Today, New Jersey Resources (NYSE:NJR) reported results for
fiscal 2017. Key highlights for the fiscal year include:
- Consolidated net income was $132.1
million, compared with $131.7 million in fiscal 2016.
- Consolidated net financial earnings
(NFE), a non-GAAP financial measure, were $149.4 million, compared
with $138.1 million in fiscal 2016.
- Increased annual dividend rate by 6.9
percent to $1.09 per share.
- Higher base rates and customer growth
led to 14.2 percent NFE growth at New Jersey Natural Gas (NJNG),
compared with fiscal 2016.
- Southern Reliability Link approved by
New Jersey Pinelands Commission; the final regulatory
milestone.
- NJR Clean Energy Ventures (NJRCEV), a
leading solar provider in the state, completed five commercial
installations with a total capacity of 27.1 megawatts (MWs); strong
demand for residential solar continues.
“New Jersey Resources delivered strong results in fiscal 2017,
thanks to the efforts of our talented employees,” said Laurence M.
Downes, chairman and CEO of New Jersey Resources. “Our performance
was primarily driven by higher utility gross margin and customer
growth, as well as strong contributions from our clean energy and
midstream segments.”
Fiscal 2017 net income totaled $132.1 million, or $1.53 per
share, compared with $131.7 million, or $1.53 per share, in fiscal
2016. Fiscal 2017 NFE totaled $149.4 million, or $1.73 per share,
compared with $138.1 million, or $1.61 per share, in fiscal
2016.
Net losses for the fourth quarter of fiscal 2017 totaled $36.5
million, or $(.42) per share, compared with net income of $25.4
million, or $.30 per share, during the same period last year.
Fourth-quarter fiscal 2017 net financial losses totaled $12.5
million, or $(.14) per share, compared with a net financial loss of
$2.1 million, or $(.02) per share, during the same period last
year.
A reconciliation of net income to NFE for the three and twelve
months ended September 30 of fiscal years 2017 and 2016, is
provided below.
Three Months Ended Twelve Months Ended
September 30, September 30, (Thousands)
2017 2016
2017 2016
Net (loss)
income $ (36,523 ) $ 25,400
$ 132,065 $ 131,672 Add: Unrealized loss
(gain) on derivative instruments and related transactions
31,293 (11,027 )
(11,241 ) 46,883 Tax effect
(11,845 ) 4,003
4,062 (17,018 ) Effects of
economic hedging related to natural gas inventory
8,878
(28,195 )
38,470 (36,816 ) Tax effect
(2,887 )
10,235
(13,964 ) 13,364 Net income to NFE tax
adjustment
(1,408 ) (2,475 )
— —
Net financial (loss) earnings $ (12,492
) $ (2,059 )
$ 149,392 $ 138,085
Weighted Average Shares Outstanding Basic
86,513 86,060
86,321 85,884 Diluted (GAAP basis)
86,513 86,940
87,144 86,731 Diluted (NFE basis)
86,513 86,060
87,144 86,731
Basic (loss) earnings per share $
(0.42 ) $ 0.30
$ 1.53 $ 1.53 Add:
Unrealized loss (gain) on derivative instruments and related
transactions
0.36 (0.13 )
(0.13 ) 0.55 Tax
effect
(0.13 ) 0.05
0.05 (0.20 ) Effects of
economic hedging related to natural gas inventory
0.10 (0.33
)
0.45 (0.43 ) Tax effect
(0.03 ) 0.12
(0.17 ) 0.16 Net income to NFE tax adjustment
(0.02 ) (0.03 )
— —
Basic net
financial (loss) earnings per share $ (0.14
) $ (0.02 )
$ 1.73 $ 1.61
NFE 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, net of
applicable tax adjustments. For further discussion of this
financial measure, please see the explanation below under “Non-GAAP
Financial Information.”
A table summarizing our key performance metrics for the three
and twelve months ended September 30 of fiscal years 2017 and
2016, is provided below.
Three Months Ended Twelve Months Ended
September 30, September 30, ($ in Thousands)
2017 2016
2017 2016 Net (loss) income
$ (36,523 ) $ 25,400
$
132,065 $ 131,672 EPS
$ (0.42 )
$ 0.30
$ 1.53 $ 1.53 NFE
(12,492 )
(2,059 )
149,392 138,085 Basic net financial (loss) per
share
$ (0.14 ) $ (0.02 )
$ 1.73
$ 1.61
A table detailing NFE for the three and twelve months ended
September 30 of fiscal years 2017 and 2016, is provided
below.
