NJR New Jersey Resources Corp

New Jersey Resources (NYSE:NJR) today reported fiscal 2009 net financial earnings per share rose 7.1 percent over the same period last year, increased its annual dividend 9.7 percent and announced its net financial earnings guidance for fiscal 2010.

A reconciliation of net income to net financial earnings for the fourth quarter and fiscal years 2009 and 2008 is provided below.

          Three Months Ended Twelve Months Ended September 30, September 30, (Thousands)       2009       2008       2009     2008   Net (loss) income ($18,863 )     $86,348 $27,242     $109,168 Add: Unrealized (gain) loss on derivative instruments, net of taxes (303 ) (103,810 ) 39,254 (6,028 )

Effects of economic hedging related to natural gas inventory,net of taxes

      13,984       1,058       34,474     (9,325 ) Net financial (loss) earnings       ($5,182 )     ($16,404 )     $100,970     $93,815     Weighted Average Shares Outstanding Basic 41,953 42,044 42,119 41,878 Diluted       41,953       42,369       42,465     42,176     Basic earnings per share ($0.45 )     $2.05       $0.65     $2.61   Basic net financial earnings per share ($0.12 )     ($0.39 )     $2.40     $2.24  

Net financial earnings is a financial measure not calculated in accordance with generally accepted accounting principles (GAAP) of the United States as it excludes all unrealized, and certain realized, gains and losses associated with derivative instruments. For further discussion of this financial measure, as well as a reconciliation to the most comparable GAAP measure, please see the explanation below under “Additional Non-GAAP Financial Information.”

• Net Financial Earnings Per Share Increase 7.1 Percent

For fiscal 2009, NJR reported net financial earnings of $101 million, or $2.40 per share, compared with $93.8 million, or $2.24 per share, in fiscal 2008. During the fourth quarter of fiscal 2009, the company’s net financial losses were $(5.2) million compared with a loss of $(16.4) million in the same period last year. The company’s growth was led by strong results at New Jersey Natural Gas (NJNG).

“Guided by our sound business strategy, conservative financial practices and a team of dedicated employees, we overcame economic challenges to achieve an 18th consecutive year of net financial earnings growth,” said Laurence M. Downes, chairman and CEO of NJR. “Our objective is to achieve improved financial results again in fiscal 2010 and deliver the consistent performance our shareowners have come to expect.”

• 9.7 Percent Dividend Increase Approved

NJR also announced that its board of directors approved a 9.7 percent increase in the quarterly dividend rate to $.34 per share from $.31 per share. The new quarterly rate will be effective with the dividend payable January 4, 2010 to shareowners of record on December 15, 2009. The new annual dividend rate will be $1.36 per share.

“We remain committed to a strong dividend and financial profile,” said Downes. “Over the past three years, our average annual dividend increase has been 10.3 percent with a payout ratio that is well below our industry and peer averages. It continues to be our objective to execute a dividend strategy that is sustainable over the long term.”

NJR has increased its dividend in each of the past 15 years and has paid quarterly dividends continuously since its inception in 1952.

• Share Repurchase Update

NJR purchased approximately 1.1 million shares of common stock under its share repurchase plan during fiscal 2009 and, as of September 30, 2009, had 324,771 shares remaining authorized to be repurchased. The plan authorizes NJR to purchase its shares on the open market or in negotiated transactions, based on market and other financial conditions. Since the plan began in September 1996, NJR has invested over $185 million to repurchase 6.4 million shares at a spilt-adjusted, average price of $28.83.

• Fiscal 2010 Guidance Announced

Subject to the risks and uncertainties identified below under “Forward-Looking Statements,” NJR has established its fiscal 2010 net financial earnings guidance in a range of $2.45 to $2.60 per basic share. The company expects NJNG to be the major contributor to fiscal 2010 net financial earnings, accounting for 55 to 65 percent of the total. In addition, NJR estimates that the contribution from NJR Energy Services will be approximately 25 to 35 percent. Beginning in fiscal 2010, NJR will also report a new business segment, Midstream Assets, which will include the results of its Steckman Ridge and Iroquois equity investments. Midstream Assets are expected to contribute between 5 and 10 percent of total fiscal 2010 net financial earnings.

