Ladies and gentlemen, thank you for standing by. My name is Julie, and I am your event operator today. I would like to welcome everyone to today's conference, Public Service Enterprise Group Fourth Quarter 2018 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. [Operator Instructions] As a reminder, this conference is being recorded Wednesday, February 27, 2019, and will be available for telephone replay beginning at 1 pm Eastern today until 11:30 pm Eastern on Thursday, March 7, 2019. 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 Carlotta Chan. Please go ahead.

Thank you, Julie. Good morning, and thank you for participating in our earnings call. We released our fourth quarter and full year 2018 earnings results earlier today. The earnings release attachments and slides detailing operating results by company are posted on the IR website at investor.pseg.com, and our 10-K will be filed later today. The earnings release and other materials we will discuss during today's call contain forward-looking statements and estimates that are subject to various risks and uncertainties. We also discuss non-GAAP operating earnings and non-GAAP adjusted EBITDA, which differ from net income as reported in accordance with generally accepted accounting principles in the United States. Reconciliations of our non-GAAP financial measures and a disclaimer regarding forward-looking statements are posted on our IR website and are included in today's slides and in our earnings release. I would now like to turn the call over to Ralph Izzo, Chairman, President and Chief Executive Officer of Public Service Enterprise Group. Joining Ralph on today's call is Dan Cregg, Executive Vice President and Chief Financial Officer. At the conclusion of their remarks, there will be time for your questions. Ralph?

