Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q4 2019 Earnings Presentation
34 slides from Public Service Enterprise's earnings presentation, Feb 26, 2020
Slide 1: PSEG Earnings Conference Call 4th Quarter & Full Year 2019
Public Service Enterprise Group PSEG Earnings Conference Call 4th Quarter & Full Year 2019 February 26, 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: 2019 Q4 and Full Year Review
PSEG 2019 Q4 and Full Year Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q4 and Full Year 2019 Highlights
PSEG Q4 and Full Year 2019 Fourth Quarter and Full Year Highlights Net Income per share of $0.86 in Q4 2019 vs. $0.39 in Q4 2018; Full year Net Income per share of $3.33 in 2019 vs. $2.83 in 2018 Non-GAAP Operating Earnings* per share of $0.64 in Q4 2019 vs. $0.56 in Q4 2018; Full year, non-GA
Slide 6: Q4 Results Summary
PSEG Q4 Results Summary Quarter ended December 31 $ millions (except EPS) 2019 2018 Net Income $ 437 $ 199 Reconciling Items (107) 85 Operating Earnings (non-GAAP)* $ 330 $ 284 EPS from Net Income $ 0.86 $ 0.39 EPS from Operating Earnings (non-GAAP)* $ 0.64 $ 0.56 6 *See Slide A for Items excluded f
Slide 7: Full Year Results
PSEG Full Year Results Twelve Months ended December 31 $ millions (except EPS) 2019 2018 Net Income $ 1,693 $ 1,438 Reconciling Items (27) 144 Operating Earnings (non-GAAP)* $ 1,666 $ 1,582 EPS from Net Income $ 3.33 $ 2.83 EPS from Operating Earnings (non-GAAP)* $ 3.28 $ 3.12 7 *See Slide A for Ite
Slide 8: Regulatory and Policy Objectives
PSEG - Regulatory and Policy Objectives PSEG’s Priorities Aligned with New Jersey’s Clean Energy Agenda NJBPU approved agreement to extend CEF-EE procedural schedule to the end of September 2020 to complete its review; investment in existing programs extended in the interim by $111 million BPU s
Slide 9: Introducing 2020 Guidance
PSEG – Introducing 2020 Guidance Ongoing investment in PSE&G Transmission and Distribution infrastructure drives PSEG earnings growth; midpoint of guidance +4% over 2019 Non-GAAP Operating Earnings* Contribution by Subsidiary 2019 Actual and 2020E Guidance $3.30 - $3.50E $3.28 PSE&G expected to appr
Slide 10: Indicative Annual Dividend – Increased $0.08 to $1.96 per share
PSEG Indicative Annual Dividend – Increased $0.08 to $1.96 per share Building on a 113-year history of returning cash to our shareholders and maintaining financial flexibility PSEG Annual Dividend Rate 5 year rate of compound annual growth: 4.7% $2.00 $1.96* $1.88 $1.80 $1.80 $1.72 $1.64 $1.60 $1.56
Slide 11: 2019 Q4 Operating Company Review
PSEG 2019 Q4 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 12: Q4 Results by Subsidiary
PSEG – Q4 Results by Subsidiary PSEG Q4 EPS Summary – Quarter ended December 31 Net Income / (Loss) 2019 2018 Change PSE&G $ 0.54 $ 0.47 $ 0.07 PSEG Power $ 0.32 $ (0.07) $ 0.39 PSEG Enterprise/Other $ -. $ (0.01) $ 0.01 Total PSEG $ 0.86 $ 0.39 $ 0.47 Non-GAAP Operating Earnings* 2019 2018 Change P
Slide 13: EPS Reconciliation – Q4 2019 versus Q4 2018
