 Public Service Enterprise Group PSEG Earnings Conference Call 2 Quarter 2012 July 31, 2012 EXHIBIT 99.1 nd |
 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, • 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 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 Q2 Review Caroline Dorsa EVP and Chief Financial Officer |
 4 Q2 Earnings Summary $ millions (except EPS) 2012 2011 Operating Earnings $ 215 $ 301 Reconciling Items, Net of Tax (4) 19 Income from Continuing Operations $ 211 $ 320 Discontinued Operations, Net of Tax - 3 Net Income $ 211 $ 323 EPS from Operating Earnings* $ 0.43 $ 0.59 Quarter ended June 30 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 5 First Half 2012 Earnings Summary $ millions (except EPS) 2012 2011 Operating Earnings $ 647 $ 732 Reconciling Items, Net of Tax 57 50 Income from Continuing Operations $ 704 $ 782 Discontinued Operations - 67 Net Income $ 704 $ 849 EPS from Operating Earnings * $ 1.28 $ 1.44 Six months ended June 30 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 6 PSEG – Q2 2012 Highlights Operating Earnings of $0.43 vs. $0.59 per share in Q2 2011 Q2 results met operational and financial targets Continued strong availability of CCGTs, strong production from Nuclear, and Fossil’s control of O&M supported results Focused on financially disciplined growth North Central Reliability transmission project received BPU approval Construction phase of $3.5 billion transmission projects underway Added 400 MW of new peaking capacity in NJ and CT in time for summer PSE&G seeking BPU approval to spend up to $883 million to expand Solar 4 All and Solar Loan programs Competitive market issues under review US District Court action on LCAPP litigation PJM reviewing future MOPR process |
 7 PSEG – Maintaining 2012 Guidance * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. $2.25 - $2.50E $3.12 $2.74 |
 PSEG 2012 Q2 Operating Company Review |
 9 Q2 Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2012 2011 2012 2011 PSEG Power $ 110 $ 186 $ 0.22 $ 0.36 PSE&G 101 105 0.20 0.21 PSEG Energy Holdings/ Enterprise 4 10 0.01 0.02 Operating Earnings * $ 215 $ 301 $0.43 $ 0.59 Quarter ended June 30 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 10 $0.43 (.01) (.01) (.14) $0.59 0.00 0.25 0.50 0.75 PSEG EPS Reconciliation – Q2 2012 versus Q2 2011 Lower Pricing (.05) Lower Volume (.02) Lower Capacity (.03) O&M (.02) Financing Costs .01 Other (.03) Transmission .02 Weather (.01) O&M (.03) D&A (.01) Other .02 Q2 2012 Operating Earnings* Q2 2011 Operating Earnings* PSEG Power PSE&G Energy Holdings/ Enterprise Lower Lease Income * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 11 First Half Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2012 2011 2012 2011 PSEG Power $ 306 $ 452 $ 0.60 $ 0.89 PSE&G 298 268 0.59 0.53 PSEG Energy Holdings/ Enterprise 43 12 0.09 0.02 Operating Earnings* $ 647 $ 732 $ 1.28 $ 1.44 Six months ended June 30 •See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 12 $1.28 .07 .06 (.29) $1.44 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 PSEG EPS Reconciliation – YTD 2012 versus YTD 2011 YTD 2012 Operating Earnings* YTD 2011 Operating Earnings* Lower Pricing (.16) Lower Volume (.03) Lower Capacity (.11) Financing Costs .03 O&M .02 Weather (.01) Other (.03) PSEG Power O&M (.04) PSE&G PSEG Energy Holdings/ Enterprise Tax settlement * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Transmission .05 Renewables and Other Investments .01 D&A (.02) Taxes .07 Other .01 Weather and Demand (.02) |
 PSEG Power 2012 Q2 Review |
 14 PSEG Power – Q2 2012 EPS Summary $ millions (except EPS) Q2 2012 Q2 2011 Variance Operating Revenues $ 985 $ 1,285 $ (300) Operating Earnings 110 186 (76) NDT Funds Related Activity, Net of Tax 4 15 (11) Mark-to-Market, Net of Tax** (10) 4 (14) Income from Continuing Operations 104 205 (101) Discontinued Operations, Net of Tax - 3 (3) Net Income 104 208 (104) EPS from Operating Earnings* $ 0.22 $ 0.36 $ (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. |
