UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 31, 2014

 

 

NEW JERSEY RESOURCES CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

New Jersey   001-8359   22-2376465

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

1415 Wyckoff Road

Wall, New Jersey

  07719
(Address of principal executive offices)   (Zip Code)

(732) 938-1480

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition

On July 31, 2014, the Registrant issued a press release reporting financial results for the third fiscal quarter ended June 30, 2014 (the “Press Release”). A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure

The Registrant will host a conference call and live internet webcast to discuss its financial results on July 31, 2014, at 10:00 a.m. ET. A copy of the presentation that will be used during the webcast is attached hereto as Exhibit 99.2 and incorporated by reference herein.

The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed to be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits

 

(a)    Financial statements of businesses acquired:      Not applicable.
(b)    Pro forma financial information:      Not applicable.
(c)    Exhibits:     

 

Exhibit

Number

  

Description

99.1    Press Release dated July 31, 2014
99.2    Presentation dated July 31, 2014


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

        NEW JERSEY RESOURCES CORPORATION

Date: July 31, 2014

     
   

By:

 

/s/ Glenn C. Lockwood

      Glenn C. Lockwood
      Executive Vice President and Chief Financial Officer


EXHIBIT INDEX

 

Exhibit

Number

  

Description

99.1    Press Release dated July 31, 2014
99.2    Presentation dated July 31, 2014

EX-99.1

Exhibit 99.1

 

LOGO

 

Date: July 31, 2014    Media Contact:
   Michael Kinney
   732-938-1031
   mkinney@njresources.com
   Investor Contacts:
   Joanne Fairechio
   732-378-4967
   jfairechio@njresources.com
   Dennis Puma
   732-938-1229
   dpuma@njresources.com

NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE

Strong Year-To-Date Results at NJR Energy Services Drives Growth

New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

WALL, NJ – New Jersey Resources (NYSE: NJR) today reported results for the third quarter of fiscal 2014 and reaffirmed increased net financial earnings (NFE) guidance for fiscal 2014.

A reconciliation of net income to NFE for the third quarter and first nine months of fiscal years 2014 and 2013 is provided below.

 

     Three Months Ended
June 30,
    Nine Months Ended
June 30,
 

(Thousands)

   2014     2013     2014     2013  

Net (loss) income

   $ (14,274 )    $ 29,155      $ 166,390      $ 134,830   

Add:

        

Consolidated unrealized (gain) loss on derivative instruments

     (6,585 )      (44,148 )      45,811        (23,682 ) 

Effects of economic hedging related to natural gas inventory

     38,139        13,440        (3,409 )      (9,425 ) 

Tax adjustments

     (12,766 )      11,291        (12,497 )      12,172   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net financial earnings

   $ 4,514      $ 9,738      $ 196,295      $ 113,895   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted Average Shares Outstanding

        

Basic

     42,117        41,608        42,072        41,697   

Diluted

     42,117        41,732        42,456        41,820   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic (loss) earnings per share

   $ (0.34 )    $ 0.70      $ 3.95      $ 3.23   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic net financial earnings per share

   $ 0.11      $ 0.23      $ 4.67      $ 2.73   
  

 

 

   

 

 

   

 

 

   

 

 

 

NFE is a financial measure not calculated in accordance with generally accepted accounting principles (GAAP) of the United States as it excludes all unrealized, and certain realized, gains and losses associated with derivative instruments, net of applicable tax adjustments. For further discussion of this financial measure, as well as reconciliation to the most comparable GAAP measure, please see the explanation below under “Additional Non-GAAP Financial Information.”

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

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•   NJR Reports Net Financial Earnings

Fiscal 2014 year-to-date NFE at NJR totaled $196.3 million, or $4.67 per share, compared with $113.9 million, or $2.73 per share, during the first nine months of fiscal 2013. For the three-month period ended June 30, 2014, NFE were $4.5 million, or $0.11 per share, compared with $9.7 million, or $0.23 per share, during the same period last year.

 

     Three Months Ended
June 30,
   

Nine Months Ended

June 30,

 

(Thousands)

   2014     2013     2014      2013  

Net financial earnings (loss)

         

New Jersey Natural Gas

   $ 4,882      $ 5,528      $ 79,564       $ 76,937   

NJR Energy Services

     (8,628 )      2,097        90,153         21,479   

NJR Clean Energy Ventures

     3,865        (1,381 )      20,286         9,078   

NJR Midstream

     1,896        1,541        5,584         5,600   

NJR Home Service and Other

     2,485        1,944        708         813   
  

 

 

   

 

 

   

 

 

    

 

 

 

Sub-total

     4,500        9,729        196,295         113,907   

Eliminations

     14        9        —           (12 ) 
  

 

 

   

 

 

   

 

 

    

 

 

 

Total

   $ 4,514      $ 9,738      $ 196,295       $ 113,895   
  

 

 

   

 

 

   

 

 

    

 

 

 

Year-to-date NFE growth was driven by extremely strong results at NJR Energy Services (NJRES), the company’s wholesale provider of physical natural gas services and customized energy solutions, and NJR’s unregulated distributed power subsidiary, NJR Clean Energy Ventures (NJRCEV), as well as continued steady growth at New Jersey Natural Gas (NJNG), NJR’s regulated utility. Strong third-quarter results at NJRCEV were primarily offset by the anticipated loss at NJRES, which was due primarily to the seasonal use of natural gas, and year-round transportation and storage portfolio expenses.

“We’re having an extraordinary year, led by the results at three of our key subsidiaries,” said Laurence M. Downes, chairman and CEO of New Jersey Resources. “On behalf of our board of directors, I would like to thank all our employees for their passion and commitment, which remain the driving force behind our ability to continually meet our customers’ expectations for safety, reliability and affordable service every day and, at the same time, deliver value to our shareowners.”

 

•   NJR Reaffirms Increased Fiscal 2014 Net Financial Earnings Guidance

Subject to the risks and uncertainties identified below under “Forward-Looking Statements,” NJR is reaffirming previously announced increased fiscal 2014 NFE guidance in a range of $4.00 to $4.20 per basic share.

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

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The company is forecasting a net financial loss of between $0.47 and $0.67 per share in the fourth quarter of fiscal 2014. The forecasted fourth-quarter loss is due to the seasonal nature of NJRES and NJNG’s businesses and higher discretionary expenses, including the estimated impact of a voluntary early retirement program.

In fiscal 2014, NJR expects its regulated businesses, NJNG and NJR Midstream, to contribute 43 to 60 percent to NFE and, as in the past, expects NJNG to be the largest contributor to NFE. The following chart represents the contributions NJR currently expects from its businesses in fiscal 2014:

 

Company

   Expected Fiscal 2014
Net Financial Earnings Contribution

New Jersey Natural Gas

   40 to 50 percent

NJR Midstream

   3 to 10 percent

Total Regulated

   43 to 60 percent

NJR Energy Services

   35 to 45 percent

NJR Clean Energy Ventures

   5 to 15 percent

NJR Home Services

   2 to 5 percent

Assuming a return to more normal weather, NJR expects NJRES will generate between 5 to 15 percent of total NFE in fiscal 2015 and beyond. The company expects its regulated businesses will contribute 65 to 80 percent of total NFE over the long term. Contributions from NJR’s various business segments are expected to return to previously announced levels in fiscal 2015 as shown in the chart below:

 

Company

   Expected Fiscal 2015 and Beyond
Net Financial Earnings Contribution

New Jersey Natural Gas

   60 to 70 percent

NJR Midstream

   5 to 10 percent

Total Regulated

   65 to 80 percent

NJR Clean Energy Ventures

   10 to 20 percent

NJR Energy Services

   5 to 15 percent

NJR Home Services

   2 to 5 percent

 

•   Board of Directors Declares Dividend

On July 15, 2014, NJR announced its board of directors unanimously declared a quarterly dividend of $0.42 per share on its common stock. The dividend will be payable on October 1, 2014, to shareowners of record on September 15, 2014. NJR has paid quarterly dividends continuously since its inception in 1952.