Three Months Ended Twelve Months Ended
September 30, September 30, (Thousands)
2017
2016
2017 2016
Net financial (loss)
earnings New Jersey Natural Gas
$
(9,602 ) $ (7,390 )
$ 86,930 $ 76,104
NJR Midstream
2,563 2,496
12,857
9,406
Subtotal Regulated (7,039 )
(4,894 )
99,787 85,510 NJR Clean Energy Ventures
(6,988 ) 6,495
24,873 28,393 NJR Energy
Services
(1,612 ) (5,651 )
18,554 21,934 NJR
Home Services and Other
3,266 2,220
6,811 2,882
Subtotal Non-Regulated
(5,334 ) 3,064
50,238 53,209
Subtotal (12,373 ) (1,830 )
150,025 138,719 Eliminations
(119 ) (229 )
(633 ) (634 )
Total $ (12,492
) $ (2,059 )
$ 149,392 $ 138,085
NJR Announces Fiscal 2018 NFE Guidance:
NJR announced fiscal 2018 NFE guidance of $1.75 to $1.85 per
share, subject to the risks and uncertainties identified below
under “Forward-Looking Statements.” NJR expects its regulated
businesses to generate between 55 to 75 percent of total NFE, with
NJNG continuing to be the largest contributor. The following chart
represents NJR’s current expected contributions from its
subsidiaries for fiscal 2018:
Company Expected Fiscal 2018Net Financial
Earnings Contribution New Jersey Natural Gas 50 to 60
percent NJR Midstream 5 to 15 percent
Total Regulated
55 to 75 percent NJR Clean Energy Ventures 20
to 30 percent NJR Energy Services 5 to 10 percent NJR Home
Services 1 to 3 percent
In providing fiscal 2018 NFE guidance, management is aware there
could be differences between reported GAAP earnings and NFE due to
matters such as, but not limited to, the positions of our
energy-related derivatives. Management is not able to reasonably
estimate the aggregate impact of these items on reported earnings
and, therefore, is not able to provide a reconciliation to the
corresponding GAAP equivalent for its operating earnings guidance
without unreasonable efforts.
Regulated Business Update:
New Jersey Natural Gas
Reported fiscal 2017 NFE of $86.9 million compared with $76.1
million during the same period in fiscal 2016. Strong results for
the fiscal year were driven primarily by higher base rates and
utility gross margin from new customer additions. Net financial
losses for the fourth quarter of fiscal 2017 and 2016 were $9.6
million and $7.4 million, respectively, and reflect the seasonal
nature of the business.
Customer Growth:
- Added, 9,126 new customers for the
fiscal year — its highest total since 2006 — compared with 8,170
last year; new customer additions contributed $5.5 million to
annual utility gross margin.
- NJNG expects to invest approximately
$40 million per year in capital expenditures to support new
customer growth through fiscal 2020. NJNG expects to add 26,000 to
28,000 new customers through fiscal 2020, representing an annual
growth rate of 1.7 percent and a cumulative increase in utility
gross margin of approximately $16 million through fiscal 2020. For
more information on utility gross margin, please see “Non-GAAP
Financial Information” below.
Infrastructure Update:
The Southern Reliability Link (SRL) is a proposed 30-mile
transmission pipeline designed to provide a secondary interstate
feed into the southern end of NJNG’s delivery system to enhance
resiliency and supplier diversity.
- Approved by New Jersey Pinelands
Commission on September 14, 2017; the final regulatory
milestone.
- We are actively pursuing the remaining
easements and road opening permits. Once approved, the construction
process will begin and the SRL is expected to be in-service in the
first quarter of fiscal 2019.
New Jersey Reinvestment in System Enhancement (NJ RISE)
Program is a five-year, $102.5 million investment that began in
2014 to enhance system resiliency and improve NJNG's service
disruption response capabilities.
- Completed the reconstruction of the
Ship Bottom Regulator Station on Long Beach Island.
- Installation of a secondary natural gas
distribution main in the northern section of the Seaside barrier
island in Ocean County, New Jersey has begun, along with
improvements to the associated primary and backup regulator
stations.
- Two additional NJ RISE projects are in
the permitting phase, with expected completion dates in fiscal
2019.
Safety Acceleration and Facilities Enhancement (SAFE) Program
II is a five-year program designed to replace the remaining 276
miles of unprotected steel main and associated services in NJNG’s
distribution system. As a condition of the New Jersey Board of
Public Utilities' (BPU) approval, NJNG is required to file a base
rate case no later than November 2019.
- In fiscal 2017, $39.8 million was
invested to replace 69.7 miles of unprotected steel main and
services.
