Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — New York Financial Community (December 2005)
36 slides from Newjersey Resources's conference presentation, Dec 6, 2005
Slide 1: New York Financial Community December 6, 2005
New York Financial Community December 6, 2005 Exhibit 99.01
Slide 2: Regarding Forward-Looking Statements
Regarding Forward-Looking Statements Certain statements contained in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can also be identified by the use of forward-looking terminology such as "may,"
Slide 3: A Quality Company
A Quality Company We know what we are ... Primarily a regulated natural gas distribution company Complementary wholesale energy services business We focus on the fundamentals We deliver consistent results for our stakeholders NJR has increased EPS for the last 14 years with a CAGR of 7.7 percent ove
Slide 4: Our Profile
Our Profile A Company with ... 14 consecutive years of growth, an industry record A 5-year average annual return of 14 percent An above average dividend growth rate of 5.9 percent A strong financial profile (S+P: A+, Moody's: Aa3) A market capitalization of $1.3 billion NJNG 1582 NJRES 501 Retail an
Slide 5: Our Service Area
Our Service Area Largest independent LDC in New Jersey Growing customer base Primarily residential and small commercial Consistent growth forecast NYC Phila. Atlantic City Excellent service area demographics
Slide 6: Consistent Earnings Growth
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1.13 1.24 1.28 1.37 1.48 1.56 1.67 1.81 1.97 2.12 2.41 2.6 2.7 Consistent Earnings Growth NJR estimates $2.75 to $2.85 per basic share in fiscal 2006 * Net of certain items *
Slide 7: Rewarding Our Shareowners
1995 1996 1997 1998 1999 2000 East 1.52 1.56 1.6 1.64 1.68 1.72 2000 2001 2002 2003 2004 2005 2006 1.15 1.17 1.2 1.24 1.3 1.36 1.44 * Effective January 3, 2006 * Dividends per Share Payout Ratio Rewarding Our Shareowners 2000 2001 2002 2003 2004 2005 0.64 0.59 0.57 0.51 0.5 0.49 1-year dividend grow
Slide 8: Rewarding our Shareowners - Share Repurchase Program
Rewarding our Shareowners Shares Authorized (millions): 2.5 Shares Repurchased (millions): 2.2 Split-adjusted average cost: $28.55 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 East 33 241 249 320 378 126 185 47 31 547 September 30, 2005 Share Repurchase Program
Slide 9: Industry Challenges
Industry Challenges What issues are on investor's minds? Price Supply What are we doing about it? Hedging our portfolio (80 percent hedged for 2005- 06 winter) Using incentive programs to moderate volatility Keeping price increases below national averages Ensuring access to supply Considering altern
Slide 10: Increasing Prices
Increasing Prices 5/1/2005 6.645 5/2/2005 6.645 5/3/2005 6.495 5/4/2005 6.61 5/5/2005 6.485 5/6/2005 6.655 5/7/2005 6.67 5/8/2005 6.67 5/9/2005 6.67 5/10/2005 6.555 5/11/2005 6.67 5/12/2005 6.63 5/13/2005 6.625 5/14/2005 6.47 5/15/2005 6.47 5/16/2005 6.47 5/17/2005 6.455 5/18/2005 6.41 5/19/2005 6.4
Slide 11: Our Commodity Price vs. the NYMEX
Our Commodity Price vs. the NYMEX Excel.Chart.8
Slide 12: Helping Customers
Helping Customers Filing made with to extend incentive programs through October 2007 Customer bills reduced by about $266 million, or 4 percent, annually since program inception 2001 2002 2003 2004 2005 Customer Savings 25 24 19 28 31 Shareowner Margin 5 5 5 6 6 $29 $30 $24 $34 $37 $37
Slide 13: Reliable Supply
Reliable Supply DTH % Storage 318,920 40.0 Pipeline Capacity 301,380 37.8 LNG 130,000 16.3 3rd Party Suppliers 46,794 5.9 TOTAL 797,094 100.0 TOTAL 797,094 100.0 Peak Day Supply Scenario
Slide 14: High Prices are Changing our Business
High Prices are Changing our Business Price affects usage Requires greater emphasis on efficiency and conservation Consistent with New Jersey energy policy Need to align regulatory strategy with new market realities market realities market realities market realities market realities market realities
Slide 15: Components of NJNG Bill
Components of NJNG Bill BGSS 1259.72 SBC 48.91 Delivery 367.38 BGSS 419.31 SBC 7.51 Delivery 414.99 Based on annual sales of 1,000 therms
Slide 16: Conservation and Usage Adjustment
Conservation and Usage Adjustment 5-year Pilot Program Filed with the BPU on December 5, 2005 Encourages conservation and efficiency Will replace WNC with a margin-per-customer model Separates throughput from margin Accumulated differences are recovered/returned in subsequent period Seeking January
Slide 17: Benefits - Conservation and Usage Adjustment
Benefits - Conservation and Usage Adjustment Customers Receive aggressive promotion of energy conservation and efficiency this winter - more ways to save Regulators Complementary program to NJ Clean Energy Utilities new channel to market - increase awareness Pilot is a learning experience NJNG Fully
Slide 18: Strong Customer Growth
Strong Customer Growth 1999 397 2000 410 2001 423 2002 434 2003 444 2004 455 2005 462 Customer growth still critical for future success New Conversions 6890 3545
Slide 19: Future Growth Potential
Preliminary 30899 Final 19736 Conceptual 3724 Pending 479 Pending Preliminary Final Conceptual Non Heat 9751 On Main 39880 Off main 81334 New Customers = 54,838 Non-heat customers Non-gas off main Non-gas on/near main Conversions = 130,965 Future Growth Potential Sources: Local Planning Boards and N
