• |
Consolidated net income of $115.9 million for the three months ended December 31, 2022, compared with net income of $111.3 million for the same period last year
|
• |
Consolidated net financial earnings (NFE), a non-GAAP financial measure, of $110.3 million, or $1.14 per share, for the three months ended December 31, 2022, compared to NFE of $65.8 million, or $0.69 per share, for the same period last year
|
• |
Increases fiscal 2023 net financial earnings per share (NFEPS) guidance to a range of $2.62 to $2.72, from $2.42 to $2.52, a $0.20 increase, as a result of the strong performance of our business units during Winter Storm Elliott, particularly Energy Services
|
• |
Maintains long-term projected NFEPS growth rate of 7 to 9 percent(1)
|
Three Months Ended
December 31,
|
||||||||
($ in Thousands)
|
2022
|
2021
|
||||||
Net income
|
$
|
115,921
|
$
|
111,312
|
||||
Basic EPS
|
$
|
1.20
|
$
|
1.16
|
||||
Net financial earnings
|
$
|
110,284
|
$
|
65,770
|
||||
Basic net financial earnings per share
|
$
|
1.14
|
$
|
0.69
|
Three Months Ended
December 31,
|
||||||||
(Thousands)
|
2022
|
2021
|
||||||
Net income
|
$
|
115,921
|
$
|
111,312
|
||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
(31,503
|
)
|
(82,191
|
)
|
||||
Tax effect
|
7,487
|
19,536
|
||||||
Effects of economic hedging related to natural gas inventory
|
23,972
|
23,577
|
||||||
Tax effect
|
(5,697
|
)
|
(5,603
|
)
|
||||
NFE tax adjustment
|
104
|
(861
|
)
|
|||||
Net financial earnings
|
$
|
110,284
|
$
|
65,770
|
||||
Weighted Average Shares Outstanding
|
||||||||
Basic
|
96,485
|
95,944
|
||||||
Diluted
|
97,083
|
96,356
|
||||||
Basic earnings per share
|
$
|
1.20
|
$
|
1.16
|
||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
(0.33
|
)
|
(0.86
|
)
|
||||
Tax effect
|
0.08
|
0.21
|
||||||
Effects of economic hedging related to natural gas inventory
|
0.25
|
0.25
|
||||||
Tax effect
|
(0.06
|
)
|
(0.06
|
)
|
||||
NFE tax adjustment
|
—
|
(0.01
|
)
|
|||||
Basic NFE per share
|
$
|
1.14
|
$
|
0.69
|
Three Months Ended
December 31,
|
||||||||
(Thousands)
|
2022
|
2021
|
||||||
New Jersey Natural Gas
|
$
|
54,664
|
$
|
51,080
|
||||
Clean Energy Ventures (CEV)
|
(3,582
|
)
|
(6,821
|
)
|
||||
Storage and Transportation
|
6,243
|
2,962
|
||||||
Energy Services
|
52,533
|
17,567
|
||||||
Home Services and Other
|
(29
|
)
|
447
|
|||||
Subtotal
|
109,829
|
65,235
|
||||||
Eliminations
|
455
|
535
|
||||||
Total
|
$
|
110,284
|
$
|
65,770
|
Company
|
Expected Fiscal 2023
Net Financial Earnings
Contribution
|
New Jersey Natural Gas
|
48 to 53 percent
|
Clean Energy Ventures
|
18 to 20 percent
|
Storage and Transportation
|
4 to 8 percent
|
Energy Services
|
20 to 25 percent
|
Home Services and Other
|
0 to 1 percent
|
• |
NJNG added 2,132 new customers during first-quarter fiscal 2023, compared with 1,730 in fiscal 2022. NJNG expects these new customers to contribute approximately $1.8 million of incremental utility gross margin on an annualized basis.
|
• |
NJNG's Infrastructure Investment Program (IIP) is a five-year, $150 million accelerated recovery program that began in fiscal 2021. IIP consists of a series of infrastructure projects designed to enhance the safety and reliability of NJNG's
natural gas distribution system. During the first quarter of fiscal 2023 NJNG spent $8.8 million under the program on various distribution system
reinforcement projects. On March 31, 2022, the Company filed its first rate recovery request with the BPU. On July 13, 2022, NJNG updated the filing with actual information through June 30, 2022, seeking recovery for $28.9
million of investments, including AFUDC, from November 30, 2020 through June 30, 2022. On September 7, 2022, the BPU issued an Order approving a stipulation of settlement effective October 1,
2022.
|
• |
During the first quarter of fiscal 2023, CEV placed 3 commercial projects into service, adding approximately 18 megawatts (MW) to total installed capacity.
|
• |
As of December 31, 2022, CEV had approximately 405MW of solar capacity (including residential) in service in New Jersey,
Rhode Island, New York and Connecticut.
|
• |
Subsequent to quarter end, CEV placed a 25MW commercial project into service, and now has over 430MW (including residential) of total installed capacity as of February 2, 2022.
|
• |
During the first-quarter of fiscal 2023, capital expenditures were $137.0 million, including accruals, of which $80.7 million were related to NJNG, compared with $152.7
million, of which $59.7 million were related to NJNG, during the same period in fiscal 2022. The decrease in capital expenditures was primarily due to the completion of the Adelphia Gateway Pipeline project, which was placed into service in
September 2022.
|
• |
During the first-quarter of fiscal 2023, cash flows used in operations were $88.9 million, compared
with cash flows used in operations of $37.4 million during the
same period of fiscal 2022. The decrease in operating cash flows was due to higher working capital requirements as a result of higher energy prices.
|
• |
New Jersey Natural Gas, NJR’s principal subsidiary, operates and maintains over 7,700 miles of natural gas transportation and distribution
infrastructure to serve over 570,000 customers in New Jersey’s Monmouth, Ocean and parts of Morris, Middlesex, Sussex and Burlington counties.
|
• |
Clean Energy Ventures invests in, owns and operates solar
projects with a total capacity of more than 430 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, 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.
|
Three Months Ended
December 31,
|
||||||||
(Thousands, except per share data)
|
2022
|
2021
|
||||||
OPERATING REVENUES
|
||||||||
Utility
|
$
|
357,409
|
$
|
274,435
|
||||
Nonutility
|
366,158
|
401,407
|
||||||
Total operating revenues
|
723,567
|
675,842
|
||||||
OPERATING EXPENSES
|
||||||||
Gas purchases
|
||||||||
Utility
|
182,446
|
122,269
|
||||||
Nonutility
|
232,070
|
278,794
|
||||||
Related parties
|
1,827
|
1,846
|
||||||
Operation and maintenance
|
79,501
|
68,984
|
||||||
Regulatory rider expenses
|
18,251
|
16,671
|
||||||
Depreciation and amortization
|
36,683
|
30,393
|
||||||
Total operating expenses
|
550,778
|
518,957
|
||||||
OPERATING INCOME
|
172,789
|
156,885
|
||||||
Other income, net
|
4,655
|
4,136
|
||||||
Interest expense, net of capitalized interest
|
29,491
|
19,477
|
||||||
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES
|
147,953
|
141,544
|
||||||
Income tax provision
|
32,978
|
30,807
|
||||||
Equity in earnings of affiliates
|
946
|
575
|
||||||
NET INCOME
|
$
|
115,921
|
$
|
111,312
|
||||
EARNINGS PER COMMON SHARE
|
||||||||
Basic
|
$
|
1.20
|
$
|
1.16
|
||||
Diluted
|
$
|
1.19
|
$
|
1.16
|
||||
WEIGHTED AVERAGE SHARES OUTSTANDING
|
||||||||
Basic
|
96,485
|
95,944
|
||||||
Diluted
|
97,083
|
96,356
|
||||||
Three Months Ended
December 31,
|
||||||||
(Thousands)
|
2022
|
2021
|
||||||
NEW JERSEY RESOURCES
|
||||||||
A reconciliation of net income, the closest GAAP financial measure, to net financial earnings is as follows:
|
||||||||
Net income
|
$
|
115,921
|
$
|
111,312
|
||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
(31,503
|
)
|
(82,191
|
)
|
||||
Tax effect
|
7,487
|
19,536
|
||||||
Effects of economic hedging related to natural gas inventory
|
23,972
|
23,577
|
||||||
Tax effect
|
(5,697
|
)
|
(5,603
|
)
|
||||
NFE tax adjustment
|
104
|
(861
|
)
|
|||||
Net financial earnings
|
$
|
110,284
|
$
|
65,770
|
||||
Weighted Average Shares Outstanding
|
||||||||
Basic
|
96,485
|
95,944
|
||||||
Diluted
|
97,083
|
96,356
|
||||||
A reconciliation of basic earnings per share, the closest GAAP financial measure, to basic net financial earnings per share is as follows:
|
||||||||
Basic earnings per share
|
$
|
1.20
|
$
|
1.16
|
||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
$
|
(0.33
|
)
|
$
|
(0.86
|
)
|
||
Tax effect
|
$
|
0.08
|
$
|
0.21
|
||||
Effects of economic hedging related to natural gas inventory
|
$
|
0.25
|
$
|
0.25
|
||||
Tax effect
|
$
|
(0.06
|
)
|
$
|
(0.06
|
)
|
||
NFE tax adjustment
|
$
|
—
|
$
|
(0.01
|
)
|
|||
Basic NFE per share
|
$
|
1.14
|
$
|
0.69
|
||||
NATURAL GAS DISTRIBUTION
|
||||||||
A reconciliation of gross margin, the closest GAAP financial measure, to utility gross margin is as follows:
|
||||||||
Operating revenues
|
$
|
357,746
|
$
|
274,772
|
||||
Less:
|
||||||||
Natural gas purchases
|
184,771
|
124,594
|
||||||
Operating and maintenance (1)
|
26,294
|
13,141
|
||||||
Regulatory rider expense
|
18,251
|
16,671
|
||||||
Depreciation and amortization
|
24,890
|
22,893
|
||||||
Gross margin
|
103,540
|
97,473
|
||||||
Add:
|
||||||||
Operating and maintenance (1)
|
26,294
|
13,141
|
||||||
Depreciation and amortization
|
24,890
|
22,893
|
||||||
Utility gross margin
|
$
|
154,724
|
$
|
133,507
|
(Unaudited)
|
Three Months Ended
December 31, |
|||||||
(Thousands)
|
2022
|
2021
|
||||||
ENERGY SERVICES
|
||||||||
A reconciliation of gross margin, the closest GAAP financial measure, to Energy Services' financial margin is as follows:
|
||||||||
Operating revenues
|
$
|
321,782
|
$
|
369,244
|
||||
Less:
|
||||||||
Natural Gas purchases
|
233,287
|
278,687
|
||||||
Operation and maintenance (1)
|
3,455
|
(13,871
|
)
|
|||||
Depreciation and amortization
|
57
|
28
|
||||||
Gross margin
|
84,983
|
104,400
|
||||||
Add:
|
||||||||
Operation and maintenance (1)
|
3,455
|
(13,871
|
)
|
|||||
Depreciation and amortization
|
57
|
28
|
||||||
Unrealized (gain) on derivative instruments and related transactions
|
(39,886
|
)
|
(85,647
|
)
|
||||
Effects of economic hedging related to natural gas inventory
|
23,972
|
23,577
|
||||||
Financial margin
|
$
|
72,581
|
$
|
28,487
|
A reconciliation of net income, the closest GAAP financial measure, to net financial earnings is as follows:
|
||||||||
Net income
|
$
|
64,561
|
$
|
65,744
|
||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
(39,886
|
)
|
(85,647
|
)
|
||||
Tax effect
|
9,479
|
20,357
|
||||||
Effects of economic hedging related to natural gas
|
23,972
|
23,577
|
||||||
Tax effect
|
(5,697
|
)
|
(5,603
|
)
|
||||
NFE tax adjustment
|
104
|
(861
|
)
|
|||||
Net financial earnings
|
$
|
52,533
|
$
|
17,567
|
||||
Three Months Ended
December 31,
|
||||||||
(Thousands, except per share data)
|
2022
|
2021
|
||||||
NEW JERSEY RESOURCES
|
||||||||
Operating Revenues
|
||||||||
Natural Gas Distribution
|
$
|
357,746
|
$
|
274,772
|
||||
Clean Energy Ventures
|
12,792
|
10,183
|
||||||
Energy Services
|
321,782
|
369,244
|
||||||
Storage and Transportation
|
26,838
|
12,143
|
||||||
Home Services and Other
|
14,266
|
13,951
|
||||||
Sub-total
|
733,424
|
680,293
|
||||||
Eliminations
|
(9,857
|
)
|
(4,451
|
)
|
||||
Total
|
$
|
723,567
|
$
|
675,842
|
||||
Operating Income (Loss)
|
||||||||
Natural Gas Distribution
|
$
|
80,113
|
$
|
74,183
|
||||
Clean Energy Ventures
|
(321
|
)
|
(3,972
|
)
|
||||
Energy Services
|
87,315
|
86,778
|
||||||
Storage and Transportation
|
12,617
|
1,876
|
||||||
Home Services and Other
|
51
|
862
|
||||||
Sub-total
|
179,775
|
159,727
|
||||||
Eliminations
|
(6,986
|
)
|
(2,842
|
)
|
||||
Total
|
$
|
172,789
|
$
|
156,885
|
||||
Equity in Earnings of Affiliates
|
||||||||
Storage and Transportation
|
$
|
909
|
$
|
1,056
|
||||
Eliminations
|
37
|
(481
|
)
|
|||||
Total
|
$
|
946
|
$
|
575
|
||||
Net Income (Loss)
|
||||||||
Natural Gas Distribution
|
$
|
54,664
|
$
|
51,080
|
||||
Clean Energy Ventures
|
(3,582
|
)
|
(6,821
|
)
|
||||
Energy Services
|
64,561
|
65,744
|
||||||
Storage and Transportation
|
6,243
|
2,962
|
||||||
Home Services and Other
|
(29
|
)
|
447
|
|||||
Sub-total
|
121,857
|
113,412
|
||||||
Eliminations
|
(5,936
|
)
|
(2,100
|
)
|
||||
Total
|
$
|
115,921
|
$
|
111,312
|
||||
Net Financial Earnings (Loss)
|
||||||||
Natural Gas Distribution
|
$
|
54,664
|
$
|
51,080
|
||||
Clean Energy Ventures
|
(3,582
|
)
|
(6,821
|
)
|
||||
Energy Services
|
52,533
|
17,567
|
||||||
Storage and Transportation
|
6,243
|
2,962
|
||||||
Home Services and Other
|
(29
|
)
|
447
|
|||||
Sub-total
|
109,829
|
65,235
|
||||||
Eliminations
|
455
|
535
|
||||||
Total
|
$
|
110,284
|
$
|
65,770
|
||||
Throughput (Bcf)
|
||||||||
NJNG, Core Customers
|
25.0
|
24.6
|
||||||
NJNG, Off System/Capacity Management
|
17.9
|
25.1
|
||||||
Energy Services Fuel Mgmt. and Wholesale Sales
|
44.2
|
63.5
|
||||||
Total
|
87.1
|
113.2
|
||||||
Common Stock Data
|
||||||||
Yield at December 31,
|
3.1
|
%
|
3.5
|
%
|
||||
Market Price at December 31,
|
$
|
49.62
|
$
|
41.06
|
||||
Shares Out. at December 31,
|
96,803
|
95,962
|
||||||
Market Cap. at December 31,
|
$
|
4,803,389
|
$
|
3,940,188
|
(Unaudited)
|
Three Months Ended
December 31, |
|||||||
(Thousands, except customer and weather data)
|
2022
|
2021
|
||||||
NATURAL GAS DISTRIBUTION
|
||||||||
Utility Gross Margin
|
||||||||
Operating revenues
|
$
|
357,746
|
$
|
274,772
|
||||
Less:
|
||||||||
Natural gas purchases
|
184,771
|
124,594
|
||||||
Operating and maintenance (1)
|
26,294
|
13,141
|
||||||
Regulatory rider expense
|
18,251
|
16,671
|
||||||
Depreciation and amortization
|
24,890
|
22,893
|
||||||
Gross margin
|
103,540
|
97,473
|
||||||
Add:
|
||||||||
Operating and maintenance (1)
|
26,294
|
13,141
|
||||||
Depreciation and amortization
|
24,890
|
22,893
|
||||||
Total Utility Gross Margin
|
$
|
154,724
|
$
|
133,507
|
||||
(1) Excludes selling, general and
administrative expenses of approximately $23.4 million and $23.3 million for the three months ended December 31, 2022 and 2021, respectively
|
||||||||
Utility Gross Margin, Operating Income and Net Income
|
||||||||
Residential
|
$
|
104,018
|
$
|
92,605
|
||||
Commercial, Industrial & Other
|
20,779
|
19,102
|
||||||
Firm Transportation
|
20,480
|
17,282
|
||||||
Total Firm Margin
|
145,277
|
128,989
|
||||||
Interruptible
|
761
|
754
|
||||||
Total System Margin
|
146,038
|
129,743
|
||||||
Off System/Capacity Management/FRM/Storage Incentive
|
8,686
|
3,764
|
||||||
Total Utility Gross Margin
|
154,724
|
133,507
|
||||||
Operation and maintenance expense
|
49,721
|
36,431
|
||||||
Depreciation and amortization
|
24,890
|
22,893
|
||||||
Operating Income
|
$
|
80,113
|
$
|
74,183
|
||||
|
||||||||
Net Income
|
$
|
54,664
|
$
|
51,080
|
||||
|
||||||||
Net Financial Earnings
|
$
|
54,664
|
$
|
51,080
|
||||
Throughput (Bcf)
|
||||||||
Residential
|
14.7
|
12.6
|
||||||
Commercial, Industrial & Other
|
2.7
|
2.3
|
||||||
Firm Transportation
|
4.0
|
3.6
|
||||||
Total Firm Throughput
|
21.4
|
18.5
|
||||||
Interruptible
|
3.6
|
6.1
|
||||||
Total System Throughput
|
25.0
|
24.6
|
||||||
Off System/Capacity Management
|
17.9
|
25.1
|
||||||
Total Throughput
|
42.9
|
49.7
|
||||||
Customers
|
||||||||
Residential
|
514,452
|
506,677
|
||||||
Commercial, Industrial & Other
|
32,302
|
31,756
|
||||||
Firm Transportation
|
25,628
|
28,073
|
||||||
Total Firm Customers
|
572,382
|
566,506
|
||||||
Interruptible
|
88
|
31
|
||||||
Total System Customers
|
572,470
|
566,537
|
||||||
Off System/Capacity Management*
|
30
|
24
|
||||||
Total Customers
|
572,500
|
566,561
|
||||||
*The number of customers represents those active during the last month of the period.
|
||||||||
Degree Days
|
||||||||
Actual
|
1,543
|
1,274
|
||||||
Normal
|
1,547
|
1,550
|
||||||
Percent of Normal
|
99.7
|
%
|
82.2
|
%
|
||||
(Unaudited)
|
Three Months Ended
December 31, |
|||||||
(Thousands, except customer, SREC, TREC and megawatt)
|
2022
|
2021
|
||||||
CLEAN ENERGY VENTURES
|
||||||||
Operating Revenues
|
||||||||
SREC sales
|
$
|
3,886
|
$
|
2,867
|
||||
TREC sales
|
1,202
|
846
|
||||||
Solar electricity sales and other
|
4,767
|
3,654
|
||||||
Sunlight Advantage
|
2,937
|
2,816
|
||||||
Total Operating Revenues
|
$
|
12,792
|
$
|
10,183
|
||||
Depreciation and Amortization
|
$
|
5,576
|
$
|
5,233
|
||||
Operating Loss
|
$
|
(321
|
)
|
$
|
(3,972
|
)
|
||
Income Tax Benefit
|
$
|
(1,837
|
)
|
$
|
(2,046
|
)
|
||
Net Loss
|
$
|
(3,582
|
)
|
$
|
(6,821
|
)
|
||
Net Financial Loss
|
$
|
(3,582
|
)
|
$
|
(6,821
|
)
|
||
Solar Renewable Energy Certificates Generated
|
98,462
|
92,172
|
||||||
Solar Renewable Energy Certificates Sold
|
16,812
|
12,200
|
||||||
Transition Renewable Energy Certificates Generated
|
8,345
|
6,085
|
||||||
Solar Renewable Energy Certificates II Generated
|
1,784
|
—
|
||||||
Solar Megawatts Under Construction
|
45.5
|
77.1
|
||||||
ENERGY SERVICES
|
||||||||
Operating Income
|
||||||||
Operating revenues
|
$
|
321,782
|
$
|
369,244
|
||||
Less:
|
||||||||
Gas purchases
|
233,287
|
278,687
|
||||||
Operation and maintenance expense
|
1,123
|
3,751
|
||||||
Depreciation and amortization
|
57
|
28
|
||||||
Total Operating Income
|
$
|
87,315
|
$
|
86,778
|
||||
Net Income
|
$
|
64,561
|
$
|
65,744
|
||||
Financial Margin
|
$
|
72,581
|
$
|
28,487
|
||||
Net Financial Earnings
|
$
|
52,533
|
$
|
17,567
|
||||
Gas Sold and Managed (Bcf)
|
44.2
|
63.5
|
||||||
STORAGE AND TRANSPORTATION
|
||||||||
Operating Revenues
|
$
|
26,838
|
$
|
12,143
|
||||
Equity in Earnings of Affiliates
|
$
|
909
|
$
|
1,056
|
||||
Operation and Maintenance Expense
|
$
|
7,474
|
$
|
7,430
|
||||
Other Income, Net
|
$
|
1,367
|
$
|
2,509
|
||||
Interest Expense
|
$
|
6,707
|
$
|
2,136
|
||||
Income Tax Provision
|
$
|
1,943
|
$
|
343
|
||||
Net Income
|
$
|
6,243
|
$
|
2,962
|
||||
Net Financial Earnings
|
$
|
6,243
|
$
|
2,962
|
||||
HOME SERVICES AND OTHER
|
||||||||
Operating Revenues
|
$
|
14,266
|
$
|
13,951
|
||||
Operating Income
|
$
|
51
|
$
|
862
|
||||
Net (Loss) Income
|
$
|
(29
|
)
|
$
|
447
|
|||
Net Financial (Loss) Earnings
|
$
|
(29
|
)
|
$
|
447
|
|||
Total Service Contract Customers at Dec 31
|
102,600
|
105,373
|
||||||