Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — American Gas Association Financial Forum 2006
32 slides from Newjersey Resources's conference presentation, May 8, 2006
Slide 1: American Gas Association Financial Forum
American Gas Association Financial Forum Scottsdale, AZ May 8, 2006 Exhibit 99.01
Slide 2: Regarding Forward-Looking Statements
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. Forward-looking statements can also be identified by the use of forward-looking terminology such as "may,"
Slide 3: A Quality Company
A Quality Company New Jersey Resources is a company with ... 14 consecutive years of growth, an industry record A 5-year average annual return of 14 percent An above average dividend growth rate of 5.9 percent A strong financial profile (S+P: A+, Moody's: Aa3) A market capitalization of $1.2 billion
Slide 4: March FYTD Earnings
March FYTD Earnings $3.41 per share vs. $2.96 per share - 15 percent increase Lower usage at NJNG due to the pass-through of higher wholesale natural gas prices Offset continued strong customer growth NJRES major contributor to earnings Future longer-term earnings contribution 20 to 30 percent of to
Slide 5: Our Service Area
Our Service Area Largest independent LDC in New Jersey Growing customer base Primarily residential and small commercial Consistent growth forecast NYC Phila. Atlantic City Excellent service area demographics
Slide 6: Today's Issues
Today's Issues Mild winter has mitigated the need for price increases Prices down approximately 28 percent from pre-heating season highs Most Gulf production back online, but... NYMEX remains high for next winter and summer Price is affecting usage, so... We need to align our regulatory strategy wit
Slide 7: What Are We Doing About It?
What Are We Doing About It? Hedging our portfolio (63 percent hedged for 2006- 07 winter) Using incentive programs to moderate volatility Ensuring access to cost-effective supply Restructuring portfolio to access the emerging Appalachia supply hub Providing credits to customers, and, Considering alt
Slide 8: Incentive Programs
Incentive Programs Programs extended through October 2007 Customer bills reduced by about $294 million, or 4 percent, annually since program inception 2001 2002 2003 2004 2005 FYTD 2006 Customer Savings 25 24 19 28 31 28 Shareowner Margin 5 5 5 6 6 6 $29 $30 $24 $34 $37 $37 $34
Slide 9: Fiscal 2006 Firm Sales
Fiscal 2006 Firm Sales Firm sales are down 11.7 percent About one-half is attributed to weather Covered by WNC $7 million to be collected from customers Balance is not covered by WNC Lower usage due to higher prices Total Usage Temperature East 0.117 0.061 0.056 MSGraph.Chart.8 MSGraph.Chart.8 MSGra
Slide 10: Conservation and Usage Adjustment
Conservation and Usage Adjustment Discussions on the proposal are continuing with the BPU and the Ratepayer Advocate PSEG/Exelon merger has slowed BPU staff review The Company is hopeful of a successful resolution to the case in effect for fiscal 2007 If NJNG is not successful in receiving approval
Slide 11: Strong Customer Growth
Strong Customer Growth 1999 397 2000 410 2001 423 2002 434 2003 444 2004 455 2005 462 2QFY06 468 Customer growth still critical for future success New Conversions 3831 1973
Slide 12: Future Growth Potential
Preliminary 30899 Final 19736 Conceptual 3724 Pending 479 Pending Preliminary Final Conceptual Non Heat 9751 On Main 39880 Off main 81334 New Customers = 54,838 Non-heat customers Non-gas off main Non-gas on/near main Conversions = 130,965 Future Growth Potential Sources: Local Planning Boards and N
Slide 13: NJR Energy Services
NJR Energy Services
Slide 14: Portfolio Strategy
Portfolio Strategy Integrated physical assets provide the opportunity for profitability across different regions Diverse portfolio captures additional value when prices change between locations Interstate pipeline grid bottlenecks coupled with supply/demand imbalances create value opportunities oppo
Slide 15: Working Capital Volatility
Working Capital Volatility 9/1/2000 12/1/2000 3/1/2001 6/1/2001 9/1/2001 12/1/2001 3/1/2002 6/1/2002 9/1/2002 12/1/2002 3/1/2003 6/1/2003 9/1/2003 12/1/2003 3/1/2004 6/1/2004 9/1/2004 12/1/2004 3/1/2005 6/1/2005 9/1/2005 12/1/2005 3/1/2006 -43.6 23 -99.1 -56.7 -20.5 17.8 55.3 75.2 48.5 67.8 -37.8 -2
Slide 16: Capital Expenditures
Capital Expenditures Customer Growth 23.1 System Integrity 24.1 Technology & Other 3.5 Cost of Removal 5.6 MGP, net 8.1 Pipeline Integrity 11 New Customer 11.4 System Integrity 8.3 Technology & Other 1 Cost of Removal 3 MGP, net 4 Pipeline Intregrity 2.2 2006 Forecast: $75.4 million FYTD 2006 Actual
Slide 17: Consistent Earnings Growth
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 2006 1.28 1.37 1.48 1.56 1.67 1.81 1.97 2.12 2.41 2.6 2.7 2.79 3.41 Consistent Earnings Growth NJR estimates $2.75 to $2.85 per basic share in fiscal 2006 * Net of certain items * * September 30 March 31
