Public Service Enterprise Group Incorporated · NYSE:PEG

Public Service Enterprise — Q1 2012 Earnings Presentation

31 slides from Public Service Enterprise's earnings presentation, May 2, 2012

  1. Slide 1: PSEG Earnings Conference Call 1st Quarter 2012

    Public Service Enterprise Group PSEG Earnings Conference Call 1st Quarter 2012 May 2, 2012

  2. Slide 2: Forward-Looking Statement

    Forward-Looking Statement Readers are cautioned that statements contained in this presentation about our future performance, including future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical, are forward-looking statements for purposes o

  3. 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 gains or losses associa

  4. Slide 4: 2012 Q1 Review

    PSEG 2012 Q1 Review Ralph Izzo Chairman, President and Chief Executive Officer

  5. Slide 5: Q1 Earnings Summary

    Q1 Earnings Summary Quarter ended March 31 $ millions (except EPS) 2012 2011 Operating Earnings $ 432 $ 431 Reconciling Items, Net of Tax 61 31 Income from Continuing Operations 493 462 Discontinued Operations, Net of Tax - 64 Net Income 493 526 EPS from Operating Earnings* $ 0.85 $ 0.85 4 * See Pag

  6. Slide 6: PSEG – Q1 2012 Highlights

    PSEG – Q1 2012 Highlights  Operating Earnings of $0.85 vs. Q1 2011 of $0.85 per share  Results stronger than expected  Maintaining 2012 earnings guidance of $2.25 - $2.50 per share  A challenging environment; strong production from Nuclear; improved availability of CCGTs and Fossil’s control of

  7. Slide 7: Maintaining 2012 Guidance

    PSEG – Maintaining 2012 Guidance $3.12 $2.74 $2.25 - $2.50E 2010 Operating Earnings* 2011 Operating Earnings* 2012 Guidance 6 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

  8. Slide 8: 2012 Q1 Operating Company Review

    PSEG 2012 Q1 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer

  9. Slide 9: Q1 Operating Earnings by Subsidiary

    Q1 Operating Earnings by Subsidiary Quarter ended March 31 Operating Earnings Earnings per Share $ millions (except EPS) 2012 2011 2012 2011 PSEG Power $ 196 $ 267 $ 0.39 $ 0.53 PSE&G 197 163 0.39 0.32 PSEG Energy 39 1 0.07 0.00 Holdings/Enterprise Operating Earnings* $ 432 $ 431 $ 0.85 $ 0.85 8 * S

  10. Slide 10: EPS Reconciliation – Q1 2012 versus Q1 2011

    PSEG EPS Reconciliation – Q1 2012 versus Q1 2011 1.00 $0.85 (.14) .07 $0.85 .07 0.75 Taxes .08 Lower Pricing and Transmission Formula Lower Lease Rates .03 Income (.01) Lower Volume (.10) $ / share Other Investments .01 0.50 Lower Capacity (.07) Weather (.02) Migration (.04) D&A (.01) O&M .04 O&M (.

  11. Slide 11: Power 2012 Q1 Review

    PSEG Power 2012 Q1 Review

  12. Slide 12: Power – Q1 2012 EPS Summary

    PSEG Power – Q1 2012 EPS Summary $ millions (except EPS) Q1 2012 Q1 2011 Variance Operating Revenues $ 1,561 $ 1,967 $ (406) Operating Earnings 196 267 (71) NDT Funds Related Activity, 5 27 (22) Net of Tax Mark-to-Market, Net of Tax** 52 4 48 Income from Continuing Operations 253 298 (45) Discontinu

  13. Slide 13: Power EPS Reconciliation – Q1 2012 versus Q1 2011

    PSEG Power EPS Reconciliation – Q1 2012 versus Q1 2011 0.60 $0.53 (.21) 0.50 .06 .01 $0.39 0.40 Taxes and $ / share Other 0.30 Lower Pricing and O&M .04 Lower Volume (.10) Financing Lower Capacity Costs .02 0.20 (.07) Migration (.04) 0.10 0.00 Q1 2011 Q1 2012 Operating Operating Earnings* Earnings*

  14. Slide 14: Power – Generation Measures

    PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Quarter ended March 31 Quarter ended March 31 15,000 14,030 13,143 2011 2012 3,790 Nuclear 99% 98% 4,043 Coal 2,312 NJ (Coal/Gas) 29% 2% 1,130 7,500 PA 83% 63% CT 24% 2% Combined Cycle 7,928 7,970 PJM an

  15. Slide 15: Power – Fuel Costs

    PSEG Power – Fuel Costs PSEG Power – Fuel Costs* Quarter ended March 31 ($ millions) 2011 2012 Coal 90 39 Oil & Gas 191 128 Total Fossil 281 167 Nuclear 46 50 Total Fuel Cost 327 217 Total Generation 14,030 13,143 (GWh) $ / MWh 23.31 16.51 * Based on Operating Earnings. 14

