New Jersey Resources Reports Fiscal 2022 Fourth-Quarter and Year End Results

Introduces Fiscal 2023 Guidance and Maintains its Long-term Projected Growth Rate

Today, New Jersey Resources Corporation (NYSE:NJR) reported results for the fourth quarter and year ended fiscal 2022. Highlights include:

• Consolidated net income of $274.9 million for fiscal 2022, compared with net income of $117.9 million in fiscal 2021
• Consolidated net financial earnings (NFE), a non-GAAP financial measure, of $240.3 million for fiscal 2022, or $2.50 per share, compared to NFE of $207.7 million, or $2.16 per share, in fiscal 2021
• Achieves highest end of previously provided $2.40 to $2.50 guidance range, which was raised twice during fiscal 2022 due to strong performance across its portfolio of energy infrastructure businesses, including New Jersey Natural Gas Company (NJNG)
• Increased fiscal 2023 annual dividend by 7.6 percent to $1.56 per share
• Completed construction and placed Adelphia Gateway pipeline into service

Outlook for Fiscal 2023

• Introduces fiscal 2023 net financial earnings per share (NFEPS) guidance range of $2.42 to $2.52
• Maintains long-term projected NFEPS growth rate of 7 to 9 percent⁽¹⁾

Fourth-quarter fiscal 2022 net income totaled $54.5 million, or $0.57 per share, compared with a net loss of $(1.1) million, or $(0.01) per share, during the same period in fiscal 2021. Fiscal 2022 net income totaled $274.9 million, or $2.86 per share, compared with $117.9 million, or $1.23 per share, in fiscal 2021.

Fourth-quarter fiscal 2022 NFE totaled $47.9 million, or $0.50 per share, compared to NFE of $6.6 million, or $0.07 per share, during the same period in fiscal 2021. Fiscal 2022 NFE totaled $240.3 million, or $2.50 per share, compared with $207.7 million, or $2.16 per share in fiscal 2021.

Steve Westhoven, President and CEO, stated, "Fiscal 2022 was an outstanding year for NJR. We took advantage of tightening energy markets across our complementary portfolio of businesses, allowing us to raise guidance two times during the fiscal year. We also made progress in executing our strategic growth objectives, highlighted by placing the Adelphia Gateway pipeline into service. This represented an important milestone for our company, and will help provide reliable energy to a capacity constrained region, which includes the Philadelphia metro area."

Key Performance Metrics

⁽¹⁾ NFEPS long-term annual growth projections are based on the midpoint of the $2.20 - $2.30 initial guidance range for fiscal 2022, provided on February 1, 2021

A reconciliation of net income to NFE for the three and twelve months ended September 30, 2022 and 2021, is provided below.

NFE is a measure of earnings based on the elimination of timing differences to effectively match the earnings effects of the economic hedges with the physical sale of natural gas, Solar Renewable Energy Certificates (SRECs) and foreign currency contracts. Consequently, to reconcile net income and NFE, current-period unrealized gains and losses on the derivatives are excluded from NFE as a reconciling item. Realized derivative gains and losses are also included in current-period net income. However, NFE includes only realized gains and losses related to natural gas sold out of inventory, effectively matching the full earnings effects of the derivatives with realized margins on physical natural gas flows. NFE also excludes certain transactions associated with equity method investments, including impairment charges, which are non-cash charges, and return of capital in excess of the carrying value of our investment. These are not indicative of the Company's performance for its ongoing operations. Included in the tax effects are current and deferred income tax expense corresponding with the components of NFE.

A table detailing NFE for the three and twelve months ended September 30, 2022 and 2021, is provided below.

Net financial earnings (loss) by Business Unit

Fiscal 2023 NFE Guidance:

NJR is introducing fiscal 2023 NFE guidance of $2.42 to $2.52, which represents 9.8 percent year-over-year growth over the midpoint of the originally provided fiscal 2022 guidance range of $2.20 to $2.30, subject to the risks and uncertainties identified below under "Forward-Looking Statements." The following chart represents NJR's current expected contributions from its business segments for fiscal 2023:

In providing fiscal 2023 NFE guidance, management is aware there could be differences between reported GAAP earnings and NFE due to matters such as, but not limited to, the positions of our energy-related derivatives. Management is not able to reasonably estimate the aggregate impact or significance of these items on reported earnings and, therefore, is not able to provide a reconciliation to the corresponding GAAP equivalent for its operating earnings guidance without unreasonable efforts.

New Jersey Natural Gas

NJNG reported Fiscal 2022 NFE of $140.1 million, compared to NFE of $107.4 million during fiscal 2021. Fourth-quarter fiscal 2022 net financial loss was $(16.4) million, compared to net financial loss of $(24.2) million during the same period in fiscal 2021. The improvement for both periods was due primarily to higher base rates, which became effective on December 1, 2021.

Customer Growth:

• NJNG added 7,808 new customers during fiscal 2022, compared with 7,854 new customers added in fiscal 2021. NJNG expects these new customers to contribute approximately $6.5 million of incremental utility gross margin on an annualized basis.

