|
Large accelerated filer:
x
|
Accelerated filer:
o
|
Non-accelerated filer:
o
|
Smaller reporting company
:
o
|
|
|
(Do not check if a smaller reporting company)
|
|
|
|
|
|
Page
|
PART I. FINANCIAL INFORMATION
|
|
||
|
ITEM 1.
|
||
|
|
||
|
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||
|
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||
|
|
||
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||
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ITEM 2.
|
||
|
ITEM 3.
|
||
|
ITEM 4.
|
||
PART II. OTHER INFORMATION
|
|
||
|
ITEM 1.
|
||
|
ITEM 1A.
|
||
|
ITEM 2.
|
||
|
ITEM 6.
|
||
|
|
AFUDC
|
Allowance for Funds Used During Construction
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update
|
Bcf
|
Billion Cubic Feet
|
BGSS
|
Basic Gas Supply Service
|
BPU
|
New Jersey Board of Public Utilities
|
CIP
|
Conservation Incentive Program
|
CME
|
Chicago Mercantile Exchange
|
CR&R
|
Commercial Realty & Resources Corp.
|
DM
|
Dominion Midstream Partners, L.P., a master limited partnership
|
DM Common Units
|
Common units representing limited partnership interests in DM
|
Dodd-Frank Act
|
Dodd-Frank Wall Street Reform and Consumer Protection Act
|
DRP
|
NJR Direct Stock Purchase and Dividend Reinvestment Plan
|
dths
|
Dekatherms
|
FASB
|
Financial Accounting Standards Board
|
FCM
|
Futures Commission Merchant
|
FERC
|
Federal Energy Regulatory Commission
|
Financial margin
|
A non-GAAP financial measure, which represents revenues earned from the sale of natural gas less costs of natural gas sold including any transportation and storage costs, and excludes any accounting impact from the change in the fair value of certain derivative instruments
|
FMB
|
First Mortgage Bonds
|
FRM
|
Financial Risk Management
|
GAAP
|
Generally Accepted Accounting Principles of the United States
|
Home Services and Other
|
Home Services and Other Operations (formerly Retail and Other Operations)
|
ICE
|
Intercontinental Exchange
|
Iroquois
|
Iroquois Gas Transmission L.P.
|
ISDA
|
The International Swaps and Derivatives Association
|
ITC
|
Federal Investment Tax Credit
|
LNG
|
Liquefied Natural Gas
|
MGP
|
Manufactured Gas Plant
|
Moody's
|
Moody's Investors Service, Inc.
|
Mortgage Indenture
|
The Amended and Restated Indenture of Mortgage, Deed of Trust and Security Agreement between NJNG and U.S. Bank National Association dated as of September 1, 2014
|
MW
|
Megawatts
|
MWh
|
Megawatt Hour
|
NAESB
|
The North American Energy Standards Board
|
NFE
|
Net Financial Earnings
|
NGV
|
Natural Gas Vehicles
|
NJ RISE
|
New Jersey Reinvestment in System Enhancement
|
NJCEP
|
New Jersey's Clean Energy Program
|
NJDEP
|
New Jersey Department of Environmental Protection
|
NJNG
|
New Jersey Natural Gas Company
|
NJNG Credit Facility
|
NJNG's $250 million unsecured committed credit facility expiring in May 2019
|
NJR Credit Facility
|
NJR's $425 million unsecured committed credit facility expiring in September 2020
|
NJR Energy
|
NJR Energy Corporation
|
NJR or The Company
|
New Jersey Resources Corporation
|
GLOSSARY OF KEY TERMS (cont.)
|
|
|
|
NJRCEV
|
NJR Clean Energy Ventures Corporation
|
NJRES
|
NJR Energy Services Company
|
NJRHS
|
NJR Home Services Company
|
Non-GAAP
|
Not in accordance with Generally Accepted Accounting Principles of the United States
|
NPNS
|
Normal Purchase/Normal Sale
|
NYMEX
|
New York Mercantile Exchange
|
O&M
|
Operation and Maintenance
|
OCI
|
Other Comprehensive Income
|
OPEB
|
Other Postemployment Benefit Plans
|
PennEast
|
PennEast Pipeline Company, LLC
|
PIM
|
Pipeline Integrity Management
|
PPA
|
Power Purchase Agreement
|
PTC
|
Federal Production Tax Credit
|
RA
|
Remediation Adjustment
|
REC
|
Renewable Energy Certificate
|
S&P
|
Standard & Poor's Financial Services, LLC
|
SAFE
|
Safety Acceleration and Facility Enhancement
|
SAVEGREEN
|
The SAVEGREEN Project®
|
SBC
|
Societal Benefits Charge
|
SREC
|
Solar Renewable Energy Certificate
|
SRL
|
Southern Reliability Link
|
Steckman Ridge
|
Collectively, Steckman Ridge GP, LLC and Steckman Ridge, LP
|
Superstorm Sandy
|
Post-Tropical Cyclone Sandy
|
Tetco
|
Texas Eastern Transmission
|
The Exchange Act
|
The Securities Exchange Act of 1934, as amended
|
Trustee
|
U.S. Bank National Association
|
U.S.
|
The United States of America
|
USF
|
Universal Service Fund
|
•
|
weather and economic conditions;
|
•
|
demographic changes in the NJNG service territory and their effect on NJNG's customer growth;
|
•
|
volatility of natural gas and other commodity prices and their impact on NJNG customer usage, NJNG's
BGSS
incentive programs, NJRES operations and on our risk management efforts;
|
•
|
changes in rating agency requirements and/or credit ratings and their effect on availability and cost of capital to our Company;
|
•
|
the impact of volatility in the credit markets on our access to capital;
|
•
|
the ability to comply with debt covenants;
|
•
|
the impact to the asset values and resulting higher costs and funding obligations of our pension and postemployment benefit plans as a result of potential downturns in the financial markets, lower discount rates, revised actuarial assumptions or impacts associated with the Patient Protection and Affordable Care Act;
|
•
|
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;
|
•
|
regulatory approval of NJNG's planned infrastructure programs;
|
•
|
the ability to obtain governmental and regulatory approvals, land-use rights, electric grid connection (in the case of distributed power projects) and/or financing for the construction, development and operation of our unregulated energy investments and NJNG's infrastructure projects in a timely manner;
|
•
|
risks associated with the management of our joint ventures and partnerships;
|
•
|
risks associated with our investments in distributed power projects,
including the availability of regulatory and tax incentives, the availability of viable projects, our eligibility for ITCs and PTCs, the future market for SRECs and electricity prices, and operational risks related to projects in service;
|
•
|
timing of qualifying for ITCs and PTCs due to delays or failures to complete planned solar and wind energy projects and the resulting effect on our effective tax rate and earnings;
|
•
|
the level and rate at which NJNG's costs are incurred and the extent to which they are allowed to be recovered from customers through the regulatory process;
|
•
|
access to adequate supplies of natural gas and 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;
|
•
|
risks related to our employee workforce;
|
•
|
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;
|
•
|
risks related to changes in accounting standards;
|
•
|
the impact of a disallowance of recovery of environmental-related expenditures and other regulatory changes;
|
•
|
environmental-related and other litigation and other uncertainties;
|
•
|
risks related to cyber-attack or failure of information technology systems; and
|
•
|
the impact of natural disasters, terrorist activities and other extreme events
.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
June 30,
|
||||||||||||
(Thousands, except per share data)
|
2016
|
|
2015
|
2016
|
|
2015
|
||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
||||||||
Utility
|
$
|
119,206
|
|
|
$
|
116,307
|
|
$
|
513,348
|
|
|
$
|
699,737
|
|
Nonutility
|
274,007
|
|
|
342,160
|
|
898,316
|
|
|
1,595,944
|
|
||||
Total operating revenues
|
393,213
|
|
|
458,467
|
|
1,411,664
|
|
|
2,295,681
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
||||||||
Gas purchases:
|
|
|
|
|
|
|
||||||||
Utility
|
45,700
|
|
|
41,562
|
|
174,739
|
|
|
255,106
|
|
||||
Nonutility
|
288,510
|
|
|
342,105
|
|
830,481
|
|
|
1,477,649
|
|
||||
Related parties
|
2,108
|
|
|
3,102
|
|
6,259
|
|
|
9,490
|
|
||||
Operation and maintenance
|
51,467
|
|
|
48,598
|
|
150,825
|
|
|
146,135
|
|
||||
Regulatory rider expenses
|
6,360
|
|
|
8,516
|
|
37,203
|
|
|
72,671
|
|
||||
Depreciation and amortization
|
18,671
|
|
|
15,574
|
|
52,897
|
|
|
45,164
|
|
||||
Energy and other taxes
|
8,726
|
|
|
8,319
|
|
34,205
|
|
|
47,272
|
|
||||
Total operating expenses
|
421,542
|
|
|
467,776
|
|
1,286,609
|
|
|
2,053,487
|
|
||||
OPERATING (LOSS) INCOME
|
(28,329
|
)
|
|
(9,309
|
)
|
125,055
|
|
|
242,194
|
|
||||
Other income, net
|
2,306
|
|
|
1,491
|
|
6,432
|
|
|
2,518
|
|
||||
Interest expense, net of capitalized interest
|
7,787
|
|
|
7,327
|
|
21,933
|
|
|
21,005
|
|
||||
(LOSS) INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES
|
(33,810
|
)
|
|
(15,145
|
)
|
109,554
|
|
|
223,707
|
|
||||
Income tax (benefit) provision
|
(14,190
|
)
|
|
(4,318
|
)
|
10,347
|
|
|
56,693
|
|
||||
Equity in earnings of affiliates
|
2,257
|
|
|
3,367
|
|
7,065
|
|
|
9,749
|
|
||||
NET (LOSS) INCOME
|
$
|
(17,363
|
)
|
|
$
|
(7,460
|
)
|
$
|
106,272
|
|
|
$
|
176,763
|
|
|
|
|
|
|
|
|
||||||||
(LOSS) EARNINGS PER COMMON SHARE
|
|
|
|
|
|
|
||||||||
Basic
|
$(.20)
|
|
$(.09)
|
$1.24
|
|
$2.08
|
||||||||
Diluted
|
$(.20)
|
|
$(.09)
|
$1.23
|
|
$2.05
|
||||||||
DIVIDENDS DECLARED PER COMMON SHARE
|
$.24
|
|
$.23
|
$.72
|
|
$.68
|
||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING
|
|
|
|
|
|
|
||||||||
Basic
|
85,960
|
|
|
85,449
|
|
85,823
|
|
|
85,110
|
|
||||
Diluted
|
85,960
|
|
|
85,449
|
|
86,691
|
|
|
86,128
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
June 30,
|
||||||||||||
(Thousands)
|
2016
|
|
2015
|
2016
|
|
2015
|
||||||||
Net (loss) income
|
$
|
(17,363
|
)
|
|
$
|
(7,460
|
)
|
$
|
106,272
|
|
|
$
|
176,763
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
||||||||
Unrealized (loss) gain on available for sale securities, net of tax of $3,754, $394, $(2,014) and $319, respectively
|
$
|
(5,313
|
)
|
|
$
|
(570
|
)
|
2,888
|
|
|
(461
|
)
|
||
Net unrealized (loss) gain on derivatives, net of tax of $2, $(6), $0 and $(56) respectively
|
(5
|
)
|
|
6
|
|
—
|
|
|
93
|
|
||||
Adjustment to postemployment benefit obligation, net of tax of $(174), $(169), $(523), and $(506) respectively
|
256
|
|
|
246
|
|
769
|
|
|
732
|
|
||||
Other comprehensive (loss) income
|
$
|
(5,062
|
)
|
|
$
|
(318
|
)
|
3,657
|
|
|
364
|
|
||
Comprehensive (loss) income
|
$
|
(22,425
|
)
|
|
$
|
(7,778
|
)
|
$
|
109,929
|
|
|
$
|
177,127
|
|
|
Nine Months Ended
|
||||||
|
June 30,
|
||||||
(Thousands)
|
2016
|
|
2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net (loss) income
|
$
|
106,272
|
|
|
$
|
176,763
|
|
Adjustments to reconcile net income to cash flows from operating activities
|
|
|
|
||||
Unrealized loss (gain) on derivative instruments
|
57,910
|
|
|
(19,010
|
)
|
||
Depreciation and amortization
|
52,897
|
|
|
45,164
|
|
||
Allowance for equity used during construction
|
(3,959
|
)
|
|
(3,371
|
)
|
||
Allowance for bad debt expense
|
1,170
|
|
|
2,143
|
|
||
Deferred income taxes
|
21,655
|
|
|
36,764
|
|
||
Manufactured gas plant remediation costs
|
(5,070
|
)
|
|
(4,745
|
)
|
||
Equity in earnings of equity investees, net of distributions received
|
3,420
|
|
|
3,909
|
|
||
Cost of removal - asset retirement obligations
|
(99
|
)
|
|
(467
|
)
|
||
Contributions to postemployment benefit plans
|
(32,325
|
)
|
|
(2,466
|
)
|
||
Tax benefit from stock-based compensation
|
1,701
|
|
|
838
|
|
||
Changes in:
|
|
|
|
||||
Components of working capital
|
(93,014
|
)
|
|
88,290
|
|
||
Other noncurrent assets
|
(23,615
|
)
|
|
22,572
|
|
||
Other noncurrent liabilities
|
9,656
|
|
|
36,350
|
|
||
Cash flows from operating activities
|
96,599
|
|
|
382,734
|
|
||
CASH FLOWS (USED IN) INVESTING ACTIVITIES
|
|
|
|
||||
Expenditures for:
|
|
|
|
||||
Utility plant
|
(111,751
|
)
|
|
(96,626
|
)
|
||
Solar and wind equipment
|
(115,736
|
)
|
|
(111,588
|
)
|
||
Real estate properties and other
|
(1,466
|
)
|
|
(90
|
)
|
||
Cost of removal
|
(21,342
|
)
|
|
(19,114
|
)
|
||
Investments in equity investees
|
(8,689
|
)
|
|
(2,313
|
)
|
||
Distribution from equity investees in excess of equity in earnings
|
1,915
|
|
|
2,269
|
|
||
Withdrawal from (payment to) restricted cash construction fund
|
989
|
|
|
(1,484
|
)
|
||
Proceeds from sale of property
|
748
|
|
|
—
|
|
||
Cash flows (used in) investing activities
|
(255,332
|
)
|
|
(228,946
|
)
|
||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
|
|
|
|
||||
Net proceeds from (payments of) short-term debt
|
178,275
|
|
|
(301,000
|
)
|
||
Proceeds from long-term debt
|
125,000
|
|
|
250,000
|
|
||
Payments of long-term debt
|
(7,800
|
)
|
|
(7,227
|
)
|
||
Proceeds from sale-leaseback transaction
|
7,107
|
|
|
7,216
|
|
||
Payments of common stock dividends
|
(61,775
|
)
|
|
(57,226
|
)
|
||
Proceeds from issuance of common stock
|
12,173
|
|
|
33,659
|
|
||
Purchases of treasury stock
|
(1,008
|
)
|
|
(9,045
|
)
|
||
Tax withholding payments related to net settled stock compensation
|
(3,359
|
)
|
|
(2,136
|
)
|
||
Cash flows from (used in) financing activities
|
248,613
|
|
|
(85,759
|
)
|
||
Change in cash and cash equivalents
|
89,880
|
|
|
68,029
|
|
||
Cash and cash equivalents at beginning of period
|
4,928
|
|
|
2,151
|
|
||
Cash and cash equivalents at end of period
|
$
|
94,808
|
|
|
$
|
70,180
|
|
CHANGES IN COMPONENTS OF WORKING CAPITAL
|
|
|
|
||||
Receivables
|
$
|
9,846
|
|
|
$
|
(8,566
|
)
|
Inventories
|
1,569
|
|
|
160,809
|
|
||
Recovery of gas costs
|
(9,377
|
)
|
|
18,109
|
|
||
Gas purchases payable
|
(27,663
|
)
|
|
(47,371
|
)
|
||
Gas purchases payable - related parties
|
(410
|
)
|
|
50
|
|
||
Prepaid and accrued taxes
|
(1,422
|
)
|
|
(5,063
|
)
|
||
Accounts payable and other
|
(23,961
|
)
|
|
(26,829
|
)
|
||
Restricted broker margin accounts
|
(48,715
|
)
|
|
3,466
|
|
||
Customers' credit balances and deposits
|
2,534
|
|
|
(5,784
|
)
|
||
Other current assets
|
4,585
|
|
|
(531
|
)
|
||
Total
|
$
|
(93,014
|
)
|
|
$
|
88,290
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
|
|
|
|
||||
Cash paid for:
|
|
|
|
||||
Interest (net of amounts capitalized)
|
$
|
21,492
|
|
|
$
|
14,324
|
|
Income taxes
|
$
|
923
|
|
|
$
|
22,818
|
|
Accrued capital expenditures
|
$
|
22,105
|
|
|
$
|
30,038
|
|
(Thousands)
|
June 30,
2016 |
September 30,
2015 |
||||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
||||
Utility plant, at cost
|
$
|
2,084,003
|
|
$
|
1,908,024
|
|
Construction work in progress
|
87,206
|
|
155,553
|
|
||
Solar and wind equipment, real estate properties and other, at cost
|
610,364
|
|
481,003
|
|
||
Construction work in progress
|
62,956
|
|
77,705
|
|
||
Total property, plant and equipment
|
2,844,529
|
|
2,622,285
|
|
||
Accumulated depreciation and amortization, utility plant
|
(465,839
|
)
|
(437,097
|
)
|
||
Accumulated depreciation and amortization, solar and wind equipment, real estate properties and other
|
(74,666
|
)
|
(56,927
|
)
|
||
Property, plant and equipment, net
|
2,304,024
|
|
2,128,261
|
|
||
CURRENT ASSETS
|
|
|
||||
Cash and cash equivalents
|
94,808
|
|
4,928
|
|
||
Customer accounts receivable
|
|
|
||||
Billed
|
144,077
|
|
155,273
|
|
||
Unbilled revenues
|
6,300
|
|
6,372
|
|
||
Allowance for doubtful accounts
|
(4,937
|
)
|
(5,189
|
)
|
||
Regulatory assets
|
25,122
|
|
24,258
|
|
||
Gas in storage, at average cost
|
159,073
|
|
163,905
|
|
||
Materials and supplies, at average cost
|
10,401
|
|
7,138
|
|
||
Prepaid and accrued taxes
|
37,719
|
|
36,810
|
|
||
Derivatives, at fair value
|
40,147
|
|
40,743
|
|
||
Restricted broker margin accounts
|
57,606
|
|
12,990
|
|
||
Other
|
34,402
|
|
40,987
|
|
||
Total current assets
|
604,718
|
|
488,215
|
|
||
NONCURRENT ASSETS
|
|
|
||||
Investments in equity method investees
|
138,998
|
|
132,002
|
|
||
Regulatory assets
|
447,226
|
|
410,155
|
|
||
Derivatives, at fair value
|
3,649
|
|
4,334
|
|
||
Available for sale securities
|
64,377
|
|
59,475
|
|
||
Other
|
69,798
|
|
61,915
|
|
||
Total noncurrent assets
|
724,048
|
|
667,881
|
|
||
Total assets
|
$
|
3,632,790
|
|
$
|
3,284,357
|
|
(Thousands)
|
June 30,
2016 |
September 30,
2015 |
||||
CAPITALIZATION
|
|
|
||||
Common stock, $2.50 par value; authorized 150,000,000 shares;
outstanding June 30, 2016 — 86,076,322; September 30, 2015 — 85,531,423 |
$
|
221,642
|
|
$
|
220,838
|
|
Premium on common stock
|
215,590
|
|
209,931
|
|
||
Accumulated other comprehensive (loss), net of tax
|
(5,737
|
)
|
(9,394
|
)
|
||
Treasury stock at cost and other;
shares June 30, 2016 — 2,580,520; September 30, 2015 — 2,804,847 |
(82,745
|
)
|
(92,164
|
)
|
||
Retained earnings
|
822,132
|
|
777,745
|
|
||
Common stock equity
|
1,170,882
|
|
1,106,956
|
|
||
Long-term debt
|
967,802
|
|
843,595
|
|
||
Total capitalization
|
2,138,684
|
|
1,950,551
|
|
||
CURRENT LIABILITIES
|
|
|
||||
Current maturities of long-term debt
|
11,362
|
|
11,138
|
|
||
Short-term debt
|
244,625
|
|
66,350
|
|
||
Gas purchases payable
|
123,752
|
|
151,375
|
|
||
Gas purchases payable to related parties
|
1,151
|
|
1,601
|
|
||
Accounts payable and other
|
70,408
|
|
99,651
|
|
||
Dividends payable
|
20,658
|
|
20,528
|
|
||
Accrued taxes
|
813
|
|
1,326
|
|
||
Regulatory liabilities
|
6,572
|
|
12,154
|
|
||
New Jersey clean energy program
|
16,507
|
|
14,293
|
|
||
Derivatives, at fair value
|
82,300
|
|
32,791
|
|
||
Broker margin accounts
|
—
|
|
4,103
|
|
||
Customers' credit balances and deposits
|
23,324
|
|
20,790
|
|
||
Total current liabilities
|
601,472
|
|
436,100
|
|
||
NONCURRENT LIABILITIES
|
|
|
||||
Deferred income taxes
|
469,119
|
|
444,935
|
|
||
Deferred investment tax credits
|
4,698
|
|
4,940
|
|
||
Deferred gain
|
28,722
|
|
29,334
|
|
||
Derivatives, at fair value
|
24,567
|
|
5,529
|
|
||
Manufactured gas plant remediation
|
175,310
|
|
180,400
|
|
||
Postemployment employee benefit liability
|
108,655
|
|
137,414
|
|
||
Regulatory liabilities
|
50,664
|
|
67,533
|
|
||
Asset retirement obligation
|
21,676
|
|
19,145
|
|
||
Other
|
9,223
|
|
8,476
|
|
||
Total noncurrent liabilities
|
892,634
|
|
897,706
|
|
||
Commitments and contingent liabilities (Note 12)
|
|
|
|
|||
Total capitalization and liabilities
|
$
|
3,632,790
|
|
$
|
3,284,357
|
|
1.
|
NATURE OF THE BUSINESS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
June 30,
2016 |
September 30,
2015 |
||||||||||
($ in thousands)
|
Gas in Storage
|
|
Bcf
|
Gas in Storage
|
|
Bcf
|
||||||
NJRES
|
|
$
|
110,782
|
|
64.0
|
|
|
$
|
93,696
|
|
44.6
|
|
NJNG
|
|
48,291
|
|
16.0
|
|
|
70,209
|
|
21.4
|
|
||
Total
|
|
$
|
159,073
|
|
80.0
|
|
|
$
|
163,905
|
|
66.0
|
|
(Thousands)
|
June 30,
2016 |
|
September 30,
2015 |
||||||||
NJRES
|
$
|
90,643
|
|
63
|
%
|
|
$
|
107,461
|
|
69
|
%
|
NJNG
(1)
|
46,885
|
|
33
|
|
|
41,130
|
|
26
|
|
||
NJRCEV
|
1,714
|
|
1
|
|
|
1,084
|
|
1
|
|
||
NJRHS and other
|
4,835
|
|
3
|
|
|
5,598
|
|
4
|
|
||
Total
|
$
|
144,077
|
|
100
|
%
|
|
$
|
155,273
|
|
100
|
%
|
(1)
|
Does not include unbilled revenues of
$6.3 million
and
$6.4 million
as of
June 30, 2016
and
September 30, 2015
, respectively.
|
(Thousands)
|
As Previously Reported
|
|
Effect of Change
|
|
As Adjusted
|
||||||
Assets
|
|
|
|
|
|
||||||
Deferred taxes (current)
|
$
|
56,296
|
|
|
$
|
(56,296
|
)
|
|
$
|
—
|
|
Total current assets
|
$
|
544,511
|
|
|
$
|
(56,296
|
)
|
|
$
|
488,215
|
|
Other noncurrent assets
|
$
|
60,300
|
|
|
$
|
1,615
|
|
|
$
|
61,915
|
|
Total noncurrent assets
|
$
|
666,266
|
|
|
$
|
1,615
|
|
|
$
|
667,881
|
|
Total assets
|
$
|
3,339,038
|
|
|
$
|
(54,681
|
)
|
|
$
|
3,284,357
|
|
Capitalization and Liabilities
|
|
|
|
|
|
||||||
Deferred income taxes
|
$
|
499,616
|
|
|
$
|
(54,681
|
)
|
|
$
|
444,935
|
|
Total noncurrent liabilities
|
$
|
952,387
|
|
|
$
|
(54,681
|
)
|
|
$
|
897,706
|
|
Total capitalization and liabilities
|
$
|
3,339,038
|
|
|
$
|
(54,681
|
)
|
|
$
|
3,284,357
|
|
(Thousands)
|
As Previously Reported
|
|
Effect of Change
|
|
As Adjusted
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Tax benefit from stock based compensation
|
$
|
—
|
|
|
$
|
838
|
|
|
$
|
838
|
|
Other noncurrent liabilities
|
$
|
34,214
|
|
|
$
|
2,136
|
|
|
$
|
36,350
|
|
Net cash flows provided from operating activities
|
$
|
379,760
|
|
|
$
|
2,974
|
|
|
$
|
382,734
|
|
Cash flows (used in) financing activities
|
|
|
|
|
|
||||||
Tax benefit from stock options exercised
|
$
|
838
|
|
|
$
|
(838
|
)
|
|
$
|
—
|
|
Tax withholding payments related to net settled stock compensation
|
$
|
—
|
|
|
$
|
(2,136
|
)
|
|
$
|
(2,136
|
)
|
Cash flows (used in) financing activities
|
$
|
(82,785
|
)
|
|
$
|
(2,974
|
)
|
|
$
|
(85,759
|
)
|
3.
|
REGULATION
|
(Thousands)
|
June 30,
2016 |
September 30,
2015 |
||||
Regulatory assets-current
|
|
|
||||
Conservation Incentive Program
|
$
|
3,795
|
|
$
|
—
|
|
New Jersey Clean Energy Program
|
16,507
|
|
14,293
|
|
||
Derivatives at fair value, net
|
4,820
|
|
9,965
|
|
||
Total current regulatory assets
|
$
|
25,122
|
|
$
|
24,258
|
|
Regulatory assets-noncurrent
|
|
|
||||
Environmental remediation costs
|
|
|
||||
Expended, net of recoveries
|
$
|
18,543
|
|
$
|
18,886
|
|
Liability for future expenditures
|
175,310
|
|
180,400
|
|
||
Deferred income taxes
|
19,635
|
|
17,460
|
|
||
Derivatives at fair value, net
|
22,632
|
|
5,153
|
|
||
SAVEGREEN
|
24,108
|
|
26,882
|
|
||
Postemployment and other benefit costs
|
134,202
|
|
140,636
|
|
||
Deferred Superstorm Sandy costs
|
15,201
|
|
15,201
|
|
||
Conservation Incentive Program
|
30,018
|
|
—
|
|
||
Other noncurrent regulatory assets
|
7,577
|
|
5,537
|
|
||
Total noncurrent regulatory assets
|
$
|
447,226
|
|
$
|
410,155
|
|
Regulatory liability-current
|
|
|
||||
Conservation Incentive Program
|
$
|
—
|
|
$
|
5,167
|
|
Overrecovered gas costs
|
6,572
|
|
6,987
|
|
||
Total current regulatory liabilities
|
$
|
6,572
|
|
$
|
12,154
|
|
Regulatory liabilities-noncurrent
|
|
|
||||
Cost of removal obligation
|
$
|
38,179
|
|
$
|
54,880
|
|
Derivatives at fair value, net
|
293
|
|
—
|
|
||
New Jersey Clean Energy Program
|
12,020
|
|
11,956
|
|
||
Other noncurrent regulatory liabilities
|
172
|
|
697
|
|
||
Total noncurrent regulatory liabilities
|
$
|
50,664
|
|
$
|
67,533
|
|
•
|
On
November 13, 2015
, NJNG filed a base rate petition with the BPU to increase its base tariff rates in the amount of
$147.6 million
, including an extension of the SAFE Program for an additional five years with an estimated cost of approximately
$200 million
, excluding AFUDC. On
July 20, 2016
, an update was filed to include twelve months of actual financial information, which revised the requested base tariff rates increase to
$112.9 million
. NJNG is currently in discussions with the BPU and new base rates are expected to be effective in early fiscal 2017.
|
•
|
On
May 4, 2016
, NJNG supplemented its base rate case testimony supporting its November 2015 petition, which amended the accounting treatment and noted that the SRL project would not be completed by December 31, 2016. In addition, the Company sought to modify the rate treatment to include the September 30, 2016 balance of SRL project spending and rate adjustments on a quarterly basis until the project is complete, which was included in its
May 20, 2016
base rate case
update.
|
•
|
On
May 20, 2016
, NJNG included a proposal in its base rate case to recover certain capital costs and incremental operation and maintenance costs related to a
March 2016
BPU Order regarding new cyber security requirements. This proposal was updated on
July 20, 2016
.
|
•
|
On
October 15, 2015
, the BPU issued an order approving the continuation of the BGSS Incentive Programs with modification to the storage incentive program, beginning with the 2015 storage injection period, and termination of the FRM Program, effective
November 1, 2015
.
|
•
|
On
October 27, 2015
, NJNG notified the BPU that bill credits to residential and small commercial customers would be issued from November 2015 through February 2016. A total of
$61.6 million
in bill credits were issued during that period.
|
•
|
On
February 24, 2016
, the BPU approved on a final basis NJNG's
June 2015
BGSS/CIP filing which continues its existing BGSS rate and adjusted its CIP rates resulting in a
.08 percent
increase to the average residential heat customer's bill effective
October 1, 2015
.
|
•
|
On
June 1, 2016
, NJNG filed a petition with the BPU to increase its CIP rates resulting in an
8.2 percent
increase to the average residential heat customer’s bill and to decrease its BGSS rate for residential and small commercial customers resulting in a
5.5 percent
decrease to the average residential heat customer’s bill, effective
October 1, 2016
. This petition included proposed bill credits to residential and small commercial customers during the months of November 2016 through February 2017, as a result of a decline in the wholesale price of natural gas. The amount of the bill credits will be determined during fiscal 2017.
|
•
|
On
October 15, 2015
, the BPU approved a base rate increase related to NJ RISE allowing NJNG to recover costs through
July 31, 2015
, resulting in a
.07 percent
increase to the average residential heat customer's bill, effective
November 1, 2015
.
|
•
|
On
December 24, 2015
, NJNG filed an SBC petition with the BPU to increase the RA factor, to decrease the NJCEP factor and to request approval of its remediation expenses incurred through
June 30, 2015
, resulting in an overall decrease of
.8 percent
to the average residential heat customer's bill. On
June 29, 2016
, the BPU approved the Company’s request to modify its rates as proposed, effective
July 9, 2016
.
|
•
|
On
January 27, 2016
, the BPU approved NJNG’s
July 2015
petition to maintain its existing SAVEGREEN recovery rate. On
April 15, 2016
, NJNG filed a petition with the BPU to extend its current program, which was set to expire on
July 31, 2017
, to
December 31, 2018
, which was approved by the BPU on
June 29, 2016
. On
May 26, 2016
, NJNG submitted its 2016 SAVEGREEN rate recovery filing to maintain its existing SAVEGREEN recovery rate.
|
•
|
On
January 27, 2016
, the BPU approved NJNG's proposed SRL pipeline installation, operation and route selection, as modified by NJNG, including specific requirements regarding permitting, safety and integrity assessment. On
March 18, 2016
, the BPU approved the application for the SRL to be exempt from municipal land use ordinances.
|
•
|
On
June 23, 2016
, NJNG submitted its annual USF compliance filing proposing to increase the statewide USF rate, resulting in a
.2 percent
increase to the average residential heat customer’s bill, effective
October 1, 2016
.
|
4.
|
DERIVATIVE INSTRUMENTS
|
(Thousands)
|
Amounts Presented in Balance Sheets
(1)
|
Offsetting Derivative Instruments
(2)
|
Financial Collateral Received/Pledged
(3)
|
Net Amounts
(4)
|
||||||||||||
As of June 30, 2016:
|
|
|
|
|
|
|
|
|
||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
||||||||
NJRES
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
8,460
|
|
|
$
|
(3,431
|
)
|
|
$
|
—
|
|
|
$
|
5,029
|
|
Financial commodity contracts
|
|
33,577
|
|
|
(31,848
|
)
|
|
—
|
|
|
1,729
|
|
||||
Total NJRES
|
|
$
|
42,037
|
|
|
$
|
(35,279
|
)
|
|
$
|
—
|
|
|
$
|
6,758
|
|
NJNG
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
130
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
128
|
|
Financial commodity contracts
|
|
1,629
|
|
|
(1,629
|
)
|
|
—
|
|
|
—
|
|
||||
Total NJNG
|
|
$
|
1,759
|
|
|
$
|
(1,631
|
)
|
|
$
|
—
|
|
|
$
|
128
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
NJRES
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
9,950
|
|
|
$
|
(3,432
|
)
|
|
$
|
—
|
|
|
$
|
6,518
|
|
Financial commodity contracts
|
|
68,004
|
|
|
(31,848
|
)
|
|
(36,156
|
)
|
|
—
|
|
||||
Total NJRES
|
|
$
|
77,954
|
|
|
$
|
(35,280
|
)
|
|
$
|
(36,156
|
)
|
|
$
|
6,518
|
|
NJNG
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
307
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
305
|
|
Financial commodity contracts
|
|
5,974
|
|
|
(1,629
|
)
|
|
(4,345
|
)
|
|
—
|
|
||||
Interest rate contracts
|
|
22,632
|
|
|
—
|
|
|
—
|
|
|
22,632
|
|
||||
Total NJNG
|
|
$
|
28,913
|
|
|
$
|
(1,631
|
)
|
|
$
|
(4,345
|
)
|
|
$
|
22,937
|
|
As of September 30, 2015:
|
|
|
|
|
|
|
|
|
||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
||||||||
NJRES
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
6,562
|
|
|
$
|
(1,326
|
)
|
|
$
|
—
|
|
|
$
|
5,236
|
|
Financial commodity contracts
|
|
38,308
|
|
|
(13,734
|
)
|
|
3,841
|
|
|
28,415
|
|
||||
Total NJRES
|
|
$
|
44,870
|
|
|
$
|
(15,060
|
)
|
|
$
|
3,841
|
|
|
$
|
33,651
|
|
NJNG
|
|
|
|
|
|
|
|
|
||||||||
Financial commodity contracts
|
|
$
|
207
|
|
|
$
|
(207
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
NJRES
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
9,271
|
|
|
$
|
(1,326
|
)
|
|
$
|
(1,200
|
)
|
|
$
|
6,745
|
|
Financial commodity contracts
|
|
13,733
|
|
|
(13,733
|
)
|
|
—
|
|
|
—
|
|
||||
Total NJRES
|
|
$
|
23,004
|
|
|
$
|
(15,059
|
)
|
|
$
|
(1,200
|
)
|
|
$
|
6,745
|
|
NJNG
|
|
|
|
|
|
|
|
|
||||||||
Financial commodity contracts
|
|
$
|
11,088
|
|
|
$
|
(207
|
)
|
|
$
|
(10,881
|
)
|
|
$
|
—
|
|
Interest rate contracts
|
|
4,228
|
|
|
—
|
|
|
—
|
|
|
4,228
|
|
||||
Total NJNG
|
|
$
|
15,316
|
|
|
$
|
(207
|
)
|
|
$
|
(10,881
|
)
|
|
$
|
4,228
|
|
(1)
|
Derivative assets and liabilities are presented on a gross basis in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20.
|
(2)
|
Offsetting derivative instruments include: transactions with NAESB netting election, transactions held by FCM's with net margining and transactions with ISDA netting.
|
(3)
|
Financial collateral includes cash balances at FCMs as well as cash received from or pledged to other counterparties.
|
(4)
|
Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20.
|
(Thousands)
|
Location of gain (loss) recognized in income on derivatives
|
Amount of gain (loss) recognized
in income on derivatives
|
|||||||||||||
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
|
|
June 30,
|
June 30,
|
||||||||||||
Derivatives not designated as hedging instruments:
|
2016
|
|
2015
|
2016
|
|
2015
|
|||||||||
NJRES:
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
Operating revenues
|
$
|
3,997
|
|
|
$
|
6,183
|
|
$
|
24,999
|
|
|
$
|
21,130
|
|
Physical commodity contracts
|
Gas purchases
|
(2,463
|
)
|
|
(11,988
|
)
|
(29,283
|
)
|
|
(21,781
|
)
|
||||
Financial commodity contracts
|
Gas purchases
|
(39,653
|
)
|
|
2,264
|
|
23,443
|
|
|
92,781
|
|
||||
Total unrealized and realized (losses) gains
|
$
|
(38,119
|
)
|
|
$
|
(3,541
|
)
|
$
|
19,159
|
|
|
$
|
92,130
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
June 30,
|
||||||||||||
(Thousands)
|
2016
|
|
2015
|
2016
|
|
2015
|
||||||||
NJNG:
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
$
|
(236
|
)
|
|
$
|
—
|
|
$
|
(14,764
|
)
|
|
$
|
—
|
|
Financial commodity contracts
|
4,937
|
|
|
(199
|
)
|
(5,849
|
)
|
|
(24,676
|
)
|
||||
Interest rate contracts
|
(9,700
|
)
|
|
2,905
|
|
(18,405
|
)
|
|
2,905
|
|
||||
Total unrealized and realized (losses) gains
|
$
|
(4,999
|
)
|
|
$
|
2,706
|
|
$
|
(39,018
|
)
|
|
$
|
(21,771
|
)
|
|
|
|
Volume (Bcf)
|
||||
|
|
|
June 30,
2016 |
|
September 30,
2015 |
||
NJNG
|
Futures
|
|
14.6
|
|
|
25.8
|
|
|
Physical
|
|
3.5
|
|
|
—
|
|
NJRES
|
Futures
|
|
(97.6
|
)
|
|
(91.1
|
)
|
|
Options
|
|
5.7
|
|
|
1.2
|
|
|
Physical
|
|
123.7
|
|
|
48.2
|
|
(Thousands)
|
Balance Sheet Location
|
June 30,
2016 |
September 30,
2015 |
||||
NJNG
|
Broker margin - Current assets
|
$
|
6,701
|
|
$
|
12,990
|
|
NJRES
|
Broker margin - Current assets
|
$
|
50,905
|
|
$
|
—
|
|
|
Broker margin - Current (liabilities)
|
$
|
—
|
|
$
|
(4,103
|
)
|
(Thousands)
|
Gross Credit Exposure
|
||||
Investment grade
|
|
$
|
91,603
|
|
|
Noninvestment grade
|
|
12,590
|
|
|
|
Internally rated investment grade
|
|
9,433
|
|
|
|
Internally rated noninvestment grade
|
|
23,271
|
|
|
|
Total
|
|
$
|
136,897
|
|
|
5.
|
FAIR VALUE
|
(Thousands)
|
June 30,
2016 |
September 30,
2015 |
||||
Carrying value
(1)
|
$
|
932,845
|
|
$
|
807,845
|
|
Fair market value
|
$
|
971,841
|
|
$
|
817,319
|
|
(1)
|
Excludes
capital leases of
$46.3 million
and
$46.9 million
as of
June 30, 2016
and
September 30, 2015
, respectively.
|
Level 1
|
Unadjusted quoted prices for identical assets or liabilities in active markets. NJR's Level 1 assets and liabilities include exchange traded natural gas futures and options contracts, listed equities and money market funds.
