NEWARK, N.J., May 5, 2011 /PRNewswire/ -- Public Service
Enterprise Group (PSEG) reported today Income from Continuing
Operations for the first quarter of 2011 of $462 million or $0.91 per share as compared to Income from
Continuing Operations of $498 million
or $0.99 per share in the first
quarter of 2010. Including Income from Discontinued
Operations, and gain on sale ($64
million or $0.13 per share),
PSEG reported Net Income for the first quarter of 2011 of
$526 million or $1.04 per share compared to Net Income for the
first quarter of 2010 of $491 million
or $0.97 per share. Operating
Earnings for the first quarter of 2011 were $431 million or $0.85 per share compared to Operating Earnings in
the first quarter of 2010 of $439
million or $0.87 per
share.
"We are managing well in difficult market conditions," said
Ralph Izzo, chairman, president and
chief executive officer of PSEG. He went on to say "our
employees' on-going commitment to reliability and safety has
supported operations in the face of severe winter weather
conditions. In addition, our teams worked round-the-clock to
verify the effectiveness of all procedures and equipment in place
to respond to natural disasters following the
earthquake-and-tsunami related damage at the Fukushima nuclear
plant in Japan."
PSEG believes that the non-GAAP financial measure of "Operating
Earnings" provides a consistent and comparable measure of
performance of its businesses to help shareholders understand
performance trends. Operating Earnings exclude the impact of
returns/(losses) associated with NDT and MTM accounting. The
table below provides a reconciliation of PSEG's Net Income to
Operating Earnings (a non-GAAP measure) for the first quarter.
See Attachment 10 for a complete list of items excluded from
Income from Continuing Operations in the determination of Operating
Earnings.
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PSEG
CONSOLIDATED EARNINGS (unaudited)
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First
Quarter Comparative Results
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2011 and
2010
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Income
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Diluted
Earnings
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($millions)
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Per
Share
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2011
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2010
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2011
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2010
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Operating Earnings
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$431
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$439
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$0.85
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$0.87
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Reconciling Items
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31
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59
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0.06
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0.12
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Income from Continuing
Operations
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$462
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$498
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$0.91
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$0.99
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Income/(Loss) Discontinued
Operations
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64
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(7)
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0.13
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(0.02)
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Net Income
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$526
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$491
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$1.04
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$0.97
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Avg. Shares
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507M
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507M
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In discussing the outlook for 2011, Izzo said "we continue to
forecast operating earnings for 2011 of $2.50 - $2.75 per share. Although there are
signs of economic recovery, a decline in contracted energy and
capacity prices from year ago levels beginning in the second
quarter will have an impact on operating earnings for the full
year. A strong balance sheet, investment in projects that
realize reasonable returns and a focus on operations will all
support long-term results."
The following table outlines continued expectations for
operating earnings in 2011 by subsidiary:
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2011
Operating Earnings Guidance
($ millions,
except EPS)
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2011E
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PSEG Power
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$765-$855
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PSE&G
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495-520
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PSEG Energy Holdings
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0-5
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PSEG Parent
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5-15
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Operating Earnings
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$1,265-$1,395
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Earnings Per Share
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$2.50-$2.75
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Operating Earnings Review by Subsidiary
See Attachment 5 for detail regarding the quarter-over-quarter
reconciliations for each of PSEG's businesses.
PSEG Power
PSEG Power reported operating earnings of $267 million ($0.53
per share) for the first quarter of 2011 compared with operating
earnings of $312 million
($0.62 per share) for the first
quarter of 2010.
A decline in dark spreads reduced the dispatch levels of Power's
coal fleet by 21% during the quarter; output from the nuclear fleet
rose 2% as volume from the combined cycle fleet grew by 8%. Higher
realized pricing within PJM offset the impact on earnings from an
increase in customer migration away from the BGS contract. The
total decline in generation volume of 1%, as well as lower pricing
in non-PJM markets reduced results by $0.01 per share. The erosion in margin on certain
wholesale electric energy supply contracts that Power supplies from
the market also reduced results in the quarter by $0.03 per share. An increase in operating
and maintenance expense associated with planned maintenance of the
combined cycle fleet reduced results by $0.03 per share. An increase in
depreciation expense and a decline in capitalized interest
associated with the commercial operation of the back-end technology
on the Hudson and Mercer coal
stations reduced results by $0.03 per
share. The absence of a Healthcare related tax charge in the
year ago period improved results by $0.01 per share.
PSEG Power's nuclear fleet operated at an average capacity
factor of 99% during the first quarter of 2011 compared to an
average capacity factor of 97% in the year ago quarter.
Power's nuclear operating team, in response to the
March 11 earthquake and tsunami in
Japan, has accommodated numerous
local, state and federal requests for information on the
effectiveness of the nuclear reactor design and emergency
procedures in place at the Salem
and Hope Creek nuclear reactors as
part of its on-going community outreach to ensure public trust in
our ability to operate the units in a safe, reliable manner.
Power expects to hear from the Nuclear Regulatory Commission
(NRC) later this summer on its request to extend the licenses at
the Salem and Hope Creek reactors.
Power has hedged increased amounts of its generation. For
the balance of the year, Power's base-load output is fully hedged
at an average price of $68 per MWh;
with additional hedges in place on intermediate generation,
approximately 75%-80% of total expected generation for that period
is hedged at an average price of $68
per MWh. Power's total generation for 2011 is forecast to be 53
TWh. For 2012, hedges are in place for approximately 60%-70% of
expected base-load generation of 36 TWh at an average price of
$66 per MWh resulting in
approximately 40%-50% of expected total 2012 generation of 54 TWh
hedged at an average price of $66 per MWh. For 2013, approximately 25% of
anticipated base-load output of 36 TWh is hedged at an average
price of $69 per MWh which results in
hedges on approximately 10%-20% of estimated total generation of 56
TWh at an average price of $69 per
MWh.
PSE&G
PSE&G reported operating earnings of $163 million ($0.32
per share) for the first quarter of 2011 compared with operating
earnings of $117 million
($0.23 per share) for the first
quarter of 2010.
PSE&G's results in the quarter were influenced by higher
rates, an increase in investment and a decline in operating and
maintenance expense. An increase in electric and gas rates
that went into effect on June 7, 2010
and July 9, 2010, respectively, added
$0.02 per share to results. An
annualized increase in transmission revenue of $45 million effective on January 1, 2011 added $0.01 per share to results. An increase in
demand aided results by $0.01 per
share. Colder winter weather – which was also colder than normal –
improved results by $0.01 per share.
An increase in revenues associated with investments in
capital infrastructure and renewables added $0.01 per share to earnings. PSE&G's
quarterly results also benefited from a decline in pension expense
and the absence of storm related costs experienced in the year ago
quarter. These items combined to improve results by
$0.04 per share. An increase in
depreciation expense reduced results by $0.01 per share.
PSE&G experienced a slight increase in weather-normalized
electric sales of 0.3% during the quarter. The results were
influenced by sales growth of 1% in the commercial sector.
Weather-normalized sales to gas customers increased 1.6%
during the quarter with growth of 1.4% experienced in the
commercial and industrial sector as demand by residential customers
grew 1.8% during the quarter.
PSE&G is awaiting New
Jersey Board of Public Utilities approval of its request to
increase investment in electric and gas distribution capital
infrastructure and energy efficiency of approximately $400 million.
PSEG Energy Holdings
PSEG Energy Holdings reported a loss of $3 million ($0.01
per share) for the first quarter of 2011 versus operating earnings
of $7 million ($0.01 per share) during the first quarter of
2010. The results reflect the absence of a gain on the sale
of a lease in the year-ago period of $0.01 per share. During the quarter,
Holdings also wrote-off its investment in the Energy Storage &
Power joint venture. Low gas prices and a narrow spread
between peak and off-peak power prices have reduced the economics
associated with the investment in compressed air energy
storage.
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 - Capitalization Schedule
Attachment 4 - Condensed Consolidated Statements of Cash
Flows
Attachment 5 - Quarter-over-Quarter EPS
Reconciliation
Attachment 6 - Generation Measures
Attachment 7 - Retail Sales and Revenues (Electric)
Attachment 8 - Retail Sales and Revenues (Gas)
Attachment 9 - Statistical Measures
Attachment 10 - 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 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 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 trading risks,
• any deterioration in our credit quality, or the credit quality
of our counterparties,
• 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,
• challenges associated with retention of a qualified
workforce,
• adverse performance of our decommissioning and defined benefit
plan trust fund investments and changes in discount rates and
funding requirements, and
• 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)