Slide 1: Fiscal 2016 Second Quarter
SAFE, RELIABLE NATURAL GAS AT OUR CORE ... AND SO MUCH MORE = =F Fiscal 2016 Second Quart May 4, 2016
Slide 2: Regarding Forward Looking Statements
Regarding Forward Looking Statements Certain statements contained inthis presentation are forward: looking statements within the meaning of Section 27A of the Secures Act of 1993, as amended, Section 21 of the Secures Exchange Act of 1934, as amended, and the Private Secures Ligation Reform Act of 1
Slide 3: Disclaimer Regarding Non-GAAP Financial Measures
Disclaimer Regarding Non-GAAP Financial Measures This presentation includes the non-GAAP measure NFE. As an indicator of the Company's operating performance, this measure should not be considered an alternative to, or more meaningful than, GAAP measures, such as cash flow, net income, operating inco
Slide 4: Fiscal Second Quarter 2016 Highlights
Fiscal Second Quarter 2016 Highlig Results = Net Financial Earnings (NFE) of $.91 per share* = New Jersey Natural Gas (NJNG) added 1,609 new customers = NUR Energy Services (NJRES) performed well despite warm weather = NUR Clean Energy Ventures (NJRCEV) Sunlight Advantage® added 207 customers * 701
Slide 5: Fiscal Second Quarter 2016 Highlights: Strategic Actions
Fiscal Second Quarter 2016 Highlights Strategic Actions NJNG = Base rate case remains on track = Separate rate treatment sought for Southern Reliability Link (SRL) NURCEV = Residential solar market remains strong = Construction continues at Ringer Hill, our fourth onshore wind project = Capital plan
Slide 6: Our Long-Term Average Annual NFE Growth Strategy
Our Long-Term Average Annual NFE Growth Strategy Remains 5 to 9 Percent How will we achieve this? Invest in Infrastructure to: = Expand our distribution franchise network to serve a growing customer base and ensure reliable and resilient service = Develop Midstream projects like PennEast Pipeline In
Slide 7: Mutually Beneficial Regulatory Programs
Mutually Beneficial Regulatory Programs Benefits Customer/ Program Societal Shareholder Inception BGSS: Basic Gas Supply | Off-system sales and Customer savings of Average of $.05 Service Incentives* capacity release incentives | about $842 million since | per share inception annually CIP: Conservat
Slide 8: Looking Beyond the Base Rate Case
Looking Beyond the Base Rate Case Strong customer growth to continue A SAFE Extension = $200 million filing pending at BPU to complete replacement of unprotected steel pipe = Seeking regulatory treatment to provide a real-time return similar to NJ RISE Continuing Regulatory Programs = BGSS Incentive
Slide 9: Fiscal Second Quarter 2016 Results
Fiscal Second Quarter 2016 Results ($mm) Three Months Ended March 31, Company 2016 2015 New Jersey Natural Gas $49.0 $48.6 NUR Midstream 2.2 26 46 47 Subtotal $51.2 $51.2 $84.1 $81.5 NUR Energy Services 17.0 36.3 27.0 52.8 NUR Clean Energy Ventures 13.0 19.3 22.0 NJR Home Services/Other (1.4) (2.9)
Slide 10: NJNG's Regulated Growth Model
NJNG’s Regulated Growth Model = Customer growth = Rate case = SRL 3 Months - $49.0 million * 30-mile route approved 6 Months - $79.5 million pyey © FC00 mnilles ot * FY2QNFE increase due to transportation and higher utility gross margin distribution infrastructure from customer additions, = 519,000+
Slide 11: NJNG Margin Change: Value of Customer Growth
G Results Demo te Value of Customer Growth NJNG Margin Change 22 ma 20 $ (Millions) 207 206 March 3, 2015 ‘customer Growth 655 ncentives SAVEGREEN March 31,2016 uw
Slide 12: 3,655 new customers added in first six months of FY2016
= 3,655 new customers added in first six months of FY2016 1,918 new construction customers 1,737 conversions = 400 heat conversions = These new and conversion customers will contribute approximately $3 million annually to utility gross margin = On track to add 8,150 new customers this year 3-Year fo
