Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q1 2018 Earnings Presentation
33 slides from Public Service Enterprise's earnings presentation, Apr 30, 2018
Slide 1: PSEG Earnings Conference Call 1st Quarter 2018
Public Service Enterprise Group PSEG Earnings Conference Call 1st Quarter 2018 April 30, 2018 EXHIBIT 99.1
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: 2018 Q1 Review
PSEG 2018 Q1 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q1 2018 Results – First Quarter Highlights
PSEG Q1 2018 – Results … First Quarter Highlights Net Income of $1.10 vs. Net Income of $0.22 per share in Q1 2017 Non-GAAP Operating Earnings* of $0.97, up 5.4% over $0.92 per share in Q1 2017 Operational & Regulatory focus achieving objectives for growth as risk is managed PSE&G Earnings Per Share
Slide 6: Q1 Results Summary – Solid Results
PSEG Q1 Results Summary – Solid Results Quarter ended March 31 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP). $ millions (except EPS) 2018 2017 Net Income $ 558 $ 114 Reconciling Items (66) 352 Operating Earnings (non-GAAP)* $ 492 $ 466 EPS from Net I
Slide 7: Key Provisions of the Zero Emissions Certificate Bill
Key Provisions of the Zero Emissions Certificate Bill* Zero Emission Certificate Upon enactment, directs NJ Board of Public Utilities (BPU) to pursue contracts with generators of nuclear energy for Zero Emission Certificates (ZEC) equal to no more than 40% of NJ’s retail electric deliveries. BPU wil
Slide 8: Clean Energy Bill – New Direction for NJ Energy Policy
Clean Energy Bill – New Direction for NJ Energy Policy* Energy Efficiency (EE) Electric utilities must reduce energy consumption by 2% and Gas utilities must reduce energy consumption by 0.75% from average annual usage over prior 3-year period within 5 years Annual filing required for utilities to r
Slide 9: Reaffirming 2018 Full-Year Guidance
Growth in utility infrastructure investment and Tax reform expected to drive increase in earnings PSEG Reaffirming 2018 Full-Year Guidance +6% over 2017 Non-GAAP Operating Earnings* Contribution by Subsidiary 2017 Actual and 2018 Guidance * See Slides A, B and C for Items excluded from Net Income/(L
Slide 10: 2018 Q1 Operating Company Review
PSEG 2018 Q1 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 11: Q1 Results by Subsidiary
PSEG – Q1 Results by Subsidiary GAAP Net Income/(Loss) 2018 2017 Change PSE&G $ 0.63 $ 0.59 $ 0.04 PSEG Power $ 0.46 $ (0.34) $ 0.80 PSEG Enterprise/Other $ 0.01 $ (0.03) $ 0.04 Total PSEG $ 1.10 $ 0.22 $ 0.88 Non-GAAP Operating Earnings* 2018 2017 Change PSE&G $ 0.63 $ 0.59 $ 0.04 PSEG Power $ 0.33
Slide 12: PSEG EPS Reconciliation – Q1 2018 versus Q1 2017
$ / share PSEG EPS Reconciliation – Q1 2018 versus Q1 2017 *See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP). **Reflects the impact of new accounting guidance effective January 1, 2018 which no longer allows capitalization of non-service components of pens
Slide 13: PSE&G 2018 Q1 Review
PSE&G 2018 Q1 Review
Slide 14: PSE&G – Q1 Summary of Results
PSE&G – Q1 Summary of Results $ millions (except EPS) Q1 2018 Q1 2017 Variance Operating Revenues $ 1,845 $ 1,826 $ 19 Operating Expenses Energy Costs 782 762 20 Operation & Maintenance 391 370 21 Depreciation & Amortization 190 171 19 Total Operating Expenses 1,363 1,303 60 Net Income $ 319 $ 299 $
Slide 15: PSE&G EPS Reconciliation – Q1 2018 versus Q1 2017
$ / share PSE&G EPS Reconciliation – Q1 2018versus Q1 2017 Investment drives growth in Q1 earnings Q1 2017 Net Income Q1 2018 Net Income Transmission 0.03 GSMP 0.02 Weather 0.01 Distribution O&M and Other* (0.01) Depreciation (0.01) *Reflects the impact of new accounting guidance effective January 1
Slide 16: PSE&G – Monthly Heating Degree Days
PSE&G – Monthly Heating Degree Days 1Q 2018 winter weather, as defined by heating degree days, was ~1.5% warmer than normal and 8% colder than 1Q 2017; a colder than normal March offset a normal January and one of the warmest Februarys on record. Monthly Heating Degree Days Q1 2018 vs. Q1 2017 vs. Q
Slide 17: GSMP II settlement extends and expands gas mains replacement program
GSMP II settlement extends and expands accelerated gas mains replacement program 2016 2018 Gas System Modernization Program Gas System Modernization Program II Investment term: 3 years Recovery: Annual recovery $215M/year via clause; $85M/year via base rate case; ROE: 9.75% Investment term: 5 years
Slide 18: PSE&G 2018 Distribution Rate Case Filing
