|
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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ITEM 2.
|
||
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ITEM 3.
|
||
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ITEM 4.
|
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PART II. OTHER INFORMATION
|
|
||
|
ITEM 1.
|
||
|
ITEM 1A.
|
||
|
ITEM 2.
|
||
|
ITEM 6.
|
||
|
|
AFUDC
|
Allowance for Funds Used During Construction
|
AOCI
|
Accumulated Other Comprehensive Income
|
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 Bond
|
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
|
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
|
SEC
|
U.S. Securities and Exchange Commission
|
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 NJR's service territory and their effect on NJR'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;
|
•
|
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 and regulatory approvals, such as the PennEast pipeline project, land-use rights, electric grid connection (in the case of clean energy 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, and investment in a master limited partnership;
|
•
|
risks associated with our investments in clean energy 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 and expenses are incurred and the extent to which they are allowed to be recovered from customers through the regulatory process, including through future base rate case filings;
|
•
|
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;
|
•
|
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
on our operations and customers.
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
(Thousands, except per share data)
|
2016
|
|
2015
|
||||
OPERATING REVENUES
|
|
|
|
||||
Utility
|
$
|
185,556
|
|
|
$
|
151,606
|
|
Nonutility
|
355,472
|
|
|
292,652
|
|
||
Total operating revenues
|
541,028
|
|
|
444,258
|
|
||
OPERATING EXPENSES
|
|
|
|
||||
Gas purchases:
|
|
|
|
||||
Utility
|
61,320
|
|
|
46,665
|
|
||
Nonutility
|
337,932
|
|
|
254,088
|
|
||
Related parties
|
2,111
|
|
|
2,074
|
|
||
Operation and maintenance
|
52,228
|
|
|
46,233
|
|
||
Regulatory rider expenses
|
12,601
|
|
|
9,628
|
|
||
Depreciation and amortization
|
19,260
|
|
|
16,482
|
|
||
Energy and other taxes
|
14,101
|
|
|
9,637
|
|
||
Total operating expenses
|
499,553
|
|
|
384,807
|
|
||
OPERATING INCOME
|
41,475
|
|
|
59,451
|
|
||
Other income, net
|
3,776
|
|
|
1,924
|
|
||
Interest expense, net of capitalized interest
|
10,615
|
|
|
6,777
|
|
||
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES
|
34,636
|
|
|
54,598
|
|
||
Income tax provision
|
2,018
|
|
|
6,722
|
|
||
Equity in earnings of affiliates
|
2,311
|
|
|
2,406
|
|
||
NET INCOME
|
$
|
34,929
|
|
|
$
|
50,282
|
|
|
|
|
|
||||
EARNINGS PER COMMON SHARE
|
|
|
|
||||
Basic
|
$0.41
|
|
$0.59
|
||||
Diluted
|
$0.40
|
|
$0.58
|
||||
DIVIDENDS DECLARED PER COMMON SHARE
|
$0.255
|
|
$0.24
|
||||
WEIGHTED AVERAGE SHARES OUTSTANDING
|
|
|
|
||||
Basic
|
86,084
|
|
|
85,675
|
|
||
Diluted
|
86,855
|
|
|
86,676
|
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
(Thousands)
|
2016
|
|
2015
|
||||
Net income
|
$
|
34,929
|
|
|
$
|
50,282
|
|
Other comprehensive income, net of tax
|
|
|
|
||||
Unrealized gain on available for sale securities, net of tax of $(3,786) and $(2,614), respectively
|
5,515
|
|
|
3,701
|
|
||
Net unrealized (loss) on derivatives, net of tax of $0 and $19, respectively
|
—
|
|
(1)
|
(33
|
)
|
||
Adjustment to postemployment benefit obligation, net of tax of $(217) and $(174), respectively
|
317
|
|
|
256
|
|
||
Other comprehensive income
|
5,832
|
|
|
3,924
|
|
||
Comprehensive income
|
$
|
40,761
|
|
|
$
|
54,206
|
|
(1)
|
Effective January 1, 2016, the Company elected not to designate its foreign currency derivatives as accounting hedges and, as a result, changes in fair value of the effective portion of the hedges are no longer recorded in OCI. See Note 4 Derivative Instruments for more information on these transactions.
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
(Thousands)
|
2016
|
|
2015
|
||||
CASH FLOWS (USED IN) OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
34,929
|
|
|
$
|
50,282
|
|
Adjustments to reconcile net income to cash flows from operating activities
|
|
|
|
||||
Unrealized loss (gain) on derivative instruments
|
28,302
|
|
|
(1,135
|
)
|
||
Depreciation and amortization
|
19,260
|
|
|
16,482
|
|
||
Allowance for equity used during construction
|
(584
|
)
|
|
(1,215
|
)
|
||
Allowance for bad debt expense
|
230
|
|
|
334
|
|
||
Deferred income taxes
|
16,262
|
|
|
46,166
|
|
||
Manufactured gas plant remediation costs
|
(1,619
|
)
|
|
(1,520
|
)
|
||
Distributions received from equity investees, net of equity in earnings
|
1,101
|
|
|
1,139
|
|
||
Cost of removal - asset retirement obligations
|
(198
|
)
|
|
(33
|
)
|
||
Contributions to postemployment benefit plans
|
(1,712
|
)
|
|
(30,144
|
)
|
||
Tax benefit from stock-based compensation
|
1,188
|
|
|
1,635
|
|
||
Changes in:
|
|
|
|
||||
Components of working capital
|
(150,480
|
)
|
|
(102,068
|
)
|
||
Other noncurrent assets
|
7,242
|
|
|
(20,270
|
)
|
||
Other noncurrent liabilities
|
15
|
|
|
4,173
|
|
||
Cash flows (used in) operating activities
|
(46,064
|
)
|
|
(36,174
|
)
|
||
CASH FLOWS (USED IN) INVESTING ACTIVITIES
|
|
|
|
||||
Expenditures for:
|
|
|
|
||||
Utility plant
|
(31,396
|
)
|
|
(42,465
|
)
|
||
Solar and wind equipment
|
(46,785
|
)
|
|
(45,006
|
)
|
||
Real estate properties and other
|
(171
|
)
|
|
(797
|
)
|
||
Cost of removal
|
(7,459
|
)
|
|
(6,575
|
)
|
||
Investments in equity investees
|
(4,636
|
)
|
|
(2,846
|
)
|
||
Distribution from equity investees in excess of equity in earnings
|
688
|
|
|
555
|
|
||
Withdrawal from restricted cash construction fund
|
—
|
|
|
1,001
|
|
||
Proceeds from sale of investment
|
3,218
|
|
|
—
|
|
||
Proceeds from sale of property
|
—
|
|
|
748
|
|
||
Cash flows (used in) investing activities
|
(86,541
|
)
|
|
(95,385
|
)
|
||
CASH FLOWS FROM FROM FINANCING ACTIVITIES
|
|
|
|
||||
Net proceeds from short-term debt
|
162,900
|
|
|
144,650
|
|
||
Payments of long-term debt
|
(2,716
|
)
|
|
(2,676
|
)
|
||
Proceeds from sale-leaseback transaction
|
9,587
|
|
|
7,107
|
|
||
Payments of common stock dividends
|
(21,931
|
)
|
|
(20,524
|
)
|
||
Proceeds from issuance of common stock
|
4,616
|
|
|
3,807
|
|
||
Purchases of treasury stock
|
(6,355
|
)
|
|
(1,008
|
)
|
||
Tax withholding payments related to net settled stock compensation
|
(4,167
|
)
|
|
(3,042
|
)
|
||
Cash flows from financing activities
|
141,934
|
|
|
128,314
|
|
||
Change in cash and cash equivalents
|
9,329
|
|
|
(3,245
|
)
|
||
Cash and cash equivalents at beginning of period
|
37,546
|
|
|
4,928
|
|
||
Cash and cash equivalents at end of period
|
$
|
46,875
|
|
|
$
|
1,683
|
|
CHANGES IN COMPONENTS OF WORKING CAPITAL
|
|
|
|
||||
Receivables
|
$
|
(152,180
|
)
|
|
$
|
(27,784
|
)
|
Inventories
|
(13,954
|
)
|
|
(26,772
|
)
|
||
Recovery of gas costs
|
(2,472
|
)
|
|
(11,882
|
)
|
||
Gas purchases payable
|
47,767
|
|
|
(7,071
|
)
|
||
Gas purchases payable - related parties
|
5
|
|
|
(406
|
)
|
||
Prepaid and accrued taxes
|
7,954
|
|
|
(27,794
|
)
|
||
Accounts payable and other
|
(12,405
|
)
|
|
(22,489
|
)
|
||
Restricted broker margin accounts
|
(26,173
|
)
|
|
6,855
|
|
||
Customers' credit balances and deposits
|
616
|
|
|
10,056
|
|
||
Other current assets
|
362
|
|
|
5,219
|
|
||
Total
|
$
|
(150,480
|
)
|
|
$
|
(102,068
|
)
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
|
|
|
|
||||
Cash paid (received) for:
|
|
|
|
||||
Interest (net of amounts capitalized)
|
$
|
8,153
|
|
|
$
|
5,403
|
|
Income taxes
|
$
|
(7,020
|
)
|
|
$
|
202
|
|
Accrued capital expenditures
|
$
|
28,442
|
|
|
$
|
21,721
|
|
(Thousands)
|
December 31,
2016 |
September 30,
2016 |
||||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
||||
Utility plant, at cost
|
$
|
2,123,926
|
|
$
|
2,107,375
|
|
Construction work in progress
|
131,576
|
|
122,268
|
|
||