Exchange traded futures and options contracts include all energy contracts traded on the NYMEX/CME and ICE that NJR refers internally to as basis swaps, fixed swaps, futures and financial options that are cleared through a FCM.
|
Level 2
|
Other significant observable inputs such as interest rates or
price data, including both commodity and basis pricing that is observed either directly or indirectly from publications or pricing services. NJR's Level 2 assets and liabilities include over-the-counter physical forward commodity contracts and swap contracts, SREC forward sales or derivatives that are initially valued using observable quotes and are subsequently adjusted to include time value, credit risk or estimated transport pricing components for which no basis price is available.
Level 2 financial derivatives consist of transactions with non-FCM counterparties (basis swaps, fixed swaps and/or options). NJNG's treasury lock is also considered Level 2 as valuation is based on quoted market interest and swap rates as inputs to the valuation model. Inputs are verifiable and do not require significant management judgment. For some physical commodity contracts the Company utilizes transportation tariff rates that are publicly available and that it considers to be observable inputs that are equivalent to market data received from an independent source. There are no significant judgments or adjustments applied to the transportation tariff inputs and no market perspective is required. Even if the transportation tariff input were considered to be a “model,” it would still be considered to be a Level 2 input as the data is:
|
•
|
widely accepted and public;
|
•
|
non-proprietary and sourced from an independent third party; and
|
•
|
observable and published.
|
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.
|
|
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 June 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
8,590
|
|
|
|
$
|
—
|
|
|
$
|
8,590
|
|
Financial commodity contracts
|
|
35,206
|
|
|
|
—
|
|
|
|
—
|
|
|
35,206
|
|
||||
Available for sale equity securities - energy industry
|
|
64,377
|
|
|
|
—
|
|
|
|
—
|
|
|
64,377
|
|
||||
Other
(1)
|
|
1,567
|
|
|
|
—
|
|
|
|
—
|
|
|
1,567
|
|
||||
Total assets at fair value
|
|
$
|
101,150
|
|
|
|
$
|
8,590
|
|
|
|
$
|
—
|
|
|
$
|
109,740
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
10,257
|
|
|
|
$
|
—
|
|
|
$
|
10,257
|
|
Financial commodity contracts
|
|
73,978
|
|
|
|
—
|
|
|
|
—
|
|
|
73,978
|
|
||||
Interest rate contracts
|
|
—
|
|
|
|
22,632
|
|
|
|
—
|
|
|
22,632
|
|
||||
Total liabilities at fair value
|
|
$
|
73,978
|
|
|
|
$
|
32,889
|
|
|
|
$
|
—
|
|
|
$
|
106,867
|
|
As of September 30, 2015:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
6,572
|
|
|
|
$
|
—
|
|
|
$
|
6,572
|
|
Financial commodity contracts
|
|
38,515
|
|
|
|
—
|
|
|
|
—
|
|
|
38,515
|
|
||||
Available for sale equity securities - energy industry
|
|
59,475
|
|
|
|
—
|
|
|
|
—
|
|
|
59,475
|
|
||||
Other
(1)
|
|
1,572
|
|
|
|
—
|
|
|
|
—
|
|
|
1,572
|
|
||||
Total assets at fair value
|
|
$
|
99,562
|
|
|
|
$
|
6,572
|
|
|
|
$
|
—
|
|
|
$
|
106,134
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
9,281
|
|
|
|
$
|
—
|
|
|
$
|
9,281
|
|
Financial commodity contracts
|
|
24,821
|
|
|
|
—
|
|
|
|
—
|
|
|
24,821
|
|
||||
Interest rate contracts
|
|
—
|
|
|
|
4,228
|
|
|
|
—
|
|
|
4,228
|
|
||||
Total liabilities at fair value
|
|
$
|
24,821
|
|
|
|
$
|
13,509
|
|
|
|
$
|
—
|
|
|
$
|
38,330
|
|
(1)
|
Includes various money market funds.
|
6.
|
INVESTMENTS IN EQUITY METHOD INVESTEES
|
(Thousands)
|
June 30,
2016 |
September 30,
2015 |
||||
Steckman Ridge
(1)
|
$
|
123,626
|
|
$
|
125,649
|
|
PennEast
|
15,372
|
|
6,353
|
|
||
Total
|
$
|
138,998
|
|
$
|
132,002
|
|
(1)
|
Includes loans with a total outstanding principal balance of
$70.4 million
for both
June 30, 2016
and
September 30, 2015
. The loans accrue interest at a variable rate that resets quarterly and are due October 1, 2023.
|
7.
|
EARNINGS PER SHARE
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands, except per share amounts)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Net (loss) income, as reported
|
$
|
(17,363
|
)
|
$
|
(7,460
|
)
|
$
|
106,272
|
|
$
|
176,763
|
|
Basic earnings per share
|
|
|
|
|
||||||||
Weighted average shares of common stock outstanding-basic
|
85,960
|
|
85,449
|
|
85,823
|
|
85,110
|
|
||||
Basic (loss) earnings per common share
|
$(.20)
|
$(.09)
|
$1.24
|
$2.08
|
||||||||
Diluted earnings per share
|
|
|
|
|
||||||||
Weighted average shares of common stock outstanding-basic
|
85,960
|
|
85,449
|
|
85,823
|
|
85,110
|
|
||||
Incremental shares
(1)
|
—
|
|
—
|
|
868
|
|
1,018
|
|
||||
Weighted average shares of common stock outstanding-diluted
|
85,960
|
|
85,449
|
|
86,691
|
|
86,128
|
|
||||
Diluted (loss) earnings per common share
(2)
|
$(.20)
|
$(.09)
|
$1.23
|
$2.05
|
(1)
|
Incremental shares consist primarily of unvested stock awards and performance shares.
|
(2)
|
Since there was a net loss for the three months ended
June 30, 2016
, and
2015
, incremental shares of
897
and
1,018
, respectively, were not included in the computation of diluted loss per common share, as their effect would have been anti-dilutive.
There were
no
anti-dilutive shares excluded from the calculation of diluted earnings per share for the
nine months ended
June 30, 2016
and
2015
.
|
8.
|
COMMON STOCK EQUITY
|
(Thousands)
|
Number of Shares
|
Common Stock
|
Premium on Common Stock
|
Accumulated Other Comprehensive (Loss) Income
|
Treasury Stock And Other
|
Retained Earnings
|
Total
|
|||||||||||||||
Balance at September 30, 2015
|
85,531
|
|
$
|
220,838
|
|
$
|
209,931
|
|
|
$
|
(9,394
|
)
|
|
$
|
(92,164
|
)
|
$
|
777,745
|
|
$
|
1,106,956
|
|
Net income
|
|
|
|
|
|
|
|
106,272
|
|
106,272
|
|
|||||||||||
Other comprehensive income
|
|
|
|
|
3,657
|
|
|
|
|
3,657
|
|
|||||||||||
Common stock issued:
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Incentive plan
|
321
|
|
804
|
|
8,457
|
|
|
|
|
|
|
|
9,261
|
|
||||||||
Dividend reinvestment plan
|
368
|
|
|
(2,743
|
)
|
|
|
|
14,829
|
|
|
12,086
|
|
|||||||||
Cash dividend declared ($.72 per share)
|
|
|
|
|
|
|
|
(61,885
|
)
|
(61,885
|
)
|
|||||||||||
Treasury stock and other
|
(144
|
)
|
|
(55
|
)
|
|
|
|
(5,410
|
)
|
|
(5,465
|
)
|
|||||||||
Balance at June 30, 2016
|
86,076
|
|
$
|
221,642
|
|
$
|
215,590
|
|
|
$
|
(5,737
|
)
|
|
$
|
(82,745
|
)
|
$
|
822,132
|
|
$
|
1,170,882
|
|
(Thousands)
|
Available for Sale Securities
|
Cash Flow Hedges
|
Postemployment Benefit Obligation
|
Total
|
|||||||||||
Balance at September 30, 2015
|
$
|
6,385
|
|
|
$
|
—
|
|
|
$
|
(15,779
|
)
|
|
$
|
(9,394
|
)
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), before reclassifications, net of tax of $(2,014), $10, $0, $(2,004)
|
2,888
|
|
|
(17
|
)
|
|
—
|
|
|
2,871
|
|
||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(10), $(523), $(533)
|
—
|
|
|
17
|
|
(1)
|
769
|
|
(2)
|
786
|
|
||||
Net current-period other comprehensive income, net of tax of ($2,014), $0, $(523), $(2,537)
|
2,888
|
|
|
—
|
|
|
769
|
|
|
3,657
|
|
||||
Balance at June 30, 2016
|
$
|
9,273
|
|
|
$
|
—
|
|
|
$
|
(15,010
|
)
|
|
$
|
(5,737
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance at September 30, 2014
|
$
|
4,782
|
|
|
$
|
(93
|
)
|
|
$
|
(10,283
|
)
|
|
$
|
(5,594
|
)
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss), before reclassifications, net of tax of $319, $146, $0, $465
|
(461
|
)
|
|
(256
|
)
|
|
—
|
|
|
(717
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(202), $(506), $(708)
|
—
|
|
|
349
|
|
(1)
|
732
|
|
(2)
|
1,081
|
|
||||
Net current-period other comprehensive (loss) income, net of tax of $319, $(56), $(506), $(243)
|
(461
|
)
|
|
93
|
|
|
732
|
|
|
364
|
|
||||
Balance as of June 30, 2015
|
$
|
4,321
|
|
|
$
|
—
|
|
|
$
|
(9,551
|
)
|
|
$
|
(5,230
|
)
|
(1)
|
Consists of realized losses related to foreign currency derivatives, which are reclassified to gas purchases on the Unaudited Condensed Consolidated Statements of Operations.
|
(2)
|
Included in the computation of net periodic pension cost, a component of operations and maintenance expense on the Unaudited Condensed Consolidated Statements of Operations.
|
9.
|
DEBT
|
(Thousands)
|
June 30,
2016 |
|
September 30,
2015 |
|
Expiration Dates
|
||||
NJR
|
|
|
|
|
|
||||
Bank revolving credit facilities
(1)
|
$
|
425,000
|
|
|
$
|
425,000
|
|
|
September 2020
|
Notes outstanding at end of period
|
$
|
244,625
|
|
|
$
|
39,350
|
|
|
|
Weighted average interest rate at end of period
|
1.36
|
%
|
|
1.17
|
%
|
|
|
||
Amount available at end of period
(2)
|
$
|
168,977
|
|
|
$
|
369,176
|
|
|
|
Bank revolving credit facilities
(3)
|
$
|
—
|
|
|
$
|
100,000
|
|
|
October 2015
|
Amount available at end of period
|
$
|
—
|
|
|
$
|
100,000
|
|
|
|
NJNG
|
|
|
|
|
|
||||
Bank revolving credit facilities
(1)
|
$
|
250,000
|
|
|
$
|
250,000
|
|
|
May 2019
|
Commercial paper outstanding at end of period
|
$
|
—
|
|
|
$
|
27,000
|
|
|
|
Weighted average interest rate at end of period
|
—
|
%
|
|
.20
|
%
|
|
|
||
Amount available at end of period
(4)
|
$
|
249,269
|
|
|
$
|
222,269
|
|
|
|
(1)
|
Committed credit facilities, which require commitment fees on the unused amounts.
|
(2)
|
Letters of credit outstanding total
$11.4 million
and
$16.5 million
as of
June 30, 2016
and
September 30, 2015
, respectively, which reduces amount available by the same amount.
|
(3)
|
Uncommitted credit facilities, which require no commitment fees.
|
(4)
|
Letters of credit outstanding total
$731,000
as of
June 30, 2016
and
September 30, 2015
, which reduces the amount available by the same amount.
|
10.
|
EMPLOYEE BENEFIT PLANS
|
|
Pension
|
OPEB
|
||||||||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||||||||
|
June 30,
|
June 30,
|
June 30,
|
June 30,
|
||||||||||||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
||||||||||||||||
Service cost
|
$
|
1,897
|
|
$
|
1,872
|
|
$
|
5,693
|
|
$
|
5,614
|
|
$
|
1,130
|
|
$
|
1,063
|
|
$
|
3,391
|
|
$
|
3,190
|
|
Interest cost
|
2,836
|
|
2,549
|
|
8,507
|
|
7,649
|
|
1,564
|
|
1,434
|
|
4,692
|
|
4,304
|
|
||||||||
Expected return on plan assets
|
(5,029
|
)
|
(4,272
|
)
|
(15,088
|
)
|
(12,817
|
)
|
(1,211
|
)
|
(1,245
|
)
|
(3,633
|
)
|
(3,733
|
)
|
||||||||
Recognized actuarial loss
|
1,820
|
|
1,747
|
|
5,461
|
|
5,239
|
|
819
|
|
737
|
|
2,456
|
|
2,208
|
|
||||||||
Prior service cost amortization
|
28
|
|
28
|
|
83
|
|
83
|
|
(91
|
)
|
(91
|
)
|
(273
|
)
|
(273
|
)
|
||||||||
Net periodic benefit cost
|
$
|
1,552
|
|
$
|
1,924
|
|
$
|
4,656
|
|
$
|
5,768
|
|
$
|
2,211
|
|
$
|
1,898
|
|
$
|
6,633
|
|
$
|
5,696
|
|
11.
|
INCOME TAXES
|
12.
