Today, New Jersey Resources Corporation (NYSE: NJR) reported
results for the third quarter of fiscal 2022. Highlights
include:
- Consolidated net income of $13.1 million, compared with a net
loss of $(111.8) million in the third quarter of fiscal 2021.
- Consolidated net financial loss, a non-GAAP financial measure,
of $(3.6) million, or $(0.04) per share, compared to a net
financial loss of $(14.1) million, or $(0.15) per share, in the
third quarter of fiscal 2021.
- Increased fiscal 2022 net financial earnings per share (NFEPS)
guidance range to $2.40 to $2.50 from the previously announced
range of $2.30 to $2.40.
Third-quarter fiscal 2022 net income totaled $13.1 million, or
$0.14 per share, compared with a net loss of $(111.8) million, or
$(1.16) per share, during the same period in fiscal 2021. Fiscal
2022 year-to-date net income totaled $220.4 million, or $2.29 per
share, compared with $119.0 million, or $1.24 per share, for the
same period in fiscal 2021.
Third-quarter fiscal 2022 net financial loss totaled $(3.6)
million, or $(0.04) per share, compared to a net financial loss of
$(14.1) million, or $(0.15) per share, during the same period in
fiscal 2021, which included a $72.7 million after-tax impairment
charge related to NJR's investment in the PennEast Project. Fiscal
2022 year-to-date net financial earnings (NFE) totaled $192.4
million, or $2.00 per share, compared with $201.1 million, or $2.09
per share, for the same period in fiscal 2021.
Steve Westhoven, President and CEO, stated, "We are pleased to
raise our fiscal 2022 NFEPS guidance for the second time in fiscal
2022, driven by strong performance at New Jersey Natural Gas
Company (NJNG), greater than anticipated financial margin at our
Energy Services’ business, and increased wholesale electricity
revenue at Clean Energy Ventures (CEV). Our year-to-date financial
results, as well as increased guidance throughout the year, reflect
the strength of our complementary portfolio of businesses."
Key Performance Metrics
Three Months Ended
Nine Months Ended
June 30,
June 30,
($ in Thousands)
2022
2021
2022
2021
Net income (loss)
$
13,053
$
(111,831
)
$
220,400
$
119,023
Basic EPS
$
0.14
$
(1.16
)
$
2.29
$
1.24
Net financial (loss) earnings
$
(3,551
)
$
(14,148
)
$
192,425
$
201,113
Basic net financial (loss) earnings per
share
$
(0.04
)
$
(0.15
)
$
2.00
$
2.09
A reconciliation of net income to NFE for the three and nine
months ended June 30, 2022 and 2021, is provided below.
Three Months Ended
Nine Months Ended
June 30,
June 30,
(Thousands)
2022
2021
2022
2021
Net income (loss)
$
13,053
$
(111,831
)
$
220,400
$
119,023
Add:
Unrealized (gain) loss on derivative
instruments and related transactions
(17,891
)
21,862
(58,060
)
13,627
Tax effect
4,253
(5,198
)
13,809
(3,240
)
Effects of economic hedging related to
natural gas inventory
428
2,486
25,160
(12,255
)
Tax effect
(102
)
(591
)
(5,979
)
2,912
(Gain on) impairment of equity method
investment
(4,021
)
92,000
(4,021
)
92,000
Tax effect
1,003
(11,934
)
1,003
(11,934
)
NFE tax adjustment
(274
)
(942
)
113
980
Net financial (loss) earnings
$
(3,551
)
$
(14,148
)
$
192,425
$
201,113
Weighted Average Shares
Outstanding
Basic
96,154
96,348
96,055
96,237
Diluted
96,620
96,348
96,527
96,629
Basic earnings (loss) per share
$
0.14
$
(1.16
)
$
2.29
$
1.24
Add:
Unrealized (gain) loss on derivative
instruments and related transactions
(0.19
)
0.22
(0.60
)
0.14
Tax effect
0.04
(0.05
)
0.14
(0.03
)
Effects of economic hedging related to
natural gas inventory
—
0.03
0.26
(0.13
)
Tax effect
—
(0.01
)
(0.06
)
0.03
(Gain on) impairment of equity method
investment
(0.04
)
0.95
(0.04
)
0.95
Tax effect
0.01
(0.12
)
0.01
(0.12
)
NFE tax adjustment
—
(0.01
)
—
0.01
Basic net financial (loss) earnings per
share
$
(0.04
)
$
(0.15
)
$
2.00
$
2.09
NFE is a measure of earnings based on the elimination of timing
differences 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. Consequently, to reconcile net income and NFE,
current-period unrealized gains and losses on the derivatives are
excluded from NFE as a reconciling item. Realized derivative gains
and losses are also included in current-period net income. However,
NFE includes only realized gains and losses related to natural gas
sold out of inventory, effectively matching the full earnings
effects of the derivatives with realized margins on physical
natural gas flows. NFE also excludes certain transactions
associated with equity method investments, including impairment
charges, which are non-cash charges, and return of capital in
excess of the carrying value of our investment. These are not
indicative of the Company's performance for its ongoing operations.