• Strong Fiscal Year at New Jersey Natural Gas

Increased net income during fiscal 2009 at NJNG was due primarily to higher results from gas supply incentive programs, reduced interest costs as well as the impact of the base rate case, approved and implemented in October 2008, which helped enable the utility to meet its objective of providing safe, reliable service through system maintenance and enhancements. In fiscal 2009, net income at NJNG increased to $65.4 million, compared with $42.5 million in fiscal 2008.

Customer growth at NJNG in fiscal 2009 totaled 5,841 new customers representing a new customer growth rate of 1.2 percent. In addition, 709 existing customers converted to natural gas heat and other services in fiscal 2009. At September 30, 2009, NJNG served nearly 487,000 customers. In total, this growth is expected to contribute approximately $3.4 million annually to utility gross margin. (For information on utility gross margin, please see Non-GAAP Financial Information below.)

• Fiscal 2010 Earnings Should Benefit from New Programs

Several regulatory milestones were achieved in fiscal 2009. NJNG filed and received approval for an Accelerated Infrastructure Program (AIP) as well as a series of energy-efficiency programs, collectively named The SAVEGREEN Project™, in response to the state’s request for energy programs to stimulate the state’s economy. Through AIP, NJNG will invest up to $70.8 million to expedite 14 previously planned capital improvement projects. The utility will be able to recognize a rate of return on its completed capital investment projects based on its currently authorized weighted average cost of capital of 7.76 percent. NJNG will spend approximately $40 million on AIP investments in fiscal 2010. The SAVEGREEN Project will offer special rebates and incentives to augment the energy-efficiency programs offered through New Jersey’s Clean Energy Program with an expected investment of approximately $15 million to be recovered over a 4-year period, including the previously mentioned weighted average cost of capital.

• NJNG Conservation Incentive Program Continues

In accordance with the Conservation Incentive Program (CIP) Order issued by the New Jersey Board of Public Utilities (BPU) in October 2006, NJNG may continue its CIP for up to one additional year, through October 1, 2010, or until the issuance of a BPU order. The 3-year pilot program has eliminated the link between usage and gross margin recoveries, allowing NJNG to more aggressively and creatively encourage innovative efficiency and conservation efforts while maintaining its strong financial profile. Since the program’s inception, customers have saved approximately $135 million on their natural gas bills.

• NJR Energy Services Contributes 31 Percent to Net Financial Earnings

NJRES recorded its third best year of profitability in its history, contributing 31 percent to NJR’s overall net financial earnings. In fiscal 2009, net financial earnings at NJRES were $31.2 million, compared with $47 million in fiscal 2008. Recent economic conditions resulted in reduced demand in the wholesale natural gas market during fiscal 2009, due primarily to the natural gas requirements associated with electric generation. Net financial earnings were also impacted by narrower winter storage spreads and less contracted transportation capacity in the Northeast.

• Steckman Ridge Accepts Injections

Customers began injecting natural gas into the Steckman Ridge storage field during the spring of 2009 in preparation for withdrawals during the 2009-2010 winter heating season. A joint venture with Spectra Energy, Steckman Ridge is expected to contribute between 2 and 6 percent to NJR’s net financial earnings in fiscal 2010.

• NJR Earns External Recognition

NJR was recognized as the eighth best energy company in America by Public Utilities Fortnightly magazine, an increase of two places over last year’s ranking. The company was also named one of the Best Places to Work in New Jersey by NJBIZ. Additionally, NJNG ranked first in the Eastern U.S. on the J.D. Power and Associates 2009 Gas Utility Residential Customer Satisfaction Study.