Solar and wind equipment, real estate properties and other, at cost
|
747,788
|
|
631,696
|
|
||
Construction work in progress
|
5,903
|
|
93,791
|
|
||
Total property, plant and equipment
|
3,009,193
|
|
2,955,130
|
|
||
Accumulated depreciation and amortization, utility plant
|
(470,444
|
)
|
(467,702
|
)
|
||
Accumulated depreciation and amortization, solar and wind equipment, real estate properties and other
|
(87,000
|
)
|
(79,776
|
)
|
||
Property, plant and equipment, net
|
2,451,749
|
|
2,407,652
|
|
||
CURRENT ASSETS
|
|
|
||||
Cash and cash equivalents
|
46,875
|
|
37,546
|
|
||
Customer accounts receivable
|
|
|
||||
Billed
|
252,755
|
|
142,658
|
|
||
Unbilled revenues
|
47,648
|
|
5,744
|
|
||
Allowance for doubtful accounts
|
(4,916
|
)
|
(4,865
|
)
|
||
Regulatory assets
|
43,140
|
|
54,286
|
|
||
Gas in storage, at average cost
|
220,097
|
|
206,251
|
|
||
Materials and supplies, at average cost
|
10,886
|
|
10,778
|
|
||
Prepaid and accrued taxes
|
26,391
|
|
34,179
|
|
||
Derivatives, at fair value
|
50,215
|
|
29,964
|
|
||
Restricted broker margin accounts
|
79,118
|
|
47,644
|
|
||
Asset held for sale
|
7,660
|
|
7,660
|
|
||
Other
|
35,194
|
|
35,419
|
|
||
Total current assets
|
815,063
|
|
607,264
|
|
||
NONCURRENT ASSETS
|
|
|
||||
Investments in equity method investees
|
145,169
|
|
141,148
|
|
||
Regulatory assets
|
408,481
|
|
441,294
|
|
||
Derivatives, at fair value
|
3,660
|
|
5,227
|
|
||
Available for sale securities
|
64,447
|
|
55,789
|
|
||
Other
|
60,937
|
|
60,196
|
|
||
Total noncurrent assets
|
682,694
|
|
703,654
|
|
||
Total assets
|
$
|
3,949,506
|
|
$
|
3,718,570
|
|
(Thousands)
|
December 31,
2016 |
September 30,
2016 |
||||
CAPITALIZATION
|
|
|
||||
Common stock, $2.50 par value; authorized 150,000,000 shares;
outstanding December 31, 2016 — 86,196,239; September 30, 2016 — 86,086,355 |
$
|
222,153
|
|
$
|
221,654
|
|
Premium on common stock
|
218,476
|
|
215,580
|
|
||
Accumulated other comprehensive (loss), net of tax
|
(9,323
|
)
|
(15,155
|
)
|
||
Treasury stock at cost and other;
shares December 31, 2016 — 2,664,765; September 30, 2016 — 2,575,139 |
(84,450
|
)
|
(81,044
|
)
|
||
Retained earnings
|
838,505
|
|
825,556
|
|
||
Common stock equity
|
1,185,361
|
|
1,166,591
|
|
||
Long-term debt
|
1,026,682
|
|
1,055,038
|
|
||
Total capitalization
|
2,212,043
|
|
2,221,629
|
|
||
CURRENT LIABILITIES
|
|
|
||||
Current maturities of long-term debt
|
96,832
|
|
61,452
|
|
||
Short-term debt
|
284,600
|
|
121,700
|
|
||
Gas purchases payable
|
187,219
|
|
139,452
|
|
||
Gas purchases payable to related parties
|
1,155
|
|
1,150
|
|
||
Accounts payable and other
|
72,776
|
|
107,184
|
|
||
Dividends payable
|
21,980
|
|
21,975
|
|
||
Accrued taxes
|
1,246
|
|
1,080
|
|
||
Regulatory liabilities
|
12,120
|
|
9,469
|
|
||
New Jersey clean energy program
|
13,180
|
|
14,232
|
|
||
Derivatives, at fair value
|
93,080
|
|
61,080
|
|
||
Restricted broker margin accounts
|
5,294
|
|
—
|
|
||
Customers' credit balances and deposits
|
33,450
|
|
32,834
|
|
||
Total current liabilities
|
822,932
|
|
571,608
|
|
||
NONCURRENT LIABILITIES
|
|
|
||||
Deferred income taxes
|
490,017
|
|
473,847
|
|
||
Deferred investment tax credits
|
4,538
|
|
4,619
|
|
||
Deferred gain
|
28,317
|
|
28,519
|
|
||
Derivatives, at fair value
|
4,527
|
|
25,252
|
|
||
Manufactured gas plant remediation
|
168,506
|
|
172,000
|
|
||
Postemployment employee benefit liability
|
140,978
|
|
141,604
|
|
||
Regulatory liabilities
|
38,726
|
|
41,411
|
|
||
Asset retirement obligation
|
29,664
|
|
28,379
|
|
||
Other
|
9,258
|
|
9,702
|
|
||
Total noncurrent liabilities
|
914,531
|
|
925,333
|
|
||
Commitments and contingent liabilities (Note 12)
|
|
|
|
|||
Total capitalization and liabilities
|
$
|
3,949,506
|
|
$
|
3,718,570
|
|
1.
|
NATURE OF THE BUSINESS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
December 31,
2016 |
September 30,
2016 |
||||||||||
($ in thousands)
|
Gas in Storage
|
|
Bcf
|
Gas in Storage
|
|
Bcf
|
||||||
NJRES
|
|
$
|
163,393
|
|
62.9
|
|
|
$
|
130,493
|
|
62.0
|
|
NJNG
|
|
56,704
|
|
15.9
|
|
|
75,758
|
|
21.3
|
|
||
Total
|
|
$
|
220,097
|
|
78.8
|
|
|
$
|
206,251
|
|
83.3
|
|
(Thousands)
|
December 31,
2016 |
|
September 30,
2016 |
||||||||
NJRES
|
$
|
173,708
|
|
69
|
%
|
|
$
|
102,884
|
|
72
|
%
|
NJNG
(1)
|
71,404
|
|
28
|
|
|
30,951
|
|
22
|
|
||
NJRCEV
|
2,121
|
|
1
|
|
|
1,807
|
|
1
|
|
||
NJRHS and other
|
5,522
|
|
2
|
|
|
7,016
|
|
5
|
|
||
Total
|
$
|
252,755
|
|
100
|
%
|
|
$
|
142,658
|
|
100
|
%
|
(1)
|
Does not include unbilled revenues of
$47.6 million
and
$5.7 million
as of
December 31, 2016
and
September 30, 2016
, respectively.
|
(Thousands)
|
As Previously Reported
|
|
Effect of Change
|
|
As Adjusted
|
||||||
Statements of Operations
|
|
|
|
|
|
||||||
Income tax provision
|
$
|
8,357
|
|
|
$
|
(1,635
|
)
|
|
$
|
6,722
|
|
Net income
|
$
|
48,647
|
|
|
$
|
1,635
|
|
|
$
|
50,282
|
|
Earnings per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.57
|
|
|
$
|
0.02
|
|
|
$
|
0.59
|
|
Diluted
|
$
|
0.56
|
|
|
$
|
0.02
|
|
|
$
|
0.58
|
|
Cash flows (used in) operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
48,647
|
|
|
$
|
1,635
|
|
|
$
|
50,282
|
|
Tax benefit from stock based compensation
|
$
|
—
|
|
|
$
|
1,635
|
|
|
$
|
1,635
|
|
Other noncurrent liabilities
|
$
|
4,401
|
|
|
$
|
(228
|
)
|
|
$
|
4,173
|
|
Net cash flows (used in) operating activities
|
$
|
(39,216
|
)
|
|
$
|
3,042
|
|
|
$
|
(36,174
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
||||||
Tax withholding payments related to net settled stock compensation
|
$
|
—
|
|
|
$
|
(3,042
|
)
|
|
$
|
(3,042
|
)
|
Cash flows from financing activities
|
$
|
131,356
|
|
|
$
|
(3,042
|
)
|
|
$
|
128,314
|
|
(Thousands)
|
As Previously Reported
|
|
Effect of Change
|
|
As Adjusted
|
||||||
Assets
|
|
|
|
|
|
||||||
Other noncurrent assets
|
$
|
68,708
|
|
|
$
|
(8,512
|
)
|
|
$
|
60,196
|
|
Total noncurrent assets
|
$
|
712,166
|
|
|
$
|
(8,512
|
)
|
|
$
|
703,654
|
|
Total assets
|
$
|
3,727,082
|
|
|
$
|
(8,512
|
)
|
|
$
|
3,718,570
|
|
Capitalization and Liabilities
|
|
|
|
|
|
||||||
Long-term debt
|
$
|
1,063,550
|
|
|
$
|
(8,512
|
)
|
|
$
|
1,055,038
|
|
Total capitalization
|
$
|
2,230,141
|
|
|
$
|
(8,512
|
)
|
|
$
|
2,221,629
|
|
Total capitalization and liabilities
|
$
|
3,727,082
|
|
|
$
|
(8,512
|
)
|
|
$
|
3,718,570
|
|
3.
|
REGULATION
|
(Thousands)
|
December 31,
2016 |
September 30,
2016 |
||||
Regulatory assets-current
|
|
|
||||
Conservation Incentive Program
|
$
|
28,662
|
|
$
|
36,957
|
|
New Jersey Clean Energy Program
|
13,180
|
|
14,232
|
|
||
Underrecovered gas costs
|
1,298
|
|
—
|
|
||
Derivatives at fair value, net
|
—
|
|
3,097
|
|
||
Total current regulatory assets
|
$
|
43,140
|
|
$
|
54,286
|
|
Regulatory assets-noncurrent
|
|
|
||||
Environmental remediation costs
|
|
|
||||
Expended, net of recoveries
|
$
|
20,025
|
|
$
|
19,595
|
|
Liability for future expenditures
|
168,506
|
|
172,000
|
|
||
Deferred income taxes
|
20,599
|
|
20,273
|
|
||
Derivatives at fair value, net
|
2,702
|
|
23,384
|
|
||
SAVEGREEN
|
22,060
|
|
25,208
|
|
||
Postemployment and other benefit costs
|
154,221
|
|
157,027
|
|
||
Deferred Superstorm Sandy costs
|
14,659
|
|
15,201
|
|
||
Other noncurrent regulatory assets
|
5,709
|
|
8,606
|
|
||
Total noncurrent regulatory assets
|
$
|
408,481
|
|
$
|
441,294
|
|
Regulatory liability-current
|
|
|
||||
Overrecovered gas costs
|
$
|
—
|
|
$
|
9,469
|
|
Derivatives at fair value, net
|
12,120
|
|
—
|
|
||
Total current regulatory liabilities
|
$
|
12,120
|
|
$
|
9,469
|
|
Regulatory liabilities-noncurrent
|
|
|
||||
Cost of removal obligation
|
$
|
25,318
|
|
$
|
30,549
|
|
New Jersey Clean Energy Program
|
12,659
|
|
10,657
|
|
||
Other noncurrent regulatory liabilities
|
749
|
|
205
|
|
||
Total noncurrent regulatory liabilities
|
$
|
38,726
|
|
$
|
41,411
|
|
4.
|
DERIVATIVE INSTRUMENTS
|
(1)
|
Derivative assets and liabilities are presented on a gross basis in the balance sheet as the Company does not elect balance sheet offsetting under ASC 210-20.
