Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q1 2015 Earnings Presentation
30 slides from Public Service Enterprise's earnings presentation, May 1, 2015
Slide 1: PSEG Earnings Conference Call 1st Quarter 2015
EXHIBIT 99.1 Public Service Enterprise Group PSEG Earnings Conference Call 1 st Quarter 2015 May 1, 2015
Slide 2: Forward-Looking Statement
Forward-Looking Statement Certain of the matters discussed in this report about our and our subsidiaries' future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forward-look
Slide 3: GAAP Disclaimer
GAAP Disclaimer PSEG presents Operating Earnings and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in addition to its Net Income reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings and Adjusted EBITDA
Slide 4: PSEG 2015 Q1 Review
* * * * * * * * * * PSEG 2015 Q1 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q1 Earnings Summary – PSEG Delivers Strong Operating Results
Q1 Earnings Summary – PSEG Delivers Strong Operating Results Quarter ended March 31 $ millions (except EPS) 2015 2014 Operating Earnings $ 529 $ 515 Reconciling Items, Net of Tax 57 (129) Net Income $ 586 $ 386 EPS from Operating Earnings* $ 1.04 $ 1.01 * See Slide A for Items excluded from Net Inco
Slide 6: PSEG – Q1 2015 Highlights
PSEG – Q1 2015 Highlights Strong Operating Earnings Operating earnings of $1.04 per share vs. $1.01 per share in Q1 2014 Power benefited from higher prices on its hedged output, monetization of its gas supply and improved performance from CCGTs Increased earnings contribution from PSE&G’s investment
Slide 7: Maintaining 2015 Guidance $2.75 - $2.95E
PSEG – Maintaining 2015 Guidance 2015 guidance reflects continued increased level of investment, and assumes normal weather and unit operations $2.75 - $2.95E $2.58 $2.76 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. E = Estimate. 6
Slide 8: PSEG 2015 Q1 Operating Company Review
* * * * * * * * * * PSEG 2015 Q1 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer
Slide 9: Q1 Operating Earnings by Subsidiary
Q1 Operating Earnings by Subsidiary Quarter ended March 31 Operating Earnings Earnings per Share $ millions (except EPS) 2015 2014 2015 2014 PSE&G $ 242 $ 214 $ 0.47 $ 0.42 PSEG Power 278 293 0.55 0.58 PSEG Enterprise/Other 9 8 0.02 0.01 Operating Earnings* $ 529 $ 515 $ 1.04 $ 1.01 * See Slide A fo
Slide 10: EPS Reconciliation – Q1 2015 versus Q1 2014
PSEG EPS Reconciliation – Q1 2015 versus Q1 2014 1.10 0.05 (0.03) $1.04 $1.01 0.01 1.00 Interest Income 0.90 Transmission and Earnings 0.03 Capacity (0.09) PSEG 0.80 Long Island Gas Volume & Gas Send-Out 0.04 0.70 Demand 0.01 Higher Pension 0.60 Expense (0.01) Storm Insurance 0.50 Recovery 0.01 Abse
Slide 11: PSE&G 2015 Q1 Review
* * * * * * * * * * PSE&G 2015 Q1 Review
Slide 12: PSE&G – Q1 EPS Summary
PSE&G – Q1 EPS Summary $ millions (except EPS) Q1 2015 Q1 2014 Variance Operating Revenues $ 2,002 $ 2,145 $ (143) Operating Expenses Energy Costs 892 1,045 (153) Operation & Maintenance 412 462 (50) Depreciation & Amortization 247 227 20 Total Operating Expenses 1,551 1,734 (183) Operating Earnings
Slide 13: PSE&G EPS Reconciliation – Q1 2015 versus Q1 2014
PSE&G EPS Reconciliation – Q1 2015 versus Q1 2014 0.50 0.04 0.01 $0.47 $0.42 Storm Insurance 0.40 Transmission Recovery Earnings 0.03 0.30 Gas Volume & Demand 0.01 0.20 0.10 0.00 Q1 2014 Q1 2015 Operating Operating Earnings* Earnings* * Operating Earnings is equal to Net Income. 12
Slide 14: PSE&G – Q1 2015 Operating Highlights
PSE&G – Q1 2015 Operating Highlights Operations Coldest Q1 in over 45 years: Heating degree days were 5.7% above last winter and 25% above normal Weather normalized electric sales: Slight overall improvement of 0.2%, led by the commercial and industrial segment Gas deliveries continue to benefit fro
Slide 15: PSEG Power 2015 Q1 Review
* * * * * * * * * * PSEG Power 2015 Q1 Review
Slide 16: Power – Q1 Earnings Summary
PSEG Power – Q1 Earnings Summary $ millions (except EPS) Q1 2015 Q1 2014 Variance Operating Revenues $ 1,725 $ 1,700 $ 25 Operating Earnings $ 278 $ 293 $ (15) Reconciling Items, Net of Tax* 57 (129) 186 Net Income $ 335 $ 164 $ 171 EPS from Operating Earnings* $ 0.55 $ 0.58 $ (0.03) Adjusted EBITDA
Slide 17: Power EPS Reconciliation – Q1 2015 versus Q1 2014
PSEG Power EPS Reconciliation – Q1 2015 versus Q1 2014 0.70 (0.02) $0.58 (0.01) $0.55 0.60 0.50 Capacity (0.09) Higher 0.40 Pension Expense 0.30 Gas Send-Out 0.04 0.20 Absence of 0.10 Charge 0.03 0.00 Q1 2014 Q1 2015 Operating Operating Earnings* Earnings* * See Slide A for Items excluded from Net I
Slide 18: Power's Q1 2015 and Full-Year 2015 Guidance for Adjusted EBITDA
PSEG Power’s Q1 2015 and Full-Year 2015 Guidance for Adjusted EBITDA PSEG Power - Adjusted EBITDA* Three Months Ended Full-Year 2015 March 31, Guidance ($ in millions) 2015 2014 Low High Operating Earnings** $278 $293 $620 $680 Add: Fossil Major Maintenance, pre-tax 49 58 115 115 Depreciation & Amor
Slide 19: Power – Generation Measures
PSEG Power – Generation Measures Generation by Fuel (GWh)** Fleet Capacity Factors (%) Quarter ended March 31 Quarter ended March 31 15,000 14,565 14,538 2014 2015 3,975 4,177 Combined Cycle PJM and NY 49% 55% 2,541 2,529 Coal* 7,500 NJ (Coal/Gas) 21% 17% PA 83% 91% 8,049 7,832 CT 73% 68% Nuclear 10
Slide 20: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended March 31 ($ millions) 2014 2015 Coal $87 $82 Oil & Gas 365 247 Total Fossil 452 329 Nuclear 62 55 Total Fuel $514 $384 Cost Total Generation 14,565 14,538 (GWh) $ / MWh 35.29 26.41 19
Slide 21: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Hedging profile captured returns amid lower price volatility than in Q1 2014 Q1 spot prices significantly lower across PJM, ISO-NE, and NYISO versus year ago Capacity prices were lower year-over-year Access to lower-cost Marcellus gas continues to benefit spark
Slide 22: Hedging Update
Hedging Update Contracted Energy* Apr-Dec 2015 2016 2017 Volume TWh 26 37 37 Base Load % Hedged 100% 80-85% 40-45% (Nuclear and Base Load Coal) Price $/MWh $52 $51 $52 Volume TWh 17 20 20 Intermediate Coal, Combined % Hedged 30-35% 0% 0% Cycle, Peaking Price $/MWh $52 -- -- Volume TWh 41-43 55-57 55
Slide 23: Power – Q1 Operating Highlights
PSEG Power – Q1 Operating Highlights Operations Q1 output flat with Q1 2014 at 14.5 GWh Nuclear fleet’s capacity factor at 95% CCGT production up 16% to 3.9 TWh on improved availability at Linden Regulatory and Market Environment PJM’s Capacity Performance (CP) proposal pending at FERC FERC granted
Slide 24: PSEG
* * * * * * * * * * * PSEG
Slide 25: Financial Highlights
PSEG Financial Highlights Maintaining 2015 operating earnings guidance of $2.75 - $2.95 per share Focused on maintaining operating efficiency and customer reliability PSE&G expected to contribute over 50% of 2015 operating earnings Infrastructure Spend PSE&G T&D spend for 2015 expected to be $2.6 bi
Slide 26: Sandy-related insurance settlement proceeds
PSEG Sandy-related insurance settlement proceeds ($ millions, pre-tax) Pre-2015 Q1 2015 Q2 2015E Total PSEG Power $44 $133 TBD TBD PSE&G 6 26** TBD TBD PSEG $50* $159 ~$54*** ~$264 * PSE&G received $6 million of insurance settlement proceeds in Q4 2012. Power received $19 million and $25 million of
Slide 27: 2015 Guidance for Operating Income – by Subsidiary and PSEG Power Adjusted EBITDA
PSEG 2015 Guidance for Operating Income – by Subsidiary and PSEG Power Adjusted EBITDA Anticipates Another Year of Growth in Operating Earnings $ millions (except EPS) 2015E 2014 PSE&G $735 - $775 $725 PSEG Power $620 - $680 $642 PSEG Enterprise/Other $40 - $45 $33 Operating Earnings* $1,395 - $1,50
Slide 28: Liquidity as of March 31, 2015
PSEG Liquidity as of March 31, 2015 Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Mar-18 $600 (A,C) $14 $586 PSEG / 5-Year Credit Facility (Power) Apr-19 $1,600 $178 $1,422 Power 5-Year Credit Facility (Power) Mar-18 $1,000 (A,D) $
Slide 29: Items Excluded from Net Income to Reconcile to Operating Earnings
Items Excluded from Net Income to Reconcile to Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings Reconciliation Three Months Ended Year Ended Reconciling Items, net of tax March 31, December 31, 2015 2014 2014 2013 ($ Millions, Unaudited) Operating Earni
Slide 30: Items Excluded from Net Income to Reconcile to Operating Earnings and Adjusted EBITDA
Items Excluded from Net Income to Reconcile to Operating Earnings and Adjusted EBITDA PSEG Power Adjusted EBITDA Reconcilation Three Months Ended Year Ended Reconciling Items March 31, December 31, 2015 2014 2014 ($ Millions, Unaudited) Adjusted EBITDA $ 626 $ 651 $ 1,584 Fossil Major Maintenance, p
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