|
Ending balance
|
|
$
|
—
|
|
|
|
|
|
|
||
Net unrealized gains included in net loss relating to derivatives still held at September 30, 2009
|
$
|
—
|
|
|
(1)
|
Gains recognized in operating revenues and gas purchases for fiscal 2009 are $77,000 and $243,000 respectively.
|
(Thousands)
|
2010
|
2009
|
||||
Steckman Ridge
|
$
|
134,359
|
|
$
|
131,555
|
|
Iroquois
|
24,585
|
|
21,081
|
|
||
Other
|
10,290
|
|
7,872
|
|
||
Total
|
$
|
169,234
|
|
$
|
160,508
|
|
(Thousands, except per share amounts)
|
2010
|
2009
|
2008
|
||||||
Net Income, as reported
|
$
|
117,457
|
|
$
|
27,242
|
|
$
|
109,168
|
|
Basic earnings per share
|
|
|
|
||||||
Weighted average shares of common stock outstanding-basic
|
41,364
|
|
42,119
|
|
41,878
|
|
|||
Basic earnings per common share
|
$2.84
|
$0.65
|
|
$2.61
|
|
||||
Diluted earnings per share
|
|
|
|
||||||
Weighted average shares of common stock outstanding-basic
|
41,364
|
|
42,119
|
|
41,878
|
|
|||
Incremental shares
(1)
|
266
|
|
346
|
|
298
|
|
|||
Weighted average shares of common stock outstanding-diluted
|
41,630
|
|
42,465
|
|
42,176
|
|
|||
Diluted earnings per common share
(2)
|
$2.82
|
$0.64
|
|
$2.59
|
|
(1)
|
Incremental shares consist of stock options, stock awards and performance units.
|
(2)
|
There were no anti-dilutive shares excluded from the calculation of diluted earnings per share for fiscal
2010
, fiscal
2009
and fiscal
2008
.
|
(Thousands)
|
2010
|
2009
|
||||||
New Jersey Natural Gas
|
|
|
|
|||||
First mortgage bonds:
|
Maturity date:
|
|
|
|||||
Variable
|
Series AA
|
August 1, 2030
|
$
|
25,000
|
|
$
|
25,000
|
|
Variable
|
Series BB
|
August 1, 2030
|
16,000
|
|
16,000
|
|
||
6.88%
|
Series CC
|
October 1, 2010
|
20,000
|
|
20,000
|
|
||
Variable
|
Series DD
|
September 1, 2027
|
13,500
|
|
13,500
|
|
||
Variable
|
Series EE
|
January 1, 2028
|
9,545
|
|
9,545
|
|
||
Variable
|
Series FF
|
January 1, 2028
|
15,000
|
|
15,000
|
|
||
Variable
|
Series GG
|
April 1, 2033
|
18,000
|
|
18,000
|
|
||
5.00%
|
Series HH
|
December 1, 2038
|
12,000
|
|
12,000
|
|
||
4.50%
|
Series II
|
August 1, 2023
|
10,300
|
|
10,300
|
|
||
4.60%
|
Series JJ
|
August 1, 2024
|
10,500
|
|
10,500
|
|
||
4.90%
|
Series KK
|
October 1, 2040
|
15,000
|
|
15,000
|
|
||
5.60%
|
Series LL
|
May 15, 2018
|
125,000
|
|
125,000
|
|
||
4.77% Unsecured senior notes
|
March 15, 2014
|
60,000
|
|
60,000
|
|
|||
Capital lease obligation-Buildings
|
June 1, 2021
|
24,611
|
|
25,620
|
|
|||
Capital lease obligation-Meters
|
Various dates
|
34,962
|
|
35,546
|
|
|||
Capital lease obligation-Equipment
|
December 1, 2013
|
764
|
|
991
|
|
|||
Less: Current maturities of long-term debt
|
(31,257
|
)
|
(6,510
|
)
|
||||
Total New Jersey Natural Gas long-term debt
|
378,925
|
|
405,492
|
|
||||
New Jersey Resources
|
|
|
|
|||||
6.05% Unsecured senior notes
|
September 24, 2017
|
50,000
|
|
50,000
|
|
|||
Total New Jersey Resources long-term debt
|
50,000
|
|
50,000
|
|
||||
Total Long-term debt
|
$
|
428,925
|
|
$
|
455,492
|
|
September 30,
|
Redemption
|
|||
2011
|
|
$
|
20.0
|
|
2012
|
|
$
|
—
|
|
2013
|
|
$
|
—
|
|
2014
|
|
$
|
60.0
|
|
2015
|
|
$
|
—
|
|
Thereafter
|
|
$
|
319.8
|
|
Fiscal Year Ended September 30,
|
Lease Payments
|
|||
2011
|
|
$
|
14.6
|
|
2012
|
|
8.6
|
|
|
2013
|
|
9
|
|
|
2014
|
|
8
|
|
|
2015
|
|
7.9
|
|
|
Thereafter
|
|
29.7
|
|
|
Subtotal
|
|
77.8
|
|
|
Less: interest component
|
|
(18.3
|
)
|
|
Total
|
|
$
|
59.5
|
|
|
September 30,
|
||||||
(Thousands)
|
2010
|
|
2009
|
||||
NJR
|
|
|
|
||||
Bank credit facilities
(1)
|
$
|
325,000
|
|
|
$
|
325,000
|
|
Amount outstanding at end of period
|
|
|
|
||||
Notes payable to banks
|
$
|
140,600
|
|
|
$
|
143,400
|
|
Weighted average interest rate at end of period
|
|
|
|
||||
Notes payable to banks
|
0.64
|
%
|
|
0.57
|
%
|
||
NJNG
|
|
|
|
||||
Bank credit facilities
(1)
|
$
|
200,000
|
|
|
$
|
250,000
|
|
Amount outstanding at end of period
|
|
|
|
||||
Commercial paper
|
$
|
7,000
|
|
|
$
|
—
|
|
Weighted average interest rate at end of period
|
|
|
|
||||
Commercial paper
|
0.26
|
%
|
|
—%
|
|
||
NJRES
|
|
|
|
||||
Bank credit facilities
(2)
|
$
|
—
|
|
|
$
|
30,000
|
|
Amount outstanding at end of period
|
|
|
|
||||
Notes payable to banks
|
$
|
—
|
|
|
$
|
—
|
|
Weighted average interest rate at end of period
|
|
|
|
||||
Notes payable to banks
|
—%
|
|
|
—%
|
|
(1)
|
Company is subject to commitment fees on outstanding and unused amounts.
|
(2)
|
Facility expired in October 2009 and was not renewed.
|
10.
