Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — New York Financial Community (June 2012)
35 slides from Newjersey Resources's conference presentation, Jun 13, 2012
Slide 1: New Jersey Resources: A Premium Company Delivering Premium Results
New Jersey Resources A Premium Company Delivering Premium Results New York Financial Community June 13, 2012 Exhibit 99.1
Slide 2: Forward-Looking Statements Disclaimer
2 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,” “intend,” “expect,” or “continue”
Slide 3: Disclaimer Regarding Non-GAAP Financial Measures
3 This presentation includes the non-GAAP measures net financial earnings (losses) 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, net income, operat
Slide 4: Celebrating 60 years of service
4 Total Revenue $3.2 million Net Income $351,ooo Assets $28.4 million Dividends Paid $66,391 Total Customers 90,000 Celebrating 60 years of service
Slide 5: Consistent Results
+ Higher Net Financial Earnings (NFE) for the six months ended March 31, 2012 $2.88 vs. $2.33 last year, a 24 percent increase + NFE guidance reaffirmed – range of $2.60 to $2.80 per share Two decades of improved financial performance + Increased dividend 5.6 percent effective January 3, 2012 Attrac
Slide 6: Our Business Model
We focus on the fundamentals We have a record of consistently delivering premium earnings and dividend growth Natural Gas Distribution Steady customer growth Infrastructure investment opportunities Regulatory incentives Clean Energy and Retail Services Residential solar programs Commercial rooftop a
Slide 7: Strategy
Slide 8: Steady Customer Growth
3,492 new customers in the first six months of fiscal 2012, a 14 percent increase over fiscal 2011 261 existing customer heat conversions Customer growth through March 2012 to add about $1.9 million of utility gross margin annually Conversion breakdown: 68 percent oil 25 percent electric 7 percent p
Slide 9: Value for Customers
Source: US Energy Information Administration Data as of March 2012. Based on 100,000 comparable BTUs 9 We have a strong price advantage in our service territory Value for Customers
Slide 10: A Growing Service Area
10 Monmouth 44% Our service territory is among the fastest growing in the state with Ocean County accounting for half our growth A Growing Service Area
Slide 11: Future New Construction
Potential New Customers = 90,000 Sources: Arthur D. Little, Harte Hanks and NJNG 11 + New residential construction market improving Based on NJ Builders Association (NJBA) data, Ocean County produced the State’s highest annual average number of building permits (3,500) during the 2000 decade Rutgers
Slide 12: Potential Conversions
aE + . ' Potential Conversions = 127,800 + Ss Non Heat een = + ~ f + ~ 52,077 - Off Main + 4. Near Main Qecventave
Slide 13: Regulatory Update
Conservation Incentive Program Accelerated Infrastructure Programs (AIP) Constructive regulatory environment and support of public policy objectives creates potential growth investment opportunities for NJNG 13 Customers have reduced usage and saved over $219 million since inception in 2006 Filed fo
Slide 14: Infrastructure Investment Opportunities
Safety Acceleration and Facility Enhancement (SAFE) Program 14 NJ Energy Master Plan supports increased use of natural gas as well as enhancements to system infrastructure Filed with the BPU on March 20, 2012 to replace approximately 343 miles of unprotected steel and cast iron distribution main Pos
Slide 15: System Reliability
15 NJNG average response time ranked in the top quartile nationally and best in New Jersey in 2011 System Reliability
Slide 16: Continuously working to meet customer expectations
+ Over 6 million meters read + More than 1 million customer calls handled + Invested almost $96 million to support customer growth and system reliability + Lowest number of BPU complaints per 1,000 customers for 19 consecutive years through March 31, 2012 + Highest in Customer Satisfaction With Resi
Slide 17: 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 18: Our Clean Energy Advantage
Consistent with our core energy strategy Meaningful earnings growth opportunities Competitively priced electricity for customers Strong legislative commitment to solar in NJ Supports NJ’s Energy Master Plan Clean energy investments contributed $22 million to NFE in the first six months of fiscal 201
Slide 19: Pending Solar Legislation
Anticipated legislation in support of New Jersey’s solar industry is pending for vote in both State Assembly and Senate Governor supporting solar industry for environmental, job creation and energy cost benefits to New Jersey Renewable portfolio standard (RPS) significantly increased starting in ene
