Document

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 March 31, 2019
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
Newark, New Jersey 07102
973 430-7000

  
22-2625848
001-00973
  
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(A New Jersey Corporation)
80 Park Plaza
Newark, New Jersey 07102
973 430-7000

  
22-1212800
001-34232
  
PSEG POWER LLC
(A Delaware Limited Liability Company)
80 Park Plaza
Newark, New Jersey 07102
973 430-7000

  
22-3663480
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 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 such files). Yes ý No ¨
Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 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
Emerging growth company  o
 
 
 
 
 
 
Public Service Electric and Gas Company
Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller reporting company o
Emerging growth company  o
 
 
 
 
 
 
PSEG Power LLC
Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller reporting company o
Emerging growth company  o
If any of the registrants is an emerging growth company, indicate by check mark if such registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ 
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





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Securities registered pursuant to Section 12(b) of the Act:
Registrant
  
Title of Each Class
  
Trading Symbol(s)
 
Name of Each Exchange
On Which Registered
Public Service Enterprise
Group Incorporated
  
Common Stock without par value
  
PEG
 
New York Stock Exchange
 
 
First and Refunding Mortgage Bonds
 
 
 
 
Public Service Electric
and Gas Company
  
9  1/4% Series CC, due 2021
  
PEG21
 
New York Stock Exchange
  
8%, due 2037
  
PEG37D
 
New York Stock Exchange
 
  
5%, due 2037
  
PEG37J
 
New York Stock Exchange
 
 
 
 
 
 
 
PSEG Power LLC
  
8  5/8% Senior Notes, due 2031
  
PEG31
 
New York Stock Exchange
As of April 16, 2019, Public Service Enterprise Group Incorporated had outstanding 505,430,473 shares of its sole class of Common Stock, without par value.
As of April 16, 2019, 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.
Public Service Electric and Gas Company and PSEG Power LLC are wholly owned subsidiaries of Public Service Enterprise Group Incorporated and meet the conditions set forth in General Instruction H(1) 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
FILING FORMAT
PART I. FINANCIAL INFORMATION
 
Item 1.
Financial Statements
 
 
 
 
 
Notes to Condensed Consolidated Financial Statements
 
 
Note 1. Organization, Basis of Presentation and Significant Accounting Policies
 
Note 2. Recent Accounting Standards
 
Note 3. Revenues
 
Note 4. Early Plant Retirements
 
Note 5. Variable Interest Entity (VIE)
 
Note 6. Rate Filings
 
Note 7. Leases
 
Note 8. Financing Receivables
 
Note 9. Trust Investments
 
Note 10. Pension and Other Postretirement Benefits (OPEB)
 
Note 11. Commitments and Contingent Liabilities
 
Note 12. Debt and Credit Facilities
 
Note 13. Financial Risk Management Activities
 
Note 14. Fair Value Measurements
 
Note 15. Other Income (Deductions)
 
Note 16. Income Taxes
 
Note 17. Accumulated Other Comprehensive Income (Loss), Net of Tax
 
Note 18. Earnings Per Share (EPS) and Dividends
 
Note 19. Financial Information by Business Segment
 
Note 20. Related-Party Transactions
 
Note 21. Guarantees of Debt
Item 2.
 
Executive Overview of 2019 and Future Outlook
 
 
 
