EXHIBIT 99
Investor News NYSE:PEG
[LOGO] For further information, contact:
Brian Smith, Director, Investor Relations Phone: 973-430-6564
Sue Carson, Director, Financial Communications Phone: 973-430-6565
Greg McLaughlin, Sr. Investor Relations Analyst Phone: 973-430-6568
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April 15, 2003
PSEG ANNOUNCES FIRST-QUARTER 2003 EARNINGS:
$1.42 PER SHARE FROM ONGOING OPERATIONS
Quarterly Results Are Up Sharply from 2002
On Strong Performance by PSEG Power
And Higher Weather-Related Sales by PSE&G
Results Support Full-Year 2003 Guidance of $3.70 to $3.90 Per Share
Public Service Enterprise Group (PSEG) announced today (April 15) that
earnings from ongoing operations for the first quarter of 2003 were $321 million
or $1.42 per share of common stock, based on 226 million average shares
outstanding. These results excluded a below-the-line benefit of $370 million or
$1.64 per share related to the adoption of a new accounting standard for fossil
and nuclear decommissioning and also excluded charges of $15 million or 6 cents
per share related to discontinued operations at PSEG Energy Technologies.
Comparatively, earnings from ongoing operations for the first quarter
of 2002 were $181 million or 88 cents per share, based on 206 million average
shares outstanding. These results included charges of $31 million or 15 cents
for currency-related write-downs on the company's former Argentine investments.
The 88 cents per share also excluded below-the-line charges of $121 million or
59 cents per share primarily related to the adoption of a new accounting
standard for goodwill.
Attachments to this release provide a summary of 2003 and 2002 results
and details of quarterly results for PSEG's principal subsidiaries - Public
Service Electric and Gas Company (PSE&G), PSEG Power and PSEG Energy Holdings.
The first-quarter results were announced today at PSEG's Annual Meeting
of Stockholders in Newark, NJ.
Thomas M. O'Flynn, PSEG's chief financial officer, said solid
contributions by PSEG Power and PSE&G accounted for overall strong results for
the quarter.
O'Flynn said the principal driver at PSEG Power was the effective
management of its electric and natural gas portfolio. "This includes meeting its
obligations under Basic Generation Service (BGS) contracts with suppliers of
electric energy to New Jersey's utilities, including PSE&G, as well as a Basic
Gas Supply Service (BGSS) contract with PSE&G."
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The BGSS and the BGS contracts became effective on May 1 and August 1,
2002, respectively. "The impact of these contracts helped provide Power with
ongoing results that were more than 35% higher than achieved in the first
quarter of last year," O'Flynn said.
In addition, O'Flynn said PSEG Power benefited in the first quarter
from its operation of two generating facilities in Connecticut. "Power acquired
and began operating these assets in December 2002," he said. "The facilities
provide more than 1,000 megawatts of capacity, half of which is under contract.
The other half is available at market prices in the attractive,
energy-constrained, southern Connecticut region."
Colder weather, causing greater demand for heating, was the key driver
for PSE&G during the first quarter. This improved PSE&G's earnings by 18 cents
per share when compared to the results produced during the mild winter last year
and helped to offset higher operations and maintenance expenses, pension and
other costs.
"Despite the weather benefits this quarter, PSE&G continues to produce
low returns as a result of no electric rate relief for more than a decade,"
O'Flynn said. "We expect that a fair outcome of our pending electric rate case
will correct this situation."
In discussing other factors affecting PSEG's first-quarter earnings
from ongoing operations, O'Flynn said that PSEG Energy Holdings showed an
improvement largely due to the timing of an annual payment under PSEG Global's
Eagle Point cogeneration contract and to the absence of the currency-related
charges in Argentina that were recorded in 2002.
Regarding PSEG's adoption of SFAS #143 for fossil and nuclear
decommissioning, O'Flynn said: "The first-quarter gain of $370 million or $1.64
per share is not included in our earnings guidance for 2003, which is based on
ongoing results. However, the benefit to the equity balance will strengthen our
balance sheet."
O'Flynn added that the issuance of 19 million shares of common stock
last year had the effect of reducing consolidated results from ongoing
operations by 14 cents per share for the quarter.
Other Key First-Quarter Developments
The state of New Jersey conducted its second BGS auction in February,
in which PSE&G was successful in securing contracts for all its load
obligations. The auction contained three components: a 10-month, energy and
capacity requirement for two thirds of the residential and small commercial
load, a 34-month energy and capacity requirement for the remaining one third and
a 10-month, capacity-only obligation for the state's largest industrial and
commercial customers. The 10- and 34-month time frames were used to reset the
starting point for future contracts to June 1 - the start of the peak summer
season and the beginning of the PJM ISO calendar year.
