EX-99.1 2 c00274exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
(GRAPHIC)
Date: May 5, 2010   Media Contact:
    Michael Kinney
732-938-1031
mkinney@njresources.com
Investor Contact:
    Dennis Puma
732-938-1229
dpuma@njresources.com
NEW JERSEY RESOURCES REPORTS FISCAL 2010 SECOND-QUARTER EARNINGS;
REAFFIRMS FISCAL 2010 GUIDANCE
WALL, NJ — New Jersey Resources (NYSE:NJR) today reported earnings for the second quarter of fiscal 2010 and reaffirmed its guidance for fiscal 2010.
A reconciliation of NJR’s net income to net financial earnings for the three and six months ended March 31 in fiscal years 2010 and 2009 is provided below:
                                 
    Three Months Ended     Six Months Ended  
    March 31,     March 31,  
(Thousands)   2010     2009     2010     2009  
Net income
   $ 74,217     $ 31,988     $ 126,119     $ 60,260  
Add:
                                
Unrealized (gain) loss on derivative instruments and related transactions, net of taxes
     (7,845 )     25,763       (11,950 )     31,879  
Effects of economic hedging related to natural gas, net of taxes
     (2,361 )     14,677       (22,745 )     12,767  
 
                        
Net financial earnings
   $ 64,011     $ 72,428     $ 91,424     $ 104,906  
 
                        
 
                                
Weighted Average Shares Outstanding
                               
Basic
     41,418       42,305       41,517       42,238  
Diluted
     41,726       42,693       41,824       42,598  
 
                        
 
                                
Basic earnings per share
   $ 1.79     $ 0.76     $ 3.04     $ 1.43  
 
                        
Basic net financial earnings per share
   $ 1.55     $ 1.71     $ 2.20     $ 2.48  
 
