NATIONAL FUEL GAS CO, 10-Q filed on 8/4/2017
Quarterly Report
Document And Entity Information
9 Months Ended
Jun. 30, 2017
Jul. 31, 2017
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Jun. 30, 2017 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q3 
 
Entity Registrant Name
NATIONAL FUEL GAS CO 
 
Entity Central Index Key
0000070145 
 
Current Fiscal Year End Date
--09-30 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
85,507,508 
Trading Symbol
nfg 
 
Consolidated Statements Of Income And Earnings Reinvested In The Business (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
INCOME
 
 
 
 
Operating Revenues
$ 348,368 
$ 335,617 
$ 1,292,944 
$ 1,159,943 
Operating Expenses:
 
 
 
 
Purchased Gas
46,135 
23,477 
264,349 
147,168 
Property, Franchise and Other Taxes
21,447 
20,261 
64,368 
61,923 
Depreciation, Depletion and Amortization
55,617 
58,802 
168,812 
193,300 
Impairment of Oil and Gas Producing Properties
82,658 
915,552 
Total Operating Expenses
225,014 
290,456 
827,494 
1,657,706 
Operating Income (Loss)
123,354 
45,161 
465,450 
(497,763)
Other Income (Expense):
 
 
 
 
Interest Income
853 
564 
2,844 
2,640 
Other Income
1,370 
1,519 
4,728 
7,173 
Interest Expense on Long-Term Debt
(29,225)
(28,897)
(87,241)
(88,263)
Other Interest Expense
(846)
(1,321)
(2,680)
(3,938)
Income (Loss) Before Income Taxes
95,506 
17,026 
383,101 
(580,151)
Income Tax Expense (Benefit)
35,792 
8,740 
145,195 
(251,641)
Net Income (Loss) Available for Common Stock
59,714 
8,286 
237,906 
(328,510)
EARNINGS REINVESTED IN THE BUSINESS
 
 
 
 
Balance at Beginning of Period
817,348 
699,399 
676,361 
1,103,200 
Beginning Retained Earnings Unappropriated And Current Period Net Income Loss
877,062 
707,685 
914,267 
774,690 
Dividends on Common Stock
(35,469)
(34,404)
(104,590)
(101,409)
Cumulative Effect of Adoption of Authoritative Guidance for Stock-Based Compensation
31,916 
Balance at June 30
841,593 
673,281 
841,593 
673,281 
Earnings Per Common Share, Basic:
 
 
 
 
Net Income (Loss) Available for Common Stock (in dollars per share)
$ 0.70 
$ 0.10 
$ 2.79 
$ (3.87)
Earnings Per Common Share, Diluted:
 
 
 
 
Net Income (Loss) Available for Common Stock (in dollars per share)
$ 0.69 
$ 0.10 
$ 2.77 
$ (3.87)
Weighted Average Common Shares Outstanding:
 
 
 
 
Used in Basic Calculation (shares)
85,422,313 
84,917,664 
85,315,154 
84,791,447 
Used in Diluted Calculation (shares)
86,064,464 
85,470,216 
85,950,742 
84,791,447 
Dividends Per Common Share:
 
 
 
 
Dividends Declared (in dollars per share)
$ 0.415 
$ 0.405 
$ 1.225 
$ 1.195 
Utility and Energy Marketing [Member]
 
 
 
 
INCOME
 
 
 
 
Operating Revenues
146,360 
123,976 
663,029 
540,981 
Operating Expenses:
 
 
 
 
Operation and Maintenance
44,467 
46,616 
158,796 
151,474 
Exploration and Production and Other [Member]
 
 
 
 
INCOME
 
 
 
 
Operating Revenues
151,925 
158,578 
473,617 
456,032 
Operating Expenses:
 
 
 
 
Operation and Maintenance
34,098 
35,427 
102,153 
123,965 
Pipeline and Storage and Gathering [Member]
 
 
 
 
INCOME
 
 
 
 
Operating Revenues
50,083 
53,063 
156,298 
162,930 
Operating Expenses:
 
 
 
 
Operation and Maintenance
$ 23,250 
$ 23,215 
$ 69,016 
$ 64,324 
Consolidated Statements Of Comprehensive Income (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net Income (Loss) Available for Common Stock
$ 59,714 
$ 8,286 
$ 237,906 
$ (328,510)
Other Comprehensive Income (Loss), Before Tax:
 
 
 
 
Unrealized Gain (Loss) on Securities Available for Sale Arising During the Period
1,437 
376 
2,280 
(266)
Unrealized Gain (Loss) on Derivative Financial Instruments Arising During the Period
18,233 
(70,363)
9,829 
28,777 
Reclassification Adjustment for Realized (Gains) Losses on Securities Available for Sale in Net Income
(741)
(388)
Reclassification Adjustment for Realized (Gains) Losses on Derivative Financial Instruments in Net Income
(18,452)
(58,373)
(59,641)
(176,779)
Other Comprehensive Income (Loss), Before Tax
1,218 
(128,360)
(48,273)
(148,656)
Income Tax Expense (Benefit) Related to Unrealized Gain (Loss) on Securities Available for Sale Arising During the Period
532 
122 
832 
(85)
Income Tax Expense (Benefit) Related to Unrealized Gain (Loss) on Derivative Financial Instruments Arising During the Period
7,592 
(29,521)
3,892 
5,345 
Reclassification Adjustment for Income Tax Benefit (Expense) on Realized Losses (Gains) from Securities Available for Sale in Net Income
(272)
(163)
Reclassification Adjustment for Income Tax Benefit (Expense) on Realized Losses (Gains) from Derivative Financial Instruments in Net Income
(7,693)
(24,514)
(25,061)
(68,120)
Income Taxes – Net
431 
(53,913)
(20,609)
(63,023)
Other Comprehensive Income (Loss)
787 
(74,447)
(27,664)
(85,633)
Comprehensive Income (Loss)
$ 60,501 
$ (66,161)
$ 210,242 
$ (414,143)
Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Sep. 30, 2016
ASSETS
 
 
Property, Plant and Equipment
$ 9,816,295 
$ 9,539,581 
Less - Accumulated Depreciation, Depletion and Amortization
5,232,771 
5,085,099 
Property, Plant and Equipment, Net, Total
4,583,524 
4,454,482 
Current Assets
 
 
Cash and Temporary Cash Investments
285,325 
129,972 
Hedging Collateral Deposits
2,142 1
1,484 1
Receivables – Net of Allowance for Uncollectible Accounts of $27,545 and $21,109, Respectively
127,876 
133,201 
Unbilled Revenue
19,729 
18,382 
Gas Stored Underground
17,793 
34,332 
Materials and Supplies - at average cost
34,706 
33,866 
Unrecovered Purchased Gas Costs
3,757 
2,440 
Other Current Assets
50,852 
59,354 
Total Current Assets
542,180 
413,031 
Other Assets
 
 
Recoverable Future Taxes
182,469 
177,261 
Unamortized Debt Expense
1,292 
1,688 
Other Regulatory Assets
315,126 
320,750 
Deferred Charges
28,821 
20,978 
Other Investments
126,485 
110,664 
Goodwill
5,476 
5,476 
Prepaid Post-Retirement Benefit Costs
18,619 
17,649 
Fair Value of Derivative Financial Instruments
63,036 
113,804 
Other
479 
604 
Total Other Assets
741,803 
768,874 
Total Assets
5,867,507 
5,636,387 
Capitalization:
 
 
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 85,467,963 Shares and 85,118,886 Shares, Respectively
85,468 
85,119 
Paid in Capital
790,291 
771,164 
Earnings Reinvested in the Business
841,593 
676,361 
Accumulated Other Comprehensive Loss
(33,304)
(5,640)
Total Comprehensive Shareholders’ Equity
1,684,048 
1,527,004 
Long-Term Debt, Net of Unamortized Discount and Debt Issuance Costs
1,787,954 
2,086,252 
Total Capitalization
3,472,002 
3,613,256 
Current and Accrued Liabilities
 
 
Notes Payable to Banks and Commercial Paper
Current Portion of Long-Term Debt
300,000 
Accounts Payable
98,842 
108,056 
Amounts Payable to Customers
13,070 
19,537 
Dividends Payable
35,469 
34,473 
Interest Payable on Long-Term Debt
28,985 
34,900 
Customer Advances
224 
14,762 
Customer Security Deposits
17,522 
16,019 
Other Accruals and Current Liabilities
107,101 
74,430 
Fair Value of Derivative Financial Instruments
922 
1,560 
Total Current and Accrued Liabilities
602,135 
303,737 
Deferred Credits
 
 
Deferred Income Taxes
881,547 
823,795 
Taxes Refundable to Customers
93,321 
93,318 
Cost of Removal Regulatory Liability
199,739 
193,424 
Other Regulatory Liabilities
88,647 
99,789 
Pension and Other Post-Retirement Liabilities
299,326 
277,113 
Asset Retirement Obligations
115,354 
112,330 
Other Deferred Credits
115,436 
119,625 
Total Deferred Credits
1,793,370 
1,719,394 
Commitments and Contingencies (Note 6)
Total Capitalization and Liabilities
$ 5,867,507 
$ 5,636,387 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2017
Sep. 30, 2016
Statement of Financial Position [Abstract]
 
 
Receivables, Allowance for Uncollectible Accounts
$ 27,545 
$ 21,109 
Common Stock, Par Value
$ 1 
$ 1 
Common Stock, Shares Authorized
200,000,000 
200,000,000 
Common Stock, Shares Issued
85,467,963 
85,118,886 
Common Stock, Shares Outstanding
85,467,963 
85,118,886 
Consolidated Statements Of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
OPERATING ACTIVITIES
 
 
Net Income (Loss) Available for Common Stock
$ 237,906 
$ (328,510)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:
 
 
Impairment of Oil and Gas Producing Properties
915,552 
Depreciation, Depletion and Amortization
168,812 
193,300 
Deferred Income Taxes
105,073 
(269,248)
Excess Tax Benefits Associated with Stock-Based Compensation Awards
(1,786)
Stock-Based Compensation
8,857 
3,138 
Other
11,084 
9,685 
Change in:
 
 
Hedging Collateral Deposits
(658)
8,116 
Receivables and Unbilled Revenue
(15,885)
(7,756)
Gas Stored Underground and Materials and Supplies
15,699 
15,683 
Unrecovered Purchased Gas Costs
(1,317)
(933)
Other Current Assets
8,502 
15,334 
Accounts Payable
5,046 
(53,687)
Amounts Payable to Customers
(6,467)
(21,337)
Customer Advances
(14,538)
(16,198)
Customer Security Deposits
1,503 
(396)
Other Accruals and Current Liabilities
25,423 
3,375 
Other Assets
(3,548)
3,775 
Other Liabilities
5,638 
(8,152)
Net Cash Provided by Operating Activities
551,130 
459,955 
INVESTING ACTIVITIES
 
 
Capital Expenditures
(314,774)
(481,781)
Net Proceeds from Sale of Oil and Gas Producing Properties
26,554 
115,235 
Other
(10,186)
(11,163)
Net Cash Used in Investing Activities
(298,406)
(377,709)
Financing Activities
 
 
Excess Tax Benefits Associated with Stock-Based Compensation Awards
1,786 
Dividends Paid on Common Stock
(103,594)
(100,419)
Net Proceeds from Issuance of Common Stock
6,223 
8,358 
Net Cash Used in Financing Activities
(97,371)
(90,275)
Net Increase (Decrease) in Cash and Temporary Cash Investments
155,353 
(8,029)
Cash and Temporary Cash Investments at October 1
129,972 
113,596 
Cash and Temporary Cash Investments at June 30
285,325 
105,567 
Supplemental Disclosure of Cash Flow Information, Non-Cash Investing Activities:
 
 
Non-Cash Capital Expenditures
47,508 
44,380 
Receivable from Sale of Oil and Gas Producing Properties
$ 0 
$ 22,081 
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies
Summary of Significant Accounting Policies
 
Principles of Consolidation.  The Company consolidates all entities in which it has a controlling financial interest.  All significant intercompany balances and transactions are eliminated. The Company uses proportionate consolidation when accounting for drilling arrangements related to oil and gas producing properties accounted for under the full cost method of accounting.
 
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Reclassification. Certain prior year amounts have been reclassified to conform with current year presentation.

Earnings for Interim Periods.  The Company, in its opinion, has included all adjustments (which consist of only normally recurring adjustments, unless otherwise disclosed in this Form 10-Q) that are necessary for a fair statement of the results of operations for the reported periods. The consolidated financial statements and notes thereto, included herein, should be read in conjunction with the financial statements and notes for the years ended September 30, 2016, 2015 and 2014 that are included in the Company's 2016 Form 10-K.  The consolidated financial statements for the year ended September 30, 2017 will be audited by the Company's independent registered public accounting firm after the end of the fiscal year.
 
The earnings for the nine months ended June 30, 2017 should not be taken as a prediction of earnings for the entire fiscal year ending September 30, 2017.  Most of the business of the Utility and Energy Marketing segments is seasonal in nature and is influenced by weather conditions.  Due to the seasonal nature of the heating business in the Utility and Energy Marketing segments, earnings during the winter months normally represent a substantial part of the earnings that those segments are expected to achieve for the entire fiscal year.  The Company’s business segments are discussed more fully in Note 7 – Business Segment Information.
 
Consolidated Statements of Cash Flows.  For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of generally three months or less to be cash equivalents.
 
Hedging Collateral Deposits.  This is an account title for cash held in margin accounts funded by the Company to serve as collateral for hedging positions.  In accordance with its accounting policy, the Company does not offset hedging collateral deposits paid or received against related derivative financial instruments liability or asset balances.
 
Gas Stored Underground.  In the Utility segment, gas stored underground is carried at lower of cost or net realizable value, on a LIFO method.  Gas stored underground normally declines during the first and second quarters of the year and is replenished during the third and fourth quarters.  In the Utility segment, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets under the caption “Other Accruals and Current Liabilities.”  Such reserve, which amounted to $7.7 million at June 30, 2017, is reduced to zero by September 30 of each year as the inventory is replenished.
 
Property, Plant and Equipment.  In the Company’s Exploration and Production segment, oil and gas property acquisition, exploration and development costs are capitalized under the full cost method of accounting. Under this methodology, all costs associated with property acquisition, exploration and development activities are capitalized, including internal costs directly identified with acquisition, exploration and development activities. The internal costs that are capitalized do not include any costs related to production, general corporate overhead, or similar activities. The Company does not recognize any gain or loss on the sale or other disposition of oil and gas properties unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center.
 
Capitalized costs include costs related to unproved properties, which are excluded from amortization until proved reserves are found or it is determined that the unproved properties are impaired.  Such costs amounted to $100.6 million and $135.3 million at June 30, 2017 and September 30, 2016, respectively.  All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. The amount of any impairment is transferred to the pool of capitalized costs being amortized.
 
