PSEG-6/30/2014-Q2
Table of Contents

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, 2014
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 15, 2014, Public Service Enterprise Group Incorporated had outstanding 505,886,756 shares of its sole class of Common Stock, without par value.
As of July 15, 2014, 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.



Table of Contents

 
  
Page
 
 
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.
 


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FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this report about our and our subsidiaries' future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. When used herein, the words “anticipate,” “intend,” “estimate,” “believe,” “expect,” “plan,” “should,” “hypothetical,” “potential,” “forecast,” “project,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in filings we make with the United States Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K and available on our website: http://www.pseg.com. 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 and enforcement 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 manage our energy obligations, available supply and risks,
adverse outcomes of any legal, regulatory or other proceeding, settlement, investigation or claim applicable to us and/or the energy industry,
any deterioration in our credit quality or the credit quality of our counterparties,
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 obtain sufficient insurance coverage or recover proceeds of insurance with respect to such events,
acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses,
increases in competition in energy supply markets as well as competition for certain 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,
changes in technology, such as distributed generation and micro grids, and greater reliance on these technologies, and
changes in customer behaviors, including increases in energy efficiency, net-metering and demand response.

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

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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Millions, except per share data
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
OPERATING REVENUES
$
2,249

 
$
2,310

 
$
5,472

 
$
5,096

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
789

 
755

 
2,145

 
1,910

 
 
Operation and Maintenance
800

 
646

 
1,656

 
1,356

 
 
Depreciation and Amortization
295

 
283

 
601

 
573

 
 
Taxes Other Than Income Taxes

 
14

 

 
35

 
 
Total Operating Expenses
1,884

 
1,698

 
4,402

 
3,874

 
 
OPERATING INCOME
365

 
612

 
1,070

 
1,222

 
 
Income from Equity Method Investments
3

 
3

 
7

 
5

 
 
Other Income
62

 
52

 
110

 
113

 
 
Other Deductions
(10
)
 
(13
)
 
(22
)
 
(42
)
 
 
Other-Than-Temporary Impairments
(2
)
 
(2
)
 
(4
)
 
(4
)
 
 
Interest Expense
(94
)
 
(101
)
 
(191
)
 
(203
)
 
 
INCOME BEFORE INCOME TAXES
324

 
551

 
970

 
1,091

 
 
Income Tax Expense
(112
)
 
(218
)
 
(372
)
 
(438
)
 
 
NET INCOME
$
212

 
$
333

 
$
598

 
$
653

 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (THOUSANDS):
 
 
 
 
 
 
 
 
 
BASIC
505,875

 
505,900

 
505,976

 
505,921

 
 
DILUTED
508,056

 
507,381

 
507,949

 
507,301

 
 
NET INCOME PER SHARE:
 
 
 
 
 
 
 
 
 
BASIC
$
0.42

 
$
0.66

 
$
1.18

 
$
1.29

 
`
DILUTED
$
0.42

 
$
0.66

 
$
1.18

 
$
1.29

 
 
DIVIDENDS PAID PER SHARE OF COMMON STOCK
$
0.37

 
$
0.36

 
$
0.74

 
$
0.72

 
 
 
 
 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.

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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
NET INCOME
$
212

 
$
333

 
$
598

 
$
653

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $(9), $16, $(12) and $(11) for the three and six months ended 2014 and 2013, respectively
11

 
(16
)
 
13

 
11

 
 
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $0, $1, $(2) and $3 for the three and six months ended 2014 and 2013, respectively
1

 

 
3

 
(4
)
 
 
Pension/Other Postretirement Benefit Costs (OPEB) adjustment, net of tax (expense) benefit of $(1), $(7), $(3) and $(14) for the three and six months ended 2014 and 2013, respectively
2

 
9

 
6

 
19

 
 
Other Comprehensive Income (Loss), net of tax
14

 
(7
)
 
22

 
26

 
 
COMPREHENSIVE INCOME
$
226

 
$
326

 
$
620

 
$
679

 
 
 
 
 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.