                        
Net financial earnings is a financial measure not calculated in accordance with generally accepted accounting principles (GAAP) of the United States as it excludes all unrealized, and certain realized, gains and losses associated with derivative instruments. For further discussion of this financial measure, as well as reconciliation to the most comparable GAAP measure, please see the explanation below under “Additional Non-GAAP Financial Information.”
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NEW JERSEY RESOURCES REPORTS FISCAL 2010 SECOND-QUARTER EARNINGS;
REAFFIRMS FISCAL 2010 GUIDANCE
Page 2 of 11
•   NJR Net Financial Earnings Decrease
Year-to-date net financial earnings at NJR totaled $91.4 million, or $2.20 per share, compared with $105 million, or $2.48 per share, during the same period last year. For the three-month period ending March 31, 2010, net financial earnings were $64 million, compared with $72.4 million during the same period last year. The decrease is due primarily to lower results at NJR Energy Services (NJRES), partially offset by improved earnings from the company’s investment in the Steckman Ridge storage project.
“Despite the challenges posed by a changing market, we are making steady progress toward the 19th consecutive year of improved financial performance for our shareowners,” said Laurence M. Downes, chairman and CEO of NJR. “Our employees continue to provide real value to all our stakeholders, and affirm our reputation for providing consistent results.”
•   Net Financial Earnings Guidance Reaffirmed
Subject to the factors discussed at the end of this release under “Forward-Looking Statements,” NJR is reaffirming the net financial earnings guidance of $2.45 to $2.55 per basic share announced in a Form 8-K filed April 13, 2010. Though quarterly and fiscal year-to-date net financial earnings are lower when compared with the same periods last year, the company expects that net financial earnings for the third and fourth fiscal quarters of 2010 will compare favorably with NJR’s performance in those same periods in fiscal 2009. The improvement in the second half of the fiscal year is expected to be due to a partial reversal of the timing of gross margin from NJNG’s incentive programs, continued customer growth, the impact of recent regulatory initiatives such as the Accelerated Infrastructure Program at NJNG, the earnings contribution from NJR’s Steckman Ridge investment and lower expenses at NJRES.
Overall, NJR expects New Jersey Natural Gas (NJNG) to be the major contributor to fiscal 2010 net financial earnings, accounting for 60 to 70 percent of the total. In addition, NJR estimates that the contribution from NJRES will continue to be approximately 20 to 30 percent. Midstream Assets is expected to contribute between 5 and 10 percent of total fiscal 2010 net financial earnings.
•   New Jersey Natural Gas Update
Fiscal 2010 year-to-date earnings at NJNG were $64 million, compared with $64.7 million for the first six months of fiscal 2009. For the three months ended March 31, 2010, earnings were $40.5 million, compared with $41.6 million in the same period last year. The decrease in both periods is due primarily to lower utility gross margin generated through gas supply incentive programs, which is expected to partially reverse in the third and fourth quarters.
New customer growth has been spurred by the price advantage natural gas continues to hold over other home heating fuels. During the first six months of fiscal 2010, NJNG added 2,491 new customers. Of these, 1,241 converted from other fuels. Additionally, 284 existing customers added natural gas heat and other services. These new customers are expected to contribute approximately $1.3 million to utility gross margin annually.
•   Midstream Assets Continues Growth
Net income from Midstream Assets more than doubled during the first six months of fiscal 2010 with earnings of $3.4 million compared with $1.2 million over the same six-month period last year. Second quarter earnings in fiscal 2010 were $1.5 million, compared with $725,000 in fiscal 2009. The increase reflects ongoing operations at Steckman Ridge, the primary contributor to this segment.
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NEW JERSEY RESOURCES REPORTS FISCAL 2010 SECOND-QUARTER EARNINGS;
REAFFIRMS FISCAL 2010 GUIDANCE
Page 3 of 11
Steckman Ridge is a 12 billion cubic feet working gas storage facility located in Southwestern Pennsylvania, an area abundant in natural gas supplies. Its strategic location provides proximity to companies needing a place to store natural gas extracted from the Marcellus Shale, as well as the Northeast region, a large user of natural gas.
•   Utility Offers Bill Credits, Regulatory Filings
Due to declining wholesale natural gas prices, NJNG notified the Board of Public Utilities (BPU) it would provide customers with bill credits in February, March and April. A total of nearly $57 million was expected to be returned to customers during the three-month period, saving the average residential customer approximately 9.5 percent of their total annual bill.
Additionally, NJNG filed with the BPU for approval to implement a series of energy-efficiency and renewable energy programs for residential and commercial customers designed to help customers save money and energy, reduce greenhouse gas emissions and stimulate market growth. The proposed programs build upon the existing SAVEGREEN Project™ by expanding the number of appliances covered and providing rebates as high as $2,000 for WARM and COOLAdvantage participants, as well as affordable financing options for energy-efficient home improvements. The filing also requests approval of a program to provide financial assistance to certain income-eligible households that wish to convert to natural gas. An expanded program for commercial customers offers enhanced rebates and promotes Combined Heat and Power projects, which draw heat and electricity from a single source such as natural gas. In addition, NJNG would also launch a Solar Energy Program that provides NJNG’s residential customers the ability to lease solar panels for their home with no upfront costs or maintenance fees. If approved, the programs would commence in October 2010, but would have no impact to customer bills until October 2011.
NJNG has proposed that these programs run for three years from the date of BPU approval. If fully subscribed, the company’s investment would be approximately $102 million to be recovered through NJNG’s current energy-efficiency rider. NJNG would recover the program costs over 15 years at its weighted average cost of capital of 7.76 percent, which includes a 10.3 percent return on shareowner equity.
•   NJR Energy Services Second-Quarter Results
