Exhibit 99.01
(LETTERHEAD)
DATE: JANUARY 26, 2005 CONTACTS: KEVIN CONNELLY (MEDIA)
732-938-1031
OR
DENNIS PUMA (INVESTORS)
732-938-1229
NEW JERSEY RESOURCES ANNOUNCES
HIGHER FISCAL 2005 FIRST-QUARTER EARNINGS;
INCREASES SHARE REPURCHASE PLAN BY 500,000 SHARES
NJR'S FIRST-QUARTER 2005 EARNINGS INCREASE 22 PERCENT OVER LAST YEAR,
$1.09 PER BASIC SHARE VERSUS $.89 LAST YEAR
WALL, N.J. - New Jersey Resources (NYSE: NJR), parent company of New Jersey
Natural Gas (NJNG), today announced improved fiscal 2005 first-quarter earnings
of $1.09 per basic share, a 22 percent increase compared with last year. This
quarter's earnings included a $.21 per basic share gain on the sale of a
commercial office building and a charge of $.05 per basic share associated with
an early retirement program for officers. Net of these items, NJR's earnings
were $25.7 million, or $.93 per basic share versus $24.3 million, or $.89 per
basic share last year. On a diluted basis, earnings per share net of these items
were $.91 versus $.87 last year, an increase of 5 percent.
"We are pleased with our 2005 first-quarter results," said Laurence M. Downes,
chairman and CEO of NJR. "The continued value we consistently provide to
shareowners reflects the dedication and hard work of our employees."
FINANCIAL AND OPERATING HIGHLIGHTS INCLUDED:
- - NET INCOME AND BASIC EARNINGS PER SHARE - For the three months ended
December 31, 2004, NJR earned $30.2 million, or $1.09 per basic share,
compared with $24.4 million, or $.89 per basic share, last year.
Earnings for the quarter included a gain on the sale of a commercial
office building of $.21 per basic share by NJR's commercial real estate
subsidiary, Commercial Realty and Resources (CR&R). Also included in
this quarter's earnings was a charge of $.05 per basic share associated
with a voluntary officer retirement program as part of an overall
restructuring plan for the organization. NJNG earned $17.8 million in
the quarter, compared with $19.1 million last year. The decrease in
earnings was due primarily to NJNG's share of the early retirement
charge and the impact of lower-than-expected customer usage due to the
weather.
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NEW JERSEY RESOURCES ANNOUNCES HIGHER FISCAL 2005 FIRST-QUARTER EARNINGS;
INCREASES SHARE REPURCHASE PLAN BY 500,000 SHARES
PAGE 2 OF 11
NJR's unregulated wholesale energy services subsidiary, NJR Energy
Services (NJRES), reported a 24 percent increase in earnings to $6.6
million, compared with $5.3 million last year, due primarily to higher
gross margin generated by its portfolio of storage and transportation
capacity assets. Gross margin for NJRES is defined as natural gas
revenues and management fees less natural gas costs.
- - CUSTOMER GROWTH - In the first quarter, NJNG added approximately .5
billion cubic feet (Bcf) of new throughput, which is expected to
generate about $1.4 million in annual gross margin. NJNG anticipates
continuing to maintain an annual customer growth rate of about 2.4
percent in fiscal 2005, adding approximately 1.8 Bcf of firm sales,
which would represent approximately $5.6 million of annual gross
margin. About 35 percent of the anticipated new customers are expected
to convert from other fuels.
NJNG's gross margin is defined as natural gas revenues less natural gas
costs, sales tax, a Transitional Energy Facilities Assessment (TEFA),
which is included in Energy and other taxes on the Consolidated
Statements of Income, and regulatory rider expenses. Management
believes that gross margin provides a more meaningful basis for
evaluating utility operations than revenue since natural gas costs,
sales tax, TEFA and regulatory rider expenses are passed through to
customers, and therefore have no effect on gross margin. Natural gas
costs are charged to operating expenses on the basis of therm sales at
the prices approved by the New Jersey Board of Public Utilities through
NJNG's Basic Gas Supply Service (BGSS) tariff. The BGSS allows NJNG to
recover natural gas costs that exceed the level reflected in the
company's base rates. Sales tax is calculated at 6 percent of revenue
and excludes sales to cogeneration facilities, other utilities,
off-system sales and federal accounts. TEFA is calculated on a
per-therm basis and excludes sales to cogeneration facilities, other
utilities and off-system sales. Regulatory rider expenses are
calculated on a per-therm basis. NJNG's gross margin also includes
benefits received by shareowners related to its incentive programs.
