Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Q4 2007 Earnings Presentation
33 slides from Public Service Enterprise's earnings presentation, Feb 1, 2008
Slide 1: PSEG Earnings Conference Call 4th Quarter and Year-end 2007
Exhibit 99.1 Public Service Enterprise Group PSEG Earnings Conference Call 4 th Quarter and Year-end 2007 February 1, 2008
Slide 2: Disclaimer Statement
Disclaimer Statement The statements contained in this communication about our and our subsidiaries’ future performance, including, without limitation, future revenues, earnings, strategies, prospects and all other statements that are not purely historical, are forward-looking statements for purposes
Slide 3: GAAP Disclaimer
GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income reported in accordance with generally accepted accounting principles (GAAP). Operating Earnings is a non-GAAP financial measure that differs from Net Income because it excludes the impact of the sale of certain non-core d
Slide 4: PSEG 2007 Q4 Review
PSEG 2007 Q4 Review Ralph Izzo Chairman, President and Chief Executive Officer
Slide 5: Q4 2007 EPS Summary
Q4 2007 EPS Summary - ($ 51) Impact of Asset Sales ($ 182) ($ 2) Discontinued Operations, net of tax $ 0.54 $ 1.09 EPS from Operating Earnings ($ 47) $ 224 Net Income $ 135 $ 226 Income from Continuing Operations ($ 1) - Merger Costs $ 136 $ 277 Operating Earnings Q4 2006 Q4 2007 $ millions (except
Slide 6: Full year 2007 Income Summary
Full year 2007 Income Summary ($ 185) ($ 58) Impact of Asset Sales $ 60 $ 16 Discontinued Operations, net of tax $ 3.45 $ 5.41 EPS from Operating Earnings $ 739 $ 1,335 Net Income $ 679 $ 1,319 Income from Continuing Operations ($ 8) - Merger Costs $ 872 $ 1,377 Operating Earnings $ millions (except
Slide 7: Earnings – A Year of Strong Results to be Followed by Growth
$3.45 $5.41 $5.60 - $6.10 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 Earnings – A Year of Strong Results to be Followed by Growth 2006 Operating Earnings* 2007 Operating Earnings* 2008 Guidance * See page 32 for Items excluded from Net Income to reconcile to Operating Earnings ** Percentage cha
Slide 8: PSEG — 2007: A Defining Year
PSEG — 2007: A Defining Year • 2007 earnings at top end of guidance • Focus on core businesses • Resumed independent operation of nuclear • Top decile reliability standards maintained at PSE&G • Latin American assets sold at attractive values • Meeting commitment to system reliability • Transmission
Slide 9: PSEG 2007 Q4 Operating Company Review
PSEG 2007 Q4 Operating Company Review Tom O’Flynn Executive Vice President and Chief Financial Officer President — PSEG Energy Holdings
Slide 10: Q4 Operating Earnings by Subsidiary
Q4 Operating Earnings by Subsidiary $ 136 (16) (14) $ 102 $ 277 (20) $ 205 Operating Earnings Per Share $ Millions (except EPS) (0.06) (0.07) Enterprise $ 0.54 $ 1.09 PSEG (0.05) 0.06 PSEG Energy Holdings 0.25 0.30 PSE&G $ 0.40 $ 0.80 PSEG Power For the Quarters ended December 31, * See page 32 for
Slide 11: Full Year 2007 Operating Earnings by Subsidiary
Full Year 2007 Operating Earnings by Subsidiary $ 872 (66) $ 515 $ 1,377 (63) $ 949 Operating Earnings Per Share $ Millions (except EPS) (0.26) (0.25) Enterprise $ 3.45 $ 5.41 PSEG 0.63 0.45 PSEG Energy Holdings 1.04 1.48 PSE&G $ 2.04 $ 3.73 PSEG Power For the years ended December 31, * See page 32