|
(2)
|
Includes transactions with NAESB netting election, transactions held by FCMs with net margining and transactions with ISDA netting.
|
(3)
|
Financial collateral includes cash balances at FCMs as well as cash received from or pledged to other counterparties.
|
(4)
|
Net amounts represent presentation of derivative assets and liabilities if the Company were to elect balance sheet offsetting under ASC 210-20.
|
(Thousands)
|
Location of gain (loss) recognized in income on derivatives
|
Amount of gain (loss) recognized
in income on derivatives
|
||||||
|
|
Three Months Ended
|
||||||
|
|
December 31,
|
||||||
Derivatives not designated as hedging instruments:
|
2016
|
|
2015
|
|||||
NJRES:
|
|
|
|
|
||||
Physical commodity contracts
|
Operating revenues
|
$
|
1,743
|
|
|
$
|
11,874
|
|
Physical commodity contracts
|
Gas purchases
|
(8,799
|
)
|
|
(21,237
|
)
|
||
Financial commodity contracts
|
Gas purchases
|
(30,611
|
)
|
|
41,276
|
|
||
Foreign currency contracts
|
Gas purchases
|
(86
|
)
|
|
—
|
|
||
Total unrealized and realized (losses) gains
|
$
|
(37,753
|
)
|
|
$
|
31,913
|
|
(Thousands)
|
Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion)
|
Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion)
|
||||
Foreign currency contracts
|
$
|
(64
|
)
|
$
|
12
|
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
(Thousands)
|
2016
|
|
2015
|
||||
NJNG:
|
|
|
|
||||
Physical commodity contracts
|
$
|
1,050
|
|
|
$
|
—
|
|
Financial commodity contracts
|
11,178
|
|
|
(5,635
|
)
|
||
Interest rate contracts
|
20,371
|
|
|
2,366
|
|
||
Total unrealized and realized gains (losses)
|
$
|
32,599
|
|
|
$
|
(3,269
|
)
|
|
|
|
Volume (Bcf)
|
||||
|
|
|
December 31,
2016 |
|
September 30,
2016 |
||
NJNG
|
Futures
|
|
24.3
|
|
|
23.6
|
|
|
Physical
|
|
4.4
|
|
|
9.2
|
|
NJRES
|
Futures
|
|
(76.4
|
)
|
|
(79.1
|
)
|
|
Options
|
|
0.5
|
|
|
1.2
|
|
|
Physical
|
|
70.4
|
|
|
94.6
|
|
(Thousands)
|
Balance Sheet Location
|
December 31,
2016 |
September 30,
2016 |
||||
NJNG
|
Broker margin - Current assets
|
$
|
—
|
|
$
|
4,822
|
|
|
Broker margin - Current (liabilities)
|
$
|
(5,294
|
)
|
$
|
—
|
|
NJRES
|
Broker margin - Current assets
|
$
|
79,118
|
|
$
|
42,822
|
|
(Thousands)
|
Gross Credit Exposure
|
||||
Investment grade
|
|
$
|
200,025
|
|
|
Noninvestment grade
|
|
40,457
|
|
|
|
Internally rated investment grade
|
|
14,769
|
|
|
|
Internally rated noninvestment grade
|
|
23,082
|
|
|
|
Total
|
|
$
|
278,333
|
|
|
5.
|
FAIR VALUE
|
(Thousands)
|
December 31,
2016 |
September 30,
2016 |
||||
Carrying value
(1)
|
$
|
1,082,845
|
|
$
|
1,082,845
|
|
Fair market value
|
$
|
1,079,431
|
|
$
|
1,131,077
|
|
(1)
|
Excludes
capital leases of
$49 million
and
$42.2 million
as of
December 31, 2016
and
September 30, 2016
, 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 December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
8,850
|
|
|
|
$
|
—
|
|
|
$
|
8,850
|
|
Financial commodity contracts
|
|
45,025
|
|
|
|
—
|
|
|
|
—
|
|
|
45,025
|
|
||||
Available for sale equity securities - energy industry
|
|
64,447
|
|
|
|
—
|
|
|
|
—
|
|
|
64,447
|
|
||||
Other
(1)
|
|
33,614
|
|
|
|
—
|
|
|
|
—
|
|
|
33,614
|
|
||||
Total assets at fair value
|
|
$
|
143,086
|
|
|
|
$
|
8,850
|
|
|
|
$
|
—
|
|
|
$
|
151,936
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
7,247
|
|
|
|
$
|
—
|
|
|
$
|
7,247
|
|
Financial commodity contracts
|
|
87,567
|
|
|
|
—
|
|
|
|
—
|
|
|
87,567
|
|
||||
Financial commodity contracts - foreign exchange
|
|
—
|
|
|
|
91
|
|
|
|
—
|
|
|
91
|
|
||||
Interest rate contracts
|
|
—
|
|
|
|
2,702
|
|
|
|
—
|
|
|
2,702
|
|
||||
Total liabilities at fair value
|
|
$
|
87,567
|
|
|
|
$
|
10,040
|
|
|
|
$
|
—
|
|
|
$
|
97,607
|
|
As of September 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
10,216
|
|
|
|
$
|
—
|
|
|
$
|
10,216
|
|
Financial commodity contracts
|
|
24,974
|
|
|
|
—
|
|
|
|
—
|
|
|
24,974
|
|
||||
Financial commodity contracts - foreign exchange
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
||||
Available for sale equity securities - energy industry
|
|
55,789
|
|
|
|
—
|
|
|
|
—
|
|
|
55,789
|
|
||||
Other
(1)
|
|
35,516
|
|
|
|
—
|
|
|
|
—
|
|
|
35,516
|
|
||||
Total assets at fair value
|
|
$
|
116,279
|
|
|
|
$
|
10,217
|
|
|
|
$
|
—
|
|
|
$
|
126,496
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
14,026
|
|
|
|
$
|
—
|
|
|
$
|
14,026
|
|
Financial commodity contracts
|
|
49,201
|
|
|
|
—
|
|
|
|
—
|
|
|
49,201
|
|
||||
Financial commodity contracts - foreign exchange
|
|
—
|
|
|
|
32
|
|
|
|
—
|
|
|
32
|
|
||||
Interest rate contracts
|
|
—
|
|
|
|
23,073
|
|
|
|
—
|
|
|
23,073
|
|
||||
Total liabilities at fair value
|
|
$
|
49,201
|
|
|
|
$
|
37,131
|
|
|
|
$
|
—
|
|
|
$
|
86,332
|
|
(1)
|
Includes various money market funds.
|
6.
|
INVESTMENTS IN EQUITY METHOD INVESTEES
|
(Thousands)
|
December 31,
2016 |
September 30,
2016 |
||||
Steckman Ridge
(1)
|
$
|
122,431
|
|
$
|
123,155
|
|
PennEast
|
22,738
|
|
17,993
|
|
||
Total
|
$
|
145,169
|
|
$
|
141,148
|
|
(1)
|
Includes loans with a total outstanding principal balance of
$70.4 million
for both
December 31, 2016
and
September 30, 2016
. The loans accrue interest at a variable rate that resets quarterly and are due October 1, 2023.
|
7.
|
EARNINGS PER SHARE
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands, except per share amounts)
|
2016
|
2015
|
||||
Net income, as reported
|
$
|
34,929
|
|
$
|
50,282
|
|
Basic earnings per share
|
|
|
||||
Weighted average shares of common stock outstanding-basic
|
86,084
|
|
85,675
|
|
||
Basic earnings per common share
|
$0.41
|
$0.59
|
||||
Diluted earnings per share
|
|
|
||||
Weighted average shares of common stock outstanding-basic
|
86,084
|
|
85,675
|
|
||
Incremental shares
(1)
|
771
|
|
1,001
|
|
||
Weighted average shares of common stock outstanding-diluted
|
86,855
|
|
86,676
|
|
||
Diluted earnings per common share
(2)
|
$0.40
|
$0.58
|
(1)
|
Incremental shares consist primarily of unvested stock awards and performance shares.
|
(2)
|
There were
no
anti-dilutive shares excluded from the calculation of diluted earnings per share for the
three months ended
December 31, 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, 2016
|
86,086
|
|
$
|
221,654
|
|
$
|
215,580
|
|
|
$
|
(15,155
|
)
|
|
$
|
(81,044
|
)
|
$
|
825,556
|
|
$
|
1,166,591
|
|
Net income
|
|
|
|
|
|
|
|
34,929
|
|
34,929
|
|
|||||||||||
Other comprehensive income
|
|
|
|
|
5,832
|
|
|
|
|
5,832
|
|
|||||||||||
Common stock issued:
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Incentive plan
|
200
|
|
499
|
|
3,779
|
|
|
|
|
|
|
|
4,278
|
|
||||||||
Dividend reinvestment plan
(1)
|
139
|
|
|
(883
|
)
|
|
|
|
5,502
|
|
|
4,619
|
|
|||||||||
Cash dividend declared ($.255 per share)
|
|
|
|
|
|
|
|
(21,980
|
)
|
(21,980
|
)
|
|||||||||||
Treasury stock and other
|
(229
|
)
|
|
—
|
|
|
|
|
(8,908
|
)
|
|
(8,908
|
)
|
|||||||||
Balance at December 31, 2016
|
86,196
|
|
$
|
222,153
|
|
$
|
218,476
|
|
|
$
|
(9,323
|
)
|
|
$
|
(84,450
|
)
|
$
|
838,505
|
|
$
|
1,185,361
|
|
(1)
|
The DRP allows NJR, at its option, to use newly issued shares to raise capital. There were
no
new shares issued through the waiver discount feature during
fiscal 2017
.
