SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1993 Commission file number 1-8359
NEW JERSEY RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-2376465
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1415 Wyckoff Road, Wall, New Jersey - 07719 908-938-1480
(Address of principal executive offices) (Registrant's telephone number,
including area code)
Securities registered pursuant to Section 12 (b) of the Act
Common Stock - $2.50 Par Value New York Stock Exchange
(Title of each class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12 (g) of the Act
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES: X No:
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.
YES: X No:
The aggregate market value of the Registrant's Common Stock held by
non-affiliates was $435,505,928 based on the closing price of $26.00 per share
on December 1, 1993.
The number of shares outstanding of $2.50 par value Common Stock as of December
1, 1993 was 16,927,891.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Stockholders are incorporated by
reference into Part I and Part II of this report.
Portions of the Registrant's definitive Proxy Statement for the Annual Meeting
of Stockholders to be held January 26, 1994, are incorporated by reference into
Part I and Part III of this report.
<PAGE>
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This filing on Form 10-K/A amends the Annual Report on Form 10-K for the year
ended September 30, 1993 (Form 10-K) of New Jersey Resources Corporation (the
Company), including certain portions of the Company's 1993 Annual Report to
Stockholders which were previously incorporated in the Form 10-K. This
amendment is made in connection with a change in accounting principle to the
successful efforts method of accounting for oil and gas operations from the
full cost method by NJR Energy Corporation (NJR Energy), a wholly-owned
subsidiary of the Company. The successful efforts accounting method generally
requires that costs attributable to unsuccessful exploratory wells be expensed
in the period incurred. Under the full cost accounting method, all productive
and nonproductive costs related to exploration and development activity were
capitalized and subject to a "ceiling" test as calculated under the rules of
the Securities and Exchange Commission. Accordingly, the financial statements
and other financial information included in Form 10-K have been restated to
give effect to the change in accounting method. The cumulative impact of the
restatement at September 30, 1993 was to reduce retained earnings by $17.2
million and book value per share by $1.03. The impact on earnings per share
(EPS) for 1988 through 1993 is as follows:
1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ----
EPS, as previously $1.72 $1.64 $.83 $.97 $1.45 $1.67
reported
EPS, as restated $1.64 $1.55 $.61 $.68 $1.19 $1.44
<PAGE>
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The following Table of Contents sets forth the Items of the Form 10-K
(including certain Items which were previously incorporated by reference into
the Form 10-K from the Company's 1993 Annual Report to Stockholders) which are
hereby amended:
10-K/A
Page
------
PART II
Item 6 - Selected Financial Data 3
Item 7 - Management's Discussion and 4
Analysis of Financial Condition
and Results of Operations
Item 8 - Financial Statements and 12
Supplementary Data
PART IV
Item 14 - Exhibits, Financial Statement 26
Schedules and Reports on Form 8-K
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Item 6. Selected Financial Data is hereby amended and restated in its entirety
to read as follows as a result of a change in accounting principle as
discussed in Note 1 to the Consolidated Financial Statements:
<TABLE>
CONSOLIDATED FINANCIAL STATISTICS (A) New Jersey Resources Corporation
<CAPTION>
Income Statements (Thousands) 1993 1992 1991 1990 1989 1988
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues $454,746 $400,738 $335,593 $324,773 $329,881 $295,372
- --------------------------------------------------------------------------------------------------------------------
Operating Expenses
Gas purchases 252,041 205,920 168,042 165,185 178,172 159,114
Operation and Maintenance 61,707 59,719 59,378 56,559 49,285 44,717
Depreciation and amortization 25,405 23,918 23,460 20,713 16,085 13,722
Exploratory dry hole costs 2,017 2,184 2,689 3,513 4,374 3,101
Gross receipts tax,etc. 52,719 52,612 45,489 44,273 43,743 39,225
Federal income taxes 11,957 10,841 4,295 4,379 6,422 7,266
- --------------------------------------------------------------------------------------------------------------------
Total operating expenses 405,846 355,194 303,353 294,622 298,081 267,145
- --------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 48,900 45,544 32,240 30,151 31,800 28,227
GAIN ON SALE OF REAL ESTATE
PROPERTIES,NET - - - - - 840
OTHER INCOME, NET 713 574 (316) 43 392 54
INTEREST CHARGES,NET 20,429 21,407 22,518 20,174 17,728 14,298
- --------------------------------------------------------------------------------------------------------------------
INCOME BEFORE PREFERRED STOCK
DIVIDENDS OF SUBSIDIARY 29,184 24,711 9,406 10,020 14,464 14,823
Preferred stock dividends 2,022 2,464 1,012 948 962 976
- --------------------------------------------------------------------------------------------------------------------
NET INCOME AVAILABLE FOR COMMON STOCK $ 27,162 $ 22,247 $8,394 $ 9,072 $ 13,502 $ 13,847
====================================================================================================================
COMMON STOCK DATA
Earnings per share $1.64 $1.55 $.61 $.68 $1.19 $1.44
Dividends declared per share $1.52 $1.52 $1.50 $1.44 $1.36 $1.28
Payout ratio 93% 98% 246% 212% 114% 89%
Market price at year end $29.13 $22.38 $19.75 $18.00 $19.50 $19.63
Dividend yield at year end 5.2% 6.8% 7.7% 8.2% 7.2% 6.7%
Price-earnings ratio 17.81 14.42 32.35 26.54 16.38 13.63
Book value per share $13.69 $13.18 $11.80 $12.41 $12.95 $11.82
Market to book ratio at year end 2.13 1.70 1.67 1.45 1.51 1.66
Shares outstanding at year end (thousands) 16,820 16,286 13,965 13,520 13,181 10,925
Average shares outstanding (thousands) 16,607 14,334 13,750 13,378 11,343 9,615
Number of shareholder accounts 19,319 18,521 17,585 16,175 15,759 15,110
====================================================================================================================
RETURN ON AVERAGE EQUITY 11.7% 12.3% 4.9% 5.2% 9.4% 12.6%
====================================================================================================================
CAPITALIZATION
Common stock equity $230,313 $214,703 $164,731 $167,723 $170,649 $129,168
Redeemable preferred stock 22,340 32,610 32,880 13,150 13,420 13,690
Long-term debt 310,996 251,955 262,737 227,782 208,655 155,278
- --------------------------------------------------------------------------------------------------------------------
Total $563,649 $499,268 $460,348 $408,655 $392,724 $298,136
====================================================================================================================
PROPERTY, PLANT AND EQUIPMENT
Utility plant $637,580 $588,908 $552,519 $514,457 $457,812 $401,196
Accumulated depreciation (155,618) (141,364) (127,047) (114,153) (103,005) (93,313)
Real estate properties 102,369 99,522 96,832 90,979 81,261 59,386
Accumulated depreciation (10,660) (8,758) (7,577) (5,847) (4,236) (2,834)
Oil and gas properties 64,576 57,398 53,423 48,097 32,898 30,089
Accumulated amortization (32,597) (28,478) (24,241) (18,863) (14,372) (12,153)
- --------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net $605,650 $567,228 $543,909 $514,670 $450,358 $382,371
====================================================================================================================
CAPITAL EXPENDITURES
Utility plant $ 53,420 $ 37,864 $ 43,014 $ 54,776 $ 57,869 $ 54,007
Real estate properties 2,869 4,397 6,321 9,727 19,782 21,696
Oil and gas properties 9,216 5,333 8,016 18,712 7,162 8,299
- --------------------------------------------------------------------------------------------------------------------
Total $ 65,505 $ 47,594 $ 57,351 $ 83,215 $ 84,813 $ 84,002
====================================================================================================================
TOTAL ASSETS $738,662 $668,605 $651,861 $603,857 $528,382 $447,383
====================================================================================================================
(A) Restated to reflect the change in accounting principle by NJR Energy to the
successful efforts method for its oil and gas operations from the full cost
method.
<PAGE>
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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations is hereby amended and restated in its entirety
to read as follows as a result of a change in accounting principle
as discussed in Note 1 to the Consolidated Financial Statements:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF CONSOLIDATED OPERATIONS
Consolidated
Net income increased to a record $27.2 million during 1993, compared with
$22.2 million in 1992 and $8.4 million in 1991. The earnings increase in each
year was primarily the result of the impact of customer growth, base rate
increases and colder weather on New Jersey Natural Gas Company (NJNG), the
principal subsidiary of New Jersey Resources Corporation (the Company).
Earnings per share increased to $1.64 during 1993, compared with $1.55 in
1992 and $.61 in 1991, reflecting the increased net income, which more than
offset a 16% increase in the average number of shares outstanding in 1993. The
Company's return on average equity was 11.7% in 1993, compared with 12.3% in
1992 and 4.9% in 1991.
Dividends declared per share were $1.52 in 1993 and 1992 and $1.50 in 1991.
The earnings improvement resulted in the payout ratio being lowered to 93% in
1993, compared with 98% in 1992 and 246% in 1991.
Utility Operations
NJNG's financial results are summarized as follows:
- -----------------------------------------------------------------
(Thousands) 1993 1992 1991
- -----------------------------------------------------------------
Gross margin
Residential and commercial $133,773 $126,840 $108,219
JCP&L and other interruptible 932 441 517
Off system 1,753 1,589 151
- -----------------------------------------------------------------
Total gross margin 136,458 128,870 108,887
Operating expenses 79,685 77,486 74,683
Federal income taxes 14,001 11,968 6,366
Interest charges, net 13,590 13,973 14,730
Preferred dividends and other, net 1,631 2,244 1,274
- -----------------------------------------------------------------
Net income $27,551 $ 23,199 $ 11,834
=================================================================
Gross Margin
Gross margin, defined as gas revenues less gas costs and gross receipts and
franchise taxes (GRFT), provides a more meaningful basis for evaluating utility
operations since gas costs and GRFT are passed through to customers and,
therefore, have no effect on earnings. Gas costs are charged to operating
expenses on the basis of therm sales at the base and Levelized Gas Adjustment
(LGA) cost rates included in NJNG's tariff. The LGA clause allows NJNG to
recover gas costs that exceed the level reflected in its base rates.
Through December 1991, NJNG accrued approximately 14% of all revenues,
excluding sales to other utilities, for GRFT. As a result of changes in New
Jersey tax law, commencing in January 1992, GRFT is calculated on a per-therm
basis.
Residential and Commercial Sales
Through fiscal 1992, gross margin from firm (i.e., residential and
commercial) customers was weather-sensitive. In NJNG's June 1992 base rate
order, the BRC approved a weather-normalization clause on a two-year
experimental basis effective October 1, 1992. This clause provides for a
revenue adjustment if the weather varies by more than one-half of one percent
from normal, or 10-year average, weather. The accumulated adjustment from one
heating season (i.e., October-April) is billed or credited to customers in the
subsequent heating season.
<PAGE>
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The $6.9 million, or 5%, increase in gross margin in 1993 and the $18.6
million, or 17%, increase in gross margin in 1992 from sales to firm customers
were due primarily to customer growth, base rate increases and colder weather.
Therm sales to firm customers increased by 5% to 474 million in 1993,
compared with 452 million in 1992 and 387 million in 1991. The increase in
therm sales was due to continued customer growth and the weather, which was 4%
colder in 1993 and 19% colder in 1992, compared with the prior year.
NJNG added 9,306 and 7,907 new customers in 1993 and 1992, and converted the
heating systems of another 1,305 and 564 existing customers in each year,
respectively. In addition, NJNG converted 16 schools in 1993 and 29 schools in
1992, which equates to approximately 530 and 900 new residential customers,
respectively. The growth in 1993 represents an annual increase of
approximately 17.8 million therms, or 4%, in sales to firm customers. NJNG
remains one of the fastest-growing natural gas distribution utilities in the
country, and expects to maintain a customer growth rate of more than 3% in the
future.
NJNG received base rate increases of $2.2 million in June 1992 and $8.3
million in February 1991, which increased gross margin by $2.2 million in 1993
and by $4 million in 1992.
In 1994 and 1995, NJNG expects to add 11,500 and 11,000 new customers,
respectively, and convert to natural gas heat an additional 750 existing
customers each year. This would result in a sales increase of approximately 20
million therms per year, assuming normal weather and average use, and would
increase gross margin under present rates by $5.5 million per year. Future
therm sales will continue to be affected by weather, the economic conditions in
NJNG's service territory, conversion activity and other marketing efforts, as
well as the conservation efforts of NJNG's customers.