Included in the tax effects are current and deferred income tax
expense corresponding with the components of NFE.
A table detailing NFE for the three and nine months ended June
30, 2022 and 2021, is provided below.
Net financial earnings (loss) by
Business Unit
Three Months Ended
Nine Months Ended
June 30,
June 30,
(Thousands)
2022
2021
2022
2021
New Jersey Natural Gas
$
2,648
$
1,581
$
156,511
$
131,589
Clean Energy Ventures
(5,098
)
(4,926
)
(18,410
)
(24,072
)
Storage and Transportation
3,526
2,387
11,113
10,606
Energy Services
(5,003
)
(12,527
)
42,504
85,501
Home Services and Other
215
(384
)
1,113
301
Subtotal
(3,712
)
(13,869
)
192,831
203,925
Eliminations
161
(279
)
(406
)
(2,812
)
Total
$
(3,551
)
$
(14,148
)
$
192,425
$
201,113
Fiscal 2022 NFE Guidance:
NJR increased its fiscal 2022 NFE guidance to $2.40 to $2.50
compared to the previously announced range of $2.30 to $2.40,
subject to the risk and uncertainties identified below under
"Forward-Looking Statements." The following chart represents NJR’s
current expected contributions from its subsidiaries for fiscal
2022:
Company
Expected Fiscal 2022 Net
Financial Earnings Contribution
New Jersey Natural Gas
59 to 61 percent
Clean Energy Ventures
16 to 18 percent
Storage and Transportation
6 to 8 percent
Energy Services
15 to 20 percent
Home Services and Other
0 to 1 percent
In providing fiscal 2022 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 third-quarter fiscal 2022 NFE of $2.6 million,
compared to NFE of $1.6 million during the same period in fiscal
2021. Fiscal 2022 year-to-date NFE were $156.5 million, compared to
NFE of $131.6 million during the same period in fiscal 2021. The
increase for both periods was due primarily to higher base rates,
which became effective on December 1, 2021.
Customer Growth:
- NJNG added 5,274 new customers during the first nine months of
fiscal 2022, compared with 5,448 during the same period in fiscal
2021. NJNG expects these new customers to contribute approximately
$4.4 million of incremental utility gross margin on an annualized
basis.
Infrastructure Update:
- NJNG's Infrastructure Investment Program (IIP) is a
five-year, $150 million accelerated recovery program that began in
fiscal 2021. IIP consists of a series of infrastructure projects
designed to enhance the safety and reliability of NJNG's natural
gas distribution system. Fiscal 2022 year-to-date NJNG spent $23.5
million under the program on various distribution system
reinforcement projects. On March 31, 2022, the Company filed its
first rate recovery request with the BPU. On July 13, 2022, NJNG
updated the filing with actual information through June 30, 2022,
seeking recovery for $28.9 million of investments, including AFUDC,
from November 30, 2020 through June 30, 2022.