|
(Thousands)
|
Available for Sale Securities
|
Cash Flow Hedges
|
Postemployment Benefit Obligation
|
Total
|
|||||||||||
Balance at September 30, 2016
|
$
|
4,198
|
|
|
$
|
—
|
|
|
$
|
(19,353
|
)
|
|
$
|
(15,155
|
)
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income, before reclassifications, net of tax of $(4,840), $0, $0, $(4,840)
|
7,042
|
|
|
—
|
|
|
—
|
|
|
7,042
|
|
||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $1,054, $0, $(217), $837
|
(1,527
|
)
|
|
—
|
|
|
317
|
|
(2)
|
(1,210
|
)
|
||||
Net current-period other comprehensive income, net of tax of $(3,786), $0, $(217), $(4,003)
|
5,515
|
|
|
—
|
|
|
317
|
|
|
5,832
|
|
||||
Balance at December 31, 2016
|
$
|
9,713
|
|
|
$
|
—
|
|
|
$
|
(19,036
|
)
|
|
$
|
(9,323
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance as of September 30, 2015
|
$
|
6,385
|
|
|
$
|
—
|
|
|
$
|
(15,779
|
)
|
|
$
|
(9,394
|
)
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), before reclassifications, net of tax of ($2,614), $23, $0, ($2,591)
|
3,701
|
|
|
(41
|
)
|
|
—
|
|
|
3,660
|
|
||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, ($4), ($174), ($178)
|
—
|
|
|
8
|
|
(1)
|
256
|
|
(2)
|
264
|
|
||||
Net current-period other comprehensive income, net of tax of ($2,614), $19, $(174), $(2,769)
|
3,701
|
|
|
(33
|
)
|
|
256
|
|
|
3,924
|
|
||||
Balance as of December 31, 2015
|
$
|
10,086
|
|
|
$
|
(33
|
)
|
|
$
|
(15,523
|
)
|
|
$
|
(5,470
|
)
|
(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)
|
December 31,
2016 |
|
September 30,
2016 |
|
Expiration Dates
|
||||
NJR
|
|
|
|
|
|
||||
Bank revolving credit facilities
(1)
|
$
|
425,000
|
|
|
$
|
425,000
|
|
|
September 2020
|
Notes outstanding at end of period
|
$
|
284,600
|
|
|
$
|
121,700
|
|
|
|
Weighted average interest rate at end of period
|
1.54
|
%
|
|
1.43
|
%
|
|
|
||
Amount available at end of period
(2)
|
$
|
126,010
|
|
|
$
|
288,910
|
|
|
|
NJNG
|
|
|
|
|
|
||||
Bank revolving credit facilities
(1)
|
$
|
250,000
|
|
|
$
|
250,000
|
|
|
May 2019
|
Commercial paper outstanding at end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Weighted average interest rate at end of period
|
—
|
%
|
|
—
|
%
|
|
|
||
Amount available at end of period
(4)
|
$
|
249,269
|
|
|
$
|
249,269
|
|
|
|
(1)
|
Committed credit facilities, which require commitment fees on the unused amounts.
|
(2)
|
Letters of credit outstanding total
$14.4 million
for both
December 31, 2016
and
September 30, 2016
, which reduces amount available by the same amount.
|
(3)
|
Uncommitted credit facilities, which require no commitment fees.
|
(4)
|
Letters of credit outstanding total
$731,000
for both
December 31, 2016
and
September 30, 2016
, which reduces the amount available by the same amount.
|
10.
|
EMPLOYEE BENEFIT PLANS
|
|
Pension
|
OPEB
|
||||||||||
|
Three Months Ended
|
Three Months Ended
|
||||||||||
|
December 31,
|
December 31,
|
||||||||||
(Thousands)
|
2016
|
2015
|
2016
|
2015
|
||||||||
Service cost
|
$
|
2,087
|
|
$
|
1,898
|
|
$
|
1,095
|
|
$
|
1,130
|
|
Interest cost
|
2,443
|
|
2,836
|
|
1,386
|
|
1,564
|
|
||||
Expected return on plan assets
|
(4,828
|
)
|
(5,029
|
)
|
(1,192
|
)
|
(1,211
|
)
|
||||
Recognized actuarial loss
|
2,207
|
|
1,820
|
|
1,093
|
|
819
|
|
||||
Prior service cost amortization
|
27
|
|
28
|
|
(91
|
)
|
(91
|
)
|
||||
Net periodic benefit cost
|
$
|
1,936
|
|
$
|
1,553
|
|
$
|
2,291
|
|
$
|
2,211
|
|
11.
|
INCOME TAXES
|
12.
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
(Thousands)
|
2017
|
2018
|
2019
|
2020
|
2021
|
Thereafter
|
||||||||||||
NJRES:
|
|
|
|
|
|
|
||||||||||||
Natural gas purchases
|
$
|
239,269
|
|
$
|
101,247
|
|
$
|
51,731
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Storage demand fees
|
25,935
|
|
19,079
|
|
12,064
|
|
9,248
|
|
5,914
|
|
3,734
|
|
||||||
Pipeline demand fees
|
56,144
|
|
28,853
|
|
6,761
|
|
2,931
|
|
2,412
|
|
1,416
|
|
||||||
Sub-total NJRES
|
$
|
321,348
|
|
$
|
149,179
|
|
$
|
70,556
|
|
$
|
12,179
|
|
$
|
8,326
|
|
$
|
5,150
|
|
NJNG:
|
|
|
|
|
|
|
||||||||||||
Natural gas purchases
|
$
|
75,679
|
|
$
|
4,511
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Storage demand fees
|
21,865
|
|
25,766
|
|
19,864
|
|
12,802
|
|
7,023
|
|
10,535
|
|
||||||
Pipeline demand fees
|
39,065
|
|
90,931
|
|
91,906
|
|
90,998
|
|
88,295
|
|
732,579
|
|
||||||
Sub-total NJNG
|
$
|
136,609
|
|
$
|
121,208
|
|
$
|
111,770
|
|
$
|
103,800
|
|
$
|
95,318
|
|
$
|
743,114
|
|
Total
(1)
|
$
|
457,957
|
|
$
|
270,387
|
|
$
|
182,326
|
|
$
|
115,979
|
|
$
|
103,644
|
|
$
|
748,264
|
|
(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
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Operating revenues
|
|
|
||||
Natural Gas Distribution
|
|
|
||||
External customers
|
$
|
185,556
|
|
$
|
151,606
|
|
Clean Energy Ventures
|
|
|
||||
External customers
|
7,567
|
|
7,794
|
|
||
Energy Services
|
|
|
||||
External customers
(1)
|
338,930
|
|
276,182
|
|
||
Intercompany
|
(1,749
|
)
|
2,511
|
|
||
Subtotal
|
530,304
|
|
438,093
|
|
||
Home Services and Other
|
|
|
||||
External customers
|
8,975
|
|
8,676
|
|
||
Intercompany
|
1,031
|
|
897
|
|
||
Eliminations
|
718
|
|
(3,408
|
)
|
||
Total
|
$
|
541,028
|
|
$
|
444,258
|
|
Depreciation and amortization
|
|
|
||||
Natural Gas Distribution
|
$
|
12,030
|
|
$
|
11,238
|
|
Clean Energy Ventures
|
7,041
|
|
5,110
|
|
||
Energy Services
|
16
|
|
23
|
|
||
Midstream
|
1
|
|
1
|
|
||
Subtotal
|
19,088
|
|
16,372
|
|
||
Home Services and Other
|
221
|
|
227
|
|
||
Eliminations
|
(49
|
)
|
(117
|
)
|
||
Total
|
$
|
19,260
|
|
$
|
16,482
|
|
Interest income
(2)
|
|
|
||||
Natural Gas Distribution
|
$
|
75
|
|
$
|
68
|
|
Energy Services
|
—
|
|
72
|
|
||
Midstream
|
462
|
|
264
|
|
||
Subtotal
|
537
|
|
404
|
|
||
Home Services and Other
|
121
|
|
37
|
|
||
Eliminations
|
(583
|
)
|
(371
|
)
|
||
Total
|
$
|
75
|
|
$
|
70
|
|
(1)
|
Includes sales to Canada, which accounted for
1.9
and
3.5 percent
of total operating revenues during the
three months ended
December 31, 2016
and
2015
.
|
(2)
|
Included in other income, net on the Unaudited Condensed Consolidated Statements of Operations.
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Interest expense, net of capitalized interest
|
|
|
||||
Natural Gas Distribution
|
$
|
6,824
|
|
$
|
4,588
|
|
Clean Energy Ventures
|
3,324
|
|
2,053
|
|
||
Energy Services
|
571
|
|
208
|
|
||
Midstream
|
56
|
|
42
|
|
||
Subtotal
|
10,775
|
|
6,891
|
|
||
Home Services and Other
|
74
|
|
—
|
|
||
Eliminations
|
(234
|
)
|
(114
|
)
|
||
Total
|
$
|
10,615
|
|
$
|
6,777
|
|
Income tax provision (benefit)
|
|
|
||||
Natural Gas Distribution
|
$
|
14,887
|
|
$
|
13,507
|
|
Clean Energy Ventures
|
(11,887
|
)
|
(11,734
|
)
|
||
Energy Services
|
(3,176
|
)
|
4,905
|
|
||
Midstream
|
1,649
|
|
1,640
|
|
||
Subtotal
|
1,473
|
|
8,318
|
|
||
Home Services and Other
|
(245
|
)
|
(1,130
|
)
|
||
Eliminations
|
790
|
|
(466
|
)
|
||
Total
|
$
|
2,018
|
|
$
|
6,722
|
|
Equity in earnings of affiliates
|
|
|
||||
Midstream
|
$
|
3,331
|
|
$
|
3,545
|
|
Eliminations
|
(1,020
|
)
|
(1,139
|
)
|
||
Total
|
$
|
2,311
|
|
$
|
2,406
|
|
Net financial earnings
|
|
|
||||
Natural Gas Distribution
|
$
|
30,348
|
|
$
|
30,926
|
|
Clean Energy Ventures
|
2,842
|
|
7,652
|
|
||
Energy Services
|
3,487
|
|
10,304
|
|
||
Midstream
|
2,387
|
|
2,344
|
|
||
Subtotal
|
39,064
|
|
51,226
|
|
||
Home Services and Other
|
1,542
|
|
259
|
|
||
Eliminations
|
(223
|
)
|
(218
|
)
|
||
Total
|
$
|
40,383
|
|
$
|
51,267
|
|
Capital expenditures
|
|
|
||||
Natural Gas Distribution
|
$
|
38,855
|
|
$
|
49,040
|
|
Clean Energy Ventures
|
46,785
|
|
45,006
|
|
||
Subtotal
|
85,640
|
|
94,046
|
|
||
Home Services and Other
|
171
|
|
797
|
|
||
Total
|
$
|
85,811
|
|
$
|
94,843
|
|
Investments in equity investees
|
|
|
||||
Midstream
|
$
|
4,636
|
|
$
|
2,846
|
|
Total
|
$
|
4,636
|
|
$
|
2,846
|
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Net financial earnings
|
$
|
40,383
|
|
$
|
51,267
|
|
Less:
|
|
|
||||
Unrealized loss (gain) on derivative instruments and related transactions
|
28,302
|
|
(1,135
|
)
|
||
Tax effect
|
(9,757
|
)
|
413
|
|
||
Effects of economic hedging related to natural gas inventory
|
(17,939
|
)
|
3,813
|
|
||
Tax effect
|
6,204
|
|
(1,385
|
)
|
||
Net income to NFE tax adjustment
|
(1,356
|
)
|
(721
|
)
|
||
Net income
|
$
|
34,929
|
|
$
|
50,282
|
|
•
|
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)
|
December 31,
2016 |
September 30,
2016 |
||||
Assets at end of period:
|
|
|
||||
Natural Gas Distribution
|
$
|
2,554,928
|
|
$
|
2,517,401
|
|
Clean Energy Ventures
|
677,978
|
|
665,696
|
|
||
Energy Services
|
470,282
|
|
327,626
|
|
||
Midstream
|
201,128
|
|
186,259
|
|
||
Subtotal
|
3,904,316
|
|
3,696,982
|
|
||
Home Services and Other
|
132,427
|
|
109,487
|
|
||
Intercompany assets
(1)
|
(87,237
|
)
|
(87,899
|
)
|
||
Total
|
$
|
3,949,506
|
|
$
|
3,718,570
|
|
(1)
|
Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.
