• |
Consolidated net income of $111.3 million for the three months ended December 31, 2021, compared with $81.0 million for the same period last year
|
• |
Consolidated net financial earnings (NFE), a non-GAAP financial measure, of $65.8 million, or $0.69 per share for the three months ended December 31, 2021, compared with NFE of $44.7 million, or $0.46 per share, for the same period last
year
|
• |
Re-affirmed fiscal 2022 net financial earnings per share (NFEPS) guidance range of $2.20 to $2.30
|
• |
New Jersey Natural Gas (NJNG) received approval from the New Jersey Board of Public Utilities (BPU) on the settlement of its rate case, authorizing a $79.3 million increase to its base rates with new rates effective on December 1, 2021
|
• |
NJNG's Hydrogen project was completed and began producing green hydrogen in October 2021 and was included in the settlement of the base rate case
|
• |
A new North Zone delivery point for Adelphia Gateway began operations in January 2022
|
• |
Asset Management Agreements (AMAs)* at Energy Services became effective during the first-quarter
|
Three Months Ended
December 31,
|
||||||||
($ in Thousands)
|
2021
|
2020
|
||||||
Net income
|
$
|
111,312
|
$
|
81,045
|
||||
Basic EPS
|
$
|
1.16
|
$
|
0.84
|
||||
Net financial earnings
|
$
|
65,770
|
$
|
44,657
|
||||
Basic net financial earnings per share
|
$
|
0.69
|
$
|
0.46
|
NJR Reports First Quarter Fiscal 2022 Results
|
Page 2 of 13
|
Three Months Ended
December 31,
|
||||||||
(Thousands)
|
2021
|
2020
|
||||||
Net income
|
$
|
111,312
|
$
|
81,045
|
||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
(82,191
|
)
|
(37,491
|
)
|
||||
Tax effect
|
19,536
|
8,913
|
||||||
Effects of economic hedging related to natural gas inventory
|
23,577
|
(7,532
|
)
|
|||||
Tax effect
|
(5,603
|
)
|
1,790
|
|||||
Net income to NFE tax adjustment
|
(861
|
)
|
(2,068
|
)
|
||||
Net financial earnings
|
$
|
65,770
|
$
|
44,657
|
||||
Weighted Average Shares Outstanding
|
||||||||
Basic
|
95,944
|
96,114
|
||||||
Diluted
|
96,356
|
96,415
|
||||||
Basic earnings per share
|
$
|
1.16
|
$
|
0.84
|
||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
(0.86
|
)
|
(0.39
|
)
|
||||
Tax effect
|
0.21
|
0.09
|
||||||
Effects of economic hedging related to natural gas inventory
|
0.25
|
(0.08
|
)
|
|||||
Tax effect
|
(0.06
|
)
|
0.02
|
|||||
Net income to NFE tax adjustment
|
(0.01
|
)
|
(0.02
|
)
|
||||
Basic net financial earnings per share
|
$
|
0.69
|
$
|
0.46
|
NJR Reports First Quarter Fiscal 2022 Results
|
Page 3 of 13
|
Three Months Ended
December 31,
|
||||||||
(Thousands)
|
2021
|
2020
|
||||||
New Jersey Natural Gas
|
$
|
51,080
|
$
|
49,467
|
||||
Clean Energy Ventures
|
(6,821
|
)
|
(10,274
|
)
|
||||
Storage and Transportation
|
2,962
|
3,508
|
||||||
Energy Services
|
17,567
|
1,500
|
||||||
Home Services and Other
|
447
|
(62
|
)
|
|||||
Subtotal
|
65,235
|
44,139
|
||||||
Eliminations
|
535
|
518
|
||||||
Total
|
$
|
65,770
|
$
|
44,657
|
Company
|
Expected Fiscal 2022
Net Financial Earnings
Contribution
|
New Jersey Natural Gas
|
60 to 65 percent
|
Clean Energy Ventures
|
20 to 23 percent
|
Storage and Transportation
|
5 to 10 percent
|
Energy Services
|
9 to 11 percent
|
Home Services and Other
|
0 to 1 percent
|
NJR Reports First Quarter Fiscal 2022 Results
|
Page 4 of 13
|
• |
NJNG added 1,730 new customers during the first-quarter of fiscal 2022, compared with 1,948 in fiscal 2021. The decrease in customer additions was due primarily to slower growth in the new construction market during the first quarter of
fiscal 2022.
|
• |
On November 17, 2021, NJNG received approval from the BPU on its rate case settlement agreement and new
rates were effective on December 1, 2021. Under the approved rate case agreement, NJNG's total annual revenue is expected to increase by $79.0 million and includes a return on equity of 9.60% with a 54.0% common equity ratio and reflects
a rate base of $2.52 billion with an overall rate of return of 6.84%.
|
• |
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. In the first quarter, NJNG spent $5.7 million under the program to begin work on various distribution system reinforcement projects.
|
• |
The Howell Green Hydrogen Project delivers hydrogen through NJNG's utility distribution pipeline to heat customers' homes and businesses and began commercial operation in October 2021. The recovery of the investment in this project was included
in the recently completed rate case.
|
• |
Placed a solar project into service, adding 1.0 megawatt (MW) to CEV's total installed capacity.
|
NJR Reports First Quarter Fiscal 2022 Results
|
Page 5 of 13
|
• |
Adelphia Gateway - In January 2022, Adelphia Gateway placed into service a new delivery point and the associated facilities in its North Zone.
|
• |
During the first-quarter of fiscal 2022, capital expenditures were $152.7 million, including accruals, of which $59.7 million were related to NJNG, compared with $119.3 million, of which $83.9 million were related to NJNG, during the
same period in fiscal 2021.
|
• |
During the first-quarter of fiscal 2022, cash flows used in operations were $37.4 million, compared
with cash flows from operations of $31.7 million during the same period of
fiscal 2021. The decrease in operating cash flows was due primarily to changes in working capital.
|
NJR Reports First Quarter Fiscal 2022 Results
|
Page 6 of 13
|
NJR Reports First Quarter Fiscal 2022 Results
|
Page 7 of 13
|
• |
New Jersey Natural Gas, NJR’s principal subsidiary, operates and maintains over 7,500 miles of natural gas transportation and distribution infrastructure to
serve over half a million customers in New Jersey’s Monmouth, Ocean and parts of Morris, Middlesex and Burlington counties.
|
• |
Clean Energy Ventures invests in, owns and operates solar projects with a total capacity of more than 365 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 Project, 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.
|
NJR Reports First Quarter Fiscal 2022 Results
|
Page 8 of 13
|
Three Months Ended
December 31,
|
||||||||
(Thousands, except per share data)
|
2021
|
2020
|
||||||
OPERATING REVENUES
|
||||||||
Utility
|
$
|
274,435
|
$
|
195,729
|
||||
Nonutility
|
401,407
|
258,576
|
||||||
Total operating revenues
|
675,842
|
454,305
|
||||||
OPERATING EXPENSES
|
||||||||
Gas purchases
|
||||||||
Utility
|
122,269
|
56,145
|
||||||
Nonutility
|
278,794
|
173,247
|
||||||
Related parties
|
1,846
|
1,734
|
||||||
Operation and maintenance
|
68,984
|
73,636
|
||||||
Regulatory rider expenses
|
16,671
|
10,701
|
||||||
Depreciation and amortization
|
30,393
|
27,362
|
||||||
Total operating expenses
|
518,957
|
342,825
|
||||||
OPERATING INCOME
|
156,885
|
111,480
|
||||||
Other income, net
|
4,136
|
4,117
|
||||||
Interest expense, net of capitalized interest
|
19,477
|
19,786
|
||||||
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES
|
141,544
|
95,811
|
||||||
Income tax provision
|
30,807
|
17,441
|
||||||
Equity in earnings of affiliates
|
575
|
2,675
|
||||||
NET INCOME
|
$
|
111,312
|
$
|
81,045
|
||||
EARNINGS PER COMMON SHARE
|
||||||||
Basic
|
$
|
1.16
|
$
|
0.84
|
||||
Diluted
|
$
|
1.16
|
$
|
0.84
|
||||
WEIGHTED AVERAGE SHARES OUTSTANDING
|
||||||||
Basic
|
95,944
|
96,114
|
||||||
Diluted
|
96,356
|
96,415
|
||||||
NJR Reports First Quarter Fiscal 2022 Results
|
Page 9 of 13
|
Three Months Ended
December 31,
|
||||||||
(Thousands)
|
2021
|
2020
|
||||||
NEW JERSEY RESOURCES
|
||||||||
A reconciliation of net income, the closest GAAP financial measurement, to net financial earnings is as follows:
|
||||||||
Net income
|
$
|
111,312
|
$
|
81,045
|
||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
(82,191
|
)
|
(37,491
|
)
|
||||
Tax effect
|
19,536
|
8,913
|
||||||
Effects of economic hedging related to natural gas inventory
|
23,577
|
(7,532
|
)
|
|||||
Tax effect
|
(5,603
|
)
|
1,790
|
|||||
Net income to NFE tax adjustment
|
(861
|
)
|
(2,068
|
)
|
||||
Net financial earnings
|
$
|
65,770
|
$
|
44,657
|
||||
Weighted Average Shares Outstanding
|
||||||||
Basic
|
95,944
|
96,114
|
||||||
Diluted
|
96,356
|
96,415
|
||||||
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
|
$
|
1.16
|
$
|
0.84
|
||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
$
|
(0.86
|
)
|
$
|
(0.39
|
)
|
||
Tax effect
|
$
|
0.21
|
$
|
0.09
|
||||
Effects of economic hedging related to natural gas inventory
|
$
|
0.25
|
$
|
(0.08
|
)
|
|||
Tax effect
|
$
|
(0.06
|
)
|
$
|
0.02
|
|||
Net income to NFE tax adjustment
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
||
Basic NFE per share
|
$
|
0.69
|
$
|
0.46
|
||||
NATURAL GAS DISTRIBUTION
|
||||||||
A reconciliation of operating revenue, the closest GAAP financial measurement, to utility gross margin is as follows:
|
||||||||
Operating revenues
|
$
|
274,772
|
$
|
195,729
|
||||
Less:
|
||||||||
Gas purchases
|
124,594
|
59,309
|
||||||
Regulatory rider expense
|
16,671
|
10,701
|
||||||
Utility gross margin
|
$
|
133,507
|
$
|
125,719
|
||||
NJR Reports First Quarter Fiscal 2022 Results
|
Page 10 of 13
|
Three Months Ended
|
||||||||
(Unaudited)
|
December 31,
|
|||||||
(Thousands)
|
2021
|
2020
|
||||||
ENERGY SERVICES
|
||||||||
The following table is a computation of financial margin:
|
||||||||
Operating revenues
|
$
|
369,244
|
$
|
229,477
|
||||
Less: Gas purchases
|
278,687
|
173,837
|
||||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
(85,647