Capitalized costs are subject to the SEC full cost ceiling test. The ceiling test, which is performed each quarter, determines a limit, or ceiling, on the amount of property acquisition, exploration and development costs that can be capitalized. The ceiling under this test represents (a) the present value of estimated future net cash flows, excluding future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, using a discount factor of 10%, which is computed by applying prices of oil and gas (as adjusted for hedging) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet, less estimated future expenditures, plus (b) the cost of unevaluated properties not being depleted, less (c) income tax effects related to the differences between the book and tax basis of the properties. The natural gas and oil prices used to calculate the full cost ceiling are based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the twelve-month period prior to the end of the reporting period. If capitalized costs, net of accumulated depreciation, depletion and amortization and related deferred income taxes, exceed the ceiling at the end of any quarter, a permanent impairment is required to be charged to earnings in that quarter.  At June 30, 2017, the ceiling exceeded the book value of the oil and gas properties by approximately $304.8 million. In adjusting estimated future cash flows for hedging under the ceiling test at June 30, 2017, estimated future net cash flows were increased by $49.8 million.

On December 1, 2015, Seneca and IOG - CRV Marcellus, LLC (IOG), an affiliate of IOG Capital, LP, and funds managed by affiliates of Fortress Investment Group, LLC, executed a joint development agreement that allows IOG to participate in the development of certain oil and gas interests owned by Seneca in Elk, McKean and Cameron Counties, Pennsylvania. On June 13, 2016, Seneca and IOG executed an extension of the joint development agreement. Under the terms of the extended agreement, Seneca and IOG will jointly participate in a program to develop up to 75 Marcellus wells, with Seneca serving as program operator. IOG will hold an 80% working interest in all of the joint development wells. In total, IOG is expected to fund approximately $325 million for its 80% working interest in the 75 joint development wells. Of this amount, IOG has funded $262.5 million as of June 30, 2017, which includes $163.9 million of cash ($137.3 million in fiscal 2016 and $26.6 million in fiscal 2017) that Seneca had received in recognition of IOG funding that is due to Seneca for costs previously incurred to develop a portion of the first 75 joint development wells. The cash proceeds were recorded by Seneca as a $163.9 million reduction of property, plant and equipment. The remainder funded joint development expenditures. As the fee-owner of the property’s mineral rights, Seneca retains a 7.5% royalty interest and the remaining 20% working interest (26% net revenue interest) in 56 of the joint development wells. In the remaining 19 wells, Seneca retains a 20% working and net revenue interest. Seneca’s working interest under the agreement will increase to 85% after IOG achieves a 15% internal rate of return.
Accumulated Other Comprehensive Income (Loss).  The components of Accumulated Other Comprehensive Income (Loss) and changes for the nine months ended June 30, 2017 and 2016, net of related tax effect, are as follows (amounts in parentheses indicate debits) (in thousands): 
 
Gains and Losses on Derivative Financial Instruments
Gains and Losses on Securities Available for Sale
Funded Status of the Pension and Other Post-Retirement Benefit Plans
Total
Three Months Ended June 30, 2017
 
 
 
 
Balance at April 1, 2017
$
36,257

$
6,128

$
(76,476
)
$
(34,091
)
Other Comprehensive Gains and Losses Before Reclassifications
10,641

905


11,546

Amounts Reclassified From Other Comprehensive Income (Loss)
(10,759
)


(10,759
)
Balance at June 30, 2017
$
36,139

$
7,033

$
(76,476
)
$
(33,304
)
Nine Months Ended June 30, 2017
 
 
 
 
Balance at October 1, 2016
$
64,782

$
6,054

$
(76,476
)
$
(5,640
)
Other Comprehensive Gains and Losses Before Reclassifications
5,937

1,448


7,385

Amounts Reclassified From Other Comprehensive Income (Loss)
(34,580
)
(469
)

(35,049
)
Balance at June 30, 2017
$
36,139

$
7,033

$
(76,476
)
$
(33,304
)
Three Months Ended June 30, 2016
 
 
 
 
Balance at April 1, 2016
$
146,671

$
5,309

$
(69,794
)
$
82,186

Other Comprehensive Gains and Losses Before Reclassifications
(40,842
)
254


(40,588
)
Amounts Reclassified From Other Comprehensive Income (Loss)
(33,859
)


(33,859
)
Balance at June 30, 2016
$
71,970

$
5,563

$
(69,794
)
$
7,739

Nine Months Ended June 30, 2016
 
 
 
 
Balance at October 1, 2015
$
157,197

$
5,969

$
(69,794
)
$
93,372

Other Comprehensive Gains and Losses Before Reclassifications
23,432

(181
)

23,251

Amounts Reclassified From Other Comprehensive Income (Loss)
(108,659
)
(225
)

(108,884
)
Balance at June 30, 2016
$
71,970

$
5,563

$
(69,794
)
$
7,739

 
 
 
 
 

Reclassifications Out of Accumulated Other Comprehensive Income (Loss).  The details about the reclassification adjustments out of accumulated other comprehensive loss for the nine months ended June 30, 2017 and 2016 are as follows (amounts in parentheses indicate debits to the income statement) (in thousands):
Details About Accumulated Other Comprehensive Income (Loss) Components
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
Affected Line Item in the Statement Where Net Income (Loss) is Presented
 
Three Months Ended June 30,
Nine Months Ended June 30,
 
 
2017
2016
2017
2016
 
Gains (Losses) on Derivative Financial Instrument Cash Flow Hedges:
 
 
 
 
 
     Commodity Contracts

$18,600


$58,354


$62,030


$172,596

Operating Revenues
     Commodity Contracts
21

70

(1,938
)
4,520

Purchased Gas
     Foreign Currency Contracts
(169
)
(51
)
(451
)
(337
)
Operation and Maintenance Expense
Gains (Losses) on Securities Available for Sale


741

388

Other Income
 
18,452

58,373

60,382

177,167

Total Before Income Tax
 
(7,693
)
(24,514
)
(25,333
)
(68,283
)
Income Tax Expense
 

$10,759


$33,859


$35,049


$108,884

Net of Tax

Other Current Assets.  The components of the Company’s Other Current Assets are as follows (in thousands):
                            
At June 30, 2017
 
At September 30, 2016
 
 
 
 
Prepayments
$
11,396

 
$
10,919

Prepaid Property and Other Taxes
11,180

 
13,138

Federal Income Taxes Receivable

 
11,758

State Income Taxes Receivable
9,658

 
3,961

Fair Values of Firm Commitments
1,473

 
3,962

Regulatory Assets
17,145

 
15,616

 
$
50,852

 
$
59,354


 
Other Accruals and Current Liabilities.  The components of the Company’s Other Accruals and Current Liabilities are as follows (in thousands):
                            
At June 30, 2017
 
At September 30, 2016
 
 
 
 
Accrued Capital Expenditures
$
28,129

 
$
26,796

Regulatory Liabilities
34,552

 
14,725

Reserve for Gas Replacement
7,667

 

Federal Income Taxes Payable
2,573

 

Other
34,180

 
32,909

 
$
107,101

 
$
74,430


 
Earnings Per Common Share.  Basic earnings per common share is computed by dividing income or loss by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  For purposes of determining earnings per common share, the potentially dilutive securities the Company has outstanding are stock options, SARs, restricted stock units and performance shares.  For the quarter and nine months ended June 30, 2017, the diluted weighted average shares outstanding shown on the Consolidated Statements of Income reflects the potential dilution as a result of these securities as determined using the Treasury Stock Method.  Stock options, SARs, restricted stock units and performance shares that are antidilutive are excluded from the calculation of diluted earnings per common share. There were 172,500 securities and 157,638 securities excluded as being antidilutive for the quarter and nine months ended June 30, 2017, respectively. There were 346,090 securities excluded as being antidilutive for the quarter ended June 30, 2016. As the Company recognized a net loss for the nine months ended June 30, 2016, the aforementioned potentially dilutive securities, amounting to 414,092 securities, were not recognized in the diluted earnings per share calculation for the nine months ended June 30, 2016.
 
Stock-Based Compensation.  The Company granted 184,148 performance shares during the nine months ended June 30, 2017. The weighted average fair value of such performance shares was $56.39 per share for the nine months ended June 30, 2017. Performance shares are an award constituting units denominated in common stock of the Company, the number of which may be adjusted over a performance cycle based upon the extent to which performance goals have been satisfied.  Earned performance shares may be distributed in the form of shares of common stock of the Company, an equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company. The performance shares do not entitle the participant to receive dividends during the vesting period.
 
Half of the performance shares granted during the nine months ended June 30, 2017 must meet a performance goal related to relative return on capital over the performance cycle of October 1, 2016 to September 30, 2019.  The performance goal over the performance cycle is the Company’s total return on capital relative to the total return on capital of other companies in a group selected by the Compensation Committee (“Report Group”).  Total return on capital for a given company means the average of the Report Group companies’ returns on capital for each twelve month period corresponding to each of the Company’s fiscal years during the performance cycle, based on data reported for the Report Group companies in the Bloomberg database.  The number of these performance shares that will vest and be paid will depend upon the Company’s performance relative to the Report Group and not upon the absolute level of return achieved by the Company.  The fair value of these performance shares is calculated by multiplying the expected number of shares that will be issued by the average market price of Company common stock on the date of grant reduced by the present value of forgone dividends over the vesting term of the award.  The fair value is recorded as compensation expense over the vesting term of the award.  The other half of the performance shares granted during the nine months ended June 30, 2017 must meet a performance goal related to relative total shareholder return over the performance cycle of October 1, 2016 to September 30, 2019.  The performance goal over the performance cycle is the Company’s three-year total shareholder return relative to the three-year total shareholder return of the other companies in the Report Group.  Three-year shareholder return for a given company will be based on the data reported for that company (with the starting and ending stock prices over the performance cycle calculated as the average closing stock price for the prior calendar month and with dividends reinvested in that company’s securities at each ex-dividend date) in the Bloomberg database.  The number of these total shareholder return performance shares ("TSR performance shares") that will vest and be paid will depend upon the Company’s performance relative to the Report Group and not upon the absolute level of return achieved by the Company.  The fair value price at the date of grant for the TSR performance shares is determined using a Monte Carlo simulation technique, which includes a reduction in value for the present value of forgone dividends over the vesting term of the award.  This price is multiplied by the number of TSR performance shares awarded, the result of which is recorded as compensation expense over the vesting term of the award.
 
The Company granted 87,143 non-performance based restricted stock units during the nine months ended June 30, 2017.  The weighted average fair value of such non-performance based restricted stock units was $52.13 per share for the nine months ended June 30, 2017.  Restricted stock units represent the right to receive shares of common stock of the Company (or the equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company) at the end of a specified time period. These non-performance based restricted stock units do not entitle the participant to receive dividends during the vesting period. The accounting for non-performance based restricted stock units is the same as the accounting for restricted share awards, except that the fair value at the date of grant of the restricted stock units must be reduced by the present value of forgone dividends over the vesting term of the award.
 
New Authoritative Accounting and Financial Reporting Guidance. In May 2014, the FASB issued authoritative guidance regarding revenue recognition. The authoritative guidance provides a single, comprehensive revenue recognition model for all contracts with customers to improve comparability. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The original effective date of this authoritative guidance was as of the Company's first quarter of fiscal 2018. However, the FASB has delayed the effective date of the new revenue standard by one year, and the guidance will now be effective as of the Company's first quarter of fiscal 2019. Working towards this implementation date, the Company is currently evaluating the guidance and the various issues identified by industry based revenue recognition task forces. Recent task force guidance suggests that the Company's revenue recognition policies may not change significantly although the Company is still assessing the impact. The Company will need to enhance its financial statement disclosures to comply with the new authoritative guidance.
In February 2016, the FASB issued authoritative guidance requiring organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by all leases, regardless of whether they are considered to be capital leases or operating leases. The FASB’s previous authoritative guidance required organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by capital leases while excluding operating leases from balance sheet recognition. The new authoritative guidance will be effective as of the Company’s first quarter of fiscal 2020, with early adoption permitted. The Company does not anticipate early adoption and is currently evaluating the provisions of the revised guidance.
In March 2016, the FASB issued authoritative guidance simplifying several aspects of the accounting for stock-based compensation. The Company adopted this guidance effective as of October 1, 2016, recognizing a cumulative effect adjustment that increased retained earnings by $31.9 million. The cumulative effect represents the tax benefit of previously unrecognized tax deductions in excess of stock compensation recorded for financial reporting purposes. On a prospective basis, the tax effect of all future differences between stock compensation recorded for financial reporting purposes and actual tax deductions for stock compensation will be recognized upon vesting or settlement as income tax expense or benefit in the income statement. From a statement of cash flows perspective, the tax benefits relating to differences between stock compensation recorded for financial reporting purposes and actual tax deductions for stock compensation are now included in cash provided by operating activities instead of cash provided by financing activities. The changes to the statement of cash flows have been applied prospectively and prior periods have not been adjusted.
In March 2017, the FASB issued authoritative guidance related to the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires segregation of the service cost component from the other components of net periodic pension cost and net periodic postretirement benefit cost for financial reporting purposes. The service cost component is to be presented on the income statement in the same line items as other compensation costs included within Operating Expenses and the other components of net periodic pension cost and net periodic postretirement benefit cost are to be presented on the income statement below the subtotal labeled Operating Income (Loss). Under this guidance, the service cost component shall be the only component eligible to be capitalized as part of the cost of inventory or property, plant and equipment. The new guidance will be effective as of the Company’s first quarter of fiscal 2019, with early adoption permitted. The Company is currently evaluating the interaction of this authoritative guidance with the various regulatory provisions concerning pension and postretirement benefit costs in the Company’s Utility and Pipeline and Storage segments.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
 
The FASB authoritative guidance regarding fair value measurements establishes a fair-value hierarchy and prioritizes the inputs used in valuation techniques that measure fair value. Those inputs are prioritized into three levels. Level 1 inputs are unadjusted quoted prices in active markets for assets or liabilities that the Company can access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly at the measurement date. Level 3 inputs are unobservable inputs for the asset or liability at the measurement date. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.
 
