Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Investor Presentation (September 2015)
26 slides from Public Service Enterprise's investor presentation, Sep 17, 2015
Slide 1: Forward-Looking Statement
EXHIBIT 99 Forward-Looking Statement Certainof the matters discussedin this report about our and our subsidiaries'future performance, including,without limitation, future revenues,earnings,strategies,prospects, consequences and all other statementsthat are not purelyhistoricalconstitute“forward-look
Slide 2: GAAP Disclaimer
GAAP Disclaimer PSEG presents Operating Earnings and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in addition to its Income from Continuing Operations/Net Income reported in accordance with accounting principles generally accepted in the United States (GAAP). Oper
Slide 3: Two complementary businesses
Two complementary businesses A stable platform, each with growth opportunities Electric& Gas Delivery Regional Competitive Generation and Transmission Strategy: Investments aligned with public Strategy:Investment program enhances policy and customer needs competitive position with addition of effici
Slide 4: Delivering on commitments and realizing growth
Delivering on commitments and realizing growth • PSE&G:Mid-AtlanticReliabilityAward(13 th consecutiveyear),top ranked amongeastern electric and gas utilities inbusinesscustomer satisfaction Operational • PSEGPower: Recordoutput from combinedcycleunits Excellence • PSEG Long Island:Demonstrated manag
Slide 5: Robust pipeline of investment opportunities
Robust pipeline of investment opportunities supports >20% growth in capital spending over the period PSEG Capital Spending 2010 – 2014: $12.6 Billion 2015E -2019E*: $15.6Billion PSE&G Total PSE&G Total $9.8B $11.8B Power Total*** $2.7B Power Total*** $3.6B *INCLUDESALL PLANNEDSPENDING.**ENERGYSTRONG
Slide 6: Balance sheet strength supports capital allocation
Balance sheet strength supports capital allocation Timeframe Actions taken • Applied $16 billion towards investments and dividends • Improved credit ratings 2010 – 2014: Transformed • Monetized Energy Holdings’ portfolio business mix • Strong balance sheet sustained during period of low power prices
Slide 7: PSE&G's robust capital investment pipeline
PSE&G’srobust capital investment pipeline drives double-digit rate base growth through 2019 PSE&G Capital Projects • Planned capital spend supports high single digit earnings growth at PSE&G through 2017 • Transmission expected to grow to >50% of rate base in 2019 • Seekingto broaden platform to exp
Slide 8: Operating Earnings
Operating Earnings Disciplined investment program and focus on operational excellence have supported growth Operating Earnings* Contribution by Subsidiary Power’sdiverse fuel mix and dispatch flexibility continue to ** generate strong earnings and free cash flow in low price environment ** PSE&G’s i
Slide 9: PSE&G plans to invest $11.8B over the next five years
PSE&Gplans to invest $11.8B over the next five years PSE&G’s Capital Expenditures* 2015-2019E 2010-2014 Major $11.8B Transmission $9.8B Incentive Solar/Energy Projects Efficiency Major 13% 2% Transmission Solar/Energy Incentive Efficiency Projects 10% 24% Distribution 40% Other Distribution Transmis
Slide 10: PSE&G has successfully worked with regulators to develop multiple solutions
PSE&G has successfully worked with regulators to develop multiple solutions for New Jersey’s energy and economic development goals RENEWABLES ENERGY EFFICIENCY DISTRIBUTION creative solutions to install assisting customers with improving electric and gas solar generation controlling energy usage del
Slide 11: Settlement reached on Gas System Modernization Program
Settlement reached on Gas System Modernization Program for ~$900 million over three years • Agreement in principle reached with Staff of the NJBPU and the Division of Rate Counsel • GSMP is the next phase of a long-term, cast iron and unprotected steel replacement strategy • Three-year program with
Slide 12: PSE&G continues to receive contemporaneous/formula rate recovery
PSE&G continues to receive contemporaneous/ formula rate recovery on ~70% of its investment program 2010-2014 PSE&G Capital Spending 2015-2019E PSE&G Capital by Recovery Method by Recovery Method $9.8B $11.8B 24% 28% 56% 57% 20% 15% Clause Recovery Mechanisms FERC Formula Rates Traditional Recovery
Slide 13: PSE&G's 2015 operating earnings
PSE&G’s 2015 operating earnings expected to benefit from increased investment in Transmission PSE&G Operating Earnings* ($ Millions) $760 --$775E** $725 $612 2013 2014 2015 Guidance *SEE SLIDE A FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO OPERATING EARNINGS. E =ESTIMATE. **UPDATED GUIDANCE ON
