XML 57 R11.htm IDEA: XBRL DOCUMENT
v2.4.0.6

FAIR VALUE | 3 Months Ended
--- | ---
Dec. 31, 2012
Fair Value Disclosures [Abstract] |
FAIR VALUE | FAIR VALUE Fair Value of Assets and Liabilities The fair value of cash and temporary investments, commercial paper and borrowings under revolving credit facilities are estimated to equal their carrying amounts due to the short maturity of those instruments. The estimated fair value of long-term debt, including current maturities and excluding capital leases, is as follows:
(Thousands) | December 31, 2012 | September 30, 2012
Carrying value | $ | 479,845 |  | $ | 479,845 |
Fair market value | $ | 527,371 |  | $ | 530,056 |
NJR utilizes a discounted cash flow method to determine the fair value of its debt. Inputs include observable municipal and corporate yields, as appropriate for the specific issue and for NJR's credit rating. As of December 31, 2012, NJR discloses its debt within Level 2 of the fair value hierarchy. Fair Value Hierarchy NJR applies fair value measurement guidance to its financial assets and liabilities, as appropriate, which include financial derivatives and physical commodity contracts qualifying as derivatives, available for sale securities and other financial assets and liabilities. In addition, authoritative accounting literature prescribes the use of a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on the source of the data used to develop the price inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to inputs that are based on unobservable market data and include the following:
Level 1 | Unadjusted quoted prices for identical assets or liabilities in active markets; NJR's Level 1 assets and liabilities include exchange traded futures and options contracts, listed equities, and money market funds. Exchange traded futures and options contracts include all energy contracts traded on the New York Mercantile Exchange (NYMEX)/Chicago Mercantile Exchange (CME) and the Intercontinental Exchange (ICE) that NJR refers internally to as basis swaps, fixed swaps, futures and options that are cleared through an Futures Commission Merchant (FCM).
Level 2 | Price data, which includes both commodity and basis price data other than Level 1 quotes, that is observed either directly or indirectly from publications or pricing services; NJR's Level 2 assets and liabilities include over-the-counter physical forward commodity contracts and swap contracts or derivatives that are initially valued using observable quotes and are subsequently adjusted to include time value, credit risk or estimated transport pricing components for which no basis price is available. Level 2 financial derivatives consist of transactions with non-FCM counterparties (basis swaps, fixed swaps and/or options). 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 was considered to be a “model”, it would still be considered to be Level 2 input as:
1) The data is widely accepted and public 2) The data is non-proprietary and sourced from an independent third party 3) The data is observable and published These additional adjustments are generally not considered to be significant to the ultimate recognized values.
Level 3 | Inputs derived from a significant amount of unobservable market data; these include NJR's best estimate of fair value and are derived primarily through the use of internal valuation methodologies.
Assets and liabilities measured at fair value on a recurring basis are summarized as follows:
| Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs |
(Thousands) | (Level 1) | (Level 2) | (Level 3) | Total
As of December 31, 2012: |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |
Physical forward commodity contracts |  | $ | — |  |  |  | $ | 13,500 |  |  |  | $ | — |  |  | $ | 13,500 |
Financial derivative contracts - natural gas |  | 32,192 |  |  |  | 201 |  |  |  | — |  |  | 32,393 |
Financial derivative contracts - foreign exchange |  | — |  |  |  | 128 |  |  |  | — |  |  | 128 |
Available for sale equity securities - energy industry (1) |  | 10,469 |  |  |  | — |  |  |  | — |  |  | 10,469 |
Other (2) |  | 211 |  |  |  | — |  |  |  | — |  |  | 211 |
Total assets at fair value |  | $ | 42,872 |  |  |  | $ | 13,829 |  |  |  | $ | — |  |  | $ | 56,701 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Physical forward commodity contracts |  | $ | — |  |  |  | $ | 10,450 |  |  |  | $ | — |  |  | $ | 10,450 |
Financial derivative contracts - natural gas |  | 13,175 |  |  |  | 664 |  |  |  | — |  |  | 13,839 |
Financial derivative contracts - foreign exchange |  | — |  |  |  | 71 |  |  |  | — |  |  | 71 |
Other |  | — |  |  |  | — |  |  |  | — |  |  | — |
Total liabilities at fair value |  | $ | 13,175 |  |  |  | $ | 11,185 |  |  |  | $ | — |  |  | $ | 24,360 |
As of September 30, 2012: |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |
Physical forward commodity contracts |  | $ | — |  |  |  | $ | 20,248 |  |  |  | $ | — |  |  | $ | 20,248 |
Financial derivative contracts - natural gas |  | 14,270 |  |  |  | 15,645 |  |  |  | — |  |  | 29,915 |
Financial derivative contracts - foreign exchange |  | — |  |  |  | 186 |  |  |  | — |  |  | 186 |
Available for sale equity securities - energy industry (1) |  | 11,009 |  |  |  | — |  |  |  | — |  |  | 11,009 |
Other (2) |  | 30 |  |  |  | — |  |  |  | — |  |  | 30 |
Total assets at fair value |  | $ | 25,309 |  |  |  | $ | 36,079 |  |  |  | $ | — |  |  | $ | 61,388 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Physical forward commodity contracts |  | $ | — |  |  |  | $ | 9,746 |  |  |  | $ | — |  |  | $ | 9,746 |
Financial derivative contracts - natural gas |  | 16,922 |  |  |  | 18,793 |  |  |  | — |  |  | 35,715 |
Financial derivative contracts - foreign exchange |  | — |  |  |  | 112 |  |  |  | — |  |  | 112 |
Other |  | — |  |  |  | — |  |  |  | — |  |  | — |
Total liabilities at fair value |  | $ | 16,922 |  |  |  | $ | 28,651 |  |  |  | $ | — |  |  | $ | 45,573 |
(1) | Included in Other noncurrent assets on the Unaudited Condensed Consolidated Balance Sheets.
(2) | Includes various money market funds.
In October 2012, following the implementation of Dodd-Frank, ICE converted its cleared energy “swap” contracts to “futures” contracts and the NYMEX amended their product titles to remove the word “swap” from the titles of their “futures” and “option” contracts. In conjunction with these changes, the Company reviewed its valuation methodology for exchange-traded financial instruments including consideration of credit risk adjustment and discounting. The result of this review is that as of December 31, 2012, exchange-traded/FCM cleared financial derivative contracts, previously categorized as Level 2 Basis Swaps and Fixed Swaps, are categorized as Level 1 Futures. The Company's policy is to recognize transfers in and out at the end of the reporting period. A summary of transfers between Level 1 and Level 2 is as follows:
(Thousands) |
Transfers out of Level 2 into Level 1 | December 31, 2012
Assets: |
Financial derivative contracts - natural gas | $ | 19,564 |
Liabilities: |
Financial derivative contracts - natural gas | (8,766 | )
Total | $ | 10,798 |

X
- Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 159 -Paragraph 17-22, 27, 28 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15C, 15D -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13504-108611 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15A -Subparagraph a-d -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13537-108611 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44A, 44B -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 3, 10, 14, 15 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15B -Subparagraph a, b -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 32, 33, 34 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration