Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q3 2014 Earnings Presentation
33 slides from Public Service Enterprise's earnings presentation, Oct 30, 2014
Slide 1: PSEG Earnings Conference Call 3rd Quarter 2014
Public Service Enterprise Group PSEG Earnings Conference Call 3rd Quarter 2014 October 30, 2014
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 Q3 Review
PSEG 2014 Q3 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q3 Earnings Summary
Q3 Earnings Summary Quarter ended September 30 $ millions (except EPS) 2014 2013 Operating Earnings $ 393 $ 385 Reconciling Items, Net of Tax 51 5 Net Income $ 444 $ 390 EPS from Operating Earnings* $ 0.77 $ 0.76 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. 4
Slide 6: Year to Date Earnings Summary
Year to Date Earnings Summary Nine months ended September 30 $ millions (except EPS) 2014 2013 Operating Earnings $ 1,153 $ 1,061 Reconciling Items, Net of Tax (111) (18) Net Income $ 1,042 $ 1,043 EPS from Operating Earnings* $ 2.27 $ 2.09 * See Slide A for Items excluded from Net Income to reconci
Slide 7: Q3 2014 Highlights
PSEG – Q3 2014 Highlights Operating Earnings of $0.77 vs. $0.76 per share in Q3 2013 Delivered solid results in the quarter as PSE&G’s continuing investment in transmission drove results Narrowed 2014 full–year, operating earnings guidance to $2.60-$2.75 per share, from $2.55-$2.75 per share p
Slide 8: 2014 Another Year of Growth
PSEG – 2014 Another Year of Growth 2014 operating earnings guidance narrowed; forecast full-year at upper end of range, assuming normal weather and unit operations for rest of year $2.60 - $2.75E $2.44 $2.58 2012 Operating Earnings* 2013 Operating Earnings* 2014 Operating Earnings Guidance * See Sli
Slide 9: 2014 Q3 Operating Company Review
PSEG 2014 Q3 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer
Slide 10: Q3 Operating Earnings by Subsidiary
Q3 Operating Earnings by Subsidiary Quarter ended September 30 Operating Earnings Earnings per Share $ millions (except EPS) 2014 2013 2014 2013 PSE&G $ 200 $ 168 $ 0.39 $ 0.33 PSEG Power 171 221 0.34 0.43 PSEG Enterprise/Other 22 (4) 0.04 - Operating Earnings* $ 393 $ 385 $ 0.77 $ 0.76 9 * See Slid
Slide 11: EPS Reconciliation – Q3 2014 versus Q3 2013
PSEG EPS Reconciliation – Q3 2014 versus Q3 2013 1.00 0.06 (0.09) $0.76 0.04 $0.77 0.75 Transmission 0.04 Capacity (0.09) PSEG Long Island and Other Electric Volume Re-Contracting & Demand 0.01 $ / share & Market 0.50 Pricing (0.04) Weather (0.02) Weather (0.03) Distribution O&M 0.02 O&M 0.06 0.25 I
Slide 12: Year to Date Operating Earnings by Subsidiary
Year to Date Operating Earnings by Subsidiary Nine months ended September 30 Operating Earnings Earnings per Share $ millions (except EPS) 2014 2013 2014 2013 PSE&G $ 565 $ 468 $ 1.11 $ 0.92 PSEG Power 551 595 1.09 1.17 PSEG Enterprise/Other 37 (2) 0.07 - Operating Earnings* $ 1,153 $ 1,061 $ 2.27 $
Slide 13: EPS Reconciliation – YTD 2014 versus YTD 2013
PSEG EPS Reconciliation – YTD 2014 versus YTD 2013 2.50 0.19 (0.08) 0.07 $2.27 $2.09 2.00 Capacity 0.05 PSEG Long Island Transmission 0.10 And Other Re-Contracting Gas Volume, & Market Pricing Demand & Other (0.07) 1.50 Revenue 0.03 $ / share Weather (0.03) Electric Volume & Demand 0.01 Lower Volume
Slide 14: PSE&G 2014 Q3 Review
PSE&G 2014 Q3 Review
Slide 15: PSE&G – Q3 Earnings Summary
PSE&G – Q3 Earnings Summary $ millions (except EPS) Q3 2014 Q3 2013 Variance Operating Revenues $ 1,655 $ 1,666 (11) Operating Expenses Energy Costs 668 661 7 Operation & Maintenance 366 408 (42) Depreciation & Amortization 238 236 2 Taxes Other than Income Taxes - 15 (15) Total Operating Expenses 1
Slide 16: PSE&G EPS Reconciliation – Q3 2014 versus Q3 2013
PSE&G EPS Reconciliation – Q3 2014 versus Q3 2013 0.50 0.03 (0.02) 0.05 $0.39 0.40 $0.33 Weather Distribution O&M 0.30 0.02 Transmission 0.04 $ / share Interest & Electric Volume Other 0.01 0.20 & Demand 0.01 0.10 0.00 Q3 2013 Q3 2014 Operating Operating Earnings Earnings 15
Slide 17: PSE&G – Monthly Summer Weather Data
PSE&G – Monthly Summer Weather Data PSE&G Monthly Temperature Humidity Index (THI) 2014 vs. 2013 vs. Normal 7,000 6,977 -18.4% Q3 2014 vs. Q3 2013 6,000 -14% Q3 2014 vs. Normal 5,000 5,213 4,587 4,607 THI 4,000 3,691 3,000 3,397 2,000 2,101 1,906 1,687 1,000 0 July August September 2014 2013 Normal
Slide 18: PSE&G – Q3 Operating Highlights
PSE&G – Q3 Operating Highlights Operations Weather in Q3 2014 was 18% cooler than Q3 2013 and 14% cooler than normal Transmission revenues added $0.04 per share over Q3 2013 O&M remains under control Regulatory and Market Environment Transmission projects on schedule and on budget Energy S
