Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — FY2015 Earnings Presentation
26 slides from Newjersey Resources's earnings presentation, Nov 24, 2015
Slide 1: Fiscal 2015 Fourth Quarter and Year-End Update
FISCAL 2015 FOURTH QUARTER AND YEAR - END UPDATE November 24, 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: Highlights of Another Solid Year
Fiscal 2015: Highlights of Another Solid Year » Net Financial Earnings ( NFE ) of $1.78 per share which exceeded our expectations » Total shareowner return of 22.8 percent* exceeded peer group** average of 21.2 percent* » 6.7 percent dividend increase, our 22 nd increase the last 20 years » $179.2 m
Slide 5: Fiscal 2015: Highlights of Another Solid Year
Fiscal 2015: Highlights of Another Solid Year » New customer additions were 3.4 percent higher than last year » Constructive regulatory relationships yielded The SAVEGREEN Project® (SAVEGREEN) and Basic Gas Supply Service (BGSS) incentive program extensions » Completed exchange of Iroquois ownership
Slide 6: Base Rate Case Filed November 13, 2015
Base Rate Case Filed November 13, 2015 5 » Timing of filing was established with the approval of SAFE in 2012 » Requested an increase of $ 147.6 million » Includes equity capital of approximately $860 million » Proposed rate base of nearly $1.6 billion » Overall Cost of Capital and Weighted Return:
Slide 7: Net Financial Earnings ($MM)
Net Financial Earnings 6 ($MM) Company 2015 2014 New Jersey Natural Gas $76.3 $74.2 NJR Energy Services 42.1 79.7 NJR Clean Energy Ventures 20.1 12.7 NJR Midstream 9.8 7.5 NJR Home Services/Other 3.2 2.8 Total $151.5 $176.9 Per basic share $1.78 $2.10 12 Months Ended September 30,
Slide 8: Fiscal 2016 NFE Guidance: $1.55 to $1.65 Per Share
Fiscal 2016 NFE Guidance: $1.55 to $1.65 Per Share 7 Fiscal 2016 60 - 70% 10 - 20% 5 - 15% 5 - 10% 1 - 3% NJR expects regulated businesses to contribute 65 to 80 percent of fiscal 2016 NFE New Jersey Natural Gas NJR Clean Energy Ventures NJR Energy Services NJR Midstream NJR Home Services
Slide 9: Delivering Average Annual NFE Growth with Reduced ITC
Delivering Average Annual NFE Growth of 5 to 9 Percent with Reduced ITC* 8 $1.36 $2.10 $1.78 $1.55 - $1.65 $1.70 - $1.97 $0.75 $1.00 $1.25 $1.50 $1.75 $2.00 $2.25 FY13A FY14A FY15A FY16E FY17E FY18E NFE ITC Total NFE Per Share * Base year is fiscal 2013
Slide 10: Dividend Growth and Payout Ratio
Dividend Growth and Payout Ratio 9 $.72 $.77 $.81 $.86 $.92 [VALUE] * 0% 10% 20% 30% 40% 50% 60% 70% $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 2011 2012 2013 2014 2015 2016E Payout Ratio Dividends Dividends and Payout Ind. Div Rate Payout ▪ Dividend growth goal of 6 to 8 percent annually ▪ 22 divide
Slide 11: Percent of Estimated Capital Expenditures at Regulated Business Segments
We Expect 60 - 70 Percent of Estimated Capital Expenditures to be at Regulated Business Segments 10 $336 $550 $540 $338 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 FY15A FY16E FY17E FY18E Millions NJNG PennEast Solar Wind
Slide 12: New Jersey Natural Gas Results
New Jersey Natural Gas Results 11 ($MM) 2015 2014 2015 2014 Utility Gross Margin $42.9 $42.6 $307.5 $297.3 Operating Income ($6.0) ($5.0) $130.0 $127.4 Net Financial Earnings ($7.7) ($5.4) $76.3 $74.2 Total Customers 512,252 504,274 512,252 504,274 12 Months EndedThree Months Ended September 30, Sep
Slide 13: Customer Growth Continues to Rise
Customer Growth Continues to Rise 12 » 7,858 new customers added in fiscal 2015 compared with 7,599 in fiscal 2014 – a 3.4 percent increase x 3,966 new construction customers x 3,892 conversions from other fuels » 636 existing customer heat conversions 7,599 7,858 8,150 8,550 8,750 0 1,000 2,000 3,0
Slide 14: Collaborative Regulatory Relationships