|
STOCK BASED COMPENSATION
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Stock-based compensation expense:
|
|
|
|
||||||
Stock options
|
$
|
—
|
|
$
|
148
|
|
$
|
294
|
|
Performance shares
|
813
|
|
475
|
|
939
|
|
|||
Restricted stock
|
1,841
|
|
2,477
|
|
1,989
|
|
|||
Compensation expense included in Operation and Maintenance expense
|
2,654
|
|
3,100
|
|
3,222
|
|
|||
Income tax benefit
|
(1,084
|
)
|
(1,274
|
)
|
(1,324
|
)
|
|||
Total, net of tax
|
$
|
1,570
|
|
$
|
1,826
|
|
$
|
1,898
|
|
|
Shares
|
|
Weighted Average
Exercise Price
|
|||
Outstanding at September 30, 2007
|
700,309
|
|
|
$23.75
|
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
(121,166
|
)
|
|
$19.40
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Outstanding at September 30, 2008
|
579,143
|
|
|
$24.66
|
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
(245,107
|
)
|
|
$22.38
|
|
|
Forfeited
|
(575
|
)
|
|
$18.11
|
|
|
Outstanding at September 30, 2009
|
333,461
|
|
|
$26.36
|
|
|
Granted
|
—
|
|
|
—
|
|
|
Exercised
|
(68,307
|
)
|
|
$23.20
|
|
|
Forfeited
|
(2,026
|
)
|
|
$18.32
|
|
|
Outstanding at September 30, 2010
|
263,128
|
|
|
$27.24
|
|
|
Exercisable at September 30, 2010
|
263,128
|
|
|
$27.24
|
|
|
Exercisable at September 30, 2009
|
333,461
|
|
|
$26.36
|
|
|
Exercisable at September 30, 2008
|
506,130
|
|
|
$23.93
|
|
|
|
Outstanding and Exercisable
|
||||||||
Exercise Price Range
|
Number
Of Stock
Options
|
Weighted Average
Remaining
Contractual Term
(in years)
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
$18.11 - $21.00
|
71,065
|
|
1.8
|
$20.47
|
|
$
|
1,332
|
|
|
$21.01 - $27.00
|
10,500
|
|
3.0
|
$24.39
|
|
$
|
156
|
|
|
$27.01 - $29.00
|
29,438
|
|
4.7
|
$28.54
|
|
$
|
315
|
|
|
$29.01 - $30.37
|
152,125
|
|
4.7
|
$30.34
|
|
$
|
1,350
|
|
|
Total
|
263,128
|
|
3.9
|
$27.24
|
|
$
|
3,153
|
|
|
|
Shares
(1)
|
Weighted Average
Grant Date
Fair Value
|
||||
Non-vested and outstanding at September 30, 2007
|
15,638
|
|
|
$30.05
|
|
|
Granted
|
61,980
|
|
|
$31.84
|
|
|
Vested
|
(15,638
|
)
|
|
$30.05
|
|
|
Cancelled/forfeited
|
—
|
|
|
—
|
|
|
Non-vested and outstanding at September 30, 2008
|
61,980
|
|
|
$31.84
|
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Cancelled/forfeited
|
—
|
|
|
—
|
|
|
Non-vested and outstanding at September 30, 2009
|
61,980
|
|
|
$31.84
|
|
|
Granted
|
54,177
|
|
|
$30.05
|
|
|
Vested
(2)
|
(55,905
|
)
|
|
$31.84
|
|
|
Cancelled/forfeited
|
(9,777
|
)
|
|
$31.04
|
|
|
Non-vested and outstanding at September 30, 2010
|
50,475
|
|
|
$31.07
|
|
|
(1)
|
The number of common shares issued related to performance shares may range from zero to 150 percent of the number of shares shown in the table above based on the Company's achievement of performance goals associated with NJR total shareowner return relative to a selected peer group of companies.
|
(2)
|
The number of common shares related to performance shares earned as of
September 30, 2010
, was 135 percent, or 75,472 shares. The number represented on this line is the target number of 100 percent, see footnote
(1)
above.
|
|
Shares
|
|
Weighted Average
Grant Date
Fair Value
|
Total Fair Value of Vested Shares (in Thousands)
|
||||||||
Non-vested and outstanding at September 30, 2007
|
59,165
|
|
|
$
|
31.80
|
|
|
|
—
|
|
|
|
Granted
|
97,365
|
|
|
$
|
32.39
|
|
|
|
—
|
|
|
|
Vested
|
(53,729
|
)
|
|
$
|
(32.87
|
)
|
|
|
$
|
1,741
|
|
|
Cancelled/forfeited
|
—
|
|
|
—
|
|
|
|
—
|
|
|
||
Non-vested and outstanding at September 30, 2008
|
102,801
|
|
|
$
|
31.80
|
|
|
|
—
|
|
|
|
Granted
|
163,211
|
|
|
$
|
34.00
|
|
|
|
—
|
|
|
|
Vested
|
(154,215
|
)
|
|
$
|
(34.49
|
)
|
|
|
$
|
5,592
|
|
|
Cancelled/forfeited
|
—
|
|
|
—
|
|
|
|
—
|
|
|
||
Non-vested and outstanding at September 30, 2009
|
111,797
|
|
|
$
|
31.30
|
|
|
|
—
|
|
|
|
Granted
|
24,312
|
|
|
$
|
36.42
|
|
|
|
—
|
|
|
|
Vested
|
(74,888
|
)
|
|
$
|
(31.28
|
)
|
|
|
$
|
2,749
|
|
|
Cancelled/forfeited
|
(4,856
|
)
|
|
$
|
(33.00
|
)
|
|
|
—
|
|
|
|
Non-vested and outstanding at September 30, 2010
|
56,365
|
|
|
$
|
33.40
|
|
|
|
—
|
|
|
|
Pension
(1)
|
OPEB
|
||||||||||
(Thousands)
|
2010
|
2009
|
2010
|
2009
|
||||||||
Change in Benefit Obligation
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
133,839
|
|
$
|
102,383
|
|
$
|
78,292
|
|
$
|
53,452
|
|
Service cost
|
3,969
|
|
2,712
|
|
2,814
|
|
1,728
|
|
||||
Interest cost
|
8,196
|
|
7,748
|
|
4,819
|
|
4,057
|
|
||||
Plan participants' contributions
|
48
|
|
48
|
|
9
|
|
4
|
|
||||
Actuarial loss
|
14,439
|
|
26,070
|
|
5,333
|
|
21,107
|
|
||||
Benefits paid, net of retiree subsidies received
|
(5,302
|
)
|
(5,122
|
)
|
(1,988
|
)
|
(2,056
|
)
|
||||
Benefit obligation at end of year
|
$
|
155,189
|
|
$
|
133,839
|
|
$
|
89,279
|
|
$
|
78,292
|
|
Change in plan assets
|
|
|
|
|
|
|
||||||
Fair value of plan assets at beginning of year
|
$
|
100,639
|
|
$
|
80,618
|
|
$
|
22,195
|
|
$
|
22,711
|
|
Actual return on plan assets
|
12,864
|
|
(713
|
)
|
2,768
|
|
(148
|
)
|
||||
Employer contributions
|
14,616
|
|
25,808
|
|
4,784
|
|
1,868
|
|
||||
Benefits paid, net of plan participants' contributions
|
(5,254
|
)
|
(5,074
|
)
|
(2,103
|
)
|
(2,237
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
122,865
|
|
$
|
100,639
|
|
$
|
27,644
|
|
$
|
22,194
|
|
Funded status
|
$
|
(32,324
|
)
|
$
|
(33,200
|
)
|
$
|
(61,635
|
)
|
$
|
(56,098
|
)
|
Amounts recognized on Consolidated Balance Sheets
|
|
|
|
|
||||||||
Postemployment employee benefit liability
|
|
|
|
|
||||||||
Current
|
$
|
(119
|
)
|
$
|
(145
|
)
|
$
|
(97
|
)
|
$
|
(118
|
)
|
Non-current
|
(32,205
|
)
|
(33,055
|
)
|
(61,538
|
)
|
(55,980
|
)
|
||||
Total
|
$
|
(32,324
|
)
|
$
|
(33,200
|
)
|
$
|
(61,635
|
)
|
$
|
(56,098
|
)
|
(1)
|
Includes NJR's Pension Equalization Plan.
