PSEG-9/30/2013-Q3


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 September 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 October 15, 2013, Public Service Enterprise Group Incorporated had outstanding 505,861,262 shares of its sole class of Common Stock, without par value.
As of October 15, 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
 
 
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 communication about us 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 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 obtain sufficient 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, such as distributed generation and microgrids, and resultant changes in customer usage patterns, including energy efficiency 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





PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
OPERATING REVENUES
$
2,554

 
$
2,402

 
$
7,650

 
$
7,375

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
801

 
879

 
2,711

 
2,819

 
 
Operation and Maintenance
713

 
619

 
2,069

 
1,876

 
 
Depreciation and Amortization
313

 
286

 
886

 
797

 
 
Taxes Other Than Income Taxes
15

 
24

 
50

 
73

 
 
Total Operating Expenses
1,842

 
1,808

 
5,716

 
5,565

 
 
OPERATING INCOME
712

 
594

 
1,934

 
1,810

 
 
Income from Equity Method Investments
4

 
7

 
9

 
9

 
 
Other Income
59

 
121

 
172

 
216

 
 
Other Deductions
(12
)
 
(26
)
 
(54
)
 
(61
)
 
 
Other-Than-Temporary Impairments
(3
)
 
(2
)
 
(7
)
 
(14
)
 
 
Interest Expense
(100
)
 
(106
)
 
(303
)
 
(310
)
 
 
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
660

 
588

 
1,751

 
1,650

 
 
Income Tax Expense
(270
)
 
(241
)
 
(708
)
 
(599
)
 
 
NET INCOME
$
390

 
$
347

 
$
1,043

 
$
1,051

 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (THOUSANDS):
 
 
 
 
 
 
 
 
 
BASIC
505,858

 
505,914

 
505,900

 
505,942

 
 
DILUTED
507,694

 
507,111

 
507,433

 
507,037

 
 
EARNINGS PER SHARE:
 
 
 
 
 
 
 
 
 
BASIC
 
 
 
 
 
 
 
 
 
INCOME FROM CONTINUING OPERATIONS
$
0.77

 
$
0.69

 
$
2.06

 
$
2.08

 
 
NET INCOME
$
0.77

 
$
0.69

 
$
2.06

 
$
2.08

 
 
DILUTED
 
 
 
 
 
 
 
 
 
INCOME FROM CONTINUING OPERATIONS
$
0.77

 
$
0.68

 
$
2.06

 
$
2.07

 
 
NET INCOME
$
0.77

 
$
0.68

 
$
2.06

 
$
2.07

 
 
DIVIDENDS PAID PER SHARE OF COMMON STOCK
$
0.3600

 
$
0.3550

 
$
1.0800

 
$
1.0650

 
 
 
 
 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.

1


PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
NET INCOME
$
390

 
$
347

 
$
1,043

 
$
1,051

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $(16), $5, $(27) and $(16) for the three and nine months ended 2013 and 2012, respectively
16

 
(10
)
 
27

 
12

 
 
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $1, $8, $4 and $14 for the three and nine months ended 2013 and 2012, respectively
(1
)
 
(10
)
 
(5
)
 
(20
)
 
 
Pension/Other Postretirement Benefit Costs (OPEB) adjustment, net of tax (expense) benefit of $(6), $(5), $(20) and $(16) for the three and nine months ended 2013 and 2012, respectively
9

 
8

 
28

 
23

 
 
Other Comprehensive Income (Loss), net of tax
24

 
(12
)
 
50

 
15

 
 
COMPREHENSIVE INCOME
$
414

 
$
335

 
$
1,093

 
$
1,066

 
 
 
 
 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.