Slide 12: PSEG EPS Reconciliation – Q4 2006 versus Q4 2007
$0.54 $0.40 $0.05 $0.11 ($0.01) $1.09 0.00 0.50 1.00 1.50 Recontracting & strong markets .32 BGSS .06 MTM .01 O&M .01 PSEG EPS Reconciliation – Q4 2006 versus Q4 2007 Q4 2007 operating earnings Power PSE&G Holdings Enterprise Q4 2006 operating earnings Weather .06 Rate relief .04 Volume & demand .03
Slide 13: PSEG EPS Reconciliation – Full Year 2006 versus Full Year 2007
$3.45 $1.69 $0.44 ($0.18) $0.01 $5.41 0.00 2.00 4.00 6.00 Recontracting & strong markets 1.48 BGSS .23 Higher tax rate in 2006 .04 Depreciation, interest & other (.03) MTM (.02) Shares outstanding (.01) PSEG EPS Reconciliation – Full Year 2006 versus Full Year 2007 operating earnings Power PSE&G Hol
Slide 14: PSEG Power 2007 Q4 Review
PSEG Power 2007 Q4 Review
Slide 15: PSEG Power – Q4 2007 EPS Summary
PSEG Power – Q4 2007 EPS Summary $ 0.40 $ 0.40 $ 0.80 EPS from Operating Earnings $ 103 $ 102 $ 205 Income from Continuing Operations $ 103 $ 102 $ 205 Operating Earnings $ 256 $ 1,506 $ 1,762 Operating Revenues Variance Q4 2006 Q4 2007 $ millions (except EPS) $ 220 ($ 220) - Discontinued Operations
Slide 16: PSEG Power EPS Reconciliation – Q4 2006 versus Q4 2007
$0.40 $0.32 $0.06 $0.02 $0.80 0.00 0.30 0.60 0.90 Recontracting & strong markets PSEG Power EPS Reconciliation – Q4 2006 versus Q4 2007 Q4 2007 operating earnings Q4 2006 operating earnings BGSS MTM .01 O&M .01 * See page 32 for Items excluded from Net Income to reconcile to Operating Earnings
Slide 17: Prices and Operations Yield Margin Increase
Prices and Operations Yield Margin Increase $0 $20 $40 $60 Q4 2006 Q4 2007 PSEG Power Realized Gross Margin ($/MWh) $38 +34% $51 $0 $20 $40 $60 $38 +32% $50
Slide 18: PSEG Power – Generation Measures
PSEG Power – Generation Measures 5,000 10,000 15,000 PSEG Power – Generation (GWh) 4th Quarter Years ended December 31, 7,343 3,779 1,924 13,046 12,391 2,767 3,083 6,541 Total Nuclear Total Coal * Total Oil & Natural Gas 20,000 40,000 60,000 29,108 14,841 9,190 53,139 11,819 53,196 13,014 28,363 * I
Slide 19: RPM Capacity Auction – Transparent Pricing Model
RPM Capacity Auction – Transparent Pricing Model • Auctions scheduled in the next year provide price certainty through the 2011-2012 delivery year. May 2008 2011 – 2012 Annual base auction in May of each subsequent year January 2008 2010 – 2011 Auction Date Planning Year • RPM has had an influence o
Slide 20: PSEG Power – Q4 Highlights
PSEG Power – Q4 Highlights Operations ü PSEG Nuclear resumed independent operation of Salem and Hope Creek at year-end ü NRC approval of Hope Creek 125MW uprate expected by July 1 ü Overall generation output – Q4 decline; full year at record levels ü Nuclear down 11% ü Fossil up 2.6% Markets ü Impro
Slide 21: PSE&G 2007 Q4 Review
PSE&G 2007 Q4 Review
Slide 22: PSE&G – Q4 2007 EPS Summary
PSE&G – Q4 2007 EPS Summary $ 13 $ 64 $ 77 Operating Earnings $ 0.05 $ 0.25 $ 0.30 EPS from Operating Earnings $ 13 $ 64 $ 77 Income from Continuing Operations/ Net Income $ 338 $ 1,815 $ 2,153 Operating Revenues Variance Q4 2006 Q4 2007 $ millions (except EPS)
Slide 23: PSE&G EPS Reconciliation – Q4 2006 versus Q4 2007