 
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. These factors include, but are not limited to:
fluctuations in wholesale power and natural gas markets, including the potential impacts on the economic viability of our generation units;
our ability to obtain adequate fuel supply;
any inability to manage our energy obligations with available supply;
PSE&G’s proposed investment programs may not be fully approved by regulators and its capital investment may be lower than planned;
increases in competition in wholesale energy and capacity markets;
changes in technology related to energy generation, distribution and consumption and customer usage patterns;
economic downturns;
third-party credit risk relating to our sale of generation output and purchase of fuel;
adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in funding requirements;
changes in state and federal legislation and regulations, and PSE&G’s ability to recover costs and earn returns on authorized investments;
the impact of any future rate proceedings;
risks associated with our ownership and operation of nuclear facilities, including regulatory risks, such as compliance with the Atomic Energy Act and trade control, environmental and other regulations, as well as financial, environmental and health and safety risks;
the impact on our New Jersey nuclear plants if such plants are not selected to participate in future Zero Emission Certificate (ZEC) programs or if adverse changes are made to the capacity market construct;
adverse changes in energy industry laws, policies and regulations, including market structures and transmission planning;
changes in federal and state environmental regulations and enforcement;
delays in receipt of, or an inability to receive, necessary licenses and permits;
adverse outcomes of any legal, regulatory or other proceeding, settlement, investigation or claim applicable to us and/or the energy industry;
changes in tax laws and regulations;
the impact of our holding company structure on our ability to meet our corporate funding needs, service debt and pay dividends;
lack of growth or slower growth in the number of customers or changes in customer demand;
any inability of Power to meet its commitments under forward sale obligations;
reliance on transmission facilities that we do not own or control and the impact on our ability to maintain adequate transmission capacity;

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any inability to successfully develop, obtain regulatory approval for, or construct generation, transmission and distribution projects;
any equipment failures, accidents, severe weather events or other incidents that impact our ability to provide safe and reliable service to our customers;
our inability to exercise control over the operations of generation facilities in which we do not maintain a controlling interest;
any inability to recover the carrying amount of our long-lived assets and leveraged leases;
any inability to maintain sufficient liquidity;
any inability to realize anticipated tax benefits or retain tax credits;
challenges associated with recruitment and/or retention of key executives and a qualified workforce;
the impact of our covenants in our debt instruments on our operations; and
the impact of acts of terrorism, cybersecurity attacks or intrusions.
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, results of operations or cash flows. 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 in light of new information or future events, 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.

FILING FORMAT
This combined Quarterly Report on Form 10-Q is separately filed by Public Service Enterprise Group Incorporated (PSEG), Public Service Electric and Gas Company (PSE&G) and PSEG Power LLC (Power). Information relating to any individual company is filed by such company on its own behalf. PSE&G and Power are each only responsible for information about itself and its subsidiaries.
Discussions throughout the document refer to PSEG and its direct operating subsidiaries, PSE&G and Power. Depending on the context of each section, references to “we,” “us,” and “our” relate to PSEG or to the specific company or companies being discussed.


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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Millions, except per share data
(Unaudited)

 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
 
OPERATING REVENUES
$
2,980

 
$
2,818

 
 
OPERATING EXPENSES
 
 
 
 
 
Energy Costs
1,124

 
952

 
 
Operation and Maintenance
756

 
754

 
 
Depreciation and Amortization
314

 
280

 
 
Total Operating Expenses
2,194

 
1,986

 
 
OPERATING INCOME
786

 
832

 
 
Income from Equity Method Investments
2

 
2

 
 
Net Gains (Losses) on Trust Investments
128

 
(22
)
 
 
Other Income (Deductions)
33

 
32

 
 
Non-Operating Pension and OPEB Credits (Costs)
33

 
19

 
 
Interest Expense
(133
)
 
(103
)
 
 
INCOME BEFORE INCOME TAXES
849

 
760

 
 
Income Tax Benefit (Expense)
(149
)
 
(202
)
 
 
NET INCOME
$
700

 
$
558

 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
BASIC
504

 
504

 
 
DILUTED
507

 
507

 
 
NET INCOME PER SHARE:
 
 
 
 
 
BASIC
$
1.39

 
$
1.11

 
 
DILUTED
$
1.38

 
$
1.10

 
 
 
 
 
 
 
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
 
 
 
March 31,
 
 
 
2019
 
2018
 
 
NET INCOME
$
700

 
$
558

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $(13) and $9 for 2019 and 2018, respectively
21

 
(14
)
 
 
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $1 and $0 for 2019 and 2018, respectively
(4
)
 

 
 
Pension/Other Postretirement Benefit Costs (OPEB) adjustment, net of tax (expense) benefit of $(4) and $(3) for 2019 and 2018, respectively

 
8

 
 
Other Comprehensive Income (Loss), net of tax
17

 
(6
)
 
 
COMPREHENSIVE INCOME
$
717

 
$
552

 
 
 
 
 
 
 
See Notes to Condensed Consolidated Financial Statements.

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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
March 31,
2019
 
December 31,
2018
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
65

 
$
177

 
 
Accounts Receivable, net of allowances of $72 in 2019 and $63 in 2018
1,454

 
1,435

 
 
Tax Receivable
149

 
242

 
 
Unbilled Revenues
188

 
240

 
 
Fuel
134

 
331

 
 
Materials and Supplies, net
584

 
571

 
 
Prepayments
112

 
94

 
 
Derivative Contracts
20

 
11

 
 
Regulatory Assets
294

 
389

 
 
Other
27

 
17

 
 
Total Current Assets
3,027

 
3,507

 
 
PROPERTY, PLANT AND EQUIPMENT
44,854

 
44,201

 
 
     Less: Accumulated Depreciation and Amortization
(10,067
)
 
(9,838
)
 
 
Net Property, Plant and Equipment
34,787

 
34,363

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
3,423

 
3,399

 
 
Operating Lease Right-of-Use Assets
253

 

 
 
Long-Term Investments
906

 
896

 
 
Nuclear Decommissioning Trust (NDT) Fund
2,049

 
1,878

 
 
Long-Term Receivable of Variable Interest Entity (VIE)
631

 
624

 
 
Rabbi Trust Fund
233

 
224

 
 
Goodwill
16

 
16

 
 
Other Intangibles
156

 
143

 
 
Derivative Contracts
4

 
1

 
 
Other
271

 
275

 
 
Total Noncurrent Assets
7,942

 
7,456

 
 
TOTAL ASSETS
$
45,756

 
$
45,326

 
 
 
 
 
 
 
See Notes to Condensed Consolidated Financial Statements.

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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
 
March 31,
2019
 
December 31,
2018
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
900

 
$
1,294

 
 
Commercial Paper and Loans
1,151

 
1,016

 
 
Accounts Payable
1,135

 
1,451

 
 
Derivative Contracts
13

 
11

 
 
Accrued Interest
158

 
110

 
 
Accrued Taxes
73

 
26

 
 
Clean Energy Program
85

 
143

 
 
Obligation to Return Cash Collateral
129

 
136

 
 
Regulatory Liabilities
320

 
311

 
 
Other
509

 
437

 
 
Total Current Liabilities
4,473

 
4,935

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
5,929

 
5,713

 
 
Regulatory Liabilities
3,148

 
3,221

 
 
Operating Leases
250

 

 
 
Asset Retirement Obligations
1,067

 
1,063

 
 
OPEB Costs
698

 
704

 
 
OPEB Costs of Servco
509

 
501

 
 
Accrued Pension Costs
778

 
791

 
 
Accrued Pension Costs of Servco
108

 
109

 
 
Environmental Costs
364

 
327

 
 
Derivative Contracts
7

 
4

 
 
Long-Term Accrued Taxes
189

 
181

 
 
Other
206

 
232

 
 
Total Noncurrent Liabilities
13,253

 
12,846

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 11)


 


 
 
CAPITALIZATION

 
 
 
 
LONG-TERM DEBT
13,216

 
13,168

 
 
STOCKHOLDERS’ EQUITY

 
 
 
 
Common Stock, no par, authorized 1,000 shares; issued, 2019 and 2018—534 shares
4,969

 
4,980

 
 
Treasury Stock, at cost, 2019 and 2018—30 shares
(839
)
 
(808
)
 
 
Retained Earnings
11,125

 
10,582

 
 
Accumulated Other Comprehensive Loss
(441
)
 
(377
)
 
 
Total Stockholders’ Equity
14,814

 
14,377

 
 
Total Capitalization
28,030

 
27,545

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
45,756

 
$
45,326

 
 
 


 
 
 
See Notes to Condensed Consolidated Financial Statements.

