Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Q4 2012 Earnings Presentation
35 slides from Newjersey Resources's earnings presentation, Nov 29, 2012
Slide 1: New Jersey Resources 4th Quarter Fiscal 2012 Update
New Jersey Resources 4 th Quarter Fiscal 2012 Update November 29,2012 Exhibit 99.2
Slide 2: 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. Forward- looking statements can also be identified by the use of forward-looking terminology such as “may,” "will", “intend,” “expect,” "believ
Slide 3: Disclaimer: Regarding Non-GAAP Financial Measures
3 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 meaningful than, GAAP measures such as cash flow,
Slide 4: Slide 4
Slide 5: Delivering Results
4 ($MM) Company 2012 2011 Change September 30, Delivering Results New Jersey Natural Gas $73.2 $71.3 $1.9 NJR Clean Energy 19.5 6.8 12.7 NJR Energy Services 10.8 18.6 (7.8) NJR Energy Holdings 6.7 6.8 (0.1) NJR Home Services 2.5 2.4 0.1 Other (0.3) 0.6 (0.9) Total $112.4 $106.5 $5.9 NFE per basic sh
Slide 6: Consistent Performance
5 Five year CAGR of 5.1 percent Consistent Performance
Slide 7: Fiscal 2012 Earnings: Comparison to Guidance
6 Infrastructure-based businesses contributed 90 percent of fiscal 2012 NFE Fiscal 2012 Earnings: Comparison to Guidance
Slide 8: Dividend Growth
19 dividend increase in 17 years * Current annual rate 7 th Dividend Growth
Slide 9: Payout Ratio
Strong reinvestment to support future NFE growth * Based on NJR Net Financial Earnings ** Peer group average based on 2012 earnings estimates and indicated dividend from Bloomberg. Peer group: ATO, GAS, LG, NWN, PNY, SJI, SWX, VVC and WGL 8 Payout Ratio*
Slide 10: Strong Customer Growth
Strong demographics to support customer growth 9 6,704 new customers in fiscal 2012 539 existing customer heat conversions Customer growth expected to add about $3.7 million of utility gross margin annually Conversion breakdown: 65 percent oil 23 percent electric 12 percent propane Estimate 12,000 t
Slide 11: Value for Customers
Source: US Energy Information Administration Data as of October 2012. Based on 100,000 comparable BTUs 10 We have a strong price advantage in our service territory Value for Customers
Slide 12: Infrastructure Investment Opportunities
Approved by the BPU on October 23, 2012 Four-year program - $130 million Replace approximately 276 miles of unprotected steel and cast iron distribution main Cost recovery at a weighted average cost of capital of 6.9 percent Common Equity component 9.75 percent with a 53.5 percent equity ratio Shoul
Slide 13: Regulatory Incentives
Off-system sales and capacity release In place since 1992 Optimization of capacity and supply contracts Sharing formula of 85 percent customer; 15 percent NJNG Storage Incentive (SI) In place since 2004 Promotes long-term price stability Promotes efficient contract utilization Sharing formula of 80
Slide 14: NJR Clean Energy Ventures
New legislation signed by Governor Christie in July 13 Clean energy investments contributed $19.5 million to NFE in fiscal 2012 35.7MW of installed capacity; over 45,000 SRECs generated annually Meaningful earnings growth opportunities Competitively-priced electricity for customers Strong legislativ
Slide 15: The Sunlight Advantage
Fiscal 2012 results: 778 homes added in fiscal 2012 Average size: 7.5 kilowatts $20.5 million of capital deployed Customers are expected to save over $630,000 in electric costs after lease payments annually at current electric rates 1,000 th customer signed in August 2012 14 The Sunlight Advantage®
Slide 16: The Commercial Sunlight Advantage
Completed projects in place totaling 27.6MW Capital of more than $127 million Fiscal 2013 projects: • Ground-mounted system • $20 million; 6.7 MW project • In-service as of October 15, 2012 • Rooftop system • $6.9 million; 2.4 MW project • In-service date planned for Q1 fiscal 2013 15 Medford Wakefe
Slide 17: OwnEnergy Investment
16 Announced on September 11, 2012 $8.8 million investment to acquire an approximate 20 percent equity interest OwnEnergy manages the process for on-shore wind projects to make them “shovel-ready” Provides NJR Clean Energy Ventures (CEV) with effective, first-hand knowledge of the wind energy busine
Slide 18: Other Non-Regulated Businesses
NJR Energy Services contributed $10.8 million to NFE in fiscal 2012 Focusing on long-option strategy and disciplined risk management Providing customized energy solutions to its customers Producers, Utilities, Power Generators, Pipelines and Industrials 17 NJR Energy Holdings NJR Energy Services Con
