Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q2 2014 Earnings Presentation
32 slides from Public Service Enterprise's earnings presentation, Jul 30, 2014
Slide 1: PSEG Earnings Conference Call Q2 2014
Public Service Enterprise Group PSEG Earnings Conference Call nd Quarter 2014 July 30, 2014 EXHIBIT 99.1
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 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: 2014 Q2 Review
PSEG 2014 Q2 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q2 Earnings Summary
Q2 Earnings Summary $ millions (except EPS) Operating Earnings $ 245 $ 243 Reconciling Items, Net of Tax (33) Net Income $ 212 $ 333 EPS from Operating Earnings* $ 0.49 $ 0.48 Quarter ended June 30 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings.
Slide 6: First Half 2014 Earnings Summary
First Half 2014 Earnings Summary Six months ended June $ millions (except EPS) Operating Earnings Reconciling Items, Net of Tax Net Income EPS from Operating Earnings* $ 760 (162) $ 598 $ 1.50 $ 676 (23) $ 653 $ 1.33 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings
Slide 7: Q2 Highlights
PSEG – Q2 Highlights Earnings on Track Operating earnings of $0.49 vs. $0.48 per share in Q2 2013 Increased earnings contribution from PSE&G’s investment in Transmission Expect 2014 Operating Earnings to be at the upper end of the $2.55 to $2.75 per share guidance range – assuming normal weather and
Slide 8: PSEG 2014 Earnings Guidance at the Upper End of Range
$2.55 - $2.75E PSEG – 2014 Earnings Guidance at the Upper End of Range $2.44 $2.58 2014 guidance reflects increased level of investment, pension savings and assumes normal weather and unit operations for rest of year 2012 Operating Earnings* 2013 Operating Earnings* 2014 Operating Earnings Guidance
Slide 9: 2014 Q2 Operating Company Review
PSEG 2014 Q2 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer
Slide 10: Q2 Operating Earnings by Subsidiary
Q2 Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) PSE&G $ 151 $ 121 $ 0.30 $ 0.24 PSEG Power 0.17 0.24 PSEG Enterprise/Other 0.02 - Operating Earnings* $ 245 $ 243 $ 0.49 $ 0.48 Quarter ended June 30 * See Slide A for Items excluded from Net Income to
Slide 11: PSEG EPS Reconciliation – Q2 2014 versus Q2 2013
$0.48 0.06 0.02 $0.49 (0.07) 0.00 0.10 0.20 0.30 0.40 0.50 0.60 PSEG EPS Reconciliation – Q2 2014 versus Q2 2013 Q2 2014 Operating Earnings* Q2 2013 Operating Earnings* PSEG Power PSE&G Enterprise/ Other Capacity 0.04 Re-Contracting & Market Pricing (0.04) Lower Volume (0.03) O&M (0.04) D&A (0.01) T
Slide 12: First Half Operating Earnings by Subsidiary
First Half Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) PSE&G $ 365 $ 300 $ 0.72 $ 0.59 PSEG Power 0.75 0.74 PSEG Enterprise/Other 0.03 - Operating Earnings* $ 760 $ 676 $ 1.50 $ 1.33 Six months ended June 30 •See Slide A for Items excluded from Net
Slide 13: PSEG EPS Reconciliation – First Half 2014 versus First Half 2013
$1.50 0.03 0.01 0.13 $1.33 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 PSEG EPS Reconciliation – First Half 2014 versus First Half 2013 YTD 2014 Operating Earnings* YTD 2013 Operating Earnings* Capacity 0.15 Re-Contracting & Market Pricing (0.04) Lower Volume (0.01) O&M (0.08) D&A (0.01) PSEG Power Tran
Slide 14: PSE&G 2014 Q2 Review
PSE&G 2014 Q2 Review
Slide 15: PSE&G – Q2 EPS Summary
PSE&G – Q2 EPS Summary $ millions (except EPS) Q2 2014 Q2 2013 Variance Operating Revenues $ 1,435 $ 1,423 $ 12 Operating Expenses (15) (7) - (14) Total Operating Expenses 1,144 1,170 (26) Operating Earnings/Net Income $ 151 $ 121 $ 30 EPS from Operating Earnings/Net Income $ 0.30 $ 0.24 $ 0.06 Ener
Slide 16: PSE&G EPS Reconciliation – Q2 2014 versus Q2 2013
PSE&G EPS Reconciliation – Q2 2014 versus Q2 2013 Q2 2013 Operating Earnings* Q2 2014 Operating Earnings* * Operating Earnings is equal to Net Income. $0.24 0.03 0.03 $0.30 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 Transmission Net Earnings 0.03 Gas Volume & Other Revenue 0.01 Weather (0.01) O&M 0.02
Slide 17: PSE&G – Monthly Summer Weather Data
PSE&G – Monthly Summer Weather Data 2,771 1,242 3,330 3,054 1,200 1,600 2,000 2,400 2,800 3,200 3,600 4,000 April May June Normal 2014 vs. 2013 vs. Normal PSE&G Monthly Temperature Humidity Index (THI) - 26% Q2 2014 vs. Q2 2013 - 15% Q2 2014 vs. Normal
