PUBLIC SERVICE ENTERPRISE GROUP INC - FORM 8-K - EX-99.1

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EX-99 - EX-99 - PUBLIC SERVICE ENTERPRISE GROUP INC	d485512dex99.htm
8-K - FORM 8-K - PUBLIC SERVICE ENTERPRISE GROUP INC	d485512d8k.htm

Public Service Enterprise Group

PSEG Earnings Conference Call

Quarter 2017

October 31, 2017

EXHIBIT 99.1

Forward-Looking Statements

Certain of the matters discussed in this presentation 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

herein

are

discussed

filings

make

with

the

United

States

Securities

and

Exchange

Commission

(SEC)

including

our

Annual

Report

Form

10-K

and

subsequent

reports

Form

10-Q and Form 8-K. These factors include, but are not limited to:

• fluctuations in wholesale power and natural gas markets, including the potential impacts on the economic viability of our generation units;

• our ability to obtain adequate fuel supply;

• any inability to manage our energy obligations with available supply;

• increases in competition in wholesale energy and capacity markets;

• changes in technology related to energy generation, distribution and consumption and customer usage patterns;

• economic downturns;

• third party credit risk relating to our sale of generation output and purchase of fuel;

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

• changes in state and federal legislation and regulations;

• the impact of pending rate case proceedings;

• regulatory, financial, environmental, health and safety risks associated with our ownership and operation of nuclear facilities;

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

• changes in federal and state environmental regulations and enforcement;

• delays in receipt of, or an inability to receive, necessary licenses and permits;

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

• changes in tax laws and regulations;

• the impact of our holding company structure on our ability to meet our corporate funding needs, service debt and pay dividends;

• lack of growth or slower growth in the number of customers or changes in customer demand;

• any inability of Power to meet its commitments under forward sale obligations;

• reliance on transmission facilities that we do not own or control and the impact on our ability to maintain adequate transmission capacity;

• any inability to successfully develop or construct generation, transmission and distribution projects;

• any

equipment

failures,

accidents,

severe

weather

events

other

incidents

that

impact

our

ability

provide

safe

and

reliable

service

our

customers;

• our inability to exercise control over the operations of generation facilities in which we do not maintain a controlling interest;

• any inability to maintain sufficient liquidity;

• any inability to realize anticipated tax benefits or retain tax credits;

• challenges associated with recruitment and/or retention of key executives and a qualified workforce;

• the impact of our covenants in our debt instruments on our operations; and

• the impact of acts of terrorism, cybersecurity attacks or intrusions.

All of the forward-looking statements made in this presentation 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, results of operations or cash flows. Readers are

cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this presentation apply only as of the date of

this presentation. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even in light of new information or future events,

unless otherwise required by applicable securities laws.

The forward-looking statements contained in this presentation 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.

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. 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. Non-GAAP Adjusted EBITDA excludes the same items as our non-GAAP Operating

Earnings measure as well as income tax expense, interest expense and depreciation and amortization. The last two slides in this

presentation (Slides A and B) include a list of items excluded from Net Income/(Loss) to reconcile to non-GAAP Operating

Earnings and non-GAAP Adjusted EBITDA with a reference to those slides included on each of the slides where the non-GAAP

information appears.

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. 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 and depreciation and amortization, which can vary substantially from company to

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

acquired. 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. The presentation of non-GAAP Operating Earnings and 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. In addition, non-GAAP Operating Earnings and non-GAAP

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 non-GAAP Operating Earnings and non-GAAP 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 Investors 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

2017 Q3 Review

Ralph Izzo

Chairman, President and Chief Executive Officer

PSEG

2017

–

Solid

results;

executing

well

major

initiatives

Third Quarter Highlights

Net Income of $0.78 vs. Net Income of $0.64 per share in Q3 2016

Non-GAAP Operating Earnings* of $0.82 vs. $0.88 per share in Q3 2016

PSE&G results benefitted from increased investment in electric and gas transmission and distribution

PSEG Power results aided by continued cost control and improved nuclear performance

Unseasonably mild weather weighed on results of both businesses

Operational Excellence

Nuclear fleet achieved a capacity factor of ~96% for Q3 and ~95% for the year-to-date 2017 period

