Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Q2 2024 Earnings Presentation
32 slides from Newjersey Resources's earnings presentation, May 7, 2024
Slide 1: Investor Presentation: Fiscal 2024 Second Quarter and Year-to-Date Financial Results
May 2024 Investor Presentation Fiscal 2024 Second Quarter and Year-to-Date Financial Results
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: Contents
Contents Fiscal 2024 Second Quarter and Year-to-Date Conference Call 4 Agenda 5 Fiscal 2024 Second Quarter and Year-to-Date Highlights 6 Re-affirms Fiscal 2024 NFEPS Guidance of $2.85 to $3.00 7 NFEPS Guidance by Segment 8 New Jersey Natural Gas 9 NJNG Rate Case Update 10 Clean Energy Ventures (CEV)
Slide 4: FY 2024 Second Quarter Conference Call Agenda
FY 2024 Second Quarter Conference Call Agenda 1 FY 2024 Q2 and YTD Highlights Steve Westhoven | President and CEO 2 Financial Highlights Roberto Bel | SVP and CFO 3 Q&A Session 4
Slide 5: Fiscal 2024 Second Quarter and Year-to-Date Highlights
Fiscal 2024 Second Quarter and Year-to-Date Highlights Executing on our Strategic Plan to Drive Continued, Organic Growth Energy NJNG CEV S&T Services Second Quarter NFEPS On January 31st, NJNG Increased capacity by NFEPS Derived filed a base rate case ~5MW in fiscal 2024 contribution in line signif
Slide 6: Re-Affirming Fiscal 2024 NFEPS Guidance of $2.85 to $3.00
Re-Affirming Fiscal 2024 NFEPS Guidance of $2.85 to $3.00 Guidance Raised by $0.15 in February 2024; Represents 18.4% Increase from Midpoint of FY 2023 Initial Guidance Range Net Financial Earnings per Share Guidance Range $2.85 - $3.00 % 7-9 1 Outperformance Above Long-Term Growth Rate and Initial
Slide 7: NFEPS Guidance by Segment
NFEPS Guidance by Segment Energy Services to Represent a Larger Portion of NFEPS Guidance in 2024; Long-term NJNG Remains the Largest Contributor to NFEPS Fiscal 2024 NFEPS Guidance Long-term Expected by Segment NFEPS Composition NJNG and CEV projected to make up the predominate CEV S&T Home Service
Slide 8: New Jersey Natural Gas (NJNG)
New Jersey Natural Gas (NJNG) Strong Trend of Favorable Customer Growth NJNG Customers (in thousands) 1,2,3 580 Fiscal 2024 Capital Expenditures 570 560 550 System Integrity 540 576 582 IIP 569 $64 530 564 $14 558 548 520 539 ~45% of 510 capital SAVEGREEN 500 expenditures $33 2018 2019 2020 2021 202
Slide 9: NJNG: Rate Case Filing
NJNG: Rate Case Filing Continued Progress Overall Cost of Capital and Rate of Return Requested an increase to base rates of $222.6 million ($ millions) Amount Percent Embedded Cost Weighted Cost (increase of $158.7 million in operating income) Long-Term Debt $1,573.2 44.6% 4.0% 1.8% Common Equity $1
Slide 10: Clean Energy Ventures (CEV): Pipeline of Investment Opportunities
Clean Energy Ventures (CEV): Pipeline of Investment Opportunities CEV owns and operates solar projects with approximately 474MW of capacity MWs 1600 ~49% of pipeline located in NJ ~51% located outside of NJ Total 1400 ~1.3 GW 222 Pipeline of 1200 ~874MW including projects under 1000 construction, co
Slide 11: Storage and Transportation (S&T): Organic Growth Initiatives
Storage and Transportation (S&T): Organic Growth Initiatives Leaf River (storage), Steckman Ridge (storage), and Adelphia Gateway (transportation) Maximizing capabilities at existing assets as pipeline and storage constraints continue to highlight the ▪ 0.9 mmdth/d interstate pipeline benefit of sto
Slide 12: Financial Review
Financial Review Roberto Bel SVP and Chief Financial Officer 12 12
