8-K

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) October 31, 2016

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

Newark, New Jersey 07102

(Address of principal executive offices) (Zip Code)

973-430-7000

(Registrant’s 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

Newark, New Jersey 07102

(Address of principal executive offices) (Zip Code)

973-430-7000

(Registrant’s 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

Newark, New Jersey 07102

(Address of principal executive offices) (Zip Code)

973-430-7000

(Registrant’s 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, Public Service Electric and Gas Company (PSE&G) and PSEG Power LLC (Power). 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. PSE&G and Power each makes representations only as to itself and makes no other representations whatsoever as to any other company. The materials furnished as Exhibits 99 and 99.1 are available on the pseg.com website under the investor tab, or at http://investor.pseg.com.

Item 2.02 Results of Operations and Financial Condition

PSEG

On October 31, 2016, PSEG announced unaudited financial results for the three months and nine months ended September 30, 2016. A copy of the earnings release dated October 31, 2016 is furnished as Exhibit 99 to this Form 8-K.

Item 7.01 Regulation FD Disclosure

PSEG, PSE&G and Power

On October 31, 2016, PSEG conducted an earnings call regarding its 2016 third 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 October 31, 2016
Exhibit 99.1	Slideshow Presentation

2

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/ Stuart J. Black
	STUART J. BLACK
	Vice President and Controller
	(Principal Accounting Officer)

Date: October 31, 2016

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.

PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Registrant)
By:	/s/ Stuart J. Black
	STUART J. BLACK
	Vice President and Controller
	(Principal Accounting Officer)

Date: October 31, 2016

4

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/ Stuart J. Black
	STUART J. BLACK
	Vice President and Controller
	(Principal Accounting Officer)

Date: October 31, 2016

5

EX-99

EXHIBIT 99

For further information, contact:
•       Kathleen A. Lally, Vice President  – Investor Relations	Phone: 973-430-6565
•       Carlotta Chan, Manager - Investor Relations	Phone: 973-430-6596

PSEG ANNOUNCES 2016 THIRD QUARTER RESULTS

$0.64 Per Share of Net Income

Non-GAAP Operating Earnings of $0.88 Per Share

PSE&G Settlement Supports Expanded Investment in Solar

Full Year 2016 Non-GAAP Operating Earnings Guidance Adjusted to $2.80 - $2.95 Per Share

October 31, 2016 (Newark, NJ) (NYSE – PEG) Public Service Enterprise Group (PSEG) reported third quarter 2016 Net Income of $327 million or $0.64 per share as compared to Net Income of $439 million or $0.87 per share reported for the third quarter of 2015. Non-GAAP Operating Earnings for the third quarter of 2016 were $444 million or $0.88 per share as compared to non-GAAP Operating Earnings for the third quarter of 2015 of $403 million or $0.80 per share.

Ralph Izzo, chairman, president and chief executive officer said “PSEG’s performance for the third quarter continues to demonstrate the benefits from our expanded investment program. A focus on controlling costs supported results as demand was aided by the warmer than normal weather experienced this past summer. Net Income was also impacted by our decision to retire the Hudson and Mercer coal-fired generating stations in 2017. Retirement of these units continues the evolution of PSEG Power’s assets into a portfolio of reliable, low-cost, flexible assets capable of competing in today’s energy market. This decision will allow us to meet market conditions and aids PSEG Power’s future cash flow and return profile.”

Management uses non-GAAP Operating Earnings in its internal analysis, and in communications with investors and analysts, as a consistent measure for comparing PSEG’s financial performance to previous financial results. Non-GAAP Operating Earnings exclude the impact of returns (losses) associated with the Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting and material one-time items. The table below provides a reconciliation of PSEG’s Net Income to non-GAAP Operating Earnings for the third quarter. See Attachment 11 for a complete list of items excluded from Net Income in the determination of non-GAAP Operating Earnings. The presentation of non-GAAP Operating Earnings is intended to complement, and should not be considered an alternative to, the presentation of Net Income, which is an indicator of financial performance determined in accordance with GAAP. In addition, non-GAAP Operating Earnings as presented in this release may not be comparable to similarly titled measures used by other companies.

PSEG CONSOLIDATED RESULTS (unaudited)

Third Quarter Comparative Results

2016 and 2015

	Income					Diluted Earnings
	($ millions)					Per Share
	2016		2015			2016		2015
Net Income	$	327	$	439		$	0.64	$	0.87
Reconciling Items*		117		(36	)		0.24		(0.07	)
Non-GAAP Operating Earnings	$	444	$	403		$	0.88	$	0.80

Avg. Shares 508M 508M

* See Attachment 11

Ralph Izzo went on to say, “We are making a slight adjustment to the upper end of our guidance. Strong third quarter results weren’t sufficient to offset the lack of a winter, and we are adjusting our guidance for 2016’s non-GAAP Operating Earnings to $2.80 - $2.95 per share from $2.80 - $3.00 per share.”

Non-GAAP Operating Earnings guidance by company for the full year is as follows:

2016 Non-GAAP Operating Earnings Guidance

($ millions, except EPS)

	2016 Estimate
PSE&G	$900 - $935
PSEG Power	$460 - $500
PSEG Enterprise/Other	$65 - $65
Non-GAAP Operating Earnings	$1,425 - $1,500
Non-GAAP EPS	$2.80 - $2.95

Due to the forward looking nature of non-GAAP Operating Earnings guidance, PSEG is unable to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure. Management is unable to project certain reconciling items, in particular MTM and NDT gains (losses), for future periods due to market volatility.

Non-GAAP Operating Earnings Review and Outlook by Operating Subsidiary

See Attachment 5 for detail regarding the quarter-over-quarter reconciliations for each of PSEG’s businesses.

PSE&G

PSE&G reported Net Income of $255 million ($0.50 per share) for the third quarter of 2016 compared with Net Income of $222 million ($0.44 per share) for the third quarter of 2015.

The improvement in Net Income for the third quarter reflects growth from expanded investment in electric and gas transmission and distribution facilities.

Returns on PSE&G’s expanded investment in transmission added $0.03 per share to Net Income in the quarter. Incremental revenue associated with PSE&G’s Energy Strong investment infrastructure program added $0.02 per share to Net Income in the quarter. Third quarter Net Income comparisons also benefited by an increase in electric demand associated with weather conditions which were approximately 30% warmer than normal and 9% warmer than conditions experienced during the 2015 third quarter. The increase in demand associated with the warmer than normal weather added $0.01 per share to third quarter Net Income. An increase in depreciation and O&M and other items was offset by a decline in taxes and other items.

Electric demand in the third quarter was influenced by weather which was hotter than normal, and warmer than the weather conditions experienced in the year-ago period. Weather normalized sales for the third quarter – led by an increase in the residential sector – are estimated to have increased 0.1% for the quarter.

PSE&G’s capital program remains on schedule. PSE&G invested approximately $2.1 billion through September 30 as part of its planned capital investment for 2016 of $3.0 billion in upgrades to the electric and gas distribution and transmission system.

PSE&G has reached a settlement with key parties providing for an extension of its existing landfill/brownfield solar program. The settlement provides for an investment of approximately $80 million to construct 33MWs of grid-connected solar facilities over three years. The settlement is subject to review/approval by the NJ Board of Public Utilities (BPU). PSE&G is also requesting approval from the BPU to partner with NJ Transit in the development of a new $270 million substation that both would utilize, and would enhance the reliability and resilience of facilities damaged by Superstorm Sandy. It is estimated that the new substation would enter service by the end of 2020.

PSE&G filed an update of its Formula Rate for transmission at the Federal Energy Regulatory Commission in October 2016. The update, which reflects an increase in the level of PSE&G’s investment in transmission, would provide for a $121 million increase in annual transmission revenues effective January 1, 2017.

The forecast of PSE&G’s Net Income for 2016 remains at $900 - $935 million.

PSEG Power

PSEG Power reported Net Income of $139 million ($0.27 per share) for the third quarter of 2016 and non-GAAP Adjusted EBITDA of $397 million compared with Net Income of $206 million ($0.40 per share) and non-GAAP Adjusted EBITDA of $401 million for the third quarter of 2015. Non-GAAP Operating Earnings for the third quarter of 2016 was $170 million ($0.34 per share) compared with non-GAAP Operating Earnings for the third quarter of 2015 of $170 million ($0.33 per share).

Management believes non-GAAP Adjusted EBITDA is useful to investors and other users of our financial statements in evaluating operating performance because it provides them with an additional tool to compare business performance across companies and across periods. Management also believes that non-GAAP Adjusted EBITDA is widely used by investors to measure operating performance without regard to items such as income tax expense, interest expense, depreciation and amortization and major maintenance at Power’s fossil generation facilities, which can vary substantially from company to company depending upon, among other things, the book value of assets, capital structure, whether assets were constructed or acquired and accounting methods. Non-GAAP Adjusted EBITDA also allows investors and other users to assess the underlying financial performance of our fleet before management’s decision to deploy capital. Non-GAAP Adjusted EBITDA excludes the same items as our Operating Earnings measure as well as income tax expense, interest expense, depreciation and amortization and major maintenance expense. See Attachment 12 for a complete list of items excluded from Net Income in the determination of non-GAAP Adjusted EBITDA. The presentation of non-GAAP Adjusted EBITDA is intended to complement, and should not be considered an alternative to, the presentation of Net Income, which is an indicator of financial performance determined in accordance with GAAP.

Power’s Net Income in the third quarter includes one-time charges amounting to $67 million ($0.13 per share) related to the early retirement of the Hudson and Mercer generation stations. Power’s operating results for the third quarter reflect the impact of the known decline in average prices on energy hedges and a decline in operating costs.

A decline in the average price on energy hedges partially offset by a lower cost to serve load combined to reduce quarter-over-quarter Net Income by $0.02 per share. A decline in output during the quarter reduced Net Income by $0.01 per share. A reduction in O&M expense improved Net Income comparisons by $0.03 per share. An increase in depreciation associated with Power’s capital program was more than offset by a decline in interest expense and other items which combined to improve quarter-over-quarter Net Income by $0.01 per share.

Output at Power’s generation facilities declined 4% in the quarter. The average capacity factor for the nuclear fleet was 80% in the third quarter versus an average capacity factor of 95% in the year-ago quarter, as output from the nuclear fleet declined 12% to 6.9 TWh from 7.8 TWh. An extension of the Salem 1 refueling outage through the month of July to repair degraded baffle bolts and an unplanned outage at Salem 2 due to transformer issues were the primary causes for the reduction in nuclear output in the third quarter. Output from the gas-fired combined cycle fleet declined slightly to 5.2 TWh from 5.4 TWh. The warmer than normal weather conditions spurred an increase in demand for Power’s coal-fired generating stations and peaking fleet, which together experienced an increase in output during the quarter to 2.0 TWh from 1.6 TWh.

Power is maintaining its forecast of output for 2016 of 50 – 52 TWh. The forecast for output in 2017 and 2018 has been reduced by approximately 3 – 4%. The revised forecast takes into account the impact of low gas prices on the dispatch of the Keystone/Conemaugh coal-fired generation stations, and the retirement of the Hudson and Mercer coal-fired generation stations in mid-2017. Approximately 75% – 80% of anticipated production in the fourth

quarter of 2016 of 11 – 12 TWh is hedged at an average price of $48 per MWh. For 2017, Power has hedged 65% – 70% of its revised forecast of 51 – 53 TWh of output at an average price of $47 per MWh. For 2018, Power has hedged approximately 25% – 30% of its revised forecast of 56 – 58 TWh of output at an average price of $45 per MWh. The hedge data continues to assume BGS hedges will cover 11 – 12 TWh of output.

The forecast of Power’s non-GAAP Operating Earnings for 2016 is now $460 – $500 million. The forecast represents non-GAAP Adjusted EBITDA for the full year of $1,270 – $1,335 million.

PSEG Enterprise/Other

PSEG Enterprise/Other reported a Net Loss of $67 million ($0.13 per share) for the third quarter of 2016 compared to Net Income of $11 million ($0.03 per share) for the third quarter of 2015.

Non-GAAP Operating Earnings for the third quarter of 2016 were $19 million ($0.04 per share) compared with non-GAAP Operating Earnings of $11 million ($0.03 per share) during the third quarter of 2015.

During the third quarter of 2016, Energy Holdings completed its review of estimated residual values embedded in the NRG REMA, LLC leveraged leases. As a result of current and expected future market conditions, an impairment of $86 million, after-tax, related to the residual value of these leases was recorded in Net Income. The increase in non-GAAP Operating Earnings quarter-over-quarter reflects certain tax items at PSEG Energy Holdings and contractual payments associated with the operation of PSEG Long Island.

The forecast of PSEG Enterprise/Other full year non-GAAP Operating Earnings remains $65 million.

Financing

PSEG closed the quarter ended September 30, 2016 with $450 million of cash on its balance sheet with debt at the end of the quarter representing approximately 45% of consolidated capital. PSEG Power had debt at the end of the quarter representing 28% of capital.

Forward-Looking Statement

Certain of the matters discussed in this report about our and our subsidiaries’ future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management. When used herein, the words “anticipate,” “intend,” “estimate,” “believe,” “expect,” “plan,” “should,” “hypothetical,” “potential,” “forecast,” “project,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in filings we make with the United States Securities and Exchange Commission (SEC) including our

Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K and available on our website: http://www.pseg.com. These factors include, but are not limited to:

• adverse changes in the demand for or ongoing low pricing of the capacity and energy that we sell into wholesale electricity markets,

• adverse changes in energy industry law, policies and regulations, including market structures and transmission planning,

• any inability of our transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators, including prudency reviews, disallowances and changes in authorized returns,

• any deterioration in our credit quality or the credit quality of our counterparties,

• changes in federal and state environmental regulations and enforcement that could increase our costs or limit our operations,

• adverse outcomes of any legal, regulatory or other proceeding, settlement, investigation or claim applicable to us and/or the energy industry,

• 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 or increase the cost 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 manage our energy obligations, available supply and risks,

• delays or unforeseen cost escalations in our construction and development activities, or the inability to recover the carrying amount of our assets,

• availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs,

• increases in competition in energy supply markets as well as for transmission projects,

• changes in technology, such as distributed generation, storage and micro grids, and greater reliance on these technologies,

• changes in customer behaviors, including increases in energy efficiency, net-metering and demand response,

• adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in funding requirements,

• any equipment failures, accidents, severe weather events or other incidents that impact our ability to provide safe and reliable service to our customers, and any inability to obtain sufficient insurance coverage or recover insurance proceeds with respect to such events,

• acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses,

• delays in receipt of necessary permits and approvals for our construction and development activities,

• any inability to achieve, or continue to sustain, our expected levels of operating performance,

• changes in the cost of, or interruption in the supply of, fuel and other commodities necessary to the operation of our generating units,

• economic recessions,

• an inability to realize anticipated tax benefits or retain tax credits,

• challenges associated with recruitment and/or retention of a qualified workforce, and

• changes in the credit quality and the ability of lessees to meet their obligations under our domestic leveraged leases.

