UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 3, 2011
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(Exact name of registrant as specified in its charter)
New Jersey | 001-09120 | 22-2625848 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
80 Park Plaza, P.O. Box 1171
Newark, New Jersey 07101-1171
(Address of principal executive offices) (Zip Code)
973-430-7000
(Registrants telephone number, including area code)
http://www.pseg.com
PSEG POWER LLC
(Exact name of registrant as specified in its charter)
Delaware | 001-34232 | 22-3663480 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
80 Park Plaza, T-25
Newark, New Jersey 07102-4194
(Address of principal executive offices) (Zip Code)
973-430-7000
(Registrants telephone number, including area code)
http://www.pseg.com
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Exact name of registrant as specified in its charter)
New Jersey | 001-00973 | 22-1212800 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
80 Park Plaza, P.O. Box 570
Newark, New Jersey 07101-0570
(Address of principal executive offices) (Zip Code)
973-430-7000
(Registrants telephone number, including area code)
http://www.pseg.com
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | 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)) |
The information contained in Item 2.02. Results of Operations and Financial Condition in this Form 8-K is furnished solely for Public Service Enterprise Group Incorporated (PSEG). The information contained in Item 7.01 Regulation FD Disclosure in this combined Form 8-K is separately furnished, as noted, by PSEG, PSEG Power LLC (Power) and Public Service Electric and Gas Company (PSE&G). Information contained herein relating to any individual company is provided by such company on its own behalf and in connection with its respective Form 8-K. Power and PSE&G each makes representations only as to itself and makes no other representations whatsoever as to any other company.
Item 2.02 Results of Operations and Financial Condition
PSEG
On August 3, 2011, PSEG announced unaudited financial results for the three months and six months ended June 30, 2011. A copy of the earnings release dated August 3, 2011 is furnished as Exhibit 99 to this Form 8-K.
Item 7.01 Regulation FD Disclosure
PSEG, Power and PSE&G
On August 3, 2011, PSEG conducted an earnings call regarding its 2011 second quarter results. A copy of the slideshow presentation used during the earnings call is furnished as Exhibit 99.1 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits
Exhibit 99 | Press Release dated August 3, 2011 announcing second quarter 2011 results. | |
Exhibit 99.1 | Slideshow Presentation |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED | ||
(Registrant) | ||
By: | /s/ DEREK M. DIRISIO | |
Derek M. DiRisio | ||
Vice President and Controller | ||
(Principal Accounting Officer) |
Date: August 3, 2011
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
PSEG POWER LLC | ||
(Registrant) | ||
By: | /s/ DEREK M. DIRISIO | |
Derek M. DiRisio | ||
Vice President and Controller | ||
(Principal Accounting Officer) |
Date: August 3, 2011
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
PUBLIC SERVICE ELECTRIC AND GAS COMPANY | ||
(Registrant) | ||
By: | /s/ DEREK M. DIRISIO | |
Derek M. DiRisio | ||
Vice President and Controller | ||
(Principal Accounting Officer) |
Date: August 3, 2011
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EXHIBIT 99
Investor News | NYSE:PEG |
For further information, contact:
Kathleen A. Lally, Vice President Investor Relations |
Phone: 973-430-6565 | |
Carlotta Chan Lane, Manager Investor Relations |
Phone: 973-430-6596 |
August 3, 2011
PSEG ANNOUNCES 2011 SECOND QUARTER RESULTS
$0.63 PER SHARE INCOME FROM CONTINUING OPERATIONS
$0.59 PER SHARE OF OPERATING EARNINGS
Company Maintains 2011 Operating Earnings Guidance of $2.50$2.75 Per Share
Announces Expansion in Capital Investment Program
Public Service Enterprise Group (PSEG) reported today Second Quarter 2011 Income from Continuing Operations of $320 million or $0.63 per share as compared to $222 million or $0.44 per share for the Second Quarter of 2010. Including Income from Discontinued Operations, PSEG reported Net Income for the Second Quarter 2011 of $323 million ($0.63 per share) versus $224 million ($0.44 per share) for the Second Quarter of 2010. Operating Earnings for the second quarter of 2011 were $301 million or $0.59 per share compared to the Second Quarter of 2010 Operating Earnings of $321 million or $0.63 per share.
PSEG believes that the non-GAAP financial measure of Operating Earnings provides a consistent and comparable measure of performance of its businesses to help shareholders understand performance trends. Operating Earnings exclude the impact of returns/(losses) associated with Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting and other material one time items. The table below provides a reconciliation of PSEGs Net Income to Operating Earnings for the second quarter. See Attachment 12 for a complete list of items excluded from Income from Continuing Operations in the determination of Operating Earnings.
PSEG CONSOLIDATED EARNINGS (unaudited)
Second Quarter Comparative Results
2011 and 2010
Income ($millions) |
Diluted Earnings Per Share |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating Earnings |
$ | 301 | $ | 321 | $ | 0.59 | $ | 0.63 | ||||||||
Reconciling Items |
19 | (99 | ) | 0.04 | (0.19 | ) | ||||||||||
Income from Continuing Operations |
$ | 320 | 222 | 0.63 | $ | 0.44 | ||||||||||
Income from Discontinued Operations |
$ | 3 | $ | 2 | | | ||||||||||
Net Income |
$ | 323 | $ | 224 | $ | 0.63 | $ | 0.44 | ||||||||
Avg. Shares | 507M | 507M |
We have achieved significant operational and regulatory success during the past quarter. Our investment program, a strong balance sheet and the operational focus of a dedicated workforce position PSEG to be a reliable supplier of low-cost, clean energy for the long-term said Ralph Izzo, chairman, president and chief executive officer of PSEG.
He went on to say, our results for the first half of 2011 continue to support our forecast of operating earnings for the full year of $2.50$2.75 per share.
Operating Earnings guidance by company for the full year is as follows:
Operating Earnings
($ million, except EPS)
2011E | 2010A | |||
PSEG Power |
$765-$855 | $1,091 | ||
PSE&G |
$495-$520 | $430 | ||
PSEG Energy Holdings |
$0-$5 | $49 | ||
Parent |
$5-$15 | $14 | ||
Total |
$1,265-$1,395 | $1,584 | ||
Earnings Per Share |
$2.50-$2.75 | $3.12 |
Ralph Izzo also announced an increase in PSEGs capital investment program to approximately $6.9 billion over 2011-2013 compared to its prior forecast level of spending of $6.7 billion during this period. As part of the increase in spending, PSE&Gs capital budget is forecast to increase 15% from previously forecast levels to $5.2 billion. PSEG Energy Holdings forecast level of capital spending during this period has been reduced to $40 million from $570 million as PSEG Powers forecast level of spending remains unchanged at approximately $1.5 billion.
Our increased spending program, said Ralph Izzo, aligns the interests of PSEG with those of our customers, employees and shareholders. Supportive regulation at the state and federal level has been a foundation of our investments. The BPUs recent approval of programs accelerating our investment in electric and gas infrastructure and energy efficiency provides the continued opportunity to support jobs and the economic growth of the state. FERCs approval of incentive rate making treatment on major transmission projects supports system reliability. Our strong balance sheet provides the foundation to finance this growth. A program of continuous engagement with our employees has led to the resolution of labor contracts which has been an important contributor in our ability to control the growth in costs, provide the returns required by the market and support growth from our investment program.
Operating Earnings Review and Outlook by Operating Subsidiary
See Attachment 6 for detail regarding the quarter-over-quarter reconciliations for each of PSEGs businesses.
PSEG Power
PSEG Power reported operating earnings of $186 million ($0.36 per share) for the second quarter of 2011 compared with operating earnings of $229 million ($0.45 per share) for the second quarter of 2010.
