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REPORTING SEGMENT AND OTHER OPERATIONS DATA | 12 Months Ended
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Sep. 30, 2024
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 business operations: NJNG consists of regulated energy and off-system, capacity and storage management operations; CEV consists of capital investments in clean energy projects; ES consists of unregulated wholesale and retail energy operations; S&T consists of the Company’s investments in natural gas transportation and storage facilities; the HSO business 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 business operations, as of September 30, is detailed below:
| Segments |  |  |  |
(Thousands) | NJNG | CEV | ES |  | S&T | Subtotal | HSO | Elims | Total
2024 |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |
External customers | $ | 1,018,482 |  | 130,563 |  | 490,266 |  | (1) | 94,851 |  | $ | 1,734,162 |  | 62,377 |  | — |  | $ | 1,796,539 |
Intercompany | $ | 1,350 |  | — |  | (4,875) |  |  | 1,358 |  | $ | (2,167) |  | 258 |  | 1,909 |  | $ | — |
Depreciation and amortization | $ | 112,492 |  | 27,869 |  | 205 |  | (2) | 24,900 |  | $ | 165,466 |  | 1,101 |  | — |  | $ | 166,567 |
Interest income (3) | $ | 2,448 |  | — |  | 452 |  |  | 10,172 |  | $ | 13,072 |  | 1,423 |  | (5,826) |  | $ | 8,669 |
Interest expense, net of capitalized interest | $ | 62,288 |  | 28,545 |  | 15,233 |  |  | 23,441 |  | $ | 129,507 |  | 768 |  | — |  | $ | 130,275 |
Income tax provision | $ | 31,793 |  | 11,406 |  | 33,331 |  |  | 4,551 |  | $ | 81,081 |  | 2,666 |  | 1,159 |  | $ | 84,906 |
Equity in earnings of affiliates | $ | — |  | — |  | — |  |  | 2,816 |  | $ | 2,816 |  | — |  | 2,483 |  | $ | 5,299 |
Net financial earnings | $ | 133,400 |  | 33,662 |  | 111,515 |  |  | 12,229 |  | $ | 290,806 |  | 26 |  | (4) |  | $ | 290,828 |
Capital expenditures | $ | 419,453 |  | 104,287 |  | — |  |  | 45,338 |  | $ | 569,078 |  | 2,241 |  | — |  | $ | 571,319 |
2023 |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |
External customers | $ | 1,011,284 |  | 124,131 |  | 681,446 |  | (1) | 88,700 |  | $ | 1,905,561 |  | 57,433 |  | — |  | $ | 1,962,994 |
Intercompany | $ | 1,349 |  | — |  | 10,170 |  |  | 4,159 |  | $ | 15,678 |  | 205 |  | (15,883) |  | $ | — |
Depreciation and amortization | $ | 102,326 |  | 25,320 |  | 221 |  | (2) | 24,185 |  | $ | 152,052 |  | 889 |  | — |  | $ | 152,941 |
Interest income (3) | $ | 1,713 |  | — |  | 1,119 |  |  | 6,957 |  | $ | 9,789 |  | 2,977 |  | (3,847) |  | $ | 8,919 |
Interest expense, net of capitalized interest | $ | 56,595 |  | 28,569 |  | 11,400 |  |  | 25,803 |  | $ | 122,367 |  | 647 |  | — |  | $ | 123,014 |
Income tax provision (benefit) | $ | 33,065 |  | (7,683) |  | 24,343 |  |  | 3,444 |  | $ | 53,169 |  | (1,477) |  | (2,417) |  | $ | 49,275 |
Equity in earnings of affiliates | $ | — |  | — |  | — |  |  | 3,126 |  | $ | 3,126 |  | — |  | 804 |  | $ | 3,930 |
Net financial earnings | $ | 131,414 |  | 44,458 |  | 68,517 |  |  | 12,835 |  | $ | 257,224 |  | 4,758 |  | (155) |  | $ | 261,827 |
Capital expenditures | $ | 390,394 |  | 107,303 |  | — |  |  | 40,916 |  | $ | 538,613 |  | 2,306 |  | — |  | $ | 540,919 |
2022 |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |
External customers | $ | 1,127,417 |  | 128,280 |  | 1,529,178 |  | (1) | 65,286 |  | $ | 2,850,161 |  | 55,818 |  | — |  | $ | 2,905,979 |
Intercompany | $ | 1,350 |  | — |  | 94 |  |  | 2,449 |  | $ | 3,893 |  | 364 |  | (4,257) |  | $ | — |
Depreciation and amortization | $ | 94,579 |  | 21,396 |  | 148 |  | (2) | 12,302 |  | $ | 128,425 |  | 824 |  | — |  | $ | 129,249 |
