Form 8-K NEW JERSEY RESOURCES For: Nov 21
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E-mailUNITED 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): November 21, 2017
NEW JERSEY RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey (State or other jurisdiction of incorporation) | 001-08359 (Commission File Number) | 22-2376465 (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:
[ ] 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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02 Results of Operations and Financial Condition.
On November 21, 2017, New Jersey Resources Corporation (“NJR”) issued a press release reporting financial results for the fourth quarter and fiscal year ended September 30, 2017 (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.
NJR will deliver a presentation to the financial community via live webcast on November 21, 2017, at 10 a.m. ET. The slides to be used for the presentation are furnished herewith as Exhibit 99.2 and are incorporated by reference into Item 7.01 of this Current Report on Form 8-K.
The information in Item 7.01 of this Current Report on Form 8-K 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.
(d) Exhibits.
Exhibit Number Exhibit
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: November 21, 2017 | By: | /s/ Patrick J. Migliaccio | ||
Patrick J. Migliaccio | ||||
Senior Vice President and Chief Financial Officer | ||||
EXHIBIT INDEX
Exhibit Number | Description |
99.1 | |
99.2 | |
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Date: November 21, 2017
Media Contact: Investor Contact:
Michael Kinney Dennis Puma
732-938-1031 732-938-1229
[email protected] [email protected]
NEW JERSEY RESOURCES REPORTS FISCAL 2017 RESULTS AND
ANNOUNCES FISCAL 2018 EARNINGS GUIDANCE
WALL, N.J. — Today, New Jersey Resources (NYSE: NJR) reported results for fiscal 2017. Key highlights for the fiscal
year include:
• Consolidated net income was $132.1 million, compared with $131.7 million in fiscal 2016.
• Consolidated net financial earnings (NFE), a non-GAAP financial measure, were $149.4 million, compared with
$138.1 million in fiscal 2016.
• Increased annual dividend rate by 6.9 percent to $1.09 per share.
• Higher base rates and customer growth led to 14.2 percent NFE growth at New Jersey Natural Gas (NJNG),
compared with fiscal 2016.
• Southern Reliability Link approved by New Jersey Pinelands Commission; the final regulatory milestone.
• NJR Clean Energy Ventures (NJRCEV), a leading solar provider in the state, completed five commercial
installations with a total capacity of 27.1 megawatts (MWs); strong demand for residential solar continues.
“New Jersey Resources delivered strong results in fiscal 2017, thanks to the efforts of our talented employees,”
said Laurence M. Downes, chairman and CEO of New Jersey Resources. “Our performance was primarily driven by
higher utility gross margin and customer growth, as well as strong contributions from our clean energy and
midstream segments.”
Fiscal 2017 net income totaled $132.1 million, or $1.53 per share, compared with $131.7 million, or $1.53 per
share, in fiscal 2016. Fiscal 2017 NFE totaled $149.4 million, or $1.73 per share, compared with $138.1 million, or
$1.61 per share, in fiscal 2016.
Net losses for the fourth quarter of fiscal 2017 totaled $36.5 million, or $(.42) per share, compared with net
income of $25.4 million, or $.30 per share, during the same period last year. Fourth-quarter fiscal 2017 net
financial losses totaled $12.5 million, or $(.14) per share, compared with a net financial loss of $2.1 million, or
$(.02) per share, during the same period last year.
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A reconciliation of net income to NFE for the three and twelve months ended September 30 of fiscal years 2017
and 2016, is provided below.
Three Months Ended Twelve Months Ended
September 30, September 30,
(Thousands) 2017 2016 2017 2016
Net (loss) income $ (36,523) $ 25,400 $ 132,065 $ 131,672
Add:
Unrealized loss (gain) on derivative instruments and
related transactions 31,293 (11,027) (11,241) 46,883
Tax effect (11,845) 4,003 4,062 (17,018)
Effects of economic hedging related to natural gas
inventory 8,878 (28,195) 38,470 (36,816)
Tax effect (2,887) 10,235 (13,964) 13,364
Net income to NFE tax adjustment (1,408) (2,475) — —
Net financial (loss) earnings $ (12,492) $ (2,059) $ 149,392 $ 138,085
Weighted Average Shares Outstanding
Basic 86,513 86,060 86,321 85,884
Diluted (GAAP basis) 86,513 86,940 87,144 86,731
Diluted (NFE basis) 86,513 86,060 87,144 86,731
Basic (loss) earnings per share $ (0.42) $ 0.30 $ 1.53 $ 1.53
Add:
Unrealized loss (gain) on derivative instruments and
related transactions 0.36 (0.13) (0.13) 0.55
Tax effect (0.13) 0.05 0.05 (0.20)
Effects of economic hedging related to natural gas
inventory 0.10 (0.33) 0.45 (0.43)
Tax effect (0.03) 0.12 (0.17) 0.16
Net income to NFE tax adjustment (0.02) (0.03) — —
Basic net financial (loss) earnings per share $ (0.14) $ (0.02) $ 1.73 $ 1.61
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, please see the
explanation below under “Non-GAAP Financial Information.”
A table summarizing our key performance metrics for the three and twelve months ended September 30 of fiscal
years 2017 and 2016, is provided below.
Three Months Ended Twelve Months Ended
September 30, September 30,
($ in Thousands) 2017 2016 2017 2016
Net (loss) income $ (36,523) $ 25,400 $ 132,065 $ 131,672
EPS $ (0.42) $ 0.30 $ 1.53 $ 1.53
NFE (12,492) (2,059) 149,392 138,085
Basic net financial (loss) per share $ (0.14) $ (0.02) $ 1.73 $ 1.61
NEW JERSEY RESOURCES REPORTS FISCAL 2017 RESULTS AND ANNOUNCES FISCAL 2018 EARNINGS GUIDANCE
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A table detailing NFE for the three and twelve months ended September 30 of fiscal years 2017 and 2016, is
provided below.