2
Powers earnings were affected by a quarter-over-quarter decline in realized energy and capacity prices. A decline in capacity prices to $110 MW/Day from $174 MW/Day on June 1, 2011 reduced Powers earnings by $0.02 per share. A decline in energy prices under the Basic Generation Service (BGS) contract, also effective on June 1, 2011, to $94.30/MWh from $111.50/Mwh and other hedges reduced earnings by $0.03 per share. A 6% decline in volume in comparison to abnormally warm conditions during the year ago period reduced earnings by $0.02 per share. An increase in customer migration from the BGS contract reduced earnings by $0.01 per share. Higher depreciation expense coupled with a decline in capitalized interest associated with the commercial operation of the back-end technology at Hudson and Mercer reduced Powers earnings by $0.02 per share. An increase in operation and maintenance expense on the fossil stations reduced earnings by $0.01 per share. A decline in trading related losses and other miscellaneous items improved Powers earnings by $0.02 per share.
PSEG Powers nuclear fleet operated at an average capacity factor of 90.3% during the second quarter of 2011 compared to an average capacity factor of 92.6% in the year ago quarter. The performance for the quarter resulted in a capacity factor for the first half of 2011 of approximately 94.6% compared with a capacity factor of 95% for the year ago period. Availability in the quarter was mainly affected by a 29-day refueling outage at Salem 2. A decline in weather-related demand and higher costs reduced the dispatch of PSEG Powers fossil fleet which resulted in a 10% reduction in generation from the fossil fleet during the quarter.
The Nuclear Regulatory Commission (NRC) approved PSEG Nuclears request to extend the operating license of the Hope Creek Generating Station and both Salem units an additional 20 years. Hope Creeks operating license has been extended through 2046. Salem units 1 and 2 are now licensed through 2036 and 2040, respectively. The license renewal of these important assets will support the availability of low-cost, carbon-free energy.
We have lowered our full-year estimate of customer migration to an average of 34% from 35%. Our updated estimate assumes year-end customer migration levels of 37% -39%. The reduction in estimated levels of customer migration has not had a major impact on Powers hedge profile. For the balance of 2011, Powers base load output is fully hedged at an average price of $68 per MWh; with additional hedges in place on intermediate and peaking generation, approximately 70% -75% of total expected generation for that period is hedged at an average price of $68 per MWh. Power continues to forecast total generation for 2011 of 55 TWh. For 2012, hedges are in place for approximately 75% -80% of expected base-load generation of 36 TWh at an average price of $64 per MWh resulting in approximately 45% -50% of expected total 2012 generation of 56 TWh hedged at an average price of $64 per MWh. For 2013, approximately 35% -40% of anticipated base-load output of 36 TWh is hedged at an average price of $63 per MWh which results in hedges on approximately 20% -25% of expected total generation of 56 -58 TWh at an average price of $63 per MWh.
PSE&G
PSE&G reported operating earnings of $105 million ($0.21 per share) for the second quarter of 2011 compared with operating earnings of $75 million ($0.15 per share) for the second quarter of 2010.
PSE&Gs results were driven by rate relief and improved returns on higher levels of capital investment. An increase in electric and gas rates that went into effect on June 7, 2010 and July 9, 2010, respectively, improved earnings by $0.01 per share. An annualized increase in transmission
3
revenue of $45 million effective on January 1, 2011 added $0.01 per share to results. A return on investments made under capital adjustment clauses supporting renewables and electric and gas infrastructure programs added $0.02 per share to earnings. Quarter-over-quarter earnings comparisons were also aided by the implementation, as part of the rate case settlement, of the gas weather normalization clause and warmer than normal weather in the prior quarter. Together, these items added $0.02 per share to earnings. Lower volumes quarter over quarter reduced earnings by $0.01 per share. A reduction in operating and maintenance expense as a result of a decline in pension costs and the absence of a write-off in the second quarter of 2010 combined to add $0.03 per share to earnings. An increase in depreciation expense as a result of higher levels of capital spending reduced earnings by $0.01 per share. Other miscellaneous items combined to reduce earnings by $0.01 per share.
The Federal Energy Regulatory Commission (FERC) granted approval for incentive rate treatment effective on June 14, 2011 for three of five 230-kv projects with a total capital investment of about $1.0 billion. The incentive rate treatment covers approximately 80% of our request, and provides for recovery of Construction Work In Progress and 100% recovery of prudently-incurred abandonment costs.
PSE&G has increased its capital spending for 2011-2013 to $5.2 billion from $4.6 billion. The adjusted forecast reflects the NJ Board of Public Utilities recent decision to approve $368 million of increased spending on energy efficiency programs and electric and gas infrastructure. The forecast also includes an additional $96 million of spending on electric and gas distribution, and an update of forecast spending on certain transmission projects. The revised capital program will provide the opportunity for annual rate base growth of 11.5% from year-end 2010 over this period.
PSEG Energy Holdings
PSEG Energy Holdings reported operating earnings of $5 million ($0.01 per share) for the second quarter of 2011 versus operating earnings of $12 million ($0.02 per share) during the second quarter of 2010. The decline in operating earnings for the quarter reflects the absence of tax benefits recognized in the second quarter of 2010 associated with the start-up of solar projects in Ohio and Florida.
Roseton OL, LLC and Danskammer OL, LLC, indirect subsidiaries of PSEG (the PSEG Entities), are the owner-lessors of the Roseton and Danskammer electric generating facilities, which are leased to indirect subsidiaries of Dynegy and Dynegy Holdings Inc. (DHI). DHI has guaranteed the payment obligations of the lessees to the PSEG entities. As a result of DHIs proposed transfer of substantially all of its coal and natural gas-fired generation assets, other than the Roseton and Danskammer facilities, to new bankruptcy remote subsidiaries, the PSEG entities filed suit against DHI in the Delaware Court of Chancery to halt DHIs proposed transfer and protect is rights under the DHI guarantees. The PSEG Entities request for a temporary restraining order was denied on Friday, July 29, 2011 and they have since sought review with the Delaware Supreme Court. As of June 30, 2011, the PSEG Entities had a gross equity investment at risk in the Roseton and Danskammer leases of $264 million. A foreclosure event could result in an after-tax charge of $170$180 million. As part of this potential foreclosure event, PSEG could be required to pay approximately $100 million to satisfy income tax obligations. This potential cash tax obligation is fully reflected in the overall estimate of the aggregate after-tax charge noted above.
4
Other Items
PSEG Power LLC closed on the sale of its 1,000 MW Odessa gas-fired generating plant on July 18, 2011 for approximately $335 million, subject to final adjustments for working capital. The closing of the Odessa sale completed the Texas asset sale process announced by PSEG Power in early 2011. In March 2011, PSEG Power closed the sale of the 1,000 MW Guadalupe plant for approximately $352 million.
