Public Service Enterprise Group Incorporated · NYSE:PEG

Public Service Enterprise — Q2 2013 Earnings Presentation

37 slides from Public Service Enterprise's earnings presentation, Jul 30, 2013

  1. Slide 1: PSEG Earnings Conference Call 2nd Quarter 2013

    Public Service Enterprise Group PSEG Earnings Conference Call 2nd Quarter 2013 July 30, 2013

  2. Slide 2: Forward-Looking Statement

    Forward-Looking Statement Certain of the matters discussed in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to di

  3. Slide 3: GAAP Disclaimer

    GAAP Disclaimer PSEG presents Operating Earnings in addition to Income from Continuing Operations/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 ex

  4. Slide 4: 2013 Q2 Review

    PSEG 2013 Q2 Review Ralph Izzo Chairman, President and Chief Executive Officer

  5. Slide 5: Q2 Earnings Summary

    Q2 Earnings Summary Quarter ended June 30 $ millions (except EPS) 2013 2012 Operating Earnings $ 243 $ 215 Reconciling Items, Net of Tax 90 (4) Income from Continuing Operations/Net $ 333 $ 211 Income EPS from Operating Earnings* $ 0.48 $ 0.43 4 * See Page A for Items excluded from Income from Conti

  6. Slide 6: First Half 2013 Earnings Summary

    First Half 2013 Earnings Summary Six months ended June 30 $ millions (except EPS) 2013 2012 Operating Earnings $ 676 $ 647 Reconciling Items, Net of Tax (23) 57 Income from Continuing Operations/ $ 653 $ 704 Net Income EPS from Operating Earnings* $ 1.33 $ 1.28 5 * See Page A for Items excluded from

  7. Slide 7: PSEG – Q2 2013 Highlights

    PSEG – Q2 2013 Highlights  Strong Earnings  Operating earnings of $0.48 vs. $0.43 per share in Q2 2012  Power benefitted from higher PJM capacity prices and an improvement in market prices for energy  Increased contribution to earnings from PSE&G’s investment in transmission  Operational Excell

  8. Slide 8: PSEG – Maintaining 2013 Guidance

    PSEG – Maintaining 2013 Guidance Based on our performance year-to-date, we expect operating earnings for the full year to be at the upper end of guidance assuming normal weather and unit operations $2.74 $2.44 $2.25 - $2.50E 2011 Operating Earnings* 2012 Operating Earnings* 2013 Operating Earnings G

  9. Slide 9: 2013 Q2 Operating Company Review

    PSEG 2013 Q2 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer

  10. Slide 10: Q2 Operating Earnings by Subsidiary

    Q2 Operating Earnings by Subsidiary Quarter ended June 30 Operating Earnings Earnings per Share $ millions (except EPS) 2013 2012 2013 2012 PSEG Power $ 114 $ 110 $ 0.22 $ 0.22 PSE&G 121 101 0.24 0.20 PSEG Energy Holdings/ 8 4 0.02 0.01 Enterprise Operating Earnings* $ 243 $ 215 $ 0.48 $ 0.43 9 * Se

  11. Slide 11: EPS Reconciliation – Q2 2013 versus Q2 2012

    PSEG EPS Reconciliation – Q2 2013 versus Q2 2012 0.50 0.01 $0.48 0.04 $0.43 0.00 Asset Sale 0.40 Capacity 0.07 Transmission 0.04 Market Prices Taxes and 0.30 Other 0.01 on Un-hedged $ / share Generation 0.04 Net Weather Lower Pricing (0.01) 0.20 on Hedged Generation (0.11) 0.10 0.00 Q2 2012 PSEG Pow

  12. 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) 2013 2012 2013 2012 PSEG Power $ 364 $ 306 $ 0.71 $ 0.60 PSE&G 300 298 0.59 0.59 PSEG Energy Holdings/ 12 43 0.03 0.09 Enterprise Operating Earnings* $ 676 $ 647 $ 1.33

  13. Slide 13: EPS Reconciliation – YTD 2013 versus YTD 2012

    PSEG EPS Reconciliation – YTD 2013 versus YTD 2012 1.50 0.11 0.00 (0.06) $1.33 $1.28 1.25 Transmission Net Earnings 0.07 Asset Sale Capacity 0.12 0.01 Distribution Net Price (0.05) O&M (0.02) 1.00 Absence Volume 0.02 Net of Tax Weather 0.01 $ / share Gas Send-Out Settlement and Fixed Cost (0.07) 0.7

