Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Kansas City Financial Community (October 2013)
29 slides from Newjersey Resources's conference presentation, Oct 29, 2013
Slide 1: Kansas City Financial Community
Exhibit 99.1 Kansas City Financial Community October 29, 2013
Slide 2: Regarding Forward-Looking Statements
1 Regarding Forward-Looking Statements Certain statements contained in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “estimates,” “expects,” “projects,” “may,” "will," “intends,” “expects,” "b
Slide 3: Disclaimer Regarding Non-GAAP Financial Measures
2 Disclaimer Regarding Non-GAAP Financial Measures This presentation includes the non-GAAP measures net financial earnings (losses), financial margin and utility gross margin. As an indicator of the Company’s operating performance, these measures should not be considered an alternative to, or more m
Slide 4: New Jersey Resources: Growth Initiatives
3 New Jersey Resources: Growth Initiatives Infrastructure Growth – Specific plans to nearly double plant investment by fiscal 2017 Customer and Gross Margin Growth – Diversified and sustainable gross margin growth Non-Regulated Investments – Long-term plan to diversify clean energy portfolio to redu
Slide 5: 4 to 7 Percent Average Long-Term Annual NFE Growth Strategies, with 65-80 Percent from Regulated Businesses
4 to 7 Percent Average Long-Term Annual NFE 4 Growth Strategies, with 65-80 Percent from Regulated Businesses Regulated Businesses Non-Regulated Businesses Significant increase in NJNG Diversify clean energy regulated infrastructure portfolio investments Prudently expand onshore Diversified sources
Slide 6: Strong NJNG Customer Growth Adds Gross Margin
5 Strong NJNG Customer Growth Adds Gross Margin Customer Growth Capital Investment Estimates 2009- ($mm) 2012 2013F 2014E 2015E 2016E 2017E Total Actual Customer Growth $79.4 $24.5 $24.7 $25.6 $25.5 $25.5 $205.2 Maintenance/Other 177.4 35.4 57.5 49.0 48.1 40.6 408.0 Total $256.8 $59.9 $82.2 $74.6 $7
Slide 7: Key Trends Support Future Customer Growth
6 Key Trends Support Future Customer Growth Demographics Fuel Pricing Support above average growth Supports natural gas advantage Population Change 2000-2010 Equivalent Cost Value for Customers * $5.25 15.0% 12.8% $4.40 $3.90 $4.50 $3.20 $3.75 10.0% $3.00 4.5% 4.7% $2.25 5.0% 2.5% $1.13 $1.50 0.0% $
Slide 8: Current NJNG Infrastructure Investments
7 Current NJNG Infrastructure Investments Current Infrastructure Capital Investment Estimates 2009-2012 ($mm) Actual 2013F 2014E 2015E 2016E 2017E Total AIP/SAFE $136.7 $52.0 $38.3 $40.4 $39.1 - $306.5 Superstorm Sandy - 26.0 5.3 5.2 - - 36.5 NGV Advantage - 1.0 9.0 - - - 10.0 Total $136.7 $79.0 $52
Slide 9: Planned NJNG Infrastructure Capital Projects
8 Planned NJNG Infrastructure Capital Projects Planned Infrastructure Capital Investment Estimates 2009-2012 ($mm) Actual 2013F 2014E 2015E 2016E 2017E Total NJ RISE - - $4.6 $13.0 $12.0 $12.0 $41.6 Liquefaction - - 16.0 16.3 3.4 - 35.7 Southern Reliability - - 2.3 12.3 80.6 34.8 130.0 Total - - $22
Slide 10: Capital of Over $1 Billion Drives Long-Term Growth
9 Capital of Over $1 Billion Drives Long-Term Growth NJNG Capital Expenditure Estimates 2009- ($mm) 2012 2013F 2014E 2015E 2016E 2017E Total Actual Customer Growth $79.4 $24.5 $24.7 $25.6 $25.5 $25.5 $205.2 Maintenance/Other 177.4 35.4 57.5 49.0 48.1 40.6 408.0 AIP/SAFE 136.7 52.0 38.3 40.4 39.1 - 3