Slide 20: Fuel Price Comparison
Fuel Price Comparison Comparison based on October 2005 prices based on 100,000 comparable btu's * Price subject to BPU approval * Price subject to BPU approval * Price subject to BPU approval * Price subject to BPU approval NJNG* Oil Propane Electric 1.6 1.99 2.44 2.97
Slide 21: Capital Expenditures
Capital Expenditures Customer Growth 21.9 System Integrity 24.1 Technology & Other 3.6 Cost of Removal 5.6 MGP, net 16.7 Pipeline Integrity 11 New Customer 24.7 System Integrity 24.3 Technology & Other 2.3 Cost of Removal 6.7 MGP, net 7.8 Pipeline Intregrity 2.3 2006 Plan: $82.9 million 2005 Actual:
Slide 22: Key Drivers at NJRES
Key Drivers at NJRES Clear business focus Our assets are linked with our strategy We market physical assets Diversified market areas Eastern half of United States and Canada Strong access to capital $325 million of committed credit facilities at NJR Risk management Only natural gas; no commodity spe
Slide 23: NJRES Asset Base
NJRES Asset Base “ae Pe as CE Energy Services
Slide 24: Portfolio Strategy
Portfolio Strategy Integrated physical assets provide the opportunity for profitability across different regions Diverse portfolio captures additional value when prices change between locations Hurricanes Katrina and Rita created changes at various locations Portfolio has been designed to leverage t
Slide 25: The Impact of Volatility
The Impact of Volatility The Impact of Volatility Louisiana and Chicago trading similarly Katrina Strikes Gulf Louisiana price spikes HIGHER than Chicago. If portfolio can sell Louisiana and buy Chicago, you profit
Slide 26: Working Capital Volatility
Working Capital Volatility 9/1/2000 12/1/2000 3/1/2001 6/1/2001 9/1/2001 12/1/2001 3/1/2002 6/1/2002 9/1/2002 12/1/2002 3/1/2003 6/1/2003 9/1/2003 12/1/2003 3/1/2004 6/1/2004 9/1/2004 12/1/2004 3/1/2005 6/1/2005 9/1/2005 -43.6 23 -99.1 -56.7 -20.5 17.8 55.3 75.2 48.5 67.8 -37.8 -25 -18.1 72.6 -34 18
Slide 27: Counterparty Credit Ratings
Counterparty Credit Ratings Publicly-Rated Investment Grade Internally-Rated Investment Grade Non-Investment Grade * East 84 13 3 * Credit exposure to non-investment grade companies is mitigated through the use of prepayments or Letters of Credit. 97 percent of net sales with investment grade compan
Slide 28: NJR: Quality Performance
Growing natural gas distribution business Disciplined wholesale energy services strategy Strong regulatory relations Excellent financial profile Consistent financial performance NJR Peer Group S&P 500 5 Years 0.14 0.102 -0.0017 NJR: Quality Performance September 30, 2005
Slide 29: Appendix A: Gross Margin
Appendix A: Gross Margin Gross margin is a non-GAAP measure. NJNG's gross margin is defined as gas revenues less gas purchases, sales tax and a Transitional Energy Facilities Assessment (TEFA), which is included in Energy and other taxes on the Consolidated Statements of Income. Management believes
Slide 30: Appendix B: Our Management Team
Appendix B: Our Management Team Laurence M. Downes Chairman & Chief Executive Officer New Jersey Resources Mr. Downes is Chairman of the Board and Chief Executive Officer of New Jersey Resources (NJR) and its principal subsidiary, New Jersey Natural Gas (NJNG). He joined NJR in March 1985 and was ap
Slide 31: Appendix B: Our Management Team
Appendix B: Our Management Team Oleta J. Harden Senior Vice President, General Counsel and Secretary New Jersey Resources Serving as General Counsel, Mrs. Harden handles all legal matters for New Jersey Resources (NJR). She joined NJR in 1984. In addition to her legal duties, she is responsible for
Slide 32: Appendix B: Our Management Team
Appendix B: Our Management Team Mariellen Dugan Vice President and General Counsel New Jersey Resources Ms. Dugan joined New Jersey Resources (NJR) in December 2005. In addition to legal matters, her responsibilities include corporate governance, compliance, insurance and rights of way and claims. P
Slide 33: Appendix B: Our Management Team
Appendix B: Our Management Team Timothy C. Hearne Jr. Senior Vice President and Treasurer NJR Service Mr. Hearne joined New Jersey Natural Gas in 1985 and heads the financial services business unit of NJR Service. His areas of responsibility include: finance, accounting, supply chain management and
Slide 34: Appendix B: Our Management Team
Appendix B: Our Management Team George C. Smith Jr. Vice President - Internal Audit NJR Service Mr. Smith joined New Jersey Resources in 1984 as an Associate Auditor, and in his most recent role as Director - Internal Audit, has systematically redefined the internal audit function at NJR. He is cert
Slide 35: Appendix B: Our Management Team
Appendix B: Our Management Team Kathleen F. Kerr Vice President - Marketing and Customer Services New Jersey Natural Gas Mrs. Kerr is responsible for marketing and customer services at New Jersey Natural Gas (NJNG). Prior to joining NJNG in 2005, Mrs. Kerr was Director - Customer Services for Newark
Slide 36: Appendix B: Our Management Team
Appendix B: Our Management Team Stephen D. Westhoven Vice President NJR Energy Services Mr. Westhoven joined New Jersey Natural Gas in 1990, working in the engineering and gas supply departments, before his promotion to Director - Energy Trading of NJR Energy Services (NJRES). He is currently respon
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