Annual Report (Form 10-K), fiscal year 1994

ITEM 1. BUSINESS
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 holding company and its subsidiaries are engaged in natural gas distribution, natural gas-fueled cogeneration and independent power production, oil and natural gas development, production and transportation and commercial real estate development as follows:
New Jersey Natural Gas Company (NJNG), a public utility that distributes natural gas to more than 340,000 residential, commercial and industrial customers throughout virtually all of Monmouth and Ocean counties, and parts of Morris and Middlesex counties in New Jersey;
Paradigm Resources Corporation, a sub-holding company formed in 1992 to better segregate its non-regulated subsidiaries, which include:
Paradigm Power, Inc. (PPI), which will develop and invest in natural gas-fueled cogeneration and independent power production projects and its subsidiaries, Lighthouse One, Inc. and Lighthouse II, Inc.;
NJR Energy Corporation (NJR Energy), a participant in oil and natural gas development, production, transportation, storage and other energy related ventures in various locations in the United States through its subsidiaries, New Jersey Natural Resources Company (NJNR), NJNR Pipeline Company (Pipeline), NJR Storage Corporation (Storage), which was formed in December 1994, Natural Resources Compressor Company (Compressor) and NJRE Operating Company (NJRE Operating); and
Commercial Realty & Resources Corp. (CR&R), which develops and owns commercial office and mixed-use commercial/industrial real estate projects located in New Jersey.
The Company is an exempt holding company under Section 3(a)(1) of the Public Utility Holding Company Act of 1935 (PUHCA).
BUSINESS SEGMENTS
See Note 10 to the Consolidated Financial Statements - Business Segment Data in the Company's 1994 Annual Report, filed as Exhibit 13-1 hereto, for business segment financial information.
NEW JERSEY NATURAL GAS COMPANY
General
NJNG provides natural gas to more than 340,000 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. NJNG's service territory 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. These factors have contributed to NJNG adding 11,222, 9,306 and 7,907 new customers in 1994, 1993 and 1992, respectively. This growth rate of more than 3% is expected to continue with projected additions of 60,700 new customers over the next five years. See Liquidity and Capital Resources-NJNG in the Company's 1994 Annual Report, filed as Exhibit 13-1 hereto, for a discussion of NJNG's projected capital expenditure program associated with this growth in 1995 and 1996.
In assessing the potential for future growth in its service area, NJNG uses information derived from county and municipal planning boards which describes housing development in various stages of approval. In addition, builders in NJNG's service area are surveyed to determine their development plans for future time periods. Finally, NJNG uses information concerning its service territory and projected population growth rates from a study prepared by outside consultants. In addition to customer growth through new construction, NJNG's business strategy includes aggressively pursuing conversions from other fuels, such as oil. It is estimated that approximately 40% of NJNG's projected customer growth will consist of conversions.
In order to lower its overall cost of gas and balance its demand profile, NJNG also plans to pursue off-system sales and non-peak sales, such as natural gas-fueled electric generating projects.
Throughput
For the fiscal year ended September 30, 1994, operating revenues and throughput by customer class were as follows:
See Results of Consolidated Operations - Utility Operations in the Company's 1994 Annual Report, filed as Exhibit 13-1 hereto, for a discussion of gas and transportation sales. Also see
NJNG Operating Statistics in the Company's 1994 Annual Report, filed as Exhibit 13-1 hereto, for information on operating revenues and throughput for the past six years. During this period, no single customer represented more than 10% of operating revenues.
Seasonality of Gas Revenues - - ---------------------------
As a result of the heat-sensitive nature of NJNG's residential customer base, therm sales are largely affected by weather conditions. Specifically, customer demand substantially increases during the winter months when natural gas is used for heating purposes. See Liquidity and Capital Resources - NJNG in the Company's 1994 Annual Report, filed as Exhibit 13-1 hereto, for a discussion of the effect of seasonality on cash flow.
The impact of weather on the level and timing of NJNG's revenues and cash flows is affected by a weather-normalization clause in its tariff which became effective for two years on an experimental basis in October 1992. NJNG received approval from the New Jersey Board of Public Utilities (the BPU) in October 1994 to continue the clause on an interim basis pending a final BPU order. The weather-normalization clause provides for a revenue adjustment if the weather varies by more than one-half of 1% from the ten-year average. The accumulated adjustment from one heating season (i.e., October-April) will be billed or credited to customers in the subsequent heating season. See Note 7 to the Consolidated Financial Statements - Regulatory Issues in the Company's 1994 Annual Report, filed as Exhibit 13-1 hereto, for additional information with regard to the weather-normalization clause.