Basic Gas Supply Service (BGSS) Incentive Programs:
BGSS incentive programs contributed $1.9 million to utility
gross margin in the third-quarter of fiscal 2022, compared with
$3.3 million during the same period in fiscal 2021.
Fiscal 2022 year-to-date, these programs contributed $12.1
million to utility gross margin, compared with $10.0 million during
the same period in fiscal 2021. The increase year-to-date was due
primarily to increased margins from off-system sales, partially
offset by the timing differences for storage incentives and lower
capacity release volumes.
For more information on utility gross margin, please see
"Non-GAAP Financial Information" below.
Energy-Efficiency Programs:
SAVEGREEN invested $35.7 million during the first nine months of
fiscal 2022 in energy-efficiency upgrades for their customers'
homes and businesses. NJNG recovered $23.5 million of its
outstanding investments during the first nine months of fiscal
2022. On January 26, 2022, the BPU approved the annual SAVEGREEN
filing, which will increase annual recoveries by $2.2 million,
effective February 1, 2022. On June 1, 2022, NJNG submitted its
annual cost recovery filing for the SAVEGREEN programs established
from 2010 through Present. If approved, the proposed rate increase
will increase annual recoveries by $0.5 million, effective October
1, 2022.
Clean Energy Ventures
CEV reported third-quarter fiscal 2022 net financial loss of
$(5.1) million, compared to a net financial loss of $(4.9) million
during the same period in fiscal 2021.
Fiscal 2022 year-to-date net financial loss was $(18.4) million,
compared with a net financial loss of $(24.1) million during the
same period in fiscal 2021. The improvement was due primarily to
the increased operating revenues, partially offset by higher
operating expenses and lower income tax benefit.
CEV now has approximately 675 megawatts (MW) of potential
capital projects under construction, under exclusivity or under
contract, which can be developed through fiscal 2027.
Storage and Transportation
Storage and Transportation reported third-quarter fiscal 2022
NFE of $3.5 million, compared with NFE of $2.4 million during the
same period in fiscal 2021.
Fiscal 2022 year-to-date NFE was $11.1 million, compared with
NFE of $10.6 million during the same period in fiscal 2021. The
increase in both periods was due primarily to increased operating
revenue and AFUDC equity at Adelphia Gateway, partially offset by
lower equity in earnings of affiliates and increased O&M and
depreciation expense.
- Adelphia Gateway - Adelphia Gateway is an 84-mile
pipeline running from Marcus Hook to Martins Creek, Pennsylvania
originally built as an oil pipeline, which is now being repurposed
to deliver natural gas to the Philadelphia and New Jersey markets.
Adelphia Gateway recently completed construction at the Marcus Hook
and Quakertown compressor stations, and the project remains on
track to be completed by the end of the calendar year.
Energy Services
Energy Services reported third-quarter fiscal 2022 net financial
loss of $(5.0) million, compared with a net financial loss of
$(12.5) million for the same period last fiscal year. The higher
NFE for the third quarter of fiscal 2022 were due primarily to the
recognition of revenues from the Asset Management Agreements
(AMAs), which became effective during the first quarter of fiscal
2022.
Fiscal 2022 year-to-date NFE were $42.5 million, compared with
NFE of $85.5 million during the same period in fiscal 2021. The
prior year period's NFE included price volatility related to the
extreme weather in the mid-continent and southern regions of the
U.S. during February 2021, which did not reoccur during 2022,
partially offset by financial margin generated from the AMAs in
fiscal 2022.
Home Services and Other Operations
Home Services and Other Operations reported third-quarter fiscal
2022 NFE of $0.2 million compared to a net financial loss of $(0.4)
million for the same period in fiscal 2021.
Fiscal 2022 year-to-date NFE were $1.1 million, compared with
NFE of $0.3 million during the same period in fiscal 2021. The
increases were due primarily to higher operating income driven by
an increase in installation revenues during the respective
periods.
Capital Expenditures and Cash Flows:
NJR is committed to maintaining a strong financial profile.
