10-Q

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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, 2015
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
001-00973
  
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
001-34232
  
PSEG POWER LLC
(A Delaware Limited Liability Company)
80 Park Plaza
Newark, New Jersey 07102-4194
973 430-7000
http://www.pseg.com
  
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 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
 
 
 
 
 
Public Service Electric and Gas Company
Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller reporting company o
 
 
 
 
 
PSEG Power LLC
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 20, 2015, Public Service Enterprise Group Incorporated had outstanding 505,961,856 shares of its sole class of Common Stock, without par value.
As of October 20, 2015, 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) (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.



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Page
 
 
PART I. FINANCIAL INFORMATION
 
Item 1.
Financial Statements
 
 
 
 
 
Notes to Condensed Consolidated Financial Statements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
Executive Overview of 2015 and Future Outlook
 
 
 
 
Item 3.
Item 4.
 
 
PART II. OTHER INFORMATION
 
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.
 


i

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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 regulations, including market structures and transmission planning,
•
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 for 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.

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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Millions, except per share data
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2015
 
2014
 
2015
 
2014
 
 
OPERATING REVENUES
$
2,688

 
$
2,641

 
$
8,137

 
$
8,113

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
815

 
863

 
2,577

 
3,008

 
 
Operation and Maintenance
746

 
714

 
2,170

 
2,370

 
 
Depreciation and Amortization
313

 
318

 
960

 
919

 
 
Total Operating Expenses
1,874

 
1,895

 
5,707

 
6,297

 
 
OPERATING INCOME
814

 
746

 
2,430

 
1,816

 
 
Income from Equity Method Investments
3

 
3

 
10

 
10

 
 
Other Income
47

 
75

 
171

 
185

 
 
Other Deductions
(14
)
 
(9
)
 
(36
)
 
(31
)
 
 
Other-Than-Temporary Impairments
(30
)
 
(10
)
 
(45
)
 
(14
)
 
 
Interest Expense
(96
)
 
(100
)
 
(291
)
 
(291
)
 
 
INCOME BEFORE INCOME TAXES
724

 
705

 
2,239

 
1,675

 
 
Income Tax Expense
(285
)
 
(261
)
 
(869
)
 
(633
)
 
 
NET INCOME
$
439

 
$
444

 
$
1,370

 
$
1,042

 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
 
 
 
BASIC
505

 
506

 
505

 
506

 
 
DILUTED
508

 
507

 
508

 
507

 
 
NET INCOME PER SHARE:
 
 
 
 
 
 
 
 
 
BASIC
$
0.87

 
$
0.88

 
$
2.71

 
$
2.06

 
 
DILUTED
$
0.87

 
$
0.87

 
$
2.70

 
$
2.05

 
 
DIVIDENDS PAID PER SHARE OF COMMON STOCK
$
0.39

 
$
0.37

 
$
1.17

 
$
1.11

 
 
 
 
 
 
 
 
 
 
 

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
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2015
 
2014
 
2015
 
2014
 
 
NET INCOME
$
439

 
$
444

 
$
1,370

 
$
1,042

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $33, $33, $35 and $21 for the three and nine months ended 2015 and 2014, respectively
(31
)
 
(30
)
 
(32
)
 
(17
)
 
 
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $(1), $(1), $6 and $(3) for the three and nine months ended 2015 and 2014, respectively
—

 
1

 
(9
)
 
4

 
 
Pension/Other Postretirement Benefit Costs (OPEB) adjustment, net of tax (expense) benefit of $(5), $(2), $(17) and $(5) for three and nine months ended 2015 and 2014, respectively
9

 
3

 
25

 
9

 
 
Other Comprehensive Income (Loss), net of tax
(22
)
 
(26
)
 
(16
)
 
(4
)
 
 
COMPREHENSIVE INCOME
$
417

 
$
418

 
$
1,354

 
$
1,038

 
 
 
 
 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.


