Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q1 2016 Earnings Presentation
32 slides from Public Service Enterprise's earnings presentation, Apr 29, 2016
Slide 1: PSEG Earnings Conference Call 1st Quarter 2016
EXHIBIT 99.1 Public Service Enterprise Group PSEG Earnings Conference Call st 1 Quarter 2016 April 29, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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-loo
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: 2016 Q1 Review
PSEG 2016 Q1 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q1 Earnings Summary – Solid Operating Performance, Results Impacted by Extreme Weather Comparisons
Q1 Earnings Summary – Solid Operating Performance, Results Impacted by Extreme Weather Comparisons Quarter ended March 31 $ Millions (except EPS) 2016 2015 Operating Earnings* $ 463 $ 529 Reconciling Items, Net of Tax 8 57 Net Income $ 471 $ 586 EPS from Operating Earnings* $ 0.91 $ 1.04 * See Slide
Slide 6: PSEG – Q1 2016 Highlights
PSEG – Q1 2016 Highlights Solid Operating Earnings – Maintaining Guidance for 2016 Operating Earnings* of $0.91 per share vs. $1.04 per share in Q1 2015 Power results impacted by extremes in weather comparisons and low prices PSE&G’s expanded investment in transmission and distribution drives improv
Slide 7: Maintaining 2016 Earnings Guidance $2.80 - $3.00E
Maintaining 2016 Earnings Guidance Guidance assumes normal weather and unit operations $2.91 $2.80 - $3.00E $2.76 2014 2015 2016 Operating Earnings* Guidance * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. E = Estimate. 6
Slide 8: 2016 Q1 Operating Company Review
PSEG 2016 Q1 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 9: Q1 Operating Earnings by Subsidiary
Q1 Operating Earnings by Subsidiary Quarter ended March 31 $ Millions (except EPS) Operating Earnings Earnings per Share 2016 2015 2016 2015 PSE&G $ 262 $ 242 $ 0.52 $ 0.47 PSEG Power 184 278 0.36 0.55 PSEG Enterprise/Other 17 9 0.03 0.02 Operating Earnings* $ 463 $ 529 $ 0.91 $ 1.04 * See Slide A f
Slide 10: EPS Reconciliation – Q1 2016 versus Q1 2015
PSEG EPS Reconciliation – Q1 2016 versus Q1 2015 $1.20 0.05 (0.19) $1.04 $1.00 0.01 $0.91 Transmission Earnings 0.04 $0.80 Lower Gas Send-Out/ PSEG Energy Strong Fixed Cost Recovery (0.12) Long Island Recovery 0.01 $0.60 Re-contracting and Lower Taxes Weather (0.02) Volume (0.09) $0.40 Distribution
Slide 11: PSE&G 2016 Q1 Review
PSE&G 2016 Q1 Review
Slide 12: PSE&G – Q1 EPS Summary
PSE&G – Q1 EPS Summary $ Millions (except EPS) Q1 2016 Q1 2015 Variance Operating Revenues $ 1,712 $ 2,002 $ (290) Operating Expenses Energy Costs 729 892 (163) Operation & Maintenance 382 412 (30) Depreciation & Amortization 139 247 (108) Total Operating Expenses 1,250 1,551 (301) Operating Earning
Slide 13: PSE&G EPS Reconciliation – Q1 2016 versus Q1 2015
PSE&G EPS Reconciliation – Q1 2016 versus Q1 2015 $0.60 0.02 $0.52 $0.47 0.03 Distribution O&M, Transmission $0.40 Earnings 0.04 Taxes & Other Energy Strong Recovery 0.01 $0.20 Weather (0.02) $0.00 Q1 2015 Q1 2016 Operating Operating Earnings* Earnings* * Operating Earnings is equal to Net Income. 1
Slide 14: PSE&G – Monthly Heating Degree Days
PSE&G – Monthly Heating Degree Days Q1 2016 vs. Q1 2015 vs. Q1 Normal 1250 1,169 1,122 1000 971 993 856 847 750 800 682 500 511 250 0 January February March 2016 2015 Normal Q1 2016 Winter weather, as defined by heating degree days, was ~27% warmer than Q1 2015 (the coldest winter in 45 years) and ~
Slide 15: PSE&G's spending drives high single-digit growth in rate base through 2020
PSE&G’s spending drives high single-digit growth in rate base through 2020 with known investments 2015 – 2018E Rate Base 2015 – 2020E Rate Base 2015 – 2020E Potential Rate CAGR Growth of ~10% CAGR Growth of ~8% Base CAGR Growth of ~10% ~$21.1B ~$19.5B ~$1.6B ~$4.3B ~$17.7B ~$1.8B ~$2.7B ~$10.2B Tran
Slide 16: Continued identification of investment opportunities focused on improving reliability
Continued identification of investment opportunities focused on improving reliability for our customers 2016-2020E PSE&G Capital Spending E = ESTIMATE. DATA AS OF MARCH 2016 15
Slide 17: PSE&G – Q1 2016 Operating Highlights
PSE&G – Q1 2016 Operating Highlights Operations th Q1 2016 was the 5 warmest in our records vs. Q1 2015 – the coldest winter in 45 years Heating degree days were 27% below Q1 2015 and 10% below normal Weather normalized electric sales were lower by 1.8% for Q1 but flat on a trailing 12 month basis W
Slide 18: Power 2016 Q1 Review
