PUBLIC SERVICE ENTERPRISE GROUP INC - FORM 8-K - EX-99

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8-K - FORM 8-K - PUBLIC SERVICE ENTERPRISE GROUP INC	d727992d8k.htm

Forward-Looking Statement

The forward-looking statements contained in this report are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E

of the Securities Exchange Act of 1934, as amended.

All of the forward-looking statements made in this report are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by

management will be realized or even if realized, will have the expected consequences to, or effects on, us or our business prospects, financial condition or results of operations. Readers

are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this report apply only as of the

date of this report. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if internal estimates change, unless

otherwise required by applicable securities laws.

adverse changes in the demand for or the 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,

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 risks,

any deterioration in our credit quality or the credit quality of our counterparties,

any inability to achieve, or continue to sustain, our expected levels of operating performance,

any equipment failures, accidents, severe weather events or other incidents that impact our ability to provide safe and reliable service to our customers, and any inability to

obtain sufficient coverage or recover proceeds of insurance with respect to such events,

increases in competition in energy supply markets as well as competition for certain transmission projects,

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 and enforcement that could increase our costs or limit our operations,

availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs,

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,

acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses,

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 funding requirements, and

changes in technology, such as distributed generation and micro grids, and greater reliance on these technologies and changes in customer behaviors, including energy

efficiency,net-metering and demand response.

Certain of the matters discussed in this report about our and our subsidiaries' future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all

other statements that are not purely historical constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are

subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on management's beliefs as well as assumptions made by

and information currently available to management. 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. Factors that may cause actual results to differ are often presented with the forward-

looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in filings

we make with the United States Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K and available on our

website: http://www.pseg.com. These factors include, but are not limited to:

EXHIBIT 99

GAAP Disclaimer

PSEG presents Operating Earnings in addition to its Income from Continuing

Operations/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 Income from Continuing

Operations/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.

Slides A and B at the end of this presentation include a list of

items excluded

from Income from Continuing Operations/Net Income to reconcile to Operating

Earnings, with a reference to that slide included on each of the

slides where the

non-GAAP information appears.

These

materials

and

other

financial

releases

can

found

the

pseg.com

website under the investor tab, or at http://investor.pseg.com/

Maintaining PSEG 2014 Operating Earnings

Guidance

SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING

OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS.

$2.44

$2.58

$2.55

$2.75E

Reflects increased level of utility investment, pension savings and assumes

normal weather and unit operations for the rest of year

2012

2013

2014 Guidance

E = ESTIMATE.

Operating Earnings Mix

Long term investment program has driven increased earnings

contribution from stable, regulated business

*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/

NET INCOME TO RECONCILE TO OPERATING EARNINGS; DISCONTINUED OPERATIONS REFLECT TEXAS. E=ESTIMATE

** 2014 PERCENTS USE MIDPOINT OF EARNINGS GUIDANCE.

Power’s

diverse

fuel

mix

and dispatch flexibility

continues to generate

earnings and free cash flow

PSE&G’s

investment

transmission has

diversified its asset base

and, coupled with other

investments

and cost controls,

supported compound

annual earnings growth of

~18% over 2009 –

2013

Operating Earnings* Contribution by Subsidiary (%)

PSE&G

Power

Other

$2.44

$2.58

$2.55 -

$2.75E

$3.12

$2.74

$3.09

2009

2010

2011

2012

2013

2014E**

20%

27%

38%

43%

47%

54%

76%

69%

62%

54%

43%

PSEG Q1 2014 Financial Highlights

Strong Q1 Earnings

Operating earnings of $1.01 vs. $0.85 per share in Q1 2013

Power benefited from higher market pricing, market volatility and increased output

Increased contribution to earnings from PSE&G’s investment in transmission

Maintaining 2014 operating earnings guidance of $2.55 - $2.75 per share

Focused on maintaining operating efficiency and customer reliability

PSE&G expected to grow at double-digit rate in 2014 and provide over 50% of operating earnings

Executing existing 5-year, $6.8 billion transmission capital spending program on budget and on schedule