Thank you, Carlotta, and thank you all for joining us today to discuss our fourth quarter and full year 2018 financial results. Earlier today, we reported non-GAAP operating earnings for the fourth quarter of $0.56 per share versus non-GAAP operating earnings of $0.57 per share in the fourth quarter of 2017. Non-GAAP operating earnings for the full year were $3.12 per share, up 6.5% over 2017's non-GAAP operating earnings of $2.93 per share. Our GAAP results for the full year of $2.83 per share includes the recognition of net unrealized losses on nuclear decommissioning trust equity securities, as a result of new accounting rules, mark to market losses and a gain related to the sale of the retired Hudson and Mercer generating units. Details on the results for the quarter and the full year can be found on slides 5 and 6. PSEG had a successful year in 2018 continuing our long term strategy of investing in PSE&G's infrastructure and growing the percentage of our earnings coming from the regulated business. We put $3 billion of capital to work at PSE&G constructively settled our first distribution base rate case in eight years, obtained approval for the next phase of our gas system modernization program which I'll refer to as the GSMP II, and filed two other significant regulatory programs. The first filing, Energy Strong 2 will enhance system reliability and resiliency, and the second filings, our Clean Energy Future, or CEF support New Jersey's clean energy goals and give every customer the opportunity to reduce their energy bill while lowering emissions. You may recall that New Jersey passed clean energy legislation in 2018, which requires utilities to implement energy efficiency measures to reduce electricity usage by 2% and natural gas usage by 0.75%. Our CEF proposals are aligned with the objectives outlined by Governor Murphy and the legislature and designed to advance energy efficiency, electric vehicles and energy storage as well as smart electric meters or otherwise referred to as advanced metering infrastructure, AMI to a broad group of customers in the least cost manner. We consider our proposal to be the best way to achieve the state's energy efficiency savings targets, as it accomplishes this while limiting the growth in the customer bill and providing fairer broad based access to such benefits. Speaking of the customer bill, PSE&G was the first utility in New Jersey to return the benefits of lower corporate income tax rates, which totaled approximately $262 million in customer savings last year. In addition, in 2019, we have implemented the return of $380 million of additional tax reform savings related to accumulated deferred income taxes that will further moderate customer bills going forward. We also made major progress at PSEG Power with last May's legislation that recognizes zero carbon attributes provided by New Jersey's nuclear generation and establish the zero emission certificate program. In addition, power completed and placed into service 1,300 megawatts of new highly efficient combined cycle gas units or CCGTs into our PJM fleet. With two of the three CCGTs now online, Power's expecting to complete its multiyear construction program in the middle of 2019. That will also bring an improvement in its free cash flow as powers ongoing capital needs decline. PSEG's operations performed with high reliability in 2018 when it mattered most, during critical times when service territory experienced extreme weather events that included a cyclone bomb, Apollo Vortex [ph], multiple northeasters, an extended summer heat wave and the wettest year on record. In addition to safely operating our T&D system throughout the year, our associates share their expertise and provided aid to many of our neighboring utilities. At PSEG power, our Hope Creek nuclear plant achieved its first ever breaker to breaker continuous run in April of 2018, helping deliver carbon free energy in support of the state's clean energy goals. Non-GAAP operating earnings at PSE&G grew by 10.5% to $2.10 per share in 2018, benefiting from incremental investments in transmission and distribution programs that expanded rate base by $2 billion to end the year above $19 billion for an increase of 13%. This growth is consistent with the approximate 12% compounded annual growth rate in PSE&G earnings over the past five years, and reflects the record $14.4 billion of capital invested in the reliability and resiliency of our system over the same period. Of note, PSE&G achieve this growth in earnings in rate base through constructed regulatory mechanisms that allow for contemporaneous or clause based recovery for the majority of those important infrastructure investments. Moreover PSE&G's efficiency and discipline in managing costs enable to operate without a base rate increase since 2010. And our recent distribution base rate review was completed with customer rates remaining basically flat. We will continue to drive this disciplined approach to efficient growth and earnings and rate base, along with a continued focus on the customer bill. Our investments in system reliability continue to be recognized for the value brought to our customers. For the 17th year in a row PSE&G was recognized as the most reliable electric utility in the Mid-Atlantic region, and was also awarded the 2018 outstanding Customer Reliability experience award, highlighting our outage reporting and restoration communications. Last May, the New Jersey Board of Public Utilities approved a $1.9 billion 5-year investment plan to extend PSE&G innovative Gas System Modernization Program modeled after the infrastructure investment program process established by the BPU to incentivize investments in critical utility infrastructure. PSE&G recently began this next stage of accelerated replacement of up to 875 miles of aging gas pipe, which will carry us through 2023. In the coming months, we will strive to make progress on both the Energy Strong II filing and the clean energy Future Energy Efficiency Program with anticipated decisions on both programs sometime in the third quarter. Now let me turn my attention to PSEG Power. Power's non-GAAP operating earnings for the full year of $502 million or $0.99 per share were 1% below last year. Power continues to exercise stringent cost discipline, while producing solid operating results that included higher generation from our gas and coal fired units over the prior year. As I mentioned previously PSEG power is nearing completion of its construction program related to its three new natural gas combined cycle generation stations with the last unit, Bridgeport Harbor 5 expected to be completed in the middle of this year. The Keys and Sewaren stations completed last year have operated well since coming into service. Together these three units represent 1,800 megawatts of new efficient clean gas fired capacity that will replace some older units and improve Power's competitive position. On the policy front, I want to bring you up to date on our efforts to secure recognition for the value of the environmental, fuel diversity and resiliency attributes provided by our three New Jersey nuclear units. Nuclear generation is a critical component of New Jersey's generation portfolio and it provides approximately 40% of New Jersey's electric power needs and over 90% of its carbon free electricity. The legislation created a Zero Emission Certificates program that is being administered by the BPU, which is now in the process of evaluating the three applications submitted by Power in December of 2018. If awarded the New Jersey Zero Emission Certificates, they will be set for a three year period at $0.004 per kilowatt hour, which allows for approximately $10 per megawatt hour in payments to any selected nuclear plants. The legislation requires a BPU decision by April '18. Any plant receiving as ZEC award starts accruing benefits in April with