NJRES, NJR’s wholesale energy subsidiary, reported net financial earnings for the six-month period ending March 31, 2010 of $26 million compared with $40.5 million in the same period last year. Net financial earnings for the second quarter of fiscal 2010 were $23.5 million compared with $31.1 million in the same period last year. The decreases were due primarily to a decline in the value of transportation spreads as storage supplies proved adequate to supply the 2009-2010 winter heating season, which was about 1.5 percent warmer than normal. Additionally, natural gas prices were significantly lower than in prior years and supplies abundant, resulting in lower volatility in the wholesale market and fewer opportunities for asset optimization.
•   NJR Home Services Announces New Solar Leasing Program
NJR Home Services, an unregulated subsidiary of NJR, announced it will offer homeowners the opportunity to lease solar panels for about $52 per month for a six-kilowatt system over a 20-year period. The initial offer available to approximately 130 residential customers would result in company
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NEW JERSEY RESOURCES REPORTS FISCAL 2010 SECOND-QUARTER EARNINGS;
REAFFIRMS FISCAL 2010 GUIDANCE
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investments up to $4 million, assuming full participation. These investments will qualify the company for a 30 percent federal investment tax credit along with any available rebates from New Jersey’s Clean Energy Program. The current rebate for residential units is $1.35 per kilowatt. In addition, the energy produced will generate Solar Renewable Energy Certificates (SRECs), which can be sold to electric Load Serving Entities in New Jersey to meet their renewable energy requirements.
Webcast Information
NJR will host a live webcast to discuss its financial results today at 9 a.m. ET. A few minutes prior to the webcast, go to www.njliving.com and select “New Jersey Resources” from the top navigation bar. Choose “Investor Relations,” then click just below the microphone under the heading “Latest Webcast” on the Investor Relations home page.
Forward-Looking Statements
This news release contains 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 to differ materially from the company’s expectations include, but are not limited to, weather, economic conditions and demographic changes in NJNG’s service territory, rate of customer growth, volatility of natural gas commodity prices and its impact on customer usage and NJR Energy Services operations, changes in rating agency requirements and/or credit ratings and their effect on availability and cost of capital to the company, conditions in the credit markets and their potential impact on the company’s access to capital and borrowing costs, the company’s ability to comply with its debt covenants, increased interest costs resulting from failures in the market for auction rate securities, the impact of the company’s risk management efforts, including commercial and wholesale credit risks, changes in the costs of providing pension and post-employment benefits to current and former employees, the company’s ability to maintain effective internal controls, the company’s ability to obtain governmental approvals, property rights and/or financing for the construction, development and operation of its non-regulated energy investments, risks associated with the management of the company’s joint ventures and partnerships, the impact of regulation (including the regulation of rates), the outcome of any future base rate cases, fluctuations in energy-related commodity prices, customer conversions, 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, an adequate number of appropriate counterparties, sufficient liquidity in the energy trading market, the disallowance of recovery of environmental-related expenditures, environmental and other litigation and other uncertainties, the effects and impacts of inflation, change in accounting pronouncements issued by the appropriate standard setting bodies and terrorist attacks or threatened attacks on energy facilities or unrelated energy companies. 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. More detailed information about these factors is set forth under the heading “Risk Factors” in NJR’s filings with the Securities and Exchange Commission (SEC) including its most recent Form 10-K.
Non-GAAP Financial Information
This press release includes the non-GAAP measures net financial earnings (losses), financial margin and utility gross margin. A reconciliation of these non-GAAP financial measures to the most directly
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NEW JERSEY RESOURCES REPORTS FISCAL 2010 SECOND-QUARTER EARNINGS;
REAFFIRMS FISCAL 2010 GUIDANCE
Page 5 of 11
comparable financial measures calculated and reported in accordance with GAAP, can be found below. As an indicator of the company’s operating performance, these measures should not be considered an alternative to, or more meaningful than, operating income as determined in accordance with GAAP.
Net financial earnings (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 NJRES. Volatility associated with the change in value of these financial and physical commodity contracts is reported in 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 as opposed to when the planned transaction ultimately is settled. NJNG’s utility gross margin represents the results of revenues less natural gas costs, sales and other taxes and regulatory rider expenses, which are key components of the company’s operations that move in relation to each other. Management uses these non-GAAP financial measures as supplemental measures to other GAAP results to provide a more complete understanding of the company’s performance. Management believes these non-GAAP measures are more reflective of the company’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 Form 10-K, Item 7.
About New Jersey Resources
New Jersey Resources, a Fortune 1000 company, provides reliable energy and natural gas services including transportation, distribution, and asset management in states from the Gulf Coast to the New England regions, including the Mid-Continent region, the West Coast and Canada, while investing in and maintaining an extensive infrastructure to support future growth. With over $2.5 billion in annual revenues, NJR safely and reliably operates and maintains 6,700 miles of natural gas transportation and distribution infrastructure to serve nearly half a million customers; develops and manages a diverse portfolio of nearly 2.3 Bcf/day of transportation capacity and more than 50 Bcf of storage capacity; and provides appliance installation, repair and contract service to approximately 144,000 homes and businesses. Additionally, NJR holds investments in midstream assets through equity partnerships including Steckman Ridge and Iroquois. Through Conserve to Preserve®, NJR is helping customers save energy and money by promoting conservation and encouraging efficiency. For more information about NJR, visit www.njliving.com.
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Reconciliation of Non-GAAP Performance Measures
NEW JERSEY RESOURCES
A reconciliation of Net income at NJR to net financial earnings, is as follows:
                                 
