11-K 1 a401kdec2017.htm 11-K DECEMBER 31, 2017 Document



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 11-K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______


COMMISSION FILE NUMBER 001-8359

NEW JERSEY RESOURCES CORPORATION
EMPLOYEES’ RETIREMENT SAVINGS PLAN


NEW JERSEY RESOURCES CORPORATION



1415 Wyckoff Road
Wall, New Jersey 07719










NEW JERSEY RESOURCES CORPORATION EMPLOYEES’ RETIREMENT SAVINGS PLAN


TABLE OF CONTENTS



 
Page
 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
 
 
FINANCIAL STATEMENTS:
 
 
 
Statements of Net Assets Available for Benefits
 
 
Statements of Changes in Net Assets Available for Benefits
 
 
Notes to Financial Statements
4 - 11
 
 
SUPPLEMENTAL SCHEDULE
 
 
 
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year)
 
 
SIGNATURES

 
 
EXHIBIT INDEX - 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 
 



All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.





















i






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Trustee and Participants of
New Jersey Resources Corporation
Employees’ Retirement Savings Plan

Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of New Jersey Resources Corporation Employees’ Retirement Savings Plan (the “Plan”) as of December 31, 2017 and 2016, and the related statements of changes in net assets available for benefits for the years then ended and the related notes (collectively, the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2017 and 2016, and the changes in net assets available for benefits for the years then ended in the conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Supplemental Information
The supplemental information in the accompanying schedule of assets (held at end of year) as of December 31, 2017 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/Baker Tilly Virchow Krause, LLP

Iselin, New Jersey

We have served as the Plan’s auditors since 2006

June 14, 2018

1



NEW JERSEY RESOURCES CORPORATION
 
 
 
EMPLOYEES’ RETIREMENT SAVINGS PLAN
 
 
 
 
 
 
 
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
 
 
 
AS OF DECEMBER 31, 2017 AND 2016
 
 
 
 
 
 
 
 
2017
 
2016
ASSETS
 
 
 
 
 
 
 
Investments, at Fair Value
$
224,261,746

 
$
190,360,541

 
 
 
 
Receivables:
 
 
 
Employer contributions
958,624

 
780,812

Participant contributions
4,905

 
—

Notes receivable from participants
4,159,788

 
4,232,060

Total receivables
5,123,317

 
5,012,872

 
 
 
 
Total Assets
229,385,063

 
195,373,413

 
 
 
 
LIABILITIES
—

 
—

 
 
 
 
NET ASSETS AVAILABLE FOR BENEFITS
$
229,385,063

 
$
195,373,413



































The accompanying notes are an integral part of these financial statements.

2



NEW JERSEY RESOURCES CORPORATION
 
 
 
EMPLOYEES’ RETIREMENT SAVINGS PLAN
 
 
 
 
 
 
 
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
 
 
FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016
 
 
 
 
 
 
 
 
2017
 
2016
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
 
 
 
 
 
 
 
Investment income:
 
 
 
Dividends
$
7,978,131

 
$
6,451,969

Net appreciation in fair value of investments
23,315,335

 
9,339,706

Net investment income
31,293,466

 
15,791,675

 
 
 
 
Interest income from notes receivable from participants
188,877

 
176,218

 
 
 
 
Contributions:
 
 
 
Employer
3,993,390

 
3,614,293

Participants
8,236,705

 
7,606,377

Participant rollovers
246,830

 
440,526

Total contributions
12,476,925

 
11,661,196

 
 
 
 
Total additions
43,959,268

 
27,629,089

 
 
 
 
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
 
 
 
 
 
 
 
Benefits paid to participants
9,826,831

 
8,872,411

Administrative fees
120,787

 
22,213

 
 
 
 
Total deductions
9,947,618

 
8,894,624

 
 
 
 
INCREASE IN NET ASSETS
34,011,650

 
18,734,465

 
 
 
 
NET ASSETS AVAILABLE FOR BENEFITS:
 
 
 
BEGINNING OF YEAR
195,373,413

 
176,638,948

END OF YEAR
$
229,385,063

 
$
195,373,413















The accompanying notes are an integral part of these financial statements.

