Public Service Enterprise Group Incorporated · NYSE:PEG

Public Service Enterprise — Q2 2012 Earnings Presentation

35 slides from Public Service Enterprise's earnings presentation, Jul 31, 2012

  1. Slide 1: PSEG Earnings Conference Call 2nd Quarter 2012

    Public Service Enterprise Group PSEG Earnings Conference Call 2nd Quarter 2012 July 31, 2012

  2. 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

  3. 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

  4. Slide 4: 2012 Q2 Review

    PSEG 2012 Q2 Review Caroline Dorsa EVP and Chief Financial Officer

  5. Slide 5: Q2 Earnings Summary

    Q2 Earnings Summary Quarter ended June 30 $ millions (except EPS) 2012 2011 Operating Earnings $ 215 $ 301 Reconciling Items, Net of Tax (4) 19 Income from Continuing Operations $ 211 $ 320 Discontinued Operations, Net of Tax - 3 Net Income $ 211 $ 323 EPS from Operating Earnings* $ 0.43 $ 0.59 4 *

  6. Slide 6: First Half 2012 Earnings Summary

    First Half 2012 Earnings Summary Six months ended June 30 $ millions (except EPS) 2012 2011 Operating Earnings $ 647 $ 732 Reconciling Items, Net of Tax 57 50 Income from Continuing Operations $ 704 $ 782 Discontinued Operations - 67 Net Income $ 704 $ 849 EPS from Operating Earnings* $ 1.28 $ 1.44

  7. Slide 7: Q2 2012 Highlights

    PSEG – Q2 2012 Highlights  Operating Earnings of $0.43 vs. $0.59 per share in Q2 2011  Q2 results met operational and financial targets  Continued strong availability of CCGTs, strong production from Nuclear, and Fossil’s control of O&M supported results  Focused on financially disciplined growt

  8. Slide 8: Maintaining 2012 Guidance

    PSEG – Maintaining 2012 Guidance $3.12 $2.74 $2.25 - $2.50E 2010 Operating Earnings* 2011 Operating Earnings* 2012 Guidance 7 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

  9. Slide 9: 2012 Q2 Operating Company Review

    PSEG 2012 Q2 Operating Company Review

  10. Slide 10: Q2 Operating Earnings by Subsidiary

    Q2 Operating Earnings by Subsidiary Quarter ended June 30 Operating Earnings Earnings per Share $ millions (except EPS) 2012 2011 2012 2011 PSEG Power $ 110 $ 186 $ 0.22 $ 0.36 PSE&G 101 105 0.20 0.21 PSEG Energy Holdings/ 4 10 0.01 0.02 Enterprise Operating Earnings* $ 215 $ 301 $ 0.43 $ 0.59 9 * S

  11. Slide 11: EPS Reconciliation – Q2 2012 versus Q2 2011

    PSEG EPS Reconciliation – Q2 2012 versus Q2 2011 0.75 $0.59 (.14) 0.50 (.01) (.01) $0.43 $ / share Lower Pricing (.05) Transmission .02 Lower Lease Lower Volume (.02) Income Weather (.01) Lower Capacity (.03) 0.25 O&M (.03) O&M (.02) D&A (.01) Other .02 Financing Costs .01 Other (.03) 0.00 Q2 2011 P

  12. Slide 12: First Half Operating Earnings by Subsidiary

    First Half Operating Earnings by Subsidiary Six months ended June 30 Operating Earnings Earnings per Share $ millions (except EPS) 2012 2011 2012 2011 PSEG Power $ 306 $ 452 $ 0.60 $ 0.89 PSE&G 298 268 0.59 0.53 PSEG Energy Holdings/ 43 12 0.09 0.02 Enterprise Operating Earnings* $ 647 $ 732 $ 1.28

