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| 8-K - 8-K - 1Q FY17 EARNINGS RELEASE - NEW JERSEY RESOURCES CORP | form8-kx1qfy17earningsrele.htm |
| EX-99.2 - EXHIBIT 99.2 - PRESENTATION - NEW JERSEY RESOURCES CORP | njr1qfy2017final.htm |
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Date: February 8, 2017
Media Contact: Investor Contacts:
Michael Kinney Joanne Fairechio
732-938-1031 732-378-4967
mkinney@njresources.com jfairechio@njresources.com
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Dennis Puma
732-938-1229
dpuma@njresources.com
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
WALL, N.J. — New Jersey Resources (NYSE: NJR) today reported results for the first quarter of fiscal 2017
and reaffirmed net financial earnings (NFE) guidance for fiscal 2017 of $1.65 to $1.75 per share.
Net income for the first quarter of fiscal 2017 totaled $34.9 million, or $.41 per share, compared with $50.3
million, or $.59 per share, during the same period in fiscal 2016. First-quarter fiscal 2017 NFE totaled $40.4
million, or $.47 per share, compared with $51.3 million, or $.60 per share, during the first quarter of fiscal
2016.
“Our results for the first quarter were consistent with our expectations, and we are confident in our ability to
achieve our fiscal 2017 earnings guidance,” said Laurence M. Downes, chairman and CEO of New Jersey
Resources. “Our outlook is supported by our new base rates, continued customer growth and our growing
portfolio of clean energy assets that will allow us to deliver expected performance this year.”
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
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A reconciliation of net income to NFE for the first quarter of fiscal years 2017 and 2016 is provided below.
Three Months Ended
December 31,
(Thousands) 2016 2015
Net income $ 34,929 $ 50,282
Add:
Unrealized loss (gain) on derivative instruments and related transactions 28,302
(1,135)
Tax effect (9,757) 413
Effects of economic hedging related to natural gas inventory (17,939) 3,813
Tax effect 6,204 (1,385)
Net income to NFE tax adjustment (1,356) (721)
Net financial earnings $ 40,383 $ 51,267
Weighted Average Shares Outstanding
Basic 86,084 85,675
Diluted 86,855 86,676
Basic earnings per share $ 0.41 $ 0.59
Add:
Unrealized loss (gain) on derivative instruments and related transactions 0.33
(0.01)
Tax effect (0.11) 0.01
Effects of economic hedging related to natural gas inventory (0.21) 0.04
Tax effect 0.07 (0.02)
Net income to NFE tax adjustment (0.02) (0.01)
Basic NFE per share $ 0.47 $ 0.60
NFE is a financial measure not calculated in accordance with generally accepted accounting principles
(GAAP) of the United States as it excludes all unrealized, and certain realized, gains and losses associated
with derivative instruments, net of applicable tax adjustments. For further discussion of this financial
measure, please see the explanation below under “Non-GAAP Financial Information.”
A table detailing NFE for the three months ended December 31 of fiscal years 2017 and 2016 is provided
below.
Three Months Ended
December 31,
(Thousands) 2016 2015
Net Financial Earnings
New Jersey Natural Gas $ 30,348 $ 30,926
NJR Energy Services 3,487 10,304
NJR Clean Energy Ventures 2,842 7,652
NJR Midstream 2,387 2,344
NJR Home Services and Other 1,542 259
Sub-total 40,606 51,485
Eliminations (223) (218)
Total $ 40,383 $ 51,267
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
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▪ NJR Reaffirms Fiscal 2017 NFE Guidance
NJR reaffirmed fiscal 2017 NFE guidance of $1.65 to $1.75 per share, subject to the risks and uncertainties
identified below under “Forward-Looking Statements.” In providing fiscal 2017 NFE guidance,
management is aware there could be differences between reported GAAP earnings and NFE due to matters
such as, but not limited to, the positions of our energy-related derivatives. Management is not able to
reasonably estimate the aggregate impact of these items on reported earnings and, therefore, is not able to
provide a reconciliation to the corresponding GAAP equivalent for its operating earnings guidance without
unreasonable efforts.
