Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — FY2021 Earnings Presentation
38 slides from Public Service Enterprise's earnings presentation, Feb 24, 2022
Slide 1: Financial Results and Conference Call 4th Quarter & Full Year 2021
Public Service Enterprise Group Financial Results and Conference Call 4th QUARTER & FULL YEAR 2021 24 FEB 2022
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/(Loss) reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings and Adjusted
Slide 4: PSEG Q4 and Full Year 2021
#* PSEG PSEG Q4 and Full Year 2021
Slide 5: Q4 and Full Year 2021
PSEG Q4 and Full Year 2021 • Fourth Quarter and Full Year Highlights ꟷ Net Income of $0.88 per share in Q4 2021 vs. $0.85 per share in Q4 2020; Full Year 2021 Net Loss of $1.29 per share vs. Full Year 2020 Net Income of $3.76 per share ꟷ Non-GAAP Operating Earnings* of $0.69 per share in Q4 2021 vs.
Slide 6: Sale of PSEG Fossil fleet
Sale of PSEG Fossil fleet • All required regulatory approvals obtained at the federal (FERC) and state (NY and CT) levels to close sale to ArcLight Capital Partners, LLC covering 6,750 MW – PJM portfolio transaction closed February 18, 2022 – NY and CT portfolio transaction closed February 23, 2022
Slide 7: Regulatory and Policy Initiatives Update
Regulatory and Policy Initiatives Update State Regulatory Proceedings • PSE&G’s jobs and economic stimulus focused Infrastructure Advancement Program filing, an $848 million, four-year investment program, submitted in November 2021 – Based on current status, NJBPU action expected in autumn 2022 • PS
Slide 8: PSE&G: Top decile safety and reliability performance
PSE&G: Top decile safety and reliability performance OSHA Incident Rate OSHA Recordable PSE&G SAIDI Open Leaks Better Better Better Better Days Away Rate 7.0 350 30,000 6.0 150.0 300 25,000 5.0 250 20,000 4.0 100.0 200 15,000 3.0 150 10,000 2.0 50.0 100 1.0 50 5,000 - - - - 2017 2018 2019 2020 2021
Slide 9: Narrows Full Year 2022 Guidance
PSEG – Narrows Full Year 2022 Guidance Non-GAAP Operating Earnings* $3.65 $3.35 – $3.55E $3.35 – $3.55E 2021 Legend 2022 Legend Multi-year $3.01 PSE&G earnings growth rate $2.78 $2.85 to of 5% - 7% to $3.11 $2.90 from the 2022 guidance Carbon-Free, midpoint Infrastructure & Other** to 2025 $0.55 to
Slide 10: 2022 indicative annual dividend increased $0.12 per share
2022 indicative annual dividend increased $0.12 per share, building on a 115-year history of returning cash to our shareholders PSEG Dividend per Share $2.16* $2.04 $1.96 $1.88 $1.80 Opportunity for consistent and $1.72 sustainable dividend growth - $1.64 now with a higher growth rate $1.56 $1.48 $1
Slide 11: Sustainability and ESG Summary
PSEG Sustainability and ESG Summary PSEG Leadership Policies & Goals Recognition • Joined the U.N.-backed Race to Zero and • PSEG is a vocal advocate for an economy-wide • Member of 2022 Bloomberg Gender- Business Ambition for 1.5°C campaigns price on carbon and preserving our existing Equality Inde
Slide 12: PSEG has outpaced the industry in reducing carbon emissions intensity
PSEG has outpaced the industry in reducing carbon emissions intensity, and is getting recognized for ESG performance PSEG Generation Carbon Emission Intensity vs. U.S. Fleet Average (2005 – 2022E) PSEG’s ESG Vital Signs: Relative Scores 1,400 PSEG's generation fleet continues to be much less PEERS M
Slide 13: PSEG delivering solid results and sustainable dividend growth
PSEG delivering solid results and sustainable dividend growth 2022 Financial Highlights • Narrowing full year 2022 non-GAAP Operating Earnings guidance to $3.35 - $3.55 per share from $3.30 - $3.60 per share • PSE&G expected to contribute ~90% of 2022 non-GAAP Operating Earnings • PSEG’s 5-year capi
