NATIONAL FUEL GAS CO, 10-K filed on 11/21/2012
Annual Report
Document And Entity Information (USD $)
12 Months Ended
Sep. 30, 2012
Oct. 31, 2012
Mar. 31, 2012
Document And Entity Information [Abstract]
 
 
 
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Sep. 30, 2012 
 
 
Document Fiscal Year Focus
2012 
 
 
Document Fiscal Period Focus
FY 
 
 
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
 
83,374,585 
 
Entity Public Float
 
 
$ 3,890,757,000 
Entity Current Reporting Status
Yes 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Trading Symbol
nfg 
 
 
Consolidated Statements Of Income And Earnings Reinvested In The Business (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
INCOME
 
 
 
Operating Revenues
$ 1,626,853 
$ 1,778,842 
$ 1,760,503 
Operating Expenses
 
 
 
Purchased Gas
415,589 
628,732 
658,432 
Operation and Maintenance
401,397 
400,519 
394,569 
Property, Franchise and Other Taxes
90,288 
81,902 
75,852 
Depreciation, Depletion and Amortization
271,530 
226,527 
191,199 
Total Operating Expenses
1,178,804 
1,337,680 
1,320,052 
Depreciation Depletion And Amortization Excluding Discontinued Operations
271,530 
226,527 
191,199 
Operating Income
448,049 
441,162 
440,451 
Other Income (Expense):
 
 
 
Gain on Sale of Unconsolidated Subsidiaries
50,879 
Other Income
5,133 
5,947 
6,126 
Interest Income
3,689 
2,916 
3,729 
Interest Expense on Long-Term Debt
(82,002)
(73,567)
(87,190)
Other Interest Expense
(4,238)
(4,554)
(6,756)
Income from Continuing Operations Before Income Taxes
370,631 
422,783 
356,360 
Income Tax Expense
150,554 
164,381 
137,227 
Income from Continuing Operations
220,077 
258,402 
219,133 
Discontinued Operations:
 
 
 
Income from Operations, Net of Tax
470 
Gain on Disposal, Net of Tax
6,310 
Income from Discontinued Operations, Net of Tax
6,780 
Net Income Available for Common Stock
220,077 
258,402 
225,913 
EARNINGS REINVESTED IN THE BUSINESS
 
 
 
Balance at Beginning of Year
1,206,022 
1,063,262 
948,293 
Beginning Retained Earnings Unappropriated And Current Period Net Income Loss
1,426,099 
1,321,664 
1,174,206 
Dividends on Common Stock
(119,815)
(115,642)
(110,944)
Balance at End of Year
$ 1,306,284 
$ 1,206,022 
$ 1,063,262 
Earnings Per Common Share, Basic:
 
 
 
Income from Continuing Operations
$ 2.65 
$ 3.13 
$ 2.70 
Income from Discontinued Operations
$ 0.00 
$ 0.00 
$ 0.08 
Net Income Available for Common Stock
$ 2.65 
$ 3.13 
$ 2.78 
Diluted:
 
 
 
Income from Continuing Operations
$ 2.63 
$ 3.09 
$ 2.65 
Income from Discontinued Operations
$ 0.00 
$ 0.00 
$ 0.08 
Net Income Available for Common Stock
$ 2.63 
$ 3.09 
$ 2.73 
Weighted Average Common Shares Outstanding:
 
 
 
Used in Basic Calculation
83,127,844 
82,514,015 
81,380,434 
Used in Diluted Calculation
83,739,771 
83,670,802 
82,660,598 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
ASSETS
 
 
Property, Plant and Equipment
$ 6,615,813 
$ 5,646,918 
Less - Accumulated Depreciation, Depletion and Amortization
1,876,010 
1,646,394 
Property, Plant and Equipment, Net, Total
4,739,803 
4,000,524 
Current Assets
 
 
Cash and Temporary Cash Investments
74,494 
80,428 
Hedging Collateral Deposits
364 
19,701 
Receivables - Net of Allowance for Uncollectible Accounts of $30,317 and $31,039, Respectively
115,818 
131,885 
Unbilled Utility Revenue
19,652 
17,284 
Gas Stored Underground
49,795 
54,325 
Materials and Supplies - at average cost
28,577 
27,932 
Other Current Assets
56,121 
64,923 
Deferred Income Taxes
10,755 
15,423 
Total Current Assets
355,576 
411,901 
Other Assets
 
 
Recoverable Future Taxes
150,941 
144,377 
Unamortized Debt Expense
13,409 
10,571 
Other regulatory assets
546,851 
484,397 
Deferred Charges
7,591 
5,552 
Other Investments
86,774 
79,365 
Goodwill
5,476 
5,476 
Fair Value of Derivative Financial Instruments
27,616 
76,085 
Other
1,105 
2,836 
Total Other Assets
839,763 
808,659 
Total Assets
5,935,142 
5,221,084 
Capitalization:
 
 
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 83,330,140 Shares and 82,812,677 Shares, Respectively
83,330 
82,813 
Paid In Capital
669,501 
650,749 
Earnings Reinvested in the Business
1,306,284 
1,206,022 
Total Common Shareholders' Equity Before Items of Other Comprehensive Loss
2,059,115 
1,939,584 
Accumulated Other Comprehensive Loss
(99,020)
(47,699)
Total Comprehensive Shareholders' Equity
1,960,095 
1,891,885 
Long-Term Debt, Net of Current Portion
1,149,000 1
899,000 1
Total Capitalization
3,109,095 
2,790,885 
Current and Accrued Liabilities
 
 
Notes Payable to Banks and Commercial Paper
171,000 
40,000 
Current Portion of Long-Term Debt
250,000 1
150,000 1
Accounts Payable
87,985 
126,709 
Amounts Payable to Customers
19,964 
15,519 
Dividends Payable
30,416 
29,399 
Interest Payable on Long-Term Debt
29,491 
25,512 
Customer Advances
24,055 
19,643 
Customer Security Deposits
17,942 
17,321 
Other Accruals and Current Liabilities
79,099 
108,636 
Fair Value of Derivative Financial Instruments
24,527 
9,728 
Total Current and Accrued Liabilities
734,479 
542,467 
Deferred Credits
 
 
Deferred Income Taxes
1,065,757 
955,384 
Taxes Refundable to Customers
66,392 
65,543 
Unamortized Investment Tax Credit
2,005 
2,586 
Cost of Removal Regulatory Liability
139,611 
135,940 
Other Regulatory Liabilities
21,014 
17,177 
Pension and Other Post-Retirement Liabilities
516,197 
481,520 
Asset Retirement Obligations
119,246 
75,731 
Other Deferred Credits
161,346 
153,851 
Total Deferred Credits
2,091,568 
1,887,732 
Commitments and Contingencies
Total Capitalization and Liabilities
$ 5,935,142 
$ 5,221,084 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Consolidated Balance Sheets [Abstract]
 
 
Receivables, Allowance for Uncollectible Accounts
$ 30,317 
$ 31,039 
Common Stock, Par Value
$ 1 
$ 1 
Common Stock, Shares Authorized
200,000,000 
200,000,000 
Common Stock, Shares Issued
83,330,140 
82,812,677 
Common Stock, Shares Outstanding
83,330,140 
82,812,677 
Consolidated Statements Of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Operating Activities
 
 
 
Net Income Available for Common Stock
$ 220,077 
$ 258,402 
$ 225,913 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
 
 
 
Gain on Sale of Unconsolidated Subsidiaries
(50,879)
Gain on Sale of Discontinued Operations
(10,334)
Depreciation, Depletion and Amortization
271,530 
226,527 
191,809 
Deferred Income Taxes
144,150 
164,251 
134,679 
Excess Tax Costs (Benefits) Associated with Stock-Based Compensation Awards
(985)
1,224 
(13,207)
Elimination of Other Post-Retirement Regulatory Liability
(21,672)
Other
12,952 
15,651 
9,220 
Change in:
 
 
 
Hedging Collateral Deposits
19,337 
(8,567)
(10,286)
Receivables and Unbilled Utility Revenue
13,859 
3,887 
10,262 
Gas Stored Underground and Materials and Supplies
5,405 
(9,934)
6,546 
Other Current Assets
9,790 
83,245 
(37,407)
Accounts Payable
(14,996)
20,292 
(4,616)
Amounts Payable to Customers
4,445 
(22,590)
(67,669)
Customer Advances
4,412 
(7,995)
3,083 
Customer Security Deposits
621 
(999)
890 
Other Accruals and Current Liabilities
10,633 
242 
(682)
Other Assets
(10,733)
15,259 
7,970 
Other Liabilities
(8,038)
(27,470)
861 
Net Cash Provided by Operating Activities
660,787 
660,546 
447,032 
Investing Activities
 
 
 
Capital Expenditures
(1,036,784)
(820,872)
(443,101)
Net Proceeds from Sale of Unconsolidated Subsidiaries
59,365 
Net Proceeds from Sale of Timber Mill and Related Assets
15,770 
Net Proceeds from Sale of Landfill Gas Pipeline Assets
38,000 
Net Proceeds from Sale of Oil and Gas Producing Properties
63,501 
Other
446 
(2,908)
(251)
Net Cash Used in Investing Activities
(1,036,338)
(700,914)
(389,582)
Financing Activities
 
 
 
Change in Notes Payable to Banks and Commercial Paper
131,000 
40,000 
Excess Tax (Costs) Benefits Associated with Stock-Based Compensation Awards
985 
(1,224)
13,207 
Net proceeds from issuance of long-term debt
496,085 
Reduction of Long-Term Debt
(150,000)
(200,000)
Net Proceeds from Issuance (Repurchase) of Common Stock
10,345 
(592)
26,057 
Dividends Paid on Common Stock
(118,798)
(114,559)
(109,596)
Net Cash Provided By (Used in) Financing Activities
369,617 
(276,375)
(70,332)
Net Increase (Decrease) in Cash and Temporary Cash Investments
(5,934)
(316,743)
(12,882)
Cash and Temporary Cash Investments At Beginning of Year
80,428 
397,171 
410,053 
Cash and Temporary Cash Investments At End of Year
74,494 
80,428 
397,171 
Supplemental Disclosure of Cash Flow Information
 
 
 
Cash Paid for Interest
81,051 
81,966 
93,333 
Income Taxes Paid (Refunded)
$ 474 
$ (63,105)
$ 30,975 
Consolidated Statements Of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Consolidated Statements Of Comprehensive Income [Abstract]
 
 
 
Net Income Available for Common Stock
$ 220,077 
$ 258,402 
$ 225,913 
Other Comprehensive Income (Loss), Before Tax:
 
 
 
Decrease in the Funded Status of the Pension and Other Post-Retirement Benefit Plans
(27,552)
(24,172)
(30,155)
Reclassification Adjustment for Amortization of Prior Year Funded Status of the Pension and Other Post-Retirement Benefit Plans
10,270 
8,536 
5,000 
Foreign Currency Translation Adjustment
17 
53 
Reclassification Adjustment for Realized Foreign Currency Translation Loss in Net Income
34 
Unrealized Gain (Loss) on Securities Available for Sale Arising During the Period
3,545 
(1,199)
(2,195)
Unrealized Gain (Loss) on Derivative Financial Instruments Arising During the Period
(7,248)
30,238 
65,366 
Reclassification Adjustment for Realized Gains on Derivative Financial Instruments in Net Income
(65,691)
(15,485)
(41,320)
Other Comprehensive Loss, Before Tax
(86,676)
(2,031)
(3,251)
Income Tax Benefit Related to the Decrease in the Funded Status of the Pension and Other Post-Retirement Benefit Plans
(10,144)
(8,735)
(11,379)
Reclassification Adjustment for Income Tax Benefit Related to the Amortization of the Prior Year Funded Status of the Pension and Other Post-Retirement Benefit Plans
3,836 
3,221 
1,887 
Income Tax Expense (Benefit) Related to Unrealized Gain (Loss) on Securities Available for Sale Arising During the Period
1,311 
(453)
(831)
Income Tax Expense (Benefit) Related to Unrealized Gain (Loss) on Derivative Financial Instruments Arising During the Period
(8,244)
12,836 
26,628 
Reclassification Adjustment for Income Tax Expense on Realized Gains on Derivative Financial Instruments in Net Income
(22,114)
(6,186)
(16,967)
Income Taxes - Net
(35,355)
683 
(662)
Other Comprehensive Loss
(51,321)
(2,714)
(2,589)
Comprehensive Income
$ 168,756 
$ 255,688 
$ 223,324 
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies

 

Note A — Summary of Significant Accounting Policies

 

Principles of Consolidation

 

The Company consolidates all entities in which it has a controlling financial interest.  The equity method is used to account for entities in which the Company has a non-controlling financial interest. All significant intercompany balances and transactions are eliminated. The Company uses proportionate consolidation when accounting for drilling arrangements related to oil and gas producing properties accounted for under the full cost method of accounting.

 

During the quarter ended March 31, 2011, the Company sold its 50% equity method investments in Seneca Energy and Model City for $59.4 million, resulting in a gain of $50.9 million.  Seneca Energy and Model City generate and sell electricity using methane gas obtained from landfills owned by outside parties.

 

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.  This includes the reclassification of $63.7 million from Other Regulatory Liabilities to Other Regulatory Assets on the Consolidated Balance Sheet at September 30, 2011.  This reclassification pertains to pension and post-retirement benefit regulatory asset and regulatory liability balances.  The Company has switched from a “gross” presentation to a “net” presentation, which is consistent with the methodology used by the various regulators in analyzing such regulatory asset and liability balances.  This reclassification did not impact the Consolidated Statement of Income and there was an immaterial impact to the Consolidated Statement of Cash Flows

The Company also reclassified $26.6 million from Other Regulatory Assets to Other Current Assets and $13.8 million from Other Regulatory Liabilities to Other Accruals and Current Liabilities on the Consolidated Balance Sheet at September 30, 2011.  The reclassification was made to distinguish long-term regulatory assets and liabilities from current regulatory assets and liabilities.  Current regulatory assets are defined as assets recoverable from ratepayers over a twelve-month period.  Current regulatory liabilities are defined as liabilities payable to ratepayers over a twelve-month period.  These reclassifications did not impact the Consolidated Statement of Income and there was an immaterial impact to the Consolidated Statement of Cash Flows.

Revisions  were made on the Consolidated Statement of Cash Flows for the years ended September 30, 2011 and September 30, 2010 to reflect non-cash investing activities embedded in Accounts Payable on the Consolidated Balance Sheets at September 30, 2011, September 30, 2010 and September 30, 2009.  These revisions reduced the cash inflow related to Accounts Payable for the years ended September 30, 2011 and September 30, 2010 by $16.7 million and $12.7 million, respectively, and reduced capital expenditures by the same amounts.  The effect of these revisions was to reduce Net Cash Provided by Operating Activities for the years ended September 30, 2011 and September 30, 2010 and to reduce Net Cash Used in Investing Activities for the years ended September 30, 2011 and September 30, 2010

 

Regulation

 

The Company is subject to regulation by certain state and federal authorities. The Company has accounting policies which conform to GAAP, as applied to regulated enterprises, and are in accordance with the accounting requirements and ratemaking practices of the regulatory authorities. Reference is made to Note C — Regulatory Matters for further discussion.

 

Revenue Recognition

 

The Company’s Utility segment records revenue as bills are rendered, except that service supplied but not billed is reported as unbilled utility revenue and is included in operating revenues for the year in which service is furnished.

 

The Company’s Energy Marketing segment records revenue as bills are rendered for service supplied on a monthly basis.

 

The Company’s Pipeline and Storage segment records revenue for natural gas transportation and storage services. Revenue from reservation charges on firm contracted capacity is recognized through equal monthly charges over the contract period regardless of the amount of gas that is transported or stored. Commodity charges on firm contracted capacity and interruptible contracts are recognized as revenue when physical deliveries of natural gas are made at the agreed upon delivery point or when gas is injected or withdrawn from the storage field. The point of delivery into the pipeline or injection or withdrawal from storage is the point at which ownership and risk of loss transfers to the buyer of such transportation and storage services.

 

The Company’s Exploration and Production segment records revenue based on entitlement, which means that revenue is recorded based on the actual amount of gas or oil that is delivered to a pipeline and the Company’s ownership interest in the producing well. If a production imbalance occurs between what was supposed to be delivered to a pipeline and what was actually produced and delivered, the Company accrues the difference as an imbalance.

 

Allowance for Uncollectible Accounts

 

The allowance for uncollectible accounts is the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable. The allowance is determined based on historical experience, the age and other specific information about customer accounts. Account balances are charged off against the allowance twelve months after the account is final billed or when it is anticipated that the receivable will not be recovered.

 

Regulatory Mechanisms

 

The Company’s rate schedules in the Utility segment contain clauses that permit adjustment of revenues to reflect price changes from the cost of purchased gas included in base rates. Differences between amounts currently recoverable and actual adjustment clause revenues, as well as other price changes and pipeline and storage company refunds not yet includable in adjustment clause rates, are deferred and accounted for as either unrecovered purchased gas costs or amounts payable to customers. Such amounts are generally recovered from (or passed back to) customers during the following fiscal year.

 

Estimated refund liabilities to ratepayers represent management’s current estimate of such refunds. Reference is made to Note C — Regulatory Matters for further discussion.

 

The impact of weather on revenues in the Utility segment’s New York rate jurisdiction is tempered by a WNC, which covers the eight-month period from October through May. The WNC is designed to adjust the rates of retail customers to reflect the impact of deviations from normal weather. Weather that is warmer than normal results in a surcharge being added to customers’ current bills, while weather that is colder than normal results in a refund being credited to customers’ current bills. Since the Utility segment’s Pennsylvania rate jurisdiction does not have a WNC, weather variations have a direct impact on the Pennsylvania rate jurisdiction’s revenues.

 

The impact of weather normalized usage per customer account in the Utility segment’s New York rate jurisdiction is tempered by a revenue decoupling mechanism. The effect of the revenue decoupling mechanism is to render the Company financially indifferent to throughput decreases resulting from conservation. Weather normalized usage per account that exceeds the average weather normalized usage per customer account results in a refund being credited to customers’ bills. Weather normalized usage per account that is below the average weather normalized usage per account results in a surcharge being added to customers’ bills. The surcharge or credit is calculated over a twelve-month period ending December 31st, and applied to customer bills annually, beginning March 1st.

 

In the Pipeline and Storage segment, the allowed rates that Supply Corporation and Empire bill their customers are based on a straight fixed-variable rate design, which allows recovery of all fixed costs, including return on equity and income taxes, through fixed monthly reservation charges. Because of this rate design, changes in throughput due to weather variations do not have a significant impact on the revenues of Supply Corporation or Empire. 

 

Property, Plant and Equipment

 

The principal assets of the Utility and Pipeline and Storage segments, consisting primarily of gas plant in service, are recorded at the historical cost when originally devoted to service in the regulated businesses, as required by regulatory authorities.

 

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. 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.

 

In April 2011, the Company completed the sale of its off-shore oil and natural gas properties in the Gulf of Mexico.  The Company received net proceeds of $55.4 million from this sale.  The Company also eliminated the asset retirement obligation associated with its off-shore oil and gas properties.  This obligation amounted to $37.5 million and was accounted for as a reduction of capitalized costs under the full cost method of accounting for oil and natural gas properties as well as a reduction of the asset retirement obligation.  Asset retirement obligations are discussed further in Note B – Asset Retirement Obligations.

 

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. In adjusting estimated future net cash flows for hedging under the ceiling test at September 30, 2012, 2011, and 2010, estimated future net cash flows were increased by $128.4 million,  $35.4 million and $65.4 million, respectively.  At September 30, 2012, the ceiling exceeded the book value of the oil and gas properties by approximately $55.3 million.

 

Maintenance and repairs of property and replacements of minor items of property are charged directly to maintenance expense. The original cost of the regulated subsidiaries’ property, plant and equipment retired, and the cost of removal less salvage, are charged to accumulated depreciation.

 

Depreciation, Depletion and Amortization

 

For oil and gas properties, depreciation, depletion and amortization is computed based on quantities produced in relation to proved reserves using the units of production method. The cost of unproved oil and gas properties is excluded from this computation. In the All Other category, for timber properties, depletion, determined on a property by property basis, is charged to operations based on the actual amount of timber cut in relation to the total amount of recoverable timber. For all other property, plant and equipment, depreciation, depletion and amortization is computed using the straight-line method in amounts sufficient to recover costs over the estimated service lives of property in service. The following is a summary of depreciable plant by segment:

 

 

As of September 30

 

2012

2011

 

(Thousands)

Utility...................................................................................................................................................................................................

$
1,737,645 
$
1,695,702 

Pipeline and Storage.....................................................................................................................................................................

1,406,433 
1,260,301 

Exploration and Production........................................................................................................................................................

2,828,358 
2,042,225 

Energy Marketing...........................................................................................................................................................................

2,865 
2,095 

All Other and Corporate...............................................................................................................................................................

196,593 
127,291 

 

$
6,171,894 
$
5,127,614 

 

Average depreciation, depletion and amortization rates are as follows:

 

 

Year Ended September 30

 

2012

2011

2010

Utility............................................................................................................................................................................................

2.6% 
2.6% 
2.6% 

Pipeline and Storage..............................................................................................................................................................

2.9% 
3.1% 
3.0% 

Exploration and Production, per Mcfe(1)......................................................................................................................

$
2.25 
$
2.17 
$
2.14 

Energy Marketing....................................................................................................................................................................

3.6% 
2.5% 
2.9% 

All Other and Corporate........................................................................................................................................................

1.8% 
1.3% 
6.8% 

 

 

(1)

 Amounts include depletion of oil and gas producing properties as well as depreciation of fixed assets. As disclosed in Note N — Supplementary Information for Oil and Gas Producing Properties, depletion of oil and gas producing properties amounted to $2.19, $2.12 and $2.10 per Mcfe of production in 2012, 2011 and 2010, respectively.

 

Goodwill

 

The Company has recognized goodwill of $5.5 million as of September 30, 2012 and 2011 on its Consolidated Balance Sheets related to the Company’s acquisition of Empire in 2003. The Company accounts for goodwill in accordance with the current authoritative guidance, which requires the Company to test goodwill for impairment annually. At September 30, 2012, 2011 and 2010, the fair value of Empire was greater than its book value. As such, the goodwill was not considered impaired at those dates. Going back to the origination of the goodwill in 2003, the Company has never recorded an impairment of its goodwill balance.

 

Financial Instruments

 

Unrealized gains or losses from the Company’s investments in an equity mutual fund and the stock of an insurance company (securities available for sale) are recorded as a component of accumulated other comprehensive income (loss). Reference is made to Note G — Financial Instruments for further discussion.

 

The Company uses a variety of derivative financial instruments to manage a portion of the market risk associated with fluctuations in the price of natural gas and crude oil. These instruments include price swap agreements and futures contracts. The Company accounts for these instruments as either cash flow hedges or fair value hedges. In both cases, the fair value of the instrument is recognized on the Consolidated Balance Sheets as either an asset or a liability labeled Fair Value of Derivative Financial Instruments. Reference is made to Note F — Fair Value Measurements for further discussion concerning the fair value of derivative financial instruments.

 

For effective cash flow hedges, the offset to the asset or liability that is recorded is a gain or loss recorded in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. The gain or loss recorded in accumulated other comprehensive income (loss) remains there until the hedged transaction occurs, at which point the gains or losses are reclassified to operating revenues or purchased gas expense on the Consolidated Statements of Income. Any ineffectiveness associated with the cash flow hedges is recorded in the Consolidated Statements of Income.  The Company did not experience any material ineffectiveness with regard to its cash flow hedges during 2012, 2011 or 2010. 

 

For fair value hedges, the offset to the asset or liability that is recorded is a gain or loss recorded to operating revenues or purchased gas expense on the Consolidated Statements of Income. However, in the case of fair value hedges, the Company also records an asset or liability on the Consolidated Balance Sheets representing the change in fair value of the asset or firm commitment that is being hedged (see Other Current Assets section in this footnote). The offset to this asset or liability is a gain or loss recorded to operating revenues or purchased gas expense on the Consolidated Statements of Income as well. If the fair value hedge is effective, the gain or loss from the derivative financial instrument is offset by the gain or loss that arises from the change in fair value of the asset or firm commitment that is being hedged. The Company did not experience any material ineffectiveness with regard to its fair value hedges during 2012, 2011 or 2010.

 

Accumulated Other Comprehensive Income (Loss)

 

The components of Accumulated Other Comprehensive Income (Loss) are as follows:

 

 

Year Ended September 30

 

2012

2011

 

(Thousands)

Funded Status of the Pension and Other Post-Retirement Benefit Plans......................................................

$
(100,561)
$
(89,587)

Net Unrealized Gain (Loss) on Derivative Financial Instruments.......................................................................

(1,602)
40,979 

Net Unrealized Gain on Securities Available for Sale...............................................................................................

3,143 
909 

Accumulated Other Comprehensive Loss......................................................................................................................

$
(99,020)
$
(47,699)

 

At September 30, 2012, it is estimated that $10.6 million of unrealized gains on derivative financial instruments will be reclassified into the Consolidated Statement of Income during 2013 with  $12.2 million of unrealized losses on derivative financial instruments being reclassified into the Consolidated Statement of Income in subsequent years. These instruments, which are classified as cash flow hedges, extend out to 2017.

 

The amounts included in accumulated other comprehensive income (loss) related to the funded status of the Company’s pension and other post-retirement benefit plans consist of prior service costs and accumulated losses. The total amount for prior service credit  was $0.4 million and $0.5 million at September 30, 2012 and 2011, respectively. The total amount for accumulated losses was $100.9 million and  $90.0 million at September 30, 2012 and 2011, respectively.

 

Gas Stored Underground — Current

 

In the Utility segment, gas stored underground — current in the amount of $34.8 million is carried at lower of cost or market, on a LIFO method. Based upon the average price of spot market gas purchased in September 2012, including transportation costs, the current cost of replacing this inventory of gas stored underground — current exceeded the amount stated on a LIFO basis by approximately $46.0 million at September 30, 2012. All other gas stored underground — current, which is in the Energy Marketing segment, is carried at an average cost method, subject to lower of cost or market adjustments.

 

Unamortized Debt Expense

 

Costs associated with the issuance of debt by the Company are deferred and amortized over the lives of the related debt.

 

Costs associated with the reacquisition of debt related to rate-regulated subsidiaries are deferred and amortized over the remaining life of the issue or the life of the replacement debt in order to match regulatory treatment. At September 30, 2012, the remaining weighted average amortization period for such costs was approximately 4 years.

 

Income Taxes

 

The Company and its domestic subsidiaries file a consolidated federal income tax return. State tax returns are filed on a combined or separate basis depending on the applicable laws in the jurisdictions where tax returns are filed.  Investment tax credit, prior to its repeal in 1986, was deferred and is being amortized over the estimated useful lives of the related property, as required by regulatory authorities having jurisdiction.

 

Consolidated Statements of Cash Flows

 

For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of 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 September 30

   

2012

2011

2010

2009

 

(Thousands)

Non-cash Capital Expenditures.....................................................................................

$
52,557 
$
111,947 
$
78,632 
$
20,231 

 

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. At September 30, 2012, the Company had hedging collateral deposits of $0.4 million related to its exchange-traded futures contracts.  At September 30, 2011, the Company had hedging collateral deposits of $5.5 million related to its exchange-traded futures contracts and $14.2 million related to its over-the-counter crude oil swap agreements.  In accordance with its accounting policy, the Company does not offset hedging collateral deposits paid or received against related derivative financial instrument liability or asset balances.

 

Other Current Assets

 

The components of the Company’s Other Current Assets are as follows:

 

 

Year Ended September 30

 

2012

2011

 

(Thousands)

Prepayments................................................................................................................................................................................

$
8,316 
$
9,489 

Prepaid Property and Other Taxes.....................................................................................................................................

14,455 
13,240 

Federal Income Taxes Receivable.....................................................................................................................................

268 
385 

State Income Taxes Receivable.........................................................................................................................................

2,065 
6,124 

Fair Values of Firm Commitments.....................................................................................................................................

1,291 
9,096 

Regulatory Assets.....................................................................................................................................................................

29,726 
26,589 

 

$
56,121 
$
64,923 

 

Other Accruals and Current Liabilities

 

The components of the Company’s Other Accruals and Current Assets are as follows:

 

 

Year Ended September 30

 

2012

2011

 

(Thousands)

Accrued Capital Expenditures..............................................................................................................................................

$
36,460 
$
72,121 

Regulatory Liabilities................................................................................................................................................................

38,253 
29,368 

Other................................................................................................................................................................................................

4,386 
7,147 

 

$
79,099 
$
108,636 

 

Customer Advances

 

The Company’s Utility and Energy Marketing segments have balanced billing programs whereby customers pay their estimated annual usage in equal installments over a twelve-month period. Monthly payments under the balanced billing programs are typically higher than current month usage during the summer months. During the winter months, monthly payments under the balanced billing programs are typically lower than current month usage. At September 30, 2012 and 2011, customers in the balanced billing programs had advanced excess funds of $24.1 million and $19.6 million, respectively.

 

Customer Security Deposits

 

The Company, in its Utility, Pipeline and Storage, and Energy Marketing segments, often times requires security deposits from marketers, producers, pipeline companies, and commercial and industrial customers before providing services to such customers. At September 30, 2012 and 2011, the Company had received customer security deposits amounting to $17.9 million and  $17.3 million, respectively.

 

Earnings Per Common Share

 

Basic earnings per common share is computed by dividing 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.  For 2012, there were 844,872 securities excluded as being antidilutive. For 2011, there were no securities excluded as being antidilutive. For 2010, 314,910 securities were excluded as being antidilutive.

 

Stock-Based Compensation

 

The Company has various stock option and stock award plans which provide or provided for the issuance of one or more of the following to key employees: incentive stock options, nonqualified stock options, SARs, restricted stock, restricted stock units, performance units or performance shares. Stock options and SARs under all plans have exercise prices equal to the average market price of Company common stock on the date of grant, and generally no stock option or SAR is exercisable less than one year or more than ten years after the date of each grant. Restricted stock is subject to restrictions on vesting and transferability. Restricted stock awards entitle the participants to full dividend and voting rights. The market value of restricted stock on the date of the award is recorded as compensation expense over the vesting period.  Certificates for shares of restricted stock awarded under the Company’s stock option and stock award plans are held by the Company during the periods in which the restrictions on vesting are effective. Restrictions on restricted stock awards generally lapse ratably over a period of not more than ten years after the date of each grant.  Restricted stock units also are subject to restrictions on vesting and transferability.  Restricted stock units 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. These restricted stock units do not entitle the participants to dividend and voting rights. The accounting for these 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 (represented by the market value of Company common stock on the date of the award) must be reduced by the present value of forgone dividends over the vesting term of the award.  The fair value of restricted stock units on the date of award is recorded as compensation expense over the vesting period.

 

The Company follows authoritative guidance which requires the measurement and recognition of compensation cost at fair value for all share-based payments, including stock options and SARs. The Company has chosen the Black-Scholes-Merton closed form model to calculate the compensation expense associated with such share-based payments since it does not have complex stock-based compensation awards.

 

Stock-based compensation expense for the years ended September 30, 2012, 2011 and 2010 was approximately $7.2 million, $6.7 million, and $4.4 million, respectively. Stock-based compensation expense is included in operation and maintenance expense on the Consolidated Statements of Income. The total income tax benefit related to stock-based compensation expense during the years ended September 30, 2012, 2011 and 2010 was approximately $2.9 million, $2.7 million and $1.8 million, respectively. There were no capitalized stock-based compensation costs during the years ended September 30, 2012, 2011 and 2010.

 

The Company realized tax benefits related to stock-based compensation of $14.2 million, $19.0 million, and $12.8 million for the fiscal years ended September 30, 2012, 2011 and 2010, respectively.  The Company only recorded tax benefits of $0.6 million, $0.4 million, and $12.2 million related to the fiscal years ended September 30, 2012, 2011 and 2010, respectively, due to tax loss carryforwards.

 

For a summary of transactions during 2012 involving option shares, non-performance based SARs, performance based SARs, restricted share awards and restricted stock units for all plans, refer to Note E – Capitalization and Short-Term Borrowings.

 

Stock Options

 

The total intrinsic value of stock options exercised during the years ended September 30, 2012, 2011 and 2010 totaled approximately $13.5 million, $44.6 million, and $53.6 million, respectively. For 2012, 2011 and 2010, the amount of cash received by the Company from the exercise of such stock options was approximately $7.6 million, $9.5 million, and $34.5 million, respectively.

 

There were no stock options granted during the years ended September 30, 2012, 2011 and 2010.  For the years ended September 30, 2012 and 2011, no stock options became fully vested. For the year ended September 30, 2010, 100,000 stock options became fully vested. The total fair value of the stock options that became vested during the year ended September 30, 2010 was approximately $0.7 million.  There was no unrecognized compensation expense related to stock options at September 30, 2012. 

 

Non-Performance Based SARs

 

The Company granted 166,000 and 195,000 non-performance based SARs during the years ended September 30, 2012 and 2011, respectively. The Company did not grant any non-performance based SARs during the year ended September 30, 2010. The SARs granted in 2012 will be settled in shares of common stock of the Company.  The SARs granted in 2011 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.  Non-performance based SARs are considered equity awards under the current authoritative guidance for stock-based compensation.  The accounting for non-performance based SARs is the same as the accounting for stock options.  The non-performance based SARs granted during the year ended September 30, 2012 vest annually in one-third increments and become exercisable on the third anniversary of the date of grant.  The non-performance based SARs granted during the year ended September 30, 2011 vest and become exercisable annually in one-third increments.  The weighted average grant date fair value of these non-performance based SARs granted during the years ended September 30, 2012 and 2011 were estimated on the date of grant using the same accounting treatment that is applied for stock options. 

 

Participants in the stock option and award plans did not exercise any non-performance based SARs during the years ended September 30, 2012, 2011 and 2010.  The weighted average grant date fair value of non-performance based SARs granted in 2012 and 2011 are $11.20 and $15.01, respectively.  For the year ended September 30, 2012, 59,990 non-performance based SARs became fully vested.  For the year ended September 30, 2011, no non-performance based SARs became fully vested. For the year ended September 30, 2010, 50,000 non-performance based SARs became fully vested.  The total fair value of the non-performance based SARs that became vested during the year ended September 30, 2012 was approximately $0.9 million.  The total fair value of the non-performance based SARs that became vested during the year ended September 30, 2010 was approximately $0.4 million. As of September 30, 2012, unrecognized compensation expense related to non-performance based SARs totaled approximately $1.1 million, which will be recognized over a weighted average period of 10.2 months. 

 

The fair value of non-performance based SARs at the date of grant was estimated using the Black-Scholes-Merton closed form model. The following weighted average assumptions were used in estimating the fair value of non-performance based SARs at the date of grant:

 

 

Year Ended September 30

 

2012

2011

Risk Free Interest Rate........................................................................................................................................................

1.59% 
2.94% 

Expected Life (Years)............................................................................................................................................................

8.25 
8.00 

Expected Volatility..................................................................................................................................................................

24.97% 
23.38% 

Expected Dividend Yield (Quarterly)..............................................................................................................................

0.64% 
0.55% 

 

The risk-free interest rate is based on the yield of a Treasury Note with a remaining term commensurate with the expected term of the non-performance based SARs. The expected life and expected volatility are based on historical experience.

 

For grants during the years ended September 30, 2012 and 2011, it was assumed that there would be no forfeitures, based on the vesting term and the number of grantees.

 

Performance Based SARs

 

The Company did not grant any performance based SARs during the years ended September 30, 2012 and 2011. The Company granted 520,500 performance based SARs during the year ended September 30, 2010. The accounting treatment for performance based SARs is the same as the accounting for stock options under the current authoritative guidance for stock-based compensation. The performance based SARs granted for the year ended September 30, 2010 vest and become exercisable annually in one-third increments, provided that a performance condition is met. The performance condition for each fiscal year, generally stated, is an increase over the prior fiscal year of at least five percent in certain oil and natural gas production of the Exploration and Production segment. The weighted average grant date fair value of the performance based SARs granted during 2010 was estimated on the date of grant using the same accounting treatment that is applied for stock options, and assumes that the performance conditions specified will be achieved. If such conditions are not met or it is not considered probable that such conditions will be met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

 

The weighted average grant date fair value of performance based SARs granted in 2010 is $12.06 per share.  The total intrinsic value of performance based SARs exercised during the years ended September 30, 2012 and 2011 totaled less than $0.1 million and approximately  $0.3 million, respectively. Participants in the stock option and award plans did not exercise any performance based SARs during the year ended September 30, 2010.  For the years ended September 30, 2012, 2011 and 2010, 375,179,  376,819 and 203,324 performance based SARs became fully vested. The total fair value of the performance based SARs that became vested during each of the years ended September 30, 2012, 2011 and 2010 was approximately $2.9 million, $2.9 million and $0.8 million, respectively. As of September 30, 2012, unrecognized compensation expense related to performance based SARs totaled approximately $0.1 million, which will be recognized over a weighted average period of 3.0 months. 

 

The fair value of performance based SARs at the date of grant was estimated using the Black-Scholes-Merton closed form model. The following weighted average assumptions were used in estimating the fair value of performance based SARs at the date of grant:

 

 

Year Ended September 30

 

2010

Risk Free Interest Rate........................................................................................................................................................

3.55% 

Expected Life (Years)............................................................................................................................................................

7.75 

Expected Volatility..................................................................................................................................................................

23.25% 

Expected Dividend Yield (Quarterly)..............................................................................................................................

0.64% 

 

The risk-free interest rate is based on the yield of a Treasury Note with a remaining term commensurate with the expected term of the performance based SARs. The expected life and expected volatility are based on historical experience.

 

For grants during the year ended September 30, 2010, it was assumed that there would be no forfeitures, based on the vesting term and the number of grantees.

 

Restricted Share Awards

 

The Company granted 41,525,  47,250, and 4,000 restricted share awards (non-vested stock as defined by the current accounting literature) during the years ended September 30, 2012, 2011 and 2010, respectively.  The weighted average fair value of restricted share awards granted in 2012, 2011 and 2010 is $55.09 per share, $63.98 per share and $52.10 per share, respectively. As of September 30, 2012, unrecognized compensation expense related to restricted share awards totaled approximately $4.0 million, which will be recognized over a weighted average period of 2.4 years.

 

Restricted Stock Units

 

The Company granted 68,450 and 41,800 restricted stock units during the years ended September 30, 2012 and 2011, respectively.  The weighted average fair value of restricted share units granted in 2012 and 2011 are $47.10 per share and $59.35 per share, respectively.  As of September 30, 2012, unrecognized compensation expense related to restricted share awards totaled approximately $3.9 million, which will be recognized over a weighted average period of 2.0 years. 

 

New Authoritative Accounting and Financial Reporting Guidance

 

In June 2011, the FASB issued authoritative guidance regarding the presentation of comprehensive income.  The new guidance allows companies only two choices for presenting net income and other comprehensive income: in a single continuous statement, or in two separate, but consecutive, statements.  The guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity.  This authoritative guidance will be effective as of the Company’s first quarter of fiscal 2013 and is not expected to have a significant impact on the Company’s financial statements. 

 

In September 2011, the FASB issued revised authoritative guidance that simplifies the testing of goodwill for impairment.  The revised guidance allows companies the option to perform a “qualitative” assessment to determine whether further impairment testing is necessary.  The revised authoritative guidance is required to be effective for the Company’s annual impairment test performed in fiscal 2013.    The Company has adopted the new provisions for fiscal 2012, as early adoption was permitted.

 

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.

Asset Retirement Obligations
Asset Retirement Obligations

Note B — Asset Retirement Obligations

 

The Company accounts for asset retirement obligations in accordance with the authoritative guidance that requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. An asset retirement obligation is defined as a legal obligation associated with the retirement of a tangible long-lived asset in which the timing and/or method of settlement may or may not be conditional on a future event that may or may not be within the control of the Company. When the liability is initially recorded, the entity capitalizes the estimated cost of retiring the asset as part of the carrying amount of the related long-lived asset. Over time, the liability is adjusted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. The Company estimates the fair value of its asset retirement obligations based on the discounting of expected cash flows using various estimates, assumptions and judgments regarding certain factors such as the existence of a legal obligation for an asset retirement obligation; estimated amounts and timing of settlements; the credit-adjusted risk-free rate to be used; and inflation rates. Asset retirement obligations incurred in the current period were Level 3 fair value measurements as the inputs used to measure the fair value are unobservable.

