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(Exact name of registrant as specified in its charter)
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||||||
New Jersey
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22-2376465
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
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||||
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1415 Wyckoff Road,
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Wall,
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New Jersey
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07719
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(732)
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938‑1000
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(Address of principal executive offices)
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|
(Registrant’s telephone number, including area code)
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
|
☐
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Emerging growth company
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☐
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Page
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PART I
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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||
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ITEM 9B.
|
||
PART III*
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||
|
ITEM 10.
|
||
|
ITEM 11.
|
||
|
ITEM 12.
|
||
|
ITEM 13.
|
||
|
ITEM 14.
|
||
PART IV
|
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||
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ITEM 15.
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* Portions of Item 10 and Items 11-14 are Incorporated by Reference from the Proxy Statement.
|
Adelphia
|
Adelphia Gateway, LLC
|
AFUDC
|
Allowance for Funds Used During Construction
|
ARO
|
Asset Retirement Obligations
|
ASC
|
Accounting Standards Codification
|
ASU
|
Accounting Standards Update
|
Bcf
|
Billion Cubic Feet
|
BGSS
|
Basic Gas Supply Service
|
BPU
|
New Jersey Board of Public Utilities
|
Bridge Facility
|
The $350 million term loan credit agreement expiring in October 2020
|
CIP
|
Conservation Incentive Program
|
CME
|
Chicago Mercantile Exchange
|
CR&R
|
Commercial Realty & Resources Corp.
|
Degree-day
|
The measure of the variation in the weather based on the extent to which the average daily temperature falls below 65 degrees Fahrenheit
|
Dominion
|
Dominion Energy, Inc.
|
DM
|
Dominion Energy Midstream Partners, L.P., a master limited partnership
|
DM Common Units
|
Common units representing limited partnership interests in DM
|
DRP
|
NJR Direct Stock Purchase and Dividend Reinvestment Plan
|
Dths
|
Dekatherms
|
EDA
|
New Jersey Economic Development Authority
|
EDA Bonds
|
Collectively, Series 2011A, Series 2011B and Series 2011C Bonds issued to NJNG by the EDA
|
EDECA
|
Electric Discount and Energy Competition Act
|
EE
|
Energy Efficiency
|
Energy Services
|
Energy Services segment
|
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
|
Fitch
|
Fitch Ratings Company
|
FMB
|
First Mortgage Bonds
|
GAAP
|
Generally Accepted Accounting Principles of the United States
|
GWRA
|
Global Warming Response Act of 2007
|
HCCTR
|
Health Care Cost Trend Rate
|
Home Services and Other
|
Home Services and Other Operations
|
ICE
|
Intercontinental Exchange
|
IEC
|
Interstate Energy Company, LLC
|
IIP
|
Infrastructure Investment Program
|
IRS
|
Internal Revenue Service
|
ISDA
|
The International Swaps and Derivatives Association
|
ITC
|
Investment Tax Credit
|
Leaf River
|
Leaf River Energy Center LLC
|
LIBOR
|
London Inter-Bank Offered Rate
|
LNG
|
Liquefied Natural Gas
|
Loan Agreement
|
Loan Agreement between the EDA and NJNG
|
MGP
|
Manufactured Gas Plant
|
Midstream
|
Midstream segment
|
MLP
|
Master Limited Partnership
|
MMBtu
|
Million British Thermal Units
|
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
|
NAV
|
Net Asset Value
|
GLOSSARY OF KEY TERMS (cont.)
|
|
|
|
NFE
|
Net Financial Earnings
|
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 or Natural Gas Distribution segment
|
NJNG Credit Facility
|
The $250 million unsecured committed credit facility expiring in December 2023
|
NJR Credit Facility
|
The $425 million unsecured committed credit facility expiring in December 2023
|
NJR or The Company
|
New Jersey Resources Corporation
|
NJRCEV
|
NJR Clean Energy Ventures Corporation or Clean Energy Ventures Segment
|
NJRES
|
NJR Energy Services Company
|
NJRHS
|
NJR Home Services Company
|
NJRRS
|
NJR Retail 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
|
Operations and Maintenance
|
OPEB
|
Other Postemployment Benefit Plans
|
PBO
|
Projected Benefit Obligation
|
PennEast
|
PennEast Pipeline Company, LLC
|
PEP
|
Pension Equalization Plan
|
PIM
|
Pipeline Integrity Management
|
PPA
|
Power Purchase Agreement
|
Prudential Facility
|
NJR’s unsecured, uncommitted private placement shelf note agreement with Prudential Investment Management, Inc.
|
PTC
|
Production Tax Credit
|
RAC
|
Remediation Adjustment Clause
|
REC
|
Renewable Energy Certificate
|
S&P
|
Standard & Poor’s Financial Services, LLC
|
SAFE I
|
Safety Acceleration and Facility Enhancement Program, Phase I
|
SAFE II
|
Safety Acceleration and Facility Enhancement Program, Phase II
|
Sarbanes-Oxley
|
Sarbanes-Oxley Act of 2002
|
SAVEGREEN
|
The SAVEGREEN Project®
|
Savings Plan
|
Employees’ Retirement Savings Plan
|
SBC
|
Societal Benefits Charge
|
SEC
|
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
|
Talen
|
Talen Energy Marketing, LLC or Talen Generation, LLC
|
TETCO
|
Texas Eastern Transmission
|
The Exchange Act
|
The Securities Exchange Act of 1934, as amended
|
The Tax Act
|
An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, previously known as The Tax Cuts and Jobs Act of 2017
|
Trustee
|
U.S. Bank National Association
|
TSR
|
Total Shareholder Return
|
U.S.
|
The United States of America
|
Union
|
International Brotherhood of Electrical Workers Local 1820
|
USF
|
Universal Service Fund
|
•
|
our ability to obtain governmental and regulatory approvals, 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, pipeline transportation systems and NJNG and Midstream infrastructure projects, including NJ RISE, SRL, Leaf River, PennEast and Adelphia, in a timely manner;
|
•
|
risks associated with our investments in clean energy projects, including the availability of regulatory incentives and federal tax credits, the availability of viable projects, our eligibility for ITCs, the future market for SRECs and electricity prices, and operational risks related to projects in service;
|
•
|
risks associated with acquisitions and the related integration of acquired assets with our current operations, including the acquisition of Leaf River and our planned Adelphia acquisition;
|
•
|
our ability to comply with current and future regulatory requirements;
|
•
|
volatility of natural gas and other commodity prices and their impact on NJNG customer usage, NJNG’s BGSS incentive programs, our Energy Services segment operations and our risk management efforts;
|
•
|
the performance of our subsidiaries;
|
•
|
access to adequate supplies of natural gas and dependence on third-party storage and transportation facilities for natural gas supply;
|
•
|
the level and rate at which NJNG’s costs and expenses are incurred and the extent to which they are approved for recovery from customers through the regulatory process, including through future base rate case filings;
|
•
|
the impact of a disallowance of recovery of environmental-related expenditures and other regulatory changes;
|
•
|
the regulatory and pricing policies of federal and state regulatory agencies;
|
•
|
operating risks incidental to handling, storing, transporting and providing customers with natural gas;
|
•
|
demographic changes in our service territory and their effect on our customer growth;
|
•
|
timing of qualifying for ITCs due to delays or failures to complete planned solar projects and the resulting impact on our effective tax rate and earnings;
|
•
|
changes in rating agency requirements and/or credit ratings and their effect on availability and cost of capital to the Company;
|
•
|
the impact of volatility in the equity and credit markets on our access to capital;
|
•
|
our ability to comply with debt covenants;
|
•
|
the results of legal or administrative proceedings with respect to claims, rates, environmental issues, gas cost prudence reviews and other matters;
|
•
|
risks related to cyberattacks or failure of information technology systems;
|
•
|
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 the Affordable Care Act;
|
•
|
commercial and wholesale credit risks, including the availability of creditworthy customers and counterparties, and liquidity in the wholesale energy trading market;
|
•
|
accounting effects and other risks associated with hedging activities and use of derivatives contracts;
|
•
|
our ability to optimize our physical assets;
|
•
|
weather and economic conditions;
|
•
|
the costs of compliance with present and future environmental laws, including potential climate change-related legislation;
|
•
|
environmental-related and other uncertainties related to litigation or administrative proceedings;
|
•
|
changes to tax laws and regulations;
|
•
|
any potential need to record a valuation allowance for our deferred tax assets;
|
•
|
the impact of natural disasters, terrorist activities and other extreme events on our operations and customers;
|
•
|
risks related to our employee workforce and succession planning;
|
•
|
risks associated with the management of our joint ventures and partnership; and
|
•
|
risks associated with keeping pace with technological change.
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Net income
|
$
|
169,505
|
|
$
|
233,436
|
|
$
|
132,065
|
|
Add:
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
2,881
|
|
26,770
|
|
(11,241
|
)
|
|||
Tax effect
|
(711
|
)
|
(4,512
|
)
|
4,062
|
|
|||
Effects of economic hedging related to natural gas inventory
|
4,309
|
|
(22,570
|
)
|
38,470
|
|
|||
Tax effect
|
(1,024
|
)
|
7,362
|
|
(13,964
|
)
|
|||
NFE (1)
|
$
|
174,960
|
|
$
|
240,486
|
|
$
|
149,392
|
|
Basic earnings per share
|
$
|
1.90
|
|
$
|
2.66
|
|
$
|
1.53
|
|
Add:
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
0.03
|
|
0.31
|
|
(0.13
|
)
|
|||
Tax effect
|
(0.01
|
)
|
(0.05
|
)
|
0.05
|
|
|||
Effects of economic hedging related to natural gas inventory
|
0.05
|
|
(0.26
|
)
|
0.45
|
|
|||
Tax effect
|
(0.01
|
)
|
0.08
|
|
(0.17
|
)
|
|||
Basic NFE per share
|
$
|
1.96
|
|
$
|
2.74
|
|
$
|
1.73
|
|
(1)
|
NFE during fiscal 2018 was $59.6 million, or $0.68 per share, higher due to the revaluation of deferred taxes resulting from the reduction in the federal corporate tax rate related to the Tax Act.
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
($ in thousands)
|
Operating Revenue (2)
|
Bcf
|
|
Operating Revenue
|
Bcf
|
|
Operating Revenue
|
Bcf
|
|||||||||
Residential
|
$
|
450,515
|
|
46.0
|
|
|
$
|
441,486
|
|
45.5
|
|
|
$
|
395,315
|
|
40.7
|
|
Commercial and other
|
104,372
|
|
9.7
|
|
|
95,351
|
|
8.9
|
|
|
98,777
|
|
8.7
|
|
|||
Firm transportation
|
57,513
|
|
13.7
|
|
|
65,256
|
|
15.5
|
|
|
73,206
|
|
14.4
|
|
|||
Total residential and commercial
|
612,400
|
|
69.4
|
|
|
602,093
|
|
69.9
|
|
|
567,298
|
|
63.8
|
|
|||
Interruptible
|
6,637
|
|
39.0
|
|
|
7,522
|
|
46.2
|
|
|
7,970
|
|
55.0
|
|
|||
Total system
|
619,037
|
|
108.4
|
|
|
609,615
|
|
116.1
|
|
|
575,268
|
|
118.8
|
|
|||
BGSS incentive programs (1)
|
91,756
|
|
37.8
|
|
|
122,250
|
|
42.8
|
|
|
120,369
|
|
49.5
|
|
|||
Total
|
$
|
710,793
|
|
146.2
|
|
|
$
|
731,865
|
|
158.9
|
|
|
$
|
695,637
|
|
168.3
|
|
(1)
|
Does not include 86, 107.4 and 128.9 Bcf for the capacity release program and related amounts of $4.1 million, $5.7 million and $6.5 million, which are recorded as a reduction of gas purchases on the Consolidated Statements of Operations for the fiscal years ended September 30, 2019, 2018 and 2017, respectively.
|
(2)
|
Operating revenue presents sales tax, net during fiscal 2019, due to the adoption of ASC 606, Revenue from Contracts with Customers. During fiscal 2018 and 2017, operating revenue only included sales tax on operating revenues excluding tax-exempt sales.
|
(1)
|
Numbers are shown net of any capacity release contracted amounts.
|
Pipeline
|
Dths
|
Expiration
|
||
Texas Eastern Transmission, L.P.
|
94,557
|
|
|
2021
|
Transcontinental Gas Pipe Line Corp.
|
8,384
|
|
|
2028
|
Total
|
102,941
|
|
|
|
Company
|
Dths
|
Expiration
|
||
Dominion Transmission Corporation
|
251,829
|
|
|
Various dates between 2022 and 2024
|
Steckman Ridge, L.P.
|
38,000
|
|
|
2020
|
Stagecoach Pipeline & Storage Company LLC
|
25,337
|
|
|
2023
|
Total
|
315,166
|
|
|
|
•
|
Providing natural gas portfolio management services to nonaffiliated and our affiliated natural gas utility, electric generation facilities and natural gas producers;
|
•
|
Managing strategies for new and existing natural gas storage and transportation assets to capture value from changes in price due to location or timing differences as a means to generate financial margin (as defined below);
|
•
|
Managing transactional logistics to minimize the cost of natural gas delivery to customers while maintaining security of supply. Transactions utilize the most optimal and advantageous natural gas supply transportation routing available within its contractual asset portfolio and various market areas; and
|
•
|
Managing economic hedging programs that are designed to mitigate the impact of changes in market prices on financial margin generated on its natural gas storage and transportation commitments.
|
•
|
NJR Steckman Ridge Storage Company, which holds our 50 percent equity investment in Steckman Ridge. Steckman Ridge is a Delaware limited partnership, jointly owned and controlled by our subsidiaries and subsidiaries of Enbridge Inc., which built, owns and operates a natural gas storage facility with up to 12 Bcf of working gas capacity in Bedford County, Pennsylvania. The facility has direct access to the TETCO and Dominion Transmission pipelines and has access to the Northeast and Mid-Atlantic markets; and
|
•
|
NJR Pipeline Company, which includes our 20 percent equity investment in PennEast and 100 percent equity investment in the planned Adelphia Gateway Pipeline project. PennEast is expected to construct a 120-mile, FERC-regulated interstate natural gas pipeline system that will extend from northern Pennsylvania to western New Jersey. Adelphia was established in anticipation of acquiring the membership interests in IEC, which operates an existing 84-mile pipeline in southeastern Pennsylvania, and related assets and rights of way. On October 11, 2019, NJR Pipeline Company acquired Leaf River Energy Center LLC, which owns and operates a 32.2 million Dth salt dome natural gas facility, located in southeastern Mississippi. See Note 18. Subsequent Events for more information.
|
•
|
NJRHS, which provides heating, ventilation and cooling service, sales and installation of appliances to approximately 108,000 service contract customers, as well as installation of solar equipment;
|
•
|
NJR Plumbing Services, Inc., which provides plumbing repair and installation services;
|
•
|
New Jersey Resources Corporation, an energy services holding company;
|
•
|
CR&R, which holds commercial real estate; and
|
•
|
NJR Service Corporation, which provides shared administrative and financial services to the Company and all of its subsidiaries.
|
•
|
Annual reports on Form 10-K;
|
•
|
Quarterly reports on Form 10-Q; and
|
•
|
Current reports on Form 8-K.
|
•
|
Bylaws, as amended;
|
•
|
Corporate Governance Guidelines;
|
•
|
Wholesale Trading Code of Conduct;
|
•
|
NJR Code of Conduct;
|
•
|
Charters of the following Board of Directors Committees: Audit, Leadership Development and Compensation and Nominating/Corporate Governance;
|
•
|
Audit Complaint Procedure;
|
•
|
Communicating with Non-Management Directors Procedure; and
|
•
|
Statement of Policy with Respect to Related Person Transactions.
|
Name
|
Age
|
Officer
since
|
Business experience during last five years
|
Laurence M. Downes
|
62
|
1986
|
Chairman of the Board (September 1996 - present)
Chief Executive Officer (July 1995 - September 2019) President (July 1995 - September 2018) |
Stephen D. Westhoven
|
51
|
2004
|
Chief Executive Officer (October 2019 - present)
President and Chief Operating Officer (October 2018 - present) Executive Vice President and Chief Operating Officer (November 2017 - September 2018) Senior Vice President and Chief Operating Officer, NJRES and NJRCEV (October 2016 - October 2017) Senior Vice President, NJRES (May 2010 - September 2016) |
Patrick J. Migliaccio
|
45
|
2013
|
Senior Vice President and Chief Financial Officer (January 2016 - present)
Vice President, Finance and Accounting (November 2014 - December 2015) Treasurer (August 2013 - May 2015) |
Glenn C. Lockwood
|
58
|
1990
|
Executive Vice President (January 2011 - present)
Chief Financial Officer (September 1995 - December 2015) |
Amanda E. Mullan
|
53
|
2015
|
Senior Vice President and Chief Human Resources Officer (January 2017 - present)
Vice President and Chief Human Resources Officer (April 2015 - December 2016) Senior Vice President of HR, N. America, Willis Group Holdings, a risk management and insurance intermediary (April 2012 - April 2015) |
Jacqueline K. Shea
|
55
|
2016
|
Vice President and Chief Information Officer (June 2016 - present)
Chief Information Officer, Godiva Chocolatier, a manufacturer of premium fine chocolates and related products (March 2011 - May 2016) |
Nancy A. Washington
|
55
|
2017
|
Senior Vice President and General Counsel (March 2017 - present)
Senior Vice President and Chief Litigation Counsel, CIT Group Inc., a Livingston, NJ-based financial services firm (September 2010 - March 2017) |
•
|
economic weakness and/or political instability in the United States or in the regions where we operate;
|
•
|
political conditions, such as a shutdown of the U.S. federal government;
|
•
|
financial difficulties of unrelated energy companies;
|
•
|
capital market conditions generally;
|
•
|
volatility in the equity markets;
|
•
|
market prices for natural gas;
|
•
|
the overall health of the natural gas utility industry; and
|
•
|
fluctuations in interest rates, particularly with respect to NJNG’s variable rate debt instruments.
|
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
|
||||
7/01/19 - 7/31/19
|
—
|
$
|
—
|
|
—
|
|
|
2,431,053
|
8/01/19 - 8/31/19
|
—
|
$
|
—
|
|
—
|
|
|
2,431,053
|
9/01/19 - 9/30/19
|
—
|
$
|
—
|
|
—
|
|
|
2,431,053
|
Total
|
—
|
$
|
—
|
|
—
|
|
|
2,431,053
|
(Thousands, except per share data)
|
|
|
|
|
|
||||||||||
Fiscal Years Ended September 30,
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
SELECTED FINANCIAL DATA
|
|
|
|
|
|
||||||||||
Operating revenues
|
$
|
2,592,045
|
|
$
|
2,915,109
|
|
$
|
2,268,617
|
|
$
|
1,880,905
|
|
$
|
2,733,987
|
|
Gas purchases
|
$
|
2,044,302
|
|
$
|
2,275,342
|
|
$
|
1,703,767
|
|
$
|
1,352,686
|
|
$
|
2,085,645
|
|
Net income
|
$
|
169,505
|
|
$
|
233,436
|
|
$
|
132,065
|
|
$
|
131,672
|
|
$
|
180,960
|
|
Total assets
|
$
|
4,372,985
|
|
$
|
4,143,664
|
|
$
|
3,928,507
|
|
$
|
3,718,570
|
|
$
|
3,284,357
|
|
Common stock equity
|
$
|
1,551,717
|
|
$
|
1,418,978
|
|
$
|
1,236,643
|
|
$
|
1,166,591
|
|
$
|
1,106,956
|
|
Long-term debt (1) (2)
|
$
|
1,537,177
|
|
$
|
1,180,619
|
|
$
|
997,080
|
|
$
|
1,055,038
|
|
$
|
843,595
|
|
|
|
|
|
|
|
||||||||||
COMMON STOCK DATA
|
|
|
|
|
|
||||||||||
Earnings per share-basic
|
$1.90
|
$2.66
|
$1.53
|
$1.53
|
$2.12
|
||||||||||
Earnings per share-diluted
|
$1.89
|
$2.64
|
$1.52
|
$1.52
|
$2.10
|
||||||||||
Dividends declared per share
|
$1.19
|
$1.11
|
$1.038
|
$0.975
|
$0.915
|
||||||||||
|
|
|
|
|
|
||||||||||
NON-GAAP RECONCILIATION
|
|
|
|
|
|
||||||||||
Net income
|
$
|
169,505
|
|
$
|
233,436
|
|
$
|
132,065
|
|
$
|
131,672
|
|
$
|
180,960
|
|
Add:
|
|
|
|
|
|
||||||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
2,881
|
|
26,770
|
|
(11,241
|
)
|
46,883
|
|
(38,681
|
)
|
|||||
Tax effect
|
(711
|
)
|
(4,512
|
)
|
4,062
|
|
(17,018
|
)
|
14,391
|
|
|||||
Effects of economic hedging related to natural gas inventory
|
4,309
|
|
(22,570
|
)
|
38,470
|
|
(36,816
|
)
|
(8,225
|
)
|
|||||
Tax effect
|
(1,024
|
)
|
7,362
|
|
(13,964
|
)
|
13,364
|
|
3,058
|
|
|||||
Net financial earnings (3)
|
$
|
174,960
|
|
$
|
240,486
|
|
$
|
149,392
|
|
$
|
138,085
|
|
$
|
151,503
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share
|
$1.90
|
$2.66
|
$1.53
|
$1.53
|
$2.12
|
||||||||||
Add:
|
|
|
|
|
|
||||||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
0.03
|
|
0.31
|
|
(0.13
|
)
|
0.55
|
|
(0.45
|
)
|
|||||
Tax effect
|
(0.01
|
)
|
(0.05
|
)
|
0.05
|
|
(0.20
|
)
|
0.17
|
|
|||||
Effects of economic hedging related to natural gas inventory
|
0.05
|
|
(0.26
|
)
|
0.45
|
|
(0.43
|
)
|
(0.10
|
)
|
|||||
Tax effect
|
(0.01
|
)
|
0.08
|
|
(0.17
|
)
|
0.16
|
|
0.04
|
|
|||||
Net financial earnings per share-basic (3)
|
$1.96
|
$2.74
|
$1.73
|
$1.61
|
$1.78
|
||||||||||
|
|
|
|
|
|
||||||||||
Diluted earnings per share
|
$1.89
|
$2.64
|
$1.52
|
$1.52
|
$2.10
|
||||||||||
Add:
|
|
|
|
|
|
||||||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
0.03
|
|
0.30
|
|
(0.13
|
)
|
0.54
|
|
(0.45
|
)
|
|||||
Tax effect
|
(0.01
|
)
|
(0.05
|
)
|
0.05
|
|
(0.20
|
)
|
0.17
|
|
|||||
Effects of economic hedging related to natural gas inventory
|
0.05
|
|
(0.25
|
)
|
0.44
|
|
(0.42
|
)
|
(0.10
|
)
|
|||||
Tax effect
|
(0.01
|
)
|
0.08
|
|
(0.17
|
)
|
0.15
|
|
0.04
|
|
|||||
Net financial earnings per share-diluted (3)
|
$1.95
|
$2.72
|
$1.71
|
$1.59
|
$1.76
|
(1)
|
Includes long-term capital leases of $25 million, $26.4 million, $28.9 million, $30.7 million and $35.7 million, respectively.
|
(2)
|
Includes long-term solar asset financing obligation of $80.4 million, $89.8 million, $28.2 million, $0 and $0, respectively.