 15 (.01) (.13) $0.22 $0.36 0.00 0.10 0.20 0.30 0.40 0.50 Lower Pricing (.05) Lower Volume (.02) Lower Capacity (.03) Other (.03) PSEG Power EPS Reconciliation – Q2 2012 versus Q2 2011 Q2 2012 Operating Earnings* Q2 2011 Operating Earnings* O&M (.02) Financing Costs .01 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 16 PSEG Power – Generation Measures 7,307 7,075 3,824 4,177 2,191 1,454 0 7,500 15,000 2011 2012 Quarter ended June 30 Total Nuclear Total Coal* Oil & Natural Gas * Includes figures for Pumped Storage. Includes Hudson and Mercer with Gas. PSEG Power – Generation (GWh) 13,322 12,706 Quarter ended June 30 PSEG Power – Capacity Factors (%) 2011 2012 Nuclear 90.3% 87.2% Coal NJ (Coal/Gas) 33% 14% PA 77% 64% CT 7% 3% Combined Cycle PJM and NY 52% 57% |
 17 PSEG Power – Generation Measures 15,236 15,045 8,219 4,503 2,585 7,614 0 10,000 20,000 30,000 2011 2012 Six Months ended June 30 Total Nuclear Total Coal* Oil & Natural Gas * Includes figures for Pumped Storage. Includes Hudson and Mercer with Gas. PSEG Power – Generation (GWh) 27,353 25,849 Six Months ended June 30 PSEG Power – Capacity Factors (%) 2011 2012 Nuclear 94.6% 92.7% Coal NJ (Coal/Gas) 31% 8% PA 80% 63% CT 15% 3% Combined Cycle PJM and NY 53% 57% |
 18 PSEG Power – Fuel Costs Quarter ended June 30 ($ millions) 2011 2012 Coal 83 39 Oil & Gas 155 113 Total Fossil 238 152 Nuclear 44 48 Total Fuel Cost 282 200 Total Generation (GWh) 13,322 12,706 $ / MWh 21.17 15.74 PSEG Power – Fuel Costs* * Based on Operating Earnings. YTD ended June 30 ($ millions) 2011 2012 Coal 173 77 Oil & Gas 345 241 Total Fossil 518 318 Nuclear 90 98 Total Fuel Cost 608 416 Total Generation (GWh) 27,353 25,849 $ / MWh 22.23 16.09 |
 Regional Performance Region Q2 2012 Gross Margin* ($M) 2012 Performance PJM $521 Lower pricing and lower volumes continued to negatively impact margin. New England $14 Lower pricing and volumes impacted margin. New York $14 Higher generation output and realized margin. 19 $51 $49 $43 PSEG Power – Gross Margin Performance Margins declined with reduction in energy and capacity pricing Migration volumes in line with expectations, margins influenced by warmer-than-normal weather Output influenced by weather and compression in PJM dark spreads PSEG Power Gross Margin* ($/MWh) Quarter ended June 30 * Based on Operating Earnings. $75 $50 $25 $0 2010 2011 2012 |
 20 Hedging Update… Contracted Energy* * Hedge percentages and prices as of June 30, 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 17 35 35 Base Load % Hedged 100% 85-90% 45-50% (Nuclear and Base Load Coal) Price $/MWh $58 $54 $54 Volume TWh 10 18 19 Intermediate Coal, Combined % Hedged 30-35% 0% 0% Cycle, Peaking Price $/MWh $58 $54 $54 Volume TWh 28-30 52-54 53-55 Total % Hedged 70-75% 55-60% 25-30% Price $/MWh $58 $54 $54 Jul -Dec 2012 2013 2014 |
 21 PSEG Power – Q2 2012 Operating Highlights Q2 output down 4.6% on lower coal dispatch and a Hope Creek refueling outage Planned Hope Creek outage moved capacity factor for the nuclear fleet to 87.2% for Q2, 92.7% for the YTD period Combined cycle output up 10%; continued strong equivalent availability factor Power brought 400 MW of new capacity in service in June Operations Regulatory and Market Environment Financial Power cleared 9,000 MW in the 2015/2016 RPM auction at an average price of $167/MW-day; preserving optionality of HEDD sites 2012 anticipated coal and nuclear base load output hedged at average price of $58/MWh Customer migration approximately 38% for the quarter Power’s total debt as a percentage of capital at June 30 was 34% Moody’s affirmed Power’s Baa1 senior credit rating with a Stable outlook Fitch affirmed Power’s BBB+ senior credit rating with a Stable outlook + |
 PSE&G 2012 Q2 Review |
 23 PSE&G – Q2 Earnings Summary $ millions (except EPS) Q2 2012 Q2 2011 Variance Operating Revenues $ 1,407 $ 1,571 $ (164) Operating Expenses Energy Costs 622 815 (193) Operation & Maintenance 350 304 46 Depreciation & Amortization 188 172 16 Taxes Other than Income Taxes 20 28 (8) Total Operating Expenses 1,180 1,319 (139) Operating Earnings / Net Income 101 105 (4) $ 0.20 $ 0.21 $ (0.01) EPS from Operating Earnings |
 PSE&G EPS Reconciliation – Q2 2012 versus Q2 2011 24 $0.20 (.01) (.02) .02 $0.21 0.00 0.10 0.20 0.30 Q2 2012 Operating Earnings Q2 2011 Operating Earnings Transmission D&A (.01) O&M (.03) Other .02 Weather |
 25 PSE&G – Monthly Summer Weather Data 179 1,431 2,717 403 1,325 3,459 156 799 2,998 0 400 800 1,200 1,600 2,000 2,400 2,800 3,200 3,600 4,000 April May June 2012 2011 Normal 2012 vs. 2011 vs. Normal PSE&G Monthly Temperature Humidity Index (THI) -16.6% Q2 2012 vs. Q2 2011 + 9.5% Q2 2012 vs. Normal |
