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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2002 Commission file number 1-8359
NEW JERSEY RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-2376465
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
1415 WYCKOFF ROAD, WALL, NEW JERSEY - 07719 732-938-1480
(Address of principal executive offices) (Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
COMMON STOCK - $2.50 PAR VALUE NEW YORK STOCK EXCHANGE
(Title of each class) (Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES: X NO:
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
YES: X NO:
The aggregate market value of the Registrant's Common Stock held by
non-affiliates was $885,208,962 based on the closing price of $33.00 per share
on December 11, 2002.
The number of shares outstanding of $2.50 par value Common Stock as of December
11, 2002 was 26,991,489.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 2002 Annual Report to Shareowners are incorporated
by reference into Part I and Part II of this report.
Portions of the Registrant's definitive Proxy Statement for the Annual Meeting
of Shareowners to be held February 23, 2003, to be filed on or about January 17,
2003, are incorporated by reference into Part I and Part III of this report.
TABLE OF CONTENTS
Page
----
PART I
ITEM 1 - Business 1
Business Segments 2
Natural Gas Distribution 2
General 2
Throughput 3
Seasonality of Gas Revenues 3
Gas Supply 4
Regulation and Rates 5
Franchises 8
Competition 8
Credit Ratings 9
Energy Services 9
Retail and Other 9
Environment 10
Employee Relations 11
ITEM 2 - Properties 11
ITEM 3 - Legal Proceedings 12
ITEM 4 - Submission of Matters to a Vote of Security Holders 13
Information Concerning Forward Looking Statements 13
PART II
ITEM 5 - Market for the Registrant's Common Stock and Related
Stockholder Matters 15
ITEM 6 - Selected Financial Data 15
ITEM 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 15
ITEM 7A- Quantitative and Qualitative Disclosures about Market Risk 15
ITEM 8 - Financial Statements and Supplementary Data 15
ITEM 9 - Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 15
PART III
ITEM 10- Directors and Executive Officers of the Registrant 16
ITEM 11- Executive Compensation 17
ITEM 12- Security Ownership of Certain Beneficial Owners and
Management 17
ITEM 13- Certain Relationships and Related Transactions 17
PART IV
ITEM 14- Controls and Procedures 17
ITEM 15 - Exhibits, Financial Statement Schedules and Reports
on Form 8-K 18
Index to Financial Statement Schedules 19
Signatures 21
Certifications 22
Independent Auditors' Consent and Report on Schedule 24
Exhibit Index 25
PART I
ITEM 1. BUSINESS
ORGANIZATIONAL STRUCTURE
New Jersey Resources Corporation, (the Company or NJR,) is a New Jersey
corporation formed in 1982 pursuant to a corporate reorganization. The Company
is an energy services holding company providing retail and wholesale energy
services to customers in New Jersey and in states from the Gulf Coast to New
England, and Canada. The Company is an exempt holding company under Section
3(a)(1) of the Public Utility Holding Company Act of 1935. Its subsidiaries and
businesses include:
1) New Jersey Natural Gas Company (NJNG), a local natural gas
distribution company that provides regulated energy service to over
430,000 residential and commercial customers in central and northern
New Jersey and participates in the off-system sales and capacity
release markets.
2) NJR Energy Services Company (Energy Services), formed in 1996 to
provide unregulated fuel and capacity management and wholesale
marketing services.
3) Retail and Other operations which include the following companies:
a.) NJR Retail Holdings Corporation (Retail Holdings), a sub-holding
company of NJR formed in November 2001 as an unregulated
affiliate to consolidate the Company's unregulated retail
operations. Retail Holdings includes the following wholly-owned
subsidiary:
NJR Home Services Company (Home Services), a company formed
in August 1998 to provide appliance service repair and
contract services. In fiscal 2001, NJNG transferred its
appliance service business to Home Services. NJR Plumbing
Services Company, a wholly-owned subsidiary of Home
Services, was formed in 2001 to provide plumbing services.
b.) NJR Capital Services Corporation (Capital), a sub-holding company
of NJR formed as an unregulated affiliate to consolidate the
Company's unregulated energy-related and real estate investments.
Capital includes the following wholly-owned subsidiaries:
Commercial Realty & Resources Corp. (CR&R), a company formed
in May 1966, which currently develops commercial real
estate;
NJR Investment Company, a company formed in October 2000 to
make certain energy-related equity investments; and,
NJR Energy Holdings Corporation, includes NJR Energy
Corporation (NJR Energy), which invests primarily in
energy-related ventures through its operating subsidiary,
NJNR Pipeline Company (Pipeline).
c.) NJR Service Corporation (Service Corp.), an unregulated company
formed as a wholly-owned subsidiary of NJR in August 2000, to
provide shared administrative services, including Corporate
Communications, Financial and Administrative, Internal Audit,
Legal, Human Resources and Technology for NJR and all
subsidiaries of NJR.
BUSINESS SEGMENTS
See Note 13 to the Consolidated Financial Statements - Business Segment
Data in the Company's 2002 Annual Report, for business segment financial
information.
NATURAL GAS DISTRIBUTION
General
NJNG provides natural gas service to over 430,000 customers. Its service
territory encompasses 1,436 square miles, covering 104 municipalities with an
estimated population of 1.3 million.
NJNG's service territory is primarily suburban, with a wide range of
cultural and recreational activities, highlighted by approximately 100 miles of
New Jersey seacoast. It is in proximity to New York, Philadelphia and the
metropolitan areas of northern New Jersey and is accessible through a network of
major roadways and mass transportation. NJNG added 11,282 and 12,522 new
customers and converted the heating systems of another 979 and 1,302 existing
customers in 2002 and 2001, respectively. This annual growth rate of
approximately 3 percent is expected to continue with projected additions of
approximately 24,500 new customers over the next two years. This customer growth
represents an annual increase of approximately 2.2 billion cubic feet (Bcf) in
sales to firm customers and $6.6 million in new margin, assuming normal weather.
See Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) - Liquidity and Capital Resources - Natural Gas Distribution
in the Company's 2002 Annual Report for a discussion of NJNG's projected capital
expenditure program associated with this growth in 2003 and 2004. Also see
Information Concerning Forward-Looking Statements.
In assessing the potential for future growth in its service area, NJNG uses
information derived from county and municipal planning boards that describes
housing developments in various stages of approval. In addition, builders in
NJNG's service area are surveyed to determine their development plans for future
time periods. NJNG has also periodically engaged outside consultants to assist
in its customer growth projections. In addition to customer growth through new
construction, NJNG's business strategy includes aggressively pursuing
conversions from other fuels, such as electricity and oil. It is estimated that
approximately 40 percent of NJNG's projected customer growth will consist of
conversions. NJNG will also continue to pursue off-system sales and non-peak
sales, such as natural gas-fueled electric generating projects.
2
Throughput
For the fiscal year ended September 30, 2002, operating revenues and
throughput by customer class were as follows:
Operating Revenues Throughput
(Thousands) (Bcf)
----------- -----
Residential $359,022 46% 35.8 23%
Commercial and other 84,449 11 8.2 5
Firm transportation 24,455 3 7.0 4
-------- -------- -------- --------
Total residential and commercial 467,926 60 51.0 32
Interruptible 12,608 2 11.1 7
-------- -------- -------- --------
Total system 480,534 62 62.1 39
Off-system 294,007 38 96.5 61
-------- -------- -------- --------
Total $774,541 100% 158.6 100%
======== ======== ======== ========
See MD&A - Natural Gas Distribution Operations in the Company's 2002 Annual
Report for a discussion of gas and transportation sales. Also see NJNG Operating
Statistics in the Company's 2002 Annual Report for information on operating
revenues and throughput for the past six years.
One customer represented more than 10 percent of total NJNG operating
revenue. This revenue is associated with NJNG's margin-sharing programs and
therefore management believes that the loss of this customer would not have a
material adverse effect on its financial position, results of operations or cash
flows.
Seasonality of Gas Revenues
As a result of the heat-sensitive nature of NJNG's residential customer
base, therm sales are significantly affected by weather conditions.
Specifically, customer demand substantially increases during the winter months
when natural gas is used for heating purposes. See MD&A - Liquidity and Capital
Resources - Natural Gas Distribution in the Company's 2002 Annual Report for a
discussion of the impact of seasonality on cash flow.
The impact of weather on the level and timing of NJNG's revenues and cash
flows has been affected by a weather-normalization clause (WNC), which provides
for a revenue adjustment if the weather varies by more than one-half of 1
percent from normal, or 20-year-average, weather. The WNC does not fully protect
the Company from factors such as unusually warm weather and declines in customer
usage patterns, which were set in January 1994. The accumulated adjustment from
one heating season (i.e., October-May) is billed or credited to customers in
subsequent periods. See MD&A - Natural Gas Distribution Operations in the
Company's 2002 Annual Report and Item 1. Business - Regulation and Rates - State
for additional information with regard to the WNC.
3
Gas Supply
1) Firm Natural Gas Supplies
NJNG currently purchases a diverse gas supply portfolio consisting of
long-term (over seven months), winter-term (for the five winter months) and
short-term contracts. In 2002, NJNG purchased gas from 61 suppliers under
contracts ranging from one month to 10 years. NJNG has five long-term firm gas
purchase contracts and purchased approximately 10 percent of its gas in 2002
under one long-term firm gas purchase contract with Alberta Northeast Gas
Limited, which expires in 2006. NJNG does not purchase more than 10 percent of
its total gas supplies under any other single long-term firm gas purchase
contract. NJNG believes that its supply strategy should adequately meet its
expected firm load over the next several years.
2) Firm Transportation and Storage Capacity
In order to deliver the above gas supplies, NJNG maintains agreements for
firm transportation and storage capacity with several interstate pipeline
companies. The pipeline companies that provide firm transportation service to
NJNG's city gate stations in New Jersey, the maximum daily deliverability of
that capacity in decatherms (Dths) and the contract expiration dates are as
follows:
Maximum Daily
Pipeline Deliverability (Dths) Expiration Date
- -------- --------------------- ---------------
Texas Eastern Transmission, L.P. 342,949 Various dates between 2004 and 2012
Iroquois Gas Transmission System, L.P. 40,468 2011
Tennessee Gas Pipeline Co. 35,894 2004
Transcontinental Gas Pipe Line Corp. 22,531 Various dates between 2003 and 2014
Columbia Gas Transmission Corp. 10,000 2009
------
451,842
=======
The pipeline companies that provide firm transportation service to NJNG and
feed the above pipelines are: Texas Gas Transmission Corporation, Dominion
Transmission Corporation and Columbia Gulf Transmission Corporation.
In addition, NJNG has storage and related transportation contracts that
provide additional maximum daily deliverability of 231,000 Dths from storage
fields in its Northeast market area. The significant storage suppliers, the
maximum daily deliverability of that storage capacity and the contract
expiration dates are as follows:
Maximum Daily
Pipeline Deliverability (Dths) Expiration Date
- -------- --------------------- ---------------
Texas Eastern Transmission, L.P. 94,557 Various dates between 2004 and 2006
Transcontinental Gas Pipe Line Corp. 8,384 2005
---------
102,941
=======
NJNG also has storage contracts with Dominion Transmission Corporation
(maximum daily deliverability of 103,661 Dths) with primary expiration dates
between 2005 and 2012, along with the Stagecoach natural gas storage facility
(maximum daily deliverability of 35,000 Dths) which expires in 2004. See Note 12
to the Consolidated Financial Statements - Commitments and Contingent
Liabilities in the Company's 2002 Annual Report. Both Dominion Transmission
Corporation and Stagecoach storage utilize NJNG's transportation contracts to
transport that gas from the storage fields to its city gate.
4
NJNG, at its discretion, has the right to extend these transportation and
storage capacity contracts over various renewal periods.
3) Peaking Supply
To meet its increased winter peak day demand, NJNG, in addition to
utilizing the previously mentioned firm storage services, maintains two
liquefied natural gas (LNG) facilities. See Item 2 - Properties - NJNG for
additional information regarding the LNG storage facilities. NJNG presently has
LNG storage deliverability of 140,000 Dths per day, which represents
approximately 21 percent of its peak day sendout.
4) Basic Gas Supply Service
Wholesale natural gas prices remain volatile. NJNG has mitigated the impact
of these volatile price changes on customers through the use of hedging
instruments, which are part of its financial risk management program, and its
Basic Gas Supply Service (BGSS), formerly known as the Levelized Gas Adjustment
clause. See Item 1 - Regulation and Rates - State, for a discussion of NJNG's
BGSS, which provides for the recovery of these commodity costs.
5) Future Supplies
NJNG expects to meet the current level of its gas requirements for existing
and projected firm customers into the foreseeable future. Nonetheless, NJNG's
ability to provide supply for its present and projected sales will depend upon
its suppliers' ability to obtain and deliver additional supplies of natural gas,
as well as NJNG's ability to acquire supplies directly from new sources. Factors
beyond the control of NJNG, its suppliers and the independent suppliers who have
obligations to provide gas to certain NJNG customers, may affect NJNG's ability
to deliver such supplies. These factors include other parties' control over the
drilling of new wells and the facilities to transport gas to NJNG's city gate,
competition for the acquisition of gas, priority allocations, the regulatory and
pricing policies of federal and state regulatory agencies, as well as the
availability of Canadian reserves for export to the United States. Energy
deregulation legislation, See Item 1 - Competition, may increase competition
among natural gas utilities and impact the quantities of natural gas
requirements needed for sales service. If NJNG's gas requirements decrease, NJNG
expects to resell any unneeded capacity or commodity that it is required to
purchase under existing agreements with its suppliers through its off-system
sales and capacity release programs.
Regulation and Rates
1) State
NJNG is subject to the jurisdiction of the New Jersey Board of Public
Utilities (BPU) with respect to a wide range of matters, such as rates, the
issuance of securities, the adequacy of service, the manner of keeping its
accounts and records, the sufficiency of gas supply, pipeline safety and the
sale or encumbrance of its properties.
Over the last five years, NJNG has been granted one increase in its
non-fuel delivery tariff rates, and various increases and decreases in its BGSS.
The one non-BGSS increase related to the recognition of
5
costs for postretirement benefits other than pensions (OPEB). NJNG also recovers
certain costs through adjustment clauses which are generally reviewed annually.
The adjustment clauses include:
a.) Gas Cost Recovery (GCR) factor, which reflects changes in
purchased gas costs;
b.) Comprehensive Resource Analysis (CRA) factor, for recovery of
conservation and clean energy related costs;
c.) Remediation Adjustment (RA) factor, which recovers the costs of
remediating former manufactured gas plant sites;
d.) Consumer Education Program (CEP) factor, for recovery of costs
related to supporting education initiatives for components of the
Electric Discount and Energy Competition Act (EDECA);
e.) Transportation Initiation Clause (TIC) factor, to recover costs
related to the implementation of technology changes required to
support energy choice;
f.) WNC factor, which credits or surcharges margins accrued from the
past heating season weather; and
g.) Gas Cost Underrecovery Adjustment (GCUA) factor, to recover
approximately $29.9 million of underrecovered gas costs and
interest incurred during 2001.
Adjustment clause recoveries do not include an element of profit, however,
certain riders do allow recovery of carrying costs under various interest rates
and methodologies.
The following table sets forth information with respect to these rate
changes:
($ in 000's) Annualized Annualized
Amount Amount
Date of Filing Type Per Filing Granted Effective Date
- -------------- ---- ---------- ------- --------------
October 2002 BGSS $11,600 -- Pending
January 2002 BGSS (15,700) $(15,700) February 2002
November 2001 Eliminate PGCA* (5,000) (5,000) January 2002
November 2001 Adjustment clauses (61,300) (61,300) December 2001
June 2001 BGSS - FPM** 8,900 8,900 July 2001
May 2001 BGSS - FPM** 8,900 8,900 June 2001
April 2001 BGSS - FPM** 8,900 8,900 May 2001
March 2001 BGSS - FPM** 8,900 8,900 April 2001
February 2001 BGSS - FPM** 8,900 8,900 March 2001
January 2001 BGSS - FPM** 8,900 8,900 February 2001
November 2000 BGSS - FPM** 8,900 8,900 December 2000
July 2000 Amended LGA 61,900 61,900 November 2000
September 1999 BGSS (1,900) (1,100) October 2002
September 1998 BGSS 0 (11,300) July 1999
July 1997 BGSS 0 11,600 October 1998
July 1997 Base Rates-OPEB 1,300 900 October 1998
July 1997 BGSS 0 11,100 January 1998
* Prior Gas Cost Adjustment surcharge (PGCA).
** Flexible Pricing Mechanism (FPM).
6
In March 2002, the BPU ordered the initiation of the Universal Service Fund
(USF) as provided for in EDECA. The BPU implemented an interim USF program for
the 2001-2002 winter heating season through which NJNG provided $1.5 million of
credits to customers. The BPU is seeking to establish a permanent program for
the 2002-2003 winter heating season with a final decision expected in 2003.
See Note 8 to the Consolidated Financial Statements - Regulatory Issues in
the Company's 2002 Annual Report for additional information regarding NJNG's
rate proceedings.
7
B) Federal
The Federal Energy Regulatory Commission (FERC) regulates rates charged by
interstate pipeline companies for the transportation and storage of natural gas,
which affects NJNG's agreements for the purchase of such services with several
interstate pipeline companies. Any costs associated with these services are
recoverable through the BGSS.
Franchises
NJNG holds non-exclusive franchises, expiring between 2004 and 2038,
granted by the municipalities it serves that give it the right to lay, maintain
and operate public utility property in order to provide natural gas service
within these municipalities. NJNG has 47 franchises which are perpetual. The
process has begun to renew one franchise that expired in 2002. Management
believes it will receive this renewal in 2003.
Competition
Although its franchises are non-exclusive, NJNG is not currently subject to
competition from other natural gas distribution utilities with regard to the
transportation of natural gas in its service territory. Due to significant
distances between NJNG's current large industrial customers and the nearest
interstate natural gas pipelines, as well as the availability of its
transportation tariff, NJNG currently does not believe it has significant
exposure to the risk that its distribution system will be bypassed. Competition
does exist from suppliers of oil, coal, electricity and propane. At the present
time, natural gas enjoys an advantage over alternate fuels as the preferred
choice of fuels in over 95 percent of new construction due to its efficiency and
reliability. As deregulation of the natural gas industry continues, prices will
be determined by market supply and demand, and, while NJNG believes natural gas
will remain competitive with alternate fuels, no assurance can be given in this
regard.
In February 1999, EDECA, which provides the framework for the restructuring
of New Jersey's energy market, became law. In March 2001, the BPU issued a
written order that approved a stipulation agreement among various parties to
fully open NJNG's residential markets to competition, restructure its rates to
segregate its BGSS and delivery (i.e., transportation) prices as required by
EDECA, and expand an incentive for residential and small commercial customers to
switch to transportation service. At September 30, 2002, NJNG had 13,621
residential and 4,190 commercial and industrial customers utilizing the
transportation service. Based on its current and projected level of
transportation customers, the Company expects to use its existing firm
transportation and storage capacity and thus fully meet its contract
obligations.
In December 2000, the BPU issued a written order resolving a customer
account service proceeding and approving the transfer of NJNG's existing
appliance service business to Home Services, an unregulated subsidiary of the
Company. The order also continues NJNG's current third-party billing policies
and delays until May 2003, absent any significant breakthrough in metering
technology, any further decision on meter reading and other potentially
competitive services.
In June 2001, the BPU initiated a proceeding regarding the provision of
BGSS. In July 2001, NJNG submitted a BGSS proposal that provides for additional
customer choices and includes a request to develop new incentive mechanisms. In
January 2002, the BPU issued a written order, which stated that BGSS could be
provided by suppliers other than the state's natural gas utilities, but at this
time it should be provided by the state's natural gas utilities. The parties are
currently discussing NJNG's July
8
2001 proposal, and no assurance can be made as to the timing or terms of any
resolution to such proposal.
Credit Ratings
The table below summarizes NJNG's credit rating issued by two rating
entities, Standard and Poor's Rating Information Service, a division of
McGraw-Hill (Standard & Poor's or S&P), and Moody's Investor Service, Inc.
(Moody's).
Standard
& Poor's Moody's
-------- -------
Corporate Rating A N/A
Commercial Paper A-1 P-1
Senior Secured A+ A2
Ratings Outlook Positive Stable
NJNG is not party to any lending agreements that would accelerate the
maturity date of any obligation due to a failure to maintain any specific credit
ratings.
See MD&A - Natural Gas Distribution Operations in the Company's 2002 Annual
Report for a discussion of NJNG's financial results.
ENERGY SERVICES
Energy Services provides unregulated wholesale energy services, including
natural gas supply, pipeline capacity and storage management to customers in New
Jersey and in states from the Gulf Coast to New England.
Energy Services natural gas marketing activities include contracting to buy
natural gas from suppliers at various points of receipt, aggregating natural gas
supplies and arranging for their transportation, negotiating the sale of natural
gas and matching natural gas receipts and deliveries based on volumes required
by clients. During 2002 Energy Services contracted with customers, which
included energy marketers, utilities, natural gas producers and pipeline and
storage operators among others.
Energy Services has entered into a marketing and management agreement for
the Stagecoach storage project. Stagecoach is a high-injection/high-withdrawal
facility in New York State with 12 billion cubic feet (Bcf) of working gas
capacity and interstate pipeline connections to the Northeast markets.
Stagecoach received Federal Energy Regulatory Commission (FERC) certification
for full operations on June 27, 2002. See Note 12 to the Consolidated Financial
Statements - Commitments and Contingent Liabilities in the Company's 2002
Annual Report for a discussion of the Stagecoach storage project.
In 2002, Energy Services had two customers, each of which represented more
than 10 percent of their total revenue. This revenue is derived from
market-based transactions and therefore management believes that the loss of
either or both of these customers would not have a material adverse effect on
its financial position, results of operations or cash flows as an adequate
number of alternative counterparties exist.
See MD&A - Energy Services Operations in the Company's 2002 Annual Report
for a discussion of financial results.
RETAIL AND OTHER
Retail and Other operations consist primarily of the following unregulated
affiliates: Home Services, which provides service, sales and installation of
appliances; CR&R, which develops commercial real estate; NJR Energy, an investor
in energy-related ventures through its operating subsidiary, Pipeline, which
consists primarily of its equity investment in Iroquois Gas Transmission System,
L.P. (Iroquois); NJR Investment Company, which makes certain energy-related
equity investments; and Service Corp., which provides shared administrative
services to the Company and all of its subsidiaries.
9
As of September 30, 2002, CR&R's real estate portfolio consisted of one
fully-occupied building totaling approximately 4,000 square feet and 172 acres
of undeveloped land.
NJR Energy and its subsidiaries were involved in oil and natural gas
development, production, transportation, storage and other energy-related
ventures. In 1996, the Company exited the oil and natural gas production
business and sold the reserves and related assets of NJR Energy and New Jersey
Natural Resources Company. NJR Energy's continuing operations consist primarily
of Pipeline's 3.3 percent equity investment in Iroquois, which is a 375-mile
natural gas pipeline from the Canadian border to Long Island, and an equity
investment of less than 1 percent ownership interest in Capstone Turbine
Corporation (Capstone), a developer of microturbines.
See Item 2 - Properties - Retail and Other for additional information
regarding CR&R's remaining real estate assets.
See MD&A - Retail and Other Operations in the Company's 2002 Annual Report
for a discussion of financial results.
ENVIRONMENT
The Company and its subsidiaries are subject to legislation and regulation
by federal, state and local authorities with respect to environmental matters.
The Company believes that it is in compliance in all material respects with all
applicable environmental laws and regulations.
See Note 12 to the Consolidated Financial Statements - Commitments and
Contingent Liabilities in the Company's 2002 Annual Report for information with
respect to environmental matters involving material expenditures for the
remediation of MGP sites.
See Item 3 - Legal Proceedings - a. Gas Remediation for additional
information regarding environmental activities.
CR&R is the owner of certain undeveloped acreage in Monmouth and Atlantic
Counties, New Jersey, with a net book value of $17.4 million. This acreage is
regulated by the provisions of the Freshwater Wetlands Protection Act (Wetlands
Act), which restricts building in areas defined as "freshwater wetlands" and
their transition areas. Based upon a third-party environmental engineer's
delineation of the wetland and transition areas in accordance with the
provisions of the Wetlands Act, CR&R will file for a Letter of Interpretation
from the New Jersey Department of Environmental Protection (NJDEP) as parcels of
land are selected for development. Based upon the environmental engineer's
revised estimated developable yield for undeveloped acreage, the Company does
not believe that a reserve against this land was necessary as of September 30,
2002, as the estimated future cash flows from the development of each site
exceeds the current investment in each site.
Although the Company cannot estimate with certainty future costs of
environmental compliance, which, among other factors, are subject to changes in
technology and governmental regulations, the Company does not presently
anticipate any additional significant future expenditures, for compliance with
existing environmental laws and regulations, other than the remediation of the
MGP sites discussed in Note 12 to the Consolidated Financial Statements, that
would have a material effect upon the capital expenditures, earnings or
competitive position of the Company or its subsidiaries.
10
EMPLOYEE RELATIONS
The Company and its subsidiaries employed 779 and 775 employees at
September 30, 2002 and 2001, respectively. NJNG had 384 and 387 union employees
at September 30, 2002 and 2001, respectively. Home Services had 81 and 79 union
employees at September 30, 2002 and 2001, respectively. On October 1, 2001, Home
Services reached agreement with the union on a two-and-one-half-year collective
bargaining agreement, which provides, among other things, for an annual increase
in base wages of 5.14 percent with an additional 1 percent in incentive
compensation, if performance measures are met. In fiscal 2002, the annual
increase in wages was 4.25 percent with an additional 2 percent in incentive
compensation, if performance measures are met. Effective October 1, 2002 through
April 2, 2003, the six-month increase in wages will be 1.63 percent with an
additional 2 percent in incentive compensation, if performance measures are met.
On December 6, 2000, NJNG reached an agreement with the union on a three-year
collective bargaining agreement which provides, among other things, for annual
base wage increases of 3.5 percent, 3.5 percent and 3.25 percent, effective
December 4, 2000, 2001 and 2002, respectively. NJNG's represented employees are
also eligible for an additional incentive of 1.5 percent, 1.75 percent and 2
percent of base in fiscal 2001, 2002 and 2003, respectively, if certain
performance measure are met.
ITEM 2. PROPERTIES
NJNG (All properties are in New Jersey)
NJNG owns approximately 6,000 miles of distribution main and 6,000 miles of
services, 215 miles of transmission main and approximately 443,000 meters. Mains
are primarily located under public roads. Where mains are located under private
property, NJNG has obtained easements from the owners of record.
Additionally, NJNG owns and operates two LNG storage plants located in
Stafford Township, Ocean County and Howell Township, Monmouth County. The two
LNG plants have an estimated maximum capacity of 19,200 and 150,000 Dths per
day, respectively. These facilities are used for peaking supply and emergencies.
NJNG owns four service centers located in Rockaway Township, Morris County;
Atlantic Highlands and Wall Township, Monmouth County; and Lakewood, Ocean
County. These service centers house storerooms, garages, gas distribution and
administrative offices. NJNG leases its headquarters and customer service
facilities in Wall Township, customer service offices located in Asbury Park,
Monmouth County and a service center in Manahawkin, Ocean County. These customer
service offices support customer contact, marketing, economic development and
other functions.
Substantially all of NJNG's properties, not expressly excepted or duly
released, are subject to the lien of an Indenture of Mortgage and Deed of Trust
to Harris Trust and Savings Bank, Chicago, Illinois, dated April 1, 1952, as
amended by 29 supplemental indentures (Indenture), as security for NJNG's bonded
debt, which totaled approximately $218 million at September 30, 2002. In
addition, under the terms of its Indenture, NJNG could have issued approximately
$250 million of additional first mortgage bonds as of September 30, 2002.
11
See Note 5 to the Consolidated Financial Statements - Long-Term Debt,
Dividends and Retained Earnings Restrictions in the Company's 2002 Annual Report
for additional information regarding NJNG's bonded debt.
Retail and Other (All properties are in New Jersey)
At September 30, 2002, CR&R owned 172 acres of undeveloped land and one
fully-occupied building totaling approximately 4,000 square feet. In June 2002,
CR&R sold a 20,000-square-foot building for $4.3 million, which generated a
pre-tax gain of approximately $885,000.
See Item 1. - Environment for a discussion of regulatory matters concerning
undeveloped acreage owned by CR&R.
Home Services leases a service center in Dover Township, Morris County and
in fiscal 2002 leased another service center in Tinton Falls, Monmouth County.
NJR Energy has less than 1 percent ownership interest in Capstone Turbine
Corporation, a developer of energy efficient, gas-fired microturbines that
produce electricity. Pipeline has a 3.3 percent equity interest in Iroquois.
Capital Expenditure Program
See MD&A - Liquidity and Capital Resources in the Company's 2002 Annual
Report for a discussion of the Company's anticipated 2003 and 2004 capital
expenditures for each business segment.
ITEM 3. LEGAL PROCEEDINGS
NJNG has identified 11 former Manufactured Gas Plant (MGP) sites, dating
back to the late 1800s and early 1900s, which contain contaminated residues from
the former gas manufacturing operations. Ten of the 11 sites in question were
acquired by NJNG in 1952. All of the gas manufacturing operations ceased at
these sites at least by the mid-1950s and in some cases had been discontinued
many years earlier, and all of the former gas manufacturing facilities were
subsequently dismantled by NJNG or the previous owners. NJNG is currently
involved in administrative proceedings with the New Jersey Department of
Environmental Protection (NJDEP) with respect to the plant sites in question,
and is participating in various studies and investigations by outside
consultants to determine the nature and extent of any such contaminated residues
and to develop appropriate programs of remedial action, where warranted. Since
October 1989, NJNG has entered into Administrative Consent Orders or Memoranda
of Agreement with the NJDEP covering all 11 sites. These documents establish the
procedures to be followed by NJNG in developing a final remedial clean-up plan
for each site.
Until September 2000, most of the cost of such studies and investigations
had been shared under an agreement with the former owner and operator of 10 of
the MGP sites. In September 2000, a revised agreement was executed pursuant to
which NJNG is responsible for two of the sites, while the former owner is
responsible for the remaining eight sites. Also in September 2000, NJNG
purchased a 20-year cost-containment insurance policy for its two sites. NJNG
continues to participate in the investigation and remedial action for one MGP
site that was not subject to the original cost-sharing agreement. Through a
Remediation Rider approved by the BPU, NJNG is recovering its expenditures
incurred through June 30, 1998, over a seven-year period. Costs incurred
subsequent to June 30, 1998,
12
including carrying costs on the deferred expenditures (see Note 3 to the
Consolidated Financial Statements - Capitalized and Deferred Interest), will
generally be reviewed annually and recovered over rolling seven-year periods,
subject to BPU approval. In September 1999, NJNG filed for recovery of
expenditures incurred through June 30, 1999, and in January 2001, NJNG filed for
recovery of expenditures incurred through June 30, 2000. The BPU is currently
reviewing these filings. See Note 11 to the Consolidated Financial Statements -
Commitments and Contingent Liabilities in the Company's 2002 Annual Report for
additional information regarding estimated costs of remediation.
In March 1995, NJNG instituted an action for declaratory relief against 24
separate insurance companies in the Superior Court of New Jersey. These
insurance carriers provided comprehensive general liability coverage to NJNG
from 1951 through 1985. The complaint was amended in July 1996 to name Kaiser -
Nelson Steel and Salvage Company (Kaiser - Nelson) and its successors as
additional defendants. In September 2001, NJNG reached a favorable settlement
with the insurance carrier that provided the majority of NJNG's coverage. This
settlement involves a significant cash payment to NJNG that will be tendered in
four installments. NJNG has now dismissed or reached a settlement with all of
its insurance carriers. NJNG continues to pursue its claim against Kaiser -
Nelson. Kaiser - Nelson was responsible for demolishing the structures at
several of the MGP sites and removing the contents of the vessels. NJNG is
seeking monetary damages or compensatory relief for the harm caused by Kaiser -
Nelson's actions. Trial date has been set for April 7, 2003. There can be no
assurances as to the outcome of this proceeding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in this report, including, without limitation,
statements as management expectations and belief presented in Part I under the
captions "New Jersey Natural Gas Company - General; - Gas Supply; - Regulation
and Rates; - Competition," "Environment" and "Legal Proceedings," are forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements can also be identified by the use
of forward-looking terminology such as "may," "intend," "expect," or "continue"
or comparable terminology and are made based upon management's expectations and
beliefs concerning future developments and their potential effect upon the
Company. There can be no assurance that future developments will be in
accordance with management's expectations or that the effect of future
developments on the Company will be those anticipated by management.
The Company cautions readers that the assumptions that form the basis for
forward-looking statements regarding customer growth, financial results, capital
requirements and other matters for fiscal 2003 and thereafter include many
factors that are beyond the Company's ability to control or estimate precisely,
such as estimates of future market conditions, the behavior of other market
participants and changes in the debt and equity capital markets. Among the
factors that could cause actual results to differ materially from estimates
reflected in such forward-looking statements are weather and economic
conditions,
13
demographic changes in NJNG's service territory, fluctuations in energy
commodity prices, the impact of the Company's risk management efforts, energy
conversion activity and other marketing efforts, the conservation efforts of
NJNG's customers, the pace of deregulation of retail gas markets, access to
adequate supplies of natural gas, the regulatory and pricing policies of federal
and state regulatory agencies, changes due to legislation at the federal and
state level, the continued recoverability of environmental remediation
expenditures, changes in and levels of interest rates and other regulatory
changes.
While the Company periodically reassesses material trends and uncertainties
affecting the Company's results of operations and financial condition in
connection with its preparation of management's discussion and analysis of
results of operations and financial condition contained in its Quarterly and
Annual Reports, the Company does not, by including this statement, assume any
obligation to review or revise any particular forward-looking statement
referenced herein in light of future events.
14
PART II
Information for Items 5 through 9 of this report appears below or in the
Company's 2002 Annual Report as indicated on the following table and the 2002
Annual Report information is incorporated herein by reference, as follows:
Annual Report
Page
----
ITEM 5. Market for the Registrant's Common
Equity and Related Shareowner Matters
Market Information - Exchange Inside back cover
- Stock Prices & Dividends 31
Dividend Restrictions 47
Holders of Common Stock - 16,696 Shareowner accounts
ITEM 6. Selected Financial Data 30
ITEM 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations 32-38
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk 37-38
ITEM 8. Financial Statements and Supplementary Data 32-54
ITEM 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure None
15
PART III
Information for Items 10 through 13 of this report is incorporated herein
by reference to the Company's definitive proxy statement for the Annual Meeting
of Shareowners to be held on February 26, 2003, which will be filed with the
Securities and Exchange Commission (SEC) pursuant to Regulation 14A on or about
January 17, 2003.
ITEM 10. Directors and Executive Officers of the Registrant
Following is certain information required by this item regarding the
Registrant's executive officers. Other information required by this Item is
incorporated by reference from the Registrant's proxy statement for its 2003
Annual Meeting, expected to be filed with the SEC on or about January 17, 2003.
EXECUTIVE OFFICERS OF THE REGISTRANT
First Elected
Office(1) Name Age an Officer
--------- ---- --- ----------
Chairman, President and
Chief Executive Officer Laurence M. Downes 45 1/86
Senior Vice President, General
Counsel and Corporate Secretary Oleta J. Harden 53 6/84
Senior Vice President and
Chief Financial Officer Glenn C. Lockwood 41 1/90
(1) All terms of office are one year.
There is no arrangement or understanding between the officers listed above
and any other person pursuant to which they were selected as an officer. The
following is a brief account of their business experience during the past five
years:
Laurence M. Downes
Chairman, President and Chief Executive Officer
Mr. Downes has held the position of Chairman since September 1996. He has
held the position of President and Chief Executive Officer since July 1995. From
January 1990 to July 1995, he held the position of Senior Vice President and
Chief Financial Officer. In December 1997, Mr. Downes (along with three other
current or former officers of the Company) entered into a settlement with the
SEC in which he consented without admitting or denying the SEC's findings, to an
administrative order finding that he was a cause of the Company not fully
complying with Section 13(a) of the Securities Exchange Act of 1934 in
connection with the Company's reporting of certain 1992 Company subsidiary
transactions. No fines or monetary penalties were imposed on him, nor was his
ability to act as an officer or director of a public company otherwise limited.
16
Oleta J. Harden
Senior Vice President, General Counsel and Corporate Secretary
Mrs. Harden has held her present position since January 1987, except for
the position of General Counsel which she has held since April 1996.
Glenn C. Lockwood
Senior Vice President and Chief Financial Officer
Mr. Lockwood has held the position of Chief Financial Officer since
September 1995 and the added position of Senior Vice President since January
1996. From January 1994 to September 1995, he held the position of Vice
President, Controller and Chief Accounting Officer. From January 1990 to January
1994, he held the position of Assistant Vice President, Controller and Chief
Accounting Officer. In December 1997, Mr. Lockwood (along with three other
current or former officers of the Company) entered into a settlement with the
SEC in which he consented without admitting or denying the SEC's findings, to an
administrative order finding that he was a cause of the Company not fully
complying with Section 13(a) of the Securities Exchange Act of 1934 in
connection with the Company's reporting of certain 1992 Company subsidiary
transactions. No fines or monetary penalties were imposed on him, nor was his
ability to act as an officer or director of a public company otherwise limited.
ITEM 11. Executive Compensation
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
ITEM 13. Certain Relationships and Related Transactions
PART IV
ITEM 14. Controls and Procedures
Within the 90-day period prior to the date of this report, an evaluation
was carried out, under the supervision and with the participation of
our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act
of 1934. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures were
effective, in all material respects, with respect to the recording, processing,
summarizing and reporting, within the time periods specified in the SEC's rules
and forms, of information required to be disclosed by us in the reports that we
file or submit under the Exchange Act.
There have been no significant changes in our internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of the evaluation described above.
17
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) The following Financial Statements of the Registrant and Independent
Auditors' Report, included in the Company's 2002 Annual Report, are incorporated
by reference in Item 8 above:
Consolidated Balance Sheets as of September 30, 2002 and 2001
Consolidated Statements of Income for the Years Ended September 30, 2002,
2001 and 2000
Consolidated Statements of Cash Flows for the Years Ended September 30,
2002, 2001 and 2000
Consolidated Statements of Capitalization as of September 30, 2002 and 2001
Consolidated Statements of Common Stock Equity for the Years Ended
September 30, 2002, 2001 and 2000
Notes to Consolidated Financial Statements
Independent Auditors' Report
(2) Financial Statement Schedules - See Index to Financial Statement
Schedules on page 19.
(3) Exhibits - See Exhibit Index on page 25.
(b) Reports on Form 8-K
On August 12, 2002 a report on Form 8-K was filed by the Company regarding
Statements Under Oath of the Chief Executive Officer and Chief Financial Officer
of New Jersey Resources Corporation Regarding Facts and Circumstances Related to
Exchange Act Filings.
18
NEW JERSEY RESOURCES CORPORATION
INDEX TO FINANCIAL STATEMENT SCHEDULES
Page
----
Schedule II - Valuation and qualifying accounts and
reserves for each of the three years in the period
ended September 30, 2002 20
Schedules other than those listed above are omitted because they are not
required or are not applicable, or the required information is shown in the
financial statements or notes thereto.
19
Schedule II
NEW JERSEY RESOURCES CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED SEPTEMBER 30, 2002, 2001 and 2000
BALANCE AT ADDITIONS BALANCE
BEGINNING CHARGED TO AT END OF
CLASSIFICATION OF YEAR EXPENSE OTHER YEAR
- -------------- ------- ------- ----- ----
($000)
2002:
Allowance for
Doubtful Accounts $ 3,026 $ 4,031 $ (2,662)(1) $ 4,395
======= ======= ======== =======
2001:
Allowance for
Doubtful Accounts $ 2,555 $ 3,088 $ (2,617)(1) $ 3,026
======= ======= ======== =======
2000:
Allowance for
Doubtful Accounts $ 1,684 $ 2,614 $ (1,743)(1) $ 2,555
======= ======= ======== =======
Notes: (1) Uncollectible accounts written off, less recoveries.
20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
NEW JERSEY RESOURCES CORPORATION
--------------------------------
(Registrant)
Date: December 20, 2002 By: /s/Glenn C. Lockwood
-----------------------------
Glenn C. Lockwood
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated:
Dec. 20, 2002 /s/ Laurence M. Downes Dec. 20, 2002 /s/ James T. Hackett
------------------------------ ------------------------------
Laurence M. Downes James T. Hackett
Chairman, President and Director
Chief Executive Officer
Dec. 20, 2002 /s/ Glenn C. Lockwood Dec. 20, 2002 /s/ Dorothy K. Light
------------------------------ ------------------------------
Glenn C. Lockwood Dorothy K. Light
Senior Vice President and Director
Chief Financial Officer
(Principal Accounting Officer)
Dec. 20, 2002 /s/ Nina Aversano Dec. 20, 2002 /s/ William H. Turner
------------------------------ ------------------------------
Nina Aversano William H. Turner
Director Director
Dec. 20, 2002 /s/ Lawrence R. Codey Dec. 20, 2002 /s/ Gary W. Wolf
------------------------------ ------------------------------
Lawrence R. Codey Gary W. Wolf
Director Director
Dec. 20, 2002 /s/ Leonard S. Coleman Dec. 20, 2002 /s/ George R. Zoffinger
------------------------------ ------------------------------
Leonard S. Coleman George R. Zoffinger
Director Director
Dec. 20, 2002 /s/ Joe B. Foster
------------------------------
Joe B. Foster
Director
Dec. 20, 2002 /s/ Hazel S. Gluck
------------------------------
Hazel S. Gluck
Director
21
CERTIFICATIONS
I, Laurence M. Downes, certify that:
1) I have reviewed this Annual Report on Form 10-K of New Jersey Resources
Corporation;
2) Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Annual Report;
3) Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Registrant as of, and for, the periods presented in this Annual Report;
4) The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
a.) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this Annual Report
is being prepared;
b.) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this Annual Report (the "Evaluation Date"); and
c.) presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5) The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent functions):
a.) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses in
internal controls; and
b.) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls; and
6) The Registrant's other certifying officers and I have indicated in this
Annual Report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 20, 2002 By: /s/ Laurence M. Downes
----------------- ------------------------------------
Laurence M. Downes
Chairman & Chief Executive Officer
22
CERTIFICATIONS
I, Glenn C. Lockwood, certify that:
1) I have reviewed this Annual Report on Form 10-K of New Jersey Resources
Corporation;
2) Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Annual Report;
3) Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the Registrant as of, and for, the periods presented in this Annual Report;
4) The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:
a.) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this Annual Report
is being prepared;
b.) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this Annual Report (the "Evaluation Date"); and
c.) presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5) The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent functions):
a.) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses in
internal controls; and
b.) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls; and
6) The Registrant's other certifying officers and I have indicated in this
Annual Report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 20, 2002 By: /s/ Glenn C. Lockwood
----------------- ------------------------------------
Glenn C. Lockwood
Senior Vice President,
Chief Financial Officer
23
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of New Jersey Resources Corporation:
We have audited the consolidated financial statements of New Jersey Resources
Corporation (the "Corporation") as of September 30, 2002 and 2001, and for each
of the three years in the period ended September 30, 2002, and have issued our
report thereon dated October 29, 2002; such consolidated financial statements
and report are included in your 2002 Annual Report and are incorporated herein
by reference. Our audits also included the consolidated financial statement
schedule of New Jersey Resources Corporation, listed in Item 15. This
consolidated financial statement schedule is the responsibility of the
Corporation's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such consolidated financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects the information set forth
therein.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
October 29, 2002
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements Nos.
33-52409 and 333-59013 of New Jersey Resources Corporation on Form S-8 and
Registration Statement No. 33-57711 of New Jersey Resources Corporation on Form
S-3 of our reports dated October 29, 2002 appearing in and incorporated by
reference in this Annual Report on Form 10-K of New Jersey Resources Corporation
for the year ended September 30, 2002.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
December 20, 2002
24
EXHIBIT INDEX
Previous Filing
---------------
Reg. S-K
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
--- --------- -------------------- ------ -------
3-1 3 Restated Certificate of Incorporation Note (8) 3-1
of the Company, as amended
3-2 By-laws of the Company, as presently 333-59013 5-1
in effect
4-1 4 Specimen Common Stock Certificates 33-21872 4-1
4-2 Indenture of Mortgage and Deed of Trust 2-9569 4(g)
with Harris Trust and Savings Bank, as
Trustee, dated April 1, 1952
4-2A Twenty-First Supplemental Indenture, Note (5) 4-2U
dated as of August 1, 1993
4-2B Twenty-Second Supplemental Indenture, Note (5) 4-2V
dated as of October 1, 1993
4-2C Twenty-Third Supplemental Indenture, Note (6) 4-2W
dated as of August 15, 1994
4-2D Twenty-Fourth Supplemental Indenture, Note (6) 4-2X
dated as of October 1, 1994
4-2E Twenty-Fifth Supplemental Indenture, Note (7) 4-2Y
dated as of July 15, 1995
4-2F Twenty-Sixth Supplemental Indenture, Note (7) 4-2Z
dated as of October 1, 1995
4-2G Twenty-Seventh Supplemental Indenture, Note (9) 4-2J
dated as of September 1, 1997
4-2H Twenty-Eighth Supplemental Indenture, Note (10) 4-2K
dated as of January 1, 1998
4-2I Twenty-Ninth Supplemental Indenture, Note (10) 4-2L
dated as of April 1, 1998
25
EXHIBIT INDEX
Previous Filing
---------------
Reg. S-K
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
--- --------- -------------------- ------ -------
4-5 Amended and Restated Note and Credit The 4-5
Agreement between New Jersey Resources Company's
Corporation and First Union National Quarterly
Bank, successor to First Fidelity Report on
Bank, dated May 7, 1993 Form 10-Q
for the
quarter
ended June
30, 1993
4-5A Dated as of August 29, 1995 Note (8) 4-5A
4-5B Dated as of April 2, 1996 Note (8) 4-5B
4-5C Dated as of September 10, 1996 Note (8) 4-5C
4-5D Dated as of September 26, 1997 Note (9) 4-5D
4-5E Dated as of August 10, 1999 Note (11) 4-5E
4-5F Dated as of September 29, 2000 Note (12) 4-5F
4-7 Syndicated credit agreement dated The 4-7
January 5, 2001, among NJR, PNC Bank Company's
and other parties named therein Quarterly
Report on
Form 10-Q
for the
quarter
ended March
31, 2001
4-7A First amendment to the NJR syndicated Note (13) 4-7A
credit agreement, dated October 3,
2001 among NJR, PNC Bank and other
parties named therein
26
EXHIBIT INDEX
Previous Filing
---------------
Reg. S-K
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
--- --------- -------------------- ------ -------
4-8 Syndicated credit agreement dated The 4-8
January 5, 2001, among NJNG, PNC Bank Company's
and other parties named therein Quarterly
Report on
Form 10-Q
for the
quarter
ended March
31, 2001
4-8A First amendment to the NJNG syndicated The 4-8A
credit agreement, dated March 1, 2001, Company's
among NJNG, PNC Bank and other parties Quarterly
named therein Report on
Form 10-Q
for the
quarter
ended March
31, 2001
4-8B Second amendment to the NJNG Note (13) 4-8B
syndicated credit agreement, dated
October 3, 2001, among NJNG, PNC Bank
and other parties named therein
4-9 Amended and Restated Syndicated The 4-1
credit agreement, The Company's dated Company's
January 4, 2002 among NJNG, PNC Bank Quarterly
and other parties named therein Report on
Form 10-Q
for the
quarter
ended June
30, 2002
4-10 Shareholder Rights Plan The
Company's
Form 8-K
filed on
August 2,
1996
27
EXHIBIT INDEX
Previous Filing
---------------
Reg. S-K
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
--- --------- -------------------- ------ -------
4-11 Demand Loan Agreement dated May 27, The 4-2
2002, between New Jersey Resources Company's
Corporation and Citizens Bank of Quarterly
Massachusetts Report on
Form 10-Q
for the
quarter
ended June
30, 2002
4-12 Demand Loan Agreement dated August 1, The 4-3
2002, between New Jersey Resources Company's
Corporation and Wachovia Securities Quarterly
Report on
Form 10-Q
for the
quarter
ended June
30, 2002
10-2 10 Retirement Plan for Represented 2-73181 10(f)
Employees, as amended October 1, 1984
10-3 Retirement Plan for Non-Represented 2-73181 10(g)
Employees, as amended October 1, 1985
10-4 Supplemental Retirement Plans covering Note (1) 10-9
all Executive Officers as described in
the Registrant's definitive proxy
statement incorporated herein by
reference
10-5 Agreements between NJNG and Texas Note (8) 10-5
Eastern Transmission Company
10-5A Dated June 21, 1995 Note (8) 10-5A
10-5B Dated June 21, 1995 Note (8) 10-5B
10-5C Dated November 15, 1995 Note (8) 10-5C
10-6 Officer Incentive Plan effective as of Note (8) 10-6
October 1, 1986
28
EXHIBIT INDEX
Previous Filing
Reg. S-K
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
--- --------- -------------------- ------ -------
10-7 Lease Agreement between NJNG as Lessee Note (8) 10-7
and State Street Bank and Trust
Company of Connecticut, National
Association as Lessor for NJNG's
Headquarters Building dated December
21, 1995
10-10 Long-Term Incentive Compensation Plan Company's
as amended proxy
statement on
Schedule 14A
for the 1996
Annual
Meeting
10-12 Employment Continuation Agreement of Note (8) 10-12
Laurence M. Downes dated June 5, 1996
10-12A Amendment dated as of December 1, 1997 Note (9) 10-12A
10-12B Revised Schedule of Officer Employee Note (9) 10-12B
Continuation Agreements
10-13 Agreements between NJNG and Alberta Note (4) 10-13
Northeast Gas Limited, dated February
7, 1991
10-14 Agreement between NJNG and Iroquois Note (4) 10-14
Gas Transmission System, L.P., dated
February 7, 1991
10-15 Agreements between NJNG and CNG Note (8) 10-15
Transmission Corporation
10-15A Dated December 1, 1993 Note (8) 10-15A
10-15B Dated December 1, 1993, as amended Note (8) 10-15B
December 21, 1995
29
EXHIBIT INDEX
Previous Filing
Reg. S-K
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
--- --------- -------------------- ------ -------
10-16 Amended and Restated Natural Gas The 10-1
Storage Marketing and Management Company's
Agreement between NJR Energy Services Quarterly
Company and eCORP Marketing, LLC, Report on
dated as of January 9, 2002 (the Form 10-Q
"Marketing and Management Agreement") for the
(Sections marked with "***" are quarter
redacted pursuant to a request for ended March
confidential treatment filed with the 31, 2002
Securities and Exchange Commission)
10-17 Base Gas Lease Agreement between NJR The 10-2
Energy Services Company and Central Company's
New York Oil and Gas Company, LLC, Quarterly
dated as of January 9, 2002 Report on
Form 10-Q
for the
quarter
ended March
31, 2002
10-18 Transportation Capacity Release The 10-3
Agreement between NJR Energy Company's
Services Company and eCORP Marketing, Quarterly
LLC, dated January 9, 2002 (Sections Report on
marked with "***" are redacted Form 10-Q
pursuant to a request for for the
confidential treatment filed with quarter
the Securities and Exchange Commission) ended March
31, 2002
10-19 Letter Agreement between NJR Energy The 10-4
Services Company and eCORP Marketing, Company's
LLC, dated January 9, 2002 with Quarterly
respect to the Marketing and Report on
Management Agreement Form 10-Q
for the
quarter
ended March
31, 2002
30
EXHIBIT INDEX
Previous Filing
Reg. S-K
Exhibit Item 601 Registration
No. Reference Document Description Number Exhibit
--- --------- -------------------- ------ -------
13-1 13 2002 Annual Report to Shareowners.
Such Exhibit includes only those
portions thereof which are expressly
incorporated by reference in this Form
10-K (filed herewith)
21-1 21 Subsidiaries of the Registrant (filed
herewith)
23-1 23 Independent Auditors' Consent and
Report on Schedule (filed herewith)
See page 24
99-1 Certification of the Chief Executive
Officer pursuant to section 906 of the
Sarbanes-Oxley Act*
99-2 Certification of the Chief Financial
Officer pursuant to section 906 of the
Sarbanes-Oxley Act*
* This certificate accompanies this Report pursuant to section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for
purposes of Section 18 or any other provision of the Securities Exchange Act
of 1934, as amended.
Note (1) 1986 Form 10-K File No. 1-8359
Note (2) 1989 Form 10-K File No. 1-8359
Note (3) 1991 Form 10-K File No. 1-8359
Note (4) 1992 Form 10-K File No. 1-8359
Note (5) 1993 Form 10-K File No. 1-8359
Note (6) 1994 Form 10-K File No. 1-8359
Note (7) 1995 Form 10-K File No. 1-8359
Note (8) 1996 Form 10-K File No. 1-8359
Note (9) 1997 Form 10-K File No. 1-8359
Note (10) 1998 Form 10-K File No. 1-8359
Note (11) 1999 Form 10-K File No. 1-8359
Note (12) 2000 Form 10-K File No. 1-8359
Note (13) 2001 Form 10-K File No. 1-8359
31