Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — Q2 2022 Earnings Presentation
27 slides from Newjersey Resources's earnings presentation, May 5, 2022
Slide 1: Second Quarter 2022 Financial Results
Second Quarter 2022 Financial Results May 5, 2022
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 Second-Quarter FY 2022 Highlights Steve Westhoven | President & CEO 2 Financial Highlights Roberto Bel | SVP and CFO 3 Q&A Session 2
Slide 4: Second Quarter 2022 Summary
Second Quarter 2022 Summary Quarterly Review NJR reported EPS of $1.00 and NFEPS of $1.36* for Q2 Fiscal 2Q22 Increased FY 2022 NFEPS guidance to $2.30 - $2.40 from previously issued guidance of $2.20 - $2.30; driven by outperformance at Energy Services (“ES”) New Jersey Natural Gas increased NFE by
Slide 5: Increasing Fiscal 2022 NFEPS Guidance
Increasing Fiscal 2022 NFEPS Guidance Net Financial Earnings Fiscal 2022 NFEPS per Share Guidance by Segment 7-9% LONG-TERM Guidance increase due to ANNUAL ES over-performance GROWTH* $2.30 - $2.40 $2.16 CEV 17%-20% NJNG 60%-62% S&T 5%-8% Home Services $1.74 ~0%-1% $1.45 ES 13%-15% FY2019A FY2020A F
Slide 6: New Jersey Natural Gas
New Jersey Natural Gas Solid Performance in First Full Quarter Since New Base Rates NJNG Customers 568 Fiscal YTD Capital Expenditures* (in thousands) Added 3,579 new customers ~40% of capital YTD in fiscal expenditures 2022 earning a near real-time return Maintenance $49 IIP $10 SAVEGREEN $24 ~$144
Slide 7: CEV: Succeeding in an Evolving Solar Industry
CEV: Succeeding in an Evolving Solar Industry Creating a Broader Opportunity Set for Projects 2020 - 2023 Long-term Fundamentals 2009 - 2019 Remain Strong Rapid Industry Growth Strategic Shift / Near-Term Delays / Regulatory Lag Policy transition, interconnect delays and supply chain Nascent market
Slide 8: CEV: Robust Pipeline in Solar
CEV: Robust Pipeline in Solar Taking Advantage of a Considerable Decarbonization Opportunity MWs Installed Capacity Pipeline of Total of 1200 of 371MW Plus… ~680 MW 1.1 GW 1000 In Service Over $1B of Under Construction investment to 800 date Under Contract or Exclusivity 605MW Unlevered 600 Under Co
Slide 9: Clean Energy Ventures
Clean Energy Ventures New Project Innovation (Under Construction) CEV Revenue 8.9MW 9% 2Q Fiscal 2022 Milburn, NJ 33% SRECs* Floating Solar TRECs Array $11.8M Electricity Sales 34% Sunlight Advantage 24% With the completion of an 8.9MW facility in 2022, CEV will have developed the two largest floati
Slide 10: Storage and Transportation: Adelphia Gateway
Storage and Transportation: Adelphia Gateway South Zone Conversion and Expansion Project Martin’s Creek Booster Compression Sherry Lane Lateral UGI Easton Road Interconnect Project Updates • 90% of total construction completed; expect completion by end of North Mainline the year • Nearly fully contr
Slide 11: Financial Review
Financial Review Roberto Bel SVP & Chief Financial Officer 10
Slide 12: NJR Review of Fiscal 2Q22 NFE Changes
NJR Review of Fiscal 2Q22 NFE Changes ($ in Millions) Fiscal 2Q21 – Consolidated NFE ($ in millions) $ 170.6 NJNG $ 22.2 Utility Gross Margin* $ 44.4 $22.2 $2.4 O&M $ (0.1) $(0.1) Depreciation & Amortization (D&A) $ (3.9) $170.6 Interest expense, AFUDC, Income Tax $ (18.2) Clean Energy Ventures $ 2.
