NEW JERSEY RESOURCES CORP

NEW JERSEY RESOURCES CORP Annual Report Summary - Plain English Edition

Hey there! Let’s break down how New Jersey Resources (NJR) did this past year, like we’re chatting over coffee. No fancy terms—just the stuff that matters to regular folks who want to know if this stock’s worth their hard-earned cash.

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1. What NJR Does (Simplified)

NJR isn’t just your local gas company anymore. They’ve got five main areas:

• Natural Gas Distribution (pipes gas to homes/businesses and sells wholesale).
• Clean Energy Ventures (solar farms—they’re using tax credits to save money long-term).
• Energy Trading (buying/selling gas on open markets).
• Gas Storage (they’re holding 30.8 billion cubic feet of gas for 2025—enough to heat ~308,000 homes for a year).
• Home Services (like a "Netflix subscription" for furnace repairs).

Why it matters: They’re now splitting these businesses clearly in reports, so investors can see exactly where money comes from.

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2. The Money Talk

This Year vs. Last Year:

• Stable Core Business (Gas Distribution): Up 28% to $1.3B (from $1.02B).
• Risky Side (Energy Trading): Dropped 23% to $735M (blame wild energy prices).
• Total Profit: Rose 18% to $265M (thanks to cost controls and selling assets).
• Dividends: Increased to $1.66/share annually (28 straight years of payouts!).

Smart Moves:

• Stored $184M worth of natural gas as a safety net for price spikes.
• Used solar tax credits to lower future tax bills.
• Kept expense growth at just 2.3% despite inflation.

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3. The Risks (Don’t Skip This!)

• Gas Price Rollercoaster: Their stored gas ($184M) could lose value if prices crash.
• Fixed Costs: $23M in pipeline/storage fees due through 2025—like paying for a gym membership you never use.
• Pensions: $23M locked in retirement benefits—if investments underperform, NJR might need to cover the gap.
• Regulatory Hurdles: Waiting on approvals to pass $58M in environmental costs to customers.
• Cyber Threats: Energy companies are hacker targets (though NJR’s doing more drills).
• “Guesswork” Valuations: Some energy contracts use shaky estimates (labeled “Level 3” in reports)—could swing profits unexpectedly.

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4. How They Compare

• Transparency Edge: NJR breaks down segments better than rivals (e.g., separating gas distribution from storage).
• Dividend Streak: 28 years of payouts is rare in utilities—shows stability.

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Bottom Line for Investors

The Good:

• Profits grew faster than revenue (smart cost control).
• Solar investments and gas storage add future flexibility.
• Reliable dividend with a long track record.

Watch Out For:

• Energy trading volatility (23% drop this year).
• Stored gas value and fixed fees ($184M + $23M).
• Regulatory delays on cost recovery.

Verdict: NJR looks stable for dividend seekers, but avoid if you can’t handle energy market swings. Their clean energy push and storage strategy could pay off long-term—if gas prices cooperate.

Always do your own research—this isn’t financial advice, just a friendly chat! 😊