Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q3 2018 Earnings Presentation
33 slides from Public Service Enterprise's earnings presentation, Oct 30, 2018
Slide 1: PSEG Earnings Conference Call 3rd Quarter 2018
Public Service Enterprise Group PSEG Earnings Conference Call 3rd Quarter 2018 October 30, 2018 EXHIBIT 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain of the matters discussed in this presentation 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 “forwa
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: 2018 Q3 Review
PSEG 2018 Q3 Review
Slide 5: Q3 2018 Highlights
PSEG Q3 2018 Highlights Third Quarter Results Net Income per share of $0.81 up 4% vs. $0.78 in Q3 2017 Non-GAAP Operating Earnings* per share of $0.95 up 16% vs. $0.82 in Q3 2017 PSE&G Earnings per share up 10% from growth in T & D investment and weather PSEG Power non-GAAP Operating Earnings* per s
Slide 6: Q3 Results Summary
PSEG Q3 Results Summary Quarter ended September 30 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP). $ millions (except EPS) 2018 2017 Net Income $ 412 $ 395 Reconciling Items 69 22 Operating Earnings (non-GAAP)* $ 481 $ 417 EPS from Net Income $ 0.81 $
Slide 7: Year-to-Date Summary
PSEG Year-to-Date Summary Nine Months ended September 30 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP). $ millions (except EPS) 2018 2017 Net Income $ 1,239 $ 618 Reconciling Items 59 581 Operating Earnings (non-GAAP)* $ 1,298 $ 1,199 EPS from Net Inc
Slide 8: Updating 2018 Full-Year Guidance and Adjusting Subsidiary Contribution Ranges
Growth in utility infrastructure investment and tax reform expected to drive earnings ~6% higher than 2017 PSEG Updating 2018 Full-Year Guidance and Adjusting Subsidiary Contribution Ranges Non-GAAP Operating Earnings* Contribution by Subsidiary 2017 Actual and 2018 Updated Guidance * See Slides A,
Slide 9: 2018 Q3 Operating Company Review
PSEG 2018 Q3 Operating Company Review
Slide 10: PSEG Q3 EPS Summary by Subsidiary
PSEG – Q3 Results by Subsidiary GAAP Net Income/(Loss) 2018 2017 Change PSE&G $ 0.54 $ 0.49 $ 0.05 PSEG Power $ 0.25 $ 0.27 $ (0.02) PSEG Enterprise/Other $ 0.02 $ 0.02 $ - Total PSEG $ 0.81 $ 0.78 $ 0.03 Non-GAAP Operating Earnings* 2018 2017 Change PSE&G $ 0.54 $ 0.49 $ 0.05 PSEG Power $ 0.39 $ 0.
Slide 11: EPS Reconciliation – Q3 2018 versus Q3 2017
PSEG EPS Reconciliation – Q3 2018 versus Q3 2017 *See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP). **Reflects the impact of new accounting guidance effective January 1, 2018 which no longer allows capitalization of non-service components of pension and OP
Slide 12: PSEG YTD EPS Summary by Subsidiary
PSEG – Year-to-Date Results by Subsidiary GAAP Net Income/(Loss) 2018 2017 Change PSE&G $ 1.63 $ 1.49 $ 0.14 PSEG Power $ 0.79 $ (0.26) $ 1.05 PSEG Enterprise/Other $ 0.02 $ (0.01) $ 0.03 Total PSEG $ 2.44 $ 1.22 $ 1.22 Non-GAAP Operating Earnings* 2018 2017 Change PSE&G $ 1.63 $ 1.49 $ 0.14 PSEG Po
Slide 13: EPS Reconciliation – YTD 2018 versus YTD 2017
PSEG EPS Reconciliation – YTD 2018 versus YTD 2017 Transmission 0.08 GSMP & Energy Strong 0.06 Weather 0.04 Volume & Demand 0.02 Distribution O&M (0.04) Pension & OPEB** 0.06 Depreciation, Interest, Taxes & Other (0.08) Capacity 0.10 Re-contracting & Market (0.24) Gas Send-out 0.01 Volumes 0.04 O&M
Slide 14: PSE&G 2018 Q3 Review
PSE&G 2018 Q3 Review
Slide 15: PSE&G EPS Reconciliation – Q3 2018 versus Q3 2017
PSE&G EPS Reconciliation – Q3 2018 versus Q3 2017 *Reflects the impact of new accounting guidance effective January 1, 2018 which no longer allows capitalization of non-service components of pension and OPEB costs and requires the reclassification of these costs below Operating Income. $ / share Tra
Slide 16: PSE&G – Q3 2018 warmer than normal weather
PSE&G – Q3 2018 warmer than normal weather THI 2018 vs. 2017 vs. Normal PSE&G Monthly Weather Summary Monthly Temperature Humidity Index (THI) Q3 2018 temperature-humidity index was ~35% higher than Q3 2017 and ~25% higher than normal Total Hours at 90°F or Higher Q3 2018 total hours at or above 90°
Slide 17: Clean Energy Future
Clean Energy Future Clean Energy Future, totaling ~$3.6 Billion over 6 years, seeks to provide cost-effective and innovative solutions supporting NJ’s clean energy goals Energy Efficiency: Residential and C&I programs to lower energy bills and combat climate change Savings support 2% electric and 0.