The weather in 1993 was 2.6% colder than normal which, due to the
aforementioned weather-normalization clause, resulted in a $1.5 million refund
that will be credited to customers in fiscal 1994.
If the weather had been normal in 1992 and 1991, net income would have been
higher by approximately $3 million, or $.21 cents per share, and $10.5 million,
or $.76 per share, respectively.
Interruptible Sales
NJNG services 36 customers through interruptible sales and/or transportation
tariffs and serves certain of these customers through agency sales agreements.
Sales made under the interruptible sales tariff are priced on market-sensitive
oil and gas parity rates. Interruptible therm sales were 38 million in 1993,
compared with 47 million in 1992 and 103 million in 1991. In addition, NJNG
transported 37 million therms in 1993, 22 million in 1992 and 19 million in
1991 for its interruptible customers.
Although therms sold and transported to interruptible customers represented
10% of total therm throughput in 1993 and 11% in 1992, they accounted for less
than 1% of the total gross margin in each year due primarily to the regulated
margin-sharing formulas that govern these sales. Under these formulas, NJNG
retained none of the gross margin from transportation sales through June 1992,
and 5% thereafter, and 10% of the gross margin under the interruptible sales
tariff with the balance credited to residential and commercial customers
through the LGA clause.
Off-System Sales
In order to reduce the overall cost of its gas supply commitments, NJNG has
entered into contracts to sell gas to customers who are not connected to its
distribution system. These sales enable NJNG to spread its fixed demand costs,
which are charged by pipelines to access their supplies year-round, over a
larger and more diverse customer base.
NJNG's off-system sales totaled 208 million therms and generated $1.8 million
of gross margin in 1993, compared with 118 million therms and $1.6 million of
gross margin in 1992 and 4 million therms and $151,000 of gross margin in 1991.
Off-system sales improved each year due primarily to increased marketing
efforts, while the margin per therm declined in 1993 due to a change in the
regulated margin-sharing formula and increased competition. Effective January
1993, NJNG retains 25% of the gross margin from off-system sales.
Operating Expenses
Operating expenses increased by $2.2 million, or 3%, in 1993 and $2.8
<PAGE>
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million, or 4%, in 1992. These increases were due primarily to higher payroll
costs, which reflected the impact of growth on operations, and higher
depreciation associated with the growing plant investment needed to support the
customer growth and general system expansion. Excluding depreciation,
operating expenses increased by only 1% in 1993 and 2% in 1992, reflecting cost
containment programs implemented by NJNG.
Interest Charges, Net
NJNG's average debt levels increased in 1993 and 1992 due to its ongoing
construction program, coupled with a reduction in cash flow due primarily to
the acceleration of GRFT payments as required by changes in New Jersey law.
The increased average debt levels, however, were more than offset by lower
interest rates and higher capitalized interest associated with its construction
program and accelerated GRFT payments. As a result, interest charges, net
decreased by $383,000, or 3%, and by $757,000, or 5%, in 1993 and 1992,
respectively.
Summary
The 19% increase in NJNG's earnings in 1993 reflected continued customer
growth, a base rate increase, colder weather and control of capital and
operation and maintenance expenses. As long as NJNG continues to incur the
additional capital and operating costs associated with customer growth and
general system renewal, it will experience short-term financial pressure. NJNG
also realizes that continuous base rate increases cannot be relied upon for
future earnings growth and is working with the BRC to implement an incentive-
based regulation proposal. Also, the weather-normalization clause reduces the
variability of both customer bills and NJNG's earnings due to weather
fluctuations.
NJNG will continue its cost control programs and aggressively pursue new
markets to diversify and improve its demand profile as it remains committed to
providing a proper return to its investors, without relying on base rate
increases.
Non-Utility Operations
In 1992, Paradigm Resources Corporation was formed as a sub-holding company
to better segregate the Company's utility and non-utility operations.
Real Estate Operations
The financial results of Commercial Realty & Resources Corp. (CR&R) are
summarized as follows:
(Thousands) 1993 1992 1991
- ----------------------------------------------------------------
Revenues $12,554 $12,530 $11,436
Operating expenses
Depreciation 1,924 1,834 1,752
Other 4,654 4,509 4,042
- ----------------------------------------------------------------
Operating income 5,976 6,187 5,642
Other (expense) income (116) 707 (23)
Interest charges, net 5,176 5,275 5,049
Federal income taxes 220 514 180
- ----------------------------------------------------------------
Net income $ 464 $ 1,105 $ 390
================================================================
Net Income Adjusted for Depreciation
In evaluating the results of real estate operations, it is appropriate to
analyze net income adjusted for depreciation, which better reflects the cash
flow being generated by income-producing properties. This approach is common
in the real estate industry since cash flow is generally used to evaluate asset
performance.
CR&R's 1993 results include the costs associated with the December 1992
redemption of the $2.1 million outstanding principal amount of its 12.75%
mortgage and its 1992 results include the gain on the sale of a construction
and lease contract. These items are included in "Other (expense) income"
above. Excluding the after-tax impact of these items, CR&R's net income
adjusted for depreciation decreased by less than 1% to $2.46 million in 1993
and increased by 15% to $2.47 million in 1992. The slight decrease in 1993 was
due primarily to higher expenses from winter storms, while the increase in 1992
was due primarily to an improved occupancy rate.
<PAGE>
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CR&R's completed space totaled 914,200 square feet in each of the past three
years. The occupancy rate of CR&R's total portfolio at year end improved to
97% in 1993 compared with 93% in 1992 and 87% in 1991. In addition, the
occupied space at September 30, 1993 was supported by leases having a remaining
average term of seven years, which provides a stable base of cash flow.
Interest Charges, Net
Interest charges, net decreased by 2% in 1993 due to lower interest rates,
including the impact of the aforementioned $2.1 million mortgage redemption,
which more than offset higher average debt levels. Interest charges, net
increased by 4% in 1992 due to higher levels of average debt associated with
the additional completed space, which more than offset lower interest rates.
Summary
CR&R believes that its high occupancy rate and stable base of cash flow will
enable it to meet its debt service requirements as it manages its existing
properties and considers various alternatives for the disposition of its real
estate assets. CR&R's ability to maintain its current earnings and cash flow
levels is dependent on several factors, including maintaining occupancy and
rental rates as its portfolio of leases is scheduled to roll-over.
Exploration and Production Operations
The financial results of NJR Energy Corporation (NJR Energy) are summarized
as follows:
(Thousands) 1993 1992 1991
- --------------------------------------------------------------
Revenues
Exploration and production $7,898 $8,660 $9,463
Partnership income 1,120 400 695
- --------------------------------------------------------------
Total revenues 9,018 9,060 10,158
Operating expenses
Depreciation, depletion and
amortization (DD&A) 4,202 4,272 5,392
Exploratory dry hole costs 2,017 2,184 2,689
Other 4,670 4,113 3,701
- --------------------------------------------------------------
Operating loss (1,871) (1,509) (1,624)
Other income (loss) 60 (20) (31)
Interest charges, net 1,360 1,708 2,049
Federal income taxes (2,163) (1,351) (1,502)
- --------------------------------------------------------------
Net loss $(1,008) $(1,886) $(2,202)
==============================================================
Operating Loss
NJR Energy's operating loss increased from $1.5 million in 1992 to $1.9
million in 1993 due primarily to lower levels of production from its existing
oil and gas properties. In August 1993, NJR Energy completed the $5 million
acquisition of 56 properties from Marathon Oil Company; however, this
acquisition did not have a material impact on operating income since it
occurred late in the fiscal year. NJR Energy expects 1994 operating results to
benefit from this acquisition.
Lower DD&A and exploratory dry hole costs more than offset lower oil and gas
prices to reduce the operating loss to $1.5 million in 1992 compared with $1.6
million in 1991.
Production in 1993 decreased to 3.0 billion cubic feet (Bcf) of natural gas
and 97,000 barrels of oil compared with 3.7 Bcf and 99,000 barrels in 1992 and
3.3 Bcf and 101,000 barrels in 1991. Average natural gas prices improved to
$1.68 per thousand cubic feet (Mcf) in 1993, compared with $1.54 in 1992 and
$1.65 in 1991. The average price of oil decreased to $19.16 per barrel from
$19.68 in 1992 and $23.50 in 1991.
Total operating expenses increased by 3% in 1993 primarily as a result of
costs associated with NJR Energy's relocation to Tulsa, Oklahoma and its
assumption of operations of approximately 100 properties. The relocation and
assumption of operations of its key properties are the result of the Company's
1992 strategic decision to more actively manage its asset base.
Partnership income consists primarily of earnings from NJNR Pipeline
Company's 2.8% equity investment in the Iroquois Gas Transmission System, L.P.
(Iroquois), which became fully operational in November 1992.
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Interest Charges, Net
Interest charges, net decreased by 20% in 1993 reflecting lower average debt
levels and lower interest rates. NJR Energy received $8.7 million of the
proceeds from the Company's September 1992 common stock offering. Interest
charges, net in 1992 decreased by 17% as a result of lower interest rates,
which more than offset higher average debt levels.
Federal Income Taxes
NJR Energy's permanent tax benefits increased from $250,000 in 1992 to $1.1
million in 1993 primarily as a result of the development of certain properties
eligible for the tight sands tax credit.
Summary
Income from its investment in the Iroquois project, lower interest costs and
higher permanent tax benefits resulted in NJR Energy reducing its net loss in
1993. As part of the strategic re-evaluation conducted by the Company in 1992,
NJR Energy's future capital spending will be more heavily focused on reserve
acquisitions and development activities rather than exploration projects. The
Marathon acquisition should help improve operating income in 1994.
NJR Energy's ability to continue to improve its earnings in the future is
dependent on several factors including changes in oil and gas prices, the
performance of reserve acquisitions and other investments, the amount and
timing of which will be determined by market and other conditions.
Paradigm Power, Inc.
Paradigm Power was formed in 1992 to pursue investment opportunities in
natural gas-fueled cogeneration and independent power production projects. In
July 1993, a subsidiary of Paradigm Power entered into an agreement with a
subsidiary of Destec Energy, Inc. to jointly develop a proposed 57-megawatt,
natural gas-fired cogeneration project in Harriman, New York (the Northway
Project). The Northway Project has entered into a 20-year gas supply agreement
with NJNG. Pending various regulatory approvals, the project is currently
scheduled to begin construction in 1995, and commence operation in 1996.
LIQUIDITY AND CAPITAL RESOURCES
Consolidated
The Company is responsible for meeting the common equity requirements of each
subsidiary through new issuances, including the proceeds from its Dividend
Reinvestment and Customer Stock Purchase Plan (DRP). During 1993, the Company
raised a record $13.2 million from its DRP compared with $12 million in 1992
and $8.3 million in 1991. In September 1992, the Company also raised $37
million from a public offering. The Company provides the debt requirements for
its non-regulated companies, while NJNG issues short-term and long-term debt
based upon its own financial profile.
It is the Company's objective to maintain a consolidated capital structure
that reflects the different characteristics of each business segment and
provides adequate financial flexibility for accessing capital markets as
required. Based upon its existing mix of investments, it is the Company's goal
to maintain a common equity ratio in a range of 40% to 45%.
In order to meet the working capital and external debt financing requirements
of the non-regulated companies, as well as its own working capital needs, the
Company maintains committed credit facilities totaling $145 million with a
number of banks and has a $10 million credit facility available on an offering
basis.
At September 30, the Company's consolidated capital structure was as follows:
1993 1992
- --------------------------------------------------------------
Common stock equity 41% 43%
Preferred stock 4% 7%
Long-term debt 55% 50%
- --------------------------------------------------------------
Total 100% 100%
==============================================================
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Utility
The seasonal nature of the Company's utility operations creates large
short-term cash requirements, primarily to finance gas purchases and customer
accounts receivable. NJNG obtains working capital for these requirements, as
well as for the temporary financing of construction expenditures, sinking fund
needs and accelerated GRFT payments, through the issuance of commercial paper
and short-term bank loans. To support the issuance of commercial paper, NJNG
maintains committed credit facilities totaling $71 million with a number of
commercial banks and has an additional $15 million line of credit available on
an offering basis. NJNG's lines of credit are adjusted quarterly based upon
its projected cash needs.