  16. Slide 16: Hedging Update

    Hedging Update… Contracted Energy* Apr-Dec 2012 2013 2014 Volume TWh 25 34 34 Base Load % Hedged 100% 85-90% 35-40% (Nuclear and Base Load Coal) Price $/MWh $59 $53 $55 Volume TWh 15-16 18-20 19-21 Intermediate Coal, Combined % Hedged 20-25% 0 0 Cycle, Peaking Price $/MWh $59 Volume TWh 40-41 52-54

  17. Slide 17: Power – Gross Margin Performance

    PSEG Power – Gross Margin Performance  Margins declined with reduction in energy and capacity pricing  Migration volumes in line with expectations, margins influenced by warmer-than-normal weather  Output influenced by weather and compression in dark spreads PSEG Power Gross Margin* ($/MWh) Regio

  18. Slide 18: Power – Q1 2012 Operating Highlights

    PSEG Power – Q1 2012 Operating Highlights Operations  Q1 Output down 6.3% on lower coal dispatch  Capacity factor for PS share of nuclear fleet at 98.2%  Combined cycle output up 8.3%; improvement in equivalent availability factor  O&M reductions at fossil stations in response to market price de

  19. Slide 19: PSE&G 2012 Q1 Review

    PSE&G 2012 Q1 Review

  20. Slide 20: PSE&G – Q1 Earnings Summary

    PSE&G – Q1 Earnings Summary $ millions (except EPS) Q1 2012 Q1 2011 Variance Operating Revenues $ 1,939 $ 2,306 $ (367) Operating Expenses Energy Costs 1,002 1,366 (364) Operation & Maintenance 376 368 8 Depreciation & Amortization 190 179 11 Taxes Other than Income Taxes 29 43 (14) Total Operating

  21. Slide 21: PSE&G EPS Reconciliation – Q1 2012 versus Q1 2011

    PSE&G EPS Reconciliation – Q1 2012 versus Q1 2011 0.40 .06 $0.39 (.03) .04 $0.32 0.30 Transmission Weather (.02) Taxes Formula Rates $ / share .03 D&A (.01) Other O&M (.01) 0.20 Investments .01 Other .01 0.10 0.00 Q1 2011 Q1 2012 Operating Operating Earnings* Earnings* 20 * See Page A for Items excl

  22. Slide 22: PSE&G – Q1 Operating Highlights

    PSE&G – Q1 Operating Highlights Operations  Warmest Q1 on record since 1970  Heating degree days were 21% below normal and Q1 2011  O&M remains under control Regulatory and Market Environment  NPS selected existing path as preferred route for S-R line; Final EIS October 2012  Awaiting BPU decis

  23. Slide 23: Energy Holdings/Enterprise 2012 Q1 Review

    PSEG Energy Holdings/Enterprise 2012 Q1 Review

  24. Slide 24: Energy Holdings/Enterprise – Q1 2012 Earnings Summary

    PSEG Energy Holdings/Enterprise – Q1 2012 Earnings Summary $ millions (except EPS) Q1 2012 Q1 2011 Variance Operating Earnings $ 39 $ 1 38 Lease Related Activity 4 - 4 Net Income 43 1 42 EPS from Operating Earnings* $ 0.07 $ - $ 0.07 23 * See Page A for Items excluded from Income from Continuing Ope

  25. Slide 25: Energy Holdings/Enterprise EPS Reconciliation

    PSEG Energy Holdings/Enterprise EPS Reconciliation – Q1 2012 versus Q1 2011 Taxes .08 0.10 Lower Lease Income (.01) .07 $0.07 $ / share 0.05 $0.00 0.00 Q1 2011 Q1 2012 Operating Operating Earnings* Earnings* 24 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Op

  26. Slide 26: Energy Holdings/Parent – Q1 Operating Highlights

    PSEG Energy Holdings/Parent – Q1 Operating Highlights Financial  Definitive agreement reached with the IRS that settles the tax treatment for challenged lease transactions (LILO/SILO) for all tax years  Settlement reached with the IRS for all federal audit issues for tax years 1997-2006  10-year

  27. Slide 27: PSEG

    PSEG

  28. Slide 28: Financial Highlights

    PSEG Financial Highlights  2012 operating earnings guidance of $2.25 - $2.50 per share  Guidance by operating company  Financial risk associated with LILO/SILO investments eliminated  Financial position strengthened  Dividend increase continues practice of returning cash to shareholders  Debt

  29. Slide 29: 2012 Operating Earnings Guidance - By Subsidiary

    PSEG 2012 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2012E 2011A PSEG Power $575 – $665 $ 845 PSE&G $530 – $560 $ 521 PSEG Energy $35 – $45 $ 23 Holdings/Enterprise Operating Earnings* $1,140 – $1,270 $ 1,389 Earnings per Share $ 2.25 – $ 2.50 $2.74 28 * See Page A for Items

  30. Slide 30: Liquidity as of March 31, 2012

    PSEG Liquidity as of March 31, 2012 Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Apr-16 $600 $29 $571 PSEG / 5-Year Credit Facility (Power) Mar-17 $1,600 $78 $1,522 Power 5-Year Credit Facility (Power) Apr-16 $1,000 $0 $1,000 5-Year Bilateral - Credit Suiss

  31. Slide 31: Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings

    Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Attachment 10 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) For the Three M onths Ended For the Year Ended Pro-forma

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