Company Separately Announced Fiscal 2021
Guidance and Long-Term NFEPS and Dividend Growth Rate
Today, New Jersey Resources (NYSE: NJR) reported results for the
fourth quarter and fiscal 2020. Highlights included:
- Consolidated net income of $193.9 million for fiscal 2020,
compared with $169.5 million in fiscal 2019
- Consolidated net financial earnings (NFE), a non-GAAP financial
measure, of $196.2 million for fiscal 2020, or $2.07 per share,
compared with $175.0 million, or $1.96 per share, in fiscal
2019
- Increased annual dividend by 6.4 percent to $1.33 per
share
- NJNG filed a proposal with the BPU to significantly expand its
energy efficiency offerings
- NJR Clean Energy Ventures (CEV) placed eight commercial solar
installations into service and acquired one operating asset, adding
60 megawatts (MW) of total installed capacity in fiscal 2020
Fiscal 2020 net income totaled $193.9 million, or $2.05 per
share, compared with $169.5 million, or $1.90 per share, in fiscal
2019. Fourth-quarter net income totaled $43.3 million, or $0.45 per
share, compared with $18.1 million, or $0.20 per share, during the
same period last year.
Fiscal 2020 NFE totaled $196.2 million, or $2.07 per share,
in-line with the previously announced guidance range, compared with
$175.0 million, or $1.96 per share, in fiscal 2019. Fourth-quarter
NFE totaled $54.7 million, or $0.57 per share, compared with $26.0
million, or $0.29 per share, during the same period last year.
"Thanks to the performance of our talented and dedicated team
through an unprecedented global pandemic, we were able to deliver
solid results and achieve NFE in-line with our guidance range for
fiscal 2020," said Steve Westhoven, President and CEO of New Jersey
Resources. "As reflected in our results, we are committed to
serving our customers with safe, reliable, clean energy and
reaching our sustainability goals through our diversified portfolio
of energy infrastructure investments. With the new financial growth
targets that we announced in connection with our Analyst Day today,
including raising long-term NFEPS and dividend growth rates, our
outlook for the future is strong."
Key Performance Metrics
Three Months Ended
Twelve Months Ended
September 30,
September 30,
($ in Thousands)
2020
2019
2020
2019
Net income
$
43,272
$
18,086
$
193,919
$
169,505
Basic EPS
$
0.45
$
0.20
$
2.05
$
1.90
Net financial earnings
$
54,721
$
25,956
$
196,245
$
174,960
Basic net financial earnings per share
$
0.57
$
0.29
$
2.07
$
1.96
A reconciliation of net income to NFE for the three and twelve
months ended September 30, 2020, and 2019, is provided below.
Three Months Ended
Twelve Months Ended
September 30,
September 30,
(Thousands)
2020
2019
2020
2019
Net income
$
43,272
$
18,086
$
193,919
$
169,505
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
12,183
28,234
(9,644)
2,881
Tax effect
(2,893)
(6,745)
2,296
(711)
Effects of economic hedging related to
natural gas inventory
2,216
(7,764)
12,690
4,309
Tax effect
(527)
1,845
(3,016)
(1,024)
Net income to NFE tax adjustment
470
(7,700)
—
—
Net financial earnings
$
54,721
$
25,956
$
196,245
$
174,960
Weighted Average Shares
Outstanding
Basic
95,933
89,983
94,798
89,242
Diluted
96,259
90,366
95,107
89,616
Basic earnings per share
$
0.45
$
0.20
$
2.05
$
1.90
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
0.13
0.31
(0.10)
0.03
Tax effect
(0.02)
(0.06)
0.02
(0.01)
Effects of economic hedging related to
natural gas inventory
0.02
(0.09)
0.13
0.05
Tax effect
(0.01)
0.02
(0.03)
(0.01)
Net income to NFE tax adjustment
—
(0.09)
—
—
Basic net financial earnings per
share
$
0.57
$
0.29
$
2.07
$
1.96
NFE is a financial measure not calculated in accordance with
Generally Accepted Accounting Principles (GAAP) of the United
States. It is a measure of earnings based on eliminating timing
differences surrounding the recognition of certain gains or losses,
net of applicable tax adjustments, to effectively match the
earnings effects of the economic hedges with the physical sale of
natural gas, Solar Renewable Energy Certificates (SRECs) and
foreign currency contracts. NFE/net financial loss eliminates the
impact of volatility to GAAP earnings associated with unrealized
gains and losses on derivative instruments in the current period.
For further discussion of this financial measure, please see the
explanation below under “Non-GAAP Financial Information.”
GAAP requires us, during the interim periods, to estimate our
annual effective tax rate and use this rate to calculate the
year-to-date tax provision. We also determine an annual estimated
effective tax rate for NFE purposes and calculate a quarterly tax
adjustment based on the differences between our forecasted net
income and our forecasted NFE for the fiscal year.