Infrastructure Update:

• NJNG's Infrastructure Investment Program (IIP) is a five-year, $150 million accelerated recovery program that began in fiscal 2021. IIP consists of a series of infrastructure projects designed to enhance the safety and reliability of NJNG's natural gas distribution system. During fiscal 2022 NJNG spent $32.3 million under the program on various distribution system reinforcement projects. On March 31, 2022, the Company filed its first rate recovery request with the BPU. On July 13, 2022, NJNG updated the filing with actual information through June 30, 2022, seeking recovery for $28.9 million of investments, including AFUDC, from November 30, 2020 through June 30, 2022. On September 7, 2022, the BPU issued an Order approving a stipulation of settlement effective October 1, 2022.

Basic Gas Supply Service (BGSS) Incentive Programs:

BGSS incentive programs contributed $7.5 million to utility gross margin in the fourth-quarter of fiscal 2022, compared with $3.5 million during the same period in fiscal 2021.

In fiscal 2022, these programs contributed $19.6 million to utility gross margin, compared with $13.4 million during fiscal 2021. The increase was due primarily to higher margins from off-system sales and storage incentive, partially offset by lower capacity release volumes.

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

Energy-Efficiency Programs:

SAVEGREEN invested $53.3 million in fiscal 2022 in energy-efficiency upgrades for their customers' homes and businesses, NJNG's largest ever annual investment in the program. NJNG recovered $25.8 million of its outstanding investments during fiscal 2022 through its energy efficiency rate.

Clean Energy Ventures

CEV reported fiscal 2022 NFE of $39.4 million, compared with NFE of $16.8 million during fiscal 2021. Fourth-quarter fiscal 2022 NFE were $57.8 million, compared to NFE of $40.9 million during the same period in fiscal 2021.

The improvement for both periods was due primarily to higher SREC and electricity revenue, partially offset by higher operating expenses and income tax provision.

As of September 30, 2022, Clean Energy Ventures had approximately 386.6 megawatts (MW) of solar capacity in service in New Jersey, Rhode Island, New York and Connecticut. CEV has over 762 MW of potential capital projects under construction, under exclusivity or under contract.

Storage and Transportation

Storage and Transportation reported fiscal 2022 NFE of $22.5 million, compared with NFE of $13.0 million during fiscal 2021. Fourth-quarter fiscal 2022 NFE were $11.3 million, compared with NFE of $2.4 million during the same period in fiscal 2021.

The increase in both periods was due primarily to increased operating revenue at Leaf River and higher transportation revenue at Adelphia Gateway, partially offset by increased O&M and depreciation expenses.

• Adelphia Gateway Fully Placed into Service - Adelphia Gateway is an 84-mile pipeline running from Marcus Hook to Martins Creek, Pennsylvania, originally built as an oil pipeline, which has now been repurposed to deliver natural gas to the Philadelphia and New Jersey markets.

Energy Services

Energy Services reported fiscal 2022 NFE of $39.1 million, compared with NFE of $71.1 million during fiscal 2021. The decrease was due primarily to price volatility related to the extreme weather in the mid-continent and southern regions of the U.S. during February 2021, which did not reoccur to the same extent during 2022, partially offset by revenues from the Asset Management Agreements (AMAs) which commenced in November 2021.

Fourth-quarter fiscal 2022 net financial loss was $(3.4) million, compared with a net financial loss of $(14.4) million for the same period last fiscal year. The improvement for the fourth quarter of fiscal 2022 compared to the prior year period was due primarily to the recognition of revenues from the AMAs, which became effective during the first quarter of fiscal 2022, as well as higher financial margin generated from storage and transportation assets due to periods of volatility across the United States during the summer, partially offset by higher O&M expense.

Home Services and Other Operations

Home Services and Other Operations reported fiscal 2022 net financial loss of $(0.8) million, which was unchanged compared to the prior year. Fourth-quarter fiscal 2022 net financial loss was $(1.9) million compared to a net financial loss of $(1.1) million for the same period in fiscal 2021.

Capital Expenditures and Cash Flows:

NJR is committed to maintaining a strong financial profile.

• During fiscal 2022, capital expenditures were $569.2 million, including accruals, of which $282.2 million were related to NJNG, compared with $682.9 million, of which $468.3 million were related to NJNG, during fiscal 2021. The decrease in capital expenditures was primarily due to the completion of the Southern Reliability Link (SRL) project, which was placed into service in August 2021.

• During fiscal 2022, cash flows from operations were $323.5 million, compared with cash flows from operations of $391.0 million during fiscal 2021. The decrease in operating cash flows was due to higher working capital requirements as a result of rising energy prices and outsized performance at Energy Services during February 2021 that did not reoccur at similar levels during fiscal 2022.