3


NEW JERSEY RESOURCES CORPORATION
EMPLOYEES’ RETIREMENT SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

1.
PLAN DESCRIPTION

The New Jersey Resources Corporation Employees’ Retirement Savings Plan (the Plan) is administered through a Benefits Administration Committee (the Plan Administrator) appointed by New Jersey Resources Corporation’s (the Company, NJR or the Sponsor) Board of Directors and is administered in accordance with the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.

The following description of the Plan is provided for general information only. Participants should refer to the Plan document for more complete information.

The Plan is a defined contribution plan. The Plan provides a savings component and had provided an employee stock ownership plan component, as described below.

Savings Component

General

The savings component provides for deferred pre-tax contributions, after-tax contributions, catch-up contributions, an employer special contribution and Company matching contributions.

All permanent employees of the Company and its subsidiaries who have completed 30 days of service are eligible to participate on a voluntary basis. Eligible employees are automatically enrolled in the plan and their pre-tax contributions are automatically escalated each year up to 6 percent. Payroll deductions begin with the first available pay period following the completion of 30 days of service, unless the employee elects not to participate.

Contributions and Vesting

As directed by the Plan Administrator, contributions by employees and the Company are transferred to T. Rowe Price (the Trustee) and held in the Plan’s trust fund for investment and allocation to participants’ accounts.

Employee Contributions

Under the savings component, eligible employees may make contributions of between 1 percent and 50 percent of base compensation, as defined by the Plan, which shall be permitted as either pre-tax or after-tax contributions provided that they are within the calendar year elective deferral limit in effect for 401(k) contributions in accordance with the Internal Revenue Code (IRC). The elective deferral limit for pre-tax contributions was $18,000 for both 2017 and 2016. In addition, employees who have both reached the minimum age of 50 and the elective deferral limit by the end of the plan year, may elect to make pre-tax non-matchable catch-up contributions. During the plan years ended December 31, 2017 and 2016, the Internal Revenue Service allowed catch-up contributions of up to $6,000. The total contribution by any participant may not exceed $54,000 for 2017 and $53,000 for 2016, except for those who have attained age 50, and then the total contribution by participant may not exceed $60,000 and $59,000, respectively. Contributions by employees are made primarily through payroll deductions. The Plan also accepts qualified roll-over contributions from eligible employees. The participants’ contributions, plus actual earnings thereon, are fully vested at all times.

Employer Matching Contributions

For 2017 and 2016, the Company contributed an amount equal to 65 percent of the first 6 percent of the pre-tax and/or after-tax participant contributions, subject to certain exceptions as described in the Plan. The Company’s contribution related to those employees was approximately $3 million and $2.8 million for 2017 and 2016, respectively.

Employer Special Contributions

Non-transition union employees of NJR Home Services, an affiliated company, all union employees hired on or after January 1, 2012, and all non-represented employees hired on or after October 1, 2009, are not covered by the Company’s

4


defined benefit plans. For these employees, the Company contributes an amount equal to 3 percent of base compensation for employees with less than five years but more than one year of service and 4 percent of base compensation for employees with five or more years of service. Eligibility begins after one year of employment, and the contribution is made by March 31 of the year following the completion of one year of employment. The Company contributed $385,560 and $331,068 related to the represented employees and $573,064 and $449,744 related to the non-represented employees for 2017 and 2016, respectively.

The employer special contribution for the represented employees stated herein is invested automatically into the Plan’s Stable Value Fund, and may subsequently be directed by the participant into the Plan’s qualified default investment. The annual contribution for the non-represented employees stated herein is invested automatically into the Plan’s default investment and may subsequently be directed by the participant into any of the other investment options available under the Plan. Effective March 28, 2016, the Plan’s default investment was changed from the T. Rowe Price Balanced Fund to various T. Rowe Price Retirement Year Funds, which are based on the participants’ year of birth.

