PSEG-6/30/2013-Q2


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
FORM 10-Q
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED June 30, 2013
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM          TO

Commission
File Number
 
Registrants, State of Incorporation,
Address, and Telephone Number
  
I.R.S. Employer
Identification No.
001-09120
  
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(A New Jersey Corporation)
80 Park Plaza, P.O. Box 1171
Newark, New Jersey 07101-1171
973 430-7000
http://www.pseg.com
  
22-2625848
001-34232
  
PSEG POWER LLC
(A Delaware Limited Liability Company)
80 Park Plaza—T25
Newark, New Jersey 07102-4194
973 430-7000
http://www.pseg.com
  
22-3663480
001-00973
  
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(A New Jersey Corporation)
80 Park Plaza, P.O. Box 570
Newark, New Jersey 07101-0570
973 430-7000
http://www.pseg.com
  
22-1212800
 
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files). Yes ý No ¨
Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Public Service Enterprise Group Incorporated
Large accelerated filer x
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
 
 
 
 
 
PSEG Power LLC
Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller reporting company o
 
 
 
 
 
Public Service Electric and Gas Company
Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller reporting company o
Indicate by check mark whether any of the registrants is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý
As of July 16, 2013, Public Service Enterprise Group Incorporated had outstanding 505,857,262 shares of its sole class of Common Stock, without par value.
As of July 16, 2013, Public Service Electric and Gas Company had issued and outstanding 132,450,344 shares of Common Stock, without nominal or par value, all of which were privately held, beneficially and of record by Public Service Enterprise Group Incorporated.
PSEG Power LLC and Public Service Electric and Gas Company are wholly owned subsidiaries of Public Service Enterprise Group Incorporated and meet the conditions set forth in General Instruction H(1) (a) and (b) of Form 10-Q. Each is filing its Quarterly Report on Form 10-Q with the reduced disclosure format authorized by General Instruction H.





 
  
Page
FORWARD-LOOKING STATEMENTS
 
 
PART I. FINANCIAL INFORMATION
 
Item 1.
Financial Statements
 
 
 
 
 
Notes to Condensed Consolidated Financial Statements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
Item 4.
 
 
PART II. OTHER INFORMATION
 
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.
 


i



FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management. When used herein, the words “anticipate,” “intend,” “estimate,” “believe,” “expect,” “plan,” “should,” “hypothetical,” “potential,” “forecast,” “project,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in Item 1. Financial Statements—Note 9. Commitments and Contingent Liabilities, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and other factors discussed in filings we make with the United States Securities and Exchange Commission (SEC). These factors include, but are not limited to:
adverse changes in the demand for or the price of the capacity and energy that we sell into wholesale electricity markets,
adverse changes in energy industry law, policies and regulation, including market structures and a potential shift away from competitive markets toward subsidized market mechanisms, transmission planning and cost allocation rules, including rules regarding how transmission is planned and who is permitted to build transmission in the future, and reliability standards,
any inability of our transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators,
changes in federal and state environmental regulations that could increase our costs or limit our operations,
changes in nuclear regulation and/or general developments in the nuclear power industry, including various impacts from any accidents or incidents experienced at our facilities or by others in the industry, that could limit operations of our nuclear generating units,
actions or activities at one of our nuclear units located on a multi-unit site that might adversely affect our ability to continue to operate that unit or other units located at the same site,
any inability to balance our energy obligations, available supply and risks,
any deterioration in our credit quality or the credit quality of our counterparties, including in our leveraged leases,
availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs,
changes in the cost of, or interruption in the supply of, fuel and other commodities necessary to the operation of our generating units,
delays in receipt of necessary permits and approvals for our construction and development activities,
delays or unforeseen cost escalations in our construction and development activities,
any inability to achieve, or continue to sustain, our expected levels of operating performance,
any equipment failures, accidents, severe weather events or other incidents that impact our ability to provide safe and reliable service to our customers, and any inability to sufficiently obtain coverage or recover proceeds of insurance on such matters,
increases in competition in energy supply markets as well as competition for certain rate-based transmission projects,
any inability to realize anticipated tax benefits or retain tax credits,
challenges associated with recruitment and/or retention of a qualified workforce,
adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in funding requirements, and
changes in technology and customer usage patterns.
All of the forward-looking statements made in this report are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by management will be realized or even if realized, will have the expected consequences to, or effects on, us or our business prospects, financial condition or results of operations. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this report apply only as of the date of this report. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if internal estimates change, unless otherwise required by applicable securities laws.
The forward-looking statements contained in this report are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.