  13. Slide 13: EPS Reconciliation – YTD 2012 versus YTD 2011

    PSEG EPS Reconciliation – YTD 2012 versus YTD 2011 1.75 1.50 $1.44 (.29) $1.28 .07 .06 1.25 Tax settlement Lower Pricing (.16) Transmission .05 1.00 $ / share Lower Volume (.03) Renewables and Other Lower Capacity (.11) Investments .01 0.75 Financing Costs .03 O&M (.04) O&M .02 Weather and 0.50 Dema

  14. Slide 14: Power 2012 Q2 Review

    PSEG Power 2012 Q2 Review

  15. Slide 15: Power – Q2 2012 EPS Summary

    PSEG Power – Q2 2012 EPS Summary $ millions (except EPS) Q2 2012 Q2 2011 Variance Operating Revenues $ 985 $ 1,285 $ (300) Operating Earnings 110 186 (76) NDT Funds Related Activity, 4 15 (11) Net of Tax Mark-to-Market, Net of Tax** (10) 4 (14) Income from Continuing Operations 104 205 (101) Discont

  16. Slide 16: Power EPS Reconciliation – Q2 2012 versus Q2 2011

    PSEG Power EPS Reconciliation – Q2 2012 versus Q2 2011 0.50 0.40 $0.36 (.13) 0.30 $ / share (.01) $0.22 0.20 Lower Pricing (.05) O&M (.02) Lower Volume (.02) Financing Costs .01 Lower Capacity (.03) 0.10 Other (.03) 0.00 Q2 2011 Q2 2012 Operating Operating Earnings* Earnings* 15 * See Page A for Ite

  17. Slide 17: Power – Generation Measures

    PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Quarter ended June 30 Quarter ended June 30 15,000 13,322 12,706 2011 2012 Nuclear 90.3% 87.2% 3,824 4,177 Coal NJ (Coal/Gas) 33% 14% 2,191 1,454 7,500 PA 77% 64% CT 7% 3% Combined Cycle 7,307 7,075 PJM

  18. Slide 18: Power – Generation Measures (Six Months)

    PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Six Months ended June 30 Six Months ended June 30 30,000 27,353 25,849 2011 2012 7,614 Nuclear 94.6% 92.7% 8,219 Coal 20,000 4,503 NJ (Coal/Gas) 31% 8% 2,585 PA 80% 63% CT 15% 3% 10,000 Combined Cycle 15

  19. Slide 19: Power – Fuel Costs

    PSEG Power – Fuel Costs PSEG Power – Fuel Costs* Quarter ended June 30 YTD ended June 30 ($ millions) 2011 2012 ($ millions) 2011 2012 Coal 83 39 Coal 173 77 Oil & Gas 155 113 Oil & Gas 345 241 Total Fossil 238 152 Total Fossil 518 318 Nuclear 44 48 Nuclear 90 98 Total Fuel Cost 282 200 Total Fuel C

  20. Slide 20: Power – Gross Margin Performance

    PSEG Power – Gross Margin Performance  Margins declined with reduction in energy and capacity pricing  Migration volumes in line with expectations, margins influenced by warmer-than-normal weather  Output influenced by weather and compression in PJM dark spreads PSEG Power Gross Margin* ($/MWh) R

  21. Slide 21: Hedging Update

    Hedging Update… Contracted Energy* Jul -Dec 2012 2013 2014 Volume TWh 17 35 35 Base Load % Hedged 100% 85-90% 45-50% (Nuclear and Base Load Coal) Price $/MWh $58 $54 $54 Volume TWh 10 18 19 Intermediate Coal, Combined % Hedged 30-35% 0% 0% Cycle, Peaking Price $/MWh $58 $54 $54 Volume TWh 28-30 52-5

  22. Slide 22: Power – Q2 2012 Operating Highlights

    PSEG Power – Q2 2012 Operating Highlights Operations  Q2 output down 4.6% on lower coal dispatch and a Hope Creek refueling outage  Planned Hope Creek outage moved capacity factor for the nuclear fleet to 87.2% for Q2, 92.7% for the YTD period  Combined cycle output up 10%; continued strong equiv

