Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q4 2020 Earnings Presentation
38 slides from Public Service Enterprise's earnings presentation, Feb 26, 2021
Slide 1: PSEG Earnings Conference Call 4th Quarter & Full Year 2020
Public Service Enterprise Group PSEG Earnings Conference Call 4th Quarter & Full Year 2020 February 26, 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 reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings and Adjusted EBITDA
Slide 4: Q4 2020 and Full Year Review
PSEG Q4 2020 and Full Year Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q4 and Full Year 2020
PSEG Q4 and Full Year 2020 Fourth Quarter and Full Year Highlights Net Income of $0.85 per share in Q4 2020; Full year 2020 Net Income of $3.76 per share Non-GAAP Operating Earnings* of $0.65 per share in Q4 2020; Full year 2020 non-GAAP Operating Earnings* of $3.43 per share PSE&G full year
Slide 6: Introducing 2021 Guidance
PSEG – Introducing 2021 Guidance Non-GAAP Operating Earnings* Contribution by Subsidiary 2020 Actual and 2021E Guidance $3.43 $3.35 - $3.55E PSE&G $2.78 $2.62 to PSEG Power $2.90 PSEG Enterprise/Other $0.55 $0.84 to $0.73 2020 ($0.03) 2021E** ($0.03) E = Estimate. *See Slides A and B for Items exclu
Slide 7: Indicative 2021 Dividend – Increased $0.08 to $2.04 per share
PSEG Indicative 2021 Dividend – Increased $0.08 to $2.04 per share Building on a 114-year history of returning cash to our shareholders PSEG Annual Dividend Rate 2017 – 2021E compound annual growth rate: 4.4% $2.20 $2.04 * $2.00 $1.96 $1.88 $1.80 $1.80 $1.72 $1.60 $ Per Share $1.40 $1.20 $1.00 2017
Slide 8: Regulatory and Policy Objectives
PSEG - Regulatory and Policy Objectives State Regulatory Proceedings CEF-AMI settlement approved by NJBPU, authorizing $707 million* investment through 2024 CEF-EV $166 million settlement approved by NJBPU NJBPU Resource Adequacy (FRR) workshops and report expected Q1 2021 NJBPU held technic
Slide 9: ESG & Sustainability Summary
ESG & Sustainability Summary Leadership Policies & Goals Recognition & Scores • Clean Energy Future PSE&G positioned • PSEG is a vocal advocate for an • Named Member to S&P Sustainability to make significant investments to economy-wide price on CO2 emissions Yearbook 2021 decarbonize the New Jersey
Slide 10: Investments aligned with New Jersey's clean energy goals
PSEG’s Investments are aligned with New Jersey’s clean energy goals and stronger reliability to meet customers’ increasing expectations PSEG 2021-2025E Capex ~$16B PSEG Enterprise & Other Nuclear Reliability/Emission Reduction PSEG Power 50% • Energy Efficiency addresses • AMI • CEF – Electric Vehic
Slide 11: Q4 and FY 2020 Operating Company Review
PSEG Q4 and FY 2020 Operating Company Review Dan Cregg EVP and Chief Financial Officer
Slide 12: Q4 Results by Subsidiary
PSEG – Q4 Results by Subsidiary PSEG Q4 EPS Summary – Quarter ended December 31 Net Income/(Loss) 2020 2019 Change PSE&G $ 0.58 $ 0.54 $ 0.04 PSEG Power $ 0.30 $ 0.32 $ (0.02) PSEG Enterprise/Other $ (0.03) $ -- $ (0.03) Total PSEG $ 0.85 $ 0.86 $ (0.01) Non-GAAP Operating Earnings* 2020 2019 Change
Slide 13: EPS Reconciliation – Q4 2020 versus Q4 2019
PSEG EPS Reconciliation – Q4 2020 versus Q4 2019 $0.90 $0.86 $0.85 $0.75 0.04 0.00 (0.03) $0.64 $0.65 Capacity 0.04 $0.60 Transmission 0.02 Lower Tax Re-contracting & Benefits Gas Margin 0.02 Market (0.06) Weather (0.03) $0.45 Volume (0.02) $ / share Distribution Depreciation (0.01) Gas Operations 0
Slide 14: Year-to-Date Results by Subsidiary
