Ladies and gentlemen, thank you for standing by. My name is Brent, and I'm your event operator today. I would like to welcome, everyone, to today's conference, Public Service Enterprise Group Fourth Quarter 2016 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session for members of the financial community. As a reminder, this conference is being recorded today, Friday, February 24, 2017, and will be available for telephone replay beginning at 2:00 PM Eastern today until 11:30 PM Eastern on March 3, 2017. It will also be available as an audio webcast on PSEG's corporate website at www.pseg.com. I would now like to turn the conference over to Kathleen Lally. Please go ahead.

Thank you, Brent. Good morning, everyone. Thank you for participating in our earnings call today. As you are aware, we released our fourth quarter and full year 2016 earnings results earlier this morning. The release and attachments are posted on our website www.pseg.com under the Investors section. We also posted a series of slides that detail operating results by company for the quarter. Our 10-K for the period ended December 31, 2016, is expected to be filed early next week. I'm not going to read the full disclaimer statement, or the comments we have on the difference between operating earnings and GAAP results, but I do ask that you all read those comments contained in our slides and on our website. The disclaimer statement regarding forward-looking statements details a number of risks and uncertainties that could cause actual results to differ materially from forward-looking statements made therein. And although, we may elect to update those forward-looking statements from time-to-time, we specifically disclaim any obligation to do so, even if our estimates change unless required by applicable securities laws. We also provide commentary with regard to the difference between operating earnings and adjusted EBITDA and net income reported in accordance with generally accepted accounting principles in the United States. PSEG believes that the non-GAAP financial measures of operating earnings and adjusted EBITDA provide a consistent and comparable measures of performance to help shareholders understand our operating and financial trends. I would now like to turn the call over to Ralph Izzo, Chairman, President and Chief Executive Officer of Public Service Enterprise Group, and joining Ralph on the call is Dan Cregg, Executive Vice President and Chief Financial Officer. At the conclusion of their remarks, there will be time for your questions and we ask that you limit yourself to one question and one follow-up. Thank you.

Thank you, Kathleen, and thanks, everyone, for joining us today. This morning, we reported non-GAAP operating earnings for the full year of 2016 and as you saw we reported that the non-GAAP operating earnings for the fourth quarter were $0.54 per share versus non-GAAP operating earnings of $0.50 per share earned in the fourth quarter of 2015. Our GAAP results for the full year of $1.75 per share reflect the impact of our decision last year, to retire the Hudson and Mercer coal-fired generating units in June of this year. The non-GAAP operating earnings for the full year of $2.90 per share were closely aligned with 2015's non-GAAP operating earnings of $2.91 per share. And they were solidly within our revised guidance of $2.80 per share to $2.95 per share, as well as within our original guidance. Our results reflect the benefits of growth through organic investment and control of O&M expense, this helped to offset the impact on earnings from low energy prices and record mild temperatures experienced during the first quarter of the year. Actions we have taken to transition our business mix in response to changing market conditions have supported PSEG's earnings and will continue to have a positive impact. For 2017, we're focusing on our non-GAAP – forecasting, our non-GAAP operating earnings of $2.80 per share to $3 per share. Now, let me just describe a few highlights in 2016. First off, PSE&G was named by the ReliabilityOne organization, as the most reliable utility in the mid-Atlantic region for the 15th consecutive year. The utility invested $2.8 billion during 2016 to upgrade and expand its transmission and distribution system. As part of this work to enhance the system's resiliency and its reliability, PSE&G placed into service the 345 kV northeast grid transmission line. The utility upgraded…