- During the first nine months of fiscal 2022, capital
expenditures were $419.4 million, including accruals, of which
$194.8 million were related to NJNG, compared with $462.7 million,
of which $349.4 million were related to NJNG, during the same
period in fiscal 2021. The decrease in capital expenditures was
primarily due to the completion of the Southern Reliability Link
(SRL) project, which was placed into service in August 2021.
- During the first nine months of fiscal 2022, cash flows from
operations were $235.9 million, compared with cash flows from
operations of $341.8 million during the same period of fiscal 2021.
The decrease in operating cash flows was due to higher working
capital requirements as a result of rising energy prices and
outsized performance at Energy Services during February 2021 that
did not reoccur at similar levels during fiscal 2022.
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.
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 2022, long
term annual growth projections, projections of dividend and
financing activities, forecasted contribution of business segments
to NJR’s NFE for fiscal 2022, customer growth at NJNG, future NJR
and NJNG capital expenditures, potential CEV capital projects, CEV
revenue projections, infrastructure programs and investments future
decarbonization opportunities, Asset Management Agreements, the
ability to complete the Adelphia Gateway Pipeline project, and
other legal and regulatory expectations.
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 and financial margin exclude unrealized gains or losses on
derivative instruments related to NJR’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 and certain transactions related to NJR's investments in
the PennEast Project, net of applicable tax adjustments as
described below. Financial margin also differs from gross margin as
defined on a GAAP basis as it excludes certain operations and
maintenance expense and depreciation and amortization as well as
the effects of derivatives as discussed above. 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 NJR Energy Services Company.
NJNG’s utility gross margin is defined as operating revenues
less natural gas purchases, sales tax, and regulatory rider
expense. This measure differs from gross margin as presented on a
GAAP basis as it excludes certain operations and maintenance
expense and depreciation and amortization. Utility gross margin may
also not be comparable to the definition of gross margin used by
others in the natural gas distribution business and other
industries. Management believes that utility gross margin provides
a meaningful basis for evaluating utility operations since natural
gas costs, sales tax and regulatory rider expenses are included in
operating revenues and 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 most recent
Report on Form 10-K, Item 7 and NJR’s Form 10-Q filed on August 4,
2022.
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 7,600 miles of natural gas
transportation and distribution infrastructure to serve over
560,000 customers in New Jersey’s Monmouth, Ocean and parts of
Morris, Middlesex, Sussex and Burlington counties.
- Clean Energy Ventures invests in, owns and operates
solar projects with a total capacity of more than 370 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% equity ownership in
the Steckman Ridge natural gas storage facility.
- 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 over 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.
NEW JERSEY RESOURCES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
Nine Months Ended
June 30,
June 30,
(Thousands, except per share data)
2022
2021
2022
2021
OPERATING REVENUES
Utility
$
199,357
$
127,626
$
937,266
$
633,522
Nonutility
352,978
239,967
1,203,227
990,563
Total operating revenues
552,335
367,593
2,140,493
1,624,085
OPERATING EXPENSES
Gas purchases
Utility
100,277
41,785
435,438
211,165
Nonutility
290,806
236,464
980,135
740,199
Related parties
1,838
1,699
5,567
5,163
Operation and maintenance
88,373
81,878
243,143
265,779
Regulatory rider expenses
8,360
5,456
55,941
34,570
Depreciation and amortization
32,872
27,767
94,700
81,977
Total operating expenses
522,526
395,049
1,814,924
1,338,853
OPERATING INCOME (LOSS)
29,809
(27,456
)
325,569
285,232
Other income, net
4,288
