Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q2 2017 Earnings Presentation
32 slides from Public Service Enterprise's earnings presentation, Jul 28, 2017
Slide 1: PSEG Earnings Conference Call Q2 2017
EXHIBIT 99.1 Public Service Enterprise Group PSEG Earnings Conference Call nd 2 Quarter 2017 July 28, 2017
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: 2017 Q2 Review
PSEG 2017 Q2 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q2 2017 – Solid financial results at both businesses
PSEG Q2 2017 – Solid financial results at both businesses Second Quarter Highlights Net Income of $0.22 vs. Net Income of $0.37 per share in Q2 2016, reflecting Hudson & Mercer retirements Non-GAAP Operating Earnings* of $0.62 vs. $0.57 per share in Q2 2016 PSE&G achieved 17% growth in Q2 earnings p
Slide 6: Q2 Summary – GAAP EPS decline reflects Hudson & Mercer retirements
PSEG Q2 Summary – GAAP EPS decline reflects Hudson & Mercer retirements Quarter ended June 30 $ millions (except EPS) 2017 2016 Change Net Income $ 109 $ 187 $ (78) Reconciling Items 207 102 105 Operating Earnings (non-GAAP)* $ 316 $ 289 $ 27 EPS from Net Income $ 0.22 $ 0.37 $ (0.15) EPS from Opera
Slide 7: First Half Summary – GAAP EPS decline reflects Hudson & Mercer retirements
PSEG First Half Summary – GAAP EPS decline reflects Hudson & Mercer June 1 retirements Six Months ended June 30 $ millions (except EPS) 2017 2016 Change Net Income $ 223 $ 658 $ (435) Reconciling Items 559 94 465 Operating Earnings (non-GAAP)* $ 782 $ 752 $ 30 EPS from Net Income $ 0.44 $ 1.30 $ (0.
Slide 8: PSE&G – BPU Proposal to Incentivize Investment
PSE&G – BPU Proposal to Incentivize Investment Infrastructure Investment Program (IIP) The BPU on June 30 proposed changes in regulation that would: Encourage and support accelerated utility investment Support system safety, reliability, resiliency and sustained economic growth in NJ Support acceler
Slide 9: Maintaining 2017 Non-GAAP Earnings Guidance
PSEG - Maintaining 2017 Non-GAAP Earnings Guidance Growth in utility infrastructure investment drives increased growth in regulated earnings contribution Non-GAAP Operating Earnings* Contribution by Subsidiary and 2017 Guidance $2.90 $2.80 - $3.00E 35% 32% 60% 66% 2016 2017E** PSE&G Power Enterprise
Slide 10: 2017 Q2 Operating Company Review
PSEG 2017 Q2 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 GAAP Net Income/(Loss) 2017 2016 Change PSE&G $ 0.41 $ 0.35 $ 0.06 PSEG Power $ (0.19) $ (0.02) $ (0.17) PSEG Enterprise/Other $ 0.00 $ 0.04 $ (0.04) Total PSEG $ 0.22 $ 0.37 $ (0.15) Non-GAAP Operating Earnings* 2017 2016 C
Slide 12: EPS Reconciliation – Q2 2017 versus Q2 2016
PSEG EPS Reconciliation – Q2 2017 versus Q2 2016 Utility investment and cost control drove Q2 results $0.80 $0.70 0.06 0.01 (0.02) $0.62 $0.60 $0.57 Capacity 0.01 Interest $0.50 Transmission 0.04 Expense $0.40 $0.37 Higher Volume 0.01 and Electric and Taxes $0.30 Gas Margin Recontracting $0.22 0.02
Slide 13: First Half Results by Subsidiary
PSEG – First Half Results by Subsidiary PSEG First Half EPS Summary – Six months ended June 30 GAAP Net Income/(Loss) 2017 2016 Change PSE&G $ 1.00 $ 0.87 $ 0.13 PSEG Power $ (0.53) $ 0.36 $ (0.89) PSEG Enterprise/Other $ (0.03) $ 0.07 $ (0.10) Total PSEG $ 0.44 $ 1.30 $ (0.86) Non-GAAP Operating Ea
Slide 14: EPS Reconciliation – First Half 2017 versus First Half 2016
PSEG EPS Reconciliation – First Half 2017 versus First Half 2016 Utility investment and cost control drove year-to-date growth $2.00 0.13 (0.05) (0.02) $1.54 $1.48 $1.50 $1.30 Transmission 0.07 Capacity 0.01 Interest Electric and Gas Expense, $1.00 Margin 0.05 Higher Gas Send-out 0.02 Taxes and Othe
Slide 15: PSE&G 2017 Q2 Review
PSE&G 2017 Q2 Review
Slide 16: PSE&G EPS Reconciliation – Q2 2017 versus Q2 2016
PSE&G EPS Reconciliation – Q2 2017 versus Q2 2016 Earnings per share rose by 17% vs. Q2 2016, reflecting infrastructure investment 0.70 0.60 0.50 0.06 0.00 $0.41 0.40 $0.35 0.30 Transmission D&A (0.01) 0.04 Other 0.01 0.20 Electric 0.10 and Gas Margin 0.02 0.00 Q2 2016 Q2 2017 Net Income Net Income
Slide 17: PSE&G – Q2 2017 weather had minor impact on EPS