PSEG Power 2016 Q1 Review
Slide 19: Power – Q1 Earnings Summary
PSEG Power – Q1 Earnings Summary $ Millions (except EPS) Q1 2016 Q1 2015 Variance Operating Revenues $ 1,313 $ 1,725 $ (412) Operating Earnings* $ 184 $ 278 $ (94) Reconciling Items, Net of Tax* 8 57 (49) Net Income $ 192 $ 335 $ (143) EPS from Operating Earnings* $ 0.36 $ 0.55 $ (0.19) Adjusted EBI
Slide 20: Power EPS Reconciliation – Q1 2016 versus Q1 2015
PSEG Power EPS Reconciliation – Q1 2016 versus Q1 2015 $0.75 $0.55 (0.25) $0.50 0.06 $0.36 $0.25 Lower Gas Send-Out and Fixed Cost Recovery (0.12) O&M 0.05 Lower Interest Re-Contracting and Lower and Other 0.01 Volume (0.09) Capacity (0.04) $0.00 Q1 2015 Q1 2016 Operating Operating Earnings* Earning
Slide 21: Power's Q1 2016 and Full-Year 2016 Guidance for Adjusted EBITDA
PSEG Power’s Q1 2016 and Full-Year 2016 Guidance for Adjusted EBITDA PSEG Power - Adjusted EBITDA* Three Months Ended Full-Year 2016 March 31, Guidance ($ Millions) 2016 2015 Low High Operating Earnings** $184 $278 $490 $540 Add: Fossil Major Maintenance, pre-tax 7 49 80 80 Depreciation & Amortizati
Slide 22: Power – Generation Measures
PSEG Power – Generation Measures Generation by Fuel (GWh)** Fleet Capacity Factors (%) Quarter ended March 31 Quarter ended March 31 15,000 14,538 13,201 2015 2016 4,177 Combined 3,754 Cycle PJM and NY 55% 52% 2,529 1,028 Coal* 7,500 NJ (Coal/Gas) 17% 0.4% PA 91% 59% 8,419 7,832 CT 68% 7% Nuclear 95
Slide 23: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended March 31 ($ Millions) 2015 2016 Coal $82 $27 Oil & Gas 247 66 Total Fossil 329 93 Nuclear 55 58 Total Fuel $384 $151 Cost Total Generation 14,538 13,201 (GWh) $ / MWh 26.41 11.44 22
Slide 24: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Q1 spot prices significantly lower across PJM, ISO-NE, and NYISO versus year ago, driven by abnormally warm weather and related lack of demand Capacity revenue affected by HEDD retirements in Q2 2015 Access to lower-cost Marcellus gas continues to benefit spark
Slide 25: Hedging Update
Hedging Update Contracted Energy* Apr-Dec 2016 2017 2018 Volume TWh 26 36 36 Base Load % Hedged 100% 75-80% 35-40% (Nuclear and Base Load Coal) Price $/MWh $49 $49 $49 Volume TWh 14 19 24 Intermediate Coal, Combined % Hedged 25-30% 0% 0% Cycle, Peaking Price $/MWh $49 -- -- Volume TWh 39-41 54-56 59
Slide 26: Power – Q1 Operating Highlights
PSEG Power – Q1 Operating Highlights Operations Q1 output down 9.2% to 13.2 GWh on warm winter weather and lower demand vs Q1 2015 Strong nuclear performance: GWh production up 7.5% resulting in a fleet capacity factor of 99.7% CCGT availability remains strong; production down 5% on lower demand Reg
Slide 27: PSEG
PSEG
Slide 28: Financial Highlights
PSEG Financial Highlights Maintaining 2016 Operating Earnings* guidance of $2.80 - $3.00 per share Focused on maintaining operating efficiency and customer reliability Salem Q2 refueling outage extended to replace and repair baffle bolts in reactor vessel PSE&G expected to contribute over 60% of 201
Slide 29: 2016 Operating Earnings Guidance - By Subsidiary
PSEG 2016 Operating Earnings Guidance - By Subsidiary Segment Earnings Guidance and Prior Results $ Millions (except EPS) 2016E 2015 PSE&G $875 - $925 $787 PSEG Power $490 - $540 $653 PSEG Enterprise/Other $60 - $60 $36 Operating Earnings* $1,425 - $1,525 $1,476 Earnings per Share $2.80 - $3.00E $2.
Slide 30: Liquidity as of March 31, 2016
PSEG Liquidity as of March 31, 2016 Expiration Total Available Company Facility Date Facility Usage Liquidity ($ Millions) PSE&G 5-year Credit Facility Apr-20 $629 (A) $14 $615 PSEG Money Pool PSEG / Power 5-Year Credit Facility (Power) Apr-19 $1,600 $202 $1,398 5-Year Credit Facility (Power) Apr-20
Slide 31: Items Excluded from Net Income to Reconcile to Operating Earnings
Items Excluded from Net Income to Reconcile to Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings Reconciliation Three Months Ended Year-Ended Reconciling Items, net of tax March 31, December 31, 2016 2015 2015 2014 ($ Millions, Unaudited) Operating Earni
Slide 32: Items Excluded to Reconcile to Operating Earnings and Adjusted EBITDA
Items Excluded from Net Income to Reconcile to Operating Earnings and Adjusted EBITDA PSEG Power Adjusted EBITDA Reconciliation Three Months Ended Year-Ended Reconciling Items March 31, December 31, 2016 2015 2015 2014 ($ Millions, Unaudited) Adjusted EBITDA $ 416 $ 626 $ 1,563 $ 1,584 Fossil Major
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