$0.25 $0.06 $0.04 $0.03 ($0.08) $0.30 0.00 0.10 0.20 0.30 0.40 0.50 Weather Gas .04 Electric .02 PSE&G EPS Reconciliation – Q4 2006 versus Q4 2007 Q4 2007 operating earnings Q4 2006 operating earnings Rate relief Gas .02 Electric .02 Other Transmission .01 O&M (.06) Miscellaneous (.03) Demand Gas .0
Slide 24: PSE&G – Q4 Highlights
PSE&G – Q4 Highlights Operations ü Sales growth reflects: • Weather normalized growth from all customer classes – annual increase of 1.7% • Weather – more normal versus less than optimal conditions ü Re-staffing of organization nearly complete – 2% increase for year Regulatory ü NJ enacts Regional G
Slide 25: PSEG Energy Holdings 2007 Q4 Review
PSEG Energy Holdings 2007 Q4 Review
Slide 26: PSEG Energy Holdings – Q4 2007 EPS Summary
PSEG Energy Holdings – Q4 2007 EPS Summary ($ 23) - ($ 23) Sale of Chilquinta & Luz del Sur 0.11 ($ 0.05) $ 0.06 EPS from Operating Earnings ($ 40) $ 38 ($ 2) Discontinued Operations, net of tax ($ 22) ($ 14) ($ 36) Income (Loss) from Continuing Operations ($ 28) - ($ 28) Bond Redemption Costs $ 29
Slide 27: PSEG Energy Holdings EPS Reconciliation – Q4 2006 versus Q4 2007
($0.05) $0.07 $0.05 $0.02 Global Resources ($0.02) $0.02 ($0.02) ($0.01) $0.06 -0.07 -0.03 0.01 0.05 0.09 Effective tax rate PSEG Energy Holdings EPS Reconciliation – Q4 2006 versus Q4 2007 Q4 2007 operating earnings Texas – MTM .06 & lower maintenance expense .01 Q4 2006 operating earnings Interest
Slide 28: PSEG Energy Holdings – Q4 Highlights
PSEG Energy Holdings – Q4 Highlights Operations ü Continued strong operations in Texas and other domestic facilities Markets ü Valuations remain strong for international assets ü Texas near-term spark spreads lower Financial ü Electroandes closed in October for $284 million; Chilquinta and Luz del S
Slide 29: PSEG 2007 Q4 Review
PSEG 2007 Q4 Review
Slide 30: Summary of Q4 Fundamental Factors
Summary of Q4 Fundamental Factors Operations ü The PSEG organization has maintained its focus on safe and reliable operations ü PSEG Nuclear resumed independent operation of Salem and Hope Creek at year-end. ü Significant re-staffing effort nearing completion Markets ü Energy markets responding to t
Slide 31: Cash Outlook – Forecast Intact
Cash Outlook – Forecast Intact We remain comfortable with improvement in cash Operating income exceeding expectations Successful asset sales Planned rate mechanisms for transmission investments would provide cash recovery during construction Excess cash between $2.0 billion and $2.5 billion will be
Slide 32: 2008 Operating Earnings Guidance – Continued Growth
2008 Operating Earnings Guidance – Continued Growth $ 5.41 $ 1,377 ($ 63) $ 115 $ 376 $ 949 2007A ($ 15) - ($ 10) Parent $ 5.60 - $ 6.10 Earnings per Share $ 1,420 - $ 1,560 Operating Earnings $ 45 - $ 60 PSEG Energy Holdings $ 350 - $ 370 PSE&G $ 1,040 - $ 1,140 PSEG Power 2008E $ millions (except
Slide 33: Items Excluded Reconcile
Items Excluded from Net Income to Reconcile to Operating Earnings Please see Slide 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. $ Millions (except EPS) Merger related Costs: PSE&G - $ - $ - $ (1) $ Enterprise - (1) - (7)
Public Service Enterprise Group — Q4 2007 Earnings Presentation on 6ix