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Form 8-K PUBLIC SERVICE ELECTRIC For: Aug 02 Filed by: PUBLIC SERVICE ENTERPRISE GROUP INC

August 2, 2022 9:04 AM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 2, 2022
Public Service Enterprise Group Incorporated
(Exact name of registrant as specified in its charter)
 
         
New Jersey
 
001-09120
 
22-2625848
(State or other jurisdiction of
incorporation)
  (Commission File Number)  
(I.R.S. Employer
Identification Number)
80 Park Plaza
Newark, New Jersey 07102
(Address of principal executive offices) (Zip Code)
973
430-7000
(Registrant’s telephone number, including area code)
Public Service Electric and Gas Company
(Exact name of registrant as specified in its charter)
 
         
New Jersey
 
001-00973
 
22-1212800
(State or other jurisdiction of
incorporation)
  (Commission File Number)  
(I.R.S. Employer
Identification Number)
80 Park Plaza
Newark, New Jersey 07102
(Address of principal executive offices) (Zip Code)
973
430-7000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form
8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17 CFR
240.14a-12)
 
Pre-commencement
communications pursuant to Rule
14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
 
Pre-commencement
communications pursuant to Rule
13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
 
         
Title of Each Class
 
Trading
Symbol(s)
 
Name of Each Exchange
On Which Registered
Public Service Enterprise Group Incorporated
       
Common Stock without par value   PEG   New York Stock Exchange
     
Public Service Electric and Gas Company
       
8.00% First and Refunding Mortgage Bonds, due 2037   PEG37D   New York Stock Exchange
5.00% First and Refunding Mortgage Bonds, due 2037   PEG37J   New York Stock Exchange
Indicate by check mark whether any of the registrants is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2
of the Securities Exchange Act of 1934
(§240.12b-2
of this chapter).
 
Emerging growth company  
If an emerging growth company, indicate by check mark if such registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

The information contained in Item 2.02. Results of Operations and Financial Condition in this Form
8-K
is furnished solely for Public Service Enterprise Group Incorporated (PSEG). The information contained in Item 7.01 Regulation FD Disclosure in this combined Form
8-K
is separately furnished, as noted, by PSEG and Public Service Electric and Gas Company (PSE&G). Information contained herein relating to any individual company is provided by such company on its own behalf and in connection with its respective Form
8-K.
PSE&G makes representations only as to itself and makes no other representations whatsoever as to any other company. The materials furnished as Exhibits 99 and 99.1 are available on the corporate.pseg.com website under the investors tab, or at http://investor.pseg.com.
Item 2.02 Results of Operations and Financial Condition
PSEG
On August 2, 2022, PSEG announced financial results for the three and six months ended June 30, 2022. A copy of the earnings release dated August 2, 2022 is furnished as Exhibit 99 to this Form
8-K.
Item 7.01 Regulation FD Disclosure
PSEG and PSE&G
On August 2, 2022, PSEG conducted an earnings call regarding its results for the three and six months ended June 30, 2022. A copy of the slideshow presentation used during the earnings call is furnished as Exhibit 99.1 to this Form
8-K.
Item 9.01 Financial Statements and Exhibits
 
Exhibit 99    Press Release dated August 2, 2022
Exhibit 99.1    Slideshow Presentation
Exhibit 104    Cover Page Interactive Data File (embedded within the Inline XBRL document).
 
2

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
 
         
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(Registrant)
         
     
    By:  
/s/ Rose M. Chernick
        ROSE M. CHERNICK
        Vice President and Controller
        (Principal Accounting Officer)
Date: August 2, 2022
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
 
         
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Registrant)
         
     
    By:  
/s/ Rose M. Chernick
        ROSE M. CHERNICK
        Vice President and Controller
        (Principal Accounting Officer)
Date: August 2, 2022
 
3

EXHIBIT 99

 

LOGO

     

Public Service Enterprise Group

80 Park Plaza

Newark, NJ 07102

CONTACTS

     
Investor Relations:       Media Relations:

973-430-6565

      973-430-5924

[email protected]

      [email protected]

PSEG ANNOUNCES 2022 SECOND QUARTER RESULTS

NET INCOME OF $0.26 PER SHARE

NON-GAAP OPERATING EARNINGS OF $0.64 PER SHARE

PSE&G to Invest $511 Million through Infrastructure Advancement Program

Re-Affirms 2022 Non-GAAP Operating Earnings Guidance of $3.35—$3.55 per Share

(August 2, 2022 – Newark, NJ) Public Service Enterprise Group (NYSE: PEG) reported Net Income of $131 million, or $0.26 per share for the second quarter of 2022, compared to a Net Loss of $177 million, or $0.35 per share, in the second quarter of 2021. Non-GAAP Operating Earnings for the second quarter of 2022 were $320 million, or $0.64 per share, compared to non-GAAP Operating Earnings of $356 million, or $0.70 per share in the second quarter of 2021.

Ralph Izzo, chair, president and chief executive officer said, “Results for the second quarter and the first half of 2022 reflect ongoing rate base growth from regulated investments and favorable cost comparisons resulting from the sale of PSEG Fossil, placing us on track to achieve our 2022 financial goals. We remain focused on improving system reliability, further de-risking the business overall, and maximizing affordability for our customers.”

Izzo continued, “As I step down from my CEO duties on September 1, PSEG is well positioned to enter its 120th year of serving New Jersey with essential energy services that help to power the economic engine of the State and advance its energy policy leadership. In my role as executive chair of the board through the end of 2022, I will continue to advocate on behalf of PSEG in key policy arenas. With Ralph LaRossa at the helm, PSEG will further advance its Powering Progress vision of a future where people use less energy, and it’s cleaner, safer and delivered more reliably than ever. PSEG’s dedicated workforce will continue the public service heritage that recently earned us the 2022 EEI Edison Award, the electric utility industry’s highest honor, in recognition of PSE&G’s infrastructure modernization programs focused on protecting our customers and communities from extreme weather conditions. The June 2022 approval of a four-year, $511 million investment in our Infrastructure Advancement Program (IAP) will extend these reliability improvements to the “Last Mile” of our distribution system, as we prepare the grid for the rapid transition to electric vehicles and enable a greater blend of renewable energy resources.”

The following table provides a reconciliation of PSEG’s Net Income/(Loss) to non-GAAP Operating Earnings for the second quarter. See Attachments for a complete list of items excluded from Net Income/(Loss) in the determination of non-GAAP Operating Earnings.


PSEG CONSOLIDATED (unaudited)

Second Quarter Comparative Results

 

     Income/(Loss)
($ millions)
     Diluted Earnings
(Per Share)
 
     2022      2021      2022      2021  
Net Income/(Loss)    $ 131      $ (177    $ 0.26      $ (0.35
Reconciling Items      189        533        0.38        1.05  
Non-GAAP Operating Earnings    $ 320      $ 356      $ 0.64      $ 0.70  

PSEG Fully Diluted Average Shares Outstanding*

 

     500M        504M  

 

*

Approximately three million potentially dilutive shares were excluded from fully diluted average shares outstanding used to calculate the diluted GAAP loss per share for the three months ended June 30, 2021 as their impact was antidilutive to GAAP results. For non-GAAP per share calculations, we used fully diluted average shares outstanding of 507 million, including the three million potentially dilutive shares as they were dilutive to non-GAAP results. M=Million.

Ralph Izzo added, “We are re-affirming our 2022 non-GAAP Operating Earnings guidance of $3.35—$3.55 per share. The Conservation Incentive Program (CIP) continues to reduce variances in sales revenue due to energy efficiency savings, weather and economic impacts, resulting in more stable utility margins. Our regulated investment programs continue to add predictable rate base growth while improving reliability and resiliency, and helping the State reach its clean energy goals. We also reiterate our multi-year earnings per share CAGR of 5% to 7% from the mid-point of 2022 guidance to 2025, in large part driven by continued growth in the utility’s investment programs, including obtaining a return of and on capital investments that will be recovered specifically through the next base rate case to be filed by year-end 2023.”

PSEG 2022 Non-GAAP Operating Earnings Guidance

 

($ millions, except EPS)

   2022E

PSE&G

   $1,510 - $1,560

Carbon-Free, Infrastructure & Other

           170 - 220        
  

 

PSEG non-GAAP Operating Earnings

   $1,680 - $1,780

PSEG non-GAAP Operating EPS

   $3.35 - $3.55

E = Estimate

Guidance for Carbon-Free, Infrastructure & Other excludes results related to the fossil generating assets sold in February 2022.