PSEG – Year-to-Date Results by Subsidiary PSEG Full Year EPS Summary – Twelve Months ended December 31 Net Income/(Loss) 2020 2019 Change PSE&G $ 2.62 $ 2.46 $ 0.16 PSEG Power $ 1.17 $ 0.93 $ 0.24 PSEG Enterprise/Other $ (0.03) $ (0.06) $ 0.03 Total PSEG $ 3.76 $ 3.33 $ 0.43 Non-GAAP Operating Earni
Slide 15: EPS Reconciliation – FY 2020 versus FY 2019
PSEG EPS Reconciliation – FY 2020 versus FY 2019 $4.00 $3.76 0.16 0.03 (0.04) $3.43 $3.50 $3.33 $3.28 ZECs 0.10 Loss on Sale of $3.00 Transmission 0.17 Capacity (0.11) Investment, Lower Tax Benefits and Electric Margin 0.01 Other Re-contracting & Market $2.50 Gas Margin 0.08 (0.09) Weather* (0.08) V
Slide 16: PSE&G Q4 2020 Review
PSE&G Q4 2020 Review
Slide 17: PSE&G EPS Reconciliation – Q4 2020 versus Q4 2019
PSE&G EPS Reconciliation – Q4 2020 versus Q4 2019 0.03 $0.60 $0.58 $0.54 0.01 Distribution Transmission 0.02 Depreciation $0.45 (0.01) Gas Margin 0.02 Distribution Non-Operating $ / share Weather Pension/OPEB 0.01 (0.03) $0.30 Distribution Taxes & Other 0.03 $0.15 $0.00 Q4 2019 Q4 2020 Net Net Incom
Slide 18: PSE&G Q4 & Full Year Weather Summary
PSE&G – Q4 & Full Year Weather Summary Winter Weather Summary (HDD) Monthly Heating Degree Days (HDD) FY 2020 vs. FY 2019 vs. Normal Q4 2020 vs. Q4 2019 vs. Normal 1,000 Summary 4,186 HDD 4,662 2020 800 2019 4,658 Heating Degree Days normal 600 2,000 3,000 4,000 5,000 FY 2020 winter weather was ~10%
Slide 19: GSMP drives PSE&G's methane reduction goals
GSMP drives PSE&G’s methane reduction goals 0% PSE&G is on track to achieve its 22% methane (CH4) reduction goal by 2023 from 2018 levels, with -10% GSMP I ongoing GSMP II replacement of cast iron and unprotected steel main -20% GSMP II -30% Targeting ~60% cumulative methane -40% reduction by 2030 f
Slide 20: CEF-Electric Vehicle Infrastructure Approved
CEF-Electric Vehicle Infrastructure Approved Investment $166M ~6-Year Program CEF-EV Subprograms 1. Residential Smart Charging Development of smart charging infrastructure to facilitate EV 2. Level 2 Mixed-Use Charging adoption across a broad range of 3. Public DC Fast Charging customers and segment
Slide 21: PSE&G capital program of $13 billion to $15 billion
PSE&G’s capital program of $13 billion to $15 billion focused on reliability, resiliency, grid modernization and clean energy investments ~90% of our capital investments PSE&G Capital Spending receive earnings and cash 2021E – 2025E recovery within one year 3,500 Unapproved Programs: 3,000 • Energy
Slide 22: Investment program provides ~6.5% to 8% rate base growth
PSE&G’s investment program provides opportunity for ~6.5% to 8% compound annual growth in rate base PSE&G Year-End Rate Base 35,000 2020 – 2025E Unapproved Programs 30,000 25,000 20,000 ($ Millions) 15,000 10,000 5,000 0 2020 2021E 2022E 2023E 2024E 2025E Transmission Electric Distribution Gas Distr
Slide 23: PSE&G – Q4 Highlights
PSE&G – Q4 Highlights Operations Completed replacement of approximately 175 miles of gas main and 25,000 services during 2020, annual methane emissions reduced by approximately 25,000 metric tons of CO2 equivalent Weather-normalized electric sales declined by 2% in 2020; Residential sales increa
Slide 24: PSEG Power Q4 2020 Review
PSEG Power Q4 2020 Review
Slide 25: PSEG Power EPS Reconciliation – Q4 2020 versus Q4 2019
PSEG Power EPS Reconciliation – Q4 2020 versus Q4 2019 $0.35 $0.20 $0.32 $0.30 $0.15 $0.30 ~ ~ $ / share $0.10 (0.03) 0.03 $0.10 $0.10 Capacity 0.04 O&M 0.01 $0.05 Re-contracting & Depreciation 0.01 Market (0.06) Taxes & Other 0.01 Volume (0.02) Gas Operations 0.01 $0.00 Q4 2019 Q4 2019 Q4 2020 Q4 2
Slide 26: Power – Q4 & Full Year Generation Measures
