Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q4 2015 Earnings Presentation
35 slides from Public Service Enterprise's earnings presentation, Feb 19, 2016
Slide 1: PSEG Earnings Conference Call 4th Quarter & Year-end 2015
Public Service Enterprise Group PSEG Earnings Conference Call 4th Quarter & Year-end 2015 February 19, 2016 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 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 Q4 and Full Year Review
PSEG 2015 Q4 and Full Year Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q4 Earnings Summary – Strong Operating Results
Q4 Earnings Summary – Strong Operating Results $ millions (except EPS) 2015 2014 Operating Earnings $ 255 $ 247 Reconciling Items, Net of Tax 54 229 Net Income $ 309 $ 476 EPS from Operating Earnings* $ 0.50 $ 0.49 Quarter ended December 31 * See Slide A for Items excluded from Net Income to reconci
Slide 6: Full-year Earnings Summary – 5.4% Increase in Operating Earnings
Full-year Earnings Summary – 5.4% Increase in Operating Earnings $ millions (except EPS) 2015 2014 Operating Earnings $ 1,476 $ 1,400 Reconciling Items, Net of Tax 203 118 Net Income $ 1,679 $ 1,518 EPS from Operating Earnings* $ 2.91 $ 2.76 Twelve Months ended December 31 * See Slide A for Items ex
Slide 7: 2015 – A Year of Successful Deployment of Capital and Strong Operating Performance
PSEG 2015 – A Year of Successful Deployment of Capital and Strong Operating Performance Strong 2015 financial performance – at upper half of guidance Operating earnings of $2.91 per share, up 5.4%, the 3rd consecutive year of growth PSE&G achieved 9% growth in earnings, at the upper end of guidance
Slide 8: Annual Dividend – Increased 5.1% to $1.64 per share
PSEG Annual Dividend – Increased 5.1% to $1.64 per share PSEG Annual Dividend Rate *Indicated annual 2016 PSEG COMMON DIVIDEND rate per share. **2016 payout ratio reflects the indicated annual dividend rate divided by the midpoint of 2016 operating earnings guidance of $2.80 - $3.00 per share. Payou
Slide 9: PSEG 2016 Earnings Guidance
$2.80 - $3.00E PSEG 2016 Earnings Guidance $2.76 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. E = Estimate. $2.91 Growth in regulated operations offsetting commodity market weakness in 2016
Slide 10: 2015 Q4 Operating Company Review
PSEG 2015 Q4 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 11: Q4 Operating Earnings by Subsidiary
Q4 Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2015 2014 2015 2014 PSE&G $ 156 $ 160 $ 0.31 $ 0.32 PSEG Power 95 91 0.19 0.18 PSEG Enterprise/Other 4 (4) - (0.01) Operating Earnings* $ 255 $ 247 $ 0.50 $ 0.49 Quarter ended December 31 * See Slide A
Slide 12: PSEG EPS Reconciliation – Q4 2015 versus Q4 2014
$ / share PSEG EPS Reconciliation – Q4 2015 versus Q4 2014 Capacity (0.04) Re-Contracting, Market Pricing and Lower Gas Sales 0.02 Taxes and Other 0.03 Transmission & Distribution 0.03 Electric Weather, Volume and Demand (0.01) O&M, Taxes and Other (0.03) Q4 2015 Operating Earnings* Q4 2014 Operatin
Slide 13: Strong Full-year Operating Earnings Achieved – Up 5.4%
Strong Full-year Operating Earnings Achieved – Up 5.4% Operating Earnings Earnings per Share $ millions (except EPS) 2015 2014 2015 2014 PSE&G $ 787 $ 725 $ 1.55 $ 1.43 PSEG Power 653 642 1.29 1.27 PSEG Enterprise/Other 36 33 0.07 0.06 Operating Earnings* $ 1,476 $ 1,400 $ 2.91 $ 2.76 Twelve Months
Slide 14: PSEG EPS Reconciliation – Full-year 2015 versus Full-year 2014
$ / share PSEG EPS Reconciliation – Full-year 2015 versus Full-year 2014 Re-Contracting and Market Pricing 0.27 Capacity (0.24) Volume 0.02 O&M (0.05) D&A (0.02) Taxes and Other 0.04 Transmission 0.13 Gas Volume & Demand 0.03 Electric Weather, Volume & Demand 0.04 O&M (Distribution) (0.08) 2015 Oper
Slide 15: PSE&G 2015 Q4 Review
PSE&G 2015 Q4 Review
Slide 16: PSE&G – Q4 Earnings Summary
PSE&G – Q4 Earnings Summary $ millions (except EPS) Q4 2015 Q4 2014 Variance Operating Revenues $ 1,402 $ 1,531 $ (129) Operating Expenses Energy Costs 546 631 (85) Operation & Maintenance 389 368 21 Depreciation & Amortization 180 224 (44) Total Operating Expenses 1,115 1,223 (108) Operating Earnin
Slide 17: PSE&G EPS Reconciliation – Q4 2015 versus Q4 2014
$ / share PSE&G EPS Reconciliation – Q4 2015versus Q4 2014 Q4 2015 Operating Earnings Q4 2014 Operating Earnings Transmission & Distribution Margin 0.03 Electric Weather, Volume & Demand (0.01) O&M, Taxes & Other Prior quarter results for reconciling items may not add to year-to-date (YTD) totals du
Slide 18: PSE&G – Q4 Operating Highlights
PSE&G – Q4 Operating Highlights FERC formula rate revenue increase of $146 million effective January 1, 2016; update for bonus depreciation adjustment would lower revenue by $27 million PSE&G will credit residential gas customers with ~$155 million in BGSS bill credits this winter PSE&G recognized f
