http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/RSS.ashxiPaper PagesFri, 02 Oct 2009 22:43:26 +0200http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=1http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=12008 009 Investorfact book2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=2http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=22009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=3http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=3Chairman’s Message PSEG has a proud history of improving the quality of life for the communities we serve. For more than a century, our company and employees have been dedicated to providing the energy that is part of the foundation of modern society. Our role in making life better has many dimensions. It begins with safe, reliable, economic and green energy. In three of the last four years, we were named the nation’s most reliable electric utility. We are in the forefront of our industry’s efforts to be responsible stewards of the environment. We have paid dividends to our shareholders for 102 consecutive years – a record matched by few companies. And we have a precious reputation for integrity we are determined to uphold in everything we do. While the term “sustainability” may be relatively new, the concept has long been an integral part of the PSEG culture. To us, sustainability means taking a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments. Today, society faces immense challenges to forge a path of growth that protects the environment, improves energy security and provides good jobs and livelihoods for people. We are well suited to execute projects to help meet these challenges and thus promote a sustainable future not only for ourselves, but the larger society. To this end, we are focusing on key issues such as climate change, energy infrastructure and workforce development. We have a range of energy efficiency and renewable energy initiatives that create jobs and clean the air. We are also creating jobs through our accelerated infrastructure investments to further improve reliability while providing an economic stimulus. We are working to build the emerging green economy on the basis of universal access, so that its benefits are realized by all people and not only the affluent. In all our efforts, we are pursuing a common vision of being a recognized leader for People providing Safe, Reliable, Economic and Green energy. Sustainability is a journey on which one advances through continuous improvement. We recognize there is much room for improvement on our part, and that our stakeholders are the ultimate judge of our efforts. The best solutions emerge by being open to a diversity of ideas and insights. We welcome the views of everyone who reads this report, and we look forward to continuing the dialogue. Sincerely, Ralph Izzo Chairman of the Board, President and Chief Executive Officer Public Service Enterprise Group Incorporated2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=4http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=4Tableofcontents Forward–Looking Statement .4 Historical Financial Overview .5 Public Service Enterprise Group .7 2007-2008 Results/2009 Goals .8 PSEG Financial Statements .12 PSEG Board of Directors .18 PSEG Executive Officers .19 PSEG Power . 21 Plant Locations, Fuel Diversity and Energy Produced .22 Generating Facilities .23 Capacity Factors .26 BGS Information .27 PJM Capacity — Auction Pricing .28 Carbon — Impact on Power’s EBITDA .29 Financial Statements .30 PSEG Power Executives .33 Public Service Electric and Gas Company . 35 Service Territory and Statistics .36 Electric — Sales, Revenues and Customers .37 Gas — Sales, Revenues and Customers .38 New Jersey Energy Master Plan .39 Rate Case . 40 Rate Base . 402009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=5http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=5Transmission Growth . 41 Financial Statements . 42 New Jersey Board of Public Utilities Members . 46 Federal Energy Regulatory Commission Members . 47 PSE&G Executive . 47 PSEG Energy Holdings . 49 Generating Facilities . 50 Financial Statements . 51 PSEG Resources - Top Ten Leases . 56 Non LILO/SILO Lease Investments . 57 PSEG Resources . 58 Energy Holdings Executives . 59 PSEG — Additional Financial Information . 61 2008 Year-End Capital Structure . 62 Capital Requirements . 63 Long-term Debt . 64 Short-term Liquidity . 68 Credit Ratings . 692009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=6http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=6Public Service Enterprise Group Forward–Looking Statement Readers are cautioned that statements contained in this fact book 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 purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance they will be achieved. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, but are not limited to: • Adverse Changes in energy industry, policies and regulation, including market structures and rules, and reliability standards • Any inability of our energy transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators. • Changes in federal and/or state environmental requirements 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 that might adversely affect our ability to continue to operate that unit or other units 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 reasonable pricing terms 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 or cost escalations in our construction and development activities. • Adverse investment performance of our decommissioning and defined benefit plan trust funds and changes in discount rates and funding requirements. • Changes in technology and/or increased customer conservation. 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 release. Forward-looking statements made herein only apply as of this 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. 42009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=7http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=7Historical Financial Overview This document is prepared once a year and is available online at www.pseg.com/investor. It is intended to supplement the Annual Report and other SEC filings and be used primarily by financial analysts to assist in detailed financial analysis. While this document does include abbreviated financial statements, it is not a substitute for the more detailed financial statements (including footnotes) found in the Annual Report and other SEC filings. We appreciate your comments and suggestions on ways to improve this document and will attempt to incorporate them in future editions. This summary is not intended for use in connection with any sale, offer to sell, or solicitation of any offer to buy securities. Inquires concerning this summary should be directed to: Kathleen Lally Vice President – Investor Relations (973) 430-6565 Kathleen.Lally@pseg.com Yaeni Kim Senior Investor Relations Analyst (973) 430-6596 Yaeni.Kim@pseg.com Greg McLaughlin Senior Investor Relations Analyst (973) 430-6568 Gregory.McLaughlin@pseg.com 52009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=8http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=8The PSEG Vision Being a recognized leader for: People providing Safe, reliable Economic and Green Energy “We are determined to maintain a strong company through our commitment to operational excellence, financial strength and disciplined investments.” Ralph Izzo Chairman, President and Chief Executive Officer2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=9http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=9PSEGPublicServiceEnterpriseGroup NYSE: PEG Facts About PSEG Company Profile Public Service Enterprise Group (PSEG) is a publicly traded (NYSE:PEG) diversified energy company headquartered in New Jersey, and one of the ten largest electric companies in the U.S. • Total assets (as of December 31, 2008): $29 billion • 2008 total annual revenues: $13.3 billion • Employees: Approximately 10,500 • PSEG celebrated its 100th anniversary in 2003. • PSEG has paid a dividend annually since 1907. • PSEG is ranked 101 on the 2008 Forbes 400 Best Big Companies list. • PSEG is ranked 198 on the 2008 Fortune 500 list. • PSEG a member of the Dow Jones Sustainability Index. • PSEG’s principal subsidiaries are: PSEG Power, Public Service Electric and Gas Company (PSE&G), and PSEG Energy Holdings. Power LLC2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=10http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=10PSEGPublicServiceEnterpriseGroup NYSE: PEG PEOPLE 2007-2008 Results Community • With the largest single charitable contribution in our company’s history, $5 million, supported the opening of the PSE&G Specialized Children’s Hospital • Maintained position as top utility fundraiser for March of Dimes • Attracted 3,411 jobs and $77.5 million in annual distribution revenue to communities in our service territory • Increased spending with diverse suppliers by 2.75% or $50.5 million from 2007 to 2008 • Developed partnership with Salem Community College to develop new Nuclear Energy Technology program 2009 Goals Community • Increase utilization of VolunteerMatch volunteer management system by 25% • Increase funding of environmentally-oriented community groups by 10% • Investigate external benchmarking of philanthropy program effectiveness • Develop method to assess impact of contributions • Continue leadership as top utility fundraiser for March of Dimes • Attract 1,200 jobs and $2.5 million in annual distribution revenue to communities in our service territory • Increase emphasis on workforce development by supporting communitybased job skills training programs • Increase spending with diverse suppliers by 12% • Launch new Nuclear Energy Technology program with Salem Community College and provide internships to students at Nuclear facilities. Customers • Initiated development of new customer information system • Supported expansion of Low Income Home Energy Assistance program • Improved service to builders and developers through new website which allows on-line application for new service • Rolled out first phase of an on-line outage information center • Launched Speakers Program for enhanced community outreach • Expanded Customer Service Center outreach efforts and partnerships with non-profits Customers • Rollout new customer