Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Q3 2021 Earnings Presentation
27 slides from Newjersey Resources's earnings presentation, Aug 5, 2021
Slide 1: Third-Quarter 2021 Results
CONFIDENTIAL DRAFT Third-Quarter 2021 Results s August 5, 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 Third-Quarter FY 2021 Highlights Steve Westhoven | President & CEO 2 Financial Highlights Pat Migliaccio | SVP and CFO 3 Q&A Session 2
Slide 4: Third-Quarter 2021 Highlights
Quarterly Review Third-Quarter 2021 Highlights NJR reported EPS loss of $1.16 and net financial loss Over 70% of CEV’s FY21 and FY 22 capex target of $0.15* for Fiscal 3Q21 is operational, under construction or contracted Leaf River continues to re-contract capacity, Increasing FY 2021 NFEPS guidanc
Slide 5: Fiscal 2021 Scorecard
Fiscal 2021 Scorecard Solid Progress Against the Goals Established During November 2020 Analyst Day Progress ▪ Place SRL in-service Grow Core Businesses ▪ File rate case to recover capital invested since 2019 rate case (NJNG and CEV) ▪ Invest ~$850M in solar in FY21-24 ▪ Expand solar footprint outsi
Slide 6: Rate Case Filing
Rate Case Filing Requested an increase to base rates of $163.9 million Proposed rate base of $2.54 billion Southern Reliability Link now included in rate case filing Procedural Schedule March June End of July September October - December ALJ1 & Staff, Company, Expected Filing of 12+0 Intervenors Det
Slide 7: New Jersey Natural Gas
New Jersey Natural Gas Fiscal YTD Capital Expenditures* New Customer Additions ~25% of capital expenditures earning a near real-time return 5,878 New Customer 5,448 $78 SAFE/NJ RISE $15 $30 SAVEGREEN Maintenance $40 ~$365M $101 Cost of Removal/Other $3 SRL $3 $95 IIP IT Fiscal YTD 2020 Fiscal YTD 20
Slide 8: Hydrogen Power-to-Gas Project
Hydrogen Power-to-Gas Project Prepares NJNG for green energy future enabling the blending of Hydrogen into NJNG’s Distribution System Once completed, NJNG will be the first utility on the east coast directly injecting green hydrogen into an existing natural gas distribution system Electrolyzer will
Slide 9: NJNG Decarbonization Investment Opportunities
NJNG Decarbonization Investment Opportunities • NJR is executing on a • Green Hydrogen Production sustainability strategy focused on decarbonization of core utility infrastructure • Landfill RNG Processing NJNG is also exploring • High quality existing RNG purchases from third infrastructure like ou
Slide 10: Clean Energy Ventures
Clean Energy Ventures NJR’s Solar Capacity Total Installed Capacity (MW) • Incremental capacity added through the first nine months 8.4 MW* of fiscal 2021 $16.9 MM* • Fiscal 2021 capex placed in-service FYTD 500 - 520 365 - 375 * Includes commercial and residential solar projects FY 2021E FY 2022E F
Slide 11: CEV Commercial Project Pipeline for FY 21-22
CEV Commercial Project Pipeline for FY 21-22 Capex by Project Status ($ millions) Capacity by Project Status (MWs) • Fiscal 2021 and 2022 solar in- service target remains $315 Completed million $205.3 Under Const. 19.6 84.2 $37.3 $315 • Remain committed to achieving Under Contract 140 MW $9.4 Millio
Slide 12: New Jersey Solar Successor Program
New Jersey Solar Successor Program Net Metered & Community Utility Scale Solar Projects • Administrative incentives will be • Developers bid for long-term determined by the BPU for net incentive contracts metered projects and community solar • Target installs for this market segment are 300 MW per y
Slide 13: Adelphia Gateway
Adelphia Gateway South Zone Conversion and Expansion Project Project Facilities Scope Construct Martin’s Project Status Construct UGI Lateral & Creek Booster Compression Interconnect • FERC certificate and Notice to Proceed received Mainline North (currently in service) • Received all necessary PADE
Slide 14: Storage & Transportation: Contracted Revenue
