Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Chicago Financial Community, April 6-7, 2016
33 slides from Newjersey Resources's conference presentation, Apr 6, 2016
Slide 1: Safe, Reliable Natural Gas at Our Core ... and So Much More
SAFE, RELIABLE NATURAL GAS AT OUR CORE ... AND SO MUCH MORE Chicago Financial Community April 6-7, 2016 IM vexixer
Slide 2: Regarding Forward Looking Statements
Regarding Forward Looking Statements Certain statements contsined in this presentation are forward-looking statements within the meaning ofthe Private Securities tigation Reform Act of 1995, New Jersey Resources (NJR or the Company) cautions readers that the assumptions forming the basis for forwart
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: Our Businesses
Our Businesses Expected Net Financial Earnings Contribut Fiscal 2016 New Jersey * Strong customer growth Natural — Infrastructure investments to ensure safety and reliability > 60-70 percent Gas - Regulatory incentives NR Steckman Ridge ~ 12 Bef storage facility Midstream * 20 percentinterest in Pen
Slide 5: Fiscal First Quarter 2016 Highlights
Fiscal First Quarter 2016 Highlights = Net Financial Earnings (NFE) of $.58 per share* = NJR Energy Services (NJRES) continued to perform in line with expectations = $44.4 million of infrastructure investments |§ driven by customer growth and system reliability mpany New Jersey Natural Gas $306) $28
Slide 6: Long-Term Average Annual NFE Goal Remains
Long-Term Average Annual NFE Goal Remains 5 to 9 Percent Invest in infrastructure projects that support reliable and resilient service Continue strong utility customer growth Invest in Midstream projects such as PennEast Pipeline Provide customers with renewable, cost-efficient electricity through o
Slide 7: Dividend Growth and Payout Ratio
Divid 22 di Divid 6.7 p Dividend Growth and Payout Ratio lend growth goal of 6 to 8 percent annually ividend increases in 20 years lend payout ratio goal of 60 to 65 percent ercent increase to current $.96 annual rate 120 Dividends and Payout $.92 ee 2011 ©2012-2018, 201420152016 land. Div Rate —e=P
Slide 8: Infrastructure Spending Continues
Infrastructure Spending Continues Capital Expenditures $450.0 2015A - $336 2016E - $550 20178 - $540 $400.0 $391 $350.0 $333 $2000 | | & $2500 $217 S $2000 $185 $150.0 $151 $149 a | || $50.0 $0.0 Regulated Non Regulated Non Regulated Non Regulated Regulated Regulated NING mMidstream Solar m Wind Reg
Slide 9: Strong Fundamentals Drive the Majority of NJNG's Growth
Strong Fundamentals Drive the Majority of NJNG’s Growth Largest stand-alone natural gas utility in New Jersey = 12%oF Customers = 516,300 customers = Growing customer base; balanced mix of new construction and conversions Reputation for Excellent Service = Highest ranked in East Region in J.D. Power
Slide 10: Strong Customer Growth
Strong Customer Growth Customers at Fiscal Year End Customer Additions so 0,000 512 og 8,550 8,750. 8,150, | | st0 e000 7,599 7-858 ; | | 504 7 | | ; | & 500 oe | | | 497 | | 495 coe | | 3 | _ 490 ‘0 | : 487 | | | cl 484 4,000 | 480-478 Fey 2,000 a0 wih ° a PMA FYISA. PYG YAE. PARE 2007 2008-2009 20
Slide 11: Key Trends Support Future Customer Growth
Key Trends Support Future Customer Growth Population Change 2000-20141 Equivalent Customer Cost? $5.00 $4.10 15.0% B88 $4.00 53.89 ) 10.0% 6.3% eee $2.00 $1.74 5.0% 2.3% Y s1.00 | 90:88 be ee ae $0.00 WS Menmout Ocean) NING —FuelOil__Propane__ Electricity 2. Source: US EnerayInformotion Administeati