information system to improve customer self-service • Refine on-line outage information to offer more localized information • Increase paperless billing to 2.5% of all customer bills • Increase web transactions to 3% of all inbound customer inquiry contacts Workforce • Assessed ethics, engagement and culture with annual employee survey and benchmarking • Expanded pipeline program for prospective employees to nuclear and green jobs in both college and high school environments • Conducted training in Standards of Integrity, compilance, diversity and sexual harassment; ran Supervisor and leadership Academies • Updated and re-published Human Resources policies, practices and procedures to ensure alignment with best in class companies • Created Employee Central, on-line repository for benefits, career development, work-life solutions and Human Resources information Workforce • Conduct corporate-wide training in ethics to raise score 11% over 2008 • Conduct diversity training for one-third of the workforce • Preserve jobs through cost containment • Achieve 92% development plan completion rate • Drive understanding of corporate vision and sustainability throughout organization • Develop knowledge transfer and retention mechanisms • Develop and implement on-line, comprehensive on-boarding process for new employees 82009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=11http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=11SAFE 2007-2008 Results • Occupational Safety and Health Agency Recordable Incident Rate • 2007 – 1.46 (top quartile performance) • 2008 – 1.42 (top quartile performance) • OSHA Lost Time Days Rate (Severity) • 2007 – 18.96 • 2008 – 8.00 (top quartile performance) • Establish integrated preparedness programs for influenza pandemic and data breach • 2008 NJ Governor’s Occupational Health and Safety Continued Excellence Award • PSEG Nuclear facilities successfully completed a Nuclear Regulatory Commission/Federal Emergency Management Agency graded emergency planning exercise • Expanded Environment, Health and Safety policy to cover contractor and nuclear safety 2009 Goals • Achieve top decile safety performance • Achieve OSHA Recordable Incident Rate target of 0.93 • Achieve OSHA Serenty target of 6.66 • Nuclear facilities complete hostile action-based emergency planning drill RELIABLE 2007-2008 Results • In three of the last four years, PSE&G was named the most reliable electric utility in the nation, and for seven consecutive years, the most reliable in the Mid-Atlantic region, by PA Consulting • Nuclear generating facilities achieved capacity factor of approximately 92% • Fossil generating units produced a record amount of electricity in 2007 • Hope Creek Nuclear Generating Station was the highest performing nuclear unit in the nation, with a capacity factor of 100%, and set a station record for consecutive days on-line 2009 Goals • Proceed with approvals and construction of 500,000-volt Susquehanna-Roseland transmission line • Present plan to invest $700 million in infrastructure projects, including street light upgrades and replacement of older equipment • Proceed with construction of additional New Haven Harbor generation capacity • File license renewals for Salem Generating Stations Units 1 and 2 and Hope Creek Nuclear Generating Station 92009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=12http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=12PSEGPublicServiceEnterpriseGroup NYSE: PEG RELIABLE (continued) 2007-2008 Results • Salem Nuclear Generating Station Unit 2 had the second fastest steamgenerator replacement in the history of electric industry • Received contract for 130 megawatts of new peaking capacity from our New Haven Harbor generating station • Nuclear facilities successfully transitioned to independent operations • Licenses at Peach Bottom Nuclear Generating Stations Units 2 and 3 were renewed through 2033 and 2034, respectively 2009 Goals • Pursue new nuclear from generating capacity by preparing an Early Site Permit application for new nuclear unit at our Salem-Hope Creek site • Manage geographic and single location generation risks by positioning company for opportunities to broaden type and location of generating facilities ECONOMIC 2007-2008 Results • Two for one stock split in 2008 • Reduced international risk and exposure by selling over $1.5 billion in international assets • Reduced debt by $1.3 billion • Have paid dividends for 102 consecutive years and increased dividends for six consecutive years • Operating earnings achieved within guidance range, $2.68 for 2007 and $3.03 for 2008 • Achieved payout ratios of 43% and 44%, respectively 2009 Goals • Improve performance of nuclear from second quartile to first quartile • Improve performance of fossil plants from third quartile to first quartile • Resolve outstanding IRS tax issue regarding lease investment portfolio • Manage capital spending • Work with stakeholders to establish a regulatory framework for utilities by eliminating lag in earnings returns and disincentives for utilities to encourage conservation • Achieve operating earnings guidance of $3.00-$3.25 • Achieve a payout ratio of 41% - 44% 102009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=13http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=13GREEN ENERGY 2007-2008 Results • Surpassed our voluntary 2000 Climate Leaders Program of an 18% reduction by reducing our 2000 greenhouse gas emission rate from fossil generation by 31% by 2008 • Named to the 2008 Carbon Disclosure Leadership Index • Named to the 2008 Dow Jones Sustainability Index – North America • Received regulatory approval of $46 million Carbon Abatement program for household energy audits and energy-saving steps for homes, businesses and hospitals • As a joint venture partner in Garden State Offshore Energy, received a $4 million grant to study off-shore wind, a first step in a proposal to develop a $350 million offshore wind farm • Entered into a joint venture to license and develop compressed air energy storage technology • Completed second phase of installing more than $1 billion in advanced emissions control equipment at coal units • Hope Creek Nuclear Generating Station completed a successful extended power uprate to generate an additional 150 MW of clean energy • Salem Nuclear Generating Station’s steam generator replacement project allows Unit 2 to generate an additional 23 MW of clean energy • Introduced environmental scorecard measures at the line-of-business levels 2009 Goals • Establish a new corporate carbon emissions goal • Implement $46 million Carbon Abatement program of household energy audits and energy-saving steps for homes, businesses and hospitals • Propose $190 million investment to improve customer access to conservation • Propose $773 million solar investment to mount solar panels on 200,000 utility poles, and on rooftops of schools, municipal buildings and other facilities, providing 120 MW of carbon-free electricity • Pursue wind farm and compressed air energy storage ventures • Develop business model to address climate change • Implement Fossil Environmental Information Management System • Complete final phase installing advanced emission controls at coal units • Achieve facilities energy conservation target of 15% by 2014 112009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=14http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=14PSEGPublicServiceEnterpriseGroup NYSE: PEG We are determined to be a leader in our industry through our commitment to operational excellence, financial strength and disciplined investment. Financial Highlights (unaudited) ($ millions) Operating Revenues Operating Earnings (non-GAAP) Net Income Per Share ($ Diluted) EPS from Operating Earnings (non GAAP) EPS as Reported Dividend Paid Per Share Book Value per share Shares Outstanding (millions) Basic Diluted Ratios (%) Debt to Capital Return on Equity* Return on Invested Capital* Payout Ratio Earnings Contribution (%) PSEG Power PSE&G PSEG Energy Holdings Stock Performance - Price High Low Year-End Operating Earnings PSEG Power PSE&G PSEG Energy Holdings Other Assets ($ millions) Capital Expenditures ($ millions) Number of Employees *Calculation based on Operating Earnings for 12-month period ended Year Ended December 31, 2008 $13,322 1,542 1,188 3.03 2.34 1.29 15.36 508 508 47.9 20.3 11.6 44% 71 24 7 52.30 22.09 29.17 1,050 360 101 $29,049 $1,771 9,849 2007 $12,677 1,363 1,335 2.68 2.62 1.17 14.35 508 509 49.9 19.9 10.8 43% 69 27 8 49.88 32.16 49.12 949 376 123 $28,299 $1,348 9,857 2006 $11,735 827 739 1.64 1.46 1.14 13.35 503 505 51.6 13.3 7.5 66% 59 30 18 36.31 29.50 33.19 515 262 155 $28,508 $1,015 9,677 122009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=15http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=15PSEG Consolidated Statements of Operations (unaudited) Consolidated Statements of Operations ($ millions, except for share data) Operating Revenues Operating Expenses Energy Costs Operation and Maintenance Depreciation and Amortization Taxes Other Than Income Taxes Total Operating Expenses Operating Income Income from Equity Method Investments Gain (Loss) on Sale of and (Impairment) on Equity Method Investments Other Income and Deductions Interest Expense Preferred Stock Dividends Income From Continuing Operations Before Income Taxes Income Tax Expense Income from Continuing Operations Income (loss) from Discontinued Operations, including Gain on Disposal, net of tax (expense) benefit of ($8), ($85), and $25 for the years ended 2008, 2007 and 2006, respectively Gain on Disposal of Discontinued Operations, net of tax (expense) benefit of ($163), ($72) and $2 for the years ended 2008, 2007 and 2006, respectively Net Income Weighted Average Common Shares Outstanding (thousands) Basic Diluted Earning Per Share Basic Income from continuing operations Net Income Diluted Income from continuing operations Net Income Dividends Paid Per Share of Common Stock 2008 $13,322 7,295 2,486 792 136 $10,709 2,613 37 (27) (116) (594) (4) 1,909 (926) $983 Year Ended December 31, 2007 $12,677 6,512 2,406 774 139 $9,831 2,846 115 137 22 (727) (4) 2,389 (1,064) $1,325 2006 $11,735 6,544 2,260 808 133 $9,745 1,990 115 (272) 89 (788) (4) 1,130 (457) $673 33 172 $1,188 507,693 508,427 (38) 48 $1,335 507,560 508,813 47 19 $739 503,356 504,628 1.94 2.34 1.93 2.34 $1.29 2.61 2.63 2.60 2.62 $1.17 1.34 1.47 1.33 1.46 $1.14 132009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=16http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=16PSEGPublicServiceEnterpriseGroup NYSE: PEG PSEG Consolidated Balance Sheets (unaudited) Assets ($ millions) Current Assets Cash and Cash Equivalents Accounts Receivable, net of allowances of $66, $46 and $47 in 2008, 2007 and 2006, respectively Unbilled Revenues Fuel Materials and Supplies Prepayments Restricted Funds Derivative Contracts Assets of Discontinued Operations Assets Held for Sale Other Total Current Assets Property, Plant and Equipment Less: Accumulated Depreciation and Amortization Net Property, Plant and Equipment Noncurrent Assets Regulatory Assets Long-Term Investments Nuclear Decommissioning Trust Funds Other Special Funds Goodwill and Other Intangibles Derivative Contracts Other Total Noncurrent Assets Total Assets 2008 $321 1,398 454 938 317 150 118 237 — — 66 $3,999 20,818 (6,385) $14,433 6,352 2,695 970 133 69 160 238 10,617 $29,049 Year Ended December 31, 2007 $380 1,537 353 791 293 88 114 65 1,323 — 30 $4,974 19,190 (5,994) $13,196 5,165 3,221 1,276 164 51 52 200 10,129 $28,299 2006 $101 1,223 328 846 272 68 79 95 1,767 40 45 $4,864 17,989 (5,646) $12,343 5,694 3,845 1,256 147 51 51 257 11,301 $28,508 PSEG Consolidated Balance Sheets (unaudited) Liabilities and Capitalization ($ millions) Current Liabilities Long-Term Debt Due Within One Year Commercial Paper and Loans Accounts Payable Derivative Contracts Accrued Interest 2008 $1,033 19 1,227 356 99 Year Ended December 31, 2007 $1,123 65 1,080 324 113 2006 $836 381 912 313 122 14 Continues to the next page at top ➥2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=17http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=17PSEG Consolidated Balance Sheets (unaudited) (continued) Liabilities and Capitalization ($ millions) Accrued Taxes Deferred Income Taxes Clean Energy Program Obligation to Return Cash Collateral Liabilities of Discontinued Operations Other Total Current Liabilities Noncurrent Liabilities Deferred Income Taxes and Investment Tax Credits Regulatory Liabilities Asset Retirement Obligations Other Postretirement Benefit Costs Accrued Pension Costs Clean Energy Program Environmental Costs Derivative Contracts Long-Term Accrued Taxes Other Total Noncurrent Liabilities Commitments and Contingent Liabilities Capitalization Long-Term Debt Long-Term Debt Securitization Debt Project Level, Non-Recourse Debt Debt Supporting Trust Preferred Securities Total Long-Term Debt Subsidiary’s Preferred Securities Preferred Stock Without Mandatory Redemption, $100 par value, 7,500,000 authorized; issued and outstanding, 2008, 2007 and 2006 – 795,234 shares Common Stockholders’ Equity Common Stock, no par, authorized 1,000,000,000 shares; issued, 2008 and 2007 - 533,556,660 shares, 2006 - 532,744,880 shares Treasury Stock, at cost, 2008 - 27,538,762 shares; 2007 - 25,033,656 shares 2006 - 27,454,064 shares Retained Earnings Accumulated Other Comprehensive Loss Total Common Stockholders’ Equity Total Capitalization Total Liabilities and Capitalization 2008 8 — 142 102 — 424 $3,410 3,865 355 576 975 1,196 532 743 164 1,241 136 $9,783 Year Ended December 31, 2007 204 106 135 79 596 450 $4,275 4,449 419 542 1,003 203 14 649 198 423 87 $7,987 2006 148 — 120 62 483 390 $3,767 4,438 646 509 1,091 321 133 421 164 — 94 $7,817 6,621 1,342 42 — $8,005 6,782 1,530 346 — $8,658 7,637 1,708 566 186 $10,097 80 80 80 4,756 (581) 3,773 (177) 7,771 15,856 $29,049 4,732 (478) 3,261 (216) 7,299 16,037 $28,299 4,661 (516) 2,710 (108) 6,747 16,924 $28,508 152009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=18http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=18PSEGPublicServiceEnterpriseGroup NYSE: PEG PSEG Consolidated Statements of Cash Flows (unaudited) Cash Flows from Operating Activities ($ millions) Net Income Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: Gain on Disposal of Discontinued Operations, net of tax Write-Down of Project Investments Depreciation and Amortization Amortization of Nuclear Fuel Provision for Deferred Income Taxes (Other than Leases) and ITC Non-Cash Employee Benefit Plan Costs Lease Transaction Charges, net of tax Leveraged Lease Income, Adjusted for Rents Received and Deferred Taxes (Gain) Loss on Sale of and Impairment on Equity Method Investments Gain on Sale of Investments Undistributed Earnings from Affiliates Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives Under Recovery of Electric Energy Costs (BGS and NTC) and Gas Costs Under Recovery of Societal Benefits Charge (SBC) Cost of Removal Net Realized (Gains) Losses and (Income) Expense from NDT Funds Net Change in Certain Current Assets and Liabilities Employee Benefit Plan Funding and Related Payments Other Net Cash Provided By Operating Activities Cash Flows from Investing Activities Additions to Property, Plant and Equipment Proceeds from Sale of Discontinued Operations Proceeds from Sale of Property, Plant and Equipment Proceeds from the Sale of Capital Leases and Investments Proceeds from NDT Funds Sales Investment in NDT Funds Restricted Funds NDT Funds Interest and Dividends Other Net Cash Provided By (Used In) Investing Activities 2008 $1,188 (335) — 793 101 71 167 490 51 27 (11) (40) (39) (43) (75) (44) 115 74 (139) (6) $2,345 (1,771) 925 9 77 3,060 (3,093) (11) 48 (19) $(775) Year Ended December 31, 2007 $1,335 (120) — 802 95 241 185 — 70 (137) (20) (10) 22 (71) (53) (37) (48) (198) (96) (39) $1,921 (1,348) 600 55 703 1,672 (1,703) (41) 48 23 $9 2006 $739 (17) 44 850 97 (255) 240 — 64 272 (11) (44) (30) 111 (175) (33) (64) 305 (148) (19) $1,926 (1,015) 494 6 251 1,405 (1,427) (6) 40 9 $(243) Continues to the next page at top ➥ 162009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=19http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=19PSEG Consolidated Statements of Cash Flows (unaudited) (continued) Cash Flows from Operating Activities ($ millions) Cash Flows from Financing Activities Net Change in Commercial Paper and Loans Issuance of Long-Term Debt Issuance of Non-Recourse Debt Issuance of Common Stock Purchase of Common Treasury Stock Redemptions of Long-Term Debt Repayment of Non-Recourse Debt Redemption of Securitization Debt Net Premium Paid on Early Extinguishment of Debt Cash Dividends Paid on Common Stock Redemption of Debt Underlying Trust Securities Other Net Cash Used In Financing Activities Effect of Exchange Rate Change Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period Supplemental Disclosure of Cash Flow Information: Income Taxes Paid Interest Paid, Net of Amounts Capitalized 2008 (46) 1,075 — — (92) (1,582) (56) (179) (79) (655) — (15) $(1,629) — (59) 380 $321 $952 $557 Year Ended December 31, 2007 (317) 434 163 83 — (551) (57) (170) — (594) (660) 19 $(1,650) — 280 100 $380 $678 $715 2006 281 250 — 83 — (1,431) (51) (163) — (574) (203) (27) $(1,835) (1) (153) 253 $100 $386 $773 PSEG Common Stock (unaudited) 5-Year Cumulative Total Comparative Returns – as of December 31, 2008 275 250 225 200 175 150 125 100 75 2003 2004 2005 2006 2007 2008  PSEG  S&P 500  DJ Utilities  S&P Electrics 172009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=20http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=20PSEGPublicServiceEnterpriseGroup NYSE: PEG Board of Directors Albert R. Gamper, Jr. Retired Chairman of the Board of CIT Group, Inc., Livingston, NJ, a commercial finance company. Ralph Izzo Chairman of the Board, President and Chief Executive Officer PSEG Shirley Ann Jackson President of Rensselaer Polytechnic Institute, Troy, NY Conrad K. Harper Counsel to the law firm of Simpson Thacher & Bartlett LLP, New York, NY Hak Cheol (H.C.) Shin Executive Vice President – Industrial and Transportation Business of 3M Company, St. Paul, MI, a diversified technology company. Thomas A. Renyl Retired Executive Chairman of the Bank of New York Mellon Corporation, New York, NY, a provider of banking and other financial services to corporations and individuals. David Lilley Retired Chairman of the Board, President and Chief Executive Officer of Cytec Industries Inc., West Paterson, NJ, which is a global specialty chemicals and materials company. William V. Hickey President and Chief Executive Officer of Sealed Air Corporation, Elmwood Park, NJ, which manufactures food and specialty protective packaging materials and systems. Richard J. Swift Retired Chairman of the Financial Accounting Standards Advisory Council and retired Chairman of the Board, President and Chief Executive Officer of Foster Wheeler Ltd., Clinton, NJ, which provides design, engineering, construction, manufacturing, management, plant operations and environmental services. 182009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=21http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=21Executive Officers Group Ralph Izzo Chairman of the Board, President and Chief Executive Officer PSEG Ralph A. LaRossa President and Chief Operating Officer PSE&G William Levis President and Chief Operating Officer PSEG Power Clarence Hopf Jr. President PSEG Energy Resources & Trade R. Edwin Selover Executive Vice President and General Counsel PSEG, PSEG Power, PSE&G, and PSEG Services Corporation Elbert C. Simpson President and Chief Operating Officer PSEG Services Corporation Thomas P. Joyce President and Chief Nuclear Officer PSEG Nuclear Margaret M. Pego Senior Vice President Human Resources and Chief Human Resources Officer PSEG Services Corporation Caroline Dorsa Executive Vice President and Chief Financial Officer PSEG, PSEG Power, PSE&G, and PSEG Services Corporation Randall E. Mehrberg Executive Vice President Planning and Strategy PSEG Services Corporation President – PSEG Energy Holdings Richard P. Lopriore President PSEG Fossil 192009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=22http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=22An energy provider meeting the needs of customers and shareholders2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=23http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=23PSEGPower NYSE: PEG Facts About PSEG Power Company Profile Committed to Operational Excellence: PSEG Power is committed to operational excellence and constantly strives to improve our performance. In fact, we achieved record operating results while maintaining a sharp eye on safety. PSEG Nuclear and PSEG Fossil both