Three Months Ended Twelve Months Ended
September 30, September 30,
(Thousands) 2017 2016 2017 2016
Net financial (loss) earnings
New Jersey Natural Gas $ (9,602) $ (7,390) $ 86,930 $ 76,104
NJR Midstream 2,563 2,496 12,857 9,406
Subtotal Regulated (7,039) (4,894) 99,787 85,510
NJR Clean Energy Ventures (6,988) 6,495 24,873 28,393
NJR Energy Services (1,612) (5,651) 18,554 21,934
NJR Home Services and Other 3,266 2,220 6,811 2,882
Subtotal Non-Regulated (5,334) 3,064 50,238 53,209
Subtotal (12,373) (1,830) 150,025 138,719
Eliminations (119) (229) (633) (634)
Total $ (12,492) $ (2,059) $ 149,392 $ 138,085
NJR Announces Fiscal 2018 NFE Guidance:
NJR announced fiscal 2018 NFE guidance of $1.75 to $1.85 per share, subject to the risks and uncertainties
identified below under “Forward-Looking Statements.” NJR expects its regulated businesses to generate between
55 to 75 percent of total NFE, with NJNG continuing to be the largest contributor. The following chart represents
NJR’s current expected contributions from its subsidiaries for fiscal 2018:
Company
Expected Fiscal 2018
Net Financial Earnings Contribution
New Jersey Natural Gas 50 to 60 percent
NJR Midstream 5 to 15 percent
Total Regulated 55 to 75 percent
NJR Clean Energy Ventures 20 to 30 percent
NJR Energy Services 5 to 10 percent
NJR Home Services 1 to 3 percent
In providing fiscal 2018 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 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.
Regulated Business Update:
New Jersey Natural Gas
Reported fiscal 2017 NFE of $86.9 million compared with $76.1 million during the same period in fiscal 2016.
Strong results for the fiscal year were driven primarily by higher base rates and utility gross margin from new
customer additions. Net financial losses for the fourth quarter of fiscal 2017 and 2016 were $9.6 million and $7.4
million, respectively, and reflect the seasonal nature of the business.
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Customer Growth:
• Added, 9,126 new customers for the fiscal year — its highest total since 2006 — compared with 8,170 last
year; new customer additions contributed $5.5 million to annual utility gross margin.
• NJNG expects to invest approximately $40 million per year in capital expenditures to support new customer
growth through fiscal 2020. NJNG expects to add 26,000 to 28,000 new customers through fiscal 2020,
representing an annual growth rate of 1.7 percent and a cumulative increase in utility gross margin of
approximately $16 million through fiscal 2020. For more information on utility gross margin, please see
“Non-GAAP Financial Information” below.
Infrastructure Update:
The Southern Reliability Link (SRL) is a proposed 30-mile transmission pipeline designed to provide a secondary
interstate feed into the southern end of NJNG’s delivery system to enhance resiliency and supplier diversity.
• Approved by New Jersey Pinelands Commission on September 14, 2017; the final regulatory milestone.
• We are actively pursuing the remaining easements and road opening permits. Once approved, the
construction process will begin and the SRL is expected to be in-service in the first quarter of fiscal 2019.
New Jersey Reinvestment in System Enhancement (NJ RISE) Program is a five-year, $102.5 million investment
that began in 2014 to enhance system resiliency and improve NJNG's service disruption response capabilities.
• Completed the reconstruction of the Ship Bottom Regulator Station on Long Beach Island.
• Installation of a secondary natural gas distribution main in the northern section of the Seaside barrier island
in Ocean County, New Jersey has begun, along with improvements to the associated primary and backup
regulator stations.
• Two additional NJ RISE projects are in the permitting phase, with expected completion dates in fiscal 2019.
Safety Acceleration and Facilities Enhancement (SAFE) Program II is a five-year program designed to replace the
remaining 276 miles of unprotected steel main and associated services in NJNG’s distribution system. As a
condition of the New Jersey Board of Public Utilities' (BPU) approval, NJNG is required to file a base rate case no
later than November 2019.
• In fiscal 2017, $39.8 million was invested to replace 69.7 miles of unprotected steel main and services.
• NJNG earns an Allowance for Funds Used During Construction (AFUDC) on its invested capital during
construction, and requests base rate increases for the approved $157.5 million of SAFE II spending in annual
filings.
• BPU approved a $4.1 million base rate increase, effective October 1, 2017, to recover NJ RISE and SAFE II
capital investments for the period ending June 30, 2017.
Basic Gas Supply Service (BGSS) Incentive Programs:
• Contributed $13.7 million in fiscal 2017 to utility gross margin compared with $15 million during the same
period in fiscal 2016, reflecting a decrease in the value of capacity and lower volumes associated with the
capacity release program.
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Energy Efficiency:
• The SAVEGREEN Project®, NJNG’s energy-efficiency program, invested $13.1 million during fiscal 2017 in
grants and financing options designed to help customers with energy-efficiency upgrades for their homes
and businesses.
• Since inception in 2009, NJNG has invested nearly $150 million and is authorized to earn an overall return on
its investments, ranging from 6.69 to 7.76 percent, with a return on equity (ROE) that ranges from 9.75 to
10.3 percent.
NJR Midstream
Reported fiscal 2017 NFE of $12.9 million compared with $9.4 million during the same period in fiscal 2016. For
the three-month period ended September 30, 2017, NFE were $2.6 million, compared with $2.5 million during
the same period in fiscal 2016. The improved results were due primarily to AFUDC associated with the PennEast
Pipeline project.
• On October 27, 2017, Adelphia Gateway, LLC, a subsidiary of NJR, entered into an agreement with Talen
Generation LLC to acquire all of the membership interests in Interstate Energy Company LLC, which owns and
operates an existing 84-mile pipeline in southeastern Pennsylvania. The transaction is expected to close
following receipt of all of the necessary permits and regulatory actions, including those from the Federal
Energy Regulatory Commission (FERC) and the Pennsylvania Public Utility Commission.
• PennEast is awaiting final approval of its Certificate of Public Convenience and Necessity from FERC.
• Once the FERC certificate is received, the project will move quickly to secure the remaining permits and
reassess the project timeline. PennEast expects the project to be in service in 2019.
Non-Regulated Business Update:
NJR Clean Energy Ventures
Reported NFE of $24.9 million in fiscal 2017, compared with $28.4 million in fiscal 2016. During the three-month
period ended September 30, 2017, NJRCEV reported a net financial loss of $7 million, compared with NFE of $6.5
million during the same period in fiscal 2016. The quarterly results were due primarily to lower investment tax
credits (ITCs) driven by NJRCEV's decision to finance two of its commercial assets through a sale leaseback
arrangement, which is described below. Solar highlights include:
• Five commercial solar projects were placed into service, adding 27.1 MWs to its growing portfolio of solar
assets.
• The Sunlight Advantage® residential solar program added 1,300 new customers, compared with 1,123 during
the same period in fiscal 2016.
• Solar-related capital expenditures for projects eligible for ITCs during fiscal 2017 were $120.3 million, $87.5
million net of sale leaseback, compared with $85.6 million during fiscal 2016.