2


PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
September 30,
2013
 
December 31,
2012
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
448

 
$
379

 
 
Accounts Receivable, net of allowances of $57 and $56 in 2013 and 2012, respectively
1,069

 
1,069

 
 
Tax Receivable
225

 
227

 
 
Unbilled Revenues
211

 
314

 
 
Fuel
599

 
583

 
 
Materials and Supplies, net
450

 
422

 
 
Prepayments
210

 
283

 
 
Derivative Contracts
107

 
138

 
 
Deferred Income Taxes
31

 
49

 
 
Regulatory Assets
348

 
349

 
 
Other
43

 
56

 
 
Total Current Assets
3,741

 
3,869

 
 
PROPERTY, PLANT AND EQUIPMENT
29,206

 
27,402

 
 
     Less: Accumulated Depreciation and Amortization
(8,127
)
 
(7,666
)
 
 
Net Property, Plant and Equipment
21,079

 
19,736

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
3,519

 
3,830

 
 
Regulatory Assets of Variable Interest Entities (VIEs)
532

 
713

 
 
Long-Term Investments
1,320

 
1,324

 
 
Nuclear Decommissioning Trust (NDT) Fund
1,635

 
1,540

 
 
Other Special Funds
181

 
191

 
 
Goodwill
16

 
16

 
 
Other Intangibles
52

 
34

 
 
Derivative Contracts
184

 
153

 
 
Restricted Cash of VIEs
23

 
23

 
 
Other
328

 
296

 
 
Total Noncurrent Assets
7,790

 
8,120

 
 
TOTAL ASSETS
$
32,610

 
$
31,725

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.


3


PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
September 30,
2013
 
December 31,
2012
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
775

 
$
1,026

 
 
Securitization Debt of VIEs Due Within One Year
235

 
226

 
 
Commercial Paper and Loans
—

 
263

 
 
Accounts Payable
1,024

 
1,304

 
 
Derivative Contracts
36

 
46

 
 
Accrued Interest
114

 
91

 
 
Accrued Taxes
83

 
17

 
 
Deferred Income Taxes
48

 
72

 
 
Clean Energy Program
185

 
153

 
 
Obligation to Return Cash Collateral
118

 
122

 
 
Regulatory Liabilities
171

 
67

 
 
Other
446

 
390

 
 
Total Current Liabilities
3,235

 
3,777

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
6,807

 
6,542

 
 
Regulatory Liabilities
213

 
209

 
 
Regulatory Liabilities of VIEs
11

 
10

 
 
Asset Retirement Obligations
653

 
627

 
 
Other Postretirement Benefit (OPEB) Costs
1,274

 
1,285

 
 
Accrued Pension Costs
710

 
876

 
 
Environmental Costs
431

 
537

 
 
Derivative Contracts
163

 
122

 
 
Long-Term Accrued Taxes
183

 
164

 
 
Other
115

 
108

 
 
Total Noncurrent Liabilities
10,560

 
10,480

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 9)


 


 
 
CAPITALIZATION
 
 
 
 
 
LONG-TERM DEBT

 
 
 
 
Long-Term Debt
7,134

 
6,148

 
 
Securitization Debt of VIEs
326

 
496

 
 
Project Level, Non-Recourse Debt
16

 
43

 
 
Total Long-Term Debt
7,476

 
6,687

 
 
STOCKHOLDERS’ EQUITY

 
 
 
 
Common Stock, no par, authorized 1,000,000,000 shares; issued, 2013 and 2012—533,556,660 shares
4,852

 
4,833

 
 
Treasury Stock, at cost, 2013— 27,695,398 shares; 2012— 27,664,188 shares
(615
)
 
(607
)
 
 
Retained Earnings
7,439

 
6,942

 
 
Accumulated Other Comprehensive Loss
(338
)
 
(388
)
 
 
Total Common Stockholders’ Equity
11,338

 
10,780

 
 
Noncontrolling Interest
1

 
1

 
 
Total Stockholders’ Equity
11,339

 
10,781

 
 
Total Capitalization
18,815

 
17,468

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
32,610

 
$
31,725

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.

