Second Guidance Increase This Fiscal
Year
Today, New Jersey Resources (NYSE: NJR) reported results for the
second-quarter of fiscal 2021. Highlights include:
- Consolidated net income of $149.8 million, compared with $73.8
million in the second-quarter of fiscal 2020
- Consolidated net financial earnings (NFE), a non-GAAP financial
measure, of $170.6 million, or $1.77 per share, compared with $84.3
million, or $0.88 per share, in the second quarter of fiscal
2020
- Increased NFE per share (NFEPS) guidance to a range of $2.05 to
$2.15 for fiscal 2021 primarily driven by the performance of our
Energy Services business
- Energy Services reported second-quarter 2021 NFE of $96.5
million driven by strong market demand due to colder weather in
February 2021
- New Jersey Natural Gas (NJNG) filed a rate case with the New
Jersey Board of Public Utilities (BPU), seeking a $165.7 million
increase in delivery rates
- NJNG received approval from the BPU for SAVEGREEN 2020, a new
three-year, $259 million energy efficiency program
Second-quarter fiscal 2021 net income totaled $149.8 million, or
$1.56 per share, compared with $73.8 million, or $0.78 per share,
during the same period in fiscal 2020. Fiscal 2021 year-to-date net
income totaled $230.9 million, or $2.40 per share, compared with
$149.6 million, or $1.60 per share, for the same period in fiscal
2020.
Second-quarter fiscal 2021 NFE totaled $170.6 million, or $1.77
per share, compared with $84.3 million, or $0.88 per share, during
the same period in fiscal 2020. Fiscal 2021 year-to-date NFE
totaled $215.3 million, or $2.24 per share, compared with $119.2
million, or $1.27 per share, for the same period in fiscal
2020.
"The results in the second quarter illustrate the value of
Energy Services' long-option strategy as we work to deliver more
fee-based revenues," said Steve Westhoven, President and CEO of New
Jersey Resources. "These impressive results have enabled us to
increase our fiscal 2021 guidance for the second time this year and
continue to deliver value to our shareowners."
Key Performance Metrics
Three Months Ended
Six Months Ended
March 31,
March 31,
($ in Thousands)
2021
2020
2021
2020
Net income
$
149,809
$
73,846
$
230,854
$
149,598
Basic EPS
$
1.56
$
0.78
$
2.40
$
1.60
Net financial earnings
$
170,604
$
84,291
$
215,261
$
119,222
Basic net financial earnings per share
$
1.77
$
0.88
$
2.24
$
1.27
Effective October 1, 2020, NJR changed its method of accounting
for Investment Tax Credits (ITCs) from the flow through method to
the deferral method. The change is applied retrospectively to all
periods presented in our second-quarter fiscal 2021 Form 10-Q (Form
10-Q) that will be filed with the U.S. Securities and Exchange
Commission (SEC). Our historical financial reporting presented
herein has been retrospectively revised to apply this change. For
additional details, please refer to our Form 10-Q.
A reconciliation of net income to NFE for the three and six
months ended March 31, 2021, and 2020, is provided below.
Three Months Ended
Six Months Ended
March 31,
March 31,
(Thousands)
2021
2020
2021
2020
Net income
$
149,809
$
73,846
$
230,854
$
149,598
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
29,255
(3,773)
(8,235)
(45,539)
Tax effect
(6,954)
897
1,958
10,828
Effects of economic hedging related to
natural gas inventory
(7,209)
14,622
(14,741)
5,735
Tax effect
1,713
(3,475)
3,503
(1,363)
Net income to NFE tax adjustment
3,990
2,174
1,922
(37)
Net financial earnings
$
170,604
$
84,291
$
215,261
$
119,222
Weighted Average Shares
Outstanding
Basic
96,248
95,584
96,181
93,747
Diluted
96,618
95,890
96,598
94,073
Basic earnings per share
$
1.56
$
0.78
$
2.40
$
1.60
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
0.30
(0.04)
(0.09)
(0.49)
Tax effect
(0.08)
0.01
0.02
0.11
Effects of economic hedging related to
natural gas inventory
(0.07)
0.15
(0.15)
0.06
Tax effect
0.02
(0.04)
0.04
(0.01)
Net income to NFE tax adjustment
0.04
0.02
0.02
—
Basic net financial earnings per
share
$
1.77
$
0.88
$
2.24
$
1.27
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 NJR, during the interim periods, to estimate its
annual effective tax rate and use this rate to calculate the
year-to-date tax provision. NJR also determines an annual estimated
effective tax rate for NFE purposes and calculates a quarterly tax
adjustment based on the differences between its forecasted net
income and its forecasted NFE for the fiscal year.