Slide 13: Review of Fiscal 2024 Second Quarter and Year-to-Date Results
Review of Fiscal 2024 Second Quarter and Year-to-Date Results ($ in Millions) $16.5 $0.1 $138.6 $17.9 $6.4 $3.8 $222.6 $3.2 $112.3 $(3.1) $211.0 $(0.5) $(28.2) $(1.4) 2Q 2023 NJNG CEV S&T ES HS & 2Q 2024 YTD NJNG CEV S&T ES HS & YTD Other FY2023 Other FY2024 Fiscal 2Q23 – Consolidated NFE ($ in mill
Slide 14: Capital Plan
Capital Plan1,2 ($ in Millions) Capital plan supports long-term NFEPS growth targets of 7-9% $622 $596 $619 - $754 $578 - $742 $44 - $58 $8 - $16 $31 $140 - $204 $160 - $264 $142 $110 $145 $435 - $492 $410 - $462 $454 $335 FY2022A FY2023A FY2024E FY2025E NJNG CEV S&T 14 1. Includes SAVEGREEN Investm
Slide 15: Projected Cash Flows
Projected Cash Flows1 ($ in Millions) YTD FY2023A FY2024E FY2025E FY2024A Cash Flow from Operations $479 $339 $450 - $490 $450 - $490 Uses of Funds Capital Expenditures2 $539 $235 $490 - $580 $495 - $675 Dividends3 $151 $82 $161 - $165 $174 - $178 Total Uses of Funds $690 $317 $651 - $745 $669 - $85
Slide 16: Investment Grade Profile
Investment Grade Profile Strong Credit Ratings Supported by Stable Cash Flows NJR Adjusted FFO / Adjusted Debt1 Current Credit Ratings NJNG NJR (Secured (Unsecured Rating) Rating) 20.0% 19.0% NAIC NAIC-1.E NAIC-2.A Moody's A1 (Stable) 18.1% 17.4% 17% - 18% Fitch A+ (Stable) 15.0% Strong Cash Flows 1
Slide 17: Debt Repayment Schedule
Debt Repayment Schedule No significant maturity towers in any particular year NJR Unsecured Senior Notes FY Maturity Principal 3.48% 2025 $100,000 Term Debt1 Maturity Schedule 3.54% 2026 $100,000 4.38% 2027 $110,000 3.96% 2028 $100,000 as of March 31, 2024 / $ in Millions, unless otherwise noted 3.2
Slide 18: Growth Strategy and Key Highlights
Growth Strategy and Key Highlights Maximize the value of existing assets through organic growth opportunities to produce “Utility-like” Returns 7% - 9% Long-term expected NFEPS and Dividend Growth Highest in peer group1 Thoughtful capital allocation with a defined capital plan of between $1.2 - $1.5
Slide 19: Appendix: Financial Statements and Additional Information
Appendix: Financial Statements and Additional Information 20 Reconciliation of NFE and NFEPS to Net Income 21 Other Reconciliation of Non-GAAP Measures Reconciliation of Adjusted Funds from Operations to Cash 22 Flow from Operations Fiscal 2024 Second Quarter and Year-to-Date NFE and 23 NFEPS by Bus
Slide 20: Reconciliation of NFE and NFEPS to Net Income
Reconciliation of NFE and NFEPS to Net Income ($ in 000s) (Unaudited) Three Months Ended Six Months Ended March 31, March 31, ◦ NFE is a measure of earnings based on the elimination of timing differences to effectively 2024 2023 2024 2023 match the earnings effects of the economic NEW JERSEY RESOURC
Slide 21: Other Reconciliation of Non-GAAP Measures
Other Reconciliation of Non-GAAP Measures ($ in 000s) (Unaudited) Three Months Ended Six Months Ended March 31, March 31, 2024 2023 2024 2023 A reconciliation of gross margin, the closest GAAP financial measurement, to utility gross margin is as follows: NJNG Utility Gross Margin Operating revenues
Slide 22: Reconciliation of Adjusted Funds from Operations to Cash Flow from Operations
Reconciliation of Adjusted Funds from Operations to Cash Flow from Operations Adjusted Funds from Operations, YTD FY2024 Adjusted Debt, FY2024 • Adjusted funds from operations is cash flows (Millions) (Millions) from operating activities, plus components of working capital, cash paid for interest (n
Slide 23: Fiscal 2024 Q2 and Year-to-Date NFE and NFEPS by Business Unit
Fiscal 2024 Q2 and Year-to-Date NFE and NFEPS by Business Unit1 ($ in 000s) Net Financial Earnings (NFE) (Thousands) Three Months Ended March 31, Six Months Ended March 31, 2024 2023 Change 2024 2023 Change New Jersey Natural Gas $107,095 $100,697 $6,398 $158,539 $155,361 $3,178 Clean Energy Venture
Slide 24: CEV: SREC Hedging Strategy Stabilizes Revenue
CEV: SREC Hedging Strategy Stabilizes Revenue Based on Energy Year1, as of March 31, 2024 Hedged Unhedged Percent Hedged Average Price Current Price (EY) EY 2025 353 46 89% $190 $202 89% hedged through Energy Year 2025 Thousands EY 2026 349 48 88% $179 $195 88% hedged EY 2027 199 191 51% $165 $184 t
Slide 25: Capital Plan Table
Capital Plan Table1,2 ($ in Millions) Actuals Estimates Near Real Time FY2023A YTD FY2024A FY2024E FY2025E Return? New Jersey Natural Gas New Customer $77 $48 $75 - $80 $85 - $90 Yes IIP $43 $14 $26 - $30 $26 - $30 Yes SAVEGREEN $60 $33 $48 - $52 $48 - $52 Yes IT $61 $30 $60 - $65 $20 - $25 System I
Slide 26: NJR: Business Portfolio
NJR: Business Portfolio Natural Gas and Renewable Fuel Distribution; Solar Investments, Wholesale Energy Markets; Storage & Transportation Infrastructure; Retail Operations New Jersey Natural Gas Operates and maintains Natural Gas transportation and distribution (NJNG) infrastructure serving approxi
Slide 27: NJNG: Supportive Regulatory Construct
NJNG: Supportive Regulatory Construct Stable Rate Case Results Decoupled Rates for majority of customers • Rate case results are stable • Volume risk due to weather or energy conservation Launched in 2009, SAVEGREEN™ • Current ROE of 9.60% with a common equity ratio of 54% mitigated through the Cons
Slide 28: CEV Overview
CEV Overview Largest Solar Owner-Operator in New Jersey CEV owns and operates solar projects in New Jersey, Rhode Island, New York, Connecticut, Indiana, and Michigan with approximately 474MW of installed capacity • Over $1.2 billion invested in the solar marketplace to date • A total of ~70 commerc
Slide 29: Energy Services (ES): Overview
Energy Services (ES): Overview Managing a Diversified Portfolio of Physical Natural Gas Transportation and Storage Assets to Serve Customers Across North America; Fee-based Revenue through Asset Management Agreements Asset Management Agreements • De-risked Energy Services business by securing 10 yea
Slide 30: Dividend Growth: Committed to Building Shareholder Value
Dividend Growth: Committed to Building Shareholder Value Strong Track Record of Dividend Growth Dividends per Share Dividend History Highlighted Rows Reflect Changes in Quarterly Cash Dividends $1.68 Ex-Dividend Date 3/12/2024 Record Date 3/13/2024 Payable Date 4/01/2024 Amount Per Share $0.42 7.4%
Slide 31: Environmental, Social and Governance Efforts
Environmental, Social and Governance Efforts Focus on Definable Accomplishments • Achieved NJ operational emissions reductions over 55% since 2006 with goal of 60% by 2030 and net zero by 2050 • One of the largest owner-operators of solar assets in New Jersey, we have invested over $1 billion over t
Slide 32: Shareholder and Online Information
Shareholder and Online Information Stock Transfer Agent and Registrar The Transfer Agent and Registrar for the company’s common stock is Broadridge Corporate Issuer Solutions, Inc. (Broadridge). Shareowners with questions about account activity should contact Broadridge investor relations representa