Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q2 2020 Earnings Presentation
33 slides from Public Service Enterprise's earnings presentation, Jul 31, 2020
Slide 1: PSEG Earnings Conference Call 2nd Quarter 2020
Public Service Enterprise Group PSEG Earnings Conference Call 2nd Quarter 2020 July 31, 2020
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: Q2 2020 Review
PSEG Q2 2020 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q2 2020 Second Quarter Highlights
PSEG Q2 2020 Second Quarter Highlights Net Income per share of $0.89 in Q2 2020 vs. $0.30 in Q2 2019 Non-GAAP Operating Earnings* per share of $0.79 in Q2 2020 vs. $0.58 in Q2 2019 PSE&G results benefited from ongoing investment in utility infrastructure PSEG Power results benefited from c
Slide 6: PSEG powering New Jersey's response to COVID-19
PSEG powering New Jersey’s response to COVID-19 New Jersey Gradually “Re-Opens” from COVID-19 Stay-at-Home Order On June 9, Governor Murphy lifted the stay-at-home order in effect since March 21, gradually re-opening NJ economy NJ Board of Public Utilities (NJBPU) approved restart of in-home uti
Slide 7: Regulatory and Policy Objectives
PSEG - Regulatory and Policy Objectives State Regulatory Proceedings Continuing Online NJBPU issued an Order on July 2 establishing recovery for COVID-19 impacts NJBPU issued an Order on June 10 establishing broad EE framework for NJ based on stakeholder proceeding NJBPU has commenced an EV st
Slide 8: ESG & Sustainability Summary
ESG & Sustainability Summary ESG Leadership ESG Policies & Goals ESG Recognition & Scores • Clean Energy Future PSE&G’s $3.5B • PSEG is a vocal advocate for an • Named to the Dow Jones proposal for significant investments in economy-wide price on CO2 emissions Sustainability Index North America ener
Slide 9: Re-affirming 2020 Guidance
PSEG – Re-affirming 2020 Guidance Drivers in 2020 include rate base growth, Q1 weather headwinds, impacts of COVID-19 on sales and load, and cost control Non-GAAP Operating Earnings* Contribution by Subsidiary 2019 Actual and 2020E Guidance $3.30 - $3.50E $3.28 $2.58 $2.46 To $2.70 $0.68 $0.81 To $0
Slide 10: Q2 2020 Operating Company Review
PSEG Q2 2020 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) 2020 2019 Change PSE&G $ 0.56 $ 0.45 $ 0.11 PSEG Power $ 0.34 $ (0.08) $ 0.42 PSEG Enterprise/Other $ (0.01) $ (0.07) $ 0.06 Total PSEG $ 0.89 $ 0.30 $ 0.59 Non-GAAP Operating Earnings* 2020 2019 Change P
Slide 12: EPS Reconciliation – Q2 2020 versus Q2 2019
PSEG EPS Reconciliation – Q2 2020 versus Q2 2019 $0.90 $0.89 0.11 (0.01) $0.79 $0.75 0.11 Higher Interest Expense ZECs 0.02 $0.60 $0.58 Capacity (0.07) Transmission 0.05 Re-contracting & Market Gas Margin 0.02 0.03 $0.45 $ / share Weather 0.01 Gas Operations 0.01 Gas Bad Debt (0.01) O&M 0.06 $0.30 D
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) 2020 2019 Change PSE&G $ 1.43 $ 1.24 $ 0.19 PSEG Power $ 0.36 $ 0.51 $ (0.15) PSEG Enterprise/Other $ (0.02) $ (0.07) $ 0.05 Total PSEG $ 1.77 $ 1.68 $ 0.09 Non-GAAP Operating Earnings* 2
Slide 14: EPS Reconciliation – First Half 2020 versus First Half 2019
PSEG EPS Reconciliation – First Half 2020 versus First Half 2019 $2.00 0.19 (0.01) (0.02) $1.82 $1.77 $1.68 $1.66 ZECs 0.09 Higher $1.60 Transmission 0.11 Capacity (0.18) Taxes & Interest Expense Gas Margin 0.06 Re-contracting & Market Gas Bad Debt (0.02) 0.02 $1.20 Weather (0.02) Volume (0.01) $ /
Slide 15: PSE&G Q2 2020 Review
PSE&G Q2 2020 Review
Slide 16: PSE&G EPS Reconciliation – Q2 2020 versus Q2 2019
PSE&G EPS Reconciliation – Q2 2020 versus Q2 2019 $0.60 $0.56 0.04 0.07 $0.45 Distribution $0.45 Depreciation & Interest (0.02) Transmission Distribution 0.05 $ / share Non-Operating $0.30 Gas Margin Pension/OPEB 0.03 0.02 Distribution Weather Taxes & Other 0.01 0.03 $0.15 Gas Bad Debt (0.01) $0.00
Slide 17: PSE&G – Q2 Weather Summary
PSE&G – Q2 Weather Summary PSE&G Monthly Weather Summary Q2 2020 vs. Q2 2019 vs. Normal Monthly Heating Degree Days (HDD) Monthly Temperature Humidity Index (THI) 500 4,000 3,500 400 3,000 300 446 2,500 2,000 3,412 200 358 1,500 3,027 2,814 303 1,000 100 182 127 124 500 791 937 610 3 2 13 169 184 0
Slide 18: PSE&G T&D Margin Allocation