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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
September 30,
2015
 
December 31,
2014
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
271

 
$
402

 
 
Accounts Receivable, net of allowances of $59 and $52 in 2015 and 2014, respectively
1,199

 
1,254

 
 
Tax Receivable
5

 
211

 
 
Unbilled Revenues
203

 
284

 
 
Fuel
451

 
538

 
 
Materials and Supplies, net
472

 
484

 
 
Prepayments
180

 
108

 
 
Derivative Contracts
162

 
240

 
 
Deferred Income Taxes
23

 
11

 
 
Regulatory Assets
189

 
323

 
 
Regulatory Assets of Variable Interest Entities (VIEs)
—

 
249

 
 
Restricted Cash of VIEs
26

 
—

 
 
Other
23

 
15

 
 
Total Current Assets
3,204

 
4,119

 
 
PROPERTY, PLANT AND EQUIPMENT
34,625

 
32,196

 
 
     Less: Accumulated Depreciation and Amortization
(9,020
)
 
(8,607
)
 
 
Net Property, Plant and Equipment
25,605

 
23,589

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
3,161

 
3,192

 
 
Long-Term Investments
1,235

 
1,307

 
 
Nuclear Decommissioning Trust (NDT) Fund
1,715

 
1,780

 
 
Long-Term Tax Receivable
165

 
64

 
 
Long-Term Receivable of VIE
601

 
580

 
 
Other Special Funds
230

 
212

 
 
Goodwill
16

 
16

 
 
Other Intangibles
122

 
84

 
 
Derivative Contracts
91

 
77

 
 
Restricted Cash of VIEs
—

 
24

 
 
Other
279

 
289

 
 
Total Noncurrent Assets
7,615

 
7,625

 
 
TOTAL ASSETS
$
36,424

 
$
35,333

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.


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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
September 30,
2015
 
December 31,
2014
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
1,038

 
$
624

 
 
Securitization Debt of VIEs Due Within One Year
68

 
259

 
 
Commercial Paper and Loans
20

 
—

 
 
Accounts Payable
1,046

 
1,178

 
 
Derivative Contracts
70

 
132

 
 
Accrued Interest
123

 
95

 
 
Accrued Taxes
204

 
21

 
 
Deferred Income Taxes
—

 
173

 
 
Clean Energy Program
185

 
142

 
 
Obligation to Return Cash Collateral
126

 
121

 
 
Regulatory Liabilities
208

 
186

 
 
Regulatory Liabilities of VIEs
3

 
—

 
 
Other
513

 
547

 
 
Total Current Liabilities
3,604

 
3,478

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
7,672

 
7,303

 
 
Regulatory Liabilities
181

 
258

 
 
Regulatory Liabilities of VIEs
—

 
39

 
 
Asset Retirement Obligations
776

 
743

 
 
Other Postretirement Benefit (OPEB) Costs
1,250

 
1,277

 
 
OPEB Costs of Servco
480

 
452

 
 
Accrued Pension Costs
373

 
440

 
 
Accrued Pension Costs of Servco
118

 
126

 
 
Environmental Costs
438

 
417

 
 
Derivative Contracts
23

 
33

 
 
Long-Term Accrued Taxes
287

 
208

 
 
Other
156

 
112

 
 
Total Noncurrent Liabilities
11,754

 
11,408

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 8)


 


 
 
CAPITALIZATION

 
 
 
 
LONG-TERM DEBT
 
 
 
 
 
Total Long-Term Debt
8,132

 
8,261

 
 
STOCKHOLDERS’ EQUITY

 
 
 
 
Common Stock, no par, authorized 1,000,000,000 shares; issued, 2015 and 2014—533,556,660 shares
4,894

 
4,876

 
 
Treasury Stock, at cost, 2015— 28,238,912 shares; 2014— 27,720,068 shares
(667
)
 
(635
)
 
 
Retained Earnings
9,005

 
8,227

 
 
Accumulated Other Comprehensive Loss
(299
)
 
(283
)
 
 
Total Common Stockholders’ Equity
12,933

 
12,185

 
 
Noncontrolling Interest
1

 
1

 
 
Total Stockholders’ Equity
12,934

 
12,186

 
 
Total Capitalization
21,066

 
20,447

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
36,424

 
$
35,333

 
 
 


 
 
 

See Notes to Condensed Consolidated Financial Statements.

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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2015
 
2014
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
1,370

 
$
1,042

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
960

 
919

 
 
Amortization of Nuclear Fuel
162

 
151

 
 
Provision for Deferred Income Taxes (Other than Leases) and ITC
230

 
103

 
 
Non-Cash Employee Benefit Plan Costs
121

 
36

 
 
Leveraged Lease (Income) Loss, Adjusted for Rents Received and Deferred Taxes
6

 
(30
)
 
 
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives
(87
)
 
237

 
 
Change in Accrued Storm Costs
15

 
(3
)
 
 
Net Change in Other Regulatory Assets and Liabilities
26

 
276

 
 
Cost of Removal
(82
)
 
(68
)
 
 
Net Realized (Gains) Losses and (Income) Expense from NDT Fund
(2
)
 
(99
)
 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
          Tax Receivable
206

 
95

 
 
          Accrued Taxes
127

 
127

 
 
          Margin Deposit
142

 
(173
)
 
 
          Other Current Assets and Liabilities
15

 
(103
)
 
 
Employee Benefit Plan Funding and Related Payments
(87
)
 
(76
)
 
 
Other
106

 
102

 
 
Net Cash Provided By (Used In) Operating Activities
3,228

 
2,536

 
 
CASH FLOWS FROM INVESTING ACTIVITIES


 
 
 
 
Additions to Property, Plant and Equipment
(2,782
)
 
(1,922
)
 
 
Proceeds from Sales of Capital Leases and Investments
12

 
11

 
 
Proceeds from Sales of Available-for-Sale Securities
1,120

 
1,224

 
 
Investments in Available-for-Sale Securities
(1,163
)
 
(1,241
)
 
 
Other
(28
)
 
(60
)
 
 
Net Cash Provided By (Used In) Investing Activities
(2,841
)
 
(1,988
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Commercial Paper and Loans
20

 
(60
)
 
 
Issuance of Long-Term Debt
600

 
1,000

 
 
Redemption of Long-Term Debt
(300
)
 
(500
)
 
 
Redemption of Securitization Debt
(191
)
 
(170
)
 
 
Cash Dividends Paid on Common Stock
(592
)
 
(561
)
 
 
Other
(55
)
 
(47
)
 
 
Net Cash Provided By (Used In) Financing Activities
(518
)
 
(338
)
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
(131
)
 
210

 
 
Cash and Cash Equivalents at Beginning of Period
402

 
493

 
 
Cash and Cash Equivalents at End of Period
$
271

 
$
703

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
292

 
$
284

 
 
Interest Paid, Net of Amounts Capitalized
$
265

 
$
269

 
 
Accrued Property, Plant and Equipment Expenditures
$
321

 
$
286

 
 
 
 
 
 
 
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
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2015
 
2014
 
2015
 
2014
 
 
OPERATING REVENUES
$
1,766

 
$
1,655

 
$
5,234

 
$
5,235

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
740

 
668

 
2,176

 
2,278

 
 
Operation and Maintenance
391

 
366

 
1,171

 
1,190

 
 
Depreciation and Amortization
231

 
238

 
712

 
682

 
 
Total Operating Expenses
1,362

 
1,272

 
4,059

 
4,150

 
 
OPERATING INCOME
404

 
383

 
1,175

 
1,085

 
 
Other Income
22

 
16

 
59

 
44

 
 
Other Deductions
—

 
(2
)
 
(2
)
 
(3
)
 
 
Interest Expense
(67
)
 
(71
)
 
(203
)
 
(206
)
 
 
INCOME BEFORE INCOME TAXES
359

 
326

 
1,029

 
920

 
 
Income Tax Expense
(137
)
 
(126
)
 
(398
)
 
(355
)
 
 
EARNINGS AVAILABLE TO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
$
222

 
$
200

 
$
631

 
$
565

 
 
 
 
 
 
 
 
 
 
 

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
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2015
 
2014
 
2015
 
2014
 
 
NET INCOME
$
222

 
$
200

 
$
631

 
$
565

 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $0 for the three and nine months ended 2015 and 2014, respectively
—

 
1

 
(1
)
 
1

 
 
COMPREHENSIVE INCOME
$
222

 
$
201

 
$
630

 
$
566

 
 
 
 
 
 
 
 
 
 
 

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)

 
 
 
 
 
 
 
 
September 30,
2015
 
December 31,
2014
 
 
ASSETS
 
 
CURRENT ASSETS

 
 
 
 
Cash and Cash Equivalents
$
14

 
$
310

 
 
Accounts Receivable, net of allowances of $59 and $52 in 2015 and 2014, respectively
938

 
864

 
 
Accounts Receivable-Affiliated Companies
7

 
274

 
 
Unbilled Revenues
203

 
284

 
 
Materials and Supplies
146

 
133

 
 
Prepayments
109

 
42

 
 