the first award period ending in May of 2022. The legislation requires nuclear plants to reapply for any subsequent three year award period. In December 2018 power submitted ZEC applications to the BPU for the Salem 1 and 2 and Hope Creek nuclear plants. These were the only applications submitted. As required the three applications included a certification in which Power confirmed that each of the Salem 1 and Salem 2 and HOPE CREEK plants will cease operations within three years absent a material financial change. While we are fully confident that each of our three ZEC applications demonstrates conclusively that the financial environmental standards required under New Jersey's legislation have been net we cannot predict what the BPU will decide. As a result we have continued contingency planning to shut down the units. In the event that any of the Salem 1 and Salem 2 or HOPE CREEK plants is not selected to receive Zero Emission Certificates starting in April of this year and don't otherwise experience a material financial change, Power will then take all necessary steps to retire all three plants at their next refueling outages. With respect to FERC's pending rule on the PGM capacity auction design an interim decision remains pending. As you know last June FERC issued an order finding that PJM's current capacity market construct is unjust and unreasonable, because it allows state supported resources to suppress capacity prices. FERC suggested alternative approaches, which included modifying its minimum offers price rule to apply to new and existing resources that receive out of market payments. FERC's other directive was to establish an option that would allow on a resource-specific basis state supported resources to be removed from the PJM capacity market along with a commensurate amount of load for a period of time. PJM submitted its recommendation for a two stage capacity auction, which would leave in state supported resources and load during the initial auction to determine capacity obligations. PJM would then remove the state supported units and rerun the auction with the remaining supply stack. The fill-in generation that replaced the removed resources sets the final capacity market clearing price for all resources. These filling resources are needed for the overall capacity obligation. They don't receive the market clearing price, but instead they get what's referred to as a lost opportunity payment, equal to the difference between their bid and the market clearing price. We believe that either PJM's two stage re-pricing proposal or the FERC's suggested resource specific FRR alternative can work with New Jersey's existing ZEC structure. Alternatively, if all of our New Jersey nuclear plants are selected to receive zero emission certificate payments in April 2019, but the financial condition of the plants is materially adversely impacted by potential changes to the capacity market construct being considered by FERC and in the absent of sufficient capacity revenues provided under program approved by the BPU in accordance with the FERC authorized capacity mechanism, then Power would still take all necessary steps to retire all of these plants. With respect to energy the PGM board Recently decided to submit a Section 206 filing to FERC covering PJM's reserve price formation proposal, also known as ORDC or Operating Reserves Demand Curve. This effort is intended to improve scarcity price formation and overhaul, operating reserve levels in energy prices to better reflect system conditions and appropriately value scarcity. PJM expects to submit the filings in the next few weeks, but the timing and ultimate implementation remain uncertain. And in fact, if implemented, any revenue recognition could be well into the future. The State of New Jersey has also made progress in its efforts to become a leader in offshore wind, following Governor Murphy's executive offer directing the BPU to move the state to order 2030 goal of 3,500 megawatts of offshore wind energy generation. An initial solicitation was established for 1100 megawatts of offshore wind. And the state received three bids just this past December. In connection with a bid submitted by Ocean Wind LLC, a subsidiary of - U.S. Offshore Wind, we agreed to provide energy management services and the potential lease of land for use in project development. We also retain an option to acquire an equity interest in the project. If --- bid is selected we would expect to make a decision regarding what, if any, investment we may have in the Ocean Wind Project in the second half of 2019. Our financial condition remains a competitive advantage and we continue to benefit from the financial flexibility that a healthy balance sheet provides. We ended 2018 with solid credit metrics that will enable us to finance our considerable capital plans over the coming five years, and provide the opportunity for growth in our dividend without the need to issue equity. Our total capital program for the years 2019, through 2023 is now $12 billion to $17 billion with over 90% of that amount directed at regulated utility growth, that improves the reliability and efficiency of our operations and supports New Jersey's Energy policy goals. Over the coming five years. PSE&G plans to invest approximately $11 billion to $16 billion on programs which are expected to provide annual rate base growth of 7% to 9%, starting from the higher 2018 year-end base of $19 billion. Our CCGT program is largely complete with just the commercial operation of the 485 megawatt bridge Port Harbor unit remaining. PSEG's continuing long term strategy to transition our business to a mostly regulated company with predictable cash flows is on track. A regulated utility PSE&G is projected to represent nearly 75% of our consolidated non-GAAP operating earnings this year. PSE&G Power, our high quality generation business will see its free cash flow improve and will continue to support our investment programs and dividend growth. So as for 2019 guidance, the conclusion of our distribution base rate case and incremental investments in transmission and distribution infrastructure, combined with a relentless approach to minimizing O&M growth have offset the expected declines in energy and capacity prices in 2019. PSE&G's business mix is expected to produce growth in 2019 consolidated non-GAAP operating earnings. So for this year we're forecasting consolidated non-GAAP operating earnings of $3.15 to $3.35 per share, which at the midpoint represents over 4% growth in earnings over 2018 results. This increase is led by a higher contribution from regulated earnings at the utility moderated by the expected decline in Powers result that reflect market prices for energy and capacity and also includes the benefit from a partial year of zero emission certificates for all three of our New Jersey nuclear plants. The Board of Directors recent decision to increase the company's common dividend by $0.08 per share to the indicative annual level of a $1.88 per share is the 15th increase in the last 16 years and reflects our financial strength, business mix and confidence in our outlook. Let me also acknowledge and thank all of our employees in both New Jersey and on Long Island for the outstanding contributions made over the past year, in utility operations and construction, in nuclear and fossil operations, and all the support organizations that enabled us to execute on a full regulatory and policy generating. I should not omit obviously our employees in Connecticut and Upstate New York as well. As we enter our 116 year PSE&G remains committed to our strategy to build long term value for our shareholders as we meet the evolving needs of our customers and the diverse communities we serve. I'll now turn the call over to Dan for more details on our operating results and we'll be available to answer your questions after his remarks.

