 Public Service Enterprise Group PSEG Earnings Conference Call 3 rd Quarter 2011 November 1, 2011 EXHIBIT 99.1 |
 1 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, 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 “will”, “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 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 trading 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, • any inability to realize anticipated tax benefits or retain tax credits, • 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, • adverse changes in the demand for or price of the capacity and energy that we sell into wholesale electricity markets, • increase in competition in energy markets in which we compete, • 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 discount rates and 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, we specifically disclaim any obligation to do so, even if our internal estimates change, unless otherwise required by applicable securities laws. |
 2 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 two slides in this presentation include 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. |
 PSEG 2011 Q3 Review Ralph Izzo Chairman, President and Chief Executive Officer |
 4 Q3 2011 Earnings Summary 20 29 Discontinued Operations, Net of Tax $ 1.03 $ 0.83 EPS from Operating Earnings* $ 567 $ 294 Net Income 547 265 Income from Continuing Operations 26 (155) Reconciling Items, Net of Tax $ 521 $ 420 Operating Earnings 2010 2011 $ millions (except EPS) Quarter Ended September 30 * See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 5 YTD Earnings Summary 15 96 Discontinued Operations, Net of Tax $ 2.53 $ 2.27 EPS from Operating Earnings* $ 1,282 $ 1,143 Net Income 1,267 1,047 Income from Continuing Operations (14) (105) Reconciling Items, Net of Tax $ 1,281 $ 1,152 Operating Earnings 2010 2011 $ millions (except EPS) Nine Months Ended September 30 * See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 6 PSEG – Q3 2011: Company Execution Strong in Quarter Q3 2011 results Solid Q3 operating earnings per share of $0.83 versus $1.03 in Q3 2010, despite considerable challenges Hurricane Irene was the worst storm in company history; caused service interruptions to over 800,000 customers throughout NJ Fuel flexibility and active coal management Continued focus on operational goals Market conditions EPA air requirements expected to influence markets NJBPU continued hearings on need for additional subsidized capacity Federal district court will allow PSEG’s LCAPP suit to proceed (denied BPU’s motion to dismiss on October 19) Company position continues to receive recognition 2011 Dow Jones Sustainability Index - World Index Leveraged lease reserve Energy Holdings fully reserved its $264 million gross investment in a lease receivable from Dynegy resulting in an after-tax charge of $170 million, or $0.34 per share |
 Over 6,000 PSEG employees supported restoration efforts in the aftermath of Hurricane Irene |
 8 2009 Operating Earnings* 2010 Operating Earnings* 2011 Guidance $2.50 - $2.75E PSEG – Maintaining 2011 EPS Guidance $3.09 * See page 38 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. $3.12 $2.27 EPS YTD Actual $2.75 to $2.50 Strong 9-month results support full-year 2011 EPS at upper end of guidance. |
 PSEG 2011 Q3 Operating Company Review Caroline Dorsa Executive Vice President and Chief Financial Officer |
 10 Q3 Operating Earnings by Subsidiary $ 521 4 24 155 $ 338 2010 $ 420 4 4 154 $ 258 2011 Operating Earnings Earnings per Share 0.01 0.01 Enterprise $ 1.03 $ 0.83 Operating Earnings* 0.05 0.01 PSEG Energy Holdings 0.30 0.30 PSE&G $ 0.67 $ 0.51 PSEG Power 2010 2011 $ millions (except EPS) Quarter Ended September 30 * See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 11 YTD Operating Earnings by Subsidiary $ 1,281 12 43 347 $ 879 2010 $ 1,152 14 6 422 $ 710 2011 Operating Earnings Earnings per Share 0.02 0.03 Enterprise $ 2.53 $ 2.27 Operating Earnings* 0.09 0.01 PSEG Energy Holdings 0.69 0.83 PSE&G $ 1.73 $ 1.40 PSEG Power 2010 2011 $ millions (except EPS) Nine Months Ended September 30 * See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 12 $1.03 (0.16) 0.0 (0.04) $0.83 0.00 0.20 0.40 0.60 0.80 1.00 1.20 PSEG EPS Reconciliation – Q3 2011 versus Q3 2010 Q3 2011 Operating Earnings* Q3 2010 Operating Earnings* Lower Pricing (0.14) Lower Generating Volumes (0.02) Coal Optimization 0.03 WPT 0.03 D&A (0.02) Interest (0.01) O&M (0.01) Other (0.02) PSEG Power Margins Renewables and Capital Stimulus 0.02 Transmission 0.01 O&M (0.01) D&A (0.01) Other (0.01) PSE&G PSEG Energy Holdings Absence of Gain on Lease Sales (0.03) Other (0.01) •See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 13 $2.53 (0.33) 0.14 (0.08) 0.01 $2.27 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 PSEG EPS Reconciliation – YTD 2011 versus YTD 2010 Nine Months Ended 9/30/2010 Operating Earnings* Interest Lower Pricing (0.22) Lower Generating Volumes (0.03) Migration (0.02) Coal Optimization 0.06 O&M (0.06) D&A and Interest (0.06) WPT 0.02 Other (0.02) PSEG Power Margins: Rate Relief 0.04 Transmission 0.03 Renewables, Capital Stimulus and Other 0.06 O&M 0.04 Weather 0.03 D&A (0.03) Taxes (0.02) Other (0.01) PSE&G PSEG Energy Holdings Enterprise Absence of Gain on Lease Sales and Impairments (0.04) ES&P Investment Write-off (0.01) Other (0.03) * See page 37 for Items excluded from Net Income to reconcile to Operating Earnings. Nine Months Ended 9/30/2011 Operating Earnings* |
 PSEG Power 2011 Q3 Review |
 15 PSEG Power – Q3 2011 EPS Summary (8) 16 8 Mark-to-Market, Net of Tax (3) 10 7 NDT Funds Related Activity, Net of Tax $ (125) $ 1,523 $ 1,398 Operating Revenues $ (0.16) $ 0.67 $ 0.51 EPS from Operating Earnings* $ (82) $ 384 $ 302 Net Income (80) 338 258 Operating Earnings Variance Q3 2010 Q3 2011 $ millions (except EPS) * See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 16 $0.51 (0.02) (0.04) (0.10) $0.67 0.00 0.25 0.50 0.75 1.00 Lower Pricing (0.14) Lower Generating Volume (0.02) Coal Optimization 0.03 WPT 0.03 PSEG Power EPS Reconciliation – Q3 2011 versus Q3 2010 Q3 2011 Operating Earnings* Q3 2010 Operating Earnings* Higher D&A for BET and Lower IDC Offset (0.03) O&M (0.01) * See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Other |
 17 PSEG Power – Generation Measures 7,309 7,417 3,131 2,536 5,073 4,473 0 10,000 20,000 2010 2011 Quarter Ended September 30 Total Nuclear Total Coal* Total Oil & Natural Gas * Includes figures for Pumped Storage. PSEG Power – Generation (GWh) 14,426 15,513 22,577 22,652 8,647 7,039 12,692 12,088 0 10,000 20,000 30,000 40,000 50,000 2010 2011 Nine Months Ended September 30 41,779 43,916 |
 18 PSEG Power – Generation Measures 51 54 20 17 29 29 0 50 100 2010 2011 Nine Months Ended September 30 Total Nuclear Total Coal* Oil & Natural Gas * Includes figures for Pumped Storage PSEG Power – % Generation Contribution PSEG Power – Capacity Factors (%) 2010 2011 Nuclear** 93.1% 93.3% Coal NJ 43% 33% PA 86% 81% CT 39% 19% Combined Cycle PJM and NY 55% 54% Nine Months Ended September 30 **Total Nuclear Fleet - PS Share |
 19 Hedging Update… … our strategy is to hedge our base load generation long term. Contracted Energy* 2011 2012 2013 Oct - Dec Volume TWh 8 36 36 Base Load % Hedged 100% 80-85% 40-45% (Nuclear and Base Load Coal) Price $/MWh $68** $63 $61 Volume TWh 5 22 22 Intermediate Coal, Combined % Hedged 46% Cycle, Peaking Price $/MWh $68** $63 $61 Volume TWh 13 58 58 Total % Hedged 80% 50-55% 25-30% Price $/MWh $68** $63 $61 * Hedge percentages and prices as of September 30, 2011 for the October 2011 and forward time frame. ** Average price for full-year 2011. 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. |
 20 PSEG Power – Fuel Costs 185 235 Oil & Gas 99 115 Coal 22.81 25.21 $ / MWh 14,426 15,513 Total Generation (GWh) 329 391 Total Fuel Cost 45 41 Nuclear Total Fossil ($ millions) 283 350 2011 2010 Quarter Ended September 30 PSEG Power – Fuel Costs 530 603 Oil & Gas 272 328 Coal 22.43 24.00 $ / MWh 41,778 43,916 Total Generation (GWh) 937 1,054 Total Fuel Cost 135 123 Nuclear Total Fossil ($ millions) 802 931 2011 2010 Nine Months Ended September 30 |
