New Jersey Resources Reports Fiscal 2024 Second-Quarter Results

Rhea-AI Summary

New Jersey Resources (NYSE: NJR) reported strong second-quarter results for fiscal 2024, with consolidated net income reaching $120.8 million and net financial earnings of $138.6 million. The company re-affirmed its fiscal 2024 net financial earnings per share guidance range of $2.85 to $3.00. NJNG filed a rate case seeking a $222.6 million increase in delivery rates. Despite lower year-to-date earnings compared to the previous fiscal year, NJR's performance reflects its commitment to shareholder value and organic growth initiatives.

Positive

• Consolidated net income of $120.8 million and net financial earnings of $138.6 million for the second quarter of fiscal 2024.

• Fiscal 2024 net financial earnings per share guidance range re-affirmed at $2.85 to $3.00, reflecting strong performance from Energy Services.

• Long-term projected NFEPS growth rate of 7 to 9 percent maintained by NJR.

Negative

• Fiscal 2024 year-to-date net income and NFE lower compared to the same period in fiscal 2023.

• Rate case filed by NJNG with the New Jersey Board of Public Utilities seeking a $222.6 million increase in delivery rates.

Insights

Financial Analyst

The increase in Consolidated Net Income from $110.2 million to $120.8 million represents a nearly 10% year-over-year growth, which is a robust indicator of New Jersey Resources' financial health. This performance is further underscored by the rise in Net Financial Earnings (NFE) from $112.3 million to $138.6 million, translating to an increase in earnings per share from $1.16 to $1.41. Noteworthy is the company's ability to capitalize on natural gas price volatility, which has contributed to the upward revision of the NFEPS guidance range. The reaffirmation of the NFEPS guidance at $2.85 to $3.00, previously increased by $0.15, signals management's confidence in the company's continued performance, which could be reassuring for investors. The projection of a long-term NFEPS growth rate of 7 to 9 percent is ambitious and aligns with the company's historical growth trajectory. However, investors should consider the inherent volatility in the energy sector, particularly regarding commodity price fluctuations and regulatory changes, which could impact future earnings.

Energy Market Analyst

The filed rate case with the New Jersey Board of Public Utilities seeking a $222.6 million increase in delivery rates suggests a strategic move to align NJNG's revenues with its investment in infrastructure. If approved, this could lead to enhanced profitability and financial stability. However, rate cases can be lengthy and contentious, with outcomes uncertain. Investors should note that successful rate adjustments could result in more predictable, regulated income streams for the gas segment, which may be viewed as a positive development. The performance of the Energy Services segment, particularly the adept management of natural gas price volatility, demonstrates the company's hedging strategy and market agility. As the energy sector faces transition towards renewable sources, NJR's results, especially in relation to its Clean Energy Ventures, offer a glimpse into how the company is positioning itself for the future energy mix, which should be a critical consideration for long-term investors.

Investment Risk Analyst

When assessing the risk profile for New Jersey Resources, the diversification of its business units—from natural gas to clean energy ventures—provides a hedge against market-specific downturns. The negative NFE reported for Clean Energy Ventures, for instance, may raise concerns about performance in that sector; however, the overall positive results mitigate such concerns. Investors should also be mindful of regulatory risks, both in ongoing rate cases and future environmental legislation, which could pose significant challenges or opportunities, depending on the outcomes. The ability to navigate natural gas price volatility, as demonstrated, reduces risks associated with commodity-based segments. Furthermore, the reaffirmed guidance post-adjustment may indicate internal confidence in managing these risks, which could translate into a more stable investment proposition.

WALL, N.J.--(BUSINESS WIRE)-- Today, New Jersey Resources Corporation (NYSE: NJR) reported results for the second quarter of fiscal 2024. Highlights include:

• Consolidated net income of $120.8 million, compared with $110.2 million in the second quarter of fiscal 2023
• Consolidated net financial earnings (NFE), a non-GAAP financial measure, of $138.6 million, or $1.41 per share, compared to $112.3 million, or $1.16 per share, in the second quarter of fiscal 2023
• Re-affirmed fiscal 2024 net financial earnings per share (NFEPS) guidance range of $2.85 to $3.00, which was increased by $0.15 in February 2024 as a result of strong performance from Energy Services
• Maintained long-term projected NFEPS growth rate of 7 to 9 percent⁽¹⁾
• On January 31, 2024, New Jersey Natural Gas (NJNG) filed a rate case with the New Jersey Board of Public Utilities (BPU), seeking a $222.6 million increase in delivery rates

Second-quarter fiscal 2024 net income totaled $120.8 million, or $1.23 per share, compared with $110.2 million, or $1.14 per share, for the same period in fiscal 2023. Fiscal 2024 year-to-date net income totaled $210.2 million, or $2.14 per share, compared with $226.2 million, or $2.34 per share, for the same period in fiscal 2023.

Second-quarter fiscal 2024 NFE totaled $138.6 million, or $1.41 per share, compared with $112.3 million, or $1.16 per share, for the same period in fiscal 2023. Fiscal 2024 year-to-date NFE totaled $211.0 million, or $2.15 per share, compared with $222.6 million, or $2.30 per share, for the same period in fiscal 2023.

Management Commentary
Steve Westhoven, President and CEO of New Jersey Resources, stated, "In February, we raised our fiscal 2024 NFEPS guidance range by $0.15 as a result of Energy Services capitalizing on natural gas price volatility at the beginning of our second quarter, and we continued to make solid progress on our organic growth initiatives. These accomplishments reflect the strength of our diversified business model as well as our commitment to delivering value for our shareholders."

Key Performance Metrics

	Three Months Ended						Six Months Ended
	March 31,						March 31,
($ in Thousands)	2024			2023			2024			2023
Net income	$	120,812		$	110,247		$	210,223		$	226,168
Basic EPS	$	1.23		$	1.14		$	2.14		$	2.34
Net financial earnings	$	138,576		$	112,310		$	211,020		$	222,594
Basic net financial earnings per share	$	1.41		$	1.16		$	2.15		$	2.30
(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 six months ended March 31, 2024 and 2023, is provided below.

	Three Months Ended								Six Months Ended
	March 31,								March 31,
(Thousands)	2024				2023				2024				2023
Net income	$	120,812			$	110,247			$	210,223			$	226,168
Add:
Unrealized loss (gain) on derivative instruments and related transactions		25,457				13,971				20,057				(17,532	)
Tax effect		(6,049	)			(3,320	)			(4,767	)			4,167
Effects of economic hedging related to natural gas inventory		(2,845	)			(11,203	)			(19,073	)			12,769
Tax effect		676				2,662				4,533				(3,035	)
Gain on equity method investment		—				(200	)			—				(200	)
Tax effect		—				50				—				50
NFE tax adjustment		525				103				47				207
Net financial earnings	$	138,576			$	112,310			$	211,020			$	222,594
Weighted Average Shares Outstanding
Basic		98,377				96,893				98,123				96,689
Diluted		99,102				97,556				98,839				97,346
Basic earnings per share	$	1.23			$	1.14			$	2.14			$	2.34
Add:
Unrealized loss (gain) on derivative instruments and related transactions		0.25				0.14				0.20				(0.18	)
Tax effect		(0.06	)			(0.03	)			(0.05	)			0.04
Effects of economic hedging related to natural gas inventory		(0.03	)			(0.12	)			(0.19	)			0.13
Tax effect		0.01				0.03				0.05				(0.03	)
NFE tax adjustment		0.01				—				—				—
Basic net financial earnings per share	$	1.41			$	1.16			$	2.15			$	2.30

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 six months ended March 31, 2024 and 2023, is provided below.

Net financial earnings (loss) by business unit

	Three Months Ended								Six Months Ended
	March 31,								March 31,
(Thousands)	2024				2023				2024				2023
New Jersey Natural Gas	$	107,095			$	100,697			$	158,539			$	155,361
Clean Energy Ventures		(5,616	)			(9,379	)			4,906				(12,961	)
Storage and Transportation		1,981				2,450				5,621				8,693
Energy Services		37,644				21,125				45,475				73,658
Home Services and Other		384				813				(216	)			784
Subtotal		141,488				115,706				214,325				225,535
Eliminations		(2,912	)			(3,396	)			(3,305	)			(2,941	)
Total	$	138,576			$	112,310			$	211,020			$	222,594

Fiscal 2024 NFE Guidance:

NJR re-affirmed its fiscal 2024 NFEPS guidance range of $2.85 to $3.00, which was increased by $0.15 in February 2024, subject to the risks and uncertainties identified below under "Forward-Looking Statements."