A table detailing NFE for the three and six months ended March
31, 2021, and 2020, is provided below.
Net Financial Earnings (Loss) by
Business Unit
Three Months Ended
Six Months Ended
March 31,
March 31,
(Thousands)
2021
2020
2021
2020
New Jersey Natural Gas
$
80,541
$
86,336
$
130,008
$
130,192
Clean Energy Ventures
(8,872)
(8,829)
(19,146)
(17,008)
Storage and Transportation
4,711
4,258
8,219
7,262
Energy Services
96,528
2,487
98,028
(2,635)
Home Services and Other
747
148
685
1,257
Subtotal
173,655
84,400
217,794
119,068
Eliminations
(3,051)
(109)
(2,533)
154
Total
$
170,604
$
84,291
$
215,261
$
119,222
Fiscal 2021 NFE Guidance Increased Again:
NJR increased fiscal 2021 NFE guidance to a range of $2.05 to
$2.15 per share primarily driven by the performance of our Energy
Services business during the February weather event. The March 15th
guidance update included an estimate of potential bad debt exposure
and our revised guidance reflects a refined estimate of our
remaining exposure. Today's fiscal 2021 NFE guidance increase is
subject to the risks and uncertainties identified below under
“Forward-Looking Statements.” The following chart represents NJR’s
current expected contributions from its subsidiaries for fiscal
2021:
Company
Expected Fiscal 2021 Net
Financial Earnings Contribution
New Jersey Natural Gas
51 to 55 percent
Clean Energy Ventures
9 to 14 percent
Storage and Transportation
6 to 10 percent
Energy Services
25 to 30 percent
Home Services and Other
0 to 2 percent
In providing fiscal 2021 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 or significance 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.
New Jersey Natural Gas
NJNG reported second-quarter fiscal 2021 NFE of $80.5 million,
compared to NFE of $86.3 million during the same period in fiscal
2020. The decrease in NFE for the quarter was due primarily to
higher O&M expenses related to increased compensation and
technology expense. Fiscal 2021 year-to-date NFE was $130.0
million, compared to NFE of $130.2 million during the same period
in fiscal 2020.
Customer Growth:
- NJNG added 3,694 new customers during the first six months of
fiscal 2021, compared with 4,339 during the same period in fiscal
2020. The lower customer growth was due primarily to the effects of
the COVID-19 pandemic. NJNG continues to expect to add
approximately 28,000 to 30,000 new customers during the three-year
period of fiscal 2021 through 2023.
Base Rate Filing:
- On March 30, 2021, NJNG filed a base rate case with the BPU,
seeking a $165.7 million increase to its base rates. The filing is
based on an overall return of 7.53 percent with a return on equity
of 10.5 percent. The proposed increase reflects a 56.9 percent
common equity component.
Infrastructure Update:
- 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. Construction on SRL
began in the first quarter of fiscal 2019 and is over 97 percent
complete. The total cost of SRL is estimated to be approximately
$308 million. NJNG expects the project to be placed in service in
fiscal 2021.
- NJNG's Infrastructure Investment Program (IIP) is a new,
five-year, $150 million program approved by the BPU on October 28,
2020. The IIP consists of a series of infrastructure projects
designed to enhance the safety and reliability of NJNG's natural
gas distribution system.
- 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 the first
six months of fiscal 2021, NJNG invested $15.5 million to replace
14 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 second-quarter of fiscal 2021, construction continued on a new
regulator station, the final portion of the North Seaside
Reinforcement project. The project is expected to be complete in
the third quarter of fiscal 2021.