- NJNG earns an Allowance for Funds Used
During Construction (AFUDC) on its invested capital during
construction, and requests base rate increases for the approved
$157.5 million of SAFE II spending in annual filings.
- BPU approved a $4.1 million base rate
increase, effective October 1, 2017, to recover NJ RISE and
SAFE II capital investments for the period ending June 30,
2017.
Basic Gas Supply Service (BGSS) Incentive Programs:
- Contributed $13.7 million in fiscal
2017 to utility gross margin compared with $15 million during the
same period in fiscal 2016, reflecting a decrease in the value of
capacity and lower volumes associated with the capacity release
program.
Energy Efficiency:
- The SAVEGREEN Project®, NJNG’s
energy-efficiency program, invested $13.1 million during fiscal
2017 in grants and financing options designed to help customers
with energy-efficiency upgrades for their homes and
businesses.
- Since inception in 2009, NJNG has
invested nearly $150 million and is authorized to earn an overall
return on its investments, ranging from 6.69 to 7.76 percent, with
a return on equity (ROE) that ranges from 9.75 to 10.3
percent.
NJR Midstream
Reported fiscal 2017 NFE of $12.9 million compared with $9.4
million during the same period in fiscal 2016. For the three-month
period ended September 30, 2017, NFE were $2.6 million, compared
with $2.5 million during the same period in fiscal 2016. The
improved results were due primarily to AFUDC associated with the
PennEast Pipeline project.
- On October 27, 2017, Adelphia
Gateway, LLC, a subsidiary of NJR, entered into an agreement with
Talen Generation LLC to acquire all of the membership interests in
Interstate Energy Company LLC, which owns and operates an existing
84-mile pipeline in southeastern Pennsylvania. The transaction is
expected to close following receipt of all of the necessary permits
and regulatory actions, including those from the Federal Energy
Regulatory Commission (FERC) and the Pennsylvania Public Utility
Commission.
- PennEast is awaiting final approval of
its Certificate of Public Convenience and Necessity from FERC.
- Once the FERC certificate is received,
the project will move quickly to secure the remaining permits and
reassess the project timeline. PennEast expects the project to be
in service in 2019.
Non-Regulated Business Update:
NJR Clean Energy Ventures
Reported NFE of $24.9 million in fiscal 2017, compared with
$28.4 million in fiscal 2016. During the three-month period ended
September 30, 2017, NJRCEV reported a net financial loss of $7
million, compared with NFE of $6.5 million during the same period
in fiscal 2016. The quarterly results were due primarily to lower
investment tax credits (ITCs) driven by NJRCEV's decision to
finance two of its commercial assets through a sale leaseback
arrangement, which is described below. Solar highlights
include:
- Five commercial solar projects were
placed into service, adding 27.1 MWs to its growing portfolio of
solar assets.
- The Sunlight Advantage® residential
solar program added 1,300 new customers, compared with 1,123 during
the same period in fiscal 2016.
- Solar-related capital expenditures for
projects eligible for ITCs during fiscal 2017 were $120.3 million,
$87.5 million net of sale leaseback, compared with $85.6 million
during fiscal 2016.
- Completed sale leaseback financing of
two commercial solar asset projects totaling $32.9 million. Under
the sale leaseback financing, NJRCEV retains all Solar Renewable
Energy Credits (SRECs) and proceeds from electricity sales while
transferring the tax benefits associated with the ITCs and bonus
depreciation to the lessor.
NJR Energy Services (NJRES)
Reported NFE of $18.6 million in fiscal 2017 compared with $21.9
million during the same period in fiscal 2016.
Reported a net financial loss of $1.6 million in the fourth
quarter of fiscal 2017, compared with a net financial loss of $5.7
million during the same period in fiscal 2016.
- Lower results in fiscal 2017 were due
primarily to fewer market opportunities related to transportation
assets and timing of certain transactions related to storage
withdrawals, along with warmer-than-normal weather during fiscal
2017.
Capital Expenditures and Cash Flows:
NJR is committed to maintaining a strong financial profile while
continuing to invest capital in regulated and non-regulated
projects.
- NJR generated operating cash flows of
$248 million in fiscal 2017, compared with $142.6 million during
the same period in fiscal 2016. The increase was attributed
primarily to higher utility gross margin and lower broker margin
requirements, as well as a discretionary contribution of $30
million to NJR’s pension plan during fiscal 2016 that did not recur
in fiscal 2017.
- Fiscal 2017 capital expenditures were
$326.8 million, of which $204.7 million were related to regulated
assets. For the fourth quarter of fiscal 2017, capital expenditures
were $80.3 million, compared with $133.4 million during the same
period in fiscal 2016.