Capital Requirements
NJNG's capital requirements for 1991 through 1993 and projected amounts
through 1995 are as follows:
</TABLE>
<TABLE> <CAPTION>
Maturities and Redemption
Construction redemption of long- of preferred
(Thousands) expenditures term debt stock Total
<S> <C> <C> <C> <C>
1991 $43,014 $2,590 $270 $45,874
1992 37,864 5,189 270 43,323
1993 53,420 21,379 10,270 85,069
1994 54,950 14,100 270 69,320
1995 51,260 9,560 270 61,090
The continued high level of construction expenditures has resulted from the
need for services, mains and meters to support NJNG's continued customer
growth, and general system renewals and improvements. NJNG also has additional
capital requirements in 1993 and 1994 of approximately $25 million annually
resulting from the acceleration of GRFT payments to the state of New Jersey.
Optional redemption activity in 1993 included $17.4 million of first mortgage
bonds and $10 million of preferred stock. Based on current market conditions,
NJNG expects to optionally redeem its $10.5 million, 10 1/2% Series L EDA Bonds
in 1994 and the remaining $6 million balance of its 10.85% Series M Bonds in
1995.
Financing
(Thousands) 1993 1992 1991
- -------------------------------------------------------------------------
Cash flow $48,389 $48,714 $29,993
Internal generation 48% 75% 25%
External financing
Common stock $13,218 $40,010 $ 8,560
Preferred stock - - $20,000
Long-term debt $39,300 $ 4,000 $ 7,000
=========================================================================
Cash flow, defined as net income adjusted for depreciation, exploratory dry
hole costs, amortization of deferred charges and the change in deferred income
taxes, represents the cash generated from operations available for capital
expenditures, dividends, working capital and other requirements. Cash flow
decreased slightly in 1993 due to the reversal of certain deferred tax
benefits, which more than offset higher earnings. Cash flow increased in 1992
due primarily to the higher earnings resulting from customer growth, colder
weather and base rate increases.
Internally generated funds, which is cash flow less dividends, as a
percentage of capital expenditures decreased in 1993 primarily as the result of
the increase in construction expenditures.
Common equity financing each year consisted of proceeds from the Company's
DRP and $28 million of the proceeds from the Company's public offering in
September 1992.
NJNG's external financing requirements in 1994 and 1995 are expected to
average about $50 million annually, which will be met through additional
issuances of short-term and long-term debt and common equity contributions by
the Company. In September 1993, NJNG received approval from the BRC to issue
up to $75 million of First Mortgage Bonds under a Medium-Term Note (MTN)
program. NJNG expects to utilize the MTN program for its non tax-exempt debt
needs, including the November 1993 issuance of
<PAGE>
-10-
$30 million, 6.27% Series X First Mortgage Bonds due 2008. The timing and mix
of these issuances will be geared toward achieving a common equity ratio of
53%, which is consistent with maintaining NJNG's current short-term and
long-term credit ratings and providing access to external capital.
Non-Utility
The Company's non-utility capital requirements and financing activity are
discussed below. All external financing was provided by the Company.
Real Estate
Capital Requirements and Financing
CR&R's capital requirements and financing activity for 1991 through 1993 were
as follows:
(Thousands) 1993 1992 1991
- --------------------------------------------------------------
Capital expenditures $2,869 $ 4,397 $6,321
Maturities and redemption of
long-term debt $2,241 $ 126 $ 816
Cash flow $2,883 $3,724 $2,251
Internal generation 72% 66% 23%
External financing
Long-term debt $2,091 $1,538 $5,319
==============================================================
As a result of the strategic re-evaluation conducted by the Company, CR&R's
construction program was limited in 1993 and 1992 to the fit-up of existing
tenant space and the development of previously committed projects.
The improvement in internal generation as a percentage of capital
expenditures to 72% in 1993 reflects stable cash flow being generated by CR&R's
operating properties while the level of capital expenditures declined. Cash
flow in 1992 includes the gain on the sale of a construction and lease
contract.
External financing activity in 1993 included the refinancing of its 12 3/4%,
$2.1 million mortgage. On October 1, 1993, CR&R refinanced its 11 5/8%, $13.8
million mortgage. Funds for both refinancings were obtained from the Company's
bank credit facilities.
Capital expenditures are projected to be $4.6 million in 1994 and $115,000 in
1995 in connection with the fit-up of existing tenant space and the development
of previously committed projects, subject to additional investments, approved
by the Board of Directors, made for the purpose of preserving the value of
particular real estate holdings, or made on a build-to-suit basis in accordance
with acceptable commitments from existing or prospective tenants or buyers.
Such expenditures are expected to be funded through internal generation and
bank loans obtained by the Company.
Exploration and Production
Capital Requirements and Financing
NJR Energy's capital requirements and financing activity for 1991 through
1993 were as follows:
(Thousands) 1993 1992 1991
- -----------------------------------------------------------------------
Capital expenditures $ 9,216 $ 5,333 $8,016
Equity investments $ 296 $ 875 $2,469
Cash flow $ 3,323 $ 4,746 $3,990
Internal generation 26% 81% 44%
External financing
Common stock - $ 8,730 -
Long-term debt $ 6,143 $(6,885) $7,756
=========================================================================
<PAGE>
-11-
NJR Energy's 1993 capital expenditures include the August 1993 acquisition of
56 oil and gas properties for $5 million. This acquisition added proved
reserves of 6.9 Bcf of natural gas and 295,000 barrels of oil, and included the
assumption of operations on 45 of the properties. NJR Energy's remaining 1993
capital spending was devoted primarily to previously committed exploration
projects and its ongoing development activity. During 1993, NJR Energy
participated in drilling 10 wells to develop existing properties, of which 8
were completed as commercially productive, and 4 exploratory wells, none of
which were commercially successful.
NJR Energy's base of proved natural gas reserves at September 1993 increased
to 41.4 Bcf, compared with 38.3 Bcf at September 1992. Proved oil reserves
increased to 2.4 million barrels at September 1993, compared with 2 million
barrels a year ago. The increase was due to the aforementioned acquisition
which more than offset production and reserve revisions.
Cash flow declined in 1993 due primarily to higher federal alternative
minimum taxes. Excluding the $5 million August 1993 acquisition, internal
generation as a percentage of capital expenditures was 79%. Cash flow and
internal generation improved in 1992 as a result of lower federal alternative
minimum taxes and a decline in capital spending.
External debt financing consists of borrowings under the Company's bank
credit facilities. NJR Energy also received $8.7 million of proceeds from the
Company's public offering in September 1992.
As a result of the strategic re-evaluation conducted by the Company, NJR
Energy will continue to focus a larger percentage of its capital expenditures
on reserve acquisitions and development activities rather than exploration
projects. (See Recent Developments)
The external financing requirements of NJR Energy are expected to average $12
million annually in 1994 and 1995, which will be met through the issuance of
additional debt and equity by the Company, the timing and mix of which will be
decided by market and other conditions.
Paradigm Power, Inc.
No capital investments were made as of September 30, 1993 by this recently
formed subsidiary. External financing for Paradigm Power's future capital
investments is expected to be initially provided by the Company, the timing and
mix of which will be determined by market and other conditions.
Effects of Inflation
Under the ratemaking process, the recovery of plant costs through
depreciation and the allowed return on plant investment are limited to levels
based upon the historical cost of utility plant, which is significantly less
than current replacement costs. The Company believes, based on past practices,
that NJNG will be allowed to earn on the increased cost of its investment when
replacement of the facilities is included in rate base. The Company's other
operations have not been significantly affected by inflation.
Summary
The Company is confident that it will have adequate cash flow and proper
access to both the short-term and long-term capital needed to meet the
projected capital and dividend requirements of each subsidiary. The Company
and NJNG will also explore various alternatives to take advantage of favorable
interest rates to reduce its overall cost of capital. In addition, NJNG is
hopeful of receiving approval of its incentive-based regulation proposal, which
is designed to encourage quality service to customers, reduce the need for base
rate filings and provide a fair return to the Company's shareholders.
Non-regulated investments are expected to generate improved earnings and cash
flow in the future, thereby enhancing the total return received by the
Company's shareholders.
NEW ACCOUNTING STANDARDS
The Company will adopt Statement of Financial Accounting Standards (SFAS) No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions"
and SFAS No. 109, "Accounting for Income Taxes" in the first quarter of fiscal
1994. See Note 8 and Note 6, respectively, for a discussion of the impact of
these accounting standards.
RECENT DEVELOPMENTS
On April 27, 1994, the Company announced that it plans to reallocate much of
the capital previously dedicated to the development of natural gas and oil
reserves to investments with closer strategic ties to the rest of its energy
businesses. No further exploration is planned. Potential investment
opportunities may include gas gathering, storage and marketing, as well as
other investments designed to capitalize on the post - Order 636 investment
environment. In connection with this strategic shift, as discussed in Note 1
to the Consolidated Financial Statements, the Company has changed the method by
which it accounts for its oil and gas operations from the full cost method to
the successful efforts method.
<PAGE>
-12-
Item 8. Financial Statements and Supplementary Data is hereby amended and
restated in its entirety to read as follows as a result of a change in
accounting principle as discussed in Note 1 to the Consolidated
Financial Statements:
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF NEW JERSEY RESOURCES CORPORATION:
We have audited the accompanying consolidated balance sheets and
consolidated statements of capitalization of New Jersey Resources Corporation
and its subsidiaries as of September 30, 1993 and 1992 and the related
consolidated statements of income, common stock equity and cash flows for each
of the three years in the period ended September 30, 1993. Our audits also
included the consolidated financial statement schedules listed in Item 14
(a)(2). These financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial statement schedules
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the companies at September 30,
1993 and 1992 and the results of their operations and their cash flows for each
of the three years in the period ended September 30, 1993 in conformity with
generally accepted accounting principles. Also, in our opinion, such
consolidated financial statement schedules, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
As discussed in Note 1, the accompanying consolidated financial statements of
New Jersey Resources Corporation and its subsidiaries have been restated to
show the effects of a change in accounting principle from the full cost method
of accounting for oil and gas properties to the successful efforts method.
DELOITTE & TOUCHE
Parsippany, New Jersey
November 1, 1993 (April 28, 1994 as to Note 1)
<PAGE>
-13-
CONSOLIDATED STATEMENTS OF INCOME New Jersey Resources Corporation
(Thousands, except per share data)
For the Years Ended September 30, 1993(A) 1992(A) 1991(A)
- ------------------------------------------------------------------------
OPERATING REVENUES $454,746 $400,738 $335,593
- ------------------------------------------------------------------------
OPERATING EXPENSES
Gas purchases 252,041 205,920 168,042
Operation and maintenance 61,707 59,719 59,378
Depreciation and amortization 25,405 23,918 23,460
Exploratory dry hole costs 2,017 2,184 2,689
Gross receipts tax, etc. 52,719 52,612 45,489
Federal income taxes 11,957 10,841 4,295
- ------------------------------------------------------------------------
Total operating expenses 405,846 355,194 303,353
- ------------------------------------------------------------------------
OPERATING INCOME 48,900 45,544 32,240
- ------------------------------------------------------------------------
OTHER INCOME, NET 713 574 (316)
INTEREST CHARGES, NET
Long-term debt 19,952 19,742 20,122
Short-term debt and other 477 1,665 2,396
- ------------------------------------------------------------------------
Total interest charges, net 20,429 21,407 22,518
- ------------------------------------------------------------------------
INCOME BEFORE PREFERRED STOCK
DIVIDENDS OF SUBSIDIARY 29,184 24,711 9,406
Preferred stock dividends 2,022 2,464 1,012
- ------------------------------------------------------------------------
NET INCOME AVAILABLE FOR COMMON STOCK $27,162 $22,247 $ 8,394
========================================================================
EARNINGS PER COMMON SHARE $1.64 $1.55 $.61
========================================================================
DIVIDENDS PER COMMON SHARE $1.52 $1.52 $1.50
========================================================================
AVERAGE SHARES OUTSTANDING 16,607 14,334 13,750
========================================================================
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF COMMON STOCK EQUITY New Jersey Resources Corporation
(Dollars in Thousands)
<CAPTION>
Retained
Premium on ESOP Earnings,
Number of Common Common Term Loan as Effect of Retained
Shares Stock Stock and Other previously change in Earnings, as
reported accounting restated(A)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30, 1990 13,520,064 $33,800 $120,745 $(2,755) $27,668 $(11,735) $15,933
Net income available for common 11,347 (2,953) 8,394
stock
Common stock issued under stock 445,157 1,113 7,636
plans
Cash dividends declared (20,656) (20,656)
Reduction of ESOP term loan and 521
other
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCE AT SEPTEMBER 30, 1991 13,965,221 34,913 128,381 (2,234) 18,359 (14,688) 3,671
Net income available for common 23,459 (1,212) 22,247
stock
Public sale of common stock 1,725,000 4,313 32,417
Common stock issued under stock 595,672 1,489 10,555
plans
Cash dividends declared (21,780) (21,780)
Reduction of ESOP term loan and 731
other
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCE AT SEPTEMBER 30, 1992 16,285,893 40,715 171,353 (1,503) 20,038 (15,900) 4,138
Net income available for common 28,497 (1,335) 27,162
stock
Common stock issued under stock 533,933 1,335 11,643
plans
Cash dividends declared (25,283) (25,283)
Reduction of ESOP term loan and 753
other
- ---------------------------------------------------------------------------------------------------------------------------------
BALANCE AT SEPTEMBER 30, 1993 16,819,826 $42,050 $182,996 $ (750) $23,252 $(17,235) 6,017
=================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
(A) Restated to reflect the change in accounting principle by NJR Energy to the
successful efforts method for its oil and gas operations from the full cost
method.
