NATIONAL FUEL GAS CO, 10-Q filed on 5/9/2014
Quarterly Report
Document And Entity Information
6 Months Ended
Mar. 31, 2014
Apr. 30, 2014
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Mar. 31, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q2 
 
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
 
84,008,346 
Trading Symbol
nfg 
 
Consolidated Statements Of Income And Earnings Reinvested In The Business (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
INCOME
 
 
 
 
Operating Revenues
$ 756,242 
$ 597,826 
$ 1,306,314 
$ 1,050,680 
Operating Expenses
 
 
 
 
Purchased Gas
322,772 
209,817 
490,378 
331,735 
Operation and Maintenance
137,716 
122,303 
245,562 
230,035 
Property, Franchise and Other Taxes
25,704 
22,685 
46,630 
42,348 
Depreciation, Depletion and Amortization
89,975 
80,030 
183,089 
152,361 
Total Operating Expenses
576,167 
434,835 
965,659 
756,479 
Operating Income
180,075 
162,991 
340,655 
294,201 
Other Income (Expense):
 
 
 
 
Interest Income
249 
140 
951 
1,526 
Other Income
5,123 
1,087 
5,352 
2,501 
Interest Expense on Long-Term Debt
(22,766)
(22,786)
(45,651)
(44,234)
Other Interest Expense
(1,375)
(526)
(2,324)
(1,595)
Income Before Income Taxes
161,306 
140,906 
298,983 
252,399 
Income Tax Expense
66,095 
55,186 
121,520 
98,735 
Net Income Available for Common Stock
95,211 
85,720 
177,463 
153,664 
EARNINGS REINVESTED IN THE BUSINESS
 
 
 
 
Balance at Beginning of Period
1,493,466 
1,343,765 
1,442,617 
1,306,284 
Beginning Retained Earnings Unappropriated And Current Period Net Income Loss
1,588,677 
1,429,485 
1,620,080 
1,459,948 
Dividends on Common Stock
(31,493)
(30,486)
(62,896)
(60,949)
Balance at March 31
$ 1,557,184 
$ 1,398,999 
$ 1,557,184 
$ 1,398,999 
Earnings Per Common Share, Basic:
 
 
 
 
Net Income Available for Common Stock (in dollars per share)
$ 1.14 
$ 1.03 
$ 2.12 
$ 1.84 
Earnings Per Common Share, Diluted:
 
 
 
 
Net Income Available for Common Stock (in dollars per share)
$ 1.12 
$ 1.02 
$ 2.09 
$ 1.83 
Weighted Average Common Shares Outstanding:
 
 
 
 
Used in Basic Calculation (shares)
83,856,120 
83,498,508 
83,781,085 
83,443,805 
Used in Diluted Calculation (shares)
84,837,123 
84,159,734 
84,787,610 
84,127,705 
Dividends Per Common Share:
 
 
 
 
Dividends Declared (in dollars per share)
$ 0.375 
$ 0.365 
$ 0.75 
$ 0.73 
Consolidated Statements Of Comprehensive Income (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net Income Available for Common Stock
$ 95,211 
$ 85,720 
$ 177,463 
$ 153,664 
Other Comprehensive Income (Loss), Before Tax:
 
 
 
 
Unrealized Gain (Loss) on Securities Available for Sale Arising During the Period
622 
1,983 
3,120 
2,773 
Unrealized Gain (Loss) on Derivative Financial Instruments Arising During the Period
(67,461)
(47,350)
(64,682)
(12,001)
Reclassification Adjustment for Realized (Gains) Losses on Derivative Financial Instruments in Net Income
26,640 
(10,503)
16,457 
(22,088)
Other Comprehensive Income (Loss), Before Tax
(40,199)
(55,870)
(45,105)
(31,316)
Income Tax Expense (Benefit) Related to Unrealized Gain (Loss) on Securities Available for Sale Arising During the Period
231 
741 
1,156 
1,037 
Income Tax Expense (Benefit) Related to Unrealized Gain (Loss) on Derivative Financial Instruments Arising During the Period
(28,583)
(19,813)
(27,312)
(5,076)
Reclassification Adjustment for Income Tax Benefit (Expense) on Realized Losses (Gains) from Derivative Financial Instruments in Net Income
11,170 
(4,419)
6,872 
(9,274)
Income Taxes – Net
(17,182)
(23,491)
(19,284)
(13,313)
Other Comprehensive Income (Loss)
(23,017)
(32,379)
(25,821)
(18,003)
Comprehensive Income
$ 72,194 
$ 53,341 
$ 151,642 
$ 135,661 
Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Sep. 30, 2013
ASSETS
 
 
Property, Plant and Equipment
$ 7,689,518 
$ 7,313,203 
Less - Accumulated Depreciation, Depletion and Amortization
2,325,636 
2,161,477 
Property, Plant and Equipment, Net, Total
5,363,882 
5,151,726 
Current Assets
 
 
Cash and Temporary Cash Investments
150,864 
64,858 
Hedging Collateral Deposits
0 1
1,094 1
Receivables – Net of Allowance for Uncollectible Accounts of $38,935 and $27,144 Respectively
267,512 
133,182 
Unbilled Revenue
83,378 
19,483 
Gas Stored Underground
3,176 
51,484 
Materials and Supplies - at average cost
25,551 
29,904 
Unrecovered Purchased Gas Costs
1,825 
12,408 
Other Current Assets
54,903 
56,905 
Deferred Income Taxes
39,650 
79,359 
Total Current Assets
626,859 
448,677 
Other Assets
 
 
Recoverable Future Taxes
161,258 
163,355 
Unamortized Debt Expense
15,478 
16,645 
Other Regulatory Assets
244,486 
252,568 
Deferred Charges
9,050 
9,382 
Other Investments
85,825 
96,308 
Goodwill
5,476 
5,476 
Prepaid Post-Retirement Benefit Costs
28,366 
22,774 
Fair Value of Derivative Financial Instruments
25,777 
48,989 
Other
738 
2,447 
Total Other Assets
576,454 
617,944 
Total Assets
6,567,195 
6,218,347 
Capitalization:
 
 
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 83,980,596 Shares and 83,661,969 Shares, Respectively
83,981 
83,662 
Paid in Capital
703,422 
687,684 
Earnings Reinvested in the Business
1,557,184 
1,442,617 
Accumulated Other Comprehensive Loss
(45,055)
(19,234)
Total Comprehensive Shareholders’ Equity
2,299,532 
2,194,729 
Long-Term Debt, Net of Current Portion
1,649,000 
1,649,000 
Total Capitalization
3,948,532 
3,843,729 
Current and Accrued Liabilities
 
 
Notes Payable to Banks and Commercial Paper
0 
0 
Current Portion of Long-Term Debt
0 
0 
Accounts Payable
153,147 
105,283 
Amounts Payable to Customers
24,665 
12,828 
Dividends Payable
31,493 
31,373 
Interest Payable on Long-Term Debt
29,960 
29,960 
Customer Advances
81 
21,959 
Customer Security Deposits
15,581 
16,183 
Other Accruals and Current Liabilities
235,900 
83,946 
Fair Value of Derivative Financial Instruments
22,236 
639 
Total Current and Accrued Liabilities
513,063 
302,171 
Deferred Credits
 
 
Deferred Income Taxes
1,352,731 
1,347,007 
Taxes Refundable to Customers
90,779 
85,655 
Unamortized Investment Tax Credit
1,361 
1,579 
Cost of Removal Regulatory Liability
165,138 
157,622 
Other Regulatory Liabilities
94,000 
61,549 
Pension and Other Post-Retirement Liabilities
145,085 
158,014 
Asset Retirement Obligations
120,884 
119,511 
Other Deferred Credits
135,622 
141,510 
Total Deferred Credits
2,105,600 
2,072,447 
Commitments and Contingencies
0 
0 
Total Capitalization and Liabilities
$ 6,567,195 
$ 6,218,347 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2014
Sep. 30, 2013
Statement of Financial Position [Abstract]
 
 
Receivables, Allowance for Uncollectible Accounts
$ 38,935 
$ 27,144 
Common Stock, Par Value
$ 1 
$ 1 
Common Stock, Shares Authorized
200,000,000 
200,000,000 
Common Stock, Shares Issued
83,980,596 
83,661,969 
Common Stock, Shares Outstanding
83,980,596 
83,661,969 
Consolidated Statements Of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
OPERATING ACTIVITIES
 
 
Net Income Available for Common Stock
$ 177,463 
$ 153,664 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
 
 
Depreciation, Depletion and Amortization
183,089 
152,361 
Deferred Income Taxes
71,939 
102,557 
Excess Tax Benefits Associated with Stock-Based Compensation Awards
(3,149)
0 
Stock-Based Compensation
8,045 
6,596 
Other
(118)
8,013 
Change in:
 
 
Hedging Collateral Deposits
1,094 
(386)
Receivables and Unbilled Revenue
(198,277)
(109,403)
Gas Stored Underground and Materials and Supplies
52,661 
32,391 
Unrecovered Purchased Gas Costs
10,583 
0 
Other Current Assets
(443)
4,389 
Accounts Payable
69,379 
20,456 
Amounts Payable to Customers
11,837 
(1,725)
Customer Advances
(21,878)
(23,910)
Customer Security Deposits
(602)
(804)
Other Accruals and Current Liabilities
102,222 
39,273 
Other Assets
23,445 
(6,200)
Other Liabilities
15,946 
(10,417)
Net Cash Provided by Operating Activities
503,236 
366,855 
INVESTING ACTIVITIES
 
 
Capital Expenditures
(367,393)
(339,737)
Other
4,927 
(3,445)
Net Cash Used in Investing Activities
(362,466)
(343,182)
Financing Activities
 
 
Changes in Notes Payable to Banks and Commercial Paper
0 
(171,000)
Excess Tax Benefits Associated with Stock-Based Compensation Awards
3,149 
0 
Net Proceeds from Issuance of Long-Term Debt
0 
495,415 
Reduction of Long-Term Debt
0 
(250,000)
Dividends Paid on Common Stock
(62,776)
(60,879)
Net Proceeds from Issuance of Common Stock
4,863 
710 
Net Cash Provided by (Used in) Financing Activities
(54,764)
14,246 
Net Increase in Cash and Temporary Cash Investments
86,006 
37,919 
Cash and Temporary Cash Investments at October 1
64,858 
74,494 
Cash and Temporary Cash Investments at March 31
150,864 
112,413 
Supplemental Disclosure of Cash Flow Information, Non-Cash Investing Activities:
 
 
Non-Cash Capital Expenditures
$ 109,355 
$ 77,093 
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies
Summary of Significant Accounting Policies
 
Principles of Consolidation.  The Company consolidates all entities in which it has a controlling financial interest.  All significant intercompany balances and transactions are eliminated.
 
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
 
Reclassifications.  Certain prior year amounts have been reclassified to conform with current year presentation.
 
Earnings for Interim Periods.  The Company, in its opinion, has included all adjustments (which consist of only normally recurring adjustments, unless otherwise disclosed in this Form 10-Q) that are necessary for a fair statement of the results of operations for the reported periods. The consolidated financial statements and notes thereto, included herein, should be read in conjunction with the financial statements and notes for the years ended September 30, 2013, 2012 and 2011 that are included in the Company's 2013 Form 10-K.  The consolidated financial statements for the year ended September 30, 2014 will be audited by the Company's independent registered public accounting firm after the end of the fiscal year.
 
The earnings for the six months ended March 31, 2014 should not be taken as a prediction of earnings for the entire fiscal year ending September 30, 2014.  Most of the business of the Utility and Energy Marketing segments is seasonal in nature and is influenced by weather conditions.  Due to the seasonal nature of the heating business in the Utility and Energy Marketing segments, earnings during the winter months normally represent a substantial part of the earnings that those segments are expected to achieve for the entire fiscal year.  The Company’s business segments are discussed more fully in Note 7 – Business Segment Information.
 
Consolidated Statement of Cash Flows.  For purposes of the Consolidated Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of generally three months or less to be cash equivalents.
 
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 March 31, 2014, the Company had no hedging collateral deposits outstanding. At September 30, 2013, the Company had hedging collateral deposits of $1.1 million related to its exchange-traded futures contracts.  In accordance with its accounting policy, the Company does not offset hedging collateral deposits paid or received against related derivative financial instruments liability or asset balances.
 
Gas Stored Underground - Current.  In the Utility segment, gas stored underground – current is carried at lower of cost or market, on a LIFO method.  Gas stored underground – current normally declines during the first and second quarters of the year and is replenished during the third and fourth quarters.  In the Utility segment, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets under the caption “Other Accruals and Current Liabilities.”  Such reserve, which amounted to $73.9 million at March 31, 2014, is reduced to zero by September 30 of each year as the inventory is replenished.
 
Property, Plant and Equipment.  In the Company’s Exploration and Production segment, oil and gas property acquisition, exploration and development costs are capitalized under the full cost method of accounting. Under this methodology, all costs associated with property acquisition, exploration and development activities are capitalized, including internal costs directly identified with acquisition, exploration and development activities. The internal costs that are capitalized do not include any costs related to production, general corporate overhead, or similar activities. The Company does not recognize any gain or loss on the sale or other disposition of oil and gas properties unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center.
 
Capitalized costs include costs related to unproved properties, which are excluded from amortization until proved reserves are found or it is determined that the unproved properties are impaired.  Such costs amounted to $184.5 million and $106.1 million at March 31, 2014 and September 30, 2013, respectively.  All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. The amount of any impairment is transferred to the pool of capitalized costs being amortized.
 
Capitalized costs are subject to the SEC full cost ceiling test. The ceiling test, which is performed each quarter, determines a limit, or ceiling, on the amount of property acquisition, exploration and development costs that can be capitalized. The ceiling under this test represents (a) the present value of estimated future net cash flows, excluding future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, using a discount factor of 10%, which is computed by applying prices of oil and gas (as adjusted for hedging) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet, less estimated future expenditures, plus (b) the cost of unevaluated properties not being depleted, less (c) income tax effects related to the differences between the book and tax basis of the properties. The natural gas and oil prices used to calculate the full cost ceiling are based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the twelve-month period prior to the end of the reporting period. If capitalized costs, net of accumulated depreciation, depletion and amortization and related deferred income taxes, exceed the ceiling at the end of any quarter, a permanent impairment is required to be charged to earnings in that quarter.  At March 31, 2014, the ceiling exceeded the book value of the oil and gas properties by approximately $204.0 million.
 
Accumulated Other Comprehensive Loss.  The components of Accumulated Other Comprehensive Loss and changes for the quarter and six months ended March 31, 2014, net of related tax effect, are as follows (amounts in parentheses indicate debits) (in thousands): 
Three Months Ended March 31, 2014
 
Gains and Losses on Derivative Financial Instruments
Gains and Losses on Securities Available for Sale
Funded Status of the Pension and Other Post-Retirement Benefit Plans
Total
Balance at January 1, 2014
$
26,345

$
7,910

$
(56,293
)
$
(22,038
)
Other Comprehensive Gains and Losses Before Reclassifications
(38,878
)
391

—

(38,487
)
Amounts Reclassified From Other Comprehensive Loss
15,470

—

—

15,470

Balance at March 31, 2014
$
2,937

$
8,301

$
(56,293
)
$
(45,055
)
 
Six Months Ended March 31, 2014
 
Gains and Losses on Derivative Financial Instruments
Gains and Losses on Securities Available for Sale
Funded Status of the Pension and Other Post-Retirement Benefit Plans
Total
Balance at October 1, 2013
$
30,722

$
6,337

$
(56,293
)
$
(19,234
)
Other Comprehensive Gains and Losses Before Reclassifications
(37,370
)
1,964

—

(35,406
)
Amounts Reclassified From Other Comprehensive Loss
9,585

—

—

9,585

Balance at March 31, 2014
$
2,937

$
8,301

$
(56,293
)
$
(45,055
)

 
Reclassifications Out of Accumulated Other Comprehensive Loss.  The details about the reclassification adjustments out of accumulated other comprehensive loss for the quarter and six months ended March 31, 2014 are as follows (amounts in parentheses indicate debits to the income statement) (in thousands):
Three Months Ended March 31, 2014
Details About Accumulated Other Comprehensive Loss Components
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss
Affected Line Item in the Statement Where Net Income is Presented
Gains (Losses) on Derivative Financial Instrument Cash Flow Hedges:
 
 
Commodity Contracts

($22,611
)
Operating Revenues
Commodity Contracts
(4,029
)
Purchased Gas
 
(26,640
)
Total Before Income Tax
 
11,170

Income Tax Expense
 

($15,470
)
Net of Tax

Six Months Ended March 31, 2014
Details About Accumulated Other Comprehensive Loss Components
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss
Affected Line Item in the Statement Where Net Income is Presented
Gains (Losses) on Derivative Financial Instrument Cash Flow Hedges:
 
 
Commodity Contracts

($12,825
)
Operating Revenues
Commodity Contracts
(3,632
)
Purchased Gas
 
(16,457
)
Total Before Income Tax
 
6,872

Income Tax Expense
 

($9,585
)
Net of Tax



Other Current Assets.  The components of the Company’s Other Current Assets are as follows (in thousands):
                            
At March 31, 2014
 
At September 30, 2013
 
 
 
 
Prepayments
$
4,221

 
$
10,605

Prepaid Property and Other Taxes
21,950

 
13,079

Federal Income Taxes Receivable
—

 
1,122

State Income Taxes Receivable
—

 
3,275

Fair Values of Firm Commitments
—

 
1,829

Regulatory Assets
28,732

 
26,995

 
$
54,903

 
$
56,905


 
Other Accruals and Current Liabilities.  The components of the Company’s Other Accruals and Current Liabilities are as follows (in thousands):
                            
At March 31, 2014
 
At September 30, 2013
 
 
 
 
Accrued Capital Expenditures
$
90,831

 
$
41,100

Regulatory Liabilities
11,085

 
20,013

Reserve for Gas Replacement
73,883

 
—

Federal Income Taxes Payable
30,802

 
—

State Income Taxes Payable
4,063

 
—

Other
25,236

 
22,833

 
$
235,900

 
$
83,946


 
Earnings Per Common Share.  Basic earnings per common share is computed by dividing net income available for common stock by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  For purposes of determining earnings per common share, the potentially dilutive securities the Company has outstanding are stock options, SARs, restricted stock units and performance shares.  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, restricted stock units and performance shares that are antidilutive are excluded from the calculation of diluted earnings per common share.  There were no securities excluded as being antidilutive for the quarter ended March 31, 2014. There were 265 securities excluded as being antidilutive for the six months ended March 31, 2014.  There were 208,819 and 362,681 securities excluded as being antidilutive for the quarter and six months ended March 31, 2013, respectively.
 
Stock-Based Compensation.  The Company granted 116,090 performance shares during the six months ended March 31, 2014. The weighted average fair value of such performance shares was $67.16 per share for the six months ended March 31, 2014. Performance shares are an award constituting units denominated in common stock of the Company, the number of which may be adjusted over a performance cycle based upon the extent to which performance goals have been satisfied.  Earned performance shares may be distributed in the form of shares of common stock of the Company, an equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company. The performance shares do not entitle the participant to receive dividends during the vesting period.
 
Half of the performance shares granted during the six months ended March 31, 2014 must meet a performance goal related to relative return on capital over the performance cycle of October 1, 2013 to September 30, 2016.  The performance goal over the performance cycle is the Company’s total return on capital relative to the total return on capital of other companies in a group selected by the Compensation Committee (“Report Group”).  Total return on capital for a given company means the average of the Report Group companies’ returns on capital for each twelve month period corresponding to each of the Company’s fiscal years during the performance cycle, based on data reported for the Report Group companies in the Bloomberg database.  The number of these performance shares that will vest and be paid will depend upon the Company’s performance relative to the Report Group and not upon the absolute level of return achieved by the Company.  The fair value of these performance shares is calculated by multiplying the expected number of shares that will be issued by the average market price of Company common stock on the date of grant reduced by the present value of forgone dividends over the vesting term of the award.  The fair value is recorded as compensation expense over the vesting term of the award.  The other half of the performance shares granted during the six months ended March 31, 2014 must meet a performance goal related to total shareholder return over the performance cycle of October 1, 2013 to September 30, 2016.  The performance goal over the performance cycle is the Company’s three-year total shareholder return relative to the three-year total shareholder return of the other companies in the Report Group.  Three-year shareholder return for a given company will be based on the data reported for that company (with the starting and ending stock prices over the performance cycle calculated as the average closing stock price for the prior calendar month and with dividends reinvested in that company’s securities at each ex-dividend date) in the Bloomberg database.  The number of these performance shares that will vest and be paid will depend upon the Company’s performance relative to the Report Group and not upon the absolute level of return achieved by the Company.  The fair value price at the date of grant for these performance shares is determined using a Monte Carlo simulation technique, which includes a reduction in value for the present value of forgone dividends over the vesting term of the award.  This price is multiplied by the number of performance shares awarded, the result of which is recorded as compensation expense over the vesting term of the award.
 
The Company granted 80,951 non-performance based restricted stock units during the six months ended March 31, 2014.  The weighted average fair value of such non-performance based restricted stock units was $65.23 per share for the six months ended March 31, 2014. 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 non-performance based restricted stock units do not entitle the participant to receive dividends during the vesting period. The accounting for non-performance based restricted stock units is the same as the accounting for restricted share awards, except that the fair value at the date of grant of the restricted stock units must be reduced by the present value of forgone dividends over the vesting term of the award.
 
No stock options, SARs or restricted share awards were granted by the Company during the six months ended March 31, 2014.
Fair Value Measurements
Fair Value Measurements
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 March 31, 2014 and September 30, 2013.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.  The fair value presentation for over the counter swaps has been changed to combine gas and oil swaps at both March 31, 2014 and September 30, 2013.  In the September 30, 2013 Form 10-K, gas swaps were reported separately from oil swaps.  This change in presentation was made because a significant number of the counterparties enter into both gas and oil swap agreements with the Company.  

Recurring Fair Value Measures
At fair value as of March 31, 2014
(Thousands of Dollars)   
Level 1
 
Level 2
 
Level 3
 
Netting Adjustments(1)
 
Total(1)
Assets:
 

 
 

 
 

 
 

 
 

Cash Equivalents – Money Market Mutual Funds
$
129,892

 
$
—

 
$
—

 
$
—

 
$
129,892

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
3,297

 
—

 
—

 
(847
)
 
2,450

Over the Counter Swaps – Gas and Oil
—

 
48,284

 
273

 
(25,230
)
 
23,327

Other Investments:
 

 
 

 
 

 
 

 
 

Balanced Equity Mutual Fund
34,407

 
—

 
—

 
—

 
34,407

Common Stock – Financial Services Industry
7,631

 
—

 
—

 
—

 
7,631

Other Common Stock
383

 
—

 
—

 
—

 
383

Hedging Collateral Deposits
—

 
—

 
—

 
—

 
—

Total                                           
$
175,610

 
$
48,284

 
$
273

 
$
(26,077
)
 
$
198,090

 
 
 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

 
 

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
$
847

 
$
—

 
$
—

 
$
(847
)
 
$
—

Over the Counter Swaps – Gas and Oil
—

 
45,822

 
1,644

 
(25,230
)
 
22,236

Total
$
847

 
$
45,822

 
$
1,644

 
$
(26,077
)
 
$
22,236

 
 
 
 
 
 
 
 
 
 
Total Net Assets/(Liabilities)
$
174,763

 
$
2,462

 
$
(1,371
)
 
$
—

 
$
175,854

 
Recurring Fair Value Measures
At fair value as of September 30, 2013
(Thousands of Dollars)   
Level 1
 
Level 2
 
Level 3
 
Netting Adjustments(1)
 
Total(1)
Assets:
 

 
 

 
 

 
 

 
 

Cash Equivalents – Money Market Mutual Funds
$
51,332

 
$
—

 
$
—

 
$
—

 
$
51,332

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
2,552

 
—

 
—

 
(1,641
)
 
911

Over the Counter Swaps – Gas and Oil
—

 
57,070

 
—

 
(9,003
)
 
48,067

Other Investments:
 

 
 

 
 

 
 

 
 

Balanced Equity Mutual Fund
31,813

 
—

 
—

 
—

 
31,813

Common Stock – Financial Services Industry
6,544

 
—

 
—

 
—

 
6,544

Other Common Stock
330

 
—

 
—

 
—

 
330

Hedging Collateral Deposits
1,094

 
—

 
—

 
—

 
1,094

Total                                           
$
93,665

 
$
57,070

 
$
—

 
$
(10,644
)
 
$
140,091

 
 
 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

 
 

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
$
1,641

 
$
—

 
$
—

 
$
(1,641
)
 
$
—

Over the Counter Swaps – Gas and Oil
—

 
4,452

 
5,190

 
(9,003
)
 
639

Total
$
1,641

 
$
4,452

 
$
5,190

 
$
(10,644
)
 
$
639

 
 
 
 
 
 
 
 
 
 
Total Net Assets/(Liabilities)
$
92,024

 
$
52,618

 
$
(5,190
)
 
$
—

 
$
139,452


(1) 
Netting Adjustments represent the impact of legally-enforceable master netting arrangements that allow the Company to net gain and loss positions held with the same counterparties. The net asset or net liability for each counterparty is recorded as an asset or liability on the Company’s balance sheet.
 
Derivative Financial Instruments
 
At March 31, 2014 and September 30, 2013, the derivative financial instruments reported in Level 1 consist of natural gas NYMEX and ICE futures contracts used in the Company’s Energy Marketing segment. Hedging collateral deposits of $1.1 million at September 30, 2013, which are associated with these futures contracts, have been reported in Level 1 as well. The derivative financial instruments reported in Level 2 at March 31, 2014 and September 30, 2013 consist of natural gas price swap agreements used in the Company’s Exploration and Production and Energy Marketing segments and the majority of the crude oil price swap agreements used in the Company’s Exploration and Production segment. The fair value of the Level 2 price swap agreements is based on an internal, discounted cash flow model that uses observable inputs (i.e. LIBOR based discount rates and basis differential information, if applicable, at active natural gas and crude oil trading markets). The derivative financial instruments reported in Level 3 consist of a portion of the crude oil price swap agreements used in the Company’s Exploration and Production segment at March 31, 2014 and September 30, 2013.  The fair value of the Level 3 crude oil price swap agreements is based on an internal, discounted cash flow model that uses both observable (i.e. LIBOR based discount rates) and unobservable inputs (i.e. basis differential information of crude oil trading markets with low trading volume). 
 
The significant unobservable input used in the fair value measurement of a portion of the Company’s over-the-counter crude oil swaps is the basis differential between Midway Sunset oil and NYMEX contracts.  Significant changes in the assumed basis differential could result in a significant change in value of the derivative financial instruments.  At March 31, 2014, it was assumed that Midway Sunset oil was 100.3% 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 96.2% to 108.1% of NYMEX.  If the basis differential between Midway Sunset oil and NYMEX contracts used in the fair value measurement calculation at March 31, 2014 had been 10 percentage points higher, the fair value of the Level 3 crude oil price swap agreements liability would have been approximately $5.8 million higher.  If the basis differential between Midway Sunset oil and NYMEX contracts used in the fair value measurement at March 31, 2014 had been 10 percentage points lower, the fair value measurement of the Level 3 crude oil price swap agreements liability would have changed from a net liability of $1.4 million to a net asset of $4.4 million.  These calculated amounts are based solely on basis differential changes and do not take into account any other changes to the fair value measurement calculation. 
 
The accounting rules for fair value measurements and disclosures require consideration of the impact of nonperformance risk (including credit risk) from a market participant perspective in the measurement of the fair value of assets and liabilities.  At March 31, 2014, the Company determined that nonperformance risk would have no material impact on its financial position or results of operation.  To assess nonperformance risk, the Company considered information such as any applicable collateral posted, master netting arrangements, and applied a market-based method by using the counterparty (for an asset) or the Company’s (for a liability) credit default swaps rates.
 
The tables listed below provide reconciliations of the beginning and ending net balances for assets and liabilities measured at fair value and classified as Level 3 for the quarters and six months ended March 31, 2014 and 2013, respectively. For the quarters and six months ended March 31, 2014 and March 31, 2013, 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 (amounts in parentheses indicate credits in the derivative asset/liability accounts). 
 
Fair Value Measurements Using Unobservable Inputs (Level 3)
(Thousands of Dollars)   
 
Total Gains/Losses 
 
 
 
January 1, 2014
Gains/Losses Realized and Included in Earnings
Gains/Losses Unrealized and Included in Other Comprehensive Income (Loss)
Transfer In/Out of Level 3
March 31, 2014
Derivative Financial Instruments(2)
$
(1,842
)
$
763

(1) 
$
(292
)
$
—

$
(1,371
)
 
(1) 
Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the three months ended March 31, 2014. 
(2) 
Derivative Financial Instruments are shown on a net basis.

Fair Value Measurements Using Unobservable Inputs (Level 3)
(Thousands of Dollars)   
 
Total Gains/Losses 
 
 
 
October 1, 2013
Gains/Losses Realized and Included in Earnings
Gains/Losses Unrealized and Included in Other Comprehensive Income (Loss)
Transfer In/Out of Level 3
March 31, 2014
Derivative Financial Instruments(2)
$
(5,190
)
$
1,043

(1) 
$
2,776

$
—

$
(1,371
)
 
(1) 
Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the six months ended March 31, 2014. 
(2) 
Derivative Financial Instruments are shown on a net basis.

Fair Value Measurements Using Unobservable Inputs (Level 3)
(Thousands of Dollars)   
 
Total Gains/Losses 
 
 
 
January 1, 2013
Gains/Losses Realized and Included in Earnings
Gains/Losses Unrealized and Included in Other Comprehensive Income (Loss)
Transfer In/Out of Level 3
March 31, 2013
Derivative Financial Instruments(2)
$
(14,089
)
$
4,539

(1) 
$
(7,056
)
$
—

$
(16,606
)

(1) 
Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the three months ended March 31, 2013. 
(2) 
Derivative Financial Instruments are shown on a net basis.

Fair Value Measurements Using Unobservable Inputs (Level 3)
(Thousands of Dollars)   
 
Total Gains/Losses 
 
 
 
October 1, 2012
Gains/Losses Realized and Included in Earnings
Gains/Losses Unrealized and Included in Other Comprehensive Income (Loss)
Transfer In/Out of Level 3
March 31, 2013
Derivative Financial Instruments(2)
$
(19,664
)
$
6,801

(1) 
$
(3,743
)
$
—

$
(16,606
)

(1) 
Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the six months ended March 31, 2013. 
(2) 
Derivative Financial Instruments are shown on a net basis.
Financial Instruments
Financial Instruments
Financial Instruments
 
Long-Term Debt.  The fair market value of the Company’s debt, as presented in the table below, was determined using a discounted cash flow model, which incorporates the Company’s credit ratings and current market conditions in determining the yield, and subsequently, the fair market value of the debt.  Based on these criteria, the fair market value of long-term debt, including current portion, was as follows (in thousands): 
 
March 31, 2014
 
September 30, 2013
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Long-Term Debt
$
1,649,000

 
$
1,787,823

 
$
1,649,000

 
$
1,767,519


 
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.
 
Any 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 $43.4 million at March 31, 2014 and $57.6 million at September 30, 2013. The fair value of the equity mutual fund was $34.4 million at March 31, 2014 and $31.8 million at September 30, 2013. The gross unrealized gain on this equity mutual fund was $7.7 million at March 31, 2014 and $5.7 million at September 30, 2013.  The fair value of the stock of an insurance company was $7.6 million at March 31, 2014 and $6.5 million at September 30, 2013. The gross unrealized gain on this stock was $5.2 million at March 31, 2014 and $4.1 million at September 30, 2013. 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 derivative instruments to manage commodity price risk in the Exploration and Production and Energy Marketing segments. During 2012, the Pipeline and Storage segment discontinued its use of derivative instruments as a means of managing commodity price risk.  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 March 31, 2014 and September 30, 2013.  All of the derivative financial instruments reported on those line items relate to commodity contracts.
 
Cash Flow Hedges
 
For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the period or periods during which the hedged transaction affects earnings.  Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. 
 
As of March 31, 2014, 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
239.0

 Bcf (all short positions)
Crude Oil
4,269,000

 Bbls (all short positions)
 
At March 31, 2014, the Company de-designated a portion of its crude oil swaps as cash flow hedges and simultaneously re-designated them as cash flow hedges using a revised effectiveness testing model. Amounts in accumulated other comprehensive loss at March 31, 2014 associated with the de-designated crude oil swaps will be amortized into the income statement as the anticipated hedged production occurs. Since the de-designated crude oil swaps were re-designated as cash flow hedges at March 31, 2014, future gains or losses on such derivatives, to the extent they are effective, will be 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. The total mark-to-market adjustment recorded in earnings related to all of the Company's crude oil swaps, including economic hedges, was a $1.8 million loss for the quarter ended March 31, 2014. The mark-to-market impact for the six months ended March 31, 2014 was insignificant.

As of March 31, 2014, 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
3.5

Bcf short positions (mostly forecasted storage withdrawals)
 
3.4

Bcf long positions (mostly forecasted storage injections)
 
6.9

Total Bcf
 
As of March 31, 2014, the Company’s Exploration and Production segment had $4.8 million ($2.8 million after tax) of net hedging gains included in the accumulated other comprehensive income (loss) balance. It is expected that $31.5 million ($18.7 million after tax) of unrealized losses 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 $36.3 million ($21.5 million after tax) of unrealized gains will be reclassified into the Consolidated Statement of Income after 12 months as the expected sales of the underlying commodities occur. 
 
As of March 31, 2014, the Company’s Energy Marketing segment had $0.2 million ($0.1 million after tax) of net hedging gains included in the accumulated other comprehensive income (loss) balance. It is expected that $0.1 million (less than $0.1 million after tax) of unrealized gains will be reclassified into the Consolidated Statement of Income (Loss) within the next 12 months as the expected sales of the underlying commodity occurs. It is expected that $0.1 million (less than $0.1 million after tax) of unrealized gains will be reclassified into the Consolidated Statement of Income after 12 months as the expected sales of the underlying commodities occur.
 
Refer to Note 1, under Accumulated Other Comprehensive Income (Loss), for the after-tax gain (loss) pertaining to derivative financial instruments for the Exploration and Production and Energy Marketing segments.
The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the
Three Months Ended March 31, 2014 and 2013 (Thousands of Dollars)
Derivatives in Cash Flow Hedging Relationships
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion) for the Three Months Ended March 31,
Location 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)
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) for the Three Months Ended March 31,
Location of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) for the Three Months Ended March 31,
 
2014
2013
 
2014
2013
 
2014
2013
Commodity Contracts - Exploration & Production segment
$
(64,237
)
$
(47,364
)
Operating Revenue
$
(22,611
)
$
11,285

Operating Revenue
$
(660
)
$
(456
)
Commodity Contracts - Energy Marketing segment
$
(3,224
)
$
14

Purchased Gas
$
(4,029
)
$
(782
)
Not Applicable
$
—

$
—

Commodity Contracts - Pipeline & Storage segment (1)
$
—

$
—

Operating Revenue
$
—

$
—

Not Applicable
$
—

$
—

Total
$
(67,461
)
$
(47,350
)
 
$
(26,640
)
$
10,503

 
$
(660
)
$
(456
)
 

The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the
Six Months Ended March 31, 2014 and 2013 (Thousands of Dollars)
Derivatives in Cash Flow Hedging Relationships
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion) for the Six Months Ended March 31,
Location 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)
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) for the Six Months Ended March 31,
Location of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) for the Six Months Ended March 31,
 
2014
2013
 
2014
2013
 
2014
2013
Commodity Contracts - Exploration & Production segment
$
(59,117
)
$
(13,750
)
Operating Revenue
$
(12,825
)
$
23,590

Operating Revenue
$
774

$
(456
)
Commodity Contracts - Energy Marketing segment
$
(5,565
)
$
1,749

Purchased Gas
$
(3,632
)
$
(830
)
Not Applicable
$
—

$
—

Commodity Contracts - Pipeline & Storage segment (1)
$
—

$
—

Operating Revenue
$
—

$
(672
)
Not Applicable
$
—

$
—

Total
$
(64,682
)
$
(12,001
)
 
$
(16,457
)
$
22,088

 
$
774

$
(456
)
 
(1) 
There were no open hedging positions at March 31, 2014 or 2013.
 
Fair Value Hedges
 
The Company’s Energy Marketing segment utilizes fair value hedges to mitigate risk associated with fixed price sales commitments, fixed price purchase commitments, and the decline in the value of certain natural gas held in storage. With respect to fixed price sales commitments, the Company enters into long positions to mitigate the risk of price increases for natural gas supplies that could occur after the Company enters into fixed price sales agreements with its customers. With respect to fixed price purchase commitments, the Company enters into short positions to mitigate the risk of price decreases that could occur after the Company locks into fixed price purchase deals with its suppliers. With respect to storage hedges, the Company enters into short positions to mitigate the risk of price decreases that could result in a lower of cost or market writedown of the value of natural gas in storage that is recorded in the Company’s financial statements. As of March 31, 2014, the Company’s Energy Marketing segment had fair value hedges covering approximately 7.5 Bcf (7.0 Bcf of fixed price sales commitments (mostly long positions) and 0.5 Bcf of fixed price purchase commitments (mostly short positions)). For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk completely offset each other in current earnings, as shown below.

Derivatives in Fair Value Hedging Relationships – Energy Marketing segment
Location of Gain or (Loss) on Derivative and Hedged Item Recognized in the Consolidated Statement of Income
Amount of Gain or (Loss) on Derivative Recognized in the Consolidated Statement of Income for the Six Months Ended March 31, 2014 (In Thousands)
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income for the Six Months Ended March 31, 2014 (In Thousands)
Commodity Contracts – Hedge of fixed price sales commitments of natural gas
Operating Revenues
$
3,779

$
(3,779
)
Commodity Contracts – Hedge of fixed price purchase commitments of natural gas
Purchased Gas
$
(440
)
$
440

Commodity Contracts – Hedge of natural gas held in storage
Purchased Gas
$
(38
)
$
38

 
 
$
3,301

$
(3,301
)

 
Credit Risk
 
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 fifteen counterparties of which four are in a net gain position.   On average, the Company had $5.8 million of credit exposure per counterparty in a gain position at March 31, 2014. The maximum credit exposure per counterparty in a gain position at March 31, 2014 was $9.6 million. As of March 31, 2014, no collateral was received from the counterparties by the Company.  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 March 31, 2014, twelve of the fifteen 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 March 31, 2014, the fair market value of the derivative financial instrument assets with a credit-risk related contingency feature was $22.3 million according to the Company’s internal model (discussed in Note 2 — Fair Value Measurements).  At March 31, 2014, the fair market value of the derivative financial instrument liabilities with a credit-risk related contingency feature was $19.1 million according to the Company’s internal model  (discussed in Note 2 — Fair Value Measurements).  For its over-the-counter swap agreements, no hedging collateral deposits were required to be posted by the Company at March 31, 2014.    
 
For its exchange traded futures contracts, which are in an asset position, no hedging collateral deposits were required to be posted by the Company as of March 31, 2014.   As these are exchange traded futures contracts, there are no specific credit-risk related contingency features. The Company posts hedging collateral based on open positions and margin requirements it has with its counterparties.
 
The Company’s requirement to post hedging collateral deposits is based on the fair value determined by the Company’s counterparties, which may differ from the Company’s assessment of fair value. Hedging collateral deposits may also include closed derivative positions in which the broker has not cleared the cash from the account to offset the derivative liability. The Company records liabilities related to closed derivative positions in Other Accruals and Current Liabilities on the Consolidated Balance Sheet. These liabilities are relieved when the broker clears the cash from the hedging collateral deposit account. This is discussed in Note 1 under Hedging Collateral Deposits.
Income Taxes
Income Taxes
Income Taxes
 
The components of federal and state income taxes included in the Consolidated Statements of Income are as follows (in thousands): 
                                                         
Six Months Ended 
 March 31,
                                                         
2014
 
2013
Current Income Taxes 
 

 
 

Federal                                              
$
39,974

 
$
(6,318
)
State                                                  
9,607

 
2,496

 
 
 
 
Deferred Income Taxes                                
 

 
 

Federal                                               
50,110

 
82,788

State                                                    
21,829

 
19,769

 
121,520

 
98,735

Deferred Investment Tax Credit                            
(218
)
 
(213
)
 
 
 
 
Total Income Taxes                                      
$
121,302

 
$
98,522

Presented as Follows:
 

 
 

Other Income
(218
)
 
(213
)
Income Tax Expense
121,520

 
98,735

 
 
 
 
Total Income Taxes
$
121,302

 
$
98,522



Total income taxes as reported differ from the amounts that were computed by applying the federal income tax rate to income before income taxes.  The following is a reconciliation of this difference (in thousands): 
 
Six Months Ended 
 March 31,
 
2014
 
2013
U.S. Income Before Income Taxes
$
298,765

 
$
252,186

 
 

 
 

Income Tax Expense, Computed at U.S. Federal Statutory Rate of 35%
$
104,568

 
$
88,265

 
 
 
 
Increase (Reduction) in Taxes Resulting from:
 

 
 

State Income Taxes
20,433

 
14,473

Miscellaneous
(3,699
)
 
(4,216
)
 
 
 
 
Total Income Taxes
$
121,302

 
$
98,522


 
Significant components of the Company’s deferred tax liabilities and assets were as follows (in thousands):
                            
At March 31, 2014
 
At September 30, 2013
Deferred Tax Liabilities:
 
 
 
Property, Plant and Equipment
$
1,551,701

 
$
1,504,187

Pension and Other Post-Retirement Benefit Costs
121,780

 
124,021

Other                             
55,562

 
75,419

Total Deferred Tax Liabilities
1,729,043

 
1,703,627

 
 
 
 
Deferred Tax Assets:
 

 
 

Pension and Other Post-Retirement Benefit Costs
(132,752
)
 
(130,256
)
Tax Loss Carryforwards
(184,123
)
 
(215,262
)
Other                            
(99,087
)
 
(90,461
)
Total Deferred Tax Assets
(415,962
)
 
(435,979
)
Total Net Deferred Income Taxes
$
1,313,081

 
$
1,267,648

 
 
 
 
Presented as Follows:
 

 
 

Net Deferred Tax Liability/(Asset) – Current
(39,650
)
 
(79,359
)
Net Deferred Tax Liability – Non-Current
1,352,731

 
1,347,007

Total Net Deferred Income Taxes
$
1,313,081

 
$
1,267,648


 
As a result of certain realization requirements of the authoritative guidance on stock-based compensation, the table of deferred tax liabilities and assets shown above does not include certain deferred tax assets that arose directly from excess tax deductions related to stock-based compensation. Tax benefits of $3.1 million and $0.7 million relating to the excess stock-based compensation deductions were recorded in Paid in Capital during the six months ended March 31, 2014 and the year ended September 30, 2013, respectively.  Cumulative tax benefits of $36.4 million remain at both March 31, 2014 and September 30, 2013 and will be recorded in Paid in Capital in future years when such tax benefits are realized.
 
Regulatory liabilities representing the reduction of previously recorded deferred income taxes associated with rate-regulated activities that are expected to be refundable to customers amounted to $90.8 million and $85.7 million at March 31, 2014 and September 30, 2013, 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 $161.3 million and $163.4 million at March 31, 2014 and September 30, 2013, respectively.
 
During the quarter ended March 31, 2014, there was no change in the balance of unrecognized tax benefits.  Approximately $2.0 million of the remaining balance of unrecognized tax benefits would favorably impact the effective tax rate, if recognized.  It is reasonably possible that a reduction of $2.0 million of the balance of uncertain tax positions may occur as a result of potential settlements with taxing authorities within the next twelve months.
 
The Internal Revenue Service (IRS) is currently conducting examinations of the Company for fiscal 2012, fiscal 2013 and fiscal 2014 in accordance with the Compliance Assurance Process (CAP).  The CAP audit employs a real time review of the Company’s books and tax records by the IRS that is intended to permit issue resolution prior to the filing of the tax return.  While the federal statute of limitations remains open for fiscal 2009 and later years, IRS examinations for fiscal 2008 and prior years have been completed and the Company believes such years are effectively settled.  During fiscal 2009, consent was received from the IRS National Office approving the Company’s application to change its tax method of accounting for certain capitalized costs relating to its utility property.  During the quarter ended March 31, 2013, local IRS examiners issued no-change reports for fiscal 2009, fiscal 2010 and fiscal 2011, but have reserved the right to re-examine these years, pending the anticipated issuance of IRS guidance addressing the issue for natural gas utilities.
 
The Company is also subject to various routine state income tax examinations.  The Company’s principal subsidiaries operate mainly in four states which have statutes of limitations that generally expire between three to four years from the date of filing of the income tax return.

On March 31, 2014, the New York State fiscal year 2014-2015 Executive Budget legislation was signed into law. This legislation included numerous tax provisions, including a reduction of the corporate tax rate from 7.1% to 6.5%, effective for tax years beginning after January 1, 2016. This provision resulted in a tax benefit of approximately $2.8 million, which is reflected in the accompanying financial statements.
Capitalization
Capitalization
Capitalization
 
Common Stock.  During the six months ended March 31, 2014, the Company issued 301,793 original issue shares of common stock as a result of stock option and SARs exercises and 8,732 original issue shares of common stock for restricted stock units that vested.  In addition, the Company issued 47,943 original issue shares of common stock for the Direct Stock Purchase and Dividend Reinvestment Plan and 32,053 original issue shares of common stock for the Company’s 401(k) plans.  The Company also issued 7,712 original issue shares of common stock to the non-employee directors of the Company who receive compensation under the Company’s 2009 Non-Employee Director Equity Compensation Plan, as partial consideration for the directors’ services during the six months ended March 31, 2014.  Holders of stock options, SARs, restricted share awards or restricted stock units will often tender shares of common stock to the Company for payment of option exercise prices and/or applicable withholding taxes.  During the six months ended March 31, 2014, 79,606 shares of common stock were tendered to the Company for such purposes.  The Company considers all shares tendered as cancelled shares restored to the status of authorized but unissued shares, in accordance with New Jersey law.
 
Current Portion of Long-Term Debt.    None of the Company’s long-term debt at March 31, 2014 will mature within the following twelve-month period.
Commitments And Contingencies
Commitments And Contingencies
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 March 31, 2014, the Company has estimated its remaining clean-up costs related to former manufactured gas plant sites and third party waste disposal sites will be approximately $14.1 million.  The Company expects to recover such environmental clean-up costs through rate recovery over a period of approximately 13 years.

The Company's estimated liability for clean-up costs discussed above includes a $13.0 million estimated liability to remediate a former manufactured gas plant site located in New York.  In February 2009, the Company received approval from the NYDEC of a Remedial Design Work Plan (RDWP) for this site. In October 2010, the Company submitted a RDWP addendum to conduct additional Preliminary Design Investigation field activities necessary to design a successful remediation. As a result of this work, the Company submitted to the NYDEC a proposal to amend the NYDEC’s Record of Decision remedy for the site.  In April 2013, the NYDEC approved the Company’s proposed amendment.  Final remedial design work for the site has begun. 
 
The Company is currently not aware of any material additional exposure to environmental liabilities.  However, changes in environmental laws and regulations, new information or other factors could have an adverse financial impact on the Company.
 
Other.  The Company is involved in other litigation and regulatory matters arising in the normal course of business.  These other matters may include, for example, negligence claims and tax, regulatory or other governmental audits, inspections, investigations and other proceedings.  These matters may involve state and federal taxes, safety, compliance with regulations, rate base, cost of service and purchased gas cost issues, among other things.  While these other matters arising in the normal course of business could have a material effect on earnings and cash flows in the period in which they are resolved, an estimate of the possible loss or range of loss, if any, cannot be made at this time.
Business Segment Information
Business Segment Information
Business Segment Information    
 
The Company reports financial results for five segments: Utility, Pipeline and Storage, Exploration and Production, Energy Marketing and Gathering.  The division of the Company’s operations into reportable segments is based upon a combination of factors including differences in products and services, regulatory environment and geographic factors.
 
The data presented in the tables below reflect financial information for the segments and reconciliations to consolidated amounts.  As stated in the 2013 Form 10-K, the Company evaluates segment performance based on income before discontinued operations, extraordinary items and cumulative effects of changes in accounting (when applicable).  When these items are not applicable, the Company evaluates performance based on net income.  There have not been any changes in the basis of segmentation nor in the basis of measuring segment profit or loss from those used in the Company’s 2013 Form 10-K.  As for segment assets at March 31, 2014, there have been changes from the segment assets disclosed in the 2013 Form 10-K.  A listing of segment assets at March 31, 2014 and September 30, 2013 is shown in the tables below.  Energy Marketing segment revenue from external customers and net income for the quarter ended March 31, 2014 reflect the impact of $8.2 million and $0.4 million, respectively, of unbilled revenue and related decline in margin (net of tax).  For the six months ended March 31, 2014, Energy Marketing segment revenue from external customers and net income reflect the impact of $33.7 million and $0.9 million, respectively, of unbilled revenue and related incremental margin (net of tax).  In prior periods, Energy Marketing segment revenues and related purchased gas costs were recorded when billed, resulting in a one month lag.  The impact of not recording unbilled revenue and related costs was immaterial in all prior periods.
Quarter Ended March 31, 2014 (Thousands)
 
 
 
 
 
 
 
Utility
Pipeline and Storage
Exploration and Production
Energy Marketing
Gathering
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$377,647
$53,571
$199,561
$124,439
$195
$755,413
$597
$232
$756,242










Intersegment Revenues
$8,204
$22,235
$—
$5
$15,452
$45,896
$—
$(45,896)
$—










Segment Profit: Net Income
$35,545
$21,372
$24,390
$3,765
$7,324
$92,396
$278
$2,537
$95,211










Six Months Ended March 31, 2014 (Thousands)
 
 
 
 
 
 
 
Utility
Pipeline and Storage
Exploration and Production
Energy Marketing
Gathering
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$608,100
$104,784
$392,607
$197,598
$429
$1,303,518
$2,298
$498
$1,306,314
 
 
 
 
 
 
 
 
 
 
Intersegment Revenues
$12,911
$42,974
$—
$260
$29,802
$85,947
$—
$(85,947)
$—
 
 
 
 
 
 
 
 
 
 
Segment Profit: Net Income
$59,760
$40,510
$55,487
$5,369
$13,471
$174,597
$954
$1,912
$177,463
 
 
 
 
 
 
 
 
 
 
(Thousands)
Utility
Pipeline and Storage
Exploration and Production
Energy Marketing
Gathering
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
 
 
 
 
 
 
 
 
 
 
Segment Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At March 31, 2014
$2,019,438
$1,283,654
$2,821,355
$110,285
$247,286
$6,482,018
$95,849
$(10,672)
$6,567,195
 
 
 
 
 
 
 
 
 
 
At September 30, 2013
$1,870,587
$1,246,027
$2,746,233
$67,267
$203,323
$6,133,437
$95,793
$(10,883)
$6,218,347
Quarter Ended March 31, 2013 (Thousands)
 
 
 
 
 
 
 
Utility
Pipeline and Storage
Exploration and Production
Energy Marketing
Gathering
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated










Revenue from External Customers
$303,389
$46,383
$168,080
$78,989
$324
$597,165
$437
$224
$597,826










Intersegment Revenues
$6,396
$23,712
$—
$208
$7,898
$38,214
$—
$(38,214)
$—

 
 
 
 
 
 
 
 
 
Segment Profit: Net Income (Loss)
$34,516
$16,796
$27,711
$4,283
$3,093
$86,399
$(29)
$(650)
$85,720

Six Months Ended March 31, 2013 (Thousands)
 
 
 
 
 
 
 
Utility
Pipeline and Storage
Exploration and Production
Energy Marketing
Gathering
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
 
 
 
 
 
 
 
 
 
 
Revenue from External Customers
$511,953
$89,842
$323,529
$123,154
$526
$1,049,004
$1,252
$424
$1,050,680
 
 
 
 
 
 
 
 
 
 
Intersegment Revenues
$10,707
$46,509
$—
$634
$13,377
$71,227
$—
$(71,227)
$—
 
 
 
 
 
 
 
 
 
 
Segment Profit: Net Income (Loss)
$57,394
$33,728
$54,391
$4,778
$5,035
$155,326
$(85)
$(1,577)
$153,664
Retirement Plan And Other Post-Retirement Benefits
Retirement Plan and Other Post-Retirement Benefits
Retirement Plan and Other Post-Retirement Benefits
 
Components of Net Periodic Benefit Cost (in thousands):
 
 
Retirement Plan
 
Other Post-Retirement Benefits
Three Months Ended March 31,
2014
2013
 
2014
2013





 




Service Cost
$
2,997

$
3,961

 
$
735

$
1,176

Interest Cost
10,893

9,124

 
5,327

4,803

Expected Return on Plan Assets
(14,993
)
(14,336
)
 
(9,356
)
(8,218
)
Amortization of Prior Service Cost (Credit)
52

60

 
(534
)
(534
)
Amortization of Transition Amount
—

—

 
—

2

Amortization of Losses
9,002

13,194

 
661

5,223

Net Amortization and Deferral for Regulatory Purposes (Including Volumetric Adjustments) (1)
8,557

1,724

 
7,928

6,459






 




Net Periodic Benefit Cost
$
16,508

$
13,727

 
$
4,761

$
8,911


 
 
 
 
 
 
 
Retirement Plan
 
Other Post-Retirement Benefits
Six Months Ended March 31,
2014
2013
 
2014
2013
 
 
 
 
 
 
Service Cost
$
5,993

$
7,923

 
$
1,469

$
2,352

Interest Cost
21,787

18,249

 
10,654

9,606

Expected Return on Plan Assets
(29,986
)
(28,673
)
 
(18,712
)
(16,436
)
Amortization of Prior Service Cost (Credit)
105

119

 
(1,069
)
(1,069
)
Amortization of Transition Amount
—

—

 
—

4

Amortization of Losses
18,003

26,388

 
1,323

10,446

Net Amortization and Deferral for Regulatory Purposes (Including Volumetric Adjustments) (1)
10,135

(1,958
)
 
13,988

9,162

 
 
 
 
 
 
Net Periodic Benefit Cost
$
26,037

$
22,048

 
$
7,653

$
14,065


(1) The Company’s policy is to record retirement plan and other post-retirement benefit costs in the Utility segment on a volumetric basis to reflect the fact that the Utility segment experiences higher throughput of natural gas in the winter months and lower throughput of natural gas in the summer months.
 
Employer Contributions.    During the six months ended March 31, 2014, the Company contributed $30.0 million to its tax-qualified, noncontributory defined-benefit retirement plan (Retirement Plan) and $2.0 million to its VEBA trusts and 401(h) accounts for its other post-retirement benefits.  In the remainder of 2014, the Company expects its contributions to the Retirement Plan to be in the range of zero to $5.0 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 fiscal 2014 in order to be in compliance with the Pension Protection Act of 2006 (as impacted by the Moving Ahead for Progress in the 21st Century Act).  In July 2012, the Surface Transportation Extension Act, which is also referred to as the Moving Ahead for Progress in the 21st Century Act (the Act), was passed by Congress and signed by the President.  The Act included pension funding stabilization provisions.  The Company is continually evaluating its future contributions in light of the provisions of the Act. In the remainder of 2014, the Company expects its contributions to its VEBA trusts and 401(h) accounts to be in the range of zero to $10.0 million.
Regulatory Matters
Regulatory Matters
Regulatory Matters
 
Following discussions with regulatory staff with respect to earnings levels, on March 27, 2013, Distribution Corporation filed a plan (“Plan”) with the NYPSC proposing to adopt an “earnings stabilization and sharing mechanism” that would allocate earnings above a rate of return on equity of 9.96% evenly between shareholders and an accounting reserve (“Reserve”).  The Reserve would be utilized to stabilize Distribution Corporation’s earnings and to fund customer benefit programs.  The Plan also proposed to increase capital spending and to aid new customer system expansion efforts.  Discussions were held with NYPSC staff and others with respect to the Plan. 
 
Subsequently, on April 19, 2013, the NYPSC issued an order directing Distribution Corporation to either agree to make its rates and charges temporary subject to refund effective June 1, 2013, or show cause why its gas rates and charges should not be set on a temporary basis subject to refund (“Order”).  The Order recognized Distribution Corporation’s Plan and, while acknowledging the Company’s cost-cutting and efficiency achievements, determined nonetheless that the Plan did not propose to adjust “existing rates . . . enough to compensate for the imbalance between ratepayer and shareholder interests that has developed since . . . 2007 . . .”  Pursuant to the Order, the NYPSC commenced a “temporary rate” proceeding and, following hearings, on June 14, 2013, the NYPSC issued an order (“Temporary Rates Order”) making Distribution Corporation’s rates and charges temporary and subject to refund pending the determination of permanent gas rates through further rate proceedings.  Discussions for settlement of Distribution Corporation’s rates and charges were commenced while the formal case to establish permanent rates proceeded along a parallel path.  
 
In addition to authorizing a “temporary rate” proceeding, the Order also suggested an examination of the applicability of a provision of New York public utility law, PSL §66(20), that provides the NYPSC with stated authority to direct a refund of revenues received by a utility “in excess of its authorized rate of return for a period of twelve months.” On May 17, 2013, Distribution Corporation commenced an action in New York Supreme Court, Erie County, seeking the court’s declaration that PSL §66(20) is unconstitutional.  On October 25, 2013, the court dismissed Distribution Corporation’s complaint without prejudice to recommence the action after a decision is rendered in the rate proceeding before the NYPSC.  In addition, on September 25, 2013, Distribution Corporation commenced an appeal in New York Supreme Court, Albany County, seeking to annul the Temporary Rates Order on various grounds. 
 
On December 6, 2013, Distribution Corporation filed an agreement, executed by five of the six active parties in the rate proceeding, for settlement of the temporary rate proceeding and all issues relating to rates.  The settlement agreement proposes to fix customer rates at existing levels for a minimum two-year term retroactive to October 1, 2013.  Although customer rates are fixed, the parties agreed that the allowed rate of return on equity would be set, for ratemaking purposes, at 9.1%.  Following conventional practice in New York, the agreement also proposes an “earnings sharing mechanism” (“ESM”).  The ESM distributes earnings above the allowed rate of return as follows:  from 9.5% to 10.5%, 50% would be allocated to shareholders, and 50% will be deferred for the benefit of customers; above 10.5%, 20% would be allocated to shareholders and 80% will be deferred for the benefit of customers.  The agreement further authorizes, and rates reflect, an increase in Distribution Corporation’s pipeline replacement spending by $8.2 million per year.  The agreement contains other terms and conditions of service that are customary for settlement agreements recently approved by the NYPSC.  The Consolidated Balance Sheets at March 31, 2014 and September 30, 2013 reflect a $7.5 million refund provision related to the settlement agreement.
 
Signatory parties also filed statements with the NYPSC requesting approval of the settlement agreement without modification.  One special-interest consumer advocate is opposing the settlement agreement.  Following further proceedings, the NYPSC approved the settlement agreement at a regular session held in May 2014.
Summary Of Significant Accounting Policies (Policy)
Principles Of Consolidation 
Principles of Consolidation.  The Company consolidates all entities in which it has a controlling financial interest.  All significant intercompany balances and transactions are eliminated.
 
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
Reclassifications 
Reclassifications.  Certain prior year amounts have been reclassified to conform with current year presentation.
Earnings For Interim Periods 
Earnings for Interim Periods.  The Company, in its opinion, has included all adjustments (which consist of only normally recurring adjustments, unless otherwise disclosed in this Form 10-Q) that are necessary for a fair statement of the results of operations for the reported periods. The consolidated financial statements and notes thereto, included herein, should be read in conjunction with the financial statements and notes for the years ended September 30, 2013, 2012 and 2011 that are included in the Company's 2013 Form 10-K.  The consolidated financial statements for the year ended September 30, 2014 will be audited by the Company's independent registered public accounting firm after the end of the fiscal year.
 
The earnings for the six months ended March 31, 2014 should not be taken as a prediction of earnings for the entire fiscal year ending September 30, 2014.  Most of the business of the Utility and Energy Marketing segments is seasonal in nature and is influenced by weather conditions.  Due to the seasonal nature of the heating business in the Utility and Energy Marketing segments, earnings during the winter months normally represent a substantial part of the earnings that those segments are expected to achieve for the entire fiscal year.  The Company’s business segments are discussed more fully in Note 7 – Business Segment Information.
Consolidated Statement Of Cash Flows 
Consolidated Statement of Cash Flows.  For purposes of the Consolidated Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of generally three months or less to be cash equivalents.
Hedging Collateral Deposits 
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 March 31, 2014, the Company had no hedging collateral deposits outstanding. At September 30, 2013, the Company had hedging collateral deposits of $1.1 million related to its exchange-traded futures contracts.  In accordance with its accounting policy, the Company does not offset hedging collateral deposits paid or received against related derivative financial instruments liability or asset balances.
Gas Stored Underground - Current 
Gas Stored Underground - Current.  In the Utility segment, gas stored underground – current is carried at lower of cost or market, on a LIFO method.  Gas stored underground – current normally declines during the first and second quarters of the year and is replenished during the third and fourth quarters.  In the Utility segment, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets under the caption “Other Accruals and Current Liabilities.”  Such reserve, which amounted to $73.9 million at March 31, 2014, is reduced to zero by September 30 of each year as the inventory is replenished.
Property, Plant and Equipment 
Property, Plant and Equipment.  In the Company’s Exploration and Production segment, oil and gas property acquisition, exploration and development costs are capitalized under the full cost method of accounting. Under this methodology, all costs associated with property acquisition, exploration and development activities are capitalized, including internal costs directly identified with acquisition, exploration and development activities. The internal costs that are capitalized do not include any costs related to production, general corporate overhead, or similar activities. The Company does not recognize any gain or loss on the sale or other disposition of oil and gas properties unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center.
 
Capitalized costs include costs related to unproved properties, which are excluded from amortization until proved reserves are found or it is determined that the unproved properties are impaired.  Such costs amounted to $184.5 million and $106.1 million at March 31, 2014 and September 30, 2013, respectively.  All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. The amount of any impairment is transferred to the pool of capitalized costs being amortized.
 
Capitalized costs are subject to the SEC full cost ceiling test. The ceiling test, which is performed each quarter, determines a limit, or ceiling, on the amount of property acquisition, exploration and development costs that can be capitalized. The ceiling under this test represents (a) the present value of estimated future net cash flows, excluding future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, using a discount factor of 10%, which is computed by applying prices of oil and gas (as adjusted for hedging) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet, less estimated future expenditures, plus (b) the cost of unevaluated properties not being depleted, less (c) income tax effects related to the differences between the book and tax basis of the properties. The natural gas and oil prices used to calculate the full cost ceiling are based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the twelve-month period prior to the end of the reporting period. If capitalized costs, net of accumulated depreciation, depletion and amortization and related deferred income taxes, exceed the ceiling at the end of any quarter, a permanent impairment is required to be charged to earnings in that quarter.  At March 31, 2014, the ceiling exceeded the book value of the oil and gas properties by approximately $204.0 million.
Accumulated Other Comprehensive Income (Loss) 
Accumulated Other Comprehensive Loss.  The components of Accumulated Other Comprehensive Loss and changes for the quarter and six months ended March 31, 2014, net of related tax effect, are as follows (amounts in parentheses indicate debits) (in thousands): 
Three Months Ended March 31, 2014
 
Gains and Losses on Derivative Financial Instruments
Gains and Losses on Securities Available for Sale
Funded Status of the Pension and Other Post-Retirement Benefit Plans
Total
Balance at January 1, 2014
$
26,345

$
7,910

$
(56,293
)
$
(22,038
)
Other Comprehensive Gains and Losses Before Reclassifications
(38,878
)
391

—

(38,487
)
Amounts Reclassified From Other Comprehensive Loss
15,470

—

—

15,470

Balance at March 31, 2014
$
2,937

$
8,301

$
(56,293
)
$
(45,055
)
 
Six Months Ended March 31, 2014
 
Gains and Losses on Derivative Financial Instruments
Gains and Losses on Securities Available for Sale
Funded Status of the Pension and Other Post-Retirement Benefit Plans
Total
Balance at October 1, 2013
$
30,722

$
6,337

$
(56,293
)
$
(19,234
)
Other Comprehensive Gains and Losses Before Reclassifications
(37,370
)
1,964

—

(35,406
)
Amounts Reclassified From Other Comprehensive Loss
9,585

—

—

9,585

Balance at March 31, 2014
$
2,937

$
8,301

$
(56,293
)
$
(45,055
)
Reclassifications Out Of Accumulated Other Comprehensive Loss 
Reclassifications Out of Accumulated Other Comprehensive Loss.  The details about the reclassification adjustments out of accumulated other comprehensive loss for the quarter and six months ended March 31, 2014 are as follows (amounts in parentheses indicate debits to the income statement) (in thousands):
Three Months Ended March 31, 2014
Details About Accumulated Other Comprehensive Loss Components
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss
Affected Line Item in the Statement Where Net Income is Presented
Gains (Losses) on Derivative Financial Instrument Cash Flow Hedges:
 
 
Commodity Contracts

($22,611
)
Operating Revenues
Commodity Contracts
(4,029
)
Purchased Gas
 
(26,640
)
Total Before Income Tax
 
11,170

Income Tax Expense
 

($15,470
)
Net of Tax

Six Months Ended March 31, 2014
Details About Accumulated Other Comprehensive Loss Components
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss
Affected Line Item in the Statement Where Net Income is Presented
Gains (Losses) on Derivative Financial Instrument Cash Flow Hedges:
 
 
Commodity Contracts

($12,825
)
Operating Revenues
Commodity Contracts
(3,632
)
Purchased Gas
 
(16,457
)
Total Before Income Tax
 
6,872

Income Tax Expense
 

($9,585
)
Net of Tax
Other Current Assets 

Other Current Assets.  The components of the Company’s Other Current Assets are as follows (in thousands):
                            
At March 31, 2014
 
At September 30, 2013
 
 
 
 
Prepayments
$
4,221

 
$
10,605

Prepaid Property and Other Taxes
21,950

 
13,079

Federal Income Taxes Receivable
—

 
1,122

State Income Taxes Receivable
—

 
3,275

Fair Values of Firm Commitments
—

 
1,829

Regulatory Assets
28,732

 
26,995

 
$
54,903

 
$
56,905

Other Accruals And Current Liabilities 
Other Accruals and Current Liabilities.  The components of the Company’s Other Accruals and Current Liabilities are as follows (in thousands):
                            
At March 31, 2014
 
At September 30, 2013
 
 
 
 
Accrued Capital Expenditures
$
90,831

 
$
41,100

Regulatory Liabilities
11,085

 
20,013

Reserve for Gas Replacement
73,883

 
—

Federal Income Taxes Payable
30,802

 
—

State Income Taxes Payable
4,063

 
—

Other
25,236

 
22,833

 
$
235,900

 
$
83,946

Earnings Per Common Share 
Earnings Per Common Share.  Basic earnings per common share is computed by dividing net income available for common stock by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  For purposes of determining earnings per common share, the potentially dilutive securities the Company has outstanding are stock options, SARs, restricted stock units and performance shares.  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, restricted stock units and performance shares that are antidilutive are excluded from the calculation of diluted earnings per common share.  There were no securities excluded as being antidilutive for the quarter ended March 31, 2014. There were 265 securities excluded as being antidilutive for the six months ended March 31, 2014.  There were 208,819 and 362,681 securities excluded as being antidilutive for the quarter and six months ended March 31, 2013, respectively.
 
Stock-Based Compensation 
Stock-Based Compensation.  The Company granted 116,090 performance shares during the six months ended March 31, 2014. The weighted average fair value of such performance shares was $67.16 per share for the six months ended March 31, 2014. Performance shares are an award constituting units denominated in common stock of the Company, the number of which may be adjusted over a performance cycle based upon the extent to which performance goals have been satisfied.  Earned performance shares may be distributed in the form of shares of common stock of the Company, an equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company. The performance shares do not entitle the participant to receive dividends during the vesting period.
 
Half of the performance shares granted during the six months ended March 31, 2014 must meet a performance goal related to relative return on capital over the performance cycle of October 1, 2013 to September 30, 2016.  The performance goal over the performance cycle is the Company’s total return on capital relative to the total return on capital of other companies in a group selected by the Compensation Committee (“Report Group”).  Total return on capital for a given company means the average of the Report Group companies’ returns on capital for each twelve month period corresponding to each of the Company’s fiscal years during the performance cycle, based on data reported for the Report Group companies in the Bloomberg database.  The number of these performance shares that will vest and be paid will depend upon the Company’s performance relative to the Report Group and not upon the absolute level of return achieved by the Company.  The fair value of these performance shares is calculated by multiplying the expected number of shares that will be issued by the average market price of Company common stock on the date of grant reduced by the present value of forgone dividends over the vesting term of the award.  The fair value is recorded as compensation expense over the vesting term of the award.  The other half of the performance shares granted during the six months ended March 31, 2014 must meet a performance goal related to total shareholder return over the performance cycle of October 1, 2013 to September 30, 2016.  The performance goal over the performance cycle is the Company’s three-year total shareholder return relative to the three-year total shareholder return of the other companies in the Report Group.  Three-year shareholder return for a given company will be based on the data reported for that company (with the starting and ending stock prices over the performance cycle calculated as the average closing stock price for the prior calendar month and with dividends reinvested in that company’s securities at each ex-dividend date) in the Bloomberg database.  The number of these performance shares that will vest and be paid will depend upon the Company’s performance relative to the Report Group and not upon the absolute level of return achieved by the Company.  The fair value price at the date of grant for these performance shares is determined using a Monte Carlo simulation technique, which includes a reduction in value for the present value of forgone dividends over the vesting term of the award.  This price is multiplied by the number of performance shares awarded, the result of which is recorded as compensation expense over the vesting term of the award.
 
The Company granted 80,951 non-performance based restricted stock units during the six months ended March 31, 2014.  The weighted average fair value of such non-performance based restricted stock units was $65.23 per share for the six months ended March 31, 2014. 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 non-performance based restricted stock units do not entitle the participant to receive dividends during the vesting period. The accounting for non-performance based restricted stock units is the same as the accounting for restricted share awards, except that the fair value at the date of grant of the restricted stock units must be reduced by the present value of forgone dividends over the vesting term of the award.
 
No stock options, SARs or restricted share awards were granted by the Company during the six months ended March 31, 2014.
Summary Of Significant Accounting Policies (Tables)
Components Of Accumulated Other Comprehensive Income (Loss) 
The components of Accumulated Other Comprehensive Loss and changes for the quarter and six months ended March 31, 2014, net of related tax effect, are as follows (amounts in parentheses indicate debits) (in thousands): 
Three Months Ended March 31, 2014
 
Gains and Losses on Derivative Financial Instruments
Gains and Losses on Securities Available for Sale
Funded Status of the Pension and Other Post-Retirement Benefit Plans
Total
Balance at January 1, 2014
$
26,345

$
7,910

$
(56,293
)
$
(22,038
)
Other Comprehensive Gains and Losses Before Reclassifications
(38,878
)
391

—

(38,487
)
Amounts Reclassified From Other Comprehensive Loss
15,470

—

—

15,470

Balance at March 31, 2014
$
2,937

$
8,301

$
(56,293
)
$
(45,055
)
 
Six Months Ended March 31, 2014
 
Gains and Losses on Derivative Financial Instruments
Gains and Losses on Securities Available for Sale
Funded Status of the Pension and Other Post-Retirement Benefit Plans
Total
Balance at October 1, 2013
$
30,722

$
6,337

$
(56,293
)
$
(19,234
)
Other Comprehensive Gains and Losses Before Reclassifications
(37,370
)
1,964

—

(35,406
)
Amounts Reclassified From Other Comprehensive Loss
9,585

—

—

9,585

Balance at March 31, 2014
$
2,937

$
8,301

$
(56,293
)
$
(45,055
)
Schedule Of Reclassifications Out Of Accumulated Other Comprehensive Loss 
The details about the reclassification adjustments out of accumulated other comprehensive loss for the quarter and six months ended March 31, 2014 are as follows (amounts in parentheses indicate debits to the income statement) (in thousands):
Three Months Ended March 31, 2014
Details About Accumulated Other Comprehensive Loss Components
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss
Affected Line Item in the Statement Where Net Income is Presented
Gains (Losses) on Derivative Financial Instrument Cash Flow Hedges:
 
 
Commodity Contracts

($22,611
)
Operating Revenues
Commodity Contracts
(4,029
)
Purchased Gas
 
(26,640
)
Total Before Income Tax
 
11,170

Income Tax Expense
 

($15,470
)
Net of Tax

Six Months Ended March 31, 2014
Details About Accumulated Other Comprehensive Loss Components
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss
Affected Line Item in the Statement Where Net Income is Presented
Gains (Losses) on Derivative Financial Instrument Cash Flow Hedges:
 
 
Commodity Contracts

($12,825
)
Operating Revenues
Commodity Contracts
(3,632
)
Purchased Gas
 
(16,457
)
Total Before Income Tax
 
6,872

Income Tax Expense
 

($9,585
)
Net of Tax
Schedule Of Other Current Assets 
The components of the Company’s Other Current Assets are as follows (in thousands):
                            
At March 31, 2014
 
At September 30, 2013
 
 
 
 
Prepayments
$
4,221

 
$
10,605

Prepaid Property and Other Taxes
21,950

 
13,079

Federal Income Taxes Receivable
—

 
1,122

State Income Taxes Receivable
—

 
3,275

Fair Values of Firm Commitments
—

 
1,829

Regulatory Assets
28,732

 
26,995

 
$
54,903

 
$
56,905

Schedule Of Other Accruals And Current Liabilities 
The components of the Company’s Other Accruals and Current Liabilities are as follows (in thousands):
                            
At March 31, 2014
 
At September 30, 2013
 
 
 
 
Accrued Capital Expenditures
$
90,831

 
$
41,100

Regulatory Liabilities
11,085

 
20,013

Reserve for Gas Replacement
73,883

 
—

Federal Income Taxes Payable
30,802

 
—

State Income Taxes Payable
4,063

 
—

Other
25,236

 
22,833

 
$
235,900

 
$
83,946

Fair Value Measurements (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] 
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 March 31, 2014 and September 30, 2013.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.  The fair value presentation for over the counter swaps has been changed to combine gas and oil swaps at both March 31, 2014 and September 30, 2013.  In the September 30, 2013 Form 10-K, gas swaps were reported separately from oil swaps.  This change in presentation was made because a significant number of the counterparties enter into both gas and oil swap agreements with the Company.  

Recurring Fair Value Measures
At fair value as of March 31, 2014
(Thousands of Dollars)   
Level 1
 
Level 2
 
Level 3
 
Netting Adjustments(1)
 
Total(1)
Assets:
 

 
 

 
 

 
 

 
 

Cash Equivalents – Money Market Mutual Funds
$
129,892

 
$
—

 
$
—

 
$
—

 
$
129,892

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
3,297

 
—

 
—

 
(847
)
 
2,450

Over the Counter Swaps – Gas and Oil
—

 
48,284

 
273

 
(25,230
)
 
23,327

Other Investments:
 

 
 

 
 

 
 

 
 

Balanced Equity Mutual Fund
34,407

 
—

 
—

 
—

 
34,407

Common Stock – Financial Services Industry
7,631

 
—

 
—

 
—

 
7,631

Other Common Stock
383

 
—

 
—

 
—

 
383

Hedging Collateral Deposits
—

 
—

 
—

 
—

 
—

Total                                           
$
175,610

 
$
48,284

 
$
273

 
$
(26,077
)
 
$
198,090

 
 
 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

 
 

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
$
847

 
$
—

 
$
—

 
$
(847
)
 
$
—

Over the Counter Swaps – Gas and Oil
—

 
45,822

 
1,644

 
(25,230
)
 
22,236

Total
$
847

 
$
45,822

 
$
1,644

 
$
(26,077
)
 
$
22,236

 
 
 
 
 
 
 
 
 
 
Total Net Assets/(Liabilities)
$
174,763

 
$
2,462

 
$
(1,371
)
 
$
—

 
$
175,854

 
Recurring Fair Value Measures
At fair value as of September 30, 2013
(Thousands of Dollars)   
Level 1
 
Level 2
 
Level 3
 
Netting Adjustments(1)
 
Total(1)
Assets:
 

 
 

 
 

 
 

 
 

Cash Equivalents – Money Market Mutual Funds
$
51,332

 
$
—

 
$
—

 
$
—

 
$
51,332

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
2,552

 
—

 
—

 
(1,641
)
 
911

Over the Counter Swaps – Gas and Oil
—

 
57,070

 
—

 
(9,003
)
 
48,067

Other Investments:
 

 
 

 
 

 
 

 
 

Balanced Equity Mutual Fund
31,813

 
—

 
—

 
—

 
31,813

Common Stock – Financial Services Industry
6,544

 
—

 
—

 
—

 
6,544

Other Common Stock
330

 
—

 
—

 
—

 
330

Hedging Collateral Deposits
1,094

 
—

 
—

 
—

 
1,094

Total                                           
$
93,665

 
$
57,070

 
$
—

 
$
(10,644
)
 
$
140,091

 
 
 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

 
 

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
$
1,641

 
$
—

 
$
—

 
$
(1,641
)
 
$
—

Over the Counter Swaps – Gas and Oil
—

 
4,452

 
5,190

 
(9,003
)
 
639

Total
$
1,641

 
$
4,452

 
$
5,190

 
$
(10,644
)
 
$
639

 
 
 
 
 
 
 
 
 
 
Total Net Assets/(Liabilities)
$
92,024

 
$
52,618

 
$
(5,190
)
 
$
—

 
$
139,452


(1) 
Netting Adjustments represent the impact of legally-enforceable master netting arrangements that allow the Company to net gain and loss positions held with the same counterparties. The net asset or net liability for each counterparty is recorded as an asset or liability on the Company’s balance sheet.
Fair Value Measurements Using Unobservable Inputs (Level 3) 
All settlements of the derivative financial instruments are reflected in the Gains/Losses Realized and Included in Earnings column of the tables below (amounts in parentheses indicate credits in the derivative asset/liability accounts). 
 
Fair Value Measurements Using Unobservable Inputs (Level 3)
(Thousands of Dollars)   
 
Total Gains/Losses 
 
 
 
January 1, 2014
Gains/Losses Realized and Included in Earnings
Gains/Losses Unrealized and Included in Other Comprehensive Income (Loss)
Transfer In/Out of Level 3
March 31, 2014
Derivative Financial Instruments(2)
$
(1,842
)
$
763

(1) 
$
(292
)
$
—

$
(1,371
)
 
(1) 
Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the three months ended March 31, 2014. 
(2) 
Derivative Financial Instruments are shown on a net basis.

Fair Value Measurements Using Unobservable Inputs (Level 3)
(Thousands of Dollars)   
 
Total Gains/Losses 
 
 
 
October 1, 2013
Gains/Losses Realized and Included in Earnings
Gains/Losses Unrealized and Included in Other Comprehensive Income (Loss)
Transfer In/Out of Level 3
March 31, 2014
Derivative Financial Instruments(2)
$
(5,190
)
$
1,043

(1) 
$
2,776

$
—

$
(1,371
)
 
(1) 
Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the six months ended March 31, 2014. 
(2) 
Derivative Financial Instruments are shown on a net basis.

Fair Value Measurements Using Unobservable Inputs (Level 3)
(Thousands of Dollars)   
 
Total Gains/Losses 
 
 
 
January 1, 2013
Gains/Losses Realized and Included in Earnings
Gains/Losses Unrealized and Included in Other Comprehensive Income (Loss)
Transfer In/Out of Level 3
March 31, 2013
Derivative Financial Instruments(2)
$
(14,089
)
$
4,539

(1) 
$
(7,056
)
$
—

$
(16,606
)

(1) 
Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the three months ended March 31, 2013. 
(2) 
Derivative Financial Instruments are shown on a net basis.

Fair Value Measurements Using Unobservable Inputs (Level 3)
(Thousands of Dollars)   
 
Total Gains/Losses 
 
 
 
October 1, 2012
Gains/Losses Realized and Included in Earnings
Gains/Losses Unrealized and Included in Other Comprehensive Income (Loss)
Transfer In/Out of Level 3
March 31, 2013
Derivative Financial Instruments(2)
$
(19,664
)
$
6,801

(1) 
$
(3,743
)
$
—

$
(16,606
)

(1) 
Amounts are reported in Operating Revenues in the Consolidated Statement of Income for the six months ended March 31, 2013. 
(2) 
Derivative Financial Instruments are shown on a net basis.
Financial Instruments (Tables)
Long-Term Debt 
Based on these criteria, the fair market value of long-term debt, including current portion, was as follows (in thousands): 
 
March 31, 2014
 
September 30, 2013
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Long-Term Debt
$
1,649,000

 
$
1,787,823

 
$
1,649,000

 
$
1,767,519

Schedule Of Derivative Financial Instruments Designated And Qualifying As Cash Flow Hedges On The Statement Of Financial Performance 
The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the
Three Months Ended March 31, 2014 and 2013 (Thousands of Dollars)
Derivatives in Cash Flow Hedging Relationships
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion) for the Three Months Ended March 31,
Location 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)
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) for the Three Months Ended March 31,
Location of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) for the Three Months Ended March 31,
 
2014
2013
 
2014
2013
 
2014
2013
Commodity Contracts - Exploration & Production segment
$
(64,237
)
$
(47,364
)
Operating Revenue
$
(22,611
)
$
11,285

Operating Revenue
$
(660
)
$
(456
)
Commodity Contracts - Energy Marketing segment
$
(3,224
)
$
14

Purchased Gas
$
(4,029
)
$
(782
)
Not Applicable
$
—

$
—

Commodity Contracts - Pipeline & Storage segment (1)
$
—

$
—

Operating Revenue
$
—

$
—

Not Applicable
$
—

$
—

Total
$
(67,461
)
$
(47,350
)
 
$
(26,640
)
$
10,503

 
$
(660
)
$
(456
)
 

The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the
Six Months Ended March 31, 2014 and 2013 (Thousands of Dollars)
Derivatives in Cash Flow Hedging Relationships
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion) for the Six Months Ended March 31,
Location 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)
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) for the Six Months Ended March 31,
Location of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) for the Six Months Ended March 31,
 
2014
2013
 
2014
2013
 
2014
2013
Commodity Contracts - Exploration & Production segment
$
(59,117
)
$
(13,750
)
Operating Revenue
$
(12,825
)
$
23,590

Operating Revenue
$
774

$
(456
)
Commodity Contracts - Energy Marketing segment
$
(5,565
)
$
1,749

Purchased Gas
$
(3,632
)
$
(830
)
Not Applicable
$
—

$
—

Commodity Contracts - Pipeline & Storage segment (1)
$
—

$
—

Operating Revenue
$
—

$
(672
)
Not Applicable
$
—

$
—

Total
$
(64,682
)
$
(12,001
)
 
$
(16,457
)
$
22,088

 
$
774

$
(456
)
 
(1) 
There were no open hedging positions at March 31, 2014 or 2013.
Schedule Of Derivatives And Hedged Items In Fair Value Hedging Relationships 
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.

Derivatives in Fair Value Hedging Relationships – Energy Marketing segment
Location of Gain or (Loss) on Derivative and Hedged Item Recognized in the Consolidated Statement of Income
Amount of Gain or (Loss) on Derivative Recognized in the Consolidated Statement of Income for the Six Months Ended March 31, 2014 (In Thousands)
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income for the Six Months Ended March 31, 2014 (In Thousands)
Commodity Contracts – Hedge of fixed price sales commitments of natural gas
Operating Revenues
$
3,779

$
(3,779
)
Commodity Contracts – Hedge of fixed price purchase commitments of natural gas
Purchased Gas
$
(440
)
$
440

Commodity Contracts – Hedge of natural gas held in storage
Purchased Gas
$
(38
)
$
38

 
 
$
3,301

$
(3,301
)
Income Taxes (Tables)
Components Of Federal And State Income Taxes Included In The Consolidated Statements Of Income 
The components of federal and state income taxes included in the Consolidated Statements of Income are as follows (in thousands): 
                                                         
Six Months Ended 
 March 31,
                                                         
2014
 
2013
Current Income Taxes 
 

 
 

Federal                                              
$
39,974

 
$
(6,318
)
State                                                  
9,607

 
2,496

 
 
 
 
Deferred Income Taxes                                
 

 
 

Federal                                               
50,110

 
82,788

State                                                    
21,829

 
19,769

 
121,520

 
98,735

Deferred Investment Tax Credit                            
(218
)
 
(213
)
 
 
 
 
Total Income Taxes                                      
$
121,302

 
$
98,522

Presented as Follows:
 

 
 

Other Income
(218
)
 
(213
)
Income Tax Expense
121,520

 
98,735

 
 
 
 
Total Income Taxes
$
121,302

 
$
98,522

Schedule Of Income Tax Reconciliation By Applying Federal Income Tax Rate 
Total income taxes as reported differ from the amounts that were computed by applying the federal income tax rate to income before income taxes.  The following is a reconciliation of this difference (in thousands): 
 
Six Months Ended 
 March 31,
 
2014
 
2013
U.S. Income Before Income Taxes
$
298,765

 
$
252,186

 
 

 
 

Income Tax Expense, Computed at U.S. Federal Statutory Rate of 35%
$
104,568

 
$
88,265

 
 
 
 
Increase (Reduction) in Taxes Resulting from:
 

 
 

State Income Taxes
20,433

 
14,473

Miscellaneous
(3,699
)
 
(4,216
)
 
 
 
 
Total Income Taxes
$
121,302

 
$
98,522

Significant Components Of Deferred Tax Liabilities And Assets 
Significant components of the Company’s deferred tax liabilities and assets were as follows (in thousands):
                            
At March 31, 2014
 
At September 30, 2013
Deferred Tax Liabilities:
 
 
 
Property, Plant and Equipment
$
1,551,701

 
$
1,504,187

Pension and Other Post-Retirement Benefit Costs
121,780

 
124,021

Other                             
55,562

 
75,419

Total Deferred Tax Liabilities
1,729,043

 
1,703,627

 
 
 
 
Deferred Tax Assets:
 

 
 

Pension and Other Post-Retirement Benefit Costs
(132,752
)
 
(130,256
)
Tax Loss Carryforwards
(184,123
)
 
(215,262
)
Other                            
(99,087
)
 
(90,461
)
Total Deferred Tax Assets
(415,962
)
 
(435,979
)
Total Net Deferred Income Taxes
$
1,313,081

 
$
1,267,648

 
 
 
 
Presented as Follows:
 

 
 

Net Deferred Tax Liability/(Asset) – Current
(39,650
)
 
(79,359
)
Net Deferred Tax Liability – Non-Current
1,352,731

 
1,347,007

Total Net Deferred Income Taxes
$
1,313,081

 
$
1,267,648

Business Segment Information (Tables)
Financial Segment Information By Segment
Quarter Ended March 31, 2014 (Thousands)
 
 
 
 
 
 
 
Utility
Pipeline and Storage
Exploration and Production
Energy Marketing
Gathering
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$377,647
$53,571
$199,561
$124,439
$195
$755,413
$597
$232
$756,242










Intersegment Revenues
$8,204
$22,235
$—
$5
$15,452
$45,896
$—
$(45,896)
$—










Segment Profit: Net Income
$35,545
$21,372
$24,390
$3,765
$7,324
$92,396
$278
$2,537
$95,211










Six Months Ended March 31, 2014 (Thousands)
 
 
 
 
 
 
 
Utility
Pipeline and Storage
Exploration and Production
Energy Marketing
Gathering
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$608,100
$104,784
$392,607
$197,598
$429
$1,303,518
$2,298
$498
$1,306,314
 
 
 
 
 
 
 
 
 
 
Intersegment Revenues
$12,911
$42,974
$—
$260
$29,802
$85,947
$—
$(85,947)
$—
 
 
 
 
 
 
 
 
 
 
Segment Profit: Net Income
$59,760
$40,510
$55,487
$5,369
$13,471
$174,597
$954
$1,912
$177,463
 
 
 
 
 
 
 
 
 
 
(Thousands)
Utility
Pipeline and Storage
Exploration and Production
Energy Marketing
Gathering
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
 
 
 
 
 
 
 
 
 
 
Segment Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At March 31, 2014
$2,019,438
$1,283,654
$2,821,355
$110,285
$247,286
$6,482,018
$95,849
$(10,672)
$6,567,195
 
 
 
 
 
 
 
 
 
 
At September 30, 2013
$1,870,587
$1,246,027
$2,746,233
$67,267
$203,323
$6,133,437
$95,793
$(10,883)
$6,218,347
Quarter Ended March 31, 2013 (Thousands)
 
 
 
 
 
 
 
Utility
Pipeline and Storage
Exploration and Production
Energy Marketing
Gathering
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated










Revenue from External Customers
$303,389
$46,383
$168,080
$78,989
$324
$597,165
$437
$224
$597,826










Intersegment Revenues
$6,396
$23,712
$—
$208
$7,898
$38,214
$—
$(38,214)
$—

 
 
 
 
 
 
 
 
 
Segment Profit: Net Income (Loss)
$34,516
$16,796
$27,711
$4,283
$3,093
$86,399
$(29)
$(650)
$85,720

Six Months Ended March 31, 2013 (Thousands)
 
 
 
 
 
 
 
Utility
Pipeline and Storage
Exploration and Production
Energy Marketing
Gathering
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
 
 
 
 
 
 
 
 
 
 
Revenue from External Customers
$511,953
$89,842
$323,529
$123,154
$526
$1,049,004
$1,252
$424
$1,050,680
 
 
 
 
 
 
 
 
 
 
Intersegment Revenues
$10,707
$46,509
$—
$634
$13,377
$71,227
$—
$(71,227)
$—
 
 
 
 
 
 
 
 
 
 
Segment Profit: Net Income (Loss)
$57,394
$33,728
$54,391
$4,778
$5,035
$155,326
$(85)
$(1,577)
$153,664
Retirement Plan And Other Post-Retirement Benefits (Tables)
Components of Net Periodic Benefit Cost
Components of Net Periodic Benefit Cost (in thousands):
 
 
Retirement Plan
 
Other Post-Retirement Benefits
Three Months Ended March 31,
2014
2013
 
2014
2013





 




Service Cost
$
2,997

$
3,961

 
$
735

$
1,176

Interest Cost
10,893

9,124

 
5,327

4,803

Expected Return on Plan Assets
(14,993
)
(14,336
)
 
(9,356
)
(8,218
)
Amortization of Prior Service Cost (Credit)
52

60

 
(534
)
(534
)
Amortization of Transition Amount
—

—

 
—

2

Amortization of Losses
9,002

13,194

 
661

5,223

Net Amortization and Deferral for Regulatory Purposes (Including Volumetric Adjustments) (1)
8,557

1,724

 
7,928

6,459






 




Net Periodic Benefit Cost
$
16,508

$
13,727

 
$
4,761

$
8,911


 
 
 
 
 
 
 
Retirement Plan
 
Other Post-Retirement Benefits
Six Months Ended March 31,
2014
2013
 
2014
2013
 
 
 
 
 
 
Service Cost
$
5,993

$
7,923

 
$
1,469

$
2,352

Interest Cost
21,787

18,249

 
10,654

9,606

Expected Return on Plan Assets
(29,986
)
(28,673
)
 
(18,712
)
(16,436
)
Amortization of Prior Service Cost (Credit)
105

119

 
(1,069
)
(1,069
)
Amortization of Transition Amount
—

—

 
—

4

Amortization of Losses
18,003

26,388

 
1,323

10,446

Net Amortization and Deferral for Regulatory Purposes (Including Volumetric Adjustments) (1)
10,135

(1,958
)
 
13,988

9,162

 
 
 
 
 
 
Net Periodic Benefit Cost
$
26,037

$
22,048

 
$
7,653

$
14,065


(1) The Company’s policy is to record retirement plan and other post-retirement benefit costs in the Utility segment on a volumetric basis to reflect the fact that the Utility segment experiences higher throughput of natural gas in the winter months and lower throughput of natural gas in the summer months.
Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
3 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Sep. 30, 2013
Mar. 31, 2014
Reserve For Gas Replacement [Member]
Sep. 30, 2013
Reserve For Gas Replacement [Member]
Mar. 31, 2014
Stock Options [Member]
Mar. 31, 2014
Restricted Shares [Member]
Mar. 31, 2014
Stock Appreciation Right [Member]
Mar. 31, 2014
Non-performance Based Restricted Stock Units [Member]
Mar. 31, 2014
Performance Shares [Member]
Mar. 31, 2014
Exchange Traded Futures Contracts [Member]
Sep. 30, 2013
Exchange Traded Futures Contracts [Member]
Sep. 30, 2014
Subsequent Event [Member]
Reserve For Gas Replacement [Member]
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hedging collateral deposits
$ 0 1
 
$ 0 1
 
$ 1,094,000 1
 
 
 
 
 
 
 
$ 0 
$ 1,100,000 
 
Gas stored underground - current
(3,176,000)
 
(3,176,000)
 
(51,484,000)
73,883,000 
0 
 
 
 
 
 
 
 
0 
Capitalized costs of unproved properties excluded from amortization
 
 
184,500,000 
 
106,100,000 
 
 
 
 
 
 
 
 
 
 
Full cost ceiling test discount factor
10.00% 
 
10.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Amount full cost ceiling exceeds book value of oil and gas properties
$ 204,000,000 
 
$ 204,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Antidilutive securities
0 
208,819 
265 
362,681 
 
 
 
 
 
 
 
 
 
 
 
Share based compensation other than options grants in period
 
 
 
 
 
 
 
 
0 
0 
80,951 
116,090 
 
 
 
Granted in fiscal year, weighted average grant date fair value
 
 
 
 
 
 
 
 
 
 
$ 65.23 
$ 67.16 
 
 
 
Stock options granted
 
 
 
 
 
 
 
0 
 
 
 
 
 
 
 
Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2014
Accumulated Other Comprehensive Income [Roll Forward]
 
 
Balance at Beginning of Period
$ (22,038)
$ (19,234)
Other Comprehensive Gains and Losses Before Reclassification
(38,487)
(35,406)
Amounts Reclassified From Other Comprehensive Loss
15,470 
9,585 
Balance at End of Period
(45,055)
(45,055)
Gains And Losses On Derivative Financial Instruments [Member]
 
 
Accumulated Other Comprehensive Income [Roll Forward]
 
 
Balance at Beginning of Period
26,345 
30,722 
Other Comprehensive Gains and Losses Before Reclassification
(38,878)
(37,370)
Amounts Reclassified From Other Comprehensive Loss
15,470 
9,585 
Balance at End of Period
2,937 
2,937 
Gains And Losses On Securities Available For Sale [Member]
 
 
Accumulated Other Comprehensive Income [Roll Forward]
 
 
Balance at Beginning of Period
7,910 
6,337 
Other Comprehensive Gains and Losses Before Reclassification
391 
1,964 
Amounts Reclassified From Other Comprehensive Loss
0 
0 
Balance at End of Period
8,301 
8,301 
Funded Status Of The Pension And Other Post-Retirement Benefit Plans [Member]
 
 
Accumulated Other Comprehensive Income [Roll Forward]
 
 
Balance at Beginning of Period
(56,293)
(56,293)
Other Comprehensive Gains and Losses Before Reclassification
0 
0 
Amounts Reclassified From Other Comprehensive Loss
0 
0 
Balance at End of Period
$ (56,293)
$ (56,293)
Summary Of Significant Accounting Policies (Reclassification Out Of Accumulated Other Comprehensive Loss) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Operating Revenues
$ 756,242 
$ 597,826 
$ 1,306,314 
$ 1,050,680 
Purchased Gas
(322,772)
(209,817)
(490,378)
(331,735)
Income Before Income Taxes
161,306 
140,906 
298,983 
252,399 
Income Tax Expense
(66,095)
(55,186)
(121,520)
(98,735)
Net Income Available for Common Stock
95,211 
85,720 
177,463 
153,664 
Amount Of Gain Or (Loss) Reclassified From Accumulated Other Comprehensive Loss [Member] |
Gains And Losses On Derivative Financial Instruments [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Income Before Income Taxes
(26,640)
 
(16,457)
 
Income Tax Expense
11,170 
 
6,872 
 
Net Income Available for Common Stock
(15,470)
 
(9,585)
 
Amount Of Gain Or (Loss) Reclassified From Accumulated Other Comprehensive Loss [Member] |
Commodity Contracts [Member] |
Gains And Losses On Derivative Financial Instruments [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Operating Revenues
(22,611)
 
(12,825)
 
Purchased Gas
$ (4,029)
 
$ (3,632)
 
Summary Of Significant Accounting Policies (Components Of Other Current Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Sep. 30, 2013
Summary Of Significant Accounting Policies [Line Items]
 
 
Prepayments
$ 4,221 
$ 10,605 
Prepaid Property and Other Taxes
21,950 
13,079 
Fair Values of Firm Commitments
0 
1,829 
Regulatory Assets
28,732 
26,995 
Other Current Assets
54,903 
56,905 
Federal [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Income Taxes Receivable
0 
1,122 
State [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Income Taxes Receivable
$ 0 
$ 3,275 
Summary Of Significant Accounting Policies (Schedule Of Other Accruals And Current Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Sep. 30, 2013
Segment Reporting Information [Line Items]
 
 
Regulatory Liabilities
$ 11,085 
$ 20,013 
Reserve for Gas Replacement
(3,176)
(51,484)
Other
25,236 
22,833 
Other Accruals and Current Liabilities
235,900 
83,946 
Accrued Capital Expenditures [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Other
90,831 
41,100 
Reserve For Gas Replacement [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Reserve for Gas Replacement
73,883 
0 
Federal [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Income Taxes Payable
30,802 
0 
State [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Income Taxes Payable
$ 4,063 
$ 0 
Fair Value Measurements (Narrative) (Details) (USD $)
6 Months Ended
Mar. 31, 2014
Sep. 30, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
$ 0 1
$ 1,094,000 1
Assumed 12 month basis differential comparison to NYMEX
100.30% 
 
Assumed 12 month minimum basis differential comparison to NYMEX
96.20% 
 
Assumed 12 month maximum basis differential comparison to NYMEX
108.10% 
 
Fair value measured on recurring basis, net
175,854,000 1
139,452,000 1
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
0 
1,094,000 
Fair value measured on recurring basis, net
174,763,000 
92,024,000 
Fair Value, Inputs, Level 1 [Member] |
NYMEX Futures [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
 
1,100,000 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
0 
0 
Fair value measured on recurring basis, net
(1,371,000)
(5,190,000)
Fair Value, Inputs, Level 3 [Member] |
Over The Counter Swaps - Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value measured on recurring basis, net
1,400,000 
 
Higher [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Basis Differential On NYMEX Sensitivity
10.00% 
 
Higher [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of crude oil price swap sensitivity
5,800,000 
 
Lower [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Basis Differential On NYMEX Sensitivity
10.00% 
 
Lower [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Fair value of crude oil price swap sensitivity
$ 4,400,000 
 
Fair Value Measurements (Recurring Fair Value Measures Of Assets And Liabilities) (Details) (USD $)
Mar. 31, 2014
Sep. 30, 2013
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
$ 129,892,000 1
$ 51,332,000 1
Hedging Collateral Deposits
0 1
1,094,000 1
Total Assets
198,090,000 1
140,091,000 1
Total Liabilities
22,236,000 1
639,000 1
Total Net Assets/(Liabilities)
175,854,000 1
139,452,000 1
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Financial Instruments
2,450,000 1
911,000 1
Derivative Financial Instruments
0 1
0 1
Over The Counter Swaps - Gas And Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Financial Instruments
23,327,000 1
48,067,000 1
Derivative Financial Instruments
22,236,000 1
639,000 1
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
34,407,000 1
31,813,000 1
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
7,631,000 1
6,544,000 1
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
383,000 1
330,000 1
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
129,892,000 
51,332,000 
Hedging Collateral Deposits
0 
1,094,000 
Total Assets
175,610,000 
93,665,000 
Total Liabilities
847,000 
1,641,000 
Total Net Assets/(Liabilities)
174,763,000 
92,024,000 
Fair Value, Inputs, Level 1 [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Financial Instruments
3,297,000 
2,552,000 
Derivative Financial Instruments
847,000 
1,641,000 
Fair Value, Inputs, Level 1 [Member] |
Over The Counter Swaps - Gas And Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Financial Instruments
0 
0 
Derivative Financial Instruments
0 
0 
Fair Value, Inputs, Level 1 [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
34,407,000 
31,813,000 
Fair Value, Inputs, Level 1 [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
7,631,000 
6,544,000 
Fair Value, Inputs, Level 1 [Member] |
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
383,000 
330,000 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
0 
0 
Hedging Collateral Deposits
0 
0 
Total Assets
48,284,000 
57,070,000 
Total Liabilities
45,822,000 
4,452,000 
Total Net Assets/(Liabilities)
2,462,000 
52,618,000 
Fair Value, Inputs, Level 2 [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Financial Instruments
0 
0 
Derivative Financial Instruments
0 
0 
Fair Value, Inputs, Level 2 [Member] |
Over The Counter Swaps - Gas And Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Financial Instruments
48,284,000 
57,070,000 
Derivative Financial Instruments
45,822,000 
4,452,000 
Fair Value, Inputs, Level 2 [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
0 
0 
Fair Value, Inputs, Level 2 [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
0 
0 
Fair Value, Inputs, Level 2 [Member] |
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
0 
0 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
0 
0 
Hedging Collateral Deposits
0 
0 
Total Assets
273,000 
0 
Total Liabilities
1,644,000 
5,190,000 
Total Net Assets/(Liabilities)
(1,371,000)
(5,190,000)
Fair Value, Inputs, Level 3 [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Financial Instruments
0 
0 
Derivative Financial Instruments
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Over The Counter Swaps - Gas And Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Financial Instruments
273,000 
0 
Derivative Financial Instruments
1,644,000 
5,190,000 
Fair Value, Inputs, Level 3 [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
0 
0 
Fair Value, Inputs, Level 3 [Member] |
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
0 
0 
Netting Adjustments [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
0 1
0 1
Hedging Collateral Deposits
0 1
0 1
Total Assets
(26,077,000)1
(10,644,000)1
Total Liabilities
(26,077,000)1
(10,644,000)1
Total Net Assets/(Liabilities)
0 1
0 1
Netting Adjustments [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Financial Instruments
(847,000)1
(1,641,000)1
Derivative Financial Instruments
(847,000)1
(1,641,000)1
Netting Adjustments [Member] |
Over The Counter Swaps - Gas And Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Financial Instruments
(25,230,000)1
(9,003,000)1
Derivative Financial Instruments
(25,230,000)1
(9,003,000)1
Netting Adjustments [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
0 1
0 1
Netting Adjustments [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
0 1
0 1
Netting Adjustments [Member] |
Other Common Stock [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
$ 0 1
$ 0 1
Fair Value Measurements (Fair Value Measurements Using Unobservable Inputs (Level 3)) (Details) (Derivative Financial Instruments [Member], USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Derivative Financial Instruments [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Roll Forward]
 
 
 
 
Beginning Balance
$ (1,842)1
$ (14,089)1
$ (5,190)1
$ (19,664)1
Total Gains/Losses, Realized and Included in Earnings
763 1 2
4,539 1 3
1,043 1 4
6,801 1 5
Total Gains/Losses Unrealized and Included in Other Comprehensive Income (Loss)
(292)1
(7,056)1
2,776 1
(3,743)1
Transfer In/Out of Level 3
0 1
0 1
0 1
0 1
Ending Balance
$ (1,371)1 4
$ (16,606)1
$ (1,371)1 4
$ (16,606)1
Financial Instruments (Narrative) (Details) (USD $)
6 Months Ended 3 Months Ended 6 Months Ended
Mar. 31, 2014
counterparty
Sep. 30, 2013
Mar. 31, 2014
Exploration And Production [Member]
Mar. 31, 2014
Exploration And Production [Member]
Over Counter Swaps Oil [Member]
Mar. 31, 2014
Energy Marketing [Member]
Mar. 31, 2014
Over-The-Counter Swap Position
Mar. 31, 2014
Fixed Price Purchase Commitments MMCf [Member]
Energy Marketing [Member]
MMcf
Mar. 31, 2014
Fair Value Hedges MMCf [Member]
Energy Marketing [Member]
MMcf
Mar. 31, 2014
Fixed Price Sales Commitments MMCf [Member]
Energy Marketing [Member]
MMcf
Mar. 31, 2014
Natural Gas MMCf [Member]
Exploration And Production [Member]
Cash Flow Hedges Short Position [Member]
MMcf
Mar. 31, 2014
Natural Gas MMCf [Member]
Energy Marketing [Member]
MMcf
Mar. 31, 2014
Natural Gas MMCf [Member]
Energy Marketing [Member]
Cash Flow Hedges Short Position [Member]
MMcf
Mar. 31, 2014
Natural Gas MMCf [Member]
Energy Marketing [Member]
Cash Flow Hedges Long Position [Member]
MMcf
Mar. 31, 2014
Crude Oil Bbls [Member]
Exploration And Production [Member]
Cash Flow Hedges Short Position [Member]
bbl
Mar. 31, 2014
Exchange Traded Futures Contracts [Member]
Sep. 30, 2013
Exchange Traded Futures Contracts [Member]
Mar. 31, 2014
Equity Mutual Fund [Member]
Sep. 30, 2013
Equity Mutual Fund [Member]
Mar. 31, 2014
Insurance Company Stock [Member]
Sep. 30, 2013
Insurance Company Stock [Member]
Mar. 31, 2014
Credit Risk Related Contingency Feature [Member]
Over-The-Counter Swap Position
counterparty
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash surrender value of life insurance
$ 43,400,000 
$ 57,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
34,400,000 
31,800,000 
7,600,000 
6,500,000 
 
Gross unrealized gain
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,700,000 
5,700,000 
5,200,000 
4,100,000 
 
Nonmonetary notional amount of price risk cash flow hedge derivatives, natural gas
 
 
 
 
 
 
 
 
 
239,000 
6,900 
3,500 
3,400 
 
 
 
 
 
 
 
 
Nonmonetary notional amount of price risk cash flow hedge derivatives, crude oil
 
 
 
 
 
 
 
 
 
 
 
 
 
4,269,000 
 
 
 
 
 
 
 
Net hedging gains/losses in accumulated other comprehensive income (loss)
 