2

Table of Contents

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
June 30,
2014
 
December 31,
2013
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
570

 
$
493

 
 
Accounts Receivable, net of allowances of $58 and $56 in 2014 and 2013, respectively
1,294

 
1,203

 
 
Tax Receivable
101

 
109

 
 
Unbilled Revenues
238

 
300

 
 
Fuel
426

 
545

 
 
Materials and Supplies, net
476

 
479

 
 
Prepayments
249

 
89

 
 
Derivative Contracts
73

 
98

 
 
Deferred Income Taxes
104

 
24

 
 
Regulatory Assets
229

 
243

 
 
Other
34

 
31

 
 
Total Current Assets
3,794

 
3,614

 
 
PROPERTY, PLANT AND EQUIPMENT
30,709

 
29,713

 
 
     Less: Accumulated Depreciation and Amortization
(8,399
)
 
(8,068
)
 
 
Net Property, Plant and Equipment
22,310

 
21,645

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
2,584

 
2,612

 
 
Regulatory Assets of Variable Interest Entities (VIEs)
355

 
476

 
 
Long-Term Investments
1,315

 
1,313

 
 
Nuclear Decommissioning Trust (NDT) Fund
1,777

 
1,701

 
 
Long-Term Receivable of VIE
409

 

 
 
Other Special Funds
657

 
613

 
 
Goodwill
16

 
16

 
 
Other Intangibles
90

 
33

 
 
Derivative Contracts
45

 
163

 
 
Restricted Cash of VIEs
24

 
24

 
 
Other
324

 
312

 
 
Total Noncurrent Assets
7,596

 
7,263

 
 
TOTAL ASSETS
$
33,700

 
$
32,522

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.


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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
June 30,
2014
 
December 31,
2013
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
844

 
$
544

 
 
Securitization Debt of VIEs Due Within One Year
251

 
237

 
 
Commercial Paper and Loans

 
60

 
 
Accounts Payable
1,104

 
1,222

 
 
Derivative Contracts
88

 
76

 
 
Accrued Interest
95

 
95

 
 
Accrued Taxes
93

 
37

 
 
Clean Energy Program
200

 
142

 
 
Obligation to Return Cash Collateral
122

 
119

 
 
Regulatory Liabilities
176

 
43

 
 
Other
490

 
488

 
 
Total Current Liabilities
3,463

 
3,063

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
7,197

 
7,107

 
 
Regulatory Liabilities
169

 
233

 
 
Regulatory Liabilities of VIEs
11

 
11

 
 
Asset Retirement Obligations
697

 
677

 
 
Other Postretirement Benefit (OPEB) Costs
1,077

 
1,095

 
 
OPEB Costs of Servco
314

 

 
 
Accrued Pension Costs
122

 
121

 
 
Accrued Pension Costs of Servco
93

 

 
 
Clean Energy Program
27

 

 
 
Environmental Costs
381

 
414

 
 
Derivative Contracts
36

 
31

 
 
Long-Term Accrued Taxes
230

 
180

 
 
Other
107

 
119

 
 
Total Noncurrent Liabilities
10,461

 
9,988

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 8)


 


 
 
CAPITALIZATION
 
 
 
 
 
LONG-TERM DEBT

 
 
 
 
Long-Term Debt
7,782

 
7,587

 
 
Securitization Debt of VIEs
134

 
259

 
 
Project Level, Non-Recourse Debt
16

 
16

 
 
Total Long-Term Debt
7,932

 
7,862

 
 
STOCKHOLDERS’ EQUITY

 
 
 
 
Common Stock, no par, authorized 1,000,000,000 shares; issued, 2014 and 2013—533,556,660 shares
4,865

 
4,861

 
 
Treasury Stock, at cost, 2014— 27,716,798 shares; 2013— 27,699,398 shares
(630
)
 
(615
)
 
 
Retained Earnings
7,681

 
7,457

 
 
Accumulated Other Comprehensive Loss
(73
)
 
(95
)
 
 
Total Common Stockholders’ Equity
11,843

 
11,608

 
 
Noncontrolling Interest
1

 
1

 
 
Total Stockholders’ Equity
11,844

 
11,609

 
 
Total Capitalization
19,776

 
19,471

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
33,700

 
$
32,522

 
 
 


 
 
 
See Notes to Condensed Consolidated Financial Statements.

