Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q2 2019 Earnings Presentation
34 slides from Public Service Enterprise's earnings presentation, Jul 30, 2019
Slide 1: PSEG Earnings Conference Call 2nd Quarter 2019
Public Service Enterprise Group PSEG Earnings Conference Call 2nd Quarter 2019 July 30, 2019
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: 2019 Q2 Review
PSEG 2019 Q2 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q2 2019 Second Quarter Highlights
PSEG Q2 2019 Second Quarter Highlights Net Income per share of $0.30 in Q2 2019 vs. $0.53 in Q2 2018 Non-GAAP Operating Earnings* per share of $0.58 in Q2 2019 vs. $0.64 in Q2 2018 PSE&G results benefited from increased investment in utility infrastructure and rate relief PSEG Power results im
Slide 6: Q2 Results Summary
PSEG Q2 Results Summary Quarter ended June 30 $ millions (except EPS) 2019 2018 Net Income $ 153 $ 269 Reconciling Items 141 56 Operating Earnings (non-GAAP)* $ 294 $ 325 EPS from Net Income $ 0.30 $ 0.53 EPS from Operating Earnings (non-GAAP)* $ 0.58 $ 0.64 6 *See Slide A for Items excluded from Ne
Slide 7: First Half Results Summary
PSEG First Half Results Summary Six Months ended June 30 $ millions (except EPS) 2019 2018 Net Income $ 853 $ 827 Reconciling Items (12) (10) Operating Earnings (non-GAAP)* $ 841 $ 817 EPS from Net Income $ 1.68 $ 1.63 EPS from Operating Earnings (non-GAAP)* $ 1.66 $ 1.61 7 *See Slide A for Items ex
Slide 8: Regulatory and Policy Initiative Update
PSEG - Regulatory and Policy Initiative Update ES II Agreement in Principle PSE&G reached an agreement in principle in the ES II infrastructure filing enabling the continuation of increasing resiliency and improving the reliability of NJ’s critical energy infrastructure PSEG’s Priorities Aligned w
Slide 9: Re-affirming 2019 Guidance
PSEG – Re-affirming 2019 Guidance Ongoing investment in utility infrastructure and implementation of 2018’s distribution rate case settlement drive increase in earnings Non-GAAP Operating Earnings* Contribution by Subsidiary 2018 Actual and 2019E Guidance $3.12 $3.15 - $3.35E PSE&G represents approx
Slide 10: 2019 Q2 Operating Company Review
PSEG 2019 Q2 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 11: Q2 Results by Subsidiary
PSEG – Q2 Results by Subsidiary PSEG Q2 EPS Summary – Quarter ended June 30 Net Income/(Loss) 2019 2018 Change PSE&G $ 0.45 $ 0.46 $ (0.01) PSEG Power $ (0.08) $ 0.08 $ (0.16) PSEG Enterprise/Other $ (0.07). $ (0.01) $ (0.06) Total PSEG $ 0.30 $ 0.53 $ (0.23) Non-GAAP Operating Earnings* 2019 2018 C
Slide 12: EPS Reconciliation – Q2 2019 versus Q2 2018
PSEG EPS Reconciliation – Q2 2019 versus Q2 2018 $0.70 $0.64 (0.01) (0.03) (0.02) $0.60 $0.58 Transmission 0.04 $0.53 ZECs 0.05 Gas Margin 0.02 Interest Expense $0.50 Capacity (0.01) & Absence of Weather (0.01) One-Time Re-contracting Investment Distribution O&M & Market (0.03) (0.01) Income $0.40 $
Slide 13: First Half Results by Subsidiary
PSEG – First Half Results by Subsidiary PSEG First Half EPS Summary – Six Months ended June 30 Net Income/(Loss) 2019 2018 Change PSE&G $ 1.24 $ 1.09 $ 0.15 PSEG Power $ 0.51 $ 0.54 $ (0.03) PSEG Enterprise/Other $ (0.07) $ - $ (0.07) Total PSEG $ 1.68 $ 1.63 $ 0.05 Non-GAAP Operating Earnings* 2019