Employer special contributions are not eligible for loans or in-service withdrawals and may only be distributed upon termination, retirement or death.

Vesting

Employer matching and special contributions vest on the basis of service as follows: 25 percent after two years, 50 percent after three years, 75 percent after four years, and 100 percent after five years. Contributions are subject to limitations. Employee contributions vest at 100 percent when made.

Payment of Benefits

Prior to retirement or termination of service with the Company, participants may withdraw their contributions from the Plan subject to certain limitations. Participants may not withdraw the Company’s contributions until they become vested. Withdrawal of participants’ pre-tax funds may generally be made only upon disability, hardship or the attainment of age 59-1/2.

Distributions made upon retirement or death may be made either in a lump sum or in equal installments over a period not to exceed five years. All other distributions are made in a lump sum payment.

Notes Receivable from Participants

The Plan may loan to a participant an amount that shall not exceed the lesser of 50 percent of the value of the vested portion of such participant’s account, or $50,000. The minimum participant loan must be for $1,000 and no participant may have more than two loans outstanding at any time. No loan shall be for a term of more than five years except for loans used to acquire the participant’s principal residence, which term shall not exceed ten years. The loans are secured by the balance in the participant’s account. Notes receivable from participants are valued at their principal balance plus accrued unpaid interest.

Principal and interest are paid ratably through payroll deductions. A participant may repay any such loan in full by check at any time in accordance with such rules as may be prescribed by the Plan Administrator. Payments of principal and interest on loans shall be credited to the participant’s account(s) from which the loan was funded and shall be reinvested in investment funds in accordance with the participant’s then current investment selection.

The interest rate for loans will be 1 percent above the prime rate reported in the Wall Street Journal or such other rate as is prescribed by the Plan Administrator based on periodic re-evaluations of the adequacy of such rate. The fixed rate of interest shall apply to the term of each loan. Interest rates ranged from 4.25 percent to 5.25 percent at December 31, 2017.

Participant Accounts

Individual accounts are maintained for each plan participant. Each participant’s account is credited with the participant’s contribution, Company’s matching contribution, employer special contributions, loan repayments, if applicable, and plan earnings, and charged with withdrawals and an allocation of plan losses and administrative expenses that are paid by the Plan. Allocations are based on participant earnings or account balances, or specific participant transactions, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.


5


Investments

Participants direct the investment of their contributions into various investment options offered by the Plan. Except as previously noted, Company contributions are invested at the same percentage in the same investment options as the participant directed investments, including NJR stock. The Plan currently offers various investment options for participants.

Forfeited Accounts

Forfeitures are used to reduce Company contributions. At December 31, 2017 and 2016, forfeited non-vested accounts balance totaled $5,632 and $3,468, respectively. During the years ended December 31, 2017 and 2016, Company contributions were reduced by $60,293 and $52,256, respectively, from forfeited, non-vested accounts.

Employee Stock Ownership Plan Component (ESOP)

General

The Plan’s ESOP, which is no longer available for participant contributions effective January 1, 1996, includes amounts held by the Plan Trustee in Company stock (NJR Common Stock). All participants’ respective shares of NJR Common Stock are 100 percent vested.

Payment of Benefits/Diversification

Distributions to ESOP participants may be made in the case of separation of service, and may be in the form of full shares of the Company’s common stock and cash in lieu of fractional shares. ESOP participants may also elect to receive their total distribution in cash. Effective January 1, 2006, ESOP participants were able to diversify all or part of their account balance into any of the other 401(k) plan investment options, including NJR Common Stock. If and when the participants make a transfer, they will be able to use these amounts for the allowable in-service withdrawals or participant loans.