A table detailing net financial (loss) earnings for the three
and twelve months ended September 30, 2020, and 2019, is provided
below.
Net Financial (Loss) Earnings by
Business Unit
Three Months Ended
Twelve Months Ended
September 30,
September 30,
(Thousands)
2020
2019
2020
2019
New Jersey Natural Gas
$
(15,258)
$
(18,402)
$
126,902
$
78,062
Clean Energy Ventures
55,840
52,676
53,023
77,473
Storage and Transportation
7,434
3,488
18,311
14,689
Energy Services
1,638
(10,726)
(7,873)
2,918
Home Services and Other
5,109
(1,021)
5,784
1,911
Subtotal
54,763
26,015
196,147
175,053
Eliminations
(42)
(59)
98
(93)
Total
$
54,721
$
25,956
$
196,245
$
174,960
COVID-19 Impact Update:
NJR has not made any significant changes to capital programs due
to COVID-19. NJNG operations and delivery of natural gas to its
approximately 558,000 customers has largely been unaffected by the
ongoing pandemic. NJR will continue to closely monitor the
potential impacts of the pandemic and will adjust its plan
accordingly to ensure the delivery of essential services to
customers, while maintaining the safety and health of its
employees, customers and communities.
Analyst Day Information:
In a separate announcement, the Company today provided its
fiscal 2021 guidance and long-term financial targets. NJR will host
a virtual Analyst Day today at 8:30 a.m. ET and the senior
leadership team will discuss the Company's strategic value
proposition and long-term financial growth targets, as well as its
year-end fiscal 2020 earnings results. The video webcast of the
virtual Analyst Day, including a copy of the presentation, and a
question and answer session, will be broadcast over the internet
and can be accessed at
https://investor.njresources.com/events-and-presentations/default.aspx.
For those unable to listen to the webcast, an archived version will
be available at the same location.
Regulated Business Update:
New Jersey Natural Gas (NJNG)
NJNG reported fiscal 2020 NFE of $126.9 million, compared to NFE
of $78.1 million during fiscal 2019. Fourth-quarter net financial
loss was $15.3 million, compared with net financial loss of $18.4
million during the same period in fiscal 2019. The increase in both
periods was due primarily to increased base rates from NJNG's rate
case settlement in November 2019 and lower operating and
maintenance (O&M) expenses.
Customer Growth:
- NJNG added 8,349 new customers during fiscal 2020, compared
with 9,711 in fiscal 2019. The lower customer growth was due to the
effects of the COVID-19 pandemic.
Infrastructure Update:
- NJNG's Infrastructure Investment Program (IIP) is a
five-year, $150 million program approved by the New Jersey Board of
Public Utilities (BPU) on October 28, 2020. The IIP consists of a
series of infrastructure projects designed to support the enhanced
safety and reliability of NJNG's natural gas distribution system.
The original filing included an information technology (IT) upgrade
component, which NJNG voluntarily withdrew and will seek to recover
associated costs in future rate case proceedings.
- The Southern Reliability Link (SRL) will diversify
supply to our customers by providing a new intrastate feed into the
southern end of NJNG’s distribution system. SRL began construction
in the first quarter of fiscal 2019 and is projected to be placed
in service in 2021. The total cost of SRL is expected to be in the
range of $250 million to $270 million. Construction continues on
SRL with over 80 percent of the project complete.
-
NJNG has submitted its response to the New Jersey Department of
Environmental Protection (DEP) regarding the suspension of permits
for certain sections of SRL's construction. Following a
comprehensive review process of our drilling plans for the
remainder of the project, the DEP reinstated our permits, allowing
us to fully proceed with our construction plans.
- Safety Acceleration and Facilities Enhancement (SAFE) II
is the five-year, $158 million program approved by the BPU in
September 2016 to replace the remaining unprotected bare steel main
and associated services in NJNG’s distribution system. In fiscal
2020, NJNG invested $56.5 million to replace 70 miles of
unprotected bare steel main and services.
- The New Jersey Reinvestment in System Enhancement (NJ
RISE) program is a $102.5 million investment program comprised
of six projects related to storm hardening and mitigation. During
the fourth-quarter of fiscal 2020, construction began on a new
regulator station, the final portion of the North Seaside
Reinforcement project. Construction is expected to be completed by
the end of calendar year 2020.
- The SAFE II and NJ RISE programs are eligible for annual rate
increases. On March 31, 2020, NJNG filed its annual petition with
the BPU, requesting a rate increase of approximately $7.4 million
for the recovery of the related capital costs through June 30,
2020. NJNG updated the filing in July 2020 to reflect the actual
results through June 30, 2020, reducing the rate increase to $7.1
million. The BPU approved the filing and the new rates became
effective on October 1, 2020.
