Public Service Enterprise Group Reports First-Quarter 2001 Earnings Of $1.25 Per Share of Common Stock

Apr 17, 2001, 01:00 ET from Public Service Enterprise Group

    NEWARK, N.J., April 17 /PRNewswire/ -- Public Service Enterprise Group
 (NYSE:   PEG) (PSEG) announced today (April 17, 2001) that consolidated earnings
 for the first quarter of 2001 were $261 million or $1.25 per share of common
 stock, based on 208 million average shares outstanding.  Consolidated earnings
 for the first quarter of 2000 were $270 million or $1.25 per share, based on
 216 million average shares outstanding.
     E. James Ferland, chairman and chief executive officer, said PSEG's
 earnings for the first quarter of this year reflected solid performance from
 the energy trading operation of PSEG Power, the domestic generation business,
 and from PSEG Global, the international generation and distribution business.
 "Global's particularly strong results helped to offset the effects on PSEG of
 the restructuring of our electric utility business in New Jersey and
 demonstrated that it will be a significant earnings contributor in the months
 and years ahead," Ferland said.
     First-quarter results were announced at PSEG's Annual Meeting of
 Stockholders in Newark, NJ.  In remarks prepared for the meeting, Ferland
 emphasized PSEG's commitment to a comprehensive, multi-faceted growth strategy
 that concentrates on energy infrastructure investments in selected markets
 around the world.
     "With restructuring now completed and with PSEG Power and PSEG Global as
 our major growth engines, we are on a clear strategic course to achieve our
 targeted 7% compound annual growth rate in earnings per share over the next
 five years," Ferland added.  "This would mean earnings per share of more than
 $4.00 in 2002 and more than $5.00 in 2005.  Moreover, this would prove our
 very close attention to the importance of increasing shareholder value."
     The accompanying tables show comparative business-by-business results for
 PSEG for the three- and 12-month periods ended March 31, 2001.  An explanation
 of the differences between results for the first quarters of 200l and 2000 is
 as follows:
 
     -- Public Service Electric and Gas Company (PSE&G), which is PSEG's energy
        delivery business, had a five-cents-per-share quarterly decrease due
        primarily to the impact of restructuring.  This decrease included the
        effects of a 2% rate reduction given to electric customers (on top of a
        5% reduction given in August, 1999) and of the issuance of
        securitization bonds related to the recovery of stranded electric
        generation costs.
     -- PSEG Power's quarterly earnings per share were off by nine cents.
        Its trading operation performed strongly in the first quarter of the
        year -- about six cents per share better than the same period last
        year.  However, the increase was more than offset by higher fuel costs
        and interest expenses.  In particular, Power reported interest expenses
        of $64 million, mostly on various inter-company loans obtained by Power
        to complete the acquisition of PSE&G's generation assets in line with
        the restructuring of the utility.  Last week, Power successfully
        conducted the sale of $1.8 billion in debt to help fund its businesses,
        and the majority of the proceeds were used to pay off the high-cost
        loans.  The $1.8 billion was issued at an average cost of about 7.9%.
        This should enable Power's future interest costs to decline to about
        $36 million per quarter.
     -- PSEG Energy Holdings, which is the parent of PSEG Global as well as
        PSEG Resources, the energy asset financing business, and PSEG Energy
        Technologies, the energy services business, contributed 26 cents per
        share in the first quarter, more than double what it contributed in the
        same period last year.  PSEG Global alone accounted for virtually all
        of the contribution and has already exceeded its level of earnings for
        the year 2000.  Global's results stemmed from improvements in the
        performance of various projects and from its withdrawal from an
        interest in the Eagle Point Cogeneration Partnership in exchange for a
        series of payments expected over a five-year period.  Global also
        benefited from the effect of the adoption of an accounting standard
        (SFAS 133) that relates to the fair valuation of derivatives.  These
        positives were offset partially by comparatively lower earnings per
        share from PSEG Resources as a result of the mark-to-market valuation
        of investments in its KKR portfolio stemming from the recent volatility
        in the financial markets.
 
     Note:  Robert C. Murray, chief financial officer of PSEG, will discuss the
 results for the first quarter of 2001 during a live internet webcast on
 http://www.pseg.com tomorrow (April 18) at 10 a.m.
 
     This release includes forward-looking statements.  Although Public Service
 Enterprise Group Incorporated and its subsidiaries believe that their
 expectations are based on reasonable assumptions, they can give no assurance
 that these expectations will be achieved.  For further information, please
 refer to their reports filed with the Securities and Exchange Commission.
 These documents address company business, industry issues and other factors
 that could cause actual results to differ materially from those indicated in
 this release.
 
                    PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
                    CONDENSED STATEMENTS OF INCOME (Unaudited)
                  (Millions of Dollars, except for Per Share Data)
 
           (Assumes historical proforma results for PSE&G and PSEG Power)
                         Three Months Ended March 31, 2001
 
                                                               PSEG
                                                       PSEG   Energy
                                    PSEG    PSE&G      Power  Holdings  Other*
     Operating Revenues:
        Transmission
         & Distribution           $1,446    $1,952      $--     $--    $(506)
        Generation                   561        --      561      --       --
        Trading                      587        --      587      --       --
        Other                        220        --       --     220       --
           Total Operating
            Revenues               2,814     1,952    1,148     220     (506)
     Operating Expenses:
        Energy & Gas Costs         1,543     1,340      709      --     (506)
        Operation & Maintenance      538       250      168     121       (1)
        Depreciation & Amortization  108        72       30       5        1
        Taxes Other than Income       48        43        5      --       --
           Total Operating
            Expenses               2,237     1,705      912     126     (506)
     Operating Income                577       247      236      94       --
 
     Other Income and Deductions      13        11       --       2       --
     Interest Expense and Preferred
      Securities
        Dividend Requirements       (183)      (72)     (64)    (39)      (8)
     Income Taxes                   (153)      (77)     (70)    (10)       4
     INCOME BEFORE EXTRAORDINARY
      ITEM AND CUMULATIVE EFFECT
      OF A CHANGE IN ACCOUNTING
      PRINCIPLE                      254       109      102      47       (4)
     Extraordinary Item-Loss on
      Early Extinguishment of Debt    (2)       --       --      (2)      --
     Cumulative Effect of a Change in
      Accounting Principle             9        --       --       9       --
 
     Net Income (Loss)              $261      $109     $102     $54      $(4)
 
 
        Weighted Average Common
         Shares Outstanding
         (000's):                208,390
 
        Earnings Per Share
         (Basic and Diluted):      $1.25
 
        Dividends Paid Per
         Share of Common Stock     $0.54
 
                         Three Months Ended March 31, 2000
 
                                                                PSEG
                                                        PSEG   Energy
                                     PSEG    PSE&G      Power  Holdings  Other*
     Operating Revenues:
        Transmission
         & Distribution            $1,121    $1,121      $--     $--     $--
        Generation                    530        --      530      --      --
        Trading                       614        --      614      --      --
        Other                         218        --       --     218      --
            Total Operating
             Revenues               2,483     1,121    1,144     218      --
     Operating Expenses:
        Energy & Gas Costs          1,262       501      727      34      --
        Operation & Maintenance       478       238      140     102      (2)
        Depreciation & Amortization    90        52       36       3      (1)
        Taxes Other than Income        50        44        5      --       1
            Total Operating
             Expenses               1,880       835      908     139      (2)
     Operating Income                 603       286      236      79       2
 
     Other Income and Deductions       11         4        6       1      --
     Interest Expense and Preferred
      Securities
        Dividend Requirements        (161)      (80)     (30)    (41)    (10)
     Income Taxes                    (183)      (88)     (86)    (14)      5
 
     Net Income (Loss)               $270      $122     $126     $25     $(3)
 
        Weighted Average Common
         Shares Outstanding
         (000's):                 216,437
 
        Earnings Per Share
         (Basic and Diluted):       $1.25
 
        Dividends Paid Per
         Share of Common Stock      $0.54
 
      * Primarily includes financing activities at the parent and intercompany
        eliminations relating to basic generation service commencing August 1,
        2000.
 
                      Public Service Electric and Gas Company
 
                        Electric and Gas Sales to Customers
 
                                     March 2001
 
                                  Electric Sales
                             Millions of Kilowatthours
 
                                             Three    Change   Twelve    Change
                                             Months     vs     Months      vs
                                             Ended     2000    Ended      2000
 
     Residential                             2,815     4.5%    11,654    -1.2%
     Commercial                              5,117     4.5%    20,727     3.1%
     Industrial                              1,940    -2.2%     8,175    -1.0%
 
     Total                                             3.1%               1.0%
 
                            Gas Sold and Transported
                                Millions of Therms
 
                                             Three    Change    Twelve   Change
                                             Months     vs      Months    vs
                                             Ended     2000     Ended    2000
 
     Residential Sales                         658     7.3%     1,456    13.3%
     Commercial - Firm Sales                   299    18.7%       614    20.6%
     Industrial - Firm Sales                    28    16.7%        56    16.7%
     Gas Transported                           318    -7.0%     1,065    -1.8%
 
     Total *                                          -1.6%               3.7%
 
     * Includes interruptible and cogeneration sales
 
 

SOURCE Public Service Enterprise Group
    NEWARK, N.J., April 17 /PRNewswire/ -- Public Service Enterprise Group
 (NYSE:   PEG) (PSEG) announced today (April 17, 2001) that consolidated earnings
 for the first quarter of 2001 were $261 million or $1.25 per share of common
 stock, based on 208 million average shares outstanding.  Consolidated earnings
 for the first quarter of 2000 were $270 million or $1.25 per share, based on
 216 million average shares outstanding.
     E. James Ferland, chairman and chief executive officer, said PSEG's
 earnings for the first quarter of this year reflected solid performance from
 the energy trading operation of PSEG Power, the domestic generation business,
 and from PSEG Global, the international generation and distribution business.
 "Global's particularly strong results helped to offset the effects on PSEG of
 the restructuring of our electric utility business in New Jersey and
 demonstrated that it will be a significant earnings contributor in the months
 and years ahead," Ferland said.
     First-quarter results were announced at PSEG's Annual Meeting of
 Stockholders in Newark, NJ.  In remarks prepared for the meeting, Ferland
 emphasized PSEG's commitment to a comprehensive, multi-faceted growth strategy
 that concentrates on energy infrastructure investments in selected markets
 around the world.
     "With restructuring now completed and with PSEG Power and PSEG Global as
 our major growth engines, we are on a clear strategic course to achieve our
 targeted 7% compound annual growth rate in earnings per share over the next
 five years," Ferland added.  "This would mean earnings per share of more than
 $4.00 in 2002 and more than $5.00 in 2005.  Moreover, this would prove our
 very close attention to the importance of increasing shareholder value."
     The accompanying tables show comparative business-by-business results for
 PSEG for the three- and 12-month periods ended March 31, 2001.  An explanation
 of the differences between results for the first quarters of 200l and 2000 is
 as follows:
 
     -- Public Service Electric and Gas Company (PSE&G), which is PSEG's energy
        delivery business, had a five-cents-per-share quarterly decrease due
        primarily to the impact of restructuring.  This decrease included the
        effects of a 2% rate reduction given to electric customers (on top of a
        5% reduction given in August, 1999) and of the issuance of
        securitization bonds related to the recovery of stranded electric
        generation costs.
     -- PSEG Power's quarterly earnings per share were off by nine cents.
        Its trading operation performed strongly in the first quarter of the
        year -- about six cents per share better than the same period last
        year.  However, the increase was more than offset by higher fuel costs
        and interest expenses.  In particular, Power reported interest expenses
        of $64 million, mostly on various inter-company loans obtained by Power
        to complete the acquisition of PSE&G's generation assets in line with
        the restructuring of the utility.  Last week, Power successfully
        conducted the sale of $1.8 billion in debt to help fund its businesses,
        and the majority of the proceeds were used to pay off the high-cost
        loans.  The $1.8 billion was issued at an average cost of about 7.9%.
        This should enable Power's future interest costs to decline to about
        $36 million per quarter.
     -- PSEG Energy Holdings, which is the parent of PSEG Global as well as
        PSEG Resources, the energy asset financing business, and PSEG Energy
        Technologies, the energy services business, contributed 26 cents per
        share in the first quarter, more than double what it contributed in the
        same period last year.  PSEG Global alone accounted for virtually all
        of the contribution and has already exceeded its level of earnings for
        the year 2000.  Global's results stemmed from improvements in the
        performance of various projects and from its withdrawal from an
        interest in the Eagle Point Cogeneration Partnership in exchange for a
        series of payments expected over a five-year period.  Global also
        benefited from the effect of the adoption of an accounting standard
        (SFAS 133) that relates to the fair valuation of derivatives.  These
        positives were offset partially by comparatively lower earnings per
        share from PSEG Resources as a result of the mark-to-market valuation
        of investments in its KKR portfolio stemming from the recent volatility
        in the financial markets.
 
     Note:  Robert C. Murray, chief financial officer of PSEG, will discuss the
 results for the first quarter of 2001 during a live internet webcast on
 http://www.pseg.com tomorrow (April 18) at 10 a.m.
 
     This release includes forward-looking statements.  Although Public Service
 Enterprise Group Incorporated and its subsidiaries believe that their
 expectations are based on reasonable assumptions, they can give no assurance
 that these expectations will be achieved.  For further information, please
 refer to their reports filed with the Securities and Exchange Commission.
 These documents address company business, industry issues and other factors
 that could cause actual results to differ materially from those indicated in
 this release.
 
                    PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
                    CONDENSED STATEMENTS OF INCOME (Unaudited)
                  (Millions of Dollars, except for Per Share Data)
 
           (Assumes historical proforma results for PSE&G and PSEG Power)
                         Three Months Ended March 31, 2001
 
                                                               PSEG
                                                       PSEG   Energy
                                    PSEG    PSE&G      Power  Holdings  Other*
     Operating Revenues:
        Transmission
         & Distribution           $1,446    $1,952      $--     $--    $(506)
        Generation                   561        --      561      --       --
        Trading                      587        --      587      --       --
        Other                        220        --       --     220       --
           Total Operating
            Revenues               2,814     1,952    1,148     220     (506)
     Operating Expenses:
        Energy & Gas Costs         1,543     1,340      709      --     (506)
        Operation & Maintenance      538       250      168     121       (1)
        Depreciation & Amortization  108        72       30       5        1
        Taxes Other than Income       48        43        5      --       --
           Total Operating
            Expenses               2,237     1,705      912     126     (506)
     Operating Income                577       247      236      94       --
 
     Other Income and Deductions      13        11       --       2       --
     Interest Expense and Preferred
      Securities
        Dividend Requirements       (183)      (72)     (64)    (39)      (8)
     Income Taxes                   (153)      (77)     (70)    (10)       4
     INCOME BEFORE EXTRAORDINARY
      ITEM AND CUMULATIVE EFFECT
      OF A CHANGE IN ACCOUNTING
      PRINCIPLE                      254       109      102      47       (4)
     Extraordinary Item-Loss on
      Early Extinguishment of Debt    (2)       --       --      (2)      --
     Cumulative Effect of a Change in
      Accounting Principle             9        --       --       9       --
 
     Net Income (Loss)              $261      $109     $102     $54      $(4)
 
 
        Weighted Average Common
         Shares Outstanding
         (000's):                208,390
 
        Earnings Per Share
         (Basic and Diluted):      $1.25
 
        Dividends Paid Per
         Share of Common Stock     $0.54
 
                         Three Months Ended March 31, 2000
 
                                                                PSEG
                                                        PSEG   Energy
                                     PSEG    PSE&G      Power  Holdings  Other*
     Operating Revenues:
        Transmission
         & Distribution            $1,121    $1,121      $--     $--     $--
        Generation                    530        --      530      --      --
        Trading                       614        --      614      --      --
        Other                         218        --       --     218      --
            Total Operating
             Revenues               2,483     1,121    1,144     218      --
     Operating Expenses:
        Energy & Gas Costs          1,262       501      727      34      --
        Operation & Maintenance       478       238      140     102      (2)
        Depreciation & Amortization    90        52       36       3      (1)
        Taxes Other than Income        50        44        5      --       1
            Total Operating
             Expenses               1,880       835      908     139      (2)
     Operating Income                 603       286      236      79       2
 
     Other Income and Deductions       11         4        6       1      --
     Interest Expense and Preferred
      Securities
        Dividend Requirements        (161)      (80)     (30)    (41)    (10)
     Income Taxes                    (183)      (88)     (86)    (14)      5
 
     Net Income (Loss)               $270      $122     $126     $25     $(3)
 
        Weighted Average Common
         Shares Outstanding
         (000's):                 216,437
 
        Earnings Per Share
         (Basic and Diluted):       $1.25
 
        Dividends Paid Per
         Share of Common Stock      $0.54
 
      * Primarily includes financing activities at the parent and intercompany
        eliminations relating to basic generation service commencing August 1,
        2000.
 
                      Public Service Electric and Gas Company
 
                        Electric and Gas Sales to Customers
 
                                     March 2001
 
                                  Electric Sales
                             Millions of Kilowatthours
 
                                             Three    Change   Twelve    Change
                                             Months     vs     Months      vs
                                             Ended     2000    Ended      2000
 
     Residential                             2,815     4.5%    11,654    -1.2%
     Commercial                              5,117     4.5%    20,727     3.1%
     Industrial                              1,940    -2.2%     8,175    -1.0%
 
     Total                                             3.1%               1.0%
 
                            Gas Sold and Transported
                                Millions of Therms
 
                                             Three    Change    Twelve   Change
                                             Months     vs      Months    vs
                                             Ended     2000     Ended    2000
 
     Residential Sales                         658     7.3%     1,456    13.3%
     Commercial - Firm Sales                   299    18.7%       614    20.6%
     Industrial - Firm Sales                    28    16.7%        56    16.7%
     Gas Transported                           318    -7.0%     1,065    -1.8%
 
     Total *                                          -1.6%               3.7%
 
     * Includes interruptible and cogeneration sales
 
 SOURCE  Public Service Enterprise Group