Slide 18: PSE&G – Q2 2014 Operating Highlights
PSE&G – Q2 2014 Operating Highlights Operations PSE&G received final NJBPU approval to invest $1.22 billion in the Energy Strong program PJM deferred a final decision on its recommended solution, to be built by PSE&G, for the Artificial Island project via FERC 1000 competitive bidding process Constr
Slide 19: Power 2014 Q2 Review
PSEG Power 2014 Q2 Review
Slide 20: Power – Q2 EPS Summary
PSEG Power – Q2 EPS Summary $ millions (except EPS) Q2 2014 Q2 2013 Variance Operating Revenues $ 986 $ 1,193 $ (207) Operating Earnings (33) Reconciling Items, Net of Tax** (33) (123) Net Income $ 54 $ 210 $ (156) EPS from Operating Earnings* $ 0.17 $ 0.24 $ (0.07) * See Slide A for Items excluded
Slide 21: PSEG Power EPS Reconciliation – Q2 2014 versus Q2 2013
$0.24 0.01 $0.17 (0.03) (0.05) 0.00 0.05 0.10 0.15 0.20 0.25 0.30 Capacity 0.04 Lower Volume (0.03) Re-Contracting & Market Pricing (0.04) PSEG Power EPS Reconciliation – Q2 2014 versus Q2 2013 Q2 2014 Operating Earnings* Q2 2013 Operating Earnings* O&M (0.04) D&A (0.01) Taxes and Other * See Slide
Slide 22: Power – Q2 2014 Generation Measures
PSEG Power – Q2 2014 Generation Measures 7,147 6,538 4,187 3,788 1,724 1,384 7,000 14,000 Quarter ended June 30 Total Nuclear Total Coal* Oil & Natural Gas Generation by Fuel (GWh)** 12,050 Quarter ended June 30 Combined Cycle PJM and NY 57% 49% Coal* NJ (Coal/Gas) 8% 14% PA 70% 80% CT 3% 4% Nuclear
Slide 23: Power – YTD 2014 Generation Measures
PSEG Power – YTD 2014 Generation Measures 15,284 14,588 7,764 3,590 4,266 8,001 10,000 20,000 30,000 Six Months ended June 30 Total Nuclear Total Coal* Oil & Natural Gas 26,875 26,618 Six Months ended June 30 Combined Cycle PJM and NY 55% 48% Coal* NJ (Coal/Gas) 13% 17% PA 78% 81% CT 19% 38% Nuclear
Slide 24: Power – Fuel Costs
PSEG Power – Fuel Costs Quarter ended June 30 ($ millions) Coal $30 $40 Oil & Gas Total Fossil Nuclear Total Fuel Cost $242 $206 Total Generation (GWh) 12,718 12,050 $ / MWh 19.03 17.10 PSEG Power – Fuel Costs YTD June 30 ($ millions) Coal $96 $127 Oil & Gas Total Fossil Nuclear Total Fuel Cost $544
Slide 25: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance $0 $10 $20 $30 $40 $50 $42 $43 Quarter ended June 30 Weather-driven volatility pushed natural gas and power prices to multi-year highs; Q2 spot prices in PJM peaked in April Decline in average hedge prices Capacity prices reset on June 1 to ~$166/MW-day and rema
Slide 26: Hedging Update
Hedging Update… Contracted Energy* * Hedge percentages and prices as of June 30, 2014. Revenues of full requirement load deals based on contract price, including renewable energy credits, ancillary, and transmission components but excluding capacity. Hedges include positions with MTM accounting trea
Slide 27: Power – Q2 2014 Operating Highlights
PSEG Power – Q2 2014 Operating Highlights Q2 output down 5% due to Linden and Salem 2 outages Advance gas path uprates (~63MW) completed at Linden Output of NJ coal units was 10% coal, 90% gas fueled in Q2; 45% coal, 55% gas for the YTD Operations Financial Regulatory and Market Environment Capacity
Slide 28: PSEG
PSEG
Slide 29: Financial Highlights
PSEG Financial Highlights Maintaining operating earnings guidance of $2.55 - $2.75 per share, expecting results at upper end of the range Focused on maintaining operating efficiency and customer reliability PSE&G expected to grow at double-digit rate in 2014 and provide over 50% of operating earning
Slide 30: 2014 Operating Earnings Guidance - By Subsidiary
PSEG 2014 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2014E 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 $2.44 * See Slide A for
Slide 31: PSEG Liquidity as of June 30, 2014
Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Mar-18 $600 $13 $587 5-Year Credit Facility (Power) Apr-19 $1,600 $114 $1,486 5-Year Credit Facility (Power) Mar-18 $1,000 $0 $1,000 5-Year Bilateral (Power) Sep-15 $100 $100 $0 5-year
Slide 32: Items Excluded to Reconcile to Operating Earnings
A Items Excluded from Net Income to Reconcile to Operating Earnings Please see Slide 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Earnings Impact ($ Millions) Operating Earnings $ $ $ $ 1,309 $ 1,236 $ Gain (Loss) on Nuc
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