|
)
|
(38,781
|
)
|
||||
Effects of economic hedging related to natural gas inventory
|
23,577
|
(7,532
|
)
|
|||||
Financial margin
|
$
|
28,487
|
$
|
9,327
|
||||
A reconciliation of operating income, the closest GAAP financial measurement, to financial margin is as follows:
|
||||||||
Operating income
|
$
|
86,778
|
$
|
51,582
|
||||
Add:
|
||||||||
Operation and maintenance expense
|
3,751
|
4,016
|
||||||
Depreciation and amortization
|
28
|
42
|
||||||
Subtotal
|
90,557
|
55,640
|
||||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
(85,647
|
)
|
(38,781
|
)
|
||||
Effects of economic hedging related to natural gas inventory
|
23,577
|
(7,532
|
)
|
|||||
Financial margin
|
$
|
28,487
|
$
|
9,327
|
||||
A reconciliation of net income to net financial earnings is as follows:
|
||||||||
Net income
|
$
|
65,744
|
$
|
38,872
|
||||
Add:
|
||||||||
Unrealized (gain) on derivative instruments and related transactions
|
(85,647
|
)
|
(38,781
|
)
|
||||
Tax effect
|
20,357
|
9,219
|
||||||
Effects of economic hedging related to natural gas
|
23,577
|
(7,532
|
)
|
|||||
Tax effect
|
(5,603
|
)
|
1,790
|
|||||
Net income to NFE tax adjustment
|
(861
|
)
|
(2,068
|
)
|
||||
Net financial earnings
|
$
|
17,567
|
$
|
1,500
|
||||
NJR Reports First Quarter Fiscal 2022 Results
|
Page 11 of 13
|
Three Months Ended
|
||||||||
December 31,
|
||||||||
(Thousands, except per share data)
|
2021
|
2020
|
||||||
NEW JERSEY RESOURCES
|
||||||||
Operating Revenues
|
||||||||
Natural Gas Distribution
|
$
|
274,772
|
$
|
195,729
|
||||
Clean Energy Ventures
|
10,183
|
6,370
|
||||||
Energy Services
|
369,244
|
229,477
|
||||||
Storage and Transportation
|
12,143
|
13,104
|
||||||
Home Services and Other
|
13,951
|
12,577
|
||||||
Sub-total
|
680,293
|
457,257
|
||||||
Eliminations
|
(4,451
|
)
|
(2,952
|
)
|
||||
Total
|
$
|
675,842
|
$
|
454,305
|
||||
Operating Income (Loss)
|
||||||||
Natural Gas Distribution
|
$
|
74,183
|
$
|
62,912
|
||||
Clean Energy Ventures
|
(3,972
|
)
|
(8,264
|
)
|
||||
Energy Services
|
86,778
|
51,582
|
||||||
Storage and Transportation
|
1,876
|
3,689
|
||||||
Home Services and Other
|
862
|
1,996
|
||||||
Sub-total
|
159,727
|
111,915
|
||||||
Eliminations
|
(2,842
|
)
|
(435
|
)
|
||||
Total
|
$
|
156,885
|
$
|
111,480
|
||||
Equity in Earnings of Affiliates
|
||||||||
Storage and Transportation
|
$
|
1,056
|
$
|
3,193
|
||||
Eliminations
|
(481
|
)
|
(518
|
)
|
||||
Total
|
$
|
575
|
$
|
2,675
|
||||
Net Income (Loss)
|
||||||||
Natural Gas Distribution
|
$
|
51,080
|
$
|
49,467
|
||||
Clean Energy Ventures
|
(6,821
|
)
|
(10,274
|
)
|
||||
Energy Services
|
65,744
|
38,872
|
||||||
Storage and Transportation
|
2,962
|
3,508
|
||||||
Home Services and Other
|
447
|
(62
|
)
|
|||||
Sub-total
|
113,412
|
81,511
|
||||||
Eliminations
|
(2,100
|
)
|
(466
|
)
|
||||
Total
|
$
|
111,312
|
$
|
81,045
|
||||
Net Financial Earnings (Loss)
|
||||||||
Natural Gas Distribution
