Public Service Enterprise Group Incorporated · NYSE:PEG

Public Service Enterprise — Q1 2019 Earnings Presentation

30 slides from Public Service Enterprise's earnings presentation, May 2, 2019

  1. Slide 1: PSEG Earnings Conference Call 1st Quarter 2019

    Public Service Enterprise Group PSEG Earnings Conference Call 1st Quarter 2019 May 2, 2019

  2. 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

  3. 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

  4. Slide 4: 2019 Q1 Review

    PSEG 2019 Q1 Review Ralph Izzo Chairman, President and Chief Executive Officer

  5. Slide 5: Q1 2019 First Quarter Highlights

    PSEG Q1 2019  First Quarter Highlights Net Income per share of $1.38 in Q1 2019 vs. $1.10 in Q1 2018 Non-GAAP Operating Earnings* per share of $1.08 in Q1 2019 vs. $0.97 in Q1 2018 PSE&G results benefiting from increased investment in electric and gas T&D infrastructure PSEG Power results aided

  6. Slide 6: Q1 Results Summary

    PSEG Q1 Results Summary Quarter ended March 31 $ millions (except EPS) 2019 2018 Net Income $ 700 $ 558 Reconciling Items (153) (66) Operating Earnings (non-GAAP)* $ 547 $ 492 EPS from Net Income $ 1.38 $ 1.10 EPS from Operating Earnings (non-GAAP)* $ 1.08 $ 0.97 6 *See Slide A for Items excluded fr

  7. Slide 7: Executing on Regulatory and Policy Initiatives

    PSEG - Executing on Regulatory and Policy Initiatives PSEG’s Priorities Aligned with Advancing New Jersey’s Clean Energy Future  PSE&G filed Clean Energy Future (CEF) programs in late 2018, consistent with NJ Clean Energy Act, to invest in Energy Efficiency (CEF-EE), Energy Storage (CEF-ES), Electr

  8. Slide 8: Re-affirming 2019 Guidance

    PSEG – Re-affirming 2019 Guidance Ongoing investment in utility infrastructure and implementation of 2018’s distribution rate case settlement drive increase in earnings Non-GAAP Operating Earnings* Contribution by Subsidiary 2018 Actual and 2019E Guidance $3.12 $3.15 - $3.35E PSE&G represents approx

  9. Slide 9: 2019 Q1 Operating Company Review

    PSEG 2019 Q1 Operating Company Review Dan Cregg EVP and Chief Financial Officer

  10. Slide 10: Q1 Results by Subsidiary

    PSEG – Q1 Results by Subsidiary PSEG Q1 EPS Summary – Quarter ended March 31 Net Income 2019 2018 Change PSE&G $ 0.79 $ 0.63 $ 0.16 PSEG Power $ 0.59 $ 0.46 $ 0.13 PSEG Enterprise/Other $ -. $ 0.01 $ (0.01) Total PSEG $ 1.38 $ 1.10 $ 0.28 Non-GAAP Operating Earnings* 2019 2018 Change PSE&G $ 0.79 $

  11. Slide 11: EPS Reconciliation – Q1 2019 versus Q1 2018

    PSEG EPS Reconciliation – Q1 2019 versus Q1 2018 $1.38 $1.40 $1.20 0.16 (0.04) $1.10 (0.01) $1.08 $0.97 $1.00 Capacity 0.05 Interest Expense Re-contracting Transmission 0.03 (0.08) $0.80 $ / share Gas Margin 0.08 Volume 0.01 Electric Margin 0.01 Gas Operations (0.01) $0.60 Distribution O&M 0.01 O&M

  12. Slide 12: PSE&G 2019 Q1 Review

    PSE&G 2019 Q1 Review

  13. Slide 13: PSE&G EPS Reconciliation – Q1 2019 versus Q1 2018

    PSE&G EPS Reconciliation – Q1 2019 versus Q1 2018 $0.90 0.04 $0.79 $0.80 0.12 $0.70 $0.63 Distribution $0.60 O&M 0.01 $ / share $0.50 Transmission 0.03 Distribution Depreciation, Interest $0.40 Gas Margin & Non-Operating 0.08 Pension/OPEB $0.30 (0.01) Electric Margin $0.20 0.01 Distribution Taxes &

  14. Slide 14: PSE&G – Q1 Weather Summary

    PSE&G – Q1 Weather Summary Monthly Heating Degree Days (HDD) Q1 2019 vs. Q1 2018 vs. Q1 Normal 1,200 1,000 Heating Degree Days 800 600 1,010 1,040 989 400 814 836 779 734 664 685 200 0 January February March 2019 2018 Normal Q1 2019 Winter weather, as defined by heating degree days, was ~3% colder t

  15. Slide 15: PSE&G – Q1 Highlights

    PSE&G – Q1 Highlights Operations For the trailing 12-months ended March 31, weather-normalized electric sales were flat and weather-normalized firm gas sales were 3% higher Regulatory and Market Environment $380 million of tax reform savings will be returned to customers in 2019 GSMP II underway

