Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Q4 2021 Earnings Presentation
27 slides from Newjersey Resources's earnings presentation, Nov 18, 2021
Slide 1: Fourth-Quarter 2021 Results
CONFIDENTIAL DRAFT Fourth-Quarter 2021 Results s November 18, 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 Fourth-Quarter FY 2021 Highlights Steve Westhoven | President & CEO 2 Financial Highlights Pat Migliaccio | SVP and CFO 3 Q&A Session 2
Slide 4: Strong Track Record of Earnings and Dividend Growth
Strong Track Record of Earnings and Dividend Growth Net Financial Earnings per Share1,2 Dividends per Share $2.71 8.3% 7.3% DPS CAGR NFEPS CAGR $2.16 $1.45 $1.33 $1.25 $1.74 $1.17 $1.57 $1.09 $1.45 $1.02 FY2017 FY2018 FY2019 FY2020 FY2021 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 1. All periods revi
Slide 5: Fiscal 2021 Highlights: Core Businesses
Fiscal 2021 Highlights: Core Businesses Highlights Key Business Initiatives Base rate case concluded - includes costs associated with the Southern Reliability Link and Hydrogen power to gas project at Howell LNG Facility Completed construction of the Southern Reliability Link 30-mile transmission NJ
Slide 6: Fiscal 2021 Highlights: Complementary Businesses
Fiscal 2021 Highlights: Complementary Businesses Key Business Highlights Initiatives Adelphia Gateway received all necessary construction permits and commenced construction of its South Zone, including laterals and interconnects; S&T expect to place several facilities into service by the end of cale
Slide 7: Fiscal 2022 Guidance Reaffirmed
Fiscal 2022 Guidance Reaffirmed Fiscal 2022 NFEPS Guidance by Segment 7-9% 0%-1% NFEPS Guidance LONG-TERM ANNUAL GROWTH 5%10% Executing $2.20 - $2.30 9%-11% 20%-23% our plan has $2.16 resulted in a $1.74 narrower long-term expected 60% - 65% growth rate NJNG CEV S&T Home Services & Other ES* FY 2020
Slide 8: Net-Zero NJ Operations
Our Decarbonization Leadership 2020 2030 RNG 2050 Hydrogen Blending Carbon Capture Carbon offsets Target of 60% reduction in Energy Efficiency Achieved 50% reduction in NJ NJ operational emissions EVs operational emissions since 2006 since 2006 by 2030 Setting an ambitious new goal Net-Zero NJ NJNG
Slide 9: The Value of our Natural Gas Infrastructure
The Value of our Natural Gas Infrastructure An asset in the clean energy transition New Jersey’s Pipeline Network Today, our pipeline network can integrate and deploy low and zero carbon fuels, such as Renewable Natural Gas and $17 Billion 35,000 Miles of >75% of 70x Fewer Compatible with hydrogen,
Slide 10: Howell Green Hydrogen Project
Howell Green Hydrogen Project First project on Project Status the east coast • Commercial operation achieved October 2021 to deliver green • Entire project located within NJNG’s Howell hydrogen through a facility utility distribution • System expected to offset ~180 US tons of pipeline to heat CO2 p
Slide 11: Financial Review
Financial Review Pat Migliaccio SVP & Chief Financial Officer 10
Slide 12: Review of FY2021 NFE Changes
Review of FY2021 NFE Changes FY2020 – Consolidated NFE (millions) $165.3 Millions NJNG ($19.5) Utility Gross Margin1 $24.7 O&M and Other ($44.0) $79.0 Depreciation and Amortization ($8.2) $207.7 Income Taxes $8.0 $6.6 Clean Energy Ventures ($5.3) SREC and Other Revenue ($7.3) $165.3 O&M and Other ($
Slide 13: New Base Rates
New Base Rates Overall Cost of Capital and Weighted Return Approved Weighted Percent Return Cost • Rate base of $2.5 billion Long-Term Debt 46.0% 3.60% 1.66% o Southern Reliability Link and Howell green hydrogen Common Equity 54.0% 9.60% 5.18% facility included in rate base Total 100.0% 6.84% • WACC
Slide 14: Natural Gas Prices
Natural Gas Prices Hedged Portion of NJNG’s NJNG Average Natural Gas Bill Winter Sales1 Evolution2 10% $392 23% reduction $1,717 in real terms $1,325 90% Hedged Unhedged October 2008 December 2021 Average Natural Gas Bill Savings Relative to Inflation 1. Sales from December 2021 to March 2022 2. Bas