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
(Thousands)
|
2016
|
2017
|
2018
|
2019
|
2020
|
Thereafter
|
||||||||||||
NJRES:
|
|
|
|
|
|
|
||||||||||||
Natural gas purchases
|
$
|
139,097
|
|
$
|
193,138
|
|
$
|
104,064
|
|
$
|
57,868
|
|
$
|
—
|
|
$
|
—
|
|
Storage demand fees
|
11,303
|
|
32,816
|
|
14,582
|
|
8,104
|
|
6,258
|
|
7,308
|
|
||||||
Pipeline demand fees
|
27,867
|
|
60,009
|
|
23,660
|
|
5,699
|
|
2,923
|
|
3,815
|
|
||||||
Sub-total NJRES
|
$
|
178,267
|
|
$
|
285,963
|
|
$
|
142,306
|
|
$
|
71,671
|
|
$
|
9,181
|
|
$
|
11,123
|
|
NJNG:
|
|
|
|
|
|
|
||||||||||||
Natural gas purchases
|
$
|
19,170
|
|
$
|
80,193
|
|
$
|
39,226
|
|
$
|
41,658
|
|
$
|
43,611
|
|
$
|
104,378
|
|
Storage demand fees
|
7,255
|
|
29,131
|
|
22,255
|
|
12,834
|
|
5,776
|
|
—
|
|
||||||
Pipeline demand fees
|
10,351
|
|
66,104
|
|
71,048
|
|
88,130
|
|
89,925
|
|
818,407
|
|
||||||
Sub-total NJNG
|
$
|
36,776
|
|
$
|
175,428
|
|
$
|
132,529
|
|
$
|
142,622
|
|
$
|
139,312
|
|
$
|
922,785
|
|
Total
(1)
|
$
|
215,043
|
|
$
|
461,391
|
|
$
|
274,835
|
|
$
|
214,293
|
|
$
|
148,493
|
|
$
|
933,908
|
|
(1)
|
Does not include amounts related to intercompany asset management agreements between NJRES and NJNG.
|
13.
|
BUSINESS SEGMENT AND OTHER OPERATIONS DATA
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Operating revenues
|
|
|
|
|
||||||||
Natural Gas Distribution
|
|
|
|
|
||||||||
External customers
|
$
|
119,206
|
|
$
|
116,307
|
|
$
|
513,348
|
|
$
|
699,737
|
|
Energy Services
|
|
|
|
|
||||||||
External customers
(1)
|
247,633
|
|
320,221
|
|
840,518
|
|
1,546,890
|
|
||||
Intercompany
|
2,674
|
|
1,554
|
|
8,440
|
|
60,777
|
|
||||
Clean Energy Ventures
|
|
|
|
|
||||||||
External customers
|
12,703
|
|
7,861
|
|
28,159
|
|
18,164
|
|
||||
Subtotal
|
382,216
|
|
445,943
|
|
1,390,465
|
|
2,325,568
|
|
||||
Home Services and Other
|
|
|
|
|
||||||||
External customers
|
13,671
|
|
14,078
|
|
29,639
|
|
30,890
|
|
||||
Intercompany
|
737
|
|
514
|
|
2,273
|
|
1,300
|
|
||||
Eliminations
|
(3,411
|
)
|
(2,068
|
)
|
(10,713
|
)
|
(62,077
|
)
|
||||
Total
|
$
|
393,213
|
|
$
|
458,467
|
|
$
|
1,411,664
|
|
$
|
2,295,681
|
|
Depreciation and amortization
|
|
|
|
|
||||||||
Natural Gas Distribution
|
$
|
12,297
|
|
$
|
10,810
|
|
$
|
35,133
|
|
$
|
32,002
|
|
Energy Services
|
23
|
|
23
|
|
69
|
|
68
|
|
||||
Clean Energy Ventures
|
6,070
|
|
4,504
|
|
17,056
|
|
12,392
|
|
||||
Midstream
|
1
|
|
1
|
|
4
|
|
4
|
|
||||
Subtotal
|
18,391
|
|
15,338
|
|
52,262
|
|
44,466
|
|
||||
Home Services and Other
|
249
|
|
238
|
|
713
|
|
714
|
|
||||
Eliminations
|
31
|
|
(2
|
)
|
(78
|
)
|
(16
|
)
|
||||
Total
|
$
|
18,671
|
|
$
|
15,574
|
|
$
|
52,897
|
|
$
|
45,164
|
|
Interest income
(2)
|
|
|
|
|
||||||||
Natural Gas Distribution
|
$
|
62
|
|
$
|
(25
|
)
|
$
|
190
|
|
$
|
75
|
|
Energy Services
|
16
|
|
250
|
|
88
|
|
263
|
|
||||
Clean Energy Ventures
|
—
|
|
—
|
|
—
|
|
22
|
|
||||
Midstream
|
395
|
|
246
|
|
1,109
|
|
727
|
|
||||
Subtotal
|
473
|
|
471
|
|
1,387
|
|
1,087
|
|
||||
Home Services and Other
|
97
|
|
13
|
|
257
|
|
214
|
|
||||
Eliminations
|
(505
|
)
|
(509
|
)
|
(1,456
|
)
|
(990
|
)
|
||||
Total
|
$
|
65
|
|
$
|
(25
|
)
|
$
|
188
|
|
$
|
311
|
|
(1)
|
Includes sales to Canada, which accounted for
2.4
and
3.6 percent
of total operating revenues during the
nine months ended
June 30, 2016
and
2015
.
|
(2)
|
Included in other income, net on the Unaudited Condensed Consolidated Statements of Operations.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Interest expense, net of capitalized interest
|
|
|
|
|
||||||||
Natural Gas Distribution
|
$
|
4,935
|
|
$
|
5,005
|
|
$
|
14,213
|
|
$
|
14,002
|
|
Energy Services
|
263
|
|
209
|
|
639
|
|
1,010
|
|
||||
Clean Energy Ventures
|
2,666
|
|
2,078
|
|
7,271
|
|
5,556
|
|
||||
Midstream
|
56
|
|
163
|
|
228
|
|
623
|
|
||||
Subtotal
|
7,920
|
|
7,455
|
|
22,351
|
|
21,191
|
|
||||
Home Services and Other
|
65
|
|
134
|
|
170
|
|
76
|
|
||||
Eliminations
|
(198
|
)
|
(262
|
)
|
(588
|
)
|
(262
|
)
|
||||
Total
|
$
|
7,787
|
|
$
|
7,327
|
|
$
|
21,933
|
|
$
|
21,005
|
|
Income tax provision (benefit)
|
|
|
|
|
||||||||
Natural Gas Distribution
|
$
|
2,015
|
|
$
|
3,754
|
|
$
|
38,232
|
|
$
|
41,698
|
|
Energy Services
|
(16,678
|
)
|
(9,958
|
)
|
(3,968
|
)
|
39,842
|
|
||||
Clean Energy Ventures
|
(2,784
|
)
|
(423
|
)
|
(28,433
|
)
|
(29,186
|
)
|
||||
Midstream
|
1,501
|
|
1,737
|
|
4,671
|
|
5,048
|
|
||||
Subtotal
|
(15,946
|
)
|
(4,890
|
)
|
10,502
|
|
57,402
|
|
||||
Home Services and Other
|
1,556
|
|
720
|
|
(1,055
|
)
|
(704
|
)
|
||||
Eliminations
|
200
|
|
(148
|
)
|
900
|
|
(5
|
)
|
||||
Total
|
$
|
(14,190
|
)
|
$
|
(4,318
|
)
|
$
|
10,347
|
|
$
|
56,693
|
|
Equity in earnings of affiliates
|
|
|
|
|
||||||||
Midstream
|
$
|
3,359
|
|
$
|
4,266
|
|
$
|
10,412
|
|
$
|
12,622
|
|
Eliminations
|
(1,102
|
)
|
(899
|
)
|
(3,347
|
)
|
(2,873
|
)
|
||||
Total
|
$
|
2,257
|
|
$
|
3,367
|
|
$
|
7,065
|
|
$
|
9,749
|
|
Net financial earnings (loss)
|
|
|
|
|
||||||||
Natural Gas Distribution
|
$
|
3,607
|
|
$
|
7,172
|
|
$
|
83,494
|
|
$
|
83,952
|
|
Energy Services
|
276
|
|
(5,270
|
)
|
27,585
|
|
47,482
|
|
||||
Clean Energy Ventures
|
2,440
|
|
(3,792
|
)
|
21,898
|
|
18,226
|
|
||||
Midstream
|
2,338
|
|
2,487
|
|
6,910
|
|
7,211
|
|
||||
Subtotal
|
8,661
|
|
597
|
|
139,887
|
|
156,871
|
|
||||
Home Services and Other
|
2,418
|
|
1,909
|
|
662
|
|
(42
|
)
|
||||
Eliminations
|
(107
|
)
|
(29
|
)
|
(405
|
)
|
(100
|
)
|
||||
Total
|
$
|
10,972
|
|
$
|
2,477
|
|
$
|
140,144
|
|
$
|
156,729
|
|
Capital expenditures
|
|
|
|
|
||||||||
Natural Gas Distribution
|
$
|
36,687
|
|
$
|
45,749
|
|
$
|
133,093
|
|
$
|
115,740
|
|
Clean Energy Ventures
|
44,854
|
|
23,218
|
|
115,736
|
|
111,588
|
|
||||
Subtotal
|
81,541
|
|
68,967
|
|
248,829
|
|
227,328
|
|
||||
Home Services and Other
|
397
|
|
29
|
|
1,466
|
|
90
|
|
||||
Total
|
$
|
81,938
|
|
$
|
68,996
|
|
$
|
250,295
|
|
$
|
227,418
|
|
Investments in equity investees
|
|
|
|
|
||||||||
Midstream
|
$
|
2,741
|
|
$
|
1,049
|
|
$
|
8,689
|
|
$
|
2,313
|
|
Total
|
$
|
2,741
|
|
$
|
1,049
|
|
$
|
8,689
|
|
$
|
2,313
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Net financial earnings
|
$
|
10,972
|
|
$
|
2,477
|
|
$
|
140,144
|
|
$
|
156,729
|
|
Less:
|
|
|
|
|
||||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
55,875
|
|
1,188
|
|
57,910
|
|
(19,010
|
)
|
||||
Tax effect
|
(20,282
|
)
|
(294
|
)
|
(21,021
|
)
|
7,132
|
|
||||
Effects of economic hedging related to natural gas inventory
|
(11,380
|
)
|
16,464
|
|
(8,621
|
)
|
(15,751
|
)
|
||||
Tax effect
|
4,130
|
|
(5,937
|
)
|
3,129
|
|
5,908
|
|
||||
Net income to NFE tax adjustment
|
(8
|
)
|
(1,484
|
)
|
2,475
|
|
1,687
|
|
||||
Net (loss) income
|
$
|
(17,363
|
)
|
$
|
(7,460
|
)
|
$
|
106,272
|
|
$
|
176,763
|
|
•
|
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)
|
June 30,
2016 |
September 30,
2015 |
||||
Assets at end of period:
|
|
|
||||
Natural Gas Distribution
|
$
|
2,485,738
|
|
$
|
2,305,293
|
|
Energy Services
|
325,681
|
|
260,021
|
|
||
Clean Energy Ventures
|
611,644
|
|
504,885
|
|
||
Midstream
|
191,416
|
|
182,007
|
|
||
Subtotal
|
3,614,479
|
|
3,252,206
|
|
||
Home Services and Other
|
106,351
|
|
88,880
|
|
||
Intercompany assets
(1)
|
(88,040
|
)
|
(56,729
|
)
|
||
Total
|
$
|
3,632,790
|
|
$
|
3,284,357
|
|
(1)
|
Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.
|
14.
