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| 8-K - FORM 8-K - PUBLIC SERVICE ELECTRIC & GAS CO | d264647d8k.htm |
 PSEG
Public
Service
Enterprise
Group
Southeast Investor Meetings
December 5-6, 2011
Exhibit 99 |
 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
“will”,
“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 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, •
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), 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.
3 |
 Outlook
for 2011 Operating Earnings at Upper End of Range
* See pages 60 and 61 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. $2.75E
$2.50E
Strong 9-month results support full-year 2011 EPS at upper end of
guidance. $2.27
Operating
EPS
YTD
Actual
7
$3.12
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
2010 Operating Earnings*
2011E Earnings Guidance* |
 1,408
1,188
453
406
571
396
ICAP
UCAP
The NJ DEP is considering an extension to the permits
of certain High Energy Demand Day (HEDD) units in
the state…
PSEG
2,432
Others
1,482
New Jersey HEDD Capacity
ICAP MW*
PSEG Power HEDD Capacity
MW*
…
which will affect the timing of retirement of the water-injected units.
Convert to Gas
Operations
Water-injection;
Retire May 2015 or
extend to 2017
Uncontrolled;
Retire May 2015**
*Excludes PSEG’s Hudson 1 unit (355MW) which is being retired in 2011.
**Replacing 250 MW ICAP with 270 MW of new peaking in 2012 at Kearny. ***PJM
notified of planned retirement of 283 MW (ICAP), representing 183 MW (UCAP).
2,432
1,990
UCAP is the capacity used for PJM’s RPM auction
***
***
29 |
 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 61 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. 57 |
 Items
Excluded from Income from Continuing Operations to Reconcile to Operating
Earnings 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.
60
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)
7
$
10
$
49
$
30
$
Gain (Loss) on Mark-to-Market (MTM) (PSEG Power)
8
16
16
28
Lease Transaction Reserves (Energy Holdings)
(170)
-
(170)
-
Market Transition Charge Refund (PSE&G)
-
-
-
(72)
Total Pro-forma adjustments
(155)
$
26
$
(105)
$
(14)
$
Fully Diluted Average Shares Outstanding (in Millions)
507
507
507
507
Per
Share
Impact
(Diluted)
Gain (Loss) on NDT Fund Related Activity (PSEG Power)
0.01
$
0.02
$
0.10
$
0.06
$
Gain (Loss) on MTM (PSEG Power)
0.02
0.03
0.03
0.05
Lease Transaction Reserves (Energy Holdings)
(0.34)
-
(0.34)
-
Market Transition Charge Refund (PSE&G)
-
-
-
(0.14)
Total Pro-forma adjustments
(0.31)
$
0.05
$
(0.21)
$
(0.03)
$
September 30,
September 30,
For the Three Months Ended
For the Nine Months Ended
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciling
Items
Excluded
from
Continuing
Operations
to
Compute
Operating
Earnings
(Unaudited) |
 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.
Items Excluded from Income from Continuing
Operations to Reconcile to Operating Earnings
61
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 |