In fiscal 2024, NJR expects Energy Services will represent a higher percentage of NFEPS than in prior years due to contributions from the Asset Management Agreements signed in 2020*. The following chart represents NJR’s current expected contributions from its business segments for fiscal 2024:

Company	Expected Fiscal 2024 Net Financial Earnings Contribution
New Jersey Natural Gas	40 to 45 percent
Clean Energy Ventures	12 to 17 percent
Storage and Transportation	3 to 7 percent
Energy Services	38 to 43 percent*
Home Services and Other	0 to 1 percent
* NJR expects to recognize the majority of the fiscal 2024 AMA revenues in the fiscal fourth quarter

In providing fiscal 2024 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)

NJNG reported second-quarter fiscal 2024 NFE of $107.1 million, compared to NFE of $100.7 million during the same period in fiscal 2023. Fiscal 2024 year-to-date NFE were $158.5 million, compared to NFE of $155.4 million during the same period in fiscal 2023. NJNG reported higher utility gross margin for the second quarter of fiscal 2024, driven by higher contribution from BGSS incentive programs, partially offset by increased depreciation and operating expenses, while year-to-date utility gross margin improved as a result of continued customer growth.

Customer Growth:

• NJNG added 4,058 new customers during the first six months of fiscal 2024, compared with 4,064 during the same period of fiscal 2023. NJNG expects these new customers to contribute approximately $3.4 million of incremental utility gross margin on an annualized basis.

Base Rate Filing:

• On January 31, 2024, NJNG filed a base rate case with the BPU, seeking a $222.6 million increase to its base rates. The filing is based on an overall return of 7.57 percent with a return on equity of 10.42 percent. The proposed increase reflects a 55.42 percent common equity component.

Infrastructure Update:

• 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 six months of fiscal 2024, NJNG spent $13.7 million under the program on various distribution system reinforcement projects.
  
  On March 28, 2024, NJNG submitted its annual IIP filing to the BPU requesting a rate increase for capital expenditures of $43.5 million through June 30, 2024, which will result in a $5.6 million revenue increase, with a proposed effective date of October 1, 2024.

Basic Gas Supply Service (BGSS) Incentive Programs:

BGSS incentive programs contributed $7.9 million to utility gross margin in the second quarter of fiscal 2024, compared with $5.8 million during the same period of fiscal 2023. This increase for the second quarter was due primarily to higher margins from off-system sales. During the first six months of fiscal 2024, these programs contributed $13.3 million to utility gross margin, compared with $14.5 million during the same period in fiscal 2023.

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

Energy-Efficiency Programs:

SAVEGREEN™ invested $33.4 million year-to-date in fiscal 2024 in energy-efficiency upgrades for customers' homes and businesses. NJNG recovered $15.1 million of its outstanding investments during the first six months of fiscal 2024 through its energy efficiency rate.

Clean Energy Ventures (CEV)

CEV reported second-quarter fiscal 2024 net financial loss of $(5.6) million, compared with a net financial loss of $(9.4) million during the same period in fiscal 2023. The decrease in net financial loss for the second quarter of fiscal 2024 was largely due to the recognition of Investment Tax Credits associated with solar sale leaseback financing transactions. Fiscal 2024 year-to-date NFE was $4.9 million, compared with a net financial loss of $(13.0) million during the same period in fiscal 2023. The increase in fiscal 2024 year-to-date NFE was due primarily to higher SREC and TREC revenue for the period.

Solar Investment Update:

• As of March 31, 2024, CEV had approximately 474MW of solar capacity in service in New Jersey, New York, Connecticut, Rhode Island, Indiana, and Michigan.