Forward-Looking Statements:

This earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. NJR cautions readers that the assumptions forming the basis for forward-looking statements include many factors that are beyond NJR's ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other market participants. Words such as "anticipates," "estimates," "expects," "projects," "may," "will," "intends," "plans," "believes," "should" and similar expressions may identify forward-looking statements and such forward-looking statements are made based upon management's current expectations, assumptions and beliefs as of this date concerning future developments and their potential effect upon NJR. There can be no assurance that future developments will be in accordance with management's expectations, assumptions and beliefs or that the effect of future developments on NJR will be those anticipated by management. Forward-looking statements in this earnings release include, but are not limited to, certain statements regarding NJR's NFEPS guidance for fiscal 2023, forecasted contribution of business segments to NJR's NFE for fiscal 2023, customer growth at NJNG, potential CEV capital projects through 2027, infrastructure programs and investments future decarbonization opportunities including IIP, the outcome of future Base Rate Cases with the BPU, Asset Management Agreements, and other legal and regulatory expectations.

Additional information and factors that could cause actual results to differ materially from NJR's expectations are contained in NJR's filings with the SEC, including NJR's Annual Reports on Form 10-K and subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings, which are available at the SEC's web site, http://www.sec.gov. Information included in this earnings release is representative as of today only and while NJR periodically reassesses material trends and uncertainties affecting NJR's results of operations and financial condition in connection with its preparation of management's discussion and analysis of results of operations and financial condition contained in its Quarterly and Annual Reports filed with the SEC, NJR does not, by including this statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events.

Non-GAAP Financial Information:

This earnings release includes the non-GAAP financial measures NFE/net financial loss, NFE per basic share, financial margin and utility gross margin. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found below. As an indicator of NJR's operating performance, these measures should not be considered an alternative to, or more meaningful than, net income or operating revenues as determined in accordance with GAAP. This information has been provided pursuant to the requirements of SEC Regulation G.

NFE and financial margin exclude unrealized gains or losses on derivative instruments related to NJR's unregulated subsidiaries and certain realized gains and losses on derivative instruments related to natural gas that has been placed into storage at Energy Services and certain transactions related to NJR's investments in the PennEast Project, net of applicable tax adjustments as described below. Financial margin also differs from gross margin as defined on a GAAP basis as it excludes certain operations and maintenance expense and depreciation and amortization as well as the effects of derivatives as discussed above. Volatility associated with the change in value of these financial instruments and physical commodity reported on the income statement in the current period. In order to manage its business, NJR views its results without the impacts of the unrealized gains and losses, and certain realized gains and losses, caused by changes in value of these financial instruments and physical commodity contracts prior to the completion of the planned transaction because it shows changes in value currently instead of when the planned transaction ultimately is settled. An annual estimated effective tax rate is calculated for NFE purposes and any necessary quarterly tax adjustment is applied to NJR Energy Services Company.

NJNG's utility gross margin is defined as operating revenues less natural gas purchases, sales tax, and regulatory rider expense. This measure differs from gross margin as presented on a GAAP basis as it excludes certain operations and maintenance expense and depreciation and amortization. Utility gross margin may also not be comparable to the definition of gross margin used by others in the natural gas distribution business and other industries. Management believes that utility gross margin provides a meaningful basis for evaluating utility operations since natural gas costs, sales tax and regulatory rider expenses are included in operating revenues and passed through to customers and, therefore, have no effect on utility gross margin.

Management uses these non-GAAP financial measures as supplemental measures to other GAAP results to provide a more complete understanding of NJR's performance. Management believes these non-GAAP financial measures are more reflective of NJR's business model, provide transparency to investors and enable period-to-period comparability of financial performance. A reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found below. For a full discussion of NJR's non-GAAP financial measures, please see NJR's most recent Report on Form 10-K, Item 7.

About New Jersey Resources

New Jersey Resources (NYSE:NJR) is a Fortune 1000 company that, through its subsidiaries, provides safe and reliable natural gas and clean energy services, including transportation, distribution, asset management and home services. NJR is composed of five primary businesses:

• New Jersey Natural Gas, NJR's principal subsidiary, operates and maintains over 7,700 miles of natural gas transportation and distribution infrastructure to serve over 569,300 customers in New Jersey's Monmouth, Ocean and parts of Morris, Middlesex, Sussex and Burlington counties.

• Clean Energy Ventures invests in, owns and operates solar projects with a total capacity of more than 386 megawatts, providing residential and commercial customers with low-carbon solutions.

• Energy Services manages a diversified portfolio of natural gas transportation and storage assets and provides physical natural gas services and customized energy solutions to its customers across North America.

• Storage and Transportation serves customers from local distributors and producers to electric generators and wholesale marketers through its ownership of Leaf River and the Adelphia Gateway Pipeline Project, as well as our 50% equity ownership in the Steckman Ridge natural gas storage facility.

• Home Services provides service contracts as well as heating, central air conditioning, water heaters, standby generators, solar and other indoor and outdoor comfort products to residential homes throughout New Jersey.

NJR and its over 1,200 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.

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