Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — AGA Financial Forum 2015
29 slides from Newjersey Resources's conference presentation, May 15, 2015
Slide 1: AGA Financial Forum
AGA FINANCIAL FORUM JW Marriott Desert Springs Palm Desert, CA May 17 - 19, 2015
Slide 2: Regarding Forward-Looking Statements
Regarding Forward - Looking Statements 2 Certain statements contained in this presentation are forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 . New Jersey Resources (NJR or the Company) cautions readers that the assumptions forming the basis f
Slide 3: Disclaimer Regarding Non-GAAP Financial Measures
Disclaimer Regarding Non - GAAP Financial Measures 3 This presentation includes the non - GAAP measures net financial earnings (NFE), utility gross margin and financial margin . As indicators of the Company’s operating performance, these measures should not be considered alternatives to, or more mea
Slide 4: NJR Business Segment NFEPS Contributions; Updated Fiscal 2015 Guidance
NJR Business Segment NFEPS Contributions; Updated Fiscal 2015 NFEPS Guidance to $1.65 - $1.75 from $1.60 - $1.70 4 New Jersey Natural Gas NJR Clean Energy Ventures NJR Energy Services NJR Midstream NJR Home Services $1.45 - $1.55 $1.60 - $1.70 $1.65 - $1.75 $0.00 $0.50 $1.00 $1.50 $2.00 Original Pre
Slide 5: Fiscal Second Quarter NFE
Fiscal Second Quarter NFE 5 ($MM) Company 2015 2014 2015 2014 New Jersey Natural Gas $48.6 $47.0 $76.8 $74.7 NJR Energy Services 36.3 91.4 52.8 98.8 NJR Clean Energy Ventures 13.0 12.8 22.0 16.4 NJR Midstream 2.6 2.3 4.7 3.7 NJR Home Services/Other (1.4) (1.6) (2.0) (1.8) Total $99.1 $151.9 $154.3 $
Slide 6: New Jersey Natural Gas: The Foundation of Our Business
New Jersey Natural Gas: The Foundation of Our Business » Growing customer base – primarily residential and commercial x New construction market continues to expand x Healthy mix of new construction and conversions » Infrastructure investments to strengthen distribution and transmission system are su
Slide 7: Strong Customer Growth Continues
Strong Customer Growth Continues 7 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 FY09 FY10 FY11 FY12 FY13 FY14 7,599 5,841 6,189 6,783 6,704 7,456 New Construction Conversions » 4,079 new customers added in 1H fiscal 2015 compared with 3,658 last year – a 12 percent increase x 1,962 new construc
Slide 8: Key Trends Support Future Customer Growth
Key Trends Support Future Customer Growth 8 0.0% 5.0% 10.0% 15.0% N.J. Morris Monmouth Ocean 1.2% 6.2% 2.3% 14.1% Population Change 2000 - 2013 1 2014 - 2016 10,200 Beyond 2017 - 78,206 New Construction 3 3 . Source: A.D. Little $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 NJNG Fuel Oil Propane Electricity $
Slide 9: Collaborative Regulatory Relationships
Collaborative Regulatory Relationships 9 Regulatory and Incentive Programs » Basic Gas Supply Service Incentives (BGSS) - 1992 » Conservation Incentive Program (CIP) - 2006 » Accelerated Infrastructure Program (AIP) - 2008 » The SAVEGREEN Project® - 2009 » Safety Acceleration and Facility Enhancemen
Slide 10: The SAVEGREEN Project
The SAVEGREEN Project ® 10 » Investment in high - efficiency equipment » Encourages energy savings » Plan to invest approximately $144 million in grants and financial incentives over current life of the program » Since inception: x Assisted more than 36,500 customers in reducing energy usage and low
Slide 11: Diversified Sources of Utility Growth
Diversified Sources of Utility Growth 11 NJNG expects incremental utility gross margin to grow over 32 percent by 2017 Incremental Utility Gross Margin $0 $5 $10 $15 $20 $25 $30 $35 $40 FY14A FY15E FY16E FY17E $29.1 $35.4 $36.7 $38.5 Millions Customer Growth Red Oak SAVEGREEN NGV BGSS Incentives
Slide 12: NJNG Capital Investment – Mid Year Review
NJNG Capital Investment – Mid Year Review 12 CAPITAL INVESTMENTS ($MM) 2015E YEAR TO DATE STATUS NJNG Customer Growth $33.9 $18.5 Added 4,079 customers in 1H15; on target to add 15,000-17,000 over the next two years Maintenance/Other 66.9 31.7 Capital spending on track to enhance system safety and r
Slide 13: Base Rate Case Update: Why File in November 2015
Base Rate Case Update Why File a Rate Case in November 2015 ? » Required as part of the SAFE program approval » Infrastructure Investments x Normal routine/capital additions x SAFE x SRL x Liquefaction x NJ RISE x Superstorm Sandy 13
Slide 14: Base Rate Case Update: Timeline and Status
Base Rate Case Update 14 Pre - hearing Hearings Summations Decision ALJ BPU 3 ½ Months 1 Month 1 ½ Months 3 Months November 15, 2015 March 1 April 1 May 15 August 15, 2016 Timeline and Current Status » Preparing Rate Case Filing x Retaining outside consultants as witnesses in following areas: • Cost
Slide 15: Regulated Growth from NJR Midstream
Regulated Growth from NJR Midstream 15 » Current investments provide 5 to 10 percent of NFE » Strategic Marcellus location supports value Iroquois Pipeline 5.53 percent interest in pipeline to serve the Northeast market Steckman Ridge 50/50 joint venture with Spectra Energy 12 Bcf natural gas storag
Slide 16: PennEast Pipeline
PennEast Pipeline 16 » 115 - mile , 36 - inch pipeline connecting Northeast Marcellus supply to Northeast markets » Contracted volume up to 1,000,000 dth/day » Total capex $1 billion » Current ownership: NJR, AGL, SJI, UGI at 20 percent and PSEG and SE at 10 percent » Open season concluded August 29
Slide 17: NJRES: Generated NFE Every Year Since 1995
NJRES: Generated NFE Every Year Since 1995 » Serves wholesale customers across North America » Diverse portfolio of physical natural gas assets » Firm storage (~40 Bcf in the US and Canada) » Firm transportation ( 1.4 Bcf/day) » Services include: x Transporting natural gas x Selling storage gas duri
Slide 18: NJRCEV: Continued Portfolio Diversification
NJRCEV: Continued Portfolio Diversification Commercial Solar » 20 projects in service » 72.4 MW » Projects include roof - and ground - mounted installations, both grid - connected and net - metered Residential Solar - The Sunlight Advantage ® » Second largest residential solar provider in New Jersey
Slide 19: Improving SREC Fundamentals
Improving SREC Fundamentals 19 Source of Monthly Capacity Additions: New Jersey’s Clean Energy Program™ Source of SREC Prices: Karbone $60 $80 $100 $120 $140 $160 $180 $200 $220 $240 SREC Prices $70 $218 NJRCEV forecasts SREC production to grow in excess of 194,000 in fiscal 2017
Slide 20: CEV Capital Investment – Mid Year Review
CEV Capital Investment – Mid Year Review 20 CAPITAL INVESTMENTS ($MM) 2015E YEAR TO DATE STATUS NJRCEV Commercial Solar $69.7 $22.6 Two grid-connected projects totaling 16 MW completed 1H15; another 10.3 MW to be completed by fiscal year end Residential Solar 32.5 8.5 272 (2.6 MW) residential system
Slide 21: Capital Investment Plan
C apital Investment Plan 21 ($MM) 2015E 2015A (FYTD) 2016E 2017E Total Immediate Return NJNG Customer Growth $33.9 $18.5 $26.9 $27.0 $87.8 Yes Maintenance/Other 66.9 31.7 54.4 56.2 $177.5 AIP/SAFE 41.2 11.8 39.0 2.4 $82.6 Yes Superstorm Sandy 5.0 1.1 - - $5.0 NGV Fueling Stations 4.2 2.4 - - $4.2 Ye
Slide 22: Current Cash Flow Forecast
Current Cash Flow Forecast 22 2015F 2016E 2017E Cash Flow from Operations $271.1 $237.5 $258.5 Uses of Funds Capital expenditures - NJNG ($189.4) ($233.7) ($153.9) Capital expenditures - Penn East (12.3) (47.9) (124.5) Capital expenditures - CEV (198.6) (157.3) (58.8) Dividends (76.1) (81.0) (87.0)
Slide 23: An Ambitious, Yet Achievable Plan
An Ambitious, Yet Achievable Plan » Increased regulated infrastructure investments drive safe, reliable service and anchors our business portfolio x NJNG drives our long - term growth x PennEast Pipeline » Provide customers with cost - efficient renewable electricity, while reducing ITC reliance x P
Slide 24: Our Path to Continued Growth
Our Path to Continued Growth 24 Fiscal 2015 NJNG x Customer growth x CIP x BGSS incentives x SAVEGREEN x SAFE x NJ RISE x SRL Energy Services x Physical natural gas services x Producer services Clean Energy x Portfolio diversification x More SRECs; higher prices x Expanded wind investments Midstream
Slide 25: AGA Financial Forum
AGA FINANCIAL FORUM JW Marriott Desert Springs Palm Desert, CA May 17 - 19, 2015
Slide 26: Appendix: NJNG Service Area Map
Appendix NJNG Service Area Map A 1
Slide 27: NJ RISE Project Area Maps
NJ RISE Project Area Maps A 2
Slide 28: Potential SRL Pipeline Route Map
Potential SRL Pipeline Route Map A 3
Slide 29: PennEast Pipeline map
nnEast Pipel Gc. nF ast A4