Certain participants have the option to withdraw a portion of their ESOP accounts once a year after reaching age 55 and ten years of participation in the plan. This withdrawal option is offered annually to eligible participants until they reach age 59½.

In the event that a participant or beneficiary receives a distribution of shares of Company stock at a time when such Company stock is not readily tradable on an established market, then the following provisions shall apply:
The Company shall issue a “put option” to such participant or beneficiary. The put option shall provide the right to elect, at any time during the 60 day period following the date of such distribution or the first 60 days of the plan year immediately following the plan year in which the distribution is made, to sell such Company stock to the Company for an amount equal to the fair market value of such Company stock as of the most recent valuation date. The put option provision applies to both the ESOP and the NJR 401K stock.

Voting Rights

Each participant shall have the right, to the extent of the Company stock allocated to his accounts, to direct the Trustee by proxy, as to the manner in which to vote his shares on all matters shareholders of Company stock are entitled to vote. Best efforts must be utilized to distribute or cause to be distributed to each participant such information and proxy statements as will be distributed to shareholders of the Company. Unallocated shares of common stock, if any, held by the Trustee shall be voted by the Trustee in the same manner and in the same proportion as are those shares that are allocated to the accounts of the participants and the Trustee shall have no discretion in this matter. The Trustee shall not divulge to the Company the voting of any participant. The voting rights provision applies to both the ESOP and the NJR 401K stock. There were no unallocated NJR common stock shares as of December 31, 2017 and 2016.

Investment Income

The following amounts related to the ESOP were included in dividend income and net appreciation in fair value of investments, respectively, for the years ended December 31:
 
2017
 
2016
Dividend income
$
979,416

 
$
944,031

Net appreciation in fair value of investments
$
4,587,180

 
$
2,475,929


6


2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying financial statements have been prepared on the accrual basis of accounting.

Valuation of Investments and Income Recognition

The Plan’s investments are presented at fair value, which has been determined based on quoted market prices. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3 for discussion of fair value measurements.

Purchases and sales of securities are recorded on a trade date basis. Dividend income is recorded on the ex-dividend date; interest income is recorded as earned. Net appreciation includes gains and losses on investments bought and sold as well as held during the year.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Administrative Expenses

Administrative expenses of the Plan were paid for by the Plan to the extent that they were not paid for by the Company.

In determining the amount of administrative expenses incurred by the Plan, T. Rowe Price provides the Plan with a fixed annual administrative budget that is measured by the rate of administrative fee payments for certain plan investment options. T. Rowe Price credits the Plan's Administrative Budget after each calendar quarter for administrative fee payments that exceed the established fee threshold, as defined. To the extent that the administrative fee payments payable to T. Rowe Price for any quarter do not meet the fixed annual administrative budget amount, the difference is owed to T. Rowe Price by the Plan and/or Plan Sponsor.

For the plan years 2017 and 2016, T. Rowe Price contributed $69,729 and $52,632, respectively, to the Plan’s administrative budget account. During the year ended December 31, 2017, the Plan used $96,157 of the administrative budget to off-set Plan expenses. The Plan did not use the administrative budget to off-set Plan expenses during the year ended December 31, 2016. As of December 31, 2017 and 2016, the balances of the administrative budget accounts were $91,434 and$117,282, respectively.

Payment of Benefits

Benefit payments to participants are recorded when paid.

3.    FAIR VALUE MEASUREMENTS

The Plan measures its investments at fair value on a recurring basis in accordance with accounting principles generally accepted in the United States of America. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The framework that the authoritative guidance establishes for measuring fair value includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs used in determining valuations into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement.

The levels of the fair value hierarchy are as follows:
Level 1
Fair Value is based on unadjusted quoted prices in active markets that are accessible to the Plan for identical assets. These generally provide the most reliable evidence and are used to measure fair value whenever available.
 