Thank you, Ralph, and good morning, everyone. As Ralph said, PSEG reported non-GAAP operating earnings for the fourth quarter of $0.54 per share versus $0.50 per share for the fourth quarter of 2015. Our earnings in the quarter brought non-GAAP operating earnings for the full year to $2.90 per share, in line with 2015's non-GAAP operating earnings of $2.91 per share, and at the upper end of our revised non-GAAP operating earnings guidance for 2016 of $2.80 per share to $2.95 per share. On slide 4, we've provided you with a reconciliation of non-GAAP operating earnings to net income for the quarter. I'll be providing you with information on slide 10, regarding the contribution to non-GAAP operating earnings by business for the quarter. Slides 11 and 13 contain waterfall charts, that take you through the quarter-over- quarter and year-over-year changes in non-GAAP operating earnings by major business. And I'll review each company in more details starting with PSE&G. PSE&G reported net income for the fourth quarter of 2016 of $0.38 per share and that's compared with $0.31 per share for the fourth quarter of 2015, as shown on slide 15. PSE&G's full year 2016 net income was $889 million, or $1.75 per share compared with net income of $787 million, or a $1.55 per share in 2015 for year-over-year growth of 12.9% PSE&G 's net income in the fourth quarter continued to benefit from return on its expanded investment in transmission and distribution infrastructure. Net income for the quarter improved by $0.06 per share based on growth in PSE&G's investment in transmission and the absence of an adjustment for bonus depreciation in the year-ago quarter. More normal weather conditions relative to unseasonably mild weather in the quarter a year ago, improved net income by a $0.01 per share. And a…

Ladies and gentlemen, we will now begin the question-and-answer session for members of the financial community. Your first question comes from the line of Greg Gordon with Evercore. Please go ahead.

Hey, good morning, thank you.

Good morning, Greg.

Please correct me if I'm wrong, but I just was looking at the guidance that you last gave on a segment basis on the Q3 call versus the actual results. And it looks like PSE&G net income came in slightly below the low end of the higher articulated guidance range, but PSE&G Power had a phenomenal year, at least relative to what you thought at the end of the third quarter. Can you compare your last articulated segment guidance against the year-end results and explain where things were consistent with or inconsistent with where you thought you were going to end up the year?

So, I'll give it to Dan, Greg, good morning, but I think basically we had a pretty cold December and great O&M control and a tax issue with the utility, but Dan do you want to...

Yeah. That's exactly it, Greg. There was a tax issue that's not an ongoing issue, it's a one-time tax item at the utility that brought them just below and Power just did a great job of controlling costs as we went through the balance of the year.

Okay, great. So when we think about the guidance for 2017 then, whatever that – and I can go over it with Kathleen offline, whatever tax issue you had is normalized in terms of expectations?

Yeah. That's exactly right, Greg.

Okay, fantastic. And when you talk about the – sorry to focus on the tax stuff because who knows three months from now, we may wind up not having any tax bill at all, but one of your other competitors that's a large nuclear generator did point out that they thought that there was a significant exposure on border tax on uranium costs since we now unfortunately import the majority of our uranium. Is that theoretically true? But in the longer term if that were the case, are there domestic sources of uranium that would be quickly brought online to mitigate that?

Yeah. I mean, Greg as we think about it, we spend about $200 million a year on nuclear fuel and a little more than half of that is sourced outside of the U.S. So we show that issue, obviously, not to a major extend from the standpoint of the overall impact on Enterprise. But if you think about a border tax trying to encourage domestic production, I don't know that it would – there is any way it would get you all the way there from the ability to source what the industry needs domestically. That said that doesn't mean that you would necessarily have it as part of tax reform. So, we're aware of the issue, watching the issue, and that would be an area, where it would have an impact on us.

And Greg, just the risk of getting into too much detail, remember when we say nuclear fuel, that's a complicated noun to use right, because there is a whole bunch of processing that goes along with it. So, when the answer is half of it is outside, it doesn't mean that from uranium cake to fuel rod, we do half of that in the country, and half of that outside of the country, all parts of it are touched outside of the country. So, as you point out, this is an attempt to bring this product into the nation, that we don't know, how that's going to be doable.

Okay. Thank you, guys. Take care.

Thanks.

Your next question comes from the line of Julien Dumoulin-Smith with UBS. Please go ahead.

Hey, good morning, guys.

Hi, Julien.

Hi, Julien.

Hey, just to finalize that question, just to make sure I heard you right on the nuclear fuel piece. You should assume the vast majority of the fuel CapEx is subject to the border adjustability tax?

