PSEG-9/30/2014-Q3
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 September 30, 2014
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM          TO

Commission
File Number
 
Registrants, State of Incorporation,
Address, and Telephone Number
  
I.R.S. Employer
Identification No.
001-09120
  
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(A New Jersey Corporation)
80 Park Plaza, P.O. Box 1171
Newark, New Jersey 07101-1171
973 430-7000
http://www.pseg.com
  
22-2625848
001-34232
  
PSEG POWER LLC
(A Delaware Limited Liability Company)
80 Park Plaza—T25
Newark, New Jersey 07102-4194
973 430-7000
http://www.pseg.com
  
22-3663480
001-00973
  
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(A New Jersey Corporation)
80 Park Plaza, P.O. Box 570
Newark, New Jersey 07101-0570
973 430-7000
http://www.pseg.com
  
22-1212800
 
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files). Yes ý No ¨
Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Public Service Enterprise Group Incorporated
Large accelerated filer x
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
 
 
 
 
 
PSEG Power LLC
Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller reporting company o
 
 
 
 
 
Public Service Electric and Gas Company
Large accelerated filer o
Accelerated filer o
Non-accelerated filer x
Smaller reporting company o
Indicate by check mark whether any of the registrants is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý
As of October 15, 2014, Public Service Enterprise Group Incorporated had outstanding 505,959,967 shares of its sole class of Common Stock, without par value.
As of October 15, 2014, Public Service Electric and Gas Company had issued and outstanding 132,450,344 shares of Common Stock, without nominal or par value, all of which were privately held, beneficially and of record by Public Service Enterprise Group Incorporated.
PSEG Power LLC and Public Service Electric and Gas Company are wholly owned subsidiaries of Public Service Enterprise Group Incorporated and meet the conditions set forth in General Instruction H(1) (a) and (b) of Form 10-Q. Each is filing its Quarterly Report on Form 10-Q with the reduced disclosure format authorized by General Instruction H.



Table of Contents


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


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FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this report about our and our subsidiaries' future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. When used herein, the words “anticipate,” “intend,” “estimate,” “believe,” “expect,” “plan,” “should,” “hypothetical,” “potential,” “forecast,” “project,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in filings we make with the United States Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K and available on our website: http://www.pseg.com. These factors include, but are not limited to:
adverse changes in the demand for or the price of the capacity and energy that we sell into wholesale electricity markets,
adverse changes in energy industry law, policies and regulation, including market structures and a potential shift away from competitive markets toward subsidized market mechanisms, capacity market design, transmission planning and cost allocation rules, including how transmission projects are planned and who is permitted to build transmission in the future, and reliability standards,
any inability of our transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators,
changes in federal and state environmental regulations and enforcement that could increase our costs or limit our operations,
changes in nuclear regulation and/or general developments in the nuclear power industry, including various impacts from any accidents or incidents experienced at our facilities or by others in the industry, that could limit operations of our nuclear generating units,
actions or activities at one of our nuclear units located on a multi-unit site that might adversely affect our ability to continue to operate that unit or other units located at the same site,
any inability to manage our energy obligations, available supply and risks,
adverse outcomes of any legal, regulatory or other proceeding, settlement, investigation or claim applicable to us and/or the energy industry,
any deterioration in our credit quality or the credit quality of our counterparties,
availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs,
changes in the cost of, or interruption in the supply of, fuel and other commodities necessary to the operation of our generating units,
delays in receipt of necessary permits and approvals for our construction and development activities,
delays or unforeseen cost escalations in our construction and development activities,
any inability to achieve, or continue to sustain, our expected levels of operating performance,
any equipment failures, accidents, severe weather events or other incidents that impact our ability to provide safe and reliable service to our customers, and any inability to obtain sufficient insurance coverage or recover proceeds of insurance with respect to such events,
acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses,
increases in competition in energy supply markets as well as competition for certain transmission projects,
any inability to realize anticipated tax benefits or retain tax credits,
challenges associated with recruitment and/or retention of a qualified workforce,
adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in funding requirements,
changes in technology, such as distributed generation and micro grids, and greater reliance on these technologies, and
changes in customer behaviors, including increases in energy efficiency, net-metering and demand response.

