Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q4 2008 Earnings Presentation
33 slides from Public Service Enterprise's earnings presentation, Feb 3, 2009
Slide 1: PSEG Earnings Conference Call 4th Quarter and Year-End 2008
EX-99.1 Public Service Enterprise Group PSEG Earnings Conference Call 4th Quarter and Year-End 2008 February 3, 2009
Slide 2: Forward-Looking Statement
Forward-Looking Statement Readers are cautioned that statements contained in this presentation about our and our subsidiaries’ future performance, including future revenues, earnings, strategies, prospects and all other statements that are not purely historical, are forward-looking statements for pu
Slide 3: GAAP Disclaimer
GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings is a non-GAAP financial measure that differs from Net Income because it excludes the impact of the sale
Slide 4: 2008 Q4 Review
PSEG 2008 Q4 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q4 2008 Earnings Summary
Q4 2008 Earnings Summary Quarter ended December 31, $ millions (except EPS) 2008 2007 Operating Earnings $ 250 $ 272 Asset Sales and Impairments (13) (53) Income from Continuing Operations 237 219 Discontinued Operations (3) 6 Net Income 234 225 EPS from Operating Earnings* $ 0.49 $ 0.53 4 * See pag
Slide 6: Full-year 2008 Earnings Summary
Full-year 2008 Earnings Summary For the year ended December 31, $ millions (except EPS) 2008 2007 Operating Earnings $ 1,487 $ 1,385 Lease Reserves (490) --- Asset Sales and Impairments (14) (60) Income from Continuing Operations 983 1,325 Discontinued Operations, net of tax 205 10 Net Income 1,188
Slide 7: 2008: Answering Challenges – Meeting Objectives
PSEG – 2008: Answering Challenges – Meeting Objectives 2008 earnings within guidance Focused on operational excellence Record generation production Top decile reliability standards maintained at PSE&G Controlling operating and maintenance expenses to meet challenging economic environment Foundation
Slide 8: 2009: Meeting the Challenge
PSEG – 2009: Meeting the Challenge $3.00 – $3.25 $2.92 $2.72 2007 Operating Earnings* 2008 Operating Earnings* 2009 Guidance 7 * See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
Slide 9: 2008 Q4 Operating Company Review
PSEG 2008 Q4 Operating Company Review Tom O’Flynn Executive Vice President and Chief Financial Officer
Slide 10: Q4 Operating Earnings by Subsidiary
Q4 Operating Earnings by Subsidiary Quarter ended December 31, Operating Earnings Earnings per Share $ millions (except EPS) 2008 2007 2008 2007 PSEG Power $ 207 $ 205 $ 0.40 $ 0.40 PSE&G 76 77 0.15 0.15 PSEG Energy Holdings (23) 10 (0.04) 0.02 Enterprise (10) (20) (0.02) (0.04) Operating Earnings*
Slide 11: Full-year 2008 Operating Earnings by Subsidiary
Full-year 2008 Operating Earnings by Subsidiary For the year ended December 31, Operating Earnings Earnings per Share $ millions (except EPS) 2008 2007 2008 2007 PSEG Power $ 1,050 $ 949 $ 2.06 $ 1.86 PSE&G 360 376 0.71 0.74 PSEG Energy Holdings 101 123 0.20 0.24 Enterprise (24) (63) (0.05) (0.12) O
Slide 12: EPS Reconciliation – Q4 2008 versus Q4 2007
PSEG EPS Reconciliation – Q4 2008 versus Q4 2007 0.60 .00 .00 $.53 (.06) Recontracting .02 $.49 Weather .01 and Strong Markets .07 Gas Margin (.01) Texas – MTM (.05); Interest O&M .03 Operations (.02) 0.40 O&M .04 NDT (.10) 2007 Asset Sales Depreciation and Taxes (.04) and Settlements (.03) Lease In
Slide 13: EPS Reconciliation – Full-year 2008 versus Full-year 2007
PSEG EPS Reconciliation – Full-year 2008 versus Full- year 2007 3.00 .20 (.03) (.04) .07 $2.92 $2.72 Margin – Gas, 2007 Asset Sales Interest Recontracting Electric and and Settlements and Strong Transmission (.13) markets .43 (.04) Lease Income (.04) Weather (.01) MTM and BGSS Texas – MTM (.03) .03
Slide 14: Power 2008 Q4 Review
PSEG Power 2008 Q4 Review
Slide 15: Power – Q4 2008 EPS Summary
PSEG Power – Q4 2008 EPS Summary $ millions (except EPS) Q4 2008 Q4 2007 Variance Operating Revenues $ 1,939 $ 1,762 $ 177 Operating Earnings 207 205 2 Income from Continuing Operations/ 207 205 2 Net Income EPS from Operating Earnings* $ 0.40 $ 0.40 --- 14 * See page 32 for Items excluded from Inco
Slide 16: Power EPS Reconciliation – Q4 2008 versus Q4 2007
PSEG Power EPS Reconciliation – Q4 2008 versus Q4 2007 0.50 .07 (.10) $.40 .03 $.40 Recontracting and Strong NDT O&M Markets 0.00 Q4 2007 Q4 2008 operating operating earnings* earnings* 15 * See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
Slide 17: Power – Generation Measures
PSEG Power – Generation Measures PSEG Power – Generation (GWh) Quarter ended December 31, Twelve months ended December 31, 15,000 60,000 55,292 53,197 12,391 12,518 13,090 11,820 2,761 2,516 10,000 40,000 2,642 12,918 13,014 3,089 5,000 20,000 7,360 29,284 6,541 28,363 0 0 2007 2008 2007 2008 Total
