Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q2 2015 Earnings Presentation
34 slides from Public Service Enterprise's earnings presentation, Jul 31, 2015
Slide 1: PSEG Earnings Conference Call 2nd Quarter 2015
EXHIBIT 99.1 Public Service Enterprise Group PSEG Earnings Conference Call nd 2 Quarter 2015 July 31, 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 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: 2015 Q2 Review
PSEG 2015 Q2 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q2 Earnings Summary
Q2 Earnings Summary Quarter ended June 30 $ millions (except EPS) 2015 2014 Operating Earnings $ 289 $ 245 Reconciling Items, Net of Tax 56 (33) Net Income $ 345 $ 212 EPS from Operating Earnings* $ 0.57 $ 0.49 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. 4
Slide 6: First Half 2015 Earnings Summary
First Half 2015 Earnings Summary Six months ended June 30 $ millions (except EPS) 2015 2014 Operating Earnings $ 818 $ 760 Reconciling Items, Net of Tax 113 (162) Net Income $ 931 $ 598 EPS from Operating Earnings* $ 1.61 $ 1.50 5 * See Slide A for Items excluded from Net Income to reconcile to Oper
Slide 7: Q2 2015 Highlights
PSEG – Q2 2015 Highlights Earnings on Track Operating earnings of $0.57 vs. $0.49 per share in Q2 2014, up 16% Increased earnings contribution from PSE&G’s investment in Transmission Updating full-year 2015 Operating Earnings guidance to $2.80 - $2.95 per share – assuming normal weather and plant op
Slide 8: Updating 2015 Operating Earnings Guidance
PSEG – Updating 2015 Operating Earnings Guidance Full-year 2015 guidance update reflects the strength of results for both businesses for the first half of the year, and assumes normal weather and unit operations $2.80 - $2.95E $2.58 $2.76 2013 Operating Earnings* 2014 Operating Earnings* 2015 Operat
Slide 9: 2015 Q2 Operating Company Review
PSEG 2015 Q2 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer
Slide 10: Q2 Operating Earnings by Subsidiary
Q2 Operating Earnings by Subsidiary Quarter ended June 30 Operating Earnings Earnings per Share $ millions (except EPS) 2015 2014 2015 2014 PSE&G $ 167 $ 151 $ 0.33 $ 0.30 PSEG Power 110 87 0.22 0.17 PSEG Enterprise/Other 12 7 0.02 0.02 Operating Earnings* $ 289 $ 245 $ 0.57 $ 0.49 * See Slide A for
Slide 11: EPS Reconciliation – Q2 2015 versus Q2 2014
PSEG EPS Reconciliation – Q2 2015 versus Q2 2014 0.60 0.05 0.00 $0.57 0.03 $0.49 0.50 Re-Contracting & Lower Transmission Cost to Serve 0.10 0.40 Net Earnings 0.04 Higher Volume Gas Volume 0.01 0.02 0.30 Electric Volume Capacity (0.08) & Demand 0.01 0.20 O&M (0.01) Distribution O&M (0.02) D&A (0.01)
Slide 12: First Half Operating Earnings by Subsidiary
First Half Operating Earnings by Subsidiary Six months ended June 30 Operating Earnings Earnings per Share $ millions (except EPS) 2015 2014 2015 2014 PSE&G $ 409 $ 365 $ 0.80 $ 0.72 PSEG Power 388 380 0.77 0.75 PSEG Enterprise/Other 21 15 0.04 0.03 Operating Earnings* $ 818 $ 760 $ 1.61 $ 1.50 11 •
Slide 13: EPS Reconciliation – First Half 2015 versus First Half 2014