Financial Results and Outlook

PSE&G

Public Service Electric & Gas

Second Quarter Comparative Results

 

($ millions, except EPS)

   2Q 2022      2Q 2021      Q/Q Change  
Net Income    $ 305      $ 309      $ (4
Earnings Per Share    $ 0.61      $ 0.61        —    

 

2


Compared to the second quarter of 2021, Transmission margin was flat, as growth in rate base and other positive true-up adjustments were offset by the August 2021 implementation of a new Transmission formula rate, including a lower return on equity. For distribution, Gas margin improved by $0.02 per share over second quarter 2021, reflecting the scheduled recovery of investments made under Gas System Modernization Program II and the true up from the CIP. Electric margin rose by $0.02 per share compared to the second quarter of 2021, driven by the scheduled recovery of Energy Strong II investments and the CIP. Other margin, primarily related to appliance services, also added $0.01 per share compared with the second quarter of 2021.

O&M expense was $0.04 per share unfavorable compared with the second quarter of 2021, reflecting higher legal costs from the resumption of customer settlement proceedings as courts reopened, higher Electric operations expense and Gas tariff work. Interest expense was $0.01 per share unfavorable, reflecting higher investment. In addition, the impact of PSEG’s $500 million share repurchase program had a $0.01 per share benefit on second quarter 2022 results. Flow-through taxes and other items had a net unfavorable impact of $0.01 per share compared to second quarter 2021, driven by the use of an annual effective tax rate that will reverse over the remainder of the year.

Weather during the second quarter of 2022 (measured by the Temperature-Humidity Index-THI) was warmer than normal but cooler than temperatures during the second quarter of 2021. With the CIP in effect, variations in weather (positive or negative) have a limited impact on electric and gas margins while enabling the widespread adoption of PSE&G’s energy efficiency programs. For the trailing 12-months ended June 30, weather-normalized electric and gas sales reflected lower Residential (both lower by approximately 3%) and higher Commercial and Industrial (higher by 2% and 3%, respectively) sales, as more people returned to work outside the home. Growth in the number of electric and gas customers remained positive by approximately 1% during the trailing 12-month period.

On June 29, the New Jersey Board of Public Utilities approved the settlement of the Infrastructure Advancement Program authorizing PSE&G to invest $511 million over the next four years for grid modernization and “Last Mile” reliability improvements that support New Jersey’s clean energy goals.

PSE&G invested approximately $741 million during the second quarter and approximately $1.4 billion year to date through June 30, and is on track to execute its planned 2022 capital investment program of $2.9 billion. The 2022 capital spending program includes infrastructure upgrades to its transmission and distribution facilities, as well as the continued rollout of the Clean Energy Future investments in energy efficiency, energy cloud (smart meters), electric vehicle charging infrastructure, and the newly approved IAP.

PSE&G’s forecast of Net Income for 2022 is unchanged at $1,510 million - $1,560 million.

 

3


PSEG Carbon-Free, Infrastructure & Other

Carbon-Free, Infrastructure & Other

Second Quarter Comparative Results

 

($ millions, except EPS)

   2Q 2022      2Q 2021      Q/Q Change  

Net Loss

   $ (174    $ (486    $ 312  

Loss Per Share (EPS)

   $ (0.35    $ (0.96    $ 0.61  

Non-GAAP Operating Earnings*

   $ 15      $ 47      $ (32

Non-GAAP Operating EPS

   $ 0.03      $ 0.09      $ (0.06

Fully Diluted Avg. Shares Outstanding**

     500M        504M     

 

*

Non-GAAP Operating Earnings for 2Q 2022 exclude the results of fossil generation sold in February 2022.

**

Approximately three million potentially dilutive shares were excluded from fully diluted average shares outstanding used to calculate the diluted GAAP loss per share for the three months ended June 30, 2021 as their impact was antidilutive to GAAP results. For non-GAAP per share calculations, we used fully diluted average shares outstanding of 507 million, including the three million potentially dilutive shares as they were dilutive to non-GAAP results. M=Million.

Carbon-Free, Infrastructure & Other (CFIO) reported a Net Loss of $174 million ($0.35 per share) for the second quarter of 2022 and non-GAAP Operating Earnings of $15 million ($0.03 per share). This compares to a second quarter 2021 Net Loss of $486 million and non-GAAP Operating Earnings of $47 million, which included results of the divested fossil and solar assets.

For the second quarter of 2022, electric gross margin declined by $0.25 per share, primarily due to the sale of the 6,750 MW fossil portfolio in February 2022 and the sale of the Solar Source portfolio in June 2021. This reduction in gross margin includes recontracting approximately 8 TWh of nuclear generation at a $3/MWh lower average price. In addition, zero emission certificates added $0.01 per share due to the absence of the Hope Creek refueling outage in the year-earlier quarter. Separately, lower margins at Gas Operations resulted in a $0.01 decline in gross margin versus the second quarter of 2021.

Year over year, second quarter cost comparisons were better by $0.22 per share due to the divestitures, driven by lower O&M, depreciation and interest expense that will mainly benefit first-half 2022 results. The third and fourth quarters of 2021 reflected the Solar Source sale in June, the cessation of fossil depreciation from August onward, and the retirement of PSEG Power’s outstanding debt in October. Parent activity was $0.01 per share unfavorable compared with second quarter 2021, as a result of higher interest expense. Taxes and other were $0.01 unfavorable compared to the second quarter 2021.

Nuclear generating output increased by over 3.7% to 7.5 TWh in the second quarter of 2022, reflecting the absence of a refueling outage at Hope Creek in the year-earlier quarter. The capacity factor of the nuclear fleet for the year to date period through June 30 was 95.1%. PSEG is forecasting generation output of 14 to 16 TWh for the remaining two quarters of 2022, and has hedged approximately 95% - 100% of this production at an average price of $28 per MWh. For 2023, PSEG is forecasting nuclear baseload output of 30 to 32 TWh and has hedged 95% - 100% of this output at an average price of $31 per MWh. For 2024, PSEG is forecasting nuclear baseload output of 29 to 31 TWh and has hedged 55% - 60% of this output at an average price of $32 per MWh.

PSEG Power had net cash collateral postings of $2.1 billion at June 30 related to out-of-the-money hedge positions from higher energy prices during the first half of 2022. At the end of July, PSEG Power had net cash collateral postings of $2.5 billion. The majority of this collateral relates to hedges in place through the end of 2023 and is expected to be returned as PSEG Power satisfies its obligations under those contracts.

 

4


The forecast of non-GAAP Operating Earnings for Carbon-Free, Infrastructure & Other is unchanged at $170 million - $220 million. The CFIO guidance for 2022 excludes results related to the fossil assets sold in February 2022.

###

PSEG will host a conference call to review its Second Quarter 2022 results with the financial community at 11AM EDT today. This event can be accessed by visiting https://investor.pseg.com/investor-news-and-events to register.

Public Service Enterprise Group (PSEG) (NYSE: PEG) is a predominantly regulated infrastructure company focused on a clean energy future. Guided by its Powering Progress vision, PSEG aims to power a future where people use less energy, and it’s cleaner, safer and delivered more reliably than ever. PSEG’s commitment to ESG and sustainability is demonstrated in our net-zero 2030 climate vision, our pursuit of science-based emissions reductions targets and participation in the U.N. Race to Zero, as well as our inclusion on the Dow Jones Sustainability North America Index, the Bloomberg Gender-Equality Index and the list of America’s most JUST Companies. PSEG’s principal operating subsidiaries are Public Service Electric and Gas Co. (PSE&G), PSEG Power and PSEG Long Island. (https://corporate.pseg.com).

Non-GAAP Financial Measures

Management uses non-GAAP Operating Earnings in its internal analysis, and in communications with investors and analysts, as a consistent measure for comparing PSEG’s financial performance to previous financial results. Non-GAAP Operating Earnings exclude the impact of returns (losses) associated with the Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting and material one-time items.

See Attachments 8 and 9 for a complete list of items excluded from Net Income/(Loss) in the determination of non-GAAP Operating Earnings. The presentation of non-GAAP Operating Earnings is intended to complement, and should not be considered an alternative to the presentation of Net Income/(Loss), which is an indicator of financial performance determined in accordance with GAAP. In addition, non-GAAP Operating Earnings as presented in this release may not be comparable to similarly titled measures used by other companies.

Due to the forward looking nature of non-GAAP Operating Earnings guidance, PSEG is unable to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure. Management is unable to project certain reconciling items, in particular MTM and NDT gains (losses), for future periods due to market volatility.

