Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q2 2021 Earnings Presentation
32 slides from Public Service Enterprise's earnings presentation, Aug 3, 2021
Slide 1: PSEG Earnings Conference Call 2nd Quarter 2021
Public Service Enterprise Group PSEG Earnings Conference Call 2nd Quarter 2021 August 3, 2021
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/(Loss) reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings and Adjusted
Slide 4: Q2 2021
PSEG Q2 2021 Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Second Quarter Highlights
PSEG Q2 2021 Second Quarter Highlights Net Loss of ($0.35) per share in Q2 2021 vs. Net Income of $0.89 per share in Q2 2020 Non-GAAP Operating Earnings* of $0.70 per share in Q2 2021 vs. $0.79 in Q2 2020 PSEG results on track for full-year 2021: non-GAAP Operating Earnings Guidance updated
Slide 6: Progress on strategic alternatives for non-nuclear fleet
Progress on strategic alternatives for non-nuclear fleet PSEG has completed the sale of Solar Source’s 467 MWDC portfolio Fossil sale process ongoing - completion expected to occur in Q4 '21 or Q1 '22 Furthers PSEG progression into a primarily regulated electric and gas utility, intended to:
Slide 7: Regulatory and Policy Initiatives Update
Regulatory and Policy Initiatives Update State Regulatory Proceedings NJBPU awarded continuation of $10/MWh Zero Emission Certificates (ZECs) for NJ nuclear plants through May 2025 NJBPU Staff’s Resource Adequacy (FRR) report recommends a pause on the exploration of leaving the PJM capacity mark
Slide 8: Updating Full Year 2021 Guidance and Adjusting Subsidiary Contribution Ranges
PSEG – Updating Full Year 2021 Guidance and Adjusting Subsidiary Contribution Ranges Based on favorable results at PSE&G and Power through the first half of the year, we are raising the bottom end of guidance by $0.05 per share Non-GAAP Operating Earnings* Contribution by Subsidiary 2020 Actual and
Slide 9: PSEG accelerates climate vision for Net Zero emissions to 2030
PSEG accelerates climate vision for Net Zero emissions by 20 years to 2030 Original ~22% ~60% New PSEG PSEG Original Methane Methane Power PSEG Power Reduction Reduction Net Zero 80% GHG Net Zero Target Target* GHG Vision Reduction Vision Target 2023 2030 2030 2046 2050 PSEG’s Three-Pronged 2030 Cli
Slide 10: Sustainability & ESG Summary
PSEG Sustainability & ESG Summary Leadership Policies & Goals Recognition & Scores • Clean Energy Future: PSE&G has received • PSEG is a vocal advocate for an economy- • Member of S&P Sustainability Yearbook regulatory approvals to invest $2 billion 2021 to decarbonize the New Jersey economy wide pr
Slide 11: PSEG delivering solid results and sustainable dividend growth
PSEG delivering solid results and sustainable dividend growth 2021 Financial Highlights PSEG non-GAAP Operating Earnings* Updating full-year 2021 non-GAAP Operating Earnings guidance to $3.40 - $3.55 per share, from $3.35 - $3.55 per share, raising bottom end of guidance by $0.05 per share; adjust
Slide 12: Q2 2021 Operating Company Review
PSEG Q2 2021 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 13: Q2 Results by Subsidiary
PSEG – Q2 Results by Subsidiary PSEG Q2 EPS Summary – Quarter ended June 30 Net Income/(Loss) 2021 2020 Change PSE&G $ 0.61 $ 0.56 $ 0.05 PSEG Power $ (0.95) $ 0.34 $ (1.29) PSEG Enterprise/Other $ (0.01) $ (0.01)- $ - Total PSEG $ (0.35) $ 0.89 $ (1.24) Non-GAAP Operating Earnings* 2021 2020 Change
Slide 14: EPS Reconciliation – Q2 2021 versus Q2 2020
PSEG EPS Reconciliation – Q2 2021 versus Q2 2020 $1.00 $0.89 0.05 (0.14) $0.79 $0.80 0.00 Transmission 0.01 $0.70 Electric Margin 0.02 ZECs (0.01) Taxes, Interest $0.60 Gas Margin 0.01 Expense & Other Capacity 0.02 Gas Bad Debt 0.01 Re-contracting & Market Distribution O&M 0.01 (0.09) $0.40 $ / shar
Slide 15: First Half Results by Subsidiary
PSEG – First Half Results by Subsidiary PSEG First Half EPS Summary – Six Months ended June 30 Net Income/(Loss) 2021 2020 Change PSE&G $ 1.55 $ 1.43 $ 0.12 PSEG Power $ (0.63) $ 0.36 $ (0.99) PSEG Enterprise/Other $ 0.01 $ (0.02) $ 0.03 Total PSEG $ 0.93 $ 1.77 $ (0.84) Non-GAAP Operating Earnings*
Slide 16: EPS Reconciliation – First Half 2021 versus First Half 2020
PSEG EPS Reconciliation – First Half 2021 versus First Half 2020 0.01 0.03 $1.98 $2.00 0.12 $1.82 $1.77 Capacity 0.05 Tax Benefits $1.75 Re-contracting & Transmission 0.03 Market (0.07) $1.50 Electric Margin 0.02 Gas Margin 0.03 Gas Operations 0.04 Gas Bad Debt 0.02 $1.25 O&M (0.01) Distribution Dep
