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REPORTING SEGMENT AND OTHER OPERATIONS DATA
 9 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
REPORTING SEGMENT AND OTHER OPERATIONS DATA
15. REPORTING SEGMENT AND OTHER OPERATIONS DATA

The Company organizes its businesses based on a combination of factors, including its products and its regulatory environment. As a result, the Company manages its businesses through the following reporting segments and other operations: the Natural Gas Distribution segment consists of regulated energy and off-system, capacity and storage management operations; the Clean Energy Ventures segment consists of capital investments in clean energy projects; the Energy Services segment consists of unregulated wholesale and retail energy operations; the Storage and Transportation segment consists of the Company’s investments in natural gas transportation and storage facilities; the Home Services and Other operations consist of heating, cooling and water appliance sales, installations and services, other investments and general corporate activities.

Information related to the Company's various reporting segments and other operations is detailed below:
Three Months EndedNine Months Ended
June 30,June 30,
(Thousands)2021202020212020
Operating revenues
Natural Gas Distribution
External customers$127,626 $128,532 $633,522 $645,375 
Clean Energy Ventures
External customers13,381 13,396 26,227 25,603 
Energy Services
External customers (1)
202,516 133,740 889,631 816,003 
Intercompany(922)(197)4,009 1,656 
Storage and Transportation
External customers10,999 11,143 36,703 29,949 
Intercompany650 720 1,976 2,062 
Subtotal354,250 287,334 1,592,068 1,520,648 
Home Services and Other
External customers13,071 12,163 38,002 36,694 
Intercompany241 206 660 947 
Eliminations31 (729)(6,645)(4,665)
Total$367,593 $298,974 $1,624,085 $1,553,624 
Depreciation and amortization
Natural Gas Distribution$19,894 $18,269 $58,538 $53,186 
Clean Energy Ventures5,200 6,777 15,318 19,696 
Energy Services (2)
28 28 83 84 
Storage and Transportation2,443 2,513 7,447 6,591 
Subtotal27,565 27,587 81,386 79,557 
Home Services and Other260 265 747 761 
Eliminations(58)20 (156)(293)
Total$27,767 $27,872 $81,977 $80,025 
Interest income (3)
Natural Gas Distribution$90 $135 $248 $378 
Clean Energy Ventures— — 240 — 
Energy Services11 10 11 99 
Storage and Transportation350 463 1,895 3,245 
Subtotal451 608 2,394 3,722 
Home Services and Other129 157 388 856 
Eliminations(233)(618)(709)(2,524)
Total$347 $147 $2,073 $2,054 
(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 natural gas purchases - nonutility on the Unaudited Condensed Consolidated Statements of Operations.
(3)Included in other income, net on the Unaudited Condensed Consolidated Statements of Operations.
Three Months EndedNine Months Ended
June 30,June 30,
(Thousands)2021202020212020
Interest expense, net of capitalized interest
Natural Gas Distribution$8,667 $7,455 $26,647 $22,760 
Clean Energy Ventures4,998 5,070 15,298 14,397 
Energy Services240 517 1,495 2,680 
Storage and Transportation2,937 1,843 10,497 10,286 
Subtotal16,842 14,885 53,937 50,123 
Home Services and Other1,902 427 4,746 1,264 
Eliminations— (168)— (970)
Total$18,744 $15,144 $58,683 $50,417 
Income tax provision (benefit)
Natural Gas Distribution$889 $939 $24,878 $29,276 
Clean Energy Ventures(1,448)(384)(7,248)(8,352)
Energy Services(8,805)(8,909)26,445 (606)
Storage and Transportation(10,393)1,646 (8,874)3,453 
Subtotal(19,757)(6,708)35,201 23,771 
Home Services and Other415 (131)474 2,044 
Eliminations557 72 2,038 173 
Total$(18,785)$(6,767)$37,713 $25,988 
Equity in (loss) earnings of affiliates
Storage and Transportation$(88,615)$3,615 $(82,036)$11,200 
Eliminations(618)(402)(1,718)(1,009)
Total$(89,233)$3,213 $(83,754)$10,191 
Net financial earnings (loss)
Natural Gas Distribution$1,581 $11,968 $131,589 $142,160 
Clean Energy Ventures(4,926)(5,686)(24,072)(22,694)
Energy Services(12,527)(6,619)85,501 (9,254)
Storage and Transportation2,387 3,615 10,606 10,877 
Subtotal(13,485)3,278 203,624 121,089 
Home Services and Other(384)(582)301 675 
Eliminations(279)(14)(2,812)140 
Total$(14,148)$2,682 $201,113 $121,904 
Capital expenditures
Natural Gas Distribution$150,642 $88,171 $327,127 $238,010 
Clean Energy Ventures10,661 41,182 51,545 110,968 
Storage and Transportation22,479 8,575 50,186 16,284 
Subtotal183,782 137,928 428,858 365,262 
Home Services and Other244 1,962 1,055 1,977 
Total$184,026 $139,890 $429,913 $367,239 
Investments in equity investees
Storage and Transportation$208 $225 $690 $1,491 
Total$208 $225 $690 $1,491 
The Company's assets for the various business segments and business operations are detailed below:
(Thousands)June 30,
2021		September 30, 2020
Assets at end of period:
Natural Gas Distribution$3,617,354 $3,531,477 
Clean Energy Ventures851,755 814,277 
Energy Services273,460 244,836 
Storage and Transportation796,974 844,799 
Subtotal5,539,543 5,435,389 
Home Services and Other125,243 138,375 
Intercompany assets (1)
(256,168)(257,287)
Total$5,408,618 $5,316,477 
(1)Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.

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, is the chief operating decision maker of the Company. A reconciliation of consolidated NFE to consolidated net income is as follows:
Three Months EndedNine Months Ended
June 30,June 30,
(Thousands)2021202020212020
Net financial (loss) earnings$(14,148)$2,682 $201,113 $121,904 
Less:
Unrealized loss (gain) on derivative instruments and related transactions21,862 23,712 13,627 (21,827)
Tax effect(5,198)(5,639)(3,240)5,189 
Effects of economic hedging related to natural gas inventory2,486 4,739 (12,255)10,474 
Tax effect(591)(1,126)2,912 (2,489)
Impairment of equity method investment92,000 — 92,000 — 
Tax effect(11,934)— (11,934)— 
NFE tax adjustment(942)294 980 257 
Net (loss) income$(111,831)$(19,298)$119,023 $130,300 

The Company uses derivative instruments as economic hedges of purchases and sales of physical natural 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 natural gas related to physical natural gas flow is recognized when the natural gas is delivered to customers. Consequently, there is a mismatch in the timing of earnings recognition between the economic hedges and physical natural gas flows. Timing differences occur in two ways:

•unrealized gains and losses on derivatives are recognized in reported earnings in periods prior to physical natural 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 natural 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 natural gas, SRECs and foreign currency contracts. Consequently, to reconcile between net income and NFE, current period unrealized gains and losses on the derivatives are excluded from NFE as a reconciling item. 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 natural gas flows. NFE also excludes impairment charges associated with equity method investments, which are a non-cash charge considered unusual in nature that occur infrequently and are not indicative of the Company's performance for its ongoing operations. Included in the tax effects are current and deferred income tax expense corresponding with the components of NFE. NJR also calculates a quarterly tax adjustment based on an estimated annual effective tax rate for NFE purposes.