4

Table of Contents

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
2014
 
2013
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
598

 
$
653

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
601

 
573

 
 
Amortization of Nuclear Fuel
98

 
95

 
 
Provision for Deferred Income Taxes (Other than Leases) and ITC
70

 
146

 
 
Non-Cash Employee Benefit Plan Costs
24

 
122

 
 
Leveraged Lease Income, Adjusted for Rents Received and Deferred Taxes
(44
)
 
(26
)
 
 
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives
297

 
20

 
 
Change in Accrued Storm Costs
(3
)
 
(81
)
 
 
Net Change in Other Regulatory Assets and Liabilities
192

 
62

 
 
Cost of Removal
(50
)
 
(46
)
 
 
Net Realized (Gains) Losses and (Income) Expense from NDT Fund
(59
)
 
(47
)
 
 
Net Change in Margin Deposit
(234
)
 
(8
)
 
 
Net Change in Certain Current Assets and Liabilities
(53
)
 
32

 
 
Employee Benefit Plan Funding and Related Payments
(50
)
 
(194
)
 
 
Other
61

 
42

 
 
Net Cash Provided By (Used In) Operating Activities
1,448

 
1,343

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(1,229
)
 
(1,406
)
 
 
Proceeds from Sales of Capital Leases and Investments
11

 
42

 
 
Proceeds from Sales of Available-for-Sale Securities
584

 
681

 
 
Investments in Available-for-Sale Securities
(599
)
 
(684
)
 
 
Other
(49
)
 
(12
)
 
 
Net Cash Provided By (Used In) Investing Activities
(1,282
)
 
(1,379
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Commercial Paper and Loans
(60
)
 
(106
)
 
 
Issuance of Long-Term Debt
500

 
900

 
 
Redemption of Long-Term Debt

 
(450
)
 
 
Redemption of Securitization Debt
(111
)
 
(106
)
 
 
Cash Dividends Paid on Common Stock
(374
)
 
(364
)
 
 
Other
(44
)
 
(53
)
 
 
Net Cash Provided By (Used In) Financing Activities
(89
)
 
(179
)
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
77

 
(215
)
 
 
Cash and Cash Equivalents at Beginning of Period
493

 
379

 
 
Cash and Cash Equivalents at End of Period
$
570

 
$
164

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
296

 
$
138

 
 
Interest Paid, Net of Amounts Capitalized
$
192

 
$
194

 
 
Accrued Property, Plant and Equipment Expenditures
$
240

 
$
222

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents


PSEG POWER LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
OPERATING REVENUES
$
986

 
$
1,193

 
$
2,686

 
$
2,644

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
520

 
495

 
1,564

 
1,355

 
 
Operation and Maintenance
327

 
280

 
629

 
563

 
 
Depreciation and Amortization
72

 
67

 
144

 
133

 
 
Total Operating Expenses
919

 
842

 
2,337

 
2,051

 
 
OPERATING INCOME
67

 
351

 
349

 
593

 
 
Income from Equity Method Investments
3

 
5

 
7

 
8

 
 
Other Income
46

 
35

 
79

 
82

 
 
Other Deductions
(9
)
 
(10
)
 
(19
)
 
(38
)
 
 
Other-Than-Temporary Impairments
(2
)
 
(2
)
 
(4
)
 
(4
)
 
 
Interest Expense
(29
)
 
(29
)
 
(61
)
 
(59
)
 
 
INCOME BEFORE INCOME TAXES
76

 
350

 
351

 
582

 
 
Income Tax Expense
(22
)
 
(140
)
 
(133
)
 
(231
)
 
 
EARNINGS AVAILABLE TO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
$
54

 
$
210

 
$
218

 
$
351

 
 
 
 
 
 
 


 
 
 

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


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Table of Contents

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

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
NET INCOME
$
54

 
$
210

 
$
218

 
$
351

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $(9), $16, $(11) and $(11) for the three and six months ended 2014 and 2013, respectively
9

 
(14
)
 
11

 
13

 
 
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $(1), $1, $(2) and $3 for the three and six months ended 2014 and 2013, respectively
2

 
(1
)
 
3

 
(5
)
 
 
Pension/OPEB adjustment, net of tax (expense) benefit of $(1), $(6), $(3) and $(11) for the three and six months ended 2014 and 2013, respectively
2

 
8

 
5

 
17

 
 
Other Comprehensive Income (Loss), net of tax
13

 
(7
)
 
19

 
25

 
 
COMPREHENSIVE INCOME
$
67

 
$
203

 
$
237

 
$
376

 
 