4,817
12,551
13,941
Interest expense, net of capitalized
interest
21,411
18,744
59,814
58,683
INCOME (LOSS) BEFORE INCOME TAXES AND
EQUITY IN EARNINGS OF AFFILIATES
12,686
(41,383
)
278,306
240,490
Income tax provision (benefit)
4,434
(18,785
)
64,051
37,713
Equity in earnings (loss) of
affiliates
4,801
(89,233
)
6,145
(83,754
)
NET INCOME (LOSS)
$
13,053
$
(111,831
)
$
220,400
$
119,023
EARNINGS (LOSS) PER COMMON
SHARE
Basic
$
0.14
$
(1.16
)
$
2.29
$
1.24
Diluted
$
0.14
$
(1.16
)
$
2.28
$
1.23
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic
96,154
96,348
96,055
96,237
Diluted
96,620
96,348
96,527
96,629
RECONCILIATION OF NON-GAAP
PERFORMANCE MEASURES
(Unaudited)
Three Months Ended
Nine Months Ended
June 30,
June 30,
(Thousands)
2022
2021
2022
2021
NEW JERSEY RESOURCES
A reconciliation of net income, the
closest GAAP financial measure, to net financial earnings is as
follows:
Net income (loss)
$
13,053
$
(111,831
)
$
220,400
$
119,023
Add:
Unrealized (gain) loss on derivative
instruments and related transactions
(17,891
)
21,862
(58,060
)
13,627
Tax effect
4,253
(5,198
)
13,809
(3,240
)
Effects of economic hedging related to
natural gas inventory
428
2,486
25,160
(12,255
)
Tax effect
(102
)
(591
)
(5,979
)
2,912
(Gain on) impairment of equity method
investment
(4,021
)
92,000
(4,021
)
92,000
Tax effect
1,003
(11,934
)
1,003
(11,934
)
NFE tax adjustment
(274
)
(942
)
113
980
Net financial (loss) earnings
$
(3,551
)
$
(14,148
)
$
192,425
$
201,113
Weighted Average Shares
Outstanding
Basic
96,154
96,348
96,055
96,237
Diluted
96,620
96,348
96,527
96,629
A reconciliation of basic earnings per
share, the closest GAAP financial measure, to basic net financial
earnings per share is as follows:
Basic earnings (loss) per share
$
0.14
$
(1.16
)
$
2.29
$
1.24
Add:
Unrealized (gain) loss on derivative
instruments and related transactions
$
(0.19
)
$
0.22
$
(0.60
)
$
0.14
Tax effect
$
0.04
$
(0.05
)
$
0.14
$
(0.03
)
Effects of economic hedging related to
natural gas inventory
$
—
$
0.03
$
0.26
$
(0.13
)
Tax effect
$
—
$
(0.01
)
$
(0.06
)
$
0.03
(Gain on) impairment of equity method
investment
$
(0.04
)
$
0.95
$
(0.04
)
$
0.95
Tax effect
$
0.01
$
(0.12
)
$
0.01
$
(0.12
)
NFE tax adjustment
$
—
$
(0.01
)
$
—
$
0.01
Basic NFE per share
$
(0.04
)
$
(0.15
)
$
2.00
$
2.09
NATURAL GAS DISTRIBUTION
A reconciliation of gross margin, the
closest GAAP financial measure, to utility gross margin is as
follows:
Operating revenues
$
199,695
$
127,626
$
938,279
$
633,522
Less:
Natural gas purchases
102,624
44,111
442,441
221,872
Operating and maintenance (1)
25,034
29,437
64,924
80,544
Regulatory rider expense
8,360
5,456
55,941
34,570
Depreciation and amortization
23,951
19,894
70,188
58,538
Gross margin
39,726
28,728
304,785
237,998
Add:
Operating and maintenance (1)
25,034
29,437
64,924
80,544
Depreciation and amortization
23,951
19,894
70,188
58,538
Utility gross margin
$
88,711
$
78,059
$
439,897
$
377,080
(1) Excludes selling, general and administrative expenses of
$26.5 million and $22.2 million for the three months ended June 30,
2022 and 2021, respectively, and approximately $76.1 million and
$67.7 million for the nine months ended June 30, 2022 and 2021,
respectively
Three Months Ended
Nine Months Ended
(Unaudited)
June 30,
June 30,
(Thousands)
2022
2021
2022
2021
ENERGY SERVICES
A reconciliation of gross margin, the
closest GAAP financial measure, to Energy Services' financial
margin is as follows:
Operating revenues
$
307,815
$
201,594
$
1,089,704
$
893,640
Less:
Natural Gas purchases
290,767
237,011
980,600
741,128
Operation and maintenance (1)
5,617
3,663
12,864
28,271
Depreciation and amortization
34
28
94
83
Gross margin
11,397
(39,108
)
96,146
124,158
Add:
Operation and maintenance (1)
5,617
3,663
12,864
28,271
Depreciation and amortization
34
28
94
83
Unrealized (gain) loss on derivative
instruments and related transactions
(16,470
)
22,784
(61,671
)
13,351
Effects of economic hedging related to
natural gas inventory
428
2,486
25,160
(12,255
)
Financial margin
$
1,006
$
(10,147
)
$
72,593
$
153,608
(1) Excludes selling, general and
administrative expenses of $0.6 million and $0.4 million for the
three months ended June 30, 2022 and 2021, respectively, and
approximately $1.7 million and $12.8 million for the nine months
ended June 30, 2022 and 2021, respectively.