set all-time highs for power output in 2008. A major unregulated independent power producer in the U.S, PSEG Power operates one of the most balanced portfolios in the U.S., both in terms of fuel mix and market segment (base load, following, and peaking). That helps us generate the power you need, when you need it. • PSEG Fossil operates the company’s portfolio of natural gas, coal, and oil-fired electric generating units. • PSEG Nuclear operates the Salem and Hope Creek Nuclear Generating Stations in Lower Alloways Creek, NJ and is a part owner of the Peach Bottom Nuclear generation station in Delta, PA. • PSEG Energy Resources and Trade buys and sells electric and gas commodity, and trades in environmental. Power LLC2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=24http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=24PSEGPower NYSE: PEG Plant Locations, Fuel Diversity and Energy Produced PSEG Power is a major electric generation company with 13,576 MW of base-load, intermediate and load following capability operating in attractive markets in the Northeast with operating control of additional 2,000 MW of capacity in Texas. Power LLC PSEG Power’s assets are located in attractive markets with expansion capability. New Haven Fuel Diversity 2008 9% 27% 45% 18% 1% <1% Energy Produced 2008 23% 53% 23% <1% Total MW: 13,576 * *Figures do not include Texas. Total GWh: 55,300  Nuclear  Pumped Storage  Coal  Gas  Oil 222009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=25http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=25Generating Facilities Name Steam Hudson Mercer Sewaren Keystone (A) Conemaugh (A) Bridgeport Harbor New Haven Harbor Total Steam Nuclear Hope Creek Salem 1&2 Peach Bottom 2&3 (B) Total Nuclear Location NJ NJ NJ PA PA CT CT Total Capacity (MW) 923 636 453 1,712 1,711 514 448 6,397 1,211 2,345 2,224 5,780 1,225 1,230 747 3,202 617 504 446 553 336 115 105 21 21 38 15 2,771 400 18,550 % Owned 100% 100% 100% 23% 23% 100% 100% Owned Capacity (MW) 923 636 453 391 385 514 448 3,750 1,211 1,346 1,112 3,669 1,225 1,230 747 3,202 617 504 446 553 336 115 105 21 21 22 15 2,755 200 13,576 As of December 31, 2009 Principal Fuels Used Coal/Gas Coal Gas Coal Coal Coal/Oil Oil Mission Load Following Load Following Load Following Base Load Base Load Base Load/ Load Following Load Following NJ NJ PA 100% 57% 50% Nuclear Nuclear Nuclear Base Load Base Load Base Load Combined Cycle Bergen NJ Linden NJ Bethlehem NY Total Combined Cycle Combustion Turbine Essex NJ Edison NJ Kearny NJ Burlington NJ Linden NJ Mercer NJ Sewaren NJ Bergen NJ National Park NJ Salem NJ Bridgeport Harbor CT Total Combustion Turbine Pumped Storage Yards Creek (C) NJ 100% 100% 100% Gas Gas Gas Load Following Load Following Load Following 100% 100% 100% 100% 100% 100% 100% 100% 100% 57% 100% Gas Gas Gas Oil Gas Oil Oil Gas Oil Oil Oil Peaking Peaking Peaking Peaking Peaking Peaking Peaking Peaking Peaking Peaking Peaking 50% Peaking Total Operating Generation Plants (A) Operated by Reliant Energy, (B) Operated by Exelon Generation, (C) Operated by JCP&L 232009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=26http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=26PSEGPower NYSE: PEG PSEG Power Dispatch Curve Power’s assets along the dispatch curve position the company to serve full requirement load contracts. Dispatch Cost ($/MWh) National Park Sewaren 6 Mercer 3 Kearny 10-11 Burlington 8-9-11 Edison 1-2-3 Essex 10-11-12 New Linden 5-8 / Essex 9 Haven Burlington 12 / Kearny 12 Bergen 1 Sewaren 1-4 Linden 1-2 Yards Hudson 1 BEC Creek Peach Keystone Bridgeport Bergen 2 Hope Bottom Salem Creek Mercer 1-2 Conemaugh Hudson 2 Power LLC      Nuclear Coal Combined Cycle Steam GT Peaking Baseload units Energy Revenue Capacity Revenue Ancillary Revenue Duel Fuel X X — — Load Following units X X X X Peaking units X X X X Nuclear Fleet Hope Creek ■ ■ ■ Operated by PSEG Nuclear PSEG Ownership: 100% Technology: Boiling Water Reactor Total Capacity: ~ 1,211 MW Owned Capacity: ~ 1,211 MW License Expiration: 2026 ■ Salem Units 1 and 2 ■ ■ Operated by PSEG Nuclear PSEG Ownership: 57% Exelon 43% Technology: Pressurized Water Reactor Total Capacity: ~ 2,345 MW Owned Capacity: ~ 1,346 MW License Expiration: 2016 & 2020 ■ Peach Bottom Units 2 and 3 ■ ■ ■ ■ ■ ■ ■ Operated by Exelon PSEG Ownership: 50% Technology: Boiling Water Reactor Total Capacity: ~ 2.224 MW Owned Capacity: ~ 1,112 MW License Expiration: 2033 & 2034 ■ ■ ■ Filed for license extension August 2009 ■ ■ ■ Filed for license extension August 2009 242009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=27http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=27PSEG Power Generation Measures (unaudited) GWhr Breakdown Nuclear – NJ Nuclear – PA Total Nuclear Fossil Coal – NJ Fossil Coal – PA Fossil Coal – CT Total Coal Fossil Oil & Natural Gas – NJ Fossil Oil & Natural Gas – NY Fossil Oil & Natural Gas – CT Total Oil & Natural Gas Fossil – Pumped Storage Total Pumped Storage % Generation by Fuel Type Nuclear – NJ Nuclear – PA Total Nuclear Fossil Coal – NJ Fossil Coal – PA Fossil Coal – CT Total Coal Fossil Oil & Natural Gas – NJ Fossil Oil & Natural Gas – NY Fossil Oil & Natural Gas – CT Total Oil & Natural Gas Total 36% 17% 53% 8% 11% 5% 24% 18% 5% — 23% 100% 2008 20,016 9,268 29,284 4,364 5,811 2,881 13,056 10,138 2,834 118 13,090 (138) 55,292 Year Ended December 31, 2007 18,914 9,449 28,363 5,086 5,718 2,344 13,148 7,953 3,307 560 11,820 (134) 53,197 2006 19,642 9,466 29,108 6,041 6,122 2,827 14,990 6,418 2,329 443 9,190 (149) 53,139 35% 18% 53% 10% 11% 4% 25% 15% 6% 1% 22% 100% 37% 18% 55% 11% 12% 5% 28% 12% 4% 1% 17% 100% 252009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=28http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=28PSEGPower NYSE: PEG Capacity Factors (unaudited) Nuclear Capacity Factors % Hope Creek Peach Bottom 2 Peach Bottom 3 Salem 1 Salem 2 Total (PS Share) Coal Capacity Factors % NJ Coal Hudson Mercer Mercer Total Total NJ* PA Coal Keystone Keystone Conemaugh Conemaugh Total Total PA* CT Coal Bridgeport Total Total CT* Total* *Weighted Average Year Ended December 31, 2008 100.8 87.4 98.2 89.9 81.2 92.6 2007 85.4 99.4 90.7 89.0 97.1 91.4 2006 92.6 93.3 101.8 100.7 93.6 95.9 44.4 37.8 39.0 40.4 41.2 93.2 96.4 65.8 88.1 85.9 85.9 86.7 86.7 86.7 63.2 41.7 64.5 40.2 48.8 47.4 93.4 71.6 90.5 83.7 84.8 84.8 72.2 72.2 72.2 63.6 56.5 54.2 52.6 54.4 54.8 78.6 92.5 97.5 94.6 90.8 90.8 80.3 80.3 80.3 70.7 262009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=29http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=29BGS Information Power participates in New Jersey’s Basic Generation Service auction. The auction, which takes place on an annual basis in February, allows load serving entities to meet electric requirements for customers who do not purchase electric supply from third party suppliers. Each auction represents one-third of the state’s annual supply requirements for a three year period. 2003 2004 2005 2006 2007 2008 2009* The full contract price consists of the cost of energy priced at the PJM-West hub as well as the cost of other elements required to meet a full service contract, e.g. capacity, transmission, congestion, load shaping. The BGS process represents PSEG Power’s primary means of hedging its portfolio. 272009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=30http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=30PSEGPower NYSE: PEG PJM Capacity – Auction Pricing PJM’s Reliability Pricing Model (RPM) is based on making capacity commitments three years ahead in an effort to create long-term price signals to attract needed investments in reliability in the PJM region. PJM’s Reliability Pricing Model (RPM)  Eastern MAAC  MAAC  Rest of Pool  PSEG North Zone ■ PSEG Power's assets are in constrained zones, which cleared at higher prices. Power’s offer for 178 MW of new capacity was accepted by PJM. Auction results reflect impact of new transmission capability. ■ ■ PJM Zones ($) Eastern MAAC MAAC Rest of Pool PSEG North Zone 2007 / 2008 197.67 2008 / 2009 148.80 2009 / 2010 191.32 191.32 102.04 2010 / 2011 174.29 174.29 174.29 2011 / 2012 110.00 110.00 110.00 2012 / 2013 139.73 133.37 16.46 185.00 — 40.80 — 111.92 — — — — — With nearly 1/3 of its capacity in PS North and nearly 2/3 of its capacity in MAAC and EMAAC, Power’s assets in congested location received higher pricing in the 2012/2013 RPM Auction. 282009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=31http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=31Carbon – Impact on Power’s EBITDA Power’s fleet of generating assets positioned favorably for potential carbon legislation. CO2 $/Ton Impact on PJM Prices and Power’s EBITDA Impact on Power’s EBITDA ($M) $700 Illustration at $20 CO2: (2008 Data) 55 TWh x ~ $12 to $14/MWh ~ $660 – $770 M revenue 20M tons x $20/ton ~ $400 M expense $600 $500 $400 $300 $200 $100 $0 $0 $10 $20 CO2 Price ($/ton) The impact on electric prices moderates at higher CO2 prices as: the fleet dispatch changes, and the CO2 intensity of the grid declines. The diversity of the portfolio makes Power well positioned to capture value in a wide range of potential regulatory outcomes. $30 $40 292009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=32http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=32PSEGPower NYSE: PEG PSEG Power Consolidated Statements of Operations (unaudited) ($ millions) Operating Revenue Operating Expenses Energy Costs Operation and Maintenance Depreciation and Amortization Total Operating Expenses Operating Income Other Income Other Deductions Interest Expense Income from Continuing Operations Before Income Taxes Income Tax Expense Income from Continuing Operations Loss from Discontinued Operations, net of tax benefit of $5 and $22 for the years ended 2007 and 2006, respectively Loss on Disposal of Discontinued Operations, net of tax benefit of $144 for the year ended 2006 Earnings Available to Public Service Enterprise Group Incorporated 2008 $7,770 4,556 1,054 164 $5,774 1,996 414 (535) (164) 1,711 (661) 1,050 — — $1,050 Year Ended December 31, 2007 $6,796 3,975 1,001 140 $5,116 1,680 239 (170) (159) 1,590 (641) 949 (8) — $941 2006 $6,057 3,955 1,002 140 $5,097 960 157 (91) (148) 878 (363) 515 (31) (208) $276 PSEG Power Consolidated Balance Sheets (unaudited) Assets ($ millions) Current Assets Cash and Cash Equivalents Accounts Receivable Accounts Receivable - Affiliated Companies, net Fuel Materials and Supplies Derivative Contracts Assets of Discontinued Operations Assets Held for Sale Other Total Current Assets 2008 $20 472 732 938 233 225 — — 85 $2,705 Year Ended December 31, 2007 $11 533 441 791 220 46 — — 107 $2,149 2006 $13 405 495 846 202 79 325 40 27 $2,432 30 Continues to the next page at top ➥2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=33http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=33PSEG Power Consolidated Balance Sheets (unaudited) (continued) Assets ($ millions) Property, Plant and Equipment Less: Accumulated Depreciation and Amortization Net Property, Plant and Equipment Noncurrent Assets Nuclear Decommissioning Trust Funds Goodwill and Other Intangibles Other Special Funds Derivative Contracts Other Total Noncurrent Assets Total Assets Liabilities and Member’s Equity Current Liabilities Long-Term Debt Due Within One Year Accounts Payable Short-Term Loan from Affiliate Derivative Contracts Other Total Current Liabilities Noncurrent Liabilities Deferred Income Taxes and Investment Tax Credits Asset Retirement Obligations Other Postretirement Benefit Costs Derivative Contracts Accrued Pension Costs Environmental Costs Long-Term Accrued Taxes Other Total Noncurrent Liabilities Commitments and Contingent Liabilities Long-Term Debt Member’s Equity Contributed Capital Basis Adjustment Retained Earnings Accumulated Other Comprehensive Loss Total Member’s Equity Total Liabilities and Member’s Equity 2,653 2,000 (986) 2,988 (118) $3,884 $9,459 $250 752 3 338 190 $1,533 335 334 118 111 374 54 16 47 $1,389 2008 $7,441 (1,960) 5,481 970 59 27 143 74 $1,273 $9,459 Year Ended December 31, 2007 $6,565 (1,814) 4,751 1,276 51 45 7 57 $1,436 $8,336 2006 $5,868 (1,638) 4,230 1,256 51 42 24 49 $1,422 $8,084 $— 648 238 300 152 $1,338 176 309 129 158 70 55 26 12 $935 $— 589 54 291 129 $1,063 48 287 138 129 106 54 – 18 $780 2,902 2,000 (986) 2,438 (291) $3,161 $8,336 2,818 2,000 (986) 2,586 (177) $3,423 $8,084 312009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=34http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=34PSEGPower NYSE: PEG PSEG Power Consolidated Statements of Cash Flows (unaudited) ($ millions) 2008 Year Ended December 31, 2007 $941 — — 140 95 23 222 33 28 (48) (220) (15) 6 $1,205 (715) 325 40 1,672 48 (1,703) (50) (17) $(400) 84 (1,075) — 184 $(807) (2) 13 $11 $345 $169 2006 $276 352 44 157 97 33 (110) 5 46 (64) 323 (37) (79) $1,043 (418) — 1 1,405 40 (1,427) — 9 $(390) — — (500) (148) $(648) 5 8 $13 $251 $173 Cash Flows from Operating Activities Net Income $1,050 Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: Loss on Disposal of Discontinued operations, net of tax — Write-down of Property, Plant and Equipment — Depreciation and Amortization 164 Amortization of Nuclear Fuel 101 Interest Accretion on Asset Retirement Obligations 25 Provision for Deferred Income Taxes and ITC 46 Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives (36) Non-Cash Employee Benefit Plan Costs 23 Net Realized (Gains) Losses and (Income) Expense from NDT Funds 115 Net Change in Certain Current Assets and Liabilities 225 Employee Benefit Plan Funding and Related Payments (20) Other (7) Net Cash Provided By Operating Activities $1,686 Cash Flows from Investing Activities Additions to Property, Plant and Equipment Proceeds from Sale of Discontinued Operations Sales of Property, Plant and Equipment Proceeds from NDT Funds Sales NDT Funds Interest and Dividends Investment in NDT Funds Restricted Funds Other Net Cash Used In Investing Activities Cash Flows from Financing Activities Issuance of Long-Term Debt Cash Dividend Paid Redemption of Long-term Debt Short-Term Loan - Affiliated Company, net Net Cash Used In Financing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period Supplemental Disclosure of Cash Flow Information: Income Taxes Paid (Benefits Received) Interest Paid, Net of Amounts Capitalized (973) — 2 3,060 48 (3,093) 29 (15) $(942) — (500) — (235) $(735) 9 11 $20 $531 $160 322009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=35http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=35PSEG Power Executives William Levis President and Chief Operating Officer PSEG Power Thomas P. Joyce President and Chief Nuclear Officer PSEG Nuclear Clarence Hopf Jr. President PSEG Energy Resources & Trade Richard P. Lopriore President PSEG Fossil 332009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=36http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=36Prepared to meet New Jersey’s economic stimulus and energy goals.2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=37http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=37PSE&GPublicServiceElectric&Gas NYSE: PEG Facts About PSE&G Company Profile Public Service Electric and Gas Company (PSE&G), is one of the largest combined electric and gas companies in the United States and is also New Jersey’s oldest and largest publicly owned utility. The Public Service Corporation was formed in 1903 by amalgamating more than 400 gas, electric and transportation companies in New Jersey. It was renamed Public Service Electric and Gas Company in 1948. PSE&G currently serves nearly three quarters of New Jersey’s population in a service area consisting of a 2,600-square-mile diagonal corridor across the state from Bergen to Gloucester Counties. PSE&G is the largest provider of gas and electric service, servicing 1.7 million gas customers and 2.1 million electric customers in more than 300 urban, suburban and rural communities, including New Jersey’s six largest cities. While new business ventures will play a vital role in the long-term growth and strength of the company, PSE&G remains primarily a regulated gas and electric delivery company. PSE&G is a regulated public utility company engaged in the transmission and distribution of gas and electricity to nearly three quarters of New Jersey’s population. Power LLC2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=38http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=38PSE&GPublicServiceElectric&Gas NYSE: PEG Service Territory and Statistics PSE&G is a stable electric and gas distribution and transmission company rated top quartile for reliability in providing services in a mature service territory in New Jersey. Service Territory in New Jersey ■ 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. Hunterdon Warren Sussex Passaic Bergen Essex Hudson Union ■ ■ Morris Somerset Middlesex  Combined Electric & Gas Territory  Electric Territory  Gas Territory Mercer Monmouth Ocean Gloucester Salem Burlington Camden Cumberland Atlantic Cape May Transmission Statistics (as of December 31, 2008) Network Circuit Miles Transmission statistics 1,429 Billing Peak (MW) 10,654* Historical Annual Peak 2004-2008 1.6% Projected PJM Peak Load Growth 2009-2013 2.0% Electric and Gas Distribution Statistics (as of December 31, 2008) Customers Electric Gas 2.1 million 1.7 million Electric Sales & Gas Sold & Transported 43,720 GWh 3,441 M Therms Historical Annual Load Growth 2004-2008 0.8% (3.5%) Projected Annual Load Growth 2009-2013 0.6% 0.5% 362009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=39http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=39PSE&G Retail Sales and Revenues (unaudited) Electric Sales and Revenues Sales (millions kwh) Residential Commercial Industrial Street Lighting Interdepartmental Total Revenue ($ millions) Residential Commercial Industrial Street Lighting Other Operating Revenues Total 2008 13,618 24,589 5,140 373 14 43,734 2008 $2,175 2,776 345 77 426 $5,799 2007 13,958 24,745 5,623 369 14 44,709 2007 $1,998 2,583 355 73 359 $5,368 2006 13,393 24,011 5,891 369 14 43,678 2006 $1,713 2,276 317 68 311 $4,685 2005 14,039 24,155 6,282 362 15 44,853 2005 $1,644 2,055 332 62 374 $4,467 Year Ended December 31, 2004 13,117 23,330 6,520 364 31 43,362 2004 $1,491 1,892 359 60 293 $4,095 Rate of Growth 0.9% 1.3% -5.8% 0.6% n/a 0.2% Rate of Growth 9.9% 10.1% -1.0% 6.4% 9.8% 9.1% Electric Customers - Annual Average 2008 1,835,631 258,138 9,716 29,518 2,133,003 2007 1,827,293 256,199 9,875 29,926 2,123,293 2006 1,813,896 252,993 10,111 30,140 2,107,140 2005 1,804,382 250,691 9,753 30,223 2,095,049 2004 1,794,975 248,363 8,256 30,831 2,082,425 Rate of Growth 0.6% 1.0% 4.2% -1.1% 0.6% Residential Commercial Industrial Street Lighting Total 372009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=40http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=40PSE&GPublicServiceElectric&Gas NYSE: PEG PSE&G Retail Sales and Revenues (unaudited) Gas Sold and Transported Revenue ($ millions) Residential Commercial-Firm Sales Commercial-Interr. & Cogen Industrial-Firm Sales Industrial-Interr. & Cogen Other Operating Revenues Total Gas Transported Sales (millions therms) Residential Commercial-Firm Sales Commercial-Interr. & Cogen Industrial-Firm Sales Industrial-Interr. & Cogen Interdepartmental Total Gas TransportedFirm Sales Gas TransportedNon-Firm 2008 $1,354 509 56 40 180 135 $2,274 965 2008 1,382 495 54 39 168 1 2,139 445 857 2007 $1,312 478 36 37 129 139 $2,131 994 2007 1,431 530 41 42 156 1 2,201 436 866 2006 $1,231 491 50 37 103 133 $2,045 839 2006 1,253 501 55 38 127 1 1,975 399 795 2005 $1,168 593 66 49 412 132 $2,420 835 2005 1,453 561 138 47 416 1 2,616 576 454 Year Ended December 31, 2004 $1,077 491 34 43 277 118 $2,040 837 2004 1,473 591 48 52 377 2 2,543 586 449 Rate of Growth 5.9% 0.9% 13.3% -1.8% -10.2% 3.4% 2.8% 3.6% Rate of Growth -5.6% -4.3% 3.0% -6.9% -18.3% n/a -4.2% -6.7% 17.5% Gas Customers - Annual Average 2008 1,584,512 150,266 7,246 15 1,742,039 2007 1,575,196 149,624 7,401 15 1,732,236 2006 1,563,260 149,120 7,601 15 1,719,996 2005 1,550,368 149,336 7,884 15 1,707,603 2004 1,536,216 148,481 8,330 15 1,693,042 Rate of Growth 0.80% 0.30% -3.40% n/a 0.70% Residential Commercial Industrial Street Lighting Total 382009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=41http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=41PSE&G New Jersey Energy Master Plan (EMP)/Regulation New Jersey law requires that an EMP be developed every three years, the purpose of which is to ensure safe, secure and reasonably-priced energy supply, foster economic growth and development and protect the environment. The most recent EMP was finalized in October 2008. The plan identifies a number of the actions to improve energy efficiency, increase the use of renewable resources, ensure a reliable supply of energy and stimulate investment in clean energy technologies, including: • maximize energy conservation and energy efficiency to reduce New Jersey’s projected energy use 20% by the year 2020 • reduce prices by decreasing peak demand 5,700 MW by 2020 • strive to achieve 30% of the state’s electricity needs from renewable sources by 2020 • develop at least 3,000 MW of off-shore wind generation by 2020 • develop new low carbon-emitting, efficient power plants to help close the gap between the supply and demand of electricity • invest in innovative clean energy technologies and businesses to stimulate the industry’s growth and green job development in New Jersey • work with electric and gas utilities to develop individual utility master plans through 2020 to evaluate options to modernize the electrical grid • establish a state energy council • conduct a complete review of the BGS auction process. Consistent with the EMP, the BPU is addressing a number of strategies designed to improve efficiencies in customer use and increase the level of renewable generation in the State. • Carbon Abatement Program — In January 2009, the BPU approved a small scale carbon abatement program, under which we will invest up to $46 million over four years in programs across specific customer segments. The BPU approved a settlement with new rates going into effect on January 1, 2009. • Demand Response (DR) — In its order, the BPU established target goals to increase DR by 300 MW for the first year of the program and a total increase of 600 MW by the end of the third year and stated that 55% of the target would be our responsibility. In response, we filed our program proposal and identified $93.4 million of demand response investment over a period of four years, seeking full recovery of the program costs, including a return on our investment, through rates. Each of the State’s electric utilities is required to implement a one-year demand response program in their respective service territories beginning in June 2009. The targeted amount of demand response for this program is 600 MW statewide, with a budget of $4.9 million, which represents an incentive in addition to PJM’s existing DR service programs. • Solar Initiative — We are investing approximately $105 million over two years in a pilot program to help finance the installation of 30 MW of solar systems, consisting of: • Neighborhood Solar (40 megawatts) – $264M investment • Local Government Solar (43 megawatts) – $273M investment • Centralized Solar (35 megawatts) – $221M investment • HMFA/Affordable Housing Solar (2 megawatts) – $15M investment 392009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=42http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=42PSE&GPublicServiceElectric&Gas NYSE: PEG New Jersey Electric & Gas Rate Case* Filed May 29, 2009 Request Increase (million) Rate Base (billion) Return on Equity Equity Ratio 11.5% 51.2% Test Year: 2009** Electric $133.7 3.8 Gas $96.9 2.4 *New Jersey BPU decision anticipated within 9-12 months. **Test year can be updated for known changes. PSE&G Rate Base PSE&G’s capital program oriented toward meeting reliability requirements through expansion of the transmission grid, maintaining distribution and advancing the state’s Energy Master Plan.  Gas Distribution  Electric Distribution  Electric Transmission  Energy Master Plan 2008 Rate Base = $6.9B Equity Ratio ~ 50% 2009 Rate Base = $7.5B Equity Ratio ~ 51%* 1% 2010 Rate Base = $8.8B Equity Ratio ~51%* 4% 19% 32% 47% 30% 23% 2011 Rate Base = $9.9B Equity Ratio ~ 51%* 6% 27% 15% 52% 17% 33% 50% 44% *Pending regulatory approval. 402009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=43http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=43Transmission Growth Transmission investments are under the jurisdiction of the Federal Energy Regulatory Commission (FERC), and receive fully-forecasted formula rates with an 11.68% base ROE. ■ PJM approved the $750M Susquehanna to Roseland line in October 2007 ■ ■ ■ Siting and permitting process underway Incentives approved by FERC: ■ ■ Sussex Jefferson Warren Passaic Bergen Essex ROE: 12.93% (125 basis point adder) 100% CWIP in Rate Base Morris Roseland FERC approval of Sub-Transmission to Transmission system reliability investments represents about $340M through 2011, post-2011 ~$60M per year Total investments in PMJ approved projects, including Susquehanna to Roseland of $1.4B over 2009-2011 PJM approved the Branchburg-RoselandHudson line in November 2008. Additional 500 kV investments could further increase transmission investment by approximately $1.0 -1.5B Branchburg Hunterdon Somerset Hudson Union ■ ■ I-765 Interstate Project Middlesex Deans Mercer Monmouth Smithburg New Freedom Burlington Gloucester Camden Salem Ocean Hope Creek Salem MAPP Project Cumberland Cape May Atlantic 412009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=44http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=44PSE&GPublicServiceElectric&Gas NYSE: PEG PSE&G Consolidated Statements of Operations (unaudited) ($ millions) Operating Revenues Operating Expenses Energy Costs Operation and Maintenance Depreciation and Amortization Taxes Other Than Income Taxes Total Operating Expenses Operating Income Other Income Other Deductions Interest Expense Income Before Income Taxes Income Tax Expense Net Income Preferred Stock Dividends Earnings Available to PSEG 2008 $9,038 6,072 1,338 583 136 $8,129 909 12 (4) (325) 592 (228) 364 (4) $360 Year Ended December 31, 2007 $8,493 5,498 1,308 591 139 $7,536 957 16 (4) (332) 637 (257) 380 (4) $376 2006 $7,569 4,884 1,160 620 133 $6,797 772 25 (3) (346) 448 (183) 265 (4) $261 422009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=45http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=45PSE&G Consolidated Balance Sheets (unaudited) Assets ($ millions) Current Assets Cash and Cash Equivalents Accounts Receivable, net of allowances of $65, $45 and $46 in 2008, 2007 and 2006, respectively Unbilled Revenues Materials and Supplies Prepayments Other Total Current Assets Property, Plant and Equipment Less: Accumulated Depreciation and Amortization Net Property, Plant and Equipment Noncurrent Assets Regulatory Assets Long-Term Investments Other Special Funds Other Total Noncurrent Assets Total Assets 2008 $91 909 454 61 45 53 $1,613 12,258 (4,122) $8,136 6,352 158 46 101 $6,657 $16,406 Year Ended December 31, 2007 $32 995 353 53 57 52 $1,542 11,531 (3,920) $7,611 5,165 153 57 109 $5,484 $14,637 2006 $28 805 328 50 14 50 $1,275 11,061 (3,794) $7,267 5,694 149 53 115 $6,011 $14,553 432009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=46http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=46PSE&GPublicServiceElectric&Gas NYSE: PEG PSE&G Consolidated Balance Sheets (unaudited) Liabilities and Capitalization ($ millions) Current Liabilities Long-Term Debt Due Within One Year Commercial Paper and Loans Accounts Payable Accounts Payable - Affiliated Companies, net Clean Energy Program Obligation to Return Cash Collateral Other Total Current Liabilities Noncurrent Liabilities Deferred Income Taxes and ITC Other Postretirement Benefit (OPEB) Costs Accrued Pension Costs Regulatory Liabilities Clean Energy Program Environmental Costs Asset Retirement Obligations Long-Term Accrued Taxes Other Total Noncurrent Liabilities Commitments and Contingent Liabilities Capitalization (Long-Term Debt) Long-Term Debt Securitization Debt Total Long-Term Debt Preferred Securities Preferred Stock Without Mandatory Redemption, $100 par value, 7,500,000 authorized; issued and outstanding, 2008, 2007 and 2006 - 795,234 shares Common Stockholder’s Equity Common Stock; 150,000,000 shares authorized; issued and outstanding, 2008, 2007 and 2006 - 132,450,344 shares Contributed Capital Basis Adjustment Retained Earnings Accumulated Other Comprehensive Income Total Common Stockholder’s Equity Total Capitalization Total Liabilities and Capitalization 80 892 170 986 1,597 2 $3,647 $8,532 $16,406 80 892 170 986 1,237 2 $3,287 $7,999 $14,637 80 892 170 986 1,061 1 $3,110 $7,901 $14,553 3,463 1,342 $4,805 3,102 1,530 $4,632 3,003 1,708 $4,711 2008 $248 19 336 763 142 102 302 $1,912 2,533 813 634 355 532 689 240 82 84 $5,962 Year Ended December 31, 2007 $429 65 325 559 135 79 344 $1,936 2,440 821 63 419 14 594 231 75 45 $4,702 2006 $284 31 254 645 120 62 317 $1,713 2,517 898 133 646 133 367 221 — 24 $4,939 442009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=47http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=47PSE&G Consolidated Statements of Cash Flows (unaudited) ($ millions) 2008 Year Ended December 31, 2007 $380 591 (78) 140 (3) 12 (37) (69) (28) (43) (53) (4) (140) 10 $678 (570) 2 $(568) 34 350 (113) (170) (3) — (200) (4) $(106) 4 28 $32 $336 $314 2006 $265 620 (112) 170 (4) 18 (33) (97) 24 87 (175) (5) 60 (12) $806 (528) 1 4(527) 31 250 (322) (163) (2) — (200) (4) 4(410) (131) 159 $28 $237 $312 Cash Flows from Operating Activities Net Income $364 Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: Depreciation and Amortization 583 Provision for Deferred Income Taxes and ITC 86 Non-Cash Employee Benefit Plan Costs 129 Gain on Sale of Property, Plant and Equipment (1) Non-Cash Interest Expense 15 Cost of Removal (44) Employee Benefit Plan Funding and Related Payments (108) Over Recovery of Electric Energy Costs (BGS and NTC) 4 Under Recovery of Gas Costs (47) Under Recovery of SBC (75) Other Non-Cash Charges (5) Net Changes in Certain Current Assets and Liabilities (4) Other 16 Net Cash Provided By Operating Activities $913 Cash Flows from Investing Activities Additions to Property, Plant and Equipment Other Net Cash Used In Investing Activities Cash Flows from Financing Activities Net Change in Short-Term Debt Issuance of Long-Term Debt Redemption of Long-Term Debt Redemption of Securitization Debt Deferred Issuance Costs Premium Paid on Early Retirement of Debt Cash Dividends Paid on Common Stock Preferred Stock Dividends Net Cash Used In Financing Activities Net Increase (Decrease) In Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period Supplemental Disclosure of Cash Flow Information: Income Taxes Paid Interest Paid, Net of Amounts Capitalized (761) — $(761) (46) 1,075 (901) (179) (6) (32) — (4) $(93) 59 32 $91 $125 $317 452009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=48http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=48PSE&GPublicServiceElectric&Gas NYSE: PEG New Jersey Board of Public Utilities The Board of Public Utilities is a regulatory authority with a statutory mandate to ensure safe, adequate, and proper utility services at reasonable rates for customers in New Jersey. Jeanne M. Fox President Term Expires: March 2014 Democrat Joseph L. Fiordaliso Commissioner Term Expires: March 2010 Democrat Frederick F. Butler Commissioner Term Expires: March 2009* Democrat *waiting for Governor’s approval for term extension Elizabeth Randall Commissioner Term Expires: June 2013 Republican Nicholas Asselta Commissioner Term Expires: March 2014 Republican 462009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=49http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=49Federal Energy Regulatory Commission The Federal Energy Regulatory Commission, or FERC, is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil. FERC also reviews proposals to build liquefied natural gas (LNG) terminals and interstate natural gas pipelines as well as licensing hydropower projects. PSE&G Executive Ralph A. LaRossa President and Chief Operating Officer PSE&G Jon Wellinghoff Chairman Term Expires: June 2013 Democrat Suedeen G. Kelly Commissioner Term Expires: June 2014 Democrat Philip D. Moeller Commissioner Term Expires: June 2010 Republican Marc Spitzer Commissioner Term Expires: June 2011 Republican 472009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=50http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=50Pursuing attractive renewable generation opportunities.2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=51http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=51PSEGEnergyHoldings NYSE: PEG Facts About PSEG Energy Holdings Company Profile PSEG Energy Holdings owns and operates projects engaged in the generation of energy and has invested in energy-related leveraged leases through its direct wholly owned subsidiaries. The subsidiaries’ operating focus has shifted with the sale of $1.8 billion of international assets. Existing investments are operated through two primary subsidiaries: Power LLC PSEG Global • Owns approximately 2,400 MW of domestic generation capacity (as of 12/31/2008) • Pursues unregulated renewables opportunities: CAES, solar and offshore wind PSEG Resources • Generates earnings and cash from lease investments (primarily in energy-related assets)2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=52http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=52PSEGEnergyHoldings NYSE: PEG Generating Facilities Location Name United States PSEG Texas Guadalupe Odessa Total PSEG Texas Kalaeloa GWF Hanford L.P. (Hanford) GWF Energy Hanford-Peaker Plant Henrietta-Peaker Plant Tracy-Peaker Plant Total GWF Energy Bridgewater Conemaugh Total United States International PPN Power Generating Company Limited (PPN) Turboven Turbogeneradores de Maracay (TGM) Total International Total Operating Power Plants Total Capacity (MW) % Owned As of December 31, 2008 Owned Capacity Principal (MW) Fuels Used TX TX HI CA CA CA CA CA NH PA 1,000 1,000 2,000 208 105 27 95 97 171 363 16 15 2,734 100% 100% 50% 50% 50% 60% 60% 60% 40% 4% 1,000 1,000 2,000 104 53 13 57 58 103 218 6 1 2,395 Natural Gas Natural Gas Oil Petroleum coke Petroleum coke Natural Gas Natural Gas Natural Gas Biomass Hydro India Venezuela Venezuela 330 120 40 490 3,224 20% 50% 9% 66 60 4 130 2,525 Naphtha/ Natural Gas Natural Gas Natural Gas 502009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=53http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=53PSEG Energy Holdings Consolidated Statements of Operations (unaudited) ($ millions) Operating Revenues Electric Generation and Distribution Revenues Income from Leveraged and Operating Leases Other Total Operating Revenues Operating Expenses Energy Costs Operation and Maintenance Depreciation and Amortization Total Operating Expenses Operating Income (Loss) Income from Equity Method Investments Gain (Loss) on Sale of and (Impairment) on Equity Method Investments Other Income Other Deductions Interest Expense Income (Loss) from Continuing Operations Before Income Taxes and Minority Interest Income Tax (Expense) Benefit Income (Loss) from Continuing Operations Income (Loss) from Discontinued Operations, net of tax (expense) benefit of ($8), ($91), and $3 for the years ended 2008, 2007 and 2006, respectively Gain on Disposal of Discontinued Operations, net of tax expense of $163, $72 and $142 for the years ended 2008, 2007 and 2006, respectively Net Income 2008 $720 (391) 22 $351 496 128 29 $653 (302) 37 (27) 27 (2) (83) (350) (55) (405) 33 172 $(200) Year Ended December 31, 2007 $621 132 34 $787 439 126 30 $595 192 115 137 36 (61) (151) 268 (203) 65 (31) 48 $82 2006 $745 151 33 $929 515 127 28 $670 259 115 (272) 31 (16) (183) (66) 36 (30) 78 227 $275 512009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=54http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=54PSEGEnergyHoldings NYSE: PEG PSEG Energy Holdings Consolidated Balance Sheets (unaudited) Assets ($ millions) Current Assets Cash and Cash Equivalents Accounts Receivable: Trade - net of allowances Affiliated Companies Short-Term Loan from Affiliate Inventory Restricted Funds Assets of Discontinued Operations Derivative Contracts Other Total Current Assets Property, Plant and Equipment Less: Accumulated Depreciation and Amortization Net Property, Plant and Equipment Noncurrent Assets Leveraged Leases, net Corporate Joint Ventures and Partnership Interests Goodwill and Other Intangibles Derivative Contracts Other Total Noncurrent Assets Total Assets 2008 $51 16 48 733 21 96 — 23 8 $996 849 (157) $692 2,279 202 9 17 61 $2,568 $4,256 Year Ended December 31, 2007 $31 5 1 841 19 57 1,323 17 5 $2,299 851 (133) $718 2,826 223 — 43 54 $3,146 $6,163 2006 $58 12 1 28 20 67 1,442 14 4 $1,646 844 (103) $741 2,810 846 — 26 95 $3,777 $6,164 Continues to the next page at top ➥ 522009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=55http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=55PSEG Energy Holdings Consolidated Balance Sheets (unaudited) (continued) Liabilities and Member’s Equity ($ millions) Current Liabilities Long-Term Debt Due Within One Year Accounts Payable: Trade Affiliated Companies Derivative Contracts Deferred Income Taxes Liabilities of Discontinued Operations Other Total Current Liabilities Noncurrent Liabilities Deferred Income Taxes and Investment and Energy Tax Credits Derivative Contracts Long-Term Accrued Taxes Other Total Noncurrent Liabilities Commitments and Contingent Liabilities Minority Interest Long-Term Debt Project Level, Non-Recourse Debt Senior Notes Total Long-Term Debt Member’s Equity Ordinary Unit Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Member’s Equity Total Liabilities and Member’s Equity 11 42 505 $547 838 276 (5) $1,109 $4,256 2008 $286 7 23 14 — — 43 $373 1,046 — 1,139 31 $2,216 Year Ended December 31, 2007 $644 4 138 3 150 596 100 $1,635 1,856 4 316 33 $2,209 2006 $29 4 12 16 — 484 61 $606 1,901 11 — 36 $1,948 6 346 530 $876 838 498 101 $1,437 $6,163 6 566 1,150 $1,716 1,193 592 103 $1,888 $6,164 532009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=56http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=56PSEGEnergyHoldings NYSE: PEG PSEG Energy Holdings Consolidated Statements of Cash Flows (unaudited) ($ millions) Cash Flows from Operating Activities Net (Loss) Income Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: Gain on Sale of Discontinued Operations Impairment and Gain (Loss) on Sale of Equity Method Investments Depreciation and Amortization Deferred Income Taxes (Other than Leases) Non-Cash Employee Benefit Plan Costs Lease Transaction Charges, Net of Taxes Leveraged Lease Income, Adjusted for Rents Received and Deferred Taxes Gain on Sale of Investments Undistributed Earnings from Affiliates Change in Fair Value of Derivative Financial Instruments Net Changes in Certain Current Assets and Liabilities Other Net Cash (Used In) Provided By Operating Activities Cash Flows from Investing Activities Additions to Property, Plant and Equipment Proceeds from Sale of Discontinued Operations Proceeds from Sale of Property, Plant and Equipment Proceeds from the Sale of Investments and Capital Leases Short-Term Loan Receivable - Affiliated Company, net Restricted Funds Other Net Cash Provided By (Used By) Investing Activities 2008 $(200) Year Ended December 31, 2007 $82 2006 $275 (335) 27 30 (77) 2 490 51 (8) (40) (3) (174) (73) $(310) (8) 925 6 77 108 (39) (4) $1,065 (120) (137) 57 84 2 — 70 (19) (10) (11) 158 (83) $71 (38) 275 12 703 (813) 10 20 $169 (369) 272 54 4 2 — 64 (11) (44) (35) (76) 18 $154 (64) 494 1 246 381 (5) — $1,053 Continues to the next page at top ➥ 542009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=57http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=57PSEG Energy Holdings Consolidated Statements of Cash Flows (continued) ($ millions) Cash Flows from Financing Activities Repayment of Non-Recourse Long-Term Debt Issuance of Non-Recourse Long-Term Debt Premium Paid on Early Extinguishment of Debt Repayment of Senior Notes Return of Contributed Capital Other Net Cash Used In Financing Activities Effect of Exchange Rate Change Net Increase (Decrease) In Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period Supplemental Disclosure of Cash Flow Information: Income Taxes Paid (Received) Interest Paid, Net of Amounts Capitalized 2008 (56) — (47) (632) — — $(735) — 20 31 $51 $330 $59 Year Ended December 31, 2007 (57) 163 — (14) (355) (4) $(267) — (27) 58 $31 $21 $159 2006 (51) — — (609) (520) (2) $(1,182) (1) 24 34 $58 $(97) $187 552009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=58http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=58PSEGEnergyHoldings NYSE: PEG PSEG Resources Portfolio - Top Ten Leases (unaudited) Lessee REMA (Reliant) Equipment Keystone, Conemaugh & Shawville (PA) 3 coal-fired plants (1,162 equity MW) Danskammer & Roseton Generating Station (NY) 370 MW coal-fired and 1,200 MW oil/gas fired Powerton & Joliet Generating Stations (IL) 2 coal-fired generating facilities (1,640 equity MW) Reservoir (NJ) Dollars Invested ($ million) $312 As of June 30, 2009 % of Portfolio 15% Credit Rating* B+/Ba3 Dynegy Holdings 273 13% B/Caa1 Edison Mission Energy (EME) Merrill Creek - (PECO, MetED, Delmarva Power & Light) ENECO ESG Grand Gulf US West/Qwest EZH Nuon Total Top Ten Total Leases 218 11% BB-/B1 120 116 109 94 92 70 69 $1,473 $1,948 6% 6% 5% 5% 4% 3% 3% 71% 95% BBB/A3 AA+/Aa1 AA+/Aa1 A+/Aa3 BBB/Ba1 AA+/Aa1 AAA/Aaa BBB-/Baa2 A-/A3 Gas distribution network (Netherlands) Gas distribution system (Austria) 1,100 MW nuclear station (MS) Qwest headquarters, Denver (CO) 540 MW coal-fired generation facility (Netherlands) Gas distribution assets (Netherlands) *Reflects lessee or additional equity collateral support. 562009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=59http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=59PSEG Resources - Non LILO/SILO Lease Investments (unaudited) 2009-2035 Pre-tax Cash Flow* ($ million) $422 359 333 321 123 204 49 62 54 15 15 15 $1,972 53% Book Investment as of 12/31/08 ($ million) $307 267 217 124 104 88 49 38 36 15 11 11 $1,267 56% Agreement Reliant Dynegy EME 2 Merrill Creek Grand Gulf Qwest Dutch Rail Renaissance Ctr. Wal-Mart E-D Centers Whitehorn Wal-Path Property Type Power Plant Power Plant Power Plant Reservoir Nuclear Plant Real Estate Rail Cars Real Estate Real Estate Real Estate Power Plant Real Estate Start August-00 May-01 August-00 June-88 December-88 December-91 October-92 April-88 September-91 June-90 February-00 April-91 Lease Termination 2026 & 2034 2031 & 2035 2030 & 2034 2032 2015 2012 2010 2021 2011 & 2025 2020 & 2021 2009 2021 Residual Y Y Y N N Y N Y Y Y Y Y Total Average Life: 18.5 Years *includes booked residual Total Lease Portfolio 572009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=60http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=60PSEGEnergyHoldings NYSE: PEG PSEG Resources In the second quarter of 2008, PSEG recalculated its lease transactions, incorporating potential cash payments consistent with the FIN 48 reserve position, and recorded an after-tax charge of $355 million. This charge was reflected as a reduction in Operating Revenues of $485 million with a partially offsetting reduction in Income Tax Expense of $130 million in PSEG’s Condensed Consolidated Statement of Operations. As of June 30, 2009, an aggregate $950 million (excluding penalties of $150 million) would become currently payable if PSEG conceded 100% of deductions taken through that date. PSEG has deposited $320 million with the IRS to defray potential interest costs associated with this disputed tax liability. In the event PSEG is successful in defense of its position, the deposit is fully refundable with interest. 582009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=61http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=61PSEG Energy Holdings Executives Randall E. Mehrberg President PSEG Energy Holdings Scott Jennings President PSEG Global Eileen A. Moran President PSEG Resources 592009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=62http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=62Strong financial position and cash flow provide flexibility in volatile markets.2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=63http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=63PSEGPublicServiceEnterpriseGroup NYSE: PEG Additional Financial Information Balance Sheet Metrics Capital Requirements Long-Term Debt Short-Term Liquidity Credit Ratings Power LLC2009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=64http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=64PSEGAdditionalFinancialInformation NYSE: PEG 2008 Year-End Capital Structure* (unaudited) ($ billions) Net Short-Term Debt/(Investments) Total Long-Term Debt Preferred Stock Common Equity Total Capitalization *excludes securitization and non-recourse debt. Consolidated (0.02) 7.2 0.1 7.8 14.9 PSE&G (0.0) 3.5 0.1 3.6 7.2 Power — 2.9 — 3.9 6.8 Holdings — 0.5 — 1.1 1.6 PSEG Consolidated Total Debt to Total Capitalization 55% ~$525M reduction in Net Debt excluding PSE&G PSE&G Regulatory Equity Ratio 53% 50% Improved 50% Improved ~50% ~48% 45% 2007 2008 47% 2007 2008 622009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=65http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=65PSEG Capital Requirements ($ millions) Power Hudson Environmental Mercer Environmental Other Environmental Exploration of New Nuclear Plant Other, including Growth Opportunities Total Power PSE&G Transmission Reliability Enhancements Facility Replacement Environmental/Regulatory Support Distribution Support Facilities New Business Reliability Enhancements Facility Replacement Environmental/Regulatory Total PSE&G NJ Stimulus Energy Efficiency Solar 4 All Other Total PSEG 2009 $305 101 67 11 209 $693 As of June 30, 2009 2010 $214 11 32 14 334 $605 2011 $5 1 13 9 341 $369 $211 81 4 1 39 159 78 155 114 $842 $186 $8 $7 $72 $1,808 $391 95 5 1 59 147 153 152 108 $1,111 $447 $106 $228 $128 $2,625 $587 117 1 1 56 154 109 155 57 $1.237 $46 $52 $183 $158 $2,045 632009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=66http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=66PSEGAdditionalFinancialInformation NYSE: PEG PSEG Long-Term Debt (unaudited) Maturity PSEG (Parent) Senior Note – 6.89% Senior Note – 4.66% Principal Amount Outstanding Amount Due Within One Year Total Long-Term Debt of PSEG (Parent) Power Senior Notes: 3.75% 7.75% 6.95% 5.00% 5.50% 8.63% Total Senior Notes Pollution Control Notes: 5.00% 5.50% 5.85% 5.75% 5.75% 4.00% Total Pollution Control Notes Amounts Due Within One Year Net Unamortized Discount Total Long-Term Debt of Power 2008-2009 2009 Year Ended December 31, 2008 ($ millions) 2007 $98 200 298 (49) $249 $49 200 249 (249) $— 2009 2011 2012 2014 2015 2031 $250 800 600 250 300 500 $2,700 $66 14 19 25 40 44 $208 (250) (5) $2,653 $250 800 600 250 300 500 $2,700 $66 14 19 25 40 44 $208 — (6) $2,902 2012 2020 2027 2031 2037 2042 642009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=67http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=67PSEG Long-Term Debt (unaudited) Maturity PSE&G First and Refunding Mortgage Bonds: Libor + .875% 6.75% 6.45% 9.25% 6.38% 5.20% Floating Rate 5.45% 6.40% 8.00% 5.00% Medium-Term Notes 4.00% 8.16% 8.10% 5.13% 5.00% 5.38% 6.33% 5.00% 5.30% 7.04% 7.18% 7.15% 5.25% 5.70% 5.80% Principal Amount Outstanding Amounts Due Within One Year Net Unamortized Discount Total Long-Term Debt of PSE&G (excluding Transition Funding and Transition Funding II) Year Ended December 31, 2008 ($ millions) 2007 2010 2016 2019 2021 2023 2025 2028 – 2033 2032 2032 2037 2037 2008 2009 2009 2012 2013 2013 2013 2014 2018 2020 2023 2023 2035 2036 2037 $300 171 5 134 – 23 100 50 100 7 8 — 16 44 300 150 300 275 250 400 9 5 34 250 250 350 3,531 (60) (8) $3,463 $— 171 5 134 157 23 494 50 100 7 8 250 16 44 300 150 300 — 250 — 9 5 34 250 250 350 3,357 (250) (5) $3,102 652009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=68http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=68PSEGAdditionalFinancialInformation NYSE: PEG PSEG Long-Term Debt (unaudited) Maturity Transition Funding (PSE&G) Securitization Bonds Swap to 5.66% 6.45% 6.61% 6.75% 6.89% Principal Amount Outstanding Amounts Due Within One Year Total Securitization Debt of Transition Funding Transition Funding II (PSE&G) Securitization Bonds 4.18% 4.34% 4.49% 4.57% Principal Amount Outstanding Amounts Due Within One Year Total Securitization Debt of Transition Funding II Total Long-Term Debt of PSE&G Year Ended December 31, 2008 ($ millions) 2007 2009 2011 2013 2014 2015 $82 328 454 220 370 $1,454 (178) $1,276 $251 328 454 220 370 $1,623 (169) $1,454 2007-2008 2008-2012 2013 2015 — 33 20 23 76 (10) 66 $4,805 8 35 20 23 86 (10) 76 $4,632 662009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=69http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=69PSEG Long-Term Debt (unaudited) Maturity Year Ended December 31, 2008 ($ millions) 2007 Energy Holdings Senior Notes 8.63% 10.00% 8.50% Principal Amount Outstanding Amounts Due Within One Year Total Senior Notes Non-Recourse Project Debt Global - Floating Rate Resources - 4.75% to 8.75% EGDC - 8.27% Principal Amount Outstanding Amounts Due Within One Year Total Non-Recourse Project Debt Total Long-Term Debt of Energy Holdings 2008 2009 2011 $– – 505 $505 – 505 280 33 15 328 (286) 42 $547 $207 400 530 $1,137 (607) 53 330 36 17 383 (37) 346 $876 2008 – 2009 2008 – 2016 2008 – 2013 672009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=70http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=70PSEGAdditionalFinancialInformation NYSE: PEG PSEG Short-Term Liquidity Company/Facility (millions) PSEG 5-Year Credit Facility (A) Bilateral Credit Facility Uncommitted Bilateral Agreement Total PSEG PSEG Power 5-Year Credit Facility (A) Bilateral Credit Facility Bilateral Credit Facility Bilateral Credit Facility Bilateral Credit Facility Total PSEG Power PSE&G 5-Year Credit Facility (A) Uncommitted Bilateral Agreement Total PSE&G PSEG Energy Holdings 5-Year Credit Facility Total PSEG Energy Holdings Total Facility $1,000 100 N/A $1.100 $1,600 100 150 100 50 $2,000 $600 N/A $600 $136 $3,836 Usage $13 (B) — — $13 $222 (B) — (B) 52 (B) 14 (B) — (B) $288 $20 — $20 $21 (B) $342 Available Liquidity $987 100 N/A $1,087 $1,378 100 98 86 50 $1,712 $580 N/A $580 $115 $3,494 Expiration Date Year Ended December 31, 2008 Primary Purpose December 2012 CP Support/Funding/Letters of Credit June 2009 CP Support/Funding N/A Funding December 2012 June 2009 March 2009 March 2010 September 2009 Funding/Letters of Credit Funding/Letters of Credit Funding/Letters of Credit Funding/Letters of Credit Funding June 2012 CP Support/Funding/Letters of Credit N/A Funding June 2010 Funding/Letters of Credit (A) In December 2011, facilities reduce by $47, $75, and $28 million for PSEG, PSEG Power and PSE&G, respectively. (B) These amounts relate to letters of credit outstanding. 682009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=71http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=71PSEG Credit Ratings Moody’s PSEG Outlook Commercial Paper PSEG Power Outlook Commercial Paper PSE&G Outlook Mortgage Bonds Preferred Securities Commercial Paper Stable P2 Stable Baa1 Stable A2 Baa3 P2 As of August 31, 2009 S&P Stable A2 Stable BBB Stable ABB+ A2 Fitch Stable F2 Stable BBB+ Stable A BBB+ F2 692009-10-02T22:43:26+02:00http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=72http://ipaperus.ipaperus.com/PSEG/InvestorFactBook/?Page=72www.pseg.com/investor2009-10-02T22:43:26+02:00