Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q3 2019 Earnings Presentation
31 slides from Public Service Enterprise's earnings presentation, Oct 31, 2019
Slide 1: PSEG Earnings Conference Call 3rd Quarter 2019
Public Service Enterprise Group PSEG Earnings Conference Call 3rd Quarter 2019 October 31, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain of the matters discussed in this presentation 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 “forwa
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: 2019 Q3 Review
PSEG 2019 Q3 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q3 2019 Third Quarter Highlights
PSEG Q3 2019 Third Quarter Highlights Net Income per share of $0.79 in Q3 2019 vs. $0.81 in Q3 2018 Non-GAAP Operating Earnings* per share of $0.98 in Q3 2019 vs. $0.95 in Q3 2018 PSE&G results benefited from increased investment in utility infrastructure and rate relief PSEG Power results
Slide 6: Q3 Results Summary
PSEG Q3 Results Summary Quarter ended September 30 $ millions (except EPS) 2019 2018 Net Income $ 403 $ 412 Reconciling Items 92 69 Operating Earnings (non-GAAP)* $ 495 $ 481 EPS from Net Income $ 0.79 $ 0.81 EPS from Operating Earnings (non-GAAP)* $ 0.98 $ 0.95 6 *See Slide A for Items excluded fro
Slide 7: Year-to-Date Results Summary
PSEG Year-to-Date Results Summary Nine Months ended September 30 $ millions (except EPS) 2019 2018 Net Income $ 1,256 $ 1,239 Reconciling Items 80 59 Operating Earnings (non-GAAP)* $ 1,336 $ 1,298 EPS from Net Income $ 2.47 $ 2.44 EPS from Operating Earnings (non-GAAP)* $ 2.64 $ 2.56 7 *See Slide A
Slide 8: Regulatory and Policy Initiative Update
PSEG - Regulatory and Policy Initiative Update ES II Settlement PSE&G Energy Strong II (ES II) settlement approved by NJ Board of Public Utilities (NJBPU); Investment to begin Q4 2019 and extends through 2023 PSEG’s Priorities Aligned with New Jersey’s Clean Energy Agenda NJBPU approved the exte
Slide 9: Updating 2019 Full-Year Guidance and Adjusting Subsidiary Contribution Ranges
PSEG Updating 2019 Full-Year Guidance and Adjusting Subsidiary Contribution Ranges Subsidiary contributions adjusted to reflect an increased contribution from PSE&G, balancing lower expected results at PSEG Power Non-GAAP Operating Earnings* Contribution by Subsidiary 2018 Actual and 2019E Guidance
Slide 10: 2019 Q3 Operating Company Review
PSEG 2019 Q3 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 11: Q3 Results by Subsidiary
PSEG – Q3 Results by Subsidiary PSEG Q3 EPS Summary – Quarter ended September 30 Net Income 2019 2018 Change PSE&G $ 0.68 $ 0.54 $ 0.14 PSEG Power $ 0.10 $ 0.25 $ (0.15) PSEG Enterprise/Other $ 0.01. $ 0.02 $ (0.01) Total PSEG $ 0.79 $ 0.81 $ (0.02) Non-GAAP Operating Earnings* 2019 2018 Change PSE&
Slide 12: EPS Reconciliation – Q3 2019 versus Q3 2018
PSEG EPS Reconciliation – Q3 2019 versus Q3 2018 $1.20 0.14 (0.10) (0.01) $0.98 $1.00 $0.95 ZECs 0.07 Interest Expense $0.81 Transmission 0.06 Capacity (0.10) $0.79 $0.80 Electric Margin 0.03 Re-contracting, Gas Margin 0.03 Lower Cost to Serve $ / share 0.00 Weather (0.01) $0.60 Volume (0.01) Distri
Slide 13: Year-to-Date Results by Subsidiary
PSEG – Year-to-Date Results by Subsidiary PSEG YTD EPS Summary – Nine Months ended September 30 Net Income/(Loss) 2019 2018 Change PSE&G $ 1.92 $ 1.63 $ 0.29 PSEG Power $ 0.61 $ 0.79 $ (0.18) PSEG Enterprise/Other $ (0.06) $ 0.02 $ (0.08) Total PSEG $ 2.47 $ 2.44 $ 0.03 Non-GAAP Operating Earnings*
Slide 14: EPS Reconciliation – YTD 2019 versus YTD 2018
PSEG EPS Reconciliation – YTD 2019 versus YTD 2018 0.29 (0.17) $2.80 (0.04) $2.64 $2.56 $2.47 $2.44 ZECs 0.12 $2.40 Interest Expense Transmission 0.13 Capacity (0.06) & Absence of Gas Margin 0.14 One-Time Re-contracting, Investment $2.00 Electric Margin 0.04 Lower Cost to Serve (0.11) Income Weather
Slide 15: PSE&G 2019 Q3 Review
PSE&G 2019 Q3 Review
Slide 16: PSE&G EPS Reconciliation – Q3 2019 versus Q3 2018
PSE&G EPS Reconciliation – Q3 2019 versus Q3 2018 $0.70 0.03 $0.68 0.11 $0.60 $0.54 Distribution O&M 0.01 $0.50 Distribution Transmission 0.06 Depreciation & Interest $ / share $0.40 Electric Margin (0.02) 0.03 Distribution $0.30 Gas Margin 0.03 Non-Operating Pension/OPEB 0.03 Weather (0.01) $0.20 D
Slide 17: PSE&G – Q3 Weather Summary
