PSEG Announces Third-Quarter 2004 Earnings: $1.04 Per Share Of Common Stock

PSEG Announces Third-Quarter 2004 Earnings: $1.04 Per Share Of Common Stock Earnings are 19% Higher than Same Period in 2003, Reflecting Improved Margins at PSEG Power and PSE&G NEWARK, Oct. 22 /PRNewswire-FirstCall/ -- Public Service Enterprise Group (PSEG) announced today (October 22) that earnings for the third quarter of 2004 were $248 million or $1.04 per share of common stock, based on 238 million average shares outstanding. Comparatively, PSEG's earnings for the third quarter of 2003 were $207 million or 91 cents per share of common stock, based on 228 million average shares outstanding. For the nine months ended September 30, 2004, PSEG produced earnings from continuing operations of $638 million or $2.68 per share, based on 238 million average shares outstanding. These results exclude a gain of $5 million or 2 cents per share from discontinued operations at PSEG Global. Including this item, PSEG's reported earnings for the first nine months of the year were $643 million or $2.70 per share. For the comparable nine-month period in 2003, earnings from continuing operations were $688 million or $3.04 per share, based on 226 million average shares outstanding. These results exclude a net benefit of $333 million or $1.47 per share related to the adoption of a new accounting standard for fossil and nuclear decommissioning, the effect of an extraordinary charge due to the finalization of Public Service Electric and Gas Company's (PSE&G) electric base rate case, and discontinued operations at PSEG Energy Technologies. Including this net benefit, PSEG's reported earnings for the first nine months of 2003 were $1.02 billion or $4.51 per share. Attachments to this release provide a summary of quarterly and year-to- date results for 2004 and 2003 and other related information. Additional details will be included in PSEG's third-quarter 10-Q, which is expected to be filed with the Securities and Exchange Commission (SEC) on or before November 1. E. James Ferland, chairman of the board, said the earnings from continuing operations for the third quarter were about 19% higher than results for the comparable period a year ago. "The better performance stemmed largely from improved operating margins at PSEG Power, our wholesale energy business, and PSE&G, our regulated electric and gas delivery business," he said. Ferland said Power's quarterly contribution, which improved by about $21 million or 7 cents per share, was due largely to higher margins from various wholesale energy contracts and also by lower energy replacement power costs. He explained that the level of replacement power was higher in the third quarter of 2003 primarily because of Hurricane Isabel's impact on Power's three nuclear units in South Jersey. The storm caused heavy salt spray from the Delaware Bay to coat electrical equipment outside the units, forcing them out of service for about a week. He said the benefit this year of lower replacement power costs was due to the absence of a similar storm-related problem. In addition to these factors, Ferland said, Power's quarterly results were affected by the absence of the market transition charge (MTC) revenues collected over a four-year period ended July 31, 2003 and by higher O&M and depreciation costs principally associated with the commercial operation this year of generating facilities in the Midwest. PSE&G's quarterly contribution improved on a relative basis by $24 million or 9 cents per share. Ferland said the increase was primarily due to a $159.5 million electric distribution rate case that became effective in August 2003. Ferland said the stronger quarterly performance by PSEG Power and PSE&G was offset by a relatively lower contribution from PSEG Energy Holdings and by the dilutive effect of an additional 10 million average shares of common stock resulting from an issuance of about 9 million shares in October 2003 and additional shares through the ongoing Dividend Reinvestment Plan. The contribution by Holdings, which is the parent of PSEG Global, an international and domestic generation and distribution business, and PSEG Resources, which manages energy-related financial investments, declined