Slide 19: Power 2015 Q4 Review
PSEG Power 2015 Q4 Review
Slide 20: Power – Q4 EPS Summary
PSEG Power – Q4 EPS Summary $ millions (except EPS) Q4 2015 Q4 2014 Variance Operating Revenues $ 1,082 $ 1,610 $ (528) Operating Earnings 95 91 4 Pro Forma Adjustments, Net of Tax** 54 229 (175) Net Income $ 149 $ 320 $ (171) EPS from Operating Earnings* $ 0.19 $ 0.18 $ 0.01 * See Slide A for Items
Slide 21: PSEG Power EPS Reconciliation – Q4 2015 versus Q4 2014
Lower Capacity (0.04) Re-Contracting, Market Pricing & Lower Gas Sales 0.02 $ / share PSEG Power EPS Reconciliation – Q4 2015 versus Q4 2014 Q4 2015 Operating Earnings* Q4 2014 Operating Earnings* Taxes and Other *See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. Res
Slide 22: Power – Q4 Generation Measures
PSEG Power – Q4 Generation Measures – Volume % Quarter ended December 31 Total Nuclear Total Coal* Oil & Natural Gas * Includes figures for Pumped Storage. Includes Hudson and Mercer when run on gas. PSEG Power – Generation (GWh) 12,859 12,725 Quarter ended December 31 PSEG Power – Capacity Factors
Slide 23: Power – Full-Year Generation Measures
PSEG Power – Full-Year Generation Measures – Volume % Twelve months ended December 31 Total Nuclear Total Coal* Oil & Natural Gas * Includes figures for Pumped Storage. Includes Hudson and Mercer when run on gas. PSEG Power – Generation (GWh) 54,162 55,213 Twelve months ended December 31 PSEG Power
Slide 24: Power – Fuel Costs
PSEG Power – Fuel Costs Quarter ended December 31 ($ millions) 2014 2015 Coal 39 23 Oil & Gas 134 62 Total Fossil 173 85 Nuclear 49 51 Total Fuel Cost 222 136 Total Generation (GWh) 12,859 12,725 $ / MWh 17.23 10.73 PSEG Power – Fuel Costs Twelve months ended December 31 ($ millions) 2014 2015 Coal
Slide 25: Power – Q4 2015 Gross Margin Performance
PSEG Power – Q4 2015 Gross Margin Performance $46 Quarter ended December 31 Twelve Months ended December 31 $47 Favorable hedges offset declines in wholesale market prices Capacity revenues affected by HEDD retirements in second half 2015 Market prices influenced by record mild weather Access to Mar
Slide 26: Market Perspective – 2016 BGS Auction Results
Full Requirements Component Capacity Markets/RPM Growing Renewable Energy/Transmission Component for Market Risk Market Perspective – 2016 BGS Auction Results … Latest auction results reflect a decline in energy prices, and increase in cost of transmission, capacity and renewables Note: BGS prices a
Slide 27: Hedging Update – Contracted Energy
Hedging Update… Contracted Energy* * HEDGE PERCENTAGES AND PRICES AS OF DECEMBER 31, 2015, UPDATED WITH 2016 BGS AUCTION RESULTS. REVENUES OF FULL REQUIREMENT LOAD DEALS BASED ON CONTRACT PRICE, INCLUDING RENEWABLE ENERGY CREDITS, ANCILLARY, AND TRANSMISSION COMPONENTS BUT EXCLUDING CAPACITY. HEDGES
Slide 28: Power – Q4 2015 Operating Highlights
PSEG Power – Q4 2015 Operating Highlights Q4 output down 1% over Q4 2014; full-year 2015 generation up 2% to 55.2 TWh on nuclear and CCGT production gains Nuclear fleet capacity factor of 90.4% for 2015; nuclear output of 30 TWh was 3rd best run New CCGT all-time production total of 18.4 TWh for 201
Slide 29: PSEG
PSEG
Slide 30: Financial Highlights
PSEG Financial Highlights Introducing 2016 operating earnings guidance of $2.80 - $3.00 per share Focused on maintaining operating efficiency and customer reliability PSE&G earnings forecast to grow 14% to comprise >60% of 2016’s operating earnings PSEG capital spending forecast of $11.5 billion ove
Slide 31: 2016 Operating Earnings Guidance - By Subsidiary
PSEG 2016 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2016E 2015 2014 PSE&G $875 - $925 $787 $725 PSEG Power $490 - $540 $653 $642 PSEG Enterprise/Other $60 - $60 $36 $33 Operating Earnings* $1,425 - $1,525 $1,476 $1,400 Earnings per Share $2.80 - $3.00E $2.91 $2.76 *See Slid
Slide 32: Power's Adjusted EBITDA – Q4 2015, Full-Year 2015 and 2016 Guidance
PSEG Power’s Adjusted EBITDA – Q4 2015, Full-Year 2015 and Full-Year 2016 Guidance Three Months Ended December 31, Full Year Full-Year 2016 Guidance ($ in millions) 2015 2014 2015 2014 Low High Operating Earnings** $95 $91 $653 $642 $490 $540 Add: Fossil Major Maintenance, pre-tax 17 27 128 144 80 8
Slide 33: Liquidity as of December 31, 2015
PSEG Liquidity as of December 31, 2015
Slide 34: Items Excluded from Net Income to Reconcile to Operating Earnings
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. A
Slide 35: Items Excluded from Net Income to Reconcile to Operating Earnings and Adjusted EBITDA
B Items Excluded from Net Income to Reconcile to Operating Earnings and 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 how they differ from Net Income. (a) Includes the financial impact from positions w
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