Slide 12: Collaborative Regulatory Relationships
Collaborative Regulatory Relationships Regulatory and Incentive Programs = BGSS: Basic Gas Supply Service Incentives (1992) * Off-system sales and capacity release incentives = CIP: Conservation Incentive Program (2006) * Decoupling mechanism that normalizes the impact of weather and usage = The SAV
Slide 13: Base Rate Case Update
se Rate Case Update = November 2015 filing date established with the approval of SAFE in 2012 = Requested an increase of $147.6 million " Proposed rate base of nearly $1.6 billion = Overall cost of capital: Embedded Weighted ($ Millions) Amount Percent Cost Cost Long-term Debt $743.2] 46.35% 3.97% 1
Slide 14: Recent Rate Case Decisions in NJ
Recent Rate Case Decisions in NJ Overall Weighted Cost Returnon Equity Company Filing Date Decision Date of Capital Equity Ratio Programs SAFE 3/20/12 10/23/12 6.90% 9.75% 53.5% NJ RISE 9/3/13 7/23/14 6.74% 9.75% 53.5% SAVEGREEN 12/14/14 7/23/15 6.69% 9.75% 53.3% Base Rate Cases South Jersey Gas Nov
Slide 15: NJNG — Post Rate Case
NJNG — Post Rate Case Following the conclusion of the base rate case = Continuation of strong customer growth = Existing programs continue ° BGSS Incentives ° CIP ° SAVEGREEN = NJRISE * Complete “hardening” projects = SAFE Extension * Pending at BPU ° Approximately $200 million to complete the repla
Slide 16: Our Midstream Portfolio
Our Midstream Portfolio = Steckman Ridge $127 million investment, 12 Bcf natural gas storage facility in southwest Pennsylvania 50/50 joint venture with Spectra Energy Direct access to Texas Eastern and Dominion Transmission pipelines and access to Northeast and Mid-Atlantic markets = Dominion Midst
Slide 17: PennEast Pipeline
nEast Pipeline = Signed precedent agreements for 990 Mdth/day = Current ownership: NJR, GAS, SJI, UGI at 20 percent and PSEG and SEP at 10 percent cy Community
Slide 18: NJRCEV: Commercial and Residential Portfolio
NJRCEV: Commercial and Residential Portfolio Commercial Solar * Projects include roof- and ground- mounted installations, both grid- connected and net-metered ° 22 projects in service ° 82.4MW Residential Solar - The Sunlight Advantage® * Approximately 4,050 customers added since inception ° 36.0 MW
Slide 19: PTC and ITC Extended By Congress
PTC and ITC Extended By Congress What happened? = PTC extended for wind projects * 10 years of PTC at full level ($23 per MW) for projects under construction by December 2016 * Declines 20 percent per year for projects starting construction in 2017, 2018 and 2019 = ITC extended for solar projects wi
Slide 20: New $84 Million Ringer Hill Wind Project
New $84 Million Rin Located about 60 miles southeast of Pittsburgh = 14GE turbines with a total capacity of 39.9 megawatts = Expected to be in-service in the first quarter of fiscal 2017 = Majority of energy produced will be hedged under a 15-year agreement with Iron Mountain = Expected to qualify f
Slide 21: Onshore Wind Portfolio
Onshore Wind Portfolio IN SERVICE - January 2015 Carroll Area Alexande: Size 9.7 MW 20 MW 50.7MW Location —_| 93 miles SE of Helena, MT 65 miles NW of Des Moines, 1A | Rush County, Kansas Capital $21 million $42 million $85 million Contractor | Mortensen Construction Mortenson Construction Mortenson
Slide 22: New Jersey Residential Market Opportunities
New Jersey Residential Market Opportunities Sunlight Advantage provides customers with 25-30 percent savings versus current utility rates = Offerings in 2017 likely to offer 15-20 percent savings Solar panel and inverter prices are projected to decline = More efficient panels help to control labor c