|
(3)
|
NFE is a non-GAAP financial measure that eliminates the timing differences surrounding the recognition of certain derivative gains or losses, to effectively match the earnings effects of economic hedges associated with the physical sale or purchase of gas and, therefore, eliminate the impact of volatility to GAAP earnings associated with the related derivative instruments. For further discussion of this financial measure, see the Energy Services segment discussion in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
Fiscal Years Ended September 30,
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
Operating revenues ($ in thousands)
|
|
|
|
|
|
||||||||||
Residential
|
$
|
450,515
|
|
$
|
441,486
|
|
$
|
395,315
|
|
$
|
345,597
|
|
$
|
466,464
|
|
Commercial, industrial and other
|
104,372
|
|
95,351
|
|
98,777
|
|
80,994
|
|
106,505
|
|
|||||
Firm transportation
|
57,513
|
|
65,256
|
|
73,206
|
|
69,696
|
|
77,974
|
|
|||||
Total residential and commercial
|
612,400
|
|
602,093
|
|
567,298
|
|
496,287
|
|
650,943
|
|
|||||
Interruptible
|
6,637
|
|
7,522
|
|
7,970
|
|
8,867
|
|
10,049
|
|
|||||
Total system
|
619,037
|
|
609,615
|
|
575,268
|
|
505,154
|
|
660,992
|
|
|||||
BGSS incentive programs
|
91,756
|
|
122,250
|
|
120,369
|
|
89,192
|
|
120,978
|
|
|||||
Total operating revenues
|
$
|
710,793
|
|
$
|
731,865
|
|
$
|
695,637
|
|
$
|
594,346
|
|
$
|
781,970
|
|
Throughput (Bcf)
|
|
|
|
|
|
||||||||||
Residential
|
46.0
|
|
45.5
|
|
40.7
|
|
36.9
|
|
45.9
|
|
|||||
Commercial, industrial and other
|
9.7
|
|
8.9
|
|
8.7
|
|
7.3
|
|
9.6
|
|
|||||
Firm transportation
|
13.7
|
|
15.5
|
|
14.4
|
|
14.1
|
|
16.0
|
|
|||||
Total residential and commercial
|
69.4
|
|
69.9
|
|
63.8
|
|
58.3
|
|
71.5
|
|
|||||
Interruptible
|
39.0
|
|
46.2
|
|
55.0
|
|
61.5
|
|
47.1
|
|
|||||
Total system
|
108.4
|
|
116.1
|
|
118.8
|
|
119.8
|
|
118.6
|
|
|||||
BGSS incentive programs
|
123.8
|
|
150.2
|
|
178.4
|
|
216.7
|
|
222.4
|
|
|||||
Total throughput
|
232.2
|
|
266.3
|
|
297.2
|
|
336.5
|
|
341.0
|
|
|||||
Customers at year-end
|
|
|
|
|
|
||||||||||
Residential
|
486,474
|
|
474,495
|
|
460,013
|
|
448,273
|
|
437,979
|
|
|||||
Commercial, industrial and other
|
28,992
|
|
28,037
|
|
26,947
|
|
26,218
|
|
25,541
|
|
|||||
Firm transportation
|
32,107
|
|
36,126
|
|
42,790
|
|
46,608
|
|
48,673
|
|
|||||
Total residential and commercial
|
547,573
|
|
538,658
|
|
529,750
|
|
521,099
|
|
512,193
|
|
|||||
Interruptible
|
32
|
|
31
|
|
33
|
|
34
|
|
35
|
|
|||||
BGSS incentive programs
|
21
|
|
28
|
|
27
|
|
30
|
|
24
|
|
|||||
Total customers at year-end
|
547,626
|
|
538,717
|
|
529,810
|
|
521,163
|
|
512,252
|
|
|||||
Interest coverage ratio (1)
|
6.57
|
|
6.35
|
|
7.96
|
|
8.97
|
|
9.57
|
|
|||||
Average therm use per customer
|
|
|
|
|
|
||||||||||
Residential
|
945
|
|
959
|
|
885
|
|
824
|
|
1,049
|
|
|||||
Commercial, industrial and other
|
10,198
|
|
10,992
|
|
11,183
|
|
11,378
|
|
9,799
|
|
|||||
Degree days
|
4,506
|
|
4,537
|
|
4,129
|
|
3,867
|
|
5,015
|
|
|||||
Weather as a percent of normal (2)
|
99.0
|
%
|
99.5
|
%
|
90.0
|
%
|
82.5
|
%
|
108.3
|
%
|
|||||
Number of employees
|
709
|
|
686
|
|
680
|
|
670
|
|
649
|
|
(1)
|
NJNG’s income from operations divided by interest expense.
|
(2)
|
Normal heating degree days are based on a 20-year average, calculated based upon three reference areas representative of NJNG’s service territory.
|
(3)
|
Operating revenue presents sales tax, net during fiscal 2019, due to the adoption of ASC 606, Revenue from Contracts with Customers. Prior to fiscal 2019, operating revenue only included sales tax on operating revenues excluding tax-exempt sales.
|
Pension Plans
|
|
|
|
|
|
|
|
|
|||||
Actuarial Assumptions
|
Increase/
(Decrease)
|
Estimated
Increase/(Decrease) on PBO (Thousands) |
Estimated
Increase/(Decrease) to Expense (Thousands) |
||||||||||
Discount rate
|
1.00
|
|
%
|
|
$
|
(45,719
|
)
|
|
|
$
|
(4,274
|
)
|
|
Discount rate
|
(1.00
|
)
|
%
|
|
$
|
57,229
|
|
|
|
$
|
4,840
|
|
|
Rate of return on plan assets
|
1.00
|
|
%
|
|
n/a
|
|
|
$
|
(2,723
|
)
|
|
||
Rate of return on plan assets
|
(1.00
|
)
|
%
|
|
n/a
|
|
|
$
|
2,723
|
|
|
Other Postemployment Benefits
|
|
|
|
|
|
|
|
|
|||||
Actuarial Assumptions
|
Increase/
(Decrease)
|
Estimated
Increase/(Decrease) on PBO (Thousands) |
Estimated
Increase/(Decrease) to Expense (Thousands) |
||||||||||
Discount rate
|
1.00
|
|
%
|
|
$
|
(39,954
|
)
|
|
|
$
|
(3,277
|
)
|
|
Discount rate
|
(1.00
|
)
|
%
|
|
$
|
51,627
|
|
|
|
$
|
4,094
|
|
|
Rate of return on plan assets
|
1.00
|
|
%
|
|
n/a
|
|
|
$
|
(788
|
)
|
|
||
Rate of return on plan assets
|
(1.00
|
)
|
%
|
|
n/a
|
|
|
$
|
788
|
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Actuarial Assumptions
|
Increase/
(Decrease)
|
Estimated
Increase/(Decrease) on PBO (Thousands) |
Estimated
Increase/(Decrease) to Expense (Thousands) |
||||||||||
Health care cost trend rate
|
1.00
|
|
%
|
|
$
|
49,061
|
|
|
|
$
|
6,412
|
|
|
Health care cost trend rate
|
(1.00
|
)
|
%
|
|
$
|
(38,747
|
)
|
|
|
$
|
(5,015
|
)
|
|
(Thousands)
|
2019
|
2018
|
2017
|
|||||||||||||||
|
Net Income
|
Assets
|
Net Income
|
Assets
|
Net Income
|
Assets
|
||||||||||||
Natural Gas Distribution
|
$
|
78,062
|
|
$
|
3,064,309
|
|
$
|
84,048
|
|
$
|
2,663,054
|
|
$
|
86,930
|
|
$
|
2,519,578
|
|
Clean Energy Ventures
|
77,473
|
|
864,323
|
|
75,849
|
|
865,018
|
|
24,873
|
|
771,340
|
|
||||||
Energy Services
|
(1,268
|
)
|
290,847
|
|
53,139
|
|
396,852
|
|
476
|
|
398,277
|
|
||||||
Midstream
|
14,689
|
|
240,955
|
|
24,367
|
|
242,069
|
|
12,857
|
|
232,806
|
|
||||||
Home Services and Other
|
1,637
|
|
104,411
|
|
(3,555
|
)
|
114,732
|
|
6,811
|
|
114,801
|
|
||||||
Intercompany (1)
|
(1,088
|
)
|
(191,860
|
)
|
(412
|
)
|
(138,061
|
)
|
118
|
|
(108,295
|
)
|
||||||
Total
|
$
|
169,505
|
|
$
|
4,372,985
|
|
$
|
233,436
|
|
$
|
4,143,664
|
|
$
|
132,065
|
|
$
|
3,928,507
|
|
(1)
|
Consists of transactions between subsidiaries that are eliminated in consolidation.
|
(Thousands, except per share data)
|
2019
|
2018
|
2017
|
||||||
Net income
|
$
|
169,505
|
|
$
|
233,436
|
|
$
|
132,065
|
|
Add:
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
2,881
|
|
26,770
|
|
(11,241
|
)
|
|||
Tax effect
|
(711
|
)
|
(4,512
|
)
|
4,062
|
|
|||
Effects of economic hedging related to natural gas inventory (1)
|
4,309
|
|
(22,570
|
)
|
38,470
|
|
|||
Tax effect
|
(1,024
|
)
|
7,362
|
|
(13,964
|
)
|
|||
Net financial earnings
|
$
|
174,960
|
|
$
|
240,486
|
|
$
|
149,392
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
1.90
|
|
$
|
2.66
|
|
$
|
1.53
|
|
Add:
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
0.03
|
|
0.31
|
|
(0.13
|
)
|
|||
Tax effect
|
(0.01
|
)
|
(0.05
|
)
|
0.05
|
|
|||
Effects of economic hedging related to natural gas inventory (1)
|
0.05
|
|
(0.26
|
)
|
0.45
|
|
|||
Tax effect
|
(0.01
|
)
|
0.08
|
|
(0.17
|
)
|
|||
Basic net financial earnings per share
|
$
|
1.96
|
|
$
|
2.74
|
|
$
|
1.73
|
|
(1)
|
Effects of hedging natural gas inventory transactions where the economic impact is realized in a future period.
|
(Thousands)
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Natural Gas Distribution
|
$
|
78,062
|
|
45
|
%
|
|
$
|
84,048
|
|
35
|
%
|
|
$
|
86,930
|
|
58
|
%
|
Clean Energy Ventures
|
77,473
|
|
44
|
|
|
75,849
|
|
32
|
|
|
24,873
|
|
17
|
|
|||
Energy Services
|
2,918
|
|
2
|
|
|
60,378
|
|
25
|
|
|
18,554
|
|
12
|
|
|||
Midstream
|
14,689
|
|
8
|
|
|
24,367
|
|
10
|
|
|
12,857
|
|
9
|
|
|||
Home Services and Other
|
1,911
|
|
1
|
|
|
(3,829
|
)
|
(2
|
)
|
|
6,811
|
|
4
|
|
|||
Eliminations (1)
|
(93
|
)
|
—
|
|
|
(327
|
)
|
—
|
|
|
(633
|
)
|
—
|
|
|||
Total
|
$
|
174,960
|
|
100
|
%
|
|
$
|
240,486
|
|
100
|
%
|
|
$
|
149,392
|
|
100
|
%
|
(1)
|
Consists of transactions between subsidiaries that are eliminated in consolidation.
|
|
2019
|
2018
|
2017
|
|||
Firm customers
|
|
|
|
|||
Residential
|
486,474
|
|
474,495
|
|
460,013
|
|
Commercial, industrial & other
|
28,992
|
|
28,037
|
|
26,947
|
|
Residential transport
|
22,870
|
|
26,490
|
|
32,653
|
|
Commercial transport
|
9,237
|
|
9,636
|
|
10,137
|
|
Total firm customers
|
547,573
|
|
538,658
|
|
529,750
|
|
Other
|
53
|
|
59
|
|
60
|
|
Total customers
|
547,626
|
|
538,717
|
|
529,810
|
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Weather (1)
|
$
|
2,699
|
|
$
|
205
|
|
$
|
19,261
|
|
Usage
|
(341
|
)
|
(1,629
|
)
|
(2,309
|
)
|
|||
Total
|
$
|
2,358
|
|
$
|
(1,424
|
)
|
$
|
16,952
|
|
(1)
|
Compared with the CIP 20-year average, weather was 1 percent, 0.5 percent and 10 percent warmer-than-normal during fiscal 2019, 2018 and 2017, respectively.
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Operating revenues
|
$
|
710,793
|
|
$
|
731,865
|
|
$
|
695,637
|
|
Operating expenses
|
|
|
|
||||||
Gas purchases (1) (2)
|
336,489
|
|
333,208
|
|
269,480
|
|
|||
Operation and maintenance
|
165,757
|
|
159,443
|
|
140,387
|
|
|||
Regulatory rider expense (3)
|
33,937
|
|
38,969
|
|
40,243
|
|
|||
Depreciation and amortization
|
57,980
|
|
53,208
|
|
49,347
|
|
|||
Energy and other taxes
|
5,441
|
|
44,184
|
|
42,417
|
|
|||
Total operating expenses
|
599,604
|
|
629,012
|
|
541,874
|
|
|||
Operating income
|
111,189
|
|
102,853
|
|
153,763
|
|
|||
Other income, net
|
2,441
|
|
4,584
|
|
2,470
|
|
|||
Interest expense, net of capitalized interest
|
26,134
|
|
25,299
|
|
25,818
|
|
|||
Income tax provision (benefit)
|
9,434
|
|
(1,910
|
)
|
43,485
|
|
|||
Net income
|
$
|
78,062
|
|
$
|
84,048
|
|
$
|
86,930
|
|
(1)
|
Includes the purchased cost of the natural gas, fees paid to pipelines and storage facilities, adjustments as a result of BGSS incentive programs and hedging transactions. These expenses are passed through to customers and are offset by corresponding revenues.
|
(2)
|
Includes related party transactions of approximately $16.2 million, $57.2 million and $10.8 million during fiscal 2019, 2018 and 2017, respectively, a portion of which are eliminated in consolidation.
|
(3)
|
Consists of expenses associated with state-mandated programs, the RAC and energy efficiency programs, and are calculated on a per-therm basis. These expenses are passed through to customers and offset by corresponding revenues.
|
|
2019 v. 2018
|
|
2018 v. 2017
|
||||||||||
(Thousands)
|
Operating
revenue
|
Gas
purchases
|
|
Operating
revenue
|
Gas
purchases
|
||||||||
ASC 606 adoption - sales tax election
|
$
|
(39,426
|
)
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
BGSS incentives
|
(30,494
|
)
|
(26,410
|
)
|
|
1,881
|
|
3,124
|
|
||||
Tax Act impact to base rates
|
(14,932
|
)
|
—
|
|
|
—
|
|
—
|
|
||||
Tax Act refund (1)
|
29,503
|
|
—
|
|
|
(35,910
|
)
|
—
|
|
||||
Average BGSS rates (2)
|
24,123
|
|
24,123
|
|
|
1,147
|
|
1,413
|
|
||||
Bill credits (3)
|
—
|
|
—
|
|
|
41,971
|
|
39,260
|
|
||||
Firm sales
|
5,907
|
|
6,004
|
|
|
49,414
|
|
19,779
|
|
||||
SAFE II/NJ RISE
|
6,646
|
|
—
|
|
|
4,625
|
|
—
|
|
||||
CIP adjustments
|
3,782
|
|
—
|
|
|
(18,375
|
)
|
—
|
|
||||
Other (4)
|
(6,181
|
)
|
(436
|
)
|
|
(8,525
|
)
|
152
|
|
||||
Total (decrease) increase
|
$
|
(21,072
|
)
|
$
|
3,281
|
|
|
$
|
36,228
|
|
$
|
63,728
|
|
(1)
|
Operating revenues exclude sales tax of $6.4 million during fiscal 2019, which is included in the ASC 606 adoption - sales tax election line.
|
(2)
|
Operating revenues include changes in sales tax of $266,000 during fiscal 2018.
|
(3)
|
Operating revenues include changes in sales tax of $2.7 million during fiscal 2018.
|
(4)
|
Other includes changes in rider rates, including those related to EE, NJCEP and other programs.
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Operating revenues
|
$
|
710,793
|
|
$
|
731,865
|
|
$
|
695,637
|
|
Less:
|
|
|
|
||||||
Gas purchases
|
336,489
|
|
333,208
|
|
269,480
|
|
|||
Energy taxes
|
—
|
|
39,426
|
|
37,917
|
|
|||
Regulatory rider expense
|
33,937
|
|
38,969
|
|
40,243
|
|
|||
Utility gross margin
|
$
|
340,367
|
|
$
|
320,262
|
|
$
|
347,997
|
|
(1)
|
Energy taxes does not include sales tax during fiscal 2019, due to the adoption of ASC 606, Revenue from Contracts with Customers. Energy taxes includes only sales tax on operating revenues during fiscal 2018 and 2017, excluding tax-exempt sales.
|
•
|
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 or storage incentive programs are shared between customers and NJNG; and
|
•
|
utility gross margin generated from off-tariff customers, as well as interruptible customers.
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
($ in thousands)
|
Margin
|
Bcf
|
|
Margin
|
Bcf
|
|
Margin
|
Bcf
|
|||||||||
Utility gross margin/throughput
|
|
|
|
|
|
|
|
|
|||||||||
Residential
|
$
|
224,597
|
|
46.0
|
|
|
$
|
203,195
|
|
45.5
|
|
|
$
|
218,093
|
|
40.7
|
|
Commercial, industrial and other
|
50,553
|
|
9.7
|
|
|
46,636
|
|
8.9
|
|
|
51,510
|
|
8.7
|
|
|||
Firm transportation
|
51,069
|
|
13.7
|
|
|
51,880
|
|
15.5
|
|
|
58,172
|
|
14.4
|
|
|||
Total utility firm gross margin/throughput
|
326,219
|
|
69.4
|
|
|
301,711
|
|
69.9
|
|
|
327,775
|
|
63.8
|
|
|||
BGSS incentive programs
|
8,398
|
|
123.8
|
|
|
12,482
|
|
150.2
|
|
|
13,724
|
|
178.4
|
|
|||
Interruptible/off-tariff agreements
|
5,750
|
|
39.0
|
|
|
6,069
|
|
46.2
|
|
|
6,498
|
|
55.0
|
|
|||
Total utility gross margin/throughput
|
$
|
340,367
|
|
232.2
|
|
|
$
|
320,262
|
|
266.3
|
|
|
$
|
347,997
|
|
297.2
|
|
(Thousands)
|
2019 v. 2018
|
2018 v. 2017
|
||||||||
Tax Act impact
|
|
$
|
14,451
|
|
|
|
$
|
(33,657
|
)
|
|
NJ RISE/SAFE II
|
|
6,515
|
|
|
|
4,334
|
|
|
||
Customer growth
|
|
3,909
|
|
|
|
4,236
|
|
|
||
SAVEGREEN
|
|
(367
|
)
|
|
|
(977
|
)
|
|
||
Total increase (decrease)
|
|
$
|
24,508
|
|
|
|
$
|
(26,064
|
)
|
|
(Thousands)
|
2019 v. 2018
|
2018 v. 2017
|
||||||||
Capacity release
|
|
$
|
(1,665
|
)
|
|
|
$
|
(745
|
)
|
|
Storage
|
|
(1,556
|
)
|
|
|
(954
|
)
|
|
||
Off-system sales
|
|
(863
|
)
|
|
|
457
|
|
|
||
Total decrease
|
|
$
|
(4,084
|
)
|
|
|
$
|
(1,242
|
)
|
|
(Thousands)
|
2019 v. 2018
|
2018 v. 2017
|
||||||||
Shared corporate costs
|
|
$
|
8,590
|
|
|
|
$
|
5,991
|
|
|
Maintenance and repairs
|
|
3,982
|
|
|
|
(16
|
)
|
|
||
Compensation and benefits
|
|
(3,214
|
)
|
|
|
5,609
|
|
|
||
Consulting
|
|
(2,844
|
)
|
|
|
5,184
|
|
|
||
Other
|
|
(200
|
)
|
|
|
2,288
|
|
|
||
Total increase
|
|
$
|
6,314
|
|
|
|
$
|
19,056
|
|
|
($ in Thousands)
|
2019
|
2018
|
2017
|
||||||||||||||||||
Placed in service
|
Projects
|
MW
|
Costs
|
Projects
|
MW
|
Costs
|
Projects
|
MW
|
Costs
|
||||||||||||
Grid-connected (1)
|
3
|
|
29.0
|
|
$
|
64,684
|
|
3
|
|
33.7
|
|
$
|
70,216
|
|
2
|
|
20.0
|
|
$
|
62,700
|
|
Net-metered:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial (1) (2)
|
4
|
|
22.8
|
|
71,730
|
|
—
|
|
—
|
|
74
|
|
3
|
|
7.1
|
|
19,714
|
|
|||
Residential
|
815
|
|
8.3
|
|
26,796
|
|
910
|
|
8.5
|
|
27,342
|
|
1,300
|
|
12.4
|
|
37,901
|
|
|||
Total placed in service
|
822
|
|
60.1
|
|
$
|
163,210
|
|
913
|
|
42.2
|
|
$
|
97,632
|
|
1,305
|
|
39.5
|
|
$
|
120,315
|
|
(1)
|
Includes projects subject to sale-leaseback arrangements.
|
(2)
|
Includes a 4.4 MW commercial solar project acquired in August 2019.
|
|
2019
|
2018
|
2017
|
|||
Inventory balance as of October 1,
|
105,192
|
|
48,357
|
|
24,135
|
|
SRECs generated
|
311,803
|
|
245,147
|
|
197,521
|
|
SRECs delivered
|
(363,600
|
)
|
(188,312
|
)
|
(173,299
|
)
|
Inventory balance as of September 30,
|
53,395
|
|
105,192
|
|
48,357
|
|
(1)
|
Energy years are compliance periods for New Jersey’s renewable portfolio standard that run from June 1 to May 31.