Webcast Information

NJR will host a live webcast to discuss its financial results today at 9 a.m. ET. A few minutes prior to the webcast, go to www.njliving.com and select “New Jersey Resources” from the top navigation bar. Choose “Investor Relations,” then click just below the microphone under the heading “Latest Webcast” on the Investor Relations home page.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. Other factors that could cause actual results to differ materially from the company’s expectations include, but are not limited to, weather, economic conditions and demographic changes in NJNG’s service territory, NJR’s dependence on operating subsidiaries, rate of customer growth, volatility of natural gas and other commodity prices and its impact on customer usage and NJR Energy Services operations, changes in rating agency requirements and/or credit ratings and their effect on availability and cost of capital to the company, conditions in the credit markets and their potential impact on the company’s access to capital and borrowing costs, the ability to comply with debt covenants, increased interest costs resulting from failures in the market for auction rate securities, the impact of the company’s risk management efforts, including commercial and wholesale credit risks, changes in the costs of providing pension and post-employment benefits to current and former employees, the ability to maintain effective internal controls, accounting effects and other risks associated with hedging activities, the company’s ability to obtain governmental approvals, property rights and/or financing for the construction, development and operation of its non-regulated energy investments, risks associated with the management of the company’s joint ventures and partnerships, the impact of regulation (including the regulation of rates), dependence on third-party storage and transportation facilities, operating risks, access to adequate supplies of natural gas, the regulatory and pricing policies of federal and state regulatory agencies, an adequate number of appropriate counterparties and sufficient liquidity in the energy trading market, the disallowance of recovery of environmental-related expenditures, environmental and other litigation and other uncertainties and the impact of NJR’s charter and bylaws on potential transactions. NJR does not, by including this paragraph, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events. More detailed information about these factors is set forth under the heading “Risk Factors” in NJR’s filings with the Securities and Exchange Commission (SEC) including its most recent Form 10-K filed on November 30, 2009.

Non-GAAP Financial Information

This press release includes the non-GAAP measures net financial earnings (losses), 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 the company’s operating performance, these measures should not be considered an alternative to, or more meaningful than, operating income as determined in accordance with GAAP.

Net financial earnings (losses) and financial margin exclude unrealized gains or losses on derivative instruments related to the company’s unregulated subsidiaries and the effects of economically hedging the value of natural gas in storage at NJRES. Volatility associated with the change in value of these financial and physical commodity contracts is reported in the consolidated statements of income 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 as opposed to when the planned transaction ultimately is settled. NJNG’s utility gross margin represents the results of revenues less natural gas costs, sales and other taxes and regulatory rider expenses, which are key components of the company’s operations that move in relation to each other. Management uses these non-GAAP financial measures as supplemental measures to other GAAP results to provide a more complete understanding of the company’s performance. Management believes these non-GAAP measures are more reflective of the company’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 most recent Form 10-K, Item 7.

About New Jersey Resources

New Jersey Resources, a Fortune 1000 company, provides reliable energy and natural gas services including transportation, distribution, and asset management in states from the Gulf Coast to the New England regions, including the Mid-Continent region, the West Coast and Canada, while investing in and maintaining an extensive infrastructure to support future growth. With over $2.5 billion in annual revenues, NJR safely and reliably operates and maintains 6,700 miles of natural gas transportation and distribution infrastructure to serve nearly half a million customers; develops and manages a diverse portfolio of more than 777,000 dth/d of transportation capacity and 52 Bcf of storage capacity; and provides appliance installation, repair and contract service to approximately 150,000 homes and businesses. Additionally, NJR holds investments in midstream assets through equity partnerships including Steckman Ridge and Iroquois. Through Conserve to Preserve®, NJR is helping customers save energy and money by promoting conservation and encouraging efficiency. For more information about NJR, visit www.njliving.com.