Interest income (3) | $ | 895 |  | — |  | 16 |  |  | 2,110 |  | $ | 3,021 |  | 944 |  | (1,249) |  | $ | 2,716 |
Interest expense, net of capitalized interest | $ | 46,394 |  | 21,968 |  | 4,725 |  |  | 12,097 |  | $ | 85,184 |  | 646 |  | — |  | $ | 85,830 |
Income tax provision | $ | 40,141 |  | 11,361 |  | 21,776 |  |  | 1,879 |  | $ | 75,157 |  | 1,059 |  | (21) |  | $ | 76,195 |
Equity in loss of affiliates | $ | — |  | — |  | — |  |  | 9,865 |  | $ | 9,865 |  | — |  | (1,688) |  | $ | 8,177 |
Net financial earnings | $ | 140,124 |  | 39,403 |  | 39,121 |  |  | 22,454 |  | $ | 241,102 |  | (781) |  | — |  | $ | 240,321 |
Capital expenditures | $ | 298,374 |  | 146,676 |  | — |  |  | 151,988 |  | $ | 597,038 |  | 1,390 |  | — |  | $ | 598,428 |
Return of capital from equity investees | $ | — |  | — |  | — |  |  | (5,479) |  | $ | (5,479) |  | — |  | — |  | $ | (5,479) |
(1)Includes sales to Canada for ES, which were $8.4M and $2.4M during the fiscal years ended September 30, 2023 and 2022, respectively. There were no sales to Canada for ES during the fiscal year ended September 30, 2024. (2)The amortization of acquired wholesale energy contracts is excluded above and is included in natural gas purchases - nonutility on the Consolidated Statements of Operations. (3)Included in other income, net on the Consolidated Statements of Operations. The Company’s assets at end of period for the various reporting segments and other business operations, as of September 30, are detailed below:
| Segments |  |  | Intercompany |
(Thousands) | NJNG | CEV | ES | S&T | Subtotal | HSO | Assets (1) | Total
2024 | $ | 4,789,835 |  | 1,157,573 |  | 108,710 |  | 1,025,457 |  | $ | 7,081,575 |  | 159,444 |  | (259,374) |  | $ | 6,981,645 |
2023 | $ | 4,414,829 |  | 1,128,577 |  | 123,775 |  | 1,011,959 |  | $ | 6,679,140 |  | 171,275 |  | (312,919) |  | $ | 6,537,496 |
2022 | $ | 4,030,686 |  | 1,015,065 |  | 333,064 |  | 999,520 |  | $ | 6,378,335 |  | 159,068 |  | (275,987) |  | $ | 6,261,416 |
(1)Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation. The CEO, who uses NFE as a measure of profit or loss in measuring the results of the Company’s reporting segments and other business operations, is the chief operating decision maker of the Company. A reconciliation of consolidated NFE to consolidated net income, as of September 30, is as follows:
(Thousands) | 2024 | 2023 | 2022
Net financial earnings | $ | 290,828 |  | $ | 261,827 |  | $ | 240,321 |
Less: |  |  |
Unrealized loss (gain) on derivative instruments and related transactions | 19,574 |  | (38,081) |  | (59,906) |
Tax effect | (4,652) |  | 9,050 |  | 14,248 |
Effects of economic hedging related to natural gas inventory | (18,192) |  | 34,699 |  | 19,939 |
Tax effect | 4,323 |  | (8,246) |  | (4,738) |
Gain on equity method investment | — |  | (300) |  | (5,521) |
Tax effect | — |  | (19) |  | 1,377 |
Net income | $ | 289,775 |  | $ | 264,724 |  | $ | 274,922 |
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 are 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 certain transactions associated with equity method investments, including impairment charges, which are non-cash charges, and return of capital in excess of the carrying value of our investment. These are considered unusual in nature and occur infrequently such that they 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.

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- Definition The entire disclosure for reporting segments including data and tables. 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