Disciplined Capital Investment

PSE&G investing ~$3.1 billion to upgrade transmission, replace cast-iron pipe and improve the

resilience of electric distribution system in 2017 and PSEG Power investing ~$1.2 billion constructing

three new, highly efficient gas-fired CCGTs

Regulatory & Policy Focus

FERC seeking response to Department of Energy (DOE) proposed rulemaking to preserve the viability

of fuel-secure, base load resources; Reply comments due November 7, 2017

Per Board of Public Utilities (BPU) agreement, PSE&G will delay filing its Distribution Base Rate Case

to no later than December 1, 2017; decision by BPU on Infrastructure Investment Proposal expected

by year-end

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

PSEG Q3 Summary

Quarter ended September 30

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

$ millions (except EPS)

2017

2016

Change

Net Income

$ 395

$ 327

$ 68

Reconciling Items

117

(95)

Operating Earnings (non-GAAP)*

$ 417

$ 444

$ (27)

EPS from Net Income

$ 0.78

$ 0.64

$ 0.14

EPS from Operating Earnings (non-GAAP)*

$ 0.82

$ 0.88

$ (0.06)

PSEG Year-to-Date Summary

Nine Months ended September 30

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

$ millions (except EPS)

2017

2016

Change

Net Income

$ 618

$ 985

$ (367)

Reconciling Items

581

211

(370)

Operating Earnings (non-GAAP)*

$ 1,199

$ 1,196

$ 3

EPS from Net Income

$ 1.22

$ 1.94

$ (0.72)

EPS from Operating Earnings (non-GAAP)*

$ 2.36

$ -

PSEG -

Executing on Regulatory and Policy Initiatives

NJ Distribution Base Rate Proceeding

Agreed to delay rate review filing by one month to no later than December 1, 2017

Long-Term Infrastructure Investment Platform

In July, PSE&G filed for a 5-year, $2.7 billion extension of the Gas System Modernization

Program (GSMP2)

In October, the BPU approved $69 million of PSE&G’s request to extend its investment

in Energy Efficiency (EE)

A final BPU decision on the Infrastructure Investment Program (IIP) providing for 5-year

investment programs expected by year-end

PSE&G preparing a multi-year extension filing for Energy Strong in coming months

PSE&G developing a large, multi-year EE investment program to bring benefits to

a broader group of customers

Preserve the Value of Nuclear Supply

Advocating for legislative strategy to recognize the value of nuclear energy under terms

and conditions that provide proper incentives for long-term operation

Ensure Federal Regulatory and Policy Framework

FERC/PJM considering DOE Notice of Proposed Rulemaking (NOPR) issues of

Price Formation and fuel-secure resource preservation

Growth in utility infrastructure investment drives increased growth

in regulated earnings contribution

$2.80 -

$3.00E

PSEG -

Maintaining 2017 Non-GAAP Earnings Guidance

$2.90

Non-GAAP Operating Earnings*

Contribution

Subsidiary

and

2017

Guidance

2016

2017E**

PSE&G

Power

Enterprise/Other

60%

66%

32%

35%

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

** Based on the mid-point of 2017 non-GAAP Operating Earnings guidance of $2.80 - $3.00 per share. E = Estimate.

PSEG

2017 Q3 Operating Company Review

Dan Cregg

EVP and Chief Financial Officer

PSEG –

Q3 Results by Subsidiary

GAAP Net Income/(Loss)

2017

2016

Change

PSE&G

$ 0.49

$ 0.50

$ (0.01)

PSEG Power

$ 0.27

$ -

PSEG Enterprise/Other

$ 0.02

$(0.13)

$ 0.15

Total PSEG

$ 0.78

$ 0.64

$ 0.14

Non-GAAP Operating Earnings*

2017

2016

Change

PSE&G

$ 0.49

$ 0.50

$ (0.01)

PSEG Power

$ 0.31

$ 0.34

$ (0.03)

PSEG Enterprise/Other

$ 0.02

$ 0.04

$ (0.02)

Total PSEG*

$ 0.82

$ 0.88

$ (0.06)

*See Slides A and B for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP) for PSEG, PSEG Power and PSEG

Enterprise/Other.