<PAGE>
-14-
<TABLE> <CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS New Jersey Resources Corporation
(Thousands)
For the Years Ended September 30, 1993(A) 1992(A) 1991(A)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income available for common stock $ 27,162 22,247 $ 8,394
Adjustments to reconcile net income to cash flows
Depreciation and amortization 25,405 23,918 23,460
Exploratory dry hole costs 2,017 2,184 2,689
Amortization of deferred charges 1,381 1,319 1,286
Deferred income taxes (980) 8,115 63
Change in working capital (44,399) (4,482) 14,227
Other, net (1,616) (3,299) (8,519)
- ----------------------------------------------------------------------------------------------------------
Net cash flows from operating activities 8,970 50,002 41,600
- ----------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 49,200 4,000 50,925
Proceeds from preferred stock - - 20,000
Proceeds from common stock 13,218 48,740 8,560
Payments of long-term debt (24,295) (11,569) (13,876)
Payments of preferred stock (10,270) (270) (270)
Payments of common stock dividends (24,426) (21,553) (20,351)
Net change in short-term debt 54,900 (21,400) (24,620)
- ----------------------------------------------------------------------------------------------------------
Net cash flows from financing activities 58,327 (2,052) 20,368
- ----------------------------------------------------------------------------------------------------------
CASH FLOWS USED IN INVESTING ACTIVITIES
Expenditures for
Utility plant (58,270) (37,864) (43,014)
Contribution from cogeneration developer 4,850 - -
Real estate properties (2,869) (4,397) (6,321)
Oil and gas properties (9,216) (5,333) (8,016)
Cost of removal and other (2,048) (1,043) (3,531)
- ----------------------------------------------------------------------------------------------------------
Net cash flows used in investing activities (67,553) (48,637) (60,882)
- ----------------------------------------------------------------------------------------------------------
Net change in cash and temporary investments (256) (687) 1,086
Cash and temporary investments at beginning of the year 1,811 2,498 1,412
- ----------------------------------------------------------------------------------------------------------
Cash and temporary investments at end of the year $ 1,555 $ 1,811 $ 2,498
==========================================================================================================
CHANGES IN COMPONENTS OF WORKING CAPITAL
Receivables $ (1,473) $ (3,283) $ 7,556
Inventories (8,374) 47 (7,159)
Deferred gas costs (19,566) 5,729 (8,570)
Purchased gas 4,958 1,879 4,920
Accrued taxes (20,879) (3,349) 8,815
Customers' credit balances and deposits (1,582) (8,601) (3,274)
Other, net 2,517 3,096 11,939
- ----------------------------------------------------------------------------------------------------------
Total $ (44,399) $ (4,482) $ 14,227
==========================================================================================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Cash paid during the year for
Interest (net of amount capitalized) $18,725 $20,905 $23,397
Income taxes $9,930 $2,710 $1,147
Non-cash investing and financing activities
Note receivable converted to oil and gas properties - $830 -
==========================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
(A) Restated to reflect the change in accounting principle by NJR Energy to the
successful efforts method for its oil and gas operations from the full cost
method.
<PAGE>
-15-
CONSOLIDATED BALANCE SHEETS
New Jersey Resources Corporation
September 30, 1993(A) 1992(A)
- ---------------------------------------------------------------------------
ASSETS (Thousands)
- ---------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Utility plant, at original cost $637,580 $588,908
Real estate properties, at cost 102,369 99,522
Oil and gas properties 64,576 57,398
- ---------------------------------------------------------------------------
804,525 745,828
Accumulated depreciation and amortization (198,875) (178,600)
- ---------------------------------------------------------------------------
Property, plant and equipment, net 605,650 567,228
- ---------------------------------------------------------------------------
CURRENT ASSETS
Cash and temporary investments 1,555 1,811
Customer accounts receivable 16,719 13,386
Unbilled revenues 10,037 11,676
Allowance for doubtful accounts (684) (598)
Gas in storage, at average cost 37,282 29,425
Materials and supplies, at average cost 7,091 6,574
Deferred gas costs 22,891 3,325
Other 6,250 5,615
- ---------------------------------------------------------------------------
Total current assets 101,141 71,214
- ---------------------------------------------------------------------------
DEFERRED CHARGES AND OTHER 31,871 30,163
- ---------------------------------------------------------------------------
TOTAL ASSETS $738,662 $668,605
- ---------------------------------------------------------------------------
CAPITALIZATION AND LIABILITIES
- ---------------------------------------------------------------------------
CAPITALIZATION
Common stock equity $230,313 $214,703
Redeemable preferred stock 22,340 32,610
Long-term debt 310,996 251,955
- ---------------------------------------------------------------------------
Total capitalization 563,649 499,268
- ---------------------------------------------------------------------------
CURRENT LIABILITIES
Current maturities of long-term debt 4,650 5,151
Short-term debt 20,900 -
Purchased gas 24,815 21,235
Accounts payable and other 33,571 28,182
Accrued taxes 11,246 32,125
Customers' credit balances and deposits 11,639 13,221
- ---------------------------------------------------------------------------
Total current liabilities 106,821 99,914
- ---------------------------------------------------------------------------
DEFERRED CREDITS
Deferred income taxes 39,344 40,324
Deferred investment tax credits 12,419 12,830
Other 16,429 16,269
- ---------------------------------------------------------------------------
Total deferred credits 68,192 69,423
- ---------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (NOTE 9)
- ---------------------------------------------------------------------------
TOTAL CAPITALIZATION AND LIABILITIES $738,662 $668,605
- ---------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
(A) Restated to reflect the change in accounting principle by NJR Energy to the
successful efforts method for its oil and gas operations from the full cost
method.
<PAGE>
-16-
<TABLE> <CAPTION>
CONSOLIDATED STATEMENTS OF CAPITALIZATION New Jersey Resources Corporation
(Thousands)
September 30, 1993(A) 1992(A)
- -------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C>
COMMON STOCK EQUITY
Common stock, $2.50 par value; authorized 25,000,000 shares;
outstanding shares 1993, 16,819,826; 1992, 16,285,893 $ 42,050 $ 40,715
Premium on common stock 182,996 171,353
Term loan of Employee Stock Ownership Plan and other (750) (1,503)
Retained earnings 6,017 4,138
- ---------------------------------------------------------------------------------------------------------------
Total common stock equity 230,313 214,703
- ---------------------------------------------------------------------------------------------------------------
REDEEMABLE PREFERRED STOCK
New Jersey Natural Gas Company
$100 par value, cumulative; authorized shares
1993, 533,400; 1992, 636,100 outstanding shares
4-3/4% series - 1993, 11,000; 1992, 12,500 1,100 1,250
5.65% series - 1993, 12,400; 1992, 13,600 1,240 1,360
7.72% series - 1993 and 1992, 200,000 20,000 20,000
7.75% series - 1992, 100,000 - 10,000
- ---------------------------------------------------------------------------------------------------------------
Total redeemable preferred stock 22,340 32,610
- ---------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT
New Jersey Natural Gas Company
First mortgage bonds Maturity date
9-1/4% Series F October 1, 1995 - 7,084
10-3/8% Series K September 1, 2013 - 10,300
10-1/2% Series L August 1, 2014 10,500 10,500
10.85% Series M September 1, 2000 7,200 8,400
10% Series N May 1, 2001 7,000 8,000
8.5% Series P March 1, 2002 10,908 12,272
9% Series Q December 1, 2017 13,500 13,500
8-1/2% Series R June 1, 2018 25,000 25,000
10.10% Series S June 1, 2009 20,000 20,000
7.05% Series T March 1, 2016 9,545 9,545
7.25% Series U March 1, 2021 11,000 7,000
7.50% Series V December 1, 2002 25,000 -
5-3/8% Series W August 1, 2023 10,300 -
Short-term debt expected to be refinanced 34,000 -
Capital lease obligations 77 514
- ---------------------------------------------------------------------------------------------------------------
184,030 132,115
Obligation to state authority - 8,000
Less - Construction fund - (8,000)
- ---------------------------------------------------------------------------------------------------------------
Total 184,030 132,115
- ---------------------------------------------------------------------------------------------------------------
New Jersey Resources Corporation
Revolving Credit Agreements, at floating October 1, 1994- October 126,292 102,550
rates 1, 1995
7.9% Term loan of Employee Stock Option May 1, 1995 674 1,349
Plan
- ---------------------------------------------------------------------------------------------------------------
Total 126,966 103,899
- ---------------------------------------------------------------------------------------------------------------
Commercial Realty & Resources Corporation
11-5/8% Mortgage loan December 1, 2000 - 13,830
12-3/4% Mortgage loan August 1, 1995 - 2,111
- ---------------------------------------------------------------------------------------------------------------
Total - 15,941
- ---------------------------------------------------------------------------------------------------------------
Total long-term debt 310,996 251,955
- ---------------------------------------------------------------------------------------------------------------
TOTAL CAPITALIZATION $563,649 $499,268
===============================================================================================================
The accompanying notes are an integral part of these statements.
(A) Restated to reflect the change in accounting principle by NJR Energy to the
successful efforts method for its oil and gas operations from the full cost
method.
<PAGE>
-17-
Notes to Consolidated Financial Statements
- --------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of New Jersey
Resources Corporation (the Company) and its subsidiaries -- New Jersey Natural
Gas Company (NJNG) and Paradigm Resources Corporation (Paradigm). Commercial
Realty & Resources Corp. (CR&R), NJR Energy Corporation (NJR Energy) and
Paradigm Power, Inc. (Paradigm Power) are wholly owned subsidiaries of
Paradigm. NJR Energy has four wholly owned operating subsidiaries.
Significant intercompany accounts and transactions have been eliminated.
Certain reclassifications have been made of previously reported amounts to
conform to 1993 account classifications.
Regulatory Accounting
The Company's largest subsidiary, NJNG, maintains its accounts in accordance
with the Uniform System of Accounts as prescribed by the New Jersey Board of
Regulatory Commissioners (the BRC). As a result of the ratemaking process, the
accounting principles applied by NJNG differ in certain respects from those
applied by nonregulated businesses.
Utility Plant and Depreciation
Depreciation is computed on a straight-line method for financial statement
purposes, using rates based on the estimated remaining lives of the various
classes of depreciable property. The composite rate of depreciation was 3.27%
of average depreciable property in 1993, 3.24% in 1992 and 3.19% in 1991. When
depreciable properties are retired, the original cost thereof, plus cost of
removal less salvage, is charged to accumulated depreciation.
Oil and Natural Gas Properties
As disclosed herein on Form 10-K/A, filed on April 28, 1994, NJR Energy changed
its method of accounting for oil and gas operations to the successful efforts
method from the full cost method.
Under the successful efforts method of accounting, proved leasehold costs are
capitalized and amortized over the proved developed and undeveloped reserves on
a units-of-production basis. Successful drilling costs and developmental dry
holes are capitalized and amortized over the proved developed reserves on a
units-of-production basis. Unproved leasehold costs are capitalized and are
not amortized, pending an evaluation of their exploration potential. Unproved
leasehold costs are assessed periodically to determine if an impairment of the
cost of significant individual properties has occurred. The cost of an
impairment is charged to expense in the period in which it occurs. Costs
incurred for exploratory dry holes, geological and geophysical work and delay
rentals are charged to expense as incurred.
The Consolidated Balance Sheets as of September 30, 1993 and 1992, and the
related Consolidated Statements of Income, Common Stock Equity, Cash Flows and
financial statement schedules for each of the three years in the period ended
September 30, 1993 and related notes to the consolidated financial statements
have been restated to show the effects of NJR Energy's change in accounting
principle to the successful efforts method of accounting for oil and gas
properties from the full cost method. The change to the successful efforts
method of accounting results in a decrease of $17.2 million in retained
earnings as of September 30, 1993 by restating previously issued financial
statements.