- NJR reported aggregate capital
expenditures of $410.8 million and dividend payments of $88 million
for fiscal 2017, of which $248.1 million was funded from operating
cash flows, $32.9 million from sale leaseback financing, $206.7
million from other proceeds from debt and $11.1 million from equity
issuances.
Effective Tax Rate:
NJR’s annual effective tax rate decreased compared with the
previous year. In fiscal 2017, $29.6 million related to tax credits
net of deferred taxes were recognized, compared with $27.3 million,
in the same period last year.
For NFE purposes, the effective tax rate also decreased and NJR
recognized $29.6 million in tax credits net of deferred taxes.
Further detail can be found in Note 13 “Income Taxes” within our
10-K filing.
Webcast Information:
NJR will host a live webcast to discuss its financial results
today at 10 a.m. EST. A few minutes prior to the webcast, go to
njresources.com and select “Investor Relations,” then scroll down
to the “Events & Presentations” section and click on the
webcast link.
Forward-Looking Statements:
This 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. 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
release include, but are not limited to, certain statements
regarding NJR’s NFE guidance for fiscal 2018, forecasted
contribution of business segments to fiscal 2018 NFE, future NJNG
customer growth, future NJR capital expenditures and infrastructure
investments, NJRCEV’s ITC-eligible projects and demand for
residential solar, SREC prices and electricity sales, future base
rate cases, earnings and dividend growth, the ability to close and
successfully implement the Adelphia Gateway acquisition, as well as
the SRL and PennEast Pipeline projects.
The factors that could cause actual results to differ materially
from NJR’s expectations include, but are not limited to, risks
associated with our investments in clean energy projects, including
the availability of regulatory and tax incentives, the availability
of viable projects, our eligibility for ITCs and PTCs, the future
market for SRECs and electricity prices, and operational risks
related to projects in service; the ability to obtain governmental
and regulatory approvals, land-use rights, electric grid connection
(in the case of clean energy projects) and/or financing for the
construction, development and operation of our unregulated energy
investments and NJNG’s infrastructure projects in a timely manner;
risks associated with acquisitions and the related integration of
acquired assets with our current operations; volatility of natural
gas and other commodity prices and their impact on NJNG customer
usage, NJNG’s BGSS incentive programs, our Energy Services segment
operations and on our risk management efforts; the level and rate
at which NJNG’s costs and expenses are incurred and the extent to
which they are approved for recovery from customers through the
regulatory process, including through future base rate case
filings; the impact of a disallowance of recovery of
environmental-related expenditures and other regulatory changes;
the performance of our subsidiaries; operating risks incidental to
handling, storing, transporting and providing customers with
natural gas; access to adequate supplies of natural gas and
dependence on third-party storage and transportation facilities for
natural gas supply; the regulatory and pricing policies of federal
and state regulatory agencies; timing of qualifying for ITCs and
PTCs due to delays or failures to complete planned solar and wind
energy projects and the resulting effect on our effective tax rate
and earnings; the results of legal or administrative proceedings
with respect to claims, rates, environmental issues, gas cost
prudence reviews and other matters; risks related to cyberattack or
failure of information technology systems; changes in rating agency
requirements and/or credit ratings and their effect on availability
and cost of capital to our company; the ability to comply with
current and future regulatory requirements; the impact of
volatility in the equity and credit markets on our access to
capital; the impact to the asset values and resulting higher costs
and funding obligations of our pension and postemployment benefit
plans as a result of potential downturns in the financial markets,
lower discount rates, revised actuarial assumptions or impacts
associated with the Patient Protection and Affordable Care Act;
commercial and wholesale credit risks, including the availability
of creditworthy customers and counterparties, and liquidity in the
wholesale energy trading market; accounting effects and other risks
associated with hedging activities and use of derivatives
contracts; the ability to optimize our physical assets; any
potential need to record a valuation allowance for our deferred tax
assets; changes to tax laws and regulations; weather and economic
conditions; the ability to comply with debt covenants; demographic
changes in NJR’s service territory and their effect on NJR’s
customer growth; the impact of natural disasters, terrorist
activities and other extreme events on our operations and
customers; the costs of compliance with present and future
environmental laws, including potential climate change-related
legislation; environmental-related and other uncertainties related
to litigation or administrative proceedings; risks related to our
employee workforce; and risks associated with the management of our
joint ventures and partnerships, and investment in a master limited
partnership. The aforementioned factors are detailed in the “Risk
Factors” sections of our Form 10-K that we filed with the
Securities and Exchange Commission (SEC) on November 21, 2017,
which is available on the SEC’s website at sec.gov. Information
included in this 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 release includes the non-GAAP financial measures NFE
(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 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 (losses) 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 NJRES, net of applicable tax adjustments as
described below. Volatility associated with the change in value of
these financial instruments and physical commodity contracts is
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 NJRCEV, as
such adjustment is related to tax credits generated by NJRCEV.