Collaborative Regulatory Relationships 13 Regulatory and Incentive Programs » Basic Gas Supply Service Incentives (BGSS) - 1992 » Conservation Incentive Program (CIP) - 2006 » Accelerated Infrastructure Program (AIP) - 2008 » SAVEGREEN - 2009 » The NGV Advantage - 2012 » SAFE - 2012 » New Jersey Rei
Slide 15: Diverse Sources of Utility Gross Margin
Diverse Sources of Utility Gross Margin 14 $24.7 $33.6 $33.2 $34.0 $37.5 $0 $5 $10 $15 $20 $25 $30 $35 $40 FY14A FY15A FY16E FY17E FY18E Customer Growth SAVEGREEN BGSS Incentives
Slide 16: Midstream Results
Midstream Results 15 » Higher revenue associated with firm services at Steckman Ridge and Iroquois Pipeline » Dominion Midstream Partners, LP (DM) Transaction x Exchanged 5.53 percent interest in Iroquois for 1.8 million common units of DM • Value $48.3 million (as of September 30, 2015) • Current a
Slide 17: NJRES Results
NJRES Results 16 ($MM) 2015 2014 2015 2014 Financial Margin $1.4 $1.3 $91.0 $172.4 Net Financial Earnings ($5.4) ($10.4) $42.1 $79.7 Gas Sold and Managed (Bcf) 135.4 140.2 626.9 609.3 Average Firm Transportation (Bcf/d) 1.6 1.5 1.5 1.7 Average Firm Storage (Bcf) 38.1 44.6 40.3 42.2 12 Months EndedTh
Slide 18: NJRCEV Results
NJRCEV Results 17 (Millions, except SREC and Megawatt data) 2015 2014 2015 2014 Operating Revenues $14.3 $6.6 $32.5 $14.6 ITC Impact $6.2 $6.0 $22.2 $18.0 Net Financial Earnings $1.9 ($7.6) $20.1 $12.7 SRECs Generated 46,223 31,668 126,133 81,668 SRECs Sold 57,317 29,007 122,900 63,049 SREC Inventor
Slide 19: NJRCEV: Continued Portfolio Diversification
NJRCEV: Continued Portfolio Diversification Commercial Solar » Projects include roof - and ground - mounted installations, both grid - connected and net - metered » 22 projects in service » 82.4 MW Residential Solar - The Sunlight Advantage » 4,000 th customer added October 2015 » 35.3 MW Onshore Wi
Slide 20: Improved SREC Fundamentals
Improved SREC Fundamentals 19 Source: of Monthly Capacity Additions: NJ Clean Energy Program Source of SREC Prices: Karbone NJRCEV forecasts SREC production to grow to 216,000 by fiscal 2018 Installs (MW) SREC Prices $70 $50 $100 $150 $200 $250 $300 $275 10.4 - 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.
Slide 21: SRECs Generated and Hedged
SRECs Generated and Hedged 153 103 79 172 195 216 0 50 100 150 200 250 FY16 FY17E FY18E Thousands of SRECs Hedged Expected Generated Current Generation 20 NJRCEV is actively hedging SRECs to reduce future price uncertainty Pct. Hedged: 89% 53% 37% Average Price: $208 $218 $229 As of November 12, 201
Slide 22: NJRHS Results
NJRHS Results 21 ($MM) 2015 2014 2015 2014 Operating Revenue $15.8 $14.1 $46.0 $44.1 Net Financial Earnings $2.7 $2.3 $2.4 $2.5 Service Contract Customers 116,552 118,306 116,552 118,306 12 Months EndedThree Months Ended September 30 September 30 » Majority of earnings derived from service contracts
Slide 23: Strong Internal Cash Generation To Support Capital Programs
Strong Internal Cash Generation To Support Capital Programs 22 $MM FY15A FY16E FY17E FY18E Cash Flow from Operations $386.8 $127.9 $319.9 $340.2 Uses of Funds Capital expenditures - NJNG ($167.8) ($291.1) ($230.5) ($184.0) Capital expenditures - Penn East (5.8) (41.7) (160.2) (32.4) Capital expendit
Slide 24: Our Path to Continued Growth
Our Path to Continued Growth 23 Fiscal 2015 NJNG x Customer growth x CIP x BGSS incentives x SAVEGREEN x SAFE x NJ RISE x SRL Midstream x PennEast FERC filing Energy Services x Physical natural gas services x Producer services Clean Energy x Portfolio diversification x More SRECs; improved prices x
Slide 25: Appendix
24 Appendix
Slide 26: Capital Expenditures ($MM)
Capital Expenditures 25 ($MM) 2015A 2016P 2017P 2018P Total NJNG New Customer $33.1 $35.2 $32.6 $31.5 $132.4 Maintenance/other 79.0 81.1 81.8 87.7 329.6 SAFE/SAFE Extension 32.8 31.7 33.3 31.3 129.1 Sandy 2.4 - - - 2.4 NJ RISE 7.4 17.9 27.5 33.5 86.3 NGV Stations 4.9 - - - 4.9 Liquefaction 16.7 5.8