A reconciliation of net income (loss)
to net financial (loss) earnings is as follows:
Net income (loss)
$
7,501
$
(30,846
)
$
70,214
$
83,688
Add:
Unrealized (gain) loss on derivative
instruments and related transactions
(16,470
)
22,784
(61,671
)
13,351
Tax effect
3,914
(5,418
)
14,667
(3,175
)
Effects of economic hedging related to
natural gas
428
2,486
25,160
(12,255
)
Tax effect
(102
)
(591
)
(5,979
)
2,912
NFE tax adjustment
(274
)
(942
)
113
980
Net financial (loss) earnings
$
(5,003
)
$
(12,527
)
$
42,504
$
85,501
FINANCIAL STATISTICS BY
BUSINESS UNIT
(Unaudited)
Three Months Ended
Nine Months Ended
June 30,
June 30,
(Thousands, except per share data)
2022
2021
2022
2021
NEW JERSEY RESOURCES
Operating Revenues
Natural Gas Distribution
$
199,695
$
127,626
$
938,279
$
633,522
Clean Energy Ventures
13,795
13,381
35,805
26,227
Energy Services
307,815
201,594
1,089,704
893,640
Storage and Transportation
16,390
11,649
41,875
38,679
Home Services and Other
14,220
13,312
41,393
38,662
Sub-total
551,915
367,562
2,147,056
1,630,730
Eliminations
420
31
(6,563
)
(6,645
)
Total
$
552,335
$
367,593
$
2,140,493
$
1,624,085
Operating Income (Loss)
Natural Gas Distribution
$
13,200
$
6,486
$
228,694
$
170,274
Clean Energy Ventures
(1,209
)
(1,288
)
(7,877
)
(16,021
)
Energy Services
10,833
(39,511
)
94,479
111,349
Storage and Transportation
4,240
2,190
9,296
10,064
Home Services and Other
477
2,836
2,240
8,124
Sub-total
27,541
(29,287
)
326,832
283,790
Eliminations
2,268
1,831
(1,263
)
1,442
Total
$
29,809
$
(27,456
)
$
325,569
$
285,232
Equity in Earnings of
Affiliates
Storage and Transportation
$
5,274
$
(88,615
)
$
7,586
$
(82,036
)
Eliminations
(473
)
(618
)
(1,441
)
(1,718
)
Total
$
4,801
$
(89,233
)
$
6,145
$
(83,754
)
Net Income (Loss)
Natural Gas Distribution
$
2,648
$
1,581
$
156,511
$
131,589
Clean Energy Ventures
(5,098
)
(4,926
)
(18,410
)
(24,072
)
Energy Services
7,501
(30,846
)
70,214
83,688
Storage and Transportation
6,544
(77,679
)
14,131
(69,460
)
Home Services and Other
215
(384
)
1,113
301
Sub-total
11,810
(112,254
)
223,559
122,046
Eliminations
1,243
423
(3,159
)
(3,023
)
Total
$
13,053
$
(111,831
)
$
220,400
$
119,023
Net Financial Earnings (Loss)
Natural Gas Distribution
$
2,648
$
1,581
$
156,511
$
131,589
Clean Energy Ventures
(5,098
)
(4,926
)
(18,410
)
(24,072
)
Energy Services
(5,003
)
(12,527
)
42,504
85,501
Storage and Transportation
3,526
2,387
11,113
10,606
Home Services and Other
215
(384
)
1,113
301
Sub-total
(3,712
)
(13,869
)
192,831
203,925
Eliminations
161
(279
)
(406
)
(2,812
)
Total
$
(3,551
)
$
(14,148
)
$
192,425
$
201,113
Throughput (Bcf)
NJNG, Core Customers
20.0
15.7
78.6
73.6
NJNG, Off System/Capacity Management
20.3
24.9
69.4
74.4
Energy Services Fuel Mgmt. and Wholesale
Sales
40.7
75.0
180.9
292.5
Total
81.0