Forward-Looking Statements

Certain of the matters discussed in this report about our and our subsidiaries’ future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management. When used herein, the words “anticipate,” “intend,” “estimate,” “believe,” “expect,” “plan,” “should,” “hypothetical,” “potential,” “forecast,” “project,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in filings we make with the United States Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K. These factors include, but are not limited to:

 

   

any inability to successfully develop, obtain regulatory approval for, or construct transmission and distribution, and solar and wind generation projects;

 

   

the physical, financial and transition risks related to climate change, including risks relating to potentially increased legislative and regulatory burdens, changing customer preferences and lawsuits;

 

   

any equipment failures, accidents, critical operating technology or business system failures, severe weather events, acts of war, terrorism, sabotage, cyberattack or other incidents that may impact our ability to provide safe and reliable service to our customers;

 

   

any inability to recover the carrying amount of our long-lived assets;

 

   

disruptions or cost increases in our supply chain, including labor shortages;

 

   

any inability to maintain sufficient liquidity or access sufficient capital on commercially reasonable terms;

 

   

the impact of cybersecurity attacks or intrusions or other disruptions to our information technology, operational or other systems;

 

   

the impact of the ongoing coronavirus pandemic;

 

   

failure to attract and retain a qualified workforce;

 

   

inflation, including increases in the costs of equipment, materials, fuel and labor;

 

   

the impact of our covenants in our debt instruments on our business;

 

   

adverse performance of our nuclear decommissioning and defined benefit plan trust fund investments and changes in funding requirements and pension costs;

 

5


   

the failure to complete, or delays in completing, the Ocean Wind 1 offshore wind project and the failure to realize the anticipated strategic and financial benefits of this project;

 

   

fluctuations in wholesale power and natural gas markets, including the potential impacts on the economic viability of our generation units;

 

   

our ability to obtain adequate nuclear fuel supply;

 

   

market risks impacting the operation of our nuclear generating stations;

 

   

changes in technology related to energy generation, distribution and consumption and changes in customer usage patterns;

 

   

third-party credit risk relating to our sale of nuclear generation output and purchase of nuclear fuel;

 

   

any inability to meet our commitments under forward sale obligations;

 

   

reliance on transmission facilities to maintain adequate transmission capacity for our nuclear generation fleet;

 

   

the impact of changes in state and federal legislation and regulations on our business, including PSE&G’s ability to recover costs and earn returns on authorized investments;

 

   

PSE&G’s proposed investment programs may not be fully approved by regulators and its capital investment may be lower than planned;

 

   

the absence of a long-term legislative or other solution for our New Jersey nuclear plants that sufficiently values them for their carbon-free, fuel diversity and resilience attributes, or the impact of the current or subsequent payments for such attributes being materially adversely modified through legal proceedings;

 

   

adverse changes in and non-compliance with energy industry laws, policies, regulations and standards, including market structures and transmission planning and transmission returns;

 

   

risks associated with our ownership and operation of nuclear facilities, including increased nuclear fuel storage costs, regulatory risks, such as compliance with the Atomic Energy Act and trade control, environmental and other regulations, as well as financial, environmental and health and safety risks;

 

   

changes in federal and state environmental laws and regulations and enforcement;

 

   

delays in receipt of, or an inability to receive, necessary licenses and permits; and

 

   

changes in tax laws and regulations.

All of the forward-looking statements made in this report are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by management will be realized or even if realized, will have the expected consequences to, or effects on, us or our business, prospects, financial condition, results of operations or cash flows. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this report apply only as of the date of this report. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even in light of new information or future events, unless otherwise required by applicable securities laws.

The forward-looking statements contained in this report are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

 

 

From time to time, PSEG and PSE&G release important information via postings on their corporate Investor Relations website at https://investor.pseg.com. Investors and other interested parties are encouraged to visit the Investor Relations website to review new postings. You can sign up for automatic email alerts regarding new postings at the bottom of the webpage at https://investor.pseg.com or by navigating to the Email Alerts webpage here.

 

 

 

6


Attachment 1

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ millions, except per share data)

 

     Three Months Ended June 30, 2022  
     PSEG     Eliminations(b)     PSE&G     Carbon-Free,
Infrastructure &
Other (CFIO)(a)
 

OPERATING REVENUES

   $ 2,076     $ (237   $ 1,668     $ 645  

OPERATING EXPENSES

        

Energy Costs

     765       (237     630       372  

Operation and Maintenance

     751       (6     434       323  

Depreciation and Amortization

     269       6       227       36  

Gains on Asset Dispositions and Impairments

     (5     —         —         (5
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Expenses

     1,780       (237     1,291       726  

OPERATING INCOME

     296       —         377       (81

Income from Equity Method Investments

     7       —         —         7  

Net Gains (Losses) on Trust Investments

     (187     (2     (2     (183

Other Income (Deductions)

     38       (5     22       21  

Net Non-Operating Pension and OPEB Credits (Costs)

     94       5       71       18  

Interest Expense

     (150     —         (107     (43
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

     98       (2     361       (261

Income Tax Benefit (Expense)

     33       2       (56     87  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ 131     $ —       $ 305     $ (174
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciling Items Excluded from Net Income (Loss)(c)

     189       —         —         189  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING EARNINGS (non-GAAP)

   $ 320     $ —       $ 305     $ 15  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Per Share

        

NET INCOME (LOSS)

   $ 0.26     $ —       $ 0.61     $ (0.35
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciling Items Excluded from Net Income (Loss)(c)

     0.38       —         —         0.38  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING EARNINGS (non-GAAP)

   $ 0.64     $ —       $ 0.61     $ 0.03  
  

 

 

   

 

 

   

 

 

   

 

 

 
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended June 30, 2021  
     PSEG     Eliminations(b)     PSE&G     CFIO(a)  

OPERATING REVENUES

   $ 1,874     $ (175   $ 1,514     $ 535  

OPERATING EXPENSES

        

Energy Costs

     606       (174     509       271  

Operation and Maintenance

     783       (8     393       398  

Depreciation and Amortization

     322       6       231       85  

Losses on Asset Dispositions and Impairments

     457       —         —         457  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Expenses

     2,168       (176     1,133       1,211  

OPERATING INCOME

     (294     1       381       (676

Income from Equity Method Investments

     6       —         —         6  

Net Gains (Losses) on Trust Investments

     81       1       —         80  

Other Income (Deductions)

     33       (6     24       15  

Net Non-Operating Pension and OPEB Credits (Costs)

     82       4       66       12  

Interest Expense

     (147     —         (101     (46
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

     (239     —         370       (609

Income Tax Benefit (Expense)

     62       —         (61     123  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ (177   $ —       $ 309     $ (486
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciling Items Excluded from Net Income (Loss)(c)

     533       —         —         533  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING EARNINGS (non-GAAP)

   $ 356     $ —       $ 309     $ 47  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Per Share

        

NET INCOME (LOSS)

   $ (0.35   $ —       $ 0.61     $ (0.96
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciling Items Excluded from Net Income (Loss)(c)

     1.05       —         —         1.05  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING EARNINGS (non-GAAP)

   $ 0.70     $ —       $ 0.61     $ 0.09  
  

 

 

   

 

 

   

 

 

   

 

 

 
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a)

Includes activities at PSEG Power, Energy Holdings, PSEG Long Island and the Parent.

(b)

Includes intercompany eliminations and activity at PSEG Services Corporation.

(c)

See Attachments 8 and 9 for details of items excluded from Net Income (Loss) to compute Operating Earnings (non-GAAP).