• Completed sale leaseback financing of two commercial solar asset projects totaling $32.9 million. Under the
sale leaseback financing, NJRCEV retains all Solar Renewable Energy Credits (SRECs) and proceeds from
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electricity sales while transferring the tax benefits associated with the ITCs and bonus depreciation to the
lessor.
NJR Energy Services (NJRES)
Reported NFE of $18.6 million in fiscal 2017 compared with $21.9 million during the same period in fiscal 2016.
Reported a net financial loss of $1.6 million in the fourth quarter of fiscal 2017, compared with a net financial
loss of $5.7 million during the same period in fiscal 2016.
• Lower results in fiscal 2017 were due primarily to fewer market opportunities related to transportation
assets and timing of certain transactions related to storage withdrawals, along with warmer-than-normal
weather during fiscal 2017.
Capital Expenditures and Cash Flows:
NJR is committed to maintaining a strong financial profile while continuing to invest capital in regulated and non-
regulated projects.
• NJR generated operating cash flows of $248 million in fiscal 2017, compared with $142.6 million during the
same period in fiscal 2016. The increase was attributed primarily to higher utility gross margin and lower
broker margin requirements, as well as a discretionary contribution of $30 million to NJR’s pension plan
during fiscal 2016 that did not recur in fiscal 2017.
• Fiscal 2017 capital expenditures were $326.8 million, of which $204.7 million were related to regulated
assets. For the fourth quarter of fiscal 2017, capital expenditures were $80.3 million, compared with $133.4
million during the same period in fiscal 2016.
• NJR reported aggregate capital expenditures of $410.8 million and dividend payments of $88 million for
fiscal 2017, of which $248.1 million was funded from operating cash flows, $32.9 million from sale leaseback
financing, $206.7 million from other proceeds from debt and $11.1 million from equity issuances.
Effective Tax Rate:
NJR’s annual effective tax rate decreased compared with the previous year. In fiscal 2017, $29.6 million related to
tax credits net of deferred taxes were recognized, compared with $27.3 million, in the same period last year.
For NFE purposes, the effective tax rate also decreased and NJR recognized $29.6 million in tax credits net of
deferred taxes. Further detail can be found in Note 13 “Income Taxes” within our 10-K filing.
Webcast Information:
NJR will host a live webcast to discuss its financial results today at 10 a.m. EST. A few minutes prior to the
webcast, go to njresources.com and select “Investor Relations,” then scroll down to the “Events & Presentations”
section and click on the webcast link.
Forward-Looking Statements:
This 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
NEW JERSEY RESOURCES REPORTS FISCAL 2017 RESULTS AND ANNOUNCES FISCAL 2018 EARNINGS GUIDANCE
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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 release include, but are not limited to,
certain statements regarding NJR’s NFE guidance for fiscal 2018, forecasted contribution of business segments to
fiscal 2018 NFE, future NJNG customer growth, future NJR capital expenditures and infrastructure investments,
NJRCEV’s ITC-eligible projects and demand for residential solar, SREC prices and electricity sales, future base rate
cases, earnings and dividend growth, the ability to close and successfully implement the Adelphia Gateway
acquisition, as well as the SRL and PennEast Pipeline projects.
The factors that could cause actual results to differ materially from NJR’s expectations include, but are not
limited to, risks associated with our investments in clean energy projects, including the availability of regulatory
and tax incentives, the availability of viable projects, our eligibility for ITCs and PTCs, the future market for SRECs
and electricity prices, and operational risks related to projects in service; the ability to obtain governmental and
regulatory approvals, land-use rights, electric grid connection (in the case of clean energy projects) and/or
financing for the construction, development and operation of our unregulated energy investments and NJNG’s
infrastructure projects in a timely manner; risks associated with acquisitions and the related integration of
acquired assets with our current operations; volatility of natural gas and other commodity prices and their
impact on NJNG customer usage, NJNG’s BGSS incentive programs, our Energy Services segment operations and
on our risk management efforts; the level and rate at which NJNG’s costs and expenses are incurred and the
extent to which they are approved for recovery from customers through the regulatory process, including
through future base rate case filings; the impact of a disallowance of recovery of environmental-related
expenditures and other regulatory changes; the performance of our subsidiaries; operating risks incidental to
handling, storing, transporting and providing customers with natural gas; access to adequate supplies of natural
gas and dependence on third-party storage and transportation facilities for natural gas supply; the regulatory
and pricing policies of federal and state regulatory agencies; timing of qualifying for ITCs and PTCs due to delays
or failures to complete planned solar and wind energy projects and the resulting effect on our effective tax rate
and earnings; the results of legal or administrative proceedings with respect to claims, rates, environmental
issues, gas cost prudence reviews and other matters; risks related to cyberattack or failure of information
technology systems; changes in rating agency requirements and/or credit ratings and their effect on availability
and cost of capital to our company; the ability to comply with current and future regulatory requirements; the
impact of volatility in the equity and credit markets on our access to capital; the impact to the asset values and
resulting higher costs and funding obligations of our pension and postemployment benefit plans as a result of
potential downturns in the financial markets, lower discount rates, revised actuarial assumptions or impacts
associated with the Patient Protection and Affordable Care Act; commercial and wholesale credit risks, including
the availability of creditworthy customers and counterparties, and liquidity in the wholesale energy trading
market; accounting effects and other risks associated with hedging activities and use of derivatives contracts; the
ability to optimize our physical assets; any potential need to record a valuation allowance for our deferred tax
assets; changes to tax laws and regulations; weather and economic conditions; the ability to comply with debt
covenants; demographic changes in NJR’s service territory and their effect on NJR’s customer growth; the impact
of natural disasters, terrorist activities and other extreme events on our operations and customers; the costs of
compliance with present and future environmental laws, including potential climate change-related legislation;
environmental-related and other uncertainties related to litigation or administrative proceedings; risks related to
our employee workforce; and risks associated with the management of our joint ventures and partnerships, and
investment in a master limited partnership. The aforementioned factors are detailed in the “Risk Factors”
sections of our Form 10-K that we filed with the Securities and Exchange Commission (SEC) on November 21,
2017, which is available on the SEC’s website at sec.gov. Information included in this release is representative as
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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 release includes the non-GAAP financial 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 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 (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, net of applicable tax adjustments as described below.
Volatility associated with the change in value of these financial instruments and physical commodity contracts is
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 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, expenses and other
taxes and regulatory rider expenses, which are key components of NJR’s operations that move in relation to each
other. Natural gas costs, sales, expenses 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 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 2017 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 over 7,400 miles of natural gas
transportation and distribution infrastructure to serve over half a million customers in New Jersey’s
Monmouth, Ocean and parts of Morris, Middlesex and Burlington counties.