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Operating revenues
|
$
|
98,099
|
|
$
|
71,375
|
|
$
|
64,394
|
|
Operating expenses
|
|
|
|
||||||
Operation and maintenance
|
27,425
|
|
25,921
|
|
22,965
|
|
|||
Depreciation and amortization
|
32,997
|
|
31,877
|
|
31,834
|
|
|||
Other taxes
|
1,189
|
|
1,137
|
|
1,209
|
|
|||
Total operating expenses
|
61,611
|
|
58,935
|
|
56,008
|
|
|||
Operating income
|
36,488
|
|
12,440
|
|
8,386
|
|
|||
Other income, net
|
6,910
|
|
1,797
|
|
1,589
|
|
|||
Interest expense, net
|
14,846
|
|
18,320
|
|
16,263
|
|
|||
Income tax benefit
|
(48,921
|
)
|
(79,932
|
)
|
(31,161
|
)
|
|||
Net income
|
$
|
77,473
|
|
$
|
75,849
|
|
$
|
24,873
|
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Operating revenues (1)
|
$
|
1,742,791
|
|
$
|
2,112,804
|
|
$
|
1,462,681
|
|
Operating expenses
|
|
|
|
||||||
Gas purchases (including demand charges (2)(3))
|
1,719,519
|
|
1,995,335
|
|
1,441,310
|
|
|||
Operation and maintenance
|
19,555
|
|
32,884
|
|
20,371
|
|
|||
Depreciation and amortization
|
118
|
|
76
|
|
63
|
|
|||
Other taxes
|
1,388
|
|
2,732
|
|
1,788
|
|
|||
Total operating expenses
|
1,740,580
|
|
2,031,027
|
|
1,463,532
|
|
|||
Operating income (loss)
|
2,211
|
|
81,777
|
|
(851
|
)
|
|||
Other income
|
153
|
|
303
|
|
59
|
|
|||
Interest expense, net
|
5,205
|
|
3,945
|
|
2,747
|
|
|||
Income tax (benefit) provision
|
(1,573
|
)
|
24,996
|
|
(4,015
|
)
|
|||
Net (loss) income
|
$
|
(1,268
|
)
|
$
|
53,139
|
|
$
|
476
|
|
(1)
|
Includes related party transactions of approximately $8.2 million, $48.3 million and $316,000 during fiscal 2019, 2018 and 2017, 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 10 years.
|
(3)
|
Includes related party transactions of approximately $3.4 million, $4.5 million and $4.6 million during fiscal 2019, 2018 and 2017, respectively, a portion of which are eliminated in consolidation.
|
(in Bcf)
|
2019
|
2018
|
2017
|
|||
Net short futures contracts
|
34.6
|
|
24.3
|
|
16.4
|
|
Net long options
|
1.0
|
|
—
|
|
—
|
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Operating revenues
|
$
|
1,742,791
|
|
$
|
2,112,804
|
|
$
|
1,462,681
|
|
Less: Gas purchases
|
1,719,519
|
|
1,995,335
|
|
1,441,310
|
|
|||
Add:
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments and related transactions (1)
|
1,195
|
|
26,728
|
|
(10,063
|
)
|
|||
Effects of economic hedging related to natural gas inventory (2)
|
4,309
|
|
(22,570
|
)
|
38,470
|
|
|||
Financial margin
|
$
|
28,776
|
|
$
|
121,627
|
|
$
|
49,778
|
|
(1)
|
Includes unrealized (gains) losses related to an intercompany transaction between NJNG and Energy Services that have been eliminated in consolidation of approximately $995,000, $85,000 and $(751,000) for the fiscal years ended September 30, 2019, 2018 and 2017, respectively.
|
(2)
|
Effects of hedging natural gas inventory transactions where the economic impact is realized in a future period.
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Operating income (loss)
|
$
|
2,211
|
|
$
|
81,777
|
|
$
|
(851
|
)
|
Add:
|
|
|
|
||||||
Operation and maintenance
|
19,555
|
|
32,884
|
|
20,371
|
|
|||
Depreciation and amortization
|
118
|
|
76
|
|
63
|
|
|||
Other taxes
|
1,388
|
|
2,732
|
|
1,788
|
|
|||
Subtotal
|
23,272
|
|
117,469
|
|
21,371
|
|
|||
Add:
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
1,195
|
|
26,728
|
|
(10,063
|
)
|
|||
Effects of economic hedging related to natural gas inventory
|
4,309
|
|
(22,570
|
)
|
38,470
|
|
|||
Financial margin
|
$
|
28,776
|
|
$
|
121,627
|
|
$
|
49,778
|
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Net (loss) income
|
$
|
(1,268
|
)
|
$
|
53,139
|
|
$
|
476
|
|
Add:
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
1,195
|
|
26,728
|
|
(10,063
|
)
|
|||
Tax effect (1)
|
(294
|
)
|
(4,281
|
)
|
3,635
|
|
|||
Effects of economic hedging related to natural gas inventory
|
4,309
|
|
(22,570
|
)
|
38,470
|
|
|||
Tax effect
|
(1,024
|
)
|
7,362
|
|
(13,964
|
)
|
|||
Net financial earnings
|
$
|
2,918
|
|
$
|
60,378
|
|
$
|
18,554
|
|
(1)
|
Includes taxes related to an intercompany transaction between NJNG and Energy Services that have been eliminated in consolidation of approximately $(310,000), $(337,000) and $427,000 for the fiscal years ended September 30, 2019, 2018 and 2017, respectively.
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Equity in earnings of affiliates
|
$
|
15,832
|
|
$
|
16,165
|
|
$
|
17,797
|
|
Operation and maintenance
|
$
|
4,038
|
|
$
|
4,441
|
|
$
|
2,302
|
|
Other income
|
$
|
7,345
|
|
$
|
5,775
|
|
$
|
4,162
|
|
Interest expense, net
|
$
|
2,185
|
|
$
|
1,667
|
|
$
|
960
|
|
Income tax provision (benefit)
|
$
|
2,254
|
|
$
|
(8,548
|
)
|
$
|
5,820
|
|
Net income
|
$
|
14,689
|
|
$
|
24,367
|
|
$
|
12,857
|
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Steckman Ridge
|
$
|
9,472
|
|
$
|
11,283
|
|
$
|
13,351
|
|
PennEast
|
6,360
|
|
4,882
|
|
4,446
|
|
|||
Total equity in earnings of affiliates
|
$
|
15,832
|
|
$
|
16,165
|
|
$
|
17,797
|
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Operating revenues
|
$
|
50,902
|
|
$
|
50,057
|
|
$
|
49,591
|
|
Operation and maintenance
|
$
|
41,679
|
|
$
|
42,519
|
|
$
|
38,612
|
|
Energy and other taxes
|
$
|
3,167
|
|
$
|
4,042
|
|
$
|
3,938
|
|
Other (loss) income, net
|
$
|
(542
|
)
|
$
|
5,680
|
|
$
|
4,834
|
|
Income tax provision
|
$
|
1,428
|
|
$
|
11,944
|
|
$
|
3,857
|
|
Net income (loss)
|
$
|
1,637
|
|
$
|
(3,555
|
)
|
$
|
6,811
|
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Net income (loss)
|
$
|
1,637
|
|
$
|
(3,555
|
)
|
$
|
6,811
|
|
Add:
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
381
|
|
(381
|
)
|
—
|
|
|||
Tax effect
|
(107
|
)
|
107
|
|
—
|
|
|||
Net financial earnings (loss)
|
$
|
1,911
|
|
$
|
(3,829
|
)
|
$
|
6,811
|
|
|
2019
|
2018
|
||
Common stock equity
|
50
|
%
|
49
|
%
|
Long-term debt
|
49
|
|
41
|
|
Short-term debt
|
1
|
|
10
|
|
Total
|
100
|
%
|
100
|
%
|
|
|
Up to
|
1-3
|
3-5
|
After
|
||||||||||
(Thousands)
|
Total
|
1 Year
|
Years
|
Years
|
5 Years
|
||||||||||
Long-term debt (1)
|
$
|
2,368,723
|
|
$
|
51,387
|
|
$
|
152,775
|
|
$
|
216,326
|
|
$
|
1,948,235
|
|
Capital lease obligations (1)
|
38,624
|
|
11,707
|
|
14,097
|
|
8,647
|
|
4,173
|
|
|||||
Solar asset financing obligations (1)
|
69,617
|
|
7,830
|
|
15,605
|
|
15,237
|
|
30,945
|
|
|||||
Operating leases (1)
|
76,901
|
|
4,411
|
|
9,307
|
|
8,778
|
|
54,405
|
|
|||||
Short-term debt
|
25,450
|
|
25,450
|
|
—
|
|
—
|
|
—
|
|
|||||
New Jersey Clean Energy Program (1)
|
15,468
|
|
15,468
|
|
—
|
|
—
|
|
—
|
|
|||||
Construction obligations
|
27,591
|
|
27,591
|
|
—
|
|
—
|
|
—
|
|
|||||
Remediation expenditures (2)
|
131,080
|
|
20,080
|
|
36,928
|
|
18,240
|
|
55,832
|
|
|||||
Natural gas supply purchase obligations-NJNG
|
186,735
|
|
20,616
|
|
62,659
|
|
67,712
|
|
35,748
|
|
|||||
Demand fee commitments-NJNG
|
1,094,526
|
|
129,256
|
|
242,280
|
|
165,024
|
|
557,966
|
|
|||||
Natural gas supply purchase obligations-Energy Services
|
285,740
|
|
266,931
|
|
18,809
|
|
—
|
|
—
|
|
|||||
Demand fee commitments-Energy Services
|
309,367
|
|
104,237
|
|
144,992
|
|
50,350
|
|
9,788
|
|
|||||
Total contractual cash obligations
|
$
|
4,629,822
|
|
$
|
684,964
|
|
$
|
697,452
|
|
$
|
550,314
|
|
$
|
2,697,092
|
|
(1)
|
These obligations include an interest component, as defined under the related governing agreements or in accordance with the applicable tax statute.
|
(2)
|
Expenditures are estimated. See Note 14. Commitments and Contingent Liabilities in the accompanying Consolidated Financial Statements.
|
|
Moody's
|
Fitch
|
Corporate Rating
|
N/A
|
A-
|
Commercial Paper
|
P-1
|
F-2
|
Senior Secured
|
Aa3
|
A+
|
Ratings Outlook
|
Negative
|
Stable
|
|
Balance
|
Increase
|
Less
|
Balance
|
||||||||||||
(Thousands)
|
September 30,
2018 |
(Decrease) in Fair
Market Value
|
Amounts
Settled
|
September 30,
2019 |
||||||||||||
Natural Gas Distribution
|
|
$
|
94
|
|
|
$
|
(4,611
|
)
|
|
$
|
(4,329
|
)
|
|
$
|
(188
|
)
|
Energy Services
|
|
(13,925
|
)
|
(1)
|
(3,980
|
)
|
|
(6,265
|
)
|
|
(11,640
|
)
|
||||
Total
|
|
$
|
(13,831
|
)
|
|
$
|
(8,591
|
)
|
|
$
|
(10,594
|
)
|
|
$
|
(11,828
|
)
|
(Thousands)
|
2020
|
2021
|
2022 - 2024
|
After 2024
|
Total
Fair Value
|
|||||||||||||
Price based on NYMEX/CME
|
$
|
2,849
|
|
$
|
913
|
|
|
$
|
113
|
|
|
$
|
—
|
|
|
$
|
3,875
|
|
Price based on ICE
|
(14,296
|
)
|
(1,410
|
)
|
|
3
|
|
|
—
|
|
|
(15,703
|
)
|
|||||
Total
|
$
|
(11,447
|
)
|
$
|
(497
|
)
|
|
$
|
116
|
|
|
$
|
—
|
|
|
$
|
(11,828
|
)
|
|
|
Volume Bcf
|
Price per MMBtu (1)
|
Amounts included in Derivatives (Thousands)
|
||||
Natural Gas Distribution
|
Futures
|
27.6
|
|
$1.38 - $3.77
|
|
$
|
(188
|
)
|
Energy Services
|
Futures
|
(29.6
|
)
|
$0.59 - $6.25
|
|
(15,516
|
)
|
|
|
Swaps
|
(5.0
|
)
|
$2.72 - $3.46
|
|
3,876
|
|
|
|
Options
|
1.0
|
|
$0.02 - $0.02
|
|
—
|
|
|
Total
|
|
|
|
|
$
|
(11,828
|
)
|
(1)
|
Million British thermal units
|
|
Balance
|
Increase
|
Less
|
Balance
|
||||||||||
(Thousands)
|
September 30,
2018 |
(Decrease) in Fair
Market Value
|
Amounts
Settled
|
September 30,
2019 |
||||||||||
Natural Gas Distribution - Prices based on other external data
|
|
$
|
(107
|
)
|
|
2,691
|
|
|
2,762
|
|
|
$
|
(178
|
)
|
Energy Services - Prices based on other external data
|
|
(17,877
|
)
|
|
(25,137
|
)
|
|
(11,390
|
)
|
|
(31,624
|
)
|
||
Total
|
|
$
|
(17,984
|
)
|
|
(22,446
|
)
|
|
(8,628
|
)
|
|
$
|
(31,802
|
)
|
|
Balance
|
Increase
|
Less
|
Balance
|
||||||||||
(Thousands)
|
September 30, 2018
|
(Decrease) in Fair
Market Value
|
Amounts
Settled
|
September 30, 2019
|
||||||||||
Home Services and Other - Prices based on other external data
|
|
$
|
381
|
|
|
(233
|
)
|
|
148
|
|
|
$
|
—
|
|
|
Balance
|
Increase
|
Less
|
Balance
|
||||||||||
(Thousands)
|
September 30,
2018 |
(Decrease) in Fair
Market Value
|
Amounts
Settled
|
September 30,
2019 |
||||||||||
Energy Services
|
|
$
|
(244
|
)
|
|
(283
|
)
|
|
(242
|
)
|
|
$
|
(285
|
)
|
(Thousands)
|
2020
|
2021
|
2022 - 2024
|
|
After 2024
|
|
Total
Fair Value |
||||||||
Prices based on other external data
|
$
|
(211
|
)
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(285
|
)
|
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
|
$
|
—
|
|
$
|
3,006
|
|
$
|
6,012
|
|
$
|
9,019
|
|
$
|
12,025
|
|
Ending derivative fair value
|
$
|
4,154
|
|
$
|
7,160
|
|
$
|
10,166
|
|
$
|
13,173
|
|
$
|
16,179
|
|
Percent decrease in NYMEX natural gas futures prices
|
0%
|
(5)%
|
(10)%
|
(15)%
|
(20)%
|
||||||||||
Estimated change in derivative fair value
|
$
|
—
|
|
$
|
(3,006
|
)
|
$
|
(6,012
|
)
|
$
|
(9,019
|
)
|
$
|
(12,025
|
)
|
Ending derivative fair value
|
$
|
4,154
|
|
$
|
1,148
|
|
$
|
(1,858
|
)
|
$
|
(4,865
|
)
|
$
|
(7,871
|
)
|
(Thousands)
|
Gross Credit Exposure
|
Net Credit Exposure
|
||||||
Investment grade
|
|
$
|
139,100
|
|
|
$
|
121,026
|
|
Noninvestment grade
|
|
17,966
|
|
|
695
|
|
||
Internally-rated investment grade
|
|
27,767
|
|
|
23,200
|
|
||
Internally-rated noninvestment grade
|
|
10,480
|
|
|
4,119
|
|
||
Total
|
|
$
|
195,313
|
|
|
$
|
149,040
|
|
(Thousands)
|
Gross Credit Exposure
|
Net Credit Exposure
|
||||||
Investment grade
|
|
$
|
2,830
|
|
|
$
|
2,161
|
|
Noninvestment grade
|
|
31
|
|
|
—
|
|
||
Internally-rated investment grade
|
|
181
|
|
|
54
|
|
||
Internally-rated noninvestment grade
|
|
18,844
|
|
|
12,980
|
|
||
Total
|
|
$
|
21,886
|
|
|
$
|
15,195
|
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
•
|
We tested the effectiveness of controls over the relevant regulatory account balances and disclosures, including management’s controls over the monitoring and evaluation of regulatory developments that may affect the probability of recovering costs in future rates or of a future reduction in rates.
|
•
|
We evaluated the Company’s disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.
|
•
|
We read relevant regulatory orders issued by the BPU for the Company and other public utilities in New Jersey, regulatory statutes, interpretations, procedural memorandums, filings made by interveners, and other publicly available information to assess the probability of recovery in future rates or of a future reduction in rates based on precedence of the BPU’s treatment of similar costs under similar circumstances. We also obtained and read the November 13, 2019 BPU order adopting the stipulation of settlement for NJNG’s March 2019 base rate case as well as the publicly available filings made by the Company and its related attachments. We evaluated the external information and compared that to management’s assertions regarding the probability of recovery or refund of regulatory asset and liability balances.
|
•
|
We obtained an analysis from management describing the orders and filings that support management’s assertions regarding the probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities to assess management’s assertion that amounts are probable of recovery or a future reduction in rates.
|
•
|
We tested the effectiveness of controls over management’s evaluation of the PennEast investment for impairment including those related to the probabilities associated with the development options and legal outcomes, the forecasting of future revenues and construction costs, and the selection of the discount rate.
|
•
|
We evaluated the reasonableness of the probabilities related to the development options and legal outcomes by making inquiries with legal counsel regarding the likely outcomes of future court rulings, and with engineering, operations, and the executive management team regarding the viability of development options. We compared the results of these legal and management inquiries to internal communications to management, the Board of Directors, and PennEast member partners to search for contradictory information. We also read external information included in press releases, earnings releases, regulatory filings, and other PennEast member communications to search for contradictory information.
|
•
|
We evaluated the reasonableness of the forecasts of revenues (including forecasted volumes and rates) and construction costs by:
|
–
|
Comparing management’s volume assumptions to contractual agreements where applicable and information regarding demand and capacity volumes in the region for the remaining volumes.
|
–
|
Comparing management’s rate assumptions to contractual agreements where applicable and evaluating management’s future price assumptions against relevant market price curves.
|
–
|
Evaluating the reasonableness of management’s construction cost assumptions by comparing other similar pipeline project costs to the construction costs assumed by management, in addition to agreeing to source information used by management to develop the construction cost estimate.
|
–
|
Reading internal communications to management and the Board of Directors and external information included in press releases, earnings releases and other PennEast member communications to search for contradictory information.
|
•
|
We evaluated the selection of the discount rate with the assistance of our fair value specialists, by:
|
–
|
Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.
|
–
|
Developing a range of independent estimates and comparing those to the discount rate selected by management.