BGSS Incentive Programs:
BGSS incentive programs contributed $9.5 million to utility
gross margin in fiscal 2020, compared with $8.4 million during the
same period in fiscal 2019. The higher results were due to improved
margins in off-system sales and storage incentive programs, which
were partially offset by a decrease in capacity release volume.
Energy-Efficiency Programs:
The SAVEGREEN Project®, NJNG’s energy-efficiency program,
invested $30.8 million during fiscal 2020 to help customers with
energy-efficiency upgrades for their homes and businesses. NJNG
recovered $10.3 million of its SAVEGREEN investment in fiscal
2020.
- On September 25, 2020, NJNG filed a petition with the BPU for
an additional three-year SAVEGREEN program consisting of
approximately $127 million of direct investment, $113 million in
financing options, and $23 million in O&M expenses, effective
July 1, 2021.
Storage and Transportation
Storage and Transportation, formerly known as the Midstream
reporting segment, reported fiscal 2020 NFE of $18.3 million,
compared with $14.7 million during fiscal 2019. Fourth-quarter NFE
were $7.4 million, compared with $3.5 million during the same
period in fiscal 2019. The increase in NFE for both periods was due
to incremental operating income from Leaf River and Adelphia
Gateway, partially offset by increased O&M and interest expense
related to the acquisition and operations of those assets.
Infrastructure Updates:
- Adelphia Gateway - On October 5, 2020, Adelphia Gateway
received a Partial Notice to Proceed from the Federal Energy
Regulatory Commission (FERC) to begin construction. The
construction includes the conversion of 50 miles of the existing
84-mile pipeline from oil to natural gas to bring much-needed
supply to constrained markets in the Philadelphia region.
- PennEast - On January 30, 2020, PennEast filed with FERC
an abbreviated application for amendment of its Certificate of
Public Convenience and Necessity, requesting a phased-in approach
to the PennEast project. The first phase of the project would
include construction of the pipeline in Pennsylvania with
interconnections within the state. Also, on January 30, 2020, FERC
issued a declaratory order related to the ruling by the Third
Circuit, supporting PennEast.
-
On February 18, 2020, PennEast filed a petition for writ of
certiorari with the U.S. Supreme Court seeking to overturn the
September 10, 2019 Third Circuit decision vacating the New Jersey
Federal District Court's December 13, 2018 condemnation order
blocking pipeline construction.
-
On June 29, 2020, the U.S. Supreme Court invited the U.S.
Solicitor General to express his views regarding the issues
presented in the petition for writ of certiorari.
-
On August 3, 2020, FERC issued a positive environmental
assessment for Phase I of the project, finding no significant
environmental impact.
Unregulated Businesses Update:
Clean Energy Ventures (CEV)
CEV reported fiscal 2020 NFE of $53.0 million, compared with NFE
of $77.5 million in fiscal 2019. The decrease in NFE was due to
fewer Investment Tax Credits (ITCs) recognized on projects placed
in service and the absence of contributions from the wind
portfolio, which was sold during fiscal 2019. Fourth-quarter NFE
were $55.8 million, compared with NFE of $52.7 million during the
same period in fiscal 2019. The increase in NFE was due to higher
SREC sales.
Solar Investment Update:
- In fiscal 2020, CEV placed eight commercial solar projects into
service and acquired one operational asset, adding 60 MWs,
increasing CEV's total installed capacity to over 350 MW.
- The Sunlight Advantage®, CEV's residential solar leasing
program, added 481 customers in fiscal 2020 and now serves over
8,600 residential and small-midsize commercial customers in New
Jersey.
Energy Services
Energy Services reported fiscal 2020 net financial loss of
$(7.9) million, compared to NFE of $2.9 million for the same period
last fiscal year. The decrease in NFE for fiscal 2020 was due
primarily to challenging market conditions created by unusually
warm weather on the U.S. east coast last winter compounded by
operational issues on a key interstate pipeline. Fourth-quarter NFE
was $1.6 million, compared with a net financial loss of $(10.7)
million during the same period last year. The increase in NFE for
the fourth quarter was due to lower demand charges and increased
natural gas pricing volatility leading to more market opportunities
compared to the same period last year.
Home Services and Other Operations
Home Services and Other Operations reported fiscal 2020 NFE of
$5.8 million compared to NFE of $1.9 million for the same period in
fiscal 2019. Fourth-quarter NFE were $5.1 million, compared with
net financial loss of $1.0 million during the same period in fiscal
2019. The increase in both periods was due to lower O&M
expenses and an income tax benefit associated with the revaluation
of certain deferred state tax liabilities.
Effective Tax Rate:
NJR’s annual effective tax rate increased to (3.7) percent in
fiscal 2020 from (28.7) percent in fiscal 2019. In the fourth
quarter of fiscal 2020, NJR recognized $37.1 million related to tax
credits, net of deferred taxes, compared with $56.8 million during
the same period last year.
Capital Expenditures and Cash Flows:
NJR is committed to maintaining a strong financial profile,
while continuing to invest capital in regulated and unregulated
energy projects.
- During fiscal 2020, capital expenditures were $499.1 million,
of which $333.9 million were related to NJNG, compared with capital
expenditures of $531.4 million, of which $372.1 million were
related to NJNG, during the same period of fiscal 2019.
- During fiscal 2020, cash flows from operations were $213.5
million, compared with $194.1 million during the same period of
fiscal 2019. The increase was primarily due to increased margin at
NJNG from increased base rates.
Forward-Looking Statements:
This earnings release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995.
New Jersey Resources Corporation (NJR) cautions readers that the
assumptions forming the basis for forward-looking statements
include many factors that are beyond NJR’s ability to control or
estimate precisely, such as estimates of future market conditions
and the behavior of other market participants. Words such as
“anticipates,” “estimates,” “expects,” “projects,” “may,” “will,”
“intends,” “plans,” “believes,” “should” and similar expressions
may identify forward-looking statements and such forward-looking
statements are made based upon management’s current expectations,
assumptions and beliefs as of this date concerning future
developments and their potential effect upon NJR. There can be no
assurance that future developments will be in accordance with
management’s expectations, assumptions and beliefs or that the
effect of future developments on NJR will be those anticipated by
management. Forward-looking statements in this earnings release
include, but are not limited to, certain statements regarding NJR’s
NFE guidance for fiscal 2021 through fiscal 2024, as well as NJR’s
long-term NFEPS growth rate, dividend growth, forecasted
contribution of business segments to NJR’s NFE from fiscal 2021
through fiscal 2024, customer growth at NJNG, future NJR and NJNG
capital expenditures, infrastructure programs and investments such
as SRL, NJ RISE II and SAFE II, CEV’s future capital investment
target, NJR's environmental sustainability and clean energy goals,
emissions reduction strategies, initiatives and targets and our
investments in infrastructure, renewables and emerging
technologies, the ability to construct and operate the Adelphia
Gateway Pipeline project, and construct SRL and the PennEast
pipeline project, as well as the ongoing COVID-19 pandemic and its
impact on NJR's liquidity, business operations, financial
condition, results of operations or cash flows.
Additional information and factors that could cause actual
results to differ materially from NJR’s expectations are contained
in NJR’s filings with the U.S. Securities and Exchange Commission
(SEC), including NJR’s Annual Reports on Form 10-K and subsequent
Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K,
and other SEC filings, which are available at the SEC’s web site,
http://www.sec.gov. Information included in this earnings release
is representative as of today only and while NJR periodically
reassesses material trends and uncertainties affecting NJR's
results of operations and financial condition in connection with
its preparation of management's discussion and analysis of results
of operations and financial condition contained in its Quarterly
and Annual Reports filed with the SEC, NJR does not, by including
this statement, assume any obligation to review or revise any
particular forward-looking statement referenced herein in light of
future events.
Non-GAAP Financial Information:
This earnings release includes the non-GAAP financial measures
NFE/net financial loss, NFE per basic share, financial margin and
utility gross margin. A reconciliation of these non-GAAP financial
measures to the most directly comparable financial measures
calculated and reported in accordance with GAAP can be found below.
As an indicator of NJR’s operating performance, these measures
should not be considered an alternative to, or more meaningful
than, net income or operating revenues as determined in accordance
with GAAP. This information has been provided pursuant to the
requirements of SEC Regulation G.
NFE/net financial loss and financial margin exclude unrealized
gains or losses on derivative instruments related to the company’s
unregulated subsidiaries and certain realized gains and losses on
derivative instruments related to natural gas that has been placed
into storage at Energy Services, net of applicable tax adjustments
as described below. Volatility associated with the change in value
of these financial instruments and physical commodity reported on
the income statement in the current period. In order to manage its
business, NJR views its results without the impacts of the
unrealized gains and losses, and certain realized gains and losses,
caused by changes in value of these financial instruments and
physical commodity contracts prior to the completion of the planned
transaction because it shows changes in value currently instead of
when the planned transaction ultimately is settled. An annual
estimated effective tax rate is calculated for NFE purposes and any
necessary quarterly tax adjustment is applied to CEV, as such the
adjustment is related to tax credits generated by CEV.
NJNG’s utility gross margin represents the results of revenues
less natural gas costs, sales, expenses and other taxes and
regulatory rider expenses, which are key components of NJR’s
operations. Natural gas costs, sales, expenses and other taxes and
regulatory rider expenses are passed through to customers and,
therefore, have no effect on utility gross margin. Management uses
these non-GAAP financial measures as supplemental measures to other
GAAP results to provide a more complete understanding of NJR’s
performance. Management believes these non-GAAP financial measures
are more reflective of NJR’s business model, provide transparency
to investors and enable period-to-period comparability of financial
performance. A reconciliation of all non-GAAP financial measures to
the most directly comparable financial measures calculated and
reported in accordance with GAAP can be found below. For a full
discussion of NJR’s non-GAAP financial measures, please see NJR’s
2020 Form 10-K, Item 7.
About New Jersey Resources
New Jersey Resources (NYSE: NJR) is a Fortune 1000
company that, through its subsidiaries, provides safe and reliable
natural gas and clean energy services, including transportation,
distribution, asset management and home services. NJR is composed
of five primary businesses:
- New Jersey Natural Gas, NJR’s principal subsidiary,
operates and maintains over 7,500 miles of natural gas
transportation and distribution infrastructure to serve over half a
million customers in New Jersey’s Monmouth, Ocean, Morris,
Middlesex and Burlington counties.
- Clean Energy Ventures invests in, owns and operates
solar projects with a total capacity of over 350 megawatts,
providing residential and commercial customers with low-carbon
solutions.
- Energy Services manages a diversified portfolio of
natural gas transportation and storage assets and provides physical
natural gas services and customized energy solutions to its
customers across North America.
- Storage and Transportation serves customers from local
distributors and producers to electric generators and wholesale
marketers through its ownership of Leaf River and the Adelphia
Gateway Pipeline Project, as well as our 50 percent equity
ownership in the Steckman Ridge natural gas storage facility, and
our 20 percent equity interest in the PennEast Pipeline
Project.
- Home Services provides service contracts as well as
heating, central air conditioning, water heaters, standby
generators, solar and other indoor and outdoor comfort products to
residential homes throughout New Jersey.
NJR and its more than 1,100 employees are committed to helping
customers save energy and money by promoting conservation and
encouraging efficiency through Conserve to Preserve® and
initiatives such as The SAVEGREEN Project® and The Sunlight
Advantage®.
For more information about NJR: www.njresources.com. Follow us
on Twitter @NJNaturalGas. “Like” us on
facebook.com/NewJerseyNaturalGas. Download our free NJR investor
relations app for iPad, iPhone and Android. NJR-E
NEW JERSEY RESOURCES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
Twelve Months Ended
September 30,
September 30,
(Thousands, except per share data)
2020
2019
2020
2019
OPERATING REVENUES
Utility
$
84,548
$
88,626
$
729,923
$
710,793
Nonutility
315,496
390,455
1,223,745
1,881,252
Total operating revenues
400,044
479,081
1,953,668
2,592,045
OPERATING EXPENSES
Gas purchases
Utility
26,789
39,629
275,831
320,256
Nonutility
220,304
345,690
1,022,805
1,716,098
Related parties
1,535
1,493
6,083
7,948
Operation and maintenance
79,425
73,843
278,143
268,141
Regulatory rider expenses
1,993
1,778
34,529
33,937
Depreciation and amortization
30,136
24,438
119,894
91,730
Total operating expenses
360,182
486,871
1,737,285
2,438,110
OPERATING INCOME
39,862
(7,790)
216,383
153,935
Other income (expense), net
13,618
5,817
23,878
11,273
Interest expense, net of capitalized
interest
17,180
9,439
67,597
47,082
INCOME (LOSS) BEFORE INCOME TAXES AND
EQUITY IN EARNINGS OF AFFILIATES
36,300
(11,412)
172,664
118,126
Income tax benefit
(2,852)
(25,897)
(6,944)
(37,751)
Equity in earnings of affiliates
4,120
3,601
14,311
13,628
NET INCOME
$
43,272
$
18,086
$
193,919
$
169,505
EARNINGS PER COMMON SHARE
Basic
$
0.45
$
0.20
$
2.05
$
1.90
Diluted
$
0.45
$
0.20
$
2.04
$
1.89
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic
95,933
89,599
94,798
89,242
Diluted
96,259
89,600
95,107
89,616
RECONCILIATION OF NON-GAAP
PERFORMANCE MEASURES
Three Months Ended
Twelve Months Ended
September 30,
September 30,
(Thousands)
2020
2019
2020
2019
NEW JERSEY RESOURCES
A reconciliation of net income, the
closest GAAP financial measurement, to net financial earnings is as
follows:
Net income
$
43,272
$
18,086
$
193,919
$
169,505
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
12,183
28,234
(9,644)
2,881
Tax effect
(2,893)
(6,745)
2,296
(711)
Effects of economic hedging related to
natural gas inventory
2,216
(7,764)
12,690
4,309
Tax effect
(527)
1,845
(3,016)
(1,024)
Net income to NFE tax adjustment
470
(7,700)
—
—
Net financial earnings
$
54,721
$
25,956
$
196,245
$
174,960
Weighted Average Shares
Outstanding
Basic
95,933
89,599
94,798
89,242
Diluted
96,259
89,600
95,107
89,616
A reconciliation of basic earnings per
share, the closest GAAP financial measurement, to basic net
financial earnings per share is as follows:
Basic earnings per share
$
0.45
$
0.20
$
2.05
$
1.90
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
$
0.13
$
0.31
$
(0.10)
$
0.03
Tax effect
$
(0.02)
$
(0.06)
$
0.02
$
(0.01)
Effects of economic hedging related to
natural gas inventory
$
0.02
$
(0.09)
$
0.13
$
0.05
Tax effect
$
(0.01)
$
0.02
$
(0.03)
$
(0.01)
Net income to NFE tax adjustment
$
—
$
(0.09)
$
—
$
—
Basic NFE per share
$
0.57
$
0.29
$
2.07
$
1.96
NATURAL GAS DISTRIBUTION
A reconciliation of operating revenue,
the closest GAAP financial measurement, to utility gross margin is
as follows:
Operating revenues
$
84,548
$
88,626
$
729,923
$
710,793
Less:
Gas purchases
29,113
41,953
287,307
336,489
Regulatory rider expense
1,993
1,778
34,529
33,937
Utility gross margin
$
53,442
$
44,895
$
408,087
$
340,367
CLEAN ENERGY VENTURES
A reconciliation of net income to net
financial earnings is as follows:
Net income
$
55,370
$
60,376
$
53,023
$
77,473
Add:
Net income to NFE tax adjustment
470
(7,700)
—
—
Net financial earnings
$
55,840
$
52,676
$
53,023
$
77,473
Three Months Ended
Twelve Months Ended
(Unaudited)
September 30,
September 30,
(Thousands)
2020
2019
2020
2019
ENERGY SERVICES
The following table is a computation of
financial margin:
Operating revenues
$
212,760
$
317,678
$
1,030,419
$
1,742,791
Less: Gas purchases
220,882
345,735
1,024,579
1,719,519
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
12,723
28,251
(8,583)
1,195
Effects of economic hedging related to
natural gas inventory
2,216
(7,764)
12,690
4,309
Financial margin
$
6,817
$
(7,570)
$
9,947
$
28,776
A reconciliation of operating income,
the closest GAAP financial measurement, to financial margin is as
follows:
Operating (loss) income
$
(12,216)
$
(34,074)
$
(11,651)
$
2,211
Add:
Operation and maintenance expense
4,055
5,974
17,368
20,943
Depreciation and amortization
39
43
123
118
Subtotal
(8,122)
(28,057)
5,840
23,272
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
12,723
28,251
(8,583)
1,195
Effects of economic hedging related to
natural gas inventory
2,216
(7,764)
12,690
4,309
Financial margin
$
6,817
$
(7,570)
$
9,947
$
28,776
A reconciliation of net income to net
financial earnings is as follows:
Net (loss) income
$
(9,753)
$
(26,309)
$
(11,008)
$
(1,268)
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
12,723
28,251
(8,583)
1,195
Tax effect
(3,021)
(6,749)
2,044
(294)
Effects of economic hedging related to
natural gas
2,216
(7,764)
12,690
4,309
Tax effect
(527)
1,845
(3,016)
(1,024)
Net financial earnings (loss)
$
1,638
$
(10,726)
$
(7,873)
$
2,918
HOME SERVICES AND OTHER
A reconciliation of net income to net
financial earnings is as follows:
Net income (loss)
$
5,109
$
(1,035)
$
5,784
$
1,637
Add:
Unrealized loss on derivative instruments
and related transactions
—
20
—
381
Tax effect
—
(6)
—
(107)
Net financial earnings (loss)
$
5,109
$
(1,021)
$
5,784
$
1,911
FINANCIAL STATISTICS BY
BUSINESS UNIT
(Unaudited)
Three Months Ended
Twelve Months Ended
September 30,
September 30,
(Thousands, except per share data)
2020
2019
2020
2019
NEW JERSEY RESOURCES
Operating Revenues
Natural Gas Distribution
$
84,548
$
88,626
$
729,923
$
710,793
Clean Energy Ventures
77,014
60,392
102,617
98,099
Energy Services
212,760
317,678
1,030,419
1,742,791
Storage and Transportation
12,717
—
44,728
—
Home Services and Other
13,376
12,997
51,017
50,902
Sub-total
400,415
479,693
1,958,704
2,602,585
Eliminations
(371)
(612)
(5,036)
(10,540)
Total
$
400,044
$
479,081
$
1,953,668
$
2,592,045
Operating (Loss) Income
Natural Gas Distribution
$
(12,703)
$
(17,255)
$
173,412
$
111,189
Clean Energy Ventures
60,633
44,513
34,452
36,488
Energy Services
(12,216)
(34,074)
(11,651)
2,211
Storage and Transportation
5,436
(1,390)
12,451
(4,049)
Home Services and Other
(2,673)
(408)
3,062
4,785
Sub-total
38,477
(8,614)
211,726
150,624
Eliminations
1,385
824
4,656
3,311
Total
$
39,862
$
(7,790)
$
216,383
$
153,935
Equity in Earnings of
Affiliates
Storage and Transportation
$
4,703
$
3,866
$
15,903
$
15,832
Eliminations
(583)
(265)
(1,592)
(2,204)
Total
$
4,120
$
3,601
$
14,311
$
13,628
Net (Loss) Income
Natural Gas Distribution
$
(15,258)
$
(18,402)
$
126,902
$
78,062
Clean Energy Ventures
55,370
60,376
53,023
77,473
Energy Services
(9,753)
(26,309)
(11,008)
(1,268)
Storage and Transportation
7,434
3,488
18,311
14,689
Home Services and Other
5,109
(1,035)
5,784
1,637
Sub-total
42,902
18,118
193,012
170,593
Eliminations
370
(32)
907
(1,088)
Total
$
43,272
$
18,086
$
193,919
$
169,505
Net Financial (Loss) Earnings
Natural Gas Distribution
$
(15,258)
$
(18,402)
$
126,902
$
78,062
Clean Energy Ventures
55,840
52,676
53,023
77,473
Energy Services
1,638
(10,726)
(7,873)
2,918
Storage and Transportation
7,434
3,488
18,311
14,689
Home Services and Other
5,109
(1,021)
5,784
1,911
Sub-total
54,763
26,015
196,147
175,053
Eliminations
(42)
(59)
98
(93)
Total
$
54,721
$
25,956
$
196,245
$
174,960
Throughput (Bcf)
NJNG, Core Customers
17.6
19.5
97.0
108.4
NJNG, Off System/Capacity Management
34.1
34.8
118.4
123.8
Energy Services Fuel Mgmt. and Wholesale
Sales
121.6
148.4
526.7
584.9
Total
173.3
202.7
742.1
817.1
Common Stock Data
Yield at September 30
4.9
%
2.8
%
4.9
%
2.8
%
Market Price at September 30
$
27.02
$
45.22
$
27.02
$
45.22
Shares Out. at September 30
95,949
89,999
95,949
89,999
Market Cap. at September 30
$
2,592,547
$
4,069,755
$
2,592,547
$
4,069,755
Three Months Ended
Twelve Months Ended
(Unaudited)
September 30,
September 30,
(Thousands, except customer and weather
data)
2020
2019
2020
2019
NATURAL GAS DISTRIBUTION
Utility Gross Margin
Operating revenues
$
84,548
$
88,626
$
729,923
$
710,793
Less:
Gas purchases
29,113
41,953
287,307
336,489
Regulatory rider expense
1,993
1,778
34,529
33,937
Total Utility Gross Margin
$
53,442
$
44,895
$
408,087
$
340,367
Utility Gross Margin, Operating Income
and Net Income
Residential
$
30,408
$
24,899
$
275,033
$
224,597
Commercial, Industrial & Other
8,190
7,330
57,929
50,553
Firm Transportation
10,416
8,549
60,199
51,069
Total Firm Margin
49,014
40,778
393,161
326,219
Interruptible
1,675
1,620
5,455
5,750
Total System Margin
50,689
42,398
398,616
331,969
Off System/Capacity Management/FRM/Storage
Incentive
2,753
2,497
9,471
8,398
Total Utility Gross Margin
53,442
44,895
408,087
340,367
Operation and maintenance expense
47,448
46,727
162,792
171,198
Depreciation and amortization
18,697
15,423
71,883
57,980
Operating (Loss) Income
$
(12,703)
$
(17,255)
$
173,412
$
111,189
Net (Loss) Income
$
(15,258)
$
(18,402)
$
126,902
$
78,062
Net Financial (Loss) Earnings
$
(15,258)
$
(18,402)
$
126,902
$
78,062
Throughput (Bcf)
Residential
3.4
3.0
44.6
46.0
Commercial, Industrial & Other
0.6
0.7
8.2
9.7
Firm Transportation
1.6
1.6
13.3
13.7
Total Firm Throughput
5.6
5.3
66.1
69.4
Interruptible
12.0
14.2
30.9
39.0
Total System Throughput
17.6
19.5
97.0
108.4
Off System/Capacity Management
34.1
34.8
118.4
123.8
Total Throughput
51.7
54.3
215.4
232.2
Customers
Residential
497,779
486,474
497,779
486,474
Commercial, Industrial & Other
28,735
28,992
28,735
28,992
Firm Transportation
31,604
32,107
31,604
32,107
Total Firm Customers
558,118
547,573
558,118
547,573
Interruptible
29
32
29
32
Total System Customers
558,147
547,605
558,147
547,605
Off System/Capacity Management*
19
21
19
21
Total Customers
558,166
547,626
558,166
547,626
*The number of customers represents those
active during the last month of the period.