• NJR Clean Energy Ventures invests in, owns and operates solar and onshore wind projects with a total
capacity of more than 315 megawatts, providing residential and commercial customers with low-carbon
solutions.
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• 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 Midstream serves customers from local distributors and producers to electric generators and wholesale
marketers through its 50 percent equity ownership in the Steckman Ridge natural gas storage facility and its
stake in Dominion Midstream Partners, L.P., as well as its 20 percent equity interest in the PennEast Pipeline
Project.
• NJR 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 more than 1,000 employees are committed to helping customers save energy and money by
promoting conservation and encouraging efficiency through Conserve to Preserve® and initiatives such as The
SAVEGREEN Project® and The Sunlight Advantage®.
For more information about NJR:
www.njresources.com.
Follow us on Twitter @NJNaturalGas.
“Like” us on facebook.com/NewJerseyNaturalGas.
Download our free NJR investor relations app for iPad, iPhone and Android.
NJR-E
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NEW JERSEY RESOURCES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Twelve Months Ended
September 30, September 30,
(Thousands, except per share data) 2017 2016 2017 2016
OPERATING REVENUES
Utility $ 93,173 $ 80,998 $ 695,637 $ 594,346
Nonutility 443,347 388,243 1,572,980 1,286,559
Total operating revenues 536,520 469,241 2,268,617 1,880,905
OPERATING EXPENSES
Gas purchases
Utility 37,798 30,295 258,687 205,034
Nonutility 431,509 308,820 1,436,740 1,139,301
Related parties 2,081 2,092 8,340 8,351
Operation and maintenance 66,173 57,596 226,356 208,421
Regulatory rider expenses 2,533 2,097 40,243 39,300
Depreciation and amortization 21,493 19,851 81,841 72,748
Energy and other taxes 6,984 6,010 49,366 40,215
Total operating expenses 568,571 426,761 2,101,573 1,713,370
OPERATING (LOSS) INCOME (32,051) 42,480 167,044 167,535
Other income, net 2,050 2,764 14,437 9,196
Interest expense, net 11,671 9,111 44,886 31,044
(LOSS) INCOME BEFORE INCOME TAXES AND
EQUITY IN EARNINGS OF AFFILIATES (41,672) 36,133 136,595 145,687
Income tax (benefit) provision (1,791) 13,183 18,343 23,530
Equity in earnings of affiliates 3,358 2,450 13,813 9,515
NET (LOSS) INCOME $ (36,523) $ 25,400 $ 132,065 $ 131,672
(LOSS) EARNINGS PER COMMON SHARE
Basic $ (0.42) $ 0.30 $ 1.53 $ 1.53
Diluted $ (0.42) $ 0.29 $ 1.52 $ 1.52
DIVIDENDS DECLARED PER COMMON SHARE $ 0.27 $ 0.26 $ 1.04 $ 0.98
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 86,513 86,060 86,321 85,884
Diluted 86,513 86,940 87,144 86,731
NEW JERSEY RESOURCES REPORTS FISCAL 2017 RESULTS AND ANNOUNCES FISCAL 2018 EARNINGS GUIDANCE
Page 11 of 15
RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES
Three Months Ended Twelve Months Ended
September 30, September 30,
(Thousands) 2017 2016 2017 2016
NEW JERSEY RESOURCES
A reconciliation of net income, the closest GAAP financial measurement, to net financial earnings, is as follows:
Net (loss) income $ (36,523) $ 25,400 $ 132,065 $ 131,672
Add:
Unrealized loss (gain) on derivative instruments and related
transactions 31,293 (11,027) (11,241) 46,883
Tax effect (11,845) 4,003 4,062 (17,018)
Effects of economic hedging related to natural gas inventory 8,878 (28,195) 38,470 (36,816)
Tax effect (2,887) 10,235 (13,964) 13,364
Net income to NFE tax adjustment (1,408) (2,475) — —
Net financial (loss) earnings $ (12,492) $ (2,059) $ 149,392 $ 138,085
Weighted Average Shares Outstanding
Basic 86,513 86,060 86,321 85,884
Diluted 86,513 86,060 87,144 86,731
A reconciliation of basic earnings per share, the closest GAAP financial measurement, to basic net financial earnings per
share, is as follows:
Basic (loss) earnings per share $ (0.42) $ 0.30 $ 1.53 $ 1.53
Add:
Unrealized loss (gain) on derivative instruments and related
transactions $ 0.36 $ (0.13) $ (0.13) $ 0.55
Tax effect $ (0.13) $ 0.05 $ 0.05 $ (0.20)
Effects of economic hedging related to natural gas inventory $ 0.10 $ (0.33) $ 0.45 $ (0.43)
Tax effect $ (0.03) $ 0.12 $ (0.17) $ 0.16
Net income to NFE tax adjustment $ (0.02) $ (0.03) $ — $ —
Basic NFE per share $ (0.14) $ (0.02) $ 1.73 $ 1.61
NATURAL GAS DISTRIBUTION
A reconciliation of operating revenue, the closest GAAP financial measurement, to utility gross margin is as follows:
Operating revenues $ 93,173 $ 80,998 $ 695,637 $ 594,346
Less:
Gas purchases 40,123 33,003 269,480 215,849
Energy and other taxes 4,121 3,566 37,917 29,832
Regulatory rider expense 2,533 2,097 40,243 39,300
Utility gross margin $ 46,396 $ 42,332 $ 347,997 $ 309,365
NEW JERSEY RESOURCES REPORTS FISCAL 2017 RESULTS AND ANNOUNCES FISCAL 2018 EARNINGS GUIDANCE
Page 12 of 15
Three Months Ended Twelve Months Ended
September 30, September 30,
(Thousands) 2017 2016 2017 2016
CLEAN ENERGY VENTURES
A reconciliation of net income to net financial earnings, is as follows:
Net (loss) income $ (5,580) $ 8,970 $ 24,873 $ 28,393
Add:
Net income to NFE tax adjustment (1,408) (2,475) — —
Net financial earnings $ (6,988) $ 6,495 $ 24,873 $ 28,393
NJR ENERGY SERVICES
The following table is a computation of financial margin:
Operating revenues $ 398,074 $ 348,295 $ 1,462,681 $ 1,197,253
Less: Gas purchases 432,635 309,975 1,441,310 1,153,911
Add:
Unrealized loss (gain) on derivative instruments and related
transactions 31,598 (11,703) (10,063) 48,855
Effects of economic hedging related to natural gas inventory 8,878 (28,195) 38,470 (36,816)
Financial margin $ 5,915 $ (1,578) $ 49,778 $ 55,381
A reconciliation of operating income, the closest GAAP financial measurement, to financial margin is as follows:
Operating (loss) income $ (41,711) $ 31,208 $ (793) $ 22,292
Add:
Operation and maintenance expense 6,485 6,862 20,313 20,025
Depreciation and amortization 14 19 63 88
Other taxes 651 231 1,788 937
Subtotal (34,561) 38,320 21,371 43,342
Add:
Unrealized loss (gain) on derivative instruments and related
transactions 31,598 (11,703) (10,063) 48,855
Effects of economic hedging related to natural gas inventory 8,878 (28,195) 38,470 (36,816)
Financial margin $ 5,915 $ (1,578) $ 49,778 $ 55,381
A reconciliation of net income to net financial earnings, is as follows:
Net (loss) income $ (27,241) $ 19,764 $ 476 $ 14,265
Add:
Unrealized loss (gain) on derivative instruments and related
transactions 31,598 (11,703) (10,063) 48,855
Tax effect (11,960) 4,248 3,635 (17,734)
Effects of economic hedging related to natural gas, net of taxes 8,878 (28,195) 38,470 (36,816)
Tax effect (2,887) 10,235 (13,964) 13,364
Net financial (loss) earnings $ (1,612) $ (5,651) $ 18,554 $ 21,934
NEW JERSEY RESOURCES REPORTS FISCAL 2017 RESULTS AND ANNOUNCES FISCAL 2018 EARNINGS GUIDANCE
Page 13 of 15
Three Months Ended Twelve Months Ended
September 30, September 30,
(Thousands, except per share data) 2017 2016 2017 2016
NEW JERSEY RESOURCES
Operating Revenues
Natural Gas Distribution $ 93,173 $ 80,998 $ 695,637 $ 594,346
Clean Energy Ventures 28,969 25,381 64,394 53,540
Energy Services 398,074 348,295 1,462,681 1,197,253
Midstream — — — —
Home Services and Other 16,673 16,585 49,591 48,497
Sub-total 536,889 471,259 2,272,303 1,893,636
Eliminations (369) (2,018) (3,686) (12,731)
Total $ 536,520 $ 469,241 $ 2,268,617 $ 1,880,905
Operating (Loss) Income
Natural Gas Distribution $ (8,043) $ (5,937) $ 151,641 $ 126,233
Clean Energy Ventures 12,539 12,656 7,903 9,772
Energy Services (41,711) 31,208 (793) 22,292
Midstream (1,565) (358) (2,322) (1,243)
Home Services and Other 5,179 4,459 4,611 3,633
Sub-total (33,601) 42,028 161,040 160,687
Eliminations 1,550 452 6,004 6,848
Total $ (32,051) $ 42,480 $ 167,044 $ 167,535
Equity in Earnings of Affiliates
Midstream $ 4,298 $ 3,524 $ 17,797 $ 13,936
Eliminations (940) (1,074) (3,984) (4,421)
Total $ 3,358 $ 2,450 $ 13,813 $ 9,515
Net (loss) income
Natural Gas Distribution $ (9,602) $ (7,390) $ 86,930 $ 76,104
Clean Energy Ventures (5,580) 8,970 24,873 28,393
Energy Services (27,241) 19,764 476 14,265
Midstream 2,563 2,496 12,857 9,406
Home Services and Other 3,266 2,220 6,811 2,882
Sub-total (36,594) 26,060 131,947 131,050
Eliminations 71 (660) 118 622
Total $ (36,523) $ 25,400 $ 132,065 $ 131,672
Net financial (loss) earnings
Natural Gas Distribution $ (9,602) $ (7,390) $ 86,930 $ 76,104
Clean Energy Ventures (6,988) 6,495 24,873 28,393
Energy Services (1,612) (5,651) 18,554 21,934
Midstream 2,563 2,496 12,857 9,406
Home Services and Other 3,266 2,220 6,811 2,882
Sub-total (12,373) (1,830) 150,025 138,719
Eliminations (119) (229) (633) (634)
Total $ (12,492) $ (2,059) $ 149,392 $ 138,085
Throughput (Bcf)
NJNG, Core Customers 24.1 23.9 118.8 119.8
NJNG, Off System/Capacity Management 48.6 54.4 178.4 216.7
NJRES Fuel Mgmt. and Wholesale Sales 160.8 140.7 521.6 551.1
Total 233.5 219.0 818.8 887.6
Common Stock Data
Yield at Sept. 30 2.6% 3.1% 2.6% 3.1%
Market Price
High $ 44.30 $ 38.92 $ 44.30 $ 38.92
Low $ 39.50 $ 32.27 $ 30.46 $ 28.02
Close at Sept. 30 $ 42.15 $ 32.86 $ 42.15 $ 32.86
Shares Out. at Sept. 30 86,556 86,086 86,556 86,086
Market Cap. at Sept. 30 $ 3,648,315 $ 2,828,798 $ 3,648,315 $ 2,828,798
NEW JERSEY RESOURCES REPORTS FISCAL 2017 RESULTS AND ANNOUNCES FISCAL 2018 EARNINGS GUIDANCE
Page 14 of 15
Three Months Ended Twelve Months Ended
(Unaudited) September 30, September 30,
(Thousands, except customer and weather data) 2017 2016 2017 2016
NATURAL GAS DISTRIBUTION
Utility Gross Margin
Operating revenues $ 93,173 $ 80,998 $ 695,637 $ 594,346
Less:
Gas purchases 40,123 33,003 269,480 215,849
Energy and other taxes 4,121 3,566 37,917 29,832
Regulatory rider expense 2,533 2,097 40,243 39,300
Total Utility Gross Margin $ 46,396 $ 42,332 $ 347,997 $ 309,365
Utility Gross Margin, Operating Income and Net Income
Residential $ 24,159 $ 22,271 $ 218,093 $ 187,762
Commercial, Industrial & Other 7,353 6,839 51,510 46,878
Firm Transportation 9,314 8,737 58,172 54,841
Total Firm Margin 40,826 37,847 327,775 289,481
Interruptible 1,954 1,223 6,498 4,906
Total System Margin 42,780 39,070 334,273 294,387
Off System/Capacity Management/FRM/Storage Incentive 3,616 3,262 13,724 14,978
Total Utility Gross Margin 46,396 42,332 347,997 309,365
Operation and maintenance expense 40,716 34,453 142,509 130,575
Depreciation and amortization 12,629 12,695 49,347 47,828
Other taxes not reflected in gross margin 1,094 1,121 4,500 4,729
Operating (Loss) Income $ (8,043) $ (5,937) $ 151,641 $ 126,233
Net (Loss) Income $ (9,602) $ (7,390) $ 86,930 $ 76,104
Throughput (Bcf)
Residential 3.0 2.6 40.7 36.9
Commercial, Industrial & Other 0.8 0.6 8.7 7.3
Firm Transportation 1.7 1.7 14.4 14.1
Total Firm Throughput 5.5 4.9 63.8 58.3
Interruptible 18.6 19.0 55.0 61.5
Total System Throughput 24.1 23.9 118.8 119.8
Off System/Capacity Management 48.6 54.4 178.4 216.7
Total Throughput 72.7 78.3 297.2 336.5
Customers
Residential 460,013 448,273 460,013 448,273
Commercial, Industrial & Other 26,947 26,218 26,947 26,218
Firm Transportation 42,790 46,608 42,790 46,608
Total Firm Customers 529,750 521,099 529,750 521,099
Interruptible 33 34 33 34
Total System Customers 529,783 521,133 529,783 521,133
Off System/Capacity Management* 27 30 27 30
Total Customers 529,810 521,163 529,810 521,163
*The number of customers represents those active during the last month of the period.