Slide 14: EPS Reconciliation – First Half 2019 versus First Half 2018
PSEG EPS Reconciliation – First Half 2019 versus First Half 2018 $1.80 0.15 (0.07) (0.03) $1.66 $1.68 $1.63 $1.61 ZECs 0.05 $1.50 Interest Expense Transmission 0.07 & Absence of Capacity 0.04 One-Time Gas Margin 0.10 Re-contracting & Investment Market Income Electric Margin 0.01 $1.20 (0.11) Distrib
Slide 15: PSE&G 2019 Q2 Review
PSE&G 2019 Q2 Review
Slide 16: PSE&G EPS Reconciliation – Q2 2019 versus Q2 2018
PSE&G EPS Reconciliation – Q2 2019 versus Q2 2018 $0.60 0.05 (0.06) $0.50 $0.46 $0.45 $0.40 Distribution O&M Transmission 0.04 (0.01) $ / share Gas Margin 0.02 $0.30 Distribution Weather Depreciation & Interest (0.01) (0.02) $0.20 Distribution Non-Operating Pension/OPEB 0.01 $0.10 Distribution Taxes
Slide 17: PSE&G – Q2 Weather Summary
PSE&G – Q2 Weather Summary PSE&G Monthly Weather Summary Q2 2019 vs. Q2 2018 vs. Q2 Normal Monthly Heating Degree Days (HDD) Monthly Temperature Humidity Index (THI) 600 3,500 3,000 2,500 400 2,000 3,009 481 1,500 2,814 2,731 200 350 1,000 303 1,351 500 925 127 126 791 67 2 13 14 182 169 84 0 0 Apri
Slide 18: PSE&G – Q2 Highlights
PSE&G – Q2 Highlights Operations For the trailing 12-months ended June 30, weather-normalized electric & gas sales were flat PSE&G achieved top quartile performance among large utilities in the East in JD Power’s 2019 Electric Utility Residential Customer Satisfaction Study Regulatory and Market E
Slide 19: PSEG Power 2019 Q2 Review
PSEG Power 2019 Q2 Review
Slide 20: Power EPS Reconciliation – Q2 2019 versus Q2 2018
PSEG Power EPS Reconciliation – Q2 2019 versus Q2 2018 $0.20 $0.16 0.00 (0.03) $0.15 $0.13 ZECs 0.05 Capacity (0.01) Depreciation $0.10 Re-contracting & (0.02) $0.08 Market (0.03) Interest Expense $ / share Volume 0.01 (0.02) $0.05 Gas Operations Taxes & Other 0.01 (0.02) $0.00 ($0.05) ($0.08) ($0.1
Slide 21: Power – Q2 Generation Measures
PSEG Power – Q2 Generation Measures PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%)* PSEG Power – Fuel Costs* Quarter ended Quarter ended 15,000 June 30 June 30 13,135 2018 2019 ($ millions) 2018 2019 12,347 12,500 Combined Gas*** $ 68 $ 93 46.3% 46.2% Cycle** 4,804 Coal 33 23 3,578
Slide 22: Power – First Half Generation Measures
PSEG Power – First Half Generation Measures PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%)* PSEG Power – Fuel Costs* Six Months Six Months 30,000 ended June 30 ended June 30 27,230 2018 2019 ($ millions) 2018 2019 25,076 25,000 Combined Gas*** $ 183 $ 250 42.0% 44.9% 9,252 Cycle**
Slide 23: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance ZEC revenues began mid-April Capacity prices decreased on June 1: Average price now $116 MW/day in PJM and $231 MW/day in ISO-NE through May 31, 2020; Bridgeport Harbor 5 capacity locked in at $231 MW/day* for 7 years Re-contracting at lower market price
Slide 24: PJM Capacity Market Summary
PJM Capacity Market Summary PJM’s RPM Auction Results* PJM Capacity Revenue $250 $700 Capacity Price ($/MW-day) Delivery Year 2018/2019 2019/2020 2020/2021 2021/2022 $600 $200 PSEG Power’s $500 $205 $116 $179 $182 Average Prices ($/MW-day) $150 $400 RTO Prices $165/$150 $100/$80 $77 $140 $100 $300 (