Degree Days
Actual
46
11
4,254
4,506
Normal
30
30
4,586
4,552
Percent of Normal
153.3
%
36.7
%
92.8
%
99.0
%
Three Months Ended
Twelve Months Ended
(Unaudited)
September 30,
September 30,
(Thousands, except customer, SREC and
megawatt)
2020
2019
2020
2019
CLEAN ENERGY VENTURES
Operating Revenues
SREC sales
$
69,301
$
55,215
$
81,134
$
75,101
TREC sales
1,384
—
1,384
—
Wind electricity sales and other
—
—
—
5,177
Solar electricity sales and other
3,676
2,800
9,930
8,818
Sunlight Advantage
2,653
2,377
10,169
9,003
Total Operating Revenues
$
77,014
$
60,392
$
102,617
$
98,099
Depreciation and Amortization
$
8,426
$
8,744
$
37,855
$
32,997
Operating Income
$
60,633
$
44,513
$
34,452
$
36,488
Income Tax Provision (Benefit)
$
6,028
$
(9,888)
$
(32,404)
$
(48,921)
Net Income
$
55,370
$
60,376
$
53,023
$
77,473
Net Financial Earnings
$
55,840
$
52,676
$
53,023
$
77,473
Solar Renewable Energy Certificates
Generated
251,016
211,352
389,716
311,803
Solar Renewable Energy Certificates
Sold
388,407
294,780
408,100
363,600
Transition Renewable Energy
Certificates Generated and Transferred
9,270
—
9,270
—
Solar Megawatts Eligible for
ITCs
6.9
25.4
53.5
60.1
Solar Megawatts Under
Construction
8.1
8.1
8.1
8.1
ENERGY SERVICES
Operating Income
Operating revenues
$
212,760
$
317,678
$
1,030,419
$
1,742,791
Less:
Gas purchases
220,882
345,735
1,024,579
1,719,519
Operation and maintenance expense
4,055
5,974
17,368
20,943
Depreciation and amortization
39
43
123
118
Operating (Loss) Income
$
(12,216)
$
(34,074)
$
(11,651)
$
2,211
Net (Loss) Income
$
(9,753)
$
(26,309)
$
(11,008)
$
(1,268)
Financial Margin
$
6,817
$
(7,570)
$
9,947
$
28,776
Net Financial Earnings (Loss)
$
1,638
$
(10,726)
$
(7,873)
$
2,918
Gas Sold and Managed (Bcf)
121.6
148.4
526.7
584.9
STORAGE AND TRANSPORTATION
Operating Revenues
$
12,717
$
—
$
44,728
$
—
Equity in Earnings of
Affiliates
$
4,703
$
3,866
$
15,903
$
15,832
Operation and Maintenance
Expense
$
4,460
$
1,388
$
21,862
$
4,043
Other Income, Net
$
927
$
911
$
7,328
$
7,345
Interest Expense
$
2,838
$
555
$
13,124
$
2,185
Income Tax Provision (Benefit)
$
794
$
(656)
$
4,247
$
2,254
Net Income
$
7,434
$
3,488
$
18,311
$
14,689
HOME SERVICES AND OTHER
Operating Revenues
$
13,376
$
12,997
$
51,017
$
50,902
Operating (Loss) Income
$
(2,673)
$
(408)
$
3,062
$
4,785
Other Income (Expense), Net
$
6,929
$
(296)
$
5,177
$
(542)
Net Income (Loss)
$
5,109
$
(1,035)
$
5,784
$
1,637
Net Financial Earnings (Loss)
$
5,109
$
(1,021)
$
5,784
$
1,911
Total Service Contract Customers at
September 30
107,224
108,980
107,224
108,980
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201130005295/en/
Media: Michael Kinney 732-938-1031
mkinney@njresources.com
Investor: Dennis Puma 732-938-1229
dpuma@njresources.com
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