Storage and Transportation

Storage and Transportation reported second-quarter fiscal 2024 NFE of $2.0 million, compared with NFE of $2.4 million during the same period in fiscal 2023. Fiscal 2024 year-to-date NFE were $5.6 million, compared with NFE of $8.7 million during the same period in fiscal 2023. NFE for the second quarter of fiscal 2024 remained largely flat when compared to the prior year, while the year-to-date decrease in NFE was largely due to higher operating revenues in the prior year period.

Energy Services

Energy Services reported second-quarter fiscal 2024 NFE of $37.6 million compared with NFE of $21.1 million for the same period in fiscal 2023. The increase in the second quarter of fiscal 2024 was due to higher natural gas price volatility in January, allowing Energy Services to capture additional financial margin. Fiscal 2024 year-to-date NFE were $45.5 million, compared with NFE of $73.7 million during the same period in fiscal 2023. The decrease in fiscal 2024 year-to-date NFE was due primarily to higher natural gas price volatility in the prior year period, largely as a result of Winter Storm Elliott.

Home Services and Other Operations

Home Services and Other Operations reported second-quarter fiscal 2024 NFE of $0.4 million, compared to NFE of $0.8 million for the same period in fiscal 2023. Fiscal 2024 year-to-date net financial loss was $(0.2) million, compared with NFE of $0.8 million during the same period in fiscal 2023.

Capital Expenditures and Cash Flows:

NJR is committed to maintaining a strong financial profile:

• During the first six months of fiscal 2024, capital expenditures were $232.6 million, including accruals, compared with $253.7 million during the same period of fiscal 2023. The decrease in capital expenditures was primarily due to lower solar capital expenditures during the period as a result of the timing of several projects being placed into service in the prior year.

• During the first six months of fiscal 2024, cash flows from operations were $338.6 million, which was largely consistent with cash flows from operations of $343.1 million during the same period of fiscal 2023.

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 2024, projected NFEPS growth rates and our guidance range, NFEPS Contributions, forecasted contribution of business segments to NJR’s NFE for fiscal 2024, customer growth at NJNG and their expected contributions, expected contributions from Asset Management Agreements, infrastructure programs and investments, future decarbonization opportunities including IIP, Energy Efficiency programs, including BGSS, the outcome or timing of our Base Rate Case with the BPU, 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.

NFE and financial margin exclude unrealized gains or losses on derivative instruments related to NJR’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. Financial margin also differs from gross margin as defined on a GAAP basis as it excludes certain operations and maintenance expense and depreciation and amortization as well as the effects of derivatives as discussed above. 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 NJR Energy Services Company.

NJNG’s utility gross margin is defined as operating revenues less natural gas purchases, sales tax, and regulatory rider expense. This measure differs from gross margin as presented on a GAAP basis as it excludes certain operations and maintenance expense and depreciation and amortization. Utility gross margin may also not be comparable to the definition of gross margin used by others in the natural gas distribution business and other industries. Management believes that utility gross margin provides a meaningful basis for evaluating utility operations since natural gas costs, sales tax and regulatory rider expenses are included in operating revenues and 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 most recent Report on 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:

• New Jersey Natural Gas, NJR’s principal subsidiary, operates and maintains natural gas transportation and distribution infrastructure to serve approximately 582,000 customers in New Jersey’s Monmouth, Ocean, Morris, Middlesex, Sussex and Burlington counties.

• Clean Energy Ventures invests in, owns and operates solar projects with a total capacity of approximately 474 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.

NJR and its over 1,300 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 X.com (Twitter) @NJNaturalGas.
“Like” us on facebook.com/NewJerseyNaturalGas.