PSEG Q3 EPS Summary –

Quarter ended September 30

PSEG EPS Reconciliation –

Q3 2017 versus Q3 2016

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

Q3 2017

Net

Income

Q3 2016

Net

Income

PSEG

Power

PSE&G**

Enterprise/

Other

Q3 2016

Operating

Earnings

(non-GAAP)*

Q3 2017

Operating

Earnings

(non-GAAP)*

Utility investment, cost control and mild weather drive Q3 results

Capacity 0.01

Lower

Volume (0.02)

Recontracting and

Lower

Prices (0.05)

O&M 0.02

D&A, Interest and

Taxes 0.01

Transmission 0.04

Energy Strong 0.02

Weather (0.03)

Weather Norm Sales/

Demands (0.02)

O&M 0.01

D&A (0.01)

Taxes and Other (0.02)

Absence of

Tax Benefit

and

Interest

Expense

(0.02)

(0.03)

(0.01)

$0.78

$0.64

$0.88

$0.82

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

** Prior quarter results may not add to year-to-date totals due to rounding.

PSEG –

Year-to-Date Results by Subsidiary

GAAP Net Income/(Loss)

2017

2016

Change

PSE&G

$ 1.49

$ 1.37

$ 0.12

PSEG Power

$ (0.26)

$ 0.63

$ (0.89)

PSEG Enterprise/Other

$ (0.01)

$ (0.06)

$ 0.05

Total PSEG

$ 1.22

$ 1.94

$ (0.72)

Non-GAAP Operating Earnings*

2017

2016

Change

PSE&G

$ 1.49

$ 1.37

$ 0.12

PSEG Power

$ 0.80

$ 0.88

$ (0.08)

PSEG Enterprise/Other

$ 0.07

$ 0.11

$ (0.04)

Total PSEG*

$ 2.36

$ -

PSEG YTD EPS Summary –

Nine months ended September 30

*See Slides A and B for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP) for PSEG, PSEG Power and PSEG

Enterprise/Other.

PSEG EPS Reconciliation –

YTD 2017 versus YTD 2016

•

See Slide A for Items excluded from Net Income to reconcile to Operating Earnings (non-GAAP), Year-to-date columns.

Capacity 0.02

Higher Gas

Send-out 0.02

Lower Volume

(0.01)

Recontracting and

Lower Prices (0.18)

O&M 0.07

Transmission 0.11

Electric and Gas

Weather (0.03)

Distribution

O&M 0.03

Distribution

D&A (0.02)

Taxes and Other

(0.02)

YTD 2017

Net

Income

YTD 2016

Net

Income

PSEG

Power

PSE&G**

Enterprise/

Other

YTD 2016

Operating

Earnings

(non-GAAP)*

YTD 2017

Operating

Earnings

(non-GAAP)*

Interest

Expense,

Taxes

and Other

Utility investment and cost control drive year-to-date results

(0.08)

0.12

(0.04)

$1.94

$2.36

$1.22

Margin 0.05

** Prior quarter results may not add to year-to-date totals due to rounding.

PSE&G

2017 Q3 Review

$0.50

0.01

0.00

$0.49

(0.02)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

PSE&G EPS Reconciliation –

Q3 2017

versus Q3 2016

Q3 2017

Net Income

Q3 2016

Net Income

Transmission 0.04

Energy Strong 0.02

Weather (0.03)

Weather Norm

Sales/Demands (0.02)

O&M 0.01

D&A (0.01)

Continued investment and cost containment contributed to margin,

offset by mild weather

Absence of

Tax Benefit

and Other

Prior quarter results may not add to year-to-date totals due to rounding

Q3 2017 weather significantly cooler than Q3 2016 and normal

2017

vs.

2016

vs.

