PSEG Announces 2017 Results
PSEG also reported Net Income for the fourth quarter of 2017 of
"We ended 2017 on a strong note with operating earnings for the year above the mid-point of our guidance," said
The tables below provide a reconciliation of PSEG's Net Income to non-GAAP Operating Earnings for the full year and fourth quarter. See Attachment 11 for a complete list of items excluded from Net Income in the determination of non-GAAP Operating Earnings.
PSEG CONSOLIDATED RESULTS (unaudited) |
|||||
Full-Year Comparative Results |
|||||
2017 and 2016 |
|||||
Income |
Diluted Earnings |
||||
($ millions) |
Per Share |
||||
2017 |
2016 |
2017 |
2016 |
||
Net Income |
|
|
|
|
|
Reconciling Items* |
(86) |
588 |
(0.17) |
1.15 |
|
Non-GAAP Operating Earnings |
|
|
|
|
|
Avg. Shares |
507M |
508M |
|||
*See Attachment 11 |
PSEG CONSOLIDATED RESULTS (unaudited) |
|||||
Fourth Quarter Comparative Results |
|||||
2017 and 2016 |
|||||
Income/(Loss) |
Diluted Earnings |
||||
($ millions) |
Per Share |
||||
2017 |
2016 |
2017 |
2016 |
||
Net Income/(Loss) |
|
|
|
|
|
Reconciling Items* |
(667) |
377 |
(1.31) |
0.73 |
|
Non-GAAP Operating Earnings |
|
|
|
|
|
Avg. Shares |
508M |
508M |
|||
*See Attachment 11 |
The following table outlines PSEG's 2017 non-GAAP Operating Earnings by subsidiary and expectations for 2018.
2018 Non-GAAP Operating Earnings Guidance and |
||||
2017 Non-GAAP Operating Earnings |
||||
($ millions, except EPS) |
||||
2018E |
2017A |
|||
PSE&G |
|
|
||
|
|
|
||
PSEG Enterprise/Other |
|
|
||
Non-GAAP Operating Earnings |
|
|
||
Non-GAAP EPS |
|
|
||
E = Estimate A= Actual |
Non-GAAP Operating Earnings Review and Outlook by Operating Subsidiary
See Attachments 5 and 6 for detail regarding the quarter-over-quarter and year-over-year reconciliations for each of PSEG's businesses.
PSE&G
PSE&G reported Net Income of
PSE&G's Net Income in the fourth quarter reflects continued growth in earnings on its increased level of investment in Transmission and Distribution infrastructure.
Growth in PSE&G's investment in transmission improved quarter-over-quarter Net Income comparisons by
Electric sales, on a weather-normalized basis, declined 0.9% in the fourth quarter compared to the year-ago quarter as a decline in Residential and Industrial sales more than offset growth in Commercial sales. For the year, weather-normalized electric sales declined 0.4%. Weather-normalized gas sales for the quarter declined 1.0% as a reduction in sales to Residential customers was partially offset by growth in sales to Commercial and Industrial customers. For the year, growth in weather-normalized gas sales of 1.2% was led by growth from Commercial and Industrial customers.
PSE&G, in
In
PSE&G's
For the 16th year in a row, PSE&G's work to protect and strengthen the system yielded recognition as the most reliable electric utility in the Mid-Atlantic region.
PSE&G's Net Income for 2018 is forecasted at
Power's fourth quarter Net Income includes a one-time, non-cash benefit of
An increase in capacity prices in
Output from Power's generating facilities in the fourth quarter was 2% greater than output in the year-ago quarter. Quarterly comparisons were influenced by the timing of nuclear plant refueling outages and increased demand in response to colder than normal weather. For the year, based on results for the fourth quarter, output of 51 TWh was stronger than our forecast provided at the end of the third quarter, which called for full year output of 49 – 50 TWh. The nuclear fleet operated at an average capacity factor of 89.9% in the quarter, resulting in a full year capacity factor of 93.9%, and producing record electric output for the year of 31.8 TWh. Power's gas-fired CCGT fleet operated at an average capacity factor of ~40% in the quarter resulting in a full-year capacity factor of ~47% producing 13.6 TWh of electric energy for the year. For the quarter, output from the coal fleet declined slightly as the result of outage work at the Keystone station. For the full year, output from the coal fleet increased 12% to 5.3 TWh as an increase in gas prices improved its competitiveness.
