EXHIBIT 99.1
Public Service Enterprise Group
PSEG Earnings Conference Call
1st Quarter 2009
May 4, 2009
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 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. Although we believe that our expectations are based on
reasonable assumptions, we can give no assurance they will be achieved. The results or events predicted in these statements may differ
materially from actual results or events. Factors which could cause results or events to differ from current expectations include, but are not
limited to:
Adverse changes in energy industry, policies and regulation, including market structures and rules.
New energy legislation.
Any inability of our energy 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 operations of our generating units.
Changes in nuclear regulation and/or developments in the nuclear power industry generally, that could limit operations of our nuclear generating
units.
Actions or activities at one of our nuclear units that might adversely affect our ability to continue to operate that unit or other units at the same
site.
Any inability to balance our energy obligations, available supply and trading risks.
Any deterioration in our credit quality.
Availability of capital and credit at reasonable pricing terms and our ability to meet cash needs.
Any inability to realize anticipated tax benefits or retain tax credits.
Increases in the cost of or interruption in the supply of fuel and other commodities necessary to the operation of our generating units.
Delays or cost escalations in our construction and development activities.
Adverse investment performance of our decommissioning and defined benefit plan trust funds, and changes in discount rates and funding
requirements.
Changes in technology and increased customer conservation.
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.
1
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) and Mark-to-Market (MTM)
accounting, the impact of the sale of certain non-core domestic and
international assets and material impairments and lease-transaction-
related charges. 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.
2
PSEG
2009 Q1 Review
Ralph Izzo
Chairman, President and Chief Executive Officer
Q1 2009 Earnings Summary
13
-
Discontinued Operations, Net of Tax
$ 0.86
$ 0.95
EPS from Operating Earnings*
448
444
Net Income
435
444
Income from Continuing Operations
(3)
(38)
Reconciling Items, Net of Tax
$ 438
$ 482
Operating Earnings
2008
2009
$ millions (except EPS)
Quarter ended March 31,
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
4
PSEG – Q1 2009: Answering Challenges of Difficult Market
Q1 2009 results support full-year expectations.
Demonstrate strength of asset base.
Markets remain challenging.
Weather normalized sales have declined; commodity prices lower.
Local economic initiative received regulatory support.
$694 million accelerated capital infrastructure program approved.
Obama Administration focused on energy policy and renewables.
Cap-and-trade under consideration.
Focused on controlling expenses.
Financial position remains strong.
Common dividend increased 3.1% in Q1 2009 to $1.33 per share
indicated annual rate.
5
2007 Operating Earnings*
2008 Operating Earnings*
2009 Guidance
$2.68
$3.00 - $3.25
PSEG – 2009: Meeting the Challenge
$3.03
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
6
PSEG
2009 Q1 Operating Company Review
Caroline Dorsa
Executive Vice President and Chief Financial Officer
Q1 Operating Earnings by Subsidiary
$ 438
(5)
28
136
$ 279
2008
$ 482
(4)
4
123
$ 359
2009
Operating Earnings
Earnings per Share
(0.01)
(0.01)
Enterprise
$ 0.86
$ 0.95
Operating Earnings*
0.06
0.01
PSEG Energy Holdings
0.26
0.24
PSE&G
$ 0.55
$ 0.71
PSEG Power
2008
2009
$ millions (except EPS)
Quarter ended March 31,
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
8
$.86
.16
(.02)
(.05)
.95
0.00
0.60
1.20
PSEG EPS Reconciliation – Q1 2009 versus Q1 2008
Q1 2009
operating
earnings*
Q1 2008
operating
earnings*
Recontracting
and Lower Fuel
Expense .18
BGSS .01
O&M (.02)
Depreciation,
Interest and Other
(.01)
PSEG Power
Weather-Gas
.03
Transmission
Margin .01
Gas Margin
(.01)
O&M (.01)
Depreciation,
Taxes and
Other (.04)
PSE&G
PSEG Energy
Holdings
Texas Generating
Facilities (.01)
2009 Asset Sales
.03
Lease Income (.02)
Effective Tax Rate
and Other (.05)
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
9
PSEG Power
2009 Q1 Review
PSEG Power – Q1 2009 EPS Summary
(21)
3
(18)
Mark-to-Market, Net of Tax
(16)
(7)
(23)
NDT Funds Related Activity,
Net of Tax
($ 1)
$ 2,375
$ 2,374
Operating Revenues
$ 0.16
$ 0.55
$ 0.71
EPS from Operating Earnings*
43
275
318
Income from Continuing Operations/
Net Income
80
279
359
Operating Earnings
Variance
Q1 2008
Q1 2009
$ millions (except EPS)
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
11
$.71
(.01)
(.02)
.01
.18
$.55
0.00
0.25
0.50
0.75
Recontracting
and Lower Fuel
Expense
PSEG Power EPS Reconciliation – Q1 2009 versus Q1 2008
Q1 2009
operating
earnings*
Q1 2008
operating
earnings*
BGSS
O&M
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
Depreciation,
Interest and
Other
12
PSEG Power – Generation Measures
7,265
7,817
3,659
2,679
2,776
2,621
0
5,000
10,000
15,000
2008
2009
Quarter ended March 31,
Total Nuclear
Total Coal*
Total Oil &
Natural Gas
* Includes figures for Pumped Storage
PSEG Power – Generation (GWh)
13,700
13,117
Generation declined 4.3%.
Nuclear fleet capacity factors:
NJ fleet operated at 99.3%
in Q1 2009 vs 91.0% in Q1
2008.
Nuclear fleet capacity
factor of 97.8% in Q1 2009
vs 94.1% in Q1 2008.
Nuclear generation
increase of 7.6% supported
by uprates in capacity at
Hope Creek and Salem.
Gas units displaced coal in Q1
2009 with decline in gas prices
and higher than expected
demand in January.
13
PSEG Power – Fuel Costs
174
242
Oil & Gas
94
115
Coal
$23.20
$28.30
$ / MWh
13,117
13,700
Total Generation
(GWhr)
$304
$388
Total Fuel Cost
36
31
Nuclear
Total Fossil
($ millions)
$268
$357
2009
2008
Quarter ended March 31,
PSEG Power – Fuel Costs
Fuel costs reflect:
Higher cost coal contract
Decline in gas prices
Increase in nuclear generation
14
$0
$25
$50
$75
2008
2009
Market forces aided margin improvement in Q1 2009…
PSEG Power Gross Margin ($/MWh)
$51
$63
Quarter ended March 31,
… but, we don’t forecast similar improvement for full year.
15
PSEG Power – Q1 Operating Highlights
Q1 total output decline is a reflection of market conditions.
Weighted average combined cycle capacity factor of 30.4% vs 36.8% in Q1 2008.
Weighted average coal capacity factor of 53.0% vs 72.2% in Q1 2008.
Nuclear fleet capacity factor of 97.8%.
Hope Creek scheduled to exit refueling in early May.
Operations
Regulatory and Market Environment
Financial
Power markets affected by contraction in economic growth, excess supply of gas
and volatility.
FERC supported new CONE pricing for PJM’s RPM capacity auction; auction for
2012-2013 capacity begins May 4.
$325 million dividend paid to Enterprise in Q1.
16
PSE&G
2009 Q1 Review
PSE&G – Q1 2009 Earnings Summary
108
2,339
2,447
Total Operating Expenses
1
43
44
Taxes Other than Income Taxes
Operating Expenses
66
1,793
1,859
Energy Costs
35
360
395
Operation & Maintenance
6
143
149
Depreciation & Amortization
($ 0.02)
$ 0.26
$ 0.24
EPS from Operating Earnings*
(13)
136
123
Net Income
(13)
136
123
Operating Earnings
$ 117
$ 2,618
$ 2,735
Operating Revenues
Variance
Q1 2008
Q1 2009
$ millions (except EPS)
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
18
$.26
.03
(.05)
$.24
0.00
0.20
0.40
PSE&G EPS Reconciliation – Q1 2009 versus Q1 2008
Q1 2009
operating
earnings*
Q1 2008
operating
earnings*
Weather – Gas .03
Other Margin:
Transmission .01
Gas (.01)
O&M (.01)
Depreciation,
Taxes and Other
(.04)
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
19
PSE&G’s Margins are affected by Residential Sales and C&I
Demand and Customer charges.
Residential
Service
Charge, 5%
C&I Non-
Volume
Customer
and Demand
Charges, 45%
Street
Lighting, 10%
Residential
Sales, 40%
C&I Non-
Volume
Customer
and Demand
Charges, 15%
Residential
Sales, 60%
Residential
Service
Charge, 15%
C&I Sales,
10%
Electric
Gas
2009 Forecast
Total electric sales expected to decline by 1.5% – 2.0% vs. 2008.
Residential electric sales are expected to be flat versus last year.
Gas sales, on a weather normalized basis, are forecasted to
decline ~ 0.5%.
20
PSE&G – Q1 Operating Highlights
NJ BPU approved $694M of accelerated spending under capital economic
stimulus program.
PSE&G awaiting BPU approval of proposals on energy efficiency ($198M) and
Solar 4 All ($773M); requested approval of Solar Loan II to help finance
installation of 40MW.
2009 capital expenditures increased by $190M for economic stimulus program.
Some deterioration in aging of accounts receivable.
Operations
Regulatory and Market Environment
Financial
Impact on sales from contraction in economic growth offset by colder than normal
weather.
O&M costs under control; pension expense $16M higher vs. Q1 2008.
21
PSEG Energy Holdings
2009 Q1 Review
PSEG Energy Holdings – Q1 2009 Earnings Summary
(13)
13
--
Discontinued Operations, Net of Tax
1
(1)
--
Premium on Bond Redemption, Net of Tax
1
2
3
Mark-to-Market, Net of Tax
($0.05)
$ 0.06
$ 0.01
EPS from Operating Earnings*
($ 35)
$ 42
$ 7
Net Income
($ 24)
$ 28
$ 4
Operating Earnings
Variance
Q1 2008
Q1 2009
$ millions (except EPS)
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
23
.01
(.05)
(.02)
.03
(.01)
$.06
0.00
0.05
0.10
PSEG Energy Holdings EPS Reconciliation – Q1 2009 versus
Q1 2008
Q1 2009
operating
earnings*
Q1 2008
operating
earnings*
Texas Generation
Facilities
2009 Asset
Sales
Lease
Income
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
Effective Tax Rate
and Other
24
PSEG Energy Holdings – Q1 Operating Highlights
Administration focus on development of renewables, including wind, could favor
investment in storage technology (CAES).
Reached agreement on termination of several international leases reducing
portfolio by $76M.
Redeemed $280M of non-recourse debt at Texas facilities; repurchased $10M of
Energy Holdings senior notes.
Reached agreement to sell interest in PPN (India).
Operations
Regulatory and Market Environment
Financial
Texas – 2,000 MW gas-fired combined cycle capacity
$11.45
1,596
Q1 2009
$18.18
1,416
Q1 2008
Gross Margin ($/MWh)
Production (GWh)
Decline in margin a reflection of decline in gas prices.
25
PSEG
2009 Operating Earnings Guidance
$ 3.03
$ 1,542
($ 24)
$ 99
$ 360
$ 1,107
2008A*
$ 3.00 – $ 3.25
$ 1,520 – $ 1,650
($ 10) – $ 0
$ 0 – $ 20
$ 320 – $ 345
$ 1,210 – $ 1,285
2009E
Enterprise
Earnings per Share
Operating Earnings
PSEG Energy Holdings
PSE&G
PSEG Power
$ millions (except EPS)
* See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings.
27
PSEG Liquidity as of April 30, 2009
Expiration
Total
Primary
Usage at
Available
Company
Facility
Date
Facility
Purpose
4/30/2009
4/30/2009
PSEG
5-year Credit Facility
Dec-12
$1,000
1
CP Support/Funding/LCs
$13
$987
Bilateral Credit Facility
Jun-09
$100
CP Support/Funding
$0
$100
Uncommitted Bilateral Agreement
N/A
N/A
Funding
0
N/A
Power
5-Year Credit Facility
Dec-12
1,600
3
Funding/LCs
237
1,363
Bilateral Credit Facility
Jun-09
100
Funding/LCs
0
100
Bilateral Credit Facility
Sep-09
150
Funding/LCs
0
150
Bilateral Credit Facility
Sep-09
50
Funding
0
50
Bilateral Credit Facility
Mar-10
100
Funding/LCs
25
75
PSE&G
5-year Credit Facility
Jun-12
600
2
CP Support/Funding/LCs
122
478
Uncommitted Bilateral Agreement
N/A
N/A
Funding
2
N/A
Energy
5-year Credit Facility
Jun-10
136
Funding/LCs
3
133
Holdings
TOTAL
$3,836
$3,436
1
PSEG Facility reduces by $47 million in 12/2011
2
PSE&G Facility reduces by $28 million in 12/2011
3
Power Facility reduces by $75 million in 12/2011
28
Items Excluded from Income from Continuing Operations to
Reconcile to 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.
Pro-forma Adjustments, net of tax
2009
2008
2008
2007
Earnings Impact (in Millions)
Impairment of PPN
-
$
-
$
(9)
$
(2)
$
Impairment of Turboven
-
-
(4)
(7)
Loss on Sale of Chilquinta and Luz del Sur
-
-
-
(23)
Nuclear Decommissioning Trust (NDT) Fund Related Activity
(23)
(7)
(71)
12
Mark-to-Market (MTM)
(15)
5
16
10
Premium on Bond Redemption
-
(1)
(1)
(28)
Lease Reserves
-
-
(490)
-
Total Pro-forma to Operating Earnings
(38)
$
(3)
$
(559)
$
(38)
$
Fully Diluted Average Shares Outstanding (in Millions)
507
510
508
509
Per Share Impact (Diluted)
Impairment of PPN
-
$
-
$
(0.02)
$
-
$
Impairment of Turboven
-
-
(0.01)
(0.01)
Loss on Sale of Chilquinta and Luz del Sur
-
-
-
(0.05)
Nuclear Decommissioning Trust (NDT) Fund Related Activity
(0.04)
(0.02)
(0.14)
0.02
Mark-to-Market (MTM)
(0.03)
0.01
0.03
0.02
Premium on Bond Redemption
-
-
-
(0.06)
Lease Reserves
-
-
(0.96)
-
Total Pro-forma to Operating Earnings
(0.07)
$
(0.01)
$
(1.10)
$
(0.08)
$
December 31,
For the Quarters Ended
March 31,
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings
(Unaudited)
For the Twelve Months Ended
29