Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q4 2014 Earnings Presentation
33 slides from Public Service Enterprise's earnings presentation, Feb 20, 2015
Slide 1: PSEG Earnings Conference Call 4th Quarter & Year-end 2014
EXHIBIT 99.1 Public Service Enterprise Group PSEG Earnings Conference Call 4th Quarter & Year-end 2014 February 20, 2015
Slide 2: Forward-Looking Statement
Forward-Looking Statement Certain of the matters discussed in this report 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 “forward-look
Slide 3: GAAP Disclaimer
GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings is a non-GAAP financial measure that differs from Net Income because it excludes gains or losses associa
Slide 4: 2014 Q4 and Full Year Review
PSEG 2014 Q4 and Full Year Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q4 Earnings Summary
Q4 Earnings Summary Quarter ended December 31 $ millions (except EPS) 2014 2013 Operating Earnings $ 247 $ 248 Reconciling Items, Net of Tax 229 (48) Net Income $ 476 $ 200 EPS from Operating Earnings* $ 0.49 $ 0.49 4 * See Slide 32 for Items excluded from Net Income to reconcile to Operating Earnin
Slide 6: Full-year Earnings Summary – EPS exceeded guidance
Full-year Earnings Summary – EPS exceeded guidance Twelve Months ended December 31 $ millions (except EPS) 2014 2013 Operating Earnings $ 1,400 $ 1,309 Reconciling Items, Net of Tax 118 (66) Net Income $ 1,518 $ 1,243 EPS from Operating Earnings* $ 2.76 $ 2.58 5 * See Slide 32 for Items excluded fro
Slide 7: 2014 Highlights
PSEG – 2014 Highlights Strong 2014 financial performance – exceeded upper end of guidance Achieved operating earnings of $2.76 per share, up 7% compared to $2.58 per share in 2013 PSE&G achieved double-digit growth in earnings, adding to 5 years of 18% compound annual growth PSEG Power’s operating e
Slide 8: Annual Dividend – Increased 5.4%
PSEG Annual Dividend – Increased 5.4% An improved rate of growth in the dividend, building on a long history of returning cash to the shareholder PSEG Annual Dividend Rate Payout 63% 66% 43% 44% 43% 44% 50% 58% 56% 54% 55%** Ratio *INDICATED ANNUAL PSEG COMMON DIVIDEND RATE PER SHARE. **2015 PAYOUT
Slide 9: 2015 Earnings Guidance – Anticipates Another Year of Growth
PSEG 2015 Earnings Guidance – Anticipates Another Year of Growth 2015 guidance reflects continued increased level of investment, and assumes normal weather and unit operations $2.75 - $2.95E $2.58 $2.76 * See Slide 32 for Items excluded from Net Income to reconcile to Operating Earnings. E = Estimat
Slide 10: 2014 Q4 Operating Company Review
PSEG 2014 Q4 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer
Slide 11: Q4 Operating Earnings by Subsidiary
Q4 Operating Earnings by Subsidiary Quarter ended December 31 Operating Earnings Earnings per Share $ millions (except EPS) 2014 2013 2014 2013 PSE&G $ 160 $ 144 $ 0.32 $ 0.29 PSEG Power 91 115 0.18 0.23 PSEG Enterprise/Other (4) (11) (0.01) (0.03) Operating Earnings* $ 247 $ 248 $ 0.49 $ 0.49 10 *
Slide 12: EPS Reconciliation – Q4 2014 versus Q4 2013
