Newjersey Resources Corporation · NYSE:NJR
Newjersey Resources — West Coast Power/Utilities/Solar Conference (June 2016)
26 slides from Newjersey Resources's conference presentation, Jun 1, 2016
Slide 1: Safe, Reliable Natural Gas at Our Core ... and So Much More
SAFE, RELIABLE NATURAL GAS AT OUR CORE ... AND SO MUCH MORE r, June 1-2, 2016
Slide 2: Regarding Forward Looking Statements
Regarding Forward Looking Statements Certain statements cantained inthis presentation are forward-looking slatements within the meaning of Section 27A of tha Securities Act of 1933, as amended, Section 21E of the Secures Exchange Act of 1934, as amended, and the Private Secures Litgation Reform Act
Slide 3: Disclaimer Regarding Non-GAAP Financial Measures
Disclaimer Regarding Non-GAAP Financial Measures This presentation includes the non-GAAP measure NFE. As an indicator of the Company's operating performance, this measure should not be considered an alternative to, or more meaningful than, GAAP measures, such as cash flow, net income, operating inco
Slide 4: Our Businesses
Our Businesses Expected Net Finan Earnings Contribution Fiscal 2016 New Jersey * Strong customer growth Natural infrastructure investments to ensure safety and reliability coer Gas. Regulatory incentives NR * Steckman Ridge ~ 12 Bcf storage facility Midstream * 20 percent interest in PennEast Pipeli
Slide 5: Fiscal Second Quarter
Fiscal Second Quarter 20 Strategic Actions NJNG = Base rate case remains on track = Separate rate treatment sought for Southern Reliability Link (SRL) NJRCEV = Residential solar market remains strong = Construction continues at Ringer Hill, our fourth onshore wind project = Capital plan for fiscal 2
Slide 6: Dividend Growth and Payout
Dividend Growth and Payo = Dividend growth goal of 6 to 8 percent annually = 22 dividend increases in 20 years = Dividend payout ratio goal of 60 to 65 percent = 6.7 percent increase to current $.96 annual rate Dividends and Payout 2011 2012-2013 014_—— 201520168, lm Ind. Div Rate —e—Payout * Curren
Slide 7: Our Long-Term Average Annual NFE Growth Strategy
Our Long-Term Average Annual NFE Growth Strategy Remains 5 to 9 Percent How will we achieve this? : Fiscal 2016 Invest in Infrastructure to: = Expand and improve our distribution franchise network to serve a growing customer base and ensure reliable and resilient service = Develop Midstream projects
Slide 8: Strong Fundamentals Drive the Majority of NJNG's Growth
Strong Fundamentals Drive the Majority of NJNG’s Growth Largest stand-alone natural gas utility in New Jersey paz = 519,000+ customers = Growing customer base; balanced mix of new construction and conversions Reputation for Excellent Service = Highest ranked in East Region in J.D. Power’s 2015 Gas f
Slide 9: NJNG's Regulated Growth Model
NJNG’s Regulated Growth Model = Customer growth = Rate case = SRL 3 Months - $49.0 million + 30-mile route approved Current Operating Assets 6 Months - $79.5 million by BPU z + Appeals pending. NING is = 7,080 miles of = FY2Q16 NFE increase from confident that the orders transportation and FY2Q15 du
Slide 10: Key Trends Support Future Customer Growth
Key Trends Support Future Customer Growth Population Change 2000-2014 15.0% 14.1% 10.0% 6.3% 5.0% 2.3% 0.0% - Morris Monmouth Ocean 1, Source: US Census data, 2014 estimates Equivalent Customer Cost” $5.00 $4.10 $4.00 53.86 $3.00 $2.00 $1.77 $1.00 $0.88 | $0.00 NING FuelOil Propane Electricity 2 Sou
Slide 11: Mutually Beneficial Regulatory Programs
Mutually Beneficial Regulatory Programs Benefits Customer/ Program Description Societal Shareholder Inception BGSS: Basic Gas Supply | Off-system sales, capacity | Customer savings of Average of $.05 Service Incentives* release, and storage about $842 million since | per share incentives inception a
Slide 12: Base Rate Case Update
Base Rate Case Update = November 2015 filing date established with the approval of SAFE in 2012 = Initially requested an increase of $147.6 million = Proposed rate base of nearly $1.6 billion = Overall cost of capital: Embedded Weighted Amount Percent Cost Cost ($ Millions) Long-term Debt $743.2 | 4
Slide 13: Looking Beyond the Base Rate Case
Looking Beyond the Base Rate Case Strong customer growth to continue A SAFE Extension = $200 million filing pending at BPU to complete replacement of unprotected steel pipe = Seeking regulatory treatment to provide a real-time return similar to NJ RISE Continuing Regulatory Programs = BGSS Incentive