Regulatory Assets
189

 
323

 
 
Regulatory Assets of VIEs
—

 
249

 
 
Derivative Contracts
4

 
18

 
 
Deferred Income Taxes
47

 
24

 
 
Restricted Cash of VIEs
26

 
—

 
 
Other
17

 
7

 
 
Total Current Assets
1,700

 
2,528

 
 
PROPERTY, PLANT AND EQUIPMENT
22,940

 
21,103

 
 
Less: Accumulated Depreciation and Amortization
(5,419
)
 
(5,183
)
 
 
Net Property, Plant and Equipment
17,521

 
15,920

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
3,161

 
3,192

 
 
Long-Term Investments
335

 
348

 
 
Other Special Funds
52

 
53

 
 
Derivative Contracts
—

 
8

 
 
Restricted Cash of VIEs
—

 
24

 
 
Other
140

 
150

 
 
Total Noncurrent Assets
3,688

 
3,775

 
 
TOTAL ASSETS
$
22,909

 
$
22,223

 
 
 
 
 
 
 

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)

 
 
 
 
 
 
 
 
September 30,
2015
 
December 31,
2014
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
171

 
$
300

 
 
Securitization Debt of VIEs Due Within One Year
68

 
259

 
 
Commercial Paper and Loans
20

 
—

 
 
Accounts Payable
567

 
574

 
 
Accounts Payable—Affiliated Companies
208

 
379

 
 
Accrued Interest
80

 
68

 
 
Clean Energy Program
185

 
142

 
 
Deferred Income Taxes
—

 
165

 
 
Obligation to Return Cash Collateral
126

 
121

 
 
Regulatory Liabilities
208

 
186

 
 
Regulatory Liabilities of VIEs
3

 
—

 
 
Other
357

 
381

 
 
Total Current Liabilities
1,993

 
2,575

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and ITC
4,896

 
4,575

 
 
Other Postretirement Benefit (OPEB) Costs
929

 
967

 
 
Accrued Pension Costs
131

 
173

 
 
Regulatory Liabilities
181

 
258

 
 
Regulatory Liabilities of VIEs
—

 
39

 
 
Environmental Costs
387

 
364

 
 
Asset Retirement Obligations
304

 
290

 
 
Long-Term Accrued Taxes
165

 
116

 
 
Derivative Contracts
7

 
—

 
 
Other
58

 
67

 
 
Total Noncurrent Liabilities
7,058

 
6,849

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 8)


 


 
 
CAPITALIZATION
 
 
 
 
 
LONG-TERM DEBT

 
 
 
 
Total Long-Term Debt
6,441

 
6,012

 
 
STOCKHOLDER’S EQUITY
 
 
 
 
 
Common Stock; 150,000,000 shares authorized; issued and outstanding, 2015 and 2014—132,450,344 shares
892

 
892

 
 
Contributed Capital
695

 
695

 
 
Basis Adjustment
986

 
986

 
 
Retained Earnings
4,843

 
4,212

 
 
Accumulated Other Comprehensive Income
1

 
2

 
 
Total Stockholder’s Equity
7,417

 
6,787

 
 
Total Capitalization
13,858

 
12,799

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
22,909

 
$
22,223

 
 
 
 
 
 
 

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


9

table of contents

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

 
 
 
 
 
 
 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2015
 
2014
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
  Net Income
$
631

 
$
565

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
712

 
682

 
 
Provision for Deferred Income Taxes and ITC
96

 
93

 
 
Non-Cash Employee Benefit Plan Costs
71

 
21

 
 
Cost of Removal
(82
)
 
(68
)
 
 
Change in Accrued Storm Costs
15

 
(3
)
 
 
Net Change in Other Regulatory Assets and Liabilities
26

 
276

 
 
Net Change in Certain Current Assets and Liabilities:

 
 
 
 
Accounts Receivable and Unbilled Revenues
30

 
71

 
 
Materials and Supplies
(13
)
 
(15
)
 
 
Prepayments
(67
)
 
(92
)
 
 
Accounts Payable
34

 
(3
)
 
 
Accounts Receivable/Payable—Affiliated Companies, net
190

 
(113
)
 
 
Other Current Assets and Liabilities
(18
)
 
(6
)
 
 
Employee Benefit Plan Funding and Related Payments
(72
)
 
(67
)
 
 
Other
(35
)
 
2

 
 