PSEG EPS Reconciliation – Q4 2014 versus Q4 2013 0.60 0.03 (0.05) $0.49 0.02 $0.49 0.50 Transmission 0.02 Capacity (0.09) Taxes 0.40 O&M (Distribution) 0.04 and Re-Contracting Other Gas Volume and Market 0.30 & Demand 0.01 Pricing 0.01 Electric Volume O&M 0.05 0.20 & Demand (0.01) D&A and Weather (0
Slide 13: Strong Full-year Operating Earnings Delivered – Up 7%
Strong Full-year Operating Earnings Delivered – Up 7% Twelve Months ended December 31 Operating Earnings Earnings per Share $ millions (except EPS) 2014 2013 2014 2013 PSE&G $ 725 $ 612 $ 1.43 $ 1.21 PSEG Power 642 710 1.27 1.40 PSEG Enterprise/Other 33 (13) 0.06 (0.03) Operating Earnings* $ 1,400 $
Slide 14: EPS Reconciliation – Full-year 2014 versus Full-year 2013
PSEG EPS Reconciliation – Full-year 2014 versus Full-year 2013 3.00 0.22 (0.13) 0.09 $2.76 $2.58 2.50 Transmission 0.11 Capacity (0.04) Taxes 0.04 2.00 Gas Volume Re-Contracting PSEG & Demand 0.03 and Market Long Island 0.02 Pricing (0.10) 1.50 Weather (0.02) Other 0.03 O&M 0.02 O&M (Distribution) 1
Slide 15: PSE&G 2014 Q4 Review
PSE&G 2014 Q4 Review
Slide 16: PSE&G – Q4 Earnings Summary
PSE&G – Q4 Earnings Summary $ millions (except EPS) Q4 2014 Q4 2013 Variance Operating Revenues $ 1,531 $ 1,571 $ (40) Operating Expenses Energy Costs 631 633 (2) Operation & Maintenance 368 435 (67) Depreciation & Amortization 224 214 10 Taxes Other than Income Taxes - 18 (18) Total Operating Expen
Slide 17: PSE&G EPS Reconciliation – Q4 2014 versus Q4 2013
PSE&G EPS Reconciliation – Q4 2014 versus Q4 2013 0.04 (0.02) 0.35 $0.32 0.01 0.30 $0.29 Taxes O&M and Other 0.25 Transmission (Distribution) Margin 0.02 0.20 Gas Volume & Demand 0.01 0.15 Electric Volume & 0.10 Demand (0.01) Weather (0.01) 0.05 0.00 Q4 2013 Q4 2014 Operating Operating Earnings Earn
Slide 18: PSE&G – Q4 Operating Highlights
PSE&G – Q4 Operating Highlights Operations Q4 weather was warmer than both Q4 2013 and normal: Heating degree days were 4.2% lower than Q4 ‘13 and 0.7% lower than normal Gas sales were up 1% for Q4 and up 3.1% for the year on a weather normalized basis Electric sales were down 2.3% in Q4 but up 0.3%
Slide 19: Power 2014 Q4 Review
PSEG Power 2014 Q4 Review
Slide 20: Power – Q4 EPS Summary
PSEG Power – Q4 EPS Summary $ millions (except EPS) Q4 2014 Q4 2013 Variance Operating Revenues $ 1,610 $ 1,245 $ 365 Operating Earnings 91 115 (24) Pro Forma Adjustments, 229 (48) 277 Net of Tax** Net Income $ 320 $ 67 $ 253 EPS from Operating Earnings* $ 0.18 $ 0.23 $ (0.05) * See Slide 32 for Ite
Slide 21: Power EPS Reconciliation – Q4 2014 versus Q4 2013
PSEG Power EPS Reconciliation – Q4 2014 versus Q4 2013 0.25 $0.23 (0.08) 0.20 0.03 $0.18 0.15 Lower Capacity (0.09) Lower O&M 0.05 0.10 Re-Contracting and Market D&A and Pricing 0.01 Other (0.02) 0.05 0.00 Q4 2013 Q4 2014 Operating Operating Earnings* Earnings* 20 * See Slide 32 for Items excluded f
Slide 22: Power – Q4 Generation Measures – Volume %
PSEG Power – Q4 Generation Measures –Volume % PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Quarter ended December 31 Quarter ended December 31 15,000 12,859 2013 2014 12,471 Combined Cycle 3,962 4,637 PJM and NY 53.1% 59.9% Coal* 7,500 1,797 1,266 NJ (Coal/Gas) 3.2% 0.7% PA 87.3%
Slide 23: Power – Full-Year Generation Measures – Volume %