 
Level 2
Fair Value is based on significant inputs, other than Level 1 inputs, that are observable either directly or indirectly for substantially the full term of the asset through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets or liabilities, quoted market prices in inactive markets for identical or similar assets, and other observable inputs.
 
 
Level 3
Fair Value would be based on significant unobservable inputs.

7


Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2017 and 2016.

Mutual Funds

The Plan’s mutual funds are open-ended public investment vehicles, consisting of equity or fixed income securities. Mutual funds are valued at quoted market prices in active markets at year end. These investments are categorized within Level 1 of the hierarchy.

Stable Value Fund

Investments in common collective trusts during the plan year included the T. Rowe Price Stable Value fund (Stable Value Fund). Net Asset Value (NAV) per share for the Stable Value Fund is provided by the fund administrator and is based on the value of the underlying assets owned by the fund, minus liabilities, and then divided by the number of shares outstanding. NAV is computed daily as of the close of business each day by the Trustee for the fund. NAV is used as a practical expedient to estimate fair value. Participants’ withdrawals are unrestricted and are permitted daily at unit value. A full redemption of the Stable Value Fund by the Plan Sponsor may be subject to a holding period if sufficient liquidity does not exist.

NJR Stock

Participants can direct their contributions into NJR stock. In addition, as noted above, the Plan’s ESOP holds NJR stock. NJR Stock shares, which are valued at quoted market prices in active markets at year end, are categorized within Level 1 of the hierarchy.

The following tables summarize instruments measured at fair value on a recurring basis for the Plan:
 
Quoted Market Prices in Active Markets for Identical Assets
Other Significant Observable Inputs
Significant Unobservable Inputs
 
 
 
(Level 1)
 
 
(Level 2)
 
 
(Level 3)
 
Total
As of December 31, 2017:
 
 
 
 
 
 
 
 
 
 
Mutual funds
 
$
128,340,866

 
 
$
—

 
 
$
—

 
$
128,340,866

NJR stock
 
70,313,679

 
 
—

 
 
—

 
70,313,679

Total assets in the fair value hierarchy
 
198,654,545

 
 
—

 
 
—

 
198,654,545

Investments measured at net asset value (1)
 
—

 
 
—

 
 
—

 
25,607,201

Total investments at fair value
 
$
198,654,545

 
 
$
—

 
 
$
—

 
$
224,261,746

As of December 31, 2016:
 
 
 
 
 
 
 
 
 
 
Mutual funds
 
$
101,617,946

 
 
$
—

 
 
$
—

 
$
101,617,946

NJR stock
 
63,480,762

 
 
—

 
 
—

 
63,480,762

Total assets in the fair value hierarchy
 
165,098,708

 
 
—

 
 
—

 
165,098,708

Investments measured at net asset value (1)
 
—

 
 
—

 
 
—

 
25,261,833

Total investments at fair value
 
$
165,098,708

 
 
$
—

 
 
$
—

 
$
190,360,541

(1)
In accordance with Subtopic 820-10, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the Statement of Net Assets Available for Benefits.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. During the years ended December 31, 2017 and 2016, there were no transfers between levels.

The following table summarizes investments for which fair value is measured using NAV per share practical expedient as of December 31, 2017 and 2016, respectively. There are no participant redemption restrictions for these investments; the redemption notice period is applicable only to the Plan.
 
Fair Value
Unfunded Commitments
Redemption Frequency (if Currently Eligible)
Redemption Notice Period
As of December 31, 2017:
 
 
 
 
Stable Value Fund
$
25,607,201

n/a
Daily
12 months
 
 
 
 
 
As of December 31, 2016:
 
 
 
 
Stable Value Fund
$
25,261,833

n/a
Daily
12 months

8


4.
INVESTMENTS

The Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by approximately $23.3 million and $9.3 million during the years ended December 31, 2017 and 2016, respectively.