The following table sets forth, by level within the fair value hierarchy, the Company's financial assets and liabilities (as applicable) that were accounted for at fair value on a recurring basis as of June 30, 2017 and September 30, 2016.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair value presentation for over the counter swaps combines gas and oil swaps because a significant number of the counterparties enter into both gas and oil swap agreements with the Company.  
Recurring Fair Value Measures
At fair value as of June 30, 2017
(Thousands of Dollars)   
Level 1
 
Level 2
 
Level 3
 
Netting Adjustments(1)
 
Total(1)
Assets:
 

 
 

 
 

 
 

 
 

Cash Equivalents – Money Market Mutual Funds
$
257,721

 
$

 
$

 
$

 
$
257,721

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
1,354

 

 

 
(1,125
)
 
229

Over the Counter Swaps – Gas and Oil

 
67,890

 

 
(3,895
)
 
63,995

Foreign Currency Contracts

 
336

 

 
(1,524
)
 
(1,188
)
Other Investments:
 

 
 

 
 

 
 

 
 

Balanced Equity Mutual Fund
36,107

 

 

 

 
36,107

Fixed Income Mutual Fund
45,547

 

 

 

 
45,547

Common Stock – Financial Services Industry
3,859

 

 

 

 
3,859

Hedging Collateral Deposits
2,142

 

 

 

 
2,142

Total                                           
$
346,730

 
$
68,226

 
$

 
$
(6,544
)
 
$
408,412

 
 
 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

 
 

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
$
1,125

 
$

 
$

 
$
(1,125
)
 
$

Over the Counter Swaps – Gas and Oil

 
4,817

 

 
(3,895
)
 
922

Foreign Currency Contracts

 
1,524

 

 
(1,524
)
 

Total
$
1,125

 
$
6,341

 
$

 
$
(6,544
)
 
$
922

Total Net Assets/(Liabilities)
$
345,605

 
$
61,885

 
$

 
$

 
$
407,490

 
Recurring Fair Value Measures
At fair value as of September 30, 2016
(Thousands of Dollars)   
Level 1
 
Level 2
 
Level 3
 
Netting Adjustments(1)
 
Total(1)
Assets:
 

 
 

 
 

 
 

 
 

Cash Equivalents – Money Market Mutual Funds
$
114,895

 
$

 
$

 
$

 
$
114,895

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
2,623

 

 

 
(2,276
)
 
347

Over the Counter Swaps – Gas and Oil

 
119,654

 

 
(3,860
)
 
115,794

Foreign Currency Contracts

 

 

 
(2,337
)
 
(2,337
)
Other Investments:
 

 
 

 
 

 
 

 
 

Balanced Equity Mutual Fund
36,658

 

 

 

 
36,658

Fixed Income Mutual Fund
31,395

 

 

 

 
31,395

Common Stock – Financial Services Industry
2,902

 

 

 

 
2,902

Hedging Collateral Deposits
1,484

 

 

 

 
1,484

Total                                           
$
189,957

 
$
119,654

 
$

 
$
(8,473
)
 
$
301,138

 
 
 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

 
 

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
$
2,276

 
$

 
$

 
$
(2,276
)
 
$

Over the Counter Swaps – Gas and Oil

 
5,322

 

 
(3,860
)
 
1,462

     Foreign Currency Contracts

 
2,337

 

 
(2,337
)
 

Total
$
2,276

 
$
7,659

 
$

 
$
(8,473
)
 
$
1,462

Total Net Assets/(Liabilities)
$
187,681

 
$
111,995

 
$

 
$

 
$
299,676


(1) 
Netting Adjustments represent the impact of legally-enforceable master netting arrangements that allow the Company to net gain and loss positions held with the same counterparties. The net asset or net liability for each counterparty is recorded as an asset or liability on the Company’s balance sheet.
 
Derivative Financial Instruments
 
At June 30, 2017 and September 30, 2016, the derivative financial instruments reported in Level 1 consist of natural gas NYMEX and ICE futures contracts used in the Company’s Energy Marketing segment. Hedging collateral deposits were $2.1 million at June 30, 2017 and $1.5 million at September 30, 2016, which were associated with these futures contracts and have been reported in Level 1 as well. The derivative financial instruments reported in Level 2 at June 30, 2017 and September 30, 2016 consist of natural gas price swap agreements used in the Company’s Exploration and Production and Energy Marketing segments, crude oil price swap agreements used in the Company’s Exploration and Production segment and foreign currency contracts used in the Company's Exploration and Production segment. The derivative financial instruments reported in Level 2 at June 30, 2017 also include basis hedge swap agreements used in the Company's Energy Marketing segment. The fair value of the Level 2 price swap agreements is based on an internal, discounted cash flow model that uses observable inputs (i.e. LIBOR based discount rates and basis differential information, if applicable, at active natural gas and crude oil trading markets). The fair value of the Level 2 foreign currency contracts is determined using the market approach based on observable market transactions of forward Canadian currency rates. 
 
The accounting rules for fair value measurements and disclosures require consideration of the impact of nonperformance risk (including credit risk) from a market participant perspective in the measurement of the fair value of assets and liabilities.  At June 30, 2017, the Company determined that nonperformance risk would have no material impact on its financial position or results of operation.  To assess nonperformance risk, the Company considered information such as any applicable collateral posted, master netting arrangements, and applied a market-based method by using the counterparty's (assuming the derivative is in a gain position) or the Company’s (assuming the derivative is in a loss position) credit default swaps rates.
 
For the nine months ended June 30, 2017, there were no assets or liabilities measured at fair value and classified as Level 3. The Company's Exploration and Production segment had a small portion of their crude oil price swap agreements reported as Level 3 at October 1, 2015 that settled during the first quarter of fiscal 2016. For the quarters and nine months ended June 30, 2017 and June 30, 2016, no transfers in or out of Level 1 or Level 2 occurred.
Financial Instruments
Financial Instruments
Financial Instruments
 
Long-Term Debt.  The fair market value of the Company’s debt, as presented in the table below, was determined using a discounted cash flow model, which incorporates the Company’s credit ratings and current market conditions in determining the yield, and subsequently, the fair market value of the debt.  Based on these criteria, the fair market value of long-term debt, including current portion, was as follows (in thousands): 
 
June 30, 2017
 
September 30, 2016
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Long-Term Debt
$
2,087,954

 
$
2,220,588

 
$
2,086,252

 
$
2,255,562


 
The fair value amounts are not intended to reflect principal amounts that the Company will ultimately be required to pay. Carrying amounts for other financial instruments recorded on the Company’s Consolidated Balance Sheets approximate fair value. The fair value of long-term debt was calculated using observable inputs (U.S. Treasuries/LIBOR for the risk free component and company specific credit spread information – generally obtained from recent trade activity in the debt).  As such, the Company considers the debt to be Level 2.
 
Any temporary cash investments, notes payable to banks and commercial paper are stated at cost. Temporary cash investments are considered Level 1, while notes payable to banks and commercial paper are considered to be Level 2.  Given the short-term nature of the notes payable to banks and commercial paper, the Company believes cost is a reasonable approximation of fair value.
 
Other Investments.  Investments in life insurance are stated at their cash surrender values or net present value as discussed below. Investments in an equity mutual fund, a fixed income mutual fund and the stock of an insurance company (marketable equity securities), as discussed below, are stated at fair value based on quoted market prices.
 
Other investments include cash surrender values of insurance contracts (net present value in the case of split-dollar collateral assignment arrangements) and marketable equity and fixed income securities. The values of the insurance contracts amounted to $41.0 million at June 30, 2017 and $39.7 million at September 30, 2016. The fair value of the equity mutual fund was $36.1 million at June 30, 2017 and $36.7 million at September 30, 2016. The gross unrealized gain on this equity mutual fund was $8.6 million at June 30, 2017 and $7.9 million at September 30, 2016. The fair value of the fixed income mutual fund was $45.5 million at June 30, 2017 and $31.4 million at September 30, 2016. The gross unrealized loss on this fixed income mutual fund was less than $0.1 million at June 30, 2017 and the gross unrealized gain on this fixed income mutual fund was less than $0.1 million at September 30, 2016. The fair value of the stock of an insurance company was $3.9 million at June 30, 2017 and $2.9 million at September 30, 2016. The gross unrealized gain on this stock was $2.6 million at June 30, 2017 and $1.6 million at September 30, 2016. The insurance contracts and marketable equity securities are primarily informal funding mechanisms for various benefit obligations the Company has to certain employees.
 
Derivative Financial Instruments.  The Company uses derivative financial instruments to manage commodity price risk in the Exploration and Production segment as well as the Energy Marketing segment. The Company enters into futures contracts and over-the-counter swap agreements for natural gas and crude oil to manage the price risk associated with forecasted sales of gas and oil. In addition, the Company also enters into foreign exchange forward contracts to manage the risk of currency fluctuations associated with transportation costs denominated in Canadian currency in the Exploration and Production segment. These instruments are accounted for as cash flow hedges. The Company also enters into futures contracts and swaps, which are accounted for as cash flow hedges, to manage the price risk associated with forecasted gas purchases. The Company enters into futures contracts and swaps to mitigate risk associated with fixed price sales commitments, fixed price purchase commitments, and the decline in value of natural gas held in storage. These instruments are accounted for as fair value hedges. The duration of the Company’s combined cash flow and fair value commodity hedges does not typically exceed 7 years while the foreign currency forward contracts do not exceed ten years. The Exploration and Production segment holds the majority of the Company’s derivative financial instruments.

The Company has presented its net derivative assets and liabilities as “Fair Value of Derivative Financial Instruments” on its Consolidated Balance Sheets at June 30, 2017 and September 30, 2016.  Substantially all of the derivative financial instruments reported on those line items relate to commodity contracts and a small portion relates to foreign currency forward contracts.
 
Cash Flow Hedges
 
For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the period or periods during which the hedged transaction affects earnings.  Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. 

As of June 30, 2017, the Company had the following commodity derivative contracts (swaps and futures contracts) outstanding:
Commodity
Units

 
Natural Gas
126.6

 Bcf (short positions)
Natural Gas
1.1

 Bcf (long positions)
Crude Oil
2,631,000

 Bbls (short positions)
    
As of June 30, 2017, the Company was hedging a total of $88.2 million of forecasted transportation costs denominated in Canadian dollars with foreign currency forward contracts (long positions).
As of June 30, 2017, the Company had $62.0 million ($36.1 million after tax) of net hedging gains included in the accumulated other comprehensive income (loss) balance. It is expected that $39.3 million ($22.9 million after tax) of such unrealized gains will be reclassified into the Consolidated Statement of Income within the next 12 months as the underlying hedged transaction are recorded in earnings.
The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the
Three Months Ended June 30, 2017 and 2016 (Thousands of Dollars)
Derivatives in Cash Flow Hedging Relationships
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion) for the Three Months Ended June 30,
Location of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion) for the Three Months Ended June 30,
Location of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) for the Three Months Ended June 30,
 
2017
2016
 
2017
2016
 
2017
2016
Commodity Contracts
$
17,342

$
(68,914
)
Operating Revenue
$
18,600

$
58,354

Operating Revenue
$
1,040

$
87

Commodity Contracts
240

(921
)
Purchased Gas
21

70

Not Applicable


Foreign Currency Contracts
651

(528
)
Operation and Maintenance Expense
(169
)
(51
)
Not Applicable


Total
$
18,233

$
(70,363
)
 
$
18,452

$
58,373

 
$
1,040

$
87

The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the
Nine Months Ended June 30, 2017 and 2016 (Thousands of Dollars)
Derivatives in Cash Flow Hedging Relationships
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion) for the Nine Months Ended June 30,
Location of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion) for the Nine Months Ended June 30,
Location of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) for the Nine Months Ended June 30,
 
2017
2016
 
2017
2016
 
2017
2016
Commodity Contracts
$
9,382

$
27,304

Operating Revenue
$
62,030

$
172,596

Operating Revenue
$
940

$
255

Commodity Contracts
(252
)
1,078

Purchased Gas
(1,938
)
4,520

Not Applicable


Foreign Currency Contracts
699

395

Operation and Maintenance Expense
(451
)
(337
)
Not Applicable


Total
$
9,829

$
28,777

 
$
59,641

$
176,779

 
$
940

$
255

 
 
 
 
 
 
 
 
 

Fair Value Hedges
 
The Company utilizes fair value hedges to mitigate risk associated with fixed price sales commitments, fixed price purchase commitments, and the decline in the value of certain natural gas held in storage. With respect to fixed price sales commitments, the Company enters into long positions to mitigate the risk of price increases for natural gas supplies that could occur after the Company enters into fixed price sales agreements with its customers. With respect to fixed price purchase commitments, the Company enters into short positions to mitigate the risk of price decreases that could occur after the Company locks into fixed price purchase deals with its suppliers. With respect to storage hedges, the Company enters into short positions to mitigate the risk of price decreases that could result in a lower of cost or net realizable value writedown of the value of natural gas in storage that is recorded in the Company’s financial statements. As of June 30, 2017, the Company’s Energy Marketing segment had fair value hedges covering approximately 17.0 Bcf (16.0 Bcf of fixed price sales commitments, 0.1 Bcf of fixed price purchase commitments and 0.9 Bcf of commitments related to the withdrawal of storage gas). For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk completely offset each other in current earnings, as shown below.

Derivatives in Fair Value Hedging Relationships
Location of Gain or (Loss) on Derivative and Hedged Item Recognized in the Consolidated Statement of Income
Amount of Gain or (Loss) on Derivative Recognized in the Consolidated Statement of Income for the
Nine Months Ended June 30, 2017
(In Thousands)
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income for the
Nine Months Ended June 30, 2017
(In Thousands)
Commodity Contracts
Operating Revenues
$
1,317

$
(1,317
)
Commodity Contracts
Purchased Gas
$
427

$
(427
)
 
 
$
1,744

$
(1,744
)
 
Credit Risk
 
The Company may be exposed to credit risk on any of the derivative financial instruments that are in a gain position. Credit risk relates to the risk of loss that the Company would incur as a result of nonperformance by counterparties pursuant to the terms of their contractual obligations. To mitigate such credit risk, management performs a credit check, and then on a quarterly basis monitors counterparty credit exposure. The majority of the Company’s counterparties are financial institutions and energy traders. The Company has over-the-counter swap positions and applicable foreign currency forward contracts with sixteen counterparties of which all sixteen are in a net gain position. On average, the Company had $3.9 million of credit exposure per counterparty in a gain position at June 30, 2017. The maximum credit exposure per counterparty in a gain position at June 30, 2017 was $8.9 million. As of June 30, 2017, no collateral was received from the counterparties by the Company. The Company's gain position on such derivative financial instruments had not exceeded the established thresholds at which the counterparties would be required to post collateral, nor had the counterparties' credit ratings declined to levels at which the counterparties were required to post collateral.
 
As of June 30, 2017, fourteen of the sixteen counterparties to the Company’s outstanding derivative instrument contracts (specifically the over-the-counter swaps and applicable foreign currency forward contracts) had a common credit-risk related contingency feature. In the event the Company’s credit rating increases or falls below a certain threshold (applicable debt ratings), the available credit extended to the Company would either increase or decrease. A decline in the Company’s credit rating, in and of itself, would not cause the Company to be required to increase the level of its hedging collateral deposits (in the form of cash deposits, letters of credit or treasury debt instruments). If the Company’s outstanding derivative instrument contracts were in a liability position (or if the liability were larger) and/or the Company’s credit rating declined, then additional hedging collateral deposits may be required.  At June 30, 2017, the fair market value of the derivative financial instrument assets with a credit-risk related contingency feature was $42.5 million according to the Company’s internal model (discussed in Note 2 — Fair Value Measurements).  For its over-the-counter swap agreements and foreign currency forward contracts, no hedging collateral deposits were required to be posted by the Company at June 30, 2017.    
 