 
4,800,000 
 
200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
After tax net hedging gains (losses) in accumulated other comprehensive income (loss)
 
 
2,800,000 
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-Tax Net Hedging Gain (Losses) Reclassified Within Twelve Months
 
 
(31,500,000)
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
After Tax Net Hedging Gains (Losses) Reclassified Within Twelve Months, less than $0.1 million for Energy Marketing Segment
 
 
(18,700,000)
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-Tax Net Hedging Gain (Losses) Reclassified After Twelve Months
 
 
36,300,000 
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
After Tax Net Hedging Gains (Losses) Reclassified After Twelve Months
 
 
21,500,000 
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonmonetary notional amount of price risk fair value hedge derivatives, natural gas
 
 
 
 
 
 
500 
7,500 
7,000 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative gain (loss)
 
 
 
(1,800,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of counterparties in which the company holds over-the-counter swap positions
15 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of counterparties in net gain position
4 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit risk exposure per counterparty
 
 
 
 
 
5,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum credit risk exposure per counterparty
 
 
 
 
 
9,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hedging collateral deposits
0 1
1,094,000 1
 
 
 
0 
 
 
 
 
 
 
 
 
0 
1,100,000 
 
 
 
 
 
Number of counterparties with a common credit-risk related contingency
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12 
Fair market value of derivative asset with a credit-risk related contingency
22,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair market value of derivative liability with a credit-risk related contingency
$ 19,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Instruments (Long-Term Debt) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Sep. 30, 2013
Financial Instruments, Owned, at Fair Value [Abstract]
 
 
Carrying Amount
$ 1,649,000 
$ 1,649,000 
Fair Value
$ 1,787,823 
$ 1,767,519 
Financial Instruments (Schedule Of Derivative Financial Instruments Designated And Qualifying As Cash Flow Hedges On The Statement Of Financial Performance) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
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)
$ (67,461)
$ (47,350)
$ (64,682)
$ (12,001)
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)
(26,640)
10,503 
(16,457)
22,088 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(660)
(456)
774 
(456)
Exploration And Production [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion)
(64,237)
(47,364)
(59,117)
(13,750)
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)
(22,611)
11,285 
(12,825)
23,590 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(660)
(456)
774 
(456)
Energy Marketing [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion)
(3,224)
14 
(5,565)
1,749 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
0 
0 
0 
0 
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)
(4,029)
(782)
(3,632)
(830)
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)
0 1
0 1
0 1
0 1
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
0 1
0 1
0 1
0 1
Pipeline And Storage [Member] |
Operating Revenues [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
$ 0 1
$ 0 1
$ 0 1
$ (672)1
Financial Instruments (Schedule Of Derivatives And Hedged Items In Fair Value Hedging Relationships) (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Mar. 31, 2014
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Gain or (Loss) on the Derivative Recognized in the Consolidated Statement of Income
$ 3,301 
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
(3,301)
Operating Revenues [Member] |
Fixed Price Sales Commitments Of Natural Gas [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Gain or (Loss) on the Derivative Recognized in the Consolidated Statement of Income
3,779 
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
(3,779)
Purchased Gas [Member] |
Fixed Price Purchase Commitments Of Natural Gas [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Gain or (Loss) on the Derivative Recognized in the Consolidated Statement of Income
(440)
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
440 
Purchased Gas [Member] |
Natural Gas Held in Storage [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Gain or (Loss) on the Derivative Recognized in the Consolidated Statement of Income
(38)
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
$ 38 
Income Taxes (Narrative) (Details) (USD $)
6 Months Ended 12 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Sep. 30, 2013
Income Taxes [Line Items]
 
 
 
Tax benefit recorded from exercise of stock options
$ 3,100,000 
 
$ 700,000 
Tax Benefit Not Realized Due to Tax Loss Carryforward
36,400,000 
 
36,400,000 
Taxes refundable to customers
90,779,000 
 
85,655,000 
Recoverable future taxes
161,258,000 
 
163,355,000 
Amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate
2,000,000 
 
 
Change in unrecognized tax benefits
2,000,000 
 
 
Tax benefit from change in enacted rate
(21,829,000)
(19,769,000)
 
Deferred Income Taxes [Member]
 
 
 
Income Taxes [Line Items]
 
 
 
Taxes refundable to customers
90,800,000 
 
85,700,000 
Recoverable future taxes
161,300,000 
 
163,400,000 
State Tax Law Change [Member]
 
 
 
Income Taxes [Line Items]
 
 
 
Tax benefit from change in enacted rate
$ 2,800,000 
 
 
New York State |
State and Local Jurisdiction [Member]
 
 
 
Income Taxes [Line Items]
 
 
 
Corporate Tax Rate
7.10% 
 
 
Effective January 1, 2016 [Member] |
New York State |
State and Local Jurisdiction [Member]
 
 
 
Income Taxes [Line Items]
 
 
 
Corporate Tax Rate
6.50% 
 
 
Income Taxes (Components Of Federal And State Income Taxes Included In The Consolidated Statements Of Income) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Current Income Taxes [Abstract]
 
 
 
 
Federal
 
 
$ 39,974 
$ (6,318)
State
 
 
9,607 
2,496 
Deferred Income Taxes [Abstract]
 
 
 
 
Federal
 
 
50,110 
82,788 
State
 
 
21,829 
19,769 
Income Tax Expense
66,095 
55,186 
121,520 
98,735 
Deferred Investment Tax Credit
 
 
(218)
(213)
Total Income Taxes
 
 
121,302 
98,522 
Presented as Follows [Abstract]
 
 
 
 
Other Income
 
 
(218)
(213)
Income Tax Expense
$ 66,095 
$ 55,186 
$ 121,520 
$ 98,735 
Income Taxes (Schedule Of Income Tax Reconciliation By Applying Federal Income Tax Rate) (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Income Tax Disclosure [Abstract]
 
 
U.S. Income Before Income Taxes
$ 298,765 
$ 252,186 
Income Tax Expense, Computed at U.S. Federal Statutory Rate of 35%
104,568 
88,265 
Increase (Reduction) in Taxes Resulting from State Income Taxes
20,433 
14,473 
Increase (Reduction) in Taxes Resulting From Miscellaneous
(3,699)
(4,216)
Total Income Taxes
$ 121,302 
$ 98,522 
Federal Statutory Rate
35.00% 
35.00% 
Income Taxes (Significant Components Of Deferred Tax Liabilities And Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2014
Sep. 30, 2013
Deferred Tax Liabilities [Abstract]
 
 
Property, Plant and Equipment
$ 1,551,701 
$ 1,504,187 
Pension and Other Post-Retirement Benefit Costs
121,780 
124,021 
Other
55,562 
75,419 
Total Deferred Tax Liabilities
1,729,043 
1,703,627 
Deferred Tax Assets [Abstract]
 
 
Pension and Other Post-Retirement Benefit Costs
(132,752)
(130,256)
Tax Loss Carryforwards
(184,123)
(215,262)
Other
(99,087)
(90,461)
Total Deferred Tax Assets
(415,962)
(435,979)
Total Net Deferred Income Taxes
1,313,081 
1,267,648 
Net Deferred Tax Liability/(Asset) - Current
(39,650)
(79,359)
Net Deferred Tax Liability - Non Current
$ 1,352,731 
$ 1,347,007 
Capitalization (Details)
6 Months Ended
Mar. 31, 2014
Debt Instrument [Line Items]
 
Common stock shares issued due to stock option exercises
301,793 
Issue shares of common stock for the Direct Stock Purchase and Dividend Reinvestment Plan
47,943 
Issue shares of common stock for the 401(k) plans
32,053 
Shares tendered
79,606 
Restricted Stock Units [Member]
 
Debt Instrument [Line Items]
 
Common stock issued
8,732 
Board Of Directors [Member]
 
Debt Instrument [Line Items]
 
Common stock issued
7,712 
Commitments And Contingencies (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Mar. 31, 2014
Site Contingency [Line Items]
 
Estimated minimum liability for environmental remediation
$ 14.1 
Rate recovery period
13 years 
Former Manufactured Gas Plant Site [Member]
 
Site Contingency [Line Items]
 
Estimated minimum liability for environmental remediation
$ 13.0 
Business Segment Information (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
segment
Mar. 31, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Number of reportable segments
 
 
5 
 
Segment Profit: Net Income (Loss)
$ 95,211 
$ 85,720 
$ 177,463 
$ 153,664 
Energy Marketing [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Segment Profit: Net Income (Loss)
3,765 
4,283 
5,369 
4,778 
Energy Marketing [Member] |
Unbilled Revenues [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue from External Customers
8,200 
 
33,700 
 
Energy Marketing [Member] |
Margin [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Segment Profit: Net Income (Loss)
$ (400)
 
$ 900 
 
Business Segment Information (Financial Segment Information By Segment) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Sep. 30, 2013
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
$ 95,211 
$ 85,720 
$ 177,463 
$ 153,664 
 
Segment Assets
6,567,195 
 
6,567,195 
 
6,218,347 
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
756,242 
597,826 
1,306,314 
1,050,680 
 
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
0 
0 
0 
0 
 
Utility [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
35,545 
34,516 
59,760 
57,394 
 
Segment Assets
2,019,438 
 
2,019,438 
 
1,870,587 
Utility [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
377,647 
303,389 
608,100 
511,953 
 
Utility [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
8,204 
6,396 
12,911 
10,707 
 
Pipeline And Storage [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
21,372 
16,796 
40,510 
33,728 
 
Segment Assets
1,283,654 
 
1,283,654 
 
1,246,027 
Pipeline And Storage [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
53,571 
46,383 
104,784 
89,842 
 
Pipeline And Storage [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
22,235 
23,712 
42,974 
46,509 
 
Exploration And Production [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
24,390 
27,711 
55,487 
54,391 
 
Segment Assets
2,821,355 
 
2,821,355 
 
2,746,233 
Exploration And Production [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
199,561 
168,080 
392,607 
323,529 
 
Exploration And Production [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
0 
0 
0 
0 
 
Energy Marketing [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
3,765 
4,283 
5,369 
4,778 
 
Segment Assets
110,285 
 
110,285 
 
67,267 
Energy Marketing [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
124,439 
78,989 
197,598 
123,154 
 
Energy Marketing [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
5 
208 
260 
634 
 
Gathering [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
7,324 
3,093 
13,471 
5,035 
 
Segment Assets
247,286 
 
247,286 
 
203,323 
Gathering [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
195 
324 
429 
526 
 
Gathering [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
15,452 
7,898 
29,802 
13,377 
 
Total Reportable Segments [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
92,396 
86,399 
174,597 
155,326 
 
Segment Assets
6,482,018 
 
6,482,018 
 
6,133,437 
Total Reportable Segments [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
755,413 
597,165 
1,303,518 
1,049,004 
 
Total Reportable Segments [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
45,896 
38,214 
85,947 
71,227 
 
All Other [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
278 
(29)
954 
(85)
 
Segment Assets
95,849 
 
95,849 
 
95,793 
All Other [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
597 
437 
2,298 
1,252 
 
All Other [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
0 
0 
0 
0 
 
Corporate And Intersegment Eliminations [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
2,537 
(650)
1,912 
(1,577)
 
Segment Assets
(10,672)
 
(10,672)
 
(10,883)
Corporate And Intersegment Eliminations [Member] |
Revenue From External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
232 
224 
498 
424 
 
Corporate And Intersegment Eliminations [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
$ (45,896)
$ (38,214)
$ (85,947)
$ (71,227)
 
Retirement Plan And Other Post-Retirement Benefits (Narrative) (Details) (USD $)
6 Months Ended
Mar. 31, 2014
Retirement Plan [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Company's contributions
$ 30,000,000 
VEBA Trusts And 401(h) Accounts [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Company's contributions
2,000,000 
Minimum [Member] |
Retirement Plan [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Estimated future contributions in remainder of fiscal year
0 
Minimum [Member] |
VEBA Trusts And 401(h) Accounts [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Estimated future contributions in remainder of fiscal year
0 
Maximum [Member] |
Retirement Plan [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Estimated future contributions in remainder of fiscal year
5,000,000 
Maximum [Member] |
VEBA Trusts And 401(h) Accounts [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Estimated future contributions in remainder of fiscal year
$ 10,000,000 
Retirement Plan And Other Post-Retirement Benefits (Components Of Net Periodic Benefit Cost) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service Cost
$ 2,997 
$ 3,961 
$ 5,993 
$ 7,923 
Interest Cost
10,893 
9,124 
21,787 
18,249 
Expected Return on Plan Assets
(14,993)
(14,336)
(29,986)
(28,673)
Amortization of Prior Service Cost (Credit)
52 
60 
105 
119 
Amortization of Transition Amount
0 
0 
0 
0 
Amortization of Losses
9,002 
13,194 
18,003 
26,388 
Net Amortization and Deferral For Regulatory Purposes (Including Volumetric Adjustments)
8,557 1
1,724 1
10,135 1
(1,958)1
Net Periodic Benefit Cost
16,508 
13,727 
26,037 
22,048 
Other Post-Retirement Benefit Plans, Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service Cost
735 
1,176 
1,469 
2,352 
Interest Cost
5,327 
4,803 
10,654 
9,606 
Expected Return on Plan Assets
(9,356)
(8,218)
(18,712)
(16,436)
Amortization of Prior Service Cost (Credit)
(534)
(534)
(1,069)
(1,069)
Amortization of Transition Amount
0 
2 
0 
4 
Amortization of Losses
661 
5,223 
1,323 
10,446 
Net Amortization and Deferral For Regulatory Purposes (Including Volumetric Adjustments)
7,928 1
6,459 1
13,988 1
9,162 1
Net Periodic Benefit Cost
$ 4,761 
$ 8,911 
$ 7,653 
$ 14,065 
Regulatory Matters (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Mar. 31, 2014
Sep. 30, 2013
Mar. 27, 2013
Regulatory Matters [Line Items]
 
 
 
Proposed rate of return on equity
 
 
9.96% 
Rate proceeding refund provision pre tax
$ 7.5 
$ 7.5 
 
Allowed rate of return on equity
9.10% 
 
 
Authorized Increase in Distribution Corporation's pipeline relacement spending
$ 8.2 
 
 
Maximum [Member]
 
 
 
Regulatory Matters [Line Items]
 
 
 
Allowed rate of return on equity range
10.50% 
 
 
Minimum [Member]
 
 
 
Regulatory Matters [Line Items]
 
 
 
Allowed rate of return on equity range
9.50% 
 
 
9.5 Percent To 10.5 Percent Rate Of Return On Equity [Member] |
Shareholder Allocation [Member]
 
 
 
Regulatory Matters [Line Items]
 
 
 
Earnings sharing mechanism allocation of earnings
50.00% 
 
 
9.5 Percent To 10.5 Percent Rate Of Return On Equity [Member] |
Deferred For The Benefit Of Customers [Member]
 
 
 
Regulatory Matters [Line Items]
 
 
 
Earnings sharing mechanism allocation of earnings
50.00% 
 
 
Above 10.5 Percent Rate Of Return On Equity [Member] |
Shareholder Allocation [Member]
 
 
 
Regulatory Matters [Line Items]
 
 
 
Earnings sharing mechanism allocation of earnings
20.00% 
 
 
Above 10.5 Percent Rate Of Return On Equity [Member] |
Deferred For The Benefit Of Customers [Member]
 
 
 
Regulatory Matters [Line Items]
 
 
 
Earnings sharing mechanism allocation of earnings
80.00%