Agreement on PSE&G’s Energy Strong infrastructure program to invest $1.22 billion over 2014 – 2018,

awaiting final NJBPU approval

Power recognized a liability in the quarter related to its discovery that it incorrectly calculated certain components of its

cost-based bids for certain generating units in the PJM energy market, with resulting over-collection of revenues related

to its fossil fleet. Power has notified FERC, PJM and the PJM Independent Market Monitor of this issue, which is still under

review; we are unable to estimate the ultimate impact or predict any resulting penalties or other costs associated with

the matter at this time

Financial position remains strong

Positive cash from Power and increasing cash flow from PSE&G supports dividend growth and funds capital

spending program without the need to issue equity

Increased common dividend to indicative annual rate of $1.48 per share in Q1 2014

Debt as a percentage of capital was 41% at March 31, 2014

PSE&G’s 2014 operating earnings

to benefit from increased investment in transmission and

on-going cost control

E=ESTIMATE

*SEE

SLIDE

FOR

ITEMS

EXCLUDED

FROM

INCOME

FROM

CONTINUING

OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS.

PSE&G Operating Earnings*

($ Millions)

101

Improving Operating Earnings

and increased contribution from PSE&G

PSEG Operating Earnings

$ Millions (except EPS)

2012

2013

2014E

PSE&G

$528

$612

$705 -

$745

PSEG Power

$663

$710

$550 -

$610

Other

$45

($13)

$35 -

$40

Operating Earnings*

$1,236

$1,309

$1,290 -

$1,395

Operating EPS*

$2.44

$2.58

$2.55

$2.75

Regulated % of Earnings

43%

47%

53%

55%

SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET

INCOME TO RECONCILE TO OPERATING EARNINGS.

NOTE: 2012 OPERATING EARNINGS RE-STATED FOR TRANSFER OF ASSETS FROM PSEG HOLDINGS

TO PSEG POWER. E=ESTIMATE.

101

Items Excluded from Income from Continuing

Operations/Net Income to Reconcile to Operating Earnings

PLEASE SEE PAGE 3 FOR AN EXPLANATION OF PSEG’S USE OF OPERATING EARNINGS AS A NON-GAAP FINANCIAL MEASURE AND HOW IT

DIFFERS FROM NET INCOME.

(a)

Includes the financial impact from positions with forward delivery months.

2013

2012

2011

2010

2009

2008

Earnings

Impact

Millions)

Operating Earnings

1,309

1,236

1,389

1,584

1,567

1,478

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity (PSEG Power)

(71)

Gain

(Loss)

Mark-to-Market

(MTM)

(a)

(PSEG Power)

(74)

(10)

107

(1)

(11)

Lease Transaction Activity (PSEG Enterprise/Other)

(173)

(490)

Storm O&M (PSEG Power)

(32)

(39)

Market Transition Charge Refund (PSE&G)

(72)

Gain (Loss) on Asset Sales and Impairments (PSEG Enterprise/Other)

(13)

Income from Continuing Operations

1,243

1,275

1,407

1,557

1,594

918

Discontinued Operations

(2)

270

Net Income

1,243

1,275

1,503

1,564

1,592

1,188

Fully Diluted Average Shares Outstanding (in Millions)

508

507

508

Per

Impact

(Diluted)

Operating Earnings

2.58

2.44

2.74

3.12

3.09

2.91

Gain (Loss) on NDT Fund Related Activity (PSEG Power)

0.08

0.10

0.09

0.02

(0.14)

Gain

(Loss)

MTM

(a)

(PSEG Power)

(0.14)

(0.02)

0.21

(0.02)

0.03

Lease Transaction Activity (PSEG Enterprise/Other)

0.07

(0.34)

0.05

(0.96)

Storm O&M (PSEG Power)

(0.07)

(0.08)

Market Transition Charge Refund (PSE&G)

(0.14)

Gain (Loss) on Asset Sales and Impairments (PSEG Enterprise/Other)

0.06

(0.03)

Income from Continuing Operations

2.45

2.51

2.77

3.07

3.14

1.81

Discontinued Operations

0.19

0.01

0.53

Net Income

2.45

2.51

2.96

3.08

3.14

2.34

For the Year Ended

December 31,

(Unaudited)

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Reconciling Items, net of tax

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