Slide 13: NJR CEV – SREC Hedging Strategy Stabilizes Revenue
NJR CEV – SREC Hedging Strategy Stabilizes Revenue Based on Energy Year, as of April 25, 2022 Percent Hedged Average Price Current Price (EY) EY 2022 398 8 98% $201 $238 Percent Hedged Average Price Current Price (EY) EY 2023 398 5 99% $203 $227 Thousands Percent Hedged Average Price Current Price (
Slide 14: NJR Capital Plan
NJR Capital Plan1 ($ in Millions) YTD Near Real Time 1Q FY2022A 2Q FY2022A FY2021A FY2022E FY2023E FY2022A Return? New Jersey Natural Gas New Customer $12 $11 $23 $65 $52 - $56 $54 - $58 Yes Maintenance & Integrity $27 $16 $49 $252 $125 - $140 $114 - $118 Cost of Removal / Other $9 $18 $21 $66 $34 -
Slide 15: NJR Projected Cash Flows
NJR Projected Cash Flows ($ in Millions) FY2021A FY2022E FY2023E Cash Flow from Operations $391 $265 - $285 $430 - $450 Uses of Funds Capital Expenditures1 $625 $534 - $610 $481 - $658 Dividends2 $117 $127 - $132 $135 - $140 Total Uses of Funds $742 $661 - $742 $628 - $736 Financing Activities Commo
Slide 16: Second Quarter 2022 Key Takeaways
Raised guidance for FY 2022 due to better-than- expected performance from Energy Services Strong NFE performance at New Jersey Natural Gas Key Takeaways Solar project pipeline exceeds 680 MWs of projects Second Quarter under contract, construction or exclusivity 2022 Adelphia Gateway is flowing gas
Slide 17: Appendix
Appendix Second Quarter Fiscal 2022 NFE by Business Unit Reconciliation of NFE and NFEPS to Net Income for Q2 Fiscal 2022 Reconciliation of Non-GAAP Measures Review of Fiscal YTD NFE Changes Raising FY 2022 NFE Guidance to $2.30 - $2.40 Per Share NJR CEV – SREC Hedging by Fiscal Year Revenue Recogni
Slide 18: Second Quarter Fiscal 2022 NFE by Business Unit
Second Quarter Fiscal 2022 NFE by Business Unit ($ in 000s) (Thousands) Three Months Ended March 31, Six Months Ended March 31, 2022 2021 Change 2022 2021 Change New Jersey Natural Gas $102,783 $80,541 $22,242 $153,863 $130,008 $23,855 Clean Energy Ventures (6,491) (8,872) $2,381 $(13,312) $(19,146)
Slide 19: Reconciliation of NFE and NFEPS to Net Income
Reconciliation of NFE and NFEPS to Net Income ($ in 000s) (Unaudited) Three Months Ended Six Months Ended March 31, March 31, 2022 2021 2022 2021 NEW JERSEY RESOURCES • NFE is a measure of earnings based on eliminating timing A reconciliation of net income, the closest GAAP financial measure, to net
Slide 20: 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, 2022 2021 2022 2021 A reconciliation of gross margin, the closest GAAP financial measurement, to utility gross margin is as follows: NJNG Utility Gross Margin • NJNG's utility gr
Slide 21: Review of Fiscal 2022 YTD NFE Changes
Review of Fiscal 2022 YTD NFE Changes ($ in Millions) YTD Fiscal 2021 – Consolidated NFE ($ in millions) $ 215.3 $5.8 $23.9 $(0.6) NJNG $ 23.9 Utility Gross Margin* $ 52.2 $215.3 O&M $ 7.1 $2.1 $196.0 Depreciation & Amortization (D&A) $ (7.6) Interest expense, AFUDC, Income Tax $ (27.8) $(50.5) Clea
Slide 22: Raising FY 2022 NFE Guidance to $2.30 - $2.40 Per Share
Raising FY 2022 NFE Guidance to $2.30 - $2.40 Per Share NFE Expected Segment FY2022 Expected NJNG FY2022 Expected FY2022 Expected ES Contributions Utility Gross Margin CEV Revenue Financial Margin Distribution Distribution Distribution Q4E Q3E (~8%) FY2022E Q3E Q4E (~11%) ~17% ~13% Q1E NJNG 60%-62%
Slide 23: NJR CEV – SREC Hedging by Fiscal Year
NJR CEV – SREC Hedging by Fiscal Year As of April 25, 2022 Percent Hedged Average Price Current Price (FY) FY 2022 464 100% $203 $235 Percent Hedged Average Price Current Price (FY) FY 2023 395 7 98% $201 $223 Thousands Percent Hedged Average Price Current Price (FY) FY 2024 365 36 91% $193 $208 Per
Slide 24: Revenue Recognition for AMAs
Revenue Recognition for AMAs ($ in Millions) The Transaction: The Accounting: The Result: AMAs feature initial and ASC 606 revenue recognition Disproportionate value is permanent capacity standard requires that allocated to the permanent releases with cash revenue be allocated to both release period
Slide 25: Investor Value Proposition
Investor Value Proposition ~3% 7%-9% Dividend Long-term Yield1 ~10 -12 % % NFE Growth Total Shareholder Return 1Based on dividend per share of $1.45 and closing share price of $43.83 on 5/3/2022 24
Slide 26: Leadership and Board of Directors
Leadership and Board of Directors Executive Officers Directors Stephen D. Westhoven Patrick Migliaccio Gregory E. Aliff* President and Chief Executive Officer Senior Vice President and Chief Operating Officer Partner, Deloitte & Touche LLP (Retired) New Jersey Resources New Jersey Natural Gas Donald
Slide 27: Shareholder and Contact Information
Shareholder and Contact Information Stock Transfer Agent and Registrar Corporate Headquarters The Transfer Agent and Registrar for the company’s common stock is Broadridge Corporate Issuer Solutions, Inc. (Broadridge). 1415 Wyckoff Road Wall, NJ 07719 Shareowners with questions about account activit