Business Wire | Nov 18, 2021 07:00AM EST

New Jersey Resources Reports Fourth-Quarter and Fiscal 2021 Results

Nov. 18, 2021

WALL, N.J.--(BUSINESS WIRE)--Nov. 18, 2021--Today, New Jersey Resources Corporation (NYSE: NJR) reported results for the fourth-quarter and fiscal 2021. Highlights include:

* Consolidated net income of $117.9 million for fiscal 2021 compared with $163.0 million in fiscal 2020 * Consolidated net financial earnings (NFE), a non-GAAP financial measure of $207.7 million for fiscal 2021, or $2.16 per share, compared with NFE of $165.3 million, or $1.74 per share, in fiscal 2020 * Affirmed fiscal 2022 net financial earnings per share (NFEPS) guidance range of $2.20 to $2.30 and narrowed long-term projected NFEPS growth rate to 7 to 9 percent, from previous range of 6 to 10 percent * Increased annual dividend by nine percent to $1.45 per share * New Jersey Natural Gas (NJNG) received approval from the BPU on the settlement of its rate case authorizing a $79.0 million increase to its base rates * The Southern Reliability Link (SRL) was placed in service in fiscal 2021 * NJNG's Hydrogen project was completed and began producing green hydrogen in October 2021

Fourth-quarter fiscal 2021 net (loss)/income totaled $(1.1) million, or $(0.01) per share, compared with $32.7 million, or $0.34 per share, during the same period in fiscal 2020. Fiscal 2021 net income totaled $117.9 million, or $1.23 per share, compared with $163.0 million, or $1.72 per share, for fiscal 2020.

Fourth-quarter fiscal 2021 NFE totaled $6.6 million, or $0.07 per share, compared to NFE of $43.4 million, or $0.45 per share, during the same period in fiscal 2020. Fiscal 2021 NFE totaled $207.7 million, or $2.16 per share, compared with $165.3 million, or $1.74 per share, for fiscal 2020. The difference between GAAP earnings and NFE is due primarily to a $92.0 million impairment ($74.5 million after considering the related tax effects) of NJR's investment in the PennEast Project, which is excluded from NFE.

"Fiscal 2021 results exceeded the expectations we laid out at our Analyst Day last November, " said Steve Westhoven, President and CEO of NJR. "Strong execution against our plan positions our diversified portfolio of infrastructure assets for long-term growth, creating value for shareowners and meeting the needs of our customers."

Key Performance Metrics

Three Months Ended Twelve Months Ended

September 30, September 30,

($ in Thousands) 2021 2020 2021 2020

Net income $ (1,133 ) $ 32,707 $ 117,890 $ 163,007

Basic EPS $ (0.01 ) $ 0.34 $ 1.23 $ 1.72

Net financial earnings $ 6,599 $ 43,429 $ 207,712 $ 165,333

Basic net financial earnings $ 0.07 $ 0.45 $ 2.16 $ 1.74 per share

Effective October 1, 2020, NJR changed its method of accounting for Investment Tax Credits (ITCs) from the flow through method to the deferral method. Our historical financial reporting presented herein has been retrospectively revised to apply this change. For additional details, please refer to our Form 10-K.

A reconciliation of net income to NFE for the three and twelve months ended September 30, 2021, and 2020, is provided below.

Three Months Ended Twelve Months Ended

September 30, 2021 September 30,

(Thousands) 2021 2020 2021 2020

Net income $ (1,133 ) $ 32,707 $ 117,890 $ 163,007

Add:

Unrealized loss(gain) onderivative 40,576 12,183 54,203 (9,644 ) instruments andrelatedtransactions

Tax effect (9,647 ) (2,893 ) (12,887 ) 2,296

Effects of economichedging related to (30,150 ) 2,216 (42,405 ) 12,690 natural gasinventory

Tax effect 7,166 (527 ) 10,078 (3,016 )

Impairment ofequity method - - 92,000 - investment

Tax effect 767 - (11,167 ) -

Net income to NFE (980 ) (257 ) - - tax adjustment

Net financial $ 6,599 $ 43,429 $ 207,712 $ 165,333 earnings (loss)



Weighted Average Shares Outstanding

Basic 96,198 95,764 96,227 94,798

Diluted 96,198 95,764 96,560 95,103



Basic earnings $ (0.01 ) $ 0.34 $ 1.23 $ 1.72 (loss) per share

Add:

Unrealized loss(gain) onderivative 0.42 0.13 0.56 (0.10 ) instruments andrelatedtransactions

Tax effect (0.10 ) (0.03 ) (0.13 ) 0.02

Effects of economichedging related to (0.31 ) 0.02 (0.44 ) 0.13 natural gasinventory

Tax effect 0.07 (0.01 ) 0.10 (0.03 )

Impairment ofequity method - - 0.96 - investment

Tax effect 0.01 - (0.12 ) -

Net income to NFE (0.01 ) - - - tax adjustment

Basic net financialearnings (loss) per $ 0.07 $ 0.45 $ 2.16 $ 1.74 share

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, 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 impairment charges associated with equity method investments, which are non-cash charges considered unusual in nature that occur infrequently and 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 twelve months ended September 30, 2021, and 2020, is provided below.