Slide 14: NJNG Capital Investment Mid-Year Update
NJNG Capital Investment Mid-Year Update CAPITAL INVESTMENTS ($MM) YEAR TO DATE (SMM) (Through March 33,2016) 2016E STATUS NING Customer Growth $15.6 $352 [Added 3,655 customers in 1H16; on target to add 8,150 customers in FY2016 Maintenance/Other 405 81.1 | Capital spending on track to enhance syste
Slide 15: NJR Midstream
NJR Midstream = Steckman Ridge = Dominion Midstream 3 Months - $2.2 million 6 Months - $4.6 million = PennEast Pipeline + Received FERC Notice of Schedule for Environmental Steckman Ridge = Consistent FY2016 NFE Review in March 2016 = $127 million investment, 12 Bcf a Sa Mn natural gas storage facil
Slide 16: NJR Clean Energy Ventures
NJR Clean Energy Ventures Commercial Solar = Grid connected and net metered projects 3 Months - $11.8 million Residential solar leases Current Operating Assets 6 Months - $19.3 million Commercial Solar Onshore wind farms = 22 projects in service = Lower FY2Q16 NFE Other potential AO MY compared with
Slide 17: Diversifying Our Renewable Portfolio by Scaling Up
Diversifying Our Renewable Portfolio by Scaling Up Onshore Wind Project Ringer Hill In Service Date Year-end 2016 June 2014 PPA/Hedge Majority of energy produced will be hedged under 15-year agreement with Iron Mountain 25-year PPA with Size (mw) 39.9 Capital (smm) $84 Location Pennsylvania 60 miles
Slide 18: New Jersey Residential Market Opportunities
New Jersey Residential Market Opportunities # of Sunlight Advantage Sunlight Advantage provides customers with 25-30 Projects by County percent savings versus current utility rates = Offers are competitive in a very active market Solar panel and inverter prices are projected to decline Significant m
Slide 19: New Jersey Clean Energy Market
New Jersey Clean Energy Market New Jersey legislature passes law to boost renewables markets Y RPS Renewable Portfolio Standard SACP Solar Alternative Compliance Payment Compliance Options Law established Set penalties for (1) Construct requirements for non-compliance solar, (2) purchase Load Servin
Slide 20: Improved SREC Fundamentals
Improved SREC Fundamentals Installations (MW) SREC Prices 300 35 Forward SREC Prices =—=-SACP 800 $350, $350 70.0 $300 $300 600 New SACP $250 from Solar $285 $250 50.0 takes effect en $200 $200 30.0 og $150 20.0 20 | | $100 $100 =20 $50 $70 $50 $0 repeal FESIFE PISS IEEET TFET SSS SPER IL FPF SPP IE
Slide 21: NJRCEV is Proactively Hedging SRECs to Reduce Future Price Volatility
NJRCEV is Proactively Hedging SRECs to Reduce Future Price Volatility 250 214 200 3 a & 150 ‘o 3 § 100 $ 3 2 = 50 te) FY16E FY17E FY18E GHedged W@Expected Generated == Current Generation Pct. Hedged: 95% 66% 48% Average Price: $212 $229 $232 As of March 31, 2016 21
Slide 22: NJR Energy Services
NJR Energy Services = Earnings subject to volatility in natural gas markets = Factors impacting natural gas 3 Months - $17.0 million n markets include: 6 Months - $27.0 million = Firm storage (40 Bcf in the + Weather US and Canada) * Lower FY2Q16 NFE * Record natural gas-fired = Firm transportation
Slide 23: Appendix
APPENDIX
Slide 24: Procedural Schedule of the Office of Administrative Law
Procedural Schedule of the Office of Administrative Law May 20, 2016 NJNG produces its 10+2 Update June 15, 2016 Settlement Conference June 21, 2016 Settlement Conference June 30, 2016 Rate Counsel/Intervenor Pre-Filed Direct Testimony due July 5, 2016 Discovery on Rate Counsel/Intervenor testimony
Slide 25: Recent Rate Case Decisions in NJ
Recent Rate Case Decisions in NJ Overall Weighted Cost Returnon Equity Program/Company __ Filing Date Decision Date of Capital Equity Ratio Programs SAFE 3/20/12 10/23/12 6.90% 9.75% 53.5% NJ RISE 9/3/13 7/23/14 6.74% 9.75% 53.5% SAVEGREEN 12/14/14 7/23/15 6.69% 9.75% 53.3% Base Rate Cases South Jer
Slide 26: Reconciliation to Non-GAAP Measures
Reconciliation to Non-GAAP Measures Areconciliation of NFE for the three- and six- months of fiscal 2016 and 2015, to net income is provided below: ‘Three Months Ended ‘Six Months Ended Mareh 31, Mare 31, (Thousands 2016 201s 2016 2015 Net income S 73657 S 60903 $122,304 184223 Adi Unreatized loss (
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