For its exchange traded futures contracts, the Company was required to post $2.1 million in hedging collateral deposits as of June 30, 2017. As these are exchange traded futures contracts, there are no specific credit-risk related contingency features. The Company posts or receives hedging collateral based on open positions and margin requirements it has with its counterparties.
 
The Company’s requirement to post hedging collateral deposits and the Company's right to receive hedging collateral deposits is based on the fair value determined by the Company’s counterparties, which may differ from the Company’s assessment of fair value. Hedging collateral deposits may also include closed derivative positions in which the broker has not cleared the cash from the account to offset the derivative liability. The Company records liabilities related to closed derivative positions in Other Accruals and Current Liabilities on the Consolidated Balance Sheet. These liabilities are relieved when the broker clears the cash from the hedging collateral deposit account. This is discussed in Note 1 under Hedging Collateral Deposits.
Income Taxes
Income Taxes
Income Taxes
 
The components of federal and state income taxes included in the Consolidated Statements of Income are as follows (in thousands): 
                                                         
Nine Months Ended 
 June 30,
                                                         
2017
 
2016
Current Income Taxes 
 

 
 

Federal                                              
$
29,832

 
$
(686
)
State                                                  
10,290

 
18,293

 
 
 
 
Deferred Income Taxes                                
 

 
 

Federal                                               
81,163

 
(184,419
)
State                                                    
23,910

 
(84,829
)
 
145,195

 
(251,641
)
Deferred Investment Tax Credit                            
(130
)
 
(261
)
 
 
 
 
Total Income Taxes                                      
$
145,065

 
$
(251,902
)
Presented as Follows:
 

 
 

Other Income
(130
)
 
(261
)
Income Tax Expense (Benefit)
145,195

 
(251,641
)
 
 
 
 
Total Income Taxes
$
145,065

 
$
(251,902
)


Total income taxes as reported differ from the amounts that were computed by applying the federal income tax rate to income (loss) before income taxes.  The following is a reconciliation of this difference (in thousands): 
 
Nine Months Ended 
 June 30,
 
2017
 
2016
U.S. Income (Loss) Before Income Taxes
$
382,971

 
$
(580,412
)
 
 

 
 

Income Tax Expense (Benefit), Computed at U.S. Federal Statutory Rate of 35%
$
134,040

 
$
(203,144
)
State Income Taxes (Benefit)
22,230

 
(43,248
)
Miscellaneous
(11,205
)
 
(5,510
)
 
 
 
 
Total Income Taxes
$
145,065

 
$
(251,902
)
Capitalization
Capitalization
Capitalization
 
Common Stock.  During the nine months ended June 30, 2017, the Company issued 31,632 original issue shares of common stock as a result of stock option and SARs exercises, 79,530 original issue shares of common stock for restricted stock units that vested and 43,484 original issue shares of common stock for performance shares that vested.  In addition, the Company issued 146,872 original issue shares of common stock for the Direct Stock Purchase and Dividend Reinvestment Plan and 78,327 original issue shares of common stock for the Company’s 401(k) plans.  The Company also issued 17,017 original issue shares of common stock to the non-employee directors of the Company who receive compensation under the Company’s 2009 Non-Employee Director Equity Compensation Plan, as partial consideration for the directors’ services during the nine months ended June 30, 2017.  Holders of stock options, SARs, restricted share awards or restricted stock units will often tender shares of common stock to the Company for payment of option exercise prices and/or applicable withholding taxes.  During the nine months ended June 30, 2017, 47,785 shares of common stock were tendered to the Company for such purposes.  The Company considers all shares tendered as cancelled shares restored to the status of authorized but unissued shares, in accordance with New Jersey law.
 
Current Portion of Long-Term Debt.    Current portion of Long-Term Debt at June 30, 2017 consists of $300.0 million of 6.50% notes that mature in April 2018.
Commitments And Contingencies
Commitments And Contingencies
Commitments and Contingencies
 
Environmental Matters.  The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment.  The Company has established procedures for the ongoing evaluation of its operations to identify potential environmental exposures and to comply with regulatory requirements.  It is the Company’s policy to accrue estimated environmental clean-up costs (investigation and remediation) when such amounts can reasonably be estimated and it is probable that the Company will be required to incur such costs. 
    
At June 30, 2017, the Company has estimated its remaining clean-up costs related to former manufactured gas plant sites and third party waste disposal sites will be approximately $3.2 million.  The Company expects to recover its environmental clean-up costs through rate recovery over a period of approximately 4 years.

The Company's estimated liability for clean-up costs discussed above includes a $1.8 million estimated liability related to the remediation of a former manufactured gas plant site located in New York. In February 2009, the Company received approval from the NYDEC of a Remedial Design Work Plan (RDWP) for this site. In October 2010, the Company submitted a RDWP addendum to conduct additional Preliminary Design Investigation field activities necessary to design a successful remediation. As a result of this work, the Company submitted to the NYDEC a proposal to amend the NYDEC’s Record of Decision remedy for the site.  In April 2013, the NYDEC approved the Company’s proposed amendment.  Final remedial design work for the site was completed, and active remedial work has also been completed. Restoration work is complete.  The Company continues to be responsible for future ongoing monitoring and long-term maintenance at the site.
 
The Company is currently not aware of any material additional exposure to environmental liabilities.  However, changes in environmental laws and regulations, new information or other factors could have an adverse financial impact on the Company.

Northern Access 2016 Project. On February 3, 2017, Supply Corporation and Empire received FERC approval of the Northern Access 2016 project described herein. On April 7, 2017, the NYDEC issued a Notice of Denial of the federal Clean Water Act Section 401 Water Quality Certification and other state stream and wetland permits for the New York portion of the project (the Water Quality Certification for the Pennsylvania portion of the project was received on January 27, 2017). On April 21, 2017, Supply Corporation and Empire filed a Petition for Review in the United States Court of Appeals for the Second Circuit of the NYDEC's Notice of Denial with respect to National Fuel's application for the Water Quality Certification, and on May 11, 2017, the Company commenced legal action in New York State Supreme Court challenging the NYDEC's actions with regard to various state permits. In light of the pending legal action, the Company has not yet determined a revised target in-service date. As a result of the decision of the NYDEC, Supply Corporation and Empire evaluated the capitalized project costs for impairment as of June 30, 2017 and determined that an impairment charge was not required. The evaluation considered probability weighted scenarios of undiscounted future net cash flows, including a scenario assuming successful resolution with the NYDEC and construction of the pipeline, as well as a scenario where the project does not proceed. Further developments or indicators of an unfavorable resolution could result in the impairment of a significant portion of the project costs, which totaled $73.7 million at June 30, 2017. The project costs are included within Property, Plant and Equipment and Deferred Charges on the Consolidated Balance Sheet.
 
Other.  The Company is involved in other litigation and regulatory matters arising in the normal course of business.  These other matters may include, for example, negligence claims and tax, regulatory or other governmental audits, inspections, investigations and other proceedings.  These matters may involve state and federal taxes, safety, compliance with regulations, rate base, cost of service and purchased gas cost issues, among other things.  While these other matters arising in the normal course of business could have a material effect on earnings and cash flows in the period in which they are resolved, an estimate of the possible loss or range of loss, if any, cannot be made at this time.
Business Segment Information
Business Segment Information
Business Segment Information    
 
The Company reports financial results for five segments: Exploration and Production, Pipeline and Storage, Gathering, Utility and Energy Marketing.  The division of the Company’s operations into reportable segments is based upon a combination of factors including differences in products and services, regulatory environment and geographic factors.
 
The data presented in the tables below reflect financial information for the segments and reconciliations to consolidated amounts.  As stated in the 2016 Form 10-K, the Company evaluates segment performance based on income before discontinued operations, extraordinary items and cumulative effects of changes in accounting (when applicable).  When these items are not applicable, the Company evaluates performance based on net income.  There have not been any changes in the basis of segmentation nor in the basis of measuring segment profit or loss from those used in the Company’s 2016 Form 10-K.  A listing of segment assets at June 30, 2017 and September 30, 2016 is shown in the tables below.  
Quarter Ended June 30, 2017 (Thousands)
 
 
 
 
 
 
 
Exploration and Production
Pipeline and Storage
Gathering
Utility
Energy Marketing
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$151,161
$50,049
$34
$121,900
$24,460
$347,604
$538
$226
$348,368
Intersegment Revenues
$—
$21,643
$26,853
$3,391
$565
$52,452
$—
$(52,452)
$—
Segment Profit: Net Income (Loss)
$30,123
$16,031
$10,107
$4,348
$(564)
$60,045
$(98)
$(233)
$59,714

 


 





Nine Months Ended June 30, 2017 (Thousands)
 
 
 
 
 
 
 
Exploration and Production
Pipeline and Storage
Gathering
Utility
Energy Marketing
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$471,646
$156,212
$86
$550,819
$112,210
$1,290,973
$1,311
$660
$1,292,944
Intersegment Revenues
$—
$66,389
$82,629
$11,314
$600
$160,932
$—
$(160,932)
$—
Segment Profit: Net Income (Loss)
$98,972
$54,656
$31,373
$51,103
$2,122
$238,226
$(498)
$178
$237,906
 
 
 
 
 
 
 
 
 
 
(Thousands)
Exploration and Production
Pipeline and Storage
Gathering
Utility
Energy Marketing
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Segment Assets:
 
 
 
 
 
 
 
 
 
At June 30, 2017
$1,394,320
$1,732,632
$568,115
$2,078,688
$67,613
$5,841,368
$76,560
$(50,421)
$5,867,507
At September 30, 2016
$1,323,081
$1,680,734
$534,259
$2,021,514
$63,392
$5,622,980
$77,138
$(63,731)
$5,636,387

Quarter Ended June 30, 2016 (Thousands)
 
 
 
 
 
 
 
Exploration and Production
Pipeline and Storage
Gathering
Utility
Energy Marketing
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$156,835
$52,998
$65
$106,568
$17,408
$333,874
$1,508
$235
$335,617
Intersegment Revenues
$—
$22,795
$25,417
$1,729
$231
$50,172
$—
$(50,172)
$—
Segment Profit: Net Income (Loss)
$(19,165)
$17,323
$9,473
$2,179
$(590)
$9,220
$430
$(1,364)
$8,286
Nine Months Ended June 30, 2016 (Thousands)
 
 
 
 
 
 
 
Exploration and Production
Pipeline and Storage
Gathering
Utility
Energy Marketing
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$452,583
$162,627
$303
$463,154
$77,827
$1,156,494
$2,775
$674
$1,159,943
Intersegment Revenues
$—
$68,272
$65,601
$10,757
$855
$145,485
$—
$(145,485)
$—
Segment Profit: Net Income (Loss)
$(469,586)
$59,794
$21,962
$52,745
$4,117
$(330,968)
$595
$1,863
$(328,510)
 
 
 
 
 
 
 
 
 
 
Retirement Plan And Other Post-Retirement Benefits
Retirement Plan and Other Post-Retirement Benefits
Retirement Plan and Other Post-Retirement Benefits
 
Components of Net Periodic Benefit Cost (in thousands):
 
 
Retirement Plan
 
Other Post-Retirement Benefits
Three Months Ended June 30,
2017
2016
 
2017
2016





 




Service Cost
$
2,992

$
2,928

 
$
612

$
583

Interest Cost
9,596

10,579

 
4,752

5,096

Expected Return on Plan Assets
(14,929
)
(14,842
)
 
(7,865
)
(7,883
)
Amortization of Prior Service Cost (Credit)
264

308

 
(107
)
(228
)
Amortization of Losses
10,672

8,062

 
4,604

1,382

Net Amortization and Deferral for Regulatory Purposes (Including Volumetric Adjustments) (1)
(3,193
)
14

 
1,302

3,936






 




Net Periodic Benefit Cost
$
5,402

$
7,049

 
$
3,298

$
2,886

 
 
 
 
 
 
 
Retirement Plan
 
Other Post-Retirement Benefits
Nine Months Ended June 30,
2017
2016
 
2017
2016
 
 
 
 
 
 
Service Cost
$
8,977

$
8,783

 
$
1,837

$
1,748

Interest Cost
28,788

31,736

 
14,256

15,289

Expected Return on Plan Assets
(44,788
)
(44,527
)
 
(23,594
)
(23,651
)
Amortization of Prior Service Cost (Credit)
793

925

 
(322
)
(684
)
Amortization of Losses
32,015

24,186

 
13,811

4,147

Net Amortization and Deferral for Regulatory Purposes (Including Volumetric Adjustments) (1)
3,577

7,531

 
6,404

14,657

 
 
 
 
 
 
Net Periodic Benefit Cost
$
29,362

$
28,634

 
$
12,392

$
11,506

 
 
 
 
 
 
(1) 
The Company’s policy is to record retirement plan and other post-retirement benefit costs in the Utility segment on a volumetric basis to reflect the fact that the Utility segment experiences higher throughput of natural gas in the winter months and lower throughput of natural gas in the summer months.
 
Employer Contributions.    During the nine months ended June 30, 2017, the Company contributed $15.1 million to its tax-qualified, noncontributory defined-benefit retirement plan (Retirement Plan) and $3.2 million to its VEBA trusts and 401(h) accounts for its other post-retirement benefits.  In the remainder of 2017, the Company may contribute up to $5.0 million to the Retirement Plan. In the remainder of 2017, the Company expects to contribute approximately $0.5 million to its VEBA trusts and 401(h) accounts.
Regulatory Matters
Regulatory Matters
Regulatory Matters
    
On April 28, 2016, Distribution Corporation commenced a rate case by filing proposed tariff amendments and supporting testimony requesting approval to increase its annual revenues by approximately $41.7 million. Distribution Corporation explained in the filing that its request for rate relief was necessitated by a revenue requirement driven primarily by rate base growth, higher operating expense and higher depreciation expense, among other things. On January 23, 2017, the administrative law judge assigned to the proceeding issued a recommended decision (RD) in the case. The RD, as revised on January 26, 2017, recommended a rate increase designed to provide additional annual revenues of $8.5 million, an equity ratio, subject to update of 42.3% based on the Company’s equity ratio, and a cost of equity, subject to update of 8.6%. On April 20, 2017, the NYPSC issued an Order adopting some provisions of the RD and modifying or rejecting others. The Order provides for an annual rate increase of $5.9 million. The rate increase became effective May 1, 2017. The Order further provides for a return on equity of 8.7%, and established an equity ratio of 42.9%. The Order also directs the implementation of an earnings sharing mechanism to be in place beginning on April 1, 2018, only if the Company does not file for new rates to become effective on or before October 1, 2018.
On July 28, 2017, Distribution Corporation filed an appeal with New York State Supreme Court, Albany County, seeking review of the rate order. The appeal contends that portions of the rate order should be invalidated because they fail to meet the applicable legal standard for agency decisions. The Company cannot predict the outcome of the appeal at this time.
FERC Rate Proceedings
Supply Corporation currently has no active rate case on file. Supply Corporation's current rate settlement requires a rate case filing no later than December 31, 2019 and prohibits any party from seeking to initiate a rate case proceeding before September 30, 2017.
Empire currently has no active rate case on file. Empire’s current rate settlement requires a rate case filing no later than July 1, 2021.
Summary Of Significant Accounting Policies (Policy)
Principles of Consolidation.  The Company consolidates all entities in which it has a controlling financial interest.  All significant intercompany balances and transactions are eliminated. The Company uses proportionate consolidation when accounting for drilling arrangements related to oil and gas producing properties accounted for under the full cost method of accounting.
 
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
Reclassification. Certain prior year amounts have been reclassified to conform with current year presentation.
Earnings for Interim Periods.  The Company, in its opinion, has included all adjustments (which consist of only normally recurring adjustments, unless otherwise disclosed in this Form 10-Q) that are necessary for a fair statement of the results of operations for the reported periods. The consolidated financial statements and notes thereto, included herein, should be read in conjunction with the financial statements and notes for the years ended September 30, 2016, 2015 and 2014 that are included in the Company's 2016 Form 10-K.  The consolidated financial statements for the year ended September 30, 2017 will be audited by the Company's independent registered public accounting firm after the end of the fiscal year.
 
The earnings for the nine months ended June 30, 2017 should not be taken as a prediction of earnings for the entire fiscal year ending September 30, 2017.  Most of the business of the Utility and Energy Marketing segments is seasonal in nature and is influenced by weather conditions.  Due to the seasonal nature of the heating business in the Utility and Energy Marketing segments, earnings during the winter months normally represent a substantial part of the earnings that those segments are expected to achieve for the entire fiscal year.  The Company’s business segments are discussed more fully in Note 7 – Business Segment Information.
Consolidated Statements of Cash Flows.  For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of generally three months or less to be cash equivalents.
Hedging Collateral Deposits.  This is an account title for cash held in margin accounts funded by the Company to serve as collateral for hedging positions.  In accordance with its accounting policy, the Company does not offset hedging collateral deposits paid or received against related derivative financial instruments liability or asset balances.
Gas Stored Underground.  In the Utility segment, gas stored underground is carried at lower of cost or net realizable value, on a LIFO method.  Gas stored underground normally declines during the first and second quarters of the year and is replenished during the third and fourth quarters.  In the Utility segment, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets under the caption “Other Accruals and Current Liabilities.”  Such reserve, which amounted to $7.7 million at June 30, 2017, is reduced to zero by September 30 of each year as the inventory is replenished.
Property, Plant and Equipment.  In the Company’s Exploration and Production segment, oil and gas property acquisition, exploration and development costs are capitalized under the full cost method of accounting. Under this methodology, all costs associated with property acquisition, exploration and development activities are capitalized, including internal costs directly identified with acquisition, exploration and development activities. The internal costs that are capitalized do not include any costs related to production, general corporate overhead, or similar activities. The Company does not recognize any gain or loss on the sale or other disposition of oil and gas properties unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center.
 
Capitalized costs include costs related to unproved properties, which are excluded from amortization until proved reserves are found or it is determined that the unproved properties are impaired.  Such costs amounted to $100.6 million and $135.3 million at June 30, 2017 and September 30, 2016, respectively.  All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. The amount of any impairment is transferred to the pool of capitalized costs being amortized.
 
Capitalized costs are subject to the SEC full cost ceiling test. The ceiling test, which is performed each quarter, determines a limit, or ceiling, on the amount of property acquisition, exploration and development costs that can be capitalized. The ceiling under this test represents (a) the present value of estimated future net cash flows, excluding future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, using a discount factor of 10%, which is computed by applying prices of oil and gas (as adjusted for hedging) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet, less estimated future expenditures, plus (b) the cost of unevaluated properties not being depleted, less (c) income tax effects related to the differences between the book and tax basis of the properties. The natural gas and oil prices used to calculate the full cost ceiling are based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the twelve-month period prior to the end of the reporting period. If capitalized costs, net of accumulated depreciation, depletion and amortization and related deferred income taxes, exceed the ceiling at the end of any quarter, a permanent impairment is required to be charged to earnings in that quarter.  At June 30, 2017, the ceiling exceeded the book value of the oil and gas properties by approximately $304.8 million. In adjusting estimated future cash flows for hedging under the ceiling test at June 30, 2017, estimated future net cash flows were increased by $49.8 million.

On December 1, 2015, Seneca and IOG - CRV Marcellus, LLC (IOG), an affiliate of IOG Capital, LP, and funds managed by affiliates of Fortress Investment Group, LLC, executed a joint development agreement that allows IOG to participate in the development of certain oil and gas interests owned by Seneca in Elk, McKean and Cameron Counties, Pennsylvania. On June 13, 2016, Seneca and IOG executed an extension of the joint development agreement. Under the terms of the extended agreement, Seneca and IOG will jointly participate in a program to develop up to 75 Marcellus wells, with Seneca serving as program operator. IOG will hold an 80% working interest in all of the joint development wells. In total, IOG is expected to fund approximately $325 million for its 80% working interest in the 75 joint development wells. Of this amount, IOG has funded $262.5 million as of June 30, 2017, which includes $163.9 million of cash ($137.3 million in fiscal 2016 and $26.6 million in fiscal 2017) that Seneca had received in recognition of IOG funding that is due to Seneca for costs previously incurred to develop a portion of the first 75 joint development wells. The cash proceeds were recorded by Seneca as a $163.9 million reduction of property, plant and equipment. The remainder funded joint development expenditures. As the fee-owner of the property’s mineral rights, Seneca retains a 7.5% royalty interest and the remaining 20% working interest (26% net revenue interest) in 56 of the joint development wells. In the remaining 19 wells, Seneca retains a 20% working and net revenue interest. Seneca’s working interest under the agreement will increase to 85% after IOG achieves a 15% internal rate of return.
Accumulated Other Comprehensive Income (Loss).  The components of Accumulated Other Comprehensive Income (Loss) and changes for the nine months ended June 30, 2017 and 2016, net of related tax effect, are as follows (amounts in parentheses indicate debits) (in thousands): 
 
Gains and Losses on Derivative Financial Instruments
Gains and Losses on Securities Available for Sale
Funded Status of the Pension and Other Post-Retirement Benefit Plans
Total
Three Months Ended June 30, 2017
 
 
 
 
Balance at April 1, 2017
$
36,257

$
6,128

$
(76,476
)
$
(34,091
)
Other Comprehensive Gains and Losses Before Reclassifications
10,641

905


11,546

Amounts Reclassified From Other Comprehensive Income (Loss)
(10,759
)


(10,759
)
Balance at June 30, 2017
$
36,139

$
7,033

$
(76,476
)
$
(33,304
)
Nine Months Ended June 30, 2017
 
 
 
 
Balance at October 1, 2016
$
64,782

$
6,054

$
(76,476
)
$
(5,640
)
Other Comprehensive Gains and Losses Before Reclassifications
5,937

1,448


7,385

Amounts Reclassified From Other Comprehensive Income (Loss)
(34,580
)
(469
)

(35,049
)
Balance at June 30, 2017
$
36,139

$
7,033

$
(76,476
)
$
(33,304
)
Three Months Ended June 30, 2016
 
 
 
 
Balance at April 1, 2016
$
146,671

$
5,309

$
(69,794
)
$
82,186

Other Comprehensive Gains and Losses Before Reclassifications
(40,842
)
254


(40,588
)
Amounts Reclassified From Other Comprehensive Income (Loss)
(33,859
)


(33,859
)
Balance at June 30, 2016
$
71,970

$
5,563

$
(69,794
)
$
7,739

Nine Months Ended June 30, 2016
 
 
 
 
Balance at October 1, 2015
$
157,197

$
5,969

$
(69,794
)
$
93,372

Other Comprehensive Gains and Losses Before Reclassifications
23,432

(181
)

23,251

Amounts Reclassified From Other Comprehensive Income (Loss)
(108,659
)
(225
)

(108,884
)
Balance at June 30, 2016
$
71,970

$
5,563

$
(69,794
)
$
7,739

 
 
 
 
 

Reclassifications Out of Accumulated Other Comprehensive Income (Loss).  The details about the reclassification adjustments out of accumulated other comprehensive loss for the nine months ended June 30, 2017 and 2016 are as follows (amounts in parentheses indicate debits to the income statement) (in thousands):
Details About Accumulated Other Comprehensive Income (Loss) Components
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
Affected Line Item in the Statement Where Net Income (Loss) is Presented
 
Three Months Ended June 30,
Nine Months Ended June 30,
 
 
2017
2016
2017
2016
 
Gains (Losses) on Derivative Financial Instrument Cash Flow Hedges:
 
 
 
 
 
     Commodity Contracts

$18,600


$58,354


$62,030


$172,596

Operating Revenues
     Commodity Contracts
21

70

(1,938
)
4,520

Purchased Gas
     Foreign Currency Contracts
(169
)
(51
)
(451
)
(337
)
Operation and Maintenance Expense
Gains (Losses) on Securities Available for Sale


741

388

Other Income
 
18,452

58,373

60,382

177,167

Total Before Income Tax
 
(7,693
)
(24,514
)
(25,333
)
(68,283
)
Income Tax Expense
 

$10,759


$33,859


$35,049


$108,884

Net of Tax


Other Current Assets.  The components of the Company’s Other Current Assets are as follows (in thousands):
                            
At June 30, 2017
 
At September 30, 2016
 
 
 
 
Prepayments
$
11,396

 
$
10,919

Prepaid Property and Other Taxes
11,180

 
13,138

Federal Income Taxes Receivable

 
11,758

State Income Taxes Receivable
9,658

 
3,961

Fair Values of Firm Commitments
1,473

 
3,962

Regulatory Assets
17,145

 
15,616

 
$
50,852

 
$
59,354

Other Accruals and Current Liabilities.  The components of the Company’s Other Accruals and Current Liabilities are as follows (in thousands):
                            
At June 30, 2017
 
At September 30, 2016
 
 
 
 
Accrued Capital Expenditures
$
28,129

 
$
26,796

Regulatory Liabilities
34,552

 
14,725

Reserve for Gas Replacement
7,667

 

Federal Income Taxes Payable
2,573

 

Other
34,180

 
32,909

 
$
107,101

 
$
74,430

Earnings Per Common Share.  Basic earnings per common share is computed by dividing income or loss by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  For purposes of determining earnings per common share, the potentially dilutive securities the Company has outstanding are stock options, SARs, restricted stock units and performance shares.  For the quarter and nine months ended June 30, 2017, the diluted weighted average shares outstanding shown on the Consolidated Statements of Income reflects the potential dilution as a result of these securities as determined using the Treasury Stock Method.  Stock options, SARs, restricted stock units and performance shares that are antidilutive are excluded from the calculation of diluted earnings per common share. There were 172,500 securities and 157,638 securities excluded as being antidilutive for the quarter and nine months ended June 30, 2017, respectively. There were 346,090 securities excluded as being antidilutive for the quarter ended June 30, 2016. As the Company recognized a net loss for the nine months ended June 30, 2016, the aforementioned potentially dilutive securities, amounting to 414,092 securities, were not recognized in the diluted earnings per share calculation for the nine months ended June 30, 2016.
 
Stock-Based Compensation.  The Company granted 184,148 performance shares during the nine months ended June 30, 2017. The weighted average fair value of such performance shares was $56.39 per share for the nine months ended June 30, 2017. Performance shares are an award constituting units denominated in common stock of the Company, the number of which may be adjusted over a performance cycle based upon the extent to which performance goals have been satisfied.  Earned performance shares may be distributed in the form of shares of common stock of the Company, an equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company. The performance shares do not entitle the participant to receive dividends during the vesting period.
 
Half of the performance shares granted during the nine months ended June 30, 2017 must meet a performance goal related to relative return on capital over the performance cycle of October 1, 2016 to September 30, 2019.  The performance goal over the performance cycle is the Company’s total return on capital relative to the total return on capital of other companies in a group selected by the Compensation Committee (“Report Group”).  Total return on capital for a given company means the average of the Report Group companies’ returns on capital for each twelve month period corresponding to each of the Company’s fiscal years during the performance cycle, based on data reported for the Report Group companies in the Bloomberg database.  The number of these performance shares that will vest and be paid will depend upon the Company’s performance relative to the Report Group and not upon the absolute level of return achieved by the Company.  The fair value of these performance shares is calculated by multiplying the expected number of shares that will be issued by the average market price of Company common stock on the date of grant reduced by the present value of forgone dividends over the vesting term of the award.  The fair value is recorded as compensation expense over the vesting term of the award.  The other half of the performance shares granted during the nine months ended June 30, 2017 must meet a performance goal related to relative total shareholder return over the performance cycle of October 1, 2016 to September 30, 2019.  The performance goal over the performance cycle is the Company’s three-year total shareholder return relative to the three-year total shareholder return of the other companies in the Report Group.  Three-year shareholder return for a given company will be based on the data reported for that company (with the starting and ending stock prices over the performance cycle calculated as the average closing stock price for the prior calendar month and with dividends reinvested in that company’s securities at each ex-dividend date) in the Bloomberg database.  The number of these total shareholder return performance shares ("TSR performance shares") that will vest and be paid will depend upon the Company’s performance relative to the Report Group and not upon the absolute level of return achieved by the Company.  The fair value price at the date of grant for the TSR performance shares is determined using a Monte Carlo simulation technique, which includes a reduction in value for the present value of forgone dividends over the vesting term of the award.  This price is multiplied by the number of TSR performance shares awarded, the result of which is recorded as compensation expense over the vesting term of the award.
 
The Company granted 87,143 non-performance based restricted stock units during the nine months ended June 30, 2017.  The weighted average fair value of such non-performance based restricted stock units was $52.13 per share for the nine months ended June 30, 2017.  Restricted stock units represent the right to receive shares of common stock of the Company (or the equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company) at the end of a specified time period. These non-performance based restricted stock units do not entitle the participant to receive dividends during the vesting period. The accounting for non-performance based restricted stock units is the same as the accounting for restricted share awards, except that the fair value at the date of grant of the restricted stock units must be reduced by the present value of forgone dividends over the vesting term of the award.
 
New Authoritative Accounting and Financial Reporting Guidance. In May 2014, the FASB issued authoritative guidance regarding revenue recognition. The authoritative guidance provides a single, comprehensive revenue recognition model for all contracts with customers to improve comparability. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The original effective date of this authoritative guidance was as of the Company's first quarter of fiscal 2018. However, the FASB has delayed the effective date of the new revenue standard by one year, and the guidance will now be effective as of the Company's first quarter of fiscal 2019. Working towards this implementation date, the Company is currently evaluating the guidance and the various issues identified by industry based revenue recognition task forces. Recent task force guidance suggests that the Company's revenue recognition policies may not change significantly although the Company is still assessing the impact. The Company will need to enhance its financial statement disclosures to comply with the new authoritative guidance.
In February 2016, the FASB issued authoritative guidance requiring organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by all leases, regardless of whether they are considered to be capital leases or operating leases. The FASB’s previous authoritative guidance required organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by capital leases while excluding operating leases from balance sheet recognition. The new authoritative guidance will be effective as of the Company’s first quarter of fiscal 2020, with early adoption permitted. The Company does not anticipate early adoption and is currently evaluating the provisions of the revised guidance.
In March 2016, the FASB issued authoritative guidance simplifying several aspects of the accounting for stock-based compensation. The Company adopted this guidance effective as of October 1, 2016, recognizing a cumulative effect adjustment that increased retained earnings by $31.9 million. The cumulative effect represents the tax benefit of previously unrecognized tax deductions in excess of stock compensation recorded for financial reporting purposes. On a prospective basis, the tax effect of all future differences between stock compensation recorded for financial reporting purposes and actual tax deductions for stock compensation will be recognized upon vesting or settlement as income tax expense or benefit in the income statement. From a statement of cash flows perspective, the tax benefits relating to differences between stock compensation recorded for financial reporting purposes and actual tax deductions for stock compensation are now included in cash provided by operating activities instead of cash provided by financing activities. The changes to the statement of cash flows have been applied prospectively and prior periods have not been adjusted.
In March 2017, the FASB issued authoritative guidance related to the presentation of net periodic pension cost and net periodic postretirement benefit cost. The new guidance requires segregation of the service cost component from the other components of net periodic pension cost and net periodic postretirement benefit cost for financial reporting purposes. The service cost component is to be presented on the income statement in the same line items as other compensation costs included within Operating Expenses and the other components of net periodic pension cost and net periodic postretirement benefit cost are to be presented on the income statement below the subtotal labeled Operating Income (Loss). Under this guidance, the service cost component shall be the only component eligible to be capitalized as part of the cost of inventory or property, plant and equipment. The new guidance will be effective as of the Company’s first quarter of fiscal 2019, with early adoption permitted. The Company is currently evaluating the interaction of this authoritative guidance with the various regulatory provisions concerning pension and postretirement benefit costs in the Company’s Utility and Pipeline and Storage segments.
Summary Of Significant Accounting Policies (Tables)
The components of Accumulated Other Comprehensive Income (Loss) and changes for the nine months ended June 30, 2017 and 2016, net of related tax effect, are as follows (amounts in parentheses indicate debits) (in thousands): 
 
Gains and Losses on Derivative Financial Instruments
Gains and Losses on Securities Available for Sale
Funded Status of the Pension and Other Post-Retirement Benefit Plans
Total
Three Months Ended June 30, 2017
 
 
 
 
Balance at April 1, 2017
$
36,257

$
6,128

$
(76,476
)
$
(34,091
)
Other Comprehensive Gains and Losses Before Reclassifications
10,641

905


11,546

Amounts Reclassified From Other Comprehensive Income (Loss)
(10,759
)


(10,759
)
Balance at June 30, 2017
$
36,139

$
7,033

$
(76,476
)
$
(33,304
)
Nine Months Ended June 30, 2017
 
 
 
 
Balance at October 1, 2016
$
64,782

$
6,054

$
(76,476
)
$
(5,640
)
Other Comprehensive Gains and Losses Before Reclassifications
5,937

1,448


7,385

Amounts Reclassified From Other Comprehensive Income (Loss)
(34,580
)
(469
)

(35,049
)
Balance at June 30, 2017
$
36,139

$
7,033

$
(76,476
)
$
(33,304
)
Three Months Ended June 30, 2016
 
 
 
 
Balance at April 1, 2016
$
146,671

$
5,309

$
(69,794
)
$
82,186

Other Comprehensive Gains and Losses Before Reclassifications
(40,842
)
254


(40,588
)
Amounts Reclassified From Other Comprehensive Income (Loss)
(33,859
)


(33,859
)
Balance at June 30, 2016
$
71,970

$
5,563

$
(69,794
)
$
7,739

Nine Months Ended June 30, 2016
 
 
 
 
Balance at October 1, 2015
$
157,197

$
5,969

$
(69,794
)
$
93,372

Other Comprehensive Gains and Losses Before Reclassifications
23,432

(181
)

23,251

Amounts Reclassified From Other Comprehensive Income (Loss)
(108,659
)
(225
)

(108,884
)
Balance at June 30, 2016
$
71,970

$
5,563

$
(69,794
)
$
7,739

 
 
 
 
 

The details about the reclassification adjustments out of accumulated other comprehensive loss for the nine months ended June 30, 2017 and 2016 are as follows (amounts in parentheses indicate debits to the income statement) (in thousands):
Details About Accumulated Other Comprehensive Income (Loss) Components
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss)
Affected Line Item in the Statement Where Net Income (Loss) is Presented
 
Three Months Ended June 30,
Nine Months Ended June 30,
 
 
2017
2016
2017
2016
 
Gains (Losses) on Derivative Financial Instrument Cash Flow Hedges:
 
 
 
 
 
     Commodity Contracts

$18,600


$58,354


$62,030


$172,596

Operating Revenues
     Commodity Contracts
21

70

(1,938
)
4,520

Purchased Gas
     Foreign Currency Contracts
(169
)
(51
)
(451
)
(337
)
Operation and Maintenance Expense
Gains (Losses) on Securities Available for Sale


741

388

Other Income
 
18,452

58,373

60,382

177,167

Total Before Income Tax
 
(7,693
)
(24,514
)
(25,333
)
(68,283
)
Income Tax Expense
 

$10,759


$33,859


$35,049


$108,884

Net of Tax

The components of the Company’s Other Current Assets are as follows (in thousands):
                            
At June 30, 2017
 
At September 30, 2016
 
 
 
 
Prepayments
$
11,396

 
$
10,919

Prepaid Property and Other Taxes
11,180

 
13,138

Federal Income Taxes Receivable

 
11,758

State Income Taxes Receivable
9,658

 
3,961

Fair Values of Firm Commitments
1,473

 
3,962

Regulatory Assets
17,145

 
15,616

 
$
50,852

 
$
59,354

The components of the Company’s Other Accruals and Current Liabilities are as follows (in thousands):
                            
At June 30, 2017
 
At September 30, 2016
 
 
 
 
Accrued Capital Expenditures
$
28,129

 
$
26,796

Regulatory Liabilities
34,552

 
14,725

Reserve for Gas Replacement
7,667

 

Federal Income Taxes Payable
2,573

 

Other
34,180

 
32,909

 
$
107,101

 
$
74,430

Fair Value Measurements (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table sets forth, by level within the fair value hierarchy, the Company's financial assets and liabilities (as applicable) that were accounted for at fair value on a recurring basis as of June 30, 2017 and September 30, 2016.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair value presentation for over the counter swaps combines gas and oil swaps because a significant number of the counterparties enter into both gas and oil swap agreements with the Company.  
Recurring Fair Value Measures
At fair value as of June 30, 2017
(Thousands of Dollars)   
Level 1
 
Level 2
 
Level 3
 
Netting Adjustments(1)
 
Total(1)
Assets:
 

 
 

 
 

 
 

 
 

Cash Equivalents – Money Market Mutual Funds
$
257,721

 
$

 
$

 
$

 
$
257,721

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
1,354

 

 

 
(1,125
)
 
229

Over the Counter Swaps – Gas and Oil

 
67,890

 

 
(3,895
)
 
63,995

Foreign Currency Contracts

 
336

 

 
(1,524
)
 
(1,188
)
Other Investments:
 

 
 

 
 

 
 

 
 

Balanced Equity Mutual Fund
36,107

 

 

 

 
36,107

Fixed Income Mutual Fund
45,547

 

 

 

 
45,547

Common Stock – Financial Services Industry
3,859

 

 

 

 
3,859

Hedging Collateral Deposits
2,142

 

 

 

 
2,142

Total                                           
$
346,730

 
$
68,226

 
$

 
$
(6,544
)
 
$
408,412

 
 
 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

 
 

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
$
1,125

 
$

 
$

 
$
(1,125
)
 
$

Over the Counter Swaps – Gas and Oil

 
4,817

 

 
(3,895
)
 
922

Foreign Currency Contracts

 
1,524

 

 
(1,524
)
 

Total
$
1,125

 
$
6,341

 
$

 
$
(6,544
)
 
$
922

Total Net Assets/(Liabilities)
$
345,605

 
$
61,885

 
$

 
$

 
$
407,490

 
Recurring Fair Value Measures
At fair value as of September 30, 2016
(Thousands of Dollars)   
Level 1
 
Level 2
 
Level 3
 
Netting Adjustments(1)
 
Total(1)
Assets:
 

 
 

 
 

 
 

 
 

Cash Equivalents – Money Market Mutual Funds
$
114,895

 
$

 
$

 
$

 
$
114,895

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
2,623

 

 

 
(2,276
)
 
347

Over the Counter Swaps – Gas and Oil

 
119,654

 

 
(3,860
)
 
115,794

Foreign Currency Contracts

 

 

 
(2,337
)
 
(2,337
)
Other Investments:
 

 
 

 
 

 
 

 
 

Balanced Equity Mutual Fund
36,658

 

 

 

 
36,658

Fixed Income Mutual Fund
31,395

 

 

 

 
31,395

Common Stock – Financial Services Industry
2,902

 

 

 

 
2,902

Hedging Collateral Deposits
1,484

 

 

 

 
1,484

Total                                           
$
189,957

 
$
119,654

 
$

 
$
(8,473
)
 
$
301,138

 
 
 
 
 
 
 
 
 
 
Liabilities:
 

 
 

 
 

 
 

 
 

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
$
2,276

 
$

 
$

 
$
(2,276
)
 
$

Over the Counter Swaps – Gas and Oil

 
5,322

 

 
(3,860
)
 
1,462

     Foreign Currency Contracts

 
2,337

 

 
(2,337
)
 

Total
$
2,276

 
$
7,659

 
$

 
$
(8,473
)
 
$
1,462

Total Net Assets/(Liabilities)
$
187,681

 
$
111,995

 
$

 
$

 
$
299,676


(1) 
Netting Adjustments represent the impact of legally-enforceable master netting arrangements that allow the Company to net gain and loss positions held with the same counterparties. The net asset or net liability for each counterparty is recorded as an asset or liability on the Company’s balance sheet.
Financial Instruments (Tables)
Based on these criteria, the fair market value of long-term debt, including current portion, was as follows (in thousands): 
 
June 30, 2017
 
September 30, 2016
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
Long-Term Debt
$
2,087,954

 
$
2,220,588

 
$
2,086,252

 
$
2,255,562

The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the
Three Months Ended June 30, 2017 and 2016 (Thousands of Dollars)
Derivatives in Cash Flow Hedging Relationships
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion) for the Three Months Ended June 30,
Location of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion) for the Three Months Ended June 30,
Location of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) for the Three Months Ended June 30,
 
2017
2016
 
2017
2016
 
2017
2016
Commodity Contracts
$
17,342

$
(68,914
)
Operating Revenue
$
18,600

$
58,354

Operating Revenue
$
1,040

$
87

Commodity Contracts
240

(921
)
Purchased Gas
21

70

Not Applicable


Foreign Currency Contracts
651

(528
)
Operation and Maintenance Expense
(169
)
(51
)
Not Applicable


Total
$
18,233

$
(70,363
)
 
$
18,452

$
58,373

 
$
1,040

$
87

The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the
Nine Months Ended June 30, 2017 and 2016 (Thousands of Dollars)
Derivatives in Cash Flow Hedging Relationships
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion) for the Nine Months Ended June 30,
Location of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion) for the Nine Months Ended June 30,
Location of Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) for the Nine Months Ended June 30,
 
2017
2016
 
2017
2016
 
2017
2016
Commodity Contracts
$
9,382

$
27,304

Operating Revenue
$
62,030

$
172,596

Operating Revenue
$
940

$
255

Commodity Contracts
(252
)
1,078

Purchased Gas
(1,938
)
4,520

Not Applicable


Foreign Currency Contracts
699

395

Operation and Maintenance Expense
(451
)
(337
)
Not Applicable


Total
$
9,829

$
28,777

 
$
59,641

$
176,779

 
$
940

$
255

 
 
 
 
 
 
 
 
 

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk completely offset each other in current earnings, as shown below.

Derivatives in Fair Value Hedging Relationships
Location of Gain or (Loss) on Derivative and Hedged Item Recognized in the Consolidated Statement of Income
Amount of Gain or (Loss) on Derivative Recognized in the Consolidated Statement of Income for the
Nine Months Ended June 30, 2017
(In Thousands)
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income for the
Nine Months Ended June 30, 2017
(In Thousands)
Commodity Contracts
Operating Revenues
$
1,317

$
(1,317
)
Commodity Contracts
Purchased Gas
$
427

$
(427
)
 
 
$
1,744

$
(1,744
)
 
Income Taxes (Tables)
The components of federal and state income taxes included in the Consolidated Statements of Income are as follows (in thousands): 
                                                         
Nine Months Ended 
 June 30,
                                                         
2017
 
2016
Current Income Taxes 
 

 
 

Federal                                              
$
29,832

 
$
(686
)
State                                                  
10,290

 
18,293

 
 
 
 
Deferred Income Taxes                                
 

 
 

Federal                                               
81,163

 
(184,419
)
State                                                    
23,910

 
(84,829
)
 
145,195

 
(251,641
)
Deferred Investment Tax Credit                            
(130
)
 
(261
)
 
 
 
 
Total Income Taxes                                      
$
145,065

 
$
(251,902
)
Presented as Follows:
 

 
 

Other Income
(130
)
 
(261
)
Income Tax Expense (Benefit)
145,195

 
(251,641
)
 
 
 
 
Total Income Taxes
$
145,065

 
$
(251,902
)
Total income taxes as reported differ from the amounts that were computed by applying the federal income tax rate to income (loss) before income taxes.  The following is a reconciliation of this difference (in thousands): 
 
Nine Months Ended 
 June 30,
 
2017
 
2016
U.S. Income (Loss) Before Income Taxes
$
382,971

 
$
(580,412
)
 
 

 
 

Income Tax Expense (Benefit), Computed at U.S. Federal Statutory Rate of 35%
$
134,040

 
$
(203,144
)
State Income Taxes (Benefit)
22,230

 
(43,248
)
Miscellaneous
(11,205
)
 
(5,510
)
 
 
 
 
Total Income Taxes
$
145,065

 
$
(251,902
)
Business Segment Information (Tables)
Financial Segment Information By Segment
Quarter Ended June 30, 2017 (Thousands)
 
 
 
 
 
 
 
Exploration and Production
Pipeline and Storage
Gathering
Utility
Energy Marketing
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$151,161
$50,049
$34
$121,900
$24,460
$347,604
$538
$226
$348,368
Intersegment Revenues
$—
$21,643
$26,853
$3,391
$565
$52,452
$—
$(52,452)
$—
Segment Profit: Net Income (Loss)
$30,123
$16,031
$10,107
$4,348
$(564)
$60,045
$(98)
$(233)
$59,714

 


 





Nine Months Ended June 30, 2017 (Thousands)
 
 
 
 
 
 
 
Exploration and Production
Pipeline and Storage
Gathering
Utility
Energy Marketing
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$471,646
$156,212
$86
$550,819
$112,210
$1,290,973
$1,311
$660
$1,292,944
Intersegment Revenues
$—
$66,389
$82,629
$11,314
$600
$160,932
$—
$(160,932)
$—
Segment Profit: Net Income (Loss)
$98,972
$54,656
$31,373
$51,103
$2,122
$238,226
$(498)
$178
$237,906
 
 
 
 
 
 
 
 
 
 
(Thousands)
Exploration and Production
Pipeline and Storage
Gathering
Utility
Energy Marketing
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Segment Assets:
 
 
 
 
 
 
 
 
 
At June 30, 2017
$1,394,320
$1,732,632
$568,115
$2,078,688
$67,613
$5,841,368
$76,560
$(50,421)
$5,867,507
At September 30, 2016
$1,323,081
$1,680,734
$534,259
$2,021,514
$63,392
$5,622,980
$77,138
$(63,731)
$5,636,387

Quarter Ended June 30, 2016 (Thousands)
 
 
 
 
 
 
 
Exploration and Production
Pipeline and Storage
Gathering
Utility
Energy Marketing
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$156,835
$52,998
$65
$106,568
$17,408
$333,874
$1,508
$235
$335,617
Intersegment Revenues
$—
$22,795
$25,417
$1,729
$231
$50,172
$—
$(50,172)
$—
Segment Profit: Net Income (Loss)
$(19,165)
$17,323
$9,473
$2,179
$(590)
$9,220
$430
$(1,364)
$8,286
Nine Months Ended June 30, 2016 (Thousands)
 
 
 
 
 
 
 
Exploration and Production
Pipeline and Storage
Gathering
Utility
Energy Marketing
Total Reportable Segments
All Other
Corporate and Intersegment Eliminations
Total Consolidated
Revenue from External Customers
$452,583
$162,627
$303
$463,154
$77,827
$1,156,494
$2,775
$674
$1,159,943
Intersegment Revenues
$—
$68,272
$65,601
$10,757
$855
$145,485
$—
$(145,485)
$—
Segment Profit: Net Income (Loss)
$(469,586)
$59,794
$21,962
$52,745
$4,117
$(330,968)
$595
$1,863
$(328,510)
 
 
 
 
 
 
 
 
 
 
Retirement Plan And Other Post-Retirement Benefits (Tables)
Components of Net Periodic Benefit Cost
Components of Net Periodic Benefit Cost (in thousands):
 
 
Retirement Plan
 
Other Post-Retirement Benefits
Three Months Ended June 30,
2017
2016
 
2017
2016





 




Service Cost
$
2,992

$
2,928

 
$
612

$
583

Interest Cost
9,596

10,579

 
4,752

5,096

Expected Return on Plan Assets
(14,929
)
(14,842
)
 
(7,865
)
(7,883
)
Amortization of Prior Service Cost (Credit)
264

308

 
(107
)
(228
)
Amortization of Losses
10,672

8,062

 
4,604

1,382

Net Amortization and Deferral for Regulatory Purposes (Including Volumetric Adjustments) (1)
(3,193
)
14

 
1,302

3,936






 




Net Periodic Benefit Cost
$
5,402

$
7,049

 
$
3,298

$
2,886

 
 
 
 
 
 
 
Retirement Plan
 
Other Post-Retirement Benefits
Nine Months Ended June 30,
2017
2016
 
2017
2016
 
 
 
 
 
 
Service Cost
$
8,977

$
8,783

 
$
1,837

$
1,748

Interest Cost
28,788

31,736

 
14,256

15,289

Expected Return on Plan Assets
(44,788
)
(44,527
)
 
(23,594
)
(23,651
)
Amortization of Prior Service Cost (Credit)
793

925

 
(322
)
(684
)
Amortization of Losses
32,015

24,186

 
13,811

4,147

Net Amortization and Deferral for Regulatory Purposes (Including Volumetric Adjustments) (1)
3,577

7,531

 
6,404

14,657

 
 
 
 
 
 
Net Periodic Benefit Cost
$
29,362

$
28,634

 
$
12,392

$
11,506

 
 
 
 
 
 
(1) 
The Company’s policy is to record retirement plan and other post-retirement benefit costs in the Utility segment on a volumetric basis to reflect the fact that the Utility segment experiences higher throughput of natural gas in the winter months and lower throughput of natural gas in the summer months.
Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Sep. 30, 2016
Jun. 30, 2017
Seneca [Member]
Sep. 30, 2016
Seneca [Member]
Dec. 1, 2015
IOG-CRV Marcellus, LLC [Member]
Jun. 30, 2017
Reserve For Gas Replacement [Member]
Sep. 30, 2016
Reserve For Gas Replacement [Member]
Jun. 30, 2017
Non-performance Based Restricted Stock Units [Member]
Jun. 30, 2017
Performance Shares [Member]
Sep. 30, 2017
Subsequent Event [Member]
Reserve For Gas Replacement [Member]
Jun. 13, 2016
26 Percent Net Revenue Interest [Member]
Seneca [Member]
Dec. 1, 2015
After Internal Rate of Return Achieved [Member]
Seneca [Member]
Jun. 13, 2016
Extended Agreement [Member]
Seneca [Member]
Jun. 30, 2017
Extended Agreement [Member]
IOG-CRV Marcellus, LLC [Member]
Jun. 13, 2016
Extended Agreement [Member]
IOG-CRV Marcellus, LLC [Member]
Jun. 13, 2016
20 Percent Net Revenue Interest [Member]
Seneca [Member]
Summary Of Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative Effect of Adoption of Authoritative Guidance for Stock-Based Compensation
$ 31,900,000 
 
$ 31,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gas stored underground
(17,793,000)
 
(17,793,000)
 
(34,332,000)
 
 
 
7,667,000 
 
 
 
 
 
 
 
 
Capitalized costs of unproved properties excluded from amortization
 
 
100,600,000 
 
135,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Full cost ceiling test discount factor
10.00% 
 
10.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount Full Cost Ceiling Exceeds Book Value Of Oil And Gas Properties
304,800,000 
 
304,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Impairment of Oil and Gas Producing Properties
82,658,000 
915,552,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase estimated future net cash flows
49,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wells to be Developed
 
 
 
 
 
 
 
 
 
 
 
 
 
56 
 
 
 
75 
19 
Partner Amount Funded to Develop Joint Wells
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
262,500,000 
 
 
Cumulative Net Proceeds from Sale of Oil and Gas Producing Properties
 
 
 
 
 
163,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Partner Working and Net Revenue Interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20.00% 
 
 
 
Royalty Interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.50% 
 
 
 
Partner Commitment to Develop Joint Wells
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
325,000,000 
 
Net Proceeds from Sale of Oil and Gas Producing Properties
 
 
26,554,000 
115,235,000 
 
26,600,000 
137,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
Partner Working Interest In Joint Wells
 
 
 
 
 
 
 
80.00% 
 
 
 
 
 
 
85.00% 
20.00% 
 
 
 
Partner Net Revenue Interest in Joint Wells
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26.00% 
 
 
 
Antidilutive securities
172,500 
346,090 
157,638 
414,092 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share based compensation other than options grants in period
 
 
 
 
 
 
 
 
 
 
87,143 
184,148 
 
 
 
 
 
 
 
Granted in fiscal year, weighted average grant date fair value
 
 
 
 
 
 
 
 
 
 
$ 52.13 
$ 56.39 
 
 
 
 
 
 
 
Reduction in Property, Plant and Equipment
 
 
 
 
 
$ 163,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Internal Rate of Return
 
 
 
 
 
 
 
15.00% 
 
 
 
 
 
 
 
 
 
 
 
Summary Of Significant Accounting Policies (Components Of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Accumulated Other Comprehensive Income [Roll Forward]
 
 
 
 
Balance at Beginning of Period
$ (34,091)
$ 82,186 
$ (5,640)
$ 93,372 
Other Comprehensive Gains and Losses Before Reclassification
11,546 
(40,588)
7,385 
23,251 
Amounts Reclassified From Other Comprehensive Income (Loss)
(10,759)
(33,859)
(35,049)
(108,884)
Balance at End of Period
(33,304)
7,739 
(33,304)
7,739 
Gains And Losses On Derivative Financial Instruments [Member]
 
 
 
 
Accumulated Other Comprehensive Income [Roll Forward]
 
 
 
 
Balance at Beginning of Period
36,257 
146,671 
64,782 
157,197 
Other Comprehensive Gains and Losses Before Reclassification
10,641 
(40,842)
5,937 
23,432 
Amounts Reclassified From Other Comprehensive Income (Loss)
(10,759)
(33,859)
(34,580)
(108,659)
Balance at End of Period
36,139 
71,970 
36,139 
71,970 
Gains And Losses On Securities Available For Sale [Member]
 
 
 
 
Accumulated Other Comprehensive Income [Roll Forward]
 
 
 
 
Balance at Beginning of Period
6,128 
5,309 
6,054 
5,969 
Other Comprehensive Gains and Losses Before Reclassification
905 
254 
1,448 
(181)
Amounts Reclassified From Other Comprehensive Income (Loss)
(469)
(225)
Balance at End of Period
7,033 
5,563 
7,033 
5,563 
Funded Status Of The Pension And Other Post-Retirement Benefit Plans [Member]
 
 
 
 
Accumulated Other Comprehensive Income [Roll Forward]
 
 
 
 
Balance at Beginning of Period
(76,476)
(69,794)
(76,476)
(69,794)
Other Comprehensive Gains and Losses Before Reclassification
Amounts Reclassified From Other Comprehensive Income (Loss)
Balance at End of Period
$ (76,476)
$ (69,794)
$ (76,476)
$ (69,794)
Summary Of Significant Accounting Policies (Reclassification Out Of Accumulated Other Comprehensive Income (Loss)) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Operating Revenues
$ 348,368 
$ 335,617 
$ 1,292,944 
$ 1,159,943 
Purchased Gas
46,135 
23,477 
264,349 
147,168 
Other Income
1,370 
1,519 
4,728 
7,173 
Income Before Income Taxes
95,506 
17,026 
383,101 
(580,151)
Income Tax Expense
(35,792)
(8,740)
(145,195)
251,641 
Net Income (Loss) Available for Common Stock
59,714 
8,286 
237,906 
(328,510)
Amount Of Gain Or (Loss) Reclassified From Accumulated Other Comprehensive Income (Loss) [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Income Before Income Taxes
18,452 
58,373 
60,382 
177,167 
Income Tax Expense
(7,693)
(24,514)
(25,333)
(68,283)
Net Income (Loss) Available for Common Stock
10,759 
33,859 
35,049 
108,884 
Amount Of Gain Or (Loss) Reclassified From Accumulated Other Comprehensive Income (Loss) [Member] |
Gains And Losses On Securities Available For Sale [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Other Income
741 
388 
Amount Of Gain Or (Loss) Reclassified From Accumulated Other Comprehensive Income (Loss) [Member] |
Commodity Contracts [Member] |
Gains And Losses On Derivative Financial Instruments [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Operating Revenues
18,600 
58,354 
62,030 
172,596 
Purchased Gas
21 
70 
(1,938)
4,520 
Foreign Currency Contracts [Member] |
Amount Of Gain Or (Loss) Reclassified From Accumulated Other Comprehensive Income (Loss) [Member] |
Gains And Losses On Derivative Financial Instruments [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Operation and Maintenance
$ (169)
$ (51)
$ (451)
$ (337)
Summary Of Significant Accounting Policies (Components Of Other Current Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Sep. 30, 2016
Summary Of Significant Accounting Policies [Line Items]
 
 
Prepayments
$ 11,396 
$ 10,919 
Prepaid Property and Other Taxes
11,180 
13,138 
Fair Values of Firm Commitments
1,473 
3,962 
Regulatory Assets
17,145 
15,616 
Other Current Assets
50,852 
59,354 
Federal [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Income Taxes Receivable
11,758 
State [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Income Taxes Receivable
$ 9,658 
$ 3,961 
Summary Of Significant Accounting Policies (Schedule Of Other Accruals And Current Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Sep. 30, 2016
Summary Of Significant Accounting Policies [Line Items]
 
 
Regulatory Liabilities
$ 34,552 
$ 14,725 
Reserve for Gas Replacement
(17,793)
(34,332)
Other
34,180 
32,909 
Other Accruals and Current Liabilities
107,101 
74,430 
Accrued Capital Expenditures [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Other
28,129 
26,796 
Reserve For Gas Replacement [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Reserve for Gas Replacement
7,667 
Federal [Member]
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
Income Taxes Payable
$ 2,573 
$ 0 
Fair Value Measurements (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Sep. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
$ 2,142 1
$ 1,484 1
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
2,142 
1,484 
Fair Value, Inputs, Level 1 [Member] |
Futures [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Hedging collateral deposits
$ 2,100 
$ 1,500 
Fair Value Measurements (Recurring Fair Value Measures Of Assets And Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Sep. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
$ 257,721 1
$ 114,895 1
Hedging Collateral Deposits
2,142 1
1,484 1
Total Assets
408,412 1
301,138 1
Total Liabilities
922 1
1,462 1
Total Net Assets/(Liabilities)
407,490 1
299,676 1
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
229 1
347 1
Derivative Liability
1
1
Over The Counter Swaps - Gas And Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
63,995 1
115,794 1
Derivative Liability
922 1
1,462 1
Foreign Currency Contracts [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
(1,188)1
(2,337)1
Derivative Liability
1
1
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
36,107 1
36,658 1
Fixed Income Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
45,547 1
31,395 1
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
3,859 1
2,902 1
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
257,721 
114,895 
Hedging Collateral Deposits
2,142 
1,484 
Total Assets
346,730 
189,957 
Total Liabilities
1,125 
2,276 
Total Net Assets/(Liabilities)
345,605 
187,681 
Fair Value, Inputs, Level 1 [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
1,354 
2,623 
Derivative Liability
1,125 
2,276 
Fair Value, Inputs, Level 1 [Member] |
Over The Counter Swaps - Gas And Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
Derivative Liability
Fair Value, Inputs, Level 1 [Member] |
Foreign Currency Contracts [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
Derivative Liability
Fair Value, Inputs, Level 1 [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
36,107 
36,658 
Fair Value, Inputs, Level 1 [Member] |
Fixed Income Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
45,547 
31,395 
Fair Value, Inputs, Level 1 [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
3,859 
2,902 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
Hedging Collateral Deposits
Total Assets
68,226 
119,654 
Total Liabilities
6,341 
7,659 
Total Net Assets/(Liabilities)
61,885 
111,995 
Fair Value, Inputs, Level 2 [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
Derivative Liability
Fair Value, Inputs, Level 2 [Member] |
Over The Counter Swaps - Gas And Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
67,890 
119,654 
Derivative Liability
4,817 
5,322 
Fair Value, Inputs, Level 2 [Member] |
Foreign Currency Contracts [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
336 
Derivative Liability
1,524 
2,337 
Fair Value, Inputs, Level 2 [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
Fair Value, Inputs, Level 2 [Member] |
Fixed Income Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
Fair Value, Inputs, Level 2 [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
Hedging Collateral Deposits
Total Assets
Total Liabilities
Total Net Assets/(Liabilities)
Fair Value, Inputs, Level 3 [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
Derivative Liability
Fair Value, Inputs, Level 3 [Member] |
Over The Counter Swaps - Gas And Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
Derivative Liability
Fair Value, Inputs, Level 3 [Member] |
Foreign Currency Contracts [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
Derivative Liability
Fair Value, Inputs, Level 3 [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
Fair Value, Inputs, Level 3 [Member] |
Fixed Income Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
Fair Value, Inputs, Level 3 [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
Netting Adjustments [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Cash Equivalents - Money Market Mutual Funds
1
1
Hedging Collateral Deposits
1
1
Total Assets
(6,544)1
(8,473)1
Total Liabilities
(6,544)1
(8,473)1
Total Net Assets/(Liabilities)
1
1
Netting Adjustments [Member] |
Commodity Futures Contracts - Gas [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
(1,125)1
(2,276)1
Derivative Liability
(1,125)1
(2,276)1
Netting Adjustments [Member] |
Over The Counter Swaps - Gas And Oil [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
(3,895)1
(3,860)1
Derivative Liability
(3,895)1
(3,860)1
Netting Adjustments [Member] |
Foreign Currency Contracts [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Derivative Asset
(1,524)1
(2,337)1
Derivative Liability
(1,524)1
(2,337)1
Netting Adjustments [Member] |
Balanced Equity Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
1
1
Netting Adjustments [Member] |
Fixed Income Mutual Fund [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
1
1
Netting Adjustments [Member] |
Common Stock - Financial Services Industry [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
 