Net Financial Earnings (Loss) by Business Unit

Three Months Ended Twelve Months Ended

September 30, September 30,

(Thousands) 2021 2020 2021 2020

New Jersey Natural $ (24,214 ) $ (15,258 ) $ 107,375 $ 126,902 Gas

Clean Energy Ventures 40,861 44,805 16,789 22,111

Storage and 2,440 7,434 13,046 18,311 Transportation

Energy Services (14,384 ) 1,381 71,117 (7,873 )

Home Services and (1,127 ) 5,109 (826 ) 5,784 Other

Subtotal 3,576 43,471 207,501 165,235

Eliminations 3,023 (42 ) 211 98

Total $ 6,599 $ 43,429 $ 207,712 $ 165,333

Fiscal 2022 NFE Guidance:

NJR reaffirmed fiscal 2022 NFE guidance of $2.20 to $2.30 per share and, as a result of the progress on our major infrastructure projects, narrowed the expected long-term NFEPS growth range to 7 to 9 percent, from the previous range of 6 to 10 percent, 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:

Expected Fiscal 2022Company Net Financial Earnings Contribution

New Jersey Natural Gas 60 to 65 percent

Clean Energy Ventures 20 to 23 percent

Storage and Transportation 5 to 10 percent

Energy Services^1 9 to 11 percent

Home Services and Other 0 to 1 percent

1. Assumes NFEPS contributions from Asset Management Agreements only

In providing fiscal 2022 NFE guidance and narrowing our expected long-term NFEPS growth range, 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 fiscal 2021 NFE of $107.4 million, compared to NFE of $126.9 million during fiscal 2020. Fourth-quarter fiscal 2021 net financial loss was $24.2 million, compared to net financial loss of $15.3 million during the same period in fiscal 2020. The decrease for both periods was due to higher O&M expenses primarily related to increased bad debt.

Customer Growth:

* NJNG added 7,854 new customers during fiscal 2021, compared with 8,349 in fiscal 2020. The lower customer growth was due primarily to the effects of the COVID-19 pandemic. NJNG expects to return to a more typical customer growth rate of 1.7% in fiscal 2022.

Base Rate Filing:

* On November 17, 2021, NJNG received approval from the New Jersey Board of Public Utilities on its rate case settlement agreement and new rates will be effective on December 1, 2021. Under the approved rate case agreement, NJNG's total annual revenue is expected to increase by $79.0 million. The rate case agreement includes a return on equity of 9.60% with a 54.0% common equity ratio and reflects a rate base of$2.52 billion with an overall rate of return of 6.84%.

Infrastructure Update:

* The Southern Reliability Link diversifies supply to our customers by providing a new intrastate feed into the southern end of NJNG's distribution system. Construction was completed and the project was placed in service in August 2021. The recovery of our investment in this project was included in the recently settled rate case.

* NJNG's Infrastructure Investment Program (IIP) is a five-year, $150 million accelerated recovery program that began in fiscal 2021 and consists of a series of infrastructure projects designed to enhance the safety and reliability of NJNG's natural gas distribution system. In fiscal 2021, NJNG spent $9.4 million under the program to begin work on various distribution system reinforcement projects.

* The Howell Green Hydrogen Project delivers hydrogen through NJNG's utility distribution pipeline to heat customers' homes and businesses and began commercial operation in October 2021. The recovery of investment in this project was included in the recently settled rate case.

BGSS Incentive Programs:

BGSS incentive programs contributed $13.4 million to utility gross margin, compared with $9.5 million during fiscal 2020. The higher results for fiscal 2021 were due to improved margins in off-system sales and storage incentives compared to fiscal 2020.

For more information on utility gross margin, please see "Non-GAAP Financial Information" at the end of the press release.

Energy-Efficiency Programs:

On July 1, 2021, NJNG's new three-year, $259 million SAVEGREEN program became effective. SAVEGREEN invested $31.0 million during fiscal 2021 to help customers with energy-efficiency upgrades for their homes and businesses. NJNG recovered $12.4 million of its outstanding investments during fiscal 2021.

Clean Energy Ventures (CEV)

CEV reported fiscal 2021 NFE of $16.8 million, compared with NFE of $22.1 million during fiscal 2020. Fourth-quarter fiscal 2021 NFE was $40.9 million, compared with NFE of $44.8 million during the same period in fiscal 2020. The decrease in NFE for both periods was due primarily to lower SREC revenue, partially offset by lower depreciation expense. The decrease in depreciation expense is due to an increase in the useful life of CEV's assets.

Storage and Transportation

Storage and Transportation, formerly known as our Midstream reporting segment, reported fiscal 2021 NFE of $13.0 million, compared with NFE of $18.3 million during fiscal 2020. Fourth-quarter fiscal 2021 NFE were $2.4 million, compared with NFE of $7.4 million during the same period in fiscal 2020. The decrease in NFE for both periods was due primarily to lower equity in earnings contributions from our investments in Steckman Ridge and PennEast, and higher O&M, which was partially offset by increased operating revenues at Leaf River and Adelphia Gateway.

The NFE results exclude a $74.5 million after-tax impairment charge related to NJR's investment in the PennEast Project.

