Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q2 2016 Earnings Presentation
34 slides from Public Service Enterprise's earnings presentation, Jul 29, 2016
Slide 1: PSEG Earnings Conference Call Q2 2016
EXHIBIT 99.1 Public Service Enterprise Group PSEG Earnings Conference Call nd 2 Quarter 2016 July 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 Q2 Review
PSEG 2016 Q2 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q2 Earnings Summary
Q2 Earnings Summary Quarter ended June 30 $ millions (except EPS) 2016 2015 Operating Earnings* $ 289 $ 289 Reconciling Items (102) 56 Net Income $ 187 $ 345 EPS from Net Income $ 0.37 $ 0.68 EPS from Operating Earnings* $ 0.57 $ 0.57 * See Slide A for Items excluded from Net Income to reconcile to
Slide 6: First Half Earnings Summary
First Half Earnings Summary Six months ended June 30 $ millions (except EPS) 2016 2015 Operating Earnings* $ 752 $ 818 Reconciling Items (94) 113 Net Income $ 658 $ 931 EPS from Net Income $ 1.30 $ 1.83 EPS from Operating Earnings* $ 1.48 $ 1.61 * See Slide A for Items excluded from Net Income to re
Slide 7: Q2 2016 Highlights
PSEG – Q2 2016 Highlights Solid Results Net Income of $0.37 vs. $0.68 per share in Q2 2015 Operating Earnings of $0.57 vs. $0.57 per share in Q2 2015* Increased earnings contribution from PSE&G’s investment in Transmission Maintaining full-year 2016 Operating Earnings guidance of $2.80 - $3.00 per s
Slide 8: Maintaining 2016 Operating Earnings Guidance $2.80 - $3.00
Maintaining 2016 Operating Earnings Guidance $2.91 $2.80 - $3.00E $2.76 2014 2015 2016 Operating Earnings* Guidance Reaching the upper end of our guidance range in 2016 will be difficult even with improvements seen in the power markets, expectations for warm summer weather, normal operations and man
Slide 9: 2016 Q2 Operating Company Review
PSEG 2016 Q2 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 10: Q2 Operating Results by Subsidiary
Q2 Operating Results by Subsidiary Quarter ended June 30 Operating Results Earnings per Share $ millions (except EPS) 2016 2015 2016 2015 PSE&G $ 179 $ 167 $ 0.35 $ 0.33 PSEG Power* 91 110 0.18 0.22 PSEG Enterprise/Other 19 12 0.04 0.02 Operating Earnings* $ 289 $ 289 $ 0.57 $ 0.57 Reconciling Items
Slide 11: EPS Reconciliation – Q2 2016 versus Q2 2015
PSEG EPS Reconciliation – Q2 2016 versus Q2 2015 $0.68 0.70 $0.57 0.02 (0.04) 0.02 $0.57 0.60 Transmission Re-Contracting/ 0.50 Earnings Lower Prices/Gas PSEG-LI 0.03 Volumes (0.03) $0.37 0.40 Taxes and Distribution Capacity (0.02) Other 0.30 O&M and Volume (0.01) D&A (0.02) 0.20 Taxes and O&M 0.07
Slide 12: First Half Operating Results by Subsidiary
First Half Operating Results by Subsidiary Six months ended June 30 Operating Results Earnings per Share $ millions (except EPS) 2016 2015 2016 2015 PSE&G $ 441 $ 409 $ 0.87 $ 0.80 PSEG Power* 275 388 0.54 0.77 PSEG Enterprise/Other 36 21 0.07 0.04 Operating Earnings* $ 752 $ 818 $ 1.48 $ 1.61 Recon
Slide 13: EPS Reconciliation – First Half 2016 versus First Half 2015
PSEG EPS Reconciliation – First Half 2016 versus First Half 2015 2.00 $1.83 1.75 0.07 (0.23) $1.61 0.03 $1.48 1.50 Transmission Earnings 0.07 $1.30 Re-Contracting/ PSEG-LI 1.25 Lower Prices/ Weather (0.02) Gas Volumes Taxes and (0.12) Other Gas Volume and Demand 1.00 0.01 Lower Gas Send- Out and Fix
Slide 14: PSE&G 2016 Q2 Review
PSE&G 2016 Q2 Review
Slide 15: PSE&G – Q2 Earnings Summary
PSE&G – Q2 Earnings Summary $ millions (except EPS) Q2 2016 Q2 2015 Variance Operating Revenues $ 1,350 $ 1,466 $ (116) Operating Expenses Energy Costs 529 544 (15) Operation & Maintenance 352 368 (16) Depreciation & Amortization 136 234 (98) Total Operating Expenses 1,017 1,146 (129) Net Income $ 1
Slide 16: PSE&G EPS Reconciliation – Q2 2016 versus Q2 2015
PSE&G EPS Reconciliation – Q2 2016 versus Q2 2015 0.40 0.04 (0.02) $0.35 $0.33 0.30 Transmission Distribution Earnings O&M 0.03 and D&A 0.20 Taxes and Other 0.01 0.10 0.00 Q2 2015 Q2 2016 Net Income Net Income 15
Slide 17: PSE&G – Q2 2016 Weather Data
PSE&G – Q2 2016 Weather Data PSE&G Monthly Weather Summary 2016 vs. 2015 vs. Normal Monthly Heating Degree Days (HDD) Monthly Temperature Humidity Index (THI) 500 3,500 2016 2015 Normal 2016 2015 Normal 3,000 400 2,943 2,994 365 2,500 360 2,497 300 327 2,000 1,836 200 1,500 170 1,000 1,164 100 131 8
Slide 18: PSE&G – Q2 2016 Operating Highlights
PSE&G – Q2 2016 Operating Highlights Operations Q2 2016 weather was milder than Q2 2015 NJ economy continues to show improvement; but residential and commercial customer growth was offset by greater use of energy efficiency measures and lower industrial activity On a trailing 12-month basis, weather
Slide 19: PSEG Power 2016 Q2 Review
PSEG Power 2016 Q2 Review
Slide 20: PSEG Power – Q2 Earnings Summary
PSEG Power – Q2 Earnings Summary Q2 2016 Q2 2015 Variance $ millions (except EPS) Operating Revenues $ 714 $ 1,025 $ (311) Operating Earnings* 91 110 (19) Reconciling Items (102) 56 (158) Net Income (Loss) $ (11) $ 166 $ (177) EPS from Net Income (Loss) $ (0.02) $ 0.33 $ (0.35) EPS from Operating Ea
Slide 21: PSEG Power EPS Reconciliation – Q2 2016 versus Q2 2015
PSEG Power EPS Reconciliation – Q2 2016 versus Q2 2015 0.40 $0.33 0.30 $0.22 (0.06) 0.07 (0.05) 0.20 $0.18 Re-Contracting/ Absence of Lower Prices/Gas O&M 2015 Tax 0.10 Volumes (0.03) Credits and Other Capacity (0.02) Volume (0.01) $(0.02) 0.00 Q2 2015 Q2 2015 Q2 2016 Net Operating Operating Q2 2016
Slide 22: Power's Adjusted EBITDA - Q2 2016, YTD and Full-Year Guidance
PSEG Power’s Adjusted EBITDA - Q2 2016, YTD and Full-Year 2016 Guidance PSEG Power - Adjusted EBITDA* Three Months Six Months (YTD) Full-Year 2016 Ended June 30, Ended June 30, Guidance ($ millions) 2016 2015 2016 2015 Low High Operating Earnings** $91 $110 $275 $388 $460 $525 Add: Fossil Major Main
Slide 23: Power – Q2 2016 Generation Measures
PSEG Power – Q2 2016 Generation Measures Generation by Fuel (GWh)* Fleet Capacity Factors (%) Quarter ended June 30 Quarter ended June 30 14,000 13,233 12,446 2015 2016 4,831 Combined Cycle 4,551 PJM and NY 64% 62% 1,273 Coal** 912 7,000 NJ (Coal/Gas) 3% 0% PA 73% 57% 7,129 6,983 CT 0% 0% Nuclear 86
Slide 24: Power – YTD 2016 Generation Measures