 

The Company has recorded an asset retirement obligation representing plugging and abandonment costs associated with the Exploration and Production segment’s crude oil and natural gas wells and has capitalized such costs in property, plant and equipment (i.e. the full cost pool). Under the current authoritative guidance for asset retirement obligations, since plugging and abandonment costs are already included in the full cost pool, the units-of-production depletion calculation excludes from the depletion base any estimate of future plugging and abandonment costs that are already recorded in the full cost pool.

 

The full cost method of accounting provides a limit to the amount of costs that can be capitalized in the full cost pool. This limit is referred to as the full cost ceiling. In accordance with current authoritative guidance, the future cash outflows associated with plugging and abandoning wells are excluded from the computation of the present value of estimated future net revenues for purposes of the full cost ceiling calculation.

 

In addition to the asset retirement obligation recorded in the Exploration and Production segment, the Company has recorded future asset retirement obligations associated with the plugging and abandonment of natural gas storage wells in the Pipeline and Storage segment and the removal of asbestos and asbestos-containing material in various facilities in the Utility and Pipeline and Storage segments. The Company has also recorded asset retirement obligations for certain costs connected with the retirement of the distribution mains and services components of the pipeline system in the Utility segment and with the transmission mains and other components in the pipeline system in the Pipeline and Storage segment. These retirement costs within the distribution and transmission systems are primarily for the capping and purging of pipe, which are generally abandoned in place when retired, as well as for the clean-up of PCB contamination associated with the removal of certain pipe.

 

A reconciliation of the Company’s asset retirement obligations are shown below:

 

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands)

Balance at Beginning of Year................................................................................................................................

$
75,731 
$
101,618 
$
91,373 

Liabilities Incurred and Revisions of Estimates...........................................................................................

41,653 
10,346 
16,140 

Liabilities Settled..........................................................................................................................................................

(2,997)
(41,704)
(12,622)

Accretion Expense......................................................................................................................................................

4,859 
5,471 
6,727 

Balance at End of Year............................................................................................................................................

$
119,246 
$
75,731 
$
101,618 

 

Regulatory Matters
Regulatory Matters

Note C — Regulatory Matters

 

Regulatory Assets and Liabilities

 

The Company has recorded the following regulatory assets and liabilities:

 

 

At September 30

 

2012

2011

 

(Thousands)

Regulatory Assets(1):

Pension Costs(2) (Note H)................................................................................................................................................................

$
344,228 
$
319,906 

Post-Retirement Benefit Costs(2) (Note H)..............................................................................................................................

154,415 
124,423 

Recoverable Future Taxes (Note D) ...........................................................................................................................................

150,941 
144,377 

Environmental Site Remediation Costs(2) (Note I)...............................................................................................................

17,843 
20,095 

NYPSC Assessment(3)......................................................................................................................................................................

17,420 
15,063 

Asset Retirement Obligations(2) (Note B)..................................................................................................................................

26,942 
13,860 

Unamortized Debt Expense (Note A)...........................................................................................................................................

3,997 
5,090 

Other(4)......................................................................................................................................................................................................

15,729 
17,639 

Total Regulatory Assets.....................................................................................................................................................................

731,515 v

660,453 

Less: Amounts Included in Other Current Assets..................................................................................................................

(29,726)
(26,589)

Total Long-Term Regulatory Assets.............................................................................................................................................. 

$
701,789 
$
633,864 

 

 

At September 30

 

2012

2011

 

(Thousands)

Regulatory Liabilities:

Cost of Removal Regulatory Liability.........................................................................................................................................

$
139,611 
$
135,940 

Taxes Refundable to Customers (Note D)................................................................................................................................

66,392 
65,543 

Amounts Payable to Customers (See Regulatory Mechanisms in Note A)...............................................................

19,964 
15,519 

Off-System Sales and Capacity Release Credits(5)...........................................................................................................

16,262 
7,675 

Other(6)......................................................................................................................................................................................................

23,041 
23,351 

Total Regulatory Liabilities.................................................................................................................................................................

265,270 
248,028 

Less: Amounts included in Current and Accrued Liabilities...............................................................................................

(38,253)
(29,368)

Total Long-Term Regulatory Liabilities..........................................................................................................................................

$
227,017 
$
218,660 

 

 

 

 

(1)

The Company recovers the cost of its regulatory assets but generally does not earn a return on them. There are a few exceptions to this rule. For example, the Company does earn a return on Unrecovered Purchased Gas Costs and, in the New York jurisdiction of its Utility segment, earns a return, within certain parameters, on the excess of cumulative funding to the pension plan over the cumulative amount collected in rates.

 

 

(2)

Included in Other Regulatory Assets on the Consolidated Balance Sheets.

(3)

Amounts are included in Other Current Assets on the Consolidated Balance Sheets at September 30, 2012 and September 30, 2011 since such amounts are expected to be recovered from ratepayers in the next 12 months.

(4)

$12,306 and $11,526 are included in Other Current Assets on the Consolidated Balance Sheets at September 30, 2012 and 2011, respectively, since such amounts are expected to be recovered from ratepayers in the next 12 months.  $3,423 and  $6,113 are included in Other Regulatory Assets on the Consolidated Balance Sheets at September 30, 2012 and 2011, respectively.

(5)

Amounts are included in Other Accruals and Current Liabilities on the Consolidated Balance Sheets at September 30, 2012 and September 30, 2011 since such amounts are expected to be passed back to ratepayers in the next 12 months. 

 

 

(6)

$2,027 and $6,174 are included in Other Accruals and Current Liabilities on the Consolidated Balance Sheets at September 30, 2012 and 2011, respectively, since such amounts are expected to be recovered from ratepayers in the next 12 months.  $21,014 and $17,177 are included in Other Regulatory Liabilities on the Consolidated Balance Sheets at September 30, 2012 and 2011, respectively.

 

If for any reason the Company ceases to meet the criteria for application of regulatory accounting treatment for all or part of its operations, the regulatory assets and liabilities related to those portions ceasing to meet such criteria would be eliminated from the Consolidated Balance Sheets and included in income of the period in which the discontinuance of regulatory accounting treatment occurs.

 

Cost of Removal Regulatory Liability

 

In the Company’s Utility and Pipeline and Storage segments, costs of removing assets (i.e. asset retirement costs) are collected from customers through depreciation expense. These amounts are not a legal retirement obligation as discussed in Note B — Asset Retirement Obligations. Rather, they are classified as a regulatory liability in recognition of the fact that the Company has collected dollars from the customer that will be used in the future to fund asset retirement costs.

 

NYPSC Assessment

 

On April 7, 2009, the Governor of the State of New York signed into law an amendment to the Public Service Law increasing the allowed utility assessment from the then current rate of one-third of one percent to one percent of a utility’s in-state gross operating revenue, together with a temporary surcharge (expiring March 31, 2014) equal, as applied, to an additional one percent of the utility’s in-state gross operating revenue. The NYPSC, in a generic proceeding initiated for the purpose of implementing the amended law, has authorized the recovery, through rates, of the full cost of the increased assessment. The assessment is currently being applied to customer bills in the Utility segment’s New York jurisdiction.

 

Off-System Sales and Capacity Release Credits

 

The Company, in its Utility segment, has entered into off-system sales and capacity release transactions. Most of the margins on such transactions are returned to the customer with only a small percentage being retained by the Company. The amount owed to the customer has been deferred as a regulatory liability.

 

Supply Corporation Rate Proceeding

 

On August 6, 2012, the FERC issued an order approving a “black box” Stipulation and Agreement that resolved the issues arising from the general rate filing that Supply Corporation filed on October 31, 2011.  The Stipulation and Agreement provides for, among other things, (i) an increase in Supply Corporation’s base tariff rates effective May 1, 2012, (ii) implementation of a tracking mechanism to adjust fuel retention rates annually to reflect actual experience, replacing the previously fixed fuel retention rates, and (iii) the elimination of a past net regulatory liability associated with post-retirement benefits.  Supply Corporation is not required to amortize the liability or otherwise pass it back to customers under the Stipulation and Agreement.  Accordingly, the elimination of the past net regulatory liability, totaling $21.7 million, has been  recorded as an increase to operating revenues for the quarter ended September 30, 2012.       

 

Income Taxes
Income Taxes

Note D — Income Taxes

 

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

 

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands)

Current Income Taxes —

Federal............................................................................................................................................................................

$
(8)
$
(1,390)
$
2,074 

State................................................................................................................................................................................

6,412 
1,520 
4,991 

Deferred Income Taxes —

Federal............................................................................................................................................................................

111,176 
130,434 
110,515 

State................................................................................................................................................................................

32,974 
33,817 
24,164 

 

150,554 
164,381 
141,744 

Deferred Investment Tax Credit.........................................................................................................................

(581)
(697)
(697)

Total Income Taxes...................................................................................................................................................

$
149,973 
$
163,684 
$
141,047 

Presented as Follows:

Other Income...............................................................................................................................................................

$
(581)
$
(697)
$
(697)

Income Tax Expense — Continuing Operations..........................................................................................

150,554 
164,381 
137,227 

Discontinued Operations —

Income from Operations........................................................................................................................................

493 

Gain on Disposal........................................................................................................................................................

4,024 

Total Income Taxes...................................................................................................................................................

$
149,973 
$
163,684 
$
141,047 

 

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:

 

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands)

U.S. Income Before Income Taxes.................................................................................................................

$
370,050 
$
422,086 
$
366,960 

Income Tax Expense, Computed at U.S. Federal Statutory Rate of 35%...................................

$
129,518 
$
147,730 
$
128,436 

Increase (Reduction) in Taxes Resulting from:

State Income Taxes................................................................................................................................................

25,601 
22,969 
18,951 

Miscellaneous.............................................................................................................................................................

(5,146)
(7,015)
(6,340)

Total Income Taxes..................................................................................................................................................

$
149,973 
$
163,684 
$
141,047 

 

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

 

 

At September 30

 

2012

2011

 

(Thousands)

Deferred Tax Liabilities:

Property, Plant and Equipment...............................................................................................................................................

$
1,333,574 
$
1,062,255 

Pension and Other Post-Retirement Benefit Costs......................................................................................................

236,431 
217,302 

Other...................................................................................................................................................................................................

43,294 
70,389 

Total Deferred Tax Liabilities....................................................................................................................................................

1,613,299 
1,349,946 

Deferred Tax Assets:

Pension and Other Post-Retirement Benefit Costs......................................................................................................

(276,501)
(263,606)

Tax Loss Carryforwards............................................................................................................................................................

(198,744)
(71,516)

Other...................................................................................................................................................................................................

(83,052)
(74,863)

Total Deferred Tax Assets........................................................................................................................................................

(558,297)
(409,985)

Total Net Deferred Income Taxes.........................................................................................................................................

$
1,055,002 
$
939,961 

Presented as Follows:

Deferred Tax Liability/(Asset) — Current..........................................................................................................................

$
(10,755)
$
(15,423)

Deferred Tax Liability — Non-Current.................................................................................................................................

1,065,757 
955,384 

Total Net Deferred Income Taxes.........................................................................................................................................

$
1,055,002 
$
939,961 

 

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. Cumulative tax benefits of $32.7 million and $19.1 million for the periods ending September 30, 2012 and September 30, 2011, respectively, relating to the excess stock-based compensation deductions 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 $66.4 million and  $65.5 million at September 30, 2012 and 2011, 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 $150.9 million and $144.4 million at September 30, 2012 and 2011, respectively.  Included in the above are regulatory liabilities and assets relating to the tax accounting method change noted below.  The amounts are as follows: regulatory liabilities of $47.3 million as of September 30, 2012 and 2011, and regulatory assets of $65.9 million and  $60.5 million as of September 30, 2012 and 2011, respectively.

 

The following is a reconciliation of the change in unrecognized tax benefits:

 

 

Year Ended September 30             

 

2012

2011

2010

 

(Thousands)

Balance at Beginning of Year.........................................................................................................................................

$
7,766 
$
8,490 
$
8,721 

Additions for Tax Positions Related to Current Year...........................................................................................

1,600 
80 
699 

Additions for Tax Positions of Prior Years................................................................................................................

2,751 
107 
45 

Reductions for Tax Positions of Prior Years...........................................................................................................

(947)
(911)
(975)

Balance at End of Year.....................................................................................................................................................

$
11,170 
$
7,766 
$
8,490 

 

The Company anticipates that during the next 12 months there will be additional Internal Revenue Service (IRS) guidance relative to its tax method of accounting for certain capitalized costs relating to its utility property and the IRS Appeals process will be resolved (see discussion below).  This would result in an elimination of approximately $7.3 million of unrecognized tax benefits, which would not have a material impact on the effective tax rate. As of September 30, 2012, approximately $4.9 million of unrecognized tax benefits would favorably impact the effective tax rate, if recognized.

 

The Company recognizes interest relating to income taxes in Other Interest Expense and penalties relating to income taxes in Other Income. The Company recognized interest expense relating to income taxes of $0.3 million, $0.3 million and $0.3 million for fiscal 2012, 2011 and 2010, respectively. The Company has not accrued any penalties during fiscal 2012, 2011 and 2010.

 

The IRS is currently conducting examinations of the Company for fiscal 2011 and fiscal 2012 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.  Local IRS examiners proposed to disallow most of the tax accounting method change recorded by the Company in fiscal 2009 and fiscal 2010. The Company has filed protests for fiscal 2009 and fiscal 2010 with the IRS Appeals Office disputing the local IRS findings. 

 

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.

 

As of September 30, 2012, the Company has a federal net operating loss (NOL) carryover of $565 million, which expires in varying amounts between 2023 and 2032.  Approximately $23 million of this NOL is subject to certain annual limitations, and $84 million is attributable to excess tax deductions related to stock-based compensation as discussed above.  In addition, the Company has state NOL carryovers in Pennsylvania, California and New York of $278 million, $155 million and $138 million, respectively, which begin to expire in varying amounts between 2029 and 2032.  No valuation allowance was recorded on the federal or state NOL carryovers because of management’s determination that the amounts will be fully utilized during the carryforward period.

Capitalization And Short-Term Borrowings
Capitalization And Short-Term Borrowings

Note E — Capitalization and Short-Term Borrowings

 

Summary of Changes in Common Stock Equity

 

 

 

 

Earnings

Accumulated

 

 

 

Reinvested

Other

 

Common Stock

Paid

in

Comprehensive

 

 

In

the

Income

 

Shares

Amount

Capital

Business

(Loss)

 

(Thousands, except per share amounts)

Balance at September 30, 2009............................................................

80,500 
$
80,500 
$
602,839 
$
948,293 
$
(42,396)

Net Income Available for Common Stock.......................................

225,913 

Dividends Declared on Common Stock ($1.36 Per Share)......

(110,944)

Other Comprehensive Loss, Net of Tax...........................................

(2,589)

Share-Based Payment Expense(2)......................................................

4,435 

Common Stock Issued Under Stock and Benefit Plans(1)......

1,575 
1,575 
38,345 

Balance at September 30, 2010............................................................

82,075 
82,075 
645,619 
1,063,262 
(44,985)

Net Income Available for Common Stock.......................................

258,402 

Dividends Declared on Common Stock ($1.40 Per Share)......

(115,642)

Other Comprehensive Loss, Net of Tax...........................................

(2,714)

Share-Based Payment Expense(2)......................................................

6,656 

Common Stock Issued (Repurchased) Under Stock and Benefit Plans(1)

738 
738 
(1,526)

Balance at September 30, 2011.............................................................

82,813 
82,813 
650,749 
1,206,022 
(47,699)

Net Income Available for Common Stock.......................................

220,077 

Dividends Declared on Common Stock ($1.44 Per Share)......

(119,815)

Other Comprehensive Loss, Net of Tax...........................................

(51,321)

Share-Based Payment Expense(2)......................................................

7,156 

Common Stock Issued Under Stock and Benefit Plans(1)......

517 
517 
11,596 

Balance at September 30, 2012............................................................

83,330 
$
83,330 
$
669,501 

$1,306,284(3)

$
(99,020)

 

 

 

 

 

 

 

 

(1)

Paid in Capital includes tax benefits of $1.0 million for September 30, 2012, tax costs of $1.2 million for September 30, 2011 and tax benefits of $13.2 million for September 30, 2010 associated with the exercise of stock options and/or performance based SARs.

 

 

(2)

Paid in Capital includes compensation costs associated with stock option, SARs and/or restricted stock awards. The expense is included within Net Income Available For Common Stock, net of tax benefits.

 

 

(3)

The availability of consolidated earnings reinvested in the business for dividends payable in cash is limited under terms of the indentures covering long-term debt. At September 30, 2012, $1.2 billion of accumulated earnings was free of such limitations.

 

Common Stock

 

The Company has various plans which allow shareholders, employees and others to purchase shares of the Company common stock. The National Fuel Gas Company Direct Stock Purchase and Dividend Reinvestment Plan allows shareholders to reinvest cash dividends and make cash investments in the Company’s common stock and provides investors the opportunity to acquire shares of the Company common stock without the payment of any brokerage commissions in connection with such acquisitions. The 401(k) Plans allow employees the opportunity to invest in the Company common stock, in addition to a variety of other investment alternatives. Generally, at the discretion of the Company, shares purchased under these plans are either original issue shares purchased directly from the Company or shares purchased on the open market by an independent agent. During 2012, the Company issued 155,310 original issue shares of common stock for the Direct Stock Purchase and Dividend Reinvestment Plan.

 

During 2012, the Company issued 465,894 original issue shares of common stock as a result of stock option and SARs exercises and 41,525 original issue shares for restricted stock awards (non-vested stock as defined by the current accounting literature for stock-based compensation). 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 2012, 161,021 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.

 

The Company also has a director stock program under which it issues shares of Company 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 fiscal year. Under this program, the Company issued 15,755 original issue shares of common stock during 2012.

 

Shareholder Rights Plan

 

In 1996, the Company’s Board of Directors adopted a shareholder rights plan (Plan). The Plan has been amended several times since it was adopted and is now embodied in an Amended and Restated Rights Agreement effective December 4, 2008, a copy of which was included as an exhibit to the Form 8-K filed by the Company on December 4, 2008.

 

Pursuant to the Plan, the holders of the Company’s common stock have one right (Right) for each of their shares. Each Right is initially evidenced by the Company’s common stock certificates representing the outstanding shares of common stock.

 

The Rights have anti-takeover effects because they will cause substantial dilution of the Company’s common stock if a person (an Acquiring Person) attempts to acquire the Company on terms not approved by the Board of Directors.

 

The Rights become exercisable upon the occurrence of a Distribution Date as described below, but after a Distribution Date Rights that are owned by an Acquiring Person will be null and void. At any time following a Distribution Date, each holder of a Right may exercise its right to receive, upon payment of an amount calculated under the Rights Agreement, common stock of the Company (or, under certain circumstances, other securities or assets of the Company) having a value equal to two times the amount paid to exercise the Right. However, the Rights are subject to redemption or exchange by the Company prior to their exercise as described below.

 

A Distribution Date would occur upon the earlier of (i) ten days after the public announcement that a person or group has acquired, or obtained the right to acquire, beneficial ownership of the Company’s common stock or other voting stock (including Synthetic Long Positions as defined in the Plan) having 10% or more of the total voting power of the Company’s common stock and other voting stock and (ii) ten days after the commencement or announcement by a person or group of an intention to make a tender or exchange offer that would result in that person acquiring, or obtaining the right to acquire, beneficial ownership of the Company’s common stock or other voting stock having 10% or more of the total voting power of the Company’s common stock and other voting stock.

 

In certain situations after a person or group has acquired beneficial ownership of 10% or more of the total voting power of the Company’s stock as described above, each holder of a Right will have the right to exercise its Rights to receive, upon exercise of the right, common stock of the acquiring company having a value equal to two times the amount paid to exercise the right. These situations would arise if the Company is acquired in a merger or other business combination or if 50% or more of the Company’s assets or earning power are sold or transferred.

 

At any time prior to the end of the business day on the tenth day following the Distribution Date, the Company may redeem the Rights in whole, but not in part, at a price of $0.005 per Right, payable in cash or stock. A decision to redeem the Rights requires the vote of 75% of the Company’s full Board of Directors. Also, at any time following the Distribution Date, 75% of the Company’s full Board of Directors may vote to exchange the Rights, in whole or in part, at an exchange rate of one share of common stock, or other property deemed to have the same value, per Right, subject to certain adjustments.

 

Upon exercise of the Rights, the Company may need additional regulatory approvals to satisfy the requirements of the Rights Agreement. The Rights will expire on July 31, 2018, unless earlier than that date, they are exchanged or redeemed or the Plan is amended to extend the expiration date.

 

Stock Option and Stock Award Plans

 

Transactions involving option shares for all plans are summarized as follows:

 

 

 

 

 

 

 

 

Number of

Shares Subject

to Option

 

 

 

Weighted Average

Exercise Price

Weighted

Average

Remaining

Contractual

Life (Years)

 

 

Aggregate

Intrinsic

Value

 

(In thousands)

Outstanding at September 30, 2011.........................................................................

1,758,961 
$
31.38 

Granted in 2012.................................................................................................................

$

Exercised in 2012.............................................................................................................

(476,243)
$
25.28 

Forfeited in 2012...............................................................................................................

$       —

Outstanding at September 30, 2012........................................................................

1,282,718 
$
33.64 
2.65 
$
26,166 

Option shares exercisable at September 30, 2012...........................................

1,282,718 
$
33.64 
2.65 
$
26,166 

Option shares available for future grant at September 30, 2012(1).........

2,097,214 

 

 

(1)

Includes shares available for SARs and restricted stock grants.    

 

Transactions involving non-performance based SARs for all plans are summarized as follows:

 

 

 

 

 

 

 

 

Number of

Shares Subject

To Option

 

 

 

Weighted Average

Exercise Price

Weighted

Average

Remaining

Contractual

Life (Years)

 

 

Aggregate

Intrinsic

Value

 

(In thousands)

Outstanding at September 30, 2011.........................................................................

245,000 
$
58.79 

Granted in 2012.................................................................................................................

166,000 
$
55.09 

Exercised in 2012.............................................................................................................

$

Forfeited in 2012...............................................................................................................

$

Outstanding at September 30, 2012........................................................................

411,000 
$
57.30 
8.20 
$
(1,339)

SARs exercisable at September 30, 2012............................................................

109,990 
$
53.56 
6.51 
$
53 

 

Transactions involving performance based SARs for all plans are summarized as follows:

 

 

 

 

 

 

 

Number of

Shares Subject

To Option

 

 

 

Weighted Average

Exercise Price

Weighted

Average

Remaining

Contractual

Life (Years)

 

 

Aggregate

Intrinsic

Value

 

(In thousands)

Outstanding at September 30, 2011.........................................................................

1,225,153 
$
40.85 

Granted in 2012.................................................................................................................

$

Exercised in 2012.............................................................................................................

(2,000)
$
29.88 

Forfeited in 2012...............................................................................................................

$       —

Canceled in 2012(1).........................................................................................................

(6,000)
$
58.99 

Outstanding at September 30, 2012........................................................................

1,217,153 
$
40.78 
6.68 
$
16,140 

SARs exercisable at September 30, 2012............................................................

1,039,309 
$
38.80 
6.56 
$
15,837 

 

 

(1)

Shares were canceled during 2012 due to performance condition not being met.

 

Restricted Share Awards

 

Transactions involving restricted shares for all plans are summarized as follows:

 

 

 

 

Number of

Restricted

Share Awards

Weighted Average

Fair Value per

Award

Restricted Share Awards Outstanding at September 30, 2011.........................................................................

139,250 
$
53.37 

Granted in 2012.......................................................................................................................................................................

41,525 
$
55.09 

Vested in 2012.........................................................................................................................................................................

(18,740)
$
59.74 

Forfeited in 2012....................................................................................................................................................................

$

Restricted Share Awards Outstanding at September 30, 2012.........................................................................

162,035 
$
53.07 

 

Vesting restrictions for the outstanding shares of non-vested restricted stock at September 30, 2012 will lapse as follows: 2013 — 34,582 shares; 2014 — 34,601 shares; 2015 — 32,852 shares; 2016 — 5,000 shares; 2018 — 35,000 shares; and 2021 —20,000 shares.

 

Restricted Stock Units

 

Transactions involving restricted stock units for all plans are summarized as follows:

 

 

 

 

Number of

Restricted

Share Awards

Weighted Average

Fair Value per

Award

Restricted Stock Units Outstanding at September 30, 2011.............................................................................

39,400 
$
59.20 

Granted in 2012.......................................................................................................................................................................

68,450 
$
47.10 

Vested in 2012.........................................................................................................................................................................

$        —

Forfeited in 2012....................................................................................................................................................................

(1,950)
$
46.96 

Restricted Stock Units Outstanding at September 30, 2012.............................................................................

105,900 
$
51.61 

 

Vesting restrictions for the outstanding shares of non-vested restricted stock units at September 30, 2012 will lapse as follows: 2014 — 12,932 shares; 2015 — 35,300 shares; 2016 — 35,301 shares; and 2017 — 22,367 shares.

 

Redeemable Preferred Stock

 

As of September 30, 2012, there were 10,000,000 shares of $1 par value Preferred Stock authorized but unissued.

 

Long-Term Debt

 

The outstanding long-term debt is as follows:

 

At September 30

 

2012

2011

 

(Thousands)

Medium-Term Notes(1):

7.4% due March 2023 to June 2025......................................................................................................................................

$
99,000 
$
249,000 

Notes(1):

4.90% to 8.75% due March 2013 to December 2021....................................................................................................

1,300,000 
800,000 

Total Long-Term Debt....................................................................................................................................................................

1,399,000 
1,049,000 

Less Current Portion(2)...............................................................................................................................................................

250,000 
150,000 

 

$
1,149,000 
$
899,000 

 

 

(1)

The Medium-Term Notes and Notes are unsecured.

(2)

Current Portion of Long-Term Debt at September 30, 2012 consists of $250.0 million of 5.25% notes that mature in March 2013.    Current Portion of Long-Term Debt at September 30, 2011 consisted of $150.0 million of 6.70% medium-term notes that matured in November 2011. 

 

On December 1, 2011, the Company issued $500.0 million of 4.90% notes due December 1, 2021.  After deducting underwriting discounts and commissions, the net proceeds to the Company amounted to $496.1 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 for general corporate purposes, including refinancing short-term debt that was used to pay the $150.0 million due at the maturity of the Company’s 6.70% notes in November 2011.

 

In addition, the Company has $300.0 million of 6.50% notes that mature in April 2018 and $250.0 million of 8.75% notes that mature in May 2019. The holders of these notes may require the Company to repurchase their notes at a price equal to 101% of the principal amount in the event of both a change in control and a ratings downgrade to a rating below investment grade.

 

As of September 30, 2012, the aggregate principal amounts of long-term debt maturing during the next five years and thereafter are as follows: $250.0 million in 2013, zero for 2014 through 2017, and $1,149.0 million thereafter.

 

Short-Term Borrowings

 

The Company historically has obtained short-term funds either through bank loans or the issuance of commercial paper. As for the former, the Company maintains a number of individual uncommitted or discretionary lines of credit with certain financial institutions for general corporate purposes. Borrowings under these lines of credit are made at competitive market rates. These credit lines, which totaled $335.0 million, are revocable at the option of the financial institutions and are reviewed on an annual basis. The Company anticipates that its uncommitted lines of credit generally will be renewed at amounts near current levels, or substantially replaced by similar lines. The total amount available to be issued under the Company’s commercial paper program is $300.0 million. The commercial paper program is backed by a syndicated committed credit facility totaling $750.0 million, which commitment extends through January 6, 2017.

 

At September 30, 2012, the Company had outstanding commercial paper and short-term notes payable to banks of $165.0 million and $6.0 million, respectivelyThe weighted average interest rate on the commercial paper was 0.50% and the weighted average interest rate on the short-term notes payable to banks was 0.60%.  At September 30, 2011, the Company had $40.0 million in outstanding commercial paper, which had a weighted average interest rate of 0.43%. 

 

Debt Restrictions

 

Under the committed credit facility, the Company agreed that its debt to capitalization ratio will not exceed .65 at the last day of any fiscal quarter through January 6, 2017.  At September 30, 2012, the Company’s debt to capitalization ratio (as calculated under the facility) was .44. The constraints specified in the committed credit facility would have permitted an additional $2.07 billion in short-term and/or long-term debt to be outstanding (further limited by the indenture covenants discussed below) before the Company’s debt to capitalization ratio exceeded .65

 

If a downgrade in any of the Company’s credit ratings were to occur, access to the commercial paper markets might not be possible. However, the Company expects that it could borrow under its committed credit facility, uncommitted bank lines of credit or rely upon other liquidity sources, including cash provided by operations.

 

Under the Company’s existing indenture covenants, at September 30, 2012, the Company would have been permitted to issue up to a maximum of $1.51 billion in additional long-term unsecured indebtedness at then current market interest rates in addition to being able to issue new indebtedness to replace maturing debt. The Company’s present liquidity position is believed to be adequate to satisfy known demands. However, if the Company were to experience a significant loss in the future (for example, as a result of an impairment of oil and gas properties), it is possible, depending on factors including the magnitude of the loss, that these indenture covenants would restrict the Company’s ability to issue additional long-term unsecured indebtedness for a period of up to nine calendar months, beginning with the fourth calendar month following the loss. This would not at any time preclude the Company from issuing new indebtedness to replace maturing debt.

 

The Company’s 1974 indenture pursuant to which $99.0 million (or 7.1%) of the Company’s long-term debt (as of September 30, 2012) was issued, contains a cross-default provision whereby the failure by the Company to perform certain obligations under other borrowing arrangements could trigger an obligation to repay the debt outstanding under the indenture. In particular, a repayment obligation could be triggered if the Company fails (i) to pay any scheduled principal or interest on any debt under any other indenture or agreement, or (ii) to perform any other term in any other such indenture or agreement, and the effect of the failure causes, or would permit the holders of the debt to cause, the debt under such indenture or agreement to become due prior to its stated maturity, unless cured or waived.

 

The Company’s $750.0 million committed credit facility also contains a cross-default provision whereby the failure by the Company or its significant subsidiaries to make payments under other borrowing arrangements, or the occurrence of certain events affecting those other borrowing arrangements, could trigger an obligation to repay any amounts outstanding under the committed credit facility. In particular, a repayment obligation could be triggered if (i) the Company or any of its significant subsidiaries fails to make a payment when due of any principal or interest on any other indebtedness aggregating $40.0 million or more, or (ii) an event occurs that causes, or would permit the holders of any other indebtedness aggregating $40.0 million or more to cause, such indebtedness to become due prior to its stated maturity. As of September 30, 2012, the Company had no debt outstanding under the committed credit facility.

Fair Value Measurements
Fair Value Measurements

Note F — 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 September 30, 2012 and 2011. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

 

At Fair Value as of September 30, 2012

 

Recurring Fair Value Measures

 

Level 1

 

Level 2

 

Level 3

Netting Adjustments(1)

 

Total

 

(Dollars in thousands)

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 

 

 

 

At Fair Value as of September 30, 2011

 

Recurring Fair Value Measures

 

Level 1

 

Level 2

 

Level 3

Netting Adjustments(1)

 

Total

 

(Dollars in thousands)

Assets:

 

Cash Equivalents — Money Market Mutual Funds..............................................................

$
32,444 

$

$

$

$
32,444 

Derivative Financial Instruments:

Commodity Futures Contracts — Gas......................................................................................

4,541 

(4,541)

Over the Counter Swaps — Gas..................................................................................................

75,292 

(179)
75,113 

Over the Counter Swaps — Oil.....................................................................................................

10,420 
(9,448)
972 

Other Investments:

Balanced Equity Mutual Fund.........................................................................................................

19,882 

19,882 

Common Stock — Financial Services Industry....................................................................

4,478 

4,478 

Other Common Stock........................................................................................................................

226 

226 

Hedging Collateral Deposits............................................................................................................

19,701 

19,701 

Total............................................................................................................................................................

$
81,272 
$
75,292 
$
10,420 
$
(14,168)
$
152,816 

 

 

 

 

 

 

Liabilities:

Derivative Financial Instruments:

Commodity Futures Contracts — Gas......................................................................................

$
7,833 

$

$

$
(4,541)
$
3,292 

Over the Counter Swaps — Gas..................................................................................................

179 

(179)

Over the Counter Swaps — Oil.....................................................................................................

15,830 
(9,448)
6,382 

Total............................................................................................................................................................

$
7,833 
$
179 
$
15,830 
$
(14,168)
$
9,674 

Total Net Assets/(Liabilities)............................................................................................................

$
73,439 
$
75,113 
$
(5,410)

$

$
143,142 

 

(1)

Amounts represent the impact of legally-enforceable master netting arrangements that allow the Company to net gain and loss positions held with the same counterparties.

 

Derivative Financial Instruments

 

At September 30, 2012 and 2011, 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 $0.4 million (at September 30, 2012) and $5.5 million (at September 30, 2011), which are associated with these futures contracts, have been reported in Level 1 as well. The derivative financial instruments reported in Level 2 consist of all of the natural gas price swap agreements used in the Company’s Exploration and Production and Energy Marketing segments at September 30, 2012 and 2011, and some of the crude oil price swap agreements used in the Company’s Exploration and Production segment at September 30, 2012.  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 the majority of the crude oil price swap agreements used in the Company’s Exploration and Production segment at September 30, 2012 and all of the crude oil price swap agreements used in the Company’s Exploration and Production segment at September 30, 2011.  Hedging collateral deposits of $14.2 million associated with these crude oil price swap agreements have been reported in Level 1 at September 30, 2011. 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 the majority 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 the value of the derivative financial instruments.  At September 30, 2012, it was assumed that Midway Sunset oil was 110.5% of 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 103.2% to 125.0% of NYMEX.  If the basis differential between Midway Sunset oil and NYMEX contracts used in the fair value measurement calculation at September 30, 2012 had been 10 percentage points lower, the fair value of the Level 3 crude oil price swap agreements liability would have been approximately $19.4 million lower.  If the basis differential between Midway Sunset oil and NYMEX contracts used in the fair value measurement at September 30, 2012 had been 10 percentage points higher, the fair value measurement of the Level 3 crude oil price swap agreements liability would have been approximately $19.4 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. 

 

Based on an assessment of the counterparties’ credit risk, the fair market value of the price swap agreements reported as Level 2 assets (after netting arrangements) at September 30, 2012 has been reduced by $0.2 million and the fair market value of the price swap agreements reported as Level 2 and Level 3 assets (after netting arrangements) at September 30, 2011 have been reduced by $2.0 million.  Based on an assessment of the Company’s credit risk, the fair market value of the price swap agreements reported as Level 2 and Level 3 liabilities (after netting arrangements) at September 30, 2012 has been reduced by $1.2 million and the fair market value of the price swap agreements reported as Level 3 liabilities (after netting arrangements) has not been reduced at September 30, 2011. These credit reserves were determined by applying default probabilities to the anticipated cash flows that the Company is either expecting from its counterparties or expecting to pay to its counterparties.

 

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 years ended September 30, 2012 and September 30, 2011, respectively.  For the years ended September 30, 2012 and September 30, 2011, 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)

 

 

 

Total Gains/Losses

 

 

 

 

 

 

 

Gains/(Losses)

 

 

 

 

(Gains)/Losses

Unrealized and

 

 

 

 

 

 

October 1,

2011

 Realized and

Included in

Earnings

Included in Other

Comprehensive Income

(Loss)

Transfer

In/(Out) of

Level 3

 

September 30,

2012

 

(Dollars in thousands)

Derivative Financial Instruments(2)…………….…...

$
(5,410)

$  46,174(1)

$
(60,428)

            $            

$
(19,664)

 

 

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

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

 

 

Fair Value Measurements Using Unobservable Inputs (Level 3)

 

 

 

Total Gains/Losses

 

 

 

 

 

 

 

Gains/(Losses)

 

 

 

 

(Gains)/Losses

Unrealized and

 

 

 

 

 

 

October 1,

2010

 Realized and

Included in

Earnings

Included in Other

Comprehensive Income

(Loss)

Transfer

In/(Out) of

Level 3

 

September 30,

2011

 

(Dollars in thousands)

Derivative Financial Instruments(2)..............................

$
(16,483)

$ 41,354(1)

$
(30,281)

            $            

$
(5,410)

 

(1) Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the year ended September 30, 2011.

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

Financial Instruments
Financial Instruments

Note G — 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:

 

 

At September 30

 

 

2012 Carrying

Amount

2012 Fair

Value

2011 Carrying

Amount

2011 Fair

Value

 

(Thousands)

Long-Term Debt....................................................................................................................

$
1,399,000 
$
1,623,847 
$
1,049,000 
$
1,198,585 

 

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 and $54.8 million at September 30, 2012 and 2011, respectively. The fair value of the equity mutual fund was $24.8 million and $19.9 million at September 30, 2012 and 2011, respectively. The gross unrealized gain on this equity mutual fund was $2.6 million at September 30, 2012.  The gross unrealized loss on this equity mutual fund was $0.7 million at September 30, 2011.  The fair value of the stock of an insurance company was $4.8 million and $4.5 million at September 30, 2012 and 2011, respectively. The gross unrealized gain on this stock was $2.3 million and $2.1 million at September 30, 2012 and 2011, respectively. 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 September 30, 2012 and September 30, 2011.  All of the derivative financial instruments reported on those line items related to commodity contracts as discussed in the paragraph above.

 

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 September 30, 2012, 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

133.5 Bcf (all short positions)

Crude Oil

2,316,000 Bbls (all short positions)

 

As of September 30, 2012, 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

5.7 Bcf (all short positions (forecasted storage withdrawals))

 

As of September 30, 2012, the Company’s Exploration and Production segment had $0.9 million ($0.5 million after tax) of net unrealized hedging gains included in the accumulated other comprehensive income (loss) balance. It is expected that $21.9 million ($12.7 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.  It is expected that unrealized losses will be reclassified into the Consolidated Statement of Income in subsequent periods as the expected sales of the underlying commodities occur.

 

As of September 30, 2012, the Company’s Energy Marketing segment had $2.8 million ($1.7 million after tax) of net hedging losses 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 within the next 12 months as the expected sales of the underlying commodity occurs.

 

As of September 30, 2012, the Company’s Pipeline and Storage segment had $0.7 million ($0.4 million after tax) of net hedging losses 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 within the next 12 months as the expected sales of the underlying commodity occurs.

 

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

 

 

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

 

Year Ended September 30, 2012 and 2011 (Dollar Amounts in Thousands)

 

Amount of

 

Amount of

 

 

 

Derivative Gain or

 

Derivative Gain or

 

 

 

(Loss) Recognized

Location of

(Loss) Reclassified

Location of

 

 

in Other

Derivative Gain or

from Accumulated

Derivative Gain or

Derivative Gain or

 

Comprehensive

(Loss) Reclassified

Other Comprehensive

(Loss) Recognized

(Loss) Recognized

 

Income (Loss) on

from Accumulated

Income (Loss) on

in the Consolidated

in the Consolidated

 

the Consolidated

Other Comprehensive

the Consolidated

Statement of

Statement of Income

 

Statement of

Income (Loss) on

Balance Sheet into

Income

(Ineffective

 

Comprehensive

the Consolidated

the Consolidated

(Ineffective Portion

Portion and Amount

 

Income (Loss)

Balance Sheet into

Statement of Income

and Amount

Excluded from

Derivatives in Cash

(Effective Portion)

the Consolidated

(Effective Portion)

Excluded from

Effectiveness Testing)

Flow Hedging

for the Year Ended

Statement of Income

for the Year Ended

Effectiveness

for the Year Ended

Relationships

September 30,

   (Effective Portion)

September 30,

  Testing)

September 30,

 

2012

2011

 

2012

2011

 

2012

2011

Commodity Contracts — Exploration & Production segment

$
(11,776)
$
24,713 

Operating Revenue

$
54,777 
$
6,367 

Not Applicable

$

$

Commodity Contracts — Energy Marketing segment

$
4,725 
$
5,015 

Purchased Gas

$
10,439 
$
8,608 

 

 

Not Applicable

$

$

Commodity Contracts — Pipeline & Storage segment(1)

$
(197)
$
510 

Operating Revenue

$
475 
$
510 

 

 

Not Applicable

$

$

Total............................................

$
(7,248)
$
30,238 

 

$
65,691 
$
15,485 

 

$

$

 

 

(1)

There were no open hedging positions at September 30, 2012 or 2011.

   

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 September 30, 2012, the Company’s Energy Marketing segment had fair value hedges covering approximately 10.2 Bcf (8.7 Bcf of fixed price sales commitments (all long positions), 1.1 Bcf of fixed price purchase commitments (all short positions) and 0.4 Bcf of commitments related to the withdrawal of storage gas (all 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.

 

Consolidated Statement of Income

Gain/(Loss) on Derivative

Gain/(Loss) on Commitment

Operating Revenues.....................................................................................................................

$
8,021,910 
$
(8,021,910)

Purchased Gas................................................................................................................................