 

•   New Jersey Natural Gas

Fiscal 2014 year-to-date NFE at NJNG, the company’s regulated utility subsidiary, totaled $79.6 million, compared with $76.9 million for the first nine months of fiscal 2013. For the three-month period ended June 30, 2014, NFE totaled $4.9 million, compared with $5.5 million during the same period last year. The

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

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improved year-to-date results were driven by higher utility gross margin from customer additions, incentive programs and regulatory initiatives, as well as the continued impact of accelerated infrastructure investments. The lower results in the third quarter were due primarily to higher operations and maintenance expenses and a higher effective tax rate, which more than offset higher gross margin from incentive programs. Lower forecasted cost of removing assets placed in service before 1980 resulted in an increased tax adjustment in the third fiscal quarter of 2014.

During the first nine months of fiscal 2014, NJNG added 5,151 new customers, compared with 5,301 in the same period last year. Of these customers, 2,463 were related to new construction, compared with 2,493 in the same period last year. Year-to-date, 3,125 customers, including 437 existing customers, converted to natural gas heat. These new and conversion customers, along with the addition of firm natural gas sales to existing customers, will contribute approximately $3.1 million annually to utility gross margin, a 15 percent increase over the same period last year.

“We continue to see positive signs in the residential new construction market,” continued Downes. “Combined with favorable service territory demographics and competitive natural gas pricing, we are well on our way to meeting our projected new customer additions goal of between 14,000 to 16,000 during fiscal 2014 and 2015. This will represent a new customer annual growth rate of about 1.5 percent.”

NJNG expects these new customers and conversions to contribute approximately $4 million annually to utility gross margin. For more information on utility gross margin, please see Non-GAAP Financial Information below.

 

•   $102.5 Million Infrastructure Investment Approved; Regulatory Update

On July 23, 2014, NJNG received approval from the New Jersey Board of Public Utilities (BPU) for its New Jersey Reinvestment in System Enhancement (NJ RISE) program. Through NJ RISE, NJNG will invest $102.5 million over a five-year period in six capital projects designed to enhance the resiliency of its natural gas distribution and transmission systems and help diminish the impact of major weather events in the future.

“The NJ RISE program will enable us to pursue storm-hardening and mitigation investments to best serve our customers in storm-prone areas surrounding the barrier island communities and other coastal areas of New Jersey in our service territory,” continued Downes.

These system enhancements, which align directly with the state’s appetite for energy resiliency and preparedness, will help mitigate future outages, improve NJNG’s service disruption response and strengthen the overall safety, reliability and integrity of its natural gas delivery system. NJNG will recover its capital investment costs through July 31, 2015 through an adjustment to its base rates in November 2015. The NJ RISE investments will earn a weighted average cost of capital of 6.74 percent, including a 9.75 percent return on equity (ROE) with a 53.5 percent common equity ratio. Additional cost recovery will be addressed in NJNG’s next base rate case scheduled to be filed no later than November 15, 2015.

In the first nine months of fiscal 2014, NJNG invested $33.7 million in its Safety Acceleration and Facility Enhancement (SAFE) program, a planned $130 million, four-year infrastructure investment. Through SAFE, NJNG will replace 276 miles of its distribution main to further ensure the reliability and integrity of its natural gas delivery system. The SAFE program includes the replacement of NJNG’s entire cast iron

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

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distribution main and approximately 50 percent of its unprotected bare steel distribution main, along with the associated services. SAFE investments will earn a weighted average cost of capital of 6.9 percent, including a 9.75 percent ROE with a 53.5 percent common equity ratio.

Equipment manufacturing is underway for NJNG’s Howell, New Jersey, Liquefied Natural Gas (LNG) plant, which will give the company the ability to liquefy pipeline natural gas for peak-day use and reduce LNG transportation costs. The $35.7 million investment will benefit customers by reducing Basic Gas Supply Service costs and will create additional value for shareowners.

The company is currently evaluating route options for its Southern Reliability Link (SRL) project, an estimated $130 to $160 million investment, which will connect an interstate pipeline to NJNG’s transmission system in Ocean County, New Jersey, to support system reliability and redundancy.

 

•   Conservation Incentive Program Continuation Approved

In the third quarter of fiscal 2014, NJNG received approval from the BPU to continue its Conservation Incentive Program (CIP). As a result of this action, there is no future expiration date for the CIP; however, it is subject to review in a future rate filing in 2017. Separately, the company has proposed a reduction to its CIP rates that would result in a bill decrease for residential and commercial customers, effective October 1, 2014.

First enacted in 2006, the CIP enables NJNG to more actively encourage savings for customers through conservation and energy-efficiency improvements, while allowing NJNG to maintain sufficient operating revenues that might otherwise be impacted by declines in usage patterns. By eliminating the link between usage and margin recoveries, NJNG is in a stronger position to help customers manage their energy bills. Additionally, rate impacts continue to be subject to tariff requirements, which ensure protection for customers.

Since its inception, the CIP has helped customers reduce their natural gas usage by 295 million therms, saving a total of $305 million. These conservation actions reduce greenhouse gas emissions and help customers save energy and money, supporting the state’s environmental goals without impacting NJNG’s gross margin.

 

•   The SAVEGREEN Project® Encourages Energy Savings

In the first nine months of fiscal 2014, The SAVEGREEN Project, NJNG’s energy-efficiency program, invested $24.7 million on grants, incentives and NJNG’s On-Bill Repayment Program (OBRP) to help make the investment in high-efficiency natural gas equipment and energy-efficient upgrades more affordable for NJNG customers. During the same period, SAVEGREEN performed 3,432 home energy audits to identify additional energy-efficiency opportunities with an emphasis on whole-house improvements to further increase energy savings for customers. Year-to-date, 1,690 NJNG customers have taken advantage of the OBRP.

Since its inception in 2009, SAVEGREEN grants, incentives and OBRP loans, totaling $85.2 million, have helped over 31,447 customers reduce energy consumption and lower their bills, supporting the state’s environmental goals and its mandate to reduce energy costs for residents. NJNG’s SAVEGREEN energy-efficiency programs are in place through June 30, 2015.

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

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In total, NJNG plans to invest approximately $138 million in SAVEGREEN grants, financial incentives and the OBRP over the life of the program. The company is authorized to earn an overall return on its SAVEGREEN investments, ranging from 6.9 to 7.76 percent, with a ROE ranging from 9.75 to 10.3 percent. The recovery period varies from two to 10 years, depending on the type of energy-efficiency investment.

 

•   Compressed Natural Gas Refueling Stations on Track to Open This Year

NJNG is investing approximately $10 million in three compressed natural gas (CNG) refueling stations throughout its service territory. Construction contracts have been awarded for all three projects and the company expects to break ground on all three stations this summer.

The host sites, located at Waste Management, Inc. of Toms River, Ocean County, the Middletown Department of Public Works and Shore Point Distributing Company, Inc. of Freehold Township, both in Monmouth County, will be the first to open to the public in each of these counties.

NJNG will install, own and maintain the CNG infrastructure for all three stations, and the host companies will be required to initially use at least 20 percent of the refueling capacity and open the stations to the public on a 24/7 basis. These new CNG fueling stations align with the state’s public policy goal to encourage the use of natural gas vehicles and give New Jersey residents and businesses easier access to cleaner, cost-effective fuel options. NJNG expects all three CNG stations to be operational in calendar year 2014. NJNG is authorized by the BPU to earn an overall return of 7.1 percent, including a 10.3 percent ROE on these investments.

 

•   New Jersey Natural Gas Supply Incentive Program

For the three-month period ended June 30, 2014, NJNG’s gross margin-sharing incentive programs, which include off-system sales, capacity release, storage optimization and financial risk management programs, contributed $5.9 million to utility gross margin, compared with $1.9 million during the same period last year. During the first nine months of fiscal 2014, these incentives contributed $10.4 million to utility gross margin, compared with $6 million for the same period last year. The higher results in both periods were due primarily to increased margins in the storage incentive program, driven mainly by lower natural gas prices as well as timing of storage injections. NJNG capacity release margins were also higher during both periods, primarily due to an increase in the amount of volumes released and the value of capacity as a result of increased market area volatility.