Gas Supply
The following table sets forth the volumes of natural gas purchased by NJNG for the fiscal years indicated and the average cost per therm for each fiscal year:
A) Firm Natural Gas Supplies & Capacity
Due to the results of Federal Energy Regulatory Commission (FERC) Orders 636, 636A and 636B (collectively, Order 636), NJNG's portfolio of supplies and capacity has changed significantly. NJNG's pipeline suppliers have "unbundled" their sales service from their transportation service. All of NJNG's past "bundled" suppliers have made the decision to no longer provide a sales service, but will transport only. This has required NJNG to evaluate separately gas purchasing and transportation.
A number of NJNG's purchase contracts which were federally regulated and executed before Order 636 became effective were separate from transportation contracts and therefore unaffected by Order 636. These significant suppliers and their respective contract expiration dates are as follows: Alberta Northeast Gas Limited (2007) and Boundary Gas, Inc. (2003). See Item 3 - Legal Proceedings Carnegie for a discussion of the early termination of a contract with Carnegie Natural Gas Company.
In order to deliver the above supplies, NJNG maintains capacity with its traditional pipeline connections and has also added a number of new capacity agreements with additional pipelines through the Order 636 unbundling process. Significant capacity agreements and their respective contract termination dates that provide transportation from the supply area to our market area are as follows: Texas Eastern Transmission Corporation (1999), Texas Gas Transmission Corporation (2000), Tennessee Gas Pipeline (2003) and Iroquois Pipeline (2007). These four pipelines have a daily deliverability of 247,000 Dths, or an annual capacity of 90 Bcf.
In addition to the above contracts, NJNG has storage and transportation contracts that provide additional daily deliverability of 219,000 Dths from storage fields in Pennsylvania to our market area. The significant storage agreements and their respective contract expiration dates are as follows: Texas Eastern Transmission Corporation (2000) and CNG Transmission Corporation (2000).
The "Unbundled" category in the preceding table consists of gas purchased under monthly, short-term (up to six months) and long-term (over six months) contracts that are priced at market levels and have been delivered under separate agreements from pipeline bundled services. These supplies have been used to replace the more expensive "bundled" pipeline supplies and have reduced NJNG's average cost of gas. NJNG negotiates with a number of suppliers for these non-federally regulated gas supplies under a number of different contract terms and durations. In 1994, NJNG purchased gas from 27 suppliers under contracts ranging from one month to seventeen years. NJNG believes that its supply available under long-term contracts is adequate to meet its expected firm load over the next several years.
B) Transportation
NJNG's ability to further diversify its firm suppliers and purchase additional supplies will be
dependent upon the availability of transportation on the interstate pipeline system and the FERC regulations that govern interstate transportation. Presently, NJNG connects with all five interstate pipelines serving New Jersey. See Regulation and Rates - Federal below for a discussion of FERC Order 636.
C) Peaking Supply
To meet its increased winter peak day demand, NJNG purchases storage services from various suppliers and maintains two liquefied natural gas (LNG) facilities. See Item 2



ITEM 2. PROPERTIES
NJNG (All properties are in New Jersey)
NJNG owns 10,110 miles of distribution main and services, 325 miles of transmission main and approximately 356,000 meters. Mains are primarily located under public roads. Where mains are located under private property, NJNG has obtained easements from the owners of record.
In addition to mains and services, 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 effective 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 appliance service operations and administrative offices. NJNG leases its headquarters facilities in Wall Township, customer service offices located in Asbury Park and Wall Township, Monmouth County and a service center in Manahawkin, Ocean County. These customer service offices support customer contact, marketing and other functions.
NJNG also owns a storage facility in Long Branch, Monmouth County.
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 twenty-three supplemental indentures, as security for NJNG's bonded debt, which totaled approximately $184 million at September 30, 1994. In addition, under the terms of its Indenture, NJNG could have issued approximately $154 million of additional first mortgage bonds as of September 30, 1994. In October 1994, NJNG issued $25 million of its Medium-Term Notes, consisting of its 8.25% Series Z First Mortgage Bonds due 2004 under its Indenture, as amended by the twenty-fourth supplemental indenture.
NJNG completed construction of the Monmouth-Ocean Transmission (MOT) line in 1993. The MOT line is providing service to a cogeneration plant in Lakewood Township, Ocean County and is helping NJNG meet the future energy needs associated with the expected customer growth in Monmouth and Ocean counties. NJNG has entered into an agreement to provide the cogeneration project with at least 50,000 Dths per day of pipeline capacity on the MOT line, subject to NJNG's right to utilize this capacity for up to 30 days per year to help meet its peak-day requirements.
NJR Energy
NJR Energy, as a working-interest participant, has interests in oil and gas leases in Louisiana, New York, West Virginia and Texas. Additionally, NJNR has working interests in oil and gas leases in Texas, Oklahoma, Kansas, Arkansas, Utah and Pennsylvania, and is a participant in
a 21-mile natural gas transportation pipeline joint venture, located in Cambria County and Indiana County, Pennsylvania. NJNR also owns a natural gas gathering system and is a participant in a 16-mile natural gas pipeline joint venture located in Utah.
Pipeline has a 2.8% equity interest in the Iroquois Gas Transmission System, L.P. which owns and operates the Iroquois pipeline project.
Storage, which was formed in December 1994, has a 5.66% equity interest in Market Hub Partners, L.P. which it is intended will develop, own and operate a system of five natural gas market centers with high deliverability salt cavern storage facilities in Texas, Louisiana, Mississippi, Michigan and Pennsylvania.
CR&R (All properties are in New Jersey)
CR&R currently owns and operates 17 buildings consisting of 914,200 square feet of commercial office and mixed-use commercial/industrial space, of which 886,000 square feet, or 97%, are occupied. CR&R and affiliated companies, including NJNG, occupy approximately 149,800 square feet in four of these buildings. These properties are located in Monmouth and Atlantic Counties in various business parks. These business parks include the Monmouth Shores Corporate Office Park (MSCOP), Monmouth Shores Corporate Park (MSCP), Jumping Brook Corporate Office Park (JBCOP), Central Monmouth Business Park (CMBP) and Expressway Corporate Center (ECC). See Item 3f.--Legal Proceedings--Real Estate Properties for a discussion of regulatory matters concerning MSCP. A summary of these business parks with pertinent data is as follows:
Major tenants include:
MSCOP NJNG, NatWest Home Mortgage and Prudential Insurance
MSCP Waterford/Wedgwood, American Press, CoreStates Bank, Gertler & Hanna and AT&T Information Systems
JBCOP USLIFE
CMBP State Farm Insurance, Motorola and NJNG.
ECC Social Security Administration and Computer Science Corporation
Capital Expenditure Program
See Liquidity and Capital Resources in the Company's 1994 Annual Report, filed as Exhibit 13-1 hereto, for a discussion of the Company's anticipated 1995 and 1996 capital expenditures for each business segment.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
a. Aberdeen - - ------------
Since June 1993, a total of six complaints have been filed in New Jersey Superior Court against NJNG and its contractor by persons alleging injuries arising out of a natural gas explosion and fire on June 9, 1993, at a residential building in Aberdeen Township, New Jersey. The plaintiffs allege in their respective actions, among other things, that the defendants were negligent or are strictly liable in tort in connection with their maintaining, replacing or servicing natural gas facilities at such building. The plaintiffs separately seek unspecified compensatory and punitive damages from NJNG and its contractor.
In May 1994, the New Jersey Superior Court ordered that all causes of action relating to the Aberdeen Township explosion be consolidated for purposes of discovery.
NJNG's liability insurance carriers are participating in the defense of these matters. NJNG is unable to predict the extent to which other claims will be asserted against, or liability imposed on, NJNG. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its consolidated financial condition or results of operations.