- - WEATHER - Weather in the three months ended December 31, 2004, was 2.5
percent warmer than normal and 1.6 percent colder than last year.
"Normal" weather is based on 20-year average temperatures. The impact
of the weather is significantly offset by NJNG's weather-normalization
clause, which is designed to smooth out year-to-year fluctuations on
both NJNG's gross margin and customers' bills that may result from
changing weather patterns. As a result of the warmer-than-normal
weather, NJNG accrued $800,000 of gross margin for the three months
ended December 31, 2004, to be collected from customers in the future.
Gross margin was negatively impacted by usage per degree day being
lower than expected.
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NEW JERSEY RESOURCES ANNOUNCES HIGHER FISCAL 2005 FIRST-QUARTER EARNINGS;
INCREASES SHARE REPURCHASE PLAN BY 500,000 SHARES
PAGE 3 OF 11
- - INCENTIVE PROGRAMS - During the first quarter, NJNG's gross
margin-sharing incentive programs, which include off-system sales,
capacity management, storage optimization and financial risk management
programs, totaled 14.5 Bcf and $1.6 million of gross margin, compared
with 13.5 Bcf and $1.5 million of gross margin for the same period last
year. NJNG shares the gross margin earned from these incentive programs
with customers and shareowners according to a margin-sharing formula in
effect through October 2006. During the quarter, customers saved
approximately $7.8 million in natural gas costs through these programs.
Since the establishment of these incentive programs in 1992, NJNG
customers have saved nearly $235 million on their natural gas bills, or
approximately 4 percent annually.
- - WHOLESALE ENERGY SERVICES - NJRES earned $6.6 million in the quarter
ended December 31, 2004, compared with $5.3 million for the same period
last year. The increase in earnings was due primarily to higher gross
margin generated from an expanded storage and transportation portfolio.
NJRES has developed a portfolio of storage and transportation capacity
in the Gulf Coast, Mid-Continent, Appalachia and Eastern Canada, which
becomes more valuable when there are changing prices between these
areas. During the quarter, NJRES entered into a natural gas portfolio
management agreement with Niagara Mohawk, based in Syracuse, New York.
Niagara Mohawk provides natural gas to nearly 560,000 customers in
upstate New York. In December 2004, NJRES and Niagara Mohawk began
working in collaboration to manage and optimize Niagara Mohawk's
natural gas assets, including natural gas pipeline transportation,
storage and supply. NJRES provides reliable asset management options,
lowers costs and provides value by offering customers unique and
flexible options.
- - NJR HOME SERVICES AND OTHER - This business segment consists of NJR
Home Services (NJRHS), which provides service, sales and installation
of appliances to nearly 139,000 customers; CR&R, which develops
commercial real estate; and NJR Energy, which consists primarily of a
3.2 percent equity investment in Iroquois Gas Transmission System, L.P.
Earnings for the quarter ended December 31, 2004, were $5.8 million,
compared with $40,000 last year. This quarter's earnings included a
gain on the sale of a real estate property of $.21 per basic share. Net
of this gain, and this segment's portion of the early retirement
charge, earnings for the three months were $406,000, compared with
$40,000 last year, due primarily to improved results at NJRHS.
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NEW JERSEY RESOURCES ANNOUNCES HIGHER FISCAL 2005 FIRST-QUARTER EARNINGS;
INCREASES SHARE REPURCHASE PLAN BY 500,000 SHARES
PAGE 4 OF 11
- - REAL ESTATE - In December 2004, CR&R completed the sale of a recently
constructed 200,000-square-foot building located in Monmouth Shores
Corporate Office Park II to the tenant of the building, Horizon Blue
Cross Blue Shield of New Jersey. This transaction generated a pretax
gain of $10.1 million, or $.21 per basic share, which is included in
operating revenues and continues NJR's strategy of reducing its
investment in the commercial real estate business.
- - EARLY RETIREMENT PROGRAM - The company recently offered a voluntary
retirement program to officers of NJR and its subsidiaries as part of a
restructuring plan for the organization. The early retirement program
resulted in a pretax charge of $2.5 million, or $.05 per basic share,
which is included in operation and maintenance expense in the first
fiscal quarter.