The effect of this change was to decrease previously reported net income and
earnings per share of common stock by the following amounts:
(Thousands, except per share data) 1993 1992 1991
---- ---- ----
Net income, as previously reported $28,497 $23,459 $11,347
Effect of change in accounting (1,335) (1,212) (2,953)
------- ------- -------
Net income, as restated $27,162 $22,247 $8,394
======= ======= ======
Earnings per common share, as
previously reported $1.72 $1.64 $.83
Effect of change in accounting (.08) (.09) (.22)
------ ------ ------
Earnings per common share, as
restated $1.64 $1.55 $.61
===== ===== ====
<PAGE>
-18-
Utility Revenues
Customers are billed through monthly cycle billings on the basis of one month's
actual or estimated usage. Revenues are based upon service rendered.
Gas Purchases
NJNG's tariff includes a Levelized Gas Adjustment (LGA) clause, which is
normally revised on an annual basis, effective October 1. Under this clause,
NJNG projects its cost of gas, net of supplier refunds and credits from
interruptible, off-system and transportation sales, over the subsequent 12
months and recovers the excess, if any, of such projected costs over those
included in its base rates through monthly levelized charges to customers. Any
under-or over-recoveries are deferred and reflected in the LGA clause in the
subsequent year.
Gross Receipts Tax, Etc.
Gross receipts tax, etc. consists principally of New Jersey gross receipts and
franchise taxes (GRFT), which are eventually paid to the municipalities in
which NJNG has utility plant facilities, and a surtax paid to the state.
Through December 1991, these taxes were based upon operating revenues subject
to such taxes. As a result of changes in New Jersey tax law, commencing in
January 1992, they are calculated on a per-therm basis. GRFT is paid in lieu
of personal property and state income taxes. Such amounts represent
approximately 91% of the Gross receipts tax, etc. figures.
Federal Income Taxes
Deferred federal income taxes are provided for timing differences between book
and taxable income, except that NJNG provides such taxes only to the extent
permitted for ratemaking purposes.
Investment tax credits have been deferred and are being amortized as a
reduction to the tax provision over the average lives of the related property.
Capitalized Interest
The Company's capitalized interest totaled $3.2 million in 1993, $3.3 million
in 1992, and $3.6 million in 1991.
Deferred Charges
Included in Deferred charges and other is $4.5 million related to items that
are being amortized through rates over remaining time periods ranging from 1 to
10 years. No return is being earned on the unamortized balance. See Note 9:
Commitments and Contingent Liabilities for a discussion of the manufactured gas
plant (MGP) remediation costs.
Statements of Cash Flows
For purposes of reporting cash flows, all temporary investments with maturities
of three months or less are considered cash equivalents.
New Accounting Standards
See Note 8: Employee Benefit Plans and Note 6: Federal Income Taxes for a
discussion of the impact of Statement of Financial Accounting Standards (SFAS)
No. 106, "Employers Accounting for Postretirement Benefits Other Than Pensions"
and SFAS No. 109, "Accounting for Income Taxes", respectively, both of which
will be adopted by the Company in the first quarter of fiscal 1994.
2. Common Stock
At September 30, 1993, there were 847,362 shares reserved for issuance under
the Company's Dividend Reinvestment and Customer Stock Purchase, Employee Stock
Ownership and Retirement Savings Plans.
At September 30, 1993, there were 134,102 shares reserved for issuance or grant
under the Company's Executive Long-Term Compensation Plan (the Plan). During
1993, a total of 1,572 shares were issued and 67,264 non-qualified stock
options were granted under the Plan. All options granted under the Plan allow
for the purchase of common stock at prices not less than the fair market value
on the date of grant, vest over four years and must be exercised within ten
years. The following table summarizes the stock option activity:
<PAGE>
-19-
Shares Price
- --------------------------------------------------------------------------
Outstanding at September 30, 1990 - -
Granted 23,672 $19.01
- --------------------------------------------------------------------------
Outstanding at September 30, 1991 and 23,672 $19.01
1992
Granted 67,264 $22.25
- --------------------------------------------------------------------------
Outstanding at September 30, 1993 90,936 $19.01 - $22.25
- --------------------------------------------------------------------------
Exercisable at September 30, 1993 11,836 $19.01
- --------------------------------------------------------------------------
3. Redeemable Preferred Stock
Under the terms of its preferred stock agreements, NJNG purchases 1,500 shares
of the 4-3/4% series and 1,200 shares of the 5.65% series annually, at par plus
accumulated dividends. Both series are redeemable at NJNG's option for $102
per share plus accumulated dividends at any time. The 7.72% series is subject
to mandatory redemption in 2001 and optional redemption from 1998 to 2000 at
prices declining from $101.72 to $100 per share plus accumulated dividends. In
March 1993, NJNG optionally redeemed its $10 million, 7.75% series at a price
of $103.44 per share.
Preferred stockholders are entitled to one vote per share on all NJNG matters
and have priority as to dividends. The agreements prohibit the distribution of
common stock dividends unless NJNG is in compliance with all their provisions.
In addition, whenever preferred dividends are in arrears in an amount equal to
four quarterly dividends, preferred stockholders may elect a number of
directors necessary to constitute one less than a majority of NJNG's Board of
Directors, until such dividends are paid in full.
The Company has 200,000 shares of authorized and unissued $100 par value
preferred stock.
4. Long-Term Debt, Dividends and Retained Earnings Restrictions
Annual redemption requirements for the next five years are as follows: 1994,
$4.7 million; 1995, $69.5 million; 1996, $50.8 million; 1997, $3.6 million and
1998, $3.6 million.
NJNG's mortgage secures its first mortgage bonds and represents a lien on
substantially all its property, including gas supply contracts. Certain
indentures supplemental to the mortgage include restrictions as to cash
dividends and other distributions on NJNG's common stock. Under the most
restrictive provision, approximately $11.9 million of NJNG's retained earnings
was available at September 30, 1993.
In March 1991, NJNG entered into a loan agreement with the New Jersey Economic
Development Authority (the Authority) under which the Authority issued $15
million of its 7.25% Series 1991B Bonds due March 2021 and deposited the
proceeds into a construction fund with an indenture trustee. NJNG issues first
mortgage bonds, with interest rates and maturity dates matching those of the
revenue bonds, as it receives funds from the indenture trustee in reimbursement
of qualified expenditures up to the principal amount of the bonds issued by the
Authority. Any remaining balance in the construction fund, together with the
first mortgage bonds issued by NJNG, are held by the indenture trustee as
security for the Authority's revenue bonds. NJNG is obligated at all times to
secure all payments on the Authority's revenue bonds. Under its loan agreement
with the Authority, NJNG received $4 million of the proceeds from the 7.25%
Series 1991B Bonds and issued a like amount of its 7.25% Series U Bonds in
September 1993 and expects to issue an additional $4 million of its Series U
Bonds within the next twelve months. Accordingly, at September 30, 1993, $4
million of short-term debt has been reclassified as long-term debt for
financial reporting purposes.
In December 1992, NJNG issued $25 million of its 7.5% Series V First Mortgage
Bonds due December 2002 and used a portion of the proceeds to redeem the
remaining $7.1 million outstanding principal amount of its 9 1/4% Series F
First Mortgage Bonds.
In August 1993, NJNG entered into a loan agreement with the Authority under
which the Authority issued $10.3 million of its 5 3/8% Series 1993A Bonds due
August 2023 and NJNG issued a like amount of its 5 3/8% Series W First Mortgage
Bonds. In September 1993, NJNG used the proceeds from its Series W Bonds to
redeem the $10.3 million, 10 3/8% Series K Bonds due 2013.
In September 1993, NJNG received approval from the BRC to issue up to $75
million of First Mortgage Bonds under a Medium-Term Note (MTN) program. In
November 1993, NJNG issued $30 million of its 6.27% Series X First Mortgage
Bonds due November
<PAGE>
-20-
2008 under the MTN program and used the proceeds to reduce outstanding
short-term debt. Accordingly, at September 30, 1993, $30 million of
short-term debt has been reclassified as long-term debt for financial
reporting purposes.
CR&R used proceeds from floating rate bank loans obtained by the Company to
optionally redeem the remaining $2.1 million outstanding principal amount of
its 12 3/4% mortgage in December 1992 and the remaining $13.8 million
outstanding principal amount of its 11 5/8% mortgage on October 1, 1993.
Accordingly, at September 30, 1993, the $13.8 million outstanding mortgage has
been reclassified as a revolving credit agreement borrowing for financial
reporting purposes.
In April 1993, the Company entered into five-year interest rate swap agreements
for an aggregate notional amount of $50 million. Under the agreements, the
Company had agreed to pay a rate equal to the London Interbank Offered Rate
(Libor), which is reset semi-annually, while receiving a fixed rate of
approximately 5.48%. On May 11, 1993, the Company accepted $511,000 in exchange
for terminating these agreements.
At September 30, 1993, the Company had seven committed revolving credit
agreements totaling $145 million which provide for bank loans at negotiable
rates at, or below, the prime rate. At September 30, 1993, a total of $112.5
million was outstanding under these agreements of which $65.2 million matures
in fiscal 1995 and $47.3 million matures in fiscal 1996.
The Company has entered into two interest rate swap agreements, having an
aggregate notional amount of $45 million, to eliminate the impact of changes in
interest rates on a portion of its floating rate long-term debt. These
agreements effectively fix the Company's interest rate on $30 million of its
floating rate revolving credit borrowings at 8 7/8% through December 1993 and
9% through 1996, and on $15 million of its floating rate revolving credit
borrowings at 9.4% through September 1992 and 9.5% through 1999. In the event
of nonperformance by the counterparties, the Company's interest cost on the $45
million of long-term debt would revert to a floating rate based on a three- or
six-month LIBOR. However, the Company does not anticipate nonperformance by
the counterparties. The differential to be paid or received is accrued as
interest rates change and is recognized over the life of the interest rate swap
agreements.
The Company's remaining long-term debt outstanding under revolving credit
agreements at September 30, 1993 and 1992 totaled $67.5 million and $57.6
million, with a weighted average interest rate of 3.7% and 4%, respectively.
SFAS 107, "Fair Value of Financial Instruments", requires disclosure of the
estimated fair value of an entity's financial instrument assets and
liabilities. The fair value of cash and temporary investments, commercial
paper and borrowings under revolving credit facilities are estimated to equal
their carrying amounts due to the relatively short maturity of those
instruments. The estimated fair value of long-term debt is based on quoted
market prices for similar issues and the fair value of interest rate swap
agreements is based on the estimated amount the Company would receive or pay to
terminate the agreements. At September 30, 1993, the carrying amount of long-
term debt was $281 million with a fair market value of $295 million and the
Company would have to pay approximately $7.4 million to terminate its interest
rate swap agreements.
5. Short-term Debt and Credit Facilities
Committed credit facilities of NJNG support the issuance of commercial paper
and provide for bank loans at negotiable rates at, or below, the prime rate.
These credit facilities total $71 million, and require commitment fees on the
unused amounts. In addition, the Company has $10 million and NJNG has $15
million in lines of credit that are available on an offering basis without
payment of a commitment fee. NJNG's lines of credit are adjusted quarterly
based upon its projected cash needs. A comparison of pertinent
data follows:
<PAGE>
-21-
</TABLE>
<TABLE> <CAPTION>
(Thousands) 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bank credit facilities $71,000 $65,000 $75,000
Maximum amount outstanding $56,600 $49,200 $73,290
Average daily amount outstanding
Notes payable to banks $ 3,900 $ 2,700 $15,600
Commercial paper $ 7,900 $17,000 $28,600
Weighted average interest rate
Notes payable to banks 3.34% 4.75% 7.65%
Commercial paper 3.24% 4.61% 6.92%
Amount outstanding at year end
Notes payable to banks $5,000 - -
Commercial paper $49,900 - $17,400
Interest rate at year end
Notes payable to banks 3.22% - -
Commercial paper 3.22% - 5.55%
=====================================================================================================================
6. Federal Income Taxes
The Company's federal income tax returns have been examined by the Internal
Revenue Service through 1989 and all significant matters have been settled.