PSE&G 2018 Distribution Rate Case Filing Dockets ER 18010029 (Electric) and GR 18010030 (Gas) Filed January 12, 2018; Anticipate new rates Fourth Quarter 2018 Test year – July 1, 2017 through June 30, 2018 (with certain pro forma adjustments) Rate base request of $9.6B ($5.6B E; $4B G) as of Decembe
Slide 19: PSE&G – Q1 Operating Highlights
PSE&G – Q1 Operating Highlights GSMP II settlement will provide for 5-year investment of $1.9 billion FERC formula rate revenue increase of $64 million, net of $148 million due to lower tax rate, implemented January 1 PSE&G lowered distribution rates by $114 million effective April 1, 2018 to pass t
Slide 20: Power 2018 Q1 Review
PSEG Power 2018 Q1 Review
Slide 21: Power – Q1 Summary of Results
PSEG Power – Q1 Summary of Results $ millions (except EPS) Q1 2018 Q1 2017 Variance Operating Revenues $ 1,403 $ 1,269 $ 134 Net Income/(Loss) 234 (170) 404 Reconciling Items (66) 320 (386) Operating Earnings (non-GAAP)* $ 168 $ 150 $ 18 EPS from Net Income/(Loss) $ 0.46 $ (0.34) $ 0.80 EPS from Ope
Slide 22: PSEG Power EPS Reconciliation – Q1 2018 versus Q1 2017
Capacity 0.01 Re-contracting & Market (0.06) $ / share PSEG Power EPS Reconciliation – Q1 2018 versus Q1 2017 O&M (0.01) Depreciation & Interest 0.02 Taxes & Other 0.07 * See Slide C for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP) for PSEG Power. Q1 2018 Net I
Slide 23: Power – Q1 Generation Measures
PSEG Power – Q1 Generation Measures Total Nuclear Total Coal** Natural Gas * Excludes solar and Kalaeloa. ** Includes figures for Pumped Storage. PSEG Power – Generation (GWh)* 12,834 12,714 PSEG Power – Capacity Factors (%) Quarter ended March 31 2017 2018 Combined Cycle 41.8% 37.4% Coal** PA 83.5%
Slide 24: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance $35 Quarter ended March 31 Lower hedge prices Capacity revenues higher in New England PJM-West spark spread expanded in 1Q 2018 but contracted in PS Zone Regional Performance Region Q1 Gross Margin ($M) Q1 2018 Performance PJM $405 Re-contracting at lower prices
Slide 25: Hedging Update
Hedging Update Contracted Energy* * Hedge percentages and prices as of March 31, 2018 and reflect revenues of full requirement load deals based on contract price, including renewable energy credits, ancillary, and transmission components but excluding capacity. Hedges include positions with MTM acco
Slide 26: Power – Q1 Operating Highlights
PSEG Power – Q1 Operating Highlights Q1 output affected by mild February and CCGT maintenance outages in March 2018 expected generation output unchanged at 55 – 57 TWh Nuclear fleet achieved average capacity factor of 99.5% as Hope Creek operated for record 517 days prior to Spring 2018 refueling ou
Slide 27: PSEG
PSEG
Slide 28: Financial Highlights
PSEG Financial Highlights Affirming 2018 non-GAAP Operating Earnings guidance of $3.00 - $3.20 per share NJ Legislative initiatives, awaiting Governor’s approval, support nuclear capacity and advance clean energy agenda PSEG’s 5-Year capital spending forecast of $13 billion - $15 billion over the 20
Slide 29: Affirming PSEG 2018 Guidance - By Subsidiary
Affirming PSEG 2018 Guidance - By Subsidiary $ millions (except EPS) 2018E 2017 PSE&G $1,000 - $1,030 $963 PSEG Power (non-GAAP)* $485 - $560 $505 PSEG Enterprise/Other $35 - $35 $20 Operating Earnings (non-GAAP)* $1,520 - $1,625 $1,488 Operating EPS (non-GAAP)* $3.00 - $3.20E $2.93 Segment Operatin
Slide 30: Liquidity as of March 31, 2018
PSEG Liquidity as of March 31, 2018
Slide 31: A: Consolidated Operating Earnings (non-GAAP) Reconciliation
A Please see slide 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Attachment 8 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings (non-GAAP) Reconciliation Reconciling Items Three Months Ended Yea
Slide 32: B: PSE&G and PSEG Power Operating Earnings Reconciliation
B Please see slide 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. PSE&G Operating Earnings (non-GAAP) Reconciliation Reconciling Items Three Months Ended Year-Ended March 31, December 31, 2018 2017 2017 ($ millions, Unaudi
Slide 33: C: PSEG Power Operating Earnings and Adjusted EBITDA Reconciliation
C Please see slide 2 for an explanation of PSEG’s use of Operating Earnings and adjusted EBITDA as a non-GAAP financial measure and how it differs from Net Income. PSE&G Operating Earnings (non-GAAP) Reconciliation Reconciling Items Three Months Ended Year-Ended March 31, December 31, 2018 2017 2017
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