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REPORTING SEGMENT AND OTHER OPERATIONS DATA | 6 Months Ended
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Mar. 31, 2024
Segment Reporting [Abstract] |
REPORTING SEGMENT AND OTHER OPERATIONS DATA | 14. 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: 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 operations during the three months ended March 31, 2024 and 2023, are as follows:
| Segments |  |  |  |
(Thousands) | NJNG | CEV | ES |  | S&T | Subtotal | HSO | Elims | Total
2024 |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |
External customers | $ | 462,863 |  | 9,325 |  | 148,604 |  | (1) | 22,369 |  | $ | 643,161 |  | 14,752 |  | — |  | $ | 657,913 |
Intercompany | $ | 338 |  | — |  | (3,742) |  |  | 673 |  | $ | (2,731) |  | 153 |  | 2,578 |  | $ | — |
Depreciation and amortization | $ | 27,464 |  | 6,931 |  | 56 |  | (2) | 6,218 |  | $ | 40,669 |  | 271 |  | (865) |  | $ | 40,075 |
Interest income (3) | $ | 517 |  | — |  | 143 |  |  | 2,518 |  | $ | 3,178 |  | 332 |  | (1,474) |  | $ | 2,036 |
Interest expense, net of capitalized interest | $ | 14,850 |  | 7,182 |  | 3,513 |  |  | 5,868 |  | $ | 31,413 |  | 208 |  | — |  | $ | 31,621 |
Income tax provision (benefit) | $ | 24,476 |  | (1,594) |  | 5,289 |  |  | 619 |  | $ | 28,790 |  | 520 |  | 4,637 |  | $ | 33,947 |
Equity in earnings of affiliates | $ | — |  | — |  | — |  |  | 85 |  | $ | 85 |  | — |  | 653 |  | $ | 738 |
Net financial earnings (loss) | $ | 107,095 |  | (5,616) |  | 37,644 |  |  | 1,981 |  | $ | 141,104 |  | 384 |  | (2,912) |  | $ | 138,576 |
Capital expenditures | $ | 97,710 |  | 11,317 |  | — |  |  | 13,523 |  | $ | 122,550 |  | 130 |  | — |  | $ | 122,680 |
2023 |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |
External customers | $ | 400,500 |  | 14,406 |  | 196,553 |  | (1) | 19,303 |  | $ | 630,762 |  | 13,265 |  | — |  | $ | 644,027 |
Intercompany | $ | 338 |  | — |  | 177 |  |  | 1,584 |  | $ | 2,099 |  | 183 |  | (2,282) |  | $ | — |
Depreciation and amortization | $ | 25,319 |  | 6,465 |  | 62 |  | (2) | 6,020 |  | $ | 37,866 |  | 224 |  | — |  | $ | 38,090 |
Interest income (3) | $ | 376 |  | — |  | 380 |  |  | 1,684 |  | $ | 2,440 |  | 734 |  | (938) |  | $ | 2,236 |
Interest expense, net of capitalized interest | $ | 13,879 |  | 7,316 |  | 2,749 |  |  | 6,128 |  | $ | 30,072 |  | 189 |  | — |  | $ | 30,261 |
Income tax provision (benefit) | $ | 23,924 |  | (3,005) |  | 5,916 |  |  | 596 |  | $ | 27,431 |  | 488 |  | 2,667 |  | $ | 30,586 |
Equity in earnings of affiliates | $ | — |  | — |  | — |  |  | 977 |  | $ | 977 |  | — |  | 154 |  | $ | 1,131 |
Net financial earnings (loss) | $ | 100,697 |  | (9,379) |  | 21,125 |  |  | 2,450 |  | $ | 114,893 |  | 813 |  | (3,396) |  | $ | 112,310 |
Capital expenditures | $ | 92,600 |  | 13,706 |  | — |  |  | 10,122 |  | $ | 116,428 |  | 760 |  | — |  | $ | 117,188 |
(1)Includes sales to Canada for the ES 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. Information related to the Company's various reporting segments and other operations during the six months ended March 31, 2024 and 2023, are as follows:
| Segments |  |  |  |
(Thousands) | NJNG | CEV | ES |  | S&T | Subtotal | HSO | Elims | Total
2024 |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |
External customers | $ | 755,956 |  | 44,620 |  | 249,405 |  | (1) | 45,556 |  | $ | 1,095,537 |  | 29,586 |  | — |  | $ | 1,125,123 |
Intercompany | $ | 675 |  | — |  | (4,875) |  |  | 1,348 |  | $ | (2,852) |  | 153 |  | 2,699 |  | $ | — |
Depreciation and amortization | $ | 54,381 |  | 13,853 |  | 113 |  | (2) | 12,380 |  | $ | 80,727 |  | 500 |  | (865) |  | $ | 80,362 |
Interest income (3) | $ | 1,095 |  | — |  | 271 |  |  | 4,888 |  | $ | 6,254 |  | 688 |  | (2,880) |  | $ | 4,062 |
Interest expense, net of capitalized interest | $ | 29,601 |  | 14,629 |  | 6,639 |  |  | 11,801 |  | $ | 62,670 |  | 424 |  | — |  | $ | 63,094 |