|
14.
|
RELATED PARTY TRANSACTIONS
|
(Thousands)
|
December 31,
2016 |
September 30,
2016 |
||||
NJNG
|
$
|
778
|
|
$
|
775
|
|
NJRES
|
377
|
|
375
|
|
||
Total
|
$
|
1,155
|
|
$
|
1,150
|
|
|
Three Months Ended
|
||||||||||
|
December 31,
|
||||||||||
(Thousands)
|
2016
|
|
2015
|
||||||||
Net Income (Loss)
|
|
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
30,348
|
|
87
|
%
|
|
$
|
30,926
|
|
61
|
%
|
Clean Energy Ventures
|
4,198
|
|
12
|
|
|
8,373
|
|
17
|
|
||
Energy Services
|
(4,790
|
)
|
(14
|
)
|
|
9,396
|
|
18
|
|
||
Midstream
|
2,387
|
|
7
|
|
|
2,344
|
|
5
|
|
||
Home Services and Other
|
1,542
|
|
4
|
|
|
259
|
|
1
|
|
||
Eliminations
(1)
|
1,244
|
|
4
|
|
|
(1,016
|
)
|
(2
|
)
|
||
Total
|
$
|
34,929
|
|
100
|
%
|
|
$
|
50,282
|
|
100
|
%
|
(1)
|
Consists
of transactions between subsidiaries that are eliminated in consolidation
.
|
(Thousands)
|
December 31,
2016 |
|
September 30,
2016 |
||||||||
Assets
|
|
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
2,554,928
|
|
65
|
%
|
|
$
|
2,517,401
|
|
68
|
%
|
Clean Energy Ventures
|
677,978
|
|
17
|
|
|
665,696
|
|
18
|
|
||
Energy Services
|
470,282
|
|
12
|
|
|
327,626
|
|
9
|
|
||
Midstream
|
201,128
|
|
5
|
|
|
186,259
|
|
5
|
|
||
Home Services and Other
|
132,427
|
|
3
|
|
|
109,487
|
|
3
|
|
||
Intercompany assets
(1)
|
(87,237
|
)
|
(2
|
)
|
|
(87,899
|
)
|
(3
|
)
|
||
Total
|
$
|
3,949,506
|
|
100
|
%
|
|
$
|
3,718,570
|
|
100
|
%
|
(1)
|
Consists of transactions between subsidiaries that are eliminated in consolidation.
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
($ in Thousands)
|
2016
|
2015
|
||||
Net income
|
$
|
34,929
|
|
$
|
50,282
|
|
Add:
|
|
|
||||
Unrealized loss (gain) on derivative instruments and related transactions
|
28,302
|
|
(1,135
|
)
|
||
Tax effect
|
(9,757
|
)
|
413
|
|
||
Effects of economic hedging related to natural gas inventory
|
(17,939
|
)
|
3,813
|
|
||
Tax effect
|
6,204
|
|
(1,385
|
)
|
||
NFE tax adjustment
|
(1,356
|
)
|
(721
|
)
|
||
Net financial earnings
|
$
|
40,383
|
|
$
|
51,267
|
|
Basic earnings per share
|
$
|
0.41
|
|
$
|
0.59
|
|
Add:
|
|
|
||||
Unrealized loss (gain) on derivative instruments and related transactions
|
0.33
|
|
(0.01
|
)
|
||
Tax effect
|
(0.11
|
)
|
0.01
|
|
||
Effects of economic hedging related to natural gas inventory
|
(0.21
|
)
|
0.04
|
|
||
Tax effect
|
0.07
|
|
(0.02
|
)
|
||
NFE tax adjustment
|
(0.02
|
)
|
(0.01
|
)
|
||
Basic NFE per share
|
$
|
0.47
|
|
$
|
0.60
|
|
(1)
|
Effects of hedging natural gas inventory transactions where the economic impact is realized in a future period.
|
|
Three Months Ended
|
||||||||||
|
December 31,
|
||||||||||
($ in Thousands)
|
2016
|
|
2015
|
||||||||
Net Financial Earnings
|
|
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
30,348
|
|
75
|
%
|
|
$
|
30,926
|
|
59
|
%
|
Clean Energy Ventures
|
2,842
|
|
7
|
|
|
7,652
|
|
15
|
|
||
Energy Services
|
3,487
|
|
9
|
|
|
10,304
|
|
20
|
|
||
Midstream
|
2,387
|
|
6
|
|
|
2,344
|
|
5
|
|
||
Home Services and Other
|
1,542
|
|
4
|
|
|
259
|
|
1
|
|
||
Eliminations
(1)
|
(223
|
)
|
(1
|
)
|
|
(218
|
)
|
—
|
|
||
Total
|
$
|
40,383
|
|
100
|
%
|
|
$
|
51,267
|
|
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 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
2019
;
|
•
|
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 with the NJDEP and BPU to manage its financial obligations related to remediation activities associated with its former MGP sites.
|
•
|
an increase in base rates in the amount of
$45 million
. The base rate increase includes a return on common equity of
9.75 percent
, a common equity ratio of
52.5 percent
and an increase in the overall depreciation rate from
2.34 percent
to
2.4 percent
;
|
•
|
the five-year extension of SAFE II and estimated cost, excluding AFUDC, is approximately
$200 million
and related costs to be recovered on an accelerated basis are approximately
$157.5 million
. The remaining
$42.5 million
in capital expenditures will be requested for recovery in a future base rate case. As a condition of the extension approval, NJNG is required to file a base rate case no later than November 2019;
|
•
|
rate recovery of NJ RISE capital investment costs through June 30, 2016, and the filing for recovery of future NJ RISE capital investment costs to be recovered, will occur in conjunction with SAFE II, commencing with the rate recovery filing to be submitted in March 2017;
|
•
|
recovery of NJNG’s NGV and LNG plant investments; and
|
•
|
recovery of other costs previously deferred in regulatory assets over seven years.
|
|
December 31,
2016 |
December 31,
2015 |
||
Firm customers
|
|
|
||
Residential
|
451,587
|
|
441,464
|
|
Commercial, industrial & other
|
27,995
|
|
27,240
|
|
Residential transport
|
35,698
|
|
37,352
|
|
Commercial transport
|
10,149
|
|
10,184
|
|
Total firm customers
|
525,429
|
|
516,240
|
|
Other
|
64
|
|
62
|
|
Total customers
|
525,493
|
|
516,302
|
|
(1)
|
Compared with the CIP 20-year average, weather was
6 percent
and
33.6 percent
warmer
-than-normal during the three months ended
December 31, 2016
and
2015
, respectively.
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Operating revenues
|
$
|
185,556
|
|
$
|
151,606
|
|
Less:
|
|
|
||||
Gas purchases
(1)
|
64,186
|
|
45,243
|
|
||
Energy and other taxes
|
12,149
|
|
8,162
|
|
||
Regulatory rider expense
|
12,601
|
|
9,628
|
|
||
Operation and maintenance
|
33,218
|
|
29,628
|
|
||
Depreciation and amortization
|
12,030
|
|
11,238
|
|
||
Operating income
|
51,372
|
|
47,707
|
|
||
Other income, net
|
687
|
|
1,314
|
|
||
Interest expense, net of capitalized interest
|
6,824
|
|
4,588
|
|
||
Income tax provision
|
14,887
|
|
13,507
|
|
||
Net income
|
$
|
30,348
|
|
$
|
30,926
|
|
(1)
|
Includes related party transactions of approximately
$2.9 million
and
$1.4 million
for the
three months ended
December 31, 2016
and
2015
, respectively, a portion of which is eliminated in consolidation.
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
|
2016 v. 2015
|
|||||
(Millions)
|
Operating
revenues
|
Gas
purchases
|
||||
Firm sales
|
$
|
42.5
|
|
$
|
19.4
|
|
Base rate impact
|
8.1
|
|
—
|
|
||
Off-system sales
|
5.2
|
|
5.2
|
|
||
CIP adjustments
|
(19.6
|
)
|
—
|
|
||
Average BGSS rates
(1)
|
(6.5
|
)
|
(6.1
|
)
|
||
Other
(2)
|
4.3
|
|
0.4
|
|
||
Total increase
|
$
|
34.0
|
|
$
|
18.9
|
|
(1)
|
Operating revenues includes an increase in sales tax of
$(400,000)
during the
three months ended
December 31, 2016
, compared with the
three months ended
December 31, 2015
, respectively.
|
(2)
|
Other includes changes in rider rates, including those related to NJCEP and other programs.
|
•
|
increased firm sales due primarily to higher usage related to weather being
38.1 percent
colder
;
|
•
|
higher
off-system sales due primarily to a
49.9 percent
increase
in the average price of gas sold, partially offset by a
17.7 percent
reduction
in volumes
; partially offset by
|
•
|
a
decrease
in CIP due primarily to weather, as well as changes in the CIP as a result of the settlement of the base rate case.