115.6
328.9
440.5
Common Stock Data
Yield at June 30,
3.3
%
3.4
%
3.3
%
3.4
%
Market Price at June 30,
$
44.53
$
39.57
$
44.53
$
39.57
Shares Out. at June 30,
96,160
96,361
96,160
96,361
Market Cap. at June 30,
$
4,282,015
$
3,813,022
$
4,282,015
$
3,813,022
Three Months Ended
Nine Months Ended
(Unaudited)
June 30,
June 30,
(Thousands, except customer and weather
data)
2022
2021
2022
2021
NATURAL GAS DISTRIBUTION
Utility Gross Margin
Operating revenues
$
199,695
$
127,626
$
938,279
$
633,522
Less:
Natural gas purchases
102,624
44,111
442,441
221,872
Operating and maintenance (1)
25,034
29,437
64,924
80,544
Regulatory rider expense
8,360
5,456
55,941
34,570
Depreciation and amortization
23,951
19,894
70,188
58,538
Gross margin
39,726
28,728
304,785
237,998
Add:
Operating and maintenance (1)
25,034
29,437
64,924
80,544
Depreciation and amortization
23,951
19,894
70,188
58,538
Total Utility Gross Margin
$
88,711
$
78,059
$
439,897
$
377,080
(1) Excludes selling, general and
administrative expenses of $26.5 million and $22.2 million for the
three months ended June 30, 2022 and 2021, respectively, and
approximately $76.1 million and $67.7 million for the nine months
ended June 30, 2022 and 2021, respectively
Utility Gross Margin, Operating Income
and Net Income
Residential
$
55,597
$
48,333
$
303,716
$
258,776
Commercial, Industrial & Other
15,387
14,282
64,609
54,372
Firm Transportation
14,729
11,186
57,101
51,352
Total Firm Margin
85,713
73,801
425,426
364,500
Interruptible
1,060
998
2,420
2,628
Total System Margin
86,773
74,799
427,846
367,128
Off System/Capacity Management/FRM/Storage
Incentive
1,938
3,260
12,051
9,952
Total Utility Gross Margin
88,711
78,059
439,897
377,080
Operation and maintenance expense
51,560
51,679
141,015
148,268
Depreciation and amortization
23,951
19,894
70,188
58,538
Operating Income
$
13,200
$
6,486
$
228,694
$
170,274
Net Income
$
2,648
$
1,581
$
156,511
$
131,589
Net Financial Earnings
$
2,648
$
1,581
$
156,511
$
131,589
Throughput (Bcf)
Residential
6.7
6.6
42.3
42.9
Commercial, Industrial & Other
1.3
1.2
7.9
7.9
Firm Transportation
2.3
2.5
11.5
12.1
Total Firm Throughput
10.3
10.3
61.7
62.9
Interruptible
9.7
5.4
16.9
10.7
Total System Throughput
20.0
15.7
78.6
73.6
Off System/Capacity Management
20.3
24.9
69.4
74.4
Total Throughput
40.3
40.6
148.0
148.0
Customers
Residential
510,931
500,923
510,931
500,923
Commercial, Industrial & Other
31,469
30,789
31,469
30,789
Firm Transportation
26,152
30,925
26,152
30,925
Total Firm Customers
568,552
562,637
568,552
562,637
Interruptible
29
27
29
27
Total System Customers
568,581
562,664
568,581
562,664
Off System/Capacity Management*
19
79
19
79
Total Customers
568,600
562,743
568,600
562,743
*The number of customers represents those
active during the last month of the period.
