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8-K - FORM 8-K - PUBLIC SERVICE ENTERPRISE GROUP INC | d928484d8k.htm |
2
Forward-Looking Statement
EXHIBIT 99
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-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 differ materially
from those anticipated. Such statements are based on management's beliefs as well as assumptions made by
and information currently available to management. When used herein, the words
anticipate, intend, estimate, believe, expect, plan, should, hypothetical, potential, forecast,
project, variations of such words and similar expressions are intended to identify
forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-
looking statements themselves. Other factors that could cause actual results to differ
materially from those contemplated in any forward-looking statements made by us herein are discussed in filings
we make with the United States Securities and Exchange Commission (SEC), including our Annual
Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K and available on our
website: http://www.pseg.com. These factors include, but are not limited to:
adverse changes in the demand for or the price of the capacity and energy that we sell into
wholesale electricity markets, adverse changes in energy industry law, policies and regulation, including market structures
and transmission planning, any inability of our transmission and distribution businesses to obtain adequate and timely
rate relief and regulatory approvals from federal and state regulators, changes in federal and state environmental regulations and enforcement that could increase our
costs or limit our operations, changes in nuclear regulation and/or general developments in the nuclear power industry,
including various impacts from any accidents or incidents experienced at our facilities or by
others in the industry, that could limit operations of our nuclear generating units,
actions or activities at one of our nuclear units located on a multi-unit site that might
adversely affect our ability to continue to operate that unit or other units located at the same site,
any inability to manage our energy obligations, available supply and risks,
adverse outcomes of any legal, regulatory or other proceeding, settlement, investigation or
claim applicable to us and/or the energy industry, any deterioration in our credit quality or the credit quality of our counterparties,
availability of capital and credit at commercially reasonable terms and conditions and our
ability to meet cash needs, changes in the cost of, or interruption in the supply of, fuel and other commodities necessary
to the operation of our generating units, delays in receipt of necessary permits and approvals for our construction and development
activities, delays or unforeseen cost escalations in our construction and development activities,
any inability to achieve, or continue to sustain, our expected levels of operating
performance, any equipment failures, accidents, severe weather events or other incidents that impact our
ability to provide safe and reliable service to our customers, and any inability to obtain
sufficient insurance coverage or recover proceeds of insurance with respect to such events,
acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our
businesses, increases in competition in energy supply markets as well as for transmission projects,
any inability to realize anticipated tax benefits or retain tax credits,
challenges associated with recruitment and/or retention of a qualified workforce,
adverse performance of our decommissioning and defined benefit plan trust fund investments and
changes in funding requirements, changes in technology, such as distributed generation and micro grids, and greater reliance on
these technologies, and changes in customer behaviors, including increases in energy efficiency, net-metering and
demand response. All of the forward-looking statements made in this report are qualified by these
cautionary statements and we cannot assure you that the results or developments anticipated by management will be
realized or even if realized, will have the expected consequences to, or effects on, us or our
business prospects, financial condition or results of operations. Readers are cautioned not to place undue
reliance on these forward-looking statements in making any investment decision.
Forward-looking statements made in this report apply only as of the date of this report. While we may elect to
update forward-looking statements from time to time, we specifically disclaim any
obligation to do so, even if internal estimates change, unless otherwise required by applicable securities laws.
The forward-looking statements contained in this report are intended to qualify for the
safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.
2 |
3
GAAP Disclaimer
These materials and other financial releases can be found on the
pseg.com
website under the investor tab, or at http://investor.pseg.com/
PSEG presents Operating Earnings and Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) in addition to its Income from
Continuing Operations/Net Income reported in accordance with accounting
principles generally accepted in the United States (GAAP). Operating Earnings
and Adjusted EBITDA are non-GAAP financial measures that differ from Income
from Continuing Operations/Net Income. Operating Earnings exclude gains
or losses associated with Nuclear Decommissioning Trust (NDT),
Mark-to-Market (MTM) accounting, and other material one-time items. PSEG
presents Operating Earnings because management believes that it is appropriate
for investors to consider results excluding these items in addition to
the results reported in accordance with GAAP. PSEG believes that the
non-GAAP financial measure of Operating Earnings provides a consistent and
comparable measure of performance of its businesses to help shareholders
understand performance trends. PSEG
is
presenting
Adjusted
EBITDA
because
it
provides
investors
with
additional
information
to
compare
our
business performance to other companies and understand performance trends.
Adjusted EBITDA excludes the same items as our Operating Earnings
measure as well as income tax expense, interest expense, depreciation
and amortization and major maintenance expense costs at Powers fossil generation facilities.
This
information
is
not
intended
to
be
viewed
as
an
alternative
to
GAAP
information.