 21 PSEG Power – Gross Margin Performance $0 $25 $50 $75 2010 2011 $0 $25 $50 $75 2010 2011 $54 $57 Quarter Ended September 30 Nine Months Ended September 30 $53 $55 In Q3, PJM total gross margin was influenced primarily by lower realized energy and capacity prices Customer migration away from BGS has slowed; full-year estimate reduced to an average of 32%-33%, from 34% Nuclear performed well in the quarter despite severe weather Lower volumes and pricing. $18 New York Regional Performance $29 $734 Gross Margin ($M) Q3 2011 Performance Region Lower pricing and volume offset by active management of coal inventory. New England Q3 contribution to gross margin declined by ($122M) versus a year ago. Lower realized prices resulting from the roll off of higher priced BGS hedges and lower capacity prices combined with lower overall volumes. PJM PSEG Power Gross Margin ($/MWh)* *Excludes Texas. |
 22 PSEG Power – Q3 Operating Highlights Nuclear fleet capacity factor of 90.6% for Q3 and 93.3% for YTD; Salem 1 refueling outage underway Combined cycle capacity factor of 58% in Q3 2011 vs. 61% in Q3 2010 Coal capacity factor of 46% in Q3 2011 vs. 56% in Q3 2010 Operations Financial Power markets affected by hot, early summer in NJ and the release of CSAPR rules Weak economy and low natural gas prices continue to dampen power prices, as heat rates and spark spreads have improved Actively managing coal inventory Issued $250 million of 2.75% Senior Notes due September 2016 and $250 million of 4.15% Senior Notes due September 2021 Debt as of September 30, 2011 at 38% of capitalization Regulatory and Market Environment |
 PSE&G 2011 Q3 Review |
 24 PSE&G – Q3 2011 Earnings Summary * See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. $ millions (except EPS) Q3 2011 Q3 2010 Variance Operating Revenues $ 1,841 $ 2,007 $ (166) Operating Expenses Energy Costs 943 1,115 (172) Operation & Maintenance 342 327 15 Depreciation & Amortization 197 209 (12) Taxes Other than Income Taxes 31 31 - Total Operating Expenses 1,513 1,682 (169) Operating Earnings / Income from Continuing Operations / Net Income $ 154 $ 155 $ (1) EPS from Operating Earnings* $ 0.30 $ 0.30 - |
 25 $0.30 0.03 $0.30 (0.01) (0.02) 0.00 0.10 0.20 0.30 PSE&G EPS Reconciliation – Q3 2011 versus Q3 2010 Q3 2011 Operating Earnings* Q3 2010 Operating Earnings* O&M * See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Renewables and Capital Stimulus 0.02 Transmission 0.01 D&A (0.01) Other (0.01) |
 26 56 33 26 147 55 27 0 50 100 150 200 250 2010 Normal 2011 July August September Q3 2011 was warmer than normal but cooler than Q3 2010 Third Quarter Number of Hours Where the Temperature was Equal or Greater than 90 o F 146 172 93 230 5 …and included the wettest August on record with 23 inches of rain in NJ. |
 27 PSE&G Capital Spending: 2011-2013 PSE&G Capital Spending: 2011-2013 $5,245 $1,780 $1,845 $1,620 Total $640 $75 $235 $330 Renewables/EMP $1,685 $425 $660 $600 Distribution $2,920 $1,280 $950 $690 Transmission 2011-2013E 2013E 2012E 2011E ($ Millions) Capital program provides growth in rate base of ~11% per year from 2010 base of $7.8 Billion Transmission investment represents over 50% of planned capex over 2011-2013 Supportive regulatory treatment *Estimate |
 28 PSE&G – Q3 Operating Highlights S-R line added to the new federal Rapid Response Team project list EMP review ongoing; finalization expected early 2012 BPU reviewing utility performance related to Hurricane Irene response PSE&G has deferred incremental, storm-related O&M costs of approximately $29 million Issued $250 million of 0.85% Medium Term Notes due August 2014 in August Filed at FERC, under its formula rate mechanism, for an increase in transmission revenues of $94 million on an annualized basis to be effective 1/1/2012 Operations Financial Hurricane Irene interrupted service to over 800,000 customers Most customers were restored within 2 days Economic indicators stalled Temperature Humidity Index was 34% above normal but -0.6% below Q3 2010’s record heat Regulatory and Market Environment |
 PSEG Energy Holdings 2011 Q3 Review |