by $5 million or 3 cents per share, due primarily to lower project income and lower lease income at Global and Resources, respectively, because of the monetization of selected assets. In looking ahead, Ferland said PSEG will focus on achieving operational excellence throughout its businesses. "In particular, we are taking significant steps to improve the performance of our nuclear and fossil generating units to assure long-term reliability," Ferland said. He noted that longer-than-expected refurbishment outages and related replacement power and O&M costs this year -- along with increased competitive pressures within the energy industry - caused PSEG to revise its 2004 earnings guidance, which is now in the range of $3.15 to $3.35 per share. Ferland said increased pressure was placed on earnings guidance earlier this week when PSEG Power announced that its Hope Creek nuclear station will transition to a planned refueling outage following the unit's shutdown on October 10 due to a steam pipe failure. Refueling was to have begun on October 28 and conclude in mid-December. However, an earlier start of the refueling may provide an opportunity for an earlier return to service, he said. He said the extension of the refueling outage is expected to increase replacement power costs and O&M by about $12 million (after taxes) or 5 cents per share of PSEG common stock in the fourth quarter. "These incremental costs will pressure the low end of our guidance of $3.15 to $3.35 per share," Ferland said. "The competitive pressures cut across many fronts," Ferland said. "For example, fuel prices have skyrocketed more than 40% and this has driven up electric energy prices within our PJM region by more than 25%. This run-up in prices has impacted the potential benefit of PSEG Power's generation supply contracts we entered into before prices spiked." Ferland said this recent development and other competitive factors will continue to pressure the company's performance at least through next year. "As a result, we recently announced that guidance for 2005 will be in the range of 2004 guidance -- $3.15 to $3.35 per share," he said. He said the earnings outlook should begin to improve beyond 2005. "In 2006, our efforts to upgrade the performance and reliability of our low-cost nuclear units will be completed and a significant portion of our contracted generation will be freed up for repricing," he said. "This should help us achieve our long-term earnings growth rate target of 4%-6% and further support our continuing objective of modest and sustainable dividend increases on an annual basis." FORWARD-LOOKING STATEMENT Readers are cautioned that statements contained in this press release 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, among other things: 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. For further information, please refer to our Annual Report on Form 10-K 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. In addition, any forward-looking statements included herein represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our estimates change, unless otherwise required by applicable securities laws. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (Unaudited) For the Quarters For the Nine Months Ended Ended September 30, September 30, As Restated As Restated (Note 3) (Note 3) 2004 2003 2004 2003 Earnings Results (in Millions) Income from Continuing Operations (Note 1) PSE&G $92 $68 $278 $189 PSEG Power 131 110 292 396 PSEG Energy Holdings PSEG Global 17 24 67 81 PSEG Resources 18 15 31 49 PSEG Energy Holdings (2) (1) (6) (3) Total PSEG Energy Holdings 33 38 92 127 PSEG (8) (8) (24) (24) Income from Continuing Operations $248 $208 $638 $688 Income (Loss) from Discontinued Operations, including Gain (Loss) on Disposal - (1) 5 (19) Extraordinary Item - - - (18) Cumulative Effect of a Change in Accounting Principle - - - 370 PSEG Net Income $248 $207 $643 $1,021 Fully Diluted Average Shares Outstanding (in Millions) 238 228 238 226 Per Share Results (Diluted) Income from Continuing Operations PSE&G $0.39 $0.30 $1.17 $0.84 PSEG Power 0.55 0.48 1.23 1.75 PSEG Energy Holdings PSEG Global 0.07 0.10 0.29 0.36 PSEG Resources 0.08 0.07 0.13 0.21 PSEG Energy Holdings (0.01) - (0.03) (0.01) Total PSEG Energy Holdings 0.14 0.17 0.39 0.56 PSEG (0.04) (0.04) (0.11) (0.11) Income from Continuing Operations $1.04 $0.91 $2.68 $3.04 Income (Loss) from Discontinued Operations, including Gain (Loss) on Disposal - - 0.02 (0.09) Extraordinary Item - - - (0.08) Cumulative Effect of a Change in Accounting Principle - - - 1.64 PSEG Net Income (Note 2) $1.04 $0.91 $2.70 $4.51 Note 1: Income from Continuing Operations includes preferred stock dividends / preference units distributions relating to PSE&G of $1 million and $1 million, PSEG Global of $3 million and $4 million and PSEG Resources of $0 and $2 million for the quarters ended September 30, 2004 and 2003, respectively. Income from Continuing Operations includes preferred stock dividends / preference units distributions relating to PSE&G of $3 million and $3 million, PSEG Global of $11 million and $13 million and PSEG Resources of $2 million and $4 million for the nine months ended September 30, 2004 and 2003, respectively. Note 2: Basic Earnings per Share from Net Income was $1.05 and $0.92 per share for the quarters ended September 30, 2004 and 2003, respectively. Basic Earnings per Share from Net Income was $2.72 and $4.52 per share for the nine months ended September 30, 2004 and 2003, respectively. Note 3: 2003 results reflect the restatement to correct foreign currency translation impacts of PSEG Energy Holdings' equity method investment in RGE, a distribution company in Brazil, and other minor items. The total impact of the restatement for the quarter and nine months ended September 30, 2003 resulted in a change in PSEG's and PSEG Energy Holdings' Net Income of approximately $(0.01) and $0.02 per share, respectively. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED CONSOLIDATING STATEMENT OF OPERATIONS For the Quarter Ended September 30, 2004 (Unaudited, $ Millions) PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS (Note 3) OPERATING REVENUES $2,747 $(329) $1,636 $1,129 $311 OPERATING EXPENSES Energy Costs 1,418 (326) 960 636 148 Operation and Maintenance 531 (9) 261 215 64 Depreciation and Amortization 192 5 140 32 15 Taxes Other Than Income Taxes 30 - 30 - - Total Operating Expenses 2,171 (330) 1,391 883 227 Income from Equity Method Investments 31 - - - 31 OPERATING INCOME 607 1 245 246 115 Other Income 54 11 4 38 1 Other Deductions (19) 1 - (14) (6) Interest Expense (221) (30) (86) (39) (66) Preferred Securities Dividends (1) 3 (1) - (3) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 420 (14) 162 231 41 Income Tax Expense (172) 6 (70) (100) (8) NET INCOME $248 $(8) $92 $131 $33 For the Quarter Ended September 30, 2003 (Unaudited, $ Millions) PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS (Note 2) (Note 3) (Note 2) OPERATING REVENUES $2,779 $(184) $1,530 $1,255 $178 OPERATING EXPENSES Energy Costs 1,574 (183) 915 804 38 Operation and Maintenance 520 (6) 263 222 41 Depreciation and Amortization 163 2 121 27 13 Taxes Other Than Income Taxes 29 - 29 - - Total Operating Expenses 2,286 (187) 1,328 1,053 92 Income from Equity Method Investments 32 - - - 32 OPERATING INCOME 525 3 202 202 118 Other Income 27 - 1 25 1 Other Deductions (19) - - (14) (5) Interest Expense (207) (29) (96) (26) (56) Preferred Securities Dividends (1) 5 (1) - (5) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 325 (21) 106 187 53 Income Tax Expense (117) 13 (38) (77) (15) INCOME FROM CONTINUING OPERATIONS 208 (8) 68 110 38 Loss from Discontinued Operations, net of tax (1) - - - (1) NET INCOME $207 $(8) $68 $110 $37 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 $3 million and $4 million and PSEG Resources of $0 and $1 million for Note 2: 2003 results reflect the restatement to correct foreign currency impacts of PSEG Energy Holdings' equity method investment in RGE, a distribution company in Brazil, and other minor items. Note 3: 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, 2004 (Unaudited, $ Millions) PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS (Note 3) OPERATING REVENUES $8,258 $(1,493) $5,236 $3,814 $701 OPERATING EXPENSES Energy Costs 4,495 (1,491) 3,203 2,541 242 Operation and Maintenance 1,614 (28) 797 682 163 Depreciation and Amortization 534 14 393 87 40 Taxes