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| 8-K - FORM 8-K - PUBLIC SERVICE ENTERPRISE GROUP INC | d713426d8k.htm |
 Forward-Looking Statement
2
Certain of the matters discussed in this communication 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: •
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, and any inability to obtain sufficient
coverage or recover proceeds of insurance with respect to such events,
•
cybersecurity attacks or intrusions that could adversely impact our
businesses, •
increases in competition in energy supply markets as well as competition from
certain 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, such as distributed generation and micro grids, and
greater reliance on these technologies and changes in customer
behaviors, including energy efficiency, net metering and demand
response. 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. •
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,
EXHIBIT 99 |
 GAAP Disclaimer
PSEG presents Operating Earnings in addition to its Income from Continuing
Operations/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 Income from Continuing
Operations/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.
Slide
A
at
the
end
of
this
presentation
includes
a
list
of
items
excluded
from
Income from Continuing Operations/Net Income to reconcile to Operating
Earnings, with a reference to that slide included on each of the
slides where the
non-GAAP information appears.
3 |
 Operating Earnings Guidance
Building on the successful implementation of our strategy
S E E S L I D E A F O R I T E
M S E X C L U D E D F R O M I N C O M E F R O M C O N T I N U I N G
O
P
E
R
A
T
I
O
N
S
/
N
E
T
I
N
C
O
M
E
T
O
R
E
C
O
N
C
I
L
E
T
O
O
P
E
R
A
T
I
N
G
E
A
R
N
I
N
G
S
.
E
=
E
S
T
I
M
A
T
E
.
$2.44
$2.58
$2.55
-
$2.75E
2012
2013
2014 Guidance
8 |
 Operating Earnings Mix
Long term investment program has driven increased earnings
contribution from stable, regulated business
* S E E S L I D E A
F O R I T E M S E X C L U D E D F R O M I N C O M E F R O M C O N T I N U I N G O P E R A T I O N S /
N E T I N C O M E T O R E C O N C I L
E T O O P E R A T I N G E A R N I N G S ; D I S C O N T I N U E D O P E R A T I O N S R E F L E C T
T
E
X
A
S
.
E
=
E
S
T
I
M
A
T
E
*
*
2
0
1
4
P
E
R
C
E
N
T
S
U
S
E
M
I
D
P
O
I
N
T
O
F
E
A
R
N
I
N
G
S
G
U
I
D
A
N
C
E
.
Power’s
diverse
fuel
mix
and dispatch flexibility
continues to generate
earnings and free cash flow
PSE&G’s
investment in
transmission has
diversified its asset base
and, coupled with other
investments
and cost controls,
supported compound
annual earnings growth of
~18% over 2009 –
2013
Operating Earnings* Contribution by Subsidiary (%)
PSE&G
Power
Other
$2.44
$2.58
$2.55 -
$2.75E
$3.12
$2.74
$3.09
20%
27%
38%
43%
47%
54%
76%
69%
62%
54%
54%
43%
2009
2010
2011
2012
2013
2014E**
9 |
 PSE&G’s 2014 operating earnings
to benefit from increased investment in transmission and
on-going cost control
E=ESTIMATE
45
*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING
OPERATIONS/NET INCOME TO RECONCILE TO
OPERATING EARNINGS. |
 Improving Operating Earnings
and increased contribution from PSE&G
PSEG Operating Earnings
$ Millions (except EPS)
2012
2013
2014E
PSE&G
$528
$612
$705 -
$745
PSEG Power
$663
$710
$550 -
$610
Other
$45
($13)
$35 -
$40
Operating Earnings*
$1,236
$1,309
$1,290 -
$1,395
Operating EPS*
$2.44
$2.58
$2.55 -
$2.75
Regulated % of Earnings
43%
47%
53% -
55%
*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING
OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS.
NOTE: 2012 OPERATING EARNINGS RE-STATED FOR TRANSFER OF ASSETS FROM PSEG
HOLDINGS TO PSEG POWER. E=ESTIMATE.
102 |
 A
Items Excluded from Income from Continuing
Operations/Net Income 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. (a)
Includes the financial impact from positions with forward delivery
months. 2013
2012
2011
2010
2009
2008
Operating Earnings
1,309
$
1,236
$
1,389
$
1,584
$
1,567
$
1,478
$
Gain (Loss) on Nuclear Decommissioning Trust (NDT)
Fund Related Activity (PSEG Power)
40
52
50
46
9
(71)
Gain (Loss) on Mark-to-Market (MTM)
(a)
(PSEG Power)
(74)
(10)
107
(1)
(11)
14
Lease Transaction Activity (Energy Holdings)
-
36
(173)
-
29
(490)
Storm O&M (PSEG Power)
(32)
(39)
-
-
-
-
Market Transition Charge Refund (PSE&G)
-
-
-
(72)
-
-
Gain (Loss) on Asset Sales and Impairments (Energy Holdings)
-
-
34
-
-
(13)
Income from Continuing Operations
1,243
$
1,275
$
1,407
$
1,557
$
1,594
$
918
$
Discontinued Operations
-
-
96
7
(2)
270
Net Income
1,243
$
1,275
$
1,503
$
1,564
$
1,592
$
1,188
$
Fully Diluted Average Shares Outstanding (in Millions)
508
507
507
507
507
508
Operating Earnings
2.58
$
2.44
$
2.74
$
3.12
$
3.09
$
2.91
$
Gain (Loss) on NDT Fund Related Activity (PSEG Power)
0.08
0.10
0.10
0.09
0.02
(0.14)
Gain (Loss) on MTM
(a)
(PSEG Power)
(0.14)
(0.02)
0.21
-
(0.02)
0.03
Lease Transaction Activity (Energy Holdings)
-
0.07
(0.34)
-
0.05
(0.96)
Storm O&M (PSEG Power)
(0.07)
(0.08)
-
-
-
-
Market Transition Charge Refund (PSE&G)
-
-
-
(0.14)
-
-
Gain (Loss) on Asset Sales and Impairments (Energy Holdings)
-
-
0.06
-
-
(0.03)
Income from Continuing Operations
2.45
$
2.51
$
2.77
$
3.07
$
3.14
$
1.81
$
Discontinued Operations
-
-
0.19
0.01
-
0.53
Net Income
2.45
$
2.51
$
2.96
$
3.08
$
3.14
$
2.34
$
For the Year Ended
December 31,
(Unaudited)
Reconciling Items, net of tax
Earnings
Impact
($
Millions)
Per
Share
Impact
(Diluted)
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED |