NATIONAL FUEL GAS CO, 10-Q filed on 8/9/2013
Quarterly Report
Document And Entity Information
9 Months Ended
Jun. 30, 2013
Jul. 31, 2013
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 30, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q3 
 
Entity Registrant Name
NATIONAL FUEL GAS CO 
 
Entity Central Index Key
0000070145 
 
Current Fiscal Year End Date
--09-30 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
83,617,599 
Trading Symbol
nfg 
 
Consolidated Statements Of Income And Earnings Reinvested In The Business (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
INCOME
 
 
 
 
Operating Revenues
$ 440,008 
$ 328,861 
$ 1,490,688 
$ 1,313,593 
Operating Expenses
 
 
 
 
Purchased Gas
95,164 
50,160 
426,900 
390,889 
Operation and Maintenance
108,497 
93,749 
338,533 
311,857 
Property, Franchise and Other Taxes
21,201 
20,432 
63,550 
70,138 
Depreciation, Depletion and Amortization
88,142 
74,227 
240,503 
199,925 
Total Operating Expenses
313,004 
238,568 
1,069,486 
972,809 
Operating Income
127,004 
90,293 
421,202 
340,784 
Other Income (Expense):
 
 
 
 
Interest Income
317 
390 
1,844 
1,686 
Other Income
1,163 
1,086 
3,666 
4,076 
Interest Expense on Long-Term Debt
(22,998)
(21,529)
(67,232)
(60,594)
Other Interest Expense
(1,303)
(828)
(2,898)
(2,851)
Income Before Income Taxes
104,183 
69,412 
356,582 
283,101 
Income Tax Expense
45,688 
26,228 
144,423 
111,826 
Net Income Available for Common Stock
58,495 
43,184 
212,159 
171,275 
EARNINGS REINVESTED IN THE BUSINESS
 
 
 
 
Balance at Beginning of Period
1,398,999 
1,275,107 
1,306,284 
1,206,022 
Beginning Retained Earnings Unappropriated And Current Period Net Income Loss
1,457,494 
1,318,291 
1,518,443 
1,377,297 
Dividends on Common Stock
(31,346)
(30,393)
(92,295)
(89,399)
Balance at June 30
$ 1,426,148 
$ 1,287,898 
$ 1,426,148 
$ 1,287,898 
Earnings Per Common Share, Basic:
 
 
 
 
Net Income Available for Common Stock
$ 0.70 
$ 0.52 
$ 2.54 
$ 2.06 
Diluted:
 
 
 
 
Net Income Available for Common Stock
$ 0.69 
$ 0.52 
$ 2.52 
$ 2.05 
Weighted Average Common Shares Outstanding:
 
 
 
 
Used in Basic Calculation
83,557,968 
83,227,602 
83,481,849 
83,068,083 
Used in Diluted Calculation
84,325,465 
83,674,823 
84,242,128 
83,690,436 
Dividends Per Common Share:
 
 
 
 
Dividends Declared
$ 0.375 
$ 0.365 
$ 1.105 
$ 1.075 
Consolidated Statements Of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Consolidated Statements Of Comprehensive Income [Abstract]
 
 
 
 
Net Income Available for Common Stock
$ 58,495 
$ 43,184 
$ 212,159 
$ 171,275 
Other Comprehensive Income (Loss), Before Tax:
 
 
 
 
Unrealized Gain (Loss) on Securities Available for Sale Arising During the Period
331 
(1,870)
3,104 
1,959 
Unrealized Gain on Derivative Financial Instruments Arising During the Period
101,866 
30,432 
89,865 
47,085 
Reclassification Adjustment for Realized Gains on Derivative Financial Instruments in Net Income
(1,885)
(21,599)
(23,973)
(49,649)
Other Comprehensive Income (Loss), Before Tax
100,312 
6,963 
68,996 
(605)
Income Tax Expense (Benefit) Related to Unrealized Gain on Securities Available for Sale Arising During the Period
123 
(701)
1,160 
723 
Income Tax Expense Related to Unrealized Gain on Derivative Financial Instruments Arising During the Period
42,566 
12,688 
37,490 
14,346 
Reclassification Adjustment for Income Tax Expense on Realized Gains from Derivative Financial Instruments in Net Income
(791)
(8,973)
(10,065)
(15,433)
Income Taxes - Net
41,898 
3,014 
28,585 
(364)
Other Comprehensive Income (Loss)
58,414 
3,949 
40,411 
(241)
Comprehensive Income
$ 116,909 
$ 47,133 
$ 252,570 
$ 171,034 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Sep. 30, 2012
ASSETS
 
 
Property, Plant and Equipment
$ 7,102,369 
$ 6,615,813 
Less - Accumulated Depreciation, Depletion and Amortization
2,088,337 
1,876,010 
Property, Plant and Equipment, Net, Total
5,014,032 
4,739,803 
Current Assets
 
 
Cash and Temporary Cash Investments
134,582 
74,494 
Hedging Collateral Deposits
694 1
364 1
Receivables - Net of Allowance for Uncollectible Accounts of $34,887 and $30,317, Respectively
165,047 
115,818 
Unbilled Utility Revenue
13,643 
19,652 
Gas Stored Underground
22,180 
49,795 
Materials and Supplies - at average cost
31,641 
28,577 
Other Current Assets
46,205 
56,121 
Deferred Income Taxes
15,148 
10,755 
Total Current Assets
429,140 
355,576 
Other Assets
 
 
Recoverable Future Taxes
152,122 
150,941 
Unamortized Debt Expense
17,227 
13,409 
Other Regulatory Assets
556,449 
546,851 
Deferred Charges
8,051 
7,591 
Other Investments
93,749 
86,774 
Goodwill
5,476 
5,476 
Fair Value of Derivative Financial Instruments
65,170 
27,616 
Other
2,524 
1,105 
Total Other Assets
900,768 
839,763 
Total Assets
6,343,940 
5,935,142 
Capitalization:
 
 
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 83,587,858 Shares and 83,330,140 Shares, Respectively
83,588 
83,330 
Paid in Capital
686,038 
669,501 
Earnings Reinvested in the Business
1,426,148 
1,306,284 
Accumulated Other Comprehensive Loss
(58,609)
(99,020)
Total Comprehensive Shareholders' Equity
2,137,165 
1,960,095 
Long-Term Debt, Net of Current Portion
1,649,000 
1,149,000 
Total Capitalization
3,786,165 
3,109,095 
Current and Accrued Liabilities
 
 
Notes Payable to Banks and Commercial Paper
171,000 
Current Portion of Long-Term Debt
250,000 
Accounts Payable
77,466 
87,985 
Amounts Payable to Customers
12,386 
19,964 
Dividends Payable
31,346 
30,416 
Interest Payable on Long-Term Debt
18,976 
29,491 
Customer Advances
246 
24,055 
Customer Security Deposits
16,830 
17,942 
Other Accruals and Current Liabilities
109,933 
79,099 
Fair Value of Derivative Financial Instruments
2,217 
24,527 
Total Current and Accrued Liabilities
269,400 
734,479 
Deferred Credits
 
 
Deferred Income Taxes
1,237,727 
1,065,757 
Taxes Refundable to Customers
65,069 
66,392 
Unamortized Investment Tax Credit
1,685 
2,005 
Cost of Removal Regulatory Liability
151,846 
139,611 
Other Regulatory Liabilities
33,247 
21,014 
Pension and Other Post-Retirement Liabilities
511,516 
516,197 
Asset Retirement Obligations
126,879 
119,246 
Other Deferred Credits
160,406 
161,346 
Total Deferred Credits
2,288,375 
2,091,568 
Commitments and Contingencies
Total Capitalization and Liabilities
$ 6,343,940 
$ 5,935,142 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2013
Sep. 30, 2012
Consolidated Balance Sheets [Abstract]
 
 
Receivables, Allowance for Uncollectible Accounts
$ 34,887 
$ 30,317 
Common Stock, Par Value
$ 1 
$ 1 
Common Stock, Shares Authorized
200,000,000 
200,000,000 
Common Stock, Shares Issued
83,587,858 
83,330,140 
Common Stock, Shares Outstanding
83,587,858 
83,330,140 
Consolidated Statements Of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Operating Activities
 
 
Net Income Available for Common Stock
$ 212,159 
$ 171,275 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
 
 
Depreciation, Depletion and Amortization
240,503 
199,925 
Deferred Income Taxes
141,007 
104,948 
Excess Tax Benefits Associated with Stock-Based Compensation Awards
(4,314)
(1,511)
Other
19,744 
6,618 
Change in:
 
 
Hedging Collateral Deposits
(330)
16,309 
Receivables and Unbilled Utility Revenue
(43,138)
23,008 
Gas Stored Underground and Materials and Supplies
24,551 
30,853 
Unrecovered Purchased Gas Costs
(2,100)
Other Current Assets
14,228 
18,190 
Accounts Payable
11,241 
(5,825)
Amounts Payable to Customers
(7,578)
2,242 
Customer Advances
(23,809)
(19,328)
Customer Security Deposits
(1,112)
(474)
Other Accruals and Current Liabilities
3,534 
17,083 
Other Assets
(5,010)
(1,538)
Other Liabilities
5,557 
14,080 
Net Cash Provided by Operating Activities
587,233 
573,755 
Investing Activities
 
 
Capital Expenditures
(513,399)
(809,661)
Other
(3,885)
(1,267)
Net Cash Used in Investing Activities
(517,284)
(810,928)
Financing Activities
 
 
Changes in Notes Payable to Banks and Commercial Paper
(171,000)
30,200 
Excess Tax Benefits Associated with Stock-Based Compensation Awards
4,314 
1,511 
Net Proceeds from Issuance of Long-Term Debt
495,415 
496,085 
Reduction of Long-Term Debt
(250,000)
(150,000)
Dividends Paid on Common Stock
(91,364)
(88,404)
Net Proceeds from Issuance of Common Stock
2,774 
8,168 
Net Cash Provided by (Used in) Financing Activities
(9,861)
297,560 
Net Increase in Cash and Temporary Cash Investments
60,088 
60,387 
Cash and Temporary Cash Investments at October 1
74,494 
80,428 
Cash and Temporary Cash Investments at June 30
$ 134,582 
$ 140,815 
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies

 

 

Note 1 - Summary of Significant Accounting Policies

 

Principles of Consolidation.  The Company consolidates all entities in which it has a controlling financial interest.  All significant intercompany balances and transactions are eliminated.

 

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 

Reclassifications and Revisions.  Certain prior year amounts have been reclassified to conform with current year presentation.

 

Revisions were made on the Consolidated Statement of Cash Flows for the nine months ended June 30, 2012 to reflect non-cash investing activities embedded in Accounts Payable on the Consolidated Balance Sheets at June 30, 2012 and September 30, 2011.  These revisions increased the operating cash flows related to the change in Accounts Payable for the nine months ended June 30, 2012 by $32.8 million and decreased investing cash flows related to Capital Expenditures by the same amounts. 

 

In the subsequent period, revisions will be made on the Consolidated Statement of Cash Flows for the fiscal years ended September 30, 2012 and September 30, 2011 to reflect non-cash investing activities embedded in Accounts Payable on the Consolidated Balance Sheets for the respective periods.  The revisions for the fiscal years ended September 30, 2012 and September 30, 2011 will decrease operating cash flows by $1.8 million and $6.6 million, respectively, and increase investing cash flows related to Capital Expenditures by the same amounts.  The revisions in the Consolidated Statement of Cash Flows noted above represent errors that are not deemed material, individually or in the aggregate, to the prior period consolidated financial statements.

 

Earnings for Interim Periods.  The Company, in its opinion, has included all adjustments (which consist of only normally recurring adjustments, unless otherwise disclosed in this Form 10-Q) that are necessary for a fair statement of the results of operations for the reported periods. The consolidated financial statements and notes thereto, included herein, should be read in conjunction with the financial statements and notes for the years ended September 30, 2012, 2011 and 2010 that are included in the Company's 2012 Form 10-K.  The consolidated financial statements for the year ended September 30, 2013 will be audited by the Company's independent registered public accounting firm after the end of the fiscal year.

 

The earnings for the nine months ended June 30, 2013 should not be taken as a prediction of earnings for the entire fiscal year ending September 30, 2013.  Most of the business of the Utility and Energy Marketing segments is seasonal in nature and is influenced by weather conditions.  Due to the seasonal nature of the heating business in the Utility and Energy Marketing segments, earnings during the winter months normally represent a substantial part of the earnings that those segments are expected to achieve for the entire fiscal year.  The Company’s business segments are discussed more fully in Note 7 – Business Segment Information.

 

Consolidated Statement of Cash Flows.  For purposes of the Consolidated Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of generally three months or less to be cash equivalents.

 

The Company has accounts payable and accrued liabilities recorded on its Consolidated Balance Sheets that are related to capital expenditures.  These amounts represent non-cash investing activities at the balance sheet date.  Accordingly, they are excluded from the Consolidated Statement of Cash Flows when they are recorded as liabilities and included in the Consolidated Statement of Cash Flows when they are paid in the subsequent period.  The following table summarizes the Company’s non-cash capital expenditures recorded as Accounts Payable and Other Accruals and Current Liabilities on the Consolidated Balance Sheet:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30,

 

 

At September 30,

 

 

 

2013

 

 

2012

 

 

2012

 

 

2011

 

 

 

 

(Thousands)

Non-cash Capital Expenditures

 

 

$

58,632

 

 

$

118,624

 

 

$

67,503

 

 

$

125,115

 

Hedging Collateral Deposits.  This is an account title for cash held in margin accounts funded by the Company to serve as collateral for hedging positions.  The Company had hedging collateral deposits of $0.7 million and  $0.4 million related to its exchange-traded futures contracts at June 30, 2013 and September 30, 2012, respectively.  In accordance with its accounting policy, the Company does not offset hedging collateral deposits paid or received against related derivative financial instruments liability or asset balances.

 

Gas Stored Underground - Current.  In the Utility segment, gas stored underground – current is carried at lower of cost or market, on a LIFO method.  Gas stored underground – current normally declines during the first and second quarters of the year and is replenished during the third and fourth quarters.  In the Utility segment, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets under the caption “Other Accruals and Current Liabilities.”  Such reserve, which amounted to $22.0 million at June 30, 2013, is reduced to zero by September 30 of each year as the inventory is replenished.

 

Property, Plant and Equipment.  In the Company’s Exploration and Production segment, oil and gas property acquisition, exploration and development costs are capitalized under the full cost method of accounting. Under this methodology, all costs associated with property acquisition, exploration and development activities are capitalized, including internal costs directly identified with acquisition, exploration and development activities. The internal costs that are capitalized do not include any costs related to production, general corporate overhead, or similar activities. The Company does not recognize any gain or loss on the sale or other disposition of oil and gas properties unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center.

 

Capitalized costs include costs related to unproved properties, which are excluded from amortization until proved reserves are found or it is determined that the unproved properties are impaired.  Such costs amounted to $143.8 million and $146.1 million at June  30, 2013 and September 30, 2012, respectively.  All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. The amount of any impairment is transferred to the pool of capitalized costs being amortized.

 

Capitalized costs are subject to the SEC full cost ceiling test. The ceiling test, which is performed each quarter, determines a limit, or ceiling, on the amount of property acquisition, exploration and development costs that can be capitalized. The ceiling under this test represents (a) the present value of estimated future net cash flows, excluding future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, using a discount factor of 10%, which is computed by applying prices of oil and gas (as adjusted for hedging) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet, less estimated future expenditures, plus (b) the cost of unevaluated properties not being depleted, less (c) income tax effects related to the differences between the book and tax basis of the properties. The natural gas and oil prices used to calculate the full cost ceiling are based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the twelve-month period prior to the end of the reporting period. If capitalized costs, net of accumulated depreciation, depletion and amortization and related deferred income taxes, exceed the ceiling at the end of any quarter, a permanent impairment is required to be charged to earnings in that quarter.  At June  30, 2013, the ceiling exceeded the book value of the oil and gas properties by approximately  $199.1 million.

 

Accumulated Other Comprehensive Loss.  The components of Accumulated Other Comprehensive Loss, net of related tax effect, are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2013

 

At September 30, 2012

Funded Status of the Pension and Other Post-Retirement

 

 

 

 

 

 

Benefit Plans

 

$

(100,561)

 

$

(100,561)

Net Unrealized Gain (Loss) on Derivative Financial Instruments

 

 

36,865 

 

 

(1,602)

Net Unrealized Gain on Securities Available for Sale

 

 

5,087 

 

 

3,143 

Accumulated Other Comprehensive Loss

 

$

(58,609)

 

$

(99,020)

 

 

 

 

 

 

 

Other Current Assets.  The components of the Company’s Other Current Assets are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                            

 

At June 30, 2013

 

At September 30, 2012

 

 

 

 

 

 

 

Prepayments

 

$

10,472 

 

$

8,316 

Prepaid Property and Other Taxes

 

 

10,461 

 

 

14,455 

Federal Income Taxes Receivable

 

 

 -

 

 

268 

State Income Taxes Receivable

 

 

1,058 

 

 

2,065 

Fair Values of Firm Commitments

 

 

1,384 

 

 

1,291 

Regulatory Assets

 

 

22,830 

 

 

29,726 

 

 

$

46,205 

 

$

56,121 

 

Other Accruals and Current Liabilities.  The components of the Company’s Other Accruals and Current Liabilities are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                            

 

At June 30, 2013

 

At September 30, 2012

 

 

 

 

 

 

 

Accrued Capital Expenditures

 

$

49,348 

 

$

36,460 

Regulatory Liabilities

 

 

13,318 

 

 

18,289 

Reserve for Gas Replacement

 

 

22,032 

 

 

-

Other

 

 

25,235 

 

 

24,350 

 

 

$

109,933 

 

$

79,099 

 

Earnings Per Common Share.  Basic earnings per common share is computed by dividing net income available for common stock by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  For purposes of determining earnings per common share, the only potentially dilutive securities the Company has outstanding are stock options, SARs and restricted stock units.  The diluted weighted average shares outstanding shown on the Consolidated Statements of Income reflects the potential dilution as a result of these securities as determined using the Treasury Stock Method.  Stock options, SARs and restricted stock units that are antidilutive are excluded from the calculation of diluted earnings per common share.  There were 180,552 and 196,121 securities excluded as being antidilutive for the quarter and nine months ended June  30, 2013, respectively.  There were 976,870 and 833,170 securities excluded as being antidilutive for the quarter and nine months ended June 30, 2012, respectively.    

 

Stock-Based Compensation.  During the nine months ended June 30, 2013, the Company granted 412,970 SARs having a weighted average exercise price of $53.05 per share.  The weighted average grant date fair value of these SARs was $10.66 per share.  These SARs may be settled in cash, in shares of common stock of the Company, or in a combination of cash and shares of common stock of the Company, as determined by the Company.  These SARs are considered equity awards under the current authoritative guidance for stock-based compensation.  The accounting for those SARs is the same as the accounting for stock options.  The SARs granted during the nine months ended June  30, 2013 vest and become exercisable annually in one-third increments.  The weighted average grant date fair value of these SARs granted during the nine months ended June  30, 2013 was estimated on the date of grant using the same accounting treatment that is applied for stock options.  There were no stock options granted during the nine months ended June 30, 2013

 

The Company granted 255,604 performance based restricted stock units during the nine months ended June 30, 2013. The weighted average fair value of such performance based restricted stock units was $49.51 per share for the nine months ended June  30, 2013. The performance based restricted stock units granted during the nine months ended June  30, 2013 must meet a performance condition over the performance cycle of October 1, 2012 to September 30, 2015.  The performance condition over the performance cycle, generally stated, is the Company’s total return on capital as compared to the same metric for companies in the Natural Gas Distribution and Integrated Natural Gas Companies group as calculated and reported in the Monthly Utility Reports of AUS, Inc., a leading industry consultant.  The number of performance based restricted stock units that will vest will depend upon the Company’s performance relative to the report group and not upon the absolute level of return achieved by the Company.  The Company also granted 39,700 non-performance based restricted stock units during the nine months ended June 30, 2013.  The weighted average fair value of such non-performance based restricted stock units was $50.13 per share for the nine months ended June  30, 2013.

 

Restricted stock units, both performance based and non-performance based, represent the right to receive shares of common stock of the Company (or the equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company) at the end of a specified time period. The performance based and non-performance based restricted stock units do not entitle the participant to receive dividends during the vesting period. The accounting for performance based and non-performance based restricted stock units is the same as the accounting for restricted share awards, except that the fair value at the date of grant of the restricted stock units must be reduced by the present value of forgone dividends over the vesting term of the award. There were no restricted share awards granted during the nine months ended June  30, 2013

 

New Authoritative Accounting and Financial Reporting Guidance.  In December 2011, the FASB issued authoritative guidance requiring enhanced disclosures regarding offsetting assets and liabilities.  Companies are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement.  This authoritative guidance will be effective as of the Company’s first quarter of fiscal 2014 and is not expected to have a significant impact on the Company’s financial statements. 

 

In February 2013, the FASB issued authoritative guidance requiring enhanced disclosures regarding the reporting of amounts reclassified out of accumulated other comprehensive income.  The authoritative guidance requires parenthetical disclosure on the face of the financial statements or a single footnote that would provide more detail about the components of reclassification adjustments that are reclassified in their entirety to net income.  If a component of a reclassification adjustment is not reclassified in its entirety to net income, a cross reference would be made to the footnote disclosure that provides a more thorough discussion of the component involved in that reclassification adjustment.  This authoritative guidance will be effective as of the Company’s first quarter of fiscal 2014.  The Company does not expect this guidance to have a material impact.

Fair Value Measurements
Fair Value Measurements

Note 2 – Fair Value Measurements

 

The FASB authoritative guidance regarding fair value measurements establishes a fair-value hierarchy and prioritizes the inputs used in valuation techniques that measure fair value. Those inputs are prioritized into three levels. Level 1 inputs are unadjusted quoted prices in active markets for assets or liabilities that the Company can access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly at the measurement date. Level 3 inputs are unobservable inputs for the asset or liability at the measurement date. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

 

The following table sets forth, by level within the fair value hierarchy, the Company's financial assets and liabilities (as applicable) that were accounted for at fair value on a recurring basis as of June 30, 2013 and September 30, 2012.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring Fair Value Measures

 

At fair value as of June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Netting

 

 

 

(Thousands of Dollars)   

 

Level 1

 

Level 2

 

Level 3

 

Adjustments(1)

 

Total(1)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Equivalents – Money Market Mutual Funds

 

$

122,024 

 

$

 -

 

$

 -

 

$

 -

 

$

122,024 

Derivative Financial Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity Futures Contracts – Gas

 

 

2,252 

 

 

 -

 

 

 -

 

 

(1,806)

 

 

446 

Over the Counter Swaps – Gas

 

 

 -

 

 

63,255 

 

 

 -

 

 

(5,093)

 

 

58,162 

Over the Counter Swaps – Oil

 

 

 -

 

 

9,078 

 

 

17 

 

 

(3,260)

 

 

5,835 

Other Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balanced Equity Mutual Fund

 

 

30,125 

 

 

 -

 

 

 -

 

 

 -

 

 

30,125 

Common Stock – Financial Services Industry

 

 

6,331 

 

 

 -

 

 

 -

 

 

 -

 

 

6,331 

Other Common Stock

 

 

295 

 

 

 -

 

 

 -

 

 

 -

 

 

295 

Hedging Collateral Deposits

 

 

694 

 

 

 -

 

 

 -

 

 

 -

 

 

694 

Total                                           

 

$

161,721 

 

$

72,333 

 

$

17 

 

$

(10,159)

 

$

223,912 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Financial Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity Futures Contracts – Gas

 

$

1,806 

 

$

 -

 

$

 -

 

$

(1,806)

 

$

 -

Over the Counter Swaps – Gas

 

 

 -

 

 

2,626 

 

 

 -

 

 

(5,093)

 

 

(2,467)

Over the Counter Swaps – Oil

 

 

 -

 

 

 -

 

 

7,944 

 

 

(3,260)

 

 

4,684 

Total

 

$

1,806 

 

$

2,626 

 

$

7,944 

 

$

(10,159)

 

$

2,217 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Net Assets/(Liabilities)

 

$

159,915 

 

$

69,707 

 

$

(7,927)

 

$

 -

 

$

221,695 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring Fair Value Measures

 

At fair value as of September 30, 2012

 

 

 

 

 

 

 

 

 

 

 

Netting

 

 

 

(Thousands of Dollars)   

 

Level 1

 

Level 2

 

Level 3

 

Adjustments(1)

 

Total(1)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Equivalents – Money Market Mutual Funds

 

$

46,113 

 

$

 -

 

$

 -

 

$

 -

 

$

46,113 

Derivative Financial Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity Futures Contracts – Gas

 

 

4,348 

 

 

 -

 

 

 -

 

 

(2,760)

 

 

1,588 

Over the Counter Swaps – Gas

 

 

 -

 

 

41,751 

 

 

 -

 

 

(15,723)

 

 

26,028 

Over the Counter Swaps – Oil

 

 

 -

 

 

 -

 

 

559 

 

 

(559)

 

 

 -

Other Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balanced Equity Mutual Fund

 

 

24,767 

 

 

 -

 

 

 -

 

 

 -

 

 

24,767 

Common Stock – Financial Services Industry

 

 

4,758 

 

 

 -

 

 

 -

 

 

 -

 

 

4,758 

Other Common Stock

 

 

272 

 

 

 -

 

 

 -

 

 

 -

 

 

272 

Hedging Collateral Deposits

 

 

364 

 

 

 -

 

 

 -

 

 

 -

 

 

364 

Total                                           

 

$

80,622 

 

$

41,751 

 

$

559 

 

$

(19,042)

 

$

103,890 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Financial Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity Futures Contracts – Gas

 

$

2,760 

 

$

 -

 

$

 -

 

$

(2,760)

 

$

 -

Over the Counter Swaps – Gas

 

 

 -

 

 

19,932 

 

 

 -

 

 

(15,723)

 

 

4,209 

Over the Counter Swaps – Oil

 

 

 -

 

 

654 

 

 

20,223 

 

 

(559)

 

 

20,318 

Total

 

$

2,760 

 

$

20,586 

 

$

20,223 

 

$

(19,042)

 

$

24,527 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Net Assets/(Liabilities)

 

$

77,862 

 

$

21,165 

 

$

(19,664)

 

$

 -

 

$

79,363 

 

(1)  Netting Adjustments represent the impact of legally-enforceable master netting arrangements that allow the Company to net gain and loss positions held with the same counterparties. The net asset or net liability for each counterparty is recorded as an asset or liability on the Company’s balance sheet.  In the tables above, presenting asset and liability information by gas and oil positions may result in negative assets or negative liabilities in Total column when a counterparty has issued both gas and oil swaps to the Company.

 

 

Derivative Financial Instruments

 

At June  30, 2013 and September 30, 2012, the derivative financial instruments reported in Level 1 consist of natural gas NYMEX futures contracts used in the Company’s Energy Marketing segment. Hedging collateral deposits of $0.7 million (at June 30, 2013) and $0.4 million (at September 30, 2012), which are associated with these futures contracts, have been reported in Level 1 as well. The derivative financial instruments reported in Level 2 at June  30, 2013 and September 30, 2012 consist of natural gas price swap agreements used in the Company’s Exploration and Production and Energy Marketing segments and a portion of the crude oil price swap agreements used in the Company’s Exploration and Production segment. The fair value of the Level 2 price swap agreements is based on an internal, discounted cash flow model that uses observable inputs (i.e. LIBOR based discount rates and basis differential information, if applicable, at active natural gas and crude oil trading markets). The derivative financial instruments reported in Level 3 consist of a portion of the Company’s Exploration and Production segment’s crude oil price swap agreements at June  30, 2013 and September 30, 2012.  The fair value of the Level 3 crude oil price swap agreements is based on an internal, discounted cash flow model that uses both observable (i.e. LIBOR based discount rates) and unobservable inputs (i.e. basis differential information of crude oil trading markets with low trading volume). 

 

The significant unobservable input used in the fair value measurement of a portion of the Company’s over-the-counter crude oil swaps is the basis differential between Midway Sunset oil and NYMEX contracts.  Significant changes in the assumed basis differential could result in a significant change in value of the derivative financial instruments.  At June  30, 2013, it was assumed that Midway Sunset oil was valued at 109.3% of the value of oil priced at NYMEX.  This is based on a historical twelve month average of Midway Sunset oil sales verses NYMEX settlements.  During this twelve-month period, the price of Midway Sunset oil ranged from 102.3% to 112.4% of NYMEX.  If the basis differential between Midway Sunset oil and NYMEX contracts used in the fair value measurement calculation at June  30, 2013 had been 10 percentage points lower, the fair value of the Level 3 crude oil price swap agreements would have changed from a net liability of $7.9 million to a net asset of $1.3 million.  If the basis differential between Midway Sunset oil and NYMEX contracts used in the fair value measurement at June  30, 2013 had been 10 percentage points higher, the fair value measurement of the Level 3 crude oil price swap agreements liability would have been approximately $9.5 million higher.  These calculated amounts are based solely on basis differential changes and do not take into account any other changes to the fair value measurement calculation. 

 

The accounting rules for fair value measurements and disclosures require consideration of the impact of nonperformance risk (including credit risk) from a market participant perspective in the measurement of the fair value of assets and liabilities.  At June 30, 2013, the Company determined that nonperformance risk would have no material impact on its financial position or results of operation.  To assess nonperformance risk, the Company considered information such as any applicable collateral posted, master netting arrangements, and applied a market-based method by using the counterparty (for an asset) or the Company’s (for a liability) credit default swaps rates.

 

The tables listed below provide reconciliations of the beginning and ending net balances for assets and liabilities measured at fair value and classified as Level 3 for the quarters and nine months ended June  30, 2013 and 2012, respectively. For the quarters and nine months ended June  30, 2013 and June  30, 2012, no transfers in or out of Level 1 or Level 2 occurred.  There were no purchases or sales of derivative financial instruments during the periods presented in the tables below.  All settlements of the derivative financial instruments are reflected in the Gains/Losses Realized and Included in Earnings column of the tables below. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using Unobservable Inputs (Level 3)

(Thousands of Dollars)   

 

 

 

 

Total Gains/Losses 

 

 

 

 

 

 

 

 

 

 

 

(Gains)/

 

 

Gains/(Losses)

 

 

 

 

 

 

 

 

 

 

 

Losses Realized

 

 

Unrealized and Included

 

Transfer

 

 

 

 

 

April 1,

 

and Included

 

 

in Other Comprehensive

 

In/Out of

 

June 30,

 

 

2013

 

in Earnings

 

 

Income (Loss)

 

Level 3

 

2013

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Instruments(2)

 

$

(16,606)

 

$

2,471 
(1)

 

$

6,208 

 

$

 -

 

$

(7,927)

 

(1) Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the three months ended June  30, 2013. 

(2) Derivative Financial Instruments are shown on a net basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using Unobservable Inputs (Level 3)

(Thousands of Dollars)   

 

 

 

 

Total Gains/Losses 

 

 

 

 

 

 

 

 

 

 

 

(Gains)/

 

 

Gains/(Losses)

 

 

 

 

 

 

 

 

 

 

 

Losses Realized

 

 

Unrealized and Included

 

Transfer

 

 

 

 

 

October 1,

 

and Included

 

 

in Other Comprehensive

 

In/Out of

 

June 30,

 

 

2012

 

in Earnings

 

 

Income (Loss)

 

Level 3

 

2013

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Instruments(2)

 

$

(19,664)

 

$

9,271 
(1)

 

$

2,466 

 

$

 -

 

$

(7,927)

 

(1) Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the nine months ended June  30, 2013. 

(2) Derivative Financial Instruments are shown on a net basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using Unobservable Inputs (Level 3)

(Thousands of Dollars)

 

 

 

 

Total Gains/Losses

 

 

 

 

 

 

 

 

 

 

 

(Gains)/

 

 

Gains/(Losses)

 

 

 

 

 

 

 

 

 

 

 

Losses Realized

 

 

Unrealized and Included

 

Transfer

 

 

 

 

 

April 1,

 

and Included

 

 

In Other Comprehensive

 

In/Out of

 

June 30,

 

 

2012

 

in Earnings

 

 

Income (Loss)

 

Level 3

 

2012

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Instruments(2)

 

$

(68,754)

 

$

10,392 
(1)

 

$

41,814 

 

$

 -

 

$

(16,548)

 

(1) Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the three months ended June  30, 2012.    

(2) Derivative Financial Instruments are shown on a net basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using Unobservable Inputs (Level 3)

(Thousands of Dollars)

 

 

 

 

Total Gains/Losses

 

 

 

 

 

 

 

 

 

 

 

(Gains)/

 

 

Gains/(Losses)

 

 

 

 

 

 

 

 

 

 

 

Losses Realized

 

 

Unrealized and Included

 

Transfer

 

 

 

 

 

October 1,

 

and Included

 

 

In Other Comprehensive

 

In/Out of

 

June 30,

 

 

2011

 

in Earnings

 

 

Income (Loss)

 

Level 3

 

2012

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Instruments(2)

 

$

(5,410)

 

$

36,526 
(1)

 

$

(47,664)

 

$

 -

 

$

(16,548)

 

(1) Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the nine months ended June  30, 2012.    

(2) Derivative Financial Instruments are shown on a net basis.

Financial Instruments
Financial Instruments

Note 3 – Financial Instruments

 

Long-Term Debt.  The fair market value of the Company’s debt, as presented in the table below, was determined using a discounted cash flow model, which incorporates the Company’s credit ratings and current market conditions in determining the yield, and subsequently, the fair market value of the debt.  Based on these criteria, the fair market value of long-term debt, including current portion, was as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2013

 

September 30, 2012

 

 

Carrying

 

 

 

 

Carrying

 

 

 

 

 

Amount

 

Fair Value

 

Amount

 

Fair Value

Long-Term Debt

 

$

1,649,000 

 

$

1,790,040 

 

$

1,399,000 

 

$

1,623,847 

 

The fair value amounts are not intended to reflect principal amounts that the Company will ultimately be required to pay. Carrying amounts for other financial instruments recorded on the Company’s Consolidated Balance Sheets approximate fair value. The fair value of long-term debt was calculated using observable inputs (U.S. Treasuries/LIBOR for the risk free component and company specific credit spread information – generally obtained from recent trade activity in the debt).  As such, the Company considers the debt to be Level 2.

 

Temporary cash investments, notes payable to banks and commercial paper are stated at cost. Temporary cash investments are considered Level 1, while notes payable to banks and commercial paper are considered to be Level 2.  Given the short-term nature of the notes payable to banks and commercial paper, the Company believes cost is a reasonable approximation of fair value.

 

Other Investments.  Investments in life insurance are stated at their cash surrender values or net present value as discussed below. Investments in an equity mutual fund and the stock of an insurance company (marketable equity securities), as discussed below, are stated at fair value based on quoted market prices.

 

Other investments include cash surrender values of insurance contracts (net present value in the case of split-dollar collateral assignment arrangements) and marketable equity securities. The values of the insurance contracts amounted to $57.0 million at June 30, 2013 and September 30, 2012. The fair value of the equity mutual fund was $30.1 million at June 30, 2013 and $24.8 million at September 30, 2012. The gross unrealized gain on this equity mutual fund was $4.1 million at June 30, 2013 and $2.6 million at September 30, 2012.  The fair value of the stock of an insurance company was $6.3 million at June 30, 2013 and $4.8 million at September 30, 2012. The gross unrealized gain on this stock was $3.9 million at June  30, 2013 and $2.3 million at September 30, 2012. The insurance contracts and marketable equity securities are primarily informal funding mechanisms for various benefit obligations the Company has to certain employees.

 

Derivative Financial Instruments.  The Company uses or has used derivative instruments to manage commodity price risk in the Exploration and Production, Energy Marketing, and Pipeline and Storage segments. The Company enters into futures contracts and over-the-counter swap agreements for natural gas and crude oil to manage the price risk associated with forecasted sales of gas and oil. The Company also enters into futures contracts and swaps to manage the risk associated with forecasted gas purchases, forecasted gas sales, storage of gas, withdrawal of gas from storage to meet customer demand and the potential decline in the value of gas held in storage. The duration of the Company’s hedges does not typically exceed 5 years.

 

The Company has presented its net derivative assets and liabilities as “Fair Value of Derivative Financial Instruments” on its Consolidated Balance Sheets at June  30, 2013 and September 30, 2012.  All of the derivative financial instruments reported on those line items relate to commodity contracts.

 

Cash flow hedges

 

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the period or periods during which the hedged transaction affects earnings.  Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. 

 

As of June  30, 2013, the Company’s Exploration and Production segment had the following commodity derivative contracts (swaps) outstanding to hedge forecasted sales (where the Company uses short positions (i.e. positions that pay-off in the event of commodity price decline) to mitigate the risk of decreasing revenues and earnings):

 

 

 

 

 

 

Commodity

Units

Natural Gas

208.0 Bcf (all short positions)

Crude Oil

4,134,000 Bbls (all short positions)

 

As of June  30, 2013, the Company’s Energy Marketing segment had the following commodity derivative contracts (futures contracts and swaps) outstanding to hedge forecasted sales (where the Company uses short positions to mitigate the risk associated with natural gas price decreases and its impact on decreasing revenues and earnings) and, when applicable, purchases (where the Company uses long positions (i.e. positions that pay-off in the event of commodity price increases) to mitigate the risk of increasing natural gas prices, which would lead to increased purchased gas expense and decreased earnings):

 

 

 

 

 

 

 

 

Commodity

Units

Natural Gas

7.1 Bcf (5.6 Bcf short positions (mostly forecasted storage withdrawals) and 1.5 Bcf long positions (mostly forecasted storage injections))

 

As of June  30, 2013, the Company’s Exploration and Production segment had $61.6 million ($35.8 million after tax) of net hedging gains included in the accumulated other comprehensive income (loss) balance. It is expected that $40.1 million ($23.3 million after tax) of such unrealized gains will be reclassified into the Consolidated Statement of Income within the next 12 months as the expected sales of the underlying commodities occur.  

 

As of June  30, 2013, the Company’s Energy Marketing segment had $1.7 million ($1.1 million after tax) of net hedging gains included in the accumulated other comprehensive income (loss) balance. It is expected that the full amount will be reclassified into the Consolidated Statement of Income (Loss) within the next 12 months as the expected sales of the underlying commodity occurs.

 

Refer to Note 1, under Accumulated Other Comprehensive Income (Loss), for the after-tax gain (loss) pertaining to derivative financial instruments for the Exploration and Production and Energy Marketing segments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the

Three Months Ended June 30, 2013 and 2012 (Thousands of Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location of

 

 

Amount of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Gain

 

 

Derivative Gain or

 

 

 

 

 

 

 

 

 

 

 

 

 

 

or (Loss)

 

 

(Loss)

Location of

 

 

Derivative Gain

 

 

 

Amount of

Reclassified

 

 

Reclassified from

Derivative

 

 

or (Loss)

 

 

 

Derivative Gain or

from

 

 

Accumulated

Gain or

 

 

Recognized in

 

 

 

(Loss)

Accumulated

 

 

Other

(Loss)

 

 

the

 

 

 

Recognized in

Other

 

 

Comprehensive

Recognized

 

 

Consolidated

 

 

 

Other

Comprehensive

 

 

Income (Loss) on

in the

 

 

Statement of

 

 

 

Comprehensive

Income (Loss)

 

 

the Consolidated

Consolidated

 

 

Income

 

 

 

Income (Loss) on

on the

 

 

Balance Sheet

Statement of

 

 

(Ineffective

 

 

 

the Consolidated

Consolidated

 

 

into the

Income

 

 

Portion and

 

 

 

Statement of

Balance Sheet

 

 

Consolidated

(Ineffective

 

 

Amount

 

 

 

Comprehensive

into the

 

 

Statement of

Portion and

 

 

Excluded from

 

 

 

Income (Loss)

Consolidated

 

 

Income (Effective

Amount

 

 

Effectiveness

Derivatives in

 

 

(Effective Portion)

Statement of

 

 

Portion) for the

Excluded

 

 

Testing) for the

Cash Flow

 

 

for the Three

Income

 

 

Three Months

from

 

 

Three Months

Hedging

 

 

Months Ended

(Effective

 

 

Ended

Effectiveness

 

 

Ended

Relationships

 

 

June 30,

Portion)

 

 

June 30,

Testing)

 

 

June 30,

 

 

 

2013

 

 

2012

 

 

 

2013

 

 

2012

 

 

 

2013

 

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

Operating

 

 

 

 

 

 

Operating

 

 

 

 

 

 

segment

 

$

99,987 

 

$

31,358 

Revenue

 

$

1,504 

 

$

20,643 

Revenue

 

$

456 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

Not

 

 

 

 

 

 

segment

 

$

1,879 

 

$

(201)

Purchased Gas

 

$

(75)

 

$

956 

Applicable

 

$

 -

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage

 

 

 

 

 

 

Operating

 

 

 

 

 

 

Not

 

 

 

 

 

 

segment(1)

 

$

 -

 

$

(725)

Revenue

 

$

 -

 

$

 -

Applicable

 

$

 -

 

$

 -

Total

 

$

101,866 

 

$

30,432 

 

 

$

1,429 

 

$

21,599 

 

 

$

456 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the

Nine Months Ended June 30, 2013 and 2012 (Thousands of Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location of

 

 

Amount of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Gain

 

 

Derivative Gain or

 

 

 

 

 

 

 

 

 

 

 

 

 

 

or (Loss)

 

 

(Loss)

Location of

 

 

Derivative Gain

 

 

 

Amount of

Reclassified

 

 

Reclassified from

Derivative

 

 

or (Loss)

 

 

 

Derivative Gain or

from

 

 

Accumulated

Gain or

 

 

Recognized in

 

 

 

(Loss)

Accumulated

 

 

Other

(Loss)

 

 

the

 

 

 

Recognized in

Other

 

 

Comprehensive

Recognized

 

 

Consolidated

 

 

 

Other

Comprehensive

 

 

Income (Loss) on

in the

 

 

Statement of

 

 

 

Comprehensive

Income (Loss)

 

 

the Consolidated

Consolidated

 

 

Income

 

 

 

Income (Loss) on

on the

 

 

Balance Sheet

Statement of

 

 

(Ineffective

 

 

 

the Consolidated

Consolidated

 

 

into the

Income

 

 

Portion and

 

 

 

Statement of

Balance Sheet

 

 

Consolidated

(Ineffective

 

 

Amount

 

 

 

Comprehensive

into the

 

 

Statement of

Portion and

 

 

Excluded from

 

 

 

Income (Loss)

Consolidated

 

 

Income (Effective

Amount

 

 

Effectiveness

Derivatives in

 

 

(Effective Portion)

Statement of

 

 

Portion) for the

Excluded

 

 

Testing) for the

Cash Flow

 

 

for the Nine

Income

 

 

Nine Months

from

 

 

Nine Months

Hedging

 

 

Months Ended

(Effective

 

 

Ended

Effectiveness

 

 

Ended

Relationships

 

 

June 30,

Portion)

 

 

June 30,

Testing)

 

 

June 30,

 

 

 

2013

 

 

2012

 

 

 

2013

 

 

2012

 

 

 

2013

 

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

Operating

 

 

 

 

 

 

Not

 

 

 

 

 

 

segment

 

$

86,237 

 

$

40,897 

Revenue

 

$

25,550 

 

$

38,633 

Applicable

 

$

 -

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

Not

 

 

 

 

 

 

segment

 

$

3,628 

 

$

6,337 

Purchased Gas

 

$

(905)

 

$

10,440 

Applicable

 

$

 -

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage

 

 

 

 

 

 

Operating

 

 

 

 

 

 

Not

 

 

 

 

 

 

segment(1)

 

$

 -

 

$

(149)

Revenue

 

$

(672)

 

$

576 

Applicable

 

$

 -

 

$

 -

Total

 

$

89,865 

 

$

47,085 

 

 

$

23,973 

 

$

49,649 

 

 

$

 -

 

$

 -

 

 

(1)  There were no open hedging positions at June  30, 2013.

 

Fair value hedges

 

The Company’s Energy Marketing segment utilizes fair value hedges to mitigate risk associated with fixed price sales commitments, fixed price purchase commitments, and the decline in the value of certain natural gas held in storage. With respect to fixed price sales commitments, the Company enters into long positions to mitigate the risk of price increases for natural gas supplies that could occur after the Company enters into fixed price sales agreements with its customers. With respect to fixed price purchase commitments, the Company enters into short positions to mitigate the risk of price decreases that could occur after the Company locks into fixed price purchase deals with its suppliers. With respect to storage hedges, the Company enters into short positions to mitigate the risk of price decreases that could result in a lower of cost or market writedown of the value of natural gas in storage that is recorded in the Company’s financial statements. As of June 30, 2013, the Company’s Energy Marketing segment had fair value hedges covering approximately 7.8 Bcf (6.8 Bcf of fixed price sales commitments (mostly long positions) and 1.0 Bcf of fixed price purchase commitments (mostly short positions)). For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk completely offset each other in current earnings, as shown below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of

 

 

 

Amount of Gain

 

Gain or (Loss)

 

 

 

or (Loss) on

 

on the Hedged

 

 

 

Derivative

 

Item

 

Location of

 

Recognized in

 

Recognized in

 

Gain or (Loss)

 

the

 

the

 

on Derivative

 

Consolidated

 

Consolidated

 

and Hedged

 

Statement of

 

Statement of

 

Item

 

Income for the

 

Income for the

 

Recognized

 

Nine Months

 

Nine Months

 

in the

 

Ended

 

Ended

Derivatives in Fair Value

Consolidated

 

June 30,

 

June 30,

Hedging Relationships –

Statement of

 

2013

 

2013

Energy Marketing segment

Income

 

(In Thousands)

 

(In Thousands)

 

 

 

 

 

 

 

 

Commodity Contracts – Hedge of fixed price sales

Operating

 

 

 

 

 

 

commitments of natural gas

Revenues

 

$

(1,720)

 

$

1,720 

 

 

 

 

 

 

 

 

Commodity Contracts – Hedge of fixed price

Purchased

 

 

 

 

 

 

purchase commitments of natural gas

Gas

 

$

(148)

 

$

148 

 

 

 

 

 

 

 

 

Commodity Contracts – Hedge of natural gas held in

Purchased

 

 

 

 

 

 

storage

Gas

 

$

10 

 

$

(10)

 

 

 

$

(1,858)

 

$

1,858 

 

The Company may be exposed to credit risk on any of the derivative financial instruments that are in a gain position. Credit risk relates to the risk of loss that the Company would incur as a result of nonperformance by counterparties pursuant to the terms of their contractual obligations. To mitigate such credit risk, management performs a credit check, and then on a quarterly basis monitors counterparty credit exposure. The majority of the Company’s counterparties are financial institutions and energy traders. The Company has over-the-counter swap positions with thirteen counterparties of which eleven are in a net gain position.   On average, the Company had $5.8 million of credit exposure per counterparty in a gain position at June  30, 2013. The maximum credit exposure per counterparty in a gain position at June  30, 2013 was $12.2 million. As of June  30, 2013, the Company had not received any collateral from the counterparties.  The Company’s gain position on such derivative financial instruments had not exceeded the established thresholds at which the counterparties would be required to post collateral, nor had the counterparties’ credit ratings declined to levels at which the counterparties were required to post collateral.

 

As of June  30, 2013, eleven of the thirteen counterparties to the Company’s outstanding derivative instrument contracts (specifically the over-the-counter swaps) had a common credit-risk related contingency feature. In the event the Company’s credit rating increases or falls below a certain threshold (applicable debt ratings), the available credit extended to the Company would either increase or decrease. A decline in the Company’s credit rating, in and of itself, would not cause the Company to be required to increase the level of its hedging collateral deposits (in the form of cash deposits, letters of credit or treasury debt instruments). If the Company’s outstanding derivative instrument contracts were in a liability position (or if the current liability were larger) and/or the Company’s credit rating declined, then additional hedging collateral deposits may be required.  At June 30, 2013, the fair market value of the derivative financial instrument assets with a credit-risk related contingency feature was $48.8 million according to the Company’s internal model (discussed in Note 2 — Fair Value Measurements).  At June 30, 2013, the fair market value of the derivative financial instrument liabilities with a credit-risk related contingency feature was $2.2 million according to the Company’s internal model  (discussed in Note 2 — Fair Value Measurements).  For its over-the-counter swap agreements, the Company was not required to post any hedging collateral deposits at June  30, 2013.    

 

For its exchange traded futures contracts, which are in an asset position, the Company was required to post $0.7 million in hedging collateral deposits as of June 30, 2013.   As these are exchange traded futures contracts, there are no specific credit-risk related contingency features. The Company posts hedging collateral based on open positions and margin requirements it has with its counterparties.

 

            The Company’s requirement to post hedging collateral deposits is based on the fair value determined by the Company’s counterparties, which may differ from the Company’s assessment of fair value. Hedging collateral deposits may also include closed derivative positions in which the broker has not cleared the cash from the account to offset the derivative liability. The Company records liabilities related to closed derivative positions in Other Accruals and Current Liabilities on the Consolidated Balance Sheet. These liabilities are relieved when the broker clears the cash from the hedging collateral deposit account. This is discussed in Note 1 under Hedging Collateral Deposits.