    Three Months Ended     Six Months Ended  
    March 31,     March 31,  
(Thousands)   2010     2009     2010     2009  
Net income
   $ 74,217     $ 31,988     $ 126,119     $ 60,260  
Add:
                                
Unrealized (gain) loss on derivative instruments and related transactions, net of taxes
     (7,845 )     25,763       (11,950 )     31,879  
Effects of economic hedging related to natural gas, net of taxes
     (2,361 )     14,677       (22,745 )     12,767  
 
                        
Net financial earnings
   $ 64,011     $ 72,428     $ 91,424     $ 104,906  
 
                        
WEIGHTED AVERAGE SHARES OUTSTANDING
                                
BASIC
     41,418       42,305       41,517       42,238  
DILUTED
     41,726       42,693       41,824       42,598  
 
                        
Basic net financial earnings per share
   $ 1.55     $ 1.71     $ 2.20     $ 2.48  
 
                        
ENERGY SERVICES
The following table is a computation of financial margin at Energy Services:
                                 
    Three Months Ended     Six Months Ended  
    March 31,     March 31,  
(Thousands)   2010     2009     2010     2009  
Operating revenues
   $ 494,889     $ 472,763     $ 842,366     $ 935,857  
Gas purchases
     434,537       475,989       731,994       916,666  
Add:
                                
Unrealized (gain) loss on derivative instruments and related transactions
     (15,493 )     34,348       (23,235 )     36,165  
Effects of economic hedging related to natural gas inventory
     (3,773 )     24,072       (36,886 )     19,797  
 
                        
Financial margin
   $ 41,086     $ 55,194     $ 50,251       75,153  
 
                        
A reconciliation of Operating income at Energy Services, the closest GAAP financial measurement, to the financial margin is as follows:
                                 
    Three Months Ended     Six Months Ended  
    March 31,     March 31,  
(Thousands)   2010     2009     2010     2009  
Operating income (loss)
   $ 57,205       ($7,741 )   $ 102,395     $ 9,936  
Add:
                                
Operation and maintenance expense
     2,745       3,868       6,978       8,228  
Depreciation and amortization
     49       51       99       102  
Other taxes
     353       596       900       925  
 
                        
Subtotal — Gross margin
   $ 60,352       (3,226 )   $ 110,372       19,191  
Add:
                                
Unrealized (gain) loss on derivative instruments and related transactions
     (15,493 )     34,348       (23,235 )     36,165  
Effects of economic hedging related to natural gas inventory
     (3,773 )     24,072       (36,886 )     19,797  
 
                        
Financial margin
   $ 41,086     $ 55,194     $ 50,251     $ 75,153  
 
                        

 

 

 

Page 7 of 11
ENERGY SERVICES (continued)
A reconciliation of Energy Services Net income to net financial earnings, is as follows:
                                 
    Three Months Ended     Six Months Ended  
    March 31,     March 31,  
(Thousands)   2010     2009     2010     2009  
Net income (loss)
   $ 35,441       ($4,540 )   $ 63,085     $ 6,342  
Add:
                                
Unrealized (gain) loss on derivative instruments and related transactions, net of taxes
     (9,563 )     20,941       (14,329 )     21,352  
Effects of economic hedging related to natural gas, net of taxes
     (2,361 )     14,677       (22,745 )     12,767  
 