All of the forward-looking statements made in this report are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by management will be realized or even if realized, will have the expected consequences to, or effects on, us or our business prospects, financial condition or results of operations. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this report apply only as of the date of this report. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if internal estimates change, unless otherwise required by applicable securities laws.

The forward-looking statements contained in this report are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

From time to time, PSEG, PSE&G and PSEG Power release important information via postings on their corporate website at http://investor.pseg.com. Investors and other interested parties are encouraged to visit the corporate website to review new postings. The “Email Alerts” link at http://investor.pseg.com may be used to enroll to receive automatic email alerts and/or Really Simple Syndication (RSS) feeds regarding new postings.

Attachment 1

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ millions)

	Three Months Ended September 30, 2016
	PSEG			PSEG Enterprise/ Other (a)			PSE&G			PSEG Power
OPERATING REVENUES	$	2,450		$	(309	)	$	1,684		$	1,075
OPERATING EXPENSES
Energy Costs		866			(317	)		721			462
Operation and Maintenance		776			111			376			289
Depreciation and Amortization		231			8			137			86
Total Operating Expenses		1,873			(198	)		1,234			837
OPERATING INCOME (LOSS)		577			(111	)		450			238
Income from Equity Method Investments		3			—			—			3
Other Income and (Deductions)		39			1			21			17
Other-Than-Temporary Impairments		(5	)		—			—			(5	)
Interest Expense		(99	)		(3	)		(72	)		(24	)
INCOME (LOSS) BEFORE INCOME TAXES		515			(113	)		399			229
Income Tax Benefit (Expense)		(188	)		46			(144	)		(90	)
NET INCOME (LOSS)	$	327		$	(67	)	$	255		$	139
Reconciling Items Excluded from Net Income (Loss) (b)		117			86			—			31
OPERATING EARNINGS (non-GAAP)	$	444		$	19		$	255		$	170
Earnings Per Share
NET INCOME (LOSS)	$	0.64		$	(0.13	)	$	0.50		$	0.27
Reconciling Items Excluded from Net Income (Loss) (b)		0.24			0.17			—			0.07
OPERATING EARNINGS (non-GAAP)	$	0.88		$	0.04		$	0.50		$	0.34
	Three Months Ended September 30, 2015
	PSEG			PSEG Enterprise/ Other (a)			PSE&G			PSEG Power
OPERATING REVENUES	$	2,688		$	(174	)	$	1,766		$	1,096
OPERATING EXPENSES
Energy Costs		815			(292	)		740			367
Operation and Maintenance		746			92			391			263
Depreciation and Amortization		313			7			231			75
Total Operating Expenses		1,874			(193	)		1,362			705
OPERATING INCOME		814			19			404			391
Income from Equity Method Investments		3			—			—			3
Other Income and (Deductions)		33			—			22			11
Other-Than-Temporary Impairments		(30	)		—			—			(30	)
Interest Expense		(96	)		1			(67	)		(30	)
INCOME BEFORE INCOME TAXES		724			20			359			345
Income Tax Benefit (Expense)		(285	)		(9	)		(137	)		(139	)
NET INCOME	$	439		$	11		$	222		$	206
Reconciling Items Excluded from Net Income (b)		(36	)		—			—			(36	)
OPERATING EARNINGS (non-GAAP)	$	403		$	11		$	222		$	170
Earnings Per Share
NET INCOME	$	0.87		$	0.03		$	0.44		$	0.40
Reconciling Items Excluded from Net Income (b)		(0.07	)		—			—			(0.07	)
OPERATING EARNINGS (non-GAAP)	$	0.80		$	0.03		$	0.44		$	0.33

(a) Includes activities at Energy Holdings, PSEG Long Island and the Parent as well as intercompany eliminations.

(b) See Attachment 11 and 12 for details of items excluded from Net Income to compute Operating Earnings (non-GAAP).

Attachment 2

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ millions)

	Nine Months Ended September 30, 2016
	PSEG			PSEG Enterprise/ Other (a)			PSE&G			PSEG Power
OPERATING REVENUES	$	6,971		$	(877	)	$	4,746		$	3,102
OPERATING EXPENSES
Energy Costs		2,326			(1,134	)		1,979			1,481
Operation and Maintenance		2,215			298			1,110			807
Depreciation and Amortization		679			22			412			245
Total Operating Expenses		5,220			(814	)		3,501			2,533
OPERATING INCOME		1,751			(63	)		1,245			569
Income from Equity Method Investments		9			—			—			9
Other Income and (Deductions)		100			1			58			41
Other-Than-Temporary Impairments		(25	)		—			—			(25	)
Interest Expense		(288	)		(8	)		(214	)		(66	)
INCOME BEFORE INCOME TAXES		1,547			(70	)		1,089			528
Income Tax Benefit (Expense)		(562	)		39			(393	)		(208	)
NET INCOME (LOSS)	$	985		$	(31	)	$	696		$	320
Reconciling Items Excluded from Net Income (Loss) (b)		211			86			—			125
OPERATING EARNINGS (non-GAAP)	$	1,196		$	55		$	696		$	445
Earnings Per Share
NET INCOME (LOSS)	$	1.94		$	(0.06	)	$	1.37		$	0.63
Reconciling Items Excluded from Net Income (Loss) (b)		0.42			0.17			—			0.25
OPERATING EARNINGS (non-GAAP)	$	2.36		$	0.11		$	1.37		$	0.88
	Nine Months Ended September 30, 2015
	PSEG			PSEG Enterprise/ Other (a)			PSE&G			PSEG Power
OPERATING REVENUES	$	8,137		$	(943	)	$	5,234		$	3,846
OPERATING EXPENSES
Energy Costs		2,577			(1,268	)		2,176			1,669
Operation and Maintenance		2,170			251			1,171			748
Depreciation and Amortization		960			22			712			226
Total Operating Expenses		5,707			(995	)		4,059			2,643
OPERATING INCOME		2,430			52			1,175			1,203
Income from Equity Method Investments		10			(1	)		—			11
Other Income and (Deductions)		135			1			57			77
Other-Than-Temporary Impairments		(45	)		—			—			(45	)
Interest Expense		(291	)		6			(203	)		(94	)
INCOME BEFORE INCOME TAXES		2,239			58			1,029			1,152
Income Tax Benefit (Expense)		(869	)		(26	)		(398	)		(445	)
NET INCOME	$	1,370		$	32		$	631		$	707
Reconciling Items Excluded from Net Income (b)		(149	)		—			—			(149	)
OPERATING EARNINGS (non-GAAP)	$	1,221		$	32		$	631		$	558
Earnings Per Share
NET INCOME	$	2.70		$	0.07		$	1.24		$	1.39
Reconciling Items Excluded from Net Income (b)		(0.29	)		—			—			(0.29	)
OPERATING EARNINGS (non-GAAP)	$	2.41		$	0.07		$	1.24		$	1.10

(a) Includes activities at Energy Holdings, PSEG Long Island and the Parent as well as intercompany eliminations.

(b) See Attachment 11 and 12 for details of items excluded from Net Income to compute Operating Earnings (non-GAAP).