Great, thank you, Ralph and good morning everyone. As Ralph said we reported non-GAAP operating earnings for the fourth quarter of 2018 at $0.56 per share and that's versus $0.57 per share for the fourth quarter of 2017. Our earnings in the quarter brought non-GAAP operating earnings for the full year to $3.12 per share, a 6.5% increase over 2017's non-GAAP operating earnings of $2.93 per share. Now on slide five we've provided you with a reconciliation of non-GAAP operating earnings to net income for the quarter. We also provided you the information on slide 11 regarding the contribution to non-GAAP operating earnings by business for the quarter and slide 12 and 14 contain waterfall charts that take you through the quarter-over-quarter and year-over-year net changes in non-GAAP operating earnings by major business. And I will now review each company in more details starting with PSE&G. PSE&G reported net income for the fourth quarter of 2018 of $0.47 per share compared with $0.43 per share for the fourth quarter of 2017. PSE&G's full year 2018 net income was $1.067 billion or $2.10 per share compared with net income of $973 million or $1.92 per share in 2017 which included $0.02 per share of benefits from tax reform. Non-GAAP operating earnings for the full year 2018 represented a 10.5% increase over 2017's results. As shown on slide 16 PSE&G's net income in the fourth quarter increased as a result of expanded investment in transmission and distribution infrastructure and rate relief put into effect on November 1, which more than offset an increase in distribution O&M. Both PSE&G's investment in transmission improved quarter-over-quarter net income comparisons by $0.04 per share. Gas margin improved by $0.06 per share as a result of rate relief and recovery of investment in gas distribution made under the gas system monetization program. Electric margin improved by $0.02 per share reflecting rate relief as well as higher volumes in demand. Changes to the accounting treatment of the non-service component of pension and other postretirement benefit or OPRB resulted in a favorable $0.02 per share comparison over 2017's fourth quarter. These positives were partially offset by $0.05 of higher O&M expense in the quarter associated with tree trimming and higher corrective maintenance. And in addition, depreciation expense increased by $0.02 per share reflecting higher plant balances. Taxes and other were $0.01 per share higher compared to 2017's fourth quarter. For the full-year, weather-normalized residential electric sales were 0.6% higher and weather-normalized residential gas sales rose by 3.3%. PSE&G October 2018 distribution base rate settlement provides a balance and constructive framework for regulatory stability over the next several years. PSE&G anticipates its next distribution base rate review by the end of 2023, and that's based on terms reached in the GSMP II settlement last May. This settlement recognize the inclusion of capital spending that was not recovered via clauses, deferred storm costs and an equity percentage of 54% offset by a lower return on equity of 9.6%. PSE&G also updated the transmission formula rate filing for 2019 to pass through additional tax benefits related to accumulated deferred income taxes. This latest update reduced the annual revenue requirement by approximately $155 million from the original filing amount, which called for revenue increase of $100 million. PSE&G investment of $3 billion in its transmission and distribution infrastructure in 2018 help drive a 13% growth and rate base to approximately $19 billion at year-end. Of this amount PSE&G's investment and transmission represents 45% or about $8.7 billion of the company's consolidated rate base at the end of 2018. For 2019, we forecast PSE&G's net income at $1,200 million to $1,230 million reflecting incremental investments and transmission and distribution and a full year of rate relief. Now let's turn to Power. As shown on page - slide 24, PSEG Power reported non-GAAP operating earnings of $0.11 per share, compared with non-GAAP operating earnings of $0.20 per share a year ago. The results for the quarter brought Power's full year non-GAAP operating earnings to $502 million or $0.99 per share, compared to 2017 non-GAAP operating earnings of $505 million or $1 per share. Power's non-GAAP adjusted EBITDA for the quarter and for the year amounted to $176 million and $1,059 million respectively. This compares with non-GAAP adjusted EBITDA for the fourth quarter '17 of $196 million and for the full year 2017 of $1,172 million. The earnings release as well as the earnings slides on pages 12 and 14 provides you with a detailed analysis with Power's operating earnings quarter-over-quarter and year-over-year from changes in revenue and cost. Power's results for the quarter were down from a year ago period, largely reflecting a $6 per megawatt hour decline in the average price received on energy hedges as re-contracting led to a $0.09 reduction in net income compared to last year's fourth quarter. This was partially offset by a scheduled increasing capacity prices in New England and PJM, which improved comparisons by $0.04 per share. An increase in generation output for the quarter improved comparisons by $0.03 per share. Gas operations declined by $0.02 per share as higher natural gas prices lowered commodity margin and impacted off system sales following the startup of the Atlantic Sunrise gas pipeline, and has enabled price convergence of Leidy Gas with higher prices at Henry Hub as expected. In addition to decline in Power's O&M expense improved net income comparisons by $0.01 per share and interest expense of $0.03 per share and depreciation expense of $0.02 per share both rose as a result of two new combined cycle units in service at mid-year. And higher taxes reduced net income comparisons by $0.01 over the prior year's fourth quarter as the absence of investment tax credits and other items offset the benefits of tax reform. Gross margins in the fourth quarter declined to $31 per megawatt hour from $38 per megawatt hour in the year ago quarter, largely the result of a step down in power prices from re-contracting. Power prices in the quarter improved slightly as gas prices rose in response to a long cold snap that lasted through most of November to mid-December. For the year, gross margins declined to $33 per megawatt hour from $38 per megawatt hour, reflecting the decline in average hedge prices for energy. Now let's turn to Power's operations and we provided you with some detail generation for the quarter and for the year on slides 25 and 26. Output from Power's generating facilities in the fourth quarter increased by 19% over the fourth quarter of 2017 and that's mainly from new capacity