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DEBT | 12 Months Ended
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Sep. 30, 2014
Debt Disclosure [Abstract] |
DEBT | DEBT NJNG and NJR finance working capital requirements and capital expenditures through the issuance of various long-term debt and other financing arrangements, including unsecured credit and private placement debt shelf facilities. Amounts available under credit facilities are reduced by bank or commercial paper borrowings, as applicable, and any outstanding letters of credit. The following table presents the long-term debt of the Company as of September 30:
(Thousands) | 2014 | 2013
NJNG |  |  |
First mortgage bonds: | Maturity date: |  |
5.00% | Series HH | December 1, 2038 | $ | — |  | $ | 12,000 |
4.50% | Series II | August 1, 2023 | 10,300 |  | 10,300 |
4.60% | Series JJ | August 1, 2024 | 10,500 |  | 10,500 |
4.90% | Series KK | October 1, 2040 | 15,000 |  | 15,000 |
5.60% | Series LL | May 15, 2018 | 125,000 |  | 125,000 |
Variable | Series MM | September 1, 2027 | 9,545 |  | 9,545 |
Variable | Series NN | August 1, 2035 | 41,000 |  | 41,000 |
Variable | Series OO | August 1, 2041 | 46,500 |  | 46,500 |
3.15% | Series PP | April 15, 2028 | 50,000 |  | 50,000 |
4.77% | Unsecured senior notes | March 15, 2014 | — |  | 60,000 |
3.58% | Series QQ | March 13, 2024 | 70,000 |  | — |
4.61% | Series RR | March 13, 2044 | 55,000 |  | — |
Capital lease obligation-buildings | June 1, 2021 | 18,726 |  | 20,381 |
Capital lease obligation-meters | Various dates | 31,143 |  | 31,261 |
Capital lease obligation-equipment | December 1, 2013 | — |  | 42 |
Less: Current maturities of long-term debt |  | (9,505 | ) | (68,643 | )
Total NJNG long-term debt | 473,209 |  | 362,886 |
NJR |  |  |
6.05% | Unsecured senior notes | September 24, 2017 | 50,000 |  | 50,000 |
1.94% | Unsecured senior notes | September 17, 2015 | 25,000 |  | 25,000 |
2.51% | Unsecured senior notes | September 17, 2018 | 25,000 |  | 25,000 |
3.25% | Unsecured senior notes | September 17, 2022 | 50,000 |  | 50,000 |
Less: Current maturities of long-term debt |  | (25,000 | ) | — |
Total NJR long-term debt | 125,000 |  | 150,000 |
Total long-term debt | $ | 598,209 |  | $ | 512,886 |
Annual long-term debt redemption requirements, excluding capital leases, as of September 30, are as follows:
(Millions) | NJNG | NJR
2015 | $ | — |  | $ | 25.0 |
2016 | $ | — |  | $ | — |
2017 | $ | — |  | $ | 50.0 |
2018 | $ | 125.0 |  | $ | 25.0 |
2019 | $ | — |  | $ | — |
Thereafter | $ | 307.8 |  | $ | 50.0 |
NJNG First Mortgage Bonds NJNG and Trustee, entered into the New Mortgage Indenture, dated September 1, 2014, which secures all of the outstanding First Mortgage Bonds issued under the Old Mortgage Indenture. The New Mortgage Indenture provides a direct first mortgage lien upon substantially all of the operating properties and franchises of NJNG (other than excepted property, such as cash on hand, choses-in-action, securities, rent, natural gas meters and certain materials, supplies, appliances and vehicles), subject only to certain permitted encumbrances. The New Mortgage Indenture contains provisions subjecting after-acquired property (other than excepted property and subject to pre-existing liens, if any, at the time of acquisition) to the lien thereof. NJNG's New Mortgage Indenture no longer contains a restriction on the ability of NJNG to pay dividends. New Jersey Administrative Code 14:4-4.7 states that a public utility cannot issue dividends if it's equity to total capitalization ratio falls below 30 percent without regulatory approval. As of September 30, 2014, NJNG equity to total capitalization ratio is 50.9 percent and has the ability to issue up to $841.2 million of FMBs under the terms of the New Mortgage Indenture. In August 2011, NJNG completed a refunding of its outstanding Auction-Rate Securities whereby the EDA issued three series of Variable Rate Demand Notes with a total principal amount of $97 million with maturity dates ranging from September 2027 to August 2041. NJNG and the EDA entered into a Loan Agreement securing the payment of principal and interest on the notes by NJNG with a pledge of $97 million principal amount of First Mortgage Bonds issued by NJNG. This agreement was amended and restated effective September 1, 2014, to accommodate a new variable interest rate mode. In connection with the change in interest rate mode, NJNG entered into a Continuing Covenant Agreement dated as of September 24, 2014, with Wells Fargo Municipal Capital Strategies, LLC, pursuant to which Wells Fargo agreed to buy the EDA Bonds. Each series of EDA Bonds is expected to accrue interest for five years at a variable rate determined monthly, which rate is initially calculated as .55 percent plus 70 percent of one month LIBOR, subject to earlier redemption or conversion to another interest rate mode. The EDA Bonds are not subject to optional tender while they bear interest at a LIBOR index rate. Any remaining unamortized extinguished debt costs, will be amortized over the life of the new EDA Bonds in accordance with ASC 980, Regulated Operations, therefore, there was no impact to income upon extinguishment. The rates on these types of investments are generally correlated with the Securities Industry and Financial Markets Association Municipal Swap Index and will initially accrue interest at a daily rate, with a maximum rate of 12 percent per annum. As of September 30, 2014, the interest rate on the EDA Bonds