NEW JERSEY RESOURCES REPORTS THIRD-QUARTER FISCAL 2021 RESULTS

WALL, N.J., August 5, 2021 — Today, New Jersey Resources (NYSE: NJR) reported results for the third-quarter of fiscal 2021. Highlights include:

Third-quarter fiscal 2021 net loss totaled $(111.8) million, or $(1.16) per share, compared with $(19.3) million, or $(0.20) per share, during the same period in fiscal 2020. Fiscal 2021 year-to-date net income totaled $119.0 million, or $1.24 per share, compared with $130.3 million, or $1.38 per share, for the same period in fiscal 2020.

Third-quarter fiscal 2021 net financial loss totaled $(14.1) million, or $(0.15) per share, compared to NFE of $2.7 million, or $0.03 per share, during the same period in fiscal 2020. Fiscal 2021 year-to-date NFE totaled $201.1 million, or $2.09 per share, compared with $121.9 million, or $1.29 per share, for the same period in fiscal 2020. The difference between GAAP earnings and NFE is due primarily to a $92.0 million impairment charge ($72.7 million after considering the tax effect) related to NJR's investment in the PennEast Project, which is excluded from NFE.

"NJR's performance this fiscal year, led by the impressive results from Energy Services, has allowed us to outperform our expectations and we are increasing our fiscal 2021 NFEPS guidance to a range of $2.10 to $2.20 per share," said Steve Westhoven, President and CEO of New Jersey Resources. "We remain committed to executing on our long-term strategy and delivering value to our shareowners."

Key Performance Metrics

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Effective October 1, 2020, NJR changed its method of accounting for Investment Tax Credits (ITCs) from the flow through method to the deferral method. The change is applied retrospectively to all periods presented in our third-quarter fiscal 2021 Form 10-Q (Form 10-Q) that will be filed with the U.S. Securities and Exchange Commission (SEC). Our historical financial reporting presented herein has been retrospectively revised to apply this change. For additional details, please refer to our Form 10-Q.

A reconciliation of net income to NFE for the three and nine months ended June 30, 2021, and 2020, 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, Solar Renewable Energy Certificates (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 and excludes the impairment of NJR's investment in the PennEast Project. For further discussion of this financial measure, please see the explanation below under “Non-GAAP Financial Information.”

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GAAP requires NJR, during the interim periods, to estimate its annual effective tax rate and use this rate to calculate the year-to-date tax provision. NJR also determines an annual estimated effective tax rate for NFE purposes and calculates a quarterly tax adjustment based on the differences between its forecasted net income and its forecasted NFE for the fiscal year.

A table detailing NFE for the three and nine months ended June 30, 2021, and 2020, is provided below.

Net Financial Earnings (Loss) by Business Unit

Fiscal 2021 NFE Guidance Increase:

NJR increased fiscal 2021 NFE guidance to a range of $2.10 to $2.20, due primarily to better than expected performance by Energy Services and higher BGSS incentives at NJNG. The following chart represents NJR’s current expected contributions from its subsidiaries for fiscal 2021:

In providing fiscal 2021 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 third-quarter fiscal 2021 NFE of $1.6 million, compared to NFE of $12.0 million during the same period in fiscal 2020. The decrease in NFE for the quarter was due primarily to higher O&M expenses related to increased bad debt and compensation expense. Fiscal 2021 year-to-date NFE was $131.6 million, compared to NFE of $142.2 million during the same period in fiscal 2020. The year-to-date decrease in NFE was due primarily to higher O&M expenses related to increased compensation, technology and bad debt expense.

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Customer Growth:

Base Rate Filing:

Infrastructure Update:

BGSS Incentive Programs:

BGSS incentive programs contributed $3.3 million to utility gross margin in the third quarter of fiscal 2021, compared with $2.4 million during the same period in fiscal 2020. The higher results for the third quarter were due primarily to improved margins in storage incentives compared to the same period last year.

Fiscal 2021 year-to-date, these programs contributed $10.0 million to utility gross margin, compared with $6.7 million during the same period in fiscal 2020. The higher results for fiscal 2021 year-to-date were due primarily to improved margins in off-system sales and storage incentives compared to the same period last year.

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

Energy-Efficiency Programs:

SAVEGREEN invested $14.5 million during the first nine months of fiscal 2021 to help customers with energy-efficiency upgrades for their homes and businesses. NJNG recovered $10.2 million of its outstanding investments during the first nine months of fiscal 2021.

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Clean Energy Ventures (CEV)

CEV reported a net financial loss of $(4.9) million during the third quarter of fiscal 2021, compared with a net financial loss of $(5.7) million during the same period in fiscal 2020. The increase in NFE for the quarter is primarily due to decreased depreciation expense partially offset by increased O&M related to higher leasing expenses.

Fiscal 2021 year-to-date net financial loss was $(24.1) million, compared with a net financial loss of $(22.7) million during the same period in fiscal 2020. The year-to-date decrease in NFE was due primarily to higher O&M related to increased project maintenance, leasing and information technology expenses, partially offset by decreased depreciation expense.

Storage and Transportation

Storage and Transportation, formerly known as our Midstream reporting segment, reported third-quarter fiscal 2021 NFE of $2.4 million, compared with NFE of $3.6 million during the same period in fiscal 2020. The decrease in NFE for the quarter is primarily due to increased interest expense related to the acquisitions of Adelphia Gateway and Leaf River. Fiscal 2021 year-to-date NFE was $10.6 million, compared with NFE of $10.9 million during the same period in fiscal 2020.

The NFE results for the three and nine months periods of fiscal 2021 exclude a $72.7 million after-tax impairment charge related to NJR's investment in the PennEast Project.

Infrastructure Updates:

Energy Services

Energy Services reported third-quarter fiscal 2021 net financial loss of $(12.5) million, compared with a net financial loss of $(5.9) million for the same period last fiscal year. The decrease in NFE for the quarter was due primarily to the timing of settlement of certain transportation and storage options. Fiscal 2021 year-to-date NFE was $85.5 million, compared with a net financial loss of $(9.3) million during the same period in fiscal 2020. The year-to-date 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.

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Home Services and Other Operations

Home Services and Other Operations reported third-quarter fiscal 2021 net financial loss of $(0.4) million compared with a net financial loss of $(0.6) million for the same period in fiscal 2020. Fiscal 2021 year-to-date NFE was $0.3 million, compared with NFE of $0.7 million during the same period in fiscal 2020.

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. 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 NFEPS guidance for fiscal 2021, results of ongoing and future rate cases, forecasted contribution of business segments to NJR’s NFE for fiscal 2021, future NJR and NJNG capital expenditures, infrastructure programs and investments such as SRL, IIP, SAFE II and energy efficiency programs, the ability to construct and operate the Adelphia Gateway Pipeline project, and the ability to construct PennEast, 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.

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NFE 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 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 NJRES.

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 2020 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 nearly 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:

www.njresources.com.
Follow us on Twitter @NJNaturalGas.
“Like” us on facebook.com/NewJerseyNaturalGas.

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NEW JERSEY RESOURCES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

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RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES

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FINANCIAL STATISTICS BY BUSINESS UNIT
(Unaudited)

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