Slide 18: Return on Equity
Allowed ROE of 11.5 percent Incentive programs provide 1 to 1.5 percent of incremental return Balance primarily from unregulated wholesale energy services 1997 1998 1999 2000 2001 2002 2003 2004 2005 0.139 0.142 0.145 0.148 0.153 0.153 0.159 0.156 0.153 Return on Equity
Slide 19: Dividend Growth and Payout Ratio
1995 1996 1997 1998 1999 2000 East 1.52 1.56 1.6 1.64 1.68 1.72 2000 2001 2002 2003 2004 2005 2006 1.15 1.17 1.2 1.24 1.3 1.36 1.44 * Effective January 3, 2006 * Dividends per Share Payout Ratio Dividend Growth and Payout Ratio 2000 2001 2002 2003 2004 2005 0.64 0.59 0.57 0.51 0.5 0.49 1-year divide
Slide 20: Capital Structure
Capital Structure Common Equity 617.5 LT Debt 334.5 ST Debt 91.9 Common Equity 480.6 LT Debt 309.5 ST Debt 18.4 March 31, 2006
Slide 21: Share Repurchase Program
Share Repurchase Program Shares Authorized (millions): 3.5 Shares Repurchased (millions): 2.5 Split-adjusted average cost: $29.01 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2QFY06 East 33 241 249 320 378 126 185 47 31 547 305 March 31, 2006 Plan expanded to 3.5 million shares in January 2006
Slide 22: NJR: Quality Performance
Growing natural gas distribution business Disciplined wholesale energy services strategy Strong regulatory relations Excellent financial profile Consistent financial performance NJR Peer Group S&P 500 5 Years 0.135 0.082 0.036 NJR: Quality Performance March 31, 2006
Slide 23: Appendix A: Gross Margin
Appendix A: Gross Margin Gross margin is a non-GAAP measure. NJNG's gross margin is defined as gas revenues less gas purchases, sales tax and a Transitional Energy Facilities Assessment (TEFA), which is included in Energy and other taxes on the Consolidated Statements of Income. Management believes
Slide 24: Appendix B: Our Leadership Team
Appendix B: Our Leadership Team Laurence M. Downes Chairman & Chief Executive Officer New Jersey Resources Mr. Downes is Chairman of the Board and Chief Executive Officer of New Jersey Resources (NJR) and its principal subsidiary, New Jersey Natural Gas (NJNG). He joined NJR in March 1985 and was ap
Slide 25: Appendix B: Our Leadership Team
Appendix B: Our Leadership Team Oleta J. Harden Senior Vice President, General Counsel and Secretary New Jersey Resources Serving as General Counsel, Mrs. Harden handles all legal matters for New Jersey Resources (NJR). She joined NJR in 1984. In addition to her legal duties, she is responsible for
Slide 26: Appendix B: Our Leadership Team
Appendix B: Our Leadership Team Mariellen Dugan Vice President and General Counsel New Jersey Resources Ms. Dugan joined New Jersey Resources (NJR) in December 2005. In addition to legal matters, her responsibilities include corporate governance, compliance, insurance and rights of way and claims. P
Slide 27: Appendix B: Our Leadership Team
Appendix B: Our Leadership Team Timothy C. Hearne Jr. Senior Vice President and Treasurer NJR Service Mr. Hearne joined New Jersey Natural Gas in 1985 and heads the financial services business unit of NJR Service. His areas of responsibility include: finance, accounting, supply chain management and
Slide 28: Appendix B: Our Leadership Team
Appendix B: Our Leadership Team George C. Smith Jr. Vice President - Internal Audit NJR Service Mr. Smith joined New Jersey Resources in 1984 as an Associate Auditor, and in his most recent role as Director - Internal Audit, has systematically redefined the internal audit function at NJR. He is cert
Slide 29: Appendix B: Our Leadership Team
Appendix B: Our Leadership Team Kathleen F. Kerr Vice President - Marketing and Customer Services New Jersey Natural Gas Mrs. Kerr is responsible for marketing and customer services at New Jersey Natural Gas (NJNG). Prior to joining NJNG in 2005, Mrs. Kerr was Director - Customer Services for Newark
Slide 30: Appendix B: Our Leadership Team
Appendix B: Our Leadership Team Mark R. Sperduto Vice President - Regulatory Affairs New Jersey Natural Gas Mr. Sperduto joined New Jersey Natural Gas (NJNG) in March 2005 and is responsible for regulatory affairs and supports initiatives on key issues such as price stability, customer choice and im
Slide 31: Appendix B: Our Leadership Team
Appendix B: Our Leadership Team Stephen D. Westhoven Vice President NJR Energy Services Mr. Westhoven joined New Jersey Natural Gas in 1990, working in the engineering and gas supply departments, before his promotion to Director - Energy Trading of NJR Energy Services (NJRES). He is currently respon
Slide 32: American Gas Association Financial Forum
American Gas Association Financial Forum Scottsdale, AZ May 8, 2006
New Jersey Resources — American Gas Association Financial Forum 2006 on 6ix