additions at Sewaren and Keys but also from higher output at our other New Jersey combined cycle units. Quarterly comparisons were also influenced by increased demand in response to the extended period of cold weather from most of the quarter. Our output of 56 terawatt-hours is at the high end of our forecast provided at the end of the third quarter which calls for full year output of 54 to 56 terawatt-hours. The nuclear fleet operated at an average capacity factor of 86.9% in the quarter resulting in a full year capacity factor of 91.4% which included as Ralph mentioned Hope Creek's first uninterrupted breaker to breaker run going into last spring's refueling. For the year nuclear production totaled 31.2 terawatt-hours. Powers gas fired combine cycle fleet operators at an average capacity factor of approximately 51% in the quarter resulting in a full year capacity factor of 52% producing 18.5 terawatt-hours of electricity for the year, up approximately 36% year-over-year. For the quarter output from the coal fleet was up 10% primarily from the Pennsylvania units which is in response to higher weather related demand. For the full year out performed the coal fleet increase 7% to 5.7 terawatt-hours as an increasing gas prices improved coal's competitiveness. An updated Power's hedge position is provided on slide 29. For 2019 with a full year of Keys and Sewaren combined cycle units at an expected half year of production from Bridgeport Harbor Five Power's forecasting an increase in output to 60 to 62 terawatt-hours. That's a 2 terawatt-hours since third quarter 2018 update. Following completion of the recent basic generation service or BGS auction in New Jersey approximately 80% to 85% of production for 2019 is hedged at an average price of $37 per megawatt hour. As a reminder our average hedge prices tend to skew higher after we layer in hedges from the BGS auction. For 2020 Power has hedged 55% to 60% of forecast production of 60 to 62 terawatt-hours at an average price of $38 per megawatt hour. And Power's also forecasting out for 2021 of 60 to 62 terawatt-hours approximately 15% to 20% of Power's effort in 2021 is hedged at an average price of $42 per megawatt hour. The forecast for the 2019 to 2021 period includes generation associated with the full year contribution of 1,300 megawatts of gas fired combined cycle capacity at Keys and Sewaren the mid 2019 commercial operation of the 485 megawatt gas fire combined cycle plant in Bridgeport and the mid-2021 retirement of the 383 megawatt Bridgeport Harbor coal fire generating station. Consistent with our hedging practice the gas fired combined cycle assets remain more open to the market in the out years and can take advantage of spot spread opportunities within our ratable hedging program. Power's 2019 non-GAAP operating earnings and non-GAAP adjusted EBITDA forecast is projected to be $395 million to $460 million and $1.030 billion to $1.130 billion respectively. The operating earnings guidance for 2019 reflects the benefits of including a partial year of ZECs and the incremental contribution from three new CCGT units, offset by lower pricing on re-contracting lower capacity revenues, higher interest expense due to the absence of capitalized interest on construction and higher taxes due to the absence of the nuclear carry back benefit we received in 2018. Now moving on to PSE&G, Enterprise and other, we reported a net loss for the fourth quarter 2018 of $5 million or $0.01 per share compared to net income of $126 million or $0.25 per share for the fourth quarter of 2017. For the full year PSE&G Enterprise and other reported net income of $6 million or a penny per share compared to net income in 2017 of a $122 million or $0.24 per share. The results for 2018 reflect the absence of the one-time non-cash earnings benefit of $147 million related to tax reform and a decrease in energy holdings deferred tax liabilities partially offset by an after tax charge related to Remay [ph] in 2017. Enterprise and other reported a non-GAAP operating earnings loss for the fourth quarter of $12 million or $0.02 per share compared to non-GAAP operating loss of $21 million or $0.04 per share in the year ago quarter. The results for the fourth quarter brought PSE&G Enterprise and other non-GAAP operating earnings for the full year to $13 million or $0.03 per share versus $20 million which also equated to $3 per share in 2017. The decline in the fourth quarter non-GAAP operating earnings/loss versus the fourth quarter 2017 primarily reflects the absence of certain tax charges at holdings taken in the fourth quarter of 2017. But were overall tax expense in 2018 as result of tax reform and higher interest expense, mostly from - mostly offset by some lower donations in 2018. For 2019, Non-GAAP operating earnings for PSEG Enterprise and other are forecasted to be $5 million to $10 million. This guidance reflects the continued PSEG Long Island results largely offset by some higher interest expense. PSEG's business mix continues to make us a beneficiary under the Tax Act of 2017 and our financial flexibility remains strong. Our net income for Power and for enterprise will realize an ongoing benefit from the decline in federal tax rate overall. However, recently updated rules proposed by the IRS could limit the amount of interest that can be deducted in a given year by non-regulated businesses. If as proposed, depreciation is excluded from the definition of adjusted taxable income in 2018 to 2019, the bonus depreciation related to the new CCGT units in service during '18 and '19 will cap the amount of deductible interest in both years. However, any amount of interest expense is disallowed can be carried forward indefinitely. And therefore, we do not expect us to have an earnings impact for us in either year. PSEG ended 2018 with $177 million of cash on hand and debt representing 52% of our consolidated capital position. Power's debt was 32% of its total capital base. And its year-end deposition was just over 2.6 times 2018 non-GAAP adjusted EBITDA. Given the strength of our balance sheet and internally generated cash flow from both businesses, we are able to fund our capital program and manage the cash impacts of tax reform without the need for additional equity. To recap, we're guiding to non-GAAP operating earnings for 2019 of $3.15 to $3.35 per share, a 4% increase over 2018 with nearly 75% of that amount being generated by PSE&G, our regulated utility. And the common dividend recently was increased $0.08 to the indicative level of $1.88 per share. This level represents a 58% payout of earnings at the midpoint of our 2019 guidance, and has contributed to a 4.9% annual rate of growth in the dividend over the last five years. And Julie, we are now ready for questions.