|
(Thousands, except per share data)
|
|
|
|||||||
Fiscal years ended September 30,
|
2019
|
2018
|
2017
|
||||||
OPERATING REVENUES
|
|
|
|
||||||
Utility
|
$
|
710,793
|
|
$
|
731,865
|
|
$
|
695,637
|
|
Nonutility
|
1,881,252
|
|
2,183,244
|
|
1,572,980
|
|
|||
Total operating revenues
|
2,592,045
|
|
2,915,109
|
|
2,268,617
|
|
|||
OPERATING EXPENSES
|
|
|
|
||||||
Gas purchases:
|
|
|
|
||||||
Utility
|
320,256
|
|
276,005
|
|
258,687
|
|
|||
Nonutility
|
1,716,098
|
|
1,990,832
|
|
1,436,740
|
|
|||
Related parties
|
7,948
|
|
8,505
|
|
8,340
|
|
|||
Operation and maintenance
|
256,951
|
|
263,113
|
|
222,176
|
|
|||
Regulatory rider expenses
|
33,937
|
|
38,969
|
|
40,243
|
|
|||
Depreciation and amortization
|
91,730
|
|
85,701
|
|
81,841
|
|
|||
Energy and other taxes
|
11,190
|
|
52,102
|
|
49,366
|
|
|||
Total operating expenses
|
2,438,110
|
|
2,715,227
|
|
2,097,393
|
|
|||
OPERATING INCOME
|
153,935
|
|
199,882
|
|
171,224
|
|
|||
Other income, net
|
11,273
|
|
13,047
|
|
10,257
|
|
|||
Interest expense, net of capitalized interest
|
47,082
|
|
46,286
|
|
44,886
|
|
|||
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES
|
118,126
|
|
166,643
|
|
136,595
|
|
|||
Income tax (benefit) provision
|
(37,751
|
)
|
(53,785
|
)
|
18,343
|
|
|||
Equity in earnings of affiliates
|
13,628
|
|
13,008
|
|
13,813
|
|
|||
NET INCOME
|
$
|
169,505
|
|
$
|
233,436
|
|
$
|
132,065
|
|
|
|
|
|
||||||
EARNINGS PER COMMON SHARE
|
|
|
|
||||||
Basic
|
$1.90
|
$2.66
|
$1.53
|
||||||
Diluted
|
$1.89
|
$2.64
|
$1.52
|
||||||
WEIGHTED AVERAGE SHARES OUTSTANDING
|
|
|
|
||||||
Basic
|
89,242
|
|
87,689
|
|
86,321
|
|
|||
Diluted
|
89,616
|
|
88,315
|
|
87,144
|
|
(Thousands)
|
|
|
|
||||||
Fiscal years ended September 30,
|
2019
|
2018
|
2017
|
||||||
Net income
|
$
|
169,505
|
|
$
|
233,436
|
|
$
|
132,065
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
||||||
Unrealized (loss) gain on investments in equity securities, net of tax of $0, $6,973 and $(4,401), respectively
|
—
|
|
(19,245
|
)
|
6,846
|
|
|||
Reclassifications of losses to net income on investments in equity securities, net of tax of $0, $(858) and $0, respectively
|
—
|
|
11,647
|
|
—
|
|
|||
Adjustment to postemployment benefit obligation, net of tax of $6,106, $(573) and $(3,487), respectively
|
(15,731
|
)
|
1,520
|
|
5,053
|
|
|||
Other comprehensive (loss) income
|
(15,731
|
)
|
(6,078
|
)
|
11,899
|
|
|||
Comprehensive income
|
$
|
153,774
|
|
$
|
227,358
|
|
$
|
143,964
|
|
(Thousands)
|
|
|
|
|
|
||||||
Fiscal years ended September 30,
|
2019
|
|
2018
|
|
2017
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
169,505
|
|
|
$
|
233,436
|
|
|
$
|
132,065
|
|
Adjustments to reconcile net income to cash flows from operating activities
|
|
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments
|
2,881
|
|
|
26,770
|
|
|
(11,241
|
)
|
|||
Gain on sale of available for sale securities
|
(1,567
|
)
|
|
(5,332
|
)
|
|
(7,287
|
)
|
|||
Gain on sale of businesses
|
(645
|
)
|
|
(4,663
|
)
|
|
—
|
|
|||
Depreciation and amortization
|
91,730
|
|
|
85,701
|
|
|
81,841
|
|
|||
Amortization of acquired wholesale energy contracts
|
8,424
|
|
|
18,222
|
|
|
762
|
|
|||
Allowance for equity used during construction
|
(6,492
|
)
|
|
(5,531
|
)
|
|
(3,867
|
)
|
|||
Allowance for doubtful accounts
|
2,387
|
|
|
2,579
|
|
|
2,023
|
|
|||
Deferred income taxes
|
(59,013
|
)
|
|
15,590
|
|
|
41,442
|
|
|||
Deferred income tax benefit due to tax legislation
|
—
|
|
|
(75,736
|
)
|
|
—
|
|
|||
Equivalent value of ITCs recognized on equipment financing
|
(6,482
|
)
|
|
—
|
|
|
—
|
|
|||
Manufactured gas plant remediation costs
|
(13,878
|
)
|
|
(16,171
|
)
|
|
(10,934
|
)
|
|||
Equity in earnings, net of distributions received from equity investees
|
(4,156
|
)
|
|
(1,725
|
)
|
|
(462
|
)
|
|||
Cost of removal - asset retirement obligations
|
(258
|
)
|
|
(298
|
)
|
|
(484
|
)
|
|||
Contributions to postemployment benefit plans
|
(8,157
|
)
|
|
(6,359
|
)
|
|
(6,077
|
)
|
|||
Tax benefit of delivered shares from stock based compensation
|
1,290
|
|
|
2,950
|
|
|
1,285
|
|
|||
Changes in:
|
|
|
|
|
|
||||||
Components of working capital
|
(27,759
|
)
|
|
97,004
|
|
|
17,081
|
|
|||
Other noncurrent assets
|
3,415
|
|
|
17,860
|
|
|
13,978
|
|
|||
Other noncurrent liabilities
|
38,125
|
|
|
13,989
|
|
|
(2,079
|
)
|
|||
Cash flows from operating activities
|
189,350
|
|
|
398,286
|
|
|
248,046
|
|
|||
CASH FLOWS USED IN INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Expenditures for:
|
|
|
|
|
|
||||||
Utility plant
|
(300,031
|
)
|
|
(206,880
|
)
|
|
(144,106
|
)
|
|||
Solar and wind equipment
|
(157,828
|
)
|
|
(123,421
|
)
|
|
(149,400
|
)
|
|||
Midstream and other
|
(23,100
|
)
|
|
(6,644
|
)
|
|
(2,434
|
)
|
|||
Cost of removal
|
(40,195
|
)
|
|
(47,643
|
)
|
|
(32,143
|
)
|
|||
Acquisition of retail and wholesale energy contracts
|
—
|
|
|
—
|
|
|
(55,661
|
)
|
|||
Investments in equity investees
|
(4,102
|
)
|
|
(16,151
|
)
|
|
(27,070
|
)
|
|||
Distributions from equity investees in excess of equity in earnings
|
2,428
|
|
|
3,117
|
|
|
2,749
|
|
|||
Cash paid related to acquisition
|
—
|
|
|
(10,000
|
)
|
|
—
|
|
|||
Proceeds from sale of property, net of closing costs
|
—
|
|
|
—
|
|
|
9,443
|
|
|||
Proceeds from sale of businesses, net of closing costs
|
205,745
|
|
|
27,916
|
|
|
—
|
|
|||
Proceeds from sale of available for sale securities, net
|
34,484
|
|
|
6,616
|
|
|
6,639
|
|
|||
Cash flows used in investing activities
|
(282,599
|
)
|
|
(373,090
|
)
|
|
(391,983
|
)
|
|||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from long-term debt
|
467,900
|
|
|
225,000
|
|
|
100,000
|
|
|||
Payments of long-term debt
|
(218,638
|
)
|
|
(165,486
|
)
|
|
(97,854
|
)
|
|||
(Payments of) proceeds from short-term debt, net
|
(126,500
|
)
|
|
(114,050
|
)
|
|
144,300
|
|
|||
Proceeds from sale-leaseback transaction - solar
|
—
|
|
|
71,538
|
|
|
32,901
|
|
|||
Proceeds from sale-leaseback transaction - gas meters
|
9,895
|
|
|
7,820
|
|
|
9,587
|
|
|||
Payments of common stock dividends
|
(104,059
|
)
|
|
(95,835
|
)
|
|
(87,988
|
)
|
|||
Proceeds from waiver discount issuance of common stock
|
57,391
|
|
|
41,677
|
|
|
—
|
|
|||
Proceeds from issuance of common stock
|
16,717
|
|
|
17,136
|
|
|
17,492
|
|
|||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
(6,355
|
)
|
|||
Tax withholding payments related to net settled stock compensation
|
(7,104
|
)
|
|
(13,755
|
)
|
|
(4,788
|
)
|
|||
Cash flows from (used in) financing activities
|
95,602
|
|
|
(25,955
|
)
|
|
107,295
|
|
|||
Change in cash, cash equivalents and restricted cash
|
2,353
|
|
|
(759
|
)
|
|
(36,642
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
1,710
|
|
|
2,469
|
|
|
39,111
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
4,063
|
|
|
$
|
1,710
|
|
|
$
|
2,469
|
|
CHANGES IN COMPONENTS OF WORKING CAPITAL
|
|
|
|
|
|
||||||
Receivables
|
$
|
63,795
|
|
|
$
|
(7,524
|
)
|
|
$
|
(56,974
|
)
|
Inventories
|
14,265
|
|
|
15,464
|
|
|
3,022
|
|
|||
Recovery of gas costs
|
(15,733
|
)
|
|
30,439
|
|
|
(90
|
)
|
|||
Gas purchases payable
|
(74,031
|
)
|
|
51,187
|
|
|
20,663
|
|
|||
Gas purchases payable - related parties
|
(360
|
)
|
|
(1
|
)
|
|
2
|
|
|||
Prepaid and accrued taxes
|
2,271
|
|
|
1,254
|
|
|
10,366
|
|
|||
Accounts payable and other
|
2,256
|
|
|
40,422
|
|
|
13,086
|
|
|||
Restricted broker margin accounts
|
(22,004
|
)
|
|
(30,974
|
)
|
|
22,570
|
|
|||
Customers’ credit balances and deposits
|
(209
|
)
|
|
368
|
|
|
(5,877
|
)
|
|||
Other current assets
|
1,991
|
|
|
(3,631
|
)
|
|
10,313
|
|
|||
Total
|
$
|
(27,759
|
)
|
|
$
|
97,004
|
|
|
$
|
17,081
|
|
SUPPLEMENTAL DISCLOSURES
|
|
|
|
|
|
||||||
Cash paid (received) for:
|
|
|
|
|
|
||||||
Interest (net of amounts capitalized)
|
$
|
50,371
|
|
|
$
|
44,821
|
|
|
$
|
44,362
|
|
Income taxes
|
$
|
12,647
|
|
|
$
|
5,577
|
|
|
$
|
(6,877
|
)
|
Accrued capital expenditures
|
$
|
30,725
|
|
|
$
|
30,559
|
|
|
$
|
21,769
|
|
Inception gain on natural gas swap contract recognized as non-cash proceeds from sale of business
|
$
|
—
|
|
|
$
|
14,579
|
|
|
$
|
—
|
|
See Notes to Consolidated Financial Statements
|
(Thousands)
|
|
|
||||
September 30,
|
2019
|
2018
|
||||
|
|
|
||||
PROPERTY, PLANT AND EQUIPMENT
|
|
|
||||
Utility plant, at cost
|
$
|
2,625,730
|
|
$
|
2,368,914
|
|
Construction work in progress
|
232,233
|
|
192,481
|
|
||
Nonutility plant and equipment, at cost
|
861,904
|
|
697,406
|
|
||
Construction work in progress
|
62,492
|
|
45,690
|
|
||
Total property, plant and equipment
|
3,782,359
|
|
3,304,491
|
|
||
Accumulated depreciation and amortization, utility plant
|
(585,160
|
)
|
(530,753
|
)
|
||
Accumulated depreciation and amortization, nonutility plant and equipment
|
(156,033
|
)
|
(122,689
|
)
|
||
Property, plant and equipment, net
|
3,041,166
|
|
2,651,049
|
|
||
|
|
|
||||
CURRENT ASSETS
|
|
|
||||
Cash and cash equivalents
|
2,676
|
|
1,458
|
|
||
Customer accounts receivable:
|
|
|
||||
Billed
|
139,263
|
|
205,490
|
|
||
Unbilled revenues
|
6,510
|
|
7,199
|
|
||
Allowance for doubtful accounts
|
(6,148
|
)
|
(5,704
|
)
|
||
Regulatory assets
|
32,871
|
|
18,297
|
|
||
Gas in storage, at average cost
|
169,803
|
|
184,633
|
|
||
Materials and supplies, at average cost
|
14,475
|
|
13,910
|
|
||
Prepaid and accrued taxes
|
22,602
|
|
23,047
|
|
||
Derivatives, at fair value
|
25,103
|
|
27,396
|
|
||
Restricted broker margin accounts
|
73,723
|
|
53,719
|
|
||
Asset held for sale
|
—
|
|
206,905
|
|
||
Other current assets
|
30,728
|
|
33,730
|
|
||
Total current assets
|
511,606
|
|
770,080
|
|
||
|
|
|
||||
NONCURRENT ASSETS
|
|
|
||||
Investments in equity investees
|
200,268
|
|
190,866
|
|
||
Regulatory assets
|
496,637
|
|
368,592
|
|
||
Derivatives, at fair value
|
7,426
|
|
10,560
|
|
||
Available for sale securities
|
—
|
|
32,917
|
|
||
Intangible assets
|
14,611
|
|
23,375
|
|
||
Other noncurrent assets
|
101,271
|
|
96,225
|
|
||
Total noncurrent assets
|
820,213
|
|
722,535
|
|
||
Total assets
|
$
|
4,372,985
|
|
$
|
4,143,664
|
|
(Thousands, except share data)
|
|
|
||||
September 30,
|
2019
|
2018
|
||||
|
|
|
||||
CAPITALIZATION
|
|
|
||||
Common stock, $2.50 par value; authorized 150,000,000 shares; outstanding
September 30, 2019 — 89,998,788; September 30, 2018 — 88,292,956 |
$
|
226,649
|
|
$
|
226,196
|
|
Premium on common stock
|
291,331
|
|
274,748
|
|
||
Accumulated other comprehensive loss, net of tax
|
(31,787
|
)
|
(12,610
|
)
|
||
Treasury stock at cost and other; shares September 30, 2019 — 660,734;
September 30, 2018 — 2,185,013 |
(10,436
|
)
|
(76,473
|
)
|
||
Retained earnings
|
1,075,960
|
|
1,007,117
|
|
||
Common stock equity
|
1,551,717
|
|
1,418,978
|
|
||
Long-term debt
|
1,537,177
|
|
1,180,619
|
|
||
Total capitalization
|
3,088,894
|
|
2,599,597
|
|
||
|
|
|
||||
CURRENT LIABILITIES
|
|
|
||||
Current maturities of long-term debt
|
21,419
|
|
123,545
|
|
||
Short-term debt
|
25,450
|
|
151,950
|
|
||
Gas purchases payable
|
137,271
|
|
211,303
|
|
||
Gas purchases payable to related parties
|
790
|
|
1,150
|
|
||
Accounts payable and other
|
129,724
|
|
135,240
|
|
||
Dividends payable
|
28,122
|
|
25,824
|
|
||
Accrued taxes
|
3,394
|
|
1,568
|
|
||
Regulatory liabilities
|
—
|
|
8,185
|
|
||
New Jersey Clean Energy Program
|
15,468
|
|
14,052
|
|
||
Derivatives, at fair value
|
57,623
|
|
46,652
|
|
||
Liabilities held for sale
|
—
|
|
4,182
|
|
||
Customers’ credit balances and deposits
|
27,116
|
|
27,325
|
|
||
Total current liabilities
|
446,377
|
|
750,976
|
|
||
|
|
|
||||
NONCURRENT LIABILITIES
|
|
|
||||
Deferred income taxes
|
190,663
|
|
242,436
|
|
||
Deferred investment tax credits
|
3,653
|
|
3,976
|
|
||
Deferred gain
|
1,554
|
|
9,104
|
|
||
Derivatives, at fair value
|
18,821
|
|
22,982
|
|
||
Manufactured gas plant remediation
|
131,080
|
|
130,800
|
|
||
Postemployment employee benefit liability
|
246,517
|
|
137,007
|
|
||
Regulatory liabilities
|
202,435
|
|
209,139
|
|
||
Asset retirement obligation
|
31,046
|
|
28,688
|
|
||
Other noncurrent liabilities
|
11,945
|
|
8,959
|
|
||
Total noncurrent liabilities
|
837,714
|
|
793,091
|
|
||
Commitments and contingent liabilities (Note 14)
|
|
|
|
|||
Total capitalization and liabilities
|
$
|
4,372,985
|
|
$
|
4,143,664
|
|
(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
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
132,065
|
|
132,065
|
|
||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
|
11,899
|
|
|
—
|
|
—
|
|
11,899
|
|
||||||
Common stock issued:
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Incentive compensation plan
|
241
|
|
604
|
|
5,090
|
|
|
—
|
|
|
—
|
|
—
|
|
5,694
|
|
||||||
Dividend reinvestment plan (1)
|
472
|
|
—
|
|
(946
|
)
|
|
—
|
|
|
18,568
|
|
—
|
|
17,622
|
|
||||||
Cash dividend declared ($1.0375 per share)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
(89,637
|
)
|
(89,637
|
)
|
||||||
Treasury stock and other
|
(243
|
)
|
—
|
|
(28
|
)
|
|
—
|
|
|
(7,563
|
)
|
—
|
|
(7,591
|
)
|
||||||
Balance at September 30, 2017
|
86,556
|
|
222,258
|
|
219,696
|
|
|
(3,256
|
)
|
|
(70,039
|
)
|
867,984
|
|
1,236,643
|
|
||||||
Net income
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
233,436
|
|
233,436
|
|
||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
|
(6,078
|
)
|
|
—
|
|
—
|
|
(6,078
|
)
|
||||||
Common stock issued:
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Incentive compensation plan
|
561
|
|
1,403
|
|
15,169
|
|
|
—
|
|
|
—
|
|
—
|
|
16,572
|
|
||||||
Dividend reinvestment plan (1)
|
413
|
|
—
|
|
755
|
|
|
—
|
|
|
16,339
|
|
—
|
|
17,094
|
|
||||||
Waiver discount
|
1,014
|
|
2,535
|
|
39,142
|
|
|
—
|
|
|
—
|
|
—
|
|
41,677
|
|
||||||
Cash dividend declared ($1.11 per share)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
(97,579
|
)
|
(97,579
|
)
|
||||||
Treasury stock and other
|
(251
|
)
|
—
|
|
(14
|
)
|
|
—
|
|
|
(22,773
|
)
|
—
|
|
(22,787
|
)
|
||||||
Reclassifications of certain income tax effects to retained earnings
|
—
|
|
—
|
|
—
|
|
|
(3,276
|
)
|
|
—
|
|
3,276
|
|
—
|
|
||||||
Balance at September 30, 2018
|
88,293
|
|
226,196
|
|
274,748
|
|
|
(12,610
|
)
|
|
(76,473
|
)
|
1,007,117
|
|
1,418,978
|
|
||||||
Net income
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
169,505
|
|
169,505
|
|
||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
|
(15,731
|
)
|
|
—
|
|
—
|
|
(15,731
|
)
|
||||||
Common stock issued:
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Incentive compensation plan
|
182
|
|
453
|
|
3,334
|
|
|
—
|
|
|
—
|
|
—
|
|
3,787
|
|
||||||
Dividend reinvestment plan (1)
|
351
|
|
—
|
|
2,718
|
|
|
—
|
|
|
13,945
|
|
—
|
|
16,663
|
|
||||||
Waiver discount
|
1,181
|
|
—
|
|
10,531
|
|
|
—
|
|
|
46,860
|
|
—
|
|
57,391
|
|
||||||
Cash dividend declared ($1.19 per share)
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
(106,342
|
)
|
(106,342
|
)
|
|||||||
Treasury stock and other
|
(8
|
)
|
—
|
|
—
|
|
|
—
|
|
|
5,232
|
|
—
|
|
5,232
|
|
||||||
Adoption of ASU 2016-01 (2)
|
—
|
|
—
|
|
—
|
|
|
(3,446
|
)
|
|
—
|
|
3,446
|
|
—
|
|
||||||
Adoption of ASU 2017-05 (2)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
4,970
|
|
4,970
|
|
||||||
Adoption of ASU 2014-09/ASC 606 (2)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
(2,736
|
)
|
(2,736
|
)
|
||||||
Balance at September 30, 2019
|
89,999
|
|
$
|
226,649
|
|
$
|
291,331
|
|
|
$
|
(31,787
|
)
|
|
$
|
(10,436
|
)
|
$
|
1,075,960
|
|
$
|
1,551,717
|
|
(1)
|
Shares sold through the DRP are issued from treasury stock at average cost, which may differ from the actual market price paid.
|
(2)
|
See Note 2. Summary of Significant Accounting Policies - Recently Adopted Updates to the Accounting Standards Codification section for more details.
|
(Millions)
|
2019
|
2018
|
2017
|
||||||
Energy Services
|
$
|
120.4
|
|
$
|
153.0
|
|
$
|
126.4
|
|
Natural Gas Distribution
|
119.1
|
|
92.5
|
|
80.2
|
|
|||
Total
|
$
|
239.5
|
|
$
|
245.5
|
|
$
|
206.6
|
|
($ in thousands)
|
2019
|
2018
|
2017
|
||||||
AFUDC:
|
|
|
|
||||||
Debt
|
$
|
3,710
|
|
$
|
1,979
|
|
$
|
1,311
|
|
Equity
|
6,492
|
|
5,531
|
|
3,867
|
|
|||
Total
|
$
|
10,202
|
|
$
|
7,510
|
|
$
|
5,178
|
|
Weighted average interest rate
|
6.35
|
%
|
5.94
|
%
|
6.90
|
%
|
|
2019
|
2018
|
||||||||||
($ in thousands)
|
Gas in Storage
|
|
Bcf
|
Gas in Storage
|
|
Bcf
|
||||||
Energy Services
|
|
$
|
52,390
|
|
25.6
|
|
|
$
|
90,166
|
|
34.1
|
|
Natural Gas Distribution
|
|
117,413
|
|
27.0
|
|
|
94,467
|
|
24.9
|
|
||
Total
|
|
$
|
169,803
|
|
52.6
|
|
|
$
|
184,633
|
|
59.0
|
|
(Thousands)
|
September 30, 2018
|
|
Assets reclassified as held for sale
|
|
Assets
Sold
|
|
Other adjustments (1)
|
|
September 30, 2019
|
||||||||||
Assets held for sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment - wind equipment, at cost
|
$
|
224,356
|
|
|
$
|
—
|
|
|
$
|
(224,356
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Property, plant and equipment - accumulated depreciation, wind equipment
|
(18,501
|
)
|
|
—
|
|
|
18,501
|
|
|
$
|
—
|
|
|
—
|
|
||||
Prepaid and accrued taxes
|
789
|
|
|
1,747
|
|
|
(1,541
|
)
|
|
$
|
(995
|
)
|
|
—
|
|
||||
Other noncurrent assets
|
261
|
|
|
—
|
|
|
(261
|
)
|
|
$
|
—
|
|
|
—
|
|
||||
|
$
|
206,905
|
|
|
$
|
1,747
|
|
|
$
|
(207,657
|
)
|
|
$
|
(995
|
)
|
|
$
|
—
|
|
Liabilities held for sale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and other (1)
|
$
|
186
|
|
|
$
|
—
|
|
|
$
|
(186
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Asset retirement obligation
|
3,996
|
|
|
—
|
|
|
(3,996
|
)
|
|
—
|
|
|
—
|
|
|||||
|
$
|
4,182
|
|
|
$
|
—
|
|
|
$
|
(4,182
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Activity relates to amortization of prepaid and other current assets prior to the sale of the Company’s remaining wind assets in February 2019.
|
(Thousands)
|
|
||
2020
|
$
|
5,011
|
|
2021
|
$
|
4,691
|
|
2022
|
$
|
2,561
|
|
2023
|
$
|
2,271
|
|
2024 and thereafter
|
$
|
77
|
|
(Thousands)
|
Investments in Equity Securities
|
Adjustment to postemployment benefit obligation
|
Total
|
||||||||
Balance at September 30, 2017
|
$
|
11,044
|
|
|
$
|
(14,300
|
)
|
|
$
|
(3,256
|
)
|
Other comprehensive income, net of tax
|
|
|
|
|
|
||||||
Other comprehensive (loss) income, before reclassifications, net of tax of $6,973, $(125), $6,848
|
(19,245
|
)
|
|
464
|
|
|
(18,781
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income, net of tax of $(858), $(448), $(1,306)
|
11,647
|
|
|
1,056
|
|
(1)
|
12,703
|
|
|||
Net current-period other comprehensive (loss) income, net of tax of $6,115, $(573), $5,542
|
(7,598
|
)
|
|
1,520
|
|
|
(6,078
|
)
|
|||
Reclassifications of certain income tax effects to retained earnings (2)
|
—
|
|
|
(3,276
|
)
|
|
(3,276
|
)
|
|||
Balance at September 30, 2018
|
$
|
3,446
|
|
|
$
|
(16,056
|
)
|
|
$
|
(12,610
|
)
|
Other comprehensive income, net of tax
|
|
|
|
|
|
||||||
Other comprehensive (loss) income, before reclassifications, net of tax of $0, $6,557, $6,557
|
—
|
|
|
(16,978
|
)
|
|
(16,978
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax of $0, $(451), $(451)
|
—
|
|
|
1,247
|
|
(1)
|
1,247
|
|
|||
Net current-period other comprehensive income, net of tax of $0, $6,106, $6,106
|
—
|
|
|
(15,731
|
)
|
|
(15,731
|
)
|
|||
Reclassifications of certain income tax effects to retained earnings (3)
|
(3,446
|
)
|
|
—
|
|
|
(3,446
|
)
|
|||
Balance at September 30, 2019
|
$
|
—
|
|
|
$
|
(31,787
|
)
|
|
$
|
(31,787
|
)
|
(1)
|
Included in the computation of net periodic pension cost, a component of O&M expense on the Consolidated Statements of Operations. For more details, see Note 11. Employee Benefit Plans.
|
(2)
|
Due to the adoption of ASU No. 2018-02, an amendment to ASC 740, Income Taxes. See Note 2. Summary of Significant Accounting Policies - Recently Adopted Updates to the Accounting Standards Codification section for more details.
|
(3)
|
Due to the adoption of ASU No. 2016-01, an amendment to ASC 825, Financial Instruments. See Note 2. Summary of Significant Accounting Policies - Recently Adopted Updates to the Accounting Standards Codification section for more details.
|
(Thousands)
|
September 30,
2019 |
September 30,
2018 |
September 30,
2017 |
September 30,
2016 |
||||||||
Balance Sheet
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
2,676
|
|
$
|
1,458
|
|
$
|
2,226
|
|
$
|
37,546
|
|
Restricted cash in other noncurrent assets
|
1,387
|
|
252
|
|
243
|
|
1,565
|
|
||||
Statements of Cash Flow
|
|
|
|
|
||||||||
Cash, cash equivalents and restricted cash in the statement of cash flows
|
$
|
4,063
|
|
$
|
1,710
|
|
$
|
2,469
|
|
$
|
39,111
|
|
(Thousands)
|
As Previously Reported
|
Effect of Change
|
As Adjusted
|
||||||
Fiscal 2018
|
|
|
|
||||||
Statements of Operations
|
|
|
|
||||||
Operation and maintenance
|
$
|
266,919
|
|
$
|
(3,806
|
)
|
$
|
263,113
|
|
Total operating expenses
|
$
|
2,719,033
|
|
$
|
(3,806
|
)
|
$
|
2,715,227
|
|
Operating income
|
$
|
196,076
|
|
$
|
3,806
|
|
$
|
199,882
|
|
Other income (expense), net
|
$
|
16,853
|
|
$
|
(3,806
|
)
|
$
|
13,047
|
|
Fiscal 2017
|
|
|
|
||||||
Statements of Operations
|
|
|
|
||||||
Operation and maintenance
|
$
|
226,356
|
|
$
|
(4,180
|
)
|
$
|
222,176
|
|
Total operating expenses
|
$
|
2,101,573
|
|
$
|
(4,180
|
)
|
$
|
2,097,393
|
|
Operating income
|
$
|
167,044
|
|
$
|
4,180
|
|
$
|
171,224
|
|
Other income (expense), net
|
$
|
14,437
|
|
$
|
(4,180
|
)
|
$
|
10,257
|
|
Revenue Recognized Over Time:
|
||
Segment
|
Performance Obligation
|
Description
|
Natural Gas Distribution
|
Natural gas utility sales
|
NJNG's performance obligation is to provide natural gas to residential, commercial and industrial customers as demanded, based on regulated tariff rates, which are established by the BPU. Revenues from the sale of natural gas are recognized in the period that gas is delivered and consumed by customers, including an estimate for quantities consumed but not billed during the period. Payment is due each month for the previous month's deliveries. Natural gas sales to individual customers are based on meter readings, which are performed on a systematic basis throughout the billing period. The unbilled revenue estimates are based on estimated customer usage by customer type, weather effects and the most current tariff rates. NJNG is entitled to be compensated for performance completed until service is terminated.
Customers may elect to purchase the natural gas commodity from NJNG or may contract separately to purchase natural gas directly from third-party suppliers. As NJNG is acting as an agent on behalf of the third-party supplier, revenue is recorded for the delivery of natural gas to the customer.
|
Clean Energy Ventures
|
Commercial solar and wind electricity
|
Clean Energy Ventures operates wholly-owned solar projects that recognize revenue as electricity is generated and transferred to the customer. The performance obligation is to provide electricity to the customer in accordance with contract terms or the interconnection agreement and is satisfied upon transfer of electricity generated. All wind assets were sold as of February 7, 2019.
Revenue is recognized as invoiced and the payment is due each month for the previous month's services.
|
Clean Energy Ventures
|
Residential solar electricity
|
Clean Energy Ventures provides access to residential rooftop and ground-mount solar equipment to customers who then pay the Company a monthly fee. The performance obligation is to provide electricity to the customer based on generation from the underlying residential solar asset and is satisfied upon transfer of electricity generated.
Revenue is derived from the contract terms and is recognized as invoiced, with the payment due each month for the previous month's services.
|
Energy Services
|
Wholesale natural gas services
|
The performance obligation of Energy Services is to provide the customer transportation, storage and asset management services on an as-needed basis. Energy Services generates revenue through management fees, demand charges, reservation fees and transportation charges centered around the buying and selling of the natural gas commodity, representing one series of distinct performance obligations.
Revenue is recognized based upon the underlying natural gas quantities physically delivered and the customer obtaining control. Energy Services invoices customers on a monthly basis in line with the terms of the contract and based on the services provided. Payment is due each month for the previous month's invoiced services.
|
Home Services and Other
|
Service contracts
|
Home Services enters into service contracts with homeowners to provide maintenance and replacement services of applicable heating, cooling or ventilation equipment. All services provided relate to a distinct performance obligation which is to provide services for the specific equipment over the term of the contract.
Revenue is recognized on a straight-line basis over the term of the contract and payment is due upon receipt of the invoice.
|
Revenue Recognized at a Point in Time:
|
||
Home Services and Other
|
Installations
|
Home Services installs appliances, including but not limited to, furnaces, air conditioning units, boilers and generators, for customers. The distinct performance obligation is the installation of the contracted appliance, which is satisfied at the point in time the item is installed.
The transaction price for each installation differs accordingly. Revenue is recognition at a point in time upon completion of the installation, which is when the customer is billed. |
|
Regulated
|
Unregulated
|
|
|||||||||
(Thousands)
|
Natural Gas Distribution
|
Clean Energy Ventures
|
Energy Services
|
Home Services
and Other
|
Total
|
|||||||
Natural gas utility sales
|
$
|
680,151
|
|
—
|
|
—
|
|
—
|
|
$
|
680,151
|
|
Wholesale natural gas services
|
—
|
|
—
|
|
31,459
|
|
—
|
|
31,459
|
|
||
Service contracts
|
—
|
|
—
|
|
—
|
|
31,499
|
|
31,499
|
|
||
Installations and maintenance
|
—
|
|
—
|
|
—
|
|
19,403
|
|
19,403
|
|
||
Electricity sales
|
—
|
|
22,121
|
|
—
|
|
—
|
|
22,121
|
|
||
Eliminations(1)
|
—
|
|
—
|
|
—
|
|
(2,302
|
)
|
(2,302
|
)
|
||
Revenues from contracts with customers
|
680,151
|
|
22,121
|
|
31,459
|
|
48,600
|
|
782,331
|
|
||
Alternative revenue programs
|
10,364
|
|
—
|
|
—
|
|
—
|
|
10,364
|
|
||
Derivative Instruments
|
20,278
|
|
75,978
|
|
1,711,332
|
|
—
|
|
1,807,588
|
|
||
Eliminations(1)
|
—
|
|
—
|
|
(8,238
|
)
|
—
|
|
(8,238
|
)
|
||
Revenues out of scope
|
30,642
|
|
75,978
|
|
1,703,094
|
|
—
|
|
1,809,714
|
|
||
Total operating revenues
|
$
|
710,793
|
|
98,099
|
|
1,734,553
|
|
48,600
|
|
$
|
2,592,045
|
|
(1)
|
Consists of transactions between subsidiaries that are eliminated in consolidation.
|
|
Regulated
|
Unregulated
|
|
|||||||||
(Thousands)
|
Natural Gas Distribution
|
Clean Energy Ventures
|
Energy Services
|
Home Services
and Other
|
Total
|
|||||||
Residential
|
$
|
440,787
|
|
9,003
|
|
—
|
|
47,655
|
|
$
|
497,445
|
|
Commercial and industrial
|
171,357
|
|
13,118
|
|
31,459
|
|
945
|
|
216,879
|
|
||
Firm transportation
|
61,370
|
|
—
|
|
—
|
|
—
|
|
61,370
|
|
||
Interruptible and off-tariff
|
6,637
|
|
—
|
|
—
|
|
—
|
|
6,637
|
|
||
Revenues out of scope
|
30,642
|
|
75,978
|
|
1,703,094
|
|
—
|
|
1,809,714
|
|
||
Total operating revenues
|
$
|
710,793
|
|
98,099
|
|
1,734,553
|
|
48,600
|
|
$
|
2,592,045
|
|
|
Customer Accounts Receivable
|
Customers' Credit
|
|||||||
(Thousands)
|
Billed
|
Unbilled
|
Balances and Deposits
|
||||||
Balance as of October 1, 2018
|
$
|
205,490
|
|
$
|
7,199
|
|
$
|
27,325
|
|
Decrease
|
(66,227
|
)
|
(689
|
)
|
(209
|
)
|
|||
Balance as of September 30, 2019
|
$
|
139,263
|
|
$
|
6,510
|
|
$
|
27,116
|
|
(Thousands)
|
Natural Gas Distribution
|
Clean Energy Ventures
|
Energy Services
|
Home Services
and Other
|
Total
|
|||||||
Customer accounts receivable
|
|
|
|
|
|
|||||||
Billed
|
$
|
36,302
|
|
3,233
|
|
97,301
|
|
2,427
|
|
$
|
139,263
|
|
Unbilled
|
6,510
|
|
—
|
|
—
|
|
—
|
|
6,510
|
|
||
Customers' credit balances and deposits
|
(27,114
|
)
|
—
|
|
—
|
|
(2
|
)
|
(27,116
|
)
|
||
Total
|
$
|
15,698
|
|
3,233
|
|
97,301
|
|
2,425
|
|
$
|
118,657
|
|
(Thousands)
|
2019
|
2018
|
||||
Regulatory assets-current
|
|
|
||||
New Jersey Clean Energy Program
|
$
|
15,468
|
|
$
|
14,052
|
|
Underrecovered gas costs
|
9,506
|
|
4,137
|
|
||
Derivatives at fair value, net
|
4,526
|
|
108
|
|
||
Conservation Incentive Program
|
3,371
|
|
—
|
|
||
Total current regulatory assets
|
$
|
32,871
|
|
$
|
18,297
|
|
Regulatory assets-noncurrent
|
|
|
||||
Environmental remediation costs:
|
|
|
||||
Expended, net of recoveries
|
$
|
38,351
|
|
$
|
33,017
|
|
Liability for future expenditures
|
131,080
|
|
130,800
|
|
||
Deferred income taxes
|
19,631
|
|
17,225
|
|
||
Derivatives at fair value, net
|
486
|
|
—
|
|
||
SAVEGREEN
|
10,201
|
|
8,636
|
|
||
Postemployment and other benefit costs
|
212,461
|
|
136,716
|
|
||
Deferred storm damage costs
|
8,687
|
|
10,858
|
|
||
Cost of removal
|
65,660
|
|
22,339
|
|
||
Other noncurrent regulatory assets
|
10,080
|
|
9,001
|
|
||
Total noncurrent regulatory assets
|
$
|
496,637
|
|
$
|
368,592
|
|
Regulatory liability-current
|
|
|
||||
Conservation Incentive Program
|
$
|
—
|
|
$
|
6,994
|
|
Derivatives at fair value, net
|
—
|
|
1,191
|
|
||
Total current regulatory liabilities
|
$
|
—
|
|
$
|
8,185
|
|
Regulatory liabilities-noncurrent
|
|
|
||||
Tax Act impact (1)
|
$
|
200,417
|
|
$
|
205,410
|
|
New Jersey Clean Energy Program
|
197
|
|
1,902
|
|
||
Derivatives at fair value, net
|
—
|
|
123
|
|
||
Other noncurrent regulatory liabilities
|
1,821
|
|
1,704
|
|
||
Total noncurrent regulatory liabilities
|
$
|
202,435
|
|
$
|
209,139
|
|
(1)
|
Reflects the re-measurement and subsequent amortization of NJNG's net deferred tax liabilities as a result of the change in federal tax rates enacted in the Tax Act.
|
•
|
2018 BGSS/CIP filing — In April 2019, the BPU approved NJNG’s annual petition on a final basis to maintain its BGSS rate for residential and small commercial customers and increase its balancing charge rate, resulting in a $10.3 million increase to the annual revenues credited to BGSS, as well as changes to the CIP rates, which will result in a $30.9 million annual recovery decrease effective October 2018.
|
•
|
On December 28, 2018, NJNG notified the BPU that it will increase the BGSS rate, effective February 1, 2019, resulting in an estimated $10.9 million increase to the revenues credited to BGSS from February through September 30, 2019.
|
•
|
2019 BGSS/CIP filing — On September 11, 2019, the BPU provisionally approved NJNG’s annual petition to modify its BGSS, balancing charge and CIP rates. The rate changes will result in a $17.6 million decrease to the annual revenues credited to BGSS and a $15.6 million annual increase related to its balancing charge, as well as changes to CIP rates, which will result in a $10.6 million annual recovery increase, effective October 1, 2019.
|
•
|
2018 EE filing — On December 18, 2018, the BPU approved a decrease in NJNG's EE recovery rate reflecting actual costs incurred through September 30, 2018, which resulted in an annual recovery of approximately $8.8 million, effective January 1, 2019.
|
•
|
2019 EE filing — On October 25, 2019, the BPU approved an increase in NJNG's EE recovery rate, which will result in an annual recovery of approximately $11.3 million, effective November 1, 2019.
|
•
|
2018 SBC filing — In September 2018, the BPU approved NJNG’s annual USF compliance filing to increase the statewide USF rate, which resulted in a $1 million annual increase, effective October 1, 2018. In March 2019, the BPU approved NJNG’s annual SBC application requesting recovery of remediation expenses incurred through June 30, 2018, an increase in the RAC of approximately $1.4 million annually, and an increase to the NJCEP factor, which resulted in an annual increase of approximately $1.9 million, effective April 1, 2019.
|
•
|
2019 SBC filing — On June 24, 2019, NJNG filed its annual USF compliance filing proposing an increase to the statewide USF rate, which will result in the annual recovery increasing by $1.2 million, effective October 1, 2019. On September 27, 2019, NJNG filed its annual SBC application requesting to recover remediation expenses including an increase in the RAC, of approximately $1.4 million annually and an increase to the NJCEP factor, which will result in an annual increase of approximately $3.3 million, to be effective April 1, 2020.
|
|
|
|
Fair Value
|
||||||||||||||
|
|
|
2019
|
|
2018
|
||||||||||||
(Thousands)
|
Balance Sheet Location
|
Asset
Derivatives
|
Liability
Derivatives
|
Asset
Derivatives
|
Liability
Derivatives
|
||||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|||||||||
Natural Gas Distribution:
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
Derivatives - current
|
|
$
|
67
|
|
|
$
|
245
|
|
|
$
|
85
|
|
|
$
|
192
|
|
Financial commodity contracts
|
Derivatives - current
|
|
382
|
|
|
570
|
|
|
94
|
|
|
—
|
|
||||
Energy Services:
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
Derivatives - current
|
|
6,847
|
|
|
27,540
|
|
|
7,667
|
|
|
18,158
|
|
||||
|
Derivatives - noncurrent
|
|
1,710
|
|
|
12,641
|
|
|
3,930
|
|
|
11,316
|
|
||||
Financial commodity contracts
|
Derivatives - current
|
|
17,806
|
|
|
29,057
|
|
|
19,169
|
|
|
28,176
|
|
||||
|
Derivatives - noncurrent
|
|
5,716
|
|
|
6,105
|
|
|
6,630
|
|
|
11,548
|
|
||||
Foreign currency contracts
|
Derivatives - current
|
|
1
|
|
|
211
|
|
|
—
|
|
|
126
|
|
||||
|
Derivatives - noncurrent
|
|
—
|
|
|
75
|
|
|
—
|
|
|
118
|
|
||||
Home Services and Other:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
Derivatives - current
|
|
—
|
|
|
—
|
|
|
381
|
|
|
—
|
|
||||
Total fair value of derivatives
|
|
|
$
|
32,529
|
|
|
$
|
76,444
|
|
|
$
|
37,956
|
|
|
$
|
69,634
|
|
(Thousands)
|
Amounts Presented on Balance Sheets (1)
|
Offsetting Derivative Instruments (2)
|
Financial Collateral Received/Pledged (3)
|
Net Amounts (4)
|
||||||||||||
As of September 30, 2019:
|
|
|
|
|
|
|
|
|
||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
||||||||
Energy Services
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
8,557
|
|
|
$
|
(2,906
|
)
|
|
$
|
(200
|
)
|
|
$
|
5,451
|
|
Financial commodity contracts
|
|
23,522
|
|
|
(19,646
|
)
|
|
—
|
|
|
3,876
|
|
||||
Foreign currency contracts
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Total Energy Services
|
|
$
|
32,080
|
|
|
$
|
(22,553
|
)
|
|
$
|
(200
|
)
|
|
$
|
9,327
|
|
Natural Gas Distribution
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
67
|
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
58
|
|
Financial commodity contracts
|
|
382
|
|
|
(382
|
)
|
|
—
|
|
|
—
|
|
||||
Total Natural Gas Distribution
|
|
$
|
449
|
|
|
$
|
(391
|
)
|
|
$
|
—
|
|
|
$
|
58
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Energy Services
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
40,181
|
|
|
$
|
(2,906
|
)
|
|
$
|
—
|
|
|
$
|
37,275
|
|
Financial commodity contracts
|
|
35,162
|
|
|
(19,646
|
)
|
|
(15,516
|
)
|
|
—
|
|
||||
Foreign currency contracts
|
|
286
|
|
|
(1
|
)
|
|
—
|
|
|
285
|
|
||||
Total Energy Services
|
|
$
|
75,629
|
|
|
$
|
(22,553
|
)
|
|
$
|
(15,516
|
)
|
|
$
|
37,560
|
|
Natural Gas Distribution
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
245
|
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
236
|
|
Financial commodity contracts
|
|
570
|
|
|
(382
|
)
|
|
(188
|
)
|
|
—
|
|
||||
Total Natural Gas Distribution
|
|
$
|
815
|
|
|
$
|
(391
|
)
|
|
$
|
(188
|
)
|
|
$
|
236
|
|
As of September 30, 2018:
|
|
|
|
|
|
|
|
|
||||||||
Derivative assets:
|
|
|
|
|
|
|
|
|
||||||||
Energy Services
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
11,597
|
|
|
$
|
(3,944
|
)
|
|
$
|
(200
|
)
|
|
$
|
7,453
|
|
Financial commodity contracts
|
|
25,799
|
|
|
(18,775
|
)
|
|
—
|
|
|
7,024
|
|
||||
Total Energy Services
|
|
$
|
37,396
|
|
|
$
|
(22,719
|
)
|
|
$
|
(200
|
)
|
|
$
|
14,477
|
|
Natural Gas Distribution
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
85
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
82
|
|
Financial commodity contracts
|
|
94
|
|
|
—
|
|
|
(94
|
)
|
|
—
|
|
||||
Total Natural Gas Distribution
|
|
$
|
179
|
|
|
$
|
(3
|
)
|
|
$
|
(94
|
)
|
|
$
|
82
|
|
Home Services and Other
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
|
$
|
381
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
381
|
|
Total Home Services and Other
|
|
$
|
381
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
381
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Energy Services
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
29,474
|
|
|
$
|
(3,944
|
)
|
|
$
|
—
|
|
|
$
|
25,530
|
|
Financial commodity contracts
|
|
39,724
|
|
|
(18,775
|
)
|
|
(20,949
|
)
|
|
—
|
|
||||
Foreign currency contracts
|
|
244
|
|
|
—
|
|
|
—
|
|
|
244
|
|
||||
Total Energy Services
|
|
$
|
69,442
|
|
|
$
|
(22,719
|
)
|
|
$
|
(20,949
|
)
|
|
$
|
25,774
|
|
Natural Gas Distribution
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
192
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
189
|
|
Total Natural Gas Distribution
|
|
$
|
192
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
189
|
|
(1)
|
Derivative assets and liabilities are presented on a gross basis on 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
|
||||||||||
Derivatives not designated as hedging instruments:
|
2019
|
|
2018
|
|
2017
|
|||||||
Energy Services:
|
|
|
|
|
|
|
||||||
Physical commodity contracts
|
Operating revenues
|
$
|
(5,732
|
)
|
|
$
|
(9,311
|
)
|
|
$
|
8,912
|
|
Physical commodity contracts
|
Gas purchases
|
(521
|
)
|
|
(197
|
)
|
|
(27,461
|
)
|
|||
Financial commodity contracts
|
Gas purchases
|
(643
|
)
|
|
(24,622
|
)
|
|
26,563
|
|
|||
Foreign currency contracts
|
Gas purchases
|
(283
|
)
|
|
(379
|
)
|
|
41
|
|
|||
Home Services and Other:
|
|
|
|
|
|
|
||||||
Interest rate contracts
|
Interest expense
|
(233
|
)
|
|
334
|
|
|
—
|
|
|||
Total unrealized and realized (losses) gains
|
$
|
(7,412
|
)
|
|
$
|
(34,175
|
)
|
|
$
|
8,055
|
|
(Thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Natural Gas Distribution:
|
|
|
|
|
|
||||||
Physical commodity contracts
|
$
|
5,926
|
|
|
$
|
1,232
|
|
|
$
|
(12,303
|
)
|
Financial commodity contracts
|
(7,700
|
)
|
|
1,844
|
|
|
5,595
|
|
|||
Interest rate contracts
|
—
|
|
|
8,467
|
|
|
14,606
|
|
|||
Total unrealized and realized (losses) gains
|
$
|
(1,774
|
)
|
|
$
|
11,543
|
|
|
$
|
7,898
|
|
|
|
|
Volume (Bcf)
|
||||
|
|
|
2019
|
|
2018
|
||
Natural Gas Distribution
|
Futures
|
|
27.6
|
|
|
27.9
|
|
|
Physical
|
|
11.6
|
|
|
23.1
|
|
Energy Services
|
Futures
|
|
(29.6
|
)
|
|
(7.0
|
)
|
|
Physical
|
|
44.5
|
|
|
51.2
|
|
(Thousands)
|
Balance Sheet Location
|
2019
|
2018
|
||||
Natural Gas Distribution
|
Restricted broker margin accounts
|
$
|
1,982
|
|
$
|
2,038
|
|
Energy Services
|
Restricted broker margin accounts
|
$
|
71,741
|
|
$
|
51,681
|
|
(Thousands)
|
Gross Credit
Exposure
|
||||
Investment grade
|
|
$
|
141,930
|
|
|
Noninvestment grade
|
|
17,997
|
|
|
|
Internally-rated investment grade
|
|
27,948
|
|
|
|
Internally-rated noninvestment grade
|
|
29,324
|
|
|
|
Total
|
|
$
|
217,199
|
|
|
(Thousands)
|
2019
|
2018
|
||||
NJNG
|
|
|
||||
Carrying value
|
$
|
892,845
|
|
$
|
672,045
|
|
Fair market value
|
$
|
984,129
|
|
$
|
669,162
|
|
NJR
|
|
|
||||
Carrying value
|
$
|
550,000
|
|
$
|
500,000
|
|
Fair market value
|
$
|
584,735
|
|
$
|
488,889
|
|
(1)
|
See Note 9. Debt for a reconciliation to long-term and short-term debt.
|
Level 1
|
Unadjusted quoted prices for identical assets or liabilities in active markets. The Company’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 the Company refers to internally 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. The Company’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). 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 the Company’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 September 30, 2019:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
8,624
|
|
|
|
$
|
—
|
|
|
$
|
8,624
|
|
Financial commodity contracts
|
|
20,028
|
|
|
|
3,876
|
|
|
|
—
|
|
|
23,904
|
|
||||
Financial commodity contracts - foreign exchange
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
1
|
|
||||
Other (1)
|
|
1,706
|
|
|
|
—
|
|
|
|
—
|
|
|
1,706
|
|
||||
Total assets at fair value
|
|
$
|
21,734
|
|
|
|
$
|
12,501
|
|
|
|
$
|
—
|
|
|
$
|
34,235
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
40,426
|
|
|
|
$
|
—
|
|
|
$
|
40,426
|
|
Financial commodity contracts
|
|
35,732
|
|
|
|
—
|
|
|
|
—
|
|
|
35,732
|
|
||||
Financial commodity contracts - foreign exchange
|
|
—
|
|
|
|
286
|
|
|
|
—
|
|
|
286
|
|
||||
Total liabilities at fair value
|
|
$
|
35,732
|
|
|
|
$
|
40,712
|
|
|
|
$
|
—
|
|
|
$
|
76,444
|
|
As of September 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
11,682
|
|
|
|
$
|
—
|
|
|
$
|
11,682
|
|
Financial commodity contracts
|
|
18,868
|
|
|
|
7,025
|
|
|
|
—
|
|
|
25,893
|
|
||||
Interest rate contract
|
|
—
|
|
|
|
381
|
|
|
|
—
|
|
|
381
|
|
||||
Available for sale equity securities
|
|
32,917
|
|
|
|
—
|
|
|
|
—
|
|
|
32,917
|
|
||||
Other (1)
|
|
1,217
|
|
|
|
—
|
|
|
|
—
|
|
|
1,217
|
|
||||
Total assets at fair value
|
|
$
|
53,002
|
|
|
|
$
|
19,088
|
|
|
|
$
|
—
|
|
|
$
|
72,090
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Physical commodity contracts
|
|
$
|
—
|
|
|
|
$
|
29,666
|
|
|
|
$
|
—
|
|
|
$
|
29,666
|
|
Financial commodity contracts
|
|
39,724
|
|
|
|
—
|
|
|
|
—
|
|
|
39,724
|
|
||||
Financial commodity contracts - foreign exchange
|
|
—
|
|
|
|
244
|
|
|
|
—
|
|
|
244
|
|
||||
Total liabilities at fair value
|
|
$
|
39,724
|
|
|
|
$
|
29,910
|
|
|
|
$
|
—
|
|
|
$
|
69,634
|
|
(1)
|
Includes money market funds.
|
(Thousands)
|
2019
|
2018
|
||||
Steckman Ridge (1)
|
$
|
114,428
|
|
$
|
117,001
|
|
PennEast
|
85,840
|
|
73,865
|
|
||
Total
|
$
|
200,268
|
|
$
|
190,866
|
|
(Thousands, except per share amounts)
|
2019
|
2018
|
2017
|
||||||
Net income, as reported
|
$
|
169,505
|
|
$
|
233,436
|
|
$
|
132,065
|
|
Basic earnings per share
|
|
|
|
||||||
Weighted average shares of common stock outstanding-basic
|
89,242
|
|
87,689
|
|
86,321
|
|
|||
Basic earnings per common share
|
$1.90
|
$2.66
|
$1.53
|
||||||
Diluted earnings per share
|
|
|
|
||||||
Weighted average shares of common stock outstanding-basic
|
89,242
|
|
87,689
|
|
86,321
|
|
|||
Incremental shares (1)
|
374
|
|
626
|
|
823
|
|
|||
Weighted average shares of common stock outstanding-diluted
|
89,616
|
|
88,315
|
|
87,144
|
|
|||
Diluted earnings per common share (2)
|
$1.89
|
$2.64
|
$1.52
|
(1)
|
Incremental shares consist primarily of unvested stock awards and performance units.
|
(2)
|
There were no anti-dilutive shares excluded from the calculation of diluted earnings per share for fiscal 2019, 2018 and 2017.
|
(Thousands)
|
NJNG
|
NJR
|
||||
2020
|
$
|
—
|
|
$
|
—
|
|
2021
|
$
|
—
|
|
$
|
—
|
|
2022
|
$
|
—
|
|
$
|
50,000
|
|
2023
|
$
|
—
|
|
$
|
50,000
|
|
2024
|
$
|
70,000
|
|
$
|
100,000
|
|
Thereafter
|
$
|
822,845
|
|
$
|
350,000
|
|
(Thousands)
|
Lease Payments
|
|
||
2020
|
|
$
|
11,707
|
|
2021
|
|
6,603
|
|
|
2022
|
|
7,494
|
|
|
2023
|
|
3,995
|
|
|
2024
|
|
4,652
|
|
|
Thereafter
|
|
4,173
|
|
|
Subtotal
|
|
38,624
|
|
|
Less: Interest component
|
|
(3,243
|
)
|
|
Total
|
|
$
|
35,381
|
|
(Thousands)
|
Lease Payments
|
|
||
2020
|
|
$
|
7,830
|
|
2021
|
|
7,803
|
|
|
2022
|
|
7,802
|
|
|
2023
|
|
7,878
|
|
|
2024
|
|
7,359
|
|
|
Thereafter
|
|
30,945
|
|
|
Subtotal
|
|
69,617
|
|
|
Less: Interest component
|
|
(22,971
|
)
|
|
Total
|
|
$
|
46,646
|
|
(Thousands)
|
2019
|
|
2018
|
||||
NJR
|
|
|
|
||||
Bank revolving credit facilities: (1)
|
$
|
425,000
|
|
|
$
|
425,000
|
|
Notes outstanding at end of period
|
$
|
25,450
|
|
|
$
|
87,950
|
|
Weighted average interest rate at end of period
|
3.04
|
%
|
|
3.07
|
%
|
||
Amount available at end of period (2)
|
$
|
394,800
|
|
|
$
|
322,144
|
|
NJNG
|
|
|
|
||||
Bank revolving credit facilities: (3)
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Commercial paper outstanding at end of period
|
$
|
—
|
|
|
$
|
64,000
|
|
Weighted average interest rate at end of period
|
—
|
%
|
|
2.18
|
%
|
||
Amount available at end of period (4)
|
$
|
249,269
|
|
|
$
|
185,269
|
|
(1)
|
Committed credit facilities, which require commitment fees of .075 percent on the unused amounts.
|
(2)
|
Letters of credit outstanding total $4.8 million and $14.9 million as of September 30, 2019 and 2018, respectively, which reduces amount available by the same amount.
|
(3)
|
Committed credit facilities, which require commitment fees of .075 percent on the unused amounts.
|
(4)
|
Letters of credit outstanding total $731,000 as of September 30, 2019 and 2018, which reduces amount available by the same amount.
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Stock-based compensation expense:
|
|
|
|
||||||
Performance share awards
|
$
|
5,804
|
|
$
|
3,526
|
|
$
|
2,614
|
|
Restricted and non-restricted stock
|
2,492
|
|
2,191
|
|
1,732
|
|
|||
Deferred retention stock
|
1,500
|
|
7,128
|
|
1,461
|
|
|||
Compensation expense included in operation and maintenance expense
|
9,796
|
|
12,845
|
|
5,807
|
|
|||
Income tax benefit (1)
|
(2,848
|
)
|
(3,734
|
)
|
(2,372
|
)
|
|||
Total, net of tax
|
$
|
6,948
|
|
$
|
9,111
|
|
$
|
3,435
|
|
(1)
|
Excludes additional tax benefit related to delivered shares of $1.3 million, $3 million and $1.3 million as of September 30, 2019, 2018 and 2017, respectively.
|
|
Shares (1)
|
Weighted Average
Grant Date
Fair Value
|
Total Fair Value of Vested Shares (in Thousands)
|
|||||||
Non-vested and outstanding at September 30, 2016
|
179,916
|
|
|
$27.47
|
|
|
—
|
|
|
|
Granted
|
96,507
|
|
|
$33.57
|
|
|
—
|
|
|
|
Vested (2)
|
(95,407
|
)
|
|
$28.88
|
|
|
$
|
4,179
|
|
|
Cancelled/forfeited
|
(24,429
|
)
|
|
$29.14
|
|
|
—
|
|
|
|
Non-vested and outstanding at September 30, 2017
|
156,587
|
|
|
$30.12
|
|
|
—
|
|
|
|
Granted
|
91,177
|
|
|
$44.67
|
|
|
—
|
|
|
|
Vested (3)
|
(100,146
|
)
|
|
$29.49
|
|
|
$
|
4,714
|
|
|
Cancelled/forfeited
|
(2,442
|
)
|
|
$31.45
|
|
|
—
|
|
|
|
Non-vested and outstanding at September 30, 2018
|
145,176
|
|
|
$39.67
|
|
|
—
|
|
|
|
Granted
|
100,262
|
|
|
$47.98
|
|
|
—
|
|
|
|
Vested (4)
|
(103,009
|
)
|
|
$38.52
|
|
|
$
|
4,622
|
|
|
Cancelled/forfeited
|
(11,920
|
)
|
|
$44.34
|
|
|
—
|
|
|
|
Non-vested and outstanding at September 30, 2019
|
130,509
|
|
|
$46.53
|
|
|
—
|
|
|
(1)
|
The number of common shares issued related to certain performance shares may range from zero to 150 percent of the number of shares shown in the table above based on the Company’s achievement of performance goals.
|
(2)
|
As certified by the Company’s Leadership and Compensation Committee on November 14, 2017, the number of common shares related to performance shares earned was 108.44 percent, or 39,595 shares, the number of common shares earned related to NFE performance was 119 percent or 36,498 shares, and the number of common shares earned related to Performance Based Restricted Stock was 100 percent or 28,223 shares. Each award earned excludes accumulated dividends. The number represented on this line is the target number of 100 percent.
|
(3)
|
As certified by the Company’s Leadership and Compensation Committee on November 13, 2018, the number of common shares earned related to TSR performance was 99 percent or 38,660 shares, the number of common shares earned related to NFE performance was 121 percent or 39,694 shares, and the number of common shares earned related to Performance Based Restricted Stock was 100 percent or 36,998 shares. Each award earned excludes accumulated dividends. The number represented on this line is the target number of 100 percent.
|
(4)
|
As certified by the Company’s Leadership and Compensation Committee on November 12, 2019, the number of common shares earned related to TSR performance was 119 percent or 43,641 shares, the number of common shares earned related to NFE performance was 117 percent or 26,413 shares and the number of common shares earned related to Performance Based Restricted Stock was 100 percent or 24,468 shares. Each award earned excludes accumulated dividends. The number represented on this line is the target number of 100 percent.
|
|
Shares
|
Weighted Average
Grant Date
Fair Value
|
Total Fair Value of Vested Shares (in Thousands)
|
|||||||
Non-vested and outstanding at September 30, 2016
|
73,071
|
|
|
$29.09
|
|
|
—
|
|
|
|
Granted
|
28,734
|
|
|
$35.79
|
|
|
—
|
|
|
|
Vested
|
(38,752
|
)
|
|
$28.92
|
|
|
$
|
1,344
|
|
|
Cancelled/forfeited
|
(11,899
|
)
|
|
$31.56
|
|
|
—
|
|
|
|
Non-vested and outstanding at September 30, 2017
|
51,154
|
|
|
$32.40
|
|
|
—
|
|
|
|
Granted
|
27,949
|
|
|
$45.00
|
|
|
—
|
|
|
|
Vested
|
(33,815
|
)
|
|
$31.23
|
|
|
$
|
1,438
|
|
|
Cancelled/forfeited
|
(1,120
|
)
|
|
$33.54
|
|
|
—
|
|
|
|
Non-vested and outstanding at September 30, 2018
|
44,168
|
|
|
$41.24
|
|
|
—
|
|
|
|
Granted
|
35,284
|
|
|
$48.24
|
|
|
—
|
|
|
|
Vested
|
(20,748
|
)
|
|
$39.26
|
|
|
$
|
935
|
|
|
Cancelled/forfeited
|
(548
|
)
|
|
$42.96
|
|
|
—
|
|
|
|
Non-vested and outstanding at September 30, 2019
|
58,156
|
|
|
$46.18
|
|
|
—
|
|
|
|
Shares
|
Weighted Average
Grant Date
Fair Value
|
Total Fair Value of Vested Shares (in Thousands)
|
|||||||
Outstanding at September 30, 2016
|
662,479
|
|
|
$29.06
|
|
|
—
|
|
|
|
Granted/Vested
|
63,977
|
|
|
$35.64
|
|
|
—
|
|
|
|
Delivered
|
(53,878
|
)
|
|
$23.11
|
|
|
$
|
1,774
|
|
|
Outstanding at September 30, 2017
|
672,578
|
|
|
$29.54
|
|
|
—
|
|
|
|
Granted/Vested
|
24,167
|
|
|
$45.00
|
|
|
—
|
|
|
|
Delivered
|
(452,694
|
)
|
|
$29.42
|
|
|
$
|
19,581
|
|
|
Forfeited
|
(1,969
|
)
|
|
$35.56
|
|
|
|
|
||
Outstanding at September 30, 2018
|
242,082
|
|
|
$32.99
|
|
|
—
|
|
|
|
Granted/Vested
|
167,407
|
|
|
$47.95
|
|
|
—
|
|
|
|
Delivered
|
(158,733
|
)
|
|
$30.32
|
|
|
$
|
7,145
|
|
|
Forfeited
|
(7,195
|
)
|
|
$44.41
|
|
|
—
|
|
|
|
Outstanding at September 30, 2019
|
243,561
|
|
|
$44.67
|
|
|
—
|
|
|
|
2019
|
2018
|
2017
|
|
Shares granted
|
26,165
|
(1)
|
26,524
|
27,972
|
Weighted average grant date fair value
|
$44.80
|
|
$39.85
|
$35.59
|
(1)
|
$311,000 of expense remains as of September 30, 2019, to be recognized through December 31, 2019.
|
|
Pension (1)
|
OPEB
|
||||||||||
(Thousands)
|
2019
|
2018
|
2019
|
2018
|
||||||||
Change in Benefit Obligation
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
298,575
|
|
$
|
297,835
|
|
$
|
196,785
|
|
$
|
175,090
|
|
Service cost
|
7,381
|
|
8,139
|
|
4,404
|
|
4,607
|
|
||||
Interest cost
|
12,173
|
|
10,493
|
|
8,324
|
|
6,365
|
|
||||
Plan participants’ contributions (2)
|
43
|
|
45
|
|
210
|
|
161
|
|
||||
Special termination benefits (3)
|
—
|
|
3,730
|
|
—
|
|
490
|
|
||||
Actuarial loss (gain)
|
52,549
|
|
(12,846
|
)
|
54,700
|
|
15,145
|
|
||||
Benefits paid, net of retiree subsidies received
|
(10,244
|
)
|
(8,821
|
)
|
(4,420
|
)
|
(5,073
|
)
|
||||
Benefit obligation at end of year
|
$
|
360,477
|
|
$
|
298,575
|
|
$
|
260,003
|
|
$
|
196,785
|
|
Change in plan assets
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
279,410
|
|
$
|
271,743
|
|
$
|
77,980
|
|
$
|
71,534
|
|
Actual return on plan assets
|
19,194
|
|
16,306
|
|
2,499
|
|
5,284
|
|
||||
Employer contributions
|
231
|
|
137
|
|
7,926
|
|
6,222
|
|
||||
Benefits paid, net of plan participants’ contributions (2)
|
(10,201
|
)
|
(8,776
|
)
|
(4,479
|
)
|
(5,060
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
288,634
|
|
$
|
279,410
|
|
$
|
83,926
|
|
$
|
77,980
|
|
Funded status
|
$
|
(71,843
|
)
|
$
|
(19,165
|
)
|
$
|
(176,077
|
)
|
$
|
(118,805
|
)
|
Amounts recognized on Consolidated Balance Sheets
|
|
|
|
|
||||||||
Postemployment employee (liability)
|
|
|
|
|
||||||||
Current
|
$
|
(603
|
)
|
$
|
(294
|
)
|
$
|
(800
|
)
|
$
|
(669
|
)
|
Noncurrent
|
(71,240
|
)
|
(18,871
|
)
|
(175,277
|
)
|
(118,136
|
)
|
||||
Total
|
$
|
(71,843
|
)
|
$
|
(19,165
|
)
|
$
|
(176,077
|
)
|
$
|
(118,805
|
)
|
(1)
|
Includes the Company’s PEP.
|
(2)
|
Prior to July 1, 1998, employees were eligible to elect an additional participant contribution to enhance their benefits and contributions made during the periods were insignificant.
|
(3)
|
Related to the voluntary early retirement program offered during fiscal 2018, as previously discussed.
|
|
Regulatory Assets
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||||
|
Pension
|
OPEB
|
|
Pension
|
OPEB
|
||||||||
Balance at September 30, 2017
|
$
|
78,605
|
|
$
|
60,460
|
|
|
$
|
19,415
|
|
$
|
4,967
|
|
Amounts arising during the period:
|
|
|
|
|
|
||||||||
Net actuarial (gain) loss
|
(6,090
|
)
|
12,378
|
|
|
(3,422
|
)
|
2,834
|
|
||||
Amounts amortized to net periodic costs:
|
|
|
|
|
|
||||||||
Net actuarial (loss)
|
(6,177
|
)
|
(4,464
|
)
|
|
(1,359
|
)
|
(196
|
)
|
||||
Prior service (cost) credit
|
(105
|
)
|
311
|
|
|
(1
|
)
|
54
|
|
||||
Balance at September 30, 2018
|
$
|
66,233
|
|
$
|
68,685
|
|
|
$
|
14,633
|
|
$
|
7,659
|
|
Amounts arising during the period:
|
|
|
|
|
|
||||||||
Net actuarial loss
|
38,137
|
|
48,452
|
|
|
14,271
|
|
9,264
|
|
||||
Amounts amortized to net periodic costs:
|
|
|
|
|
|
||||||||
Net actuarial (loss)
|
(4,662
|
)
|
(5,820
|
)
|
|
(1,103
|
)
|
(648
|
)
|
||||
Prior service (cost) credit
|
(102
|
)
|
312
|
|
|
—
|
|
53
|
|
||||
Balance at September 30, 2019
|
$
|
99,606
|
|
$
|
111,629
|
|
|
$
|
27,801
|
|
$
|
16,328
|
|
|
Regulatory Assets
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||||||||||||||||
|
Pension
|
OPEB
|
Pension
|
OPEB
|
||||||||||||||||||||
(Thousands)
|
2019
|
2018
|
2019
|
2018
|
2019
|
2018
|
2019
|
2018
|
||||||||||||||||
Net actuarial loss
|
$
|
99,139
|
|
$
|
65,664
|
|
$
|
112,109
|
|
$
|
69,477
|
|
$
|
27,801
|
|
$
|
14,633
|
|
$
|
16,367
|
|
$
|
7,750
|
|
Prior service cost (credit)
|
467
|
|
569
|
|
(480
|
)
|
(792
|
)
|
—
|
|
—
|
|
(39
|
)
|
(91
|
)
|
||||||||
Total
|
$
|
99,606
|
|
$
|
66,233
|
|
$
|
111,629
|
|
$
|
68,685
|
|
$
|
27,801
|
|
$
|
14,633
|
|
$
|
16,328
|
|
$
|
7,659
|
|
|
Regulatory Assets
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||||
(Thousands)
|
Pension
|
OPEB
|
|
Pension
|
OPEB
|
||||||||
Net actuarial loss
|
$
|
8,470
|
|
$
|
10,055
|
|
|
$
|
2,514
|
|
$
|
1,407
|
|
Prior service cost (credit)
|
102
|
|
(182
|
)
|
|
—
|
|
(15
|
)
|
||||
Total
|
$
|
8,572
|
|
$
|
9,873
|
|
|
$
|
2,514
|
|
$
|
1,392
|
|
|
Pension
|
|||||
(Thousands)
|
2019
|
2018
|
||||
Projected benefit obligation
|
$
|
360,477
|
|
$
|
298,575
|
|
Accumulated benefit obligation
|
$
|
319,527
|
|
$
|
263,279
|
|
Fair value of plan assets
|
$
|
288,634
|
|
$
|
279,410
|
|
|
Pension
|
OPEB
|
||||||||||||||||
(Thousands)
|
2019
|
2018
|
2017
|
2019
|
2018
|
2017
|
||||||||||||
Service cost
|
$
|
7,381
|
|
$
|
8,139
|
|
$
|
8,347
|
|
$
|
4,404
|
|
$
|
4,607
|
|
$
|
4,380
|
|
Interest cost
|
12,173
|
|
10,493
|
|
9,771
|
|
8,324
|
|
6,365
|
|
5,545
|
|
||||||
Expected return on plan assets
|
(19,054
|
)
|
(19,639
|
)
|
(19,313
|
)
|
(5,515
|
)
|
(5,352
|
)
|
(4,767
|
)
|
||||||
Recognized actuarial loss
|
5,765
|
|
7,537
|
|
8,827
|
|
6,466
|
|
4,660
|
|
4,370
|
|
||||||
Prior service cost (credit) amortization
|
102
|
|
106
|
|
111
|
|
(365
|
)
|
(365
|
)
|
(365
|
)
|
||||||
Net periodic benefit cost
|
$
|
6,367
|
|
$
|
6,636
|
|
$
|
7,743
|
|
$
|
13,314
|
|
$
|
9,915
|
|
$
|
9,163
|
|
Special termination benefit
|
—
|
|
3,730
|
|
—
|
|
—
|
|
490
|
|
—
|
|
||||||
Net periodic benefit cost recognized as expense
|
$
|
6,367
|
|
$
|
10,366
|
|
$
|
7,743
|
|
$
|
13,314
|
|
$
|
10,405
|
|
$
|
9,163
|
|
|
Pension
|
|
OPEB
|
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Benefit costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
4.36/4.35%
|
(1)
|
4.04/4.03%
|
|
(1)
|
3.96/3.94%
|
|
(1)
|
4.38/4.37%
|
|
(1)
|
4.12/4.08%
|
|
(1)
|
4.08/4.01%
|
|
(1)
|
|
Expected asset return
|
7.00
|
%
|
|
7.50
|
%
|
|
7.75
|
%
|
|
7.00
|
%
|
|
7.50
|
%
|
|
7.75
|
%
|
|
Compensation increase
|
3.25/3.50%
|
|
(1)
|
3.25/3.50%
|
|
(1)
|
3.25/3.50%
|
|
(1)
|
3.25/3.50
|
|
(1)
|
3.25/3.50%
|
|
(1)
|
3.25/3.50%
|
|
(1)
|
Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
3.37/3.35%
|
|
(1)
|
4.36/4.35%
|
|
(1)
|
4.03
|
%
|
|
3.48/3.44%
|
|
(1)
|
4.38/4.37%
|
|
(1)
|
4.12/4.08%
|
|
(1)
|
Compensation increase
|
3.00/3.50%
|
|
(1)
|
3.25/3.50%
|
|
(1)
|
3.25/3.50%
|
|
(1)
|
3.00/3.50%
|
|
(1)
|
3.25/3.50%
|
|
(1)
|
3.25/3.50%
|
|
(1)
|
(1)
|
Percentages for represented and nonrepresented plans, respectively.