|
|
Regulatory Assets
|
|
|
Accumulated Other Comprehensive Income
|
|||||||||||
|
Pension
|
OPEB
|
|
|
Pension
|
OPEB
|
|||||||||
Balance at September 30, 2008
|
$
|
30,827
|
|
$
|
20,505
|
|
|
|
$
|
5,753
|
|
$
|
4,007
|
|
|
Amounts arising during the period:
|
|
|
|
|
|
|
|||||||||
Net actuarial loss (gain)
|
26,832
|
|
18,516
|
|
|
|
8,704
|
|
4,735
|
|
|||||
Amounts amortized to net periodic costs:
|
|
|
|
|
|
|
|||||||||
Net actuarial (loss)
|
(480
|
)
|
(883
|
)
|
|
|
(74
|
)
|
(184
|
)
|
|||||
Prior service cost
|
(39
|
)
|
(68
|
)
|
|
|
(17
|
)
|
(10
|
)
|
|||||
Net Transition Obligation
|
—
|
|
(286
|
)
|
|
|
—
|
|
(71
|
)
|
|||||
Balance at September 30, 2009
|
$
|
57,140
|
|
$
|
37,784
|
|
(1
|
)
|
|
$
|
14,366
|
|
$
|
8,477
|
|
Amounts arising during the period:
|
|
|
|
|
|
|
|||||||||
Net actuarial loss (gain)
|
7,669
|
|
3,162
|
|
|
|
4,212
|
|
1,342
|
|
|||||
Amounts amortized to net periodic costs:
|
|
|
|
|
|
|
|||||||||
Net actuarial (loss)
|
(2,205
|
)
|
(1,842
|
)
|
|
|
(517
|
)
|
(437
|
)
|
|||||
Prior Service Cost
|
(39
|
)
|
(68
|
)
|
|
|
(16
|
)
|
(7
|
)
|
|||||
Net Transition Obligation
|
—
|
|
(286
|
)
|
|
|
|
(70
|
)
|
||||||
Balance at September 30, 2010
|
$
|
62,565
|
|
$
|
38,750
|
|
(1
|
)
|
|
$
|
18,045
|
|
$
|
9,305
|
|
(1)
|
Balance represents amounts recognized in accordance with ASC 715 and excludes $900,000 and $1.2 million associated with a regulatory asset approved by the BPU for fiscal 2010 and 2009, respectively.
|
|
Regulatory Assets
|
|
Accumulated Other Comprehensive Income
|
||||||||||
(Thousands)
|
Pension
|
OPEB
|
|
Pension
|
OPEB
|
||||||||
Net actuarial gain (loss)
|
$
|
3,087
|
|
$
|
2,063
|
|
|
$
|
859
|
|
$
|
548
|
|
Prior service (cost) credit
|
35
|
|
68
|
|
|
13
|
|
7
|
|
||||
Net Transition Obligation
|
—
|
|
286
|
|
|
—
|
|
70
|
|
||||
Total
|
$
|
3,122
|
|
$
|
2,417
|
|
|
$
|
872
|
|
$
|
625
|
|
|
Pension
|
|||||
(Thousands)
|
2010
|
2009
|
||||
Projected benefit obligation
|
$
|
155,189
|
|
$
|
133,839
|
|
Accumulated benefit obligation
|
$
|
137,130
|
|
$
|
115,883
|
|
Fair value of plan assets
|
$
|
122,865
|
|
$
|
100,639
|
|
|
|
Pension
|
|
|
OPEB
|
|
||||||||||||
(Thousands)
|
2010
|
2009
|
2008
|
2010
|
2009
|
2008
|
||||||||||||
Service cost
|
$
|
3,969
|
|
$
|
2,712
|
|
$
|
2,913
|
|
$
|
2,814
|
|
$
|
1,728
|
|
$
|
1,795
|
|
Interest cost
|
8,196
|
|
7,748
|
|
6,594
|
|
4,819
|
|
4,057
|
|
3,252
|
|
||||||
Expected return on plan assets
|
(10,306
|
)
|
(8,753
|
)
|
(8,731
|
)
|
(1,939
|
)
|
(1,996
|
)
|
(2,465
|
)
|
||||||
Recognized actuarial loss
|
2,722
|
|
554
|
|
1,101
|
|
2,279
|
|
1,067
|
|
804
|
|
||||||
Prior service cost amortization
|
56
|
|
56
|
|
56
|
|
76
|
|
78
|
|
78
|
|
||||||
Recognized net initial obligation
|
—
|
|
—
|
|
—
|
|
356
|
|
357
|
|
357
|
|
||||||
Net periodic cost
|
$
|
4,637
|
|
$
|
2,317
|
|
$
|
1,933
|
|
$
|
8,405
|
|
$
|
5,291
|
|
$
|
3,821
|
|
($ in thousands)
|
2010
|
|
|
2009
|
|
|
2008
|
|
|||
HCCTR
|
8.0
|
%
|
|
8.0
|
%
|
|
9.0
|
%
|
|||
Ultimate HCCTR
|
5.0
|
%
|
|
5.0
|
%
|
|
5.0
|
%
|
|||
Year ultimate HCCTR reached
|
2,018
|
|
|
2,018
|
|
|
2,013
|
|
|||
|
|
|
|
|
|
||||||
Effect of a 1 percentage point increase in the HCCTR on:
|
|
|
|
|
|
||||||
Year-end benefit obligation
|
$
|
15,474
|
|
|
$
|
13,181
|
|
|
$
|
8,052
|
|
Total service and interest cost
|
$
|
1,571
|
|
|
$
|
1,083
|
|
|
$
|
973
|
|
Effect of a 1 percentage point decrease in the HCCTR on:
|
|
|
|
|
|
||||||
Year-end benefit obligation
|
$
|
(12,421
|
)
|
|
$
|
(10,617
|
)
|
|
$
|
(6,571
|
)
|
Total service and interest costs
|
$
|
(1,234
|
)
|
|
$
|
(859
|
)
|
|
$
|
(771
|
)
|
|
2011
|
Assets at
|
|||||||
|
Target
|
September 30,
|
|||||||
Asset Allocation
|
Allocation
|
2010
|
|
(1
|
)
|
2009
|
|
||
U.S. equity securities
|
39
|
%
|
|
39
|
%
|
|
52
|
%
|
|
International equity securities
|
20
|
|
|
21
|
|
|
18
|
|
|
Fixed income
|
41
|
|
|
40
|
|
|
30
|
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(1)
|
The allocation of assets excludes a contribution of $10.1 million made on September 30, 2010, that was not yet invested in accordance with the Plan's investment policy
.