All of the forward-looking statements made in this report are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by management will be realized or even if realized, will have the expected consequences to, or effects on, us or our business prospects, financial condition or results of operations. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this report apply only as of the date of this report. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if internal estimates change, unless otherwise required by applicable securities laws.

The forward-looking statements contained in this report are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

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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,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
OPERATING REVENUES
$
2,641

 
$
2,554

 
$
8,113

 
$
7,650

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
863

 
801

 
3,008

 
2,711

 
 
Operation and Maintenance
714

 
713

 
2,370

 
2,069

 
 
Depreciation and Amortization
318

 
313

 
919

 
886

 
 
Taxes Other Than Income Taxes

 
15

 

 
50

 
 
Total Operating Expenses
1,895

 
1,842

 
6,297

 
5,716

 
 
OPERATING INCOME
746

 
712

 
1,816

 
1,934

 
 
Income from Equity Method Investments
3

 
4

 
10

 
9

 
 
Other Income
75

 
59

 
185

 
172

 
 
Other Deductions
(9
)
 
(12
)
 
(31
)
 
(54
)
 
 
Other-Than-Temporary Impairments
(10
)
 
(3
)
 
(14
)
 
(7
)
 
 
Interest Expense
(100
)
 
(100
)
 
(291
)
 
(303
)
 
 
INCOME BEFORE INCOME TAXES
705

 
660

 
1,675

 
1,751

 
 
Income Tax Expense
(261
)
 
(270
)
 
(633
)
 
(708
)
 
 
NET INCOME
$
444

 
$
390

 
$
1,042

 
$
1,043

 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (THOUSANDS):
 
 
 
 
 
 
 
 
 
BASIC
505,862

 
505,858

 
505,937

 
505,900

 
 
DILUTED
507,422

 
507,694

 
507,402

 
507,433

 
 
NET INCOME PER SHARE:
 
 
 
 
 
 
 
 
 
BASIC
$
0.88

 
$
0.77

 
$
2.06

 
$
2.06

 
 
DILUTED
$
0.87

 
$
0.77

 
$
2.05

 
$
2.06

 
 
DIVIDENDS PAID PER SHARE OF COMMON STOCK
$
0.37

 
$
0.36

 
$
1.11

 
$
1.08

 
 
 
 
 
 
 
 
 
 
 

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,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
NET INCOME
$
444

 
$
390

 
$
1,042

 
$
1,043

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $33, $(16), $21 and $(27) for the three and nine months ended 2014 and 2013, respectively
(30
)
 
16

 
(17
)
 
27

 
 
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $(1), $1, $(3) and $4 for the three and nine months ended 2014 and 2013, respectively
1

 
(1
)
 
4

 
(5
)
 
 
Pension/Other Postretirement Benefit Costs (OPEB) adjustment, net of tax (expense) benefit of $(2), $(6), $(5) and $(20) for the three and nine months ended 2014 and 2013, respectively
3

 
9

 
9

 
28

 
 
Other Comprehensive Income (Loss), net of tax
(26
)
 
24

 
(4
)
 
50

 
 
COMPREHENSIVE INCOME
$
418

 
$
414

 
$
1,038

 
$
1,093

 
 
 
 
 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.


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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
September 30,
2014
 
December 31,
2013
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
703

 
$
493

 
 
Accounts Receivable, net of allowances of $55 and $56 in 2014 and 2013, respectively
1,267

 
1,203

 
 
Tax Receivable
14

 
109

 
 
Unbilled Revenues
228

 
300

 
 
Fuel
530

 
545

 
 
Materials and Supplies, net
495

 
479

 
 
Prepayments
175

 
89

 
 
Derivative Contracts
71

 
98

 
 
Deferred Income Taxes
128

 
24

 
 
Regulatory Assets
211

 
243

 
 
Other
24

 
31

 
 
Total Current Assets
3,846

 
3,614

 
 
PROPERTY, PLANT AND EQUIPMENT
31,328

 
29,713

 
 
     Less: Accumulated Depreciation and Amortization
(8,492
)
 
(8,068
)
 
 
Net Property, Plant and Equipment
22,836

 
21,645

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
2,569

 
2,612

 
 
Regulatory Assets of Variable Interest Entities (VIEs)
270

 
476

 
 
Long-Term Investments
1,309

 
1,313

 
 
Nuclear Decommissioning Trust (NDT) Fund
1,739

 
1,701

 
 
Long-Term Receivable of VIE
401

 

 
 
Other Special Funds
675

 
613

 
 
Goodwill
16

 
16

 
 
Other Intangibles
102

 
33

 
 
Derivative Contracts
29

 
163

 
 
Restricted Cash of VIEs
24

 
24

 
 
Other
331

 
312

 
 
Total Noncurrent Assets
7,465

 
7,263

 
 
TOTAL ASSETS
$
34,147

 
$
32,522

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.


