 PSEG Public Service Enterprise Group Bank of
America – Merrill Lynch
2012 Power & Gas Leaders Conference
New York, NY
September 19, 2012
EXHIBIT 99 |
 2
Forward-Looking Statement
Readers are cautioned that statements contained in this presentation about our 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 the demand for or price of the capacity and energy that we
sell into wholesale electricity markets, • adverse
changes in energy industry law, policies and regulation, including market structures and 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 our operations, • changes in
nuclear regulation and/or general developments in the nuclear power industry, including various impacts from any accidents or incidents experienced at our facilities or by
others in the industry, that could limit operations of our nuclear generating units,
• actions or activities at one of our nuclear units located on a multi-unit
site that might adversely affect our ability to continue to operate that unit or other units located at the same site,
• any inability to balance our energy obligations, available supply and trading
risks, • any deterioration in our credit quality,
or the credit quality of our counterparties, including in our leveraged leases,
• availability of capital and credit at commercially reasonable terms and
conditions and our ability to meet cash needs, •
changes in the cost of, or interruption in the supply of, fuel and other commodities necessary to the operation of our generating units,
• delays in receipt of necessary permits and approvals for our construction and
development activities, • delays or unforeseen
cost escalations in our construction and development activities,
• any inability to achieve or continue to sustain, our expected levels of
operating performance, • increase in competition
in energy supply markets as well as competition for certain rate-based transmission projects,
• any inability to realize anticipated tax benefits or retain tax credits, • challenges associated with recruitment and/or
retention of a qualified workforce, • adverse
performance of our decommissioning and defined benefit plan trust fund investments and changes in 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.
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 3
GAAP Disclaimer
PSEG presents Operating Earnings in addition to its Net Income reported in
accordance
with
generally
accepted
accounting
principles
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), 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 page in this presentation (Page A)
includes 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.
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 8
Our business mix has changed with PSE&G
forecast to grow to 45% of 2012 operating earnings
Operating Earnings by Subsidiary*
*See page A for Items excluded from Income from Continuing Operations to reconcile
to Operating Earnings; All periods reflect Texas in Discontinued
Operations. E = Estimate. $3.09
$3.12
$2.74
PSE&G
Power
Other
$1.05
to
$1.10
$1.13
to
$1.31
Guidance
$2.25-$2.50
$0.63
$2.35
$2.15
$0.11
$0.12
$0.04
$1.03
$0.85
$1.67
$0.07 to $0.09
2009
2010
2011
2012E |
 10
Guidance
$1.31
$1.13
PSEG’s 2012 earnings guidance of $2.25 to $2.50
reflects continued improvement at PSE&G and a
decline in margins at Power
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
2011 Operating Earnings*
2012E Earnings Guidance*
PSE&G Earnings Per Share
2012 Assumptions
PSE&G
Growth in investments that provide
contemporaneous returns
Transmission
Distribution economic stimulus programs
Programs supporting NJ’s Energy Master
Plan
Power
Impacted by lower energy prices
Near term effects minimized by hedges in place
~400MW new Peaking capacity in-service mid
2012
Energy Holdings / Parent
Operating earnings guidance of $0.07 to $0.09
$0.00
$0.50
$1.00
$1.50
$2.00
2011 Operating Earnings*
2012E Earnings Guidance*
Power Earnings Per Share
Guidance
$1.10
$1.05
*See
page
A
for
Items
excluded
from
Income
from
Continuing
Operations
to
reconcile
to
Operating
Earnings;
2011
reflects
Texas
in
Discontinued
Operations. E = Estimate |
 19
A focused program to improve operating efficiency and direct capital
investment to PSE&G that provides the opportunity for double digit
operating earnings growth in the regulated business*
