Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q3 2015 Earnings Presentation
37 slides from Public Service Enterprise's earnings presentation, Oct 30, 2015
Slide 1: PSEG Earnings Conference Call 3rd Quarter 2015
EXHIBIT 99.1 Public Service Enterprise Group PSEG Earnings Conference Call 3rd Quarter 2015 October 30, 2015
Slide 2: Forward-Looking Statement
Forward-Looking Statement Certain of the matters discussed in this report 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 “forward-look
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: 2015 Q3 Review
PSEG 2015 Q3 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q3 Earnings Summary – Successful Quarter
Q3 Earnings Summary – Successful Quarter Quarter ended September 30 $ millions (except EPS) 2015 2014 Operating Earnings $ 403 $ 393 Reconciling Items, Net of Tax 36 51 Net Income $ 439 $ 444 EPS from Operating Earnings* $ 0.80 $ 0.77 * See Slide A for Items excluded from Net Income to reconcile to
Slide 6: Year to Date Earnings Summary – Strong Growth
Year to Date Earnings Summary – Strong Growth Nine months ended September 30 $ millions (except EPS) 2015 2014 Operating Earnings $ 1,221 $ 1,153 Reconciling Items, Net of Tax 149 (111) Net Income $ 1,370 $ 1,042 EPS from Operating Earnings* $ 2.41 $ 2.27 * See Slide A for Items excluded from Net In
Slide 7: Q3 2015 Highlights
PSEG – Q3 2015 Highlights Operating Earnings of $0.80 vs. $0.77 per share in Q3 2014 Solid results driven by PSE&G’s continuing investment in transmission, weather, and Power’s strong hedging and plant operations Updating full-year operating earnings guidance to $2.85 - $2.95 per share Executing on
Slide 8: Updating Full-Year 2015 Operating Earnings Guidance $2.85 - $2.95E
PSEG – Updating Full-Year 2015 Operating Earnings Guidance Full-year 2015 guidance update reflects the strength of operating results for the first nine months of the year, and assumes normal weather and unit operations $2.85 - $2.95E $2.58 $2.76 2013 Operating Earnings* 2014 Operating Earnings* 2015
Slide 9: 2015 Q3 Operating Company Review
PSEG 2015 Q3 Operating Company Review Daniel Cregg EVP and Chief Financial Officer
Slide 10: Q3 Operating Earnings by Subsidiary
Q3 Operating Earnings by Subsidiary Quarter ended September 30 Operating Earnings Earnings per Share $ millions (except EPS) 2015 2014 2015 2014 PSE&G $ 222 $ 200 $ 0.44 $ 0.39 PSEG Power 170 171 0.33 0.34 PSEG Enterprise/Other 11 22 0.03 0.04 Operating Earnings* $ 403 $ 393 $ 0.80 $ 0.77 9 * See Sl
Slide 11: EPS Reconciliation – Q3 2015 versus Q3 2014
PSEG EPS Reconciliation – Q3 2015 versus Q3 2014 Revenue growth supported EPS increase 1.00 0.05 (0.01) (0.01) $0.77 $0.80 0.75 Re-Contracting Absence of Tax Transmission 0.03 & Lower Settlement Cost to Serve 0.07 0.50 Weather 0.02 Capacity (0.03) Electric Demand & Other Revenue O&M (0.03) 0.01 0.25
Slide 12: Year to Date Operating Earnings by Subsidiary
Year to Date Operating Earnings by Subsidiary Nine months ended September 30 Operating Earnings Earnings per Share $ millions (except EPS) 2015 2014 2015 2014 PSE&G $ 631 $ 565 $ 1.24 $ 1.11 PSEG Power 558 551 1.10 1.09 PSEG Enterprise/Other 32 37 0.07 0.07 Operating Earnings* $ 1,221 $ 1,153 $ 2.41
Slide 13: EPS Reconciliation – YTD 2015 versus YTD 2014
PSEG EPS Reconciliation – YTD 2015 versus YTD 2014 Revenue growth supported EPS increase 2.50 0.13 0.01 $2.41 $2.27 Re-Contracting, Transmission 0.10 Market Pricing, 2.00 and Lower Cost Electric Volume, to Serve 0.22 Weather, Demand and Other Revenue 0.05 Gas Send Out 1.50 and Fixed Cost Gas Volume