Attachment 2

 

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ millions, except per share data)

 

     Six Months Ended June 30, 2022  
     PSEG     Eliminations(b)     PSE&G     CFIO(a)  

OPERATING REVENUES

   $ 4,389     $ (821   $ 3,952     $ 1,258  

OPERATING EXPENSES

        

Energy Costs

     2,010       (821     1,598       1,233  

Operation and Maintenance

     1,545       (13     897       661  

Depreciation and Amortization

     552       12       468       72  

Losses on Asset Dispositions and Impairments

     38       —         —         38  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Expenses

     4,145       (822     2,963       2,004  

OPERATING INCOME

     244       1       989       (746

Income from Equity Method Investments

     11       —         —         11  

Net Gains (Losses) on Trust Investments

     (255     (4     (2     (249

Other Income (Deductions)

     43       (10     41       12  

Non-Operating Pension and OPEB Credits (Costs)

     188       12       141       35  

Interest Expense

     (287     —         (210     (77
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

     (56     (1     959       (1,014

Income Tax Benefit (Expense)

     185       1       (145     329  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ 129     $ —       $ 814     $ (685
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciling Items Excluded from Net Income (Loss)(c)

     863       —         —         863  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING EARNINGS (non-GAAP)

   $ 992     $ —       $ 814     $ 178  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Per Share

        

NET INCOME (LOSS)

   $ 0.26     $ —       $ 1.62     $ (1.36
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciling Items Excluded from Net Income (Loss) (c)

     1.71       —         —         1.71  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING EARNINGS (non-GAAP)

   $ 1.97     $ —       $ 1.62     $ 0.35  
  

 

 

   

 

 

   

 

 

   

 

 

 
     Six Months Ended June 30, 2021  
     PSEG     Eliminations(b)     PSE&G     CFIO (a)  

OPERATING REVENUES

   $ 4,763     $ (677   $ 3,587     $ 1,853  

OPERATING EXPENSES

        

Energy Costs

     1,635       (676     1,358       953  

Operation and Maintenance

     1,561       (12     817       756  

Depreciation and Amortization

     663       13       472       178  

Losses on Asset Dispositions and Impairments

     457       —         —         457  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Operating Expenses

     4,316       (675     2,647       2,344  

OPERATING INCOME

     447       (2     940       (491

Income from Equity Method Investments

     9       —         —         9  

Net Gains (Losses) on Trust Investments

     141       2       1       138  

Other Income (Deductions)

     58       (10     52       16  

Non-Operating Pension and OPEB Credits (Costs)

     164       8       132       24  

Interest Expense

     (293     —         (199     (94
  

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

     526       (2     926       (398

Income Tax Benefit (Expense)

     (55     2       (140     83  
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ 471     $ —       $ 786     $ (315
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciling Items Excluded from Net Income(Loss)(c)

     535       —         —         535  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING EARNINGS (non-GAAP)

   $ 1,006     $ —       $ 786     $ 220  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings Per Share

        

NET INCOME (LOSS)

   $ 0.93     $ —       $ 1.55     $ (0.62
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciling Items Excluded from Net Income(Loss)(c)

     1.05       —         —         1.05  
  

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING EARNINGS (non-GAAP)

   $ 1.98     $ —       $ 1.55     $ 0.43  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a)

Includes activities at PSEG Power, Energy Holdings, PSEG Long Island and the Parent.

(b)

Includes intercompany eliminations and activity at PSEG Services Corporation.

(c)

See Attachments 8 and 9 for details of items excluded from Net Income (Loss) to compute Operating Earnings (non-GAAP).


Attachment 3

 

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Capitalization Schedule

(Unaudited, $ millions)

 

     June 30,
2022
    December 31,
2021
 

DEBT

    

Commercial Paper and Loans

   $ 3,313     $ 3,519  

Long-Term Debt*

     17,671       15,919  
  

 

 

   

 

 

 

Total Debt

     20,984       19,438  

STOCKHOLDERS’ EQUITY

    

Common Stock

     5,038       5,045  

Treasury Stock

     (1,382     (896

Retained Earnings

     10,227       10,639  

Accumulated Other Comprehensive Loss

     (455     (350
  

 

 

   

 

 

 

Total Stockholders’ Equity

     13,428       14,438  
  

 

 

   

 

 

 

Total Capitalization

   $ 34,412     $ 33,876  
  

 

 

   

 

 

 

 

*

Includes current portion of Long-Term Debt


Attachment 4

 

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, $ millions)

 

     Six Months Ended June 30,  
     2022      2021  

CASH FLOWS FROM OPERATING ACTIVITIES

     

Net Income

   $ 129      $ 471  

Adjustments to Reconcile Net Income to Net Cash Flows From Operating Activities

     227        578  
  

 

 

    

 

 

 

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

     356        1,049  
  

 

 

    

 

 

 

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

     531        (793
  

 

 

    

 

 

 

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

     496        (684
  

 

 

    

 

 

 

Net Change in Cash, Cash Equivalents and Restricted Cash

     1,383        (428

Cash, Cash Equivalents and Restricted Cash at Beginning of Period

     863        572  
  

 

 

    

 

 

 

Cash, Cash Equivalents and Restricted Cash at End of Period

   $ 2,246      $ 144  
  

 

 

    

 

 

 


Attachment 5

 

PUBLIC SERVICE ELECTRIC & GAS COMPANY

Retail Sales

(Unaudited)

June 30, 2022

 

Electric Sales

 

     Three Months      Change vs.      Six Months      Change vs.  

Sales (millions kWh)

   Ended      2021      Ended      2021  

Residential

     3,156        (2%)        6,357        (2%)  

Commercial & Industrial

     6,255        2%         12,766        3%   

Other

     72        0%         172        1%   
  

 

 

       

 

 

    

Total

     9,483        1%         19,295        1%   
  

 

 

       

 

 

    
Gas Sold and Transported

 

     Three Months      Change vs.      Six Months      Change vs.  

Sales (millions therms)

   Ended      2021      Ended      2021  

Firm Sales

           

Residential Sales

     208        3%        948        1%  

Commercial & Industrial

     171        8%        666        6%  
  

 

 

       

 

 

    

Total Firm Sales

     379        5%        1,614        3%  
  

 

 

       

 

 

    

Non-Firm Sales*

           

Commercial & Industrial

     237        17%        396        9%  
  

 

 

       

 

 

    

Total Non-Firm Sales

     237           396     
  

 

 

       

 

 

    

Total Sales

     616        9%        2,010        4%  
  

 

 

       

 

 

    

*   Contract Service Gas rate included in non-firm sales

    

        
Weather Data*  
     Three Months      Change vs.      Six Months      Change vs.  
     Ended      2021      Ended      2021  

THI Hours - Actual

     4,502        (19%)        4,541        (18%)  

THI Hours - Normal

     4,107           4,125     

Degree Days - Actual

     438        (1%)        2,971        3%   

Degree Days - Normal

     497           3,016     

 

*

Winter weather as defined by heating degree days (HDD) to serve as a measure for the need for heating. For each day, HDD is calculated as HDD = 65°F – the average hourly daily temperature. Summer weather is measured by the temperature-humidity index (THI), which takes into account both the temperature and the humidity to measure the need for air conditioning. Both measures use data provided by the National Oceanic and Atmospheric Administration based on readings from Newark Liberty International Airport. Comparisons to normal are based on twenty years of historic data.


Attachment 6

 

Nuclear Generation Measures

(Unaudited)

 

     GWhr Breakdown     GWhr Breakdown  
     Three Months Ended    

Six Months Ended

 
     June 30,     June 30,  
     2022     2021     2022     2021  

Nuclear - NJ

     4,698       4,396       10,248       9,747  

Nuclear - PA

     2,820       2,853       5,714       5,747  
  

 

 

   

 

 

   

 

 

   

 

 

 
     7,518       7,249       15,962       15,494  
  

 

 

   

 

 

   

 

 

   

 

 

 
     % Generation     % Generation  
     Three Months Ended    

Six Months Ended

 
     June 30,     June 30,  
     2022     2021     2022     2021  

Nuclear - NJ

     62     61     64     63

Nuclear - PA

     38     39     36     37
  

 

 

   

 

 

   

 

 

   

 

 

 
     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 


Attachment 7

 

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Statistical Measures

(Unaudited)

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2022      2021      2022     2021  

Weighted Average Common Shares Outstanding (millions)*

          

Basic

     497        504        499       504  

Diluted

     500        504        502       507  

Stock Price at End of Period

           $63.28       $59.74  

Dividends Paid per Share of Common Stock

     $0.54        $0.51        $1.08       $1.02  

Dividend Yield

           3.4     3.4

Book Value per Common Share

           $27.03       $31.53  

Market Price as a Percent of Book Value

           234     189

 

*

Approximately three million potentially dilutive shares were excluded from fully diluted average shares outstanding used to calculate the diluted GAAP loss per share for the three months ended June 30, 2021 as their impact was antidilutive to GAAP results.


