PEG 8-K
Public Service Enterprise Group Inc (PEG)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange On Which Registered | ||
| Public Service Enterprise Group Incorporated |
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| Public Service Electric and Gas Company |
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| PSEG Power LLC |
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Item 2.02 |
Results of Operations and Financial Condition |
Item 7.01 |
Regulation FD Disclosure |
Item 9.01 |
Financial Statements and Exhibits |
| Exhibit 99 | Press Release dated May 5, 2021 | |
| Exhibit 99.1 | Slideshow Presentation | |
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
| PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (Registrant) | ||
By: |
/s/ Rose M. Chernick | |
| ROSE M. CHERNICK Vice President and Controller (Principal Accounting Officer) | ||
| PUBLIC SERVICE ELECTRIC AND GAS COMPANY (Registrant) | ||
| By: | /s/ Rose M. Chernick | |
| ROSE M. CHERNICK Vice President and Controller (Principal Accounting Officer) | ||
| PSEG POWER LLC (Registrant) | ||
| By: | /s/ Rose M. Chernick | |
| ROSE M. CHERNICK Vice President and Controller (Principal Accounting Officer) | ||
EXHIBIT 99
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Public Service Enterprise Group 80 Park Plaza Newark, NJ 07102 | |
| CONTACTS | ||
| Investor Relations: | Media Relations: | |
| 973-430-6565 | 973-430-5924 | |
| [email protected] | [email protected] | |
PSEG ANNOUNCES 2021 FIRST QUARTER RESULTS
$1.28 PER SHARE OF NET INCOME
NON-GAAP OPERATING EARNINGS OF $1.28 PER SHARE
Re-Affirms Non-GAAP 2021 Operating Earnings Guidance of $3.35 - $3.55 per Share
BPU Extends $10/MWh Zero Emission Certificates for Three NJ Nuclear Units to May 2025
Progress on Strategic Alternatives Yields Sale of Solar Source Portfolio
(May 5, 2021 – Newark, NJ) Public Service Enterprise Group (NYSE: PEG) reported Net Income for the first quarter of 2021 of $648 million, or $1.28 per share as compared to Net Income of $448 million, or $0.88 per share, in the first quarter of 2020. Non-GAAP Operating Earnings for the first quarter of 2021 were $650 million, or $1.28 per share, compared to non-GAAP Operating Earnings for the first quarter of 2020 of $520 million, or $1.03 per share. Non-GAAP results for the first quarter exclude items shown in Attachments 7 and 8.
Ralph Izzo, chairman, president and chief executive officer said, “We are off to a solid start in 2021 and well positioned to execute on our financial and strategic goals during the balance of the year. With the majority of our nearly $2 billion of Clean Energy Future programs having moved from approval to execution, PSE&G is helping to advance the decarbonization of New Jersey in a sizable and equitable way. The recent Biden Infrastructure proposal focusing on climate action contains several encouraging signals supporting offshore wind, existing nuclear generation, and electrification of transportation, all aligned with PSEG’s business plan. PSEG strongly supports a national approach to accelerate economy-wide, net-zero emissions even sooner than 2050, in a constructive manner that expands green jobs by investing in clean energy infrastructure.
The New Jersey Board of Public Utilities’ (BPU) April 27 decision to award our three New Jersey nuclear units a continuation of the full $10 per MWh Zero Emission Certificate through May 2025 will similarly advance climate action in New Jersey by recognizing nuclear’s reliability, resiliency and environmental benefits and help to preserve the state’s largest carbon-free generating resource. We applaud the BPU for its decision – which we believe is in the best interests of the state of New Jersey and its ability to achieve its long-term clean energy goals. PSEG Power has also made progress on the exploration of strategic alternatives for its fossil and solar generating fleet. PSEG has entered into an agreement to sell its 467 MWDC Solar Source portfolio to an affiliate of LS Power. The solar sale is expected to close in the second or third quarter of 2021, subject to customary regulatory and other closing conditions. PSEG Power is continuing the exploration of strategic alternatives for its fossil generating fleet, and currently anticipates reaching the contract stage around mid-year. With over a decade of capital allocation directed
mainly toward PSE&G, PSEG today is primarily a regulated electric and gas utility, and these transactions will move us even further in that direction. PSEG’s remaining generating business will consist of a carbon-free nuclear fleet, and regional offshore wind investments that will be highly contracted.
The COVID-19 pandemic and its economic dislocations continue to impact the New Jersey economy. The large contribution of the Transmission and Residential electric and gas segments to our overall sales mix, as well as a supportive regulatory order that authorizes deferral of certain COVID-19 related costs for future recovery, have had a stabilizing effect on the margins of our utility business. New Jersey has been successful in vaccinating nearly half its population with at least one dose of the available vaccines, and we are hopeful that the remaining restrictions on economic activity will continue to ease in the near term.”
The following table provides a reconciliation of PSEG’s Net Income to non-GAAP Operating Earnings for the first quarter. See Attachments 7 and 8 for a complete list of items excluded from Net Income in the determination of non-GAAP Operating Earnings.
PSEG CONSOLIDATED RESULTS (unaudited)
First Quarter Comparative Results
2021 and 2020
| Income ($ millions) |
Diluted Earnings Per Share |
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| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net Income |
$ | 648 | $ | 448 | $ | 1.28 | $ | 0.88 | ||||||||
| Reconciling Items |
2 | 72 | — | 0.15 | ||||||||||||
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| Non-GAAP Operating Earnings |
$ | 650 | $ | 520 | $ | 1.28 | $ | 1.03 | ||||||||
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| Avg. Shares | 507M | 507M | ||||||||||||||
Ralph Izzo added, “We are re-affirming non-GAAP Operating Earnings guidance for full-year 2021 of $3.35 - $3.55 per share. This affirmation assumes normal weather and plant operations for the remainder of the year and incorporates the Conservation Incentive Programs that begin in June for electric and in October for gas to cover variations in revenue due to energy efficiency and other impacts. We are on track to execute PSEG’s five-year, $14 billion to $16 billion capital plan through 2025 and have the financial strength to fund it without the need to issue new equity. Over 90% of this capital program is directed to PSE&G, which is expected to produce 6.5% to 8% compound annual growth in rate base over the 2021 – 2025 period.”
The following table outlines PSEG’s expectations for non-GAAP Operating Earnings in 2021 by subsidiary:
2021 Non-GAAP Operating Earnings Guidance
($ millions, except EPS)
| 2021E | ||
| PSE&G |
$1,410 - $1,470 | |
| PSEG Power |
$280 - $370 | |
| PSEG Enterprise/Other |
($15) | |
| Non-GAAP Operating Earnings |
$1,700 - $1,800 | |
| Non-GAAP Operating EPS |
$3.35 - $3.55 |
E = Estimate
2
Results and Outlook by Operating Subsidiary
PSE&G
Public Service Electric & Gas
First Quarter 2021 and 2020 Comparative Results
($ millions, except EPS)
| PSE&G | 1Q 2021 | 1Q 2020 | Q/Q Change | |||||||||
| Net Income |
$ | 477 | $ | 440 | $ | 37 | ||||||
| Earnings Per Share |
$ | 0.94 | $ | 0.87 | $ | 0.07 | ||||||
PSE&G reported Net Income of $477 million ($0.94 per share) for the first quarter of 2021 compared with Net Income of $440 million ($0.87 per share) for the first quarter of 2020.