                        
Net financial earnings
   $ 23,517     $ 31,078     $ 26,011     $ 40,461  
 
                        
Retail and Other
A reconciliation of Retail and Other Net income to net financial earnings, is as follows:
                                 
    Three Months Ended     Six Months Ended  
    March 31,     March 31,  
(Thousands)   2010     2009     2010     2009  
Net (loss)
     ($3,244 )     ($5,785 )     ($4,206 )     ($11,923 )
Add:
                                
Unrealized loss on derivative instruments, net of taxes
     1,748       4,822       2,251       10,527  
 
                        
Net financial (loss)
     ($1,496 )     ($963 )     ($1,955 )     ($1,396 )
 
                        

 

 

 

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NEW JERSEY RESOURCES
CONSOLIDATED STATEMENTS OF INCOME
                                 
    Three Months Ended     Six Months Ended  
    March 31,     March 31,  
(Thousands, except per share data)   2010     2009     2010     2009  
OPERATING REVENUES
                                
Utility
   $ 430,706     $ 469,261     $ 689,181     $ 810,169  
Nonutility
     487,640       468,255       838,711       928,651  
 
                        
Total operating revenues
     918,346       937,516       1,527,892       1,738,820  
 
                        
OPERATING EXPENSES
                                
Gas purchases
                                
Utility
     276,104       314,091       431,054       544,543  
Nonutility
     427,273       473,827       721,716       914,465  
Operation and maintenance
     37,018       37,365       73,309       73,773  
Regulatory rider expenses
     21,184       20,744       34,857       34,305  
Depreciation and amortization
     7,931       7,508       15,800       14,869  
Energy and other taxes
     26,824       31,981       43,759       55,614  
 
                        
Total operating expenses
     796,334       885,516       1,320,495       1,637,569  
 
                        
OPERATING INCOME
     122,012       52,000       207,397       101,251  
Other income
     1,028       1,058       2,147       1,916  
Interest expense, net
     5,291       4,219       10,708       10,766  
 
                        
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF AFFILIATES
     117,749       48,839       198,836       92,401  
Income tax provision
     45,258       17,638       76,187       33,442  
Equity in earnings of affiliates, net of tax
     1,726       787       3,470       1,301  
 
                        
NET INCOME
   $ 74,217     $ 31,988     $ 126,119     $ 60,260  
 
                        
 
                                
EARNINGS PER COMMON SHARE
                                
BASIC
   $ 1.79     $ 0.76     $ 3.04     $ 1.43  
DILUTED
   $ 1.78     $ 0.75     $ 3.02     $ 1.41  
 
                        
DIVIDENDS PER COMMON SHARE
   $ 0.34     $ 0.31     $ 0.68     $ 0.62  
 
                        
 
                                
AVERAGE SHARES OUTSTANDING
                                
BASIC
     41,418       42,305       41,517       42,238  
DILUTED
     41,726       42,693       41,824       42,598  
 
                        

 

 

 

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NEW JERSEY RESOURCES
                                 
    Three Months Ended     Six Months Ended  
    March 31,     March 31,  
(Thousands, except per share data)   2010     2009     2010     2009  
Operating Revenues
                                
Natural Gas Distribution
   $ 438,753     $ 469,261     $ 697,228     $ 810,169  
Energy Services
     494,889       472,763       842,366       935,857  
Midstream Assets
     —       —       —       —  
Retail and Other
     3,701       (2,350 )     9,745       (5,004 )
 
                        
Sub-total
     937,343       939,674       1,549,339       1,741,022  
 
                        
Eliminations
     (18,997 )     (2,158 )     (21,447 )     (2,202 )
 
                        
Total
   $ 918,346     $ 937,516     $ 1,527,892     $ 1,738,820  
 
                        
 
                                
Operating Income (Loss)
                                
Natural Gas Distribution
   $ 68,413     $ 69,531     $ 109,684     $ 111,717  
Energy Services
     57,205       (7,741 )     102,395       9,936  
Midstream Assets
     (256 )     (118 )     (452 )     (223 )
Retail and Other
     (4,420 )     (9,726 )     (6,277 )     (20,279 )
 