Slide 13: NJNG Capital Investment Mid-Year Update
NJNG Capital Investment Mid-Year Update CAPITAL INVESTMENTS ($MM) YEAR TO DATE 2016E STATUS NING [Added 3,655 customers in 1H16; on target to add Customer Growth $15.6 $35.2 8,150 customers in FY2016 ieetiienonaa(ittner ee Capital spending on track to enhance system safety and reliability ans = Bay
Slide 14: NJR Midstream
NJR Midstream = Steckman Ridge = Dominion Midstream = PennEast Pipeline * Received FERC Notice of Schedule for Environmental 3 Months - $2.2 million 6 Months - $4.6 million Siscaren GiklZ = Consistent FY2Q NFE due Review in March 2016 = $127 million investment, 12 Bef to storages revenue ‘Anta natur
Slide 15: NJR Clean Energy Ventures
NJR Clean Energy Ventures Commercial Solar = Grid connected and net metered projects 3 Months - $11.8 million Residential solar leases Current Operating Assets 6 Months - $19.3 million Commercial Solar Onshore wind farms * 22 projects in service = Lower NFE due to timing Other potential 0 AOR of rec
Slide 16: Diversifying Our Renewable Portfolio by Scaling Up
Diversifying Our Renewable Portfolio by Scaling Up Onshore Wind In Service Size Capital Project Date PPA/Hedge (mw) ($MM) Location Contractor Turbines Ringer Hill Year-end 2016 Majority of energy produced $84 | Pennsylvania | Mortensen | General will be hedged under 1 60 milesSE Construction agreeme
Slide 17: Improved SREC Fundamentals
Improved SREC Fundamentals Installations (MW) SREC Prices wo 85 ——SREC Prices ==—=SACP. 200 $350 $350 700 $300 $300 soo new sacP $250 from Solar $285 $250 soo cee 40.0 $200 $200 30.0 $150 $150 009) $100 $100 10.0 $50 $70 $50 ig 22e4ess eo SEP PFEPIPEZ PSE PIRES SFP FI FEIIFP IF ELES IZ ES NJRCEV for
Slide 18: NJRCEV Is Proactively Hedging SRECs to Reduce Future Price Volatility
NJRCEV Is Proactively Hedging SRECs to Reduce Future Price Volatility 250 214 200 -- a is} iv] & 150 + _ x) 3 § 100 3 3 és = 50 0 FY16E FY17E FY18E @Hedged @Expected Generated == Current Generation Pct. Hedged: 95% 66% 48% Average Price: $212 $229 $232 As of March 31, 2016 FF FiscaiSecond Quarter 20
Slide 19: NJR Energy Services Future Earnings Contributors
NJR Energy Services 1 Future Earnings Contributors = Earnings subject to volatility in natural gas markets = Factors impacting natural gas markets include: 3 Months - $17.0 million 6 Months - $27.0 million Firm storage (40 Bcf in the waeathey US and Canada) = Lower FY2Q NFE due to * Record natural g
Slide 20: Total Return Periods Ended March 31, 2016
Total Return Periods Ended March 31, 2016 1 Year Total Return 10-Year Annualized Total Return 35.0% 15.0% 30.0% | 28.8% 11.6% 10.0% 25.0% fax, 20.0% 8.0% 14.8% 15.0% + 5.0% 10.0% 5.0% 0.0% T T , || 9.0% NJR Peer Group S&P 500 NJR Peer Group S&P 500 Assumes reinvested dividends
Slide 21: Appendix
APPENDIX
Slide 22: Base Rate Case on Track for Q1 Fiscal 2017 Resolution
Base Rate Case on Track for Q1 Fiscal 2017 Resolution = November 2015 filing date established with the approval of SAFE in 2012 = Requested an increase of $147.6 million = Proposed rates base of nearly $1.6 billion Procedural Schedule of the Office of Administrative Law May 20, 2016 NJNG produces it
Slide 23: Federal Tax Credit Extensions
Federal Tax Credit Extensions Start of Construction Deadline Wind PTC Start of Construction Deadline Prior to 1/1/2017 | 12/31/2018 | 100% Prior to 1/1/2020 | 12/31/2021 30% Prior to 1/1/2018 | 12/31/2019 80% Prior to 1/1/2021 | 12/31/2022 26% Prior to 1/1/2019 | 12/31/2020 60% Prior to 1/1/2022 | 1
Slide 24: Reconciliation
Reconciliation Areconciliation of NFE for the three- and six-months ended March 31, 2016 and 2015, to net income is provided below: ‘Three Months Ended Six Months Ended March 31, March 31, (Phowsands) 2016 2018 2016 2015 Net income S 73657 S 60903 S$ 122304 S 184,223 Ad Unrealized loss (gain) on der