Income Taxes
Income Taxes

Note 4 - Income Taxes

 

The components of federal and state income taxes included in the Consolidated Statements of Income are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                         

 

Nine Months Ended

                                                         

 

June 30,

                                                         

 

2013

 

2012

Current Income Taxes 

 

 

 

 

 

 

Federal                                              

 

$

(518)

 

$

 -

State                                                  

 

 

3,934 

 

 

6,878 

 

 

 

 

 

 

 

Deferred Income Taxes                                

 

 

 

 

 

 

Federal                                               

 

 

105,362 

 

 

85,910 

State                                                    

 

 

35,645 

 

 

19,038 

 

 

 

144,423 

 

 

111,826 

Deferred Investment Tax Credit                            

 

 

(320)

 

 

(436)

 

 

 

 

 

 

 

Total Income Taxes                                      

 

$

144,103 

 

$

111,390 

 

 

 

 

 

 

 

Presented as Follows:

 

 

 

 

 

 

Other Income

 

 

(320)

 

 

(436)

Income Tax Expense

 

 

144,423 

 

 

111,826 

 

 

 

 

 

 

 

Total Income Taxes

 

$

144,103 

 

$

111,390 

 

Total income taxes as reported differ from the amounts that were computed by applying the federal income tax rate to income before income taxes.  The following is a reconciliation of this difference (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

June 30,

 

 

2013

 

2012

 

 

 

 

 

 

 

U.S. Income Before Income Taxes

 

$

356,262 

 

$

282,665 

 

 

 

 

 

 

 

Income Tax Expense, Computed at U.S. Federal

 

 

 

 

 

 

Statutory Rate of 35%

 

$

124,692 

 

$

98,933 

 

 

 

 

 

 

 

Increase (Reduction) in Taxes Resulting from:

 

 

 

 

 

 

State Income Taxes

 

 

25,726 

 

 

16,845 

Miscellaneous

 

 

(6,315)

 

 

(4,388)

 

 

 

 

 

 

 

Total Income Taxes

 

$

144,103 

 

$

111,390 

 

 

 

 

 

 

 

 

Significant components of the Company’s deferred tax liabilities and assets were as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                            

 

At June 30, 2013

 

At September 30, 2012

Deferred Tax Liabilities:

 

 

 

 

 

 

Property, Plant and Equipment

 

$

1,465,567 

 

$

1,333,574 

Pension and Other Post-Retirement Benefit      

 

 

 

 

 

 

Costs

 

 

244,453 

 

 

236,431 

Other                             

 

 

64,365 

 

 

43,294 

Total Deferred Tax Liabilities

 

 

1,774,385 

 

 

1,613,299 

 

 

 

 

 

 

 

Deferred Tax Assets:

 

 

 

 

 

 

Pension and Other Post-Retirement Benefit     

 

 

 

 

 

 

Costs

 

 

(276,056)

 

 

(276,501)

Tax Loss Carryforwards

 

 

(194,138)

 

 

(198,744)

Other                            

 

 

(81,612)

 

 

(83,052)

Total Deferred Tax Assets

 

 

(551,806)

 

 

(558,297)

Total Net Deferred Income Taxes

 

$

1,222,579 

 

$

1,055,002 

 

 

 

 

 

 

 

Presented as Follows:

 

 

 

 

 

 

Net Deferred Tax Liability/(Asset) – Current

 

 

(15,148)

 

 

(10,755)

Net Deferred Tax Liability – Non-Current

 

 

1,237,727 

 

 

1,065,757 

Total Net Deferred Income Taxes

 

$

1,222,579 

 

$

1,055,002 

 

During the quarter ended June 30, 2013, there was no change in the balance of unrecognized tax benefits.  For nine months ended June 30, 2013, the balance of unrecognized tax benefits decreased by $9.3 million, primarily as a result of favorable settlements with taxing authorities (as discussed below), of which $2.1 million reduced the effective tax rate during the second quarter.  Approximately $2.0 million of the remaining balance of unrecognized tax benefits would favorably impact the effective tax rate, if recognized.  It is reasonably possible that a reduction of $2.0 million of the balance of uncertain tax positions may occur as a result of potential settlements with taxing authorities within the next twelve months. 

 

As a result of certain realization requirements of the authoritative guidance on stock-based compensation, the table of deferred tax liabilities and assets shown above does not include certain deferred tax assets that arose directly from excess tax deductions related to stock-based compensation. Tax benefits of $4.3 million and $0.6 million relating to the excess stock-based compensation deductions were recorded in Paid in Capital during the nine months ended June 30, 2013 and the year ended September 30, 2012, respectively.  Cumulative tax benefits of $33.6 million and $32.7 million remain as of June 30, 2013 and September 30, 2012, respectively, and will be recorded in Paid in Capital in future years when such tax benefits are realized.

 

Regulatory liabilities representing the reduction of previously recorded deferred income taxes associated with rate-regulated activities that are expected to be refundable to customers amounted to $65.1 million and $66.4 million at June 30, 2013 and September 30, 2012, respectively.  Also, regulatory assets representing future amounts collectible from customers, corresponding to additional deferred income taxes not previously recorded because of prior ratemaking practices, amounted to $152.1 million and $150.9 million at June 30, 2013 and September 30, 2012, respectively.

 

The Internal Revenue Service (IRS) is currently conducting examinations of the Company for fiscal 2012 and fiscal 2013 in accordance with the Compliance Assurance Process (CAP).  The CAP audit employs a real time review of the Company’s books and tax records by the IRS that is intended to permit issue resolution prior to the filing of the tax return.  While the federal statute of limitations remains open for fiscal 2009 and later years, IRS examinations for fiscal 2008 and prior years have been completed and the Company believes such years are effectively settled.  During fiscal 2009, consent was received from the IRS National Office approving the Company’s application to change its tax method of accounting for certain capitalized costs relating to its utility property.  During the quarter ended March 31, 2013, local IRS examiners issued no-change reports for fiscal 2009, fiscal 2010 and fiscal 2011, but have reserved the right to re-examine these years, pending the anticipated issuance of IRS guidance addressing the issue for natural gas utilities.  In addition, the Company negotiated a settlement of the fiscal 2011 Research Tax Credit.

 

The Company is also subject to various routine state income tax examinations.  The Company’s principal subsidiaries operate mainly in four states which have statutes of limitations that generally expire between three to four years from the date of filing of the income tax return.

 

On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (the Relief Act).  The Relief Act does not have a material effect on the Company’s financial statements.

Capitalization
Capitalization

Note 5 - Capitalization

 

Common Stock.  During the nine months ended June 30, 2013, the Company issued 457,091 original issue shares of common stock as a result of stock option and SARs exercises.  In addition, the Company issued 97,554 original issue shares of common stock for the Direct Stock Purchase and Dividend Reinvestment Plan.  The Company also issued 12,380 original issue shares of common stock to the non-employee directors of the Company who receive compensation under the Company’s 2009 Non-Employee Director Equity Compensation Plan, as partial consideration for the directors’ services during the nine months ended June 30, 2013.  Holders of stock options, SARs or restricted stock will often tender shares of common stock to the Company for payment of option exercise prices and/or applicable withholding taxes.  During the nine months ended June 30, 2013, 309,307 shares of common stock were tendered to the Company for such purposes.  The Company considers all shares tendered as cancelled shares restored to the status of authorized but unissued shares, in accordance with New Jersey law.

 

Current Portion of Long-Term Debt.  Current Portion of Long-Term Debt at September 30, 2012 consisted of $250 million of 5.25% notes that matured in March 2013.  None of the Company’s long-term debt at June 30, 2013 will mature within the following twelve-month period.

 

Long-Term Debt.  On February 15, 2013, the Company issued $500.0 million of 3.75% notes due March 1, 2023.  After deducting underwriting discounts and commissions, the net proceeds to the Company amounted to $495.4 million.  The holders of the notes may require the Company to repurchase their notes at a price equal to 101% of the principal amount in the event of a change in control and a ratings downgrade to a rating below investment grade.  The proceeds of this debt issuance were used to refund the $250 million of 5.25% notes that matured in March 2013, as well as for general corporate purposes, including the reduction of short-term debt.

Commitments And Contingencies
Commitments And Contingencies

Note 6 - Commitments and Contingencies

 

Environmental Matters.  The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment.  The Company has established procedures for the ongoing evaluation of its operations to identify potential environmental exposures and to comply with regulatory policies and procedures.  It is the Company’s policy to accrue estimated environmental clean-up costs (investigation and remediation) when such amounts can reasonably be estimated and it is probable that the Company will be required to incur such costs. 

 

The Company has agreed with the NYDEC to remediate a former manufactured gas plant site located in New York.  In February 2009, the Company received approval from the NYDEC of a Remedial Design Work Plan (RDWP) for this site. In October 2010, the Company submitted a RDWP addendum to conduct additional Preliminary Design Investigation field activities necessary to design a successful remediation. As a result of this work, the Company submitted to the NYDEC a proposal to amend the NYDEC’s Record of Decision remedy for the site.  In April 2013, the NYDEC approved the Company’s proposed amendment.  Final remedial design work for the site has begun.  An estimated minimum liability for remediation of this site of $13.9 million has been recorded.

 

At June 30, 2013, the Company has estimated its remaining clean-up costs related to former manufactured gas plant sites and third party waste disposal sites (including the former manufactured gas plant site discussed above) will be approximately $16.8 million.  This estimated liability, which includes the $13.9 million discussed above, has been recorded in Other Deferred Credits on the Consolidated Balance Sheet at June 30, 2013.  The Company expects to recover its environmental clean-up costs through rate recovery over a period of approximately 11 years.

 

The Company is currently not aware of any material additional exposure to environmental liabilities.  However, changes in environmental laws and regulations, new information or other factors could have an adverse financial impact on the Company.

 

 

Other.  The Company is involved in other litigation and regulatory matters arising in the normal course of business.  These other matters may include, for example, negligence claims and tax, regulatory or other governmental audits, inspections, investigations and other proceedings.  These matters may involve state and federal taxes, safety, compliance with regulations, rate base, cost of service and purchased gas cost issues, among other things.  While these other matters arising in the normal course of business could have a material effect on earnings and cash flows in the period in which they are resolved, an estimate of the possible loss or range of loss, if any, cannot be made at this time.

Business Segment Information
Business Segment Information

Note 7 – Business Segment Information    

 

The Company reports financial results for four segments: Utility, Pipeline and Storage, Exploration and Production, and Energy Marketing.  The division of the Company’s operations into reportable segments is based upon a combination of factors including differences in products and services, regulatory environment and geographic factors.

 

The data presented in the tables below reflect financial information for the segments and reconciliations to consolidated amounts.  As stated in the 2012 Form 10-K, the Company evaluates segment performance based on income before discontinued operations, extraordinary items and cumulative effects of changes in accounting (when applicable).  When these items are not applicable, the Company evaluates performance based on net income.  There have not been any changes in the basis of segmentation nor in the basis of measuring segment profit or loss from those used in the Company’s 2012 Form 10-K.  As for segment assets, there have been significant changes from the segment assets disclosed in the 2012 Form 10-K.  A listing of segment assets at June 30, 2013 is shown in the tables below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended June 30, 2013 (Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline

 

Exploration

 

 

 

 

Total

 

 

 

 

Corporate and

 

 

 

 

 

 

 

 

and

 

and

 

Energy

 

Reportable

 

All

 

Intersegment

 

Total

 

 

Utility

 

Storage

 

Production

 

Marketing

 

Segments

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from External

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

141,257 

 

$

43,055 

 

$

195,213 

 

$

59,128 

 

$

438,653 

 

$

1,121 

 

$

234 

 

$

440,008 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Revenues

 

$

3,305 

 

$

21,708 

 

$

 -

 

$

446 

 

$

25,459 

 

$

10,244 

 

$

(35,703)

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

7,630 

 

$

14,075 

 

$

31,734 

 

$

963 

 

$

54,402 

 

$

4,499 

 

$

(406)

 

$

58,495 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended June 30, 2013 (Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline

 

Exploration

 

 

 

 

Total

 

 

 

 

Corporate and

 

 

 

 

 

 

 

 

and

 

and

 

Energy

 

Reportable

 

All

 

Intersegment

 

Total

 

 

Utility

 

Storage

 

Production

 

Marketing

 

Segments

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from External

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

653,211 

 

$

132,897 

 

$

518,742 

 

$

182,282 

 

$

1,487,132 

 

$

2,898 

 

$

658 

 

$

1,490,688 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Revenues

 

$

14,012 

 

$

68,216 

 

$

 -

 

$

1,080 

 

$

83,308 

 

$

23,622 

 

$

(106,930)

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

65,024 

 

$

47,803 

 

$

86,125 

 

$

5,741 

 

$

204,693 

 

$

9,449 

 

$

(1,983)

 

$

212,159 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2013 (Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline

 

Exploration

 

 

 

 

Total

 

 

 

 

Corporate and

 

 

 

 

 

 

 

 

and

 

and

 

Energy

 

Reportable

 

All

 

Intersegment

 

Total

 

 

Utility

 

Storage

 

Production

 

Marketing

 

Segments

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Assets

 

$

2,074,329 

 

$

1,281,445

 

$

2,614,406 

 

$

69,106 

 

$

6,039,286 

 

$

273,048

 

$

31,606 

 

$

6,343,940 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended June 30, 2012 (Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline

 

Exploration

 

 

 

 

Total

 

 

 

 

Corporate and

 

 

 

 

 

 

 

 

and

 

and

 

Energy

 

Reportable

 

All

 

Intersegment

 

Total

 

 

Utility

 

Storage

 

Production

 

Marketing

 

Segments

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from External

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

117,240 

 

$

36,631 

 

$

138,549 

 

$

35,377 

 

$

327,797 

 

$

824 

 

$

240 

 

$

328,861 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Revenues

 

$

2,703 

 

$

22,076 

 

$

 -

 

$

579 

 

$

25,358 

 

$

4,307 

 

$

(29,665)

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

5,096 

 

$

12,627 

 

$

21,915 

 

$

923 

 

$

40,561 

 

$

2,815 

 

$

(192)

 

$

43,184 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended June 30, 2012 (Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline

 

Exploration

 

 

 

 

Total

 

 

 

 

Corporate and

 

 

 

 

 

 

 

 

and

 

and

 

Energy

 

Reportable

 

All

 

Intersegment

 

Total

 

 

Utility

 

Storage

 

Production

 

Marketing

 

Segments

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from External

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

622,836 

 

$

113,976 

 

$

411,449 

 

$

161,822 

 

$

1,310,083 

 

$

2,784 

 

$

726 

 

$

1,313,593 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Revenues

 

$

12,643 

 

$

64,434 

 

$

 -

 

$

1,135 

 

$

78,212 

 

$

10,828 

 

$

(89,040)

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

52,725 

 

$

35,428 

 

$

74,422 

 

$

4,662 

 

$

167,237 

 

$

5,557 

 

$

(1,519)

 

$

171,275 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement Plan And Other Post-Retirement Benefits
Retirement Plan And Other Post-Retirement Benefits

Note 8 – Retirement Plan and Other Post-Retirement Benefits

 

Components of Net Periodic Benefit Cost (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Post-Retirement

 

 

Retirement Plan

 

Benefits

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Cost

 

$

3,961 

 

$

3,551 

 

$

1,176 

 

$

1,004 

Interest Cost

 

 

9,124 

 

 

10,381 

 

 

4,803 

 

 

5,329 

Expected Return on Plan Assets

 

 

(14,336)

 

 

(14,925)

 

 

(8,218)

 

 

(7,243)

Amortization of Prior Service Cost

 

 

60 

 

 

67 

 

 

(534)

 

 

(534)

Amortization of Transition Amount

 

 

-

 

 

-

 

 

 

 

Amortization of Losses

 

 

13,194 

 

 

9,904 

 

 

5,223 

 

 

6,014 

Net Amortization and Deferral for

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory Purposes (Including

 

 

 

 

 

 

 

 

 

 

 

 

Volumetric Adjustments) (1)

 

 

(3,854)

 

 

(2,252)

 

 

2,393 

 

 

718 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Periodic Benefit Cost

 

$

8,149 

 

$

6,726 

 

$

4,845 

 

$

5,291 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Post-Retirement

 

 

Retirement Plan

 

Benefits

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Cost

 

$

11,884 

 

$

10,652 

 

$

3,529 

 

$

3,012 

Interest Cost

 

 

27,373 

 

 

31,144 

 

 

14,409 

 

 

15,986 

Expected Return on Plan Assets

 

 

(43,009)

 

 

(44,776)

 

 

(24,654)

 

 

(21,728)

Amortization of Prior Service Cost

 

 

179 

 

 

202 

 

 

(1,604)

 

 

(1,604)

Amortization of Transition Amount

 

 

 -

 

 

 -

 

 

 

 

Amortization of Losses

 

 

39,582 

 

 

29,711 

 

 

15,669 

 

 

18,043 

Net Amortization and Deferral for

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory Purposes (Including

 

 

 

 

 

 

 

 

 

 

 

 

Volumetric Adjustments) (1)

 

 

(5,813)

 

 

(1,896)

 

 

11,555 

 

 

7,993 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Periodic Benefit Cost

 

$

30,196 

 

$

25,037 

 

$

18,910 

 

$

21,710 

 

(1)    The Companys policy is to record retirement plan and other post-retirement benefit costs in the Utility segment on a volumetric basis to reflect the fact that the Utility segment experiences higher throughput of natural gas in the winter months and lower throughput of natural gas in the summer months.