NJNG shares the gross margin earned from these incentive programs with customers and shareowners, according to a gross margin-sharing formula authorized by the BPU that is in place through October 31, 2015. Since their inception in 1992, these incentive programs have saved customers approximately $685 million.

 

•   Strong Year-To-Date Results at NJR Energy Services

Year-to-date NFE at NJR Energy Services (NJRES), the company’s wholesale provider of physical natural gas services and customized energy solutions, were $90.2 million, compared with $21.5 million in the first nine months of fiscal 2013. These exceptionally strong results were due primarily to significantly increased demand for natural gas in regions affected by the sustained extreme cold weather this past winter across the United States, especially in the Midwest.

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

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For the three-month period ended June 30, 2014, NJRES reported a net financial loss of $8.6 million, compared with NFE of $2.1 million in the same period last year. The seasonal nature of natural gas usage in addition to year-round transportation and storage portfolio expenses combined with the cost of unwinding hedges associated with natural gas sales in the second quarter of fiscal 2014, contributed to the expected net financial loss in the third fiscal quarter.

Over the course of the past several years, NJRES has restructured its portfolio of storage and pipeline capacity assets to reflect the changing dynamics in the natural gas industry and position the company to serve the growing market for physical natural gas services. “During this past winter, NJRES effectively utilized its strategically located assets across North America, including the Marcellus region and Midwest, to meet the needs of its diverse customer base and create significant value for our shareowners,” continued Downes. NJRES’ asset portfolio currently consists of approximately 47 Bcf of firm storage contracts and 1.4 Bcf/day of firm transportation contracts.

 

•   Strong Earnings at NJR Clean Energy Ventures; The Sunlight Advantage® Grows

Fiscal 2014 year-to-date NFE at NJR Clean Energy Ventures (NJRCEV), the company’s unregulated distributed power subsidiary, were $20.3 million, compared with $9.1 million in the first nine months of fiscal 2013. For the three-month period ended June 30, 2014, NJRCEV reported NFE of $3.9 million, compared with a net financial loss of $1.4 million in the same period last year. The higher results in both periods were due primarily to increased investment tax credits (ITCs) from higher capital expenditures to be placed into service in fiscal 2014, compared with fiscal 2013, and the receipt of a one-time credit support payment related to a change in ownership at the site of one of NJRCEV’s commercial solar projects.

During the third quarter of fiscal 2014, NJRCEV placed into service a 9.2 megawatt (MW) ground-mounted, grid-connected commercial solar system in West Pemberton, New Jersey. This project, in addition to two other ground-mounted commercial solar systems placed in service in the first nine months of fiscal 2014, represent a total capacity of 10.9 MWs and $28.8 million.

Currently, NJRCEV has two commercial solar projects under construction. NJRCEV expects to place into service a $15.9 million, 6.1 MW grid-connected system in North Hanover, New Jersey in the fourth quarter of fiscal 2014. Additionally, NJRCEV expects to place into service a $26.9 million, 10 MW grid-connected system in Howell, New Jersey during the first quarter of fiscal 2015. In fiscal 2014, NJRCEV expects to place into service a total of $44.7 million in commercial solar systems, compared with $33.1 million in fiscal 2013.

The Sunlight Advantage, NJRCEV’s residential solar lease program, added 739 customers, totaling 7.2 MWs of capacity, during the first nine months of fiscal 2014, bringing the total number of customers to 2,825 since the program’s inception. The Sunlight Advantage provides savings to eligible homeowners through both roof- and ground-mounted solar systems with no upfront installation or maintenance costs. NJRCEV expects to invest approximately $31.5 million in residential solar systems in fiscal 2014, compared with $29 million in fiscal 2013.

NJR’s effective tax rate is significantly impacted by the amount of tax credits that are forecasted to be earned during the fiscal year. GAAP requires NJR to estimate its annual effective tax rate and use this rate to calculate its year-to-date tax provision. Based on projects completed in the first nine months of fiscal 2014, and NJRCEV’s forecast of projects to be completed for the balance of the fiscal year, NJR’s estimated annual

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

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effective tax rate is 28.2 percent. Accordingly, $17.8 million related to tax credits, net of deferred taxes, were recognized in the first nine months of fiscal 2014, compared with $13.1 million, net of deferred taxes, in the same period last year. For NFE purposes, the effective tax rate for fiscal 2014 is estimated at 28.4 percent and $20.9 million of tax credits were recognized in the first nine months of fiscal 2014, compared with $13.1 million last year. For further discussion of this tax adjustment and reconciliation to the most comparable GAAP measure, please see the explanation below under “Additional Non-GAAP Financial Information.”

The estimated effective tax rate is based on information and assumptions that are subject to change, and may have a material impact on quarterly and annual net financial earnings. Factors considered by management in estimating completion of projects during the fiscal year include, but are not limited to, board of directors’ approval, regulatory approval, execution of various contracts, including power purchase agreements, construction logistics, permitting and interconnection completion. See the “Forward-Looking Statements” section of this news release for further information regarding the inherent risks associated with solar investments.

 

•   NJR Clean Energy Ventures Places First Onshore Wind Project into Service

In the third quarter of fiscal 2014, NJRCEV placed its first onshore wind project into service. The Two Dot Wind Farm, located on 176 acres in Two Dot, Montana, consists of six, General Electric 1.62 MW, 87-meter rotor diameter wind turbines with a capacity of 9.7 MWs. The energy and clean energy credits generated from Two Dot will be sold to a regional utility through a 25-year power purchase agreement. This approximate $22 million investment, which is owned and operated by NJRCEV, qualifies for federal production tax credits (PTCs), that are based on kilowatt-hour output and are expected to provide annuity-like returns.

“Wind energy offers us the opportunity to further diversify our distributed power portfolio, and will play an increasingly important role in our renewable investment strategy,” continued Downes.

Construction continues on NJRCEV’s second onshore wind farm, a 20 MW, $42 million investment in Carroll County, Iowa, which NJR expects to be operational in the second quarter of fiscal 2015. Like Two Dot, NJRCEV will construct, own and operate the wind farm and the energy and clean energy credits it generates will be sold to a regional utility through a 25-year power purchase agreement. This project will also qualify for federal PTCs.

Both the Two Dot and Carroll Area Wind Farms are shovel-ready projects purchased from OwnEnergy, Inc., a developer of midsize and community wind projects. In 2012, NJRCEV acquired an approximate 19 percent ownership position in OwnEnergy, with an option, but not the obligation, to purchase projects that fit NJR’s investment profile.

 

•   Long-Term Outlook for NJR Clean Energy Ventures

Over the next several years, NJRCEV expects a declining percentage of its NFE to come from ITCs associated with solar investments. Looking out through fiscal 2017, NJRCEV anticipates its existing projects will benefit from Solar Renewable Energy Certificate (SREC) prices the company expects will continue to improve based on a decline in solar construction, higher renewable portfolio standards (RPS) and an increased likelihood of a return to a market where RPS requirements will exceed installed capacity by 2017.

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

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NJRCEV continues to focus on diversifying its distributed power portfolio to include small- to mid-sized onshore wind projects, supported by long-term power purchase agreements, such as the Two Dot and Carroll Area Wind Farms and investments in combined heat and power, thereby reducing its reliance on ITCs.

In fiscal 2015, NJRCEV expects to generate between 10 to 20 percent of total NFE.

 

•   Midstream Investments

NJR’s natural gas midstream asset segment, NJR Midstream, reported year-to-date NFE of $5.6 million, the same as in the first nine months of fiscal 2013. For the three-month period ended June 30, 2014, NFE was $1.9 million, compared with $1.5 million in the third fiscal quarter of 2013.

NJR Midstream consists of two Federal Energy Regulatory Commission (FERC)-regulated investments, NJR’s 50 percent equity ownership in Steckman Ridge, a 12 Bcf natural gas storage facility in southwestern Pennsylvania jointly owned with Spectra Energy, and NJR’s 5.53 percent equity investment in Iroquois Pipeline, which delivers natural gas to the New England and New York markets.