# # # #
Forward-Looking Statement
Readers are cautioned that statements contained in this presentation about our and our subsidiaries future performance, including future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical, are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. 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. Although we believe that our expectations are based on reasonable assumptions, they are subject to risks and uncertainties and we can give no assurance they will be achieved. The results or developments projected or predicted in these statements may differ materially from what may actually occur. Factors which could cause results or events to differ from current expectations include, but are not limited to:
| adverse changes in energy industry law, policies and regulation, including market structures and a potential shift away from competitive markets toward subsidized market mechanisms, transmission planning and cost allocation rules, including rules regarding how transmission is planned and who is permitted to build transmission in the future, and reliability standards, |
| any inability of our transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators, |
| changes in federal and state environmental regulations that could increase our costs or limit operations of our generating units, |
| changes in nuclear regulation and/or general developments in the nuclear power industry, including various impacts from any accidents or incidents experienced at our facilities or by others in the industry that could limit operations of our nuclear generating units, |
| actions or activities at one of our nuclear units located on a multi-unit site that might adversely affect our ability to continue to operate that unit or other units located at the same site, |
| any inability to balance our energy obligations, available supply and trading risks, |
| any deterioration in our credit quality, or the credit quality of our counterparties, |
| availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs, |
| any inability to realize anticipated tax benefits or retain tax credits, |
| changes in the cost of, or interruption in the supply of, fuel and other commodities necessary to the operation of our generating units, |
| delays in receipt of necessary permits and approvals for our construction and development activities, |
| delays or unforeseen cost escalations in our construction and development activities, |
| adverse changes in the demand for or price of the capacity and energy that we sell into wholesale electricity markets, |
| increase in competition in energy markets in which we compete, |
| challenges associated with recruitment and/or retention of a qualified workforce, |
| adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in discount rates and funding requirements, and |
| changes in technology and customer usage patterns. |
For further information, please refer to our Annual Report on Form 10-K, including Item 1A. Risk Factors, and subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. These documents address in further detail our business, industry issues and other factors that could cause actual results to differ materially from those indicated in this presentation. In addition, any forward-looking statements included herein represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our internal estimates change, unless otherwise required by applicable securities laws.
5
Attachment 1
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Operating Earnings and Per Share Results by Subsidiary
(Unaudited)
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
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2011 | 2010 | 2011 | 2010 | |||||||||||||
Earnings Results ($ Millions) | ||||||||||||||||
PSEG Power |
$ | 186 | $ | 229 | $ | 452 | $ | 541 | ||||||||
PSE&G |
105 | 75 | 268 | 192 | ||||||||||||
PSEG Energy Holdings |
5 | 12 | 2 | 19 | ||||||||||||
PSEG |
5 | 5 | 10 | 8 | ||||||||||||
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Operating Earnings |
$ | 301 | $ | 321 | $ | 732 | $ | 760 | ||||||||
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Reconciling Items(a) |
19 | (99 | ) | 50 | (40 | ) | ||||||||||
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Income from Continuing Operations |
$ | 320 | $ | 222 | $ | 782 | $ | 720 | ||||||||
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Discontinued Operations |
3 | 2 | 67 | (5 | ) | |||||||||||
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Net Income |
$ | 323 | $ | 224 | $ | 849 | $ | 715 | ||||||||
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Fully Diluted Average Shares Outstanding (in Millions) |
507 | 507 | 507 | 507 | ||||||||||||
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Per Share Results (Diluted) | ||||||||||||||||
PSEG Power |
$ | 0.36 | $ | 0.45 | $ | 0.89 | $ | 1.07 | ||||||||
PSE&G |
0.21 | 0.15 | 0.53 | 0.38 | ||||||||||||
PSEG Energy Holdings |
0.01 | 0.02 | | 0.03 | ||||||||||||
PSEG |
0.01 | 0.01 | 0.02 | 0.02 | ||||||||||||
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Operating Earnings |
$ | 0.59 | $ | 0.63 | $ | 1.44 | $ | 1.50 | ||||||||
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Reconciling Items(a) |
0.04 | (0.19 | ) | 0.10 | (0.08 | ) | ||||||||||
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Income from Continuing Operations |
$ | 0.63 | $ | 0.44 | $ | 1.54 | $ | 1.42 | ||||||||
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Discontinued Operations |
| | 0.13 | (0.01 | ) | |||||||||||
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Net Income |
$ | 0.63 | $ | 0.44 | $ | 1.67 | $ | 1.41 | ||||||||
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(a) | See attachment 12 for details of items excluded from Income from Continuing Operations to compute Operating Earnings. |
Note:
Income from Continuing Operations includes preferred stock dividends relating to PSE&G of $1 million for the six months ended June 30, 2010.
Attachment 2
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Consolidating Statements of Operations
(Unaudited, $ Millions)
For the Three Months Ended June 30, 2011 | ||||||||||||||||||||
PSEG | OTHER (a) | PSEG POWER |
PSE&G | PSEG ENERGY HOLDINGS |
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OPERATING REVENUES |
$ | 2,469 | $ | (408 | ) | $ | 1,285 | $ | 1,571 | $ | 21 | |||||||||
OPERATING EXPENSES |
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Energy Costs |
1,010 | (408 | ) | 603 | 815 | | ||||||||||||||
Operation and Maintenance |
575 | (8 | ) | 271 | 304 | 8 | ||||||||||||||
Depreciation and Amortization |
235 | 3 | 56 | 172 | 4 | |||||||||||||||
Taxes Other Than Income Taxes |
28 | | | 28 | | |||||||||||||||
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Total Operating Expenses |
1,848 | (413 | ) | 930 | 1,319 | 12 | ||||||||||||||
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OPERATING INCOME |
621 | 5 | 355 | 252 | 9 | |||||||||||||||
Income from Equity Method Investments |
4 | | | | 4 | |||||||||||||||
Other Income and Deductions |
40 | 1 | 35 | 4 | | |||||||||||||||
Other Than Temporary Impairments |
(1 | ) | | (1 | ) | | | |||||||||||||
Interest Expense |
(117 | ) | 3 | (41 | ) | (78 | ) | (1 | ) | |||||||||||
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
547 | 9 | 348 | 178 | 12 | |||||||||||||||
Income Tax Expense |
(227 | ) | (4 | ) | (143 | ) | (73 | ) | (7 | ) | ||||||||||
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INCOME FROM CONTINUING OPERATIONS |
320 | 5 | 205 | 105 | 5 | |||||||||||||||
Discontinued Operations, net of tax |
3 | | 3 | | | |||||||||||||||
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NET INCOME |
$ | 323 | $ | 5 | $ | 208 | $ | 105 | $ | 5 | ||||||||||
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Income from Continuing Operations |