Slide 14: PSE&G 2015 Q3 Review
PSE&G 2015 Q3 Review
Slide 15: PSE&G – Q3 Earnings Summary
PSE&G – Q3 Earnings Summary $ millions (except EPS) Q3 2015 Q3 2014 Variance Operating Revenues $ 1,766 $ 1,655 $ 111 Operating Expenses Energy Costs 740 668 72 Operation & Maintenance 391 366 25 Depreciation & Amortization 231 238 (7) Total Operating Expenses 1,362 1,272 90 Operating Earnings / Net
Slide 16: PSE&G EPS Reconciliation – Q3 2015 versus Q3 2014
PSE&G EPS Reconciliation – Q3 2015 versus Q3 2014 Continued reliability investments are a driver of growth 0.50 0.04 (0.01) 0.02 $0.44 $0.39 0.40 Weather Pension and Transmission 0.03 Other O&M 0.30 Electric Demand & Other Revenue 0.01 0.20 0.10 0.00 Q3 2014 Q3 2015 Operating Operating Earnings Earn
Slide 17: PSE&G – Monthly Summer Weather Data
PSE&G – Monthly Summer Weather Data PSE&G Monthly Temperature Humidity Index (THI) 2015 vs. 2014 vs. Normal 7,000 +37.8% Q3 2015 vs. Q3 2014 6,000 +19% Q3 2015 vs. Normal 5,548 5,000 5,253 5,106 4,587 4,540 4,000 3,000 3,397 3,242 2,000 2,101 1,886 1,000 0 July August September 2015 2014 Normal 16
Slide 18: PSE&G – Q3 Operating Highlights
PSE&G – Q3 Operating Highlights Operations Growth in transmission revenues added $0.03 per share over Q3 2014 Q3 electric sales up 7% on weather that was 38% warmer than Q3 2014 and 19% warmer than normal; th Summer 2015 was PSE&G’s 5 warmest on record Weather normalized electric sales advanced 0.8%
Slide 19: PSEG Power 2015 Q3 Review
PSEG Power 2015 Q3 Review
Slide 20: Power – Q3 Earnings Summary
PSEG Power – Q3 Earnings Summary $ millions (except EPS) Q3 2015 Q3 2014 Variance Operating Revenues $ 1,096 $ 1,138 $ (42) Operating Earnings 170 171 (1) Reconciling Items, Net of Tax** 36 51 (15) Net Income 206 222 (16) EPS from Operating Earnings* $ 0.33 $ 0.34 $ (0.01) * See Slide A for Items ex
Slide 21: Power EPS Reconciliation – Q3 2015 versus Q3 2014
PSEG Power EPS Reconciliation – Q3 2015 versus Q3 2014 0.50 0.40 0.04 (0.03) $0.34 (0.02) $0.33 0.30 O&M Re-Contracting Taxes and Lower Cost and to Serve 0.07 Other 0.20 Capacity (0.03) 0.10 0.00 Q3 2014 Q3 2015 Operating Operating Earnings* Earnings* * See Slide A for Items excluded from Income fro
Slide 22: Power’s Adjusted EBITDA – Q3 2015, Year-to-Date and Full-Year Guidance
PSEG Power’s Adjusted EBITDA – Q3 2015, Year-to-Date and Full-Year 2015 Guidance PSEG Power – Adjusted EBITDA* Three Months Nine Months (YTD) Full-Year 2015 Ended September 30, Ended September 30, Guidance ($ in millions) 2015 2014 2015 2014 Low High Operating Earnings** $170 $171 $558 $551 $620 $65
Slide 23: Power – Generation Measures
PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Quarter ended September 30 Quarter ended September 30 14,690 14,718 15,000 2014 2015 Combined Cycle 5,294 5,739 PJM and NY 67.5% 73.4% Coal 1,831 1,192 7,500 NJ (Coal/Gas) 21.5% 3.7% PA 71.8% 65.1% 7,565
Slide 24: Power – Generation Measures
PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Nine Months ended September 30 Nine Months ended September 30 45,000 42,488 41,306 2014 2015 13,058 14,745 Combined Cycle 30,000 PJM and NY 54.7% 64.1% 6,096 4,995 Coal* NJ (Coal/Gas) 18.6% 7.5% 15,000 P
Slide 25: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended Nine months ended September 30 September 30 ($ millions) 2014 2015 ($ millions) 2014 2015 Coal 42 27 Coal 170 139 Oil & Gas 140 94 Oil & Gas 623 423 Total Fossil 182 121 Total Fossil 793 562 Nuclear 53 56 Nuclear 162 162 Total Fuel Cost 2