Income tax provision | $ | 35,132 |  | 1,537 |  | 12,800 |  |  | 1,651 |  | $ | 51,120 |  | 468 |  | 5,295 |  | $ | 56,883 |
Equity in earnings of affiliates | $ | — |  | — |  | — |  |  | 1,078 |  | $ | 1,078 |  | — |  | 1,320 |  | $ | 2,398 |
Net financial earnings (loss) | $ | 158,539 |  | 4,906 |  | 45,475 |  |  | 5,621 |  | $ | 214,541 |  | (216) |  | (3,305) |  | $ | 211,020 |
Capital expenditures | $ | 177,425 |  | 37,083 |  | — |  |  | 21,308 |  | $ | 235,816 |  | 1,486 |  | — |  | $ | 237,302 |
2023 |  |  |  |  |  |  |  |  |
Operating revenues |  |  |  |  |  |  |  |  |
External customers | $ | 757,909 |  | 27,198 |  | 509,952 |  | (1) | 45,017 |  | $ | 1,340,076 |  | 27,518 |  | — |  | $ | 1,367,594 |
Intercompany | $ | 675 |  | — |  | 8,560 |  |  | 2,708 |  | $ | 11,943 |  | 196 |  | (12,139) |  | $ | — |
Depreciation and amortization | $ | 50,209 |  | 12,041 |  | 119 |  | (2) | 11,962 |  | $ | 74,331 |  | 442 |  | — |  | $ | 74,773 |
Interest income (3) | $ | 789 |  | — |  | 649 |  |  | 3,085 |  | $ | 4,523 |  | 1,388 |  | (1,716) |  | $ | 4,195 |
Interest expense, net of capitalized interest | $ | 27,588 |  | 13,211 |  | 5,807 |  |  | 12,835 |  | $ | 59,441 |  | 311 |  | — |  | $ | 59,752 |
Income tax provision (benefit) | $ | 38,307 |  | (4,842) |  | 25,980 |  |  | 2,539 |  | $ | 61,984 |  | 705 |  | 875 |  | $ | 63,564 |
Equity in earnings of affiliates | $ | — |  | — |  | — |  |  | 1,886 |  | $ | 1,886 |  | — |  | 191 |  | $ | 2,077 |
Net financial earnings (loss) | $ | 155,361 |  | (12,961) |  | 73,658 |  |  | 8,693 |  | $ | 224,751 |  | 784 |  | (2,941) |  | $ | 222,594 |
Capital expenditures | $ | 174,671 |  | 57,699 |  | — |  |  | 29,841 |  | $ | 262,211 |  | 900 |  | — |  | $ | 263,111 |
(1)Includes sales to Canada for the ES 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. The Company's assets for the various reporting segments and business operations are detailed below:
| Segments |  |  | Intercompany |
(Thousands) | NJNG | CEV | ES | S&T | Subtotal | HSO | Assets (1) | Total
March 31, 2024 | $ | 4,527,458 |  | 1,124,392 |  | 104,094 |  | 1,012,899 |  | $ | 6,768,843 |  | 171,594 |  | (293,060) |  | $ | 6,647,377 |
September 30, 2023 | $ | 4,414,829 |  | 1,128,577 |  | 123,775 |  | 1,011,959 |  | $ | 6,679,140 |  | 171,275 |  | (312,919) |  | $ | 6,537,496 |
(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 reporting segments and other business operations, is the chief operating decision maker of the Company. A reconciliation of consolidated NFE to consolidated net income is as follows:
| Three Months Ended | Six Months Ended
| March 31, | March 31,
(Thousands) | 2024 | 2023 | 2024 | 2023
Net financial earnings | $ | 138,576 |  | $ | 112,310 |  | $ | 211,020 |  | $ | 222,594 |
Less: |  |  |  |
Unrealized loss (gain) on derivative instruments and related transactions | 25,457 |  | 13,971 |  | 20,057 |  | (17,532) |
Tax effect | (6,049) |  | (3,320) |  | (4,767) |  | 4,167 |
Effects of economic hedging related to natural gas inventory | (2,845) |  | (11,203) |  | (19,073) |  | 12,769 |
Tax effect | 676 |  | 2,662 |  | 4,533 |  | (3,035) |
Gain on equity method investment | — |  | (200) |  | — |  | (200) |
Tax effect | — |  | 50 |  | — |  | 50 |
NFE tax adjustment | 525 |  | 103 |  | 47 |  | 207 |
Net income | $ | 120,812 |  | $ | 110,247 |  | $ | 210,223 |  | $ | 226,168 |
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. Included in the tax effects are current and deferred income tax expense corresponding with the components of NFE. The Company also calculates a quarterly tax adjustment based on an estimated annual effective tax rate for NFE purposes.

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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/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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