 30 PSEG Energy Holdings – Q3 2011 Earnings Summary (170) - (170) Reconciling Items Excluded from Continuing Operations $ (0.04) $ 0.05 $ 0.01 EPS from Operating Earnings* $ (190) $ 24 $ (166) Net Income (Loss) $ (20) $ 24 $ 4 Operating Earnings Variance Q3 2010 Q3 2011 $ millions (except EPS) * See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 31 $0.01 (0.01) (0.03) $0.05 0.00 0.01 0.02 0.03 0.04 0.05 0.06 PSEG Energy Holdings EPS Reconciliation – Q3 2011 versus Q3 2010 Q3 2011 Operating Earnings* Q3 2010 Operating Earnings* Other * See page 37 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Absence of Gain on Lease Sales |
 32 PSEG Energy Holdings – Q3 Operating Highlights Financial Energy Holdings has fully reserved its $264 million gross investment in the lease receivable from Dynegy, resulting in an after-tax charge of $170 million, or $0.34 per share Continuing to review opportunities for additional investments in solar under PPA arrangements |
 PSEG |
 34 PSEG 2011 Operating Earnings Guidance - By Subsidiary $ 3.12 $ 1,584 $ 14 $ 49 $ 430 $ 1,091 2010A $ 2.50 – $ 2.75 $ 1,265 – $ 1,395 $ 5 – $ 15 $ 0 – $ 5 $ 495 – $ 520 $ 765 – $ 855 2011E Enterprise Earnings per Share Operating Earnings* PSEG Energy Holdings PSE&G PSEG Power $ millions (except EPS) * See page 38 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 35 PSEG – Q3 2011 Utility capital spending will result in ~11% rate base growth CAGR – primarily driven by transmission investment Migration impact on margin is declining as discounts prove more challenging versus a lower BGS price to beat Forward price curve showing signs of sustained strength with expanding heat rates supporting higher pricing in outer years |
 36 PSEG Liquidity as of September 30, 2011 Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Apr-16 $600 $0 $600 5-Year Credit Facility (Power) Dec-12 $1,600 1 $120 $1,480 5-Year Credit Facility (Power) Apr-16 $1,000 $0 $1,000 5-Year Bilateral - Credit Suisse (Power) Sep-15 $100 $100 $0 5-year Credit Facility (PSEG) Dec-12 $500 2 $14 $486 5-year Credit Facility (PSEG) Apr-16 $500 $0 $500 Total $4,300 $4,066 $958 PSE&G ST Investment $215 Total Liquidity Available $5,239 Total Parent / Power Liquidity $4,424 1 Power Facility reduced by $75 million in 12/2011 2 PSEG Facility reduced by $23 million in 12/2011 PSEG / Power PSEG Money Pool ST Investment |
 37 Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Please see Page 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Pro-forma Adjustments, net of tax 2011 2010 2011 2010 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 7 $ 10 $ 49 $ 30 $ Gain (Loss) on Mark-to-Market (MTM) (PSEG Power) 8 16 16 28 Lease Transaction Reserves (Energy Holdings) (170) - (170) - Market Transition Charge Refund (PSE&G) - - - (72) Total Pro-forma adjustments (155) $ 26 $ (105) $ (14) $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 507 507 Per Share Impact (Diluted) Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.01 $ 0.02 $ 0.10 $ 0.06 $ Gain (Loss) on MTM (PSEG Power) 0.02 0.03 0.03 0.05 Lease Transaction Reserves (Energy Holdings) (0.34) - (0.34) - Market Transition Charge Refund (PSE&G) - - - (0.14) Total Pro-forma adjustments (0.31) $ 0.05 $ (0.21) $ (0.03) $ September 30, September 30, For the Three Months Ended For the Nine Months Ended PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) |
 38 Items Excluded from Income from Continuing Operations 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 Net Income. Pro-forma Adjustments, net of tax 2010 2009 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 46 $ 9 $ Gain (Loss) on Mark-to-Market (MTM) (PSEG Power) (1) (11) Net Reversal of Lease Transaction Reserves (Energy Holdings) - 29 Market Transition Charge Refund (PSE&G) (72) - Total Pro-forma adjustments (27) $ 27 $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 Per Share Impact (Diluted) Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.09 $ 0.02 $ Gain (Loss) on MTM (PSEG Power) - (0.02) Net Reversal of Lease Transaction Reserves (Energy Holdings) - 0.05 Market Transition Charge Refund (PSE&G) (0.14) - Total Pro-forma adjustments (0.05) $ 0.05 $ December 31, PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) For the Twelve Months Ended |