 

Employer Contributions.    During the nine months ended June 30, 2013, the Company contributed $42.0 million to its tax-qualified, noncontributory defined-benefit retirement plan (Retirement Plan) and $15.8 million to its VEBA trusts and 401(h) accounts for its other post-retirement benefits.  In the remainder of 2013, the Company expects to contribute approximately $10.0 million to the Retirement Plan.  Changes in the discount rate, other actuarial assumptions, and asset performance could ultimately cause the Company to fund larger amounts to the Retirement Plan in fiscal 2013 in order to be in compliance with the Pension Protection Act of 2006 (as impacted by the Moving Ahead for Progress in the 21st Century Act).  In July 2012, the Surface Transportation Extension Act, which is also referred to as the Moving Ahead for Progress in the 21st Century Act (the Act), was passed by Congress and signed by the President.  The Act included pension funding stabilization provisions.  The Company is continually evaluating its future contributions in light of the provisions of the Act. In the remainder of 2013, the Company expects to contribute approximately $2.2 million to its VEBA trusts and 401(h) accounts.

Regulatory Matters
Regulatory Matters

Note 9 – Regulatory Matters

 

On March 27, 2013, Distribution Corporation filed a plan (“Plan”) with the NYPSC proposing to adopt an “earnings stabilization and sharing mechanism” that would allocate earnings above a rate of return on equity of 9.96% evenly between shareholders and an accounting reserve (“Reserve”).  The Reserve would be utilized to stabilize Distribution Corporation’s earnings and to fund customer benefit programs.  The Plan also proposed to increase capital spending and to aid new customer system expansion efforts.  Discussions were held with NYPSC staff and others with respect to the Plan. 

 

In a related development, on April 19, 2013, the NYPSC issued an order directing Distribution Corporation to either agree to make its rates and charges temporary subject to refund effective June 1, 2013, or show cause why its gas rates and charges should not be set on a temporary basis subject to refund (“Order”).  The Order recognized Distribution Corporation’s Plan and determined that the Plan did not propose to adjust “existing rates . . . enough to compensate for the imbalance between ratepayer and shareholder interests that has developed since . . . 2007 . . .”  Pursuant to the Order, the NYPSC commenced a “temporary rate” proceeding and, following hearings, on June 14, 2013, the NYPSC issued an order making Distribution Corporation’s rates and charges temporary and subject to refund pending the determination of permanent gas rates through further rate proceedings.  Exploratory discussions for settlement of Distribution Corporation’s rates and charges were commenced and are expected to continue as the formal case to establish permanent rates proceeds along a parallel path. 

 

In addition to authorizing a “temporary rate” proceeding, the Order also suggested an examination of the applicability of a provision of New York public utility law, PSL §66(20), that provides the NYPSC with stated authority to direct a refund of revenues received by a utility “in excess of its authorized rate of return for a period of twelve months.” On May 17, 2013, Distribution Corporation commenced an action in New York Supreme Court, Erie County, seeking the court’s declaration that PSL §66(20) is unconstitutional and enjoining the NYPSC from issuing any orders or rules under PSL §66(20) or making any attempts to otherwise enforce the statute.  On June 20, 2013 and as anticipated, the NYPSC moved to dismiss Distribution Corporation’s complaint.  Distribution Corporation is unable to predict the outcome of the proceedings at this time.

Summary Of Significant Accounting Policies (Policy)

Principles of Consolidation.  The Company consolidates all entities in which it has a controlling financial interest.  All significant intercompany balances and transactions are eliminated.

 

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Reclassifications and Revisions.  Certain prior year amounts have been reclassified to conform with current year presentation.

 

Revisions were made on the Consolidated Statement of Cash Flows for the nine months ended June 30, 2012 to reflect non-cash investing activities embedded in Accounts Payable on the Consolidated Balance Sheets at June 30, 2012 and September 30, 2011.  These revisions increased the operating cash flows related to the change in Accounts Payable for the nine months ended June 30, 2012 by $32.8 million and decreased investing cash flows related to Capital Expenditures by the same amounts. 

 

In the subsequent period, revisions will be made on the Consolidated Statement of Cash Flows for the fiscal years ended September 30, 2012 and September 30, 2011 to reflect non-cash investing activities embedded in Accounts Payable on the Consolidated Balance Sheets for the respective periods.  The revisions for the fiscal years ended September 30, 2012 and September 30, 2011 will decrease operating cash flows by $1.8 million and $6.6 million, respectively, and increase investing cash flows related to Capital Expenditures by the same amounts.  The revisions in the Consolidated Statement of Cash Flows noted above represent errors that are not deemed material, individually or in the aggregate, to the prior period consolidated financial statements.

Earnings for Interim Periods.  The Company, in its opinion, has included all adjustments (which consist of only normally recurring adjustments, unless otherwise disclosed in this Form 10-Q) that are necessary for a fair statement of the results of operations for the reported periods. The consolidated financial statements and notes thereto, included herein, should be read in conjunction with the financial statements and notes for the years ended September 30, 2012, 2011 and 2010 that are included in the Company's 2012 Form 10-K.  The consolidated financial statements for the year ended September 30, 2013 will be audited by the Company's independent registered public accounting firm after the end of the fiscal year.

 

The earnings for the nine months ended June 30, 2013 should not be taken as a prediction of earnings for the entire fiscal year ending September 30, 2013.  Most of the business of the Utility and Energy Marketing segments is seasonal in nature and is influenced by weather conditions.  Due to the seasonal nature of the heating business in the Utility and Energy Marketing segments, earnings during the winter months normally represent a substantial part of the earnings that those segments are expected to achieve for the entire fiscal year.  The Company’s business segments are discussed more fully in Note 7 – Business Segment Information.

Consolidated Statement of Cash Flows.  For purposes of the Consolidated Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of generally three months or less to be cash equivalents.

 

The Company has accounts payable and accrued liabilities recorded on its Consolidated Balance Sheets that are related to capital expenditures.  These amounts represent non-cash investing activities at the balance sheet date.  Accordingly, they are excluded from the Consolidated Statement of Cash Flows when they are recorded as liabilities and included in the Consolidated Statement of Cash Flows when they are paid in the subsequent period.  The following table summarizes the Company’s non-cash capital expenditures recorded as Accounts Payable and Other Accruals and Current Liabilities on the Consolidated Balance Sheet:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30,

 

 

At September 30,

 

 

 

2013

 

 

2012

 

 

2012

 

 

2011

 

 

 

 

(Thousands)

Non-cash Capital Expenditures

 

 

$

58,632

 

 

$

118,624

 

 

$

67,503

 

 

$

125,115

 

Hedging Collateral Deposits.  This is an account title for cash held in margin accounts funded by the Company to serve as collateral for hedging positions.  The Company had hedging collateral deposits of $0.7 million and  $0.4 million related to its exchange-traded futures contracts at June 30, 2013 and September 30, 2012, respectively.  In accordance with its accounting policy, the Company does not offset hedging collateral deposits paid or received against related derivative financial instruments liability or asset balances.

Gas Stored Underground - Current.  In the Utility segment, gas stored underground – current is carried at lower of cost or market, on a LIFO method.  Gas stored underground – current normally declines during the first and second quarters of the year and is replenished during the third and fourth quarters.  In the Utility segment, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets under the caption “Other Accruals and Current Liabilities.”  Such reserve, which amounted to $22.0 million at June 30, 2013, is reduced to zero by September 30 of each year as the inventory is replenished.

Property, Plant and Equipment.  In the Company’s Exploration and Production segment, oil and gas property acquisition, exploration and development costs are capitalized under the full cost method of accounting. Under this methodology, all costs associated with property acquisition, exploration and development activities are capitalized, including internal costs directly identified with acquisition, exploration and development activities. The internal costs that are capitalized do not include any costs related to production, general corporate overhead, or similar activities. The Company does not recognize any gain or loss on the sale or other disposition of oil and gas properties unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center.

 

Capitalized costs include costs related to unproved properties, which are excluded from amortization until proved reserves are found or it is determined that the unproved properties are impaired.  Such costs amounted to $143.8 million and $146.1 million at June  30, 2013 and September 30, 2012, respectively.  All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. The amount of any impairment is transferred to the pool of capitalized costs being amortized.

 

Capitalized costs are subject to the SEC full cost ceiling test. The ceiling test, which is performed each quarter, determines a limit, or ceiling, on the amount of property acquisition, exploration and development costs that can be capitalized. The ceiling under this test represents (a) the present value of estimated future net cash flows, excluding future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, using a discount factor of 10%, which is computed by applying prices of oil and gas (as adjusted for hedging) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet, less estimated future expenditures, plus (b) the cost of unevaluated properties not being depleted, less (c) income tax effects related to the differences between the book and tax basis of the properties. The natural gas and oil prices used to calculate the full cost ceiling are based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the twelve-month period prior to the end of the reporting period. If capitalized costs, net of accumulated depreciation, depletion and amortization and related deferred income taxes, exceed the ceiling at the end of any quarter, a permanent impairment is required to be charged to earnings in that quarter.  At June  30, 2013, the ceiling exceeded the book value of the oil and gas properties by approximately  $199.1 million.

Accumulated Other Comprehensive Loss.  The components of Accumulated Other Comprehensive Loss, net of related tax effect, are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2013

 

At September 30, 2012

Funded Status of the Pension and Other Post-Retirement

 

 

 

 

 

 

Benefit Plans

 

$

(100,561)

 

$

(100,561)

Net Unrealized Gain (Loss) on Derivative Financial Instruments

 

 

36,865 

 

 

(1,602)

Net Unrealized Gain on Securities Available for Sale

 

 

5,087 

 

 

3,143 

Accumulated Other Comprehensive Loss

 

$

(58,609)

 

$

(99,020)

 

Other Current Assets.  The components of the Company’s Other Current Assets are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                            

 

At June 30, 2013

 

At September 30, 2012

 

 

 

 

 

 

 

Prepayments

 

$

10,472 

 

$

8,316 

Prepaid Property and Other Taxes

 

 

10,461 

 

 

14,455 

Federal Income Taxes Receivable

 

 

 -

 

 

268 

State Income Taxes Receivable

 

 

1,058 

 

 

2,065 

Fair Values of Firm Commitments

 

 

1,384 

 

 

1,291 

Regulatory Assets

 

 

22,830 

 

 

29,726 

 

 

$

46,205 

 

$

56,121 

 

Other Accruals and Current Liabilities.  The components of the Company’s Other Accruals and Current Liabilities are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                            

 

At June 30, 2013

 

At September 30, 2012

 

 

 

 

 

 

 

Accrued Capital Expenditures

 

$

49,348 

 

$

36,460 

Regulatory Liabilities

 

 

13,318 

 

 

18,289 

Reserve for Gas Replacement

 

 

22,032 

 

 

-

Other

 

 

25,235 

 

 

24,350 

 

 

$

109,933 

 

$

79,099 

 

Earnings Per Common Share.  Basic earnings per common share is computed by dividing net income available for common stock by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  For purposes of determining earnings per common share, the only potentially dilutive securities the Company has outstanding are stock options, SARs and restricted stock units.  The diluted weighted average shares outstanding shown on the Consolidated Statements of Income reflects the potential dilution as a result of these securities as determined using the Treasury Stock Method.  Stock options, SARs and restricted stock units that are antidilutive are excluded from the calculation of diluted earnings per common share.  There were 180,552 and 196,121 securities excluded as being antidilutive for the quarter and nine months ended June  30, 2013, respectively.  There were 976,870 and 833,170 securities excluded as being antidilutive for the quarter and nine months ended June 30, 2012, respectively.    

Stock-Based Compensation.  During the nine months ended June 30, 2013, the Company granted 412,970 SARs having a weighted average exercise price of $53.05 per share.  The weighted average grant date fair value of these SARs was $10.66 per share.  These SARs may be settled in cash, in shares of common stock of the Company, or in a combination of cash and shares of common stock of the Company, as determined by the Company.  These SARs are considered equity awards under the current authoritative guidance for stock-based compensation.  The accounting for those SARs is the same as the accounting for stock options.  The SARs granted during the nine months ended June  30, 2013 vest and become exercisable annually in one-third increments.  The weighted average grant date fair value of these SARs granted during the nine months ended June  30, 2013 was estimated on the date of grant using the same accounting treatment that is applied for stock options.  There were no stock options granted during the nine months ended June 30, 2013

 

The Company granted 255,604 performance based restricted stock units during the nine months ended June 30, 2013. The weighted average fair value of such performance based restricted stock units was $49.51 per share for the nine months ended June  30, 2013. The performance based restricted stock units granted during the nine months ended June  30, 2013 must meet a performance condition over the performance cycle of October 1, 2012 to September 30, 2015.  The performance condition over the performance cycle, generally stated, is the Company’s total return on capital as compared to the same metric for companies in the Natural Gas Distribution and Integrated Natural Gas Companies group as calculated and reported in the Monthly Utility Reports of AUS, Inc., a leading industry consultant.  The number of performance based restricted stock units that will vest will depend upon the Company’s performance relative to the report group and not upon the absolute level of return achieved by the Company.  The Company also granted 39,700 non-performance based restricted stock units during the nine months ended June 30, 2013.  The weighted average fair value of such non-performance based restricted stock units was $50.13 per share for the nine months ended June  30, 2013.

 

Restricted stock units, both performance based and non-performance based, represent the right to receive shares of common stock of the Company (or the equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company) at the end of a specified time period. The performance based and non-performance based restricted stock units do not entitle the participant to receive dividends during the vesting period. The accounting for performance based and non-performance based restricted stock units is the same as the accounting for restricted share awards, except that the fair value at the date of grant of the restricted stock units must be reduced by the present value of forgone dividends over the vesting term of the award. There were no restricted share awards granted during the nine months ended June  30, 2013

 

New Authoritative Accounting and Financial Reporting Guidance.  In December 2011, the FASB issued authoritative guidance requiring enhanced disclosures regarding offsetting assets and liabilities.  Companies are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement.  This authoritative guidance will be effective as of the Company’s first quarter of fiscal 2014 and is not expected to have a significant impact on the Company’s financial statements. 

 

In February 2013, the FASB issued authoritative guidance requiring enhanced disclosures regarding the reporting of amounts reclassified out of accumulated other comprehensive income.  The authoritative guidance requires parenthetical disclosure on the face of the financial statements or a single footnote that would provide more detail about the components of reclassification adjustments that are reclassified in their entirety to net income.  If a component of a reclassification adjustment is not reclassified in its entirety to net income, a cross reference would be made to the footnote disclosure that provides a more thorough discussion of the component involved in that reclassification adjustment.  This authoritative guidance will be effective as of the Company’s first quarter of fiscal 2014.  The Company does not expect this guidance to have a material impact.

