Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q3 2016 Earnings Presentation
32 slides from Public Service Enterprise's earnings presentation, Oct 31, 2016
Slide 1: PSEG Earnings Conference Call 3rd Quarter 2016
EXHIBIT 99.1 Public Service Enterprise Group PSEG Earnings Conference Call 3rd Quarter 2016 October 31, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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-loo
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: 2016 Q3 Review
PSEG 2016 Q3 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q3 Results Summary – Strong quarterly results
Q3 Results Summary – Strong quarterly results Quarter ended September 30 $ millions (except EPS) 2016 2015 Net Income $ 327 $ 439 Reconciling Items 117 (36) Operating Earnings (non-GAAP)* $ 444 $ 403 EPS from Net Income $ 0.64 $ 0.87 EPS from Operating Earnings (non-GAAP)* $ 0.88 $ 0.80 * See Slide
Slide 6: Year to Date Results
Year to Date Results Nine months ended September 30 $ millions (except EPS) 2016 2015 Net Income $ 985 $ 1,370 Reconciling Items 211 (149) Operating Earnings (non-GAAP)* $ 1,196 $ 1,221 EPS from Net Income $ 1.94 $ 2.70 EPS from Operating Earnings (non-GAAP)* $ 2.36 $ 2.41 * See Slide A for Items ex
Slide 7: Q3 2016 Highlights
PSEG – Q3 2016 Highlights Operating Results in Q3 Net Income of $0.64 vs. $0.87 per share in Q3 2015 Operating Earnings (non-GAAP) of $0.88 vs. $0.80 per share in Q3 2015* Increased earnings contribution from PSE&G’s investment in Transmission Updating 2016 Operating Earnings (non-GAAP) guidance to
Slide 8: Updating 2016 Full-Year Guidance
PSEG Updating 2016 Full-Year Guidance Operating Earnings* (non-GAAP) Guidance $2.91 $2.80 - $2.95E $2.76 2014 2015 2016 Guidance Strong third quarter results were not sufficient to offset the lack of a winter * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GA
Slide 9: 2016 Q3 Operating Company Review
PSEG 2016 Q3 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 10: EPS Reconciliation – Q3 2016 versus Q3 2015
PSEG EPS Reconciliation – Q3 2016 versus Q3 2015 1.00 0.01 $0.88 $0.87 0.06 0.01 $0.80 0.80 Re-Contracting/ PSEG-LI Transmission 0.03 Lower Prices/Gas and Other $0.64 Volumes (0.02) 0.60 Distribution Lower Volume Margin 0.02 (0.01) 0.40 Weather 0.01 O&M 0.03 Distribution O&M Interest 0.01 and D&A (0
Slide 11: EPS Reconciliation – YTD 2016 versus YTD 2015
PSEG EPS Reconciliation – YTD 2016 versus YTD 2015 3.00 $2.70 0.13 (0.22) 2.50 $2.41 0.04 $2.36 Transmission 0.09 Re-Contracting/ Lower Prices/ PSEG-LI, $1.94 2.00 Gas Volumes Taxes and Distribution Other Margin 0.02 (0.11) Weather (0.01) Lower Gas Send- Out and Fixed Cost 1.50 Distribution Recovery
Slide 12: PSE&G 2016 Q3 Review
PSE&G 2016 Q3 Review
Slide 13: PSE&G – Q3 Summary of Results
PSE&G – Q3 Summary of Results $ millions (except EPS) Q3 2016 Q3 2015 Variance Operating Revenues $ 1,684 $ 1,766 $ (82) Operating Expenses Energy Costs 721 740 (19) Operation & Maintenance 376 391 (15) Depreciation & Amortization 137 231 (94) Total Operating Expenses 1,234 1,362 (128) Net Income $
Slide 14: PSE&G EPS Reconciliation – Q3 2016 versus Q3 2015
PSE&G EPS Reconciliation – Q3 2016 versus Q3 2015 Continued investment in system reliability is a driver of growth 0.60 0.06 (0.02) 0.02 $0.50 $0.44 0.45 O&M (0.01) Taxes 0.03 Transmission 0.03 Other (0.01) 0.30 D&A (0.01) Electric Demand and Volume 0.02 0.15 Weather 0.01 0.00 Q3 2015 Q3 2016 Net Ne
Slide 15: PSE&G – Monthly Summer Weather Data
PSE&G – Monthly Summer Weather Data PSE&G Monthly Temperature Humidity Index (THI) 2016 vs. 2015 vs. Normal 7,000 6,500 6,000 6,254 6,068 5,500 5,548 5,000 5,151 5,106 4,500 4,521 4,000 3,500 3,000 3,242 2,500 2,818 2,000 1,500 1,930 1,000 500 0 July August September 2016 2015 Normal Q3 2016 tempera
Slide 16: PSE&G – Q3 Operating Highlights
PSE&G – Q3 Operating Highlights Operations Growth in transmission revenues added $0.03 per share over Q3 2015 Q3 2016 electric sales up ~4% on weather that was 9% warmer than Q3 2015 and 30% warmer than normal; Q3 was the hottest in the last 37 years of weather data Weather normalized electric sales
Slide 17: Power 2016 Q3 Review
PSEG Power 2016 Q3 Review
Slide 18: Power – Q3 Summary of Results