Slide 14: Q4 2021 Operating Company Review
PSEG Q4 2021 Operating Company Review
Slide 15: Q4 Results by Subsidiary
PSEG – Q4 Results by Subsidiary PSEG Q4 EPS Summary – Quarter ended December 31 Net Income/(Loss) 2021 2020 Change PSE&G $ 0.53 $ 0.58 $ (0.05) PSEG Power $ 0.40 $ 0.30 $ 0.10 PSEG Enterprise/Other $ (0.05) $ (0.03)- $ (0.02) Total PSEG $ 0.88 $ 0.85 $ 0.03 Non-GAAP Operating Earnings* 2021 2020 Cha
Slide 16: EPS Reconciliation – Q4 2021 versus Q4 2020
PSEG EPS Reconciliation – Q4 2021 versus Q4 2020 $0.90 $0.88 $0.85 $0.75 0.11 (0.02) $0.69 $0.65 (0.05) Higher $0.60 Contributions to PSEG Foundation, $ / share Transmission (0.01) ZECs 0.01 Higher Interest Electric Margin 0.01 Capacity (0.01) Expense and $0.45 Gas Margin 0.03 Re-contracting & Other
Slide 17: Full Year Results by Subsidiary
PSEG – Full Year Results by Subsidiary PSEG Full Year EPS Summary – Twelve Months ended December 31 Net Income/(Loss) 2021* 2020 Change PSE&G $ 2.87 $ 2.62 $ 0.25 PSEG Power $ (4.09) $ 1.17 $ (5.26) PSEG Enterprise/Other $ (0.07) $ (0.03)- $ (0.04) Total PSEG $ (1.29) $ 3.76 $ (5.05) Non-GAAP Operat
Slide 18: EPS Reconciliation – FY 2021 versus FY 2020
PSEG EPS Reconciliation – FY 2021 versus FY 2020 $4.00 $3.76 0.23 0.02 (0.03) $3.65 $3.50 $3.43 Capacity 0.03 Higher O&M, Contributions $3.00 Transmission 0.03 Re-contracting & to PSEG Electric Margin 0.07 Market (0.19) Foundation and Other $2.50 Gas Margin 0.09 Volume 0.04 Distribution Sale of Sola
Slide 19: Public Service Electric & Gas Q4 2021 Review
Public Service Electric & Gas Q4 2021 Review
Slide 20: PSE&G EPS Reconciliation – Q4 2021 versus Q4 2020
PSE&G EPS Reconciliation – Q4 2021 versus Q4 2020 $0.75 0.03 (0.08) $0.58 $0.60 $0.53 Transmission (0.01) $0.45 Distribution O&M (0.01) Electric Margin 0.01 Distribution $ / share Depreciation Gas Margin 0.03 (0.01) $0.30 Distribution Non-Operating Pension/OPEB 0.02 $0.15 Distribution Taxes & Other
Slide 21: Electric Distribution – Last mile investment program
Electric Distribution – Last mile investment program will modernize the system and improve reliability for customers who are more dependent on the system than ever before Last mile electric system modernization investments: • Targeted asset replacements – Poles, overhead equipment, secondary lines,
Slide 22: Infrastructure Advancement Program – 4-year distribution investment program
Infrastructure Advancement Program – 4-year distribution investment program to improve reliability, reduce emissions and create jobs Investment $ millions Components Based on current status of the filing, Underground cable replacement, spacer cable, pole upgrades, Last Mile - Reliability $206 NJBPU
Slide 23: PSE&G – Q4 Highlights
PSE&G – Q4 Highlights Operations • PSE&G achieved its highest J.D. Power Satisfaction scores for: Regulatory and Market Environment Electric Residential (1st Quartile) • PSE&G’s transmission rates reflect revised base 9.90% ROE Gas Residential (2nd Quartile) • PSE&G implemented two, 5% increases
Slide 24: PSEG Power Q4 2021 Review
#* PSEG PSEG Power Q4 2021 Review
Slide 25: Power EPS Reconciliation – Q4 2021 versus Q4 2020
PSEG Power EPS Reconciliation – Q4 2021 versus Q4 2020 $0.40 $0.30 $0.40 ~ ~ $0.30 $0.30 $0.25 ~ ~ 0.12 $0.21 $0.20 $ / share $0.15 $0.10 (0.01) $0.10 ZECs 0.01 O&M 0.02 Capacity (0.01) Depreciation & Interest 0.09 $0.05 Re-contracting & Market (0.03) Taxes & Other Volume 0.04 0.01 Sale of Solar Sou
Slide 26: Power – Q4 & Full Year Generation Measures
PSEG Power – Q4 & Full Year Generation Measures PSEG Power – YTD Generation (GWh)* PSEG Power – Capacity Factors (%)* 60,000 Quarter ended Year ended 52,964 54,046 December 31 December 31 2020 2021 2020 2021 45,000 46.2% 49.4% Combined Cycle** 48.3% 49.1% 22,206 22,888 78.9% 88.5% Nuclear 90.3% 91.9