was .66 percent. On April 15, 2013, NJNG issued $50 million of 3.15 percent senior secured notes due April 15, 2028, in the private placement market pursuant to a note purchase agreement entered into on February 8, 2013. Interest is payable semi-annually. The proceeds were used to refinance short-term debt and will fund capital expenditure requirements. On March 13, 2014, NJNG issued $70 million of 3.58 percent senior notes due March 13, 2024, and $55 million of 4.61 percent senior notes due March 13, 2044, secured by First Mortgage Bonds in the private placement market pursuant to a note purchase agreement entered into on February 7, 2014. The proceeds were used to pay down short-term debt and redeem NJNG's $60 million, 4.77 percent private placement bonds on March 15, 2014. On May 27, 2014, NJNG redeemed the $12 million, 5 percent Series HH bonds, which were callable as of December 1, 2013. NJNG Sale-Leasebacks NJNG has entered into a sale-leaseback for its headquarters building, which has a 25.5-year term that expires in June 2021, subject to an option by NJNG to renew the lease for additional five-year terms a maximum of four times. The present value of the agreement's minimum lease payments is reflected as both a capital lease asset and a capital lease obligation, which are included in utility plant and long-term debt, respectively, on the Consolidated Balance Sheets. NJNG received $7.6 million, $7.1 million and $6.5 million for fiscal 2014, 2013 and 2012, respectively, in connection with the sale-leaseback of its natural gas meters. NJNG records a capital lease obligation that is paid over the term of the lease and has the option to purchase the meters back at fair value upon expiration of the lease. During fiscal 2014, 2013 and 2012, NJNG exercised early purchase options with respect to meter leases by making final principal payments of $956,000, $752,000 and $1 million, respectively. This sale-leaseback program is expected to continue on an annual basis. Contractual commitments for capital lease payments, as of the fiscal years ended September 30, are as follows:
(Millions) | Lease Payments
2015 |  | $ | 11.9 |
2016 |  | 12.1 |
2017 |  | 11.0 |
2018 |  | 9.1 |
2019 |  | 6.3 |
Thereafter |  | 7.6 |
Subtotal |  | 58.0 |
Less: interest component |  | (8.1 | )
Total |  | $ | 49.9 |
NJR Long-term Debt NJR has two unsecured, uncommitted private placement debt shelf note agreements. These debt shelf note agreements are to be used for general corporate purposes, including working capital and capital expenditures. The first agreement was entered into with Prudential on June 30, 2011, in the amount of $75 million, which expired on June 30, 2014, and was amended effective July 25, 2014, by the First Amendment to the Prudential Facility, which allowed for another $100 million under the Prudential Facility. As of September 30, 2014, NJR had $50 million at 3.25 percent outstanding under this agreement, which will mature on September 17, 2022, and $100 million in notes at 3.48 percent due November 7, 2024. On September 26, 2013, NJR entered into an unsecured, uncommitted $100 million private placement shelf note agreement with MetLife. The MetLife Facility, subject to the terms and conditions set forth therein, allows NJR to issue senior notes to MetLife or certain of MetLife's affiliates from time to time during a three-year issuance period ending September 26, 2016, on terms and conditions, including interest rates and maturity dates, to be agreed upon in connection with each note issuance. The notes issued under the MetLife Facility will be guaranteed by certain unregulated subsidiaries of NJR. As of September 30, 2014, $100 million remains available for borrowing under the MetLife Facility. Additionally, NJR entered into another debt shelf note agreement on May 12, 2011, in the amount of $100 million, which expired on May 10, 2013. As of September 30, 2014, NJR had two series of notes outstanding under this agreement, $25 million at 1.94 percent, which will mature on September 15, 2015 and $25 million at 2.51 percent, which will mature on September 15, 2018. Notes issued under these agreements are guaranteed by certain unregulated subsidiaries of the Company. NJR had no long-term, variable-rate debt outstanding as of September 30, 2014 and 2013. A summary of NJR's and NJNG's short-term bank facilities as of September 30, are as follows:
(Thousands) | 2014 |  | 2013
NJR |  |  |
Bank revolving credit facilities (1) | $ | 425,000 |  |  | $ | 325,000 |
Notes outstanding at end of period | $ | 148,000 |  |  | $ | 97,000 |
Weighted average interest rate at end of period | 1.08 | % |  | 1.00 | %
Amount available at end of period (2) | $ | 256,484 |  |  | $ | 210,110 |
Bank term loan | $ | — |  |  | $ | 100,000 |
Loan outstanding at end of period | $ | — |  |  | $ | 100,000 |
Weighted average interest rate at end of period | — | % |  | 0.74 | %
Amount available at end of period | $ | — |  |  | $ | — |
Bank letter of credit facility (3) (4) | $ | — |  |  | $ | 10,000 |
NJNG |  |  |
Bank credit facility dedicated to EDA Bonds (1) (4) | $ | — |  |  | $ | 100,000 |
Bank revolving credit facilities (1) | $ | 250,000 |  |  | $ | 250,000 |
Commercial paper outstanding at end of period | $ | 153,000 |  |  | $ | 168,600 |
Weighted average interest rate at end of period | .12 | % |  | .13 | %
Amount available at end of period (5) | $ | 96,269 |  |  | $ | 81,400 |
(1) | Committed credit facilities, which require commitment fees on the unused amounts.