b. Carnegie - - ------------
In March 1993, NJNG was named a defendant in a civil action commenced by Carnegie Natural Gas Company (Carnegie) in the U.S. District Court for the Western District of Pennsylvania. This action challenges NJNG's decision to terminate the June 18, 1986 "Service Agreement for Sales Service under Rate Schedule LVWS" (LVWS Service Agreement) between Carnegie and NJNG effective March 31, 1994, pursuant to a "market-out" clause. The LVWS Service Agreement would otherwise have expired on March 31, 2001. Carnegie seeks, among other things, a declaratory judgment that the contract termination was void. Claims of tortious interference with contractual relations and abuse of process are also asserted and unspecified damages and punitive damages are also sought. In April 1993, Carnegie filed a motion for summary judgment on the contract termination claim. In May 1993, NJNG filed a response opposing Carnegie's motion, as well as a cross motion for summary judgment on all claims. On January 21, 1994 a federal magistrate issued a recommended decision denying Carnegie's motion for summary judgment. In addition, the magistrate granted NJNG's motion for summary judgment on Carnegie's tortious interference claim and denied NJNG's motion for summary judgment on the contract termination and abuse of process claims. Both parties filed objections to various aspects of the magistrate's recommended decision, which were denied by order of a federal district court judge on March 18, 1994. On July 14, 1994, Carnegie served a motion
for a preliminary injunction requiring NJNG to continue making payments pursuant to the contract during the pendency of the litigation. On September 29, 1994, the magistrate issued a recommended decision denying Carnegie's motion for a preliminary injunction, stating that Carnegie had not met its burden of establishing a likelihood of success on the merits of the lawsuit and of establishing that it would suffer irreparable harm by NJNG's failure to make payments. Carnegie filed an objection to the magistrate's recommended decision, which was denied by order of a federal district court judge on November 3, 1994. Pretrial discovery has been completed. The parties are now awaiting the scheduling of a trial date by the court. NJNG is unable to predict the outcome of this matter. The Company does not believe that the ultimate resolution of this matter will have a material adverse effect on its consolidated financial condition or results of operations.
c. South Brunswick Asphalt, L.P.
NJNG has been named a defendant in a civil action commenced in New Jersey Superior Court by South Brunswick Asphalt, L.P. (SBA) and its affiliated companies seeking damages arising from alleged environmental contamination at three sites owned or occupied by SBA and its affiliated companies. Specifically, the suit charges that tar emulsion removed from 1979 through 1983 by an affiliate of SBA (Seal Tite, Inc.) from NJNG's former gas manufacturing plant sites has been alleged by the NJDEPE to constitute a hazardous waste and that the tar emulsion has contaminated the soil and ground water at the three sites in question. In February 1991, the NJDEPE issued letters classifying the tar emulsion/sand and gravel mixture at each site as dry industrial waste, a non-hazardous classification. NJNG continues to explore various disposal methods for the tar emulsion/sand and gravel mixture.
NJNG's liability insurance carrier has assumed defense of this action but has denied coverage for SBA's claims. Although management is considering legal action against the carrier, NJNG believes that the total cost to remove and dispose of the tar emulsion/sand and gravel mixture from all three sites would be immaterial. Based upon the gas remediation rider approved by the BPU in June 1992, NJNG believes that such costs should be recoverable through the ratemaking process.
One of the SBA sites is the subject of a NJDEPE Directive and Notice alleging that the tar emulsion/sand and gravel mixture was a contributing factor to the contamination of ground water at a residential community. The NJDEPE is seeking reimbursement under the New Jersey Spill Compensation and Control Act of cleanup, remediation and related costs, estimated by the NJDEPE at approximately $20 million. NJNG is contesting the NJDEPE directive on the grounds, among others, that any such alleged ground water contamination was not caused by tar emulsions removed from NJNG's former gas plant manufacturing sites. NJNG's liability insurance carriers, which have been defending the civil action, have denied coverage for these claims and NJNG intends to contest this position. NJNG would attempt to seek recovery through the ratemaking process of any such cleanup or remediation payments it might ultimately be required to make, but recognizes that such recovery is not assured. There can be no assurance as to the outcome of these proceedings. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its consolidated
financial condition or results of operations.
d. Bridgeport Rental and Oil Service - - -------------------------------------
In January 1992, NJNG was advised of allegations that certain waste oil from its former manufactured gas plant site in Wildwood, New Jersey may have been sent by a demolition contractor to the Bridgeport Rental and Oil Service site in Logan Township, New Jersey. That site has been designated a Superfund site and is currently the subject of two lawsuits pending in the U.S. District Court in New Jersey. NJNG has notified its insurance carriers and is investigating this matter. NJNG is currently unable to predict the extent, if any, to which it may have cleanup or other liability with respect to this matter, but would seek recovery of any such costs through the ratemaking process. However, no assurance can be given as to the timing or extent of the ultimate recovery of such costs. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its consolidated financial condition or results of operations.
e. Iroquois - - -----------
Pipeline owns a 2.8% equity interest in the Iroquois Gas Transmission System, L.P. (Iroquois) which has constructed and is operating a 375-mile pipeline from the Canadian border in Upstate New York to Long Island.