PSEG EPS Reconciliation – First Half 2015 versus First Half 2014 1.75 0.08 0.02 0.01 $1.61 $1.50 1.50 Re-Contracting PSEG Long & Lower Cost Island Transmission to Serve 0.14 Net Earnings 0.07 1.25 Gas Send-Out & Fixed Gas Volume & Cost Recovery 0.04 Demand 0.02 1.00 Electric Volume & Higher Volume 0
Slide 14: PSE&G 2015 Q2 Review
PSE&G 2015 Q2 Review
Slide 15: PSE&G – Q2 EPS Summary
PSE&G – Q2 EPS Summary $ millions (except EPS) Q2 2015 Q2 2014 Variance Operating Revenues $ 1,466 $ 1,435 $ 31 Operating Expenses Energy Costs 544 565 (21) Operation & Maintenance 368 362 6 Depreciation & Amortization 234 217 17 Total Operating Expenses 1,146 1,144 2 Operating Earnings/Net Income $
Slide 16: PSE&G EPS Reconciliation – Q2 2015 versus Q2 2014
PSE&G EPS Reconciliation – Q2 2015 versus Q2 2014 0.40 0.06 (0.03) $0.33 $0.30 0.30 Higher Pension Transmission Expense (0.01) Net Earnings 0.04 Distribution 0.20 Gas Volume 0.01 O&M (0.01) Electric Volume & Taxes & Demand 0.01 Other (0.01) 0.10 0.00 Q2 2014 Q2 2015 Operating Operating Earnings* Ear
Slide 17: PSE&G – Monthly Weather Data
PSE&G – Monthly Weather Data PSE&G Monthly Temperature Humidity Index (THI) 2015 vs. 2014 vs. Normal 4500 4000 +40% Q2 2015 vs. Q2 2014 3500 3,060 +19% Q2 2015 vs. Normal 2,943 2,771 3000 2500 2000 1,836 1500 813 1000 579 500 84 171 34 0 April May June 2015 2014 Normal 16
Slide 18: PSE&G – Q2 2015 Operating Highlights
PSE&G – Q2 2015 Operating Highlights Operations Q2 2015 weather was warmer than Q2 2014 and warmer than normal Economy slowly improving, weather normalized electric sales up 0.2% in Q2: Residential demand up 0.6% and commercial sector up 0.6% in Q2, offset by industrial sales Gas deliveries (weather
Slide 19: PSEG Power 2015 Q2 Review
PSEG Power 2015 Q2 Review
Slide 20: PSEG Power – Q2 EPS Summary
PSEG Power – Q2 EPS Summary Q2 2015 Q2 2014 Variance $ millions (except EPS) Operating Revenues $ 1,025 $ 986 $ 39 Operating Earnings 110 87 23 Reconciling Items, Net of Tax** 56 (33) 89 Net Income $ 166 $ 54 $ 112 EPS from Operating Earnings* $ 0.22 $ 0.17 $ 0.05 * See Slide A for Items excluded fr
Slide 21: Power EPS Reconciliation – Q2 2015 versus Q2 2014
PSEG Power EPS Reconciliation – Q2 2015 versus Q2 2014 0.30 0.25 0.03 $0.22 0.04 (0.02) 0.20 $0.17 0.15 O&M (0.01) Taxes & Re-Contracting Other & Lower Cost D&A (0.01) 0.10 to Serve 0.10 Higher Volume 0.02 0.05 Capacity (0.08) 0.00 Q2 2014 Q2 2015 Operating Operating Earnings* Earnings* * See Slide
Slide 22: Power's Adjusted EBITDA - Q2 2015, YTD and Full-Year 2015 Guidance
PSEG Power’s Adjusted EBITDA - Q2 2015, YTD and Full-Year 2015 Guidance PSEG Power - Adjusted EBITDA* Three Months Six Months (YTD) Full-Year 2015 Ended June 30, Ended June 30, Guidance ($ in millions) 2015 2014 2015 2014 Low High Operating Earnings** $110 $87 $388 $380 $620 $680 Add: Fossil Major M
Slide 23: Power – Q2 2015 Generation Measures
PSEG Power – Q2 2015 Generation Measures Generation by Fuel (GWh)* Fleet Capacity Factors (%) Quarter ended June 30 Quarter ended June 30 14,000 13,233 12,050 2014 2015 4,831 Combined Cycle 3,788 PJM and NY 49% 61% 1,273 Coal** 1,724 7,000 NJ (Coal/Gas) 14% 3% PA 80% 73% 7,129 CT 4% 0% 6,538 Nuclear
Slide 24: Power – YTD 2015 Generation Measures
