Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q3 2012 Earnings Presentation
37 slides from Public Service Enterprise's earnings presentation, Nov 1, 2012
Slide 1: PSEG Earnings Conference Call 3rd Quarter 2012
Public Service Enterprise Group PSEG Earnings Conference Call 3rd Quarter 2012 November 1, 2012
Slide 2: Forward-Looking Statement
Forward-Looking Statement Readers are cautioned that statements contained in this presentation about our future performance, including future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical, are forward-looking statements for purposes o
Slide 3: 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 4: 2012 Q3 Review
PSEG 2012 Q3 Review Caroline Dorsa EVP and Chief Financial Officer
Slide 5: Q3 Earnings Summary
Q3 Earnings Summary Quarter ended September 30 $ millions (except EPS) 2012 2011 Operating Earnings $ 382 $ 420 Reconciling Items, Net of Tax (35) (155) Income from Continuing Operations $ 347 $ 265 Discontinued Operations, Net of Tax - 29 Net Income $ 347 $ 294 EPS from Operating Earnings* $ 0.75 $
Slide 6: Year to Date 2012 Earnings Summary
Year to Date 2012 Earnings Summary Nine months ended September 30 $ millions (except EPS) 2012 2011 Operating Earnings $ 1,029 $ 1,152 Reconciling Items, Net of Tax 22 (105) Income from Continuing Operations $ 1,051 $ 1,047 Discontinued Operations - 96 Net Income $ 1,051 $ 1,143 EPS from Operating E
Slide 7: PSEG – Q3 2012 Highlights
PSEG – Q3 2012 Highlights § Solid financial results -- Operating Earnings of $0.75 vs. $0.83 per share in Q3 2011 § Executing on operational goals ü Record output from CCGTs, strong production from Nuclear, and Power’s control of O&M supported results ü Transmission becoming a significant contributo
Slide 8: PSEG – Subsequent Events
PSEG – Subsequent Events ØIn late October 2012, Hurricane Sandy’s high winds, heavy rainfall and related flooding caused severe damage to our transmission and distribution system throughout our service territory as well as to some of our generation infrastructure in the northern part of New Jersey.
Slide 9: PSEG – Maintaining 2012 Guidance
PSEG – Maintaining 2012 Guidance $3.12 $2.74 $2.25 - $2.50E YTD 9/30/12 EPS $2.03 8 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
Slide 10: 2012 Q3 Operating Company Review
PSEG 2012 Q3 Operating Company Review
Slide 11: Q3 Operating Earnings by Subsidiary
Q3 Operating Earnings by Subsidiary Quarter ended September 30 Operating Earnings Earnings per Share $ millions (except EPS) 2012 2011 2012 2011 PSEG Power $ 217 $ 258 $ 0.43 $ 0.51 PSE&G 155 154 0.30 0.30 PSEG Energy Holdings/ 10 8 0.02 0.02 Enterprise Operating Earnings* $ 382 $ 420 $ 0.75 $ 0.83
Slide 12: EPS Reconciliation – Q3 2012 versus Q3 2011
PSEG EPS Reconciliation – Q3 2012 versus Q3 2011 1.00 $0.83 (.08) $0.75 0.75 Lower Pricing (.15) $ / share Higher Volume .01 0.50 Capacity .05 O&M .01 Transmission .03 Weather (.01) 0.25 O&M (.02) D&A (.01) Other .01 0.00 Q3 2011 PSEG Power PSE&G Energy Q3 2012 Operating Holdings/ Operating Earnings
Slide 13: Year to Date Operating Earnings by Subsidiary
Year to Date Operating Earnings by Subsidiary Nine months ended September 30 Operating Earnings Earnings per Share $ millions (except EPS) 2012 2011 2012 2011 PSEG Power $ 523 $ 710 $ 1.03 $ 1.40 PSE&G 453 422 0.89 0.83 PSEG Energy Holdings/ 53 20 0.11 0.04 Enterprise Operating Earnings* $ 1,029 $ 1