  14. Slide 14: Power 2013 Q2 Review

    PSEG Power 2013 Q2 Review

  15. Slide 15: Power – Q2 2013 EPS Summary

    PSEG Power – Q2 2013 EPS Summary $ millions (except EPS) Q2 2013 Q2 2012 Variance Operating Revenues $ 1,190 $ 985 $ 205 Operating Earnings 114 110 4 NDT Funds Related Activity, 8 4 4 Net of Tax Mark-to-Market, Net of Tax** 80 (10) 90 Storm O&M, Net of Insurance 2 - 2 Recoveries Income from Continui

  16. Slide 16: Power EPS Reconciliation – Q2 2013 versus Q2 2012

    PSEG Power EPS Reconciliation – Q2 2013 versus Q2 2012 0.30 $0.22 0.00 $0.22 0.20 Capacity 0.07 $ / share Market Prices on Un-hedged Generation 0.04 Lower Pricing on Hedged 0.10 Generation (0.11) 0.00 Q2 2012 Q2 2013 Operating Operating Earnings* Earnings* 15 * See Page A for Items excluded from Inc

  17. Slide 17: Power – Q2 2013 Generation Measures

    PSEG Power – Q2 2013 Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Quarter ended June 30 Quarter ended June 30 15,000 12,706 12,718 2012 2013 Combined Cycle 4,177 4,187 PJM and NY 57% 57% Coal 1,454 1,384 7,500 NJ (Coal/Gas) 14% 8% PA 64% 70% CT 3% 3% 7,075 7,14

  18. Slide 18: Power – YTD 2013 Generation Measures

    PSEG Power – YTD 2013 Generation Measures PSEG Power – Generation (GWh) PSEG Power – Capacity Factors (%) Six Months ended June 30 Six Months ended June 30 30,000 26,875 25,849 2012 2013 Combined Cycle 8,001 8,219 20,000 PJM and NY 57% 55% 3,590 Coal 2,585 NJ (Coal/Gas) 8% 13% PA 63% 78% 10,000 CT 3

  19. Slide 19: Power – Fuel Costs

    PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended June 30 YTD June 30 ($ millions) 2012 2013 ($ millions) 2012 2013 Coal $39 $30 Coal $77 $96 Oil & Gas 113 160 Oil & Gas 241 338 Total Fossil 152 190 Total Fossil 318 434 Nuclear 48 52 Nuclear 98 110 Total Fuel Cost $200 $242 Total Fuel Co

  20. Slide 20: Power – Gross Margin Performance

    PSEG Power – Gross Margin Performance  Locational advantage of generating portfolio offset lower prices in hedged products  Q2 spot prices higher across PJM-W, PS Zone, ISO-NE and NYISO  Margins stable with higher capacity pricing offsetting lower net pricing  Migration volumes in line with expe

  21. Slide 21: Hedging Update…

    Hedging Update… Contracted Energy* Jul -Dec 2013 2014 2015 Volume TWh 17 35 35 Base Load % Hedged 100% 90-95% 50-55% (Nuclear and Base Load Coal) Price $/MWh $51 $49 $49 Volume TWh 11 18 17 Intermediate Coal, Combined % Hedged 30-35% 0% 0% Cycle, Peaking Price $/MWh $51 $49 $49 Volume TWh 26-28 53-5

  22. Slide 22: Power – Q2 2013 Highlights

    PSEG Power – Q2 2013 Highlights Operations  Q2 output was flat year-over-year, reflecting Salem 1 extended refueling and a 6 day forced outage at Hope Creek  Nuclear capacity factor was 87.9% for Q2 and 94.4% for the YTD  Equivalent availability factors for CCGT units restored to pre-Sandy levels

  23. Slide 23: PSE&G 2013 Q2 Review

    PSE&G 2013 Q2 Review

  24. Slide 24: PSE&G – Q2 Earnings Summary

    PSE&G – Q2 Earnings Summary $ millions (except EPS) Q2 2013 Q2 2012 Variance Operating Revenues $ 1,423 $ 1,407 $ 16 Operating Expenses Energy Costs 580 622 (42) Operation & Maintenance 369 350 19 Depreciation & Amortization 207 188 19 Taxes Other than Income Taxes 14 20 (6) Total Operating Expenses

