Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Investor Presentation (June 2015)
22 slides from Newjersey Resources's investor presentation, Jun 23, 2015
Slide 1: A Chat with the New York Investment Community
A CHAT WITH THE NEW YORK INVESTMENT COMMUNITY New Jersey Natural Gas – Marketing and Customer Growth Thomas J. Massaro – Vice President, Marketing and Energy Efficiency Mark R. Sperduto – Senior Vice President, Regulatory Affairs June 23, 2015
Slide 2: Regarding Forward-Looking Statements
Regarding Forward - Looking Statements 2 Certain statements contained in this presentation are forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 . New Jersey Resources (NJR or the Company) cautions readers that the assumptions forming the basis f
Slide 3: Disclaimer Regarding Non-GAAP Financial Measures
Disclaimer Regarding Non - GAAP Financial Measures 3 This presentation includes the non - GAAP measures net financial earnings (NFE), utility gross margin and financial margin . As indicators of the Company’s operating performance, these measures should not be considered alternatives to, or more mea
Slide 4: NJR Business Segment NFEPS Contributions; Updated Fiscal 2015 Guidance
NJR Business Segment NFEPS Contributions; Updated Fiscal 2015 NFEPS Guidance to $1.65 - $1.75 from $1.60 - $1.70 4 New Jersey Natural Gas NJR Clean Energy Ventures NJR Energy Services NJR Midstream NJR Home Services » NJR expects regulated businesses to contribute 55 to 70 percent of fiscal 2015 NFE
Slide 5: Our Growth and Earnings Strategy
Our Growth and Earnings Strategy » Increased regulated infrastructure investments drive safe, reliable service and anchors our business portfolio x NJNG drives our long - term growth x PennEast Pipeline » Provide customers with cost - efficient renewable electricity, while reducing ITC reliance x Po
Slide 6: Capital Investment Plan
C apital Investment Plan 6 • Solar investment for residential and commercial projects in Q1Fiscal 2017 estimated at $33.2 million. Plan assumes $25.6 million beyond December 31, 2016, assuming appropriate economics allow. ($MM) 2015E 2015A (FYTD) 2016E 2017E Total Immediate Return NJNG Customer Grow
Slide 7: Current Cash Flow Forecast
Current Cash Flow Forecast 7 Incremental NJRES earnings used to reduce the need for future equity, while credit metrics expected to support current ratings ($MM) 2015F 2016E 2017E Cash Flow from Operations $271.1 $237.5 $258.5 Uses of Funds Capital expenditures - NJNG ($189.4) ($233.7) ($153.9) Capi
Slide 8: New Jersey Natural Gas: The Foundation of Our Business
New Jersey Natural Gas: The Foundation of Our Business » Growing customer base – serving more than 512,000 residential and commercial customers x New construction continues to expand x Strong conversion market » Infrastructure investments to strengthen distribution and transmission system are suppor
Slide 9: NJRES: Generated NFE Every Year Since 1995
NJRES: Generated NFE Every Year Since 1995 » Serves wholesale customers across North America » Diverse portfolio of physical natural gas assets » Firm storage (~40 Bcf in the US and Canada) » Firm transportation ( 1.4 Bcf/day) » NJRES’ good results driven by: x Periods of cold weather which created
Slide 10: PennEast Pipeline
PennEast Pipeline 10 » 115 - mile , 36 - inch pipeline connecting Northeast Marcellus supply to Northeast markets » Contracted volume up to 1,000,000 dth/day » Total capex $1 billion » Current ownership: NJR, GAS, SJI, UGI at 20 percent and PEG and SE at 10 percent » Open season concluded August 29
Slide 11: NJRCEV: Continued Portfolio Diversification
NJRCEV: Continued Portfolio Diversification Commercial Solar » 20 projects in service » 72.4 MW » Projects include roof - and ground - mounted installations, both grid - connected and net - metered Residential Solar - The Sunlight Advantage ® » Second largest residential solar provider in New Jersey
Slide 12: Our ITC Transition Plan
Our ITC Transition Plan » Expected drop in ITC to 10 percent – January 1, 2017 » Our plan: x Continued solar investment drives production of Solar Renewable Energy Certificates (SRECs) – NJRCEV forecasts annual SREC production to grow in excess of 194,000 in fiscal 2017 x Onshore wind investment gen
Slide 13: A Growing Service Area
A Growing Service Area 13 0.0% 5.0% 10.0% 15.0% N.J. Morris Monmouth Ocean 1.2% 6.2% 2.3% 14.1% Population Change 2000 - 2013* Monmouth 43% Ocean 44% Middlesex/ Burlington 1% Morris 12% Service Territory Customer Breakdown Our service territory is among the fastest growing in the state w ith Ocean C
Slide 14: Our Marketing Strategy
Our Marketing Strategy » Our marketing strategy is based on our competitive advantages » Why are we growing faster than other companies? x Demographics • Median household income above national average • Median home value above the national average x Geographic proximity • About an hour’s commute to
Slide 15: Value for Customers
Value for Customers 15 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 NJNG Fuel Oil Propane Electricity $0.92 $2.45 $4.08 $4.10 Source: US Energy Information Administration Data as of March 2015. Based on 100,000 comparable BTUs NJNG enjoys a distinct price advantage in our service area
Slide 16: Customer Count Matters
Customer Count Matters » Overall, 50/50 split of new construction/conversions » NJNG captures 95 percent of new construction » Majority of conversions are from oil heat customers » Average utility gross margin per customer: x Residential: $410 annually x Commercial: $1,445 annually » Our CIP program
Slide 17: Residential New Construction
Residential New Construction 17 » Strong relationships with planning officials, builders, and developers to promote the benefits of natural gas » Utilize internal and external sources to forecast new construction » There are 200 developments in our “land - bank”, which represent 26,639 potential new
Slide 18: Conversion Market
Conversion Market » Aggressive marketing to communities using a mix of fuels including oil, electric and propane » To encourage conversions: x Fuel cost comparisons x Promote high - efficiency rebates and incentives x Partner with contractors, community organizations, and municipalities » P rescreen
Slide 19: Evolution of a Community Conversion Customer
Evolution of a Community Conversion Customer 19 Install meter sets for new customer additions Install mains and services Work order/permitting/easement preparation Hit conversion sales goal for productive community conversion project HVAC contractor interaction / Marketing follow up and enlist “stre
Slide 20: Conversion Market – Community Projects
Conversion Market – Community Projects 20 » Current and proposed conversion projects » Nearly 5,000 potential conversions over a 5 - year period » Represents about 30 - 35 percent of residential conversion market » Balance from on/near main conversion target markets
Slide 21: Key Trends Support Future Customer Growth
Key Trends Support Future Customer Growth 21 2015 - 2017, 10,920 2018 - Build Out, 74,922 New Construction 1 Total = 85,842 1. Source: A.D. Little Non Heat 6,900 On Main 36,322 Near Main 28,974 Off Main 47,840 Conversions 2 Total = 120,036 2. Source: NJNG Marketing » NJNG expects annual new customer
Slide 22: Our Path to Continued Growth
Our Path to Continued Growth 22 Fiscal 2015 NJNG x Customer growth x CIP x BGSS incentives x SAVEGREEN x SAFE x NJ RISE x SRL Energy Services x Physical natural gas services x Producer services Clean Energy x Portfolio diversification x More SRECs; improved prices x Expanded wind investments Midstre
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