PSEG(PEG) - 2023 Q4 - Annual Results

Executive Summary & 2023 Performance Highlights Consolidated Financial Performance (Full Year & Q4) PSEG achieved strong 2023 financial results, with full-year non-GAAP Operating Earnings at the high end of guidance, despite a Q4 decline in Net Income and non-GAAP Operating Earnings PSEG Consolidated Full Year Comparative Results ($ millions, except per share amounts) | ($ millions, except per share amounts) | FY 2023 | FY 2022 | Diluted Earnings Per Share FY 2023 | Diluted Earnings Per Share FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $2,563 | $1,031 | $ 5.13 | $ 2.06 | | Non-GAAP Operating Earnings | $1,742 | $1,739 | $ 3.48 | $ 3.47 | PSEG Consolidated Fourth Quarter Comparative Results ($ millions, except per share amounts) | ($ millions, except per share amounts) | 4Q 2023 | 4Q 2022 | Diluted Earnings Per Share 4Q 2023 | Diluted Earnings Per Share 4Q 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $ 546 | $ 788 | $ 1.10 | $ 1.58 | | Non-GAAP Operating Earnings | $ 271 | $ 318 | $ 0.54 | $ 0.64 | CEO Commentary & Strategic Achievements PSEG's CEO emphasized solid 2023 performance, marking 19 consecutive years of meeting guidance, driven by significant capital investments and clean energy initiatives - PSEG achieved solid operating and financial performance in 2023, with non-GAAP results at the high-end of guidance, marking the 19th consecutive year of meeting or exceeding guidance[5] - PSE&G completed its largest ever capital investment plan in a single year, totaling $3.7 billion, focused on modernizing system infrastructure and expanding energy efficiency offerings[5] - Significant progress in 2023 included retaining the 3,760 MW nuclear fleet (benefiting from nuclear production tax credit), exiting offshore wind generation, and reaching settlements for Gas System Modernization ($900 million) and Clean Energy Future-Energy Efficiency ($280 million)[7] - PSE&G filed its first electric and gas base rate case in six years in December 2023, seeking to recover over $3 billion in capital investments made since 2018[8] - PSE&G also submitted a $3.1 billion Clean Energy Future–Energy Efficiency II (CEF-EE II) proposal, aligned with New Jersey's updated energy efficiency framework for 2025-2027[9] 2024 Outlook & Dividend Guidance PSEG reaffirmed 2024 non-GAAP Operating Earnings guidance, increased its annual common dividend, and updated its five-year capital spending plan - PSEG updated its five-year regulated capital spending plan to $18 billion to $21 billion, supporting a compound annual growth in rate base of 6% to 7.5% and non-GAAP Operating Earnings of 5% to 7% over the 2024 to 2028 period[6] - PSEG reaffirmed its 2024 non-GAAP Operating Earnings guidance range of $3.60 to $3.70 per share[10] - The company increased its 2024 indicative annual common dividend rate by $0.12 to $2.40 per share, extending its track record of providing dividend income for 117 consecutive years[10] Business Segment Results Public Service Electric and Gas (PSE&G) PSE&G's full-year and Q4 2023 non-GAAP Operating Earnings declined, influenced by investment growth offset by lower pension income and higher expenses PSE&G Fourth Quarter and Full Year Comparative Results ($ millions, except per share amounts) | ($ millions, except per share amounts) | 4Q 2023 | 4Q 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $ 291 | $ 352 | $1,515 | $1,565 | | Non-GAAP Operating Earnings | $ 296 | $ 352 | $1,532 | $1,565 | | Non-GAAP Operating EPS | $ 0.59 | $ 0.70 | $ 3.06 | $ 3.12 | - PSE&G's Q4 results benefited from growth in incremental investments in Transmission and Gas Distribution, which were offset by expected declines in pension income and OPEB related credits, as well as higher depreciation, amortization, interest expense, and O&M costs[11] PSEG Power & Other PSEG Power & Other saw significant full-year Net Income and non-GAAP Operating Earnings growth, but Q4 declined due to reduced capacity revenues and lower pension/OPEB credits PSEG Power & Other Fourth Quarter and Full Year Comparative Results ($ millions, except per share amounts) | ($ millions, except per share amounts) | 4Q 2023 | 4Q 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $ 255 | $ 436 | $1,048 | $ (534) | | Non-GAAP Operating Earnings | $ (25) | $ (34) | $ 210 | $ 174 | | Non-GAAP Operating EPS | $ (0.05) | $ (0.06) | $ 0.42 | $ 0.35 | - PSEG Power & Other's Q4 results reflected an improvement in energy margin, which was offset by a reduction in capacity revenues, and expected lower pension income and OPEB credits compared with the fourth quarter of 2022[14] Company Information & Financial Reporting Standards About PSEG PSEG is a regulated infrastructure company committed to a clean energy future, aiming for net-zero emissions by 2030, and recognized for sustainability - PSEG is a predominantly regulated infrastructure company focused on a clean energy future, with a net-zero 2030 climate vision and participation in the U.N. Race to Zero[15] - PSEG's businesses include Public Service Electric and Gas Co. (PSE&G), PSEG Power, and PSEG Long Island[15] - PSEG has been named to the Dow Jones Sustainability North America Index for the 16th consecutive year and recognized as 1 in Customer Satisfaction with Residential and Business Electric Service in the East among Large Utilities by J.D. Power in 2023[7][15] Non-GAAP Financial Measures PSEG utilizes non-GAAP Operating Earnings as a key metric, excluding NDT, MTM, and other infrequent items, for consistent financial performance comparison - Non-GAAP Operating Earnings are used by management for internal analysis and communications with investors and analysts to consistently compare financial performance[16] - Non-GAAP Operating Earnings exclude the impact of gains (losses) associated with the Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting, and other material infrequent items[16] - Due to the forward-looking nature and market volatility, PSEG is unable to reconcile its non-GAAP Operating Earnings guidance to the most directly comparable GAAP financial measure[18] Important Disclosures Forward-Looking Statements This report includes forward-looking statements on future performance and strategies, subject to risks and uncertainties, which PSEG disclaims any obligation to update - The report includes forward-looking statements about future performance, revenues, earnings, and strategies, which are subject to risks and uncertainties that could cause actual results to differ materially[20] - Key risk factors include inability to obtain regulatory approval for projects, climate change risks, equipment failures, supply chain disruptions, cybersecurity attacks, changes in regulations, and adverse performance of trust funds[21] - Readers are cautioned not to place undue reliance on these statements, and PSEG specifically disclaims any obligation to update them, even in light of new information or future events, unless required by applicable securities laws[22] Investor Information PSEG disseminates important investor information, including new postings and email alerts, through its corporate Investor Relations website - PSEG and PSE&G release important information via postings on their corporate Investor Relations website at https://investor.pseg.com, and investors can sign up for automatic email alerts[24] Attachments: Detailed Financials & Operational Data Consolidating Statements of Operations (Three Months Ended December 31) This section details PSEG's consolidated and segment-level statements of operations for Q4 2023 vs. 2022, including revenues, expenses, and earnings PSEG Consolidating Statements of Operations (Three Months Ended December 31, 2023 vs. 2022) ($ millions) | | PSEG 4Q 2023 | PSE&G 4Q 2023 | PSEG Power & Other 4Q 2023 | PSEG 4Q 2022 | PSE&G 4Q 2022 | PSEG Power & Other 4Q 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | OPERATING REVENUES | $2,605 | $1,853 | $1,058 | $3,139 | $2,030 | $1,575 | | OPERATING INCOME | 692 | 396 | 296 | 964 | 421 | 543 | | NET INCOME | $ 546 | $ 291 | $ 255 | $ 788 | $ 352 | $ 436 | | OPERATING EARNINGS (non-GAAP) | $ 271 | $ 296 | $ (25) | $ 318 | $ 352 | $ (34) | | NET INCOME Per Share | $ 1.10 | $ 0.58 | $ 0.52 | $ 1.58 | $ 0.70 | $ 0.88 | | OPERATING EARNINGS (non-GAAP) Per Share | $ 0.54 | $ 0.59 | $ (0.05) | $ 0.64 | $ 0.70 | $ (0.06) | Consolidating Statements of Operations (Year Ended December 31) This section presents PSEG's full-year consolidated and segment-level statements of operations for 2023 vs. 2022, detailing revenues, expenses, and earnings PSEG Consolidating Statements of Operations (Year Ended December 31, 2023 vs. 2022) ($ millions) | | PSEG FY 2023 | PSE&G FY 2023 | PSEG Power & Other FY 2023 | PSEG FY 2022 | PSE&G FY 2022 | PSEG Power & Other FY 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | OPERATING REVENUES | $11,237 | $7,807 | $4,533 | $9,800 | $7,935 | $3,266 | | OPERATING INCOME | 3,685 | 1,974 | 1,711 | 1,381 | 1,892 | (511) | | NET INCOME (LOSS) | $ 2,563 | $1,515 | $1,048 | $1,031 | $1,565 | $ (534) | | OPERATING EARNINGS (non-GAAP) | $ 1,742 | $1,532 | $ 210 | $1,739 | $1,565 | $ 174 | | NET INCOME (LOSS) Per Share | $ 5.13 | $ 3.03 | $ 2.10 | $ 2.06 | $ 3.12 | $ (1.06) | | OPERATING EARNINGS (non-GAAP) Per Share | $ 3.48 | $ 3.06 | $ 0.42 | $ 3.47 | $ 3.12 | $ 0.35 | Capitalization Schedule This section presents PSEG's capitalization structure as of December 31, 2023, compared to 2022, detailing debt and equity components PSEG Capitalization Schedule ($ millions) | | December 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Commercial Paper and Loans | $ 949 | $ 2,200 | | Long-Term Debt* | 19,284 | 18,070 | | Total Debt | 20,233 | 20,270 | | Total Stockholders' Equity | 15,477 | 13,729 | | Total Capitalization | $ 35,710 | $ 33,999 | Condensed Consolidated Statements of Cash Flows This section outlines PSEG's condensed consolidated cash flows for 2023 and 2022, detailing operating, investing, and financing activities PSEG Condensed Consolidated Statements of Cash Flows ($ millions) | | Year Ended December 31, 2023 | Year Ended December 31, 2022 | | :--- | :--- | :--- | | Net Income | $ 2,563 | $ 1,031 | | NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 3,806 | 1,503 | | NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (2,958) | (1,101) | | NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (1,260) | (754) | | Net Change in Cash, Cash Equivalents and Restricted Cash | (412) | (352) | | Cash, Cash Equivalents and Restricted Cash at End of Period | $ 99 | $ 511 | Public Service Electric & Gas Company Retail Sales This section provides PSE&G's retail electric (kWh) and gas (therms) sales data for Q4 and full year 2023 vs. 2022, including weather data PSE&G Electric Sales (millions kWh) | Sales (millions kWh) | Three Months Ended 2023 | Change vs. 2022 | Year Ended 2023 | Change vs. 2022 | | :--- | :--- | :--- | :--- | :--- | | Residential | 2,805 | 5% | 13,076 | (6%) | | Commercial & Industrial | 6,181 | (5%) | 25,680 | (3%) | | Total | 9,082 | (2%) | 39,093 | (4%) | PSE&G Gas Sold and Transported (millions therms) | Sales (millions therms) | Three Months Ended 2023 | Change vs. 2022 | Year Ended 2023 | Change vs. 2022 | | :--- | :--- | :--- | :--- | :--- | | Total Firm Sales | 712 | (9%) | 2,282 | (11%) | | Total Non-Firm Sales | 234 | 13% | 848 | (13%) | | Total Sales | 946 | (4%) | 3,130 | (12%) | Weather Data (Actual vs. Normal) | | Three Months Ended 2023 | Change vs. 2022 | Year Ended 2023 | Change vs. 2022 | | :--- | :--- | :--- | :--- | :--- | | THI Hours - Actual | 690 | 103% | 17,820 | (10%) | | Degree Days - Actual | 1,325 | (13%) | 3,633 | (20%) | Nuclear Generation Measures This section provides nuclear generation data in GWh for PSEG's New Jersey and Pennsylvania facilities for Q4 and full year 2023 vs. 2022 Nuclear Generation (GWh Breakdown) | | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | Nuclear - NJ | 4,676 | 4,681 | 20,500 | 20,172 | | Nuclear - PA | 2,652 | 2,657 | 11,099 | 11,093 | | Total | 7,328 | 7,338 | 31,599 | 31,265 | Statistical Measures This section presents PSEG's key statistical measures for 2023 and 2022, including shares outstanding, stock price, dividends, and book value PSEG Statistical Measures | | 2023 (Year Ended Dec 31) | 2022 (Year Ended Dec 31) | | :--- | :--- | :--- | | Weighted Average Common Shares Outstanding (millions) - Diluted | 500 | 501 | | Stock Price at End of Period | $ 61.15 | $ 61.27 | | Dividends Paid per Share of Common Stock | $ 2.28 | $ 2.16 | | Dividend Yield | 3.7% | 3.5% | | Book Value per Common Share | $ 31.07 | $ 27.63 | | Market Price as a Percent of Book Value | 197% | 222% | Consolidated Operating Earnings (non-GAAP) Reconciliation This section reconciles PSEG's Net Income to non-GAAP Operating Earnings for Q4 and full year, detailing excluded items and their per-share impact PSEG Consolidated Operating Earnings (non-GAAP) Reconciliation ($ millions, Unaudited) | Reconciling Items | 2023 (4Q) | 2022 (4Q) | 2023 (FY) | 2022 (FY) | | :--- | :--- | :--- | :--- | :--- | | Net Income | $ 546 | $ 788 | $ 2,563 | $1,031 | | (Gain) Loss on Nuclear Decommissioning Trust (NDT) Fund Related Activity, pre-tax | (126) | (85) | (184) | 270 | | (Gain) Loss on Mark-to-Market (MTM), pre-tax | (291) | (611) | (1,334) | 635 | | Pension Settlement Charges, pre-tax | 6 | — | 338 | — | | Plant Retirements, Dispositions and Impairments, pre-tax | — | 14 | — | 31 | | Lease Related Activity, pre-tax | 7 | 25 | 7 | 78 | | Exit Incentive Program (EIP), pre-tax | 4 | — | 29 | — | | Income Taxes related to Operating Earnings (non-GAAP) reconciling items | 125 | 187 | 323 | (306) | | Operating Earnings (non-GAAP) | $ 271 | $ 318 | $ 1,742 | $1,739 | PSEG Consolidated Operating Earnings (non-GAAP) Reconciliation ($ Per Share Impact - Diluted, Unaudited) | Reconciling Items | 2023 (4Q) | 2022 (4Q) | 2023 (FY) | 2022 (FY) | | :--- | :--- | :--- | :--- | :--- | | Net Income | $ 1.10 | $ 1.58 | $ 5.13 | $ 2.06 | | (Gain) Loss on NDT Fund Related Activity, pre-tax | (0.26) | (0.17) | (0.37) | 0.54 | | (Gain) Loss on MTM, pre-tax | (0.58) | (1.22) | (2.67) | 1.27 | | Pension Settlement Charges, pre-tax | 0.02 | — | 0.68 | — | | Plant Retirements, Dispositions and Impairments, pre-tax | — | 0.03 | — | 0.06 | | Lease Related Activity, pre-tax | 0.01 | 0.05 | 0.01 | 0.15 | | EIP, pre-tax | 0.01 | — | 0.06 | — | | Income Taxes related to Operating Earnings (non-GAAP) reconciling items | 0.24 | 0.37 | 0.64 | (0.61) | | Operating Earnings (non-GAAP) | $ 0.54 | $ 0.64 | $ 3.48 | $ 3.47 | Segment Operating Earnings (non-GAAP) Reconciliation This section provides separate reconciliations of Net Income to non-GAAP Operating Earnings for PSE&G and PSEG Power & Other segments for Q4 and full year PSE&G Operating Earnings (non-GAAP) Reconciliation ($ millions, Unaudited) | Reconciling Items | 2023 (4Q) | 2022 (4Q) | 2023 (FY) | 2022 (FY) | | :--- | :--- | :--- | :--- | :--- | | Net Income | $ 291 | $ 352 | $1,515 | $1,565 | | EIP, pre-tax | 2 | — | 19 | — | | Pension Settlement Charges, pre-tax | 4 | — | 4 | — | | Income Taxes related to Operating Earnings (non-GAAP) reconciling items | (1) | — | (6) | — | | Operating Earnings (non-GAAP) | $ 296 | $ 352 | $1,532 | $1,565 | PSEG Power & Other Operating Earnings (non-GAAP) Reconciliation ($ millions, Unaudited) | Reconciling Items | 2023 (4Q) | 2022 (4Q) | 2023 (FY) | 2022 (FY) | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $ 255 | $ 436 | $ 1,048 | $(534) | | (Gain) Loss on Nuclear Decommissioning Trust (NDT) Fund Related Activity, pre-tax | (126) | (85) | (184) | 270 | | (Gain) Loss on Mark-to-Market (MTM), pre-tax | (291) | (611) | (1,334) | 635 | | Pension Settlement Charges, pre-tax | 2 | — | 334 | — | | Plant Retirements, Dispositions and Impairments, pre-tax | — | 14 | — | 31 | | Lease Related Activity, pre-tax | 7 | 25 | 7 | 78 | | EIP, pre-tax | 2 | — | 10 | — | | Income Taxes related to Operating Earnings (non-GAAP) reconciling items | 126 | 187 | 329 | (306) | | Operating Earnings (non-GAAP) | $ (25) | $ (34) | $ 210 | $ 174 |