Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — NJ Utility Shareholder Group Meeting (December 2008)
19 slides from Public Service Enterprise's conference presentation, Dec 9, 2008
Slide 1: NJ Utility Shareholder Group Meeting
Public Service Enterprise Group NJ Utility Shareholder Group Meeting Hasbrouck Heights, NJ December 9, 2008
Slide 2: Forward-Looking Statement
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 and all other statements that are not purely historical, are forward-looking statements for pu
Slide 3: GAAP Disclaimer
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 the impact of the sale
Slide 4: PSEG Strategic Overview
PSEG Strategic Overview Tom O’Flynn Executive Vice President and Chief Financial Officer
Slide 5: PSEG's diverse asset mix, operational excellence and strong balance sheet
PSEG’s diverse asset mix, operational excellence and strong balance sheet … Major merchant Stable electric and gas Redeployment of capital generation company with distribution and electric through the sale of 13,487 MW* of base- transmission company international assets. load, intermediate and rated
Slide 6: PSEG is well-positioned to capitalize on current business challenges
PSEG is well-positioned … PSEG Power’s base-load nuclear assets well situated in carbon constrained environment RGGI auction provides guide for eventual Federal action Climate Change NJ releases Energy Master Plan (EMP) PSE&G pursuing investments in energy efficiency and renewables Significant new t
Slide 7: PSEG – 2008 Highlights
PSEG – 2008 Highlights Maintaining 2008 guidance of $2.80 - $3.05 per share Solid earnings performance Supporting lower half of 2009 earnings of $3.05 - $3.35 per share Strong operating PSE&G honored as America’s Most Reliable Electric Utility performance PSEG Power – Nuclear capacity factor at 93%
Slide 8: PSEG Power - right set of assets in right markets
PSEG Power - right set of assets in right markets … Low-cost portfolio Fuel Diversity – 2008 Total MW: 13,487* Strong cash generator Oil Nuclear Regional focus in competitive, 8% 27 % Pumped liquid markets Storage 18% 1% 46 % Assets favorably located Coal Many units east of PJM constraints Gas South
Slide 9: Highly skilled workforce and disciplined capital investments
Through its highly skilled workforce and disciplined capital investments … 2008 National ReliabilityOne Award winner – Winner in three of the last four years Solid regulatory relationships on traditional utility matters NJ is ranked 2nd nationally in personal income per capita Transmission Statistic
Slide 10: By 2018, NJ's load expected to grow while net import capability decreases
By 2018, NJ’s load is expected to grow by 4,000MW while net import capability decrease by 1,300MW … Projects to NJ Projects to NY 2008-2018 NJ Summer Peak PSEG’s evaluation of the The Neptune HVDC project (685 MW) proposed backbone Annual Growth Rate = 1.8% connecting Sayreville to Long Island trans
Slide 11: FERC transmission formula rate order grants 11.68% ROE
FERC’s recent transmission formula rate order grants an 11.68% ROE and fully-forecasted cost of service … Transmission Growth Effective October 1, 2008, PSE&G is operating under fully forecasted transmission formula rates PJM approval was received for the Susquehanna to Roseland line in October 2007
Slide 12: Holdings now focused on domestic generation, leases and renewables
With the sale of international assets, Holdings is now focused … 2007 Operating Earnings* 2008 Guidance - Operating Earnings $ 115M $ 75M - $90M Two 1,000 MW CCGTs Texas 1 in Central Texas (South Zone) Merchant 1 in West Texas PSEG Generation Resources PSEG 23% 15% Resources 47% Texas Chile & Peru T
Slide 13: PSEG Resources is managing its current investment portfolio
PSEG Resources is managing its current investment portfolio … Most of exposure related to cross border leases dealt with in 2nd quarter 2008. $355 million charge to reflect potential changes to timing of tax cash flow. $135 million increase to interest reserve. 80 PSEG Resources - Earnings Profile (
Slide 14: On track to meet 2008 earnings guidance
On track to meet 2008 earnings guidance … $3.05 - $3.35 $2.80 - $3.05 $2.71 9 Months YTD Operating Earnings: $2.43* 2007 Operating Earnings* 2008 Guidance 2009 Guidance … but, potential increases in coal prices and pension / financing costs may limit growth in 2009 to lower half of forecast range. *
Slide 15: Liquidity as of October 31, 2008
PSEG Liquidity as of October 31, 2008 Expiration Total Primary Usage at Available Company Facility Date Facility Purpose 10/31/2008 10/31/2008 ($ millions) PSEG 5-year Credit Facility Dec-12 $1,000 1 CP Support/Funding/LCs $13 $987 Bilateral Credit Facility Jun-09 $100 CP Support/Funding $0 $100 Unc
Slide 16: Recent 10% dividend increase continues 100-year dividend history
Our recent 10% dividend increase continues 100-year history of paying common dividends. Dividends per Share $1.29 * ? $1.17 $1.14 $1.12 2005 2006 2007 2008 2009E Payout Ratio 63% 66% 43% 44% 40 – 50% A payout objective of 40 – 50% provides opportunity for growth with earnings. * Indicated annual div
Slide 17: Creating shareholder value for the long-term
Creating shareholder value for the long-term … 5-year Total Return* 10-year Total Return* 12.6% 10.1% 9.6% PSEG PSEG S&P Utilities 3.2% S&P Utilities -1.4% -0.9% S&P 500 S&P 500 … has been and will continue to be our focus. *Average monthly returns ending November 30, 2008 17
Slide 18: PSEG Value Proposition
PSEG Value Proposition PSEG is well-positioned in current business environment Operational excellence efforts support: maintaining reliability controlling costs providing value to the customer Asset mix provides opportunities in attractive markets Strengthened balance sheet supports capital investme
Slide 19: Items Excluded from Net Income to Reconcile to Operating Earnings
Items Excluded from Net Income to Reconcile to Operating Earnings ($ millions) (EPS) Nine Months Nine Months Ended Year Ended Ended Year Ended September 30, December 31, September 30, December 31, 2008* 2007** 2008* 2007** Lease Transaction Reserves: $ (490) $ - $ (0.96) $ - Impact of Asset Sales: C
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