Slide 14: EPS Reconciliation – YTD 2012 versus YTD 2011
PSEG EPS Reconciliation – YTD 2012 versus YTD 2011 Tax Lower Pricing (.32) Transmission .08 Settlement Lower Volume (.02) Renewables $ / share and Other Lower Capacity (.06) Investments .01 Financing Costs .03 O&M (.06) O&M .03 Weather (.02) Lower D&A (.03) Coal Sales & Other (.03) Tax Settlement .0
Slide 15: Power 2012 Q3 Review
PSEG Power 2012 Q3 Review
Slide 16: Power – Q3 2012 EPS Summary
PSEG Power – Q3 2012 EPS Summary $ millions (except EPS) Q3 2012 Q3 2011 Variance Operating Revenues $ 1,038 $ 1,398 $ (360) Operating Earnings $ 217 $ 258 $ (41) NDT Funds Related Activity, 40 7 33 Net of Tax Mark-to-Market, Net of Tax** (76) 8 (84) Income from Continuing Operations 181 273 (92) Di
Slide 17: Power EPS Reconciliation – Q3 2012 versus Q3 2011
PSEG Power EPS Reconciliation – Q3 2012 versus Q3 2011 Lower Pricing (.15) O&M .01 Volume .01 $ / share Capacity .05 Q3 2011 Q3 2012 Operating Operating Earnings* Earnings* 16 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
Slide 18: Power – Generation Measures
PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Quarter ended September 30 Quarter ended September 30 14,919 14,426 2011 2012 Nuclear 90.6 92.0 Coal* NJ (Coal/Gas) 33.9 26.6 PA 83.2 79.0 CT 25.5 3.8 Combined Cycle PJM and NY 57.5 67.1 Total Nuclear To
Slide 19: Power – Generation Measures
PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Nine Months ended Nine Months ended September 30 September 30 41,779 40,769 2011 2012 Nuclear 93.3 92.5 Coal* NJ (Coal/Gas) 32.7 14.2 PA 80.9 68.7 CT 18.7 2.9 Combined Cycle PJM and NY 54.2 60.3 Total Nu
Slide 20: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs* Quarter ended September 30 YTD ended September 30 ($ millions) 2011 2012 ($ millions) 2011 2012 Coal 98.4 64.9 Coal 271.2 142.4 Oil & Gas 184.8 166.7 Oil & Gas 530.3 407.8 Total Fossil 283.2 231.6 Total Fossil 801.5 550.2 Nuclear 45.3 52.7 Nuclear 135
Slide 21: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance ü Highest ever combined cycle output ü Margins aided by increased reliance on low-cost, efficient CCGT fleet ü Migration volumes slightly lower than 2Q, in line with full-year estimate of 36%-40% PSEG Power Gross Margin* ($/MWh) Regional Performance Quarter ende
Slide 22: Hedging Update
Hedging Update… Contracted Energy* Oct -Dec 2012 2013 2014 Volume TWh 12 35 35 Base Load % Hedged 100% 90-95% 50-55% (Nuclear and Base Load Coal) Price $/MWh $54 $51 $49 Volume TWh 4 18 18 Intermediate Coal, Combined % Hedged 35-40% 0% 0% Cycle, Peaking Price $/MWh $54 $51 $49 Volume TWh 13 52-54 53
Slide 23: Power – Q3 2012 Operating Highlights
PSEG Power – Q3 2012 Operating Highlights Operations ü Q3 output increased 3% from the Q3 2011 level ü Combined-cycle production represented 32% of generation for Q3 and was the highest ever Summer output achieved by the CCGT fleet ü Strong nuclear performance has resulted in a YTD nuclear capacity
Slide 24: MOPR Reform – Comparison of Features
MOPR Reform – Comparison of Features Design Feature Existing MOPR Proposed MOPR Resource Type All new generating resources (except All new gas-fired resources (CC, CT, nuclear, coal, IGCC, hydro, wind, IGCC) over 20 MW (except for landfill solar, have zero minimum price gas and eligible cogeneration
