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REPORTING SEGMENT AND OTHER OPERATIONS DATA
 3 Months Ended
Dec. 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 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 during the three months ended December 31, 2024 and 2023, are as follows:
Segments
(Thousands)NJNGCEVESS&TSubtotalHSOElimsTotal
2024
Operating revenues
External customers$333,428 26,406 86,308 26,586 $472,728 15,633 — $488,361 
Intercompany$337 — — 42 $379 161 (540)$— 
Depreciation and amortization$32,084 6,425 47 6,496 $45,052 277 — $45,329 
Interest income (2)
$637 — 34 2,456 $3,127 273 (1,345)$2,055 
Interest expense, net of capitalized interest$17,454 6,374 3,885 5,969 $33,682 209 — $33,891 
Income tax provision$18,261 14,141 2,769 1,489 $36,660 469 255 $37,384 
Equity in earnings of affiliates$— — — 961 $961 — 439 $1,400 
Net financial earnings (loss)$66,908 48,130 7,833 5,664 $128,535 615 (256)$128,894 
Capital expenditures$109,904 33,476 — 8,201 $151,581 289 — $151,870 
2023
Operating revenues
External customers$293,093 35,295 100,801 23,187 $452,376 14,834 — $467,210 
Intercompany$337 — (1,133)675 $(121)— 121 $— 
Depreciation and amortization$26,917 6,922 57 (1)6,162 $40,058 229 — $40,287 
Interest income (2)
$578 — 128 2,370 $3,076 356 (1,406)$2,026 
Interest expense, net of capitalized interest$14,751 7,447 3,126 5,933 $31,257 216 — $31,473 
Income tax provision (benefit)$10,656 3,131 7,511 1,032 $22,330 (52)658 $22,936 
Equity in earnings of affiliates$— — — 993 $993 — 667 $1,660 
Net financial earnings (loss)$51,444 10,522 7,831 3,640 $73,437 (600)(393)$72,444 
Capital expenditures$79,715 25,766 — 7,785 $113,266 1,356 — $114,622 
(1)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.
(2)Included in other income, net on the Unaudited Condensed Consolidated Statements of Operations.

The Company's assets for the various reporting segments and other business operations are detailed below:
SegmentsIntercompany
(Thousands)NJNGCEVESS&TSubtotalHSO
Assets (1)
Total
December 31, 2024$5,031,714 1,104,304 138,545 1,026,150 $7,300,713 142,143 (248,891)$7,193,965 
September 30, 2024$4,789,835 1,157,573 108,710 1,025,457 $7,081,575 159,444 (259,374)$6,981,645 
(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
December 31,
(Thousands)20242023
Net financial earnings$128,894 $72,444 
Less:
Unrealized loss (gain) on derivative instruments and related transactions6,368 (5,400)
Tax effect(1,513)1,282 
Effects of economic hedging related to natural gas inventory(9,527)(16,228)
Tax effect2,264 3,857 
NFE tax adjustment(17)(478)
Net income$131,319 $89,411 

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 and SRECs. 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.