  25. Slide 25: PSE&G EPS Reconciliation – Q2 2013 versus Q2 2012

    PSE&G EPS Reconciliation – Q2 2013 versus Q2 2012 0.30 0.04 0.00 $0.24 $0.20 Taxes and 0.20 Other 0.01 Net $ / share Transmission Weather (0.01) Net Earnings 0.10 0.00 Q2 2012 Q2 2013 Operating Operating Earnings Earnings 24

  26. Slide 26: PSE&G – Monthly Summer Weather Data

    PSE&G – Monthly Summer Weather Data PSE&G Monthly Temperature Humidity Index (THI) 2013 vs. 2012 vs. Normal 4000 3600 3,330 + 10% Q2 2013 vs. Q2 2012 3200 3,023 + 18% Q2 2013 vs. Normal 2800 2,718 2400 2000 THI 1600 1,331 1,242 1200 754 800 400 179 163 83 0 April May June 2013 2012 Normal 25

  27. Slide 27: Capital Expenditures 2013-2015

    PSEG Capital Expenditures 2013-2015 Revised PSE&G 2013-2015 Capital Spending forecast includes new solar programs Transmission investment represents over 50% of planned capital spend over 2013-2015 Capital Spending Prior Updated ($ Millions) 2013-2015E 2013-2015E PSE&G Transmission $3,430 $3,430 D

  28. Slide 28: PSE&G – Q2 2013 Highlights

    PSE&G – Q2 2013 Highlights Operations  Q2 winter weather was significantly colder than Q2 2012 but only slightly colder than normal  Q2 summer weather was warmer than Q2 2012 and warmer than normal  A still-slow economy continues to weigh on electric demand; gas demand improving  O&M expected to

  29. Slide 29: Energy Holdings/Enterprise 2013 Q2 Review

    PSEG Energy Holdings/Enterprise 2013 Q2 Review

  30. Slide 30: Energy Holdings/Enterprise – Q2 2013 Earnings Summary

    PSEG Energy Holdings/Enterprise – Q2 2013 Earnings Summary $ millions (except EPS) Q2 2013 Q2 2012 Variance Operating Earnings $ 8 $ 4 $ 4 Lease Related Activity - 2 (2) Income from Continuing Operations/ $ 8 $ 6 $ 2 Net Income EPS from Operating Earnings* $ 0.02 $ 0.01 $ 0.01 29 * See Page A for It

  31. Slide 31: Energy Holdings/Enterprise EPS Reconciliation – Q2 2013 versus Q2 2012

    PSEG Energy Holdings/Enterprise EPS Reconciliation – Q2 2013 versus Q2 2012 0.05 $ / share 0.01 $0.02 $0.01 Asset Sale 0.00 Q2 2012 Q2 2013 Operating Operating Earnings* Earnings* * See Slide A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. 3

  32. Slide 32: Energy Holdings/Enterprise – Q2 2013 Highlights

    PSEG Energy Holdings/Enterprise – Q2 2013 Highlights Financial  Expanded LIPA management agreement under consideration  Edison Mission Energy agreement to defer lease decisions until late September  Badger 1 (19 MW) solar farm scheduled to be in service this Fall  Continuing to monetize non-core

  33. Slide 33: PSEG

    PSEG

  34. Slide 34: Financial Highlights

    PSEG Financial Highlights  Maintaining 2013 operating earnings guidance of $2.25 - $2.50 per share  Based on financial results to date, we expect operating earnings for the full year to be at the upper end of our guidance range assuming normal weather and unit operations  Focused on maintaining o

  35. Slide 35: 2013 Operating Earnings Guidance - By Subsidiary

    PSEG 2013 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2013E 2012A PSEG Power $535 – $600 $644 PSE&G $580 – $635 $528 PSEG Energy $25 – $35 $64 Holdings/Enterprise Operating Earnings* $1,140 – $1,270 $1,236 Earnings per Share $2.25 – $2.50 $2.44 * See Slide A for Items exclude

  36. Slide 36: Liquidity as of June 30, 2013

    PSEG Liquidity as of June 30, 2013 35

  37. Slide 37: Items Excluded from Income to Reconcile to Operating Earnings

    Items Excluded from Income from Continuing Operations/Net Income to Reconcile to Operating Earnings Please see Page 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Income from Continuing Operations/Net Income. A

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