NEWARK, N.J., Feb. 22, 2011 /PRNewswire/ -- Public Service
Enterprise Group (PSEG) reported today 2010 Income from Continuing
Operations of $1,557 million or
$3.07 per share as compared to Income
from Continuing Operations of $1,594
million or $3.14 per share for
2009. Including Income from Discontinued Operations ($7 million or $0.01
per share), PSEG reported Net Income for 2010 of $1,564 million or $3.08 per share compared to Net Income for 2009
of $1,592 million or $3.14 per share. Operating Earnings for the year
2010 were $1,584 million or
$3.12 per share compared to 2009
Operating Earnings of $1,567 million
or $3.09 per share.
PSEG also reported Income from Continuing Operations for the
fourth quarter of 2010 of $290
million, or $0.57 per share.
This compares to fourth quarter 2009 results of $374 million, or $0.74 per share. Operating Earnings for the
fourth quarter of 2010 were $303
million, or $0.60 per share
compared to fourth quarter 2009 Operating Earnings of $334 million, or $0.66 per share. The results for the quarter and
the full year have been adjusted to reflect the reclassification of
the results for the Texas
generating assets to discontinued operations.
"We had a successful year in 2010 despite very challenging
market conditions," said Ralph Izzo,
chairman, president and chief executive officer of PSEG. He went on
to say that, "At Power, we completed the back-end technology work
at our New Jersey coal stations
that supports their operation under more stringent environmental
rules, and our Hope Creek nuclear station achieved a 100 INPO
rating. The resolution of PSE&G's rate case will support its
long-term growth; at Energy Holdings, we made strides in building
renewables outside NJ and we terminated all of our remaining
International leveraged leases. The balance sheet remains strong to
fund growth."
Izzo added, "We owe a debt of gratitude to PSEG's 10,000 strong
work force. We would not have been able to achieve our operational
and financial goals without their daily commitment."
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. Operating Earnings exclude the impact of
returns/(losses) associated with Nuclear Decommissioning Trust
(NDT) investments and Mark-To-Market accounting as well as other
one-time items not related to ongoing operations. The table
below provides a reconciliation of PSEG's Net Income to Operating
Earnings (a non-GAAP measure) for the full year and fourth quarter.
See Attachment 12 for a complete list of items excluded from
Income from Continuing Operations in the determination of Operating
Earnings.
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PSEG
CONSOLIDATED EARNINGS (unaudited)
|
|
Full-Year
Comparative Results
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2010 and
2009
|
|
|
|
|
Income
|
|
Diluted
Earnings
|
|
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($millions)
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|
Per
Share
|
|
|
2010
|
2009
|
|
2010
|
2009
|
|
Net Income
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$1,564
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$1,592
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|
$3.08
|
$3.14
|
|
(Income) Loss from Discontinued
Ops
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(7)
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2
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(0.01)
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--
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Income From Continuing
Ops
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$1,557
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$1,594
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$3.07
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$3.14
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Reconciling
Items
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27
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(27)
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0.05
|
(0.05)
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|
|
|
|
|
|
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Operating Earnings
(Non-GAAP)
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$1,584
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$1,567
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$3.12
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$3.09
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Avg.
Shares
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507M
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507M
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PSEG
CONSOLIDATED EARNINGS (unaudited)
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Fourth
Quarter Comparative Results
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2010 and
2009
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|
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Income
|
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Diluted
Earnings
|
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($millions)
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|
Per
Share
|
|
|
2010
|
2009
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2010
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2009
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Net Income
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$282
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$349
|
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$0.56
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$0.69
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Loss from Discontinued
Ops
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8
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25
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0.01
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0.05
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Income From Continuing
Ops
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$290
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$374
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$0.57
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$0.74
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Reconciling
Items:
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13
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(40)
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0.03
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(0.08)
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Operating Earnings
(Non-GAAP)
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$303
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$334
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$0.60
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$0.66
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Avg.