 

•   NJR Home Services Update

In the third quarter of fiscal 2014, NFE at NJR Home Services (NJRHS), the company’s unregulated retail and appliance service subsidiary, were $2 million, compared with $1.8 million in the third quarter of fiscal 2013. NJRHS generated NFE of $283,000 in the first nine months of fiscal 2014, compared with $688,000 in the same period last year when NJRHS experienced higher-than-expected generator and plumbing installation sales as a result of Superstorm Sandy.

NJRHS offers home energy solutions for customer comfort, including equipment sales and installations, solar lease and purchase plans and a recently expanded service contract product line that now includes electric, plumbing and standby generator contracts. NJRHS’ expanded service territory now includes Monmouth, Ocean, Middlesex, Morris, Sussex, Warren and Hunterdon counties in New Jersey. Currently, NJRHS serves approximately 119,000 service contract customers.

Webcast Information

NJR will host a live webcast to discuss its financial results today at 10 a.m. ET. A few minutes prior to the webcast, go to njresources.com and select “Investor Relations.” Scroll down and click “Investor Information” on the left side of the page and select “Events & Presentations” then click on the webcast link.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of 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,” “forecasts,” “may,” “will,” “intends,” “plans,” “believes,” “should” and similar expressions may identify forward-looking information and such forward-looking statements are made based upon management’s current expectations 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 or that the effect of future developments on NJR will be those anticipated by management. Forward-looking information in this release includes, but is not limited

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

Page 10 of 17

 

to, certain statements regarding NJR’s NFE guidance for fiscal 2014, forecasted contribution of business segments to fiscal 2014 and 2015 NFE, expected contribution by NJNG’s new customers to utility gross margin, expected number of new customers of NJNG, SREC prices, estimated capital expenditures and planned investments in fiscal 2014 and beyond by NJNG, including those related to SAVEGREEN, SAFE and NJ RISE, planned compressed natural gas fueling stations, the long-term outlook for NJRCEV, diversification of NJRCEV’s strategy, NJRCEV’s future investments in solar projects and the Two Dot and Carroll Area wind farms.

The factors that could cause actual results to differ materially from NJR’s expectations include, but are not limited to, weather and economic conditions; demographic changes in the NJNG service territory and their effect on NJNG’s customer growth; volatility of natural gas and other commodity prices and their impact on NJNG customer usage, NJNG’s BGSS incentive programs, NJRES’ operations and on the company’s risk management efforts; changes in rating agency requirements and/or credit ratings and their effect on availability and cost of capital to the Company; the impact of volatility in the credit markets on our access to capital; the ability to comply with debt covenants; the impact to the asset values and resulting higher costs and funding obligations of NJR’s pension and post-employment benefit plans as a result of downturns in the financial markets, a lower discount rate, and impacts associated with the Patient Protection and Affordable Care Act; accounting effects and other risks associated with hedging activities and use of derivatives contracts; commercial and wholesale credit risks, including the availability of creditworthy customers and counterparties and liquidity in the wholesale energy trading market; the ability to obtain governmental approvals and/or financing for the construction, development and operation of certain non-regulated energy investments; risks associated with the management of the company’s joint ventures and partnerships; risks associated with our investments in renewable energy projects and our investments in an onshore wind developer, including the availability of regulatory and tax incentives, logistical risks and potential delays related to construction, permitting, regulatory approvals and electric grid interconnection, the availability of viable projects and NJR’s eligibility for ITCs and PTCs, the future market for SRECs and operational risks related to projects in service; timing of qualifying for ITCs due to delays or failures to complete planned solar energy projects and the resulting effect on our effective tax rate and earnings; regulatory approval of NJNG’s planned infrastructure programs; the level and rate at which NJNG’s costs and expenses (including those related to restoration efforts resulting from Superstorm Sandy) are incurred and the extent to which they are allowed to be recovered from customers through the regulatory process; access to adequate supplies of natural gas and dependence on third-party storage and transportation facilities for natural gas supply; operating risks incidental to handling, storing, transporting and providing customers with natural gas; risks related to our employee workforce, including a work stoppage; the regulatory and pricing policies of federal and state regulatory agencies; the costs of compliance with the proposed regulatory framework for over-the-counter derivatives; the costs of compliance with present and future environmental laws, including potential climate change-related legislation; risks related to changes in accounting standards; the disallowance of recovery of environmental-related expenditures and other regulatory changes; environmental-related and other litigation and other uncertainties; risks related to cyber-attack of failure of information technology systems; and the impact of natural disasters, terrorist activities, and other extreme events on our operations and customers, including any impacts to utility gross margin, and restoration costs. The aforementioned factors are detailed in the “Risk Factors” sections of our Annual Report on Form 10-K filed on November 26, 2013, as filed with the Securities and Exchange Commission (SEC), which is available on the SEC’s website at sec.gov. Information included in this 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

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

Page 11 of 17

 

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 press release includes the non-GAAP measures NFE (losses), 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 the company’s operating performance, these measures should not be considered an alternative to, or more meaningful than, operating income as determined in accordance with GAAP. This information has been provided pursuant to the requirements of SEC Regulation G.

NFE (losses) 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 NJRES. Volatility associated with the change in value of these financial and physical commodity contracts is reported in 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 NJRCEV, as such adjustment is related to tax credits generated by NJRCEV.

NJNG’s utility gross margin represents the results of revenues less natural gas costs, sales and other taxes and regulatory rider expenses, which are key components of the company’s operations that move in relation to each other. Natural gas costs, sales and other taxes and regulatory rider expenses are passed through to customers and, therefore, have no effect on gross margin. Management uses these non-GAAP financial measures as supplemental measures to other GAAP results to provide a more complete understanding of the company’s performance. Management believes these non-GAAP measures are more reflective of the company’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 Form 10-K, Item 7 and most recent Form 10-Q, Part I, Item 2.

About New Jersey Resources

New Jersey Resources (NYSE: NJR) is a Fortune 1000 company that provides safe and reliable natural gas and clean energy services, including transportation, distribution and asset management. With annual revenues in excess of $3 billion, NJR is comprised of five primary businesses:

 

  •   New Jersey Natural Gas is NJR’s principal subsidiary that operates and maintains 7,000 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 and Middlesex counties.

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

Page 12 of 17

 

  •   NJR 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.

 

  •   NJR Clean Energy Ventures invests in, owns and operates solar and onshore wind projects with a total capacity in excess of 85 megawatts, providing residential and commercial customers with low-carbon solutions.

 

  •   NJR Midstream serves customers from local distributors and producers to electric generators and wholesale marketers through its equity ownership in a natural gas storage facility and a transportation pipeline, both of which are Federal Energy Regulatory Commission, or FERC-regulated investments.

 

  •   NJR Home Services provides heating, central air conditioning, standby generators, solar and other indoor and outdoor comfort products to residential homes and businesses throughout New Jersey and serves approximately 119,000 service contract customers.

NJR and its more than 900 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:

Visit www.njresources.com.

Follow us on Twitter @NJNaturalGas.

“Like” us on facebook.com/NewJerseyNaturalGas.

