Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — New York Financial Community NJR Chat (June 2014)
17 slides from Newjersey Resources's conference presentation, Jun 25, 2014
Slide 1: New York Financial Community: NJR Chat, NJR Energy Services
Exhibit 99.1 New York Financial Community NJR Chat NJR Energy Services June 25, 2014
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 (NFE), 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 mean
Slide 4: Current Long-Term NFEPS Guidance
3 Current Long-Term NFEPS Guidance $4.50 $3.90 -$4.10 New $4.00 projected $3.28-$3.71 growth rate $3.50 $2.73 Prior $3.00 $2.71 projected $2.58 $2.46 $2.40 growth rate $2.50 $2.00 $1.50 $1.00 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E 2017E Previous New NJR expects an average long-term growth r
Slide 5: Fiscal 2015-2017 Earnings Guidance
4 Fiscal 2015-2017 Earnings Guidance Most Recent Fiscal 2015 Fiscal 2014 through Guidance Fiscal 2017 5-10% 2-5% 3-10% 2-5% 5-15% 45-50% 35-40% 60-70% 5-15% 10-20% New Jersey Natural Gas NJR Clean Energy Ventures NJR Energy Services NJR Midstream NJR Home Services NJR expects regulated businesses to
Slide 6: Capital of Over $1 Billion Drives Long-Term Growth
5 Capital of Over $1 Billion Drives Long-Term Growth NJNG Capital Investment Estimates 2009- 2012 Immediate ($mm) Actual 2013A 2014E 2015E 2016E 2017E Total Return Customer Growth $79.4 $24.5 $24.7 $25.6 $25.5 $25.5 $205.2 Yes Maintenance/Other 177.4 42.5 64.2 55.7 48.1 40.6 $428.5 AIP/SAFE 136.7 45
Slide 7: Diversified and Growing Utility Gross Margin
6 Diversified and Growing Utility Gross Margin $45.0 $41.3 $40.0 $36.0 $35.0 $29.3 $30.0 $25.0 $20.3 $20.0 $15.6 $15.0 $10.0 $5.0 $0.0 FY13A FY14E FY15E FY16E FY17E Customer Growth SAVEGREEN NGV BGSS Incentives NJR expects incremental utility gross margin to more than double by Fiscal 2017
Slide 8: NJRES: What We Do
7 NJRES: What We Do Manage physical natural gas assets Storage Transportation Supply Contracts Services include: Transport natural gas to customers Storage gas used to serve customers when demand is high Manage other companies’ assets Producer Services Fee-based service Revenue dependent on volume s
Slide 9: NJRES: Our Track Record
8 NJRES: Our Track Record In business since 1995; consistently profitable* Average tenure of employees is 10+ years Specializes in managing physical natural gas assets $180.0 $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 FYTD 14 Margin NFE
Slide 10: NJRES: Our Asset Base
9 NJRES: Our Asset Base Typical annual portfolio: Storage capacity – Approximately 40 Bcf in the United States and Canada Pipeline transportation capacity – Approximately 1.5 Bcf/day Firm Storage Firm Transportation Producer Service Area
Slide 11: NJRES: How has the Business Changed?
10 NJRES: How has the Business Changed? Volumes Sold 2.00 Marcellus Producer 1.80 Services Pipeline Asset 1.60 Management (TGPL Block sale) First LDC 1.40 Outsourcing Deal (NIMO) 1.20 1.00 Service Geographic 0.80 Contract with Expansion Electric Utility (Westbook) 0.60 Storage 0.40 Management Barnet
Slide 12: NJRES: How Do We Make Money?
11 NJRES: How Do We Make Money? Our portfolio consists of two types of physical assets Storage capacity - 40 Bcf in the US and Canada Transportation capacity – 1.5 Bcf/day We optimize transportation and storage capacity Pipeline transportation allows for natural gas to be purchased in one location a
Slide 13: NJRES: How Do We Make Money? (cont'd)
12 NJRES: How Do We Make Money? (cont’d) We manage other companies’ assets Sharing or fee based We are focused on long-option strategy and disciplined risk management Limits downside Transactions have upside potential Profits tend to be higher in the first two fiscal quarters As assets are added to
Slide 14: NJRES: How We Manage Risk?
13 NJRES: How We Manage Risk? Hedge price risk of gas in storage Disciplined risk management guidelines Limited open positions Strict internal controls and credit procedures Daily compliance monitoring by financial department IT systems customized to manage physical natural gas assets Long option st
Slide 15: NJRES: How Do We Maintain a Hedged Position with Upside Potential?
14 NJRES: How Do We Maintain a Hedged Position with Upside Potential? No Market Volatility Market Volatility January 2013 July 2014 January 2013 July 2014 P H NJRES buys 10,000 dth NJRES sells 10,000 dth NJRES buys 10,000 NJRES sells 10,000 Y @ $4.00 and injects @ $4.50 to meet dth @ $4.00 and dth (
Slide 16: NJRES: What Happened This Winter?
15 NJRES: What Happened This Winter? Weather is always the unknown variable Increased supply created growing physical natural gas market Created need for physical natural gas services Market players thinned by: Regulation - e.g. Dodd-Frank eliminated financial players Low volatility and illiquidity
Slide 17: NJRES: Things to Watch – Causes of Summer Volatility
16 NJRES: Things to Watch – Causes of Summer Volatility Weather is always the unknown variable Sector demands Electric generation, industrials, storage refill Gas storage levels Historically low end-of-season levels; ~1 Tcf below average Refill challenges Lower Canadian imports Higher exports to Mex
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