NEW JERSEY RESOURCES REPORTS FISCAL 2022 FOURTH-QUARTER

AND YEAR END RESULTS

Introduces Fiscal 2023 Guidance and Maintains its Long-term Projected Growth Rate

Outlook for Fiscal 2023

Steve Westhoven, President and CEO, stated, "Fiscal 2022 was an outstanding year for NJR. We took advantage of tightening energy markets across our complementary portfolio of businesses, allowing us to raise guidance two times during the fiscal year. We also made progress in executing our strategic growth objectives, highlighted by placing the Adelphia Gateway pipeline into service. This represented an important milestone for our company, and will help provide reliable energy to a capacity constrained region, which includes the Philadelphia metro area."

Key Performance Metrics

 

(1)	NFEPS long-term annual growth projections are based on the midpoint of the $2.20 - $2.30 initial guidance range for fiscal 2022, provided on February 1, 2021

A reconciliation of net income to NFE for the three and twelve months ended September 30, 2022 and 2021, is provided below.

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, Solar Renewable Energy Certificates (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 certain transactions associated with equity method investments, including impairment charges, which are non-cash charges, and return of capital in excess of the carrying value of our investment. These 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, 2022 and 2021, is provided below.

 

NJR is introducing fiscal 2023 NFE guidance of $2.42 to $2.52, which represents 9.8 percent year-over-year growth over the midpoint of the originally provided fiscal 2022 guidance range of $2.20 to $2.30, subject to the risks and uncertainties identified below under "Forward-Looking Statements." The following chart represents NJR’s current expected contributions from its business segments for fiscal 2023:

 

In providing fiscal 2023 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.

New Jersey Natural Gas

NJNG reported Fiscal 2022 NFE of $140.1 million, compared to NFE of $107.4 million during fiscal 2021.  Fourth-quarter fiscal 2022 net financial loss was $(16.4) million, compared to net financial loss of $(24.2) million during the same period in fiscal 2021. The improvement for both periods was due primarily to higher base rates, which became effective on December 1, 2021.

Customer Growth:

Infrastructure Update:

Basic Gas Supply Service (BGSS) Incentive Programs:

BGSS incentive programs contributed $7.5 million to utility gross margin in the fourth-quarter of fiscal 2022, compared with $3.5 million during the same period in fiscal 2021.

In fiscal 2022, these programs contributed $19.6 million to utility gross margin, compared with $13.4 million during fiscal 2021. The increase was due primarily to higher margins from off-system sales and storage incentive, partially offset by lower capacity release volumes.

For more information on utility gross margin, please see "Non-GAAP Financial Information" below.

Energy-Efficiency Programs:

SAVEGREEN invested $53.3 million in fiscal 2022 in energy-efficiency upgrades for their customers' homes and businesses, NJNG’s largest ever annual investment in the program. NJNG recovered $25.8 million of its outstanding investments during fiscal 2022 through its energy efficiency rate.

Clean Energy Ventures

CEV reported fiscal 2022 NFE of $39.4 million, compared with NFE of $16.8 million during fiscal 2021. Fourth-quarter fiscal 2022 NFE were $57.8 million, compared to NFE of $40.9 million during the same period in fiscal 2021.

The improvement for both periods was due primarily to higher SREC and electricity revenue, partially offset by higher operating expenses and income tax provision.

As of September 30, 2022, Clean Energy Ventures had approximately 386.6 megawatts (MW) of solar capacity in service in New Jersey, Rhode Island, New York and Connecticut. CEV has over 762 MW of potential capital projects under construction, under exclusivity or under contract.

Storage and Transportation

Energy Services

Energy Services reported fiscal 2022 NFE of $39.1 million, compared with NFE of $71.1 million during fiscal 2021. The decrease was due primarily to price volatility related to the extreme weather in the mid-continent and southern regions of the U.S. during February 2021, which did not reoccur to the same extent during 2022, partially offset by revenues from the Asset Management Agreements (AMAs) which commenced in November 2021.

Home Services and Other Operations

Home Services and Other Operations reported fiscal 2022 net financial loss of $(0.8) million, which was unchanged compared to the prior year.  Fourth-quarter fiscal 2022 net financial loss was $(1.9) million compared to a net financial loss of $(1.1) million for the same period in fiscal 2021.

Capital Expenditures and Cash Flows:

NJR is committed to maintaining a strong financial profile.

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 2023, forecasted contribution of business segments to NJR’s NFE for fiscal 2023, customer growth at NJNG, potential CEV capital projects through 2027, infrastructure programs and investments future decarbonization opportunities including IIP, the outcome of future Base Rate Cases with the BPU, Asset Management Agreements, 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.

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

NJR and its over 1,200 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:

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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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RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES (continued)

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FINANCIAL STATISTICS BY BUSINESS UNIT

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