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DEBT | 12 Months Ended
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Sep. 30, 2016
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) | 2016 | 2015
NJNG |  |  |
First mortgage bonds: | Maturity date: |  |
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 |
3.58% | Series QQ | March 13, 2024 | 70,000 |  | 70,000 |
4.61% | Series RR | March 13, 2044 | 55,000 |  | 55,000 |
2.82% | Series SS | April 15, 2025 | 50,000 |  | 50,000 |
3.66% | Series TT | April 15, 2045 | 100,000 |  | 100,000 |
3.63% | Series UU | June 21, 2046 | 125,000 |  | — |
Capital lease obligation-buildings | June 1, 2021 | 14,262 |  | 16,700 |
Capital lease obligation-meters | Various dates | 27,895 |  | 30,188 |
Less: Current maturities of long-term debt |  | (11,452 | ) | (11,138 | )
Total NJNG long-term debt | 738,550 |  | 618,595 |
NJR |  |  |
6.05% | Unsecured senior notes | September 24, 2017 | 50,000 |  | 50,000 |
2.51% | Unsecured senior notes | September 17, 2018 | 25,000 |  | 25,000 |
3.25% | Unsecured senior notes | September 17, 2022 | 50,000 |  | 50,000 |
3.48% | Unsecured senior notes | November 7, 2024 | 100,000 |  | 100,000 |
3.20% | Unsecured senior notes | August 18, 2023 | 50,000 |  | — |
3.54% | Unsecured senior notes | August 18, 2026 | 100,000 |  | — |
Less: Current maturities of long-term debt |  | (50,000 | ) | — |
Total NJR long-term debt | 325,000 |  | 225,000 |
Total long-term debt | $ | 1,063,550 |  | $ | 843,595 |
Annual long-term debt redemption requirements, excluding capital leases, as of September 30, are as follows:
(Millions) | NJNG | NJR
2017 | $ | — |  | $ | 50.0 |
2018 | $ | 125.0 |  | $ | 25.0 |
2019 | $ | — |  | $ | — |
2020 | $ | — |  | $ | — |
2021 | $ | — |  | $ | — |
Thereafter | $ | 582.8 |  | $ | 300.0 |
NJNG First Mortgage Bonds NJNG and Trustee, entered into the Mortgage Indenture, dated September 1, 2014, which secures all of the outstanding First Mortgage Bonds issued under the Old Mortgage Indenture. The 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 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 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 its equity to total capitalization ratio falls below 30 percent without regulatory approval. As of September 30, 2016, NJNG’s equity to total capitalization ratio is 53.2 percent and has the ability to issue up to $849 million of FMB under the terms of the Mortgage Indenture. NJNG has variable rate EDA Bonds with a total principal amount of $97 million and maturity dates ranging from September 2027 to August 2041. The EDA Bonds are not subject to optional tender while they bear interest at a LIBOR index rate. As of September 30, 2016, the interest rate on the EDA Bonds was .92 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 FMB 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. On April 15, 2015, NJNG issued $50 million of 2.82 percent senior notes due April 15, 2025, and $100 million of 3.66 percent senior notes due April 15, 2045, secured by FMB in the private placement market pursuant to a note purchase agreement entered into on February 12, 2015. The proceeds of the notes were used for general corporate purposes, to refinance or retire debt and to fund capital expenditure requirements. On June 21, 2016, NJNG entered into a Note Purchase Agreement, under which NJNG issued $125 million of its 3.63 percent senior notes due June 21, 2046. The notes are secured by an equal principal amount of NJNG’s FMB (series UU) issued under NJNG’s Mortgage Indenture. The proceeds of the notes will be used for general corporate purposes, including, but not limited to, refinancing or retiring short-term debt and funding capital expenditures. 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 $7.1 million, $7.2 million and $7.6 million for fiscal 2016, 2015 and 2014, 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 2016, 2015 and 2014, NJNG exercised early purchase options with respect to meter leases by making final principal payments of $1.9 million, $768,000 and $956,000, respectively. NJNG continues to evaluate this sale-leaseback program based on current market conditions. Contractual commitments for capital lease payments, as of the fiscal years ended September 30, are as follows:
(Millions) | Lease Payments |
2017 |  | $ | 13.2 |
2018 |  | 11.3 |
2019 |  | 8.5 |
2020 |  | 7.7 |
2021 |  | 4.7 |
Thereafter |  | 1.5 |
Subtotal |  | 46.9 |
Less: Interest component |  | (4.7 | )
Total |  | $ | 42.2 |