Slide 18: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended December 31, Year ended December 31, ($ millions) 2007 2008 ($ millions) 2007 2008 Coal 84 92 Coal 336 423 Oil & Gas 200 192 Oil & Gas 847 1,141 Total Fossil $284 $284 Total Fossil $1,183 $1,564 Nuclear 28 33 Nuclear 122 129 Total Fuel Co
Slide 19: Strong Pricing Supports Margin Improvement
Strong Pricing Supports Margin Improvement PSEG Power Gross Margin* ($/MWh) Quarter ended December 31, Twelve months ended December 31, $60 $60 $57 - $58 $56 $55 $51 $50 $40 $40 2007 2008 2007 2008 2009E 18 *Includes MTM
Slide 20: Power – Q4 Operating Highlights
PSEG Power – Q4 Operating Highlights Operations 4Q output +1%; full-year increase of 3.9% leading to record production. 4Q nuclear capacity factor at 91.3%; full-year at 92.6%. Coal plant availability affected by BET related work. Environmental work at Hudson and Mercer proceeding on schedule; on bu
Slide 21: PSE&G 2008 Q4 Review
PSE&G 2008 Q4 Review
Slide 22: PSE&G – Q4 2008 Earnings Summary
PSE&G – Q4 2008 Earnings Summary $ millions (except EPS) Q4 2008 Q4 2007 Variance Operating Revenues $ 2,288 $ 2,153 $ 135 Operating Expenses Energy Costs 1,545 1,415 130 Operation & Maintenance 345 361 (16) Depreciation & Amortization 140 142 (2) Taxes Other than Income Taxes 35 35 --- Total Operat
Slide 23: PSE&G EPS Reconciliation – Q4 2008 versus Q4 2007
PSE&G EPS Reconciliation – Q4 2008 versus Q4 2007 0.20 (.04) .04 .01 (.01) $.15 $.15 Weather Gas Margin O&M Depreciation and Taxes 0.10 0.00 Q4 2007 Q4 2008 operating operating earnings* earnings* 22 * See page 32 for Items excluded from Income from Continuing Operations to reconcile to Operating Ea
Slide 24: PSE&G – Q4 Operating Highlights
PSE&G – Q4 Operating Highlights Operations Declining economic growth having impact on sales growth. O&M costs remain under control. Focused on containing impact of economic fallout on customers and accounts through support of outreach programs. Regulatory and Market Environment PSE&G filed for NJ BP
Slide 25: Energy Holdings 2008 Q4 Review
PSEG Energy Holdings 2008 Q4 Review
Slide 26: Energy Holdings – Q4 2008 Earnings Summary
PSEG Energy Holdings – Q4 2008 Earnings Summary $ millions (except EPS) Q4 2008 Q4 2007 Variance Operating (Loss) / Earnings ($ 23) $ 10 ($ 33) Asset Sales and Impairments 13 53 (40) Loss from Continuing Operations (36) (43) 7 Discontinued Operations (3) 6 (9) Net Loss (39) (37) (2) EPS from Operati
Slide 27: Energy Holdings EPS Reconciliation – Q4 2008 versus Q4 2007
PSEG Energy Holdings EPS Reconciliation – Q4 2008 versus Q4 2007 0.05 $.02 (.07) 0.00 .01 (.03) .05 -0.05 (.04) Texas - Interest Operations (.02) Expense MTM (.05) (.02) 2007 Asset Sales and -0.10 Settlements Lease Effective Income Tax Rate and Other -0.15 Q4 2007 Q4 2008 operating operating earning
Slide 28: Energy Holdings – Q4 Operating Highlights
PSEG Energy Holdings – Q4 Operating Highlights Operations Texas – 2,000 MW gas-fired combined cycle capacity 1,000 MW Guadalupe facility experienced improved capacity factor and spark spreads. 1,000 MW Odessa facility experienced a reduction in capacity and availability. Spark Spread Production (GWh
Slide 29: PSEG
PSEG
Slide 30: Outlook for Pension Expense
Outlook for Pension Expense January 2009 2008 Actual Estimate** PSE&G $15.0* $80.0* PSEG Power 14.0 76.0 Other 2.0 4.0 TOTAL 31.0 160.0* Discount Rate 6.50% 6.80% 29 * After capitalized amount; pre-tax figure. ** The January 2009 estimate represents an increase from our October 2008 forecast of $110
Slide 31: 2009 Operating Earnings Guidance
2009 Operating Earnings Guidance $ millions (except EPS) 2008A* 2009E PSEG Power $ 1,050 $ 1,210 – $ 1,285 PSE&G $ 360 $ 320 – $ 345 PSEG Energy Holdings $ 101 $ 0 – $ 20 Enterprise ($ 24) ($ 10) – $ 0 Operating Earnings $ 1,487 $ 1,520 – $ 1,650 Earnings per Share $ 2.92 $ 3.00 – $ 3.25 30 * See pa
Slide 32: Liquidity as of December 31, 2008
PSEG Liquidity as of December 31, 2008 Expiration Total Primary Usage at Available Liquidity Company Facility Date Facility Purpose 12/31/2008 12/31/2008 1 PSEG 5-year Credit Facility 12-Dec $1,000 CP Support/Funding/LCs $13 $987 Bilateral Credit Facility 9-Jun $100 CP Support/Funding $0 $100 Uncomm
Slide 33: Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings
Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings For the Quarters Ended For the Twelve Months Ended December 31, December 31, Pro-forma Adjustments, net of tax 2008 2007 2008 2007 Earnings Impact (in Millions) Asset Sales and Impairments: Impairment of PPN $ (
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