Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q2 2018 Earnings Presentation
33 slides from Public Service Enterprise's earnings presentation, Aug 1, 2018
Slide 1: PSEG Earnings Conference Call 2nd Quarter 2018
Public Service Enterprise Group PSEG Earnings Conference Call 2nd Quarter 2018 August 1, 2018 EXHIBIT 99.1
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: 2018 Q2 Review
PSEG 2018 Q2 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q2 2018 Highlights
PSEG Q2 2018 Highlights Second Quarter Results Net Income of $0.53 vs. Net Income of $0.22 per share in Q2 2017 Non-GAAP Operating Earnings* of $0.64, up 3% over $0.62 per share in Q2 2017 PSE&G Earnings Per Share up 12% driven by growth in T & D investment PSEG Power results continue to benefit fro
Slide 6: Q2 Results Summary
PSEG Q2 Results Summary Quarter ended June 30 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP). $ millions (except EPS) 2018 2017 Net Income $ 269 $ 109 Reconciling Items 56 207 Operating Earnings (non-GAAP)* $ 325 $ 316 EPS from Net Income $ 0.53 $ 0.22
Slide 7: First Half Results Summary
PSEG First Half Results Summary Six Months ended June 30 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP). $ millions (except EPS) 2018 2017 Net Income $ 827 $ 223 Reconciling Items (10) 559 Operating Earnings (non-GAAP)* $ 817 $ 782 EPS from Net Income
Slide 8: Reaffirming 2018 Full-Year Guidance
Growth in utility infrastructure investment and tax reform expected to drive increase in earnings PSEG Reaffirming 2018 Full-Year Guidance +6% over 2017 Non-GAAP Operating Earnings* Contribution by Subsidiary 2017 Actual and 2018 Guidance * See Slides A, B and C for Items excluded from Net Income/(L
Slide 9: 2018 Q2 Operating Company Review
PSEG 2018 Q2 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 10: Q2 Results by Subsidiary
PSEG – Q2 Results by Subsidiary GAAP Net Income/(Loss) 2018 2017 Change PSE&G $ 0.46 $ 0.41 $ 0.05 PSEG Power $ 0.08 $ (0.19) $ 0.27 PSEG Enterprise/Other $ (0.01) $ - $ (0.01) Total PSEG $ 0.53 $ 0.22 $ 0.31 Non-GAAP Operating Earnings* 2018 2017 Change PSE&G $ 0.46 $ 0.41 $ 0.05 PSEG Power $ 0.16
Slide 11: EPS Reconciliation – Q2 2018 versus Q2 2017
PSEG EPS Reconciliation – Q2 2018 versus Q2 2017 *See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP). **Reflects the impact of new accounting guidance effective January 1, 2018 which no longer allows capitalization of non-service components of pension and OP
Slide 12: First Half Results by Subsidiary
PSEG – First Half Results by Subsidiary GAAP Net Income/(Loss) 2018 2017 Change PSE&G $ 1.09 $ 1.00 $ 0.09 PSEG Power $ 0.54 $ (0.53) $ 1.07 PSEG Enterprise/Other $ - $ (0.03) $ 0.03 Total PSEG $ 1.63 $ 0.44 $ 1.19 Non-GAAP Operating Earnings* 2018 2017 Change PSE&G $ 1.09 $ 1.00 $ 0.09 PSEG Power $
Slide 13: EPS Reconciliation – First Half 2018 versus First Half 2017
PSEG EPS Reconciliation – First Half 2018 versus First Half 2017 Transmission 0.06 GSMP & Energy Strong 0.04 Weather, Volume & Demand 0.02 Distribution O&M (0.02) Pension & OPEB** 0.04 Depreciation , Interest, Taxes & Other (0.05) Capacity 0.05 Re-contracting & Market (0.14) Gas Send-out 0.01 Lower
Slide 14: PSE&G 2018 Q2 Review
PSE&G 2018 Q2 Review
Slide 15: PSE&G EPS Reconciliation – Q2 2018 versus Q2 2017
PSE&G EPS Reconciliation – Q2 2018versus Q2 2017 *Reflects the impact of new accounting guidance effective January 1, 2018 which no longer allows capitalization of non-service components of pension and OPEB costs and requires the reclassification of these costs below Operating Income. $ / share Tran
Slide 16: PSE&G – Q2 2018 weather had minor impact on EPS
PSE&G – Q2 2018 weather had minor impact on EPS THI 2018 vs. 2017 vs. Normal PSE&G Monthly Weather Summary Monthly Temperature Humidity Index (THI) Monthly Heating Degree Days (HDD) Q2 2018 heating degree days were ~19% higher than Q2 2017 and ~12% higher than normal Q2 2018 temperature-humidity ind
Slide 17: PSE&G filed its Energy Strong II infrastructure program
PSE&G filed its Energy Strong II infrastructure program (ES2) which seeks to invest $2.5 billion, over a five-year period to further strengthen the utility’s electric and gas systems to better withstand storms, increase reliability and significantly enhance resiliency Electric: Provide flood mitigat