- - SHARE REPURCHASE PLAN - In January 2005, the NJR Board of Directors
authorized an increase in the company's share repurchase plan from 2
million to 2.5 million shares. NJR was one of the first companies in
the utility industry to offer a repurchase plan, which gives the
company financial flexibility and is expected to create value for
shareowners. NJR purchased 157,200 shares under the share repurchase
plan during the quarter ended December 31, 2004. The plan allows NJR to
purchase its shares on the open market or in negotiated transactions,
based on market and other conditions. Since the plan began in September
1996, NJR has invested $64 million to repurchase 1.8 million shares.
- - DIVIDEND INCREASED - On October 27, 2004, NJR's board of directors
authorized a 4.6 percent increase in the company's quarterly dividend
rate to $.34 per share. The new rate became effective with the January
2005 dividend payment. NJR has now increased its dividend in each of
the last 10 years and has paid quarterly dividends since 1952.
FISCAL 2005 EARNINGS GUIDANCE
Assuming normal weather, stable economic conditions and continued customer
growth at NJNG and continued volatility in the wholesale natural gas markets at
NJRES, and subject to the factors discussed below under "Forward-Looking
Statements," NJR estimates that earnings for fiscal 2005 will be in the $2.65 -
$2.75 per basic share range. This guidance excludes the aforementioned gain on
the sale of a commercial real estate building of $.21 per basic share and the
charge of $.05 per basic share associated with the early retirement program.
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NEW JERSEY RESOURCES ANNOUNCES HIGHER FISCAL 2005 FIRST-QUARTER EARNINGS;
INCREASES SHARE REPURCHASE PLAN BY 500,000 SHARES
PAGE 5 OF 11
FORWARD-LOOKING STATEMENTS
This news release contains estimates and other 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. Other factors that could cause actual results, including
gross margin, earnings and customer growth, to differ materially from
the company's expectations include, but are not limited to, weather
conditions, economic conditions in NJNG's service territory, the impact
of regulation (including the regulation of rates), fluctuations in
energy-related commodity prices, conversion activity, other marketing
efforts, actual energy usage patterns of NJNG's customers, the pace of
deregulation of retail gas markets, access to adequate supplies of
natural gas, the regulatory and pricing policies of federal and state
regulatory agencies, changes due to legislation at the federal and
state level, the disallowance of recovery of environmental remediation
expenditures and other regulatory changes, litigation and other
uncertainties. More detailed information about these factors is set
forth in NJR's filings with the Securities and Exchange Commission,
including NJR's Annual Report on Form 10-K filed on December 1, 2004.
NJR's Form 10-K is available at www.sec.gov. NJR does not, by including
this paragraph, assume any obligation to review or revise any
particular forward-looking statement referenced herein in light of
future events.
WEBCAST INFORMATION
NJR will host a live webcast to discuss its financial results today at
11 a.m. EST. To listen to the call, logon to NJR's Web site,
NJLIVING.COM, and select "Investor Relations," then click just below
the microphone on the right side of the Investor Relations home page.
ABOUT NEW JERSEY RESOURCES
New Jersey Resources (NYSE:NJR), a Fortune 1000 company and a member of
the Forbes Platinum 400, provides reliable retail and wholesale energy
services to customers in New Jersey and in states from the Gulf Coast
to New England, and Canada. Its principal subsidiary, New Jersey
Natural Gas, is one of the fastest-growing local distribution companies
in the United States, serving more than 450,000 customers in central
and northern New Jersey. Other major NJR subsidiaries include NJR
Energy Services and NJR Home Services. NJR Energy Services is a leader
in the unregulated energy services market, providing customer service
and management of natural gas storage and capacity assets. NJR Home
Services offers retail customers heating, air conditioning and
appliance services. NJR's progress is a tribute to the more than 5,000
dedicated employees who have shared their expertise and focus on
quality through more than 50 years of serving customers and the
community to make NJR a leader in the competitive energy marketplace.
For more information, visit NJR's Web site at NJLIVING.COM.