NEW JERSEY RESOURCES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		Three Months Ended						Six Months Ended
		March 31,						March 31,
(Thousands, except per share data)		2024			2023			2024			2023
OPERATING REVENUES
Utility		$	462,863		$	400,500		$	755,956		$	757,909
Nonutility			195,050			243,527			369,167			609,685
Total operating revenues			657,913			644,027			1,125,123			1,367,594
OPERATING EXPENSES
Gas purchases
Utility			204,347			156,370			320,467			338,816
Nonutility			105,018			160,364			164,495			392,434
Related parties			1,799			1,770			3,678			3,597
Operation and maintenance			107,223			99,095			201,662			178,596
Regulatory rider expenses			29,229			23,154			48,418			41,405
Depreciation and amortization			40,075			38,090			80,362			74,773
Total operating expenses			487,691			478,843			819,082			1,029,621
OPERATING INCOME			170,222			165,184			306,041			337,973
Other income, net			15,420			4,779			21,761			9,434
Interest expense, net of capitalized interest			31,621			30,261			63,094			59,752
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES			154,021			139,702			264,708			287,655
Income tax provision			33,947			30,586			56,883			63,564
Equity in earnings of affiliates			738			1,131			2,398			2,077
NET INCOME		$	120,812		$	110,247		$	210,223		$	226,168
EARNINGS PER COMMON SHARE
Basic		$	1.23		$	1.14		$	2.14		$	2.34
Diluted		$	1.22		$	1.13		$	2.13		$	2.32
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic			98,377			96,893			98,123			96,689
Diluted			99,102			97,556			98,839			97,346

RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES
(Unaudited)
		Three Months Ended								Six Months Ended
		March 31,								March 31,
(Thousands)		2024				2023				2024				2023
NEW JERSEY RESOURCES
A reconciliation of net income, the closest GAAP financial measure, to net financial earnings is as follows:
Net income		$	120,812			$	110,247			$	210,223			$	226,168
Add:
Unrealized (gain) loss on derivative instruments and related transactions			25,457				13,971				20,057				(17,532	)
Tax effect			(6,049	)			(3,320	)			(4,767	)			4,167
Effects of economic hedging related to natural gas inventory			(2,845	)			(11,203	)			(19,073	)			12,769
Tax effect			676				2,662				4,533				(3,035	)
Gain on equity method investment			—				(200	)			—				(200	)
Tax effect			—				50				—				50
NFE tax adjustment			525				103				47				207
Net financial earnings		$	138,576			$	112,310			$	211,020			$	222,594
Weighted Average Shares Outstanding
Basic			98,377				96,893				98,123				96,689
Diluted			99,102				97,556				98,839				97,346
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		$	1.23			$	1.14			$	2.14			$	2.34
Add:
Unrealized (gain) loss on derivative instruments and related transactions		$	0.25			$	0.14			$	0.20			$	(0.18	)
Tax effect		$	(0.06	)		$	(0.03	)		$	(0.05	)		$	0.04
Effects of economic hedging related to natural gas inventory		$	(0.03	)		$	(0.12	)		$	(0.19	)		$	0.13
Tax effect		$	0.01			$	0.03			$	0.05			$	(0.03	)
NFE tax adjustment		$	0.01			$	—			$	—			$	—
Basic net financial earnings per share		$	1.41			$	1.16			$	2.15			$	2.30
NATURAL GAS DISTRIBUTION
A reconciliation of gross margin, the closest GAAP financial measure, to utility gross margin is as follows:
Operating revenues		$	463,201			$	400,838			$	756,631			$	758,584
Less:
Natural gas purchases			206,675				158,694				325,119				343,465
Operating and maintenance (1)			29,558				30,711				55,341				57,005
Regulatory rider expense			29,229				23,154				48,418				41,405
Depreciation and amortization			27,464				25,319				54,381				50,209
Gross margin			170,275				162,960				273,372				266,500
Add:
Operating and maintenance (1)			29,558				30,711				55,341				57,005
Depreciation and amortization			27,464				25,319				54,381				50,209
Utility gross margin		$	227,297			$	218,990			$	383,094			$	373,714
(1) Excludes selling, general and administrative expenses of $30.0 million and $27.8 million for the three months ended March 31, 2024 and 2023, respectively, and $58.9 million and $51.2 million for the six months ended March 31, 2024 and 2023, respectively.
RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES (continued)
(Unaudited)
		Three Months Ended								Six Months Ended
		March 31,								March 31,
(Thousands)		2024				2023				2024				2023
ENERGY SERVICES
A reconciliation of gross margin, the closest GAAP financial measure, to Energy Services' financial margin is as follows:
Operating revenues		$	144,862			$	196,730			$	244,530			$	518,512
Less:
Natural Gas purchases			105,634				161,114				165,800				394,401
Operation and maintenance (1)			13,102				7,668				17,791				11,123
Depreciation and amortization			56				62				113				119
Gross margin			26,070				27,886				60,826				112,869
Add:
Operation and maintenance (1)			13,102				7,668				17,791				11,123
Depreciation and amortization			56				62				113				119
Unrealized (gain) loss on derivative instruments and related transactions			29,198				13,795				24,932				(26,091	)
Effects of economic hedging related to natural gas inventory			(2,845	)			(11,203	)			(19,073	)			12,769
Financial margin		$	65,581			$	38,208			$	84,589			$	110,789
(1) Excludes selling, general and administrative expenses of $0.5 million and $0.7 million for the three months ended March 31, 2024 and 2023, respectively, and $1.0 million and $(1.7) million for the six months ended March 31, 2024 and 2023, respectively.
A reconciliation of net income, the closest GAAP financial measure, to net financial earnings is as follows:
Net income		$	17,028			$	19,046			$	40,961			$	83,607
Add:
Unrealized (gain) loss on derivative instruments and related transactions			29,198				13,795				24,932				(26,091	)
Tax effect			(6,938	)			(3,278	)			(5,925	)			6,201
Effects of economic hedging related to natural gas			(2,845	)			(11,203	)			(19,073	)			12,769
Tax effect			676				2,662				4,533				(3,035	)
NFE tax adjustment			525				103				47				207
Net financial earnings		$	37,644			$	21,125			$	45,475			$	73,658