PSE&G’s first quarter 2021 results improved by $0.07 per share driven by revenue growth from ongoing capital investment programs, favorable pension/OPEB results and higher electric weather normalized Residential volume. Transmission rate base added $0.02 per share to first quarter Net Income compared to the first quarter of 2020. Gas margin improved by $0.03 per share over last year’s first quarter, driven by the scheduled recovery of investments made under the second phase of the Gas System Modernization Program. Electric margin was $0.01 per share favorable compared to the first quarter of 2020 on higher weather normalized Residential volume. O&M expense was $0.02 per share unfavorable compared with first quarter 2020, reflecting higher costs from several February snowstorms. Depreciation increased by $0.01 per share reflecting higher plant in service. Distribution-related pension expense was $0.02 per share favorable compared to first quarter 2020. Flow through taxes and other were $0.02 per share favorable compared to first quarter 2020. This benefit is due to the use of an annual effective tax rate that will reverse over the remainder of the year, and was partly offset by the timing of taxes related to bad debt expense.
Winter weather, as measured by heating degree-days, was 4% milder than normal but was 18% colder than the mild winter experienced in first quarter 2020. For the trailing 12-months ended March 31, total weather-normalized sales reflect the expected higher Residential and lower Commercial and Industrial sales observed in 2020 due to the economic impacts of COVID-19. Total Electric sales declined by 2% while Gas sales increased by approximately 1%. Residential customer growth for Electric and Gas remained positive during the period.
PSE&G invested approximately $0.6 billion in the first quarter and is on track to fully execute on its planned 2021 capital investment program of $2.7 billion. The 2021 capital spending program will include infrastructure upgrades to its transmission and distribution facilities, as well as the rollout of the Clean Energy Future investments in energy efficiency, energy cloud (smart meters) and electric vehicle charging infrastructure.
PSE&G’s forecast of Net Income for 2021 is unchanged at $1,410 million - $1,470 million.
3
PSEG Power
First Quarter 2021 and 2020 Comparative Results
($ millions, except EPS)
| PSEG Power | 1Q 2021 | 1Q 2020 | Q/Q Change | |||||||||
| Net Income |
$ | 161 | $ | 13 | $ | 148 | ||||||
| Earnings Per Share (EPS) |
$ | 0.32 | $ | 0.02 | $ | 0.30 | ||||||
| Non-GAAP Operating Earnings |
$ | 163 | $ | 85 | $ | 78 | ||||||
| Non-GAAP EPS |
$ | 0.32 | $ | 0.17 | $ | 0.15 | ||||||
| Non-GAAP Adjusted EBITDA |
$ | 321 | $ | 201 | $ | 120 | ||||||
PSEG Power reported Net Income of $161 million ($0.32 per share) for the first quarter of 2021, non-GAAP Operating Earnings of $163 million ($0.32 per share), and non-GAAP Adjusted EBITDA of $321 million. This compares to first quarter 2020 Net Income of $13 million, non-GAAP Operating Earnings of $85 million and non-GAAP Adjusted EBITDA of $201 million.
PSEG Power’s first quarter results benefited from expected margin improvement in capacity and other items associated with a favorable weather comparison to the first quarter of 2020, as well as certain other items expected to reverse in subsequent quarters. A scheduled improvement in PJM capacity revenue improved non-GAAP Operating Earnings comparisons by $0.03 per share compared with Q1 2020. Higher generation output for the quarter added $0.01 per share from the absence of the unplanned Salem 1 outage in first quarter of 2020. Favorable market conditions, influenced by February’s cold weather, increased results by $0.03 per share, as the expected $2/MWh average decline in recontracting will become more pronounced in future quarters. The weather-related improvement in total gas send-out to Commercial and Industrial customers increased results by $0.04 per share. This increase in gas operations is expected to reverse later in the year due to the absence in 2021 of a one-time benefit recognized in the third quarter of 2020. Lower O&M expense was $0.03 per share favorable in the quarter, reflecting the absence of first quarter outages at Bergen 2 and Salem Unit 1 in 2020. Lower depreciation and lower interest expense combined to improve comparisons by $0.01 per share versus the year-ago quarter.
Generation output increased by just under 1% to total 13.3 TWh, reflecting the absence of a month-long unplanned outage experienced at Salem Unit 1 during the first quarter 2020. PSEG Power’s CCGT fleet produced 4.7 TWh, down 8%, reflecting lower market demand. The nuclear fleet produced 8.2 TWh, up 3%, and operated at a capacity factor of 98.8% for the first quarter, representing 62% of total generation. PSEG Power is forecasting generation output of 36 to 38 TWh for the three remaining quarters of 2021, and has hedged approximately 95% - 100% of production at an average price of $30 per MWh.
The forecast of PSEG Power’s non-GAAP Operating Earnings and non-GAAP Adjusted EBITDA for 2021 remain unchanged at $280 million - $370 million, and $850 million - $950 million, respectively.
4
PSEG Enterprise/Other
PSEG Enterprise/Other reported Net Income of $10 million, $0.02 per share, for the first quarter of 2021 compared to a Net Loss of $5 million, $(0.01) per share, for the first quarter of 2020. The increase was driven by higher tax benefits recorded in the first quarter of 2021 due to the use of an annual effective tax rate that will reverse over the remainder of the year, as well as interest income associated with a prior IRS audit settlement.
For 2021, the forecast for PSEG Enterprise/Other remains unchanged at a Net Loss of $15 million.
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Public Service Enterprise Group Inc. (PSEG) (NYSE: PEG) is a publicly traded diversified energy company with approximately 13,000 employees. Headquartered in Newark, N.J., PSEG’s principal operating subsidiaries are: Public Service Electric and Gas Co. (PSE&G), PSEG Power and PSEG Long Island. PSEG is a Fortune 500 company included in the S&P 500 Index and has been named to the Dow Jones Sustainability Index for North America for 13 consecutive years (https://corporate.pseg.com).
Non-GAAP Financial Measures
Management uses non-GAAP Operating Earnings in its internal analysis, and in communications with investors and analysts, as a consistent measure for comparing PSEG’s financial performance to previous financial results. Non-GAAP Operating Earnings exclude the impact of returns (losses) associated with the Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting and material one-time items.
Management believes the presentation of non-GAAP Adjusted EBITDA for PSEG Power is useful to investors and other users of our financial statements in evaluating operating performance because it provides them with an additional tool to compare business performance across companies and across periods. Management also believes that non-GAAP Adjusted EBITDA is widely used by investors to measure operating performance without regard to items such as income tax expense, interest expense and depreciation and amortization, which can vary substantially from company to company depending upon, among other things, the book value of assets, capital structure and whether assets were constructed or acquired. Non-GAAP Adjusted EBITDA also allows investors and other users to assess the underlying financial performance of our fleet before management’s decision to deploy capital. Non-GAAP Adjusted EBITDA excludes the same items as our non-GAAP Operating Earnings measure as well as income tax expense, interest expense and depreciation and amortization.
See Attachments 7 and 8 for a complete list of items excluded from Net Income in the determination of non-GAAP Operating Earnings and non-GAAP Adjusted EBITDA. The presentation of non-GAAP Operating Earnings and non-GAAP Adjusted EBITDA is intended to complement, and should not be considered an alternative to the presentation of Net Income, which is an indicator of financial performance determined in accordance with GAAP. In addition, non-GAAP Operating Earnings and non-GAAP Adjusted EBITDA as presented in this release may not be comparable to similarly titled measures used by other companies.
Due to the forward looking nature of non-GAAP Operating Earnings and non-GAAP Adjusted EBITDA guidance, PSEG is unable to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measure. Management is unable to project certain reconciling items, in particular MTM and NDT gains (losses), for future periods due to market volatility.
