New Jersey Resources (NJR) Q4 2019 earnings summary

Executive summary

• Fiscal 2019 net financial earnings (NFE) were $175.0 million, or $1.96/share, within guidance of $1.95–$2.05/share; consolidated net income was $169.5 million.

• Customer base expanded 1.8% to 547,626, and residential natural-gas customer satisfaction ranked highest in the East among large utilities for a fifth consecutive year.

Financial highlights

• Revenue was $2.592 billion vs. $2.915 billion in FY18; net income was $169.5 million vs. $233.4 million, and diluted EPS was $1.89 vs. $2.64.

• Operating income was $153.9 million vs. $199.9 million; NFE was $175.0 million vs. $240.5 million, with the prior year including a $59.6 million Tax Act benefit.

• Operating cash flow was $189.4 million vs. $398.3 million, primarily reflecting lower Energy Services financial margin and higher working-capital needs.

• Dividends declared were $1.19/share; the annual dividend rate increased 6.8% to $1.25/share, marking the 26th increase in 24 years.

Outlook and guidance

• FY20–FY22 utility customer additions are projected at 28,000–30,000, expected to generate ~$5.5 million in annual utility gross margin under the current CIP tariff.

• FY20 solar projects placed in service are estimated at $125–$145 million; NJNG capital expenditures are projected at $445.3 million in FY20 and $311.6 million in FY21.

• FY20 PennEast expenditures are forecast at $3–$10 million; Adelphia-related FY20 expenditures are estimated at $270–$290 million, including purchase price and assuming closing.

• Existing borrowing availability, equity proceeds and operating cash flows were expected to cover working capital, capital expenditures and dividends for the next 12 months.