Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — FY2014 Earnings Presentation
22 slides from Newjersey Resources's earnings presentation, Nov 25, 2014
Slide 1: Fiscal 2014 Fourth Quarter and Year End Update
FISCAL 2014 FOURTH QUARTER AND YEAR END UPDATE November 25, 2014
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 2014 Highlights: Solid Performance
Fiscal 2014 Highlights: Solid Performance » Record Net Financial Earnings (NFE) growth driven primarily by NJR Energy Services (NJRES), New Jersey Natural Gas (NJNG) and NJR Clean Energy Ventures (CEV) » 7.1 percent dividend increase » Robust infrastructure investments driven by customer growth and
Slide 5: Net Financial Earnings ($MM)
Net Financial Earnings 4 ($MM) Company 2014 2013 New Jersey Natural Gas $74.2 $73.8 NJR Energy Services 79.7 19.3 NJR Clean Energy Ventures 12.7 10.1 NJR Midstream 7.5 7.2 NJR Home Services/Other 2.8 3.3 Total $176.9 $113.7 Per basic share $4.20 $2.73 12 Months Ended September 30, » Strong results f
Slide 6: Fiscal 2015 NFE Guidance: $2.90-$3.10 Per Share
Fiscal 2015 NFE Guidance: $2.90 - $3.10 Per Share 5 Fiscal 2015 60 - 70% 10 - 20% 5 - 15% 5 - 10% 2 - 5% NJR expects regulated businesses to contribute 65 to 80 percent of fiscal 2015 NFE New Jersey Natural Gas NJR Clean Energy Ventures NJR Energy Services NJR Midstream NJR Home Services
Slide 7: Dividend Growth and Payout Ratio
Dividend Growth and Payout Ratio 6 Dividend growth goal of 6 to 8 percent annually * Current annual rate ** Assumes 6 - 8 percent average annual dividend growth *** Based on the midpoint of NFE consensus 30% 35% 40% 45% 50% 55% 60% 65% 70% 2010 2011 2012 2013 2014 2015E*** Peer Avg. 55 % 56 % 57 % 5
Slide 8: Our Growth Strategy
Our Growth Strategy Long - term average annual NFE growth g oal r emains 5 to 9 percent » Increased regulated infrastructure investments support safe, reliable service and anchor our business portfolio x NJNG drives our long - term growth x PennEast Pipeline » Provide customers with cost - efficient
Slide 9: Growing Capital Investments ($MM)
Growing Capital Investments 8 ($MM) 2014A 2015E 2016E 2017E Total Immediate Return NJNG Customer Growth $30.1 $26.8 $26.9 $27.0 $110.8 Yes Maintenance/Other 61.8 66.9 54.4 56.2 239.3 AIP/SAFE 40.3 41.2 39.0 2.4 122.9 Yes Superstorm Sandy 9.8 5.0 - - 14.8 NGV Fueling Stations 4.8 4.2 - - 9.0 Yes NJ R
Slide 10: A Growing Service Area
A Growing Service Area 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* Monmouth 43% Ocean 44% Middlesex/ Burlington 1% Morris 12% Service Territory Customer Breakdown Our service territory is among the fastest growing in the state w ith Ocean Co
Slide 11: Potential Customer Growth
Potential Customer Growth 10 2014 - 2016 10,200 Beyond 2017 - 78,206 New Construction Non Heat 6,900 On Main 36,322 Near Main 28,974 Off Main 47,840 Conversions NJNG sees total potential of over 201,500 new customers Source for new construction data is A.D. Little Source for conversions data is Hart
Slide 12: Collaborative Regulatory Relationships
Collaborative Regulatory Relationships 11 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 » The NGV Advantage - 2012 » Safety Accelera
Slide 13: PennEast Pipeline
PennEast Pipeline 12 » 108 - mile, 36 - inch pipeline » Connecting Northeast Marcellus supply to Northeast markets » Contracted volume up to 1,000,000 dth/day » Total capex $1 billion » Current ownership: NJR , AGL, SJI, UGI at 20 percent and PSEG and SE at 10 percent » Open season concluded August
Slide 14: NJRES: Generated NFE Every Year Since 1995
NJRES: Generated NFE Every Year Since 1995 » Serves wholesale customers across North America » Average tenure of employees is 10+ years » Diverse portfolio of physical natural gas assets » Firm storage ( 40 Bcf in the US and Canada) » Firm transportation ( 1.5 Bcf/day) » Services include: x Transpor
Slide 15: Alexander Wind Farm
Alexander Wind Farm » Third onshore wind project » 48 MW wind farm project located in Rush County, Kansas » Approximately $85 million investment » PTC eligible » Power Purchase Agreements with Kansas City BPU and Yahoo !, Inc. for the entire output » Commercial operation expected in the fall of 2015
Slide 16: NJNG Results ($MM)
NJNG Results 15 ($MM) 2014 2013 2014 2013 Utility Gross Margin $42.6 $38.6 $297.3 $276.9 Operating Income ($5.0) ($3.0) $127.4 $121.4 Net Financial Earnings ($5.4) ($3.1) $74.2 $73.8 Total Customers 504,274 497,431 504,274 497,431 12 Months EndedThree Months Ended September 30 September 30 » Added 7
Slide 17: NJNG: Diversified Sources of Utility Growth
NJNG: Diversified Sources of Utility Growth 16 NJNG expects incremental utility gross margin to grow about 37 percent by 2017 $0 $5 $10 $15 $20 $25 $30 $35 $40 FY14A FY15E FY16E FY17E $28.1 $31.6 $35.3 $38.4 Millions Customer Growth Red Oak SAVEGREEN NGV BGSS Incentives Incremental Utility Gross Mar
Slide 18: NJRES Results ($MM)
NJRES Results 17 ($MM) 2014 2013 2014 2013 Financial Margin $1.3 $1.3 $172.4 $47.3 Net Financial Earnings ($10.4) (2.2) $79.7 $19.3 Gas Sold and Managed (Bcf) 140.2 172.7 609.3 630.7 Average Firm Transportation (Bcf/d) 1.5 2.1 1.7 1.8 Average Firm Storage (Bcf) 44.6 38.5 42.2 34.8 12 Months EndedThr
Slide 19: NJRCEV Results
NJRCEV Results 18 (Millions, except SREC and Megawatt data) 2014 2013 2014 2013 Operating Revenues $6.6 $4.8 $14.6 $12.0 ITC Impact $3.8 $2.0 $21.9 $17.7 Net Financial Earnings ($7.6) $1.0 $12.7 $10.1 SRECs Generated 31,668 20,078 81,668 57,231 SRECs Sold 29,007 28,015 63,049 74,238 SREC Inventory 2
Slide 20: Improving SREC Fundamentals
Improving SREC Fundamentals 19 Source: of Monthly Capacity Additions: NJ Clean Energy Program Source of SREC Prices: Karbone $60 $80 $100 $120 $140 $160 $180 $200 SREC Prices $70 $193 0 20 40 60 80 100 120 MW Monthly Capacity Additions 85 9.4 NJRCEV forecasts SREC production to grow to 194,000 by fi
Slide 21: NJR Home Services Results ($MM)
NJR Home Services Results 20 ($MM) 2014 2013 2014 2013 Operating Revenue $14.0 $14.5 $44.1 $45.7 Net Financial Earnings $2.3 $2.4 $2.5 $3.1 Service Contract Customers 118,306 121,253 118,306 121,253 12 Months EndedThree Months Ended September 30 September 30 » Majority of earnings derived from servi
Slide 22: Our Path to Continued Growth
Our Path to Continued Growth 21 Fiscal 2015 NJNG x Customer growth x CIP x BGSS incentives x Infrastructure programs x SAVEGREEN x NJ RISE x SRL Energy Services x Physical natural gas services x Producer services Clean Energy x Continued solar investment x More SRECs; higher prices x Carroll Area wi