$ | 320 | $ | 5 | $ | 205 | $ | 105 | $ | 5 | ||||||||||
Less: Reconciling Items Excluded from Continuing Operations (a) |
19 | | 19 | | | |||||||||||||||
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OPERATING EARNINGS |
$ | 301 | $ | 5 | $ | 186 | $ | 105 | $ | 5 | ||||||||||
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For the Three Months Ended June 30, 2010 | ||||||||||||||||||||
PSEG | OTHER (a) | PSEG POWER |
PSE&G | PSEG ENERGY HOLDINGS |
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OPERATING REVENUES |
$ | 2,361 | $ | (459 | ) | $ | 1,264 | $ | 1,536 | $ | 20 | |||||||||
OPERATING EXPENSES |
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Energy Costs |
1,072 | (457 | ) | 612 | 917 | | ||||||||||||||
Operation and Maintenance |
601 | (11 | ) | 260 | 343 | 9 | ||||||||||||||
Depreciation and Amortization |
229 | 5 | 44 | 177 | 3 | |||||||||||||||
Taxes Other Than Income Taxes |
28 | | 28 | | ||||||||||||||||
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Total Operating Expenses |
1,930 | (463 | ) | 916 | 1,465 | 12 | ||||||||||||||
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OPERATING INCOME |
431 | 4 | 348 | 71 | 8 | |||||||||||||||
Income from Equity Method Investments |
5 | | | | 5 | |||||||||||||||
Other Income and Deductions |
35 | 1 | 30 | 3 | 1 | |||||||||||||||
Other Than Temporary Impairments |
(5 | ) | | (5 | ) | | | |||||||||||||
Interest Expense |
(120 | ) | 4 | (42 | ) | (80 | ) | (2 | ) | |||||||||||
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INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
346 | 9 | 331 | (6 | ) | 12 | ||||||||||||||
Income Tax Expense |
(124 | ) | (4 | ) | (129 | ) | 9 | | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME FROM CONTINUING OPERATIONS |
222 | 5 | 202 | 3 | 12 | |||||||||||||||
Discontinued Operations, net of tax |
2 | | 2 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME |
$ | 224 | $ | 5 | $ | 204 | $ | 3 | $ | 12 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income from Continuing Operations |
$ | 222 | $ | 5 | $ | 202 | $ | 3 | $ | 12 | ||||||||||
Less: Reconciling Items Excluded from Continuing Operations (a) |
(99 | ) | | (27 | ) | (72 | ) | | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
OPERATING EARNINGS |
$ | 321 | $ | 5 | $ | 229 | $ | 75 | $ | 12 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | See attachment 12 for details of items excluded from Income from Continuing Operations to compute Operating Earnings. |
Attachment 3
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Consolidating Statements of Operations
(Unaudited, $ Millions)
For the Six Months Ended June 30, 2011 | ||||||||||||||||||||
PSEG | OTHER (a) | PSEG POWER |
PSE&G | PSEG ENERGY HOLDINGS |
||||||||||||||||
OPERATING REVENUES |
$ | 5,823 | $ | (1,347 | ) | $ | 3,252 | $ | 3,877 | $ | 41 | |||||||||
OPERATING EXPENSES |
||||||||||||||||||||
Energy Costs |
2,573 | (1,346 | ) | 1,738 | 2,181 | | ||||||||||||||
Operation and Maintenance |
1,226 | (18 | ) | 548 | 672 | 24 | ||||||||||||||
Depreciation and Amortization |
476 | 7 | 110 | 351 | 8 | |||||||||||||||
Taxes Other Than Income Taxes |
71 | | | 71 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Operating Expenses |
4,346 | (1,357 | ) | 2,396 | 3,275 | 32 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
OPERATING INCOME |
1,477 | 10 | 856 | 602 | 9 | |||||||||||||||
Income from Equity Method Investments |
7 | | | | 7 | |||||||||||||||
Other Income and Deductions |
103 | 1 | 93 | 8 | 1 | |||||||||||||||
Other Than Temporary Impairments |
(5 | ) | (1 | ) | (3 | ) | (1 | ) | | |||||||||||
Interest Expense |
(244 | ) | 7 | (92 | ) | (157 | ) | (2 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
1,338 | 17 | 854 | 452 | 15 | |||||||||||||||
Income Tax Expense |
(556 | ) | (7 | ) | (352 | ) | (184 | ) | (13 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME FROM CONTINUING OPERATIONS |
782 | 10 | 502 | 268 | 2 | |||||||||||||||
Discontinued Operations, net of tax |
67 | | 67 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME |
$ | 849 | $ | 10 | $ | 569 | $ | 268 | $ | 2 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income from Continuing Operations |
$ | 782 | $ | 10 | $ | 502 | $ | 268 | $ | 2 | ||||||||||
Less: Reconciling Items Excluded from Continuing Operations (a) |
50 | | 50 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
OPERATING EARNINGS |
$ | 732 | $ | 10 | $ | 452 | $ | 268 | $ | 2 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
For the Six Months Ended June 30, 2010 | ||||||||||||||||||||
PSEG | OTHER (a) | PSEG POWER |
PSE&G | PSEG ENERGY HOLDINGS |
||||||||||||||||
OPERATING REVENUES |
$ | 5,934 | $ | (1,562 | ) | $ | 3,460 | $ | 3,980 | $ | 56 | |||||||||
OPERATING EXPENSES |
||||||||||||||||||||
Energy Costs |
2,760 | (1,560 | ) | 1,863 | 2,457 | | ||||||||||||||
Operation and Maintenance |
1,271 | (19 | ) | 511 | 757 | 22 | ||||||||||||||
Depreciation and Amortization |
456 | 9 | 87 | 354 | 6 | |||||||||||||||
Taxes Other Than Income Taxes |
70 | | | 70 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Operating Expenses |
4,557 | (1,570 | ) | 2,461 | 3,638 | 28 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
OPERATING INCOME |
1,377 | 8 | 999 | 342 | 28 | |||||||||||||||
Income from Equity Method Investments |
8 | | | | 8 | |||||||||||||||
Other Income and Deductions |
62 | (2 | ) | 55 | 7 | 2 | ||||||||||||||
Other Than Temporary Impairments |
(6 | ) | | (6 | ) | | | |||||||||||||
Interest Expense |
(236 | ) | 7 | (82 | ) | (157 | ) | (4 | ) | |||||||||||
Preferred Stock Dividends |
| 1 | | (1 | ) | | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (b) |
1,205 | 14 | 966 | 191 | 34 | |||||||||||||||
Income Tax Expense |
(485 | ) | (6 | ) | (393 | ) | (71 | ) | (15 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
INCOME FROM CONTINUING OPERATIONS |
720 | 8 | 573 | 120 | 19 | |||||||||||||||
Discontinued Operations, net of tax |
(5 | ) | | (5 | ) | | | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NET INCOME |
$ | 715 | $ | 8 | $ | 568 | $ | 120 | $ | 19 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income from Continuing Operations |
$ | 720 | $ | 8 | $ | 573 | $ | 120 | $ | 19 | ||||||||||
Less: Reconciling Items Excluded from Continuing Operations (a) |
(40 | ) | | 32 | (72 | ) | | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
OPERATING EARNINGS |
$ | 760 | $ | 8 | $ | 541 | $ | 192 | $ | 19 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(a) | See attachment 12 for details of items excluded from Income from Continuing Operations to compute Operating Earnings. |
(b) | Income from Continuing Operations before Income Taxes includes preferred stock dividends relating to PSE&G of $1 million for the six months ended June 30, 2010. |
Attachment 4
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Capitalization Schedule
(Unaudited, $ Millions)
June 30, 2011 |
December 31, 2010 |
|||||||
DEBT |
||||||||
Commercial Paper and Loans |
$ | 298 | $ | 64 | ||||
Long-Term Debt |
7,155 | 7,748 | ||||||
Securitization Debt |
1,049 | 1,145 | ||||||
Project Level, Non-Recourse Debt |
46 | 47 | ||||||
|
|
|
|
|||||
Total Debt |
8,548 | 9,004 | ||||||
STOCKHOLDERS EQUITY |
||||||||
Common Stock |
4,812 | 4,807 | ||||||
Treasury Stock |
(601 | ) | (593 | ) | ||||
Retained Earnings |
6,077 | 5,575 | ||||||
Accumulated Other Comprehensive Loss |
(179 | ) | (156 | ) | ||||
|
|
|
|
|||||
Total Common Stockholders Equity |
10,109 | 9,633 | ||||||
Noncontrolling Interests - Equity Investments |
2 | 8 | ||||||
|
|
|
|
|||||
Total Equity |
10,111 | 9,641 | ||||||
|
|
|
|
|||||
Total Capitalization |
$ | 18,659 | $ | 18,645 | ||||
|
|
|
|
Attachment 5
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, $ Millions)
For the Six Months Ended June 30, | ||||||||
