NewJersey Resources Corporation · NYSE:NJR
NewJersey Resources — Q1 2017 Earnings Presentation
21 slides from NewJersey Resources's earnings presentation, Feb 8, 2017
Slide 1: First Quarter Fiscal 2017 Update
First Quarter Fiscal 2017 Update February 8, 2017
Slide 2: Regarding Forward Looking Statements
2 Regarding Forward Looking Statements Certain statements contained in this presentation are 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 Litigation R
Slide 3: Disclaimer Regarding Non-GAAP Financial Measures
3 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 i
Slide 4: Long-Term Average Annual NFE Growth Target Remains 9 Percent
4 Our Long-Term Average Annual NFE Growth Target Remains 5 to 9 Percent New Jersey Natural Gas NJR Midstream NJR Energy Services NJR Home ServicesNJR Clean Energy Ventures *A reconciliation from NFE to net income is set forth in the Appendix on Slide 19. Reaffirming Fiscal 2017 NFE Guidance: $1.65 t
Slide 5: Fiscal First Quarter 2017 Results
5 Fiscal First Quarter 2017 Results Net Financial Earnings* ($MM) Three Months Ended December 31, Company 2016 2015 Variance New Jersey Natural Gas $30.3 $30.9 $(.6) NJR Midstream 2.4 2.3 .1 Subtotal 32.7 33.2 (.5) NJR Clean Energy Ventures 2.8 7.7 (4.9) NJR Energy Services 3.5 10.3 (6.8) NJR Home S
Slide 6: Change in Net Financial Earnings
6 Change in Net Financial Earnings -$6.5 -$2.5 -$.6 $40.4 $51.3 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 $55.0 December 31, 2015 Lower NJRES Financial Margin Higher Tax Expense/Lower Tax Credits SREC Monitization Timing NJNG/Other December 31, 2016 M ill io n s -$1.3 *A reconciliation from NFE to n
Slide 7: Our Path to Achieving Fiscal 2017 Guidance
7 Our Path to Achieving Fiscal 2017 Guidance New Jersey Resources NFE Per Share September 30, 2016 $1.61 NJNG Distribution Margin $.25 BGSS Margin (.03) Depreciation/O&M/Interest (.09) .13 NJRCEV Revenue $.09 Depreciation/O&M/Interest (.15) ITC .03 PTC .04 .01 NJRES (.08) NJR Midstream .02 Other .01
Slide 8: NJNG Capital Investment December 31, 2016 Update
8 NJNG Capital Investment December 31, 2016 Update CAPITAL INVESTMENT ($MM) 1Q 2017E STATUS NJNG 11 Customer Growth $8.9 $33.3 Added 1,866 customers in FY1Q2017; on target to add 8,300customers in FY2017 Maintenance 7.4 41.4 Capital spending on track to enhance system safety and reliability Cost of
Slide 9: NJRCEV Capital Investment December 31, 2016 Update
9 NJRCEV Capital Investment December 31, 2016 Update CAPITAL INVESTMENT ($MM) 1Q 2017E STATUS NJRCEV 11 Commercial Solar - $65.3 Brick Board of Education (BOE) 2.5 MW project under construction. Three other projects totaling 24.4 MW planned for FY2017. Residential Solar $8.3 35.4 Added 314 new custo
Slide 10: Effects of Hypothetical Corporate Tax Rate Reduction on NJR
10 Effects of Hypothetical Corporate Tax Rate Reduction on NJR Income Statement EPS Impact NJNG net income* Flat Non-regulated net income Annual Increase Revaluation of net deferred tax liabilities, non-regulated One-Time Increase Balance Sheet Balance Sheet Impact Equity (Impact of one-time revalua
Slide 11: Our Growth Strategy
11 Our Growth Strategy • Strong natural gas fundamentals drive infrastructure and energy services opportunities • Clean energy benefits the environment and provides new investment opportunities • Energy efficiency is the most cost-effective option for improving the environment and lowering customers
Slide 12: Natural Gas: The Foundation of Our Business
12 Natural Gas: The Foundation of Our Business • NJNG is a growing, regulated natural gas distribution business that anchors our portfolio • Geographic and demographic advantages provide a solid foundation for growth • Infrastructure investments enhance safety and reliability for customers • Regulat
Slide 13: PennEast Pipeline Project
13 PennEast Pipeline Project Description • 20 percent ownership in 120-mile transmission pipeline connecting Marcellus shale region supply to Northeast Project Importance • Demand pull project with capacity of up to 1.1 MMdth/day • Nearly fully subscribed by 12 shippers; 72 percent LDCs in Mid-Atlan
Slide 14: Clean Energy Update
14 Clean Energy Update Commercial Solar • Roof- and ground-mounted installations, both grid-connected and net-metered • 27 projects in service • 104.2 MW Residential Solar - The Sunlight Advantage® • Approximately 5,400 customers added since inception • 48.2 MW Onshore Wind • Five projects in servic
Slide 15: SREC Hedging Strategy Stabilizes Income
15 SREC Hedging Strategy Stabilizes Income Pct. Hedged: 96% 96% 65% Average Price: $229 $229 $203 Current Price (EY): $249 $222 $176 As of January 31, 2017. Source: InterContinental Exchange (ICE) 175 176 120 - 30 60 90 120 150 180 210 EY17 EY18 EY19 Th ousa n ds of SR EC s Energy Year - Operational
Slide 16: The Value of Energy Efficiency
16 • Using less energy is the best alternative for improving the environment • Energy efficiency benefits all stakeholders, including customers and investors • Conserve to Preserve® enables us to encourage customers to use less • The SAVEGREEN Project® offers customers incentives to invest in energy
Slide 17: We are all together
we are ALL TOGETHER
Slide 18: Appendix
18 APPENDIX
Slide 19: Reconciliation to Non-GAAP Measures
19 Reconciliation to Non-GAAP Measures A reconciliation of NFE for the three months ended December 31, 2016 and 2015 to net income is provided below: Three Months Ended December 31, (Thousands) 2016 2015 Net income $ 34,929 $ 50,282 Add: Unrealized loss (gain) on derivative instruments and related t
Slide 20: Customer Growth Continues
20 Customer Growth Continues • FY1Q 2017: 1,866 new customers added • 1,091 new construction • 775 conversions • FY2017-2019: 55/45 new construction and conversion mix • Margin impact: Residential customers contribute 70 percent of utility gross margin 1,866 2,046 8,170 8,300 8,450 8,600 0 1,000 2,0
Slide 21: SREC Hedging Strategy Stabilizes Income - Expected Generation Basis
21 SREC Hedging Strategy Stabilizes Income - On an Expected Generation and Fiscal Year Basis Pct. Hedged: 96% 74% 35% Average Price: $230 $222 $207 Current Price (EY): $249 $222 $176 As of January 31, 2017. Source: InterContinental Exchange (ICE) 180 171 87 187 232 246 - 50 100 150 200 250 300 FY17E