Forward-Looking Statements
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. These factors include, but are not limited to:
| • | any inability to successfully develop, obtain regulatory approval for, or construct generation, transmission and distribution projects; |
| • | lack of growth or slower growth in the number of customers or the failure of our Conservation Incentive Program to fully address a decline in customer demand; |
5
| • | any equipment failures, accidents, severe weather events, acts of war or terrorism or other incidents, including pandemics such as the ongoing coronavirus pandemic, that may impact our ability to provide safe and reliable service to our customers; |
| • | any inability to recover the carrying amount of our long-lived assets; |
| • | any inability to maintain sufficient liquidity; |
| • | the impact of cybersecurity attacks or intrusions; |
| • | the impact of the ongoing coronavirus pandemic; |
| • | the impact of our covenants in our debt instruments on our operations; |
| • | adverse performance of our nuclear decommissioning and defined benefit plan trust fund investments and changes in funding requirements; |
| • | risks associated with the timeline and ultimate outcome of our exploration of strategic alternatives relating to PSEG Power’s non-nuclear generating fleet; |
| • | the failure to complete, or delays in completing, our proposed investment in the Ocean Wind offshore wind project, or following the completion of our initial investment in the project, the failure to realize the anticipated strategic and financial benefits of the project; |
| • | fluctuations in wholesale power and natural gas markets, including the potential impacts on the economic viability of our generation units; |
| • | our ability to obtain adequate fuel supply; |
| • | market risks impacting the operation of our generating stations; |
| • | changes in technology related to energy generation, distribution and consumption and changes in customer usage patterns; |
| • | third-party credit risk relating to our sale of generation output and purchase of fuel; |
| • | any inability of PSEG Power to meet its commitments under forward sale obligations; |
| • | reliance on transmission facilities to maintain adequate transmission capacity for our power generation fleet; |
| • | the impact of changes in state and federal legislation and regulations on our business, including PSE&G’s ability to recover costs and earn returns on authorized investments; |
| • | PSE&G’s proposed investment programs may not be fully approved by regulators and its capital investment may be lower than planned; |
| • | the absence of a long-term legislative or other solution for our New Jersey nuclear plants that sufficiently values them for their carbon-free, fuel diversity and resilience attributes, or the impact of the current or subsequent payments for such attributes being materially adversely modified through legal proceedings; |
| • | adverse changes in energy industry laws, policies and regulations, including market structures and transmission planning and transmission returns; |
| • | risks associated with our ownership and operation of nuclear facilities, including regulatory risks, such as compliance with the Atomic Energy Act and trade control, environmental and other regulations, as well as financial, environmental and health and safety risks; |
| • | changes in federal and state environmental regulations and enforcement; and |
| • | delays in receipt of, or an inability to receive, necessary licenses and permits. |
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, results of operations or cash flows. 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 in light of new information or future events, 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.
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From time to time, PSEG, PSE&G and PSEG Power release important information via postings on their corporate Investor Relations website at https://investor.pseg.com. Investors and other interested parties are encouraged to visit the Investor Relations website to review new postings. You can sign up for automatic email alerts regarding new postings at the bottom of the webpage at https://investor.pseg.com.
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6
Attachment 1
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Consolidating Statements of Operations
(Unaudited, $ millions, except per share data)
| Three Months Ended March 31, 2021 | ||||||||||||||||||||
| PSEG | PSEG Enterprise/ Other (a) |
PSE&G | PSEG Power | |||||||||||||||||
| OPERATING REVENUES |
$ | 2,889 | $ | (351 | ) | $ | 2,073 | $ | 1,167 | |||||||||||
| OPERATING EXPENSES |
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| Energy Costs |
1,029 | (502 | ) | 849 | 682 | |||||||||||||||
| Operation and Maintenance |
778 | 132 | 424 | 222 | ||||||||||||||||
| Depreciation and Amortization |
341 | 8 | 241 | 92 | ||||||||||||||||
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| Total Operating Expenses |
2,148 | (362 | ) | 1,514 | 996 | |||||||||||||||
| OPERATING INCOME |
741 | 11 | 559 | 171 | ||||||||||||||||
| Income from Equity Method Investments |
3 | — | — | 3 | ||||||||||||||||
| Net Gains (Losses) on Trust Investments |
60 | 1 | 1 | 58 | ||||||||||||||||
| Other Income (Deductions) |
25 | 1 | 28 | (4 | ) | |||||||||||||||
| Non-Operating Pension and OPEB Credits (Costs) |
82 | 4 | 66 | 12 | ||||||||||||||||
| Interest Expense |
(146 | ) | (21 | ) | (98 | ) | (27 | ) | ||||||||||||
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| INCOME (LOSS) BEFORE INCOME TAXES |
765 | (4 | ) | 556 | 213 | |||||||||||||||
| Income Tax Benefit (Expense) |
(117 | ) | 14 | (79 | ) | (52 | ) | |||||||||||||
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| NET INCOME |
$ | 648 | $ | 10 | $ | 477 | $ | 161 | ||||||||||||
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| Reconciling Items Excluded from Net Income (b) |
2 | — | — | 2 | ||||||||||||||||
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| OPERATING EARNINGS (non-GAAP) |
$ | 650 | $ | 10 | $ | 477 | $ | 163 | ||||||||||||
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| Earnings Per Share |
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| NET INCOME |
$ | 1.28 | $ | 0.02 | $ | 0.94 | $ | 0.32 | ||||||||||||
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| Reconciling Items Excluded from Net Income (b) |
— | — | — | — | ||||||||||||||||
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| OPERATING EARNINGS (non-GAAP) |
$ | 1.28 | $ | 0.02 | $ | 0.94 | $ | 0.32 | ||||||||||||
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| Three Months Ended March 31, 2020 | ||||||||||||||||||||
| PSEG | PSEG Enterprise/ Other (a) |
PSE&G | PSEG Power | |||||||||||||||||
| OPERATING REVENUES |
$ | 2,781 | $ | (322 | ) | $ | 1,883 | $ | 1,220 | |||||||||||
| OPERATING EXPENSES |
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| Energy Costs |
906 | (478 | ) | 708 | 676 | |||||||||||||||
| Operation and Maintenance |
754 | 127 | 386 | 241 | ||||||||||||||||
| Depreciation and Amortization |
324 | 8 | 222 | 94 | ||||||||||||||||
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| Total Operating Expenses |
1,984 | (343 | ) | 1,316 | 1,011 | |||||||||||||||
| OPERATING INCOME |
797 | 21 | 567 | 209 | ||||||||||||||||
| Income from Equity Method Investments |
3 | — | — | 3 | ||||||||||||||||
| Net Gains (Losses) on Trust Investments |
(221 | ) | (1 | ) | — | (220 | ) | |||||||||||||
| Other Income (Deductions) |
4 | — | 27 | (23 | ) | |||||||||||||||
| Non-Operating Pension and OPEB Credits (Costs) |
62 | 3 | 51 | 8 | ||||||||||||||||
| Interest Expense |
(153 | ) | (23 | ) | (96 | ) | (34 | ) | ||||||||||||
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| INCOME (LOSS) BEFORE INCOME TAXES |
492 | — | 549 | (57 | ) | |||||||||||||||
| Income Tax Benefit (Expense) |
(44 | ) | (5 | ) | (109 | ) | 70 | |||||||||||||
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| NET INCOME (LOSS) |
$ | 448 | $ | (5 | ) | $ | 440 | $ | 13 | |||||||||||
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| Reconciling Items Excluded from Net Income (Loss) (b) |