|
RELATED PARTY TRANSACTIONS
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||||||||||
(Thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
Net Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural Gas Distribution
|
$
|
3,607
|
|
(21
|
)%
|
|
$
|
7,172
|
|
(96
|
)%
|
|
$
|
83,494
|
|
79
|
%
|
|
$
|
83,952
|
|
48
|
%
|
Energy Services
|
(28,473
|
)
|
164
|
|
|
(16,439
|
)
|
220
|
|
|
(5,499
|
)
|
(5
|
)
|
|
69,191
|
|
39
|
|
||||
Clean Energy Ventures
|
2,448
|
|
(14
|
)
|
|
(2,308
|
)
|
31
|
|
|
19,423
|
|
18
|
|
|
16,539
|
|
9
|
|
||||
Midstream
|
2,338
|
|
(13
|
)
|
|
2,487
|
|
(33
|
)
|
|
6,910
|
|
6
|
|
|
7,211
|
|
4
|
|
||||
Home Services and Other
|
2,418
|
|
(14
|
)
|
|
1,909
|
|
(26
|
)
|
|
662
|
|
1
|
|
|
(42
|
)
|
—
|
|
||||
Eliminations
(1)
|
299
|
|
(2
|
)
|
|
(281
|
)
|
4
|
|
|
1,282
|
|
1
|
|
|
(88
|
)
|
—
|
|
||||
Total
|
$
|
(17,363
|
)
|
100
|
%
|
|
$
|
(7,460
|
)
|
100
|
%
|
|
$
|
106,272
|
|
100
|
%
|
|
$
|
176,763
|
|
100
|
%
|
(1)
|
Consists
of transactions between subsidiaries that are eliminated in consolidation
.
|
(Thousands)
|
June 30,
2016 |
|
September 30,
2015 |
||||||||
Assets
|
|
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
2,485,738
|
|
68
|
%
|
|
$
|
2,305,293
|
|
70
|
%
|
Energy Services
|
325,681
|
|
9
|
|
|
260,021
|
|
8
|
|
||
Clean Energy Ventures
|
611,644
|
|
17
|
|
|
504,885
|
|
15
|
|
||
Midstream
|
191,416
|
|
5
|
|
|
182,007
|
|
6
|
|
||
Home Services and Other
|
106,351
|
|
3
|
|
|
88,880
|
|
3
|
|
||
Intercompany assets
(1)
|
(88,040
|
)
|
(2
|
)
|
|
(56,729
|
)
|
(2
|
)
|
||
Total
|
$
|
3,632,790
|
|
100
|
%
|
|
$
|
3,284,357
|
|
100
|
%
|
(1)
|
Consists of transactions between subsidiaries that are eliminated in consolidation.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||
|
June 30,
|
|
June 30,
|
||||||||||
($ in Thousands)
|
2016
|
2015
|
|
2016
|
2015
|
||||||||
Net (loss) income
|
$
|
(17,363
|
)
|
$
|
(7,460
|
)
|
|
$
|
106,272
|
|
$
|
176,763
|
|
Add:
|
|
|
|
|
|
||||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
55,875
|
|
1,188
|
|
|
57,910
|
|
(19,010
|
)
|
||||
Tax effect
|
(20,282
|
)
|
(294
|
)
|
|
(21,021
|
)
|
7,132
|
|
||||
Effects of economic hedging related to natural gas inventory
|
(11,380
|
)
|
16,464
|
|
|
(8,621
|
)
|
(15,751
|
)
|
||||
Tax effect
|
4,130
|
|
(5,937
|
)
|
|
3,129
|
|
5,908
|
|
||||
NFE tax adjustment
|
(8
|
)
|
(1,484
|
)
|
|
2,475
|
|
1,687
|
|
||||
Net financial earnings
|
$
|
10,972
|
|
$
|
2,477
|
|
|
$
|
140,144
|
|
$
|
156,729
|
|
Basic (loss) earnings per share
|
$
|
(.20
|
)
|
$
|
(.09
|
)
|
|
$
|
1.24
|
|
$
|
2.08
|
|
Add:
|
|
|
|
|
|
||||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
.65
|
|
.02
|
|
|
.67
|
|
(.22
|
)
|
||||
Tax effect
|
(.24
|
)
|
—
|
|
|
(.25
|
)
|
.08
|
|
||||
Effects of economic hedging related to natural gas inventory
|
(.13
|
)
|
.19
|
|
|
(.10
|
)
|
(.19
|
)
|
||||
Tax effect
|
.05
|
|
(.07
|
)
|
|
.04
|
|
.07
|
|
||||
NFE tax adjustment
|
—
|
|
(.02
|
)
|
|
.03
|
|
.02
|
|
||||
Basic net financial earnings per share
|
$
|
.13
|
|
$
|
.03
|
|
|
$
|
1.63
|
|
$
|
1.84
|
|
(1)
|
Effects of hedging natural gas inventory transactions where the economic impact is realized in a future period.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||||||||||
($ in Thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
Net Financial Earnings (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural Gas Distribution
|
$
|
3,607
|
|
33
|
%
|
|
$
|
7,172
|
|
290
|
%
|
|
$
|
83,494
|
|
60
|
%
|
|
$
|
83,952
|
|
53
|
%
|
Energy Services
|
276
|
|
3
|
|
|
(5,270
|
)
|
(213
|
)
|
|
27,585
|
|
20
|
|
|
47,482
|
|
30
|
|
||||
Clean Energy Ventures
|
2,440
|
|
22
|
|
|
(3,792
|
)
|
(153
|
)
|
|
21,898
|
|
16
|
|
|
18,226
|
|
12
|
|
||||
Midstream
|
2,338
|
|
21
|
|
|
2,487
|
|
100
|
|
|
6,910
|
|
4
|
|
|
7,211
|
|
5
|
|
||||
Home Services and Other
|
2,418
|
|
22
|
|
|
1,909
|
|
77
|
|
|
662
|
|
—
|
|
|
(42
|
)
|
—
|
|
||||
Eliminations
(1)
|
(107
|
)
|
(1
|
)
|
|
(29
|
)
|
(1
|
)
|
|
(405
|
)
|
—
|
|
|
(100
|
)
|
—
|
|
||||
Total
|
$
|
10,972
|
|
100
|
%
|
|
$
|
2,477
|
|
100
|
%
|
|
$
|
140,144
|
|
100
|
%
|
|
$
|
156,729
|
|
100
|
%
|
(1)
|
Consists
of transactions between subsidiaries that are eliminated in consolidation
.
|
•
|
earning a reasonable rate of return on the investments in its natural gas distribution
and transmission businesses
, as well as timely recovery of all prudently incurred costs in order to provide safe and reliable service throughout NJNG's territory:
|
•
|
continuing to invest in the safety and integrity of its infrastructure;
|
•
|
managing its customer growth rate, which NJNG expects will be approximately
1.6 percent
annually through fiscal 2018;
|
•
|
maintaining a collaborative relationship with the BPU on regulatory initiatives, including:
|
•
|
managing the volatility of wholesale natural gas prices through a hedging program designed to keep customers' BGSS rates as stable as possible; and
|
•
|
working to manage its financial obligations related to remediation activities associated with its former MGP sites.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Weather
(1)
|
$
|
(46
|
)
|
$
|
4,367
|
|
$
|
27,547
|
|
$
|
(9,268
|
)
|
Usage
|
1,378
|
|
(398
|
)
|
7,476
|
|
1,140
|
|
||||
Total
|
$
|
1,332
|
|
$
|
3,969
|
|
$
|
35,023
|
|
$
|
(8,128
|
)
|
(1)
|
Compared with the CIP 20-year average, weather was
8.4 percent
colder
and
21.5 percent
warmer
-than-normal during the three months ended
June 30, 2016
and
2015
, respectively, and
17.3 percent
warmer
and
9 percent
colder
-than-normal during the
nine months ended
June 30, 2016
and
2015
, respectively.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Operating revenues
|
$
|
119,206
|
|
$
|
116,307
|
|
$
|
513,348
|
|
$
|
699,737
|
|
Less:
|
|
|
|
|
||||||||
Gas purchases
(1)
|
51,337
|
|
45,190
|
|
182,846
|
|
323,320
|
|
||||
Energy and other taxes
|
7,216
|
|
6,901
|
|
29,874
|
|
42,723
|
|
||||
Regulatory rider expense
|
6,360
|
|
8,516
|
|
37,203
|
|
72,671
|
|
||||
Operation and maintenance
|
32,612
|
|
30,323
|
|
96,122
|
|
92,941
|
|
||||
Depreciation and amortization
|
12,297
|
|
10,810
|
|
35,133
|
|
32,002
|
|
||||
Operating income
|
9,384
|
|
14,567
|
|
132,170
|
|
136,080
|
|
||||
Other income, net
|
1,173
|
|
1,364
|
|
3,769
|
|
3,572
|
|
||||
Interest expense, net of capitalized interest
|
4,935
|
|
5,005
|
|
14,213
|
|
14,002
|
|
||||
Income tax provision
|
2,015
|
|
3,754
|
|
38,232
|
|
41,698
|
|
||||
Net income
|
$
|
3,607
|
|
$
|
7,172
|
|
$
|
83,494
|
|
$
|
83,952
|
|
(1)
|
Includes related party transactions of approximately
$5.6 million
and
$3.6 million
for the three months ended
June 30, 2016
and
2015
, respectively, and
$8.1 million
and
$68.2 million
for the
nine months ended
June 30, 2016
and
2015
, respectively, a portion of which are eliminated in consolidation.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||
|
June 30,
|
|
June 30,
|
||||||||||
|
2016 v. 2015
|
|
2016 v. 2015
|
||||||||||
(Millions)
|
Operating
revenues
|
Gas
purchases
|
|
Operating
revenues
|
Gas
purchases
|
||||||||
Firm sales
|
$
|
8.2
|
|
$
|
4.1
|
|
|
$
|
(113.9
|
)
|
$
|
(50.0
|
)
|
Bill credits
(1)
|
—
|
|
—
|
|
|
(61.6
|
)
|
(57.6
|
)
|
||||
Off-system sales
|
(2.9
|
)
|
(2.7
|
)
|
|
(32.3
|
)
|
(32.2
|
)
|
||||
Average BGSS rates
(1)
|
1.7
|
|
1.6
|
|
|
(2.9
|
)
|
(2.7
|
)
|
||||
CIP adjustments
|
(2.6
|
)
|
—
|
|
|
43.1
|
|
—
|
|
||||
Other
|
(1.5
|
)
|
3.1
|
|
|
(18.8
|
)
|
2.0
|
|
||||
Total increase (decrease)
|
$
|
2.9
|
|
$
|
6.1
|
|
|
$
|
(186.4
|
)
|
$
|
(140.5
|
)
|
(1)
|
Operating revenues include changes in sales tax of
$100,000
and
$(4.2) million
during the
three and nine months ended
June 30, 2016
, compared with the
three and nine months ended
June 30, 2015
, respectively.
|
•
|
increased firm sales due primarily to higher usage related to weather being
37.7 percent
colder
; partially offset by
|
•
|
lower
off-system sales due primarily to a
8.4 percent
decrease
in the average price of gas sold,
as well as
a
5.8 percent
reduction
in volumes; and
|
•
|
an
decrease
in CIP adjustments of
$4.4 million
related to weather, partially offset by an
increase
of
$1.8 million
related to usage.