4


PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2013
 
2012
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
1,043

 
$
1,051

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
886

 
797

 
 
Amortization of Nuclear Fuel
145

 
129

 
 
Provision for Deferred Income Taxes (Other than Leases) and ITC
242

 
221

 
 
Non-Cash Employee Benefit Plan Costs
182

 
203

 
 
Leveraged Lease Income, Adjusted for Rents Received and Deferred Taxes
(7
)
 
(81
)
 
 
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives
3

 
116

 
 
Change in Accrued Storm Costs
(87
)
 
5

 
 
Net Change in Other Regulatory Assets and Liabilities
134

 
(82
)
 
 
Cost of Removal
(66
)
 
(71
)
 
 
Net Realized (Gains) Losses and (Income) Expense from NDT Fund
(76
)
 
(107
)
 
 
Net Change in Tax Receivable
2

 
16

 
 
Net Change in Certain Current Assets and Liabilities
173

 
305

 
 
Employee Benefit Plan Funding and Related Payments
(210
)
 
(193
)
 
 
Other
71

 
2

 
 
Net Cash Provided By (Used In) Operating Activities
2,435

 
2,311

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(2,102
)
 
(1,969
)
 
 
Proceeds from Sale of Capital Leases and Investments
42

 
—

 
 
Proceeds from Sales of Available-for-Sale Securities
914

 
1,473

 
 
Investments in Available-for-Sale Securities
(922
)
 
(1,497
)
 
 
Other
(20
)
 
(58
)
 
 
Net Cash Provided By (Used In) Investing Activities
(2,088
)
 
(2,051
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Commercial Paper and Loans
(263
)
 
—

 
 
Issuance of Long-Term Debt
1,500

 
850

 
 
Redemption of Long-Term Debt
(750
)
 
(439
)
 
 
Redemption of Securitization Debt
(162
)
 
(154
)
 
 
Repayment of Non-Recourse Debt
—

 
(1
)
 
 
Cash Dividends Paid on Common Stock
(546
)
 
(538
)
 
 
Other
(57
)
 
(32
)
 
 
Net Cash Provided By (Used In) Financing Activities
(278
)
 
(314
)
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
69

 
(54
)
 
 
Cash and Cash Equivalents at Beginning of Period
379

 
834

 
 
Cash and Cash Equivalents at End of Period
$
448

 
$
780

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
222

 
$
109

 
 
Interest Paid, Net of Amounts Capitalized
$
274

 
$
280

 
 
Accrued Property, Plant and Equipment Expenditures
$
258

 
$
259

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.

5



PSEG POWER LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
OPERATING REVENUES
$
1,169

 
$
1,038

 
$
3,806

 
$
3,584

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
430

 
456

 
1,786

 
1,725

 
 
Operation and Maintenance
304

 
255

 
866

 
780

 
 
Depreciation and Amortization
66

 
60

 
195

 
175

 
 
Total Operating Expenses
800

 
771

 
2,847

 
2,680

 
 
OPERATING INCOME
369

 
267

 
959

 
904

 
 
Other Income
45

 
104

 
127

 
171

 
 
Other Deductions
(11
)
 
(20
)
 
(49
)
 
(52
)
 
 
Other-Than-Temporary Impairments
(3
)
 
(2
)
 
(7
)
 
(14
)
 
 
Interest Expense
(26
)
 
(35
)
 
(85
)
 
(97
)
 
 
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
374

 
314

 
945

 
912

 
 
Income Tax Expense
(153
)
 
(133
)
 
(383
)
 
(374
)
 
 
EARNINGS AVAILABLE TO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
$
221

 
$
181

 
$
562

 
$
538

 
 
 
 
 
 
 


 
 
 

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
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
NET INCOME
$
221

 
$
181

 
$
562

 
$
538

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $(18), $6, $(29) and $(16) for the three and nine months ended 2013 and 2012, respectively
17

 
(11
)
 
30

 
11

 
 
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $1, $8, $4 and $14 for the three and nine months ended 2013 and 2012, respectively
(1
)
 
(11
)
 
(6
)
 
(21
)
 
 
Pension/OPEB adjustment, net of tax (expense) benefit of $(6), $(4), $(17) and $(14) for the three and nine months ended 2013 and 2012, respectively
8