 
 
 
 
 
 
 
 
 

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


7

Table of Contents

PSEG POWER LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
June 30,
2014
 
December 31,
2013
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
6

 
$
6

 
 
Accounts Receivable
408

 
338

 
 
Accounts Receivable—Affiliated Companies, net
102

 
333

 
 
Short-Term Loan to Affiliate
740

 
790

 
 
Fuel
426

 
545

 
 
Materials and Supplies, net
349

 
362

 
 
Derivative Contracts
55

 
57

 
 
Prepayments
13

 
13

 
 
Deferred Income Taxes
78

 
30

 
 
Other
2

 
2

 
 
Total Current Assets
2,179

 
2,476

 
 
PROPERTY, PLANT AND EQUIPMENT
10,458

 
10,278

 
 
Less: Accumulated Depreciation and Amortization
(3,153
)
 
(2,911
)
 
 
Net Property, Plant and Equipment
7,305

 
7,367

 
 
NONCURRENT ASSETS
 
 
 
 
 
Nuclear Decommissioning Trust (NDT) Fund
1,777

 
1,701

 
 
Long-Term Investments
121

 
123

 
 
Goodwill
16

 
16

 
 
Other Intangibles
90

 
33

 
 
Other Special Funds
154

 
139

 
 
Derivative Contracts
9

 
72

 
 
Other
80

 
75

 
 
Total Noncurrent Assets
2,247

 
2,159

 
 
TOTAL ASSETS
$
11,731

 
$
12,002

 
 
 
 
 
 
 

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


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Table of Contents

PSEG POWER LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
June 30,
2014
 
December 31,
2013
 
 
LIABILITIES AND MEMBER’S EQUITY
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
44

 
$
44

 
 
Accounts Payable
461

 
516

 
 
Derivative Contracts
88

 
76

 
 
Accrued Interest
27

 
28

 
 
Other
193

 
136

 
 
Total Current Liabilities
813

 
800

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
2,046

 
2,031

 
 
Asset Retirement Obligations
411

 
400

 
 
Other Postretirement Benefit (OPEB) Costs
212

 
206

 
 
Derivative Contracts
36

 
31

 
 
Accrued Pension Costs
35

 
35

 
 
Long-Term Accrued Taxes
88

 
53

 
 
Other
72

 
91

 
 
Total Noncurrent Liabilities
2,900

 
2,847

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 8)


 


 
 
LONG-TERM DEBT
 
 
 
 
 
Total Long-Term Debt
2,498

 
2,497

 
 
MEMBER’S EQUITY
 
 
 
 
 
Contributed Capital
2,214

 
2,214

 
 
Basis Adjustment
(986
)
 
(986
)
 
 
Retained Earnings
4,336

 
4,693

 
 
Accumulated Other Comprehensive Loss
(44
)
 
(63
)
 
 
Total Member’s Equity
5,520

 
5,858

 
 
TOTAL LIABILITIES AND MEMBER’S EQUITY
$
11,731

 
$
12,002

 
 
 
 
 
 
 

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


9

Table of Contents

PSEG POWER LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
2014
 
2013
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
218

 
$
351

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
144

 
133

 
 
Amortization of Nuclear Fuel
98

 
95

 
 
Provision for Deferred Income Taxes and ITC
(22
)
 
74

 
 
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives
297

 
20

 
 
Non-Cash Employee Benefit Plan Costs
7

 
33

 
 
Net Realized (Gains) Losses and (Income) Expense from NDT Fund
(59
)
 
(47
)
 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
Fuel, Materials and Supplies
132

 
97

 
 
Margin Deposit
(234
)
 
(8
)

 
Accounts Receivable
16

 
24

 
 
Accounts Payable
(72
)
 
(91
)
 
 
Accounts Receivable/Payable—Affiliated Companies, net
229

 
213

 
 
Other Current Assets and Liabilities
13

 
(8
)
 
 
Employee Benefit Plan Funding and Related Payments
(3
)
 
(44
)
 
 
Other
50

 
24

 
 
Net Cash Provided By (Used In) Operating Activities
814

 
866

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(226
)
 
(248
)
 
 
Proceeds from Sales of Available-for-Sale Securities
563

 
625

 
 
Investments in Available-for-Sale Securities
(577
)
 
(637
)
 