PSEG EPS Reconciliation – Q4 2019 versus Q4 2018 $0.90 $0.86 $0.75 0.07 (0.01) 0.02 $0.64 $0.60 $0.56 ZECs 0.06 Lower Taxes Transmission 0.04 Capacity (0.11) $ / share $0.45 Gas Margin 0.02 Re-contracting, Lower Cost to Serve $0.39 Distribution O&M 0.02 0.02 Volume (0.02) $0.30 Distribution Deprecia
Slide 14: Full Year Results by Subsidiary
PSEG – Full Year Results by Subsidiary PSEG Full Year EPS Summary – Twelve Months ended December 31 Net Income/(Loss) 2019 2018 Change PSE&G $ 2.46 $ 2.10 $ 0.36 PSEG Power $ 0.93 $ 0.72 $ 0.21 PSEG Enterprise/Other $ (0.06) $ 0.01 $ (0.07) Total PSEG $ 3.33 $ 2.83 $ 0.50 Non-GAAP Operating Earnings
Slide 15: EPS Reconciliation – FY 2019 versus FY 2018
PSEG EPS Reconciliation – FY 2019 versus FY 2018 0.36 (0.18) $3.50 (0.02) $3.33 $3.28 $3.12 ZECs 0.18 Interest Expense $3.00 $2.83 Transmission 0.17 partially offset by Capacity (0.17) Lower Taxes Gas Margin 0.16 Re-contracting, $2.50 Electric Margin 0.04 Lower Cost to Serve (0.09) Weather (0.02) Vo
Slide 16: PSE&G 2019 Q4 Review
PSE&G 2019 Q4 Review
Slide 17: PSE&G EPS Reconciliation – Q4 2019 versus Q4 2018
PSE&G EPS Reconciliation – Q4 2019 versus Q4 2018 $0.60 0.06 0.01 $0.54 $0.50 $0.47 Distribution O&M 0.02 $0.40 Transmission Distribution 0.04 $ / share Depreciation & Interest $0.30 (0.02) Gas Margin 0.02 Distribution $0.20 Non-Operating Pension/OPEB 0.03 Distribution $0.10 Taxes & Other (0.02) $0.
Slide 18: PSE&G – Q4 & Full Year Weather Summary
PSE&G – Q4 & Full Year Weather Summary Winter Weather Summary (HDD) Monthly Heating Degree Days (HDD) FY 2019 vs. FY 2018 vs. Normal Q4 2019 vs. Q4 2018 vs. Normal 1,000 Summary 4,662 HDD 4,770 2019 800 2018 4,600 Heating Degree Days normal 600 2,000 3,000 4,000 5,000 FY 2019 winter weather was ~2%
Slide 19: PSE&G capital program of $11.5 billion to $15 billion
PSE&G’s capital program of $11.5 billion to $15 billion focused on reliability, resiliency, grid modernization and clean energy investments ~90% of investment receiving contemporaneous PSE&G Capital Spending or near-contemporaneous 3,500 2020E – 2024E regulatory treatment 3,000 2,500 CEF: EE, EC, EV
Slide 20: Rate base compound annual growth of ~6.5% to 8%
Investment program provides opportunity for ~ 6.5% to 8% compound annual growth in rate base PSE&G Year-End Rate Base 35,000 2019 – 2024E 8.0% - 30,000 CEF 6.5% - Identified IIP Extensions 25,000 20,000 ($ Millions) 15,000 10,000 5,000 0 2019 2020E 2021E 2022E 2023E 2024E Transmission Electric Distr
Slide 21: PSE&G – Q4 Highlights
PSE&G – Q4 Highlights Operations Completed replacement of approximately 230 miles of gas main and 16,000 services during 2019, annual methane emissions reduced by approximately 40,000 metric tons of CO2 equivalent Weather-normalized electric and gas sales were each ~1% lower for the year Resid
Slide 22: PSEG Power 2019 Q4 Review
PSEG Power 2019 Q4 Review
Slide 23: Power EPS Reconciliation – Q4 2019 versus Q4 2018
PSEG Power EPS Reconciliation – Q4 2019 versus Q4 2018 $0.35 $0.32 ZECs 0.06 $0.30 $0.25 Capacity (0.11) ~ ~ Re-contracting, Lower Cost to Serve $0.20 0.02 O&M 0.03 Volume (0.02) Taxes & Other 0.01 $0.15 $0.11 (0.05) $0.10 $ / share 0.04 $0.10 $0.05 $0.00 ($0.07) ($0.05) Q4 2018 Q4 2018 Q4 2019 Q4 2