Degree Days
Actual 24 17 4,129 3,867
Normal 33 35 4,589 4,689
Percent of Normal 72.7% 48.6% 90.0% 82.5%
NEW JERSEY RESOURCES REPORTS FISCAL 2017 RESULTS AND ANNOUNCES FISCAL 2018 EARNINGS GUIDANCE
Page 15 of 15
Three Months Ended Twelve Months Ended
(Unaudited) September 30, September 30,
(Thousands, except customer, SREC and megawatt) 2017 2016 2017 2016
CLEAN ENERGY VENTURES
Operating Revenues
SREC sales $ 22,644 $ 20,216 $ 40,453 $ 36,243
Wind electricity sales and other 2,722 2,337 12,953 8,747
Solar electricity sales and other 1,849 1,460 4,833 3,867
Sunlight Advantage 1,755 1,367 6,155 4,683
Total Operating Revenues $ 28,970 $ 25,380 $ 64,394 $ 53,540
Depreciation and Amortization $ 8,716 $ 6,915 $ 31,834 $ 23,971
Operating Income $ 12,539 $ 12,656 $ 7,903 $ 9,772
Income Tax (Provision) Benefit $ (13,604) $ (1,841) $ 31,161 $ 26,592
Net (Loss) Income $ (5,580) $ 8,970 $ 24,873 $ 28,393
Net Financial (Loss) Earnings $ (6,988) $ 6,495 $ 24,873 $ 28,393
Solar Renewable Energy Certificates Generated 71,791 59,011 197,521 160,009
Solar Renewable Energy Certificates Sold 96,630 92,708 173,299 169,077
Solar Megawatts Eligible for ITCs 7.6 15.8 39.5 32.2
Solar Megawatts Under Construction 11.2 0.7 11.2 0.7
Wind Megawatts Installed/Acquired — 6.3 39.9 57.0
Wind Megawatts Under Construction — 39.9 — 39.9
ENERGY SERVICES
Operating Income
Operating revenues $ 398,074 $ 348,295 $ 1,462,681 $ 1,197,253
Less:
Gas purchases 432,635 309,975 1,441,310 1,153,911
Operation and maintenance expense 6,485 6,862 20,313 20,025
Depreciation and amortization 14 19 63 88
Energy and other taxes 651 231 1,788 937
Operating (Loss) Income $ (41,711) $ 31,208 $ (793) $ 22,292
Net (Loss) Income $ (27,241) $ 19,764 $ 476 $ 14,265
Financial Margin $ 5,915 $ (1,578) $ 49,778 $ 55,381
Net Financial (Loss) Earnings $ (1,612) $ (5,651) $ 18,554 $ 21,934
Gas Sold and Managed (Bcf) 160.8 140.7 521.6 551.1
MIDSTREAM
Equity in Earnings of Affiliates $ 4,298 $ 3,524 $ 17,797 $ 13,936
Other Income $ 1,169 $ 848 $ 4,162 $ 3,130
Income Tax Provision $ 1,060 $ 1,459 $ 5,820 $ 6,130
Net Income $ 2,563 $ 2,496 $ 12,857 $ 9,406
HOME SERVICES AND OTHER
Operating Revenues $ 16,673 $ 16,585 $ 49,591 $ 48,497
Operating Income $ 5,179 $ 4,459 $ 4,611 $ 3,633
Other Income, Net $ 366 $ 266 $ 6,467 $ 869
Net Income $ 3,266 $ 2,220 $ 6,811 $ 2,882
Total Service Contract Customers at September 30 111,847 113,791 111,847 113,791
Fourth Quarter Fiscal 2017 Update
November 21, 2017
2
Forward-Looking Statements
This presentation 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 presentation include, but are not limited to, certain statements regarding NJR’s NFE guidance for
fiscal 2018, forecasted contribution of business segments to fiscal 2018 NFE, future NJNG customer growth, future NJR capital expenditures and infrastructure
investments, NJRCEV’s ITC-eligible projects and demand for residential solar, SREC prices and electricity sales future base rate cases, earnings and dividend
growth, the ability to close and successfully implement the Adelphia Gateway acquisition, as well as the SRL and PennEast Pipeline projects.