Other Than Income Taxes 103 - 103 - - Total Operating Expenses 6,746 (1,505) 4,496 3,310 445 Income from Equity Method Investments 92 - - - 92 OPERATING INCOME 1,604 12 740 504 348 Other Income 172 10 10 150 2 Other Deductions (73) (1) (1) (56) (15) Interest Expense (658) (81) (273) (108) (196) Preferred Securities Dividends (3) 13 (3) - (13) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 1,042 (47) 473 490 126 Income Tax Expense (404) 23 (195) (198) (34) INCOME FROM CONTINUING OPERATIONS 638 (24) 278 292 92 Income from Discontinued Operations, including Gain on Disposal, net of tax 5 - - - 5 NET INCOME $643 $(24) $278 $292 $97 For the Nine Months Ended September 30, 2003 (Unaudited, $ Millions) PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS (Note 2) (Note 3) (Note 2) OPERATING REVENUES $8,468 $(1,411) $5,020 $4,320 $539 OPERATING EXPENSES Energy Costs 4,927 (1,410) 3,341 2,882 114 Operation and Maintenance 1,527 (15) 773 652 117 Depreciation and Amortization 360 5 250 74 31 Taxes Other Than Income Taxes 101 - 101 - - Total Operating Expenses 6,915 (1,420) 4,465 3,608 262 Income from Equity Method Investments 83 - - - 83 OPERATING INCOME 1,636 9 555 712 360 Other Income 116 - 14 94 8 Other Deductions (71) - (1) (54) (16) Interest Expense (615) (86) (290) (82) (157) Preferred Securities Dividends (3) 17 (3) - (17) INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 1,063 (60) 275 670 178 Income Tax Expense (375) 36 (86) (274) (51) INCOME FROM CONTINUING OPERATIONS 688 (24) 189 396 127 Loss from Discontinued Operations, including Loss on Disposal, net of tax (19) - - - (19) INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 669 (24) 189 396 108 Extraordinary Item, net of tax (18) - (18) - - Cumulative Effect of a Change in Accounting Principle, net of tax 370 - - 370 - NET INCOME $1,021 $(24) $171 $766 $108 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 $11 million and $13 million and PSEG Resources of $2 million and $4 mi Note 2: 2003 results reflect the restatement to correct foreign currency impacts of PSEG Energy Holdings' equity method investment in RGE, a distribution company in Brazil, and other minor items. Note 3: Primarily includes financing activities at the parent and intercompany eliminations. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED CAPITALIZATION SCHEDULE (Unaudited, $ Millions) September 30, 2004 December 31, 2003 DEBT Commercial Paper and Loans $660 $301 Long-Term Debt, including amounts due within one year 8,686 8,473 Securitization Debt, including amounts due within one year 2,124 2,222 Project Level, Non-Recourse Debt, including amounts due within one year 1,427 1,775 Debt Supporting Trust Preferred Securities 1,201 1,201 Total Debt 14,098 13,972 SUBSIDIARIES' PREFERRED SECURITIES 80 80 COMMON STOCKHOLDERS' EQUITY Common Stock 4,549 4,490 Treasury Stock (978) (981) Retained Earnings 2,472 2,221 Accumulated Other Comprehensive Loss (469) (201) Total Common Stockholders' Equity 5,574 5,529 Total Capitalization $19,752 $19,581 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited, $ Millions) For the Nine Months Ended September 30, 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES Net Income $643 $1,021 Adjustments to Reconcile Net Income to Net Cash Flows From Operating Activities 616 (193) Net Cash Provided by Operating Activities 1,259 828 CASH FLOWS USED IN INVESTING ACTIVITIES (581) (1,060) CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES (814) 231 Net Decrease in Cash and Cash Equivalents (136) (1) Cash and Cash Equivalents at Beginning of Period 452 150 Cash and Cash Equivalents at End of Period $316 $149 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Quarter-to-Quarter EPS Reconciliation September 30, 2004 vs. September 30, 2003 (Unaudited) PSEG 3rd Quarter 2003 Net Income (as restated)* $0.91 PSEG 3rd Quarter 2003 Income from Continuing Operations (as restated)*: $0.91 PSE&G B/(W) 3rd Quarter 2003 $0.30 Electric Rate Case 0.10 Weather (0.02) Electric Demand and Volume margin increase (0.01) Other 0.04 Additional Shares Outstanding (2003 Issuance, DRIP) (0.02) 3rd Quarter 2004 $0.39 $0.09 PSEG Power 3rd Quarter 2003 $0.48 Lower Energy Replacement Costs 0.04 Higher Operating Margins 0.12 MTC (ended August 2003) (0.03) O&M and Depreciation (0.04) Additional Shares Outstanding (2003 Issuance, DRIP) (0.02) 3rd Quarter 2004 $0.55 $0.07 PSEG Energy Holdings 3rd Quarter 2003 (as restated)* $0.17 Global Operations (lower results from GWF, RGE and Electroandes, partially offset by effects of strengthening local currencies, higher revenues at MPC and the TIE acquisition) (0.03) Resources Operations (stronger earnings from investment funds and lower interest costs due to lower debt, partially offset by loss of earnings due to termination of EME-Collins Lease) 0.01 Energy Holdings (Parent) (0.01) 3rd Quarter 2004 $0.14 $(0.03) Public Service Enterprise Group 3rd Quarter 2003 $(0.04) 3rd Quarter 2004 $(0.04) $ - PSEG 3rd Quarter 2004 Income from Continuing Operations $ 1.04 PSEG 3rd Quarter 2004 Net Income $1.04 * See Attachment 1, Note 3 for further details regarding the 2003 restatement. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED YTD-to-YTD EPS Reconciliation September 30, 2004 vs. September 30, 2003 (Unaudited) PSEG Year to Date September 30, 2003 Net Income (as restated)* $4.51 Loss from Discontinued Operations (ET and Global's investments in CPC) 0.09 Extraordinary Loss (relating to rate case) 0.08 Cumulative Effect of a Change in Accounting Principle (adoption of Asset Retirement Obligation at PSEG Power) (1.64) PSEG Year to Date September 30, 2003 Income from Continuing Operations (as restated)*: $3.04 PSE&G B/(W) Year to Date September 30, 2003 $0.84 Electric Rate Case 0.36 Weather (0.06) Electric Demand and Volume margin increase 0.05 Other 0.04 Additional Shares Outstanding (2003 Issuance, DRIP) (0.06) Year to Date September 30, 2004 $1.17 $0.33 PSEG Power Year to Date September 30, 2003 $1.75 Higher Energy Replacement Costs (0.16) Higher Operating Margins including Trading 0.09 MTC (ended August 2003) (0.29) O&M and Depreciation (0.16) Interest Expense (0.04) NDT Income 0.10 Other (0.01) Additional Shares Outstanding (2003 Issuance, DRIP) (0.05) Year to Date September 30, 2004 $1.23 $(0.52) PSEG Energy Holdings Year to Date September 30, 2003 (as restated)* $0.56 Global Operations (lower results from GWF and Electroandes and the effects of a weak US$, partially offset by the gain on the partial sale of LDS and stronger results from MPC) (0.06) Additional Shares Outstanding (2003 Issuance, DRIP) (0.01) (0.07) Resources Termination of EME-Collins Lease (0.07) Additional Shares Outstanding (2003 Issuance, DRIP) (0.01) (0.08) Energy Holdings (Parent) (0.02) Year to Date September 30, 2004 $0.39 $(0.17) Public Service Enterprise Group Year to Date September 30, 2003 $(0.11) Year to Date September 30, 2004 $(0.11) $ - PSEG Year to Date September 30, 2004 Income from Continuing Operations $2.68 Income from Discontinued Operations (Global's gain on sale of CPC) 0.02 PSEG Year to Date September 30, 2004 Net Income $2.70 * See Attachment 1, Note 3 for further details regarding the 2003 restatement. PSEG Global L.L.C. Investment Results For the Quarter and Nine Months Ended September 30, 2004 (Unaudited, $ Millions) As of For the Quarter For the Nine September Ended Months Ended 30, 2004 September 30, 2004 September 30, 2004 Capital At EBIT(B) Non-Recourse EBIT(B) Non-Recourse Risk(A) Interest(C) Interest(C) Region North America $412 $27 $7 $91 $7 Latin America 1,576 31 4 101 14 Asia Pacific 195 5 - 13 - Europe 236 5 8 25 24 India and Oman 96 5 4 15 12 Global G&A - Unallocated - (6) - (22) - Total $2,515 $67 $23 $223 $57 For the Quarter and Nine Months Ended September 30, 2003 (Unaudited, $ Millions) For the For the Nine As of Quarter Ended Months Ended December September 30, 2003 September 30, 2003 31, 2003 Capital At EBIT(B) Non-Recourse EBIT(B) Non-Recourse Risk(A) Interest(C) Interest(C) Region North America $424 $28 $1 $104 $1 Latin America 1,575 44 4 110 12 Asia Pacific 180 2 - 7 - Europe 309 1 - 11 - India and Oman 91 3 5 5 5 Global G&A - Unallocated - (8) - (23) - Total $2,579 $70 $10 $214 $18 Reconciliation of EBIT to Income from Continuing Operations For the Quarters Ended For the Nine Months Ended September 30, September 30, September 30, September 30, 2004 2003 2004 2003 Total Global EBIT $67 $70 $223 $214 Interest Expense (47) (31) (124) (84) Income Taxes - (7) (19) (25) Minority Interest - (4) (2) (11) Preference Units Distributions (3) (4) (11) (13) Income from Continuing Operations $17 $24 $67 $81 (A) Total Capital at Risk includes PSEG 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 PSEG Global's share of net earnings, including interest expense and income taxes, (C) Non-Recourse Interest is interest expense on debt that is non- recourse to PSEG Global. PUBLIC SERVICE ELECTRIC & GAS COMPANY Sales and Revenues to Customers September 2004 (Unaudited, $ Millions) Electric Sales Three Change Nine Change Twelve Change Months vs. Months vs. Months vs. Sales (millions kwh) Ended 2003 Ended 2003 Ended 2003 Residential 3,988 -3.0% 10,181 2.4% 13,035 1.4% Commercial 6,362 3.8% 17,743 5.7% 23,236 5.4% Industrial 1,742 -4.1% 4,947 -2.2% 6,511 -2.5% Street Lighting 81 2.7% 257 -0.6% 364 0.0% Interdepartmental - -100.0% 19 85.8% 21 57.5% Total 12,173 0.3% 33,147 3.4% 43,167 2.9% Revenue (in millions) Residential $482 4.6% $1,186 17.3% $1,513 17.6% Commercial 635 9.8% 1,521 6.9% 1,928 4.6% Industrial 125 12.1% 285 -14.2% 367 -16.7% Street Lighting 15 5.5% 45 11.5% 61 12.4% Other 76 31.3% 218 42.0% 269 45.5% Total $1,333 9.0% $3,255 10.0% $4,138 8.6% Gas Sold and Transported Three Change Nine Change Twelve Change Months vs. Months vs. Months vs. Sales (millions therms) Ended 2003 Ended 2003 Ended 2003 Residential Sales 103 -2.1% 1,020 -5.6% 1,478 -6.3% Commercial - Firm Sales 44 8.8% 420 -4.5% 592 -6.4% Commercial - Interr. & Cogen 11 -19.0% 34 -2.5% 46 -6.5% Industrial - Firm Sales 3 -45.3% 38 -9.6% 53 -12.2% Industrial - Interr. & Cogen 106 -21.2% 287 -26.3% 407 -23.7% Other 3 100.0% 8 234.8% 9 182.1% Total 270 -9.7% 1,807 -9.2% 2,585 -9.5% Gas Transported 243 -18.5% 748 -28.4% 1,046 -24.0% Revenue (in millions) Residential Sales $75 1.8% $735 5.4% $1,086 11.2% Commercial - Firm Sales 30 1.0% 327 -6.8% 448 -3.7% Commercial - Interr. & Cogen 10 17.0% 26 5.9% 33 3.5% Industrial - Firm Sales 2 -54.9% 29 -12.3% 40 -9.9% Industrial - Interr. & Cogen 76 -8.5% 206 -21.0% 272 -18.0% Other Operating Revenues 29 4.5% 87 3.8% 117 3.9% Total $222 -2.0% $1,410 -2.8% $1,996 1.7% Gas Transported $81 0.4% $571 -6.3% $822 -5.8% Three Change Nine Change Twelve Change Months vs. Months vs. Months vs. Weather Data Ended 2003 Ended 2003 Ended 2003 Degree Days - Actual 14 -9.7% 3,198 -9.1% 4,839 -9.5% Degree Days - Normal 39 3,182 4,867 THI Hours - Actual 10,422 -13.3% 14,815 1.4% 15,018 -0.9% THI Hours - Normal 11,044 14,614 14,878 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED STATISTICAL MEASURES Quarters Ending Year to Date September September September September 30, 2004 30, 2003 30, 2004 30, 2003 Weighted Average Common Shares Outstanding (000's) Basic 237,269 226,414 236,724 225,893 Diluted 237,728 227,593 237,883 226,455 Stock Price at End of Period $42.60 $42.00 Dividends Paid per Share of Common Stock $0.55 $0.54 $1.65 $1.62 Dividend Payout Ratio* 65.1% 51.2% Dividend Yield 5.2% 5.1% Price/Earnings Ratio* 12.6 10.0 Rate of Return on Average Common Equity* 15.2% 21.0% Ratio of Earnings to Fixed Charges 2.70 2.18 2.30 2.32 Book Value per Common Share $23.45 $21.36 Market Price as a Percent of Book Value 182% 197% Total Shareholder Return - QTR Ending 7.8% 0.7% Total Shareholder Return - YTD 1.1% 36.3% Total Shareholder Return - 12 Months Ending 6.8% 46.2% Generation by Fuel Type Quarters Ending Nine Months Ending September 30, September 30, 2004 2003 2004 2003 Nuclear - NJ 37% 37% 35% 38% Nuclear - PA 17% 16% 20% 20% Total Nuclear 54% 53% 55% 58% Fossil - Coal - NJ 13% 12% 11% 11% Fossil - Coal - PA 11% 12% 12% 12% Fossil - Coal - CT 5% 5% 6% 6% Total Coal 29% 29% 29% 29% Fossil - Oil & Natural Gas - NJ 14% 14% 13% 10% Fossil - Oil & Natural Gas - NY 0% 0% 1% 0% Fossil - Oil & Natural Gas - CT 1% 2% 1% 2% Fossil - Oil & Natural Gas - Midwest 1% 1% 0% 0% Total Oil & Natural Gas 16% 17% 15% 12% Fossil - Pumped Storage 1% 1% 1% 1% 100% 100% 100% 100% *Calculation based on earnings from continuing operations for 12-month period ending DATASOURCE: Public Service Enterprise Group Incorporated CONTACT: Paul Rosengren +1-973-430-5911, or Leslie Cifelli, +1-973-430-3809, both of Public Service Enterprise Group Web site: http://www.pseg.com/