 
7

 
25

 
21

 
 
Other Comprehensive Income (Loss), net of tax
24

 
(15
)
 
49

 
11

 
 
COMPREHENSIVE INCOME
$
245

 
$
166

 
$
611

 
$
549

 
 
 
 
 
 
 
 
 
 
 

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)
 
 
 
 
 
 
 
 
 
September 30,
2013
 
December 31,
2012
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
9

 
$
7

 
 
Accounts Receivable
211

 
269

 
 
Accounts Receivable—Affiliated Companies, net
34

 
340

 
 
Short-Term Loan to Affiliate
417

 
574

 
 
Fuel
599

 
583

 
 
Materials and Supplies, net
329

 
307

 
 
Derivative Contracts
72

 
118

 
 
Prepayments
16

 
17

 
 
Deferred Income Taxes
3

 
—

 
 
Other
—

 
19

 
 
Total Current Assets
1,690

 
2,234

 
 
PROPERTY, PLANT AND EQUIPMENT
10,035

 
9,697

 
 
Less: Accumulated Depreciation and Amortization
(2,973
)
 
(2,679
)
 
 
Net Property, Plant and Equipment
7,062

 
7,018

 
 
NONCURRENT ASSETS
 
 
 
 
 
Nuclear Decommissioning Trust (NDT) Fund
1,635

 
1,540

 
 
Goodwill
16

 
16

 
 
Other Intangibles
52

 
34

 
 
Other Special Funds
38

 
36

 
 
Derivative Contracts
89

 
49

 
 
Other
139

 
105

 
 
Total Noncurrent Assets
1,969

 
1,780

 
 
TOTAL ASSETS
$
10,721

 
$
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)

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

 
$
300

 
 
Accounts Payable
404

 
498

 
 
Derivative Contracts
36

 
46

 
 
Deferred Income Taxes
—

 
16

 
 
Accrued Interest
37

 
26

 
 
Other
109

 
81

 
 
Total Current Liabilities
586

 
967

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
1,732

 
1,575

 
 
Asset Retirement Obligations
385

 
369

 
 
Other Postretirement Benefit (OPEB) Costs
230

 
221

 
 
Derivative Contracts
23

 
15

 
 
Accrued Pension Costs
225

 
272

 
 
Long-Term Accrued Taxes
50

 
50

 
 
Other
90

 
84

 
 
Total Noncurrent Liabilities
2,735

 
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
4,596

 
4,725

 
 
Accumulated Other Comprehensive Loss
(279
)
 
(328
)
 
 
Total Member’s Equity
5,359

 
5,439

 
 
TOTAL LIABILITIES AND MEMBER’S EQUITY
$
10,721

 
$
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)
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2013
 
2012
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
562

 
$
538

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
195

 
175

 
 
Amortization of Nuclear Fuel
145

 
129

 
 
Provision for Deferred Income Taxes and ITC
96

 
189

 
 
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives
3

 
116

 
 
Non-Cash Employee Benefit Plan Costs
50

 
53

 
 
Net Realized (Gains) Losses and (Income) Expense from NDT Fund
(76
)
 
(107
)
 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
Fuel, Materials and Supplies
(38
)
 
(10
)
 
 
Margin Deposit
17

 
(107
)

 
Accounts Receivable
69

 
50

 
 
Accounts Payable
(63
)
 
(31
)
 
 
Accounts Receivable/Payable-Affiliated Companies, net
306

 
193

 
 
Accrued Interest Payable
11

 
17

 
 
Other Current Assets and Liabilities
20

 
2

 
 
Employee Benefit Plan Funding and Related Payments
(45
)
 
(40
)
 
 
Other
32

 
5

 
 
Net Cash Provided By (Used In) Operating Activities
1,284

 
1,172

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(419
)
 
(493
)
 
 
Proceeds from Sales of Available-for-Sale Securities
849

 
1,295

 
 
Investments in Available-for-Sale Securities
(864
)
 
(1,315
)
 
