Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Q1 2020 Earnings Presentation
24 slides from Newjersey Resources's earnings presentation, Feb 7, 2020
Slide 1: First Quarter 2020 Results
First Quarter 2020 Results February 6, 2020
Slide 2: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures Forward Looking Statements Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the This presentation includes the non-GAAP measures, NFE and utility gross margin. As an Securities Act of 1933, as
Slide 3: Agenda
Agenda ▪ First Quarter 2020 Highlights Steve Westhoven ▪ Financial Review Pat Migliaccio ▪ Q&A
Slide 4: First Quarter 2020 Highlights
First Quarter 2020 Highlights Steve Westhoven President & Chief Executive Officer
Slide 5: First Quarter Fiscal 2020 Highlights
First Quarter Fiscal 2020 Highlights ▪ Basic earnings per share of $0.97, flat compared to last year Financial ▪ Net financial earnings (NFE)* per share of $0.44 compared to $0.61 last year Results ▪ Re-affirmed fiscal 2020 NFE guidance of $2.05 - $2.15 per share ▪ Rate case settlement with new rate
Slide 6: Reaffirming fiscal 2020 NFE Guidance of $2.05 – $2.15
Fiscal 2020 NFE Guidance Reaffirming fiscal 2020 NFE Guidance of $2.05 – $2.15 68% – 77% of NFE from Regulated Businesses NJRES Midstream 1% - 5% 10% - 15% Regulated Unregulated NJNG CEV 68% - 77% 27% - 37% 58% - 62% 25% - 30% NJRHS 1% - 2% 5
Slide 7: New Jersey Natural Gas
New Jersey Natural Gas New Customer Additions Southern Reliability Link Annual Total Customer Growth Rate: ~1.8% in FY 2020E ▪ Completed over 65% of the project through 9,711 9,800 fiscal 1Q20 ▪ Expected in-service date in 2021 ▪ NJNG will file a rate case to recover costs associated with the constr
Slide 8: NJR Midstream – Adelphia Gateway
NJR Midstream – Adelphia Gateway Recent Developments ▪ Received FERC Certificate on December 20, 2019 ▪ Closed acquisition in January 2020 Next Steps ▪ Receive required permits including FERC’s Notice to Proceed ▪ Add compression, new laterals and interconnects to the southern portion of the pipelin
Slide 9: NJR Midstream – PennEast Pipeline
NJR Midstream – PennEast Pipeline Project Overview ▪ 20 percent ownership in 120-mile transmission pipeline to Northeast connecting Marcellus Shale region supply ▪ Access to the lowest cost supply point in North America; expected to benefit customers and local economies ▪ Approved by FERC – January
Slide 10: Clean Energy Ventures
Clean Energy Ventures Fiscal 2020 Commercial MW in Service 2.9 Incremental installed capacity from one MW commercial project in fiscal 1Q20 2.9 52-57 Expected incremental capacity from MW commercial projects in FY20 52 - 57 Over Sunlight Advantage residential solar 8,200 customers at the end of fisc
Slide 11: New Jersey Transitional Solar Market
New Jersey Transitional Solar Market ▪ Transitional market approved in December 2019 ▪ Projects are eligible for Transitional Renewable Energy Credits (TRECs) if they: ▪ Filed a complete Solar Renewable Program registration after October 29, 2018 and, ▪ Are not in commercial operation at the time th
Slide 12: Financial Review
Financial Review Patrick Migliaccio Senior Vice President & Chief Financial Officer
Slide 13: Changes in Net Financial Earnings – Fiscal 1Q20