|
($ in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
HCCTR
|
7.6%
|
|
7.9%
|
|
8.3%
|
||||||
Ultimate HCCTR
|
4.5%
|
|
4.5%
|
|
4.5%
|
||||||
Year ultimate HCCTR reached
|
2026
|
|
2024
|
|
2025
|
||||||
Effect of a 1 percentage point increase in the HCCTR on:
|
|
|
|
|
|
||||||
Year-end benefit obligation
|
$
|
49,061
|
|
|
$
|
36,260
|
|
|
$
|
32,019
|
|
Total service and interest cost
|
$
|
2,923
|
|
|
$
|
2,482
|
|
|
$
|
2,468
|
|
Effect of a 1 percentage point decrease in the HCCTR on:
|
|
|
|
|
|
||||||
Year-end benefit obligation
|
$
|
(38,747
|
)
|
|
$
|
(28,743
|
)
|
|
$
|
(25,466
|
)
|
Total service and interest costs
|
$
|
(2,250
|
)
|
|
$
|
(1,937
|
)
|
|
$
|
(1,909
|
)
|
|
2020
|
Assets at
|
|||||||
|
Target
|
September 30,
|
|||||||
Asset Allocation
|
Allocation
|
2019
|
|
|
2018
|
|
|
||
U.S. equity securities
|
34
|
%
|
|
37
|
%
|
|
41
|
%
|
|
International equity securities
|
17
|
|
|
17
|
|
|
19
|
|
|
Fixed income
|
38
|
|
|
42
|
|
|
37
|
|
|
Other assets
|
11
|
|
|
4
|
|
|
3
|
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
(Thousands)
|
Pension
|
OPEB
|
||||
2020
|
$
|
12,234
|
|
$
|
6,267
|
|
2021
|
$
|
12,758
|
|
$
|
6,804
|
|
2022
|
$
|
13,585
|
|
$
|
7,589
|
|
2023
|
$
|
14,405
|
|
$
|
8,249
|
|
2024
|
$
|
15,210
|
|
$
|
8,910
|
|
2025 - 2029
|
$
|
90,726
|
|
$
|
55,025
|
|
|
Estimated Subsidy
|
|||
(Thousands)
|
Payment
|
|||
2020
|
|
$
|
261
|
|
2021
|
|
$
|
286
|
|
2022
|
|
$
|
314
|
|
2023
|
|
$
|
350
|
|
2024
|
|
$
|
387
|
|
2025 - 2029
|
|
$
|
2,605
|
|
(Thousands)
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Total
|
||||||||||
As of September 30, 2019:
|
Pension
|
|
OPEB
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
21
|
|
Registered Investment Companies:
|
|
|
|
|
|
|
|
||||||||
Equity Funds:
|
|
|
|
|
|
|
|
||||||||
Large Cap Index
|
89,374
|
|
|
89,374
|
|
|
25,474
|
|
|
25,474
|
|
||||
Extended Market Index
|
16,548
|
|
|
16,548
|
|
|
5,036
|
|
|
5,036
|
|
||||
International Stock
|
49,929
|
|
|
49,929
|
|
|
14,564
|
|
|
14,564
|
|
||||
Fixed Income Funds:
|
|
|
|
|
|
|
|
||||||||
Emerging Markets
|
15,794
|
|
|
15,794
|
|
|
4,764
|
|
|
4,764
|
|
||||
Core Fixed Income
|
—
|
|
|
—
|
|
|
10,570
|
|
|
10,570
|
|
||||
Opportunistic Income
|
—
|
|
|
—
|
|
|
6,365
|
|
|
6,365
|
|
||||
Ultra Short Duration
|
—
|
|
|
—
|
|
|
6,340
|
|
|
6,340
|
|
||||
High Yield Bond Fund
|
24,328
|
|
|
24,328
|
|
|
7,350
|
|
|
7,350
|
|
||||
Long Duration Fund
|
80,041
|
|
|
80,041
|
|
|
—
|
|
|
—
|
|
||||
Total assets at in the fair value hierarchy
|
$
|
276,014
|
|
|
276,014
|
|
|
$
|
80,484
|
|
|
80,484
|
|
||
Investments measured at net asset value
|
|
|
|
|
|
|
|
|
|
||||||
Common collective trusts
|
|
|
12,620
|
|
|
|
|
3,442
|
|
||||||
Total assets at fair value
|
|
|
|
$
|
288,634
|
|
|
|
|
|
$
|
83,926
|
|
(Thousands)
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Total
|
||||||||
As of September 30, 2018:
|
Pension
|
|
OPEB
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
8,207
|
|
|
$
|
8,207
|
|
|
$
|
2,273
|
|
|
$
|
2,273
|
|
Registered Investment Companies:
|
|
|
|
|
|
|
|
||||||||
Equity Funds:
|
|
|
|
|
|
|
|
||||||||
Large Cap Index
|
97,016
|
|
|
97,016
|
|
|
27,340
|
|
|
27,340
|
|
||||
Extended Market Index
|
17,741
|
|
|
17,741
|
|
|
5,014
|
|
|
5,014
|
|
||||
International Stock
|
53,516
|
|
|
53,516
|
|
|
14,874
|
|
|
14,874
|
|
||||
Fixed Income Funds:
|
|
|
|
|
|
|
|
||||||||
Emerging Markets
|
11,754
|
|
|
11,754
|
|
|
3,264
|
|
|
3,264
|
|
||||
Core Fixed Income
|
—
|
|
|
—
|
|
|
7,970
|
|
|
7,970
|
|
||||
Opportunistic Income
|
—
|
|
|
—
|
|
|
4,798
|
|
|
4,798
|
|
||||
Ultra Short Duration
|
—
|
|
|
—
|
|
|
4,830
|
|
|
4,830
|
|
||||
High Yield Bond Fund
|
25,720
|
|
|
25,720
|
|
|
7,236
|
|
|
7,236
|
|
||||
Long Duration Fund
|
64,039
|
|
|
64,039
|
|
|
—
|
|
|
—
|
|
||||
Total assets at in the fair value hierarchy
|
$
|
277,993
|
|
|
277,993
|
|
|
$
|
77,599
|
|
|
77,599
|
|
||
Investments measured at net asset value
|
|
|
|
|
|
|
|
||||||||
Common collective trusts
|
|
|
1,417
|
|
|
|
|
381
|
|
||||||
Total assets at fair value
|
|
|
$
|
279,410
|
|
|
|
|
$
|
77,980
|
|
(Thousands)
|
2019
|
|
2018
|
||||||||||
|
NJNG
|
NJRCEV
|
|
NJNG
|
NJRCEV
|
||||||||
Balance at October 1
|
$
|
25,640
|
|
$
|
3,048
|
|
|
$
|
24,825
|
|
$
|
6,595
|
|
Accretion
|
1,427
|
|
150
|
|
|
1,366
|
|
198
|
|
||||
Additions
|
135
|
|
904
|
|
|
1,880
|
|
517
|
|
||||
Revisions in estimated cash flows
|
—
|
|
—
|
|
|
(2,133
|
)
|
—
|
|
||||
Retirements
|
(258
|
)
|
—
|
|
|
(298
|
)
|
—
|
|
||||
Reclassification to held for sale or sold
|
—
|
|
—
|
|
|
—
|
|
(4,262
|
)
|
||||
Balance at period end
|
$
|
26,944
|
|
$
|
4,102
|
|
|
$
|
25,640
|
|
$
|
3,048
|
|
|
Estimated
|
||
(Thousands)
|
Accretion
|
||
2020
|
$
|
1,669
|
|
2021
|
1,745
|
|
|
2022
|
1,823
|
|
|
2023
|
1,908
|
|
|
2024
|
1,994
|
|
|
Total
|
$
|
9,139
|
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Current:
|
|
|
|
||||||
Federal
|
$
|
10,933
|
|
$
|
(2,848
|
)
|
$
|
(16,023
|
)
|
State
|
3,530
|
|
4,563
|
|
2,470
|
|
|||
Deferred:
|
|
|
|
||||||
Federal
|
7,988
|
|
(40,785
|
)
|
54,965
|
|
|||
State
|
5,833
|
|
6,731
|
|
11,457
|
|
|||
Investment/production tax credits, net
|
(66,035
|
)
|
(21,446
|
)
|
(34,526
|
)
|
|||
Income tax (benefit) provision
|
$
|
(37,751
|
)
|
$
|
(53,785
|
)
|
$
|
18,343
|
|
(Thousands)
|
2019
|
|
2018
|
||||
Deferred tax assets
|
|
|
|
||||
Investment tax credits (1)
|
$
|
156,153
|
|
|
$
|
123,258
|
|
Federal net operating losses (2)
|
24,173
|
|
|
24,500
|
|
||
State net operating losses
|
25,302
|
|
|
34,754
|
|
||
Fair value of derivatives
|
9,673
|
|
|
8,411
|
|
||
Postemployment benefits
|
9,192
|
|
|
—
|
|
||
Incentive compensation
|
7,231
|
|
|
4,646
|
|
||
Amortization of intangibles
|
4,991
|
|
|
3,737
|
|
||
Conservation incentive plan
|
—
|
|
|
1,955
|
|
||
Other
|
3,105
|
|
|
8,213
|
|
||
Total deferred tax assets
|
$
|
239,820
|
|
|
$
|
209,474
|
|
Deferred tax liabilities
|
|
|
|
||||
Property related items
|
$
|
(379,673
|
)
|
|
$
|
(392,886
|
)
|
Remediation costs
|
(10,720
|
)
|
|
(9,229
|
)
|
||
Equity investments
|
(21,730
|
)
|
|
(31,956
|
)
|
||
Underrecovered gas costs
|
(2,657
|
)
|
|
(1,156
|
)
|
||
Conservation incentive plan
|
(942
|
)
|
|
—
|
|
||
Postemployment benefits
|
—
|
|
|
(353
|
)
|
||
Other
|
(4,776
|
)
|
|
(7,826
|
)
|
||
Total deferred tax liabilities
|
$
|
(420,498
|
)
|
|
$
|
(443,406
|
)
|
|
|
|
|
||||
Total net deferred tax liabilities
|
$
|
(180,678
|
)
|
|
$
|
(233,932
|
)
|
(1)
|
Includes $2 million and $2.2 million for NJNG for fiscal 2019 and 2018, respectively, which is being amortized over the life of the related assets, and $154.2 million and $121.1 million for Clean Energy Ventures for fiscal 2019 and 2018, respectively, which is ITC carryforward.
|
(2)
|
See discussion of federal net operating loss utilization in the Other Tax Items section of this note.
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Statutory income tax expense
|
$
|
27,668
|
|
$
|
44,014
|
|
$
|
52,643
|
|
Change resulting from:
|
|
|
|
||||||
Investment/production tax credits
|
(66,035
|
)
|
(21,446
|
)
|
(34,526
|
)
|
|||
Cost of removal of assets placed in service prior to 1981
|
(6,349
|
)
|
(5,829
|
)
|
(6,886
|
)
|
|||
AFUDC equity
|
(2,313
|
)
|
(2,117
|
)
|
(2,624
|
)
|
|||
State income taxes, net of federal benefit
|
7,707
|
|
7,092
|
|
8,222
|
|
|||
Basis adjustment of solar assets due to ITC
|
6,500
|
|
1,080
|
|
4,256
|
|
|||
Tax Act - utility excess deferred income taxes amortized (1)
|
(3,573
|
)
|
(1,786
|
)
|
—
|
|
|||
Tax Act - nonutility excess deferred income taxes (1)
|
—
|
|
(59,627
|
)
|
—
|
|
|||
Tax Act - utility excess deferred income taxes refunded to customers (1)
|
—
|
|
(14,323
|
)
|
—
|
|
|||
Other
|
(1,356
|
)
|
(843
|
)
|
(2,742
|
)
|
|||
Income tax (benefit) provision
|
$
|
(37,751
|
)
|
$
|
(53,785
|
)
|
$
|
18,343
|
|
Effective income tax rate (2) (3)
|
(28.7
|
)%
|
(29.9
|
)%
|
12.2
|
%
|
(1)
|
For a more detailed description, see The Tax Act section of this note.
|
(2)
|
The U.S. federal statutory rate was 21 percent, 24.5 percent and 35 percent for fiscal 2019, 2018 and 2017, respectively.
|
(3)
|
The effective tax rate without the impact of the Tax Act would have been 12.4 percent for fiscal 2018.
|
(Thousands)
|
2019
|
||
Balance at October 1,
|
$
|
—
|
|
Additions based on tax positions related to the current fiscal period
|
4,930
|
|
|
Balance at period end
|
$
|
4,930
|
|
(Thousands)
|
2020
|
2021
|
2022
|
2023
|
2024
|
Thereafter
|
||||||||||||
Energy Services:
|
|
|
|
|
|
|
||||||||||||
Natural gas purchases
|
$
|
266,931
|
|
$
|
18,809
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Storage demand fees
|
26,043
|
|
15,247
|
|
11,378
|
|
6,804
|
|
1,650
|
|
935
|
|
||||||
Pipeline demand fees
|
78,194
|
|
65,875
|
|
52,492
|
|
28,933
|
|
12,963
|
|
8,853
|
|
||||||
Sub-total Energy Services
|
$
|
371,168
|
|
$
|
99,931
|
|
$
|
63,870
|
|
$
|
35,737
|
|
$
|
14,613
|
|
$
|
9,788
|
|
NJNG:
|
|
|
|
|
|
|
||||||||||||
Natural gas purchases
|
$
|
20,616
|
|
$
|
30,884
|
|
$
|
31,775
|
|
$
|
33,060
|
|
$
|
34,652
|
|
$
|
35,748
|
|
Storage demand fees
|
33,938
|
|
24,443
|
|
16,101
|
|
9,442
|
|
2,876
|
|
5,559
|
|
||||||
Pipeline demand fees
|
95,318
|
|
107,811
|
|
93,925
|
|
88,145
|
|
64,561
|
|
552,407
|
|
||||||
Sub-total NJNG
|
$
|
149,872
|
|
$
|
163,138
|
|
$
|
141,801
|
|
$
|
130,647
|
|
$
|
102,089
|
|
$
|
593,714
|
|
Total
|
$
|
521,040
|
|
$
|
263,069
|
|
$
|
205,671
|
|
$
|
166,384
|
|
$
|
116,702
|
|
$
|
603,502
|
|
(1)
|
Includes sales to Canada for the Energy Services segment, which are immaterial.
|
(2)
|
The amortization of acquired wholesale energy contracts is excluded above and is included in gas purchases - nonutility on the Consolidated Statements of Operations.
|
(3)
|
Included in other income, net on the Consolidated Statements of Operations.
|
(Thousands)
|
|
|
|
||||||
Fiscal Years Ended September 30,
|
2019
|
2018
|
2017
|
||||||
Interest expense, net of capitalized interest
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
26,134
|
|
$
|
25,299
|
|
$
|
25,818
|
|
Clean Energy Ventures
|
14,846
|
|
18,320
|
|
16,263
|
|
|||
Energy Services
|
5,205
|
|
3,945
|
|
2,747
|
|
|||
Midstream
|
2,185
|
|
1,667
|
|
960
|
|
|||
Subtotal
|
48,370
|
|
49,231
|
|
45,788
|
|
|||
Home Services and Other
|
1,535
|
|
7
|
|
410
|
|
|||
Eliminations
|
(2,823
|
)
|
(2,952
|
)
|
(1,312
|
)
|
|||
Total
|
$
|
47,082
|
|
$
|
46,286
|
|
$
|
44,886
|
|
Income tax provision (benefit)
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
9,434
|
|
$
|
(1,910
|
)
|
$
|
43,485
|
|
Clean Energy Ventures
|
(48,921
|
)
|
(79,932
|
)
|
(31,161
|
)
|
|||
Energy Services
|
(1,573
|
)
|
24,996
|
|
(4,015
|
)
|
|||
Midstream
|
2,254
|
|
(8,548
|
)
|
5,820
|
|
|||
Subtotal
|
(38,806
|
)
|
(65,394
|
)
|
14,129
|
|
|||
Home Services and Other
|
1,428
|
|
11,944
|
|
3,857
|
|
|||
Eliminations
|
(373
|
)
|
(335
|
)
|
357
|
|
|||
Total
|
$
|
(37,751
|
)
|
$
|
(53,785
|
)
|
$
|
18,343
|
|
Equity in earnings of affiliates
|
|
|
|
||||||
Midstream
|
$
|
15,832
|
|
$
|
16,165
|
|
$
|
17,797
|
|
Eliminations
|
(2,204
|
)
|
(3,157
|
)
|
(3,984
|
)
|
|||
Total
|
$
|
13,628
|
|
$
|
13,008
|
|
$
|
13,813
|
|
Net financial earnings (loss)
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
78,062
|
|
$
|
84,048
|
|
$
|
86,930
|
|
Clean Energy Ventures
|
77,473
|
|
75,849
|
|
24,873
|
|
|||
Energy Services
|
2,918
|
|
60,378
|
|
18,554
|
|
|||
Midstream
|
14,689
|
|
24,367
|
|
12,857
|
|
|||
Subtotal
|
173,142
|
|
244,642
|
|
143,214
|
|
|||
Home Services and Other
|
1,911
|
|
(3,829
|
)
|
6,811
|
|
|||
Eliminations
|
(93
|
)
|
(327
|
)
|
(633
|
)
|
|||
Total
|
$
|
174,960
|
|
$
|
240,486
|
|
$
|
149,392
|
|
Capital expenditures
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
340,226
|
|
$
|
254,523
|
|
$
|
176,249
|
|
Clean Energy Ventures
|
157,828
|
|
123,421
|
|
149,400
|
|
|||
Midstream
|
20,616
|
|
5,431
|
|
—
|
|
|||
Subtotal
|
518,670
|
|
383,375
|
|
325,649
|
|
|||
Home Services and Other
|
2,484
|
|
1,213
|
|
2,434
|
|
|||
Total
|
$
|
521,154
|
|
$
|
384,588
|
|
$
|
328,083
|
|
Investments in equity investees
|
|
|
|
||||||
Midstream
|
$
|
4,102
|
|
$
|
16,151
|
|
$
|
27,070
|
|
Total
|
$
|
4,102
|
|
$
|
16,151
|
|
$
|
27,070
|
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Consolidated net financial earnings
|
$
|
174,960
|
|
$
|
240,486
|
|
$
|
149,392
|
|
Less:
|
|
|
|
||||||
Unrealized loss (gain) on derivative instruments and related transactions
|
2,881
|
|
26,770
|
|
(11,241
|
)
|
|||
Tax effect
|
(711
|
)
|
(4,512
|
)
|
4,062
|
|
|||
Effects of economic hedging related to natural gas inventory
|
4,309
|
|
(22,570
|
)
|
38,470
|
|
|||
Tax effect
|
(1,024
|
)
|
7,362
|
|
(13,964
|
)
|
|||
Consolidated net income
|
$
|
169,505
|
|
$
|
233,436
|
|
$
|
132,065
|
|
•
|
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)
|
2019
|
2018
|
2017
|
||||||
Assets at end of period:
|
|
|
|
||||||
Natural Gas Distribution
|
$
|
3,064,309
|
|
$
|
2,663,054
|
|
$
|
2,519,578
|
|
Clean Energy Ventures (1)
|
864,323
|
|
865,018
|
|
771,340
|
|
|||
Energy Services
|
290,847
|
|
396,852
|
|
398,277
|
|
|||
Midstream
|
240,955
|
|
242,069
|
|
232,806
|
|
|||
Subtotal
|
4,460,434
|
|
4,166,993
|
|
3,922,001
|
|
|||
Home Services and Other
|
104,411
|
|
114,732
|
|
114,801
|
|
|||
Intercompany assets (2)
|
(191,860
|
)
|
(138,061
|
)
|
(108,295
|
)
|
|||
Total
|
$
|
4,372,985
|
|
$
|
4,143,664
|
|
$
|
3,928,507
|
|
(1)
|
Includes assets held for sale of $206.9 million for September 30, 2018.
|
(2)
|
Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.
|
(Thousands)
|
2019
|
2018
|
2017
|
||||||
Natural Gas Distribution
|
$
|
5,814
|
|
$
|
5,730
|
|
$
|
5,590
|
|
Energy Services
|
2,134
|
|
2,775
|
|
2,750
|
|
|||
Total
|
$
|
7,948
|
|
$
|
8,505
|
|
$
|
8,340
|
|
(Thousands)
|
2019
|
2018
|
||||
Natural Gas Distribution
|
$
|
775
|
|
$
|
775
|
|
Energy Services
|
15
|
|
375
|
|
||
Total
|
$
|
790
|
|
$
|
1,150
|
|
|
First
|
Second
|
Third
|
Fourth
|
||||||||
(Thousands, except per share data)
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
||||||||
2019
|
|
|
|
|
||||||||
Operating revenues
|
$
|
811,767
|
|
$
|
866,255
|
|
$
|
434,942
|
|
$
|
479,081
|
|
Operating income (loss)
|
$
|
88,743
|
|
$
|
77,001
|
|
$
|
(4,019
|
)
|
$
|
(7,790
|
)
|
Net income (loss)
|
$
|
86,248
|
|
$
|
73,573
|
|
$
|
(8,402
|
)
|
$
|
18,086
|
|
Earnings (loss) per share (1)
|
|
|
|
|
||||||||
Basic
|
$0.97
|
$0.83
|
$(0.09)
|
$0.20
|
||||||||
Diluted
|
$0.97
|
$0.82
|
$(0.09)
|
$0.20
|
||||||||
2018
|
|
|
|
|
||||||||
Operating revenues
|
$
|
705,305
|
|
$
|
1,019,043
|
|
$
|
543,435
|
|
$
|
647,326
|
|
Operating income (loss) (2)
|
$
|
76,196
|
|
$
|
178,744
|
|
$
|
(36,715
|
)
|
$
|
(18,343
|
)
|
Net income (loss)
|
$
|
123,699
|
|
$
|
140,266
|
|
$
|
(14,274
|
)
|
$
|
(16,255
|
)
|
Earnings (loss) per share (1)
|
|
|
|
|
||||||||
Basic
|
$1.42
|
$1.60
|
$(0.16)
|
$(0.18)
|
||||||||
Diluted
|
$1.42
|
$1.59
|
$(0.16)
|
$(0.18)
|
(1)
|
The sum of quarterly amounts may not equal the annual amounts due to rounding.
|
(2)
|
Quarterly amounts have been reclassified to conform to the current period presentation due to the adoption of ASU No. 2017-07, an amendment to ASC 715, Compensation - Retirement Benefits. See Note 2. Summary of Significant Accounting Policies.
|
(a) 1. Financial Statements.
|
||
|
|
|
All Financial Statements of the Registrant are filed as part of this report and included in Item 8 of Part II of this Form 10-K.
|
||
|
|
|
|
|
|
134.
|
|
|
|
Page
|
|
Schedule II - Valuation and qualifying accounts and reserves for each of the three years in the period ended September 30, 2019
|
(Thousands)
|
|
ADDITIONS
|
|
|
||||||
CLASSIFICATION
|
BEGINNING
BALANCE
|
CHARGED TO
EXPENSE
|
OTHER (1)
|
ENDING BALANCE
|
||||||
2019
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
5,704
|
|
2,387
|
|
(1,943
|
)
|
$
|
6,148
|
|
2018
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
5,181
|
|
2,579
|
|
(2,056
|
)
|
$
|
5,704
|
|
2017
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
4,865
|
|
2,023
|
|
(1,707
|
)
|
$
|
5,181
|
|
(1)
|
Uncollectible accounts written off, less recoveries and adjustments.