|
$
|
51,080
|
$
|
49,467
|
||||
Clean Energy Ventures
|
(6,821
|
)
|
(10,274
|
)
|
||||
Energy Services
|
17,567
|
1,500
|
||||||
Storage and Transportation
|
2,962
|
3,508
|
||||||
Home Services and Other
|
447
|
(62
|
)
|
|||||
Sub-total
|
65,235
|
44,139
|
||||||
Eliminations
|
535
|
518
|
||||||
Total
|
$
|
65,770
|
$
|
44,657
|
||||
Throughput (Bcf)
|
||||||||
NJNG, Core Customers
|
24.6
|
24.4
|
||||||
NJNG, Off System/Capacity Management
|
25.1
|
25.9
|
||||||
Energy Services Fuel Mgmt. and Wholesale Sales
|
63.5
|
104.8
|
||||||
Total
|
113.2
|
155.1
|
||||||
Common Stock Data
|
||||||||
Yield at December 31
|
3.5
|
%
|
3.7
|
%
|
||||
Market Price at December 31
|
$
|
41.06
|
$
|
35.55
|
||||
Shares Out. at December 31
|
95,962
|
96,139
|
||||||
Market Cap. at December 31
|
$
|
3,940,188
|
$
|
3,417,741
|
||||
NJR Reports First Quarter Fiscal 2022 Results
|
Page 12 of 13
|
Three Months Ended
|
||||||||
(Unaudited)
|
December 31,
|
|||||||
(Thousands, except customer and weather data)
|
2021
|
2020
|
||||||
NATURAL GAS DISTRIBUTION
|
||||||||
Utility Gross Margin
|
||||||||
Operating revenues
|
$
|
274,772
|
$
|
195,729
|
||||
Less:
|
||||||||
Gas purchases
|
124,594
|
59,309
|
||||||
Regulatory rider expense
|
16,671
|
10,701
|
||||||
Total Utility Gross Margin
|
$
|
133,507
|
$
|
125,719
|
||||
Utility Gross Margin, Operating Income and Net Income
|
||||||||
Residential
|
$
|
92,605
|
$
|
85,975
|
||||
Commercial, Industrial & Other
|
19,102
|
17,040
|
||||||
Firm Transportation
|
17,282
|
17,288
|
||||||
Total Firm Margin
|
128,989
|
120,303
|
||||||
Interruptible
|
754
|
838
|
||||||
Total System Margin
|
129,743
|
121,141
|
||||||
Off System/Capacity Management/FRM/Storage Incentive
|
3,764
|
4,578
|
||||||
Total Utility Gross Margin
|
133,507
|
125,719
|
||||||
Operation and maintenance expense
|
36,431
|
43,638
|
||||||
Depreciation and amortization
|
22,893
|
19,169
|
||||||
Operating Income
|
$
|
74,183
|
$
|
62,912
|
||||
Net Income
|
$
|
51,080
|
$
|
49,467
|
||||
Net Financial Earnings
|
$
|
51,080
|
$
|
49,467
|
||||
Throughput (Bcf)
|
||||||||
Residential
|
12.6
|
13.6
|
||||||
Commercial, Industrial & Other
|
2.3
|
2.4
|
||||||
Firm Transportation
|
3.6
|
3.9
|
||||||
Total Firm Throughput
|
18.5
|
19.9
|
||||||
Interruptible
|
6.1
|
4.5
|
||||||
Total System Throughput
|
24.6
|
24.4
|
||||||
Off System/Capacity Management
|
25.1
|
25.9
|
||||||
Total Throughput
|
49.7
|
50.3
|
||||||
Customers
|
||||||||
Residential
|
506,677
|
497,203
|
||||||
Commercial, Industrial & Other
|
31,756
|
30,912
|
||||||
Firm Transportation
|
28,073
|
31,398
|
||||||
Total Firm Customers
|
566,506
|
559,513
|
||||||
Interruptible
|
31
|
88
|
||||||
Total System Customers
|
566,537
|
559,601
|
||||||
Off System/Capacity Management*
|
24
|
30
|
||||||
Total Customers
|
566,561
|
559,631
|
||||||
*The number of customers represents those active during the last month of the period.
