NewJersey Resources Corporation · NYSE:NJR
NewJersey Resources — AGA Financial Forum 2007
30 slides from NewJersey Resources's conference presentation, Apr 30, 2007
Slide 1: AGA Financial Forum
AGA Financial Forum April 30, 2007
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: NJR at a Glance
NJR at a Glance NJR at a Glance Ticker Symbol (NYSE): NJR Price Range (52 Weeks) $42.85 - $53.16 Common Shares Outstanding: 27.8 million Market Capitalization: $1.4 billion Annual Dividend Rate: $1.52 Dividend Yield: 2.9 percent Total Assets: $2.4 billion
Slide 4: Consistent Performance
Consistent Performance • New Jersey Resources is a company with … – 15 consecutive years of growth; an industry record – A 5-year average annual return of 13.6 percent – An above average dividend growth rate of 5.6 percent – A strong financial profile (S+P: A+, Moody’s: Aa3) – A market capitalizatio
Slide 5: NJNG Value Drivers
NJNG Value Drivers • Safe and reliable service • Customer growth • Strong financial profile • Regulatory partnerships
Slide 6: 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 7: Strong Customer Growth
Strong Customer Growth Customer growth remains important for future performance
Slide 8: Future Growth Potential
Future Growth Potential Pending Final Conceptual New Customers = 54,838 Non-heat customers Non-gas off main Non-gas on/near main Conversions = 130,965 Sources: Local Planning Boards and NJNG Harte Hanks & A.D. Little Studies Healthy “inventory” for continued customer growth
Slide 9: Incentive Programs
Incentive Programs • Programs in place through October 2007 • Customer bills reduced by about $321 million, or 4 percent, annually since program inception $29 $30 $24 $34 $37 $43 $23
Slide 10: Conservation Incentive Program
Conservation Incentive Program • Approved by the BPU on October 12, 2006 – Outside of traditional rate proceeding – Incentive programs not affected • Stabilizes NJNG gross margin from – Declining usage – Weather • 3-year pilot - effective October 1, 2006 – NJNG protected for all variations in custom
Slide 11: Conservation Incentive Program Provides benefits for multiple stakeholders
Conservation Incentive Program Provides benefits for multiple stakeholders and is a sensible approach within the current environment • Customers – Receive aggressive promotion of energy conservation and efficiency - more ways to save • Regulators – Complementary program to NJ Clean Energy Program –
Slide 12: Conservation Incentive Program
Conservation Incentive Program • NJNG must make two filings on June 1 st – Support for CIP calculation and propose new programs – Annual BGSS filing/ proof of CIP-related BGSS savings • Any price changes need BPU approval – Anticipate October 1, 2007 to be the first implementation date for price cha
Slide 13: Conservation Incentive Program
Conservation Incentive Program • NJNG has also agreed to undertake a comprehensive evaluation of the effectiveness of the initial two years of the pilot program – Evaluation to begin no later than November 1, 2008 – Includes an assessment performed by an independent third-party • By April 1, 2009, N
Slide 14: Key Wholesale Energy Services Drivers
Key Wholesale Energy Services Drivers • People working with physical assets • Leveraging volatility • Managing risk • Access to capital • Customer relationships
Slide 15: NJRES Net Income
NJRES Net Income Wholesale energy services are expected to contribute 40-45 percent of total earnings
Slide 16: Working Capital Volatility
Working Capital Volatility B O R R O W E D I N V E S T E D Working capital volatility requires a strong financial profile
Slide 17: NJRES Asset Base
NJRES Asset Base
Slide 18: Storage Capacity
Storage Capacity • Storage transactions inject natural gas which is immediately hedged for future sale • Capacity is leased for various periods of time • Provides opportunity to capture time spreads – Having storage allows the time spreads to be reset an infinite amount of times
Slide 19: Pipeline Transportation
Pipeline Transportation • Pipeline transportation allows for natural gas to be purchased in one location and sold in another • Transportation is leased for various periods of time • Provides opportunity to capture locational spreads – Having transportation allows the locational spreads to be leverag
Slide 20: Examples of Options from Transportation
Examples of Options from Transportation Supply Transportation Delivered Market Area>------- à Costs-->---- à Costs Price Margin $7.00 $.75 $7.75 $7.80 $.05 $6.90 ------- -------- $7.63 $.07 $9.00 ------- -------- $9.50 $.30
Slide 21: Asset Management
Asset Management • Managing others’ assets – Retain a portion of the value from these assets – Brings additional value to NJRES portfolio • Customers are generators, storage facilities and utilities • We offer portfolio assessment & management, back office support and gas management systems
Slide 22: Steckman Ridge LP
Steckman Ridge LP • 50/50 JV with Spectra Energy • Field is located in Bedford County, PA – Discovered in 2002 – Producing gas since 2003 • Daily production ceased as of December 10, 2006 – Acquired from Pennsylvania General Energy • Convert to a 10+Bcf storage facility • Anticipate services to with
Slide 23: Project Location
Project Location Rockies Supply Gulf Supply LNG LNG Cove Point LNG
Slide 24: Timeline / Next Steps
Timeline / Next Steps Steckman Ridge Purchase Closing Date March 5, 2007 Pre-filing meeting w/ FERC May 2007 Commence Pre-filing Process June 2007 File Application November 2007 Receive FERC Certificate April 2008 Begin Construction June 2008 Steckman Ridge Storage Project In-Service April 2009
Slide 25: NJNG Capital Expenditures
NJNG Capital Expenditures FY 2007 Estimate: $91 million 6Mo FY 2007 Actual: $38.8 million March 31, 2007
Slide 26: Capital Structure
Capital Structure March 31, 2007
Slide 27: Consistent Earnings Growth
Consistent Earnings Growth NJR estimates earnings of $2.95 to $3.05 per basic share in fiscal 2007 * Net of certain items * September 30 March 31
Slide 28: Dividend Growth and Payout Ratio
Dividend Growth and Payout Ratio Dividends per Share Payout Ratio * Effective January 2, 2007 1-year dividend growth rate of 5.6 percent *
Slide 29: Share Repurchase Program
Share Repurchase Program Shares Authorized (millions): 3.5 Shares Repurchased (millions): 3.2 Split-adjusted average cost: $33.44 March 31, 2007 Plan expanded to 3.5 million shares in January 2006
Slide 30: NJR: Quality Performance
NJR: Quality Performance • Growing natural gas distribution business • Disciplined wholesale energy services strategy • Strong regulatory relations • Excellent financial profile • Consistent financial performance March 31, 2007