PSEG Power – Full-Year Generation Measures – Volume % PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Twelve months ended December 31 Twelve months ended December 31 60,000 53,458 54,162 2013 2014 50,000 Combined Cycle 16,640 17,693 PJM and NY 56.0% 56.0% 40,000 7,323 7,361 Coal* 30,
Slide 24: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Twelve months ended Quarter ended December 31 December 31 ($ millions) 2013 2014 ($ millions) 2013 2014 Coal 47.3 38.8 Coal 188.7 208.5 Oil & Gas 134.9 134.2 Oil & Gas 618.8 757.7 Total Fossil 182.2 173.0 Total Fossil 807.5 966.2 Nuclear 53.6 48.5 Nucl
Slide 25: Power – Q4 2014 Gross Margin Performance
PSEG Power – Q4 2014 Gross Margin Performance Lower capacity pricing in second half of 2014 Lower quarter-over-quarter market prices influenced by warmer than normal weather Access to Marcellus gas continues to provide fuel cost savings PSEG Power Gross Margin ($/MWh) Regional Performance Quarter en
Slide 26: Market Perspective – 2015 BGS Auction Results
Market Perspective – 2015 BGS Auction Results Full Requirements Component Capacity Markets/RPM Growing Renewable Energy/Transmission Component for Market Risk $97.39 $99.54 $94.30 $92.18 $83.88 ~ $62 Capacity ~ $59 Load shape Transmission ~ $48 ~ $53 ~ $46 Congestion Ancillary services Risk premium
Slide 27: Hedging Update…
Hedging Update… Contracted Energy* 2015 2016 2017 Volume TWh 36 36 36 Base Load % Hedged 100% 80-85% 40-45% (Nuclear and Base Load Coal) Price $/MWh $52 $52 $52 Volume TWh 21 19 19 Intermediate Coal, Combined % Hedged 40-45% 0% 0% Cycle, Peaking Price $/MWh $52 $52 $52 Volume TWh 55-57 55-57 55-57 T
Slide 28: Power – Q4 2014 Operating Highlights
PSEG Power – Q4 2014 Operating Highlights Operations Q4 output up 3.1% over Q4 2013; YTD generation up 1.3% to 54.2 TWh Nuclear capacity factor of 84.5% for Q4, completed refuelings at Salem 1 and Peach Bottom 2 For 2014, nuclear capacity factor was 89.3%; Hope Creek at 100% capacity factor in Q4 nd
Slide 29: PSEG
PSEG
Slide 30: Financial Highlights
PSEG Financial Highlights Introducing 2015 operating earnings guidance of $2.75 - $2.95 per share Focused on maintaining operating efficiency and customer reliability PSE&G expected to contribute over 50% of 2015 operating earnings Energy Strong Infrastructure Spend BPU authorized $1.22 billion for
Slide 31: 2015 Operating Earnings Guidance - By Subsidiary
PSEG 2015 Operating Earnings Guidance - By Subsidiary Anticipates Another Year of Growth $ millions (except EPS) 2015E 2014 2013 PSE&G $735 - $775 $725 $612 PSEG Power $620 - $680 $642 $710 PSEG Enterprise/Other $40 - $45 $33 $(13) Operating Earnings* $1,395 - $1,500 $1,400 $1,309 Earnings per Share
Slide 32: Liquidity as of December 31, 2014
PSEG Liquidity as of December 31, 2014 31
Slide 33: Items Excluded from Net income to Reconcile to Operating Earnings
Items Excluded from Net income to Reconcile to Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Three Months Ended Year Ended Reconciling Items, net of tax December 31, December 31, 2014 2013 2014 2013 (Unaudited) Earnings Impact ($ Millions) Operating Earnings $ 247 $ 248 $ 1,400 $ 1
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