- The SAFE II and NJ RISE programs are eligible for annual base
rate increases. On March 31, 2021, NJNG filed its annual petition
with the BPU, requesting a base rate increase of approximately $0.3
million for the recovery of the related capital costs through June
30, 2021. NJNG expects to update the filing in July 2021 to reflect
actual results through June 30, 2021, with changes to base rates
expected to be effective October 1, 2021. The IIP program will have
a similar rate recovery mechanism which is expected to be filed in
March 2022.
BGSS Incentive Programs:
BGSS incentive programs contributed $2.1 million to utility
gross margin in the second-quarter of fiscal 2021, compared with
$1.6 million during the same period in fiscal 2020. The higher
results for the second quarter were due primarily to improved
margins in off-system sales compared to the same period last
year.
Fiscal 2021 year-to-date, these programs contributed $6.7
million to utility gross margin, compared with $4.3 million during
the same period in fiscal 2020, a 56 percent increase. The higher
results for fiscal 2021 year-to-date were due primarily to improved
margins in off-system sales and storage incentives compared to the
same period last year.
For more information on utility gross margin, please see
"Non-GAAP Financial Information" at the end of the press
release.
Energy-Efficiency Programs:
SAVEGREEN invested $9.4 million during the first six months of
fiscal 2021 to help customers with energy-efficiency upgrades for
their homes and businesses. NJNG recovered $5.3 million of its
outstanding investments during the first six months of fiscal
2021.
- On March 4, 2021, NJNG received approval from the BPU for a
three-year, $259 million SAVEGREEN 2020 program. The program is
effective on July 1, 2021.
Clean Energy Ventures (CEV)
CEV reported a net financial loss of $8.9 million during the
second quarter of fiscal 2021, compared with a net financial loss
of $8.8 million during the same period in fiscal 2020. Fiscal 2021
year-to-date net financial loss was $19.1 million, compared with a
net financial loss of $17.0 million during the same period in
fiscal 2020.
The year-to-date decrease in NFE was due primarily to lower
income tax benefit and higher O&M related to increased project
maintenance and information technology expenses, partially offset
by decreased depreciation expense.
Solar Investment Update:
- In the second-quarter of fiscal 2021, CEV placed the East
Hampton solar facility into service, adding 2.7 MW to total
installed capacity.
Storage and Transportation
Storage and Transportation, formerly known as our Midstream
reporting segment, reported second-quarter fiscal 2021 NFE of $4.7
million, compared with $4.3 million during the same period in
fiscal 2020. Fiscal 2021 year-to-date NFE was $8.2 million,
compared with NFE of $7.3 million during the same period in fiscal
2020. The increase in both periods was due primarily to increased
hub services revenue from Leaf River compared to the prior
periods.
Infrastructure Updates:
- Adelphia Gateway - During the second quarter of fiscal
2021, Adelphia Gateway received all necessary permits from the
Pennsylvania Department of Environmental Protection and filed for a
FERC Notice to Proceed for construction of laterals. NJR expects to
place a number facilities into service by the end of the year.
- PennEast - On February 3, 2021, the U.S. Supreme Court
granted PennEast's petition for a writ of certiorari seeking to
overturn the September 10, 2019 Third Circuit decision vacating the
New Jersey Federal District Court's December 13, 2018 condemnation
order. Oral arguments for the case were heard on April 28, 2021,
and a decision is expected in fiscal 2021.
Energy Services
Energy Services reported second-quarter fiscal 2021 NFE of $96.5
million, compared with NFE of $2.5 million for the same period last
fiscal year. Fiscal 2021 year-to-date NFE was $98.0 million,
compared with a net financial loss of $2.6 million during the same
period in fiscal 2020. The increase in NFE for both periods was due
primarily to higher natural gas price volatility in February 2021,
as a result of cold weather in regions where Energy Services had
contracted rights to storage assets.
Home Services and Other Operations
Home Services and Other Operations reported second-quarter
fiscal 2021 NFE of $0.7 million compared to NFE of $0.1 million for
the same period in fiscal 2020. The increase in NFE for the quarter
is due primarily to increased service contract and installation
revenue. Fiscal 2021 year-to-date NFE was $0.7 million, compared
with NFE of $1.3 million during the same period in fiscal 2020. The
fiscal year-to-date decrease in NFE was due primarily to increased
interest expense compared to the same period last year.