PSEG Power – Q3 Summary of Results $ millions (except EPS) Q3 2016 Q3 2015 Variance Operating Revenues $ 1,075 $ 1,096 $ (21) Net Income 139 206 (67) Reconciling Items 31 (36) 67 Operating Earnings (non-GAAP)* $ 170 $ 170 $ - EPS from Net Income $ 0.27 $ 0.40 $ (0.13) EPS from Operating Earnings (no
Slide 19: Power EPS Reconciliation – Q3 2016 versus Q3 2015
PSEG Power EPS Reconciliation – Q3 2016 versus Q3 2015 0.50 $0.40 0.40 $0.33 (0.03) 0.03 0.01 $0.34 0.30 $0.27 Other Re-Contracting/ O&M Lower Prices 0.20 (0.02) Lower Volume 0.10 (0.01) 0.00 Q3 2015 Q3 2015 Q3 2016 Q3 2016 Net Operating Operating Net Income Earnings Earnings Income (non-GAAP)* (non
Slide 20: Power – Generation Measures
PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Quarter ended September 30 Quarter ended September 30 14,718 15,000 14,110 2015 2016 Combined Cycle 5,739 5,754 PJM and NY 76.2% 73.6% 1,192 Coal 7,500 1,493 NJ (Coal/Gas) 3.7% 11.1% 7,787 PA 65.1% 69.8%
Slide 21: Power – Generation Measures
PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Nine Months ended September 30 Nine Months ended September 30 45,000 42,488 39,756 2015 2016 14,745 14,059 Combined Cycle 30,000 PJM and NY 64.6% 62.5% 4,995 3,432 Coal* NJ (Coal/Gas) 7.5% 3.4% 15,000 PA
Slide 22: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended Nine months ended September 30 September 30 ($ millions) 2015 2016 ($ millions) 2015 2016 Coal 27 29 Coal 139 78 Oil & Gas 94 83 Oil & Gas 423 215 Total Fossil 121 112 Total Fossil 562 293 Nuclear 56 49 Nuclear 162 154 Total Fuel Cost 177
Slide 23: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Capacity pricing and MWs were comparable year-over-year Lack of pipeline take away capacity kept pressure on local natural gas and power prices during a summer that exceeded last year’s hot weather Regional Performance PSEG Power Gross Margin ($/MWh) Q3 2016 Qua
Slide 24: Hedging Update…
Hedging Update… Contracted Energy* Oct-Dec 2016 2017 2018 Volume TWh 8 35 34 Base Load % Hedged 100% 100% 45-50% (Nuclear and Base Load Coal) Price $/MWh $48 $47 $45 Volume TWh 4 17 22 Intermediate Coal, Combined % Hedged 25-30% 0-5% 0% Cycle, Peaking Price $/MWh $48 $47 - Volume TWh 11-12 51-53 56-
Slide 25: Power – Q3 Operating Highlights
PSEG Power – Q3 Operating Highlights Operations Q3 output was down 4% vs. Q3 2015, YTD output down 6% from extended nuclear outages at Salem 1 and 2 CCGT capacity factor of 74% in Q3, YTD CCGT capacity factor of 63% Nuclear capacity factor of 80% in Q3, YTD nuclear capacity factor of 88% Regulatory
Slide 26: PSEG
PSEG
Slide 27: Financial Highlights
PSEG Financial Highlights Updating full-year 2016 Operating Earnings (non-GAAP) guidance to $2.80 - $2.95 from $2.80 - $3.00 per share Strong third quarter results were not sufficient to offset the lack of a winter Focused on meeting customer needs for clean, reliable, efficient delivery of energy I
Slide 28: APPENDIX
APPENDIX
Slide 29: 2016 Operating Earnings Guidance - By Subsidiary
PSEG 2016 Operating Earnings Guidance - By Subsidiary Segment Operating Earnings Guidance and Prior Results (non-GAAP, except as noted)* $ millions (except EPS) 2016E 2015 PSE&G (Net Income) $900 - $935 $787 PSEG Power* $460 - $500 $653 PSEG Enterprise/Other* $65 - $65 $36 Operating Earnings (non-GA
Slide 30: Liquidity as of September 30, 2016
PSEG Liquidity as of September 30, 2016 29
Slide 31: Items Excluded to Reconcile to Operating Earnings (Non-GAAP)
Items Excluded from Net Income to Reconcile to Operating Earnings (Non-GAAP) PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings (non-GAAP) Reconciliation Three Months Ended Nine Months Ended Year-Ended Reconciling Items September 30, September 30, December 31, 2016 2015 201
Slide 32: Items Excluded to Reconcile to Adjusted EBITDA (non-GAAP) and Operating Earnings
Items Excluded from Net Income to Reconcile to Adjusted EBITDA (non-GAAP) and Operating Earnings (non-GAAP) PSEG Power Adjusted EBITDA (non-GAAP) Reconciliation Three Months Ended Nine Months Ended Year Ended Reconciling Items September 30, September 30, December 31, 2016 2015 2016 2015 2015 ($ mill
Public Service Enterprise Group — Q3 2016 Earnings Presentation on 6ix