Iroquois has been informed by the U.S. Attorney's Offices for the Northern, Southern and Eastern Districts of New York that an investigation is underway to determine whether or not Iroquois committed civil violations of the Federal Clean Water Act and/or its Corps of Engineers permit during construction of the pipeline. No proceedings in connection with this civil investigation have been commenced by the federal government against Iroquois.
In addition, in conjunction with the Environmental Protection Agency, a criminal investigation has been initiated by the U.S. Attorney's Office for the Northern District of New York. To date, no criminal charges have been filed.
In December 1993, Iroquois received notification from the Enforcement Staff of the Federal Energy Regulatory Commission Office of the General Counsel (Enforcement) that Enforcement has commenced a preliminary, non-public investigation concerning matters related to Iroquois' construction of certain of its pipeline facilities. Enforcement has requested information regarding certain aspects of the pipeline construction. In addition, in December 1993, Iroquois received a similar communication from the Army Corps of Engineers requesting information regarding permit compliance in connection with certain aspects of the pipeline construction. Iroquois is providing information to these agencies in response to their requests.
Iroquois has publicly stated that it believes the pipeline construction and right-of-way activities were conducted in a responsible manner and that its environmental program complied with or exceeded applicable standards for the industry. However, Iroquois deems it probable that the U.S. Attorney will seek indictments and in them substantial fines and other sanctions. The
foregoing proceedings and investigations have not affected the pipeline's operations.
Iroquois and its counsel expect to meet with those conducting the civil and criminal investigations, from time to time, both to gain an informed understanding of the focus and direction of the investigations in order to defend itself and, if and when appropriate, to explore a range of possible resolutions acceptable to all parties. No understandings or agreements have been reached that have led Iroquois to make provision in its financial statements for any dollar liability associated with these proceedings.
Pipeline is unable to predict the outcome of these proceedings and investigations. Based upon information currently available to the Company concerning the above matters involving Iroquois, the Company does not believe that their ultimate resolution will have a material adverse effect on the Company's consolidated financial condition or results of operations. Pipeline's investment in Iroquois as of September 30, 1994 was $5.6 million.
f. Real Estate Properties - - -------------------------
CR&R is the owner of Monmouth Shores Corporate Park (MSCP), located in Monmouth County, New Jersey. The land comprising MSCP was exempt from the provisions of the Freshwater Wetlands Protection Act (the Act) until assumption of the Federal 404 freshwater wetlands program by the New Jersey Department of Environmental Protection and Energy (NJDEPE) on March 2, 1994. MSCP is now regulated by the provisions of the Act. The Act restricts building in areas defined as "freshwater wetlands" and their transition areas. CR&R has hired an environmental engineer to delineate the wetlands and transition areas of MSCP in accordance with the provision of the Act.
Based upon the environmental engineer's delineation of the wetland and transition areas, CR&R has filed for and received a Letter of Interpretation (LOI) from NJDEPE on one parcel of land. CR&R has also filed for a LOI with NJDEPE regarding a second parcel and will file additional LOI's with NJDEPE as the remaining parcels of land are selected for development.
Based upon the environmental engineer's delineation, it is anticipated that the developable yield of MSCP will be reduced by approximately 7% compared with the original master plan. The actual yield achieved will be dictated by market and other conditions. Based upon the revised estimated developable yield for MSCP, the Company does not believe that a reserve against this property was necessary as of September 30, 1994.
g. Bessie-8 - - ------------
NJNR and others (the Joint Venture, et al.) were named in a complaint filed by the People's Natural Gas Company (People's) before the Pennsylvania Public Utility Commission (PaPUC). People's sought a determination that the Joint Venture, et al. were a public utility subject to the jurisdiction of the PaPUC and an order prohibiting natural gas service until proper PaPUC authorization was obtained.
