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BUSINESS SEGMENT AND OTHER OPERATIONS DATA | 9 Months Ended
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Jun. 30, 2014
Segment Reporting [Abstract] |
BUSINESS SEGMENT AND OTHER OPERATIONS DATA | BUSINESS SEGMENT AND OTHER OPERATIONS DATA NJR organizes its businesses based on its products and services as well as regulatory environment. As a result, the Company manages the businesses through the following reportable segments and other operations: the Natural Gas Distribution segment consists of regulated energy and off-system, capacity and storage management operations; the Energy Services segment consists of unregulated wholesale energy operations; the Clean Energy Ventures segment consists of capital investments in distributed power projects; the Midstream segment consists of NJR's investments in natural gas transportation and storage facilities; the Retail and Other operations consist of heating, cooling and water appliance installation and services, commercial real estate development, other investments and general corporate activities. Information related to the Company's various business segments and other operations is detailed below:
| Three Months Ended | Nine Months Ended
| June 30, | June 30,
(Thousands) | 2014 | 2013 | 2014 | 2013
Operating revenues |  |  |  |
Natural Gas Distribution |  |  |  |
External customers | $ | 111,383 |  | $ | 119,022 |  | $ | 739,380 |  | $ | 689,621 |
Energy Services |  |  |  |
External customers (1) | 560,115 |  | 632,414 |  | 2,367,641 |  | 1,735,411 |
Intercompany | 518 |  | 1,119 |  | 72,285 |  | 5,670 |
Clean Energy Ventures |  |  |  |
External customers | 3,155 |  | 2,563 |  | 8,007 |  | 7,182 |
Subtotal | 675,171 |  | 755,118 |  | 3,187,313 |  | 2,437,884 |
Retail and Other |  |  |  |
External customers | 13,604 |  | 13,470 |  | 31,203 |  | 32,159 |
Intercompany | 194 |  | 234 |  | 693 |  | 683 |
Eliminations | (712 | ) | (1,353 | ) | (72,978 | ) | (6,353 | )
Total | $ | 688,257 |  | $ | 767,469 |  | $ | 3,146,231 |  | $ | 2,464,373 |
Depreciation and amortization |  |  |  |
Natural Gas Distribution | $ | 10,567 |  | $ | 9,537 |  | $ | 30,374 |  | $ | 28,213 |
Energy Services | 15 |  | 10 |  | 40 |  | 32 |
Clean Energy Ventures | 2,823 |  | 2,196 |  | 7,969 |  | 6,131 |
Midstream | 1 |  | 2 |  | 4 |  | 5 |
Subtotal | 13,406 |  | 11,745 |  | 38,387 |  | 34,381 |
Retail and Other | 212 |  | 196 |  | 627 |  | 586 |
Eliminations | 2 |  | 1 |  | — |  | (1 | )
Total | $ | 13,620 |  | $ | 11,942 |  | $ | 39,014 |  | $ | 34,966 |
Interest income (2) |  |  |  |
Natural Gas Distribution | $ | 137 |  | $ | 146 |  | $ | 579 |  | $ | 459 |
Energy Services | 210 |  | — |  | 210 |  | — |
Midstream | 171 |  | 265 |  | 709 |  | 799 |
Subtotal | 518 |  | 411 |  | 1,498 |  | 1,258 |
Retail and Other | 1 |  | (1 | ) | 1 |  | 1 |
Eliminations | (241 | ) | (217 | ) | (709 | ) | (667 | )
Total | $ | 278 |  | $ | 193 |  | $ | 790 |  | $ | 592 |
(1) | Includes sales to Canada, which accounted for 3.6 percent and 6.4 percent of total operating revenues during the nine months ended June 30, 2014 and 2013, respectively.
(2) | Included in other income on the Unaudited Condensed Consolidated Statements of Operations.