Slide 20: Overview of New Jersey's Clean Energy Initiatives
Current proposed legislation supports a sustainable solar industry in New Jersey 20 Overview of New Jersey’s Clean Energy Initiatives (GWhrs)
Slide 21: Declining Solar Material Costs
21 Solar industry costs are reducing to competitive levels Source: Lawrence Berkeley National Laboratory ( Behind the meter weighted average installed cost) * Industry estimate for 2011 and 2012 Declining Solar Material Costs
Slide 22: The Sunlight Advantage: Residential
Fiscal 2012 Q2 results: 272 operational in fiscal 2012 Average size: 7.4 kilowatts $7 million of capital deployed Capital projection of approximately $20.5 million in fiscal 2012 To date, homeowners have saved over $390,000 on their electric bills annually Pipeline for residential solar leases remai
Slide 23: The Sunlight Advantage: Commercial
+ Expanding NJR brand beyond traditional service territory + Completed projects in fiscal 2011 and 2012: Commercial + $96.4 million placed in service in fiscal 2012 + Medford project announced $20 million, 6.7 MW project In service date planned for Q1 fiscal 2013 Additional project opportunities for
Slide 24: NJR Energy Services
+ Changes in volatility and increased shale production have changed the competitive landscape + Focus on long-option strategy and disciplined risk management Provide asset management services to producers Focus on growing demand for electric generation and petrochemicals NJRES NFE expected to be 5 t
Slide 25: NJR Energy Holdings
Midstream investments contributed $3.8 million in the first six-months of fiscal 2012; Expected to contribute between 3 and 10 percent of total 2012 NFE Steckman Ridge 50 percent joint venture with Spectra Energy Up to 12 Bcf storage facility in southwestern Pennsylvania 66 percent of Steckman Ridge
Slide 26: Home Services Advantage
Consistently delivers high-quality products and service levels 26 Serves nearly 140,000 customers with Premier Service Plans, service contracts and equipment installations Geographic expansion Currently marketing in Sussex, Warren and Hunterdon counties Fiscal 2011 revenue of more than $36 million,
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Slide 28: Delivering Results
27 ($MM) Company 2012 2011 Change FYTD March 31, Delivering Results New Jersey Natural Gas $70.9 $68.4 $2.5 NJR Energy Services 23.5 19.2 4.3 NJR Clean Energy 22.0 5.2 16.8 NJR Energy Holdings 3.8 3.9 (0.1) NJR Home Services/Other (0.8) (0.5) (0.3) Total $119.4 $96.2 $23.2 NFE per basic share $2.88
Slide 29: A Record of Consistency
NJR currently estimates net financial earnings of $2.60 to $2.80 per basic share in fiscal 2012 28 $1.50 $1.80 $2.10 $2.40 $2.70 2008 2009 2010 2011 2012 Current Range $2.24 $2.40 $2.46 $2.58 $2.60-$2.80 Net Financial Earnings A Record of Consistency
Slide 30: 2012 Earnings Guidance
Infrastructure-based businesses expected to contribute about 90 percent of fiscal 2012 NFE 29 2012 Earnings Guidance
Slide 31: Dividend Growth
19 dividend increase in 17 years; 1-year growth rate of 5.6 percent compared with 3.7 percent for peers * Effective January 3, 2012 ** Based on current indicated dividend rates 30 th $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 2007 2008 2009 2010 2011 2012* $1.01 $1.12 $1.24 $1.36 $1.44 $1.52 Dividend Growt
Slide 32: Payout Ratio
Strong reinvestment to support future growth * Based on NJR Net Financial Earnings ** Peer group average based on 2011 earnings estimates and indicated dividend from Bloomberg. Peer group: ATO, GAS, LG, NWN, PNY, SJI, SWX, VVC and WGL 31 0% 16% 33% 49% 65% 2005 2006 2007 2008 2009 2010 2011 Peer Gro
Slide 33: Capital Expenditures
Capital expenditures support future growth 32 ($MM) Fiscal 2012 2012 2011 Estimate FYTD March 31, Capital Expenditures NJNG New Customer $10.8 $10.2 $20.6 System Integrity 11.6 10.8 33.3 AIP Projects 14.9 15.8 49.9 Technology & Other 5.1 6.8 8.4 Cost of Removal 6.8 3.6 9.0 Sub-total NJNG 49.2 47.2 1
Slide 34: Delivering Premium Results
We have the fundamentals in place to achieve continued operational excellence, consistent results and long-term growth 33 Core utility provides majority of earnings Pursue complementary non-regulated businesses Work constructively with regulators and policymakers Maintain strong financial profile A
Slide 35: New Jersey Resources: A Premium Company Delivering Premium Results
New Jersey Resources A Premium Company Delivering Premium Results New York Financial Community June 13, 2012
New Jersey Resources — New York Financial Community (June 2012) on 6ix