New Jersey Resources Reports Second-Quarter Fiscal 2018 Results

Today, New Jersey Resources (NYSE:NJR) reported results for the second
quarter of fiscal 2018. Highlights include:

• Consolidated net income of $140.3 million for the second quarter of
  fiscal 2018, compared with $114.7 million for the same period in
  fiscal 2017.
• Consolidated net financial earnings (NFE), a non-GAAP financial
  measure, of $142.1 million for the second quarter of fiscal 2018,
  compared with $104.1 million during the same period in fiscal 2017.
• Fiscal 2018 NFE guidance reaffirmed at a range of $2.55 to $2.65 per
  share.
• Energy Services continued to deliver strong results, reporting
  second-quarter fiscal 2018 NFE of $72.8 million, compared with $15.7
  million during the same period in fiscal 2017, as a result of strong
  demand and market volatility due to cold weather during the quarter.
• NJNG seeks to significantly expand its energy-efficiency programs with
  its $341 million filing with the New Jersey Board of Public Utilities
  (BPU).

“With another impressive performance by Energy Services and a solid
performance by New Jersey Natural Gas, fiscal 2018 is shaping up to be a
strong year for our company," Laurence M. Downes, chairman and CEO of
New Jersey Resources, said. "We will continue to focus on executing our
strategy to meet our customers' expectations and deliver results for our
shareowners."

Second-quarter fiscal 2018 net income totaled $140.3 million, or $1.60
per share, compared with $114.7 million, or $1.33 per share, during the
same period in fiscal 2017. Fiscal 2018 year-to-date net income totaled
$264 million, or $3.02 per share, compared with $149.6 million, or $1.74
per share, during the same period in fiscal 2017.

In the second quarter of fiscal 2018, NFE totaled $142.1 million, or
$1.62 per share, compared with NFE of $104.1 million, or $1.21 per
share, during the same period last year. Fiscal 2018 year-to-date NFE
totaled $277.4 million, or $3.18 per share, compared with $144.5
million, or $1.68 per share, during the same period in fiscal 2017.

A reconciliation of net income to NFE for the three and six months ended
March 31 of fiscal years 2018 and 2017 is provided below.

			Three Months Ended										Six Months Ended
			March 31,										March 31,
(Thousands)			2018					2017					2018					2017
Net income*			$	140,266				$	114,702				$	263,965				$	149,631
Add:
Unrealized (gain) loss on derivative instruments and related transactions			(11,608		)			(54,855		)			23,246					(26,553		)
Tax effect			4,716					19,679					(3,343		)			9,922
Effects of economic hedging related to natural gas inventory			6,125					34,328					(19,262		)			16,389
Tax effect			(1,715		)			(12,334		)			6,529					(6,130		)
Net income to NFE tax adjustment			4,278					2,586					6,260					1,230
Net financial earnings			$	142,062				$	104,106				$	277,395				$	144,489
Weighted Average Shares Outstanding
Basic			87,595					86,275					87,295					86,182
Diluted			87,989					87,101					87,690					86,993
Basic earnings per share			$	1.60				$	1.33				$	3.02				$	1.74
Add:
Unrealized (gain) loss on derivative instruments and related transactions			(0.13		)			(0.64		)			0.27					(0.31		)
Tax effect			0.05					0.23					(0.04		)			0.12
Effects of economic hedging related to natural gas inventory			0.07					0.40					(0.22		)			0.19
Tax effect			(0.02		)			(0.14		)			0.08					(0.07		)
Net income to NFE tax adjustment			0.05					0.03					0.07					0.01
Basic net financial earnings per share			$	1.62				$	1.21				$	3.18				$	1.68

*Results during the first six months of fiscal 2018 include an
estimated income tax benefit of $58.5 million, or $0.67 per share, due
to the revaluation of deferred taxes resulting from the reduction in the
corporate tax rate.

NFE is a financial measure not calculated in accordance with generally
accepted accounting principles (GAAP) of the United States. It is a
measure of earnings based on eliminating timing differences surrounding
the recognition of certain gains or losses, net of applicable tax
adjustments, to effectively match the earnings effects of the economic
hedges with the physical sale of natural gas, Solar Renewable Energy
Credits (SRECs) and foreign currency contracts. NFE eliminates the
impact of volatility to GAAP earnings associated with unrealized gains
and losses on derivative instruments in the current period. For further
discussion of this financial measure, please see the explanation below
under “Non-GAAP Financial Information.”

A table summarizing our key performance metrics for the three and six
months ended March 31 of fiscal years 2018 and 2017 is provided below.

			Three Months Ended										Six Months Ended
			March 31,										March 31,
($ in Thousands)			2018					2017					2018					2017
Net income			$	140,266				$	114,702				$	263,965				$	149,631
EPS			$	1.60				$	1.33				$	3.02				$	1.74
NFE			142,062					104,106					$	277,395				$	144,489
Basic net financial earnings per share			$	1.62				$	1.21				$	3.18				$	1.68

A table detailing NFE for the three and six months ended March 31 of
fiscal years 2018 and 2017 is provided below.

			Three Months Ended										Six Months Ended
			March 31,										March 31,
(Thousands)			2018					2017					2018					2017
Net financial earnings (loss)
New Jersey Natural Gas			$	60,442				$	60,233				$	94,551				$	90,581
Midstream			1,315					4,948					18,826					7,335
Subtotal Regulated			61,757					65,181					113,377					97,916
Clean Energy Ventures			10,051					22,743					81,301					25,585
Energy Services			72,832					15,746					93,106					19,233
Home Services and Other			(2,488		)			708					(10,204		)			2,250
Subtotal Non-Regulated			80,395					39,197					164,203					47,068
Subtotal			142,152					104,378					277,580					144,984
Eliminations			(90		)			(272		)			(185		)			(495		)
Total			$	142,062				$	104,106				$	277,395				$	144,489

NJR Reaffirms Fiscal 2018 NFE Guidance:

NJR reaffirmed fiscal 2018 NFE guidance of $2.55 to $2.65 per share,
subject to the risks and uncertainties identified below under
“Forward-Looking Statements.” NJR expects its regulated businesses to
generate between 40 to 55 percent of total NFE, with New Jersey Natural
Gas (NJNG) continuing to be the largest contributor, excluding the
impacts of tax reform. The following chart represents NJR’s current
expected contributions from its subsidiaries, and the estimated benefits
as a result of the revaluation of deferred taxes due to tax reform for
fiscal 2018:

Company			Expected Fiscal 2018 Net Financial Earnings Contribution
New Jersey Natural Gas			35 to 45 percent
Midstream			5 to 10 percent
Total Regulated			40 to 55 percent
Clean Energy Ventures			5 to 10 percent
Energy Services			20 to 30 percent
Home Services and Other			1 to 3 percent
Total Non-Regulated			26 to 43 percent
NFE contribution from the revaluation of deferred taxes due to tax reform			20 to 25 percent

In providing fiscal 2018 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.

Effective Tax Rate:

NJR’s estimated annual effective tax rate increased to 17.2 percent in
fiscal 2018 from 15.6 percent in fiscal 2017. The increase is due to
fewer expected investment tax credits, offset by a reduction in the
federal tax rate.

For NFE purposes, NJR expects the annual effective tax rate to increase
from 12.7 percent to 15.3 percent. NJR recognized $18.4 million in tax
credits, net of deferred taxes, during the first six months of fiscal
2018, compared with $30 million during the same period in fiscal 2017.
Further detail can be found in Note 11 “Income Taxes” within our 10-Q
filing.

Regulated Business Update:

New Jersey Natural Gas

NJNG reported second-quarter fiscal 2018 NFE of $60.4 million, compared
with $60.2 million, during the same period in fiscal 2017. Fiscal 2018
year-to-date NFE at NJNG were $94.6 million, compared with $90.6 million
during the same period last year. Increases in NFE for the quarter and
fiscal year-to-date were due primarily to customer growth and return on
capital expenditures associated with BPU-approved infrastructure
projects, offset by increased operation and maintenance expenses.

Customer Growth:

• NJNG added 4,656 new customers during the first six months of fiscal
  2018, compared with 4,130 during the same period last year, primarily
  driven by the residential new construction market. These new customer
  additions, and those customers who added additional natural gas
  services to their premises, are expected to contribute $2.8 million
  annually to utility gross margin.
• NJNG expects to add between 26,000 to 28,000 new customers through
  fiscal 2020, representing an average annual growth rate of 1.7 percent
  and a cumulative increase in utility gross margin of approximately $16
  million. For more information on utility gross margin, please see
  “Non-GAAP Financial Information” below.

Infrastructure Update:

• Safety Acceleration and Facilities Enhancement (SAFE) II is a
  five-year program approved by the BPU in September 2016 designed to
  replace the remaining 276 miles of unprotected steel main and
  associated services in NJNG’s distribution system. During the first
  six months of fiscal 2018, NJNG invested $16.5 million to replace 22
  miles of unprotected steel main and services.
• New Jersey Reinvestment in System Enhancement (NJ RISE) program
  is a five-year, $102.5 million investment that began in 2014.
  During the first six months of fiscal 2018, NJNG installed a secondary
  natural gas distribution main between Brick and Mantoloking, and
  reinforced a regulator station in Long Beach Island. NJNG expects to
  complete work on a secondary natural gas distribution main in the
  southern section of the Seaside barrier island by June 2018.
• Both the SAFEII and NJ RISE programs are eligible for annual base rate
  increases. On March 29, 2018, NJNG filed its annual petition with the
  BPU requesting a base rate change in the amount of $6.9 million for
  the recovery of capital costs through June 30, 2018. The filing will
  be updated in July 2018 to reflect the actual results through June 30,
  2018, with changes to base rates effective October 1, 2018.
• The Southern Reliability Link (SRL), which will
  provide a secondary interstate feed into the southern end of NJNG’s
  delivery system, continues to make progress on the remaining easement
  and road-opening permits. Once obtained, construction will begin. NJNG
  expects the SRL to be in service during 2019.

Basic Gas Supply Service Incentive Programs:

• BGSS incentive programs contributed $2.4 million in the second quarter
  of fiscal 2018 to utility gross margin, compared with $2.9 million
  during the same period in fiscal 2017. Fiscal year-to-date, these
  programs contributed $6.8 million, compared with $6.7 million during
  the same period in fiscal 2017.

Energy Efficiency:

• The SAVEGREEN Project^®, NJNG’s energy-efficiency program,
  invested $6.2 million during the first six months of fiscal 2018 in
  grants and financing options designed to help customers with
  energy-efficiency upgrades for their homes and businesses.
• On March 28, 2018, NJNG submitted a filing with the BPU to
  significantly expand its energy-efficiency offerings to help more
  customers save money, manage their energy usage and reduce emissions.
  Pending BPU approval, NJNG is planning to invest approximately $341
  million over the six-year program.

Tax Reform Benefits Customers:

• On March 26, 2018, the BPU approved NJNG’s filing to pass through the
  benefits of the federal tax reform and reduce customers’ rates by $21
  million, inclusive of sales tax, effective April 1, 2018, resulting in
  a $31, or a 3 percent, annual decrease for the typical customer.
• The BPU is reviewing NJNG's request to provide a one-time refund to
  customers, totaling approximately $31 million. Actual refund amounts
  will be determined in May and reflect individual customer usage.
  Customers can expect to see these savings in their May or June bills.
• When combined, the average customer using 1,000 therms per year will
  see an estimated overall reduction of $78, or 7.4 percent, this year.

Midstream

Midstream reported second-quarter 2018 net financial earnings of $1.3
million, compared with NFE of $4.9 million during the same period in
fiscal 2017, and fiscal year-to-date NFE of $18.8 million, compared with
$7.3 million during the same period last year. The higher fiscal
year-to-date results reflect the benefits of tax reform.

• Regulated infrastructure projects, including the PennEast Pipeline and
  Adelphia Gateway, continue to move forward. These projects are
  designed to benefit our customers by providing low-cost natural gas
  from the Marcellus Shale region and shareowners with a competitive
  return on their investment.
• On January 19, 2018, the Federal Energy Regulatory Commission (FERC)
  issued PennEast a Certificate of Public Convenience and Necessity.
  PennEast continues to target an in-service date in 2019; however, the
  delay in receiving its FERC certificate has affected the timetable for
  land access, surveys and permit applications, which may delay the
  commencement of construction to 2019. NJR has adjusted its capital
  plan to reflect construction commencing in 2019.

Non-Regulated Business Update:

Energy Services

Energy Services reported second-quarter fiscal 2018 NFE of $72.8
million, compared with $15.7 million during the same period in fiscal
2017. Fiscal 2018 year-to-date NFE were $93.1 million, compared with
$19.2 million during the same period in fiscal 2017. The significant
increase in NFE in both periods was due primarily to colder weather,
which resulted in increased storage withdrawals to meet higher demand
coupled with higher volatility, that allowed Energy Services to capture
additional financial margin from natural gas price spreads.

Clean Energy Ventures

Clean Energy Ventures (CEV) reported NFE of $10.1 million in the second
quarter of fiscal 2018, compared with $22.7 million in the same period
in fiscal 2017. Fiscal 2018 year-to-date NFE were $81.3 million,
compared with $25.6 million during the same period in fiscal 2017. The
lower quarterly results were due primarily to an expectation of fewer
Investment Tax Credits (ITC), compared with the same period in fiscal
2017, as a result of the planned execution of sale leaseback financings
for all fiscal 2018 commercial solar projects. The improved fiscal
year-to-date results were due primarily to an estimated benefit of $63.1
million related to the revaluation of deferred income taxes. Highlights
include:

• On March 2, 2018, CEV entered into a purchase and sale agreement for
  its 9.7 megawatt (MW) wind farm in Two Dot, Montana for a total sale
  price of $18.5 million. The sale is expected to close during the third
  quarter of fiscal 2018, pending FERC approval.
• In March 2018, CEV committed to a plan to pursue the sale of its
  remaining wind assets. CEV is targeting the sale of the remaining wind
  assets will be completed within the next 12 months. As of March 31,
  2018, the company classified its wind assets and liabilities as held
  for sale.
• Four commercial solar projects located in Old Bridge, Raritan, South
  Brunswick and Springfield Townships, New Jersey, totaling 42.9 MWs of
  capacity, and an approximate investment of $96.4 million, are under
  construction and CEV expects them to be placed into service during
  fiscal 2018.
• Solar-related capital expenditures for The Sunlight Advantage^®
  projects during the second quarter of fiscal 2018 were $5.4 million,
  compared with $11.1 million during the same period in fiscal 2017. The
  decrease was due primarily to fewer projects placed into service.

CEV expects total solar-related capital expenditures during fiscal 2018
to be between $132 million and $145 million, of which $96.4 million will
utilize sale leaseback financing. This compares with total solar-related
capital expenditures of $120.3 million in fiscal 2017, which included
$33 million of sale leaseback financing.

Home Services and Other Operations

In the second quarter of fiscal 2018, Home Services, the company’s
non-regulated retail and appliance service subsidiary, and Other
Operations reported a net financial loss of $2.5 million, compared with
NFE of $708,000 during the same period last year. Fiscal 2018
year-to-date net financial losses were $10.2 million, compared with NFE
of $2.3 million during the same period last year. The fiscal 2018
year-to-date decrease was due to an estimated $10.7 million charge
primarily attributed to other operations resulting from the revaluation
of deferred income taxes due to tax reform.

Home Services reported a net financial loss of $1.7 million in the
second quarter of fiscal 2018, compared with a net financial loss of
$1.7 million during the same period last year. Fiscal 2018 year-to-date
net financial losses were $5.5 million, compared with net financial loss
of $2.5 million during the same period last year. The fiscal
year-to-date decrease was due primarily to an estimated $2.8 million
charge based on the revaluation of deferred taxes recognized during the
first quarter of fiscal 2018 due to tax reform.

Capital Expenditures and Cash Flows:

NJR is committed to maintaining a strong financial profile while
continuing to invest capital in regulated and non-regulated projects.

• During the first six months of fiscal 2018, NJR generated operating
  cash flows of $312.5 million, compared with $171.8 million during the
  same period in fiscal 2017.
• Fiscal year-to-date capital expenditures were $148.8 million, of which
  $95.1 million were related to regulated assets, compared with $139.3
  million, of which $92.5 million were related to regulated assets,
  during the same period in fiscal 2017.

Webcast Information:

NJR will host a live webcast to discuss its financial results today at
10 a.m. EDT. A few minutes prior to the webcast, go to njresources.com
and select “Investor Relations,” then scroll down to the “Events &
Presentations” section and click on the webcast link.

Forward-Looking Statements:

This 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 release include, but
are not limited to, certain statements regarding NJR’s NFE guidance for
fiscal 2018, forecasted contribution of business segments to fiscal 2018
NFE, future NJNG customer and utility gross margin growth, future NJR
capital expenditures, infrastructure investments and solar sale
leaseback transactions, Clean Energy Ventures’ ITC-eligible projects and
demand for residential solar, the impact of the Tax Act, earnings and
dividend growth, as well as the ability to close and successfully
implement the Adelphia Gateway acquisition, sell Two Dot and other wind
farms and construct the SRL and PennEast Pipeline projects.

The factors that could cause actual results to differ materially from
NJR’s expectations include, but are not limited to, risks associated
with our investments in clean energy projects, including the
availability of regulatory and tax incentives, the availability of
viable projects, our eligibility for ITCs and PTCs, the future market
for SRECs and electricity prices and operational risks related to
projects in service; the ability to obtain governmental and regulatory
approvals, land-use rights, electric grid connection (in the case of
clean energy projects) and/or financing for the construction,
development and operation of our unregulated energy investments,
pipeline transportation systems and NJR's infrastructure projects,
including SRL and NJ RISE as well as PennEast and Adelphia Gateway, in a
timely manner; risks associated with acquisitions and the related
integration of acquired assets with our current operations; volatility
of natural gas and other commodity prices and their impact on NJNG
customer usage, NJNG’s BGSS incentive programs, our Energy Services
segment operations and our risk management efforts; the level and rate
at which NJNG’s costs and expenses are incurred and the extent to which
they are approved for recovery from customers through the regulatory
process, including through future base rate case filings; the impact of
a disallowance of recovery of environmental-related expenditures and
other regulatory changes; the performance of our subsidiaries; operating
risks incidental to handling, storing, transporting and providing
customers with natural gas; access to adequate supplies of natural gas
and dependence on third-party storage and transportation facilities for
natural gas supply; the regulatory and pricing policies of federal and
state regulatory agencies; timing of qualifying for ITCs due to delays
or failures to complete planned solar projects and the resulting effect
on our effective tax rate and earnings; the results of legal or
administrative proceedings with respect to claims, rates, environmental
issues, natural gas cost prudence reviews and other matters; risks
related to cyberattack or failure of information technology systems;
changes in rating agency requirements and/or credit ratings and their
effect on availability and cost of capital to our company; the ability
to comply with current and future regulatory requirements; the impact of
volatility in the equity and credit markets on our access to capital;
the impact to the asset values and resulting higher costs and funding
obligations of our pension and post-employment benefit plans as a result
of potential downturns in the financial markets, lower discount rates,
revised actuarial assumptions or impacts associated with the Patient
Protection and Affordable Care Act; commercial and wholesale credit
risks, including the availability of creditworthy customers and
counterparties, and liquidity in the wholesale energy trading market;
accounting effects and other risks associated with hedging activities
and use of derivatives contracts; the ability to optimize our physical
assets; any potential need to record a valuation allowance for our
deferred tax assets; changes to tax laws and regulations; weather and
economic conditions; the ability to comply with debt covenants;
demographic changes in NJR’s service territory and their effect on NJR’s
customer growth; the impact of natural disasters, terrorist activities
and other extreme events on our operations and customers; the costs of
compliance with present and future environmental laws, including
potential climate change-related legislation; environmental-related and
other uncertainties related to litigation or administrative proceedings;
risks related to our employee workforce; and risks associated with the
management of our joint ventures and partnerships, and investment in a
master limited partnership. The aforementioned factors are detailed in
the “Risk Factors” sections of our Form 10-K that we filed with the
Securities and Exchange Commission (SEC) on November 21, 2017, which is
available on the SEC’s Web site at sec.gov. Information included in this
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 release includes the non-GAAP financial measures NFE (losses),
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 (losses) and financial margin exclude unrealized gains or losses on
derivative instruments related to the company’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, net
of applicable tax adjustments as described below. Volatility associated
with the change in value of these financial instruments and physical
commodity contracts is 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 Clean Energy Ventures,
as such the adjustment is related to tax credits generated by Clean
Energy Ventures.

NJNG’s utility gross margin represents the results of revenues less
natural gas costs, sales, expenses and other taxes and regulatory rider
expenses, which are key components of NJR’s operations that move in
relation to each other. Natural gas costs, sales, expenses and other
taxes and regulatory rider expenses are passed through to customers and,
therefore, have no effect on 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 2017 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 7,400 miles of natural gas transportation and
  distribution infrastructure to serve over half a million customers in
  New Jersey’s Monmouth, Ocean and parts of Morris, Middlesex and
  Burlington counties.
• Clean Energy Ventures invests in, owns and operates solar and
  onshore wind projects with a total capacity of more than 319
  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.
• Midstream serves customers from local distributors and
  producers to electric generators and wholesale marketers through its
  50 percent equity ownership in the Steckman Ridge natural gas storage
  facility and its stake in Dominion Midstream Partners, L.P., as well
  as its 20 percent equity interest in the PennEast Pipeline Project.
• NJR 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 more than 1,000 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.

Follow us on Twitter @NJNaturalGas.

“Like” us on facebook.com/NewJerseyNaturalGas.

Download our free NJR investor relations app for iPad, iPhone and Android.

NJR-E

NEW JERSEY RESOURCES
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
			Three Months Ended										Six Months Ended
			March 31,										March 31,
(Thousands, except per share data)			2018					2017					2018					2017
OPERATING REVENUES
Utility			$	317,064				$	295,546				$	526,851				$	481,102
Nonutility			701,979					438,000					1,197,497					793,472
Total operating revenues			1,019,043					733,546					1,724,348					1,274,574
OPERATING EXPENSES
Gas purchases
Utility			96,586					112,445					174,188					173,765
Nonutility			621,223					367,328					1,066,307					705,260
Related parties			2,087					2,072					4,236					4,183
Operation and maintenance			57,749					52,342					112,860					104,570
Regulatory rider expenses			19,604					19,893					31,373					32,494
Depreciation and amortization			22,460					20,328					44,314					39,588
Energy and other taxes			21,542					19,485					38,033					33,586
Total operating expenses			841,251					593,893					1,471,311					1,093,446
OPERATING INCOME			177,792					139,653					253,037					181,128
Other income, net			1,980					5,338					8,907					9,114
Interest expense, net of capitalized interest			11,798					11,436					23,703					22,051
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES			167,974					133,555					238,241					168,191
Income tax provision (benefit)			30,901					23,932					(19,267		)			25,950
Equity in earnings of affiliates			3,193					5,079					6,457					7,390
NET INCOME			$	140,266				$	114,702				$	263,965				$	149,631
EARNINGS PER COMMON SHARE
Basic			$	1.60				$	1.33				$	3.02				$	1.74
Diluted			$	1.59				$	1.32				$	3.01				$	1.72
DIVIDENDS DECLARED PER COMMON SHARE			$	0.2725				$	0.255				$	0.545				$	0.51
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic			87,595					86,275					87,295					86,182
Diluted			87,989					87,101					87,690					86,993

RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES
			Three Months Ended										Six Months Ended
			March 31,										March 31,
(Thousands)			2018					2017					2018					2017
NEW JERSEY RESOURCES
A reconciliation of net income, the closest GAAP financial measurement, to net financial earnings is as follows:
Net income			$	140,266				$	114,702				$	263,965				$	149,631
Add:
Unrealized (gain) loss on derivative instruments and related transactions			(11,608		)			(54,855		)			23,246					(26,553		)
Tax effect			4,716					19,679					(3,343		)			9,922
Effects of economic hedging related to natural gas inventory			6,125					34,328					(19,262		)			16,389
Tax effect			(1,715		)			(12,334		)			6,529					(6,130		)
Net income to NFE tax adjustment			4,278					2,586					6,260					1,230
Net financial earnings			$	142,062				$	104,106				$	277,395				$	144,489
Weighted Average Shares Outstanding
Basic			87,595					86,275					87,295					86,182
Diluted			87,989					87,101					87,690					86,993
A reconciliation of basic earnings per share, the closest GAAP financial measurement, to basic net financial earnings per share is as follows:
Basic earnings per share			$	1.60				$	1.33				$	3.02				$	1.74
Add:
Unrealized (gain) loss on derivative instruments and related transactions			$	(0.13	)			$	(0.64	)			$	0.27				$	(0.31	)
Tax effect			$	0.05				$	0.23				$	(0.04	)			$	0.12
Effects of economic hedging related to natural gas inventory			$	0.07				$	0.40				$	(0.22	)			$	0.19
Tax effect			$	(0.02	)			$	(0.14	)			$	0.08				$	(0.07	)
Net income to NFE tax adjustment			$	0.05				$	0.03				$	0.07				$	0.01
Basic NFE per share			$	1.62				$	1.21				$	3.18				$	1.68
NATURAL GAS DISTRIBUTION
A reconciliation of operating revenue, the closest GAAP financial measurement, to utility gross margin is as follows:
Operating revenues			$	317,064				$	295,546				$	526,851				$	481,102
Less:
Gas purchases			141,988					115,723					226,743					179,909
Energy and other taxes			17,873					16,706					30,277					27,588
Regulatory rider expense			19,604					19,893					31,373					32,494
Utility gross margin			$	137,599				$	143,224				$	238,458				$	241,111
CLEAN ENERGY VENTURES
A reconciliation of net income to net financial earnings is as follows:
Net income			$	5,773				$	20,157				$	75,042				$	24,355
Add:
Net income to NFE tax adjustment			4,278					2,586					6,259					1,230
Net financial earnings			$	10,051				$	22,743				$	81,301				$	25,585
			Three Months Ended										Six Months Ended
(Unaudited)			March 31,										March 31,
(Thousands)			2018					2017					2018					2017
ENERGY SERVICES
The following table is a computation of financial margin:
Operating revenues			$	725,313				$	420,287				$	1,203,294				$	757,468
Less: Gas purchases			622,347					368,482					1,068,557					707,569
Add:
Unrealized (gain) loss on derivative instruments and related transactions			(12,249		)			(56,581		)			21,624					(25,989		)
Effects of economic hedging related to natural gas inventory			6,125					34,328					(19,262		)			16,389
Financial margin			$	96,842				$	29,552				$	137,099				$	40,299
A reconciliation of operating income, the closest GAAP financial measurement, to financial margin is as follows:
Operating income			$	100,872				$	47,025				$	126,992				$	39,630
Add:
Operation and maintenance expense			1,060					4,451					5,480					9,469
Depreciation and amortization			15					17					29					33
Other taxes			1,019					312					2,236					767
Subtotal			102,966					51,805					134,737					49,899
Add:
Unrealized (gain) loss on derivative instruments and related transactions			(12,249		)			(56,581		)			21,624					(25,989		)
Effects of economic hedging related to natural gas inventory			6,125					34,328					(19,262		)			16,389
Financial margin			$	96,842				$	29,552				$	137,099				$	40,299
A reconciliation of net income to net financial earnings is as follows:
Net income			$	75,810				$	30,032				$	86,930				$	25,242
Add:
Unrealized (gain) loss on derivative instruments and related transactions			(12,249		)			(56,581		)			21,624					(25,989		)
Tax effect			4,861					20,301					(2,715		)			9,721
Effects of economic hedging related to natural gas, net of taxes			6,125					34,328					(19,262		)			16,389
Tax effect			(1,715		)			(12,334		)			6,529					(6,130		)
Net financial earnings			$	72,832				$	15,746				$	93,106				$	19,233
Home Services and Other
A reconciliation of net income to net financial earnings is as follows:
Net (loss) income			$	(2,394	)			$	708				$	(10,110	)			$	2,250
Add:
Unrealized loss on derivative instruments and related transactions			(121		)			—					(121		)			—
Tax effect			27					—					27					—
Net financial (loss) earnings			$	(2,488	)			$	708				$	(10,204	)			$	2,250

			Three Months Ended										Six Months Ended
			March 31,										March 31,
(Thousands, except per share data)			2018					2017					2018					2017
NEW JERSEY RESOURCES
Operating Revenues
Natural Gas Distribution			$	317,064				$	295,546				$	526,851				$	481,102
Clean Energy Ventures			12,866					12,943					26,862					20,510
Energy Services			725,313					420,287					1,203,294					757,468
Midstream			—					—					—					—
Home Services and Other			8,261					8,504					18,218					18,510
Sub-total			1,063,504					737,280					1,775,225					1,277,590
Eliminations			(44,461		)			(3,734		)			(50,877		)			(3,016		)
Total			$	1,019,043				$	733,546				$	1,724,348				$	1,274,574
Operating Income (loss)
Natural Gas Distribution			$	83,597				$	95,961				$	134,936				$	147,333
Clean Energy Ventures			(2,628		)			(1,359		)			(3,163		)			(5,652		)
Energy Services			100,872					47,025					126,992					39,630
Midstream			(593		)			(246		)			(966		)			(402		)
Home Services and Other			(3,958		)			(1,103		)			(5,488		)			(2,559		)
Sub-total			177,290					140,278					252,311					178,350
Eliminations			502					(625		)			726					2,778
Total			$	177,792				$	139,653				$	253,037				$	181,128
Equity in Earnings of Affiliates
Midstream			$	4,068				$	6,119				$	8,197				$	9,450
Eliminations			(875		)			(1,040		)			(1,740		)			(2,060		)
Total			$	3,193				$	5,079				$	6,457				$	7,390
Net income (loss)
Natural Gas Distribution			$	60,442				$	60,233				$	94,551				$	90,581
Clean Energy Ventures			5,773					20,157					75,042					24,355
Energy Services			75,810					30,032					86,930					25,242
Midstream			1,315					4,948					18,826					7,335
Home Services and Other			(2,394		)			708					(10,110		)			2,250
Sub-total			140,946					116,078					265,239					149,763
Eliminations			(680		)			(1,376		)			(1,274		)			(132		)
Total			$	140,266				$	114,702				$	263,965				$	149,631
Net financial earnings (loss)
Natural Gas Distribution			$	60,442				$	60,233				$	94,551				$	90,581
Clean Energy Ventures			10,051					22,743					81,301					25,585
Energy Services			72,832					15,746					93,106					19,233
Midstream			1,315					4,948					18,826					7,335
Home Services and Other			(2,488		)			708					(10,204		)			2,250
Sub-total			142,152					104,378					277,580					144,984
Eliminations			(90		)			(272		)			(185		)			(495		)
Total			$	142,062				$	104,106				$	277,395				$	144,489
Throughput (Bcf)
NJNG, Core Customers			41.8					41.3					72.5					74.1
NJNG, Off System/Capacity Management			36.7					42.5					75.4					86.1
Energy Services Fuel Mgmt. and Wholesale Sales			168.4					131.6					331.5					257.8
Total			246.9					215.4					479.4					418.0
Common Stock Data
Yield at March 31			2.7		%			2.6		%			2.7		%			2.6		%
Market Price
High			$	40.40				$	39.95				$	45.45				$	39.95
Low			$	35.55				$	33.70				$	35.55				$	30.46
Close at March 31			$	40.10				$	39.60				$	40.10				$	39.60
Shares Out. at March 31			87,656					86,364					87,656					86,364
Market Cap. at March 31			$	3,515,006				$	3,420,014				$	3,515,006				$	3,420,014

