 Public Service Enterprise Group PSEG Earnings Conference Call 2nd Quarter 2013 July 30, 2013 Exhibit 99.1 |
 1 Forward-Looking Statement Certain of the matters discussed in this report 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 word “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 Item 1. Financial Statements—Note 9. Commitments and Contingent Liabilities, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and other factors discussed in filings we make with the United States Securities and Exchange Commission (SEC). These factors include, but are not limited to: 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, • 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 sufficiently obtain coverage or recover proceeds of insurance on such matters, • increases 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. |
 2 GAAP Disclaimer PSEG presents Operating Earnings in addition to 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 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/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. |
 PSEG 2013 Q2 Review Ralph Izzo Chairman, President and Chief Executive Officer EXHIBIT 99.1 |
 4 Q2 Earnings Summary $ millions (except EPS) 2013 2012 Operating Earnings $ 243 $ 215 Reconciling Items, Net of Tax 90 (4) Income from Continuing Operations/Net Income $ 333 $ 211 EPS from Operating Earnings* $ 0.48 $ 0.43 Quarter ended June 30 * See Page A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. |
 5 First Half 2013 Earnings Summary $ millions (except EPS) 2013 2012 Operating Earnings $ 676 $ 647 Reconciling Items, Net of Tax (23) 57 Income from Continuing Operations/ Net Income $ 653 $ 704 EPS from Operating Earnings* $ 1.33 $ 1.28 Six months ended June 30 * See Page A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. |
 6 PSEG – Q2 2013 Highlights Strong Earnings Operating earnings of $0.48 vs. $0.43 per share in Q2 2012 Power benefitted from higher PJM capacity prices and an improvement in market prices for energy Increased contribution to earnings from PSE&G’s investment in transmission Operational Excellence PSEG Power output was flat in Q2 despite extended refueling at Salem 1 Diversity and location of Power’s fleet provided flexibility to participate in market PSE&G’s O&M on track to meet full-year expectations PSEG Disciplined Capital Investment BPU approved Solar Agreement to extend Solar 4 All and Solar Loan III investment 54 NJ municipalities and five counties have approved resolutions in support of PSE&G’s Energy Strong proposal to fortify its electric and gas distribution systems Transmission construction program continues on schedule Market Developments 2016/2017 RPM auction again recognized the locational advantage of Power’s assets US District Court decision on LCAPP litigation awaited in both NJ and MD New LIPA agreement under consideration would broaden and extend original contract terms |
 7 $2.25 - $2.50E PSEG – Maintaining 2013 Guidance $2.74 * See Slide A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. E = Estimate. $2.44 Based on our performance year-to-date, we expect operating earnings for the full year to be at the upper end of guidance assuming normal weather and unit operations 2011 Operating Earnings* 2012 Operating Earnings* 2013 Operating Earnings Guidance |
 PSEG 2013 Q2 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer |
 9 Q2 Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2013 2012 2013 2012 PSEG Power $ 114 $ 110 $ 0.22 $ 0.22 PSE&G 121 101 0.24 0.20 PSEG Energy Holdings/ Enterprise 8 4 0.02 0.01 Operating Earnings* $ 243 $ 215 $ 0.48 $ 0.43 Quarter ended June 30 * See Page A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. |
 10 PSEG EPS Reconciliation – Q2 2013 versus Q2 2012 Capacity 0.07 Market Prices on Un-hedged Generation 0.04 Lower Pricing on Hedged Generation (0.11) Transmission 0.04 Taxes and Other 0.01 Net Weather (0.01) Q2 2013 Operating Earnings* Q2 2012 Operating Earnings* PSEG Power PSE&G Energy Holdings/ Enterprise Asset Sale * See Page A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. 0.00 0.04 0.01 |
