Oct. 28, 2009 (PR Newswire) -- NEWARK, N.J., Oct. 28 /PRNewswire-FirstCall/ -- Public Service Enterprise Group (PSEG) (NYSE: PEG) reported today third quarter 2009 Income from Continuing Operations of $488 million or $0.96 per share as compared to Income from Continuing Operations for the third quarter of 2008 of $476 million or $0.94 per share. Net Income for the third quarter 2009 was the same as Income from Continuing Operations. Including the effect of gains on the sale of discontinued operations of $180 million or $0.35 per share, PSEG reported Net Income for the third quarter of 2008 of $656 million, or $1.29 per share. Operating Earnings for the third quarter of 2009 were $464 million or $0.92 per share compared to the third quarter of 2008 Operating Earnings of $477 million or $0.94 per share.

PSEG believes that the non-GAAP financial measure of "Operating Earnings" provides a consistent and comparable measure of performance of its businesses to help shareholders understand performance trends. Operating Earnings exclude the impact of the sale and/or impairment of certain non-core assets and the impact of returns/(losses) associated with Nuclear Decommissioning Trust (NDT) investments and Mark-To-Market (MTM) accounting. The table below provides a reconciliation of PSEG's Net Income to Operating Earnings (a non-GAAP measure) for the third quarter. See Attachment 12 for a complete list of items excluded from Income from Continuing Operations in the determination of Operating Earnings.

PSEG CONSOLIDATED EARNINGS (unaudited)
Third Quarter Comparative Results
2009 and 2008

Income                  Diluted Earnings
($millions)                    Per Share
2009       2008              2009        2008
----       ----              ----        ----
Net Income                   $488       $656             $0.96       $1.29
----------                   ----       ----             -----       -----
Less:  Income
from
Discontinued Ops            --        180                --        0.35
-----------------           ---        ---               ---        ----
Income From
Continuing Ops              $488       $476             $0.96       $0.94
---------------              ----       ----             -----       -----
Less: Excluded
Items                       24         (1)             0.04          --

Operating
Earnings
(Non-GAAP)                  $464       $477             $0.92       $0.94
-----------                  ----       ----             -----       -----
Avg. Shares       507M         508M

"We faced challenging market conditions in the third quarter. Cooler than normal weather and continued weak economic conditions combined to reduce demand and lower pricing," said Ralph Izzo, chairman, president and chief executive officer. He went on to say, "We were able to offset most of the decline in demand through our hedging strategy resulting in recontracting at higher prices, our asset mix, our employees' focus on cost reduction and sales in our lease portfolio, which were undertaken at favorable terms to reduce our tax risk. These factors, however, as we noted last quarter, continue to make it difficult to meet the upper end of our 2009 earnings guidance range of $3.00-$3.25 per share. Although impacted by weather and a weaker economy, we are also positioning ourselves to meet our long-term objectives with a focus on profitable investment, an increase in operating efficiency and a strong balance sheet."

PSEG's operating company guidance reflects the transfer of the Texas gas-fired generating assets from Holdings to Power which was effective on October 1, 2009. In addition, guidance reflects the impact of the Holdings debt exchange with Power which resulted in a premium payment of $20 million after-tax ($0.04 per share). The premium was charged against Holdings results, but deferred at the Parent level, as this transaction was treated as a debt refinancing.

Updated Operating Earnings guidance by subsidiary for 2009 is shown below:

2009 Operating Earnings Guidance
($millions)
----------
PSEG Power                      $1170-$1245
----------                      -----------
PSE&G                               315-335
-----                               -------
PSEG Energy Holdings                  25-45
--------------------                  -----
PSEG Parent                           10-15
-----------                           -----
Operating Earnings               $1520-1640
------------------               ----------
Earnings Per Share               $3.00-3.25
------------------               ----------

Operating Earnings Review and Outlook by Subsidiary

See Attachment 6 for detail regarding the quarter-over-quarter reconciliations for each of PSEG's businesses.

PSEG Power

PSEG Power reported operating earnings of $339 million ($0.67 per share) for the third quarter of 2009 compared with operating earnings of $360 million ($0.71 per share) for the third quarter of 2008. PSEG Power's results in the third quarter of 2009 were hurt by a decline in demand ($0.08 per share) and a migration of customers away from full requirements contracts in a period of low commodity pricing ($0.04 per share).