 26 PSE&G – Q2 Operating Highlights NPS proceeding on Susquehanna-Roseland final EIS in October 2012 BPU approved North Central Reliability Project June 18; construction underway PSE&G seeking BPU approval to spend up to $883 million to expand Solar 4 All and Solar Loan programs PSE&G earned its authorized return Issued $450 million of 30-year notes with 3.95% coupon due May 2042 Moody’s upgraded PSE&G’s secured debt rating to A1 with a Stable outlook Fitch upgraded PSE&G’s secured debt rating to A+ with a Stable outlook Operations Regulatory and Market Environment Financial Mild Winter and early Spring weather warmer than normal but below Q2 2011 O&M remains under control |
 PSEG Energy Holdings/Enterprise 2012 Q2 Review |
 28 PSEG Energy Holdings/Enterprise – Q2 2012 Earnings Summary $ millions (except EPS) Operating Earnings $ 4 $ 10 $ (6) Lease Related Activity 2 - 2 Net Income $ 6 $ 10 (4) EPS from Operating Earnings* $ 0.01 $ 0.02 $ (0.01) * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Q2 2012 Q2 2011 Variance |
 29 PSEG Energy Holdings/Parent – Q2 Operating Highlights Financial 10-year LIPA management services agreement approved by New York State Office of the Comptroller, NYS Attorney General and IRS Payments on Holdings’ remaining lease portfolio are current $75 million investment in Queen Creek Arizona solar farm scheduled to be in service this fall |
 PSEG |
 31 PSEG Financial Highlights Maintaining 2012 Operating Earnings guidance of $2.25 - $2.50 per share Q2 and YTD operating EPS in-line with expectations Focused on maintaining operating efficiency and customer reliability Financial position remains strong Debt as a percentage of capital at 41% at June 30 Proactively and aggressively investing in infrastructure at attractive utility returns as a means of enhancing reliability, improving the environment and supporting the NJ economy Moody’s upgraded PSE&G’s secured debt rating to A1 with a Stable outlook and affirmed ratings of PSEG and Power (Baa1) with Stable outlooks Fitch upgraded PSE&G’s secured debt rating to A+ with a Stable outlook and affirmed ratings of PSEG and Power (BBB+) with Stable outlooks |
 32 PSEG 2012 Operating Earnings Guidance - PSEG 2012 Operating Earnings Guidance - By Subsidiary By Subsidiary $ millions (except EPS) 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 $2.74 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. 2012E 2011A |
 33 PSEG Liquidity as of June 30, 2012 Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Apr-16 $600 $16 $584 5-Year Credit Facility (Power) Mar-17 $1,600 $121 $1,479 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 $249 $4,051 $704 $0 $4,755 $4,171 PSEG / Power PSEG Money Pool ST Investment PSE&G ST Investment Total Liquidity Available Total Parent / Power Liquidity |
 (Unaudited) 2012 2011 2012 2011 Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 4 $ 15 $ 9 $ 42 $ 50 $ 46 $ (10) 4 42 8 107 (1) Lease Related Activity (PSEG Energy Holdings) 2 - 6 - - - Market Transition Charge Refund (PSE&G) - - - - - (72) Gain on Sale of Qwest Building (Energy Holdings) - - - - 34 - Lease Transaction Loss (Energy Holdings) - - - - (173) - Total Pro-forma adjustments (4) $ 19 $ 57 $ 50 $ 18 $ (27) $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 507 507 507 507 Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.01 $ 0.03 $ 0.02 $ 0.08 $ 0.10 $ 0.09 $ Gain (Loss) on MTM (a) (0.02) 0.01 0.08 0.02 0.21 - Lease Related Activity (PSEG Energy Holdings) - - 0.01 - - - Market Transition Charge Refund (PSE&G) - - - - - (0.14) Gain on Sale of Qwest Building (Energy Holdings) - - - - 0.06 - Lease Transaction Loss (Energy Holdings) - - - - (0.34) - Total Pro-forma adjustments (0.01) $ 0.04 $ 0.11 $ 0.10 $ 0.03 $ (0.05) $ (a) Includes the financial impact from positions with forward delivery months. June 30, For the Twelve Months Ended June 30, Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED For the Three Months Ended For the Six Months Ended December 31, Pro-forma Adjustments, net of tax 2011 2010 Per Share Impact (Diluted) 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 (PSEG Power) (PSEG Power) Earnings Impact ($ Millions) Gain (Loss) on Mark-to-Market (MTM) (a) |