Changes in Net Financial Earnings – Fiscal 1Q20 Fiscal 1Q19 – Consolidated NFE ($MM) $54.1 Changes in NFE – Fiscal 1Q20 ($MM) NJNG $12.1 Utility Gross Margin $16.9 Decrease in O&M Expenses $2.0 Increase in D&A, Interest Expense & Income Taxes ($7.5) $0.6 Other Income $0.7 $12.1 $15.1 NJR Midstream (
Slide 14: NJR Capital Plan
NJR Capital Plan ($MM) 1Q20A FY 2020E FY 2021E FY 2022E N e a r R e a l- T im e R e t urn? New Jersey Natural Gas* New Customer $13 $42 $38 - $48 $39 - $49 Yes Maintenance $13 $97 $90 - $100 $85 - $95 Cost of Removal/Other $10 $49 $66 - $72 $58 - $68 SAFE II $13 $51 - - - - - - Yes NJ RISE $4 $27 -
Slide 15: NJR Projected Cash Flows
NJR Projected Cash Flows ▪ FY 2020E financing activities include permanent funding for the Leaf River and Adelphia Gateway acquisitions ▪ Leaf River funded through 364-day bridge facility; NJR expects to access the debt markets for repayment during the remainder of the 2020 fiscal year ▪ Fiscal 2020
Slide 16: CEV – SREC Hedging Strategy Stabilizes Revenue
CEV – SREC Hedging Strategy Stabilizes Revenue Energy Year 2020 Energy Year 2021 Energy Year 2022 18 110 26 369 272 346 Hedged Unhedged Hedged Unhedged Hedged Unhedged Percent Average Current Percent Average Current Percent Average Current Hedged Price Price (EY) Hedged Price Price (EY) Hedged Price
Slide 17: New Jersey Resources
New Jersey \\ Resources
Slide 18: Appendix
New Jersey \\ Resources Appendix
Slide 19: First Quarter Fiscal 2020 Net Financial Earnings by Business Unit
First Quarter Fiscal 2020 Net Financial Earnings by Business Unit Three Months Ending December 31, ($ thousands) 2020 2019 Change New Jersey Natural Gas $43,856 $31,713 $12,143 NJR Midstream 3,004 3,651 (647) Regulated Businesses 46,860 35,364 11,496 NJR Clean Energy Ventures (4,916) 10,205 (15,121)
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures A reconciliation of NFE for the three months ended December 31, 2019 and 2018 to net income is provided below: Three Months Ended December 31, (thousands) 2019 2018 Net Income (Loss) $89,361 $86,248 Add: Unrealized loss (gain) on derivative instruments and related
Slide 21: NJNG – Infrastructure Investment Program (IIP)
NJNG – Infrastructure Investment Program (IIP) ▪ Five year, $507 million investment to strengthen infrastructure ▪ Natural gas transmission and distribution system enhancements ▪ Information technology system replacement Natural Gas Delivery Technology Enhancements Replacement ▪ Natural gas system e
Slide 22: NJNG - Factors Supporting Future Customer Growth
NJNG - Factors Supporting Future Customer Growth New Construction Conversions 2019 Building Permits Issued1 Equivalent Customer Cost2 $4.17 1,240 $3.93 $2.36 666 327 $0.93 247 NJNG Ocean Monmouth Morris NJNG Fuel Oil Propane Electricity Residential New Construction3 = 63,900 Residential Conversions4
Slide 23: NJNG – Southern Reliability Link (SRL)
NJNG – Southern Reliability Link (SRL) Current ▪ Received all necessary permits and approvals Status ▪ Construction began in fiscal 1Q19 ▪ Received an easement from Joint Base Approvals McGuire-Dix-Lakehurst in June 2018 ▪ NJ Pinelands Commission, NJDEP, NJBPU ▪ 30-mile pipeline designed to improve
Slide 24: SREC Hedging Strategy – Fiscal Year
SREC Hedging Strategy – Fiscal Year Fiscal Year 2020 Fiscal Year 2021 Fiscal Year 2022 11 179 204 383 367 Hedged Hedged Unhedged Hedged Unhedged Percent Average Current Percent Average Current Percent Average Current Hedged Price Price (FY) Hedged Price Price (FY) Hedged Price Price (FY) 100% $197 $