NJR expects its regulated businesses to generate between 60 to 75 percent of total NFE, with New Jersey
Natural Gas (NJNG) continuing to be the largest contributor. The following chart represents NJR’s current
expected contributions from its subsidiaries for fiscal 2017:
Company
Expected Fiscal 2017
Net Financial Earnings Contribution
New Jersey Natural Gas 55 to 65 percent
NJR Midstream 5 to 10 percent
Total Regulated 60 to 75 percent
NJR Clean Energy Ventures 15 to 25 percent
NJR Energy Services 5 to 15 percent
NJR Home Services 1 to 3 percent
▪ New Jersey Natural Gas Reports Steady Performance; Expects Solid Year-Over-Year Growth
NJNG, the company’s regulated utility, reported first-quarter fiscal 2017 NFE of $30.3 million, compared
with $30.9 million during the same period in fiscal 2016. The modestly lower results were driven primarily
by lower Basic Gas Service Supply (BGSS) incentive margin and higher operating and maintenance
expenses, which were mostly offset by increases in utility gross margin from higher base rates and customer
growth.
Through our Conservation Incentive Program (CIP) rate mechanism, which insulates the company from
declines in utility gross margin related to weather and customer usage, NJNG earns gross margin on the
basis of throughput. As such, approximately 65 percent of utility firm gross margin is earned during the
heating season of November through March. NJNG generated 28 percent of its utility gross margin during
the first quarter. NJNG typically earns approximately 42 percent of its utility gross margin during the second
fiscal quarter. As a result, the majority of the benefit of the base rate case will be realized in the second fiscal
quarter.
For fiscal 2017, using the midpoint of our guidance range for NJNG, compared with the prior year’s
financial results, we expect to achieve year-over-year NFE growth of approximately 10 to 15 percent.
During the first quarter of fiscal 2017, NJNG added 1,866 new customers compared with 2,046 during the
same period of fiscal 2016. The slightly lower customer additions, compared with the prior year, reflects
timing associated with adding planned residential conversion customers. For fiscal 2017, NJNG plans to
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
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invest $33.3 million to add 8,300 new and conversion customers, who are expected to contribute
approximately $5 million annually to utility gross margin.
NJNG expects to invest between $100 million to $110 million to add a total of 24,000 to 27,000 new
customers between fiscal 2017 and 2019, representing an annual new customer growth rate of approximately
1.6 percent and an increase in utility gross margin of approximately $15 million. For more information on
utility gross margin, please see “Non-GAAP Financial Information” below.
▪ Infrastructure Update
Safety Acceleration and Facilities Enhancement (SAFE) Program II
During the first quarter of fiscal 2017, NJNG invested $8.6 million in SAFE II, a five-year program
designed to replace the remaining 276 miles of unprotected steel main and associated services in its
distribution system. As part of this program, NJNG will earn an Allowance for Funds Used During
Construction rate on its invested capital during construction, and request rate increases for the approved
$157.5 million of SAFE II spending in annual filings, which is consistent with the company’s other
regulatory programs. As a condition of the New Jersey Board of Public Utilities’ (BPU) approval, NJNG is
required to file a base rate case no later than November 2019.
New Jersey Reinvestment in System Enhancement (NJ RISE) Program
NJ RISE, a five-year, $102.5 million investment, consists of six capital projects that will strengthen the
overall safety, reliability and resiliency of NJNG’s natural gas distribution systems and improve its service
disruption response. Since the inception of NJ RISE in 2014, NJNG has invested $19 million in the program,
including those expenditures made during the first quarter of fiscal 2017. These system enhancements are
designed to help reduce the impact of future major weather events and align with New Jersey’s directive for
improved energy resiliency and preparedness.
As part of the six capital projects, NJNG has installed nearly 7,600 of an expected 35,000 excess flow valves
in storm-prone areas of its service territory to date. These valves restrict the flow of natural gas when there is
a change in pressure on the service line. In addition, construction of a secondary feed into Sea Bright is
expected to be completed in fiscal 2017. The remaining four projects are in the design and/or permitting
phases with all projects scheduled for completion by fiscal 2019.
Southern Reliability Link (SRL)
The SRL, approved by the BPU in Board Orders issued in January and March 2016, continues to progress
through the permitting process. The 30-mile transmission pipeline project will serve as a second major feed
into NJNG’s system to support the safe, reliable delivery of natural gas to our customers. The SRL will
diversify NJNG’s supplier base and strengthen overall system resiliency, benefiting over one million people
in Ocean, Monmouth and Burlington counties.
▪ The SAVEGREEN Project® (SAVEGREEN) Saves Customers Energy and Money
In the first quarter of fiscal 2017, SAVEGREEN, NJNG’s energy-efficiency program, invested $3.7 million
in grants and financing options to help customers make affordable upgrades to high-efficiency natural gas
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
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equipment. Since its inception in 2009, NJNG has invested $140.3 million in SAVEGREEN, helping more
than 46,000 NJNG customers reduce energy consumption and lower their bills. The program runs through
December 31, 2018 and directly supports New Jersey’s Energy Master Plan. In addition, SAVEGREEN has
generated over $345 million in economic activity by working with the more than 2,500 contractors who have
participated in the project.