PSE&G – Q3 Weather Summary PSE&G Monthly Weather Summary Q3 2019 vs. Q3 2018 vs. Q3 Normal Monthly Temperature Humidity Index (THI) Total Hours at 90°F or Higher 8,000 160 7,000 140 6,000 120 23 5 5,000 100 9 6 4,000 80 66 31 6,710 6,296 3,000 5,464 60 5,275 4,522 4,673 92 2,000 40 3,199 63 1,000 2,
Slide 18: PSE&G – Q3 Highlights
PSE&G – Q3 Highlights Operations For the trailing 12-months ended September 30, weather-normalized electric sales were flat and weather-normalized gas sales were 1% higher Residential electric and gas customer growth continues trending higher at ~1% per year Regulatory and Market Environment F
Slide 19: PSEG Power 2019 Q3 Review
PSEG Power 2019 Q3 Review
Slide 20: Power EPS Reconciliation – Q3 2019 versus Q3 2018
PSEG Power EPS Reconciliation – Q3 2019 versus Q3 2018 $0.40 $0.39 (0.05) (0.05) ZECs 0.07 $0.30 $0.29 Capacity $0.25 (0.10) Depreciation Re-contracting, & $ / share Lower Cost to Serve Interest 0.00 (0.01) $0.20 Volume (0.01) Taxes & Other (0.04) Gas Operations (0.01) $0.10 $0.10 $0.00 Q3 2018 Q3 2
Slide 21: Power – Q3 Generation Measures
PSEG Power – Q3 Generation Measures PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%)* PSEG Power – Fuel Costs* Quarter ended Quarter ended 17,500 16,563 September 30 September 30 16,281 2018 2019 ($ millions) 2018 2019 15,000 Combined Gas*** $ 142 $ 146 68.2% 63.4% Cycle** 7,208 7,25
Slide 22: Power – YTD Generation Measures
PSEG Power – YTD Generation Measures PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%)* PSEG Power – Fuel Costs* Nine Months ended Nine Months ended 45,000 43,511 September 30 September 30 41,639 40,000 2018 2019 ($ millions) 2018 2019 Combined Gas*** $ 324 $ 396 16,504 52.5% 51.3% 35
Slide 23: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance ZEC revenues earned for full quarter PJM capacity prices decrease to $116 MW/day (from $205 MW/day) through May 2020 ISO-NE capacity prices decrease to $231 MW/day (from $314 MW/day) through May 2020; Bridgeport Harbor 5 capacity price locked in for seven
Slide 24: Hedging Update
Hedging Update Contracted Energy* Oct - Dec 2019 2020 2021 Volume TWh 7 31 31 Nuclear % Hedged 100% 100% 70-75% Price $/MWh $37 $37 $35 Volume TWh 6-7 21-23 21-23 Combined Cycle % Hedged 100% 70-75% 0% Price $/MWh $37 $37 $- Volume TWh 13-14 52-54 52-54 Total % Hedged 100% 85-90% 40-45% Price $/MWh
Slide 25: Power – Q3 Highlights
PSEG Power – Q3 Highlights Operations Q3 total output down 2% primarily on lower market demand vs Q3 2018 Nuclear fleet achieved a capacity factor of 91% in Q3 and for YTD 2019 CCGT fleet achieved 63% capacity factor in Q3; new units operated at capacity factors > 75% Nuclear fleet produced
Slide 26: PSEG
PSEG
Slide 27: Financial Highlights
PSEG Financial Highlights Updating and narrowing 2019 non-GAAP Operating Earnings guidance to $3.20 - $3.30 per share, from $3.15 - $3.35 per share prior; adjusting subsidiary contribution ranges Business mix for 2019 guidance reflects approximately 75% of Operating Earnings contribution from re
Slide 28: Updating PSEG 2019 Guidance - By Subsidiary
Updating PSEG 2019 Guidance - By Subsidiary Segment Operating Earnings Guidance and Prior Year Results (non-GAAP, except as noted)* $ millions (except EPS) 2019E 2018 PSE&G (Net Income) $1,225 - $1,250 $1,067 PSEG Power $395 - $420 $502 PSEG Enterprise/Other $5 $13 Operating Earnings (non-GAAP)* $1,
Slide 29: Liquidity as of September 30, 2019
PSEG Liquidity as of September 30, 2019 Expiration Total Available Company Facility Date Facility Usage Liquidity ($ Millions) PSE&G 5-year Credit Facility Mar-23 $600 (A) $26 $574 PSEG Money Pool PSEG / PSEG Power 5-year Credit Facilities (PSEG) Mar-23 $1,500 (B) $349 $1,151 5-year Credit Facilitie
Slide 30: Reconciliation of Non-GAAP Operating Earnings
Reconciliation of Non-GAAP Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings (non-GAAP) Reconciliation Three Months Ended Nine Months Ended Year Ended Reconciling Items September 30, September 30, December 31, 2019 2018 2019 2018 2018 ($ millions, Unaudi
Slide 31: Reconciliation of Non-GAAP Operating Earnings and Non-GAAP Adjusted EBITDA
Reconciliation of Non-GAAP Operating Earnings and Non-GAAP Adjusted EBITDA PSEG Power Operating Earnings (non-GAAP) and Adjusted EBITDA (non-GAAP) Reconciliation Three Months Ended Nine Months Ended Year Ended Reconciling Items September 30, September 30, December 31, 2019 2018 2019 2018 2018 ($ mil
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