In April 1988, an Administrative Law Judge (ALJ) issued an initial decision denying and dismissing People's complaint, "because the demonstrated activities of the Bessie-8 joint venture are not within the jurisdiction of the PaPUC to regulate". An initial decision is subject to adoption, modification or rejection by the full PaPUC. In April 1989, alternative motions to adopt the ALJ's initial decision or to subject the Joint Venture, et al. to the jurisdiction of the PaPUC failed due to 2-2 tie votes. In October 1992, the PaPUC, on its own initiative and without notice to any of the parties, determined in a 3-0 vote that the Joint Venture, et al. are a "public utility" under the Pennsylvania Public Utility Code and granted People's exceptions to the ALJ's April 1988 initial decision. This determination would require the Joint Venture, et al. to apply to the PaPUC for a certificate of public convenience within 30 days of the entry of the Final Order, or to cease and desist from providing service on the pipeline. In December 1992, the PaPUC issued a Final Order and extended the deadline to file for a certificate of public convenience within 60 days. In February 1993, the Joint Venture, et al. filed a motion with the Commonwealth Court of Pennsylvania (Commonwealth Court) requesting that the effectiveness of the Final Order be stayed pending court appeals. In February 1993, this motion was granted.
In October 1992, the Joint Venture, et al. filed a Petition for Review in the nature of a declaratory judgment action in the Commonwealth Court seeking among other things, a declaratory order that the April 1989 tie vote constituted a final action dismissing Peoples' complaint. Oral argument was held in March 1993. In January 1993, the Joint Venture, et al. filed a second Petition for Review with the Commonwealth Court challenging the merits of the PaPUC's determination that the Joint Venture, et al. are a "public utility" under the Pennsylvania Public Utility Code. In February 1993, the Commonwealth Court stayed the PaPUC's order requiring the Joint Venture, et al. to file for a certificate of public convenience and necessity, pending the outcome of the March 1993 oral argument. On July 2, 1993, the Commonwealth Court issued an order denying People's motion to lift the stay pending appeal. On December 16, 1993, the Commonwealth Court granted the Joint Venture, et al. a declaratory judgment that the April 1989 tie vote constituted a final action dismissing Peoples' complaint. Peoples and the PaPuc have appealed this decision to the Pennsylvania Supreme Court. The parties have submitted briefs to the Pennsylvania Supreme Court, and the matter now awaits oral argument and final disposition by the court.
In September 1993, Peoples instituted an action in the Court of Common Pleas of Allegheny County against the Joint Venture, et al. by filing a Praecipe for Writ of Summons. The Praecipe for Writ of Summons cannot and does not contain any description of the claim being asserted by Peoples. It merely tolls the statute of limitations and preserves any claim Peoples may have against the defendants until resolution of the actions discussed above. This action may concern a claim by Peoples for losses allegedly sustained as a result of the Bessie-8 joint venture activities. However, there has been no activity in this action and the nature of the action has not yet been determined. NJNR is unable to predict the outcome of these matters. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its consolidated financial condition or results of operations.
In January 1994, the owners of the plant previously served by the Bessie-8 pipeline entered
into a three-year natural gas contract with another supplier. In March 1994, NJNR concluded that, based on meetings with its partners to discuss various alternatives for the pipeline, the recovery of NJNR's net investment of $1 million was doubtful. Accordingly, as disclosed on Form 8-K filed by the Company on April 27, 1994, the results for the year ended September 30, 1994 include a pre-tax charge to earnings of $1 million, or $.04 per share.
h. Various - - ----------
The Company is party to various other claims, legal actions and complaints arising in the ordinary course of business. In management's opinion, the ultimate disposition of these matters will not have a material adverse effect on its financial condition or results of operations.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
Information for Items 5 through 8 of this report appears in the Company's 1994 Annual Report, filed as Exhibit 13-1 hereto, as indicated on the following table and is incorporated herein by reference, as follows:
Annual Report Page Item 5.

Item 5. Market for the Registrant's Common ---- Stock and Related Stockholder Matters
Market - Exchange 42 - Closing Prices & Dividends 23 Dividend Restrictions 35 Holders of Common Stock 22
Item 6.

Item 6. Selected Financial Data 22
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 24-28
Item 8


Item 8 Financial Statements and Supplementary Data 29-40
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure - None
PART III
Item 10.



Item 10. Directors and Executive Officers of the Registrant
Item 11.

Item 11. Executive Compensation
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13.

Item 13. Certain Relationships and Related Transactions
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 Shareholders to be held March 8, 1995, which is expected to be filed with the SEC pursuant to Regulation 14A not later than January 27, 1995.
PART IV
ITEM 14.