Slide 19: PSEG Power 2014 Q3 Review
PSEG Power 2014 Q3 Review
Slide 20: Power – Q3 Earnings Summary
PSEG Power – Q3 Earnings Summary $ millions (except EPS) Q3 2014 Q3 2013 Variance Operating Revenues $ 1,138 $ 1,174 $ (36) Operating Earnings 171 221 (50) Reconciling Items, Net of Tax** 51 5 46 Net Income 222 226 (4) EPS from Operating Earnings* $ 0.34 $ 0.43 $ (0.09) * See Slide A for Items exclu
Slide 21: Power EPS Reconciliation – Q3 2014 versus Q3 2013
PSEG Power EPS Reconciliation – Q3 2014 versus Q3 2013 0.50 $0.43 (0.16) 0.40 0.01 $0.34 0.06 0.30 Taxes and $ / share Capacity (0.09) Other O&M 0.20 Re-Contracting and Market Pricing (0.04) Weather (0.03) 0.10 0.00 Q3 2013 Q3 2014 Operating Operating Earnings* Earnings* * See Slide A for Items excl
Slide 22: Power – Generation Measures
PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Quarter ended September 30 Quarter ended September 30 14,690 15,000 14,111 2013 2014 Combined Cycle 4,677 5,294 PJM and NY 60.4% 67.5% 1,831 Coal 1,936 7,500 NJ (Coal/Gas) 16.3% 21.5% PA 83.1% 71.8% 7,49
Slide 23: Power – Generation Measures
PSEG Power – Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Nine Months ended September 30 Nine Months ended September 30 45,000 40,986 41,306 2013 2014 12,677 13,058 Combined Cycle 30,000 PJM and NY 57.0% 54.7% 5,526 6,096 Coal* NJ (Coal/Gas) 14.2% 18.6% 15,000
Slide 24: Power – Fuel Costs
PSEG Power – Fuel Costs PSEG Power – Fuel Costs Nine months ended Quarter ended September 30 September 30 ($ millions) 2013 2014 ($ millions) 2013 2014 Coal 45.1 42.2 Coal 141.3 169.7 Oil & Gas 146.1 139.5 Oil & Gas 483.8 623.4 Total Fossil 191.2 181.7 Total Fossil 625.1 793.1 Nuclear 56.5 53.2 Nucl
Slide 25: Power – Gross Margin Performance
PSEG Power – Gross Margin Performance Capacity pricing reset to $166/MW-day on June 1, to remain stable over multi-year period Mild summer weather weighed on spot market prices Lower spark spreads compared with Q3 2013 PSEG Power Gross Margin ($/MWh) Regional Performance Quarter ended Nine mon
Slide 26: Power expanding supply of low-cost Marcellus gas: Proposed PennEast Pipeline Project
PSEG Power expanding supply of low-cost Marcellus gas Proposed PennEast Pipeline Project PSEG plans to invest $100-$120 million in the to-be-constructed PennEast Pipeline, a 105.5 mile pipeline that would bring gas from eastern Pennsylvania to New Jersey PSEG ER&T would contract for approximatel
Slide 27: Hedging Update
Hedging Update… Contracted Energy* Oct-Dec 2014 2015 2016 Volume TWh 8 36 36 Base Load % Hedged 100% 100% 55-60% (Nuclear and Base Load Coal) Price $/MWh $49 $50 $49 Volume TWh 5 21 21 Intermediate Coal, Combined % Hedged 50-55% 5-10% 0% Cycle, Peaking Price $/MWh $49 $50 $49 Volume TWh 13 55-57 55-
Slide 28: Power – Q3 2014 Operating Highlights
PSEG Power – Q3 2014 Operating Highlights Operations Q3 output up 4% from Q3 2013 YTD nuclear capacity factor was 91%; Q3 capacity factor was 92% Salem 1 refueling outage underway CCGT capacity factor improved 7% from Q3 2013 Regulatory and Market Environment PJM active on ensuring future
Slide 29: PSEG
PSEG
Slide 30: Financial Highlights
PSEG Financial Highlights 2014 operating earnings guidance narrowed to $2.60 - $2.75 per share Focused on maintaining operating efficiency and customer reliability PSE&G’s operating earnings on track to grow at double-digit rate in 2014 PSE&G transmission investment program continues on-track
Slide 31: 2014 Operating Earnings Guidance - By Subsidiary
PSEG 2014 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2014E 2013 2012 PSE&G $710 – $745 $612 $528 PSEG Power $575 – $610 $710 $663 PSEG Enterprise/Other $35 – $40 $(13) $45 Operating Earnings* $1,320 – $1,395 $1,309 $1,236 Earnings per Share $2.60 – $2.75 $2.58 $2.44 30 * See
Slide 32: Liquidity as of September 30, 2014
PSEG Liquidity as of September 30, 2014 Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Mar-18 $600 1 $14 $586 PSEG / 5-Year Credit Facility (Power) Apr-19 $1,600 $76 $1,524 Power 5-Year Credit Facility (Power) Mar-18 $1,000 2 $0 $1,
Slide 33: Items Excluded to Reconcile to Operating Earnings
Items Excluded from Net Income to Reconcile to Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Three Months Ended Nine Months Ended Year Ended Reconciling Items, net of tax September 30, September 30, December 31, 2014 2013 2014 2013 2013 2012 (Unaudited) Earnings Impact ($ Millions)
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