The factors that could cause actual results to differ materially from NJR’s expectations include, but are not limited to, risks associated with our investments in
clean energy projects, including the availability of regulatory and tax incentives, the availability of viable projects, our eligibility for ITCs and PTCs, the future
market for SRECs and electricity prices, and operational risks related to projects in service; the ability to obtain governmental and regulatory approvals, land-use
rights, electric grid connection (in the case of clean energy projects) and/or financing for the construction, development and operation of our unregulated energy
investments and NJNG’s infrastructure projects in a timely manner; risks associated with acquisitions and the related integration of acquired assets with our
current operations; volatility of natural gas and other commodity prices and their impact on NJNG customer usage, NJNG’s BGSS incentive programs, our Energy
Services segment operations and on our risk management efforts; the level and rate at which NJNG’s costs and expenses are incurred and the extent to which
they are approved for recovery from customers through the regulatory process, including through future base rate case filings; the impact of a disallowance of
recovery of environmental-related expenditures and other regulatory changes; the performance of our subsidiaries; operating risks incidental to handling, storing,
transporting and providing customers with natural gas; access to adequate supplies of natural gas and dependence on third-party storage and transportation
facilities for natural gas supply; the regulatory and pricing policies of federal and state regulatory agencies; timing of qualifying for ITCs and PTCs due to delays or
failures to complete planned solar and wind energy projects and the resulting effect on our effective tax rate and earnings; the results of legal or administrative
proceedings with respect to claims, rates, environmental issues, gas cost prudence reviews and other matters; risks related to cyberattack or failure of information
technology systems; changes in rating agency requirements and/or credit ratings and their effect on availability and cost of capital to our company; the ability to
comply with current and future regulatory requirements; the impact of volatility in the equity and credit markets on our access to capital; the impact to the asset
values and resulting higher costs and funding obligations of our pension and postemployment benefit plans as a result of potential downturns in the financial
markets, lower discount rates, revised actuarial assumptions or impacts associated with the Patient Protection and Affordable Care Act; commercial and
wholesale credit risks, including the availability of creditworthy customers and counterparties, and liquidity in the wholesale energy trading market; accounting
effects and other risks associated with hedging activities and use of derivatives contracts; the ability to optimize our physical assets; any potential need to record
a valuation allowance for our deferred tax assets; changes to tax laws and regulations; weather and economic conditions; the ability to comply with debt
covenants; demographic changes in NJR’s service territory and their effect on NJR’s customer growth; the impact of natural disasters, terrorist activities and other
extreme events on our operations and customers; the costs of compliance with present and future environmental laws, including potential climate change-related
legislation; environmental-related and other uncertainties related to litigation or administrative proceedings; risks related to our employee workforce; and risks
associated with the management of our joint ventures and partnerships, and investment in a master limited partnership. The aforementioned factors are detailed
in the “Risk Factors” sections of our Form 10-K that we filed with the Securities and Exchange Commission (SEC) on November 21, 2017, which is available on
the SEC’s website at sec.gov. Information included in this 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.
.
3
Non-GAAP Financial Measures
This presentation includes the non-GAAP measure, NFE. As an indicator of the Company’s operating performance, this measure should not be considered an
alternative to, or more meaningful than, GAAP measures, such as cash flow, net income, operating income or earnings per share.
NFE excludes 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, net of applicable tax adjustments, as described below. 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. 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.
Management uses NFE as a supplemental measure to other GAAP results to provide a more complete understanding of the Company’s performance.
Management believes this non-GAAP measure is more reflective of the Company’s business model, provides transparency to investors and enables
period-to-period comparability of financial performance. In providing fiscal 2018 earnings guidance, management is aware that 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 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. For a full discussion of our non-
GAAP financial measures, please see NJR’s most recent Form 10-K, Item 7. This information has been provided pursuant to the requirements of SEC
Regulation G.
4
Fiscal 2017 Accomplishments
Financial
Performance
• Fiscal 2017 NFE per share of $1.73* compared with $1.61 last year, an
increase of 7.5 percent; met guidance of $1.65-$1.75 per share
• Segment contributions met expectations
• Strong customer and utility gross margin growth at NJNG
• 16 percent increase in residential solar customers at NJRCEV
• NJRES acquired marketing business from Talen Energy
• Southern Reliability Link moving forward
• PennEast projects received final EIS and submitted N.J. DEP application
• Placed five commercial solar projects in service; 131 MW of total
installed capacity
• Annual dividend rate per share increased 6.9 percent
• 22nd consecutive year of dividend growth
• One-year total return of 31.7 percent** vs. PGA of 15.8 percent**
Infrastructure
Highlights
Customer
Growth
Attractive
Dividend and
Return
* A reconciliation from NFE to net income is set forth in the Appendix on Slide 18.
** Assumes dividends reinvested.
PGA – Peer Group Average.
5
Annual Dividend Growth Goal of 6 to 8 Percent
• 6.9 percent increase to current $1.09 annual rate approved on September 12, 2017
• 24th dividend increase in past last 22 years
• Dividend payout ratio goal of 60 to 65 percent
$.77 $.81
$.86
$.92
$.96 $1.02
$1.09*
0%
10%
20%
30%
40%
50%
60%
70%
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
2012 2013 2014 2015 2016 2017 2018E
Pa
yo
ut
R
at
io
D
iv
id
en
d
s
Dividends and Payout
Ind. Div Rate Payout
* Dividend payout ratio based on midpoint of NFE guidance.
Dividend Strategy Supported By NFE Growth
6
What is Ahead for Fiscal 2018?
• Fiscal 2018 NFE guidance set at $1.75-$1.85 per share