Non-Participant Directed Investments

Information about the net assets at fair value and the significant components of the changes in net assets relating to the non-participant-directed investments as of December 31, 2017 and 2016, and for the years then ended is as follows:
Net assets:
2017
 
2016
NJR Common Stock ESOP
$
36,668,404

 
$
33,870,481

T. Rowe Price Stable Value Fund
1,627,830

 
1,376,964

T. Rowe Price Retirement Year Funds
1,372,340

 
778,353

Total non-participant directed investments
$
39,668,574

 
$
36,025,798

 
 
 
 
Changes in net assets:
 
 
 
 
 
 
 
NJR Common Stock ESOP
 
 
 
Dividend income
$
979,416

 
$
944,031

Net appreciation in fair value of investments
4,587,180

 
2,475,929

Benefits paid to participants
(2,463,087
)
 
(1,153,568
)
Transfers to participant-directed investments
(305,586
)
 
(597,400
)
Net change
2,797,923

 
1,668,992

NJR Common Stock ESOP - beginning of year
33,870,481

 
32,201,489

NJR Common Stock ESOP - end of year
$
36,668,404

 
$
33,870,481

T. Rowe Price Stable Value Fund
 
 
 
Net appreciation in fair value of investments
$
29,613

 
$
23,807

Employer contributions
331,068

 
279,091

Benefits paid to participants
(109,778
)
 
(56,548
)
Administrative expenses
(37
)
 
(20
)
Net change
250,866

 
246,330

T. Rowe Price Stable Value Fund - beginning of year
1,376,964

 
1,130,634

T. Rowe Price Stable Value Fund - end of year
$
1,627,830

 
$
1,376,964

 
 
 
 
T. Rowe Price Balanced Fund
 
 
 
Net depreciation in fair value of investments
$
—

 
$
(1,178
)
Employer contributions
—

 
291,840

Benefits paid to participants
—

 
(764,406
)
Net change
—

 
(473,744
)
T. Rowe Price Balanced Fund - beginning of year
—

 
473,744

T. Rowe Price Balanced Fund - end of year
$
—

 
$
—

 
 
 
 
T. Rowe Price Retirement Year Funds
 
 
 
Net appreciation in fair value of investments
$
211,020

 
$
61,876

Employer contributions
449,745

 
—

Transfers
(28,078
)
 
732,245

Benefits paid to participants
(38,700
)
 
(15,768
)
Net change
593,987

 
778,353

T. Rowe Price Retirement Year Funds - beginning of year
778,353

 
—

T. Rowe Price Retirement Year Funds - end of year
$
1,372,340

 
$
778,353


5.
FEDERAL INCOME TAX STATUS

The Internal Revenue Service (IRS) has determined and informed the Company by a letter dated December 18, 2013, that the Plan and related trust were designed as “qualified” in accordance with the applicable sections of the IRC. Although the Plan has been amended since the receipt of the determination letter, the Plan Administrator and the Plan’s

9


tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC, and that the Plan and the related trust continue to be tax-exempt.

Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the organization has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.

6.
RISKS AND UNCERTAINTIES

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefit.

As of December 31, 2017 and 2016, the Plan had approximately $95.9 million and $88.7 million, respectively, that was concentrated in three investments.

7.
PLAN TERMINATION

Although it has not expressed any intention to do so, the Company has the right under the Plan to discontinue its matching contributions, as well as the special contributions, at any time and to terminate the Plan subject to the provisions set forth in ERISA. In the event that the Plan is terminated, participants would become 100 percent vested in their accounts, including unvested Company contributions.

8.
RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

The financial statements have been prepared on the accrual basis in conformity with generally accepted accounting principles in the United States of America. The Form 5500 is presented on the cash basis.