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NEW JERSEY RESOURCES ANNOUNCES HIGHER FISCAL 2005 FIRST-QUARTER EARNINGS;
INCREASES SHARE REPURCHASE PLAN BY 500,000 SHARES
PAGE 6 OF 11
NEW JERSEY RESOURCES CORPORATION
CONSOLIDATED FINANCIAL RESULTS
Three Months Ended
Thousands, except per share data December 31,
(Unaudited) 2004 2003
- ----------- ---- ----
Operating Revenues $853,988 $643,046
Net Income $ 30,202 $ 24,378
Earnings Per Common Share
Basic $ 1.09 $ .89
Diluted $ 1.06 $ .87
Average Shares Outstanding
Basic 27,797 27,336
Diluted 28,391 27,886
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Page 7 of 11
NEW JERSEY RESOURCES
ADJUSTED NET INCOME AND EARNINGS PER SHARE RECONCILIATION
Provided below is a reconciliation of as reported and as adjusted information
for Net Income and basic and diluted earnings per share. This reconciliation
reflects the impact of a gain on the sale of a commercial office building and a
charge related to an early retirement program for officers.
Management believes that this reconciliation is needed due to the unusual nature
of the two items described above and that they are not indicative of core
results. It also provides for a more consistent comparison for year-over-year
results.
(Unaudited) Three Months Ended
(Thousands, except per share data) December 31, 2004
---------------------------------- -----------------
NJNG NJRES NJRHS and Total
Other
-------- ------- ----- --------
Net Income, as reported $ 17,833 $ 6,560 $ 5,809 $ 30,202
Exclude:
Gain on sale of commercial office building (5,972) (5,972)
Charge for early retirement program 915 8 569 1,492
-------- ------- -------- --------
NET INCOME, AS ADJUSTED $ 18,748 $ 6,568 $ 406 $ 25,722
======== ======= ======== ========
Earnings per share basic, as reported $ 1.09
Exclude:
Gain on sale of commercial office building (.21)
Charge for early retirement program .05
-------
EARNINGS PER SHARE BASIC, AS ADJUSTED $ .93
=======
Earnings per share diluted, as reported $ 1.06
Exclude:
Gain on sale of commercial office building (.21)
Charge for early retirement program .05
-------
* EARNINGS PER SHARE DILUTED, AS ADJUSTED $ .91
=======
* Amount does not foot due to rounding
Page 8 of 11
NEW JERSEY RESOURCES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Thousands, except per share data)
THREE MONTHS ENDED
DECEMBER 31,
2004 2003
---- ----
OPERATING REVENUES $853,988 $643,046
-------- --------
OPERATING EXPENSES
Gas purchases 738,426 550,946
Operation and maintenance 28,663 25,022
Regulatory rider expenses 9,128 2,630
Depreciation and amortization 8,359 8,230
Energy and other taxes 15,784 13,971
-------- --------
Total operating expenses 800,360 600,799
-------- --------
OPERATING INCOME 53,628 42,247
Other income 1,684 1,380
Interest charges, net 5,350 3,653
-------- --------
INCOME BEFORE INCOME TAXES 49,962 39,974
Income tax provision 19,760 15,596
-------- --------
NET INCOME $ 30,202 $ 24,378
======== ========
EARNINGS PER COMMON SHARE
BASIC $ 1.09 $ .89
DILUTED $ 1.06 $ .87
======== ========
DIVIDENDS PER COMMON SHARE $ 0.34 $ .33
======== ========
AVERAGE SHARES OUTSTANDING
BASIC 27,797 27,336
DILUTED 28,391 27,886
======== ========
Page 9 of 11
NEW JERSEY RESOURCES
Three Months Ended
(Unaudited) December 31,
(Thousands, except per share data) 2004 2003
- ---------------------------------- ---- ----
OPERATING REVENUES
New Jersey Natural Gas $ 320,470 $ 252,234
NJR Energy Services 516,871 385,498
NJR Home Services and Other 16,671 5,337
----------- -----------
SUB-TOTAL 854,012 643,069
----------- -----------
Intercompany Eliminations (24) (23)
----------- -----------
TOTAL $ 853,988 $ 643,046