Slide 27: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance PSEG Power Gross Margin ($/MWh) Quarter ended Full Year December 31 $40 $40 $31 $32 $30 $32 $32 $30 $30 $30 $20 $20 $10 $10 $0 $0 2019 2020 2021 2019 2020 2021 Regional Performance Q4 Gross Margin Region ($M) Q4 2021 Performance Higher volume and prices partiall
Slide 28: Power – Q4 Highlights
PSEG Power – Q4 Highlights Operations Regulatory and Market Environment • Q4 2021 output was up 9% compared to Q4 2020 and FY 2021 • Next PJM capacity auction (2023/2024) to be held June 2022 output was up 2% compared to FY 2020 • Nuclear fleet achieved a capacity factor of 88.5% in Q4 2021 Financia
Slide 29: Appendix
#* PSEG APPENDIX
Slide 30: Narrowing Full Year 2022 Guidance
PSEG – Narrowing Full Year 2022 Guidance Operating Earnings Guidance and Prior Year Results (non-GAAP)* 2022E 2021 $ millions (except EPS) Guidance Actual PSE&G $1,510 - $1,560 $1,446 Carbon-Free, Infrastructure & Other $170 - $220 N/A PSEG Power N/A $438 PSEG Enterprise/Other N/A ($31) Operating Ea
Slide 31: PSE&G’s 5-year, $14B - $16B capital program
PSE&G’s 5-year, $14B - $16B capital program focused on reliability, resiliency, grid modernization and clean energy PSE&G Capital Spending 2021 – 2025E 4,000 3,500 Unapproved Programs: • ES III, CEF-ES, electrification initiatives, and IAP 3,000 • GSMP and CEF-EE Program Extensions: Low-end ($ Milli
Slide 32: Expanded investment program firms compound annual rate base growth
Expanded investment program firms compound annual rate base growth over the five year period CAGR PSE&G Year-End Rate Base YE 2021- YE 2020- YE 2025E YE 2025E 7.5% 8% 35,000 6.% 6.5% Unapproved 30,000 Programs 25,000 ($ Millions) 20,000 15,000 10,000 5,000 - 2021 2022E 2023E 2024E 2025E Transmission
Slide 33: PSE&G – Q4 & Full Year Weather Summary
PSE&G – Q4 & Full Year Weather Summary PSE&G Monthly Weather Summary Winter Weather Summary (HDD) – FY 2021 vs. FY 2020 vs. Normal Monthly Heating Degree Days (HDD) – Q4 2021 vs. Q4 2020 vs. Normal 4,121 900 828 829 HDD Summary 4,186 4,646 750 629 2,000 3,000 4,000 5,000 600 521 526 2021 2020 Normal
Slide 34: Carbon-Free, Infrastructure and Other – 2022E Assumptions
Carbon-Free, Infrastructure and Other – 2022E Assumptions Carbon-Free Contracted Energy Sales* Other 2022 Financial Considerations • Capacity Revenue for 2022: ~$150 million 2022E 2023E 2024E June 2021 - May 2022 auction price: $166/MW-Day for EMAAC Fuel Nuclear Nuclear Nuclear June 2022 - May 2
Slide 35: PSEG has accelerated its climate vision to Net-Zero 2030
PSEG has accelerated its climate vision to Net-Zero 2030 and joined the U.N.-backed Race to Zero campaign ~22% ~60% Methane New PSEG Original PSEG Original Methane Reduction Net-Zero Power 80% PSEG Power Reduction Target* GHG Vision GHG Reduction Net-Zero Vision Target Target 2023 2030 2030 2046 205
Slide 36: PSEG maintains a solid financial position
PSEG maintains a solid financial position PSEG Public Service Electric & Gas Senior Unsecured Credit Ratings Senior Secured Credit Ratings Moody’s = Baa2 / Outlook = Stable S&P = BBB / Outlook = Stable Moody’s = A1 / Outlook = Stable S&P = A / Outlook = Stable PSEG 364-DayTerm Loans 2021 PSE&G Debt
Slide 37: 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, (a) Effective January 1, 2018, unrealized gains (losses) 2021 2020 2021 202
Slide 38: Reconciliation of Non-GAAP Operating Earnings and Non-GAAP 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, (a) Includes the financial impact from positions with forward de
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