NJ Resources Files 2024 10-K

Ticker: NJR · Form: 10-K · Filed: Nov 26, 2024 · CIK: 356309

Sentiment: neutral

Topics: 10-K, annual-report, natural-gas

TL;DR

NJR filed its 2024 10-K, check financials for FY ending 9/30/24.

AI Summary

New Jersey Resources Corp. filed its 2024 10-K on November 26, 2024, reporting on its fiscal year ending September 30, 2024. The company, operating in the natural gas distribution sector, is headquartered in Wall, NJ. The filing details its financial performance and operational status for the period.

Why It Matters

This filing provides investors and analysts with a comprehensive overview of New Jersey Resources Corp.'s financial health and strategic direction for the past fiscal year, impacting investment decisions.

Risk Assessment

Risk Level: low — The filing is a standard annual report and does not indicate any immediate or unusual risks.

Key Numbers

Key Players & Entities

FAQ

What is the primary business of New Jersey Resources Corp.?

New Jersey Resources Corp. is primarily involved in Natural Gas Distribution, as indicated by its SIC code 4924.

When was this 10-K filing submitted to the SEC?

This 10-K filing was submitted on November 26, 2024.

What is the Central Index Key (CIK) for New Jersey Resources Corp.?

The CIK for New Jersey Resources Corp. is 0000356309.

What is the physical address of New Jersey Resources Corp.?

The company's business address is 1415 Wyckoff Rd, Wall, NJ 07719.

What fiscal year does this 10-K report cover?

This 10-K report covers the fiscal year ending September 30, 2024.

Filing Stats: 4,336 words · 17 min read · ~14 pages · Grade level 15.5 · Accepted 2024-11-26 16:32:57

Key Financial Figures

Filing Documents

Business

ITEM 1. Business 4 Organizational Structure 4 Reporting Segments 5 Natural Gas Distribution 7 Clean Energy Ventures 10 Energy Services 10 Storage and Transportation 12 Other Business Operations 13 Home Services and Other 13 Environment 13 Human Capital Resources 13 Information About our Executive Officers 15

Risk Factors

ITEM 1A. Risk Factors 15

Unresolved Staff Comments

ITEM 1B. Unresolved Staff Comments 25

Cybersecurity 25

ITEM 1C. Cybersecurity 25

Properties

ITEM 2. Properties 27

Legal Proceedings

ITEM 3. Legal Proceedings 28

Mine Safety Disclosures

ITEM 4. Mine Safety Disclosures 28 PART II

Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

ITEM 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29

[ Reserved ]

ITEM 6. [ Reserved ] 29

Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 30

Quantitative and Qualitative Disclosures About Market Risk

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 58

Financial Statements and Supplementary Data

ITEM 8. Financial Statements and Supplementary Data 61 Management's Report on Internal Control over Financial Reporting 61 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 62 Consolidated Financial Statements 65

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 70 Note 1. Nature of the Business 70 Note 2. Summary of Significant Accounting Policies 70 Note 3. Revenue 81 Note 4. Regulation 85 Note 5. Derivative Instruments 90 Note 6. Fair Value 94 Note 7. Investments in Equity Investees 96 Note 8. Earnings Per Share 96 Note 9. Debt 97 Note 10. Stock-Based Compensation 100 Note 11. Employee Benefit Plans 103 Note 12. Income Taxes 108 Note 13. Leases 110 Note 14. Commitments and Contingent Liabilities 113 Note 15. Reporting Segment and Other Operations Data 114 Note 16. Related Party Transactions 116 Note 17. Subsequent Event 117

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 118

Controls and Procedures

ITEM 9A. Controls and Procedures 118

Other Information

ITEM 9B. Other Information 118 PART III*

Directors, Executive Officers and Corporate Governance

ITEM 10. Directors, Executive Officers and Corporate Governance 119

Executive Compensation

ITEM 11. Executive Compensation 119

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 119

Certain Relationships and Related Transactions and Director Independence

ITEM 13. Certain Relationships and Related Transactions and Director Independence 119