Net Cash Provided By (Used In) Operating Activities
1,518

 
1,343

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(1,946
)
 
(1,493
)
 
 
Proceeds from Sales of Available-for-Sale Securities
16

 
98

 
 
Investments in Available-for-Sale Securities
(18
)
 
(96
)
 
 
Other
13

 
1

 
 
Net Cash Provided By (Used In) Investing Activities
(1,935
)
 
(1,490
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Short-Term Debt
20

 
(60
)
 
 
Issuance of Long-Term Debt
600

 
1,000

 
 
Redemption of Long-Term Debt
(300
)
 
(500
)
 
 
Redemption of Securitization Debt
(191
)
 
(170
)
 
 
Contributed Capital
—

 
175

 
 
Other
(8
)
 
(11
)
 
 
Net Cash Provided By (Used In) Financing Activities
121

 
434

 
 
Net Increase (Decrease) In Cash and Cash Equivalents
(296
)
 
287

 
 
Cash and Cash Equivalents at Beginning of Period
310

 
18

 
 
Cash and Cash Equivalents at End of Period
$
14

 
$
305

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
(29
)
 
$
174

 
 
Interest Paid, Net of Amounts Capitalized
$
186

 
$
188

 
 
Accrued Property, Plant and Equipment Expenditures
$
251

 
$
238

 
 
 
 
 
 
 

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

10

table of contents


PSEG POWER LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 

Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2015
 
2014
 
2015
 
2014
 
 
OPERATING REVENUES
$
1,096

 
$
1,138

 
$
3,846

 
$
3,824

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
367

 
472

 
1,669

 
2,036

 
 
Operation and Maintenance
263

 
242

 
748

 
871

 
 
Depreciation and Amortization
75

 
71

 
226

 
215

 
 
Total Operating Expenses
705

 
785

 
2,643

 
3,122

 
 
OPERATING INCOME
391

 
353

 
1,203

 
702

 
 
Income from Equity Method Investments
3

 
4

 
11

 
11

 
 
Other Income
25

 
56

 
109

 
135

 
 
Other Deductions
(14
)
 
(6
)
 
(32
)
 
(25
)
 
 
Other-Than-Temporary Impairments
(30
)
 
(10
)
 
(45
)
 
(14
)
 
 
Interest Expense
(30
)
 
(31
)
 
(94
)
 
(92
)
 
 
INCOME BEFORE INCOME TAXES
345

 
366

 
1,152

 
717

 
 
Income Tax Expense
(139
)
 
(144
)
 
(445
)
 
(277
)
 
 
EARNINGS AVAILABLE TO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
$
206

 
$
222

 
$
707

 
$
440

 
 
 
 
 
 
 


 
 
 

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


11

table of contents

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

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2015
 
2014
 
2015
 
2014
 
 
NET INCOME
$
206

 
$
222

 
$
707

 
$
440

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $32, $34, $33 and $23 for the three and nine months ended 2015 and 2014, respectively
(29
)
 
(30
)
 
(29
)
 
(19
)
 
 
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $(1), $0, $6 and $(2) for the three and nine months ended 2015 and 2014, respectively
—

 
1

 
(9
)
 
4

 
 
Pension/OPEB adjustment, net of tax (expense) benefit of $(5), $(1), $(15) and $(4) for the three and nine months ended 2015 and 2014, respectively
7

 
2

 
21

 
7

 
 
Other Comprehensive Income (Loss), net of tax
(22
)
 
(27
)
 
(17
)
 
(8
)
 
 
COMPREHENSIVE INCOME
$
184

 
$
195

 
$
690

 
$
432

 
 
 
 
 
 
 
 
 
 
 

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


12

table of contents

PSEG POWER LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
September 30,
2015
 
December 31,
2014
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
15

 
$
9

 
 
Accounts Receivable
218

 
334

 
 
Accounts Receivable—Affiliated Companies
158

 
313

 
 
 Tax Receivable
3

 
3

 
 
Short-Term Loan to Affiliate
865

 
584

 
 
Fuel
451

 
538

 
 
Materials and Supplies, net
324

 
350

 
 
Derivative Contracts
147

 
207

 
 
Prepayments
36

 
17

 
 
Other
7

 
4

 
 
Total Current Assets
2,224

 
2,359

 
 
PROPERTY, PLANT AND EQUIPMENT
11,273

 
10,732

 
 