72 | — | — | 72 | ||||||||||||||||
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| OPERATING EARNINGS (non-GAAP) |
$ | 520 | $ | (5 | ) | $ | 440 | $ | 85 | |||||||||||
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| Earnings Per Share |
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| NET INCOME (LOSS) |
$ | 0.88 | $ | (0.01 | ) | $ | 0.87 | $ | 0.02 | |||||||||||
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| Reconciling Items Excluded from Net Income (Loss) (b) |
0.15 | — | — | 0.15 | ||||||||||||||||
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| OPERATING EARNINGS (non-GAAP) |
$ | 1.03 | $ | (0.01 | ) | $ | 0.87 | $ | 0.17 | |||||||||||
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| (a) | Includes activities at Energy Holdings, PSEG Long Island and the Parent as well as intercompany eliminations. |
| (b) | See Attachments 7 and 8 for details of items excluded from Net Income to compute Operating Earnings (non-GAAP). |
Attachment 2
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Capitalization Schedule
(Unaudited, $ millions)
| March 31, 2021 |
December 31, 2020 |
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| DEBT |
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| Commercial Paper and Loans |
$ | 665 | $ | 1,063 | ||||
| Long-Term Debt* |
16,775 | 16,180 | ||||||
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| Total Debt |
17,440 | 17,243 | ||||||
| STOCKHOLDERS’ EQUITY |
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| Common Stock |
5,013 | 5,031 | ||||||
| Treasury Stock |
(902 | ) | (861 | ) | ||||
| Retained Earnings |
12,708 | 12,318 | ||||||
| Accumulated Other Comprehensive Loss |
(542 | ) | (504 | ) | ||||
|
|
|
|
|
|||||
| Total Stockholders’ Equity |
16,277 | 15,984 | ||||||
|
|
|
|
|
|||||
| Total Capitalization |
$ | 33,717 | $ | 33,227 | ||||
|
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|
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|
|||||
| * | Includes current portion of Long-Term Debt. |
Attachment 3
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, $ millions)
| Three Months Ended March 31, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
| Net Income |
$ | 648 | $ | 448 | ||||
| Adjustments to Reconcile Net Income to Net Cash Flows From Operating Activities |
379 | 705 | ||||||
|
|
|
|
|
|||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
1,027 | 1,153 | ||||||
|
|
|
|
|
|||||
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES |
(624 | ) | (724 | ) | ||||
|
|
|
|
|
|||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
(134 | ) | 237 | |||||
|
|
|
|
|
|||||
| Net Change in Cash, Cash Equivalents and Restricted Cash |
269 | 666 | ||||||
| Cash, Cash Equivalents and Restricted Cash at Beginning of Period |
572 | 176 | ||||||
|
|
|
|
|
|||||
| Cash, Cash Equivalents and Restricted Cash at End of Period |
$ | 841 | $ | 842 | ||||
|
|
|
|
|
|||||
Attachment 4
PUBLIC SERVICE ELECTRIC & GAS COMPANY
Retail Sales
(Unaudited)
March 31, 2021
Electric Sales
| Sales (millions kWh) | Three Months Ended |
Change vs. 2020 |
||||||
| Residential |
3,266 | 14% | ||||||
| Commercial & Industrial |
6,268 | (3%) | ||||||
| Other |
99 | 0% | ||||||
|
|
|
|||||||
| Total |
9,633 | 2% | ||||||
|
|
|
|||||||
Gas Sold and Transported
| Sales (millions therms) | Three Months Ended |
Change vs. 2020 |
||||||
| Firm Sales |
||||||||
| Residential Sales |
741 | 18% | ||||||
| Commercial & Industrial |
470 | 14% | ||||||
|
|
|
|||||||
| Total Firm Sales |
1,211 | 17% | ||||||
|
|
|
|||||||
| Non-Firm Sales* |
||||||||
| Commercial & Industrial |
280 | 45% | ||||||
|
|
|
|||||||
| Total Non-Firm Sales |
280 | |||||||
|
|
|
|||||||
|
|
|
|||||||
| Total Sales |
1,491 | 21% | ||||||
|
|
|
|||||||
| * | Contract Service Gas rate included in non-firm sales |
Weather Data*
| Three Months Ended |
Change vs. 2020 |
|||||||
| Degree Days - Actual |
2,445 | 18% | ||||||
| Degree Days - Normal |
2,536 | |||||||
| * | Winter weather as defined by heating degree days (HDD) to serve as a measure for the need for heating. For each day, HDD is calculated as HDD = 65°F – the average hourly daily temperature. The measures use data provided by the National Oceanic and Atmospheric Administration based on readings from Newark Airport. Comparisons to normal are based on twenty-years of historic data. |
Attachment 5
PSEG POWER LLC
Generation Measures(1)
(Unaudited)
| GWhr Breakdown | ||||||||
| Three Months Ended March 31, |
||||||||
| 2021 | 2020 | |||||||
| Nuclear - NJ |
5,351 | 5,102 | ||||||
| Nuclear - PA |
2,894 | 2,933 | ||||||
|
|
|
|
|
|||||
| Total Nuclear |
8,245 | 8,035 | ||||||
| Fossil - Natural Gas - NJ |
1,783 | 1,981 | ||||||
| Fossil - Natural Gas - NY |
981 | 1,023 | ||||||
| Fossil - Natural Gas - MD |
1,009 | 1,194 | ||||||
| Fossil - Natural Gas - CT |
991 | 952 | ||||||
|
|
|
|
|
|||||
| Total Natural Gas(2) |
4,764 | 5,150 | ||||||
| Fossil - Coal |
248 | (7) | ||||||
|
|
|
|
|
|||||
| 13,257 | 13,178 | |||||||
| % Generation by Fuel Type | ||||||||
| Three Months Ended March 31, |
||||||||
| 2021 | 2020 | |||||||
| Nuclear - NJ |
40% | 39% | ||||||
| Nuclear - PA |
22% | 22% | ||||||
|
|
|
|
|
|||||
| Total Nuclear |
62% | 61% | ||||||
| Fossil - Natural Gas - NJ |
13% | 15% | ||||||
| Fossil - Natural Gas - NY |
7% | 8% | ||||||
| Fossil - Natural Gas - MD |
8% | 9% | ||||||
| Fossil - Natural Gas - CT |
8% | 7% | ||||||
|
|
|
|
|
|||||
| Total Natural Gas(2) |
36% | 39% | ||||||
| Fossil - Coal |
2% | 0% | ||||||
|
|
|
|
|
|||||
| 100% | 100% | |||||||
| (1) | Indicates Period Net Generation; negative value reflects more GWh required to operate plants than were generated. Excludes Solar and Kalaeloa. |
| (2) | Includes several units that are dual fuel for oil. |
Attachment 6
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Statistical Measures
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2021 | 2020 | |||||||
| Weighted Average Common Shares Outstanding (millions) |
||||||||
| Basic |
504 | 504 | ||||||
| Diluted |
507 | 507 | ||||||
| Stock Price at End of Period |
$ | 60.21 | $ | 44.91 | ||||
| Dividends Paid per Share of Common Stock |
$ | 0.51 | $ | 0.49 | ||||
| Dividend Yield |
3.4 | % | 4.4 | % | ||||
| Book Value per Common Share |
$ | 32.33 | $ | 30.28 | ||||
| Market Price as a Percent of Book Value |
186 | % | 148 | % | ||||
Attachment 7
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Consolidated Operating Earnings (non-GAAP) Reconciliation
| Reconciling Items |
Three Months Ended March 31, |
|||||||
| 2021 | 2020 | |||||||
| ($ millions, Unaudited) | ||||||||
| Net Income |
$ | 648 | $ | 448 | ||||
| (Gain) Loss on Nuclear Decommissioning Trust (NDT) Fund Related Activity, pre-tax (PSEG Power) |
(55 | ) | 219 | |||||
| (Gain) Loss on Mark-to-Market (MTM), pre-tax (a) (PSEG Power) |
47 | (107 | ) | |||||
| Oil Lower of Cost or Market (LOCOM) adjustment, pre-tax (PSEG Power) |
— | 20 | ||||||
| Income Taxes related to Operating Earnings (non-GAAP) reconciling items(b) |
10 | (60 | ) | |||||
|
|
|
|
|
|||||
| Operating Earnings (non-GAAP) |
$ | 650 | $ | 520 | ||||
|
|
|
|
|
|||||
| PSEG Fully Diluted Average Shares Outstanding (in millions) |
507 | 507 | ||||||
| ($ Per Share Impact - Diluted, Unaudited) |
||||||||
| Net Income |
$ | 1.28 | $ | 0.88 | ||||
| (Gain) Loss on NDT Fund Related Activity, pre-tax (PSEG Power) |
(0.11 | ) | 0.44 | |||||
| (Gain) Loss on MTM, pre-tax (a) (PSEG Power) |
0.09 | (0.21 | ) | |||||
| Oil LOCOM adjustment, pre-tax (PSEG Power) |
— | 0.04 | ||||||
| Income Taxes related to Operating Earnings (non-GAAP) reconciling items(b) |
0.02 | (0.12 | ) | |||||
|
|
|
|
|
|||||
| Operating Earnings (non-GAAP) |
$ | 1.28 | $ | 1.03 | ||||
|
|
|
|
|
|||||
| (a) | Includes the financial impact from positions with forward delivery months. |
| (b) | Income tax effect calculated at the statutory rate except for NDT related activity which is calculated at the statutory rate plus a 20% tax on income (loss) from qualified NDT funds. |
Attachment 8
PSEG Power Operating Earnings (non-GAAP) and Adjusted EBITDA (non-GAAP) Reconciliation
| Reconciling Items |
Three Months Ended March 31, |
|||||||
| 2021 | 2020 | |||||||