Slide 11: Infrastructure Investments Already Earning a Return
10 Infrastructure Investments Already Earning a Return Currently Earning a Return - $726mm Future Returns - $652mm NJNG currently earning a return on 53 percent of these investments
Slide 12: Customer Growth: NJNG Gross Margin
11 Customer Growth: NJNG Gross Margin Annual 1.5 to 1.6 percent customer growth $24.0 $22.1 Improving new $17.4 $18.0 construction $12.8 Strong conversion $12.0 market $8.1 $6.0 $3.7 NJNG has decoupled rates (Conservation Incentive Program) $0.0 FY13F FY14E FY15E FY16E FY17E Provides gross margin st
Slide 13: The SAVEGREEN Project: NJNG Gross Margin
12 The SAVEGREEN Project ®: NJNG Gross Margin Promotes customer $12.0 investment in high- $10.1 $10.6 efficiency heating $10.0 $8.2 equipment $8.0 $5.7 BPU approved a $6.0 significant program $4.0 $2.9 expansion in June 2013 $2.0 NJNG earns 9.75 to $0.0 FY13F FY14E FY15E FY16E FY17E 10.3 percent Ret
Slide 14: The NGV Advantage: NJNG Gross Margin
13 The NGV Advantage: NJNG Gross Margin Infrastructure Throughput Total potential investment of up $3.0 $2.6 $2.5 to $10 million $2.3 $0.7 $0.8 $6 - $8 million $2.0 $0.6 committed on three contracts $1.0 $1.8 $1.8 $1.8 NJNG earns 10.3 percent ROE $.01 $.2 $0.0 FY13F FY14E FY15E FY16E FY17E 13
Slide 15: NJNG Gross Margin: Basic Gas Supply Service (BGSS) Incentives
14 NJNG Gross Margin: Basic Gas Supply Service (BGSS) Incentives $8.0 $7.3 Programs in place through October 2015 $6.5 $6.0 $6.0 $6.0 to benefit customers $6.0 and shareowners $4.0 Adds about $.08 annually to NFE per share $2.0 $0.0 FY13F FY14E FY15E FY16E FY17E BGSS has saved customers ~$621 millio
Slide 16: Diversified and Growing NJNG Gross Margin
15 Diversified and Growing NJNG Gross Margin $45.0 $41.3 $40.0 $36.0 $35.0 $29.3 $30.0 $25.0 $20.3 $20.0 $14.1 $15.0 $10.0 $5.0 $0.0 FY13F FY14E FY15E FY16E FY17E Customer Growth SAVEGREEN NGV BGSS Incentives Incremental utility gross margin expected to triple over five years
Slide 17: Targeted Growth from Regulated NJR Midstream
16 Targeted Growth from Regulated NJR Midstream Current investments provide 5 to 10 percent of NFE Strategic Marcellus location enhances value Leveraging customer contacts for growth opportunities Steckman Ridge Iroquois Pipeline 50/50 joint venture with Spectra Energy 5.53 percent interest in gas p
Slide 18: 4 to 7 Percent Average Long-Term Annual NFE Growth Strategies, with 20-35 Percent from Non-Regulated Businesses
4 to 7 Percent Average Long-Term Annual NFE 17 Growth Strategies, with 20-35 Percent from Non-Regulated Businesses Regulated Businesses Non-Regulated Businesses Significant increase in NJNG Diversify clean energy regulated infrastructure portfolio investments Prudently expand onshore Diversified sou
Slide 19: Clean Energy Portfolio Strategy
18 Clean Energy Portfolio Strategy Renewable Portfolio Standard (RPS) provides a growing source of demand 62 MW inventory of grid-connected projects over next four years Sunlight Advantage residential solar program Gradual decline in solar capital spending by 2017 ITCs reduce to 10 percent in Januar
Slide 20: Improving SREC Fundamentals