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 that move in relation to each other. Natural gas costs,
sales, expenses and other taxes and regulatory rider expenses are
passed through to customers and, therefore, have no effect on 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 2017 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 7,400 miles of
natural gas transportation and distribution infrastructure to serve
over half a million customers in New Jersey’s Monmouth, Ocean and
parts of Morris, Middlesex and Burlington counties.
- NJR Clean Energy Ventures
invests in, owns and operates solar and onshore wind projects with
a total capacity of more than 315 megawatts, providing residential
and commercial customers with low-carbon solutions.
- NJR 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.
- NJR Midstream serves customers
from local distributors and producers to electric generators and
wholesale marketers through its 50 percent equity ownership in the
Steckman Ridge natural gas storage facility and its stake in
Dominion Midstream Partners, L.P., as well as its 20 percent equity
interest in the PennEast Pipeline Project.
- NJR 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 1,000 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 Three Months Ended
Twelve Months Ended September 30, September
30, (Thousands, except per share data)
2017 2016
2017 2016
OPERATING REVENUES Utility
$
93,173 $ 80,998
$ 695,637 $ 594,346 Nonutility
443,347 388,243
1,572,980
1,286,559 Total operating revenues
536,520 469,241
2,268,617 1,880,905
OPERATING EXPENSES
Gas purchases Utility
37,798 30,295
258,687 205,034
Nonutility
431,509 308,820
1,436,740 1,139,301
Related parties
2,081 2,092
8,340 8,351
Operation and maintenance
66,173 57,596
226,356 208,421 Regulatory rider
expenses
2,533 2,097
40,243 39,300 Depreciation and
amortization
21,493 19,851
81,841 72,748 Energy and
other taxes
6,984 6,010
49,366
40,215 Total operating expenses
568,571 426,761
2,101,573 1,713,370
OPERATING (LOSS)
INCOME (32,051 ) 42,480
167,044 167,535
Other income, net
2,050 2,764
14,437 9,196 Interest
expense, net
11,671 9,111
44,886
31,044
(LOSS) INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS
OF AFFILIATES (41,672 ) 36,133
136,595
145,687 Income tax (benefit) provision
(1,791 )
13,183
18,343 23,530 Equity in earnings of affiliates
3,358 2,450
13,813 9,515
NET
(LOSS) INCOME $ (36,523 ) $ 25,400
$ 132,065 $ 131,672
(LOSS) EARNINGS
PER COMMON SHARE Basic
$ (0.42 ) $ 0.30
$ 1.53 $ 1.53 Diluted
$ (0.42 )
$ 0.29
$ 1.52 $ 1.52
DIVIDENDS DECLARED PER COMMON SHARE $ 0.27
$ 0.26
$ 1.04 $ 0.98
WEIGHTED AVERAGE SHARES OUTSTANDING Basic
86,513
86,060
86,321 85,884 Diluted
86,513 86,940
87,144 86,731
RECONCILIATION OF NON-GAAP PERFORMANCE
MEASURES Three Months Ended Twelve
Months Ended September 30, September 30,
(Thousands)
2017 2016
2017
2016
NEW JERSEY RESOURCES
A reconciliation of net income, the closest
GAAP financial measurement, to net financial earnings, is as
follows: Net (loss) income
$ (36,523
) $ 25,400
$ 132,065 $ 131,672 Add: Unrealized
loss (gain) on derivative instruments and related transactions
31,293 (11,027 )
(11,241 ) 46,883 Tax effect
(11,845 ) 4,003
4,062 (17,018 ) Effects of
economic hedging related to natural gas inventory
8,878
(28,195 )
38,470 (36,816 ) Tax effect
(2,887 )
10,235
(13,964 ) 13,364 Net income to NFE tax
adjustment
(1,408 ) (2,475 )
— —
Net financial (loss) earnings $ (12,492
) $ (2,059 )
$ 149,392 $ 138,085
Weighted Average Shares Outstanding Basic
86,513 86,060
86,321 85,884 Diluted
86,513
86,060
87,144 86,731
A
reconciliation of basic earnings per share, the closest GAAP