Slide 18: PSE&G 2018 Distribution Rate Case Update
PSE&G 2018 Distribution Rate Case Update Dockets ER 18010029 (Electric) and GR 18010030 (Gas) Filed January 12, 2018; Anticipate new rates Fourth Quarter 2018 Test year – July 1, 2017 through June 30, 2018 (with certain pro forma adjustments) ROE request of 10.3%; Capitalization structure with 54% e
Slide 19: PSE&G – Q2 Operating Highlights
PSE&G – Q2 Operating Highlights Obtained final BPU approval of PSE&G’s $1.9 billion GSMP II investment program to begin in 2019 Filed the Energy Strong II infrastructure program which proposes $2.5 billion investment over 5 years Average residential electric customers benefit from 1.9% reduction in
Slide 20: Power 2018 Q2 Review
PSEG Power 2018 Q2 Review
Slide 21: Power EPS Reconciliation – Q2 2018 versus Q2 2017
PSEG Power EPS Reconciliation – Q2 2018 versus Q2 2017 *See Slide C for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP) for PSEG Power. $ / share Capacity 0.03 Re-contracting & Market (0.08) Gas Send-out 0.01 Lower Volumes (0.01) O&M (0.02) Depreciation & Interest
Slide 22: Power – Q2 Generation Measures
PSEG Power – Q2 Generation Measures Total Nuclear Total Coal** Natural Gas * Excludes solar and Kalaeloa. ** Includes figures for Pumped Storage. PSEG Power – Generation (GWh)* 12,951 12,327 PSEG Power – Capacity Factors (%) Quarter ended June 30 2017 2018 Combined Cycle 55.3% 46.3% Coal** PA 81.2%
Slide 23: Power – First Half Generation Measures
PSEG Power – First Half Generation Measures Total Nuclear Total Coal** Natural Gas * Excludes solar and Kalaeloa. ** Includes figures for Pumped Storage. PSEG Power – Generation (GWh)* 25,786 25,041 PSEG Power – Capacity Factors (%) Six Months ended June 30 2017 2018 Combined Cycle 48.5% 42.0% Coal*
Slide 24: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Quarter ended June 30 Lower generation due to Hope Creek refueling and fossil maintenance Capacity prices increased on June 1: Average price now $205 MW/day in PJM and $314 MW/day in ISO-NE through May 31, 2019 Regional Performance Region Q2 Gross Margin ($M) Q2
Slide 25: Hedging Update
Hedging Update Contracted Energy* * Hedge percentages and prices as of June 30, 2018 and reflect 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 accou
Slide 26: Power – Q2 Operating Highlights
PSEG Power – Q2 Operating Highlights Q2 output down 5% from Hope Creek refueling and other planned fossil maintenance at Linden Nuclear achieved average capacity factor of 86% in Q2; CCGT fleet had a capacity factor of 46% producing 3.5 TWh of energy; Coal fleet achieved 81% capacity factor producin
Slide 27: PSEG
PSEG
Slide 28: Financial Highlights
PSEG Financial Highlights Reaffirming 2018 non-GAAP Operating Earnings guidance of $3.00 - $3.20 per share PSEG’s 5-Year capital spending forecast of $14 billion - $17 billion over the 2018 - 2022 period mainly directed at PSE&G capital program PSE&G capital spend forecast of $12 billion - $15.5 bil
Slide 29: Affirming PSEG 2018 Guidance - By Subsidiary
Affirming PSEG 2018 Guidance - By Subsidiary $ millions (except EPS) 2018E 2017 PSE&G $1,000 - $1,030 $963 PSEG Power (non-GAAP)* $485 - $560 $505 PSEG Enterprise/Other $35 - $35 $20 Operating Earnings (non-GAAP)* $1,520 - $1,625 $1,488 Operating EPS (non-GAAP)* $3.00 - $3.20E $2.93 Segment Operatin
Slide 30: Liquidity as of June 30, 2018
PSEG Liquidity as of June 30, 2018
Slide 31: A Reconciliation of Non-GAAP Operating Earnings
A 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. Reconciliation of Non-GAAP Operating Earnings Effective January 1, 2018, unrealized gains (losses) on equity securities are recorded in Net Income instead o
Slide 32: B Reconciliation of Non-GAAP Operating Earnings
B Reconciliation of Non-GAAP Operating Earnings Income tax effect calculated at a combined leveraged lease effective tax rate. 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. 2018 2017 2018 2017 2017 Net In
Slide 33: C Reconciliation of Non-GAAP Operating Earnings and Adjusted EBITDA
C 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 a non-GAAP financial measure and how it differs from Net Income. 2018 2017 2018 2017 2017 Net Income (Loss) 41 $ (97) $ 275 $
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