Since the laws aren't written it's going to be tough to say, but there is different components going from uranium to enrichment to fabrication along the way, and those steps are more external than internal to the U.S. So, however they would make the determination to apply any kind of a border tax that doesn't – that isn't written as yet, we would apply that against the components of how that comes together, so we're grasping a little bit at trying to define, a number around something that doesn't exist, but if we think about it little more than half of the aggregate cost seems like it might qualify to be non-domestically resourced.

Right, got it. And then vis-a-vis your cash taxes, can you remind us exactly where do you stand today and what your effective and cash tax rates would be as you look at the forecasted future?

So, future would not include any tax reform, I presume. But as we think about overall tax profile, we are a taxpayer and get a little close to not being one into this year, depending upon where the results go and then move back into a tax paying position?

Got it, all right. Then turning to the CapEx bucket, your GSMP program, do you have plans to increase that going into the rate case? And can you remind us of the potential upside there as you see it in terms of the next filing?

Sure. Julien, (34:20) that's a $300 million a year run rate adjusted for inflation going forward, we think that's a 30-year program, so that means we have 27 more years after this first tranche of GSMP and you remember we were operating at a $300 million a year run rate and we have gained confidence that we can push that number up higher. I'd rather leave the details of that discussion for March 6, but it will be – we certainly have the capability to do more than $300 million a year, which would of course shorten the 27 years proportionally.

Got it. Thank you very much.

Your next question comes from the line of Travis Miller with Morningstar. Please go ahead.

Good morning. Thank you.

Hi, Travis.

Hi, Travis.

I was wondering if you could update us, Ralph, on your thoughts about the retail business? The speed at which you would like to ramp that up, the extent to which you might ramp that up relative to the generation output?

So our philosophy hasn't changed, remember this is primarily a defensive move on our part. We did make clear that we were looking at possibly trying to find a couple of tuck-in niche acquisitions, but we have not, and so we've opted to pursue this organically building the capability in house. We still are targeting between 5 terawatt hours and 10 terawatt hours at its maturity. We have received licenses to market in Eastern Pennsylvania and in New Jersey. We have a head of the operation on board that we've hired and a couple of support folks and are talking to people about some of the back-office fundamentals that we don't want to build on our own. Don't forget we still have BGS, which is the 11 terawatt hours of our 50 terawatt hours round numbers that is essentially retail product. And what we're looking to do here is to basically claw back some of the BGS that over years had gone away by some combination of migration or changing of thresholds for the BGS customer. And we think that it will help us capture some loss margin and improve our management of basis differentials. So I think from the point of view of organic growth, I'm pleased with the approach it makes it harder, but it does make it more profitable if done this way.

Yeah. Got it, thanks. And then within that retail business, would you think about doing anything unique like energy services or C&I energy management, anything like that or are we just talking plain retail?

This is plain retail capturing better margin for our hardware that exist.

Got it. Okay. Thanks so much.

Your next question comes from the line of Michael Lapides with Goldman Sachs. Please go ahead. Michael Lapides - Goldman Sachs & Co.: Hi, guys. Congrats on a good 2016. I want to come back to the utility and the commentary about CapEx. I think if I read the release correctly, you said $10.2 billion of total CapEx for the entire company over the next three years and 77% of that is the utility. So that's kind of roughly $7.8 billion of utility CapEx. But then, and I may have misheard this, I thought you said that 2017's CapEx at the utility is going to be $3.4 billion. So that would leave $4.5 billion for 2018 and 2019, which implies $2.2 billion a year roughly. That's a pretty big step down in PSE&G's CapEx. a) I want to make sure I heard that correctly. b) could you walk us through whether that's the number you're likely to lay out at the Analyst Day, or at the Analyst day are you going to update that number? What are the things that are not included that could wind up in there when we think about the next couple of years?

