Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Q3 2015 Earnings Presentation
18 slides from Newjersey Resources's earnings presentation, Jul 31, 2015
Slide 1: Fiscal 2015 Third Quarter Update
FISCAL 2015 THIRD QUARTER UPDATE July 31, 2015
Slide 2: Regarding Forward-Looking Statements
Regarding Forward - Looking Statements 1 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 2 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: Net Financial Earnings (NFE) ($MM)
Net Financial Earnings (NFE) 3 ($MM) Company 2015 2014 2015 2014 New Jersey Natural Gas $7.2 $4.9 $84.0 $79.6 NJR Energy Services (5.3) (8.6) 47.5 90.2 NJR Clean Energy Ventures (3.8) 3.9 18.2 20.3 NJR Midstream 2.5 1.9 7.2 5.6 NJR Home Services/Other 1.9 2.5 (0.2) 0.7 Total $2.5 $4.5 $156.7 $196.3
Slide 5: Increasing 2015 NFEPS Guidance to $1.70-$1.80
Increasing 2015 NFEPS Guidance to $1.70 - $1.80 4 New Jersey Natural Gas NJR Clean Energy Ventures NJR Energy Services NJR Midstream NJR Home Services $1.45 - $1.55 $1.60 - $1.70 $1.65 - $1.75 $0.00 $0.45 $0.90 $1.35 $1.80 $2.25 Original 2/4/2015 5/7/2015 Current $1.70 - $1.80 » NJRES exceeding fisc
Slide 6: Generating Average Annual NFE Growth
Generating Average Annual NFE Growth of 5 – 9 Percent » Invest in Utility infrastructure projects that drive rate base growth x Organic customer growth x System and Facilities E nhancement program (SAFE) » Invest in Midstream projects such as PennEast Pipeline x Targeted NFE contribution from Regula
Slide 7: Generating Average Annual NFE Growth
Generating Average Annual NFE Growth of 5 – 9 Percent » Provide customers with cost - efficient renewable electricity through our Clean Energy business, while reducing ITC reliance x Targeted NFE contribution of 10 – 20 percent » Home Services will provide steady earnings x Targeted NFE contribution
Slide 8: Fiscal Third Quarter NFE Drivers
Fiscal Third Quarter NFE Drivers » New Jersey Natural Gas x NFE of $7.2 million vs. $4.9 million in Q3 last year • Strong utility gross margin growth due to customer additions, incentive programs, The SAVEGREEN Project® and the Safety Acceleration and Facility Enhancement (SAFE) program » NJR Energy
Slide 9: NJNG Capital Investment – Nine Month Review
NJNG Capital Investment – Nine Month Review 8 CAPITAL INVESTMENTS ($MM) 2015E YEAR TO DATE STATUS NJNG Customer Growth $36.3 $26.0 Added 5,750 customers through FY3Q15; on target to add about 7,800 customers in FY2015 Maintenance/Other 77.7 53.6 Capital spending on track to enhance system safety and
Slide 10: Strong Customer Growth Continues
Strong Customer Growth Continues 9 » 5,750 new customers added in first nine months of fiscal 2015 compared with 5,151 last year - an 11.6 percent increase x 2,793 new construction customers compared with 2,463 last year - a 13.4 percent increase x 2,957 conversions from other fuels - a 10 percent i
Slide 11: November 2015 Rate Case Filing
November 2015 Rate Case Filing » Primarily driven by infrastructure investments » Required as part of the SAFE program approval » First base rate case filing since November 2007 Timeline and Current Status 10 Pre - hearing Hearings Summations Decision ALJ BPU 3 ½ Months 1 Month 1 ½ Months 3 Months N
Slide 12: 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 » 16 th largest North American Gas Marketer* » Firm storage (~40 Bcf in the US & Canada) » Firm transportation ( 1.4 Bcf/day ) » NJRES’ solid results driven
Slide 13: NJRCEV: Continued Portfolio Diversification
NJRCEV: Continued Portfolio Diversification Commercial Solar » 21 projects in service » 76.4 MW » Projects include roof - and ground - mounted installations, both grid - connected and net - metered Residential Solar - The Sunlight Advantage ® » 3,600+ customers added since inception » 32+ MW Onshore
Slide 14: Improving SREC Fundamentals
Improving SREC Fundamentals 13 Source: of Monthly Capacity Additions: NJ Clean Energy Program Source of SREC Prices: Karbone NJRCEV forecasts SREC production to grow to 214,000 by fiscal 2018 Installs (MW) $70 $235 $0 $50 $100 $150 $200 $250 SREC Prices 85.0 14.4 0 10 20 30 40 50 60 70 80 90 MW
Slide 15: SRECs Generated and Hedged
SRECs Generated and Hedged 149 88 30 172 194 214 0 50 100 150 200 250 FY16 FY17 FY18 Thousands of SRECs Hedged Generated Current Generation 14 NJRCEV is actively hedging SRECs to reduce future price uncertainty Pct. Hedged: 87 45 14 Average Price: $207 $216 $217
Slide 16: CEV Capital Investment – Nine-Month Review
CEV Capital Investment – Nine - Month Review 15 CAPITAL INVESTMENTS ($MM) 2015E YEAR TO DATE * STATUS NJRCEV Commercial Solar $68.8 $53.3 Three grid-connected projects totaling 20.1 MW completed through FYQ315; 6.0 MW to be completed by fiscal year end Residential Solar 27.7 14.7 468 (4.5 MW) reside
Slide 17: Current Cash Flow Forecast ($MM)
Current Cash Flow Forecast 16 ($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) Capital expenditures - PennEast (5.3) (42.2) (140.2) Capital expenditures - CEV (198.6) (157.3) (58.8) Dividends (76.1) (81.0) (87
Slide 18: Our Path to Continued Growth
Our Path to Continued Growth 17 Fiscal 2015 NJNG x Customer growth x CIP x BGSS incentives x SAVEGREEN x SAFE x NJ RISE x SRL Midstream x PennEast FERC filing Clean Energy x Portfolio diversification x More SRECs; improved prices x Expanded wind investments Energy Services x Physical natural gas ser