FINANCIAL STATISTICS BY BUSINESS UNIT
(Unaudited)
		Three Months Ended								Six Months Ended
		March 31,								March 31,
(Thousands, except per share data)		2024				2023				2024				2023
NEW JERSEY RESOURCES
Operating Revenues
Natural Gas Distribution		$	463,201			$	400,838			$	756,631			$	758,584
Clean Energy Ventures			9,325				14,406				44,620				27,198
Energy Services			144,862				196,730				244,530				518,512
Storage and Transportation			23,042				20,887				46,904				47,725
Home Services and Other			14,905				13,448				29,739				27,714
Sub-total			655,335				646,309				1,122,424				1,379,733
Eliminations			2,578				(2,282	)			2,699				(12,139	)
Total		$	657,913			$	644,027			$	1,125,123			$	1,367,594
Operating Income (Loss)
Natural Gas Distribution		$	140,279			$	135,196			$	214,454			$	215,309
Clean Energy Ventures			(7,679	)			(5,002	)			10,644				(5,323	)
Energy Services			25,533				27,232				59,870				114,547
Storage and Transportation			5,910				6,700				13,234				19,317
Home Services and Other			778				1,137				570				1,188
Sub-total			164,821				165,263				298,772				345,038
Eliminations			5,401				(79	)			7,269				(7,065	)
Total		$	170,222			$	165,184			$	306,041			$	337,973
Equity in Earnings of Affiliates
Storage and Transportation		$	85			$	977			$	1,078			$	1,886
Eliminations			653				154				1,320				191
Total		$	738			$	1,131			$	2,398			$	2,077
Net Income (Loss)
Natural Gas Distribution		$	107,095			$	100,697			$	158,539			$	155,361
Clean Energy Ventures			(5,616	)			(9,379	)			4,906				(12,961	)
Energy Services			17,028				19,046				40,961				83,607
Storage and Transportation			1,981				2,600				5,621				8,843
Home Services and Other			384				813				(216	)			784
Sub-total			120,872				113,777				209,811				235,634
Eliminations			(60	)			(3,530	)			412				(9,466	)
Total		$	120,812			$	110,247			$	210,223			$	226,168
Net Financial Earnings (Loss)
Natural Gas Distribution		$	107,095			$	100,697			$	158,539			$	155,361
Clean Energy Ventures			(5,616	)			(9,379	)			4,906				(12,961	)
Energy Services			37,644				21,125				45,475				73,658
Storage and Transportation			1,981				2,450				5,621				8,693
Home Services and Other			384				813				(216	)			784
Sub-total			141,488				115,706				214,325				225,535
Eliminations			(2,912	)			(3,396	)			(3,305	)			(2,941	)
Total		$	138,576			$	112,310			$	211,020			$	222,594
Throughput (Bcf)
NJNG, Core Customers			32.9				30.8				56.3				55.8
NJNG, Off System/Capacity Management			37.1				20.7				64.3				38.6
Energy Services Fuel Mgmt. and Wholesale Sales			38.3				40.8				68.4				85.0
Total			108.3				92.3				189.0				179.4
Common Stock Data
Yield at March 31,			3.9	%			2.9	%			3.9	%			2.9	%
Market Price at March 31,		$	42.91			$	53.20			$	42.91			$	53.20
Shares Out. at March 31,			98,745				96,901				98,745				96,901
Market Cap. at March 31,		$	4,237,144			$	5,155,153			$	4,237,144			$	5,155,153