|
•
|
decreased firm sales due primarily to lower usage related to weather being
23.2 percent
warmer
;
|
•
|
bill credits issued to residential and small commercial customers effective November 1, 2015, that were not issued during fiscal 2015;
|
•
|
lower
off-system sales due primarily to a
45.8 percent
decrease
in the average price of gas sold, partially offset by a
24.5 percent
increase
in volumes
; and
|
•
|
a decrease in rider revenues, categorized in other, due primarily to a
36.4 percent
decrease in rates and a
19.6 percent
decrease in usage; partially offset by
|
•
|
an
increase
in CIP adjustments of
$36.8 million
related to weather and
$6.3 million
related to usage.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Operating revenues
|
$
|
119,206
|
|
$
|
116,307
|
|
$
|
513,348
|
|
$
|
699,737
|
|
Less:
|
|
|
|
|
||||||||
Gas purchases
|
51,337
|
|
45,190
|
|
182,846
|
|
323,320
|
|
||||
Energy and other taxes
|
6,112
|
|
5,754
|
|
26,266
|
|
39,207
|
|
||||
Regulatory rider expense
|
6,360
|
|
8,516
|
|
37,203
|
|
72,671
|
|
||||
Utility gross margin
|
$
|
55,397
|
|
$
|
56,847
|
|
$
|
267,033
|
|
$
|
264,539
|
|
•
|
utility firm gross margin generated from only the delivery component of either a sales tariff or a transportation tariff from residential and commercial customers who receive natural gas service from NJNG;
|
•
|
BGSS incentive programs, where revenues generated or savings achieved from BPU-approved off-system sales, capacity release, FRM or storage incentive programs are shared between customers and NJNG; and
|
•
|
utility gross margin generated from off-tariff customers, as well as interruptible customers.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||||||||
|
2016
|
|
2015
|
2016
|
|
2015
|
||||||||||||||||
($ in thousands)
|
Margin
|
Bcf
|
|
Margin
|
Bcf
|
Margin
|
Bcf
|
|
Margin
|
Bcf
|
||||||||||||
Utility gross margin/throughput
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
$
|
31,742
|
|
6.1
|
|
|
$
|
30,787
|
|
5.3
|
|
$
|
165,491
|
|
34.3
|
|
|
$
|
160,540
|
|
43.1
|
|
Commercial, industrial and other
|
8,522
|
|
1.3
|
|
|
8,476
|
|
1.1
|
|
40,039
|
|
6.7
|
|
|
40,539
|
|
9.0
|
|
||||
Firm transportation
|
10,573
|
|
2.8
|
|
|
10,453
|
|
2.4
|
|
46,104
|
|
12.4
|
|
|
46,985
|
|
14.4
|
|
||||
Total utility firm gross margin/throughput
|
50,837
|
|
10.2
|
|
|
49,716
|
|
8.8
|
|
251,634
|
|
53.4
|
|
|
248,064
|
|
66.5
|
|
||||
BGSS incentive programs
|
3,433
|
|
50.6
|
|
|
5,810
|
|
55.7
|
|
11,716
|
|
162.3
|
|
|
13,080
|
|
164.8
|
|
||||
Interruptible/off-tariff agreements
|
1,127
|
|
14.0
|
|
|
1,321
|
|
14.0
|
|
3,683
|
|
42.5
|
|
|
3,395
|
|
28.4
|
|
||||
Total utility gross margin/throughput
|
$
|
55,397
|
|
74.8
|
|
|
$
|
56,847
|
|
78.5
|
|
$
|
267,033
|
|
258.2
|
|
|
$
|
264,539
|
|
259.7
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||
|
June 30,
|
June 30,
|
||||||||
(Thousands)
|
2016 v. 2015
|
2016 v. 2015
|
||||||||
Customer growth
|
|
$
|
937
|
|
|
|
$
|
2,792
|
|
|
SAVEGREEN
|
|
184
|
|
|
|
778
|
|
|
||
Total increase
|
|
$
|
1,121
|
|
|
|
$
|
3,570
|
|
|
|
June 30,
2016 |
June 30,
2015 |
||
Firm customers
|
|
|
||
Residential
|
446,081
|
|
436,395
|
|
Commercial, industrial & other
|
26,668
|
|
26,204
|
|
Residential transport
|
36,796
|
|
39,202
|
|
Commercial transport
|
10,245
|
|
10,155
|
|
Total firm customers
|
519,790
|
|
511,956
|
|
Other
|
59
|
|
66
|
|
Total customers
|
519,849
|
|
512,022
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||
|
June 30,
|
June 30,
|
||||||||
(Thousands)
|
2016 v. 2015
|
2016 v. 2015
|
||||||||
Storage
|
|
$
|
(1,850
|
)
|
|
|
$
|
(242
|
)
|
|
FRM
|
|
(10
|
)
|
|
|
(509
|
)
|
|
||
Capacity release
|
|
(286
|
)
|
|
|
(492
|
)
|
|
||
Off-system sales
|
|
(231
|
)
|
|
|
(121
|
)
|
|
||
Total decrease
|
|
$
|
(2,377
|
)
|
|
|
$
|
(1,364
|
)
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||
|
June 30,
|
June 30,
|
||||||||
(Thousands)
|
2016 v. 2015
|
2016 v. 2015
|
||||||||
Shared corporate costs
|
|
$
|
1,635
|
|
|
|
$
|
3,460
|
|
|
Donations
|
|
—
|
|
|
|
446
|
|
|
||
Compensation and benefits
|
|
35
|
|
|
|
277
|
|
|
||
Bad debt
|
|
(162
|
)
|
|
|
(1,017
|
)
|
|
||
Consulting
|
|
205
|
|
|
|
(202
|
)
|
|
||
Other
|
|
576
|
|
|
|
217
|
|
|
||
Total increase
|
|
$
|
2,289
|
|
|
|
$
|
3,181
|
|
|
•
|
shared corporate costs resulting primarily from increased head count, as well as increased temporary staffing and consulting services;
|
•
|
increased compensation costs due primarily to increased head count, partially offset by reduced pension expense due to an increase in the expected return on assets in the pension plan related to the
$30 million
discretionary contribution made in November 2015; partially offset by
|
•
|
lower bad debt expense due primarily to a decrease in write-offs of customer receivables; and
|
•
|
lower consulting costs due primarily to reduced tax audit expenses.
|
•
|
a decrease in operating income as discussed above; and
|
•
|
an increase in
interest expense associated with higher long-term debt outstanding; partially offset by
|
•
|
a decrease
in the income tax provision
due primarily to the decrease in pre-tax income, increased
tax benefits related to AFUDC, and an increased
cost of retiring assets placed in service before 1981; and
|
•
|
an increase in other income related to AFUDC interest earned on infrastructure projects.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Operating revenues
|
$
|
250,307
|
|
$
|
321,775
|
|
$
|
848,958
|
|
$
|
1,607,667
|
|
Gas purchases (including demand charges
(1)(2)
)
|
289,703
|
|
343,883
|
|
843,936
|
|
1,483,325
|
|
||||
Gross margin
|
(39,396
|
)
|
(22,108
|
)
|
5,022
|
|
124,342
|
|
||||
Operation and maintenance
|
5,232
|
|
4,104
|
|
13,163
|
|
13,435
|
|
||||
Depreciation and amortization
|
23
|
|
23
|
|
69
|
|
68
|
|
||||
Other taxes
|
253
|
|
203
|
|
706
|
|
1,060
|
|
||||
Operating (loss) income
|
(44,904
|
)
|
(26,438
|
)
|
(8,916
|
)
|
109,779
|
|
||||
Other income
|
16
|
|
250
|
|
88
|
|
264
|
|
||||
Interest expense, net
|
263
|
|
209
|
|
639
|
|
1,010
|
|
||||
Income tax (benefit) provision
|
(16,678
|
)
|
(9,958
|
)
|
(3,968
|
)
|
39,842
|
|
||||
Net (loss) income
|
$
|
(28,473
|
)
|
$
|
(16,439
|
)
|
$
|
(5,499
|
)
|
$
|
69,191
|
|
(1)
|
Costs associated with pipeline and storage capacity that are expensed over the term of the related contracts, which generally varies from less than one year to ten years.
|
(2)
|
Includes related party transactions of approximately
$1.2 million
and
$1.8 million
for the three months ended
June 30, 2016
and
2015
, respectively, and
$13.5 million
and
$5.7 million
for the
nine months ended
June 30, 2016
and
2015
, respectively, a portion of which are eliminated in consolidation.
|
|
Nine Months Ended
|
|||
|
June 30,
|
|||
(in Bcf)
|
2016
|
2015
|
||
Net short futures contracts
|
97.6
|
|
57.4
|
|
Net long options
|
5.7
|
|
1.2
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Operating revenues
|
$
|
250,307
|
|
$
|
321,775
|
|
$
|
848,958
|
|
$
|
1,607,667
|
|
Less: Gas purchases
|
289,703
|
|
343,883
|
|
843,936
|
|
1,483,325
|
|
||||
Add:
|
|
|
|
|
||||||||
Unrealized loss (gain) on derivative instruments and related transactions
(1)
|
56,513
|
|
793
|
|
60,558
|
|
(18,988
|
)
|
||||
Effects of economic hedging related to natural gas inventory
(2)
|
(11,380
|
)
|
16,464
|
|
(8,621
|
)
|
(15,751
|
)
|
||||
Financial margin
|
$
|
5,737
|
|
$
|
(4,851
|
)
|
$
|
56,959
|
|
$
|
89,603
|
|
(1)
|
Includes unrealized (gains) related to an intercompany transaction between NJNG and NJRES that have been eliminated in consolidation of approximately
$(638,000)
and
$252,000
for the three months ended
June 30, 2016
, and
2015
, respectively, and
$(2.6) million
and
$(13,000)
for the
nine months ended
June 30, 2016
and
2015
, respectively.
|
(2)
|
Effects of hedging natural gas inventory transactions where the economic impact is realized in a future period.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Operating (loss) income
|
$
|
(44,904
|
)
|
$
|
(26,438
|
)
|
$
|
(8,916
|
)
|
$
|
109,779
|
|
Add:
|
|
|
|
|
||||||||
Operation and maintenance
|
5,232
|
|
4,104
|
|
13,163
|
|
13,435
|
|
||||
Depreciation and amortization
|
23
|
|
23
|
|
69
|
|
68
|
|
||||
Other taxes
|
253
|
|
203
|
|
706
|
|
1,060
|
|
||||
Subtotal - Gross margin
|
(39,396
|
)
|
(22,108
|
)
|
5,022
|
|
124,342
|
|
||||
Add:
|
|
|
|
|
||||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
56,513
|
|
793
|
|
60,558
|
|
(18,988
|
)
|
||||
Effects of economic hedging related to natural gas inventory
|
(11,380
|
)
|
16,464
|
|
(8,621
|
)
|
(15,751
|
)
|
||||
Financial margin
|
$
|
5,737
|
|
$
|
(4,851
|
)
|
$
|
56,959
|
|
$
|
89,603
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Net (loss) income
|
$
|
(28,473
|
)
|
$
|
(16,439
|
)
|
$
|
(5,499
|
)
|
$
|
69,191
|
|
Add:
|
|
|
|
|
||||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
56,513
|
|
793
|
|
60,558
|
|
(18,988
|
)
|
||||
Tax effect
(1)
|
(20,514
|
)
|
(151
|
)
|
(21,982
|
)
|
7,122
|
|
||||
Effects of economic hedging related to natural gas inventory
|
(11,380
|
)
|
16,464
|
|
(8,621
|
)
|
(15,751
|
)
|
||||
Tax effect
|
4,130
|
|
(5,937
|
)
|
3,129
|
|
5,908
|
|
||||
Net financial earnings (loss)
|
$
|
276
|
|
$
|
(5,270
|
)
|
$
|
27,585
|
|
$
|
47,482
|
|
(1)
|
Includes taxes related to an intercompany transaction between NJNG and NJRES that have been eliminated in consolidation of approximately
$232,000
and
$(143,000)
for the three months ended
June 30, 2016
, and
2015
, respectively, and
$961,000
and
$10,000
for the
nine months ended
June 30, 2016
and
2015
, respectively.
|
|
Three Months Ended
|
|||||||||||||||
|
June 30,
|
|||||||||||||||
($ in Thousands)
|
2016
|
2015
|
||||||||||||||
Placed in service
|
Projects
|
MW
|
Costs
(1)
|
Projects
|
MW
|
Costs
(1)
|
||||||||||
Grid-connected
|
3
|
|
10.9
|
|
$
|
26,378
|
|
|
1
|
|
3.9
|
|
$
|
9,336
|
|
|
Net-metered:
|
|
|
|
|
|
|
|
|
||||||||
Commercial
|
—
|
|
—
|
|
—
|
|
|
1
|
|
0.4
|
|
1,367
|
|
|
||
Residential
|
323
|
|
3.0
|
|
8,680
|
|
|
196
|
|
1.9
|
|
6,936
|
|
|
||
Total placed in service
|
326
|
|
13.9
|
|
$
|
35,058
|
|
|
198
|
|
6.2
|
|
$
|
17,639
|
|
|
(1)
|
Represents the portion of capital expenditures eligible for ITCs.
|
|
Nine Months Ended
|
|||||||||||||||
|
June 30,
|
|||||||||||||||
($ in Thousands)
|
2016
|
2015
|
||||||||||||||
Placed in service
|
Projects
|
MW
|
Costs
(1)
|
Projects
|
MW
|
Costs
(1)
|
||||||||||
Grid-connected
|
3
|
|
10.9
|
|
$
|
26,222
|
|
|
3
|
|
20.1
|
|
$
|
50,963
|
|
|
Net-metered:
|
|
|
|
|
|
|
|
|
||||||||
Commercial
|
—
|
|
—
|
|
3
|
|
|
1
|
|
0.4
|
|
1,367
|
|
|
||
Residential
|
614
|
|
5.5
|
|
16,025
|
|
|
468
|
|
4.5
|
|
14,570
|
|
|
||
Total placed in service
|
617
|
|
16.4
|
|
$
|
42,250
|
|
|
472
|
|
25.0
|
|
$
|
66,900
|
|
|
(1)
|
Represents the portion of capital expenditures eligible for ITCs.
|
|
Nine Months Ended
|
|||
|
June 30,
|
|||
|
2016
|
2015
|
||
Beginning balance as of October 1,
|
33,203
|
|
29,970
|
|
SRECs generated
|
100,998
|
|
79,910
|
|
SRECs delivered
|
(76,369
|
)
|
(65,583
|
)
|
Ending balance as of June 30,
|
57,832
|
|
44,297
|
|
•
|
a
$20.3 million
,
9.7
MW project in Two Dot, Montana that was completed in June 2014;
|
•
|
a
$42.1 million
,
20
MW project in Carroll County, Iowa that was completed in January 2015;
|
•
|
an
$84.9 million
,
50.7
MW project in Rush County, Kansas that was completed in December 2015; and
|
•
|
an
$84 million
,
39.9
MW project in Somerset County, Pennsylvania that is currently under construction and is expected to be completed in the first quarter of fiscal 2017.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Operating revenues
|
$
|
12,703
|
|
$
|
7,861
|
|
$
|
28,159
|
|
$
|
18,164
|
|
Operation and maintenance
|
4,665
|
|
3,863
|
|
13,297
|
|
10,814
|
|
||||
Depreciation and amortization
|
6,070
|
|
4,504
|
|
17,056
|
|
12,392
|
|
||||
Other taxes
|
234
|
|
203
|
|
690
|
|
535
|
|
||||
Operating income (loss)
|
1,734
|
|
(709
|
)
|
(2,884
|
)
|
(5,577
|
)
|
||||
Other income (expense), net
|
596
|
|
56
|
|
1,145
|
|
(1,514
|
)
|
||||
Interest expense, net
|
2,666
|
|
2,078
|
|
7,271
|
|
5,556
|
|
||||
Income tax (benefit)
|
(2,784
|
)
|
(423
|
)
|
(28,433
|
)
|
(29,186
|
)
|
||||
Net income (loss)
|
$
|
2,448
|
|
$
|
(2,308
|
)
|
$
|
19,423
|
|
$
|
16,539
|
|
•
|
an increase in operating revenues as described above;
|
•
|
an increase in tax benefits recognized due primarily to a lower estimated annual effective tax rate, as well as lower quarterly consolidated income; partially offset by
|
•
|
increased costs related to depreciation and O&M as discussed above; and
|
•
|
an increase in interest expense due to higher debt associated with capital expenditures.