$
(1,235,817)
$
1,235,817 

 

 

 

 

 

 

 

Derivatives in Fair Value Hedging Relationships – Energy Marketing segment

 

 

Location of

Derivative Gain or

(Loss) Recognized

in the Consolidated

Statement of Income

Amount of

Derivative Gain or

(Loss) Recognized

in the Consolidated

Statement of Income

for the Year Ended

September 30, 2012

 

(In thousands)

Commodity Contracts — Hedge of fixed price sales commitments of natural gas....

Operating Revenues

$
8,022 

Commodity Contracts — Hedge of fixed price purchase commitments of natural gas

Purchased Gas

(1,261)

Commodity Contracts — Hedge of natural gas held in storage............................................

Purchased Gas

25 

 

 

$
6,786 

 

 

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 twelve counterparties of which four are in a net gain position.  On average, the Company had $6.4 million of credit exposure per counterparty in a gain position at September 30, 2012. The maximum credit exposure per counterparty in a gain position at September 30, 2012 was $11.0 million. As of September 30, 2012, 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 September 30, 2012, ten of the twelve 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 September 30, 2012, the fair market value of the derivative financial instrument assets with a credit-risk related contingency feature was $14.0 million according to the Company’s internal model (discussed in Note F — Fair Value Measurements).  At September 30, 2012, the fair market value of the derivative financial instrument liabilities with a credit-risk related contingency feature was $23.9 million according to the Company’s  internal model  (discussed in Note F — Fair Value Measurements).  For its over-the-counter crude oil swap agreements, which were in a liability position, the Company was not required to post any hedging collateral deposits at September 30, 2012. 

 

For its exchange traded futures contracts which are in a liability position, the Company had posted $0.4 million in hedging collateral deposits as of September 30, 2012. 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 A under Hedging Collateral Deposits.

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

Note H — Retirement Plan and Other Post-Retirement Benefits

 

The Company has a tax-qualified, noncontributory, defined-benefit retirement plan (Retirement Plan) that covers approximately half of the full-time employees of the Company. The Retirement Plan covers certain non-collectively bargained employees hired before July 1, 2003 and certain collectively bargained employees hired before November 1, 2003. Certain non-collectively bargained employees hired after June 30, 2003 and certain collectively bargained employees hired after October 31, 2003 are eligible for a Retirement Savings Account benefit provided under the Company’s defined contribution Tax-Deferred Savings Plans. Costs associated with the Retirement Savings Account were $0.9 million, $0.7 million and $0.6 million for the years ended September 30, 2012, 2011 and 2010, respectively. Costs associated with the Company’s contributions to the Tax-Deferred Savings Plans, exclusive of the costs associated with the Retirement Savings Account, were $4.3 million, $4.3 million, and $4.2 million for the years ended September 30, 2012, 2011 and 2010, respectively.

 

The Company provides health care and life insurance benefits (other post-retirement benefits) for a majority of its retired employees. The other post-retirement benefits cover certain non-collectively bargained employees hired before January 1, 2003 and certain collectively bargained employees hired before October 31, 2003.

 

The Company’s policy is to fund the Retirement Plan with at least an amount necessary to satisfy the minimum funding requirements of applicable laws and regulations and not more than the maximum amount deductible for federal income tax purposes. The Company has established VEBA trusts for its other post-retirement benefits. Contributions to the VEBA trusts are tax deductible, subject to limitations contained in the Internal Revenue Code and regulations and are made to fund employees’ other post-retirement benefits, as well as benefits as they are paid to current retirees. In addition, the Company has established 401(h) accounts for its other post-retirement benefits. They are separate accounts within the Retirement Plan trust used to pay retiree medical benefits for the associated participants in the Retirement Plan. Although these accounts are in the Retirement Plan trust, for funding status purposes as shown below, the 401(h) accounts are included in Fair Value of Assets under Other Post-Retirement Benefits. Contributions are tax-deductible when made, subject to limitations contained in the Internal Revenue Code and regulations.

 

The expected return on plan assets, a component of net periodic benefit cost shown in the tables below, is applied to the market-related value of plan assets. The market-related value of plan assets is the market value as of the measurement date adjusted for variances between actual returns and expected returns (from previous years) that have not been reflected in net periodic benefit costs.

 

Reconciliations of the Benefit Obligations, Plan Assets and Funded Status, as well as the components of Net Periodic Benefit Cost and the Weighted Average Assumptions of the Retirement Plan and other post-retirement benefits are shown in the tables below. The date used to measure the Benefit Obligations, Plan Assets and Funded Status is September 30 for fiscal year 2012, 2011 and 2010.

 

 

Retirement Plan

Other Post-Retirement Benefits

 

Year Ended September 30

Year Ended September 30

 

2012

2011

2010

2012

2011

2010

 

(Thousands)

Change in Benefit Obligation

Benefit Obligation at Beginning of Period..

$
949,777 
$
924,493 
$
831,496 
$
485,452 
$
472,407 
$
467,295 

Service Cost...........................................................

14,202 
14,772 
12,997 
4,016 
4,276 
4,298 

Interest Cost...........................................................

41,526 
42,676 
44,308 
21,315 
21,884 
25,017 

Plan Participants’ Contributions......................

1,956 
1,963 
1,644 

Retiree Drug Subsidy Receipts......................

1,528 
1,532 
1,354 

Amendments(1)......................................................

(1,764)

(7,187)

Actuarial (Gain) Loss...........................................

120,338 
21,395 
85,831 
71,708 
15,071 
(3,635)

Benefits Paid...........................................................

(55,099)
(51,795)
(50,139)
(24,712)
(24,494)
(23,566)

Benefit Obligation at End of Period..............

$
1,070,744 
$
949,777 
$
924,493 
$
561,263 
$
485,452 
$
472,407 

Change in Plan Assets

Fair Value of Assets at Beginning of

Period

$
601,719 
$
597,549 
$
563,881 
$
351,990 
$
353,269 
$
319,022 

Actual Return on Plan Assets.........................

111,034 
2,412 
61,625 
63,552 
(4,094)
30,478 

Employer Contributions......................................

44,022 
53,553 
22,182 
21,348 
25,346 
25,691 

Plan Participants’ Contributions......................

1,956 
1,963 
1,644 

Benefits Paid...........................................................

(55,099)
(51,795)
(50,139)
(24,712)
(24,494)
(23,566)

Fair Value of Assets at End of Period.........

$
701,676 
$
601,719 
$
597,549 
$
414,134 
$
351,990 
$
353,269 

Net Amount Recognized at End of Period (Funded Status)

$
(369,068)
$
(348,058)
$
(326,944)
$
(147,129)
$
(133,462)
$
(119,138)

Amounts Recognized in the Balance Sheets Consist of:

Non-Current Liabilities.........................................

$
(369,068)
$
(348,058)
$
(326,944)
$
(147,129)
$
(133,462)
$
(119,138)

Accumulated Benefit Obligation.....................

$
986,223 
$
874,595 
$
843,526 

N/A

N/A

N/A

Weighted Average Assumptions Used to Determine Benefit Obligation at September 30

Discount Rate.........................................................

3.50% 
4.50% 
4.75% 
3.50% 
4.50% 
4.75% 

Rate of Compensation Increase....................

4.75% 
4.75% 
4.75% 
4.75% 
4.75% 
4.75% 

Components of Net Periodic Benefit Cost

Service Cost...........................................................

$
14,202 
$
14,772 
$
12,997 
$
4,016 
$
4,276 
$
4,298 

Interest Cost...........................................................

41,526 
42,676 
44,308 
21,315 
21,884 
25,017 

Expected Return on Plan Assets...................

(59,701)
(59,103)
(58,342)
(28,971)
(29,165)
(26,334)

Amortization of Prior Service Cost...............

269 
588 
655 
(2,138)
(1,710)
(1,710)

Amortization of Transition Amount................

10 
541 
541 

Recognition of Actuarial Loss(2)....................

39,615 
34,873 
21,641 
24,057 
23,794 
25,881 

Net Amortization and Deferral for Regulatory Purposes

(6,900)
(2,311)
(30)
6,162 
10,490 
351 

Net Periodic Benefit Cost.................................

$
29,011 
$
31,495 
$
21,229 
$
24,451 
$
30,110 
$
28,044 

Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost at September 30

Discount Rate.........................................................

4.50% 
4.75% 
5.50% 
4.50% 
4.75% 
5.50% 

Expected Return on Plan Assets...................

8.25% 
8.25% 
8.25% 
8.25% 
8.25% 
8.25% 

Rate of Compensation Increase....................

4.75% 
4.75% 
5.00% 
4.75% 
4.75% 
5.00% 

 

 

(1)

In fiscal 2011, the Company passed an amendment which changed the definition of annual compensation prospectively to exclude certain bonuses paid by Seneca after September 30, 2011.  This decreased the benefit obligation of the Retirement Plan. In fiscal 2011, the Company also increased the prescription drug co-payments for certain retired participants which decreased the benefit obligation of the other post-retirement benefits. 

 

(2)  Distribution Corporation’s New York jurisdiction calculates the amortization of the actuarial loss on a vintage year basis over    10 years, as mandated by the NYPSC. All the other subsidiaries of the Company utilize the corridor approach.

 

The Net Periodic Benefit Cost in the table above includes the effects of regulation. The Company recovers pension and other post-retirement benefit costs in its Utility and Pipeline and Storage segments in accordance with the applicable regulatory commission authorizations. Certain of those commission authorizations established tracking mechanisms which allow the Company to record the difference between the amount of pension and other post-retirement benefit costs recoverable in rates and the amounts of such costs as determined under the existing authoritative guidance as either a regulatory asset or liability, as appropriate. Any activity under the tracking mechanisms (including the amortization of pension and other post-retirement regulatory assets and liabilities) is reflected in the Net Amortization and Deferral for Regulatory Purposes line item above.  

 

In addition to the Retirement Plan discussed above, the Company also has Non-Qualified benefit plans that cover a group of management employees designated by the Chief Executive Officer of the Company. These plans provide for defined benefit payments upon retirement of the management employee, or to the spouse upon death of the management employee. The net periodic benefit cost associated with these plans were $9.1 million, $8.6 million and $7.4 million in 2012, 2011 and 2010, respectively. The accumulated benefit obligations for the plans were $54.5 million, $46.0 million and $41.8 million at September 30, 2012, 2011 and 2010, respectively. The projected benefit obligations for the plans were $88.5 million, $79.2 million and $73.9 million at September 30, 2012, 2011 and 2010, respectively. The projected benefit obligations are recorded in Other Deferred Credits on the Consolidated Balance Sheets.  The actuarial valuations for the plans were determined based on a discount rate of 2.50%, 3.75% and 4.25% as of September 30, 2012, 2011 and 2010, respectively and a weighted average rate of compensation increase of 7.75%, 8.0% and 8.0% as of September 30, 2012, 2011 and 2010, respectively.

 

The cumulative amounts recognized in accumulated other comprehensive income (loss), regulatory assets, and regulatory liabilities through fiscal 2012, the changes in such amounts during 2012, as well as the amounts expected to be recognized in net periodic benefit cost in fiscal 2013 are presented in the table below:

 

 

 

 

 

Retirement

Plan

Other

Post-Retirement

Benefits

 

Non-Qualified

Benefit Plans

 

(Thousands)

Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities(1)

Net Actuarial Loss..........................................................................................................................................

$
(458,125)
$
(195,305)
$
(40,770)

Transition Obligation.......................................................................................................................................

(8)

Prior Service (Cost) Credit.........................................................................................................................

(1,304)
11,217 

            

Net Amount Recognized..............................................................................................................................

$
(459,429)
$
(184,096)
$
(40,770)

Changes to Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities Recognized During Fiscal 2012(1)

Increase in Actuarial Loss, excluding amortization(2)....................................................................

$
(69,005)
$
(37,134)
$
(9,559)

Change due to Amortization of Actuarial Loss..................................................................................

39,615 
24,057 
4,363 

Reduction in Transition Obligation...........................................................................................................

10 

Prior Service (Cost) Credit.........................................................................................................................

269 
(2,138)

            

Net Change........................................................................................................................................................

$
(29,121)
$
(15,205)
$
(5,196)

Amounts Expected to be Recognized in Net Periodic Benefit Cost in the Next Fiscal Year(1)

Net Actuarial Loss..........................................................................................................................................

$
(52,776)
$
(20,892)
$
(5,280)

Transition Obligation.......................................................................................................................................

(8)

Prior Service (Cost) Credit.........................................................................................................................

(238)
2,138 

            

Net Amount Expected to be Recognized.............................................................................................

$
(53,014)
$
(18,762)
$
(5,280)

 

 

(1)

Amounts presented are shown before recognizing deferred taxes.

(2) Amounts presented include the impact of actuarial gains/losses related to return on assets, as well as the Actuarial (Gain) Loss  amounts presented in the Change in Benefit Obligation.

 

In order to adjust the funded status of its pension (tax-qualified and non-qualified) and other post-retirement benefit plans at September 30, 2012, the Company recorded a $32.2 million increase to Other Regulatory Assets in the Company’s Utility and Pipeline and Storage segments and a $17.3 million (pre-tax) increase to Accumulated Other Comprehensive Loss. 

 

The effect of the discount rate change for the Retirement Plan in 2012 was to increase the projected benefit obligation of the Retirement Plan by $118.8 million. In 2012, other actuarial experience increased the projected benefit obligation for the Retirement Plan by $1.6 million.    The effect of the discount rate change for the Retirement Plan in 2011 was to increase the projected benefit obligation of the Retirement Plan by $26.9 million.  The effect of the discount rate change for the Retirement Plan in 2010 was to increase the projected benefit obligation of the Retirement Plan by $75.1 million.

 

The Company made cash contributions totaling $44.0 million to the Retirement Plan during the year ended September 30, 2012. The Company expects that the annual contribution to the Retirement Plan in 2013 will be in the range of $30.0 million to $45.0 million. 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 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 currently in the process of evaluating its future contributions in light of the provisions of the Act.

 

The following Retirement Plan benefit payments, which reflect expected future service, are expected to be paid by the Retirement Plan during the next five years and the five years thereafter: $55.9 million in 2013; $56.5 million in 2014; $57.3 million in 2015; $58.5 million in 2016; $59.6 million in 2017; and $315.2 million in the five years thereafter.

 

The effect of the discount rate change in 2012 was to increase the other post-retirement benefit obligation by $65.6 million. Other actuarial experience increased the other post-retirement benefit obligation in 2012 by $6.1 million.

 

The effect of the discount rate change in 2011 was to increase the other post-retirement benefit obligation by $14.5 million. Other actuarial experience decreased the other post-retirement benefit obligation in 2011 by $6.6 million, primarily attributable to the impact of the change in prescription drug co-payments as noted above.

 

The effect of the discount rate change in 2010 was to increase the other post-retirement benefit obligation by $39.4 million. Other actuarial experience decreased the other post-retirement benefit obligation in 2010 by $43.1 million, primarily attributable to updated pharmaceutical drug rebate experience as well as updated claim costs assumptions based on experience.

 

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 provides for a prescription drug benefit under Medicare (Medicare Part D), as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. Since the Company is assumed to continue to provide a prescription drug benefit to retirees in the point of service and indemnity plans that is at least actuarially equivalent to Medicare Part D, the impact of the Act was reflected as of December 8, 2003.

 

The estimated gross other post-retirement benefit payments and gross amount of Medicare Part D prescription drug subsidy receipts are as follows (dollars in thousands):

 

 

Benefit Payments

Subsidy Receipts

2013..........................................................................................................................................................................................

$
26,559 
$
(1,828)

2014..........................................................................................................................................................................................

$
27,852 
$
(2,021)

2015..........................................................................................................................................................................................

$
29,154 
$
(2,220)

2016..........................................................................................................................................................................................

$
30,506 
$
(2,420)

2017..........................................................................................................................................................................................

$
31,859 
$
(2,606)

2018 through 2022.............................................................................................................................................................

$
175,145 
$
(15,964)

 

 

2012

 

            2011

 

2010

 

Rate of Increase for Pre Age 65 Participants............................................................................................................

7.46% 
(1)
7.64% 
(1)
7.82% 
(1)

Rate of Increase for Post Age 65 Participants.........................................................................................................

6.84% 

(1)

6.89% 

(1)

6.95% 

(1)

Annual Rate of Increase in the Per Capita Cost of Covered Prescription Drug Benefits....................

8.08% 

(1)

8.39% 

(1)

8.69% 

(1)

Annual Rate of Increase in the Per Capita Medicare Part B Reimbursement.............................................

6.84% 

(1)

6.89% 

(1)

6.95% 

(1)

Annual Rate of Increase in the Per Capita Medicare Part D Subsidy............................................................

7.13% 

(1)

7.30% 

(1)

7.60% 

(1)

(1) It was assumed that this rate would gradually decline to 4.5% by 2028.

 

The health care cost trend rate assumptions used to calculate the per capita cost of covered medical care benefits have a significant effect on the amounts reported. If the health care cost trend rates were increased by 1% in each year, the other post-retirement benefit obligation as of October 1, 2012 would increase by $69.7 million. This 1% change would also have increased the aggregate of the service and interest cost components of net periodic post-retirement benefit cost for 2012 by $3.4 million. If the health care cost trend rates were decreased by 1% in each year, the other post-retirement benefit obligation as of October 1, 2012 would decrease by $58.1 million. This 1% change would also have decreased the aggregate of the service and interest cost components of net periodic post-retirement benefit cost for 2012 by $2.8 million. 

 

The Company made cash contributions totaling $21.2 million to its VEBA trusts and 401(h) accounts during the year ended September 30, 2012. In addition, the Company made direct payments of $0.1 million to retirees not covered by the VEBA trusts and 401(h) accounts during the year ended September 30, 2012. The Company expects that the annual contribution to its VEBA trusts and 401(h) accounts in 2013 will be in the range of $15.0 million to $20.0 million.

 

Investment Valuation

 

The Retirement Plan assets and other post-retirement benefit assets are valued under the current fair value framework. See Note F —  Fair Value Measurements for further discussion regarding the definition and levels of fair value hierarchy established by the authoritative guidance.

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Below is a listing of the major categories of plan assets held as of September 30, 2012 and 2011, as well as the associated level within the fair value hierarchy in which the fair value measurements in their entirety fall, based on the lowest level input that is significant to the fair value measurement in its entirety (dollars in thousands):

 

 

 

 

Total Fair Value

Amounts at

September 30, 2012

 

 

Level 1

 

 

Level 2

 

 

            Level 3

Retirement Plan Investments

Domestic Equities (1).........................................................................................................

$
358,679 
$
231,978 
$
126,701 

$            

International Equities (2)....................................................................................................

96,451 
2,090 
94,361 

            

Domestic Fixed Income (3).............................................................................................

165,130 
70,730 
94,400 

            

International Fixed Income (4)........................................................................................

65,835 
1,941 
63,894 

            

Hedge Fund Investments.................................................................................................

39,956 

39,956 

Real Estate..............................................................................................................................

6,170 

6,170 

Cash and Cash Equivalents ..........................................................................................

12,874 

12,874 

            

Total Retirement Plan Investments..............................................................................

745,095 
306,739 
392,230 
46,126 

401(h) Investments.............................................................................................................

(43,311)
(17,818)
(22,813)
(2,680)

Total Retirement Plan Investments (excluding 401(h) Investments)...........

$
701,784 
$
288,921 
$
369,417 
$
43,446 

Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash.....

(108)

Total Retirement Plan Assets..........................................................................................

$
701,676 

 

 

 

 

 

Total Fair Value

Amounts at

September 30, 2011

 

 

Level 1

 

 

Level 2

 

 

            Level 3

Retirement Plan Investments

Domestic Equities (1).........................................................................................................

$
313,193 
$
215,524 
$
97,669 

$            

International Equities (2)....................................................................................................

79,732 
11,163 
68,569 

            

Domestic Fixed Income (3).............................................................................................

146,587 
77,657 
68,930 

            

International Fixed Income (4)........................................................................................

43,153 
887 
42,266 

            

Hedge Fund Investments.................................................................................................

39,296 

39,296 

Real Estate..............................................................................................................................

6,443 

6,443 

Cash and Cash Equivalents ..........................................................................................

10,629 

10,629 

            

Total Retirement Plan Investments..............................................................................

639,033 
305,231 
288,063 
45,739 

401(h) Investments.............................................................................................................

(37,176)
(17,744)
(16,773)
(2,659)

Total Retirement Plan Investments (excluding 401(h) Investments)...........

$
601,857 
$
287,487 
$
271,290 
$
43,080 

Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash.....

(138)

Total Retirement Plan Assets..........................................................................................

$
601,719 

 

(a)

Domestic Equities include mostly collective trust funds, common stock, and exchange traded funds.

(b)

International Equities include mostly collective trust funds and common stock.

(c)

Domestic Fixed Income securities include mostly collective trust funds, corporate/government bonds and mortgages, and exchange traded funds.

(d)

International Fixed Income securities includes mostly collective trust funds and exchange traded funds.

 

 

 

 

Total Fair Value

Amounts at

September 30, 2012

 

 

Level 1

 

 

Level 2

 

 

Level 3

Other Post-Retirement Benefit Assets held in VEBA Trusts

Collective Trust Funds — Domestic Equities............................................................

$
179,059 

$

$
179,059 

$

Collective Trust Funds — International Equities......................................................

66,590 

66,590 

Exchange Traded Funds Fixed Income..................................................................

107,597 
107,597 

Real Estate................................................................................................................................

1,305 

1,305 

Cash Held in Collective Trust Funds.............................................................................

16,397 

16,397 

Total VEBA Trust Investments..........................................................................................

370,948 
107,597 
262,046 
1,305 

401(h) Investments................................................................................................................

43,311 
17,818 
22,813 
2,680 

Total Investments (including 401(h) Investments)..................................................

$
414,259 
$
125,415 
$
284,859 
$
3,985 

Miscellaneous Accruals (Including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)

(125)

Total Other Post-Retirement Benefit Assets..............................................................

$
414,134 

 

 

 

 

Total Fair Value

Amounts at

September 30, 2011

 

 

Level 1

 

 

Level 2

 

 

Level 3

Other Post-Retirement Benefit Assets held in VEBA Trusts

Collective Trust Funds — Domestic Equities............................................................

$
148,451 

$

$
148,451 

$

Collective Trust Funds — International Equities......................................................

55,411 

55,411 

Exchange Traded Funds Fixed Income..................................................................

91,214 
91,214 

Real Estate................................................................................................................................

1,561 

1,561 

Cash Held in Collective Trust Funds.............................................................................

12,890 

12,890 

Total VEBA Trust Investments..........................................................................................

309,527 
91,214 
216,752 
1,561 

401(h) Investments................................................................................................................

37,176 
17,744 
16,773 
2,659 

Total Investments (including 401(h) Investments)..................................................

$
346,703 
$
108,958 
$
233,525 
$
4,220 

Miscellaneous Accruals (Including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)

5,287 

Total Other Post-Retirement Benefit Assets..............................................................

$
351,990 

 

The fair values disclosed in the above tables may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

 

The following tables provide a reconciliation of the beginning and ending balances of the Retirement Plan and other post-retirement benefit assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3). Note: For the year ended September 30, 2012, there was approximately $13.0 million transferred from Level 1 to Level 2, while for the year ended September 30, 2011, there were no significant transfers in or out of Level 1 or Level 2. In addition, as shown in the following tables, there were no transfers in or out of Level 3.

 

 

Retirement Plan Level 3 Assets

 

(Thousands)

 

Equity

 

 

 

Excluding

 

 

Convertible

Hedge

Limited

Real

401(h)

 

 

Securities

Funds

Partnerships

Estate

Investments

Total

Balance at September 30, 2010.......................................................

$
337 

$            

$
245 
$
6,148 
$
(367)
$
6,363 

Realized Gains/(Losses)......................................................................

53 

(4,846)
20 
278 
(4,495)

Unrealized Gains/(Losses)..................................................................

(36)
(789)
4,853 
159 
(268)
3,919 

Purchases, Sales, Issuances, and Settlements (Net)..........

(354)
40,085 
(252)
116 
(2,302)
37,293 

Balance at September 30, 2011.......................................................

            

39,296 

            

6,443 
(2,659)
43,080 

Realized Gains/(Losses)......................................................................

         

 —

60 
(4)
56 

Unrealized Gains/(Losses)..................................................................

660 

(362)
(15)
283 

Purchases, Sales, Issuances, and Settlements (Net)..........

            

                  

            

29 
(2)
27 

Balance at September 30, 2012 .....................................................

$            

$
39,956 

$            

$
6,170 
$
(2,680)
$
43,446 

 

 

 

 

 

 

 

 

 

 

Other Post-Retirement Benefit Level 3 Assets

 

 

(Thousands)

 

VEBA

 

 

 

 

Trust

 

Other

 

 

Investments

Real

Including

401(h)

Post-Retirement

Benefit

 

 

Estate

Investments

Investments

 

Balance at September 30, 2010.........................................................................

$
3,824 
$
367 
$
4,191 

 

Realized Gains/(Losses)........................................................................................

(278)
(278)

 

Unrealized Gains/(Losses)....................................................................................

(2,263)
268 
(1,995)

 

Purchases, Sales, Issuances, and Settlements (Net)............................

            

2,302 
2,302 

 

Balance at September 30, 2011.........................................................................

1,561 
2,659 
4,220 

 

Realized Gains/(Losses)........................................................................................

 

Unrealized Gains/(Losses)....................................................................................

(256)
15 
(241)

 

Purchases, Sales, Issuances, and Settlements (Net)............................

            

 

Balance at September 30, 2012.........................................................................

$
1,305 
$
2,680 
$
3,985 

 

 

 

 

 

 

 

The Company’s assumption regarding the expected long-term rate of return on plan assets is 8.0%, effective for fiscal 2013. The return assumption reflects the anticipated long-term rate of return on the plan’s current and future assets. The Company utilizes historical investment data, projected capital market conditions, and the plan’s target asset class and investment manager allocations to set the assumption regarding the expected return on plan assets.

 

The long-term investment objective of the Retirement Plan trust, the VEBA trusts and the 401(h) accounts is to achieve the target total return in accordance with the Company’s risk tolerance. Assets are diversified utilizing a mix of equities, fixed income and other securities (including real estate). The target allocation for the Retirement Plan is 55-70% equity securities, 25-40% fixed income securities and 5-20% other.  The target allocation for the VEBA trusts (including 401(h) accounts) is 60-75% equity securities, 25-40% fixed income securities and 0-15% other.  Risk tolerance is established through consideration of plan liabilities, plan funded status and corporate financial condition. The assets of the Retirement Plan trusts, VEBA trusts and the 401(h) accounts have no significant concentrations of risk in any one country (other than the United States), industry or entity.

 

Investment managers are retained to manage separate pools of assets. Comparative market and peer group performance of individual managers and the total fund are monitored on a regular basis, and reviewed by the Company’s Retirement Committee on at least a quarterly basis.

 

The discount rate which is used to present value the future benefit payment obligations of the Retirement Plan and the Company’s other post-retirement benefits is 3.50% as of September 30, 2012. The discount rate which is used to present value the future benefit payment obligations of the Non-Qualified benefit plans is 2.50% as of September 30, 2012. The Company utilizes a yield curve model to determine the discount rate. The yield curve is a spot rate yield curve that provides a zero-coupon interest rate for each year into the future. Each year’s anticipated benefit payments are discounted at the associated spot interest rate back to the measurement date. The discount rate is then determined based on the spot interest rate that results in the same present value when applied to the same anticipated benefit payments.

 

Commitments And Contingencies
Commitments And Contingencies

Note I — 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.  At September 30, 2012, the Company has estimated its remaining clean-up costs related to former manufactured gas plant sites and third party waste disposal sites will be in the range of $15.4 million to $19.6 million.  The minimum estimated liability of $15.4 million has been recorded in Other Deferred Credits on the Consolidated Balance Sheet at September 30, 2012.  The Company expects to recover its environmental clean-up costs through rate recovery over a period of approximately 10 years.  Other than as discussed below, the Company is currently not aware of any material exposure to environmental liabilities.  However, changes in environmental laws and regulations, new information or other factors could adversely impact the Company.

 

(i) Former Manufactured Gas Plant Sites

 

The Company has incurred investigation and/or clean-up costs at several former manufactured gas plant sites in New York and Pennsylvania.  The Company continues to be responsible for future ongoing monitoring and long-term maintenance at two sites.

 

The Company has agreed with the NYDEC to remediate another 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.  An estimated minimum liability for remediation of this site of $14.0 million has been recorded.

 

(ii) Other

 

In November 2010, the NYDEC notified the Company of its potential liability with respect to a remedial action at a former industrial site in New York. Along with the Company, notifications were sent to the City of Buffalo and the New York State Thruway Authority.  Estimated clean-up costs associated with this site have not been completed and the Company cannot estimate its liability, if any, regarding remediation of this site at this time.  In July 2011, the Company agreed to perform a limited scope of work at this site, which is pending. 

 

Other

 

The Company, in its Utility segment, Energy Marketing segment, and Exploration and Production segment, has entered into contractual commitments in the ordinary course of business, including commitments to purchase gas, transportation, and storage service to meet customer gas supply needs.  The majority of these contracts expire within the next five years.  The future gas purchase, transportation and storage contract commitments during the next five years and thereafter are as follows: $278.1 million in 2013, $68.1 million in 2014, $64.1 million in 2015, $60.2 million in 2016, $32.3 million in 2017 and $66.6 million thereafter.  Gas prices within the gas purchase contracts are variable based on NYMEX prices adjusted for basis.  In the Utility segment, these costs are subject to state commission review, and are being recovered in customer rates.  Management believes that, to the extent any stranded pipeline costs are generated by the unbundling of services in the Utility segment’s service territory, such costs will be recoverable from customers.

 

The Company has entered into leases for the use of compressors, drilling rigs, buildings, meters and other items.  These leases are accounted for as operating leases.  The future lease commitments during the next five years and thereafter are as follows: $38.7 million in 2013, $37.0 million in 2014, $13.2 million in 2015, $5.8 million in 2016, $5.7 million in 2017, and $8.5 million thereafter.

 

The Company, in its Pipeline and Storage segment and All Other category, has entered into several contractual commitments associated with various pipeline and gathering system expansion projects.  As of September 30, 2012, the future contractual commitments related to the expansion projects are $40.7 million in 2013.  There are no contractual commitments extending beyond 2013.

 

The Company, in its Exploration and Production segment, has entered into contractual obligations associated with hydraulic fracturing and fuel.  The future contract commitments during the next two years are as follows: $60.7 million in 2013 and  $11.4 million in 2014.

 

The Company is involved in other litigation arising in the normal course of business.  In addition to the regulatory matters discussed in Note C — Regulatory Matters, the Company is involved in other regulatory matters arising in the normal course of business.  These other litigation and regulatory 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.    

 

Discontinued Operations
Discontinued Operations

Note J — Discontinued Operations

 

On September 1, 2010, the Company sold its landfill gas operations in the states of Ohio, Michigan, Kentucky, Missouri, Maryland and Indiana. Those operations consisted of short distance landfill gas pipeline companies engaged in the purchase, sale and transportation of landfill gas. The Company’s landfill gas operations were maintained under the Company’s wholly-owned subsidiary, Horizon LFG. The Company received approximately $38.0 million of proceeds from the sale. The sale resulted in the recognition of a gain of approximately $6.3 million, net of tax, during the fourth quarter of 2010. The decision to sell was based on progressing the Company’s strategy of divesting its smaller, non-core assets in order to focus on its core businesses, including the development of the Marcellus Shale and the construction of key pipeline infrastructure projects throughout the Appalachian region. As a result of the decision to sell the landfill gas operations, the Company began presenting these operations as discontinued operations during the fourth quarter of 2010.

 

The following is selected financial information of the discontinued operations for the sale of the Company’s landfill gas operations:

 

 

 

 

    Year Ended September 30,  2010

 

(Thousands)

Operating Revenues...........................................................................................................................................................

$
9,919 

Operating Expenses............................................................................................................................................................

8,933 

Operating Income.................................................................................................................................................................

986 

Other Income..........................................................................................................................................................................

Interest Income.....................................................................................................................................................................

Interest Expense...................................................................................................................................................................

29 

Income before Income Taxes.........................................................................................................................................

963 

Income Tax Expense...........................................................................................................................................................

493 

Income from Discontinued Operations.......................................................................................................................

470 

Gain on Disposal, Net of Taxes of $4,024...............................................................................................................

6,310 

Income from Discontinued Operations.......................................................................................................................

$
6,780 

 

Business Segment Information
Business Segment Information

Note K — 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 Utility segment operations are regulated by the NYPSC and the PaPUC and are carried out by Distribution Corporation.  Distribution Corporation sells natural gas to retail customers and provides natural gas transportation services in western New York and northwestern Pennsylvania.

 

The Pipeline and Storage segment operations are regulated by the FERC for both Supply Corporation and Empire. Supply Corporation transports and stores natural gas for utilities (including Distribution Corporation), natural gas marketers (including NFR), exploration and production companies (including Seneca) and pipeline companies in the northeastern United States markets.  Empire transports natural gas to major industrial companies, utilities (including Distribution Corporation) and power producers in New York State.

 

The Exploration and Production segment, through Seneca, is engaged in exploration for, and development and purchase of, natural gas and oil reserves in California, the Appalachian region of the United States and Kansas.  The Company completed the sale of its off-shore oil and natural gas properties in April 2011 as a result of the segment’s increasing emphasis on the Marcellus Shale play within the Appalachian region.  Seneca’s production is, for the most part, sold to purchasers located in the vicinity of its wells.  In November 2010, the Company acquired oil and gas properties in the Covington Township area of Tioga County, Pennsylvania from EOG Resources, Inc. for approximately $24.1 million.  In addition, the Company acquired two tracts of leasehold acreage in March 2010 for approximately $71.8 million.  These tracts, consisting of approximately 18,000 net acres in Tioga and Potter Counties in Pennsylvania, are geographically similar to the Company’s existing Marcellus Shale acreage in the area. 

 

The Energy Marketing segment is comprised of NFR’s operations. NFR markets natural gas to industrial, wholesale, commercial, public authority and residential customers primarily in western and central New York and northwestern Pennsylvania, offering competitively priced natural gas for its customers.

 

The data presented in the tables below reflect financial information for the segments and reconciliations to consolidated amounts. The accounting policies of the segments are the same as those described in Note A — Summary of Significant Accounting Policies. Sales of products or services between segments are billed at regulated rates or at market rates, as applicable. 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.

 

 

Year Ended September 30, 2012

 

 

 

 

 

 

 

 Utility

 

Pipeline

and

Storage

 

 Exploration

and

  Production

 

 

Energy

Marketing

 

Total

Reportable

Segments

 

 

  All

  Other

Corporate

and

Intersegment

Eliminations

 

 

Total

Consolidated

 

(Thousands)

Revenue from External Customers(1)

$
704,518 
$
172,312 
$
558,180 
$
186,579 
$
1,621,589 
$
4,307 
$
957 
$
1,626,853 

Intersegment Revenues.....................

$
14,604 
$
86,963 

$              —

$
1,425 
$
102,992 
$
16,771 
$
(119,763)

$

Interest Income......................................

$
2,765 
$
199 
$
1,493 
$
188 
$
4,645 
$
175 
$
(1,131)
$
3,689 

Interest Expense....................................

$
33,181 
$
25,603 
$
29,243 
$
41 
$
88,068 
$
1,738 
$
(3,566)
$
86,240 

Depreciation, Depletion and Amortization

$
42,757 
$
38,182 
$
187,624 
$
90 
$
268,653 
$
2,091 
$
786 
$
271,530 

Income Tax Expense (Benefit)........

$
29,110 
$
37,655 
$
79,050 
$
1,933 
$
147,748 
$
4,335 
$
(1,529)
$
150,554 

Segment Profit: Net Income (Loss)

$
58,590 
$
60,527 
$
96,498 
$
4,169 
$
219,784 
$
6,868 
$
(6,575)
$
220,077 

Expenditures for Additions to Long-Lived Assets

$
58,284 
$
144,167 
$
693,810 
$
770 
$
897,031 
$
80,017 
$
346 
$
977,394 

 

 

 

At September 30, 2012

 

(Thousands)

Segment Assets.........................

$
2,070,413 
$
1,243,862 
$
2,367,485 
$
61,968 
$
5,743,728 
$
209,934 
$
(18,520)
$
5,935,142 

 

 

Year Ended September 30, 2011

 

 

 

 

 

 

 

 Utility

 

Pipeline

and

Storage

 

 Exploration

and

  Production

 

 

Energy

Marketing

 

Total

Reportable

Segments

 

 

  All

  Other

Corporate

and

Intersegment

Eliminations

 

 

Total

Consolidated

 

(Thousands)

Revenue from External Customers(1)

$
835,853 
$
134,071 
$
519,035 
$
284,546 
$
1,773,505 
$
4,401 
$
936 
$
1,778,842 

Intersegment Revenues.....................

$
16,642 
$
81,037 

$             

$
420 
$
98,099 
$
10,017 
$
(108,116)

$

Interest Income......................................

$
2,049 
$
324 
$
(27)
$
104 
$
2,450 
$
247 
$
219 
$
2,916 

Interest Expense....................................

$
34,440 
$
25,737 
$
17,402 
$
20 
$
77,599 
$
2,173 
$
(1,651)
$
78,121 

Depreciation, Depletion and Amortization

$
40,808 
$
37,266 
$
146,806 
$
47 
$
224,927 
$
840 
$
760 
$
226,527 

Income Tax Expense (Benefit)........

$
33,325 
$
19,854 
$
89,034 
$
4,489 
$
146,702 
$
18,961 
$
(1,282)
$
164,381 

Gain on Sale of Unconsolidated Subsidiaries

 

$

 

$

 

$                          

 

$

 

$

 

$50,879(2)

$

$
50,879 

Segment Profit: Net Income (Loss)

$
63,228 
$
31,515 
$
124,189 
$
8,801 
$
227,733 
$
38,502 
$
(7,833)
$
258,402 

Expenditures for Additions to Long-Lived Assets

$
58,398 
$
129,206 
$
648,815 
$
460 
$
836,879 
$
17,022 
$
285 
$
854,186 

 

 

At September 30, 2011

 

(Thousands)

Segment Assets.........................

$
2,001,546 
$
1,112,494 
$
1,885,014 
$
71,138 
$
5,070,192 
$
166,730 
$
(15,838)
$
5,221,084 

 

 

Year Ended September 30, 2010

 

 

 

 

 

 

 

   Utility

 

 Pipeline

 and

 Storage

 

 Exploration

and

 Production

 

 

Energy

Marketing

 

Total

Reportable

Segments

 

 

All

Other

Corporate

and

Intersegment

Eliminations

 

 

Total

Consolidated

 

(Thousands)

Revenue from External Customers(1)

$
804,466 
$
138,905 
$
438,028 
$
344,802 
$
1,726,201 
$
33,428 
$
874 
$
1,760,503 

Intersegment Revenues.....................

$
15,324 
$
79,978 

$                         

$

$
95,302 
$
2,315 
$
(97,617)

$              —

Interest Income......................................

$
2,144 
$
199 
$
980 
$
44 
$
3,367 
$
137 
$
225 
$
3,729 

Interest Expense....................................

$
35,831 
$
26,328 
$
30,853 
$
27 
$
93,039 
$
2,152 
$
(1,245)
$
93,946 

Depreciation, Depletion and Amortization

$
40,370 
$
35,930 
$
106,182 
$
42 
$
182,524 
$
7,907 
$
768 
$
191,199 

Income Tax Expense (Benefit)........

$
31,858 
$
22,634 
$
78,875 
$
4,806 
$
138,173 
$
464 
$
(1,410)
$
137,227 

Segment Profit: Income (Loss) from Continuing Operations

$
62,473 
$
36,703 
$
112,531 
$
8,816 
$
220,523 
$
3,396 
$
(4,786)
$
219,133 

Expenditures for Additions to Long-Lived Assets from Continuing Operations

$
57,973 
$
37,894 
$
398,174 
$
407 
$
494,448 
$
6,694 
$
210 
$
501,352 

 

 

At September 30, 2010

 

(Thousands)

Segment Assets...........................

$
2,027,101 
$
1,080,772 
$
1,539,705 
$
69,561 
$
4,717,139 
$
198,706 
$
131,209 
$
5,047,054 

 

 

(1)

All Revenue from External Customers originated in the United States.

 

 

(2)

In February 2011, the Company sold its 50% equity method investments in Seneca Energy and Model City for $59.4 million, resulting in a gain of $50.9 million.

 

 

 

 

 

 

 

 

 

Geographic Information

At September 30

 

2012

2011

2010

 

(Thousands)

Long-Lived Assets:

United States.......................................................................................................................................................

