 Public Service Enterprise Group PSEG Earnings Conference Call 1 st Quarter 2012 May 2, 2012 Exhibit 99.1 |
 1 Forward-Looking Statement Readers are cautioned that statements contained in this presentation about our 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 “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 the demand for or 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 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, • any inability to achieve or continue to sustain, our expected levels of operating performance, • increase in competition in energy supply markets as well as competition for certain rate-based transmission projects, • 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 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. |
 PSEG 2012 Q1 Review Ralph Izzo Chairman, President and Chief Executive Officer * * * * * * * * |
 4 Q1 Earnings Summary $ millions (except EPS) 2012 2011 Operating Earnings $ 432 $ 431 Reconciling Items, Net of Tax 61 31 Income from Continuing Operations 493 462 Discontinued Operations, Net of Tax - 64 Net Income 493 526 EPS from Operating Earnings* $ 0.85 $ 0.85 Quarter ended March 31 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 5 PSEG – Q1 2012 Highlights Operating Earnings of $0.85 vs. Q1 2011 of $0.85 per share Results stronger than expected Maintaining 2012 earnings guidance of $2.25 - $2.50 per share A challenging environment; strong production from Nuclear; improved availability of CCGTs and Fossil’s control of O&M supported results PSE&G earning its return; investments on track Susquehanna-Roseland transmission line on track for October 2012 decision from National Park Service Power on schedule to add 400 MW of new peaking capacity in June at NJ and CT sites Financial condition remains strong |
 6 2010 Operating Earnings* 2011 Operating Earnings* 2012 Guidance $2.25 - $2.50E PSEG – Maintaining 2012 Guidance $3.12 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. $2.74 |
 PSEG 2012 Q1 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer * * * * * * * * * |
 8 Q1 Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2012 2011 2012 2011 PSEG Power $ 196 $ 267 $ 0.39 $ 0.53 PSE&G 197 163 0.39 0.32 PSEG Energy Holdings/Enterprise 39 1 0.07 0.00 Operating Earnings* $ 432 $ 431 $ 0.85 $ 0.85 Quarter ended March 31 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 9 $0.85 .07 .07 (.14) $0.85 0.00 0.25 0.50 0.75 1.00 PSEG EPS Reconciliation – Q1 2012 versus Q1 2011 Lower Pricing and Lower Volume (.10) Lower Capacity (.07) Migration (.04) O&M .04 Financing Costs .02 Misc. and Other .01 Transmission Formula Rates .03 Other Investments .01 Weather (.02) D&A (.01) O&M (.01) Taxes .06 Other .01 Q1 2012 Operating Earnings* Q1 2011 Operating Earnings* PSEG Power PSE&G Energy Holdings/ Enterprise Taxes .08 Lower Lease Income (.01) * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 PSEG Power 2012 Q1 Review * * * * * * * * * |
 11 PSEG Power – Q1 2012 EPS Summary $ millions (except EPS) Q1 2012 Q1 2011 Variance Operating Revenues $ 1,561 $ 1,967 $ (406) Operating Earnings 196 267 (71) NDT Funds Related Activity, Net of Tax 5 27 (22) Mark-to-Market, Net of Tax** 52 4 48 Income from Continuing Operations 253 298 (45) Discontinued Operations, Net of Tax - 64 (64) Net Income 253 362 (109) EPS from Operating Earnings* $ 0.39 $ 0.53 $ (0.14) * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. **Includes the financial impact from positions with forward delivery months. |
 12 $0.39 .06 (.21) .01 $0.53 0.00 0.10 0.20 0.30 0.40 0.50 0.60 Lower Pricing and Lower Volume (.10) Lower Capacity (.07) Migration (.04) PSEG Power EPS Reconciliation – Q1 2012 versus Q1 2011 Q1 2012 Operating Earnings* Q1 2011 Operating Earnings* O&M .04 Financing Costs .02 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Taxes and Other |
 13 PSEG Power – Generation Measures 7,928 7,970 3,790 4,043 2,312 1,130 0 7,500 15,000 2011 2012 Quarter ended March 31 Total Nuclear Total Coal* Oil & Natural Gas * Includes figures for Pumped Storage PSEG Power – Generation (GWh) 14,030 13,143 Quarter ended March 31 PSEG Power – Capacity Factors (%) 2011 2012 Nuclear 99% 98% Coal NJ (Coal/Gas) 29% 2% PA 83% 63% CT 24% 2% Combined Cycle PJM and NY 53% 57% |
 14 PSEG Power – Fuel Costs Quarter ended March 31 ($ millions) 2011 2012 Coal 90 39 Oil & Gas 191 128 Total Fossil 281 167 Nuclear 46 50 Total Fuel Cost 327 217 Total Generation (GWh) 14,030 13,143 $ / MWh 23.31 16.51 PSEG Power – Fuel Costs* * Based on Operating Earnings. |
 15 Hedging Update… Contracted Energy* * Hedge percentages and prices as of March 31, 2012. 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 25 34 34 Base Load % Hedged 100% 85-90% 35-40% (Nuclear and Base Load Coal) Price $/MWh $59 $53 $55 Volume TWh 15-16 18-20 19-21 Intermediate Coal, Combined % Hedged 20-25% 0 0 Cycle, Peaking Price $/MWh $59 Volume TWh 40-41 52-54 53-55 Total % Hedged 70-75% 55-60% 20-25% Price $/MWh $59 $53 $55 Apr-Dec 2012 2013 2014 |