            

Summary Of Significant Accounting Policies (Tables)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30,

 

 

At September 30,

 

 

 

2013

 

 

2012

 

 

2012

 

 

2011

 

 

 

 

(Thousands)

Non-cash Capital Expenditures

 

 

$

58,632

 

 

$

118,624

 

 

$

67,503

 

 

$

125,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2013

 

At September 30, 2012

Funded Status of the Pension and Other Post-Retirement

 

 

 

 

 

 

Benefit Plans

 

$

(100,561)

 

$

(100,561)

Net Unrealized Gain (Loss) on Derivative Financial Instruments

 

 

36,865 

 

 

(1,602)

Net Unrealized Gain on Securities Available for Sale

 

 

5,087 

 

 

3,143 

Accumulated Other Comprehensive Loss

 

$

(58,609)

 

$

(99,020)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                            

 

At June 30, 2013

 

At September 30, 2012

 

 

 

 

 

 

 

Prepayments

 

$

10,472 

 

$

8,316 

Prepaid Property and Other Taxes

 

 

10,461 

 

 

14,455 

Federal Income Taxes Receivable

 

 

 -

 

 

268 

State Income Taxes Receivable

 

 

1,058 

 

 

2,065 

Fair Values of Firm Commitments

 

 

1,384 

 

 

1,291 

Regulatory Assets

 

 

22,830 

 

 

29,726 

 

 

$

46,205 

 

$

56,121 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                            

 

At June 30, 2013

 

At September 30, 2012

 

 

 

 

 

 

 

Accrued Capital Expenditures

 

$

49,348 

 

$

36,460 

Regulatory Liabilities

 

 

13,318 

 

 

18,289 

Reserve for Gas Replacement

 

 

22,032 

 

 

-

Other

 

 

25,235 

 

 

24,350 

 

 

$

109,933 

 

$

79,099 

 

Fair Value Measurements (Tables)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring Fair Value Measures

 

At fair value as of June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Netting

 

 

 

(Thousands of Dollars)   

 

Level 1

 

Level 2

 

Level 3

 

Adjustments(1)

 

Total(1)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Equivalents – Money Market Mutual Funds

 

$

122,024 

 

$

 -

 

$

 -

 

$

 -

 

$

122,024 

Derivative Financial Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity Futures Contracts – Gas

 

 

2,252 

 

 

 -

 

 

 -

 

 

(1,806)

 

 

446 

Over the Counter Swaps – Gas

 

 

 -

 

 

63,255 

 

 

 -

 

 

(5,093)

 

 

58,162 

Over the Counter Swaps – Oil

 

 

 -

 

 

9,078 

 

 

17 

 

 

(3,260)

 

 

5,835 

Other Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balanced Equity Mutual Fund

 

 

30,125 

 

 

 -

 

 

 -

 

 

 -

 

 

30,125 

Common Stock – Financial Services Industry

 

 

6,331 

 

 

 -

 

 

 -

 

 

 -

 

 

6,331 

Other Common Stock

 

 

295 

 

 

 -

 

 

 -

 

 

 -

 

 

295 

Hedging Collateral Deposits

 

 

694 

 

 

 -

 

 

 -

 

 

 -

 

 

694 

Total                                           

 

$

161,721 

 

$

72,333 

 

$

17 

 

$

(10,159)

 

$

223,912 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Financial Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity Futures Contracts – Gas

 

$

1,806 

 

$

 -

 

$

 -

 

$

(1,806)

 

$

 -

Over the Counter Swaps – Gas

 

 

 -

 

 

2,626 

 

 

 -

 

 

(5,093)

 

 

(2,467)

Over the Counter Swaps – Oil

 

 

 -

 

 

 -

 

 

7,944 

 

 

(3,260)

 

 

4,684 

Total

 

$

1,806 

 

$

2,626 

 

$

7,944 

 

$

(10,159)

 

$

2,217 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Net Assets/(Liabilities)

 

$

159,915 

 

$

69,707 

 

$

(7,927)

 

$

 -

 

$

221,695 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring Fair Value Measures

 

At fair value as of September 30, 2012

 

 

 

 

 

 

 

 

 

 

 

Netting

 

 

 

(Thousands of Dollars)   

 

Level 1

 

Level 2

 

Level 3

 

Adjustments(1)

 

Total(1)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Equivalents – Money Market Mutual Funds

 

$

46,113 

 

$

 -

 

$

 -

 

$

 -

 

$

46,113 

Derivative Financial Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity Futures Contracts – Gas

 

 

4,348 

 

 

 -

 

 

 -

 

 

(2,760)

 

 

1,588 

Over the Counter Swaps – Gas

 

 

 -

 

 

41,751 

 

 

 -

 

 

(15,723)

 

 

26,028 

Over the Counter Swaps – Oil

 

 

 -

 

 

 -

 

 

559 

 

 

(559)

 

 

 -

Other Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balanced Equity Mutual Fund

 

 

24,767 

 

 

 -

 

 

 -

 

 

 -

 

 

24,767 

Common Stock – Financial Services Industry

 

 

4,758 

 

 

 -

 

 

 -

 

 

 -

 

 

4,758 

Other Common Stock

 

 

272 

 

 

 -

 

 

 -

 

 

 -

 

 

272 

Hedging Collateral Deposits

 

 

364 

 

 

 -

 

 

 -

 

 

 -

 

 

364 

Total                                           

 

$

80,622 

 

$

41,751 

 

$

559 

 

$

(19,042)

 

$

103,890 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Financial Instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity Futures Contracts – Gas

 

$

2,760 

 

$

 -

 

$

 -

 

$

(2,760)

 

$

 -

Over the Counter Swaps – Gas

 

 

 -

 

 

19,932 

 

 

 -

 

 

(15,723)

 

 

4,209 

Over the Counter Swaps – Oil

 

 

 -

 

 

654 

 

 

20,223 

 

 

(559)

 

 

20,318 

Total

 

$

2,760 

 

$

20,586 

 

$

20,223 

 

$

(19,042)

 

$

24,527 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Net Assets/(Liabilities)

 

$

77,862 

 

$

21,165 

 

$

(19,664)

 

$

 -

 

$

79,363 

 

(1)  Netting Adjustments represent the impact of legally-enforceable master netting arrangements that allow the Company to net gain and loss positions held with the same counterparties. The net asset or net liability for each counterparty is recorded as an asset or liability on the Company’s balance sheet.  In the tables above, presenting asset and liability information by gas and oil positions may result in negative assets or negative liabilities in Total column when a counterparty has issued both gas and oil swaps to the Company.

. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using Unobservable Inputs (Level 3)

(Thousands of Dollars)   

 

 

 

 

Total Gains/Losses 

 

 

 

 

 

 

 

 

 

 

 

(Gains)/

 

 

Gains/(Losses)

 

 

 

 

 

 

 

 

 

 

 

Losses Realized

 

 

Unrealized and Included

 

Transfer

 

 

 

 

 

April 1,

 

and Included

 

 

in Other Comprehensive

 

In/Out of

 

June 30,

 

 

2013

 

in Earnings

 

 

Income (Loss)

 

Level 3

 

2013

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Instruments(2)

 

$

(16,606)

 

$

2,471 
(1)

 

$

6,208 

 

$

 -

 

$

(7,927)

 

(1) Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the three months ended June  30, 2013. 

(2) Derivative Financial Instruments are shown on a net basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using Unobservable Inputs (Level 3)

(Thousands of Dollars)   

 

 

 

 

Total Gains/Losses 

 

 

 

 

 

 

 

 

 

 

 

(Gains)/

 

 

Gains/(Losses)

 

 

 

 

 

 

 

 

 

 

 

Losses Realized

 

 

Unrealized and Included

 

Transfer

 

 

 

 

 

October 1,

 

and Included

 

 

in Other Comprehensive

 

In/Out of

 

June 30,

 

 

2012

 

in Earnings

 

 

Income (Loss)

 

Level 3

 

2013

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Instruments(2)

 

$

(19,664)

 

$

9,271 
(1)

 

$

2,466 

 

$

 -

 

$

(7,927)

 

(1) Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the nine months ended June  30, 2013. 

(2) Derivative Financial Instruments are shown on a net basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using Unobservable Inputs (Level 3)

(Thousands of Dollars)

 

 

 

 

Total Gains/Losses

 

 

 

 

 

 

 

 

 

 

 

(Gains)/

 

 

Gains/(Losses)

 

 

 

 

 

 

 

 

 

 

 

Losses Realized

 

 

Unrealized and Included

 

Transfer

 

 

 

 

 

April 1,

 

and Included

 

 

In Other Comprehensive

 

In/Out of

 

June 30,

 

 

2012

 

in Earnings

 

 

Income (Loss)

 

Level 3

 

2012

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Instruments(2)

 

$

(68,754)

 

$

10,392 
(1)

 

$

41,814 

 

$

 -

 

$

(16,548)

 

(1) Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the three months ended June  30, 2012.    

(2) Derivative Financial Instruments are shown on a net basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using Unobservable Inputs (Level 3)

(Thousands of Dollars)

 

 

 

 

Total Gains/Losses

 

 

 

 

 

 

 

 

 

 

 

(Gains)/

 

 

Gains/(Losses)

 

 

 

 

 

 

 

 

 

 

 

Losses Realized

 

 

Unrealized and Included

 

Transfer

 

 

 

 

 

October 1,

 

and Included

 

 

In Other Comprehensive

 

In/Out of

 

June 30,

 

 

2011

 

in Earnings

 

 

Income (Loss)

 

Level 3

 

2012

Derivative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Instruments(2)

 

$

(5,410)

 

$

36,526 
(1)

 

$

(47,664)

 

$

 -

 

$

(16,548)

 

(1) Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the nine months ended June  30, 2012.    

(2) Derivative Financial Instruments are shown on a net basis.

Financial Instruments (Tables)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2013

 

September 30, 2012

 

 

Carrying

 

 

 

 

Carrying

 

 

 

 

 

Amount

 

Fair Value

 

Amount

 

Fair Value

Long-Term Debt

 

$

1,649,000 

 

$

1,790,040 

 

$

1,399,000 

 

$

1,623,847 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the

Three Months Ended June 30, 2013 and 2012 (Thousands of Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location of

 

 

Amount of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Gain

 

 

Derivative Gain or

 

 

 

 

 

 

 

 

 

 

 

 

 

 

or (Loss)

 

 

(Loss)

Location of

 

 

Derivative Gain

 

 

 

Amount of

Reclassified

 

 

Reclassified from

Derivative

 

 

or (Loss)

 

 

 

Derivative Gain or

from

 

 

Accumulated

Gain or

 

 

Recognized in

 

 

 

(Loss)

Accumulated

 

 

Other

(Loss)

 

 

the

 

 

 

Recognized in

Other

 

 

Comprehensive

Recognized

 

 

Consolidated

 

 

 

Other

Comprehensive

 

 

Income (Loss) on

in the

 

 

Statement of

 

 

 

Comprehensive

Income (Loss)

 

 

the Consolidated

Consolidated

 

 

Income

 

 

 

Income (Loss) on

on the

 

 

Balance Sheet

Statement of

 

 

(Ineffective

 

 

 

the Consolidated

Consolidated

 

 

into the

Income

 

 

Portion and

 

 

 

Statement of

Balance Sheet

 

 

Consolidated

(Ineffective

 

 

Amount

 

 

 

Comprehensive

into the

 

 

Statement of

Portion and

 

 

Excluded from

 

 

 

Income (Loss)

Consolidated

 

 

Income (Effective

Amount

 

 

Effectiveness

Derivatives in

 

 

(Effective Portion)

Statement of

 

 

Portion) for the

Excluded

 

 

Testing) for the

Cash Flow

 

 

for the Three

Income

 

 

Three Months

from

 

 

Three Months

Hedging

 

 

Months Ended

(Effective

 

 

Ended

Effectiveness

 

 

Ended

Relationships

 

 

June 30,

Portion)

 

 

June 30,

Testing)

 

 

June 30,

 

 

 

2013

 

 

2012

 

 

 

2013

 

 

2012

 

 

 

2013

 

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

Operating

 

 

 

 

 

 

Operating

 

 

 

 

 

 

segment

 

$

99,987 

 

$

31,358 

Revenue

 

$

1,504 

 

$

20,643 

Revenue

 

$

456 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

Not

 

 

 

 

 

 

segment

 

$

1,879 

 

$

(201)

Purchased Gas

 

$

(75)

 

$

956 

Applicable

 

$

 -

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage

 

 

 

 

 

 

Operating

 

 

 

 

 

 

Not

 

 

 

 

 

 

segment(1)

 

$

 -

 

$

(725)

Revenue

 

$

 -

 

$

 -

Applicable

 

$

 -

 

$

 -

Total

 

$

101,866 

 

$

30,432 

 

 

$

1,429 

 

$

21,599 

 

 

$

456 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the

Nine Months Ended June 30, 2013 and 2012 (Thousands of Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location of

 

 

Amount of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Gain

 

 

Derivative Gain or

 

 

 

 

 

 

 

 

 

 

 

 

 

 

or (Loss)

 

 

(Loss)

Location of

 

 

Derivative Gain

 

 

 

Amount of

Reclassified

 

 

Reclassified from

Derivative

 

 

or (Loss)

 

 

 

Derivative Gain or

from

 

 

Accumulated

Gain or

 

 

Recognized in

 

 

 

(Loss)

Accumulated

 

 

Other

(Loss)

 

 

the

 

 

 

Recognized in

Other

 

 

Comprehensive

Recognized

 

 

Consolidated

 

 

 

Other

Comprehensive

 

 

Income (Loss) on

in the

 

 

Statement of

 

 

 

Comprehensive

Income (Loss)

 

 

the Consolidated

Consolidated

 

 

Income

 

 

 

Income (Loss) on

on the

 

 

Balance Sheet

Statement of

 

 

(Ineffective

 

 

 

the Consolidated

Consolidated

 

 

into the

Income

 

 

Portion and

 

 

 

Statement of

Balance Sheet

 

 

Consolidated

(Ineffective

 

 

Amount

 

 

 

Comprehensive

into the

 

 

Statement of

Portion and

 

 

Excluded from

 

 

 

Income (Loss)

Consolidated

 

 

Income (Effective

Amount

 

 

Effectiveness

Derivatives in

 

 

(Effective Portion)

Statement of

 

 

Portion) for the

Excluded

 

 

Testing) for the

Cash Flow

 

 

for the Nine

Income

 

 

Nine Months

from

 

 

Nine Months

Hedging

 

 

Months Ended

(Effective

 

 

Ended

Effectiveness

 

 

Ended

Relationships

 

 

June 30,

Portion)

 

 

June 30,

Testing)

 

 

June 30,

 

 

 

2013

 

 

2012

 

 

 

2013

 

 

2012

 

 

 

2013

 

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production

 

 

 

 

 

 

Operating

 

 

 

 

 

 

Not

 

 

 

 

 

 

segment

 

$

86,237 

 

$

40,897 

Revenue

 

$

25,550 

 

$

38,633 

Applicable

 

$

 -

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing

 

 

 

 

 

 

 

 

 

 

 

 

 

Not

 

 

 

 

 

 

segment

 

$

3,628 

 

$

6,337 

Purchased Gas

 

$

(905)

 

$

10,440 

Applicable

 

$

 -

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Storage

 

 

 

 

 

 

Operating

 

 

 

 

 

 

Not

 

 

 

 

 

 

segment(1)

 

$

 -

 

$

(149)

Revenue

 

$

(672)

 

$

576 

Applicable

 

$

 -

 

$

 -

Total

 

$

89,865 

 

$

47,085 

 

 

$

23,973 

 

$

49,649 

 

 

$

 -

 

$

 -

 

 

(1)  There were no open hedging positions at June  30, 2013.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of

 

 

 

Amount of Gain

 

Gain or (Loss)

 

 

 

or (Loss) on

 

on the Hedged

 

 

 

Derivative

 

Item

 

Location of

 

Recognized in

 

Recognized in

 

Gain or (Loss)

 

the

 

the

 

on Derivative

 

Consolidated

 

Consolidated

 

and Hedged

 

Statement of

 

Statement of

 

Item

 

Income for the

 

Income for the

 

Recognized

 

Nine Months

 

Nine Months

 

in the

 

Ended

 

Ended

Derivatives in Fair Value

Consolidated

 

June 30,

 

June 30,

Hedging Relationships –

Statement of

 

2013

 

2013

Energy Marketing segment

Income

 

(In Thousands)

 

(In Thousands)

 

 

 

 

 

 

 

 

Commodity Contracts – Hedge of fixed price sales

Operating

 

 

 

 

 

 

commitments of natural gas

Revenues

 

$

(1,720)

 

$

1,720 

 

 

 

 

 

 

 

 

Commodity Contracts – Hedge of fixed price

Purchased

 

 

 

 

 

 

purchase commitments of natural gas

Gas

 

$

(148)

 

$

148 

 

 

 

 

 

 

 

 

Commodity Contracts – Hedge of natural gas held in

Purchased

 

 

 

 

 

 

storage

Gas

 

$

10 

 

$

(10)

 

 

 

$

(1,858)

 

$

1,858 

 

Income Taxes (Tables)

 

 

 

 

 

 

 

 

 

 

 

                                                         

 

Nine Months Ended

                                                         

 

June 30,

                                                         

 

2013

 

2012

Current Income Taxes 

 

 

 

 

 

 

Federal                                              

 

$

(518)

 

$

 -

State                                                  

 

 

3,934 

 

 

6,878 

 

 

 

 

 

 

 

Deferred Income Taxes                                

 

 

 

 

 

 

Federal                                               

 

 

105,362 

 

 

85,910 

State                                                    

 

 

35,645 

 

 

19,038 

 

 

 

144,423 

 

 