Normal

PSE&G Monthly Weather Summary

July

August

September

Monthly

Temperature

Humidity

Index

(THI)

Q3 2017 temperature-humidity index

was ~27% lower than Q3 2016

and ~5% lower than normal

Total

Hours

90°F

Higher

Q3 2017 total hours at or above 90°F

were 69% lower than Q3 2016

and 47% lower than normal

PSE&G –

Q3 Highlights

PSE&G agreed to delay filing its distribution base rate case by one month to no later than December 1;

Filing will now be based on three months actual and nine months forecasted data

BPU decision on Infrastructure Investment Program (IIP) proposal expected by year-end

Filed for 2018 FERC Formula Rate increase of $212 million to be effective January 1, 2018, reflects

increase in transmission investment and a true-up of prior-year results

Anticipate filing a multi-year, Energy Strong extension and expansion program (ES2) by year-end

Operations

Regulatory and Market

Environment

PSE&G expects to invest approximately $3.1 billion of capital on its infrastructure in 2017, lower than the

plan of $3.4 billion due to a delay in timing on certain projects and better than anticipated efficiencies

PSE&G’s

2017

Net

Income

guidance

range

remains

unchanged

$945

$985

million

Financial

On a weather normalized basis, total electric sales were down slightly (0.6%) for the quarter and flat

for the trailing 12 months ended September 30

Q3 2017 weather was ~27% cooler than Q3 2016 and ~5% cooler than normal based on the

Temperature-Humidity Index; hot weather in late September (billed at lower winter rates) was not

enough to offset the mild August

PSEG Power

2017 Q3 Review

$0.27

$0.34

0.03

$0.31

$0.27

(0.06)

0.00

0.10

0.20

0.30

0.40

Capacity 0.01

Lower Volume (0.02)

Recontracting and

Lower Prices (0.05)

PSEG Power EPS Reconciliation –

Q3 2017 versus Q3 2016

O&M 0.02

D&A, Interest

and Taxes 0.01

* See Slide B for Items excluded from Net Income/(Loss) to reconcile to non-GAAP Operating Earnings for PSEG Power.

Fewer outage-related days and cost control offset lower prices

Q3 2016

Operating

Earnings*

(non-GAAP)

Q3 2017

Operating

Earnings*

(non-GAAP)

Q3 2017

Net

Income

Q3 2016

Net

Income

PSEG Power –

Q3 Generation down 6% in response to mild weather

Total Nuclear

Total Coal**

Natural Gas

* Excludes solar and Kalaeloa. ** Includes figures for Pumped Storage.

PSEG Power –

Generation (GWh)*

14,110

13,304

PSEG Power –

Capacity Factors (%)

PSEG Power –

Fuel Costs

6,863

8,209

1,493

1,242

5,754

3,853

5,000

10,000

15,000

2016

2017

Quarter ended

September 30

2016

2017

Combined

Cycle

PJM and NY

73.6%

51.0%

Coal**

69.8%

73.9%

5.4%

1.3%

Nuclear

80.2%

96.1%

Quarter ended

September 30

($ millions)

2016

2017

Gas

$ 83

$ 63

Coal

$ 29

$ 27

Total Fossil

$ 112

$ 90

Nuclear

$ 49

$ 51

Total Fuel

Cost

$ 161

$ 141

Total

Generation

(GWh

)

14,110

13,304

$ / MWh

11.41

10.60

PSEG Power –

YTD Generation down 2% in response to mild weather

Total Nuclear

Total Coal**

Natural Gas

* Excludes solar and Kalaeloa. ** Includes figures for Pumped Storage.

PSEG Power –

Generation (GWh)*

39,756

39,090

PSEG Power –

Capacity Factors (%)

PSEG Power –

Fuel Costs

22,265

24,130

3,432

4,036

14,059

10,924

10,000

20,000

30,000

40,000

2016

2017

Nine months

ended

September 30

2016

2017

Combined

Cycle

PJM and NY

62.5%

49.3%

Coal**

61.9%

79.6%

3.8%

Nuclear

87.5%

95.2%

Nine months

ended September 30

($ millions)

2016

2017

Gas

$ 215

$ 224

Coal

$ 78

$ 92

Total Fossil

$ 293

$ 316

Nuclear

$ 154

$ 153

Total Fuel

Cost

$ 447

$ 469

Total

Generation

(GWh)

39,756

39,090

$ / MWh

11.24

12.00

PSEG Power –

Gross Margin Performance

$10

$20

$30

$40

$50

2015

2016

2017

$40

Quarter ended September 30

Mild Summer weather tempered demand, energy prices and generation output

PS Zone basis improved over Q3 2016, despite lower pricing

Capacity revenues up slightly vs. Q3 2016 reflecting a step-up in New England

capacity pricing to $232 MW/day

Regional spark spreads compressed in the quarter

Regional Performance

Region

Q3 Gross

Margin ($M)

Q3 2017 Performance

PJM

$486

Lower prices and lower generation

influenced by mild Summer weather

New

England

$24

Higher capacity revenues offset lower

generation and lower market prices

New York

$25

Higher generation was offset by

decline in average hedge price

and market prices

PSEG Power Gross Margin ($/MWh)

$42

Hedging Update –

Forecast of output unchanged

Contracted Energy*

* HEDGE PERCENTAGES AND PRICES AS OF SEPTEMBER 30, 2017. 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.