 11 First Half Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2013 2012 2013 2012 PSEG Power $ 364 $ 306 $ 0.71 $ 0.60 PSE&G 300 298 0.59 0.59 PSEG Energy Holdings/ Enterprise 12 43 0.03 0.09 Operating Earnings* $ 676 $ 647 $ 1.33 $ 1.28 Six months ended June 30 •See Page A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. |
 12 PSEG EPS Reconciliation – YTD 2013 versus YTD 2012 YTD 2013 Operating Earnings* YTD 2012 Operating Earnings* Capacity 0.12 Net Price (0.05) Volume 0.02 Gas Send-Out and Fixed Cost Recovery 0.04 O&M (0.01) D&A (0.01) PSEG Power Transmission Net Earnings 0.07 Distribution O&M (0.02) Net Weather 0.01 Taxes and Other 0.01 Absence of Tax Settlement (0.06) D&A (0.01) PSE&G PSEG Energy Holdings/ Enterprise Asset Sale 0.01 Absence of Tax Settlement (0.07) * See Page A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. 0.00 $1.33 (0.06) 0.11 $1.28 0.00 0.25 0.50 0.75 1.00 1.25 1.50 |
 PSEG Power 2013 Q2 Review |
 14 PSEG Power – Q2 2013 EPS Summary * See Page A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. **Includes the financial impact from positions with forward delivery months. $ millions (except EPS) Q2 2013 Q2 2012 Variance Operating Revenues $ 1,190 $ 985 $ 205 Operating Earnings 114 110 4 NDT Funds Related Activity, Net of Tax 8 4 4 Mark-to-Market, Net of Tax** 80 (10) 90 Storm O&M, Net of Insurance Recoveries 2 - 2 Income from Continuing Operations/Net Income $ 204 $ 104 $ 100 EPS from Operating Earnings* $ 0.22 $ 0.22 $0.00 |
 15 $0.22 $0.22 0.00 0.10 0.20 0.30 Capacity 0.07 Market Prices on Un-hedged Generation 0.04 Lower Pricing on Hedged Generation (0.11) PSEG Power EPS Reconciliation – Q2 2013 versus Q2 2012 Q2 2013 Operating Earnings* Q2 2012 Operating Earnings* * See Page A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. 0.00 |
 16 PSEG Power – Q2 2013 Generation Measures 7,075 7,147 4,177 4,187 1,454 1,384 0 7,500 15,000 2012 2013 Quarter ended June 30 Total Nuclear Total Coal* Oil & Natural Gas * Includes figures for Pumped Storage. Includes Hudson and Mercer when run on gas. PSEG Power – Generation (GWh) 12,706 12,718 Quarter ended June 30 PSEG Power – Capacity Factors (%) 2012 2013 Combined Cycle PJM and NY 57% 57% Coal NJ (Coal/Gas) 14% 8% PA 64% 70% CT 3% 3% Nuclear 87.2% 87.9% |
 17 PSEG Power – YTD 2013 Generation Measures 15,045 15,284 8,001 2,585 3,590 8,219 0 10,000 20,000 30,000 2012 2013 Six Months ended June 30 Total Nuclear Total Coal* Oil & Natural Gas * Includes figures for Pumped Storage. Includes Hudson and Mercer when run on gas. PSEG Power – Generation (GWh) 25,849 26,875 Six Months ended June 30 PSEG Power – Capacity Factors (%) 2012 2013 Combined Cycle PJM and NY 57% 55% Coal NJ (Coal/Gas) 8% 13% PA 63% 78% CT 3% 19% Nuclear 92.7% 94.4% |
 18 PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended June 30 ($ millions) 2012 2013 Coal $39 $30 Oil & Gas 113 160 Total Fossil 152 190 Nuclear 48 52 Total Fuel Cost $200 $242 Total Generation (GWh) 12,706 12,718 $ / MWh 15.74 19.03 YTD June 30 ($ millions) 2012 2013 Coal $77 $96 Oil & Gas 241 338 Total Fossil 318 434 Nuclear 98 110 Total Fuel Cost $416 $544 Total Generation (GWh) 25,849 26,875 $ / MWh 16.09 20.24 |
 19 $0 $10 $20 $30 $40 $50 $60 2011 2012 2013 $49 $43 $43 PSEG Power – Gross Margin Performance Locational advantage of generating portfolio offset lower prices in hedged products Q2 spot prices higher across PJM-W, PS Zone, ISO-NE and NYISO Margins stable with higher capacity pricing offsetting lower net pricing Migration volumes in line with expectations PSEG Power Gross Margin ($/MWh) Quarter ended June 30 Regional Performance Region Q2 2013 Gross Margin ($M) 2013 Performance PJM $523 Roll-off of higher priced hedges offset higher capacity prices versus a year ago and flat generation output. New England $15 Higher pricing on flat volume. New York $12 Higher pricing on flat volume. |
 20 Hedging Update… Contracted Energy* * Hedge percentages and prices as of June 28, 2013. 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. Volume TWh 17 35 35 Base Load % Hedged 100% 90-95% 50-55% (Nuclear and Base Load Coal) Price $/MWh $51 $49 $49 Volume TWh 11 18 17 Intermediate Coal, Combined % Hedged 30-35% 0% 0% Cycle, Peaking Price $/MWh $51 $49 $49 Volume TWh 26-28 53-55 52-54 Total % Hedged 70-75% 55-60% 30-35% Price $/MWh $51 $49 $49 Jul -Dec 2013 2014 2015 |