Storage & Transportation: Contracted Revenue S&T’s Contracted Revenue* for the period FY 2021 - 2024 98% 84% 84% • Contracts with new and existing 81% 83% customers significantly de-risk 79% S&T revenue going forward 72% • Secured ~$46.5 million of additional contracts since 65% November 2020 • New
Slide 15: Financial Review
Financial Review Pat Migliaccio SVP & Chief Financial Officer 14
Slide 16: Review of Fiscal 3Q21 NFE Changes
Review of Fiscal 3Q21 NFE Changes Fiscal 3Q20 – Consolidated NFE (millions) $2.71 Millions NJNG ($10.4) Utility Gross Margin* $3.1 $2.7 O&M and Other ($13.5) Clean Energy Ventures $0.8 Depreciation $1.1 O&M and Other ($0.3) Storage & Transportation ($1.2) Operating Income from Leaf River and Adelphi
Slide 17: Review of Fiscal 2021 and 2022 Guidance
Review of Fiscal 2021 and 2022 Guidance Fiscal 2021 NFEPS Guidance May 6 Revised August 5 Revised FY 21 Original March 15 Revised Guidance Guidance Guidance (Nov 30) Guidance $0.05 $0.20 NJRES performance $2.10 - $2.20 $0.30 $2.05 - $2.15 and NJNG BGSS RES further upside due to Uri RES outperformanc
Slide 18: NJR Capital Plan
NJR Capital Plan* (Millions) FYTD 2021A FY2021E FY2022E Near Real Time Return? New Customer $40 $52 - $54 $56 - $59 Yes New Jersey Natural Gas Maintenance & Integrity $78 $92 - $95 $142 - $150 SAFE II/ NJ RISE $30 $28 - $32 - Yes IIP $3 $6 - $7 $10 - $11 Yes SRL $95 $100 - $110 - IT $3 $15 - $18 $58
Slide 19: NJR Projected Cash Flows
NJR Projected Cash Flows (Millions) FY2020A FY2021E FY2022E Cash Flow from Operations $213 $330 - $350 $385 - $410 Uses of Funds Capital Expenditures* $470 $566 - $639 $672 - $711 Acquisition - S&T Assets $534 Dividends $118 $127 - $132 $135 - $140 Total Uses of Funds $1,122 $693 - $771 $807 - $851
Slide 20: NJR CEV – SREC Hedging Strategy Stabilizes Revenue
NJR CEV – SREC Hedging Strategy Stabilizes Revenue As of July 29, 2021 Percent Hedged Average Price Current Price (EY) EY 2022 390 12 97% $200 $234 Percent Hedged Average Price Current Price (EY) EY 2023 390 11 97% $202 $221 Percent Hedged Average Price Current Price (EY) EY 2024 374 24 94% $196 $20
Slide 21: Third Quarter 2021 Key Takeaways
Increased fiscal 2021 NFEPS guidance to a range of $2.10 - $2.20 Rate case proceeding as scheduled Construction of SRL is complete – expect to place into Key Takeaways service in August 2021 Third Quarter 2021 More than 70% of CEV pipeline for fiscal 2021 and 2022 is operational, under construction
Slide 22: Appendix
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Slide 23: Appendix
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Slide 24: Third Quarter NFE by Business Unit
Third Quarter NFE by Business Unit (Thousands) Three Months Ended June 30 Nine Months Ended March 30 2021 2020 Change 2021 2020 Change New Jersey Natural Gas $1,581 $11,968 ($10,387) $131,589 $142,160 ($10,571) Clean Energy Ventures (4,926) (5,686) 760 (24,072) (22,694) (1,378) Storage and Transport
Slide 25: Reconciliation of NFE and NFEPS to Net Income for Fiscal 3Q21
Reconciliation of NFE and NFEPS to Net Income for Fiscal 3Q21 Net Financial Earnings, Fiscal 3Q21 (Millions) Net Income ($111.8) Add Back • NFE is a measure of earnings Unrealized loss on derivative instruments and related transactions 21.9 based on eliminating timing Tax effect (5.2) differences su
Slide 26: NJR CEV – SREC Hedging by Fiscal Year
NJR CEV – SREC Hedging by Fiscal Year As of July 29, 2021 Percent Hedged Average Price Current Price (FY) FY 2022 399 3 99% $202 $230 Percent Hedged Average Price Current Price (FY) FY 2023 387 12 97% $201 $214 Percent Hedged Average Price Current Price (FY) FY 2024 319 79 80% $193 $195 Percent Hedg
Slide 27: CEV Project Status - FY 2021 and 2022
CEV Project Status - FY 2021 and 2022 Capex by Expected In- Capex by Status Status Project State MWs by Project Project ($ MWs by Status Service ($ millions) millions) Mount Laurel* NJ Fiscal 1Q21 2.9 $3.7 In-Service 5.6 $9.4 East Hampton CT Fiscal 2Q21 2.7 $5.7 Greenville Solar RI Fiscal 1Q22 1.0 $