The following are reconciliations of net assets available for benefits and increase in net assets per the financial statements to the Form 5500 for the years ended December 31:
 
2017
 
2016
Net assets available for benefits per the financial statements
$
229,385,063

 
$
195,373,413

Less: Amounts due from employer per the financial statements
(958,624
)
 
(780,812
)
Less: Amounts due from participants per the financial statements
(4,905
)
 
—

Net assets available for benefits per Form 5500
$
228,421,534

 
$
194,592,601

 
 
 
 
Contributions received from employer per the financial statements
$
3,993,390

 
$
3,614,293

Less: Current year contributions receivable from employer per the financial statements
(958,624
)
 
(780,812
)
Add: Prior year contributions receivable from employer per the financial statements
780,812

 
570,932

Contributions received from employer per Form 5500
$
3,815,578

 
$
3,404,413

 
 
 
 
Contributions received from participants per the financial statements
$
8,236,705

 
$
7,606,377

Less: Current year contributions receivable from participants per the financial statements
(4,905
)
 
—

Contributions received from participants per Form 5500
$
8,231,800

 
$
7,606,377

 
 
 
 
Increase in net assets per the financial statements
$
34,011,650

 
$
18,734,465

Less: Changes in amounts due from employer*
(177,812
)
 
(209,880
)
Less: Changes in amounts due from participants**
(4,905
)
 
—

Net income per Form 5500
$
33,828,933

 
$
18,524,585

*
Included in contributions from employer in Statements of Changes in Net Assets Available for Benefits.
**
Included in contributions from participants in Statements of Changes in Net Assets Available for Benefits.


10


9.
EXEMPT PARTY-IN-INTEREST TRANSACTIONS

Certain plan investments are shares of mutual funds managed by the Trustee of the Plan. T. Rowe Price is the Plan Trustee and certain plan assets are invested in the T. Rowe Price Common Trust Funds, the Plan also issues loans to participants, which are secured by the participants’ account balance. These transactions qualify as exempt party-in-interest transactions. Fees paid by the Plan to the Trustees amounted to $120,787 and $22,213 for the years ended December 31, 2017 and 2016, respectively.

At December 31, 2017 and 2016, the Plan held 1,749,097 and 1,788,190 shares of NJR Stock, respectively, with a fair value of approximately $70.3 million and $63.5 million, respectively. The Plan recorded dividend income from Company common stock of approximately $1.8 million and $1.7 million during the years ended December 31, 2017 and 2016, respectively.

Certain employees and officers of the Company, who may also be participants in the Plan, perform administrative services to the Plan at no cost to the Plan. These party-in-interest transactions are not deemed prohibited because they are covered by statutory or administrative exemptions from the IRC and ERISA’s rules on prohibited transactions.

11


NEW JERSEY RESOURCES CORPORATION
 
Plan Number 005
 
EMPLOYEES’ RETIREMENT SAVINGS PLAN
 
Tax ID Number 22-2376465
 
 
 
 
 
 
 
FORM 5500, SCHEDULE H, PART IV, LINE 4i---
 
 
 
 
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
 
 
 
AS OF DECEMBER 31, 2017
 
 
 
 
(a)
(b)
(c)
(d)
 
(e)
 
Lessor, or Similar Party Identity of Issue, Borrower
Description of Investment, Including Maturity Date, Rate of Interest, Collateral, and Par or Maturity Value
Cost
 
Current Value
 
 
 
 
 
 
 
Participant Directed:
 
 
 