$
5,579,566 
$
4,809,183 
$
4,238,253 

 

 

 

Quarterly Financial Data
Quarterly Financial Data

Note L — Quarterly Financial Data (unaudited)

 

In the opinion of management, the following quarterly information includes all adjustments necessary for a fair statement of the results of operations for such periods. Per common share amounts are calculated using the weighted average number of shares outstanding during each quarter. The total of all quarters may differ from the per common share amounts shown on the Consolidated Statements of Income. Those per common share amounts are based on the weighted average number of shares outstanding for the entire fiscal year. Because of the seasonal nature of the Company’s heating business, there are substantial variations in operations reported on a quarterly basis.

 

 

 

 

 

 

 

 

Net Income

Earnings per

Quarter

Operating

Operating

Available for

Common Share

Ended

Revenues

Income

Common Stock

Basic

Diluted

 

(Thousands, except per common share amounts)

2012

9/30/2012.........................................................................................

$
313,261 
$
107,265 

$48,802(1)

$
0.59 
$
0.58 

6/30/2012.........................................................................................

$
328,861 
$
90,293 
$
43,184 
$
0.52 
$
0.52 

3/31/2012.........................................................................................

$
552,308 
$
132,097 

$67,392(2)

$
0.81 
$
0.81 

12/31/2011.......................................................................................

$
432,423 
$
118,394 
$
60,699 
$
0.73 
$
0.73 

2011

9/30/2011.........................................................................................

$
286,034 
$
75,191 
$
37,356 
$
0.45 
$
0.45 

6/30/2011.........................................................................................

$
380,979 
$
94,805 
$
46,891 
$
0.57 
$
0.56 

3/31/2011.........................................................................................

$
660,881 
$
153,756 

$115,611(3)

$
1.40 
$
1.38 

12/31/2010......................................................................................

$
450,948 
$
117,410 
$
58,544 
$
0.71 
$
0.70 

 

 

(1)

 

 

(2)

 

 

(3)

Includes $12.8 million of income associated with the elimination of Supply Corporation’s post-retirement regulatory liability as specified in Supply Corporation’s rate case settlement.

 

Includes a $4.0 million accrual of a natural gas impact fee related to wells drilled prior to 2012 that was first imposed by Pennsylvania in 2012.  This fee was recorded in the Exploration and Production segment.

 

Includes a $31.4 million after tax gain on the sale of the Company’s 50% equity method investments in Seneca Energy and Model City.

 

 

Supplementary Information For Oil And Gas Producing Activities
Supplementary Information For Oil And Gas Producing Activities

Note N — Supplementary Information for Oil and Gas Producing Activities (unaudited)

 

As of September 30, 2010, the Company adopted the revisions to authoritative guidance related to oil and gas exploration and production activities that aligned the reserve estimation and disclosure requirements with the requirements of the SEC Modernization of Oil and Gas Reporting rule, which the Company also adopted. The SEC rules require companies to value their year-end reserves using 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.

 

The following supplementary information is presented in accordance with the authoritative guidance regarding disclosures about oil and gas producing activities and related SEC accounting rules. All monetary amounts are expressed in U.S. dollars.  As discussed in Note A, the Company completed the sale of its off-shore oil and natural gas properties in the Gulf of Mexico in April 2011.  With the completion of this sale, the Company no longer has any off-shore oil and gas properties.

 

Capitalized Costs Relating to Oil and Gas Producing Activities

 

 

At September 30

 

2012

2011

 

(Thousands)

Proved Properties(1).....................................................................................................................................................................

$
2,789,181 
$
2,010,662 

Unproved Properties.....................................................................................................................................................................

146,084 
226,276 

 

2,935,265 
2,236,938 

Less — Accumulated Depreciation, Depletion and Amortization.............................................................................

681,798 
499,671 

 

$
2,253,467 
$
1,737,267 

 

 

 

(1)

Includes asset retirement costs of $43.1 million and  $32.7 million at September 30, 2012 and 2011, respectively.

 

Costs related to unproved properties are excluded from amortization until proved reserves are found or it is determined that the unproved properties are impaired. 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. Although the timing of the ultimate evaluation or disposition of the unproved properties cannot be determined, the Company expects the majority of its acquisition costs associated with unproved properties to be transferred into the amortization base by 2020.  It expects the majority of its development and exploration costs associated with unproved properties to be transferred into the amortization base by 2014 or 2015.  Following is a summary of costs excluded from amortization at September 30, 2012:

 

 

Total

 

 

as of

 

 

September 30,

Year Costs Incurred

 

2012

2012

2011

2010

Prior

 

(Thousands)

Acquisition Costs..............................................................................................................

$
87,280 
$
6,195 

$

$
69,206 
$
11,879 

Development Costs........................................................................................................

21,947 
15,225 
6,722 

Exploration Costs.............................................................................................................

33,891 
33,891 

Capitalized Interest..........................................................................................................

2,966 
2,966 

 

$
146,084 
$
58,277 
$
6,722 
$
69,206 
$
11,879 

 

 

Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development Activities 

 

 

    Year Ended September 30

 

2012

   2011

2010

United States

(Thousands)

Property Acquisition Costs:

Proved..........................................................................................................................................................................

$
13,095 
$
28,838 
$
790 

Unproved....................................................................................................................................................................

13,867 
20,012 
80,221 

Exploration Costs (1).............................................................................................................................................

84,624 
62,651 

        75,155

Development Costs (2)........................................................................................................................................

576,397 
531,372 
234,094 

Asset Retirement Costs......................................................................................................................................

10,344 
12,087 
3,901 

 

$
698,327 
$
654,960 
$
394,161 

 

 

 

 

(1)

Amounts for 2012, 2011 and 2010 include capitalized interest of $1.0 million, $0.8 million and $0.2 million, respectively. 

 

 

(2)

Amounts for 2012, 2011 and 2010 include capitalized interest of $2.0 million, $0.7 million and $0.9 million, respectively. 

 

For the years ended September 30, 2012, 2011 and 2010, the Company spent  $216.6 million, $199.2 million and $28.9 million, respectively, developing proved undeveloped reserves. 

 

Results of Operations for Producing Activities

 

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands, except per Mcfe amounts)

United States

Operating Revenues:

Natural Gas (includes revenues from sales to affiliates of $1, $23 and $253,  

respectively)

$
181,544 
$
223,648 
$
152,163 

Oil, Condensate and Other Liquids...................................................................................................................

307,018 
273,952 
233,569 

Total Operating Revenues(1)...............................................................................................................................

488,562 
497,600 
385,732 

Production/Lifting Costs........................................................................................................................................

83,361 
73,250 
61,398 

Franchise/Ad Valorem Taxes...............................................................................................................................

23,620 
12,179 
10,592 

Accretion Expense...................................................................................................................................................

3,084 
3,668 
5,444 

Depreciation, Depletion and Amortization ($2.19, $2.12 and $2.10 per Mcfe of production)

182,759 
143,372 
104,092 

Income Tax Expense .............................................................................................................................................

81,904 
110,117 
83,946 

Results of Operations for Producing Activities (excluding corporate overheads and interest charges)

$
113,834 
$
155,014 
$
120,260 

 

 

(1)

Exclusive of hedging gains and losses. See further discussion in Note G — Financial Instruments.

 

 

 

Reserve Quantity Information

 

The Company's proved oil and gas reserve estimates are prepared by the Company's reservoir engineers who meet the qualifications of Reserve Estimator per the "Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserve Information" promulgated by the Society of Petroleum Engineers as of February 19, 2007.  The Company maintains comprehensive internal reserve guidelines and a continuing education program designed to keep its staff up to date with current SEC regulations and guidance.

 

The Company's Vice President of Reservoir Engineering is the primary technical person responsible for overseeing the Company's reserve estimation process and engaging and overseeing the third party reserve audit. His qualifications include a Bachelor of Science Degree in Petroleum Engineering and over 25 years of Petroleum Engineering experience with both major and independent oil and gas companies. He has maintained oversight of the Company's reserve estimation process for the past nine years. He is a member of the Society of Petroleum Engineers and a Registered Professional Engineer in the State of Texas.  

The Company maintains a system of internal controls over the reserve estimation process.  Management reviews the price, heat content, lease operating cost and future investment assumptions used in the economic model that determines the reserves.  The Vice President of Reservoir Engineering reviews and approves all new reserve assignments and significant reserve revisions.  Access to the Reserve database is restricted.  Significant changes to the reserve report are reviewed by senior management on a quarterly basis. Periodically, the Company's internal audit department assesses the design of these controls and performs testing to determine the effectiveness of such controls.

 

All of the Company's reserve estimates are audited annually by Netherland, Sewell and Associates, Inc. (NSAI). Since 1961, NSAI has evaluated gas and oil properties and independently certified petroleum reserve quantities in the United States and internationally under the Texas Board of Professional Engineers Registration No. F-002699.  The primary technical persons (employed by NSAI) that are responsible for leading the audit include a professional engineer registered with the State of Texas (with 14 years of experience in petroleum engineering and consulting at NSAI since 2004) and a professional geoscientist registered in the State of Texas (with 15 years of experience in petroleum geosciences and consulting at NSAI since 2008).  NSAI was satisfied with the methods and procedures used by the Company to prepare its reserve estimates at September 30, 2012 and did not identify any problems which would cause it to take exception to those estimates.

 

The reliable technologies that were utilized in estimating the reserves include wire line open-hole log data, performance data, log cross sections, core data, 2D and 3D seismic data and statistical analysis.  The statistical method utilized production performance from both the Company's and competitors’ wells.  Geophysical data include data from the Company's wells, published documents, and state data-sites, and 2D and 3D seismic data.  These were used to confirm continuity of the formation.

 

 

 

 

Gas MMcf

 

U. S.

 

 

 

 

 

Appalachian

Region

 

West

Coast

Region

 

Gulf Coast

Region

 

Total

Company      

Proved Developed and Undeveloped Reserves:

 

September 30, 2009..................................................................................................................................

149,828 

 

72,959 
26,167 
248,954 

Extensions and Discoveries.................................................................................................................

189,979 
(1)
269 
2,881 
193,129 

Revisions of Previous Estimates......................................................................................................

7,677 

 

2,315 
6,683 
16,675 

Production......................................................................................................................................................

(16,222)
(2)
(3,819)
(10,304)
(30,345)

September 30, 2010..................................................................................................................................

331,262 

 

71,724 
25,427 
428,413 

Extensions and Discoveries.................................................................................................................

249,047 
(1)
195 
158 
249,400 

Revisions of Previous Estimates......................................................................................................

24,486 

 

526 
1,373 
26,385 

Production......................................................................................................................................................

(42,979)
(2)
(3,447)
(4,041)
(50,467)

Purchases of Minerals in Place...........................................................................................................

44,790 

 

44,790 

Sales of Minerals in Place......................................................................................................................

 

(682)
(22,917)
(23,599)

September 30, 2011..................................................................................................................................

606,606 

 

68,316 

674,922 

Extensions and Discoveries.................................................................................................................

435,460 
(1)
638 

436,098 

Revisions of Previous Estimates......................................................................................................

(53,992)

 

(2,463)

(56,455)

Production......................................................................................................................................................

(62,663)
(2)
(3,468)

(66,131)

September 30, 2012..................................................................................................................................

925,411 

 

63,023 

988,434 

 

 

 

 

 

 

Proved Developed Reserves:

 

September 30, 2009..................................................................................................................................

120,579 

 

67,603 
18,051 
206,233 

September 30, 2010..................................................................................................................................

210,817 

 

66,178 
19,293 
296,288 

September 30, 2011..................................................................................................................................

350,458 

 

63,965 

414,423 

September 30, 2012..................................................................................................................................

544,560 

 

59,923 

604,483 

Proved Undeveloped Reserves:

 

September 30, 2009..................................................................................................................................

29,249 

 

5,356 
8,116 
42,721 

September 30, 2010..................................................................................................................................

120,445 

 

5,546 
6,134 
132,125 

September 30, 2011..................................................................................................................................

256,148 

 

4,351 

260,499 

September 30, 2012..................................................................................................................................

380,851 

 

3,100 

383,951 

 

 

(1)

Extensions and discoveries include 182 Bcf (during 2010), 249 Bcf (during 2011) and 435 Bcf (during 2012), of Marcellus Shale gas in the Appalachian Region.

 

 

(2)

Production includes 7,180 MMcf (during 2010), 35,356 MMcf (during 2011) and 55,812 MMcf (during 2012), from Marcellus Shale fields (which exceed 15% of total reserves). 

 

 

Oil Mbbl

 

         U. S.

 

 

 

 

 

Appalachian

Region

     West

     Coast

     Region

   Gulf

  Coast

  Region

 

Total

Company      

Proved Developed and Undeveloped Reserves:

September 30, 2009.........................................................................................................................................

311 
44,824 
1,452 
46,587 

Extensions and Discoveries........................................................................................................................

828 
222 
1,054 

Revisions of Previous Estimates.............................................................................................................

484 
332 
818 

Production.............................................................................................................................................................

(49)

(2,669)(1)

(502)
(3,220)

September 30, 2010.........................................................................................................................................

268 
43,467 
1,504 
45,239 

Extensions and Discoveries........................................................................................................................

10 
756 
767 

Revisions of Previous Estimates.............................................................................................................

46 
1,909 
(339)
1,616 

Production.............................................................................................................................................................

(45)
(2,628)
(187)
(2,860)

Sales of Minerals in Place.............................................................................................................................

(438)
(979)
(1,417)

September 30, 2011.........................................................................................................................................

279 
43,066 

43,345 

Extensions and Discoveries........................................................................................................................

28 
1,229 

1,257 

Revisions of Previous Estimates.............................................................................................................

35 
1,095 

1,130 

Production.............................................................................................................................................................

(36)
(2,834)

(2,870)

September 30, 2012.........................................................................................................................................

306 
42,556 

42,862 

 

 

 

 

 

Proved Developed Reserves:

September 30, 2009.........................................................................................................................................

285 
37,711 
1,194 
39,190 

September 30, 2010.........................................................................................................................................

263 
36,353 
1,066 
37,682 

September 30, 2011.........................................................................................................................................

274 
37,306 

    —

37,580 

September 30, 2012.........................................................................................................................................

306 
38,138 

    —

38,444 

Proved Undeveloped Reserves:

September 30, 2009.........................................................................................................................................

26 
7,113 
258 
7,397 

September 30, 2010.........................................................................................................................................

7,114 
438 
7,557 

September 30, 2011.........................................................................................................................................

5,760 

    —

5,765 

September 30, 2012.........................................................................................................................................

4,418 

    —

4,418 

 

 

(1)

The Midway Sunset North fields (which exceeded 15% of total reserves at September 30, 2010) contributed 1,543 Mbbls of production during 2010. As of September 30, 2012 and 2011, the Midway Sunset North fields were below 15% of total reserves.

 

The Company’s proved undeveloped (PUD) reserves increased from 295 Bcfe at September 30, 2011 to 410 Bcfe at September 30, 2012. PUD reserves in the Marcellus Shale increased from 253 Bcf at September 30, 2011 to 381 Bcf at September 30, 2012. There was a material increase in PUD reserves at September 30, 2012 and 2011 as a result of Marcellus Shale reserve additions.  The Company’s total PUD reserves are 33% of total proved reserves at September 30, 2012, up from 32% of total proved reserves at September 30, 2011.

 

The Company’s proved undeveloped (PUD) reserves increased from 177 Bcfe at September 30, 2010 to 295 Bcfe at September 30, 2011. PUD reserves in the Marcellus Shale increased from 110 Bcf at September 30, 2010 to 253 Bcf at September 30, 2011. There was a material increase in PUD reserves at September 30, 2011 and 2010 as a result of Marcellus Shale reserve additions.  The Company’s total PUD reserves are 32% of total proved reserves at September 30, 2011, up from 25% of total proved reserves at September 30, 2010.

 

The increase in PUD reserves in 2012 of 115 Bcfe is a result of 289 Bcfe in new PUD reserve additions (286 Bcfe from the Marcellus Shale), offset by 97 Bcfe in PUD conversions to proved developed reserves, and 77 Bcfe in downward PUD revisions of previous estimates. The downward revisions were primarily from the removal of proved locations in the Marcellus Shale due to a significant decrease in trailing twelve-month average gas prices at Dominion South Point.  The decrease in prices made the reserves uneconomic to develop.  Of these downward revisions, the majority (66 Bcfe) were related to non-operated Marcellus activity, primarily in Clearfield County.

 

The increase in PUD reserves in 2011 of 118 Bcfe is a result of 212 Bcfe in new PUD reserve additions (209 Bcfe from the Marcellus Shale), offset by 83 Bcfe in PUD conversions to proved developed reserves, 10 Bcfe from sales of minerals in place and 2 Bcfe in downward PUD revisions of previous estimates. The downward revisions were primarily from the removal of proved locations in the Upper Devonian play.  These locations are unlikely to be developed within a 5-year timeframe due to the Company’s focus on the Marcellus Shale and the better economic results there.

 

The Company is committed to developing its PUD reserves within five years as required by the SEC’s final rule on Modernization of Oil and Gas Reporting.  In 2013, the Company estimates that it will invest approximately $160 million to develop its PUD reserves.  The Company invested $217 million during the year ended September 30, 2012 to convert 97 Bcfe of September 30, 2011 PUD reserves to proved developed reserves.  This represents 33% of the PUD reserves booked at September 30, 2011.  The Company invested $146 million during the year ended September 30, 2011 to convert 83 Bcfe of September 30, 2010 PUD reserves to proved developed reserves.  This represented 47% of the PUD reserves booked at September 30, 2010.  The Company invested an additional $53 million during the year ended September 30, 2011 to develop the additional working interests in Covington area PUD wells that were acquired from EOG Resources during fiscal 2011.

 

At September 30, 2012, the Company does not have a material concentration of proved undeveloped reserves that have been on the books for more than five years at the corporate level or country level. All of the Company's proved reserves are in the United States. At the field level, only at the North Lost Hills Field in Kern County, California, does the Company have a material concentration of PUD reserves that have been on the books for more than five years. The Company has reduced the concentration of PUD reserves in this field from 44% of total field level proved reserves at September 30, 2007 to 16% of total field level proved reserves at September 30, 2012.  The PUD reserves in this field represent less than 1% of the Company's proved reserves at the corporate level. The economics of this project remain strong and the steam-flood project here is performing well. Drilling of the remaining proved undeveloped locations in this field is scheduled over the next three years as steam generation capacity is increased and the steam-flood here matures.

 

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves

 

The Company cautions that the following presentation of the standardized measure of discounted future net cash flows is intended to be neither a measure of the fair market value of the Company’s oil and gas properties, nor an estimate of the present value of actual future cash flows to be obtained as a result of their development and production. It is based upon subjective estimates of proved reserves only and attributes no value to categories of reserves other than proved reserves, such as probable or possible reserves, or to unproved acreage. Furthermore, as a result of the SEC’s final rule on Modernization of Oil and Gas Reporting (effective fiscal 2010), it is based on the 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 and costs adjusted only for existing contractual changes. It assumes an arbitrary discount rate of 10%. Thus, it gives no effect to future price and cost changes certain to occur under widely fluctuating political and economic conditions.

 

The standardized measure is intended instead to provide a means for comparing the value of the Company’s proved reserves at a given time with those of other oil- and gas-producing companies than is provided by a simple comparison of raw proved reserve quantities.

 

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands)

United States

Future Cash Inflows.........................................................................................................................................

$
7,373,129 
$
7,180,320 
$
5,273,605 

Less:

Future Production Costs................................................................................................................................

1,919,530 
1,555,603 
1,347,855 

Future Development Costs..........................................................................................................................

619,573 
636,745 
445,413 

Future Income Tax Expense at Applicable Statutory Rate............................................................

1,812,055 
1,834,778 
1,186,567 

Future Net Cash Flows...................................................................................................................................

3,021,971 
3,153,194 
2,293,770 

Less:

10% Annual Discount for Estimated Timing of Cash Flows..........................................................

1,552,180 
1,629,037 
1,120,182 

Standardized Measure of Discounted Future Net Cash Flows.....................................................

$
1,469,791 
$
1,524,157 
$
1,173,588 

 

The principal sources of change in the standardized measure of discounted future net cash flows were as follows:

 

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands)

United States

Standardized Measure of Discounted Future

Net Cash Flows at Beginning of Year................................................................................................

$
1,524,157 
$
1,173,588 
$
875,977 

Sales, Net of Production Costs............................................................................................................

(381,581)
(412,172)
(313,742)

Net Changes in Prices, Net of Production Costs.........................................................................

(385,019)
404,445 
176,530 

Purchases of Minerals in Place.............................................................................................................

52,697 

Sales of Minerals in Place........................................................................................................................

(73,633)

Extensions and Discoveries...................................................................................................................

224,474 
218,140 
329,555 

Changes in Estimated Future Development Costs.....................................................................

29,627 
(85,191)
(17,353)

Previously Estimated Development Costs Incurred...................................................................

252,967 
168,275 
47,539 

Net Change in Income Taxes at Applicable Statutory Rate.....................................................

(19,280)
(249,773)
(85,703)

Revisions of Previous Quantity Estimates.....................................................................................

103,472 
124,545 
46,246 

Accretion of Discount and Other..........................................................................................................

120,974 
203,236 
114,539 

Standardized Measure of Discounted Future Net Cash Flows at End of Year...............

$
1,469,791 
$
1,524,157 
$
1,173,588 

 

Valuation And Qualifying Accounts
Valuation And Qualifying Accounts

Schedule II — Valuation and Qualifying Accounts

 

 

 

 

 

 

Description

 

Balance

at

Beginning

of

Period

Additions

Charged

to

Costs

and

Expenses

 

Additions

Charged

to

Other

Accounts(1)

 

 

 

 

 

Deductions(2)

 

Balance

at

End

of

Period

Year Ended September 30, 2012

Allowance for Uncollectible Accounts.......................................................................

$
31,039 
$
9,183 
$
1,946 
$
11,851 
$
30,317 

Year Ended September 30, 2011

Allowance for Uncollectible Accounts.......................................................................

$
30,961 
$
11,974 
$
2,484 
$
14,380 
$
31,039 

Year Ended September 30, 2010

Allowance for Uncollectible Accounts.......................................................................

$
38,334 
$
15,422 
$
2,268 
$
25,063 
$
30,961 

 

 

 

 

(1)

Represents the discount on accounts receivable purchased in accordance with the Utility segment’s 2005 New York rate agreement.

 

 

(2)

Amounts represent net accounts receivable written-off.

 

Summary Of Significant Accounting Policies (Policy)

Principles of Consolidation

 

The Company consolidates all entities in which it has a controlling financial interest.  The equity method is used to account for entities in which the Company has a non-controlling financial interest. All significant intercompany balances and transactions are eliminated. The Company uses proportionate consolidation when accounting for drilling arrangements related to oil and gas producing properties accounted for under the full cost method of accounting.

 

During the quarter ended March 31, 2011, the Company sold its 50% equity method investments in Seneca Energy and Model City for $59.4 million, resulting in a gain of $50.9 million.  Seneca Energy and Model City generate and sell electricity using methane gas obtained from landfills owned by outside parties.

 

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.  This includes the reclassification of $63.7 million from Other Regulatory Liabilities to Other Regulatory Assets on the Consolidated Balance Sheet at September 30, 2011.  This reclassification pertains to pension and post-retirement benefit regulatory asset and regulatory liability balances.  The Company has switched from a “gross” presentation to a “net” presentation, which is consistent with the methodology used by the various regulators in analyzing such regulatory asset and liability balances.  This reclassification did not impact the Consolidated Statement of Income and there was an immaterial impact to the Consolidated Statement of Cash Flows

The Company also reclassified $26.6 million from Other Regulatory Assets to Other Current Assets and $13.8 million from Other Regulatory Liabilities to Other Accruals and Current Liabilities on the Consolidated Balance Sheet at September 30, 2011.  The reclassification was made to distinguish long-term regulatory assets and liabilities from current regulatory assets and liabilities.  Current regulatory assets are defined as assets recoverable from ratepayers over a twelve-month period.  Current regulatory liabilities are defined as liabilities payable to ratepayers over a twelve-month period.  These reclassifications did not impact the Consolidated Statement of Income and there was an immaterial impact to the Consolidated Statement of Cash Flows.

Revisions  were made on the Consolidated Statement of Cash Flows for the years ended September 30, 2011 and September 30, 2010 to reflect non-cash investing activities embedded in Accounts Payable on the Consolidated Balance Sheets at September 30, 2011, September 30, 2010 and September 30, 2009.  These revisions reduced the cash inflow related to Accounts Payable for the years ended September 30, 2011 and September 30, 2010 by $16.7 million and $12.7 million, respectively, and reduced capital expenditures by the same amounts.  The effect of these revisions was to reduce Net Cash Provided by Operating Activities for the years ended September 30, 2011 and September 30, 2010 and to reduce Net Cash Used in Investing Activities for the years ended September 30, 2011 and September 30, 2010

 

Regulation

 

The Company is subject to regulation by certain state and federal authorities. The Company has accounting policies which conform to GAAP, as applied to regulated enterprises, and are in accordance with the accounting requirements and ratemaking practices of the regulatory authorities. Reference is made to Note C — Regulatory Matters for further discussion.

Revenue Recognition

 

The Company’s Utility segment records revenue as bills are rendered, except that service supplied but not billed is reported as unbilled utility revenue and is included in operating revenues for the year in which service is furnished.

 

The Company’s Energy Marketing segment records revenue as bills are rendered for service supplied on a monthly basis.

 

The Company’s Pipeline and Storage segment records revenue for natural gas transportation and storage services. Revenue from reservation charges on firm contracted capacity is recognized through equal monthly charges over the contract period regardless of the amount of gas that is transported or stored. Commodity charges on firm contracted capacity and interruptible contracts are recognized as revenue when physical deliveries of natural gas are made at the agreed upon delivery point or when gas is injected or withdrawn from the storage field. The point of delivery into the pipeline or injection or withdrawal from storage is the point at which ownership and risk of loss transfers to the buyer of such transportation and storage services.

 

The Company’s Exploration and Production segment records revenue based on entitlement, which means that revenue is recorded based on the actual amount of gas or oil that is delivered to a pipeline and the Company’s ownership interest in the producing well. If a production imbalance occurs between what was supposed to be delivered to a pipeline and what was actually produced and delivered, the Company accrues the difference as an imbalance.

Allowance for Uncollectible Accounts

 

The allowance for uncollectible accounts is the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable. The allowance is determined based on historical experience, the age and other specific information about customer accounts. Account balances are charged off against the allowance twelve months after the account is final billed or when it is anticipated that the receivable will not be recovered.

Regulatory Mechanisms

 

The Company’s rate schedules in the Utility segment contain clauses that permit adjustment of revenues to reflect price changes from the cost of purchased gas included in base rates. Differences between amounts currently recoverable and actual adjustment clause revenues, as well as other price changes and pipeline and storage company refunds not yet includable in adjustment clause rates, are deferred and accounted for as either unrecovered purchased gas costs or amounts payable to customers. Such amounts are generally recovered from (or passed back to) customers during the following fiscal year.

 

Estimated refund liabilities to ratepayers represent management’s current estimate of such refunds. Reference is made to Note C — Regulatory Matters for further discussion.

 

The impact of weather on revenues in the Utility segment’s New York rate jurisdiction is tempered by a WNC, which covers the eight-month period from October through May. The WNC is designed to adjust the rates of retail customers to reflect the impact of deviations from normal weather. Weather that is warmer than normal results in a surcharge being added to customers’ current bills, while weather that is colder than normal results in a refund being credited to customers’ current bills. Since the Utility segment’s Pennsylvania rate jurisdiction does not have a WNC, weather variations have a direct impact on the Pennsylvania rate jurisdiction’s revenues.

 

The impact of weather normalized usage per customer account in the Utility segment’s New York rate jurisdiction is tempered by a revenue decoupling mechanism. The effect of the revenue decoupling mechanism is to render the Company financially indifferent to throughput decreases resulting from conservation. Weather normalized usage per account that exceeds the average weather normalized usage per customer account results in a refund being credited to customers’ bills. Weather normalized usage per account that is below the average weather normalized usage per account results in a surcharge being added to customers’ bills. The surcharge or credit is calculated over a twelve-month period ending December 31st, and applied to customer bills annually, beginning March 1st.

 

In the Pipeline and Storage segment, the allowed rates that Supply Corporation and Empire bill their customers are based on a straight fixed-variable rate design, which allows recovery of all fixed costs, including return on equity and income taxes, through fixed monthly reservation charges. Because of this rate design, changes in throughput due to weather variations do not have a significant impact on the revenues of Supply Corporation or Empire. 

Property, Plant and Equipment

 

The principal assets of the Utility and Pipeline and Storage segments, consisting primarily of gas plant in service, are recorded at the historical cost when originally devoted to service in the regulated businesses, as required by regulatory authorities.

 

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. 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.

 

In April 2011, the Company completed the sale of its off-shore oil and natural gas properties in the Gulf of Mexico.  The Company received net proceeds of $55.4 million from this sale.  The Company also eliminated the asset retirement obligation associated with its off-shore oil and gas properties.  This obligation amounted to $37.5 million and was accounted for as a reduction of capitalized costs under the full cost method of accounting for oil and natural gas properties as well as a reduction of the asset retirement obligation.  Asset retirement obligations are discussed further in Note B – Asset Retirement Obligations.

 

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. In adjusting estimated future net cash flows for hedging under the ceiling test at September 30, 2012, 2011, and 2010, estimated future net cash flows were increased by $128.4 million,  $35.4 million and $65.4 million, respectively.  At September 30, 2012, the ceiling exceeded the book value of the oil and gas properties by approximately $55.3 million.

 

Maintenance and repairs of property and replacements of minor items of property are charged directly to maintenance expense. The original cost of the regulated subsidiaries’ property, plant and equipment retired, and the cost of removal less salvage, are charged to accumulated depreciation.

 

Depreciation, Depletion and Amortization

 

For oil and gas properties, depreciation, depletion and amortization is computed based on quantities produced in relation to proved reserves using the units of production method. The cost of unproved oil and gas properties is excluded from this computation. In the All Other category, for timber properties, depletion, determined on a property by property basis, is charged to operations based on the actual amount of timber cut in relation to the total amount of recoverable timber. For all other property, plant and equipment, depreciation, depletion and amortization is computed using the straight-line method in amounts sufficient to recover costs over the estimated service lives of property in service. The following is a summary of depreciable plant by segment:

 

 

As of September 30

 

2012

2011

 

(Thousands)

Utility...................................................................................................................................................................................................

$
1,737,645 
$
1,695,702 

Pipeline and Storage.....................................................................................................................................................................

1,406,433 
1,260,301 

Exploration and Production........................................................................................................................................................

2,828,358 
2,042,225 

Energy Marketing...........................................................................................................................................................................

2,865 
2,095 

All Other and Corporate...............................................................................................................................................................

196,593 
127,291 

 

$
6,171,894 
$
5,127,614 

 

Average depreciation, depletion and amortization rates are as follows:

 

 

Year Ended September 30

 

2012

2011

2010

Utility............................................................................................................................................................................................

2.6% 
2.6% 
2.6% 

Pipeline and Storage..............................................................................................................................................................

2.9% 
3.1% 
3.0% 

Exploration and Production, per Mcfe(1)......................................................................................................................

$
2.25 
$
2.17 
$
2.14 

Energy Marketing....................................................................................................................................................................

3.6% 
2.5% 
2.9% 

All Other and Corporate........................................................................................................................................................

1.8% 
1.3% 
6.8% 

 

 

(1)

 Amounts include depletion of oil and gas producing properties as well as depreciation of fixed assets. As disclosed in Note N — Supplementary Information for Oil and Gas Producing Properties, depletion of oil and gas producing properties amounted to $2.19, $2.12 and $2.10 per Mcfe of production in 2012, 2011 and 2010, respectively.

Goodwill

 

The Company has recognized goodwill of $5.5 million as of September 30, 2012 and 2011 on its Consolidated Balance Sheets related to the Company’s acquisition of Empire in 2003. The Company accounts for goodwill in accordance with the current authoritative guidance, which requires the Company to test goodwill for impairment annually. At September 30, 2012, 2011 and 2010, the fair value of Empire was greater than its book value. As such, the goodwill was not considered impaired at those dates. Going back to the origination of the goodwill in 2003, the Company has never recorded an impairment of its goodwill balance.

Financial Instruments

 

Unrealized gains or losses from the Company’s investments in an equity mutual fund and the stock of an insurance company (securities available for sale) are recorded as a component of accumulated other comprehensive income (loss). Reference is made to Note G — Financial Instruments for further discussion.

 

The Company uses a variety of derivative financial instruments to manage a portion of the market risk associated with fluctuations in the price of natural gas and crude oil. These instruments include price swap agreements and futures contracts. The Company accounts for these instruments as either cash flow hedges or fair value hedges. In both cases, the fair value of the instrument is recognized on the Consolidated Balance Sheets as either an asset or a liability labeled Fair Value of Derivative Financial Instruments. Reference is made to Note F — Fair Value Measurements for further discussion concerning the fair value of derivative financial instruments.

 

For effective cash flow hedges, the offset to the asset or liability that is recorded is a gain or loss recorded in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. The gain or loss recorded in accumulated other comprehensive income (loss) remains there until the hedged transaction occurs, at which point the gains or losses are reclassified to operating revenues or purchased gas expense on the Consolidated Statements of Income. Any ineffectiveness associated with the cash flow hedges is recorded in the Consolidated Statements of Income.  The Company did not experience any material ineffectiveness with regard to its cash flow hedges during 2012, 2011 or 2010. 

 

For fair value hedges, the offset to the asset or liability that is recorded is a gain or loss recorded to operating revenues or purchased gas expense on the Consolidated Statements of Income. However, in the case of fair value hedges, the Company also records an asset or liability on the Consolidated Balance Sheets representing the change in fair value of the asset or firm commitment that is being hedged (see Other Current Assets section in this footnote). The offset to this asset or liability is a gain or loss recorded to operating revenues or purchased gas expense on the Consolidated Statements of Income as well. If the fair value hedge is effective, the gain or loss from the derivative financial instrument is offset by the gain or loss that arises from the change in fair value of the asset or firm commitment that is being hedged. The Company did not experience any material ineffectiveness with regard to its fair value hedges during 2012, 2011 or 2010.

Accumulated Other Comprehensive Income (Loss)

 

The components of Accumulated Other Comprehensive Income (Loss) are as follows:

 

 

Year Ended September 30

 

2012

2011

 

(Thousands)

Funded Status of the Pension and Other Post-Retirement Benefit Plans......................................................

$
(100,561)
$
(89,587)

Net Unrealized Gain (Loss) on Derivative Financial Instruments.......................................................................

(1,602)
40,979 

Net Unrealized Gain on Securities Available for Sale...............................................................................................

3,143 
909 

Accumulated Other Comprehensive Loss......................................................................................................................

$
(99,020)
$
(47,699)

 

At September 30, 2012, it is estimated that $10.6 million of unrealized gains on derivative financial instruments will be reclassified into the Consolidated Statement of Income during 2013 with  $12.2 million of unrealized losses on derivative financial instruments being reclassified into the Consolidated Statement of Income in subsequent years. These instruments, which are classified as cash flow hedges, extend out to 2017.

 

The amounts included in accumulated other comprehensive income (loss) related to the funded status of the Company’s pension and other post-retirement benefit plans consist of prior service costs and accumulated losses. The total amount for prior service credit  was $0.4 million and $0.5 million at September 30, 2012 and 2011, respectively. The total amount for accumulated losses was $100.9 million and  $90.0 million at September 30, 2012 and 2011, respectively.

Gas Stored Underground — Current

 

In the Utility segment, gas stored underground — current in the amount of $34.8 million is carried at lower of cost or market, on a LIFO method. Based upon the average price of spot market gas purchased in September 2012, including transportation costs, the current cost of replacing this inventory of gas stored underground — current exceeded the amount stated on a LIFO basis by approximately $46.0 million at September 30, 2012. All other gas stored underground — current, which is in the Energy Marketing segment, is carried at an average cost method, subject to lower of cost or market adjustments.

Unamortized Debt Expense

 

Costs associated with the issuance of debt by the Company are deferred and amortized over the lives of the related debt.

 

Costs associated with the reacquisition of debt related to rate-regulated subsidiaries are deferred and amortized over the remaining life of the issue or the life of the replacement debt in order to match regulatory treatment. At September 30, 2012, the remaining weighted average amortization period for such costs was approximately 4 years.

Income Taxes

 

The Company and its domestic subsidiaries file a consolidated federal income tax return. State tax returns are filed on a combined or separate basis depending on the applicable laws in the jurisdictions where tax returns are filed.  Investment tax credit, prior to its repeal in 1986, was deferred and is being amortized over the estimated useful lives of the related property, as required by regulatory authorities having jurisdiction.

Consolidated Statements of Cash Flows

 

For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of 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 September 30

   

2012

2011

2010

2009

 

(Thousands)

Non-cash Capital Expenditures.....................................................................................

$
52,557 
$
111,947 
$
78,632 
$
20,231 

 

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. At September 30, 2012, the Company had hedging collateral deposits of $0.4 million related to its exchange-traded futures contracts.  At September 30, 2011, the Company had hedging collateral deposits of $5.5 million related to its exchange-traded futures contracts and $14.2 million related to its over-the-counter crude oil swap agreements.  In accordance with its accounting policy, the Company does not offset hedging collateral deposits paid or received against related derivative financial instrument liability or asset balances.

Other Current Assets

 

The components of the Company’s Other Current Assets are as follows:

 

 

Year Ended September 30

 

2012

2011

 

(Thousands)

Prepayments................................................................................................................................................................................

$
8,316 
$
9,489 

Prepaid Property and Other Taxes.....................................................................................................................................

14,455 
13,240 

Federal Income Taxes Receivable.....................................................................................................................................

268 
385 

State Income Taxes Receivable.........................................................................................................................................

2,065 
6,124 

Fair Values of Firm Commitments.....................................................................................................................................

1,291 
9,096 

Regulatory Assets.....................................................................................................................................................................

29,726 
26,589 

 

$
56,121 
$
64,923 

 

Other Accruals and Current Liabilities

 

The components of the Company’s Other Accruals and Current Assets are as follows:

 

 

Year Ended September 30

 

2012

2011

 

(Thousands)

Accrued Capital Expenditures..............................................................................................................................................

$
36,460 
$
72,121 

Regulatory Liabilities................................................................................................................................................................

38,253 
29,368 

Other................................................................................................................................................................................................

4,386 
7,147 

 

$
79,099 
$
108,636 

 

Customer Advances

 

The Company’s Utility and Energy Marketing segments have balanced billing programs whereby customers pay their estimated annual usage in equal installments over a twelve-month period. Monthly payments under the balanced billing programs are typically higher than current month usage during the summer months. During the winter months, monthly payments under the balanced billing programs are typically lower than current month usage. At September 30, 2012 and 2011, customers in the balanced billing programs had advanced excess funds of $24.1 million and $19.6 million, respectively.

Customer Security Deposits

 

The Company, in its Utility, Pipeline and Storage, and Energy Marketing segments, often times requires security deposits from marketers, producers, pipeline companies, and commercial and industrial customers before providing services to such customers. At September 30, 2012 and 2011, the Company had received customer security deposits amounting to $17.9 million and  $17.3 million, respectively.

Earnings Per Common Share

 

Basic earnings per common share is computed by dividing 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.  For 2012, there were 844,872 securities excluded as being antidilutive. For 2011, there were no securities excluded as being antidilutive. For 2010, 314,910 securities were excluded as being antidilutive.

Stock-Based Compensation

 

The Company has various stock option and stock award plans which provide or provided for the issuance of one or more of the following to key employees: incentive stock options, nonqualified stock options, SARs, restricted stock, restricted stock units, performance units or performance shares. Stock options and SARs under all plans have exercise prices equal to the average market price of Company common stock on the date of grant, and generally no stock option or SAR is exercisable less than one year or more than ten years after the date of each grant. Restricted stock is subject to restrictions on vesting and transferability. Restricted stock awards entitle the participants to full dividend and voting rights. The market value of restricted stock on the date of the award is recorded as compensation expense over the vesting period.  Certificates for shares of restricted stock awarded under the Company’s stock option and stock award plans are held by the Company during the periods in which the restrictions on vesting are effective. Restrictions on restricted stock awards generally lapse ratably over a period of not more than ten years after the date of each grant.  Restricted stock units also are subject to restrictions on vesting and transferability.  Restricted stock units 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. These restricted stock units do not entitle the participants to dividend and voting rights. The accounting for these 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 (represented by the market value of Company common stock on the date of the award) must be reduced by the present value of forgone dividends over the vesting term of the award.  The fair value of restricted stock units on the date of award is recorded as compensation expense over the vesting period.