Slide 18: Distribution Rate Case Settlement Approved
Distribution Rate Case Settlement Approved Note: ROE= Return on Equity, ARAM = Average Rate Assumption Method New rates become effective November 1, 2018 Bill impact is generally <1% per rate class. Typical residential combined electric & gas customer bills are ~30% lower versus 2008 in nominal doll
Slide 19: PSE&G – Q3 Operating Highlights
PSE&G – Q3 Operating Highlights Q3 2018 electric sales up ~6% on weather that was 35% warmer than Q3 2017 and 25% warmer than normal Weather normalized electric sales were flat for the trailing 12 month period ending September 30 Filed for 2019 FERC Formula Rate increase of approximately $100 millio
Slide 20: Power 2018 Q3 Review
PSEG Power 2018 Q3 Review
Slide 21: Power EPS Reconciliation – Q3 2018 versus Q3 2017
PSEG Power EPS Reconciliation – Q3 2018 versus Q3 2017 *See Slide C for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP) for PSEG Power. $ / share Capacity 0.05 Re-contracting & Market (0.10) Higher Volumes 0.06 O&M (0.01) Depreciation & Interest (0.04) Taxes & Oth
Slide 22: PSEG Power – Q3 Generation Measures
Quarter ended September 30 2017 2018 Combined Cycle 51.0% 68.2% Coal** PA 73.9% 78.6% CT 1.3% 3.1% Nuclear 96.1% 92.7% PSEG Power – Q3 Generation Measures Total Nuclear Total Coal** Natural Gas * Excludes solar and Kalaeloa. ** Includes figures for Pumped Storage. PSEG Power – Generation (GWh)* 13,3
Slide 23: PSEG Power – YTD Generation Measures
Nine Months ended September 30 2017 2018 Combined Cycle 49.3% 52.5% Coal** PA 79.6% 80.2% CT 3.8% 10.1% Nuclear 95.2% 92.9% PSEG Power – YTD Generation Measures Total Nuclear Total Coal** Natural Gas * Excludes solar and Kalaeloa. ** Includes figures for Pumped Storage. PSEG Power – Generation (GWh)
Slide 24: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Quarter ended September 30 Higher gas prices compressed Power’s spark spread Higher generation due to commencement of Keys and Sewaren 7 commercial operation and increased market demand Capacity revenues up vs. Q3 2017 reflecting a step-up in PJM and ISO-NE capa
Slide 25: Hedging Update
Hedging Update Contracted Energy* * Hedge percentages and prices as of September 28, 2018 and reflect revenues of full requirement load deals based on contract price, including renewable energy credits, ancillary, and transmission components but excluding capacity. Hedges include positions with MTM
Slide 26: PSEG Power – Q3 Operating Highlights
2018 expected generation output modestly increased to 54 – 56 TWh on higher market demand Power submitted comments largely supporting PJM’s capacity redesign proposals ZEC public hearings have been completed; Power anticipates submitting applications for its three NJ nuclear units in December Fast-s
Slide 27: PSEG
PSEG
Slide 28: Financial Highlights
PSEG Financial Highlights Updating 2018 (non-GAAP) Operating Earnings guidance to $3.05 - $3.15 per share, and adjusted subsidiary contribution ranges PSEG’s 5-Year capital spending forecast of $14 billion - $17.5 billion over the 2018 - 2022 period, 90% directed at PSE&G capital program PSE&G capit
Slide 29: Updating PSEG 2018 Guidance - By Subsidiary
Updating PSEG 2018 Guidance - By Subsidiary $ millions (except EPS) 2018E 2017 PSE&G $1,055 - $1,070 $963 PSEG Power (non-GAAP)* $465 - $500 $505 PSEG Enterprise/Other $25 - $25 $20 Operating Earnings (non-GAAP)* $1,545 - $1,595 $1,488 Operating EPS (non-GAAP)* $3.05 - $3.15E $2.93 Segment Operating
Slide 30: Liquidity as of September 30, 2018
PSEG Liquidity as of September 30, 2018 * * Letter of Credit will be terminated during the fourth quarter of 2018
Slide 31: Reconciliation of Non-GAAP Operating Earnings A
Reconciliation of Non-GAAP Operating Earnings A Please see slide 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Effective January 1, 2018, unrealized gains (losses) on equity securities are recorded in Net Income instead o
Slide 32: Reconciliation of Non-GAAP Operating Earnings B
Reconciliation of Non-GAAP Operating Earnings B Income tax effect calculated at a combined leveraged lease effective tax rate. Please see slide 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income.
Slide 33: Reconciliation of Non-GAAP Operating Earnings and Non-GAAP Adjusted EBITDA C
Reconciliation of Non-GAAP Operating Earnings and Non-GAAP Adjusted EBITDA C Effective January 1, 2018, unrealized gains (losses) on equity securities are recorded in Net Income instead of Other Comprehensive Income (Loss). Includes the financial impact from positions with forward delivery months. I
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