|
(Thousands)
|
Pension
|
OPEB
|
||||
2011
|
$
|
5,812
|
|
$
|
2,567
|
|
2012
|
$
|
6,147
|
|
$
|
2,791
|
|
2013
|
$
|
6,433
|
|
$
|
3,022
|
|
2014
|
$
|
6,796
|
|
$
|
3,364
|
|
2015
|
$
|
7,120
|
|
$
|
3,647
|
|
2016-2020
|
$
|
43,626
|
|
$
|
24,793
|
|
|
Estimated Subsidy Payment
|
||||
Fiscal Year
|
(Thousands)
|
||||
2011
|
|
$
|
174
|
|
|
2012
|
|
$
|
197
|
|
|
2013
|
|
$
|
217
|
|
|
2014
|
|
$
|
234
|
|
|
2015
|
|
$
|
255
|
|
|
2016-2020
|
|
$
|
1,620
|
|
|
|
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 September 30, 2010:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
10,100
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
10,100
|
|
Registered Investment Companies-
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity Funds:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Large Cap Fund
|
|
18,641
|
|
|
|
—
|
|
|
|
—
|
|
|
18,641
|
|
||||
Large Cap Index Fund
|
|
18,129
|
|
|
|
—
|
|
|
|
—
|
|
|
18,129
|
|
||||
Small Cap Fund
|
|
6,598
|
|
|
|
—
|
|
|
|
—
|
|
|
6,598
|
|
||||
World Equity Ex-US Fund
|
|
23,600
|
|
|
|
—
|
|
|
|
—
|
|
|
23,600
|
|
||||
Fixed Income Funds:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Emerging Markets Debt Fund
|
|
5,714
|
|
|
|
—
|
|
|
|
—
|
|
|
5,714
|
|
||||
High Yield Bond Fund
|
|
11,284
|
|
|
|
—
|
|
|
|
—
|
|
|
11,284
|
|
||||
Long Duration Fund
|
|
28,799
|
|
|
|
—
|
|
|
|
—
|
|
|
28,799
|
|
||||
Total assets at fair value
|
|
$
|
122,865
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
122,865
|
|
|
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 September 30, 2010:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
6
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
6
|
|
Registered Investment Companies-
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity Funds:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Large Cap Fund
|
|
4,437
|
|
|
|
—
|
|
|
|
—
|
|
|
4,437
|
|
||||
Large Cap Index Fund
|
|
4,469
|
|
|
|
—
|
|
|
|
—
|
|
|
4,469
|
|
||||
Small Cap Fund
|
|
1,655
|
|
|
|
—
|
|
|
|
—
|
|
|
1,655
|
|
||||
World Equity Ex-US Fund
|
|
5,416
|
|
|
|
—
|
|
|
|
—
|
|
|
5,416
|
|
||||
Fixed Income Funds:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Core Fixed Income Fund
|
|
7,207
|
|
|
|
—
|
|
|
|
—
|
|
|
7,207
|
|
||||
Emerging Markets Debt Fund
|
|
1,470
|
|
|
|
—
|
|
|
|
—
|
|
|
1,470
|
|
||||
High Yield Bond Fund
|
|
2,984
|
|
|
|
—
|
|
|
|
—
|
|
|
2,984
|
|
||||
Total assets at fair value
|
|
$
|
27,644
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
27,644
|
|
(Thousands)
|
2010
|
|
2009
|
||||
Balance at October 1
|
$
|
25,097
|
|
|
$
|
24,416
|
|
Accretion
|
1,572
|
|
|
1,493
|
|
||
Additions
|
149
|
|
|
131
|
|
||
Retirements
|
(809
|
)
|
|
(943
|
)
|
||
Balance at September 30
|
$
|
26,009
|
|
|
$
|
25,097
|
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Statutory income tax expense
|
$
|
63,753
|
|
$
|
13,516
|
|
$
|
61,322
|
|
Change resulting from
|
|
|
|
||||||
State income taxes
|
6,049
|
|
3,478
|
|
8,970
|
|
|||
Change in tax rate
|
(1,423
|
)
|
(715
|
)
|
(1,705
|
)
|
|||
Depreciation and cost of removal
|
(1,986
|
)
|
(2,191
|
)
|
(2,253
|
)
|
|||
Investment tax credits
|
(769
|
)
|
(322
|
)
|
(322
|
)
|
|||
Fin 48 (ASC 740) and other interest accrued/(released)
|
—
|
|
(1,272
|
)
|
1,371
|
|
|||
Other
|
(932
|
)
|
(1,118
|
)
|
(1,349
|
)
|
|||
Income tax provision
|
$
|
64,692
|
|
$
|
11,376
|
|
$
|
66,034
|
|
Effective income tax rate
|
35.5
|
%
|
29.5
|
%
|
37.7
|
%
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Current
|
|
|
|
||||||
Federal
|
$
|
(7,343
|
)
|
$
|
26,860
|
|
$
|
28,534
|
|
State
|
(981
|
)
|
7,603
|
|
4,750
|
|
|||
Deferred
|
|
|
|
||||||
Federal
|
65,258
|
|
(17,713
|
)
|
27,133
|
|
|||
State
|
8,527
|
|
(5,052
|
)
|
5,939
|
|
|||
Investment tax credits
|
(769
|
)
|
(322
|
)
|
(322
|
)
|
|||
Income tax provision
|
$
|
64,692
|
|
$
|
11,376
|
|
$
|
66,034
|
|
(Thousands)
|
2010
|
2009
|
||||
Current
|
|
|
||||
(Over)under recovered gas costs
|
$
|
—
|
|
$
|
(14,874
|
)
|
Pension liability
|
(9,260
|
)
|
(7,179
|
)
|
||
Deferred service contract revenue
(1)
|
(2,838
|
)
|
(2,636
|
)
|
||
Other
|
(2,382
|
)
|
(2,405
|
)
|
||
Total current deferred tax (assets)
|
$
|
(14,480
|
)
|
$
|
(27,094
|
)
|
|
|
|
||||
(Over)under recovered gas costs
|
$
|
14,738
|
|
$
|
—
|
|
Conservation incentive plan
|
6,050
|
|
2,415
|
|
||
Fair value of derivatives
(1)
|
18,107
|
|
10,366
|
|
||
Other
|
1,141
|
|
1,242
|
|
||
Total current deferred tax liabilities
|
$
|
40,036
|
|
$
|
14,023
|
|
Total net current deferred tax (assets) liabilities
|
$
|
25,556
|
|
$
|
(13,071
|
)
|
|
|
|
||||
Noncurrent
|
|
|
||||
Unamortized investment tax credits
|
$
|
(3,526
|
)
|
$
|
(3,699
|
)
|
Deferred gain (loss)
|
11
|
|
(1,060
|
)
|
||
Other
|
(5,149
|
)
|
(10,561
|
)
|
||
Total noncurrent deferred tax (assets)
|
$
|
(8,664
|
)
|
$
|
(15,320
|
)
|
|
|
|
||||
Pension/OPEB
|
$
|
17,765
|
|
$
|
10,584
|
|
Equity investments
|
24,460
|
|
7,050
|
|
||
Property - related items
|
212,825
|
|
197,475
|
|
||
Remediation costs
|
30,582
|
|
35,111
|
|
||
Fair value of derivatives
(1)
|
1,583
|
|
963
|
|
||
Total noncurrent deferred tax liabilities
|
$
|
287,215
|
|
$
|
251,183
|
|
Total net noncurrent deferred tax liabilities
|
$
|
278,551
|
|
$
|
235,863
|
|
|
|
|
||||
Total net deferred tax liabilities
|
$
|
304,107
|
|
$
|
222,792
|
|
(1)
|
Portions of the temporary differences related to changes in the fair value of derivatives and deferred service revenue during fiscal 2009, of $7.7 million, have been reclassified from non-current to current to correct the presentation on the Consolidated Balance Sheets.