financial measurement, to basic net financial earnings per share,
is as follows: Basic (loss) earnings per share
$ (0.42 ) $ 0.30
$ 1.53 $ 1.53
Add: Unrealized loss (gain) on derivative instruments and related
transactions
$ 0.36 $ (0.13 )
$ (0.13
) $ 0.55 Tax effect
$ (0.13 ) $ 0.05
$ 0.05 $ (0.20 ) Effects of economic hedging related
to natural gas inventory
$ 0.10 $ (0.33 )
$
0.45 $ (0.43 ) Tax effect
$ (0.03 ) $
0.12
$ (0.17 ) $ 0.16 Net income to NFE tax
adjustment
$ (0.02 ) $ (0.03 )
$
— $ —
Basic NFE per share $
(0.14 ) $ (0.02 )
$ 1.73 $ 1.61
NATURAL GAS DISTRIBUTION
A reconciliation of operating revenue, the
closest GAAP financial measurement, to utility gross margin is as
follows: Operating revenues
$ 93,173 $
80,998
$ 695,637 $ 594,346 Less: Gas purchases
40,123 33,003
269,480 215,849 Energy and other taxes
4,121 3,566
37,917 29,832 Regulatory rider expense
2,533 2,097
40,243 39,300
Utility gross margin $ 46,396 $ 42,332
$ 347,997 $ 309,365
Three Months Ended Twelve Months Ended
September 30, September 30, (Thousands)
2017 2016
2017 2016
CLEAN
ENERGY VENTURES
A reconciliation of net income to net
financial earnings, is as follows: Net (loss) income
$ (5,580 ) $ 8,970
$ 24,873 $
28,393 Add: Net income to NFE tax adjustment
(1,408 )
(2,475 )
— —
Net financial earnings
$ (6,988 ) $ 6,495
$
24,873 $ 28,393
NJR ENERGY
SERVICES
The following table is a computation of financial
margin: Operating revenues
$ 398,074 $
348,295
$ 1,462,681 $ 1,197,253 Less: Gas purchases
432,635 309,975
1,441,310 1,153,911 Add: Unrealized
loss (gain) on derivative instruments and related transactions
31,598 (11,703 )
(10,063 ) 48,855 Effects of
economic hedging related to natural gas inventory
8,878
(28,195 )
38,470 (36,816 )
Financial
margin $ 5,915 $ (1,578 )
$
49,778 $ 55,381
A reconciliation of
operating income, the closest GAAP financial measurement, to
financial margin is as follows: Operating (loss) income
$ (41,711 ) $ 31,208
$ (793
) $ 22,292 Add: Operation and maintenance expense
6,485 6,862
20,313 20,025 Depreciation and
amortization
14 19
63 88 Other taxes
651
231
1,788 937 Subtotal
(34,561 ) 38,320
21,371 43,342 Add: Unrealized
loss (gain) on derivative instruments and related transactions
31,598 (11,703 )
(10,063 ) 48,855 Effects of
economic hedging related to natural gas inventory
8,878
(28,195 )
38,470 (36,816 )
Financial
margin $ 5,915 $ (1,578 )
$
49,778 $ 55,381
A reconciliation of
net income to net financial earnings, is as follows: Net
(loss) income
$ (27,241 ) $ 19,764
$
476 $ 14,265 Add: Unrealized loss (gain) on derivative
instruments and related transactions
31,598 (11,703 )
(10,063 ) 48,855 Tax effect
(11,960 )
4,248
3,635 (17,734 ) Effects of economic hedging related to
natural gas, net of taxes
8,878 (28,195 )
38,470
(36,816 ) Tax effect
(2,887 ) 10,235
(13,964 ) 13,364
Net financial (loss)
earnings $ (1,612 ) $ (5,651 )
$
18,554 $ 21,934
Three Months
Ended Twelve Months Ended September 30,
September 30, (Thousands, except per share data)
2017 2016
2017 2016
NEW
JERSEY RESOURCES
Operating Revenues Natural Gas
Distribution
$ 93,173 $ 80,998
$
695,637 $ 594,346 Clean Energy Ventures
28,969 25,381
64,394 53,540 Energy Services
398,074 348,295
1,462,681 1,197,253 Midstream
— —
— — Home
Services and Other
16,673 16,585
49,591
48,497
Sub-total 536,889 471,259
2,272,303 1,893,636 Eliminations
(369 ) (2,018
)
(3,686 ) (12,731 )
Total $
536,520 $ 469,241
$ 2,268,617
$ 1,880,905
Operating (Loss) Income Natural
Gas Distribution
$ (8,043 ) $ (5,937 )
$ 151,641 $ 126,233 Clean Energy Ventures
12,539 12,656
7,903 9,772 Energy Services
(41,711 ) 31,208
(793 ) 22,292
Midstream
(1,565 ) (358 )
(2,322 )
(1,243 ) Home Services and Other
5,179 4,459
4,611 3,633