  23. Slide 23: PSE&G 2012 Q2 Review

    PSE&G 2012 Q2 Review

  24. Slide 24: PSE&G – Q2 Earnings Summary

    PSE&G – Q2 Earnings Summary $ millions (except EPS) Q2 2012 Q2 2011 Variance Operating Revenues $ 1,407 $ 1,571 $ (164) Operating Expenses Energy Costs 622 815 (193) Operation & Maintenance 350 304 46 Depreciation & Amortization 188 172 16 Taxes Other than Income Taxes 20 28 (8) Total Operating Expe

  25. Slide 25: PSE&G EPS Reconciliation – Q2 2012 versus Q2 2011

    PSE&G EPS Reconciliation – Q2 2012 versus Q2 2011 0.30 .02 (.02) $0.21 (.01) $0.20 0.20 Transmission D&A (.01) $ / share Weather O&M (.03) Other .02 0.10 0.00 Q2 2011 Q2 2012 Operating Operating Earnings Earnings 24

  26. Slide 26: PSE&G – Monthly Summer Weather Data

    PSE&G – Monthly Summer Weather Data PSE&G Monthly Temperature Humidity Index (THI) 2012 vs. 2011 vs. Normal 4,000 3,600 -16.6% Q2 2012 vs. Q2 2011 3,200 + 9.5% Q2 2012 vs. Normal 3,459 2,800 2,998 2,400 2,717 2,000 THI 1,600 1,200 1,431 1,325 800 403 799 400 179 156 0 April May June 2012 2011 Normal

  27. Slide 27: PSE&G – Q2 Operating Highlights

    PSE&G – Q2 Operating Highlights Operations  Mild Winter and early Spring weather warmer than normal but below Q2 2011  O&M remains under control Regulatory and Market Environment  NPS proceeding on Susquehanna-Roseland final EIS in October 2012  BPU approved North Central Reliability Project Jun

  28. Slide 28: Energy Holdings/Enterprise 2012 Q2 Review

    PSEG Energy Holdings/Enterprise 2012 Q2 Review

  29. Slide 29: Energy Holdings/Enterprise – Q2 2012 Earnings Summary

    PSEG Energy Holdings/Enterprise – Q2 2012 Earnings Summary $ millions (except EPS) Q2 2012 Q2 2011 Variance Operating Earnings $ 4 $ 10 $ (6) Lease Related Activity 2 - 2 Net Income $ 6 $ 10 (4) EPS from Operating Earnings* $ 0.01 $ 0.02 $ (0.01) 28 * See Page A for Items excluded from Income from C

  30. Slide 30: Energy Holdings/Parent – Q2 Operating Highlights

    PSEG Energy Holdings/Parent – Q2 Operating Highlights Financial  10-year LIPA management services agreement approved by New York State Office of the Comptroller, NYS Attorney General and IRS  Payments on Holdings’ remaining lease portfolio are current  $75 million investment in Queen Creek Arizon

  31. Slide 31: PSEG

    PSEG

  32. Slide 32: Financial Highlights

    PSEG Financial Highlights  Maintaining 2012 Operating Earnings guidance of $2.25 - $2.50 per share  Q2 and YTD operating EPS in-line with expectations  Focused on maintaining operating efficiency and customer reliability  Financial position remains strong  Debt as a percentage of capital at 41%

  33. Slide 33: 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 32 * See Page A for Items

  34. Slide 34: Liquidity as of June 30, 2012

    PSEG Liquidity as of June 30, 2012 Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Apr-16 $600 $16 $584 PSEG / 5-Year Credit Facility (Power) Mar-17 $1,600 $121 $1,479 Power 5-Year Credit Facility (Power) Apr-16 $1,000 $0 $1,000 5-Year Bilateral - Credit Suiss

  35. Slide 35: 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 Six Months Ended For the Twelve Mon

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