ii






PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
OPERATING REVENUES
$
2,310

 
$
2,098

 
$
5,096

 
$
4,973

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
755

 
761

 
1,910

 
1,940

 
 
Operation and Maintenance
646

 
629

 
1,356

 
1,257

 
 
Depreciation and Amortization
283

 
255

 
573

 
511

 
 
Taxes Other Than Income Taxes
14

 
20

 
35

 
49

 
 
Total Operating Expenses
1,698

 
1,665

 
3,874

 
3,757

 
 
OPERATING INCOME
612

 
433


1,222

 
1,216

 
 
Income from Equity Method Investments
3

 
2

 
5

 
2

 
 
Other Income
52

 
51

 
113

 
95

 
 
Other Deductions
(13
)
 
(19
)
 
(42
)
 
(35
)
 
 
Other-Than-Temporary Impairments
(2
)
 
(7
)
 
(4
)
 
(12
)
 
 
Interest Expense
(101
)
 
(103
)
 
(203
)
 
(204
)
 
 
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
551

 
357

 
1,091

 
1,062

 
 
Income Tax Expense
(218
)
 
(146
)
 
(438
)
 
(358
)
 
 
NET INCOME
$
333

 
$
211

 
$
653

 
$
704

 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (THOUSANDS):
 
 
 
 
 
 
 
 
 
BASIC
505,900

 
505,903

 
505,921

 
505,956

 
 
DILUTED
507,381

 
506,969

 
507,301

 
506,999

 
 
EARNINGS PER SHARE:
 
 
 
 
 
 
 
 
 
BASIC
 
 
 
 
 
 
 
 
 
INCOME FROM CONTINUING OPERATIONS
$
0.66

 
$
0.42

 
$
1.29

 
$
1.39

 
 
NET INCOME
$
0.66

 
$
0.42

 
$
1.29

 
$
1.39

 
 
DILUTED
 
 
 
 
 
 
 
 
 
INCOME FROM CONTINUING OPERATIONS
$
0.66

 
$
0.42

 
$
1.29

 
$
1.39

 
 
NET INCOME
$
0.66

 
$
0.42

 
$
1.29

 
$
1.39

 
 
DIVIDENDS PAID PER SHARE OF COMMON STOCK
$
0.3600

 
$
0.3550

 
$
0.7200

 
$
0.7100

 
 
 
 
 
 
 
 
 
 
 
.

See Notes to Condensed Consolidated Financial Statements.

1



PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
NET INCOME
$
333

 
$
211

 
$
653

 
$
704

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $16, $17, $(11) and $(21) for the three and six months ended 2013 and 2012, respectively
(16
)
 
(15
)
 
11

 
22

 
 
Change in Fair Value of Derivative Instruments, net of tax (expense) benefit of $0, $3, $0 and $(11) for the three and six months ended 2013 and 2012, respectively

 
(5
)
 

 
15

 
 
Reclassification Adjustments for Net Amounts included in Net Income, net of tax (expense) benefit of $1, $2, $3 and $17 for the three and six months ended 2013 and 2012, respectively

 
(5
)
 
(4
)
 
(25
)
 
 
Pension/Other Postretirement Benefit Costs (OPEB) adjustment, net of tax (expense) benefit of $(7), $(6), $(14) and $(11) for the three and six months ended 2013 and 2012, respectively
9

 
8

 
19

 
15

 
 
Other Comprehensive Income (Loss), net of tax
(7
)
 
(17
)
 
26

 
27

 
 
COMPREHENSIVE INCOME
$
326

 
$
194

 
$
679

 
$
731

 
 
 
 
 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.