PSEG Power also successfully participated in the auction, securing
contracts consistent with its targeted range of 75% of its PJM capacity. Power
was again an indirect participant in the 10- and 34-month auctions, entering
into contracts with the direct suppliers of energy to New Jersey's utilities.
Power was a direct participant in the capacity-only auction.
In March, the company successfully closed on two, 364-day credit
facilities to replace an expiring $695 million of maturing facilities at PSEG.
The new facilities -- a $250 million joint
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facility at PSEG/PSEG Power and a $350 million PSEG facility -- include more
flexible terms and were oversubscribed, according to O'Flynn.
At the end of the first quarter, PSEG had $1.9 billion of liquidity
available under its $2.4 billion of credit facilities. "Of the total, we have
$2.0 billion of facilities with maturities in 2004 and beyond," O'Flynn said.
"This year we need to renew only a $200 million facility at our utility and we
do not plan to renew a $200 million facility at PSEG Energy Holdings due to
reduced needs and an existing $495 million facility that matures next year."
2003 Financial Outlook
O'Flynn said first-quarter results supported PSEG's expectations for
2003 earnings from ongoing operations. He reiterated EPS guidance of $3.70 to
$3.90.
"In support of our guidance, we expect Power to produce ongoing results
between $475 and $520 million," O'Flynn said. "The range is somewhat wide
because subsequent quarters may not be as strong as the first due to the
interplay between fuel and electric prices, the operational status of our
generation fleet and the uncertain impact of weather, particularly in the summer
months."
PSE&G is projecting earnings in the range of $210 to $230 million,
reflecting the favorable impact from weather in the first quarter and
anticipating a reasonable outcome in its electric rate case, which is now
pending before the New Jersey Board of Public Utilities. As the final step in
the state's deregulation process, new electric rates are scheduled to become
effective on August 1, 2003.
PSEG Energy Holdings is forecasting 2003 ongoing results in the range
of $145 to $155 million. "With the commercial operation of PSEG Global's new
generating facilities in California and Poland, we expect Energy Holdings to
perform slightly better than it did in 2002," O'Flynn said.
O'Flynn added that there are additional parent-level interest costs of
approximately $25 to $30 million that are not included in the expectations for
each company.
Note: Thomas M. O'Flynn, chief financial officer of PSEG, will discuss the
results for the first quarter of 2003 during a live internet webcast on
www.pseg.com tomorrow (April 16) at 11 a.m. In addition, our annual
Financial and Statistical Review can also be found on our website,
www.pseg.com. This report contains summarized historical and
statistical information derived from our SEC filings.
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FORWARD-LOOKING STATEMENT
Readers are cautioned that statements contained in this press release
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,
among other things: the effects of weather; the performance of generating units
and transmission systems; the availability and prices for oil, gas, coal,
nuclear fuel and electricity; changes in the markets for electricity and other
energy-related commodities; changes in the number of participants and the risk
profile of such participants in the energy marketing and trading business; the
effectiveness of our risk management and internal controls systems; the effects
of regulatory decisions and changes in law; changes in competition in the
markets we serve; the ability to recover regulatory assets and other potential
stranded costs; the outcomes of litigation and regulatory proceedings or
inquiries; the timing and success of efforts to develop domestic and
international power projects; conditions of the capital markets and equity
markets; advances in technology; changes in accounting standards; changes in
interest rates and in financial and foreign currency markets generally; the
economic and political climate and growth in the areas in which we conduct our
activities; and changes in corporate strategies. For further information, please
refer to our Annual Report on Form 10-K 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
release. 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 estimates change, unless otherwise required by
applicable securities laws.