2011 | 2010 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
Net Income |
$ | 849 | $ | 715 | ||||
Adjustments to Reconcile Net Income to Net Cash Flows From Operating Activities |
546 | (195 | ) | |||||
|
|
|
|
|||||
NET CASH PROVIDED BY OPERATING ACTIVITIES |
1,395 | 520 | ||||||
|
|
|
|
|||||
NET CASH USED IN INVESTING ACTIVITIES |
(673 | ) | (755 | ) | ||||
|
|
|
|
|||||
NET CASH USED IN FINANCING ACTIVITIES |
(843 | ) | (58 | ) | ||||
|
|
|
|
|||||
Net Increase (Decrease) in Cash and Cash Equivalents |
(121 | ) | (293 | ) | ||||
Cash and Cash Equivalents at Beginning of Period |
280 | 350 | ||||||
|
|
|
|
|||||
Cash and Cash Equivalents at End of Period |
$ | 159 | $ | 57 | ||||
|
|
|
|
Attachment 6
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Quarter-over-Quarter EPS Reconciliation
June 30, 2011 vs. June 30, 2010
(Unaudited)
Attachment 7
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Year-over-Year EPS Reconciliation
June 30, 2011 vs. June 30, 2010
(Unaudited)
Attachment 8
PSEG POWER LLC
Generation Measures
(Unaudited)
GWhr Breakdown | GWhr Breakdown | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Nuclear - NJ |
4,842 | 5,027 | 10,307 | 10,371 | ||||||||||||
Nuclear - PA |
2,465 | 2,460 | 4,929 | 4,897 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Nuclear |
7,307 | 7,487 | 15,236 | 15,268 | ||||||||||||
Fossil - Coal - NJ* |
845 | 1,044 | 1,572 | 2,172 | ||||||||||||
Fossil - Coal - PA |
1,289 | 1,335 | 2,666 | 2,766 | ||||||||||||
Fossil - Coal - CT |
57 | 216 | 265 | 577 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Coal |
2,191 | 2,595 | 4,503 | 5,515 | ||||||||||||
Fossil - Oil & Natural Gas - NJ |
2,879 | 2,834 | 5,632 | 5,505 | ||||||||||||
Fossil - Oil & Natural Gas - NY |
944 | 1,239 | 1,970 | 2,094 | ||||||||||||
Fossil - Oil & Natural Gas - CT |
1 | 17 | 12 | 21 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Oil & Natural Gas |
3,824 | 4,090 | 7,614 | 7,620 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
13,322 | 14,172 | 27,353 | 28,403 | |||||||||||||
% Generation by Fuel Type | % Generation by Fuel Type | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Nuclear - NJ |
36 | % | 36 | % | 38 | % | 37 | % | ||||||||
Nuclear - PA |
19 | % | 17 | % | 18 | % | 17 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Nuclear |
55 | % | 53 | % | 56 | % | 54 | % | ||||||||
Fossil - Coal - NJ* |
6 | % | 7 | % | 5 | % | 7 | % | ||||||||
Fossil - Coal - PA |
10 | % | 9 | % | 10 | % | 10 | % | ||||||||
Fossil - Coal - CT |
0 | % | 2 | % | 1 | % | 2 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Coal |
16 | % | 18 | % | 16 | % | 19 | % | ||||||||
Fossil - Oil & Natural Gas - NJ |
22 | % | 20 | % | 21 | % | 20 | % | ||||||||
Fossil - Oil & Natural Gas - NY |
7 | % | 9 | % | 7 | % | 7 | % | ||||||||
Fossil - Oil & Natural Gas - CT |
0 | % | 0 | % | 0 | % | 0 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Oil & Natural Gas |
29 | % | 29 | % | 28 | % | 27 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
100 | % | 100 | % | 100 | % | 100 | % |
* | Includes Pumped Storage. Pumped Storage accounted for <1% of total generation for the three and six months ended June 30, 2011 and 2010. |
Attachment 9
PUBLIC SERVICE ELECTRIC & GAS COMPANY
Retail Sales and Revenues
(Unaudited)
June 30, 2011
Electric Sales and Revenues
Three Months Ended |
Change vs. 2010 |
Six Months Ended |
Change vs. 2010 |
|||||||||||||
Sales (millions kwh) |
||||||||||||||||
Residential |
3,207 | -4.7 | % | 6,435 | -1.5 | % | ||||||||||
Commercial & Industrial |
6,987 | -1.5 | % | 13,994 | -0.5 | % | ||||||||||
Street Lighting |
76 | -7.0 | % | 179 | -3.4 | % | ||||||||||
Interdepartmental |
2 | 1.8 | % | 5 | 2.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
10,272 | -2.5 | % | 20,613 | -0.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Revenue (in millions) |
||||||||||||||||
Residential |
$ | 523 | -1.0 | % | $ | 1,075 | 0.8 | % | ||||||||
Commercial & Industrial |
581 | 1.8 | % | 1,107 | -3.4 | % | ||||||||||
Street Lighting |
17 | -5.8 | % | 37 | -3.1 | % | ||||||||||
Other Operating Revenues* |
99 | 33.9 | % | 188 | 11.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 1,220 | 2.3 | % | $ | 2,407 | -0.5 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weather Data | Three Months Ended |
Change vs. 2010 |
Six Months Ended |
Change vs. 2010 |
||||||||||||
THI Hours - Actual |
5,187 | -5.6 | % | 5,207 | -5.2 | % | ||||||||||
THI Hours - Normal |
3,813 | 3,845 |
* | Primarily sales of Non-Utility Generator energy to PJM and Transmission related revenues. |
Attachment 10
PUBLIC SERVICE ELECTRIC & GAS COMPANY
Retail Sales and Revenues
(Unaudited)
June 30, 2011
Gas Sold and Transported
Three Months Ended |
Change vs. 2010 |
Six Months Ended |
Change vs. 2010 |
|||||||||||||
Sales (millions therms) |
||||||||||||||||
Residential Sales |
177 | 13.1 | % | 847 | 5.7 | % | ||||||||||
Commercial & Industrial - Firm Sales |
65 | 11.9 | % | 311 | 3.5 | % | ||||||||||
Commercial & Industrial - Interr. & Cogen |
43 | 5.6 | % | 78 | 2.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
285 | 11.6 | % | 1,236 | 5.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gas Transported - Firm Sales |
89 | 25.8 | % | 328 | 21.8 | % | ||||||||||
Gas Transported - Non-Firm |
201 | -16.3 | % | 429 | -2.8 | % | ||||||||||
Revenue (in millions) |
||||||||||||||||
Residential Sales |
$ | 110 | -14.9 | % | $ | 527 | -20.4 | % | ||||||||
Commercial & Industrial - Firm Sales |
40 | 16.7 | % | $ | 198 | -7.9 | % | |||||||||
Commercial & Industrial - Interr. & Cogen |
23 | 10.4 | % | $ | 44 | -1.4 | % | |||||||||
Other Operating Revenues* |
38 | 2.2 | % | $ | 75 | -0.7 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 211 | -4.7 | % | $ | 844 | -15.3 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gas Transported |
140 | 14.9 | % | 626 | 10.8 | % | ||||||||||
Weather Data |
Three Months Ended |
Change vs. 2010 |
Six Months Ended |
Change vs. 2010 |
||||||||||||
Degree Days - Actual |
416 | 25.8 | % | 2,975 | 8.0 | % | ||||||||||
Degree Days - Normal |
519 | 3,033 |
* | Primarily Appliance Service. |
Attachment 11
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Statistical Measures
(Unaudited)
For the Three Months Ended June 30 |
For the Six Months Ended June 30 |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Weighted Average Common Shares Outstanding (000s) |
||||||||||||||||
Basic |
505,988 | 506,109 | 505,984 | 506,030 | ||||||||||||
Diluted |
506,761 | 507,091 | 506,945 | 507,119 | ||||||||||||
Stock Price at End of Period |
$ | 32.64 | $ | 31.33 | ||||||||||||
Dividends Paid per Share of Common Stock |
$ | 0.3425 | $ | 0.3425 | $ | 0.6850 | $ | 0.6850 | ||||||||
Dividend Payout Ratio* |
44.6 | % | 44.6 | % | ||||||||||||
Dividend Yield |
4.2 | % | 4.3 | % | ||||||||||||
Price/Earnings Ratio* |
10.6 | 10.3 | ||||||||||||||
Rate of Return on Average Common Equity* |
16.1 | % | 17.4 | % | ||||||||||||
Book Value per Common Share |
$ | 19.98 | $ | 18.04 | ||||||||||||
Market Price as a Percent of Book Value |
163 | % | 174 | % | ||||||||||||
Total Shareholder Return |
4.7 | % | 7.3 | % | 4.8 | % | -3.7 | % |
* | Calculation based on Operating Earnings for the 12 month period ended. |
Attachment 12
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings
(Unaudited)
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
Pro-forma Adjustments, net of tax |
2011 | 2010 | 2011 | 2010 | ||||||||||||
Earnings Impact ($ Millions) | ||||||||||||||||
Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) |
$ | 15 | $ | 10 | $ | 42 | $ | 20 | ||||||||
Gain (Loss) on Mark-to-Market (MTM) (PSEG Power) |
4 | (37 | ) | 8 | 12 | |||||||||||
Market Transition Charge Refund (PSE&G) |
| (72 | ) | | (72 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Pro-forma adjustments |
$ | 19 | $ | (99 | ) | $ | 50 | $ | (40 | ) | ||||||