Certainly. Ladies and gentlemen, we will now begin the question-and-answer session for members of the financial community [Operator Instructions]. Your first question comes from a line of Julien Dumoulin-Smith from Bank of America. Please go ahead with your question. Julien Dumoulin-Smith: Hey, good morning, everyone.

Good morning, Julien. Julien Dumoulin-Smith: Hey. So, perhaps let's just start out with some of the conversations we left off on third quarter. Can you perhaps revisit just in brief a little bit more on the Leidy Hub conversation with respect to 2019 expectations, and obviously, given substantial amount of gyrations in gas basis in the quarter here. I know you reviewed to a certain extent your power guidance already. But just how does that - what is reflected with respect to basis and how have you seen that even evolve in the last few months since the last update in November? I want to make sure we put this one to better to rest as one of these lingering concerns out there from third quarter?

Sure Julien, I don't think we've seen a tremendous amount of change since the third quarter. I think we talked about some takeaway capacity coming from the Marcellus and having a little bit of a tightening between some of the gas bases. And that could have some compression on spot spreads. We also talked a little bit about some of the electric basis. And I think both of those things we will remain somewhat open to and are reflected in the guidance that we have provided. I think even as you look through the fourth quarter we saw a fairly consistent story with what we told in the third quarter. We did see some uptick during that quarter related to some incremental volume at power, largely weather related and also some O&M benefits. But I think what we talked about and expected in the third quarter, we've seen through the fourth quarter will continue to rely upon foot forward prices show us as we go through '19 and beyond. Julien Dumoulin-Smith: Got it excellent. And then turn to the other side of the house on the utility for the '19 guidance. Can you talk to a little bit about the earnings components there and obviously you provide a projected rate base, but expected return and equity ratios perhaps just in brief really the returned peace implied guidance and I are you expecting to earn your authorized is basically long weighted [ph] assets.

Yeah, Julien it's Ralph. We're just two months out of our latest rate case. So we've expect to earn 9.6% on the distribution, rate base and the 1.68% on the transmission rate base at the 54% equity level. I mean the data was pretty current and the settlement was pretty current. So this - we should hit those numbers. Julien Dumoulin-Smith: Excellent. And just a quick last one, just in terms of the offshore effort. There's been a lot of focus on this by your peers. But just with respect to the returns and risk profile of what you're contemplating to invest in. How - especially with respect to the risk, would it be different from just a straight equity investment in the project altogether? And obviously, this is preliminary?

So, again, what we've been very clear about is that we know what we know, we fortunately do know, what we don't know. And we know transmission, how to build that at a low cost and a reliable way and we understand the PJM market, but we've never built anything offshore. And we're not eager to take any significant risk on offshore construction. So that we're delighted to be part of the team in terms of them being the leading developer of offshore wind around the world. But there are certain strengths that we bring to the table that I think everybody on this call is aware of. And those areas where we're not strong, we're not going to take a big chance on. Julien Dumoulin-Smith: Excellent. I'll leave it there. Thank you very much.

Thanks John.

Your next question comes from line of Jonathan Arnold from Deutsche Bank. Please proceed with your question.

Yes. Good morning, guys.

Hi Jon.

Can I just ask, if we look at the new rate base and CapEx outlook and as it often has is a little bit of a fade in the later years? Do you have a sense rather for what the likelihood is of filling some of that in and what kind of things and what the timing for some of that materializing might be, or is it too early to be having that conversation?

Thanks, Jonathan. So what I tried to spell it is that we have two major programs in front of the BPU [ph] right now, Energy Strong II and Clean Energy Future, I think an aggregate over $6 billion. And we think every penny of that would be money well spent on behalf of customers. It's not a surprise to you that typically when we work with the professionals at the BPU we don't usually get complete agreement on every dollar being - we're spending. So but I know that zero is not the right answer as well. So those two programs will have the potential to fill in some of the later years.

Okay. And then just so your answer on - the question on offshore and knowing what you know, is it safe to assume that whatever you did would largely be within the [Multiple Speakers] please go ahead.

Yes, that would not be the case, John. And it would, it would be on our unregulated side of the business that we would do that work. To the extent that there's any transmission implication that are in the utilities service territory, then that would be undertaken by PSE&G. But any connection on land or any improvements that needs to be made as a connection point would not be in PSE&G territory. So that would be a project responsibility that we could participate in. And by the way John, I think I felt it and see your timing question. We do expect to have some resolution on these two filings in the third quarter this year.

To that, that would be incremental to the plan what you're talking about?

Yes, so what we've said is that based on currently approved programs we will achieve that 7% compound revenue rate. And based upon the way in which we propose the spend for the new programs, if they were fully funded, we would achieve the 9%. But remember those both of those programs take outside the timeframe of the 79% that we're proposing. So both the rate at which the money is spent and the amount of money will probably land you somewhere in between those two numbers.

And Jon, just as we think about it in as a way of thinking about the update, we were at 7% to 9%, but really, that's all about the increased base as we're jumping off end of '18 instead of end of '19, so end of '17 I should say. So the kind of the embedded capital you can think of that as being consistent and the update is more about updating off of this one year increase rate base.

Right.

We got the math, it goes into the same place so.

Yeah right.

Okay and can I just one other thing just on the guidance the holdings just seems to be quite a novo number than you've been talking about and you talked about life of minus interest offset but is there something else going on in there the sort of structurally shifting holdings are a little lower, and will that continue?

No, no Jon, that really all it is that that the interest expense at holdings if you think about shorter term rates coming up a little bit, you're seeing some of that effect come through at the parent level. So some of the debt at the parent being shorter term is seeing a little bit of increase in rates that's all, not nothing strong.

Okay so we should probably just see if that continues along then?

Yeah so that we've given you the guidance for '19 and we'll kind of go from there.

I have to plug our folks we're doing a great job, so there's no issue out there. All right thank you guys.

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

Hey good morning.

Good morning Paul.

So looking to your comments on the capacity market, and I guess sort of concerns about if the new group plans are excluded from the market or does not - through the adoption or something similar to the PGM proposal that you would still potentially have to look at closing the plant. Would there be no - what was the toll be in terms of perhaps doing a PPA or [indiscernible] might there be, if in fact there isn't an effort to delay, if in fact you were excluded from the market if you follow what I am saying, could you go back and - okay.