  Reconciliation of Non-GAAP Performance Measures                             NEW JERSEY RESOURCES                                           A reconciliation of Net income at NJR to net financial earnings, is as follows:   Three Months Ended Twelve Months Ended September 30, September 30, (Thousands)     2009       2008         2009       2008   Net (loss) income ($18,863 ) $86,348 $27,242 $109,168 Add: Unrealized (gain) loss on derivative instruments, net of taxes (303 ) (103,810 ) 39,254 (6,028 )

Effects of economic hedging related to natural gas inventory, net oftaxes

    13,984       1,058         34,474       (9,325 ) Net financial (loss) earnings     ($5,182 )     ($16,404 )       $100,970       $93,815     WEIGHTED AVERAGE SHARES OUTSTANDING BASIC 41,953 42,044 42,119 41,878 DILUTED     41,953       42,369         42,465       42,176     Basic net financial (loss) earnings per share ($0.12 )     ($0.39 )       $2.40       $2.24                                 NJR ENERGY SERVICES                             The following table is a computation of financial margin at NJRES:   Three Months Ended Twelve Months Ended September 30, September 30, (Thousands)     2009       2008         2009       2008   Operating revenues $279,446 $704,982 $1,498,742 $2,714,733 Gas purchases 307,573 514,103 1,537,634 2,577,667 Add: Unrealized (gain) loss on derivative instruments (146 ) (195,520 ) 47,631 (18,449 )

Effects of economic hedging related to natural gas inventory, net oftaxes

    23,086       2,330         55,940       (14,528 ) Financial margin     ($5,187 )     ($2,311 )       $64,679       $104,089       A reconciliation of Operating income at NJRES, the closest GAAP financial measurement, to the financial margin is as follows: Three Months Ended Twelve Months Ended September 30, September 30, (Thousands)     2009       2008         2009       2008   Operating (loss) income ($32,042 ) $177,547 ($57,139 ) $108,342 Add: Operation and maintenance expense 3,537 12,707 16,468 27,384 Depreciation and amortization 52 50 205 206 Other taxes     326       575         1,574       1,134   Subtotal – Gross margin (28,127 ) 190,879 (38,892 ) 137,066 Add: Unrealized (gain) loss on derivative instruments (146 ) (195,520 ) 47,631 (18,449 )

Effects of economic hedging related to natural gas inventory, net oftaxes

23,086       2,330         55,940       (14,528 ) Financial margin     ($5,187 )     ($2,311 )       $64,679       $104,089                                 NJR ENERGY SERVICES (continued)                             A reconciliation of NJRES Net income to net financial earnings, is as follows:   Three Months Ended Twelve Months Ended September 30, September 30, (Thousands)     2009       2008         2009       2008   Net (loss) income ($18,804 ) $107,812 ($32,632 ) $67,166 Add: Unrealized loss (gain) on derivative instruments, net of taxes 22 (118,846 ) 29,337 (10,838 )

Effects of economic hedging related to natural gas inventory, net oftaxes

13,984       1,058         34,474       (9,325 ) Net financial (loss) earnings     ($4,798 )     ($9,976 )       $31,179       $47,003                                 Retail and Other                             A reconciliation of Retail and Other Net income to net financial earnings, is as follows:   Three Months Ended Twelve Months Ended September 30, September 30, (Thousands)     2009       2008         2009       2008   Net income (loss) $3,334 ($12,956 ) ($5,529 ) ($477 ) Add: Unrealized (gain) loss on derivative instruments, net of taxes     (325 )     15,036         9,917       4,810   Net financial earnings     $3,009       $2,080         $4,388       $4,333                       NEW JERSEY RESOURCES CONSOLIDATED STATEMENTS OF INCOME                                 Three Months Ended Twelve Months Ended September 30, September 30, (Thousands, except per share data)         2009       2008       2009     2008 OPERATING REVENUES         $412,588       $827,088       $2,592,460     $3,816,210   OPERATING EXPENSES Gas purchases 385,674 613,995 2,245,169 3,330,756 Operation and maintenance 36,942 47,413 149,151 148,384 Regulatory rider expenses 4,407 3,787 44,992 39,666 Depreciation and amortization 7,579 9,864 30,328 38,464 Energy and other taxes         7,397       7,357       74,750     65,602 Total operating expenses         441,999       682,416       2,544,390     3,622,872 OPERATING (LOSS) INCOME (29,411 ) 144,672 48,070 193,338 Other income 1,314 1,063 4,409 4,368 Interest expense, net of capitalized interest       5,061       6,127       21,014     25,811

