NEW JERSEY RESOURCES REPORTS FIRST QUARTER FISCAL 2020 RESULTS

WALL, N.J., February 6, 2020 — Today, New Jersey Resources (NYSE: NJR) reported results for the first quarter of fiscal 2020. Highlights for the quarter included:

First quarter fiscal 2020 net income totaled $89.4 million, or $0.97 per share, compared with $86.2 million, or $0.97 per share, during the same period in fiscal 2019. First quarter fiscal 2020 NFE totaled $40.4 million, or $0.44 per share, compared with $54.1 million, or $0.61 per share, during fiscal 2019.

"Our energy infrastructure investments provide value to our shareowners and support New Jersey’s clean energy goals. New Jersey Natural Gas continues to strengthen its system, enhance reliability and reduce emissions as we add customers who want clean, affordable natural gas. We recently announced that NJR will voluntarily reduce its operational emissions in New Jersey by 50% by 2030 as we continue to lead the way on sustainability,” said Steve Westhoven, President and CEO of New Jersey Resources. "With the acquisition of the Leaf River Energy Center in October and Adelphia Gateway in January, we expanded our midstream portfolio and became the operator of NJR’s first FERC regulated assets.”

Key Performance Metrics

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A reconciliation of net income to NFE for the three months ended December 31, 2019, and 2018, is provided below.

NFE is a financial measure not calculated in accordance with Generally Accepted Accounting Principles (GAAP) of the United States. It is a measure of earnings based on eliminating timing differences surrounding the recognition of certain gains or losses, net of applicable tax adjustments, to effectively match the earnings effects of the economic hedges with the physical sale of natural gas, SRECs and foreign currency contracts. NFE eliminates the impact of volatility to GAAP earnings associated with unrealized gains and losses on derivative instruments in the current period. For further discussion of this financial measure, please see the explanation below under “Non-GAAP Financial Information.”

GAAP requires us, during the interim periods, to estimate our annual effective tax rate and use this rate to calculate the year-to-date tax provision. We also determine an annual estimated effective tax rate for NFE purposes and calculate a quarterly tax adjustment based on the differences between our forecasted net income and our forecasted NFE for the fiscal year. Since the annual estimated effective tax rate is based on certain forecasted assumptions, including estimates surrounding completion of Clean Energy Ventures projects, the rate and resulting NFE are subject to change. No adjustment is needed during the fourth quarter, since the actual effective tax rate is calculated at year end.

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A table detailing NFE for the three months ended December 31, 2019, and 2018, is provided below.

Net Financial Earnings (Loss) by Business Unit

NJR Reaffirms Fiscal 2020 NFE Guidance:

NJR reaffirmed fiscal 2020 NFE guidance of $2.05 to $2.15 per share, subject to the risks and uncertainties identified below under “Forward-Looking Statements.” The following chart represents NJR’s updated current expected contributions from its subsidiaries for fiscal 2020:

In providing fiscal 2020 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.

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Regulated Business Update:

New Jersey Natural Gas

NJNG reported first quarter fiscal 2020 NFE of $43.9 million, compared with $31.7 million during the same period in fiscal 2019. The increase was due primarily to the base rate increase resulting from NJNG's recent rate case settlement.

Customer Growth:

Rate Case Settlement:

Infrastructure Update:

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BGSS Incentive Programs:

BGSS incentive programs contributed $2.7 million to utility gross margin in the first quarter of fiscal 2020, compared with $2.0 million during the same period in fiscal 2019. The higher results were due to improved margins in off-system sales and storage incentive programs, and were partially offset by a decrease in capacity release volume.

Energy-Efficiency Programs:

The SAVEGREEN Project^®, NJNG’s energy-efficiency program, invested $8.7 million during the first quarter of fiscal 2020 to help customers with energy-efficiency upgrades for their homes, businesses and large hospitals.

Midstream

Midstream reported first quarter fiscal 2020 NFE of $3.0 million, compared with $3.7 million during the same period in fiscal 2019. The decrease in NFE was primarily due to the recognition of a $3.4 million gain in the first quarter of 2019 on NJR's equity investment in Dominion, partially offset by contributions from Leaf River.

Infrastructure Updates:

Unregulated Businesses Update:

Energy Services

Energy Services reported a first quarter fiscal 2020 net financial loss of $2.9 million, compared with NFE of $8.4 million during the same period last year. The decrease in NFE was due primarily to lower volumes and narrower pricing spreads in the wholesale natural gas markets, leading to fewer market opportunities as compared to the prior year.

Clean Energy Ventures

CEV reported a first quarter fiscal 2020 net financial loss of $4.9 million, compared with NFE of $10.2 million during the same period in fiscal 2019. The decrease was due to lower SREC revenue resulting from the timing of SREC sales, recognition of lower investment tax credits and the absence of contributions from the wind portfolio, which was sold in February 2019.

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Solar Investment Update:

Home Services and Other Operations

Home Services and Other Operations reported first quarter fiscal 2020 NFE of $1.1 million, compared with NFE of $0.1 million during the same period in fiscal 2019. The increase was due primarily to increased installation revenue and lower O&M expenses.

Effective Tax Rate:

NJR’s estimated annual effective tax rate increased from (7.2) percent in fiscal 2019 to 0.6 percent in fiscal 2020. In the first quarter of fiscal 2020, NJR recognized $17.2 million related to tax credits, net of deferred taxes, compared with $22.3 million during the same period last year.

For NFE purposes, the effective tax rate also increased from (13.0) percent to (3.0) percent, and NJR recognized $14.5 million in tax credits, net of deferred taxes.

Capital Expenditures and Cash Flows:

NJR is committed to maintaining a strong financial profile, while continuing to invest capital in regulated and unregulated energy projects.

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Sustainability Initiatives:

As part of NJR's commitment to sustainability and clean energy goals, the company has outlined a new sustainability agenda, highlighted by a commitment to voluntarily reduce its New Jersey operational emissions to 50% of 2006 levels by 2030. The new sustainability agenda, announced on January 22, 2020, includes:

NJR's sustainability website and more information can be found at NJRSustainability.com.

Webcast Information:

NJR will host a live webcast to discuss its financial results today at 10 a.m. ET. 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.

Forward-Looking Statements:

This earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. New Jersey Resources Corporation (NJR) cautions readers that the assumptions forming the basis for forward-looking statements include many factors that are beyond NJR’s ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other market participants. Words such as “anticipates,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “believes,” “should” and similar expressions may identify forward-looking statements and such forward-looking statements are made based upon management’s current expectations, assumptions and beliefs as of this date concerning future developments and their potential effect upon NJR. There can be no assurance that future developments will be in accordance with management’s expectations, assumptions and beliefs or that the effect of future developments on NJR will be those anticipated by management. Forward-looking statements in this earnings release include, but are not limited to, certain statements regarding NJR’s NFE guidance for fiscal 2020, forecasted contribution of business segments to fiscal 2020 NFE, future NJNG customer and utility gross margin growth, NJR's environmental, sustainability and clean energy goals, emission reduction targets, future NJR capital expenditures, infrastructure programs and investments, Clean Energy Ventures’ ITC-eligible projects and demand for residential solar, earnings growth, as well as the ability to construct and operate the Adelphia Gateway project, operate the Leaf River Energy Center, and construct the SRL and PennEast pipeline projects.

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, 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, NFE per basic share, financial margin and utility gross margin. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found below. As an indicator of NJR’s operating performance, these measures should not be considered an alternative to, or more meaningful than, net income or operating revenues as determined in accordance with GAAP. This information has been provided pursuant to the requirements of SEC Regulation G. NFE/net financial loss and financial margin exclude unrealized gains or losses on derivative instruments related to the company’s unregulated subsidiaries and certain realized gains and losses on derivative instruments related to natural gas that has been placed into storage at Energy Services, net of applicable tax adjustments as described below. Volatility associated with the change in value of these financial instruments and physical commodity reported on the income statement in the current period. In order to manage its business, NJR views its results without the impacts of the unrealized gains and losses, and certain realized gains and losses, caused by changes in value of these financial instruments and physical commodity contracts prior to the completion of the planned transaction because it shows changes in value currently instead of when the planned transaction ultimately is settled. An annual estimated effective tax rate is calculated for NFE purposes and any necessary quarterly tax adjustment is applied to CEV, as such the adjustment is related to tax credits generated by CEV.

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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 2019 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:

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.
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NEW JERSEY RESOURCES
CONSOLIDATED STATEMENTS OF OPERATIONS

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RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES

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FINANCIAL STATISTICS BY BUSINESS UNIT
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