 21 PSEG Power – Q2 2013 Highlights Q2 output was flat year-over-year, reflecting Salem 1 extended refueling and a 6 day forced outage at Hope Creek Nuclear capacity factor was 87.9% for Q2 and 94.4% for the YTD Equivalent availability factors for CCGT units restored to pre-Sandy levels near 90% Output of NJ coal units was 38% coal, 62% gas fueled for the YTD Operations Regulatory and Market Environment Capacity auction results continue to recognize the locational advantage of Power’s assets: For the 2016/2017 RPM auction, Power cleared 8,637 MW of capacity at an average price of $166/MW-day Higher spot power prices across PJM, NYISO, and ISO-NE continued in Q2 Remainder of 2013 anticipated base load output hedged at an average price of $51/MWh Decisions in Federal Court for NJ and MD LCAPP cases pending Financial Storm related spending was $22 million pre-tax in Q2, $50 million YTD and $135 million storm-to-date (before insurance recoveries thus far totalling $44 million) Power’s total debt as a percentage of capital at June 30 was 28% Power paid at maturity a $300 million, 2.5% senior note in April |
 PSE&G 2013 Q2 Review |
 23 PSE&G – Q2 Earnings Summary $ millions (except EPS) Q2 2013 Q2 2012 Variance Operating Revenues $ 1,423 $ 1,407 $ 16 Operating Expenses Energy Costs 580 622 (42) Operation & Maintenance 369 350 19 Depreciation & Amortization 207 188 19 Taxes Other than Income Taxes 14 20 (6) Total Operating Expenses 1,170 1,180 (10) Operating Earnings / Net Income 121 101 20 EPS from Operating Earnings $ 0.24 $ 0.20 $ 0.04 |
 24 PSE&G EPS Reconciliation – Q2 2013 versus Q2 2012 Q2 2013 Operating Earnings Q2 2012 Operating Earnings Transmission Net Earnings Taxes and Other 0.01 Net Weather (0.01) $0.24 0.00 0.04 $0.20 0.00 0.10 0.20 0.30 |
 25 PSE&G – Monthly Summer Weather Data 83 1,242 3,330 179 1,331 2,718 163 754 3,023 0 400 800 1200 1600 2000 2400 2800 3200 3600 4000 April May June 2013 2012 Normal 2013 vs. 2012 vs. Normal PSE&G Monthly Temperature Humidity Index (THI) + 10% Q2 2013 vs. Q2 2012 + 18% Q2 2013 vs. Normal |
 26 PSEG Capital Expenditures 2013-2015 Capital Spending ($ Millions) Prior 2013-2015E Updated 2013-2015E PSE&G Transmission $3,430 $3,430 Distribution 1,330 1,330 Renewables 140 355 PSE&G Total $4,900 $5,115 Power 1,070 1,070 Other-Renewables 50 50 Other 115 115 PSEG Total $6,135 $6,350 Revised PSE&G 2013-2015 Capital Spending forecast includes new solar programs Transmission investment represents over 50% of planned capital spend over 2013-2015 *Estimate; Updated 2013-2015 Capital Spending revisions do not reflect the Energy Strong filing, or the $1.5 billion of Transmission hardening. |
 27 PSE&G – Q2 2013 Highlights Operations BPU approved Solar Agreement to spend up to $247 million on Solar 4 All extension and up to $199 million on Solar Loan III program Continuing regulatory process on Energy Strong infrastructure proposal to invest $3.9 billion over the next ten years on electric and gas system hardening and resiliency Advancing plans for Transmission hardening program of $1.5 billion over 10 years Construction of major Transmission lines progressing on schedule PSE&G is earning its authorized return on equity PSE&G’s capital budget for 2013-2015 revised to $5.1 billion from $4.9 billion, to reflect approval of expanded investment in solar Issued $500 million,10-year secured MTNs at 2.375% due May 2023 Financial Q2 winter weather was significantly colder than Q2 2012 but only slightly colder than normal Q2 summer weather was warmer than Q2 2012 and warmer than normal A still-slow economy continues to weigh on electric demand; gas demand improving O&M expected to moderate in second-half 2013 Regulatory and Market Environment |
 PSEG Energy Holdings/Enterprise 2013 Q2 Review |
 29 PSEG Energy Holdings/Enterprise – Q2 2013 Earnings Summary $ millions (except EPS) Q2 2013 Q2 2012 Variance Operating Earnings $ 8 $ 4 $ 4 Lease Related Activity - 2 (2) Income from Continuing Operations/ Net Income $ 8 $ 6 $ 2 EPS from Operating Earnings* $ 0.02 $ 0.01 $ 0.01 * See Page A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. |
 30 PSEG Energy Holdings/Enterprise EPS Reconciliation – Q2 2013 versus Q2 2012 0.00 0.05 Q2 2013 Operating Earnings* Q2 2012 Operating Earnings* * See Slide A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. $0.02 0.01 $0.01 Asset Sale |
 31 PSEG Energy Holdings/Enterprise – Q2 2013 Highlights Financial Expanded LIPA management agreement under consideration Edison Mission Energy agreement to defer lease decisions until late September Badger 1 (19 MW) solar farm scheduled to be in service this Fall Continuing to monetize non-core assets |
 PSEG |
 33 PSEG Financial Highlights Maintaining 2013 operating earnings guidance of $2.25 - $2.50 per share Based on financial results to date, we expect operating earnings for the full year to be at the upper end of our guidance range assuming normal weather and unit operations Focused on maintaining operating efficiency and customer reliability PSE&G’s operating earnings expected to grow at double-digit rate in 2013, and provide ~50% of consolidated operating earnings Executing PSE&G’s existing $3.4 billion Transmission capital spending program on schedule – fueling double-digit growth in PSE&G operating earnings through 2015, based on approved programs PSE&G pursuing Energy Strong, its $3.9 billion, ten-year infrastructure spending program to strengthen electric and gas distribution, communications, and customer reliability and resiliency. In addition, PSE&G plans to invest $1.5 billion during this time-frame to harden its Transmission system Financial position remains strong Positive cash from Power and increasing cash flow from PSE&G supports dividend growth and funds capital spending program without the need to issue equity Debt as a percentage of capital was 41.2% at June 30, 2013 Long history of returning cash to the shareholder through the common dividend, with opportunity for future growth |
 34 PSEG 2013 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2013E 2012A PSEG Power $535 – $600 $644 PSE&G $580 – $635 $528 PSEG Energy Holdings/Enterprise $25 – $35 $64 Operating Earnings* $1,140 – $1,270 $1,236 Earnings per Share $2.25 – $2.50 $2.44 * See Slide A for Items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings. E = Estimate A = Actual |
 35 PSEG Liquidity as of June 30, 2013 Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Mar-18 $600 1 $170 $430 5-Year Credit Facility (Power) Mar-17 $1,600 $54 $1,546 5-Year Credit Facility (Power) Mar-18 $1,000 2 $0 $1,000 5-Year Bilateral (Power) Sep-15 $100 $100 $0 5-year Credit Facility (PSEG) Mar-17 $500 $5 $495 5-year Credit Facility (PSEG) Mar-18 $500 3 $0 $500 Total $4,300 $329 $3,971 1 PSE&G Facility to be reduced by $29M on April 15, 2016 $114 2 Power Facility to be reduced by $48M on April 15, 2016 *PSE&G ST Investment $0 3 PSEG Facility to be reduced by $23M on April 15, 2016 Total Liquidity Available $4,085 Total Parent / Power Liquidity $3,655 PSEG / Power *PSEG Money Pool ST Investment |
 Items Excluded from Income from Continuing Operations/Net Income to Reconcile to Operating Earnings Please see Page 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Income from Continuing Operations/Net Income. A 2013 2012 2013 2012 2012 2011 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 8 $ 4 $ 17 $ 9 $ 52 $ 50 $ 80 (10) (25) 42 (10) 107 Lease Related Activity (PSEG Energy Holdings) - 2 - 6 36 (173) Storm O&M, net of insurance recoveries (PSEG Power) 2 - (15) - (39) - Gain on Sale of Qwest Building (PSEG Energy Holdings) - - - - - 34 Total Pro-forma adjustments 90 $ (4) $ (23) $ 57 $ 39 $ 18 $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 507 507 507 507 Per Share Impact (Diluted) Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.02 $ 0.01 $ 0.04 $ 0.02 $ 0.10 $ 0.10 $ Gain (Loss) on MTM (a) (PSEG Power) 0.16 (0.02) (0.05) 0.08 (0.02) 0.21 Lease Related Activity (PSEG Energy Holdings) - - - 0.01 0.07 (0.34) Storm O&M, net of insurance recoveries (PSEG Power) - - (0.03) - (0.08) - Gain on Sale of Qwest Building (PSEG Energy Holdings) - - - - - 0.06 Total Pro-forma adjustments 0.18 $ (0.01) $ (0.04) $ 0.11 $ 0.07 $ 0.03 $ (a) Includes the financial impact from positions with forward delivery months. Three Months Ended Six Months Ended Year Ended June 30, June 30, December 31, PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Income from Continuing Operations/Net Income to Compute Operating Earnings (Unaudited) Pro-forma Adjustments, net of tax Gain (Loss) on Mark-to-Market (MTM) (a) (PSEG Power) |