Over the life of the program, NJNG has approval to invest nearly $220 million in SAVEGREEN and is
authorized to earn an overall return on its investments, ranging from 6.69 to 7.76 percent, with a return on
equity (ROE) that ranges from 9.75 to 10.3 percent. The recovery period varies from two to 10 years,
depending on the type of investment.
▪ Basic Gas Supply Service Incentive Programs Contribute to Earnings
In the first quarter of fiscal 2017, NJNG’s gross margin-sharing BGSS incentive programs, which include
off-system sales, capacity release and storage incentives, contributed $3.8 million to utility gross margin,
compared with $4.5 million during the same period in fiscal 2016. The lower results were due to a decrease
in the value of capacity and lower volumes associated with the capacity release program, compared with the
previous year.
NJNG shares the utility gross margin earned from these incentive programs with customers and
shareowners, following formula authorized by the BPU. Since their inception in 1992, these incentive
programs have saved customers approximately $894 million and added an average of $.05 per share
annually.
▪ NJR Energy Services Annual Results Expected Within Guidance Range
NJR Energy Services (NJRES), NJR’s wholesale energy services provider, reported first-quarter fiscal 2017
NFE of $3.5 million, compared with $10.3 million during the same period in fiscal 2016. The weather in the
first quarter of fiscal 2017 was approximately 6 percent warmer than normal, which combined with the
timing of hedges, led to the quarter-over-quarter decline.
We remain confident that NJRES will contribute to NFE within its fiscal 2017 guidance range.
▪ NJR Clean Energy Ventures Contributes to Earnings; Strong Demand for Residential Solar
Continues
NJR Clean Energy Ventures (NJRCEV), the unregulated clean energy subsidiary of NJR, reported NFE of
$2.8 million in the first quarter of fiscal 2017 compared with $7.7 million during the same period in fiscal
2016. The results for the quarter reflect higher depreciation and interest expense, as well as the timing of tax
credits recognized compared with the same period last year. A further discussion of tax credits, which is the
largest contributor to the decline, and NJR’s effective tax rate are provided below.
NJRCEV expects solar-related capital expenditures for investment tax credit (ITC) eligible projects during
fiscal 2017 to be between $90 million and $110 million, compared with $85.6 million ITC-eligible projects
during fiscal 2016. The higher level of solar capital investment will deliver increased ITCs for fiscal 2017.
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
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Importantly, nearly all of the solar renewable energy credit (SREC) sales in fiscal 2017 from our in-service
solar facilities are hedged. NJRCEV expects fiscal 2017 revenue from SREC sales to be 17 percent higher,
compared with fiscal 2016.
Taken together, our increasing number of SRECs, tax credits, hedging strategy and earnings from wind
investments, support our belief that NJRCEV will perform within the expected guidance range for fiscal
2017, representing year-over-year growth of approximately 5 to 10 percent.
NJRCEV’s commercial solar capital expenditures for fiscal 2017 are fully committed and construction has
begun on a series of new commercial solar projects for the Brick Township Board of Education in Ocean
County, New Jersey. In total, the $6.6 million investment represents 2.5 megawatts (MWs) of capacity and is
expected to be completed in the summer of 2017. Additionally, three new commercial projects, totaling 24.4
MW, are planned for completion during fiscal 2017.
Demand remains strong for NJRCEV’s residential solar program. The Sunlight Advantage® added 314
residential customers during the first three months of fiscal 2017, totaling 2.8 MWs of capacity, compared
with 84 customers and 0.7 MWs of capacity during the same period in fiscal 2016. The Sunlight Advantage
currently provides savings to approximately 5,400 eligible homeowners through both roof- and ground-
mounted solar systems, with no upfront installation or maintenance costs. NJRCEV plans to invest $35.4
million in residential solar systems in fiscal 2017, compared with $34.3 million in fiscal 2016.
▪ Ringer Hill Wind Farm Completed
Construction was completed at the Ringer Hill Wind Farm in December 2016. NJRCEV invested $88.9
million to construct, own and operate the Somerset County, Pennsylvania wind farm, which consists of 14
General Electric turbines, with a total capacity of 39.9 MWs. The majority of the energy produced is hedged
under a 15-year agreement. We expect to earn a total return of approximately 15 percent on this investment.
NJRCEV’s onshore wind capacity now totals 126.6 MWs.
▪ Steady NJR Midstream Results
NJR Midstream, the company’s natural gas midstream asset segment, reported NFE of $2.4 million in the
first quarter of fiscal 2017, compared with $2.3 million during the same period in fiscal 2016. These results
were due primarily to slightly higher dividend income from its investment in Dominion Midstream Partners,
LP (NYSE: DM), a master limited partnership that owns several Federal Energy Regulatory Commission
(FERC)-regulated assets.
NJR Midstream’s investments include its 50 percent equity ownership in Steckman Ridge, jointly owned
with Spectra Energy, as well as a 20 percent interest in the proposed PennEast Pipeline. This 120-mile
pipeline is designed to bring lower cost natural gas produced in the Marcellus Shale region to homes and
businesses in Pennsylvania and New Jersey, and provide greater system reliability for local utilities.
PennEast filed a formal application with FERC in the fourth quarter of fiscal 2015 and currently estimates
the system will be in service by the first quarter of fiscal 2019. Based on FERC’s most recent schedule for
the completion of the final Environmental Impact Statement (EIS) for PennEast, FERC has scheduled the
Notice of Availability of the final EIS for April 7, 2017, and the 90-day Federal Authorization Decision
Deadline for July 7, 2017.
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
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▪ NJR Home Services Reports Results
NJR Home Services (NJRHS), the company’s unregulated retail and appliance service subsidiary, reported a
net financial loss of $848,000 in the first quarter of fiscal 2017, compared with a net financial loss of
$443,000 during the same period in fiscal 2016. Net financial losses are typical for NJRHS during the first
six months of the fiscal year due to the timing of service contract revenue recognition.
NJRHS offers home comfort solutions including service contracts for heating and cooling systems, HVAC
installations, plumbing and electrical services, standby generators and solar lease and purchase plans.
NJRHS’ service territory includes Monmouth, Ocean, Middlesex, Morris, Sussex, Warren and Hunterdon
counties in New Jersey.
▪ Tax Credits and NJR’s Effective Tax Rate
NJR’s effective tax rate is significantly impacted by the amount of tax credits that are forecasted to be earned
during the fiscal year. GAAP requires NJR to estimate its annual effective tax rate and use this rate to
calculate its year-to-date tax provision. Based on projects completed in the first quarter, NJRCEV’s forecast
of projects to be completed for the balance of the fiscal year and related ITCs, as well as projected GAAP
pre-tax income for the year, NJR’s estimated annual effective tax rate is 8.7 percent, compared with 14.7
percent during the same period the previous year. Accordingly, $7.4 million related to tax credits, net of
deferred taxes, were recognized in the first quarter of fiscal 2017, compared with $10.1 million, net of
deferred taxes, in the same period last year.
For NFE purposes, the effective tax rate for fiscal 2017 is estimated at 14.7 percent and $7.1 million of tax
credits were recognized in the first fiscal quarter, compared with $9.6 million last year. For a further
discussion of this tax adjustment and reconciliation to the most comparable GAAP measure, please see the
explanation below under “Non-GAAP Financial Information.”
The estimated effective tax rate is based on information and assumptions that are subject to change, and may
have a material impact on quarterly and annual NFE. Factors considered by management in estimating
completion of projects during the fiscal year include, but are not limited to, board of directors’ approval,
regulatory approval, execution of various contracts, including power purchase agreements, construction
logistics, permitting and interconnection completion. See the “Forward-Looking Statements” section of this
news release for further information regarding the inherent risks associated with solar investments.
Webcast Information
NJR will host a live webcast to discuss its financial results today at 10 a.m. EST. A few minutes prior to the
webcast, go to njresources.com and select “Investor Relations,” then scroll down to the “Events &
Presentations” section and click on the webcast link.
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
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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 (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
NFE guidance for fiscal 2017, forecasted contribution of business segments to fiscal 2017 NFE, future
NJNG customer growth, future NJNG capital expenditures and infrastructure investments, NJRCEV’s
onshore wind and solar investments, the results of future base rate cases, earnings growth, and the PennEast
Pipeline project.
The factors that could cause actual results to differ materially from NJR’s expectations include, but are not
limited to, weather and economic conditions; demographic changes in NJR’s service territory and their effect
on NJR’s customer growth; volatility of natural gas and other commodity prices and their impact on NJNG
customer usage, NJNG’s BGSS incentive programs, NJRES operations and on our risk management efforts;
changes in rating agency requirements and/or credit ratings and their effect on availability and cost of capital
to our Company; the impact of volatility in the credit markets on our access to capital; the ability to comply
with debt covenants; the impact to the asset values and resulting higher costs and funding obligations of our
pension and postemployment benefit plans as a result of potential downturns in the financial markets, lower
discount rates, revised actuarial assumptions or impacts associated with the Patient Protection and
Affordable Care Act; accounting effects and other risks associated with hedging activities and use of
derivatives contracts; commercial and wholesale credit risks, including the availability of creditworthy
customers and counterparties, and liquidity in the wholesale energy trading market; the ability to obtain
governmental and regulatory approvals such as the PennEast Pipeline project, land-use rights, electric grid
connection (in the case of clean energy projects) and/or financing for the construction, development and
operation of our unregulated energy investments and NJNG’s infrastructure projects in a timely manner;
risks associated with the management of our joint ventures and partnerships, and investment in a master
limited partnership; risks associated with our investments in clean energy projects, including the availability
of regulatory and tax incentives, the availability of viable projects, our eligibility for ITCs and PTCs, the
future market for Solar Renewable Energy Credits (SRECs) and electricity prices, and operational risks
related to projects in service; timing of qualifying for ITCs and PTCs due to delays or failures to complete
planned solar and wind energy projects and the resulting effect on our effective tax rate and earnings; the
level and rate at which NJNG’s costs and expenses are incurred and the extent to which they are allowed to
be recovered from customers through the regulatory process, including through future base rate case filings;
access to adequate supplies of natural gas and dependence on third-party storage and transportation facilities
for natural gas supply; operating risks incidental to handling, storing, transporting and providing customers
with natural gas; risks related to our employee workforce; the regulatory and pricing policies of federal and
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
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state regulatory agencies; the costs of compliance with present and future environmental laws, including
potential climate change-related legislation; the impact of a disallowance of recovery of environmental-
related expenditures and other regulatory changes; environmental-related and other litigation and other
uncertainties; risks related to cyber-attack or failure of information technology systems; and the impact of
natural disasters, terrorist activities and other extreme events on our operations and customers. The
aforementioned factors are detailed in the “Risk Factors” sections of our Form 10-K that we filed with the
Securities and Exchange Commission (SEC) on November 22, 2016, which is available on the SEC’s
website at sec.gov. Information included in this release is representative as of today only, and while NJR
periodically reassesses material trends and uncertainties affecting NJR’s results of operations and financial
condition in connection with its preparation of management’s discussion and analysis of results of operations
and financial condition contained in its Quarterly and Annual Reports filed with the SEC, NJR does not, by
including this statement, assume any obligation to review or revise any particular forward-looking statement
referenced herein in light of future events.
Non-GAAP Financial Information
This news release includes the non-GAAP financial measures NFE (losses), financial margin and utility
gross margin. A reconciliation of these non-GAAP financial measures to the most directly comparable
financial measures calculated and reported in accordance with GAAP can be found below. As an indicator of
the NJR’s operating performance, these measures should not be considered an alternative to, or more
meaningful than, net income or operating revenues as determined in accordance with GAAP. This
information has been provided pursuant to the requirements of SEC Regulation G.
NFE (losses) and financial margin exclude unrealized gains or losses on derivative instruments related to the
company’s unregulated subsidiaries and certain realized gains and losses on derivative instruments related to
natural gas that has been placed into storage at NJRES, net of applicable tax adjustments as described below.
Volatility associated with the change in value of these financial instruments and physical commodity
contracts is reported on the income statement in the current period. In order to manage its business, NJR
views its results without the impacts of the unrealized gains and losses, and certain realized gains and losses,
caused by changes in value of these financial instruments and physical commodity contracts prior to the
completion of the planned transaction because it shows changes in value currently instead of when the
planned transaction ultimately is settled. An annual estimated effective tax rate is calculated for NFE
purposes and any necessary quarterly tax adjustment is applied to NJRCEV, as such adjustment is related to
tax credits generated by NJRCEV.
NJNG’s utility gross margin represents the results of revenues less natural gas costs, sales, expenses and
other taxes and regulatory rider expenses, which are key components of NJR’s operations that move in
relation to each other. Natural gas costs, sales, expenses and other taxes and regulatory rider expenses are
passed through to customers and, therefore, have no effect on gross margin. Management uses these non-
GAAP financial measures as supplemental measures to other GAAP results to provide a more complete
understanding of NJR’s performance. Management believes these non-GAAP financial measures are more
reflective of NJR’s business model, provide transparency to investors and enable period-to-period
comparability of financial performance. A reconciliation of all non-GAAP financial measures to the most
directly comparable financial measures calculated and reported in accordance with GAAP, can be found
below. For a full discussion of NJR’s non-GAAP financial measures, please see NJR’s 2016 Form 10-K,
Item 7.
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
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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 comprised of five primary businesses:
• New Jersey Natural Gas, NJR’s principal subsidiary, operates and maintains over 7,300 miles of
natural gas transportation and distribution infrastructure to serve over half a million customers in
New Jersey’s Monmouth, Ocean and parts of Burlington, Morris and Middlesex counties.
• NJR Energy Services manages a diversified portfolio of natural gas transportation and storage
assets and provides physical natural gas services and customized energy solutions to its customers
across North America.
• NJR Clean Energy Ventures invests in, owns and operates solar and onshore wind projects with a
total capacity of nearly 280 megawatts, providing residential and commercial customers with low-
carbon solutions.
• NJR Midstream serves customers from local distributors and producers to electric generators and
wholesale marketers through its 50 percent equity ownership in the Steckman Ridge natural gas
storage facility and its stake in Dominion Midstream Partners, L.P., as well as its 20 percent equity
interest in the PennEast Pipeline Project.
• NJR Home Services provides service contracts as well as heating, central air conditioning, water
heaters, standby generators, solar and other indoor and outdoor comfort products to residential
homes throughout New Jersey.
NJR and its more than 1,000 employees are committed to helping customers save energy and money by
promoting conservation and encouraging efficiency through Conserve to Preserve® and initiatives such as
The SAVEGREEN Project® and The Sunlight Advantage®.
For more information about NJR:
Visit www.njresources.com.
Follow us on Twitter @NJNaturalGas.
“Like” us on facebook.com/NewJerseyNaturalGas.
Download our free NJR investor relations app for iPad, iPhone and Android.
NJR-E
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
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NEW JERSEY RESOURCES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
December 31,
(Thousands, except per share data) 2016 2015
OPERATING REVENUES
Utility $ 185,556 $ 151,606
Nonutility 355,472 292,652
Total operating revenues 541,028 444,258
OPERATING EXPENSES
Gas purchases
Utility 61,320 46,665
Nonutility 337,932 254,088
Related parties 2,111 2,074
Operation and maintenance 52,228 46,233
Regulatory rider expenses 12,601 9,628
Depreciation and amortization 19,260 16,482
Energy and other taxes 14,101 9,637
Total operating expenses 499,553 384,807
OPERATING INCOME 41,475 59,451
Other income, net 3,776 1,924
Interest expense, net 10,615 6,777
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES 34,636 54,598
Income tax provision 2,018 6,722
Equity in earnings of affiliates 2,311 2,406
NET INCOME $ 34,929 $ 50,282
EARNINGS PER COMMON SHARE
Basic $ 0.41 $ 0.59
Diluted $ 0.40 $ 0.58
DIVIDENDS DECLARED PER COMMON SHARE $ 0.255 $ 0.240
AVERAGE SHARES OUTSTANDING
Basic 86,084 85,675
Diluted 86,855 86,676
NEW JERSEY RESOURCES REPORTS FISCAL 2016 RESULTS AND
ANNOUNCES FISCAL 2017 EARNINGS GUIDANCE
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RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES
Three Months Ended
December 31,
(Thousands) 2016 2015
NEW JERSEY RESOURCES
A reconciliation of net income, the closest GAAP financial measurement, to net financial earnings, is as follows:
Net income $ 34,929 $ 50,282
Add:
Unrealized loss (gain) on derivative instruments and related transactions 28,302 (1,135)
Tax effect (9,757) 413
Effects of economic hedging related to natural gas inventory (17,939) 3,813
Tax effect 6,204 (1,385)
Net income to NFE tax adjustment (1,356) (721)
Net financial earnings $ 40,383 $ 51,267
Weighted Average Shares Outstanding
Basic 86,084 85,675
Diluted 86,855 86,676
A reconciliation of basic earnings per share, the closest GAAP financial measurement, to basic net financial earnings per share, is as follows:
Basic earnings per share $ 0.41 $ 0.59
Add:
Unrealized loss (gain) on derivative instruments and related transactions $ 0.33 $ (0.01)
Tax effect $ (0.11) $ 0.01
Effects of economic hedging related to natural gas inventory $ (0.21) $ 0.04
Tax effect $ 0.07 $ (0.02)
Net income to NFE tax adjustment $ (0.02) $ (0.01)
Basic NFE per share $ 0.47 $ 0.60
NATURAL GAS DISTRIBUTION
A reconciliation of operating revenue, the closest GAAP financial measurement, to utility gross margin is as follows:
Operating revenues $ 185,556 $ 151,606
Less:
Gas purchases 64,186 45,243
Energy and other taxes 10,882 6,908
Regulatory rider expense 12,601 9,628
Utility gross margin $ 97,887 $ 89,827
NEW JERSEY RESOURCES REPORTS FISCAL 2016 RESULTS AND
ANNOUNCES FISCAL 2017 EARNINGS GUIDANCE
Page 13 of 16
Three Months Ended
December 31,
(Thousands) 2016 2015
NJR ENERGY SERVICES
The following table is a computation of financial margin:
Operating revenues $ 337,181 $ 278,693
Less: Gas purchases 339,087 260,239
Add:
Unrealized loss (gain) on derivative instruments and related transactions 30,592 (2,387)
Effects of economic hedging related to natural gas inventory (17,939) 3,813
Financial margin $ 10,747 $ 19,880
A reconciliation of operating income, the closest GAAP financial measurement, to financial margin is as follows:
Operating (loss) income $ (7,395) $ 14,437
Add:
Operation and maintenance expense 5,018 3,757
Depreciation and amortization 16 23
Other taxes 455 237
Subtotal (1,906) 18,454
Add:
Unrealized loss (gain) on derivative instruments and related transactions 30,592 (2,387)
Effects of economic hedging related to natural gas inventory (17,939) 3,813
Financial margin $ 10,747 $ 19,880
A reconciliation of net income to net financial earnings, is as follows:
Net (loss) income $ (4,790) $ 9,396
Add:
Unrealized loss (gain) on derivative instruments and related transactions 30,592 (2,387)
Tax effect (10,580) 867
Effects of economic hedging related to natural gas, net of taxes (17,939) 3,813
Tax effect 6,204 (1,385)
Net financial earnings $ 3,487 $ 10,304
CLEAN ENERGY VENTURES
A reconciliation of net income to net financial earnings, is as follows:
Net income $ 4,198 $ 8,373
Add:
Net income to NFE tax adjustment (1,356) (721)
Net financial earnings $ 2,842 $ 7,652
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
Page 14 of 16
Three Months Ended
December 31,
(Thousands, except per share data) 2016 2015
NEW JERSEY RESOURCES
Operating Revenues
Natural Gas Distribution $ 185,556 $ 151,606
Energy Services 337,181 278,693
Clean Energy Ventures 7,567 7,794
Midstream — —
Home Services and Other 10,006 9,573
Sub-total 540,310 447,666
Eliminations 718 (3,408)
Total $ 541,028 $ 444,258
Operating Income (Loss)
Natural Gas Distribution $ 51,372 $ 47,707
Energy Services (7,395) 14,437
Clean Energy Ventures (4,293) (1,426)
Midstream (156) (151)
Home Services and Other (1,456) (1,030)
Sub-total 38,072 59,537
Eliminations 3,403 (86)
Total $ 41,475 $ 59,451
Equity in Earnings of Affiliates
Midstream $ 3,331 $ 3,545
Eliminations (1,020) (1,139)
Total $ 2,311 $ 2,406
Net Income (Loss)
Natural Gas Distribution $ 30,348 $ 30,926
Energy Services (4,790) 9,396
Clean Energy Ventures 4,198 8,373
Midstream 2,387 2,344
Home Services and Other 1,542 259
Sub-total 33,685 51,298
Eliminations 1,244 (1,016)
Total $ 34,929 $ 50,282
Net Financial Earnings
Natural Gas Distribution $ 30,348 $ 30,926
Energy Services 3,487 10,304
Clean Energy Ventures 2,842 7,652
Midstream 2,387 2,344
Home Services and Other 1,542 259
Sub-total 40,606 51,485
Eliminations (223) (218)
Total $ 40,383 $ 51,267
Throughput (Bcf)
NJNG, Core Customers 32.8 30.0
NJNG, Off System/Capacity Management 43.6 55.9
NJRES Fuel Mgmt. and Wholesale Sales 126.2 132.7
Total 202.6 218.6
Common Stock Data
Yield at December 31 2.9% 2.9%
Market Price
High $ 37.30 $ 34.07
Low $ 30.46 $ 28.02
Close at December 31 $ 35.50 $ 32.96
Shares Out. at December 31 86,196 85,809
Market Cap. at December 31 $ 3,059,966 $ 2,828,268
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
Page 15 of 16
Three Months Ended
(Unaudited) December 31,
(Thousands, except customer & weather data) 2016 2015
NATURAL GAS DISTRIBUTION
Utility Gross Margin
Operating revenues $ 185,556 $ 151,606
Less:
Gas purchases 64,186 45,243
Energy and other taxes 10,882 6,908
Regulatory rider expense 12,601 9,628
Total Utility Gross Margin $ 97,887 $ 89,827
Utility Gross Margin, Operating Income and Net Income
Residential $ 62,498 $ 55,076
Commercial, Industrial & Other 13,696 13,279
Firm Transportation 16,285 15,547
Total Firm Margin 92,479 83,902
Interruptible 1,624 1,390
Total System Margin 94,103 85,292
Off System/Capacity Management/FRM/Storage Incentive 3,784 4,535
Total Utility Gross Margin 97,887 89,827
Operation and maintenance expense 33,218 29,628
Depreciation and amortization 12,030 11,238
Other taxes not reflected in gross margin 1,267 1,254
Operating Income $ 51,372 $ 47,707
Net Income $ 30,348 $ 30,926
Throughput (Bcf)
Residential 12.6 8.9
Commercial, Industrial & Other 2.4 1.7
Firm Transportation 4.5 3.4
Total Firm Throughput 19.5 14.0
Interruptible 13.3 16.0
Total System Throughput 32.8 30.0
Off System/Capacity Management 43.6 55.9
Total Throughput 76.4 85.9
Customers
Residential 451,587 441,464
Commercial, Industrial & Other 27,995 27,240
Firm Transportation 45,847 47,536
Total Firm Customers 525,429 516,240
Interruptible 34 35
Total System Customers 525,463 516,275
Off System/Capacity Management* 30 27
Total Customers 525,493 516,302
*The number of customers represents those active during the last month of the period.
Degree Days
Actual 1,494 1,082
Normal 1,589 1,629
Percent of Normal 94.0% 66.4%
NEW JERSEY RESOURCES REPORTS FISCAL 2017 FIRST-QUARTER RESULTS
AND REAFFIRMS EARNINGS GUIDANCE
Page 16 of 16
Three Months Ended
(Unaudited) December 31,
(Thousands, except customer, SREC and megawatt) 2016 2015
ENERGY SERVICES
Operating Income
Operating revenues $ 337,181 $ 278,693
Less:
Gas purchases 339,087 260,239
Operation and maintenance expense 5,018 3,757
Depreciation and amortization 16 23
Energy and other taxes 455 237
Operating (Loss) Income $ (7,395) $ 14,437
Net (Loss) Income $ (4,790) $ 9,396
Financial Margin $ 10,747 $ 19,880
Net Financial Earnings $ 3,487 $ 10,304
Gas Sold and Managed (Bcf) 126.2 132.7
CLEAN ENERGY VENTURES
Operating Revenues
SREC sales $ 2,486 $ 4,604
Electricity sales 3,789 2,133
Other 1,292 1,057
Total Operating Revenues $ 7,567 $ 7,794
Depreciation and Amortization $ 7,041 $ 5,110
Operating (Loss) $ (4,293) $ (1,426)
Income Tax Benefit $ 11,887 $ 11,734
Net Income $ 4,198 $ 8,373
Net Financial Earnings $ 2,842 $ 7,652
Solar Renewable Energy Certificates Generated 41,443 35,014
Solar Renewable Energy Certificates Sold 10,319 21,182
Solar Megawatts Eligible for ITCs 2.8 0.7
Solar Megawatts Under Construction 3.9 18.8
Wind Megawatts Installed/Acquired 39.9 50.7
Wind Megawatts Under Construction — 39.9
MIDSTREAM
Equity in Earnings of Affiliates $ 3,331 $ 3,545
Other Income $ 917 $ 632
Income tax provision $ 1,649 $ 1,640
Net Income $ 2,387 $ 2,344
HOME SERVICES AND OTHER
Operating Revenues $ 10,006 $ 9,573
Operating (Loss) $ (1,456) $ (1,030)
Other income, net $ 2,827 $ 159
Net Income $ 1,542 $ 259
Total Service Contract Customers at December 31 113,285 116,099