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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
700

 
$
558

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
314

 
280

 
 
Amortization of Nuclear Fuel
47

 
50

 
 
Emission Allowances and Renewable Energy Credit (REC) Compliance Accrual

24

 
24

 
 
Provision for Deferred Income Taxes (Other than Leases) and ITC
102

 
76

 
 
Non-Cash Employee Benefit Plan (Credits) Costs
(3
)
 
17

 
 
Leveraged Lease (Income) Loss, Adjusted for Rents Received and Deferred Taxes
(1
)
 
4

 
 
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives
(109
)
 
(119
)
 
 
Net Change in Regulatory Assets and Liabilities
69

 
(6
)
 
 
Cost of Removal
(30
)
 
(38
)
 
 
Net (Gains) Losses and (Income) Expense from NDT Fund
(137
)
 
12

 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
          Tax Receivable
77

 
6

 
 
          Accrued Taxes
26

 
125

 
 
          Margin Deposit
190

 
25

 
 
          Other Current Assets and Liabilities
(67
)
 
160

 
 
Employee Benefit Plan Funding and Related Payments
(14
)
 
(36
)
 
 
Other
30

 
2

 
 
Net Cash Provided By (Used In) Operating Activities
1,218

 
1,140

 
 
CASH FLOWS FROM INVESTING ACTIVITIES


 
 
 
 
Additions to Property, Plant and Equipment
(795
)
 
(1,053
)
 
 
Purchase of Emissions Allowances and RECs
(21
)
 
(17
)
 
 
Proceeds from Sales of Trust Investments
497

 
397

 
 
Purchases of Trust Investments
(507
)
 
(407
)
 
 
Other
10

 
7

 
 
Net Cash Provided By (Used In) Investing Activities
(816
)
 
(1,073
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Commercial Paper and Loans
135

 
52

 
 
Redemption of Long-Term Debt
(350
)
 

 
 
Cash Dividends Paid on Common Stock
(238
)
 
(227
)
 
 
Other
(52
)
 
(73
)
 
 
Net Cash Provided By (Used In) Financing Activities
(505
)
 
(248
)
 
 
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
(103
)
 
(181
)
 
 
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
199

 
315

 
 
Cash, Cash Equivalents and Restricted Cash at End of Period
$
96

 
$
134

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
(76
)
 
$
(4
)
 
 
Interest Paid, Net of Amounts Capitalized
$
91

 
$
73

 
 
Accrued Property, Plant and Equipment Expenditures
$
456

 
$
544

 
 
 
 
 
 
 
See Notes to Condensed Consolidated Financial Statements.

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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common
Stock
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
 
 
 
 
Shs.
 
Amount
 
Shs.
 
Amount
 
Total
 
 
Balance as of January 1, 2019
 
534

 
$
4,980

 
(30
)
 
$
(808
)
 
$
10,582

 
$
(377
)
 
$
14,377

 
 
Net Income
 

 

 

 

 
700

 

 
700

 
 
Cumulative Effect Adjustment to Reclassify Stranded Tax Effects Resulting from the Change in the Federal Corporate Income Tax Rate
 

 

 

 

 
81

 
(81
)
 

 
 
Other Comprehensive Income (Loss), net of tax (expense) benefit of $(16)
 

 

 

 

 

 
17

 
17

 
 
Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
 
 
717

 
 
Cash Dividends at $0.47 per share on Common Stock
 

 

 

 

 
(238
)
 

 
(238
)
 
 
Other
 

 
(11
)
 

 
(31
)
 

 

 
(42
)
 
 
Balance as of March 31, 2019
 
534

 
$
4,969

 
(30
)
 
$
(839
)
 
$
11,125

 
$
(441
)
 
$
14,814

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common
Stock
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
 
 
 
 
Shs.
 
Amount
 
Shs.
 
Amount
 
Total
 
 
Balance as of January 1, 2018
 
534

 
$
4,961

 
(29
)
 
$
(763
)
 
$
9,878

 
$
(229
)
 
$
13,847

 
 
Net Income
 

 

 

 

 
558

 

 
558

 
 
Cumulative Effect Adjustment to Reclassify Unrealized Net Gains on Equity Investments
 

 

 

 

 
176

 
(176
)
 

 
 
Other Comprehensive Income (Loss), net of tax (expense) benefit of $6
 

 

 

 

 

 
(6
)
 
(6
)
 
 
Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
 
 
552

 
 
Cash Dividends at $0.45 per share on Common Stock
 

 

 

 

 
(227
)
 

 
(227
)
 
 
Other
 

 
(15
)
 
(1
)
 
(53
)
 

 

 
(68
)
 
 
Balance as of March 31, 2018
 
534

 
$
4,946

 
(30
)
 
$
(816
)
 
$
10,385

 
$
(411
)
 
$
14,104

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See Notes to Condensed Consolidated Financial Statements.