Attachment 3 

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Capitalization Schedule

(Unaudited, $ millions)

	September 30,			December 31,
	2016			2015
DEBT
Long-Term Debt*	$	10,697		$	9,561
Project Level, Non-Recourse Debt		—			7
Total Debt		10,697			9,568
STOCKHOLDERS’ EQUITY
Common Stock		4,928			4,915
Treasury Stock		(714	)		(671	)
Retained Earnings		9,480			9,117
Accumulated Other Comprehensive Loss		(218	)		(295	)
Total Common Stockholders’ Equity		13,476			13,066
Noncontrolling Interests - Equity Investments		—			1
Total Equity		13,476			13,067
Total Capitalization	$	24,173		$	22,635

* Includes current portion of Long-Term Debt

Attachment 4

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, $ millions)

	Nine Months Ended September 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	985		$	1,370
Adjustments to Reconcile Net Income to Net Cash Flows From Operating Activities		1,776			1,858
NET CASH PROVIDED BY OPERATING ACTIVITIES		2,761			3,228
NET CASH USED IN INVESTING ACTIVITIES		(3,054	)		(2,841	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		349			(518	)
Net Change in Cash and Cash Equivalents		56			(131	)
Cash and Cash Equivalents at Beginning of Period		394			402
Cash and Cash Equivalents at End of Period	$	450		$	271

Attachment 5

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Quarter-over-Quarter EPS Reconciliation

September 30, 2016 vs. September 30, 2015

(Unaudited)

* See Attachment 11 and 12 for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP).

Attachment 6

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Year-over-Year EPS Reconciliation

September 30, 2016 vs. September 30, 2015

(Unaudited)

* See Attachment 11 and 12 for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP).

Attachment 7

PUBLIC SERVICE ELECTRIC & GAS COMPANY

Retail Sales and Revenues

(Unaudited)

September 30, 2016

Electric Sales and Revenues

	Three Months Ended		Change vs. 2015			Nine Months Ended		Change vs. 2015
Sales (millions kWh)
Residential		4,924		7.2	%		10,919		-0.9	%
Commercial & Industrial		7,795		1.5	%		21,022		-1.5	%
Street Lighting		70		1.3	%		237		1.3	%
Interdepartmental		3		4.8	%		7		-1.2	%
Total		12,792		3.6	%		32,185		-1.3	%
Revenue ($ millions)
Residential	$	771		2.0	%	$	1,682		-5.4	%
Commercial & Industrial		543		-13.8	%		1,319		-18.8	%
Street Lighting		16		-5.8	%		50		-4.1	%
Other Operating Revenues*		166		5.1	%		503		9.9	%
Total	$	1,496		-4.2	%	$	3,554		-9.2	%
	Three Months Ended		Change vs. 2015			Nine Months Ended		Change vs. 2015
Weather Data
THI Hours - Actual		15,140		9.0	%		18,998		1.5	%
THI Hours - Normal		11,602					15,599

* Primarily sales of Non-Utility Generator energy to PJM and Transmission related revenues.

Attachment 8

PUBLIC SERVICE ELECTRIC & GAS COMPANY

Retail Sales and Revenues

(Unaudited)

September 30, 2016

Gas Sold and Transported

	Three Months Ended		Change vs. 2015			Nine Months Ended		Change vs. 2015
Sales (millions therms)*
Firm Sales
Residential Sales		88		-8.4	%		953		-18.4	%
Commercial & Industrial		94		-6.5	%		682		-15.2	%
Total Firm Sales		182		-7.5	%		1,635		-17.1	%
Non-Firm Sales
Commercial & Industrial		679		1.5	%		1,566		-3.7	%
Total Non-Firm Sales		679					1,566
Total Sales		861		-0.5	%		3,201		-11.0	%
Revenue ($ millions)
Residential Sales - Firm	$	31		-20.1	%	$	228		2.1	%
Commercial & Industrial - Firm Sales		15		4.2	%		128		-35.2	%
Non-Firm Sales		6		-37.1	%		19		-34.7	%
Other Operating Revenues**		43		2.0	%		130		0.6	%
Total	$	95		-9.3	%	$	505		-12.8	%
Gas Transported	$	93		-6.8	%	$	687		-7.5	%
	Three Months Ended		Change vs. 2015			Nine Months Ended		Change vs. 2015
Weather Data
Degree Days - Actual		17		NA			2,838		-20.2	%
Degree Days - Normal		30					3,065

* CSG rate included in non-firm sales

** Primarily Appliance Service.

Attachment 9

PSEG POWER LLC

Generation Measures*

(Unaudited)

	GWhr Breakdown						GWhr Breakdown
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Nuclear - NJ		4,151			5,393			13,878			15,249
Nuclear - PA		2,712			2,394			8,387			7,499
Total Nuclear		6,863			7,787			22,265			22,748
Fossil - Coal/Natural Gas - NJ**		257			72			198			542
Fossil - Coal - PA		1,190			1,108			3,138			3,853
Fossil - Coal - CT		46			12			96			600
Total Coal		1,493			1,192			3,432			4,995
Fossil - Oil & Natural Gas - NJ		4,234			4,160			10,089			10,932
Fossil - Oil & Natural Gas - NY		1,482			1,547			3,940			3,691
Fossil - Oil & Natural Gas - CT		38			32			30			122
Total Oil & Natural Gas		5,754			5,739			14,059			14,745
		14,110			14,718			39,756			42,488
	% Generation by Fuel Type						% Generation by Fuel Type
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Nuclear - NJ		29	%		37	%		35	%		36	%
Nuclear - PA		19	%		16	%		21	%		18	%
Total Nuclear		48	%		53	%		56	%		54	%
Fossil - Coal/Natural Gas - NJ**		2	%		0	%		1	%		1	%
Fossil - Coal - PA		9	%		8	%		8	%		9	%
Fossil - Coal - CT		0	%		0	%		0	%		1	%
Total Coal		11	%		8	%		9	%		11	%
Fossil - Oil & Natural Gas - NJ		30	%		28	%		25	%		26	%
Fossil - Oil & Natural Gas - NY		11	%		11	%		10	%		9	%
Fossil - Oil & Natural Gas - CT		0	%		0	%		0	%		0	%
Total Oil & Natural Gas		41	%		39	%		35	%		35	%
		100	%		100	%		100	%		100	%

* Excludes Solar and Kalaeloa

** Includes Pumped Storage. Pumped Storage accounted for <1% of total generation for the three and nine months ended September 30, 2016 and 2015. Generation includes natural gas fuel switching intervals.

Attachment 10

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Statistical Measures

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Weighted Average Common Shares Outstanding (millions)
Basic		505			505			505			505
Diluted		508			508			508			508
Stock Price at End of Period							$	41.87		$	42.16
Dividends Paid per Share of Common Stock	$	0.41		$	0.39		$	1.23		$	1.17
Dividend Yield								3.9	%		3.7	%
Book Value per Common Share							$	26.69		$	25.90
Market Price as a Percent of Book Value								157	%		165	%
Total Shareholder Return		-9.3	%		8.4	%		11.3	%		4.9	%

Attachment 11

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidated Operating Earnings (non-GAAP) Reconciliation

	Three Months Ended						Nine Months Ended
Reconciling Items	September 30,						September 30,
	2016			2015			2016			2015
	($ millions, Unaudited)
Net Income	$	327		$	439		$	985		$	1,370
(Gain) Loss on Nuclear Decommissioning Trust (NDT) Fund Related Activity, pre-tax (PSEG Power)		(4	)		24			4			14
(Gain) Loss on Mark-to-Market (MTM), pre-tax(a) (PSEG Power)		(58	)		(84	)		91			(98	)
Storm O&M, net of insurance recoveries, pre-tax (PSEG Power)		—			—			—			(172	)
Hudson/Mercer Early Retirement, pre-tax (PSEG Power)		114			—			114			—
Lease Related Activity, pre-tax (PSEG Enterprise/Other)		137			—			137			—
Income Taxes related to Operating Earnings (non-GAAP) reconciling items(b)		(72	)		24			(135	)		107
Operating Earnings (non-GAAP)	$	444		$	403		$	1,196		$	1,221
Fully Diluted Average Shares Outstanding (in millions)		508			508			508			508
	($ Per Share Impact - Diluted, Unaudited)
Net Income	$	0.64		$	0.87		$	1.94		$	2.70
(Gain) Loss on NDT Fund Related Activity, pre-tax (PSEG Power)		—			0.05			0.01			0.03
(Gain) Loss on MTM, pre-tax(a) (PSEG Power)		(0.11	)		(0.17	)		0.18			(0.19	)
Storm O&M, net of insurance recoveries, pre-tax (PSEG Power)		—			—			—			(0.34	)
Hudson/Mercer Early Retirement, pre-tax (PSEG Power)		0.22			—			0.22			—
Lease Related Activity, pre-tax (PSEG Enterprise/Other)		0.27			—			0.27			—
Income Taxes related to Operating Earnings (non-GAAP) reconciling items(b)		(0.14	)		0.05			(0.26	)		0.21
Operating Earnings (non-GAAP)	$	0.88		$	0.80		$	2.36		$	2.41

(a) Includes the financial impact from positions with forward delivery months.

