BUSINESS SEGMENT AND OTHER OPERATIONS DATA

12 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

BUSINESS SEGMENT AND OTHER OPERATIONS DATA

BUSINESS SEGMENT AND OTHER OPERATIONS DATA

NJR organizes its businesses based on its products and services as well as the regulatory environment. As a result, the Company manages the businesses through the following reportable segments and other operations: the Natural Gas Distribution segment consists of regulated energy and off-system, capacity and storage management operations; the Energy Services segment consists of unregulated wholesale energy operations; the Clean Energy Ventures segment consists of capital investments in distributed power projects; the Midstream segment consists of NJR's investments in natural gas transportation and storage facilities; and the Home Services and Other operations consist of heating, cooling and water appliance sales, installations and services, commercial real estate development, other investments and general corporate activities. Information related to the Company's various business segments and other operations is detailed below:

(Thousands)
Fiscal Years Ended September 30,	2015			2014			2013
Operating revenues
Natural Gas Distribution
External customers	$	781,970		$	819,415		$	787,987
Energy Services
External customers(1)	1,872,781			2,858,703			2,351,084
Intercompany	61,526			72,114			5,494
Clean Energy Ventures
External customers	32,513			14,575			11,988
Subtotal	2,748,790			3,764,807			3,156,553
Home Services and Other
External customers	46,723			45,452			47,009
Intercompany	1,980			1,235			945
Eliminations	(63,506		)	(73,349		)	(6,439		)
Total	$	2,733,987		$	3,738,145		$	3,198,068
Depreciation and amortization
Natural Gas Distribution	$	43,085		$	40,540		$	37,999
Energy Services	90			59			44
Clean Energy Ventures	17,297			11,295			8,477
Midstream	6			6			6
Subtotal	60,478			51,900			46,526
Home Services and Other	952			846			786
Eliminations	(31		)	(4		)	(2		)
Total	$	61,399		$	52,742		$	47,310
Interest income (2)
Natural Gas Distribution	$	336		$	999		$	653
Energy Services	438			222			1
Clean Energy Ventures	26			—			—
Midstream	977			950			1,065
Subtotal	1,777			2,171			1,719
Home Services and Other	217			1			2
Eliminations	(1,414		)	(950		)	(884		)
Total	$	580		$	1,222		$	837

(1) Includes sales to Canada, which accounted for 3.7, 3.3 and 5.9 percent of total operating revenues during fiscal 2015, 2014 and 2013, respectively.

(2) Included in other income, net on the Consolidated Statement of Operations.

(Thousands)
Fiscal Years Ended September 30,	2015			2014			2013
Interest expense, net of capitalized interest
Natural Gas Distribution	$	18,534		$	16,683		$	14,995
Energy Services	1,209			1,725			2,534
Clean Energy Ventures	7,635			5,300			3,387
Midstream	717			1,396			1,962
Subtotal	28,095			25,104			22,878
Home Services and Other	49			359			1,101
Eliminations	(423		)	—			—
Total	$	27,721		$	25,463		$	23,979
Income tax provision (benefit)
Natural Gas Distribution	$	39,544		$	39,374		$	35,399
Energy Services	39,043			26,458			10,516
Clean Energy Ventures	(26,968		)	(21,937		)	(17,711		)
Midstream	6,849			5,227			4,993
Subtotal	58,468			49,122			33,197
Home Services and Other	1,551			2,460			2,550
Eliminations	(295		)	258			(172		)
Total	$	59,724		$	51,840		$	35,575
Equity in earnings of affiliates
Midstream	$	17,487		$	14,078		$	13,868
Eliminations	(4,078		)	(3,546		)	(3,519		)
Total	$	13,409		$	10,532		$	10,349
Net financial earnings
Natural Gas Distribution	$	76,287		$	74,204		$	73,846
Energy Services	42,122			79,735			19,311
Clean Energy Ventures	20,101			12,654			10,060
Midstream	9,780			7,498			7,199
Subtotal	148,290			174,091			110,416
Home Services and Other	3,420			2,798			3,292
Eliminations	(207		)	(32		)	(27		)
Total	$	151,503		$	176,857		$	113,681
Capital expenditures
Natural Gas Distribution	$	168,875		$	152,566		$	137,083
Clean Energy Ventures	151,002			135,543			59,125
Subtotal	319,877			288,109			196,208
Home Services and Other	209			1,179			1,042
Total	$	320,086		$	289,288		$	197,250
Investments in equity investees
Midstream	5,780			555			—
Total	$	5,780		$	555		$	—

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:

(Thousands)	2015			2014			2013
Consolidated NFE	$	151,503		$	176,857		$	113,681
Less:
Unrealized (gain) loss on derivative instruments and related transactions	(38,681		)	28,534			(9,418		)
Effects of economic hedging related to natural gas inventory	(8,225		)	26,639			7,635
Tax adjustments	17,449			(20,286		)	655
Consolidated net income	$	180,960		$	141,970		$	114,809

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

• Unrealized gains and losses on derivatives are recognized in reported earnings in periods prior to physical 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 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 gas. Consequently, to reconcile between GAAP and NFE, current period unrealized gains and losses on the derivatives are excluded from NFE as a reconciling item. Additionally, 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 gas flows.

The Company's assets for the various business segments and business operations are detailed below:

(Thousands)	2015			2014			2013
Assets at end of period:
Natural Gas Distribution	$	2,331,060		$	2,143,684		$	2,094,940
Energy Services	269,718			457,080			468,096
Clean Energy Ventures	526,475			380,707			253,663
Midstream	182,184			153,891			153,536
Subtotal	3,309,437			3,135,362			2,970,235
Home Services and Other	94,206			82,413			85,293
Intercompany assets (1)	(64,605		)	(58,971		)	(50,745		)
Total	$	3,339,038		$	3,158,804		$	3,004,783

(1) Consists of transactions between subsidiaries that are eliminated and reclassified in consolidation.