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Attachment 1
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
March 31, 2003
(Unaudited)
First Quarter
2003 2002
---- ----
Earnings Results (in Millions)
Income from Ongoing Operations
PSE&G $ 100 $ 67
PSEG Power 177 120
PSEG Energy Holdings
PSEG Global* 42 (13)
PSEG Resources 12 15
PSEG Energy Holdings (1) (2)
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Total PSEG Energy Holdings* 53 -
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PSEG (9) (6)
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Income from Ongoing Operations* $ 321 $ 181
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Loss from Discontinued Operations,
including Loss on Disposal (15) (1)
Cumulative Effect of a Change in
Accounting Principle 370 (120)
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PSEG Net Income* $ 676 $ 60
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Average Shares Outstanding (in Millions) 226 206
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Per Share Results (Basic & Diluted)
Income from Ongoing Operations
PSE&G $ 0.44 $ 0.32
PSEG Power 0.78 0.58
PSEG Energy Holdings
PSEG Global* 0.19 (0.06)
PSEG Resources 0.05 0.07
PSEG Energy Holdings - (0.01)
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Total PSEG Energy Holdings* 0.24 -
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PSEG (0.04) (0.02)
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Income from Ongoing Operations* $ 1.42 $ 0.88
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Loss from Discontinued Operations,
including Loss on Disposal (0.06) (0.01)
Cumulative Effect of a Change in
Accounting Principle 1.64 (0.58)
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PSEG Net Income* $ 3.00 $ 0.29
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* 2002 Amounts include losses from Argentine Investments of $31 million or $0.15 per share
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Attachment 2
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciliation of 1st Quarter Income from Ongoing Operations
2003 vs. 2002
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PSEG 1st Quarter 2002 Income from Ongoing Operations: $ 0.88
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PSE&G Better/(Worse)
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1st Quarter 2002 $ 0.32
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Weather 0.18
Increased O&M and Other (0.02)
Additional Shares Outstanding (0.04)
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1st Quarter 2003 $ 0.44 $ 0.12
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-----------
PSEG Power
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1st Quarter 2002 $ 0.58
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Increased Margins (BGSS, BGS and New Connecticut Plants) 0.23
Gains on Nuclear Decommissioning Trust Funds 0.04
Additional Shares Outstanding (0.07)
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1st Quarter 2003 $ 0.78 $ 0.20
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PSEG Energy Holdings
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1st Quarter 2002 0.00
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Global
Losses from Argentine Investments in 1st Qtr 2002 0.15
Eagle Point gain recorded in 1st Quarter in 2003, prior
year recorded in 2nd Quarter 0.14
Change in earnings for various investments (0.02)
Additional Shares Outstanding (0.02) 0.25
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Resources
Change in earnings for various investments (0.01)
Additional Shares Outstanding (0.01) (0.02)
---------
Holdings 0.01
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1st Quarter 2003 $ 0.24 $ 0.24
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Public Service Enterprise Group
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1st Quarter 2002 $(0.02)
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Increase in financing costs (0.02)
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1st Quarter 2003 $ (0.04) $ (0.02)
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PSEG 1st Quarter 2003 Income from Ongoing Operations: $ 1.42
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Attachment 3
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CAPITALIZATION SCHEDULE (Unaudited)
(Millions)
As of
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March 31, December 31,
2003 2002
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DEBT
Commercial Paper and Loans $ 544 $ 625
Non-Recourse Note Payable 96 137
Long-Term Debt, including amounts due within one year 7,669 7,668
Securitization Debt, including amounts due within one year 2,321 2,351
Project Level, Non-Recourse Debt, including amounts due within one year 1,743 1,721
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Total Debt 12,373 12,502
SUBSIDIARIES' PREFERRED SECURITIES 1,400 1,400
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COMMON STOCKHOLDERS' EQUITY
Common Stock 4,078 4,056
Treasury Stock (981) (981)
Retained Earnings 2,158 1,601
Accumulated Other Comprehensive Loss (670) (689)
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Total Common Stockholders' Equity 4,585 3,987
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Total Capitalization $ 18,358 $ 17,889
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The traditional and adjusted debt to capitalization ratio as of March 31, 2003
was .67 and .59, respectively. PSEG's financial covenants require an adjustment
to the traditional debt to capitalization ratio by excluding non-recourse
project debt ( $1.8 billion) and securitization debt ($2.3 billion) and
including capital lease obligations ($52 million) and certain other obligations
such as guarantees and letters of credit ($230 million).
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Attachment 4
Public Service Electric and Gas Company
Electric and Gas Sales to Customers
March 2003
Electric Sales
Millions of Kilowatthours
Rolling
Three Change vs Twelve Change vs
Months Ended 2002 Months Ended 2002
------------ ---- ------------ ----
Residential 3,090 12.4% 13,207 11.0%
Commercial 5,375 7.5% 22,139 4.8%
Industrial 1,563 -1.8% 6,753 -10.6%
Total 7.2% 3.7%
Gas Sold and Transported
Millions of Therms
Rolling
Three Change vs Twelve Change vs
Months Ended 2002 Months Ended 2002
------------ ---- ------------ ----
Residential Sales 741 30.0% 1,522 25.7%
Commercial - Firm Sales 304 30.1% 610 16.4%
Industrial - Firm Sales 28 18.7% 59 16.9%
Gas Transported 448 31.3% 1,301 30.2%
Total * 25.1% 15.8%
* Includes interruptible and cogeneration sales