Infrastructure Updates:

* Adelphia Gateway - During fiscal 2021, Adelphia Gateway received all necessary permits for the second phase of construction on the South Zone. The second phase includes construction of laterals and interconnects.

Energy Services

Energy Services reported fiscal 2021 NFE of $71.1 million, compared with a net financial loss of $7.9 million in fiscal 2020. The increase 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. Fourth-quarter fiscal 2021 net financial loss was $14.4 million, compared with NFE of $1.4 million for the same period last fiscal year. The decrease was due primarily to increased compensation expense and higher O&M expenses related to charitable contributions compared to the same period a year ago.

Home Services and Other Operations

Home Services and Other Operations reported fiscal 2021 net financial loss of $0.8 million, compared with NFE of $5.8 million during fiscal 2020. Fourth-quarter fiscal 2021 net financial loss was $(1.1) million compared with NFE of $5.1 million for the same period in fiscal 2020. The decrease in both periods was due primarily to higher O&M related to increased compensation and technology expenses and one-time income tax benefits that occurred in the fourth quarter of fiscal 2020 that did not reoccur in fiscal 2021.

Capital Expenditures and Cash Flows:

NJR is committed to maintaining a strong financial profile.

* During fiscal 2021, capital expenditures were $682.9 million, including accruals, of which $468.3 million were related to NJNG, compared with $499.1 million ($1.0 billion including the acquisition of assets), of which $333.9 million were related to NJNG, during fiscal 2020.

* During fiscal 2021, cash flows from operations were $391.0 million, compared with $213.5 million during the same period of fiscal 2020. The increase was due primarily to increased NFE at Energy Services.

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, projected NFEPS growth rate, results of future rate cases, forecasted contribution of business segments to NJR's NFE for fiscal 2022, future NJR and NJNG capital expenditures, infrastructure programs and investments such as SRL, IIP, the Howell Green Hydrogen Project and energy efficiency programs, the ability to operate 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 the impairment on NJR's investments in the PennEast Project, 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 NJR Energy Services Company.

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 most recent Report on 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 and parts of Morris, Middlesex and Burlington counties.

* Clean Energy Ventures invests in, owns and operates solar projects with a total capacity of more than 365 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 nearly 1,200 employees are committed to helping customers save energy and money by promoting conservation and encouraging efficiency through Conserve to Preserve(r) and initiatives such as The SAVEGREEN Project(r) and The Sunlight Advantage(r).

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 Twelve Months Ended

September 30, September 30,

(Thousands, except 2021 2020 2021 2020per share data)

OPERATING REVENUES

Utility $ 97,937 $ 84,548 $ 731,459 $ 729,923

Nonutility 434,591 315,496 1,425,154 1,223,745

Total operating 532,528 400,044 2,156,613 1,953,668 revenues

OPERATING EXPENSES

Gas purchases

Utility 36,569 26,789 247,734 275,831

Nonutility 356,721 220,304 1,096,920 1,022,805

Related parties 1,850 1,535 7,013 6,083

Operation and 101,126 79,425 366,905 278,143 maintenance

Regulatory rider 3,734 1,993 38,304 34,529 expenses

Depreciation and 29,410 27,343 111,387 107,368 amortization

Total operating 529,410 357,389 1,868,263 1,724,759 expenses

OPERATING (LOSS) 3,118 42,655 288,350 228,909 INCOME

Other income, net 10,656 13,618 24,597 23,878

Interest expense, netof capitalized 19,876 17,180 78,559 67,597 interest

(LOSS) INCOME BEFOREINCOME TAXES AND (6,102 ) 39,093 234,388 185,190 EQUITY IN EARNINGS OFAFFILIATES

Income tax (benefit) (4,427 ) 10,506 33,286 36,494 provision

Equity in earnings of 542 4,120 (83,212 ) 14,311 affiliates

NET (LOSS) INCOME $ (1,133 ) $ 32,707 $ 117,890 $ 163,007



(LOSS) EARNINGS PER COMMON SHARE

Basic $ (0.01 ) $ 0.34 $ 1.23 $ 1.72

Diluted $ (0.01 ) $ 0.34 $ 1.22 $ 1.71







WEIGHTED AVERAGE SHARES OUTSTANDING

Basic 96,198 95,933 96,227 94,798

Diluted 96,198 95,933 96,560 95,103



RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES

(Unaudited)

Three Months Ended

Twelve Months Ended

September 30,

September 30,

(Thousands)

2021

2020

2021

2020

NEW JERSEY RESOURCES

A reconciliation of net (loss) income, the closest GAAP financial measurement, to net financial earnings is as follows:

Net (loss) income

$

(1,133

)

$

32,707

$

117,890

$

163,007

Add:

Unrealized loss (gain) on derivative instruments and related transactions

40,576

12,183

54,203

(9,644

)

Tax effect

(9,647

)

(2,893

)

(12,887

)

2,296

Effects of economic hedging related to natural gas inventory

(30,150

)

2,216

(42,405

)

12,690

Tax effect

7,166

(527

)

10,078

(3,016

)

Impairment of equity method investment

-

-

92,000

-

Tax effect

767

-

(11,167

)