|
(Millions)
|
2009
|
2008
|
||||
Beginning Balance
|
$
|
4.7
|
|
$
|
4.7
|
|
Additions based on tax positions related to the current year
|
—
|
|
—
|
|
||
Additions for tax positions of prior years
|
—
|
|
—
|
|
||
Reductions for tax positions of prior years
|
—
|
|
—
|
|
||
Settlements
|
(4.7
|
)
|
—
|
|
||
Expiration of statute of limitations
|
—
|
|
—
|
|
||
Ending Balance
|
$
|
—
|
|
$
|
4.7
|
|
(Thousands)
|
|
|
|
|||||||
Fiscal Years Ended September 30,
|
2010
|
2009
|
2008
|
|||||||
Operating revenues
|
|
|
|
|||||||
Natural Gas Distribution
|
|
|
|
|||||||
External customers
|
$
|
937,433
|
|
$
|
1,082,001
|
|
$
|
1,078,824
|
|
|
Intercompany
|
8,047
|
|
—
|
|
—
|
|
||||
Energy Services
|
|
|
|
|||||||
External customers
|
1,671,655
|
|
1,496,628
|
|
2,714,733
|
|
||||
Intercompany
|
13,389
|
|
2,114
|
|
—
|
|
||||
Segment subtotal
|
2,630,524
|
|
2,580,743
|
|
3,793,557
|
|
||||
Retail and Other
|
30,551
|
|
14,008
|
|
22,850
|
|
||||
Eliminations
|
(21,771
|
)
|
(2,291
|
)
|
(197
|
)
|
||||
Total
|
$
|
2,639,304
|
|
$
|
2,592,460
|
|
$
|
3,816,210
|
|
|
Depreciation and amortization
|
|
|
|
|||||||
Natural Gas Distribution
|
$
|
31,464
|
|
$
|
29,417
|
|
$
|
37,723
|
|
|
Energy Services
|
153
|
|
205
|
|
206
|
|
||||
Midstream Assets
|
6
|
|
—
|
|
—
|
|
||||
Segment subtotal
|
31,623
|
|
29,622
|
|
37,929
|
|
||||
Retail and Other
|
644
|
|
706
|
|
535
|
|
||||
Total
|
$
|
32,267
|
|
$
|
30,328
|
|
$
|
38,464
|
|
|
Interest income
(1)
|
|
|
|
|||||||
Natural Gas Distribution
|
$
|
1,973
|
|
$
|
2,779
|
|
$
|
3,294
|
|
|
Energy Services
|
15
|
|
570
|
|
311
|
|
||||
Midstream Assets
|
933
|
|
523
|
|
401
|
|
||||
Segment subtotal
|
2,921
|
|
3,872
|
|
4,006
|
|
||||
Retail and Other
|
4
|
|
44
|
|
75
|
|
||||
Eliminations
|
(907
|
)
|
(496
|
)
|
—
|
|
||||
Total
|
$
|
2,018
|
|
$
|
3,420
|
|
$
|
4,081
|
|
|
Interest expense, net of capitalized interest
|
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
16,618
|
|
$
|
18,706
|
|
$
|
21,277
|
|
|
Energy Services
|
1,439
|
|
322
|
|
2,574
|
|
||||
Midstream Assets
|
2,418
|
|
1,951
|
|
489
|
|
||||
Segment subtotal
|
20,475
|
|
20,979
|
|
24,340
|
|
||||
Retail and Other
|
776
|
|
353
|
|
1,471
|
|
||||
Eliminations
|
—
|
|
(318
|
)
|
—
|
|
||||
Total
|
$
|
21,251
|
|
$
|
21,014
|
|
$
|
25,811
|
|
|
Income tax provision (benefit)
|
|
|
|
|||||||
Natural Gas Distribution
|
$
|
38,417
|
|
$
|
39,729
|
|
$
|
27,840
|
|
|
Energy Services
|
23,250
|
|
(24,259
|
)
|
38,806
|
|
||||
Midstream Assets
|
4,301
|
|
1,969
|
|
1,076
|
|
||||
Segment subtotal
|
65,968
|
|
17,439
|
|
67,722
|
|
||||
Retail and Other
|
(1,137
|
)
|
(5,845
|
)
|
(1,752
|
)
|
||||
Eliminations
|
(139
|
)
|
(218
|
)
|
64
|
|
||||
Total
|
$
|
64,692
|
|
$
|
11,376
|
|
$
|
66,034
|
|
|
(1)
|
Included in other income in the Consolidated Statement of Operations.
|
|
|
|
(Thousands)
|
|
|
|
||||||
Fiscal Years Ended September 30,
|
2010
|
2009
|
2008
|
||||||
Equity in earnings of affiliates
|
|
|
|
||||||
Midstream Assets
|
$
|
12,996
|
|
$
|
6,886
|
|
$
|
3,467
|
|
Segment subtotal
|
12,996
|
|
6,886
|
|
3,467
|
|
|||
Eliminations
|
(2,979
|
)
|
267
|
|
(160
|
)
|
|||
Total
|
$
|
10,017
|
|
$
|
7,153
|
|
$
|
3,307
|
|
Net financial earnings (loss)
|
|
|
|
|
|||||
Natural Gas Distribution
|
$
|
70,242
|
|
$
|
65,403
|
|
$
|
42,479
|
|
Energy Services
|
24,814
|
|
31,179
|
|
47,003
|
|
|||
Midstream Assets
|
6,444
|
|
2,873
|
|
1,839
|
|
|||
Segment subtotal
|
101,500
|
|
99,455
|
|
91,321
|
|
|||
Retail and Other
|
264
|
|
1,666
|
|
2,494
|
|
|||
Eliminations
|
—
|
|
(151
|
)
|
—
|
|
|||
Total
|
$
|
101,764
|
|
$
|
100,970
|
|
$
|
93,815
|
|
Capital expenditures
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
93,821
|
|
$
|
81,246
|
|
$
|
79,162
|
|
Segment subtotal
|
93,821
|
|
81,246
|
|
79,162
|
|
|||
Retail and Other
|
3,558
|
|
388
|
|
1,117
|
|
|||
Total
|
$
|
97,379
|
|
$
|
81,634
|
|
$
|
80,279
|
|
Investments in equity method investees
|
|
|
|
||||||
Midstream Assets
|
$
|
4,300
|
|
$
|
43,843
|
|
$
|
23,662
|
|
Total
|
$
|
4,300
|
|
$
|
43,843
|
|
$
|
23,662
|
|
|
September 30,
|
||||||||
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Consolidated net financial earnings
|
$
|
101,764
|
|
$
|
100,970
|
|
$
|
93,815
|
|
Less:
|
|
|
|
||||||
Unrealized loss (gain) from derivative instruments and related transactions, net of taxes
(1)
|
(16,825
|
)
|
39,254
|
|
(6,028
|
)
|
|||
Effects of economic hedging related to natural gas inventory, net of taxes
|
1,132
|
|
34,474
|
|
(9,325
|
)
|
|||
Consolidated net income
|
$
|
117,457
|
|
$
|
27,242
|
|
$
|
109,168
|
|
(1)
|
Excludes unrealized loss of $228,000 related to an intercompany transaction between NJNG and NJRES that has been eliminated in consolidation for fiscal 2010.
|
•
|
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.