PSEG Power – YTD 2016 Generation Measures Generation by Fuel (GWh)* Fleet Capacity Factors (%) Six Months ended June 30 Six Months ended June 30 30,000 27,771 25,646 2015 2016 9,007 Combined Cycle 8,305 20,000 PJM and NY 59% 57% 3,803 Coal** 1,939 NJ (Coal/Gas) 9% 0% PA 82% 58% 10,000 15,402 CT 34%
Slide 25: Power – Q2 and YTD Fuel Costs
PSEG Power – Q2 and YTD Fuel Costs PSEG Power – Fuel Costs Quarter ended June 30 YTD June 30 ($ millions) 2015 2016 ($ millions) 2015 2016 Coal $30 $22 Coal $112 $49 Oil & Gas 82 64 Oil & Gas 329 131 Total Fossil 112 86 Total Fossil 441 180 Nuclear 51 48 Nuclear 106 105 Total Fuel Cost $163 $134 Tot
Slide 26: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Wholesale energy prices affected by over-supply of natural gas Extended refueling outage at Salem 1 to replace degraded baffle bolts Decrease in average hedge price of $2 MWh vs. Q2 2015 Q2 year-over-year capacity revenues reflect HEDD peaking capacity retiremen
Slide 27: Hedging Update
Hedging Update Contracted Energy* Jul-Dec 2016 2017 2018 Volume TWh 17 36 36 Base Load % Hedged 100% 80-85% 40-45% (Nuclear and Base Load Coal) Price $/MWh $50 $48 $46 Volume TWh 8 18 23 Intermediate Coal, Combined % Hedged 30-35% 0% 0% Cycle, Peaking Price $/MWh $50 -- -- Volume TWh 25-26 53-55 58-
Slide 28: Power – Q2 2016 Operating Highlights
PSEG Power – Q2 2016 Operating Highlights Operations Q2 output down 6%; average nuclear capacity factor for the fleet was 83% vs. 86% in Q2 2015, as nuclear output declined by 2% to ~7 TWh, primarily reflecting the extended refueling outage at Salem 1 to replace degraded baffle bolts and an unplanne
Slide 29: PSEG
PSEG
Slide 30: Financial Highlights
PSEG Financial Highlights Maintaining full-year 2016 Operating Earnings guidance of $2.80 - $3.00 per share* Reaching the upper end of our guidance range in 2016 will be difficult even with improvements seen in the power markets, expectations for warm summer weather, normal operations and management
Slide 31: 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 $900 - $935 $787 PSEG Power* $460 - $525 $653 PSEG Enterprise/Other $65 - $65 $36 Operating Earnings* $1,425 - $1,525 $1,476 Earnings per Share $2.80 - $3.00E $2
Slide 32: Liquidity as of June 30, 2016
PSEG Liquidity as of June 30, 2016 Expiration Total Available Company Facility Date Facility Usage Liquidity ($ millions) PSE&G 5-year Credit Facility Apr-20 $600 (A) $14 $586 PSEG Money Pool PSEG / Power 5-Year Credit Facility (Power) Apr-19 $1,600 $189 $1,411 5-Year Credit Facility (Power) Apr-20
Slide 33: Items Excluded from Net Income to Reconcile to Operating Earnings
Items Excluded from Net Income to Reconcile to Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings Reconciliation Three Months Ended Six Months Ended Year-Ended Reconciling Items June 30, June 30, December 31, 2016 2015 2016 2015 2015 2014 ($ Millions, Una
Slide 34: Items Excluded from Net Income 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 Six Months Ended Year-Ended Reconciling Items June 30, June 30, December 31, 2016 2015 2016 2015 2015 ($ Millions, Unaudited) Adjusted EBITDA $ 272 $ 301
Public Service Enterprise Group — Q2 2016 Earnings Presentation on 6ix