Federal income tax expense applicable to current operations differs from the
amount computed by applying the statutory rate to pre-tax income for the
following reasons:
(Thousands) 1993 1992 1991
- -------------------------------------------------------------------------
Tax expense at statutory rate
(34.75% in 1993 and 34% in 1992
and 1991) $14,394 $12,247 $4,605
Increase (reduction) resulting
from
Depreciation and cost of
removal (234) 145 380
Amortization of investment
tax credits (411) (427) (379)
Section 29 tax credits (616) (110) (43)
Other (829) (667) (424)
- -------------------------------------------------------------------------
Provision for Federal income taxes $12,304 $11,188 $4,139
=========================================================================
The provision for federal income taxes is composed of the following:
(Thousands) 1993 1992 1991
- -------------------------------------------------------------------------
Current $ 7,685 $ 2,153 $ 1,480
- -------------------------------------------------------------------------
Deferred
Excess tax depreciation 5,405 6,026 7,053
Gross receipts and
franchise taxes (3,555) 6,956 -
Exploration and development costs (428) 126 201
Alternative minimum tax (367) (1,371) (4,307)
Customer contributions (1,593) 38 (1,146)
Capitalized overhead and interest 268 (406) (1,434)
Deferred gas costs 6,645 (2,253) 3,217
Deferred charges and other (1,345) 346 (546)
- -------------------------------------------------------------------------
Total deferred 5,030 9,462 3,038
- -------------------------------------------------------------------------
Amortization of investment
tax credits (411) (427) (379)
- -------------------------------------------------------------------------
Total provision $12,304 $11,188 $4,139
=========================================================================
Charged to: Operating expenses $11,957 $10,841 $4,295
Other income, net 347 347 (156)
- -------------------------------------------------------------------------
Total provision $12,304 $11,188 $4,139
=========================================================================
<PAGE>
-22-
Deferred income taxes related to NJNG are provided for differences between book
and tax income to the extent permitted for ratemaking purposes. At September
30, 1993, the cumulative net amount of income tax timing differences for which
deferred income taxes have not been provided was $11 million. The related
deferred income taxes, at the current statutory rate of 35%, would be $3.8
million. NJNG expects to continue to recover through rates the taxes due as
such timing differences reverse.
The Revenue Reconciliation Act of 1993 increased the statutory tax rate from
34% to 34.75% in fiscal 1993 and to 35% in future fiscal years. The impact on
NJNG in 1993 of $311,000 has been deferred, as NJNG expects to fully recover
the incremental tax through rates.
At September 30, 1993, the Company had an alternative minimum tax (AMT) credit
of $7.9 million available for an indefinite carryforward period against future
federal income taxes payable to the extent that regular federal income taxes
payable exceeds AMT payable.
In February 1992, the Financial Accounting Standards Board (FASB) issued its
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" (SFAS 109), which amends SFAS 96 and requires the implementation of a
liability method for the financial reporting of income taxes, as compared with
the present deferred method. Under the liability method, deferred tax balances
must be recorded irrespective of ratemaking treatment and are adjusted to
reflect changes in tax rates. Presently, deferred tax balances are not
recorded for certain ratemaking items and are not adjusted to reflect changes
in tax rates. The Company will adopt SFAS 109 in the first quarter of fiscal
1994.
Current estimates indicate that implementation of SFAS 109, at current tax
rates, would result in a credit to net income from real estate and oil and gas
operations of approximately $721,000. NJNG's deferred tax liability will
decrease by approximately $400,000, which will be offset by a regulatory
liability as the Company believes it is probable that the effects of SFAS 109
will be payable to customers in the future.
7. Regulatory Issues
In April 1993, NJNG filed a petition with the BRC seeking additional annual
revenues of approximately $26.9 million, or 7.1%, in base rates. The filing
reflects primarily the incremental capital and operating costs associated with
NJNG's continued customer growth, general system expansion and New Jersey tax
law changes. The filing includes a 12.5% return on equity and a rate base of
$541 million, compared with a 12.2% return on equity and a $389 million rate
base currently reflected in its base rates. NJNG expects a decision by the BRC
in fiscal 1994.
In May 1993, NJNG filed an incentive-ratemaking plan petition with the BRC
which is designed to reduce the need for frequent base rate filings while
improving overall service to its customers. It includes measurable benchmarks
in areas such as construction costs, operation and maintenance expenses, gas
costs and customer service. The plan also includes a return-on- equity
sharing formula and a three-year moratorium on new base rate filings. NJNG
expects a decision in fiscal 1994.
In July 1992, NJNG filed a petition with the BRC to decrease its annual LGA
revenues by $15.8 million, or 4% of its overall customer rates, reflecting
primarily a refund from its largest supplier, Texas Eastern Transmission
Corporation. In December 1992, the BRC approved a $12 million refund, which
was credited to NJNG's firm customers in their January 1993 bills, and an
annual reduction in its LGA revenue of $5.4 million. Accordingly, 1992
operating revenues and gas purchases have been adjusted to reflect the $12
million refund which had no impact on either operating income or net income.
In July 1993, NJNG filed a petition with the BRC to increase its annual LGA
revenues by $4.8 million, or 1.3%, reflecting primarily higher-than-expected
natural gas prices. A decision is expected in the first quarter of fiscal
1994. In April 1992, the Federal Energy Regulatory Commission issued Order 636
which requires interstate natural gas pipelines to unbundle their sales and
transportation services. NJNG's share of the costs associated with the
pipelines complying with Order 636 are currently estimated to total
approximately $35 million, of which $11.6 million is included in Deferred gas
costs on the Consolidated Balance Sheet at September 30, 1993. NJNG expects to
recover these costs through its LGA clause; however, no assurance can be given
as to the timing or extent of the ultimate recovery of these costs through the
ratemaking process.
In September 1993, the BRC approved a $1.5 million refund to customers,
reflecting the first year results of its weather-normalization clause. The
weather-normalization clause, which has been approved on an experimental basis
for a minimum of two years, provides for a revenue adjustment if the weather
varies by more than one-half of one percent from the 10-year average weather.
The accumulated adjustment from one heating season (i.e., October-April) is
billed or credited to customers in the subsequent heating season. The weather
in 1993 was 2.6% colder-than-normal. At September 30, 1993, the $1.5 million
refund is included in Customers' credit balances and deposits on the
Consolidated Balance Sheet.
<PAGE>
-23-
8. Employee Benefit Plans
Pension Plans
The Company has two trusteed, noncontributory defined benefit retirement plans
covering all regular, full-time employees with more than one year of service.
Plan benefits are based on years of service and average compensation during the
last five years of employment. The Company makes annual contributions to the
plans consistent with the funding requirements of federal law and regulations.
The components of the net pension cost are as follows:
(Thousands) 1993 1992 1991
- -------------------------------------------------------------------------
Service cost - benefits earned $1,550 $1,440 $1,320
during the period
Interest cost on projected benefit 2,662 2,441 2,288
obligation
Return on plan assets (2,910) (2,711) (2,685)
Net amortization and deferral (183) (229) (242)
- -------------------------------------------------------------------------
Net cost $1,119 $ 941 $ 681
=========================================================================
Plan assets consist primarily of corporate equities and obligations, U.S.
Government obligations and cash equivalents. A reconciliation of the funded
status of the plans to the amounts recognized in the Consolidated Balance
Sheets is presented below:
(Thousands) 1993 1992
- -------------------------------------------------------------------------
Plan assets at fair value $37,747 $34,466
- -------------------------------------------------------------------------
Actuarial present value of plan benefits
Vested benefits 26,202 22,342
Non vested benefits 1,724 1,595
Impact of estimated future compensation 10,618 9,715
changes
- -------------------------------------------------------------------------
Projected plan benefits 38,544 33,652
- -------------------------------------------------------------------------
Plan assets (less than) in excess of (797) 814
projected plan benefits
Unrecognized net assets at beginning of (3,282) (3,588)
the year
Unrecognized prior service costs 1,478 961
Unrecognized net loss 2,064 1,781
- -------------------------------------------------------------------------
Net pension liability recognized in the $ (537) $ (32)
Consolidated Balance Sheets
=========================================================================
The assumptions used in determining the actuarial present value of the
projected benefit obligation were as follows:
1993 1992
- -----------------------------------------------------------
Discount rate 7.5% 8.0%
Compensation increase 5.0% 5.5%
Long-term rate of return on 9.0% 9.0%
plan assets
- -----------------------------------------------------------
Employee Stock Ownership Plan
The Company established an Employee Stock Ownership Plan (ESOP) in September
1985 that purchased 488,376 shares of common stock for allocation to employees
over a 10-year period. To finance this purchase, the trustee of the ESOP
borrowed $6.7 million through a 10-year term loan that is secured by the
unallocated shares and guaranteed by the Company. The Company accrued $648,000
in 1993, $578,000 in 1992, and $585,000 in 1991 for contribution to the ESOP.
Other Post-Retirement Benefits
The Company provides certain health care and life insurance benefits to retired
employees that are currently charged to expense when paid.
In December 1990, the FASB issued its Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions" (SFAS 106) which requires an accrual method of accounting for
postretirement benefits, similar to that presently in effect for pension plans.
Under the accrual method, the cost of providing postretirement benefits to an
<PAGE>
-24-
employee would be recognized over the employee's service period. The Company
will adopt SFAS 106 in the first quarter of fiscal 1994.
The Company's currently estimates that the transition obligation associated
with SFAS 106 is approximately $8.6 million, which will be amortized over 20
years, and its annual expense would increase to from $400,000 to $1.5 million,
of which over 95% relates to NJNG. NJNG has requested recovery of the
incremental SFAS 106 expenses in its current base rate proceeding; however, no
assurance can be given as to the timing or extent of the ultimate recovery of
these costs through the ratemaking process.
9. Commitments and Contingent Liabilities
Capital expenditures are estimated at $80 million and $91 million in fiscal
1994 and 1995, respectively, and consist primarily of expenditures required by
NJNG to maintain its distribution system and support its customer growth. Over
the next two years, the Company's non-regulated expenditures are expected to
focus on reserve acquisitions and development activities of up to $38 million
as well as development costs and equity investments in natural gas-fired
cogeneration plants of up to $23 million. Future real estate capital
expenditures will be limited to previously committed and build-to-suit projects
as approved by the Board of Directors.
NJNG is participating in environmental investigations and preparation of
proposals for remedial action at 11 former MGP sites. Through a remediation
rider which was approved in its June 1992 base rate order, NJNG is recovering
$2.8 million of previously unrecovered expenditures over a seven-year period.
Costs incurred subsequent to June 30, 1992 will be reviewed annually and,
subject to BRC approval, recovered over seven-year periods. A total of
$670,000 of such costs are included in a pending gas remediation filing. At
September 30, 1993, NJNG estimates that it will incur additional expenditures
of approximately $10 million over the next five years for further investigation
and remedial action at these sites. Accordingly, this amount is reflected in
both Deferred charges and other and Other deferred credits on the Consolidated
Balance Sheets.
NJNR Pipeline Company (Pipeline), a wholly owned subsidiary of NJR Energy, owns
a 2.8% equity interest in the Iroquois Gas Transmission System, L.P. (Iroquois)
which has constructed and is operation a 375-mile, natural gas pipeline from
the Canadian border to Long Island. Pipeline has pledged its equity interest
as security for Iroquois' bank financing, which is to be released once a
specific debt service coverage has been achieved. The Company expects the
pledge to be released in fiscal 1994. At September 30, 1993, Pipeline's net
investment in Iroquois was $5.3 million. In addition, the Company has
guaranteed a pro-rata share of a debt service letter of credit obtained by
Iroquois. At September 30, 1993 such guarantee totaled $1.1 million. The
Company does not expect to incur any cash requirements under the guarantee.
The Company is party to various claims, legal actions and complaints arising in
the ordinary course of business. In management's opinion, the ultimate
disposition of these matters will not have a material adverse effect on either
its financial condition or results of operations.