2



PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
June 30, 2013
 
December 31, 2012
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
164

 
$
379

 
 
Accounts Receivable, net of allowances of $61 and $56 in 2013 and 2012, respectively
1,133

 
1,069

 
 
Tax Receivable
226

 
227

 
 
Unbilled Revenues
257

 
314

 
 
Fuel
481

 
583

 
 
Materials and Supplies, net
435

 
422

 
 
Prepayments
312

 
283

 
 
Derivative Contracts
142

 
138

 
 
Deferred Income Taxes
32

 
49

 
 
Regulatory Assets
396

 
349

 
 
Other
37

 
56

 
 
Total Current Assets
3,615

 
3,869

 
 
PROPERTY, PLANT AND EQUIPMENT
28,515

 
27,402

 
 
     Less: Accumulated Depreciation and Amortization
(7,954
)
 
(7,666
)
 
 
Net Property, Plant and Equipment
20,561

 
19,736

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
3,628

 
3,830

 
 
Regulatory Assets of Variable Interest Entities (VIEs)
603

 
713

 
 
Long-Term Investments
1,323

 
1,324

 
 
Nuclear Decommissioning Trust (NDT) Fund
1,580

 
1,540

 
 
Other Special Funds
183

 
191

 
 
Goodwill
16

 
16

 
 
Other Intangibles
41

 
34

 
 
Derivative Contracts
161

 
153

 
 
Restricted Cash of VIEs
23

 
23

 
 
Other
325

 
296

 
 
Total Noncurrent Assets
7,883

 
8,120

 
 
TOTAL ASSETS
$
32,059

 
$
31,725

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.


3



PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
June 30, 2013
 
December 31, 2012
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
576

 
$
1,026

 
 
Securitization Debt of VIEs Due Within One Year
232

 
226

 
 
Commercial Paper and Loans
157

 
263

 
 
Accounts Payable
1,046

 
1,304

 
 
Derivative Contracts
42

 
46

 
 
Accrued Interest
97

 
91

 
 
Accrued Taxes
31

 
17

 
 
Deferred Income Taxes
46

 
72

 
 
Clean Energy Program
204

 
153

 
 
Obligation to Return Cash Collateral
121

 
122

 
 
Regulatory Liabilities
120

 
67

 
 
Other
386

 
390

 
 
Total Current Liabilities
3,058

 
3,777

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
6,686

 
6,542

 
 
Regulatory Liabilities
215

 
209

 
 
Regulatory Liabilities of VIEs
11

 
10

 
 
Asset Retirement Obligations
644

 
627

 
 
Other Postretirement Benefit (OPEB) Costs
1,272

 
1,285

 
 
Accrued Pension Costs
717

 
876

 
 
Clean Energy Program
27

 

 
 
Environmental Costs
449

 
537

 
 
Derivative Contracts
158

 
122

 
 
Long-Term Accrued Taxes
167

 
164

 
 
Other
116

 
108

 
 
Total Noncurrent Liabilities
10,462

 
10,480

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 9)


 


 
 
CAPITALIZATION
 
 
 
 
 
LONG-TERM DEBT

 
 
 
 
Long-Term Debt
7,033

 
6,148

 
 
Securitization Debt of VIEs
385

 
496

 
 
Project Level, Non-Recourse Debt
24

 
43

 
 
Total Long-Term Debt
7,442

 
6,687

 
 
STOCKHOLDERS’ EQUITY

 
 
 
 
Common Stock, no par, authorized 1,000,000,000 shares; issued, 2013 and 2012—533,556,660 shares
4,842

 
4,833

 
 
Treasury Stock, at cost, 2013— 27,699,398 shares; 2012— 27,664,188 shares
(615
)
 
(607
)
 
 
Retained Earnings
7,231

 
6,942

 
 
Accumulated Other Comprehensive Loss
(362
)
 
(388
)
 
 
Total Common Stockholders’ Equity
11,096

 
10,780

 
 
Noncontrolling Interest
1

 
1

 
 
Total Stockholders’ Equity
11,097

 
10,781

 
 
Total Capitalization
18,539

 
17,468

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
32,059

 
$
31,725

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.

4



PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
2013
 
2012
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
653

 
$
704

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
573

 
511

 
 
Amortization of Nuclear Fuel
95

 
84

 
 
Provision for Deferred Income Taxes (Other than Leases) and ITC
146

 
165

 
 
Non-Cash Employee Benefit Plan Costs
122

 
134

 
 
Leveraged Lease Income, Adjusted for Rents Received and Deferred Taxes
(26
)
 
(98
)
 
 
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives
20

 
(86
)
 
 
Deferred Storm Costs
(81
)
 
5

 
 
Net Change in Other Regulatory Assets and Liabilities
62

 
(94
)
 
 
Cost of Removal
(46
)
 
(44
)
 
