Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q3 2014 Earnings Presentation
33 slides from Public Service Enterprise's earnings presentation, Oct 30, 2014
Slide 1: PSEG Earnings Conference Call 3rd Quarter 2014
Public Service Enterprise Group PSEG Earnings Conference Call 3rd Quarter 2014 October 30, 2014 EXHIBIT 99.1
Slide 2: GAAP Disclaimer
GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings is a non-GAAP financial measure that differs from Net Income because it excludes gains or losses associa
Slide 3: PSEG 2014 Q3 Review
PSEG 2014 Q3 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 4: Q3 Earnings Summary
Q3 Earnings Summary Quarter ended September 30 $ millions (except EPS) Operating Earnings $ 393 $ 385 Reconciling Items, Net of Tax Net Income $ 444 $ 390 EPS from Operating Earnings* $ 0.77 $ 0.76 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings.
Slide 5: Year to Date Earnings Summary
Year to Date Earnings Summary Nine months ended September 30 $ millions (except EPS) Operating Earnings $ 1,153 $ 1,061 Reconciling Items, Net of Tax (111) (18) Net Income $ 1,042 $ 1,043 EPS from Operating Earnings* $ 2.27 $ 2.09 * See Slide A for Items excluded from Net Income to reconcile to Oper
Slide 6: Q3 2014 Highlights
PSEG – Q3 2014 Highlights Operating Earnings of $0.77 vs. $0.76 per share in Q3 2013 Delivered solid results in the quarter as PSE&G’s continuing investment in transmission drove results Narrowed 2014 full–year, operating earnings guidance to $2.60-$2.75 per share, from $2.55-$2.75 per share prior E
Slide 7: PSEG 2014 Another Year of Growth
$2.60 - $2.75E PSEG – 2014 Another Year of Growth $2.44 $2.58 2014 operating earnings guidance narrowed; forecast full-year at upper end of range, assuming normal weather and unit operations for rest of year 2012 Operating Earnings* 2013 Operating Earnings* 2014 Operating Earnings Guidance * See Sli
Slide 8: 2014 Q3 Operating Company Review
PSEG 2014 Q3 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer
Slide 9: Q3 Operating Earnings by Subsidiary
Q3 Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) PSE&G $ 200 $ 168 $ 0.39 $ 0.33 PSEG Power 0.34 0.43 PSEG Enterprise/Other (4) 0.04 - Operating Earnings* $ 393 $ 385 $ 0.77 $ 0.76 Quarter ended September 30 * See Slide A for Items excluded from Net I
Slide 10: EPS Reconciliation – Q3 2014 versus Q3 2013
PSEG EPS Reconciliation – Q3 2014 versus Q3 2013 Capacity (0.09) Re-Contracting & Market Pricing (0.04) Weather (0.03) O&M 0.06 Taxes & Other 0.01 Transmission 0.04 Electric Volume & Demand 0.01 Weather (0.02) Distribution O&M 0.02 Interest & Other 0.01 Q3 2014 Operating Earnings* Q3 2013 Operating
Slide 11: Year to Date Operating Earnings by Subsidiary
Year to Date Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) PSE&G $ 565 $ 468 $ 1.11 $ 0.92 PSEG Power 1.09 1.17 PSEG Enterprise/Other (2) 0.07 - Operating Earnings* $ 1,153 $ 1,061 $ 2.27 $ 2.09 Nine months ended September 30 • See Slide A for Items e
Slide 12: EPS Reconciliation – YTD 2014 versus YTD 2013
PSEG EPS Reconciliation – YTD 2014 versus YTD 2013 YTD 2014 Operating Earnings* YTD 2013 Operating Earnings* Capacity 0.05 Re-Contracting & Market Pricing (0.07) Weather (0.03) Lower Volume (0.01) O&M (0.02) D&A, Taxes and Other 0.00 PSEG Power** Transmission 0.10 Gas Volume, Demand & Other Revenue
Slide 13: PSE&G 2014 Q3 Review
PSE&G 2014 Q3 Review
Slide 14: PSE&G – Q3 Earnings Summary
PSE&G – Q3 Earnings Summary $ millions (except EPS) Q3 2014 Q3 2013 Variance Operating Revenues $ 1,655 $ 1,666 (11) Operating Expenses Energy Costs Operation & Maintenance (42) Depreciation & Amortization Taxes Other than Income Taxes - (15) Total Operating Expenses 1,272 1,320 (48) Operating Earni
Slide 15: PSE&G EPS Reconciliation – Q3 versus Q3
PSE&G EPS Reconciliation – Q3 versus Q3 Q3 2014 Operating Earnings Q3 2013 Operating Earnings Transmission 0.04 Electric Volume & Demand 0.01 Distribution O&M 0.02 Interest & Other 0.01 Weather $0.33 0.05 0.03 $0.39 (0.02) 0.00 0.10 0.20 0.30 0.40 0.50
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Slide 18: PSE&G – Q3 Operating Highlights
PSE&G – Q3 Operating Highlights Transmission projects on schedule and on budget Energy Strong investments underway: Gas mains replacement prioritized 2015 FERC Formula Rate filing submitted PSE&G lowered gas rates by 9% on 10/1; Additional BGSS rate credits to be implemented Nov 2014 to Jan – expect
Slide 19: Power 2014 Q3 Review
PSEG Power 2014 Q3 Review