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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
September 30,
2014
 
December 31,
2013
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
316

 
$
544

 
 
Securitization Debt of VIEs Due Within One Year
258

 
237

 
 
Commercial Paper and Loans

 
60

 
 
Accounts Payable
1,111

 
1,222

 
 
Derivative Contracts
109

 
76

 
 
Accrued Interest
117

 
95

 
 
Accrued Taxes
168

 
37

 
 
Clean Energy Program
185

 
142

 
 
Obligation to Return Cash Collateral
120

 
119

 
 
Regulatory Liabilities
271

 
43

 
 
Other
481

 
488

 
 
Total Current Liabilities
3,136

 
3,063

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
7,298

 
7,107

 
 
Regulatory Liabilities
141

 
233

 
 
Regulatory Liabilities of VIEs
12

 
11

 
 
Asset Retirement Obligations
704

 
677

 
 
Other Postretirement Benefit (OPEB) Costs
1,073

 
1,095

 
 
OPEB Costs of Servco
321

 

 
 
Accrued Pension Costs
121

 
121

 
 
Accrued Pension Costs of Servco
78

 

 
 
Environmental Costs
438

 
414

 
 
Derivative Contracts
37

 
31

 
 
Long-Term Accrued Taxes
183

 
180

 
 
Other
132

 
119

 
 
Total Noncurrent Liabilities
10,538

 
9,988

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 8)


 


 
 
CAPITALIZATION
 
 
 
 
 
LONG-TERM DEBT

 
 
 
 
Long-Term Debt
8,321

 
7,587

 
 
Securitization Debt of VIEs
68

 
259

 
 
Project Level, Non-Recourse Debt

 
16

 
 
Total Long-Term Debt
8,389

 
7,862

 
 
STOCKHOLDERS’ EQUITY

 
 
 
 
Common Stock, no par, authorized 1,000,000,000 shares; issued, 2014 and 2013—533,556,660 shares
4,873

 
4,861

 
 
Treasury Stock, at cost, 2014— 27,674,968 shares; 2013— 27,699,398 shares
(629
)
 
(615
)
 
 
Retained Earnings
7,938

 
7,457

 
 
Accumulated Other Comprehensive Loss
(99
)
 
(95
)
 
 
Total Common Stockholders’ Equity
12,083

 
11,608

 
 
Noncontrolling Interest
1

 
1

 
 
Total Stockholders’ Equity
12,084

 
11,609

 
 
Total Capitalization
20,473

 
19,471

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
34,147

 
$
32,522

 
 
 


 
 
 

See Notes to Condensed Consolidated Financial Statements.

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Table of Contents


PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2014
 
2013
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
1,042

 
$
1,043

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
919

 
886

 
 
Amortization of Nuclear Fuel
151

 
145

 
 
Provision for Deferred Income Taxes (Other than Leases) and ITC
103

 
242

 
 
Non-Cash Employee Benefit Plan Costs
36

 
182

 
 
Leveraged Lease Income, Adjusted for Rents Received and Deferred Taxes
(30
)
 
(7
)
 
 
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives
237

 
3

 
 
Change in Accrued Storm Costs
(3
)
 
(87
)
 
 
Net Change in Other Regulatory Assets and Liabilities
276

 
134

 
 
Cost of Removal
(68
)
 
(66
)
 
 
Net Realized (Gains) Losses and (Income) Expense from NDT Fund
(99
)
 
(76
)
 
 
Net Change in Margin Deposit
(173
)
 
17

 
 
Net Change in Certain Current Assets and Liabilities
119

 
158

 
 
Employee Benefit Plan Funding and Related Payments
(76
)
 
(210
)
 
 
Other
102

 
71

 
 
Net Cash Provided By (Used In) Operating Activities
2,536

 
2,435

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(1,922
)
 
(2,102
)
 
 
Proceeds from Sales of Investments
11

 
42

 
 
Proceeds from Sales of Available-for-Sale Securities
1,224

 
914

 
 
Investments in Available-for-Sale Securities
(1,241
)
 
(922
)
 
 
Other
(60
)
 
(20
)
 
 
Net Cash Provided By (Used In) Investing Activities
(1,988
)
 
(2,088
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Commercial Paper and Loans
(60
)
 
(263
)
 
 
Issuance of Long-Term Debt
1,000

 
1,500

 
 
Redemption of Long-Term Debt
(500
)
 
(750
)
 
 
Redemption of Securitization Debt
(170
)
 
(162
)
 
 
Cash Dividends Paid on Common Stock
(561
)
 
(546
)
 
 
Other
(47
)
 
(57
)
 
 
Net Cash Provided By (Used In) Financing Activities
(338
)
 
(278
)
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
210

 
69

 
 
Cash and Cash Equivalents at Beginning of Period
493

 
379

 
 
Cash and Cash Equivalents at End of Period
$
703

 
$
448

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

 
$
222

 
 
Interest Paid, Net of Amounts Capitalized
$
269

 
$
274

 
 
Accrued Property, Plant and Equipment Expenditures
$
286

 
$
258

 
 
 
 
 
 
 

See Notes to Condensed Consolidated Financial Statements.

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

Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
OPERATING REVENUES
$
1,138

 
$
1,174

 
$
3,824

 
$
3,818

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
472

 
430

 
2,036

 
1,785

 
 
Operation and Maintenance
242

 
305

 
871

 
868

 
 
Depreciation and Amortization
71

 
69

 
215

 
202

 
 
Total Operating Expenses
785

 
804

 
3,122

 
2,855

 
 
OPERATING INCOME
353

 
370

 
702

 
963

 
 
Income from Equity Method Investments
4

 
4

 
11

 
12

 
 
Other Income
56

 
45

 
135

 
127

 
 
Other Deductions
(6
)
 
(11
)
 
(25
)
 
(49
)
 
 
Other-Than-Temporary Impairments
(10
)
 
(3
)
 
(14
)
 
(7
)
 
 
Interest Expense
(31
)
 
(26
)
 
(92
)
 
(85
)
 
 
INCOME BEFORE INCOME TAXES
366

 
379

 
717

 
961

 
 
Income Tax Expense
(144
)
 
(153
)
 
(277
)
 
(384
)
 
 
EARNINGS AVAILABLE TO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
$
222

 
$
226

 
$
440

 
$
577

 
 
 
 
 
 
 


 
 
 

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


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

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
NET INCOME
$
222

 
$
226

 
$
440

 
$
577

 
 
Other Comprehensive Income (Loss), net of tax
 
 
 
 
 
 
 
 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $34, $(18), $23 and $(29) for the three and nine months ended 2014 and 2013, respectively
(30
)
 
17

 
(19
)
 
30

 
 
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $0, $1, $(2) and $4 for the three and nine months ended 2014 and 2013, respectively
1

 
(1
)
 
4

 
(6
)
 
 
Pension/OPEB adjustment, net of tax (expense) benefit of $(1), $(6), $(4) and $(17) for the three and nine months ended 2014 and 2013, respectively
2

 
8

 
7

 
25

 
 
Other Comprehensive Income (Loss), net of tax
(27
)
 
24

 
(8
)
 
49

 
 
COMPREHENSIVE INCOME
$
195

 
$
250

 
$
432

 
$
626

 
 
 
 
 
 
 
 
 
 
 

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


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PSEG POWER LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
September 30,
2014
 
December 31,
2013
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
12

 
$
6

 
 
Accounts Receivable
385

 
338

 
 
Accounts Receivable—Affiliated Companies, net
52

 
333

 
 
Short-Term Loan to Affiliate
623

 
790

 
 
Fuel
530

 
545

 
 
Materials and Supplies, net
360

 
362

 
 
Derivative Contracts
50

 
57

 
 
Prepayments
20

 
13

 
 
Deferred Income Taxes
97

 
30

 
 
Other
1

 
2

 
 
Total Current Assets
2,130

 
2,476

 
 
PROPERTY, PLANT AND EQUIPMENT
10,613

 
10,278

 
 