Slide 14: Power's 2015 operating earnings
Power’s 2015 operating earnings maintain solid performance Power Operating Earnings* ($ Millions) $710 $620 – $680E $642 2015 Observations • Increase in average hedge price for energy helps mitigate reset in capacity price and volume 2013 2014 2015 Guidance * SEE SLIDE A FOR ITEMS EXCLUDED FROM NET
Slide 15: Capacity Market Pricing: ~98% of Power's PJM fleet
~98% of Power’s PJM fleet Capacity Market Pricing: that cleared the 2018/2019 RPM auction met the new CP standards RPM –Auction Results Delivery Year 2015 / 2016* 2016 / 2017*+ 2017 / 2018+ 2018 / 2019 Power’s Average $168 $172 $177 $215 Prices*($/MW-day) RTO Prices $165/$150 $136 $59 $120 ($/MW-day
Slide 16: PSEG 2015 Updated Guidance for Operating Income
PSEG 2015 Updated 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 $760 - $775 $725 PSEG Power $620 - $680 $642 PSEG Enterprise/Other $40 - $45 $33 Operating Earnings* $1,42
Slide 17: PSEG growth spend represents ~75% of total investment
PSEG growth spend represents ~75% of total investment (1) PSEG 2015–2019E Capital Expenditures Maintenance ~$3.8B Planned Growth Investment ~$11.8B ~$15.6B ~$6.8B ~$2.8B ~$2.2B ~$2.2B ~$1.6B Power & Other PSE&G Power PSE&G PSE&G PSEG Maintenance Distribution Growth Distribution Transmission Planned
Slide 18: PSE&G's Capital Program drives double-digit growth in rate base
PSE&G’s Capital Program drives double-digit growth in rate base through 2019 2014 – 2017E Rate Base 2014 – 2019E Rate Base CAGR Growth of ~13% CAGR Growth of ~11% ~$19.2B ~$2.2B ~$16.5B ~$0.5B ~$3.1B ~$9.8B ~$2.0B ~$7.6B ~$11.4B ~$4.5B Transmission ~$9.4B ~$8.9B Distribution ~$6.9B 2014 Rate Base Pl
Slide 19: Continuing our track record of 5 year double digit rate base growth
Continuing our track record of 5 year double digit rate base growth leading to high single-digit growth in earnings through 2017 15% PSE&G 5 Year Rate Base CAGR ~13% ~12% ~11% ~11% ~10% 10% 5% 0% 2010 – 2015E 2011 – 2016E 2012 – 2017E 2013 – 2018E 2014 – 2019E INCLUDES GAS SYSTEM MODERNIZATION PROGR
Slide 20: Utilizing financial strength to issue debt at the parent level
Utilizing financial strength to issue debt at the parent level in support of regulated growth PSEG 2015 -2019E Sources and Uses Power Net Debt Other Cash Flow (2) Shareholder Dividend Power Cash from Ops Power Cash Parent Investment (3) Long-Term Debt PSE&G Cash from Ops(1) PSE&G Cash Investment PSE
Slide 21: Substantial Investment Capacity to pursue additional growth without equity
Substantial Investment Capacity to pursue additional growth without the need for equity* Average Funds from Operations /Debt Total Incremental Investment Capacity 2015 - 2017 through 2017 ($ Billions) $3.0 Power PSEG Estimate ~ 50% ~27% Minimum 30% ~20% Threshold $0.0 Power Parent Total Our incremen
Slide 22: PSEG Summary
PSEG Summary • Continued third year of anticipated positive earnings trend in 2015 with updated operating earnings guidance of $2.80 to $2.95 per share • Continued 5th straight year of expected double digit, 5-year growth in rate base • Anticipated high single digit earnings growth at PSE&G on a thr
Slide 23: PSEG Power's Adjusted EBITDA Q2 2015, YTD and Full-Year 2015 Guidance
PSEG Power’s Adjusted EBITDAQ2- 2015, YTD and Full-Year 2015 Guidance PSEG Power - Adjusted EBITDA* ThreeMonths Six Months (YTD) Full-Year 2015 Ended June 30, Ended June 30, Guidance ($ in millions) 2015 2014 2015 2014 Low High Operating Earnings** $110 $87 $388 $380 $620 $680 Add: Fossil Major Main
Slide 24: Items Excluded from Income from Continuing Operations/Net Income to Reconcile to Operating Earnings
Items Excluded from Income from Continuing Operations/Net Income to Reconcile to Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED For the Year Ended Reconciling Items, net of tax December 31, 2014 2013 2012 2011 2010 2009 Earnings Impact ($ Millions) (Unaudited) Operating Earnings $ 1
Slide 25: 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 PLEASE SEE PAGE 3 FOR AN EXPLANATION OF PSEG’S USE OF OPERATING EARNINGS AND ADJUSTED EBITDA AS NON-GAAP FINANCIAL MEASURES AND HOW THEY DIFFER FROM NET INCOME. B
Slide 26: Items Excluded from Income from Continuing Operations/Net Income to Reconcile to Operating Earnings
Items Excluded from Income from Continuing Operations/Net Income to Reconcile to Operating Earnings PLEASE SEE PAGE 3 FOR AN EXPLANATION OF PSEG’S USE OF OPERATING EARNINGS AS A NON-GAAP FINANCIAL MEASURE AND HOW IT DIFFERS FROM NET INCOME. C
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