|
||||||||
Degree Days
|
||||||||
Actual
|
1,274
|
1,418
|
||||||
Normal
|
1,550
|
1,575
|
||||||
Percent of Normal
|
82.2
|
%
|
90.0
|
%
|
||||
NJR Reports First Quarter Fiscal 2022 Results
|
Page 13 of 13
|
Three Months Ended
|
||||||||
(Unaudited)
|
December 31,
|
|||||||
(Thousands, except customer, SREC, TREC and megawatt)
|
2021
|
2020
|
||||||
CLEAN ENERGY VENTURES
|
||||||||
Operating Revenues
|
||||||||
SREC sales
|
$
|
2,867
|
$
|
1,292
|
||||
TREC sales
|
846
|
690
|
||||||
Solar electricity sales and other
|
3,654
|
1,720
|
||||||
Sunlight Advantage
|
2,816
|
2,668
|
||||||
Total Operating Revenues
|
$
|
10,183
|
$
|
6,370
|
||||
Depreciation and Amortization
|
$
|
5,233
|
$
|
5,433
|
||||
Operating (Loss)
|
$
|
(3,972
|
)
|
$
|
(8,264
|
)
|
||
Income Tax (Benefit)
|
$
|
(2,046
|
)
|
$
|
(3,086
|
)
|
||
Net (Loss)
|
$
|
(6,821
|
)
|
$
|
(10,274
|
)
|
||
Net Financial (Loss)
|
$
|
(6,821
|
)
|
$
|
(10,274
|
)
|
||
Solar Renewable Energy Certificates Generated
|
92,172
|
87,208
|
||||||
Solar Renewable Energy Certificates Sold
|
12,200
|
6,095 |
||||||
Transition Renewable Energy Certificates Generated
|
6,085
|
4,683.0
|
||||||
Solar Megawatts Under Construction
|
77.1
|
8.3
|
||||||
ENERGY SERVICES
|
||||||||
Operating Income
|
||||||||
Operating revenues
|
$
|
369,244
|
$
|
229,477
|
||||
Less:
|
||||||||
Gas purchases
|
278,687
|
173,837
|
||||||
Operation and maintenance expense
|
3,751
|
4,016
|
||||||
Depreciation and amortization
|
28
|
42
|
||||||
Operating Income
|
$
|
86,778
|
$
|
51,582
|
||||
Net Income
|
$
|
65,744
|
$
|
38,872
|
||||
Financial Margin
|
$
|
28,487
|
$
|
9,327
|
||||
Net Financial Earnings
|
$
|
17,567
|
$
|
1,500
|
||||
Gas Sold and Managed (Bcf)
|
63.5
|
104.8
|
||||||
STORAGE AND TRANSPORTATION
|
||||||||
Operating Revenues
|
$
|
12,143
|
$
|
13,104
|
||||
Equity in Earnings of Affiliates
|
$
|
1,056
|
$
|
3,193
|
||||
Operation and Maintenance Expense
|
$
|
7,430
|
$
|
6,542
|
||||
Other Income, Net
|
$
|
2,509
|
$
|
1,254
|
||||
Interest Expense
|
$
|
2,136
|
$
|
3,982
|
||||
Income Tax Provision
|
$
|
343
|
$
|
646
|
||||
Net Income
|
$
|
2,962
|
$
|
3,508
|
||||
Net Financial Earnings
|
$
|
2,962
|
$
|
3,508
|
||||
HOME SERVICES AND OTHER
|
||||||||
Operating Revenues
|
$
|
13,951
|
$
|
12,577
|
||||
Operating Income
|
$
|
862
|
$
|
1,996
|
||||
Other Expense, Net
|
$
|
75
|
$
|
(824
|
)
|
|||
Net Income (Loss)
|
$
|
447
|
$
|
(62
|
)
|
|||
Net Financial Earnings (Loss)
|
$
|
447
|
$
|
(62
|
)
|
|||
Total Service Contract Customers at December 31
|
105,373
|
106,857
|
||||||