 

The Company follows authoritative guidance which requires the measurement and recognition of compensation cost at fair value for all share-based payments, including stock options and SARs. The Company has chosen the Black-Scholes-Merton closed form model to calculate the compensation expense associated with such share-based payments since it does not have complex stock-based compensation awards.

 

Stock-based compensation expense for the years ended September 30, 2012, 2011 and 2010 was approximately $7.2 million, $6.7 million, and $4.4 million, respectively. Stock-based compensation expense is included in operation and maintenance expense on the Consolidated Statements of Income. The total income tax benefit related to stock-based compensation expense during the years ended September 30, 2012, 2011 and 2010 was approximately $2.9 million, $2.7 million and $1.8 million, respectively. There were no capitalized stock-based compensation costs during the years ended September 30, 2012, 2011 and 2010.

 

The Company realized tax benefits related to stock-based compensation of $14.2 million, $19.0 million, and $12.8 million for the fiscal years ended September 30, 2012, 2011 and 2010, respectively.  The Company only recorded tax benefits of $0.6 million, $0.4 million, and $12.2 million related to the fiscal years ended September 30, 2012, 2011 and 2010, respectively, due to tax loss carryforwards.

 

For a summary of transactions during 2012 involving option shares, non-performance based SARs, performance based SARs, restricted share awards and restricted stock units for all plans, refer to Note E – Capitalization and Short-Term Borrowings.

 

Stock Options

 

The total intrinsic value of stock options exercised during the years ended September 30, 2012, 2011 and 2010 totaled approximately $13.5 million, $44.6 million, and $53.6 million, respectively. For 2012, 2011 and 2010, the amount of cash received by the Company from the exercise of such stock options was approximately $7.6 million, $9.5 million, and $34.5 million, respectively.

 

There were no stock options granted during the years ended September 30, 2012, 2011 and 2010.  For the years ended September 30, 2012 and 2011, no stock options became fully vested. For the year ended September 30, 2010, 100,000 stock options became fully vested. The total fair value of the stock options that became vested during the year ended September 30, 2010 was approximately $0.7 million.  There was no unrecognized compensation expense related to stock options at September 30, 2012. 

 

Non-Performance Based SARs

 

The Company granted 166,000 and 195,000 non-performance based SARs during the years ended September 30, 2012 and 2011, respectively. The Company did not grant any non-performance based SARs during the year ended September 30, 2010. The SARs granted in 2012 will be settled in shares of common stock of the Company.  The SARs granted in 2011 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.  Non-performance based SARs are considered equity awards under the current authoritative guidance for stock-based compensation.  The accounting for non-performance based SARs is the same as the accounting for stock options.  The non-performance based SARs granted during the year ended September 30, 2012 vest annually in one-third increments and become exercisable on the third anniversary of the date of grant.  The non-performance based SARs granted during the year ended September 30, 2011 vest and become exercisable annually in one-third increments.  The weighted average grant date fair value of these non-performance based SARs granted during the years ended September 30, 2012 and 2011 were estimated on the date of grant using the same accounting treatment that is applied for stock options. 

 

Participants in the stock option and award plans did not exercise any non-performance based SARs during the years ended September 30, 2012, 2011 and 2010.  The weighted average grant date fair value of non-performance based SARs granted in 2012 and 2011 are $11.20 and $15.01, respectively.  For the year ended September 30, 2012, 59,990 non-performance based SARs became fully vested.  For the year ended September 30, 2011, no non-performance based SARs became fully vested. For the year ended September 30, 2010, 50,000 non-performance based SARs became fully vested.  The total fair value of the non-performance based SARs that became vested during the year ended September 30, 2012 was approximately $0.9 million.  The total fair value of the non-performance based SARs that became vested during the year ended September 30, 2010 was approximately $0.4 million. As of September 30, 2012, unrecognized compensation expense related to non-performance based SARs totaled approximately $1.1 million, which will be recognized over a weighted average period of 10.2 months. 

 

The fair value of non-performance based SARs at the date of grant was estimated using the Black-Scholes-Merton closed form model. The following weighted average assumptions were used in estimating the fair value of non-performance based SARs at the date of grant:

 

 

Year Ended September 30

 

2012

2011

Risk Free Interest Rate........................................................................................................................................................

1.59% 
2.94% 

Expected Life (Years)............................................................................................................................................................

8.25 
8.00 

Expected Volatility..................................................................................................................................................................

24.97% 
23.38% 

Expected Dividend Yield (Quarterly)..............................................................................................................................

0.64% 
0.55% 

 

The risk-free interest rate is based on the yield of a Treasury Note with a remaining term commensurate with the expected term of the non-performance based SARs. The expected life and expected volatility are based on historical experience.

 

For grants during the years ended September 30, 2012 and 2011, it was assumed that there would be no forfeitures, based on the vesting term and the number of grantees.

 

Performance Based SARs

 

The Company did not grant any performance based SARs during the years ended September 30, 2012 and 2011. The Company granted 520,500 performance based SARs during the year ended September 30, 2010. The accounting treatment for performance based SARs is the same as the accounting for stock options under the current authoritative guidance for stock-based compensation. The performance based SARs granted for the year ended September 30, 2010 vest and become exercisable annually in one-third increments, provided that a performance condition is met. The performance condition for each fiscal year, generally stated, is an increase over the prior fiscal year of at least five percent in certain oil and natural gas production of the Exploration and Production segment. The weighted average grant date fair value of the performance based SARs granted during 2010 was estimated on the date of grant using the same accounting treatment that is applied for stock options, and assumes that the performance conditions specified will be achieved. If such conditions are not met or it is not considered probable that such conditions will be met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

 

The weighted average grant date fair value of performance based SARs granted in 2010 is $12.06 per share.  The total intrinsic value of performance based SARs exercised during the years ended September 30, 2012 and 2011 totaled less than $0.1 million and approximately  $0.3 million, respectively. Participants in the stock option and award plans did not exercise any performance based SARs during the year ended September 30, 2010.  For the years ended September 30, 2012, 2011 and 2010, 375,179,  376,819 and 203,324 performance based SARs became fully vested. The total fair value of the performance based SARs that became vested during each of the years ended September 30, 2012, 2011 and 2010 was approximately $2.9 million, $2.9 million and $0.8 million, respectively. As of September 30, 2012, unrecognized compensation expense related to performance based SARs totaled approximately $0.1 million, which will be recognized over a weighted average period of 3.0 months. 

 

The fair value of performance based SARs at the date of grant was estimated using the Black-Scholes-Merton closed form model. The following weighted average assumptions were used in estimating the fair value of performance based SARs at the date of grant:

 

 

Year Ended September 30

 

2010

Risk Free Interest Rate........................................................................................................................................................

3.55% 

Expected Life (Years)............................................................................................................................................................

7.75 

Expected Volatility..................................................................................................................................................................

23.25% 

Expected Dividend Yield (Quarterly)..............................................................................................................................

0.64% 

 

The risk-free interest rate is based on the yield of a Treasury Note with a remaining term commensurate with the expected term of the performance based SARs. The expected life and expected volatility are based on historical experience.

 

For grants during the year ended September 30, 2010, it was assumed that there would be no forfeitures, based on the vesting term and the number of grantees.

 

Restricted Share Awards

 

The Company granted 41,525,  47,250, and 4,000 restricted share awards (non-vested stock as defined by the current accounting literature) during the years ended September 30, 2012, 2011 and 2010, respectively.  The weighted average fair value of restricted share awards granted in 2012, 2011 and 2010 is $55.09 per share, $63.98 per share and $52.10 per share, respectively. As of September 30, 2012, unrecognized compensation expense related to restricted share awards totaled approximately $4.0 million, which will be recognized over a weighted average period of 2.4 years.

 

Restricted Stock Units

 

The Company granted 68,450 and 41,800 restricted stock units during the years ended September 30, 2012 and 2011, respectively.  The weighted average fair value of restricted share units granted in 2012 and 2011 are $47.10 per share and $59.35 per share, respectively.  As of September 30, 2012, unrecognized compensation expense related to restricted share awards totaled approximately $3.9 million, which will be recognized over a weighted average period of 2.0 years. 

New Authoritative Accounting and Financial Reporting Guidance

 

In June 2011, the FASB issued authoritative guidance regarding the presentation of comprehensive income.  The new guidance allows companies only two choices for presenting net income and other comprehensive income: in a single continuous statement, or in two separate, but consecutive, statements.  The guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity.  This authoritative guidance will be effective as of the Company’s first quarter of fiscal 2013 and is not expected to have a significant impact on the Company’s financial statements. 

 

In September 2011, the FASB issued revised authoritative guidance that simplifies the testing of goodwill for impairment.  The revised guidance allows companies the option to perform a “qualitative” assessment to determine whether further impairment testing is necessary.  The revised authoritative guidance is required to be effective for the Company’s annual impairment test performed in fiscal 2013.    The Company has adopted the new provisions for fiscal 2012, as early adoption was permitted.

 

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.

Summary Of Significant Accounting Policies (Tables)
12 Months Ended
Sep. 30, 2012
Sep. 30, 2012
Non Performance Based SARs [Member]
Sep. 30, 2010
Performance Based SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Schedule Of Depreciable Plant By Segment
 
 
Average Depreciation Depletion And Amortization Rates
 
 
Components Of Accumulated Other Comprehensive Income (Loss)
 
 
Components Of Non-Cash Capital Expenditures
 
 
Components Of Other Current Assets
 
 
Components Of Other Accruals And Current Liabilities
 
 
Schedule Of Weighted Average Assumptions Used In Estimating Fair Value
 

 

As of September 30

 

2012

2011

 

(Thousands)

Utility...................................................................................................................................................................................................

$
1,737,645 
$
1,695,702 

Pipeline and Storage.....................................................................................................................................................................

1,406,433 
1,260,301 

Exploration and Production........................................................................................................................................................

2,828,358 
2,042,225 

Energy Marketing...........................................................................................................................................................................

2,865 
2,095 

All Other and Corporate...............................................................................................................................................................

196,593 
127,291 

 

$
6,171,894 
$
5,127,614 

 

 

 

Year Ended September 30

 

2012

2011

2010

Utility............................................................................................................................................................................................

2.6% 
2.6% 
2.6% 

Pipeline and Storage..............................................................................................................................................................

2.9% 
3.1% 
3.0% 

Exploration and Production, per Mcfe(1)......................................................................................................................

$
2.25 
$
2.17 
$
2.14 

Energy Marketing....................................................................................................................................................................

3.6% 
2.5% 
2.9% 

All Other and Corporate........................................................................................................................................................

1.8% 
1.3% 
6.8% 

 

 

(1)

 Amounts include depletion of oil and gas producing properties as well as depreciation of fixed assets. As disclosed in Note N — Supplementary Information for Oil and Gas Producing Properties, depletion of oil and gas producing properties amounted to $2.19, $2.12 and $2.10 per Mcfe of production in 2012, 2011 and 2010, respectively.

 

Year Ended September 30

 

2012

2011

 

(Thousands)

Funded Status of the Pension and Other Post-Retirement Benefit Plans......................................................

$
(100,561)
$
(89,587)

Net Unrealized Gain (Loss) on Derivative Financial Instruments.......................................................................

(1,602)
40,979 

Net Unrealized Gain on Securities Available for Sale...............................................................................................

3,143 
909 

Accumulated Other Comprehensive Loss......................................................................................................................

$
(99,020)
$
(47,699)

 

 

At September 30

   

2012

2011

2010

2009

 

(Thousands)

Non-cash Capital Expenditures.....................................................................................

$
52,557 
$
111,947 
$
78,632 
$
20,231 

 

 

Year Ended September 30

 

2012

2011

 

(Thousands)

Prepayments................................................................................................................................................................................

$
8,316 
$
9,489 

Prepaid Property and Other Taxes.....................................................................................................................................

14,455 
13,240 

Federal Income Taxes Receivable.....................................................................................................................................

268 
385 

State Income Taxes Receivable.........................................................................................................................................

2,065 
6,124 

Fair Values of Firm Commitments.....................................................................................................................................

1,291 
9,096 

Regulatory Assets.....................................................................................................................................................................

29,726 
26,589 

 

$
56,121 
$
64,923 

 

 

 

Year Ended September 30

 

2012

2011

 

(Thousands)

Accrued Capital Expenditures..............................................................................................................................................

$
36,460 
$
72,121 

Regulatory Liabilities................................................................................................................................................................

38,253 
29,368 

Other................................................................................................................................................................................................

4,386 
7,147 

 

$
79,099 
$
108,636 

 

 

Year Ended September 30

 

2012

2011

Risk Free Interest Rate........................................................................................................................................................

1.59% 
2.94% 

Expected Life (Years)............................................................................................................................................................

8.25 
8.00 

Expected Volatility..................................................................................................................................................................

24.97% 
23.38% 

Expected Dividend Yield (Quarterly)..............................................................................................................................

0.64% 
0.55% 

 

 

Year Ended September 30

 

2010

Risk Free Interest Rate........................................................................................................................................................

3.55% 

Expected Life (Years)............................................................................................................................................................

7.75 

Expected Volatility..................................................................................................................................................................

23.25% 

Expected Dividend Yield (Quarterly)..............................................................................................................................

0.64% 

 

Asset Retirement Obligations (Tables)
Schedule Of Change in Asset Retirement Obligation

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands)

Balance at Beginning of Year................................................................................................................................

$
75,731 
$
101,618 
$
91,373 

Liabilities Incurred and Revisions of Estimates...........................................................................................

41,653 
10,346 
16,140 

Liabilities Settled..........................................................................................................................................................

(2,997)
(41,704)
(12,622)

Accretion Expense......................................................................................................................................................

4,859 
5,471 
6,727 

Balance at End of Year............................................................................................................................................

$
119,246 
$
75,731 
$
101,618 

 

Regulatory Matters (Tables)
Schedule Of Regulatory Assets And Liabilities

 

At September 30

 

2012

2011

 

(Thousands)

Regulatory Assets(1):

Pension Costs(2) (Note H)................................................................................................................................................................

$
344,228 
$
319,906 

Post-Retirement Benefit Costs(2) (Note H)..............................................................................................................................

154,415 
124,423 

Recoverable Future Taxes (Note D) ...........................................................................................................................................

150,941 
144,377 

Environmental Site Remediation Costs(2) (Note I)...............................................................................................................

17,843 
20,095 

NYPSC Assessment(3)......................................................................................................................................................................

17,420 
15,063 

Asset Retirement Obligations(2) (Note B)..................................................................................................................................

26,942 
13,860 

Unamortized Debt Expense (Note A)...........................................................................................................................................

3,997 
5,090 

Other(4)......................................................................................................................................................................................................

15,729 
17,639 

Total Regulatory Assets.....................................................................................................................................................................

731,515 v

660,453 

Less: Amounts Included in Other Current Assets..................................................................................................................

(29,726)
(26,589)

Total Long-Term Regulatory Assets.............................................................................................................................................. 

$
701,789 
$
633,864 

 

 

At September 30

 

2012

2011

 

(Thousands)

Regulatory Liabilities:

Cost of Removal Regulatory Liability.........................................................................................................................................

$
139,611 
$
135,940 

Taxes Refundable to Customers (Note D)................................................................................................................................

66,392 
65,543 

Amounts Payable to Customers (See Regulatory Mechanisms in Note A)...............................................................

19,964 
15,519 

Off-System Sales and Capacity Release Credits(5)...........................................................................................................

16,262 
7,675 

Other(6)......................................................................................................................................................................................................

23,041 
23,351 

Total Regulatory Liabilities.................................................................................................................................................................

265,270 
248,028 

Less: Amounts included in Current and Accrued Liabilities...............................................................................................

(38,253)
(29,368)

Total Long-Term Regulatory Liabilities..........................................................................................................................................

$
227,017 
$
218,660 

 

 

 

 

(1)

The Company recovers the cost of its regulatory assets but generally does not earn a return on them. There are a few exceptions to this rule. For example, the Company does earn a return on Unrecovered Purchased Gas Costs and, in the New York jurisdiction of its Utility segment, earns a return, within certain parameters, on the excess of cumulative funding to the pension plan over the cumulative amount collected in rates.

 

 

(2)

Included in Other Regulatory Assets on the Consolidated Balance Sheets.

(3)

Amounts are included in Other Current Assets on the Consolidated Balance Sheets at September 30, 2012 and September 30, 2011 since such amounts are expected to be recovered from ratepayers in the next 12 months.

(4)

$12,306 and $11,526 are included in Other Current Assets on the Consolidated Balance Sheets at September 30, 2012 and 2011, respectively, since such amounts are expected to be recovered from ratepayers in the next 12 months.  $3,423 and  $6,113 are included in Other Regulatory Assets on the Consolidated Balance Sheets at September 30, 2012 and 2011, respectively.

(5)

Amounts are included in Other Accruals and Current Liabilities on the Consolidated Balance Sheets at September 30, 2012 and September 30, 2011 since such amounts are expected to be passed back to ratepayers in the next 12 months. 

 

 

(6)

$2,027 and $6,174 are included in Other Accruals and Current Liabilities on the Consolidated Balance Sheets at September 30, 2012 and 2011, respectively, since such amounts are expected to be recovered from ratepayers in the next 12 months.  $21,014 and $17,177 are included in Other Regulatory Liabilities on the Consolidated Balance Sheets at September 30, 2012 and 2011, respectively.

 

Income Taxes (Tables)

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands)

Current Income Taxes —

Federal............................................................................................................................................................................

$
(8)
$
(1,390)
$
2,074 

State................................................................................................................................................................................

6,412 
1,520 
4,991 

Deferred Income Taxes —

Federal............................................................................................................................................................................

111,176 
130,434 
110,515 

State................................................................................................................................................................................

32,974 
33,817 
24,164 

 

150,554 
164,381 
141,744 

Deferred Investment Tax Credit.........................................................................................................................

(581)
(697)
(697)

Total Income Taxes...................................................................................................................................................

$
149,973 
$
163,684 
$
141,047 

Presented as Follows:

Other Income...............................................................................................................................................................

$
(581)
$
(697)
$
(697)

Income Tax Expense — Continuing Operations..........................................................................................

150,554 
164,381 
137,227 

Discontinued Operations —

Income from Operations........................................................................................................................................

493 

Gain on Disposal........................................................................................................................................................

4,024 

Total Income Taxes...................................................................................................................................................

$
149,973 
$
163,684 
$
141,047 

 

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands)

U.S. Income Before Income Taxes.................................................................................................................

$
370,050 
$
422,086 
$
366,960 

Income Tax Expense, Computed at U.S. Federal Statutory Rate of 35%...................................

$
129,518 
$
147,730 
$
128,436 

Increase (Reduction) in Taxes Resulting from:

State Income Taxes................................................................................................................................................

25,601 
22,969 
18,951 

Miscellaneous.............................................................................................................................................................

(5,146)
(7,015)
(6,340)

Total Income Taxes..................................................................................................................................................

$
149,973 
$
163,684 
$
141,047 

 

 

At September 30

 

2012

2011

 

(Thousands)

Deferred Tax Liabilities:

Property, Plant and Equipment...............................................................................................................................................

$
1,333,574 
$
1,062,255 

Pension and Other Post-Retirement Benefit Costs......................................................................................................

236,431 
217,302 

Other...................................................................................................................................................................................................

43,294 
70,389 

Total Deferred Tax Liabilities....................................................................................................................................................

1,613,299 
1,349,946 

Deferred Tax Assets:

Pension and Other Post-Retirement Benefit Costs......................................................................................................

(276,501)
(263,606)

Tax Loss Carryforwards............................................................................................................................................................

(198,744)
(71,516)

Other...................................................................................................................................................................................................

(83,052)
(74,863)

Total Deferred Tax Assets........................................................................................................................................................

(558,297)
(409,985)

Total Net Deferred Income Taxes.........................................................................................................................................

$
1,055,002 
$
939,961 

Presented as Follows:

Deferred Tax Liability/(Asset) — Current..........................................................................................................................

$
(10,755)
$
(15,423)

Deferred Tax Liability — Non-Current.................................................................................................................................

1,065,757 
955,384 

Total Net Deferred Income Taxes.........................................................................................................................................

$
1,055,002 
$
939,961 

 

 

Year Ended September 30             

 

2012

2011

2010

 

(Thousands)

Balance at Beginning of Year.........................................................................................................................................

$
7,766 
$
8,490 
$
8,721 

Additions for Tax Positions Related to Current Year...........................................................................................

1,600 
80 
699 

Additions for Tax Positions of Prior Years................................................................................................................

2,751 
107 
45 

Reductions for Tax Positions of Prior Years...........................................................................................................

(947)
(911)
(975)

Balance at End of Year.....................................................................................................................................................

$
11,170 
$
7,766 
$
8,490 

 

Capitalization And Short-Term Borrowings (Tables)

 

 

 

Earnings

Accumulated

 

 

 

Reinvested

Other

 

Common Stock

Paid

in

Comprehensive

 

 

In

the

Income

 

Shares

Amount

Capital

Business

(Loss)

 

(Thousands, except per share amounts)

Balance at September 30, 2009............................................................

80,500 
$
80,500 
$
602,839 
$
948,293 
$
(42,396)

Net Income Available for Common Stock.......................................

225,913 

Dividends Declared on Common Stock ($1.36 Per Share)......

(110,944)

Other Comprehensive Loss, Net of Tax...........................................

(2,589)

Share-Based Payment Expense(2)......................................................

4,435 

Common Stock Issued Under Stock and Benefit Plans(1)......

1,575 
1,575 
38,345 

Balance at September 30, 2010............................................................

82,075 
82,075 
645,619 
1,063,262 
(44,985)

Net Income Available for Common Stock.......................................

258,402 

Dividends Declared on Common Stock ($1.40 Per Share)......

(115,642)

Other Comprehensive Loss, Net of Tax...........................................

(2,714)

Share-Based Payment Expense(2)......................................................

6,656 

Common Stock Issued (Repurchased) Under Stock and Benefit Plans(1)

738 
738 
(1,526)

Balance at September 30, 2011.............................................................

82,813 
82,813 
650,749 
1,206,022 
(47,699)

Net Income Available for Common Stock.......................................

220,077 

Dividends Declared on Common Stock ($1.44 Per Share)......

(119,815)

Other Comprehensive Loss, Net of Tax...........................................

(51,321)

Share-Based Payment Expense(2)......................................................

7,156 

Common Stock Issued Under Stock and Benefit Plans(1)......

517 
517 
11,596 

Balance at September 30, 2012............................................................

83,330 
$
83,330 
$
669,501 

$1,306,284(3)

$
(99,020)

 

 

 

 

 

 

 

 

(1)

Paid in Capital includes tax benefits of $1.0 million for September 30, 2012, tax costs of $1.2 million for September 30, 2011 and tax benefits of $13.2 million for September 30, 2010 associated with the exercise of stock options and/or performance based SARs.

 

 

(2)

Paid in Capital includes compensation costs associated with stock option, SARs and/or restricted stock awards. The expense is included within Net Income Available For Common Stock, net of tax benefits.

 

 

(3)

The availability of consolidated earnings reinvested in the business for dividends payable in cash is limited under terms of the indentures covering long-term debt. At September 30, 2012, $1.2 billion of accumulated earnings was free of such limitations.

 

 

At September 30

 

2012

2011

 

(Thousands)

Medium-Term Notes(1):

7.4% due March 2023 to June 2025......................................................................................................................................

$
99,000 
$
249,000 

Notes(1):

4.90% to 8.75% due March 2013 to December 2021....................................................................................................

1,300,000 
800,000 

Total Long-Term Debt....................................................................................................................................................................

1,399,000 
1,049,000 

Less Current Portion(2)...............................................................................................................................................................

250,000 
150,000 

 

$
1,149,000 
$
899,000 

 

 

(1)

The Medium-Term Notes and Notes are unsecured.

(2)

Current Portion of Long-Term Debt at September 30, 2012 consists of $250.0 million of 5.25% notes that mature in March 2013.    Current Portion of Long-Term Debt at September 30, 2011 consisted of $150.0 million of 6.70% medium-term notes that matured in November 2011. 

 

 

 

 

Number of

Restricted

Share Awards

Weighted Average

Fair Value per

Award

Restricted Share Awards Outstanding at September 30, 2011.........................................................................

139,250 
$
53.37 

Granted in 2012.......................................................................................................................................................................

41,525 
$
55.09 

Vested in 2012.........................................................................................................................................................................

(18,740)
$
59.74 

Forfeited in 2012....................................................................................................................................................................

$

Restricted Share Awards Outstanding at September 30, 2012.........................................................................

162,035 
$
53.07 

 

 

 

 

 

 

 

 

Number of

Shares Subject

To Option

 

 

 

Weighted Average

Exercise Price

Weighted

Average

Remaining

Contractual

Life (Years)

 

 

Aggregate

Intrinsic

Value

 

(In thousands)

Outstanding at September 30, 2011.........................................................................

245,000 
$
58.79 

Granted in 2012.................................................................................................................

166,000 
$
55.09 

Exercised in 2012.............................................................................................................

$

Forfeited in 2012...............................................................................................................

$

Outstanding at September 30, 2012........................................................................

411,000 
$
57.30 
8.20 
$
(1,339)

SARs exercisable at September 30, 2012............................................................

109,990 
$
53.56 
6.51 
$
53 

 

 

 

 

 

 

 

 

Number of

Shares Subject

to Option

 

 

 

Weighted Average

Exercise Price

Weighted

Average

Remaining

Contractual

Life (Years)

 

 

Aggregate

Intrinsic

Value

 

(In thousands)

Outstanding at September 30, 2011.........................................................................

1,758,961 
$
31.38 

Granted in 2012.................................................................................................................

$

Exercised in 2012.............................................................................................................

(476,243)
$
25.28 

Forfeited in 2012...............................................................................................................

$       —

Outstanding at September 30, 2012........................................................................

1,282,718 
$
33.64 
2.65 
$
26,166 

Option shares exercisable at September 30, 2012...........................................

1,282,718 
$
33.64 
2.65 
$
26,166 

Option shares available for future grant at September 30, 2012(1).........

2,097,214 

 

 

(1)

Includes shares available for SARs and restricted stock grants.    

 

 

 

 

Number of

Restricted

Share Awards

Weighted Average

Fair Value per

Award

Restricted Stock Units Outstanding at September 30, 2011.............................................................................

39,400 
$
59.20 

Granted in 2012.......................................................................................................................................................................

68,450 
$
47.10 

Vested in 2012.........................................................................................................................................................................

$        —

Forfeited in 2012....................................................................................................................................................................

(1,950)
$
46.96 

Restricted Stock Units Outstanding at September 30, 2012.............................................................................

105,900 
$
51.61 

 

 

 

 

 

 

 

 

Number of

Shares Subject

To Option

 

 

 

Weighted Average

Exercise Price

Weighted

Average

Remaining

Contractual

Life (Years)

 

 

Aggregate

Intrinsic

Value

 

(In thousands)

Outstanding at September 30, 2011.........................................................................

1,225,153 
$
40.85 

Granted in 2012.................................................................................................................

$

Exercised in 2012.............................................................................................................

(2,000)
$
29.88 

Forfeited in 2012...............................................................................................................

$       —

Canceled in 2012(1).........................................................................................................

(6,000)
$
58.99 

Outstanding at September 30, 2012........................................................................

1,217,153 
$
40.78 
6.68 
$
16,140 

SARs exercisable at September 30, 2012............................................................

1,039,309 
$
38.80 
6.56 
$
15,837 

 

 

(1)

Shares were canceled during 2012 due to performance condition not being met.

 

Fair Value Measurements (Tables)

 

At Fair Value as of September 30, 2012

 

Recurring Fair Value Measures

 

Level 1

 

Level 2

 

Level 3

Netting Adjustments(1)

 

Total

 

(Dollars in thousands)

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 

 

 

 

At Fair Value as of September 30, 2011

 

Recurring Fair Value Measures

 

Level 1

 

Level 2

 

Level 3

Netting Adjustments(1)

 

Total

 

(Dollars in thousands)

Assets:

 

Cash Equivalents — Money Market Mutual Funds..............................................................

$
32,444 

$

$

$

$
32,444 

Derivative Financial Instruments:

Commodity Futures Contracts — Gas......................................................................................

4,541 

(4,541)

Over the Counter Swaps — Gas..................................................................................................

75,292 

(179)
75,113 

Over the Counter Swaps — Oil.....................................................................................................

10,420 
(9,448)
972 

Other Investments:

Balanced Equity Mutual Fund.........................................................................................................

19,882 

19,882 

Common Stock — Financial Services Industry....................................................................

4,478 

4,478 

Other Common Stock........................................................................................................................

226 

226 

Hedging Collateral Deposits............................................................................................................

19,701 

19,701 

Total............................................................................................................................................................

$
81,272 
$
75,292 
$
10,420 
$
(14,168)
$
152,816 

 

 

 

 

 

 

Liabilities:

Derivative Financial Instruments:

Commodity Futures Contracts — Gas......................................................................................

$
7,833 

$

$

$
(4,541)
$
3,292 

Over the Counter Swaps — Gas..................................................................................................

179 

(179)

Over the Counter Swaps — Oil.....................................................................................................

15,830 
(9,448)
6,382 

Total............................................................................................................................................................

$
7,833 
$
179 
$
15,830 
$
(14,168)
$
9,674 

Total Net Assets/(Liabilities)............................................................................................................

$
73,439 
$
75,113 
$
(5,410)

$

$
143,142 

 

(1)

Amounts represent the impact of legally-enforceable master netting arrangements that allow the Company to net gain and loss positions held with the same counterparties.

Fair Value Measurements Using Unobservable Inputs (Level 3)

 

 

 

Total Gains/Losses

 

 

 

 

 

 

 

Gains/(Losses)

 

 

 

 

(Gains)/Losses

Unrealized and

 

 

 

 

 

 

October 1,

2011

 Realized and

Included in

Earnings

Included in Other

Comprehensive Income

(Loss)

Transfer

In/(Out) of

Level 3

 

September 30,

2012

 

(Dollars in thousands)

Derivative Financial Instruments(2)…………….…...

$
(5,410)

$  46,174(1)

$
(60,428)

$

$
(19,664)

 

 

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

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

 

 

Fair Value Measurements Using Unobservable Inputs (Level 3)

 

 

 

Total Gains/Losses

 

 

 

 

 

 

 

Gains/(Losses)

 

 

 

 

(Gains)/Losses

Unrealized and

 

 

 

 

 

 

October 1,

2010

 Realized and

Included in

Earnings

Included in Other

Comprehensive Income

(Loss)

Transfer

In/(Out) of

Level 3

 

September 30,

2011

 

(Dollars in thousands)

Derivative Financial Instruments(2)..............................

$
(16,483)

$ 41,354(1)

$
(30,281)

$

$
(5,410)

 

(1) Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the year ended September 30, 2011.

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

Financial Instruments (Tables)

 

At September 30

 

 

2012 Carrying

Amount

2012 Fair

Value

2011 Carrying

Amount

2011 Fair

Value

 

(Thousands)

Long-Term Debt....................................................................................................................

$
1,399,000 
$
1,623,847 
$
1,049,000 
$
1,198,585 

 

 

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

 

Year Ended September 30, 2012 and 2011 (Dollar Amounts in Thousands)

 

Amount of

 

Amount of

 

 

 

Derivative Gain or

 

Derivative Gain or

 

 

 

(Loss) Recognized

Location of

(Loss) Reclassified

Location of

 

 

in Other

Derivative Gain or

from Accumulated

Derivative Gain or

Derivative Gain or

 

Comprehensive

(Loss) Reclassified

Other Comprehensive

(Loss) Recognized

(Loss) Recognized

 

Income (Loss) on

from Accumulated

Income (Loss) on

in the Consolidated

in the Consolidated

 

the Consolidated

Other Comprehensive

the Consolidated

Statement of

Statement of Income

 

Statement of

Income (Loss) on

Balance Sheet into

Income

(Ineffective

 

Comprehensive

the Consolidated

the Consolidated

(Ineffective Portion

Portion and Amount

 

Income (Loss)

Balance Sheet into

Statement of Income

and Amount

Excluded from

Derivatives in Cash

(Effective Portion)

the Consolidated

(Effective Portion)

Excluded from

Effectiveness Testing)

Flow Hedging

for the Year Ended

Statement of Income

for the Year Ended

Effectiveness

for the Year Ended

Relationships

September 30,

   (Effective Portion)

September 30,

  Testing)

September 30,

 

2012

2011

 

2012

2011

 

2012

2011

Commodity Contracts — Exploration & Production segment

$
(11,776)
$
24,713 

Operating Revenue

$
54,777 
$
6,367 

Not Applicable

$

$

Commodity Contracts — Energy Marketing segment

$
4,725 
$
5,015 

Purchased Gas

$
10,439 
$
8,608 

 

 

Not Applicable

$

$

Commodity Contracts — Pipeline & Storage segment(1)

$
(197)
$
510 

Operating Revenue

$
475 
$
510 

 

 

Not Applicable

$

$

Total............................................

$
(7,248)
$
30,238 

 

$
65,691 
$
15,485 

 

$

$

 

 

(1)

There were no open hedging positions at September 30, 2012 or 2011.

 

Consolidated Statement of Income

Gain/(Loss) on Derivative

Gain/(Loss) on Commitment

Operating Revenues.....................................................................................................................

$
8,021,910 
$
(8,021,910)

Purchased Gas................................................................................................................................

$
(1,235,817)
$
1,235,817 

 

 

 

 

 

 

 

Derivatives in Fair Value Hedging Relationships – Energy Marketing segment

 

 

Location of

Derivative Gain or

(Loss) Recognized

in the Consolidated

Statement of Income

Amount of

Derivative Gain or

(Loss) Recognized

in the Consolidated

Statement of Income

for the Year Ended

September 30, 2012

 

(In thousands)

Commodity Contracts — Hedge of fixed price sales commitments of natural gas....

Operating Revenues

$
8,022 

Commodity Contracts — Hedge of fixed price purchase commitments of natural gas

Purchased Gas

(1,261)

Commodity Contracts — Hedge of natural gas held in storage............................................

Purchased Gas

25 

 

 

$
6,786 

 

Retirement Plan And Other Post-Retirement Benefits (Tables)

 

Retirement Plan

Other Post-Retirement Benefits

 

Year Ended September 30

Year Ended September 30

 

2012

2011

2010

2012

2011

2010

 

(Thousands)

Change in Benefit Obligation

Benefit Obligation at Beginning of Period..

$
949,777 
$
924,493 
$
831,496 
$
485,452 
$
472,407 
$
467,295 

Service Cost...........................................................

14,202 
14,772 
12,997 
4,016 
4,276 
4,298 

Interest Cost...........................................................

41,526 
42,676 
44,308 
21,315 
21,884 
25,017 

Plan Participants’ Contributions......................

1,956 
1,963 
1,644 

Retiree Drug Subsidy Receipts......................

1,528 
1,532 
1,354 

Amendments(1)......................................................

(1,764)

(7,187)

Actuarial (Gain) Loss...........................................

120,338 
21,395 
85,831 
71,708 
15,071 
(3,635)

Benefits Paid...........................................................

(55,099)
(51,795)
(50,139)
(24,712)
(24,494)
(23,566)

Benefit Obligation at End of Period..............

$
1,070,744 
$
949,777 
$
924,493 
$
561,263 
$
485,452 
$
472,407 

Change in Plan Assets

Fair Value of Assets at Beginning of

Period

$
601,719 
$
597,549 
$
563,881 
$
351,990 
$
353,269 
$
319,022 

Actual Return on Plan Assets.........................

111,034 
2,412 
61,625 
63,552 
(4,094)
30,478 

Employer Contributions......................................

44,022 
53,553 
22,182 
21,348 
25,346 
25,691 

Plan Participants’ Contributions......................

1,956 
1,963 
1,644 

Benefits Paid...........................................................

(55,099)
(51,795)
(50,139)
(24,712)
(24,494)
(23,566)

Fair Value of Assets at End of Period.........

$
701,676 
$
601,719 
$
597,549 
$
414,134 
$
351,990 
$
353,269 

Net Amount Recognized at End of Period (Funded Status)

$
(369,068)
$
(348,058)
$
(326,944)
$
(147,129)
$
(133,462)
$
(119,138)

Amounts Recognized in the Balance Sheets Consist of:

Non-Current Liabilities.........................................

$
(369,068)
$
(348,058)
$
(326,944)
$
(147,129)
$
(133,462)
$
(119,138)

Accumulated Benefit Obligation.....................

$
986,223 
$
874,595 
$
843,526 

N/A

N/A

N/A

Weighted Average Assumptions Used to Determine Benefit Obligation at September 30

Discount Rate.........................................................

3.50% 
4.50% 
4.75% 
3.50% 
4.50% 
4.75% 

Rate of Compensation Increase....................

4.75% 
4.75% 
4.75% 
4.75% 
4.75% 
4.75% 

Components of Net Periodic Benefit Cost

Service Cost...........................................................

$
14,202 
$
14,772 
$
12,997 
$
4,016 
$
4,276 
$
4,298 

Interest Cost...........................................................

41,526 
42,676 
44,308 
21,315 
21,884 
25,017 

Expected Return on Plan Assets...................

(59,701)
(59,103)
(58,342)
(28,971)
(29,165)
(26,334)

Amortization of Prior Service Cost...............

269 
588 
655 
(2,138)
(1,710)
(1,710)

Amortization of Transition Amount................

10 
541 
541 

Recognition of Actuarial Loss(2)....................

39,615 
34,873 
21,641 
24,057 
23,794 
25,881 

Net Amortization and Deferral for Regulatory Purposes

(6,900)
(2,311)
(30)
6,162 
10,490 
351 

Net Periodic Benefit Cost.................................

$
29,011 
$
31,495 
$
21,229 
$
24,451 
$
30,110 
$
28,044 

Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost at September 30

Discount Rate.........................................................

4.50% 
4.75% 
5.50% 
4.50% 
4.75% 
5.50% 

Expected Return on Plan Assets...................

8.25% 
8.25% 
8.25% 
8.25% 
8.25% 
8.25% 

Rate of Compensation Increase....................

4.75% 
4.75% 
5.00% 
4.75% 
4.75% 
5.00% 

 

 

(1)

In fiscal 2011, the Company passed an amendment which changed the definition of annual compensation prospectively to exclude certain bonuses paid by Seneca after September 30, 2011.  This decreased the benefit obligation of the Retirement Plan. In fiscal 2011, the Company also increased the prescription drug co-payments for certain retired participants which decreased the benefit obligation of the other post-retirement benefits. 

 

(2)            Distribution Corporation’s New York jurisdiction calculates the amortization of the actuarial loss on a vintage year basis over    10 years, as mandated by the NYPSC. All the other subsidiaries of the Company utilize the corridor approach.

 

 

 

 

Retirement

Plan

Other

Post-Retirement

Benefits

 

Non-Qualified

Benefit Plans

 

(Thousands)

Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities(1)

Net Actuarial Loss..........................................................................................................................................

$
(458,125)
$
(195,305)
$
(40,770)

Transition Obligation.......................................................................................................................................

(8)

Prior Service (Cost) Credit.........................................................................................................................

(1,304)
11,217 

Net Amount Recognized..............................................................................................................................

$
(459,429)
$
(184,096)
$
(40,770)

Changes to Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities Recognized During Fiscal 2012(1)

Increase in Actuarial Loss, excluding amortization(2)....................................................................

$
(69,005)
$
(37,134)
$
(9,559)

Change due to Amortization of Actuarial Loss..................................................................................

39,615 
24,057 
4,363 

Reduction in Transition Obligation...........................................................................................................

10 

Prior Service (Cost) Credit.........................................................................................................................

269 
(2,138)

Net Change........................................................................................................................................................

$
(29,121)
$
(15,205)
$
(5,196)

Amounts Expected to be Recognized in Net Periodic Benefit Cost in the Next Fiscal Year(1)

Net Actuarial Loss..........................................................................................................................................

$
(52,776)
$
(20,892)
$
(5,280)

Transition Obligation.......................................................................................................................................

(8)

Prior Service (Cost) Credit.........................................................................................................................

(238)
2,138 

Net Amount Expected to be Recognized.............................................................................................

$
(53,014)
$
(18,762)
$
(5,280)

 

 

(1)

Amounts presented are shown before recognizing deferred taxes.

(2) Amounts presented include the impact of actuarial gains/losses related to return on assets, as well as the Actuarial (Gain) Loss  amounts presented in the Change in Benefit Obligation.

 

Benefit Payments

Subsidy Receipts

2013..........................................................................................................................................................................................

$
26,559 
$
(1,828)

2014..........................................................................................................................................................................................

$
27,852 
$
(2,021)

2015..........................................................................................................................................................................................

$
29,154 
$
(2,220)

2016..........................................................................................................................................................................................

$
30,506 
$
(2,420)

2017..........................................................................................................................................................................................

$
31,859 
$
(2,606)

2018 through 2022.............................................................................................................................................................

$
175,145 
$
(15,964)

 

 

2012

 

2011

 

2010

 

Rate of Increase for Pre Age 65 Participants............................................................................................................

7.46% 
(1)
7.64% 
(1)
7.82% 
(1)

Rate of Increase for Post Age 65 Participants.........................................................................................................

6.84% 

(1)

6.89% 

(1)

6.95% 

(1)

Annual Rate of Increase in the Per Capita Cost of Covered Prescription Drug Benefits....................

8.08% 

(1)

8.39% 

(1)

8.69% 

(1)

Annual Rate of Increase in the Per Capita Medicare Part B Reimbursement.............................................

6.84% 

(1)

6.89% 

(1)

6.95% 

(1)

Annual Rate of Increase in the Per Capita Medicare Part D Subsidy............................................................

7.13% 

(1)

7.30% 

(1)

7.60% 

(1)

(1) It was assumed that this rate would gradually decline to 4.5% by 2028.

 

 

 

Total Fair Value

Amounts at

September 30, 2012

 

 

Level 1

 

 

Level 2

 

 

Level 3

Retirement Plan Investments

Domestic Equities (1).........................................................................................................

$
358,679 
$
231,978 
$
126,701 

$

International Equities (2)....................................................................................................

96,451 
2,090 
94,361 

Domestic Fixed Income (3).............................................................................................

165,130 
70,730 
94,400 

International Fixed Income (4)........................................................................................

65,835 
1,941 
63,894 

Hedge Fund Investments.................................................................................................

39,956 

39,956 

Real Estate..............................................................................................................................

6,170 

6,170 

Cash and Cash Equivalents ..........................................................................................

12,874 

12,874 

Total Retirement Plan Investments..............................................................................

745,095 
306,739 
392,230 
46,126 

401(h) Investments.............................................................................................................

(43,311)
(17,818)
(22,813)
(2,680)

Total Retirement Plan Investments (excluding 401(h) Investments)...........

$
701,784 
$
288,921 
$
369,417 
$
43,446 

Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash.....

(108)

Total Retirement Plan Assets..........................................................................................

$
701,676 

 

 

 

 

 

Total Fair Value

Amounts at

September 30, 2011

 

 

Level 1

 

 

Level 2

 

 

Level 3

Retirement Plan Investments

Domestic Equities (1).........................................................................................................

$
313,193 
$
215,524 
$
97,669 

$

International Equities (2)....................................................................................................

79,732 
11,163 
68,569 

Domestic Fixed Income (3).............................................................................................

146,587 
77,657 
68,930 

International Fixed Income (4)........................................................................................

43,153 
887 
42,266 

Hedge Fund Investments.................................................................................................

39,296 

39,296 

Real Estate..............................................................................................................................

6,443 

6,443 

Cash and Cash Equivalents ..........................................................................................

10,629 

10,629 

Total Retirement Plan Investments..............................................................................

639,033 
305,231 
288,063 
45,739 

401(h) Investments.............................................................................................................

(37,176)
(17,744)
(16,773)
(2,659)

Total Retirement Plan Investments (excluding 401(h) Investments)...........

$
601,857 
$
287,487 
$
271,290 
$
43,080 

Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash.....

(138)

Total Retirement Plan Assets..........................................................................................

$
601,719 

 

(a)

Domestic Equities include mostly collective trust funds, common stock, and exchange traded funds.

(b)

International Equities include mostly collective trust funds and common stock.

(c)

Domestic Fixed Income securities include mostly collective trust funds, corporate/government bonds and mortgages, and exchange traded funds.

(d)

International Fixed Income securities includes mostly collective trust funds and exchange traded funds.

 

 

Retirement Plan Level 3 Assets

 

(Thousands)

 

Equity

 

 

 

Excluding

 

 

Convertible

Hedge

Limited

Real

401(h)

 

 

Securities

Funds

Partnerships

Estate

Investments

Total

Balance at September 30, 2010.......................................................

$
337 

$

$
245 
$
6,148 
$
(367)
$
6,363 

Realized Gains/(Losses)......................................................................

53 

(4,846)
20 
278 
(4,495)

Unrealized Gains/(Losses)..................................................................

(36)
(789)
4,853 
159 
(268)
3,919 

Purchases, Sales, Issuances, and Settlements (Net)..........

(354)
40,085 
(252)
116 
(2,302)
37,293 

Balance at September 30, 2011.......................................................

39,296 

6,443 
(2,659)
43,080 

Realized Gains/(Losses)......................................................................

         

 —

60 
(4)
56 

Unrealized Gains/(Losses)..................................................................

660 

(362)
(15)
283 

Purchases, Sales, Issuances, and Settlements (Net)..........

     

29 
(2)
27 

Balance at September 30, 2012 .....................................................

$

$
39,956 

$

$
6,170 
$
(2,680)
$
43,446 

 

 

 

 

 

 

 

 

 

 

 

Total Fair Value

Amounts at

September 30, 2012

 

 

Level 1

 

 

Level 2

 

 

Level 3

Other Post-Retirement Benefit Assets held in VEBA Trusts

Collective Trust Funds — Domestic Equities............................................................

$
179,059 

$

$
179,059 

$

Collective Trust Funds — International Equities......................................................

66,590 

66,590 

Exchange Traded Funds Fixed Income..................................................................

107,597 
107,597 

Real Estate................................................................................................................................

1,305 

1,305 

Cash Held in Collective Trust Funds.............................................................................

16,397 

16,397 

Total VEBA Trust Investments..........................................................................................

370,948 
107,597 
262,046 
1,305 

401(h) Investments................................................................................................................

43,311 
17,818 
22,813 
2,680 

Total Investments (including 401(h) Investments)..................................................

$
414,259 
$
125,415 
$
284,859 
$
3,985 

Miscellaneous Accruals (Including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)

(125)

Total Other Post-Retirement Benefit Assets..............................................................

$
414,134 

 

 

 

 

Total Fair Value

Amounts at

September 30, 2011

 

 

Level 1

 

 

Level 2

 

 

Level 3

Other Post-Retirement Benefit Assets held in VEBA Trusts

Collective Trust Funds — Domestic Equities............................................................

$
148,451 

$

$
148,451 

$

Collective Trust Funds — International Equities......................................................

55,411 

55,411 

Exchange Traded Funds Fixed Income..................................................................

91,214 
91,214 

Real Estate................................................................................................................................

1,561 

1,561 

Cash Held in Collective Trust Funds.............................................................................

12,890 

12,890 

Total VEBA Trust Investments..........................................................................................

309,527 
91,214 
216,752 
1,561 

401(h) Investments................................................................................................................

37,176 
17,744 
16,773 
2,659 

Total Investments (including 401(h) Investments)..................................................

$
346,703 
$
108,958 
$
233,525 
$
4,220 

Miscellaneous Accruals (Including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)

5,287 

Total Other Post-Retirement Benefit Assets..............................................................

$
351,990 

 

 

 

Other Post-Retirement Benefit Level 3 Assets

 

 

(Thousands)

 

VEBA

 

 

 

 

Trust

 

Other

 

 

Investments

Real

Including

401(h)

Post-Retirement

Benefit

 

 

Estate

Investments

Investments

 

Balance at September 30, 2010.........................................................................

$
3,824 
$
367 
$
4,191 

 

Realized Gains/(Losses)........................................................................................

(278)
(278)

 

Unrealized Gains/(Losses)....................................................................................

(2,263)
268 
(1,995)

 

Purchases, Sales, Issuances, and Settlements (Net)............................

2,302 
2,302 

 

Balance at September 30, 2011.........................................................................

1,561 
2,659 
4,220 

 

Realized Gains/(Losses)........................................................................................

 

Unrealized Gains/(Losses)....................................................................................

(256)
15 
(241)

 

Purchases, Sales, Issuances, and Settlements (Net)............................

 

Balance at September 30, 2012.........................................................................

$
1,305 
$
2,680 
$
3,985 

 

 

 

 

 

 

 

Discontinued Operations (Tables)
Selected Financial Information Of Discontinued Operations

 

 

 

    Year Ended September 30,  2010

 

(Thousands)

Operating Revenues...........................................................................................................................................................

$
9,919 

Operating Expenses............................................................................................................................................................

8,933 

Operating Income.................................................................................................................................................................

986 

Other Income..........................................................................................................................................................................

Interest Income.....................................................................................................................................................................

Interest Expense...................................................................................................................................................................

29 

Income before Income Taxes.........................................................................................................................................

963 

Income Tax Expense...........................................................................................................................................................

493 

Income from Discontinued Operations.......................................................................................................................

470 

Gain on Disposal, Net of Taxes of $4,024...............................................................................................................

6,310 

Income from Discontinued Operations.......................................................................................................................

$
6,780 

 

Business Segment Information (Tables)

 

Year Ended September 30, 2012

 

 

 

 

 

 

 

 Utility

 

Pipeline

and

Storage

 

 Exploration

and

  Production

 

 

Energy

Marketing

 

Total

Reportable

Segments

 

 

  All

  Other

Corporate

and

Intersegment

Eliminations

 

 

Total

Consolidated

 

(Thousands)

Revenue from External Customers(1)

$
704,518 
$
172,312 
$
558,180 
$
186,579 
$
1,621,589 
$
4,307 
$
957 
$
1,626,853 

Intersegment Revenues.....................

$
14,604 
$
86,963 

$              —

$
1,425 
$
102,992 
$
16,771 
$
(119,763)

$

Interest Income......................................

$
2,765 
$
199 
$
1,493 
$
188 
$
4,645 
$
175 
$
(1,131)
$
3,689 

Interest Expense....................................

$
33,181 
$
25,603 
$
29,243 
$
41 
$
88,068 
$
1,738 
$
(3,566)
$
86,240 

Depreciation, Depletion and Amortization

$
42,757 
$
38,182 
$
187,624 
$
90 
$
268,653 
$
2,091 
$
786 
$
271,530 

Income Tax Expense (Benefit)........

$
29,110 
$
37,655 
$
79,050 
$
1,933 
$
147,748 
$
4,335 
$
(1,529)
$
150,554 

Segment Profit: Net Income (Loss)

$
58,590 
$
60,527 
$
96,498 
$
4,169 
$
219,784 
$
6,868 
$
(6,575)
$
220,077 

Expenditures for Additions to Long-Lived Assets

$
58,284 
$
144,167 
$
693,810 
$
770 
$
897,031 
$
80,017 
$
346 
$
977,394 

 

 

 

At September 30, 2012

 

(Thousands)

Segment Assets.........................

$
2,070,413 
$
1,243,862 
$
2,367,485 
$
61,968 
$
5,743,728 
$
209,934 
$
(18,520)
$
5,935,142 

 

 

Year Ended September 30, 2011

 

 

 

 

 

 

 

 Utility

 

Pipeline

and

Storage

 

 Exploration

and

  Production

 

 

Energy

Marketing

 

Total

Reportable

Segments

 

 

  All

  Other

Corporate

and

Intersegment

Eliminations

 

 

Total

Consolidated

 

(Thousands)

Revenue from External Customers(1)

$
835,853 
$
134,071 
$
519,035 
$
284,546 
$
1,773,505 
$
4,401 
$
936 
$
1,778,842 

Intersegment Revenues.....................

$
16,642 
$
81,037 

$             

$
420 
$
98,099 
$
10,017 
$
(108,116)

$

Interest Income......................................

$
2,049 
$
324 
$
(27)
$
104 
$
2,450 
$
247 
$
219 
$
2,916 

Interest Expense....................................

$
34,440 
$
25,737 
$
17,402 
$
20 
$
77,599 
$
2,173 
$
(1,651)
$
78,121 

Depreciation, Depletion and Amortization

$
40,808 
$
37,266 
$
146,806 
$
47 
$
224,927 
$
840 
$
760 
$
226,527 

Income Tax Expense (Benefit)........

$
33,325 
$
19,854 
$
89,034 
$
4,489 
$
146,702 
$
18,961 
$
(1,282)
$
164,381 

Gain on Sale of Unconsolidated Subsidiaries

 

$

 

$

 

$                          

 

$

 

$

 

$50,879(2)

$

$
50,879 

Segment Profit: Net Income (Loss)

$
63,228 
$
31,515 
$
124,189 
$
8,801 
$
227,733 
$
38,502 
$
(7,833)
$
258,402 

Expenditures for Additions to Long-Lived Assets

$
58,398 
$
129,206 
$
648,815 
$
460 
$
836,879 
$
17,022 
$
285 
$
854,186 

 

 

At September 30, 2011

 

(Thousands)

Segment Assets.........................

$
2,001,546 
$
1,112,494 
$
1,885,014 
$
71,138 
$
5,070,192 
$
166,730 
$
(15,838)
$
5,221,084 

 

 

Year Ended September 30, 2010

 

 

 

 

 

 

 

   Utility

 

 Pipeline

 and

 Storage

 

 Exploration

and

 Production

 

 

Energy

Marketing

 

Total

Reportable

Segments

 

 

All

Other

Corporate

and

Intersegment

Eliminations

 

 

Total

Consolidated

 

(Thousands)

Revenue from External Customers(1)

$
804,466 
$
138,905 
$
438,028 
$
344,802 
$
1,726,201 
$
33,428 
$
874 
$
1,760,503 

Intersegment Revenues.....................

$
15,324 
$
79,978 

$                         

$

$
95,302 
$
2,315 
$
(97,617)

$              —

Interest Income......................................

$
2,144 
$
199 
$
980 
$
44 
$
3,367 
$
137 
$
225 
$
3,729 

Interest Expense....................................

$
35,831 
$
26,328 
$
30,853 
$
27 
$
93,039 
$
2,152 
$
(1,245)
$
93,946 

Depreciation, Depletion and Amortization

$
40,370 
$
35,930 
$
106,182 
$
42 
$
182,524 
$
7,907 
$
768 
$
191,199 

Income Tax Expense (Benefit)........

$
31,858 
$
22,634 
$
78,875 
$
4,806 
$
138,173 
$
464 
$
(1,410)
$
137,227 

Segment Profit: Income (Loss) from Continuing Operations

$
62,473 
$
36,703 
$
112,531 
$
8,816 
$
220,523 
$
3,396 
$
(4,786)
$
219,133 

Expenditures for Additions to Long-Lived Assets from Continuing Operations

$
57,973 
$
37,894 
$
398,174 
$
407 
$
494,448 
$
6,694 
$
210 
$
501,352 

 

 

At September 30, 2010

 

(Thousands)

Segment Assets...........................

$
2,027,101 
$
1,080,772 
$
1,539,705 
$
69,561 
$
4,717,139 
$
198,706 
$
131,209 
$
5,047,054 

 

 

(1)

All Revenue from External Customers originated in the United States.

 

 

(2)

In February 2011, the Company sold its 50% equity method investments in Seneca Energy and Model City for $59.4 million, resulting in a gain of $50.9 million.

 

 

 

 

 

 

 

Geographic Information

At September 30

 

2012

2011

2010

 

(Thousands)

Long-Lived Assets:

United States.......................................................................................................................................................

$
5,579,566 
$
4,809,183 
$
4,238,253 

 

 

 

Quarterly Financial Data (Tables)
Schedule Of Quarterly Financial Information

 

 

 

 

 

 

 

 

Net Income

Earnings per

Quarter

Operating

Operating

Available for

Common Share

Ended

Revenues

Income

Common Stock

Basic

Diluted

 

(Thousands, except per common share amounts)

2012

9/30/2012.........................................................................................

$
313,261 
$
107,265 

$48,802(1)

$
0.59 
$
0.58 

6/30/2012.........................................................................................

$
328,861 
$
90,293 
$
43,184 
$
0.52 
$
0.52 

3/31/2012.........................................................................................

$
552,308 
$
132,097 

$67,392(2)

$
0.81 
$
0.81 

12/31/2011.......................................................................................

$
432,423 
$
118,394 
$
60,699 
$
0.73 
$
0.73 

2011

9/30/2011.........................................................................................

$
286,034 
$
75,191 
$
37,356 
$
0.45 
$
0.45 

6/30/2011.........................................................................................

$
380,979 
$
94,805 
$
46,891 
$
0.57 
$
0.56 

3/31/2011.........................................................................................

$
660,881 
$
153,756 

$115,611(3)

$
1.40 
$
1.38 

12/31/2010......................................................................................

$
450,948 
$
117,410 
$
58,544 
$
0.71 
$
0.70 

 

 

(1)

 

 

(2)

 

 

(3)

Includes $12.8 million of income associated with the elimination of Supply Corporation’s post-retirement regulatory liability as specified in Supply Corporation’s rate case settlement.

 

Includes a $4.0 million accrual of a natural gas impact fee related to wells drilled prior to 2012 that was first imposed by Pennsylvania in 2012.  This fee was recorded in the Exploration and Production segment.

 

Includes a $31.4 million after tax gain on the sale of the Company’s 50% equity method investments in Seneca Energy and Model City.

 

 

Supplementary Information For Oil And Gas Producing Activities (Tables)

 

At September 30

 

2012

2011

 

(Thousands)

Proved Properties(1).....................................................................................................................................................................

$
2,789,181 
$
2,010,662 

Unproved Properties.....................................................................................................................................................................

146,084 
226,276 

 

2,935,265 
2,236,938 

Less — Accumulated Depreciation, Depletion and Amortization.............................................................................

681,798 
499,671 

 

$
2,253,467 
$
1,737,267 

 

 

 

(1)

Includes asset retirement costs of $43.1 million and  $32.7 million at September 30, 2012 and 2011, respectively.

 

 

Total

 

 

as of

 

 

September 30,

Year Costs Incurred

 

2012

2012

2011

2010

Prior

 

(Thousands)

Acquisition Costs..............................................................................................................

$
87,280 
$
6,195 

$

$
69,206 
$
11,879 

Development Costs........................................................................................................

21,947 
15,225 
6,722 

Exploration Costs.............................................................................................................

33,891 
33,891 

Capitalized Interest..........................................................................................................

2,966 
2,966 

 

$
146,084 
$
58,277 
$
6,722 
$
69,206 
$
11,879 

 

 

    Year Ended September 30

 

2012

   2011

2010

United States

(Thousands)

Property Acquisition Costs:

Proved..........................................................................................................................................................................

$
13,095 
$
28,838 
$
790 

Unproved....................................................................................................................................................................

13,867 
20,012 
80,221 

Exploration Costs (1).............................................................................................................................................

84,624 
62,651 

        75,155

Development Costs (2)........................................................................................................................................

576,397 
531,372 
234,094 

Asset Retirement Costs......................................................................................................................................

10,344 
12,087 
3,901 

 

$
698,327 
$
654,960 
$
394,161 

 

 

 

 

(1)

Amounts for 2012, 2011 and 2010 include capitalized interest of $1.0 million, $0.8 million and $0.2 million, respectively. 

 

 

(2)

Amounts for 2012, 2011 and 2010 include capitalized interest of $2.0 million, $0.7 million and $0.9 million, respectively. 

 

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands, except per Mcfe amounts)

United States

Operating Revenues:

Natural Gas (includes revenues from sales to affiliates of $1, $23 and $253,  

respectively)

$
181,544 
$
223,648 
$
152,163 

Oil, Condensate and Other Liquids...................................................................................................................

307,018 
273,952 
233,569 

Total Operating Revenues(1)...............................................................................................................................

488,562 
497,600 
385,732 

Production/Lifting Costs........................................................................................................................................

83,361 
73,250 
61,398 

Franchise/Ad Valorem Taxes...............................................................................................................................

23,620 
12,179 
10,592 

Accretion Expense...................................................................................................................................................

3,084 
3,668 
5,444 

Depreciation, Depletion and Amortization ($2.19, $2.12 and $2.10 per Mcfe of production)

182,759 
143,372 
104,092 

Income Tax Expense .............................................................................................................................................

81,904 
110,117 
83,946 

Results of Operations for Producing Activities (excluding corporate overheads and interest charges)

$
113,834 
$
155,014 
$
120,260 

 

 

(1)

Exclusive of hedging gains and losses. See further discussion in Note G — Financial Instruments.

 

 

 

 

Gas MMcf

 

U. S.

 

 

 

 

 

Appalachian

Region

 

West

Coast

Region

 

Gulf Coast

Region

 

Total

Company      

Proved Developed and Undeveloped Reserves:

 

September 30, 2009..................................................................................................................................

149,828 

 

72,959 
26,167 
248,954 

Extensions and Discoveries.................................................................................................................

189,979 
(1)
269 
2,881 
193,129 

Revisions of Previous Estimates......................................................................................................

7,677 

 

2,315 
6,683 
16,675 

Production......................................................................................................................................................

(16,222)
(2)
(3,819)
(10,304)
(30,345)

September 30, 2010..................................................................................................................................

331,262 

 

71,724 
25,427 
428,413 

Extensions and Discoveries.................................................................................................................

249,047 
(1)
195 
158 
249,400 

Revisions of Previous Estimates......................................................................................................

24,486 

 

526 
1,373 
26,385 

Production......................................................................................................................................................

(42,979)
(2)
(3,447)
(4,041)
(50,467)

Purchases of Minerals in Place...........................................................................................................

44,790 

 

44,790 

Sales of Minerals in Place......................................................................................................................

 

(682)
(22,917)
(23,599)

September 30, 2011..................................................................................................................................

606,606 

 

68,316 

674,922 

Extensions and Discoveries.................................................................................................................

435,460 
(1)
638 

436,098 

Revisions of Previous Estimates......................................................................................................

(53,992)

 

(2,463)

(56,455)

Production......................................................................................................................................................

(62,663)
(2)
(3,468)

(66,131)

September 30, 2012..................................................................................................................................

925,411 

 

63,023 

988,434 

 

 

 

 

 

 

Proved Developed Reserves:

 

September 30, 2009..................................................................................................................................

120,579 

 

67,603 
18,051 
206,233 

September 30, 2010..................................................................................................................................

210,817 

 

66,178 
19,293 
296,288 

September 30, 2011..................................................................................................................................

350,458 

 

63,965 

414,423 

September 30, 2012..................................................................................................................................

544,560 

 

59,923 

604,483 

Proved Undeveloped Reserves:

 

September 30, 2009..................................................................................................................................

29,249 

 

5,356 
8,116 
42,721 

September 30, 2010..................................................................................................................................

120,445 

 

5,546 
6,134 
132,125 

September 30, 2011..................................................................................................................................

256,148 

 

4,351 

260,499 

September 30, 2012..................................................................................................................................

380,851 

 

3,100 

383,951 

 

 

(1)

Extensions and discoveries include 182 Bcf (during 2010), 249 Bcf (during 2011) and 435 Bcf (during 2012), of Marcellus Shale gas in the Appalachian Region.

 

 

(2)

Production includes 7,180 MMcf (during 2010), 35,356 MMcf (during 2011) and 55,812 MMcf (during 2012), from Marcellus Shale fields (which exceed 15% of total reserves). 

 

 

Oil Mbbl

 

         U. S.

 

 

 

 

 

Appalachian

Region

     West

     Coast

     Region

   Gulf

  Coast

  Region

 

Total

Company      

Proved Developed and Undeveloped Reserves:

September 30, 2009.........................................................................................................................................

311 
44,824 
1,452 
46,587 

Extensions and Discoveries........................................................................................................................

828 
222 
1,054 

Revisions of Previous Estimates.............................................................................................................

484 
332 
818 

Production.............................................................................................................................................................

(49)

(2,669)(1)

(502)
(3,220)

September 30, 2010.........................................................................................................................................

268 
43,467 
1,504 
45,239 

Extensions and Discoveries........................................................................................................................

10 
756 
767 

Revisions of Previous Estimates.............................................................................................................

46 
1,909 
(339)
1,616 

Production.............................................................................................................................................................

(45)
(2,628)
(187)
(2,860)

Sales of Minerals in Place.............................................................................................................................

(438)
(979)
(1,417)

September 30, 2011.........................................................................................................................................

279 
43,066 

43,345 

Extensions and Discoveries........................................................................................................................

28 
1,229 

1,257 

Revisions of Previous Estimates.............................................................................................................

35 
1,095 

1,130 

Production.............................................................................................................................................................

(36)
(2,834)

(2,870)

September 30, 2012.........................................................................................................................................

306 
42,556 

42,862 

 

 

 

 

 

Proved Developed Reserves:

September 30, 2009.........................................................................................................................................

285 
37,711 
1,194 
39,190 

September 30, 2010.........................................................................................................................................

263 
36,353 
1,066 
37,682 

September 30, 2011.........................................................................................................................................

274 
37,306 

    —

37,580 

September 30, 2012.........................................................................................................................................

306 
38,138 

    —

38,444 

Proved Undeveloped Reserves:

September 30, 2009.........................................................................................................................................

26 
7,113 
258 
7,397 

September 30, 2010.........................................................................................................................................

7,114 
438 
7,557 

September 30, 2011.........................................................................................................................................

5,760 

    —

5,765 

September 30, 2012.........................................................................................................................................

4,418 

    —

4,418 

 

 

(1)

The Midway Sunset North fields (which exceeded 15% of total reserves at September 30, 2010) contributed 1,543 Mbbls of production during 2010. As of September 30, 2012 and 2011, the Midway Sunset North fields were below 15% of total reserves.

 

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands)

United States

Future Cash Inflows.........................................................................................................................................

$
7,373,129 
$
7,180,320 
$
5,273,605 

Less:

Future Production Costs................................................................................................................................

1,919,530 
1,555,603 
1,347,855 

Future Development Costs..........................................................................................................................

619,573 
636,745 
445,413 

Future Income Tax Expense at Applicable Statutory Rate............................................................

1,812,055 
1,834,778 
1,186,567 

Future Net Cash Flows...................................................................................................................................

3,021,971 
3,153,194 
2,293,770 

Less:

10% Annual Discount for Estimated Timing of Cash Flows..........................................................

1,552,180 
1,629,037 
1,120,182 

Standardized Measure of Discounted Future Net Cash Flows.....................................................

$
1,469,791 
$
1,524,157 
$
1,173,588 

 

 

Year Ended September 30

 

2012

2011

2010

 

(Thousands)

United States

Standardized Measure of Discounted Future

Net Cash Flows at Beginning of Year................................................................................................

$
1,524,157 
$
1,173,588 
$
875,977 

Sales, Net of Production Costs............................................................................................................

(381,581)
(412,172)
(313,742)

Net Changes in Prices, Net of Production Costs.........................................................................

(385,019)
404,445 
176,530 

Purchases of Minerals in Place.............................................................................................................

52,697 

Sales of Minerals in Place........................................................................................................................

(73,633)

Extensions and Discoveries...................................................................................................................

224,474 
218,140 
329,555 

Changes in Estimated Future Development Costs.....................................................................

29,627 
(85,191)
(17,353)

Previously Estimated Development Costs Incurred...................................................................

252,967 
168,275 
47,539 

Net Change in Income Taxes at Applicable Statutory Rate.....................................................

(19,280)
(249,773)
(85,703)

Revisions of Previous Quantity Estimates.....................................................................................

103,472 
124,545 
46,246 

Accretion of Discount and Other..........................................................................................................

120,974 
203,236 
114,539 

Standardized Measure of Discounted Future Net Cash Flows at End of Year...............

$
1,469,791 
$
1,524,157 
$
1,173,588 

 

Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
6 Months Ended 12 Months Ended
Mar. 31, 2011
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2009
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Net Proceeds from Sale of Unconsolidated Subsidiaries
 
$ 0 
$ 59,365,000 
$ 0 
 
Gain on Sale of Unconsolidated Subsidiaries
 
50,879,000 
 
Gain on sale of equity method investment
 
50,879,000 
 
Regulatory assets
 
731,515,000 1
660,453,000 1
 
 
Change in other liabilities
 
(8,038,000)
(27,470,000)
861,000 
 
Other Accruals and Current Liabilities
 
79,099,000 
108,636,000 
 
 
Other current assets
 
56,121,000 
64,923,000 
 
 
Full cost ceiling test discount factor
 
10.00% 
 
 
 
Proceeds from sale of properties
 
63,501,000 
 
Asset retirement obligation
37,500,000 
 
 
 
 
Goodwill
 
5,476,000 
5,476,000 
 
 
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax
 
(1,602,000)
40,979,000 
 
 
Reduction in cash inflow related to accounts payable
 
 
16,700,000 
12,700,000 
 
Accrued capital expenditure, non-cash investing activity
 
52,557,000 
111,947,000 
78,632,000 
20,231,000 
Net unrealized gain on derivative financial instruments
 
(1,602,000)
40,979,000 
 
 
Hedging collateral deposits
 
364,000 
19,701,000 
 
 
Customer advances
 
24,055,000 
19,643,000 
 
 
Customer security deposits
 
17,942,000 
17,321,000 
 
 
Antidilutive securities
 
844,872 
314,910 
 
Tax benefit realized from exercise of stock options and performance based SARs
 
14,200,000 
19,000,000 
12,800,000 
 
Tax benefit recorded from exercise of stock options
 
600,000 
400,000 
12,200,000 
 
Stock-based compensation expense
 
7,200,000 
6,700,000 
4,400,000 
 
Tax benefit related to stock-based compensation expense
 
2,900,000 
2,700,000 
1,800,000 
 
Capitalized stock-based compensation costs
 
 
Number of shares subject to option, granted
 
 
 
 
Unrecognized compensation recognized weighted average period
 
4 years 
 
 
 
Accumulated Other Comprehensive Income (Loss), Defined Benefit Pension and Other Postretirement Plans, Net of Tax
 
100,561,000 
89,587,000 
 
 
Increase decrease estimated future net cash flows
 
128,400,000 
35,400,000 
65,400,000 
 
Amount full cost ceiling exceeds book value of oil and gas properties
 
55,300,000 
 
 
 
Deferred income tax liabilities
 
1,065,757,000 
955,384,000 
 
 
Unrealized gain on derivative financial instruments to be reclassified within twelve months
 
10,600,000 
 
 
 
Unrealized gain on derivative financial instruments to be reclassified after twelve months
 
12,200,000 
 
 
 
Accumulated losses
 
100,561,000 
89,587,000 
 
 
Gas stored underground - current
 
49,795,000 
54,325,000 
 
 
Prior service costs
 
400,000 
500,000 
 
 
Exploration And Production [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Gain on Sale of Unconsolidated Subsidiaries
 
 
 
 
All Other And Corporate [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Gain on Sale of Unconsolidated Subsidiaries
 
50,879,000 2
 
 
 
Pipeline And Storage [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Gain on Sale of Unconsolidated Subsidiaries
 
 
 
 
Oil and Gas Properties [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Proceeds from sale of properties
 
 
55,400,000 
 
 
Seneca Energy And Model City [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Equity method investment ownership percentage
50.00% 
 
 
 
 
Stock Options [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Options, exercises in period, total intrinsic value
 
13,500,000 
44,600,000 
53,600,000 
 
Options, vested in period, total fair value
 
 
 
700,000 
 
Options, vested and expected to vest, outstanding, number
 
100,000 
 
Proceeds from stock options exercised
 
7,600,000 
9,500,000 
34,500,000 
 
Number of shares subject to option, granted
 
 
Unrecognized compensation expense
 
 
 
 
Restricted Share Awards [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Share based compensation other than options grants in period
 
41,525 
47,250 
4,000 
 
Granted in fiscal year, weighted average grant date fair value
 
$ 55.09 
$ 63.98 
$ 52.10 
 
Unrecognized compensation expense
 
4,000,000 
 
 
 
Unrecognized compensation expense recognized weighted average period
 
2 years 4 months 24 days 
 
 
 
Equity instruments other than options, vested in period
 
18,740 
 
 
 
Non Performance Based SARs [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Share based compensation other than options grants in period
 
166,000 
195,000 
 
 
Granted in fiscal year, weighted average grant date fair value
 
$ 11.20 
$ 15.01 
 
 
Equity instruments other than options, vested in period, total fair value
 
900,000 
 
400,000 
 
Unrecognized compensation expense
 
1,100,000 
 
 
 
Unrecognized compensation expense recognized weighted average period
 
10 months 6 days 
 
 
 
Equity instruments other than options, vested in period
 
59,990 
50,000 
 
Performance Based SARs [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Share based compensation other than options grants in period
 
 
520,500 
 
Granted in fiscal year, weighted average grant date fair value
 
 
 
$ 12.06 
 
Equity instruments other than options, vested in period, total fair value
 
2,900,000 
2,900,000 
800,000 
 
Unrecognized compensation expense
 
100,000 
 
 
 
Unrecognized compensation expense recognized weighted average period
 
3 months 
 
 
 
Equity instruments other than options, vested in period
 
375,179 
376,819 
203,324 
 
Total intrinsic value of performance based SAR's exercised
 
100,000 
300,000 
 
 
Restricted Stock Units [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Share based compensation other than options grants in period
 
68,450 
41,800 
 
 
Granted in fiscal year, weighted average grant date fair value
 
$ 47.10 
$ 59.35 
 
 
Unrecognized compensation expense
 
3,900,000 
 
 
 
Unrecognized compensation expense recognized weighted average period
 
2 years 
 
 
 
Equity instruments other than options, vested in period
 
 
 
 
Exchange-Traded Futures Contracts [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Hedging collateral deposits
 
400,000 
5,500,000 
 
 
Over-The-Counter Crude Oil Swap Agreements [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Hedging collateral deposits
 
 
14,200,000 
 
 
Reclassification Of Regulatory Liabilities To Regulatory AssetsDue To Change From Gross To Net Methodology [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Regulatory assets
 
 
63,700,000 
 
 
Reclassification Of Regulatory Assets To Other Current Assets [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Other current assets
 
 
26,600,000 
 
 
Reclassification Of Regulatory Liabilities To Other Accruals and Current Liabilities [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Other Accruals and Current Liabilities
 
 
13,800,000 
 
 
Amount Exceeds LIFO Basis [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Gas stored underground - current
 
46,000,000 
 
 
 
LIFO Method [Member]
 
 
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
Gas stored underground - current
 
$ 34,800,000 
 
 
 
Summary Of Significant Accounting Policies (Schedule Of Depreciable Plant By Segment) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Summary Of Significant Accounting Policies [Line Items]
 
 
Depreciable plant
$ 6,171,894 
$ 5,127,614 
Utility [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Depreciable plant
1,737,645 
1,695,702 
Pipeline And Storage [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Depreciable plant
1,406,433 
1,260,301 
Exploration And Production [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Depreciable plant
2,828,358 
2,042,225 
Energy Marketing [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Depreciable plant
2,865 
2,095 
All Other And Corporate [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Depreciable plant
$ 196,593 
$ 127,291 
Summary Of Significant Accounting Policies (Average Depreciation Depletion And Amortization Rates) (Details) (USD $)
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Oil And Gas Producing Properties [Member]
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
Depreciation depletion and amortization rate per Mcfe
$ 2.19 
$ 2.12 
$ 2.10 
Utility [Member]
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
Average depreciation, depletion and amortization rates
2.60% 
2.60% 
2.60% 
Pipeline And Storage [Member]
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
Average depreciation, depletion and amortization rates
2.90% 
3.10% 
3.00% 
Exploration And Production [Member]
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
Depreciation depletion and amortization rate per Mcfe
$ 2.25 1
$ 2.17 1
$ 2.14 1
Energy Marketing [Member]
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
Average depreciation, depletion and amortization rates
3.60% 
2.50% 
2.90% 
All Other And Corporate [Member]
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
Average depreciation, depletion and amortization rates
1.80% 
1.30% 
6.80% 
Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Summary Of Significant Accounting Policies [Abstract]
 
 
Funded Status of the Pension and Other Post-Retirement Benefit Plans
$ (100,561)
$ (89,587)
Net Unrealized Gain on Derivative Financial Instruments
(1,602)
40,979 
Net Unrealized Gain on Securities Available for Sale
3,143 
909 
Accumulated Other Comprehensive Loss
$ (99,020)
$ (47,699)
Summary Of Significant Accounting Policies (Components Of Non-Cash Capital Expenditures) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2009
Summary Of Significant Accounting Policies [Abstract]
 
 
 
 
Non-cash Capital Expenditures
$ 52,557 
$ 111,947 
$ 78,632 
$ 20,231 
Summary Of Significant Accounting Policies (Components Of Other Current Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Summary Of Significant Accounting Policies [Line Items]
 
 
Prepayments
$ 8,316 
$ 9,489 
Prepaid Property and Other Taxes
14,455 
13,240 
Fair Values of Firm Commitments
1,291 
9,096 
Regulatory Assets
29,726 1
26,589 1
Other Current Assets
56,121 
64,923 
Federal [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Income Taxes Receivable
268 
385 
State [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Income Taxes Receivable
$ 2,065 
$ 6,124 
Summary Of Significant Accounting Policies (Component Of Other Accruals And Current Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Summary Of Significant Accounting Policies [Abstract]
 
 
Accrued Capital Expenditures
$ 36,460 
$ 72,121 
Regulatory Liability
38,253 
29,368 
Other
4,386 
7,147 
Total Other Accruals and Current Liabilities
$ 79,099 
$ 108,636 
Summary Of Significant Accounting Policies (Weighted Average Assumptions Used In Estimating Fair Value) (Details)
12 Months Ended
Sep. 30, 2012
Non Performance Based SARs [Member]
Sep. 30, 2011
Non Performance Based SARs [Member]
Sep. 30, 2010
Performance Based SARs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Risk Free Interest Rate
1.59% 
2.94% 
3.55% 
Expected Life (Years)
8 years 3 months 
8 years 
7 years 9 months 
Expected Volatility
24.97% 
23.38% 
23.25% 
Expected Dividend Yield (Quarterly)
0.64% 
0.55% 
0.64% 
Asset Retirement Obligations (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Asset Retirement Obligations [Abstract]
 
 
 
Balance at Beginning of Year
$ 75,731 
$ 101,618 
$ 91,373 
Liabilities Incurred and Revisions of Estimates
41,653 
10,346 
16,140 
Liabilities Settled
(2,997)
(41,704)
(12,622)
Accretion Expense
4,859 
5,471 
6,727 
Balance at End of Year
$ 119,246 
$ 75,731 
$ 101,618 
Regulatory Matters (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Sep. 30, 2012
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Regulatory Matters [Abstract]
 
 
 
 
Elimination Of Other Post Retirement Regulatory Liability
$ 21,700 
$ (21,672)
$ 0 
$ 0 
Regulatory Matters (Schedule Of Regulatory Assets And Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Regulatory Assets [Line Items]
 
 
Total Regulatory Assets
$ 731,515 1
$ 660,453 1
Less: Amounts Included in Other Current Assets
(29,726)1
(26,589)1
Total Long-Term Regulatory Assets
546,851 
484,397 
Total Regulatory Liabilities
265,270 
248,028 
Current regulatory liabilities
38,253 
29,368 
Total Long-Term Regulatory Liabilities
21,014 
17,177 
Cost Of Removal Regulatory Liability [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Liabilities
139,611 
135,940 
Taxes Refundable To Customers [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Liabilities
66,392 
65,543 
Amounts Payable To Customers [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Liabilities
19,964 
15,519 
Off-System Sales And Capacity Release Credits [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Liabilities
16,262 2
7,675 2
Other Accruals and Current Liabilities [Member]
 
 
Regulatory Assets [Line Items]
 
 
Current regulatory liabilities
2,027 
6,174 
Other Regulatory Liabilities [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Liabilities
23,041 3
23,351 3
Total Long-Term Regulatory Liabilities
(21,014)
(17,177)
Non-Current Regulatory Liabilities [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Long-Term Regulatory Liabilities
227,017 
218,660 
Pension Costs Asset [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Assets
344,228 1 4
319,906 1 4
Post-Retirement Benefit Costs [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Assets
154,415 1 4
124,423 1 4
Recoverable Future Taxes [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Assets
150,941 1
144,377 1
Environmental Site Remediation Costs [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Assets
17,843 1 4
20,095 1 4
NYPSC Assessment [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Assets
17,420 1 5
15,063 1 5
Asset Retirement Obligations [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Assets
26,942 1 4
13,860 1 4
Unamortized Debt Expense [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Assets
3,997 1
5,090 1
Other Regulatory Assets [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Regulatory Assets
15,729 1 6
17,639 1 6
Total Long-Term Regulatory Assets
3,423 
6,113 
Other Current Assets [Member]
 
 
Regulatory Assets [Line Items]
 
 
Less: Amounts Included in Other Current Assets
(12,306)
(11,526)
Long-Term Regulatory Assets [Member]
 
 
Regulatory Assets [Line Items]
 