Slide 24: Power – Q4 Generation Measures
PSEG Power – Q4 Generation Measures PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%)* PSEG Power – Fuel Costs* Quarter ended Quarter ended 15,000 14,223 December 31 December 31 13,345 2018 2019 ($ millions) 2018 2019 12,500 Combined Gas*** $ 125 $ 135 50.6% 54.8% 5,300 Cycle** Coal 3
Slide 25: Power – Full Year Generation Measures
PSEG Power – Full Year Generation Measures PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%)* PSEG Power – Fuel Costs* Twelve Months Twelve Months 60,000 55,863 56,856 ended December 31 ended December 31 2018 2019 ($ millions) 2018 2019 50,000 Combined Gas*** $ 450 $ 531 52.0% 52.2% 1
Slide 26: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance ZEC revenues earned for full fourth quarter A scheduled decline in capacity revenues from June 2019 through May 2020; ISO-NE lower capacity prices were partially offset by addition of Bridgeport Harbor 5 Lower cost to serve partially offset re-contracting
Slide 27: Hedging Update
Hedging Update Contracted Energy* 2020 2021 2022 Volume TWh 31 31 31 Nuclear % Hedged 100% 80-85% 30-35% Price $/MWh $37 $36 $36 Volume TWh 19-21 19-21 19-21 Combined Cycle % Hedged 70-75% 0% 0% Price $/MWh $37 $- $- Volume TWh 50-52 50-52 50-52 Total % Hedged 85-90% 45-50% 20-25% Price $/MWh $37 $3
Slide 28: Power – Q4 Highlights
PSEG Power – Q4 Highlights Operations Q4 total output down ~6% primarily due to sale of Keystone and Conemaugh vs Q4 2018 Nuclear fleet achieved a capacity factor of 81.9% in Q4 and 88.7% for full-year 2019 CCGT fleet achieved ~55% capacity factor in Q4; new units operated at capacity factors
Slide 29: PSEG
PSEG
Slide 30: 2020 Guidance - By Subsidiary
PSEG 2020 Guidance - 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)* $1,675 - $1
Slide 31: Financial Highlights
PSEG Financial Highlights Initiating 2020 non-GAAP Operating Earnings guidance of $3.30 - $3.50 per share, up ~4% over 2019 mid-point of guidance Business mix anticipates PSE&G contribution approaches 80% of Operating Earnings in 2020 PSEG’s 5-year capital spending forecast of $12 - $16 billio
Slide 32: Liquidity as of December 31, 2019
PSEG Liquidity as of December 31, 2019 Expiration Total Available Company Facility Date Facility Usage Liquidity ($ Millions) PSE&G 5-year Credit Facility Mar-23 $600 (A) $379 $221 PSEG Money Pool PSEG / PSEG Power 5-year Credit Facilities (PSEG) Mar-23 $1,500 (B) $796 $704 5-year Credit Facilities
Slide 33: Reconciliation of Non-GAAP Operating Earnings
Reconciliation of Non-GAAP Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings (non-GAAP) Reconciliation Three Months Ended Year Ended Reconciling Items December 31, December 31, 2019 2018 2019 2018 ($ millions, Unaudited) Net Income $ 437 $ 199 $ 1,693 $
Slide 34: Reconciliation of Non-GAAP Operating Earnings and 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 Year Ended Reconciling Items December 31, December 31, 2019 2018 2019 2018 ($ millions, Unaudited) Net Income (Loss) $
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