Income From Continuing Operations Of $1.06 Per Share NEWARK, N.J.,
Oct. 28 /PRNewswire-FirstCall/ -- Public Service Enterprise Group
(PSEG) announced today (October 28, 2005) third quarter Income from
Continuing Operations of $260 million or $1.06 per diluted share of
common stock based on 244 million average shares outstanding.
Including charges of $7 million or 3 cents per share related to
Discontinued Operations at PSEG Power's Waterford facility, PSEG
reported Net Income of $253 million or $1.03 per share. Income from
Continuing Operations includes merger related costs (net of tax) of
$10 million or 4 cents per share for the quarter. Excluding merger
related costs, adjusted (non-GAAP) Operating Earnings for the third
quarter of 2005 were $270 million or $1.10 per share of common
stock. PSEG believes that this non-GAAP financial measure provides
consistent and comparable measures to help shareholders understand
current and future operating results. Comparable Income from
Continuing Operations for the third quarter of 2004 was $252
million or $1.06 per share, based on 238 million average shares
outstanding. Including a net loss of $8 million, or 3 cents per
share from Discontinued Operations at PSEG Power, PSEG reported Net
Income of $244 million or $1.03 per share. For the nine months
ended September 30, 2005, PSEG reported Income from Continuing
Operations of $653 million, or $2.68 per share based on 243 million
average shares outstanding. Including charges of $197 million, or
81 cents per share related to Discontinued Operations at PSEG
Power's Waterford facility, PSEG reported Net Income of $456
million or $1.87 per share. Income from Continuing Operations
includes merger related costs (net of tax) of $26 million or 11
cents per share for the first nine months. Excluding merger related
costs, adjusted (non-GAAP) Operating Earnings were $679 million or
$2.79 per share of common stock for the first nine months.
Comparable Income from Continuing Operations for the first nine
months of 2004 was $661 million or $2.78 per share, based on 238
million average shares outstanding. Including a net loss of $22
million, or 9 cents per share from Discontinued Operations at PSEG
Power and PSEG Global, PSEG reported Net Income of $639 million or
$2.69 per share. Attachments to this release provide a summary of
quarter and year-to-date results for 2005 and 2004 for PSEG's
principal subsidiaries - Public Service Electric and Gas Company
(PSE&G), PSEG Power and PSEG Energy Holdings. THIRD QUARTER
RESULTS Thomas M. O'Flynn, chief financial officer, said that
results for the third quarter were driven by favorable weather and
increased demand at PSE&G along with higher energy prices in
Texas, which helped Energy Holdings' quarterly results. "For the
quarter, PSE&G's service territory experienced weather, as
measured by the Temperature Humidity Index, that was warmer than
normal contributing an additional 4 cents to earnings compared to
the prior year's quarter. For the full year, weather has had a
favorable impact of about 5 cents per share," O'Flynn said. "Demand
revenues - which are based on the peak demand for each month -
contributed an additional 4 cents per share for the quarter
compared to last year and helped to offset the lower electric
demand we saw in the second quarter of 2005." For the year, demand
revenues at PSE&G are about one cent below last year, the
result of reduced customer usage due to gas prices in the first
quarter. Overall, PSE&G reported earnings of 47 cents per share
for the quarter, an improvement of 8 cents per share over the third
quarter of 2004. "We continue to benefit from the operational
expertise Exelon has brought to our New Jersey nuclear units," said
O'Flynn. For the quarter, the three units had a combined capacity
factor of 96.5%, a 4.5% improvement over the third quarter of last
year. On October 11, Salem Unit 1 started its 17th refueling outage
which includes the replacement of the reactor vessel head. This
outage marked the end of 152 days of continuous simultaneous
operation for the two Salem units - a new record surpassing the
previous mark of 148 days set in 1991. The strong performance by
the Salem units helped mitigate the costs of a 7-day outage at Hope
Creek that occurred in late August. Replacement power costs at that
time - in the aftermath of Hurricane Katrina - were about $2.5
million per day, more than double historical averages. For the
quarter, incremental replacement power costs for our New Jersey
nuclear units were $7 million. Similar to the nuclear fleet, the
New Jersey coal fleet has improved both its availability and
capacity over last year. Year-over-year, availability increased by
27% and the capacity factor increased by 21% for the New Jersey
coal fleet. During the third quarter however, the Hudson plant had
unplanned outages that resulted in $18 million of replacement power
costs. "The high replacement power costs reflect the cost
differential between low cost coal production and gas-driven prices
for electricity this summer," O'Flynn said. Power enters into
forward contracts for natural gas and electricity, a modest number
of which require mark-to-market accounting. During the third
quarter, Power recorded about $15 million, or 4 cents per share of
unrealized losses, which will reverse in future periods. Also at
Power, the nuclear decommissioning trust fund recognized $38
million in gains during the quarter, the result of a restructuring
and asset rebalancing that will continue into the fourth quarter.