Attachment 8

 

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidated Operating Earnings (non-GAAP) Reconciliation

 

Reconciling Items

   Three Months Ended
June 30,
    Six Months Ended
June 30,
 
                 2022                     2021                     2022                     2021          
     ($ millions, Unaudited)  

Net Income (Loss)

   $ 131     $ (177   $ 129     $ 471  

(Gain) Loss on Nuclear Decommissioning Trust (NDT)

        

Fund Related Activity, pre-tax

     185       (78     257       (133

(Gain) Loss on Mark-to-Market (MTM), pre-tax(a)

     104       285       949       332  

Plant Retirements, Dispositions and Impairments, pre-tax(b)

     (2     457       14       457  

Income Taxes related to Operating Earnings (non-GAAP) reconciling items(c)

     (98     (131     (357     (121
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Earnings (non-GAAP)

   $ 320     $ 356     $ 992     $ 1,006  
  

 

 

   

 

 

   

 

 

   

 

 

 

PSEG Fully Diluted Average Shares Outstanding (in millions)(d)

     500       504       502       507  
  

 

 

   

 

 

   

 

 

   

 

 

 
     ($ Per Share Impact— Diluted, Unaudited)  

Net Income (Loss)

   $ 0.26     $ (0.35   $ 0.26     $ 0.93  

(Gain) Loss on NDT Fund Related Activity, pre-tax

     0.37       (0.15     0.51       (0.26

(Gain) Loss on MTM, pre-tax(a)

     0.20       0.56       1.89       0.65  

Plant Retirements, Dispositions and Impairments, pre-tax(b)

     (0.01     0.90       0.02       0.90  

Income Taxes related to Operating Earnings (non-GAAP) reconciling items(c)

     (0.18     (0.26     (0.71     (0.24
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating Earnings (non-GAAP)

   $ 0.64     $ 0.70     $ 1.97     $ 1.98  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a)

Includes the financial impact from positions with forward delivery months.

(b)

Amount for the six months ended June 30, 2022 includes the results for fossil generation sold in February 2022.

(c)

Income tax effect calculated at the statutory rate except for qualified NDT related activity, which records an additional 20% trust tax on income (loss) from qualified NDT Funds, and the additional investment tax credit (ITC) recapture related to the sale of PSEG Solar Source in 2021.

(d)

Approximately three million potentially dilutive shares were excluded from fully diluted average shares outstanding used to calculate the diluted GAAP loss per share for the three months ended June 30, 2021 as their impact was antidilutive to GAAP results. For non-GAAP per share calculations, we used fully diluted average shares outstanding of 507 million, including the three million potentially dilutive shares as they were dilutive to non-GAAP results.


Attachment 9

 

CFIO Operating Earnings (non-GAAP) Reconciliation

 

Reconciling Items

   Three Months Ended
June 30,
           Six Months Ended
June 30,
 
     2022     2021            2022     2021  
     ($ millions, Unaudited)  

Net Loss

   $ (174   $ (486      $ (685   $ (315

(Gain) Loss on NDT Fund Related Activity, pre-tax

     185       (78        257       (133

(Gain) Loss on MTM, pre-tax(a)

     104       285          949       332  

Plant Retirements, Dispositions and Impairments, pre-tax(b)

     (2     457          14       457  

Income Taxes related to Operating Earnings (non-GAAP) reconciling items(c)

     (98     (131        (357     (121
  

 

 

   

 

 

      

 

 

   

 

 

 

Operating Earnings (non-GAAP)

   $ 15     $ 47        $ 178     $ 220  
  

 

 

   

 

 

      

 

 

   

 

 

 

PSEG Fully Diluted Average Shares Outstanding (in millions)(d)

     500       504          502       507  
  

 

 

   

 

 

      

 

 

   

 

 

 

 

(a)

Includes the financial impact from positions with forward delivery months.

(b)

Amount for the six months ended June 30, 2022 includes the results for fossil generation sold in February 2022.

(c)

Income tax effect calculated at the statutory rate except for qualified NDT related activity, which records an additional 20% trust tax on income (loss) from qualified NDT Funds, and the additional ITC recapture related to the sale of PSEG Solar Source in 2021.

(d)

Approximately three million potentially dilutive shares were excluded from fully diluted average shares outstanding used to calculate the diluted GAAP loss per share for the three months ended June 30, 2021 as their impact was antidilutive to GAAP results. For non-GAAP per share calculations, we used fully diluted average shares outstanding of 507 million, including the three million potentially dilutive shares as they were dilutive to non-GAAP results.

Slide 1

Public Service Enterprise Group Financial Results Presentation August 2, 2022 1st QUARTER 2022 NYSE: PEG 2nd QUARTER 2022 NYSE: PEG EXHIBIT 99.1


Slide 2

Certain of the matters discussed in this presentation about our and our subsidiaries’ future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management. When used herein, the words “anticipate,” “intend,” “estimate,” “believe,” “expect,” “plan,” “should,” “hypothetical,” “potential,” “forecast,” “project,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in filings we make with the United States Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K. These factors include, but are not limited to: any inability to successfully develop, obtain regulatory approval for, or construct transmission and distribution, and solar and wind generation projects; the physical, financial and transition risks related to climate change, including risks relating to potentially increased legislative and regulatory burdens, changing customer preferences and lawsuits; any equipment failures, accidents, critical operating technology or business system failures, severe weather events, acts of war, terrorism, sabotage, cyberattack or other incidents that may impact our ability to provide safe and reliable service to our customers; any inability to recover the carrying amount of our long-lived assets; disruptions or cost increases in our supply chain, including labor shortages; any inability to maintain sufficient liquidity or access sufficient capital on commercially reasonable terms; the impact of cybersecurity attacks or intrusions or other disruptions to our information technology, operational or other systems; the impact of the ongoing coronavirus pandemic; failure to attract and retain a qualified workforce; inflation, including increases in the costs of equipment, materials, fuel and labor; the impact of our covenants in our debt instruments on our business; adverse performance of our nuclear decommissioning and defined benefit plan trust fund investments and changes in funding requirements and pension costs; the failure to complete, or delays in completing, the Ocean Wind 1 offshore wind project and the failure to realize the anticipated strategic and financial benefits of this project; fluctuations in wholesale power and natural gas markets, including the potential impacts on the economic viability of our generation units; our ability to obtain adequate nuclear fuel supply; market risks impacting the operation of our nuclear generating stations; changes in technology related to energy generation, distribution and consumption and changes in customer usage patterns; third-party credit risk relating to our sale of nuclear generation output and purchase of nuclear fuel; any inability to meet our commitments under forward sale obligations; reliance on transmission facilities to maintain adequate transmission capacity for our nuclear generation fleet; the impact of changes in state and federal legislation and regulations on our business, including PSE&G’s ability to recover costs and earn returns on authorized investments; PSE&G’s proposed investment programs may not be fully approved by regulators and its capital investment may be lower than planned; the absence of a long-term legislative or other solution for our New Jersey nuclear plants that sufficiently values them for their carbon-free, fuel diversity and resilience attributes, or the impact of the current or subsequent payments for such attributes being materially adversely modified through legal proceedings; adverse changes in and non-compliance with energy industry laws, policies, regulations and standards, including market structures and transmission planning and transmission returns; risks associated with our ownership and operation of nuclear facilities, including increased nuclear fuel storage costs, regulatory risks, such as compliance with the Atomic Energy Act and trade control, environmental and other regulations, as well as financial, environmental and health and safety risks; changes in federal and state environmental laws and regulations and enforcement; delays in receipt of, or an inability to receive, necessary licenses and permits; and changes in tax laws and regulations. All of the forward-looking statements made in this presentation are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by management will be realized or even if realized, will have the expected consequences to, or effects on, us or our business, prospects, financial condition, results of operations or cash flows. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this presentation apply only as of the date of this presentation. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even in light of new information or future events, unless otherwise required by applicable securities laws. The forward-looking statements contained in this presentation are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-Looking Statements


Slide 3

PSEG presents Operating Earnings in addition to its Net Income/(Loss) reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings is a non-GAAP financial measure that differs from Net Income/(Loss). Non-GAAP Operating Earnings exclude the impact of returns (losses) associated with the Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting and material one-time items. The last two slides in this presentation (Slides A and B) include a list of items excluded from Net Income/(Loss) to reconcile to non-GAAP Operating Earnings with a reference to those slides included on each of the slides where the non-GAAP information appears. Management uses non-GAAP Operating Earnings in its internal analysis, and in communications with investors and analysts, as a consistent measure for comparing PSEG’s financial performance to previous financial results. The presentation of non-GAAP Operating Earnings is intended to complement, and should not be considered an alternative to, the presentation of Net Income/(Loss), which is an indicator of financial performance determined in accordance with GAAP. In addition, non-GAAP Operating Earnings as presented in this release may not be comparable to similarly titled measures used by other companies. Due to the forward-looking nature of non-GAAP Operating Earnings guidance, PSEG is unable to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measure. Management is unable to project certain reconciling items, in particular MTM and NDT gains (losses), for future periods due to market volatility. GAAP Disclaimer From time to time, PSEG and PSE&G release important information via postings on their corporate Investor Relations website at https://investor.pseg.com. Investors and other interested parties are encouraged to visit the Investor Relations website to review new postings. You can sign up for automatic email alerts regarding new postings at the bottom of the webpage at https://investor.pseg.com or by navigating to the Email Alerts webpage here.


Slide 4

PSEG Q2 2022 Second Quarter Results – On track Net Income of $0.26 per share in Q2 2022 Non-GAAP Operating Earnings* of $0.64 per share in Q2 2022 PSE&G Net Income per share results flat in Q2 2022 vs. Q2 2021, rate base growth offset by August 2021 FERC ROE settlement CFIO non-GAAP Operating Earnings* reflect strong nuclear generation performance $500 Million Share Repurchase Program completed in May Operational Excellence PSE&G awarded EEI’s 2022 Edison Award, the electric utility industry's highest honor Nuclear operations achieved an average capacity factor of 95.1% for the first half of 2022 Disciplined Investment PSE&G invested ~$1.4 billion in the first half of 2022, as part of its full year $2.9 billion capital program investing in T&D infrastructure aligned with New Jersey’s clean energy goals BPU approved $511 million, 4-year Infrastructure Advancement Program (IAP) settlement PSEG’s 2021 - 2025 capital program of $15 billion - $17 billion, with 90% directed to PSE&G, expected to produce multi-year EPS growth rate of 5% - 7% from the midpoint of 2022 guidance to 2025 CFIO=Carbon-Free, Infrastructure & Other - includes the remaining business activities of our nuclear generating fleet, investments in regional offshore wind, gas operations, PSEG Long Island operating contracts and other investments including Kalaeloa, as well as parent financing costs * See Slides A and B for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP).


Slide 5

Non-GAAP Operating Earnings* Note: The total of 2021E Original Guidance ranges are wider than the consolidated band to allow for variability by business, as they are often offset in consolidated results. * See Slides A and B for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP) for PSEG and CFIO. $3.35 – $3.55E $3.35 – $3.55E Multi-year EPS growth rate of 5% - 7% from the midpoint of 2022 guidance to 2025 PSEG – Re-affirming Full-Year 2022 Guidance Includes PSEG Fossil’s results excluding depreciation expense which ceased when assets were moved to held for sale in August 2021


Slide 6

Regulatory and Policy Initiatives Update State Regulatory Proceedings In June, the BPU approved a $511 million Infrastructure Advancement Program, a four-year investment that supports both PSEG’s and New Jersey’s clean energy goals, and focuses on “last mile” reliability and job creation BPU proceedings on Offshore Wind Transmission (State Agreement Approach) PSEG submitted several proposals for both onshore (PSE&G) and offshore (Coastal Wind Link JV) solutions to integrate New Jersey’s 7,500 MW offshore wind target by 2035 BPU decision is anticipated October 2022 Investment Priorities Aligned with NJ’s Clean Energy Agenda PSEG’s 25% interest in Ørsted's 1,100 MW Ocean Wind 1 (2025E fully in service) project expands carbon-free fleet with contracted, renewable generation supporting New Jersey’s goal of 100% clean energy by 2050 BPU expected to address the balance of ~$0.2 billion of CEF filings (medium and heavy-duty Electric Vehicles and Energy Storage) in conjunction with future stakeholder proceedings on each of the initiatives Federal Energy Regulatory Commission (FERC) FERC RTO incentive ROE adder remains in place while FERC continues to assess its proposed elimination


Slide 7

PSEG is delivering solid results and sustainable growth Re-affirming full-year 2022 non-GAAP Operating Earnings guidance of $3.35 - $3.55 per share PSE&G expected to contribute ~90% of 2022 non-GAAP Operating Earnings PSEG’s 2021 – 2025 five-year capital spending forecast of $15B - $17B, with 90% directed to PSE&G Multi-year EPS growth rate of 5% - 7% from the midpoint of 2022 guidance to 2025 PSEG increased by $0.12 per share the 2022 indicative annual common dividend rate to $2.16* per share Completed $500M share repurchase program in May; $250M completed through open market, ASR for the remaining $250M PSE&G has the lowest residential bills among regional peers for gas; residential electric bills lower than regional peer average Planned CEO succession effective September 1: Ralph Izzo to retire effective September 1; will continue as Executive Chair of the Board through year-end 2022 Ralph LaRossa to become President and CEO of PSEG effective September 1; will assume additional responsibilities as Chair of the Board January 1, 2023 * All future decisions and declarations regarding dividends on the common stock are subject to approval by the Board of Directors.


Slide 8

PSEG Q2 2022 Review


Slide 9

PSEG – Q2 Results Net Income/(Loss) 2022 2021 Change PSE&G $ 0.61 $ 0.61 $ -- CFIO $ (0.35) $ (0.96) $ 0.61 Total PSEG $ 0.26 $ (0.35) $ 0.61 Non-GAAP Operating Earnings* 2022 2021 Change PSE&G $ 0.61 $ 0.61 $ -- CFIO $ 0.03 $ 0.09 $ (0.06) Total PSEG $ 0.64 $ 0.70 $ (0.06) Note: Approximately three million potentially dilutive shares were excluded from fully diluted average shares outstanding used to calculate the diluted GAAP loss per share for the three months ended June 30, 2021 as their impact was antidilutive to GAAP results. For non-GAAP per share calculations, we used fully diluted average shares outstanding of 507 million, including the three million potentially dilutive shares as they were dilutive to non-GAAP results. * See Slides A and B for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP) for PSEG and CFIO. PSEG EPS Summary – Quarter ended June 30


Slide 10

$ / share PSEG EPS Reconciliation – Q2 2022 versus Q2 2021 Electric Gross Margin (0.25) ZECs 0.01 Capacity (0.14) Generation (0.06) Sale of Solar Source (0.02) Re-contracting & Market (0.04) Gas Operations (0.01) PSEG Power Costs 0.22 O&M 0.11 Depreciation & Interest 0.11 Parent Activity (0.01) Taxes & Other (0.01) Gas Margin 0.02 Electric Margin 0.02 Other Margin 0.01 Distribution O&M (0.04) Distribution Interest (0.01) Distribution Taxes & Other (0.01) Lower Share Count 0.01 Q2 2021 Net Loss Q2 2021 Operating Earnings (non-GAAP)* Q2 2022 Net Income Q2 2022 Operating Earnings (non-GAAP)* PSE&G CFIO Note: Approximately three million potentially dilutive shares were excluded from fully diluted average shares outstanding used to calculate the diluted GAAP loss per share for the three months ended June 30, 2021 as their impact was antidilutive to GAAP results. For non-GAAP per share calculations, we used fully diluted average shares outstanding of 507 million, including the three million potentially dilutive shares as they were dilutive to non-GAAP results. * See Slides A and B for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP) for PSEG and CFIO. ($0.30) ($0.40)


Slide 11

PSEG – First Half Results Net Income/(Loss) 2022 2021 Change PSE&G $ 1.62 $ 1.55 $ 0.07 CFIO $ (1.36) $ (0.62) $ (0.74) Total PSEG $ 0.26 $ 0.93 $ (0.67) Non-GAAP Operating Earnings* 2022 2021 Change PSE&G $ 1.62 $ 1.55 $ 0.07 CFIO $ 0.35 $ 0.43 $ (0.08) Total PSEG $ 1.97 $ 1.98 $ (0.01) * See Slides A and B for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP) for PSEG and CFIO. PSEG EPS Summary – Six Months ended June 30


Slide 12

$ / share PSEG EPS Reconciliation – First Half 2022 versus First Half 2021 Electric Gross Margin (0.53) ZECs 0.01 Capacity (0.27) Generation (0.15) Sale of Solar Source (0.04) Re-contracting & Market (0.08) Gas Operations 0.04 PSEG Power Costs 0.44 O&M 0.22 Depreciation & Interest 0.22 Parent Activity (0.02) Taxes & Other (0.01) Transmission (0.03) Gas Margin 0.10 Electric Margin 0.04 Other Margin 0.03 Distribution O&M (0.06) Distribution Depreciation & Interest (0.02) Distribution Non-Operating Pension/OPEB 0.01 Distribution Taxes & Other (0.02) Lower Share Count 0.02 YTD 2021 Net Income YTD 2021 Operating Earnings (non-GAAP)* YTD 2022 Net Income YTD 2022 Operating Earnings (non-GAAP)* PSE&G CFIO *See Slides A and B for Items excluded from Net Income/(Loss) to reconcile to Operating Earnings (non-GAAP) for PSEG and CFIO. Note: Quarterly results may not add due to rounding.