			Three Months Ended										Six Months Ended
(Unaudited)			March 31,										March 31,
(Thousands, except customer and weather data)			2018					2017					2018					2017
NATURAL GAS DISTRIBUTION
Utility Gross Margin
Operating revenues			$	317,064				$	295,546				$	526,851				$	481,102
Less:
Gas purchases			141,988					115,723					226,743					179,909
Energy and other taxes			17,873					16,706					30,277					27,588
Regulatory rider expense			19,604					19,893					31,373					32,494
Total Utility Gross Margin			$	137,599				$	143,224				$	238,458				$	241,111
Utility Gross Margin, Operating Income and Net Income
Residential			$	94,555				$	96,599				$	159,290				$	159,097
Commercial, Industrial & Other			19,230					21,119					33,148					34,815
Firm Transportation			20,177					21,165					36,437					37,450
Total Firm Margin			133,962					138,883					228,875					231,362
Interruptible			1,277					1,417					2,788					3,041
Total System Margin			135,239					140,300					231,663					234,403
Off System/Capacity Management/FRM/Storage Incentive			2,360					2,924					6,795					6,708
Total Utility Gross Margin			137,599					143,224					238,458					241,111
Operation and maintenance expense			39,259					33,768					74,650					66,986
Depreciation and amortization			13,353					12,263					26,136					24,293
Other taxes not reflected in gross margin			1,390					1,232					2,736					2,499
Operating Income			$	83,597				$	95,961				$	134,936				$	147,333
Net Income			$	60,442				$	60,233				$	94,551				$	90,581
Throughput (Bcf)
Residential			22.5					19.7					36.1					32.3
Commercial, Industrial & Other			4.2					4.4					6.8					6.8
Firm Transportation			6.6					5.6					11.2					10.1
Total Firm Throughput			33.3					29.7					54.1					49.2
Interruptible			8.5					11.6					18.4					24.9
Total System Throughput			41.8					41.3					72.5					74.1
Off System/Capacity Management			36.7					42.5					75.4					86.1
Total Throughput			78.5					83.8					147.9					160.2
Customers
Residential			467,014					454,464					467,014					454,464
Commercial, Industrial & Other			28,926					28,623					28,926					28,623
Firm Transportation			40,873					44,837					40,873					44,837
Total Firm Customers			536,813					527,924					536,813					527,924
Interruptible			30					33					30					33
Total System Customers			536,843					527,957					536,843					527,957
Off System/Capacity Management*			28					15					28					15
Total Customers			536,871					527,972					536,871					527,972
*The number of customers represents those active during the last month of the period.
Degree Days
Actual			2,417					2,191					3,994					3,685
Normal			2,454					2,465					4,030					4,054
Percent of Normal			98.5		%			88.9		%			99.1		%			90.9		%

			Three Months Ended										Six Months Ended
(Unaudited)			March 31,										March 31,
(Thousands, except customer, SREC and megawatt)			2018					2017					2018					2017
CLEAN ENERGY VENTURES
Operating Revenues
SREC sales			$	5,438				$	7,011				$	12,294				$	9,497
Wind electricity sales and other			4,103					3,674					8,288					6,718
Solar electricity sales and other			1,418					789					2,543					1,534
Sunlight Advantage			1,907					1,469					3,737					2,761
Total Operating Revenues			$	12,866				$	12,943				$	26,862				$	20,510
Depreciation and Amortization			$	8,928				$	7,923				$	17,863				$	14,964
Operating (Loss)			$	(2,628	)			$	(1,359	)			$	(3,163	)			$	(5,652	)
Income Tax Benefit			$	12,722				$	24,756				$	86,710				$	36,643
Net Income			$	5,773				$	20,157				$	75,042				$	24,355
Net Financial Earnings			$	10,051				$	22,743				$	81,301				$	25,585
Solar Renewable Energy Certificates Generated			46,613					27,993					88,056					69,436
Solar Renewable Energy Certificates Sold			45,361					32,350					55,680					42,669
Solar Megawatts Eligible for ITCs			1.8					3.5					3.6					6.3
Solar Megawatts Under Construction			43.5					25.5					43.5					25.5
Wind Megawatts Installed/Acquired			—					—					—					39.9
ENERGY SERVICES
Operating Income
Operating revenues			$	725,313				$	420,287				$	1,203,294				$	757,468
Less:
Gas purchases			622,347					368,482					1,068,557					707,569
Operation and maintenance expense			1,060					4,451					5,480					9,469
Depreciation and amortization			15					17					29					33
Energy and other taxes			1,019					312					2,236					767
Operating Income			$	100,872				$	47,025				$	126,992				$	39,630
Net Income			$	75,810				$	30,032				$	86,930				$	25,242
Financial Margin			$	96,842				$	29,552				$	137,099				$	40,299
Net Financial Earnings			$	72,832				$	15,746				$	93,106				$	19,233
Gas Sold and Managed (Bcf)			168.4					131.6					331.5					257.8
MIDSTREAM
Equity in Earnings of Affiliates			$	4,068				$	6,119				$	8,197				$	9,450
Other Income, Net			$	1,356				$	991				$	2,577				$	1,908
Income Tax Provision (Benefit)			$	3,131				$	1,502				$	(9,712	)			$	3,151
Net Income			$	1,315				$	4,948				$	18,826				$	7,335
HOME SERVICES AND OTHER
Operating Revenues			$	8,261				$	8,504				$	18,218				$	18,510
Operating Loss			$	(3,958	)			$	(1,103	)			$	(5,488	)			$	(2,559	)
Other Income, Net			$	303				$	3,001				$	5,906				$	5,828
Net (Loss) Income			$	(2,394	)			$	708				$	(10,110	)			$	2,250
Net Financial (Loss) Earnings			$	(2,488	)			$	708				$	(10,204	)			$	2,250
Total Service Contract Customers at March 31			110,883					112,820					110,883					112,820

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