NJR Long-term Debt NJR has two unsecured, uncommitted private placement debt shelf note agreements. These debt shelf note agreements are 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. The notes issued under the Prudential Facility are guaranteed by certain unregulated subsidiaries of NJR. NJR has $50 million at 3.25 percent outstanding under this agreement, which will mature on September 17, 2022. On November 7, 2014, NJR issued another $100 million in senior notes at 3.48 percent under this facility 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 allowed NJR to issue senior notes to MetLife or certain of MetLife’s affiliates during a three-year issuance period that ended on September 26, 2016 and was not renewed. There were no notes outstanding under the expired 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, 2016, NJR had two series of notes outstanding under this agreement, $25 million at 1.94 percent, which matured 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. On March 22, 2016, NJR entered into a Note Purchase Agreement, under which the Company issued, on August 18, 2016, $50 million of the Company’s 3.2 percent senior notes due August 18, 2023, and $100 million of the Company’s 3.54 percent senior notes due August 18, 2026. The notes are not secured by assets, but are instead guaranteed by certain unregulated subsidiaries of the Company. The proceeds of the notes will be used for general corporate purposes, including working capital and capital expenditures. NJR had no long-term, variable-rate debt outstanding as of September 30, 2016 and 2015. A summary of NJR’s and NJNG’s short-term bank facilities as of September 30, are as follows:
(Thousands) | 2016 |  | 2015
NJR |  |  |
Bank revolving credit facilities: (1) | $ | 425,000 |  |  | $ | 425,000 |
Notes outstanding at end of period | $ | 121,700 |  |  | $ | 39,350 |
Weighted average interest rate at end of period | 1.43 | % |  | 1.17 | %
Amount available at end of period (2) | $ | 288,910 |  |  | $ | 369,176 |
Bank revolving credit facilities: (3) | $ | — |  |  | $ | 100,000 |
Amount available at end of period | $ | — |  |  | $ | 100,000 |
NJNG |  |  |
Bank revolving credit facilities: (4) | $ | 250,000 |  |  | $ | 250,000 |
Commercial paper outstanding at end of period | $ | — |  |  | $ | 27,000 |
Weighted average interest rate at end of period | — | % |  | 0.20 | %
Amount available at end of period (5) | $ | 249,269 |  |  | $ | 222,269 |
(1) | Committed credit facilities, which require commitment fees of .075 percent on the unused amounts.
(2) | Letters of credit outstanding total $14.4 million and $16.5 million as of September 30, 2016 and 2015, respectively, which reduces amount available by the same amount.
(3) | Uncommitted credit facilities, which require no commitment fees.
(4) | Committed credit facilities, which require commitment fees of .075 percent on the unused amounts.
(5) | Letters of credit outstanding total $731,000 as of September 30, 2016 and 2015, which reduces amount available by the same amount.
NJR Short-term Debt On September 28, 2015, NJR entered into a $425 million unsecured, committed credit facility scheduled to expire on September 28, 2020, subject to two mutual options for a one-year extension beyond that date. The NJR Credit Facility includes an accordion feature, which would allow NJR, in the absence of a default or event of default, to increase from time to time, with the existing or new lenders, the revolving credit commitments under the NJR Credit Facility in minimum $5 million increments up to a maximum of $100 million. 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, 2016, NJR has seven letters of credit outstanding totaling $14.4 million. Two letters of credit totaling $9.1 million are issued on behalf of NJRES and five letters of credit, which total $5.3 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’ letters of credit are used for margin requirements for natural gas transactions and expire on dates ranging from December 2016 to March 2017. 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 May 2017 to August 2017. On October 24, 2014, NJR entered into a $100 million uncommitted line of credit agreement, with Santander Bank, N.A., which expired on October 24, 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 has a $250 million, five-year, revolving, unsecured credit facility, which expires in May 2019. The 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, 2016, NJNG has two letters of credit outstanding for $731,000. NJNG’s letters of credit are used as collateral for remediation projects and expire on August 2017. 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.

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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 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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