|
|
|
|
|
|
|
|
|||||||||
Fully Diluted Average Shares Outstanding (in Millions) |
507 | 507 | 507 | 507 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Per Share Impact (Diluted) | ||||||||||||||||
Gain (Loss) on NDT Fund Related Activity (PSEG Power) |
$ | 0.03 | $ | 0.02 | $ | 0.08 | $ | 0.04 | ||||||||
Gain (Loss) on MTM (PSEG Power) |
0.01 | (0.07 | ) | 0.02 | 0.02 | |||||||||||
Market Transition Charge Refund (PSE&G) |
| (0.14 | ) | | (0.14 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Pro-forma adjustments |
$ | 0.04 | $ | (0.19 | ) | $ | 0.10 | $ | (0.08 | ) |
Public Service Enterprise Group
PSEG Earnings Conference Call
2
nd
Quarter 2011
August 3, 2011
EXHIBIT 99.1 |
1
Forward-Looking Statement
Readers are cautioned that statements contained in this presentation about our and our subsidiaries'
future performance, including future revenues, earnings, strategies, prospects, consequences and
all other statements that are not purely historical, are forward-looking statements for purposes of the safe harbor provisions
under The Private Securities Litigation Reform Act of 1995. 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. Although we
believe that our expectations are based on reasonable assumptions, they are subject to risks and
uncertainties and we can give no assurance they will be achieved. The results or
developments projected or predicted in these statements may differ materially from what may actually occur. Factors which could cause results or
events to differ from current expectations include, but are not limited to:
adverse changes in energy industry law, policies and regulation, including market structures
and a potential shift away from competitive markets toward subsidized market mechanisms,
transmission planning and cost allocation rules, including rules regarding how transmission is planned and who is
permitted to build transmission in the future, and reliability standards,
any inability of our transmission and distribution businesses to obtain adequate and timely
rate relief and regulatory approvals from federal and state regulators,
changes in federal and state environmental regulations that could increase our costs or limit
operations of our generating units, changes in nuclear regulation and/or general
developments in the nuclear power industry, including various impacts from any accidents or incidents
experienced at our facilities or by others in the industry that could limit operations of our nuclear
generating units, actions or activities at one of our nuclear units located on a
multi-unit site that might adversely affect our ability to continue to operate that unit or other
units located at the same site,
any inability to balance our energy obligations, available supply and trading risks,
any deterioration in our credit quality, or the credit quality of our counterparties,
availability of capital and credit at commercially reasonable terms and conditions and our
ability to meet cash needs, any inability to realize anticipated tax benefits or retain
tax credits, changes in the cost of, or interruption in the supply of, fuel and other
commodities necessary to the operation of our generating units, delays in receipt of
necessary permits and approvals for our construction and development activities, delays
or unforeseen cost escalations in our construction and development activities, adverse
changes in the demand for or price of the capacity and energy that we sell into wholesale electricity markets,
increase in competition in energy markets in which we compete,
challenges associated with recruitment and/or retention of a qualified workforce,
adverse performance of our decommissioning and defined benefit plan trust fund investments and
changes in discount rates and funding requirements, and
changes in technology and customer usage patterns.
For further information, please refer to our Annual Report on Form 10-K, including Item 1A. Risk
Factors, and subsequent reports on Form 10-Q and Form 8-K filed with the Securities and
Exchange Commission. These documents address in further detail our business, industry issues and other factors that could cause actual
results to differ materially from those indicated in this presentation. In addition, any
forward-looking statements included herein represent our estimates only as of today and
should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements from time to
time, we specifically disclaim any obligation to do so, even if our internal estimates change, unless
otherwise required by applicable securities laws. |
2
GAAP Disclaimer
PSEG presents Operating Earnings in addition to its Net Income reported in
accordance with accounting principles generally accepted in the United
States (GAAP). Operating Earnings is a non-GAAP financial measure that
differs from Net Income because it excludes gains or losses associated with
Nuclear Decommissioning Trust (NDT) and Mark-to-Market (MTM)
accounting and other material one-time items. PSEG presents Operating
Earnings because management believes that it is appropriate for investors
to consider results excluding these items in addition to the results reported
in accordance with GAAP. PSEG believes that the non-GAAP financial
measure of Operating Earnings provides a consistent and comparable
measure of performance of its businesses to help shareholders understand
performance trends.
This information is not
intended to be viewed as an
alternative to GAAP information. The last two slides in this presentation
include a list of items excluded from Income from Continuing Operations to
reconcile to Operating Earnings, with a reference to that slide included on
each of the slides where the non-GAAP information appears.
|
PSEG
2011 Q2 Review
Ralph Izzo
Chairman, President and Chief Executive Officer |
4
Q2 2011 Earnings Summary
$ millions (except EPS)
2011
2010
Operating Earnings
$ 301
$ 321
Reconciling Items, Net of Tax
19
(99)
Income from Continuing Operations
$ 320
$ 222
Discontinued Operations
3
2
Net Income
$ 323
$ 224
EPS from Operating Earnings*
$ 0.59
$ 0.63
Quarter ended June
30
* See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. |
5
First Half 2011 Earnings Summary
$ millions (except EPS)
2011
2010
Operating Earnings
$ 732
$ 760
Reconciling Items, Net of Tax
50
(40)
Income from Continuing Operations
$ 782
$ 720
Discontinued Operations
67
(5)
Net Income
$ 849
$ 715
EPS from Operating Earnings*
$ 1.44
$ 1.50
Six months ended June
30 * See
page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
6
PSEG
Q2 2011
Focused on operational excellence
PSE&G focused on meeting reliability
Powers generation volumes declined 6% in the quarter
Power continues to optimize fuel flexibility
Foundation laid for the future
PSEG Nuclear received 20-year operating license extension for
Hope Creek and Salem Generating Stations
Completed sales of both Texas generating plants
Investments for the future
BPU approved $368 million of energy efficiency and capital
infrastructure programs for PSE&G
Received incentive rate treatment for 3 transmission projects at
FERC
EPA released CSAPR; Final HAPs/MACT rule expected in November
Financing position
Fitch affirmed the credit ratings of PSEG, Power and PSE&G
Rating Outlook is Stable
Focused on building a financially strong, environmentally friendly energy
business |
7
PSEG Capital Expenditures 2011-2013
($ Millions)
FROM
TO
PSE&G
$4,575
$5,245
PSEG Power
$1,495
$1,495
PSEG Energy Holdings
$570
$40
Other
$70
$70
Total
$6,710
$6,850
Updated capital spending program continues focus on growth investments
in distribution and transmission
*Estimate
+2.1%
PSEG Capital Expenditures
2011-2013* |
8
2009 Operating Earnings*
2010 Operating Earnings*
2011 Guidance
$2.50 -
$2.75E
PSEG
Maintaining 2011 Guidance
$3.09
* See page 35 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings.
$3.12 |
PSEG
2011 Q2 Operating Company Review
Caroline Dorsa
Executive Vice President and Chief Financial Officer |
10
Q2 Operating Earnings by Subsidiary
Operating Earnings
Earnings per Share
$ millions (except EPS)
2011
2010
2011
2010
PSEG Power
$ 186
$ 229
$ 0.36
$ 0.45
PSE&G
105
75
0.21
0.15
PSEG Energy Holdings
5
12
0.01
0.02
Enterprise
5
5
0.01
0.01
Operating Earnings*
$ 301
$ 321
$ 0.59
$ 0.63
Quarter ended June 30
* See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. |
11
$0.59
(0.01)
0.06
(0.09)
$0.63
0.00
0.25
0.50
0.75
PSEG EPS Reconciliation
Q2 2011 versus Q2 2010
Q2 2011
operating
earnings*
Q2 2010
operating
earnings*
Lower Pricing (0.05)
Lower Volume
& Weather (0.02)
Migration (0.01)
Trading & Other 0.02
D&A (0.02)
O&M (0.01)
PSEG Power
Margins:
Rate Relief 0.01
Transmission 0.01
Renewables
& Cap Stimulus 0.02
O&M 0.03
Weather & Volume
0.01
D&A (0.01)
Other (0.01)
PSE&G
PSEG Energy
Holdings
Absence of
2010 Tax
Benefits for
Solar & Other
Projects (0.02)
Other 0.01
See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. |
12
First Half Operating Earnings by Subsidiary
Operating Earnings
Earnings per Share
$ millions (except EPS)
2011
2010
2011
2010
PSEG Power
$ 452
$ 541
$ 0.89
$ 1.07
PSE&G
268
192
0.53
0.38
PSEG Energy Holdings
2
19
-
0.03
Enterprise
10
8
0.02
0.02
Operating Earnings*
$ 732
$ 760
$ 1.44
$ 1.50
Six months ended June 30
See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. |
13
$1.44
(0.03)
0.15
(0.18)
$1.50
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
PSEG EPS Reconciliation
YTD 2011 versus YTD 2010
YTD 2011
operating
earnings*
YTD 2010
operating
earnings*
Lower Pricing
(0.05)
Lower Volume &
Weather (0.02)
Migration (0.02)
O&M (0.04)
D&A and Interest
(0.05)
PSEG Power
Margins:
Rate Relief 0.04
Transmission 0.02
Renewables
& Cap Stimulus 0.03
O&M 0.07
Weather
& Volume 0.02
D&A (0.02)
Other (0.01)
PSE&G
PSEG Energy
Holdings
Absence of
2010 Tax
Benefits for
Solar & Other
Projects (0.02)
ES&P
Investment
Write-off (0.01)
* See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. |
PSEG
Power 2011 Q2 Review |
15
PSEG Power
Q2 2011 EPS Summary
$ millions (except EPS)
Q2 2011
Q2 2010
Variance
Operating Revenues
$ 1,285 $ 1,264
$ 21
Operating Earnings
186
229
(43)
NDT Funds/Mark to Market
Related Activity, Net of Tax
19
(27)
46
Income from Continuing Operations
205
202
3
Discontinued Operations
3
2
1
Net Income
208
204
4
EPS from Operating Earnings*
$ 0.36
$ 0.45
($ 0.09)
* See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. |
16
$0.45
(0.06)
(0.02)
(0.01)
$0.36
0.00
0.25
0.50
Lower Pricing
(0.05)
Lower Volume &
Weather (0.02)
Migration (0.01)
Trading & Other
0.02
PSEG Power EPS Reconciliation
Q2 2011 versus Q2 2010
Q2 2011
operating
earnings*
Q2 2010
operating
earnings*
* See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. O&M
Higher
Depreciation
for BET
Lower IDC
Offset |
17
PSEG Power
Generation Measures
7,487
7,307
2,595
2,191
4,090
3,824
0
8,750
17,500
2010
2011
Quarter ended June 30
Total Nuclear
Total Coal*
Oil & Natural Gas
excluding
Texas
* Includes figures for Pumped Storage
PSEG Power
Generation (GWh)
14,172
13,322
PSEG Power
Capacity Factors (%)
2010
2011
Nuclear
95.0%
94.6%
Coal
NJ
42%
31%
PA
83%
80%
CT
35%
15%
Combined
Cycle
PJM and NY
52%
53%
Six months ended June 30 |
18
PSEG Power
Fuel Costs
Quarter ended June 30
($ millions)
2010
2011
Coal
99
83
Oil & Gas*
168
155
Total Fossil
267
238
Nuclear
41
44
Total Fuel Costs
308
282
Total Generation
(GWh)
14,172
13,322
$ / MWh
21.73
21.17
PSEG Power
Fuel Costs
* Excludes Texas |
19
PSEG Power
Gross Margin Performance
$0
$25
$50
$75
2010
2011
$51
$49
Quarter ended June 30
Margins influenced by lower pricing and volumes
Regional Performance
Region
Q2 Gross
Margin ($M)
Q2 Performance
PJM
$622
Q2 contribution to gross margin
declined, reflecting lower volumes,
capacity prices, and BGS/hedge
pricing which occurred in the
quarter. Migration volumes are
less than forecast, and impact on
margin has abated with recent
market price improvement.
New
England
$27
Fuel cost management offset
flat year-over-year pricing and
lower volumes.
New York
$9
Lower volumes and pricing.
PSEG Power Gross Margin ($/MWh)*
* Excludes Texas
Decrease in generation output balanced with fuel switching at PJM
oil and gas units and slight reduction at nuclear. |
20
Hedging Update
our strategy is to hedge our base load generation long term.
Contracted Energy*
* Hedge
percentages
and
prices
as
of
July
2011
for
the
August
2011
and
forward
time
frame.
Revenues
of
full
requirement
load
deals
based
on
contract
price,
including
renewable
energy
credits,
ancillary,
and
transmission
components
but
excluding
capacity.
Hedges
include
positions
with
MTM
accounting
treatment
and
options.