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

 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
 
OPERATING REVENUES
$
2,032

 
$
1,845

 
 
OPERATING EXPENSES
 
 
 
 
 
Energy Costs
947

 
782

 
 
Operation and Maintenance
408

 
391

 
 
Depreciation and Amortization
212

 
190

 
 
Total Operating Expenses
1,567

 
1,363

 
 
OPERATING INCOME
465

 
482

 
 
Net Gains (Losses) on Trust Investments
1

 

 
 
Other Income (Deductions)
19

 
20

 
 
Non-Operating Pension and OPEB Credits (Costs)
30

 
15

 
 
Interest Expense
(87
)
 
(81
)
 
 
INCOME BEFORE INCOME TAXES
428

 
436

 
 
Income Tax Benefit (Expense)
(25
)
 
(117
)
 
 
NET INCOME
$
403

 
$
319

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

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


 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
 
NET INCOME
$
403

 
$
319

 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $0 for 2019 and 2018
1

 
(1
)
 
 
COMPREHENSIVE INCOME
$
404

 
$
318

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

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

 
 
 
 
 
 
 
 
March 31,
2019
 
December 31,
2018
 
 
ASSETS
 
 
CURRENT ASSETS

 
 
 
 
Cash and Cash Equivalents
$
15

 
$
39

 
 
Accounts Receivable, net of allowances of $72 in 2019 and $63 in 2018
1,047

 
879

 
 
Tax Receivable

 
20

 
 
Accounts Receivable—Affiliated Companies

 
123

 
 
Unbilled Revenues
188

 
240

 
 
Materials and Supplies, net
201

 
196

 
 
Prepayments
23

 
10

 
 
Regulatory Assets
294

 
389

 
 
Other
19

 
11

 
 
Total Current Assets
1,787

 
1,907

 
 
PROPERTY, PLANT AND EQUIPMENT
32,114

 
31,633

 
 
Less: Accumulated Depreciation and Amortization
(6,360
)
 
(6,277
)
 
 
Net Property, Plant and Equipment
25,754

 
25,356

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
3,423

 
3,399

 
 
Operating Lease Right-of-Use Assets
89

 

 
 
Long-Term Investments
275

 
270

 
 
Rabbi Trust Fund
46

 
45

 
 
Other
126

 
132

 
 
Total Noncurrent Assets
3,959

 
3,846

 
 
TOTAL ASSETS
$
31,500

 
$
31,109

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

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Table of Contents

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

 
 
 
 
 
 
 
 
March 31,
2019
 
December 31,
2018
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
500

 
$
500

 
 
Commercial Paper and Loans
364

 
272

 
 
Accounts Payable
528

 
713

 
 
Accounts Payable—Affiliated Companies
274

 
321

 
 
Accrued Interest
96

 
84

 
 
Clean Energy Program
85

 
143

 
 
Obligation to Return Cash Collateral
129

 
136

 
 
Regulatory Liabilities
320

 
311

 
 
Other
402

 
345

 
 
Total Current Liabilities
2,698

 
2,825

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and ITC
3,913

 
3,830

 
 
Regulatory Liabilities
3,148

 
3,221

 
 
Operating Leases
79

 

 
 
Asset Retirement Obligations
302

 
302

 
 
OPEB Costs
479

 
486

 
 
Accrued Pension Costs
391

 
400

 
 
Environmental Costs
304

 
268

 
 
Long-Term Accrued Taxes
69

 
69

 
 
Other
127

 
124

 
 
Total Noncurrent Liabilities
8,812

 
8,700

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 11)


 


 
 
CAPITALIZATION
 
 
 
 
 
LONG-TERM DEBT
8,686

 
8,684

 
 
STOCKHOLDER’S EQUITY
 
 
 
 
 
Common Stock; 150 shares authorized; issued and outstanding, 2019 and 2018—132 shares
892

 
892

 
 