Shares
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507M
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507M
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In discussing PSEG's outlook for 2011, Izzo said that, "PSEG
will continue to focus on maintaining high levels of operating
efficiency across all of our businesses, and deploying capital to
support long-term growth. However, we will not be able to offset
the effect on operating earnings in 2011 from declining
market prices of power, including the effect of anticipated
customer migration on our average realized price. In addition, we
will have higher depreciation as the Back-End Technology went into
service for our coal units. We are providing operating earnings
guidance for 2011 in the range of $2.50-
$2.75 per share."
The following table outlines PSEG 2010 operating earnings by
subsidiary and expectations for 2011.
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2011
Guidance and 2010 Operating Earnings
($
millions)
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2011E
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2010A
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PSEG Power
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$765-$855
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$1,091
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PSE&G
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495-520
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430
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PSEG Energy Holdings
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0-5
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49
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PSEG Parent
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5-15
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14
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Operating Earnings
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$1,265-$1,395
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$1,584
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Earnings Per Share
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$2.50-$2.75
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$3.12
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Operating Earnings Review and Outlook by Operating
Subsidiary
See Attachments 6 and 7 for detail regarding the
quarter-over-quarter and year-over-year earnings reconciliations
for each of PSEG's businesses.
PSEG Power
PSEG Power reported operating earnings of $212 million ($0.42
per share) for the fourth quarter of 2010 bringing full year
operating earnings to $1,091 million
($2.15 per share). On a
comparative basis, PSEG Power reported operating earnings of
$260 million ($0.51 per share) and $1,193 million ($2.35 per share) for the fourth quarter and full
year 2009 respectively.
PSEG Power's fourth quarter and full year operating earnings for
2010 and 2009 reflect the removal of earnings from the Texas generating assets.
PSEG Power's results in the fourth quarter benefited from higher
pricing in the wholesale market which improved earnings by
$0.03 per share. The improvement in
pricing offset the impact of generation volumes, which while up
8.7% for the year, were down 5.7% in the quarter, reducing earnings
by $0.02 per share. Output for the
quarter was affected by a 26-day refueling outage at Power's
100%-owned Hope Creek nuclear reactor, and testing associated with
the tie-in of the back-end technology at the New Jersey based coal units which reduced
their availability in the quarter. Customer migration away from the
BGS contract reduced earnings in the quarter by $0.01 per share. An increase in operating and
maintenance expense associated with the refueling outage at Hope
Creek reduced earnings in the quarter by $0.02 per share. The continued erosion in margin
on certain wholesale electric energy supply contracts that Power
supplies from the market reduced earnings by $0.03 per share. In addition, Power's higher
effective tax rate in the fourth quarter reduced earnings by
$0.04 per share. The higher
effective rate was primarily due to accelerated depreciation
benefits created by the 2010 tax relief act that lowered Power's
Manufacturing Deduction.
PSEG Power's operating earnings for 2011 are forecast at
$765 million to $855 million. The
decline in forecast operating earnings is due to expectations of
lower energy prices in 2011 due to the roll-off of high-priced
legacy hedges as well as expectations for continued customer
migration. Power's results will also be affected by increased
depreciation associated with the year-end 2010 in-service of the
investment in back-end technology at the Hudson and Mercer coal units, and the continued impact on
the tax rate from lower Manufacturing Deduction.
Power continues to hedge its expected generation in future years
consistent with past practice. After the recently concluded Basic
Generation Service (BGS) auction in New
Jersey, approximately 95% of Power's anticipated 2011 coal
and nuclear generation (40 TWh) is hedged at an average price of
$68 per MWh. For 2012, approximately
45% of generation is hedged at an average price of $68 per MWh. These figures reflect assumed
customer migration levels of 38-40% at the end of 2011 versus 30%
at year-end 2010 and expectations for continued growth in migration
in 2012.
PSE&G
PSE&G reported operating earnings of $83 million ($0.16
per share) for the fourth quarter bringing full year operating
earnings to $430 million
($0.85 per share). On a comparative
basis, PSE&G reported operating earnings of $68 million ($0.13
per share) and $321 million
($0.63 per share) for the fourth
quarter and full year 2009 respectively.
PSE&G's results in the quarter were driven by the electric
and gas rate settlement, an increase in investment and a reduction
in operating and maintenance expenses. An increase in electric and
gas rates of $73.5 million and
$26.5 million that went into effect
on June 7, 2010 and July 9, 2010 respectively added $0.01 per share to earnings. The implementation
of a gas weather normalization clause as part of the July 2010 gas rate settlement limited the impact
of weather-related gas sales on earnings. An increase in revenues
associated primarily with investments for capital infrastructure,
renewables and transmission investments added $0.02 per share to earnings. A reduction in
operating and maintenance costs of $0.02 per share was offset by an equal increase
in depreciation and amortization expense.
PSE&G experienced an increase in demand from all customer
classes during the fourth quarter reflecting weather that was
colder than normal (and colder than last year), and more stable
economic conditions. Electric and Gas sales increased 2.0% and 3.4%
respectively during the fourth quarter. The increase in
demand during the fourth quarter resulted in electric sales growth
of 4.0% for the full year. Gas sales experienced a decline of 4.4%
for the year reflecting the negative impact on sales of the warm
winter weather experienced at the beginning of the year.
PSE&G's operating earnings for 2011 are forecast at
$495 million to $520 million compared
to 2010's operating earnings of $430
million. Operating earnings will be influenced by a full
year of electric and gas rate relief; a $45
million increase in transmission revenues effective on
January 1, 2011 and increased
investment.
PSEG Energy Holdings
PSEG Energy Holdings reported operating earnings for the fourth
quarter of 2010 of $5 million
($0.01 per share) compared to
operating earnings of $12 million
($0.03 per share) for the fourth
quarter of 2009. The results for the fourth quarter brought
Energy Holdings' full year 2010 operating earnings to $49 million ($0.10
per share). The results for 2010 compare with 2009's operating
earnings of $43 million ($0.09 per share).
The decline in operating earnings for the quarter reflects a
reduction in gains recorded on lease terminations and lower project
earnings ($0.03 per share) as well as
the impairment of an asset ($0.01 per
share) which more than offset the benefit of lower interest expense
and other items ($0.02 per
share).
Energy Holdings' successfully terminated the remaining
international leveraged lease during the quarter. The termination
reduced Holdings' net cash exposure to $260
million at the end of December. Holdings' has $320 million on deposit with the IRS to defray
potential interest costs associated with this disputed tax
matter.
Energy Holdings' operating earnings for 2011 are forecast at
$0 million to $5 million. The
anticipated decline in operating earnings for 2011 is influenced by
the absence of $20 million
($0.04 per share) of net gains
recorded in 2010 from the sale of assets after asset impairments
and expenses related to the early redemption of debt. In addition,
lower earnings from the remaining Holdings portfolio primarily due
to asset sales and, anticipated lower investment tax credits from
solar projects, are expected to lower operating earnings in 2011.
Other Items
PSEG Power expects to close on the sale of its Texas generating assets (2,000 Mw of combined
cycle capacity) in early 2011. The assets are being sold in two
separate transactions for $687
million.
The following attachments can be found on www.pseg.com:
Attachment 1 - Operating Earnings and Per Share Results by
Subsidiary
Attachment 2 - Consolidating Statements of Operations
Attachment 3 - Consolidating Statements of Operations
Attachment 4 - Capitalization Schedule
Attachment 5 - Condensed Consolidated Statements of Cash
Flows
Attachment 6 - Quarter-over-Quarter EPS
Reconciliation
Attachment 7 – Year-over-Year EPS Reconciliation
Attachment 8 - Generation Measures
Attachment 9 – Retail Sales and Revenues
Attachment 10 – Retail Sales and Revenues
Attachment 11 - Statistical Measures
Attachment 12 – Reconciling Items Excluded from Continuing
Operations to Compute Operating Earnings
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 toward subsidized market mechanisms,
transmission planning and cost allocation rules, including rules
regarding 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.
Public Service Enterprise Group (NYSE: PEG) is a publicly
traded diversified energy company with annual revenues of more than
$11 billion, and three principal
subsidiaries: PSEG Power, Public Service Electric and Gas Company
(PSE&G) and PSEG Energy Holdings.
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SOURCE Public Service Enterprise Group (PSEG)