It really depends on the nature of the proposal from FERC. I mean what we rely upon is the fact that New Jersey's demonstrated a commitment to nuclear power, they have passed the legislation. So it's hard to imagine although we'll have to work out the details that FERC action which is intended to allow states to continue to choose certain resources to achieve environmental or other objectives, that mechanism would in some way preempt New Jersey's ability to pursue some options to keep the plants online. So I think we got the state saying we want these plants online, as witnessed part of legislation. FERC saying we don't want to interfere with state's abilities to do that. And now it's of course somewhere between those two broad policies statements. We'll just have to wait and see what the order from FERC looks like to figure out the metallics of how we achieve both of those objectives but I've got to believe that those objectives are sincere and we've demonstrated an ability in the past to meet policy objectives when they are articulated as clearly as those two are.

But then clearly the BPU or the State of New Jersey, I guess more generically could just simply arrange a situation where the carve load would simply to be provided capacity payment in lieu of that sort of mimicking what's the PSE&G capacity market would have provided if you were part of it, do you follow what I'm saying still.

I know and that's actually true right I just I wouldn't want to be so presumptions as to say what the BPU will give except to say that the policy objectives of the state are very clear and the BPU has a lot of professional expertise that will want to weigh in on what I think the right and creative solutions to meet that objective. And we'll certainly we're it's hard as we can to make sure the state achieves its goal.

Okay great and then on the energy efficiency and the legislation and then your move towards meeting those goals what should we think about in terms of the retail sales growth in New Jersey, going forward from here is that negative 2% what we should be thinking about or how should we be thinking on that?

No, so I think that 2% decline was off of a base year I forget the year was. So I think we saw that 0.6% increase this year. So there's going to be some netting and I don't think it should be 2% plus the incremental increase. Remember Paul I know you know this but figuring for an opinion. The utility growth is not about low drugs right our utility growth is about an aging infrastructure that is in desperate need of replacement. And then on top of that new technology is needed to achieve some of the policy objectives in particular the climate objectives of the state. So I'm not going to say that we're completely indifferent to what the load does but that's really not at the heart and soul nor the foundation of what the utilities operations or investment or financial performance will look like in the future.

Sure. Sure, as is trying to get to the better market picture. Just and then I think you might have said that that would offset sort of build increases as well. Was that an offset from the cost to achieve for the energy efficiency, or is that just sort of - I mean how should we think about customer bills? I know you guys are concerned about that and looking at on that and how should we think about that in terms of your forecast?

Yeah, so the first of all, the rate case resulted basically no net change in customer bills because of the way which, we will flow back to customers our tax benefits and we still are about 30% below for an average residential customer, though where we were in 2008. But the EE program is specifically proposed to regulate. Now they have a lot to say about when they agree with a proposal to - even those customers recording good cost control is too burdensome, right? So we've targeted low income customers, critical assets like hospitals that serve the public at large, municipal facilities, government facilities, schools, things of that nature. So we fundamentally do believe that the bill is what matters not the rate. And that there are some customers even in this reduced the bill environments that we've been operating under for the past decade that struggle. And so we've taken our best shot at it, thanks for the people, who we think we can help and I'm sure that we'll have a great conversation with the staff, over the next few months, whether they agree with that or if they'd like to see it directed differently.

Okay, great. Thanks so much.

Your next question comes from the line of Greg Gordon from Evercore ISI. Please proceed with your questions.

Thanks, good morning,

Good morning Greg.

Circling back to Julian's question, it just would appear on basic rate based math, just looking at the slides and taking that income and dividing it into rate base that the ROE would appear to be a bit higher than the authorized return. But I presume that we're missing things like earnings on AFEDC and other adjustments that you have to make to walk back down to a regulatory ROE. Is that Is that a fair summary? Because if you just do the arithmetic it seems high.

Yeah. Not seeing your exact math. But I think that's right, there's a regulatory ROE that ultimately just came out of the rate case that we had and we're moving into that now. So I think if it's a pretty clean number right now and then as we go through time we'll continue to move forward.

So Greg, every time we have this call we always sort of come out of here was like okay that makes sense we understood. That's the second question on earning ROE's always that is two questions too many, I just don't know where it's coming from. I mean, if you are looking at this room right now, you see nothing but some really confusing political faces. So we're fighting every day to control O&M to make sure we earned that allowed ROE. So I don't know where that's coming from. But no, we just came out of a rate case and we are at our allowed earnings. And somehow we have to figure out how to increase salaries 3% this year with demand growing, but 26% and still earn that allowed ROEs.

I understand, I'll figure it out. My second question.

That too could be, if you look at the rate base, you got a transmission component. Right, you got an ASP on applied service business, which is a piece of it, you got some different treatment for some of the clauses, some of the Reg E clauses. So that may be coming into play. And I think we can work through the math and bring it back to an understanding as to where we are with it.