Overall for the quarter, Power reported Operating Earnings of 55
cents per share, a 3 cent per share decline from the third quarter
of last year. "Earlier this month, the PSEG board approved a plan
under the Jobs Act to repatriate cash from Energy Holdings,"
O'Flynn said. The Jobs Act provided a one-year window to repatriate
earnings from foreign investments at favorable tax rates. Of the
$182 million repatriated so far this year, approximately $140
million was eligible for the reduced tax rate. Taxes incurred as a
result of the repatriation reduced earnings by $9 million for the
quarter. Approximately $50 million in additional cash may be
available for repatriation under the Jobs Act later this year. Also
at Energy Holdings, the higher demand in Texas provided incremental
earnings of $16 million for the quarter. Overall, Energy Holdings
reported earnings of 16 cents per share for the quarter, a 2 cent
per share improvement over 2004. "Year to date results comfortably
position us to achieve our 2005 earnings guidance of $3.15 to $3.35
per share," O'Flynn said. "Last year the fourth quarter was
difficult because of the extended Hope Creek outage. This year, our
nuclear and fossil units have performed well, with Salem Unit 2
completing the reactor vessel head replacement and refueling in
record time of just under 36 days this spring. We have every
expectation of Salem Unit 1 meeting or exceeding the record set by
Salem Unit 2, when it completes the current outage." LONGER TERM
OUTLOOK "This year we have witnessed dramatic changes in the
natural gas and electric markets in which we transact on a daily
basis," said O'Flynn. Natural gas prices have almost doubled since
the beginning of the year. With gas- fired units often setting the
price for electricity, we've seen a 60% increase in forward
round-the-clock electric prices during this period. "As we've
stated before, Power's objective is to term up at least 75% of its
output over the next 18- 24 months," O'Flynn said. "Current BGS
(Basic Generation Service) contracts were entered into when
round-the-clock forward electric prices ranged between $32 and $47
per MWhr. Prices since the time of the last auction have continued
to move upward, and are currently in the low $70 range. PSEG is
providing 2006 earnings guidance of $3.45 to $3.75 per share. "This
represents a 10% improvement over the 2005 guidance and is driven
largely by the higher energy prices and the cost effectiveness of
the PSEG nuclear and coal fleet. With the level of expected output
and prices we've termed up, we expect Power will be a major
contributor to the increased earnings from 2005 to 2006," O'Flynn
said. O'Flynn commented, "We've termed up 85-90% of our expected
2006 coal and nuclear generation at PSEG Power at attractive prices
as the market has been moving up." The coal and nuclear fleet
represents over 80% of Power's expected annual output and an even
larger portion of profitability. The guidance also assumes
reasonable outcomes in the two outstanding PSE&G regulatory
filings - the elimination of the $64 million depreciation credit
from the 2003 electric base rate case and the $133 million gas base
rate increase that was filed on September 30. O'Flynn also noted
that Energy Holdings is expected to continue to be a meaningful
contributor to PSEG's earnings in 2006 with continued strong
results from its merchant generation business in Texas and solid
contributions from its South American distribution businesses.
Assumptions used in creating the 2006 plan, and the related
sensitivities on the guidance are included in Attachment 11. Beyond
2006, Power has increased the volume of contracted generation
through the 2007 and 2008 periods providing meaningful uplift to
PSEG's future earnings. "We've hedged 65% - 75% of the expected
output of our nuclear and coal plants for 2007 and 35% - 50% for
2008 at attractive prices. PSEG's earnings growth rates for 2007
and 2008 are expected to exceed the 10% improvement we're
projecting from 2005 to 2006," O'Flynn said. The current high
commodity price environment should benefit Power's earnings longer
term, assuming generating units operate as planned. Another, nearer
term impact has been the increased collateral requirements on some
of the older, longer-dated contracts at Power. Generally, these
contracts require collateral in the form of cash or a letter of
credit. The amount required fluctuates with the underlying contract
prices. Power reported a $700 million increase in margin
requirements related to these positions during the third quarter.
To meet the increased margin needs, O'Flynn said, PSEG and Power
have entered into several bilateral credit agreements providing a
total of $500 million in additional capacity for funding or letters
of credit. As of today, PSEG has approximately $2.1 billion of
liquidity available. CUSTOMER IMPACT As noted above, higher natural
gas prices impact many aspects of PSEG. At PSE&G, the regulated
utility, customers are already seeing the impact of a 10.6%
increase in gas commodity costs that was granted in August by the
NJBPU. This increase was necessary to recover costs from the 2004
heating season, as well as expected costs for 2005. O'Flynn noted
that if prices continue to rise and it appears PSE&G will not
fully recover the cost of the gas supply before next fall,
PSE&G is authorized by the NJBPU to implement two additional
increases of 5% each on December 1 and February 1. "Even with rate
increases such as these, residential customers of PSE&G will
not feel the full brunt of the higher gas prices this winter. The
vast majority of the expected residential gas needs for this
heating season will be provided at rates that are below current
market prices," O'Flynn said. Under the BGSS (Basic Gas Supply
Service) contract between Power and PSE&G, Power is able to use
a combination of forward contracts and gas storage capabilities to
mitigate the impact of higher prices on residential customers.