Capital Expenditures and Cash Flows:
NJR is committed to maintaining a strong financial profile.
- During the first six months of fiscal 2021, capital
expenditures spent and accrued were $257.6 million, of which $188.4
million were related to NJNG, compared with $381.8 million, of
which $155.0 million were related to NJNG, during the same period
in fiscal 2020. Fiscal 2020 capital expenditures include the $167.5
million acquisition cost of Adelphia Gateway.
- During the first six months of fiscal 2021, cash flows from
operations were $356.3 million, compared with $179.1 million during
the same period of fiscal 2020. The increase was due primarily to
increased NFE at Energy Services and changes in working
capital.
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
NFEPS guidance for fiscal 2021, results of ongoing and future rate
cases, forecasted contribution of business segments to NJR’s NFE
for fiscal 2021, customer growth at NJNG, future NJR and NJNG
capital expenditures, infrastructure programs and investments such
as SRL, IIP, SAFE II, NJ RISE and energy efficiency programs, the
ability to construct and operate the Adelphia Gateway Pipeline
project, and construct SRL and PennEast, and the timing of a U.S.
Supreme Court decision regarding PennEast.
Additional information and factors that could cause actual
results to differ materially from NJR’s expectations are contained
in NJR’s filings with the 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 NJRES.
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 more than 360 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 nearly 1,200 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.
NJR-E
NEW JERSEY RESOURCES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
Six Months Ended
March 31,
March 31,
(Thousands, except per share data)
2021
2020
2021
2020
OPERATING REVENUES
Utility
$
310,167
$
297,220
$
505,896
$
516,843
Nonutility
492,020
342,394
750,596
737,807
Total operating revenues
802,187
639,614
1,256,492
1,254,650
OPERATING EXPENSES
Gas purchases
Utility
113,235
111,563
169,380
203,377
Nonutility
330,488
318,384
503,735
635,740
Related parties
1,730
1,506
3,464
3,030
Operation and maintenance
110,265
66,832
183,901
130,177
Regulatory rider expenses
18,413
15,330
29,114
27,072
Depreciation and amortization
26,848
27,516
54,210
52,153
Total operating expenses
600,979
541,131
943,804
1,051,549
OPERATING INCOME
201,208
98,483
312,688
203,101
Other income, net
5,007
7,261
9,124
7,547
Interest expense, net of capitalized
interest
20,153
19,203
39,939
35,273
INCOME BEFORE INCOME TAXES AND EQUITY
IN EARNINGS OF AFFILIATES
186,062
86,541
281,873
175,375
Income tax provision
39,057
16,284
56,498
32,755
Equity in earnings of affiliates
2,804
3,589
5,479
6,978
NET INCOME
$
149,809
$
73,846
$
230,854
$
149,598
EARNINGS PER COMMON SHARE
Basic
$
1.56
$
0.78
$
2.40
$
1.60
Diluted
$
1.55
$
0.77
$
2.39
$
1.59
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic
96,248
95,584
96,181
93,747
Diluted
96,618
95,890
96,598
94,073
RECONCILIATION OF NON-GAAP
PERFORMANCE MEASURES
Three Months Ended
Six Months Ended
March 31,
March 31,
(Thousands)
2021
2020
2021
2020
NEW JERSEY RESOURCES
A reconciliation of net income, the
closest GAAP financial measurement, to net financial earnings is as
follows:
Net income
$
149,809
$
73,846
$
230,854
$
149,598
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
29,255
(3,773)
(8,235)
(45,539)
Tax effect
(6,954)
897
1,958
10,828
Effects of economic hedging related to
natural gas inventory
(7,209)
14,622
(14,741)