Power is forecasting an improvement in output for 2018 to 55- 57 TWh. Following completion of the recent Basic Generation Service (BGS) auction in NJ, approximately 80% - 85% of production for the year is hedged at an average price of
For 2018, non-GAAP Operating Earnings and non-GAAP Adjusted EBITDA at
PSEG Enterprise/Other
PSEG Enterprise/Other reported Net Income for the fourth quarter of 2017 of
PSEG Enterprise/Other reported a non-GAAP operating loss in the fourth quarter 2017 of
The decline in non-GAAP Operating Earnings year-over-year reflects the impact of a
For 2018, non-GAAP Operating Earnings for PSEG Enterprise/Other are forecast to be
###
About PSEG:
PSE&G is
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
Management believes the presentation of non-GAAP Adjusted EBITDA for 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 Attachment 12 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.
The following attachments can be found on www.pseg.com:
Attachment 1 - Consolidating Statements of Operations – 3 months
Attachment 2 – Consolidated Statement of Operations – year ended
Attachment 3 - Capitalization Schedule
Attachment 4 - Condensed Consolidated Statements of Cash Flows
Attachment 5 - Quarter-over-Quarter EPS Reconciliation
Attachment 6 – Year-over-Year EPS Reconciliation
Attachment 7 - Retail Sales and Revenues – Electric
Attachment 8 - Retail Sales and Revenues – Gas
Attachment 9 - Generation Measures
Attachment 10 - Statistical Measures
Attachment 11 – Consolidated Operating Earnings (non-GAAP) Reconciliation
Attachment 12 – PSE&G Operating Earnings (non-GAAP), PSEG Power Operating Earnings (non-GAAP) and Adjusted EBITDA (non-GAAP) Reconciliation, PSEG Enterprise/Other Operating Earnings (non-GAAP) Reconciliation
Forward-Looking Statements
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
- 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;
- any inability to manage our energy obligations with available supply;
- increases in competition in wholesale energy and capacity markets;
- changes in technology related to energy generation, distribution and consumption and customer usage patterns;
- economic downturns;
- third party credit risk relating to our sale of generation output and purchase of fuel;
- adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in funding requirements;
- changes in state and federal legislation and regulations;
- the impact of pending rate case proceedings;
- regulatory, financial, environmental, health and safety risks associated with our ownership and operation of nuclear facilities;
- adverse changes in energy industry laws, policies and regulations, including market structures and transmission planning;
- changes in federal and state environmental regulations and enforcement;
- delays in receipt of, or an inability to receive, necessary licenses and permits;
- adverse outcomes of any legal, regulatory or other proceeding, settlement, investigation or claim applicable to us and/or the energy industry;
- changes in tax laws and regulations;
- the impact of our holding company structure on our ability to meet our corporate funding needs, service debt and pay dividends;
- lack of growth or slower growth in the number of customers or changes in customer demand;
- any inability of Power to meet its commitments under forward sale obligations;
- reliance on transmission facilities that we do not own or control and the impact on our ability to maintain adequate transmission capacity;
- any inability to successfully develop or construct generation, transmission and distribution projects;
- any equipment failures, accidents, severe weather events or other incidents that impact our ability to provide safe and reliable service to our customers;
- our inability to exercise control over the operations of generation facilities in which we do not maintain a controlling interest;
- any inability to recover the carrying amount of our long-lived assets and leveraged leases;
- an inability to maintain sufficient liquidity;
- any inability to realize anticipated tax benefits or retain tax credits;
- challenges associated with recruitment and/or retention of key executives and a qualified workforce;
- the impact of our covenants in our debt instruments on our operations; and
- the impact of acts of terrorism, cybersecurity attacks or intrusions.
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.
From time to time, PSEG,
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