 16 $0 $25 $50 $75 2010 2011 2012 $55 $55 $46 PSEG Power – Gross Margin Performance Margins declined with reduction in energy and capacity pricing Migration volumes in line with expectations, margins influenced by warmer-than-normal weather Output influenced by weather and compression in dark spreads Regional Performance Region Q1 2012 Gross Margin* ($M) 2012 Performance PJM $579 Reduction in energy and capacity pricing primary influence on margin. Pricing was often set by low cost gas in the East, with decline in weather related demand and outages affecting power prices. New England $11 Performance influenced by compression in dark spreads. New York $10 CCGT performance benefits from expansion in heat rates. PSEG Power Gross Margin* ($/MWh) Quarter ended March 31 * Based on Operating Earnings. |
 17 PSEG Power – Q1 2012 Operating Highlights Q1 Output down 6.3% on lower coal dispatch Capacity factor for PS share of nuclear fleet at 98.2% Combined cycle output up 8.3%; improvement in equivalent availability factor O&M reductions at fossil stations in response to market price decline Operations Regulatory and Market Environment Financial 2012 BGS auction priced at $83.88/MWh vs. $103.72/MWh for expiring contract 2012 anticipated coal and nuclear output hedged at average price of $59/MWh Customer migration approximately 36% for the quarter Power interest savings from debt retirements Power’s total debt as a percentage of capital at March 31 was 33% |
 PSE&G 2012 Q1 Review * * * * * * * * * |
 19 PSE&G – Q1 Earnings Summary $ millions (except EPS) Q1 2012 Q1 2011 Variance Operating Revenues $ 1,939 $ 2,306 $ (367) Operating Expenses Energy Costs 1,002 1,366 (364) Operation & Maintenance 376 368 8 Depreciation & Amortization 190 179 11 Taxes Other than Income Taxes 29 43 (14) Total Operating Expenses 1,597 1,956 (359) Operating Earnings / Net Income 197 163 34 EPS from Operating Earnings* $ 0.39 $ 0.32 $ 0.07 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 20 $0.39 .06 (.03) .04 $0.32 0.00 0.10 0.20 0.30 0.40 PSE&G EPS Reconciliation – Q1 2012 versus Q1 2011 Q1 2012 Operating Earnings* Q1 2011 Operating Earnings* * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Transmission Formula Rates .03 Other Investments .01 Taxes Weather (.02) D&A (.01) O&M (.01) Other .01 |
 21 PSE&G – Q1 Operating Highlights NPS selected existing path as preferred route for S-R line; Final EIS October 2012 Awaiting BPU decision on construction of the North-Central Reliability Project Annual transmission revenue increase of $94 million effective on January 1, 2012 PSE&G earned its authorized return Capital cost for S-R line raised to $790 million from up to $750 million Operations Regulatory and Market Environment Financial Warmest Q1 on record since 1970 Heating degree days were 21% below normal and Q1 2011 O&M remains under control |
 PSEG Energy Holdings/Enterprise 2012 Q1 Review * * * * * * * * * |
 23 PSEG Energy Holdings/Enterprise – Q1 2012 Earnings Summary $ millions (except EPS) Q1 2012 Q1 2011 Variance Operating Earnings $ 39 $ 1 38 Lease Related Activity 4 - 4 Net Income 43 1 42 EPS from Operating Earnings* $ 0.07 $ - $ 0.07 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 24 PSEG Energy Holdings/Enterprise EPS Reconciliation – Q1 2012 versus Q1 2011 0.00 0.05 0.10 Q1 2012 Operating Earnings* Q1 2011 Operating Earnings* * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Taxes .08 Lower Lease Income (.01) $0.00 .07 $0.07 |
 25 PSEG Energy Holdings/Parent – Q1 Operating Highlights Financial Definitive agreement reached with the IRS that settles the tax treatment for challenged lease transactions (LILO/SILO) for all tax years Settlement reached with the IRS for all federal audit issues for tax years 1997-2006 10-year LIPA management services agreement begins January 2014 Expanded interest in solar with purchase of 25 MW facility for $75 million |
 PSEG * * * * * * * * * * * |
 27 PSEG Financial Highlights 2012 operating earnings guidance of $2.25 - $2.50 per share Guidance by operating company Financial risk associated with LILO/SILO investments eliminated Financial position strengthened Dividend increase continues practice of returning cash to shareholders Debt as a percentage of Capital remains strong at 39.8% at March 31 Renewed and extended $2.1 billion of credit facilities for 5-year period; credit capacity of $4.3 billion Funded planned $135 million 2012 contribution to pension and other post-retirement programs in Q1 2012 |
 28 PSEG 2012 Operating Earnings Guidance - PSEG 2012 Operating Earnings Guidance - By Subsidiary By Subsidiary $ millions (except EPS) 2012E 2011A PSEG Power $575 – $665 $ 845 PSE&G $530 – $560 $ 521 PSEG Energy Holdings/Enterprise $35 – $45 $ 23 Operating Earnings* $1,140 – $1,270 $ 1,389 Earnings per Share $ 2.25 – $ 2.50 $2.74 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 29 PSEG Liquidity as of March 31, 2012 Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Apr-16 $600 $29 $571 5-Year Credit Facility (Power) Mar-17 $1,600 $78 $1,522 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) Mar-17 $500 $12 $488 5-year Credit Facility (PSEG) Apr-16 $500 $0 $500 Total $4,300 $4,081 $858 PSE&G ST Investment $0 Total Liquidity Available $4,939 Total Parent / Power Liquidity $4,368 PSEG / Power PSEG Money Pool ST Investment |
 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. A |