Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q3 2017 Earnings Presentation
31 slides from Public Service Enterprise's earnings presentation, Oct 31, 2017
Slide 1: PSEG Earnings Conference Call 3rd Quarter 2017
EXHIBIT 99.1 Public Service Enterprise Group PSEG Earnings Conference Call rd 3 Quarter 2017 October 31, 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 Q3 Review
PSEG 2017 Q3 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q3 2017 – Solid results; executing well on major initiatives
PSEG Q3 2017– Solid results; executing well on major initiatives Third Quarter Highlights Net Income of $0.78 vs. Net Income of $0.64 per share in Q3 2016 Non-GAAP Operating Earnings* of $0.82 vs. $0.88 per share in Q3 2016 PSE&G results benefitted from increased investment in electric and gas trans
Slide 6: Q3 Summary
PSEG Q3 Summary Quarter ended September 30 $ millions (except EPS) 2017 2016 Change Net Income $ 395 $ 327 $ 68 Reconciling Items 22 117 (95) Operating Earnings (non-GAAP)* $ 417 $ 444 $ (27) EPS from Net Income $ 0.78 $ 0.64 $ 0.14 EPS from Operating Earnings (non-GAAP)* $ 0.82 $ 0.88 $ (0.06) *See
Slide 7: Year-to-Date Summary
PSEG Year-to-Date Summary Nine Months ended September 30 $ millions (except EPS) 2017 2016 Change Net Income $ 618 $ 985 $ (367) Reconciling Items 581 211 (370) Operating Earnings (non-GAAP)* $ 1,199 $ 1,196 $ 3 EPS from Net Income $ 1.22 $ 1.94 $ (0.72) EPS from Operating Earnings (non-GAAP)* $ 2.3
Slide 8: Executing on Regulatory and Policy Initiatives
PSEG - Executing on Regulatory and Policy Initiatives NJ Distribution Base Rate Proceeding Agreed to delay rate review filing by one month to no later than December 1, 2017 Long-Term Infrastructure Investment Platform In July, PSE&G filed for a 5-year, $2.7 billion extension of the Gas System Modern
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 Q3 Operating Company Review
PSEG 2017 Q3 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 11: Q3 Results by Subsidiary
PSEG – Q3 Results by Subsidiary PSEG Q3 EPS Summary – Quarter ended September 30 GAAP Net Income/(Loss) 2017 2016 Change PSE&G $ 0.49 $ 0.50 $ (0.01) PSEG Power $ 0.27 $ 0.27 $ - PSEG Enterprise/Other $ 0.02 $(0.13) $ 0.15 Total PSEG $ 0.78 $ 0.64 $ 0.14 Non-GAAP Operating Earnings* 2017 2016 Change
Slide 12: EPS Reconciliation – Q3 2017 versus Q3 2016
PSEG EPS Reconciliation – Q3 2017 versus Q3 2016 Utility investment, cost control and mild weather drive Q3 results $1.00 $0.88 (0.01) (0.03) (0.02) $0.82 $0.78 $0.80 Transmission 0.04 Capacity 0.01 $0.64 Energy Strong 0.02 Lower Absence of Tax Benefit Volume (0.02) $0.60 Weather (0.03) and Recontra
Slide 13: Year-to-Date Results by Subsidiary
PSEG – Year-to-Date Results by Subsidiary PSEG YTD EPS Summary – Nine months ended September 30 GAAP Net Income/(Loss) 2017 2016 Change PSE&G $ 1.49 $ 1.37 $ 0.12 PSEG Power $ (0.26) $ 0.63 $ (0.89) PSEG Enterprise/Other $ (0.01) $ (0.06) $ 0.05 Total PSEG $ 1.22 $ 1.94 $ (0.72) Non-GAAP Operating E
Slide 14: EPS Reconciliation – YTD 2017 versus YTD 2016
PSEG EPS Reconciliation – YTD 2017 versus YTD 2016 Utility investment and cost control drive year-to-date results 0.12 (0.08) (0.04) $2.36 $2.36 $1.94 Transmission 0.11 Capacity 0.02 Interest Electric and Gas Expense, Higher Gas Taxes Margin 0.05 Send-out 0.02 and Other Weather (0.03) Lower Volume D
Slide 15: PSE&G 2017 Q3 Review
PSE&G 2017 Q3 Review
Slide 16: PSE&G EPS Reconciliation – Q3 2017 versus Q3 2016
PSE&G EPS Reconciliation – Q3 2017 versus Q3 2016 Continued investment and cost containment contributed to margin, offset by mild weather 0.70 0.60 0.00 $0.50 0.01 (0.02) $0.49 0.50 Transmission 0.04 O&M 0.01 0.40 Absence of Energy Strong 0.02 Tax Benefit D&A (0.01) 0.30 Weather (0.03) and Other 0.2