| ($ millions, Unaudited) | ||||||||
| Net Income |
$ | 161 | $ | 13 | ||||
| (Gain) Loss on NDT Fund Related Activity, pre-tax |
(55 | ) | 219 | |||||
| (Gain) Loss on MTM, pre-tax (a) |
47 | (107 | ) | |||||
| Oil LOCOM adjustment, pre-tax |
— | 20 | ||||||
| Income Taxes related to Operating Earnings (non-GAAP) reconciling items(b) |
10 | (60 | ) | |||||
|
|
|
|
|
|||||
| Operating Earnings (non-GAAP) |
$ | 163 | $ | 85 | ||||
| Depreciation and Amortization, pre-tax (c) |
90 | 93 | ||||||
| Interest Expense, pre-tax (c) (d) |
26 | 33 | ||||||
| Income Taxes (c) |
42 | (10 | ) | |||||
|
|
|
|
|
|||||
| Adjusted EBITDA (non-GAAP) |
$ | 321 | $ | 201 | ||||
|
|
|
|
|
|||||
| PSEG Fully Diluted Average Shares Outstanding (in millions) |
507 | 507 | ||||||
| (a) | Includes the financial impact from positions with forward delivery months. |
| (b) | Income tax effect calculated at the statutory rate except for NDT related activity which is calculated at the statutory rate plus a 20% tax on income (loss) from qualified NDT funds. |
| (c) | Excludes amounts related to Operating Earnings (non-GAAP) reconciling items. |
| (d) | Net of capitalized interest. |
Public Service Enterprise Group PSEG Earnings Conference Call 1st Quarter 2021 May 5, 2021 EXHIBIT 99.1
Certain of the matters discussed in this presentation 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. These factors include, but are not limited to: any inability to successfully develop, obtain regulatory approval for, or construct generation, transmission and distribution projects; lack of growth or slower growth in the number of customers or the failure of our Conservation Incentive Program to fully address a decline in customer demand; any equipment failures, accidents, severe weather events, acts of war or terrorism or other incidents, including pandemics such as the ongoing coronavirus pandemic, that may impact our ability to provide safe and reliable service to our customers; any inability to recover the carrying amount of our long-lived assets; any inability to maintain sufficient liquidity; the impact of cybersecurity attacks or intrusions; the impact of the ongoing coronavirus pandemic; the impact of our covenants in our debt instruments on our operations; adverse performance of our nuclear decommissioning and defined benefit plan trust fund investments and changes in funding requirements; risks associated with the timeline and ultimate outcome of our exploration of strategic alternatives relating to PSEG Power’s non-nuclear generating fleet; the failure to complete, or delays in completing, our proposed investment in the Ocean Wind offshore wind project, or following the completion of our initial investment in the project, the failure to realize the anticipated strategic and financial benefits of the project; fluctuations in wholesale power and natural gas markets, including the potential impacts on the economic viability of our generation units; our ability to obtain adequate fuel supply; market risks impacting the operation of our generating stations; changes in technology related to energy generation, distribution and consumption and changes in customer usage patterns; third-party credit risk relating to our sale of generation output and purchase of fuel; any inability of PSEG Power to meet its commitments under forward sale obligations; reliance on transmission facilities to maintain adequate transmission capacity for our power generation fleet; the impact of changes in state and federal legislation and regulations on our business, including PSE&G’s ability to recover costs and earn returns on authorized investments; PSE&G’s proposed investment programs may not be fully approved by regulators and its capital investment may be lower than planned; the absence of a long-term legislative or other solution for our New Jersey nuclear plants that sufficiently values them for their carbon-free, fuel diversity and resilience attributes, or the impact of the current or subsequent payments for such attributes being materially adversely modified through legal proceedings; adverse changes in energy industry laws, policies and regulations, including market structures and transmission planning and transmission returns; risks associated with our ownership and operation of nuclear facilities, including regulatory risks, such as compliance with the Atomic Energy Act and trade control, environmental and other regulations, as well as financial, environmental and health and safety risks; changes in federal and state environmental regulations and enforcement; and delays in receipt of, or an inability to receive, necessary licenses and permits. All of the forward-looking statements made in this presentation 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, results of operations or cash flows. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this presentation apply only as of the date of this presentation. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even in light of new information or future events, unless otherwise required by applicable securities laws. The forward-looking statements contained in this presentation 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. Forward-Looking Statements
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 are non-GAAP financial measures that differ from Net Income. Non-GAAP Operating Earnings exclude the impact of returns (losses) associated with the Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting and material one-time items. Non-GAAP Adjusted EBITDA excludes the same items as our non-GAAP Operating Earnings measure as well as income tax expense, interest expense and depreciation and amortization. The last two slides in this presentation (Slides A and B) include a list of items excluded from Net Income to reconcile to non-GAAP Operating Earnings and non-GAAP Adjusted EBITDA with a reference to those slides included on each of the slides where the non-GAAP information appears. Management uses non-GAAP Operating Earnings in its internal analysis, and in communications with investors and analysts, as a consistent measure for comparing PSEG’s financial performance to previous financial results. Management believes non-GAAP Adjusted EBITDA is useful to investors and other users of our financial statements in evaluating operating performance because it provides them with an additional tool to compare business performance across companies and across periods. Management also believes that non-GAAP Adjusted EBITDA is widely used by investors to measure operating performance without regard to items such as income tax expense, interest expense and depreciation and amortization, which can vary substantially from company to company depending upon, among other things, the book value of assets, capital structure and whether assets were constructed or acquired. Non-GAAP Adjusted EBITDA also allows investors and other users to assess the underlying financial performance of our fleet before management’s decision to deploy capital. The presentation of non-GAAP Operating Earnings and non-GAAP Adjusted EBITDA is intended to complement, and should not be considered an alternative to, the presentation of Net Income, which is an indicator of financial performance determined in accordance with GAAP. In addition, non-GAAP Operating Earnings and non-GAAP Adjusted EBITDA as presented in this release may not be comparable to similarly titled measures used by other companies. Due to the forward looking nature of non-GAAP Operating Earnings and non-GAAP Adjusted EBITDA guidance, PSEG is unable to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measure. Management is unable to project certain reconciling items, in particular MTM and NDT gains (losses), for future periods due to market volatility. GAAP Disclaimer From time to time, PSEG, PSE&G and PSEG Power release important information via postings on their corporate Investor Relations website at https://investor.pseg.com. Investors and other interested parties are encouraged to visit the Investor Relations website to review new postings. You can sign up for automatic email alerts regarding new postings at the bottom of the webpage at https://investor.pseg.com.
