Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q1 2014 Earnings Presentation
27 slides from Public Service Enterprise's earnings presentation, May 1, 2014
Slide 1: PSEG Earnings Conference Call 1st Quarter 2014
Public Service Enterprise Group PSEG Earnings Conference Call 1st Quarter 2014 May 1, 2014
Slide 2: Forward-Looking Statement
Forward-Looking Statement 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-look
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: 2014 Q1 Review
PSEG 2014 Q1 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q1 Earnings Summary
Q1 Earnings Summary Quarter ended March 31 $ millions (except EPS) 2014 2013 Operating Earnings $ 515 $ 433 Reconciling Items, Net of Tax (129) (113) Net Income $ 386 $ 320 EPS from Operating Earnings* $ 1.01 $ 0.85 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings.
Slide 6: Q1 2014 Highlights
PSEG – Q1 2014 Highlights Strong Earnings Operating earnings of $1.01 vs. $0.85 per share in Q1 2013 Power benefited from higher market pricing, market volatility and increased output Increased contribution to earnings from PSE&G’s investment in transmission Operational Excellence PSEG P
Slide 7: Maintaining 2014 Guidance
PSEG – Maintaining 2014 Guidance 2014 guidance reflects increased level of investment, pension savings and assumes normal weather and unit operations for rest of year $2.55 - $2.75E $2.44 $2.58 2012 Operating Earnings* 2013 Operating Earnings* 2014 Operating Earnings Guidance * See Slide A for Items
Slide 8: 2014 Q1 Operating Company Review
PSEG 2014 Q1 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer
Slide 9: Q1 Operating Earnings by Subsidiary
Q1 Operating Earnings by Subsidiary Quarter ended March 31 Operating Earnings Earnings per Share $ millions (except EPS) 2014 2013 2014 2013 PSEG Power $ 293 $ 254 $ 0.58 $ 0.50 PSE&G 214 179 0.42 0.35 PSEG Enterprise/Other 8 - 0.01 - Operating Earnings* $ 515 $ 433 $ 1.01 $ 0.85 * See Slide A for I
Slide 10: EPS Reconciliation – Q1 2014 versus Q1 2013
PSEG EPS Reconciliation – Q1 2014 versus Q1 2013 0.08 0.01 $1.01 1.00 0.07 $0.85 Capacity 0.11 Interest and 0.80 Transmission PSEG Net Earnings 0.03 Market Prices and Volume 0.02 Long Island Gas Volume & 0.60 Demand 0.02 Re-contracting (0.05) Weather 0.01 Gas Send-Out 0.05 $ / share Lower Pension Lo
Slide 11: PSE&G 2014 Q1 Review
PSE&G 2014 Q1 Review
Slide 12: PSE&G – Q1 EPS Summary
PSE&G – Q1 EPS Summary $ millions (except EPS) Q1 2014 Q1 2013 Variance Operating Revenues $ 2,145 $ 1,995 $ 150 Operating Expenses Energy Costs 1,045 967 78 Operation & Maintenance 462 427 35 Depreciation & Amortization 227 215 12 Taxes Other than Income Taxes - 21 (21) Total Operating Expenses 1,7
Slide 13: PSE&G EPS Reconciliation – Q1 2014 versus Q1 2013
PSE&G EPS Reconciliation – Q1 2014 versus Q1 2013 0.50 0.01 $0.42 0.06 0.00 0.40 $0.35 Taxes and Lower Other 0.30 Pension Transmission Expense Net Earnings 0.03 $ / share Q1 2013 0.02 Q1 2014 0.20 Operating Gas Volume & Distribution Operating Earnings* Demand 0.02 Earnings* O&M (0.02) 0.10 Weather 0
Slide 14: PSE&G – Q1 2014 Operating Highlights
PSE&G – Q1 2014 Operating Highlights Operations Q1 weather was significantly colder than Q1 2013: Heating degree days were 16% above Q1 2013 and 18% above normal Slowly improving economy providing some support to weather normalized electric sales: Overall improvement of 1.3%, with the residentia
Slide 15: Power 2014 Q1 Review
PSEG Power 2014 Q1 Review
Slide 16: Power – Q1 EPS Summary