Slide 23: New Jersey Clean Energy Market
New Jersey Clean Energy Market New Jersey legislature passes law to boost renewables markets t RPS Renewable Portfolio Standard SACP Solar Alternative Compliance Payment Compliance Options Law established Set penalties for (1) Construct requirements for non-compliance solar, (2) purchase Load Servin
Slide 24: Improved SREC Fundamentals
Improved SREC Fundamentals Installations (MW) SREC Prices 90.0 $350.0 = $285) oe $2000 700 $250.0 60.0 50.0 $2000 40.0 $150.0 200 $1000 200 eh 0 a $500 & gaggaaaaaaess a ae F4 Fs? “fy 3g Rs Ss ea NJRCEV forecasts SREC production to grow to 216,000 by fiscal 2018 Source of Monthly Capacity Additions:
Slide 25: NJRCEV Is Actively Hedging SRECs to Reduce Future Price Volatility
NJRCEV Is Actively Hedging SRECs to Reduce Future Price Volatility 250 216 8 ire] id a ‘oO a 3s e cS 3 3 Pc is FY16 FYI7E FY18E @Hedged M™Expected Generated == Current Generation Pct. Hedged: 92% 61% 39% Average Price: $211 $225 $230 As of January 31, 2016
Slide 26: Strategy
Strategy = Create value from a diverse portfolio of physical gas assets and services = Provide physical, producer and asset management services to wholesale customers across North America Business Lines = Firm storage (40 Bcf in the US and Canada) = Firm transportation (1.4 Bcf/d) = Producer service
Slide 27: NJR Energy Services
NJR Energy Services = In business since 1995 and generated NFE every year = Realistic NJRES earnings forecast for fiscal 2016 and beyond $90 NFE meee eeaenhnfb FYIIA FYI2A FY13A 3YrAvg FY14 FY15SA FYI6E FY17E FYI8E 7 Chicago Financial Community qual a
Slide 28: Our Path To Incremental Growth
Our Path To Incremental Growth Fiscal 201 NUNG Fiscal 2017 ¥ Customer growth Fiscal 2018 v CIP NJNG ¥ BGSS incentives vy New boa ¥ Infrastructure programs NING ¥ NJRISE (post rate case) v SAVEGREEN ¥ SRLin service v NJRISE Midstream Y SAFE (post rate case) ¥ on fase fling v PennEast continued Midstr
Slide 29: Appendix
APPENDIX
Slide 30: Procedural Schedule of the Office of Administrative Law
Procedural Schedule of the Office of Administrative Law April Public hearings Week of April 11°, 2016 Discovery conference May 20, 2016 NJNG produces its 10+2 Update June 6, 2016 Discovery/ Settlement Conferences Week of June 20, 2016 Settlement Conferences June 30, 2016 Rate Counsel/Intervenor Pre-
Slide 31: Capital Expenditures
Capital Expenditures (SMM) Total Regulated NJRCEV New Customer $33.1 $35.2 $32.6 $31.5 $132.4 Maintenance/other 79.0 81.1 81.8 87.7 329.6 SAFE/SAFE Extension 32.8 317 33.3 31.3 129.1 Sandy 2.4 - = - 2.4 NJ RISE 7A 17.9 27.5 33.5, 86.3, NGV Stations 49 : = = 4.9 Liquefaction 16.7 5.8 = - 22.5 Souther
Slide 32: Strong Internal Cash Generation to Support Capital Programs
Strong Internal Cash Generation to Support Capital Programs sum FY15A FY16E FYI7E FY18E [Cash Flow from Operations $386.8 $127.9 $319.9 $340.2 [Uses of Funds Capital expenditures - NING ($167.8) ($291.1) ($230.5) ($184.0) Capital expenditures - Penn East (5.8) (41.7) (160.2) (32.4) Capital expenditu
Slide 33: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Areconciliation of NFE for the first quarter of fiscal years 2016 and 2015 to net income is provided below: Three Months Ended December 31, (Thousands) 2015 2014 123,32 Net income $48,647 $ 0 |Add: Unrealized (gain) on derivative instruments (1,135) (88,673) Effec
New Jersey Resources — Chicago Financial Community, April 6-7, 2016 on 6ix