The
last
three
slides
in
this presentation (Slides A, B and C) include a list of items excluded from
Income from Continuing Operations/Net Income to reconcile to Operating
Earnings and Adjusted EBITDA with a reference to that slide included on
each of the slides where the non-GAAP information appears. 3
|
**
**
Operating Earnings
Disciplined investment program and focus on operational
excellence have supported growth
Powers
diverse
fuel
mix and dispatch
flexibility continue to
generate strong
earnings and free cash
flow in low price
environment
PSE&Gs
investment
program has driven
double digit compound
annual earnings
growth since 2010
Operating Earnings* Contribution by Subsidiary
*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM
CONTINUING OPERATIONS/ NET INCOME TO RECONCILE TO OPERATING
EARNINGS. E=ESTIMATE ** 2015 PERCENTS USE MIDPOINT OF EARNINGS
GUIDANCE. 8 |
PSE&Gs existing major Transmission
projects are being completed on schedule and on budget
Major Transmission Investments
Project Roster
Approved
ROE
Inclusion
of CWIP in
Rate Base
100%
Recovery
of Costs
Due to
Abandonment
Estimate
Up To
($ Millions)
Expected
In-service
Date
Susquehanna-Roseland
12.93%
$790
Completed
Northeast Grid Reliability
11.93%
$907
June-Dec
2015
North Central Reliability
11.68%
$390
Completed
BurlingtonCamden 230kV
11.68%
$399
Completed
MickletonGloucesterCamden
230kV
11.68%
$435
June 2015
26 |
PSE&Gs 2015 operating earnings
expected to benefit from increased investment in Transmission
37
*SEE SLIDE A FOR ITEMS EXCLUDED FROM NET INCOME TO
RECONCILE TO OPERATING
EARNINGS. E =ESTIMATE. DATA AS OF MARCH 2, 2015. |
PSEG
Power
Nuclear
is
a
critical
element
of
our
success
Hope Creek
Operated by PSEG Nuclear
PSEG Ownership: 100%
Technology: Boiling Water
Reactor
Total Capacity: 1,178 MW
Owned Capacity: 1,178
MW
License Expiration: 2046
Next Refueling
Fall 2016
Salem
Units 1 and 2
Operated by PSEG Nuclear
PSEG Ownership: 57%
Technology: Pressurized Water
Reactor
Total Capacity: 2,307 MW
Owned Capacity: 1,324 MW
License Expiration: 2036
and 2040
Next Refueling
Unit 1
Spring 2016
Unit 2
Fall 2015
Peach Bottom
Units 2 and 3
Operated by Exelon
PSEG Ownership: 50%
Technology: Boiling Water
Reactor
Total Capacity: 2,242 MW
Owned Capacity:
1,121 MW
License Expiration: 2033
and 2034
Next Refueling
Unit 2 -
Spring 2016
Unit 3 -
Fall 2015
Uprate: 130 MW (PS Share)
Unit 2 -
March 2015
Unit 3 -
2016
51 |
Powers 2015 operating earnings
maintain solid performance
Power Operating Earnings*
($ Millions)
2015 Observations
75-80% hedged at
$52/MWh
Increase in average
hedge price for energy
helps mitigate reset in
capacity price and
volume
* SEE SLIDE A FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO
OPERATING EARNINGS. E = ESTIMATE.
66 |
PSEG
2015
Guidance
for
Operating
Income
by
Subsidiary
and
PSEG
Power
Adjusted
EBITDA
PSEG Power Adjusted EBITDA**
$ millions (except EPS)
2015E
2014
PSEG Power
$1,545 -
$1,645
$1,584
*
SEE
SLIDE
A
FOR
ITEMS
EXCLUDED
FROM
NET
INCOME
TO
RECONCILE
TO
OPERATING
EARNINGS;
INCLUDES
THE
FINANCIAL
IMPACT
FROM
MARK-TO-MARKET
POSITIONS
WITH
FORWARD
DELIVERY
MONTHS.
**
SEE
SLIDE
B
FOR
A
RECONCILIATION
OF
ADJUSTED
EBITDA
TO
OPERATING
EARNINGS
AND
NET
INCOME.
E
=
ESTIMATE.