 
Net Realized (Gains) Losses and (Income) Expense from NDT Fund
(47
)
 
(26
)
 
 
Net Change in Certain Current Assets and Liabilities
24

 
278

 
 
Employee Benefit Plan Funding and Related Payments
(194
)
 
(175
)
 
 
Other
42

 
20

 
 
Net Cash Provided By (Used In) Operating Activities
1,343

 
1,378

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(1,406
)
 
(1,280
)
 
 
Proceeds from Sale of Capital Leases and Investments
42

 
1

 
 
Proceeds from Sales of Available-for-Sale Securities
681

 
850

 
 
Investments in Available-for-Sale Securities
(684
)
 
(867
)
 
 
Other
(12
)
 
(43
)
 
 
Net Cash Provided By (Used In) Investing Activities
(1,379
)
 
(1,339
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Commercial Paper and Loans
(106
)
 
16

 
 
Issuance of Long-Term Debt
900

 
500

 
 
Redemption of Long-Term Debt, including Securitization Debt
(556
)
 
(240
)
 
 
Cash Dividends Paid on Common Stock
(364
)
 
(359
)
 
 
Other
(53
)
 
(25
)
 
 
Net Cash Provided By (Used In) Financing Activities
(179
)
 
(108
)
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
(215
)
 
(69
)
 
 
Cash and Cash Equivalents at Beginning of Period
379

 
834

 
 
Cash and Cash Equivalents at End of Period
$
164

 
$
765

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
138

 
$
114

 
 
Interest Paid, Net of Amounts Capitalized
$
194

 
$
197

 
 
Accrued Property, Plant and Equipment Expenditures
$
222

 
$
207

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.

5




PSEG POWER LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
OPERATING REVENUES
$
1,190

 
$
985

 
$
2,637

 
$
2,546

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
496

 
447

 
1,356

 
1,269

 
 
Operation and Maintenance
280

 
284

 
562

 
525

 
 
Depreciation and Amortization
65

 
58

 
129

 
115

 
 
Total Operating Expenses
841

 
789

 
2,047

 
1,909

 
 
OPERATING INCOME
349

 
196

 
590

 
637

 
 
Other Income
35

 
37

 
82

 
67

 
 
Other Deductions
(10
)
 
(17
)
 
(38
)
 
(32
)
 
 
Other-Than-Temporary Impairments
(2
)
 
(7
)
 
(4
)
 
(12
)
 
 
Interest Expense
(29
)
 
(32
)
 
(59
)
 
(62
)
 
 
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
343

 
177

 
571

 
598

 
 
Income Tax Expense
(139
)
 
(73
)
 
(230
)
 
(241
)
 
 
EARNINGS AVAILABLE TO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
$
204

 
$
104

 
$
341

 
$
357

 
 
 
 
 
 
 


 
 
 

See disclosures regarding PSEG Power LLC included in the Notes to Condensed Consolidated Financial Statements.


6



PSEG POWER LLC
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Millions
(Unaudited)

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 

2013
 
2012
 
2013
 
2012
 
 
NET INCOME
$
204

 
$
104

 
$
341

 
$
357

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $16, $17, $(11) and $(22) for the three and six months ended 2013 and 2012, respectively
(14
)
 
(15
)
 
13

 
22

 
 
Change in Fair Value of Derivative Instruments, net of tax (expense) benefit of $0, $3, $0 and $(11) for the three and six months ended 2013 and 2012, respectively

 
(5
)
 

 
15

 
 
Reclassification Adjustments for Net Amounts included in Net Income, net of tax (expense) benefit of $1, $2, $3 and $17 for the three and six months ended 2013 and 2012, respectively
(1
)
 
(5
)
 
(5
)
 
(25
)
 
 
Pension/OPEB adjustment, net of tax (expense) benefit of $(6), $(5), $(11) and $(10) for the three and six months ended 2013 and 2012, respectively
8

 
7

 
17

 
14

 
 
Other Comprehensive Income (Loss), net of tax
(7
)
 
(18
)
 
25

 
26

 
 
COMPREHENSIVE INCOME
$
197

 
$
86

 
$
366

 
$
383

 
 
 
 
 
 
 
 
 
 
 

See disclosures regarding PSEG Power LLC included in the Notes to Condensed Consolidated Financial Statements.