• Long-term NFEPS growth rate of 5 to 9 percent
• A new administration in New Jersey
• Energy infrastructure projects move forward: SRL, PennEast,
Adelphia Gateway
SRL: Remaining road opening permits and approvals
PennEast received final EIS and anticipates receiving its
Certificate of Public Convenience and Necessity from FERC
in the near term
Agreement signed to acquire IEC pipeline from Talen Energy
7
55-75 percent of 2018 NFE Expected to be
Generated from Regulated Businesses
Projected Diversified Sources of Fiscal 2018 NFE
New Jersey
Natural Gas
50-60%
NJR
Midstream
5-15%
NJR Energy
Services
5-10%
NJR Home
Services/
Other
1-3%
NJR Clean
Energy
Ventures
20-30%
Regulated
businesses
8
Adelphia Gateway Project is a Strategic Fit for NJR
• Converts an existing oil pipeline to natural gas
• Utilizes existing infrastructure, brownfield
locations and rights-of-way
— No anticipated impacts to wetlands or
farmland
— Minimal impact on the environment
• Creates new gas supply to constrained
markets through increased delivery
connections
— Utility customers
— Natural gas-powered generation
— Industrial and commercial customers
• Offers opportunity to serve new demand
• Supports economic growth and job creation
9
Growth and Value Drivers at New Jersey Natural Gas
• Strategic Value
—Attractive service territory
—Constructive regulation
—Regulatory incentives
—Infrastructure investments
• Disciplined Execution
—Safe, reliable service
—High customer satisfaction
• Growth Opportunities
—Growing customer base
—Annual recovery of infrastructure
expenditures
—Investment in rate base projects
Morris
• Parsippany
NEW YORK
CITY
Monmouth
• Asbury Park
Ocean
• Toms River
Burlington
PHILADELPHIA
10
SREC Hedging Status
Pct. Hedged: 97% 85% 29%
Average Price: $222 $190 $174
Current Price (EY): $203 $201 $193
As of November 16, 2017. Source: InterContinental Exchange (ICE)
213 223
76
-
40
80
120
160
200
240
280
320
EY18 EY19 EY20
Th
ou
sa
nd
s
of
S
RE
Cs
Energy Year - Operational & Under Construction Facilities
Hedged Forecasted Sales
220
265263
NJRCEV mitigates price risk through a hedging program to
stabilize revenue
11
Fiscal 2017 Fourth Quarter and Year-to-Date NFE Bridge
$4.1
-$12.5
-$2.1
-$2.2
$.1
-$13.5
$1.1
-$25.0
-$20.0
-$15.0
-$10.0
-$5.0
$0.0
$5.0
$10.0
September 30, 2016 NJNG NJR Midstream NJRCEV NJRES HS/Other September 30, 2017
M
ill
io
ns
Three Months Ended September 30, 2017
Higher O&M
AFUDC from
PennEast
Additional sales
due to acquisition
of Talen assets
Change in
effective tax rate
due to sale
leaseback
$149.4
-$3.3
$138.1
$10.8
$3.5
-$3.5
$3.8
$100.0
$110.0
$120.0
$130.0
$140.0
$150.0
$160.0
$170.0
September 30, 2016 NJNG NJR Midstream NJRCEV NJRES HS/Other September 30, 2017
M
ill
io
ns
Twelve Months Ended September 30, 2017
Higher base
rates and
customer
growth
AFUDC from
PennEast
Change in
effective tax
rate due to sale
leaseback
Fewer market
opportunities due
to weather
Higher SREC
prices and more
SRECs
Variances are after tax
12
Our Solar Sale-Leaseback Transaction
• In late fiscal 2017, NJRCEV completed a seven-year, sale leaseback
transaction of new solar assets at Pemberton (II) and Princeton
totaling 13 MW for $32.9 million
• Structure and Benefits
– NJR retains all revenue benefits of the solar farm including SRECs and
electricity sales
– Monetize tax benefits of ITC and bonus depreciation through transfer to
Lessor
– Creates NPV cash flow benefits
– Mitigates NOL/ITC/PTC carryforward
13
NJR Capital Plan
($MM)
2017A 2018E
2019E-2021E
Average
2018-2021
Total
New Customer $39.3 $38.5 $41.0 $161.5
Maintenance 41.9 108.1 93.8 389.6
Cost of Removal/Other 44.1 57.1 22.0 123.1
SAFE II 39.8 35.9 39.3 153.8
NJ RISE 8.7 28.2 8.0 52.2
SRL** 3.8 132.0 30.2 162.2
Total NJNG $177.6 $399.8 $234.3 $1,042.4
PennEast** $27.1 $34.8 $153.7 $188.5
Adelphia Gateway** 0.0 10.0 290.0 300.0
Midstream $27.1 $44.8 $443.7 $488.5
Residential Solar $37.9 $41.5 $45.6 $178.3
Commercial Solar 51.3 52.0 67.9 255.7
Subtotal $89.2 $93.5 $113.5 $434.0
Sale leaseback Solar** $31.1 $43.8 $21.4 $65.2
Total NJRCEV * $120.3 $137.3 $134.9 $499.2
NJRES (Talen Marketing) $55.7
GRAND TOTAL $380.7 $581.9 $812.9 $2,030.1
As of September 30, 2017
* Based on projects qualifying for federal tax credits.
** Capital spending beyond Fiscal 2018 occurs in Fiscal 2019 only (no average).
14
NJR Sources and Uses of Capital
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
$700.0
$800.0
$900.0
$1,000.0
Sources Uses Sources Uses Sources Uses
M
ill
io
ns
Cash Flows
LT Debt Equity CFFO Capex Dividends
Capital Plan Supports Infrastructure Investments,
While Maintaining Strong Balance Sheet
2017A 2018E 2019E
15
Effects of Hypothetical Corporate Tax Rate Reduction on NJR
Income Statement EPS Impact
NJNG net income* Flat
Non-regulated net income Annual Increase
Revaluation of net deferred tax liabilities, non-regulated One-Time Increase
Balance Sheet Balance Sheet Impact
Equity
(Impact of one-time revaluation of non-regulated deferred tax
liabilities + earnings increase)
Increase
Net deferred tax liabilities Decrease
Other Impact
Tax Appetite Decrease
* Assumes similar treatment as in 1986 corporate tax reduction.
16
Our Path to Future Growth
Fiscal 2017
NJNG
Base rate case completed
Customer growth
CIP
BGSS incentives
SAFE
SAVEGREEN
NJ RISE
SRL Pinelands approval
Clean Energy
Continued solar and
wind investment
More SRECs
Ringer Hill wind farm in
service
Midstream
PennEast received EIS
FERC Quorum
Energy Services
Physical natural gas
services
Fiscal 2018
NJNG
SAFE II commences
NJ RISE expenditures
increase
Base rate case filing
preparation
Clean Energy
Solar investments
continue
More SRECs
Midstream
PennEast FERC final
approval expected
Adelphia Gateway
pipeline
acquisition/conversion
Fiscal 2019
NJNG
SRL in service
SAFE II continues
NJ RISE expenditures
increase
Base rate case filing
Clean Energy
Solar investments
continue
More SRECs
Midstream
PennEast
Adelphia Gateway
Fiscal 2020
NJNG
New Infrastructure
programs
Clean Energy
Solar investments
continue
More SRECs
Midstream
PennEast
Adelphia Gateway
As of November 21, 2017
17
APPENDIX
18
Reconciliation to Non-GAAP Measures
A reconciliation of NFE for the three and twelve months ended September 30, 2017 and 2016 to net income is provided below:
19
NJR Projected Cash Flows
$MM 2017A 2018E 2019E
Cash Flow from Operations $248.1 $337.0 $307.4
Uses of Funds
Capital expenditures - NJNG/other ($178.7) ($399.8) ($236.3)
Capital expenditures - PennEast (27.1) (34.8) (153.7)
Capital expenditures - NJRCEV (149.4) (137.2) (135.2)
Capital expenditures - Adelphia - (10.0) (290.0)
Capital expenditures - Talen Marketing (55.7) - -
Dividends (88.0) (94.1) (102.2)
Total Uses of Funds ($498.9) ($675.9) ($917.4)
Financing Activities
Common stock proceeds, net $11.1 $83.0 $163.0
Debt proceeds/other* 239.6 255.9 447.0
Total Financing Activities $250.7 $338.9 $610.0
As of September 30, 2017
* Includes sale leaseback and PennEast project finance.
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