111,826 

Deferred Investment Tax Credit                            

 

 

(320)

 

 

(436)

 

 

 

 

 

 

 

Total Income Taxes                                      

 

$

144,103 

 

$

111,390 

 

 

 

 

 

 

 

Presented as Follows:

 

 

 

 

 

 

Other Income

 

 

(320)

 

 

(436)

Income Tax Expense

 

 

144,423 

 

 

111,826 

 

 

 

 

 

 

 

Total Income Taxes

 

$

144,103 

 

$

111,390 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

June 30,

 

 

2013

 

2012

 

 

 

 

 

 

 

U.S. Income Before Income Taxes

 

$

356,262 

 

$

282,665 

 

 

 

 

 

 

 

Income Tax Expense, Computed at U.S. Federal

 

 

 

 

 

 

Statutory Rate of 35%

 

$

124,692 

 

$

98,933 

 

 

 

 

 

 

 

Increase (Reduction) in Taxes Resulting from:

 

 

 

 

 

 

State Income Taxes

 

 

25,726 

 

 

16,845 

Miscellaneous

 

 

(6,315)

 

 

(4,388)

 

 

 

 

 

 

 

Total Income Taxes

 

$

144,103 

 

$

111,390 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                            

 

At June 30, 2013

 

At September 30, 2012

Deferred Tax Liabilities:

 

 

 

 

 

 

Property, Plant and Equipment

 

$

1,465,567 

 

$

1,333,574 

Pension and Other Post-Retirement Benefit      

 

 

 

 

 

 

Costs

 

 

244,453 

 

 

236,431 

Other                             

 

 

64,365 

 

 

43,294 

Total Deferred Tax Liabilities

 

 

1,774,385 

 

 

1,613,299 

 

 

 

 

 

 

 

Deferred Tax Assets:

 

 

 

 

 

 

Pension and Other Post-Retirement Benefit     

 

 

 

 

 

 

Costs

 

 

(276,056)

 

 

(276,501)

Tax Loss Carryforwards

 

 

(194,138)

 

 

(198,744)

Other                            

 

 

(81,612)

 

 

(83,052)

Total Deferred Tax Assets

 

 

(551,806)

 

 

(558,297)

Total Net Deferred Income Taxes

 

$

1,222,579 

 

$

1,055,002 

 

 

 

 

 

 

 

Presented as Follows:

 

 

 

 

 

 

Net Deferred Tax Liability/(Asset) – Current

 

 

(15,148)

 

 

(10,755)

Net Deferred Tax Liability – Non-Current

 

 

1,237,727 

 

 

1,065,757 

Total Net Deferred Income Taxes

 

$

1,222,579 

 

$

1,055,002 

 

Business Segment Information (Tables)
Financial Segment Information By Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended June 30, 2013 (Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline

 

Exploration

 

 

 

 

Total

 

 

 

 

Corporate and

 

 

 

 

 

 

 

 

and

 

and

 

Energy

 

Reportable

 

All

 

Intersegment

 

Total

 

 

Utility

 

Storage

 

Production

 

Marketing

 

Segments

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from External

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

141,257 

 

$

43,055 

 

$

195,213 

 

$

59,128 

 

$

438,653 

 

$

1,121 

 

$

234 

 

$

440,008 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Revenues

 

$

3,305 

 

$

21,708 

 

$

 -

 

$

446 

 

$

25,459 

 

$

10,244 

 

$

(35,703)

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

7,630 

 

$

14,075 

 

$

31,734 

 

$

963 

 

$

54,402 

 

$

4,499 

 

$

(406)

 

$

58,495 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended June 30, 2013 (Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline

 

Exploration

 

 

 

 

Total

 

 

 

 

Corporate and

 

 

 

 

 

 

 

 

and

 

and

 

Energy

 

Reportable

 

All

 

Intersegment

 

Total

 

 

Utility

 

Storage

 

Production

 

Marketing

 

Segments

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from External

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

653,211 

 

$

132,897 

 

$

518,742 

 

$

182,282 

 

$

1,487,132 

 

$

2,898 

 

$

658 

 

$

1,490,688 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Revenues

 

$

14,012 

 

$

68,216 

 

$

 -

 

$

1,080 

 

$

83,308 

 

$

23,622 

 

$

(106,930)

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

65,024 

 

$

47,803 

 

$

86,125 

 

$

5,741 

 

$

204,693 

 

$

9,449 

 

$

(1,983)

 

$

212,159 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2013 (Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline

 

Exploration

 

 

 

 

Total

 

 

 

 

Corporate and

 

 

 

 

 

 

 

 

and

 

and

 

Energy

 

Reportable

 

All

 

Intersegment

 

Total

 

 

Utility

 

Storage

 

Production

 

Marketing

 

Segments

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Assets

 

$

2,074,329 

 

$

1,281,445

 

$

2,614,406 

 

$

69,106 

 

$

6,039,286 

 

$

273,048

 

$

31,606 

 

$

6,343,940 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended June 30, 2012 (Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline

 

Exploration

 

 

 

 

Total

 

 

 

 

Corporate and

 

 

 

 

 

 

 

 

and

 

and

 

Energy

 

Reportable

 

All

 

Intersegment

 

Total

 

 

Utility

 

Storage

 

Production

 

Marketing

 

Segments

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from External

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

117,240 

 

$

36,631 

 

$

138,549 

 

$

35,377 

 

$

327,797 

 

$

824 

 

$

240 

 

$

328,861 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Revenues

 

$

2,703 

 

$

22,076 

 

$

 -

 

$

579 

 

$

25,358 

 

$

4,307 

 

$

(29,665)

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

5,096 

 

$

12,627 

 

$

21,915 

 

$

923 

 

$

40,561 

 

$

2,815 

 

$

(192)

 

$

43,184 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended June 30, 2012 (Thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline

 

Exploration

 

 

 

 

Total

 

 

 

 

Corporate and

 

 

 

 

 

 

 

 

and

 

and

 

Energy

 

Reportable

 

All

 

Intersegment

 

Total

 

 

Utility

 

Storage

 

Production

 

Marketing

 

Segments

 

Other

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from External

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

622,836 

 

$

113,976 

 

$

411,449 

 

$

161,822 

 

$

1,310,083 

 

$

2,784 

 

$

726 

 

$

1,313,593 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Revenues

 

$

12,643 

 

$

64,434 

 

$

 -

 

$

1,135 

 

$

78,212 

 

$

10,828 

 

$

(89,040)

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

52,725 

 

$

35,428 

 

$

74,422 

 

$

4,662 

 

$

167,237 

 

$

5,557 

 

$

(1,519)

 

$

171,275 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement Plan And Other Post-Retirement Benefits (Tables)
Components Of Net Periodic Benefit Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Post-Retirement

 

 

Retirement Plan

 

Benefits

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Cost

 

$

3,961 

 

$

3,551 

 

$

1,176 

 

$

1,004 

Interest Cost

 

 

9,124 

 

 

10,381 

 

 

4,803 

 

 

5,329 

Expected Return on Plan Assets

 

 

(14,336)

 

 

(14,925)

 

 

(8,218)

 

 

(7,243)

Amortization of Prior Service Cost

 

 

60 

 

 

67 

 

 

(534)

 

 

(534)

Amortization of Transition Amount

 

 

-

 

 

-

 

 

 

 

Amortization of Losses

 

 

13,194 

 

 

9,904 

 

 

5,223 

 

 

6,014 

Net Amortization and Deferral for

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory Purposes (Including

 

 

 

 

 

 

 

 

 

 

 

 

Volumetric Adjustments) (1)

 

 

(3,854)

 

 

(2,252)

 

 

2,393 

 

 

718 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Periodic Benefit Cost

 

$

8,149 

 

$

6,726 

 

$

4,845 

 

$

5,291 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Post-Retirement

 

 

Retirement Plan

 

Benefits

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Cost

 

$

11,884 

 

$

10,652 

 

$

3,529 

 

$

3,012 

Interest Cost

 

 

27,373 

 

 

31,144 

 

 

14,409 

 

 

15,986 

Expected Return on Plan Assets

 

 

(43,009)

 

 

(44,776)

 

 

(24,654)

 

 

(21,728)

Amortization of Prior Service Cost

 

 

179 

 

 

202 

 

 

(1,604)

 

 

(1,604)

Amortization of Transition Amount

 

 

 -

 

 

 -

 

 

 

 

Amortization of Losses

 

 

39,582 

 

 

29,711 

 

 

15,669 

 

 

18,043 

Net Amortization and Deferral for

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory Purposes (Including

 

 

 

 

 

 

 

 

 

 

 

 

Volumetric Adjustments) (1)

 

 

(5,813)

 

 

(1,896)

 

 

11,555 

 

 

7,993 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Periodic Benefit Cost

 

$

30,196 

 

$

25,037 

 

$

18,910 

 

$

21,710 

 

(1)    The Companys policy is to record retirement plan and other post-retirement benefit costs in the Utility segment on a volumetric basis to reflect the fact that the Utility segment experiences higher throughput of natural gas in the winter months and lower throughput of natural gas in the summer months.

Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Sep. 30, 2012
Sep. 30, 2011
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
Revisions to increase operating cash flows and decrease investing cash flows
 
 
 
$ 32,800,000 
 
 
Revisions to decrease operating cash flows and increase investing cash flows
 
 
 
 
1,800,000 
6,600,000 
Hedging collateral deposits
694,000 1
 
694,000 1
 
364,000 1
 
Gas stored underground - current
(22,180,000)
 
(22,180,000)
 
(49,795,000)
 
Capitalized costs of unproved properties excluded from amortization
 
 
143,800,000 
 
146,100,000 
 
Full cost ceiling test discount factor
10.00% 
 
10.00% 
 
 
 
Amount full cost ceiling exceeds book value of oil and gas properties
199,100,000 
 
199,100,000 
 
 
 
Antidilutive securities
180,552 
976,870 
196,121 
833,170 
 
 
Reserve For Gas Replacement [Member]
 
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
Gas stored underground - current
22,032,000 
 
22,032,000 
 
 
Stock Options [Member]
 
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
Stock options granted
 
 
 
 
 
Restricted Shares [Member]
 
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
Share based compensation other than options grants in period
 
 
 
 
 
Stock Appreciation Right [Member]
 
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
Share based compensation other than options grants in period
 
 
412,970 
 
 
 
Share based compensation arrangement by share based payment award other than options grants in period weighted average grant date exercise price
 
 
$ 53.05 
 
 
 
Granted in fiscal year, weighted average grant date fair value
 
 
$ 10.66 
 
 
 
Non-performance Based Restricted Stock Units [Member]
 
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
Share based compensation other than options grants in period
 
 
39,700 
 
 
 
Granted in fiscal year, weighted average grant date fair value
 
 
$ 50.13 
 
 
 
Performance Based Restricted Stock Units [Member]
 
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
Share based compensation other than options grants in period
 
 
255,604 
 
 
 
Granted in fiscal year, weighted average grant date fair value
 
 
$ 49.51 
 
 
 
Exchange-Traded Futures Contracts [Member]
 
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
Hedging collateral deposits
$ 700,000 
 
$ 700,000 
 
$ 400,000 
 
Summary Of Significant Accounting Policies (Schedule Of Non-Cash Expenditures) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Sep. 30, 2012
Sep. 30, 2011
Summary Of Significant Accounting Policies [Abstract]
 
 
 
 
Non-Cash Capital Expenditure, Non-Cash Investing Activity
$ 58,632 
$ 118,624 
$ 67,503 
$ 125,115 
Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Sep. 30, 2012
Summary Of Significant Accounting Policies [Abstract]
 
 
Funded Status of the Pension and Other Post-Retirement Benefit Plans
$ (100,561)
$ (100,561)
Net Unrealized Gain (Loss) on Derivative Financial Instruments
36,865 
(1,602)
Net Unrealized Gain on Securities Available for Sale
5,087 
3,143 
Accumulated Other Comprehensive Loss
$ (58,609)
$ (99,020)
Summary Of Significant Accounting Policies (Components Of Other Current Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Sep. 30, 2012
Summary Of Significant Accounting Policies [Line Items]
 
 
Prepayments
$ 10,472 
$ 8,316 
Prepaid Property and Other Taxes
10,461 
14,455 
Fair Values of Firm Commitments
1,384 
1,291 
Regulatory Assets
22,830 
29,726 
Other Current Assets
46,205 
56,121 
Federal [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Income Taxes Receivable
268 
State [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Income Taxes Receivable
$ 1,058 
$ 2,065 
Summary Of Significant Accounting Policies (Schedule Of Other Accruals And Current Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Sep. 30, 2012
Sep. 30, 2011
Segment Reporting Information [Line Items]
 
 
 
 
Accrued Capital Expenditures
$ 58,632 
$ 118,624 
$ 67,503 
$ 125,115 
Regulatory Liabilities
13,318 
 
18,289 
 
Reserve for Gas Replacement
(22,180)
 
(49,795)
 
Other
25,235 
 
24,350 
 
Total Other Accruals and Current Liabilities
109,933 
 
79,099 
 
Other Accruals [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Accrued Capital Expenditures
49,348 
 
36,460 
 
Reserve For Gas Replacement [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Reserve for Gas Replacement
$ 22,032 
 
$ 0 
 
Fair Value Measurements (Narrative) (Details) (USD $)
9 Months Ended
Jun. 30, 2013
Sep. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
$ 694,000 1
$ 364,000 1
Assumed 12 month basis differential comparison to NYMEX
109.30% 
 
Assumed 12 month minimum basis differential comparison to NYMEX
102.30% 
 
Assumed 12 month maximum basis differential comparison to NYMEX
112.40% 
 
Fair Value Measured On Recurring Basis, Net
221,695,000 1
79,363,000 1
Over The Counter Swaps - Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair Value Measured On Recurring Basis, Net
(7,900,000)
 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
694,000 
364,000 
Fair Value Measured On Recurring Basis, Net
159,915,000 
77,862,000 
Fair Value, Inputs, Level 1 [Member] |
NYMEX Futures [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
700,000 
400,000 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
Fair Value Measured On Recurring Basis, Net
(7,927,000)
(19,664,000)
Higher [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Basis Differential On NYMEX Sensitivity
10.00% 
 
Fair value of crude oil price swap sensitivity
(9,500,000)
 
Lower [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Basis Differential On NYMEX Sensitivity
10.00% 
 