19 Improving SREC Fundamentals Energy Year 2014 SREC Prices SREC Prices and Construction Activity $160 $160 40.0 $150 $150 35.0 $140 $140 30.0 $130 25.0 $130 $120 20.0 $120 $110 15.0 $110 $100 10.0 $100 $90 5.0 ICAP/KARBONE Average $80 - $90 $80 Installed MW Average SREC Price NJ increased solar RPS
Slide 21: Clean Energy Portfolio Diversification: Onshore Wind
20 Clean Energy Portfolio Diversification: Onshore Wind Why are we doing this? Supports NJR’s electric strategy Earnings growth opportunities supported by long-term Power Purchase Agreements (PPAs) with annuity-like returns 29 states and the District of Columbia have RPS Tax credits are production b
Slide 22: Clean Energy Portfolio Diversification: Two Dot Wind Farm
21 Clean Energy Portfolio Diversification: Two Dot Wind Farm Purchased from OwnEnergy, Inc. 9.7 MW utility scale wind farm project located in Montana, east of Helena Approximately $22 million investment 25-year PPA in place to sell power to NorthWestern Energy Start up expected summer 2014 Strong pa
Slide 23: NJRES: Growth Opportunities in a Changing Market
22 NJRES: Growth Opportunities in a Changing Market Portfolio restructured to reflect current market realities Growth opportunities from physical natural gas and producer services Providing energy solutions for customers in the Marcellus Shale and other natural gas regions Producers, Utilities, Powe
Slide 24: NJR Home Services: Retail Solutions for Customer Comfort
23 NJR Home Services: Retail Solutions for Customer Comfort Expanded array of services now offered Whole-house electric and plumbing contracts Standby generator contracts Air conditioning Generators Pursuing geographic expansion Currently marketing in Sussex, Warren and Hunterdon Counties 2 to 5 per
Slide 25: Consistent and Sustainable Financial Performance
24 Consistent and Sustainable Financial Performance Net Financial Earnings Per Share $3.21 – $3.49 $3.60 $3.40 $3.20 $2.75 – $2.95 $3.00 $2.70 – $2.71 $2.75 $2.80 $2.58 $2.60 $2.40 $2.46 $2.40 $2.24 $2.11 $2.20 $1.88 $2.00 $1.80 $1.73 $1.80 $1.61 $1.60 $1.40 2003 2004 2005 2006 2007 2008 2009 2010 2
Slide 26: Fiscal 2014 NFE Per Share Guidance - $2.75 to $2.95
25 Fiscal 2014 NFE Per Share Guidance - $2.75 to $2.95 New Jersey Natural Gas 60-70% NJR Energy Services 5-15% NJR Home Services 2-5% NJR Clean Energy Ventures 10-20% NJR Midstream 5-10% Regulated businesses expected to contribute 65-80 percent of total NFE
Slide 27: Growing and Sustainable Dividend
26 Growing and Sustainable Dividend Payout Ratio*** 63% $1.92 65% $2.00 Dividend Growth 55% 56% 57% 52% $1.75 $1.62 $1.68 49% 51% 48% 50% $1.54 $1.50 $1.44 49% $1.36 $1.24 $1.25 $1.12 $1.01 $1.00 33% $0.75 $0.50 16% $0.25 $0.00 2007 2008 2009 2010 2011 2012 2013 2014* 2017E** 0% 2005 2006 2007 2008
Slide 28: NJR's Long-Term Financial Goals
27 NJR’s Long-Term Financial Goals Achieve average long-term NFE growth of 4 to 7 percent Significant capital investment in regulated business to support customer growth and maintain safe, reliable and resilient service New customers and regulatory initiatives generate significant NJNG gross margin
Slide 29: Kansas City Financial Community
Kansas City Financial Community October 29, 2013
New Jersey Resources — Kansas City Financial Community (October 2013) on 6ix