-

Net income to NFE tax adjustment

(980

)

(257

)

-

-

Net financial (loss) earnings

$

6,599

$

43,429

$

207,712

$

165,333

Weighted Average Shares Outstanding

Basic

96,198

95,933

96,227

94,798

Diluted

96,198

95,933

96,560

95,103

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

$

(0.01

)

$

0.34

$

1.23

$

1.72

Add:

Unrealized loss (gain) on derivative instruments and related transactions

$

0.42

$

0.13

$

0.56

$

(0.10

)

Tax effect

$

(0.10

)

$

(0.03

)

$

(0.13

)

$

0.02

Effects of economic hedging related to natural gas inventory

$

(0.31

)

$

0.02

$

(0.44

)

$

0.13

Tax effect

$

0.07

$

(0.01

)

$

0.10

$

(0.03

)

Impairment of equity method investment

$

-

$

-

$

0.96

$

-

Tax effect

$

0.01

$

-

$

(0.12

)

$

-

Net income to NFE tax adjustment

$

(0.01

)

$

-

$

-

$

-

Basic NFE per share

$

0.07

$

0.45

$

2.16

$

1.74

NATURAL GAS DISTRIBUTION

A reconciliation of operating revenue, the closest GAAP financial measurement, to utility gross margin is as follows:

Operating revenues

$

98,274

$

84,548

$

731,796

$

729,923

Less:

Gas purchases

38,842

29,113

260,714

287,307

Regulatory rider expense

3,734

1,993

38,304

34,529

Utility gross margin

$

55,698

$

53,442

$

432,778

$

408,087

Three Months Ended

Twelve Months Ended

(Unaudited)

September 30,

September 30,

(Thousands)

2021

2020

2021

2020

ENERGY SERVICES

The following table is a computation of financial margin:

Operating revenues

$

334,780

$

212,760

$

1,228,420

$

1,030,419

Less: Gas purchases

357,133

220,882

1,098,261

1,024,579

Add:

Unrealized loss (gain) on derivative instruments and related transactions

45,011

12,723

58,362

(8,583

)

Effects of economic hedging related to natural gas inventory

(30,150

)

2,216

(42,405

)

12,690

Financial margin

$

(7,492

)

$

6,817

$

146,116

$

9,947

A reconciliation of operating income, the closest GAAP financial measurement, to financial margin is as follows:

Operating (loss) income

$

(32,186

)

$

(12,216

)

$

79,163

$

(11,651

)

Add:

Operation and maintenance expense

9,805

4,055

50,885

17,368

Depreciation and amortization

28

39

111

123

Subtotal

(22,353

)

(8,122

)

130,159

5,840

Add:

Unrealized loss (gain) on derivative instruments and related transactions

45,011

12,723

58,362

(8,583

)

Effects of economic hedging related to natural gas inventory

(30,150

)

2,216

(42,405

)

12,690

Financial margin

$

(7,492

)

$

6,817

$

146,116

$

9,947

A reconciliation of net income to net financial earnings is as follows:

Net (loss) income

$

(24,731

)

$

(9,753

)

$

58,957

$

(11,008

)

Add:

Unrealized loss (gain) on derivative instruments and related transactions

45,011

12,723

58,362

(8,583

)

Tax effect

(10,700

)

(3,021

)

(13,875

)

2,044

Effects of economic hedging related to natural gas

(30,150

)

2,216

(42,405

)

12,690

Tax effect

7,166

(527

)

10,078

(3,016

)

Net income to NFE tax adjustment

(980

)

(257

)

-

-

Net financial (loss) earnings

$

(14,384

)

$

1,381

$

71,117

$

(7,873

)

STORAGE AND TRANSPORTATION

A reconciliation of net income to net financial earnings is as follows:

Net (loss) income

$

1,673

$

7,434

$

(67,787

)

$

18,311

Add:

Impairment of equity method investment

-

-

92,000

-

Tax effect

767

-

(11,167

)

-

Net financial earnings

$

2,440

$

7,434

$

13,046

$

18,311

RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES

(Unaudited)



Three Months Ended Twelve Months Ended

September 30, September 30,

(Thousands) 2021 2020 2021 2020

NEW JERSEY RESOURCES



A reconciliation of net (loss) income, the closest GAAP financial measurement,to net financial earnings is as follows:



Net (loss) $ (1,133 ) $ 32,707 $ 117,890 $ 163,007 income

Add:

Unrealizedloss (gain) onderivative 40,576 12,183 54,203 (9,644 ) instrumentsand relatedtransactions

Tax effect (9,647 ) (2,893 ) (12,887 ) 2,296

Effects ofeconomichedging (30,150 ) 2,216 (42,405 ) 12,690 related tonatural gasinventory

Tax effect 7,166 (527 ) 10,078 (3,016 )

Impairment ofequity method - - 92,000 - investment

Tax effect 767 - (11,167 ) -

Net income toNFE tax (980 ) (257 ) - - adjustment

Net financial(loss) $ 6,599 $ 43,429 $ 207,712 $ 165,333 earnings



WeightedAverage Shares Outstanding

Basic 96,198 95,933 96,227 94,798

Diluted 96,198 95,933 96,560 95,103



A reconciliation of basic earnings per share, the closest GAAP financialmeasurement, to basic net financial earnings per share is as follows:



Basic (loss)earnings per $ (0.01 ) $ 0.34 $ 1.23 $ 1.72 share

Add:

Unrealizedloss (gain) onderivative $ 0.42 $ 0.13 $ 0.56 $ (0.10 ) instrumentsand relatedtransactions

Tax effect $ (0.10 ) $ (0.03 ) $ (0.13 ) $ 0.02

Effects ofeconomichedging $ (0.31 ) $ 0.02 $ (0.44 ) $ 0.13 related tonatural gasinventory

Tax effect $ 0.07 $ (0.01 ) $ 0.10 $ (0.03 )

Impairment ofequity method $ - $ - $ 0.96 $ - investment

Tax effect $ 0.01 $ - $ (0.12 ) $ -

Net income toNFE tax $ (0.01 ) $ - $ - $ - adjustment

Basic NFE per $ 0.07 $ 0.45 $ 2.16 $ 1.74 share



NATURAL GAS DISTRIBUTION



A reconciliation of operating revenue, the closest GAAP financial measurement,to utility gross margin is as follows:



Operating $ 98,274 $ 84,548 $ 731,796 $ 729,923 revenues

Less:

Gas purchases 38,842 29,113 260,714 287,307

Regulatory 3,734 1,993 38,304 34,529 rider expense

Utility gross $ 55,698 $ 53,442 $ 432,778 $ 408,087 margin







Three Months Ended Twelve Months Ended

(Unaudited) September 30, September 30,

(Thousands) 2021 2020 2021 2020

ENERGY SERVICES



The followingtable is acomputation of financialmargin:



Operating $ 334,780 $ 212,760 $ 1,228,420 $ 1,030,419 revenues

Less: Gas 357,133 220,882 1,098,261 1,024,579 purchases

Add:

Unrealizedloss (gain) onderivative 45,011 12,723 58,362 (8,583 ) instrumentsand relatedtransactions

Effects ofeconomichedging (30,150 ) 2,216 (42,405 ) 12,690 related tonatural gasinventory

Financial $ (7,492 ) $ 6,817 $ 146,116 $ 9,947 margin



A reconciliation of operating income, the closest GAAP financial measurement,to financial margin is as follows:



Operating $ (32,186 ) $ (12,216 ) $ 79,163 $ (11,651 ) (loss) income

Add:

Operation andmaintenance 9,805 4,055 50,885 17,368 expense

Depreciationand 28 39 111 123 amortization

Subtotal (22,353 ) (8,122 ) 130,159 5,840

Add:

Unrealizedloss (gain) onderivative 45,011 12,723 58,362 (8,583 ) instrumentsand relatedtransactions

Effects ofeconomichedging (30,150 ) 2,216 (42,405 ) 12,690 related tonatural gasinventory

Financial $ (7,492 ) $ 6,817 $ 146,116 $ 9,947 margin



A reconciliation of net incometo net financial earnings is as follows:



Net (loss) $ (24,731 ) $ (9,753 ) $ 58,957 $ (11,008 ) income

Add:

Unrealizedloss (gain) onderivative 45,011 12,723 58,362 (8,583 ) instrumentsand relatedtransactions

Tax effect (10,700 ) (3,021 ) (13,875 ) 2,044

Effects ofeconomichedging (30,150 ) 2,216 (42,405 ) 12,690 related tonatural gas

Tax effect 7,166 (527 ) 10,078 (3,016 )

Net income toNFE tax (980 ) (257 ) - - adjustment

Net financial(loss) $ (14,384 ) $ 1,381 $ 71,117 $ (7,873 ) earnings





STORAGE AND TRANSPORTATION



A reconciliation of net incometo net financial earnings is as follows:



Net (loss) $ 1,673 $ 7,434 $ (67,787 ) $ 18,311 income

Add:

Impairment ofequity method - - 92,000 - investment

Tax effect 767 - (11,167 ) -

Net financial $ 2,440 $ 7,434 $ 13,046 $ 18,311 earnings



FINANCIAL STATISTICS BY BUSINESS UNIT

(Unaudited)

Three Months Ended

Twelve Months Ended

September 30,

September 30,

(Thousands, except per share data)

2021

2020

2021

2020

NEW JERSEY RESOURCES

Operating Revenues

Natural Gas Distribution

$

98,274

$

84,548

$

731,796

$

729,923

Clean Energy Ventures

69,048

77,014

95,275

102,617

Energy Services

334,780

212,760

1,228,420

1,030,419

Storage and Transportation

12,341

12,717

51,020

44,728

Home Services and Other

13,567

13,376

52,229

51,017

Sub-total

528,010

400,415

2,158,740

1,958,704

Eliminations

4,518

(371

)

(2,127

)

(5,036

)

Total

$

532,528

$

400,044

$

2,156,613

$

1,953,668

Operating Income (Loss)

Natural Gas Distribution

$

(21,281

)

$

(12,703

)

$

148,993

$

173,412

Clean Energy Ventures

54,014

63,426

37,993

46,978

Energy Services

(32,186

)

(12,216

)

79,163

(11,651

)

Storage and Transportation

595

5,436

10,659

12,451

Home Services and Other

(4,091

)

(2,673

)

4,033

3,062

Sub-total

(2,949

)

41,270

280,841

224,252

Eliminations

6,067

1,385

7,509

4,656

Total

$

3,118

$

42,655

$

288,350

$

228,909

Equity in Earnings of Affiliates

Storage and Transportation

$

964

$

4,703

$

(81,072

)

$

15,903

Eliminations

(422

)

(583

)

(2,140

)

(1,592

)

Total

$

542

$

4,120

$

(83,212

)

$

14,311

Net Income (Loss)

Natural Gas Distribution

$

(24,214

)

$

(15,258

)

$

107,375

$

126,902

Clean Energy Ventures

40,861

44,805

16,789

22,111

Energy Services

(24,731

)

(9,753

)

58,957

(11,008

)

Storage and Transportation

1,673

7,434

(67,787

)

18,311

Home Services and Other

(1,127

)

5,109

(826

)

5,784

Sub-total

(7,538

)

32,337

114,508

162,100

Eliminations

6,405

370

3,382

907

Total

$

(1,133

)

$

32,707

$

117,890

$

163,007

Net Financial Earnings (Loss)

Natural Gas Distribution

$

(24,214

)

$

(15,258

)

$

107,375

$

126,902

Clean Energy Ventures

40,861

44,805

16,789

22,111

Energy Services

(14,384

)

1,381

71,117

(7,873

)

Storage and Transportation

2,440

7,434

13,046

18,311

Home Services and Other

(1,127

)

5,109

(826

)

5,784

Sub-total

3,576

43,471

207,501

165,235

Eliminations

3,023

(42

)

211

98

Total

$

6,599

$

43,429

$

207,712

$

165,333

Throughput (Bcf)

NJNG, Core Customers

17.8

17.6

91.4

97.0

NJNG, Off System/Capacity Management

26.9

34.1

101.3

118.4

Energy Services Fuel Mgmt. and Wholesale Sales

89.5

121.6

382.0

526.7

Total

134.2

173.3

574.7

742.1

Common Stock Data

Yield at September 30

4.2

%

4.9

%

4.2

%

4.9

%

Market Price at September 30

$

34.81

$

27.02

$

34.81

$

27.02

Shares Out. at September 30

95,710

95,949

95,710

95,949

Market Cap. at September 30

$

3,331,653

$

2,592,547

$

3,331,653

$

2,592,547

FINANCIAL STATISTICS BY BUSINESS UNIT

(Unaudited)



Three Months Ended Twelve Months Ended

September 30, September 30,

(Thousands,except per 2021 2020 2021 2020 share data)

NEW JERSEY RESOURCES



Operating Revenues

Natural Gas $ 98,274 $ 84,548 $ 731,796 $ 729,923 Distribution

Clean Energy 69,048 77,014 95,275 102,617 Ventures

Energy 334,780 212,760 1,228,420 1,030,419 Services

Storage and 12,341 12,717 51,020 44,728 Transportation

Home Services 13,567 13,376 52,229 51,017 and Other

Sub-total 528,010 400,415 2,158,740 1,958,704

Eliminations 4,518 (371 ) (2,127 ) (5,036 )

Total $ 532,528 $ 400,044 $ 2,156,613 $ 1,953,668





Operating Income (Loss)

Natural Gas $ (21,281 ) $ (12,703 ) $ 148,993 $ 173,412 Distribution

Clean Energy 54,014 63,426 37,993 46,978 Ventures

Energy (32,186 ) (12,216 ) 79,163 (11,651 ) Services

Storage and 595 5,436 10,659 12,451 Transportation

Home Services (4,091 ) (2,673 ) 4,033 3,062 and Other

Sub-total (2,949 ) 41,270 280,841 224,252

Eliminations 6,067 1,385 7,509 4,656

Total $ 3,118 $ 42,655 $ 288,350 $ 228,909





Equity inEarnings of Affiliates

Storage and $ 964 $ 4,703 $ (81,072 ) $ 15,903 Transportation

Eliminations (422 ) (583 ) (2,140 ) (1,592 )

Total $ 542 $ 4,120 $ (83,212 ) $ 14,311





Net Income (Loss)

Natural Gas $ (24,214 ) $ (15,258 ) $ 107,375 $ 126,902 Distribution

Clean Energy 40,861 44,805 16,789 22,111 Ventures

Energy (24,731 ) (9,753 ) 58,957 (11,008 ) Services

Storage and 1,673 7,434 (67,787 ) 18,311 Transportation

Home Services (1,127 ) 5,109 (826 ) 5,784 and Other

Sub-total (7,538 ) 32,337 114,508 162,100

Eliminations 6,405 370 3,382 907

Total $ (1,133 ) $ 32,707 $ 117,890 $ 163,007





Net FinancialEarnings (Loss)

Natural Gas $ (24,214 ) $ (15,258 ) $ 107,375 $ 126,902 Distribution

Clean Energy 40,861 44,805 16,789 22,111 Ventures

Energy (14,384 ) 1,381 71,117 (7,873 ) Services

Storage and 2,440 7,434 13,046 18,311 Transportation

Home Services (1,127 ) 5,109 (826 ) 5,784 and Other

Sub-total 3,576 43,471 207,501 165,235

Eliminations 3,023 (42 ) 211 98

Total $ 6,599 $ 43,429 $ 207,712 $ 165,333





Throughput (Bcf)

NJNG, Core 17.8 17.6 91.4 97.0 Customers

NJNG, OffSystem/ 26.9 34.1 101.3 118.4 CapacityManagement

EnergyServices FuelMgmt. and 89.5 121.6 382.0 526.7 WholesaleSales

Total 134.2 173.3 574.7 742.1





Common Stock Data

Yield at 4.2 % 4.9 % 4.2 % 4.9 %September 30

Market Priceat September $ 34.81 $ 27.02 $ 34.81 $ 27.02 30

Shares Out. at 95,710 95,949 95,710 95,949 September 30

Market Cap. at $ 3,331,653 $ 2,592,547 $ 3,331,653 $ 2,592,547 September 30



Three Months Ended

Twelve Months Ended

(Unaudited)

September 30,

September 30,

(Thousands, except customer and weather data)

2021

2020

2021

2020

NATURAL GAS DISTRIBUTION

Utility Gross Margin

Operating revenues

$

98,274

$

84,548

$

731,796

$

729,923

Less:

Gas purchases

38,842

29,113

260,714

287,307

Regulatory rider expense

3,734

1,993

38,304

34,529

Total Utility Gross Margin

$

55,698

$

53,442

$

432,778

$

408,087

Utility Gross Margin, Operating Income and Net Income

Residential

$

29,947

$

30,408

$

288,723

$

275,033

Commercial, Industrial & Other

10,578

8,190

64,950

57,929

Firm Transportation

10,518

10,416

61,870

60,199

Total Firm Margin

51,043

49,014

415,543

393,161

Interruptible

1,192

1,675

3,820

5,455

Total System Margin

52,235

50,689

419,363

398,616

Off System/Capacity Management/FRM/Storage Incentive

3,463

2,753

13,415

9,471

Total Utility Gross Margin

55,698

53,442

432,778

408,087

Operation and maintenance expense

55,472

47,448

203,740

162,792

Depreciation and amortization

21,507

18,697

80,045

71,883

Operating Income

$

(21,281)

$

(12,703)

$

148,993

$

173,412

Net Income

$

(24,214)

$

(15,258)

$

107,375

$

126,902

Net Financial Earnings

$

(24,214)

$

(15,258)

$

107,375

$

126,902

Throughput (Bcf)

Residential

3.3

3.4

46.2

44.6

Commercial, Industrial & Other

0.7

0.6

8.6

8.2

Firm Transportation

1.6

1.6

13.7

13.3

Total Firm Throughput

5.6

5.6

68.5

66.1

Interruptible

12.2

12.0

22.9

30.9

Total System Throughput

17.8

17.6

91.4

97.0

Off System/Capacity Management

26.9

34.1

101.3

118.4

Total Throughput

44.7

51.7

192.7

215.4

Customers

Residential

502,546

497,779

502,546

497,779

Commercial, Industrial & Other

30,615

28,735

30,615

28,735

Firm Transportation

30,697

31,604

30,697

31,604

Total Firm Customers

563,858

558,118

563,858

558,118

Interruptible

27

29

27

29

Total System Customers

563,885

558,147

563,885

558,147

Off System/Capacity Management*

20

19

20

19

Total Customers

563,905

558,166

563,905

558,166

*The number of customers represents those active during the last month of the period.

Degree Days

Actual

8

595

4,247

4,208

Normal

29

488

4,541

4,556

Percent of Normal

27.6

%

121.9

%

93.5

%

92.4

%

Three Months Ended Twelve Months Ended

(Unaudited) September 30, September 30,

(Thousands, exceptcustomer and weather 2021 2020 2021 2020data)

NATURAL GAS DISTRIBUTION



Utility Gross Margin

Operating revenues $ 98,274 $ 84,548 $ 731,796 $ 729,923

Less:

Gas purchases 38,842 29,113 260,714 287,307

Regulatory rider 3,734 1,993 38,304 34,529 expense

Total Utility Gross $ 55,698 $ 53,442 $ 432,778 $ 408,087 Margin



Utility Gross Margin,Operating Income and Net Income

Residential $ 29,947 $ 30,408 $ 288,723 $ 275,033

Commercial, 10,578 8,190 64,950 57,929 Industrial & Other

Firm Transportation 10,518 10,416 61,870 60,199

Total Firm Margin 51,043 49,014 415,543 393,161

Interruptible 1,192 1,675 3,820 5,455

Total System Margin 52,235 50,689 419,363 398,616

Off System/CapacityManagement/FRM/ 3,463 2,753 13,415 9,471 Storage Incentive

Total Utility Gross 55,698 53,442 432,778 408,087 Margin

Operation and 55,472 47,448 203,740 162,792 maintenance expense

Depreciation and 21,507 18,697 80,045 71,883 amortization

Operating Income $ (21,281) $ (12,703) $ 148,993 $ 173,412



Net Income $ (24,214) $ (15,258) $ 107,375 $ 126,902



Net Financial $ (24,214) $ (15,258) $ 107,375 $ 126,902 Earnings



Throughput (Bcf)

Residential 3.3 3.4 46.2 44.6

Commercial, 0.7 0.6 8.6 8.2 Industrial & Other

Firm Transportation 1.6 1.6 13.7 13.3

Total Firm Throughput 5.6 5.6 68.5 66.1

Interruptible 12.2 12.0 22.9 30.9

Total System 17.8 17.6 91.4 97.0 Throughput

Off System/Capacity 26.9 34.1 101.3 118.4 Management

Total Throughput 44.7 51.7 192.7 215.4



Customers

Residential 502,546 497,779 502,546 497,779

Commercial, 30,615 28,735 30,615 28,735 Industrial & Other

Firm Transportation 30,697 31,604 30,697 31,604

Total Firm Customers 563,858 558,118 563,858 558,118

Interruptible 27 29 27 29

Total System 563,885 558,147 563,885 558,147 Customers

Off System/Capacity 20 19 20 19 Management*

Total Customers 563,905 558,166 563,905 558,166

*The number of customers represents those active during the last month of the period.

Degree Days

Actual 8 595 4,247 4,208

Normal 29 488 4,541 4,556

Percent of Normal 27.6 % 121.9 % 93.5 % 92.4 %



Three Months Ended

Twelve Months Ended

(Unaudited)

September 30,

September 30,

(Thousands, except customer, SREC, TREC and megawatt)

2021

2020

2021

2020

CLEAN ENERGY VENTURES

Operating Revenues

SREC sales

$

58,898

$

69,301

$

65,434

$

81,134

TREC sales

1,496

1,384

4,571

1,384

Solar electricity sales and other

5,878

3,676

14,491

9,930

Sunlight Advantage

2,776

2,653

10,779

10,169

Total Operating Revenues

$

69,048

$

77,014

$

95,275

$

102,617

Depreciation and Amortization

$

5,249

$

5,633

$

20,567

$

25,329

Operating (Loss)

$

54,014

$

63,426

$

37,993

$

46,978

Income Tax (Benefit)

$

12,296

$

19,386

$

5,048

$

11,034

Net (Loss)

$

40,861

$

44,805

$

16,789

$

22,111

Net Financial (Loss)

$

40,861

$

44,805

$

16,789

$

22,111

Solar Renewable Energy Certificates Generated

130,847

136,067

406,118

389,716

Solar Renewable Energy Certificates Sold

300,530

345,420

333,025

408,100

Transition Renewable Energy Certificates Generated

10,561

9,270.0

31,767

9,270.0

Solar Megawatts Under Construction

59.3

32.5

59.3

32.5

ENERGY SERVICES

Operating Income

Operating revenues

$

334,780

$

212,760

$

1,228,420

$

1,030,419

Less:

Gas purchases

357,133

220,882

1,098,261

1,024,579

Operation and maintenance expense

9,805

4,055

50,885

17,368

Depreciation and amortization

28

39

111

123

Operating (Loss) Income

$

(32,186

)

$

(12,216

)

$

79,163

$

(11,651

)

Net (Loss) Income

$

(24,731

)

$

(9,753

)

$

58,957

$

(11,008

)

Financial Margin

$

(7,492

)

$

6,817

$

146,116

$

9,947

Net Financial (Loss) Earnings

$

(14,384

)

$

1,381

$

71,117

$

(7,873

)

Gas Sold and Managed (Bcf)

89.5

121.6

382.0

526.7

STORAGE AND TRANSPORTATION

Operating Revenues

$

12,341

$

12,717

$

51,020

$

44,728

Equity in Earnings of Affiliates

$

964

$

4,703

$

(81,072

)

$

15,903

Operation and Maintenance Expense

$

8,765

$

4,460

$

29,135

$

21,862

Other Income, Net

$

1,796

$

927

$

5,931

$

7,328

Interest Expense

$

2,851

$

2,838

$

13,348

$

13,124

Income Tax (Benefit) Provision

$

(1,169

)

$

794

$

(10,043

)

$

4,247

Net (Loss) Income

$

1,673

$

7,434

$

(67,787

)

$

18,311

Net Financial Earnings

$

2,440

$

7,434

$

13,046

$

18,311

HOME SERVICES AND OTHER

Operating Revenues

$

13,567

$

13,376

$

52,229

$

51,017

Operating Income

$

(4,091

)

$

(2,673

)

$

4,033

$

3,062

Other Expense, Net

$

1,602

$

(15,203

)

$

(1,001

)

$

5,177

Net (Loss) Income

$

(1,127

)

$

5,109

$

(826

)

$

5,784

Net Financial (Loss) Earnings

$

(1,127

)

$

5,109

$

(826

)

$

5,784

Total Service Contract Customers at September 30

105,720

107,224

105,720

107,224

View source version on businesswire.com: https://www.businesswire.com/news/home/20211118005352/en/

CONTACT: Media: Michael Kinney 732-938-1031 mkinney@njresources.com

CONTACT: Investors: Dennis Puma 732-938-1229 dpuma@njresources.com