Download our free NJR investor relations app for iPad and iPho

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

Page 13 of 17

 

RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES

 

 
NEW JERSEY RESOURCES         

 

 
     Three Months Ended     Nine Months Ended  
     June 30,     June 30,  

(Thousands)

   2014     2013     2014     2013  

A reconciliation of Net income at NJR to Net financial earnings, is as follows:

  

   

Net (loss) income

   $ (14,274 )    $ 29,155      $ 166,390      $ 134,830   

Add:

        

Consolidated unrealized (gain) loss on derivative instruments

     (6,585 )      (44,148 )      45,811        (23,682 ) 

Effects of economic hedging related to natural gas inventory

     38,139        13,440        (3,409 )      (9,425 ) 

Tax adjustments

     (12,766 )      11,291        (12,497 )      12,172   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net financial earnings

   $ 4,514      $ 9,738      $ 196,295      $ 113,895   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted Average Shares Outstanding

        

Basic

     42,117        41,608        42,072        41,697   

Diluted

     42,117        41,732        42,456        41,820   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic net financial earnings per share

   $ 0.11      $ 0.23      $ 4.67      $ 2.73   
  

 

 

   

 

 

   

 

 

   

 

 

 
        

 

 

NJR ENERGY SERVICES

 

  

 

The following table is a computation of Financial margin at Energy Services:

 

  

Operating revenues

   $ 560,633      $ 633,533      $ 2,439,926      $ 1,741,081   

Less: Gas purchases

     599,773        593,730        2,311,718        1,661,362   

Add:

        

Unrealized (gain) loss on derivative instruments and related transactions

     (7,101 )      (45,267 )      46,357        (24,312 ) 

Effects of economic hedging related to natural gas inventory

     38,139        13,440        (3,409 )      (9,425 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Financial margin

   $ (8,102 )    $ 7,976      $ 171,156      $ 45,982   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

A reconciliation of Operating income at Energy Services, the closest GAAP financial measurement, to Financial margin is as follows:

 

   

Operating (loss) income

   $ (44,554 )    $ 35,782      $ 101,045      $ 68,541   

Add:

        

Operation and maintenance expense

     5,033        3,595        25,992        10,190   

Depreciation and amortization

     15        10        40        32   

Other taxes

     366        416        1,131        956   
  

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal – Gross margin

     (39,140 )      39,803        128,208        79,719   

Add:

        

Unrealized (gain) loss on derivative instruments and related transactions

     (7,101 )      (45,267 )      46,357        (24,312 ) 

Effects of economic hedging related to natural gas inventory

     38,139        13,440        (3,409 )      (9,425 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Financial margin

   $ (8,102 )    $ 7,976      $ 171,156      $ 45,982   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

A reconciliation of Energy Services Net income to Net financial earnings, is as follows:

 

  

Net (loss) income

   $ (28,254 )    $ 22,222      $ 62,996      $ 42,812   

Add:

        

Unrealized (gain) loss on derivative instruments and related transactions

     (7,101 )      (45,267 )      46,357        (24,312 ) 

Effects of economic hedging related to natural gas inventory

     38,139        13,440        (3,409 )      (9,425 ) 

Tax adjustments

     (11,412 )      11,702        (15,791 )      12,404   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net financial (loss) earnings

   $ (8,628 )    $ 2,097      $ 90,153      $ 21,479   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended     Nine Months Ended  
     June 30,     June 30,  

(Thousands)

   2014     2013     2014     2013  

NJR CLEAN ENERGY VENTURES

 

  

 

A reconciliation of Clean Energy Ventures Net income to Net financial earnings, is as follows:

 

  

Net income (loss)

   $ 5,029      $ (1,381 )    $ 17,193      $ 9,078   

Add:

        

Tax adjustments

     (1,164 )      —          3,093        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net financial earnings (loss)

   $ 3,865      $ (1,381 )    $ 20,286      $ 9,078   
  

 

 

   

 

 

   

 

 

   

 

 

 


NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

Page 14 of 17

 

 

NEW JERSEY RESOURCES

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

     Three Months Ended      Nine Months Ended  
     June 30,      June 30,  

(Thousands, except per share data)

   2014     2013      2014      2013  

OPERATING REVENUES

          

Utility

   $ 111,383      $ 119,022       $ 739,380       $ 689,621   

Nonutility

     576,874        648,447         2,406,851         1,774,752   
  

 

 

   

 

 

    

 

 

    

 

 

 

Total operating revenues

     688,257        767,469         3,146,231         2,464,373   
  

 

 

   

 

 

    

 

 

    

 

 

 

OPERATING EXPENSES

          

Gas purchases

          

Utility

     39,546        55,708         298,694         356,069   

Nonutility

     599,530        593,534         2,310,930         1,660,528   

Operation and maintenance

     45,995        43,630         149,291         126,767   

Regulatory rider expenses

     9,337        6,258         67,380         44,014   

Depreciation and amortization

     13,620        11,942         39,014         34,966   

Energy and other taxes

     9,437        9,397         50,894         50,869   
  

 

 

   

 

 

    

 

 

    

 

 

 

Total operating expenses

     717,465        720,469         2,916,203         2,273,213   
  

 

 

   

 

 

    

 

 

    

 

 

 

OPERATING (LOSS) INCOME

     (29,208 )      47,000         230,028         191,160   

Other income

     10,952        1,238         12,791         4,284   

Interest expense, net

     6,507        6,008         19,108         17,579   
  

 

 

   

 

 

    

 

 

    

 

 

 

(LOSS) INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES

     (24,763 )      42,230         223,711         177,865   

Income tax (benefit) provision

     (7,808 )      15,297         65,377         51,342   

Equity in earnings of affiliates

     2,681        2,222         8,056         8,307   
  

 

 

   

 

 

    

 

 

    

 

 

 

NET (LOSS) INCOME

   $ (14,274 )    $ 29,155       $ 166,390       $ 134,830   
  

 

 

   

 

 

    

 

 

    

 

 

 

(LOSS) EARNINGS PER COMMON SHARE

          

BASIC

   $ (0.34 )    $ 0.70       $ 3.95       $ 3.23   

DILUTED

   $ (0.34 )    $ 0.70       $ 3.92       $ 3.22   

DIVIDENDS DECLARED PER COMMON SHARE

   $ .42      $ .40       $ 1.26       $ 1.20   

AVERAGE SHARES OUTSTANDING

          

BASIC

     42,117        41,608         42,072         41,697   

DILUTED

     42,117        41,732         42,456         41,820   

 

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NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

Page 15 of 17

 

 

NEW JERSEY RESOURCES

 

 

     Three Months Ended     Nine Months Ended  
     June 30,     June 30,  

(Thousands, except per share data)

   2014     2013     2014     2013  

Operating Revenues

        

Natural Gas Distribution

   $ 111,383      $ 119,022      $ 739,380      $ 689,621   

Energy Services

     560,633        633,533        2,439,926        1,741,081   

Clean Energy Ventures

     3,155        2,563        8,007        7,182   

Midstream

     —          —          —          —     

Retail and Other

     13,798        13,704        31,896        32,842   
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total

     688,969        768,822        3,219,209        2,470,726   

Eliminations

     (712 )      (1,353 )      (72,978 )      (6,353 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 688,257      $ 767,469      $ 3,146,231      $ 2,464,373   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income (Loss)

        

Natural Gas Distribution

   $ 13,045      $ 10,339      $ 132,400      $ 124,438   

Energy Services

     (44,554 )      35,782        101,045        68,541   

Clean Energy Ventures

     (2,203 )      (1,988 )      (7,176 )      (5,338 ) 

Midstream

     (202 )      (190 )      (721 )      (611 ) 

Retail and Other

     4,136        3,119        689        1,402   
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total

     (29,778 )      47,062        226,237        188,432   

Eliminations

     570        (62 )      3,791        2,728   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ (29,208 )    $ 47,000      $ 230,028      $ 191,160   
  

 

 

   

 

 

   

 

 

   

 

 

 

Equity in Earnings of Affiliates

        

Midstream

   $ 3,511      $ 3,052      $ 10,594      $ 11,012   

Eliminations

     (830 )      (830 )      (2,538 )      (2,705 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 2,681      $ 2,222      $ 8,056      $ 8,307   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

        

Natural Gas Distribution

   $ 4,882      $ 5,528      $ 79,564      $ 76,937   

Energy Services

     (28,254 )      22,222        62,996        42,812   

Clean Energy Ventures

     5,029        (1,381 )      17,193        9,078   

Midstream

     1,896        1,541        5,584        5,600   

Retail and Other

     2,485        1,944        708        813   
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total

     (13,962 )      29,854        166,045        135,240   

Eliminations

     (312 )      (699 )      345        (410 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ (14,274 )    $ 29,155      $ 166,390      $ 134,830   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net financial earnings (loss)

        

Natural Gas Distribution

   $ 4,882      $ 5,528      $ 79,564      $ 76,937   

Energy Services

     (8,628 )      2,097        90,153        21,479   

Clean Energy Ventures

     3,865        (1,381 )      20,286        9,078   

Midstream

     1,896        1,541        5,584        5,600   

Retail and Other

     2,485        1,944        708        813   
  

 

 

   

 

 

   

 

 

   

 

 

 

