Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Investor Presentation (September 2015)
26 slides from Newjersey Resources's investor presentation, Sep 29, 2015
Slide 1: A Chat with the New York Investment Community
A CHAT WITH THE NEW YORK INVESTMENT COMMUNITY NJR Clean Energy Ventures Stanley M. Kosierowski - President Richard R. Gardner – Vice President, Business Development September 29, 2015
Slide 2: Regarding Forward-Looking Statements
Regarding Forward - Looking Statements 1 Certain statements contained in this presentation are forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 . New Jersey Resources (NJR or the Company) cautions readers that the assumptions forming the basis f
Slide 3: Disclaimer Regarding Non-GAAP Financial Measures
Disclaimer Regarding Non - GAAP Financial Measures 2 This presentation includes the non - GAAP measures net financial earnings (NFE), utility gross margin and financial margin . As indicators of the Company’s operating performance, these measures should not be considered alternatives to, or more mea
Slide 4: Fiscal 2015 NFEPS Guidance is $1.70-$1.80
Fiscal 2015 NFEPS Guidance is $1.70 - $1.80* 3 New Jersey Natural Gas NJR Clean Energy Ventures NJR Energy Services NJR Midstream NJR Home Services $1.45 - $1.55 $1.60 - $1.70 $1.65 - $1.75 $0.00 $0.45 $0.90 $1.35 $1.80 $2.25 Original 2/4/2015 5/7/2015 Current $1.70 - $1.80 » NJRES exceeding fiscal
Slide 5: Generating Average Annual NFE Growth
Generating Average Annual NFE Growth of 5 – 9 Percent* » Invest in Utility infrastructure projects that drive rate base growth x Organic customer growth x System and Facilities E nhancement program (SAFE) » Invest in Midstream projects such as PennEast Pipeline x Targeted NFE contribution from Regul
Slide 6: Dividend Growth and Payout Ratio
Dividend Growth and Payout Ratio* 5 Dividend growth goal of 6 to 8 percent annually; targeted payout of 60 – 65 percent * Current annual rate ** Assumes 6 - 8 percent average annual dividend growth *** Based on the midpoint of NFE guidance 30% 35% 40% 45% 50% 55% 60% 65% 70% 2010 2011 2012 2013 2014
Slide 7: Current Cash Flow Forecast ($MM)
Current Cash Flow Forecast 6 ($MM) 2015F 2016E 2017E Cash Flow from Operations $284.3 $237.5 $258.5 Uses of Funds Capital expenditures - NJNG ($202.6) ($233.7) ($153.9) Capital expenditures - PennEast (5.3) (42.2) (140.2) Capital expenditures - CEV (198.6) (157.3) (58.8) Dividends (76.1) (81.0) (87.
Slide 8: New Jersey Natural Gas: The Foundation of Our Business
New Jersey Natural Gas: The Foundation of Our Business » Growing customer base – serving more than 512,000 residential and commercial customers x New construction continues to expand x Strong conversion market » Infrastructure investments to strengthen distribution and transmission system are suppor
Slide 9: Strong Customer Growth Continues
Strong Customer Growth Continues 8 » 5,750 new customers added in first nine months of fiscal 2015 compared with 5,151 last year - an 11.6 percent increase x 2,793 new construction customers compared with 2,463 last year - a 13.4 percent increase x 2,957 conversions from other fuels - a 10 percent i
Slide 10: Key Trends Support Future Customer Growth
Key Trends Support Future Customer Growth 9 0.0% 5.0% 10.0% 15.0% N.J. Morris Monmouth Ocean 1.2% 6.2% 2.3% 14.1% Population Change 2000 - 2013 1 2014 - 2016 10,200 Beyond 2017 - 78,206 New Construction 3 3 . Source: A.D. Little $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 NJNG Fuel Oil Propane Electricity $
Slide 11: Collaborative Regulatory Relationships
Collaborative Regulatory Relationships 10 Regulatory and Incentive Programs » Basic Gas Supply Service Incentives (BGSS) - 1992 » Conservation Incentive Program (CIP) - 2006 » Accelerated Infrastructure Program (AIP) - 2008 » The SAVEGREEN Project® - 2009 » Safety Acceleration and Facility Enhanceme
Slide 12: Our Midstream Portfolio
Our Midstream Portfolio 11 Steckman Ridge » 50/50 joint venture with Spectra Energy » 12 Bcf natural gas storage facility in southwest Pennsylvania » Direct access to Texas Eastern and Dominion Transmission pipelines and access to Northeast and Mid - Atlantic markets PennEast Pipeline » 115 - mile p
Slide 13: NJRES: Generated NFE Every Year Since 1995
NJRES: Generated NFE Every Year Since 1995 » Serves wholesale customers across North America » Diverse portfolio of physical natural gas assets » 16 th largest North American Gas Marketer* » Firm storage (~40 Bcf in the US & Canada) » Firm transportation ( 1.4 Bcf/day ) » NJRES’ strong results drive
Slide 14: NJRCEV Overview
NJRCEV Overview 13 » P ortfolio reflects execution of diversification strategy » NJ Solar Renewable Energy Certificates (SREC) market has stabilized and is tracking towards balance » With production - based tax credits (PTC) expiration and investment tax credit (ITC) reduction: x State policy will c
Slide 15: NJRCEV: Continued Portfolio Diversification
NJRCEV: Continued Portfolio Diversification Commercial Solar » 21 projects in service » 82.4 MW » Projects include roof - and ground - mounted installations, both grid - connected and net - metered Residential Solar - The Sunlight Advantage ® » 3,600+ customers added since inception » 32+ MW Onshore
Slide 16: Regulatory Developments
Regulatory Developments » Wind and solar tax extensions x Senate and President support, House not as supportive x Wind is part of tax extender package that will likely be year - end negotiation x Solar not part of current extender package and industry less aligned on need » Despite numerous attempts
Slide 17: US Renewable Energy Projections
US Renewable Energy Projections 16 25 76 87 107 123 26 24 54 79 117 0 50 100 150 200 250 300 2008 2015 2020 2025 2030 Wind — onshore Solar PV 100 141 186 240 % of US Generation Growth % calculated using a Compound Annual Growth Rate Source: Renewable Energy Data Book, National Renewable Energy Labor
Slide 18: Renewables as a Share of US Generation
Renewables as a Share of US Generation 17 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Wind & solar Other renewables (including large hydro) Gas Coal Nuclear Renewables as a share of US generation (IHS plan
Slide 19: NJRCEV Capital Investment
NJRCEV Capital Investment 18 » Our Plan to mitigate the expected drop in ITC to 10 percent – January 1, 2017 x Continued solar investment drives production of SRECS x Onshore wind investments generate steady earnings from power purchase agreements (PPAs), financial hedges, and PTCs x Solar capital e
Slide 20: Solar Market With ITC Reduction
Solar Market With ITC Reduction » Current Sunlight Advantage® offering provides customer with 25 - 30 percent savings compared with utility rates x Competitive offerings in 2017 will likely offer 15 - 20 percent savings » Material prices are projected to continue in a downward direction » More effic
Slide 21: NJ SREC Pricing
NJ SREC Pricing 20 $70 $230 $ - $50 $100 $150 $200 $250 Market has improved and stabilized on improving fundamentals
Slide 22: Monthly Solar Capacity Additions
Monthly Solar Capacity Additions 21 Trailing three and six month average installation rates of 18.5 MW and 15.9 MW Source: NJ Clean Energy Program - 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 Jan - 11 Mar - 11 May - 11 Jul - 11 Sep - 11 Nov - 11 Jan - 12 Mar - 12 May - 12 Jul - 12 Sep - 12 Nov - 1
Slide 23: SREC Market – Potential Scenario
SREC Market – Potential Scenario 22 1,364 1,614 1,948 2,233 2,419 790 586 334 152 36 1,568 1,866 2,131 2,349 2,528 - 500 1,000 1,500 2,000 2,500 3,000 2014 2015 2016 2017 2018 SRECs (thousands) Ability to Generate Carryover from Prior Year RPS 2014A 2015E/A 2016F 2017F 2018F Lower annual carryover v
Slide 24: SREC Price Range Forecast
SREC Price Range Forecast 23 $100 $150 $200 $250 $300 $350 EY 2015 EY 2016 EY 2017 SACP Projected SREC - High Projected SREC - Low 7 0 to 80 50 to 60 Source: NJRCEV estimates Percentage of SACP Current SREC trading price
Slide 25: Our Path to Continued Growth
Our Path to Continued Growth 24 Fiscal 2015 NJNG x Customer growth x CIP x BGSS incentives x SAVEGREEN x SAFE x NJ RISE x SRL Energy Services x Physical natural gas services x Producer services Clean Energy x Portfolio diversification x More SRECs; improved prices x Expanded wind investments Midstre
Slide 26: NJR At A Glance
NJR At A Glance 25 Our Financial Goals: 1. Average annual NFE growth of 5 to 9 percent 2. Dividend growth of 6 to 8 percent 3. Maintain appropriate metrics to support our credit rating Ticker Symbol (NYSE): NJR Price Range (52 Weeks) $33.73 - $24.64 Enterprise Value: $3.3 billion Market Capitalizati
New Jersey Resources — Investor Presentation (September 2015) on 6ix