7



PSEG POWER LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
June 30, 2013
 
December 31, 2012
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
4

 
$
7

 
 
Accounts Receivable
279

 
269

 
 
Accounts Receivable—Affiliated Companies, net
145

 
340

 
 
Short-Term Loan to Affiliate
395

 
574

 
 
Fuel
481

 
583

 
 
Materials and Supplies, net
312

 
307

 
 
Derivative Contracts
106

 
118

 
 
Prepayments
12

 
17

 
 
Other
12

 
19

 
 
Total Current Assets
1,746

 
2,234

 
 
PROPERTY, PLANT AND EQUIPMENT
9,811

 
9,697

 
 
Less: Accumulated Depreciation and Amortization
(2,857
)
 
(2,679
)
 
 
Net Property, Plant and Equipment
6,954

 
7,018

 
 
NONCURRENT ASSETS
 
 
 
 
 
Nuclear Decommissioning Trust (NDT) Fund
1,580

 
1,540

 
 
Goodwill
16

 
16

 
 
Other Intangibles
42

 
34

 
 
Other Special Funds
38

 
36

 
 
Derivative Contracts
58

 
49

 
 
Other
136

 
105

 
 
Total Noncurrent Assets
1,870

 
1,780

 
 
TOTAL ASSETS
$
10,570

 
$
11,032

 
 
 
 
 
 
 

See disclosures regarding PSEG Power LLC included in the Notes to Condensed Consolidated Financial Statements.


8



PSEG POWER LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
June 30, 2013
 
December 31, 2012
 
 
LIABILITIES AND MEMBER’S EQUITY
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$

 
$
300

 
 
Accounts Payable
384

 
498

 
 
Derivative Contracts
42

 
46

 
 
Deferred Income Taxes
4

 
16

 
 
Accrued Interest
27

 
26

 
 
Other
94

 
81

 
 
Total Current Liabilities
551

 
967

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
1,690

 
1,575

 
 
Asset Retirement Obligations
380

 
369

 
 
Other Postretirement Benefit (OPEB) Costs
227

 
221

 
 
Derivative Contracts
20

 
15

 
 
Accrued Pension Costs
228

 
272

 
 
Long-Term Accrued Taxes
39

 
50

 
 
Other
89

 
84

 
 
Total Noncurrent Liabilities
2,673

 
2,586

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 9)


 


 
 
LONG-TERM DEBT
 
 
 
 
 
Total Long-Term Debt
2,041

 
2,040

 
 
MEMBER’S EQUITY
 
 
 
 
 
Contributed Capital
2,028

 
2,028

 
 
Basis Adjustment
(986
)
 
(986
)
 
 
Retained Earnings
4,566

 
4,725

 
 
Accumulated Other Comprehensive Loss
(303
)
 
(328
)
 
 
Total Member’s Equity
5,305

 
5,439

 
 
TOTAL LIABILITIES AND MEMBER’S EQUITY
$
10,570

 
$
11,032

 
 
 
 
 
 
 

See disclosures regarding PSEG Power LLC included in the Notes to Condensed Consolidated Financial Statements.


9



PSEG POWER LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
2013
 
2012
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
341

 
$
357

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
129

 
115

 
 
Amortization of Nuclear Fuel
95

 
84

 
 
Provision for Deferred Income Taxes and ITC
74

 
184

 
 
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives
20

 
(86
)
 
 
Non-Cash Employee Benefit Plan Costs
33

 
34

 
 
Net Realized (Gains) Losses and (Income) Expense from NDT Fund
(47
)
 
(26
)
 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
Fuel, Materials and Supplies
97

 
94

 
 
Margin Deposit
(8
)
 
36


 
Accounts Receivable
25

 
40

 
 
Accounts Payable
(77
)
 
(14
)
 
 
Accounts Receivable/Payable-Affiliated Companies, net
197

 
73

 
 
Other Current Assets and Liabilities
(8
)
 
(6
)
 
 
Employee Benefit Plan Funding and Related Payments
(44
)
 
(39
)
 
 
Other
27

 
6

 
 
Net Cash Provided By (Used In) Operating Activities
854

 
852

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(222
)
 
(344
)
 
 
Proceeds from Sales of Available-for-Sale Securities
625

 
677

 
 
Investments in Available-for-Sale Securities
(637
)
 
(692
)
 
 
Short-Term Loan—Affiliated Company, net
179

 
170

 
 
Net Cash Provided By (Used In) Investing Activities
(55
)
 