PSEG Power – Q1 EPS Summary $ millions (except EPS) Q1 2014 Q1 2013 Variance Operating Revenues $ 1,700 $ 1,451 $ 249 Operating Earnings $ 293 $ 254 $ 39 Reconciling Items, Net of Tax** (129) (113) (16) Net Income $ 164 $ 141 $ 23 EPS from Operating Earnings* $ 0.58 $ 0.50 $ 0.08 * See Slide A for I
Slide 17: Power EPS Reconciliation – Q1 2014 versus Q1 2013
PSEG Power EPS Reconciliation – Q1 2014 versus Q1 2013 0.70 0.13 (0.04) (0.01) $0.58 0.60 $0.50 0.50 Lower Pension Taxes Expense 0.01 and Capacity 0.11 0.40 $ / share Other O&M (0.05) Market Prices 0.30 and Volume 0.02 0.20 Re-Contracting (0.05) 0.10 Gas Send-Out 0.05 0.00 Q1 2013 Q1 2014 Operating
Slide 18: Power – Generation Measures
PSEG Power – Generation Measures Generation by Fuel (GWh)** Fleet Capacity Factors (%) Quarter ended March 31 Quarter ended March 31 15,000 14,565 14,157 28% 2013 2014 3,975 of 3,813 Output Combined Cycle PJM and NY 52% 49% 2,207 2,541 Coal* 7,500 NJ (Coal/Gas) 19% 21% 55% of Output PA 85% 83% 8,137
Slide 19: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended March 31 ($ millions) 2013 2014 Coal $66 $87 Oil & Gas 178 365 Total Fossil 244 452 Nuclear 58 62 Total Fuel $302 $514 Cost Total Generation 14,157 14,565 (GWh) $ / MWh 21.33 35.29 18
Slide 20: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Weather driven volatility pushed natural gas and power prices to multi-year highs, offsetting decline in average hedge prices Q1 spot prices higher across PJM, ISO-NE, and NYISO Capacity prices higher year-over-year through May 2014; then resets to $166/MW
Slide 21: Hedging Update
Hedging Update… Contracted Energy* Apr-Dec 2014 2015 2016 Volume TWh 26 35 36 Base Load % Hedged 100% 75-80% 35-40% (Nuclear and Base Load Coal) Price $/MWh $49 $51 $51 Volume TWh 18 21 19 Intermediate Coal, Combined % Hedged 30-35% 0% 0% Cycle, Peaking Price $/MWh $49 $51 $51 Volume TWh 42-44 54-56
Slide 22: Power – Q1 2014 Operating Highlights
PSEG Power – Q1 2014 Operating Highlights Operations Q1 output up 3% under extreme weather conditions; nuclear capacity factor at 100% Advance gas path uprates (~63MW) accelerated at Linden for May in-service date Output of NJ coal units was 69% coal, 31% gas fueled Regulatory and Market Envir
Slide 23: PSEG
PSEG
Slide 24: Financial Highlights
PSEG Financial Highlights Maintaining 2014 operating earnings guidance of $2.55 - $2.75 per share Focused on maintaining operating efficiency and customer reliability PSE&G expected to grow at double-digit rate in 2014 and provide over 50% of operating earnings Executing existing 5-year, $6.
Slide 25: 2014 Operating Earnings Guidance - By Subsidiary
PSEG 2014 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2014E 2013 2012 PSE&G $705 – $745 $612 $528 PSEG Power $550 – $610 $710 $663 PSEG Enterprise/Other $35 – $40 $(13) $45 Operating Earnings* $1,290 – $1,395 $1,309 $1,236 Earnings per Share $2.55 – $2.75 $2.58 $2.44 24 * See
Slide 26: Liquidity as of March 31, 2014
PSEG Liquidity as of March 31, 2014 Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Mar-18 $600 1 $13 $587 PSEG / 5-Year Credit Facility (Power) Mar-17 $1,600 $67 $1,533 Power 5-Year Credit Facility (Power) Mar-18 $1,000 2 $0 $1,000
Slide 27: Items Excluded from Net Income to Reconcile to Operating Earnings
Items Excluded from Net Income to Reconcile to Operating Earnings Attachment 10 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Three Months Ended Year Ended Reconciling Items, net of tax March 31, December 31, 2014 2013 2013 2012 (Unaudited) Earnings Impact ($ Millions) Operating Earnings $ 515 $ 433
Public Service Enterprise Group — Q1 2014 Earnings Presentation on 6ix