Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q4 2013 Earnings Presentation
36 slides from Public Service Enterprise's earnings presentation, Feb 20, 2014
Slide 1: PSEG Earnings Conference Call 4th Quarter & Year-end 2013
EXHIBIT 99.1 Public Service Enterprise Group PSEG Earnings Conference Call 4 th Quarter & Year-end 2013 February 20, 2014
Slide 2: Forward-Looking Statement
Forward-Looking Statement Certain of the matters discussed in this communication about our andour subsidiaries’ • availability of capital and credit at commercially reasonable terms and conditions future performance, including, without limitation, future revenues, earnings, strategies, and our abili
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
Slide 4: 2013 Q4 and Full Year Review
PSEG 2013 Q4 and Full Year Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q4 Earnings Summary – Strong finish to 2013
Q4 Earnings Summary – Strong finish to 2013 Quarter ended December 31 $ millions (except EPS) 2013 2012 Operating Earnings $ 248 $ 207 Reconciling Items, Net of Tax (48) 17 Net Income $ 200 $ 224 EPS from Operating Earnings* $ 0.49 $ 0.41 4 * See Slide 35 for Items excluded from Net Income to reconc
Slide 6: Full-year Earnings Summary – EPS exceeded guidance
Full-year Earnings Summary – EPS exceeded guidance Twelve Months ended December 31 $ millions (except EPS) 2013 2012 Operating Earnings $ 1,309 $ 1,236 Reconciling Items, Net of Tax (66) 39 Net Income $ 1,243 $ 1,275 EPS from Operating Earnings* $ 2.58 $ 2.44 5 * See Slide 35 for Items excluded from
Slide 7: PSEG – 2013 Highlights
PSEG – 2013 Highlights Strong 2013 financial performance – exceeded guidance Achieved operating earnings of $2.58 per share compared to $2.44 per share in 2012, up 5.7% PSE&G posted double digit earnings growth, representing 47% of consolidated operating earnings with the growth in transmission inve
Slide 8: PSE&G Energy Strong Proposal -- Update
PSE&G Energy Strong Proposal -- Update Multi-year, $2.6 Billion Infrastructure Program filed with the NJBPU to strengthen PSE&G’s electric and gas system focusing on hardening and resiliency PSE&G’s Infrastructure proposal includes: Protecting 29 utility installations from severe storms Making the e
Slide 9: Annual Dividend – Increased 2.8%
PSEG Annual Dividend – Increased 2.8% A long history of returning cash to shareholders combined with opportunity for consistent, sustainable growth PSEG Annual Dividend Rate $1.48** 5-year Rate of Growth 2.2% $1.44 $1.42 10-year Rate of Growth 3.0% $1.37 $1.37 $1.33 $1.29 $1.17 $1.14 $1.12 $1.10 200
Slide 10: 2014 Guidance – Building on Success
PSEG 2014 Guidance – Building on Success 2014 guidance reflects increased level of investment, pension savings and assumes normal weather and unit operations $2.55 - $2.75E $2.44 $2.58 2012 Operating Earnings* 2013 Operating Earnings* 2014 Operating Earnings Guidance * See Slide 35 for Items exclude
Slide 11: 2013 Q4 Operating Company Review
PSEG 2013 Q4 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer
Slide 12: Q4 Operating Earnings by Subsidiary
Q4 Operating Earnings by Subsidiary Quarter ended December 31 Operating Earnings Earnings per Share $ millions (except EPS) 2013 2012 2013 2012 PSEG Power $ 115 $ 126 $ 0.23 $ 0.25 PSE&G 144 75 0.29 0.15 PSEG Enterprise/Other (11) 6 (0.03) 0.01 Operating Earnings* $ 248 $ 207 $ 0.49 $ 0.41 11 * See
Slide 13: EPS Reconciliation – Q4 2013 versus Q4 2012
PSEG EPS Reconciliation – Q4 2013 versus Q4 2012 0.60 0.14 (0.04) $0.49 0.50 $0.41 (0.02) Tax Adjustment (0.03) 0.40 Asset Sales Higher Capacity 0.10 and Other (0.01) Transmission 0.04 0.30 Market Pricing and O&M (Distribution) 0.04 Lower Supply Costs 0.02 Taxes 0.04 Higher Volume 0.01 0.20 Lower He
Slide 14: Strong Full-year Operating Earnings Delivered
Strong Full-year Operating Earnings Delivered Twelve Months ended December 31 Operating Earnings Earnings per Share $ millions (except EPS) 2013 2012 2013 2012 PSEG Power $ 710 $ 663 $ 1.40 $ 1.31 PSE&G 612 528 1.21 1.04 PSEG Enterprise/Other (13) 45 (0.03) 0.09 Operating Earnings* $ 1,309 $ 1,236 $
Slide 15: EPS Reconciliation – Full-year 2013 versus Full-year 2012
PSEG EPS Reconciliation – Full-year 2013 versus Full-year 2012 3.00 0.17 0.09 (0.12) $2.58 $2.44 2.50 Higher Capacity 0.34 Transmission 0.14 Absence of Tax 2.00 Market Pricing and Lower Renewables Settlement (0.07) Supply Costs 0.05 and CIP 0.02 Tax Adjustment Gas Send-out and Fixed O&M (Distributio
Slide 16: Power 2013 Q4 Review
PSEG Power 2013 Q4 Review
Slide 17: Power – Q4 EPS Summary
PSEG Power – Q4 EPS Summary $ millions (except EPS) Q4 2013 Q4 2012 Variance Operating Revenues $ 1,245 $ 1,282 $ (37) Operating Earnings $ 115 $ 126 $ (11) Pro Forma Adjustments, (48) (13) (35) Net of Tax** Net Income $ 67 $ 113 $ (46) EPS from Operating Earnings* $ 0.23 $ 0.25 $ (0.02) * See Slide
Slide 18: Power EPS Reconciliation – Q4 2013 versus Q4 2012
PSEG Power EPS Reconciliation – Q4 2013 versus Q4 2012 0.35 0.04 (0.06) 0.30 $0.25 0.25 $0.23 Higher Capacity 0.10 0.20 Higher O&M Market Pricing and (0.08) 0.15 Lower Supply Costs 0.02 Other 0.02 Higher Volume 0.01 0.10 Lower Hedge Pricing (0.09) 0.05 0.00 Q4 2012 Q4 2013 Operating Operating Earnin
Slide 19: Power – Q4 Generation Measures – Volume up 6.2%
PSEG Power – Q4 Generation Measures – Volume up 6.2% PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Quarter ended December 31 Quarter ended December 31 15,000 2012 2013 12,471 Combined Cycle 11,744 3,962 PJM and NY 45.3% 53.1% 3,453 7,500 1,122 1,797 Coal* NJ (Coal/Gas) 1.3% 3.2% 7,
Slide 20: Power – Full-Year Generation Measures – Volume up 1.8%
PSEG Power – Full-Year Generation Measures – Volume up 1.8% PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Twelve months ended December 31 Twelve months ended December 31 60,000 52,511 53,458 2012 2013 50,000 16,961 16,640 Combined Cycle 40,000 PJM and NY 56.5% 56.0% 5,777 7,323 30,
Slide 21: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Twelve months ended Quarter ended December 31 December 31 ($ millions) 2012 2013 ($ millions) 2012 2013 Coal 32.8 47.3 Coal 175.1 188.7 Oil & Gas 117.6 134.9 Oil & Gas 525.5 618.8 Total Fossil 150.4 182.2 Total Fossil 700.6 807.5 Nuclear 50.9 53.6 Nucl
Slide 22: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Margins benefit from higher capacity pricing through mid-2014 Higher year-over-year spot market prices throughout 2013 Lower cost Marcellus gas continued to benefit fuel cost savings in Q4 PSEG Power Gross Margin ($/MWh) Regional Performance Quarter ended Twelve
Slide 23: Market Perspective – 2014 BGS Auction Results
Market Perspective – 2014 BGS Auction Results Full Requirements Component Capacity Markets/RPM Growing Renewable Energy/Transmission Component for Market Risk $95.77 $97.39 $94.30 $92.18 $83.88 Capacity ~ $59 Load shape ~ $47 Transmission ~ $48 ~ $53 ~ $46 Congestion Ancillary services Risk premium
Slide 24: Hedging Update