PSEG Q1 2021 Ralph Izzo Chairman, President and Chief Executive Officer
PSEG Q1 2021 First Quarter Highlights Net Income of $1.28 per share in Q1 2021 vs. $0.88 in Q1 2020 Non-GAAP Operating Earnings* of $1.28 per share in Q1 2021 vs. $1.03 in Q1 2020 PSE&G results reflect ongoing investment in electric and gas infrastructure PSEG Power non-GAAP Operating Earnings* benefited from higher capacity revenues and colder weather Operational Excellence Nuclear operations achieve a capacity factor of 98.8% in Q1; Hope Creek completes 517-day uninterrupted, “breaker to breaker” run PSEG Nuclear recognized as an industry leader in operational reliability by INPO, one of only two nuclear fleets across the industry with no scrams over the past year Disciplined Investment Beginning rollout of nearly $2 billion of Clean Energy Future (CEF) approved programs in Energy Efficiency, Energy Cloud (AMI) and Electric Vehicle charging infrastructure PSE&G on track to invest $2.7 billion in 2021 in T&D infrastructure upgrades and CEF AMI=Automated Metering Infrastructure; T&D=Transmission & Distribution *See Slides A and B for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP).
Progress on strategic alternatives for non-nuclear fleet PSEG has entered into an agreement to sell Solar Source's 467 MWDC portfolio of 25 projects to an affiliate of LS Power Furthers PSEG transformation into a primarily regulated electric and gas utility, intended to: Reduce overall business risk and earnings volatility Improve business mix and credit profile Enhance PSEG's ESG position Focus on New Jersey’s Clean Energy Agenda Remaining generation will consist of PSEG Power's carbon-free nuclear fleet, and regional offshore wind investments that will be significantly contracted No adverse impact on current shareholder dividend (subject to board approval) Takes into account interests of diverse stakeholders, including our employees No impact on PSE&G or PSEG LI customers, operations or tariffs Marketing of fossil assets continues; completion of both sale processes expected to occur within 2021 ESG=Environmental, Social, Governance
PSEG - Regulatory and Policy Objectives State Regulatory Proceedings NJBPU awarded continuation of $10/MWh Zero Emission Certificates for all three NJ nuclear plants through May 31, 2025 Resource Adequacy (FRR) recommendation and report by NJBPU Staff expected May 2021 NJBPU working together with PJM in conducting first-ever “State Agreement Approach” open window to procure transmission solutions to support State’s 7,500 MW offshore wind target; window opened on April 15th and will run until August 13th Investment Priorities Aligned with NJ’s Clean Energy Agenda PSEG completed acquisition of 25% interest in Ørsted's Ocean Wind project to expand its carbon-free fleet with contracted, renewable generation supporting New Jersey’s goal of 100% clean energy by 2050 Remaining ~$0.2 billion of CEF filings (Vehicle Innovation and Energy Storage) expected to be addressed following future stakeholder proceedings Federal Energy Regulatory Commission (FERC) / PJM FERC’s decarbonization agenda has an emphasis on promoting transmission and market policies that will facilitate renewables development while seeking to keep costs low for customers PSEG will file comments supporting the merits of continuing the RTO return on equity adder in response to FERC’s recently issued supplemental NOPR proposing to eliminate the adder for transmission owners in an RTO for 3 years or longer 2022/2023 PJM Capacity Auction is scheduled to occur in late May 2021, with results June 2; NJ nuclear units expected to clear based on the current MOPR floor prices FERC and PJM are seeking MOPR reforms NJBPU=New Jersey Board of Public Utilities; FRR=Fixed Resource Requirement; NOPR=Notice of Proposed Rulemaking; RTO=Regional Transmission Organization; MOPR=Minimum Offer Pricing Rule
Non-GAAP Operating Earnings* Contribution by Subsidiary 2020 Actual and 2021E Guidance E = Estimate. *See Slides A and B for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP). **Based on the mid-point of 2021 non-GAAP Operating Earnings guidance of $3.35 - $3.55 per share. The total of the subsidiary guidance ranges are wider than the consolidated $0.20 band to allow for variability by business, as they are often offset in consolidated results. $3.35 - $3.55E PSEG – Re-affirming 2021 Guidance
Member of S&P Sustainability Yearbook 2021 Named to Dow Jones Sustainability Index – North America 13 years in a row Among 2021 America’s Most Responsible Companies by Newsweek Named to the Forbes Lists of: Best Employers for Diversity 2021 and Best Employers for Veterans 2020 PSEG ESG Vital Signs: Relative Scores** PSEG Sustainability & ESG Summary Leadership Policies & Goals Clean Energy Future: PSE&G has received regulatory approvals to invest $2 billion to decarbonize the New Jersey economy $1B CEF-Energy Efficiency program $0.7B* for smart meters (Energy Cloud-AMI) $0.2B for EV charging infrastructure PSE&G on track to achieve 2023 methane reduction goal of ~22% from 2018 levels PSEG Power’s commitment to reduce GHG emissions by 80% from 2005 levels by 2046 PSEG Power 2019 vision for Net-Zero emissions by 2050 PSEG announced a strategic review of PSEG Power’s non-nuclear generation assets PSEG Power is already at half the CO2 intensity of PJM/U.S. averages PSEG Power is coal-free by mid-2021 PSEG completed acquisition of 25% interest in Ocean Wind, NJ’s first Offshore Wind farm Regulated Solar energy investments total ~$1B 2020 Climate Report follows TCFD 2019 Sustainability Report is SASB compliant 2020 PSEG Performance Report Recognition & Scores PSEG is a vocal advocate for an economy-wide price on carbon emissions and preserving nuclear power plants for their carbon-free attributes Committed to rigorous oversight of political contributions and transparency in disclosure Diversity, Equity & Inclusion Commitment Human Rights Policy (2018) PSEG’s long-term ESG goals and business strategy are aligned with many of the U.N.’s Sustainable Development Goals intended to stimulate action to set the world on a sustainable path by 2030 *CEF-EC/AMI approved program is $707M, of which ~$600M is incremental capex over annual meter spend of ~$30M. **Scores from best to worst: MSCI – AAA to CCC, ISS - 1 to 5, Others - 100% to 0% EV=Electric Vehicle; GHG=Greenhouse Gas; TCFD=Task Force on Climate-Related Financial Disclosures; SASB=Sustainability Accounting Standards Board Note: PSEG ESG scores as of March 31, 2021. PSEG in top 20% of all MSCI rated companies Worse Better SSGA R-Factor Sustainalytics Bloomberg ISS MSCI CPA-Zicklin Index 3-S 4-E 56
PSEG delivering solid results and sustainable dividend growth PSEG non-GAAP Operating Earnings* PSEG Annual Common Dividend Re-affirming full-year 2021 non-GAAP Operating Earnings guidance of $3.35 - $3.55 per share PSE&G expected to contribute >80% of 2021 non-GAAP Operating Earnings PSEG’s 5-year capital spending forecast of $14B - $16B, with 90% directed to PSE&G, expected to produce ~6.5% - 8% compound annual growth in rate base over 2021 – 2025 Over 75% of PSEG Power’s 2021 gross margin secured via energy hedges, capacity revenues, ZECs and ancillary service payments PSEG increased the 2021 indicative annual common dividend by $0.08 to $2.04 per share Expect strong cash flow will enable funding the entire 5-year capital spending program during the 2021-2025 period, without the need to issue new equity 2021 Financial Highlights ZECs=Zero Emission Certificates
PSEG Q1 2021 Operating Company Review Dan Cregg EVP and Chief Financial Officer
PSEG – Q1 Results by Subsidiary Net Income/(Loss) 2021 2020 Change PSE&G $ 0.94 $ 0.87 $ 0.07 PSEG Power $ 0.32 $ 0.02 $ 0.30 PSEG Enterprise/Other $ 0.02 $ (0.01)- $ 0.03 Total PSEG $ 1.28 $ 0.88 $ 0.40 Non-GAAP Operating Earnings* 2021 2020 Change PSE&G $ 0.94 $ 0.87 $ 0.07 PSEG Power $ 0.32 $ 0.17 $ 0.15 PSEG Enterprise/Other $ 0.02 $ (0.01)- $ 0.03 Total PSEG* $ 1.28 $ 1.03 $ 0.25 *See Slides A and B for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP) for PSEG and PSEG Power. PSEG Q1 EPS Summary – Quarter ended March 31
$ / share PSEG EPS Reconciliation – Q1 2021 versus Q1 2020 Capacity 0.03 Re-contracting & Market 0.03 Volume 0.01 Gas Operations 0.04 O&M 0.03 Depreciation & Interest 0.01 Transmission 0.02 Gas Margin 0.03 Electric Margin 0.01 Distribution O&M (0.02) Distribution Depreciation (0.01) Distribution Non-Operating Pension/OPEB 0.02 Distribution Taxes & Other 0.02 Higher Tax Benefits *See Slides A and B for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP) for PSEG and PSEG Power.
PSE&G Q1 2021 Review
$ / share PSE&G EPS Reconciliation – Q1 2021versus Q1 2020 Distribution O&M (0.02) Distribution Depreciation (0.01) Distribution Non-Operating Pension/OPEB 0.02 Distribution Taxes & Other 0.02 Transmission 0.02 Gas Margin 0.03 Electric Margin 0.01
PSE&G – Q1 Weather Summary Q1 2021 vs. Q1 2020 vs. Normal Monthly Heating Degree Days (HDD) Q1 2021 winter weather, as defined by heating degree days, was ~18% colder than Q1 2020 and ~4% milder than normal Heating Degree Days
PSE&G Clean Energy Future Program Overview $2.5B investment $300M investment $100M investment $2.5B investment $300M investment $100M investment *CEF-EC/AMI Program is $707M, additional rate base is ~$600M given annual meter spend of ~$30M C&I=Commercial & Industrial customers; DC=direct current.
Driving innovation and efficiency for our customers through investments in technology Providing real-time information to help customers manage their usage, improving operational efficiencies, and supporting new energy technologies through the deployment of ~2.3 million smart meters over the next four years Advanced Metering Infrastructure Creating a holistic view of a customer’s profile, transactions, and participation in energy efficiency programs through deployment of a new integrated customer relationship management platform 360° View of the Customer Providing customers convenient ways to pay, track outage status, review their bill, and make appointments through a new self-service application that runs on mobile phones, tablets, and watches Mobile Access Enhancing real-time awareness of power outages, improving the capabilities of outage prediction models and enabling faster outage detection and restoration with a new advanced distribution management system and a new outage management system Outage and Distribution Management Optimizing resource utilization, enabling proactive asset management and gaining better insights into work status through a new mobile work management system; deploying Tech Talk virtual diagnostics to improve response time for WorryFree® appliance service Asset and Work Management Reducing cycle time of reporting damage during storm events and enabling digitization of T&D field processes, including public safety through deployment of a suite of mobile geographic information system applications and dashboards Mobile Geographic Information System
PSE&G – Q1 Highlights For the trailing 12 months ended March 31, weather normalized electric sales declined by 2%; Residential sales increased by 7%, more than offset by Commercial and Industrial sales decline of 6% For the trailing 12 months ended March 31, weather normalized gas sales increased by 1%; Residential sales increased by 3%, partly offset by Commercial and Industrial sales decline of 3% PSE&G recognized as a safety leader in employee accident prevention by the American Gas Association for 2020 DART incident rate Rollout of nearly $2 billion of CEF programs in EE, AMI and EV Infrastructure in process Conservation Incentive Program to begin providing recovery of variations in revenue due to energy efficiency and other impacts in June for electric and October for gas Operations Regulatory and Market Environment PSE&G invested $0.6 billion in Q1 on track to invest $2.7 billion in 2021 in T&D infrastructure upgrades and rollout of CEF programs PSE&G Net Income increased $0.07 per share, or ~8%, over Q1 2020 PSE&G 2021 Net Income guidance remains unchanged at $1,410 million - $1,470 million Financial DART=Days Away Restricted or Transferred
PSEG Power Q1 2021 Review
PSEG Power EPS Reconciliation – Q1 2021 versus Q1 2020 Q1 2020 Net Income Q1 2020 Operating Earnings (non-GAAP)* Q1 2021 Net Income Q1 2021 Operating Earnings (non-GAAP)* Capacity 0.03 Re-contracting & Market 0.03 Volume 0.01 Gas Operations 0.04 O&M 0.03 Depreciation & Interest 0.01 *See Slide B for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP). $ / share
PSEG Power – Q1 Generation Measures Total Nuclear Total Coal Natural Gas & Oil *Indicates Period Net Generation, negative value reflects more GWh required to operate plants than were generated. Excludes Solar and Kalaeloa. **Excludes peaking and steam generation. ***Includes Oil Fuel Costs of $1 million each in Q1 2021 and Q1 2020. PSEG Power – Generation (GWh)* PSEG Power – Capacity Factors (%)* Quarter ended March 31 ($ millions) 2020 2021 Gas*** $ 103 $ 138 Coal $ - $ 9 Nuclear $ 47 $ 49 Total Fuel Cost $ 150 $ 196 Total GWh* Generation 13,178 13,257 $ / MWh 11.38 14.78 PSEG Power – Fuel Costs* Quarter ended March 31 2020 2021 Combined Cycle** 44.9% 41.7% Coal - % 31.7% Nuclear 94.9% 98.8% 13,178 13,257 (7)
PSEG Power – Gross Margin Performance Capacity revenues rose in 2021: Average price in PJM is $168 MW/day and in ISO-NE is $195 MW/day through May 31; Bridgeport Harbor 5 locked in at $231 MW/day* Higher Q1 2021 market prices due to weather Regional Performance Region Q1 Gross Margin ($M) Q1 2021 Performance PJM $382 Higher capacity revenues and re-contracting at higher market prices partially offset by lower demand New England $49 Higher market prices and higher demand partially offset by lower capacity prices New York $15 Higher market prices partially offset by unplanned outage PSEG Power Gross Margin ($/MWh) Quarter ended March 31 *PSEG Power’s cleared capacity auction price includes escalations over the 7-year period based on the Handy-Whitman Index through May 2026.
PSEG Power – Q1 Highlights Q1 2021 generation output up 1% vs Q1 2020 due to outage at Salem 1 in 2020 Nuclear fleet achieved a capacity factor of 98.8% in Q1 2021 CCGT fleet capacity factor was 41.7% in Q1 2021 Nuclear fleet produced 8.2 TWh, up 3% from last year due to Salem 1 outage in 2020; CCGT fleet produced 4.7 TWh, down 8% from last year due to lower demand Operations Regulatory and Market Environment Financial NJBPU awarded continuation of ZECs at $10/MWh for all three NJ nuclear units through May 2025 The NJBPU’s Resource Adequacy proceeding is ongoing, report expected May 2021 PJM expected to file at FERC in mid-July to change MOPR to better support state-subsidized resources Strategic alternatives exploration: entered into agreement to sell Solar assets, marketing of Fossil assets continues PSEG Power’s total debt as a percentage of capitalization was 28% at March 31 PSEG Power’s 2021 guidance range for non-GAAP Operating Earnings remains unchanged at $280 million - $370 million; non-GAAP Adjusted EBITDA guidance remains unchanged at $850 million - $950 million
PSEG
Re-affirming PSEG 2021 Guidance - By Subsidiary $ millions (except EPS) 2021E 2020 PSE&G (Net Income) $1,410 - $1,470 $1,327 PSEG Power $280 - $370 $430 PSEG Enterprise/Other ($15) ($16) Operating Earnings (non-GAAP)* $1,700 - $1,800 $1,741 Operating EPS (non-GAAP)* $3.35 - $3.55 $3.43 Segment Operating Earnings Guidance and Prior Year Results (non-GAAP, except as noted)* $ millions 2021E 2020 PSEG Power $850 - $950 $990 PSEG Power Adjusted EBITDA (non-GAAP) *,** Note: The total of subsidiary guidance ranges are wider than the consolidated band to allow for variability by business, as they are often offset in consolidated results. *See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP) for PSEG and Slide B for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP) and Adjusted EBITDA (non-GAAP) for PSEG Power. **Adjusted EBITDA for the full year 2020 includes pre-tax expenses of $36 million related to the purchase of NJ tax credits as part of the 2019 NJ Technology Tax Benefit Transfer Program. The benefit from the program’s tax credits is included in the income tax expense line item and more than offsets the expenses incurred for the purchase. E = Estimate.