|
Exhibit
Number
|
Exhibit Description
|
|
|
2.1
|
Purchase and Sale Agreement, dated as of October 27, 2017, by and between Talen Generation, LLC, and Adelphia Gateway, LLC (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, as filed on November 2, 2017)
|
|
|
2.2
|
Membership Interest Purchase Agreement, between NJR Clean Energy Ventures II Corporation and SRIV Partnership, LLC, dated as of November 21, 2018 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, as filed on November 21, 2018)
|
|
|
2.3
|
Membership Interest Purchase Agreement, dated September 3, 2019, by and between Leaf River Energy Holdings, LLC and NJR Pipeline Company (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, as filed on September 5, 2019)
|
|
|
3.1
|
Restated Certificate of Incorporation of New Jersey Resources Corporation, as amended through March 3, 2015 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, as filed on January 23, 2014, and Exhibit 3.1 to the Current Report on Form 8-K, as filed on March 3, 2015)
|
|
|
3.2
|
Bylaws of New Jersey Resources Corporation, as amended through July 9, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, as filed on July 12, 2019)
|
|
|
4.1+
|
|
|
|
4.2
|
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K for the year ended September 30, 2013, as filed on November 25, 2013)
|
|
|
4.3
|
Amended and Restated Indenture of Mortgage, Deed of Trust and Security Agreement, dated as of September 1, 2014, between NJNG and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K, as filed on September 30, 2014)
|
|
|
4.3(a)
|
36th Supplemental Indenture dated as of September 1, 2014, between NJNG and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K, as filed on September 30, 2014)
|
|
|
4.3(b)
|
First Supplemental Indenture dated as of April 1, 2015 between NJNG and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q, as filed on May 7, 2015)
|
|
|
4.3(c)
|
Second Supplemental Indenture dated as of June 1, 2016, between New Jersey Natural Gas Company and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 to Form 8-K as filed on June 22, 2016)
|
|
|
4.3(d)
|
Third Supplemental Indenture, dated as of May 1, 2018, by and between New Jersey Natural Gas Company and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, as filed on May 11, 2018)
|
|
|
4.3(e)
|
Fourth Supplemental Indenture, dated as of April 1, 2019, between NJNG and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.4 to the Quarterly Report on Form 10-Q, as filed on May 3, 2019)
|
|
|
4.3(f)
|
Fifth Supplemental Indenture, dated as of July 1, 2019, by and between New Jersey Natural Gas Company and the Purchasers party thereto (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K, as filed on July 17, 2019)
|
|
|
4.3(g)+
|
|
|
|
4.4
|
$75,000,000 Shelf Note Purchase Agreement, dated as of June 30, 2011, between New Jersey Resources Corporation and Prudential Investment Management, Inc. (“Prudential Facility”) (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K as filed on July 6, 2011)
|
|
|
4.4(a)
|
First Amendment to the Prudential Facility, dated as of July 25, 2014, between the Company and Prudential Investment Management, Inc. (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K as filed on November 12, 2014)
|
|
|
Exhibit
Number
|
Exhibit Description
|
|
|
4.4(b)
|
Second Amendment to the Prudential Facility, dated as of September 28, 2015, between the Company and Prudential Investment Management, Inc. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed on October 2, 2015)
|
|
|
4.5
|
$125,000,000 Note Purchase Agreement, dated as of February 7, 2014, by and among New Jersey Natural Gas Company and the Purchasers party thereto (incorporated by reference to Exhibit 4.5 to the Quarterly Report on Form 10-Q, as filed on May 7, 2014)
|
|
|
4.6
|
Loan Agreement between New Jersey Economic Development Authority and New Jersey Natural Gas Company, dated as of August 1, 2011 (incorporated by reference to Exhibit 4.10 to the Annual Report on Form 10-K for the year ended September 30, 2011, as filed on November 23, 2011)
|
|
|
4.7+
|
|
|
|
4.8+
|
|
|
|
4.9
|
$50,000,000 Note Purchase Agreement, dated as of February 8, 2013, by and among New Jersey Natural Gas Company and the Purchasers party thereto (incorporated by reference to Exhibit 4.12 to the Quarterly Report on Form 10-Q, as filed on May 3, 2013)
|
|
|
4.10
|
$150,000,000 Note Purchase Agreement, dated as of February 12, 2015, by and among New Jersey Natural Gas Company and the Purchasers party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, as filed on February 17, 2015)
|
|
|
4.11
|
Note Purchase Agreement, dated as of March 22, 2016, among New Jersey Resources Corporation and each of the Purchasers listed in Schedule A thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, as filed on March 25, 2016)
|
|
|
4.12
|
$125,000,000 Note Purchase Agreement, dated as of June 21, 2016, by and among New Jersey Natural Gas Company and the Purchasers party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, as filed on June 22, 2016)
|
|
|
4.13
|
$125,000,000 Note Purchase Agreement, dated as of May 11, 2018, by and among New Jersey Natural Gas Company and the Purchasers party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, as filed on May 11, 2018)
|
|
|
4.14
|
$100,000,000 Note Purchase Agreement, dated as of June 8, 2018, by and among New Jersey Resources Corporation and the Purchasers party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, as filed on June 8, 2018)
|
|
|
4.15
|
Amended and Restated Indenture, dated as of April 1, 2019, between NJNG and New Jersey Economic Development Authority and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q, as filed on May 3, 2019)
|
|
|
4.16
|
Second Amendment to the Loan Agreement, dated as of April 1, 2019, NJNG and New Jersey Economic Development Authority (incorporated by reference to Exhibit 4.2 to the Quarterly Report on Form 10-Q, as filed on May 3, 2019)
|
|
|
4.17
|
Amended and Restated Continuing Disclosure Undertaking, dated as of April 18, 2019 (incorporated by reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q, as filed on May 3, 2019)
|
|
|
4.18
|
$150,000,000 Note Purchase Agreement, dated as of July 17, 2019, by and among New Jersey Resources Corporation and the Purchasers party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, as filed on July 17, 2019)
|
|
|
4.19
|
$185,000,000 Note Purchase Agreement, dated as of July 17, 2019, by and among New Jersey Natural Gas Company and the Purchasers party thereto (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, as filed on July 17, 2019)
|
|
|
4.20+
|
Exhibit
Number
|
Exhibit Description
|
|
|
10.1*
|
Amended and Restated Supplemental Executive Retirement Plan Agreement between the Company and Laurence M. Downes dated November 28, 2008 (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q, as filed on February 6, 2009)
|
|
|
10.2(a)*
|
Schedule of Supplemental Executive Retirement Plan Agreements for named executive officers (incorporated by reference to Exhibit 10.2(a) to the Annual Report on Form 10-K for the year ended September 30, 2010, as filed on November 24, 2010)
|
|
|
10.2(b)*
|
Form of Amendment to Supplemental Executive Retirement Plan Agreement between the Company and Named Executive Officer (for future use) (incorporated by reference to Exhibit 10.4(b) to the Quarterly Report on Form 10-Q, as filed on February 6, 2009)
|
|
|
10.3
|
Service Agreement for Rate Schedule SS-1 by and between NJNG and Texas Eastern Transmission Company, dated as of June 21, 1995 (incorporated by reference to Exhibit 10-5B to the Annual Report on Form 10-K for the year ended September 30, 1996, as filed on December 30, 1996)
|
|
|
10.4
|
Amended and Restated Lease Agreement between NJNG, as Lessee, and State Street Bank and Trust Company of Connecticut, National Association, as Lessor, for NJNG’s Headquarters Building dated December 21, 1995 (incorporated by reference to Exhibit 10-7 to the Annual Report on Form 10-K for the year ended September 30, 1996, as filed on December 30, 1996)
|
|
|
10.5*
|
Summary of 2020 Non-Employee Director Compensation Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed on September 16, 2019)
|
|
|
10.6*
|
Summary of Company’s Non-Employee Director Compensation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed on November 19, 2018)
|
|
|
10.7*
|
The Company’s 2007 Stock Award and Incentive Plan (as amended and restated January 1, 2009) (incorporated by reference to Exhibit 10.17 to the Quarterly Report on Form 10-Q, as filed on February 6, 2009)
|
|
|
10.8*
|
2007 Stock Award and Incentive Plan Form of Performance Share Units Agreement (TSR) (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q, as filed on February 8, 2017)
|
|
|
10.9*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Performance Share Units Agreement - Total Shareholder Return (incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q, as filed on February 8, 2018)
|
|
|
10.10*
|
2007 Stock Award and Incentive Plan Form of Performance Share Units Agreement (NFE) (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q, as filed on February 8, 2017)
|
|
|
10.11*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Performance Share Units Agreement - NFE (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q, as filed on February 8, 2018)
|
|
|
10.12*
|
2007 Stock Award and Incentive Plan Form of Performance-Based Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q, as filed on February 8, 2017)
|
|
|
10.13*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Performance Based Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.10 to the Quarterly Report on Form 10-Q, as filed on February 8, 2018)
|
|
|
10.14*
|
Form of Amendment of Deferred Stock Retention Award Agreement (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q, as filed on August 3, 2016)
|
|
|
10.15*
|
2007 Stock Award and Incentive Plan Form of Deferred Stock Retention Award Agreement (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q, as filed on February 8, 2017)
|
|
|
10.16*
|
New Jersey Resources Corporation Deferred Stock Retention Award Agreement (incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q, as filed on February 8, 2018)
|
|
|
10.17*
|
2007 Stock Award and Incentive Plan Form of Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q, as filed on February 8, 2017)
|
Exhibit
Number
|
Exhibit Description
|
|
|
10.18*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q, as filed on February 8, 2018)
|
|
|
10.19*
|
The Company’s 2017 Stock Award and Incentive Plan (incorporated by reference to Appendix A to the Proxy Statement for the 2017 Annual Meeting as filed on December 15, 2016)
|
|
|
10.20*
|
New Jersey Resources Corporation Savings Equalization Plan (as amended and restated as of January 1, 2017) (incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K as filed on November 21, 2017)
|
|
|
10.21*
|
New Jersey Resources Corporation Pension Equalization Plan (incorporated by reference to Exhibit 10.28 to the Quarterly Report on Form 10-Q, as filed on February 6, 2009)
|
|
|
10.22*
|
New Jersey Resources Corporation Directors’ Deferred Compensation Plan (incorporated by reference to Exhibit 10.25 to the Quarterly Report on Form 10-Q, as filed on February 6, 2009)
|
|
|
10.23*
|
New Jersey Resources Corporation Officers’ Deferred Compensation Plan (incorporated by reference to Exhibit 10.26 to the Quarterly Report on Form 10-Q, as filed on February 6, 2009)
|
|
|
10.24*
|
Form of Amended and Restated Employment Continuation Agreement between the Company and NJR Energy Services Company named executive officer (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, as filed on December 16, 2015)
|
|
|
10.25*
|
Form of Amended and Restated Employment Continuation Agreement between the Company and named executive officer (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, as filed on December 16, 2015)
|
|
|
10.25(a)*
|
Schedule of Employee Continuation Agreements (incorporated by reference to Exhibit 10.24(a) to the Annual Report on Form 10-K for the year ended September 30, 2018, as filed on November 20, 2018)
|
|
|
10.26
|
Limited Liability Company Agreement of Steckman Ridge GP, LLC, dated as of March 2, 2007 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q, as filed on May 3, 2007)
|
|
|
10.27
|
Limited Partnership Agreement of Steckman Ridge, LP dated as of March 2, 2007 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q, as filed on May 3, 2007)
|
|
|
10.28
|
$425,000,000 Amended and Restated Credit Agreement dated as of December 5, 2018, by and among NJR, the guarantors thereto, the lenders party thereto, PNC Bank, National Association, as Administrative Agent, JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association and U.S. Bank National Association, as Syndication Agents, and Bank of America, N.A., Mizuho Bank, Ltd. and TD Bank, N.A., as Documentation Agents (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, as filed on December 11, 2018)
|
|
|
10.29
|
$250,000,000 Amended and Restated Credit Agreement dated as of December 5, 2018, by and among NJNG, the lenders party thereto, PNC Bank, National Association, as Administrative Agent, JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association and U.S. Bank National Association, as Syndication Agents, and Bank of America, N.A., Mizuho Bank, Ltd. and TD Bank, N.A., as Documentation Agents (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, as filed on December 11, 2018)
|
|
|
10.30*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Performance Share Units Agreement - NFE Fiscal Year 2019 (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q, as filed on February 6, 2019)
|
|
|
10.31*
|
New Jersey Resources Corporation Deferred Stock Retention Award Agreement Fiscal Year 2019 (incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q, as filed on February 6, 2019)
|
|
|
10.32*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Performance Share Units Agreement - Total Shareholder Return Fiscal Year 2019 (incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q, as filed on February 6, 2019)
|
|
|
10.33*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Restricted Stock Units Agreement Fiscal Year 2019 (incorporated by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q, as filed on February 6, 2019)
|
|
|
Exhibit
Number
|
Exhibit Description
|
|
|
10.34*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Performance Based Restricted Stock Units Agreement Fiscal Year 2019 (incorporated by reference to Exhibit 10.10 to the Quarterly Report on Form 10-Q, as filed on February 6, 2019)
|
|
|
10.35*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Performance Share Units Agreement - NFE CEO Fiscal Year 2019 (incorporated by reference to Exhibit 10.11 to the Quarterly Report on Form 10-Q, as filed on February 6, 2019)
|
|
|
10.36*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Performance Share Units Agreement - Total Shareholder Return CEO Fiscal Year 2019 (incorporated by reference to Exhibit 10.12 to the Quarterly Report on Form 10-Q, as filed on February 6, 2019)
|
|
|
10.37*
|
New Jersey Resources Corporation 2017 Stock Award and Incentive Plan Performance Based Restricted Stock Units Agreement CEO Fiscal Year 2019 (incorporated by reference to Exhibit 10.13 to the Quarterly Report on Form 10-Q, as filed on February 6, 2019)
|
|
|
10.38
|
$350,000,000 Term Loan Credit Agreement, dated as of October 9, 2019, by and among New Jersey Resources Corporation and each of the Guarantors party thereto and the lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent and Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Bookrunner (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, as filed on October 11, 2019)
|
|
|
21.1+
|
|
|
|
23.1+
|
|
|
|
31.1+
|
|
|
|
31.2+
|
|
|
|
32.1+ †
|
|
|
|
32.2+ †
|
|
|
|
101+
|
Interactive Data File {Annual Report on Form 10-K, for the fiscal year ended September 30, 2019, furnished in iXBRL (Inline eXtensible Business Reporting Language)}
|
|
|
104+
|
Cover Page Interactive Data File included in Exhibit 101
|
+
|
Filed herewith.
|
*
|
Denotes compensatory plans or arrangements or management contracts.
|
†
|
This certificate accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by NJR for purposes of Section 18 or any other provision of the Securities Exchange Act of 1934, as amended.
|
|
|
NEW JERSEY RESOURCES CORPORATION
|
|
|
(Registrant)
|
|
|
|
Date:
|
November 22, 2019
|
By:/s/ Patrick J. Migliaccio
|
|
|
Patrick J. Migliaccio
|
|
|
Senior Vice President and
|
|
|
Chief Financial Officer
|
November 22, 2019
|
/s/ Stephen D. Westhoven
|
November 22, 2019
|
/s/ Patrick J. Migliaccio
|
|
Stephen D. Westhoven
President and Chief Executive Officer
Director
(Principal Executive Officer)
|
|
Patrick J. Migliaccio
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
|
|
|
|
November 22, 2019
|
/s/ Laurence M. Downes
|
November 22, 2019
|
/s/ Jane M. Kenny
|
|
Laurence M. Downes
Chairman |
|
Jane M. Kenny
Director |
|
|
|
|
November 22, 2019
|
/s/ Gregory E. Aliff
|
November 22, 2019
|
/s/ Thomas C. O’Connor
|
|
Gregory E. Aliff
Director
|
|
Thomas C. O’Connor
Director |
|
|
|
|
November 22, 2019
|
/s/ Donald L. Correll
|
November 22, 2019
|
/s/ J. Terry Strange
|
|
Donald L. Correll
Director |
|
J. Terry Strange
Director |
|
|
|
|
November 22, 2019
|
/s/ James H. DeGraffenreidt, Jr.
|
November 22, 2019
|
/s/ Sharon C. Taylor
|
|
James H. DeGraffenreidt, Jr.
Director |
|
Sharon C. Taylor
Director |
|
|
|
|
November 22, 2019
|
/s/ Robert B. Evans
|
November 22, 2019
|
/s/ David A. Trice
|
|
Robert B. Evans
Director |
|
David A. Trice
Director |
|
|
|
|
November 22, 2019
|
/s/ M. William Howard, Jr.
|
November 22, 2019
|
/s/ George R. Zoffinger
|
|
M. William Howard, Jr.
Director |
|
George R. Zoffinger
Director |
|
|
•
|
the merger or consolidation of the corporation with the interested stockholder or any corporation that after the merger or consolidation would be an affiliate or associate of the interested stockholder,
|
•
|
the sale, lease, exchange, mortgage, pledge, transfer or other disposition to an interested stockholder or any affiliate or associate of the interested stockholder of 10% or more of the corporation’s assets or
|
•
|
the issuance or transfer to an interested stockholder or any affiliate or associate of the interested stockholder of 5% or more of the aggregate market value of the stock of the corporation.
|
Section
|
|
Heading
|
Page
|
||
|
|
|
|
|
|
Article I
|
|
Definitions
|
2
|
||
|
Section 101.
|
|
|
Definitions of Terms
|
2
|
Article II
|
|
Amendments to Original Loan Agreement
|
2
|
||
|
Section 201.
|
|
|
Amendments to Recitals of Original Loan Agreement
|
2
|
|
Section 202.
|
|
|
Amendment to the Original Loan Agreement
|
3
|
|
Section 203.
|
|
|
Amendment to Article IV of the Original Loan Agreement
|
3
|
|
Section 204.
|
|
|
Amendment to Article VII of the Original Loan Agreement
|
3
|
|
Section 205.
|
|
|
Amendments to Article X of the Original Loan Agreement
|
3
|
|
Section 206.
|
|
|
Amendments to Exhibit B of the Original Loan Agreement
|
4
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Article III
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Miscellaneous
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4
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Section 301.
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Agreement Confirmed
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4
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Section 302.
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Severability
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4
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Section 303.
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Counterparts
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4
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Section 304.
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Applicable Provisions of Law
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4
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|
Section 305.
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|
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Effective Date
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4
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Exhibit A - Form of Series BBB and Series CCC First Mortgage Bonds
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By:
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/s/ Christopher E. Golabek
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Dated: August __, 2019
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New Jersey Natural Gas Company
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_________________________________
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By: ______________________________
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Name:
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Name:
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Title:
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Title:
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By:
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Page
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Parties
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1
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Preambles
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1
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Article I
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Definitions
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2
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||
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Section 101.
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Definitions of Terms
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2
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Article II
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Amendments to Original Indenture
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2
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||
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Section 201.
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Amendment to Recitals of Original Indenture
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2
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Section 202.
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Amendments to Article I of the Original Indenture
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3
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Section 203.
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Amendments to Article II of the Original Indenture
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4
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Section 204.
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Amendments to Article V of the Original Indenture
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5
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Section 205.
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Amendments to Article VII of the Original Indenture
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7
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Section 206.
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Amendments to Article VIII of the Original Indenture
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8
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Section 207.
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Amendments to Article IX of the Original Indenture
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8
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Section 208.
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Amendments to Article XI of the Original Indenture
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11
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Section 209.
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Amendments to Article XI of the Original Indenture
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12
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Article III
|
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Miscellaneous
|
12
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||
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Section 301.
|
|
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Agreement Confirmed
|
12
|
|
Section 302.
|
|
|
Severability
|
12
|
|
Section 303.
|
|
|
Counterparts
|
12
|
|
Section 304.
|
|
|
Applicable Provisions of Law
|
12
|
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Section 305.
|
|
|
Effective Date
|
13
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Exhibit A - Forms of Bonds
|
|
Tier
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Credit Ratings
(Moody’s/Fitch/S&P)
|
Applicable Spread
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I
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A2 or higher/A or higher/
A or higher
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55 basis points (0.55%)
|
II
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A3/A-/A-
|
70 basis points (0.70%)
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III
|
Baa1/BBB+/BBB+
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85 basis points (0.85%)
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IV
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Baa2 or lower/
BBB or lower/
BBB or lower
|
100 basis points (100%)”
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No. R-__
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$[Amount]
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Dated:
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Maturity Date:
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[CUSIP:]
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Registered Owner:
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____________________
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||
Principal Amount:
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____________________________ Dollars
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[Seal]
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New Jersey Economic Development Authority
|
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By:
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Richard T. LoCascio
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Daniel T. Weick
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Assistant Secretary
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Managing Director - Post Closing Financial Services
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By
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Note:
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The signature(s) to this Assignment must correspond with the name(s) as written on the face of the within Registered Bond in every particular, without alteration or enlargement or any change whatsoever.
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Notice: Signature guarantee should be made by a guarantor institution participating in the Securities, Transfer Agents Medallion Program or in such other program acceptable to the Bond Registrar.
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(1)
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The Annual Report shall consist of:
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i.
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the Company’s audited financial statements prepared in accordance with generally accepted accounting principles used in the United States of America (“GAAP”), and
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ii.
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annual financial information and operating data of the type contained in Appendix A to the Official Statement under the following captions: (1) table setting forth ratio of earnings to fixed charges under “HISTORICAL CASH FLOWS”, (2) “CAPITALIZATION”, (3) “SELECTED HISTORICAL FINANCIAL INFORMATION” and (4) “NJNG OPERATING STATISTICS.”
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(2)
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If any part of the Annual Report can no longer be generated because the operations to which it is related have been materially changed or
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(3)
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If any amendment is made to this Agreement, the Annual Report for the year in which such amendment or waiver is made (or in any notice or supplement provided to the MSRB) shall contain a narrative description of the reasons for such amendment and its impact on the type of information being provided.
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(4)
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The Company agrees that, when filing its Annual Financial Information with the MSRB vis EMMA, it will include the statements under the caption “AVAILABLE INFORMATION” in Appendix A of the Official Statement, updated as appropriate.
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(1)
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principal and interest payment delinquencies;
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(2)
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non-payment related defaults, if material;
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(3)
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any unscheduled draws on debt service reserves reflecting financial difficulties;
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(4)
|
unscheduled draws on credit enhancement facilities reflecting financial difficulties;
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(5)
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substitution of credit or liquidity providers, or their failure to perform;
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(6)
|
adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;
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(7)
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modifications to rights of holders of the Bonds, if material;
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(8)
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bond calls, if material, and tender offers;
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(9)
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defeasance of the Bonds or any portion thereof;
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(10)
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release, substitution, or sale of property securing repayment of the Bonds, if material;
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(11)
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rating changes with respect to the Bonds;
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(12)
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bankruptcy, insolvency, receivership or similar event of the Company;
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(13)
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the consummation of a merger, consolidation, or acquisition involving the Company or the sale of all or substantially all of the assets of the Company, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and
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(14)
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appointment of a successor or additional trustee or the change of name of a trustee, if material.
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(15)
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incurrence of a Financial Obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of Financial Obligation of the obligated person, any of which affect security holders, if material; and
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(16)
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default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflected financial difficulties.
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By:
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/s/ Roberto F. Bel _______
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I.
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FRANCHISES
|
II.
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GAS DISTRIBUTION SYSTEMS AND RELATED PROPERTY
|
III.
|
CONTRACTS
|
SUBSIDIARY
|
|
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STATE OF INCORPORATION
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||||
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New Jersey Natural Gas Company
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New Jersey
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||||||
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NJR Service Corporation
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New Jersey
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||||||
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NJR Energy Services Company
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New Jersey
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||||||
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NJR Clean Energy Ventures Corporation
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New Jersey
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||||||
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Subsidiary:
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NJR Clean Energy Ventures II Corporation
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New Jersey
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|||||
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Subsidiaries:
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Bernards Solar, LLC (Limited Liability Company)
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New Jersey
|
|
||||
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NJR Clean Energy Ventures III Corporation
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New Jersey
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|
||||
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NJR Energy Investments Corporation
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New Jersey
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|
||||||
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Subsidiaries:
|
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NJR Midstream Holdings Corporation
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New Jersey
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|
|||||
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Subsidiaries:
|
|
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|
||
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NJNR Pipeline Company
|
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New Jersey
|
|
||||
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NJR Pipeline Company
|
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New Jersey
|
|
||||
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Subsidiaries:
|
|
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|
||
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Adelphia Gateway, LLC (Limited Liability Company)
|
|
Delaware
|
|
|||
|
|
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Leaf River Energy Center LLC (Limited Liability Company)
|
|
Delaware
|
|
|||
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Subsidiary:
|
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|
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LR Finance LLC (Limited Liability Company)
|
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Delaware
|
|
||
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NJR Storage Holdings Company
|
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Delaware
|
|
||||
|
|
|
Subsidiary:
|
|
|
|
|
||
|
|
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NJR Steckman Ridge Storage Company
|
|
Delaware
|
|
|||
|
|
|
|
|
|
|
|
|
|
NJR Retail Holdings Corporation
|
|
New Jersey
|
|
||||||
|
Subsidiaries:
|
|
|
|
|
|
|
|
|
|
Commercial Realty and Resources Corp
|
|
New Jersey
|
|
|||||
|
Phoenix Fuel Management Company
|
|
New Jersey
|
|
|||||
|
NJR Home Services Company
|
|
New Jersey
|
|
|||||
|
|
Subsidiary:
|
|
|
|
|
|
||
|
|
NJR Plumbing Services, Inc
|
|
New Jersey
|
|
1)
|
I have reviewed this report on Form 10-K of New Jersey Resources Corporation;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
November 22, 2019
|
By:
|
/s/ Stephen D. Westhoven
|
|
|
|
Stephen D. Westhoven
|
|
|
|
President & Chief Executive Officer
|
1)
|
I have reviewed this report on Form 10-K of New Jersey Resources Corporation;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
November 22, 2019
|
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 annual report on Form 10-K for the fiscal year ended September 30, 2019, 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:
|
November 22, 2019
|
By:
|
/s/ Stephen D. Westhoven
|
|
|
|
Stephen D. Westhoven
|
|
|
|
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 annual report on Form 10-K for the fiscal year ended September 30, 2019, 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:
|
November 22, 2019
|
By:
|
/s/ Patrick Migliaccio
|
|
|
|
Patrick Migliaccio
|
|
|
|
Senior Vice President and Chief Financial Officer
|