Hedging Update… Contracted Energy* 2014 2015 2016 Volume TWh 35 35 35 Base Load % Hedged 100% 75-80% 30-35% (Nuclear and Base Load Coal) Price $/MWh $48 $51 $53 Volume TWh 20 19 19 Intermediate Coal, Combined % Hedged 35-40% 0% 0% Cycle, Peaking Price $/MWh $48 $51 $53 Volume TWh 53-55 53-55 53-55 T
Slide 25: Power – Q4 2013 Operating Highlights
PSEG Power – Q4 2013 Operating Highlights Operations Q4 output up 6.2% from Q4 2012, with absence of Sandy outages, strong performance at Salem station and Peach Bottom 2 and Linden CCGT Nuclear capacity factor of 90.3% for 2013; record generation at Salem 2 Major CCGT maintenance at BEC; began CCGT
Slide 26: PSE&G 2013 Q4 Review
PSE&G 2013 Q4 Review
Slide 27: PSE&G – Q4 Earnings Summary
PSE&G – Q4 Earnings Summary $ millions (except EPS) Q4 2013 Q4 2012 Variance Operating Revenues $ 1,571 $ 1,597 $ (26) Operating Expenses Energy Costs 633 779 (146) Operation & Maintenance 435 416 19 Depreciation & Amortization 214 183 31 Taxes Other than Income Taxes 18 26 (8) Total Operating Expen
Slide 28: PSE&G EPS Reconciliation – Q4 2013 versus Q4 2012
PSE&G EPS Reconciliation – Q4 2013 versus Q4 2012 0.35 0.05 $0.29 0.30 0.04 0.25 0.05 Taxes 0.04 0.20 Other 0.01 O&M $0.15 (Distribution) 0.15 Transmission 0.10 Margin 0.04 Demand and 0.05 Weather 0.01 0.00 Q4 2012 Q4 2013 Operating Operating Earnings* Earnings* 27 * See Slide 35 for Items excluded
Slide 29: PSE&G – Q4 Operating Highlights
PSE&G – Q4 Operating Highlights Operations Q4 weather slightly colder vs. Q4 2012 and normal: Heating degree days 5.2% above Q4 2012 and 3.5% higher vs. normal weather Absence of Sandy costs Electric & Gas demand and volume up (weather adjusted) over Q4 2012 Regulatory and Market Environment Constru
Slide 30: Enterprise/Other 2013 Q4 Review
PSEG Enterprise/Other 2013 Q4 Review
Slide 31: Enterprise/Other – Q4 Earnings Summary
PSEG Enterprise/Other – Q4 Earnings Summary $ millions (except EPS) Q4 2013 Q4 2012 Variance Operating Earnings $ (11) $ 6 $ (17) Lease Transaction Activity - 30 (30) Net Income $ (11) $ 36 $ (47) EPS from Operating Earnings* $ (0.03) $ 0.01 $ (0.04) 30 * See Slide 35 for Items excluded from Net Inc
Slide 32: PSEG
PSEG
Slide 33: Financial Highlights
PSEG Financial Highlights Introducing 2014 operating earnings guidance of $2.55 - $2.75 per share Focused on maintaining operating efficiency and customer reliability PSE&G expected to provide over 50% of 2014 operating earnings Energy Strong infrastructure proposal remains under consideration: Firs
Slide 34: 2014 Operating Earnings Guidance - By Subsidiary
PSEG 2014 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2014E 2013 2012 PSE&G $705 – $ 745 $612 $528 PSEG Power $550 – $610 $710 $663 PSEG Enterprise/Other $35 – $40 $(13) $45 Operating Earnings* $1,290 – $1,395 $1,309 $1,236 Earnings per Share $2.55 – $2.75 $2.58 $2.44 33 * Se
Slide 35: Liquidity as of December 31, 2013
PSEG Liquidity as of December 31, 2013 Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Mar-18 $600 1 $73 $527 PSEG / 5-Year Credit Facility (Power) Mar-17 $1,600 $70 $1,530 Power 5-Year Credit Facility (Power) Mar-18 $1,000 2 $0 $1,0
Slide 36: Items Excluded from Net income to Reconcile to Operating Earnings
Items Excluded from Net income to Reconcile to Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Three Months Ended Year Ended Reconciling Items, net of tax December 31, December 31, 2013 2012 2013 2012 (Unaudited) Earnings Impact ($ Millions) Operating Earnings $ 248 $ 207 $ 1,309 $ 1
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