Slide 26: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Capacity pricing of $168/MW-day similar to Q3 2014 on lower megawatts from HEDD retirements Marcellus production and lack of take away capacity dampened local natural gas and power prices during a warmer-than-normal summer Spark spreads improved Regional Perform
Slide 27: Developing 1,300 MW of new, efficient CCGT capacity in PJM
Developing 1,300 MW of new, efficient CCGT capacity in PJM • Construction of 755 MW Keys Energy Center to begin this Fall on a new, natural gas fired power plant in Maryland (SWMAAC*) at an estimated cost of $825 to $875 million • Power cleared a new 540 MW CCGT unit, Sewaren 7 located in New Jersey
Slide 28: Hedging Update…
Hedging Update… Contracted Energy* Oct-Dec 2015 2016 2017 Volume TWh 9 36 36 Base Load % Hedged 100% 100% 55-60% (Nuclear and Base Load Coal) Price $/MWh $52 $51 $49 Volume TWh 4 19 19 Intermediate Coal, Combined % Hedged 35-40% 0% 0% Cycle, Peaking Price $/MWh $52 - - Volume TWh 12** 55-57 55-57 To
Slide 29: PJM Capacity Market Pricing
PJM Capacity Market Pricing ~98% of Power’s PJM fleet 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
Slide 30: Power – Q3 Operating Highlights
PSEG Power – Q3 Operating Highlights Operations CCGT capacity factor of 73% in Q3, YTD CCGT capacity factor of 64% Nuclear capacity factor of 95% in Q3, YTD nuclear capacity factor of 92% Salem 2 refueling underway; Peach Bottom 3 refueling and uprate began late September Q3 output flat vs. Q3 2014,
Slide 31: PSEG
PSEG
Slide 32: Financial Highlights
PSEG Financial Highlights Updating 2015 operating earnings guidance to $2.85 - $2.95 per share Focused on maintaining operating efficiency and customer reliability PSE&G’s 2015 operating earnings guidance increased to $785 - $805 million versus 2014 operating earnings of $725 million Power’s 2015 op
Slide 33: Robust pipeline of investment opportunities
Robust pipeline of investment opportunities PSEG’s Current 5-Year Capital Spending Program 24% Higher than Prior Period 2010 – 2014: $12.6 Billion 2015E - 2019E*: $15.6 Billion PSE&G Total $9.8B PSE&G Total $11.8B Power Total*** $3.6B Power Total*** $2.7B *INCLUDES ALL PLANNED SPENDING. **ENERGY STR
Slide 34: 2015 Updated Guidance for Operating Income – by Subsidiary and PSEG Power Adjusted EBITDA
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 $785 - $805 $725 PSEG Power $620 - $650 $642 PSEG Enterprise/Other $40 - $45 $33 Operating Earnings* $1,445
Slide 35: Liquidity as of September 30, 2015
PSEG Liquidity as of September 30, 2015 Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Apr-20 $600 (A ) $34 $566 PSEG Money Pool PSEG / Power 5-Year Credit Facility (Power) Apr-19 $1,600 $201 $1,399 5-Year Credit Facility (Power) Ap
Slide 36: Items Excluded from Net Income to Reconcile to Operating Earnings
Items Excluded from Net Income to Reconcile to Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings Reconciliation Three Months Ended Nine Months Ended Year Ended Reconciling Items, net of tax September 30, September 30, December 31, 2015 2014 2015 2014 201
Slide 37: Items Excluded to Reconcile to Operating Earnings and Adjusted EBITDA
Items Excluded from Net Income to Reconcile to Operating Earnings and Adjusted EBITDA PSEG Power Adjusted EBITDA Reconciliation Three Months Ended Nine Months Ended Year Ended Reconciling Items September 30, September 30, December 31, 2015 2014 2015 2014 2014 ($ Millions, Unaudited) Adjusted EBITDA
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