(LOSS) INCOME BEFORE INCOME TAXESAND EQUITY IN EARNINGS OF AFFILIATES

(33,158 ) 139,608 31,465 171,895 Income tax (benefit) provision (12,808 ) 53,700 8,488 64,715 Equity in earnings of affiliates, net of tax         1,487       440       4,265     1,988 NET (LOSS) INCOME         ($18,863 )     $86,348       $27,242     $109,168   (LOSS) EARNINGS PER COMMON SHARE BASIC ($0.45 ) $2.05 $0.65 $2.61 DILUTED         ($0.45 )     $2.04       $0.64     $2.59   DIVIDENDS PER COMMON SHARE         $0.31       $0.28       $1.24     $1.11   AVERAGE SHARES OUTSTANDING BASIC 41,953 42,044 42,119 41,878 DILUTED         41,953       42,369       42,465     42,176                       NEW JERSEY RESOURCES                                 Three Months Ended Twelve Months Ended September 30, September 30, (Thousands, except per share data)         2009     2008       2009     2008 Operating Revenues New Jersey Natural Gas $123,006 $138,135 $1,082,001 $1,078,824 NJR Energy Services 279,446 704,982 1,498,742 2,714,733 Retail and Other 10,180     (15,984)       14,008     22,850 Sub-total 412,632     827,133       2,594,751     3,816,407 Intercompany Eliminations (44)     (45)       (2,291)     (197) Total $412,588     $827,088       $2,592,460     $3,816,210                                 Operating (Loss) Income New Jersey Natural Gas ($1,062) ($10,229) $120,364 $88,136 NJR Energy Services (32,042) 177,547 (57,139) 108,342 Retail and Other 3,592     (22,806)       (15,440)     (3,300) Sub-total (29,512)     144,512       47,785     193,178 Intercompany Eliminations 101     160       285     160 Total ($29,411)     $144,672       $48,070     $193,338                                 Net (Loss) Income New Jersey Natural Gas ($3,393) ($8,508) $65,403 $42,479 NJR Energy Services (18,804) 107,812 (32,632) 67,166 Retail and Other 3,334     (12,956)       (5,529)     (477) Total ($18,863)     $86,348       $27,242     $109,168                                 Net Financial (Loss) Earnings New Jersey Natural Gas ($3,393) ($8,508) $65,403 $42,479 NJR Energy Services (4,798) (9,976) 31,179 47,003 Retail and Other 3,009     2,080       4,388     4,333 Total ($5,182)     ($16,404)       $100,970     $93,815                                 Throughput (Bcf) NJNG, Core Customers 6.3 6.8 66.9 65.1 NJNG, Off System/Capacity Management 20.2 7.7 66.1 34.5 NJRES Fuel Mgmt. and Wholesale Sales 68.2     76.5       302.8     292.5 Total 94.7     91.0       435.8     392.1                                 Common Stock Data Yield at September 30 3.4% 3.1% 3.4% 3.1% Market Price High $40.61 $41.13 $42.37 $41.13 Low $35.64 $31.68 $21.90 $29.22 Close at September 30 $36.31 $35.89 $36.31 $35.89 Shares Out. at September 30 41,586 42,058 41,586 42,058 Market Cap. at September 30 $1,509,988 $1,509,462 $1,509,988 $1,509,462                                   NEW JERSEY NATURAL GAS                                 Three Months Ended Twelve Months Ended (Unaudited) September 30, September 30, (Thousands, except customer & weather data)         2009     2008       2009     2008 Utility Gross Margin Operating revenues $123,006 $138,135 $1,082,001 $1,078,824 Less: Gas purchases 78,194 100,053 709,906 753,249 Energy and other taxes 5,560 5,402 66,768 58,539 Regulatory rider expense 4,407     3,787       44,992     39,666 Total Utility Gross Margin $34,845 $28,893   $260,335 $227,370                                 Utility Gross Margin and Operating Income Residential $20,274 $16,640 $170,509 $154,307 Commercial, Industrial & Other 7,369 5,025 47,767 45,503 Firm Transportation 4,845     4,284       29,683     19,722 Total Firm Margin 32,488 25,949 247,959 219,532 Interruptible 83     124       319     482