PSEG Focus
($ millions, except as noted)
2011
2014E
•
O&M Growth per year
•
PSE&G Rate Base
Transmission
E&G Distribution
EMP
EFORd Rate -
CCGT
•
Nuclear Generation
•
Holdings Solar Assets
•
LIPA
•
2.4%
(planned)
•
$6,800
•
$866
•
$5,900
•
$0
•
1.6%
•
29.3TWh
•
$0
•
$0
•
2.8%
(forecast)
•
$11,600
•
$4,600
•
$6,400
•
$630
•
1.1%
•
30.3TWh
•
$195
•
$10-$15
*Refers to earnings growth opportunity from approved investment programs excluding
solar over 2011-2014. •
0.4% (actual)
•
$8,100
•
$1,600
•
$6,000
•
$450
•
1.1%
•
30.0TWh
•
$120
•
$0
2008 |
 23
Approved
ROE
Inclusion of
CWIP in
Rate Base
100%
Recovery of
Costs Due to
Abandonment
Total
Estimated
Project
Costs
($ millions)
Susquehanna-Roseland
12.93%
$790
Northeast Grid Reliability
11.93%
$895
North Central Reliability
11.68%
$390
Burlington –
Camden 230kV
11.68%
$381
Mickleton –
Gloucester 230kV
11.68%
$435
Major
Transmission
Projects
PSE&G’s investment in transmission is underway
and is expected to grow to represent 40% of rate
base |
 29
Typical Annual Bill
1
Combined Electric and Gas
Residential Customer
Additional investments by PSE&G will stimulate the NJ
economy by creating jobs, while improving reliability to
customers
Supply
Supply*
Delivery and
Clauses
Delivery and
Clauses
Impact of
Transmission
investment
Impact of Renewable
and Distribution
investment
Lower
commodity
costs
are
expected
to
fully
offset
the
impact
to
customer
bills
1
2014 estimated supply cost is based on BGS rates effective 9/2012 and BGSS rates
effective 10/2012. 2
Includes projected Solar Loan III and Solar 4 All Extension impacts in 2014 based
on July 31, 2012 filing. E = Estimate. $0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2010
2014E
2 |
 50
PSEG 2012 Operating Earnings Guidance
-
By Subsidiary
$ millions (except EPS)
2012E
2011
PSEG Power
$575 –
$665
$845
PSE&G
$530 –
$560
$521
PSEG Energy Holdings/Parent
$35 –
$45
$23
Operating Earnings*
$1,140 –
$1,270
$1,389
Earnings per Share
$2.25 –
$2.50
$2.74
* See page A for Items excluded from Income from Continuing Operations to reconcile
to Operating Earnings. |
 57
$1.28
.07
.06
(.29)
$1.44
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
YTD 2012
Operating
Earnings*
YTD 2011
Operating
Earnings*
PSEG Power
PSE&G
PSEG Energy
Holdings/
Enterprise
PSEG
EPS
Reconciliation
–
YTD
2012
versus
YTD 2011
Lower Pricing (.16)
Lower Volume (.03)
Lower Capacity (.11)
Financing Costs .03
O&M .02
Weather (.01)
Other (.03)
Transmission .05
Renewables
and Other
Investments .01
O&M (.04)
Weather and
Demand (.02)
D&A (.02)
Taxes .07
Other .01
Tax settlement
* See Page A for Items excluded from Income from Continuing Operations to reconcile
to Operating Earnings. Six months ended June 30. |
 Items
Excluded from Income from Continuing Operations to Reconcile to Operating
Earnings 11
Public Service Enterprise Group
A
Reconciling Items Excluded from Continuing Operations to Compute Operating
Earnings (Unaudited)
Pro-forma Adjustments, net of tax
2012
2011
2011
2010
2009
2008
Earnings
Impact
($
Millions)
Gain (Loss) on Nuclear Decommissioning Trust (NDT)
Fund Related Activity (PSEG Power)
9
$
42
$
50
$
46
$
9
$
(71)
$
Gain (Loss) on Mark-to-Market (MTM)
(a)
(PSEG Power)
42
8
107
(1)
(11)
14
Lease Related Activity (PSEG Energy Holdings)
6
-
(173)
-
29
(490)
Market Transition Charge Refund (PSE&G)
-
-
-
(72)
-
-
Gain (Loss) on Asset Sales and Impairments (Energy Holdings)
-
-
34
-
-
(13)
Total Pro-forma adjustments
57
$
50
$
18
$
(27)
$
27
$
(560)
$
Fully Diluted Average Shares Outstanding (in Millions)
507
507
507
507
507
508
Per
Share
Impact
(Diluted)
Gain (Loss) on NDT Fund Related Activity (PSEG Power)
0.02
$
0.08
$
0.10
$
0.09
$
0.02
$
(0.14)
$
Gain (Loss) on MTM
(a)
(PSEG Power)
0.08
0.02
0.21
-
(0.02)
0.03
Lease Related Activity (PSEG Energy Holdings)
0.01
-
(0.34)
-
0.05
(0.96)
Market Transition Charge Refund (PSE&G)
-
-
-
(0.14)
-
-
Gain (Loss) on Asset Sales and Impairments (Energy Holdings)
-
-
0.06
-
-
(0.03)
Total Pro-forma adjustments
0.11
$
0.10
$
0.03
$
(0.05)
$
0.05
$
(1.10)
$
(a) Includes the financial impact from positions with forward delivery
months. Years Ended
December 31,
Six Months Ended
June 30,
Please see Page 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP
financial measure and how it differs from Net Income. |