5,735
Tax effect
1,713
(3,475)
3,503
(1,363)
Net income to NFE tax adjustment
3,990
2,174
1,922
(37)
Net financial earnings
$
170,604
$
84,291
$
215,261
$
119,222
Weighted Average Shares
Outstanding
Basic
96,248
95,584
96,181
93,747
Diluted
96,618
95,890
96,598
94,073
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
$
1.56
$
0.78
$
2.40
$
1.60
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
$
0.30
$
(0.04)
$
(0.09)
$
(0.49)
Tax effect
$
(0.08)
$
0.01
$
0.02
$
0.11
Effects of economic hedging related to
natural gas inventory
$
(0.07)
$
0.15
$
(0.15)
$
0.06
Tax effect
$
0.02
$
(0.04)
$
0.04
$
(0.01)
Net income to NFE tax adjustment
$
0.04
$
0.02
$
0.02
$
—
Basic NFE per share
$
1.77
$
0.88
$
2.24
$
1.27
NATURAL GAS DISTRIBUTION
A reconciliation of operating revenue,
the closest GAAP financial measurement, to utility gross margin is
as follows:
Operating revenues
$
310,167
$
297,220
$
505,896
$
516,843
Less:
Gas purchases
118,452
114,256
177,761
210,078
Regulatory rider expense
18,413
15,330
29,114
27,072
Utility gross margin
$
173,302
$
167,634
$
299,021
$
279,693
Three Months Ended
Six Months Ended
(Unaudited)
March 31,
March 31,
(Thousands)
2021
2020
2021
2020
ENERGY SERVICES
The following table is a computation of
financial margin:
Operating revenues
$
462,569
$
313,701
$
692,046
$
684,116
Less: Gas purchases
330,280
318,912
504,117
636,636
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
29,348
(3,146)
(9,433)
(45,340)
Effects of economic hedging related to
natural gas inventory
(7,209)
14,622
(14,741)
5,735
Financial margin
$
154,428
$
6,265
$
163,755
$
7,875
A reconciliation of operating income,
the closest GAAP financial measurement, to financial margin is as
follows:
Operating income
$
99,278
$
(10,060)
$
150,860
$
37,864
Add:
Operation and maintenance expense
32,998
4,822
37,014
9,560
Depreciation and amortization
13
27
55
56
Subtotal
132,289
(5,211)
187,929
47,480
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
29,348
(3,146)
(9,433)
(45,340)
Effects of economic hedging related to
natural gas inventory
(7,209)
14,622
(14,741)
5,735
Financial margin
$
154,428
$
6,265
$
163,755
$
7,875
A reconciliation of net income to net
financial earnings is as follows:
Net income (loss)
$
75,662
$
(8,435)
$
114,534
$
27,590
Add:
Unrealized loss (gain) on derivative
instruments and related transactions
29,348
(3,146)
(9,433)
(45,340)
Tax effect
(6,976)
747
2,243
10,780
Effects of economic hedging related to
natural gas
(7,209)
14,622
(14,741)
5,735
Tax effect
1,713
(3,475)
3,503
(1,363)
Net income to NFE tax adjustment
3,990
2,174
1,922
(37)
Net financial earnings (loss)
$
96,528
$
2,487
$
98,028
$
(2,635)
FINANCIAL STATISTICS BY
BUSINESS UNIT
(Unaudited)
Three Months Ended
Six Months Ended
March 31,
March 31,
(Thousands, except per share data)
2021
2020
2021
2020
NEW JERSEY RESOURCES
Operating Revenues
Natural Gas Distribution
$
310,167
$
297,220
$
505,896
$
516,843
Clean Energy Ventures
6,476
5,995
12,846
12,207
Energy Services
462,569
313,701
692,046
684,116
Storage and Transportation
13,926
11,076
27,030
20,148
Home Services and Other
12,773
12,365
25,350
25,272
Sub-total
805,911
640,357
1,263,168
1,258,586
Eliminations
(3,724)
(743)
(6,676)
(3,936)
Total
$
802,187
$
639,614
$
1,256,492
$
1,254,650
Operating Income (Loss)
Natural Gas Distribution
$
100,876
$
109,719
$
163,788
$
168,776
Clean Energy Ventures
(6,469)
(8,087)
(14,733)
(15,525)
Energy Services
99,278
(10,060)
150,860
37,864
Storage and Transportation
4,185
2,392
7,874
4,559
Home Services and Other
3,292
3,182
5,288