Total System Margin

32,571     26,073       248,278     220,014 Off System/Capacity Management/FRM/Storage Incentive 2,274 2,820 12,057 7,656 BPU Settlement -     -       -     (300) Total Utility Gross Margin 34,845     28,893       260,335     227,370 Operation and maintenance expense 27,677 28,618 106,814 98,035 Depreciation and amortization 7,297 9,670 29,417 37,723 Other taxes not reflected in gross margin 933     834       3,740     3,476 Operating (Loss) Income ($1,062)     ($10,229)       $120,364     $88,136                                 Throughput (Bcf) Residential 3.1 3.0 43.6 40.8 Commercial, Industrial & Other 0.7 0.7 9.8 9.0 Firm Transportation 1.0     0.9       9.4     8.9 Total Firm Throughput 4.8 4.6 62.8 58.7 Interruptible 1.5     2.2       4.1     6.4 Total System Throughput 6.3     6.8       66.9     65.1 Off System/Capacity Management 20.2     7.7       66.1     34.5 Total Throughput 26.5     14.5       133.0     99.6                                 Customers Residential 437,793 437,655 437,793 437,655 Commercial, Industrial & Other 27,771 29,002 27,771 29,002 Firm Transportation 20,965     16,830       20,965     16,830 Total Firm Customers 486,529 483,487 486,529 483,487 Interruptible 45     46       45     46 Total System Customers 486,574     483,533       486,574     483,533 Off System/Capacity Management* 36     27       36     27 Total Customers 486,610     483,560       486,610     483,560 *The number of customers represents those active during the last month of the period. Degree Days Actual 38 21 4,791 4,399 Normal 42     42       4,749     4,817 Percent of Normal 90.5%     50.0%       100.9%     91.3%                                   NJR ENERGY SERVICES                                 Three Months Ended Twelve Months Ended (Unaudited) September 30, September 30, (Thousands, except customer)         2009     2008       2009     2008 Operating Revenues $279,446 $704,982 $1,498,742 $2,714,733 Gas Purchases 307,573     514,103       1,537,634     2,577,667 Gross Margin (28,127) 190,879 (38,892) 137,066 Operation and maintenance expense 3,537 12,707 16,468 27,384 Depreciation and amortization 52 50 205 206 Energy and other taxes 326     575       1,574     1,134 Operating (Loss) Income ($32,042)     $177,547       ($57,139)     $108,342   Net (Loss) Income ($18,804)     $107,812       ($32,632)     $67,166   Financial Margin ($5,187)     ($2,311)       $64,679     $104,089   Net Financial (Loss) Earnings ($4,798)     ($9,976)       $31,179     $47,003   Gas Sold and Managed (Bcf) 68.2     76.5       302.8     292.5                                   RETAIL AND OTHER                                 Operating Revenues $10,180     ($15,984)       $14,008     $22,850   Operating Income (Loss) $3,592     ($22,806)       ($15,440)     ($3,300)   Net Income (Loss) $3,334     ($12,956)       ($5,529)     ($477)   Net Financial Earnings $3,009     $2,080       $4,388     $4,333   Total Customers at September 30 149,798     149,268       149,798     149,268