Slide 25: PSE&G 2012 Q3 Review
PSE&G 2012 Q3 Review
Slide 26: PSE&G – Q3 Earnings Summary
PSE&G – Q3 Earnings Summary $ millions (except EPS) Q3 2012 Q3 2011 Variance Operating Revenues $ 1,683 $ 1,841 (158) Operating Expenses Energy Costs 756 943 (187) Operation & Maintenance 366 342 24 Depreciation & Amortization 216 197 19 Taxes Other than Income Taxes 24 31 (7) Total Operating Expens
Slide 27: PSE&G EPS Reconciliation – Q3 2012 versus Q3 2011
PSE&G EPS Reconciliation – Q3 2012 versus Q3 2011 .03 (.02) (.01) $0.30 $0.30 0.30 Weather Transmission O&M (.02) D&A (.01) $ / share 0.20 Other .01 0.10 0.00 Q3 2011 Q3 2012 Operating Operating Earnings Earnings 26
Slide 28: PSE&G – Monthly Summer Weather Data
PSE&G – Monthly Summer Weather Data PSE&G Monthly Temperature Humidity Index (THI) 2012 vs. 2011 vs. Normal 7,000 7,092 6,500 -7.8% Q3 2012 vs. Q3 2011 6,000 6,184 +20% Q3 2012 vs. Normal 5,500 5,000 5,308 4,500 4,967 4,730 4,000 4,489 THI 3,500 3,000 2,500 2,868 2,000 2,054 1,500 1,835 1,000 500 0
Slide 29: PSE&G – Q3 Operating Highlights
PSE&G – Q3 Operating Highlights Operations ü Weather in Q3 2012 warmer than normal but cooler than Q3 2011 ü Transmission revenues were $0.03 per share higher over Q3 2011 ü O&M remains under control Regulatory and Market Environment ü Received key regulatory approvals for the Susquehanna-Roseland t
Slide 30: Energy Holdings/Enterprise 2012 Q3 Review
PSEG Energy Holdings/Enterprise 2012 Q3 Review
Slide 31: Energy Holdings/Enterprise – Q3 2012 Earnings Summary
PSEG Energy Holdings/Enterprise – Q3 2012 Earnings Summary $ millions (except EPS) Q3 2012 Q3 2011 Variance Operating Earnings $ 10 $ 8 $ 2 Lease Related Activity 1 (170) 171 Net Income $ 11 $ (162) $ 173 EPS from Operating Earnings* $ 0.02 $ 0.02 - 30 * See Page A for Items excluded from Income fro
Slide 32: Energy Holdings/Enterprise – Q3 Operating Highlights
PSEG Energy Holdings/Enterprise – Q3 Operating Highlights Financial ü Payments on Holdings’ remaining lease portfolio are current ü A new $47 million investment in the Milford Solar Farm in Delaware with a completion target of January 2013 ü $75 million investment in Queen Creek Arizona solar farm;
Slide 33: PSEG
PSEG
Slide 34: Financial Highlights
PSEG Financial Highlights § Maintaining full-year operating earnings guidance of $2.25 - $2.50 per share ü Focused on maintaining operating efficiency and customer reliability § Executing on capital program § Financial position remains strong ü Debt as a percentage of capital at 41% at September 30
Slide 35: 2012 Operating Earnings Guidance - By Subsidiary
PSEG 2012 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2012E 2011A PSEG Power $575 – $665 $ 845 PSE&G $530 – $560 $ 521 PSEG Energy $35 – $45 $ 23 Holdings/Enterprise Operating Earnings* $1,140 – $1,270 $ 1,389 Earnings per Share $ 2.25 – $ 2.50 $2.74 34 * See Page A for Items
Slide 36: Liquidity as of September 30, 2012
PSEG Liquidity as of September 30, 2012 35
Slide 37: Items Excluded to Reconcile to Operating Earnings
Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) For the Three Months Ended For the Nine Months Ended For the Twelve Mo
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