 
Other Investments
$ 0 1
$ 0 1
Financial Instruments (Narrative) (Details) (USD $)
9 Months Ended
Jun. 30, 2017
Sep. 30, 2016
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Cash surrender value of life insurance
$ 41,000,000 
$ 39,700,000 
Net hedging gains/losses in accumulated other comprehensive income (loss)
62,000,000 
 
After tax net hedging gains (losses) in accumulated other comprehensive income (loss)
36,100,000 
 
Pre-Tax Net Hedging Gains (Losses) Reclassified Within Twelve Months
39,300,000 
 
After Tax Net Hedging Gains (Losses) Reclassified Within Twelve Months
22,900,000 
 
Fair market value of derivative asset with a credit-risk related contingency
42,500,000 
 
Hedging collateral deposits
2,142,000 1
1,484,000 1
Over the Counter Swaps and Foreign Currency Forward Contracts [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Number of counterparties in which the company holds over-the-counter swap positions
16 
 
Number of counterparties in net gain position
16 
 
Credit risk exposure per counterparty
3,900,000 
 
Maximum credit risk exposure per counterparty
8,900,000 
 
Collateral Received by the Company
 
Hedging collateral deposits
 
Fixed Price Purchase Commitments MMCf [Member] |
Energy Marketing [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Nonmonetary notional amount of price risk fair value hedge derivatives, natural gas
100 
 
Withdrawal of Storage Gas Mmcf [Member] |
Energy Marketing [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Nonmonetary notional amount of price risk fair value hedge derivatives, natural gas
900 
 
Fair Value Hedges MMCf [Member] |
Energy Marketing [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Nonmonetary notional amount of price risk fair value hedge derivatives, natural gas
17,000 
 
Fixed Price Sales Commitments MMCf [Member] |
Energy Marketing [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Nonmonetary notional amount of price risk fair value hedge derivatives, natural gas
16,000 
 
Natural Gas MMCf [Member] |
Cash Flow Hedges Short Position [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Nonmonetary notional amount of price risk cash flow hedge derivatives, natural gas
126,600 
 
Natural Gas MMCf [Member] |
Cash Flow Hedges Long Position [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Nonmonetary notional amount of price risk cash flow hedge derivatives, natural gas
1,100 
 
Crude Oil Bbls [Member] |
Cash Flow Hedges Short Position [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Nonmonetary notional amount of price risk cash flow hedge derivatives, crude oil
2,631,000 
 
Exchange Traded Futures Contracts [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Hedging collateral deposits
2,100,000 
 
Equity Mutual Fund [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Fair value
36,100,000 
36,700,000 
Gross unrealized gain
8,600,000 
7,900,000 
Fixed Income Mutual Fund [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Fair value
45,500,000 
31,400,000 
Gross unrealized gain
 
100,000 
Gross unrealized loss
100,000 
 
Insurance Company Stock [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Fair value
3,900,000 
2,900,000 
Gross unrealized gain
2,600,000 
1,600,000 
Foreign Currency Contracts [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Derivative, Notional Amount
$ 88,200,000 
 
Credit Risk Related Contingency Feature [Member] |
Over the Counter Swaps and Foreign Currency Forward Contracts [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Number of counterparties with a common credit-risk related contingency
14 
 
Financial Instruments (Long-Term Debt) (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Sep. 30, 2016
Financial Instruments, Owned, at Fair Value [Abstract]
 
 
Carrying Amount
$ 2,087,954 
$ 2,086,252 
Fair Value
$ 2,220,588 
$ 2,255,562 
Financial Instruments (Schedule Of Derivative Financial Instruments Designated And Qualifying As Cash Flow Hedges On The Statement Of Financial Performance) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion)
$ 18,233 
$ (70,363)
$ 9,829 
$ 28,777 
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
18,452 
58,373 
59,641 
176,779 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
1,040 
87 
940 
255 
Foreign Currency Contracts [Member] |
Operation and Maintenance Expense [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion)
651 
(528)
699 
395 
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
(169)
(51)
(451)
(337)
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Commodity Contracts [Member] |
Operating Revenues [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion)
17,342 
(68,914)
9,382 
27,304 
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
18,600 
58,354 
62,030 
172,596 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
1,040 
87 
940 
255 
Commodity Contracts [Member] |
Purchased Gas [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on the Consolidated Statement of Comprehensive Income (Loss) (Effective Portion)
240 
(921)
(252)
1,078 
Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income (Effective Portion)
21 
70 
(1,938)
4,520 
Derivative Gain or (Loss) Recognized in the Consolidated Statement of Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
$ 0 
$ 0 
$ 0 
$ 0 
Financial Instruments (Schedule Of Derivatives And Hedged Items In Fair Value Hedging Relationships) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Jun. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Gain or (Loss) on Derivative Recognized in the Consolidated Statement of Income
$ 1,744 
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
(1,744)
Operating Revenues [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Gain or (Loss) on Derivative Recognized in the Consolidated Statement of Income
1,317 
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
(1,317)
Purchased Gas [Member]
 
Derivative Instruments, Gain (Loss) [Line Items]
 
Amount of Gain or (Loss) on Derivative Recognized in the Consolidated Statement of Income
427 
Amount of Gain or (Loss) on the Hedged Item Recognized in the Consolidated Statement of Income
$ (427)
Income Taxes (Components Of Federal And State Income Taxes Included In The Consolidated Statements Of Income) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Current Income Taxes [Abstract]
 
 
 
 
Federal
 
 
$ 29,832 
$ (686)
State
 
 
10,290 
18,293 
Deferred Income Taxes [Abstract]
 
 
 
 
Federal
 
 
81,163 
(184,419)
State
 
 
23,910 
(84,829)
Income Tax Expense (Benefit)
35,792 
8,740 
145,195 
(251,641)
Deferred Investment Tax Credit
 
 
(130)
(261)
Total Income Taxes
 
 
145,065 
(251,902)
Presented as Follows [Abstract]
 
 
 
 
Other Income
 
 
(130)
(261)
Income Tax Expense (Benefit)
$ 35,792 
$ 8,740 
$ 145,195 
$ (251,641)
Income Taxes (Schedule Of Income Tax Reconciliation By Applying Federal Income Tax Rate) (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Income Tax Disclosure [Abstract]
 
 
U.S. Income (Loss) Before Income Taxes
$ 382,971 
$ (580,412)
Income Tax Expense (Benefit), Computed at U.S. Federal Statutory Rate of 35%
134,040 
(203,144)
State Income Taxes (Benefit)
22,230 
(43,248)
Miscellaneous
(11,205)
(5,510)
Total Income Taxes
$ 145,065 
$ (251,902)
Federal Statutory Rate
35.00% 
35.00% 
Capitalization (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
9 Months Ended
Jun. 30, 2017
Sep. 30, 2016
Debt Instrument [Line Items]
 
 
Common stock shares issued due to stock option exercises
31,632 
 
Issue shares of common stock for the Direct Stock Purchase and Dividend Reinvestment Plan
146,872 
 
Issue shares of common stock for the 401(k) plans
78,327 
 
Shares tendered
47,785 
 
Current Portion of Long-Term Debt
$ 300,000 
$ 0 
Long-term debt, interest rate
6.50% 
 
Restricted Stock Units [Member]
 
 
Debt Instrument [Line Items]
 
 
Common stock issued
79,530 
 
Performance Shares [Member]
 
 
Debt Instrument [Line Items]
 
 
Common stock issued
43,484 
 
Board Of Directors [Member]
 
 
Debt Instrument [Line Items]
 
 
Common stock issued
17,017 
 
Commitments And Contingencies (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Jun. 30, 2017
Site Contingency [Line Items]
 
Estimated minimum liability for environmental remediation
$ 3.2 
Rate recovery period
4 years 
Project Costs
73.7 
Former Manufactured Gas Plant Site [Member]
 
Site Contingency [Line Items]
 
Estimated minimum liability for environmental remediation
$ 1.8 
Business Segment Information (Narrative) (Details)
9 Months Ended
Jun. 30, 2017
segment
Segment Reporting [Abstract]
 
Number of reportable segments
Business Segment Information (Financial Segment Information By Segment) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Sep. 30, 2016
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
$ 59,714 
$ 8,286 
$ 237,906 
$ (328,510)
 
Segment Assets
5,867,507 
 
5,867,507 
 
5,636,387 
Revenue from External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
348,368 
335,617 
1,292,944 
1,159,943 
 
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
 
Exploration And Production [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
30,123 
(19,165)
98,972 
(469,586)
 
Segment Assets
1,394,320 
 
1,394,320 
 
1,323,081 
Exploration And Production [Member] |
Revenue from External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
151,161 
156,835 
471,646 
452,583 
 
Exploration And Production [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
 
Pipeline And Storage [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
16,031 
17,323 
54,656 
59,794 
 
Segment Assets
1,732,632 
 
1,732,632 
 
1,680,734 
Pipeline And Storage [Member] |
Revenue from External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
50,049 
52,998 
156,212 
162,627 
 
Pipeline And Storage [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
21,643 
22,795 
66,389 
68,272 
 
Gathering [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
10,107 
9,473 
31,373 
21,962 
 
Segment Assets
568,115 
 
568,115 
 
534,259 
Gathering [Member] |
Revenue from External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
34 
65 
86 
303 
 
Gathering [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
26,853 
25,417 
82,629 
65,601 
 
Utility [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
4,348 
2,179 
51,103 
52,745 
 
Segment Assets
2,078,688 
 
2,078,688 
 
2,021,514 
Utility [Member] |
Revenue from External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
121,900 
106,568 
550,819 
463,154 
 
Utility [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
3,391 
1,729 
11,314 
10,757 
 
Energy Marketing [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
(564)
(590)
2,122 
4,117 
 
Segment Assets
67,613 
 
67,613 
 
63,392 
Energy Marketing [Member] |
Revenue from External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
24,460 
17,408 
112,210 
77,827 
 
Energy Marketing [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
565 
231 
600 
855 
 
Total Reportable Segments [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
60,045 
9,220 
238,226 
(330,968)
 
Segment Assets
5,841,368 
 
5,841,368 
 
5,622,980 
Total Reportable Segments [Member] |
Revenue from External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
347,604 
333,874 
1,290,973 
1,156,494 
 
Total Reportable Segments [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
52,452 
50,172 
160,932 
145,485 
 
All Other [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
(98)
430 
(498)
595 
 
Segment Assets
76,560 
 
76,560 
 
77,138 
All Other [Member] |
Revenue from External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
538 
1,508 
1,311 
2,775 
 
All Other [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
 
Corporate And Intersegment Eliminations [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Segment Profit: Net Income (Loss)
(233)
(1,364)
178 
1,863 
 
Segment Assets
(50,421)
 
(50,421)
 
(63,731)
Corporate And Intersegment Eliminations [Member] |
Revenue from External Customers [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
226 
235 
660 
674 
 
Corporate And Intersegment Eliminations [Member] |
Intersegment Revenues [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenue
$ (52,452)
$ (50,172)
$ (160,932)
$ (145,485)
 
Retirement Plan And Other Post-Retirement Benefits (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Jun. 30, 2017
Retirement Plan [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Company's contributions
$ 15.1 
VEBA Trusts And 401(h) Accounts [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Company's contributions
3.2 
Estimated future contributions in remainder of fiscal year
0.5 
Maximum [Member] |
Retirement Plan [Member]
 
Defined Benefit Plan Disclosure [Line Items]
 
Estimated future contributions in remainder of fiscal year
$ 5.0 
Retirement Plan And Other Post-Retirement Benefits (Components Of Net Periodic Benefit Cost) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Retirement Plan [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service Cost
$ 2,992 
$ 2,928 
$ 8,977 
$ 8,783 
Interest Cost
9,596 
10,579 
28,788 
31,736 
Expected Return on Plan Assets
(14,929)
(14,842)
(44,788)
(44,527)
Amortization of Prior Service Cost (Credit)
264 
308 
793 
925 
Amortization of Losses
10,672 
8,062 
32,015 
24,186 
Net Amortization and Deferral For Regulatory Purposes (Including Volumetric Adjustments)
(3,193)1
14 1
3,577 1
7,531 1
Net Periodic Benefit Cost
5,402 
7,049 
29,362 
28,634 
Other Post-Retirement Benefit Plans, Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service Cost
612 
583 
1,837 
1,748 
Interest Cost
4,752 
5,096 
14,256 
15,289 
Expected Return on Plan Assets
(7,865)
(7,883)
(23,594)
(23,651)
Amortization of Prior Service Cost (Credit)
(107)
(228)
(322)
(684)
Amortization of Losses
4,604 
1,382 
13,811 
4,147 
Net Amortization and Deferral For Regulatory Purposes (Including Volumetric Adjustments)
1,302 1
3,936 1
6,404 1
14,657 1
Net Periodic Benefit Cost
$ 3,298 
$ 2,886 
$ 12,392 
$ 11,506 
Regulatory Matters (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Jun. 30, 2017
Regulatory Matters [Line Items]
 
Amount of requested increase to annual revenues
$ 41.7 
Recommended rate increase to annual revenues
8.5 
Recommended Equity Ratio
42.30% 
Recommended Cost of Equity
8.60% 
Approved Rate Increase
$ 5.9 
Approved Cost of Equity
8.70% 
Approved Equity Ratio
42.90%