Sub-total

     4,500        9,729        196,295        113,907   

Eliminations

     14        9        —          (12 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 4,514      $ 9,738      $ 196,295      $ 113,895   
  

 

 

   

 

 

   

 

 

   

 

 

 

Throughput (Bcf)

        

NJNG, Core Customers

     11.6        10.7        70.1        63.6   

NJNG, Off System/Capacity Management

     53.8        31.4        124.0        103.7   

NJRES Fuel Mgmt. and Wholesale Sales

     127.0        152.7        469.1        458.0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     192.4        194.8        663.2        625.3   
  

 

 

   

 

 

   

 

 

   

 

 

 

Common Stock Data

        

Yield at June 30

     2.9 %      3.9 %      2.9 %      3.9 % 

Market Price

        

High

   $ 57.68      $ 47.60      $ 57.68      $ 47.60   

Low

   $ 47.70      $ 40.97      $ 42.54      $ 38.51   

Close at June 30

   $ 57.16      $ 41.53      $ 57.16      $ 41.53   

Shares Out. at June 30

     42,168        41,380        42,168        41,380   

Market Cap. at June 30

   $ 2,410,298      $ 1,718,511      $ 2,410,298      $ 1,718,511   
  

 

 

   

 

 

   

 

 

   

 

 

 


NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

Page 16 of 17

 

 

NATURAL GAS DISTRIBUTION

 

 

     Three Months Ended     Nine Months Ended  
(Unaudited)    June 30,     June 30,  

(Thousands, except customer & weather data)

   2014     2013     2014     2013  

Utility Gross Margin

        

Operating revenues

   $ 111,383      $ 119,022      $ 739,380      $ 689,621   

Less:

        

Gas purchases

     40,373        56,559        373,982        363,646   

Energy and other taxes

     6,404        6,852        43,330        43,619   

Regulatory rider expense

     9,337        6,258        67,380        44,014   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Utility Gross Margin

   $ 55,269      $ 49,353      $ 254,688      $ 238,342   
  

 

 

   

 

 

   

 

 

   

 

 

 

Utility Gross Margin, Operating Income and Net Income

        

Residential

   $ 29,336      $ 28,277      $ 152,934      $ 147,398   

Commercial, Industrial & Other

     8,532        8,460        38,960        38,112   

Firm Transportation

     11,356        10,555        52,029        46,450   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Firm Margin

     49,224        47,292        243,923        231,960   

Interruptible

     190        165        411        368   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total System Margin

     49,414        47,457        244,334        232,328   

Off System/Capacity Management/FRM/Storage Incentive

     5,855        1,896        10,354        6,014   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Utility Gross Margin

     55,269        49,353        254,688        238,342   

Operation and maintenance expense

     30,466        28,414        88,417        82,310   

Depreciation and amortization

     10,567        9,537        30,374        28,213   

Other taxes not reflected in gross margin

     1,191        1,063        3,497        3,381   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income

   $ 13,045      $ 10,339      $ 132,400      $ 124,438   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 4,882      $ 5,528      $ 79,564      $ 76,937   
  

 

 

   

 

 

   

 

 

   

 

 

 

Throughput (Bcf)

        

Residential

     5.3        5.0        40.3        35.7   

Commercial, Industrial & Other

     1.0        1.0        7.6        6.9   

Firm Transportation

     2.6        2.3        16.2        13.7   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Firm Throughput

     8.9        8.3        64.1        56.3   

Interruptible

     2.7        2.4        6.0        7.3   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total System Throughput

     11.6        10.7        70.1        63.6   

Off System/Capacity Management

     53.8        31.4        124.0        103.7   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Throughput

     65.4        42.1        194.1        167.3   
  

 

 

   

 

 

   

 

 

   

 

 

 

Customers

        

Residential

     418,792        408,903        418,792        408,903   

Commercial, Industrial & Other

     25,108        24,901        25,108        24,901   

Firm Transportation

     59,796        63,521        59,796        63,521   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Firm Customers

     503,696        497,325        503,696        497,325   

Interruptible

     37        41        37        41   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total System Customers

     503,733        497,366        503,733        497,366   

Off System/Capacity Management*

     28        29        28        29   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Customers

     503,761        497,395        503,761        497,395   
  

 

 

   

 

 

   

 

 

   

 

 

 

*  The number of customers represents those active during the last month of the period.

     

Degree Days

        

Actual

     489        513        5,050        4,593   

Normal

     511        530        4,600        4,633   
  

 

 

   

 

 

   

 

 

   

 

 

 

Percent of Normal

     95.7 %      96.8 %      109.8 %      99.1 % 
  

 

 

   

 

 

   

 

 

   

 

 

 

 


NEW JERSEY RESOURCES ANNOUNCES FISCAL 2014 THIRD-QUARTER EARNINGS; REAFFIRMS INCREASED FISCAL 2014 NET FINANCIAL EARNINGS GUIDANCE; Strong Year-To-Date Results at NJR Energy Services Drives Growth; New Jersey Natural Gas $102.5 Million Infrastructure Investment Approved

Page 17 of 17

 

 

 
ENERGY SERVICES         

 

 
     Three Months Ended     Nine Months Ended  
(Unaudited)    June 30,     June 30,  

(Thousands, except customer, SREC and megawatt)

   2014     2013     2014     2013  

Operating Income

        

Operating revenues

   $ 560,633      $ 633,533      $ 2,439,926      $ 1,741,081   

Gas purchases

     599,773        593,730        2,311,718        1,661,362   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross Margin

     (39,140 )      39,803        128,208        79,719   

Operation and maintenance expense

     5,033        3,595        25,992        10,190   

Depreciation and amortization

     15        10        40        32   

Energy and other taxes

     366        416        1,131        956   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating (Loss) Income

   $ (44,554 )    $ 35,782      $ 101,045      $ 68,541   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (Loss) Income

   $ (28,254 )    $ 22,222      $ 62,996      $ 42,812   
  

 

 

   

 

 

   

 

 

   

 

 

 

Financial Margin

   $ (8,102 )    $ 7,976      $ 171,156      $ 45,982   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Financial (Loss) Earnings

   $ (8,628 )    $ 2,097      $ 90,153      $ 21,479   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gas Sold and Managed (Bcf)

     127.0        152.7        469.1        458.0   
  

 

 

   

 

 

   

 

 

   

 

 

 
        

 

 
CLEAN ENERGY VENTURES         

 

 

Operating Revenues

        

SREC sales

   $ 1,867      $ 1,793      $ 4,965      $ 5,652   

Electricity sales

     618        462        1,319        831   

Other

     670        308        1,723        699   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Revenues

   $ 3,155      $ 2,563      $ 8,007      $ 7,182   
  

 

 

   

 

 

   

 

 

   

 

 

 

Depreciation and Amortization

   $ 2,823      $ 2,196      $ 7,969      $ 6,131   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating (Loss)

   $ (2,203 )    $ (1,988 )    $ (7,176 )    $ (5,338 ) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income Tax (Provision) Benefit

   $ (1,286 )    $ 1,477      $ 18,146      $ 15,703   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income (Loss)

   $ 5,029      $ (1,381 )    $ 17,193      $ 9,078   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Financial Earnings (Loss)

   $ 3,865      $ (1,381 )    $ 20,286      $ 9,078   
  

 

 

   

 

 

   

 

 

   

 

 

 
        
  

 

 

   

 

 

   

 

 

   

 

 

 

Solar Renewable Energy Certificates Generated

     23,845        19,070        50,000        37,153   
  

 

 

   

 

 

   

 

 

   

 

 

 

Solar Renewable Energy Certificates Sold

     13,364        13,861        34,042        46,223   
  

 

 

   

 

 

   

 

 

   

 

 

 

Megawatts Installed

     11.3        2.7        18.1        14.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Megawatts Under Construction

     16.5        2.8        16.5        2.8   
  

 

 

   

 

 

   

 

 

   

 

 

 
        

 

 
MIDSTREAM         

 

 

Equity in Earnings of Affiliates

   $ 3,511      $ 3,052      $ 10,594      $ 11,012   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operation and Maintenance Expense

   $ 161      $ 143      $ 675      $ 561   
  

 