Less: Accumulated Depreciation and Amortization
(3,229
)
 
(2,911
)
 
 
Net Property, Plant and Equipment
7,384

 
7,367

 
 
NONCURRENT ASSETS
 
 
 
 
 
Nuclear Decommissioning Trust (NDT) Fund
1,739

 
1,701

 
 
Long-Term Investments
122

 
123

 
 
Goodwill
16

 
16

 
 
Other Intangibles
102

 
33

 
 
Other Special Funds
159

 
139

 
 
Derivative Contracts
11

 
72

 
 
Other
87

 
75

 
 
Total Noncurrent Assets
2,236

 
2,159

 
 
TOTAL ASSETS
$
11,750

 
$
12,002

 
 
 
 
 
 
 

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


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PSEG POWER LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions
(Unaudited)

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

 
$
44

 
 
Accounts Payable
435

 
516

 
 
Derivative Contracts
109

 
76

 
 
Accrued Interest
43

 
28

 
 
Other
160

 
136

 
 
Total Current Liabilities
747

 
800

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and Investment Tax Credits (ITC)
2,092

 
2,031

 
 
Asset Retirement Obligations
415

 
400

 
 
Other Postretirement Benefit (OPEB) Costs
215

 
206

 
 
Derivative Contracts
37

 
31

 
 
Accrued Pension Costs
35

 
35

 
 
Long-Term Accrued Taxes
57

 
53

 
 
Other
94

 
91

 
 
Total Noncurrent Liabilities
2,945

 
2,847

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 8)


 


 
 
LONG-TERM DEBT
 
 
 
 
 
Total Long-Term Debt
2,543

 
2,497

 
 
MEMBER’S EQUITY
 
 
 
 
 
Contributed Capital
2,214

 
2,214

 
 
Basis Adjustment
(986
)
 
(986
)
 
 
Retained Earnings
4,358

 
4,693

 
 
Accumulated Other Comprehensive Loss
(71
)
 
(63
)
 
 
Total Member’s Equity
5,515

 
5,858

 
 
TOTAL LIABILITIES AND MEMBER’S EQUITY
$
11,750

 
$
12,002

 
 
 
 
 
 
 

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


9

Table of Contents


PSEG POWER LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
(Unaudited)
 
 
 
 
 
 
 
 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2014
 
2013
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net Income
$
440

 
$
577

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
215

 
202

 
 
Amortization of Nuclear Fuel
151

 
145

 
 
Provision for Deferred Income Taxes and ITC
5

 
96

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

 
3

 
 
Non-Cash Employee Benefit Plan Costs
10

 
50

 
 
Net Realized (Gains) Losses and (Income) Expense from NDT Fund
(99
)
 
(76
)
 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
Fuel, Materials and Supplies
17

 
(38
)
 
 
Margin Deposit
(173
)
 
17


 
Accounts Receivable
49

 
68

 
 
Accounts Payable
(135
)
 
(70
)
 
 
Accounts Receivable/Payable—Affiliated Companies, net
299

 
329

 
 
Other Current Assets and Liabilities
28

 
21

 
 
Employee Benefit Plan Funding and Related Payments
(5
)
 
(45
)
 
 
Other
71

 
35

 
 
Net Cash Provided By (Used In) Operating Activities
1,110

 
1,314

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(414
)
 
(458
)
 
 
Proceeds from Sales of Available-for-Sale Securities
882

 
849

 
 
Investments in Available-for-Sale Securities
(898
)
 
(864
)
 
 
Short-Term Loan—Affiliated Company, net
167

 
157

 
 
Other
(63
)
 
(13
)
 
 
Net Cash Provided By (Used In) Investing Activities
(326
)
 
(329
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Redemption of Long-Term Debt

 
(300
)
 
 
Cash Dividend Paid
(775
)
 
(705
)
 
 
Contributed Capital

 
24

 
 
Other
(3
)
 
(2
)
 
 
Net Cash Provided By (Used In) Financing Activities
(778
)
 
(983
)
 
 
Net Increase (Decrease) in Cash and Cash Equivalents
6

 
2

 
 
Cash and Cash Equivalents at Beginning of Period
6

 
7

 
 
Cash and Cash Equivalents at End of Period
$
12

 
$
9

 
 
Supplemental Disclosure of Cash Flow Information:
 