|
•
|
an increase in operating revenues as described above; partially offset by
|
•
|
increased costs related to depreciation and O&M as discussed above; and
|
•
|
an increase in interest expense due to higher debt associated with capital expenditures.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Net income (loss)
|
$
|
2,448
|
|
$
|
(2,308
|
)
|
$
|
19,423
|
|
$
|
16,539
|
|
Add:
|
|
|
|
|
||||||||
Net income to NFE tax adjustment
|
(8
|
)
|
(1,484
|
)
|
2,475
|
|
1,687
|
|
||||
Net financial earnings (loss)
|
$
|
2,440
|
|
$
|
(3,792
|
)
|
$
|
21,898
|
|
$
|
18,226
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Equity in earnings of affiliates
|
$
|
3,359
|
|
$
|
4,266
|
|
$
|
10,412
|
|
$
|
12,622
|
|
Operation and maintenance
|
$
|
238
|
|
$
|
153
|
|
$
|
847
|
|
$
|
486
|
|
Other income
|
$
|
807
|
|
$
|
246
|
|
$
|
2,282
|
|
$
|
727
|
|
Interest expense, net
|
$
|
56
|
|
$
|
163
|
|
$
|
228
|
|
$
|
623
|
|
Income tax provision
|
$
|
1,501
|
|
$
|
1,738
|
|
$
|
4,671
|
|
$
|
5,048
|
|
Net income
|
$
|
2,338
|
|
$
|
2,487
|
|
$
|
6,910
|
|
$
|
7,211
|
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Steckman Ridge
|
$
|
3,416
|
|
$
|
3,188
|
|
$
|
10,485
|
|
$
|
8,681
|
|
Iroquois
(1)
|
—
|
|
1,078
|
|
—
|
|
3,941
|
|
||||
PennEast
|
(57
|
)
|
—
|
|
(73
|
)
|
—
|
|
||||
Total equity in earnings
|
$
|
3,359
|
|
$
|
4,266
|
|
$
|
10,412
|
|
$
|
12,622
|
|
(1)
|
Transportation revenues generated by Iroquois ended
September 29, 2015
.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
June 30,
|
June 30,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Operating revenues
|
$
|
14,408
|
|
$
|
14,592
|
|
$
|
31,912
|
|
$
|
32,190
|
|
Operation and maintenance
|
$
|
9,348
|
|
$
|
10,632
|
|
$
|
29,124
|
|
$
|
29,627
|
|
Energy and other taxes
|
$
|
991
|
|
$
|
1,041
|
|
$
|
2,901
|
|
$
|
2,977
|
|
Income tax provision (benefit)
|
$
|
1,556
|
|
$
|
720
|
|
$
|
(1,055
|
)
|
$
|
(704
|
)
|
Net income (loss)
|
$
|
2,418
|
|
$
|
1,909
|
|
$
|
662
|
|
$
|
(42
|
)
|
|
June 30,
2016 |
September 30,
2015 |
||
Common stock equity
|
49
|
%
|
54
|
%
|
Long-term debt
|
40
|
|
42
|
|
Short-term debt
|
11
|
|
4
|
|
Total
|
100
|
%
|
100
|
%
|
•
|
lower commodity prices, as well as decrease in market volatility, which resulted in a reduction in sales volumes and contributed to a decrease in profitability and working capital at NJRES;
|
•
|
lower usage at NJNG related to warmer winter weather, coupled with bill credits of
$61.6 million
issued to NJNG's customers during fiscal 2016 for overrecovered gas costs; and
|
•
|
a discretionary contribution of $30 million to our pension plan during fiscal 2016.
|
|
Balance
|
Increase
|
Less
|
Balance
|
||||||||||||
(Thousands)
|
September 30, 2015
|
(Decrease) in Fair
Market Value
|
Amounts
Settled
|
June 30,
2016 |
||||||||||||
NJNG
|
|
$
|
(10,881
|
)
|
|
$
|
(7,041
|
)
|
|
$
|
(13,577
|
)
|
|
$
|
(4,345
|
)
|
NJRES
|
|
24,575
|
|
|
30,154
|
|
|
89,156
|
|
|
(34,427
|
)
|
||||
Total
|
|
$
|
13,694
|
|
|
$
|
23,113
|
|
|
$
|
75,579
|
|
|
$
|
(38,772
|
)
|
(Thousands)
|
2016
|
2017
|
2018 - 2020
|
After 2020
|
Total
Fair Value
|
|||||||||||||
Price based on NYMEX/CME
|
$
|
355
|
|
$
|
(21,937
|
)
|
|
$
|
74
|
|
|
$
|
—
|
|
|
$
|
(21,508
|
)
|
Price based on ICE
|
(8
|
)
|
(17,173
|
)
|
|
(83
|
)
|
|
—
|
|
|
(17,264
|
)
|
|||||
Total
|
$
|
347
|
|
$
|
(39,110
|
)
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
(38,772
|
)
|
|
|
Volume Bcf
|
Price per MMBtu
(1)
|
Amounts included in Derivatives (Thousands)
|
||||
NJNG
|
Futures
|
14.6
|
|
$1.89 - $3.16
|
|
$
|
(4,345
|
)
|
NJRES
|
Futures
|
(97.6
|
)
|
$1.72 - $4.45
|
|
(34,867
|
)
|
|
|
Options
|
5.7
|
|
$0.02 - $0.24
|
|
440
|
|
|
Total
|
|
|
|
|
$
|
(38,772
|
)
|
(1)
|
Million British thermal unit
|
|
Balance
|
Increase
|
Less
|
Balance
|
||||||||||
(Thousands)
|
September 30, 2015
|
(Decrease) in Fair
Market Value |
Amounts
Settled |
June 30,
2016 |
||||||||||
NJNG - Prices based on other external data
|
|
$
|
—
|
|
|
(7,559
|
)
|
|
(7,382
|
)
|
|
$
|
(177
|
)
|
NJRES - Prices based on other external data
|
|
(2,709
|
)
|
|
(14,895
|
)
|
|
(16,114
|
)
|
|
(1,490
|
)
|
||
Total
|
|
$
|
(2,709
|
)
|
|
(22,454
|
)
|
|
(23,496
|
)
|
|
$
|
(1,667
|
)
|
|
Balance
|
Increase
|
Less
|
Balance
|
||||||||||
(Thousands)
|
September 30, 2015
|
(Decrease) in Fair
Market Value |
Amounts
Settled |
June 30,
2016 |
||||||||||
NJNG - Prices based on other external data
|
|
$
|
(4,228
|
)
|
|
(18,404
|
)
|
|
—
|
|
|
$
|
(22,632
|
)
|
Derivative Fair Value Sensitivity Analysis
|
|
||||||||||||||
(Thousands)
|
Henry Hub Futures and Fixed Price Swaps
|
||||||||||||||
Percent increase in NYMEX natural gas futures prices
|
0%
|
5%
|
10%
|
15%
|
20%
|
||||||||||
Estimated change in derivative fair value
|
$
|
—
|
|
$
|
(10,856
|
)
|
$
|
(21,711
|
)
|
$
|
(32,567
|
)
|
$
|
(43,422
|
)
|
Ending derivative fair value
|
$
|
(36,077
|
)
|
$
|
(46,933
|
)
|
$
|
(57,788
|
)
|
$
|
(68,644
|
)
|
$
|
(79,499
|
)
|
|
|
|
|
|
|
||||||||||
Percent decrease in NYMEX natural gas futures prices
|
0%
|
(5)%
|
(10)%
|
(15)%
|
(20)%
|
||||||||||
Estimated change in derivative fair value
|
$
|
—
|
|
$
|
10,856
|
|
$
|
21,711
|
|
$
|
32,567
|
|
$
|
43,422
|
|
Ending derivative fair value
|
$
|
(36,077
|
)
|
$
|
(25,221
|
)
|
$
|
(14,366
|
)
|
$
|
(3,510
|
)
|
$
|
7,345
|
|
(Thousands)
|
Gross Credit Exposure
|
Net Credit Exposure
|
||||||
Investment grade
|
|
$
|
88,381
|
|
|
$
|
68,823
|
|
Noninvestment grade
|
|
10,944
|
|
|
417
|
|
||
Internally rated investment grade
|
|
9,401
|
|
|
5,427
|
|
||
Internally rated noninvestment grade
|
|
5,900
|
|
|
292
|
|
||
Total
|
|
$
|
114,626
|
|
|
$
|
74,959
|
|
(Thousands)
|
Gross Credit Exposure
|
Net Credit Exposure
|
||||||
Investment grade
|
|
$
|
3,222
|
|
|
$
|
2,886
|
|
Noninvestment grade
|
|
1,646
|
|
|
87
|
|
||
Internally rated investment grade
|
|
32
|
|
|
—
|
|
||
Internally rated noninvestment grade
|
|
17,371
|
|
|
10,302
|
|
||
Total
|
|
$
|
22,271
|
|
|
$
|
13,275
|
|
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
|
||||||
4/01/16 - 4/30/16
|
—
|
|
$
|
—
|
|
—
|
|
|
2,627,953
|
|
5/01/16 - 5/31/16
|
—
|
|
$
|
—
|
|
—
|
|
|
2,627,953
|
|
6/01/16 - 6/30/16
|
—
|
|
$
|
—
|
|
—
|
|
|
2,627,953
|
|
Total
|
—
|
|
$
|
—
|
|
—
|
|
|
2,627,953
|
|
Exhibit
Number
|
Exhibit Description
|
4.1
|
$125,000,000 Note Purchase Agreement, dated as of June 21, 2016, by and among New Jersey Natural Gas Company and the Purchasers party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, as filed on June 22, 2016)
|
|
|
4.2
|
Second Supplemental Indenture, dated as of June 1, 2016, by and between New Jersey Natural Gas Company and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, as filed on June 22, 2016)
|
|
|
10.1+
|
Form of Amendment of Deferred Stock Retention Award Agreement
|
|
|
31.1+
|
Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
31.2+
|
Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
32.1+ †
|
Certification of the Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
32.2+ †
|
Certification of the Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
101+
|
Interactive Data File (Form 10-Q, for the fiscal period ended March 31, 2016, furnished in XBRL (eXtensible Business Reporting Language)).
|
+
|
Filed herewith.
|
|
|
NEW JERSEY RESOURCES CORPORATION
|
|
|
(Registrant)
|
Date:
|
August 3, 2016
|
|
|
|
By:/s/ Patrick Migliaccio
|
|
|
Patrick Migliaccio
|
|
|
Senior Vice President and
|
|
|
Chief Financial Officer
|
|
|
|
NEW JERSEY RESOURCES CORPORATION
|
|
|
|
|
|
|
|
By:
|
|
|
|
LAURENCE M. DOWNES
|
|
|
|
Chairman & CEO
|
|
|
|
|
|
|
|
EMPLOYEE
|
|
|
|
|
|
|
|
NAME
|
|
|
|
TITLE
|
1)
|
I have reviewed this report on Form 10-Q 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:
|
August 3, 2016
|
By:
|
/s/ Laurence M. Downes
|
|
|
|
Laurence M. Downes
|
|
|
|
Chairman, President & Chief Executive Officer
|
1)
|
I have reviewed this report on Form 10-Q 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:
|
August 3, 2016
|
By:
|
/s/ Patrick Migliaccio
|
|
|
|
Patrick Migliaccio
|
|
|
|
Senior Vice President and Chief Financial Officer
|
(a)
|
I am the Chief Executive Officer of New Jersey Resources Corporation (the "Company");
|
(b)
|
To the best of my knowledge, this quarterly report on Form 10-Q for the quarter ended
June 30, 2016
, 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 Company.
|
Date:
|
August 3, 2016
|
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 (the "Company");
|
(b)
|
To the best of my knowledge, this quarterly report on Form 10-Q for the quarter ended
June 30, 2016
, 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 Company.
|
Date:
|
August 3, 2016
|
By:
|
/s/ Patrick Migliaccio
|
|
|
|
Patrick Migliaccio
|
|
|
|
Senior Vice President and Chief Financial Officer
|