PSE&G – Q2 2017 weather had minor impact on EPS PSE&G Monthly Weather Summary 2017 vs. 2016 vs. Normal Monthly Heating Degree Days (HDD) Monthly Temperature Humidity Index (THI) 500 3,500 2017 2016 Normal 3,000 2017 2016 Normal 3,160 400 3,019 365 2,500 359 2,497 300 2,000 279 200 1,500 174 170 1,00
Slide 18: PSE&G – Regulatory Agreement/Filing Support Long-term Objectives
PSE&G – Regulatory Agreement/Filing Support Long-term Objectives PSE&G’s recent filing to extend its Gas System Modernization Program (GSMP) and an agreement reached on its proposed Energy Efficiency investment program reinforce PSE&G’s commitment to provide clean, reliable energy for its customers
Slide 19: PSE&G – Q2 Operating Highlights
PSE&G – Q2 Operating Highlights Operations Total electric sales were flat on a weather normalized basis for the trailing 12 months ended June 30 Total firm gas sales were slightly higher at 0.4% for the trailing 12 months ended June 30 due to increased commercial sales The first half of 2017 was the
Slide 20: Power 2017 Q2 Review
PSEG Power 2017 Q2 Review
Slide 21: Power EPS Reconciliation – Q2 2017 versus Q2 2016
PSEG Power EPS Reconciliation – Q2 2017 versus Q2 2016 Fewer outage-related days and cost control offset lower prices 0.30 $0.18 (0.01) 0.02 $0.19 0.20 Capacity 0.01 O&M 0.10 Higher Volume 0.01 Recontracting/ Lower Prices (0.03) 0.00 Q2 2016 Q2 2017 Q2 2017 $(0.02) Operating Operating Net (Loss) -0.
Slide 22: Power – Q2 Generation increases 4%
PSEG Power – Q2 Generation increases 4% PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%) PSEG Power – Fuel Costs Quarter ended Quarter ended 15,000 June 30 June 30 12,446 12,951 2016 2017 ($ millions) 2016 2017 4,025 Combined 10,000 4,551 Gas $ 64 $ 83 Cycle 1,360 Coal $ 22 $ 31 912
Slide 23: Power – First Half Generation in-line with year-ago
PSEG Power – First Half Generation in-line with year-ago PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%) PSEG Power – Fuel Costs Six months Six months ended June 30 ended June 30 2016 2017 ($ millions) 2016 2017 30,000 25,646 25,786 25,000 Combined Gas $ 131 $ 162 8,305 7,071 Cycle
Slide 24: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance PS Zone pricing improved over Q2 2016 Baffle bolt replacement outages completed at both Salem units Capacity revenues were up slightly vs. Q2 2016 reflecting step-up in New England capacity pricing to $232 MW/day Regional spark spreads compressed in the quarter
Slide 25: Hedging Update
Hedging Update… Contracted Energy* Jul-Dec 2017 2018 2019 Volume TWh 17 34 34 Base Load % Hedged 100% 100% 40-45% (Nuclear and Base Load Coal) Price $/MWh $46 $41 $41 Volume TWh 7 18 23 Intermediate, Combined Cycle, % Hedged 60-65% 0% 0% Peaking Price $/MWh $46 $- $- Volume TWh 20-25 52-54 58-60 Tot
Slide 26: Power – Q2 Operating Highlights
PSEG Power – Q2 Operating Highlights Operations Q2 output up 4% with shorter Salem 2 refueling outage versus the extended Salem 1 outage in Q2 2016; baffle bolt inspection and replacement addressed at Salem 2 this Spring Nuclear fleet achieved average capacity factor of 89.6% in Q2, producing 7.6 TW
Slide 27: PSEG
PSEG
Slide 28: Financial Highlights
PSEG Financial Highlights Reiterating 2017 non-GAAPOperating Earningsguidance of $2.80 - $3.00 per share PSE&G earnings forecast to grow 8.5% to comprise 66% of PSEG’s 2017 non-GAAP Operating Earnings PSEG’s 5-Year capital spending forecast of $15 billion over 2017 – 2021 to be invested in PSE&G (82
Slide 29: 2017 Guidance - By Subsidiary
PSEG 2017 Guidance - By Subsidiary Segment Operating Earnings Guidance and Prior Results (non-GAAP, except as noted)* $ millions (except EPS) 2017E 2016 PSE&G (Net Income) $945 - $985 $889 PSEG Power $435 - $510 $514 PSEG Enterprise/Other $35 - $35 $72 Operating Earnings (non-GAAP)* $1,415 - $1,530
Slide 30: Liquidity as of June 30, 2017
PSEG Liquidity as of June 30, 2017 29
Slide 31: Reconciliation of Non-GAAP Operating Earnings
Reconciliation of Non-GAAP 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. A
Slide 32: Reconciliation of Non-GAAP Operating Earnings and Non-GAAP Adjusted EBITDA
Reconciliation of Non-GAAP Operating Earnings and Non-GAAP Adjusted EBITDA Please see Slide 2 for an explanation of PSEG’s use of Operating Earnings and Adjusted EBITDA as non-GAAP financial measures and B how they differ from Net Income/(Loss).
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