Degree Days
Actual
452
466
4,097
4,239
Normal
483
481
4,477
4,512
Percent of Normal
93.6
%
96.9
%
91.5
%
93.9
%
Three Months Ended
Nine Months Ended
(Unaudited)
June 30,
June 30,
(Thousands, except customer, SREC, TREC
and megawatt)
2022
2021
2022
2021
CLEAN ENERGY VENTURES
Operating Revenues
SREC sales
$
1,010
$
4,467
$
7,839
$
6,536
TREC sales
1,709
1,568
3,574
3,075
Solar electricity sales and other
8,128
4,625
15,839
8,613
Sunlight Advantage
2,948
2,721
8,553
8,003
Total Operating Revenues
$
13,795
$
13,381
$
35,805
$
26,227
Depreciation and Amortization
$
5,358
$
5,200
$
15,902
$
15,318
Operating (Loss)
$
(1,209
)
$
(1,288
)
$
(7,877
)
$
(16,021
)
Income Tax (Benefit)
$
(1,526
)
$
(1,448
)
$
(5,524
)
$
(7,248
)
Net (Loss)
$
(5,098
)
$
(4,926
)
$
(18,410
)
$
(24,072
)
Net Financial (Loss)
$
(5,098
)
$
(4,926
)
$
(18,410
)
$
(24,072
)
Solar Renewable Energy Certificates
Generated
120,779
134,200
278,681
275,271
Solar Renewable Energy Certificates
Sold
6,573
23,000
38,773
32,495
Transition Renewable Energy
Certificates Generated
12,210
10,896
25,471
21,206
Solar Megawatts Under
Construction
75.5
12.6
75.5
12.6
ENERGY SERVICES
Operating Income
Operating revenues
$
307,815
$
201,594
$
1,089,704
$
893,640
Less:
Gas purchases
290,767
237,011
980,600
741,128
Operation and maintenance expense
6,181
4,066
14,531
41,080
Depreciation and amortization
34
28
94
83
Total Operating Income (Loss)
$
10,833
$
(39,511
)
$
94,479
$
111,349
Net Income (Loss)
$
7,501
$
(30,846
)
$
70,214
$
83,688
Financial Margin
$
1,006
$
(10,147
)
$
72,593
$
153,608
Net Financial (Loss) Earnings
$
(5,003
)
$
(12,527
)
$
42,504
$
85,501
Gas Sold and Managed (Bcf)
40.7
75.0
180.9
292.5
STORAGE AND TRANSPORTATION
Operating Revenues
$
16,390
$
11,649
$
41,875
$
38,679
Equity in Earnings of
Affiliates
$
5,274
$
(88,615
)
$
7,586
$
(82,036
)
Operation and Maintenance
Expense
$
7,840
$
6,689
$
22,524
$
20,370
Other Income, Net
$
1,882
$
1,290
$
7,141
$
4,135
Interest Expense
$
3,177
$
2,937
$
7,160
$
10,497
Income Tax Provision (Benefit)
$
1,675
$
(10,393
)
$
2,732
$
(8,874
)
Net Income (Loss)
$
6,544
$
(77,679
)
$
14,131
$
(69,460
)
Net Financial Earnings
$
3,526
$
2,387
$
11,113
$
10,606
HOME SERVICES AND OTHER
Operating Revenues
$
14,220
$
13,312
$
41,393
$
38,662
Operating Income
$
477
$
2,836
$
2,240
$
8,124
Net Income (Loss)
$
215
$
(384
)
$
1,113
$
301
Net Financial Earnings (Loss)
$
215
$
(384
)
$
1,113
$
301
Total Service Contract Customers at
June 30
103,819
106,131
103,819
106,131
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220803005658/en/
Media: Mike Kinney 732-938-1031 mkinney@njresources.com
Investor: Adam Prior 732-938-1145 aprior@njresources.com
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