5,310
Sub-total
201,162
97,146
313,077
200,984
Eliminations
46
1,337
(389)
2,117
Total
$
201,208
$
98,483
$
312,688
$
203,101
Equity in Earnings of
Affiliates
Storage and Transportation
$
3,386
$
3,921
$
6,579
$
7,585
Eliminations
(582)
(332)
(1,100)
(607)
Total
$
2,804
$
3,589
$
5,479
$
6,978
Net Income (Loss)
Natural Gas Distribution
$
80,541
$
86,336
$
130,008
$
130,192
Clean Energy Ventures
(8,872)
(8,829)
(19,146)
(17,008)
Energy Services
75,662
(8,435)
114,534
27,590
Storage and Transportation
4,711
4,258
8,219
7,262
Home Services and Other
747
148
685
1,257
Sub-total
152,789
73,478
234,300
149,293
Eliminations
(2,980)
368
(3,446)
305
Total
$
149,809
$
73,846
$
230,854
$
149,598
Net Financial Earnings (Loss)
Natural Gas Distribution
$
80,541
$
86,336
$
130,008
$
130,192
Clean Energy Ventures
(8,872)
(8,829)
(19,146)
(17,008)
Energy Services
96,528
2,487
98,028
(2,635)
Storage and Transportation
4,711
4,258
8,219
7,262
Home Services and Other
747
148
685
1,257
Sub-total
173,655
84,400
217,794
119,068
Eliminations
(3,051)
(109)
(2,533)
154
Total
$
170,604
$
84,291
$
215,261
$
119,222
Throughput (Bcf)
NJNG, Core Customers
33.5
32.3
57.9
63.0
NJNG, Off System/Capacity Management
23.6
28.2
49.5
56.1
Energy Services Fuel Mgmt. and Wholesale
Sales
112.7
155.5
217.5
308.2
Total
169.8
216.0
324.9
427.3
Common Stock Data
Yield at March 31
3.3
%
3.6
%
3.3
%
3.6
%
Market Price at March 31
$
39.87
$
34.97
$
39.87
$
34.97
Shares Out. at March 31
96,262
95,643
96,262
95,643
Market Cap. at March 31
$
3,837,967
$
3,344,642
$
3,837,967
$
3,344,642
Three Months Ended
Six Months Ended
(Unaudited)
March 31,
March 31,
(Thousands, except customer and weather
data)
2021
2020
2021
2020
NATURAL GAS DISTRIBUTION
Utility Gross Margin
Operating revenues
$
310,167
$
297,220
$
505,896
$
516,843
Less:
Gas purchases
118,452
114,256
177,761
210,078
Regulatory rider expense
18,413
15,330
29,114
27,072
Total Utility Gross Margin
$
173,302
$
167,634
$
299,021
$
279,693
Utility Gross Margin, Operating Income
and Net Income
Residential
$
124,468
$
120,541
$
210,443
$
197,623
Commercial, Industrial & Other
23,050
22,884
40,090
38,071
Firm Transportation
22,878
21,469
40,166
37,128
Total Firm Margin
170,396
164,894
290,699
272,822
Interruptible
792
1,153
1,630
2,555
Total System Margin
171,188
166,047
292,329
275,377
Off System/Capacity Management/FRM/Storage
Incentive
2,114
1,587
6,692
4,316
Total Utility Gross Margin
173,302
167,634
299,021
279,693
Operation and maintenance expense
52,951
39,815
96,589
76,000
Depreciation and amortization
19,475
18,100
38,644
34,917
Operating Income
$
100,876
$
109,719
$
163,788
$
168,776
Net Income
$
80,541
$
86,336
$
130,008
$
130,192
Net Financial Earnings
$
80,541
$
86,336
$
130,008
$
130,192
Throughput (Bcf)
Residential
22.7
18.9
36.3
33.5
Commercial, Industrial & Other
4.3
3.6
6.7
6.4
Firm Transportation
5.7
5.1
9.6
9.4
Total Firm Throughput
32.7
27.6
52.6
49.3
Interruptible
0.8
4.7
5.3
13.7
Total System Throughput
33.5
32.3
57.9
63.0
Off System/Capacity Management
23.6
28.2
49.5
56.1
Total Throughput
57.1
60.5
107.4
119.1
Customers
Residential
498,583
491,419
498,583
491,419
Commercial, Industrial & Other
31,313
30,545
31,313
30,545
Firm Transportation
31,545
32,013
31,545
32,013
Total Firm Customers
561,441
553,977
561,441
553,977
Interruptible
28
31
28
31
Total System Customers
561,469
554,008
561,469
554,008
Off System/Capacity Management*
17
28
17
28
Total Customers
561,486
554,036
561,486
554,036
*The number of customers represents those
active during the last month of the period.