Slide 19: NJR Home Services
Contributed $2.5 million to NFE in fiscal 2012 Pursuing geographic expansion Currently marketing in Sussex, Warren and Hunterdon counties Expanded services now offered Whole house electric and plumbing contracts Standby generator contracts 18 NJR Home Services
Slide 20: Superstorm Sandy
19 Facts: Landfall just south of Atlantic City, NJ Same time as high tide and a full moon Added an additional six feet to the storm surge Winds: 90+ miles per hour 970 miles wide. By contrast: Andrew 180 miles wide Katrina 460 miles wide Irene 520 miles wide 943mb – lowest pressure ever recorded at
Slide 21: Mantoloking, NJ (Seaside Peninsula)
20 Before After Mantoloking, NJ (Seaside Peninsula)
Slide 22: NJNG Natural Gas Exposed Main, Route Mantoloking, NJ
NJNG Natural Gas Exposed Main, Route 35 Mantoloking, NJ 21
Slide 23: Seaside Heights, NJ (Seaside Peninsula)
22 Before After Seaside Heights, NJ (Seaside Peninsula)
Slide 24: Manasquan, NJ (Monmouth County Mainland)
Manasquan, NJ (Monmouth County Mainland)
Slide 25: Superstorm Sandy – Initial Assessment
In the first three days following the storm, NJNG crews responded to over 1,300 leaks and made them all safe Over 400 individuals on the ground in affected areas Crews from other east coast utilities worked alongside NJNG personnel Safety #1 Priority Decision made to shut down system on the Seaside
Slide 26: Superstorm Sandy – Scope of Curtailments
25 Area Miles of Pipe Curtailed Number of Customers Affected Superstorm Sandy – Scope of Curtailments Seaside Peninsula 15,207 Long Beach Island 13,756 Other affected areas 1,104 Total 30,067
Slide 27: Superstorm Sandy – Restoration Plans
Long Beach Island Assessment of pipe revealed less damage than expected (no water) Majority of main and services salvageable Restoration Plan implemented in three phases Reintroduce natural gas into the main Repair and replace meters to bring natural gas to the meter with leak surveys done at increm
Slide 28: Superstorm Sandy – Restoration Plans
Seaside Peninsula 27 More debris than LBI which has slowed assessments Assessment of pipe revealed more damage than LBI (but again, no water) Much of main salvageable Expect to begin restoration process by December 3, 2012 NJNG is installing approximately one mile of inch main - the backbone of the
Slide 29: Superstorm Sandy – Restoration Summary
28 Area Miles of Pipe Curtailed Number of Customers Affected Pct. of Customers with Gas Available* Superstorm Sandy – Restoration Summary Seaside Peninsula 15,207 - Long Beach Island 13,756 99% Other 1,104 98% Total 30,067 * As of November 26
Slide 30: Superstorm Sandy – Financial Impacts
NJNG Capital Spending 29 * Preliminary and subject to change Currently estimated at $40-$60 million* Mains, services and predominately meter assemblies at customer’s premise As with normal operations, storm-related capital costs will be treated as additions to rate base Options Seek regulatory appro
Slide 31: Superstorm Sandy – Financial Impacts
Incremental O&M Costs Currently estimated at $$12-$20 million* Assessment, leak survey and leak repair Petition filed with the NJ BPU seeking deferred accounting treatment for incremental storm-related costs Precedent exists in New Jersey for incremental O&M costs to be deferred and recovered subseq
Slide 32: Superstorm Sandy – Financial Impacts
Lost Utility Gross Margin Lost gross margin is estimated at about $1.5 -$2 million per month during the winter* Total utility gross margin in fiscal 2012 was nearly $276 million Expect all customers who can have service safely restored to be completed by December 31 Some customers with severe damage
Slide 33: Superstorm Sandy – Liquidity
NJNG has adequate liquidity to cover storm expenses $200 million syndicated credit facility in place Accordion feature of $50 million has been exercised Long-term debt BPU approval in place for up to $200 million 2013 plan included $50 million, but may be upsized, if needed Additional lines have bee
Slide 34: As We Look Ahead
Earnings guidance will be given as usual with our first quarter fiscal 2013 earnings We will continue to provide updates on our system restoration progress http://www.njng.com/safety/hurricane-sandy-updates/index.asp 33 As We Look Ahead
Slide 35: New Jersey Resources 4th Quarter Fiscal 2012 Update
New Jersey Resources 4 th Quarter Fiscal 2012 Update November 29,2012