(b) Income tax effect calculated at 40.85% statutory rate, except for lease related activity which is calculated at a combined leveraged lease effective tax rate of 37% and NDT related activity which is calculated at the 40.85% statutory rate plus a 20% tax on income (losses) from qualified NDT funds.

Attachment 12

PSEG Power Adjusted EBITDA (non-GAAP) Reconciliation

	Three Months Ended						Nine Months Ended
Reconciling Items	September 30,						September 30,
	2016			2015			2016			2015
	($ millions, Unaudited)
Net Income (Loss)	$	139		$	206		$	320		$	707
(Gain) Loss on NDT Fund Related Activity, pre-tax		(4	)		24			4			14
(Gain) Loss on MTM, pre-tax (a)		(58	)		(84	)		91			(98	)
Storm O&M, net of insurance recoveries, pre-tax		—			—			—			(172	)
Hudson/Mercer Early Retirement, pre-tax		114			—			114			—
Income Taxes related to Operating Earnings (non-GAAP) reconciling items(b)		(21	)		24			(84	)		107
Operating Earnings (non-GAAP)	$	170		$	170		$	445		$	558
Fossil Major Maintenance, pre-tax		10			10			39			111
Depreciation and Amortization, pre-tax (c)		83			76			244			228
Interest Expense, pre-tax (c) (d)		23			30			65			93
Income Taxes (c)		111			115			292			338
Adjusted EBITDA (non-GAAP)	$	397		$	401		$	1,085		$	1,328

(a) Includes the financial impact from positions with forward delivery months.

(b) Income tax effect calculated at 40.85% statutory rate, except for lease related activity which is calculated at a combined leveraged lease effective tax rate of 37% and NDT related activity which is calculated at the 40.85% statutory rate plus a 20% tax on income (losses) from qualified NDT funds.

(c) Excludes amounts related to Operating Earnings (non-GAAP) reconciling items.

(d) Net of capitalized interest.

PSEG Power Adjusted EBITDA (non-GAAP) Guidance - 2016 Adjustments	Full-Year 2016
	($ millions, unaudited)
Fossil Major Maintenance, pre-tax, estimate	~ $80
Depreciation and Amortization, pre-tax, estimate	~ $340
Interest Expense, pre-tax, estimate	~ $80
Income Taxes, estimate	$310 to $335

PSEG Enterprise/Other

Operating Earnings (non-GAAP) Reconciliation

	Three Months Ended					Nine Months Ended
Reconciling Items	September 30,					September 30,
	2016			2015		2016			2015
	($ millions, Unaudited)
Net Income (Loss)	$	(67	)	$	11	$	(31	)	$	32
Lease Related Activity, pre-tax		137			—		137			—
Income Taxes related to Operating Earnings (non-GAAP) reconciling items(a)		(51	)		—		(51	)		—
Operating Earnings (non-GAAP)	$	19		$	11	$	55		$	32

(a) Income tax effect calculated at a combined leveraged lease effective tax rate of 37%.

EX-99.1

Public Service Enterprise Group

PSEG Earnings Conference Call

3rd Quarter 2016

October 31, 2016

EXHIBIT 99.1

1

Forward-Looking Statements

Certain of the matters discussed in this report about our and our subsidiaries' future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and

all other statements that are not purely historical constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking

statements

are

subject

to

risks

and

uncertainties,

which

could

cause

actual

results

to

differ

materially

from

those

anticipated.

Such

statements

are

based

on

management's

beliefs

as

well

as

assumptions made by and information currently available to management. When used herein, the words “anticipate,” “intend,” “estimate,” “believe,” “expect,” “plan,” “should,” “hypothetical,”

“potential,” “forecast,” “project,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ are often

presented with the forward-looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us

herein are discussed in filings we make with the United States Securities and Exchange Commission (SEC) including our Annual Report on Form 10-K and subsequent reports on Form 10-Q and

Form 8-K and available on our website: http://www.pseg.com. These factors include, but are not limited to:

•

adverse changes in the demand for or ongoing low pricing of the capacity and energy that we sell into wholesale electricity markets,

•

adverse changes in energy industry law, policies and regulations, including market structures and transmission planning,

•

any inability of our transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators, including prudency reviews,

disallowances

and changes in authorized returns,

•

any deterioration in our credit quality or the credit quality of our counterparties,

•

changes in federal and state environmental regulations and enforcement that could increase our costs or limit our operations,

•

adverse

outcomes

of

any

legal,

regulatory

or

other

proceeding,

settlement,

investigation

or

claim

applicable

to

us

and/or

the

energy

industry,

•

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 or increase the cost 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 manage our energy obligations, available supply and risks,

•

delays or unforeseen cost escalations in our construction and development activities, or the inability to recover the carrying amount of our assets,

•

availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs,

•

increases in competition in energy supply markets as well as for transmission projects,

•

changes in technology, such as distributed generation, storage and micro grids, and greater reliance on these technologies,

•

changes in customer behaviors, including increases in energy efficiency, net-metering and demand response,

•

adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in funding requirements,

•

any equipment failures, accidents, severe weather events or other incidents that impact our ability to provide safe and reliable service to our customers, and any inability to obtain sufficient

insurance coverage or recover insurance proceeds with respect to such events,

•

acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses,

•

delays in receipt of necessary permits and approvals for our construction and development activities,

•

any inability to achieve, or continue to sustain, our expected levels of operating performance,

•

changes in the cost of, or interruption in the supply of, fuel and other commodities necessary to the operation of our generating units,

•

economic recessions,

•

an inability to realize anticipated tax benefits or retain tax credits,

•

challenges associated with recruitment and/or retention of a qualified workforce, and

•

changes in the credit quality and the ability of lessees to meet their obligations under our domestic leveraged leases.

All of the forward-looking statements made in this report are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by management will be

realized or even if realized, will have the expected consequences to, or effects on, us or our business prospects, financial condition or results of operations. Readers are cautioned not to place

undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this report apply only as of the date of this report. While we may elect

to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if internal estimates change, unless otherwise required by applicable securities laws.

The

forward-looking

statements

contained

in

this

report

are

intended

to

qualify

for

the

safe

harbor

provisions

of

Section

27A

of

the

Securities

Act

of

1933,

as

amended,

and

Section

21E

of

the  Securities Exchange Act of 1934, as amended.

2

GAAP Disclaimer

PSEG presents Operating Earnings and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in addition to its Net Income reported in

accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings and Adjusted EBITDA are

non-GAAP financial measures

that differ from Net Income. Operating Earnings exclude gains or losses associated with Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting,

and material one-time items.  Adjusted EBITDA excludes the same items as our Operating Earnings measure as well as income tax expense, interest expense,

depreciation and amortization and major maintenance expense costs at Power’s fossil generation facilities. The last two slides in this presentation (Slides A and B)

include a list of items excluded from Net Income to reconcile to Operating Earnings and Adjusted EBITDA with a reference to that

slide included on each of the slides

where the non-GAAP information appears.