		Three Months Ended								Six Months Ended
(Unaudited)		March 31,								March 31,
(Thousands, except customer and weather data)		2024				2023				2024				2023
NATURAL GAS DISTRIBUTION
Utility Gross Margin
Operating revenues		$	463,201			$	400,838			$	756,631			$	758,584
Less:
Natural gas purchases			206,675				158,694				325,119				343,465
Operating and maintenance (1)			29,558				30,711				55,341				57,005
Regulatory rider expense			29,229				23,154				48,418				41,405
Depreciation and amortization			27,464				25,319				54,381				50,209
Gross margin			170,275				162,960				273,372				266,500
Add:
Operating and maintenance (1)			29,558				30,711				55,341				57,005
Depreciation and amortization			27,464				25,319				54,381				50,209
Total Utility Gross Margin		$	227,297			$	218,990			$	383,094			$	373,714
(1) Excludes selling, general and administrative expenses of $30.0 million and $27.8 million for the six months ended March 31, 2024 and 2023, respectively, and $58.9 million and $51.2 million for the six months ended March 31, 2024 and 2023, respectively.
Utility Gross Margin, Operating Income and Net Income
Residential		$	163,495			$	157,276			$	271,532			$	261,294
Commercial, Industrial & Other			28,676				30,066				49,507				50,845
Firm Transportation			26,490				25,208				47,254				45,688
Total Firm Margin			218,661				212,550				368,293				357,827
Interruptible			750				662				1,534				1,423
Total System Margin			219,411				213,212				369,827				359,250
Basic Gas Supply Service Incentive			7,886				5,778				13,267				14,464
Total Utility Gross Margin			227,297				218,990				383,094				373,714
Operation and maintenance expense			59,554				58,475				114,259				108,196
Depreciation and amortization			27,464				25,319				54,381				50,209
Operating Income		$	140,279			$	135,196			$	214,454			$	215,309
Net Income		$	107,095			$	100,697			$	158,539			$	155,361
Net Financial Earnings		$	107,095			$	100,697			$	158,539			$	155,361
Throughput (Bcf)
Residential			21.0				19.5				34.9				34.2
Commercial, Industrial & Other			3.9				3.8				6.5				6.5
Firm Transportation			4.7				4.5				8.3				8.5
Total Firm Throughput			29.6				27.8				49.7				49.2
Interruptible			3.3				3.0				6.6				6.6
Total System Throughput			32.9				30.8				56.3				55.8
Off System/Capacity Management			37.1				20.7				64.3				38.6
Total Throughput			70.0				51.5				120.6				94.4
Customers
Residential			525,391				516,453				525,391				516,453
Commercial, Industrial & Other			33,108				33,160				33,108				33,160
Firm Transportation			22,992				24,777				22,992				24,777
Total Firm Customers			581,491				574,390				581,491				574,390
Interruptible			83				87				83				87
Total System Customers			581,574				574,477				581,574				574,477
Off System/Capacity Management*			26				23				26				23
Total Customers			581,600				574,500				581,600				574,500
*The number of customers represents those active during the last month of the period.
Degree Days
Actual			2,135				1,937				3,543				3,480
Normal			2,436				2,457				3,970				4,004
Percent of Normal			87.6	%			78.8	%			89.2	%			86.9	%

		Three Months Ended								Six Months Ended
(Unaudited)		March 31,								March 31,
(Thousands, except customer, RECs and megawatt)		2024				2023				2024				2023
CLEAN ENERGY VENTURES
Operating Revenues
SREC sales		$	100			$	6,237			$	26,031			$	10,123
TREC sales			2,257				2,085				4,660				3,287
SREC II sales (1)			415				97				662				282
Solar electricity sales			3,696				3,067				7,350				7,649
Sunlight Advantage			2,857				2,920				5,917				5,857
Total Operating Revenues		$	9,325			$	14,406			$	44,620			$	27,198
Depreciation and Amortization		$	6,931			$	6,465			$	13,853			$	12,041
Operating (Loss) Income		$	(7,679	)		$	(5,002	)		$	10,644			$	(5,323	)
Income Tax (Benefit) Provision		$	(1,594	)		$	(3,005	)		$	1,537			$	(4,842	)
Net (Loss) Income		$	(5,616	)		$	(9,379	)		$	4,906			$	(12,961	)
Net Financial (Loss) Earnings		$	(5,616	)		$	(9,379	)		$	4,906			$	(12,961	)
Solar Renewable Energy Certificates Generated			57,635				63,313				151,205				161,775
Solar Renewable Energy Certificates Sold			714				30,745				123,153				47,557
Transition Renewable Energy Certificates Generated			15,847				12,524				32,552				20,869
Solar Renewable Energy Certificates II Generated			4,693				1,046				7,466				2,830
Solar Megawatts Under Construction			34.2				11.2				34.2				11.2
(1) Prior year SREC II revenue was previously included in Solar electricity sales and other
ENERGY SERVICES
Operating Income
Operating revenues		$	144,862			$	196,730			$	244,530			$	518,512
Less:
Gas purchases			105,634				161,114				165,800				394,401
Operation and maintenance expense			13,639				8,322				18,747				9,445
Depreciation and amortization			56				62				113				119
Operating Income		$	25,533			$	27,232			$	59,870			$	114,547
Net Income		$	17,028			$	19,046			$	40,961			$	83,607
Financial Margin		$	65,581			$	38,208			$	84,589			$	110,789
Net Financial Earnings		$	37,644			$	21,125			$	45,475			$	73,658
Gas Sold and Managed (Bcf)			38.3				40.8				68.4				85.0
STORAGE AND TRANSPORTATION
Operating Revenues		$	23,042			$	20,887			$	46,904			$	47,725
Equity in Earnings of Affiliates		$	85			$	977			$	1,078			$	1,886
Operation and Maintenance Expense		$	10,563			$	7,790			$	20,663			$	15,264
Other Income, Net		$	2,473			$	1,647			$	4,761			$	3,014
Interest Expense		$	5,868			$	6,128			$	11,801			$	12,835
Income Tax Provision		$	619			$	596			$	1,651			$	2,539
Net Income		$	1,981			$	2,600			$	5,621			$	8,843
Net Financial Earnings		$	1,981			$	2,450			$	5,621			$	8,693
HOME SERVICES AND OTHER
Operating Revenues		$	14,905			$	13,448			$	29,739			$	27,714
Operating Income		$	778			$	1,137			$	570			$	1,188
Net Income (Loss)		$	384			$	813			$	(216	)		$	784
Net Financial Earnings (Loss)		$	384			$	813			$	(216	)		$	784
Total Service Contract Customers at Mar 31			100,341				102,057				100,341				102,057

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240506741614/en/

Media Contact:

Mike Kinney

732-938-1031

mkinney@njresources.com

Investor Contact:

Adam Prior

732-938-1145

aprior@njresources.com

Source: New Jersey Resources Corporation

FAQ

What is New Jersey Resources 's stock symbol?

New Jersey Resources 's stock symbol is NYSE: NJR.

What was the consolidated net income for the second quarter of fiscal 2024?

The consolidated net income for the second quarter of fiscal 2024 was $120.8 million.

What is the fiscal 2024 net financial earnings per share guidance range?

The fiscal 2024 net financial earnings per share guidance range is $2.85 to $3.00.

What rate increase is NJNG seeking in the rate case with the New Jersey Board of Public Utilities?

NJNG is seeking a $222.6 million increase in delivery rates in the rate case with the New Jersey Board of Public Utilities.