Slide 1: Second-Quarter 2021 Results
CONFIDENTIAL DRAFT Second-Quarter 2021 Results s May 6, 2021
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Li
Slide 3: Agenda
Agenda 1 Second-Quarter FY 2021 Highlights Steve Westhoven | President & CEO 2 Financial Highlights Pat Migliaccio | SVP and CFO 3 Q&A Session 2
Slide 4: Second-Quarter 2021 Summary
Quarterly Review Second-Quarter 2021 Summary NJR reported EPS of $1.56 and NFEPS of $1.77* for NJNG received approval for SAVEGREEN 2020, Fiscal 2Q21 it’s new, $259 million energy efficiency program – investments are expected to begin in 2021 Increased FY 2021 NFEPS guidance to $2.05 to $2.15 from g
Slide 5: Updated Fiscal 2021 NFEPS Guidance
Updated Fiscal 2021 NFEPS Guidance Increased FY 2021 NFEPS Guidance to $2.05 - $2.15 Net Financial Earnings per Share $2.05 - $2.15 May 6 guidance $0.20 increase $0.50 of ES over- March 15 guidance $0.30 performance increase $1.76* $1.55 - $1.65 FY 2020A FY 2021E * Reported NFEPS for fiscal 2020 was
Slide 6: Rate Case Filing
Rate Case Filing Requested an increase to base rates of $165.7 million • Equivalent to an increase of $117.9 million in operating income Proposed rate base of $2.3 billion1 Nearly $850 million of invested capital since 2019 • Includes $308 million related to SRL Overall Cost of Capital and Rate of R
Slide 7: New Jersey Natural Gas
New Jersey Natural Gas Fiscal YTD Capital Expenditures* New Customer Additions ~26% of capital expenditures earning a near real-time return 4,339 3,694 New Customer $9 $47 $17 SAFE/NJ RISE SAVEGREEN $24 ~$198M $36 Maintenance $1 Cost of Removal/Other SRL $63 IIP Fiscal YTD 2020 Fiscal YTD 2021 • Con
Slide 8: Clean Energy Ventures
Clean Energy Ventures NJR’s Solar Capacity Installed Capacity (MW) 600 • Incremental capacity from placing one commercial project 2.7 MW into service in fiscal 2Q21 500 400 • Value of projects placed in-service, under contract or under 300 $255 MM exclusivity for fiscal years 2021 and 2022 200 395 -
Slide 9: Putting Sustainability into Action – Q2 Highlights
Putting Sustainability into Action – Q2 Highlights ▪ Released NJR’s 2020 Corporate Sustainability Report on January 20, 2021 ▪ Furthering commitment to ESG transparency, 2020 report includes Sustainability Accounting Standards Board (SASB) and American Gas Association (AGA) frameworks ▪ Launched NJR
Slide 10: Financial Review
Financial Review Pat Migliaccio SVP & Chief Financial Officer 9
Slide 11: Review of Fiscal 2Q21 NFE Changes
Review of Fiscal 2Q21 NFE Changes Fiscal 2Q20 – Consolidated NFE (millions) $84.31 Millions $94.0 NJNG ($5.8) $170.6 Utility Gross Margin* $5.7 $2.3 O&M and Other ($11.5) Clean Energy Ventures $0.0 Revenue $0.4 O&M and Other ($0.4) Storage & Transportation $0.4 Operating Income from Leaf River and A
Slide 12: NJRES – Takeaways from February Weather Event
NJRES – Takeaways from February Weather Event • Significant upside from opportunistic storage sales MID CON STORAGE • In February, the affected regions ASSETS experienced unprecedented “peak • Michcon • Union Gas day pricing” for natural gas • Wash10 Mid-Continent Market • NJRES capitalized by makin
Slide 13: NJR Capital Plan
NJR Capital Plan* (Millions) FYTD 2021A FY2021E FY2022E Near Real Time Return? New Customer $24 $52 - $54 $56 - $59 Yes New Jersey Natural Gas Maintenance & Integrity $47 $92 - $95 $142 - $150 SAFE II/ NJ RISE $17 $28 - $32 - Yes IIP $1 $6 - $7 $10 - $11 Yes SRL $63 $100 - $110 - IT $1 $15 - $18 $58
Slide 14: CEV Commercial Project Pipeline
CEV Commercial Project Pipeline $9 $27 ▪ Represents over 80% of targeted CAPEX for fiscal In-Service 2021 and 2022 $103 FY21 & 22 Under Construction ▪ ~1/3 of pipeline capacity is Pipeline: Under Contract1 expected to be out-of-state $255 Under Exclusivity2 ▪ For NJ projects, average factor is ~0.9
Slide 15: NJR Projected Cash Flows
NJR Projected Cash Flows (Millions) FY2020A FY2021E FY2022E FY2023E & FY2024E Cash Flow from Operations $213 $320 - $340 $385 - $410 $915 - $965 Uses of Funds Capital Expenditures* $470 $625 - $698 $616 - $671 $1,055 - $1,166 Acquisition - S&T Assets $534 Dividends $118 $127 - $132 $135 - $140 $308
Slide 16: NJR CEV – SREC Hedging Strategy Stabilizes Revenue
NJR CEV – SREC Hedging Strategy Stabilizes Revenue As of April 21, 2021 Percent Hedged Average Price Current Price (EY) EY 2022 389 14 97% $200 $233 Percent Hedged Average Price Current Price (EY) EY 2023 389 12 97% $202 $218 Percent Hedged Average Price Current Price (EY) EY 2024 369 30 93% $196 $2
Slide 17: Second Quarter Key Takeaways
Increased NFEPS guidance for FY 2021 to $2.05 - $2.15 due to the outperformance of Energy Services Strong performance of NJRES provides flexibility to reinvest in overall business and support shareholder distributions Key Takeaways Second Quarter Filed rate case to recover capital investments not cu
Slide 18: Be Sg s3 Ea4
Be 28 Sg 23 33 s3 Ea4
Slide 19: Appendix
Be 28 Sg 23 33 s3 Ea4
Slide 20: Second Quarter NFE by Business Unit
Second Quarter NFE by Business Unit (Thousands) Three Months Ended March 31 Six Months Ended March 31 2021 2020 Change 2021 2020 Change New Jersey Natural Gas $80,541 $86,336 ($5,795) $130,008 $130,192 (184) Clean Energy Ventures (8,872) (8,829) (43) (19,146) (17,008) (2,138) Storage and Transportat
Slide 21: Reconciliation of NFE and NFEPS to Net Income for Fiscal 2Q21
Reconciliation of NFE and NFEPS to Net Income for Fiscal 2Q21 Net Financial Earnings, Fiscal 2Q21 • NFE is a measure of earnings (Millions) based on eliminating timing Net Income $149.8 differences surrounding the Add Back recognition of certain gains and Unrealized gain on derivative instruments an
Slide 22: Projected ITC Earnings Impact
Projected ITC Earnings Impact For solar projects placed in-service before September 30, 2020 The earnings impact of the investment tax credits (ITCs) generated by projects placed-in-service is reflected as follows*: • For projects that were financed using sale leasebacks: For 5 years, on the date th
Slide 23: NJR CEV – SREC Hedging by Fiscal Year
NJR CEV – SREC Hedging by Fiscal Year As of April 21, 2021 Percent Hedged Average Price Current Price (FY) FY 2022 396 6 99% $202 $228 Percent Hedged Average Price Current Price (FY) FY 2023 386 13 97% $201 $213 Percent Hedged Average Price Current Price (FY) FY 2024 314 84 79% $193 $197 Percent Hed
Slide 24: An Industry Leader
An Industry Leader Named an Environmental Champion • Sixth time NJNG has been recognized for our dedication to the environment since 2014 Named Easiest to do Business With • Third consecutive year customers have recognized our commitment to delivering exceptional service According to the Cogent Synd