 PSEG Public Service Enterprise Group European
Investor Meetings Deutsche Bank
October 1-5, 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. |
 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.
|
 6
2012 –
A year of significant accomplishment
•
NJBPU approved
North Central Grid
transmission line
•
Proposed up to $883
million solar energy
investment
•
Improved to 2
nd
place
(from 10 ) on the 2012
J.D. Power Electric
Utility Residential
Customer Satisfaction
Study-East Region
•
Improved availability
of gas-fired CCGT
fleet and strong
nuclear performance
•
O&M under control
•
400 MW of new
peaking generation
for summer 2012
•
Continued de-risking
of legacy portfolio
•
IRS settlement on
LILO/SILO tax
matters
•
IRS audit resolution
•
25 MW Solar project
in Arizona
•
15 MW Solar project
in Delaware
th |
 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
11
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
$0.00
$0.50
$1.00
$1.50
$2.00
2011 Operating Earnings*
2012E Earnings Guidance*
Power Earnings Per Share
Guidance
$1.10
$1.05
*See page A for Items excluded from Income from Continuing Operations to reconcile to Operating
Earnings; 2011 reflects Texas in Discontinued Operations. E = Estimate |
 15
A focus on operational excellence and a capital program that provides
the opportunity for double digit operating earnings growth at PSE&G*
PSEG Focus
($ millions, except as noted)
*Refers to earnings growth opportunity from approved investment programs at
PSE&G, excluding recently filed solar over 2011-2014.
•
0.4% (actual)
•
$8,100
•
$1,600
•
$6,000
•
$450
•
1.1%
•
30.0TWh
•
$120
•
$0
•
2.8%
(forecast)
•
$11,600
•
$4,600
•
$6,400
•
$630
•
1.1%
•
30.3TWh
•
$195
•
$10-$15
•
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
2014E
2011
2008 |
 46
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. |
 PSEG’s strong financial position supports our
program to invest in growth
Credit Ratings
(Moody’s/S&P/Fitch)
Debt as a % of
Capitalization
Enterprise/Parent*
Baa2/BBB/BBB+
41%
PSEG Power
Baa1/BBB/BBB+
34%
Public Service E&G**
A1/ A-
/A+
49%
PSEG Credit Metrics
PSEG cash position at June 30 was in excess of $750 million
Power and Parent available liquidity totaled approximately $4.2 billion
Moody’s upgraded PSE&G’s secured debt rating to A1 with a Stable
outlook and affirmed ratings of PSEG (Baa2) and Power (Baa1) with Stable
outlooks Standard & Poor’s has a positive outlook on all of
PSEG’s credit ratings Fitch upgraded PSE&G’s secured debt
rating to A+ with a Stable outlook and affirmed ratings of PSEG (BBB+) and
Power (BBB+) with Stable outlooks * Corporate credit rating for S&P.
**Senior secured rating for PSE&G. All data is as of June 30, 2012.
48 |
 Items
Excluded from Income from Continuing Operations to Reconcile to Operating
Earnings Public Service Enterprise Group
A
Pro-forma Adjustments, net of tax
2012
2011
2011
2010
2009
2008
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,
Reconciling Items Excluded from Continuing Operations to Compute Operating
Earnings (Unaudited)
Earnings
Impact
($
Millions)
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. |