Degree Days
Actual
2,355
2,002
3,773
3,613
Normal
2,456
2,496
4,031
4,068
Percent of Normal
95.9
%
80.2
%
93.6
%
88.8
%
Three Months Ended
Six Months Ended
(Unaudited)
March 31,
March 31,
(Thousands, except customer, SREC, TREC
and megawatt)
2021
2020
2021
2020
CLEAN ENERGY VENTURES
Operating Revenues
SREC sales
$
777
$
1,537
$
2,069
$
3,731
TREC sales
817
—
1,507
—
Solar electricity sales and other
2,268
1,989
3,988
3,547
Sunlight Advantage
2,614
2,469
5,282
4,929
Total Operating Revenues
$
6,476
$
5,995
$
12,846
$
12,207
Depreciation and Amortization
$
4,685
$
6,603
$
10,118
$
12,919
Operating (Loss)
$
(6,469)
$
(8,087)
$
(14,733)
$
(15,525)
Income Tax (Benefit)
$
(2,714)
$
(4,134)
$
(5,800)
$
(7,968)
Net (Loss)
$
(8,872)
$
(8,829)
$
(19,146)
$
(17,008)
Net Financial (Loss)
$
(8,872)
$
(8,829)
$
(19,146)
$
(17,008)
Solar Renewable Energy Certificates
Generated
53,863
57,211
141,071
138,700
Solar Renewable Energy Certificates
Sold
3,400
10,000
9,495
19,693
Transition Renewable Energy
Certificates Generated
5,627
—
10,310
—
Solar Megawatts Under
Construction
12.4
32.5
12.4
32.5
ENERGY SERVICES
Operating Income
Operating revenues
$
462,569
$
313,701
$
692,046
$
684,116
Less:
Gas purchases
330,280
318,912
504,117
636,636
Operation and maintenance expense
32,998
4,822
37,014
9,560
Depreciation and amortization
13
27
55
56
Operating Income (Loss)
$
99,278
$
(10,060)
$
150,860
$
37,864
Net Income (Loss)
$
75,662
$
(8,435)
$
114,534
$
27,590
Financial Margin
$
154,428
$
6,265
$
163,755
$
7,875
Net Financial Earnings (Loss)
$
96,528
$
2,487
$
98,028
$
(2,635)
Gas Sold and Managed (Bcf)
112.7
155.5
217.5
308.2
STORAGE AND TRANSPORTATION
Operating Revenues
$
13,926
$
11,076
$
27,030
$
20,148
Equity in Earnings of
Affiliates
$
3,386
$
3,921
$
6,579
$
7,585
Operation and Maintenance
Expense
$
7,139
$
6,094
$
13,681
$
10,972
Other Income, Net
$
1,591
$
4,671
$
2,845
$
5,368
Interest Expense
$
3,578
$
5,621
$
7,560
$
8,443
Income Tax Provision
$
873
$
1,105
$
1,519
$
1,807
Net Income
$
4,711
$
4,258
$
8,219
$
7,262
HOME SERVICES AND OTHER
Operating Revenues
$
12,773
$
12,365
$
25,350
$
25,272
Operating Income
$
3,292
$
3,182
$
5,288
$
5,310
Other Income (Expense), Net
$
(876)
$
(520)
$
(1,700)
$
(1,048)
Net Income
$
747
$
148
$
685
$
1,257
Net Financial Earnings
$
747
$
148
$
685
$
1,257
Total Service Contract Customers at
March 31
106,471
107,648
106,471
107,648
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005634/en/
Media Contact: Michael Kinney 732-938-1031
mkinney@njresources.com
Investor Contact: Dennis Puma 732-938-1229
dpuma@njresources.com
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