Slide 17: PSE&G Q2 2021 Review
PSE&G Q2 2021 Review
Slide 18: PSE&G EPS Reconciliation – Q2 2021 versus Q2 2020
PSE&G EPS Reconciliation – Q2 2021 versus Q2 2020 $0.75 0.05 0.00 $0.61 $0.60 $0.56 Distribution O&M 0.01 Transmission 0.01 Distribution $0.45 Electric Margin Depreciation $ / share 0.02 (0.01) Gas Margin Distribution $0.30 0.01 Non-Operating Pension/OPEB 0.02 Gas Bad Debt 0.01 Distribution $0.15 Ta
Slide 19: PSE&G – Q2 Weather Summary
PSE&G – Q2 Weather Summary PSE&G Monthly Weather Summary Q2 2021 vs. Q2 2020 vs. Normal Monthly Heating Degree Days (HDD) Monthly Temperature Humidity Index (THI) 500 4,500 4,000 400 3,500 3,000 300 4,364 2,500 446 2,000 200 321 355 1,500 3,412 2,989 100 1,000 182 123 125 500 1,010 951 0 3 13 610 19
Slide 20: Transmission Rate Agreement Reached
Transmission Rate Agreement Reached Executed settlement agreement with NJBPU and NJ Division of Rate Counsel to reset PSE&G’s base ROE for its transmission formula rate to 9.90% from 11.18% PSE&G filed settlement agreement with FERC on July 14 seeking FERC approval and requesting effective date
Slide 21: PSE&G – Q2 Highlights
PSE&G – Q2 Highlights Operations PSE&G achieved top quartile performance overall, as well as in all seven categories, among large utilities in the East in JD Power’s second quarter 2021 Residential Electric Study For the trailing 12 months ended June 30, weather-normalized electric and gas sales
Slide 22: PSEG Power Q2 2021 Review
PSEG Power Q2 2021 Review
Slide 23: PSEG Power EPS Reconciliation – Q2 2021 versus Q2 2020
PSEG Power EPS Reconciliation – Q2 2021 versus Q2 2020 $0.34 $0.35 $0.30 $0.25 $0.24 (0.09) $0.20 (0.05) $0.15 $ / share ZECs (0.01) $0.10 $0.10 Capacity 0.02 O&M (0.04) Re-contracting & $0.05 Market (0.09) Depreciation & Interest 0.02 Volume (0.01) Taxes & Other (0.03) $0.00 ($0.05) ~ ~ ($0.95) ($0
Slide 24: Power – Q2 & First Half Generation Measures
PSEG Power – Q2 & First Half Generation Measures PSEG Power – First Half Generation (GWh)* PSEG Power – Capacity Factors (%)* 30,000 Quarter ended First Six Months ended 25,917 25,893 June 30 June 30 25,000 2020 2021 2020 2021 Combined 10,101 43.7% 46.9% 44.3% 44.3% 20,000 10,399 Cycle** 91.9% 85.7%
Slide 25: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Capacity prices changed June 1: Average price now $166 MW/day in PJM and $192 MW/day in ISO-NE through May 31, 2022; Bridgeport Harbor 5 capacity locked in at $231 MW/day for 7 years* Bridgeport Harbor Unit 3, a 383 MW coal-fired generating plant retired May
Slide 26: Power – Q2 Highlights
PSEG Power – Q2 Highlights Operations Q2 2021 output down 1% vs Q2 2020 due to Hope Creek refueling Nuclear fleet achieved a capacity factor of 85.7% in Q2 2021 CCGT fleet capacity factor was 46.9% in Q2 2021 Nuclear fleet produced 7.2 TWh, down 7% from last year due to Hope Creek refueling;
Slide 27: PSEG
PSEG
Slide 28: Updating PSEG 2021 Guidance - By Subsidiary
Updating PSEG 2021 Guidance - By Subsidiary Segment Operating Earnings Guidance and Prior Year Results (non-GAAP, except as noted)* $ millions (except EPS) 2021E 2020 PSE&G (Net Income) $1,420 - $1,470 $1,327 PSEG Power $295 - $370 $430 PSEG Enterprise/Other ($15) ($16) Operating Earnings (non-GAAP)
Slide 29: Appendix
APPENDIX
Slide 30: PSEG maintains a solid financial position
PSEG maintains a solid financial position PSE&G Senior Secured Credit Ratings PSEG Senior Unsecured Credit Ratings Moody’s = Aa3 / Outlook = Negative Moody’s = Baa1 / Outlook = Stable S&P = A / Outlook = Stable S&P = BBB / Outlook = Stable 2021 PSE&G Debt Issuances Senior Notes Outstanding as of 6/3
Slide 31: Reconciliation of Non-GAAP Operating Earnings
Reconciliation of Non-GAAP Operating Earnings Public Service Enterprise Group Incorporated - Consolidated Operating Earnings (Non-GAAP) Reconciliation Three Months Ended Six Months Ended Year Ended Reconciling Items June 30, June 30, December 31, 2021 2020 2021 2020 2020 2019 2018 2017 ($ millions,
Slide 32: Non-GAAP Adjusted EBITDA
Reconciliation of Non-GAAP Operating Earnings and Non-GAAP Adjusted EBITDA PSEG Power LLC - Operating Earnings (Non-GAAP) and Adjusted EBITDA (non-GAAP) Reconciliation Three Months Ended Six Months Ended Year Ended Reconciling Items June 30, June 30, December 31, 2021 2020 2021 2020 2020 ($ millions
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