PSE&G makes no margin on the gas commodity which is a direct
pass-through to customers. The NJBPU recently established a Board
Staff Fuel Cost Team to work with the gas distribution companies in
New Jersey to further analyze the impacts of wholesale natural gas
prices and to explore options for mitigating cost increases to
customers. MERGER UPDATE Earlier this month, the Administrative Law
Judge assigned to review the merger in New Jersey approved a
modification to the schedule that moved the dates for testimony and
hearings out about 30 days, but retained the March 30 date for an
initial decision and May 15 for the final order date. There is a
window for settlement discussions in December in advance of the
scheduled hearings in early January. Recently, the senior leaders
previously named for the post-merger company announced the broader
leadership team. "We are very pleased to see an organization that
reflects the best of both Exelon and PSEG. We look forward to a
timely approval of the pending regulatory requests so the benefits
of the merger can quickly reach the customers, employees and
shareholders of both companies," O'Flynn said. "Safe Harbor"
Statement under the Private Securities Litigation Reform Act of
1995 This filing contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such statements include, but are not limited to, statements about
the benefits of the business combination transaction involving
Public Service Enterprise Group Incorporated and Exelon
Corporation, including future financial and operating results, the
combined company's plans, objectives, expectations and intentions
and other statements that are not historical or current facts. Such
statements are based upon the current beliefs and expectations of
Public Service Enterprise Group Incorporated's and Exelon
Corporation's management, are subject to significant risks and
uncertainties and may differ materially from actual future
experience involving any one or more of such matters. Actual
results may differ from those set forth in the forward-looking
statements. The following factors, among others, could cause actual
results to differ from those set forth in the forward-looking
statements: the timing of the contemplated merger and the impact of
any conditions imposed by regulators in connection with their
approval thereof; the failure of Public Service Enterprise Group
Incorporated and Exelon Corporation stockholders to make the
requisite approvals for the transaction; the risk that the
businesses will not be integrated successfully; failure to quickly
realize cost-savings from the transaction as a result of technical,
logistical, competitive and other factors; the effects of weather;
the performance of generating units and transmission systems; the
availability and prices for oil, gas, coal, nuclear fuel, capacity
and electricity; changes in the markets for electricity and other
energy-related commodities; changes in the number of participants
and the risk profile of such participants in the energy marketing
and trading business; the effectiveness of our risk management and
internal controls systems; the effects of regulatory decisions and
changes in law; changes in competition in the markets we serve; the
ability to recover regulatory assets and other potential stranded
costs; the outcomes of litigation and regulatory proceedings or
inquiries; the timing and success of efforts to develop domestic
and international power projects; conditions of the capital markets
and equity markets; advances in technology; changes in accounting
standards; changes in interest rates and in financial and foreign
currency markets generally; the economic and political climate and
growth in the areas in which we conduct our activities; and changes
in corporate strategies. While we believe that our forecasts and
assumptions are reasonable, we caution that actual results may
differ materially. We intend the forward-looking statements to
speak only as of the time first made and we do not undertake to
update or revise them as more information becomes available.
Additional factors that could cause Public Service Enterprise Group
Incorporated's and Exelon Corporation's results to differ
materially from those described in the forward-looking statements
can be found in the 2004 Annual Reports on Form 10- K, and
Quarterly Reports on Form 10-Q for the quarterly period ended March
31, 2005, of Public Service Enterprise Group Incorporated and
Exelon Corporation. as well as Exelon's Form S-4 filed on February
4, 2005, as such reports and forms may have been amended, each
filed with the Securities and Exchange Commission and available at
the Securities and Exchange Commission's website,
http://www.sec.gov/. Additional Information This communication is
not a solicitation of a proxy from any security holder of Public
Service Enterprise Group Incorporated or Exelon Corporation. Exelon
Corporation has filed with the Securities and Exchange Commission a
registration statement (File No. 333-122704) that includes the
definitive joint proxy statement/prospectus that has been mailed by
Public Service Enterprise Group Incorporated and Exelon Corporation
to their respective security holders in connection with the
proposed merger of Public Service Enterprise Group Incorporated and
Exelon Corporation. WE URGE INVESTORS AND SECURITY HOLDERS TO READ
THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER
RELEVANT DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED, EXELON CORPORATION
AND THE PROPOSED MERGER. Investors and security holders are able to
obtain these materials and other documents filed with the
Securities and Exchange Commission free of charge at the Securities
and Exchange Commission's website, http://www.sec.gov/. In
addition, a copy of the definitive joint proxy statement/prospectus
may be obtained free of charge from Public Service Enterprise Group
Incorporated, Investor Relations, 80 Park Plaza, P.O. Box 1171,
Newark, New Jersey 07101-1171, or from Exelon Corporation, Investor
Relations, 10 South Dearborn Street, P.O. Box 805398, Chicago,
Illinois 60680- 5398. Participants in Solicitation Public Service
Enterprise Group Incorporated, Exelon Corporation, their respective
directors and executive officers and other persons may be deemed to
be participants in the solicitation of proxies in respect of the
proposed transaction. Information regarding Public Service
Enterprise Group Incorporated's and Exelon Corporation's directors
and executive officers is available in preliminary joint proxy
statement/prospectus contained in the above referenced registration
statement. OTHER INFORMATION REGARDING THE PARTICIPANTS IN THE
PROXY SOLICITATION AND A DESCRIPTION OF THEIR DIRECT AND INDIRECT
INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, IS CONTAINED IN THE
DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT
MATERIALS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. PUBLIC
SERVICE ENTERPRISE GROUP INCORPORATED (Unaudited) For the Quarter
For the Nine Ended Months Ended September 30, September 30, 2005
2004 2005 2004 Earnings Results (in Millions) PSE&G $114 $92
$279 $278 PSEG Power 135 139 313 319 PSEG Energy Holdings PSEG
Global 22 17 101 68 PSEG Resources 17 18 39 31 PSEG Energy Holdings
- (2) (3) (7) Total PSEG Energy Holdings 39 33 137 92 PSEG (18)
(12) (50) (28) Operating Earnings $270 $252 $679 $661 Merger and
Merger Related Costs, net of tax (10) - (26) - Income from
Continuing Operations $260 $252 $653 $661 Loss from Discontinued
Operations, including Loss on Disposal, net of tax (7) (8) (197)
(22) PSEG Net Income $253 $244 $456 $639 Fully Diluted Average
Shares Outstanding (in Millions) 244 238 243 238 Per Share Results
(Diluted) PSE&G $0.47 $0.39 $1.15 $1.17 PSEG Power 0.55 0.58
1.29 1.34 PSEG Energy Holdings PSEG Global 0.09 0.07 0.41 0.28 PSEG
Resources 0.07 0.08 0.16 0.13 PSEG Energy Holdings 0.00 (0.01)
(0.01) (0.02) Total PSEG Energy Holdings 0.16 0.14 0.56 0.39 PSEG
(0.08) (0.05) (0.21) (0.12) Operating Earnings $1.10 $1.06 $2.79
$2.78 Merger and Merger Related Costs, net of tax (0.04) 0.00
(0.11) 0.00 Income from Continuing Operations $1.06 $1.06 $2.68
$2.78 Loss from Discontinued Operations, including Loss on
Disposal, net of tax (0.03) (0.03) (0.81) (0.09) PSEG Net Income
$1.03 $1.03 $1.87 $2.69 Note 1: Net Income includes preferred stock
dividends / preference units distributions relating to PSE&G of
$1 million and $1 million and PSEG Global of $0 million and $3
million for the quarters ended September 30, 2005 and 2004,
respectively. Net Income includes preferred stock dividends /
preference units distributions relating to PSE&G of $3 million
and $3 million, PSEG Global of $3 million and $11 million and PSEG
Resources of $0 and $2 million for the nine months ended September
30, 2005 and 2004, respectively. Note 2: Basic Earnings per Share
from Net Income was $1.06 and $1.03 per share for the quarters
ended September 30, 2005 and 2004, respectively. Basic Earnings per
Share from Net Income was $1.91 and $2.70 per share for the nine
months ended September 30, 2005 and 2004, respectively. PUBLIC
SERVICE ENTERPRISE GROUP INCORPORATED CONSOLIDATING STATEMENT OF
OPERATIONS For the Quarter Ended September 30, 2005 (Unaudited, $
Millions) PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS
(Note 2) OPERATING REVENUES $3,376 $(381) $1,934 $1,444 $379
OPERATING EXPENSES Energy Costs 1,999 (382) 1,195 983 203 Operation
and Maintenance 560 3 276 223 58 Depreciation and Amortization 207
4 155 34 14 Taxes Other Than Income Taxes 34 (1) 35 - - Total
Operating Expenses 2,800 (376) 1,661 1,240 275 Income from Equity
Method Investments 29 - - - 29 OPERATING INCOME 605 (5) 273 204 133
Other Income and Deductions 55 (5) 2 61 (3) Interest Expense (216)
(33) (86) (32) (65) Preferred Securities Dividends (1) - (1) - -
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 443
(43) 188 233 65 Income Tax Expense (183) 18 (74) (101) (26) INCOME
FROM CONTINUING OPERATIONS 260 (25) 114 132 39 Loss from
Discontinued Operations, including Loss on Disposal, net of tax (7)
- - (7) - NET INCOME $253 $(25) $114 $125 $39 INCOME FROM
CONTINUING OPERATIONS $260 $(25) $114 $132 $39 Merger and
Merger-Related Costs 10 7 - 3 - OPERATING EARNINGS $270 $(18) $114
$135 $39 For the Quarter Ended September 30, 2004 (Unaudited, $
Millions) PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS
(Note 2) OPERATING REVENUES $2,749 $(328) $1,636 $1,130 $311
OPERATING EXPENSES Energy Costs 1,418 (326) 960 636 148 Operation
and Maintenance 527 (9) 261 211 64 Depreciation and Amortization
190 6 140 29 15 Taxes Other Than Income Taxes 30 - 30 - - Total
Operating Expenses 2,165 (329) 1,391 876 227 Income from Equity
Method Investments 31 - - - 31 OPERATING INCOME 615 1 245 254 115
Other Income and Deductions 22 - 4 23 (5) Interest Expense (207)
(22) (86) (33) (66) Preferred Securities Dividends (1) 3 (1) - (3)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 429
(18) 162 244 41 Income Tax Expense (177) 6 (70) (105) (8) INCOME
FROM CONTINUING OPERATIONS 252 (12) 92 139 33 Loss from
Discontinued Operations, net of tax (8) - - (8) - NET INCOME $244
$(12) $92 $131 $33 Note 1: Income from Continuing Operations before
Income Taxes includes preferred stock dividends / preference units
distributions relating to PSE&G of $1 million and $1 million,
PSEG Global of $0 million and $3 million for the quarters ended
September 30, 2005 and 2004, respectively. Note 2: Primarily
includes financing activities at the parent and intercompany
eliminations. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONSOLIDATING STATEMENT OF OPERATIONS For the Nine Months Ended
September 30, 2005 (Unaudited, $ Millions) PSEG PSEG ENERGY PSEG
OTHER PSE&G POWER HOLDINGS (Note 2) OPERATING REVENUES $9,127
$(1,751) $5,559 $4,234 $1,085 OPERATING EXPENSES Energy Costs 5,213
(1,752) 3,472 2,941 552 Operation and Maintenance 1,734 3 839 685
207 Depreciation and Amortization 572 13 418 96 45 Taxes Other Than
Income Taxes 105 (1) 106 - - Total Operating Expenses 7,624 (1,737)
4,835 3,722 804 Income from Equity Method Investments 96 - - - 96
OPERATING INCOME 1,599 (14) 724 512 377 Other Income and Deductions
102 (4) 5 102 (1) Interest Expense (631) (96) (256) (86) (193)
Preferred Securities Dividends (3) 3 (3) - (3) INCOME FROM
CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 1,067 (111) 470
528 180 Income Tax Expense (414) 45 (191) (225) (43) INCOME FROM
CONTINUING OPERATIONS 653 (66) 279 303 137 Loss from Discontinued
Operations, including Loss on Disposal, net of tax (197) - - (197)
- NET INCOME $456 $(66) $279 $106 $137 INCOME FROM CONTINUING
OPERATIONS $653 $(66) $279 $303 $137 Merger and Merger-Related
Costs 26 16 - 10 - OPERATING EARNINGS $679 $(50) $279 $313 $137 For
the Nine Months Ended September 30, 2004 (Unaudited, $ Millions)
PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS (Note 2)
OPERATING REVENUES $8,262 $(1,493) $5,236 $3,818 $701 OPERATING
EXPENSES Energy Costs 4,498 (1,491) 3,203 2,544 242 Operation and
Maintenance 1,604 (28) 797 672 163 Depreciation and Amortization
525 14 393 78 40 Taxes Other Than Income Taxes 103 - 103 - - Total
Operating Expenses 6,730 (1,505) 4,496 3,294 445 Income from Equity
Method Investments 92 - - - 92 OPERATING INCOME 1,624 12 740 524
348 Other Income and Deductions 89 (3) 9 96 (13) Interest Expense
(627) (73) (273) (85) (196) Preferred Securities Dividends (3) 13
(3) - (13) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
(Note 1) 1,083 (51) 473 535 126 Income Tax Expense (422) 23 (195)
(216) (34) INCOME FROM CONTINUING OPERATIONS 661 (28) 278 319 92
Loss from Discontinued Operations, including Gain on Disposal, net
of tax (22) - - (27) 5 NET INCOME $639 $(28) $278 $292 $97 Note 1:
Income from Continuing Operations before Income Taxes includes
preferred stock dividends / preference units distributions relating
to PSE&G of $3 million and $3 million, PSEG Global of $3
million and $11 million and PSEG Resources of $0 and $2 million for
the nine months ended September 30, 2005 and 2004 respectively.
Note 2: Primarily includes financing activities at the parent and
intercompany eliminations. PUBLIC SERVICE ENTERPRISE GROUP
INCORPORATED CAPITALIZATION SCHEDULE (Unaudited, $ Millions)
September 30, December 31, 2005 2004 DEBT Commercial Paper and
Loans $371 $638 Long-Term Debt, including amounts due within one
year 9,077 8,588 Securitization Debt, including amounts due within
one year 2,082 2,085 Project Level, Non-Recourse Debt, including
amounts due within one year 1,237 1,437 Debt Supporting Trust
Preferred Securities, including amounts due within one year 1,201
1,201 Total Debt 13,968 13,949 SUBSIDIARY'S PREFERRED SECURITIES 80
80 COMMON STOCKHOLDERS' EQUITY Common Stock 4,581 4,569 Treasury
Stock (968) (978) Retained Earnings 2,480 2,425 Accumulated Other
Comprehensive Loss (588) (272) Total Common Stockholders' Equity
5,505 5,744 Total Capitalization $19,553 $19,773 PUBLIC SERVICE
ENTERPRISE GROUP INCORPORATED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2005 (Unaudited, $
Millions) PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS
(Note 1) CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Note 2)
$456 $(66) $279 $106 $137 Adjustments to Reconcile Net Income to
Net Cash Flows From Operating Activities Loss on Disposal of
Discontinued Operations, net of tax 178 - - 178 - Depreciation and
Amortization 572 13 418 96 45 Amortization of Nuclear Fuel 69 - -
69 - Other (368) (6) (236) (161) 35 Net Cash Provided by (Used in)
Operating Activities 907 (59) 461 288 217 CASH FLOWS FROM INVESTING
ACTIVITIES Additions to Property, Plant and Equipment (751) (8)
(372) (345) (26) Proceeds from Sale of Property, Plant and
Equipment 226 - - 226 - Proceeds from Sale of Investments 26 - - -
26 Collection of Note Receivable 132 - - - 132 Other (39) 13 (3)
(62) 13 Net Cash (Used in) Provided by Investing Activities (406) 5
(375) (181) 145 CASH FLOWS FROM FINANCING ACTIVITIES Net change in
Short-term Debt (267) (347) 80 - - Issuance of Long-term Debt (LTD)
732 375 353 - 4 Return of Capital - 284 - - (284) Redemption of LTD
and Project Level/Securitization LTD (250) - (230) - (20) Issuance
of Common Stock/Contributed Capital 55 55 - - - Cash Dividends Paid
on Common Stock (401) (401) - - - Other (42) 65 (3) (98) (6) Net
Cash (Used in) Provided by Financing Activities (173) 31 200 (98)
(306) Effect of Exchange Rate Change 1 - - - 1 Net Increase
(Decrease) in Cash and Cash Equivalents 329 (23) 286 9 57 Cash and
Cash Equivalents at Beginning of Period 279 64 6 10 199 Cash and
Cash Equivalents at End of Period $608 $41 $292 $19 $256 For the
Nine Months Ended September 30, 2004 (Unaudited, $ Millions) PSEG
PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS (Note 1) CASH FLOWS
FROM OPERATING ACTIVITIES Net Income (Note 2) $639 $(28) $278 $292
$97 Adjustments to Reconcile Net Income to Net Cash Flows From
Operating Activities Gain on Disposal of Discontinued Operations,
net of tax (5) - - - (5) Depreciation and Amortization 525 14 393
78 40 Amortization of Nuclear Fuel 63 - - 63 - Other 32 18 (264) 55
223 Net Cash Provided by Operating Activities 1,254 4 407 488 355
CASH FLOWS FROM INVESTING ACTIVITIES Additions to Property, Plant
and Equipment (887) (11) (290) (522) (64) Proceeds from Sale of
Investments 306 - - - 306 Other (112) (235) (97) 73 147 Net Cash
(Used in) Provided by Investing Activities (693) (246) (387) (449)
389 CASH FLOWS FROM FINANCING ACTIVITIES Net change in Short-term
Debt 361 (186) 285 262 - Issuances of Long-term Debt (LTD) 1,413
200 710 488 15 Redemption of LTD and Project Level/Securitization
LTD (2,129) - (990) (800) (339) Return of Capital - 300 - - (300)
Issuance of Common Stock/Contributed Capital 63 63 - - - Cash
Dividends Paid on Common Stock (391) (391) - - - Other (14) 86
(100) - - Net Cash (Used in) Provided by Financing Activities (697)
72 (95) (50) (624) Effect of Exchange Rate Change - - - - - Net
(Decrease) Increase in Cash and Cash Equivalents (136) (170) (75)
(11) 120 Cash and Cash Equivalents at Beginning of Period 452 181
140 27 104 Cash and Cash Equivalents at End of Period $316 $11 $65
$16 $224 Note 1: Primarily includes financing activities at the
parent and intercompany eliminations. Note 2: Net Income includes
preferred stock dividends / preference units distributions relating
to PSE&G of $3 million and $3 million and Energy Holdings of $3
million and $13 million for the nine months ended September 30,
2005 and 2004, respectively. PUBLIC SERVICE ENTERPRISE GROUP
INCORPORATED Quarter-to-Quarter EPS Reconciliation September 30,
2005 vs. September 30, 2004 (Unaudited) PSEG 3rd Quarter 2004 Net
Income $1.03 Loss from Discontinued Operations 0.03 PSEG 3rd
Quarter 2004 Income from Continuing Operations $1.06 PSE&G
B/(W) 3rd Quarter 2004 $0.39 Weather - Electric 0.04 Electric
Demand 0.04 Other 0.01 Shares Outstanding (0.01) 3rd Quarter 2005
$0.47 $0.08 PSEG Power 3rd Quarter 2004 $0.58 Replacement Power
(Salem, Hope Creek, Hudson) (0.06) Mark to Market/BGSS (0.04)
Margin (0.10) NDT Income 0.09 O&M, Depreciation, Interest and
other (0.01) Shares outstanding (0.01) 3rd Quarter 2005 $0.55
$(0.03) PSEG Energy Holdings 3rd Quarter 2004 $0.14 Global
Operations - primarily TIE 0.06 Cost of Cash Repatriation (0.04)
3rd Quarter 2005 $0.16 $0.02 Public Service Enterprise Group 3rd
Quarter 2004 $(0.05) Interest Expense, excluding Merger and Merger
Related costs of ($0.03) 3rd Quarter 2005 $(0.08) $(0.03) PSEG 3rd
Quarter 2005 Operating Earnings $1.10 Merger and Merger Related
Costs (0.04) PSEG 3rd Quarter 2005 Income from Continuing
Operations $1.06 Loss from Discontinued Operations, including Loss
on Disposal (0.03) PSEG 3rd Quarter 2005 Net Income $1.03 PUBLIC
SERVICE ENTERPRISE GROUP INCORPORATED YTD-to-YTD EPS Reconciliation
September 30, 2005 vs. September 30, 2004 (Unaudited) PSEG Net
Income for the Nine Months Ended September 30, 2004 $2.69 Loss from
Discontinued Operations, including Gain on Disposal 0.09 PSEG
Income from Continuing Operations for the Nine Months Ended
September 30, 2004 $2.78 PSE&G B/(W) Year to Date September 30,
2004 $1.17 Weather 0.05 Demands and Volume (first quarter Gas)
(0.01) O&M (0.06) Interest Savings 0.03 Other (0.01) Additional
Shares Outstanding (0.02) Year to Date September 30, 2005 $1.15
$(0.02) PSEG Power Year to Date September 30, 2004 $1.34 Margin
0.03 Depreciation & Amortization - Lawrenceburg and BEC (0.04)
Other (0.01) Additional Shares Outstanding (0.03) Year to Date
September 30, 2005 $1.29 $(0.05) PSEG Energy Holdings Year to Date
September 30, 2004 $0.39 Global Operations - Primarily TIE and
South America 0.15 Net Foreign Exchange Gains - Primarily Elcho
0.03 Cost of Cash Repatriation (0.04) Additional Shares Outstanding
(0.01) 0.13 Resources Operations (includes EME-Collins lease
termination in 2004, sale of SEGS in 2005, partially offset by
write off of UAL lease in 2005) 0.03 Additional Shares Outstanding
- 0.03 Energy Holdings (Parent) 0.01 Year to Date September 30,
2005 $0.56 $0.17 Public Service Enterprise Group Year to Date
September 30, 2004 $(0.12) Interest Expense (0.09) Year to Date
September 30, 2005 $(0.21) $(0.09) PSEG Operating Earnings for the
Nine Months Ended September 30, 2005 $2.79 Merger and Merger
Related Costs (0.11) PSEG Income from Continuing Operations for the
Nine Months Ended September 30, 2005 $2.68 Loss from Discontinued
Operations, including Loss on Disposal (0.81) PSEG Net Income for
the Nine Months Ended September 30, 2005 $1.87 PSEG Global L.L.C.
Investment Results (Unaudited, $ Millions) Total Capital at Risk
(A) For the Quarter For the Nine Months As of Ended Ended September
December September 30, 2005 September 30, 2005 30, 31, Non-Recourse
Non-Recourse 2005 2004 EBIT(B) Interest(C) EBIT(B) Interest(C)
Region North America $467 $427 $51 $6 $119 $16 South America 1,635
1,581 40 10 114 28 Europe 181 209 (2) 8 34 26 India and Oman 64 94
- - 10 4 Asia Pacific 6 6 - - 5 - Global G&A - Unallocated - -
(5) - (19) - Total $2,353 $2,317 $84 $24 $263 $74 For the Quarter
For the Nine Months Ended Ended September 30, 2004 September 30,
2004 Non-Recourse Non-Recourse EBIT(B) Interest(C) EBIT(B)
Interest(C) Region North America $27 $7 $91 $7 South America 31 4
101 14 Europe 5 8 25 24 India and Oman 5 4 15 12 Asia Pacific 5 -
13 - Global G&A - Unallocated (6) - (22) - Total $67 $23 $223
$57 Reconciliation of EBIT to Income from For the Quarters For the
Nine Continuing Operations Ended Months Ended September 30,
September 30, 2005 2004 2005 2004 Total Global EBIT $84 $67 $263
$223 Interest Expense (45) (46) (133) (123) Income Taxes (18) -
(23) (19) Minority Interest 1 (1) (3) (3) Preference Unit
Distributions - (3) (3) (11) Income from Continuing Operations $22
$17 $101 $67 (A) Total Capital at Risk includes Global's gross
investments and equity commitment guarantees less non-recourse debt
at the project level. (B) For investments accounted for under the
equity method of accounting, includes Global's share of net
earnings, including Interest Expense and Income Tax Expense. (C)
Non-Recourse Interest is Interest Expense on debt that is
non-recourse to Global. PUBLIC SERVICE ELECTRIC & GAS Sales and
Revenues to Customers September 2005 Electric Sales and Revenues
Three Change Nine Change Twelve Change Sales (millions kwh) Months
vs. Months vs. Months vs. Ended 2004 Ended 2004 Ended 2004
Residential 4,820 20.9% 11,010 8.1% 13,946 7.0% Commercial 6,979
9.7% 18,373 3.6% 23,960 3.1% Industrial 1,788 2.6% 4,740 -4.2%
6,313 -3.0% Street Lighting 81 -0.5% 257 0.1% 364 0.1%
Interdepartmental 4 0.0% 12 -39.0% 24 12.3% Total 13,672 12.3%
34,392 3.8% 44,607 3.3% Revenue (in millions) Residential $602
24.9% $1,296 9.3% $1,601 5.8% Commercial 720 13.4% 1,615 6.2% 1,984
2.9% Industrial 113 -9.9% 264 -7.3% 338 -7.8% Street Lighting 15
2.6% 46 2.8% 61 1.0% Other 120 58.5% 262 19.7% 336 25.2% Total
$1,570 17.8% $3,483 7.0% $4,320 4.5% Gas Sold and Transported Three
Change Nine Change Twelve Change Sales (millions therms) Months vs.
Months vs. Months vs. Ended 2004 Ended 2004 Ended 2004 Residential
Sales 99 -4.3% 1,002 -1.7% 1,455 -1.6% Commercial - Firm Sales 39
-11.6% 398 -5.4% 568 -3.9% Commercial - Interr. & Cogen 18
62.0% 46 34.0% 60 31.0% Industrial - Firm Sales 3 13.8% 33 -11.5%
47 -10.6% Industrial - Interr. & Cogen 129 21.7% 285 -0.7% 375
-7.9% Other Operating Revenues 0 -99.2% 1 -88.0% (6) -167.3% Total
288 6.4% 1,764 -2.3% 2,499 -3.3% Gas Transported 251 3.2% 786 5.0%
1,072 2.5% Revenue (in millions) Residential Sales 73 -2.6% 770
4.8% 1,112 2.4% Commercial - Firm Sales 41 35.0% 341 4.2% 505 12.7%
Commercial - Interr. & Cogen 10 2.2% 37 41.5% 45 34.8%
Industrial - Firm Sales 3 97.3% 29 -0.8% 43 6.2% Industrial -
Interr. & Cogen 125 66.1% 254 23.5% 325 19.3% Other Operating
Revenues 33 13.9% 97 11.0% 129 -2.9% Total 285 29.0% 1,528 8.3%
2,159 8.1% Gas Transported 78 -3.1% 548 -3.9% 814 -1.0% Three
Change Nine Change Twelve Change Weather Data Months vs. Months vs.
Months vs. Ended 2004 Ended 2004 Ended 2004 Degree Days - Actual 9
-35.7% 3,247 1.5% 4,929 1.9% Degree Days - Normal 39 3,154 4,839
THI Hours - Actual 14,333 37.5% 18,589 25.5% 18,631 24.1% THI Hours
- Normal 11,044 14,614 14,878 PUBLIC SERVICE ENTERPRISE GROUP
INCORPORATED STATISTICAL MEASURES (Unaudited) Quarters Ended Nine
Months Ended September 30, September 30, 2005 2004 2005 2004
Weighted Average Common Shares Outstanding (000's) Basic 239,034
237,269 238,696 236,724 Diluted 244,286 237,728 243,212 237,883
Stock Price at End of Period $64.36 $42.60 Dividends Paid per Share
of Common Stock $0.56 $0.55 $1.68 $1.65 Dividend Payout Ratio*
72.7% 62.9% Dividend Yield 3.5% 5.2% Price/Earnings Ratio* 20.9
12.2 Rate of Return on Average Common Equity* 13.3% 15.7% Ratio of
Earnings to Fixed Charges 0.97 1.12 1.76 1.90 Book Value per Common
Share $23.01 $23.44 Market Price as a Percent of Book Value 280%
182% Total Shareholder Return - Period Ending 6.7% 7.8% 27.9% 1.1%
Total Shareholder Return - 12 Months Ending 57.4% 6.8% Quarters
Ended Nine Months Ended Generation by Fuel Type September 30,
September 30, 2005 2004 2005 2004 Nuclear - NJ 34% 37% 35% 35%
Nuclear - PA 15% 17% 19% 20% Total Nuclear 49% 54% 54% 55% Fossil -
Coal - NJ 12% 13% 12% 11% Fossil - Coal - PA 10% 11% 12% 12% Fossil
- Coal - CT 5% 5% 6% 6% Total Coal 27% 29% 30% 29% Fossil - Oil
& Natural Gas - NJ 14% 14% 11% 13% Fossil - Oil & Natural
Gas - NY 5% 0% 2% 1% Fossil - Oil & Natural Gas - CT 2% 1% 2%
1% Fossil - Oil & Natural Gas - Midwest 3% 1% 1% 0% Total Oil
& Natural Gas 24% 16% 16% 15% Fossil - Pumped Storage 0% 1% 0%
1% 100% 100% 100% 100% * Calculation based on earnings from
continuing operations for 12-month period ending PUBLIC SERVICE
ENTERPRISE GROUP INCORPORATED 2006 EARNINGS GUIDANCE $3.45 to $3.75
per Share Key Assumptions and Sensitivities for PSEG Power - 2006
Assumption Change Impact Natural Gas Prices $10/mmbtu $1/mmbtu 1
cent/share RTC Energy - PJM West $69/MWh $5/MWh 5 cents/share
Nuclear Capacity Factor 91.4% 1% 4 cents/share PJM Capacity Prices
$3/kW-yr $5/kW-yr 5 cents/share Estimated Generation Output Termed
Up by Year: 2006 2007 2008 Percent Under Contract 85% - 90% 65% -
75% 35% - 50% (Coal & Nuclear) --------------> DATASOURCE:
Public Service Enterprise Group Incorporated CONTACT: Paul
Rosengren, +1-973-430-5911, or Denise Denk, +1-973-430- 6336 Web
site: http://www.pseg.com/
Copyright