 
*
T. Rowe Price Retirement 2005 Fund
Mutual Fund
$ **
 
$
8,677

*
T. Rowe Price Retirement 2010 Fund
Mutual Fund
                   **

 
522,189

*
T. Rowe Price Retirement 2015 Fund
Mutual Fund
**

 
1,555,015

*
T. Rowe Price Retirement 2020 Fund
Mutual Fund
**

 
5,835,173

*
T. Rowe Price Retirement 2025 Fund
Mutual Fund
**

 
6,936,159

*
T. Rowe Price Retirement 2030 Fund
Mutual Fund
**

 
7,807,318

*
T. Rowe Price Retirement 2035 Fund
Mutual Fund
**

 
5,733,024

*
T. Rowe Price Retirement 2040 Fund
Mutual Fund
**

 
2,614,055

*
T. Rowe Price Retirement 2045 Fund
Mutual Fund
**

 
2,365,261

*
T. Rowe Price Retirement 2050 Fund
Mutual Fund
**

 
1,569,053

*
T. Rowe Price Retirement 2055 Fund
Mutual Fund
**

 
985,904

*
T. Rowe Price Retirement 2060 Fund
Mutual Fund
**

 
98,560

*
T. Rowe Price Government Money Fund
Mutual Fund
**

 
136,314

 
Prudential Total Return Bond Fund Class Q
Mutual Fund
**

 
8,992,523

 
Harbor Capital Appreciation Fund
Mutual Fund
**

 
8,950,344

*
T. Rowe Price Stable Value Fund
Common Trust Fund
**

 
23,979,371

 
Vanguard Institutional Index
Mutual Fund
**

 
20,123,636

 
Vanguard Small Cap Index, Admiral
Mutual Fund
**

 
7,689,365

 
Vanguard Windsor II Fund
Mutual Fund
**

 
16,434,915

*
T. Rowe Price Small Cap Value Fund
Mutual Fund
**

 
7,743,492

 
American Funds Capital World Growth and Income Fund
Mutual Fund
**

 
11,654,167

 
Dodge & Cox International Stock Fund
Mutual Fund
**

 
9,213,388

*
NJR Common Stock 401(k)
Common Stock
**

 
33,645,275

 
 
 
 
 
 
 
Non-Participant Directed:
 
 
 
 
*
NJR Common Stock ESOP
Common Stock
23,163,431

 
36,668,404

*
T. Rowe Price Stable Value Fund
Common Trust Fund
1,627,830

 
1,627,830

*
T. Rowe Price Retirement 2010 Fund
Mutual Fund
13,298

 
13,944

*
T. Rowe Price Retirement 2015 Fund
Mutual Fund
25,326

 
27,127

*
T. Rowe Price Retirement 2020 Fund
Mutual Fund
46,709

 
51,726

*
T. Rowe Price Retirement 2025 Fund
Mutual Fund
179,867

 
203,423

*
T. Rowe Price Retirement 2030 Fund
Mutual Fund
301,727

 
348,013

*
T. Rowe Price Retirement 2035 Fund
Mutual Fund
210,921

 
245,543

*
T. Rowe Price Retirement 2040 Fund
Mutual Fund
92,703

 
107,832

*
T. Rowe Price Retirement 2045 Fund
Mutual Fund
119,299

 
138,800

*
T. Rowe Price Retirement 2050 Fund
Mutual Fund
96,731

 
112,806

*
T. Rowe Price Retirement 2055 Fund
Mutual Fund
102,824

 
119,202

*
T. Rowe Price Retirement 2060 Fund
Mutual Fund
3,549

 
3,918

 
 
 
 
 
 
*
Notes receivable from participants
Interest rates of 4.25% - 5.25%
—

 
4,159,788

 
 
 
 
 
 
 
 
 
$
25,984,215

 
$
228,421,534

*
Party-in-interest as defined by ERISA.
**
Cost information is not required for participant-directed investment and, therefore, is not included.

12


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.



 
 
 
New Jersey Resources Service Corporation
 
 
 
Employees’ Retirement Savings Plan



Date: June 14, 2018

 
 
 
By: /s/ Amanda Mullan
 
 
 
 
Amanda Mullan
 
 
 
 
Plan Administrator
 
 
 
 
 
 
 
 
 
/s/ Patrick Migliaccio
 
 
 
 
Patrick Migliaccio
 
 
 
 
Plan Sponsor
 


13


EXHIBIT INDEX

Exhibit Number

23.1    Consent of Independent Registered Public Accounting Firm - Baker Tilly Virchow Krause, LLP

14