Slide 17: Q3 2017 weather significantly cooler than Q3 2016 and normal
Q3 2017 weather significantly cooler than Q3 2016 and normal PSE&G Monthly Weather Summary 2017 vs. 2016 vs. Normal Monthly Temperature Humidity Index (THI) Total Hours at 90°F or Higher July August September Q3 2017 temperature-humidity index Q3 2017 total hours at or above 90°F was ~27% lower than
Slide 18: PSE&G – Q3 Highlights
PSE&G – Q3 Highlights Operations On a weather normalized basis, total electric sales were down slightly (0.6%) for the quarter and flat for the trailing 12 months ended September 30 Q3 2017 weather was ~27% cooler than Q3 2016 and ~5% cooler than normal based on the Temperature-Humidity Index; hot w
Slide 19: Power 2017 Q3 Review
PSEG Power 2017 Q3 Review
Slide 20: Power EPS Reconciliation – Q3 2017 versus Q3 2016
PSEG Power EPS Reconciliation – Q3 2017 versus Q3 2016 Fewer outage-related days and cost control offset lower prices 0.40 $0.34 (0.06) 0.03 $0.31 0.30 $0.27 $0.27 Capacity 0.01 O&M 0.02 0.20 Lower Volume (0.02) D&A, Interest 0.10 Recontracting and and Taxes 0.01 Lower Prices (0.05) 0.00 Q3 2016 Q3
Slide 21: Power – Q3 Generation down 6% in response to mild weather
PSEG Power – Q3 Generation down 6% in response to mild weather PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%) PSEG Power – Fuel Costs Quarter ended Quarter ended 15,000 14,110 September 30 September 30 13,304 2016 2017 ($ millions) 2016 2017 5,754 3,853 10,000 Combined Gas $ 83 $ 6
Slide 22: Power – YTD Generation down 2% in response to mild weather
PSEG Power – YTD Generation down 2% in response to mild weather PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%) PSEG Power – Fuel Costs Nine months Nine months 39,756 39,090 ended ended September 30 40,000 September 30 ($ millions) 2016 2017 14,059 10,924 2016 2017 30,000 Gas $ 215
Slide 23: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Mild Summer weather tempered demand, energy prices and generation output PS Zone basis improved over Q3 2016, despite lower pricing Capacity revenues up slightly vs. Q3 2016 reflecting a step-up in New England capacity pricing to $232 MW/day Regional spark sprea
Slide 24: Hedging Update – Forecast of output unchanged
Hedging Update – Forecast of output unchanged Contracted Energy* Oct-Dec 2017 2018 2019 Volume TWh 8 35 35 Base Load % Hedged 100% 100% 50-55% (Nuclear and Base Load Coal) Price $/MWh $45 $41 $39 Volume TWh 3 18 25 Intermediate, Combined Cycle, % Hedged 50-55% 10-15% 0% Peaking Price $/MWh $45 $41 $
Slide 25: Power – Q3 Highlights
PSEG Power – Q3 Highlights Operations Q3 output down 6% reflecting mild weather and lower energy prices Nuclear fleet achieved average capacity factor of 96.1% in Q3, producing 8.2 TWh of energy CCGT fleet capacity factor was 51.0% versus 73.6% in Q3 2016, reflecting lower demand; CCGT availability
Slide 26: PSEG
PSEG
Slide 27: Financial Highlights
PSEG Financial Highlights Reiterating 2017 non-GAAP Operating Earnings guidance 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 (
Slide 28: 2017 Guidance - By Subsidiary - Unchanged
PSEG 2017 Guidance - By Subsidiary - Unchanged 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)* $1,4
Slide 29: Liquidity as of September 30, 2017
PSEG Liquidity as of September 30, 2017 28
Slide 30: 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 31: 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 how they differ from Net Income/(Loss). B
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