 
Short-Term Loan—Affiliated Company, net
50

 
179

 
 
Other
(46
)
 

 
 
Net Cash Provided By (Used In) Investing Activities
(236
)
 
(81
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Redemption of Long-Term Debt

 
(300
)
 
 
Cash Dividend Paid
(575
)
 
(510
)
 
 
Contributed Capital

 
24

 
 
Other
(3
)
 
(2
)
 
 
Net Cash Provided By (Used In) Financing Activities
(578
)
 
(788
)
 
 
Net Increase (Decrease) in Cash and Cash Equivalents

 
(3
)
 
 
Cash and Cash Equivalents at Beginning of Period
6

 
7

 
 
Cash and Cash Equivalents at End of Period
$
6

 
$
4

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
47

 
$
60

 
 
Interest Paid, Net of Amounts Capitalized
$
62

 
$
55

 
 
Accrued Property, Plant and Equipment Expenditures
$
48

 
$
46

 
 
 
 
 
 
 

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


10

Table of Contents


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

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
OPERATING REVENUES
$
1,435

 
$
1,423

 
$
3,580

 
$
3,418

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
565

 
580

 
1,610

 
1,547

 
 
Operation and Maintenance
362

 
369

 
824

 
796

 
 
Depreciation and Amortization
217

 
207

 
444

 
422

 
 
Taxes Other Than Income Taxes

 
14

 

 
35

 
 
Total Operating Expenses
1,144

 
1,170

 
2,878

 
2,800

 
 
OPERATING INCOME
291

 
253

 
702

 
618

 
 
Other Income
14

 
15

 
28

 
28

 
 
Other Deductions
(1
)
 
(1
)
 
(1
)
 
(2
)
 
 
Interest Expense
(67
)
 
(75
)
 
(135
)
 
(148
)
 
 
INCOME BEFORE INCOME TAXES
237

 
192

 
594

 
496

 
 
Income Tax Expense
(86
)
 
(71
)
 
(229
)
 
(196
)
 
 
EARNINGS AVAILABLE TO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
$
151

 
$
121

 
$
365

 
$
300

 
 
 
 
 
 
 
 
 
 
 

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


11

Table of Contents

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

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
June 30,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
NET INCOME
$
151

 
$
121

 
$
365

 
$
300

 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $0 for the three and six months ended 2014 and 2013

 
(1
)
 

 
(1
)
 
 
COMPREHENSIVE INCOME
$
151

 
$
120

 
$
365

 
$
299

 
 
 
 
 
 
 
 
 
 
 

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


12

Table of Contents

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

 
 
 
 
 
 
 
 
June 30,
2014
 
December 31,
2013
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
257

 
$
18

 
 
Accounts Receivable, net of allowances of $58 and $56 in 2014 and 2013, respectively
846

 
832

 
 
Unbilled Revenues
238

 
300

 
 
Materials and Supplies
126

 
115

 
 
Prepayments
186

 
24

 
 
Regulatory Assets
229

 
243

 
 
Derivative Contracts
2

 
25

 
 
Deferred Income Taxes
18

 
16

 
 
Other
7

 
12

 
 
Total Current Assets
1,909

 
1,585

 
 
PROPERTY, PLANT AND EQUIPMENT
19,889

 
19,071

 
 
Less: Accumulated Depreciation and Amortization
(5,048
)
 
(4,964
)
 
 
Net Property, Plant and Equipment
14,841

 
14,107

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
2,584

 
2,612

 
 
Regulatory Assets of VIEs
355

 
476

 
 
Long-Term Investments
360

 
361

 
 
Other Special Funds
374

 
354

 
 
Derivative Contracts
20

 
69

 
 
Restricted Cash of VIEs
24

 
24

 
 
Other
146

 
132

 
 
Total Noncurrent Assets
3,863

 
4,028

 
 
TOTAL ASSETS
$
20,613

 
$
19,720

 
 
 
 
 
 
 

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


13

Table of Contents

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

 
 
 
 
 
 
 
 
June 30,
2014
 
December 31,
2013
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
800

 
$
500

 
 
Securitization Debt of VIEs Due Within One Year
251

 
237

 
 
Commercial Paper and Loans

 
60

 
 
Accounts Payable
491

 
535

 
 
Accounts Payable—Affiliated Companies, net
93

 
190

 
 