Principal Accountant Fees and Services

ITEM 14. Principal Accountant Fees and Services 119 PART IV

Exhibits and Financial Statement Schedules

ITEM 15. Exhibits and Financial Statement Schedules 120 Index to Financial Statement Schedules 121 Exhibit Index 123

Signatures

Signatures 130 * Portions of Item 10 and Items 11-14 are Incorporated by Reference from the Proxy Statement. i New Jersey Resources Corporation GLOSSARY OF KEY TERMS Adelphia Adelphia Gateway, LLC ADI Administratively Determined Incentive AFUDC Allowance for Funds Used During Construction AMA Asset Management Agreement ARO Asset Retirement Obligation ASC Accounting Standards Codification ASU Accounting Standards Update B Billion Bcf Billion Cubic Feet BGSS Basic Gas Supply Service BPU New Jersey Board of Public Utilities CEO Chief Executive Officer CIO Chief Information Officer CIP Conservation Incentive Program Clean Energy Ventures or CEV Clean Energy Ventures segment CME Chicago Mercantile Exchange CR&R Commercial Realty & Resources Corp. CSI Competitive Solar Incentive Degree-day The measure of the variation in the weather based on the extent to which the average daily temperature falls below 65 degrees Fahrenheit DEI Diversity, equity and inclusion DRP NJR Direct Stock Purchase and Dividend Reinvestment Plan Dths Dekatherms EDECA Electric Discount and Energy Competition Act EE Energy Efficiency EMP New Jersey Energy Master Plan Energy Services or ES Energy Services segment Exchange Act Securities Exchange Act of 1934, as amended FASB Financial Accounting Standards Board FCM Futures Commission Merchant FERC Federal Energy Regulatory Commission Financial Margin A non-GAAP financial measure, which represents revenues earned from the sale of natural gas less costs of natural gas sold including any transportation and storage costs, and excludes certain operations and maintenance expense and depreciation and amortization, as well as any accounting impact from the change in the fair value of certain derivative instruments Fitch Fitch Ratings Company FMB First Mortgage Bond GAAP Generally Accepted Accounting Principles of the United States GWRA Global Warming Response Act of 2007 HCCTR Health Care Cost Trend Rate Home

BUSINESS

ITEM 1. BUSINESS ORGANIZATIONAL STRUCTURE New Jersey Resources Corporation is a New Jersey corporation and a diversified energy services holding company whose principal business is the distribution of natural gas through a regulated utility, investing in and operating clean energy projects and natural gas storage and transportation assets, and providing other retail and wholesale energy services to customers. We are an exempt holding company under Section 1263 of the Energy Policy Act of 2005. Our primary subsidiaries include the following: New Jersey Natural Gas Company provides regulated natural gas utility service to residential and commercial customers throughout Burlington, Middlesex, Monmouth, Morris, Ocean and Sussex counties in New Jersey and participates in the off-system sales and capacity release markets. NJNG, a local natural gas distribution company, is regulated by the BPU and comprises the Company's Natural Gas Distribution segment. NJR Clean Energy Ventures Corporation includes the results of operations and assets related to the Company's unregulated capital investments in clean energy projects, including commercial and residential solar projects. NJRCEV comprises the Company's Clean Energy Ventures segment. NJR Energy Services Company, LLC maintains and transacts around a portfolio of physical assets consisting of natural gas transportation and storage contracts in the U.S. NJRES also provides unregulated wholesale energy management services to other energy companies and natural gas producers. NJRES comprises our Energy Services segment. NJR Midstream Holdings Corporation, which comprises the Storage and Transportation segment, invests in energy-related ventures through its subsidiaries: NJR Midstream Company, which includes our wholly-owned subsidiaries of Leaf River, located in southeastern Mississippi, and Adelphia, located in eastern Pennsylvania, which are subject to FERC regulation; and NJR Steckman Ridge Storage Company, which h

BUSINESS (Continued)