PSEG Power – Q4 & Full Year Generation Measures PSEG Power – FY Generation (GWh)* PSEG Power – Capacity Factors (%)* 60,000 56,856 Quarter ended Year ended 52,964 December 31 December 31 50,000 2019 2020 2019 2020 22,839 Combined 22,226 54.8% 46.2% 52.2% 48.3% 40,000 Cycle** N/A N/A Coal-PA 75.4% N/
Slide 27: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Capacity revenues rose in 2020: Average price in PJM is $168 MW/day and in ISO-NE is $195 MW/day through May 31; Bridgeport Harbor 5 locked in at $231 MW/day for 7 years* Re-contracting at lower market prices Lower Q4 generation volumes related to outages,
Slide 28: PSEG Power – Q4 Highlights
PSEG Power – Q4 Highlights Operations Q4 2020 output down 9% vs Q4 2019 due primarily to planned outages at Fossil and extended outage at Salem 1 Nuclear fleet capacity factor was 78.9% in Q4 and 90.3% for full year 2020 CCGT fleet capacity factor was 46.2% in Q4 and 48.3% for full year 2020;
Slide 29: PSEG
PSEG
Slide 30: PSEG delivering solid results and sustainable dividend growth
PSEG delivering solid results and sustainable dividend growth 2021 Financial Highlights PSEG non-GAAP Operating Earnings* Initiating full-year 2021 non-GAAP Operating Earnings guidance of $3.35 - $3.55 per share PSE&G expected to contribute >80% of 2021 non-GAAP Operating Earnings PSEG’s 5-yea
Slide 31: Introducing PSEG 2021 Guidance - By Subsidiary
Introducing 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) $1,410 - $1,470 $1,327 PSEG Power $280 - $370 $430 PSEG Enterprise/Other ($15) ($16) Operating Earnings (non-GA
Slide 32: Appendix
APPENDIX
Slide 33: CEF-Energy Cloud/AMI Settlement Approved
CEF-Energy Cloud/AMI Settlement Approved • NJBPU approved settlement of the CEF-EC filing between BPU Staff and Rate Counsel • Total investment of $707 million over four years* • PSE&G will defer earnings and cash return of and on CEF-EC investment until its next base rate case; Roll-in will include
Slide 34: CEF-EV Program Descriptions
CEF-EV Program Descriptions Residential Smart Charging Single-Family Homes $80M investment ~40,000 chargers • PSE&G will provide funding towards the installation of Level 2 networked EV Chargers at residences in the PSE&G territory. • PSE&G will also provide customer incentives to encourage charging
Slide 35: PSEG maintains a solid financial position
PSEG maintains a solid financial position PSE&G Senior Secured Credit Ratings PSEG Senior Unsecured Credit Ratings Moody’s = Aa3 / Outlook = Stable Moody’s = Baa1 / Outlook = Stable S&P = A / Outlook = Stable S&P = BBB / Outlook = Stable 2020 PSE&G Debt Issuances HoldCo Term Loans and Sr. Notes Outs
Slide 36: PSEG powering New Jersey's response to COVID-19
PSEG powering New Jersey’s response to COVID-19 New Jersey Gradually Re-Opens from COVID-19 Stay-at-Home Order NJ stay-at-home order lifted June 9; NJ continues phased re-opening of its economy NJBPU approved restart of in-home utility services May 20 with COVID-19 safety protocols PSEG Response
Slide 37: Reconciliation of Non-GAAP Operating Earnings
Reconciliation of Non-GAAP Operating Earnings Public Service Enterprise Group Incorporated - Consolidated Operating Earnings (Non-GAAP) Reconciliation Three Months Ended Year Ended Reconciling Items December 31, December 31, 2020 2019 2020 2019 2018 2017 ($ millions, Unaudited) Net Income $ 431 $ 43
Slide 38: 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 December 31, December 31, 2020 2019 2020 2019 ($ millions, Unaudited) Net Income $ 157 $ 1
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