Okay, Michael. Well, first of all good morning, thanks for the nice words. Yes, you heard the numbers correctly. This is our age-old problem, that you now have grown accustom to, where the out years have in the past grown beyond, what we predict them to be in the current timeframe. So, what we'll do at the Analyst Day is try to explain to you, what's been approved, what's about to be filed, what we've confidence in, in terms of being a mere extension of existing programs, and we're actually going to expand a little bit at the Analyst Day to kind of give you a little bit more insights into what I would just call our opportunities set, our drawing board things which we were always working on, but we normally don't bake into our bar charts showing five-year growth. But at the risk of sort of doing the preview with details on the news at 11 you are once again going to see a five-year set of numbers that are higher than what we thought they were going to be last year at this time and that just seems to be the natural trend. And I wish I could always get it right in terms of the prediction, but the out years are always less certain. So – yes, you heard it correctly. Michael Lapides - Goldman Sachs & Co.: Right. It just seems in this – and I want to make sure I understand. The CapEx you're likely to layout at the Analyst Day will differ from the $10.2 billion total number that you put in today's release, or will those two, for just the next three years, be the same number and you'll give a lot more detail about drivers and what could change it?

Yeah. So, in terms of three years, what we'll show you is stuff that we didn't include and why didn't include it, and then we'll expand the five-year view for you. Michael Lapides - Goldman Sachs & Co.: Got it. The only reason I ask is that when I go back over the last decade, it's really years three through five, where you would show a cliff in the slide deck at the Analyst Day, and then as we got closer to year three and year four those numbers would come up. And the only thing that differs from the detail this time is now it's FY 2002 (40:53), meaning it's the 2018 number where you kind of assume a $2.2 billion if you just assumed 2018 and 2019 were the combined equal amount of what's left over. And so I'm just wondering, are we reaching a point where CapEx at PSE&G is starting to moderate?

So I think, I think that your observations are accurate that the turnover generally occurred in years – it slightly occurred in year three and turnover in year four and year five. The other observation I would offer those that this year is a record breaking year for PSE&G CapEx. So, I think it's a combination of kind of GSMP and ESM and Energy Strong in tandem and Solar 4 All in tandem with still some major transmission work going on in the Bergen-Linden Corridor that's feeding a record breaking year. So, that year four and year five is coming up a little bit earlier this time, but that won't change the 9% growth in rate base, which is off of a higher base, and a larger capital program than we've had in the prior years and the prospects for even more to come. Michael Lapides - Goldman Sachs & Co.: Got it. And one thing, in thinking about rate base calcs, what is the bonus D&A impact on rate base over the next couple of years?

It's in the numbers that we're providing, I don't have a separate breakout of what the implications of that were, we can get you a little bit color on those numbers, but we broken out with the total cash flow aspect is and then that will ripple through based upon timing. Michael Lapides - Goldman Sachs & Co.: Got it, thanks. I can follow up with Kathleen. Much appreciated, Ralph, Dan. Much obliged.

Thank you, Michael.

Your next question comes from the line of Paul Patterson with Glenrock Associates. Please go ahead.

Good morning.

Good morning, Paul.

Really quickly. The leases, they were, as I understand, last quarter they were all being paid. Is that still the case?

Yes, everything is still current on them, Paul.

Okay. And what is the earnings impact associated with these leases for 2017? Is it anything significant?

Not a significant contribution to the ongoing earnings, no.

Okay. That's my only question. Everything else has been asked. Thanks.

Okay. Thanks, Paul.

Your next question comes from the line of Praful Mehta with Citigroup. Please go ahead.

Hi. Thanks, so much.

Good morning.

So, my first question was on the O&M operation. You said the Q4 PSEG Power costs were low and were run efficiently. I wanted to understand, is that a one-time thing? What drove that, and can that be replicated going forward or is that already reflected in your guidance?

Yeah. So, our O&M forecast for 2017 is clearly included within the guidance for 2017 and we continue to manage as efficiently as we can within the facilities that we have it. I guess the items that I would think about it, as you move through time and Ralph referenced, maybe some of the operational aspects as supposed to cost specific. But you'll see Hudson and Mercer coming off from the standpoint of those units retiring, and you'll see as time moves on with some new units coming on into retail operation, coming together, you will see some cost come back on from more productive purposes. But we have operated the Power business at an extremely efficient O&M trajectory and if you look over the last five years or so, our O&M is basically dead flat.

Got you. And that's helpful. Any perspective on PJM capacity prices? How do you see all the supply that could impact the upcoming auction, any view on that at all?

Yeah, we never forecast what that is going to be, largely because we don't know what that's going to be. I think, what we are paying careful attention to and I suspect everyone on the call is as well as this first of a kind footnote by PJM that they may have to revisit some of the reliability parameters in the PS Zone and PS North in particular, that's something we all expect to see updated prior to May, I know that we have launched some questions with PJM about some of the reliability assumptions made, these seem to emanate from the change in the wheeling circumstances associated with the New York ISO. So, no we don't forecast, we don't predict to the outside world, we obviously do a lot of analysis inside about what we think may happen, but right now I believe the parameters unfortunately are in a bit of flux, and they need to be fixed sooner rather than later.

Got you. And just finally quickly on the tax reform side, you said with the reduction of corporate tax rate, obviously the excess deferred tax liability, whatever you revalue, you'll have to refund back to customers. Can you give us a sense of what that size is and what do you expect in terms of timeframe if you had to refund that?

Yeah, the second question is the harder one to answer, because it is not determined yet, where that's necessarily going to come from, so that could be legislated as part of what ultimately may come out or be left to the regulatory agencies to make that determination. So, we don't know if you look back to 1986, there was something called the average rate adjustment method, which was painfully complex, and pushed the excess back on a unit-by-unit or a class-by-class as the timing difference has changed. So it was very structured, and very complex and pushed them back over a long period of time. So as it stands right now, we don't know what that message is going to be, because nothing is in place as yet, but that's just an eyeball to history. And if you take a look, you can see just by going through the overall tax footnotes and looking at the aggregate deferred taxes that we have and grossing up at 35% and pulling down at whatever rate you think the rate is going to go to. So you'll have to determine whether you had a 15% or 20% rate or something else based upon what gets legislated. But if you're in that range, you're probably approaching about $2 billion of excess deferreds, just by doing that math off the footnotes of the 10-K.

Got you. Thanks so much, guys.

You're welcome.

Your next question comes from the line of Anthony Crowdell with Jefferies. Please go ahead.

Good morning. I just have hopefully one quick question. The midpoint of the utility guidance $945 million to $985 million, what's the assumption on earned ROE?

Yeah, that's not changing this year for any reasons that we can think of Anthony. We're looking at each other right now say, does somebody knows something that we don't. The rate case filing for base distribution will go in November my guess is those rates will be effective sometime either late in 2018 or January 1 of 2019. Our FERC formula rate has already gone through for January 1. Our clauses are all baked in already at varying degrees from 9.75% to 10.0% So, there is no ROE – there is no allowed ROE impact this year that I can think off...

Yeah. I mean ultimately it becomes the sum product of all of those different rates and programs.

I guess, have you provided what that sum product is that you're assuming for 2017 or no?

No.

No.

Okay. Thank you.

You're welcome.

Your next question comes from the line of Angie Storozynski with Macquarie. Please go ahead. Angie Storozynski - Macquarie Capital (USA), Inc.: Thank you. Just a quick question on the Enterprise and Other. Can you help me with modeling of the future earnings power of this segment?

Yeah. Far and away the biggest component there is PSEG Long Island and that's about a $0.07 to $0.08 benefit in the aggregate. Beyond that there is a little bit of corporate expenses and a little bit of interest, but mainly if you think about that, as just being PSEG Long Island it will be pretty close. Angie Storozynski - Macquarie Capital (USA), Inc.: So why was there a step-down between – why is there a step-down between 2016 and 2019 – 2017? I'm sorry.

Yeah. So there is – we had a tax benefit that came through this year, which is a onetime item, which would not be replicated on a go forward basis. Angie Storozynski - Macquarie Capital (USA), Inc.: Okay. And then for Long Island, should I just keep it flat? Is there any growth embedded in the contract?

Yeah, that there is growth basically on a kind of a CPI oriented growth. So there is no step change that you should expect from that business. Angie Storozynski - Macquarie Capital (USA), Inc.: Okay. Thank you.

You're welcome.

Your next question comes from the line of Ashar Khan with Visium. Please go ahead.

My questions have been answered. Thank you so much.

Hi, Ashar.

Good job.

Your next question comes from the line of Andy Levi with Avon Capital Advisors. Please go ahead.

Hey, guys. How are you doing?

Hi, Andy.

Hey, just two quick questions. Just on 2019 on your hedges, the $43 on the baseload, seems like a very attractive price relative to kind of what shows up on various different – like Bloomberg for example. Just wondering the timeframe when you hedged that and how you were able to get a $43 price, which is very attractive.

Nothing new there Andy, what we have always done and continue to do is as we try to capture items like a full requirements contract like BGS, we, we strip-out the capacity component of it and it leaves you with some of the actual non-energy elements that remain in there. So, as you look that far out that's a bigger proportion of what the hedged amount is. So that's what it gets you to.

And it's consistent with what we've done, whenever we give you our hedge profile.

Okay, so that, just make sure I understand it because I'm not that smart at times. So that percent that you show there, that's mainly from BGS? Is that what you're saying?

About half of it is BGS.

Half of it is BGS, got it. Okay. And the second question is, and I don't know if you had disclosed this already, but what is the PSE&G, the utility's, CapEx for 2017?

That was the $3.4 billion.

$3.4 billion, okay. I did hear that correctly, okay. And then I guess I can discuss the rest with Kathleen afterwards. Okay. Thank you very much.

But she is not going to tell you how we hedged so smartly, she is not going to give away those trade secrets to you.

Okay. Thanks.

See you, Andy.

Your next question comes from the line of Michael Lapides with Goldman Sachs. Please go ahead. Michael Lapides - Goldman Sachs & Co.: Hey, guys. Real quick follow-up on the balance sheet. You've talked previously about how much balance sheet capacity, or excess balance sheet capacity you maintain. Can you give an update on that? And if CapEx does start to moderate at the utility some, and we know that once the gas plants come online at Power we'll start seeing CapEx moderate, and probably early, mid next year there as well. How do you think about utilizing that balance sheet?

Yeah. So thanks for the follow-up question Michael. And your arithmetic was right before, I just, I wanted to be cautious about the use of moderation for the utility capital program as a general characterization because it's anything but, and we'll talk in greater detail about that. And we'll also give you some specifics on residual investment capacity and there is a healthy amount of residual investment capacity that we'll expand about. That is the primary reason, why we planned to do something a little bit new on following Monday and talk about the opportunity set. Albeit with a heavy dose of qualifying that opportunity set as, yeah, so this is the stuff that's on the drawing board that oftentimes never gets to a filing and then even after filing oftentimes gets trimmed, right. So, but we just want to show you the reason why we like having that investment capacity because we're always thinking of things that are important to customers that we can do for them. Michael Lapides - Goldman Sachs & Co.: Got it. Thank you, Ralph. Much appreciated.

Mr. Izzo or Mr. Cregg there are no further questions at this time. Please continue with your presentation or closing remarks.

Great. So, thanks, Brent. So thanks, everyone, for being on the call. And we hope the results for 2016 and the outlook for 2017 help you understand that our strategy is successful in meeting the challenges of the market today. We will be in New York on March 6th at the stock exchange and hope you'll join us for our annual review of our business both the three year and five year look going forward. Presumably your takeaway say at least what we tried to communicate to you is that our balance sheet remains strong. As we just discussed with Michael and with the rest of you, our capacity for growth exists beyond the 9% rate base that we've talked about and the completion of the projects of Power that are going to add 1,800 megawatts of efficient combined-cycle. We will give you a little bit more information on the range of utility opportunities and what our ongoing efforts will be to position Power's portfolio for maximum returns. In the meantime, as much as it pains me to say, please enjoy this wonderful weather. And hopefully, we'll see it bundles up in Manhattan in about seven-day. Take care, everyone.

Ladies and gentlemen, that does conclude your conference call for today. Thank you for your participation. You may now disconnect.