Slide 15: CEV Commercial Project Pipeline for FY 21-22
CEV Commercial Project Pipeline for FY 21-22 Fiscal 2021-2022 In-service Capex Target by Project Status ($ millions) $150 • Fiscal 2021-2022 solar in-service target remains $315 million • Over 80% of Fiscal 2021-2022 capex target is in-service, under construction or $315 under contract $12 Million •
Slide 16: NJR CEV – SREC Hedging Strategy Stabilizes Revenue
NJR CEV – SREC Hedging Strategy Stabilizes Revenue As of November 10, 2021 Percent Hedged Average Price Current Price (EY) EY 2022 398 100% $201 $237 Percent Hedged Average Price Current Price (EY) EY 2023 398 5 99% $203 $226 Percent Hedged Average Price Current Price (EY) EY 2024 379 22 95% $197 $2
Slide 17: NJR Capital Plan
NJR Capital Plan1 (Millions) FY2021A FY2022E FY2023E Near Real Time Return? New Customer $65 $52 - $56 $55 - $59 Yes New Jersey Natural Gas Maintenance & Integrity $100 $142 - $148 $100 - $104 SAFE II/ NJ RISE $42 - - Yes IIP $9 $24 - $28 $32 - $36 Yes SRL $110 - - IT $9 $50 - $54 $54 - $58 RNG & P2
Slide 18: NJR Projected Cash Flows
NJR Projected Cash Flows (Millions) FY2021A FY2022E FY2023E Cash Flow from Operations $391 $365 - $385 $450 - $470 Uses of Funds Capital Expenditures1 $625 $641 - $761 $513 - $616 Dividends $117 $127 - $132 $135 - $140 Total Uses of Funds $742 $768 - $893 $648 - $756 Financing Activities Common Stoc
Slide 19: What's Ahead for Fiscal 2022?
What’s Ahead for Fiscal 2022? Continuing to execute on our Strategic Plan to Drive Continued, Organic Growth Across Portfolio NJNG • New base rates CEV 7% - 9% Storage & Transportation Long-term • Customer Growth • Minimal risk to NFE Growth Energy Services • Assessment of expected NFEPS additional
Slide 20: Investor Value Proposition
Investor Value Proposition ~4% 7%-9% Dividend Long-term Yield(1) ~11 -13 % % NFE Growth Total Shareholder Return 1. Based on dividend per share of $1.45 and share price of $37.87 as of 11/16//2021 19
Slide 21: Q&A
Q&A 20
Slide 22: Appendix
Appendix 21
Slide 23: Fourth Quarter and Fiscal 2021 NFE by Business Unit
Fourth Quarter and Fiscal 2021 NFE by Business Unit (Thousands) Three Months Ended September 30 Twelve Months Ended September 30 2021 2020 Change 2021 2020 Change New Jersey Natural Gas ($24,214) ($15,258) ($8,956) $107,375 $126,902 ($19,527) Clean Energy Ventures 40,861 44,805 (3,944) 16,789 22,111
Slide 24: Reconciliation of NFE and NFEPS to Net Income for Fiscal 2021
Reconciliation of NFE and NFEPS to Net Income for Fiscal 2021 Net Financial Earnings, Fiscal 2021 • NFE is a measure of earnings based on eliminating timing differences surrounding the recognition of certain gains and losses and the impairment of NJR’s investment in the PennEast project, net of appl
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures NJNG Utility Gross Margin • NJNG utility gross margin is defined as natural gas revenues less natural gas purchases, sales tax and regulatory rider expenses, and may not be comparable to the definition of gross margin used by others in the natural gas distribution
Slide 26: Reaffirming FY 2022 NFE Guidance of $2.20 to $2.30 Per Share
Reaffirming FY 2022 NFE Guidance of $2.20 to $2.30 Per Share NFE Segment FY2022E NJNG Utility FY2022E CEV FY2022E ES Financial Contributions Gross Margin Revenue Margin Q4E Q3E Q4E FY2022E Q3E (~35%) ~19% ~15% (~29%) Q1E NJNG 60%-65% ~7% Q2E Q4E Q2E ~30% CEV 20%-23% Q1E ~77% ~9% ~26% S&T 5%-10% Q3E
Slide 27: NJR CEV – SREC Hedging by Fiscal Year
NJR CEV – SREC Hedging by Fiscal Year As of November 10, 2021 Percent Hedged Average Price Current Price (FY) FY 2022 464 100% $203 $234 Percent Hedged Average Price Current Price (FY) FY 2023 395 7 98% $201 $220 Percent Hedged Average Price Current Price (FY) FY 2024 324 76 81% $193 $202 Percent He