 
Short-Term Loan—Affiliated Company, net
157

 
17

 
 
Other
(13
)
 
(10
)
 
 
Net Cash Provided By (Used In) Investing Activities
(290
)
 
(506
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Cash Dividend Paid
(690
)
 
(600
)
 
 
Redemption of Long-Term Debt
(300
)
 
(66
)
 
 
Other
(2
)
 
(7
)
 
 
Net Cash Provided By (Used In) Financing Activities
(992
)
 
(673
)
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
2

 
(7
)
 
 
Cash and Cash Equivalents at Beginning of Period
7

 
12

 
 
Cash and Cash Equivalents at End of Period
$
9

 
$
5

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
107

 
$
130

 
 
Interest Paid, Net of Amounts Capitalized
$
72

 
$
73

 
 
Accrued Property, Plant and Equipment Expenditures
$
58

 
$
84

 
 
 
 
 
 
 

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
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
OPERATING REVENUES
$
1,666

 
$
1,683

 
$
5,084

 
$
5,029

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
661

 
756

 
2,208

 
2,380

 
 
Operation and Maintenance
408

 
366

 
1,204

 
1,092

 
 
Depreciation and Amortization
236

 
216

 
658

 
594

 
 
Taxes Other Than Income Taxes
15

 
24

 
50

 
73

 
 
Total Operating Expenses
1,320

 
1,362

 
4,120

 
4,139

 
 
OPERATING INCOME
346

 
321

 
964

 
890

 
 
Other Income
13

 
16

 
41

 
39

 
 
Other Deductions
(1
)
 
(6
)
 
(3
)
 
(8
)
 
 
Interest Expense
(75
)
 
(73
)
 
(223
)
 
(220
)
 
 
INCOME BEFORE INCOME TAXES
283

 
258

 
779

 
701

 
 
Income Tax Expense
(115
)
 
(103
)
 
(311
)
 
(248
)
 
 
EARNINGS AVAILABLE TO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
$
168

 
$
155

 
$
468

 
$
453

 
 
 
 
 
 
 
 
 
 
 

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
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2013
 
2012
 
2013
 
2012
 
 
NET INCOME
$
168

 
$
155

 
$
468

 
$
453

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

 
1

 
(1
)
 
—

 
 
COMPREHENSIVE INCOME
$
168

 
$
156

 
$
467

 
$
453

 
 
 
 
 
 
 
 
 
 
 

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)

 
 
 
 
 
 
 
 
September 30,
2013
 
December 31,
2012
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
253

 
$
116

 
 
Accounts Receivable, net of allowances of $57 and $56 in 2013 and 2012, respectively
839

 
783

 
 
Accounts Receivable-Affiliated Companies, net
94

 
—

 
 
Unbilled Revenues
211

 
314

 
 
Materials and Supplies
118

 
114

 
 
Prepayments
138

 
29

 
 
Regulatory Assets
348

 
349

 
 
Derivative Contracts
19

 
5

 
 
Deferred Income Taxes
31

 
49

 
 
Other
24

 
24

 
 
Total Current Assets
2,075

 
1,783

 
 
PROPERTY, PLANT AND EQUIPMENT
18,503

 
17,006

 
 
Less: Accumulated Depreciation and Amortization
(4,916
)
 
(4,726
)
 
 
Net Property, Plant and Equipment
13,587

 
12,280

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
3,519

 
3,830

 
 
Regulatory Assets of VIEs
532

 
713

 
 
Long-Term Investments
356

 
348

 
 
Other Special Funds
41

 
61

 
 
Derivative Contracts
69

 
62

 
 
Restricted Cash of VIEs
23

 
23

 
 
Other
128

 
123

 
 
Total Noncurrent Assets
4,668

 
5,160

 
 
TOTAL ASSETS
$
20,330

 
$
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)

 
 
 
 
 
 
 
 
September 30,
2013
 
December 31,
2012
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
775

 
$
725

 
 
Securitization Debt of VIEs Due Within One Year
235

 
226

 
 
Commercial Paper and Loans
—

 
263

 
 
Accounts Payable
473

 
630

 
 
Accounts Payable—Affiliated Companies, net
—

 
73

 
 
Accrued Interest
77

 
65

 
 
Clean Energy Program
185

 
153

 
 
Deferred Income Taxes
55

 
60

 
 
Obligation to Return Cash Collateral
118

 
122

 
 
Regulatory Liabilities
171

 
67

 
 
Other
306

 
269

 
 
Total Current Liabilities
2,395

 
2,653

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and ITC
4,354

 
4,223

 
 
Other Postretirement Benefit (OPEB) Costs
989

 
1,011

 
 
Accrued Pension Costs
360

 
463

 
 
Regulatory Liabilities
213

 
209

 
 
Regulatory Liabilities of VIEs
11

 
10

 
 
Environmental Costs
380

 
486

 
 
Asset Retirement Obligations
260

 
250

 
 
Derivative Contracts
140

 
107

 
 
Long-Term Accrued Taxes
48

 
32

 
 
Other
46

 
38

 
 
Total Noncurrent Liabilities
6,801

 
6,829

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 9)


 


 
 
CAPITALIZATION
 
 
 
 
 
LONG-TERM DEBT
 
 
 
 
 
Long-Term Debt
5,066

 
4,070

 
 
Securitization Debt of VIEs
326

 
496

 
 
Total Long-Term Debt
5,392

 
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
3,343

 
2,875

 
 
Accumulated Other Comprehensive Income
1

 
2

 
 
Total Stockholder’s Equity
5,742

 
5,175

 
 
Total Capitalization
11,134

 
9,741

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
20,330

 
$
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)

 
 
 
 
 
 
 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2013
 
2012
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
  Net Income
$
468

 
$
453

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
658

 
594

 
 
Provision for Deferred Income Taxes and ITC
153

 
131

 
 
Non-Cash Employee Benefit Plan Costs
117

 
134

 
 
Cost of Removal
(66
)
 
(71
)
 
 
Change in Accrued Storm Costs
(87
)
 
5

 
 
Net Change in Other Regulatory Assets and Liabilities
134

 
(82
)
 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
Accounts Receivable and Unbilled Revenues
48

 
97

 
 
Materials and Supplies
(4
)
 
(11
)
 
 
Prepayments
(109
)
 
(28
)
 
 
Net Change in Tax Receivable
—

 
16

 
 
Accounts Payable
3

 
(20
)
 
 
Accounts Receivable/Payable-Affiliated Companies, net
(171
)
 
(41
)
 
 
Other Current Assets and Liabilities
29

 
22

 
 
Employee Benefit Plan Funding and Related Payments
(147
)
 
(137
)
 
 
Other
23

 
(21
)
 
 
Net Cash Provided By (Used In) Operating Activities
1,049

 
1,041

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(1,628
)
 
(1,369
)
 
 
Proceeds from Sales of Available-for-Sale Securities
35

 
73

 
 
Investments in Available-for-Sale Securities
(16
)
 
(73
)
 
 
Solar Loan Investments
(11
)
 
(56
)
 
 
Restricted Funds
—

 
1

 
 
Net Cash Provided By (Used In) Investing Activities
(1,620
)
 
(1,424
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Short-Term Debt
(263
)
 
—

 
 
Issuance of Long-Term Debt
1,500

 
850

 
 
Redemption of Long-Term Debt
(450
)
 
(373
)
 
 
Redemption of Securitization Debt
(162
)
 
(154
)
 
 
Contributed Capital
100

 
—

 
 
Other
(17
)
 
(12
)
 
 
Net Cash Provided By (Used In) Financing Activities
708

 
311

 
 
Net Increase (Decrease) In Cash and Cash Equivalents
137

 
(72
)
 
 
Cash and Cash Equivalents at Beginning of Period
116

 
143

 
 
Cash and Cash Equivalents at End of Period
$
253

 
$
71

 
 
Supplemental Disclosure of Cash Flow Information: