Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Q4 2017 Earnings Presentation
19 slides from Newjersey Resources's earnings presentation, Nov 21, 2017
Slide 1: Fourth Quarter Fiscal 2017 Update
Fourth Quarter Fiscal 2017 Update November 21, 2017
Slide 2: Forward-Looking Statements
2 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 Litigation Reform Act of 1995. NJR cautions reade
Slide 3: Non-GAAP Financial Measures
3 Non-GAAP Financial Measures This presentation includes the non-GAAP measure, NFE. As an indicator of the Company’s operating performance, this measure should not be considered an alternative to, or more meaningful than, GAAP measures, such as cash flow, net income, operating income or earnings per
Slide 4: Fiscal 2017 Accomplishments
4 Fiscal 2017 Accomplishments Financial Performance • Fiscal 2017 NFE per share of $1.73* compared with $1.61 last year, an increase of 7.5 percent; met guidance of $1.65-$1.75 per share • Segment contributions met expectations • Strong customer and utility gross margin growth at NJNG • 16 percent i
Slide 5: Annual Dividend Growth Goal
5 Annual Dividend Growth Goal of 6 to 8 Percent • 6.9 percent increase to current $1.09 annual rate approved on September 12, 2017 • 24th dividend increase in past last 22 years • Dividend payout ratio goal of 60 to 65 percent $.77 $.81 $.86 $.92 $.96 $1.02 $1.09* 0% 10% 20% 30% 40% 50% 60% 70% $0.0
Slide 6: What is Ahead for Fiscal 2018?
6 What is Ahead for Fiscal 2018? • Fiscal 2018 NFE guidance set at $1.75-$1.85 per share • Long-term NFEPS growth rate of 5 to 9 percent • A new administration in New Jersey • Energy infrastructure projects move forward: SRL, PennEast, Adelphia Gateway SRL: Remaining road opening permits and appro
Slide 7: 55-75 percent of 2018 NFE Expected from Regulated Businesses
7 55-75 percent of 2018 NFE Expected to be Generated from Regulated Businesses Projected Diversified Sources of Fiscal 2018 NFE New Jersey Natural Gas 50-60% NJR Midstream 5-15% NJR Energy Services 5-10% NJR Home Services/ Other 1-3% NJR Clean Energy Ventures 20-30% Regulated businesses
Slide 8: Adelphia Gateway Project is a Strategic Fit for NJR
8 Adelphia Gateway Project is a Strategic Fit for NJR • Converts an existing oil pipeline to natural gas • Utilizes existing infrastructure, brownfield locations and rights-of-way — No anticipated impacts to wetlands or farmland — Minimal impact on the environment • Creates new gas supply to constra
Slide 9: Growth and Value Drivers at New Jersey Natural Gas
9 Growth and Value Drivers at New Jersey Natural Gas • Strategic Value —Attractive service territory —Constructive regulation —Regulatory incentives —Infrastructure investments • Disciplined Execution —Safe, reliable service —High customer satisfaction • Growth Opportunities —Growing customer base —
Slide 10: SREC Hedging Status
10 SREC Hedging Status Pct. Hedged: 97% 85% 29% Average Price: $222 $190 $174 Current Price (EY): $203 $201 $193 As of November 16, 2017. Source: InterContinental Exchange (ICE) 213 223 76 - 40 80 120 160 200 240 280 320 EY18 EY19 EY20 Th ou sa nd s of S RE Cs Energy Year - Operational & Under Const
Slide 11: Fiscal 2017 Fourth Quarter and Year-to-Date NFE Bridge
11 Fiscal 2017 Fourth Quarter and Year-to-Date NFE Bridge $4.1 -$12.5 -$2.1 -$2.2 $.1 -$13.5 $1.1 -$25.0 -$20.0 -$15.0 -$10.0 -$5.0 $0.0 $5.0 $10.0 September 30, 2016 NJNG NJR Midstream NJRCEV NJRES HS/Other September 30, 2017 M ill io ns Three Months Ended September 30, 2017 Higher O&M AFUDC from P
Slide 12: Our Solar Sale-Leaseback Transaction
12 Our Solar Sale-Leaseback Transaction • In late fiscal 2017, NJRCEV completed a seven-year, sale leaseback transaction of new solar assets at Pemberton (II) and Princeton totaling 13 MW for $32.9 million • Structure and Benefits – NJR retains all revenue benefits of the solar farm including SRECs
Slide 13: NJR Capital Plan
13 NJR Capital Plan ($MM) 2017A 2018E 2019E-2021E Average 2018-2021 Total New Customer $39.3 $38.5 $41.0 $161.5 Maintenance 41.9 108.1 93.8 389.6 Cost of Removal/Other 44.1 57.1 22.0 123.1 SAFE II 39.8 35.9 39.3 153.8 NJ RISE 8.7 28.2 8.0 52.2 SRL** 3.8 132.0 30.2 162.2 Total NJNG $177.6 $399.8 $234
Slide 14: NJR Sources and Uses of Capital
14 NJR Sources and Uses of Capital $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 $1,000.0 Sources Uses Sources Uses Sources Uses M ill io ns Cash Flows LT Debt Equity CFFO Capex Dividends Capital Plan Supports Infrastructure Investments, While Maintaining Strong Balance Sheet 2
Slide 15: Effects of Hypothetical Corporate Tax Rate Reduction
15 Effects of Hypothetical Corporate Tax Rate Reduction on NJR Income Statement EPS Impact NJNG net income* Flat Non-regulated net income Annual Increase Revaluation of net deferred tax liabilities, non-regulated One-Time Increase Balance Sheet Balance Sheet Impact Equity (Impact of one-time revalua
Slide 16: Our Path to Future Growth
16 Our Path to Future Growth Fiscal 2017 NJNG Base rate case completed Customer growth CIP BGSS incentives SAFE SAVEGREEN NJ RISE SRL Pinelands approval Clean Energy Continued solar and wind investment More SRECs Ringer Hill wind farm in service Midstream PennEast received EIS FERC Quor
Slide 17: Appendix
17 APPENDIX
Slide 18: Reconciliation to Non-GAAP Measures
18 Reconciliation to Non-GAAP Measures A reconciliation of NFE for the three and twelve months ended September 30, 2017 and 2016 to net income is provided below:
Slide 19: NJR Projected Cash Flows
19 NJR Projected Cash Flows $MM 2017A 2018E 2019E Cash Flow from Operations $248.1 $337.0 $307.4 Uses of Funds Capital expenditures - NJNG/other ($178.7) ($399.8) ($236.3) Capital expenditures - PennEast (27.1) (34.8) (153.7) Capital expenditures - NJRCEV (149.4) (137.2) (135.2) Capital expenditures