Management uses Operating Earnings in its internal analysis, and in communications with investors and analysts, as a consistent measure for comparing PSEG’s

financial performance to previous financial results. Management believes Adjusted EBITDA is useful to investors and other users of our financial statements in

evaluating operating performance because it provides them with an additional tool to compare business performance across companies and across periods.

Management also believes that Adjusted EBITDA is widely used by investors to measure operating performance without regard to items such as income tax expense,

interest expense, depreciation and amortization and major maintenance expense at Power’s fossil generation facilities, which can

vary substantially from company to

company depending upon, among other things, the book value of assets, capital structure, whether assets were constructed or acquired and accounting methods.

Adjusted EBITDA also allows investors and other users to assess the underlying financial performance of our fleet before management’s decision to deploy capital.

The presentation of Operating Earnings and Adjusted EBITDA is intended to complement, and should not be considered an alternative to, the presentation of Net

Income, which is an indicator of financial performance determined in accordance with GAAP. In addition, Operating Earnings and Adjusted EBITDA as presented in

this release may not be comparable to similarly titled measures used by other companies.

Due to the forward looking nature of Operating Earnings and Adjusted EBITDA guidance, PSEG is unable to reconcile these non-GAAP financial measures to the most

directly comparable GAAP financial measure.  Management is unable to project certain reconciling items, in particular MTM and NDT gains (losses), for future periods

due to market volatility.

These

materials

and

other

financial

releases

can

be

found

on

the

PSEG

website

at

www.pseg.com

,

under

the

investor

tab.

From

time

to

time,

PSEG,

PSE&G

and

PSEG

Power

release

important

information

via

postings

on

their

corporate

website

at

http://investor.pseg.com.

Investors

and

other

interested

parties

are

encouraged

to

visit

the

corporate

website

to

review

new

postings.

The

“email

alerts”

link

at

http://investor.pseg.com

may

be

used

to

enroll

to

receive

automatic

email

alerts

and/or

really simple syndication (RSS) feeds regarding new postings at  http://investor.pseg.com/rss

.

PSEG

2016 Q3 Review

Ralph Izzo

Chairman, President and Chief Executive Officer

4

Q3 Results Summary –

Strong quarterly results

Quarter ended September 30        

* See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP).

$ millions (except EPS)

2016

2015

Net Income

$  327 

$  439

Reconciling Items

117

(36)

Operating Earnings (non-GAAP)*

$   444 

$  403

EPS from Net Income

$  0.64

$  0.87

EPS from Operating Earnings (non-GAAP)*

$  0.88

$  0.80

5

Year to Date Results

Nine months ended September 30        

* See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP).

$ millions (except EPS)

2016

2015

Net Income

$  985 

$  1,370

Reconciling Items

211

(149)

Operating Earnings (non-GAAP)*

$  1,196 

$  1,221

EPS from Net Income

$  1.94

$  2.70

EPS from Operating Earnings (non-GAAP)*

$  2.36

$  2.41

6

PSEG –

Q3 2016 Highlights

Operating Results in Q3

Net Income of $0.64 vs. $0.87 per share in Q3 2015

Operating Earnings (non-GAAP) of $0.88 vs. $0.80 per share in Q3 2015* 

Increased earnings contribution from PSE&G’s investment in Transmission

Updating

2016

Operating

Earnings

(non-GAAP)

guidance

to

$2.80

-

$2.95

per

share

Operating Review

PSEG Power generation met demand of the hottest summer weather in our 37 years of data

Returned Salem units in late July following refueling and baffle bolt repairs at Unit 1 and

transformer issues at Unit 2

PSE&G maintained high system reliability throughout extreme summer conditions

PSEG Disciplined Capital Investment

PSE&G identified >$600 million year to date of additional capital opportunities through 2020

Recent Solar 4 All Extension II settlement to invest $80 million over 3 years

Power’s construction of Keys/Sewaren/Bridgeport Harbor CCGTs continue on schedule and on

budget

Market developments

PSEG Power announced retirement of the Hudson and Mercer generating stations (totaling ~1,250

MW) planned for mid-2017 expected to improve its cash flow and return profile

Energy Holdings recorded an impairment of $86 million (after-tax) related to the NRG REMA, LLC

leveraged leases residual value

* See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP).

7

$2.80 -

$2.95E

PSEG Updating 2016 Full-Year Guidance 

$2.76

* See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP).  E = Estimate.                                

$2.91

Operating

Earnings*

(non-GAAP)

Guidance

Strong third quarter results were not sufficient to offset the lack of a winter

2014

2015

2016 Guidance

PSEG

2016 Q3 Operating Company Review

Dan Cregg

EVP and Chief Financial Officer

9

PSEG EPS Reconciliation –

Q3 2016 versus Q3 2015

Q3 2016      

Net

Income

Q3 2015       

Net

Income

PSEG

Power

PSE&G

Enterprise/

Other

* See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP).

Re-Contracting/

Lower Prices/Gas

Volumes  (0.02)

Lower Volume

(0.01)

O&M  0.03

Interest  0.01

D&A  (0.01)

Other  0.01

Transmission

0.03

Distribution

Margin  0.02

Weather  0.01

Distribution O&M

and D&A  (0.02)

Taxes and

Other  0.02

Q3 2015

Operating

Earnings

(non-GAAP)*

Q3 2016       

Operating

Earnings

(non-GAAP)*

PSEG-LI

and Other

$0.87

0.06

0.01

0.01

$0.80

$0.88

$0.64

1.00

0.80

0.60

0.40

0.20

0.00

10

0.00

0.50

1.00

1.50

2.00

2.50

3.00

PSEG EPS Reconciliation –

YTD 2016 versus YTD 2015

YTD 2016        YTD 2016       

Operating

Earnings

(non-GAAP)*

YTD 2015       

Net

Income

Re-Contracting/

Lower Prices/

Gas Volumes

(0.11)

Lower Gas Send-

Out and Fixed Cost

Recovery  (0.14)

Capacity  (0.05)

Volume  (0.05)

O&M  0.15

Interest  0.03

D&A  (0.01)

Absence of 2015

Tax Credits and

Other  (0.04)

PSEG

Power

Transmission

0.09

Distribution

Margin  0.02

Weather  (0.01)

Distribution

O&M and

D&A  (0.05)

Taxes

and Other 0.08

PSE&G

Enterprise/

Other

PSEG-LI,

Taxes and

Other

* See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP).

Net

Income

YTD 2015       

Operating

Earnings

(non-GAAP)*

$2.70

0.13

(0.22)

0.04

$2.41

$2.36

$1.94

PSE&G

2016 Q3 Review

12

PSE&G –

Q3 Summary of Results

$ millions (except EPS)

Q3 2016

Q3 2015

Variance

Operating Revenues

$  1,684

$  1,766

$  (82)

Operating Expenses

Energy Costs

721

740

(19)

Operation & Maintenance

376

391

(15)

Depreciation & Amortization

137

231

(94)

Total Operating Expenses

1,234

1,362

(128)

Net Income

$  255

$  222

$  33

EPS from Net Income

$  0.50

$  0.44

$  0.06

PSEG Operating Earnings (non-GAAP) do not include any adjustments related to PSE&G’s operations.