|
(Thousands)
|
2010
|
2009
|
2008
|
||||||
Assets at end of period:
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
1,904,545
|
|
$
|
1,797,165
|
|
$
|
1,761,964
|
|
Energy Services
|
432,380
|
|
327,532
|
|
699,897
|
|
|||
Midstream Assets
|
159,882
|
|
153,609
|
|
108,403
|
|
|||
Segment subtotal
|
2,496,807
|
|
2,278,306
|
|
2,570,264
|
|
|||
Retail and Other
|
85,864
|
|
69,411
|
|
123,148
|
|
|||
Intercompany assets
(1)
|
(19,538
|
)
|
(26,687
|
)
|
(58,115
|
)
|
|||
Total
|
$
|
2,563,133
|
|
$
|
2,321,030
|
|
$
|
2,635,297
|
|
(1)
|
Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.
|
(Thousands, except per share data)
|
First
|
Second
|
Third
|
Fourth
|
||||||||
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
||||||||
2010
|
|
|
|
|
||||||||
Operating revenues
|
$
|
609,546
|
|
$
|
918,346
|
|
$
|
479,894
|
|
$
|
631,518
|
|
Gross margin
(1)
|
$
|
75,308
|
|
$
|
104,635
|
|
$
|
45,547
|
|
$
|
131,120
|
|
Operating income (loss)
|
$
|
85,385
|
|
$
|
122,012
|
|
$
|
(18,786
|
)
|
$
|
(486
|
)
|
Net income (loss)
|
$
|
51,902
|
|
$
|
74,217
|
|
$
|
(10,177
|
)
|
$
|
1,515
|
|
Earnings (loss) per share
|
|
|
|
|
||||||||
Basic
|
$
|
1.25
|
|
$
|
1.79
|
|
$
|
(0.25
|
)
|
$
|
0.04
|
|
Diluted
|
$
|
1.24
|
|
$
|
1.78
|
|
$
|
(0.25
|
)
|
$
|
0.04
|
|
2009
|
|
|
|
|
||||||||
Operating revenues
|
$
|
801,304
|
|
$
|
937,516
|
|
$
|
441,052
|
|
$
|
412,588
|
|
Gross margin
(1)
|
$
|
91,189
|
|
$
|
95,390
|
|
$
|
21,185
|
|
$
|
13,492
|
|
Operating income (loss)
|
$
|
49,251
|
|
$
|
52,000
|
|
$
|
(23,770
|
)
|
$
|
(29,411
|
)
|
Net income (loss)
|
$
|
28,272
|
|
$
|
31,988
|
|
$
|
(14,155
|
)
|
$
|
(18,863
|
)
|
Earnings (loss) per share
|
|
|
|
|
||||||||
Basic
|
$
|
0.67
|
|
$
|
0.76
|
|
$
|
(0.34
|
)
|
$
|
(0.45
|
)
|
Diluted
|
$
|
0.67
|
|
$
|
0.75
|
|
$
|
(0.34
|
)
|
$
|
(0.45
|
)
|
(1)
|
Gross margin, which is a non-GAAP measure, consists of operating revenue less cost of goods sold and other direct expenses at NJR's unregulated subsidiaries and utility gross margin at NJNG, which includes natural gas revenues less natural gas purchases, sales tax, a Transitional Energy Facilities Assessment and regulatory rider expenses.
|
|
|
Page
|
|
|
Schedule I-Condensed financial information of registrant for each of the 3 years in the period ended September 30, 2010
|
113
|
|
|
|
|
|
|
Schedule II-Valuation and qualifying accounts and reserves for each of the 3 years in the period ended September 30, 2010
|
115
|
|
(Thousands)
|
|
|
|
||||||
Fiscal Years Ended September 30,
|
2010
|
2009
|
2008
|
||||||
Operating revenues
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Operating expenses
|
9,213
|
|
9,159
|
|
8,667
|
|
|||
Operating loss
|
9,213
|
|
9,159
|
|
8,667
|
|
|||
Other income
|
9,960
|
|
9,980
|
|
10,023
|
|
|||
Interest expense
|
748
|
|
276
|
|
1,348
|
|
|||
Income before income taxes and equity in earnings of affiliates
|
(1
|
)
|
545
|
|
8
|
|
|||
Income tax provision (benefit)
|
57
|
|
230
|
|
(51
|
)
|
|||
Equity in earnings of subsidiaries
|
117,515
|
|
26,927
|
|
109,109
|
|
|||
Net income
|
$
|
117,457
|
|
$
|
27,242
|
|
$
|
109,168
|
|
(Thousands)
|
|
|
|
||||||
Fiscal Years Ended September 30,
|
2010
|
2009
|
2008
|
||||||
Net cash provided by operating activities
|
$
|
40,370
|
|
$
|
52,971
|
|
$
|
59,144
|
|
|
|
|
|
||||||
Net cash (used in) investing activities
|
$
|
(41,397
|
)
|
$
|
(80,269
|
)
|
$
|
(13,916
|
)
|
|
|
|
|
||||||
Cash flows from (used in) financing activities:
|
|
|
|
||||||
Payments from long-term debt
|
$
|
—
|
|
$
|
(25,000
|
)
|
$
|
(493
|
)
|
Tax benefit from stock options exercised
|
669
|
|
1,686
|
|
630
|
|
|||
Proceeds from common stock
|
6,487
|
|
16,441
|
|
16,028
|
|
|||
Net payments from associated companies
|
79,361
|
|
5,187
|
|
2,472
|
|
|||
Purchases of treasury stock
|
(29,650
|
)
|
(30,670
|
)
|
(11,039
|
)
|
|||
Payments of common stock dividends
|
(53,137
|
)
|
(50,967
|
)
|
(45,201
|
)
|
|||
Net (payments) proceeds of short-term debt
|
(2,800
|
)
|
110,700
|
|
(7,550
|
)
|
|||
Cash flows from (used in) financing activities
|
$
|
930
|
|
$
|
27,377
|
|
$
|
(45,153
|
)
|
Change in cash and temporary investments
|
$
|
(97
|
)
|
$
|
79
|
|
$
|
75
|
|
Cash and temporary investments, beginning of year
|
154
|
|
75
|
|
—
|
|
|||
Cash and temporary investments, end of year
|
$
|
57
|
|
$
|
154
|
|
$
|
75
|
|
(Thousands)
|
|
|
||||
September 30,
|
2010
|
2009
|
||||
ASSETS
|
|
|
||||
Current assets
|
$
|
14,879
|
|
$
|
18,130
|
|
Investments
|
770,980
|
|
710,102
|
|
||
Intercompany receivable, net
|
124,807
|
|
170,462
|
|
||
Deferred charges and other assets
|
1,781
|
|
2,456
|
|
||
Total assets
|
$
|
912,447
|
|
$
|
901,150
|
|
CAPITALIZATION AND LIABILITIES
|
|
|
||||
Current liabilities
|
$
|
134,662
|
|
$
|
158,193
|
|
Long-term debt
|
50,000
|
|
50,000
|
|
||
Deferred credits and other liabilities
|
2,302
|
|
3,231
|
|
||
Common stock equity
|
725,483
|
|
689,726
|
|
||
Total capitalization and liabilities
|
$
|
912,447
|
|
$
|
901,150
|
|
(Thousands)
|
|
ADDITIONS
|
|
|
||||||
CLASSIFICATION
|
BEGINNING
BALANCE
|
CHARGED TO
EXPENSE
|
OTHER
(1)
|
ENDING BALANCE
|
||||||
2010
|
|
|
|
|
||||||
Regulatory asset reserve
|
$
|
282
|
|
(70
|
)
|
—
|
|
$
|
212
|
|
Allowance for Doubtful Accounts
|
$
|
6,064
|
|
3,307
|
|
(6,378
|
)
|
$
|
2,993
|
|
2009
|
|
|
|
|
||||||
Regulatory asset reserve
|
$
|
102
|
|
—
|
|
180
|
|
$
|
282
|
|
Allowance for Doubtful Accounts
|
$
|
4,580
|
|
9,588
|
|
(8,104
|
)
|
$
|
6,064
|
|
2008
|
|
|
|
|
||||||
Regulatory asset reserve
|
$
|
2,703
|
|
529
|
|
(3,130
|
)
|
$
|
102
|
|
Allowance for Doubtful Accounts
|
$
|
3,166
|
|
4,422
|
|
(3,008
|
)
|
$
|
4,580
|
|
(1)
|
Uncollectible accounts written off, less recoveries and adjustments.