Less: Accumulated Depreciation and Amortization
(3,366
)
 
(3,217
)
 
 
Net Property, Plant and Equipment
7,907

 
7,515

 
 
NONCURRENT ASSETS
 
 
 
 
 
Nuclear Decommissioning Trust (NDT) Fund
1,715

 
1,780

 
 
Long-Term Investments
116

 
121

 
 
Goodwill
16

 
16

 
 
Other Intangibles
122

 
84

 
 
Other Special Funds
56

 
49

 
 
Derivative Contracts
91

 
62

 
 
Other
67

 
60

 
 
Total Noncurrent Assets
2,183

 
2,172

 
 
TOTAL ASSETS
$
12,314

 
$
12,046

 
 
 
 
 
 
 

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


13

table of contents

PSEG POWER LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)

 
 
 
 
 
 
 
 
September 30,
2015
 
December 31,
2014
 
 
LIABILITIES AND MEMBER’S EQUITY
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
853

 
$
300

 
 
Accounts Payable
315

 
424

 
 
 Accounts Payable-Affiliated Companies
117

 
118

 
 
Derivative Contracts
70

 
132

 
 
Deferred Income Taxes
44

 
43

 
 
Accrued Interest
43

 
27

 
 
Other
132

 
140

 
 
Total Current Liabilities
1,574

 
1,184

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
2,148

 
2,065

 
 
Asset Retirement Obligations
469

 
450

 
 
Other Postretirement Benefit (OPEB) Costs
258

 
248

 
 
Derivative Contracts
16

 
33

 
 
Accrued Pension Costs
134

 
153

 
 
Long-Term Accrued Taxes
54

 
41

 
 
Other
121

 
71

 
 
Total Noncurrent Liabilities
3,200

 
3,061

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 8)


 


 
 
LONG-TERM DEBT
 
 
 
 
 
Total Long-Term Debt
1,691

 
2,243

 
 
MEMBER’S EQUITY
 
 
 
 
 
Contributed Capital
2,215

 
2,214

 
 
Basis Adjustment
(986
)
 
(986
)
 
 
Retained Earnings
4,865

 
4,558

 
 
Accumulated Other Comprehensive Loss
(245
)
 
(228
)
 
 
Total Member’s Equity
5,849

 
5,558

 
 
TOTAL LIABILITIES AND MEMBER’S EQUITY
$
12,314

 
$
12,046

 
 
 
 
 
 
 

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


14

table of contents

PSEG POWER LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2015
 
2014
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
707

 
$
440

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
226

 
215

 
 
Amortization of Nuclear Fuel
162

 
151

 
 
Provision for Deferred Income Taxes and ITC
109

 
5

 
 
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives
(87
)
 
237

 
 
Non-Cash Employee Benefit Plan Costs
36

 
10

 
 
Net Realized (Gains) Losses and (Income) Expense from NDT Fund
(2
)
 
(99
)
 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
Fuel, Materials and Supplies
113

 
17

 
 
Margin Deposit
142

 
(173
)

 
Accounts Receivable
54

 
49

 
 
Accounts Payable
(99
)
 
(135
)
 
 
Accounts Receivable/Payable—Affiliated Companies, net
115

 
299

 
 
Other Current Assets and Liabilities
(26
)
 
28

 
 
Employee Benefit Plan Funding and Related Payments
(9
)
 
(5
)
 
 
Other
117

 
71

 
 
Net Cash Provided By (Used In) Operating Activities
1,558

 
1,110

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(797
)
 
(414
)
 
 
Proceeds from Sales of Available-for-Sale Securities
1,057

 
882

 
 
Investments in Available-for-Sale Securities
(1,083
)
 
(898
)
 
 
Short-Term Loan—Affiliated Company, net
(281
)
 
167

 
 
Other
(46
)
 
(63
)
 
 
Net Cash Provided By (Used In) Investing Activities
(1,150
)
 
(326
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Cash Dividend Paid
(400
)
 
(775
)
 
 
Other
(2
)
 
(3
)
 
 
Net Cash Provided By (Used In) Financing Activities
(402
)
 
(778
)
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
6

 
6

 
 
Cash and Cash Equivalents at Beginning of Period
9

 
6

 
 
Cash and Cash Equivalents at End of Period
$
15

 
$
12

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
284

 
$
87

 
 
Interest Paid, Net of Amounts Capitalized
$
76

 
$
78