Yeah, that I'm sure that's going to be easy to do that. The second question was on the power side. The increase in fuel costs, that sort of compressed the spark spread in Q4. Has there been some sort of a structural change in basis on, deliver gas to your plants that we need to sort of extrapolate forward or was that just demand driven, sort of surge in pricing that it will just that was more weather and demand volatility

To that, Greg, I'd say there is a little bit of both, I think what we saw in the third quarter, and we talked about some of the weather related aspects, if you look at where things were for most of November, and the first half or so of December, we also had some pretty cold weather and the back end of December, you start to run into holiday. So I think if you look at aggregate monthly or quarterly data, it may blur a little bit about the fact that when you have more of your core demand going on, you had higher weather during that period. And so that's going to pull a little bit more on that price comparison that you see in addition to some of the takeaway capacity. So I think some of it is structural that we saw within that kind of the back half of 2018 and some of that is going to be more weather and demand oriented as well.

Okay final question Ralph if FERC comes back and rules that the units specific FRRR option is in fact part of the portfolio of options that PJM needs to use going forward to run its market would you go to the New Jersey government and say you'd like to pursue the full FRRR option to remove your units from PGM or would you consider other avenues?

I think it's safe to say we would consider a bunch of different avenues at that point. Like I would not at all want to use a thing that would exclude that possibility but we could still bid it, who knows we would take a look at that and we would consider other options as well.

Okay so you wouldn't preclude pursuing the FRRR option but you'd look at the whole decision before you make the call?

That's correct.

Okay thank you Ralph take care.

Take care.

Your next question comes from the line of Steve Fleishman from Wolfe Research. Please proceed with your question.

Thanks good morning. First just a quick question on FERC. Do you have any updated trends on timing of when they might make a decision? On capacity yeah.

You know, Steve I mean our visits to FERC really has suggested they are struggling with the capacity market decision. I had the sense that fast start might happen sooner but September 30 I thought it was 2018, I don't - I have come in across the smart allocation to do that. So I have kind of stopped predicting timing on FERC as well.

Okay and then I guess Ralph high level strategic question so if you look at New Jersey is obviously moving to kind of a trend toward want a clean energy efficiency offshore wind et cetera and then if you look at New England states a lot of them are also doing the same thing so what how does that kind of are you thinking strategically more about the Power business in context of that. What does that mean?

Absolutely so the question is what's the environmental footprint of the fleet and how does it fit in that and then quite honestly given market structures that dispatch on a short run marginal cost basis, and an increased willingness on the part of policy makers to fund the capital needs of assets that then lead into that market of zero you have to pay very serious attention to it what that means to the dispatch queue and the profitability of plans in the future. So we've taken some actions as you know Steve, we've shut our ACGT units we shut Hudson, Mersa so we're going to be shutting our Bridgeport coal facility, we've got some pretty impressive heat rates on our gas plants and we are looking at some roll in offshore wind. But there's no doubt that one has to look at the Power business in the context of an increasingly clean energy future.

Okay thank you.

Your next question comes from the line of Michael Lapides from GS. Please go ahead your line is open.

Hey guys just Dan real quick question on 2019 earnings expectations at the utility at E&G the growth rate if I just take actual in '18 versus 2019 is a pretty significant growth rate at even they appears higher than your rate base growth. San you just kind of walk me through the puts and takes is there something unusual what tax is there and can you mention what tax rate that assumed or is there something unusual that happens in '18 outside of the $0.04 or $0.05 from tree trimming we ought to think about?

No I think maybe just if you put into big buckets you've got your rate base growth that that's going to be part of it but you also have a rate relief component that's going on the distribution side. So if you think about a relatively flat overall rate case settlement you've got an increment to your base rates that that's come through and then you got that being offset by some tax flow backs and that tax pieces is more balance sheet oriented taken deferred taxes and flowing to back through cash and the base rates are more of that survives. I think you're going to get a little bit of the benefit coming through there in addition to what you're seeing from an investment and an overall rate basis perspective. So I look at those two components as being some of what's driving the delta as you look year-over-year.

Got it. And Ralph. Just curious, I want to come back on the offshore wind piece? If you take an equity stake in the project. How do you shield yourself from long-term construction risk, I mean - we know the Europeans have built a lot of offshore when there's been one or - a small project built here. But there's not the same infrastructure and supply chain and some of the other kind of items that are necessary to build out lots of the first of a kind, large scale offshore wind here. How you kind of protect yourself from material construction, risk, because you never really been a company that's like to take that kind of risk.

Yes, I mean, with all due respect, Michael, we're not in a position of kind of have a negotiation here, resource through you. But I mean, at the end of the day, if you can't shield yourself, than the ultimate wisdom is don't invest, right. So we have some incredibly talented engineers and we have some equally talented contracts people and the lawyers that if they can't figure it out and the ultimate protection is we don't participate.

Got it. Thank you Ralph much appreciate it.

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

Thank you. So thanks everyone for joining us today and thank you for your continued interest and presumably confidence in us. We will be on the road next few days and next few weeks we look forward to seeing you in some of our upcoming meetings and conference appearances. And in the meantime at the risk of stating the obvious, rest assured we're going to continue to work hard and smart every day and we're going to meet the needs of customers in a safe reliable economic and environmental protective way. And we think we do that which we've been pretty good at. And our shareholders will realize a fair returns an allowed return. On the infrastructure vessels we've been making that allows us to achieve that best in class service level. So thanks everyone and we'll talk real soon. Take care.

Ladies and gentlemen, that does conclude your conference call for today. You may now disconnect. And thank you for participating.