Sub-total (33,601
) 42,028
161,040 160,687 Eliminations
1,550
452
6,004 6,848
Total
$ (32,051 ) $ 42,480
$
167,044 $ 167,535
Equity in Earnings of
Affiliates Midstream
$ 4,298 $ 3,524
$
17,797 $ 13,936 Eliminations
(940 ) (1,074 )
(3,984 ) (4,421 )
Total $ 3,358
$ 2,450
$ 13,813 $ 9,515
Net (loss) income Natural Gas Distribution
$
(9,602 ) $ (7,390 )
$ 86,930 $ 76,104
Clean Energy Ventures
(5,580 ) 8,970
24,873
28,393 Energy Services
(27,241 ) 19,764
476
14,265 Midstream
2,563 2,496
12,857 9,406 Home
Services and Other
3,266 2,220
6,811
2,882
Sub-total (36,594 ) 26,060
131,947 131,050 Eliminations
71 (660 )
118 622
Total $ (36,523
) $ 25,400
$ 132,065 $ 131,672
Net financial (loss) earnings Natural Gas
Distribution
$ (9,602 ) $ (7,390 )
$
86,930 $ 76,104 Clean Energy Ventures
(6,988 )
6,495
24,873 28,393 Energy Services
(1,612 )
(5,651 )
18,554 21,934 Midstream
2,563 2,496
12,857 9,406 Home Services and Other
3,266
2,220
6,811 2,882
Sub-total
(12,373 ) (1,830 )
150,025 138,719
Eliminations
(119 ) (229 )
(633 ) (634
)
Total $ (12,492 ) $ (2,059 )
$
149,392 $ 138,085
Throughput (Bcf)
NJNG, Core Customers
24.1 23.9
118.8 119.8 NJNG, Off
System/Capacity Management
48.6 54.4
178.4 216.7
NJRES Fuel Mgmt. and Wholesale Sales
160.8 140.7
521.6 551.1
Total 233.5
219.0
818.8 887.6
Common
Stock Data Yield at Sept. 30
2.6 % 3.1 %
2.6 % 3.1 % Market Price High
$ 44.30 $
38.92
$ 44.30 $ 38.92 Low
$ 39.50 $
32.27
$ 30.46 $ 28.02 Close at Sept. 30
$
42.15 $ 32.86
$ 42.15 $ 32.86 Shares Out. at
Sept. 30
86,556 86,086
86,556 86,086 Market Cap. at
Sept. 30
$ 3,648,315 $ 2,828,798
$ 3,648,315 $ 2,828,798
Three Months Ended Twelve Months Ended (Unaudited)
September 30, September 30, (Thousands, except
customer and weather data)
2017 2016
2017 2016
NATURAL GAS DISTRIBUTION
Utility Gross Margin Operating revenues
$
93,173 $ 80,998
$ 695,637 $ 594,346 Less: Gas
purchases
40,123 33,003
269,480 215,849 Energy and
other taxes
4,121 3,566
37,917 29,832 Regulatory
rider expense
2,533 2,097
40,243
39,300
Total Utility Gross Margin $
46,396 $ 42,332
$ 347,997
$ 309,365
Utility Gross Margin, Operating Income and Net
Income Residential
$ 24,159 $ 22,271
$
218,093 $ 187,762 Commercial, Industrial & Other
7,353 6,839
51,510 46,878 Firm Transportation
9,314 8,737
58,172 54,841
Total Firm Margin 40,826 37,847
327,775
289,481 Interruptible
1,954 1,223
6,498
4,906
Total System Margin 42,780 39,070
334,273 294,387 Off System/Capacity Management/FRM/Storage
Incentive
3,616 3,262
13,724
14,978
Total Utility Gross Margin 46,396
42,332
347,997 309,365 Operation and maintenance expense
40,716 34,453
142,509 130,575 Depreciation and
amortization
12,629 12,695
49,347 47,828 Other taxes
not reflected in gross margin
1,094 1,121
4,500 4,729
Operating (Loss) Income
$ (8,043 ) $ (5,937 )
$ 151,641
$ 126,233
Net (Loss) Income $
(9,602 ) $ (7,390 )
$ 86,930 $
76,104
Throughput (Bcf) Residential
3.0 2.6
40.7 36.9 Commercial, Industrial & Other
0.8 0.6
8.7 7.3 Firm Transportation
1.7 1.7
14.4 14.1
Total Firm Throughput
5.5 4.9
63.8 58.3 Interruptible
18.6
19.0
55.0 61.5
Total System
Throughput 24.1 23.9
118.8 119.8 Off
System/Capacity Management
48.6 54.4
178.4 216.7
Total Throughput
72.7 78.3
297.2 336.5
Customers Residential
460,013 448,273
460,013
448,273 Commercial, Industrial & Other
26,947 26,218
26,947 26,218 Firm Transportation
42,790
46,608
42,790 46,608
Total Firm
Customers 529,750 521,099
529,750 521,099
Interruptible
33 34
33 34
Total System Customers 529,783 521,133
529,783
521,133 Off System/Capacity Management*
27 30
27 30
Total Customers 529,810
521,163
529,810 521,163 *The
number of customers represents those active during the last month
of the period.