ITEM 14. 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 1994 Annual Report, are incorporated by reference in Item 8 above:
Consolidated Balance Sheets as of September 30, 1994 and 1993
Consolidated Statements of Income for the Years Ended September 30, 1994, 1993 and 1992
Consolidated Statements of Cash Flows for the Years Ended September 30, 1994, 1993 and 1992
Consolidated Statements of Capitalization as of September 30, 1994 and 1993
Consolidated Statements of Common Stock Equity for the Years Ended September 30, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
Independent Auditors' Report
(2) Financial Statement Schedules - See Index to Financial Statement Schedules on page 24.
(3) Exhibits - See Exhibit Index on page 33.
(b) The Company did not file a Form 8-K during the quarter ended September 30, 1994.
NEW JERSEY RESOURCES CORPORATION
INDEX TO FINANCIAL STATEMENT SCHEDULES
Page ---- Schedule V - Property, plant and equipment for each of the three years in the period ended September 30, 1994 25-27
Schedule VI - Accumulated depreciation and amortization for each of the three years in the period ended September 30, 1994 28
Schedule VIII - Valuation and qualifying accounts and reserves for each of the three years in the period ended September 30, 1994 29
Schedule X - Supplementary income statement information for each of the three years in the period ended September 30, 1994 30
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.
Schedule V
Notes: (A) Miscellaneous adjustment. (B) Net of transfers to Utility Plant in Service. (C) Net change in Other Work in Progress. (D) Net change in Property Under Capital Leases. (E) Exploratory dry holes. (F) Intercompany transfer of leasehold improvements.
Schedule V
Notes: (A) Miscellaneous adjustment. (B) Net of transfers to Utility Plant in Service. (C) Net change in Other Work in Progress. (D) Net change in Property Under Capital Leases. (E) Exploratory dry holes.
Schedule V
Notes: (A) Miscellaneous adjustment. (B) Net of transfers to Utility Plant in Service. (C) Net change in Other Work in Progress. (D) Net change in Property Under Capital Leases. (E) Exploratory dry holes. (F) Note receivable converted to Oil and Gas Properties.
Schedule VI
Schedule VIII
NEW JERSEY RESOURCES CORPORATION VALUATION AND QUALIFYING ACCOUNTS AND RESERVES YEARS ENDED SEPTEMBER 30, 1994, 1993 and 1992
Notes: (1) Uncollectible accounts written off, less recoveries. (2) Obsolete inventory written off, less salvage.
Schedule X
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 28, 1994 By:/s/Laurence M. Downes --------------------- Laurence M. Downes 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 included:
Dec. 28, 1994 /s/Oliver G. Richard, III Dec. 28, 1994 /s/Shirley A. Jackson --------------------------- --------------------- Oliver G. Richard, III Dr. Shirley A. Jackson Chairman, President and Director Chief Executive Officer and Director Dec. 28, 1994 /s/Dorothy K. Light ------------------- Dorothy K. Light Dec. 28, 1994 /s/Glenn C. Lockwood Director -------------------- Glenn C. Lockwood Vice President, Controller and Chief Accounting Officer Dec. 28, 1994 /s/Donald E. O'Neill -------------------- Donald E. O'Neill Director Dec. 28, 1994 /s/Roger E. Birk ---------------- Roger E. Birk Director Dec. 28, 1994 /s/Richard S. Sambol -------------------- Richard S. Sambol Director Dec. 28, 1994 /s/Bruce G. Coe --------------- Bruce G. Coe Director Dec. 28, 1994 /s/Charles G. Stalon -------------------- Charles G. Stalon Director Dec. 28, 1994 /s/Joe B. Foster ---------------- Joe B. Foster Dec. 28, 1994 /s/Thomas B. Toohey Director ------------------ Thomas B. Toohey Director Dec. 28, 1994 /s/Warren R. Haas ----------------- Warren R. Haas Dec. 28, 1994 /s/John J. Unkles, Jr. Director ---------------------- John J. Unkles, Jr. Director
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 as of September 30, 1994 and 1993 and for each of the three years in the period ended September 30, 1994, and have issued our report thereon dated October 31, 1994; such consolidated financial statements and report are included in your 1994 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedules of New Jersey Resources Corporation, listed in Item 14. These consolidated financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey October 31, 1994
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INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements No. 33-52409 and No. 33-48192 of New Jersey Resources Corporation on Forms S-8 and S-3, respectively, of our reports dated October 31, 1994, 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, 1994.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey December 28, 1994