96 |
PSEG Summary
Our 2014 earnings of $2.76 exceeded our revised operating earnings
guidance of $2.60 -
$2.75 per share
Continued third year of anticipated positive earnings trend in 2015 with
operating earnings guidance of $2.75 to $2.95 per share
Continued 5
th
straight year of expected double digit, 5 year growth in rate base
Anticipated high single digit earnings growth at PSE&G on three-year
basis from 2014 to 2017, driven by transmission investments and planned
programs
Powers
continued
focus
on
operational
excellence,
market
expertise
and
financial strength delivers value in current price environment
Strong Balance Sheet and Cash Flow support full capital program and new
potential opportunities without the need for equity
Our $0.08 per share dividend increase is consistent with our long
history of returning cash to the shareholder through the common
dividend, with potential for consistent and sustainable growth
99 |
Items Excluded from Income from Continuing
Operations/Net Income to Reconcile to Operating Earnings
PLEASE SEE PAGE 3 FOR AN EXPLANATION OF PSEGS USE OF OPERATING EARNINGS
AS A NON-GAAP FINANCIAL MEASURE AND HOW IT DIFFERS FROM NET
INCOME. 2014
2013
2012
2011
2010
2009
Earnings Impact ($ Millions)
Operating Earnings
1,400
$
1,309
$
1,236
$
1,389
$
1,584
$
1,567
$
Gain (Loss) on Nuclear Decommissioning Trust (NDT)
Fund Related Activity (PSEG Power)
68
40
52
50
46
9
Gain (Loss) on Mark-to-Market (MTM) (PSEG Power)
66
(74)
(10)
107
(1)
(11)
Lease Transaction Activity (PSEG Enterprise/Other)
-
-
36
(173)
-
29
Storm O&M (PSEG Power)
(16)
(32)
(39)
-
-
-
Market Transition Charge Refund (PSE&G)
-
-
-
-
(72)
-
Gain (Loss) on Asset Sales and Impairments (PSEG Enterprise/Other)
-
-
-
34
-
-
Income from Continuing Operations
1,518
$
1,243
$
1,275
$
1,407
$
1,557
$
1,594
$
Discontinued Operations
-
-
-
96
7
(2)
Net Income
1,518
$
1,243
$
1,275
$
1,503
$
1,564
$
1,592
$
Fully Diluted Average Shares Outstanding (in Millions)
508
508
507
507
507
507
Per Share Impact (Diluted)
Operating Earnings
2.76
$
2.58
$
2.44
$
2.74
$
3.12
$
3.09
$
Gain (Loss) on NDT Fund Related Activity (PSEG Power)
0.13
0.08
0.10
0.10
0.09
0.02
Gain (Loss) on MTM (PSEG Power)
0.13
(0.14)
(0.02)
0.21
-
(0.02)
Lease Transaction Activity (PSEG Enterprise/Other)
-
-
0.07
(0.34)
-
0.05
Storm O&M (PSEG Power)
(0.03)
(0.07)
(0.08)
-
-
-
Market Transition Charge Refund (PSE&G)
-
-
-
-
(0.14)
-
Gain (Loss) on Asset Sales and Impairments (PSEG Enterprise/Other)
-
-
-
0.06
-
-
Income from Continuing Operations
2.99
$
2.45
$
2.51
$
2.77
$
3.07
$
3.14
$
Discontinued Operations
-
-
-
0.19
0.01
-
Net Income
2.99
$
2.45
$
2.51
$
2.96
$
3.08
$
3.14
$
(Unaudited)
For the Year Ended
December 31,
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciling Items, net of tax
(a)
Includes the financial impact from positions with forward delivery
months. A
(a)
(a) |
B
Items Excluded from Net Income to Reconcile to Operating
Earnings and Adjusted EBITDA
PLEASE SEE PAGE 3 FOR AN EXPLANATION OF PSEGS USE OF OPERATING EARNINGS
AND ADJUSTED EBITDA AS NON-GAAP FINANCIAL MEASURES AND HOW THEY
DIFFER FROM NET INCOME. 2015
2014
Adjusted EBITDA
626
$
651
$
1,584
$
Fossil Major Maintenance, pre-tax
(49)
(58)
(144)
Depreciation and Amortization, pre-tax
(b)
(77)
(73)
(291)
Interest Expense, pre-tax
(b)
(31)
(31)
(120)
Income Taxes
(b)
(191)
(196)
(387)
Operating Earnings
278
$
293
$
642
$
Gain (Loss) on NDT Fund Related Activity, pre-tax
7
19
138
Gain (Loss) on MTM, pre-tax
(a)
(34)
(223)
111
Storm O&M, net of insurance recoveries, pre-tax
127
(10)
(27)
Income Taxes related to Operating Earnings reconciling items
(43)
85
(104)
Net Income
335
$
164
$
760
$
(a) Includes the financial impact from positions with forward delivery months.
(b) Excludes amounts related to Operating Earnings reconciling items
($ Millions, Unaudited)
PSEG Power Adjusted EBITDA Reconcilation
Year Ended
December 31,
2014
Reconciling Items
Three Months Ended
March 31,
B |