|
|
|
NEW JERSEY RESOURCES CORPORATION
|
|
|
(Registrant)
|
Date:
|
November 24, 2010
|
|
|
|
By:/s/ Glenn C. Lockwood
|
|
|
Glenn C. Lockwood
|
|
|
Senior Vice President and
|
|
|
Chief Financial Officer
|
November 24, 2010
|
/s/ Laurence M. Downes
|
November 24, 2010
|
/s/ Jane M. Kenny
|
|
Laurence M. Downes
Chairman, President and
Chief Executive Officer
Director
|
|
Jane M. Kenny
Director
|
|
|
|
|
November 24, 2010
|
/s/ Nina Aversano
|
November 24, 2010
|
/s/ Alfred C. Koeppe
|
|
Nina Aversano
Director
|
|
Alfred C. Koeppe
Director
|
|
|
|
|
November 24, 2010
|
/s/ Lawrence R. Codey
|
November 24, 2010
|
/s/ Glenn C. Lockwood
|
|
Lawrence R. Codey
Director
|
|
Glenn C. Lockwood
Senior Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
|
|
November 24, 2010
|
/s/ Donald L. Correll
|
November 24, 2010
|
/s/ J. Terry Strange
|
|
Donald L. Correll
Director
|
|
J. Terry Strange
Director
|
|
|
|
|
November 24, 2010
|
/s/ Robert B. Evans
|
November 24, 2010
|
/s/ David A. Trice
|
|
Robert B. Evans
Director
|
|
David A. Trice
Director
|
|
|
|
|
November 24, 2010
|
/s/ M. William Howard, Jr.
|
November 24, 2010
|
/s/ George R. Zoffinger
|
|
M. William Howard, Jr.
Director
|
|
George R. Zoffinger
Director
|
Exhibit
Number
|
Exhibit Description
|
3.1
|
Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3-1 to the Annual Report on Form 10-K for the year ended September 30, 1996, as filed on December 30, 1996 and Exhibit 3.1 to the Current Report on Form 8-K, as filed on March 6, 2008)
|
|
|
3.2
|
By-Laws of the Company, as amended on July 14, 2009 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K, as filed on July 20, 2009)
|
|
|
4.1
|
Specimen Common Stock Certificates (incorporated by reference to Exhibit 4-1 to Registration Statement No. 033-21872)
|
|
|
4.2
|
Indenture of Mortgage and Deed of Trust between NJNG and Harris Trust and Savings Bank, as Trustee, dated April 1, 1952, as supplemented by twenty-one Supplemental Indentures (incorporated by reference to Exhibit 4(g) to Registration Statement No. 002-9569)
|
|
|
4.2(a)
|
Twenty-Fifth Supplemental Indenture, dated as of July 15, 1995 (incorporated by reference to Exhibit 4.2(Y) to the Annual Report on Form 10-K for the year ended September 30, 1995, as filed on December 29, 1995)
|
|
|
4.2(b)
|
Twenty-Seventh Supplemental Indenture, dated as of September 1, 1997 (incorporated by reference to Exhibit 4.2(J) to the Annual Report on Form 10-K as filed on December 29, 1997)
|
|
|
4.2(c)
|
Twenty-Eighth Supplemental Indenture, dated as of January 1, 1998 (incorporated by reference to Exhibit 4.2(K) to the Annual Report on Form 10-K for the year ended September 30, 1998, as filed on December 24, 1998)
|
|
|
4.2(d)
|
Twenty-Ninth Supplemental Indenture, dated as of April 1, 1998 (incorporated by reference to Exhibit 4.2(L) to the Annual Report on Form 10-K for the year ended September 30, 1988, as filed on December 24, 1998)
|
|
|
4.2(e)
|
Thirtieth Supplemental Indenture, dated as of December 1, 2003 (incorporated by reference to Exhibit 4.2(J) to the Annual Report on Form 10-K for the year ended September 30, 2003, as filed on December 16, 2003)
|
|
|
4.2(f)
|
Thirty-First Supplemental Indenture, dated as of October 1, 2005 (incorporated by reference to Exhibit 4.2(I) to the Annual Report on Form 10-K for the year ended September 30, 2005, as filed on November 29, 2005)
|
|
|
4.2(g)
|
Thirty-Second Supplemental Indenture, dated as of May 1, 2008 (incorporated by reference to Exhibit 4.2(i) to the Current Report on Form 8-K, as filed on May 20, 2008)
|
|
|
4.3
|
Credit Agreement dated as of December 11, 2009, by and among New Jersey Natural Gas Company, the Lenders party thereto, PNC Bank, National Association, as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, U.S. Bank National Association and Toronto Dominion (New York) LLC, as Documentation Agents and PNC Capital Markets LLC, as Lead Arranger (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K/A, as filed on January 8, 2010)
|
|
|
4.4
|
$325,000,000 Revolving Credit Facility Credit Agreement by and among the Company, the guarantors thereto, PNC Bank, NA as Administrative Agent, the banks party thereto, JPMorgan Chase Bank, NA and Bank of America, N.A., as Syndication Agents, Bank Of Nova Scotia and Citibank, N.A., as Documentation Agents and PNC Capital Markets LLC., as Lead Arranger, dated as of December 13, 2007 (incorporated by reference to Exhibit 4.9 to the Quarterly Report on Form 10-Q as filed on February 6, 2008)
|
|
|
4.6
|
$60,000,000 Note Purchase Agreement by and among NJNG and J.P. Morgan Securities Inc., as Placement Agent, dated March 15, 2004 (incorporated by reference to Exhibit 4-1 to the Quarterly Report on Form 10-Q as filed on May 10, 2004)
|
|
|
4.7
|
$50,000,000 Note Purchase Agreement dated as of September 24, 2007, by and among the Company, New York Life Insurance Company and New York Life Insurance and Annuity Company (incorporated by reference to Exhibit 4.7 to the Annual Report on Form 10-K as filed on December 10, 2007)
|
|
|
Exhibit
Number
|
Exhibit Description
|
Exhibit
Number
|
Exhibit Description
|
10.16
|
Limited Liability Company Agreement of Steckman Ridge GP, LLC dated as of March 2, 2007 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q, as filed on May 3, 2007)
|
|
|
10.17
|
Limited Partnership Agreement of Steckman Ridge, LP dated as of March 2, 2007 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q, as filed on May 3, 2007)
|
|
|
10.18*+
|
2007 Stock Award and Incentive Plan Form of Deferred Stock Retention Award Agreement between NJRES and Stephen D. Westhoven dated as of December 31, 2008
|
|
|
10.19*
|
2007 Stock Award and Incentive Plan Form of Deferred Stock Retention Award Agreement between NJNG and Kathleen T. Ellis dated as of December 31, 2008 (incorporated by reference to Exhibit 10.26 to the Current Report on Form 8-K as filed on January 7, 2009)
|
|
|
10.20*
|
New Jersey Resources Corporation Savings Equalization Plan (incorporated by reference to Exhibit 10.27 to the Quarterly Report on Form 10-Q, as filed on February 6, 2009)
|
|
|
10.21*
|
New Jersey Resources Corporation Pension Equalization Plan (incorporated by reference to Exhibit 10.28 to the Quarterly Report on Form 10-Q, as filed on February 6, 2009)
|
|
|
10.22*
|
New Jersey Resources Corporation Directors' Deferred Compensation Plan (incorporated by reference to Exhibit 10.25 to the Quarterly Report on Form 10-Q, as filed on February 6, 2009)
|
|
|
10.23*
|
New Jersey Resources Corporation Officers' Deferred Compensation Plan (incorporated by reference to Exhibit 10.26 to the Quarterly Report on Form 10-Q, as filed on February 6, 2009)
|
|
|
21.1
|
Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to the Annual Report on Form 10-K, as filed on November 30, 2009).
