Second-Quarter Results May 8, 2020
Forward-Looking Statements & Non-GAAP Measures Forward-Looking Statements Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the This presentation includes the non-GAAP measures, NFE and utility gross margin. As an Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as indicator of the Company’s operating performance, these measures should not be considered an amended, and the Private Securities Litigation Reform Act of 1995. New Jersey Resources alternative to, or more meaningful than, GAAP measures, such as cash flows, net income, Corporation (NJR) cautions readers that the assumptions forming the basis for forward-looking operating income or earnings per share. statements include many factors that are beyond NJR’s ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other market participants. NFE/net financial loss excludes unrealized gains or losses on derivative instruments related to Words such as “anticipates,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” the Company’s unregulated subsidiaries and certain realized gains and losses on derivative “believes,” “should” and similar expressions may identify forward -looking statements and such instruments related to natural gas that has been placed into storage at Energy Services, net of forward- looking statements are made based upon management’s current expectations, applicable tax adjustments, as described below. Volatility associated with the change in value of assumptions and beliefs as of this date concerning future developments and their potential effect these financial and physical commodity contracts is reported in the income statement in the upon NJR. There can be no assurance that future developments will be in accordance with current period. In order to manage its business, NJR views its results without the impacts of the management’s expectations, assumptions and beliefs or that the effect of future developments unrealized gains and losses, and certain realized gains and losses, caused by changes in value on NJR will be those anticipated by management. Forward-looking statements in this of these financial instruments and physical commodity contracts prior to the completion of the presentation include, but are not limited to, certain statements regarding NJR’s NFE guidance for planned transaction because it shows changes in value currently as opposed to when the fiscal 2020, forecasted contribution of business segments to fiscal 2020 NFE, future NJNG planned transaction ultimately is settled. An annual estimated effective tax rate is calculated for customer and utility gross margin growth, future NJR capital expenditures, infrastructure NFE purposes and any necessary quarterly tax adjustment is applied to CEV, as such programs and investments, Clean Energy Ventures’ ITC -eligible projects and demand for adjustment is related to tax credits generated by CEV. residential solar, earnings growth, NJR’s environmental, sustainability and clean energy goals, emissions reduction targets, the New Jersey Transitional Solar Market, the signing and closing of NJNG’s utility gross margin represents the results of revenues less natural gas costs, sales and, NJR's and NJNG's private placement and the related use of proceeds, and the ability to construct other taxes and regulatory rider expenses, which are key components of the Company’s and operate the Adelphia Gateway project, operate the Leaf River Energy Center, and construct operations that move in relation to each other. Natural gas costs, sales and other taxes and the SRL and PennEast pipeline projects, as well as the ongoing COVID-19 pandemic and its regulatory rider expenses are passed through to customers and therefore, have no effect on impact on NJR’s liquidity, business operations, financial condition, results of operations and cash gross margin. flows. Management uses NFE and utility gross margin as supplemental measures to other GAAP results to provide a more complete understanding of the Company’s performance. Management Additional information and factors that could cause actual results to differ materially from NJR’s believes these non- GAAP measures are more reflective of the Company’s business model, expectations are contained in NJR’s filings with the U.S. Securities and Exchange Commission provide transparency to investors and enable period-to-period comparability of financial (SEC), including NJR’s Annual Reports on Form 10 -K and subsequent Quarterly Reports on performance. In providing fiscal 2020 earnings guidance, management is aware that there could Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings, which are available at be differences between reported GAAP earnings and NFE due to matters such as, but not limited the SEC’s web site, https://www.sec.gov. Information included in this presentation is to, the positions of our energy-related derivatives. Management is not able to reasonably representative as of today only and while NJR periodically reassesses material trends and estimate the aggregate impact or significance of these items on reported earnings and therefore uncertainties affecting NJR's results of operations and financial condition in connection with its is not able to provide a reconciliation to the corresponding GAAP equivalent for its operating preparation of management's discussion and analysis of results of operations and financial earnings guidance without unreasonable efforts. For a full discussion of our non-GAAP financial condition contained in its Quarterly and Annual Reports filed with the SEC, NJR does not, by measures, please see NJR’s most recent Form 10 -K, Item 7. This information has been provided including this statement, assume any obligation to review or revise any particular forward-looking pursuant to the requirements of SEC Regulation G. statement referenced herein in light of future events. 1
Table of Contents ▪ New Jersey Resources Overview ▪ New Jersey Natural Gas Overview Agenda ▪ Non-Utility Businesses Overview ▪ Second-Quarter FY 2020 Highlights ▪ Sustainability Review Steve Westhoven ▪ Financial Review ▪ Financial & Liquidity Update Pat Migliaccio ▪ Transaction Overview ▪ Q&A 2
COVID-19 Impacts • Business continuity plans implemented in early March • Approximately 500 employees working remotely Our Team • Only essential workers in the field or office • Following CDC and State guidelines • Customer disconnects temporarily suspended and Our Customers late fees waived and • Energy assistance available for customer bills Communities • Donations for community support (local food banks) • Business operations remain fundamentally unchanged at this time including construction and capital programs • Customer growth is on target but being closely monitored Our Business • No impacts in gas usage – weather normalization and modified decoupling • Sufficient liquidity to meet current obligations 3
Fiscal 2020E Guidance Reaffirming Fiscal 2020 NFE Guidance Range of $2.05 – $2.15* per share 10% - 15% 27% - 32% $2.05 - $2.15 61% - 65% 1% - 2% -5% - 0% NJNG NJR Midstream NJR CEV NJRHS NJRES 4 * A reconciliation from NFE to net income can be found in the Appendix on Slide 21.
NJR Energy Services Results – Challenging Conditions Total Degree Days* in Northeast – December – March (2018 – 2020) 2500 2000 1500 1000 500 Dec Jan Feb Mar Fiscal 2018 Fiscal 2019 Fiscal 2020 Geographic Spreads - TETCO M3 vs. M2** $12 $10 $8 $6 $4 $2 $0 Dec Jan Feb Mar Fiscal 2018 Fiscal 2019 Fiscal 2020 * Source: American Gas Association ** Source: Platts Gas Daily 5
Additional Guidance Detail ($ NFE Per Share) -5% - 0% of NFE $2.15 $ 2.15 Energy ▪ -$0.14 Decrease due to unusually warm Services $0.05 weather and lack of price volatility $2.05 $0.09 $2.05 -$0.14 61% - 65% of NFE NJNG ▪ +$0.09 O&M savings and OPEB 27% - 32% of NFE CEV ▪ +$0.05 Additional ITC safe-harboring (net of reduction in Capex) and lower effective state tax rate 1Q20 NJRES NJNG CEV 2Q20 Guidance Guidance Midpoint Midpoint 6
Recent Results – Regulated Business Natural Gas Storage Added 4,430 new customers in the first ▪ Leaf River operations performing in- six months of FY2020 line with expectations ▪ On track to meet annual growth rate ▪ Steckman Ridge contribution to of 1.8% earnings in-line with historical trends ~38% of capital investments in the first Natural Gas Transmission six months of FY2020 earned near real- ▪ Adelphia Gateway time returns ▪ Northern portion in-service ▪ Working with PA DEP to obtain Construction on SRL continues ▪ Over 70% complete final permits to file for FERC Notice to Proceed IIP still in regulatory review ▪ PennEast ▪ Expect to conclude process in fiscal ▪ Awaiting FERC ruling on phased 2020 in approach ▪ Filed for review with SCOTUS 7
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