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| 8-K - FORM 8-K - PUBLIC SERVICE ELECTRIC & GAS CO | d8k.htm |
 2
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 “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 towards subsidized market mechanisms,
transmission planning and cost allocation rules, including rules regarding how
transmission is planned and who is permitted to build transmission going forward, 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 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
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.
•
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.
•
Adverse performance of our decommissioning and defined benefit plan trust fund
investments and changes in discount rates and funding requirements.
•
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.
EXHIBIT 99 |
 3
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.
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 7
PSEG 2011 outlook influenced by lower
market prices…
* See page 66 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. $2.75E
$2.50E
…
offset
by
continuous
improvement
in
operations,
utility
growth,
and
generating
asset optionality.
$3.12
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
2010 Operating Earnings*
2011E Earnings Guidance* |
 Guidance
$2.75
$2.50
48
PSEG’s 2011 earnings guidance reflects
continued improvement at PSE&G…
–
Network transmission service revenue increase
= ~ $0.05 per share
–
Full year of E&G Rate Relief = ~ $0.05 per share
–
Each 1% change in Load = ~ $0.02 per share
–
Each 1% change in O&M = ~ $0.01 per share
–
2010 Utility ROE 9.9%; Each 10 bp = $0.01 per share
Revenue/Margin
–
Decline in average Hedge Price/Volume = ~ ($0.25-$0.30)
per share
–
Decline in Capacity revenues = ~ ($0.15-$0.20) per share
–
Improvement in WPT/BGSS = ~ $0.03-$0.05 per share
Other Expense
–
Higher O&M = ~ ($0.03) per share
–
Increase in Depreciation rate = ~ ($0.05) per share
–
Absence of LILO/SILO termination gains = ~ ($0.05) per share
–
Loss of Income from Asset Sales = ~ ($0.05) per share
2011 Drivers
…offset by a decline in margins at Power and Holdings.
Earnings Per Share
* See page 66 for Items excluded from Income from Continuing Operations to reconcile
to Operating Earnings. E Estimate. $3.12
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
2010 Operating Earnings*
2011E Earnings Guidance* |
 60
PSEG 2011 Operating Earnings Guidance
-
by Subsidiary
$ millions (except EPS)
2011E
2010A
PSEG Power
$ 765 –
$ 855
$ 1,091
PSE&G
$ 495 –
$ 520
$ 430
PSEG Energy Holdings
$ 0 –
$ 5
$ 49
Enterprise
$ 5 –
$ 15
$ 14
Operating Earnings*
$ 1,265 –
$ 1,395
$ 1,584
Earnings per Share
$ 2.50 –
$ 2.75
$ 3.12
* See Page 66 for Items excluded from Income from Continuing Operations to
reconcile to Operating Earnings. |
 66
Items Excluded from Income from Continuing
Operations to Reconcile to Operating Earnings
Pro-forma Adjustments, net of tax
2010
2009
2008
Earnings Impact ($ Millions)
Gain (Loss) on Nuclear Decommissioning Trust (NDT)
Fund Related Activity (PSEG Power)
46
$
9
$
(71)
$
Gain (Loss) on Mark-to-Market (MTM) (PSEG Power)
(1)
(11)
14
Market Transition Charge Refund (PSE&G)
(72)
-
-
Net Reversal of Lease Transaction Reserves (Energy Holdings)
-
29
-
Lease Transaction Reserves (Energy Holdings)
-
-
(490)
Asset Impairments
-
-
(13)
Premium on Bond Redemption
-
-
(1)
Total Pro-forma adjustments
(27)
$
27
$
(561)
$
Fully Diluted Average Shares Outstanding (in Millions)
507
507
508
Per Share Impact (Diluted)
Gain (Loss) on Nuclear Decommissioning Trust (NDT)
Fund Related Activity (PSEG Power)
0.09
$
0.02
$
(0.14)
$
Gain (Loss) on Mark-to-Market (MTM) (PSEG Power)
-
(0.02)
0.03
Market Transition Charge Refund (PSE&G)
(0.14)
-
-
Net Reversal of Lease Transaction Reserves (Energy Holdings)
-
0.05
-
Lease Transaction Reserves (Energy Holdings)
-
-
(0.96)
Asset Impairments
-
-
(0.03)
Premium on Bond Redemption
-
-
-
Total Pro-forma adjustments
(0.05)
$
0.05
$
(1.10)
$
December 31,
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciling
Items
Excluded
from
Continuing
Operations
to
Compute
Operating
Earnings
(Unaudited)
For the Twelve Months Ended
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.
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