Contributed Capital
1,095

 
1,095

 
 
Basis Adjustment
986

 
986

 
 
Retained Earnings
8,331

 
7,928

 
 
Accumulated Other Comprehensive Income (Loss)

 
(1
)
 
 
Total Stockholder’s Equity
11,304

 
10,900

 
 
Total Capitalization
19,990

 
19,584

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
31,500

 
$
31,109

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

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Table of Contents

PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
  Net Income
$
403

 
$
319

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
212

 
190

 
 
Provision for Deferred Income Taxes and ITC
(12
)
 
40

 
 
Non-Cash Employee Benefit Plan (Credits) Costs
(9
)
 
9

 
 
Cost of Removal
(30
)
 
(38
)
 
 
Net Change in Regulatory Assets and Liabilities
69

 
(6
)
 
 
Net Change in Certain Current Assets and Liabilities:

 
 
 
 
Accounts Receivable and Unbilled Revenues
(119
)
 
24

 
 
Materials and Supplies
(5
)
 
(2
)
 
 
Prepayments
3

 
22

 
 
Accounts Payable
(108
)
 
(12
)
 
 
Accounts Receivable/Payable—Affiliated Companies, net
87

 
40

 
 
Other Current Assets and Liabilities
35

 
39

 
 
Employee Benefit Plan Funding and Related Payments
(10
)
 
(33
)
 
 
Other
4

 
(15
)
 
 
Net Cash Provided By (Used In) Operating Activities
520

 
577

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(625
)
 
(750
)
 
 
Proceeds from Sales of Trust Investments
10

 
5

 
 
Purchases of Trust Investments
(9
)
 
(5
)
 
 
Solar Loan Investments
(5
)
 
(9
)
 
 
Other
2

 
2

 
 
Net Cash Provided By (Used In) Investing Activities
(627
)
 
(757
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Commercial Paper and Loans
92

 

 
 
Net Cash Provided By (Used In) Financing Activities
92

 

 
 
Net Increase (Decrease) In Cash, Cash Equivalents and Restricted Cash
(15
)
 
(180
)
 
 
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
61

 
244

 
 
Cash, Cash Equivalents and Restricted Cash at End of Period
$
46

 
$
64

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
(94
)
 
$

 
 
Interest Paid, Net of Amounts Capitalized
$
73

 
$
65

 
 
Accrued Property, Plant and Equipment Expenditures
$
273

 
$
326

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

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Table of Contents

PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Stock
 
Contributed Capital
 
Basis Adjustment
 
Retained Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
 
 
 
 
 
 
Total
 
 
Balance as of January 1, 2019
 
$
892

 
$
1,095

 
$
986

 
$
7,928

 
$
(1
)
 
$
10,900

 
 
Net Income
 

 

 

 
403

 

 
403

 
 
Other Comprehensive Income (Loss), net of tax (expense) benefit of $0
 

 

 

 

 
1

 
1

 
 
Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
404

 
 
Balance as of March 31, 2019
 
$
892

 
$
1,095

 
$
986

 
$
8,331

 
$

 
$
11,304

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common Stock
 
Contributed Capital
 
Basis Adjustment
 
Retained Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
 
 
 
 
 
 
Total
 
 
Balance as of January 1, 2018
 
$
892

 
$
1,095

 
$
986

 
$
6,861

 
$

 
$
9,834

 
 
Net Income
 

 

 

 
319

 

 
319

 
 
Other Comprehensive Income (Loss), net of tax (expense) benefit of $0
 

 

 

 

 
(1
)
 
(1
)
 
 
Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
318

 
 
Balance as of March 31, 2018
 
$
892

 
$
1,095

 
$
986

 
$
7,180

 
$
(1
)
 
$
10,152

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See disclosures regarding Public Service Electric and Gas Company included in the 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
 
 
 
March 31,
 
 
 
2019
 
2018
 
 
OPERATING REVENUES
$
1,416

 
$
1,403

 
 
OPERATING EXPENSES
 
 
 
 
 
Energy Costs
786

 
746

 
 
Operation and Maintenance
235

 
246

 
 
Depreciation and Amortization
94

 
82

 
 