 

   

 

 

   

 

 

   

 

 

 

Interest Expense

   $ 333      $ 466      $ 1,108      $ 1,533   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 1,896      $ 1,541      $ 5,584      $ 5,600   
  

 

 

   

 

 

   

 

 

   

 

 

 
        

 

 
RETAIL AND OTHER         

 

 

Operating Revenues

   $ 13,798      $ 13,704      $ 31,896      $ 32,842   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Income

   $ 4,136      $ 3,119      $ 689      $ 1,402   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 2,485      $ 1,944      $ 708      $ 813   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Customers as of June 30,

     126,038        129,805        126,038        129,805   
  

 

 

   

 

 

   

 

 

   

 

 

 

 


EX-99.2

Exhibit 99.2

 

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Fiscal 2014 Third Quarter Update

July 31, 2014


LOGO

 

1

Regarding Forward-Looking Statements

Certain statements contained in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “estimates,” “expects,” “projects,” “forecasts”, “may,” “will,” “intends,” “expects,” “believes,” or “should” and similar expressions may identify forward-looking information and such forward-looking statements are made based upon management’s current expectations and/or beliefs as of this date or a prior date concerning future developments and their potential effect upon New Jersey Resources (NJR or the Company). There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on NJR will be those anticipated by management. NJR cautions persons reading or hearing this presentation that the assumptions that form the basis for forward-looking statements including, but not limited to, certain statements regarding NJR’s NFE guidance for fiscal 2014, forecasted contribution of business segments to fiscal 2014 NFE and to NFE beyond fiscal 2014, long-term benefits of increased NFE, future NJNG customer growth, future NJNG capital expenditures and infrastructure investments, NJNG incremental utility gross margin, the long-term outlook for NJRCEV, diversification of NJRCEV’s strategy, and the completion of Carroll area wind farm include many factors that are beyond the Company’s ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other market participants.

The factors that could cause actual results to differ materially from NJR’s expectations include, but are not limited to, weather and economic conditions; demographic changes in the NJNG service territory and their effect on NJNG’s customer growth; volatility of natural gas and other commodity prices and their impactonNJNGcustomer usage, NJNG’s Basic Gas Supply Service incentive programs, NJRES’ operations and on the Company’s risk management efforts; changes in rating agency requirements and/or credit ratings and their effect on availability and cost of capital to the Company; the impact of volatility in the credit markets on our access to capital; the ability to comply with debt covenants; the impact to the asset values and resulting higher costs and funding obligations of NJR’s pension and postemployment benefit plans as a result of downturns in the financial markets, a lower discount rate, and impacts associated with the Patient Protection and Affordable Care Act; accounting effects and other risks associated with hedging activities and use of derivatives contracts; commercial and wholesale credit risks, including the availability of creditworthy customers and counterparties and liquidity in the wholesale energy trading market; the ability to obtain governmental approvals and/or financing for the construction, development and operation of certain non-regulated energy investments; risks associated with the management of the Company’s joint ventures and partnerships; risks associated with our investments in renewable energy projects and our investment in an on-shore wind developer, including the availability of regulatory and tax incentives, logistical risks and potential delays related to construction, permitting, regulatory approvals and electric grid interconnection, the availability of viable projects and NJR’s eligibility for federal investment tax credits (ITC), and production tax credits (PTC), the future market for SRECs and operational risks related to projects in service; timing of qualifying for ITCs due to delays or failures to complete planned solar energy projects and theresulting effect on our effective tax rate and earnings; regulatory approval of NJNG’splanned infrastructure programs; the level and rate at which NJNG’s costs and expenses (including those related to restoration efforts resulting from Superstorm Sandy) are incurred and the extent to which they are allowed to be recovered from customers through the regulatory process; access to adequate supplies of natural gas and dependence on third-party storage and transportation facilities for natural gas supply; operating risks incidental to handling, storing, transporting and providing customers with natural gas; risks related to our employee workforce, including a work stoppage; the regulatory and pricing policies of federal and state regulatory agencies; the costs of compliance with present and future environmental laws, including potential climate change-related legislation; risks related to changes in accounting standards; the disallowance of recovery of environmental-related expenditures and other regulatory changes; environmental-related and other litigation and other uncertainties; risks related to cyber-attack or failure of information technology systems; and the impact of natural disasters, terrorist activities, and other extreme events on our operations and customers, including any impacts to utility gross margin and restoration costs. The aforementioned factors are detailed in the “Risk Factors” sections of our Annual Report on Form 10-K filed on November 26, 2013, as filed with the Securities and Exchange Commission (SEC) which is available on the SEC’s website at sec.gov. Informationincludedinthis presentation 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.


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Disclaimer Regarding Non-GAAP Financial Measures

This presentation includes the non-GAAP measures net financial earnings (NFE), financial margin and utility gross margin. As indicators of the Company’s operating performance, these measures should not be considered alternatives to, or more meaningful than, GAAP measures, such as cash flow, net income, operating income or earnings per share.

Net financial earnings (losses) 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 NJRES. Volatility associated with the change in value of these financial and physical commodity contracts is reported in 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 as opposed to when the planned transaction ultimately is settled. NJNG’s utility gross margin represents the resultsof revenues less natural gas costs, sales and other taxes and regulatory rider expenses, which are key components of the Company’s operations that move in relation to each other.

Management uses NFE, financial margin and utility gross margin as supplemental measures to other GAAP results to provide a more complete understanding of the Company’s performance. Management believes these non-GAAP measures aremorereflectiveofthe Company’sbusiness model, provide transparency to investors and enable period-to-period comparability of financial performance. For a full discussion of our non-GAAP financial measures, please see NJR’s most recent Form 10-K, Item 7 and most recent Form 10-Q, Item 2. This information has been provided pursuant to therequirementsof SEC Regulation G.

2


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Net Financial Earnings (NFE)

($MM) Three Months Ended Nine Months Ended

June 30, June 30,

Company 2014 2013 2014 2013

New Jersey Natural Gas $4.9 $5.5 $79.6 $76.9

NJR Energy Services (8.6) 2.1 90.2 21.5

NJR Clean Energy Ventures 3.9 (1.4) 20.3 9.1

NJR Midstreamdst 1.9 1.5 5.6 5.6

NJR Home Services/Other 2.4 2.0 .6 .8

Total $4.5 $9.7 $196.3 $113.9

Per basic share $.11 $.23 $4.67 $2.73

Steady growth and higher gross margin from incentive programs at New

Jersey Natural Gas (NJNG)

Strong results from NJR Energy Services (NJRES)

NJR Clean Energy Ventures (NJRCEV) places first wind project into service

3


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NJR Affirms Fiscal 2014 NFE Per Share Guidance $4.00 to $4.20

Fiscal 2014

5-15%

40-50% 35-45%

2-5% 3-10%

New Jersey Natural Gas NJR Energy Services NJR Clean Energy Ventures NJR Midstream NJR Home Services

NJR expects NJRES to contribute 35-45 percent of Fiscal 2014 Earnings

4


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Fiscal 2015-2017 Earnings Guidance

Most Recent Fiscal 2015

Fiscal 2014 through

Guidance Fiscal 2017

5-15%

60-70%

40-50% 35-45% 10-20%

5-15%

5-10%

2-5% 3-10%

2-5%

New Jersey Natural Gas NJR Clean Energy Ventures NJR Energy Services NJR Midstream NJR Home Services

NJR expects regulated businesses to contribute

65-80 percent of total NFE

5


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New Jersey Natural Gas – Our Core Business

Customer growth rate of 1.5 percent exceeds industry average

New construction market continues to expand Healthy mix of new construction and conversions

History of constructive regulatory relationships

Sharing of customer and investor benefits

21 consecutive years with fewest customer complaints with the New Jersey Board of Public Utilities (BPU) of major electric and gas companies

Infrastructure investments to strengthen distribution and transmission system are supported by regulatory riders

Rate case to be filed by mid-November 2015

6


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$1.4 Billion of Capital Drives Long-Term Growth