PSE&G T&D Margin Allocation PSE&G 2020E Margin Allocation • Transmission and Residential segments of Distribution expected to contribute 75% of total PSE&G margin • Transmission is fixed with no variable/ volume risk • Distribution margin is ~60% Residential • Significant portion of remaining margin
Slide 19: PSE&G's Clean Energy focus drives top-tier, regulated growth
PSE&G’s Clean Energy focus drives top-tier, regulated growth PSE&G has invested more than PSE&G’s Solar 4 All® program has PSE&G’s Clean Energy Filing developed expands customer access to EE, EV charging, Smart Meters (AMI) and Energy Storage $480M 158MW in Energy Efficiency Programs of solar within
Slide 20: PSE&G – Q2 Highlights
PSE&G – Q2 Highlights Operations Weather-normalized electric sales decreased by 7% in Q2 as an increase in residential sales of 8% was more than offset by a decrease in commercial and industrial sales of 14% For the trailing 12 months ended June 30, weather-normalized electric sales were ~3% low
Slide 21: Power Q2 2020 Review
PSEG Power Q2 2020 Review
Slide 22: Power EPS Reconciliation – Q2 2020 versus Q2 2019
PSEG Power EPS Reconciliation – Q2 2020 versus Q2 2019 $0.35 $0.30 $0.34 ~ ~ $0.25 0.12 $0.24 $0.20 $0.15 $0.13 (0.01) $ / share $0.10 ZECs 0.02 O&M 0.06 Capacity (0.07) Non-Operating Pension/OPEB $0.05 Re-contracting & 0.01 Market 0.03 Taxes & Other 0.05 Gas Operations 0.01 $0.00 ($0.05) ($0.10) ($
Slide 23: 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 12,739 2019 2020 ($ millions) 2019 2020 12,500 Combined Gas*** $ 93 $ 103 46.2% 43.7% Cycle** 4,804 Coal 23 - 10,00
Slide 24: 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 ended Six Months ended 30,000 June 30 June 30 27,230 25,917 2019 2020 ($ millions) 2019 2020 25,000 Combined Gas*** $ 250 $ 196 44.9% 44.3% 9,252 Cycle**
Slide 25: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance ZEC revenues for full second quarter in 2020 vs. beginning in mid-April in 2019 Capacity prices changed June 1: Average price now $168 MW/day in PJM and $195 MW/day in ISO-NE through May 31, 2021; Bridgeport Harbor 5 capacity locked in at $231 MW/day for 7 y
Slide 26: Hedging Update
Hedging Update Contracted Energy* Jul - Dec 2020 2021 2022 Volume TWh 15 31 31 Nuclear % Hedged 100% 100% 45-50% Price $/MWh $36 $35 $35 Volume TWh 8-10 18-20 19-21 Combined Cycle % Hedged 95-100% 5-10% 0% Price $/MWh $36 $35 $- Volume TWh 23-25 49-51 50-52 Total % Hedged 95-100% 65-70% 25-30% Price
Slide 27: Power – Q2 Highlights
PSEG Power – Q2 Highlights Operations Q2 total output down 3% vs Q2 2019 primarily due to sale of Keystone and Conemaugh, partially offset by increased nuclear production Nuclear fleet achieved a capacity factor of 91.9% in Q2, producing 7.8 TWh; nuclear output up 9% vs Q2 2019 Salem 1 extended
Slide 28: PSEG
PSEG
Slide 29: Financial Highlights
PSEG Financial Highlights Re-affirming 2020 non-GAAP Operating Earnings guidance of $3.30 - $3.50 per share reflecting rate base growth, Q1 weather headwinds, impacts of COVID-19 on sales and load, and cost control Business mix anticipates PSE&G contribution approaches 80% of Operating Earnings
Slide 30: 2020 Guidance Re-affirmed - By Subsidiary
PSEG 2020 Guidance Re-affirmed - By Subsidiary Segment Operating Earnings Guidance and Prior Year Results (non-GAAP, except as noted)* $ millions (except EPS) 2020E 2019 PSE&G (Net Income) $1,310 - $1,370 $1,250 PSEG Power $345 - $435 $409 PSEG Enterprise/Other ($5) $7 Operating Earnings (non-GAAP)*
Slide 31: Liquidity as of June 30, 2020
PSEG Liquidity as of June 30, 2020 Expiration Total Available Company Facility Date Facility Usage Liquidity ($ Millions) PSE&G 5-year Credit Facility Mar-24 $600 (A) $17 $583 PSEG Money Pool PSEG / PSEG Power 5-year Credit Facilities (PSEG) Mar-24 $1,500 (B) $408 $1,092 5-year Credit Facilities (PS
Slide 32: Reconciliation of Non-GAAP Operating Earnings
Reconciliation of Non-GAAP Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings (non-GAAP) Reconciliation Three Months Ended Six Months Ended Year Ended Reconciling Items June 30, June 30, December 31, 2020 2019 2020 2019 2019 ($ millions, Unaudited) Net In
Slide 33: 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, 2020 2019 2020 2019 2019 ($ millions, Unau
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