PSEG Power – YTD 2015 Generation Measures Generation by Fuel (GWh)* Fleet Capacity Factors (%) Six Months ended June 30 Six Months ended June 30 30,000 27,771 26,618 2014 2015 9,007 Combined Cycle 7,764 20,000 PJM and NY 48% 58% Coal** 4,266 3,803 NJ (Coal/Gas) 17% 9% PA 81% 82% 10,000 CT 38% 34% 14
Slide 25: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended June 30 YTD June 30 ($ millions) 2014 2015 ($ millions) 2014 2015 Coal $40 $30 Coal $127 $112 Oil & Gas 119 82 Oil & Gas 484 329 Total Fossil 159 112 Total Fossil 611 441 Nuclear 47 51 Nuclear 109 106 Total Fuel Cost $206 $163 Total Fuel
Slide 26: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Wholesale energy prices affected by over-supply of natural gas and constraints on electric transmission line Increase of $4/MWh in average hedge price Q2 year-over-year capacity prices reset on June 1 to ~$168/MW-day and remain stable for the next two capacity y
Slide 27: Hedging Update
Hedging Update Contracted Energy* Jul-Dec 2015 2016 2017 Volume TWh 18 37 37 Base Load % Hedged 100% 85-90% 50-55% (Nuclear and Base Load Coal) Price $/MWh $53 $51 $50 Volume TWh 11 19 18 Intermediate Coal, Combined % Hedged 30-35% 0% 0% Cycle, Peaking Price $/MWh $53 -- -- Volume TWh 25-30 55-57 55
Slide 28: Power – Q2 2015 Operating Highlights
PSEG Power – Q2 2015 Operating Highlights Operations Q2 output up 10%; average capacity factor achieved by nuclear fleet 86%, CCGTs achieved 61% Uprates completed at Peach Bottom (~65 MW) and Advanced Gas Path (~31MW) at Bergen 2 Dispatch of coal units affected by decline in price of gas Regulatory
Slide 29: PSEG
PSEG
Slide 30: Financial Highlights
PSEG Financial Highlights Updating full-year 2015 operating earnings guidance to $2.80 - $2.95 per share Focused on maintaining operating efficiency and customer reliability PSE&G expected to contribute over 50% of 2015 operating earnings Infrastructure Spend PSE&G T&D spend for 2015 expected to be
Slide 31: 2015 Updated Guidance for Operating Income by Subsidiary and PSEG Power Adjusted EBITDA
PSEG 2015 Updated Guidance for Operating Income – by Subsidiary and PSEG Power Adjusted EBITDA Anticipates Another Year of Growth in Operating Earnings $ millions (except EPS) 2015E 2014 PSE&G $760 - $775 $725 PSEG Power $620 - $680 $642 PSEG Enterprise/Other $40 - $45 $33 Operating Earnings* $1,420
Slide 32: Liquidity as of June 30, 2015
PSEG Liquidity as of June 30, 2015 31
Slide 33: Items Excluded from Net Income to Reconcile to Operating Earnings
Items Excluded from Net Income to Reconcile to Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Consolidated Operating Earnings Reconciliation Three Months Ended Six Months Ended Year Ended Reconciling Items, net of tax June 30, June 30, December 31, 2015 2014 2015 2014 2014 2013 ($ M
Slide 34: Items Excluded to Reconcile to Operating Earnings and Adjusted EBITDA
Items Excluded from Net Income to Reconcile to Operating Earnings and Adjusted EBITDA PSEG Power Adjusted EBITDA Reconcilation Three Months Ended Six Months Ended Year Ended Reconciling Items June 30, June 30, December 31, 2015 2014 2015 2014 2014 ($ Millions, Unaudited) Adjusted EBITDA $ 301 $ 276
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