NJNG Capital Investment Estimates

2009-

2013 Immediate

($MM) Actual 2014E 2015E 2016E 2017E Total Return

Customer Growth $103.9 $28.0 $25.6 $25.5 $25.5 $208.5 Yes

Maintenance/Other 219.9 67.6 55.7 48.1 40.6 $431.9

AIP/SAFE 182.0 38.0 33.7 32.7 — $286.4 Yes

Superstorm Sandy 26.1 9.3 5.2 —— $40.6

NGV Fueling Stations 1.0 9.0 ——— $10.0 Yes

NJ RISE —— 7.5 13.5 27.6 $48.6 Yes

Liquefaction Project — 16.0 16.3 3.4 — $35.7

Southern Reliability —— 17.1 94.3 48.6 $160.0

SAVEGREEN 60.5 36.9 40.3 —— $137.7 Yes

Total $593.4 $204.8 $201.4 $217.5 $142.3 $1,359.4

Over 50 percent of capital expenditures are earning an immediate return

7


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Current NJNG Infrastructure Investments

SAFE (Safety Acceleration and Facility Enhancement Program)—$130 million over four years to replace 276 miles of cast iron and unprotected steel main Update: Invested $33.7 million, completed 145 miles of replacement pipe

NGV Fueling Stations—Total investment of about $10 million

Update:Various stages of development. All three CNG stations to be operational by end of calendar 2014

SAVEGREEN – Promotes customer investment in high-efficiency heating equipment; expanded to invest another $85 million Update: Spent $24.7 million for home energy audits, on bill repayments and grants

8


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9

Planned NJNG Infrastructure Capital Projects

NJ RISE (Reinvestment in System Enhancement)—$102.5 million

NJNG storm response plan filed with BPU on September 3, 2013 Additional pipe to barrier islands and excess flow valves Update: Approved by BPU on July 23, 2014

Liquefaction Project—$35.7 million

Liquefy natural gas for company peak-day use; reduces LNG transportation costs and creates customer savings Update: Equipment manufacturing began June 2014

Southern Reliability Link (SRL)—$130-$160 million

Adding high-pressure natural gas pipeline to support reliability, diversify supplier base and support growth in Ocean County Update: Evaluating route options

9


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NJRES: Generating Profits* Every Year Since 1995

10

Serves wholesale customers across North America Average tenure of employees is 10+ years Diverse portfolio of physical natural gas assets

Firm storage (46.6 Bcf in the US and Canada) Firm transportation (1.4 Bcf/day)

Services include:

Transporting natural gas

Selling storage gas during peak periods Asset management agreements Producer Services

Fee-based service; located primarily in the Marcellus

assets

$200

$180

$160

$140

$120

$100

MM $80

$

$60

$40

$20

$0

2009 2010 2011 2012 2013 FYTD

14

Margin NFE

Marcellus

* On an annual Net Financial Earnings basis


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NJR Clean Energy Ventures

11

Unique opportunity created in New Jersey

Energy policy drives renewable investment

Strong fundamentals for solar investments

Legislation supports solar investment

Growing Renewable Portfolio Standard (RPS)

Improving Solar Renewable Energy Certificates (SREC) fundamentals

Rising residential solar demand

Goal to diversify from New Jersey Solar

Solar Investment Tax Credits (ITCs) expected to decline to 10 percent in January 2017

Gradual decline in solar capital spending by 2017

$64 million of committed capital for wind projects

Long-term goal to maintain NJRCEV at 10 to 20 percent of NFE


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NJRCEV: Improving SREC Fundamentals

12

Capacity Additions By Month (MW)

85

6

SREC Prices By Month ($/SREC)

Karbone Bid Prices

New Jersey increased solar RPS effective June 2013

Solar construction activity has moderated

SREC prices increased 31 percent in Energy Year 2014

NJRCEV forecasts SREC production to grow from

approximately 65,000 in fiscal 2013 to 184,000 in fiscal 2017


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NJRCEV:Wind Strategy

13

Wind Value Drivers

29 states and the District of Columbia have RPS and wind remains the best economic alternative to meeting the standard Production-based tax credits (PTC) Long-term Power Purchase Agreements (PPAs) & PTCs provide annuity-like returns

Investment Status – Two Dot

9.7 MW, $22 million utility scale wind farm project located in Two Dot, MT In service, June 14, 2014

Investment Status – Carroll Area

20 farm MW, project $42 million located utility in Carroll scale County, wind IA NJRCEV Spring 2015 expects to begin operations,


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NJNG Results

14

($MM) Three Months Ended Nine Months Ended

June 30, June 30,

2014 2013 2014 2013

Gross Margin $55.3 $49.4 $254.7 $238.3

Operating Income $13.0 $10.3 $132.4 $124.4

Net Financial Earnings $4.9 $5.5 $79.6 $76.9

Total Customers 503,761 497,395 503,761 497,395

Added 5,151 new customers in first nine months of fiscal 2014

52 percent converted from other fuels

$24.7 million spent on The SAVEGREEN Project®

Basic Gas Supply Service (BGSS) incentive margin increased Natural Gas Vehicle (NGV) stations on track for 2014 opening


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NJNG: Strong Customer Growth Continues

15

5,151 new customers added through June 30, 2014

2,463 new construction customers 2,688 conversions from other fuels

8,000 7,175 6,783 6,704 7,456

7,000 6,189

5,841

6,000

5,000

4,000

3,000

2,000

1,000

0

FY08 FY09 FY10 FY11 FY12 FY13

New Construction Conversions

437 existing customer heat conversions

Over next two fiscal years, NJNG expects to add a total of 14,000-16,000 new customers


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Diversified and Growing Utility Gross Margin

16

$38.0

$40.0 $34.4

$35.0 $30.1

$30.0 $26.1

$25.0

millions $20.0 $15.6

$15.0

$

$10.0

$5.0

$0.0

FY13A FY14E FY15E FY16E FY17E

Customer Growth SAVEGREEN NGV BGSS Incentives

NJNG expects incremental utility gross margin to more than double by fiscal 2017


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NJRES Results

17

($MM) Three Months Ended Nine Months Ended

June 30, June 30,

2014 2013 2014 2013

Financial Margin ($ 8.1) $ 8.0 $171.2 $ 46.0

Net Financial Earnings ($ 8.6) $ 2.1 $90.2 $ 21.5

Gas Sold and Managed (Bcf) 127.0 152.7 469.1 458.0

Firm Transportation (Bcf/d) 1.4 1.2 1.4 1.2

Firm Storage (Bcf) 46.6 35.3 46.6 35.3

Extreme weather created dramatic increase in natural gas demand

Validated long-option strategy

Producer Services provides a relatively steady income stream NJRES expects to contribute 35 to 45 percent to fiscal 2014 NFE


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NJRCEV

18

($MM) Three Months Ended Nine Months Ended

June 30, June 30,

2014 2013 2014 2013

Operating Revenues $ 3.2 $2.6 $8.0 $7.2

ITC Impact $ 1.3 $0.3 $17.8 $13.1

Net Financial Earnings $ 3.9 (1.4) $20.3 $9.1

SRECs Generated 23,845 19,070 50,000 37,153

SRECs Sold 13,364 13,861 34,042 46,223

SREC Inventory 27,309 19,288 27,309 19,288

Solar Megawatts Installed 11.3 2.7 18.1 14.2

Solar Megawatts Under Construction 16.5 2.8 16.5 2.8

Forecast is to place $70 to $80 million of solar-related capital into service in fiscal 2014 NJR expects NJRCEV to contribute 5 to 15 percent to fiscal 2014 NFE


LOGO

 

NJR Will Continue to Meet Investor Expectations

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Invest significantly in NJNG’s infrastructure to support customer growth and enhance system reliability

Diversify and grow NJNG’s utility gross margin

Commit capital to clean energy portfolio

NJRES poised to benefit from natural gas market volatility

Deliver consistent net financial earnings and dividend growth

1 Year Total Return*

50.0%

45.0% 42.6%

40.0%

35.0%

30.0%

24.6%

25.0%

18.7%

20.0% 15.6%

15.0%

10.0%

5.0%

0.0%

NJR Peer Dow S&P 500

Group

* Assumes dividends reinvested, period 6/30/13 to 6/30/14