13

$0.44

0.06

0.02

$0.50

(0.02)

0.00

0.15

0.30

0.45

0.60

PSE&G EPS Reconciliation –

Q3 2016

versus Q3 2015

Q3 2016      

Net

Income

Q3 2015    

Net

Income

Transmission 0.03

Electric Demand

and Volume  0.02

Weather  0.01

O&M  (0.01)

D&A  (0.01)

Taxes  0.03

Other  (0.01)

Continued  investment in system reliability is a driver of growth

14

PSE&G –

Monthly Summer Weather Data

6,068

6,254

2,818

5,548

5,106

3,242

5,151

4,521

1,930

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

July

August

September

2016

2015

Normal

2016

vs.

2015

vs.

Normal

PSE&G

Monthly

Temperature

Humidity

Index

(THI)

Q3 2016 temperature-humidity index was ~9%

higher than Q3 2015 and ~30% higher than normal

15

PSE&G –

Q3 Operating Highlights

Solar 4 All Extension II settlement reached with BPU Staff and Division of Rate Counsel to invest

$80 million over 3 years to develop 33 MWs of grid-connected, landfill and brownfield solar

Proposal filed with the BPU for NJ Transit investment partnership to develop a new $270 million substation

FERC Formula Rate filing submitted for ~$121 million in increased annual transmission revenue for

new rates effective January 2017

PSE&G

lowered

residential

gas

rates

for

the

7

th

straight

year

on

10/1;

since

2009,

average

residential

heating bills have declined by 51%

PSE&G made ~$2.1 billion of capital expenditures in the YTD period ended September 30, as part

of its planned spend of ~$3 billion for the full year

Maintaining

PSE&G’s

forecast

of

2016

full-year

Net

Income

at

$900

-

$935

million

Growth in transmission revenues added $0.03 per share over Q3 2015

Q3 2016 electric sales up ~4% on weather that was 9% warmer than Q3 2015 and 30% warmer than

normal; Q3 was the hottest in the last 37 years of weather data

Weather normalized electric sales advanced 0.1% in Q3 and were down (0.8%) for the YTD period

O&M remains under control

Operations

Regulatory and Market

Environment

Financial

PSEG Power

2016 Q3 Review

17

PSEG Power –

Q3 Summary of Results

$ millions (except EPS)

Q3 2016

Q3 2015

Variance

Operating Revenues

$  1,075

$  1,096

$  (21)

Net Income

139

206

(67)

Reconciling Items

31

(36)

67

Operating Earnings (non-GAAP)*

$  170

$  170

$  -

EPS from Net Income

$  0.27

$  0.40

$  (0.13)

EPS from Operating Earnings (non-GAAP)*

$  0.34

$  0.33

$  0.01

* See

Slide

A

for

Items

excluded

from

Net

Income

to

reconcile

to

Operating

Earnings

(non-GAAP).

18

$0.40

$0.33

0.03

0.01

$0.34

(0.03)

$0.27

0.00

0.10

0.20

0.30

0.40

0.50

Re-Contracting/

Lower Prices 

(0.02)

Lower  Volume 

(0.01)

PSEG Power EPS Reconciliation –

Q3 2016 versus Q3 2015

O&M

* See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP).

Other

Q3 2016       

Net

Income

Q3 2015       

Net

Income

Q3 2015       

Operating

Earnings

(non-GAAP)*

Q3 2016       

Operating

Earnings

(non-GAAP)*

19

PSEG Power –

Generation Measures

7,787

6,863

1,192

1,493

5,739

5,754

0

7,500

15,000

2015

2016

Quarter

ended

September

30

Total Nuclear

Total Coal*

Oil & Natural Gas

* Includes figures for Pumped Storage. Includes Hudson and Mercer when run on gas.

PSEG

Power

–

Generation

(GWh)

14,718

14,110

Quarter

ended

September

30

PSEG

Power

–

Capacity

Factors

(%)

2015

2016

Combined Cycle

PJM and NY

76.2%

73.6%

Coal

NJ (Coal/Gas)

3.7%

11.1%

PA

65.1%

69.8%

CT

1.3%

5.4%

Nuclear

95.4%

80.2%

20

PSEG Power –

Generation Measures

22,748

22,265

4,995

3,432

14,745

14,059

0

15,000

30,000

45,000

2015

2016

Nine

Months

ended

September

30

* Includes figures for Pumped Storage.  Includes Hudson and Mercer when run on gas. 

PSEG

Power

–

Generation

(GWh)

42,488

39,756

Nine

Months

ended

September

30

PSEG

Power

–

Capacity

Factors

(%)

2015

2016

Combined Cycle

PJM and NY

64.6%

62.5%

Coal*

NJ (Coal/Gas)

7.5%

3.4%

PA

76.3%

61.9%

CT

23.8%

3.8%

Nuclear

92.2%

87.5%

Total Nuclear

Total Coal*

Oil & Natural Gas

21

PSEG Power –

Fuel Costs

Quarter ended

September 30

($ millions)

2015

2016

Coal

27

29

Oil & Gas

94

83

Total Fossil

121

112

Nuclear

56

49

Total Fuel Cost

177

161

Total Generation

(GWh)

14,718

14,110

$ / MWh

12

11

PSEG

Power

–

Fuel

Costs

Nine months ended

September 30

($ millions)

2015

2016

Coal

139

78

Oil & Gas

423

215

Total Fossil

562

293

Nuclear

162

154

Total Fuel Cost

724

447

Total Generation

(GWh)

42,488

39,756

$ / MWh

17

11

22

PSEG Power –

Gross Margin Performance

Capacity pricing and MWs were comparable year-over-year

Lack of pipeline take away capacity kept pressure on local natural gas

and power prices during a summer that exceeded last year’s hot weather

Regional Performance

Region

Q3 2016 

Gross

Margin ($M)

2016 Performance

PJM

$551

Lower hedge prices partially offset

by lower costs to serve

New

England

$13

Higher prices supported increased

volume

New York

$25

Lower volumes offset higher prices

$0

$25

$50

2014

2015

2016

PSEG Power Gross Margin ($/MWh)

$42

$42

$40

Quarter ended

September 30

$0

$25

$50

2014

2015

2016

Nine months ended

September 30

$43

$41

$44

23

Hedging Update…

Contracted Energy*

* Hedge percentages and prices as of September 30, 2016.  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.

**Volumes

reflect

rounding.

Volume TWh

8

35

34

Base Load

% Hedged

100%

100%

45-50%

(Nuclear and Base Load Coal)

Price $/MWh

$48

$47

$45

Volume TWh

4

17

22

Intermediate Coal, Combined

% Hedged

25-30%

0-5%

0%

Cycle, Peaking

Price $/MWh

$48

$47

-

Volume TWh

11-12

51-53

56-58

Total

% Hedged

75-80%

65-70%

25-30%

Price $/MWh

$48

$47

$45

Oct-Dec

2016

2017

2018

Early retirement of the Hudson and Mercer generating stations totaling ~1,250 MWs in June

2017 resulted in one-time charges in 3Q of $67 million (after-tax) covering impairments and

closing costs; remaining capital cost will be depreciated from Q4 2016 through first-half 2017

24

PSEG Power –

Q3 Operating Highlights

Q3 output was down 4% vs. Q3 2015, YTD output down 6% from extended nuclear outages

at Salem 1 and 2

CCGT capacity factor of 74% in Q3, YTD CCGT capacity factor of 63%

Nuclear capacity factor of 80% in Q3, YTD nuclear capacity factor of 88%

Updating PSEG Power’s full-year 2016 Operating Earnings (non-GAAP) guidance to

$460 -

$500 million from $460 -

$525 million; and full-year 2016 Adjusted EBITDA

(non-GAAP) guidance to $1.270 -

$1.335 billion from $1.270 -

$1.375 billion

Power’s total debt as a percentage of capital at September 30 was 28%

Operations

Regulatory and Market

Environment

Financial

PSEG

26

PSEG Financial Highlights

Updating

full-year

2016

Operating

Earnings

(non-GAAP)

guidance

to

$2.80

-

$2.95

from $2.80 -

$3.00 per share

Strong third quarter results were not sufficient to offset the lack of a winter

Focused on meeting customer needs for clean, reliable, efficient delivery of energy

Infrastructure Spend

PSE&G capital spending for 2016 expected to top $3 billion

Keys, Sewaren and Bridgeport Harbor CCGT construction is on schedule and on budget

PSE&G has identified more than $600 million year to date of additional infrastructure spend over

the current capital spending plan of $12 billion in the 2016-2020 period

Financial position remains strong

Positive cash from Power and increasing cash flow from operations at PSE&G supports dividend

growth and funds capital spending program without the need to issue equity

Debt as a percentage of capitalization was 45% at September 30

Announced retirement of Hudson and Mercer generating stations (totaling ~1,250 MW) planned

for mid-2017 expected to improve Power’s cash flow and return profile

APPENDIX

28

PSEG 2016 Operating Earnings Guidance -

By Subsidiary

$ millions (except EPS)

2016E

2015

PSE&G (Net Income)

$900 -

$935

$787

PSEG Power*

$460 -

$500

$653

PSEG Enterprise/Other*

$65 -

$65

$36

Operating Earnings (non-GAAP)*

$1,425 -

$1,500

$1,476

Operating EPS (non-GAAP)*

$2.80 -

$2.95E

$2.91

Segment Operating Earnings Guidance and Prior Results

(non-GAAP, except as noted)*

$ millions

2016E

2015

PSEG Power

$1,270 -

$1,335

$1,563

PSEG Power Adjusted EBITDA (non-GAAP)*

* See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP) and Slide B for Items excluded from Net Income to

reconcile to Operating Earnings (non-GAAP) and Adjusted EBITDA (non-GAAP).  E=Estimate

PSEG Liquidity as of September 30, 2016

29

A

Items Excluded from Net Income to Reconcile to Operating Earnings

(Non-GAAP)

Please see Slide 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs

from Net Income.

2016

2015

2016

2015

2015

2014

Net Income

327

$         

439

$      

985

$         

1,370

$    

1,679

$      

1,518

$    

(Gain) Loss on Nuclear Decommissioning Trust (NDT)

Fund Related Activity, pre-tax (PSEG Power)

(4)

24

4

14

(24)

(138)

(Gain) Loss on Mark-to-Market (MTM), pre-tax

(a)

(PSEG Power)

(58)

(84)

91

(98)

(157)

(111)

Storm O&M, net of insurance recoveries, pre-tax (PSEG Power)

-

-

-

(172)

(172)

27

Hudson/Mercer Early Retirement, pre-tax (PSEG Power)

114

-

114

-

-

-

Lease Related Activity, pre-tax (PSEG Enterprise/Other)

137

-

137

-

-

-

Income Taxes related to Operating Earnings (non-GAAP) reconciling items

(b)

(72)

24

(135)

107

150

104

Operating Earnings (non-GAAP)

444

$         

403

$      

1,196

$      

1,221

$    

1,476

$      

1,400

$    

Fully Diluted Average Shares Outstanding (in millions)

508

508

508

508

508

508

Net Income

0.64

$        

0.87

$     

1.94

$        

2.70

$     

3.30

$        

2.99

$     

(Gain) Loss on NDT Fund Related Activity, pre-tax (PSEG Power)

-

0.05

0.01

0.03

(0.05)

(0.27)

(Gain) Loss on MTM, pre-tax

(a)

(PSEG Power)

(0.11)

(0.17)

0.18

(0.19)

(0.31)

(0.22)

Storm O&M, net of insurance recoveries, pre-tax (PSEG Power)

-

-

-

(0.34)

(0.34)

0.05

Hudson/Mercer Early Retirement, pre-tax (PSEG Power)

0.22

-

0.22

-

-

-

Lease Related Activity, pre-tax (PSEG Enterprise/Other)

0.27

-

0.27

-

-

-

Income Taxes related to Operating Earnings (non-GAAP) reconciling items

(b)

(0.14)

0.05

(0.26)

0.21

0.31

0.21

Operating Earnings (non-GAAP)

0.88

$        

0.80

$     

2.36

$        

2.41

$     

2.91

$        

2.76

$     

(a) Includes the financial impact from positions with forward delivery months.

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidated Operating Earnings (non-GAAP) Reconciliation

(b) Income tax effect calculated at 40.85% statutory rate, except for lease related activity which is calculated at a combined leveraged lease effective tax rate of 37% and NDT

related activity which is calculated at the 40.85% statutory rate plus a 20% tax on income (losses) from qualified NDT funds.

Year-Ended

September 30,

December 31,

Nine Months Ended

September 30,

Three Months Ended

Reconciling Items

($ millions, Unaudited)

($ Per Share Impact - Diluted, Unaudited)

B

Items Excluded from Net Income to Reconcile to Adjusted EBITDA

(non-GAAP) and Operating Earnings (non-GAAP)

Please see Slide 2 for an explanation of PSEG’s use of Operating Earnings and Adjusted EBITDA as non-GAAP financial

measures and how they differ from Net Income.

2016

2015

2016

2015

2015

Net Income (Loss)

139

$         

206

$      

320

$         

707

$      

856

$         

(Gain) Loss on NDT Fund Related Activity, pre-tax

(4)

24

4

14

(24)

(Gain) Loss on MTM, pre-tax

(a)

(58)

(84)

91

(98)

(157)

Storm O&M, net of insurance recoveries, pre-tax

-

-

-

(172)

(172)

Hudson/Mercer Early Retirement, pre-tax

114

-

114

-

-

Income Taxes related to Operating Earnings (non-GAAP) reconciling items

(b)

(21)

24

(84)

107

150

Operating Earnings (non-GAAP)

170

$         

170

$      

445

$         

558

$      

653

$         

Fossil Major Maintenance, pre-tax

10

10

39

111

128

Depreciation and Amortization, pre-tax

(c)

83

76

244

228

301

Interest Expense, pre-tax

(c) (d)

23

30

65

93

120

Income Taxes

(c)

111

115

292

338

361

Adjusted EBITDA (non-GAAP)

397

$         

401

$      

1,085

$      

1,328

$    

1,563

$      

(a) Includes the financial impact from positions with forward delivery months.

(c) Excludes amounts related to Operating Earnings (non-GAAP) reconciling items.

(d) Net of capitalized interest.

Nine Months Ended

September 30,

($ millions, Unaudited)

(b) Income tax effect calculated at 40.85% statutory rate, except for lease related activity which is calculated at a combined leveraged lease effective tax rate of 37% and NDT

related activity which is calculated at the 40.85% statutory rate plus a 20% tax on income (losses) from qualified NDT funds.

PSEG Power Adjusted EBITDA (non-GAAP) Reconciliation

Three Months Ended

Year Ended

December 31,

Reconciling Items

September 30,

2016

2015

2016

2015

Net Income (Loss)

(67)

$         

11

$       

(31)

$         

32

$       

Lease Related Activity, pre-tax

137

-

137

-

Income Taxes related to Operating Earnings (non-GAAP) reconciling items

(a)

(51)

-

(51)

-

Operating Earnings (non-GAAP)

19

$          

11

$       

55

$          

32

$       

(a) Income tax effect calculated at a combined leveraged lease effective tax rate of 37%.

($ millions, Unaudited)

Operating Earnings (non-GAAP) Reconciliation

Reconciling Items

Three Months Ended

Nine Months Ended

September 30,

September 30,

PSEG Enterprise/Other