 
 
 
 
Income Taxes Paid (Received)
$
87

 
$
107

 
 
Interest Paid, Net of Amounts Capitalized
$
78

 
$
72

 
 
Accrued Property, Plant and Equipment Expenditures
$
66

 
$
64

 
 
 
 
 
 
 

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


10

Table of Contents



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

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
OPERATING REVENUES
$
1,655

 
$
1,666

 
$
5,235

 
$
5,084

 
 
OPERATING EXPENSES
 
 
 
 
 
 
 
 
 
Energy Costs
668

 
661

 
2,278

 
2,208

 
 
Operation and Maintenance
366

 
408

 
1,190

 
1,204

 
 
Depreciation and Amortization
238

 
236

 
682

 
658

 
 
Taxes Other Than Income Taxes

 
15

 

 
50

 
 
Total Operating Expenses
1,272

 
1,320

 
4,150

 
4,120

 
 
OPERATING INCOME
383

 
346

 
1,085

 
964

 
 
Other Income
16

 
13

 
44

 
41

 
 
Other Deductions
(2
)
 
(1
)
 
(3
)
 
(3
)
 
 
Interest Expense
(71
)
 
(75
)
 
(206
)
 
(223
)
 
 
INCOME BEFORE INCOME TAXES
326

 
283

 
920

 
779

 
 
Income Tax Expense
(126
)
 
(115
)
 
(355
)
 
(311
)
 
 
EARNINGS AVAILABLE TO PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
$
200

 
$
168

 
$
565

 
$
468

 
 
 
 
 
 
 
 
 
 
 

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


11

Table of Contents


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

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2014
 
2013
 
2014
 
2013
 
 
NET INCOME
$
200

 
$
168

 
$
565

 
$
468

 
 
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $0, $0, $0 and $1 for the three and nine months ended 2014 and 2013, respectively
1

 

 
1

 
(1
)
 
 
COMPREHENSIVE INCOME
$
201

 
$
168

 
$
566

 
$
467

 
 
 
 
 
 
 
 
 
 
 

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


12

Table of Contents


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

 
 
 
 
 
 
 
 
September 30,
2014
 
December 31,
2013
 
 
ASSETS
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and Cash Equivalents
$
305

 
$
18

 
 
Accounts Receivable, net of allowances of $55 and $56 in 2014 and 2013, respectively
836

 
832

 
 
Unbilled Revenues
228

 
300

 
 
Materials and Supplies
130

 
115

 
 
Prepayments
116

 
24

 
 
Regulatory Assets
211

 
243

 
 
Derivative Contracts
5

 
25

 
 
Deferred Income Taxes
20

 
16

 
 
Other
20

 
12

 
 
Total Current Assets
1,871

 
1,585

 
 
PROPERTY, PLANT AND EQUIPMENT
20,347

 
19,071

 
 
Less: Accumulated Depreciation and Amortization
(5,057
)
 
(4,964
)
 
 
Net Property, Plant and Equipment
15,290

 
14,107

 
 
NONCURRENT ASSETS
 
 
 
 
 
Regulatory Assets
2,569

 
2,612

 
 
Regulatory Assets of VIEs
270

 
476

 
 
Long-Term Investments
349

 
361

 
 
Other Special Funds
385

 
354

 
 
Derivative Contracts
8

 
69

 
 
Restricted Cash of VIEs
24

 
24

 
 
Other
151

 
132

 
 
Total Noncurrent Assets
3,756

 
4,028

 
 
TOTAL ASSETS
$
20,917

 
$
19,720

 
 
 
 
 
 
 

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


13

Table of Contents


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

 
 
 
 
 
 
 
 
September 30,
2014
 
December 31,
2013
 
 
LIABILITIES AND CAPITALIZATION
 
 
CURRENT LIABILITIES
 
 
 
 
 
Long-Term Debt Due Within One Year
$
300

 
$
500

 
 
Securitization Debt of VIEs Due Within One Year
258

 
237

 
 
Commercial Paper and Loans

 
60

 
 
Accounts Payable
520

 
535

 
 
Accounts Payable—Affiliated Companies, net
99

 
190

 
 
Accrued Interest
73

 
67

 
 
Clean Energy Program
185

 
142

 
 
Deferred Income Taxes

 
30

 
 