Total Operating Expenses
1,115

 
1,074

 
 
OPERATING INCOME
301

 
329

 
 
Income from Equity Method Investments
2

 
2

 
 
Net Gains (Losses) on Trust Investments
126

 
(22
)
 
 
Other Income (Deductions)
13

 
11

 
 
Non-Operating Pension and OPEB Credits (Costs)
3

 
4

 
 
Interest Expense
(25
)
 
(7
)
 
 
INCOME BEFORE INCOME TAXES
420

 
317

 
 
Income Tax Benefit (Expense)
(124
)
 
(83
)
 
 
NET INCOME
$
296

 
$
234

 
 
 


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

13


Table of Contents

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

 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
 
NET INCOME
$
296

 
$
234

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $(11) and $8 for 2019 and 2018, respectively
16

 
(11
)
 
 
Pension/OPEB adjustment, net of tax (expense) benefit of $(4) and $(3) for 2019 and 2018, respectively

 
6

 
 
Other Comprehensive Income (Loss), net of tax
16

 
(5
)
 
 
COMPREHENSIVE INCOME
$
312

 
$
229

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

14


Table of Contents

PSEG POWER LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
March 31,
2019
 
December 31,
2018
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
28

 
$
22

 
 
Accounts Receivable
355

 
477

 
 
Accounts Receivable—Affiliated Companies
284

 
274

 
 
Short-Term Loan to Affiliate
87

 

 
 
Fuel
134

 
331

 
 
Materials and Supplies, net
381

 
373

 
 
Derivative Contracts
19

 
11

 
 
Prepayments
17

 
14

 
 
Other
7

 
5

 
 
Total Current Assets
1,312

 
1,507

 
 
PROPERTY, PLANT AND EQUIPMENT
12,396

 
12,224

 
 
Less: Accumulated Depreciation and Amortization
(3,520
)
 
(3,382
)
 
 
Net Property, Plant and Equipment
8,876

 
8,842

 
 
NONCURRENT ASSETS
 
 
 
 
 
Operating Lease Right-of-Use Assets
43

 

 
 
Long-Term Investments
86

 
86

 
 
NDT Fund
2,049

 
1,878

 
 
Rabbi Trust Fund
59

 
56

 
 
Goodwill
16

 
16

 
 
Other Intangibles
156

 
143

 
 
Derivative Contracts
4

 
1

 
 
Other
70

 
65

 
 
Total Noncurrent Assets
2,483

 
2,245

 
 
TOTAL ASSETS
$
12,671

 
$
12,594

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

15


Table of Contents

PSEG POWER LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
March 31,
2019
 
December 31,
2018
 
 
LIABILITIES AND MEMBER’S EQUITY
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$

 
$
44

 
 
Accounts Payable
472

 
498

 
 
Accounts Payable—Affiliated Companies
21

 
16

 
 
Short-Term Loan from Affiliate

 
193

 
 
Derivative Contracts
13

 
11

 
 
Accrued Interest
49

 
21

 
 
Other
83

 
59

 
 
Total Current Liabilities
638

 
842

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and ITC
1,755

 
1,619

 
 
Operating Leases
39

 

 
 
Asset Retirement Obligations
762

 
758

 
 
OPEB Costs
176

 
176

 
 
Accrued Pension Costs
243

 
246

 
 
Derivative Contracts
1

 
4

 
 
Long-Term Accrued Taxes
82

 
76

 
 
Other
117

 
122

 
 
Total Noncurrent Liabilities
3,175

 
3,001

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 11)


 


 
 
LONG-TERM DEBT
2,836

 
2,791

 
 
MEMBER’S EQUITY

 
 
 
 
Contributed Capital
2,214

 
2,214

 
 
Basis Adjustment
(986
)
 
(986
)
 
 
Retained Earnings
5,166

 
5,051

 
 
Accumulated Other Comprehensive Loss
(372
)
 
(319
)
 
 
Total Member’s Equity
6,022

 
5,960

 
 
TOTAL LIABILITIES AND MEMBER’S EQUITY
$
12,671

 
$
12,594

 
 
 
 
 
 
 
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 CASH FLOWS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2019
 
2018
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
296

 
$
234