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Operating revenues
|
$
|
185,556
|
|
$
|
151,606
|
|
Less:
|
|
|
||||
Gas purchases
|
64,186
|
|
45,243
|
|
||
Energy and other taxes
|
10,882
|
|
6,908
|
|
||
Regulatory rider expense
|
12,601
|
|
9,628
|
|
||
Utility gross margin
|
$
|
97,887
|
|
$
|
89,827
|
|
•
|
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
|
||||||||||
|
December 31,
|
||||||||||
|
2016
|
|
2015
|
||||||||
($ in thousands)
|
Margin
|
Bcf
|
|
Margin
|
Bcf
|
||||||
Utility gross margin/throughput
|
|
|
|
|
|
||||||
Residential
|
$
|
62,498
|
|
12.6
|
|
|
$
|
55,076
|
|
8.9
|
|
Commercial, industrial and other
|
13,696
|
|
2.4
|
|
|
13,279
|
|
1.7
|
|
||
Firm transportation
|
16,285
|
|
4.5
|
|
|
15,547
|
|
3.4
|
|
||
Total utility firm gross margin/throughput
|
92,479
|
|
19.5
|
|
|
83,902
|
|
14.0
|
|
||
BGSS incentive programs
|
3,784
|
|
43.6
|
|
|
4,535
|
|
55.9
|
|
||
Interruptible/off-tariff agreements
|
1,624
|
|
13.3
|
|
|
1,390
|
|
16.0
|
|
||
Total utility gross margin/throughput
|
$
|
97,887
|
|
76.4
|
|
|
$
|
89,827
|
|
85.9
|
|
|
Three Months Ended
|
||||
|
December 31,
|
||||
(Thousands)
|
2016 v. 2015
|
||||
Compensation and benefits
|
|
$
|
1,294
|
|
|
Shared corporate costs
|
|
1,191
|
|
|
|
Base rate impact
|
|
745
|
|
|
|
Other
|
|
360
|
|
|
|
Total increase
|
|
$
|
3,590
|
|
|
•
|
increased compensation costs due primarily to increases in headcount, incentives, as well as the timing of capitalized labor, healthcare premiums and increased pension/OPEB benefit costs related to changes in actuarial assumptions, partially offset by implementation of the spot rate method to measure interest and service cost components;
|
•
|
increased shared corporate costs resulting primarily from increases in headcount, incentives and healthcare premiums; and
|
•
|
an increase due to the amortization of regulatory assets resulting from the settlement of the base rate case.
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Operating revenues
|
$
|
7,567
|
|
$
|
7,794
|
|
Less:
|
|
|
||||
Operation and maintenance
|
4,404
|
|
3,857
|
|
||
Depreciation and amortization
|
7,041
|
|
5,110
|
|
||
Other taxes
|
415
|
|
253
|
|
||
Operating (loss)
|
(4,293
|
)
|
(1,426
|
)
|
||
Other (expense) income, net
|
(72
|
)
|
118
|
|
||
Interest expense, net
|
3,324
|
|
2,053
|
|
||
Income tax (benefit)
|
(11,887
|
)
|
(11,734
|
)
|
||
Net income
|
$
|
4,198
|
|
$
|
8,373
|
|
|
Three Months Ended
|
|||
|
December 31,
|
|||
|
2016
|
2015
|
||
Beginning balance as of October 1,
|
24,135
|
|
33,203
|
|
SRECs generated
|
41,443
|
|
35,014
|
|
SRECs delivered
|
(10,319
|
)
|
(21,182
|
)
|
Ending balance as of December 31,
|
55,259
|
|
47,035
|
|
Fiscal Year
|
Percent of SRECs Hedged
|
2017
|
92%
|
2018
|
72%
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Net income
|
$
|
4,198
|
|
$
|
8,373
|
|
Add:
|
|
|
||||
Net income to NFE tax adjustment
|
(1,356
|
)
|
(721
|
)
|
||
Net financial earnings
|
$
|
2,842
|
|
$
|
7,652
|
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Operating revenues
(1)
|
$
|
337,181
|
|
$
|
278,693
|
|
Less:
|
|
|
||||
Gas purchases (including demand charges
(2)(3)
)
|
339,087
|
|
260,239
|
|
||
Operation and maintenance
|
5,018
|
|
3,757
|
|
||
Depreciation and amortization
|
16
|
|
23
|
|
||
Other taxes
|
455
|
|
237
|
|
||
Operating (loss) income
|
(7,395
|
)
|
14,437
|
|
||
Other income
|
—
|
|
72
|
|
||
Interest expense, net
|
571
|
|
208
|
|
||
Income tax (benefit) provision
|
(3,176
|
)
|
4,905
|
|
||
Net (loss) income
|
$
|
(4,790
|
)
|
$
|
9,396
|
|
(1)
|
Includes related party transactions of approximately
$1.7 million
and
$2.5 million
for the three months ended
December 31, 2016
and
2015
, respectively, which is eliminated in consolidation.
|
(2)
|
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.
|
(3)
|
Includes related party transactions of approximately
$1.2 million
and
$6.2 million
for the
three months ended
December 31, 2016
and
2015
, respectively, a portion of which are eliminated in consolidation.
|
|
Three Months Ended
|
|||
|
December 31,
|
|||
(in Bcf)
|
2016
|
2015
|
||
Net short futures contracts
|
76.4
|
|
120.8
|
|
Net long options
|
0.5
|
|
5.8
|
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Operating revenues
|
$
|
337,181
|
|
$
|
278,693
|
|
Less: Gas purchases
|
339,087
|
|
260,239
|
|
||
Add:
|
|
|
||||
Unrealized loss (gain) on derivative instruments and related transactions
(1)
|
30,592
|
|
(2,387
|
)
|
||
Effects of economic hedging related to natural gas inventory
(2)
|
(17,939
|
)
|
3,813
|
|
||
Financial margin
|
$
|
10,747
|
|
$
|
19,880
|
|
(1)
|
Includes unrealized (gains) related to an intercompany transaction between NJNG and NJRES that have been eliminated in consolidation of approximately
$2.3 million
and
$1.3 million
for the
three months ended
December 31, 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
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Operating (loss) income
|
$
|
(7,395
|
)
|
$
|
14,437
|
|
Add:
|
|
|
||||
Operation and maintenance
|
5,018
|
|
3,757
|
|
||
Depreciation and amortization
|
16
|
|
23
|
|
||
Other taxes
|
455
|
|
237
|
|
||
Subtotal
|
(1,906
|
)
|
18,454
|
|
||
Add:
|
|
|
||||
Unrealized loss (gain) on derivative instruments and related transactions
|
30,592
|
|
(2,387
|
)
|
||
Effects of economic hedging related to natural gas inventory
|
(17,939
|
)
|
3,813
|
|
||
Financial margin
|
$
|
10,747
|
|
$
|
19,880
|
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Net (loss) income
|
$
|
(4,790
|
)
|
$
|
9,396
|
|
Add:
|
|
|
||||
Unrealized loss (gain) on derivative instruments and related transactions
|
30,592
|
|
(2,387
|
)
|
||
Tax effect
(1)
|
(10,580
|
)
|
867
|
|
||
Effects of economic hedging related to natural gas inventory
|
(17,939
|
)
|
3,813
|
|
||
Tax effect
|
6,204
|
|
(1,385
|
)
|
||
Net financial earnings
|
$
|
3,487
|
|
$
|
10,304
|
|
(1)
|
Includes taxes related to an intercompany transaction between NJNG and NJRES that have been eliminated in consolidation of approximately
$823,000
and
$(454,000)
for the
three months ended
December 31, 2016
and
2015
, respectively.
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Equity in earnings of affiliates
|
$
|
3,331
|
|
$
|
3,545
|
|
Other income, net
|
$
|
917
|
|
$
|
632
|
|
Income tax provision
|
$
|
1,649
|
|
$
|
1,640
|
|
Net income
|
$
|
2,387
|
|
$
|
2,344
|
|
|
Three Months Ended
|
|||||
|
December 31,
|
|||||
(Thousands)
|
2016
|
2015
|
||||
Operating revenues
|
$
|
10,006
|
|
$
|
9,573
|
|
Operation and maintenance
|
$
|
10,164
|
|
$
|
9,393
|
|
Energy and other taxes
|
$
|
1,076
|
|
$
|
983
|
|
Other income, net
|
$
|
2,827
|
|
$
|
159
|
|
Income tax benefit
|
$
|
(245
|
)
|
$
|
(1,130
|
)
|
Net income
|
$
|
1,542
|
|
$
|
259
|
|
|
December 31,
2016 |
September 30,
2016 |
||
Common stock equity
|
46
|
%
|
48
|
%
|
Long-term debt
|
39
|
|
44
|
|
Short-term debt
|
15
|
|
8
|
|
Total
|
100
|
%
|
100
|
%
|
|
Balance
|
Increase
|
Less
|
Balance
|
||||||||||||
(Thousands)
|
September 30, 2016
|
(Decrease) in Fair
Market Value
|
Amounts
Settled
|
December 31,
2016 |
||||||||||||
NJNG
|
|
$
|
(2,485
|
)
|
|
$
|
12,383
|
|
|
$
|
(1,114
|
)
|
|
$
|
11,012
|
|
NJRES
|
|
(21,742
|
)
|
|
(33,763
|
)
|
|
(1,951
|
)
|
|
(53,554
|
)
|
||||
Total
|
|
$
|
(24,227
|
)
|
|
$
|
(21,380
|
)
|
|
$
|
(3,065
|
)
|
|
$
|
(42,542
|
)
|
(Thousands)
|
2017
|
2018
|
2019 - 2021
|
After 2021
|
Total
Fair Value
|
|||||||||||||
Price based on NYMEX/CME
|
$
|
(19,756
|
)
|
$
|
1,563
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(18,193
|
)
|
Price based on ICE
|
(22,763
|
)
|
(1,698
|
)
|
|
112
|
|
|
—
|
|
|
(24,349
|
)
|
|||||
Total
|
$
|
(42,519
|
)
|
$
|
(135
|
)
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
(42,542
|
)
|
|
|
Volume Bcf
|
Price per MMBtu
(1)
|
Amounts included in Derivatives (Thousands)
|
||||
NJNG
|
Futures
|
24.3
|
|
$2.62 - $5.58
|
|
$
|
11,012
|
|
NJRES
|
Futures
|
(76.4
|
)
|
$2.06 - $6.47
|
|
(53,563
|
)
|
|
|
Options
|
0.5
|
|
$0.24 - $0.24
|
|
9
|
|
|
Total
|
|
|
|
|
$
|
(42,542
|
)
|
(1)
|
Million British thermal unit
|
|
Balance
|
Increase
|
Less
|
Balance
|
||||||||||
(Thousands)
|
September 30, 2016
|
(Decrease) in Fair
Market Value |
Amounts
Settled |
December 31,
2016 |
||||||||||
NJNG - Prices based on other external data
|
|
$
|
(919
|
)
|
|
764
|
|
|
(1,260
|
)
|
|
$
|
1,105
|
|
NJRES - Prices based on other external data
|
|
(2,891
|
)
|
|
(5,659
|
)
|
|
(9,048
|
)
|
|
498
|
|
||
Total
|
|
$
|
(3,810
|
)
|
|
(4,895
|
)
|
|
(10,308
|
)
|
|
$
|
1,603
|
|
|
Balance
|
Increase
|
Less
|
Balance
|
||||||||||
(Thousands)
|
September 30, 2016
|
(Decrease) in Fair
Market Value |
Amounts
Settled |
December 31,
2016 |
||||||||||
NJNG - Prices based on other external data
|
|
$
|
(23,073
|
)
|
|
20,371
|
|
|
—
|
|
|
$
|
(2,702
|
)
|
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
|
$
|
—
|
|
$
|
(11,225
|
)
|
$
|
(22,451
|
)
|
$
|
(33,677
|
)
|
$
|
(44,903
|
)
|
Ending derivative fair value
|
$
|
(51,099
|
)
|
$
|
(62,324
|
)
|
$
|
(73,550
|
)
|
$
|
(84,776
|
)
|
$
|
(96,002
|
)
|
|
|
|
|
|
|
||||||||||
Percent decrease in NYMEX natural gas futures prices
|
0%
|
(5)%
|
(10)%
|
(15)%
|
(20)%
|
||||||||||
Estimated change in derivative fair value
|
$
|
—
|
|
$
|
11,225
|
|
$
|
22,451
|
|
$
|
33,677
|
|
$
|
44,903
|
|
Ending derivative fair value
|
$
|
(51,099
|
)
|
$
|
(39,874
|
)
|
$
|
(28,648
|
)
|
$
|
(17,422
|
)
|
$
|
(6,196
|
)
|
(Thousands)
|
Gross Credit Exposure
|
Net Credit Exposure
|
||||||
Investment grade
|
|
$
|
192,149
|
|
|
$
|
161,229
|
|
Noninvestment grade
|
|
40,057
|
|
|
12,358
|
|
||
Internally rated investment grade
|
|
14,497
|
|
|
6,435
|
|
||
Internally rated noninvestment grade
|
|
10,865
|
|
|
659
|
|
||
Total
|
|
$
|
257,568
|
|
|
$
|
180,681
|
|
(Thousands)
|
Gross Credit Exposure
|
Net Credit Exposure
|
||||||
Investment grade
|
|
$
|
7,876
|
|
|
$
|
7,480
|
|
Noninvestment grade
|
|
400
|
|
|
142
|
|
||
Internally rated investment grade
|
|
272
|
|
|
230
|
|
||
Internally rated noninvestment grade
|
|
12,217
|
|
|
50
|
|
||
Total
|
|
$
|
20,765
|
|
|
$
|
7,902
|
|
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
|
||||
10/01/16 - 10/31/16
|
105,000
|
$
|
31.70
|
|
105,000
|
|
|
2,431,053
|
11/01/16 - 11/30/16
|
—
|
—
|
|
—
|
|
|
2,431,053
|
|
12/01/16 - 12/31/16
|
—
|
—
|
|
—
|
|
|
2,431,053
|
|
Total
|
105,000
|
$
|
31.70
|
|
105,000
|
|
|
2,431,053
|
Exhibit
Number
|
Exhibit Description
|
10.1
|
Summary of New Jersey Resources Corporation Non-Employee Director Compensation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, as filed on November 18, 2016)
|
|
|
10.2+
|
New Jersey Resources Corporation 2007 Stock Award and Incentive Plan Performance Share Units Agreement - NFE
|
|
|
10.3+
|
New Jersey Resources Corporation Deferred Stock Retention Award Agreement
|
|
|
10.4+
|
New Jersey Resources Corporation 2007 Stock Award and Incentive Plan Performance Share Units Agreement - Total Shareholder Return
|
|
|
10.5+
|
New Jersey Resources Corporation 2007 Stock Award and Incentive Plan Performance Based Restricted Stock Units Agreement
|
|
|
10.6+
|
New Jersey Resources Corporation 2007 Stock Award and Incentive Plan Restricted Stock Units 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 December 31, 2016, furnished in XBRL (eXtensible Business Reporting Language)).
|
+
|
Filed herewith.
|
|
|
NEW JERSEY RESOURCES CORPORATION
|
|
|
(Registrant)
|
Date:
|
February 8, 2017
|
|
|
|
By:/s/ Patrick Migliaccio
|
|
|
Patrick Migliaccio
|
|
|
Senior Vice President and
|
|
|
Chief Financial Officer
|
Cumulative NFEPS
|
Performance Share Units Earned as a Percentage of Target
Performance Share Units
|
|
|
Less than $4.30
|
0%
|
$4.30
|
50%
|
$5.38
|
100%
|
$6.46 or Greater
|
150%
|
a.
|
“Business of the Company” means the following areas of its business which are selected below, which Employee acknowledges are areas of the Company’s business in which Employee has responsibilities:
|
___
|
Natural Gas Distribution
: Consists of New Jersey Natural Gas Company, a natural gas utility company that provides regulated retail natural gas service to residential and commercial customers in central and northern New Jersey and participates in the off-system sales and capacity release markets.
|
___
|
Energy Services
: Maintains and transacts around a portfolio of physical assets consisting of natural gas storage and transportation contracts and also provides wholesale energy management services to other energy companies and natural gas producers in market areas including states from the Gulf Coast and Mid-continent regions to the Appalachian and Northeast regions, the West Coast and Canada.
|
___
|
Clean Energy Ventures
: Investor, owner, and operator in the renewable energy sector, including investments in wind and residential and commercial rooftop and ground mount solar systems.
|
___
|
Midstream Assets
: Includes investments in natural gas transportation and storage assets and is comprised of the following: an equity investment in Dominion Midstream Partners, LP, which holds ownership interests in the Iroquois Gas Transmission System, Cove Point and Dominion Carolina Gas Transmission; Steckman Ridge, which is a partnership that owns and operates a 17.7 Bcf natural gas storage facility, with up to 12 Bcf working capacity, in western Pennsylvania that is 50 percent owned by a Company Subsidiary; and a 20 percent ownership interest in the proposed PennEast Pipeline, a 118-mile pipeline designed to bring natural gas produced in the Marcellus Shale region to homes and businesses in Pennsylvania and New Jersey.
|
___
|
Home Services
: Consists of NJR Home Services Company, which provides Heating, Ventilating, and Air Conditioning (HVAC) service, sales and installation of appliances, as well as installation of solar equipment.
|
b.
|
“Confidential Information” means all valuable and/or proprietary information (in oral, written, electronic or other forms) belonging to or pertaining to the Company, its customers and vendors, that is not generally known or publicly available, and which would be useful to competitors of the Company or otherwise damaging to the Company if disclosed. Confidential Information may include, but is not necessarily limited to: (i) the identity of the Company’s customers or potential customers, their purchasing histories, and the terms or proposed terms upon which the Company offers or may offer its products and services to such customers, (ii) the identity of the Company’s vendors or potential vendors, and the terms or proposed terms upon which the Company may purchase products and services from such vendors, (iii) technology used by the Company to provide its services, (iv) the terms and conditions upon which the Company employs its employees and independent contractors, (v) marketing and/or business plans and strategies, (vi) financial reports and
|
c.
|
“Material Contact” means contact in person, by telephone, or by paper or electronic correspondence, or the supervision of those who have such conduct, and which is done in furtherance of the business interests of the company and within the last 36 months.
|
d.
|
“Restricted Territory” consists of the following areas, to the extent such areas have been identified as applicable to the definition of the “Business of the company” above:
|
(a)
|
Competitive Employment
. In the event that Employee, during the Restricted Period and within the Restricted Territory, directly or indirectly, whether on Employee’s own behalf or on behalf of any other person or entity, performs services of the type which are the same as or similar to those conducted, authorized, offered or provided by Employee to NJR within the 24 months prior to Employee’s termination or resignation, and which support business activities which compete with the Business of NJR.
|
(b)
|
Recruitment of NJR Employees and Contractors
. In the event that Employee, during the Restricted Period, directly or indirectly, whether on Employee’s own behalf or on behalf of any other person or entity, solicits or induces any employee or independent contractor of NJR with whom Employee had Material Contact to terminate or lessen such employment or contract with NJR.
|
(c)
|
Solicitation of NJR Customers
. In the event that Employee, during the Restricted Period, directly or indirectly, whether on Employee’s own behalf or on behalf of any other person or entity, solicits any actual or prospective customers of NJR with whom Employee had Material Contact for the purpose of selling any products or services which compete with the Business of NJR.
|
(d)
|
Solicitation of NJR Vendors.
In the event that Employee, during the Restricted Period, directly or indirectly, whether on Employee’s own behalf or on behalf of any other person or entity, solicits any actual or prospective vendor of NJR with whom Employee had Material Contact for the purpose of purchasing products or services to support business activities which compete with the Business of NJR.
|
(e)
|
Breach of Confidentiality
. In the event that Employee, at any time, directly or indirectly, divulges or makes use of any Confidential Information of NJR other than in the performance of Employee’s duties for NJR. This provision does not limit the remedies available to NJR under common or statutory law as to trade secrets or other forms of confidential information, which may impose longer duties of non-disclosure and provide for injunctive relief and damages.
|
(f)
|
Return of Property and Information
. In the event that Employee fails to return all of NJR’s property and information (whether confidential or not) within Employee’s possession or control within seven (7) calendar days following the termination or resignation of Employee from employment with NJR. Such property and information includes, but is not limited to, the original and any copy (regardless of the manner in which it is recorded) of all information provided by NJR to Employee or which Employee has developed or collected in the scope of Employee’s employment with NJR, as well as all NJR-issued equipment, supplies, accessories, vehicles, keys, instruments, tools, devices, computers, cell phones, pagers, materials, documents, plans, records, notebooks, drawings, or papers. Upon request by NJR, Employee shall certify in writing that Employee has complied with this provision, and has permanently deleted all NJR information from any computers or other electronic storage devices or media owned by Employee. Employee may only retain information relating to the Employee’s benefit plans and compensation to the extent needed to prepare Employee’s tax returns.
|
(g)
|
Disparagement
. In the event that Employee makes any statements, either verbally or in writing, that are disparaging with regard to NJR or any of its subsidiaries or their respective executives and Board members.
|
(h)
|
Termination for Cause
. In the event that Employee’s employment with NJR and its subsidiaries is terminated for Cause.
|
a.
|
“Business of NJR” means the following areas of its business which are selected below, which Employee acknowledges are areas of NJR’s business in which Employee has responsibilities:
|
___
|
Natural Gas Distribution
: Consists of New Jersey Natural Gas Company, a natural gas utility company that provides regulated retail natural gas service to residential and commercial customers in central and northern New Jersey and participates in the off-system sales and capacity release markets.
