New Jersey Resources (NJR) Q4 2016 earnings summary

Executive summary

• FY16 revenue fell 3% YoY to $8.292B; excluding FX, acquisitions and divestitures, adjusted revenue was flat as digital real estate growth offset lower advertising revenue.

• Reported Total Segment EBITDA declined 28% to $684M, including $280M in one-time litigation costs and a $122M Zillow settlement gain; adjusted Total Segment EBITDA declined 4%.

• Digital Real Estate Services delivered strong growth and was positioned to become the largest EBITDA contributor over time; strategy emphasized digital distribution, mobile, video, data use and selective acquisitions.

Financial highlights

• FY16 revenue was $8.292B, down 3% YoY; the 53rd week added ~$112M, while FX reduced revenue by $455M.

• Net income attributable to shareholders was $179M versus a $147M loss in FY15; continuing-operations income was $235M versus $367M.

• Advertising revenue declined 5% to $3.644B; circulation and subscription revenue declined 1% to $2.569B; consumer revenue declined 1% to $1.578B.

• Operating cash flow from continuing operations was $952M versus $988M; free cash flow available to News Corporation was $610M versus $595M.

Outlook and guidance

• FY17 plans included further digital expansion and targeted cost reductions in News and Information Services; no formal operating-results projections were issued.

• Management expected Fox Sports advertising trends to remain more positive than the industry, supported by audience share and live sports; a dedicated NRL channel was planned for FY17.

• Move profitability was targeted to build in 2017 and beyond, excluding Zillow legal costs, alongside continued investment in realtor.com®.

• Approximately $25M of pension contributions and $10M of OPEB payments were anticipated for FY17.