Slide 25: Hedging Update
Hedging Update Contracted Energy* Jul - Dec 2019 2020 2021 Volume TWh 16 31 31 Base Load % Hedged 100% 100% 45-50% (Nuclear and Base Load Coal) Price $/MWh $38 $38 $39 Volume TWh 14-16 21-23 21-23 Intermediate, Combined Cycle, % Hedged 75-80% 25-30% 0% Peaking Price $/MWh $38 $38 $- Volume TWh 30-32
Slide 26: Power – Q2 Highlights
PSEG Power – Q2 Highlights Operations Q2 total output up 6% on higher CCGT production with construction program completion Nuclear fleet achieved average capacity factor of 84% in Q2 and 91% for first-half 2019 Nuclear fleet produced 7.1 TWh, down ~3% related to Salem 1 extended outage to repl
Slide 27: PSEG
PSEG
Slide 28: Financial Highlights
PSEG Financial Highlights Re-affirming 2019 non-GAAP Operating Earnings guidance of $3.15 - $3.35 per share Business mix for 2019 guidance reflects approximately 75% of Operating Earnings from our regulated utility PSE&G PSEG’s 5-year capital spending forecast of $13 - $15.5 billion, with over
Slide 29: PSE&G's $12B - $14.5B investment program
PSE&G’s $12B - $14.5B investment program focused on reliability, resiliency, grid modernization and clean energy Over 90% of investment receiving contemporaneous or near-contemporaneous 3,500 PSE&G Capital Spending regulatory treatment 3,000 2,500 CEF 2,000 ($ Millions) 1,500 1,000 500 0 2019E 2020E
Slide 30: Investment program provides ~7.5% - 8.5% compound annual rate base growth
Investment program provides opportunity for ~ 7.5% - 8.5% compound annual rate base growth 35,000 PSE&G Year-End Rate Base 30,000 8.5% - CEF 7.5% - 25,000 20,000 ($ Millions) 15,000 10,000 5,000 0 2018 2019E 2020E 2021E 2022E 2023E Transmission Electric Distribution Gas Distribution Clean Energy Has
Slide 31: 2019 Guidance - By Subsidiary
PSEG 2019 Guidance - By Subsidiary Segment Operating Earnings Guidance and Prior Year Results (non-GAAP, except as noted)* $ millions (except EPS) 2019E 2018 PSE&G (Net Income) $1,200 - $1,230 $1,067 PSEG Power $395 - $460 $502 PSEG Enterprise/Other $5 - $10 $13 Operating Earnings (non-GAAP)* $1,600
Slide 32: Liquidity as of June 30, 2019
PSEG Liquidity as of June 30, 2019 Expiration Total Available Company Facility Date Facility Usage Liquidity ($ Millions) PSE&G 5-year Credit Facility Mar-23 $600 (A) $206 $394 PSEG Money Pool PSEG / PSEG Power 5-year Credit Facilities (PSEG) Mar-23 $1,500 (B) $188 $1,312 5-year Credit Facilities (P
Slide 33: Reconciliation of Non-GAAP Operating Earnings
Reconciliation of Non-GAAP Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings (non-GAAP) Reconciliation Three Months Ended Six Months Ended Year Ended Reconciling Items June 30, June 30, December 31, 2019 2018 2019 2018 2018 ($ millions, Unaudited) Net In
Slide 34: Reconciliation of Non-GAAP Operating Earnings and Non-GAAP Adjusted EBITDA
Reconciliation of Non-GAAP Operating Earnings and Non-GAAP Adjusted EBITDA PSEG Power Operating Earnings (non-GAAP) and Adjusted EBITDA (non-GAAP) Reconciliation Three Months Ended Six Months Ended Year Ended Reconciling Items June 30, June 30, December 31, 2019 2018 2019 2018 2018 ($ millions, Unau
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