=========== ===========
OPERATING INCOME
New Jersey Natural Gas $ 31,796 $ 33,090
NJR Energy Services 12,162 9,193
NJR Home Services and Other 9,670 (36)
----------- -----------
TOTAL $ 53,628 $ 42,247
=========== ===========
NET INCOME
New Jersey Natural Gas $ 17,833 $ 19,065
NJR Energy Services 6,560 5,273
NJR Home Services and Other 5,809 40
----------- -----------
TOTAL $ 30,202 $ 24,378
=========== ===========
THROUGHPUT (BCF)
NJNG, Core Customers 20.9 20.0
NJNG, Incentive Programs 14.5 13.5
NJRES Fuel Mgmt. and Wholesale Sales 69.7 74.6
----------- -----------
TOTAL 105.1 108.1
=========== ===========
COMMON STOCK DATA
Yield at December 31 3.1% 3.4%
Market Price
High $ 44.55 $ 39.54
Low $ 40.54 $ 35.76
Close at December 31 $ 43.34 $ 38.51
Shares Out. at December 31 27,704 27,392
Market Cap. at December 31 $ 1,200,691 $ 1,054,866
Page 10 of 11
NEW JERSEY NATURAL GAS
Three Months Ended
(Unaudited) December 31,
(Thousands, except customer & weather data) 2004 2003
- ------------------------------------------- ---- ----
OPERATING REVENUES
Residential $161,169 $141,734
Commercial, Industrial & Other 41,161 33,891
Firm Transportation 8,761 8,365
-------- --------
TOTAL FIRM REVENUES 211,091 183,990
Interruptible 4,136 1,726
-------- --------
TOTAL SYSTEM REVENUES 215,227 185,716
-------- --------
Incentive Program 105,243 66,518
-------- --------
TOTAL REVENUES $320,470 $252,234
======== ========
GROSS MARGIN AND OPERATING INCOME
Residential $ 44,063 $ 43,972
Commercial, Industrial & Other 8,393 8,314
Firm Transportation 6,645 7,092
-------- --------
TOTAL FIRM MARGIN 59,101 59,378
Interruptible 307 278
-------- --------
TOTAL SYSTEM MARGIN 59,408 59,656
-------- --------
Incentive Programs 1,570 1,546
-------- --------
TOTAL GROSS MARGIN 60,978 61,202
-------- --------
Operation and maintenance expense 20,229 19,337
Depreciation and amortization 8,117 8,063
Other taxes not reflected in gross margin 836 712
-------- --------
OPERATING INCOME $ 31,796 $ 33,090
======== ========
THROUGHPUT (BCF)
Residential 12.6 13.1
Commercial, Industrial & Other 3.3 3.0
Firm Transportation 2.4 2.6
-------- --------
TOTAL FIRM THROUGHPUT 18.3 18.7
Interruptible 2.6 1.3
-------- --------
TOTAL SYSTEM THROUGHPUT 20.9 20.0
-------- --------
Incentive Programs 14.5 13.5
-------- --------
TOTAL THROUGHPUT 35.4 33.5
======== ========
CUSTOMERS
Residential 409,329 402,624
Commercial, Industrial & Other 28,579 27,319
Firm Transportation 16,023 16,843
-------- --------
TOTAL FIRM CUSTOMERS 453,931 446,786
Interruptible 51 50
-------- --------
TOTAL SYSTEM CUSTOMERS 453,982 446,836
-------- --------
Incentive Programs 37 41
-------- --------
TOTAL CUSTOMERS 454,019 446,877
======== ========
Page 11 of 11
NEW JERSEY NATURAL GAS
Three Months Ended
(Unaudited) December 31,
(Thousands, except customer & weather data) 2004 2003
- ------------------------------------------- ---- ----
DEGREE DAYS
Actual 1,650 1,624
Normal 1,692 1,705
--------- ---------
Percent of Normal 97.5% 95.2%
--------- ---------
NJR ENERGY SERVICES
OPERATING REVENUES $ 516,871 $ 385,498
GAS PURCHASES 502,449 375,409
--------- ---------
GROSS MARGIN $ 14,422 $ 10,089
========= =========
OPERATING INCOME $ 12,162 $ 9,193
========= =========
NET INCOME $ 6,560 $ 5,273
========= =========
GAS SOLD AND MANAGED (BCF) 69.7 74.6
========= =========
NJR HOME SERVICES AND OTHER
OPERATING REVENUES $ 16,671 $ 5,337
========= =========
OPERATING INCOME $ 9,670 ($ 36)
========= =========
NET INCOME $ 5,809 $ 40
========= =========
TOTAL CUSTOMERS AT DECEMBER 31 138,884 135,229
========= =========
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