|
___
|
Energy Services
: Maintains and transacts around a portfolio of physical assets consisting of natural gas storage and transportation contracts and also provides wholesale energy management services to other energy companies and natural gas producers in market areas including states from the Gulf Coast and Mid-continent regions to the Appalachian and Northeast regions, the West Coast and Canada.
|
___
|
Clean Energy Ventures
: Investor, owner, and operator in the renewable energy sector, including investments in wind and residential and commercial rooftop and ground mount solar systems.
|
___
|
Midstream Assets
: Includes investments in natural gas transportation and storage assets and is comprised of the following: an equity investment in Dominion Midstream Partners, LP, which holds ownership interests in the Iroquois Gas Transmission System, Cove Point and Dominion Carolina Gas Transmission; Steckman Ridge, which is a partnership that owns and operates a 17.7 Bcf natural gas storage facility, with up to 12 Bcf working capacity, in western Pennsylvania that is 50 percent owned by an NJR Subsidiary; and a 20 percent ownership interest in the proposed PennEast Pipeline, a 118-mile pipeline designed to bring natural gas produced in the Marcellus Shale region to homes and businesses in Pennsylvania and New Jersey.
|
___
|
Home Services
: Consists of NJR Home Services Company, which provides Heating, Ventilating, and Air Conditioning (HVAC) service, sales and installation of appliances, as well as installation of solar equipment.
|
b.
|
"Cause" has the same meaning as in any employment or similar agreement between NJR and the Employee or, if no such agreement or definition exists, then “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.
|
c.
|
“Confidential Information” means all valuable and/or proprietary information (in oral, written, electronic or other forms) belonging to or pertaining to NJR, its customers and vendors, that is not generally known or publicly available, and which would be useful to competitors of NJR or otherwise damaging to NJR if disclosed. Confidential Information may include, but is not necessarily limited to: (i) the identity of NJR’s customers or potential customers, their purchasing histories, and the terms or proposed terms upon which NJR offers or may offer
|
d.
|
“Material Contact” means contact in person, by telephone, or by paper or electronic correspondence, or the supervision of those who have such conduct, and which is done in furtherance of the business interests of NJR and within the last 36 months of Employee’s employment with NJR.
|
e.
|
“Restricted Period” means the period while Employee is employed by NJR and for 36 months following the termination or resignation of Employee from employment with NJR.
|
f.
|
“Restricted Territory” consists of the following areas, to the extent such areas have been identified as applicable to the definition of the “Business of NJR” above:
|
Relative Total Shareholder Return
|
Company Relative Total
Shareholder Return Performance —
Percentile Achieved
|
Performance Share Units Earned as
Percentage of
Target Performance Share Units
|
|
Less than 25
th
|
0
|
%
|
25
th
(threshold)
|
40
|
%
|
55
th
(target)
|
100
|
%
|
80
th
and above (maximum)
|
150
|
%
|
1.
|
ceases to be a domestically domiciled publicly traded company on a national stock exchange or market system, unless such cessation of such listing is due to a low stock price or low trading volume; or
|
3.
|
has reincorporated in a foreign (e.g., non-U.S.) jurisdiction, regardless of whether it is a reporting company in that or another jurisdiction; or
|
4.
|
has been acquired by another company (whether by a peer company or otherwise, but not including internal reorganizations), or has sold all or substantially all of its assets.
|
a.
|
“Business of the Company” means the following areas of its business which are selected below, which Employee acknowledges are areas of the Company’s business in which Employee has responsibilities:
|
___
|
Natural Gas Distribution
: Consists of New Jersey Natural Gas Company, a natural gas utility company that provides regulated retail natural gas service to residential and commercial customers in central and northern New Jersey and participates in the off-system sales and capacity release markets.
|
___
|
Energy Services
: Maintains and transacts around a portfolio of physical assets consisting of natural gas storage and transportation contracts and also provides wholesale energy management services to other energy companies and natural gas producers in market areas including states from the Gulf Coast and Mid-continent regions to the Appalachian and Northeast regions, the West Coast and Canada.
|
___
|
Clean Energy Ventures
: Investor, owner, and operator in the renewable energy sector, including investments in wind and residential and commercial rooftop and ground mount solar systems.
|
___
|
Midstream Assets
: Includes investments in natural gas transportation and storage assets and is comprised of the following: an equity investment in Dominion Midstream Partners, LP, which holds ownership interests in the Iroquois Gas Transmission System, Cove Point and Dominion Carolina Gas Transmission; Steckman Ridge, which is a partnership that owns and operates a 17.7 Bcf natural gas storage facility, with up to 12 Bcf working capacity, in western Pennsylvania that is 50 percent owned by a Company Subsidiary; and a 20 percent ownership interest in the proposed PennEast Pipeline, a 118-mile pipeline designed to bring natural gas produced in the Marcellus Shale region to homes and businesses in Pennsylvania and New Jersey.
|
___
|
Home Services
: Consists of NJR Home Services Company, which provides Heating, Ventilating, and Air Conditioning (HVAC) service, sales and installation of appliances, as well as installation of solar equipment.
|
b.
|
“Confidential Information” means all valuable and/or proprietary information (in oral, written, electronic or other forms) belonging to or pertaining to the Company, its customers and vendors, that is not generally known or publicly available, and which would be useful to competitors of the Company or otherwise damaging to the Company if disclosed. Confidential Information may include, but is not necessarily limited to: (i) the identity of the Company’s customers or potential customers, their purchasing histories, and the terms or proposed terms upon which the Company offers or may offer its products and services to such customers, (ii) the identity of the Company’s vendors or potential vendors, and the terms or proposed terms upon which the Company may purchase products and services from such vendors, (iii) technology used by the Company to provide its services, (iv) the terms and conditions upon which the Company employs its employees and independent contractors, (v) marketing and/or business plans and strategies, (vi) financial reports and
|
c.
|
“Material Contact” means contact in person, by telephone, or by paper or electronic correspondence, or the supervision of those who have such conduct, and which is done in furtherance of the business interests of the company and within the last 36 months.
|
d.
|
“Restricted Territory” consists of the following areas, to the extent such areas have been identified as applicable to the definition of the “Business of the company” above:
|
Number of Performance-Based Restricted Stock Units Granted:
|
|
a.
|
“Business of the Company” means the following areas of its business which are selected below, which Employee acknowledges are areas of the Company’s business in which Employee has responsibilities:
|
___
|
Natural Gas Distribution
: Consists of New Jersey Natural Gas Company, a natural gas utility company that provides regulated retail natural gas service to residential and commercial customers in central and northern New Jersey and participates in the off-system sales and capacity release markets.
|
___
|
Energy Services
: Maintains and transacts around a portfolio of physical assets consisting of natural gas storage and transportation contracts and also provides wholesale energy management services to other energy companies and natural gas producers in market areas including states from the Gulf Coast and Mid-continent regions to the Appalachian and Northeast regions, the West Coast and Canada.
|
___
|
Clean Energy Ventures
: Investor, owner, and operator in the renewable energy sector, including investments in wind and residential and commercial rooftop and ground mount solar systems.
|
___
|
Midstream Assets
: Includes investments in natural gas transportation and storage assets and is comprised of the following: an equity investment in Dominion Midstream Partners, LP, which holds ownership interests in the Iroquois Gas Transmission System, Cove Point and Dominion Carolina Gas Transmission; Steckman Ridge, which is a partnership that owns and operates a 17.7 Bcf natural gas storage facility, with up to 12 Bcf working capacity, in western Pennsylvania that is 50 percent owned by a Company Subsidiary; and a 20 percent ownership interest in the proposed PennEast Pipeline, a 118-mile pipeline designed to bring natural gas produced in the Marcellus Shale region to homes and businesses in Pennsylvania and New Jersey.
|
___
|
Home Services
: Consists of NJR Home Services Company, which provides Heating, Ventilating, and Air Conditioning (HVAC) service, sales and installation of appliances, as well as installation of solar equipment.
|
b.
|
“Confidential Information” means all valuable and/or proprietary information (in oral, written, electronic or other forms) belonging to or pertaining to the Company, its customers and vendors, that is not generally known or publicly available, and which would be useful to competitors of the Company or otherwise damaging to the Company if disclosed. Confidential Information may include, but is not necessarily limited to: (i) the identity of the Company’s customers or potential customers, their purchasing histories, and the terms or proposed terms upon which the Company offers or may offer its products and services to such customers, (ii) the identity of the Company’s vendors or potential vendors, and the terms or proposed terms upon which the Company may purchase products and services from such vendors, (iii) technology used by the Company to provide its services, (iv) the terms and conditions upon which the Company employs its employees and independent contractors, (v) marketing and/or business plans and strategies, (vi) financial reports and
|
c.
|
“Material Contact” means contact in person, by telephone, or by paper or electronic correspondence, or the supervision of those who have such conduct, and which is done in furtherance of the business interests of the company and within the last 36 months.
|
d.
|
“Restricted Territory” consists of the following areas, to the extent such areas have been identified as applicable to the definition of the “Business of the company” above:
|
How Restricted Stock Units Vest
:
|
The Restricted Stock Units, if not previously forfeited, will vest on the dates and as to the number of Restricted Stock Units in the following table provided Employee remains employed by the Company or a Subsidiary from the Grant Date through the Stated Vesting Date:
|
Settlement:
|
The Restricted Stock Units, to the extent vested, including Restricted Stock Units credited as the result of Dividend Equivalents to the extent vested, will be settled by delivery of one share of Stock for each Restricted Stock Unit to be settled, as soon as administratively practicable (and no later than sixty (60) days) after the Restricted Stock Units become vested, subject to section 7(c) of the attached Terms and Conditions. Notwithstanding the foregoing, the Committee may determine to permit Employee to elect to defer settlement (or redefer) if such election would be permissible under Section 11(k) of the Plan and Code Section 409A. In addition to any applicable requirements under Code Section 409A, any such deferral election shall be made only while Employee remains employed and at a time permitted under Code Section 409A. The form under which an election is made shall set forth the time and form of payment of such amount deferred. Any amount deferred shall be subject to a 6 month delay upon payment if required under Section 11(k)(i)(F) of the Plan. Any elective deferral will be subject to
|
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:
|
February 8, 2017
|
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:
|
February 8, 2017
|
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 fiscal year ended
December 31, 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:
|
February 8, 2017
|
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 fiscal year ended
December 31, 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:
|
February 8, 2017
|
By:
|
/s/ Patrick Migliaccio
|
|
|
|
Patrick Migliaccio
|
|
|
|
Senior Vice President and Chief Financial Officer
|