                        
Sub-total
     120,942       51,946       205,350       101,151  
 
                        
Eliminations
     1,070       54       2,047       100  
 
                        
Total
   $ 122,012     $ 52,000     $ 207,397     $ 101,251  
 
                        
 
                                
Net Income (Loss)
                                
Natural Gas Distribution
   $ 40,476     $ 41,588     $ 63,978     $ 64,662  
Energy Services
     35,441       (4,540 )     63,085       6,342  
Midstream Assets
     1,514       725       3,390       1,179  
Retail and Other
     (3,244 )     (5,785 )     (4,206 )     (11,923 )
 
                        
Sub-total
     74,187       31,988       126,247       60,260  
 
                        
Eliminations
     30       0       (128 )     0  
 
                        
Total
   $ 74,217     $ 31,988     $ 126,119     $ 60,260  
 
                        
 
                                
Net Financial Earnings (Loss)
                                
Natural Gas Distribution
   $ 40,476     $ 41,588     $ 63,978     $ 64,662  
Energy Services
     23,517       31,078       26,011       40,461  
Midstream Assets
     1,514       725       3,390       1,179  
Retail and Other
     (1,496 )     (963 )     (1,955 )     (1,396 )
 
                        
Total
   $ 64,011     $ 72,428     $ 91,424     $ 104,906  
 
                        
 
                                
Throughput (Bcf)
                                
NJNG, Core Customers
     30.0       30.7       49.1       51.1  
NJNG, Off System/Capacity Management
     22.0       20.1       44.1       32.3  
NJRES Fuel Mgmt. and Wholesale Sales
     85.0       82.9       164.4       154.0  
 
                        
Total
     137.0       133.7       257.6       237.4  
 
                        
 
                                
Common Stock Data
                                
Yield at March 31
     3.6 %     3.6 %     3.6 %     3.6 %
Market Price
                                
High
   $ 38.17     $ 42.37     $ 38.55     $ 42.37  
Low
   $ 33.49     $ 29.95     $ 33.49     $ 21.90  
Close at March 31
   $ 37.56     $ 33.98     $ 37.56     $ 33.98  
Shares Out. at March 31
     41,290       42,313       41,290       42,313  
Market Cap. at March 31
   $ 1,550,852     $ 1,437,796     $ 1,550,852     $ 1,437,796  

 

 

 

Page 10 of 11
NATURAL GAS DISTRIBUTION
                                 
    Three Months Ended     Six Months Ended  
(Unaudited)   March 31,     March 31,  
(Thousands, except customer & weather data)   2010     2009     2010     2009  
Utility Gross Margin
                                
Operating revenues
   $ 438,753     $ 469,261     $ 697,228     $ 810,169  
Less:
                                
Gas purchases
     288,814       314,091       444,088       544,543  
Energy and other taxes
     24,685       29,791       39,217       51,378  
Regulatory rider expense
     21,208       20,744       34,920       34,305  
 
                        
Total Utility Gross Margin
   $ 104,046     $ 104,635     $ 179,003     $ 179,943  
 
                        
 
                                
Utility Gross Margin and Operating Income
                                
Residential
   $ 71,878     $ 72,060     $ 121,828     $ 121,747  
Commercial, Industrial & Other
     16,681       17,966       29,672       31,347  
Firm Transportation
     12,466       10,420       21,960       18,851  
 
                        
Total Firm Margin
     101,025       100,446       173,460       171,945  
Interruptible
     78       70       162       155  
 
                        
Total System Margin
     101,103       100,516       173,622       172,100  
 
                        
Off System/Capacity Management/FRM/Storage Incentive
     2,943       4,119       5,381       7,843  
 
                        
Total Utility Gross Margin
     104,046       104,635       179,003       179,943  
 
                        
Operation and maintenance expense
     26,817       26,836       51,695       51,786  
Depreciation and amortization
     7,722       7,291       15,382       14,452  
Other taxes not reflected in gross margin
     1,094       977       2,242       1,988  
 