10. Business Segment Data
Information related to the Company's various business segments, excluding
capital expenditures, which are presented in the Consolidated Statements of
Cash Flows, is detailed below:
<PAGE>
-25-
For the Years Ended September 30, 1993 1992 1991
- ------------------------------------------------------------------------
(Thousands)
Operating revenues
Natural gas distribution $436,587 $383,103 $317,792
Real estate 12,554 12,530 11,436
Oil and gas 9,018 9,060 10,158
- ------------------------------------------------------------------------
Total before eliminations 458,159 404,693 339,386
Eliminations (intersegment revenues (3,413) (3,955) (3,793)
- ------------------------------------------------------------------------
Total $454,746 $400,738 $335,593
========================================================================
Depreciation and amortization
Natural gas distribution $ 19,070 $ 17,602 $ 16,110
Real estate 1,924 1,834 1,752
Oil and gas 4,202 4,272 5,392
Other 209 210 206
- ------------------------------------------------------------------------
Total $ 25,405 $ 23,918 $ 23,460
========================================================================
Operating income before income taxes
Natural gas distribution $ 56,773 $ 51,384 $ 34,204
Real estate 5,976 6,187 5,642
Oil and gas (1,871) (1,509) (1,624)
Other (21) 323 (1,687)
- ------------------------------------------------------------------------
Total $ 60,857 $ 56,385 $ 36,535
========================================================================
Assets at year end
Natural gas distribution $597,508 $531,902 $516,607
Real estate 94,608 93,817 92,428
Oil and gas 41,391 38,706 38,259
Other 5,155 4,180 4,567
- ------------------------------------------------------------------------
Total $738,662 $668,605 $651,861
========================================================================
11. Selected Quarterly Data (Unaudited)
A summary of financial data for each fiscal quarter of 1993 and 1992 follows.
Due to the seasonal nature of the Company's utility business, quarterly amounts
vary significantly during the year. Fiscal 1992 quarterly operating revenues
have been adjusted to reflect a $12 million billing credit to customers (See
Note 7: Regulatory Issues). This adjustment had no impact on operating income,
net income available for common stock or earnings per common share. In the
opinion of management, the information furnished reflects all adjustments
necessary for a fair presentation of the results of the interim periods.
</TABLE>
<TABLE> <CAPTION>
(Thousands) First Quarter Second Quarter Third Quarter Fourth Quarter
<S> <C> <C> <C> <C>
1993
Operating revenues $132,647 $189,465 $75,734 $56,900
Operating income 15,445 27,759 5,912 (216)
Net income available for common stock 9,740 21,973 861 (5,412)
Earnings per common share .59 1.33 .05 (.32)
1992
Operating revenues $104,342 $166,383 $76,747 $53,266
Operating income 12,016 25,644 6,674 1,210
Net income available for common stock 6,077 19,955 990 (4,775)
Earnings per common share .43 1.40 .07 (.33)
</TABLE>
<PAGE>
-26-
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K are
hereby amended and restated a follows as a result of a change in
accounting principle as discussed in Note 1 to the Consolidated
Financial Statements:
(a) (1) Financial Statements 10-K/A
Page
------
Consolidated Balance Sheets as of September 30, 1993 and 1992 15
Consolidated Statements of Income for the Years Ended
September 30, 1993, 1992 and 1991 13
Consolidated Statements of Cash Flows for the Years Ended
September 30, 1993, 1992 and 1991 14
Consolidated Statements of Capitalization as of September
30, 1993 and 1992 16
Consolidated Statements of Common Stock Equity for the 13
Years Ended September 30, 1993, 1992 and 1991
Notes to Consolidated Financial Statements 17
Independent Auditors' Report 12
(2) Financial Statement Schedules - See Index to Financial
Statement Schedules 27
(3) Exhibits - See Exhibit Index 35
(b) The Company did not file a Form 8-K during the quarter ended
September 30, 1993.
<PAGE>
-27-
NEW JERSEY RESOURCES CORPORATION
INDEX TO FINANCIAL STATEMENT SCHEDULES
Page
----
Schedule V - Property, plant and equipment for each of the
three years in the period ended September 30, 1993 28-30
Schedule VI - Accumulated depreciation and amortization
for each of the three years in the period ended
September 30, 1993 31
Schedule VIII - Valuation and qualifying accounts and
reserves for each of the three years in the period
ended September 30, 1993 32
Schedule X - Supplementary income statement information
for each of the three years in the period ended
September 30, 1993 33
Schedules other than those listed above are omitted because they are not
required or are not applicable, or the required information is shown in the
financial statements or notes thereto.
<PAGE>
-28-
Schedule V
<TABLE> <CAPTION>
NEW JERSEY RESOURCES CORPORATION
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED SEPTEMBER 30, 1993*
- --------------------------------------------------------------------------------------------------------
BALANCE BALANCE
AT ADDITIONS AT END
BEGINNING AT RETIRE- OTHER OF
CLASSIFICATION OF YEAR COST MENTS CHANGES YEAR
- --------------------------------------------------------------------------------------------------------
($000)
<S> <C> <C> <C> <C> <C>
Utility Plant In Service
Intangible $ 22 $ 22
Manufactured Gas 1,041 $ 825 216
Local Storage 24,963 $ 26 24,989
Transmission 62,916 406 97 63,225
Distribution 452,311 35,621 1,555 $(139) (A) 486,238
General 23,062 5,638 976 139 (A) 27,863
--------- -------- --------- ----- ---------
564,315 41,691 3,453 0 602,553
Work in Progress 20,586 11,729 (B) (1,270) (C) 31,045
Property Under Capital
Leases 4,007 (25) (D) 3,982
--------- ---------- -------- ----- ---------
Total 588,908 53,420 3,453 (1,295) 637,580
Real Estate Properties 99,522 2,869 (22) (A) 102,369
(21) (A)
Oil and Gas Properties 57,398 9,216 (2,017) (E) 64,576
--------- -------- -------- --------- ---------
$745,828 $65,505 $3,453 $(3,355) $804,525
======== ======= ====== ========= ========
</TABLE>
Notes: (A) Miscellaneous adjustment.
(B) Net of transfers to Utility Plant in Service.
(C) Net change in Other Work in Progress.
(D) Net change in Property Under Capital Leases.
(E) Exploratory dry holes.
* Restated to reflect the change in accounting principle by NJR Energy to the
successful efforts method for its oil and gas operations from the full cost
method.
<PAGE>
-29-
Schedule V
<TABLE> <CAPTION>
NEW JERSEY RESOURCES CORPORATION
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED SEPTEMBER 30, 1992*
- --------------------------------------------------------------------------------------------------------
BALANCE BALANCE
AT ADDITIONS AT END
BEGINNING AT RETIRE- OTHER OF
CLASSIFICATION OF YEAR COST MENTS CHANGES YEAR
- --------------------------------------------------------------------------------------------------------
($000)
<S> <C> <C> <C> <C> <C>
Utility Plant In Service
Intangible $ 22 $ 22
Manufactured Gas 1,042 $ 1 1,041
Local Storage 23,231 $ 1,740 8 24,963
Transmission 58,232 4,687 3 62,916
Distribution 423,701 29,962 1,035 $ (317) (A) 452,311
General 19,851 3,190 296 317 (A) 23,062
--------- -------- ------- -------- ---------
526,079 39,579 1,343 0 564,315
Work in Progress 21,939 (1,715) (B) 362 (C) 20,586
Property Under Capital
Leases 4,501 (494) (D) 4,007
--------- ---------- -------- ---- ---------
Total 552,519 37,864 1,343 (132) 588,908
Real Estate Properties 96,832 4,397 1,707 99,522
(4)(A)
(2,184)(E)
Oil and Gas Properties 53,423 5,333 830 (F) 57,398
--------- -------- -------- ----- ---------
$702,774 $47,594 $3,050 $(1,490) $745,828
======== ======= ====== ======== ========
</TABLE>
Notes: (A) Miscellaneous adjustment.
(B) Net of transfers to Utility Plant in Service.
(C) Net change in Other Work in Progress.
(D) Net change in Property Under Capital Leases.
(E) Exploratory dry holes.
(F) Note receivable converted to Oil and Gas Properties.
* Restated to reflect the change in accounting principle by NJR Energy to the
successful efforts method for its oil and gas operations from the full cost
method.
<PAGE>
-30-
Schedule V
NEW JERSEY RESOURCES CORPORATION
<TABLE> <CAPTION>
PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED SEPTEMBER 30, 1991*
- --------------------------------------------------------------------------------------------------------
BALANCE BALANCE
AT ADDITIONS AT END
BEGINNING AT RETIRE- OTHER OF
CLASSIFICATION OF YEAR COST MENTS CHANGES YEAR
- --------------------------------------------------------------------------------------------------------
($000)
<S> <C> <C> <C> <C> <C>
Utility Plant In Service
Intangible $ 22 $ 22
Manufactured Gas 1,042 1,042
Local Storage 23,123 $ 108 23,231
Transmission 57,281 1,014 $ 63 58,232
Distribution 388,897 35,708 841 $(63) (A) 423,701
General 16,463 3,512 156 32 (A) 19,851
-------- -------- ------- ------- ---------
486,828 40,342 1,060 (31) 526,079
Work in Progress 22,024 2,672 (B) (2,757) (C) 21,939
Property Under Capital
Leases 5,605 (1,104) (D) 4,501
-------- --------- -------- ------- ---------
Total 514,457 43,014 1,060 (3,892) 552,519
Real Estate Properties 90,979 6,321 468 96,832
(1) (A)
Oil and Gas Properties 48,097 8,016 (2,689) (E) 53,423
--------- -------- -------- ---------- ---------
$653,533 $57,351 $1,528 $(6,582) $702,774
======== ======= ====== ======== ========
</TABLE>
Notes: (A) Miscellaneous adjustment.
(B) Net of transfers to Utility Plant in Service.
(C) Net increase in Other Work in Progress.
(D) Net increase in Property Under Capital Leases.
(E) Exploratory dry holes.
* Restated to reflect the change in accounting principle by NJR Energy to the
successful efforts method for its oil and gas operations from the full cost
method.
<PAGE>
-31-
Schedule VI
<TABLE> <CAPTION>
NEW JERSEY RESOURCES CORPORATION
ACCUMULATED DEPRECIATION AND AMORTIZATION
YEARS ENDED SEPTEMBER 30, 1993, 1992, 1991*
- --------------------------------------------------------------------------------------------------------
BALANCE BALANCE
AT ADDITIONS AT END
BEGINNING AT RETIRE- OTHER OF
CLASSIFICATION OF YEAR COST MENTS CHANGES YEAR
- --------------------------------------------------------------------------------------------------------
($000)
<S> <C> <C> <C> <C> <C>
1993
Utility Plant $138,288 $19,070 $3,456 $(1,752) (A) $152,150
Property Under
Capital Leases 3,076 392 (B) 3,468
Real Estate Properties 8,758 1,924 (22) (C) 10,660
Oil and Gas Properties 28,478 4,202 (83) (C) 32,597
Other - 209 (209) (D) -
----------- -------- -------- -------- ----------
Total $178,600 $25,405 $3,456 $(1,674) $198,875
======== ======= ====== ======= ========
1992
Utility Plant $123,945 $17,602 $1,343 $(1,916) (A) $138,288
Property Under
Capital Leases 3,102 (26) (B) 3,076
Real Estate Properties 7,577 1,834 653 8,758
Oil and Gas Properties 24,241 4,272 (35) (C) 28,478
Other - 210 (210) (D) -
----------- -------- -------- -------- -----------
Total $158,865 $23,918 $1,996 $(2,187) $178,600
======== ======= ====== ======= ========
1991
Utility Plant $110,376 $16,110 $1,060 $(1,481) (A) $123,945
Property Under
Capital Leases 3,777 (675) (B) 3,102
Real Estate Properties 5,847 1,752 22 7,577
Oil and Gas Properties 18,863 5,392 (14) (C) 24,241
Other - 206 (206) (D) -
----------- -------- -------- -------- -----------
Total $138,863 $23,460 $1,082 $(2,376) $158,865
======== ======= ====== ======= ========
</TABLE>
Notes: (A) Represents cost of removal, less salvage.
(B) Net amortization of leased assets reflected in other operating
expenses.
(C) Miscellaneous adjustments.
(D) Reclassification.
* Restated to reflect the change in accounting principle by NJR Energy to the
successful efforts method for its oil and gas operations from the full cost
method.
<PAGE>
-32-
Schedule VIII
<TABLE> <CAPTION>
NEW JERSEY RESOURCES CORPORATION
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEARS ENDED SEPTEMBER 30, 1993, 1992, 1991
BALANCE
- --------------------------------------------------------------------------------------------------------
BALANCE ADDITIONS BALANCE
AT CHARGED AT END
BEGINNING TO OF
CLASSIFICATION OF YEAR EXPENSE DEDUCTIONS YEAR
- --------------------------------------------------------------------------------------------------------
($000)
<S> <C> <C> <C> <C>
1993:
Reserves deducted
from assets to which
they apply
Doubtful Accounts $598 $1,397 $1,311 (1) $684
===== ====== ========== =====
Materials and Supplies $ 48 $ - $ - $ 48
===== ======= =========== =====
1992:
Reserves deducted
from assets to which
they apply
Doubtful Accounts $385 $2,233 $2,020 (1) $598
==== ====== ============ ====
Materials and Supplies $295 $ 332 $ 579 (2) $ 48
==== ====== ============ ====
1991:
Reserves deducted
from assets to which
they apply
Doubtful Accounts $396 $1,314 $1,325 (1) $385
===== ====== =========== ====
Materials and Supplies $200 $ 155 $ 60 (2) $295
===== ======= =========== ====
</TABLE>
Notes: (1) Uncollectible accounts written off, less recoveries.
(2) Obsolete inventory written off, less salvage.
<PAGE>
-33-
Schedule X
<TABLE> <CAPTION>
NEW JERSEY RESOURCES CORPORATION
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED SEPTEMBER 30, 1993, 1992, 1991
- -------------------------------------------------------------------------------------------------------------------
CHARGED TO EXPENSES
ITEM 1993 1992 1991 ($000)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maintenance $6,438 $ 7,253 $ 7,349
====== ======= =======
Taxes, other than income taxes
Real estate and personal property taxes . . . . . . . . . $1,635 $ 1,503 $ 1,205
New Jersey gross receipts and franchise taxes . . . . . . 47,911 48,083 40,674
Social Security and other payroll taxes . . . . . . . . . 2,488 2,316 2,132
New Jersey sales and use tax . . . . . . . . . . . . . . . 488 483 503
Other State taxes . . . . . . . . . . . . . . . . . . . . 197 227 975
------- ---- --------
Total . . . . . . . . . . . . . . . . . . . . . . . . . $52,719 $52,612 $45,489
======= ======= =======
</TABLE>
Note: Royalties and advertising costs have been omitted since they do not
exceed 1% of total revenues.
<PAGE>
-34-
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
NEW JERSEY RESOURCES CORPORATION
--------------------------------
(Registrant)
Date: April 28, 1994 By:/s/Laurence M. Downes
---------------------------
Laurence M. Downes
Senior Vice President and
Chief Financial Officer
Date: April 28, 1994 By:/s/Glenn C. Lockwood
----------------------
Glenn C. Lockwood
Vice President and Controller
<PAGE>
-35-
EXHIBIT INDEX
<TABLE> <CAPTION>
Previous Filing
Reg. S-K -----------------------------
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
- ---- --------- ---------------------------------------------------- --------- -------
<S> <C> <C> <C> <C>
3-1 3 Restated Certificate of Incorporation of the The Company's 3-1
Company, as amended Quarterly Report
on Form 10-Q for
the quarter ended
March 31, 1992
3-2 By-laws of the Company, as presently in effect The Company's 3-2
Quarterly Report
on Form 10-Q for
the quarter ended
March 31, 1992
4-1 4 Specimen Common Stock Certificates 33-21872 4-1
4-2 Indenture of Mortgage and Deed of Trust 2-9569 4(g)
with Harris Trust and Savings Bank, as
Trustee, dated April 1, 1952
4-2A First Supplemental Indenture, dated 2-16374 4(B)(2)
February 1, 1958
4-2B Second Supplemental Indenture, dated 2-38344 2(d)
December 1, 1960
4-2C Third Supplemental Indenture, dated 2-38344 2(e)
July 1, 1962
4-2D Fourth Supplemental Indenture, dated 2-38344 2(f)
September 1, 1962
4-2E Fifth Supplemental Indenture, dated 2-38344 2(g)
December 1, 1963
4-2F Sixth Supplemental Indenture, dated 2-38344 2(h)
June 1, 1966
4-2G Seventh Supplemental Indenture, dated 2-38344 2(i)
October 1, 1970
4-2H Eighth Supplemental Indenture, dated 2-66760 2-E-8
May 1, 1975
<PAGE>
-36-
<CAPTION>
EXHIBIT INDEX
Previous Filing
Reg. S-K ---------------------
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
- ---- --------- ---------------------------------------------------- ------ -------
<S> <C> <C> <C> <C>
4-2I Ninth Supplemental Indenture, dated 2-66760 2-E-9
February 1, 1977
4-2J Tenth Supplemental Indenture, 2-73181 4(C)(V)
dated as of September 1, 1980
4-2K Eleventh Supplemental Indenture, Note (2) 4-2K
dated as of September 1, 1983
4-2L Twelfth Supplemental Indenture, Note (3) 4-2L
dated as of August 1, 1984
4-2M Thirteenth Supplemental Indenture, Note (4) 4-2M
dated as of September 1, 1985
4-2N Fourteenth Supplemental Indenture, Note (5) 4-2N
dated as of May 1, 1986
4-2O Fifteenth Supplemental Indenture, Note (6) 4-2O
dated as of March 1, 1987
4-2P Sixteenth Supplemental Indenture, Note (6) 4-2P
dated as of December 1, 1987
4-2Q Seventeenth Supplemental Indenture, Note (7) 4-2Q
dated as of June 1, 1988
4-2R Eighteenth Supplemental Indenture, 33-30034 4-2R
dated as of June 1, 1989
4-2S Nineteenth Supplemental Indenture, Note (10) 4-2S
dated as of March 1, 1991
4-2T Twentieth Supplemental Indenture, Note (11) 4-2T
dated as of December 1, 1992
4-2U Twenty-First Supplemental Indenture, Note (12) 4-2U
dated as of August 1, 1993
4-2V Twenty-Second Supplemental Indenture, Note (12) 4-2V
dated as of October 1, 1993
<PAGE>
-37-
<CAPTION>
EXHIBIT INDEX
Previous Filing
Reg. S-K ---------------------
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
- ---- --------- ---------------------------------------------------- ------ -------
<S> <C> <C> <C> <C>
4-3 Term Loan Agreement between New Jersey Note (8) 4-3
Resources Corporation and Union Bank of
Switzerland, dated January 31, 1987
4-4 Revolving Credit Agreement between New Jersey Note (8) 4-4
Resources Corporation and Swiss Bank Corporation,
dated September 6, 1989
4-5 Amended and Restated Note and Credit The Company's 4-5
Agreement between New Jersey Resources Quarterly Report
Corporation and First Fidelity Bank, on Form 10-Q for
dated May 7, 1993 the quarter ended
June 30, 1993
4-6 Revolving Credit Agreement between New Jersey Note (10) 4-6
Resources Corporation and Union Bank of
Switzerland, dated September 28, 1990
4-7 Revolving Credit and Term Loan Agreement Note (10) 4-7
between New Jersey Resources Corporation and
Midlantic National Bank, dated December 20, 1990
4-8 Revolving Credit Agreement between New Jersey Note (10) 4-8
Resources Corporation and Union Bank of
Switzerland, dated December 31, 1990
4-9 Credit Agreement between New Jersey Resources Note (10) 4-9
Corporation and J.P. Morgan Delaware,
dated August 1, 1991
4-10 Revolving Credit Agreement between New Jersey Note (10) 4-10
Resources Corporation and Swiss Bank Corporation,
dated September 30, 1991
10-1 10 Agreements between NJNG and Texas Eastern
Transmission Corporation:
10-1A Dated September 27, 1967 2-38344 4(c)
<PAGE>
-38-
<CAPTION>
EXHIBIT INDEX
Previous Filing
Reg. S-K ---------------------
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
- ---- --------- ---------------------------------------------------- ------ -------
<S> <C> <C> <C> <C>
10-1B Dated September 27, 1967 2-73181 10.(a)(ii)
10-1C Dated September 27, 1969 2-38344 4(a)
10-1D Dated September 27, 1969 2-38344 4(b)
10-1E Dated August 11, 1989, as amended 2-73181 10.(a)(v)
10-1F Dated October 28, 1982 Note (1) 10.(a)(vi)
10-1G Dated December 24, 1984 Note (4) 10-1G
10-1H Dated September 27, 1967 33-12437 10-1H
10-1I Dated October 12, 1981 33-12437 10-1I
10-1J Dated August 22, 1986 33-12437 10-1J
10-1K Dated October 27, 1986 33-12437 10-1K
10-1L Dated October 13, 1989 Note (8) 10-1L
10-1M Dated October 13, 1989 Note (8) 10-1M
10-1N Dated October 13, 1989 Note (8) 10-1N
10-1O Dated October 13, 1989 Note (8) 10-10
10-2 Agreements between NJNG and Algonquin Gas
Transmission Company:
10-2A Dated September 8, 1967 2-38344 4(d)
10-2B Dated September 8, 1967 2-38344 4(e)
10-2C Dated June 20, 1986 33-12437 10-2C
10-2D Dated June 20, 1986 33-12437 10-2D
10-3 Agreements between NJNG and Distrigas of 2-73181 10(d)
Massachusetts Corporation, dated
November 5, 1979
<PAGE>
-39-
<CAPTION>
EXHIBIT INDEX
Previous Filing
Reg. S-K ---------------------
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
- ---- --------- ---------------------------------------------------- ------ -------
<S> <C> <C> <C> <C>
10-4 Agreements between NJNG and Consolidated
Gas Transmission Corporation:
Dated November 16, 1983 Note (3) 10-6
10-4A Dated July 12, 1985 Note (4) 10-6A
10-4B Dated January 30, 1984 33-12437 10-4L
10-5 Agreements between NJNG and National Fuel Gas Note (3) 10-7
Supply Corporation, dated February 27, 1984
10-6 Agreement between NJNG and Boundary Gas Inc., Note (3) 10-8
dated March 6, 1984
10-7 Retirement Plan for Represented Employees, as 2-73181 10(f)
amended October 1, 1984
10-8 Retirement Plan for Non-Represented Employees, 2-73181 10(g)
as amended October 1, 1985
10-9 Supplemental Retirement Plans covering all Note (5) 10-9
Executive Officers as described in the
Registrant's definitive proxy statement
incorporated herein by reference
10-10 Agreement between NJNG and Carnegie Natural 33-12437 10-10
Gas Company, dated June 18, 1986
10-11 Agreements between NJNG and Transcontinental
Gas Pipe Line Corporation:
Dated April 1, 1989 Note (9) 10-11
10-11A Dated October 30, 1989 Note (9) 10-11A
10-12 Agreement between NJNG and Steuben Gas Note (9) 10-12
Storage Company, dated June 19, 1989
10-13 Agreements between NJNG and Alberta Northeast Note (11) 10-13
Gas Limited, dated February 7, 1991
10-14 Agreement between NJNG and Iroquois Gas Note (11) 10-14
Transmission System, L.P., dated February 7, 1991
<PAGE>
-40-
<CAPTION>
EXHIBIT INDEX
Previous Filing
Reg. S-K ---------------------
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
- ---- --------- ---------------------------------------------------- ------ -------
<S> <C> <C> <C> <C>
10-15 Agreement between NJNG and CNG Energy The Company's 10-15
Company, dated November 23, 1988 Quarterly Report
on Form 10-Q for
the quarter ended
December 31, 1992
13-1 13 1993 Annual Report to Stockholders. Such Note (12) 13-1
report, except for those portions thereof
which are expressly incorporated by reference
in this Form 10-K, is furnished for the
information of the Securities and Exchange
Commission and is not to be deemed "filed"
as a part of this Form 10-K
21-1 21 Subsidiaries of the Registrant Note (12) 21-1
23-1 23 Independent Auditors' Consent
Note (1) 1982 Form 10-K File No. 1-8359
Note (2) 1983 Form 10-K File No. 1-8359
Note (3) 1984 Form 10-K File No. 1-8359
Note (4) 1985 Form 10-K File No. 1-8359
Note (5) 1986 Form 10-K File No. 1-8359
Note (6) 1987 Form 10-K File No. 1-8359
Note (7) 1988 Form 10-K File No. 1-8359
Note (8) 1989 Form 10-K File No. 1-8359
Note (9) 1990 Form 10-K File No. 1-8359
Note (10) 1991 Form 10-K File No. 1-8359
Note (11) 1992 Form 10-K File No. 1-8359
Note (12) 1993 Form 10-K File No. 1-8359
</TABLE>
-41-
EXHIBIT 23-1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements Nos.
33-42288, 33-52409 and 33-23790 of New Jersey Resources Corporation on Forms
S-8, S-8 and S-3, respectively, of our report dated November 1, 1993, (April
28, 1994 as to Note 1) appearing in this Annual Report on Form 10-K/A of New
Jersey Resources Corporation for the year ended September 30, 1993.
DELOITTE & TOUCHE
Parsippany, New Jersey
April 28, 1994
