Outlines Valuable Infrastructure Investments
Across Complementary Businesses Driving NJR’s Leadership in Clean
Energy Future
Presents Financial Growth Targets, Including
Higher Long-Term NFE Growth Rate from FY 2022, and Increased
Dividend Growth Rate
Company Management to Discuss Further Details
During Investor Webcast Today at 8:30 AM ET
New Jersey Resources (NYSE: NJR) (the “company” or “NJR”) today
will host a virtual 2020 Analyst Day to provide an update on the
Company’s strategic plan and financial growth targets,
including:
- 6-10% long-term annual growth in consolidated net financial
earnings per share (NFEPS), a non-GAAP financial measure, beginning
in fiscal 2022;
- 6-10% long-term annual dividend growth;
- Approximately 20% growth in annual Cash Flows from Operations
(CFFO) from fiscal 2020 to fiscal 2024; and
- Approximately 11% rate base Compounded Annual Growth Rate
(CAGR) between fiscal 2019 and fiscal 2024 at New Jersey Natural
Gas, the company’s regulated utility and largest business
segment.
“With our talented and capable team, disciplined execution and
strong position in the clean energy transition, we are poised to
drive long-term value for our shareowners,” said Steve Westhoven,
President and CEO of New Jersey Resources. “As we move ahead, we
will focus on growth at our regulated utility, NJNG, and Clean
Energy Ventures, CEV. NJNG is as strong as it has ever been, with
an approximately 11% rate base CAGR expected between fiscal 2019
and fiscal 2024. CEV will continue to drive growth as we expand and
invest beyond New Jersey, action supported by an approximate
doubling of our rate of investment in solar initiatives in four
years. At the same time, we are taking a number of strategic steps
to deliver more predictable and stable net financial earnings
across our other complementary businesses. We remain committed to
growing our dividend and, following a reset of NFE in fiscal 2021,
are projecting an increase in our long-term NFEPS growth rate.”
Complementary Businesses Across NJR Platform
- NJNG: Driving an approximately 11% rate base CAGR
through strategic infrastructure investments and accelerated
infrastructure recovery. NFE contributions from NJNG are expected
to be in the 60-70% range on an ongoing basis.
- CEV: Investing $850 million over four years to take
advantage of the robust solar market. CEV will benefit from NJR’s
expertise in public policy and its commitment to further climate
goals in New Jersey. To better position CEV for accelerated growth,
NJR is pursuing regional market opportunities in the Northeastern
U.S., one of the fastest growing solar markets in the country, due
to public policy mandates and aggressive clean energy targets.
- Storage and Transportation (formerly known as
Midstream): Generating stable, fee-based revenue through a
portfolio of low-risk infrastructure investments and from long-term
capacity commitments with high-quality customers. Storage and
Transportation serves constrained or growing end-use markets and
offers organic growth opportunities through optimization and
expansion. While NJR remains committed to PennEast, any financial
contributions from the project are not included in the Company’s
long-term NFEPS targets.
- Energy Services: Focusing on higher fee-based revenue
and benefiting from strong customer relationships and a deep
understanding of wholesale energy markets rooted in its natural gas
supply management expertise. In years of strong performance, Energy
Services has contributed excess cash flows as growth capital for
NJR, strengthening the balance sheet and lessening the need for
debt and equity issuances. There will be minimal reliance on Energy
Services to achieve the Company’s NFEPS targets.
Fiscal 2021 NFE Guidance
Included in NJR’s release today is the Company’s NFE guidance
for fiscal 2021. Beginning in fiscal 2021, NJR is adopting a change
in the accounting policy for investment tax credits and the
expected use of tax equity financing for its solar projects.
Principally as a result of the accounting policy change, the
Company anticipates fiscal 2021 NFE to be in the range of $1.55 to
$1.65 per share. There will be no impact to CEV’s cash flows as a
result of this accounting change.
Patrick Migliaccio, Senior Vice President and CFO, said,
“Consistent with our strategic plan to generate sustainable growth
across our businesses, going forward we will change the way NJR
accounts for investment tax credits and we expect to implement tax
equity financing for our solar projects. While this results in a
short-term decline in net financial earnings in fiscal 2021, these
changes provide the foundation for increasing our investment in
solar and are expected to result in stable net financial earnings
from our CEV business. Following the earnings reset in fiscal 2021,
we expect approximately 30% year-over-year growth in NFE in fiscal
2022, with a 6-10% long-term growth rate thereafter. With ample
liquidity to support our businesses, no meaningful refinancings in
the near term and a strong capital structure, NJR is extremely
well-positioned for the future.”
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
65 to 72 percent
Clean Energy Ventures
15 to 20 percent
Storage and Transportation (formerly
Midstream)
8 to 10 percent
Energy Services
3 to 4 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. For
further discussion of NFE, please see the explanation below under
“Non-GAAP Financial Information.”
Webcast Information
The video webcast of the virtual 2020 Analyst Day, including a
copy of the presentation, and a question and answer session, will
be broadcast via the internet today at 8:30 a.m. Eastern time and
can be accessed at
https://investor.njresources.com/events-and-presentations/default.aspx.
For those unable to listen to the webcast, an archived version will
be available at the same location.
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. New Jersey
Resources Corporation (NJR, or the Company) 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 net
financial earnings (NFE) guidance for fiscal 2021 through fiscal
2024, as well as NJR’s long-term NFE growth rate, dividend growth,
forecasted contribution of business segments to NJR’s NFE from
fiscal 2021 through fiscal 2024, NJNG’s rate base compound annual
growth rate (CAGR), NJR Clean Energy Ventures’ future capital
investment target, the ability to pursue tax equity financing
through sale leasebacks of our solar projects, and the impact of a
change in accounting policy for investment tax credits (ITCs).
Additional information and factors that could cause actual
results to differ materially from NJR’s expectations are contained
in NJR’s filings with the U.S. Securities and Exchange Commission
(SEC), including NJR’s Annual Reports on Form 10-K and subsequent
Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K,
and other SEC filings, which are available at the SEC’s web site,
https://www.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 and
NFE per basic share. 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 in
NJR’s 2020 Form 10-K, Item 7. 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 excludes unrealized gains or losses on
derivative instruments related to the company’s unregulated
subsidiaries and certain realized gains and losses on derivative
instruments related to natural gas that has been placed into
storage at Energy Services, net of applicable tax adjustments as
described below. Volatility associated with the change in value of
these financial instruments and physical commodity reported on the
income statement in the current period. In order to manage its
business, NJR views its results without the impacts of the
unrealized gains and losses, and certain realized gains and losses,
caused by changes in value of these financial instruments and
physical commodity contracts prior to the completion of the planned
transaction because it shows changes in value currently instead of
when the planned transaction ultimately is settled. An annual
estimated effective tax rate is calculated for NFE purposes and any
necessary quarterly tax adjustment is applied to CEV, as such the
adjustment is related to tax credits generated by CEV.
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.
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 350 megawatts,
providing residential and commercial customers with low-carbon
solutions.
- Energy Services manages a diversified portfolio of natural gas
transportation and storage assets and provides physical natural gas
services and customized energy solutions to its customers across
North America.
- Storage and Transportation serves customers from local
distributors and producers to electric generators and wholesale
marketers through its ownership of Leaf River Energy Center and the
Adelphia Gateway Pipeline Project, as well as our 50 percent equity
ownership in the Steckman Ridge natural gas storage facility, and
our 20 percent equity interest in the PennEast Pipeline
Project.
- Home Services provides service contracts as well as heating,
central air conditioning, water heaters, standby generators, solar
and other indoor and outdoor comfort products to residential homes
throughout New Jersey.
NJR and its more than 1,100 employees are committed to helping
customers save energy and money by promoting conservation and
encouraging efficiency through Conserve to Preserve® and
initiatives such as The SAVEGREEN Project® and The Sunlight
Advantage®. For more information about NJR:
www.njresources.com.
Follow us on Twitter @NJNaturalGas. “Like” us on
facebook.com/NewJerseyNaturalGas. Download our free NJR investor
relations app for iPad, iPhone and Android.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201130005299/en/
Media: Michael Kinney 732-938-1031
mkinney@njresources.com
Investor: Dennis Puma 732-938-1229
dpuma@njresources.com
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