                        
Operating Income
   $ 68,413     $ 69,531     $ 109,684     $ 111,717  
 
                        
 
                                
Throughput (Bcf)
                                
Residential
     20.5       21.4       32.9       34.7  
Commercial, Industrial & Other
     4.1       4.7       6.7       7.9  
Firm Transportation
     4.4       3.9       7.7       6.9  
 
                        
Total Firm Throughput
     29.0       30.0       47.3       49.5  
Interruptible
     1.0       0.7       1.8       1.6  
 
                        
Total System Throughput
     30.0       30.7       49.1       51.1  
 
                        
Off System/Capacity Management
     22.0       20.1       44.1       32.3  
 
                        
Total Throughput
     52.0       50.8       93.2       83.4  
 
                        
Customers
                                
Residential
     437,759       439,054       437,759       439,054  
Commercial, Industrial & Other
     28,303       30,102       28,303       30,102  
Firm Transportation
     24,094       17,881       24,094       17,881  
 
                        
Total Firm Customers
     490,156       487,037       490,156       487,037  
Interruptible
     45       46       45       46  
 
                        
Total System Customers
     490,201       487,083       490,201       487,083  
 
                        
Off System/Capacity Management*
     34       32       34       32  
 
                        
Total Customers
     490,235       487,115       490,235       487,115  
 
                        
 
                                
*     The number of customers represents those active during the last month of the period.
 
                                
Degree Days
                                
Actual
     2,424       2,578       4,000       4,278  
Normal
     2,481       2,474       4,145       4,144  
 
                        
Percent of Normal
     97.7 %     104.2 %     96.5 %     103.2 %
 
                        

 

 

 

Page 11 of 11
ENERGY SERVICES
                                 
    Three Months Ended     Six Months Ended  
(Unaudited)   March 31,     March 31,  
(Thousands, except customer)   2010     2009     2010     2009  
Operating Revenues
   $ 494,889     $ 472,763     $ 842,366     $ 935,857  
Gas Purchases
     434,537       475,989       731,994       916,666  
 
                        
Gross Margin
     60,352       (3,226 )     110,372       19,191  
Operation and maintenance expense
     2,745       3,868       6,978       8,228  
Depreciation and amortization
     49       51       99       102  
Energy and other taxes
     353       596       900       925  
 
                        
Operating Income (Loss)
   $ 57,205       ($7,741 )   $ 102,395     $ 9,936  
 
                        
 
                                
Net Income (Loss)
   $ 35,441       ($4,540 )   $ 63,085     $ 6,342  
 
                        
 
                                
Financial Margin
   $ 41,086     $ 55,194     $ 50,251     $ 75,153  
 
                        
 
                                
Net Financial Earnings
   $ 23,517     $ 31,078     $ 26,011     $ 40,461  
 
                        
 
                                
Gas Sold and Managed (Bcf)
     85.0       82.9       164.4       154.0  
 
                        
 
                                
MIDSTREAM ASSETS
                                
 
                                
Equity in Earnings of Affiliates
   $ 3,763     $ 1,352     $ 7,723     $ 2,244  
 
                        
 
                                
Operations and Maintenance Expense
   $ 254     $ 109     $ 449     $ 214  
 
                        
 
                                
Interest Expense
   $ 827     $ 33     $ 1,657     $ 64  
 
                        
 
                                
Net Income
   $ 1,514     $ 725     $ 3,390     $ 1,179  
 
                        
 
                                
RETAIL AND OTHER
                                
 
                                
Operating Revenues
   $ 3,701       ($2,350 )   $ 9,745       ($5,004 )
 
                        
 
                                
Operating (Loss)
     ($4,420 )     ($9,726 )     ($6,277 )     ($20,279 )
 
                        
 
                                
Net (Loss)
     ($3,244 )     ($5,785 )     ($4,206 )     ($11,923 )
 
                        
 
                                
Net Financial (Loss)
     ($1,496 )     ($963 )     ($1,955 )     ($1,396 )
 
                        
 
                                
Total Customers at March 31
     145,683       145,398       145,683       145,398  
 
                        
###