| Three Months Ended | Nine Months Ended
| June 30, | June 30,
(Thousands) | 2014 | 2013 | 2014 | 2013
Interest expense, net of capitalized interest |  |  |  |
Natural Gas Distribution | $ | 4,540 |  | $ | 3,796 |  | $ | 12,412 |  | $ | 10,929 |
Energy Services | 166 |  | 615 |  | 1,443 |  | 1,823 |
Clean Energy Ventures | 1,382 |  | 870 |  | 3,817 |  | 2,475 |
Midstream | 333 |  | 466 |  | 1,108 |  | 1,533 |
Subtotal | 6,421 |  | 5,747 |  | 18,780 |  | 16,760 |
Retail and Other | 86 |  | 261 |  | 328 |  | 819 |
Total | $ | 6,507 |  | $ | 6,008 |  | $ | 19,108 |  | $ | 17,579 |
Income tax provision (benefit) |  |  |  |
Natural Gas Distribution | $ | 4,348 |  | $ | 1,788 |  | $ | 42,256 |  | $ | 39,089 |
Energy Services | (16,256 | ) | 12,945 |  | 36,816 |  | 23,906 |
Clean Energy Ventures | 1,286 |  | (1,477 | ) | (18,146 | ) | (15,703 | )
Midstream | 1,321 |  | 1,073 |  | 3,890 |  | 3,935 |
Subtotal | (9,301 | ) | 14,329 |  | 64,816 |  | 51,227 |
Retail and Other | 1,680 |  | 1,378 |  | 360 |  | 349 |
Eliminations | (187 | ) | (410 | ) | 201 |  | (234 | )
Total | $ | (7,808 | ) | $ | 15,297 |  | $ | 65,377 |  | $ | 51,342 |
Equity in earnings of affiliates |  |  |  |
Midstream | $ | 3,511 |  | $ | 3,052 |  | $ | 10,594 |  | $ | 11,012 |
Eliminations | (830 | ) | (830 | ) | (2,538 | ) | (2,705 | )
Total | $ | 2,681 |  | $ | 2,222 |  | $ | 8,056 |  | $ | 8,307 |
Net financial earnings (loss) |  |  |  |
Natural Gas Distribution | $ | 4,882 |  | $ | 5,528 |  | $ | 79,564 |  | $ | 76,937 |
Energy Services | (8,628 | ) | 2,097 |  | 90,153 |  | 21,479 |
Clean Energy Ventures | 3,865 |  | (1,381 | ) | 20,286 |  | 9,078 |
Midstream | 1,896 |  | 1,541 |  | 5,584 |  | 5,600 |
Subtotal | 2,015 |  | 7,785 |  | 195,587 |  | 113,094 |
Retail and Other | 2,485 |  | 1,944 |  | 708 |  | 813 |
Eliminations | 14 |  | 9 |  | — |  | (12 | )
Total | $ | 4,514 |  | $ | 9,738 |  | $ | 196,295 |  | $ | 113,895 |
Capital expenditures |  |  |  |
Natural Gas Distribution | $ | 38,186 |  | $ | 29,141 |  | $ | 109,071 |  | $ | 94,840 |
Clean Energy Ventures | 46,166 |  | 14,891 |  | 91,569 |  | 39,756 |
Subtotal | 84,352 |  | 44,032 |  | 200,640 |  | 134,596 |
Retail and Other | 159 |  | 234 |  | 636 |  | 532 |
Total | $ | 84,511 |  | $ | 44,266 |  | $ | 201,276 |  | $ | 135,128 |
The chief operating decision maker of the Company is the Chief Executive Officer who uses NFE as a measure of profit or loss in measuring the results of the Company's segments and operations. A reconciliation of consolidated NFE to consolidated net income is as follows:
| Three Months Ended | Nine Months Ended
| June 30, | June 30,
(Thousands) | 2014 | 2013 | 2014 | 2013
Consolidated net financial earnings | $ | 4,514 |  | $ | 9,738 |  | $ | 196,295 |  | $ | 113,895 |
Less: |  |  |  |
Unrealized (gain) loss from derivative instruments and related transactions (1) | (6,585 | ) | (44,148 | ) | 45,811 |  | (23,682 | )
Effects of economic hedging related to natural gas inventory | 38,139 |  | 13,440 |  | (3,409 | ) | (9,425 | )
Tax adjustments | (12,766 | ) | 11,291 |  | (12,497 | ) | 12,172 |
Consolidated net (loss) income | $ | (14,274 | ) | $ | 29,155 |  | $ | 166,390 |  | $ | 134,830 |
(1) | Excludes unrealized (gains) losses related to an intercompany transaction between NJNG and NJRES that have been eliminated in consolidation of approximately $(327,000) and $(708,000) for the three months ended and $345,000 and $(398,000) for the nine months ended June 30, 2014 and 2013, respectively.
The Company uses derivative instruments as economic hedges of purchases and sales of physical gas inventory. For GAAP purposes, these derivatives are recorded at fair value and related changes in fair value are included in reported earnings. Revenues and cost of gas related to physical gas flow is recognized as the gas is delivered to customers. Consequently, there is a mismatch in the timing of earnings recognition between the economic hedges and physical gas flows. Timing differences occur in two ways:
• | 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.
NFE is a measure of the earnings based on eliminating these timing differences, to effectively match the earnings effects of the economic hedges with the physical sale of gas. Consequently, to reconcile between GAAP and NFE, current period unrealized gains and losses on the derivatives are excluded from NFE as a reconciling item. Additionally, realized derivative gains and losses are also included in current period net income. However, NFE includes only realized gains and losses related to natural gas sold out of inventory, effectively matching the full earnings effects of the derivatives with realized margins on physical gas flows. NJR also calculates a quarterly tax adjustment based on an estimated annual effective tax rate for NFE purposes. The Company's assets for the various business segments and business operations are detailed below:
(Thousands) | June 30, 2014 | September 30, 2013
Assets at end of period: |  |
Natural Gas Distribution | $ | 2,123,260 |  | $ | 2,094,940 |
Energy Services | 463,597 |  | 468,096 |
Clean Energy Ventures | 362,240 |  | 253,663 |
Midstream | 153,214 |  | 153,536 |
Subtotal | 3,102,311 |  | 2,970,235 |
Retail and Other | 85,148 |  | 85,293 |
Intercompany assets (1) | (81,552 | ) | (50,745 | )
Total | $ | 3,105,907 |  | $ | 3,004,783 |
(1) | Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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