PUBLIC SERVICE ELECTRIC & GAS CO - FORM 8-K - EX-99

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8-K - FORM 8-K - PUBLIC SERVICE ELECTRIC & GAS CO	d495947d8k.htm

PSEG

CHAIRMAN, PRESIDENT AND

CHIEF EXECUTIVE OFFICER

Caroline Dorsa

EXECUTIVE VICE PRESIDENT AND

CHIEF FINANCIAL OFFICER

Kathleen Lally

VICE PRESIDENT,

INVESTOR RELATIONS

Ralph Izzo

EXHIBIT 99

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 the 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 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,

•

any equipment failures, accidents, severe weather events or other incidents that

impact our ability to provide safe and reliable service to our customers,

•

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 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

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 slide in this presentation 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.

2013 Operating Earnings Guidance

$2.74

$2.44

$2.25 -

$2.50 E

2011 Operating Earnings*

2012 Operating Earnings*

2013 Guidance

* SEE PAGE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING

OPERATIONS TO RECONCILE TO OPERATING EARNINGS. E = ESTIMATE.

2013 Operating Earnings

*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.

Investment in the

regulated business

has changed the

earnings mix

Our 2009-2013

investment focus has

brought us to a 50/50

mix for 2013

PSE&G’s 2013-2017

Energy Strong Program

and ongoing transmission

investments will support

continued growth in

PSE&G’s earnings

Percent of Operating Earnings Contribution by Subsidiary

PSE&G

Power

Other

$2.74

$2.44

$2.25 -$2.50E

$3.09

$3.12

69%

61%

52%

47%

76%

20%

27%

38%

43%

50%

2013E

2012

2011

2010

2009

PSE&G’s 2013 operating earnings

is benefiting from transmission growth and

cost containment initiatives

E= ESTIMATE

*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS TO RECONCILE TO

OPERATING EARNINGS.

2013 guidance in same range as 2012

PSEG Operating Earnings

$ Millions (except EPS)

2013E

PSEG Power

$535 -

$600

PSE&G

$580 -

$635

PSEG Energy Holdings/Parent

$25 -

$35

Operating Earnings*

$1,140 -

$1,270

2013 Earnings Guidance

$2.25

$2.50

E = ESTIMATE

*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS TO RECONCILE TO OPERATING

EARNINGS.

102

PSEG Summary

•

Operating

Earnings

Guidance

for

2013

$2.25

$2.50

per

with earnings mix shifting to 50% regulated

•

Double digit operating earnings growth at PSE&G starting in 2013,

and continuing through 2015 driven by transmission investments

and approved programs

•

Power’s continued focus on operational excellence, market expertise

and financial strength reduces risk in low price environment

•

Strong Balance Sheet and Cash Flow support full capital program

without the need for equity

•

Long history of returning cash to the shareholder through the common

dividend, with opportunity for further growth

104

Full-year Operating Earnings by

Subsidiary

Operating Earnings

Earnings per Share

$ millions (except EPS)

2012

2011

2012

2011

PSEG Power

$ 644

$ 845

$ 1.27

$ 1.67

PSE&G

528

521

1.04

1.03

PSEG Energy Holdings/

Enterprise

0.13

0.04

Operating Earnings*

$ 1,236

$ 1,389

$ 2.44

$ 2.74

Twelve Months ended December 31

•See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

105

$2.74

.01

.09

$2.44

(.40)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

PSEG EPS Reconciliation –

Full-year

2012 versus Full-year 2011

Lower Pricing (.40)

Lower Volume (.03)

O&M .05

Financing Costs .03

Lower

Coal Sales

& Other (.05)

Transmission .10

Distribution (.03)

Non-Storm O&M (.09)

Storm (.02)

Weather .01

D&A (.03)

Tax

Settlement & Other .04

Other Income

(Including AFUDC) .03

2012

Operating

Earnings*

2011

Operating

Earnings*

PSEG Power

PSE&G

PSEG Energy

Holdings/

Enterprise

Tax

Settlement .08

Solar

Investments .02

Lower Lease

Revenues &

Other (.01)

* See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.

Items Excluded from Income from

Continuing Operations to Reconcile to Operating Earnings

PLEASE SEE PAGE 4 FOR AN EXPLANATION OF PSEG’S USE OF OPERATING EARNINGS

AS A NON-GAAP FINANCIAL MEASURE AND HOW IT DIFFERS FROM NET INCOME.

2012

2011

2010

2009

2008

Earnings

Impact

Millions)

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity (PSEG Power)

(71)

Gain (Loss) on Mark-to-Market (MTM) (PSEG Power)

(10)

107

(1)

(11)

Lease Transaction Activity (Energy Holdings)

(173)

(490)

Storm O&M (PSEG Power)

(39)

Market Transition Charge Refund (PSE&G)

(72)

Gain (Loss) on Asset Sales and Impairments (Energy Holdings)

(13)

Total Pro-forma adjustments

(27)

(560)

Fully Diluted Average Shares Outstanding (in Millions)

507

508

Per

Impact

(Diluted)

Gain (Loss) on NDT Fund Related Activity (PSEG Power)

0.10

0.09

0.02

(0.14)

Gain (Loss) on MTM (PSEG Power)

(0.02)

0.21

(0.02)

0.03

Lease TransactionActivity (Energy Holdings)

0.07

(0.34)

0.05

(0.96)

Storm O&M (PSEG Power)

(0.08)

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

0.07

0.03

(0.05)

0.05

(1.10)

For the Year Ended

December 31,

Reconciling

Items

Excluded

from

Continuing

Operations

Compute

Operating

Earnings

(Unaudited)

Pro-forma Adjustments, net of tax

PUBLIC SERVICE ELECTRIC & GAS CO - FORM 8-K - EX-99 - March 5, 2013

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