 
Total Long-Term Regulatory Assets
$ 701,789 1
$ 633,864 1
Income Taxes (Narrative) (Details) (USD $)
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Income Taxes [Line Items]
 
 
 
Taxes refundable to customers
$ 66,392,000 
$ 65,543,000 
 
Recoverable future taxes
150,941,000 
144,377,000 
 
Tax benefit not realized due to tax loss carryforwards
32,700,000 
19,100,000 
 
Interest expense
300,000 
300,000 
300,000 
Accrued penalties
Federal net operating loss, certain annual limitations
23,000,000 
 
 
Federal net operating loss, excess tax deductions related to stock based compensation
84,000,000 
 
 
Valuation allowance
 
 
Change in unrecognized tax benefits
7,300,000 
 
 
Unrecognized tax benefits that would impact effective tax rate
4,900,000 
 
 
Deferred Income Taxes [Member]
 
 
 
Income Taxes [Line Items]
 
 
 
Regulatory liabilities
47,300,000 
47,300,000 
 
Regulatory assets
65,900,000 
60,500,000 
 
PENNSYLVANIA
 
 
 
Income Taxes [Line Items]
 
 
 
Net operating loss
278,000,000 
 
 
CALIFORNIA
 
 
 
Income Taxes [Line Items]
 
 
 
Net operating loss
155,000,000 
 
 
NEW YORK
 
 
 
Income Taxes [Line Items]
 
 
 
Net operating loss
138,000,000 
 
 
Federal [Member]
 
 
 
Income Taxes [Line Items]
 
 
 
Net operating loss
$ 565,000,000 
 
 
Income Taxes (Components Of Federal And State Income Taxes Included In The Consolidated Statements Of Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Income Taxes [Abstract]
 
 
 
Current Income Taxes - Federal
$ (8)
$ (1,390)
$ 2,074 
Current Income Taxes - State
6,412 
1,520 
4,991 
Deferred Income Taxes - Federal
111,176 
130,434 
110,515 
Deferred Income Taxes - State
32,974 
33,817 
24,164 
Income Tax Expense
150,554 
164,381 
141,744 
Deferred Investment Tax Credit
(581)
(697)
(697)
Total Income Taxes
149,973 
163,684 
141,047 
Other Income
(581)
(697)
(697)
Income Tax Expense - Continuing Operations
150,554 
164,381 
137,227 
Income from Discontinued Operations
493 
Gain on Disposal
$ 0 
$ 0 
$ 4,024 
Income Taxes (Schedule Of Income Tax Reconciliation By Applying Federal Income Tax Rate) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Income Taxes [Abstract]
 
 
 
U.S. Income Before Income Taxes
$ 370,050 
$ 422,086 
$ 366,960 
Income Tax Expense, Computed at U.S. Federal Statutory Rate of 35%
129,518 
147,730 
128,436 
Increase (Reduction) in Taxes Resulting from State Income Taxes
25,601 
22,969 
18,951 
Increase (Reduction) in Taxes Resulting From Miscellaneous
(5,146)
(7,015)
(6,340)
Total Income Taxes
$ 149,973 
$ 163,684 
$ 141,047 
Federal Statutory Rate
35.00% 
 
 
Income Taxes (Significant Components Of Deferred Tax Liabilities And Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Income Taxes [Abstract]
 
 
Property, Plant and Equipment
$ 1,333,574 
$ 1,062,255 
Pension and Other Post-Retirement Benefit Costs
236,431 
217,302 
Other
43,294 
70,389 
Total Deferred Tax Liabilities
1,613,299 
1,349,946 
Pension and Other Post-Retirement Benefit Costs
(276,501)
(263,606)
Tax Loss Carryforwards
(198,744)
(71,516)
Other
(83,052)
(74,863)
Total Deferred Tax Assets
(558,297)
(409,985)
Total Net Deferred Income Taxes
1,055,002 
939,961 
Net Deferred Tax Liability/(Asset) - Current
(10,755)
(15,423)
Net Deferred Tax Liability - Non-Current
$ 1,065,757 
$ 955,384 
Income Taxes (Reconciliation Of The Change In Unrecognized Tax Benefits) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Income Taxes [Abstract]
 
 
 
Balance at Beginning of Year
$ 7,766 
$ 8,490 
$ 8,721 
Additions for Tax Positions Related to Current Year
1,600 
80 
699 
Additions for Tax Positions of Prior Years
2,751 
107 
45 
Reductions for Tax Positions of Prior Years
(947)
(911)
(975)
Balance at End of Year
$ 11,170 
$ 7,766 
$ 8,490 
Capitalization And Short-Term Borrowings (Narrative) (Details) (USD $)
12 Months Ended 0 Months Ended 12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2012
Stock Options and SARs [Member]
Sep. 30, 2012
6.50% Notes Due April 2018 And 8.75% Notes Due May 2019 [Member]
Sep. 30, 2012
8.75% Notes Due In May 2019 [Member]
Sep. 30, 2012
6.50% Notes Mature In April 2018 [Member]
Sep. 30, 2011
6.70% Medium-Term Notes November 2011 [Member]
Dec. 1, 2011
4.90% Notes Due December 1, 2021 [Member]
Sep. 30, 2012
Indenture From 1974 [Member]
Sep. 30, 2012
Commercial Paper [Member]
Sep. 30, 2012
Notes Payable [Member]
Sep. 30, 2012
2013 [Member]
Sep. 30, 2012
2014 [Member]
Sep. 30, 2012
2014 [Member]
Restricted Stock Units [Member]
Sep. 30, 2012
2015 [Member]
Sep. 30, 2012
2015 [Member]
Restricted Stock Units [Member]
Sep. 30, 2012
2016 [Member]
Sep. 30, 2012
2016 [Member]
Restricted Stock Units [Member]
Sep. 30, 2012
2017 [Member]
Restricted Stock Units [Member]
Sep. 30, 2012
2018 [Member]
Sep. 30, 2012
2021 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issue shares of common stock for the Direct Stock Purchase and Dividend Reinvestment Plan
155,310 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock Issued During Period, Shares, Stock Options Exercised
476,243 
 
 
465,894 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued for restricted stock
41,525 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued under retainer policy
15,755 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares tendered
161,021 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of voting power
10% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity redemption price per share
$ 0.005 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of assets or earning power that are sold or transferred
50.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Voting power percentage to redeem rights
75.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rights expiration date
July 31, 2018 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of principal amount
 
 
 
 
101.00% 
 
 
 
101.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying Amount
$ 1,399,000,000 
$ 1,049,000,000 
 
 
 
 
 
 
 
$ 99,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, face value
 
 
 
 
 
250,000,000 
300,000,000 
 
500,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, interest rate
7.10% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, interest rate
 
 
 
 
 
8.75% 
6.50% 
6.70% 
4.90% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal amounts of long-term debt maturing in 2013
250,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal amounts of long-term debt maturing in 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal amounts of long-term debt maturing in 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal amounts of long-term debt maturing in 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal amounts of long-term debt maturing in 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal amounts of long-term debt maturing after 2017
1,149,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lines of credit aggregate value
335,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial paper
300,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
750,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial paper, outstanding
165,000,000 
40,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average interest rate
 
0.43% 
 
 
 
 
 
 
 
 
0.50% 
0.60% 
 
 
 
 
 
 
 
 
 
 
Line of Credit Facility, Expiration Date
Jan. 06, 2017 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short-term notes payable outstanding
6,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Committed credit facility debt to capitalization ratio
65.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt to capitalization ratio
44.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional borrowing
2,070,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum debt increase under existing indenture covenants
1,510,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregated indebtedness
40,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net proceeds from issuance of long-term debt
496,085,000 
 
 
 
 
 
496,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current portion of long-term debt
 
 
 
 
 
 
 
$ 150,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock, shares authorized
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock par value
$ 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Lapse
 
 
 
 
 
 
 
 
 
 
 
 
34,582 
34,601 
12,932 
32,852 
35,300 
5,000 
35,301 
22,367 
35,000 
20,000 
Non-vested restricted stock lapse
 
 
 
 
 
 
 
 
 
 
 
 
34,582 
34,601 
12,932 
32,852 
35,300 
5,000 
35,301 
22,367 
35,000 
20,000 
Capitalization And Short-Term Borrowings (Summary Of Changes In Common Stock Equity) (Details) (USD $)
3 Months Ended 12 Months Ended
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Schedule of Capitalization [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Beginning balance (shares)
 
 
 
82,812,677 
 
 
 
 
82,812,677 
 
 
Beginning balance
 
 
 
$ 650,749,000 
 
 
 
 
$ 650,749,000 
 
 
Balance at Beginning of Year
 
 
 
1,206,022,000 
 
 
 
1,063,262,000 
1,206,022,000 
1,063,262,000 
948,293,000 
Beginning balance
 
 
 
(47,699,000)
 
 
 
 
(47,699,000)
 
 
Net Income Available for Common Stock
48,802,000 1
43,184,000 
67,392,000 2
60,699,000 
37,356,000 
46,891,000 
115,611,000 3
58,544,000 
220,077,000 
258,402,000 
225,913,000 
Dividends on Common Stock
 
 
 
 
 
 
 
 
(119,815,000)
(115,642,000)
(110,944,000)
Other Comprehensive Income (Loss), Net of Tax
 
 
 
 
 
 
 
 
(51,321,000)
(2,714,000)
(2,589,000)
Share-Based Payment Expense
 
 
 
 
 
 
 
 
7,200,000 
6,700,000 
4,400,000 
Ending balance (Shares)
83,330,140 
 
 
 
82,812,677 
 
 
 
83,330,140 
82,812,677 
 
Ending balance
669,501,000 
 
 
 
650,749,000 
 
 
 
669,501,000 
650,749,000 
 
Balance at End of Year
1,306,284,000 
 
 
 
1,206,022,000 
 
 
 
1,306,284,000 
1,206,022,000 
1,063,262,000 
Ending balance
(99,020,000)
 
 
 
(47,699,000)
 
 
 
(99,020,000)
(47,699,000)
 
Tax benefits associated with the exercise of stock options
 
 
 
 
 
 
 
 
985,000 
(1,224,000)
13,207,000 
Dividend per share
 
 
 
 
 
 
 
 
$ 1.44 
$ 1.40 
$ 1.36 
Accumulated earnings free from limitations
1,200,000,000 
 
 
 
 
 
 
 
1,200,000,000 
 
 
Common Stock [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of Capitalization [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Beginning balance (shares)
 
 
 
82,813,000 
 
 
 
82,075,000 
82,813,000 
82,075,000 
80,500,000 
Beginning balance (value)
 
 
 
82,813,000 
 
 
 
82,075,000 
82,813,000 
82,075,000 
80,500,000 
Common Stock Issued Under Stock and Benefit Plans (shares)
 
 
 
 
 
 
 
 
517,000 4
738,000 4
1,575,000 4
Common Stock Issued Under Stock and Benefit Plans (value)
 
 
 
 
 
 
 
 
517,000 4
738,000 4
1,575,000 4
Ending balance (Shares)
83,330,000 
 
 
 
82,813,000 
 
 
 
83,330,000 
82,813,000 
82,075,000 
Ending balance (Value)
83,330,000 
 
 
 
82,813,000 
 
 
 
83,330,000 
82,813,000 
82,075,000 
Paid In Capital [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of Capitalization [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
 
 
650,749,000 
 
 
 
645,619,000 
650,749,000 
645,619,000 
602,839,000 
Share-Based Payment Expense
 
 
 
 
 
 
 
 
7,156,000 5
6,656,000 5
4,435,000 5
Common Stock Issued Under Stock and Benefit Plans (value)
 
 
 
 
 
 
 
 
11,596,000 4
(1,526,000)4
38,345,000 4
Ending balance
669,501,000 
 
 
 
650,749,000 
 
 
 
669,501,000 
650,749,000 
645,619,000 
Earnings Reinvested In The Business [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of Capitalization [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Balance at Beginning of Year
 
 
 
1,206,022,000 
 
 
 
1,063,262,000 
1,206,022,000 
1,063,262,000 
948,293,000 
Net Income Available for Common Stock
 
 
 
 
 
 
 
 
220,077,000 
258,402,000 
225,913,000 
Dividends on Common Stock
 
 
 
 
 
 
 
 
(119,815,000)
(115,642,000)
(110,944,000)
Balance at End of Year
1,306,284,000 6
 
 
 
1,206,022,000 
 
 
 
1,306,284,000 6
1,206,022,000 
1,063,262,000 
Accumulated Other Comprehensive Income (Loss) [Member]
 
 
 
 
 
 
 
 
 
 
 
Schedule of Capitalization [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
 
 
(47,699,000)
 
 
 
(44,985,000)
(47,699,000)
(44,985,000)
(42,396,000)
Other Comprehensive Income (Loss), Net of Tax
 
 
 
 
 
 
 
 
(51,321,000)
(2,714,000)
(2,589,000)
Ending balance
$ (99,020,000)
 
 
 
$ (47,699,000)
 
 
 
$ (99,020,000)
$ (47,699,000)
$ (44,985,000)
Capitalization And Short-Term Borrowings (Schedule Of Transactions Involving Option Shares) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Schedule of Capitalization [Line Items]
 
 
 
Number of Shares Subject to Option, Outstanding Options at September 30, 2011
1,758,961 
 
 
Number of Shares Subject to Option, Granted in 2012
 
 
Number of Shares Subject to Option, Exercised in 2012
(476,243)
 
 
Number of Shares Subject to Option, Forfeited in 2012
 
 
Number of Shares Subject to Option, Outstanding Options at September 30, 2012
1,282,718 
 
 
Number of Shares Subject to Option, Option shares exercisable at September 30, 2012
1,282,718 
 
 
Weighted Average Exercise Price, Outstanding at September 30, 2011
$ 31.38 
 
 
Weighted Average Exercise Price, Granted in 2012
$ 0.00 
 
 
Weighted Average Exercise Price, Exercised in 2012
$ 25.28 
 
 
Weighted Average Exercise Price, Forfeited in 2012
$ 0.00 
 
 
Weighted Average Exercise Price, Outstanding at September 30, 2012
$ 33.64 
 
 
Weighted Average Exercise Price, Option shares exercisable at September 30, 2012
$ 33.64 
 
 
Weighted Average Remaining Contractual Life, Outstanding at September 30, 2012
2 years 7 months 24 days 
 
 
Weighted Average Remaining Contractual Life, Option shares exercisable at September 30, 2012
2 years 7 months 24 days 
 
 
Aggregate Intrinsic Value Outstanding at September 30, 2012
$ 26,166 
 
 
Aggregate Intrinsic Value, Option Shares exercisable at September 30, 2012
26,166 
 
 
Number of Shares Subject to Option, Option shares available for future grant at September 30, 2012
2,097,214 1
 
 
Non Performance Based SARs [Member]
 
 
 
Schedule of Capitalization [Line Items]
 
 
 
Number of Shares Subject to Option, Outstanding Options at September 30, 2011
245,000 
 
 
Number of Shares Subject to Option, Granted in 2012
166,000 
195,000 
 
Number of Shares Subject to Option, Exercised in 2012
 
 
Number of Shares Subject to Option, Forfeited in 2012
 
 
Number of Shares Subject to Option, Outstanding Options at September 30, 2012
411,000 
245,000 
 
Number of Shares Subject to Option, Option shares exercisable at September 30, 2012
109,990 
 
 
Weighted Average Exercise Price, Outstanding at September 30, 2011
$ 57.30 
$ 58.79 
 
Weighted Average Exercise Price, Granted in 2012
$ 55.09 
 
 
Weighted Average Exercise Price, Exercised in 2012
$ 0.00 
 
 
Weighted Average Exercise Price, Forfeited in 2012
$ 0.00 
 
 
Weighted Average Exercise Price, Outstanding at September 30, 2012
$ 57.30 
$ 58.79 
 
Weighted Average Exercise Price, Option shares exercisable at September 30, 2012
$ 53.56 
 
 
Weighted Average Remaining Contractual Life, Outstanding at September 30, 2012
8 years 2 months 12 days 
 
 
Weighted Average Remaining Contractual Life, Option shares exercisable at September 30, 2012
6 years 6 months 4 days 
 
 
Aggregate Intrinsic Value Outstanding at September 30, 2012
(1,339)
 
 
Aggregate Intrinsic Value, Option Shares exercisable at September 30, 2012
53 
 
 
Performance Based SARs [Member]
 
 
 
Schedule of Capitalization [Line Items]
 
 
 
Number of Shares Subject to Option, Outstanding Options at September 30, 2011
1,225,153 
 
 
Number of Shares Subject to Option, Granted in 2012
 
520,500 
Number of Shares Subject to Option, Exercised in 2012
(2,000)
 
 
Number of Shares Subject to Option, Forfeited in 2012
 
 
Number of Shares Subject to Option, Cancelled in 2012
(6,000)2
 
 
Number of Shares Subject to Option, Outstanding Options at September 30, 2012
1,217,153 
1,225,153 
 
Number of Shares Subject to Option, Option shares exercisable at September 30, 2012
1,039,309 
 
 
Weighted Average Exercise Price, Outstanding at September 30, 2011
$ 40.78 
$ 40.85 
 
Weighted Average Exercise Price, Granted in 2012
$ 0.00 
 
 
Weighted Average Exercise Price, Exercised in 2012
$ 29.88 
 
 
Weighted Average Exercise Price, Forfeited in 2012
$ 0.00 
 
 
Weighted Average Exercise Price, Cancelled in 2012
$ 58.99 2
 
 
Weighted Average Exercise Price, Outstanding at September 30, 2012
$ 40.78 
$ 40.85 
 
Weighted Average Exercise Price, Option shares exercisable at September 30, 2012
$ 38.80 
 
 
Weighted Average Remaining Contractual Life, Outstanding at September 30, 2012
6 years 8 months 5 days 
 
 
Weighted Average Remaining Contractual Life, Option shares exercisable at September 30, 2012
6 years 6 months 22 days 
 
 
Aggregate Intrinsic Value Outstanding at September 30, 2012
16,140 
 
 
Aggregate Intrinsic Value, Option Shares exercisable at September 30, 2012
$ 15,837 
 
 
Capitalization And Short-Term Borrowings (Schedule Of Transactions Involving Restricted Shares) (Details) (USD $)
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Restricted Share Awards [Member]
 
 
 
Schedule of Capitalization [Line Items]
 
 
 
Number of Shares Subject to Option, Outstanding Options at September 30, 2011
139,250 
 
 
Number of Restricted Share Awards Granted in 2012
41,525 
47,250 
4,000 
Number of Restricted Share Awards Vested in 2012
(18,740)
 
 
Number of Shares Subject to Option, Forfeited in 2012
 
 
Number of Shares Subject to Option, Outstanding Options at September 30, 2012
162,035 
139,250 
 
Weighted Average Fair Value per Award at September 30, 2011
$ 53.37 
 
 
Weighted Average Fair Value per Award Granted in 2012
$ 55.09 
$ 63.98 
$ 52.10 
Weighted Average Fair Value per Award Vested in 2012
$ 59.74 
 
 
Weighted Average Fair Value per Award Forfeited in 2012
$ 0.00 
 
 
Weighted Average Fair Value per Award at September 30, 2012
$ 53.07 
$ 53.37 
 
Restricted Stock Units [Member]
 
 
 
Schedule of Capitalization [Line Items]
 
 
 
Number of Shares Subject to Option, Outstanding Options at September 30, 2011
39,400 
 
 
Number of Restricted Share Awards Granted in 2012
68,450 
41,800 
 
Number of Restricted Share Awards Vested in 2012
 
 
Number of Shares Subject to Option, Forfeited in 2012
(1,950)
 
 
Number of Shares Subject to Option, Outstanding Options at September 30, 2012
105,900 
39,400 
 
Weighted Average Fair Value per Award at September 30, 2011
$ 59.20 
 
 
Weighted Average Fair Value per Award Granted in 2012
$ 47.10 
$ 59.35 
 
Weighted Average Fair Value per Award Vested in 2012
$ 0.00 
 
 
Weighted Average Fair Value per Award Forfeited in 2012
$ 46.96 
 
 
Weighted Average Fair Value per Award at September 30, 2012
$ 51.61 
$ 59.20 
 
Capitalization And Short-Term Borrowings (Schedule Of Long-Term Debt) (Details) (USD $)
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Debt Instrument [Line Items]
 
 
Total Long-Term Debt
$ 1,399,000,000 1
$ 1,049,000,000 1
Less Current Portion
250,000,000 1
150,000,000 1
Long-term debt, excluding current portion
1,149,000,000 1
899,000,000 1
7.4% Due March 2023 To June 2025 [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt interest rate, minimum
7.40% 
 
Medium-Term Notes
99,000,000 1
249,000,000 1
4.90% To 8.75% Due March 2013 To December 2012 [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt interest rate, minimum
4.90% 
 
Debt interest rate, maximum
8.75% 
 
Notes
1,300,000,000 1
800,000,000 1
5.25% Medium Term Notes Due March 2013 [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term debt, interest rate
5.25% 
 
Other long term debt, current
250.0 
 
6.70% Medium-Term Notes November 2011 [Member]
 
 
Debt Instrument [Line Items]
 
 
Long-term debt, interest rate
 
6.70% 
Other long term debt, current
 
$ 150,000,000 
Fair Value Measurements (Narrative) (Details) (USD $)
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Hedging collateral deposits
$ 364,000 
$ 19,701,000 
Assumed 12 month basis differential comparison to NYMEX
110.50% 
 
Assumed 12 month minimum basis differential comparison to NYMEX
103.20% 
 
Assumed 12 month maximum basis differential comparison to NYMEX
125.00% 
 
Higher [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Derivative basis differential on NYMEX sensitivity
10.00% 
 
Fair value of crude oil price swap sensitivity
19,400,000 
 
Lower [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Derivative basis differential on NYMEX sensitivity
10.00% 
 
Fair value of crude oil price swap sensitivity
(19,400,000)
 
Exchange-Traded Futures Contracts [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Hedging collateral deposits
400,000 
5,500,000 
NYMEX Futures [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Hedging collateral deposits
400,000 
5,500,000 
Price Swap [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Hedging collateral deposits
 
14,200,000 
Price Swap [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Reduction in fair market value of price swap agreements based on assessment of counterparty credit risk
200,000 
 
Price Swap [Member] |
Fair Value, Inputs, Level 2 [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Reduction in fair market value of price swap agreements based on assessment of counterparty credit risk
$ 1,200,000 
$ 2,000,000 
Fair Value Measurements (Financial Assets And Liabilities At Fair Value) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
$ 46,113 
$ 32,444 
Margin Deposit Assets
364 
19,701 
Total Assets
103,890 
152,816 
Total Liabilities
24,527 
9,674 
Total Net Assets/(Liabilities)
79,363 
143,142 
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
46,113 
32,444 
Margin Deposit Assets
364 
19,701 
Total Assets
80,622 
81,272 
Total Liabilities
2,760 
7,833 
Total Net Assets/(Liabilities)
77,862 
73,439 
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
Margin Deposit Assets
Total Assets
41,751 
75,292 
Total Liabilities
20,586 
179 
Total Net Assets/(Liabilities)
21,165 
75,113 
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
Margin Deposit Assets
Total Assets
559 
10,420 
Total Liabilities
20,223 
15,830 
Total Net Assets/(Liabilities)
(19,664)
(5,410)
Netting [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
1
1
Margin Deposit Assets
1
1
Total Assets
(19,042)1
(14,168)1
Total Liabilities
(19,042)1
(14,168)1
Total Net Assets/(Liabilities)
1
1
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
1,588 
Derivative Financial Instruments
3,292 
Commodity Futures Contracts - Gas [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
4,348 
4,541 
Derivative Financial Instruments
2,760 
7,833 
Commodity Futures Contracts - Gas [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
Commodity Futures Contracts - Gas [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
Commodity Futures Contracts - Gas [Member] |
Netting [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
(2,760)1
(4,541)1
Derivative Financial Instruments
(2,760)1
(4,541)1
Over The Counter Swaps - Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
972 
Derivative Financial Instruments
20,318 
6,382 
Over The Counter Swaps - Oil [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
Over The Counter Swaps - Oil [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
654 
Over The Counter Swaps - Oil [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
559 
10,420 
Derivative Financial Instruments
20,223 
15,830 
Over The Counter Swaps - Oil [Member] |
Netting [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
(559)1
(9,448)1
Derivative Financial Instruments
(559)1
(9,448)1
Over The Counter Swaps - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
26,028 
75,113 
Derivative Financial Instruments
4,209 
Over The Counter Swaps - Gas [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
Over The Counter Swaps - Gas [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
41,751 
75,292 
Derivative Financial Instruments
19,932 
179 
Over The Counter Swaps - Gas [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
Derivative Financial Instruments
Over The Counter Swaps - Gas [Member] |
Netting [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Financial Instruments
(15,723)1
(179)1
Derivative Financial Instruments
(15,723)1
(179)1
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
24,767 
19,882 
Balanced Equity Mutual Fund [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
24,767 
19,882 
Balanced Equity Mutual Fund [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Balanced Equity Mutual Fund [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Balanced Equity Mutual Fund [Member] |
Netting [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
1
1
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
4,758 
4,478 
Common Stock - Financial Services Industry [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
4,758 
4,478 
Common Stock - Financial Services Industry [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Common Stock - Financial Services Industry [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Common Stock - Financial Services Industry [Member] |
Netting [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
1
1
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
272 
226 
Other Common Stock [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
272 
226 
Other Common Stock [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Other Common Stock [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Investments
Other Common Stock [Member] |
Netting [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) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Total Gains/Losses, Realized and Included in Earnings
$ 0 
$ 0 
Derivative Financial Instruments [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Balance, Beginning of Year
(5,410)1
(16,483)1
Total Gains/Losses, Realized and Included in Earnings
46,174 1 2
41,354 1 3
Total Gains/Losses, Unrealized and Included in Other Comprehensive Income (Loss)
(60,428)1
(30,281)1
Transfer In/Out of Level 3
1
1
Balance, End of Year
$ (19,664)1
$ (5,410)1
Financial Instruments (Narrative) (Details) (USD $)
12 Months Ended
Sep. 30, 2012
entity
Sep. 30, 2011
Cash surrender value of life insurance
$ 57,000,000 
$ 54,800,000 
Number of counterparties in which the company holds over-the-counter swap positions
12 
 
Number of counterparties with a common credit-risk related contingency
10 
 
Fair market value of derivative asset with a credit-risk related contingency
14,000,000 
 
Fair market value of derivative liability with a credit-risk related contingency
23,900,000 
 
Hedging collateral deposits
364,000 
19,701,000 
Exploration And Production [Member]
 
 
Net hedging gains (losses) in accumulated other comprehensive income (loss)
900,000 
 
After tax net hedging gains (losses) in accumulated other comprehensive income (loss)
500,000 
 
Pre-tax Net hedging gains (losses) reclassified within twelve months
21,900,000 
 
After tax Net hedging gains (losses) reclassified within twelve months
12,700,000 
 
Energy Marketing [Member]
 
 
Net hedging gains (losses) in accumulated other comprehensive income (loss)
(2,800,000)
 
After tax net hedging gains (losses) in accumulated other comprehensive income (loss)
(1,700,000)
 
Pipeline And Storage [Member]
 
 
Net hedging gains (losses) in accumulated other comprehensive income (loss)
(700,000)
 
After tax net hedging gains (losses) in accumulated other comprehensive income (loss)
(400,000)
 
Equity Mutual Fund [Member]
 
 
Fair value
24,800,000 
19,900,000 
Gross unrealized gain
2,600,000 
 
Gross unrealized loss
 
700,000 
Insurance Company Stock [Member]
 
 
Fair value
4,800,000 
4,500,000 
Gross unrealized gain
2,300,000 
2,100,000 
Over-The-Counter Swap Position [Member]
 
 
Credit risk exposure per counterparty
6,400,000 
 
Maximum credit risk exposure per counterparty
11,000,000 
 
Over-The-Counter Crude Oil Swap Agreements [Member]
 
 
Hedging collateral deposits
 
14,200,000 
Fixed Price Purchase Commitments Bcf [Member] |
Energy Marketing [Member] |
Fair Value Hedges Short Position [Member]
 
 
Nonmonetary notional amount of price risk fair value hedge derivatives
1,100,000,000 
 
Exchange-Traded Futures Contracts [Member]
 
 
Hedging collateral deposits
$ 400,000 
$ 5,500,000 
Fair Value Hedges Bcf [Member] |
Energy Marketing [Member]
 
 
Nonmonetary notional amount of price risk fair value hedge derivatives
10,200,000,000 
 
Fixed Price Sales Commitments Bcf [Member] |
Energy Marketing [Member]
 
 
Nonmonetary notional amount of price risk fair value hedge derivatives
8,700,000,000 
 
Natural Gas Bcf [Member] |
Exploration And Production [Member] |
Cash Flow Hedges Short Position [Member]
 
 
Nonmonetary notional amount of price risk cash flow hedge derivatives
133,500,000,000 
 
Natural Gas Bcf [Member] |
Energy Marketing [Member]
 
 
Nonmonetary notional amount of price risk cash flow hedge derivatives
5,700,000,000 
 
Crude Oil Bbls [Member] |
Exploration And Production [Member] |
Cash Flow Hedges Short Position [Member]
 
 
Nonmonetary notional amount of price risk cash flow hedge derivative
2,316,000 
 
Fixed Price Commitments Related To Withdrawal Of Storage Gas Cf [Member] |
Energy Marketing [Member] |
Fair Value Hedges Short Position [Member]
 
 
Nonmonetary notional amount of price risk fair value hedge derivatives
400,000,000 
 
Financial Instruments (Long-Term Debt) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Financial Instruments [Abstract]
 
 
Carrying Amount
$ 1,399,000 
$ 1,049,000 
Fair Value
$ 1,623,847 
$ 1,198,585 
Financial Instruments (Effect Of Derivative Financial Instruments) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
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)
$ (7,248)
$ 30,238 
$ 65,366 
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)
65,691 
15,485 
 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
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)
(11,776)
24,713 
 
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)
54,777 
6,367 
 
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)
4,725 
5,015 
 
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)
10,439 
8,608 
 
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)
(197)1
510 1
 
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)
$ 475 
$ 510 
 
Financial Instruments (Derivatives Designated As A Fair Value Hedges, Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Operating Revenues [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Gain/(Loss) on Derivative
$ 8,021,910 
Gain/(Loss) on Commitment
(8,021,910)
Purchased Gas [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Gain/(Loss) on Derivative
(1,235,817)
Gain/(Loss) on Commitment
$ 1,235,817 
Financial Instruments (Derivatives In Fair Value Hedging Relationships) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Operating Revenues [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income
$ 8,021,910 
Purchased Gas [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income
(1,235,817)
Energy Marketing [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income
6,786 
Fixed Price Sales Commitments Of Natural Gas [Member] |
Energy Marketing [Member] |
Operating Revenues [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income
8,022 
Fixed Price Purchase Commitments Of Natural Gas [Member] |
Energy Marketing [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income
(1,261)
Natural Gas Held In Storage [Member] |
Energy Marketing [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income
$ 25 
Retirement Plan And Other Post-Retirement Benefits (Narrative) (Details) (USD $)
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2009
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Increase to accumulated other comprehensive loss
$ (86,676,000)
$ (2,031,000)
$ (3,251,000)
 
Expected future benefit payments in year one
55,900,000 
 
 
 
Expected future benefit payments in year two
56,500,000 
 
 
 
Expected future benefit payments in year three
57,300,000 
 
 
 
Expected future benefit payments in year four
58,500,000 
 
 
 
Expected future benefit payments in year five
59,600,000 
 
 
 
Expected future benefit payments in five years thereafter
315,200,000 
 
 
 
Effect of one percentage point increase on accumulated postretirement benefit obligation
69,700,000 
 
 
 
Effect of one percentage point increase on service and interest cost components
3,400,000 
 
 
 
Effect of one percentage point decrease on accumulated postretirement benefit obligation
58,100,000 
 
 
 
Effect of one percentage point decrease on service and interest cost components
2,800,000 
 
 
 
Expected long term rate of return on plan assets
8.00% 
 
 
 
Retirement Savings Account [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Costs Recognized
900,000 
700,000 
600,000 
 
Tax-Deferred Savings Plans [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Costs Recognized
4,300,000 
4,300,000 
4,200,000 
 
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Employer Contributions
44,022,000 
53,553,000 
22,182,000 
 
Net periodic benefit cost
29,011,000 
31,495,000 
21,229,000 
 
Accumulated benefit obligation
986,223,000 
874,595,000 
843,526,000 
 
Benefit obligation
1,070,744,000 
949,777,000 
924,493,000 
831,496,000 
Discount rate
3.50% 
4.50% 
4.75% 
 
Rate of compensation increase
4.75% 
4.75% 
4.75% 
 
Expected long term rate of return on plan assets
8.25% 
8.25% 
8.25% 
 
Other Post-Retirement Benefit Plans [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Employer Contributions
21,348,000 
25,346,000 
25,691,000 
 
Expected future benefit payments in year one
26,559,000 
 
 
 
Expected future benefit payments in year two
27,852,000 
 
 
 
Expected future benefit payments in year three
29,154,000 
 
 
 
Expected future benefit payments in year four
30,506,000 
 
 
 
Expected future benefit payments in year five
31,859,000 
 
 
 
Expected future benefit payments in five years thereafter
175,145,000 
 
 
 
Net periodic benefit cost
24,451,000 
30,110,000 
28,044,000 
 
Accumulated benefit obligation
   
   
   
 
Benefit obligation
561,263,000 
485,452,000 
472,407,000 
467,295,000 
Discount rate
3.50% 
4.50% 
4.75% 
 
Rate of compensation increase
4.75% 
4.75% 
4.75% 
 
Expected long term rate of return on plan assets
8.25% 
8.25% 
8.25% 
 
Non-Qualified Benefit Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Net periodic benefit cost
9,100,000 
8,600,000 
7,400,000 
 
Accumulated benefit obligation
54,500,000 
46,000,000 
41,800,000 
 
Benefit obligation
88,500,000 
79,200,000 
73,900,000 
 
Discount rate
2.50% 
3.75% 
4.25% 
 
Rate of compensation increase
7.75% 
8.00% 
8.00% 
 
VEBA Trusts And 401(h) Accounts [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Employer Contributions
21,200,000 
 
 
 
Other Than Veba Trust And 401(h) Accounts [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Employer Contributions
100,000 
 
 
 
Non Qualified Benefit Plan and Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Increase (decrease) in other regulatory assets
32,200,000 
 
 
 
Increase to accumulated other comprehensive loss
17,300,000 
 
 
 
Discount rate
3.50% 
 
 
 
Equity Securities [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Target allocation, minimum
55.00% 
 
 
 
Target allocation, maximum
70.00% 
 
 
 
Equity Securities [Member] |
VEBA Trusts And 401(h) Accounts [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Target allocation, minimum
60.00% 
 
 
 
Target allocation, maximum
75.00% 
 
 
 
Fixed Income Funds [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Target allocation, minimum
25.00% 
 
 
 
Target allocation, maximum
40.00% 
 
 
 
Fixed Income Funds [Member] |
VEBA Trusts And 401(h) Accounts [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Target allocation, minimum
25.00% 
 
 
 
Target allocation, maximum
40.00% 
 
 
 
Other Securities [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Target allocation, minimum
5.00% 
 
 
 
Target allocation, maximum
20.00% 
 
 
 
Other Securities [Member] |
VEBA Trusts And 401(h) Accounts [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Target allocation, minimum
0.00% 
 
 
 
Target allocation, maximum
15.00% 
 
 
 
Actuarial Experience [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Increase (decrease) in benefit obligation
(1,600,000)
 
 
 
Actuarial Experience [Member] |
Other Post-Retirement Benefit Plans [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Increase (decrease) in benefit obligation
(6,100,000)
(6,600,000)
(43,100,000)
 
Discount Rate Change [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Increase (decrease) in benefit obligation
118,800,000 
26,900,000 
75,100,000 
 
Discount Rate Change [Member] |
Other Post-Retirement Benefit Plans [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Increase (decrease) in benefit obligation
65,600,000 
14,500,000 
39,400,000 
 
Low [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Estimated future employer contributions in next fiscal year
30,000,000 
 
 
 
Low [Member] |
VEBA Trusts And 401(h) Accounts [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Estimated future employer contributions in next fiscal year
15,000,000 
 
 
 
High [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Estimated future employer contributions in next fiscal year
45,000,000 
 
 
 
High [Member] |
VEBA Trusts And 401(h) Accounts [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Estimated future employer contributions in next fiscal year
20,000,000 
 
 
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Benefit assets transfered
$ 13,000,000 
$ 0 
 
 
Retirement Plan And Other Post-Retirement Benefits (Schedule Of Benefit Obligation And Plan Assets And Funded Assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Accrued Benefit Liability
$ (79,099)
$ (108,636)
 
Expected Return on Plan Assets
8.00% 
 
 
Amoritazation period
10 years 
 
 
Retirement Plan [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Benefit Obligation at Beginning of Period
949,777 
924,493 
831,496 
Service Cost
14,202 
14,772 
12,997 
Interest Cost
41,526 
42,676 
44,308 
Plan Participants' Contributions
Retiree Drug Subsidy Receipts
Amendments
1
(1,764)1
1
Actuarial (Gain) Loss
120,338 
21,395 
85,831 
Benefits Paid
(55,099)
(51,795)
(50,139)
Benefit Obligation at End of Period
1,070,744 
949,777 
924,493 
Fair Value of Assets at Beginning of Period
601,719 
597,549 
563,881 
Actual Return on Plan Assets
111,034 
2,412 
61,625 
Employer Contributions
44,022 
53,553 
22,182 
Fair Value of Assets at End of Period
701,676 
601,719 
597,549 
Net Amount Recognized at End of Period (Funded Status)
(369,068)
(348,058)
(326,944)
Non current Liabilities
(369,068)
(348,058)
(326,944)
Accumulated Benefit Obligation
986,223 
874,595 
843,526 
Discount Rate
3.50% 
4.50% 
4.75% 
Rate of Compensation Increase
4.75% 
4.75% 
4.75% 
Expected Return on Plan Assets
(59,701)
(59,103)
(58,342)
Amortization of Prior Service Cost
269 
588 
655 
Amortization of Transition Amount
Recognition of Actuarial Loss
39,615 2
34,873 2
21,641 2
Net amortization and deferral for regulatory purposes
(6,900)
(2,311)
(30)
Net periodic benefit cost
29,011 
31,495 
21,229 
Discount Rate
4.50% 
4.75% 
5.50% 
Expected Return on Plan Assets
8.25% 
8.25% 
8.25% 
Rate of Compensation Increase
4.75% 
4.75% 
5.00% 
Other Post-Retirement Benefit Plans [Member]
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
Benefit Obligation at Beginning of Period
485,452 
472,407 
467,295 
Service Cost
4,016 
4,276 
4,298 
Interest Cost
21,315 
21,884 
25,017 
Plan Participants' Contributions
1,956 
1,963 
1,644 
Retiree Drug Subsidy Receipts
1,528 
1,532 
1,354 
Amendments
1
(7,187)1
1
Actuarial (Gain) Loss
71,708 
15,071 
(3,635)
Benefits Paid
(24,712)
(24,494)
(23,566)
Benefit Obligation at End of Period
561,263 
485,452 
472,407 
Fair Value of Assets at Beginning of Period
351,990 
353,269 
319,022 
Actual Return on Plan Assets
63,552 
(4,094)
30,478 
Employer Contributions
21,348 
25,346 
25,691 
Fair Value of Assets at End of Period
414,134 
351,990 
353,269 
Net Amount Recognized at End of Period (Funded Status)
(147,129)
(133,462)
(119,138)
Non current Liabilities
(147,129)
(133,462)
(119,138)
Accumulated Benefit Obligation
   
   
   