  16. Slide 16: Power 2019 Q1 Review

    PSEG Power 2019 Q1 Review

  17. Slide 17: Power EPS Reconciliation – Q1 2019 versus Q1 2018

    PSEG Power EPS Reconciliation – Q1 2019 versus Q1 2018 $0.60 $0.59 $0.50 $0.46 $0.40 $0.33 (0.03) $ / share (0.01) $0.29 $0.30 Capacity 0.05 O&M 0.01 $0.20 Re-contracting Depreciation (0.08) (0.02) Volume 0.01 Interest Expense $0.10 (0.02) Gas Operations (0.01) Taxes & Other 0.02 $0.00 Q1 2018 Q1 20

  18. Slide 18: Power – Q1 Generation Measures

    PSEG Power – Q1 Generation Measures PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%)* PSEG Power – Fuel Costs* Quarter ended Quarter ended 15,000 14,094 March 31 March 31 12,729 12,500 4,447 2018 2019 ($ millions) 2018 2019 2,803 10,000 Combined Gas $ 89 $ 153 1,538 1,431 37.4% 43.5%

  19. Slide 19: Power – Gross Margin Performance

    PSEG Power – Gross Margin Performance  Re-contracting at lower market prices  Higher capacity revenues in first-half 2019  Higher generation from new CCGT units  Lower realized spark spreads PSEG Power Gross Margin ($/MWh) Regional Performance Quarter ended March 31 Q1 Gross Region Margin ($M) Q

  20. Slide 20: Hedging Update

    Hedging Update Contracted Energy* Apr - Dec 2019 2020 2021 Volume TWh 26 36 36 Base Load % Hedged 100% 90-95% 40-45% (Nuclear and Base Load Coal) Price $/MWh $37 $38 $39 Volume TWh 20-22 23-25 24-26 Intermediate, Combined Cycle, % Hedged 60-65% 0% 0% Peaking Price $/MWh $37 $- $- Volume TWh 46-48 60

  21. Slide 21: Power – Q1 Highlights

    PSEG Power – Q1 Highlights Operations  Q1 total output up 11% on higher CCGT production with two new units on line  Nuclear fleet achieved average capacity factor of 98%, producing 8.2 TWh of output; Salem 1 experienced first uninterrupted run between refueling outages  CCGT fleet produced 4.4 TW

  22. Slide 22: PSEG

    PSEG

  23. Slide 23: Financial Highlights

    PSEG Financial Highlights  Re-affirming 2019 non-GAAP Operating Earnings guidance of $3.15 - $3.35 per share  Business mix for 2019 guidance reflects approximately 75% of Operating Earnings from our regulated utility PSE&G  PSEG’s 5-year capital spending forecast of $12 - $17 billion, 90% directe

  24. Slide 24: 2019 Guidance - By Subsidiary

    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) $1,200 - $1,230 $1,067 PSEG Power $395 - $460 $502 PSEG Enterprise/Other $5 - $10 $13 Operating Earnings (non-GAAP)* $1,600

  25. Slide 25: Liquidity as of March 31, 2019

    PSEG Liquidity as of March 31, 2019 25

  26. Slide 26: Investment program provides approximately 7% - 9% compound annual rate base growth

    Investment program provides opportunity for approximately 7% - 9% compound annual rate base growth 35,000 PSE&G Year-End Rate Base 2018 – 2023E 9% - 30,000 CEF ES II 7% - 25,000 20,000 $ Millions 15,000 10,000 5,000 0 2018 2019E 2020E 2021E 2022E 2023E Transmission Distribution Hashed portion of the

  27. Slide 27: Distribution Rate Case Key Terms

    Distribution Rate Case Key Terms • ROE of 9.6%; 54% equity ratio • Rate Base of $9.5B: $5.5B Electric and $4.0B Gas • Base revenues include recovery of deferred storm costs (~$50M/year) • Tax Adjustment Clause – Two tax items flowed back to customers, with a return on the portion related to rate bas

  28. Slide 28: Key Provisions of the Zero Emission Certificate Program

    Key Provisions of the Zero Emission Certificate Program Zero Emission Certificate  On April 18, the BPU awarded ZECs to PSEG Nuclear’s three NJ nuclear plants: Hope Creek and Salem 1 and Salem 2. The BPU completed a process outlined by legislation passed in May 2018 that provided contracts to award

  29. Slide 29: 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 Year Ended Reconciling Items March 31, December 31, 2019 2018 2018 ($ millions, Unaudited) Net Income $ 700 $ 558 $ 1,438 (Gain) Los

  30. Slide 30: 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 Year Ended Reconciling Items March 31, December 31, 2019 2018 2018 ($ millions, Unaudited) Net Income $ 296 $ 234 $ 365

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