(189
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Cash Dividend Paid
(500
)
 
(600
)
 
 
Redemption of Long-Term Debt
(300
)
 
(66
)
 
 
Other
(2
)
 
(7
)
 
 
Net Cash Provided By (Used In) Financing Activities
(802
)
 
(673
)
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
(3
)
 
(10
)
 
 
Cash and Cash Equivalents at Beginning of Period
7

 
12

 
 
Cash and Cash Equivalents at End of Period
$
4

 
$
2

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
60

 
$
118

 
 
Interest Paid, Net of Amounts Capitalized
$
56

 
$
57

 
 
Accrued Property, Plant and Equipment Expenditures
$
33

 
$
49

 
 
 
 
 
 
 

See disclosures regarding PSEG Power LLC included in the Notes to the Condensed Consolidated Financial Statements.


10




PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
OPERATING REVENUES
$
1,423

 
$
1,407

 
$
3,418

 
$
3,346

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
580

 
622

 
1,547

 
1,624

 
 
Operation and Maintenance
369

 
350

 
796

 
726

 
 
Depreciation and Amortization
207

 
188

 
422

 
378

 
 
Taxes Other Than Income Taxes
14

 
20

 
35

 
49

 
 
Total Operating Expenses
1,170

 
1,180

 
2,800

 
2,777

 
 
OPERATING INCOME
253

 
227

 
618

 
569

 
 
Other Income
15

 
12

 
28

 
23

 
 
Other Deductions
(1
)
 
(1
)
 
(2
)
 
(2
)
 
 
Interest Expense
(75
)
 
(74
)
 
(148
)
 
(147
)
 
 
INCOME BEFORE INCOME TAXES
192

 
164

 
496

 
443

 
 
Income Tax Expense
(71
)
 
(63
)
 
(196
)
 
(145
)
 
 
EARNINGS AVAILABLE TO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
$
121

 
$
101

 
$
300

 
$
298

 
 
 
 
 
 
 
 
 
 
 

See disclosures regarding Public Service Electric and Gas Company included in the Notes to Condensed Consolidated Financial Statements.


11



PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Millions
(Unaudited)

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
NET INCOME
$
121

 
$
101

 
$
300

 
$
298

 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $0, $0, $0 and $1 for the three and six months ended 2013 and 2012, respectively
(1
)
 

 
(1
)
 
(1
)
 
 
COMPREHENSIVE INCOME
$
120

 
$
101

 
$
299

 
$
297

 
 
 
 
 
 
 
 
 
 
 

See disclosures regarding Public Service Electric and Gas Company included in the Notes to Condensed Consolidated Financial Statements.


12



PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
June 30, 2013
 
December 31, 2012
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
19

 
$
116

 
 
Accounts Receivable, net of allowances of $61 and $56 in 2013 and 2012, respectively
834

 
783

 
 
Accounts Receivable-Affiliated Companies, net
59

 

 
 
Unbilled Revenues
257

 
314

 
 
Materials and Supplies
120

 
114

 
 
Prepayments
221

 
29

 
 
Regulatory Assets
396

 
349

 
 
Derivative Contracts
21

 
5

 
 
Deferred Income Taxes
32

 
49

 
 
Other
17

 
24

 
 
Total Current Assets
1,976

 
1,783

 
 
PROPERTY, PLANT AND EQUIPMENT
18,015

 
17,006

 
 
Less: Accumulated Depreciation and Amortization
(4,851
)
 
(4,726
)
 
 
Net Property, Plant and Equipment
13,164

 
12,280

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
3,628

 
3,830

 
 
Regulatory Assets of VIEs
603

 
713

 
 
Long-Term Investments
361

 
348

 
 
Other Special Funds
42

 
61

 
 
Derivative Contracts
76

 
62

 
 
Restricted Cash of VIEs
23

 
23

 
 
Other
121

 
123

 
 
Total Noncurrent Assets
4,854

 
5,160

 
 
TOTAL ASSETS
$
19,994

 
$
19,223

 
 
 
 
 
 
 

See disclosures regarding Public Service Electric and Gas Company included in the Notes to Condensed Consolidated Financial Statements.


13



PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
June 30, 2013
 
December 31, 2012
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
575

 
$
725

 
 
Securitization Debt of VIEs Due Within One Year
232

 
226

 
 
Commercial Paper and Loans
157

 
263

 
 
Accounts Payable
510

 
630

 
 
Accounts Payable—Affiliated Companies, net

 
73

 
 
Accrued Interest
70

 
65

 
 
Clean Energy Program
204

 
153

 
 
Deferred Income Taxes
47

 
60

 
 
Obligation to Return Cash Collateral
121

 
122

 
 
Regulatory Liabilities
120

 
67

 
 
Other
257

 
269

 
 
Total Current Liabilities
2,293

 
2,653

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and ITC
4,288

 
4,223

 
 
Other Postretirement Benefit (OPEB) Costs
990

 
1,011

 
 
Accrued Pension Costs
364

 
463

 
 
Regulatory Liabilities
215

 
209

 
 
Regulatory Liabilities of VIEs
11

 
10

 
 
Clean Energy Program
27

 

 
 
Environmental Costs
398

 
486

 
 
Asset Retirement Obligations
256

 
250

 
 
Derivative Contracts
138

 
107

 
 
Long-Term Accrued Taxes
43

 
32

 
 
Other
47

 
38

 
 
Total Noncurrent Liabilities
6,777

 
6,829

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 9)


 


 
 
CAPITALIZATION
 
 
 
 
 
LONG-TERM DEBT
 
 
 
 
 
Long-Term Debt
4,965

 
4,070

 
 
Securitization Debt of VIEs
385

 
496

 
 
Total Long-Term Debt
5,350

 
4,566

 
 
STOCKHOLDER’S EQUITY
 
 
 
 
 
Common Stock; 150,000,000 shares authorized; issued and outstanding, 2013 and 2012—132,450,344 shares
892

 
892

 
 
Contributed Capital
520

 
420

 
 
Basis Adjustment
986

 
986

 
 
Retained Earnings
3,175

 
2,875

 
 
Accumulated Other Comprehensive Income
1

 
2

 
 
Total Stockholder’s Equity
5,574

 
5,175

 
 
Total Capitalization
10,924

 
9,741

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
19,994

 
$
19,223

 
 
 
 
 
 
 

See disclosures regarding Public Service Electric and Gas Company included in the Notes to Condensed Consolidated Financial Statements.


14




PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
2013
 
2012
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
  Net Income
$
300

 
$
298

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
422

 
378

 
 
Provision for Deferred Income Taxes and ITC
75

 
75

 
 
Non-Cash Employee Benefit Plan Costs
78

 
89

 
 
Cost of Removal
(46
)
 
(44
)
 
 
Deferred Storm Costs
(81
)
 
5

 
 
Net Change in Other Regulatory Assets and Liabilities
62

 
(94
)
 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
Accounts Receivable and Unbilled Revenues
6

 
108

 
 
Materials and Supplies
(6
)
 
(8
)
 
 
Prepayments
(192
)
 
(126
)
 
 
Accounts Payable
47

 
(24
)
 
 
Accounts Receivable/Payable-Affiliated Companies, net
(137
)
 
(94
)
 
 
Other Current Assets and Liabilities
8

 
13

 
 
Employee Benefit Plan Funding and Related Payments
(134
)
 
(121
)
 
 
Other
19

 
4

 
 
Net Cash Provided By (Used In) Operating Activities
421

 
459

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(1,148
)
 
(870
)
 
 
Proceeds from Sale of Available-for-Sale Securities
32

 
71

 
 
Investments in Available-for-Sale Securities
(13
)
 
(71
)
 
 
Solar Loan Investments
(15
)
 
(48
)
 
 
Restricted Funds

 
3

 
 
Net Cash Provided By (Used In) Investing Activities
(1,144
)
 
(915
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Short-Term Debt
(106
)
 
16

 
 
Issuance of Long-Term Debt
900

 
500

 
 
Redemption of Long-Term Debt
(150
)
 
(73
)
 
 
Redemption of Securitization Debt
(106
)
 
(101
)
 
 
Contributed Capital
100

 

 
 
Other
(12
)
 
(7
)
 
 
Net Cash Provided By (Used In) Financing Activities
626

 
335

 
 
Net Increase (Decrease) In Cash and Cash Equivalents
(97
)
 
(121
)
 
 
Cash and Cash Equivalents at Beginning of Period
116

 
143

 
 
Cash and Cash Equivalents at End of Period
$
19

 
$
22

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
110

 
$
4