Discount Rate
3.50% 
4.50% 
4.75% 
Rate of Compensation Increase
4.75% 
4.75% 
4.75% 
Expected Return on Plan Assets
(28,971)
(29,165)
(26,334)
Amortization of Prior Service Cost
(2,138)
(1,710)
(1,710)
Amortization of Transition Amount
10 
541 
541 
Recognition of Actuarial Loss
24,057 2
23,794 2
25,881 2
Net amortization and deferral for regulatory purposes
6,162 
10,490 
351 
Net periodic benefit cost
$ 24,451 
$ 30,110 
$ 28,044 
Discount Rate
4.50% 
4.75% 
5.50% 
Expected Return on Plan Assets
8.25% 
8.25% 
8.25% 
Rate of Compensation Increase
4.75% 
4.75% 
5.00% 
Retirement Plan And Other Post-Retirement Benefits (Schedule Of Cumulative Amounts Recognized In AOCI And Regulatory Assets And Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Retirement Plan [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Net Actuarial Loss
$ (458,125)1
Transition Obligation
1
Prior Service (Cost) Credit
(1,304)1
Net Amount Recognized
(459,429)1
Increase in Actuarial Gain/(Loss), excluding amortization
(69,005)1 2
Change due to Amortization of Actuarial (Gain)/Loss
39,615 1
Reduction in Transition Obligation
1
Prior Service (Cost) Credit
269 1
Net Change
(29,121)1
Net Acturial Loss
(52,776)1
Transition Obligation
1
Prior Service (Cost) Credit
(238)1
Net Amount Expected to be Recognized
(53,014)1
Other Post-Retirement Benefit Plans [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Net Actuarial Loss
(195,305)1
Transition Obligation
(8)1
Prior Service (Cost) Credit
11,217 1
Net Amount Recognized
(184,096)1
Increase in Actuarial Gain/(Loss), excluding amortization
(37,134)1 2
Change due to Amortization of Actuarial (Gain)/Loss
24,057 1
Reduction in Transition Obligation
10 1
Prior Service (Cost) Credit
(2,138)1
Net Change
(15,205)1
Net Acturial Loss
(20,892)1
Transition Obligation
(8)1
Prior Service (Cost) Credit
2,138 1
Net Amount Expected to be Recognized
(18,762)1
Non Qualified Benefit Plans [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Net Actuarial Loss
(40,770)1
Transition Obligation
1
Prior Service (Cost) Credit
1
Net Amount Recognized
(40,770)1
Increase in Actuarial Gain/(Loss), excluding amortization
(9,559)1 2
Change due to Amortization of Actuarial (Gain)/Loss
4,363 1
Reduction in Transition Obligation
1
Prior Service (Cost) Credit
1
Net Change
(5,196)1
Net Acturial Loss
(5,280)1
Transition Obligation
1
Prior Service (Cost) Credit
1
Net Amount Expected to be Recognized
$ (5,280)1
Retirement Plan And Other Post-Retirement Benefits (Schedule Of Expected Benefit Payments) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Defined Benefit Plan Disclosure [Line Items]
 
2013 - Benefit Payments
$ 55,900 
2014 - Benefit Payments
56,500 
2015 - Benefit Payments
57,300 
2016 - Benefit Payments
58,500 
2017 - Benefit Payments
59,600 
2018 through 2022 - Benefit Payments
315,200 
Other Post-Retirement Benefit Plans [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
2013 - Benefit Payments
26,559 
2013 - Subsidy Receipts
(1,828)
2014 - Benefit Payments
27,852 
2014 - Subsidy Receipts
(2,021)
2015 - Benefit Payments
29,154 
2015 - Subsidy Receipts
(2,220)
2016 - Benefit Payments
30,506 
2016 - Subsidy Receipts
(2,420)
2017 - Benefit Payments
31,859 
2017 - Subsidy Receipts
(2,606)
2018 through 2022 - Benefit Payments
175,145 
2018 through 2022 - Subsidy Receipts
$ (15,964)
Retirement Plan And Other Post-Retirement Benefits (Schedule Of Health Care Cost Trend Rates) (Details)
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Retirement Plan And Other Post-Retirement Benefits [Abstract]
 
 
 
Rate of Increase for Pre Age 65 Participants
7.46% 1
7.64% 1
7.82% 1
Rate of Increase for Post Age 65 Participants
6.84% 1
6.89% 1
6.95% 1
Annual Rate of Increase in the Per Capita Cost of Covered Prescription Drug Benefits
8.08% 1
8.39% 1
8.69% 1
Annual Rate of Increase in the Per Capita Medicare Part B Reimbursement
6.84% 1
6.89% 1
6.95% 1
Annual Rate of Increase in the Per Capita Medicare Part D Subsidy
7.13% 1
7.30% 1
7.60% 1
Ultimate health care trend rate by 2028
4.50% 
 
 
Retirement Plan And Other Post-Retirement Benefits (Schedule Of Fair Value Of Plan Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2009
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
$ 701,676 
$ 601,719 
$ 597,549 
$ 563,881 
Retirement Plan [Member] |
Domestic Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
358,679 1
313,193 1
 
 
Retirement Plan [Member] |
International Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
96,451 2
79,732 2
 
 
Retirement Plan [Member] |
Domestic Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
165,130 3
146,587 3
 
 
Retirement Plan [Member] |
International Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
65,835 4
43,153 4
 
 
Retirement Plan [Member] |
Hedge Funds Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
39,956 
39,296 
 
 
Retirement Plan [Member] |
Real Estate [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
6,170 
6,443 
 
 
Retirement Plan [Member] |
Cash And Cash Equivalents [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
12,874 
10,629 
 
 
Retirement Plan [Member] |
Retirement Plan Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
745,095 
639,033 
 
 
Retirement Plan [Member] |
401(h) Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
(43,311)
(37,176)
 
 
Retirement Plan [Member] |
Total Retirement Plan Investments Excluding 401 H Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
701,784 
601,857 
 
 
Other Post-Retirement Benefit Plans [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
414,134 
351,990 
353,269 
319,022 
Other Post-Retirement Benefit Plans [Member] |
Collective Trust Funds Domestic Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
179,059 
148,451 
 
 
Other Post-Retirement Benefit Plans [Member] |
Collective Trust Funds International Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
66,590 
55,411 
 
 
Other Post-Retirement Benefit Plans [Member] |
Exchange Traded Funds Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
107,597 
91,214 
 
 
Other Post-Retirement Benefit Plans [Member] |
Real Estate [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
1,305 
1,561 
 
 
Other Post-Retirement Benefit Plans [Member] |
Cash Held In Collective Trust Funds [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
16,397 
12,890 
 
 
Other Post-Retirement Benefit Plans [Member] |
Total VEBA Trust Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
370,948 
309,527 
 
 
Other Post-Retirement Benefit Plans [Member] |
401(h) Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
43,311 
37,176 
 
 
Other Post-Retirement Benefit Plans [Member] |
Total Investments Including 401H Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
414,259 
346,703 
 
 
Other Post-Retirement Benefit Assets [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
414,134 
351,990 
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member] |
Domestic Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
231,978 1
215,524 1
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member] |
International Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
2,090 2
11,163 2
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member] |
Domestic Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
70,730 3
77,657 3
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member] |
International Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
1,941 4
887 4
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member] |
Hedge Funds Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member] |
Real Estate [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member] |
Cash And Cash Equivalents [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member] |
Retirement Plan Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
306,739 
305,231 
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member] |
401(h) Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
(17,818)
(17,744)
 
 
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member] |
Total Retirement Plan Investments Excluding 401 H Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
288,921 
287,487 
 
 
Fair Value, Inputs, Level 1 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Collective Trust Funds Domestic Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 1 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Collective Trust Funds International Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 1 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Exchange Traded Funds Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
107,597 
91,214 
 
 
Fair Value, Inputs, Level 1 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Real Estate [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 1 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Cash Held In Collective Trust Funds [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 1 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Total VEBA Trust Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
107,597 
91,214 
 
 
Fair Value, Inputs, Level 1 [Member] |
Other Post-Retirement Benefit Plans [Member] |
401(h) Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
17,818 
17,744 
 
 
Fair Value, Inputs, Level 1 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Total Investments Including 401H Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
125,415 
108,958 
 
 
Fair Value, Inputs, Level 1 [Member] |
Other Post-Retirement Benefit Assets [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member] |
Domestic Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
126,701 1
97,669 1
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member] |
International Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
94,361 2
68,569 2
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member] |
Domestic Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
94,400 3
68,930 3
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member] |
International Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
63,894 4
42,266 4
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member] |
Hedge Funds Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member] |
Real Estate [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member] |
Cash And Cash Equivalents [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
12,874 
10,629 
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member] |
Retirement Plan Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
392,230 
288,063 
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member] |
401(h) Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
(22,813)
(16,773)
 
 
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member] |
Total Retirement Plan Investments Excluding 401 H Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
369,417 
271,290 
 
 
Fair Value, Inputs, Level 2 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Collective Trust Funds Domestic Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
179,059 
148,451 
 
 
Fair Value, Inputs, Level 2 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Collective Trust Funds International Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
66,590 
55,411 
 
 
Fair Value, Inputs, Level 2 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Exchange Traded Funds Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 2 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Real Estate [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 2 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Cash Held In Collective Trust Funds [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
16,397 
12,890 
 
 
Fair Value, Inputs, Level 2 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Total VEBA Trust Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
262,046 
216,752 
 
 
Fair Value, Inputs, Level 2 [Member] |
Other Post-Retirement Benefit Plans [Member] |
401(h) Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
22,813 
16,773 
 
 
Fair Value, Inputs, Level 2 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Total Investments Including 401H Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
284,859 
233,525 
 
 
Fair Value, Inputs, Level 2 [Member] |
Other Post-Retirement Benefit Assets [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member] |
Domestic Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
1
1
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member] |
International Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
2
2
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member] |
Domestic Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
3
3
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member] |
International Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
4
4
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member] |
Hedge Funds Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
39,956 
39,296 
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member] |
Real Estate [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
6,170 
6,443 
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member] |
Cash And Cash Equivalents [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member] |
Retirement Plan Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
46,126 
45,739 
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member] |
401(h) Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
(2,680)
(2,659)
 
 
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member] |
Total Retirement Plan Investments Excluding 401 H Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
43,446 
43,080 
 
 
Fair Value, Inputs, Level 3 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Collective Trust Funds Domestic Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 3 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Collective Trust Funds International Equities [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 3 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Exchange Traded Funds Fixed Income [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 3 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Real Estate [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
1,305 
1,561 
 
 
Fair Value, Inputs, Level 3 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Cash Held In Collective Trust Funds [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Fair Value, Inputs, Level 3 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Total VEBA Trust Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
1,305 
1,561 
 
 
Fair Value, Inputs, Level 3 [Member] |
Other Post-Retirement Benefit Plans [Member] |
401(h) Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
2,680 
2,659 
 
 
Fair Value, Inputs, Level 3 [Member] |
Other Post-Retirement Benefit Plans [Member] |
Total Investments Including 401H Investments [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
3,985 
4,220 
 
 
Fair Value, Inputs, Level 3 [Member] |
Other Post-Retirement Benefit Assets [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Miscellaneous Accruals Including Currentand Deferred Taxes Claims Incurred But Not Reported Administrative [Member] |
Other Post-Retirement Benefit Plans [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
(125)
5,287 
 
 
Miscellaneous Accruals Including Currentand Deferred Taxes Claims Incurred But Not Reported Administrative [Member] |
Fair Value, Inputs, Level 1 [Member] |
Other Post-Retirement Benefit Plans [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Miscellaneous Accruals Including Currentand Deferred Taxes Claims Incurred But Not Reported Administrative [Member] |
Fair Value, Inputs, Level 2 [Member] |
Other Post-Retirement Benefit Plans [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Miscellaneous Accruals Including Currentand Deferred Taxes Claims Incurred But Not Reported Administrative [Member] |
Fair Value, Inputs, Level 3 [Member] |
Other Post-Retirement Benefit Plans [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Miscellaneous Accruals, Interest Receivables, And Non-Interest Cash [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
(108)
(138)
 
 
Miscellaneous Accruals, Interest Receivables, And Non-Interest Cash [Member] |
Fair Value, Inputs, Level 1 [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Miscellaneous Accruals, Interest Receivables, And Non-Interest Cash [Member] |
Fair Value, Inputs, Level 2 [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
 
 
Miscellaneous Accruals, Interest Receivables, And Non-Interest Cash [Member] |
Fair Value, Inputs, Level 3 [Member] |
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Fair Value of Investments
$ 0 
$ 0 
 
 
Retirement Plan And Other Post-Retirement Benefits (Schedule Of Changes In Fair Value Of Plan Assets) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Defined Benefit Plan Disclosure [Line Items]
 
 
Realized Gains/(Losses)
$ 0 
$ 0 
Purchases, Sales, Issuances, and Settlements (Net)
Retirement Plan [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Balance, Beginning of Year
43,080 
6,363 
Realized Gains/(Losses)
56 
(4,495)
Unrealized Gains/(Losses)
283 
3,919 
Purchases, Sales, Issuances, and Settlements (Net)
27 
37,293 
Balance, End of Year
43,446 
43,080 
Other Post-Retirement Benefit Plans [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Balance, Beginning of Year
4,220 
4,191 
Realized Gains/(Losses)
(278)
Unrealized Gains/(Losses)
(241)
(1,995)
Purchases, Sales, Issuances, and Settlements (Net)
2,302 
Balance, End of Year
3,985 
4,220 
Convertible Securities Domestic [Member] |
Retirement Plan [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Balance, Beginning of Year
337 
Realized Gains/(Losses)
53 
Unrealized Gains/(Losses)
(36)
Purchases, Sales, Issuances, and Settlements (Net)
(354)
Balance, End of Year
Hedge Funds Investments [Member] |
Retirement Plan [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Balance, Beginning of Year
39,296 
Realized Gains/(Losses)
Unrealized Gains/(Losses)
660 
(789)
Purchases, Sales, Issuances, and Settlements (Net)
40,085 
Balance, End of Year
39,956 
39,296 
Limited Partnership [Member] |
Retirement Plan [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Balance, Beginning of Year
245 
Realized Gains/(Losses)
(4,846)
Unrealized Gains/(Losses)
4,853 
Purchases, Sales, Issuances, and Settlements (Net)
(252)
Balance, End of Year
Real Estate [Member] |
Retirement Plan [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Balance, Beginning of Year
6,443 
6,148 
Realized Gains/(Losses)
60 
20 
Unrealized Gains/(Losses)
(362)
159 
Purchases, Sales, Issuances, and Settlements (Net)
29 
116 
Balance, End of Year
6,170 
6,443 
Excluding 401(h) Investments [Member] |
Retirement Plan [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Balance, Beginning of Year
(2,659)
(367)
Realized Gains/(Losses)
(4)
278 
Unrealized Gains/(Losses)
(15)
(268)
Purchases, Sales, Issuances, and Settlements (Net)
(2)
(2,302)
Balance, End of Year
(2,680)
(2,659)
VEBA Investments [Member] |
Other Post-Retirement Benefit Plans [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Balance, Beginning of Year
1,561 
3,824 
Realized Gains/(Losses)
Unrealized Gains/(Losses)
(256)
(2,263)
Purchases, Sales, Issuances, and Settlements (Net)
Balance, End of Year
1,305 
1,561 
Including 401(h) Investments [Member] |
Other Post-Retirement Benefit Plans [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Balance, Beginning of Year
2,659 
367 
Realized Gains/(Losses)
(278)
Unrealized Gains/(Losses)
15 
268 
Purchases, Sales, Issuances, and Settlements (Net)
2,302 
Balance, End of Year
$ 2,680 
$ 2,659 
Commitments And Contingencies (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Site Contingency [Line Items]
 
Estimated minimum liability for environmental remediation
$ 15.4 
Estimated maximum liability for environmental remediation
19.6 
Rate recovery period
10 years 
Future purchase obligation first year
278.1 
Future purchase obligation second year
68.1 
Future purchase obligation third year
64.1 
Future purchase obligation fourth year
60.2 
Future purchase obligation fifth year
32.3 
Future purchase obligation thereafter year
66.6 
Operating lease commitment first year
38.7 
Operating lease commitment second year
37.0 
Operating lease commitment third year
13.2 
Operating lease commitment fourth year
5.8 
Operating lease commitment fifth year
5.7 
Operating lease commitment thereafter year
8.5 
Former Manufactured Gas Plant Site [Member]
 
Site Contingency [Line Items]
 
Estimated minimum liability for environmental remediation
14.0 
Exploration And Production [Member]
 
Site Contingency [Line Items]
 
Contract commitments first year
60.7 
Contract commitments second year
11.4 
Pipeline And Storage And All Other [Member]
 
Site Contingency [Line Items]
 
Contract commitments first year
$ 40.7 
Discontinued Operations (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Discontinued Operations [Abstract]
 
 
 
Operating Revenues
 
 
$ 9,919 
Operating Expenses
 
 
8,933 
Operating Income
 
 
986 
Other Income
 
 
Interest Income
 
 
Interest Expense
 
 
29 
Income before Income Taxes
 
 
963 
Income Tax Expense
493 
Income from Discontinued Operations
470 
Gain on Disposal, Net of Taxes of $4,024
6,310 
Income from Discontinued Operations
6,780 
Proceeds from sale of discontinued operations
38,000 
Tax Effect of Gain (Loss) on Disposal
$ 0 
$ 0 
$ 4,024 
Business Segment Information (Segment Information By Segment) (Details) (USD $)
12 Months Ended 12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Nov. 30, 2010
acre
Mar. 31, 2010
Sep. 30, 2012
Utility [Member]
Sep. 30, 2011
Utility [Member]
Sep. 30, 2010
Utility [Member]
Sep. 30, 2012
Pipeline And Storage [Member]
Sep. 30, 2011
Pipeline And Storage [Member]
Sep. 30, 2010
Pipeline And Storage [Member]
Sep. 30, 2012
Exploration And Production [Member]
Sep. 30, 2011
Exploration And Production [Member]
Sep. 30, 2010
Exploration And Production [Member]
Sep. 30, 2012
Energy Marketing [Member]
Sep. 30, 2011
Energy Marketing [Member]
Sep. 30, 2010
Energy Marketing [Member]
Sep. 30, 2012
Total Reportable Segments [Member]
Sep. 30, 2011
Total Reportable Segments [Member]
Sep. 30, 2010
Total Reportable Segments [Member]
Sep. 30, 2012
All Other And Corporate [Member]
Sep. 30, 2011
All Other And Corporate [Member]
Sep. 30, 2010
All Other And Corporate [Member]
Sep. 30, 2012
Corporate And Intersegment Eliminations [Member]
Sep. 30, 2011
Corporate And Intersegment Eliminations [Member]
Sep. 30, 2010
Corporate And Intersegment Eliminations [Member]
Feb. 28, 2011
Seneca Energy And Model City [Member]
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customers
$ 1,626,853,000 1
$ 1,778,842,000 1
$ 1,760,503,000 1
 
 
$ 704,518,000 1
$ 835,853,000 1
$ 804,466,000 1
$ 172,312,000 1
$ 134,071,000 1
$ 138,905,000 1
$ 558,180,000 1
$ 519,035,000 1
$ 438,028,000 1
$ 186,579,000 1
$ 284,546,000 1
$ 344,802,000 1
$ 1,621,589,000 1
$ 1,773,505,000 1
$ 1,726,201,000 1
$ 4,307,000 1
$ 4,401,000 1
$ 33,428,000 1
$ 957,000 1
$ 936,000 1
$ 874,000 1
 
Intersegment Revenues
 
 
14,604,000 
16,642,000 
15,324,000 
86,963,000 
81,037,000 
79,978,000 
1,425,000 
420,000 
102,992,000 
98,099,000 
95,302,000 
16,771,000 
10,017,000 
2,315,000 
(119,763,000)
(108,116,000)
(97,617,000)
 
Interest Income
3,689,000 
2,916,000 
3,729,000 
 
 
2,765,000 
2,049,000 
2,144,000 
199,000 
324,000 
199,000 
1,493,000 
(27,000)
980,000 
188,000 
104,000 
44,000 
4,645,000 
2,450,000 
3,367,000 
175,000 
247,000 
137,000 
(1,131,000)
219,000 
225,000 
 
Interest Expense
86,240,000 
78,121,000 
93,946,000 
 
 
33,181,000 
34,440,000 
35,831,000 
25,603,000 
25,737,000 
26,328,000 
29,243,000 
17,402,000 
30,853,000 
41,000 
20,000 
27,000 
88,068,000 
77,599,000 
93,039,000 
1,738,000 
2,173,000 
2,152,000 
(3,566,000)
(1,651,000)
(1,245,000)
 
Depreciation, Depletion and Amortization
271,530,000 
226,527,000 
191,199,000 
 
 
42,757,000 
40,808,000 
40,370,000 
38,182,000 
37,266,000 
35,930,000 
187,624,000 
146,806,000 
106,182,000 
90,000 
47,000 
42,000 
268,653,000 
224,927,000 
182,524,000 
2,091,000 
840,000 
7,907,000 
786,000 
760,000 
768,000 
 
Income Tax Expense (Benefit)
150,554,000 
164,381,000 
137,227,000 
 
 
29,110,000 
33,325,000 
31,858,000 
37,655,000 
19,854,000 
22,634,000 
79,050,000 
89,034,000 
78,875,000 
1,933,000 
4,489,000 
4,806,000 
147,748,000 
146,702,000 
138,173,000 
4,335,000 
18,961,000 
464,000 
(1,529,000)
(1,282,000)
(1,410,000)
 
Segment Profit: Net Income (Loss)
220,077,000 
258,402,000 
219,133,000 
 
 
58,590,000 
63,228,000 
62,473,000 
60,527,000 
31,515,000 
36,703,000 
96,498,000 
124,189,000 
112,531,000 
4,169,000 
8,801,000 
8,816,000 
219,784,000 
227,733,000 
220,523,000 
6,868,000 
38,502,000 
3,396,000 
(6,575,000)
(7,833,000)
(4,786,000)
 
Gain on Sale of Unconsolidated Subsidiaries
50,879,000 
 
 
 
 
 
 
 
 
 
 
 
 
50,879,000 2
 
 
 
 
 
Expenditures for Additions to Long-Lived Assets
977,394,000 
854,186,000 
501,352,000 
 
 
58,284,000 
58,398,000 
57,973,000 
144,167,000 
129,206,000 
37,894,000 
693,810,000 
648,815,000 
398,174,000 
770,000 
460,000 
407,000 
897,031,000 
836,879,000 
494,448,000 
80,017,000 
17,022,000 
6,694,000 
346,000 
285,000 
210,000 
 
Segment Assets
5,935,142,000 
5,221,084,000 
5,047,054,000 
 
 
2,070,413,000 
2,001,546,000 
2,027,101,000 
1,243,862,000 
1,112,494,000 
1,080,772,000 
2,367,485,000 
1,885,014,000 
1,539,705,000 
61,968,000 
71,138,000 
69,561,000 
5,743,728,000 
5,070,192,000 
4,717,139,000 
209,934,000 
166,730,000 
198,706,000 
(18,520,000)
(15,838,000)
131,209,000 
 
Equity method investment ownership percentage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
Amount from sale of equity method investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
59,400,000 
 
 
 
 
 
Acquisition of leasehold acreage
 
 
 
$ 24,100,000 
$ 71,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acres of tracts acquired
 
 
 
18,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Business Segment Information (Schedule Of Revenue From External Customers And Long Lived Assets, By Geographical Areas) (Details) (UNITED STATES, USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
UNITED STATES
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Long-Lived Assets
$ 5,579,566 
$ 4,809,183 
$ 4,238,253 
Quarterly Financial Data (Schedule Of Quarterly Financial Information) (Details) (USD $)
3 Months Ended 12 Months Ended
Sep. 30, 2012
Jun. 30, 2012
Mar. 31, 2012
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Operating Revenues
$ 313,261,000 
$ 328,861,000 
$ 552,308,000 
$ 432,423,000 
$ 286,034,000 
$ 380,979,000 
$ 660,881,000 
$ 450,948,000 
$ 1,626,853,000 
$ 1,778,842,000 
$ 1,760,503,000 
Operating Income
107,265,000 
90,293,000 
132,097,000 
118,394,000 
75,191,000 
94,805,000 
153,756,000 
117,410,000 
448,049,000 
441,162,000 
440,451,000 
Net Income Available for Common Stock
48,802,000 1
43,184,000 
67,392,000 2
60,699,000 
37,356,000 
46,891,000 
115,611,000 3
58,544,000 
220,077,000 
258,402,000 
225,913,000 
Earnings per Common Share, Basic
$ 0.59 
$ 0.52 
$ 0.81 
$ 0.73 
$ 0.45 
$ 0.57 
$ 1.40 
$ 0.71 
$ 2.65 
$ 3.13 
$ 2.78 
Earnings per Common Share, Diluted
$ 0.58 
$ 0.52 
$ 0.81 
$ 0.73 
$ 0.45 
$ 0.56 
$ 1.38 
$ 0.70 
$ 2.63 
$ 3.09 
$ 2.73 
Natural Gas Impact Fee Accrual For Wells Drilled
 
 
4,000,000 
 
 
 
 
 
 
 
 
Seneca Energy And Model City [Member]
 
 
 
 
 
 
 
 
 
 
 
Investment percentage in partnership
 
 
 
 
 
 
50.00% 
 
 
 
 
Gain on the sale of unconsolidated subsidiaries
 
 
 
 
 
 
31,400,000 
 
 
 
 
Supply Corporation [Member]
 
 
 
 
 
 
 
 
 
 
 
Elimination Of Other Post Retirement Regulatory Liability Net Of Tax
$ 12,800,000 
 
 
 
 
 
 
 
 
 
 
Supplementary Information For Oil And Gas Producing Activities (Narrative) (Details) (USD $)
12 Months Ended 12 Months Ended 12 Months Ended
Sep. 30, 2012
ft3
Sep. 30, 2011
ft3
Sep. 30, 2010
ft3
Sep. 30, 2011
Covington Area [Member]
Sep. 30, 2012
Marcellus Shale Fields [Member]
ft3
Sep. 30, 2011
Marcellus Shale Fields [Member]
ft3
Sep. 30, 2010
Marcellus Shale Fields [Member]
ft3
Sep. 30, 2012
North Lost Hills Field [Member]
Sep. 30, 2007
North Lost Hills Field [Member]
Sep. 30, 2012
Total PUD Reserve Additions Estimated In 2013 [Member]
Reserve Quantities [Line Items]
 
 
 
 
 
 
 
 
 
 
Amount spent for developing proved undeveloped reserves
$ 216,600,000 
$ 199,200,000 
$ 28,900,000 
 
 
 
 
 
 
 
Amount to be spent on developing proved undeveloped reserves
 
 
 
 
 
 
 
 
 
160,000,000 
Proved undeveloped (PUD) reserve
115,000,000,000 
118,000,000,000 
 
 
 
 
 
 
 
 
Percentage of PUD reserves to the total proved reserves
33.00% 
32.00% 
25.00% 
 
 
 
 
 
 
 
New PUD reserve additions
289,000,000,000 
212,000,000,000 
 
 
286,000,000,000 
209,000,000,000 
 
 
 
 
Proved Undeveloped Reserve (Volume)
410,000,000,000 
295,000,000,000 
177,000,000,000 
 
381,000,000,000 
253,000,000,000 
110,000,000,000 
 
 
 
PUD conversions to developed reserves
97,000,000,000 
83,000,000,000 
 
 
 
 
 
 
 
 
Sales of minerals in place
 
10,000,000,000 
 
 
 
 
 
 
 
 
Downward PUD revisions
77,000,000,000 
2,000,000,000 
 
 
66,000,000,000 
 
 
 
 
 
Investment made to convert proved undeveloped reserves to developed reserves
$ 217,000,000 
$ 146,000,000 
 
$ 53,000,000 
 
 
 
 
 
 
Percentage of PUD reserves booked
 
33.00% 
47.00% 
 
 
 
 
 
 
 
Percentage of undeveloped reserves in total field level reserves
 
 
 
 
 
 
 
16.00% 
44.00% 
 
Conversion of undeveloped proved reserves to developed proved reserves
97,000,000,000 
83,000,000,000 
 
 
 
 
 
 
 
 
Percentage of undeveloped reserves against proved reserves at corporate level
 
 
 
 
 
 
 
1.00% 
 
 
Arbitrary discount rate
10.00% 
 
 
 
 
 
 
 
 
 
Supplementary Information For Oil And Gas Producing Activities (Capitalized Costs Relating To Oil And Gas Producing Activities) (Details) (USD $)
Sep. 30, 2012
Sep. 30, 2011
Supplementary Information For Oil And Gas Producing Activities Unaudited [Abstract]
 
 
Proved Properties
$ 2,789,181,000 1
$ 2,010,662,000 1
Unproved Properties
146,084,000 
226,276,000 
Capitalized Costs, Oil and Gas Producing Activities, Gross, Total
2,935,265,000 
2,236,938,000 
Less - Accumulated Depreciation, Depletion and Amortization
681,798,000 
499,671,000 
Capitalized Costs Oil And Gas Producing Activities Net
2,253,467,000 
1,737,267,000 
Asset retirement costs
$ 43,100,000 
$ 32,700,000 
Supplementary Information For Oil And Gas Producing Activities (Summary Of Capitalized Costs Of Unproved Properties Excluded From Amortization) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 60 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2009
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items]
 
 
 
 
Acquisition Costs
$ 6,195 
$ 0 
$ 69,206 
$ 11,879 
Development Costs
15,225 
6,722 
Exploration Costs
33,891 
Capitalized Interest
2,966 
Capitalized Costs of Unproved Properties Excluded from Amortization, Total
58,277 
6,722 
69,206 
11,879 
Capitalized Costs Of Unproved Properties Cumulative Balance [Member]
 
 
 
 
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items]
 
 
 
 
Acquisition Costs
87,280 
 
 
 
Development Costs
21,947 
 
 
 
Exploration Costs
33,891 
 
 
 
Capitalized Interest
2,966 
 
 
 
Capitalized Costs of Unproved Properties Excluded from Amortization, Total
$ 146,084 
 
 
 
Supplementary Information For Oil And Gas Producing Activities (Costs Incurred In Oil And Gas Property Acquisition, Exploration And Development Activities) (Details) (USD $)
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Supplementary Information For Oil And Gas Producing Activities Unaudited [Abstract]
 
 
 
Proved
$ 13,095,000 
$ 28,838,000 
$ 790,000 
Unproved
13,867,000 
20,012,000 
80,221,000 
Exploration Costs
84,624,000 1
62,651,000 1
75,155,000 1
Development Costs
576,397,000 2
531,372,000 2
234,094,000 2
Asset Retirement Costs
10,344,000 
12,087,000 
3,901,000 
Total Property Acquisition Costs
698,327,000 
654,960,000 
394,161,000 
Capitalized interest included in exploration costs
1,000,000 
800,000 
200,000 
Capitalized interest included in development costs
$ 2,000,000 
$ 700,000 
$ 900,000 
Supplementary Information For Oil And Gas Producing Activities (Results Of Operations For Producing Activities) (Details) (USD $)
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Reserve Quantities [Line Items]
 
 
 
Operating Revenues
$ 488,562,000 1
$ 497,600,000 1
$ 385,732,000 1
Production/Lifting Costs
83,361,000 
73,250,000 
61,398,000 
Franchise/Ad Valorem Taxes
23,620,000 
12,179,000 
10,592,000 
Accretion Expense
3,084,000 
3,668,000 
5,444,000 
Depreciation, Depletion and Amortization ($2.19, $2.12 and $2.10 per Mcfe of production)
182,759,000 
143,372,000 
104,092,000 
Income Tax Expense
81,904,000 
110,117,000 
83,946,000 
Results of Operations for Producing Activities (excluding corporate overheads and interest charges)
113,834,000 
155,014,000 
120,260,000 
Revenues from sales to affiliates
1,000 
23,000 
253,000 
Depreciation, Depletion and Amortization, per Mcfe of Production
2.19 
2.12 
2.10 
Natural Gas [Member]
 
 
 
Reserve Quantities [Line Items]
 
 
 
Natural Gas (includes revenues from sales to affiliates of $1, $23 and $253, respectively)
181,544,000 
223,648,000 
152,163,000 
Oil, Condensate And Other Liquids [Member]
 
 
 
Reserve Quantities [Line Items]
 
 
 
Operating Revenues
$ 307,018,000 
$ 273,952,000 
$ 233,569,000 
Supplementary Information For Oil And Gas Producing Activities (Proved Developed And Undeveloped Oil And Gas Reserve Quantities) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
MMcf
ft3
Sep. 30, 2011
ft3
MMcf
Sep. 30, 2010
MMcf
ft3
Sep. 30, 2009
MMcf
Reserve Quantities [Line Items]
 
 
 
 
Purchases of Minerals in Place
$ 0 
$ 52,697 
$ 0 
 
Sales of Minerals in Place
$ 0 
$ (73,633)
$ 0 
 
Proved Undeveloped Reserve (Volume)
410,000,000,000 
295,000,000,000 
177,000,000,000 
 
Gas MMcf [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Proved Developed and Undeveloped Reserves
674,922 
428,413 
248,954,000 
 
Extensions and Discoveries
436,098 
249,400,000 
193,129 
 
Revisions of Previous Estimates
(56,455)
26,385,000 
16,675 
 
Production Volume
(66,131)
(50,467,000)
(30,345)
 
Purchases of Minerals in Place
 
44,790,000 
 
 
Sales of Minerals in Place
 
(23,599,000)
 
 
Proved Developed and Undeveloped Reserves
988,434,000 
674,922 
428,413 
 
Proved Developed Reserves (Volume)
604,483,000 
414,423 
296,288 
206,233 
Proved Undeveloped Reserve (Volume)
383,951,000 
260,499 
132,125 
42,721 
Oil Mbbl [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Proved Developed and Undeveloped Reserves
43,345 
45,239 
46,587 
 
Extensions and Discoveries
1,257 
767 
1,054 
 
Revisions of Previous Estimates
1,130 
1,616 
818 
 
Production Volume
(2,870)
(2,860)
(3,220)
 
Sales of Minerals in Place
 
(1,417)
 
 
Proved Developed and Undeveloped Reserves
42,862 
43,345 
45,239 
 
Proved Developed Reserves (Volume)
38,444 
37,580 
37,682 
39,190 
Proved Undeveloped Reserve (Volume)
4,418 
5,765 
7,557 
7,397 
Gulf Coast Region [Member] |
Gas MMcf [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Proved Developed and Undeveloped Reserves
25,427,000 
26,167 
 
Extensions and Discoveries
158 
2,881,000 
 
Revisions of Previous Estimates
1,373 
6,683,000 
 
Production Volume
(4,041)
(10,304,000)
 
Purchases of Minerals in Place
 
 
 
Sales of Minerals in Place
 
(22,917)
 
 
Proved Developed and Undeveloped Reserves
25,427,000 
 
Proved Developed Reserves (Volume)
19,293,000 
18,051,000 
Proved Undeveloped Reserve (Volume)
6,134,000 
8,116,000 
Gulf Coast Region [Member] |
Oil Mbbl [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Proved Developed and Undeveloped Reserves
1,504 
1,452 
 
Extensions and Discoveries
222 
 
Revisions of Previous Estimates
(339)
332 
 
Production Volume
(187)
(502)
 
Sales of Minerals in Place
 
(979)
 
 
Proved Developed and Undeveloped Reserves
1,504 
 
Proved Developed Reserves (Volume)
1,066 
1,194 
Proved Undeveloped Reserve (Volume)
438 
258 
West Coast Region [Member] |
Gas MMcf [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Proved Developed and Undeveloped Reserves
68,316 
71,724,000 
72,959 
 
Extensions and Discoveries
638 
195,000 
269 
 
Revisions of Previous Estimates
(2,463)
526,000 
2,315 
 
Production Volume
(3,468)
(3,447,000)
(3,819)
 
Purchases of Minerals in Place
 
 
 
Sales of Minerals in Place
 
(682,000)
 
 
Proved Developed and Undeveloped Reserves
63,023,000 
68,316 
71,724,000 
 
Proved Developed Reserves (Volume)
59,923,000 
63,965 
66,178,000 
67,603,000 
Proved Undeveloped Reserve (Volume)
3,100,000 
4,351 
5,546,000 
5,356,000 
West Coast Region [Member] |
Oil Mbbl [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Proved Developed and Undeveloped Reserves
43,066 
43,467 
44,824 
 
Extensions and Discoveries
1,229 
756 
828 
 
Revisions of Previous Estimates
1,095 
1,909 
484 
 
Production Volume
(2,834)
(2,628)
(2,669)1
 
Sales of Minerals in Place
 
(438)
 
 
Proved Developed and Undeveloped Reserves
42,556 
43,066 
43,467 
 
Proved Developed Reserves (Volume)
38,138 
37,306 
36,353 
37,711 
Proved Undeveloped Reserve (Volume)
4,418 
5,760 
7,114 
7,113 
Midway Sunset North Fields [Member] |
Oil Mbbl [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Production Volume
 
 
1,543 
 
Percentage exceeding total reserve of production in proved developed and undeveloped reserves
15.00% 
15.00% 
15.00% 
 
Appalachian Region [Member] |
Gas MMcf [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Proved Developed and Undeveloped Reserves
606,606 
331,262,000,000 
149,828,000,000 
 
Extensions and Discoveries
435,460 2
249,047 2
189,979,000,000 
 
Revisions of Previous Estimates
(53,992)
24,486 
7,677,000,000 
 
Production Volume
(62,663)3
(42,979)3
(16,222,000,000)
 
Purchases of Minerals in Place
 
44,790 
 
 
Sales of Minerals in Place
 
 
 
Proved Developed and Undeveloped Reserves
925,411,000,000 
606,606 
331,262,000,000 
 
Proved Developed Reserves (Volume)
544,560,000,000 
350,458 
210,817,000,000 
120,579 
Proved Undeveloped Reserve (Volume)
380,851,000,000 
256,148 
120,445,000,000 
29,249 
Appalachian Region [Member] |
Oil Mbbl [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Proved Developed and Undeveloped Reserves
279 
268 
311 
 
Extensions and Discoveries
28 
10 
 
Revisions of Previous Estimates
35 
46 
 
Production Volume
(36)
(45)
(49)
 
Sales of Minerals in Place
 
 
 
Proved Developed and Undeveloped Reserves
306 
279 
268 
 
Proved Developed Reserves (Volume)
306 
274 
263 
285 
Proved Undeveloped Reserve (Volume)
26 
Marcellus Shale Fields [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Proved Undeveloped Reserve (Volume)
381,000,000,000 
253,000,000,000 
110,000,000,000 
 
Marcellus Shale Fields [Member] |
Gas MMcf [Member]
 
 
 
 
Reserve Quantities [Line Items]
 
 
 
 
Extensions and Discoveries
435,000,000,000 
249,000,000,000 
182,000,000,000 
 
Production Volume
55,812,000,000 
35,356,000,000 
7,180,000,000 
 
Percentage exceeding total reserve of production in proved developed and undeveloped reserves
15.00% 
 
 
 
Supplementary Information For Oil And Gas Producing Activities (Standardized Measure Of Discounted Future Net Cash Flows Relating To Proved Oil And Gas Reserves) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Supplementary Information For Oil And Gas Producing Activities Unaudited [Abstract]
 
 
 
Future Cash Inflows
$ 7,373,129 
$ 7,180,320 
$ 5,273,605 
Future Production Costs
1,919,530 
1,555,603 
1,347,855 
Future Development Costs
619,573 
636,745 
445,413 
Future Income Tax Expense at Applicable Statutory Rate
1,812,055 
1,834,778 
1,186,567 
Future Net Cash Flows
3,021,971 
3,153,194 
2,293,770 
10% Annual Discount for Estimated Timing of Cash Flows
1,552,180 
1,629,037 
1,120,182 
Standardized Measure of Discounted Future Net Cash Flows
$ 1,469,791 
$ 1,524,157 
$ 1,173,588 
Supplementary Information For Oil And Gas Producing Activities (Principal Sources Of Change In The Standardized Measure Of Discounted Future Net Cash Flows) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Supplementary Information For Oil And Gas Producing Activities Unaudited [Abstract]
 
 
 
Standardized Measure of Discounted Future Net Cash Flows at Beginning of Year
$ 1,524,157 
$ 1,173,588 
$ 875,977 
Sales, Net of Production Costs
(381,581)
(412,172)
(313,742)
Net Changes in Prices, Net of Production Costs
(385,019)
404,445 
176,530 
Purchases of Minerals in Place
52,697 
Sales of Minerals in Place
(73,633)
Extensions and Discoveries
224,474 
218,140 
329,555 
Changes in Estimated Future Development Costs
29,627 
(85,191)
(17,353)
Previously Estimated Development Costs Incurred
252,967 
168,275 
47,539 
Net Change in Income Taxes at Applicable Statutory Rate
(19,280)
(249,773)
(85,703)
Revisions of Previous Quantity Estimates
103,472 
124,545 
46,246 
Accretion of Discount and Other
120,974 
203,236 
114,539 
Standardized Measure of Discounted Future Net Cash Flows at End of Year
$ 1,469,791 
$ 1,524,157 
$ 1,173,588 
Valuation And Qualifying Accounts (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2010
Valuation And Qualifying Accounts [Abstract]
 
 
 
Balance at Beginning of Period
$ 31,039 
$ 30,961 
$ 38,334 
Additions Charged to Costs and Expenses
9,183 
11,974 
15,422 
Additional Charged to Other Accounts
1,946 1
2,484 1
2,268 1
Deductions
11,851 2
14,380 2
25,063 2
Balance at End of Period
$ 30,317 
$ 31,039 
$ 30,961