Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — New York Financial Community Meeting (January 2002)
24 slides from Newjersey Resources's conference presentation, Jan 10, 2002
Slide 1: Another Record Year
NING CELEBRATING A HALE CENTURY OF “Another Record Year” jew York Financial cont Meeting January 10, 2002 New Jersey Resources
Slide 2: Regarding Forward Looking Statements
Regarding Forward Looking Statements This presentation contains forward-looking statements. NJR wishes to caution persons reading or hearing this presentation that the assumptions which form the basis for forward-looking statements such as earnings goals include many factors that are estimates of fu
Slide 3: 2001 EPS Contributors
2001 EPS Contributors y >» NJNG remains the primary earnings driver » NJRES contributed 8 percent to EPS > NJRES and OSS/CM contributed 14 percent to EPS NJR & Other 1% NJRES. 8% NUNG OSS/CM 8% 4 | Financial Performance N NYRR...
Slide 4: Return on Equity
Return on Equity > Highest ROE in gas industry in 2000 > Our highest level in 17 years > Allowed ROE 1996 1997 1998 1999 2000 2001 of 11.5 percent Based on continuing operations * Excluding OCI 5 | Financial Performance N NYRR...
Slide 5: Dividend Rate and Payout Ratio
Dividend Rate and Payout Ratio Dividends per Share Payout Ratio $190 $135 $130 $175 $170 $155 $100 $155 $150 1996 1997 1992 1999 2000 2001 2002 1996 1997 19981999 20002001 * Effective January 2, 2002 >» Seven increases in six years >» Lowest payout ratio since 1984 & | Financial Performance N NYRR..
Slide 6: Fiscal 2001 Capital Expenditures
Fiscal 2001 Capital Expenditures Economic Value Added Process Total: $48.8 Margin from new $23.2 customers must cover associated capital costs System integrity spending up to depreciation level $4.6 Other project evaluated on EVA basis $1.5 Mitions | 919-5 Hi New Customer o He Integrity O Other Util
Slide 7: Capital Structure
Capital Structure 1995 2001 56% 50% 3% MA% 50% Common Equity 0 Preferred BLT Debt Credit Rating: Moody’s A-2 S&P A Financial Performance N NYRR...
Slide 8: Share Repurchase & DRP Programs
Share Repurchase & DRP Programs Plan implemented Shares authorized Shares purchased on open market Total cash investment ($MM) Average investment per share December 31, 2001 Share Repurchase] Dividend Program Reinvestment 9196 1196 1,500,000 WA 1,350,070 422,813 $48.9 $12.8 $36.27 $30.31 Since begin
Slide 9: Key Initiatives
Key Initiatives Achieving our goal of above average earnings growth that will consistently place us in the top 10 percent of our peer group is based on: >» Profitable Core Market Growth > Wholesale Energy Services > Quality - “Excellence in Operations” > New Market Opportunities 10 y)\ pabis
Slide 10: Our Service Area
Our Service Area > 3 percent annual customer growth rate; nearly double the national average > Population growing faster than state average > Largest independent LDC in New Jersey || Profitable Customer Growth
Slide 11: Customer Growth
Customer Growth NJNG captures 95 percent of new 14,000 construction 42,000 Profitable mix of 10,000 conversion and new 8,000 customers enhance profitability 6,000 4,000 Another 1,302 customers added natural gas heat to their existing service 2,000 0 Customer growth generates approximately $6.0 milli
Slide 12: 2000 Census Data
2000 Census Data In New Jersey | Nationally (21 Counties) |(3.141 Counties Population | % County _| Change _| Change | Rank Rank (Ocean 78000 | 179 | 2 ili [Monmouth | 62,000 | 112 | 8 109 [Morris 49000 | 116 [7 154 > Over 188,000 new residents » 19 percent of total State population live in our serv
Slide 13: The Potential of our Markets
The Potential of our Markets Pending Conceptual = 3,378 9,699 Preliminary 21,296 = Conversions = 169,119 Non-heat Customers 11,300 Non-gas off main 25,830 78,840 Final New Customers = 60,193 Sources: Local Planning Boards and NJNG Harte Hanks & A.D. Little Studies 4 Profitable Customer Growth
Slide 14: Working with Regulators
Working with Regulators >» LGA Filing reduced prices to customers by 12 percent ¥ 11 percent effective December 1, 2001 Y Additional 1 percent effective January 1, 2002 Y Reflects trends in wholesale gas costs >» Also seeks to extend OSS/CM margin sharing through 2004 Y Settlement expected by summer
Slide 15: Working with Regulators
Working with Regulators » Basic Gas Supply Service (BGSS) Y Ensures NJNG is responsible to provide adequate capacity for service reliability ¥ Gives customers new choices including the opportunity to “lock in” commodity prices ¥ Supports marketers’ ability to offer services directly to our customers
Slide 16: Off-System & Capacity Management Programs
Off-System & Capacity Management Programs 0 1992 1903 1994-1995 1951997 1998 1999 0002001 Customer Credits & Shareowner Margin Since 1992, off-system sales/capacity management have generated over $160 million of credits to customers and total EPS of $4.50. 17| Wholesale Energy Services N NJR
Slide 17: New Markets Create New Opportunities
New Markets Create New Opportunities Total Energy Deliveries GCore Customers WOseSysem Saks Capacity Release Retail Marketing Energy Management Billion Cubic Feet NJR has consistently profited from new market opportunities Wholesale Energy Services
Slide 18: Energy Services EPS
Energy Services EPS >» Energy Services are a growing contributor of total earnings $0.45 EPS Contributions $41 $.35 >» Early player in wholesale energy services » Diverse product line $0.15 ¥ Storage and marketing v Fuel management BaD v Basis and Day Trading 1999 2000 2001 > 2001 EPS contribution 1
Slide 19: Improved Productivity
Improved Productivity > The cost of adding anew customer has declined nearly 23 percent, while O&M productivity has improved by 10 percent since 1992. Primary drivers have been: ¥ Balanced marketing strategy ¥ Changes in work processes New Customer Cost O&M as a Percent of Margin $3000 ate ome oR $2
Slide 20: Productivity & Incentives
Productivity & Incentives Virtually every employee is a shareowner $2.7 million of incentive pay at risk; 5 percent of total payroll Incentives paid in cash and stock Bargaining Unit participates in the incentive plan Customers per Employee 563 at [ENR mPeer Group Margin per Employee $267 [ENIR mPee
Slide 21: Malcolm Baldrige Focus Areas
Malcolm Baldrige Focus Areas ntait = cour excellence Tesourcelfocus xcell i Lal Beemecs ineemetion syanalysis Process 22 | Quality NM NYRR...
Slide 22: Expanding NJR Home Services
Expanding NJR Home Services >» Appliance service >» Duct cleaning >» HVAC equipment replacement >» Plumbing services » Protection Plan enhancements >» Expected to provide about $.06 per share in F¥2002 23 | New Market Opportunities N NJR
Slide 23: Celebrating Years of Dedicated Service
Celebrating 50 Years of Dedicated Service Eamings Per Share sa10 $2.95 1982 2001 Market Value sao sao 2 = a0 16 . 1052 2004 24 N=
Slide 24: Key Points
Key Points » Excellent market opportunities >» Strong earnings growth prospects > Healthy financial profile » Demonstrated consistent performance Annualized 5 Year Total Return 10.3% 8.7% 25
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