ITEM 1. BUSINESS (Continued) REPORTING SEGMENTS We operate within four reporting segments: Natural Gas Distribution, Clean Energy Ventures, Energy Services and Storage and Transportation. NJNG consists of regulated natural gas services, off-system sales, capacity and storage management operations. ES consists of unregulated wholesale and retail energy operations, as well as energy management services. CEV consists of capital investments in clean energy projects. S&T consists of operations and investments in the natural gas storage and transportation market, such as natural gas storage and transportation facilities. Net income by reporting segment and other business operations for the fiscal years ended September 30, are as follows: * HSO includes intercompany eliminations. Asset composition by reporting segment and other business operations at September 30, are as follows: 2024 2023 Page 5 New Jersey Resources Corporation Part I

BUSINESS (Continued)

ITEM 1. BUSINESS (Continued) Management uses NFE, a non-GAAP financial measure, when evaluating its operating results. NFE is a measure of the earnings based on eliminating timing differences surrounding the recognition of certain gains or losses to effectively match the earnings effects of the economic hedges with the physical sale of natural gas and, therefore, eliminates the impact of volatility to GAAP earnings associated with the derivative instruments. To the extent we utilize forwards, futures or other derivatives to hedge natural gas transactions and forecasted SREC production, the resulting unrealized gains and losses are also eliminated from NFE. ES economically hedges its natural gas inventory with financial derivative instruments and calculates the related tax effect based on the statutory rate. 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 considered unusual in nature and occur infrequently and 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. Non-GAAP financial measures are not in accordance with, or an alternative to, GAAP, and should be considered in addition to, and not as a substitute for, the comparable GAAP measure. The following is a reconciliation of consolidated net income, the most directly comparable GAAP measure, to NFE for the fiscal years ended September 30: (Thousands) 2024 2023 2022 Net income $ 289,775 $ 264,724 $ 274,922 Add: Unrealized loss (gain) on derivative instruments and related transactions 19,574 (38,081) (59,906) Tax effect (4,652) 9,050 14,248 Effects of economic hedging related to natural gas inventory (1) (18,192) 34,699 19,939 Tax effect 4,323 (8,246) (4,738) Gain on equity method investment — (3

BUSINESS (Continued)

ITEM 1. BUSINESS (Continued) Natural Gas Distribution General NJNG consists of regulated utility operations that provide natural gas service to residential and commercial customers. NJNG's service territory includes Burlington, Middlesex, Monmouth, Morris, Ocean and Sussex counties in New Jersey. It encompasses 1,538 square miles, covering 109 municipalities with an estimated population of 1.7M people. It is primarily suburban, highlighted by approximately 100 miles of New Jersey coastline. It is in close proximity to New York City, Philadelphia and the metropolitan areas of northern New Jersey, and is accessible through a network of major roadways and mass transportation. NJNG's business is subject to various risks, such as those associated with adverse economic conditions, which can negatively impact customer growth and operating and financing costs; fluctuations in commodity prices, which can impact customer usage; certain regulatory actions; and environmental remediation. It is often difficult to predict the impact of trends associated with these risks. NJNG employs strategies to pursue customer conversions from other fuel sources and monitor new construction markets through contact with developers, utilize incentive programs through BPU-approved mechanisms to reduce natural gas costs, pursue rate and other regulatory strategies designed to stabilize and decouple gross margin, and work actively with consultants and the NJDEP to manage expectations related to its obligations associated with its former MGP sites. Operating Revenues/Throughput For the fiscal years ended September 30, operating revenues and throughput by customer class for NJNG are as follows: 2024 2023 2022 ($ in thousands) Operating Revenue Bcf Operating Revenue Bcf Operating Revenue Bcf Residential $ 642,352 44.5 $ 643,756 43.4 $ 598,433 45.5 Commercial and other 124,127 8.5 137,343 8.4 140,727 8.7 Firm transportation 86,138 11.7 79,537 12.1 80,915 13.0 Total residential and co

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