Slide 13

Typical residential combined electric and gas bill relative to median income has declined from 4.5% to 2.6% since 2009 Recent changes to low-income support programs (LIHEAP, USF and Lifeline) have further increased income thresholds for eligibility Affordability of the combined bill has improved by over 40% since 2009 for median income and low-income customers Based on a typical residential electric customer using 740 kilowatt-hours per summer month and 6,920 kilowatt-hours on an annual basis using rates as of June 1 for each year and a typical residential gas heating customer using 172 therms per winter month and 1,040 therms on an annual basis using rates as of January 1 of each year. Notes: NJ Median income source https://fred.stlouisfed.org/series/MEHOINUSNJA646N. 2021 and 2022 are not available, therefore assume 2% annual increase per year over 2020. Income level of USF, the lowest threshold of the three low-income programs, is 175% of the Federal Poverty Line. Assumes the customer also qualifies for LIHEAP and Lifeline.


Slide 14

Settlement of Infrastructure Advancement Program: 4-year investment program supporting both PSEG’s and NJ’s clean energy goals focused on last mile reliability and job creation Investment Settlement Filing Components Electric Distribution $424M $708M Reliability focused Last Mile outside plant investments and substation modernization Gas Distribution $87M $140M Investment in modernization of Metering and Regulating stations Program Total $511M $848M On June 29, BPU approved the settlement of PSE&G’s IAP filing Investment program runs July 2022 through June 2026 Settlement includes ~$350M clause recovery and ~$160M stipulated base


Slide 15

PSE&G’s planned investments align with NJ’s clean energy goals Includes AFUDC. CEF-EC/AMI is included in Electric LDC. Note: Reflects IAP settlement. Hashed portion of the chart represents unapproved programs including ES extension, CEF-ES, Vehicle Innovation and Electrification and assumes a higher level of investment for the GSMP and CEF-EE program extensions. The current program run rates for GSMP and CEF-EE are expected to continue and are included in the low end of the range. ($ Millions) Unapproved Programs Note: Solid portions represent low end, including extension of GSMP and CEF-EE at current run rates; Shaded portions represent high end. Category % sum of solid and shaded portions. PSEG’s Capital Spending Program Aligns with PSEG’s Net-Zero 2030 Goal Over 90% directed to PSE&G


Slide 16

Unapproved Programs Chart excludes CWIP. Year-end 2021 CWIP balance was ~$1.2B. Note: Reflects IAP settlement. Hashed portion of the chart represents unapproved programs including ES extension, CEF-ES, Vehicle Innovation and Electrification and assumes a higher level of investment for the GSMP and CEF-EE program extensions. The current program run rates for GSMP and CEF-EE are expected to continue and are included in the low end of the range. ($ Millions) Expanded investment program firms 6% - 7.5% compound annual rate base growth from YE 2021 through 2025


Slide 17

PSE&G – Q2 Highlights Operations PSE&G awarded EEI’s 2022 Edison Award, the electric utility industry's highest honor For the trailing 12 months ended June 30, the number of residential electric and gas customers each grew by ~1% For the trailing 12 months ended June 30, weather-normalized electric and gas sales reflected lower Residential (both ~3%) and higher C&I sales (~2% and ~3%, respectively) Achieved top quartile results for all four J.D. Power customer satisfaction surveys released year-to-date 2022 (Second Quarter 2022 Residential Electric and Gas and Wave 1 Business Electric and Gas) J.D. Power Residential customer surveys are released quarterly; J.D. Power Business customer surveys are released twice per calendar year in waves Regulatory and Market Environment Conservation Incentive Program minimizes variations on electric and gas revenues from the rollout of our energy efficiency programs and other impacts such as weather Next Distribution Base Rate Case to be filed by year-end 2023 Financial PSE&G invested ~$1.4 billion in the first half of the year, on track to invest $2.9 billion in 2022 in infrastructure upgrades to T&D facilities and continued rollout of CEF investments in EE, EC/AMI (smart meters) and EV charging PSE&G Net Income per share was flat to Q2 2021 PSE&G 2022 Net Income guidance re-affirmed at $1,510 million - $1,560 million


Slide 18

APPENDIX


Slide 19

Pension is measured annually, at year-end, in determining pension impact for the following year PSEG does not “smooth” the year-end asset value, instead, we will apply our EROA assumption (7.2% for 2022) to the Fair Value of Plan Assets at year-end in determining pension impact for the following year PSEG’s long-standing methodology is deemed to be preferable by accounting standards PSEG also calculates the difference between the Expected and Actual Rate of Return on Plan Assets, which contributes to determining Net Actuarial Gain/Loss If the current year amount, in conjunction with existing Net Actuarial Gain/Loss, exceeds 10% of the greater of our Benefit Obligation or the Fair Value of Plan Assets (corridor), we amortize that over ~16 years As of 12/31/2021, PSEG had funded ~95% of its pension Benefit Obligation; Based on IRS minimum funding requirements, no cash contributions are anticipated for the next few years ($ Millions) 2021 2020 Discount Rate 2.94% 2.61% Expected Rate of Return on Plan Assets (EROA) 7.7% 7.7% Fair Value of Plan Assets at Beginning of Year $6,368 $5,929 Actual Return on Plan Assets $886 $761 Fair Value of Plan Assets at Year-End $6,906 $6,368 Benefit Obligation at Year-End $7,240 $7,507 Funded Status at Year-End 95% 85% Net Actuarial Loss at Year-End $1,643 $2,354 Source: PSEG 2021 10-K, pages 59, 117-120 Actively pursuing initiatives to mitigate potential pension headwinds caused by financial market conditions at year-end 2022


Slide 20

PSEG maintains a solid financial position PSEG PSEG Senior Unsecured Credit Ratings Moody’s = Baa2 / Outlook = Stable S&P = BBB / Outlook = Stable PSEG 364-Day Term Loan Outstanding as of 6/30/2022 (1) $3.3B PSEG Long-term Debt Outstanding as of 6/30/2022 $4.1B PSEG Consolidated Debt to Capitalization as of 6/30/2022 61% PSEG 2022 Financing Activity 364-Day Term Loan due March 2022 ($0.5B) Early Repayment of 364-Day Term Loan due May 2022 ($0.8B) 364-Day Term Loan due April 2023 $1.5B 364-Day Term Loan due May 2023 $0.5B Early Repayment of 364-Day Term Loan due August 2022 ($1.3B) (1) 364-Day term loan is included in Short-Term Debt as Commercial Paper & Loans. Note: Total Long-Term Debt Outstanding amounts may not add to PSEG Consolidated Total Long-Term Debt Outstanding due to rounding. Amounts on slide are rounded up to one decimal place. Public Service Electric & Gas PSE&G Senior Secured Credit Ratings Moody’s = A1 / Outlook = Stable S&P = A / Outlook = Stable PSE&G Long-term Debt Outstanding as of 6/30/2022 $12.3B PSE&G 2022 Financing Activity 3.10% Secured Medium-Term Notes (Green Bond) due March 2032 $0.5B PSEG had approximately $3.4B of available liquidity plus cash and short-term investments of $2.2B (inclusive of ~$950M at PSE&G) at 6/30/2022 PSEG Power had net cash collateral postings of $2.1B at 6/30/2022 (net cash collateral postings were $2.5B at the end of July) primarily related to out-of-the-money hedge positions resulting from higher energy prices during the first half of 2022 PSEG Liquidity and Net Cash Collateral Postings PSEG Power Issuer Credit Ratings Moody’s = Baa2 / Outlook = Stable S&P = BBB / Outlook = Stable PSEG Power Long-term Debt Outstanding as of 6/30/2022 $1.3B PSEG Power 2022 Financing Activity Term Loan due March 2025 $1.3B Variable Rate Debt PSEG has short-term loans of $1.5B maturing in April 2023 and $0.5B maturing May 2023 plus commercial paper outstanding; in July 2022, $1.3B short-term loan due August 2022 was repaid PSEG Power has a $1.3B term loan maturing in March 2025


Slide 21

PSEG Liquidity as of June 30, 2022 Company Facility Expiration Date Total Facility Usage Available Liquidity ($ millions) PSE&G Revolving Credit Facility March 2027 $1,000 $18 $982 PSEG Money Pool PSEG/PSEG Power Revolving Credit Facility (PSEG) March 2027 $1,500 $65 $1,435 Revolving Credit Facility (PSEG Power) March 2027 1,250 306 944 Letter of Credit Facility (PSEG Power) April 2024 100 75 25 Letter of Credit Facility (PSEG Power) April 2025 100 100 -- Letter of Credit Facility (PSEG Power) September 2023 100 99 1 $3,050 $645 $2,405 Total Facilities $4,050 $663 $3,387 PSEG Money Pool Cash and Short-term Investments $1,254 PSE&G Cash and Short-term Investments $953 Total Liquidity Available $5,594 Total Money Pool Liquidity Available $3,659 (A,B) (A) Master Facility of $2.75B with a PSEG sublimit of $1.5B and PSEG Power sublimit of $1.25B, which can be adjusted subject to terms within the credit agreement. The PSEG sublimit includes a sustainability linked pricing based mechanism with potential increases or decreases, which are not expected to be material, depending on performance relative to targeted methane emission reductions.


Slide 22

Q2 & First Half 2022 Generation Measures & Hedge Update Note: Generation indicates period net generation; Delivery Year runs from June 1 to May 31 of the next calendar year; Average Prices and Cleared Capacity reflect base and incremental auctions. Nuclear Generation Measures Quarter ended June 30 Six Months ended June 30 2022 2021 2022 2021 Capacity Factor 89.3% 85.7% 95.1% 92.1% Fuel Cost ($ millions) $44 $45 $93 $94 Generation (GWh) 7,518 7,249 15,962 15,494 Fuel Cost ($/MWh) $5.85 $6.21 $5.83 $6.07 * Numbers reflect management’s view of hedge percentages and prices as of June 30, 2022. Prices for 2022 and 2023 reflect revenues of full requirement load deals based on contract price including renewable energy credits and ancillary, but excluding capacity and transmission components. Prices for 2024 reflect energy revenues only. Hedge includes positions with MTM accounting treatment and options. Carbon-Free Contracted Energy Sales* Jul – Dec 2022E 2023E 2024E Fuel Nuclear Nuclear Nuclear Volume TWh 14 - 16 30 - 32 29 - 31 % Hedged 95-100% 95-100% 55-60% Price $/MWh $28 $31 $32 Other 2022 Financial Considerations Capacity Revenue for 2022: ~$150 million New Jersey Zero Emissions Certificates ~$200 million/year through May 2025 Q2 2022 Generation Gross Margin $26.20/MWh, First Half 2022 Generation Gross Margin $28.58/MWh Planned Nuclear capital spending (excluding fuel) is < $150 million for 2022 Delivery Year PSEG’s Average Prices ($/MW-Day) PSEG’s Cleared Capacity (MW) 2021/2022 $142 3,700 2022/2023 $97 3,300 2023/2024 $49 3,700 2021 Nuclear Refueling Completed: Spring – HC | Fall – S2, PB3 2022 Nuclear Refueling Schedule: Spring – S1 | Fall – HC, PB2


Slide 1

PSE&G named the 2022 EEI Edison Award recipient, the electric utility industry's highest honor Named to Dow Jones Sustainability Index – North America 14 years in a row Highest ranked Utility on Newsweek’s America’s Most Responsible Companies 2022 PSE&G named as a 2022 ENERGY STAR® Partner of the Year - Energy Efficiency Program Delivery PSEG Long Island named as a 2022 ENERGY STAR® Partner of the Year - Sustained Excellence Award Policies & Goals PSEG Leadership PSEG Sustainability and ESG Summary PSEG is a vocal advocate for an economy-wide price on carbon and preserving our existing carbon-free nuclear generating fleet Committed to rigorous oversight of political contributions and transparency in disclosure Diversity, Equity & Inclusion Commitment Human Rights Policy LGBTQ+ Inclusion Pledge PSEG’s long-term ESG goals and business strategy are aligned with many of the U.N.’s SDGs as indicated by the colored boxes below Scope 1 are direct emissions from power generation, vehicle fleets and methane, SF6 (Sulfur Hexafluoride) and refrigerant leaks; Scope 2 are indirect emissions from operations from purchased energy of electric and gas and line losses; Scope 3 are indirect emissions from our value chain. Joined the U.N.-backed Race to Zero and Business Ambition for 1.5°C campaigns PSE&G’s Clean Energy Future programs approved to invest $2B to decarbonize the NJ economy via Energy Efficiency, EV infrastructure, and AMI Accelerated PSEG’s climate vision for Net Zero GHG emissions to 2030 (from 2050) for scopes 1 & 2 PSEG will set and validate GHG emission targets for scopes 1, 2 and 3 using science-based targets by September 2023 PSEG generating fleet is a Top 10 U.S. producer of carbon-free energy and is coal-free PSEG owns 25% of Ocean Wind 1, NJ’s first Offshore Wind farm and has submitted proposed solutions into NJ’s OSW transmission RFP ~$1B of regulated solar investments PSEG 2021 Sustainability and Climate Report PSEG Diversity, Equity & Inclusion Report PSEG ESG Performance Report PSEG ESG Disclosures Recognition & Memberships 23


Slide 23

FERCFederal Energy Regulatory Commission GSMPGas System Modernization Program HCHope Creek IAPInfrastructure Advancement Program LDCLocal Distribution Company LIHEAPLow Income Home Energy Assistance Program OSW Offshore Wind PBPeach Bottom RFPRequest for Proposal ROEReturn on Equity RTORegional Transmission Organization SSalem T&DTransmission and Distribution U. N. United Nations USFUniversal Service Fund ZECZero Emission Certificates PSEG Investor Relations 80 Park Plaza Newark NJ 07102 [email protected] investor.pseg.com AFUDCAllowance for Funds Used During Construction AMIAutomated Metering Infrastructure ASRAccelerated Share Repurchase BPUNew Jersey Board of Public Utilities C&ICommercial and Industrial CEF Clean Energy Future CEF-EEEnergy Efficiency CEF-EVElectric Vehicle CEF-ECEnergy Cloud CEF-ESEnergy Storage CFIOCarbon-Free, Infrastructure & Other CWIPConstruction Work in Progress EEstimate EEIEdison Electric Institute EPSEarnings Per Share ESEnergy Strong ESG Environmental, Social and Governance 24


Slide 1

Reconciliation of Non-GAAP Operating Earnings Please see Slide 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income/(Loss). Includes the financial impact from positions with forward delivery months. Amount for the six months ended June 30, 2022 includes the results for fossil generation sold in February 2022. Full year 2021 amounts include a pre-tax loss of $298 million for the make-whole premium paid upon the early redemption of PSEG Power's debt and other non-cash debt extinguishment costs. Income tax effect calculated at the statutory rate except for qualified NDT related activity, which records an additional 20% trust tax on income (loss) from qualified NDT Funds, and the additional investment tax credit (ITC) recapture related to the sale of PSEG Solar Source in 2021 and leveraged lease related activity, which is calculated at a combined leveraged lease effective tax rate. Approximately three million potentially dilutive shares were excluded from fully diluted average shares outstanding used to calculate the diluted GAAP loss per share for the three months ended June 30, 2021 and for the year ended December 31, 2021 as their impact was antidilutive to GAAP results. For non-GAAP per share calculations, we used fully diluted average shares outstanding of 507 million, including the three million potentially dilutive shares as they were dilutive to non-GAAP results. As a result of the use of different denominators for non-GAAP Operating Earnings and GAAP Net Loss, a reconciling line item, “Share Differential,” has been added to the year ended December 31, 2021 results to reconcile the two Earnings/(Loss) per share calculations. A


Slide 2

Reconciliation of Non-GAAP Operating Earnings B Includes the financial impact from positions with forward delivery months. Amount for the six months ended June 30, 2022 includes the results for fossil generation sold in February 2022. Full year 2021 amounts include a pre-tax loss of $298 million for the make-whole premium paid upon the early redemption of PSEG Power's debt and other non-cash debt extinguishment costs. Income tax effect calculated at the statutory rate except for qualified NDT related activity, which records an additional 20% trust tax on income (loss) from qualified NDT Funds, and the additional ITC recapture related to the sale of PSEG Solar Source in 2021 and leveraged lease related activity, which is calculated at a combined leveraged lease effective tax rate. Approximately three million potentially dilutive shares were excluded from fully diluted average shares outstanding used to calculate the diluted GAAP loss per share for the three months ended June 30, 2021 and for the year ended December 31, 2021 as their impact was antidilutive to GAAP results. For non-GAAP per share calculations, we used fully diluted average shares outstanding of 507 million, including the three million potentially dilutive shares as they were dilutive to non-GAAP results. Please see Slide 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income/(Loss).



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