Fair value of crude oil price swap sensitivity
$ 1,300,000 
 
Fair Value Measurements (Recurring Fair Value Measures Of Assets And Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Sep. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
$ 122,024 1
$ 46,113 1
Hedging Collateral Deposits
694 1
364 1
Total Assets
223,912 1
103,890 1
Total Liabilities
2,217 1
24,527 1
Total Net Assets/(Liabilities)
221,695 1
79,363 1
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
446 1
1,588 1
Derivative Financial Instruments
1
1
Over The Counter Swaps - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
58,162 1
26,028 1
Derivative Financial Instruments
(2,467)1
4,209 1
Over The Counter Swaps - Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
5,835 1
1
Derivative Financial Instruments
4,684 1
20,318 1
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
30,125 1
24,767 1
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
6,331 1
4,758 1
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
295 1
272 1
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
122,024 
46,113 
Hedging Collateral Deposits
694 
364 
Total Assets
161,721 
80,622 
Total Liabilities
1,806 
2,760 
Total Net Assets/(Liabilities)
159,915 
77,862 
Fair Value, Inputs, Level 1 [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
2,252 
4,348 
Derivative Financial Instruments
1,806 
2,760 
Fair Value, Inputs, Level 1 [Member] |
Over The Counter Swaps - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
Fair Value, Inputs, Level 1 [Member] |
Over The Counter Swaps - Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
Fair Value, Inputs, Level 1 [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
30,125 
24,767 
Fair Value, Inputs, Level 1 [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
6,331 
4,758 
Fair Value, Inputs, Level 1 [Member] |
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
295 
272 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
Hedging Collateral Deposits
Total Assets
72,333 
41,751 
Total Liabilities
2,626 
20,586 
Total Net Assets/(Liabilities)
69,707 
21,165 
Fair Value, Inputs, Level 2 [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
Fair Value, Inputs, Level 2 [Member] |
Over The Counter Swaps - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
63,255 
41,751 
Derivative Financial Instruments
2,626 
19,932 
Fair Value, Inputs, Level 2 [Member] |
Over The Counter Swaps - Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
9,078 
Derivative Financial Instruments
654 
Fair Value, Inputs, Level 2 [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Fair Value, Inputs, Level 2 [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Fair Value, Inputs, Level 2 [Member] |
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
Hedging Collateral Deposits
Total Assets
17 
559 
Total Liabilities
7,944 
20,223 
Total Net Assets/(Liabilities)
(7,927)
(19,664)
Fair Value, Inputs, Level 3 [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
Fair Value, Inputs, Level 3 [Member] |
Over The Counter Swaps - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
Fair Value, Inputs, Level 3 [Member] |
Over The Counter Swaps - Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
17 
559 
Derivative Financial Instruments
7,944 
20,223 
Fair Value, Inputs, Level 3 [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Fair Value, Inputs, Level 3 [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Fair Value, Inputs, Level 3 [Member] |
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Netting Adjustments [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
1
1
Hedging Collateral Deposits
1
1
Total Assets
(10,159)1
(19,042)1
Total Liabilities
(10,159)1
(19,042)1
Total Net Assets/(Liabilities)
1
1
Netting Adjustments [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
(1,806)1
(2,760)1
Derivative Financial Instruments
(1,806)1
(2,760)1
Netting Adjustments [Member] |
Over The Counter Swaps - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
(5,093)1
(15,723)1
Derivative Financial Instruments
(5,093)1
(15,723)1
Netting Adjustments [Member] |
Over The Counter Swaps - Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
(3,260)1
(559)1
Derivative Financial Instruments
(3,260)1
(559)1
Netting Adjustments [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
1
1
Netting Adjustments [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
1
1
Netting Adjustments [Member] |
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
$ 0 1
$ 0 1
Fair Value Measurements (Fair Value Measurements Using Unobservable Inputs (Level 3)) (Details) (Derivative Financial Instruments [Member], USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Derivative Financial Instruments [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Beginning Balance
$ (16,606)1
$ (68,754)1
$ (19,664)1
$ (5,410)1
Total Gains/Losses, Realized and Included in Earnings
2,471 1 2
10,392 1 3
9,271 1 4
36,526 1 5
Total Gains/Losses Unrealized and Included in Other Comprehensive Income (Loss)
6,208 1
41,814 1
2,466 1
(47,664)1
Transfer In/Out of Level 3
1
1
1
1
Ending Balance
$ (7,927)1
$ (16,548)1
$ (7,927)1
$ (16,548)1
Financial Instruments (Narrative) (Details) (USD $)
9 Months Ended
Jun. 30, 2013
entity
Sep. 30, 2012
Jun. 30, 2013
Exploration And Production [Member]
Jun. 30, 2013
Energy Marketing [Member]
Jun. 30, 2013
Equity Mutual Fund [Member]
Sep. 30, 2012
Equity Mutual Fund [Member]
Jun. 30, 2013
Insurance Company Stock [Member]
Sep. 30, 2012
Insurance Company Stock [Member]
Jun. 30, 2013
Over-The-Counter Swap Position
Jun. 30, 2013
Over-The-Counter Swap Position
Credit Risk Related Contingency Feature [Member]
entity
Jun. 30, 2013
Fixed Price Purchase Commitments MMCf [Member]
Energy Marketing [Member]
MMcf
Jun. 30, 2013
Exchange-Traded Futures Contracts [Member]
Sep. 30, 2012
Exchange-Traded Futures Contracts [Member]
Jun. 30, 2013
Fair Value Hedges MMCf [Member]
MMcf
Jun. 30, 2013
Fixed Price Sales Commitments MMCf [Member]
Energy Marketing [Member]
MMcf
Jun. 30, 2013
Natural Gas MMCf [Member]
Exploration And Production [Member]
Cash Flow Hedges Short Position [Member]
MMcf
Jun. 30, 2013
Natural Gas MMCf [Member]
Energy Marketing [Member]
MMcf
Jun. 30, 2013
Natural Gas MMCf [Member]
Energy Marketing [Member]
Cash Flow Hedges Short Position [Member]
MMcf
Jun. 30, 2013
Natural Gas MMCf [Member]
Energy Marketing [Member]
Cash Flow Hedges Long Position [Member]
MMcf
Jun. 30, 2013
Crude Oil Bbls [Member]
Exploration And Production [Member]
Cash Flow Hedges Short Position [Member]
bbl
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash surrender value of life insurance
$ 57,000,000 
$ 57,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value
 
 
 
 
30,100,000 
24,800,000 
6,300,000 
4,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
Gross unrealized gain
 
 
 
 
4,100,000 
2,600,000 
3,900,000 
2,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
Nonmonetary notional amount of price risk cash flow hedge derivatives, natural gas
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
208,000 
7,100 
5,600 
1,500 
 
Nonmonetary notional amount of price risk cash flow hedge derivatives, crude oil
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,134,000 
Net hedging gains/losses in accumulated other comprehensive income (loss)
 
 
61,600,000 
1,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
After tax net hedging gains (losses) in accumulated other comprehensive income (loss)
 
 
35,800,000 
1,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-Tax Net Hedging Gain (Losses) Reclassified Within Twelve Months
 
 
40,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
After Tax Net Hedging Gains (Losses) Reclassified Within Twelve Months
 
 
23,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of counterparties in which the company holds over-the-counter swap positions
13 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of counterparties with a common credit-risk related contingency
 
 
 
 
 
 
 
 
 
11 
 
 
 
 
 
 
 
 
 
 
Number of counterparties in net gain position
11 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit risk exposure per counterparty
 
 
 
 
 
 
 
 
5,800,000 
 
 
 
 
 
 
 
 
 
 
 
Maximum credit risk exposure per counterparty
 
 
 
 
 
 
 
 
12,200,000 
 
 
 
 
 
 
 
 
 
 
 
Fair market value of derivative asset with a credit-risk related contingency
48,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair market value of derivative liability with a credit-risk related contingency
2,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hedging collateral deposits
$ 694,000 1
$ 364,000 1
 
 
 
 
 
 
 
 
 
$ 700,000 
$ 400,000 
 
 
 
 
 
 
 
Nonmonetary notional amount of price risk fair value hedge derivatives, natural gas
 
 
 
 
 
 
 
 
 
 
1,000 
 
 
7,800 
6,800 
 
 
 
 
 
Financial Instruments (Long-Term Debt) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Sep. 30, 2012
Financial Instruments [Abstract]
 
 
Carrying Amount
$ 1,649,000 
$ 1,399,000 
Fair Value
$ 1,790,040 
$ 1,623,847 
Financial Instruments (Schedule Of Derivative Financial Instruments Designated And Qualifying As Cash Flow Hedges On The Statement Of Financial Performance) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion)
$ 101,866 
$ 30,432 
$ 89,865 
$ 47,085 
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
1,429 
21,599 
23,973 
49,649 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
456 
Exploration And Production [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion)
99,987 
31,358 
86,237 
40,897 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
 
Exploration And Production [Member] |
Operating Revenues [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
1,504 
20,643 
25,550 
38,633 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
456 
 
 
Energy Marketing [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion)
1,879 
(201)
3,628 
6,337 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Energy Marketing [Member] |
Purchased Gas [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
(75)
956 
(905)
10,440 
Pipeline And Storage [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion)
(725)
(149)
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Pipeline And Storage [Member] |
Operating Revenues [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
$ 0 
$ 0 
$ (672)
$ 576 
Financial Instruments (Schedule of Derivatives and Hedged Items in Fair Value Hedging Relationships) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Jun. 30, 2013
Derivative Instruments, Gain (Loss) [Line Items]
 
Gain or (Loss) on the Derivative Recognized in the Consolidated Statement of Income
$ (1,858)
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
1,858 
Operating Revenues [Member] |
Fixed Price Sales Commitments Of Natural Gas [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Gain or (Loss) on the Derivative Recognized in the Consolidated Statement of Income
(1,720)
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
1,720 
Purchased Gas [Member] |
Fixed Price Purchase Commitments Of Natural Gas [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Gain or (Loss) on the Derivative Recognized in the Consolidated Statement of Income
(148)
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
148 
Purchased Gas [Member] |
Natural Gas Held in Storage [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Gain or (Loss) on the Derivative Recognized in the Consolidated Statement of Income
10 
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
$ (10)
Income Taxes (Narrative) (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended
Mar. 31, 2013
Jun. 30, 2013
Sep. 30, 2012
Income Taxes [Line Items]
 
 
 
Taxes refundable to customers
 
$ 65,069,000 
$ 66,392,000 
Recoverable future taxes
 
152,122,000 
150,941,000 
Tax benefit recorded from exercise of stock options
 
4,300,000 
600,000 
Tax Benefit Not Realized Due to Tax Loss Carryforward
 
33,600,000 
32,700,000 
Unrecognized tax benefit decrease
 
9,300,000 
 
Amount of the unrecognized tax benefit decrease that reduced the effective rate
2,100,000 
 
 
Amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate
 
2,000,000 
 
Change in unrecognized tax benefits
 
2,000,000 
 
Deferred Income Taxes [Member]
 
 
 
Income Taxes [Line Items]
 
 
 
Taxes refundable to customers
 
65,100,000 
66,400,000 
Recoverable future taxes
 
$ 152,100,000 
$ 150,900,000 
Income Taxes (Components Of Federal And State Income Taxes Included In The Consolidated Statements Of Income) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Income Taxes [Abstract]
 
 
 
 
Current Income Taxes - Federal
 
 
$ (518)
$ 0 
Current Income Taxes - State
 
 
3,934 
6,878 
Deferred Income Taxes - Federal
 
 
105,362 
85,910 
Deferred Income Taxes - State
 
 
35,645 
19,038 
Income Tax Expense
45,688 
26,228 
144,423 
111,826 
Deferred Investment Tax Credit
 
 
(320)
(436)
Total Income Taxes
 
 
144,103 
111,390 
Other Income
 
 
(320)
(436)
Income Tax Expense
$ 45,688 
$ 26,228 
$ 144,423 
$ 111,826 
Income Taxes (Schedule Of Income Tax Reconciliation By Applying Federal Income Tax Rate) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Income Taxes [Abstract]
 
 
U.S. Income Before Income Taxes
$ 356,262 
$ 282,665 
Income Tax Expense, Computed at U.S. Federal Statutory Rate of 35%
124,692 
98,933 
Increase (Reduction) in Taxes Resulting from State Income Taxes
25,726 
16,845 
Increase (Reduction) in Taxes Resulting From Miscellaneous
(6,315)
(4,388)
Total Income Taxes
$ 144,103 
$ 111,390 
Federal Statutory Rate
35.00% 
35.00% 
Income Taxes (Significant Components Of Deferred Tax Liabilities And Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Sep. 30, 2012
Income Taxes [Abstract]
 
 
Property, Plant and Equipment
$ 1,465,567 
$ 1,333,574 
Pension and Other Post-Retirement Benefit Costs
244,453 
236,431 
Other
64,365 
43,294 
Total Deferred Tax Liabilities
1,774,385 
1,613,299 
Pension and Other Post-Retirement Benefit Costs
(276,056)
(276,501)
Tax Loss Carryforwards
(194,138)
(198,744)
Other
(81,612)
(83,052)
Total Deferred Tax Assets
(551,806)
(558,297)
Total Net Deferred Income Taxes
1,222,579 
1,055,002 
Net Deferred Tax Liability/(Asset) - Current
(15,148)
(10,755)
Net Deferred Tax Liability - Non-Current
$ 1,237,727 
$ 1,065,757 
Capitalization (Details) (USD $)
9 Months Ended 0 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Sep. 30, 2012
5.25% Notes Due in March 2013
Feb. 15, 2013
3.75% Notes Due In March 1, 2023 [Member]
Debt Instrument [Line Items]
 
 
 
 
Common stock shares issued due to stock option exercises
457,091 
 
 
 
Issue shares of common stock for the Direct Stock Purchase and Dividend Reinvestment Plan
97,554 
 
 
 
Common stock issued
12,380 
 
 
 
Shares tendered
309,307 
 
 
 
Current portion of long-term debt
 
 
$ 250,000,000 
 
Long-term debt, face value
 
 
 
500,000,000 
Long-term debt, interest rate
 
 
5.25% 
3.75% 
Percentage of principal amount
 
 
 
101.00% 
Net proceeds from issuance of long-term debt
$ 495,415,000 
$ 496,085,000 
 
$ 495,400,000 
Commitments And Contingencies (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Jun. 30, 2013
Site Contingency [Line Items]
 
Estimated minimum liability for environmental remediation
$ 16.8 
Rate recovery period
11 years 
Former Manufactured Gas Plant Site [Member]
 
Site Contingency [Line Items]
 
Estimated minimum liability for environmental remediation
$ 13.9 
Business Segment Information (Financial Segment Information By Segment) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Sep. 30, 2012
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
$ 58,495 
$ 43,184 
$ 212,159 
$ 171,275 
 
Segment Assets
6,343,940 
 
6,343,940 
 
5,935,142 
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
440,008 
328,861 
1,490,688 
1,313,593 
 
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
 
Utility [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
7,630 
5,096 
65,024 
52,725 
 
Segment Assets
2,074,329 
 
2,074,329 
 
 
Utility [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
141,257 
117,240 
653,211 
622,836 
 
Utility [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
3,305 
2,703 
14,012 
12,643 
 
Pipeline And Storage [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
14,075 
12,627 
47,803 
35,428 
 
Segment Assets
1,281,445 
 
1,281,445 
 
 
Pipeline And Storage [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
43,055 
36,631 
132,897 
113,976 
 
Pipeline And Storage [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
21,708 
22,076 
68,216 
64,434 
 
Exploration And Production [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
31,734 
21,915 
86,125 
74,422 
 
Segment Assets
2,614,406 
 
2,614,406 
 
 
Exploration And Production [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
195,213 
138,549 
518,742 
411,449 
 
Exploration And Production [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
 
Energy Marketing [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
963 
923 
5,741 
4,662 
 
Segment Assets
69,106 
 
69,106 
 
 
Energy Marketing [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
59,128 
35,377 
182,282 
161,822 
 
Energy Marketing [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
446 
579 
1,080 
1,135 
 
Total Reportable Segments [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
54,402 
40,561 
204,693 
167,237 
 
Segment Assets
6,039,286 
 
6,039,286 
 
 
Total Reportable Segments [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
438,653 
327,797 
1,487,132 
1,310,083 
 
Total Reportable Segments [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
25,459 
25,358 
83,308 
78,212 
 
All Other [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
4,499 
2,815 
9,449 
5,557 
 
Segment Assets
273,048 
 
273,048 
 
 
All Other [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
1,121 
824 
2,898 
2,784 
 
All Other [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
10,244 
4,307 
23,622 
10,828 
 
Corporate And Intersegment Eliminations [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
(406)
(192)
(1,983)
(1,519)
 
Segment Assets
31,606 
 
31,606 
 
 
Corporate And Intersegment Eliminations [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
234 
240 
658 
726 
 
Corporate And Intersegment Eliminations [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
$ (35,703)
$ (29,665)
$ (106,930)
$ (89,040)
 
Retirement Plan And Other Post-Retirement Benefits (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Jun. 30, 2013
Retirement Plan [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Company's contributions
$ 42.0 
Estimated future contributions in remainder of fiscal year
10.0 
VEBA Trusts And 401(h) Accounts [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Company's contributions
15.8 
Estimated future contributions in remainder of fiscal year
$ 2.2 
Retirement Plan And Other Post-Retirement Benefits (Components Of Net Periodic Benefit Cost) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service Cost
$ 3,961 
$ 3,551 
$ 11,884 
$ 10,652 
Interest Cost
9,124 
10,381 
27,373 
31,144 
Expected Return on Plan Assets
(14,336)
(14,925)
(43,009)
(44,776)
Amortization of Prior Service Cost
60 
67 
179 
202 
Amortization of Transition Amount
Amortization of Losses
13,194 
9,904 
39,582 
29,711 
Net Amortization and Deferral For Regulatory Purposes (Including Volumetric Adjustments)
(3,854)1
(2,252)1
(5,813)1
(1,896)1
Net Periodic Benefit Cost
8,149 
6,726 
30,196 
25,037 
Other Post-Retirement Benefit Plans, Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service Cost
1,176 
1,004 
3,529 
3,012 
Interest Cost
4,803 
5,329 
14,409 
15,986 
Expected Return on Plan Assets
(8,218)
(7,243)
(24,654)
(21,728)
Amortization of Prior Service Cost
(534)
(534)
(1,604)
(1,604)
Amortization of Transition Amount
Amortization of Losses
5,223 
6,014 
15,669 
18,043 
Net Amortization and Deferral For Regulatory Purposes (Including Volumetric Adjustments)
2,393 1
718 1
11,555 1
7,993 1
Net Periodic Benefit Cost
$ 4,845 
$ 5,291 
$ 18,910 
$ 21,710 
Regulatory Matters (Details)
Mar. 27, 2013
Regulatory Matters [Abstract]
 
Rate of return on equity
9.96%