2011
2012
2013
Aug - Dec
Volume TWh
14
36
36
Base Load
% Hedged
100%
75%-80%
35%-40%
(Nuclear and Base Load Coal)
Price $/MWh
$68
$64
$63
Volume TWh
9
20
21
Intermediate Coal, Combined
% Hedged
30%-35%
Cycle, Peaking
Price $/MWh
$68
Volume TWh
23
56
57
Total
% Hedged
70%-75%
45%-50%
20%-25%
Price $/MWh
$68
$64
$63 |
21
PSEG Power
Q2 Operating Highlights
Q2 output declined by 6%
Q2 nuclear capacity factor at 90%
Coal dispatch affected by higher cost structure
Combined cycle units captured market opportunities
Operations
Regulatory and Market
Environment
Hope Creek and Salem received 20-year Operating License Extensions
from the NRC
Market prices for energy improved in Q2
May RPM auction results continue to support locational value of assets
New Jersey BPU currently investigating the need for additional capacity subsidies
|
PSE&G
2011 Q2 Review |
23
PSE&G
Q2 2011 Earnings Summary
$ millions (except EPS)
Q2 2011
Q2 2010
Variance
Operating Revenues
$ 1,571
$ 1,536
$ 35
Operating Expenses
Energy Costs
815
917
(102)
Operation & Maintenance
304
343
(39)
Depreciation & Amortization
172
177
(5)
Taxes Other than Income Taxes
28
28
-
Total Operating Expenses
1,319
1,465
(146)
Operating Earnings
105
75
30
EPS from Operating Earnings*
$ 0.21
$ 0.15
$ 0.06
* See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. |
24
$0.15
0.04
0.03
0.01
(0.02)
$0.21
0.00
0.05
0.10
0.15
0.20
0.25
`
PSE&G EPS Reconciliation
Q2 2011
versus Q2 2010
Q2 2011
operating
earnings*
Q2 2010
operating
earnings*
Weather
& Volume
* See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. O&M
Margins:
Rate Relief 0.01
Transmission 0.01
Renewables
& Cap Stimulus 0.02
D&A (0.01)
Other (0.01) |
25
PSE&G
Monthly Weather Data
1,325
3,459
403
208
1,333
3,954
158
737
2,918
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
April
May
June
2011
2010
Normal
2011
vs.
2010
vs.
Normal
PSE&G
Monthly
Temperature
Humidity
Index
(THI)
-5.6% Q2 2011 vs. Q2 2010
+ 36% Q2 2011 vs. Normal |
26
PSE&G Capital Expenditures 2011-2013
($ Millions)
FROM
TO
Transmission
$2,735
$2,920
Distribution
$1,295
$1,685
Renewables/EMP
$545
$640
Total
$4,575
$5,245
Capital program provides growth in rate base of 11-12% from 2010
Transmission investment represents over 50% of planned capex over
2011-2013 Supportive regulatory treatment
*Estimate
+15%
PSE&G Capital Expenditures
2011-2013* |
27
PSE&G
Q2 Operating Highlights
NJBPU approved $368 million of energy efficiency and capital infrastructure
programs for PSE&G
Received incentive rate treatment for 3 transmission projects at
FERC
Energy Master Plan Draft Released -
Public hearings
PSE&G has increased its capital budget by $670 million over 2011-2013
Rate base growth over the 2010-2013 period projected to be 11.5% CAGR
Operations
Regulatory and Market
Environment
Financial
Economic indicators have stalled
Focused on maintaining reliability |
PSEG
Energy Holdings 2011 Q2 Review |
29
PSEG Energy Holdings
Q2 2011 Earnings Summary
$ millions (except EPS)
Q2 2011
Q2 2010
Variance
Operating Revenues
$ 21
$ 20
$ 1
Income from Continuing Operations /
Net Income / Operating Earnings
$ 5
$ 12
($ 7)
EPS from Operating Earnings*
$ 0.01
$ 0.02
($ 0.01)
* See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. |
30
$0.01
0.01
(0.02)
$0.02
0.00
0.01
0.02
0.03
0.04
PSEG Energy Holdings EPS Reconciliation
Q2 2011 versus
Q2 2010
Q2 2011
operating
earnings*
Q2 2010
operating
earnings*
Other
* See page 34 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. Absence of Q2 2010
Tax Benefits for
Solar and Other
Projects |
PSEG |
32
PSEG 2011 Operating Earnings Guidance -
By Subsidiary
$ millions (except EPS)
2011E
2010A
PSEG Power
$ 765
$ 855
$ 1,091
PSE&G
$ 495
$ 520
$ 430
PSEG Energy Holdings
$ 0
$ 5
$ 49
Enterprise
$ 5
$ 15
$ 14
Operating Earnings*
$ 1,265
$ 1,395
$ 1,584
Earnings per Share
$ 2.50
$ 2.75
$ 3.12
* See page 35 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. |
33
PSEG Liquidity as of June 30, 2011
Expiration
Total
Available
Company
Facility
Date
Facility
Usage
Liquidity
($Millions)
PSE&G
5-year Credit Facility
Apr-16
$600
$298
$302
5-Year Credit Facility (Power)
Dec-12
$1,600
1
$170
$1,430
5-Year Credit Facility (Power)
Apr-16
$1,000
$0
$1,000
5-Year Bilateral - Credit Suisse (Power)
Sep-15
$100
$100
$0
5-year Credit Facility (PSEG)
Dec-12
$500
2
$14
$486
5-year Credit Facility (PSEG)
Apr-16
$500
$0
$500
Total
$4,300
$3,718
$92
PSE&G ST Investment
$0
Total Liquidity Available
$3,810
Total Parent / Power Liquidity
$3,508
1
Power Facility reduced by $75 million in 12/2011
2
PSEG Facility reduced by $23 million in 12/2011
PSEG /
Power
PSEG Money Pool ST Investment |
34
Items Excluded from Income from Continuing Operations
to Reconcile to Operating Earnings
Please see Page 2 for an explanation of PSEGs use of Operating Earnings as a
non-GAAP financial measure and how it differs from Net Income.
Pro-forma Adjustments, net of tax
2011
2010
2011
2010
Earnings
Impact
($
Millions)
Gain (Loss) on Nuclear Decommissioning Trust (NDT)
Fund Related Activity (PSEG Power)
15
$
10
$
42
$
20
$
Gain (Loss) on Mark-to-Market (MTM) (PSEG Power)
4
(37)
8
12
Market Transition Charge Refund (PSE&G)
-
(72)
-
(72)
Total Pro-forma adjustments
19
$
(99)
$
50
$
(40)
$
Fully Diluted Average Shares Outstanding (in Millions)
507
507
507
507
Per
Share
Impact
(Diluted)
Gain (Loss) on NDT Fund Related Activity (PSEG Power)
0.03
$
0.02
$
0.08
$
0.04
$
Gain (Loss) on MTM (PSEG Power)
0.01
(0.07)
0.02
0.02
Market Transition Charge Refund (PSE&G)
-
(0.14)
-
(0.14)
Total Pro-forma adjustments
0.04
$
(0.19)
$
0.10
$
(0.08)
$
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciling
Items
Excluded
from
Continuing
Operations
to
Compute
Operating
Earnings
(Unaudited)
For the Three Months Ended
For the Six Months Ended
June 30,
June 30, |
35
Items Excluded from Income from Continuing Operations to Reconcile
to Operating Earnings
Please see Page 2 for an explanation of PSEGs use of Operating Earnings as a
non-GAAP financial measure and how it differs from Net Income.
Pro-forma Adjustments, net of tax
2010
2009
Earnings Impact ($ Millions)
Gain (Loss) on Nuclear Decommissioning Trust (NDT)
Fund Related Activity (PSEG Power)
46
$
9
$
Gain (Loss) on Mark-to-Market (MTM) (PSEG Power)
(1)
(11)
Net Reversal of Lease Transaction Reserves (Energy Holdings)
-
29
Market Transition Charge Refund (PSE&G)
(72)
-
Total Pro-forma adjustments
(27)
$
27
$
Fully Diluted Average Shares Outstanding (in Millions)
507
507
Per Share Impact (Diluted)
Gain (Loss) on NDT Fund Related Activity (PSEG Power)
0.09
$
0.02
$
Gain (Loss) on MTM (PSEG Power)
-
(0.02)
Net Reversal of Lease Transaction Reserves (Energy Holdings)
-
0.05
Market Transition Charge Refund (PSE&G)
(0.14)
-
Total Pro-forma adjustments
(0.05)
$
0.05
$
December 31,
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings
(Unaudited)
For the Twelve Months Ended |
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