|
|
|
23.1+
|
Consent of Independent Registered Public Accounting Firm
|
|
|
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
|
|
|
101+
|
Interactive Data File (Annual Report on Form 10-K, for the fiscal year ended September 30, 2010, furnished in XBRL (eXtensible Business Reporting Language)).
|
Name
|
Maximum SERP Benefit Payable at Retirement
|
Laurence M. Downes, President and Chief Executive Officer
|
$250,000
|
Mariellen Dugan, Senior Vice President and General Counsel
|
$125,000
|
Kathleen T. Ellis, Senior Vice President, Corporate Affairs
|
$125,000
|
Glenn C. Lockwood, Senior Vice President and Chief Financial Officer
|
$125,000
|
Stephen D. Westhoven, Senior Vice President, NJR Energy Services Company
|
$125,000
|
Name
|
Termination Benefit
|
Laurence M. Downes, President and Chief Executive Officer
|
Three times
the sum, of (x) his then annual base salary and (y) the average of his annual bonuses paid or payable with respect to the last three calendar years ended prior to the Change of Control.
|
Mariellen Dugan, Senior Vice President and General Counsel
|
Two times
the sum, of (x) her then annual base salary and (y) the average of her annual bonuses paid or payable with respect to the last three calendar years ended prior to the Change of Control (“
2x
”).
|
Kathleen T. Ellis, Senior Vice President, Corporate Affairs
|
2x
|
Glenn C. Lockwood, Senior Vice President and Chief Financial Officer
|
2x
|
Stephen D. Westhoven, Senior Vice President, NJR Energy Services Company
|
2x
|
Payout Date
On
|
Number of Shares
|
|
November 11, 2011
|
2,827.255
|
|
February 11, 2012
|
2,827.255
|
|
May 11, 2012
|
2,827.255
|
|
August 11, 2012
|
2,827.255
|
|
Total Payout
|
11,309.019
|
|
•
|
Employee shall not compete with the energy trading and wholesale energy operations of NJRES in any geographical area where NJRES is doing business including, but not limited to, competition by engaging in energy trading and wholesale energy operations with, or on behalf of, yourself or any person, corporation, partnership or any other business entity;
|
•
|
Employee shall not solicit any NJRES customers, vendors or employees including, but not limited to, interaction with existing or prospective customers, vendors or employees of NJRES that takes place in an effort to establish, maintain and/or further a business relationship with such customers, vendors or employees, diversion of a customer's or prospective customer's business from NJRES or other interference with NJRES' business with an existing or prospective customer, vendor or employee, even if such customer, vendor or employee initiates contact with you;
|
•
|
Employee shall not disclose any confidential information related to NJR's or any of its subsidiaries' business plans or practices;
|
•
|
Employee shall not make any statements, either verbally or in writing, that are disparaging with regard to NJR or any of its subsidiaries (including, but not limited to, NJRES) or their respective executives and Board members; and
|
•
|
Employee shall not engage in any financial or other misconduct that results in the termination of Employee's employment for “Cause.” For purposes of this letter, "Cause" means (A) conviction of a felony or the entering by Employee of a plea of nolo contendere to a felony charge, (B) Employee's gross neglect, willful malfeasance or willful gross misconduct in connection with Employee's employment hereunder which has had a significant adverse effect on the business of NJR or any of its subsidiaries, unless Employee reasonably believed in good faith that such act or non-act was in or not opposed to the best interests of NJR or any of its subsidiaries, or (C) repeated material violations by Employee of his or her obligations under any applicable employment agreement or policy of NJR or any of its subsidiaries, which have continued after written notice thereof from NJR or any of its subsidiaries, which violations are demonstrably willful and deliberate on Employee's part and which result in material damage to NJR or any of its subsidiaries' business or reputation.
|
/s/ Laurence M. Downes
|
LAURENCE M. DOWNES
|
Chairman and Chief Executive Officer
|
/s/ Stephen D. Westhoven
|
|
December 30, 2008
|
STEPHEN D. WESTHOVEN
|
|
Date
|
1)
|
I have reviewed this annual report on Form 10-K of New Jersey Resources Corporation;
|
2)
|
Based on my knowledge, this 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 report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this 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 report;
|
4)
|
The registrant's other certifying officer 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-15(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 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 report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
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
(the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, 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 and material weaknesses 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: November 24, 2010
|
By:
|
/s/ Laurence M. Downes
|
|
|
Laurence M. Downes
|
|
|
Chairman, President & Chief Executive Officer
|
1)
|
I have reviewed this annual report on Form 10-K of New Jersey Resources Corporation;
|
2)
|
Based on my knowledge, this 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 report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this 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 report;
|
4)
|
The registrant's other certifying officer 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-15(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 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 report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
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
(the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, 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 and material weaknesses 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: November 24, 2010
|
By:
|
/s/ Glenn C. Lockwood
|
|
|
Glenn C. Lockwood
|
|
|
Senior Vice President and Chief Financial Officer
|
(a)
|
I am the Chief Executive Officer of New Jersey Resources Corporation;
|
(b)
|
To the best of my knowledge, this annual report on Form 10-K for the year ended September 30, 2010, 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 this report, the information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer.
|
Date: November 24, 2010
|
By:
|
/s/ Laurence M. Downes
|
|
|
Laurence M. Downes
|
|
|
Chairman, President and Chief Executive Officer
|
(a)
|
I am the Chief
Financial
Officer of New Jersey Resources Corporation;
|
(b)
|
To the best of my knowledge, this annual report on Form 10-K for the year ended September 30, 2010, 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 this report, the information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer.
|
Date: November 24, 2010
|
By:
|
/s/ Glenn C. Lockwood
|
|
|
Glenn C. Lockwood
|
|
|
Senior Vice President and Chief Financial Officer
|