Obligation to Return Cash Collateral
120

 
119

 
 
Regulatory Liabilities
271

 
43

 
 
Other
296

 
314

 
 
Total Current Liabilities
2,122

 
2,237

 
 
NONCURRENT LIABILITIES
 
 
 
 
 
Deferred Income Taxes and ITC
4,538

 
4,406

 
 
Other Postretirement Benefit (OPEB) Costs
807

 
839

 
 
Accrued Pension Costs
26

 
27

 
 
Regulatory Liabilities
141

 
233

 
 
Regulatory Liabilities of VIEs
12

 
11

 
 
Environmental Costs
386

 
363

 
 
Asset Retirement Obligations
286

 
274

 
 
Long-Term Accrued Taxes
78

 
72

 
 
Other
63

 
47

 
 
Total Noncurrent Liabilities
6,337

 
6,272

 
 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 8)


 


 
 
CAPITALIZATION
 
 
 
 
 
LONG-TERM DEBT
 
 
 
 
 
Long-Term Debt
5,763

 
5,066

 
 
Securitization Debt of VIEs
68

 
259

 
 
Total Long-Term Debt
5,831

 
5,325

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

 
892

 
 
Contributed Capital
695

 
520

 
 
Basis Adjustment
986

 
986

 
 
Retained Earnings
4,052

 
3,487

 
 
Accumulated Other Comprehensive Income
2

 
1

 
 
Total Stockholder’s Equity
6,627

 
5,886

 
 
Total Capitalization
12,458

 
11,211

 
 
TOTAL LIABILITIES AND CAPITALIZATION
$
20,917

 
$
19,720

 
 
 
 
 
 
 

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


14

Table of Contents



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

 
 
 
 
 
 
 
 
Nine Months Ended
 
 
 
September 30,
 
 
 
2014
 
2013
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
  Net Income
$
565

 
$
468

 
 
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
 
 
 
 
 
Depreciation and Amortization
682

 
658

 
 
Provision for Deferred Income Taxes and ITC
93

 
153

 
 
Non-Cash Employee Benefit Plan Costs
21

 
117

 
 
Cost of Removal
(68
)
 
(66
)
 
 
Change in Accrued Storm Costs
(3
)
 
(87
)
 
 
Net Change in Other Regulatory Assets and Liabilities
276

 
134

 
 
Net Change in Certain Current Assets and Liabilities:
 
 
 
 
 
Accounts Receivable and Unbilled Revenues
71

 
48

 
 
Materials and Supplies
(15
)
 
(4
)
 
 
Prepayments
(92
)
 
(109
)
 
 
Accounts Payable
(3
)
 
3

 
 
Accounts Receivable/Payable—Affiliated Companies, net
(113
)
 
(171
)
 
 
Other Current Assets and Liabilities
(6
)
 
29

 
 
Employee Benefit Plan Funding and Related Payments
(67
)
 
(147
)
 
 
Other
2

 
23

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

 
1,049

 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Additions to Property, Plant and Equipment
(1,493
)
 
(1,628
)
 
 
Proceeds from Sales of Available-for-Sale Securities
98

 
35

 
 
Investments in Available-for-Sale Securities
(96
)
 
(16
)
 
 
Solar Loan Investments
2

 
(11
)
 
 
Restricted Funds
(1
)
 

 
 
Net Cash Provided By (Used In) Investing Activities
(1,490
)
 
(1,620
)
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Net Change in Short-Term Debt
(60
)
 
(263
)
 
 
Issuance of Long-Term Debt
1,000

 
1,500

 
 
Redemption of Long-Term Debt
(500
)
 
(450
)
 
 
Redemption of Securitization Debt
(170
)
 
(162
)
 
 
Contributed Capital
175

 
100

 
 
Other
(11
)
 
(17
)
 
 
Net Cash Provided By (Used In) Financing Activities
434

 
708

 
 
Net Increase (Decrease) In Cash and Cash Equivalents
287

 
137

 
 
Cash and Cash Equivalents at Beginning of Period
18

 
116

 
 
Cash and Cash Equivalents at End of Period
$
305

 
$
253

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

 
$
174

 
 
Interest Paid, Net of Amounts Capitalized
$
188

 
$
199

 
 
Accrued Property, Plant and Equipment Expenditures
$
238

 
$
200