Oct-Dec

2017

2018

2019

Volume TWh

Base Load

% Hedged

100%

50-55%

(Nuclear and Base Load Coal)

Price $/MWh

$45

$41

$39

Volume TWh

Intermediate, Combined Cycle,

% Hedged

50-55%

10-15%

Peaking

Price $/MWh

$45

$41

$ -

Volume TWh

10-12

52-54

58-60

Total

% Hedged

85-90%

70-75%

30-35%

Price $/MWh

$45

$41

$39

PSEG Power –

Q3 Highlights

Q3 output down 6% reflecting mild weather and lower energy prices

Nuclear fleet achieved average capacity factor of 96.1% in Q3, producing 8.2 TWh of energy

CCGT fleet capacity factor was 51.0% versus 73.6% in Q3 2016, reflecting lower demand; CCGT

availability remained strong at ~97% and produced 3.7 TWh of energy

Coal capacity factor up 4% in PA on higher market demand, coal fleet produced 1.2 TWh of energy

Operations

Regulatory and Market

Environment

Financial

Department of Energy support of fuel secure, base load generation directs the Federal Energy Regulatory

Commission to address price formation issues in a timely and constructive manner

Court actions in New York and Illinois affirm state initiatives in support of baseload nuclear generation

2017 expected generation output on track for 49-50 TWh; BGS load projected at 11 TWh

Construction on schedule and on budget at Keys and Sewaren 7 for targeted 2018 in-service;

Bridgeport Harbor 5 progressing on schedule and on budget for targeted 2019 operations

Power’s total debt as a percentage of capitalization at September 30 was 31%

Power’s

2017

non-GAAP

Operating

Earnings

guidance

range

remains

unchanged

$435

$510

million; non-GAAP Adjusted EBITDA guidance for 2017 remains unchanged at $1,080 to $1,210 million

PSEG

PSEG Financial Highlights

Reiterating

2017

non-GAAP

Operating

Earnings

guidance

$2.80

$3.00

per

PSE&G earnings forecast to grow 8.5% to comprise 66% of PSEG’s 2017

non-GAAP Operating Earnings

PSEG’s 5-Year capital spending forecast of $15 billion over 2017 –

2021

to be invested in PSE&G (82%) and Power (18%)

PSE&G successfully executing regulatory/policy initiatives: Additional capital spend

outlined since the March Investor Conference (GSMP2, upcoming filings for Energy

Strong and Energy Efficiency) provides greater support for achieving the high end

of its five-year, 7 -

9% annual growth in rate base over the 2017-2021 period

PSEG Power’s $2 billion investment in new generation, located in PJM

and New England, will improve fleet efficiency and geographic diversity

Increased 2017 indicative common dividend by 4.9% to $1.72 per share

Financial position remains strong:

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 49% at September 30

PSEG 2017 Guidance -

By Subsidiary -

Unchanged

$ millions (except EPS)

2017E

2016

PSE&G (Net Income)

$945 -

$985

$889

PSEG Power

$435 -

$510

$514

PSEG Enterprise/Other

$35 -

$35

$72

Operating Earnings (non-GAAP)*

$1,415 -

$1,530

$1,475

Operating EPS (non-GAAP)*

$2.80 -

$3.00E

$2.90

Segment Operating Earnings Guidance and Prior Results

(non-GAAP, except as noted)*

$ millions

2017E

2016

PSEG Power

$1,080 -

$1,210

$1,201

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/(Loss) to reconcile to Operating

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

PSEG Liquidity as of September 30, 2017

Reconciliation of Non-GAAP Operating Earnings

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.

Reconciliation of Non-GAAP Operating Earnings and Non-GAAP

Adjusted EBITDA

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/(Loss).

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