Accrued Interest
67

 
67

 
 
Clean Energy Program
200

 
142

 
 
Deferred Income Taxes

 
30

 
 
Obligation to Return Cash Collateral
122

 
119

 
 
Regulatory Liabilities
176

 
43

 
 
Other
287

 
314

 
 
Total Current Liabilities
2,487

 
2,237

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and ITC
4,522

 
4,406

 
 
Other Postretirement Benefit (OPEB) Costs
814

 
839

 
 
Accrued Pension Costs
26

 
27

 
 
Regulatory Liabilities
169

 
233

 
 
Regulatory Liabilities of VIEs
11

 
11

 
 
Clean Energy Program
27

 

 
 
Environmental Costs
330

 
363

 
 
Asset Retirement Obligations
282

 
274

 
 
Long-Term Accrued Taxes
63

 
72

 
 
Other
58

 
47

 
 
Total Noncurrent Liabilities
6,302

 
6,272

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 8)


 


 
 
CAPITALIZATION
 
 
 
 
 
LONG-TERM DEBT
 
 
 
 
 
Long-Term Debt
5,264

 
5,066

 
 
Securitization Debt of VIEs
134

 
259

 
 
Total Long-Term Debt
5,398

 
5,325

 
 
STOCKHOLDER’S EQUITY
 
 
 
 
 
Common Stock; 150,000,000 shares authorized; issued and outstanding, 2014 and 2013—132,450,344 shares
892

 
892

 
 
Contributed Capital
695

 
520

 
 
Basis Adjustment
986

 
986

 
 
Retained Earnings
3,852

 
3,487

 
 
Accumulated Other Comprehensive Income
1

 
1

 
 
Total Stockholder’s Equity
6,426

 
5,886

 
 
Total Capitalization
11,824

 
11,211

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
20,613

 
$
19,720

 
 
 
 
 
 
 

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


14

Table of Contents


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

 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
June 30,
 
 
 
2014
 
2013
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
  Net Income
$
365

 
$
300

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
444

 
422

 
 
Provision for Deferred Income Taxes and ITC
73

 
75

 
 
Non-Cash Employee Benefit Plan Costs
13

 
78

 
 
Cost of Removal
(50
)
 
(46
)
 
 
Change in Accrued Storm Costs
(3
)
 
(81
)
 
 
Net Change in Other Regulatory Assets and Liabilities
192

 
62

 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
Accounts Receivable and Unbilled Revenues
44

 
6

 
 
Materials and Supplies
(11
)
 
(6
)
 
 
Prepayments
(162
)
 
(192
)
 
 
Accounts Payable
16

 
47

 
 
Accounts Receivable/Payable—Affiliated Companies, net
(98
)
 
(137
)
 
 
Other Current Assets and Liabilities
(31
)
 
8

 
 
Employee Benefit Plan Funding and Related Payments
(44
)
 
(134
)
 
 
Other
(11
)
 
19

 
 
Net Cash Provided By (Used In) Operating Activities
737

 
421

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(996
)
 
(1,148
)
 
 
Proceeds from Sales of Available-for-Sale Securities
8

 
32

 
 
Investments in Available-for-Sale Securities
(6
)
 
(13
)
 
 
Solar Loan Investments
(1
)
 
(15
)
 
 
Net Cash Provided By (Used In) Investing Activities
(995
)
 
(1,144
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Short-Term Debt
(60
)
 
(106
)
 
 
Issuance of Long-Term Debt
500

 
900

 
 
Redemption of Long-Term Debt

 
(150
)
 
 
Redemption of Securitization Debt
(111
)
 
(106
)
 
 
Contributed Capital
175

 
100

 
 
Other
(7
)
 
(12
)
 
 
Net Cash Provided By (Used In) Financing Activities
497

 
626

 
 
Net Increase (Decrease) In Cash and Cash Equivalents
239

 
(97
)
 
 
Cash and Cash Equivalents at Beginning of Period
18

 
116

 
 
Cash and Cash Equivalents at End of Period
$
257

 
$
19

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
102

 
$
110

 
 
Interest Paid, Net of Amounts Capitalized
$
127

 
$
135

 
 
Accrued Property, Plant and Equipment Expenditures
$
192

 
$
189

 
 
 
 
 
 
 

See disclosures regarding