Slide 20: Power – Q3 Earnings Summary
PSEG Power – Q3 Earnings Summary $ millions (except EPS) Q3 2014 Q3 2013 Variance Operating Revenues $ 1,138 $ 1,174 $ (36) Operating Earnings (50) Reconciling Items, Net of Tax** Net Income (4) EPS from Operating Earnings* $ 0.34 $ 0.43 $ (0.09) * See Slide A for Items excluded from Net Income to r
Slide 21: PSEG Power EPS Reconciliation – Q3 2014 versus Q3 2013
Capacity (0.09) Re-Contracting and Market Pricing (0.04) Weather (0.03) PSEG Power EPS Reconciliation – Q3 2014 versus Q3 2013 Q3 2014 Operating Earnings* Q3 2013 Operating Earnings* O&M Taxes and Other $0.43 0.06 0.01 $0.34 (0.16) 0.00 0.10 0.20 0.30 0.40 0.50 * See Slide A for Items excluded from
Slide 22: Power – Generation Measures
PSEG Power – Generation Measures Quarter ended September 30 Total Nuclear Total Coal* Oil & Natural Gas * Includes figures for Pumped Storage. Includes Hudson and Mercer when run on gas. PSEG Power – Generation (GWh) 14,111 14,690 Quarter ended September 30 PSEG Power – Capacity Factors (%) 7,498 7,
Slide 23: Power – Generation Measures, Nine Months
PSEG Power – Generation Measures Nine Months ended September 30 Total Nuclear Total Coal* Oil & Natural Gas PSEG Power – Generation (GWh) 40,986 41,306 Nine Months ended September 30 PSEG Power – Capacity Factors (%) 22,783 22,152 5,526 6,096 12,677 13,058 15,000 30,000 45,000 Combined Cycle PJM and
Slide 24: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended September 30 ($ millions) Coal 45.1 42.2 Oil & Gas 146.1 139.5 Total Fossil 191.2 181.7 Nuclear 56.5 53.2 Total Fuel Cost 247.7 234.9 Total Generation (GWh) 14,111 14,690 $ / MWh 17.55 15.99 Nine months ended September 30 ($ millions) Coa
Slide 25: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Capacity pricing reset to $166/MW-day on June 1, to remain stable over multi-year period Mild summer weather weighed on spot market prices Lower s park spreads compared with Q3 2013 PSEG Power Gross Margin ($/MWh) $47 $51 $40 Quarter ended September 30 Nine mont
Slide 26: Power expanding supply of low-cost Marcellus gas
PSEG Power expanding supply of low-cost Marcellus gas PSEG plans to invest $100-$120 million in the to-be-constructed PennEast Pipeline, a 105.5 mile pipeline that would bring gas from eastern Pennsylvania to New Jersey PSEG ER&T would contract for approximately 125mmcf/day of PennEast’s 1 bcf/day c
Slide 27: Hedging Update
Volume TWh Base Load % Hedged 100% 100% 55-60% (Nuclear and Base Load Coal) Price $/MWh $49 $50 $49 Volume TWh Intermediate Coal, Combined % Hedged 50-55% 5-10% 0% Cycle, Peaking Price $/MWh $49 $50 $49 Hedging Update… Contracted Energy* Oct-Dec * Hedge percentages and prices as of September 30, 201
Slide 28: Regulatory and Market Environment; Power Q3 2014 Operating Highlights
Regulatory and Market Environment PJM active on ensuring future reliability: Capacity Performance proposal, review of DR participation in energy markets, and revision of demand (VRR) curve – all supportive of price formation Average hedge price for 2014 is $48/MWh vs. $50/MWh for PSEG Power – Q3 201
Slide 29: PSEG
PSEG
Slide 30: PSEG Financial Highlights: Guidance Narrowed to $2.60-$2.75
operating earnings guidance narrowed to $2.60 - $2.75 per share Focused on maintaining operating efficiency and customer reliability PSE&G’s operating earnings on track to grow at double-digit rate in PSE&G transmission investment program continues on-track and on-budget Financial position remains s
Slide 31: PSEG 2014 Operating Earnings Guidance by Subsidiary
$ millions (except EPS) 2014E PSE&G $710 – $745 $612 $528 PSEG Power $575 – $610 $710 $663 PSEG Enterprise/Other $35 – $40 $(13) $45 Operating Earnings* $1,320 – $1,395 $1,309 $1,236 Earnings per Share $2.60 – $2.75 $2.58 $2.44 PSEG 2014 Operating Earnings Guidance - By Subsidiary * See Slide A for
Slide 32: Liquidity as of September 30, 2014
PSEG Liquidity as of September 30, 2014 Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Mar-18 $600 $14 $586 5-Year Credit Facility (Power) Apr-19 $1,600 $76 $1,524 5-Year Credit Facility (Power) Mar-18 $1,000 $0 $1,000 5-Year Bilate
Slide 33: Items Excluded to Reconcile to Operating Earnings
A Items Excluded from Net Income to Reconcile to Operating Earnings Please see Slide 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Earnings Impact ($ Millions) Operating Earnings $ $ 1,153 $ 1,061 $ 1,309 $ 1,236 $ Gain (
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