APPENDIX
PSEG maintains a solid financial position PSEG Senior Unsecured Credit Ratings Moody’s = Baa1 / Outlook = Stable S&P = BBB / Outlook = Stable MTNs=Medium-Term Notes *Includes $44M Pennsylvania Economic Development Financing Authority Tax-Exempt Bond Maturing 2042 backed by Letter of Credit maturing 2022 Note: Credit Ratings are as of May 5, 2021; Total Long-Term Debt Outstanding amounts may not add to PSEG Consolidated Total Long-Term Debt Outstanding due to rounding PSEG Power Senior Unsecured Credit Ratings Moody’s = Baa1 / Outlook = Stable S&P = BBB / Outlook = Stable PSE&G Senior Secured Credit Ratings Moody’s = Aa3 / Outlook = Stable S&P = A / Outlook = Stable 2021 PSE&G Debt Issuances Secured 0.95% MTNs due March 2026 Secured 3.00% MTNs due March 2051 Total Long-Term Debt Outstanding as of 3/31/2021: Sr. Notes due November 2021 Sr. Notes due November 2022 Sr. Notes due June 2024 Sr. Notes due August 2025 Sr. Notes due August 2030 Sr. Notes due April 2031 Total Long-Term Debt Outstanding: $300M $700M $750M $550M $550M $96M $2.9B $450M $450M $11.5B Senior Notes Outstanding as of 3/31/2021 Senior Notes Outstanding as of 3/31/2021 Sr. Notes due June 2021 Sr. Notes due September 2021 Sr. Notes due June 2023 Sr. Notes due November 2023 Sr. Notes due April 2031 Total Long-Term Debt Outstanding*: $700M $250M $700M $250M $404M $2.3B PSEG Consolidated Debt to Capitalization 52% Debt to Capitalization 28%
Reconciliation of Non-GAAP Operating Earnings Please see Slide 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. A 2021 2020 2020 2019 2018 2017 Net Income 648 $ 448 $ 1,905 $ 1,693 $ 1,438 $ 1,574 $ (Gain) Loss on Nuclear Decommissioning Trust (NDT) Fund Related Activity, pre-tax (a) (PSEG Power) (55) 219 (231) (255) 144 (133) (Gain) Loss on Mark-to-Market (MTM), pre-tax (b) (PSEG Power) 47 (107) 81 (285) 117 167 Plant Retirements and Dispositions, pre-tax (PSEG Power) - - (122) 402 (51) 975 Oil Lower of Cost or Market (LOCOM) adjustment, pre-tax (PSEG Power) - 20 2 - - - Goodwill Impairment, pre-tax (PSEG Power) - - - 16 - - Lease Related Activity, pre-tax (PSEG Enterprise/Other) - - - 58 8 77 Income Taxes related to Operating Earnings (non-GAAP) reconciling items, excluding Tax Reform (c) 10 (60) 106 37 (74) (427) Tax Reform - - - - - (745) Operating Earnings (non-GAAP) 650 $ 520 $ 1,741 $ 1,666 $ 1,582 $ 1,488 $ PSEG Fully Diluted Average Shares Outstanding (in millions) 507 507 507 507 507 507 Net Income 1.28 $ 0.88 $ 3.76 $ 3.33 $ 2.83 $ 3.10 $ (Gain) Loss on NDT Fund Related Activity, pre-tax (a) (PSEG Power) (0.11) 0.44 (0.46) (0.50) 0.28 (0.26) (Gain) Loss on MTM, pre-tax (b) (PSEG Power) 0.09 (0.21) 0.16 (0.56) 0.23 0.33 Plant Retirements and Dispositions, pre-tax (PSEG Power) - - (0.24) 0.79 (0.10) 1.92 Oil LOCOM adjustment, pre-tax (PSEG Power) - 0.04 - - - - Goodwill Impairment, pre-tax (PSEG Power) - - - 0.03 - - Lease Related Activity, pre-tax (PSEG Enterprise/Other) - - - 0.11 0.02 0.15 Income Taxes related to Operating Earnings (non-GAAP) reconciling items, excluding Tax Reform (c) 0.02 (0.12) 0.21 0.08 (0.14) (0.84) Tax Reform - - - - - (1.47) Operating Earnings (non-GAAP) 1.28 $ 1.03 $ 3.43 $ 3.28 $ 3.12 $ 2.93 $ Public Service Enterprise Group Incorporated - Consolidated Operating Earnings (Non-GAAP) Reconciliation Reconciling Items Year Ended December 31, March 31, ($ millions, Unaudited) ($ Per Share Impact - Diluted, Unaudited) Three Months Ended Effective January 1, 2018, unrealized gains (losses) on equity securities are recorded in Net Income instead of Other Comprehensive Income (Loss). Includes the financial impact from positions with forward delivery months. Income tax effect calculated at 28.11% statutory rate for 2020, 2019 and 2018 and 40.85% statutory rate for 2017, except for lease related activity which is calculated at a combined leveraged lease effective tax rate, and NDT related activity which is calculated at the statutory rate plus a 20% tax on income (loss) from qualified NDT funds.
Reconciliation of Non-GAAP Operating Earnings and Non-GAAP Adjusted EBITDA Please see Slide 3 for an explanation of PSEG’s use of Operating Earnings and Adjusted EBITDA as non-GAAP financial measures and how they differ from Net Income. B Includes the financial impact from positions with forward delivery months. Income tax effect calculated at the statutory rate except for NDT related activity which is calculated at the statutory rate plus a 20% tax on income (loss) from qualified NDT funds. Excludes amounts related to Operating Earnings (non-GAAP) reconciling items. Net of capitalized interest. Three Months Ended 2021 2020 2020 Net Income 161 $ 13 $ 594 $ (Gain) Loss on NDT Fund Related Activity, pre-tax (55) 219 (231) (Gain) Loss on MTM, pre-tax (a) 47 (107) 81 Plant Retirements and Dispositions, pre-tax - - (122) Oil LOCOM adjustment, pre-tax - 20 2 Income Taxes related to Operating Earnings (non-GAAP) reconciling items (b) 10 (60) 106 Operating Earnings (non-GAAP) 163 $ 85 $ 430 $ Depreciation and Amortization, pre-tax (c) 90 93 360 Interest Expense, pre-tax (c) (d) 26 33 118 Income Taxes (c) 42 (10) 82 Adjusted EBITDA (non-GAAP) 321 $ 201 $ 990 $ PSEG Fully Diluted Average Shares Outstanding (in millions) 507 507 507 Year Ended March 31, December 31, PSEG Power LLC ($ millions, Unaudited) Operating Earnings (Non-GAAP) and Adjusted EBITDA (non-GAAP) Reconciliation Reconciling Items