Degree Days Actual
24 17
4,129
3,867 Normal
33 35
4,589 4,689
Percent of Normal
72.7 % 48.6 %
90.0
% 82.5 %
Three Months Ended Twelve Months Ended (Unaudited)
September 30, September 30, (Thousands, except
customer, SREC and megawatt)
2017 2016
2017 2016
CLEAN ENERGY VENTURES
Operating Revenues SREC sales
$ 22,644 $
20,216
$ 40,453 $ 36,243 Wind electricity sales and
other
2,722 2,337
12,953 8,747 Solar electricity
sales and other
1,849 1,460
4,833 3,867 Sunlight
Advantage
1,755 1,367
6,155
4,683
Total Operating Revenues $ 28,970
$ 25,380
$ 64,394 $ 53,540
Depreciation and Amortization $ 8,716 $
6,915
$ 31,834 $ 23,971
Operating Income $ 12,539 $ 12,656
$ 7,903 $ 9,772
Income Tax
(Provision) Benefit $ (13,604 ) $ (1,841 )
$ 31,161 $ 26,592
Net (Loss)
Income $ (5,580 ) $ 8,970
$
24,873 $ 28,393
Net Financial (Loss)
Earnings $ (6,988 ) $ 6,495
$ 24,873 $ 28,393
Solar Renewable
Energy Certificates Generated 71,791 59,011
197,521 160,009
Solar Renewable
Energy Certificates Sold 96,630 92,708
173,299 169,077
Solar Megawatts Eligible
for ITCs 7.6 15.8
39.5 32.2
Solar Megawatts Under Construction 11.2
0.7
11.2 0.7
Wind Megawatts
Installed/Acquired — 6.3
39.9
57.0
Wind Megawatts Under Construction
— 39.9
— 39.9
ENERGY
SERVICES
Operating Income Operating revenues
$
398,074 $ 348,295
$ 1,462,681 $ 1,197,253
Less: Gas purchases
432,635 309,975
1,441,310
1,153,911 Operation and maintenance expense
6,485 6,862
20,313 20,025 Depreciation and amortization
14 19
63 88 Energy and other taxes
651 231
1,788 937
Operating (Loss) Income $
(41,711 ) $ 31,208
$ (793
) $ 22,292
Net (Loss) Income $
(27,241 ) $ 19,764
$ 476
$ 14,265
Financial Margin $ 5,915
$ (1,578 )
$ 49,778 $ 55,381
Net Financial (Loss) Earnings $ (1,612
) $ (5,651 )
$ 18,554 $ 21,934
Gas Sold and Managed (Bcf) 160.8 140.7
521.6 551.1
MIDSTREAM
Equity in Earnings of
Affiliates $ 4,298 $ 3,524
$
17,797 $ 13,936
Other Income $
1,169 $ 848
$ 4,162 $
3,130
Income Tax Provision $ 1,060
$ 1,459
$ 5,820 $ 6,130
Net Income $ 2,563 $ 2,496
$ 12,857 $ 9,406
HOME SERVICES AND OTHER
Operating Revenues $ 16,673 $ 16,585
$ 49,591 $ 48,497
Operating
Income $ 5,179 $ 4,459
$
4,611 $ 3,633
Other Income, Net
$ 366 $ 266
$ 6,467
$ 869
Net Income $ 3,266
$ 2,220
$ 6,811 $ 2,882
Total
Service Contract Customers at September 30 111,847
113,791
111,847 113,791
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171121005209/en/
New Jersey ResourcesMedia:Michael Kinney,
732-938-1031mkinney@njresources.comorInvestors:Dennis Puma,
732-938-1229dpuma@njresources.com
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