(2) | Letters of credit outstanding total $20.5 million and $17.9 million as of September 30, 2014 and 2013, respectively, which reduces amount available by the same amount.
(3) | Uncommitted, expired on June 5, 2014.
(4) | There were no borrowings outstanding as of September 30, 2014 and 2013, respectively.
(5) | Letters of credit outstanding total $731,000 and $266,000 as of September 30, 2014 and 2013, respectively, which reduces amount available by the same amount.
NJR Short-term Debt NJR had a $325 million unsecured committed credit facility expiring August 22, 2017. On January 24, 2014, NJR entered into an agreement for a $50 million unsecured, committed credit line. The credit line was put in place primarily to provide additional working capital to NJRES to meet any potential margin calls that may arise in NJRES' normal course of business. Effective January 31, 2014, NJR utilized the accordion option available under the NJR Credit Facility to increase the amount of credit available from $325 million to $425 million. The additional credit line was thereby terminated on the same date. The credit facility is used primarily to finance its share repurchases, to satisfy NJRES' short-term liquidity needs and to finance, on an initial basis, unregulated investments. As of September 30, 2014, NJR has six letters of credit outstanding totaling $20.5 million. One letter of credit for $15 million is issued on behalf of NJRES and five letters of credit, which total $5.5 million, are issued on behalf of NJRCEV. These letters of credit reduce the amount available under NJR's committed credit facility by the same amount. NJR does not anticipate that these letters of credit will be drawn upon by the counterparties, and they will be renewed as necessary. NJRES' letter of credit is used for margin requirements for natural gas transactions and expires on December 31, 2014. NJRCEV's letters of credit are used to secure construction of ground-mounted solar projects and to secure obligations pursuant to an Interconnection Services Agreement. They expire on dates ranging from November 27, 2014 to August 21, 2015. On September 13, 2013, NJR, as borrower, and certain of its unregulated subsidiaries, as guarantors, entered into an unsecured one-year $100 million Term Loan Credit Agreement with JPMorgan that expired on September 15, 2014, and was not replaced. On June 5, 2013, NJR entered into a new agreement permitting the issuance of stand-alone letters of credit for up to $10 million, which expired on June 5, 2014. On October 24, 2014, NJR entered into a $100 million uncommitted line of credit agreement, with Santander Bank, N.A., expiring on October 23, 2015. Neither NJNG nor the results of its operations are obligated or pledged to support the NJR credit or debt shelf facilities. NJNG Short-term Debt NJNG had a $250 million unsecured committed credit facility, which was due to expire in August 2014. On May 15, 2014, NJNG replaced the facility with a new $250 million, five-year, revolving, unsecured credit facility expiring in May 2019. The new NJNG Credit Facility permits the borrowing of revolving loans and swing loans, as well as the issuance of letters of credit. It also permits an increase to the facility, from time to time, with the existing or new lenders, in a minimum of $15 million increments up to a maximum of $50 million at the lending banks' discretion. As of September 30, 2014, the unused amount available under the NJNG Credit Facility, including amounts allocated to the backstop under the commercial paper program and the issuance of letters of credit, was $153 million. As of September 30, 2014, NJNG has two letters of credit outstanding for $731,000. NJNG's letters of credit are used for collateral for remediation projects and expire on August 11, 2015. These letters of credit reduce the amount available under NJNG's committed credit facility by the same amount. NJNG does not anticipate that these letters of credit will be drawn upon by the counterparty, and will be renewed as necessary. NJNG entered into the JPMC Facility, which was a $100 million four-year credit facility that was due to expire in August 2015, to provide liquidity support in the event of a failed remarketing of the EDA Bonds and to ensure payment of principal and interest. The JPMC Facility was terminated on September 26, 2014 as a result of the change in the interest rate mode on the EDA bonds.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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